Electric, gas tariff cut; now a surplus to help needy
It may be hard to believe when everything else is going up, that one aspect of your gas and electric bill was actually reduced as of the first of this year.
It’s not much – just 10 cents – on an individual basis, but collectively it will add up to millions less for the low income home energy assistance program, or LIHEAP.
And why would the Public Utilities Commission (PUC) that lowered the monthly collection from 83 to 73 cents per customer do that when community action agencies are in need of funds to meet demands, especially at a time when temperatures have been spiraling downward in a polar vortex?
The answer, as counterintuitive as it may sound, is that more money is being collected than being spent to help those who can’t afford to keep their electric or natural gas heat on. In fact, according to estimates provided to the PUC by National Grid, as of the end of 2013 there was $9.9 million in the fund, which exceeds by more than $2 million what is allowable as a reserve as established by the Henry Shelton Act. The law says annual revenues from the electric and gas tariffs shall not exceed $7.5 million or be less than $6.5 million. Also, by law, not less than 73 cents per month can be collected.
But don’t fear – the money will be used to help those in need. And while it can’t be used to help those who use home heating oil or propane to heat, indirectly it will help them too, according to Lewis Babbitt, chief for the LIHEAP program of the Department of Human Services.
LIHEAP is funded through a combination of federal revenues and revenues generated by the traffic on electric and natural gas customers. Federal funding keeps getting cut, and it’s those cuts that make headlines.
Federal LIHEAP funds total $20.6 million this year, down from $23 million last year. In 2010, the state received $35 million, said Babbitt.
But funds are flowing and emergency situations are being dealt with. The demand is also up.
As of Tuesday, Babbitt reported 20,771 household applications for assistance had been proceeded, as compared to 11,877 at this time last year. Babbitt attributed some of the increase to a new software program implemented last year. He thought the program could see an overall increase of 10 to 12 percent.
Jeanne Gattegno, executive director of Westbay Community Action, said Tuesday that since the Department of Human Service has taken over the administration of the program from the Department of Energy, there hasn’t been a delay in funding. That’s important, as she said oil dealers used to make deliveries on the basis of an agency confirmation. But now, she said, many dealers don’t have the money to upfront the oil delivery.
What the state is seeing because of the cold weather is that people eligible for assistance have used up their initial allotments and are applying for emergency fuel. The program provides two emergency fuel grants of 100 gallons per household.
Electric and natural gas, which are regulated utilities, are not affected since there is a winter shutoff moratorium.
Babbitt said between 30,000 and 40,000 households receive LIHEAP assistance in the course of a year, which in many cases can be a mix of federal funds and revenues from the Henry Shelton Act. Since it was implemented two years ago, revenues from the act were used to augment payments that went to electric and gas heat. Babbitt explained that the department has changed the mix by decreasing the federal dollars going to electric and gas customers, which will allow more federal funds to help those with home heating oil and propane.
Gattengo was pleased to learn funds were being freed up for oil and propane heating, although she hadn’t heard of the $9.9 million in reserves.
“It doesn’t surprise me that there’s some money somewhere,” she said.
As of Tuesday, Gattegno said Westbay had processed 3,433 households, had provided emergency assistance to 211 and paid out $1,069,169 for heating oil deliveries. Depending on income criteria, energy assistance grants run up to $660.
In an interview last week, Joanne McGunagle, executive director of the Cranston-based Comprehensive Community Action Program (CCAP), said the volume of calls coming into her agency regarding heating assistance has increased with the plunging temperatures but that need is comparable to previous seasons and is being met.
“I think we’re probably at the same point we were last year,” she said. “I think most people know where they stand.”
McGunagle noted that in some cases, people in the midst of the application and approval process for assistance, which involves multiple steps, reach out when temperatures drop to see where they stand. That, she said, is a significant contributor to the rise in calls.
“When temperatures plunge like this, you see a rush of phone calls,” she said. “Some people might be between the approval of the application and the confirmation … It’s all these logistical things that can complicate it.”
While the need for heating assistance is being handled at CCAP, which serves Cranston, Scituate, Foster and Coventry, with programs in other communities, McGunagle said additional resources are always needed in Rhode Island and the rest of New England. Being able to increase the amount available to individuals and families for heating beyond the current $500, she said, would specifically make a major difference. She praised U.S. Sen. Jack Reed and the rest of the Ocean State’s congressional delegation for their advocacy.
Frederick Sneesby, spokesman for the Department of Human Services, said Tuesday that the state expects to receive another $2 million to $3 million in federal funds as Congress increases national funding from $3.1 billion to $3.4 billion.
Sneesby expected the $9.9 million fund generated by the Henry Shelton Act “will be spent by this June.” He said the fund’s existence is enabling federal LIHEAP money to cover the higher cost of heating oil and cope with emergency requests resulting from the cold weather.
“I don’t anticipate anyone won’t go without funding [for heating oil and propane],” he said.