Monday, January 28, 2019 by Jack Craver

Austin Energy considers scams, rising home values in changes to assistance programs

The city-owned electric utility Austin Energy has been a national leader over the past 30 years in helping customers lower their electric bills through energy efficiency programs.

In addition to helping customers of all income levels cut costs by reducing their energy consumption, AE provides discounted rates to low-income customers and has programs in place to provide relief to customers who miss bill payments.

Austin Energy’s Debbie Kimberly, who oversees the utility’s energy efficiency programs, described the impact of the programs for members of the Regional Affordability Committee, a panel composed of elected officials representing 10 different jurisdictions, including the city of Austin, Travis County, Williamson County, Austin Community College, Central Health and five area school districts.

Customers dealing with a temporary financial crisis who need short-term relief on electric bills can apply for help from the utility’s $2.1 million emergency fund. For instance, furloughed federal workers, who at the time of the hearing had been working without pay for weeks, are eligible to apply for assistance from the fund.

Austin Energy also has $1 million a year set aside for an arrearage program that helps customers set up payment plans to pay off unpaid bills. Above all else, the utility does not want to shut off anyone’s power.

AE has two weatherization programs – one for single-family homes and one for apartment complexes – aimed at insulating the living spaces of low-income customers to help them reduce their energy bills.

“All of those things are really considered industry-leading,” said Kimberly, describing the various programs.

Austin residents have some of the lowest average electric bills in Texas due to the utility’s focus on energy efficiency and the progressive rate structure, which encourages conservation.

Kimberly said the utility is exploring changing eligibility requirements for the single-family program. Customers are currently eligible if their household income is below 200 percent of the federal poverty level, their home is smaller than 2,000 square feet, and the value of the structure – not including the land value – is under $250,000.

Due to rapidly rising land values, the value of the structure (or “improvement value”) is often only about one-third of the total value of the property, meaning it’s very possible that a property with an improvement value of $250,000 would list for well above $700,000. However, as is often pointed out in City Hall debates, there are significant numbers of people, particularly seniors, who are far from wealthy yet now find themselves living in very expensive homes due to Austin’s booming real estate market.

The utility is considering extending eligibility to those whose homes’ improvement values are up to $300,000.

These days in Austin, Kimberly noted, “$250,000 won’t buy you much.”

Mayor Pro Tem Delia Garza, who chairs the committee, pushed back. There are still many homes in her Southeast Austin district whose total property value is under $250,000, she pointed out. There are likely very few homes in the district whose improvement value exceeds that figure.

The problem with looking at average or median home prices in determining eligibility for a low-income assistance program, said Garza, is that those figures are “greatly skewed” by a recent influx of homes worth millions.

The utility is also considering raising the square footage threshold from 2,000 to 2,500 square feet. Kimberly said she didn’t know of any other utility that imposed a square footage requirement on weatherization programs.

Many eligible customers choose not to participate in the free program, despite the utility’s repeated outreach attempts, Kimberly said. Scammers who have targeted residents by posing as Austin Energy technicians, either by phone or in person, have likely made people even more reluctant to accept offers of assistance. In some cases, fraudsters are even able to make it appear that their phone call is coming from the utility’s number. “It’s terrible and they’re very smart,” said Kimberly. As a result the utility has stressed that it does not send techs door to door, and instead, sends letters on AE letterhead requesting that residents make appointments.

Travis County Commissioner Jeff Travillion suggested that the utility seek out churches, which can serve as a trusted intermediary for many customers.

As for the multifamily properties, AE is considering contracting with a firm to oversee outreach for the program both to encourage property owners to take part and to recruit and oversee weatherization contractors to do the work.

The utility will continue to take a hard stance against including properties that are on the Code Department’s “repeat offenders” list for code violations. At least one weatherization contractor has criticized that policy as penalizing tenants for the faults of their landlords, since it’s the tenants, not the landlords, who save money as a result of weatherization.

Kimberly acknowledged that argument, saying the utility has to strike a “tenuous balance” in dealing with properties that may have code violations. However, she points out that weatherizing certain properties can pose a safety concern. “It is imperative that we say that we cannot blow insulation into this attic because there’s a combustible issue in that attic,” she said. “We owe that to our customers.”

Photo by dunktanktechnician made available through a Creative Commons license.

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Key Players & Topics In This Article

Austin City Council Regional Affordability Committee: A committee composed of City Council Members, Travis County Commissioners, CapMetro, the Central Board of Health and regional school districts to assess the Austin area’s affordability.

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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