For Immediate Release Contact: Susanne Hindle
27 October 2002 (206) 275-4791 or
info@teamwatermark.com

Utilities in Washington state are being presented with new opportunities for permanently making energy more affordable for their low income ratepayers. More than 300,000 families in Washington have little or no ability to make regular payments on their energy bills. Although close to a fifth of these households receive help from the federally funded Low-Income Home Energy Assistance (LIHEAP) Program, this approach does not provide a long-term solution.
Through the federal Office of Community Services, Administration for Children and Families, within the Department of Health and Human Services, Washington state has received $1 million to implement the Residential Energy Assistance Challenge (REACH) program over a three year period and develop strategies that focus not on providing assistance to low-income households, but rather on permanently reducing their electric costs.

The state Department of Community, Trade and Economic Development, the Washington State Association of Community Action Agencies, Bellingham-based A World Institute for a Sustainable Humanity (A W.I.S.H.), and Washington utilities are working together on this project, with the goal of creating win-win solutions for utilities and customers.

“Our approach is to stabilize low-income households' energy costs and increase their ability to make regular payments,” says Michael Karp, President and Chief Executive Officer of A W.I.S.H., which is administering the REACH grant in Washington state. “Our proposed strategy permanently impacts the biggest energy problem low-income households have: Energy costs rising at a higher rate than the household incomes of LIHEAP clients.”

With rising energy costs outpacing income, low-income energy advocates across the country are realizing that federal assistance alone will never be enough to help low-income households make regular payments for home energy bills. The REACH project is addressing the inequitable energy burden of low-income households in the state compared to other segments of the population and working toward making low-income families selfsufficient.

Many other states and tribes also have received funding to develop and create solutions for self-sufficiency under the REACH program. The first REACH grants were distributed in 1996 to six states for multi-year programs. States that qualify can use the REACH funds to minimize the health and safety risks that result from high energy burdens on low-income families, prevent homelessness as a result of inability to pay energy bills, increase the efficiency of energy usage by low income families, and target energy assistance to individuals who are most in need.

“Two years into this project things are going extremely well,” says Will Graham with the state Office of Community Development.

The approach being taken in Washington is a shift from past thinking, but it builds on groundwork laid over many years, including a tax credit for utilities, legislation that clarified the ability of utilities to provide low-income programs, and a national trend toward providing utility funding for these programs. Recent rate increases throughout the state has given even more of a sense of urgency to this issue

In its first year, the REACH project has made major in-roads into Washington’s utility industry. Four regional meetings were held around the state to develop partnerships with organizations that will help with outreach to utilities. Community involvement, including the direct involvement of low-income representatives, is key to the project. The state’s 30 Community Action Agencies, whose boards of directors are mandated to have one-third low-income membership, are key partners in the REACH project. These agencies all have over 20 years experience in delivering low-income energy services to the poor. Some have been recognized nationally over the years for their creative approaches for energy assistance and weatherization.

Last year, a statewide conference to introduce utility managers and staff to the REACH program and goals was held in Everett at the Snohomish Public Utility District (PUD). Since then, interest in the program has been growing steadily. The REACH project goal of getting two investor-owned utility programs funded by ratepayers that will move low-incoming households off of LIHEAP assistance already has been exceeded, with Puget Sound Energy committing $8.6 million per year, Avista committing approximately $3 million per year, and PacificCorps committing $1.6 million per year.
Additionally, REACH has had success with a number of consumer-owned utilities.

“This is a great start,” says Scott Brannon, a consultant with low-income agencies in Puget Sound Energy’s service area. Although Puget Sound Energy’s program represents a modest .46 percent of the utility’s revenue, Brannon says it will roughly double the reach of the federal energy assistance program. “It doesn’t mean everyone who needs help will get it, but it means twice as many as were getting it before will get it.”

The uniqueness of the programs being established is that they are not a lowincome rate discounts, according to Bruce Folsom, Avista’s regulatory compliance manager. The programs provide funds for community action agencies for the equivalent of federal assistance funds.

“The strategy creates an empowerment with local community action agencies by making them more aware of how they can influence the decision makers to consider the needs of low-income people,” explains Bob Maxwell, an Alaska-based independent thirdparty evaluator for the REACH program in Washington state. “This is by far the most innovative approach and in its first years has shown a greater return on the dollar that any other program I’ve seen.”

Utilities are using REACH funds to contract with community action agencies to operate the energy assistance programs.

“We don’t want to replace good programs that are already out there, so we’re coordinating with existing programs and extending the reach and the number of people who are assisted,” explains Brannon.

This way, says Brannon, “We make sure the programs are operated by people who know the families in these areas best.”

Another goal of the national REACH program is to increase the utility contributions to the assistance programs. “Washington’s approach is the most successful in the nation in terms of getting vendor participation,” according to Maxwell.

The households being targeted by energy assistance programs are those who are the closest to being able to move off federal LIHEAP assistance. Karp estimates this to be around 68,000 households.

“Washington does a great job serving those, on average, who are the poorest of the poor. “We want to increase the self-sufficiency and decrease assistance to those who are most likely not to need help if they save significant dollars on their energy bills through rate reductions and targeted weatherization and efficiency retrofits,” says Karp.

The REACH project is presenting the state’s more than 60 energy utilities with comprehensive strategies for moving low-income households off of assistance program by providing rate discounts or other energy assistance programs to substantially reduce their energy bills. Because there are so many different types of utilities in the state – from co-ops in rural areas to large municipal utilities, the types of programs being created vary.

“The solution for each utility is different. They all have different structures and make up of their communities and people involved and how they potentially could put program together,” says Will Graham with the state Department of Community, Trade and Economic Development’s Office of Community Development.

Karp says the REACH partners will continue working with utilities in Washington that have not yet adopted a program. Another statewide conference is being considered in 2003, with smaller regional conferences occurring throughout the year.

During the coming year, much work will be done with smaller energy utilities in rural areas. In some rural areas, the percentage of low-income people often is higher than in large cities. Economies of scale make it more challenging in these areas because they don’t have the kind of resources to bear or staff people to spend time with the issues.

Graham says the agency want to reach out to community action agencies and utility companies who are have not shown an interest or have not come up with a lowincome program.

“We want to continue working with smaller PUD’s and municipal utilities,” says Graham. “We’re looking forward to talking to them and seeing if we can get programs going.”

In the coming year, more utilities will realize they need to do something to offset the impacts of rate increases on low-income people and REACH will provide a win-win solution that leverages existing resources.

Lists of contacts and resources for editors, reporters

A W.I.S.H. web site: www.awish.net


Bruce Folsom, Avista Utility, 509-495-8706


Don Andre, Community Action Agency from Spokane Neighborhood Assistance Program, 509-744-3370 x208


Becky Eberle, PacificCorps Utility, 503-813-5159


Jesse Garza, Northwest Community Action Agency in Yakima, 509-865-7630 x202


Scott Brannon, Consultant with low-income agencies, works with Puget Sound Energy, 206-217-9652


Bob Maxwell, REACH evaluator from Alaska, 907-479-5290


Will Graham, Washington State Office of Community Development, 360-725-2854