PULP Expresses Concerns with State HEAP Program, Proposes Improvements,Transparency and Public Scrutiny of Utility Vendor Agreements

The HEAP program uses federal dollars to address home energy needs of low-income households, with states allowed to design program details after involving the public in the program design. In February 17, 2010 Comments to the state Office of Temporary and Disability Assistance ("OTDA") on the development of the State Home Energy Assistance Plan ("HEAP") for 2010 - 2011, PULP pointed out significant shortcomings in protecting households Congress intended to benefit from the program.

PULP's comments urged that the State HEAP Plan for the next winter season address the following issues which lead to hardship for some of the households it is intended to assist and frustration of the statutory purposes of the program:

(1) The HEAP Vendor Agreement with the regulated utilities must be made publicly available and its key terms included in the State HEAP Plan. The current Vendor Agreement is not available for comment and is not submitted to the federal Housing and Human Services for approval along with the State HEAP Plan. It contains provisions affecting eligibility for emergency payments and use of HEAP funds which are privately negotiated between OTDA and the utilities.

For example, the current Vendor Agreement does not require the utility to credit payments so as to reduce bills for the current winter season and allows utilities to credit regular HEAP payments to arrears that are the subject of deferred payment agreements. It also permits the utility to "either accept or decline regular and/or emergency HEAP benefits authorized on behalf of an applicant for utility service." As a result, the utility decides whether the emergency will be resolved.

(2) Regular HEAP payments should go to the current season bills and should not be applied to amounts in abeyance or to arrears that cannot be the basis for termination of service. The Vendor Agreement with the distribution utilities and the State HEAP Plan should include unambiguous language that HEAP payments received must be applied to charges for the current heating season, unless the customer requests a different allocation. Currently, regular HEAP payments may be applied by the utilities to reduce deferred payment agreement balances from prior years that can not be grounds for termination while the customer makes timely installment payments. As a result, this year many Regular HEAP recipients saw no reduction at all in their current month's payment obligations in the winter season.

(3) Utilities should not have an opportunity to reject an Emergency HEAP payment approved for a customer. Some utilities have a history of occasionally rejecting Emergency HEAP payments approved for some customers and disconnecting these customers, or leaving them without service, despite the very real consequences that can result. We cited to a customer's death by hypothermia which followed National Fuel Gas's violation of the Home Energy Fair Practices Act coupled with rejection of an Emergency HEAP payment. See NFG Not Penalized for Woman Freexing to Death, Lawsuit Involving Death of Velma Fordham Settled by National Fuel. This is allowed and encouraged by the current OTDA Vendor Agreement.

(4) OTDA should investigate whether propane dealers are charging more to HEAP customers than to non-HEAP customers. PULP has become aware that some propane dealers are charging a premium on the per-gallon price of propane to HEAP customers, sometimes adding nearly 80 cents to a gallon of propane. No HEAP customer should pay more than a cash customer, under the federal statute, LIHEAA, and Section 7(C) of the current HEAP Plan.

(5) OTDA should be required to provide statistics regarding the size of the eligible HEAP population and the number of eligible households receiving a grant. On its webpage, OTDA provides an annual "households served" report, but does not compare this information to the current universe of eligible households throughout the state. The State HEAP Plan should compare the number of households receiving HEAP benefits with the number of HEAP-eligible households and include measures designed to reach eligible households not receiving assistance. Without this information, the public cannot readily assess how successful OTDA is reaching the eligible population of low-income households, or measure the effectiveness of program outreach.

(6) The HEAP application should provide an opportunity for applicants to automatically enroll in utility low income rates. The current application for HEAP includes a question regarding whether OTDA can share the applicant's name with their local telephone provider as part of the automatic enrollment process for Lifeline discount telephone service. However, the utility that provides service to the customer seeking HEAP assistance may have its own low income rate but not know that the customer is eligible for HEAP, which typically is among the programs that trigger eligibility for a low income rate. For example, the utility may not receive a HEAP vendor payment when the the applicant 's HEAP is for non-utility fuel delivery. The HEAP application would be a useful vehicle to establish an automatic enrollment process for HEAP customers to be able to receive the low income rate from their utility.

The draft State HEAP Plan will be available for public input - except for the utility Vendor Agreement - later this year.

Lou Manuta