National Study of Low Income Energy Programs NARUC Consumer Affairs Committee David Carroll, APPRISE Jacqueline Berger, APPRISE Roger Colton, Fisher, Sheehan, and Colton 2/19/2008
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
National Study of Low Income Energy Programs
NARUC Consumer Affairs Committee
David Carroll, APPRISE
Jacqueline Berger, APPRISE
Roger Colton, Fisher, Sheehan, and Colton
2/19/2008
Presentation Outline
2
Presentation Outline
• Scope of National Study
• Low Income Energy Needs
• Legal and Regulatory Issues
• Affordability Programs
• Energy Efficiency Programs
• Summary
3
Overview of National Study
4
Purposes
• Inventory – How are ratepayer funded programs helping to meet the energy needs of low-income households?
• Best Practices – What programs are most effective in meeting their targeted goals and in what ways they could be improved?
• Research Framework – What additional information is needed to understand these programs?
5
Study Scope
• Analysis of 14 states – CA, CO, CT, IN, ME, MD, MO, NJ, NV, OH, OR, PA, WA, WI
• Research on 21 Affordability Programs and 13 Energy Efficiency Programs
• Review of Evaluations for 10 Affordability Programs and 12 Energy Efficiency Programs
6
Sponsors
• AARP• Colorado OEMC• Connecticut Operation Fuel• Indiana Utilities (CGCU, NIPSCO, and Vectren)• Maryland Department of Human Resources• Missouri Association for Community Action• Ohio Department of Development• Oregon Housing and Community Services• PECO Energy• Philadelphia Gas Works• Public Service Electric and Gas (contributor)• Washington State CTED 7
Sponsors
• Nonprofit Organizations – AARP, Operation Fuel, and MACA
• State Agencies – Colorado, Maryland, Ohio, Oregon, Washington
• Utilities – CGCU, NIPSCO, PECO, PGW, PSE&G, Vectren
8
Needs Assessment Findings
9
Needs Assessment
National Context
• Energy bills for low-income households grew from $22.6 billion in 2000 to $31.9 billion in 2005 (40% Increase)
• From 2005 to 2007 – Electric prices increased by 12.5%, gas prices are stable, and fuel oil prices increased by 25%.
10
Needs Assessment
National Context – Energy Affordability– Needs
• 7.1 million low-income households have residential bills that exceed 15% of income.
• $6.1 billion needed to pay excess over 15% of income. – Federal Assistance
• LIHEAP distributes $1.7 billion to 5 million households – Personal Responsibility
• 80% of households in poverty pay all energy bills• Most LIHEAP recipients are “energy insecure”
11
Needs Assessment
National Context – Energy Efficiency– High Electric and/or Gas Usage - 8.0 million low-
income households have high energy usage – Federal Assistance - WAP treats about 100,000
households each year – Actions by Low-Income Households - Most LIHEAP
recipients report significant energy saving actions
12
Needs Assessment
State and Local Context – Targeted Households
• PA – 150% Poverty – 20% of households
• OR – 60% of State Median – 30% of households
• MD – 150% of Poverty – 14% of households
13
Needs Assessment
State and Local Context – Affordability
Average Energy Burden
• CA – 7% of income
• PA – 17% of income
• CO – 10% of income
14
Needs Assessment
State and Local Context – Energy EfficiencyHigh Electric Baseload
• CA - 24% high electric baseload• IN - 80% high electric baseload• PA – 45% high electric baseload
15
Needs Assessment
State and Local Context – Energy EfficiencyHigh Gas Usage
• NV - 10% high gas usage • PA - 29% high gas usage• MD – 18% high gas usage
16
Needs Assessment
Energy Gap / Affordability Standard
Definitions
– Energy Gap = The amount that the energy bills of low income households exceed an affordable amount.
– Affordability Standard = The percent of income that is affordable for households to pay for energy bills.
17
Needs Assessment
Energy Gap / Affordability StandardExample for 15% of Income Standard
– Customer #1 • Income = $10,000• Energy Bill = $2,500• Affordable Energy Bill (at 15% standard) = $1,500• Energy Gap = $1,000
– Customer #2• Income = $5,000• Energy Bill = $1,000• Affordable Energy Bill (at 15% standard) = $750• Energy Gap = $250
Total Energy Gap (15% Standard) for this Group = $1,250
18
Needs Assessment
Energy Gap / Affordability Standard
What Standard is Affordable?– Pennsylvania
• Median Household Income for 2005 = $44,537
• Affordable Energy Bill - 5% standard = $2,227 ($186 per month)
• Affordable Energy Bill - 15% standard = $6,681 ($557 per month)
• Affordable Energy Bill – 25% standard = $11,342 ($945 per month)
• Fisher, Sheehan, & Colton – 6% standard = $2,672 ($223 per month)
For a household in Pennsylvania with income at the state median – an energy bill at the 6% of income standard would be about $222 per month.
19
Needs Assessment
Pennsylvania – Energy Gap
• 2005– Low-Income Electric and Gas Bill - $1.48 billion– Need @ 5% Standard - $1.04 billion– Need @ 15% Standard - $491 million– Need @ 25% Standard - $290 million
20
Needs Assessment
State and Local Response
– In 2005, state and local policymakers in 45 states and the District of Columbia invested $2.3 billion in affordability and energy efficiency programs
In 2005, the amount of funding furnished by state and local policymakers matched the amount furnished by the Federal government through LIHEAP and WAP
21
Needs Assessment
State and Local Response– 15% Energy Gap = The amount that the energy bills of low
income households exceed 15% of income.
– Coverage of Energy Gap (15% Standard) by Public and Ratepayer Funds
• Missouri - Funding covers 17% of 15% Energy Gap
• New Jersey – Funding covers 84% of 15% Energy Gap
• Pennsylvania – 2005 Funding covered 60% of 15% Energy Gap
22
Legal and Regulatory
23
Legal and Regulatory
• Regulatory Programs …without “explicit” statutory authority– Colorado: Approved a pilot program to test effectiveness /
“targeted to increase the net revenue received by Public Service”– Ohio: Ordered utilities to change the way that payment shortfalls
are collected / “… was created in response to the inability of low-income households to maintain energy service.”
– Pennsylvania: Order utilities to change practices that lead to “wasteful cycle” / “… how can Columbia Gas most effectively and least expensively collect as much as possible from customers that cannot afford to pay?”
24
Legal and Regulatory
• Legislative Programs … with “explicit” statutory authority– Washington State: Regulatory body has authority to
approve programs proposed by utility companies
– Maine: Requires each utility to implement a program, but allows each to select program options that best meet the needs of their customers
– New Jersey: Required the development of a statewide program designed to increase the affordability of energy for all low-income ratepayers
25
Legal and Regulatory
• Legislative: Some legislatures have decided that ratepayer funded programs are the most effective way to address low-income affordability and energy efficiency issues.
• Regulatory: Some commissions have mandated programs because they have determined that ratepayer funded programs are the most effective way to fulfill their obligation to serve all customers in a cost-effective way.
• Utility: Some utilities have proposed ratepayer funded programs because they perceive that they are the best way to work with payment-troubled low-income customers.
26
Affordability Program Design and Evaluation
27
Program Design
Sources of Payment Problems• Income Level• Income Inconsistency• Unexpected Expenses• Price Increases• High UsageProgram designers need to understand the sources
of payment problems in the targeted jurisdiction
28
Program Design
Customer Payment Problems• Arrearages• Inconsistent Payments• Annual Bill Shortfall• Health and Safety of Customers
Program designers need to decide which manifestations of payment problems they need to
address most
29
Program Design
Utility Payment Problems• Collections Costs• Accounts Receivable• Write-Offs• Customer Relations
Program designers need to consider what utility problems are the most important to resolve.
30
Program Design
Program Solutions• Crisis Intervention• Preprogram Arrearage Forgiveness• Current Bill Assistance• Counseling and Referral• Usage Reduction
Program designers need to determine what solution(s) best address the problems they are
trying to solve
31
Evaluation
• Best Practices – Targeting– Serve those with demonstrated need
• All high burden customers – NJ USF / MD EUSP
• Customers with payment problems – PA CAP / OEAP
• Best Practices – Programs– Match programs to problems
• High burden – Payment subsidy / usage reduction / benefit referral – PA CAP/LIURP/CARES
• Payment problems – Arrearage forgiveness / fixed payment / payment counseling – PA CAP / CARES
32
Evaluation
• Best Practices – Administration– Build on existing linkages
• New Jersey – LIHEAP / Utility / Community Agencies• Ohio – LIHEAP / PIPP / EPP
• Best Practices – Funding– Multiple Sources
• New Jersey – Federal LIHEAP / State Lifeline (Elderly) / Ratepayer USF / Charitable NJ SHARES
• Oregon – Federal LIHEAP / Ratepayer OEAP / State Funding Supplement / Oregon HEAT
33
Evaluation
• Align Funding Source with Need– LIHEAP to furnish health and safety for vulnerable
households
– State Supplements when Increased Energy Bills are associated with Increased Tax Revenues
– Ratepayer Funding to addresses goals of providing universal access and avoiding wasteful collections cycle
– Charitable Funds offer flexibility to address needs of households that do not meet categorical requirements
34
Energy Efficiency Program Design and Evaluation
35
Program Design
Sources of Usage Problems• Housing Quality• HVAC Equipment Efficiency• Appliance Efficiency• Energy Using Practices
Program designers need to understand the sources of usage problems in the targeted jurisdiction
36
Program Design
Customer Barriers• Investment Capital
• Energy Knowledge
• Information Feedback
Program designers need to decide which barriers they need to address most
37
Program Design
Utility Usage Issues• Peak Shaving• Load Shifting• Consumption Reduction• Affordability Subsidies
Program designers need to consider what utility issues are the most important to resolve.
38
Program Design
Program Solutions• Weatherization• HVAC Repair and Replacement• Appliance Replacement• Energy Education
Program designers need to determine what solution(s) best address the problems they are
trying to solve
39
Program Evaluation
40
Targeting• High Usage – Energy efficiency programs
must target high usage customers to be cost-effective– 1,200 Therms– 8,000 kWh Baseload– 12,000 kWh Baseload/Water– 16,000 kWh Electric Heating
Efficiency Program Evaluation
Electric Baseload Usage Impacts
41
366 383
694
1,684
811
1,115
0
200
400
600
800
1000
1200
1400
1600
1800
4,000 6,000 8,000 10,000 12,000 14,000
Pre-Treatment Electric Usage (kWh)
kWh
Sav
ed
Efficiency Program Evaluation
Gas Heating Usage Impacts
42
8
146
94
168
102
0
20
40
60
80
100
120
140
160
180
0 200 400 600 800 1000 1200 1400 1600
Pre-Treatment Gas Usage (ccf/therms)
CC
F/T
her
ms
Sav
ed
Efficiency ProgramEvaluation
43
Comprehensive Programs Should…• Target high usage households • Use tools to identify sources of energy problems• Align spending with opportunities• Be prepared to address health and safety issues• Have guidelines for “walk-away” and/or referral
These programs are more expensive per unit but can deliver long-term savings to low-income households, furnish reliable benefits to utility capacity planners, and deliver significant
carbon reduction impacts
Efficiency ProgramEvaluation
44
Targeted Programs Should…• Target high usage households• Prescreen clients for opportunities• Minimize service delivery costs• Piggyback with comprehensive programs and/or
other service deliveryThese programs are less expensive to administer and
perform well in the short run, but must be well run to deliver promised benefits
Efficiency ProgramEvaluation
• Best Practices – Targeting– Serve those with demonstrated need
• High usage
• Demonstrated Opportunities
• Best Practices – Programs– Service Delivery Quality
• Protocols
• Effective Training
• Clear Decision Criteria
• Quality Control
45
Efficiency ProgramEvaluation
• Best Practices – Administration– Build on existing linkages
• Ohio – LIHEAP / PIPP / EPP Integration
• New Jersey – USF / Comfort Partners Integration
• Best Practices – Funding– Multiple Sources
• Oregon – Federal WAP / LIHEAP Transfer / Ratepayer Funded / State Funding Supplement
• Vermont – Federal WAP / LIHEAP Transfer / Ratepayer Funded / All Fuels Funding Supplement
46
Summary of Findings
47
Summary
• Energy Needs – Low-income energy needs are daunting, but some state policymakers have made significant progress toward meeting those needs
• Legal/Regulatory – There are excellent models of legislative and regulatory frameworks for ratepayer-funded low-income programs
48
Summary
• Program Design – There are important design choices that make a difference in the performance of low-income affordability and energy efficiency programs. Since needs vary from state to state and even within state, policymakers need to identify their goals and design programs to meet goals.
• Reporting and Evaluation – The PA PUC models for reporting and program evaluation furnish a good example of how to document performance of ratepayer funded low-income programs.
49
Related Documents
