Temporary fix may help more needy get heat help

By Kathy Barks Hoffman

Associated Press

LANSING (AP) -- A state program that used to provide heating assistance to 95,000 low-income Michigan residents remains in limbo, but a temporary solution may be worked out this week to help more people stay warm.

State Rep. Ken Horn said Friday he's hoping a meeting Wednesday between Gov. Rick Snyder policy director Bill Rustem, state utility regulators, lawmakers and officials from the attorney general's office, Detroit Edison and Consumers Energy will lead to a fix until another way to fund the program can be found.

Horn, R-Frankenmuth, would like to see the two utilities agree to turn on indigent customers' heat and keep it on through this winter, then roll the unpaid bills into their next rate increase. Consumers Energy spokesman Jeff Holyfield said his company would prefer to tap the money already collected from ratepayers and being held in escrow.

Either way, Horn expects some help will be offered to low-income residents.

"This is a high priority issue for the Senate, the House, the governor's office," said Horn, who heads the House Energy and Technology Committee. "I doubt that we're going to find some magic pot of money. But we can at least figure out some strategy."

A state appeals court in July struck down the financing system used by Michigan's Low Income and Energy Efficiency Fund, and the state Legislature has not enacted a new one to replace the $90 million collected from customers of Detroit Edison and Consumers Energy. The fund was expected to pay $60 million this year toward home heating assistance and $30 million to weatherize homes and public buildings.

Without the state program in place, thousands of low-income residents have turned this month to the federal Low-Income Home Energy Assistance Program to pay off past utility bills and get their heat turned back on.

But they're not totally in the clear. While Michigan law forbids utility companies from shutting off heat between Nov. 1 and March 30 to customers aged 65 and over, others face being disconnected if they don't pay at least a portion of their monthly bills or show that they've applied for heat assistance -- help that might no longer be there.

"Even the threat of a shut-off can be very daunting," said former Michigan Public Service commissioner Bob Nelson. Residents who fear losing their heat "may decide not to buy enough food because they want to pay their gas bill and that kind of thing. ... (Anybody) under 65 could be shut off if they don't pay."

The one-time state utility regulator now represents agencies such as The Heat And Warmth Fund -- or THAW -- that funnel government heat help to the needy. The groups tried to get some of the money already collected from ratepayers released as part of a settlement on the LIEEF court suit, but state officials didn't accept the offer.

Department of Human Services official Brian Rooney knows people are hurting. Requests for home heating assistance have increased this month as people rushed to get their utility bills paid so they could get their heat turned back on before autumn temperatures got too chilly. He said seniors on fixed incomes may be especially vulnerable.

"I worry about the grandmothers and grandfathers who got more help in the past but may not be able to get that help this year" because of shrinking assistance levels, Rooney said. "When I think about the dangers of less money, that's who I think about."

If Congress cuts the LIHEAP funding as expected this fiscal year, Michigan will get around $110 million to help low-income residents with heat assistance, only half as much as it got last year. Residents used to be able to get as much as $800 to pay off their utility bills once they received a shut-off notice. This year, with federal funds reduced, they're likely to get only $300 to $400, Rooney said.

Although both Consumers Energy and Detroit Edison operate their own programs to help the needy pay their utility bills, LIEEF went further that those programs or the federal one. The state program, which has been operating since 2002, not only gave low-income residents ongoing help with their heat bills, it sent crews to weatherize their homes and even replaced broken furnaces.

But the appeals court ruled that lawmakers failed to authorize the LIEEF fee when they rewrote state energy laws several years ago. The Association of Businesses Advocating Tariff Equity, which filed the suit to stop the money from being collected, contends that only residential ratepayers should be assessed since industrial and commercial users get no benefit from the fund.

Horn said he and Senate Energy and Technology Committee Chairman Mike Nofs, R-Battle Creek, plan to discuss a long-term solution to the heating assistance issue during a joint meeting of their two committees on Nov. 29.

Horn's proposing a change that would require all residential ratepayers to pay into the fund since all are eligible to get help from it. In the past, only customers served by Detroit Edison and Consumers Energy paid in. Commercial and industrial customers would be exempt.

In the meantime, he hopes Wednesday's meeting will kick-start a temporary solution that will help residents keep the heat on this winter.

"If I don't solve this problem today, then uncollectibles will rise" at the utility companies, Horn said. "It's either pay me now or pay me a lot more later."

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Follow Kathy Barks Hoffman on Twitter @kathybhoffman

Published: Tue, Nov 1, 2011