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Why Implement a Program?. Indiana, unlike other states, is without a safety net program Indiana relies solely on Federal LIHEAP funding which has not responded to rising prices, and extreme temperature changes
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Why Implement a Program? • Indiana, unlike other states, is without a safety net program • Indiana relies solely on Federal LIHEAP funding which has not responded to rising prices, and extreme temperature changes • According to census information more Indiana low-income customers are struggling with “ability to pay” • Last year Indiana had the 3rd highest poverty increase nationally (14% increase) • This program is a proactive solution when customers are struggling at conclusion of winter moratorium
Program Objectives • Further assist existing low income customers • Easy to administer with EAP application process • Address affordability by lowering monthly bills based upon income • Increase weatherization funding • Encourages conservation Program Partners • Vectren Energy Delivery • Citizens Gas • FSSA • Office of Utility Consumer Counselor • Manufacturing and Health Providing Customers • Citizens Action Coalition
Program Details • 2 year pilot beginning January ‘05 • Benefits EAP approved customers at or below 125% of poverty • 9%, 18% or 24% discount for Citizens Gas customers based on EAP benefit matrix • 15%, 26% or 32% discount for Vectren Energy customers based on EAP benefit matrix • Crisis and other assistance applied in addition to the discount
Universal Service Program Benefit Chart Matrix PointsCitizens Gas DiscountVectren Discount 1-12 9% 15% 13-15 18% 26% 16-20 24% 32%
Estimated Households to be Assisted by USP Citizens Avg Bill Reduction Households Tier #1 9% 3,682 Tier #2 18% 9,555 Tier #3 24% 2,765 Vectren Avg Bill Reduction Households Tier #1 15% 4,606 Tier #2 26% 15,549 Tier #3 32% 3,319
Citizens Gas Calculation of Customer Benefits Example of Less EAP Less USP % Total USP Average Annual Bill Benefit Discount Benefit Annual Bill Tier #1 $1,000 $171 $ 90 (9%) $261 $739 Tier #2 $1,000 $210 $ 180 (18%) $390 $610 Tier #3 $1,000 $245 $ 240 (24%) $485 $515 • Average Annual bill is only an example • Other assistance is applied in addition to EAP and USP benefits
Vectren Calculation of Customer Benefits Example of Less EAP Less USP % Total USP Average Annual Bill Benefit Discount Benefit Annual Bill Tier #1 $1,000 $171 $ 150 (15%) $321 $679 Tier #2 $1,000 $210 $ 260 (26%) $470 $530 Tier #3 $1,000 $245 $ 320 (32%) $565 $435 • Average Annual bill is only an example. • Other assistance is applied in addition to EAP and USP benefits
Citizens Gas USP/EAP 2004-2005 Program Year 1 • $ 4.5 million in EAP and USP assistance provided from 11/04 through 09/28/05 • 2004-2005 LIHEAP program enrollment comparable to prior year • 14,456 customers approved for EAP • USP provided benefits in the amount of $1.3 million YTD (projected year end benefit of $2.1 million)
Citizens Gas – USP Funded Weatherization • $500,000 for each program year • Low-income customers - LIHEAP guidelines • Both home owners and rental properties • Households with gas consumption greater than 120% average annual gas usage • Community Action of Greater Indianapolis (CAGI) contracts the weatherization work • Targeting 175 Homes • 100 homes currently in all stages of the process (i.e. identification; audit; in progress; or completed) • Conservation and weatherization education session conducted by Indiana Community Action Association (INCAA)
Citizens Gas Early Results • 100 homes in various stages of weatherization work • 71% of EAP customers still on service with an average bill of $52, comparable to non USP customers. • Comparative data for 2003-2004 heating season is not available
Vectren USP/EAP 2004-2005 Program Year 1 • $ 10,059,019 in EAP and USP assistance provided from 11/04 through 9/05 • 2004-2005 LIHEAP program enrollment has increased to prior year • 24,200 customers approved for EAP • USP provided benefits in the amount of $3.5 million YTD (projected year end benefit of $5.3 million)
Vectren – USP Funded Weatherization • Approximately 1,395 Vectren customers were weatherized using federal and state funding last year. • $200,000 from the USP fund will aid approximately 75 homes identified as candidates for weatherization in 2005. • INCAA coordinates program funding and data collection for participating community action agencies throughout the state. • Criteria used to identify weatherization candidates • Consumed 30% more energy than the average customer • Customer owns and resides in the dwelling • Received LIHEAP assistance in the previous year • Income within 125% of federal poverty guidelines
Vectren’s Early Results • 25 homes in various stages of weatherization work • 81% of EAP customers still on service • Comparative data for 2003-2004 heating season is not available