PULP Urges Changes in Furnace Replacement Component of State Home Energy Assistance Program

The New York State Office of Temporary and Disability Assistance (OTDA) has issued a draft plan for administration of the state's low income Home Energy Assistance Program (HEAP) in 2007 -2008. Under the federal Low Income Home Energy Assistance Program (LIHEAP), states are given wide latitude in designing programs to meet home energy needs.

Most of New York's HEAP funds are used for cash assistance to eligible households, i.e., "Regular" HEAP and energy crisis assistance, or "Emergency" HEAP. Typically, federal funds for these payments run out in the springtime, and New York's cash energy assistance program closes until reopening in the fall, typically, on November 1. (When the HEAP program is closed, other state and local assistance, with eligibility standards more restrictive than HEAP, may be available to avert utility shutoffs).

The current HEAP plan, and the draft plan for next year’s program, provide for use of a portion of federal HEAP funds for weatherization and to replace inoperative or unsafe furnaces in the homes of eligible households. The furnace replacement program element is important because it can address otherwise intractable household energy crises, prevent hardship and loss of life from inoperable or unsafe equipment, forestall future crises, and lessen future low income household energy burdens. Under the current and proposed HEAP plans, 58 local social services districts (New York City HRA and departments of social services in each county outside New York City) administer the HEAP furnace replacement program in accordance with OTDA guidelines.

The draft state HEAP plan, however, contains no specifications that would require installation of efficient furnaces and heating systems. As a result, there is no assurance that HEAP dollars are being used to install equipment that satisfies any efficiency or quality standards.

The purchase of more efficient Energy Star heating system equipment is being promoted, at considerable state and utility ratepayer expense, by the New York State Energy Research and Development Authority (NYSERDA). PULP has recommended to OTDA that it modify the state HEAP plan to specify that only equipment with Energy Star certification may be installed.

Presumably, local social services districts contract with local heating equipment vendors for installation of new furnaces on a lowest bid basis, with a result that bids to supply the lowest cost units will tend to be selected. While the initial cost of Energy Smart equipment may be higher, a more efficient furnace will consume less fuel and reduce future household energy burdens and provide additional environmental benefits. Due to the lack of any efficiency standard, however, it is possible, if not likely, that furnace replacements purchased on a least initial cost basis with state HEAP program funds will have higher future operating costs and adverse environmental impacts over the life cycle of the system.

An OTDA Energy Star requirement for furnace replacements in the state HEAP plan would be in harmony with the spirit of state Executive Order 111, issued June 10, 2001. That order states:

Procurement of Energy-Efficient Products.
Effective immediately, State agencies and other affected entities shall select ENERGY STAR energy-efficient products when acquiring new energy-using products or replacing existing equipment. NYSERDA shall adopt guidelines designating target energy efficiency levels for those products for which ENERGY STAR labels are not yet available.

PULP believes that with Energy Star home heating system equipment readily available, the state HEAP Plan should not allow state - administered HEAP funds to be used by local districts to purchase non Energy Star equipment that could not be purchased by OTDA if OTDA were buying the equipment directly.

PULP has recommended to OTDA that the draft HEAP plan for 2007 - 2008 be modified to include this requirement:

Local social services districts shall require that all furnace system replacements be Energy Star certified and installed in accordance with the manufacturer’s specifications, best practices, and applicable codes.

Also, the new draft HEAP plan includes a restriction on furnace replacement and repair assistance that would deny aid to households who are buying their home under a contract for deed. This will exclude eligible households who are responsible for the heating systems in their homes but lack funds to repair or replace them. Indeed, some of the neediest households may be those who are buying their home through a contract for deed because they cannot qualify for a mortgage.

The cost of repair or replacement of essential heating equipment is often far beyond the means of low income households. The risks to health and safety from unsafe or inoperable equipment are high. Denial of HEAP program assistance could lead to homelessness or other tragedies. Prior state OTDA policy allowed furnace replacements on a case by case basis for households with contracts for deeds. PULP believes there should be no exclusion of households with contracts for deeds, and that the draft plan should be changed to allow more flexible administration of the program.

For further information visit PULP's web page on the HEAP program.