Can’t we just do it because it’s the right thing to do? Roger D. Colton Fisher, Sheehan & Colton Belmont, MA National Low-Income Energy Consortium (NLIEC)

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Presentation transcript:

Can’t we just do it because it’s the right thing to do? Roger D. Colton Fisher, Sheehan & Colton Belmont, MA National Low-Income Energy Consortium (NLIEC) June 2007

NLIEC--June 2007 Justifying Low-Income Programs A Typical State

NLIEC--June 2007 Growth in EA Accounts in Arrears: Iowa

NLIEC--June 2007 Growth in Disconnects: Iowa

NLIEC--June 2007 Growth in EA Accounts Written-offs: Iowa

NLIEC--June 2007 Past Rationales for Rate Affordability Programs Pennsylvania PUC: Stop “wasteful cycle” of disconnect/reconnect/failed payment plan/disconnect... Pennsylvania PUC: Stop “wasteful cycle” of disconnect/reconnect/failed payment plan/disconnect... Ohio PUC: “Emergency” situation represented by tens of thousands of disconnected low- income customers. Ohio PUC: “Emergency” situation represented by tens of thousands of disconnected low- income customers. Philadelphia Gas Commission: best of the “available alternatives.” Philadelphia Gas Commission: best of the “available alternatives.” Maryland: Provide “concrete benefits” to all ratepayers. Maryland: Provide “concrete benefits” to all ratepayers.

NLIEC--June 2007 What a “Business Case” Rationale is NOT Savings must exceed the costs. Savings must exceed the costs. Benefit/cost ratio of 1.0 or more. Benefit/cost ratio of 1.0 or more. Impact is to reduce rates to nonparticipants. Impact is to reduce rates to nonparticipants. Only utility costs and benefits matter. Only utility costs and benefits matter. Least expensive is optimum. Least expensive is optimum.

NLIEC--June 2007 Justifying Low-Income Programs Managing Arrears

NLIEC--June 2007 Increase in Bills/Increase in Arrears 2005 to 2006 (Vectren) JanAprAug BillsArrearsBillsArrearsBillsArrears USP1$51$32$84$23$111$0 USP2$45$27$72$32$88$8 USP3$59$48$94$63$124$25

NLIEC--June 2007 Change in “Bills Behind” 2005 to 2006 (CGCU) FebMarAprMayJunJulAug Change(1.2)(1.2)(1.6)(1.3)(1.8)(1.9)(1.6)

NLIEC--June 2007 Justifying Low-Income Programs Interrupting Disconnect Cycle

NLIEC--June 2007 Winter Warmth Customers in Arrears by Months after DNP Notice (NIPSCO) DecJanFebMarApr 2 > 0 but 0 but < DNP amt ,6904,057 > 0 but 0 but < 50% DNP amt ,1992,314 > DNP amount 2,8572,3791,3191,9631,756 3 > 0 but 0 but < DNP amt ,0265, > 0 but 0 but < 50% DNP amt , > DNP amount 2,9411, ,408---

NLIEC--June 2007 Justifying Low-Income Programs More Effective Nonpayment Response

NLIEC--June 2007 Winter Warmth Customers with More than $0 Arrears by Months after Program Payment (NIPSCO) JanFebMarAprMay 1 month after months after months after months after Total WW ,2114,1642,977

NLIEC--June 2007 Of Low-Income Accounts with December Arrears, Percent with No Arrears in Comparison Month (Empire District) Tier 1 Tier 2 JanFebMarAprJanFebMarApr 2003/200432%32%34%47%43%42%38%51% 2004/200557%64%59%68%42%45%49%61% Empire District Experimental Low-Income Program (ELIP) program evaluation (FSC).

NLIEC--June 2007 Of Low-Income Accounts with December Arrears, Percent with No or Decreased Arrears in Comparison Month Tier 1 (0 – 100% FPL) Tier 2 (101 – 150% FPL) JanFebMarAprJanFebMarApr 2003/200458%62%75%72%71%76%83%80% 2004/200571%81%80%82%73%75%84%84% Empire District Experimental Low-Income Program (ELIP) program evaluation (FSC).

NLIEC--June 2007 For more information: NewsLibrary

NLIEC--June 2007 For more information: