LIHEAP Clearinghouse News Bulletin - December 2011

Next winter low-income households in Colorado will be able to participate in a percentage of income payment plan (PIPP) that will make their electric and gas utility bills more affordable. Colorado will join a small group of states (Ohio, New Jersey, Illinois, and Pennsylvania) that have statewide PIPPs for electricity and gas.

After at least four years in the making, rules adopted by the Colorado Public Utilities Commission (CPUC) became effective December 15, requiring all regulated natural gas and electric utilities to file plans and tariffs providing vulnerable households affordable rates and arrearage forgiveness.

Energy Outreach Colorado (EOC), a statewide nonprofit, petitioned the CPUC in July of 2010 for a rule-making to mandate a PIPP. According to Skip Arnold, EOC director, the rules don't mandate a PIPP for each utility; rather each utility will determine its own affordable rate plan. However, he believes most, if not all, of the regulated utilities (two electric and six natural gas) will chose the PIPP, which requires a maximum household contribution of 6 percent toward electric and/or natural gas bills, with benefits going to participants as a fixed monthly bill credit.

Arnold added that the programs won't be in effect until next winter because utilities have until March 19 to file their plans and tariffs.

The PIPP payments will be tiered by income so that the lowest income households will pay the smallest percentage of their income, i.e., electric heating customers with incomes up to 75 percent of federal poverty guidelines (FPG) will pay 4 percent; those at 75 to 125 percent will pay 5 percent, and those from 125 to 185 percent will pay 6 percent of income. For non-heating electric and natural gas bills, participants will pay for each service as follows: up to 75 percent of FPG, 2 percent of income; 75-125 percent, 2.5 percent of income; and 125-185 percent, 3 percent of income. According to Roger Colton, who helped EOC petition the CPUC, the tiers were modeled after the PIPPs (called Customer Assistance Programs) that most of Pennsylvania's utilities operate in accordance with that state's rules.

Participants, who must be Colorado LIHEAP recipients, will be phased in, that is, during the first year utilities will enroll only those eligible households at or below 125 percent of FPG, during the second year those households at or below 150 percent of FPG, and in the third year the highest income households will be enrolled, those from 150 to 185 percent of FPG.

Participants who make regular PIPP payments will receive credits toward their pre-existing arrearages, and those with high energy usage will be referred to the Weatherization Assistance Program or any weatherization programs the utility may have.

The state's largest utility, Public Service Company of Colorado, has operated PIPP gas and electric pilots for the past two years; evaluations of those will be finalized early next year.

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AARP Releases Report on Winter Heating Costs for Seniors

In October the AARP Public Policy Institute released “2011-201212 Winter Heating Costs Report for Older and Low-Income Households.”

The report notes that since the mid-1990s home heating costs have increased, making it difficult for low-income consumers to comfortably heat their homes. Heating fuel costs vary widely by geographic location — the cost of fuel oil in New England is the highest, followed by natural gas in the mid-Atlantic and east north central states. Fuel oil prices are projected to increase this winter while the cost of natural gas and electricity is expected to remain the same as last year.

Forty-one percent of households with members 65 years or older have total annual incomes less than $20,000. These households heating with fuel oil will spend over 20 percent of their household income on heating costs. Nine percent of older households use heating oil as their primary fuel whereas almost 54 percent use natural gas.

While average heating costs have increased through the last decade, average LIHEAP benefits have not kept pace. With applications estimated to increase by 6 percent over last year and with the prospect of less LIHEAP funds, the energy burden of older households will remain substantial this winter.

Data for this study was obtained from the Residential Energy Consumption Survey and the Energy Information Administration’s Short Term Energy Outlook.

The full report is available at: www.aarp.org/research/ppi/

An AARP report released in August examined cooling-related electricity consumption and expenditures among consumers age 65 and older based on income and geographic location.

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FY 2010 Evaluation of Washington’s Weatherization Program

Last May, the Washington State University Extension Energy Program published an evaluation of Washington’s FY 2010 low-income weatherization program.

The program received a significant increase in funding in 2009 through the American Recovery and Reinvestment Act that raised production expectations and created challenges for the weatherization delivery network.

In FY 2010, production increased by approximately 2.7 percent more than the historical average (2000-2009) and mainly expanded to multi-family units. The number of people that benefited was more than twice served by the program in 2006 and about half of the weatherized units had senior, disabled or young children residents.

Total program costs were $6,070 per unit, total annual savings for all households was $1.4 million and the average household saved $189 in energy costs per year. Non-energy benefits were estimated at $196 per household.

The benefit-cost ratio for the FY 2010 Weatherization Program is 1.5; program benefits are 50 percent greater than costs.

Challenges identified by the local agencies included problems with subcontractors, repair and rehabilitation needs, and increasing compliance and reporting requirements.

View the evaluation.

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