20040621Ottens Direct.pdf

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Brad M. Purdy
Attorney at Law
Bar No. 3472
2019 N. 17th St.
Boise, ID. 83702
[phone]
FAX: [phone]
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Attorney for Petitioner
Community Action Partnership
Association of Idaho
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JEL jr:U i iLI/leJ CUt'lt'lISSJON
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION11 OF VISTA CORPORATION FOR THE
12 AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC AND
13 NATURAL GAS SERVICE TO ELECTRIC
AND NATURAL GAS CUSTOMERS IN THE14 STATE OF IDAHO.
CASE NOS. AVU-04-
VU -04-
COMMUNITY ACTION PARTNERSHIP ASSOCIATION OF IDAHO
DIRECT TESTIMONY OF
TERI OTTENS
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I. INTRODUCTION
Please state your name and business address.
My name is Teri Ottens. I am the Executive Director of the Community Action
Partnership Association of Idaho headquartered at 600 N. Curtis, Suite 175 , Boise, Idaho, 83706.
On whose behalf are you testifying in this proceeding?
The Community Action Partnership Association of Idaho ("CAPAI") Board of Directors
asked me to present the views of an expert on, and advocate for, low income customers of
VISTA on behalf of CAP AI. CAP AI's participation in this proceeding reflects our
organization s view that low income people are an important part of A VISTA's customer base
and that these customers may be uniquely impacted by the proposed rate increase. Specifically,
CAP AI recommends that the Commission order an increased level of funding for A VISTA's low
income weatherization program, as well as program design changes.
CAP AI is an association of Idaho s six Community Action Partnerships, the Idaho
Migrant Council and the Canyon County Organization on Aging, Weatherization and Human
Services, all dedicated to promoting self-sufficiency through removing the causes and conditions
of poverty in Idaho s communities.
Community Action Partnerships ("CAPs ) are private, nonprofit organizations that fight
poverty. Each CAP has a designated service area. Combining all CAPs, every county in Idaho
is served. CAPs design their various programs to meet the unique needs of communities located
within their respective service areas. Not every CAP provides all of the following services, but
all work with people to promote and support increased self-sufficiency. Programs provided by
CAPs include: employment preparation and dispatch, education assistance child care, en1ergency
food, senior independence and support, clothing, home weatherization, energy assistance
affordable housing, health care access, and much more.
Why is CAP AI intervening in this particular case?
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CAP AI is of the belief that general rate cases are appropriate proceedings to address the
vast majority of issues that affect rates, including funding of Demand Side Management
programs. To encourage recognition of the value that low income assistance programs in
particular play in helping our seniors, disabled and low income families to become and to remain
self-sufficient and to seek funding and design of applicable programs that will accomplish these
objectives. In the context of public utilities, these objectives can be furthered through low
income weatherization and energy assistance programs. Without assistance from these
programs, seniors and low income families can experience higher energy costs, pay a higher
proportion of their income for energy and subsequently, fmd themselves in greater danger of
being forced to be a further drain on the welfare assistance system or even into homelessness
and cause A VISTA to incur debt collection costs and bad debt write-offs.
According to discovery responses provided by A VISTA to CAP AI, the Company
currently is carrying an "uncollectible" balance of rougWy $2 million. VISTA mentions that
write-offs have been higher than expected. In addition to the cost of uncollectible accounts, the
Company incurs other costs when its customers cannot afford to pay their bills. These other
costs are associated with arrearages, disconnection, reconnection, personnel and other
administration. By providing a weatherization program to low income customers, the Company
allows those customers to reduce their levels of consumption, and reduce the likelihood of non-
payment of their bills.
What is your relevant experience regarding matters before, or issues involving, this
Commission?
CAP AI has been involved in low income issues, including energy related issues, since
the early 1980s. CAPs have been involved in the distribution of weatherization funding,
implementation of weatherization programs, and Low Income Home Energy Assistance Program
LIHEAP") payments for more than three decades.
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What other relevant involvement or activities have you or your organization been part of?
As the Executive Director of CAP AI, I am the statewide administrator of the federal
Community Service Block Grant, the Emergency Food Assistance Program, the Idaho
Telecommunication Services Assistance Program, the statewide Weatherization program, and in
working with the six Idaho CAPs and Canyon County Organization on Aging in the distribution
of the Low Income Home Energy Assistance and the Weatherization funds. These, and other
service programs administered and/or provided by CAP AI and our CAPs, all deal with the needs
of the low income in Idaho.
Previously, I worked as the Energy Director for the Association of Idaho Cities, working
with 2002 cities and 44 counties to address energy and conservation issues within their
respective jurisdictions. Prior to that, I worked with several local governmental entities in Idaho
Wyoming and California dealing with both low incolne and energy related issues. Exhibit 401 to
my testimony is my curriculum vitae.
Have you previously testified before this Commission?
Yes, CAP AI intervened in the recent Idaho Power Company general rate case (Case No.
IPC- E-03-13) and I testified on behalf of CAP AI in that proceeding in the same capacity in
which I offer this testimony. CAP AI intervened in this proceeding prior to issuance of the fmal
order in the Idaho Power rate case.
II. SUMMARY
Please summarize your testimony?
My testimony will establish the following:
That A VISTA's proposed rate increase would have significant implications for
the Company s low income customers;
That these low income customers are at risk of paying a disproportionate
percentage of their income for a basic need commodity essential to human
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survival, exposing them to potential payment arrears, disconnection of electricity,
and even homelessness;
That there is a significant number of residential customers who are low income
and are in need of assistance in lowering their energy bills through home
weatherization, and other means, and;
That A VIST A's low income weatherization program provides relief to the
Company s impoverished customers as well as system-wide benefits to ratepayers
and shareholders in the form of reduced debt collection costs, arrearages, and
write-offs.
Ill. NEED FOR ASSISTANCE
What defInitions are you using to describe a "low income household" and how many of
these households are located within the service area of AVISTA?
The state of Idaho uses an income defmition to derIDe eligibility for low income
weatherization and energy assistance as 150% of the federal poverty guidelines as established by
the Federal Office of Management and Budget. Exhibit 802 to my testimony provides a chart of
incomes in relation to the poverty level.
Would you please provide the Commission information regarding the state of poverty in
Idaho and, more specifically, within A VISTA's service territory?
Yes. According to the Idaho Department of Commerce, 12% of Idaho s population
based on the 2002 Idaho Census, fall within federal poverty guidelines and 21 % fall within the
state guidelines set at 150% of the federal poverty level. The Idaho Census is a state update of
the Federal 2000 Census figures and is conducted by the Idaho Department of Commerce.
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Specific to A VISTA, the poverty rate in the ten northern counties! is 14.29%, based on Idaho
guidelines, thus, higher than the statewide average by approximately 17%. The 2000 Idaho
Census reveals that those living in poverty are categorized as 8.3% elderly, 13.80/0 children, 8.
all other families, 35.3% single mothers and 34% all others.
Do you have relevant information based on numbers of low income households?
Yes, according the AVISTA's response to CAPAI's discovery request there are 106 515
total electric customers in Idaho of which 91 076 are residential customers (i.e. households)
served in 2002. Of the residential customers in the A VISTA service territory, based again on
2000 Census figures, it is estimated that almost 24 700 households, or 26% of customers in the
VISTA area, are at or below 150% of the federal poverty level (see Exhibit 403).
According to 2002 LIHEAP statistics obtained from the U.S. Department of Energy,
923 households were eligible in Idaho for assistance and 29 867 households (74 693 people)
statewide received LIHEAP assistance. In 2003, 9 449 households applied for LIHEAP funding
out of the estimated 24 700 eligible, representing only 38% of those eligible. Exhibit 404
contains figures confIrmed by the Idaho Department of Health and Welfare concerning the
LIHEAP funds distributed in A VISTA territory in 2003.
Please discuss the "ability" of low income customers to pay their montWy energy bills?
According to the U.S. Department of Energy ("DOE"), the "affordability burden" for
total home energy is set nationwide at 6% of gross household income and the burden for home
heating is set at 2% of gross household income.
According to the Idaho LIHEAP data provided by the Idaho Department of Health and
Welfare ("IDHW"), 7.6% of all LIHEAP program participants fall into the "High" energy
1 Benewah, Bonner, Boundary, Clearwater, Idaho, Kootenai , Latah, Lewis, Nez
Perce, and Shoshone.
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burden category, paying 11 % or more of their annual income for utilities ("medium" burden is
determined to be 5-10% of annual income and "low" is considered at less than 5%. IDHW does
not keep statistics for medium or low burdens. Exhibit 405 fTom the Idaho Department of Health
and Welfare shows these figures.
IDHW's data also support a recent study conducted nationwide by Fisher, Sheehan &
Colton, a public fmance and general economics consulting fIrm. That study is attached to this
testimony as Exhibit 406. This study is an extremely well-known work relied upon nationwide
by a mYriad of different organizations and governmental entities. I rely upon it frequently in
conducting my business affairs.
Based on the Fisher study, the following statistics apply to Idaho.
% OF INCOME FEDERAL % OF INCOME PAID ON # OF HOUSEHOLDS
POVERTY LEVELS 2002 HOME HEATING
50% of poverty level 45%000
50- 7 5% of poverty level 18%000
75-100% of poverty level 16%000
100-125% of poverty level 11%000
125 to 150% of poverty level 000
Will you please provide a context for foregoing figures?
According to the Fisher, Sheehan & Colton study, these figures represent a gap of
$96 000 000 between what Idahoans could afford to pay (based on federal standards) for energy
in 2002 and what they actually did pay. This gap is expected to increase to $113 million in 2003
based on rising energy costs. Currently, the LIHEAP program funds $10.5 million (for energy
assistance, weatherization and administration) to the state of Idaho providing an average benefit
of $202 per household to help close, but far from eliminate, this gap.
What are some other relevant demographics of low income customers?
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According to the 2000 Census, approximately 32 688 customers occupied units
(representing 35.8% of the total residential customers in the A VISTA service area) heating
primarily with electricity. Almost all households that are low income use electricity for lighting,
refrigeration and small appliances. Idaho 2002 State Weatherization program data shows that
1487 homes were weatherized with D.E. funds in the amount of$I 997 798 at an average of
344 per home. An additional 995 were weatherized by LIHEAP funding and 132 by
Bonneville Power Administration (for 2002-2003 only). To date, according to the CAP
receiving A VISTA weatherization funds, approximately 1391 households in A VISTA's Idaho
service area have had weatherization measures installed by Company programs since 2000.
VISTA (including its predecessor Washington Water Power Company) has contributed
weatherization program funds since 1980. Based on currently existing electrically heated homes
weatherized with A VISTA funds (average of21 households per year) and other funding, we can
assume that an average of300 households per year have been weatherized in the past ten years
(one must understand, however, that even if households were weatherized in the past, they will
require future weatherization measures).
Based on 300 homes per year over the past ten years, approximately 3 000 homes out of
700 determined to be currently eligible have been weatherized. It is estimated, therefore, that
over 21 000 households in A VISTA's Idaho service area are currently eligible and in need of
funding. At a rate of300 households per year (based on and including past and future
anticipated funding levels of A VISTA, D.E. and B.A. weatherization programs) it will take
nearly 70 years to weatherize all households in A VISTA's Idaho service area that are eligible
and in need of weatherization.
As previously mentioned, the poverty rate in the A VISTA service area is considerably
higher than the statewide average at 14.29% compared to 12% statewide. Furthennore, A VISTA
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has a higher percentage of total households eligible than Idaho Power at 26% compared to 18%.
This is due to higher poverty and unemployment rates.
Please discuss the level of energy costs in relation to the ability of low income customers
to pay those costs?
More than 11 358 of the households in the AVISTA Idaho service area have annual
income of less than $9 000. The average yearly energy bill for low income customers is $1 607
with 30-35% of that amount spent on home heat alone. Though low income people are more
easily described in statistical terms, in reality they are our neighbors, friends and relatives. Whe
considering the possibilities of accidents, ill health, loss of employment, etc., they potentially
include each of us.
What are the special circumstances that low income households face?
These households pay the highest percentage of their income for energy costs compared
to other income groups and are the most vulnerable and at risk to change in a competitive
market. They live in society s worst case housing stock, are at risk to hypothermia and indoor
air quality problems. Coupled with an array of other fmancial burdens (cost of child care, lack 0
affordable housing, lack of living wage jobs, cutbacks in federal assistance of most kinds, etc.
they are increasingly moving closer to homelessness.
Often, the affordability of a utility bill can mean the difference of eating, a medical
prescription, having a roof over their heads rather than living in a car, or worse. When
calculating the average take-home pay ofa low income head of household, and deducting basic
living expenses such as housing (often 70% of their income), childcare and food, they are in
fmancial crisis before even looking at the cost of utilities, clothing, transportation, and other
basic needs.
What is the need for electrically heated weatherization and efficiency retrofits?
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According to IDHW, there are approximately 21 000 households in A VIST A's service
area that remain to be weatherized. According to CAP data, only 85 households have been
weatherized since 2000 with A VISTA funds. These funds have been supplemented with federal
weatherization funds bringing the total to approximately 300 households per year. At the
current level, with all current funding sources it would still take almost 70 years to reach all
eligible homes in the A VIST A Idaho service area.
In responses to CAP AI's production requests, A VISTA stated that its Idaho gross
operating revenue for 2002 was $229 561 337. The Comprehensive Review of the Northwest
Energy System, sponsored by each of the Governors of the four Northwest states asked for each
utility to spend 3$ of its gross operating revenues for public purpose energy programs. Of that
, 14% was to be spent for low income weatherization. Fourteen percent of3% of their Idaho
revenue for A VISTA then suggests a weatherization program level of$964 158 annually.
As set forth in the testimony of Mr. Larry Stamper, AVISTA's current funding level is a
small fraction of this amount, allowing for the Weatherization of an average of 21 homes a year.
CAP AI requests that A VISTA's funding level be increased to the level identified in Mr.
Stamper s testimony and that the program more closely match D.E. requirements so that
funding can be utilized on all homes meeting the eligibility requirements.
You previously testified that you participated in the recent Idaho Power general rate case.
What was the nature of your request in that case?
CAP AI took a position on several issues in that case, including matters of rate design, as
well as an increase to funding levels of Idaho Power s low income weatherization program and
program design changes.
How did the Commission rule on the low income weatherization issues raised by CAP
in Case No. IPC-03-13?
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The Commission granted the full amount ofLIW A funding requested by CAP AI in the
amount of $1.2 million per year for at least the next three years and suggested an increase in
administrative project costs, among other things. CAP AI is immensely grateful to the
Commission for recognizing both the plight of the impoverished, and the tangible benefits to
ratepayers and shareholders provided by Idaho Power s LIW A program.
Though there are some fundamental differences between A VISTA and Idaho Power and
their respective customers, CAP AI's objective with respect to weatherization funding in this case
is to propose a funding level for A VISTA that is in relative parity to Idaho Power s funding level
as recently ordered by this Commission.
IV. CONCLUSION
Could you summarize your recommendations to the Commission?
Yes. They are listed below:
Do not approve a general rate increase, and associated customer class revenue
allocation, without taking into consideration the disproportionate impact that it
will have on the ability of low income customers to pay;
Increase electric low income weatherization and efficiency retrofits from its
current level to $490 000 annually as proposed by CAP AI witness Larry Stamper;
Allow for contract changes in the A VISTA low income weatherization program
to include windows and doors as part of the S.I.R. of 1.0, base 10 ad measures as
proposed, eligibility requirements to met D.O. E. and explained in detail, by Mr.
Stamper.
Does that conclude your direct testimony?
Yes it does. I thank the Commission for the opportunity to participate in this proceeding.
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CERTIFICATE OF SERVICE
Charles L.A. Cox
EVANS, KEANE
111 Main St.
O. Box 659
Kellogg, ID. 83837
I HEREBY CERTIFY that on the 21 st day of June, 2004, I caused to be served the
foregoing DIRECT TESTIMONY OF TERI OTTENS on the following, in the manner indicated.
Scott Woodbury
John Hammond
Idaho Public Utilities Commission
472 W. Washington St.
Boise, ID. 83720-0074
() U.S. Mail, postage prepaid
R4 Hand delivered
() Facsimile
() Overnight mail
David J. Meyer
Senior Vice President and General Counsel
A vista Corporation
O. Box 3727
1411 E. Mission Ave., MSC-
Spokane, WA. 99220-3727
() U.S. Mail, postage prepaid
() Hand delivered
() Facsimile
Overnight mail
Kelly Norwood
Vice President
A vista Corporation
O. Box 3727
1411 E. Mission Ave., MSC- 7
Spokane, WA. 99220-3727
() U.S. Mail, postage prepaid
() Hand delivered
() Facsimile
W' Overnight mail
Dennis E. Pesseau, Ph.
Utility Resources, Inc.
1500 Liberty St. SE, Ste. 250
Salem, OR 97302
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() Hand delivered
() Facsimile
Overnight mail
Conley E. Ward
601 W. Bannock St.
Boise, ID. 83702
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() Overnight mail
() U.S. Mail, postage prepaid
() Hand delivered
() Facsimile
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Brad M. Purdy
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Exhibit 401
TERI L. OTTENS
17949 Goodson Rd.
Caldwell, Idaho 83605
Work - 208-321-2389.
Home - 208-454-1259
EDUCATION
Q) Bachelor of Arts, Government, California State University at Sacramento, 1977
Q) Completed 19 credits of Masters of Public Administration courses, University of Wyoming and
Boise State University 1983-1990
RELATED EXPERIENCE
Executive Director Community Action Partnership Association of Idaho, 2000 to Present, Boise, ill
CAP Al is a non-profit association advocating for low income issues including energy. Duties include
administration of numerous grants and programs, staff supervision, working with eight member agencies
coordination of policies and issues, financial oversight.
Owner Association Management Solutions, 1998 to Present, Boise, ill. This company provides
management services to public and private associations. Services offered include membership recruitment
and tracking, administrative services legislative monitoring and lobbying, desktop publishing of
newsletters, directories and conference material; conference and event planning and other services required
by the association. The company currently manages six associations one of which has a contract with the
Northwest Energy Efficiency Alliance to provide energy code and efficiency education to cities and
counties.
Deputy Director 1997 to 1998 Technical Services Director 1994-1996, Association of Idaho Cities
Boise, ill. AlC is a non-profit membership organization for Idaho cities. Duties included:
Q) Worked with over 100 cities and the majority of the counties on planning issues from
comprehensive planning, implementation ordinances, area of impact, open space preservation
and other related issues
Q) Worked as the Energy Coordinator for AlC and the Idaho Association of Counties to promote
energy efficiency and address energy related concerns of their citizens at a statewide level.
Q) Developed and followed through on public participation/education plans
Q) Worked with cities and counties to develop regional partnerships in meeting planning goals
Q) Participating in the writing and preparation of AlC publications, reports and articles
Q) Acting as spokesperson or liaison for the organization with many other groups, the media and
the state legislature
Q) Identifying and developing funding resources and partnerships, including extensive grant
writing and administration
Administrative Officer City of Caldwell, ill, 1989-1993. Duties included:
Q) Daily administration of all facets of city government including working with AlC and local
utilities on related issues including how energy issues affected Caldwell citizens.
Q) Served as Budget Officer in preparation and management of $14 million budget
Q) Served as Personnel Officer and the American with Disabilities Coordinator
Q) Preparation of meeting agendas and staff reports
Q) Grants Officer responsible for over $250 000 in grants
Q) Involved in strategic planning at all levels including the city comprehensive plan, area of impact
negotiations, infrastructure master plans, budgets and the Regional/Urban Design Assistance
Team (R/UDA T) Study.
Information OfficerlP1anner Ada County Development Services, ill, 1988.
population of over 200 000. Duties included:
Q) Knowledge of land use planning, zoning laws and issues, growth management.Q) Interpersonal skills in dealing with general public, governmental agencies and developers in
complaint and enforcement issues.
Ada County serves a
Executive Director Downtown Casper Development Corporation, 1986-1987. DCDC is a non-profit
membership agency with responsibility for downtown redevelopment. Duties included:
Q) Business retention, expansion and recruitment
Q) All administrative functions of organization including budgeting, preparation of Board agendas
and reports, staff supervision, membership development
Q) Fund raising for the organization, including membership development, identifying grant
resources and corporate/business donors. This included preparing and making presentations
Q) Responding to membership needs/technical assistance
Assistant City Manager City of Laramie, WY 1980-1986. Duties included:
Q) Working with the City County Planning Office to coordinate city/county growth
Q) Preparation and management of $17 million budget as City Budget Officer.
Q) Understanding and management of city risk management program, utility franchises, personnel
grant writing and contract negotiations and administration.Q) Public Information Officer
Director ofP1anning and Research City of Tracy, CA 1977-1979. Duties included:Q) Facilities and program planning and implementation
Q) Grant administration, volunteer coordinator
OTHER RELATED EXPERIENCE
Q) United Way Board Member, Canyon Area United Way, 1988 to present
Q) Untied Way Board Member, Wyoming (Laramie and Casper), 1980-1988
Q) Member, Idaho Community Forestry Council 1993-Present
Q) Member, Caldwell Beautification Committee 1988-1998
Q) Coordinator, Caldwell Area Paint the Town 1989-1995
Q) Member, Mayor s Committee for the Disabled, Caldwell 1988-
Q) Member, illOC Fair Housing Advisory Committee, 1996-1997
Q) Member, Middleton School District Parents Advisory Committee, 1995-Present
Q) United Way FEMA Committee - 1992
Q) Volunteer Member, Wallace Institute Agricultural Preservation Task Force, 1998-1999
HONORS
* Outstanding Young Woman of America, 1983 and 1987
* Distinguished Service Award, Laramie Jaycees 1985
* Outstanding Young Wyomingite, Wyoming Jaycees, 1986
* Friend of American Education, Natrona County School District
* Woman of the Year, Beta Sigma Phi, 1992
REFERENCES
Deb Hemmert, President
SEICCA
208- 746-3351
Michael McEvoy
Canyon County Farm Bureau
208-585-2277
Percent of Poverty for States Exhibit 402
100 Percent, 110 Percent, 125 Percent, 150 Percent and 175 Percent
of the 2003 HHS Poverty'~u'idefines
F or All States (Except Alaska and Hawaii) and for the District of Columbia
Size of 100 110 125 150 175familyPercentPercentPercentPercentPercentunitof Poverty of PovertY of Poverty of Poverty of Poverty980878$11 ,225 $13 470 $15 715$12 120 $13 332 $15 150 $18 180 $21 210$15 260 $16 786 $19 075 $22 890 $26 705$18 400 $20 240 $23 000 $27 600 $32 200$21 540 $23 694 $26 925 $32 310 $37 695$24 680 $27 148 . $30 850 $37 020 $43 190$27 820 $30 602 $34 775 $41 730 $48 685$30 960 $34 056 $38 700 $46 440 $54 180
For family units with more than 8 members, add $3 140 for each additional member.
Note: For optional use in FFY 2003 and mandatory .use in FFY 2004
" .. ". .
TERI OTTENS EXHIBIT NO. 403
Calculation of 24 789 households at or below 150% of Poverty Level.
This was figured from 2000 Census figures which shows number of households at an
income at or below $24 999. In A VISTA service area 38 137 households are at or below
$24 999. It is estimated, based upon poverty figures in the census, that approximately
65% of all households that are at or below $24 999 will qualify for the 150% of poverty
level, or 24 789 households.
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Exhibit 405
HEAVY BURDEN REPORT PY 2003
AREA SELECTED PROCESSED
CAP 179 3021
CAP 2 439 5950
CAP 3 334 5117
CAP 4 283 3298
CAP 5 286 3943
CAP 6 4199
CAP 7 302 4644
TOTAL 1872 30174
HEAVY BURDEN REPORT PY 2004 (through 23 Jan 04)
AREA SELECTED PROCESSED
CAP 1068
CAP 2 114 3643
CAP 3 1972
CAP 4 1850 2.49
CAP 5 1319
CAP 6 1234
CAP 7 105 1681
TOTAL 371 12769
Energy burden is determined by dividing the participant's October - June energy costsJ from theprevious year, by their annual income. This percentage is then ranked by either, Low (0 - 50/0)JMedian (6 - 100/0) or High (11010 or more). This percentage also assists the LlHEAP program
to determine how much the participant's benefit will be.
Exhibit 406
ON THE BRINK
The Home Energy Affordability Gap in IDAHO
APRIL 2003
Findin~
Home Energy ~urdens for Households
at Various Federal Poverty Levels
50%
Ii 40%
~ 30%
2' 20%
.n 10%
~o .:o. .s-. """'0 '17~ ~
~ "'? "'
9', "'6','170 \90 It'o"""'0 """'0 -'"""0
Poverty Level
Home energy is a crippling fmancial
burden for low-income Idaho households.
Idaho households with incomes of below
50% of the Federal Poverty Level pay
45% or more of their annual income
simply for their home energy bills.
Home energy unaffordability, however, is
not simply the province of the very poor.
Bi1ls for households between 50% and
100% of Poverty take up 16% of income.
Even Idaho households with incomes
between 150% and 185% of the Federal
Poverty Level have energy bills above the
percentage of income generally
considered to be a.ffordable.
Findin~
Number of Low-Income Idaho
Households by Federal Poverty
Level
!II'a .
- :g 45 000
~ ~
DOO
0 15000
,g
:J t':.t: ~
~ ~
~ d'0..
~~
'SQ.20 ,r
~ ;p~ "'
9: 'd'.
.. ..
,ro \9.. 01'0
..... .....
Poverty Level
The number of househOlds facing these
energy burdens is staggering. More than
000 Idaho households live with income
at or below 50% of the Federal Poverty
Level and thus face a home 'energy burden'
of 45% of income or more.
000 additional Idaho households live
with incomes between 50% and 74%
Poverty (home energy burden of 18%).
000 more Idaho households live with
incomes between 75% and 99% of theFederal Poverty Level (home energy
I burden of 13%).
$35
$30
~ $25
..!!!
$20
~ $15
$10
Finding
A $96 Million Energy Affordability Gap
(2001/2002 Heating Fuel Prices)
~~ ~
~ \9
& '
7 '7- 57 0
~ ~
9: 57 c9..t-.-1) % V
Poverty level
Existing sources of energy
assistance do not adequatelyaddress the energy
affordability gap in Idaho.
Actual low-income energybills exceeded affordable
energy bills in Idaho by more
than $96 million at 2001/2002
winter heating fuel prices.
In contrast, Idaho received a
gross allotment of federal
energy assistance funds of
$10.5 million for Fiscal Year
2003. Some of those funds
will be used for administrative
costs, weatherization , and
, other non-cash assistance.
Finding
Increases in the prices of
natural gas, propane and fueloil during the 2002/2003
winter heating season drive
the unaffordability gap up to
more than $113 million.
While the gap for the lowest
income households (0':50% of
Poverty) increases by nearly
9% (from $30 million to $32
million), the gap for the
highest income households
(150-185% of Poverty)
increases by nearly 65% (from
$7 million to $12 million).
A $113 Million Gap at 2002/2003 Winter
Heating Prices
$50
,;:..
l:.-'""0 'T~'S7~
Poverty level
Findin~
Low..lncome Energy Bilts
in Idaho by End Use
(2001/2002 Winter Heating Prices)
The energy affordability gapin Idaho is not created
exclusively, or even primarily,
by home heating and cooling
bills.
II Electric .Hot Water CHeating mCooling
At 2001/2002 winter heating
prices, while home heating
bills were $576 of a $1 607
bill (35.9%), electric bills
(other than cooling) were
$491 (30.5%). Annual coolingbills represented $53
expenditures (3.3% of the
total bill), while domestic hot
water represented $487 in
expenditures (30.3%).
$53
Finding
The unaffordability of home energy bills frequently causes low-income households to take drastic actions that
are detrimental to their health, safety and welfare. A survey of energy assistance recipients by the Iowa
Department of Human Rights found that:
Over 12 percent of the surveyed energy assistance recipients went without food to pay their
home heating bill.
More than one-ill-five went without medical care to pay for heating bills, including not seeking
medical assistance when it was needed, not filling prescriptions for medicine when a doctor has
prescribed it, and/or not taking prescription medicines in the dosage ordered by the doctor.
Almost 30 percent reported that they did not pay other bills, but did not elaborate as to which
bills were not paid.
In addition to not paying other bills, many low-income households incurred debt in order to pay
both their home heating bills and other basic necessities: borrowed from friends and/or
neighbors; used credit cardS to pay for food and other necessities, or did not pay the heating bill.
A publication of
FISHER, SHEEHAN COLTON
PUBLIC FINANCE ANn GENERAL ECONOMICS
Belmont, Massachusetts
April 2003
ID
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7
DEFI~TIONS AND EXPLANATIONS
Each state (along with the District of Columbia) has been ranked (from 1 to 51) in terms of four separate
measures of the extent of the energy affordability gap facing its low-income customers:
(1) The percent of individuals with annual incomes at or below 100% of the Federal Poverty Level.
This data is obtained directly from the 2000 U.S. Census.
(2) The average total home energy burden for households with income at or below 50% of the
Federal Poverty Level shows the percentage of income which households with these incomes
spend on home energy. "Total home energy" includes all energy usage, not merely heating and
cooling. A home energy bill is calculated on a county-by-county basis. The statewide average is a
population-weighted average of county-by-county data.
(3) The average affordability gap (in dollars per household) for all households with income at or
below 185% of Poverty is the dollar difference between actual total home energy bills and bills
that are set equal- to an affordable percentage of income. Affordability for total home energy bills
is set at 6% of household income.
(4) The extent to which federal energy assistance covers the combined heating/cooling affordability
gap for each state. The combined heating/cooling affordability gap is the difference between
actual heating/cooling biUs and bills that are set equal to an affordable percentage of income.
Affordability for combined heating/cooling bills is set at 2% of income. This measure thus
examines the proportion of the heating/cooling gap that is covered by the gross federal Low-Income Home Energy Assistance Program (LllIEAP) allocation to the state assuming that the
entire LlliEAP allocation is used for cash benefits.
In the state s rankings, a higher ranking indicates better conditions while a lower ranking indicates worse
conditions relative to other states. Thus, for example:
(1) The state with the rank of #1 has the lowest percentage of individuals living in households with
income at or below 100% of the Federal Poverty Level while the state with the rank of #51 has
the highest percentage.
(2) The state with the rank of #1 has the lowest average home energy burden for households with
income below 50% of the Federal Poverty Level while the state with the rank of #51 has the
highest average home energy burden.
(3) The state with the rank of #1 has the lowest average affordability gap (dollars per household)
while the state with the rank of #51 has the highest dollar gap.
(4) The state with the rank of #1 has the highest percentage of its heating/cooling affordability gap
covered by federal energy assistance while the state with the rank of #51 has the lowest
percentage of its heating/cooling gap covered.
All references to "states" include the District of Columbia as a "stat~." Low-income home energy bills
are calculated using average residential revenues per unit of energy. State fin~cjal r~sources and utility-
specific discounts are not considered.