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
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