Section 69.265. CAP design elements

The following design elements should be included in a CAP:

(1) Program funding. Program funding should be derived from the following sources:

(i) Payments from CAP participants.

(ii) LIHEAP grants.

(iii) Operations and maintenance expense reductions.

(iv) Universal service funding mechanism for EDCs.

(2) Payment plan proposal. Generally, CAP payments for total electric and natural gas home energy should not exceed 17% of the CAP participant’s annual income. The minimum payment should not be less than the guidelines in paragraph (3)(v)(A) and (B). Payment plans should be based on one or a combination of the following:

(i) Percentage of income plan. Total payment for total electric and natural gas home energy under a percentage of income plan is determined based upon a scheduled percentage of the participant’s annual gross income. The participating household’s gross income and family size place the family at a particular poverty level based on Federal poverty income guidelines.

(A) Generally, maximum payments for electric nonheating service should be within the following ranges:

(I) Household income between 0—50% of poverty at 2%—5% of income.

(II) Household income between 51—100% of poverty at 4%—6% of income.

(III) Household income between 101—150% of poverty at 6%—7% of income.

(B) Generally, maximum payments for gas heating should be within the following ranges:

(I) Household income between 0—50% of poverty at 5%—8% of income.

(II) Household income between 51—100% of poverty at 7%—10% of income.

(III) Household income between 101—150% of poverty at 9%—10% of income.

(C) Generally, maximum payments for electric heating or gas heating and electric nonheating combined should not exceed the following guidelines:

(I) Household income between 0—50% of poverty at 7%—13% of income.

(II) Household income between 51—100% of poverty at 11%—16% of income.

(III) Household income between 101—150% of poverty at 15%—17% of income.

(ii) Percentage of bill plan. The participant’s household payment contribution for total electric and natural gas home energy under a percentage of bill plan is determined using variables based on family size and income and the household’s energy usage level. A participant’s annual payment is calculated as a percentage of income payment and converted to a percentage of the annual bill. When a utility determines subsequent CAP payment amounts, a participant will continue to pay the same percentage of the total bill even if annual usage has changed.

(iii) Rate discount. The participant’s energy usage is billed at a reduced rate.

(iv) Minimum monthly payment. The participant’s payment contribution is calculated by taking the participant’s estimated monthly budget billing amount and subtracting the maximum, monthly CAP credit (previously called billing deficiency).

(v) Annualized, average payment. The participant’s payment contribution is calculated by determining the total amount the participant paid over the last 12 months and dividing by 12 months to determine a monthly budget.

(vi) An alternative payment formula. An alternative payment formula must be reviewed by the Bureau of Consumer Services and approved by the Commission.

(3) Control features. The utility should include the following control features to limit program costs:

(i) Minimum payment terms.

(A) A CAP participant payment for a gas heating account should be at least $18—$25 a month.

(B) A CAP participant payment for a nonheating account should be at least $12—$15 a month.

(C) A CAP participant payment for an electric heating account should be at least $30—$40 a month.

(ii) Nonbasic services. A CAP participant may not subscribe to nonbasic services that would cause an increase in monthly billing and would not contribute to bill reduction. Nonbasic services that help to reduce bills may be allowable. CAP credits should not be used to pay for nonbasic services.

(iii) Consumption limits. Limits on consumption should be set at a percentage of a participant’s historical average usage. A level of 110% is recommended. Adjustments in consumption should be made for extreme weather conditions through the use of weather normalization techniques.

(iv) High usage treatment. Utilities should target for special treatment those participants who historically use high amounts of energy.

(v) Maximum CAP credits. The annual maximum CAP credits should not exceed a total of $1,400 per participant.

(A) The annual maximum CAP credits per gas heating participant should not exceed $840.

(B) The annual maximum CAP credits per nonheating customer should not exceed $560.

(C) The annual maximum CAP credits per electric heating participant should not exceed $1,400.

(vi) Exemptions. A utility may exempt a household from a CAP control feature if one or more of the following conditions exist:

(A) The household experienced the addition of a family member.

(B) A member of the household experienced a serious illness.

(C) Energy consumption was beyond the household’s ability to control.

(D) The household is located in housing that is or has been condemned or has housing code violations that negatively affect energy consumption.

(E) Energy consumption estimates have been based on consumption of a previous occupant.

(4) Eligibility criteria. The CAP applicant should meet the following criteria for eligibility:

(i) Status as a utility ratepayer or new applicant for service is verified.

(ii) Household income is verified at or below 150% of the Federal poverty income guidelines.

(iii) The applicant is a low income, payment troubled customer. When determining if a CAP applicant is payment troubled, a utility should select one of the following four options to prioritize the enrollment of eligible, payment troubled customers:

(A) A household whose housing and utility costs exceed 45% of the household’s total income. Housing and utility costs are defined as rent or mortgage/taxes and gas, electric, water, oil, telephone and sewage.

(B) A household who has $100 or less disposable income after subtracting all household expenses from all household income.

(C) A household who has an arrearage. The utility may define the amount of the arrearage.

(D) A household who has received a termination notice or who has failed to maintain one payment arrangement.

(5) Appeal process. The utility should establish the following appeal process for program denial:

(i) If the CAP applicant is not satisfied with the utility’s initial eligibility determination, the utility should use utility company dispute procedures in § § 56.151 and 56.152 (relating to general rule; and contents of the utility company report).

(ii) The CAP applicant may appeal the denial of eligibility to the Bureau of Consumer Services in accordance with § § 56.161—56.165 (relating to informal complaint procedures).

(6) Administration. If feasible, the utility should include nonprofit community based organizations in the operation of the CAP. The utility should incorporate the following components into the CAP administration:

(i) Outreach. Outreach may be conducted by nonprofit, community-based organizations and should be targeted to low income payment troubled customers. The utility should make automatic referrals to CAP when a low-income customer calls to make payment arrangements.

(ii) Intake and verification. Income verification may be completed through a certification process that is satisfactory to the utility or certification through a government agency. Intake may also be conducted by those organizations and should include verification of the following:

(A) Identification of the CAP applicant.

(B) The annual household income.

(C) The family size.

(D) The ratepayer status.

(E) The class of service—heating or nonheating.

(iii) Calculation of payment. Calculation of the monthly CAP payment should be the responsibility of the utility. The utility may develop a payment chart so that the assisting community-based organizations may determine payment amounts during the intake interview.

(iv) Explanation of CAP. A complete and thorough explanation of the CAP components should be provided to participants.

(v) Application for LIHEAP grants. An application for LIHEAP grants, to the extent that is available, should be completed during the intake interview.

(vi) Consumer education and referral. CAP consumer education programs should include information on benefits and responsibilities of CAP participation and the importance of energy conservation. Referrals to other appropriate support services should also be a part of consumer education.

(vii) Account monitoring. Account monitoring should include both payment and energy consumption monitoring.

(viii) Annual reapplication. An annual process that reestablishes a participant’s eligibility for CAP benefits should be required.

(ix) Arrearage forgiveness. Arrearage forgiveness should occur over a 2- to 3-year period contingent upon receipt of regular monthly payments by the CAP participant.

(x) Routine management program progress reports. Progress reports that may be used to monitor CAP administration should be prepared at regular intervals. These reports should include basic information related to the number of participants, payments and account status.

(7) Default provisions. The failure of a participant to comply with one of the following should result in dismissal from CAP participation:

(i) Failure to make payments will result in the utility returning the participant to the regular collection cycle and may lead to termination of service. By returning the customer to the regular collection cycle, the utility does not need to enter into a new payment arrangement but may begin the termination process. At a minimum, the utility should inform the participant of the consequences of defaulting from the CAP. To avoid termination of service, the CAP participant must pay the amount set forth in the termination notice prior to the scheduled termination date. This amount should generally be no more than two CAP bills.

(ii) Failure to abide by established consumption limits.

(iii) Failure to allow access or to provide customer meter readings in 4 consecutive months.

(iv) Failure to report changes in income or family size.

(v) Failure to accept budget counseling, weatherization/usage reduction or consumer education services.

(vi) Failure to annually verify eligibility.

(8) Reinstatement policy. A customer may be reinstated into CAP at the utility’s discretion.

(9) Coordination of energy assistance benefits. In a CAP, the utility should include the following to coordinate a participant’s energy assistance benefits between it and other utilities:

(i) A LIHEAP grant should be designated by the participant to the utility sponsoring the CAP.

(ii) A utility may impose a penalty on a CAP participant who is eligible for LIHEAP benefits but who fails to apply for those benefits. A utility should use this option carefully and the penalty should not exceed the amount of an average LIHEAP cash benefit. If a customer applies for a LIHEAP benefit but directs it to another utility or energy provider, the CAP provider should not assess a penalty.

(iii) The LIHEAP grant should be applied to reduce the amount of CAP credits.

(iv) A utility may impose a penalty on a CAP participant who is eligible for LIHEAP benefits but who fails to apply for those benefits. A utility should use this option carefully and the penalty should not exceed the amount of an average LIHEAP cash benefit. If a customer applies for a LIHEAP benefit but directs it to another utility or energy provider, the CAP provider should not assess a penalty.

(10) Evaluation. The utility should thoroughly and objectively evaluate its CAP in accordance with the following unless otherwise modified in § 54.76 (relating to evaluation reporting requirements).

(i) Content. The evaluation should include both process and impact components. The process evaluation should focus on whether CAP implementation conforms to the program design and should assess the degree to which the program operates efficiently. The impact evaluation should focus on the degree to which the program achieves the continuation of utility service to CAP participants at reasonable cost levels. The impact evaluation should include an analysis of the following:

(A) Customer payment behavior.

(B) Energy assistance participation.

(C) Energy consumption.

(D) Administrative costs.

(E) Program costs.

(ii) Time frame. Unless otherwise modified by § 54.76, the time frame for evaluations should be as follows:

(A) Following the expansion of a CAP or subsequent to substantial revision of an existing CAP or alternate program design, a one-time process evaluation completed by an independent third-party should be undertaken during the middle of the second year.

(B) Program impacts should be evaluated by an independent third-party at no more than 6 year intervals and submitted to the Commission.

(iii) Evaluation plan approval. The utility should submit the impact evaluation plan to the Bureau of Consumer Services for review and approval.

The provisions of this § 69.265 adopted July 24, 1992, effective July 25, 1992, 22 Pa.B. 3914; amended May 7, 1999, effective May 8, 1999, 29 Pa.B. 2495; amended May 7, 2010, effective May 8, 2010, 40 Pa.B. 2443. Immediately preceding text appears at serial pages (255453) to (255460).

Notation

Cross References

This section cited in 52 Pa. Code § 69.261 (relating to general); 52 Pa. Code § 69.262 (relating to definitions); 52 Pa. Code § 69.263 (relating to CAP development); and 52 Pa. Code § 69.267 (relating to alternative program designs).