Utility discounts may be going to people who don’t need them

AUSTIN (KXAN) — Keeping the lights on can be pricey, and that’s why Austin Energy created the Customer Assistance Program to help reduce utility rates for low-income consumers. But the discounts may not be going to the people who need them.

“I was particularly astounded when I started seeing $1 million homes and $4 million homes on the list and I knew the system needed to be corrected,” said Paul Robbins who has been a consumer advocate and environmental activist in Austin for 37 years.

The Customer Assistance Program (CAP) helps cover water, waste water, electricity and some drainage and other services for those who have a hard time paying the bills.

Robbins said he had heard there were problems with the new automatic enrollment system and decided to check it out for himself. He put in a public information request for the participants in the Customer Assistance Program, reviewed their real estate assets and determined more than 1,100 customers in homes valued more than $300,000 were receiving utility discounts.

“I seriously doubt that there are many middle or upper-middle income people gaming the system. I think in many cases they don’t even know that they’re on this program,” said Robbins who believes the current system is flawed. “The screen needs to be fixed so they’re not pulling in middle and upper income people.”

Austin Energy said it uses a third party called Solix which locates customers who receive government assistance and automatically enrolls them into the CAP. People have to be on one of seven programs such as Medicaid; Children’s Health Insurance Program (CHIP); Supplemental Nutrition Assistance Program (SNAP); and Supplemental Security Income to be eligible.

“Let’s say grandma moved in and she has a Supplemental Security Income, a federal Social Security program, well then the automated enrollment will capture her at your home and you’ll be starting to get the discount,” said Robert Cullick, a spokesperson for Austin Energy. “If you’re on automatic pay you may never know this. The fact that somebody qualified and moved into your household makes you qualified for the program.”

Austin Energy said it doesn’t go off of a person’s income because that’s already been checked since a person qualifies for government assistance.

KXAN called several people whose name appeared on Robbins’ data. They said they didn’t know they were on the list, and some said they were either fostering children or had family members who were either elderly or disabled.

Austin City Council Member Bill Spelman also appeared on the list. He said he doesn’t know how he got on there and once he and his wife found out, they got off of it and arranged to pay the money back. Robbins said he told Spelman a couple weeks back and that the two agree the system needs to be fixed.

Austin Energy said people try to get off of the Customer Assistance Program (CAP), but are automatically put back on.

“Folks have called us and said, ‘Take us off the list, by all means we don’t need a discount, we don’t want a discount’ and it’s actually hard work to get them off the list the way the system is set up,” said Cullick.  “We may go and take them off that list and the next month the computer will sweep again and put them back on, so it’s a thing we have to manage, takes a lot of man power.”

Robbins wrote a letter to city council with his concerns stating that he believes the glitch is unintentional but the city should use resources to monitor the program and make sure it’s working correctly.

“I think everyone had the sincere interest in helping Austin’s disadvantage in mind. I think what happened is people didn’t monitor the new system,” said Robbins. “If someone would have spent less than a day troubleshooting, they would have found what I found.”

He believes if automatic enrollment continues, customers should have to be on at least two of the seven eligibility lists for CAP. Also that people should have to sign and return a waiver agreeing to enrolling in the program. He also believes there should be an asset screen to make sure low-income customers are receiving the discount.

The current automatic enrollment system is just two years old. Austin Energy said a nonprofit consumer group called Texas Ratepayers Organization to Save Energy strongly advocated to council for automatic enrollment for CAP in March 2012. Cullick said the group wanted to make sure everyone who was eligible for discounts would receive assistance for their bills.

Cullick said it has cost them more than it did in the past with the new system, but they’re serving more people. He said since 2012, the program has expanded from about 10,000 to about 43,000 people in 2014. He said in total they serve about 390,000 residential customers.

Austin Energy said the discount for electric, water, waste water and drainage services comes to $63 a month which is $756 a year.

“There may or may not have been some folks who were captured in that sweep who were high income and we’re going to look into that and if that is a problem, we’ll bring it to the city council,” said Cullick. “The heartbreaking part of it is that we do have a few people who are still trying to get on the waiting list for the program and the degree to which we’re serving anybody who doesn’t need the program, they’re occupying a space that could be occupied by a truly low income.”

“Paul has a notion and it’s not a bad one for gross purposes that if you lived in a home valued at $300,000 you shouldn’t be qualified for a discount, but we all know people who live in homes that maybe 50 years old and they’re on a $250,000 lot and it’s a $50,000 house and they have an income level that would require a discount for their utility services,” said Cullick. “The $300,000 methodology we don’t necessarily agree with but he’s done a good job for everybody raising the question of, ‘look, we have limited funds to give for these discounts, lets make sure they’re getting to the right people.'”

Robbins cites in his report that he agrees that not every customer in a home appraised more than $300,000 is wealthy and refers to a house purchased in 1976 in Central Austin that’s about 500 square feet in size. He said that homes in far Northwest Austin that have the same market value were purchased recently and are more than 3,000 square feet in size.

Robbins states his argument goes the other way, and that not everyone living in a home appraised at less than $300,000 is poor and is an example to show what he said is need for change in the program.

“By and large the right people are getting the money, but Paul Robbins did everyone a good service by looking into it and seeing if there were people getting the discount who wouldn’t be the people that you would anticipate or hope the money would go for,” said Cullick. “He found some based on broad criteria he thinks there are, we’re going to do an investigation and look into it and see how many folks there are, but let me make this clear, nobody who is on the program as far as we know shouldn’t be on the program, they’re eligible for the program.” The issue maybe the program is so broadly drawn that it captures folks that we didn’t really anticipate be captured by the program.”

Robbins said he screened about 100 people in six hours, but his entire study took him two to three weeks. He said he hopes city council takes this up on Dec. 11, 2014.

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