Preparing Utility Assistance for a Cold Winter

Winter is coming and so is the increasing need for utility assistance.

By Tad McGalliard, director, research and development, ICMA | Nov 5, 2020 | BLOG POST
Preparing Utility Assistance for a Cold Winter

Winter Is Coming

The pandemic has amplified the challenges that low-income households face on a day-to-day basis.  Jobs have been lost and expenses have piled up for such necessities as water and electricity.  Illustrating the need for utility support, the National Center for Appropriate Technology (NCAT) reports web traffic to LIHEAP clearinghouse website increased by more than 600% and inquiries to the National Energy Assistance Referral (NEAR) service were nearly 72% higher than in April 2019. 

The motto of House Stark in Game of Thrones is “winter is coming.”  For characters in the book, the statement signifies the remembrance of trouble and the belief that the same trouble will come once again. As cooler weather unfolds across the United States and emergency moratoriums preventing utility shutoffs lapse, there is concern that the same financial hardships associated with energy assistance and relief may be on their way back.

Existing Utility Assistance Programming and COVID-19 Impacts

Primary structures for supporting low-income households with financial energy assistance include the federally subsidized LIHEAP program, ratepayer-supported utility initiatives, fuel fund entities, and other nonprofit programs.

Low-Income Housing Energy Assistance Program (LIHEAP).

Since the late 1970s, the LIHEAP program provides block grants to states, which allocate funding to cities and designated community organizations that manage payments for low-income participants eligible for support. The CARES Act provided an additional $900 million for the program to help with current energy assistance needs, and many organizations have tapped their CARES funding to establish or supplement energy assistance programs. The city of Tucson used $4.5 million of their CARES Act allocation to create a rent and utility assistance program for city residents impacted by the COVID-19 pandemic. Tacoma Public Utilities has used CARES funding to create a small business utility assistance program offering up to $750 in support to their local businesses.

Additionally, the U.S. Department of Housing and Urban Development (HUD) allocated funds through the Community Development Block Grant Coronavirus (CDBG-CV) program that can be used to provide utility assistance. Chambersburg received $195,725 and intends to make this funding available to charitable organizations that support borough residents with food assistance programs and/or rent, mortgage, and/or utility assistance programs.

Ratepayer-Funded Utility Assistance.

Many electricity providers have disconnection policies designed to offer some consumer protections for customers that may face sudden, recurring, or prevailing challenges in making payments for electricity service. These programs often partner with LIHEAP administering agencies and other local government or nonprofit organizations to reach eligible households. OUC, the central Florida utility that serves the Orlando region, has long operated an energy assistance program.  An additional $2.6 million was added to the program to support COVID-19 impacted and eligible households. In the Knoxville, Tennessee, region, the local utility’s Project Help has been expanded with additional resources.  Columbus, Ohio, capitalized a low-income energy assistance program in 2018 to help economically distressed families and an additional $300,000 was made available to support households further challenged by coronavirus shocks. Some organizations have partnered with local utilities to offer support, such as the Greater Washington Urban League and PEPCO, offering $500 in funding to help eligible customers pay their bills

Fuel Funds and Nonprofit Support.

The idea of a fuel fund was born in the city of Baltimore when Victorine Q. Adams and Baltimore Gas & Electric helped capitalize a new program to assist financially challenged customers.  Now known as the Fuel Fund of Maryland, the program provided support for 12,000 Marylanders in 2019.  There are numerous fuel funds across the United States that work with local utilities, community action agencies, and other nonprofit organizations.  Several have modified their programs to support the needs brought on by COVID-19. 

National nonprofit organizations, through their local and regional chapters, have also long provided support for low income families.  A few of the notable nonprofit groups include Catholic Charities, the Salvation Army, Jewish Family Services, and the Urban League. Similarly, community foundations are also supporting nonprofit organizations that offer utility assistance programs.  For example, in support of Operation Fuels, an energy assistance program, the Connecticut Community Foundation provided additional resources in support of the growing need brought on by COVID-19.

Preparing for a Long Winter

Fortunately, the Night King and his army of white walkers are not on the way, but public health officials are warning that the combination of flu and the coronavirus could result in a tough winter for the United States.  For low-income households facing many different financial challenges, it will be even tougher.

According to the Wall Street Journal: “Since the pandemic started, 36 states have issued moratoriums on utility shut offs for people who couldn’t pay their bills. In other states, utility companies voluntarily stopped disconnecting customers who fell behind. . . .  Between now and mid-October, an estimated 24 million households are set to lose protections as moratoriums end.”  Managers may want to consider several things in preparation for any needs in their community before the truly cold weather arrives in much of the United States.

  • Taking an Inventory.  At the city and county level, there are many locally run as well as partner programs that provide support to low-income households.  If utility shut offs begin to occur, managers should assess their community’s policy, program, and partnership capacities for any potential growth in need by local households.
  • Leveraging the CARES Act.  If there is a need in your community, and if any allocation of CARES funding to your jurisdiction remains unobligated, communities might consider capitalizing or expanding a payment assistance program for eligible households.
  • Communicate Available Resources. Increase communication about the different avenues through which residents can receive support through your website, social media channels, or utility bills inserts. The Michigan Public Service Commission has created infographics in several languages to lead customers to assistance resources.
  • Consider Approaching Nontraditional Partners.  While many of the larger programs are well established, it may be possible to work with ecumenical groups, business leaders, the Chamber of Commerce, or the local United Way and other social service aggregators to create a hyper-local energy assistance program specific to the next several months that could augment existing programming.
  • Stay in Touch with Community Foundations and Other Philanthropic Organizations.  Community foundations often provide creative, innovative, and flexible funding to meet local or regional needs.  They may also be able to provide emergency funding depending on their mission and the availability of resources.

 


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