Million-dollar homes benefiting from utility discounts

(KXAN Photo)
(KXAN Photo)

AUSTIN (KXAN) — A city program meant to provide utility bill discounts for those in need is still giving money to customers who live in million-dollar homes.

City leaders were first alerted about program pitfalls more than a year ago, and Thursday, we learned only some wealthy Austin Energy customers have been removed from its Customer Assistance Program (CAP).

“There is only so much money that is dedicated to the poor people, so it needs to go to the right people for the right reason,” consumer advocate Paul Robbins said.

KXAN first sat down with Robbins and Austin Energy about the issue in December 2014. All this time later, “There are still mansions on the Customer Assistance Program,” Robbins said.

Austin Energy’s CAP discounts help reduce customers’ utility bills an average of $650 a year. Households automatically receive a discount if any person living in a household qualifies for one of the following assistance programs:

  • Medicaid Program
  • Supplemental Nutrition Assistance Program (SNAP)
  • Children’s Health Insurance Program (CHIP)
  • Telephone Lifeline Program
  • Travis County Comprehensive Energy Assistance Program (CEAP)
  • Medical Access Program (MAP)
  • Supplemental Security Income (SSI)

Austin Energy’s 41,000 CAP customers cost about $10 million annually. The program is funded through community benefit charges the rest of Austin Energy customers pay, a fee that’s based on consumption.

CAP accounts for a part of the Community Benefit Fund charge on the electric portion of customers’ bills. The program is billed at 0.172¢, multiplied by the total kilowatt-hour (kWh) consumption. For example, for a 1,000 kWh bill, the charge would be $1.72.

Breakdown for total Community Benefit Charge:

Community Benefit Charges – (¢ per kWh)
Customer Assistance Program 0.172¢
Service Area Street Lighting 0.093¢
Energy Efficiency Programs 0.289¢

Public records indicate throughout the last three months, around 60 households in the West Lake Hills zip code 78746 have been enrolled in CAP. Oftentimes, Austin Energy says, it could be parents living in the home who receive social assistance that triggers enrollment. Robbins agreed, adding many times, people may not even know they’re enrolled.

“I had friends that were on this program and when I called them up and asked them, a couple of them did not even know they were enrolled,” he said.

The previous city council approved an automatic enrollment system in 2012. Responsibility to change the system rests in the hands of city council.

KXAN asked Council Member Don Zimmerman why it’s taken so long to fix what’s broken in the system and identify homes that may technically qualify for assistance because of certain tenants, but have the means to pay for their bills.

“I’m struggling to understand that,” Zimmerman said. “It’s hard to get any reforms done, even when the citizens help us and work on it, it’s still hard to get reforms through this city management.”

JJ Gutierrez, Austin Energy’s Vice President of Customer Care Services, said an improved system screened out roughly 1-5 percent of CAP households, meaning they won’t automatically be enrolled. Additionally, beginning this month, Austin Energy will identify any customer whose home improvement value has increased by $250,000 over the past year.

“As the year goes by, you’ll see more and more of those homes falling off the list,” Gutierrez said. “I think we’ve done a lot to screen out those that aren’t eligible and those that may be eligible but would require further investigation.”

Because of that additional screening, Gutierrez said, “We have been able to screen some of the ineligible folks out of the program and replace them with folks that were on the wait list.”

In fact, Austin Energy now has no wait list for its CAP program. Previously, there were more than 1,500 customers in need on the list.

Still, Robbins said more work needs to be done. Consider this: Austin Energy can only remove households from CAP if residents are no longer enrolled in programs that make them eligible. Otherwise, all the utility can do is send a letter to the home, asking if they really need the assistance

According to a city memo dated Aug. 24, 2014, addressed to the mayor and city council members from the city manager:

This past spring, Austin Energy staff, working in conjunction with the enrollment vendor, implemented a tighter matching requirement in the matching software. The tighter match identified approximately 4,000 households previously qualified for the program that didn’t meet the tighter screen. Each of those households received a letter notifying them of the option to retain their enrollment by calling the contact center maintained for the program. Approximately 600 households did so and retained their enrollment. The remaining 3,400 accounts were removed from the program, but each received a second notification of their status and the opportunity for re-enrollment through the contact center.”

“After a year and a half, this should be a priority,” Robbins said.

Thursday, council directed Robbins to meet with Austin Energy and come back next month with ideas to fix the system. He suggests automatically enrolling people if their name is on the bill and offer an income qualification option.

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