States Act to Provide Energy Assistance Funds

From November through mid-February, five states have reacted to rising energy costs to provide state or ratepayer-funded resources to supplement LIHEAP.

Massachusetts: Governor Deval Patrick on November 20 signed a $15 million bill to help low-income households heat their homes. The money allowed the state to raise the average LIHEAP benefit from $715 to $865. The emergency appropriation passed swiftly. However, with the cost of heating oil averaging around $3.30 per gallon in mid-January, agencies were predicting that the state funds would soon be exhausted and they planned to seek another state allocation.

Indiana: In November, the Indiana Utility Regulatory Commission extended three natural gas rate assistance programs through May of 2009, effective December 1. The three utilities, Citizens Gas, Vectren Energy Delivery and NIPSCO, have operated their programs since the winter of 2004-05.  The programs will provide an annual total of about $2.5 million in assistance to Citizens Gas customers and about $5 million in assistance to Vectren customers. NIPSCO’s program has a budget of about $4.5 million.

For Citizens’ customers, monthly bill reductions range from 10 percent to 25 percent of the total bill, not including LIHEAP; Vectren customers’ monthly bill reductions range from 15 to 32 percent of the total bill, not including LIHEAP. NIPSCO’s program participants can receive up to $450 annually and eligibility was expanded to those with incomes up to 200 percent of FPG, in addition to those who have a financial hardship.

Connecticut: High-arrearage households will benefit from $2.5 million in state funds for a program to help them pay their overdue bills. The money was allocated to a statewide fuel fund, Operation Fuel, which will administer a one-time program offering grants of up to $1,000 based on an applicant’s arrearage and income level. The funds can only be used for overdue balances up to 24 months old. The program will also provide budget counseling and help with utility payment programs.

The Connecticut legislature allocated $5 million for Operation Fuel last year, but in June Governor Jodi Rell vetoed that and other funding due to concerns about exceeding the state’s spending cap. The Governor later supported adding the Operation Fuel funding to the 2008 budget. Another $1.75 million of the $5 million will expand Operation Fuel and $750,000 will go toward improving its technical and case management infrastructure.

Missouri: Governor Matt Blunt on February 1 signed legislation making $6.4 million available to help low-income Missourians with their winter utility costs.

This is the third year in a row that Missouri has provided state funds for its Utilicare program, which was created in 1979, but hadn’t been regularly funded. Blunt said the money should help about 10,000 Missourians. Utilicare received $6.3 million last year and $6.1 million in 2006.  It is distributed by the state’s community action agencies, which also distribute LIHEAP funding. 

Michigan: As it has done at least once per year since 2002, the Michigan Public Service Commission on November 8 awarded energy assistance and energy efficiency grants to a number of Michigan organizations to help low-income customers this winter.

Of the $70 million, about $50 million went for energy assistance, including $30.9 million to the Department of Human Services (DHS), the LIHEAP office, of which $25.9 million will be spent under the crisis program to prevent shut-offs of energy services, and for deliverable fuel fills and furnace repairs. The remaining $5 million is for an arrearage payment program that covers 50 percent of participant arrears, up to $2,000, with energy providers paying the other 50 percent. Households enrolled under Michigan’s Winter Protection Plan are targeted for the program. Several nonprofit agencies received nearly $20 million for various energy assistance programs and $14 million went for energy efficiency programs operated by DHS and nonprofits.

Also, Ohio, for the fourth year in a row, has allocated TANF funds for energy assistance – $45 million this year. Families with minor children in the home may qualify for up to $400 toward their heating bills if their income is between 175 and 200 percent of federal poverty guidelines. Indiana has $6.9 million from a special allocation of TANF funds to be spent on energy assistance.

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Data Source for Program Income Determination Changes

The application of a new data source for determining income eligibility levels for LIHEAP has reduced eligibility for the program in a number of states this year.

For FY 2008, the Census Bureau revised its methodology in preparing state median income (SMI) level estimates by using direct estimates derived from the American Community Survey (ACS), a new Census Bureau product, instead of using the model-based estimates it had used in previous years.

The details of the changes were published in a Federal Register notice announcing the FY 2008 SMI estimates on March 28, 2007 (72 FR 14579).

Per the LIHEAP statute and regulations at 45 CFR 96.85(a) states must adjust their income eligibility criteria yearly so that they are in accord with the most recently published update of the guidelines or estimates. 

As a result, SMI levels were changed in nine states from 2007 median income levels. In the District of Columbia, which had the most dramatic change, the FY 2007 LIHEAP maximum, 60 percent of SMI, was $38,988 for a family of four. Under the ACS standards, it fell by 22.7 percent to $30,149 for FY 2008. 

As a result, many FY 2007 LIHEAP recipients in the District weren’t income eligible in FY 2008.  Similarly, in North Dakota, which uses a 60 percent SMI maximum for LIHEAP, the FY 2007 maximum for a family of four was $41,023; it fell to $35,956, or 12.7 percent, for FY 2008. 

Some states had the opposite impact from the use of ACS; for example, in Rhode Island, the SMI for LIHEAP eligibility rose from $43,624 to $46,978, or 7.7 percent.

The new Census Bureau guidelines impacted only those states – nine according to Clearinghouse records  – that use 60  percent of SMI as their LIHEAP income maximum.   Those that use federal poverty levels, which the majority of states do, were not impacted because those guidelines didn’t decline.

In November, the National Energy Assistance Directors’ Association wrote a letter to the HHS outlining its concerns about HHS’s use of the new data source. HHS responded that the LIHEAP statute and implementing regulations do not authorize it to adjust or waive current SMI levels for one or more states. Acknowledging that the Department of Housing and Urban Development (HUD) has allowed states discretion in setting eligibility levels, HHS noted that regulations for HUD are different than  those for LIHEAP. 

The state median income guidelines for FY 2007-08 are located on HHS's website. The SMI table for FY 2008-09 will be available later this year.

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KeySpan Expands Programs in New York

Effective January 1, a gas low-income discount rate offered by KeySpan Energy Delivery New York (KEDNY) was expanded to 60,000 customers and KeySpan Energy Delivery Long Island (KEDLI) began a low-income discount program for the first time.

The programs were approved by the New York State Public Service Commission in December as part of five-year rate plans for the two companies.

KEDNY’s existing Residential Reduced Rate Programs serves about 50,000 households yearly. Income eligibility is the same as the state’s LIHEAP, up to 60 percent of state median income. The monthly minimum charge, which includes the first three therms, is discounted by $2.50 per month for non-heating and $9.50 per month for heating customers and the second block delivery rate (for the next 47 therms) is discounted by $.2646 per therm. The annual cost of the discount is projected to increase from $1.3 million to $7.4 million.

Under KEDLI’s new program, up to 30,000 residential customers would be eligible for the same discounts as KEDNY customers except the second block delivery rate for the next 47 therms would be discounted by $.3622 per therm. The annual cost of the discount is projected to total $4.8 million.

Households receiving LIHEAP are automatically enrolled in the discounts and there will also be outreach through targeted mailings to Long Island customers.

The two companies also began energy efficiency programs last year; low-income funding for KEDNY was $2.2 million and Long Island, $1.1 million. About 1,200 homes were targeted for weatherization.

Finally, both KEDNY and KEDLI have arrearage management programs called “On-Track” that provide financial assistance and education for payment-troubled heating customers. The maximum number of participants for each was increased, from 1,200 to 2,400 customers for KEDNY and from 200 to 400 customers for KEDLI. Applicants need minimum arrearages of $400 or more to be eligible.

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Arizona Statewide Fuel Fund Begins Operations

Arizona’s statewide fuel fund, reportedly the first one established by a warm weather state, is up and running as of October 1, 2007. The Home Energy Assistance Fund was enabled through a recent settlement with El Paso Corporation that provided $3 million for low-income energy assistance.

Of the $3 million, $2.3 million is available from the state for customer assistance, to be drawn down as a match to the fuel fund's fundraising activities. (See related newsletter article.) Matching grants so far have come from a local foundation, several utility companies and numerous smaller fundraising activities.

Intake workers at 37 Community Action Agencies (CAAs) across the state interview clients and determine eligibility for the funds. Eligibility is capped at 200 percent of federal poverty guidelines. Other eligibility guidelines consider utility service status (shut-off notice, disconnected or high arrearages), energy burden, at risk home and the client’s sincere efforts to pay. At risk households include members 60 years or older, children 6 years or younger and those with members with a medical condition or disability. Households that are over the income limit and in a crisis may be helped. Crisis criteria include sudden loss of income, increase in expenses or health and safety issues.

A statewide Internet application and database is in place for use by the CAAs. In the future the Internet-based application may be available to the public to accommodate homebound applicants.

Funds are available year-round for heating assistance, regardless of fuel type, and for cooling assistance. Eligible households can receive one grant of up to $500 per 12-month period that may be split between heating and cooling. Grants can pay current charges, deposits, past due fees and arrearages and may be coordinated with other funds such as LIHEAP and weatherization.

According to Jeff Jameson, Director of Energy Programs, 1,000 households are expected to receive assistance from the fund this fiscal year. He said additional outreach isn’t needed because only about 5 percent of the eligible population in Arizona receives LIHEAP.

In addition to utility bill assistance, the fund’s long range goals include energy conservation education, bill payment assistance for water and sewage and more emphasis on deliverable fuels.

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Energy Affordability Coalitions Take On
Challenges in Florida and Nebraska

Energy Affordability Coalitions have formed in many states with varying goals such as building energy assistance program awareness, assessing low-income needs, identifying leveraging opportunities and educating low-income families about energy efficiency. Two recently-formed coalitions are in Florida and Nebraska .

Florida: The Florida Energy Affordability Coalition (FLEAC) is taking on the challenge to identify and advance opportunities and projects that maximize payment assistance resources to Florida ’s low income.

FLEAC goals include assessing needs, expanding assistance, encouraging personal responsibility for managing energy costs through energy education and conservation, developing partnerships to leverage and coordinate resources and endorsing public policies that help increase energy security for low-to- moderate income families.

FLEAC partners include all major Florida electric utilities, state associations for municipals and cooperatives, the Department of Elder Affairs, Public Service Commission, Council on Aging, Department of Community Affairs (CDA), and the Salvation Army, among others.

According to Hilda Frazier, operations manager at CDA, the state LIHEAP provider, the FLEAC is a great platform to get to know people on a one-to-one basis and build relationships with utilities and community groups.

The coalition’s first year was devoted to organizing. This year it’s looking at energy affordability and hopes to be a vehicle for recommending legislation for additional energy assistance resources. The coalition plans to propose legislation this year that would designate escheat funds (utility deposit funds that have been unclaimed) to establish a statewide energy assistance fuel fund.

Other states, such as New Jersey and Colorado, have successfully acquired escheat funds through legislation that directed these funds to their statewide fuel funds.

For more information, visit FLEAC’s website.

Nebraska: NEAN, the Nebraska Energy Assistance Network, has been helping low-income families find solutions to energy affordability since forming in early 2006..

NEAN is a statewide coalition that started with an agreement among 10 organizations. It now has 24 entities that include all the regulated gas utilities, a majority of the public power districts, community action agencies, the state energy office, the state LIHEAP provider, and the Public Utility Commission.” Yet, there is room to grow,” according to Judi Martin, NEAN chair, who also serves as Community Support Coordinator for Omaha Public Power District. “That’s especially true with the municipals and small faith- based groups”, according to Martin.

NEAN’s objectives encompass energy efficiency education, helping customers understand and manage energy costs, and informing customers of energy-related resources available within their community. Members also plan an energy burden study and collection of disconnect and arrearage data. 

Last year NEAN held 27 forums, including 20 at senior centers, and distributed 800 weatherization kits consisting of 12 energy saving items and an energy savings guide.

The first set of forums featured local utility representatives who provided information on how to work with utilities, how to establish pay plans and what resources were available for assistance. Energy efficiency specialists from the local weatherization program or utility gave presentations at other forums.

The Omaha Public Power District (OPPD) and the University of Nebraska at Omaha (UNO) partnered the first year to research learning behaviors, including what can be done to change behaviors and to find alternatives to shutoffs. UNO developed a statewide survey to characterize behaviors and needs in low-income households and OPPD provided funding for weatherization kits and community forums.

Participants were also surveyed about their opinions of the kits and what items were used most and least. This information was used to select items for the following year’s kits.

NEAN’s second-year education program kicked off in November and will be in full production by the end of February. The target group is families with young children that have been identified through the Head Start program.

Head Start personnel, armed with an educational DVD, educational curriculum and weatherization kits, work with families in their homes. Topics addressed include budgeting, health and safety, and energy efficiency education that includes children. They also inform the household about available resources in their community, how to find an energy efficient house and how to effectively communicate with their landlord and utility providers. Initial participation is limited to 1,250 homes across the state, from inner city to rural.

Nebraska Public Power District provided funding for the weatherization kits and the DVD, which is also used for presentations to other focus groups.It’s a collaboration, Martin emphasized, adding that all coalition members provide funding and materials and help design and produce the energy education materials.

OPPD is also funding a statewide energy burden study with gap analysis that will be modeled after the APPRISE Arizona poverty study. And, by the end of February a statewide collection of disconnect and delinquent bill data from utilities will be completed for 2007. In 2008, similar data will be reported quarterly. According to Martin, this type of data is needed to better target programs and is the missing part of the puzzle.

Visit NEAN’s website for more information.

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Other Resources Help Meet Needs Around Country

During this winter of pressing energy needs, resources other than LIHEAP are being tapped, and in most cases, are stretched to the maximum.

For example, some states require towns and cities to provide emergency welfare services to the poor, funded by local property taxes. These programs pre-date LIHEAP and welfare, with New Hampshire’s requirement for municipal assistance dating back to the 1840’s.

Although local entities can adopt their own assistance guidelines, assistance generally includes payments to landlords and utilities for rental and utility assistance, vouchers for food and clothing, and burial expenses. New Hampshire has claimed the amount spent by towns for energy assistance under the LIHEAP leveraging incentive program; the amount averages about $2 million per year.

When LIHEAP is operating, the towns do outreach and refer applicants to the community action agencies that administer LIHEAP. These agencies may assign representatives to town halls to take applications. When LIHEAP funds are expended, the agencies then refer people back to the towns. Assistance is provided in the form of vouchers or direct payments to vendors.

According to a recent news article from the city of Salem, the program wasn’t designed to handle a large demand. Officials there hoped the $11,500 they had budgeted would be sufficient, but said that they are required to provide assistance and to come up with funding.

Indiana also has a nineteenth-century statute requiring towns and townships to fund through property taxes "poor relief" that includes housing, utility, food, and medical assistance. In Indiana, townships are local governmental units within counties and cities, with their own elected officials. Indiana newspapers advise people to visit their town trustees as a last resort. Indiana also claims energy relief from townships as a leveraged resource and these payments have averaged about $4 million per year since 2000.

In Maine, “general assistance” programs exist as a last resort in every city and town to help the poor with a variety of needs, including emergencies. The state partially matches city and town expenses. Some towns reported having trouble meeting this winter’s requests for heating oil. Maine reports less than $1 million yearly in energy assistance payments.

Additionally, two Maine cities, Bangor and Lincoln, voted recently to fund heating oil programs targeting residents who don’t qualify for general assistance or LIHEAP. The towns also solicited donations to the programs.

Also in Maine, donations have come from a wide range of sources. Eastern Maine Funders, a collaboration of private and public entities, committed $521,000 to provide weatherization, furnace maintenance and fuel assistance for five counties in eastern Maine. Donors were foundations, United Way, energy companies and banks.

In Chicago, a donation of $25,000 to the Salvation Army by U.S. Energy Savings Corp. went to the Salvation Army's Energy Assistance Program, allowing about 125 additional families to receive an extra month of heating.

In Massachusetts, a credit union offered a home-heating loan program to help its members pay oil bills. The Fall River Municipal Credit Union offered up to $1,000 in energy assistance to existing members, who must pay the loan back over a 10-month period at a 5.5 percent interest rate. Loan funds were deposited into a member's special utility account. When members brought their heating bills to the credit union, it then paid vendors directly using funds from the account.

A bank in Southbridge provided $100 grants for senior citizens in its service area who needed help paying for home heating costs. The $7,000 fund was for seniors who could not afford a minimum 100-gallon delivery of fuel.

The Central Vermont Public Service Corp. solicited matching funds to its fuel fund, Shareheat. Other business such as the Vermont Country Store, Vermont State Employees Credit Union and other business raised $32,000.

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California Solar Initiative Expands to
Include Low-Income Homeowners

The California Public Utilities Commission (CPUC) on November 16 adopted an unprecedented $108 million program that will deliver incentives to low-income, single-family homeowners under the California Solar Initiative program.

In January 2006, the CPUC adopted a decision that established the California Solar Initiative and committed to reserve 10 percent ($216.7 million) of the program funds for participation by low-income households.

The California Solar Initiative Single-Family Low-Income Incentive Program is the first statewide low-income solar program to be implemented at this scale, with a goal to install 3,000 megawatts of new solar systems in the state. The program will operate through December 2015, or until budgeted funds are exhausted.

The low-income program will provide incentives for solar installations on single-family, owner-occupied homes. The remaining $108 million is reserved for a low-income program for multi-family residences that is currently being developed by the CPUC.

Incentives will range from $4.75 to $7 per watt, based on a sliding scale, as compared to the general market California Solar Initiative program, which began with subsidies of $2.50 per watt. The incentives will subsidize roughly 50 to 75 percent of the photovoltaic system, and they are expected to be available to approximately 5,000 qualifying homeowners within the service area of PG&E, SCE and SDG&E.

The program will also reach out to California 's lowest-income households who cannot afford to take out loans to cover the cost of the system by providing fully-subsidized, 1kW photovoltaic systems (PV) for qualifying homeowners with incomes up to 50 percent of the area median income. The program will provide these fully subsidized systems to approximately 1,800 qualifying households.

The program is in the first stages of implementation and low-income solar incentives are not currently available. The CPUC is in the process of selecting a statewide Program Manager that should be in place by the end of the summer. Tasks will include establishing contacts with potential qualifying low-income households, partnering with community-based organizations for outreach, collaborating with county housing agencies or private lending institutions to create financing packages for applicants to cover remaining cost of the PV systems and educating low-income customers on solar technology and energy efficiency measures.

Eligible applicants will be required to enroll in the CPUC’s Low Income Energy Efficiency program and have energy efficiency measures installed prior to receiving solar incentives.

For more information visit the Go Solar California website.

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Appliance Program Helps Montana Seniors

Energy Share, a Montana fuel fund, has started a statewide pilot program to replace inefficient refrigerators and water heaters in the homes of low-income senior citizens.

The $100,000 for the pilot comes from Energy Share’s endowment earnings, along with contributions from large industries and donated labor from the Montana Building Industry Association.

The program will operate through the 10 community action agencies statewide that administer LIHEAP and the Weatherization Assistance Program. The agencies will determine eligibility through the normal weatherization eligibility process and assist qualifying households as they are identified. Weatherization technicians who are in residents’ homes to conduct weatherization will at the same time determine whether homeowners’ current refrigerators and/or water heaters are so inefficient that significant energy savings would, in effect, pay for their replacement.

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Oregon Energy Assistance Snapshot Released

Each January the Community Action Partnership of Oregon (CAPO) produces the Oregon Low-Income Energy Assistance Snapshot, reporting on the status of bill payment assistance programs throughout Oregon during a one- week period in January. This year the Snapshot covers January 14-18.

Each of Oregon’s 18 community action agencies report the status of their funding sources, the local prices for bulk fuels such as heating oil, propane and firewood, the number of clients seeking assistance that week, the length of any client waiting lists, and any human interest stories that highlight the importance of bill payment assistance programs.

According to the report, LIHEAP serves only about 24 percent of the total number of eligible households and over 9,000 households are on waiting lists for assistance. Heating oil and propane prices have increased by about 30 percent from last winter.

The Snapshot is provided to media outlets in Oregon, to the state’s Congressional delegation, and to members of the Oregon Legislature.

Effective January 1, according to Oregon Housing and Community Services, the LIHEAP office, local agencies will receive increased allocations from the Oregon Energy Assistance Program, which is funded by a meters charge assessed on customers of the state’s two investor-owned electric utilities.

Due to the passage of SB 461 by the Oregon Legislature last year, the amount collected from the utilities increased from $10 million annually to $15 million. The funds must be expended solely for low-income electric bills in the service area of the electric company from which the funds are collected. Priority is directed to low-income electricity consumers in danger of having their electricity service disconnected. The additional funds will assist approximately 12,500 more low-income households each year, and prevent service disconnections for around 35,000.

The Snapshot is available CAPO's website.

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Minnesota Utility Won’t Report Past-Due Customers

CenterPoint Energy in Minnesota has dropped its plan to start sending names of its past-due customers to credit reporting agencies, after low-income advocates challenged the plan.

These agencies typically collect individuals' credit histories and compile the results into a credit score, which can be used in loan and mortgage applications, in employment background checks, and even to access utility services in some states.

CenterPoint, Minnesota’s largest natural gas utility, had said in October it had a record amount in customer delinquencies and planned to start the practice in January, as a way to collect past- due payments and to keep costs down for all customers.  At the end of January, CenterPoint said it had over $40 million in past-due residential accounts involving about 180,250 households with an average amount due of $226 per household. 

 The company met with advocates and others and announced that as an alternative it would do more outreach to low-income households regarding LIHEAP and would lobby for increased LIHEAP funding. However, it didn’t rule out reporting past-due customers to credit agencies in the future.

Low-income advocates said the plan would not increase customer payments and would only punish families by lowering their credit scores. In other states, low-income advocates have opposed the use of credit scores charging they  are often inaccurate and they adversely affect the poor. 

For example, utilities in several states use credit scores to determine whether an applicant for utility service should be charged a deposit and, in those with electric competition, providers have denied service to those with low credit scores or poor credit history.

More information is available in the 2005 report, Red Flags For Consumer Protection Policies Governing Essential Electric And Gas Utility Services: How To Avoid Adverse Impacts On Low-Income Consumers, by Barbara R. Alexander, or the National Consumer Law Center publication The Rights of Utility Consumers, available for purchase at www.nclc.org.

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NLIEC and NFFN Join Forces for
Low-Income Energy Conference

This year for the first time, the National Low Income Energy Consortium (NLIEC) and the National Fuel Funds Network (NFFN) are combining their annual energy conferences. The National Energy and Affordability Conference will convene June 16-18 at the Adam’s Mark Hotel in Denver Colorado.

The conference will feature nationally recognized speakers, workshops and hot topics roundtables on a wide variety of issues, exhibits, and other sessions. The intent is to provide valuable information for energy assistance professionals attending the conference and build national awareness of energy poverty.

The conference will be preceded by the annual meeting of the National Energy Assistance Directors’ Association.

Visit the conference website for more information and future postings.

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Low-Income Energy Resources

The American Council for an Energy Efficient Economy’s (ACEEE) Second National Review and Recognition of Exemplary Energy Efficiency Programs was completed late in 2007. The project recognizes programs that help customers lower their energy costs and reduce energy use. Ninety energy efficiency programs in twenty different categories, including low-income, were recognized. The report, released in February, includes links to profiles of exemplary utility programs and is available on ACEEE’s website.

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