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 2

COORDINATION ADVANTAGES AND DISADVANTAGES 3

Program Coordination General Advantages Efficiency Equity Simplicity Integrity 4

Program Coordination Efficiency Efficiency: use existing infrastructure –Single application. –One set of intake agencies. –Joint eligibility determination. –Single database. –Reduced administrative burden. 5

Program Coordination Equity 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. 6

Program Coordination Simplicity 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. 7

Program Coordination Integrity 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. 8

Program Coordination General Disadvantages Different goals –Focus on home heating and cooling. –Focus on electric usage. State data access –Energy usage data. –Payment compliance data. 9

COORDINATION MODELS 10

Models Complete Integration Funds transferred to LIHEAP Major Coordination Joint Benefit Distribution Moderate Coordination Benefit Calculation Determined Jointly Minor Coordination Presumptive Eligibility/Automatic Enrollment Linkage Refer, Target, Participation Requirement 11

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. 12

Linkage Possible utility LIHEAP policy –Penalty for not applying for LIHEAP. –LIHEAP requirement for program participation. Advantage: encourage application Disadvantage: barriers for some customers 13

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). 14

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. 15

Joint Benefit Calculation NJ 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. 16

Joint Benefit Calculation NJ 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 17

Joint Benefit Calculation NJ 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 18

Joint Benefit Calculation NJ Example 19 Gross Electric Bill USF Credit Gross Gas Bill USF CreditLIHEAPNet 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 July $150$50$65$75$90 August $175$50$70$75$120 September $110$50$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. 20

Joint Benefit Distribution Poverty LevelNatural Gas HeatingElectric HeatingElectric 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% 21 Pennsylvania Public Utility Commission Energy Burden Targets

Joint Benefit Distribution 22 Percent of Income (PIPP) Illustration Poverty Level Customer Payment Example Annual Income Payment Calculation Monthly Payment Minimum $25$0Minimum$25 0% - 50% 8%$10,000.08*$10,000/12$67 51% - 100% 9%$15,000.09*$15,000/12$ % - 150% 10%$25,000.10*$25,000/12$208

Joint Benefit Distribution 23 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 24 Gross Electric Bill PIPP Payment LIHEAP Net Payment January $325$113$400.00$0 February $315$113$0 March $275$113$0 April $145$113$61 May $85$113 June $75$113 July $65$113 August $70$113 September $75$113 October $125$113 November $225$113 December $270$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 25 Gross Electric Bill PIPP Payment LIHEAPSubsidy Net Subsidy January $325$113.00$400.00$212$0 February $315$113.00$202$14 March $275$113.00$162 April $145$113.00$32 May $85$113.00($28) June $75$113.00($38) July $65$113.00($48) August $70$113.00($43) September $75$113.00($38) October $125$113.00$12 November $225$113.00$112 December $270$113.00$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 26 PA Low-Income Bill Payment Assistance Programs Program Participant Survey Research “What do you feel are the benefits of the program?” Utility 1Utility 2Utility 3Utility 4 Lower energy bills48%33%30%50% Even payments29%22%41%14% Maintaining service9%20%16%11% Reduced arrearages14%15%16%7% Don’t know9%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. 27

HHS GUIDANCE JULY 2010 INFORMATION MEMORANDUM 28

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. 29

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. 30

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. 31

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. 32

SUMMARY AND RECOMMENDATIONS 33

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. 34

Contact Information Jackie Berger, Ph.D. President and Co-Founder APPRISE 32 Nassau Street, Suite 200 Princeton, NJ