Minutes

 

August 30, 2000	October 12, 2000
September 18, 2000	October 24, 2000

 

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 August 30, 2000
Minutes

Task Force Members present:

Senator Richard J. Carey	Rep. Randall Berry
Senator Norman J. Ferguson, Sr.	Rep. Donald Berry, Sr.
Thomas Nelson	Pat Averill
Patricia Aho	Eleanor West
Donn Gifford	Stephen G. Ward
Peter Merrill

Task Force Members absent:

Patricia Dyer	Jim Peary
Geoffrey Green	Stephen Wood
Dennis Lajoie

Senator Carey began the first meeting of the Task Force to Reduce the Burden of Home Heating Costs on Low-income Households with introductions and opening remarks.

Tim Leet asked members to review the mailing list, including e-mail addresses, and the interested parties list and to let him know if any additions, deletions, or corrections were needed.

Tim also reviewed: 1) the legislation that established the Task Force; 2) the work plan; and 3) the meetings schedule.  P. Aho asked that the draft report be sent to members for their review via e-mail so that they could have as much time as possible to review.

The task force revised one meeting date on the preliminary schedule.  The meeting originally proposed for October 10^th was rescheduled to October 12^th.  Tim will send a revised meeting dates memo to the task force members.

Staff from the Maine State Housing Authority made a presentation to the Task Force members on the LIHEAP program. 

Questions and discussions that arose from the presentation included:

·       What is the formula that the Federal Government uses to determine how much funding each State receives for LIHEAP (MSHA will provide).

·       When do funds become available?  Sometime after the October 1^st start of the Federal Fiscal Year.  Timing of when funds are received is a critical issue.

·       What percent of LIHEAP funds are set aside for the weatherization program?  15%

·        For the first time in the history of the weatherization program, the Federal Government, specifically, the Department of Energy is requiring a 25% state match.  The 15% contribution from the LIHEAP funds cannot be used towards the match.  Also, MSHA cannot use the same matching funds to satisfy both the Department of Energy and Health and Human Services requirements.  May be able to count “CMP Lifeline program” towards match.

·       What are the MSHA statistics for the number of homes that have been weatherized?  How many are left to do? Difficult to determine because some measures only last for a period of time and need to be updated over time.  The cumulative savings far outweigh the costs of weatherizing a home.

·      How does the LIHEAP program work for Indian Reservations in Maine?  MSHA participates and signs off on their plan, but the Indian Reservations are responsible for the implementation.  MSHA releases a portion of the State’s LIHEAP funds to the tribes.

·       How much do other states pay in benefits?  What are their eligibility requirements and how do they compare to Maine?  MSHA research indicates Maine is in line with other states.  Historically, benefits paid to Maine residents have been lower than other states because Maine has higher proportion of poor people.

·       Maine Oil Dealers are concerned with price and availability, especially with prepaid plans.  LIHEAP customers can be signed up for prepaid plans.  Getting money for oil earlier in the season would help LIHEAP customers get lower prices.

·      How many times has the State appropriated General Fund dollars to support LIHEAP/Weatherization?  The last time was in the early 1980’s.  MSHA has authorization to accept funds if the Legislature appropriated them.

·       Do LIHEAP funds cover natural gas?  Yes, LIHEAP funds can be used for natural gas.  What are the projections for the number of households that use natural gas and are eligible for LIHEAP funds?  Expected to be very small, 1000 at the most.

·      Would the amount of LIHEAP funds received by the federal government be affected if the State established an emergency fund?  No, there would not be an impact.

Jim Connors, Policy Development Specialist from the State Planning Office presented the Task Force with 1) information on energy conservation and demand side management; 2) the outlook for this year’s winter fuel costs; and 3) an update on PL 1999, c. 758. 

·        State Planning Office coordinates existing and new DSM programs.  The implementation and delivery of these programs still resides with the electric utilities.

·        DSM programs are still aimed at low-income residential customers who use a significant amount of electricity (i.e. water heater wraps, insulation, etc.).

·        More efficient lighting and electric appliances will help to reduce energy use in the future.

·        SPO is concerned about 25% match requirement for DOE weatherization funds.  System benefit charges paid by utilities may be able to be applied towards match requirement.

·        Fuel prices for the 2000-01 heating season are starting very high and are expected to rise 15-20 cents over the season.

·        Just-in-time delivery concept is very sensitive to pressures.

·        Prices are high and stocks are low relative to prior years.

·        Heating oil stocks are adequate – slightly above expected demand.  Should be fine as long as normal winter conditions prevail.

·        PL 1999, c. 758 requires 1) MSHA to notify Legislature promptly of substantial price increases and 2) SPO to prepare a winter fuel outlook.  The report is expected to be ready in December 2000.  Will winter fuel outlook include natural gas?  Yes, but will primarily focus on oil, wood, and electricity.

·       Interruptible natural gas customers switching to oil when the price of natural gas rises significantly is a large factor to the rising price of home heating oil because they reduce available oil supplies.

Lastly, the Task Force to Reduce the Burden of Home Heating Costs on Low-income Households discussed the following items as issues they would like to see addressed in future meetings:

 ISSUES/ITEMS FOR NEXT MEETING

      »    CAP Agencies - experience with Liheap Program

      »    Report from the electricity industry on projections for electric space heating 

      »    Joint meeting with other study committee for energy prices (oil, gas, etc.) 

      »    Have Gas Companies report on the availability of low-income programs 

      »    Possible reduction of sales tax for energy for low-income customers 

      »    Oil Dealers - information on how distribution system works

      »    Interruptible customers – impact on natural gas, oil, electricity supplies (PUC, utilities) 

      »    LIHEAP/petroleum distributors working together to get lower prices for LIHEAP customers (oil futures) buying power

      »    Do interruptible Natural gas customers have “firm” contracts with oil suppliers?

      »    How to come up with the 25% State match for weatherization program

WHAT CAN BE DONE TO GET FUNDS SOONER?

      »   GF appropriation to MSHA for fuel assistance so that oil purchases can be made prior to the heating season – then reimbursed when federal funds are received 

»    Sales tax for industrial customers (electric) on “special rates

»    Across the board tax on fuel providers for LIHEAP customers (BTU tax) 

TASK FORCE TO REDUCE THE BURDEN
OF HOME HEATING COSTS
ON LOW-INCOME HOUSEHOLDS

 September 18, 2000

Minutes

Task Force Members present:   

Task Force Members absent:  

Senator Carey began the second meeting of the Task Force to Reduce the Burden of Home Heating Costs on Low-income Households with introductions and opening remarks.

P. Aho provided additional materials to the Committee in response to questions from the first Task Force meeting.

Gene Guilford, Maine Oil Dealers Association, presented an outlook for the 2000-01 heating season. 

·    Problem is worldwide; electricity demand is skyrocketing; natural gas prices have doubled, will increase 50% by the end of the year.

·     Extraordinary economy but energy production has not kept up…system is strained.

·    U.S. is increasingly reliant on foreign products.  America has been remiss in increasing supplies.

·    Maine Oil Dealers’ Association began warning of increasing prices and possible shortages in the spring of 2000. 

·    20%-25% of consumers were on some type of oil buying risk management program in 1999.  That number has increased to 50%-60% in 2000.

·    Oil dealers have programs to help consumers manage risk – they are not on their own.

·    Conservation program (Smart Energy) encourages consumers to conserve and helps to make heating systems more efficient.

·    Northeast Heating Oil Reserve – 2 million barrels – amounts to 3-day supply for consumers in the northeast.  Not going to lower prices or relieve shortages.

·    U.S. was in similar situation ten years ago…will happen again.

·    LIHEAP funds come in too late to help low-income customers lock-in lower prices.  Need to be available in the spring or early summer. 

• How full are Dealer’s tanks at the present time (Sen. Carey) – Maine Oil Dealers Assoc. will find out. 

• If all tanks were 90% full, how many days supply of oil is that equivalent to?  Maine Oil Dealers Association will provide that information. 

• Copies of a study entitled “Ready for Winter?  Final Report of the Blue Ribbon Commission on Energy Policy for Maine’s Low-income Citizens” conducted in 1990 will be made available for review. 

• Mr. Guilford addressed the suggestion of having homeowners use their tanks as storage.  He indicated that doing so might strain the oil distribution system.  Limited resources such as inventory, trucks, etc. Would not be able to meet demand if everyone called at once. 

• Will pre-paying cause some dealers to not be able to fulfill demand?  Reputable companies can be trusted, but there is always a chance of not being able to meet demand. 

• Can State lock into plan for low-income consumers?  Difficult to do because of when LIHEAP funds are received.  Also, locking into a price can be risky because it is difficult to know when prices will be at their lowest.

• Patricia Dyer, Northern Utilities, provided an update on low-income assistance programs at Northern Utilities.

• At the present time there is no “low-income rate”, will be in the next rate case.  May be several years away.

• Northern Utilities currently serves 23,000 customers in Maine, 15,000 of which are residential customers.
  

  • Customers do have the option to budget their billing through levelized payments.  A majority of customers do take advantage of this option.

• Northern Utilities does promote energy conservation through messages in their bills.
  

  •   How many households are currently on the budget payment plan?  Approximately 65% of Northern Utilities residential heating class (Pat will get exact number) 

Jamie Py, Maine Oil Dealers Association; Patricia Dyer, Northern Utilities; Carol MacClennon, MPUC; and Marjorie Mclaughlin, MPUC discussed the effects of interruptible natural gas service on the demand for heating oil during a crisis event. 

·    Interruptible gas service in New York State is a way for utilities to meet peak demand in a least cost manner.  Interruptible customers get a lower gas rate in exchange for switching to an alternative fuel during times of peak demand.

·    Generally, the alternative fuel is oil.  Interruptible gas customers become a buyer on the spot market, which tends to drain supplies and increases the price.

·    The New York Public Service Commission requires Interruptible customers to have oil supply on hand to reduce spot market purchases.  Recommend Interruptible Natural Gas customers in Maine do the same.

·    Northern Utilities already asks its Interruptible customers to leave the system on December 1^st of each year and not come back until April 1^st.  There is a penalty for unauthorized use. 

·    Some interruptible customers have asked to come back onto the system during the winter months.  If their request is approved, they are charged the regular tariff rate.

·    Since Northern Utilities interruptible customers know that they will be off the system, they make arrangements with alternative fuel suppliers.

·    Only four of Northern Utilities interruptible customers use #2 home heating oil as an alternative fuel source.  The majority contract for oil during April through July.

·    The Maine Public Utilities Commission has studied the impact that Maine’s interruptible natural gas customers have on oil supplies.  According to the MPUC, it is not clear that any action is necessary.

·    Interruptible programs in Maine are very well established and help to balance the system.  May lose cost benefits if barriers to interruptible program are set up.

·    At the present time, New York is a much heavier user of natural gas than Maine (25% vs. 0.1%). Only 0.1% of Maine’s natural gas customers are on the interruptible program versus 37% in New York.  Twenty-five percent of Maine’s interruptible natural gas customers use #2 home heating oil as an alternative fuel.  Finally, the interruption in Maine is predictable in Maine versus unpredictable in New York.

·    MPUC must consider impact on overall system, not just natural gas system.

·    Important to note that what influences the price that Maine consumers pay for oil happens in the northeast region of the country, including New York.

·    Interruptible customers in New York have not had to interrupt much at all prior to last year, may have become complacent in terms of alternative fuel supply.

·   New natural gas pipelines in Maine may lead to increased use and more interruptible customers – may be a problem in the future. 

Tom Nelson, York County CAP and Eleanor West, Washington Hancock CAP presented the step-by-step process of implementing the LIHEAP program through a CAP Agency. 

·    On average, Maine receives approximately $14.0 million in LIHEAP funds each year.  In the 1999-00 heating season, however, Maine received approximately $31.0 million including emergency funds.  Participants in the LIHEAP program vary from season to season.

·    Can the application process be done sooner than August 1^st of each year?  Yes, the application process can be changed and has been changed in the past.  However, money is not available until late fall.

·    In general, how long is the waiting period once the application is filled out until the consumer receives LIHEAP funds?  Funds generally become available in November.  Once that happens, the waiting period is usually no longer than 15-20 days.

·    LIHEAP funds can be distributed to those consumers with income at or below 170% of federal poverty levels (in pending rulemaking) as long as it does not diminish payments to lower income clients. 

Dick Davies and Peter Merrill discussed dispensing funds from low-income heating programs during the summer months. 

·    Presented a possible “model” for dispersing funds to low-income clients if the State were to establish a “LIHEAP Fund”.

·    PL 1991, c. 858 established a Fuel Assistance Reserve Fund and authorizes the Maine State Housing Authority to use funds, if appropriated, to ensure that fuel assistance benefits for the State’s eligible elderly and low-income residents are available prior to the beginning of the heating season.  This legislation is still on the books, but has never been used because funds were never appropriated.

·    What is the possibility of getting a working capital advance from the Rainy Day Fund?  Tim will report back. 

Dick Davies also distributed a letter from Nancy E. Fritz, President, Maine Community Action Association to Evan Richert, Director, State Planning Office concerning a 25% cost share requirement for the Federal Weatherization program which becomes effective in FY 2001. 

Senator Carey reminded members that the next Task Force meeting is set for October 12, 2000 at 9:00 am at the State House.  This meeting will be a joint meeting with the Gas and Fuel Prices Study Commission.  Staff will contact the recently established Interagency Heating Fuel SWAT Team to request that they brief both Committees on their initial findings and recommendations. 

The meeting was adjourned at 12:35 pm.

TASK FORCE TO REDUCE THE BURDEN
OF HOME HEATING COSTS
ON LOW-INCOME HOUSEHOLDS

 October 12, 2000  
Minutes  

Task Force Members present: 

Senator Richard J. Carey	Rep. Randall Berry
Rep. Donald Berry, Sr.	Pat Averill
Thomas Nelson	Eleanor West
Patricia Aho	Stephen G. Ward
Donn Gifford	Geoffrey Green
Steven Wood	Jim Peary
Dennis Lajoie

 Task Force Members absent:

Senator Norman K. Ferguson, Jr

Patricia Dyer

The third meeting of the Task Force to Reduce the Burden of Home Heating Costs on Low-income Households was a joint meeting with the Gasoline and Fuel Prices Study Committee.  Senator Carey began the meeting with introductions and opening remarks.

The meeting began with a presentation from Mr. Charles Pray, Special Assistant and Senior Advisor on Intergovernmental Affairs in the Office of Congressional and Intergovernmental Affairs at the U.S. Department of Energy.  Mr. Pray discussed the steps that the Clinton Administration has taken to address home heating oil concerns for the upcoming winter season.

The Committees also heard an interesting presentation from Mr. Thomas Martin, Marketing Manager with the New York Mercantile Exchange on the role of the Commodity Exchange Industry and the characteristics of the futures markets.

The morning session ended with the Committees hearing from Laurie Lachance, State Economist, and Greg Nadeau, Senior Policy Advisor, who are co chairing the Governor’s Interagency Home Heating Oil “SWAT Team”.  They presented the interagency plan to prepare the State of Maine for an exceptionally difficult winter heating season including a guided tour of their newly established website.

The afternoon session included a discussion on the preliminary findings and recommendations of the Task Force to Reduce the Burden on Home Heating Costs on Low-income Households and any overlapping issues between the Task Force and the Gasoline and Fuel Prices Study Committee. 

Highlights of the discussion, comments and concerns expressed from both Committees include:

• The introduction of additional energy conservation recommendations, which were prepared by Tom Nelson and Dick Davies.

• Geoff Green commented that the set of recommendations proposed were excellent, but expressed concern that there was too much focus on DSM/energy conservation and not enough on increasing financial resources.  DSM and energy conservation efforts may not be enough to help Maine citizens weather a crisis situation.  Steve Ward agreed with Mr. Green’s comments and encouraged the Task Force to recommend appropriations if the need was there.

• Pat Averill indicated that she supported the recommendation of increasing the amount of funding for weatherization services, but does not support taking the funds from the LIHEAP grant.

• It was suggested that recommendation #6 that deals with tax credits better define what kind of equipment would qualify and that recommendation #1 better define “summer fill program”.

Senator Carey reminded Task Force members that the fourth and final meeting is scheduled for October 24^th, 2000 in Room 228 of the State House. 

The meeting was adjourned at 2:45 pm. 

 

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TASK FORCE TO REDUCE THE BURDEN
OF HOME HEATING COSTS
ON LOW-INCOME HOUSEHOLDS 

October 24, 2000 

Minutes

Task Force Members present:

Senator Richard J. Carey	Rep. Randall Berry
Senator Norman K. Ferguson, Jr.	Rep. Donald Berry, Sr.
Thomas Nelson	Pat Averill
Eleanor West	Donn Gifford
Stephen G. Ward	Peter Merrill
Jim Peary	Dennis Lajoie

Task Force Members absent: 

Patricia Dyer	Patricia Aho
Geoff Green	Steve Wood

Senator Carey began the fourth and final meeting of the Task Force to Reduce the Burden of Home Heating Costs on Low-income Households with opening remarks and announced that representatives from maineoil.com would not be available to present their website to the Task Force as originally planned.

The focus of this final meeting was to finalize the report.  Tim Leet presented the report and reviewed it with the Task Force members.  The majority of the comments by the Task Force members dealt with the findings and recommendations section of the report.  Highlights of the comments and concerns by committee members included:

Recommendation #1:

• Remove “50,000 households” and change to “applicant households”.
• Remove “50,000 households” and change to “applicant households”.
• Add section to indicate that State will need to get consent from federal government to be able to use federal funds to pay back general fund for the working capital advance.
• Also need to change timing from “late spring or early summer” to July 1^st.
• Add a “prefunding qualification” statement to specify that the expenditure of these funds be subject to the advance funding of the LIHEAP program by Congress. The Fuel Assistance Reserve Fund may not be used if the Maine State Housing Authority reasonable anticipates that no federal fuel assistance funds will be received.

Recommendation #2:

• Concern was expressed from some members regarding the need for this recommendation.  Increasing the percent of LIHEAP funds allocated to weatherization services decreases the amount of funds available for fuel assistance benefits.  Weatherization does not put more money into the hands of low-income households. 
• Other Task Force members stressed the need to look at the long-term impact that weatherization measures have on energy consumption.  MSHA’s philosophy is that weatherization is a more permanent solution than fuel assistance, and should be maximized whenever possible.
• Recommendation by Task Force is to have the MSHA annually investigate in April the possibility of increasing the percentage of LIHEAP funds that can be transferred from 15% up to as high as 25% to provide additional resources for the weatherization program.  The recommendation that MSHA report to the Joint Standing Committees on Utilities and Energy, Health and Human Services and Appropriations and Financial Affairs by March 15, 2001 was removed.

Recommendation #3:

• Recommendation #3 that the Maine Public Utilities Commission continue to monitor the effects of interruptible gas services on the supply and price of home heating oil in the State of Maine was accepted as is.

 Recommendation #4:

• The Task Force members accepted the draft recommendation that the MSHA work with other affected state agencies and report to the Joint Standing Committees on Utilities and Energy and Appropriations and Financial Affairs on identifying the most cost-effective way to provide funding of any 25% non-federal share requirement for weatherization program costs.
• The Task Force also requested that a letter to Maine’s Congressional Delegation be sent asking that the 25% state match requirement be eliminated.

 Recommendation #5:

• The Task Force suggested that draft recommendation #5 be split into two parts.  Recommendation 5A would have MSHA and FAME work to establish a program that provides low interest loans or grants to Maine citizens for purchasing certain energy conservation improvements and report to the Joint Standing Committees on Utilities and Energy and Appropriations and Financial Affairs by March 15, 2001.
• Recommendation 5B recommends the authorization of a General Fund Bond Issue to capitalize and Energy Conservation Revolving Loan Fund.  It adds provisions for renters and for those homeowners who sell their houses shortly after completing the energy conservation measures.

 Recommendation #6 and #7:

•  After some discussion the Task Force members decided to incorporate draft recommendation #6 into draft recommendation #7.

 Recommendation #8: 

•  The Task Force changed draft recommendation #8 which requested that the State Planning Office and the Office of the Governor report on the feasibility of establishing an Office of Energy Conservation within the Executive Department to having the Maine State Housing Authority and the State Planning Office report on the feasibility of establishing an Office of Conservation within the Maine State Housing Authority.

• The Task Force also changed the requirement of producing a new Comprehensive Energy Conservation Plan every two year to producing a Comprehensive Energy Conservation Plan and updating it every two years.

Other recommendations:

•  The Task Force also changed the order of the draft recommendations so that they were presented in order of priority.

• The Committee also requested that a letter to the Congressional Delegation asking that they support the early release of the remaining LIHEAP funds.

Senator Carey and Representative Berry thanked everyone for their participation on the Task Force.

The meeting was adjourned at 11:45 am.

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