BEFORE THE PUBLIC SERVICE COMMISSION



BEFORE THE PUBLIC SERVICE COMMISSION

OF MARYLAND

IN THE MATTER OF THE ELECTRIC *

UNIVERSAL SERVICE PROGRAM Case No. 8903

*

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COMMENTS OF THE DEPARTMENT OF HUMAN RESOURCES

OFFICE OF HOME ENERGY PROGRAMS

ON THE

REPORT OF THE ELECTRIC UNIVERSAL SERVICE

WORKING GROUP

The Office of Home Energy Programs participated as an active member of the Electric Universal Service (EUSP) Working Group and offers the following comments regarding the issues addressed by the Group.

1. The feasibility of issuing a second low-income weatherization contract in the amount of $800,000 to facilitate completion of projects on the Fiscal Year 2002 list.

OHEP addressed this issue in its filing where it indicated that the issuance of a second contract was not feasible. OHEP further indicated that a modification of the current contract would be pursued to expend the $800,000. A copy of the final modification was filed with the Commission on October 27, 2003.

2. Utility retirement of arrears beyond the $2,000 cap covered under EUSP.

DHR/OHEP suggests that the current policy regarding a $2,000 cap on arrearage be maintained at this time. Data reveals the frequency of arrearages higher than $2,000 is minimal in relation to the total number of arrearage payments. During FY 2003 and FY 2004, arrearages $2,000 and over numbered 65 and 25 applications, respectively.

3. Outreach efforts and strategies that might improve EUSP participation within Baltimore City.

DHR/OHEP concurs with the efforts of the EUSP Working Group to conduct research concerning the enrollment disparity between MEAP and EUSP. OHEP is supportive of the Baltimore City local administering agency outreach activities being developed to provide opportunities for application intake through application fairs. Specifically, Baltimore City is planning two Energy Expos for late January, 2004 to accommodate both East and West regions of the city. OHEP monitors outreach activities on a monthly basis by means of a required log submitted by all local agencies. To the extent possible, OHEP encourages expanded outreach efforts.

4. Program evaluation relative to Overall Parameters.

DHR/OHEP fully supports the efforts of the Commission to procure an independent program evaluation of EUSP. OHEP participates with the Program Evaluation Sub-Group in the development of the scope of work for the evaluation. In general, OHEP recommends that the evaluation performed focuses on the impact of EUSP on customers. As such, a customer survey should be included as part of the evaluation effort.

5. Disparity between Maryland Energy Assistance Program (MEAP) and EUSP.

Current data suggests that the disparity in the number of applications between MEAP and EUSP is lessening. The cause of the disparity, OHEP believes, lies with several reasons.

1. Large numbers of applications are submitted through the mail and sometimes applicants do not check EUSP as a choice. OHEP will work to develop strategies to minimize the occurrence of this situation through better instructions and education.

2. The applicant=s electric bill may not be in the applicant=s name.

3. Residents of subsidized housing have not applied in the numbers originally projected. Targeted outreach towards this population may help alleviate this situation.

4. There are still a number of applicants that do not want budget billing.

6. Remaining concerns regarding Budget Billing.

As application numbers increase the issue of Budget Billing appears to be less of a factor than the first years of EUSP. While the concept of Budget Billing along with the fact that a significant benefit is provided would seemingly be an inviting option for the customer, that is not always the case in the mind or reality of the low-income customer.

With a limit on the amount of funds that a low-income customer has to pay bills there is a constant juggling of whom to pay. This is a day-to-day issue. While budget billing most likely will result in a positive over the long-term, often low-income families have to deal with the short-term just to survive from day-to-day. Because of these circumstances they do not look at the long-term view even if there is something to be gained. Income over the course of the year may be irregular and many other family issues (health care especially) impinge upon the ability to pay in any given month.

The reality of Budget Billing is that practice varies by utility and is not always a simple calculation of a twelve-month bill divided by twelve to establish a monthly billing amount. Past due amounts are not necessarily included into the calculation, but are required to be paid in full or subject to a special payment agreement that may span a few months. The result is a higher monthly bill than can be afforded in many cases.

Another concern is the display of the Acredit@ on the bill. Because the EUSP grant is displayed as a credit on the bill although reduced each month, some customers do not understand the bill and may assume that if there is a large credit on the bill then there is no need to pay the bill. Even if the bill is affordable due to budget billing, payment may not result.

Budget Billing within the BGE service area becomes more complicated as BGE is also the provider of natural gas to many homes. With gas being included in the calculation of the budget bill and gas prices undergoing significant increases in recent years, the amount of the budget bill can overwhelm the ability to pay the monthly bill. While the impact may be lessened with the receipt of MEAP benefits for gas, the fact that MEAP funds are not necessarily available at the same time EUSP funds are issued may cause a significant increase in the total bill for a temporary period of time.

7. High Usage/Consumption vs. emphasis on all electric households.

High usage consumption is a complex issue that may need further study to categorize the reasons for high usage and analysis as to how each category can be reduced. For example, a household that uses electric space heaters when the furnace is broken has high usage, but cannot be classified in the same way as a household that is all electric without insulation. Another category is households that have a base load electric usage above 10,000 kWh. All are high usage electric customers. As the EUSP program matures investigations and solutions can be developed.

The FY 2003 database reports more that 18,200 low-income households that could be classified as high electrical usage consumers. The current weatherization program offers measures for shell improvements to an all electric household only. At present 4,306 households have kWh usage of over 22,000 kWh. DHR/OHEP suggests funding for a case-by-case analysis of who these households are and why the high kWh usage. To mitigate the occurrence of high consumption the weatherization component needs flexibility. Most high users of electricity will never be addressed if the current scope of work in the DHR/OHEP contract is limited to improvements to the building shell.

8. Advice regarding the installation of appliances.

DHR/OHEP has amended its weatherization contract to eliminate certain contract components (appliances such as heating system service, thermostat replacement, furnace electric starter replacement, low flow showerhead and repair of central air conditioner) that do not conform to the dictates of Order No. 78661, dated September 16, 2003. Only measures to the structure are permitted. Where more extensive repairs are required, education is provided as part of the audit process. The purpose of such education is to change patterns of consumption by changing behavior in the household.

It is estimated there are approximately 4,200 low-income applicants that are all electric homeowners. (Based on report of kWh usage and percentage of homeowners in current program). If landlords continue to decline this program, the current weatherization measures will not be available to renters.

DHR/OHEP is unable to provide advice until the law limiting DHR=s definition of weatherization is changed.

The Commission could revisit the mission of the weatherization component again. There are several modifications to this component that the Commission might wish to order in its effort to follow the legislative mandate: Alow-income weatherizationY measures that reduce consumption of energy by electric customers@ (SB 504, 2003 Legislative Session).

DHR/OHEP originally interpreted the legislative act and the assignment of electric weatherization to DHR as a mandate to offer unique and innovative measures that reduce electrical consumption. These measures would be broader than the mandate of the Department of Housing and Community Development=s (DHCD) Weatherization Assistance Program (WAP). Through dialogue with the Commission and its staff, many of the special measures such as repair or replacement of heat pumps, thermostat replacement, furnace electric starter replacement, low flow showerhead and repair of central air conditioners have been eliminated.

Today the electric weatherization service differs from the DHCD services only in the EUSP is limited to electrical heating households. There is a need to identify uniformity for weatherization throughout the state.

9. Impact of landlord contribution requirement on weatherization program penetration.

To date no landlord has been willing to make cash contributions to the weatherization of rental units. Allowing the landlord=s contribution to be made in-kind could mitigate this problem.

DHR/OHEP with the permission of the Commission will seek to improve the current EUSP weatherization contract service for EUSP households by working with DHCD/WAP. Coordinating weatherization services for customers so that all measures are completed at one time, avoiding duplication of effort, and sharing weatherization software are our current goals.

Respectfully Submitted

J. JOSEPH CURRAN, JR.

Attorney General of Maryland

TURHAN E. ROBINSON

Assistant Attorney General

Saratoga State Center

311 West Saratoga Street, Suite 1015

Baltimore, Maryland 21201

(410) 767-7726

Attorneys for the Department of Human Resources, Maryland Energy Assistance Program

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on , a copy of the foregoing Comments of the Department of Human Resources, Office of Home Energy Programs, to the Electric Universal Service Working Group Report was mailed first-class postage prepaid, to the parties of record.

TURHAN E. ROBINSON

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