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Auditors find few faults with utility bill assistance program

Monday, February 28, 2022 by Jo Clifton

Austin Energy, which manages billings for city utility customers, provides reduced utility bills for more than 35,000 electric, water and wastewater customers with low incomes.

The Customer Assistance Program offers discounts that average about $650 a year for residential customers who participate in a variety of programs, including Medicaid, food stamps, the Children’s Health Insurance Program and five others. Customers may also qualify for a discount if their household income is less than 200 percent of the federal poverty level, which would be $53,000 for a family of four. Customers who own more than one home or whose home, not including the land, is valued at $250,000 or more must go through additional screening to qualify for the program.

Last summer, Mayor Pro Tem Alison Alter, City Council Member Kathie Tovo and Mayor Steve Adler asked City Auditor Corrie Stokes to look into whether the utility was appropriately screening customers receiving assistance.

A team from the city auditor’s office found that Austin Energy correctly determined the eligibility of most customers. However, auditors noted that the utility “did not conduct a secondary check of the incomes of 29 customers, roughly 23 percent of our sample, when they should have.” Auditors said those customers may or may not have been eligible for the discount.

Consumer advocate Paul Robbins has been asking for years whether all of the customers benefiting from the Customer Assistance Program are actually eligible for assistance and has provided data showing not all of them should be receiving assistance. The utility currently has 454,616 residential customers plus about 50,000 commercial customers and 116 industrial customers. The audit team looked at 124 customers, whose names and addresses were provided by Robbins, who had received the discount on their utility bills over the last three years.

Robbins has checked into whether residential water utility customers own multiple properties or if their residence has been valued at more than $250,000. In 2017, Robbins said he found more than 500 customers receiving discounts on their drainage and water bills who either owned multiple properties or had properties with improvement values of more than $250,000. He reiterated his concerns several times after that and officially filed a complaint with the Office of the City Auditor in January 2021. He told the Austin Monitor he had tried to work with Austin Energy to get the utility to do better screening prior to making the complaint to no avail.

Austin Energy General Manager Jackie Sargent responded to the report with a memo explaining how the utility has increased income verification by adding a third-party vendor to check customers’ eligibility. She stated that the extra screening started in June 2021. In her memo, Sargent explained that the utility established a secondary screening process in 2017. “When the screening was conducted manually, customers received CAP discounts until a secondary income verification was completed. The goal was to complete the secondary verification within 90 days. Still, customers were also given flexibility when they had difficulty producing documents or needed additional wraparound social services to help.” She said the utility removed 25 of those 29 customers from the program and could explain the other four.

Sargent added that “starting in June 2021, customers eligible for CAP participation are screened by a third-party vendor against county property tax records before CAP discounts are applied. Applicants who meet the requirement for secondary income verification must complete the process before receiving CAP discounts.”

Robbins, who believes that the utility would not have changed its process but for his complaints, remains unhappy with automatic enrollment, noting that even a renter could have millions of dollars of income, or other items of value. He believes that the utility’s failure to do a stringent review of applicants’ assets and income is simply laziness on its part.

But Sargent wrote, “Austin Energy is confident that COA Utilities assistance eligibility and enrollment practices strike the right balance between stringent, industry-best standards and removing barriers to participation for those in need.” The utility notes that the vast majority of customers receiving assistance on their bills are renters.

Tovo and Alter, who requested the special report, seemed to agree. Alter told the Monitor via email that Council members and the mayor “requested this report to address concerns raised by a consumer advocate who spoke to the Council about the possibility that CAP funding was being directed to ineligible households. The Customer Assistance Program, a safety net program, is structured to reduce barriers by using an automatic enrollment process and includes procedures to prevent ineligible participation. The CAP now serves over 35,000 households. I believe this report and the related discussions provided a useful opportunity for us to revisit the enrollment process and related controls for the CAP. The report, in my view, suggests that Austin Energy has reasonable protocols in place that balance the need to prove eligibility with the need to facilitate participation in this safety net program.”

Tovo, Council’s longest-serving current member, said she and others originally advocated for automatic enrollment in CAP after a person qualified for one of the social safety net programs through federal qualification. However, over the years policies and procedures have changed, and she believes Robbins “has pointed out important gaps” in the utility’s methods. She added that while she was glad he had “put time and energy into evaluating” the program, she still thinks that automatic enrollment is appropriate for the CAP program.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here. This story has been changed since publication to clarify Tovo’s motivation for backing automatic enrollment.

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