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Overview of Low-Income Restructuring
|
EUSP Summary Data Program Year FY 2001-2008 |
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---|---|---|---|---|---|---|---|---|
Program
Year |
||||||||
Type
of Program |
2008 |
2007 |
2006 |
2005 |
2004 |
2003 |
2002 |
2001 |
Arrearage |
||||||||
Applicants Served | 7,957 |
10,468 |
3,900 |
3,894 |
4,888
|
3,551 |
5,148 |
26,211 |
Average Grant | $801 |
$486 |
$445 |
$385 |
$307 |
$432 |
$415 |
$270 |
Benefit Expenditures | $6.4* million |
$5.1* million |
$1.7 million |
$1.5 million |
$1.5 million |
$1.5 million |
$2 million |
$7.7 million |
Bill
Assistance |
||||||||
Applicants Served | 100,670 |
93,323 |
83,853 |
78,668 |
72,390 |
69,781 |
57,585 |
56,245 |
Average Grant | $601 |
$510 |
$410 |
$361 |
$396 |
$419 |
$287 |
$270 |
Benefit Expenditures | $58.6*
million |
$46.6* million |
$34.3 million |
$28 million |
$28.7 million |
$29.2 million |
$16.7 million
|
$17.6 million |
*Includes state funds
Source: Maryland Department of Human Resources, Office of Home Energy Programs
History
SB 300, Maryland's 1999 restructuring law, defined a universal service program as one that "helps low-income customers maintain electric service," and includes "customer bill assistance and payment programs, termination of service protection, and policies and services that help low-income customers to reduce or manage energy consumption in a cost-effective manner."
Collection of the universal service funds from customers started in July 2000, and OHEP then began operating the newly-created Electric Universal Service Program with the three components: bill payment assistance, arrearage retirement payments and weatherization
The restructuring law said that for the first three years, at least half of the fund should be spent on bill payment assistance, and the remainder on energy efficiency and retirement of arrearages incurred by low-income households prior to the initial implementation date of the program (July 1, 2000). The law's provision for arrearage retirement stemmed from studies showing that low-income households' inability to pay utility bills was partly due to accrual of significant arrearages.
The restructuring law authorized the EUSP for three years. On June 30, 2003, Maryland finished the initial three years. In April 2003, the EUSP was given an extension, and its funding of $34 million per year was continued, subject to annual review and approval by the PSC and the legislature. SB 504, the bill to extend the program, was signed into law April 22, 2003.
SB 504 continued the original program structure, except that it capped arrearage retirement funding at $1.5 million per year, although the funding cap was removed for the 2007 program, and limited payments to those customers who hadn’t previously received arrearage retirement assistance. (SB 504 also allowed the program to waive income eligibility guidelines to provide bill payment assistance to customers experiencing "extraordinary circumstances" such as major medical emergencies or losses due to major natural disasters.
The lion's share of the EUSP funding comes from industrial and commercial customers; during the first 6 years it was $24.4 million; due to the above-mentioned actions of the state legislature, it is now $27.4 million. The remaining $9.6 million comes from residential customers, who pay about 40 cents per month.
Because EUSP is administered by OHEP, clients can apply at local LIHEAP agencies for both programs year round, as well as for the Maryland Weatherization Assistance Program, operated by another department. EUSP has the same income eligibility level as MEAP.
In designing the SFY 2006 program, OHEP proposed and attained PSC approval for changes in its benefit determination methodology for the bill assistance component with a goal of better targeting assistance to the most needy. These changes remained in effect for SFY 2007 and 2008. The bill payment program calculates benefits based on income and household size, actual household electricity consumption, and electricity price. Previously, OHEP’s calculation took into account average or approximate consumption and income. The EUSP benefit is integrated with the state’s LIHEAP benefit, which, as of FY 2006, also utilizes a more targeted benefit matrix. OHEP explained in its program proposal that its previous benefit calculations had resulted in some households with low consumption receiving a credit on their utility bills.
Beginning in SFY 2006, OHEP reconfigured its poverty criteria for determining benefit levels by utilizing groupings of 0-75 percent of federal poverty guidelines, 76-110 percent FPG and 111-150 percent FPG in order to provide better targeting of benefits. For the 2007 and 2008 program year, it added another grouping: 151-175 percent FPG.
For FY 2008, the income group of 0-75 percent of poverty received a benefit that was equal to 75 percent of the estimated annual bill; at 76-110 percent, it was 60 percent. The group from 111-150 percent received a benefit equal to 50 percent of the estimated annual electric cost. Those households living in subsidized housing received a benefit that was 14.5 percent of the annual cost. If the applicant heated with electricity and received a MEAP benefit for electricity an additional 15 percent of the estimated bill was received through a MEAP benefit.
Under the arrearage management component, OHEP added a requirement that applicants must have a minimum of $100 in past due bills (this was changed to $300 for FY 2008) and the maximum benefit amount is capped at $2,000. In its annual reports and in its proposal for 2008, OHEP has noted that the $1.5 million for arrears retirement is exhausted early in the program and has suggested that the statutory funding limit be changed because there is not enough funding to serve everyone who is eligible.
In EUSP documents, both the OHEP and the PSC noted that implementation of the weatherization program lagged behind the other two components. Because of start-up issues and delays in issuing an invitation to bid for program operation, the EUSP weatherization funds were under spent most years. The transfer of the weatherization component to the state weatherization office is expected to result in a more efficient program because it will be coordinated with the federal weatherization program.
Evaluation
In May 2007, an evaluation of the EUSP presenting the results of process and impact evaluations of the programs conducted from July 1, 2004 to June 30, 2006 was completed by PA Consulting group.
Among the conclusions of the evaluation:
- The program is reaching and helping households with some of the most severe needs.
- New or recent participants in the program don’t exhibit improved bill payment behaviors and probably can’t respond with improved bill payment behaviors in the short term because they other substantial needs as well.
- Participants continuing in the program do show improvements in bill payment behavior.
- The annual growth in eligible applicants served since 2001 is 48 percent.
- The program is reaching households in great need of electric assistance as seen by the high average electric burden of participants and the customer survey results showing the needs of these households and their concerns with meeting monthly electric costs
- High participant satisfaction was shown with the budget billing and arrearage component of the program as well as with the application process
Among recommendations for improvements, the evaluation said OHEP should: explore ways to increase program retention of eligible households from year to year; investigate the trade-off between greater program standardization to deliver services consistently throughout the state and inefficiencies that may result from greater standardization; strengthen program processes that will improve the equitable distribution of EUSP benefits across the state; convene the EUSP working group to discuss ways to increase the effectiveness of EUSP administration, in particular, review changes needed in administrative funding limitations in order to address improvements in application processing, local agency training and the OHEP information system; and explore ways to better coordinate EUSP with other assistance programs.
For more information on Maryland's EUSP, check the following:
- Electric Universal Service Program Evaluation: Final Evaluation Report, PA Consulting Group, May 2007
- Filings from stakeholders on issues related to the EUSP. Enter Case Number 8903.
- PSC Order Number 75935, which adopted the DHR's plan for initial EUSP operation.
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Page Last Updated: December 18, 2008