LIHEAP Electronic Bulletin #2

CO₂  Auctions Yield Low-Income Energy Funding

In at least seven Northeast and Mid-Atlantic states, low-income energy programs have a new funding stream resulting from auctions of carbon dioxide emissions allowances.

Connecticut, Delaware, Maine, Maryland, Massachusetts, New York, New Jersey, New Hampshire, Rhode Island and Vermont are all participants in the Regional Greenhouse Gas Initiative (RGGI), a coalition working to limit carbon dioxide pollution through a cap and trade system, whereby the participating states limit the amount of CO₂ that can be emitted by their power plants. The participating states have agreed to implement RGGI quarterly auctions where they will sell the region’s annual emissions “budget” of approximately 188 million allowances.

Utilities must acquire enough allowances to cover their plants’ emissions, either through the auctions or by purchasing them from other winning bidders afterward. All fossil fuel-burning facilities in the states are required to purchase allowances, each of which permits a utility to emit 1 ton of carbon dioxide. The goal of RGGI is to cap regional emissions of CO₂ from power plants at current levels and then reduce them by 10 percent by 2018.

In September 2008, the states held the first auction of CO₂ emissions allowances. So far, three auctions have been conducted, raising over $262 million, of which $186 million or 71 percent has been allocated to energy efficiency programs, the remainder to renewable energy and climate change projects. Some states passed laws allocating a specific percentage of RGGI proceeds for low-income energy. Delaware, Maine, Maryland, Massachusetts, New York, New Jersey, and New Hampshire have already designated some funding for low-income energy efficiency; proposals are pending in Connecticut, Vermont and Rhode Island.

The states’ relevant legislation regarding low-income funding (if available), and the amount of low-income funding designated to date are listed below:

• CT: state law says 69.5 percent of the auction proceeds will go to the Energy Conservation Management Board, which advises utilities on energy conservation; no funds allocated to date.
  
  
  
• DE: state law mandates 10 percent of proceeds for weatherization, 5 percent for energy assistance; $543,971, weatherization and $271,986, energy assistance.
  
  
  
• ME: $500,000 for low-income weatherization; other programs to reduce energy consumption may include low-income.
  
  
  
• MD: 17 percent mandated for rate assistance; $9.2 million designated.
  
  
  
• MA: $4 million for heating system replacements for low-income households through state weatherization agency. Another $7.4 million that will expand gas and electric utilities’ existing residential energy efficiency programs may include low-income households.
  
  
  
• NH: 10 percent mandated for low-income energy efficiency; $846,000 allocated.
  
  
  
• NJ: 20 percent mandated for low-income energy efficiency; $1.2 million allocated to date.
  
  
  
• NY: $7.6 million to supplement current low-income energy efficiency programs, funded by a system benefits charge; the RGGI funds will target oil and propane heated single- and multi-family residences. This is an initial determination, subject to change as plans are finalized later this year.
  
  
  
• RI: legislation says funding proposals must augment and coordinate with existing energy efficiency, renewable energy and low-income programs; no funds designated to date.
  
  
  
• VT: legislation says proceeds should benefit consumers through a portfolio of energy efficiency, weatherization, and low-carbon generation resources; no specific program allocations.

For more information on auction results and how states have allocated the RGGI funds, see www.rggi.org or

http://www.env-ne.org/public/resources/pdf/ENE_Auction_Tracker_3.20.09.pdf

Weatherization Assistance Program Receives $5 Billion

Last month’s passage of the American Recovery and Reinvestment Act (also known as the economic stimulus bill) has resulted in an appropriation of $5 billion for the federal Weatherization Assistance Program (WAP), which in recent years has received about $220 million annually, although it received $447 million in regular funding for 2009. This funding came from the Continuing Resolution last fall and the FY 2009 omnibus spending bill passed in February.

Groups such as the National Community Action Foundation (NCAF) fought hard for the increased WAP funding, citing its potential for job creation as well as for saving low-income households hundreds of dollars yearly (on average) in home energy costs. Originally, the Senate had allocated $2.9 billion for the program, while the House bill had sought $6.2 billion.

The Act also increased WAP’s income eligibility level from 150 percent of federal poverty guidelines to 200 percent, increased the funding assistance level per home from $2,500 to $6,500, and allows new weatherization assistance for homes that were weatherized as recently as 1994. Up to 20 percent of funds may be used for training and technical assistance.

According to Department of Energy guidance, states have three years to spend the Recovery Act funds.

More money will also be available to WAP through states’ set-asides of LIHEAP funds from their 2009 grants. As reported in the last issue of the LIHEAP E-Bulletin, the majority of the states haven’t changed the percentage of their LIHEAP funds that they normally set aside for weatherization. However, with the increase in 2009 LIHEAP funding, most states are essentially doubling their weatherization allotments just by keeping the same percentage they set aside last year. The LIHEAP Clearinghouse estimates that WAP set asides for weatherization will amount to over $600 million for FY 2009, compared to around $222 million for FY 2008. The exact amount won’t be known until later in the year because states may change their plans until March 31.

The Weatherization Assistance Program Technical Assistance Center has a web page listing “ramp up” tools to help states and agencies with program expansion.

NEUAC Registration Brochure Now Available

The registration brochure for the 2009 National Energy and Utility Affordability Conference is now available online. The conference is June 15-17 at the Portland DoubleTree Hotel - Lloyd Center in Portland, Oregon.

The event combines the annual conferences of the National Fuel Funds Network and the National Low Income Energy Consortium, and provides over 50 workshops on fundraising and building the energy safety net, energy availability and sustainability, weatherization and conservation, energy assistance and education, outreach and advocacy, Native American energy and housing programs, and the evolution of utility programs and services. It also includes the 2009 National Energy Assistance Directors’ Association meeting June 14-15, at the same location.  

NEADA’s program includes: outlook for federal funding, roundtable discussion with federal officials, regional roundtable meetings on program policy issues and concerns, program design issues, discussion of development of corporate research strategies and new fuel purchasing strategies.

The registration deadline is May 15, 2009; a lower early bird rate is available through May 1. More information is available at www.neuac.org.