Overview of Low-Income Restructuring
Legislation and Implementation

Illinois
Last updated
February 2008

Illinois has had ten years of experience in operating a Supplemental Low-Income Energy Assistance Fund (SLEAF), created through restructuring legislation passed in November 1997. Paid for by a surcharge on electricity and natural gas bills, the legislation earmarks 80 percent of the fund for low-income bill payment assistance.

During FY 2007 around $65 million from the SLEAF provided energy assistance benefits in Illinois and about $7 million was used for low-income weatherization. About 320,000 households received energy assistance from combined state and federal funds.

In August 2007, the Illinois legislature extended the SLEAF, otherwise scheduled to sunset at the end of 2007, through December 2013. The fund is administered by the Department of Healthcare and Family Services (DHFS), the LIHEAP and weatherization grantee, through the state LIHEAP network and in coordination with LIHEAP. DFHS makes payments from the fund directly to utilities. SLEAF funds may be used only for assistance to low-income customers of the regulated gas and electric utilities that assess the surcharge. Most of the state’s municipal and rural cooperative utilities do not assess the charge, so their LIHEAP customers cannot benefit from SLEAF funds, although they can receive LIHEAP.

The surcharge is $0.40 per month on each residential electric service account and the same amount on each residential gas service account, $4 per month on non-residential gas and electric accounts with less than 10 megawatts of peak demand the prior year and $300 per month on nonresidential accounts that had 10 megawatts or greater of peak demand during the previous calendar year.

Illinois' restructuring legislation allows 10 percent of the state fund to be spent on low-income weatherization and 10 percent on program administration. Under the state-funded weatherization component, average funding is about $7 million per year, and around 1,110 households are served, with a limit of up to $7,500 per household. These are households that normally couldn’t be served under the federal weatherization program because their dwellings need roof replacements or other major repairs.

While the fund was extended for another six years, some entities have sought changes in Illinois’ energy assistance program for a number of years. The culmination of the drive for change will be the start of a Percentage of Income Payment Plan (PIPP) pilot in June of 2008. While the plans hadn’t been finalized as of early 2008, the pilot is expected to enroll up to 18,000 low-income electrically-heated customers of Ameren, a utility serving southern Illinois.

After an electric rate relief package was approved in Illinois in the fall of 2007, utilities, advocates, and the DHFS agreed to move forward with the PIPP pilot using Ameren rate relief funds to help pay pre-program arrears of participating households. These households will be required to make a payment on their current electric bill that is limited to a percentage of their income, probably 10 percent, and LIHEAP and SLEAF funds will also cover a portion of the bill.

Under the rate relief settlement, each of the major electric utilities, Commonwealth Edison and Ameren, agreed to fund rate relief programs that included low-income initiatives for the next several years. Ameren will provide over $30 million for several low-income assistance programs, including the PIPP pilot, for which $6 million has been allocated over four years.

Background

Activities related to improving energy assistance in Illinois have included the following.

The advocacy group ACORN has several times introduced legislation to create a PIPP-type program under which LIHEAP-eligible households would pay no more than a certain percentage of their annual income for gas and electric service. The state’s largest gas utility, People’s Gas, serving Chicago and the surrounding area, presented a white paper in March 2004 titled “Improving Energy Assistance in Illinois.” The state community action association, part of a working group of advocates, energy policy advisors, researchers, and community leaders called the Illinois Affordable Energy Campaign (IAEC), has also advocated program changes at the legislative level.

The IAEC published a paper outlining an Affordable Energy Plan in September 2004. The paper called for a PIPP under which most low-income households would pay no more than 10 percent of their income for energy. The proposed program would also include greater targeting of energy efficiency services, more efficient use of crisis funds, an arrearage reduction component, a hedging strategy to achieve better gas prices, and more stringent reporting requirements for utilities regarding past due accounts and disconnections.

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Page Last Updated: February 25, 2008