Wednesday, February 4, 2015 by Jo Clifton

Robbins working to fix AE assistance program

Consumer advocate Paul Robbins is visiting City Council members this week in an attempt to explain to them the problems with the Austin Energy Customer Assistance Program, known as CAP.

The program, which was designed to help economically disadvantaged electric customers with their bills, is currently helping the disadvantaged, but also perhaps as many as 1,100 customers who are not disadvantaged, according to Robbins’ calculations.

Robbins explained that the problem is specifically related to the way Austin Energy automatically enrolls people in CAP if anyone in the household is part of another special assistance program, such as food stamps, the low-income children’s health insurance program or Medicaid. A person can also qualify if his or her income is verified to be at or below a certain level.

Robbins, a longtime consumer advocate and frequent utility critic, has studied customer assistance programs in the top 10 public utilities around the nation. Seven of those utilities offer an enrollment method for people within certain income guidelines. Long Island Power Authority offers assistance to people who participate in one of eight social welfare programs, but the electric bill must be in the name of the recipient of that benefit. Five of the utilities require income verification.

Only Austin Energy does not, according to Robbins’ research. Austin Energy spokesman Robert Cullick said the utility did not recommend this method of qualifying people without checking their incomes. However, that is what Council voted for in 2012.

The other three utilities in the top 10 require income verification but have a different system, and fund their programs with voluntary donations.

“Austin is unique as far as I can tell in that we have very loose guidelines and they are pulling in people that do not qualify,” Robbins said. “I found 1,131 customers with homes valued at over $300,000 … a few of them were in a gentrified neighborhood, but these people by and large did not deserve to get that money.”

Cullick said, “We’ve taken a serious look at analyzing the problem, and we are definitely working on fixes.” He said the utility believes there are approximately 660 people “who are in the category (where) we wonder why they’re getting a discount.”

That is not to say those people are not qualified under the current rules. However, Cullick said, “We don’t look at the value of the land, just value of the house. We don’t want to disqualify people who are living in a gentrifying area,” he said. If the house is valued at $250,000 or more, it raises a question about the customer’s need for help in paying the electric bill.

Austin’s Electric Utility Commission last week approved a resolution asking Council to do something about the problem. The resolution notes that when CAP was revised in 2012 and the automatic enrollment method was adopted, the result was inclusion of “hundreds of customers who are not economically disadvantaged … and have not requested or chosen to be included.”

The commission urged Council “to make immediate short-term changes to CAP so that money can reach its intended constituents.” In addition, it said that Council should develop a new plan for permanent changes to the program for the next budget cycle.

Mayor Steve Adler, who was running for office when the problem surfaced in December, told the Monitor, “Yes, I think that it’s important that programs that are designed to assist people in need actually assist people in need … and if we have programs that are not doing that,” then Council should address the problem.

Robbins has produced a list of people who own property valued at $1 million or more yet are participants in the program. When he contacted several of those customers, they told him that they were unaware they were getting a discount.

Some of those people did not wish to receive the benefit and asked to have their names removed from the list. Although the computer program that selects customers for CAP would routinely put such names back on the list, Austin Energy has managed to fix that particular problem.

However, that does not mean that everyone living in a million-dollar house who is receiving the benefit of the program wants to be removed. That problem has not been fixed. Cullick said that not a lot of people, when notified, wanted to be removed from the program, even though they do not appear to have the economic need.

When Cullick was asked why the utility did not simply remove people from the CAP list if they obviously didn’t need to be on it, he said, “We can’t. We’re guided by City Council policy that’s been discussed and adopted by the Council. Austin Energy is not empowered to change that.”

Mayor Pro Tem Kathie Tovo, the only current member of Council who was on the previous Council, said, “We’ve asked staff, and they are in the process of putting together some fixes. It’s not clear to me looking at some of the examples Paul Robbins has provided why some of those households qualified for the CAP.

“I’m very committed to figuring out what type of changes are needed,” Tovo continued, “but I assume that is one of the things Austin Energy is doing, is looking at those cases and making sure that households like that do not get enrolled in the future. And then we need to have a policy discussion” about whether the whole family should qualify if only one member is eligible.

Austin Energy is currently serving about 45,000 people in CAP. The utility believed the program should be expanded, Cullick said, but perhaps not this much. The cost of the program to the utility is now about $12 million per year, which Cullick said is about $2 million more than it can annually afford and therefore is not sustainable. The utility has between four and eight employees working to qualify people, the same number it had when there were only 10,000 people in the program.

Cullick said there are currently about 2,000 people on the waiting list for CAP. But they can’t get into the program until someone else leaves it.

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.

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