Electricity is an essential part of our everyday lives, yet for some people, it can be out of reach due to cost. Public power utilities support customers in their service territories through partnerships and by offering assistance to promote equitable access to electricity.
Reducing the burden
Sacramento, California was hit hard by the recession in 2009. Thirty-six percent of the Sacramento Municipal Utility District’s customers are considered low-income, and the disparity gap has grown exponentially over the last 10 years.
Every year, SMUD looks at its budget, programs, projects, and initiatives to make sure value is being delivered to its 1.5 million customers fairly and equitably. Currently, 75,000 customers are enrolled in SMUD’s Energy Assistance Program Rate, for which SMUD annually budgets between $30 and $35 million.
The EAPR program offers a discount to customers at 200% of the federal poverty level or lower. However, a recent analysis of the program showed that enrolled customers still struggled to pay their bills.
“What we found was customers on the lower end of the poverty level were unduly burdened; they had a higher electric bill burden than customers on the higher end, not to mention most of their homes were not energy efficient,” said Kim Rikalo, one of SMUD’s managers of customer delivery. “So that made us ask the question, ‘Is what we’re doing enough?’”
In response, SMUD began a three-year restructuring of EAPR. The changes include increasing the EAPR discount for those in the lowest ranges of the federal poverty levels (0%-100%), and decreasing the discount for those in the upper ranges (101% to 200%).. For example, the discount for customers below 50% of the poverty level will rise to $70 by 2021, which is up from $50 they received in 2019. Customers closer to 200% of the poverty level will see the discount decrease from $30 to $10.
Initially, SMUD planned on deploying the new rates in one year. However, it reviewed the strategy with partners in its community — including other non-profits, non-governmental organizations, business and ethnic chambers, and charities — and they recommended a three-year transition period. Deploying the program over three years gives SMUD the time necessary to reach out to the customers who would be receiving a lower discount. In the meantime, the public power utility can focus on helping those customers learn about energy-efficiency bundles and energy-efficient upgrades to reduce their electric burdens and gain more control over their bills.
“For the low-income population, control is a critical aspect,” Rikalo said. “Most, if not all, of the industry’s studies indicate that customers feel like they don’t have control over their electric bills, so the more we can help with this, the more we bridge the gap.”
To help low-income customers in its service territory, Tacoma Public Utilities offers a 30% discount for customers who are 62 years of age or older and for customers receiving disability income. The utility also recently began providing a Bill Credit Assistance Plan, which is a 20% credit applied to enrolled customers’ accounts each time their bills are paid in full and on time. Both programs are designed for customers with income levels up to 150% of the federal poverty level.
So far, more than 6,000 customers receive the discount rate and more than 2,000 customers participate in BCAP. TPU budgets $3.2 million biannually for BCAP and provided $2.5 million for the rate discount from January to October 2019.
Before creating BCAP, TPU offered an assistance program that gave customers a lump sum of money. The utility realized the program provided only short-term relief — many customers found themselves needing assistance again just two to three months later.
“Through BCAP, the discount rate is lower than the previous program on average, but customers have been more successful in paying bills on a regular basis,” said Francine Artis, TPU’s customer services assistant manager of customer solutions. “Twenty percent of people who received the lump sum amount of money were back in crisis again.”
Partnering with community organizations is an essential component in TPU’s programs for low-income customers. It partnered with the United Way of Pierce County’s Center for Strong Families, which provides financial planning assistance to underserved communities. All customers enrolled in BCAP who complete financial training through the United Way are eligible to receive up to a $160 credit on their utility accounts.
“We’re trying to put people in a position to better manage their utility bills,” said Steve Hatcher, TPU’s customer services manager. As of October 2019, more than 50 households had participated in the financial education credit program.
Meeting customers where they are
SMUD’s team also works closely with its community to institute multi-year partnerships with organizations in underserved communities.
“Collaboration is very important because we are a customer-owned utility, so we need to be good stewards of the dollars customers put into the program,” said Jose Bodipo-Memba, director of SMUD’s Sustainable Communities programs. “If we can improve the environment and the economy, as well as mobility and access to social services, it makes our community a more desirable place to live, which results in more customers with a higher quality of life.”
Employees go to meetings and events held by local non-profits to educate community members about programs such as EAPR, but community partnerships don’t end with education. For example, SMUD provided new HVAC systems to two of the buildings owned by City of Refuge Sacramento, which aims to help people living in marginalized communities in the city and operates two safe houses. SMUD also donated $50,000 and a service day to an organization working to improve the city’s housing opportunities for low income and formerly homeless residents. The partnership resulted in the interior renovation of 40 units, provision of new lighting and appliances, painting of the entire complex, construction of a playground, and landscaping beautification.
“We’re trying to find out how to leverage existing nonprofits so they can reach more of our at-risk customers to maximize our impact to the fullest extent,” Bodipo-Memba said.
TPU takes a similar approach, holding an annual event with community partners to make sure they’re all up to date with information on the utility’s programs and services. After the event, those organizations can distribute information among the community members they serve.
“We pride ourselves on approaching this at a holistic level,” Artis said. “If a customer can’t pay his or her utility bill, we look at why. Are they unemployed? Is their house inefficient? Is their usage high? We invest millions of dollars in our low-income weatherization program that helps customers lower their bills.”
TPU works with property managers of low-income housing developments to do onsite enrollment for utility programs. Residents are notified about events in advance so they can be prepared to ask utility employees about their bills and enroll in assistance programs.
“We’re willing to go where the customers are instead of waiting for them to come to us,” Hatcher said. “We will be going mobile shortly by purchasing a vehicle that can go to areas where our customers are. A lot of our customers are busy, working multiple jobs, and they can’t always show up when the office is open.”
The utility also works with school districts, the Tacoma Housing Authority, ethnic organizations, and the Department of Corrections. TPU’s team attends as many community events as possible to spread information.
“We see a great deal of value in partnering with community organizations to help us serve our customers,” Hatcher said. “Many of us are serving the same customers for different reasons.”
Having a team dedicated to reaching underserved customers is an essential component of these programs for TPU and SMUD. TPU team members go to conferences and seminars that focus on serving low-income customers for additional training. They never use the term “low-income” with customers to avoid making them feel stigmatized.
Many employees on SMUD’s team are multilingual. TPU provides materials in English, Spanish, Vietnamese, Russian, Cambodian and Korean.
“We want to make sure people working with these customers can empathize and develop relationships,” Hatcher said. “Some customers are very reluctant to ask for assistance or intimidated by government organizations. When a customer comes to the office, the response of our team members is very important. If it’s a good experience, then word of mouth will go out very quickly.”
With all assistance programs, utilities have an obligation to ensure funds are being used appropriately and not being taken advantage of by ineligible customers. Customers are required to requalify every two years to participate in TPU’s programs. SMUD customers are required to fill out an application (which can be done in print or online) and provide income documentation for all adults in the household.
TPU also offers payment arrangements, budget billings, and participates in pledges from outside agencies for low-income customers.
SMUD also offers a variety of payment arrangements for all customers and an EnergyHELP program that answers immediate needs for customers in crisis. It’s also working on creating a community priorities sensitivity map to help identify residents’ needs by sector, which will help the utility better invest in education, the environment, transportation, and safety. To help moderate-income customers, SMUD is on track to deliver a program that will offer rebates on affordable appliances.
“We’re a partner in our community, not just a company; most of us live here, too. Offering assistance allows us to be part of the solution rather than part of the situation in which people become homeless because they can’t pay their bills,” Artis said. “We try to embrace the community and let them know we care, which is part of providing a service. Utilities like heat and water are not optional — they are parts of life that need to be affordably available to everyone.”