Low Income Home Energy Assistance Program Case Study

Low Income Home Energy Assistance Program Case Study Free Online Research Papers Part I. Introduction The economy in today’s society is in an unstable position. The costs of living, including energy bills are increasingly expensive. The heavy impact of economic hardships has trickled down into the low-family income bracket. The increase in gas and electric bills are significantly affecting low-income families in the District of Columbia. To mention, D.C. has the highest rate of child poverty in the nation. The percentage of African-American D.C. children living in poor families was 62%.2; more than half of D.C.s children live in low-income households. However, families in poverty and the increase in gas prices is a new problem. This crisis derived many years ago, but it is a continuing issue that led to a many legislative acts and the creation of a energy assistance program. Enabling Legislation For the most part, industrialized economies relied on crude oil, and OPEC was their predominant supplier. The Low Income Home Energy Assistance Program was established as a result of the increase in oil prices resulting from the Organization of Petroleum Exporting Countries (OPEC) oil embargo in 1973. In detail, the 1973 oil crisis started in October 1973, when members of Organization of Arab Petroleum Exporting Countries (OAPEC), consisting of the Arab members of OPEC, plus Egypt and Syria proclaimed and oil embargo â€Å"in response to the U.S. decision to re-supply the Israeli military† during the Yom Kippur war which lasted until 1974. OAPEC declared it would limit or stop oil shipments to the United States and other countries if they supported Israel in the conflict. To address these developments, the Nixon Administration began parallel negotiations with both Arab oil producers to end the embargo, and with Egypt, Syria, and Israel to arrange an Israeli troop withdrawal fr om the Sinai and the Golan Heights after the fighting stopped. By January 18, 1974, Secretary of State Henry Kissinger had negotiated an Israeli troop withdrawal from parts of the Sinai. The promise of a negotiated settlement between Israel and Syria was sufficient to convince Arab oil producers to lift the embargo in March 1974. By May, Israel agreed to withdraw from the Golan Heights. Independently, the OPEC members agreed to use their leverage over the world price-setting mechanism for oil to stabilize their real incomes by raising world oil prices. The action followed several years of steep income declines after the recent failure of negotiations with major western oil companies earlier in the month. Figure 1: The fluctuation in oil prices through the years (wikipedia.org) Legislative History The mid-to-late -1970’s, a time marked by rapidly rising fuel prices, also marked the beginning of federal energy assistance funding for low income households. The first national program to help low-income households was created in early 1975 to assist families with energy conservation primarily through home weatherization. This assistance was provided through a new Emergency Energy Conservation Program (EECP), enacted as part of the head start, Economic Opportunity, and Community Partnership Act of 1974. The funds were administered by the Community Services Administration (CSA), the successor agency to the Office of Economic Opportunity, which was responsible for many of the programs created as part of the 1964 war on poverty. Beginning in 1977, funds were also made available through the CSA to help families directly pay for fuel. Congress continued to appropriate funds for energy assistance programs through FY 1980, at which point a new program, the Low Income Energy Assi stance Program (LIHEAP) was enacted as part of the Crude Oil Windfall Profits Tax Act of 1980. The program was introduced in the Senate as the Home Energy Assistance Act, the bill that would become the Crude Oil Windfall Profits Tax Act. LIHEAP allocated funds to states in order to help low income households pay their home energy cost (www.neada.org.) The LIHEAP statute provides for two types of program funding: regular funds sometimes referred to as block grant funds - and emergency contingency funds. Regular funds are allotted to states on the basis of the LIHEAP statutory formula, which was enacted as part of the Human Services Reauthorization Act of 1984. LEGAL CITATIONS FOR ENERGY ASSISTANCE PROGRAM ADMINISTERED AT THE FEDERAL LEVEL BY THE DEPARTMENT OF HEALTH HUMAN SERVICES STATTUTE AND DATE OF ENACTMNENT PUBLIC LAW TITLE CITATION FISCAL YEAR AUTHORIZED PROGRAM NAME Department of the Interior and Related Agencies Appropriations for Fiscal Year 198011/27/79 96-126 N/A Supplemental Energy Allowance Program for the Low Income Population 1980 Energy Assistance Program (EAP) Crude Oil Windfall Profit Tax Act of 19804/2/80 96-223 III Home Energy Assistance Act of 1980 1981 Low Income Energy Assistance Program (LIEAP) Omnibus Budget Reconciliation Act of 1981 (OBRA)8/13/81 97-35 XXVI Low Income Home Energy Assistance Act of 1981 1982-1984 Low Income Home Energy Assistance Program (LIHEAP) Human Services Reauthorization Act of 1984 (HSRA)10/30/84 98-558 VI Low Income Home Energy Assistance Act of 1981, as amended 1985-1986 LIHEAP Human Services Reauthorization Act of 1986 (HSRA)9/30/86 99-425 V Low Income Home Energy Assistance Act of 1981, as amended 1987-1990 LIHEAP Augustus F. Hawkins Human Services Reauthorization Act of 1990 (HSRA)11/3/90 101-501 VII Low Income Home Energy Assistance Act of 1981, as amended 1991-1994 LIHEAP National Institutes of Health Revitalization Act of 19936/10/93 103-43 XX Low Income Home Energy Assistance Act of 1981, as amended 1995 LIHEAP Human Services Amendments of 19945/18/94 103-252 III Low Income Home Energy Assistance Act of 1981, as amended 1995-1999 LIHEAP Coats Human Services Reauthorization Act of 199810/27/98 105-285 III Low Income Home Energy Assistance Act of 1981, as amended 2000-2004 LIHEAP Energy Policy Act of 200508/08/05 Low Income Home Energy Assistance Act of 1981, as amended 2005-2007 LIHEAP Mission Statement The mission of the Low Income Home Energy Assistance Program is to assist low income house- holds, particularly those with the lowest incomes that pay a high proportion of household income for home energy, primarily in meeting their immediate home energy needs. Objectives U.S Department of Health and Human Services (DHHS), Administration for children and Families, Office of Community Services, Division of Energy Assistance LIHEAP is a federally funded block grant program that is implemented at the State, Tribal, and Insular Area levels. Grantees serve from low income households who seek assistance for their home energy bills. LIHEAP has been operating since 1982 and its purpose is: to assist low-income households, particularly those with the lowest incomes, that pay a high proportion of household income for home energy, primarily in meeting their immediate home energy needs. The program encourages priority be given to those with the â€Å"highest home energy needs†, meaning low income households with a high energy burden and/or the presence of a â€Å"vulnerable† individual in the household, such as a young child, disabled person, or frail older individual. Some forms of assistance available to low income households through state LIHEAP programs include: financial assistance towards a household’s energy bill, emergency assistance if a household’s home energy service is shut off or about to be shut off, and a range of other energy-related services that States may choose to offer, such as weatherization improvements, utility equipment repair and replacement, and budgeting counseling. LIHEAP grantees, i.e., States, Tribes and Insular Area governments, receive block grant funding from the Administration for Children and Families to run their LIHEAP programs. Additionally, LIHEAP grantees may receive separate contingency funds, which are released at the Presidents discretion to supplement needs in areas during times of energy emergencies, such as extreme weather or high fuel prices. State grantees may also apply for additional Federal funds through the optional LIHEAP leveraging program where the federal government provides funds to grantees that leverage their Federal LIHEAP funds with non-Federal energy assistance resources. Each year LIHEAP also awards a limited amount of funds under the REACH program to grantees that provide innovative plans through local community-based agencies to help LIHEAP-eligible households reduce their energy vulnerability and minimize health and safety risks from inadequate home temperatures. (www.acf.hhs.gov) LIHEAP remains dependent on federal appropriations process for its funding, which means the amount granted to the program varies from year to year. Federal funds for LIHEAP have fluctuated from a high of 2.1 billion in FY 1985 to a low of 1.0 billion in FY 1997. In FY 2006, Congress appropriated 2 billion for LIHEAP, however President Bush approved an additional $1 billion ($500 million in regular program funds and 500 million as emergency contingency funds), bringing the total funding up to 3 billion. In June of 2006, the House Appropriations Committee voted to cut LIHEAP funding by one third, returning LIHEAP’s funding to the 2 billion levels. It remains to be seen whether the Senate will accept the proposed cuts. Source: LIHEAP Report to Congress for FY 2000, Table 2 Even with the relatively high funding level for FY 2006, LIHEAP program directors faced an ongoing crisis. According to the US Department of Health and Human Services, between 1981 and FY 2000, the number of federally eligible households rose over 49 percent; however, federal fuel assistance funds rose only 22 percent. As a consequence, the percentage of federally eligible households receiving LIHEAP assistance has declined sharply, from 36 percent in 1981 to 20 percent in FY 2000. [1] The funds allotted to states cannot meet growing needs for heating and cooling assistance. The total number of recipient households has declined from 7.1 million in 1981 to 3.9 million in 2000, as states have had to restrict eligibility to the neediest of the needy. Despite the additional $1 billion appropriated for FY 2006, only 15 percent of households that were eligible received LIHEAP assistance. Source: LIHEAP Home Energy Notebook for FY 2001, page 26, figure 3-20 The residential energy burden (including heating, cooling and all other energy uses in the home) for all U.S. households in 2001 was $1,537 per household, or 7.0 percent of income. For LIHEAP recipient households, the respective figures are $1,301 and 17.2 percent, nearly two and one half times the average burden. At this level, many poor and elderly, including households with children, are forced to choose between heating their homes and purchasing food and/or important medications. Increasingly, the energy markets at the wholesale level have been deregulated and behave now like other commodity markets where price volatility exists. But price volatility adversely affects the poor, because they enter the market at the highest times of demand. Low-income consumers generally do not have the disposable income to purchase fuels off-season at lower costs. Thus, while energy prices have remained fairly stable on an annualized basis, seasonal price spikes have had terrible effects on the poor (www.liheap.org.) Clientele/ Special Interest Groups The clientele for LIHEAP are vulnerable individuals in households, such as a young child, disabled persons, or frail older individuals. TANF recipients- The Temporary Assistance for Needy Families Low Income recipients Disability recipients LIHEAP has proven to have successful relationships between the government, businesses, gas and electric utilities and community-based social service organizations. The Public Service Commission requires Potomac Electric Power Company (PEPCO), and Washington Gas to offer discount rates to low-income residential customers. Their special interest groups and networks are listed below: Change Incorporation- offer emergency rent, mortgage, and utility assistance to residents in Ward 1 Columbia Heights Shaw Family Collaborative- strives to build neighborhood-based systems that strengthens and nurtures families and keeps children, youth, and families safe from abuse; provides emergency assistance Community Council for the Homeless at Friendship Place- provides FEMA emergency rent and utilities in Ward 3 Intergovernmental Relations LIHEAP intermingles with governmental agencies at various levels of government. First, the LIHEAP program is an in sync with their state government and federal government. This program is regional and located in Boston, Dallas, New York, Kansa City, Philadelphia, Denver, Atlanta, San Francisco, Chicago and Seattle. There are also many federal agencies collaborating with the low income home energy assistance program on a federal and state level. FEDERAL AGENCIES Department of Energy o Energy Hog Energy Efficiency Campaign o Low Income weatherization Program o Monthly Energy Review o Residential natural Gas Customer Choice Programs o Short-Term Energy Outlook Department of Health and Urban Development Federal Emergency Management Control and Prevention Federal Energy Regulatory Commission NATIONAL ORGANIZATIONS Alliance To Save Energy American Council for an Energy-Efficient Economy Part II. PROGRAM MANAGEMENT Introduction There are different strategies organizations use to deal with business of managing a program. Moreover, program management is the process of managing several projects, often with the intention of improving an organizations performance based on planning, organizing, staffing, directing, budgeting, controlling, and evaluation. Managing an effective and efficient program means that leadership acknowledges the daily operations and implements order to maintain and organization. Briefly, on December 5, 2009, I meet with Mr. William Vazquez, Chief of the Low Energy Assistance program regarding managing this program. He was very resourceful and disseminated information. This section of the paper entails the structure of the how LIHEAP operates in terms of providing quality services to the public. Planning When planning for a new fiscal year, a detailed plan is submitted to the Department of Health and Human Services (DHHS). This plan includes the District of Columbia’s code that designates Administration for Children and Families as the agency to administer the Low-Income Home Energy Assistance Program (LIHEAP) for the District of Columbia and present information based on Assurance, Certification to the Assurances, Components Operated Under LIHEAP, Use of funds, Alternate Use of Crisis Assistance Funds Eligibility, Outreach Activities, Coordination and Benefit Levels: Equal Treatment and Determination of Benefits. This will provide in depth information for the Office of Budget management to distribute a sufficient amount of dollars in order to service as many individuals in need. The Governor of DC has delegated authority to make the assurances and certifications required as part of the LIHEAP application to the Executive Director of the DC Department of Health and Human Services. The detailed plan for future funding entails planning and administering of funds under the titled amount not to exceed 10 percent of the funds payable to such state under the title for the fiscal year. Also the state will pay from non-federal sources the remaining costs of planning of the program. So in the beginning of the fiscal year , LIHEAP provides such services at the local level, outreach and intake functions for crisis situations and heating and cooling assistance that is administered by additional State and local governmental entities or community-based organizations (such as community action agencies, area agencies on aging and not-for-profit neighborhood-based organizations), and in States where such organizations do not administer functions as of September 30, 1991, preference in awarding grants or contracts for intake services shall be provided to those agencies that administer the low-income weatherization or energy crisis intervention programs. However, LIHEAP plans to provide services that encourage and enable households to reduce their home energy needs and thereby the need for energy assistance, including needs assessments, counseling, and assistance with energy vendors, and report to the Secretary concerning the impact of such activities on the number of households served, the level of direct benefits provided to those households, and the number of households that remain unserved. The federal government strategically plans and set guidelines for the program. In planning for worst case scenarios and state emergencies, management combines different approaches, urban and regional, crisis management and rational Organizing and Leadership LIHEAP use a cross-functional team approach; employees from various departments meet as a team and resolve problems regarding civilians in need of energy assistance. The division maintains organization by using a matrix system. What helps distinguish who is eligible for the program is the guidelines. Cutomers’ information is in a particular database for tracking. Quarterly, data is retrieved from the system to calculate for future statistics and to maintain order. Leadership in the department comes from Keith Anderson, Director of Energy, following the chief of each division. Mr. Anderson gives directions to the chiefs and they implement each task throughout each division. Below is LIHEAP organizational chart. Organizational Structure of LIHEAP and Public Health Service Director of Energy Mr. Keith Anderson Chief of LIHEAP Mr. William Vazquez Chief of SEU Ms. Teresa Lawrence CAC Ward One ________________________________________ COC Ward Two ________________________________________ CAC Ward Three ________________________________________ CAC Ward Four ________________________________________ CAC Ward Five ________________________________________CAC Ward Six ________________________________________CAC Ward Seven ________________________________________ Chief of Weatherization Menda Richardson Intake workers(15) ________________________________________Staff Assistant Mr. Keith Anderson- Has a strong background in Finance and was recently promoted from chief of LIHEAP to the Director of Energy. Mr. William Vazquez- is responsible for proving low-income families with energy assistance o Intake workers- checks the eligibility of customers using a matrix system Mrs. Teresa Lawrence- is responsible for the sustainable energy utility programs Mrs. Menda Richardson- is the responsible for home visits and weatherize those in need Leadership Mr. Anderson, Director of Department of Energy sets realistic standards, encouraging efficient, productive performance, sets direction, organizes, encourages, inspires, and motivates others to do what needs to be done for the benefit of the department and overall institution. Also he is assertive and self confident in a tactful and positive manner in the discharge of his responsibilities. LIHEAP reinvents its organizational chart less frequent then other organization. They have a great over turn rate. Majority of employees remain with this division for a numerous years and some exceed 15 to 20 years; it varies. Staffing and Personnel Employers understand their requirements for hiring new employees. Specifically, LIHEAP want employees to know and understand the responsibilities for the specific job. Next, the position is advertised, current employees are entitled to apply, resumes are screen, candidates are interviewed, and candidates are selected based on the criteria. Majority of LIHEAP staff are civilians. During the hiring process, human resource management and superiors look for specific qualities. Mainly, employees are hired based on competency of computer skills, they are also trained and must sustain a level of sufficient experience they must be competent, and computer literate. In taker’s job description entails using the matrix system that is software on the computer. Potential candidates must rank high in the personality dimension and emotional intelligence section. After employed, management take approaches to motivate and promote growth within the organization. They monitor employee performanc e, appraise mid-year performance, determine the outcomes of performance ratings, reward excellence, determine how to manage poor performance and keep records. Budget, Control, Evaluations The U.S. House of Representatives Committee on Appropriations began the process of working on the spending guidelines for the federal government for fiscal year 2010, which begins on October 1, 2009. The Subcommittee on Labor, Health and Human Services, Education and Related Agencies marked up the appropriations bill in its jurisdiction on July 10. The Low-Income Home Energy Assistance Program (LIHEAP) has received a funding level of $5.1 billion, the maximum allocation allowed by law and the same level of funding with which the program operated in FY 2009. The basic grant would receive $4.5 billion, and $590.3 million would be available in emergency contingency funds. The basic grant would be allocated as follows: $3.669 billion would be allocated under the Tier 1 part of the formula and $839.9 million by the Tier 2 and Tier 3 parts. Like FY 2009, the program will continue to allow states to use an eligibility ceiling of 75% of state median income; however, unlike FY 2009, the funds will not be required to be completely distributed 30 days after enactment of the bill. On July 17, the Committee on Appropriations held a markup and adopted the legislation. The legislation, with the LIHEAP provisions included, then passed out of the House on July 24, and was sent to the Senate. In the Senate, the legislation passed out of the Labor, Health and Human Services, and Education Appropriations Subcommittee on July 28, and then out of the Appropriations Committee on July 30 with the same LIHEAP provisions as in the House version. The legislation will be taken up by the Senate as a whole in September. Although the House of Representatives succeeded in passing the Labor, HHS and Education appropriations bill, as well as the other 11 spending bills, before the August recess, the Senate has only passed four bills. Due to the remaining amount of work, it is expected that a stop-gap spending bill will be introduced when Congress returns from the August recess to ensure that the federal government runs passed the September 30, 2009 deadline. It is unsure as to how long an initial Continuing Resolution will last, or how many will be required. There is also a possibility of an omnibus spending bill if the Senate is unable to complete its work or if there are complications in any conferences that may need to be held between the two chambers of Congress on any of the bills. A breakout chart provided by the National Energy Assistance Directors Association (NEADA) that states how the grant money would be distributed to the states based on the House legislation can be found at neada.org/appropriations/2009-08-05-FY10AppropriationStatus.pdf. FY 2009 was the first year that the LIHEAP program was funded at its full appropriations level. Due to the level of allocated funds, LIHEAP was not a beneficiary of the stimulus bill at the beginning of the year. The American Recovery and Reinvestment Act did not include additional funds for LIHEAP; instead, Congress decided that this program would be best served through the traditional appropriations process. The program is evaluated by contractors and subordinates are evaluated quarterly and yearly on performance. Human resources developed a new computerized system especially for evaluations. The E system measure the performance of intake processes. After assuring that performance elements and standards are understandable and fair employees and supervisors will sign the Position Description and Performance Plan Certification of the PMR. The approving supervisor, who is generally a level above the immediate supervisor, signs stating that the Position Description and Performance is accurate. Employees are monitored in a variety of ways by holding periodic meetings to be updated on employee progress. Within 30 days of the mid-point of the performance cycle, the supervisor must initial a formal, face-to face progress review with each employee. Conclusion The Low Energy Assistance Program is available is assist eligible low-income families with many barriers due to the increase in energy prices and there are executing the policy proficiently. Many citizens are being helped with expensive Pepco and Washington Gas utility bills. Now that many legislative acts have been passed, citizens that are mobile inclined and low-income recipients, some forms of assistance will remain available. Throughout each state, LIHEAP programs will include: financial assistance towards a household’s energy bill, emergency assistance if a household’s home energy service is shut off or about to be shut off and a range of other energy-related services that states may choose to offer, such as weatherization improvements, utility equipment repair and replacement, and budgeting counseling. Work Cited 1973 Oil Embargo. www.en.wikipedia.org. Http://www.wikimediafoundation.org/, 15 Oct. 2009. Web. 27 Oct. 2009. . Wolfe, Mark. LIHEAP Brief Issue. National Energy Assistance Directors Association, Nov. 2007. Web. Oct. 2009. . LIHEAP Summary. www.ach.hhs.gov. Low Energy Assistance Program, 27 Feb. 2008. Web. 25 Oct. 2009. . 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