CA Low-Income Programs Reach Record;
Disconnection Rates at Historic Lows
During 2010, California’s utility ratepayers provided a record $1.2 billion in low-income rate assistance while residential and gas disconnections reached historic lows.
Those are details from utility reports to the California Public Utilities Commission (CPUC) and from the Division of Ratepayer Advocates’ (DRA) second report on the Status of Energy Utility Service Disconnections in California.
The utility reports come from the four largest investor-owned utilities that serve the majority of Californians: Pacific Gas and Electric (PG&E), Southern California Edison (SCE), San Diego Gas & Electric Company (SDG&E), and Southern California Gas (SoCalGas). They detail monthly and yearly expenditures of the state’s mandated low-income electricity and gas rate discount (CARE or California Alternate Rates for Energy), and the low-income conservation program (Low-Income Energy Efficiency or LIEE, now called the Energy Savings Assistance Program.) CARE provides a 20 percent discount off gas and electricity bills for households up to 200 percent of federal poverty guidelines.
CARE expenditures and enrollment have continually increased in recent years with 2010 showing a 27.6 percent increase in utility discount expenditures and an 11.4 percent increase in enrollment over 2009. For 2010, discount spending totaled nearly $1.2 billion for about 4.9 million households; in 2009; CARE discount spending totaled about $940 million while serving about 4.4 million. These are discount expenditures only and don’t include administrative and outreach costs.
The increases are likely due to expanded outreach requirements from the CPUC as well as the economic downturn. CARE spending levels are uncapped so the program can expand as necessary to serve all eligible customers. As a result, PG&E’s 2010 CARE expenditures were 154 percent above its authorized budget and SCE’s were 132 percent over its authorized budget.
The increases are likely due to expanded outreach requirements from the CPUC as well as the economic downturn. CARE spending levels are uncapped so the program can expand as necessary to serve all eligible customers. As a result, PG&E’s 2010 CARE expenditures were 154 percent above its authorized budget and SCE’s were 132 percent over its authorized budget.
The DRA report lauded the lowered disconnection rate, noting that after its first report on utility disconnections in late 2009, the CPUC issued new disconnection protection rules that helped bring about the lower rates in 2010.
However, the DRA concluded that pressure on California’s low-income households continues. At the end of 2010, it reported, unpaid bills of low-income customers totaled $55 million, double the amount at the end of 2009; over half of those disconnected owed less than $315; and 33,000 disconnected low-income customers did not reconnect service in 2010, leaving some to resort to using hazardous methods for lighting and heating their homes. Furthermore, DRA’s analysis showed that the disconnection rate for low-income customers remains significantly higher than that for other residential customers.
The report concluded with recommendations for improvements to CARE and the disconnection policy, including: calculation of bill assistance based on a customer’s income and energy burden (similar to Percentage of Income Payment Plans operating in Ohio and New Jersey); development of program features to help customers manage their utility bill debt and make monthly bills stable and predictable; establishing benchmarks to lower disconnections, e.g., lowering the percent of low-income disconnections to 5 or 6 percent; and developing a contingency plan for “chronically disconnected” households.
For more information on utility expenditures, see the website of the CPUC’s Low Income Oversight Board where the utilities post their monthly program reports.
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Most States Launch Summer Cooling; Several Lack Enough Funding
At least three states, including Illinois, are holding off on LIHEAP cooling assistance programs this summer, while the remainder of those that normally operate such programs are going ahead with them.
The Illinois Department of Commerce and Economic Opportunity (DCEO), the state LIHEAP agency, told local administering agencies not to expect any LIHEAP funding during the summer. By cutting the summer cooling program, state officials hope to ensure there will be enough money for winter heating assistance.
LIHEAP officials in Georgia and Kentucky have said they lack the funding to provide cooling assistance because most agencies have ran out of money providing winter bill assistance.
The states of Arkansas, Alabama, New Jersey, Nebraska, Delaware, Indiana, Missouri, Ohio and Tennessee are all operating their normal summer programs. Some, such as Alabama, Indiana, and Virginia, operate separate cooling programs; others such as Missouri and Ohio administer summer crisis programs that help those with electric utility disconnect notices and/ or provide air conditioners to those with medical conditions, while still others provide cooling assistance as part of their year-round programs.
For example, Missouri operates a summer crisis intervention program, normally from June through September, that provides assistance to those facing electric service disconnections. However, at least one agency in northeast Missouri reported being out of funds as of June 23.
Indiana’s program that began June 1 and runs through August 31, provides a $100 electric bill benefit and air conditioners to those with medical needs and an affidavit from a physician.
Kansas is providing a supplemental payment that will be issued at the end of June. All households approved for benefits during the heating season (January through March) will receive a supplemental payment.
Virginia’s cooling period operates from June 15 through August 15. Aid is based on the availability of funds and is first-come, first-served.
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Alaska State Funds for Energy Assistance Continue
While many states are struggling with deficits and state funds for energy assistance are off the table, Alaska’s legislature has continued to fund a supplemental energy assistance program for FY 2012.
Since 2009, the state-funded Alaska Affordable Heating Program (AKAHP), formerly known as the Alaska Heating Assistance Program, has provided payment assistance to those with incomes above the LIHEAP income maximum of 150 percent of federal poverty guidelines (FPG), up to a maximum of 225 percent of FPG. The funding is administered by the Department of Health and Social Services, the LIHEAP grantee, and, other than income, has the same eligibility criteria and benefit levels.
Last month the legislature approved continued funding for the AKAHP program at $5 million, the same amount it has received for each of the past two years. In addition to serving the higher income households, the money can be used to make up for LIHEAP funding shortfalls, said LIHEAP program coordinator, Susan Marshall.
“Thanks to these extra dollars, Alaska was able to continue paying LIHEAP benefits this past season while they waited on federal funding. In a state where heat is a necessity, this money helped our most vulnerable residents safely remain in their homes,” she said, adding that Alaska's tribal LIHEAP programs will receive about $2 million of the AKAHP funds.
LIHEAP Publications
Low-Income Home Energy Assistance Program Report to Congress for Fiscal Year 2007. Provides state-by-state tables on LIHEAP expenditures, benefits, and low-income home energy data for 2007.
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