coordination of liheap with state and utility payment assistance programs neuac conference june 28,...

Coordination of LIHEAP with State and Utility Payment

Assistance Programs

NEUAC Conference

June 28, 2011

Jackie Berger

Overview

• Introduction

• Coordination Advantages and Disadvantages

• Coordination Models

• HHS Guidance

• Summary and Recommendations

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COORDINATION ADVANTAGES AND DISADVANTAGES

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Program CoordinationGeneral Advantages

• Efficiency

• Equity

• Simplicity

• Integrity

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Program CoordinationEfficiency

• Efficiency: use existing infrastructure– Single application.– One set of intake agencies.– Joint eligibility determination.– Single database.– Reduced administrative burden.

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Program CoordinationEquity

• Equity: account for different benefit receipt– Total benefit or burden does not vary by

combination of benefits received.– Ensure that those with greatest need receive

greatest benefit.

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Program CoordinationSimplicity

• Simplicity: one set of standards and procedures– Reduced staff training needs.– Lower probability of errors in eligibility and

benefit determination.– Increased likelihood of client understanding.– Reduced client burden.

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Program CoordinationIntegrity

• Integrity: use of fiscal assurances– LIHEAP office procedures and accountability systems.– May include systematic checks:

• Validation of applicant and household member information with SSA.

• Income database match (State Directory of New Hires).

• SSA death master file match or state vital statistics database match.

• Match with list of incarcerated individuals in state prisons.

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Program CoordinationGeneral Disadvantages

• Different goals– Focus on home heating and cooling.– Focus on electric usage.

• State data access– Energy usage data.– Payment compliance data.

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COORDINATION MODELS

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Models

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Linkage

• Payment Assistance Programs Linkage– Two-way referrals

• LIHEAP agencies refer to utility payment program.

• Utility representatives refer to LIHEAP.

– Targeted referrals• Utilities focus LIHEAP referrals to greatest need.

• Local agency staff refer payment-troubled to utility program.

– Enrollment• Utility staff assist with LIHEAP applications.

• LIHEAP agencies enroll applicants in utility programs.

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Linkage

• Possible utility LIHEAP policy– Penalty for not applying for LIHEAP.

– LIHEAP requirement for program participation.• Advantage: encourage application

• Disadvantage: barriers for some customers

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Presumptive Eligibility/Automatic Enrollment

• Presumptive eligibility: documentation not required if LIHEAP recipient.

• Automatic enrollment: data transfer to automatically enroll households.

• Advantages– Reduced client burden.

– Reduced administrative costs.

• Disadvantages– Need to follow same program guidelines.

– Loss of detailed information for evaluation (if utility does not obtain eligibility information).

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Joint Benefit Calculation• Benefits for LIHEAP and ratepayer program are

determined to reach a certain total benefit or target burden.

• Advantages:– Customers who receive LIHEAP do not have higher total

benefit. – Customers who fail to apply for LIHEAP do not have lower

total benefit.

• Disadvantages:– Lack of incentive to apply for LIHEAP.

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Joint Benefit CalculationNJ Example

Program Parameters

• LIHEAP/Utilities/BPU – Program administered by LIHEAP office.

– LIHEAP/USF application has income and heating fuel.

– LIHEAP office pays LIHEAP grant to utilities (annual credit).

– Utilities furnish information on annual energy bill.

– LIHEAP office computes USF benefit and informs utilities.

– Utilities furnish USF benefit (monthly credit).

– Utilities are reimbursed for USF from SBC fund.

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Joint Benefit CalculationNJ Example

Benefit Calculation

• Total Benefit = Customer Bill – 3% of Income– Income = $25,000; 3% = $750– Gas Bill = $2,050; Electric Bill=$1,350– Total Gas Benefit = $2,050 - $750 = $1,300– Total Electric Benefit = $1,350 - $750 = $600

• USF Benefit = Total Benefit – LIHEAP– LIHEAP Benefit = $400– USF Benefit = $1,300 + $600 - $400 = $1500– Monthly USF Benefit-$1500/12=$125

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Joint Benefit CalculationNJ Example

Benefit Payment• LIHEAP – Annual Credit• USF – Fixed Monthly Credit• Example:

– January LIHEAP benefit

– LIHEAP Benefit = $400

– USF Benefit = $125/month

– Benefit payment stream• Jan = $525, Feb = $125, Mar = $125, …, Dec = $125

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Joint Benefit CalculationNJ Example

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Gross Electric Bill

USF CreditGross Gas

BillUSF Credit LIHEAP Net Bill

January $125 $50 $325 $75 $400 ($75)

February $140 $50 $315 $75 $330

March $100 $50 $275 $75 $250

April $60 $50 $145 $75 $80

May $60 $50 $85 $75 $20

June $125 $50 $75 $75 $75

July $150 $50 $65 $75 $90

August $175 $50 $70 $75 $120

September $110 $50 $75 $75 $60

October $80 $50 $125 $75 $80

November $80 $50 $225 $75 $180

December $145 $50 $270 $75 $290

Joint Benefit Distribution• Benefits for LIHEAP and ratepayer program are

determined separately.• LIHEAP benefits used to offset cost of utility payment

program.• Advantages:

– Reduced ratepayer cost.– Equitable total benefit.– Constant monthly payment (possible).

• Disadvantages:– Lack of financial incentive to apply for LIHEAP.

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Joint Benefit Distribution

Poverty Level Natural Gas Heating Electric Heating Electric Non-heating

<=50% 5%-8% 7%-13% 2%-5%

51% - 100% 7%-10% 11%-16% 4%-6%

100% - 150% 9%-10% 15%-17% 6%-7%

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Pennsylvania Public Utility CommissionEnergy Burden Targets

Joint Benefit Distribution

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Percent of Income (PIPP) Illustration

Poverty Level

Customer Payment

Example

Annual Income

Payment Calculation

Monthly Payment

Minimum $25 $0 Minimum $25

0% - 50% 8% $10,000 .08*$10,000/12 $67

51% - 100% 9% $15,000 .09*$15,000/12 $113

101% - 150% 10% $25,000 .10*$25,000/12 $208

Joint Benefit Distribution

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Gross Utility Bill

PIPP Payment

Subsidy

January $325 $113 $212

February $315 $113 $202

March $275 $113 $162

April $145 $113 $32

May $85 $113 ($28)

June $75 $113 ($38)

July $65 $113 ($48)

August $70 $113 ($43)

September $75 $113 ($38)

October $125 $113 $12

November $225 $113 $112

December $270 $113 $157

No LIHEAP Grant

Gross Bill $2,050

Net Bill $1,356

Total Subsidy $694

Joint Benefit Distribution

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Gross Electric

Bill

PIPP Payment

LIHEAPNet

Payment

January $325 $113 $400.00 $0

February $315 $113 $0

March $275 $113 $0

April $145 $113 $61

May $85 $113 $113

June $75 $113 $113

July $65 $113 $113

August $70 $113 $113

September $75 $113 $113

October $125 $113 $113

November $225 $113 $113

December $270 $113 $113

LIHEAP Grant Applied to Bill

Targeted Burden 9%

Gross Bill $2,050

Net Utility Bill $1,356

Total Utility Subsidy $694

LIHEAP Grant $400

Net Customer Bill $956

Net Customer Burden 6%

Joint Benefit Distribution

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Gross Electric

Bill

PIPP Payment

LIHEAP SubsidyNet

Subsidy

January $325 $113.00 $400.00 $212 $0

February $315 $113.00 $202 $14

March $275 $113.00 $162 $162

April $145 $113.00 $32 $32

May $85 $113.00 ($28) ($28)

June $75 $113.00 ($38) ($38)

July $65 $113.00 ($48) ($48)

August $70 $113.00 ($43) ($43)

September $75 $113.00 ($38) ($38)

October $125 $113.00 $12 $12

November $225 $113.00 $112 $112

December $270 $113.00 $157 $157

LIHEAP Grant Applied to Subsidy

Targeted Burden 9%

Gross Bill $2,050

Net Utility Bill $1,356

Total Utility Subsidy $694

LIHEAP Grant $400

Net Utility Subsidy $294

Net Customer Burden 9%

Joint Benefit Distribution

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PA Low-Income Bill Payment Assistance Programs Program Participant Survey Research

“What do you feel are the benefits of the program?”Utility 1 Utility 2 Utility 3 Utility 4

Lower energy bills 48% 33% 30% 50%

Even payments 29% 22% 41% 14%

Maintaining service 9% 20% 16% 11%

Reduced arrearages 14% 15% 16% 7%

Don’t know 9% 2% 9% 10%Source: APPRISE surveys with low-income bill payment assistance program participants in PA utility programs.

Funds Transfer

• Ratepayer funds combined with LIHEAP funds.

• Total funding used to determine one benefit.

• Advantages– Equitable total benefit.– One program to administer.– One program for client to understand and apply for.

• Disadvantages– Potential loss of utility specific information.– Loss of fuel/use specific benefit targeting.

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HHS GUIDANCE JULY 2010 INFORMATION MEMORANDUM

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Memo Purpose

• Concern that LIHEAP funds used in PIPPs or other vendor assistance programs are not administered in accordance with LIHEAP statutory or regulatory requirements.

• Clarify ways that LIHEAP funds may be coordinated with vendor energy assistance programs, and continue to be governed by the LIHEAP statute and regulations.

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Coordination Requirements

• The State must ensure that LIHEAP funds continue to be governed by the LIHEAP statute, regulations and State plan.

• The coordination must be described in the State’s LIHEAP plan.

• The LIHEAP client should be informed of how his LIHEAP benefit will be applied to his bill under the PIPP program.

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Coordination Requirements

• Must be described in State Plan:– If LIHEAP is applied to the client’s bill

incrementally, over a period of time, and represented to the client as the “PIPP” discount.

– When LIHEAP funds are applied to a LIHEAP client’s utility arrearage amount under the PIPP program.

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Coordination Requirements

• The utility does not have independent authority to use LIHEAP for any other customer or purpose.

• Subtracting LIHEAP from the client’s energy bill to calculate the PIPP discount appears to be using LIHEAP as a resource and creates an inequity or adverse treatment for PIPP participants. HHS will question the practice and ask for a grantee’s legal opinion supporting this practice and its compliance with the LIHEAP statute.

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SUMMARY AND RECOMMENDATIONS

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Summary

• Coordination has implications for:– Equity– Monthly bill variation– LIHEAP application incentive– Administrative process– Information availability

• All issues should be considered when determining whether and how to coordinate.

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Contact Information

Jackie Berger, Ph.D.President and Co-Founder

APPRISE32 Nassau Street, Suite 200

Princeton, NJ 08542609-252-8009

jackie-berger@appriseinc.orgwww.appriseinc.org

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