Idaho CAAs Get $1 Million More for Weatherization

Community action agencies in Idaho will have $1 million more to spend on low-income weatherization each year for the next three years as a result of an Idaho Public Utilities Commission’s (IPUC) order in a rate case of Idaho Power, the state’s largest electric utility.

The IPUC’s order increases current weatherization funding from about $225,000 to about $1,225,000 annually. The decision was based on intervention and testimony from the Community Action Partnership Association of Idaho, (CAPAI) which represents the six community action agencies, a migrant council and one weatherization agency across the state who deliver weatherization and energy assistance services. The new funding began June 1 and will allow CAPAI to fully weatherize 440 homes per year. The Northwest Energy Coalition also testified in favor of the increase.

"The Commission believes that funds devoted to LIWA (low-income weatherization assistance) are a wise investment that will benefit all Idaho Power ratepayers, not just those who experience reduced power bills," the IPUC ruled. "Increased LIWA funding can provide significant benefits in terms of lowering uncollectibles and creating permanent load reduction. The record reflects that in past years LIWA has run out of funds mid-year."

Teri Ottens, CAPAI executive director, said Idaho Power and the state’s community action agencies have had a weatherization partnership since 1989. She noted that while the CAAs have been working for more than five years to get increased weatherization funding from the utility, in recent years, funding has decreased.

She added that per an agreement recently signed with Idaho Power, the new funding can only be used in electrically-heated homes and it must be matched by 15 percent with Weatherization Assistance Program funds. However, Idaho Power did change some program requirements to make the program more flexible in the future.

California Utilities Launch New Discount Program

California’s low-income households that are above income limits for the state’s longstanding CARE (California Alternate Rates for Energy) discount, can now start applying for a new discount called the Family Electric Rate Assistance (FERA) program, which allows an electric bill discount to low- to middle-income households of three or more people.

FERA was designed by the California Public Utilities Commission (CPUC), based on recommendations from the advocacy groups The Utility Reform Network (TURN) and Latino Issues Forum, for customers who exceed the CARE income threshold. The program was approved by the PUC in a November 2003 order and went into effect June 17. Under FERA, a household of three may earn from $27,501 to $39,300 per year, which is 175 percent to 250 percent of the federal poverty guidelines (FPG). CARE serves households up to 175 percent of the FPG.

The program applies only to the three larger utilities: Pacific Gas and Electric Company (PGE), Southern California Edison Company, and San Diego Gas & Electric Company. PGE has estimated that approximately 200,000 of its 4.3 million residential customers meet the FERA eligibility requirements.

Program participants save on their electric bills by being billed at a lower rate. Under California’s baseline system, which sets an average consumption or baseline for electricity and gas, rates are tiered. The more a customer uses above the baseline amount, the more he/she is charged. For example, zero to 100 percent of baseline is Tier 1, the lowest rate; 100 to 130 percent of baseline is Tier 2, the second lowest rate. FERA participants will have their Tier 3 usage (131 percent to 200 percent of baseline) billed at Tier 2 rates. Customer usage in Tier 4 (201-300 percent of baseline) and Tier 5 (above 300 percent of baseline) will continue to be billed at the original rates for those tiers. Utilities and the CPUC have noted that more than one third of residential customers do not exceed usage above 130 percent of baseline.

(The following is excerpted from NCLC Energy and Utility Update with permission from the National Consumer Law Center, 77 Summer St, Boston, MA 02110; ,617-542-9595, www.nclc.org.)

A fund designed to weatherize an estimated 700 to 800 low-income homes annually in Arkansas is now in limbo due to a lawsuit.

An attorney with the Rose Law Firm in Arkansas filed a complaint in February 2004 on behalf of a residential customer of Entergy Arkansas, Inc., challenging the legality of the fund. Legislation passed in February 2003 through Acts 120 and 121   established the Weatherization Assistance Fund and Alternative Fuel Fund, which gave electric and natural gas utilities the option to contribute to the funds and to recover their costs through assessment of a fee of up to $1.00 per month on residential customers. (See LIHEAP Networker, May 2003.)

Entergy Arkansas, Inc., which had promoted the legislation, was the only utility that elected to collect the fee when the legislation was implemented in January 2004. Seventy percent of the funds would have supplemented the state’s low-income Weatherization Assistance Program (WAP) and the Alternative Fuels Fund would have received 30 percent for alternative energy grants and research.

The suit named Entergy Arkansas, Inc., as well as the Auditor of the State, the State Treasurer, the Alternative Fuels Commission and the directors of the state’s Departments of Finance and Administration and Department of Human Services (the LIHEAP and WAP grantee) as defendants. It alleges that the fee is an illegal tax because natural gas and electric distribution companies can voluntarily opt to charge the fee, and seeks to have collection of the fee declared unlawful and force the return of monies collected plus interest.

Entergy estimated that it would collect around $7 million annually for these programs, with around $4.7 million going into the low-income weatherization fund and the remainder to the alternative fuels fund. In May 2004, Entergy rescinded its participation in the program, thus ceasing collection of ratepayer dollars. By court order, the dollars collected are being held in escrow pending resolution of the lawsuit; thus no funds are available for weatherization activities.

Entergy Arkansas and the state agencies named in the lawsuit are seeking to have the suit dismissed. At a recent hearing, the judge indicated a trial may be scheduled for the fall. Should the case produce a negative outcome for the low-income funding, proponents will consider seeking a legislative remedy in the next session of the Arkansas legislature early in 2005, according to the National Consumer Law Center, which has advised and represented the Arkansas Community Action Agencies Association on a range of low-income energy issues over the past four years

Low-income customers in Duke Power's North Carolina service area will benefit from a plan submitted by the company to share 50 percent of the excess profits from its electricity sales with industrial customers.
The North Carolina Utilities Commission approved a plan, called the Sharing Agreement, that will first provide $5 million of excess profits to community colleges and low-income energy assistance programs. The remainder of the 50 percent of the funds will be used to lower industrial customers' bills through a kWh rate reduction.

The Public Staff, an independent agency that reviews, investigates and makes recommendations to the Commission, recommended that $3 million of the $5 million supplement the Community and Technical College Grant Fund for job training programs. Two million will help fund Duke Power's Share the Warmth, Cooling Assistance and Fan Relief programs.

Share the Warmth is a heating bill assistance program funded by Duke Power customers and Duke Energy shareholders. The Duke Energy Foundation matches individual contributions, dollar-for-dollar up to $50. In the past, the maximum annual corporate contribution was $500,000.

Duke Power and the Duke Energy Foundation also fund the Cooling Assistance Program. Local agencies distribute the funds and determine the criteria for family eligibility.

The Duke Energy Foundation contributes funds annually to the Fan Relief Program for the purchase of fans for senior citizens. The North Carolina Department of Human Resources, Division of Aging, administers the program.

According to articles in North Carolina newspapers, Duke Power is allowed to earn profits of 12.5 percent and in recent years has exceeded that profit margin. As a result of the plan approved by the Commission, each quarter's revenue will be reviewed and the excess profits will go towards the above-mentioned purposes.

Revenues from sales made between January 1, 2004 and January 31, 2007 are subject to the Sharing Agreement unless there is a Commission-approved rate change before January 2007.

Minnesota To Launch State’s First Affordability Program

The Minnesota State Legislature, at the urging of the largest utility company in the state and two low-income advocacy groups, enacted legislation during the 2004 legislative session establishing the state’s first affordability program. Xcel Energy joined forces with the Energy CENTS Coalition and the Legal Services Advocacy Project to convince legislators to transform the company’s existing discount program into a more flexible program, allowing deeper subsidies for customers with the highest energy burdens.

A statute enacted in 1994 required that Xcel Energy provide a 50 percent discount on the first 300 kWh to customers receiving federal energy assistance. The typical customer received a $9 reduction on his or her monthly electric bill.

The company and advocates found that at least 60 percent of the 41,000 customers currently receiving the required discount were current on their bills. However, about 9,000 customers (or 20 percent) were still either disconnected or subject to disconnection. These data confirmed the belief that program changes could target the resources (approximately $5.3 million annually) more effectively.

New Jersey USF Gets 2004-05 Funding at $78 Million

New Jersey’s Board of Public Utilities (BPU) on June 23 approved funding for the state’s 2004-2005 Universal Service Fund (USF) low-income energy assistance program, which began in October 2003.

Data on the first six months of the program indicate that, with assistance from USF, a significantly greater number of customers are paying their full monthly bills, the BPU said in a press release.

The 2004-2005 program budget approved by the Board includes $78 million for USF benefits; $12.5 million for the USF Fresh Start program, which helps USF customers pay off their arrearages, and $19 million in under-recoveries for the first year of USF, costs of which have been estimated at over $65 million.

"The USF program is one of the most important consumer- focused initiatives the Board has undertaken," said BPU President Jeanne M. Fox, "This program is a win-win. It ensures that low-income customers have affordable energy bills, and because their bills are affordable, customers are paying them at a much higher rate. This relieves the burden on all ratepayers who must pick up the tab when people don't pay their bills."

The USF ensures that low-income customers pay no more than 6 percent of their income on energy. Preliminary data shows that over 70 percent of initial USF enrollees were able to fully pay their energy bills through last winter, a time when many low- income customers fall behind on their payments. Utilities have reported that this is a high payment rate for these customers.

For the average residential electric customer using 6000 kilowatt- hours per year, this new budget, paid for through an assessment on all electric and gas customers, will result in an increase of 38 cents per month, or a total of $4.56 per year. Customers will be able to apply directly for USF when the state's new direct application system is completed late in 2004.

Nearly 300 members and supporters of the National Fuel Fund Network (NFFN) marked the organization's 20th anniversary June 6 and 7 at the group’s national conference in St. Louis, Missouri.

The idea for the NFFN was conceived by the late Sister Pat Kelley in St. Louis in 1984. NFFN is an association of charitable fuel funds whose mission is to increase the resources available to meet the energy needs of the low income. Sister Kelley's work and vision were celebrated during the conference.

Last year, fuel funds nationwide raised about $150 million to supplement LIHEAP, NFFN reported. The conference also showcased the Energy Hog, the featured character in an Ad Council public service advertisement campaign in which NFFN is a partner. It promotes energy efficiency and is targeted at children. See http://www.energyhog.org for more details and to view campaign materials.

As part of a settlement agreement, National Fuel Gas will contribute $1.5 million, without rate recovery, over three years to low-income programs in New York.

The New York Public Service Commission (PSC), on July 29, approved National Fuel's creation of the Customer Assistance Referral and Evaluation Services program, or CARES. The program, set to begin this winter, will be open primarily to customers whose public assistance has been recently terminated and whose household income is no more than twice the federal poverty level.

CARES recipients will be enrolled in National Fuel's balanced billing program and receive one-time grants of $400 that will be applied to their accounts. Caseworkers will work with customers eligible for the program, while also assessing whether they need referrals to other agencies for help with such things as job training, substance abuse or physical or mental illness.

National Fuel shareholders will also pay $300,000 for an independent audit of specific Home Energy Fair Practices Act (HEFPA) practices at the company. The third-party audit should help minimize and hopefully avoid inappropriate winter shut-offs and denials of heating service.

If less than $100,000 of the $1.5 million is unspent after three years, the remaining funds will go to the Neighbor for Neighbor program that provides grants to help prevent utility disconnection, to pay current or past due energy bills or to purchase any type of home heating fuel.

The settlement ends the PSC's investigation into the February 2001 death of a woman whose gas had been disconnected by National Fuel Gas.

The legislation included an "opt-out" provision allowing customers to request to be exempted from the charge. It also required utilities to clearly identify the surcharge and provide a toll-free number that customers could call if they wanted to opt out of paying the fee.

The national Community Action Partnership, along with its 1,000-member network of Community Action Agencies, is holding the rally in conjunction with its 2004 Annual Convention marking 40 years of Community Action. In a nonpartisan effort to unify the nation around the need to end poverty, the rally will focus on five key areas: health care, jobs, housing, education, and the Digital Divide.

The Partnership is hoping to join thousands of Americans on the Ellipse to tell the nation that there is no room for poverty in this country and that we must work together to eradicate the factors that cause poverty.

The Partnership is calling for a White House Conference on American Poverty and will urge the presidential candidates to pledge to convene a poverty conference. They have already requested that President George W. Bush do so.

The Community Action Partnership will also call for renewed American interest and commitment in the elimination of poverty and the cultivation of a new generation of leaders committed to community service and volunteerism.

The "No Room For Poverty" National Rally is open and free to the public. For more information about the rally, visit its website.

NEADA, NCLC Release Arrearage Collection Models

A new report from the National Energy Assistance Directors' Association titled Tracking the Home Energy Needs of Low-Income Households Through Trend Data on Arrearages and Disconnections provides a protocol for the regular reporting of residential arrearages and terminations, based on working models in several states.

The report presents a protocol through which public utility commissions can collect basic data on utility arrearages, service terminations and bad debt write-offs from their jurisdictional utilities. The protocol builds upon categories of data that are already available to public utilities and, accordingly, should be readily subject to collection by state commissions. The collection of such data on a uniform basis should prove useful to utilities, utility commissions, the federal government and low-income consumer advocates.

According to the report authors John Howat, Charlie Harak and Olivia Wein of the National Consumer Law Center, and Jerry McKim of the Iowa LIHEAP office, "Two primary purposes for collecting this data are to be able to meet one of the federal criteria for the release of LIHEAP emergency contingency funds and to further document unmet need for energy assistance in general. … Providing anecdotal evidence of terminations and arrearages is helpful but generally not sufficient. Producing hard data on arrearages and terminations makes a difference. Better data will lead to better public policy decisions, with benefits for low-income consumers, utility companies, and society in general."

The authors examined the practices in the following states where data is gathered and, in some cases, distributed on a monthly basis: Iowa, Massachusetts, Ohio, Pennsylvania and Rhode Island. These states were chosen to demonstrate the broad range of data-gathering practices currently used around the United States.

After summarizing the data collection practices in the five states, the report then proposes a template of four to eight data points that utilities routinely collect, and, therefore, should be readily available to utility commissions. Data on arrearages and service disconnections, the two direct indicators of households in payment trouble, were divided into three tiers based on their ease of collection, as well as their importance in identifying areas of concern for key stakeholders. Data analysis can be prepared for individual states as well as on an aggregated national basis.

Michigan Report Details Low-Income Funding

The Michigan Public Services Commission has issued Report on the Low-Income and Energy Efficiency Fund, June 2004, its annual report on the effectiveness of its low-income fund.

To date, according to the report, the Commission has issued orders approving seven rounds of grants from the Low-Income and Energy Efficiency (LIEE) Fund, totaling $107,422,675 million, with the majority for low-income bill assistance and energy efficiency. The first three rounds of grants were awarded in fiscal year 2001-02. The fourth and fifth rounds of grants have been awarded in fiscal year 2002-03. The sixth and seventh rounds of grants were awarded in fiscal year 2003-04. The grants have been awarded as follows:

1) $27.4 million to provide low-income energy assistance;

2) $12.2 million to develop or improve energy efficiency technologies;

3) $5 million for low-income energy efficiency projects;

4) $20 million to provide low-income energy assistance;

5) $20 million to provide low-income energy assistance;

6) $9.8 million for low-income energy efficiency projects; and

7) $13 million to provide low-income energy assistance.

Michigan’s Customer Choice and Electricity Reliability Act of 2000 authorized the creation of a Low-Income and Energy Efficiency Fund, administered by the Michigan Public Service Commission, whose purpose is to provide shut-off and other protection for low-income customers and to promote energy efficiency by all customer classes.

In the meantime, as part of several legislative attempts to revisit and revamp the 2000 legislation, one piece of legislation under consideration would authorize the Michigan Public Service Commission to create a statewide mandatory service charge to fund Michigan's LIEE Fund.

NLIEC Releases Missouri Affordability Study

The National Low Income Energy Consortium (NLIEC) held its 18^th annual low-income energy conference in June, highlighted by the release of a study that details the adverse impact of unaffordable energy costs on Missouri's poor.

The NLIEC commissioned the study, titled "Paid But Unaffordable: The Consequences of Energy Poverty in Missouri – and Elsewhere," to measure the extent and determine the consequences of energy poverty in Missouri because the lessons learned there can be applied throughout the nation. The state has both urban and rural areas, and it has energy hardships from both cold winters and hot summers.

Study author Roger Colton, who has conducted other energy affordability studies around the country, said at a press conference that focusing just on people's ability to pay their heating bills misses the full impact of the costs.

"What we found is that there is a large proportion of low-income households who pay their bills, but to pay their bills they go without other things," he said.
While a typical heating bill consumes about 6 percent of a middle-income family's budget, it represents 38 percent for the poorest households, the study shows. As a result, rising energy bills are a major contributor to poverty, Colton said, adding that the Missouri findings were typical of those of similar national studies.

Highlights of the NLIEC survey of 734 low-income households in Missouri are:

• 46 percent often or sometimes do without food to pay energy bills.
• 60 percent often skip medical appointments to pay energy bills.
• More than half frequently or sometimes use a kitchen stove or oven as a space heater.
• Nearly one in six households identified as "frequent movers" cite energy costs as the main reason for their most recent move.
• Among the poorest households, 75 percent do not buy school books or supplies so as to pay energy bills.
• 31 percent of the families leave home for all or part of day because they cannot afford to heat their houses; 38 percent leave because they cannot afford to cool their houses.

For an overview or a complete copy of the study, visit the NLIEC website.