Ohio Begins Updated PIPP
On November 1, Ohio begins an updated Percentage of Income Payment Plan (PIPP) for low-income households. Called "PIPP Plus," it revamps the PIPP that has been in place in Ohio since 1983 (the oldest and largest PIPP in the nation).
The new program will make customers' monthly payments more affordable on a year-round basis. Participating households will pay six percent of their monthly income or $10 per month to both electric and natural gas utilities, whichever is greater. All-electric customers will pay 10 percent of their income or $10 as their monthly payment, whichever is greater.
This compares to a maximum energy bill payment of 15 percent of income (generally 10 percent for gas and five percent for electric) for participants in the original PIPP.
According to the Ohio Department of Development (ODOD), which administers LIHEAP and the electric portion of the PIPP, the changes were designed to improve the PIPP as follows:
- Contain escalating costs while continuing to provide a valuable benefit. Costs of the electric PIPP have increased by 221 percent since 2001, from $47.7million in 2001 to $153 million in 2010, and enrollment has soared from 137,000 in 2001 to 288,630 in 2010. Current costs for the gas PIPP aren't available, but in 2008 it enrolled over 211,000 households at a cost of at least $85 million.
- Increase payment frequency while reducing PIPP payment requirements. Program records showed that less than five percent of participants made their PIPP payment every month.
- Align the gas and electric PIPPs. Under the original program, the gas PIPP payment is made year-round, while the electric PIPP payment is the PIPP amount or the actual bill, whichever is higher, for the non-winter months. Under the new program, the electric PIPP will be year-round. Most participants, over the course of a year, will pay less under PIPP Plus than they paid under the original program.
- Create a uniform arrearage-crediting program for accruing and past arrearages. If customers make their monthly PIPP payment on time, they will receive a bill credit that is the difference, if any, between their monthly PIPP payment and their bill. Furthermore, for each timely payment, they will receive a credit amounting to 1/24th of their historic arrearages. If the customer makes 24 consecutive payments, in full and on time, the entire debt will be forgiven. The program was designed to keep low-income customers from falling deeper into debt; it is also expected to help control PIPP program costs by encouraging responsible payment behavior.
For more information, see the Public Utility Commission of Ohio website or that of ODOD.
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Home Energy Notebook Highlights Energy Insecurity
The 2008 version of the LIHEAP Home Energy Notebook, released in May, presents recent national and regional data on home energy consumption, expenditures, and burden of low-income households, LIHEAP and low-income home energy trends, and the LIHEAP performance measurement system.
Included in this report are results from an "energy insecurity" study using data collected through the 2005 Residential Energy Consumption Survey (RECS) on behalf of the Office of Community Services, Division of Energy Assistance. The 2005 RECS included a set of questions that documented the different types of energy affordability problems that low-income households face in order to develop information on the level of energy insecurity of these households. The RECS data show that during 2005:
- Almost 1.6 million low-income households had a space heating disruption because of the inability to pay for the repair of a broken heating system, and such disruptions affected 4.4 percent of the entire population of low-income households.
- Over 1.2 million low-income households had an air conditioning disruption because of the inability to pay for electric service, and such disruptions affected 3.5 percent of the entire population of low-income households.
- 57.8 percent of low-income households had experienced at least one type of financial insecurity during the past 12 months. The most common instances of financial insecurity involved "worry about ability to pay" and "reduce spending for basic necessities." Over half of low-income households indicated that they experienced one or both of those insecurities at least once during 2005.
- 26 percent of low-income households had experienced at least one type of health and safety insecurity during the past 12 months — these included such actions as keeping part of the home closed off, keeping the home at unsafe temperatures and using the oven or stove for heat.
- Households with income at or below 100 percent of the Federal poverty level guidelines experienced service interruptions at a higher rate than households with income above 100 percent of the poverty guidelines.
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Pennsylvania Expands Oil Discount Program
The Department of Public Welfare (DPW), which administers LIHEAP for the State of Pennsylvania, is continuing expansion of its Oil Discount Program. During the FFY 2010 LIHEAP season, DPW began administering the program in nine counties.
The program increases the purchasing power of LIHEAP recipients who use fuel oil or kerosene by requiring vendors to provide fuel to LIHEAP recipients at a discounted price. Vendors are able to choose between four discount pricing options.
These pricing options include restricting the amount over the wholesale price a vendor is allowed to charge or requiring a discount off the retail price for LIHEAP recipients. DPW plans to implement the program statewide by the FFY 2014 heating season.
For FFY 2011, DPW will add 12 additional counties to the program: Bradford, Carbon, Lebanon, Lehigh, Lycoming, Monroe, Northampton, Pike, Schuylkill, Sullivan, Susquehanna, and Tioga. Additional counties will be phased in during subsequent heating seasons.
The program is similar to fuel discount programs currently offered through LIHEAP in other regional states, including Maryland, New York, New Hampshire, Connecticut, Vermont, Maine and Massachusetts.
For more information on oil discount programs for low income households, see LIHEAP Clearinghouse Memorandum 880: LIHEAP Negotiations With Non-Regulated Fuel Vendors: Fixed Margin Programs, Discounts, Summer Fill, Fuel Cooperatives (December 2009)
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