1. Ten Things to Do to Fill the Home Energy Affordability Gap in Warm Weather States Presented to NCAF Leveraging Conference by: Roger D. Colton Fisher, Sheehan & Colton (FSC) Belmont, MA 02478 (voice) 617-484-0597 November 2007

2. Filling the Affordability Gap: NCAF Leveraging Conference 2 Why do we care? Starting Point: Home Energy Burdens Shelter burdens affordable at 30% of income. Utility costs affordable at 6% of income (20% of shelter costs).

3. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 3 Home Energy Affordability Gap

4. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 4 The Need for a Toolkit Approach “When your only tool is a hammer, you tend to see every problem as a nail.”

5. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 5 Tool #1: Food Stamps: Excess Shelter Deduction Food Stamp eligibility based on “countable income.” –Shelter expenses above 50% an income deduction. –Shelter = rent/mortgage + utilities (include telephone) Actual shelter costs

6. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 6 Tool #2: Food Stamps: Standard Utility Allowance Annual Review Take increased energy prices into account. Take water and wastewater into account Take all components of telephone bills into account. More advanced advocacy: Take load curves into account. (not simply average)

7. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 7 Impacts of Tool #1 and #2: Food Stamps: Excess Shelter Deduction If household income is lowered: –Some qualify for Food Stamps when they otherwise would not –Some qualify for more Food Stamps Every $3 reduction in income yields $2 in benefits. –Implications for spike in fuel prices! Customers indifferent as to source of dollars.

8. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 8 Tool #3: PHA Utility Allowances Tenant-paid utilities (public and assisted housing) Covers electricity, heating/cooling, water/sewer Covers (theoretically) 100% of bill Year-round -- not seasonal Regular update (if enforced) Annual review of utility allowances. Adjust when “rates” change by 10% or more. –Retroactive to date of rate increase More advanced advocacy: Does utility allowance pay for cooling?

9. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 9 Tool #3 (continued) : PHA Utility Allowances: What Needs to be Done Review utility allowances to ensure annual update. Provide notice to PHAs whenever rates change by 10% or more. Review whether utility allowance pays for cooling More advanced advocacy: Review reasonableness of utility allowances Call for help!

10. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 10 Tool #4: The Earned Income Tax Credit Country’s primary anti-poverty program. Refundable tax credit (cash back). –Average refund: around $2,000. –3-year retroactive refund application. 1/3 used to pay for past-due utility bills. Only 50 - 80% of eligible claim.

11. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 11 Tool #4 (continued) : Earned Income Tax Credit (EITC) Potential CAA Action Steps Mass utility outreach campaigns (NJ) “Gap filler” outreach campaign –Part-time workers –Women-workers –Hispanic workers Targeted outreach Utility call center recorded message

12. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 12 Tool #5: Alternatives to Paid Tax Preparers Low-income households often lose $300 or more of their EITC –Pay between $100 and $200 to have their tax returns prepared. –Sold “refund anticipation loans” at a cost of 400% in interest. Things for CAA to do VITA campaign (Illinois--Ameritech) Nonprofit tax prepayers (AARP) (Belmont) CAA as nonprofit tax preparation.

13. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 13 Tool #6: Alternatives to Cash Security Deposits Agency-provided surety or “guarantee of payment.” –Provide letter guaranteeing payment. –Guarantee only “kicks in” if customer leaves system with bad debt. –For new deposit demands. Substitute guarantee or surety for existing deposit. –Use existing deposit to help pay arrears. Ensure that deposit reflects: –budget bill (if 2x maximum bill). –Weatherized bill (if WAP or DSM participant). Behavioral responses as alternatives to deposits: –Attendance in financial literacy training. –Enrollment in budget billing.

14. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 14 Tool #7: Addressing LPG (Propane) Gas Propane Education and Research Council (PERC) 20% of PERC assessment collected in a state funneled back to state propane councils (or similar entity). –$38 million total PERC nationwide (2003). More than 35 percent of the households using propane to heat their homes are eligible for LIHEAP. GAO (2003): appropriate to use PERC funding to address the unaffordability of propane prices to low- income households.

15. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 15 Tool #7: Addressing LPG (Propane) Gas Application to statewide propane council. Potential uses of PERC funding:  Education re. “price stabilization” options:  off-season purchases.  budget-billing  PERC funding is not likely available for comprehensive weatherization.  However, low-cost energy efficiency packets can be one element of a propane education program.

16. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 16 Tool #8: Summer Food Service Program Summer time generally considered “low cost” energy months. ”Kid-related food expenses”: second-leading financial problem for customers in financial trouble with their utility. If you have: –two kids at home and spend $3/meal (VERY conservatively), –that's $12/day x 20 school days a month or $240 EACH MONTH 2.85 million kids each day in Summer Food Service Program. –BUT only 17.7 kids receive summer Food Service for every 100 kids in school lunch/school breakfast programs

17. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 17 Tool #8: Summer Food Service Program Things to do: –Promote Summer Food Service Centers. YMCA/YWCA Recreation Department summer sites Public schools Other nonprofits –Promote participation at Summer Food Service Centers. Visit: http://www.FRAC.org (Food Research and Action Council)

18. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 18 Tool #9: Using Your Rural Electric Co-ops Soliciting “patronage capital refunds.” Iowa average patronage capital refund: $67/year Impact of solicitation of “found money” –CEAF (now Energy Outreach Colorado): rate refund –10% of all customers donated something –Collected 4% of total refund back to distribute as energy assistance ($25 average per contribution) –Normal: 2% contributor and $10 contribution.

19. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 19 Tool #10: Capturing Rate Refunds/Deposits Money that “escheats” to state if “abandoned.” –Rate refunds –Deposits –REC Patronage capital refunds/credits Low-income attributes that are relevant: –High mobility –Less creditworthiness/more likely to post deposits Two ways to approach: –Assign deposits to low-income crisis fund rather than being abandoned. –Legislative directive to capture escheated utility funds. Colorado and 20% of rate refunds.

20. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 20 My list of things to do on Monday: *Begin to draft internal process to calculate shelter costs as percentage of income for all CAA clients. *Begin to draft process of notifying Food Stamp if >50%. *Request from state Food Stamp director: (a) last year’s Standard Utility Allowance (SUA); (b) this year’s SUA; and (c) date of most recent update to reflect change in prices. *Request from relevant Local Housing Authorities: (a) the utility allowance schedules currently in use for section 8, for public housing, and for any other assisted housing. Ask for date of most recent update to those utility allowances. *Contact state utility commission (state energy office?) and ask for any regular periodic reports on energy prices for primary fuels in state. *Submit request to Internal Revenue Service (IRS) for the local penetration of EITC among eligible recipients. Submit locally (or to Atlanta).

21. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 21 My list of things to do on Monday: *Draft letter to all local utilities asking for how they promote the EITC. Find out who administers “call center” for local utility. *Obtain script for a call-center EITC message for utility call centers and schedule appointment to discuss using such script on call-center “holds.” *Obtain EITC outreach kit from Center on Budget and Policy Priorities EITC Outreach Campaign (Washington D.C.). *Find all all free tax preparation clinics (VITA, AARP, other) and prepare outreach for all persons making in-person contact with CAA. *Draft letter to all utility contacts asking for complete set of policies on the extent to which utility accepts alternatives to cash security deposits. *Begin drafting process through which to ask all clients making in-person contact with CAA: (a) do you have a cash deposit with the utility; (b) do you want a deposit refund (in whole or in part) if possible; and (c) do you want us to request such a refund if available. *Find state propane council. Obtain their most recent (or two most recent) annual reports and annual budgets.

22. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 22 My list of things to do on Monday: *Find state propane council. Obtain their most recent (or two most recent) annual reports and annual budgets. *Find list of all Summer Food Service Program sites in your locality. Find out who is local director and schedule appointment. *Contact state utility commission to obtain a list of all Rural Electric Cooperatives (RECs) in the state. *Inquire as to which of these RECs have fuel funds. *Inquire as to what policies exist regarding abandoned patronage capital credits. *Obtain annual report (including annual financial report). *Contact FSC in Belmont (MA) for a copy of the Iowa Community Action Association (ICAA) REC fuel fund proposals. *Write letter to State Treasurer request data on the number of dollars that have escheated to the state each year for the past five years from utilities or RECs. *Post e-mail and phone number of Roger on office wall (or on computer) in order to contact him for help with pursuing any of these suggestions.

23. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 23 For more information: http://www.fsconline.com News Library

24. November 2007Filling the Affordability Gap: NCAF Leveraging Conference 24 For more information: roger@fsconline.com