Questions to OHEP

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Before the

PUBLIC SERVICE COMMISSION OF MARYLAND

CASE 8903

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Staff Comments Regarding the Electric Universal Service Program Proposed Operations Plan for FY 2002

October 15, 2001 TABLE OF CONTENTS

I. INTRODUCTION...... 2

II. SUMMARY...... 2

III. BACKGROUND...... 5

IV. PROGRAM GOALS...... 6

V. PROGRAM SUMMARY FOR FY 2001...... 7

VI. PROGRAM OPERATIONS FOR FY 2002...... 8

PROPOSED ALLOCATION OF FUNDS...... 8 VII. NEEDS ASSESSMENT...... 10

VIII. PROGRAM YEAR...... 10

IX. PROPOSED PROGRAM DESIGN AND PLAN OF OPERATIONS...... 11

A. BENEFIT LEVELS AND PAYMENT - ARREARAGE RETIREMENT ASSISTANCE...... 11 B. APPLICATION INTAKE AND DATA ENTRY...... 11 C. PAYMENTS TO UTILITIES AND NOTIFICATION TO CUSTOMERS OF GRANT STATUS...... 12 D. BUDGET BILLING EDUCATION...... 12 E. PROGRAM EVALUATION...... 13 F. FORWARD FUNDING...... 13 G. LOW-INCOME WEATHERIZATION...... 14 X. SUMMARY OF RECOMMENDATIONS...... 14

XI. CONCLUSION...... 15

ATTACHMENT A...... 18

ATTACHMENT B...... 22

2 I. Introduction

On September 19, 2001, the Office of Home Energy Programs (“OHEP”) filed its

Proposed Operations Plan for FY 2002. On October 1, 2001, the Commission issued an order in case 8903, requesting comments from the parties on OHEP’s Proposed EUSP

Plan for FY 2002 by October 15, 2001. Staff’s comments on the Proposed EUSP Plan for FY 2002 are contained herein and organized as follows:

(1) Program Goals

(2) Program Summary for FY 2001

(3) Program Operations for FY 2002

(4) Needs Assessment

(5) Program Year

(6) Proposed Program Design and Plan of Operations

II. Summary Overall, Staff believes that the Electric Universal Service Program (“EUSP”) performance in Year 1 was disappointing. The late roll-out of program outreach, unending computer system problems and delays in payments to utilities resulted in late pay-out of EUSP benefits and customer confusion. Lack of coordination by OHEP with the utilities during the year also caused many problems. Roughly four times as much money was available between July 1, 2000 and June 30, 2001 for energy assistance through EUSP and the Maryland Energy Assistance Program (“MEAP”) as previously available. Nevertheless, energy assistance benefits, both MEAP and EUSP, did not reach

3 customers in a timely manner and Commission action via hearings and a moratorium on terminations was done in case 8880.

Low-income weatherization got such a late start under the Memorandum of

Understanding (MOU) with the Department of Housing and Community Development

(DHCD) that customers who did receive services, did not receive them in time to reduce their heating bills in a year of unusually high heating costs. As a consequence of double- payments made by OHEP to the utilities, close-out accounting for Year 1 has occurred too late to allow a smooth transition into Year 2. Year 2 EUSP customers will again receive their benefits late. Year 2 benefits cannot be credited to customer accounts until utilities are able to close their Year 1 accounts.

Staff believes that OHEP is not proposing a Year 2 plan that will sufficiently exceed the poor program performance of Year 1. The OHEP proposal to stagger the mailing and intake of applications over a longer period of time will again result in late pay-out and crediting of EUSP benefits to eligible customers. Despite the fact that it is mid-October, and no EUSP Year 2 benefits have been realized by customers. Computer problems must be resolved. Adequate financial and human resources must be made available to avoid repeating the application backlog and delayed benefits of Year 1. The

EUSP close-out process must occur earlier in Year 2. Staff believes that OHEP’s proposed Year 2 program allocations are questionable and thus recommends that OHEP be given greater flexibility in moving funds between program components in Year 2 as program needs become more clearly known.

While OHEP proposes to increase outreach and customer education, Staff has seen nothing specific upon which to predict increased customer interest in EUSP or the

4 required budget billing. Staff requests that OHEP be directed to provide these program specifics as they are developed. OHEP also seems bogged down in an uncertain low- income weatherization RFP process, leading to the conclusion that there will be no improvement over last year in services rendered. Staff therefore makes the following recommendations:

 Staff believes that OHEP’s proposed Year 2 program allocations are questionable and

thus recommends that OHEP be given greater flexibility in moving funds between

program components in Year 2 as program needs become known.

 Staff recommends that the Commission direct OHEP to produce a detailed accounting

of program and administrative expenditures for Year 1.

 Staff recommends that OHEP be directed to report on Year 1, submit supporting data,

and evaluate its program performance.

 Staff recommends that the Commission direct OHEP to submit its proposal of how it

will spend any remaining Year 1 EUSP money to benefit Year 1 clients as soon as

possible.

 Staff recommends that OHEP be directed to provide program specifics of increased

outreach and customer education, especially with respect to budget billing, as they are

developed.

 Staff recommends that the Commission direct OHEP to report on the Low-Income

Weatherization Program for Year 1 and the plan for Year 2.

5 III. Background

The Department of Human Resources’ (DHR) Office of Home Energy

Programs (OHEP) commenced EUSP activities on July 1, 2000.1 As part of its administrative responsibility over the EUSP, OHEP is to develop and submit a program proposal to the PSC by September 15th of each year with the proposed plan of operation for the coming year. On September 19, 2001, the Office of Home Energy

Programs (“OHEP”) filed its Proposed Operations Plan for FY 2002 (“Plan”).

Subsequently, on October 1, 2001, the Commission issued an order in Case 8903 requesting comments from the Parties on OHEP’s Proposed EUSP Plan for FY 2002 by

October 15, 2001.

On September 28, 2001, Staff Counsel served an EUSP data requst on all electric utilities in Maryland. (Attachment A) The data requested was similar to that requested for the USPP. Staff is in the process of compiling this data as it is being received and will prepare a report to the Commission for its review prior to the November 9, 2001 EUSP hearing.

On October 1, 2001, Staff presented a data request to OHEP (Attachment B) asking questions related to its September 19th Proposed Plan. No responses have been received to date.

IV. Program Goals

1 Commission Order No. 75035, (January 28, 2000), Order No. 76049 (April 4, 2000) and Order No. 76139 (May 8, 2000).

6 In Section E(a) of its Plan, OHEP states that it will assist low-income electric customers in ways that encourage regular, prompt and complete payment of electric bills through education and self-help strategies as well as through bill assistance payments and arrearage retirement assistance. However, OHEP has not provided any specifics about its proposed Year 2 education plan or any descriptions of self-help strategies that will be used to encourage bill payment. Staff is very interested in any education plan that OHEP develops and the extent to which local agency staff (LAAs) are trained to educate customers. Staff is also interested in knowing what training or written educational materials will be used and whether the education will alleviate some of the confusion surrounding budget billing.

In Section E(d) of its Plan, OHEP states that it plans to “make home electric costs more affordable for low-income individuals through focused programs using available resources, case management and holistic approaches to resolve chronic electric cost issues.” Staff would like the specific details or examples illustrating how these focused programs are or will be administered and implemented.

With respect to Section E(e) of the Plan, it is unclear how customers will be made more aware of efficiency/conservation measures and the lower bills that can result from such measures. Staff believes that it would be helpful to educate LAA staff in how they can help customers to lower their bills by educating customers about measures they can take to decrease electricity consumption.

V. Program Summary for FY 2001

7 OHEP has not provided an adequate Year 1 report of the EUSP to the

Commission. Staff cannot produce a meaningful report to the General Assembly in

December from the scant information provided in OHEP’s September 19, 2001 filing.

There is no accounting of administrative expense, nor is there an evaluation of the program’s performance or discussion of program objectives that were achieved. OHEP’s summary for FY 2001 is inadequate for an agency’s year-end report of a statewide $34 million program.

Data to prepare a report to the General Assembly on the Year 1 EUSP or to transition into Year 2 has not been provided in this filing. Staff needs to know the final close-out accounting of money spent in Year 1 to properly monitor available program revenue and expenditures during the course of the EUSP so as to recommend EUSP customer charges at the appropriate level. The Program Summary for FY 2001 does not supply the actual EUSP administrative costs for the first year. Since the weatherization in Year 1 was performed by DHCD, is it to be presumed that the $1.5 million in benefits paid includes administrative expense for that program component? If not, Staff would like to know the administrative expense for weatherization, what was spent by DHCD and what, if any, was spent by OHEP. It is also not clear whether the rounded numbers listed in the chart of program components and benefits paid (page 5) are actual close-out amounts. If these are not actual close-out amounts, OHEP should state when those numbers, including a breakdown of actual administrative costs, will be made available to

Staff. This information is crucial to the calculation of refunds and obtaining it has some degree of urgency since the utilities must reprogram their billing systems in order to collect the appropriate EUSP customer charge.

8 Staff recommends that the Commission direct OHEP to produce a detailed accounting of program and administrative expenditures in Year 1. Additionally, Staff recommends that OHEP be directed to report on Year 1, submit supporting data, and to evaluate its program performance.

Staff notes that the amount of benefits paid in the chart at page 5 is less than the authorized $34 million, even if administrative costs were to be included. Staff recommends that the Commission direct OHEP to submit its proposal of how it will spend any remaining Year 1 EUSP money as soon as possible.

Staff suggests that one way for OHEP to distribute remaining Year 1 EUSP funds is through a voucher system. Vouchers for supplemental bill payment assistance grants could be printed and mailed to Year 1 EUSP participants. The customer would be instructed to mail the voucher to their utility with their bill payment. The utility, upon receipt of the voucher, would credit the face value of the voucher to the customer’s account.

VI. Program Operations for FY 2002

Proposed Allocation of Funds

Staff agrees with OHEP that the majority of customers with arrearages covered by the Act have had those arrearages retired during FY 2001. This is evidenced by the large drop-off in arrearage retirement requests from 76% to 17% in the first three months of the program. According to the chart on page 5 of the filing, $8,250,000 was paid out for arrearage retirement in Year 1. The remaining qualifying arrearages for EUSP customers

9 is unknown. For these reasons, Staff does not oppose the allocation of $3,100,000 OHEP proposes for Arrearage Retirement.

Staff doubts that the allocation of $3.5 million to low-income weatherization proposed by OHEP can be spent in Year 2 since the EUSP weatherization “Request for

Proposals” is purportedly still “in process at this point”. Even with a backlog of services from Year 1, there is no evidence to support that there is the time or the manpower to perform enough weatherization services to exceed the level of benefits allocated in Year

1. However, because of benefits of low income weatherization. Staff has no objections to allowing OHEP funding flexibility to spend up to $3.5 million on low-income weatherization services.

OHEP proposes to allocate $24,000,000 to bill payment assistance. The proposal represents an increase of $3.5 million to bill payment assistance over that which was paid out in Year 1. While OHEP proposes to increase outreach and customer education, there is no discussion of specific measures to educate customers. Besides the targeted outreach to be directed at public housing customers there is no basis upon which to predict increased customer interest in EUSP or, to budget billing. Much will depend on OHEP’s customer education plan. The proposed allocation is reasonable but believes that OHEP should have the flexibility to increase it if it finds that less funds are required by either of the other program components.

VII. Needs Assessment

Staff notes that the 88,695 applications for assistance in the Year 1 Program

Summary (page 5) that were taken by OHEP is very close to its revised Year 1 EUSP

10 goal of 90,000. However, only 65,245 applications were approved for Bill Payment

Assistance. Staff anticipates that both numbers will increase in Year 2 simply because more customers will be reached by increased outreach proposed in OHEP’s Year 2 Plan

(page 9, Observation 4). The Bill Payment Assistance Table for EUSP’02, shown on

Attachment 3 of the Plan, sets benefit levels at the same levels and is based on the same customer population as in Year 1. Staff agrees that using Year 1 assumptions is still a good starting point but believes that OHEP will need to have flexibility to move funds between program components in Year 2, and onward, if its bill payment assistance population should exceed 90,000.

VIII. Program Year

OHEP proposes to overcome the current close-out accounting difficulties of

Program Year 1 by limiting the intake of EUSP applications to eleven months. The last month of the program year would be set aside for the fiscal close-out process and any end of year adjustments. Customers wishing to apply for EUSP benefits in June would have to wait until July. Assuming that this proposal will be communicated to customers and other stakeholders at the onset, Staff agrees that an eleven-month EUSP intake year is a good idea. The final figures are too late this year to implement a smooth transition to

Year 2. The utilities need to be able to close out one year before application of the following year’s benefits to customer accounts. It is chaotic to pay out Year 2 benefits to utilities for customer accounts before their Year 1 accounts are closed. Staff sees

OHEP’s proposal as offering hope for a smoother transition next year.

11 IX. Proposed Program Design and Plan of Operations

A. Benefit Levels and Payment - Arrearage Retirement Assistance

The second and third sentences of this paragraph of the Plan (page 8), were inverted. The sentence should read as follows:

As stated in PSC Order Number 75935 (January 28, 2000), if

the customer is on service the amount of arrearage benefit is equal to

the amount of the arrearage that is identified. If the customer is off

service the amount of arrearage benefit is a maximum of $2,000.

B. Application Intake and Data Entry Backlogs in application processing and data entry was a major problem in Year

1. OHEP plans to alleviate the problem in Year 2 using three strategies: (1) fix the computer system; (2) stagger the initial mailing of applications to previous participants so that the return of applications occurs over a longer time period; (3) allocate administrative funds to hire temporary data entry staff and outsourcing data entry.

OHEP states that the computer system corrections are “nearly complete”. (Plan, Page 9)

Prompt resolution of OHEP’s computer difficulties is desirable and necessary.

However, the strategy to stagger the initial mailing of applications so as to receive their return over a longer period of time will cause customers to again receive their benefits late. Staff objects to serving administrative ease at the expense of customers. The third strategy of allocating additional resources is a better solution.

C. Payments to Utilities and Notification to Customers of Grant Status Delays in payments to utilities and delays in notifying customers of grant information created confusion and caused the Commission to hold emergency hearings

12 and subsequently, to institute a moratorium on service terminations. OHEP states that in Year 2, it will notify applicants of their grant amount within 10 days of check issuance to the utility. In addition, it plans to let LAA’s know the date upon which a check is issued. OHEP also states that it will process payments on a regular weekly schedule.

Staff wants to know when OHEP will begin paying out benefits. Staff would also like to hear from utilities when they begin to receive payments for Year 2 and to be notified if they do not receive payments from OHEP.

D. Budget Billing Education OHEP states that many customers rejected Bill Payment Assistance because of the budget billing requirement. OHEP plans to resolve this problem through educating customers about the advantages of budget billing and states that it will also ask the

Universal Service Working Group (USWG) to address the problem.

Why was this not done in Year 1? Staff wants to know how the content of what the customer is told about budget billing will change. Staff also wants to know what

OHEP wants the Universal Service Working Group to do and how OHEP plans to use the results of any solutions developed by the USWG.

During the EUSP Year 1 experience, Staff was told that some utilities were applying a lump sum EUSP grant to customer accounts. Staff would like to hear from the utilities if this was their practice, and whether or not these utilities plan to correctly apply Year 2 EUSP Bill Payment Assistance through budget billing or a monthly credit so that customers will benefit 12 months of the year.

13 E. Program Evaluation OHEP states that Year 1 of the EUSP was a pilot year. OHEP proposes to contract with a consultant to begin an evaluation process. OHEP also plans to examine ways to better integrate MEAP with EUSP. OHEP proposes to look at the Utility

Service Protection Plan (“USPP”) with the PSC staff and interested parties. A study to include some or all of these will be completed in time for the 2003 legislative session.

Staff still believes that OHEP needs to perform and submit to the Commission, an evaluation of Program Year 1.

F. Forward Funding Because of the forward funding problem which is caused by the early mismatch between program expenditures and revenue collection, OHEP plans that the EUSP be managed on a cash basis. Specifically, it proposes that excess fees collected in the prior year be used in the following Fiscal Year to begin benefit payments before September

15th. Further, OHEP proposes that all refunds from utilities and “appeal cases” will be charged or credited to the year that the transaction is done. (Plan, Page 11)

The State is apparently not contributing any money to the administration of this program. Adequate financial and human resources should be made available to avoid repeating the forward-funding problem and application backlog of Year 1.

G. Low-Income Weatherization In Year 1, OHEP entered into a MOU with DHCD for the performance of Low-

Income Weatherization. Staff notes that there is no discussion of Year 2 of the Low-

Income Weatherization Program aside from a reference to the “RFP” still being “in process”. Is OHEP going to produce a report of EUSP Year 1 Low-Income

Weatherization Program? Is OHEP going to present a plan to the Commission for Year

14 2? Will and when will this component of the EUSP begin to serve customers this year?

Will services performed differ from Year 1? Staff recommends that the Commission direct OHEP to report on the Low-Income Weatherization Program for Year 1 and the plan for Year 2.

X. Summary of Recommendations

 Staff believes that OHEP’s proposed Year 2 program allocations are questionable and

thus recommends that OHEP be given greater flexibility in moving funds between

program components in Year 2 as program needs become known.

 Staff recommends that the Commission direct OHEP to produce a detailed accounting

of program and administrative expenditures in Year 1.

 Staff recommends that OHEP be directed to report on Year 1, submit supporting data,

and evaluate its program performance.

 Staff recommends that the Commission direct OHEP to submit its proposal of how it

will spend any remaining Year 1 EUSP money as soon as possible.

 Staff recommends that OHEP be directed to provide program specifics of increased

outreach and customer education, especially with respect to budget billing, as they are

developed.

 Staff recommends that the Commission direct OHEP to report on the Low-Income

Weatherization Program for Year 1 and the plan for Year 2.

15 XI. CONCLUSION Overall, Staff believes that the EUSP performance in Year 1 was unsatisfactory.

The late roll-out of program outreach in combination with a multitude of computer system problems resulted in the late pay-out of EUSP benefits. Delays in payments to the utilities and in sending notification of grant information to customers left many customers uncertain of the status of their EUSP assistance. Lack of coordination by OHEP with the utilities during the year also caused many problems. Utilities experienced difficulties matching payments from the Comptroller with the Energy Delivery Statements (EDSs) of certified EUSP applicants, further delaying the crediting of bill payment assistance to customer accounts. This, coupled with the late pay-out of benefits, created an unnecessary burden on EUSP and MEAP eligible customers. The Commission was forced to institute a proceeding, hold emergency hearings, and grant a moratorium on terminations. Low-income weatherization got such a late start under the MOU with the

DHCD that customers who did receive services, did not receive them in time to reduce their heating bills in a year of unusually high heating costs.

As a consequence of double-payments made by OHEP to the utilities, and which the utilities were forced to sort out, close-out accounting for Year 1 has occurred too late to allow a smooth transition into Year 2. It is clear that EUSP customers will again receive their benefits late. Year 2 benefits cannot be credited to customer accounts until utilities are able to close their Year 1 accounts.

In general, Staff believes that OHEP is not proposing a Year 2 plan that will sufficiently exceed the poor program performance of Year 1. The OHEP proposal to stagger the mailing and intake of applications over a longer period of time will again result in late pay-out and crediting of EUSP benefits to eligible customers. We are

16 already well into October and no EUSP Year 2 benefits have been realized by customers.

Computer problems must be resolved. The State is apparently not contributing any money to the administration of this State program. Adequate financial and human resources must be made available to avoid repeating the forward-funding problem and application backlog of Year 1. The EUSP close-out process must occur earlier in Year 2.

Staff believes that OHEP’s proposed Year 2 program allocations are questionable and thus recommends that OHEP be given greater flexibility in moving funds between program components in Year 2 as program needs become known. While OHEP proposes to increase outreach and customer education, we have seen nothing specific upon which to predict increased customer interest in EUSP or, to budget billing. OHEP also seems bogged down in an uncertain low-income weatherization RFP process, leading us to conclude that there will be no improvement over last year in services rendered.

17 Attachment A

Staff’s September 28, 2001 Data Request to Utilities:

TO ALL ELECTRIC, AND GAS AND ELECTRIC UTILITIES PARTICIPATING IN THE ELECTRIC UNIVERSAL SERVICE PROGRAM (“EUSP”)

The following information is requested by the Commission Staff in preparation for the Commission’s December report to the General Assembly on Year One of the Electric Universal Service Program (EUSP). The requested data pertains to the July 1, 2000 through June 30, 2001 billing months. Where data is requested by poverty level, the reported data should be disaggregated according to the poverty levels used by the Department of Human Resources to establish income eligibility for EUSP assistance and Maryland Energy Assistance Program ("MEAP") Grants. All utilities are requested to furnish the above data to Staff by no later than October 10, 2000. Data may be faxed to Aurora Watson at (410) 333-6086. Please call Aurora Watson at (410) 767-8003 or Calvin Timmerman at (410) 767-8058 if you have any questions concerning this request. Municipally-owned utilities and/or electric utilities with fewer than 5,000 residential customers shall report only the information requested in Section D below.

A. With regard to EUSP participants, you are asked to provide the following information by poverty level: 1. The number of customers who enrolled in the EUSP program prior to the end of the June 2001 billing cycle. (This number should include any customers who successfully enrolled in EUSP even if the customer was later dropped from or otherwise left the program.)

2. The average EUSP bill assistance benefit payable to the utility at the time of enrollment. 3. The number of EUSP customers prior to the end of the June 2001 billing cycle who received an arrearage retirement benefit. (This number should include any customers who successfully enrolled in EUSP even if the customer was later dropped from or otherwise left the program.) 4. The average EUSP arrearage retirement benefit payable to the utility at the time of enrollment. 5. The number of EUSP customers in electricity service arrears as of the end of June 2001.

18 6. For those customers in arrears, the average dollar amount of the electricity service arrearage in (5). 7. The average monthly electricity payment obligation, excluding gas service and gas supplemental payments in effect as of the June 2001 billing cycle. 8. The number of EUSP customers making monthly electric supplemental payments to the utility pursuant to COMAR 20.31.01.08 as of the end of the June 2001 billing cycle. 9. The average dollar amount of the monthly electric supplemental payments in (8) above. 10. The average dollar amount of the electric service arrearage on which (9) above is based. 11. The number of EUSP bill payment assistance customers whose electric utility service was actually terminated during the billing months of July 1, 2000 through June 30, 2001. 12. The number of EUSP customers who received a Maryland Energy Assistance Program (MEAP) grant payable to the utility. 13. The average Maryland Energy Assistance Program (MEAP) grant payable to the utility at the time of enrollment. 14. The number of customers whose primary space-heating source is the electric service provided by the responding utility. 15. If applicable, the number of EUSP participants whose primary space heating source is natural gas service provided by the responding utility. 16. If applicable, the number of EUSP customers with gas service arrearages as of the end of June 2001. 17. If applicable, for those customers with gas arrearages, the average dollar amount of the gas service arrearage in (16). 18. If applicable, the number of customers making monthly gas supplemental payments to the utility pursuant to COMAR 20.31.01.08 as of the end of the June 2001 billing cycle. 19. If applicable, the average dollar amount of the monthly gas supplemental payments in (3) above.

19 B. With regard to customers who received a Maryland Energy Assistance Program (MEAP) grant but did not participate in EUSP bill assistance, please provide the following data by poverty level. 1. The number of MEAP non-EUSP customers as of the end of the June 2001 billing cycle. 2. The number of electric customers who are in electricity service arrears as of the end of the June 2001 billing cycle. 3. The average dollar amount of the arrearage referred to in (2). 4. The number of customers whose utility service was actually terminated during the 12 billing months of July 1, 2000 through June 2001. 5. The number of customers whose primary heat source is the electric service provided by the responding utility. 6. The average monthly cost of actual usage for the 12 billing months of July 1, 2000 through June 2001.

C. With regard to non-MEAP-eligible, non-EUSP residential customers, please provide the following data: 1. The number of electric customers as of the end of the June 2001 billing cycle. 2. The number of electric customers who have electric service arrears as of the end of the June 2001 billing cycle. 3. The average dollar value of the electric service arrearages in (3). 4. The number of electric customers whose electricity service was actually terminated during the 12 billing months of July 1, 2000 through June 2001. 5. The number of electric customers whose primary heat source is the electric service provided by the responding utility. D. Municipal utilities and/or electric utilities with fewer than 5,000 residential customers are requested to provide the following information as specified in Sections A, B, and C above. (Responses to any additional items are at the utility's discretion.)

Section A - Items 1, 3, 5, 8, 11, 12 Section B - Items 1, 2, 4 Section C - Items 1, 2, 4

20 Attachment B

Questions Submitted to OHEP August 15, 2001:

1. When will customers begin receiving Year Two bill assistance benefits (and arrearage retirement if you are seeing customers with pre July 1, 2000 arrearages that you haven't seen before)?

2. When do you anticipate your final Year One close-out accounting will be completed so we can work on resetting the universal service customer charge?

3. When will you finalize how you are going to spend out any remaining Year One money?

4. When you will be able to report your actual EUSP administrative costs for the first year?

5. When will the weatherization RFP will be issued and when will Year Two weatherization services begin?

6. When will your systems work be completed or what the timeline is for systems work this year?

Staff’s October 1, 2001 Data Request to OHEP:

1. With respect to the section regarding Goals (p. 4), please answer the following questions: a. What are the specific education and self-help strategies that are being used, or will be used, to encourage payment of bills? Will OHEP provide any staff training, or produce written education materials? b. What are the focused programs “using available resources, case management and holistic approaches to resolve chronic electric cost issues”? Are these programs provided by LAAs? Who administers them and who receives the services? What are the services? c. What steps or programs are being used, or will be used, to increase participant awareness of “energy efficiency/conservation”? Are these being provided by LAA staff? Will the programs include workshops and written educational materials? Or is this part of the Weatherization IFB?

2. With respect to the Program Summary (p. 5), please respond to the following questions:

21 a. Please provide a breakdown of administration costs. Do the weatherization grants of $2,152 include administrative expenses? b. Please provide information about the weatherization program. Please include the following in your response:

 Who received services?  How were they prioritized?  What actual services did they receive?  Since these services took the place of WAP services that were not provided, are the WAP services that were not carried out last year going to be performed this year?  Is there an evaluation system in place to determine whether the weatherization services provided will maintain reduced usage over time, and thus reduce the overall electric bill?

3. Proposed Operations for FY2002

Observation 1.

The report states that “it is generally believed that the majority of customers with arrearages covered under this component…have had those arrearages retired during FY2001”

a. What is the county/city specific data on customers who applied for arrears assistance and were denied arrears assistance? b. What percentage of the EUSP applications certified for Program Year One include pre-July 1, 2000 arrearages? c. Does OHEP have records of the denials? d. What were the bases for denial of such assistance? e. Did these customers ever receive EUSP bill assistance? Did they ever receive MEAP assistance?

Observation 2.

An RFP is “in process”.

a. Is it an RFP or an IFB? b. Please explain what “in process” means? c. When will it be issued? d. How can $3.5 million be spent in 6-8 months (or less)? e. Has OHEP received any data or reports from DHCD about the weatherization program last year?

22 f. Is there a list of accounts backlogged from last year of customers who are to receive weatherization services? If so, is this information available by jurisdiction or utility region? How are customers prioritized? g. Will OHEP be getting a report or data from DHCD? When?

Needs Assessment

There is a reference to “increased and targeted outreach.”

a. Is there an actual plan? What is it? b. What outreach will be done by the LAAs? c. What outreach assistance will OHEP provide statewide?

There is a reference to mandatory budget billing as a reason for the lower number of EUSP applications (p. 6).

a. Do any of the LAAs have any data to support this conclusion? (for example, numbers of people who refused EUSP Bill Assistance due to budget billing; the number who later rejected Bill Assistance for this reason; or any other records)? Please provide any available supporting data. b. Is there any data on the reasons for rejection of budget billing? If so, please provide it.

Program Year

Observation 3 and Resolution: OHEP recommends an 11 month program year, from July through May, with subsequent year benefits to be paid in August.

a. Why is there a need for a two month lag time in actual payments?

b. What else needs to be done to ensure that the subsequent year benefits are available more quickly? Are there any other impediments to this?

Benefit Levels and Payment

Bill Assistance Benefit Matrix

a. Is this matrix being used now for Year 2? b. If not, how are benefits being calculated? c. How does the matrix meet the 4% design goal mentioned on page 8? d. Has or can OHEP calculate the percentage of the bill that will be covered if the customer receives both MEAP and EUSP?

Arrearage Retirement Assistance

Is page 8 of OHEP’s filing correctly stated? In other words:

23 a. Is it the off-service customer whose arrearage retirement benefit you have capped at $2000 or the on-service customer? b. And conversely, is it the off-service or the on-service customer whose pre-July 1, 2000 is completely retired?

Observation 4 -- Public Housing and Outreach.

a. What is the increased and targeted outreach for public housing? b. Has it started? If not, when will it start? c. Will it build on the PSC/OPC/advocate outreach conducted last spring?

Observation 5 and Resolution 5: Backlog of data entry

Resolution 5

a. “Fix the computer system”: Is there more specific information about the “fixes?”; do you have any data on application information input to date by the LAAs?

b. “Stagger the initial mailing”: While this makes sense from an administrative perspective, the delay in mailing and thus submitting the application impacts the date of receipt of the benefit, and the resultant decrease in the monthly bill payment. How much of a delay is being contemplated?

c. To whom are the applications being mailed? What are the individual LAA plans?

d. Will OHEP have staff available and trained to perform input for the LAA’s? What will be the guidelines for putting this action plan into implementation? How long will it take to implement this plan

e. Contingency plan to process applications:

It appeared that there was a backlog, or delay, in taking of crisis applications in certain LAA areas, including Baltimore City, last year. Additionally, there were significant problems with telephone access. Does OHEP have contingency plans to provide for additional intake staff or additional phone lines if these problems recur this year?

Observation 6: Timeliness and accuracy of payment processing

a. What are the specific changes being implemented, in addition to the examples listed in the report?

b. Can OHEP better coordinate in Year 2 the EDS and check that both need to be received by the utility before benefits can be credited to a customer’s account? If so, how?

24 Observation 7: Notice of benefits

a. When will EUSP Year One applicants receive Notice of (1) grant, or (2) denial, of benefits as required in DHR’s regulations? Does this include the denial of arrears benefits and the reasons?

b. Have EUSP Year Two applicants who are not eligible, started to receive notice of denial of benefits? If not, when will that start?

c. When will EUSP Year Two applicants who receive a grant for benefits receive their notice? Will the 10 day notice start immediately?

Observation 8: kWh usage information

a. Has OHEP collected the information from the applications on HH size, and kWH usage that can be reported for each Level? If not, does OHEP plan to do this? If not for Year One, for Year Two? Does OHEP have any information about the housing stock?

b. Does OHEP plan to work with other parties on conservation issues as part of its training of LAA staff? Is any coordination planned with City/County housing inspectors and other programs?

c. What type of plan does OHEP have in mind to work with utilities to develop written material? Will OHEP or utilities send letters? The utilities should be more involved in these activities because utilities also need to communicate with these same customers.

Observation 9: Budget billing

a. See questions for “Observation 8” above. Does OHEP have any data on responses of elderly applicants in different service areas as to why they have refused bill payment assistance benefits and/or budget billing?

b. Does OHEP have training materials or scripts for the intake workers on this issue? Can they be shared?

c. Is there any way that surveys or focus groups or other methods could be used to develop better information on this customer reaction?

25 d. Can benefit commitments be delivered less piece meal to the utilities in Year 2 – e.g., a consolidated benefit amount would eliminate the need to repeatedly reduce the customer’s monthly payment amount?

e. What is OHEP’s proposal to address customers objection to paying a minimum amount when they know the benefit payment is larger than the amount shown due on their bills?

Observation 10: EUSP recipients who are turned off

a. Does OHEP have data on these EUSP recipients? For example, dates of applications; dates of EDS or other verification to the utility; dates of payment? Do we need to put together data from OHEP and the utilities on these customers? Does OHEP have data from the utilities on subsequent payment history, arrears and shut- offs, other than the information filed by the utility in PSC Case No. 8880?

b. When does OHEP expect the strategy to be developed? Can it be shared?

Observation 11 and Resolution:

a. Does OHEP have a start date for the consultant? Will the consultant assist OHEP with data collection; identification of specific goals and objectives for which data collection is needed; and performance evaluation measures?

Observation 12 and Resolution:

Please provide more explanation of the “cash basis” proposal. With this type of proposal, could customers be placed upon customer-specific anniversary dates for receipt of EUSP benefits?

Attachment 5:

The chart shows a significant percentage of Baltimore City applicants who were denied arrearage benefits (approximately 25%). Is there any data or information (e.g., as part of the notice of denial of benefits) that explains this percentage? Montgomery County and PG County arrears denials are also high. Is there any data or information regarding the high denial rates for Montgomery County/ PG County for both bill assistance and arrears, and the reasons for the denial – for example, are the denials based on income ineligibility, or other factors?

Additional Questions

1. Please provide any reports or data on dates of application vs. date of certification and date of payment? For example, “x customers were certified in (a) 10 days or less; (b) 11-30 days; (c) 31-60 days ”, etc. Can you provide this data? If not, what about next year?

26 2. Please provide data or reports on number of Level I, II, and III customers, per LAA and/or per utility, who applied for benefits; who received benefits? Can this data be provided this year? If not, what about next year?

3. Please provide any data or reports on (a) number of MEAP plus EUSP customers; (b) MEAP only; (c) EUSP only? By service territory or LAA?

4. Please provide any data or reports on average income, average KwH consumption and average benefits per benefit level?

5. Does OHEP have information about how each utility is calculating the “budget billing” or “even monthly payment amount”? For example, what is the start date and end date for the 12 months of estimated energy usage? Does the 12 months (or less) end as of June 30 of each program year, or does the budget bill roll forward into a new program year? Is the start date on July 1 of the program year, despite the application date, or is it some other date? If this information is not known, should clarification be sought for education and other purposes?

6. Please provide any data or reports on income sources for EUSP recipients?

7. Please provide any data on how many EUSP customers received weatherization benefits last year?

8. Are any of the LAAs or OHEP aware of any Year One EUSP applicants who applied for and were eligible for benefits, but have not yet had payments made to the utilities? If so, please provide the data, and explain when these benefits will be paid.