Indiana Pilot Begins Jan. 1 for Gas Customers

On August 18, the Indiana Utility Regulatory Commission (IURC) approved a two-year pilot program to help low-income natural gas customers with their gas bills and weatherize their homes.

Called the Universal Service Program (USP), it is the result of an agreement among two of the state’s gas utilities (Citizens Gas and Vectren), the Indiana Office of Utility Consumer Counselor (OUCC), the Citizens Action Coalition of Indiana (CAC) and a group of manufacturing and health providers (See LIHEAP Networker # 50.)

Beginning Jan. 1, 2005, eligible customers who have applied for the state’s LIHEAP through local community action agencies will automatically be enrolled in the new USP and will receive bill reductions in addition to LIHEAP. Monthly bill reductions will range from 9 percent to 32 percent of the total bill (not including LIHEAP benefits), depending on the consumer’s income level and utility provider. For example, a family of four with an annual income of $23,000 would see a total monthly bill reduction of approximately 40 percent for Citizens Gas and 50 percent for Vectren.

The pilot USP will also provide additional funding to both utilities’ weatherization programs which target qualifying low-income households with high energy use. The programs help those consumers improve the energy efficiency of their homes, resulting in cost savings year-round.

Funding for the Citizens Gas USP will be recovered first from existing state LIHEAP and federal energy assistance dollars and then from various Citizens Gas support programs, including its Warm Heart Warm Home assistance fund. Additional money, if needed, would be recovered from Citizens’ annual Customer Benefit Distribution (CBD), which is funded by income from Citizens’ unregulated subsidiaries. The CBD, which reduces all customer bills on an annual basis, was established in a previous agreement among the OUCC, Citizens and several other parties involving ProLiance Energy, LLC.

Vectren USP funding will initially be recovered from the existing stream of state EAP and federal energy assistance dollars, followed by funding from the utility’s "Share the Warmth" assistance fund. Through "Share the Warmth," Vectren annually donates $500,000 in heating assistance and matches individual donor "Share the Warmth" contributions up to $200,000. If additional money is necessary, Vectren would assess a small monthly per-unit charge to all of its Indiana customers. This charge, for an average customer, is not expected to exceed $0.59 per month.

Approximately 21,000 Vectren customers and approximately 16,000 Citizens customers are expected to participate in the two-year pilot.