July 2018: LIHEAP News Wrap Up

Analysis, Advocacy and Action Across the Country

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Writing and Reporting by Jake Brown

Heat was the headline of the month as many of the hottest temperatures on record plagued the country indiscriminate of geography. Communities everywhere were draining LIHEAP funds to help cool homes. The North East Community Action Corporation of Hannibal, MO, announced in a new record that over HALF their available LIHEAP funds had already been spent within the FIRST WEEK of availability!  Local television station WGEM captured the crisis in an interview with NECAC Services Coordinator Gwen Koch, who confirmed that “right now, we have already spent 64% of the funding. that just started June 1st, so given that we don’t know how much longer it’s going to last, but a lot of people have already hit that 300, so unfortunately that makes it really hard on people.” 

 

Program beneficiary and sometimes NECAC volunteer Linda Krigbaum, who works to help residents with their utility bills throughout the blistering Midwestern summer, shared her customers’ concerns with the television station, agreeing that  “we hear their stories, we hear a lot of sad ones.”  Feeling the same heat, retired iron worker and maintenance man William M. Williams of Homewood, PA, had a similar story to tell to the Pittsburgh Post Gazette, inviting the paper inside his home for a vivid, real-life look at the crisis in action. Working with the helping hand of the city’s sustainability officials, he was grateful for the assistance in weatherizing his home to current codes and technologies well out of his affordability, agreeing the “program is good. They’ve helped me a lot. Since I’m older now, there’s a lot of things that take me some time to do…That, plus I don’t have the money. These are core, basic things that translate a building from shelter into a home. Without having them or being able to afford them, it wreaks havoc on the ability to maintain stable housing.”

 

With the Pittsburgh Post Gazette’s conclusion that commonalities like the fact that residents like Mr. Williams “often live in less efficient housing and pay more per square foot on energy costs,” Patrick Cicero, director of the Pennsylvania Utility Law Project confirmed that Williams’ dilemma is reflective of a broad-based problem facing millions of similar households around the country where “the overwhelming energy burden that low-income households face makes it extraordinarily difficult for them to pay for all of life’s necessities, including energy and utility costs, housing, food and medicine.”  Always living just one crisis from a shut-off that could be triggered by any of the latter conditions, East Liberty resident Mary Jonson admitted in the Gazette’s coverage that she found herself in precisely that position while “going through a financial crisis…It was very stressful. I thought I would lose my Section 8 (housing assistance). I felt alone and depressed.”

 

Examples of why more comprehensive solutions need to be proposed in the long-term, studies like that published in July by the Smart Energy Consumer Collaborative (SECC) in Atlanta picked July to publish a new report, “Spotlight on Low-Income Consumers: Revisiting Their Needs and Wants.”  An analysis based on five different demographics who all shared “the attitudes and behaviors of residential energy customers with incomes less than $50,000 per year, which roughly corresponds with the bottom half of U.S. household incomes,” the report confirmed a common knowledge fact among the lower middle class and working poor that “these consumers pay a disproportionately high amount of their income for the energy needed to light, heat and cool their homes – often three times more (relative to their incomes) than the general population.”

 

Elaborating on the findings, further analysis by Electric Light and Power revealed that its principal author, Dr. Schwartz, explained that “for this research, we have divided lower-income consumers into two groups: consumers with household incomes less than $25,000 per year (low-income (LI) or $25K and those with incomes between $25,000–$50,000 per year (low-to-middle income (LMI) or $25K–$50K). We compare these two lower-income groups to consumers with household incomes of $50,000 or more (higher income (HI) or $50K+) per year.  The research sought to examine the attitudes, values, interests and engagement of these lower-income energy consumers.”

 

Echoing frontline experts like Andrew Shull, an administrator at ACTION Housing, who explained to the Pittsburg Post Gazette in their coverage above that “part of being poor is you can’t make huge up-front payments for long-term returns. We see it with HVAC systems, poor insulation, leaky roofs,” without the economic means of those income classes above them to spend on more sophisticated upgrades to “energy-related technologies,” along with highlighting the “alarming gap” in the 20% of eligible LIHEAP recipients, Dr. Schwartz’ study recommended that “industry stakeholders can better serve their needs by outlining opportunities for program design and customer outreach. These include suggestions for outreach that utilize existing community channels, including neighborhood associations, religious organizations and community centers, and for program design that streamline enrollment and directly address the financial hurdles that low-income consumers face when starting a program.”

 

On the brighter side, Dr. Schwartz’ study found that among those customers who struggle most with utility bills, “there is enough interest in these options across all income levels (35 percent and 25 percent respectively) to educate and promote these plans as placing consumers in control of their energy usage. Showcasing successes like Georgia Power’s ‘You Can Prepay’ program and emphasizing consumer benefits, like control over electricity usage and the elimination of deposit requirements, may be effective in alleviating common concerns. Promoting these options as low investment ways to save money should appeal especially to LI consumers.” 

Among the biggest roadblocks standing in their way day in and out were what the study found to be “concerns among LI consumers related to the cost and up-front financial investment required to make their homes more energy efficient are real and warrant specific attention. When we asked consumers to rate the challenges to saving energy at home, more than half of LI consumers rated the cost of equipment upgrades and replacements as their most pressing problem.”  Regardless of income, the study not surprisingly found that “Smart appliances are interesting to many consumers, regardless of their income. This result may reflect, in part, the convenience and potential for energy savings offered by these newer, connected appliances. Finding ways to make these appliances affordable will be a challenge for program designers, but consumer interest is there. Incentives of all types may make this investment hurdle easier to surmount. Besides utility-sponsored rebate programs, other options to consider include on-bill financing programs such as Pay As You Save (PAYS) mentioned earlier as well as grants from nonprofits and foundations. Any communication on these investments should underscore short or no payback periods to motivate adoption.”

Pointing to a pilot program launched in Austin, Texas as the kind of utility-community partnership that produced the results everyone was seeking regardless of zip code, “Direct Energy’s Neighbor-to-Neighbor program in partnership with Gridmates, a technology provider based in Austin, Texas, allows citizens to directly donate money through their utility to assist neighbors in need. Prepay programs allow low-income consumers to avoid deposits and fines, and more easily understand their energy usage. Finally, there are on-bill financing programs such as Pay As You Save (PAYS) that allow people with limited means to pay for technology or weatherization improvements without a direct cash outlay. A share of the reduced bill savings is used to pay for the improvements, and consumers share the bill savings with the utility to pay for the project. When the project is paid off, consumers benefit even more.”

Responding to the study’s publication and its implications for both companies looking to keep their clients out of arrears and customers in need of help doing so, an editorial by Energy Association of Pennsylvania President & CEO Terrance J Fitzpatrick sought to reassure the public that “Pennsylvania’s electric and natural gas utilities are committed to assisting low-income customers in affording their energy bills through a variety of initiatives including reduced rates, weatherization and usage reduction measures, hardship fund grants, and energy conservation education and referrals. These utility-run programs, which are mostly paid for by other customers, provided reduced bills to over 440,000 low-income enrollees during 2016. If they make timely payments, customers enrolled in these programs are able to maintain service and can earn forgiveness of past due amounts.” 

 

Reminding readers of the Post Gazette that “utility-run, ratepayer-funded assistance programs are just one piece of a societal puzzle aimed at helping low-income families afford the cost of living in the commonwealth,” Fitzpatrick added up the impressive disparity in closing  between “the total statewide cost of these programs (as)…nearly $400 million in 2016, almost twice the $213 million allocated to the state by the federal government via the Low-Income Home Energy Assistance Program (LIHEAP).”

 

            Eager for input from their community on how to better service their energy needs, the St. Louis Post Dispatch made the public aware this past month of the 2019 LIHEAP Notice where the “model state plan is available for public review and comment, and a public hearing for this plan will be held at the JAMES C. KIRKPATRICK State Information Center,” while the trend followed out in the Southwest, the Oklahoma Department of Human Services announced they were holding public hearings in July “to present its state plan about funding for the Low Income Energy Assistance Program (LIHEAP),” the Guthrie News Leader reported.  With getting the word out to their communities as arguably among the most important ongoing functions any energy assistance organization has, the Southeast Tennessee Human Resource Agency (SETHRA) was broadcasting the beginning of their application season for the summer at the top of July. 

 

Through the end of the month, such outreach continued around the country to keep LIHEAP in the press, from public announcements to studies being published, newspapers and television stations covering local heroics to provide the public with energy education and assistance, with perhaps one of the most poignant efforts coming from an editorial in the Cincinnati Enquirer illustrating highlights from across the country that included “Community Action Agency (CAA) recording…episodes of poverty over many years for…the Home Energy Assistance Program (LIHEAP)” and Miami University in Ohio’s students frequently working through the Miami University Center for Community Engagement “in tandem with Northern Kentucky University students in these initiatives to engage with residents of the community, many needing life-saving services such as TANF, HEAP, and housing assistance. Just as importantly, our students learn how these community residents risk removal of their housing, displacement from their community for purposes of economic development.”

 

 

 

 

 

 

Sources:

1.) http://www.post-gazette.com/local/city/2018/07/09/Low-income-households-typically-pay-higher-percentage-of-income-for-utilities-pittsburgh/stories/201807030080

 

2.) https://markets.businessinsider.com/news/stocks/smart-energy-consumer-collaborative-study-shows-opportunities-for-engaging-low-income-energy-customers-1027382552

 

3.) https://www.elp.com/articles/2018/07/low-income-customers-and-energy-savings-an-secc-investigation.html

 

4.) http://www.post-gazette.com/opinion/letters/2018/07/23/A-real-way-to-help-people-with-utility-bills/stories/201807230031

 

5.) http://www.wgem.com/story/38569080/2018/07/Tuesday/summer-electric-bill-assistance-funds-low

6.) https://www.stltoday.com/ads/community/announcements/proposals/liheap-notice-the-ffy-low-income-home-energy-assistance-program/ad_84c3f76c-ccdc-53aa-b7fa-1a5d20760d2f.html

7.) http://www.guthrienewsleader.net/lifestyle/dhs-announces-public-meetings-for-liheap-funding/article_84734f36-83c9-11e8-a4ce-f70d344c7b71.html

 

8.) https://www.cincinnati.com/story/opinion/2018/07/27/opinion-gentrification-low-wages-keeping-people-poverty/836405002/