Grid/Keyspan Releases Low Income Gas Rate Discount Reports, but Not All News is Good

Earlier this month, National Grid released the first annual report for the low income discount program it created for KeySpan Energy Delivery New York (“KEDNY”) and KeySpan Energy Delivery Long Island (“KEDLI”). Both programs were initiated as part of the revised rates approved for the companies in a New York State Public Service Commission (“PSC”) decision on December 21, 2007. For KEDNY, the order approved a low income discount for eligible residential non-heating customers of $2.50 per month off of the minimum charge, while heating customers receive a $9.50 discount. In addition, a winter (November through April) discount of about 45% applies to the second rate block for KEDNY’s heating customers. KEDLI customers receive similar breaks, but the winter discount is only about a 44% savings. PULP was a party to the Joint Proposal which negotiated these discounts and is pleased with the result.

Where the two programs differ is in the number of customers who are eligible to participate. KEDNY estimated 60,000 households would qualify (including heating and non-heating), based on participation in previous low income programs, while KEDLI, which never had a low income program, estimated only 30,000. According to National Grid, “Funding for the Low Income Discount Program was established based on an anticipated level of enrollment of 30,000 customers. As the Company had no experience offering a low-income program in Long Island, the 30,000 estimate was derived by halving the enrollment figures in The Brooklyn Union Gas Company’s (formerly d/b/a KeySpan Energy Delivery New York) Low Income Discount Program, a program that has long been in existence. Considering that statistics, such as Home Energy Assistance Program (“HEAP”) enrollment by county are readily available, it is surprising that National Grid selected such a non-scientific approach to determining the number of households to include in the KEDLI low income program.

While KEDNY’s program was serving 54,669 eligible customers at the end of 2008 and 61,196 at the end of 2009 (over 55% percent are heating customers receiving the highest benefit), KEDLI’s program has not been nearly as successful. In fact, in 2008, 5,531 eligible customers participated and in 2009, 8,008 participated. While over 90% of these figures are heating customers, the participation has been dreadfully low. In fact, the December 2007 order anticipated that there might be an issue in attracting a sufficient number of participants on Long Island and called for a review of the program “if the number of customers benefitting is significantly lower than 30,000 after rate year two (2009),” which is definitely the case.

Long Island may be surviving the recession better than other regions of the state, but it is no stranger to poverty and there are thousands of eligible people being missed by KEDLI. According to the recently released 2010 Poverty Report from the New York State Community Action Association, there are 61,647 people in Nassau County living in poverty and 83,475 in Suffolk County. In addition, the state Office of Temporary and Disability Assistance Caseload Statistics Report for December 2009 (the latest month available) at Table 25 states that 15,169 households in Nassau County received HEAP benefits and 27,374 received HEAP benefits in Suffolk County in the 2010 HEAP Federal Fiscal Year. By having only 8,008 customers participating in the low income program is a clear indication that the time is ripe for a review of KEDLI’s program, as foresaw by the PSC in its December 2007 order.

KEDLI has proposed numerous methods to reverse this trend, including:

* The company is working to ensure all HEAP payments are coded to ensure automatic enrollment in the Low Income Discount Program.

* A Low Income Symposium with Long Island community-based organizations and the company’s Consumer Advocates was held in October 2009, which provided an opportunity for the company to promote the program.

* Outbound and Inbound Contact Center representatives were provided additional training on the program’s design and information on the program was incorporated into Contact Center scripts.

* The company’s Consumer Advocates circulated information on the discount at a program sponsored by Long Island Power Authority in August 2009 to launch their Senior Income Qualified Assistance Program.

* The company sent a bill insert in November to all Long Island gas customers with eligibility and enrollment information for the program.

* The company will expand its Outreach and Education campaign to increase enrollment.

* The company will partner with third party organizations to deliver additional outreach.

* The company will implement a file matching program with Long Island Department of Social Services offices and New York City Human Resources Administration in an effort to identify additional customers who may be eligible for the program.

The KEDLI Low Income Discount Program can not be permitted to languish. Over 42,000 households on Long Island received HEAP benefits last year. While many of these undoubtedly use electric heat, or receive oil delivery, and are not gas heating customers, PULP does not believe that National Grid has come close to providing its low income discount to all eligible customers. The first step is to link the low income program with HEAP participation through OTDA and county Department of Social Services offices. The success of the automatic enrollment process is key to the success of the entire program. National Grid should not wait a year before releasing another set of statistics to measure their ability to enroll eligible customers.

Lou Manuta

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