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LIHEAP Makes a Difference, NEADA Study Shows

Results from the National Energy Assistance Directors’ Association (NEADA) National Energy Assistance Survey Report, released April 26, detail the adverse impacts of unaffordable energy bills on LIHEAP recipients.

The survey, one of the largest ever conducted of the LIHEAP recipient population, documented that "low-income households spend an inordinate amount of their household income on energy, households that receive LIHEAP face significant hardship in attempting to pay their energy bills, and yet, LIHEAP makes a significant difference for recipient households."

Among the study’s findings:

• Impact on Health: 22 percent of LIHEAP recipients went without food for at least one day, 38 percent went without medical or dental care, 30 percent went without filling a prescription or taking the full dose of a prescribed medicine, 21 percent became sick because their home was too cold, 7 percent became sick because their home was too hot, and 5 percent reported that an illness resulted in a doctor or hospital visit. Twenty percent of recipients said that they were not able to pay their energy bills due to medical expenses.

• Impact on Shelter: 28 percent of LIHEAP recipients did not make a rent or mortgage payment, 9 percent reported that they moved in with family or friends, 4 percent were evicted, and 4 percent were homeless

• Some LIHEAP recipients faced life-threatening challenges: 17 percent of LIHEAP recipients were unable to use their main source of heat due to discontinued utility service or an inability to pay for fuel, and 8 percent had their electricity shut off due to nonpayment.

• Even with LIHEAP assistance, families have to take drastic actions to pay their energy bill: 78 percent reduced basic expenses for household necessities to afford their energy bill; 30 percent used their kitchen stove for heat, and 51 percent paid less than their entire home energy bill.

"This report shows that families who can’t pay their home energy bills not only can’t keep the family warm – they have agonizing problems keeping them fed or healthy," said Mark Wolfe, executive director of NEADA. "The survey shows clearly that LIHEAP works," Wolfe added, pointing to figures that showed the number of recipients spending over 25 percent of their income on energy declined by two thirds with LIHEAP help.

The study was conducted by APPRISE Incorporated under contract to NEADA through funding provided by the Administration for Children and Families, Department of Health and Human Services.

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NLIEC Highlight is Dialogue on Energy Poverty

Featured at the National Low Income Energy Consortium’s (NLIEC) 18th annual low-income energy conference in June is a plenary session titled "A Dialogue on Energy Poverty." The plenary expands on a study conducted by NLIEC this past winter that examined the magnitude and effects of energy poverty on low-income families throughout the state of Missouri.

The study is based on a survey undertaken during the winter of 2003-04 that was distributed throughout Missouri through its community action agencies to representatives of low-income households that visited their offices to request LIHEAP or other low-income assistance. Responses were received from 822 households.

Questions on the survey were organized in categories that addressed type of energy assistance received, constraints on energy usage and household necessities, nonpayment of energy bills, and financial strain.

In the plenary session Roger Colton, survey administrator and chief analyst, will introduce the survey findings and facilitate a dialogue between local and national experts to examine the various and interrelated hardships that poverty, and specifically energy poverty, causes on the lives of children, families, and seniors. The dialogue will include the short and long-term impact of these hardships and measures that can be implemented to help change the lives of those directly affected by energy poverty.

Plenary speakers include Robert Brand, Solutions for Progress; Dianna Moore, Missouri Association for Social Welfare; Rolandis Nash, Urban League of Metropolitan St. Louis; and Deborah Weinstein, Coalition on Human Needs. Following the initial dialogue, breakout sessions will provide an opportunity for Colton, plenary speakers and additional presenters to provide further information in specialized areas.

According to Sue Present, executive director of NLIEC, there were several reasons why Missouri was chosen for the study. First, the plenary on poverty is an effort to update and expand previous research that Colton conducted in Missouri. In 1994 -1995, he implemented a study to evaluate if, and to what extent, unaffordable home energy bills contribute to frequent household mobility and, if that is a factor, in the educational problems facing students in those households.

Additionally, no information of this type has been gathered about Missouri through other sources, Missouri has both hot and cold weather issues, is both rural and urban and, being in America's heartland, the Missouri survey results are likely to have an impact across the United States.

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Indiana Gets Supplemental Funding; Gas Utilities Propose USF

Indiana has had supplemental funding – mostly due to settlements with gas companies – to help its low-income households weather the last two heating seasons. And, if all goes well, the gas companies will create a universal service fund that will provide about 32,500 of their low-income customers a discount on their gas bills through November 2006.

In early March, two of the state’s major gas companies, Citizens Gas and Coke and Vectren, along with the Indiana Office of Utility Consumer Counselor, proposed a universal service fund program providing a gas discount averaging 40 to 50 percent for their customers who are LIHEAP recipients.

The universal service fund would be supported by combining LIHEAP funds and monies from the Citizens Gas’ Warm Heart Warm Home energy assistance fund and Vectren’s Share the Warmth energy assistance program. Additional funding would come from a portion of Citizens Gas’ annual Customer Benefit Distribution, which comes from funds provided by its unregulated subsidiaries. Vectren’s additional funding would come from a monthly surcharge on its Indiana customers.

Customers would enroll through community action agencies, which administer LIHEAP in Indiana. The discounts would be tiered based on income levels and energy burden. Both companies would also set aside funding for weatherization, which would be targeted to households with the highest energy consumption.

Greg Sawyers, director of customer service for Citizens Gas, said Vectren and Citizens began discussing the possibility of such a fund last year and Sawyers attained additional helpful information from attending the National Low Income Energy Consortium conference last June in Sacramento and consulting a utility in Pennsylvania that has a similar program.

Sawyers said the program will begin as soon as approval comes from the Indiana Utility Regulatory Commission (IURC). Although a group of industrial customers has filed an objection to the fund, he is optimistic that it will be approved. Support for the concept has come from the state’s utility regulatory commission, legislative leaders, the state community action association, the Indiana Energy Association, representing gas and electric utilities; and AARP.

During the past two winters, low-income households in Indiana have benefited from the following:

• In response to gas price spikes during the past winter, Vectren contributed $1.1 million in heating assistance. Some $500,000 came from the Vectren’s Share the Warmth Fund and $610,000 came from a June 2002 settlement (see below). The funds were available to Vectren’s LIHEAP-qualified customers, who were eligible for up to $300 to help with past due bills.
  
• Citizens Gas and Coke contributed $400,000 to its Warm Heart Warm Home foundation for direct heating assistance and an additional $200,000 for weatherization projects each of the past two winters. Citizens added $550,000 to a "Keep The Heat On" program last heating season from the June 2002 settlement.

• Starting in late January, NIPSCO, a gas and electric utility serving northern Indiana, provided an additional $656,000 for gas heating bill aid. The money was part of $3.8 million the IURC ordered NIPSCO to refund its customers in 2003 because of consumer complaints about the utility’s high gas prices early that year. Administered by the Salvation Army, the money helped customers with incomes between 126 percent to 250 percent of the federal poverty guidelines, providing them a one-time grant of up to $300.

• During 2003, $1.7 million from the June 2002 settlement was transferred to low-income energy programs, including $1 million to Indiana’s LIHEAP. Another $400,000 went toward weatherization and repair and replacement of gas heating systems.

The June 2002 settlement, referred to as the ProLiance settlement, resolved issues related to ProLiance Energy, LLC, created as a joint venture of Citizens and Vectren, with the purpose of purchasing gas for the utilities on the competitive wholesale market. After industrial and consumer entities questioned the purchasing practices of the joint venture, the IURC investigated and, through the settlement, required the utilities to provide $21 million, less legal fees, for payments to customers of the gas utilities.

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Enrollment Changes Dump Thousands from Texas Low-Income Discount

The LITE-UP Texas program, held up as a model low-income discount program for its automatic enrollment process, has significantly changed that process to the detriment of low income households.

Since the new enrollment process went into effect in January 2004, LITE-UP enrollment has declined by some 55 percent, from 758,000 households to less than 338,000 during April, according to the Texas Legal Services Center (TLSC).

The discount, established as part of Texas’ electric restructuring legislation, requires all electric providers to provide a minimum discount of 10 percent to low-income customers who receive benefits such as food stamps or medical aid from the Texas Department of Human Services (TDHS), or who certify that their income is below 125 percent of federal poverty guidelines. The rate discount for most of 2003 was 17 percent; however, in a cost cutting move due to a state budget deficit, the legislature reduced it to 10 percent for 2004. Participating households save an average of $10 per month.

Most customers are qualified through a computer matching process between the TDHS client records and those of ERCOT, the organization that operates the state’s transmission and customer registration systems. Until recently, TDHS address records were matched with the service address records supplied by ERCOT. A list of eligible matches was then provided, along with the self-certified enrollees, to each respective retail electric provider.

In January, the Texas Public Utility Commission changed the rules for its Low Income Discount administrator and, under the new procedure, customer names, social security numbers, and addresses from TDHS records must match up with those of the current electric retailer or the household will be dropped from the discount program. If a household has children on Medicaid or welfare, but the name listed on the customer account does not match up with an adult name, the family will be determined ineligible. This particularly hurts immigrant households where parents do not seek welfare benefits to avoid difficulties in securing legal status, according to TLSC.

Rules were also changed for those who self-certify their income; these households must now submit proof of their income or be removed from the program. This change has resulted in 37,000 customers being removed from the program since January, TLSC said in a fact sheet.

For more information, contact Chapman at 512-477- 6000.

 
Alabama REACH Focuses on Mobile Home Dwellers

The Alabama Department of Economic and Community Affairs (ADECA) will use its $1 million Residential Energy Assistance Challenge (REACH) award to target energy efficiency services to low-income mobile home dwellers.

Four community action agencies, encompassing 22 counties in northwest, eastern and southeastern Alabama are sharing the 2003 REACH award.

The three-year project, REACH for Energy Savings in Alabama, began in October 2003 and addresses the long-term energy consumption problems of 160 mobile home owners. The program utilizes a holistic approach to energy efficiency services, intensive education and developing effective community partnerships. To qualify for the REACH project, participants must be eligible for LIHEAP, own a mobile home that is at least 10 years old and be on a waiting list for the federal Weatherization Assistance Program.

According to Brenda Jones, REACH Program Manager at ADECA, mobile homes were chosen for the project because of their high energy consumption and because there are a large number of them in Alabama. According to 2000 census data, mobile homes represent over 16 percent of all housing units in Alabama.

At the beginning of the project, REACH participants were divided equally into two groups, a basic group and an enhanced group. Both groups receive energy education, LIHEAP, standard weatherization and a utility usage evaluation.

Initially, an in-depth investigation of the household's energy usage during a 12-month period identifies the appliances that use the most energy. This information will be used as a baseline measurement of energy usage and to evaluate the household's energy habits and make suggestions for modifying high-usage and high-cost behaviors.

Standard weatherization assistance for both groups may include installing insulation, replacing or repairing windows and doors, sealing air leaks, patching small areas of the roof, or adding underskirting.

Each household chosen for the enhanced group receives a needs assessment and structural assessment for their mobile home to determine the intervention activities that will be recommended for the dwelling and the family.

Additional weatherization measures for the enhanced group include repair or replacement of inefficient appliances such as refrigerators, water heaters or heating and cooling units. Solar screens are installed on east and west facing windows to absorb or dissipate the sun's heat and mobile home roofs are painted with a reflective coating.

The enhanced group also receives budget and financial management counseling and energy bill payment assistance, including LIHEAP and a one-time $50 incentive award credited to a participant's energy bill when their utility bills are paid on time for four months.

After both groups have received applicable energy efficiency measures, energy usage data will be collected for one year and compared with the year's data that was collected at the beginning of the project to determine the amount of savings.

Expected intermediate and long-term results include: changed behavior due to energy education, reduced energy bills, arrears, utility service terminations and dependency on energy assistance programs; and increased health and safety in the home. Budget counseling, a greater knowledge of community resources and problem-solving techniques will give a family tools to avoid future energy and budgetary crises.

For more information, contact Brenda Jones at 334-242-5376.