Friday, June 05, 2009

With HEAP Closed, More Electric and Gas Customers Facing Termination

Utility terminations are soaring after the closure of the federally funded HEAP block grant program on May 15. Assistance under that program often covers only part of a customer's bills, and utilities are required under their vendor agreements with OTDA to continue service for only 30 days. After the HEAP program ended May 15, customers facing termination for nonpayment of bills are being confronted with demands to pay arrears beyond their means to pay, and some utilities are not providing new payment plans, on the ground that the customer broke a prior payment plan.

There is a bit of a "Catch-22" here. Much of the assistance available through the HEAP program is "Emergency HEAP," eligibility for which is triggered by a utility service termination notice. See Needy Households Must Stop Paying Energy Providers to Obtain Supplemental HEAP Benefits. It is not uncommon for utilities to "coach" or "educate" customers who fall behind in their winter bills to draw a termination notice - by not paying - and then obtain Emergency HEAP to help cover the arrears.

The PSC, however, is not requiring utilities to enter into new affordable payment plans after receiving the Emergency HEAP grants, and apparently is allowing them to demand large sums, beyond the customers' ability to pay, and to again threaten to terminate service. Growing numbers of households without the means to provide a down payment on a new payment plan sufficient to satisfy the utility or the PSC Hotline staff are losing utility service.

This drives customers into financial distress and thence to local Departments of Social Services to seek assistance under the state and locally funded emergency utility assistance program created in 1981, along with HEFPA, by Section 131-s of the Social Services Law. That program will provide grants to restore service, but on terms much more restrictive than HEAP. For example, customers with incomes above the welfare payment level are required to sign draconian repayment agreements, and some counties insist that they provide a lien on their homes. Because the standard of need for welfare has not been adjusted for 18 years, many low income workers find that they are ineligible for utility assistance grants, and must sign the agreements to repay, even though they are on harsher terms than the payment agreements they could not afford to pay to the utility.

Inevitably, many people were unable to repay the local department of social services for past grants, and now, under an OTDA regulation, they are barred from receiving any further assistance. OTDA allowed local departments of social services to relax the harsh rule temporarily last winter, but it is again in force throughout the state. See OTDA Eases, but Continues, its Administrative Restriction on Assistance to Utility Customers with Incomes Above the Public Assistance Level.

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