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Fuel Funds and LIHEAP Compiled by the LIHEAP Clearinghouse
Most fuel funds involve a working relationship between one or more utilities and one or more social service or charitable organizations. The utility partner is responsible for raising private donations for the fund through customer, shareholder, corporate or other contributions, and the social services partner administers the funds to provide energy assistance to low-income households. In many cases, utilities match customer contributions at least dollar for dollar. Fuel funds may also be coordinated and integrated with LIHEAP; in fact, this is increasingly important in light of LIHEAP leveraging incentive funds that states can apply for based upon the amount of additional home energy resources they have acquired for their low-income households. Fuel funds can provide a flexible response to families in crisis who have exhausted all public sources of help, whose needs are extraordinary, or who do not quite meet their state's requirements for LIHEAP assistance. Fuel funds develop their own eligibility and income guidelines based on community experiences and needs. Virtually all fuel funds provide some form of assistance to low-income households in helping them afford household energy costs. This assistance includes helping eligible households pay their energy bills, or purchasing large quantities of fuel oil, wood, and coal and making it available to eligible clients. Some fuel funds have broadened their missions to include furnace retrofits and repairs, weatherization, energy education and counseling, and development and implementation of innovative budgeting and bill payment programs. Still others are responding to changing energy markets by carving a niche for themselves in the utility restructuring process. (See Fuel Funds and Societal Issues).
NFFN's current goals are:
In June 2003, at the National Petroleum Council Natural Gas Summit, Carol Clements, chairperson of the NFFN board of directors, stated "The National Fuel Funds Network represents 265 charitably funded energy assistance programs, which raise and distribute private contributions in their local communities or states to assist people with low incomes pay home energy bills. Nationally, fuel funds annually assist approximately 1.8 million households to make heating or cooling bill assistance payments of over $125 million." According to NFFN, energy utilities were responsible for raising approximately one-fourth of the total $125 million in fuel funds that helped the needy to meet their home energy needs in 2002. NFFN's activities include its annual conference, in which members receive training and continuing education, a regional conference, technical assistance to members, production of booklets, tapes and a quarterly newsletter, advocacy on federal low-income energy assistance issues and special coalition-building projects. In response to predictions that home energy prices would rise 30-40 percent in 2000-01, NFFN launched its Energy Safety Net Project in November 2000, to promote, through the Safety Net Bulletins, the innovative measures that members and others were taking to prepare for and cope with the projected price rises. A list of NFFN publications and an order form can be found on its website or by contactingl: NFFN, 733 15th St., NW, Ste. 940, Washington, DC 20005; (202) 824-0660. The final rule implementing the leveraging provisions of LIHEAP was published May 1, 1995 in the Federal Register. The criteria that fuel funds and other resources must meet in order to be counted and how resources are quantified are explained in the rule. At a minimum, fuel funds must be specifically coordinated and integrated with LIHEAP programs and described in a grantee's LIHEAP plan in order to be counted. A fuel fund that is operated independently of LIHEAP, even though it serves low-income people within federal poverty guidelines, would probably not qualify as a leveraged resource. Questions as to whether specific fuel fund resources can be counted as leveraged resource can only be answered by the U.S. Department of Health and Human Services. Additional background information on leveraging is available from the Clearinghouse, as are copies of the leveraging regulations. Since 1991, the LIHEAP Clearinghouse has been tabulating the amount of fuel funds claimed by states and Indian tribes or tribal organizations as leveraged resources. For FY 1991, 29 states claimed $16 million from fuel funds. That amount has increased to $53 million and $67 million claimed by 28 states in FY 2001 and 2002, respectively. While only a handful of tribes reported fuel funds as leveraged resources in the past, most tribes reported receiving tribal government funds to supplement LIHEAP, especially for energy emergencies. The LIHEAP Clearinghouse state supplements table provides a state-by-state estimate of fuel fund leveraging activity per states' LIHEAP leveraging reports for FY 1991 through FY 2006. Note that these totals differ from those reported under leveraging and are not accurate reflections of national fuel fund activity for the following reasons: some states may include fuel fund dollars with funds raised by community, church or charitable groups; some may not report all fuel fund activity; and a fuel fund may serve above-income households or pay for non-energy utilities such as water or phones, which would not be countable resources under LIHEAP leveraging.
Maryland The Fuel Fund of Maryland is an umbrella organization comprised of local fuel funds in Baltimore City and Anne Arundel, Baltimore, Carroll, Harford and Howard counties. The Fuel Fund provides supplemental assistance for poor families - a family must pay one-third of their bill on their own. The Fuel Fund provides assistance with another on-third of the bill and the remaining one-third is covered by credits made available by Baltimore Gas & Electric customers. The Fuel Fund of Maryland distributed about $700,000 to local agencies in FY 2001-2002. Maryland Fuel Funds, including Central Maryland Fuel Fund, Columbia Gas Heat Share, Washington Area Fuel Fund, Conectiv Good Neighbor Energy Fund and Southern Maryland Tri County Fuel Fund distributed $2,377,971 to 9,090 households in 2002. Pennsylvania The Pennsylvania Dollar Energy Fund, the fourth largest fuel fund in the country, began operating in October of 1983 to help people without heat and light and assist those who were not able to keep up with their utility bill payments. A network of over 90 social service, religious, and 150 community organizations works closely with eleven major utilities to serve needy families and individuals in most counties throughout the state. Each utility matches every donation dollar for dollar and makes a separate donation towards the fund's administrative expenses. The program has grown rapidly from serving 1,218 clients with $397,199 during its first year, to serving about 15,000 households in 2001 through nearly $3.1 million in benefit payments. Kentucky Currently 31 utilities and 22 community action agencies (CAAs) serving 119 of the state's 120 counties participate in WinterCare, which is managed by the CAC and administered by community action agencies. Advertising services have been donated by a public relations firm and utilities raise the funds and contribute to administrative costs. Participating CAAs contribute to local administration. In 2001, WinterCare provided over $500,000 to supplement LIHEAP crisis payments. North Carolina Through a public-private partnership, Mecklenburg County and United Way provide most of the Ministry's operating funds. Contributions are received from area congregations, the City of Charlotte, utilities, individuals, foundations, businesses and community organizations. In 2001-2002, $2.9 million, 50 percent of total funds, was paid to households for emergency utility assistance. Arizona In 1996, Tucson Electric Power Company set aside $4.5 million in shareholder funds for the Low-Income Fund for Emergencies (LIFE) Fund. The interest generated from the fund has been used to offset cuts in LIHEAP. The monthly interest was about $20,000 per month until 2000, since then, interest rates have decreased significantly and currently, monthly interest is averaging about $4,700 per month. In 2002, 434 households received $82,082 in energy assistance benefits. The Fund is administered by the Salvation Army. Alabama Montana In 1997, Energy Share established an endowment, made possible by state legislation that provides a 50 percent tax credit for planned gifts and corporate donations to a qualifying endowment. The endowment was expected to replace dwindling state funds. Missouri MAAC has received recognition for its extensive database of social service programs. Called MAACLink, it includes food pantries, fuel funds, homeless shelters and social service agencies. It keeps on-line records of agencies providing emergency services and of people who are served, in order to distribute resources most effectively, to identify those who may need more referrals or intensive case management, and to maintain accurate statistics of need so that policy makers can make informed decisions. MAAC has regularly received funds through a little known resource, the Neighborhood Assistance Program (NAP). In effect in thirteen states, NAP allows state governments to provide tax credits to contributing businesses. Businesses receive a tax credit equal to one half of their contributions to eligible programs. MAAC has received credits of about $50,000 annually on behalf of Project Link and its Information and Referral hot-line, which handles over 14,000 emergency calls per year and directs people to the nearest source of food, energy assistance, shelter and other basic needs. New Jersey New Jersey SHARES grants are targeted to non-welfare residential energy customers who have short-term financial difficulties, have exhausted all other available resources and cannot pay their energy bills. Recipients are certified for eligibility by local community agencies. Michael Swayze, chair of the New Jersey Low Income Energy Network (LIEN), who spearheaded the effort to create New Jersey SHARES, said the impetus for a statewide fund came from workshops he attended at the National Low-Income Energy Consortium and National Fuel Funds Network annual conferences in Indianapolis in 1994. A LIEN report detailing the need for a statewide fund stated that only about 4,000 New Jersey households were assisted by fuel funds and the amount raised was about $400,000, much less than neighboring states. LIEN also cited data from the New Jersey Board of Public Utilities showing that 151,000 New Jersey households lost their energy utility service in 1997 because of past-due bills. LIEN's "Fuel Fund Task Force Final Report," outlined the need for New Jersey SHARES. New Jersey SHARES was funded principally by a $1 million start-up grant from Public Service Gas & Electric Company. As a result of two new state laws, financial assistance increased from $684,693 in 2001 to $8,931,049 in 2002. One law earmarked 75 percent of New Jersey's Unclaimed Utility Deposits Trust Fund to New Jersey Shares, retroactive to 1998. Another 2001 state law allocated up to $15 million in 'windfall' state natural gas sales tax revenue generated by that winter's unusually high wholesale natural gas prices. The number of households receiving grants increased from 3,496 in 2001 to 32, 071 in 2002; the maximum grant was raised from $500 to $1,000. Utility customer contributions and the 75 percent of unclaimed utility deposits are the main sources of continued funding. Administrative costs are covered by the seven major investor-owned utility companies. Oregon Initially the fund was involved in energy education and case management, with a goal of encouraging energy self-sufficiency. For example, a 1993 program used VISTA volunteers to conduct client education classes to low-income households around the state. Lately the program has narrowed its focus to providing crisis assistance and creating a role for itself in guaranteeing that such assistance remains available under restructuring. (See Fuel Funds and Societal Issues). It also operates a "recovered oil program" though which excess oil from households that have converted from oil to another heat source goes to low-income households. Colorado Since 1991, EOC has granted between $1 million and $6 million annually to the state LIHEAP. Principle funding sources include a statewide settlement agreement resulting from the decommissioning of the Fort St. Vrain nuclear power plant. EOC received $1 million initially from the settlement, and it received $1.5 million annually until 2003. Another major funding source is legislation allowing unclaimed deposits and a portion of overcharge refunds to go to EOC. Other income sources are customer contributions, and in-kind donations. For example, in 1992, EOC conducted an outreach campaign asking utility customers to donate to EOC all or part of an overcharge refund they were to receive. This resulted in about $1.7 million in donations. Typically, EOC raises $3.5 million per year, although funding has been higher some years due to one-time settlements and refunds. In 2001-2002, EOC contributed 48 percent of its funding, $2.5 million, to the state LIHEAP. Realizing the need for energy assistance during the summer months, EOC created the Utility Grants Program in 1994. In 2001-2002, $1,434,000 was distributed to more than 6,300 households through the Utility Grants Program. During the same program year, EOC awarded $244,624 to nine organizations for energy efficiency measures, appliance upgrades and furnace repair and replacements. EOC is an example of a fuel fund that has been involved in utility restructuring activity. (See Fuel Funds and Societal Issues). Wisconsin Within less than a year, CKWW succeeded in raising over $200,000 in matching funds from private sector contributions. ESI's original goal had been to match the money within two years. A combination of media outreach and grassroots support contributed to the ahead-of-schedule match. Promotions to increase public awareness of the fund and low-income energy needs in Wisconsin included a utility-sponsored spending spree, a partnership with a fast food chain, billboards, TV coverage, and feature news stories. In 1998, responding to the fund's support and recognizing the need for a fuel fund and LIHEAP partnership, the Governor and the state legislature provided CKWW additional $700,000 through oil overcharge funds. Now known as the Keep Wisconsin Warm Fund (KWWF), it operates as a statewide program and is a unique public/private partnership. All funds raised are currently matched dollar-for-dollar by the state of Wisconsin. With ESI as the primary administering agency, funds are provided to preferentially-selected LIHEAP administering agencies and other non-profits for distribution to low-income households. During 2002-2003, KWWF raised $500,000 and received a state matching grant. A total of $1 million was distributed to 4,000 households statewide. Besides providing immediate relief from energy crises, KWWF is also committed to providing long-term solutions that can lead to self-sufficiency, such as weatherization, furnace replacement and budget counseling. Minnesota The Council's mission is to advise the commissioner on Fund policy and coordination with the Energy Assistance Program (EAP), the state LIHEAP, for the benefit of low-income households. In past years, Minnesota has allocated $200,000 of its LIHEAP grant to agencies for ROFW. This allowed agencies to serve households who were in crisis but were over the 50 percent median income eligibility for EAP. In addition to the $200,000, agencies raised $94,435 in PY 2003 from private sources that was matched by EAP funds. The total amount spent in PY2003 from the ROFW fund was $329,983, serving 1,248 households with an average grant of $264. In addition, ROFW can repair heating systems that are faulty or not working. For PY 2004, $200,000 has been budgeted for ROFW, but it will be distributed only to agencies that raise funds. To encourage agencies to seek local funds and to encourage contributors, funds will be distributed as a two-to-one match. Connecticut In 1977, Operation Fuel was created as a crisis intervention program with a mission to raise funds to help those who didn't qualify for government programs. Connecticut's legislature passed a law requiring all of the state's utilities with at least 75,000 customers to help collect donations for Operation Fuel. Now a statewide network of 61 "fuel banks," Operation Fuel provided $842,043 in grants to 4,716 households in 2002-2003. In addition to crisis funding, the fuel banks facilitate oil deliveries, stop utility service shut-offs, arrange for utility service reconnection and negotiate with energy assistance vendors on behalf of clients. Other services include budget and consumer credit counseling, help with job searches and referrals to food pantries, day care centers, legal aid counseling, housing and treatment services. Arizona In response to California's energy crisis during the winter of 2001, NFFN surveyed charitable energy assistance programs throughout the state to determine the nature and scope of such programs and how they coped with the increased demand for assistance. The survey report, The California Energy Safety Net: A Profile of Charitably Funded Energy Assistance, provides regional profiles of charitably funded and utility supported assistance programs. Survey results showed that energy assistance programs provided an important energy safety net during 2001 for Californians. Fuel funds raised $7.5 million, $1.7 million more than the previous year, and served 45,229 households with 1,200 more grants. Financial support by utilities and the public increased by $1.3 million and $300,000 respectively. Fuel funds used a combination of fund-raising methods including utility bill check-offs, bill inserts, letters, and newspaper, television and radio ads. Although in 2002, as households struggled with high arrearages, utility contributions fell by $1.2 million and customer donations by $600,000. In 1998 an informal survey was conducted of NFFN conference attendees asking them to gauge the impact of utility restructuring on fuel fund donations and solicitations. Nearly half of the respondents thought utilities would drop their support of community-based or internal company-based funds, and less than 40 percent thought utility support would stay the same. About 53 percent thought deregulation would not affect utilities' solicitation of their customers to support fuel funds. Respondents were divided over whether establishment of a universal service fund for low-income households' energy needs would impact fuel funds. Yet some fuel fund administrators have tried to assure that fuel funds are considered in restructuring legislation or in its implementation. Some examples follow: Colorado EOC represented the low income on a 30-member panel that conducted an in-depth study of electric restructuring to determine its potential effects on Colorado families, businesses and environment. The panel finished its evaluation in 1999; the majority concluded that "restructuring is not in the best interest of all Colorado electricity consumers and not in the best interest of the State as a whole." Montana In February 1999, the Montana Public Service Commission ruled that 21 percent of the total electric USBC would be allocated among low-income weatherization, bill payment assistance, small low-income renewables projects, outreach, and Energy Share. The majority of the electric USBC comes from NorthWestern Energy, the state's largest utility. Energy Share received $250,000 from NorthWestern Energy in 2002 and $130,927 from energy cooperatives. Oregon Despite implementation of the meters charge, HEAT had some of its best fundraising years. Individual donations have increased and are probably the result of several things, Formick said. The meter charge brought much media attention to the need for bill payment assistance. About that same time, in October 1999, HEAT sent an annual report to donors for the first time that included expenses, number of households served, and feature stories. The response rate from donors was very good. Also, a major utility, Pacific Power was bought by Scottish Power and for the first time, instead of a flat corporate donation, customers donations were matched dollar-for-dollar. In response, Pacific Power customer donations almost doubled. Oregon Heat also had ground-floor involvement in two restructuring pilots, wherein the fund was marketed to new companies serving the pilot population, as an example of what might occur under restructuring. In a 1998-1999 pilot, residential and small business customers of a major electric utility in one county chose from a variety of power options, including "community support," which provided extra funding through a 5 percent surcharge that assisted low-income county residents with their electric bills. When surveyed as to what community support meant to them, many participants chose Oregon Heat as the recipient of community support funds, Formick said. As a result, Oregon Heat received a monthly payment from this source. Participation in the pilot was about 3 percent and, even though more customers chose the green energy option, HEAT received about $12,000 and gained valuable experience as to what endeavors it could apply in restructuring legislation. Formick gives a lot of credit to HEAT's dedicated donors. They contribute about $1 million each year, of which 75 percent originates with Pacific Power and Portland General Electric bill inserts. While there has been no survey regarding the impacts of the declining economy on fuel funds, there is evidence that fuel funds are filling an increasingly important safety net function. For example, in its 2002 report, the Mid-America Assistance Coalition of Kansas City, Missouri, noted that most requests it received were for gas (24 percent) and electric (35 percent) bill assistance; food distribution was the service provided most often. Requests by the elderly for emergency food assistance increased about 19 percent in 2002. Out of $14.2 million in services, $5.7 million worth of food and vouchers were distributed, followed by $2.3 million in utility assistance. In May 2003, Carol Hughes, executive director of the Crisis Assistance Ministry in the Charlotte, NC area, said the program is experiencing a 15 percent increase in client visits this year. "It's hard to tell someone who is facing eviction next week that they have to come back another day because there are already over 110 people waiting today who have to be seen immediately," she noted. The Dollar Energy Fund in Pennsylvania experienced a "65 percent increase in need for assistance across the board, and a 263 percent increase in requests from the senior population" in the 2002-2003 heating season. The average grant increased by $100 per grant meaning that the fund was able to help fewer families with the same amount of money.
- The Keep Wisconsin Warm Fund held its Second Annual Charity Golf Classic in 2003. Participating foursomes from companies around the state raised over $56,000 that the state matched. KWWF is partnering with Culver's Restaurants across Wisconsin for the First Annual "Day of Warmth". On October 13th, 5 percent of sales from locations statewide will go directly to KWWF. The promotion is expected to raise over $25,000. - In 2003, the HEAT and Warmth Fund (THAW) in Michigan, as the result of a special arrangement between DTE Energy and the Detroit Red Wings hockey team, received $100 for each power play goal scored during the regular season. - In 2004, THAW raised more than $209,000 through a 30-hour radiothon conducted by WWJ Radio in Detroit. Donations generated by the radiothon where matched dollar for dollar by THAW's utility partners, DTE Energy, Consumers Energy, Aquila, Inc., and SEMCO Energy, bringing the total for the event to nearly $420,000. The Winter Survival Radiothon featured live broadcasts by WWJ anchors and reporters, live entertainment from jazz and oldies groups, and hourly on-air auctions. - The Calcasieu Parish Council on Aging in Louisiana organized a Phone-a-Thon that mobilized 400 volunteer hours of calling and resulted in a 40 percent increase in the number of donors for energy assistance in the Parish. - Fuel funds in eight Midwest states have received funds from Hardee's restaurants, which sold sausage and biscuits for $1 on selected days and gave the proceeds to the funds. - A majority of funds surveyed used bill inserts with a check-off as part of fundraising efforts with utilities covering printing and mailing costs. - Over half of the fuel funds received matching contributions from utilities and many of them used payroll deductions. The Fuel Fund of Central Maryland may be designated as a recipient of payroll deductions by state employees. - A county government, rather than a utility, supports a fund in Johnson County, Kansas. County government funds amount to about $40,000 annually with matching funds from 15 cities. - While most funds solicit from residential customers, Michigan's THAW and Wisconsin's KWWF have solicited foundations and large industrial and commercial entities. THAW raises about $250,000 from foundations and other entities. - The Michigan Community Action Association sponsors a "Walk for Warmth" where local communities raise pledges from citizens, business, and churches to be distributed in the communities where the money was raised. - The Colorado Energy Assistance Foundation has a partnership with a real estate company wherein the company donates 10 percent of its gross commissions from each home sale to EOC. A partnership with an airline results in a percentage of the dollar amount of tickets sold going to EOC. - Dollar-Help, Inc., in St. Louis, Missouri, gets help from area churches through Super-Dollar-Help Weekend, an annual event held on Super Bowl weekend since 1984. Leaders of congregations are encouraged to get involved through special offers or collections, by holding a mini-event and sending donations to Dollar-Help, and by publicizing the event in church bulletins. Additionally, attention is brought to the energy needs of the low income through media outreach, interviews and talk show appearances. Additional Resources: “Memo on Statewide Fuel Funds,” Roger Colton, Fisher, Sheehan and Colton , April 2005. This memo considers issues related to combining operations of multiple small local fuel funds into a single stateside fuel fund through surveys of fuel funds in NJ, PA, MI, CO, and OR. Provides important details on fuel funds’ operations. For a copy of the EOC report, and for other materials on fuel funds fundraising, contact the Clearinghouse. Page Last Updated: August 20, 2008 |
