ASSURANCE 16 SERVICES IN FY 1995

This report by the Economic Opportunity Research Institute (EORI), under a contract with HHS, is the result of an analysis of FY 1995 and FY 1996 State LIHEAP plans to catalog benefits and services paid for by Assurance 16 funds. The report lists states that used LIHEAP funds for Assurance 16 activities and describes the four major approaches used in implementing Assurance 16. Four states were studied in depth: Texas, Maryland, New Hampshire, and Washington.

ASSURANCE 16 SERVICES IN FY 1995 & FY 1996:
OPPORTUNITIES FOR MEASURING THE RESULTS OF
LIHEAP SERVICES

Prepared under a contract from the Office of Community Services of the U.S. Department of Health and Human Services, Energy Assistance Division. The contents of this report do not necessarily represent the views of the Department of Health and Human Services, and you should not assume any endorsement thereof.

Note: Exhibits were illegible in the web document, copies can be obtained from the LIHEAP Clearinghouse.

The authors are grateful for the time spent by more than two dozen state and local LIHEAP managers in describing and analyzing their initiatives. In addition, Kay Joslin of the LIHEAP Clearinghouse, Kathy Kreiter of the Washington State Energy Office, Richard Johnson, Director of the New Hampshire LIHEAP program, and Louise Bergeron, Energy Programs Director of Southern New Hampshire Services all generously shared their documentation as well as their time. Linda Hill of the U.S. Department of Health and Human Services, Project Officer for this study, provided patient and invaluable guidance.

In 1994, a new provision, "Assurance 16," was added to Public Law 103-252, the Low Income Home Energy Assistance (LIHEAP) Block Grant statute. It provides that LIHEAP grantees have the option of spending no more than five percent of their LIHEAP funds on "services that encourage and enable households to reduce their home energy needs and thereby the need for energy assistance, including needs assessment counseling, and assistance with energy vendors." It also requires grantees to "report to the Secretary concerning the impact of such activities on the number of households served, the level of direct benefits provided to those households, and the number of households that remain unserved." For a number of states, this statute reduced the funding they had historically allocated to such services.

In FY 1996, the Economic Opportunity Research Institute (EORI) was contracted to prepare a report on experiences of grantees and subgrantees implementing programs authorized by Assurance 16 and using outcome measurements. However, the regulation proposed by the U.S. Department of Health and Human Services containing a reporting format and program guidance had not yet been promulgated. As a result, states had no uniform method nor form for their plans nor for results measurement of activities authorized, and limited, by Assurance 16. As the descriptions below suggest, states were fairly strict in limiting services provided to LIHEAP clients, in spite of the considerable latitude granted in draft HHS guidance.

Careful examination of information used in the four model Assurance 16 programs disclosed data collection procedures which recorded numerous data necessary for measuring performance and results. These programs started at the same time states began implementing one or more of the model LIHEAP goals and performance measures, attached as Appendix A. Some measurements may be valuable for both the entire program and Assurance 16 services. These services are generally aimed at the three national goals and sub-goals of energy affordability, reduction in the use of crisis services, and increased participant self-reliance.

The EORI project staff analyzed FY 1995 and FY 1996 plans with the assistance of the LIHEAP Clearinghouse. Activities permitted and limited by Assurance 16 (hereafter: "Assurance 16 programs or services" ) were cataloged. Table A on the previous page summarizes the Assurance 16 activities in thirteen states whose plans did provide these details in either FY 1995 or FY 1996. These activities can be regrouped into four major types of services:

1. "Payment Self-Reliance Support"- is a term used here to include the advocacy or mediation with vendors and clients needed to establish and follow-up the implementation of a schedule and level of continuing client payments. The goal is that the clients assume responsibility for all energy bills. Numerous forms of counseling and several interventions are part of most such programs. Interviews with more than two dozen state and local program managers indicated that most use some monies permitted by Assurance 16 to fund the activities we have named Payment Self Reliance Support.

4. Case management or "family development management," a term meaning extended interventions to reduce and, if possible, eliminate dependency on energy assistance.

No state has set formalized goals and outcome measures for these activities. In particular, Payment Self-Reliance Support services are typically integrated with the other tasks performed by local LIHEAP staff. Informal interviews were conducted with LIHEAP program officials in more than ten states not represented in Table A. Most were allowing the use of some funding to supplement local administrative budgets for the purpose of interventions related to payment plans to promote self-reliance.

E.O.R.I. selected at least one model of each type of program for study. This report describes the operation of Assurance 16 services in Maryland, Washington, New Hampshire and Texas. It focuses on results measurement issues and opportunities in each program that may be of use to all states considering methods for choosing results or performance measures. While none of these states had a fully operational measurement system for their limited Assurance 16 activities, all had data collection, tracking systems and relationships with energy vendors that would provide most of the elements of a measurement system. The programs, a brief description of their nature, and a list of materials and methodologies shown in the full report are shown here to allow readers to locate models of interest. No program has yet developed a system for regular vendor reports on client, and former client, usage and payment histories. Such data could be essential to measures tracking the achievement of energy affordability and efficiency goals

This report provides examples of reports used in the model programs. Together, these show a wide range of data items collected and techniques for recording them. They are included to offer suggestions to managers designing their own Assurance 16 and/or performance measurement initiatives.

Payment Self-Reliance Support. Maryland's Energy Assistance Program Family Energy Services (FES) generates a self-sufficiency component to provide assistance with energy suppliers, refunds, and counseling. Local providers use a state reporting form to compile counts of households utilizing such services and the benefits delivered. These reports are not currently correlated with results, but they would provide any input data needed to test results. Further, Maryland LIHEAP's well-developed public-private partnership with the state's largest utility includes a client incentive program to encourage regular payments; the utility collects substantial data on the enrollee's payment history that, if made available to the program, would provide the necessary information to measure this important outcome. Since FES services in many cases are provided to the clients enrolling in the utility incentive program, it would also help measure the results of FES services.

Energy education. Washington has prepared a sophisticated training manual on the methodology of energy education for the use of the energy educator. Included in the curriculum is a model Client Action Plan that affirms the client's commitment to participate and establishes the client's specific goals for more efficient energy management. A follow-up procedure for the agency, based in part on the Action Plan, is also part of the curriculum design. In addition, the report includes model client agreements with a utility. Community Action Agency partnership. All these goal-setting materials contain at least some information which can be collected before and after intervention to permit measurement of results. However, the education program, including client agreements, has not been implemented.

Leveraging. Assurance 16 services included staff time for two very different leveraging activities in New Hampshire. Two forms of benefits were leveraged: lower fuel prices and a new utility Weatherization program. These were readily quantified by the state using straightforward calculations and produced dramatic benefit/cost ratios. These ratios would be still higher if the avoided costs for the families who would otherwise have been unable to pay for winter fuel were measured.

Case management. The Assurance 16 case management programs are part of local LIHEAP programs in Texas and of one pilot program in New Hampshire. These services are the most complex and costly to measure as they involve coordinating many activities over several months to meet multiple goals related to client self-sufficiency. The report describes these programs in some detail including the data collection and reporting required by each. Both programs collect some results data and EORI's analyst had access to additional material for Texas. Data and opinions provided by the clients and the case managers are important information collected by both model programs.

Texas is experimenting with outcomes and performance measurement for all LIHEAP activities but not for the results of Assurance 16 services alone. For the purposes of this study, a consultant reviewed state monitoring files, utility records and agreements with the clients of the co-pay (case management) component of the program and found data that, though preliminary and lacking controls, strongly suggests which program designs are the most effective. This may be the first such analysis of the performance of any LIHEAP-based case management initiative.

Results of Southern New Hampshire Services' case management are being collected under broadly-defined categories of outcome in a system designed by the local agency. Reports from the case manager and supervisors classify client outcomes. Client assessments are used to determine factors contributing to the outcomes.

The state and local managers of these programs are convinced that the Assurance 16 activities were essential to the targeting and durability of LIHEAP benefits. All felt the five percent limitation on such spending adversely impacted the program because of the large number of yet-unserved clients requiring such services to reduce their dependency on assistance.

A majority of state and local LIHEAP providers interviewed for this report, and nearly all those interviewed in depth for our case studies, believe the limitation on Assurance 16 funds reduced their effectiveness in keeping clients and vendors working together on client payment arrangements. For those three states that are keeping more elaborate reports on Assurance 16 services, the new administrative burden of documenting expenditures for such services means either that reporting must be compromised or that these services must be made more like other LIHEAP program elements. The latter strategy might well eviscerate the elements of the services that are designed to provide unique help to a selected population of high-risk clients.

Some of these problems would be remedied by promulgation of HHS guidance on permissible uses of funds for crisis services and on reporting. The Department's flexibility was reiterated in a letter from its Director of the Energy Assistance Division to a subgrantee inquiring about activities previously allowed as LIHEAP crisis program benefits. It is attached as Appendix B.

Program managers have developed simple but valuable evaluation tools for all the Assurance 16 programs studied. The application of these tools has persuaded them that their initiatives are cost-effective within the time frame for which data is available. However, it appears that their ability to extend and elaborate on these information systems will be compromised by funding ceilings and by the problem related to obtaining compatible vendor billing data. Only Assurance 16 programs with services that could be evaluated by the same tools used to measure LIHEAP performance in the state's core program may escape these limitations. The national model goals and performance measures which measure service delivery or "input" data are as likely to be useful for Assurance 16 services as for other activities. It is the outcomes of those services which promise results in terms of reduced client need that interest managers seeking to allocate scarce resources wisely. While elusive, some estimate of potentially replicable results are offered by the initiatives reviewed here.

In 1994, Public Law 103-252 added a new section, 2605 (b) (16), to the Low-Income Home Energy Assistance (LIHEAP) statute. The new provision, "Assurance 16", provides that grantees have the option of spending no more than five percent of their LIHEAP grant on "services that encourage and enable households to reduce their home energy needs and thereby the need for energy assistance, including needs assessment, counseling, and assistance with energy vendors." It also requires grantees to "report to the Secretary concerning the impact of such activities on the number of households served, the level of direct benefits provided to those households, and the number of households that remain unserved."

At the time these amendments were enacted, many grantees were already providing the kinds of services referenced by this new provision. As a draft US Department of Health and Human Services (HHS) Notice of Proposed Rule making (10/25/95) noted, "The practical effect of the assurance was to limit the amount of LIHEAP funds that may be used for these purposes and to impose new reporting requirements." (Emphasis ours)

The draft notice of the rule-making also included in its preamble the following: ". . . Implicit in the statute's reporting requirement is the expectation that we (HHS) will be able to compile information from all of the grantees who provide Assurance 16 services, and that we will be able to respond to requests from Congress for information about the impact of those services. Therefore, we believe that it is necessary for us to receive reports with comparable information, and are proposing to require that grantees follow a report format prescribed by the Department." However, by the date of this report, no federal proposed rule, and therefore no reporting format, had been promulgated. As a result, states had no uniform method nor form for reporting on Assurance 16 service plans nor for measuring their impact.

The same legislation included an amendment establishing a pilot program, Residential Energy Assistance Challenge (R.E.A.C.H.), to distribute grants on a competitive basis to states experimenting with comprehensive energy services. The first grants were awarded in FY 1996 for implementation in FY 1997.

In FY 1996, the Economic Opportunity Research Institute (EORI) was contracted to prepare a report on experiences of grantees and subgrantees in implementing programs authorized by Assurance 16, including experience in the use of outcome measurements. The report was to include the views of the program officials concerning

1) the most promising approaches to achieving the goals of energy self-sufficiency for low income households;

2) any obstacles to achieving the goals of energy self-sufficiency for low income households;

3) any differences perceived by them between Assurance 16 and REACH goals and measures;

4) opportunities for incorporating performance measures in LIHEAP and REACH programs, together with the costs and benefits of doing so.

The EORI project staff, with the assistance of the LIHEAP Clearinghouse, analyzed FY 1995 and FY 1996 state LIHEAP plans to catalog benefits and services paid for with funds limited by Assurance 16 (hereafter: "Assurance 16 programs" or "Assurance 16 services"). These plans provided ample information from which to establish a typology of activities and to select programs of each major type for in-depth study.

While a great deal of information was generously made available to the project by state and local LIHEAP program managers, the original goal of studying results and outcome measurement methodology proved to be unattainable. Further, the timing of the REACH program initiation made it impossible to include references to specific pilot programs funded by these grants. However, many states began implementation of one or more of the model performance goals and performance measures developed by the Department for use in the core programs. Several of these measures could be used to evaluate results of some of the Assurance 16 services, and they are noted in the analyses which follow. Appendix A shows the model performance goals and measure developed and distributed by the Department in 1995 after extensive consultation with a state-local task force of LIHEAP providers and distributed by the Department.

More than a quarter of the states included in their annual program plans specific descriptions of their uses of funds for services or benefits other than payments often for Assurance 16 services. Other states' plans repeated either the statutory language regarding the uses of funds and provided no further description or made no reference to Assurance 16.

Table 1 summarizes the FY 1995 and FY 1996 plans in which 13 states did provide HHS with details of the uses of these funds. Most of these states allowed use of the full five percent authorized. They described their activities as one of the following general types:

We can aggregate these activities into one of four categories of program which, though each combines several activities, can be characterized by their general purpose as follows:

1."Payment Self-Reliance Support," a term used here to cover advocacy or mediation with both vendors and clients for the purpose of establishing a payment system which leads to long-term self-reliance for energy costs, and providing follow up support to ensure the system is implemented;

4. "Case Management" or "Family Development Support", terms both of which mean a program of multiple interventions over an extended period of time to provide, or coordinate a variety of resources with which the family can eliminate, or reduce, its dependency on Energy Assistance.

The pages that follow contain detailed descriptions of one example of each program category and of any outcome measurement, or data collection which could support outcome measurement. Maryland's Family Energy Services is an example of a Payment Self-Reliance Support program. New Hampshire's Summer Fill program was a leveraging activity, as was its representation in regulatory proceedings. Washington developed an energy education process; Texas and New Hampshire initiatives provide two different models of Family Development Support programs.

Programs in support of Payment Self-Reliance are the most common. Table 1 shows 11 such programs. Most states with plans for Assurance 16 services invest in additional professional staff time, and most direct the added staff time to implementation of co-payment plans for clients with a history of difficulty in paying for energy, as well as for varying levels of client counseling. Time is required both to define individual client payment plans and to establish a client payment schedule acceptable to both client and the vendor. Administrative budgets alone do not cover an adequate amount of staffing to help the many clients in need.

Interviews with local agencies in Massachusetts, California, Indiana, and Kentucky indicate nearly identical Payment Self-Reliance program designs. The general model works as follows: agencies select a client with high energy burden and/or facing loss of utility service or bulk fuel deliveries and/or having significant unpaid balances to the vendor. That client receives additional interventions by program staff. These services are in addition to the LIHEAP payment to the vendor and to any U.S. Department of Energy Weatherization Assistance Services (DOE/WAP). One or more of the following services are selected by the program as necessary to increasing the energy self-sufficiency of the client :

An analysis of home energy bills, including a review of household energy equipment and usage patterns, and general information on techniques for reducing such bills;

A review of all household expenses in comparison to the income data that has been given to the LIHEAP program to establish eligibility. The result is used for counseling on budgeting and income management. The experience of the counselor in reviewing many such budgets in the same community allows identification of atypical spending habits, as well as atypical energy usage or costs.

Design of an affordable monthly energy payment plan, including the reduction of arrearages if any; and the negotiation of the plan with the vendor on behalf of, but also in partnership with, the client. This role is considered by most of the local and state program staff interviewed to be critical. From the vendor's point of view, the intervention of the agency provides certainty that the client is genuinely unable to pay, that a subsidy will be added by LIHEAP, and that an organization chosen by the client, but yet having influence over the client, can be available to help ensure the payments are made according to the original arrangements. From the client's point of view, the assistance of the agency ensures a payment plan similar to those that have worked for other clients, as well as help with negotiations in a circumstance in which the client alone would feel great pressure to make any agreement requested, whether realistic or not.

Although the states shown in Table 1 are allowing Assurance 16 resources to be used for the work of the staff members that negotiate workable payment plans and make the decision about LIHEAP payments to vendors, no state has yet set formalized goals and outcome measures for these activities; they are integrated with the other tasks performed by local LIHEAP staff. No uniform reporting system has been approved for national use, so interstate comparability is not possible for this most common type of initiative.

Maryland's Energy Assistance Program (MEAP) offers a model of formalized reporting on resources devoted to Payment Self Reliance services. The component of MEAP funded by Assurance 16 is called Family Energy Services (FES) to Promote Self-Sufficiency; it provides agency staff support for three categories of services:

The state has developed a format for detailed reporting of the Assurance 16 services delivered, which is shown in Exhibit 1. Local agencies compile the counts of households utilizing such services and the number of benefits of each of nineteen possible types that are delivered. Maryland state and local MEAP administrators point out that these benefits were historically provided as an integral part of MEAP and not reported separately. They are now categorized and recorded on the form in order to ensure that Assurance 16 funds are being used for allowable purposes. Local agency managers suggest the principal difference in program implementation now, as compared to pre-1994, is a loss of staff resources for counseling that are now consumed by the recording process.

Baltimore's FES program manager explained in a January 1996 workshop, "The purpose of documenting activities rendered through FES is to demonstrate that clients received a benefit in terms of reducing their energy needs through the provision of these activities. Family Energy Services have been identified as appropriate activities that, on their own, serve as benefits. When FES are to be counted as benefits, however, they need to be reported separately from MEAP monetary benefits and regularly provided as counts of the number of units of service to the MEAP staff."

In fact, the draft regulations prepared by the Energy Assistance Division of HHS in 1995, would have defined these and other services or uses as appropriate uses of Assurance 16 and would have defined strictly administrative functions more broadly. The reporting required under that proposed rule would have been less detailed, and presumably less costly, than the FES system. A letter written by Janet Fox, the Director of the Energy Assistance Division of the U.S. Department of Health and Human Services in response to a subgrantee inquiry expresses several areas of flexibility in these definitions, especially with regard to Crisis Assistance services. It is attached as Appendix B. Because these rules were not promulgated, several prudent state administrators held their programs to the strictest definitions of permissible activities and required painstaking documentation to eliminate future uncertainty.

Opportunities for Outcome Measurement. Exhibit 1 is the intake form used to record Assurance 16 services provided to each client household. An activity can be provided more than once to the same client, but the program year is only a few months long, and no system for long-term monitoring or recordation of results is attached to the data reported Because this data is maintained along with a unique identifier for each household, retrospective review of these files to provide comparison to the energy needs of the same family, if they apply in future years, could provide helpful data on the impact of services.

These indicators include model performance measures promulgated for the program including the number of client households weatherized, the number of shutoffs prevented, and the number receiving energy education. As the comments of the Baltimore CAA manager above implied, the outcomes of the services are assumed to be positive, so emphasis is placed on measuring the number of clients and the number of interventions.

A related and, indeed, coordinated program that is the product of MEAP's partnership with the state's largest utility, Baltimore Gas and Electric (BG&E), does collect client outcome measurement data. The establishment of bill payment arrangements with client, MEAP, and sometimes utility, contributions is a core element of MEAP's payment system; the BG&E Customer Assistance Program (CAP) strengthens this component by providing a credit as an added benefit to MEAP clients who adhere to their payment schedule over an extended period. These agreements are, in many cases, reached with the help of an FES worker, as there is substantial overlap between the FES recipient population and the CAP recipient group.

The utility does measure the success of this initiative by analyzing the amount and number of credits, or incentives, paid and the number of payees. While these reports have not been released, even to the government agencies, the MEAP managers have been informed that approximately 66 percent of enrolled households have received their credits and that this represents improved payment regularity for most of these households. Clearly, such billing history data will be essential to evaluating the effect of Assurance 16 services which have the goal of improving Payments Self-Reliance.

Several states shown in Table 1 listed energy education as an Assurance 16 benefit. A few, including Oregon, Utah, and Washington, have established elaborate and formal standards based on HHS policy guidelines for the content, duration, and teaching methods for these services.

Washington's State Energy Office energy education curriculum is the most extensive set of state materials for the use of the energy educators and has instruction available for subgrantees or other trainers. Its user-friendly, graphical manual, Tomorrow's Energy Begins at Home: A Step by Step Guide for Delivering Consumer Energy Efficiency Education (Washington State Energy Office, Olympia, 1995) is a methodology, or handbook, for energy educators. It includes examples of written commitments on the part of the clients as well as the delivery organizations. While energy educators are not required to use all parts of the curriculum or method, nor to use it exclusively, those who do are guaranteed that their program meets the state's standard.

Interviews were conducted with four larger local LIHEAP agencies during the fall of 1996. Some of the local agency DOE Weatherization crews, some LIHEAP energy services private contractors, the DOE Weatherization Assistance Program (WAP) and some utilities' service contractors do use part of the materials from the curriculum with clients they determine may benefit. LIHEAP energy education, however, is confined to one class offering which occurs periodically but not regularly.

In the view of one Washington state official, the need for the Payment Self-Reliance interventions, as described in the preceding section, appear far more urgent to local agency managers, and most of the resources allowed are devoted to the staff support for those services. These services were offered to most LIHEAP recipients before the 1994 amendments and were curtailed in response to imposition of the ceiling. As in other states, the outcomes of those services are not measured.

Opportunities for Outcome Measurement. The little-utilized energy education protocols have several tools which would make measurement of client outcomes relatively straightforward and would provide data for the model national performance measurement of energy consumption reductions and service delivery frequency.

In the curriculum design, a needs assessment that may include a Weatherization audit of the home is a first step. Next is a goal-setting exercise. Included in the curriculum is a model Client Action Plan shown in Exhibit 2. It is a document for the use of the client. It affirms the client's commitment to participate and establishes the client's goals for more efficient home energy management. The specification of these items gives the participants a benchmark for evaluating their own progress. The model client agreements are not in use in any of the programs.

The agency is given a copy, which is used by its staff in follow-up meetings. Those meetings check on achievement of client goals and other issues identified in the Client Action Plan and compare it to the agency needs assessment which preceded the plan. The Follow up Contact Card, shown below as Exhibit 3, gives agency staff a variety of measures and techniques for checking on client achievement of their own goals and on the efficiency of their energy usage. Whether or not the latter was a client priority, it is a model national performance goal. The follow-up interview is designed to give the staff interviewer monthly energy usage data and the original client action goals, with which to judge results. The services and/or conservation measures provided are on the same form, a feature which both helps the agency decide how or whether to provide additional assistance to that client and which would permit more general program evaluation.

Different forms for client agreements were developed for a public/private energy conservation initiative in Whatcom County, WA.and were also featured in the training manual. Exhibit 4 shows these agreements, one between the client and the Community Action Agency, the other between the client and the utility. These are designed as a firmer commitment than the Action Plan in Exhibit 2; for example, the client stipulates, "We agree..." instead of, "We agree to try...".

The project using these forms was designed to be evaluated, but the study design has not been finalized. This client agreement alone would not provide the information needed about the goals of the client, but the projects extensive pre- and post-education "lifestyle survey" to which each client agreed would have been a rich source of outcome data. The availability of utility records to establish real savings is essential to any measurement of consumption-related results.

For FY 1996, New Hampshire invited local pilot program proposals and implemented two entirely different "leveraging" initiatives. Legal representation for the LIHEAP program in state regulatory proceedings was retained to participate on an electric utility merger. An attorney was paid to argue for regulatory establishment of a funding mechanism for low-income payments and conservation programs. The state Regulatory Commission, citing his arguments, agreed to a $5 million program.

Opportunities for outcome measurement. New Hampshire's LIHEAP program measures the near-term benefit-to-cost ratio of the investment in regulatory intervention at 97:1, after discounting for inflation.

The "summer fill" pilot program was the second leveraging initiative. During the summer of 1996, Southwest New Hampshire Services CAA purchased fuel at deep, off-season discount prices using Assurance 16 resources. Outreach, enrollment services, and the provision of information to clients about the benefits of summer oil purchases were funded. This effort required the combination of services allowed by Assurance 16 with energy payments made possible by the release of the FY 1996 LIHEAP Emergency Contingency Fund. While the New Hampshire LIHEAP program has historically encouraged the use of private summer fuel oil purchases to lower costs, and has led in the use of other market mechanisms that reduce fuel costs, the seasonal nature of the LIHEAP program means little local staff capability is available for summer activities.

The statewide LIHEAP program has implemented an incentive program for LIHEAP clients who establish a credit with their supplier and maintain regular payments. Enrollment for this program element involves a longer sign-up process than a conventional payment program, with full explanations of the initiative and the agreement to be signed. This is performed at the time of intake for the regular winter fuel program. The staff also enlisted fuel oil dealers to participate and give discount prices.

An extensive program of this nature was only possible because of the unexpected availability of federal LIHEAP emergency contingency funding made available in April 1996. This was used to pay for fuel for a large part of the client population, while staffing was financed as an Assurance 16 activity. Such staffing is always needed for the winter incentive program sign-up, but because New Hampshire typically commits all its regular LIHEAP funding by early February the personnel are reassigned to other duties for seven months of the year. This initiative was, in part, to test the value of year-round administrative and Assurance 16 funding.

Opportunities for outcome measurement. The summer fill program is readily quantifiable. By the program's end, client households had been provided with home heating oil at an average cost of 69 cents per gallon. While the expected benefit of such a program generally would be the cost of the number of gallons shifted to this price subtracted from the same volume of oil at the average late fall or early winter price, in the winter of 1996-97 prices skyrocketed to near-record highs that remained for more than two months. Those prices were approximately double the summer contract price -- a difference of about 70 cents a gallon.

The savings to the regular program from the summer initiative were applied to the sudden, large influx of households in need for the first time, or in crisis, as well as used for providing adequate fuel for the households enrolled during the summer; agency personnel reported clients' benefits would not have extended past mid-winter had all their fuel been bought at market rates after the regular program opened. The value of avoided costs, which is real but difficult to quantify, should be added to the simple arithmetic of reduced average fuel costs.

Several states integrate services by LIHEAP staff into comprehensive "Family Development" or "case management" programs involving multiple forms of support and client activities. Two states have used their Assurance 16 authority to cover investment in stand-alone local initiatives. While Texas' entire LIHEAP program is based on comprehensive services, comprehensive case management is targeted largely to payment-troubled clients who are not elderly or disabled and who are participating in the "co-payment" component of the program. In New Hampshire, Southern New Hampshire Services (SNHS), a Community Action Agency, experimented with a highly-targeted intensive family service program. Both programs are developing indicators of outcomes and are expecting to develop additional measurement techniques. Texas CEAP is also undertaking a pilot initiative in performance measurement using several of the national goals and measures.

These two LIHEAP Case Management programs are reviewed in depth here. The models include a considerable range of activities and creative combinations of LIHEAP with other program elements. In both cases, program managers indicated to EORI interviewers their conviction that the services are valuable additions to the payment and energy conservation initiatives and that their intention is to continue these programs.

The following description and analysis were prepared with the consulting assistance of E.M. de las Nieves Lopez, Austin, TX. Because of the accessibility of state monitoring records not available for other states' programs, the detailed Texas data presented here represent the most extensive results available for evaluation of LIHEAP case management client outcomes. CEAP was implemented statewide by 50 local organizations in 1994. It had four components which must be understood to put the case management services in context.

The co-payment component enrolls clients for a 6-to-12-month "co-pay" period during which the client receives monthly financial assistance on a sliding scale. The benefits are relatively high because they are intended to be an investment in permanently changing the client's energy debt and costs. Clients are expected to need only one season's help. At the end of the "co-pay period", the client is fully responsible for his/her energy bills, although exceptions are made for clients who have complied with the program and have extremely challenging circumstances. The co-pay client receives counseling, payment subsidies, assistance in developing goals for self-sufficiency and help in the form of continuing case management with referrals, direct assistance, energy conservation education, and budget counseling. Texas officials believe these services are essential to making the co-payment program an effective tool for self-reliance, rather than a short-term benefit with no long-term effect. The Assurance 16 funding pays the staff delivering the supportive services.

A second CEAP component provides relief to low-income elderly and disabled households. They may receive financial assistance for up to four months, those during which their energy consumption is highest. Households may receive as much as $1000 in assistance per program year under either the co-payment or elderly/disabled program component.

A third component, the Energy Crisis Program, assists in resolving a household's weather-related energy crisis by providing either different housing or an efficient, safe heating or cooling appliance. Unlike programs in other states with a similar name, it does not provide payments and is not a response to a disconnection.

The Heating and Cooling Systems component (called the "heating and cooling program", though it, too, is not a payment program) provides for the retrofit or replacement of heating and/or cooling equipment to achieve long-term energy savings and greater safety for the household. It is typically coordinated with Weatherization Assistance.

Case Management and CEAP, FY 1993-FY 1996: During FY 1993, the first year of CEAP, the Department of Housing and Community Affairs allowed local providers not only to tailor the program to the needs and resources within their communities, but also to use a great deal of flexibility in budgeting among the four program components and the case management services. Some agencies budgeted up to 25 percent for case management; statewide, these programs required 11 percent of FY 1993 LIHEAP expenditures. In FY 1995, case management was offered only to the co-payment program participants.

Review of the state's local agency monitoring files reveals that, on average, CEAP clients received far less staff support at intake or for follow-up services, as a result of the Assurance 16 funding limit. These reports also show that most local providers continued to offered some level of case management services to clients in other program components; this support was limited, both in terms of the number of clients and of staff services provided.

Review of the monitoring reports also revealed a bias on the part of providers to placing clients in the "elderly" and "energy crisis" components, which did not provide intensive services. State monitors believe a number of these clients would have been better served in the more service-intensive co-payment program. They also believe that lack of adequate funding for the co-payment clients, both for benefits and for proper assessment of, and management of, client needs explains the bias toward "crisis" placement.

The Client Service Agreement is integral to the case management activities. Most local agencies developed their own written agreement spelling out the personal responsibilities on the part of the client and the financial responsibilities on the part of the CEAP provider. It lays out how, as the enrollment period progresses, the client becomes fully responsible for his/her bill. The Client Service Agreement also spells out the activities that will be carried out during the six to twelve month enrollment period to help the household become energy self-sufficient.

Two local agencies had client service agreements which tracked the previous year's monthly utility consumption side-by-side with the client's current consumption. Exhibit 5 shows one of these forms used in the Neighborhood Development Resources Program, the Community Action Agency in Fort Worth, TX. This agency required regular payments and demonstrable progress towards the listed client goals as a condition of receiving the co-payment. Clients defaulting on this agreement lost LIHEAP benefits and services.

Opportunities for outcome measurement are embedded in several CEAP Assurance 16 program elements, although Texas has not required or designed a uniform set of formal procedures for measurement of progress toward case management program goals. Several local programs' client agreement forms provide benchmarks, such as those marked in Exhibit 5, and usage or payments data which could be aggregated to valid outcome measurements.

Results were measured several ways by EORI's analyst. First, improved payment regularity and client contribution to the bills were examined through a review of 121 client service agreements from four local agencies. This study showed a substantial majority of clients improved their payment behavior during the months in which they were enrolled in the program as opposed to previous years.

These reviews related program design to outcomes as well. There were variations among agencies and even among case managers. Clients were most likely to succeed in maintaining co-payment schedules if the agreement was both tailored to the family budget and also set forth specific expectations for payment levels and reductions in usage. The review also revealed the importance of follow-up activities and advocacy by the case manager. Local programs which actively advocated with energy providers on the clients' behalf were more likely to have clients pay their portion of the bill. Clients were also more likely to succeed if the case manager's records showed the agency had actively encouraged the client by making follow-up contacts, tracking bills with vendors and making phone contact with the client if he/she did not show up for an appointment. Clients were less often successful if the agreement was not updated monthly and progress was not recorded frequently. Obviously, the best outcomes required more staff time and intervention, and therefore higher expenditures per case.

A further review of 90 billing histories of CEAP co-payment clients provided to the analyst by one large electric company also indicates that its customers who were case management program participants do show improvement in payment patterns during the enrollment period. No data was available for subsequent years.

In addition to success in making regular payments, some evidence points to success in reducing energy bills in the two agencies with similar client agreements and active intervention strategies. State monitors compared client bills in FY 1995 and FY 1996 and found substantial numbers of clients showed energy usage decrease; 38 percent of one agency's co-payment clients in 1996 used less energy than in 1995, and the second agency showed a decrease in energy consumption for 53 percent of its clients. (These changes are not adjusted for heating or cooling degree days.) The 1995 bills were for the period prior to delivery of Family Development services.

The design of the co-payment program, which rarely serves clients for more than a calendar year, makes it very difficult for the local agency to collect any post-program results. Utility distributors could establish appropriate information systems and provide such records, but variables important to the analysis, such as family composition, employment status, and even changes in vendor, would not be available from supplier records. Bulk fuel vendors do not always have full-season records on customers. Nevertheless, the cost of such tracking would represent a small proportion of the vendor's gross return from each customer with regular payment habits.

Finally, data currently collected for all CEAP clients could be reported in such a way as to indicate the impact of Assurance 16 services for the co-payment program clients compared to the clients receiving other forms of CEAP assistance. Comparing the number of clients who return for energy and non-crisis services after having received case management assistance, and the extent and kind of assistance needed as opposed to past needs could suggest the degree of change in energy dependency.

Some data was available to measure non-energy benefits resulting from Assurance 16 activities and contributing to self-sufficiency achieved by clients. The most common non-energy issues addressed in the client agreement were the inability to pay for medical debt, health problems, general budgeting, employment, lack of education, housing, and transportation. CEAP case managers were trained to coordinate other resources in their agencies and communities with LIHEAP for these participants.

Several agencies simply counted the non-energy achievements of participants. For example, one CAA assisted more than a dozen clients in finishing a GED, enrolled seven percent of its clients in training provided by the Texas Rehabilitation Commission (special services for persons with disabilities), and enrolled many other clients in Job Training Partnership Act programs. It also assisted in finding full-time employment for 19 percent of its co-payment clients, the majority of whom were originally AFDC recipients. Comparing the proportion of household resources received from any form of public or charitable assistance as a proportion of the overall level of household resources before and, periodically, after program participation would also indicate the long-term effects of services and of these brief interventions on family dependency.

Some program elements related to case management have greatly appealed to utilities and other private businesses. The responsibility placed on the client through the case management approach and the substantial co-payment program budget help agencies communicate with vendors. As part of the Assurance 16 activities under CEAP, local providers usually enter into negotiations with utility companies on behalf of individual clients and regularly negotiate level-payment plans, reductions of waivers for security deposits, and realistic payment plans to reduce arrears. Some vendors working with the program now forgive past utility debts. Several Texas utility managers expressed relief to EORI interviewers that client problems were being assessed and managed by specialized agencies.

B. Southern New Hampshire Services, Family Case Management was initiated by the CAA as one of the FY 1996 pilot programs in the state. It makes relatively large per-family case management investments and measures client progress. The program was run in FY 1996 by a professional social worker whose sole duty was this Assurance 16 initiative. It had three goals:

-First, to reduce dependency on the Fuel Assistance Program by intervention with the client, primarily counseling.

- Second, to ensure low-income households had a healthful home environment; this prioritizes the identification of those with artificially low home energy bills because of inability to pay. Needs assessments and counseling were funded by Assurance 16.

- Third, to help clients in their relations with energy vendors using an incentive program and mediation or advocacy services.

The project integrated many services available through the CAA using an individual Family Service Plan for each household enrolled in the program. Each client set goals to change and improve their financial situation. Family Service Plans covered occupational, educational, medical, food, housing, energy and transportation needs, with the ultimate goal being full financial self-sufficiency.

SNHS selected clients who were not on a fixed income, who had at least one member of the family working, and yet had resources so limited as to qualify for the Fuel Assistance Program. These were expected to have the greatest probability of ending dependence on assistance. The case manager received all referrals from the CAA Fuel Assistance Program. Client selection was made by using data the state provides local programs showing tables of average heating costs for a variety of household configurations. By comparing these average costs with the actual usage obtained by the local agency from energy vendors, the CAA identified households with extremely high energy usage. At the same time, it sought clients who had not spent a minimum adequate amount on heat. As this would, most likely, be due to a very low setting on their thermostat because of inability to pay, these clients were considered to be at high risk and were prioritized for Fuel Assistance and evaluated for participation in the case management program.

� Intervention with energy vendors to promote client responsibility and prevent energy crisis;

� On-going contact to develop trust, to identify and solve problems that arise, and

Upon enrollment, the case manager undertook a needs assessment and provided general information and a budget counseling session. The evaluation included the employment potential of the household members, including past employment history, level of education and special training.

Improving the relationship between the client and the energy vendor was a major goal of the program, as these clients were likely to have poor payment histories. One element of the statewide regular Fuel Assistance Program is an Incentive Payment Program. It makes additional benefits, from $35 to $75, available to clients, at the end of the heating season, provided they pay their vendor that amount of money at the beginning of the season and keep energy payments current The vendor keeps the advance payment as a hedge against non-payment, and, at the end of the season, reports the escrow amount remaining for each client. The state program then matches that amount up to $75. This program was used as a supplement to Case Management by the SNHS case manager as an additional inducement to client and vendor.

Opportunities for outcome measurement were developed by SNHS. Table 2 shows the system used by SNHS which collects data on both the inputs, or services, provided and the outcomes
at the end of the program period. Client outcomes in 1996 were listed in one of three categories : "achieved self-sufficiency", "reduced dependency", or "denied" (e.g. lost benefits for failure to meet obligations). Program managers were prepared to add a category of "no change", but found it unnecessary to do so. Refinements, including use of scaled scores for "reduced dependency" are under consideration for future years' programs.

SERVICE RECEIVED:	NO.	PERCENT
BUDGET COUNSEL	52	100
UTILITY PAYMENT PLAN	9	17
EDUCATION	16	31
EMPLOYMENT	31	60
MOVE	15	29
PARENTING SKILLS	18	35
WEATHERIZATION	25	48

ACHIEVED SELF-SUFFICIENCY	5	10
REDUCED DEPENDENCY	44	85
DENIED FURTHER SERVICE	3	6

Fifty-two families were active in the program in FY 1996. All went through a private budgeting session. Nine, or 17 percent, set up new budget plans with their energy providers. Sixteen households, or 31 percent, worked on educational advancement, and 31 households, or 60 percent, were helped with employment issues. Fifteen families relocated to improve their energy consumption, and 25 participated in the Weatherization program to achieve the same results. Parenting issues were a problem that called for discussion and referrals for 18 households.

Eight families had complete success, as they did not need the Fuel Assistance Program the following year. Of these eight families, five had determined themselves that they had reached that level, and three applied for the Fuel Assistance Program and were denied for being over-income.

Objective payment and energy usage measurements are available to New Hampshire local agency programs because of the vendor reports on the state incentive program described above. The SNHS program's director reported in December 1996, "Many of our clients are starting the summer with a credit of $150. Vendors support this program, as it promoted client payments and it also gave the clients a head start in facing the next heating season.. Last year, 67 percent of the households in the state participated."

Vendors, many of them small businesses, also support the reporting requirement that accompanies this initiative because they have insurance against payment defaults in the form of interest-bearing escrow accounts, in addition to the promise of a larger state payment. This form of incentive could be emulated by other states seeking vendor cooperation with providing client data for outcome measures.

A different kind of data is collected from clients, using the form shown in Exhibit 6, to determine both the degree to which they judge the program to have been successful and the factors they believe contributed to its value. a sample of 11 of these response forms were reviewed by EORI; they show that a large majority found the budget counseling to be of greatest value; employment search and employment-readiness services were also highly regarded.

These forms do not compare the client's goal at entry to the accomplishments at the time of interview, nor is there a rating scale offered to the client to assess the degree to which goals were achieved. Nevertheless, the written responses offer spontaneous feedback on these questions; they suggest clients would be willing to provide more quantitative reactions regarding the results of services and the value of various forms of benefits, or inputs, by such programs. Like the informed views of the local and state program managers, such participant views are the richest source of qualitative data about program effectiveness. Caution must be used to ensure, if not anonymity, some screen between the service provider, the supervisor of the service provider, and the grateful client, who does not wish to appear critical when they have received services that are, in general, satisfactory from an agency that offers many different programs that may be needed at some future time. None of the client forms reviewed in this report meet that test; the cost of independent evaluation, or even third party interviewing, is unquestionably a major barrier to such a design.

There is not a consensus about the value of adding reporting requirements or measurement protocols to these Assurance 16 - funded initiatives, largely because of cost.

Long-term outcomes for the participants are measured by energy usage reductions or lowered energy burden (called "increased affordability") in the LIHEAP model national performance measurement system.

Increased payment regularity is also one of the national model performance indicators. These client account data are costly to track once participation ends, perhaps especially for the most and the least successful clients, as both may be more likely to relocate. Nevertheless, many documents and procedures currently in use in both Assurance 16 and the core state LIHEAP payment programs collect data that provide a basis for measuring numerous client outcomes of the intervention and support offered. Some incentive programs currently encourage vendors to supply client records. Those model national program performance measurements which collect service delivery data are far less difficult to test, and most Assurance 16 service delivery data in these four model programs is recorded in a compatible format.

Similar reports could be useful in the operation of any REACH initiatives which fall into the same categories of program as those reviewed here. However, if these Assurance 16 services are not funded by other components of the LIHEAP program, it is unlikely that they can be evaluated cost-effectively within current administrative cost ceilings. In addition, any new state requirements to enforce the Assurance 16 limits entail new administrative costs which diminish the resources for client assistance. The state managers interviewed universally support removal of the Assurance 16 limitations, whether or not they believe those services should be expanded in their own state, because of the administrative costs of monitoring. Most state and local managers interviewed also believe these services could be expanded to improve program results.

ADMINISTRATION FOR CHILDREN AND FAMILIES
370 L'Enfant Promenade S.W.
Washington, D.C. 20447

Ms. Val Martinez
President
Association of Rural Northern
California Energy Providers
904 G Street
Eureka, California 95501

This is in response to your telephone call requesting written information on the allowable uses of funds under the Low Income Home Energy Assistance Program (LIHEAP), especially as they relate to Assurance 16 activities.

The 1994 amendments to the LIHEAP statute, Public Law 103-252, added new Section 260S(b)(16) to the LIHEAP statute. The new provision, Assurance 16, gives grantees the option to spend up to 5 percent of their LIHEAP funds on "services that encourage and enable households to reduce their home energy needs and thereby the need for energy assistance, including needs assessments, counseling, and assistance with energy vendors." It should be emphasized that Assurance 16 allows, but does not require, grantees to provide such services.

Many grantees were already providing the kinds of services covered by this new Assurance 16. Therefore, the practical effect of the assurance may be to limit the amount of LIHEAP funds that may be used for these purposes.

In accordance with section 2605(b) of the statute, which states that the Secretary may not prescribe the manner in which grantees will comply with the assurances, we do not propose to regulate the manner in which grantees approach Assurance 16. Nor do we propose to add to the statutory listing of services that must be included under Assurance 16. Consistent with the Department's block grant regulations and policy, we leave the primary interpretation of Assurance 16 to each grantee.

In response to your request for clarification, however, we are providing our preliminary view of the services that are covered under Assurance 16 under the most narrow of interpretations. We would examine carefully, and ask the grantee's legal opinion for, any interpretations that excluded any of the services discussed below.

Assurance 16 covers "services that encourage and enable households to reduce their home energy needs", and that, by reducing home energy needs, reduce the need for energy assistance. Specific activities included in the statute are "needs assessments, counseling, and assistance with energy vendors."

The statute implies that other activities also might be covered by Assurance 16, because it uses the phrase "including needs assessments, counseling, and assistance with energy vendors..." (emphasis added). Each grantee must determine whether any of its other activities should be included when determining the amount of funds spent on Assurance 16 activities.

In general, we believe activities that fit the description of Assurance 16 must be counted towards the 5% limit on such activities whether or not they are considered to be part of another component of a grantee's program, such as its heating assistance component.

However, we realize that some of these services may be provided under a grantee's weatherization component, which is limited by statute to 15 percent of the funds allotted or available to a grantee (or up to 25 percent if a waiver is granted). We believe that the existence of a separate limit for weatherization services indicates that activities that fall under the weatherization component's funding limitations do not necessarily have to be counted under the Assurance 16 funding limit. Therefore, we believe that it is appropriate for a grantee to determine that services that are an integral part of the process and that are counted toward its weatherization cost limitation (such as energy audits), could be excluded from costs counted toward the Assurance 16 limitation.

In addition, grantees often engage in discussions with energy vendors as a means of resolving an energy crisis for an individual household, such as negotiating a payment plan for a household that has received a utility shut-off notice. Because this is necessary to help the household meet its immediate home energy needs, which is the stated primary purpose of the newly reauthorized LIHEAP statute, and is an integral part of energy crisis intervention, we believe a grantee could exclude costs of such activities that are carried out under its crisis component from the limitation on Assurance 16 activities.

Many, if not most, of the activities covered by Assurance 16 may properly be characterized as non-administrative in nature. However, a revision to section 2605(b)(9)(B) -- Assurance 9 -- of the statute makes clear that Assurance 16 activities that are administrative in nature are exempt from the requirement in section 2605(b)(9)(B) that LIHEAP planning and administrative costs that exceed 10% of the LIHEAP funds payable to a grantee must be paid from non-Federal funds. However, when funded through LIHEAP, costs of Assurance 16 activities that are administrative must be counted toward the statute's ceiling on LIHEAP funds that may be spent for planning and administrative costs.

The practical effect of this provision appears to be the option of using funds from other Federal programs, such as the Community Services Block Grant program, for Assurance 16 activities that are planning and administration costs without counting those funds toward the grantee's LIHEAP administrative cost ceiling. We wish to emphasize, however, that use of other Federal funds for LIHEAP administration and planning must be an allowable use of funds under the provisions of the statute for that program. In addition, use of LIHEAP funds for planning and administration is still limited to 10 percent of the funds payable to states (and slightly more for tribal and territorial grantees), even if they are used for an Assurance 16 activity.

I hope this answers your questions. Please feel free to contact me if you have other questions.

Janet M. Fox
Director
Division of Energy Assistance
Office of Community Services

Table 1.
FY 95 & 96 STATE USES OF EXPENDITURES FOR SERVICES TO REDUCE HOME ENERGY NEEDS
Type of Activity								Additional Notes
State	Year	Case Mgmt.	Energy Educ.	Budget Payment Plan	Advocate/Mediate w/Vendors	Assess Needs	Other		Amnt.
AK	96		x	x		x		pilot program, Fairbanks only	3%
CA	95		x	x	x	x		special emphasis on using providers w/language skills adapted to client populations. These activities are related to targeting of benefits in the plan.	5%
	96		x	x	x	x
ID	96		x	x		x	supplemental outreach		5%
IL	96		x			x			5%
IN	96		x			x			5%
IA	95	x			x	x		provides energy expertise for energy component of Family Development, Self-Sufficiency etc...	NA
	96	x			x	x
KY	95			x	x	x			5%
MD	95			x	x	x	referrals, linkages. Includes case management assistance	separate program, Family Energy Services, funded by up to 5%.	5%
	96	x		x	x	x		State has reporting system
MA	96	x		x		x	outreach	targeted to crisis program clients
ME	95						x	incentive of a refund for good payment record	5%
	96						x		2%
MN	95		x	x	x			2-5% distributed to all local agencies	5%
	96	permitted	permitted	permitted	permitted		x	2-5% distributed to agencies w/approved plan for increment
NV	96		x					mailed "Energy Tip" brochure	<1%
NH	95	permitted	permitted	permitted	permitted		report required	4 models, leveraging	2%
	96	x		x	x		report required
NY	96		x			x	assess/outreach		5%
OR	96		x	x	x			energy education standards in effect for those agencies opting education activities	NA
RI	96		x				assess Weatherization potential	targeted to high-users	2.50%
TX	95	x	x	x	x	x		agencies are testing results measurements through billing history	5%
	96	x	x	x	x	x		Leveraging allowed
UT	96		x					formal curriculum - participation is a requirement for LIHEAP benefits in 3 counties	1%
WA	96		x					formal curriculum	5%
WI	96						supports activities using non-federal energy $ for self-sufficiency	"Non-crisis energy intervention" selects high-use, high-burden hh	5%