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How one man got Austin Energy to reform its discounts to low-income customers

Jack Craver's picture
Reporter Energy Industry

I'm a freelance reporter and copywriter based in Austin, Tex. Most of my local reporting focuses on the issues facing city government in this rapidly-growing metropolis, notably land use and...

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  • Mar 21, 2018

Paul Robbins has been a thorn in the side of Austin Energy for decades. The longtime environmentalist and consumer advocate comes to City Council meetings regularly to bemoan bad decisions by the municipally-owned utility.

One of his most prominent crusades has been against wasted money in the utility’s Consumer Assistance Program, which is supposed to offer discounts to low-income ratepayers. Robbins, however, has long contended that many of the program’s beneficiaries aren’t low-income at all. He has done this by highlighting expensive homes –– some exceeding $1 million –– that are enlisted in the program.

In presentations to City Council, Robbins displayed photos of the magnificent homes that some of the program beneficiaries live in.

How is it possible that a program designed to help the poor could be subsidizing the wealthy? The problem is that the program is not based on income, but rather whether a member of the household is enrolled in one of any number of anti-poverty programs, such as Medicaid or SNAP. That means that in some cases a wealthy homeowner who is housing a relative enrolled in one of those programs ends up getting a discount on their utility bill.

In the past, Robbins has demanded that the utility put in place measures to prevent the abuse of the program. Among other things, he suggested that AE verify the incomes of enrollees. That suggestion earned eyerolls and resistance from both the utility and some other advocates for low-income customers, who reasoned that an effort to crack down on abuse would cost more money than it would recover and would likely result in some deserving customers getting kicked out of the program.

However, Robbins pointed to examples of other utilities that put in place accountability measures with apparent success. Sacramento’s municipally-owned utility has a customer assistance program that does not have automatic enrollment but more customers are enrolled in that program than in Austin’s.  

Robbins says he called up the Sacramento Municipal Utility District to find out how they did it. He was told that there were three to four full-time employees who handled enrollment. That would likely cost much less, he says, than Austin Energy’s automatic enrollment program, which runs over $1 million a year in administrative costs.

While Austin’s City Council has balked at the idea of getting rid of automatic enrollment, it agreed in 2017 to require the utility to remove people from the program if they live in homes with improvements (not the land, just the structure) is assessed at more than $250,000 and their income is above 200 percent of the federal poverty level. The new rules will also bar anybody with more than one residence from the program.

The way it works now, Austin Energy notifies customers in homes above that threshold that they will be removed from the program unless they provide evidence that their income is lower than 200 percent of the FPL. If the customers don’t respond, they are removed.

That policy took effect this year, but it will take a few more months before we know what impact it has had, including how many customers are being removed from the program.

“The short story is that we will not actually know how well the new system works until late spring,” Robbins tells me in an email. “Sigh...we have likely lost several million dollars over the last 5-1/2 years because of this.”

Robbins hopes to push for further changes to the program to encourage greater efficiency. In addition to ditching automatic enrollment, the utility should cap discounts after the third tier of electricity use (Austin has five tiers for residential use. The third tier goes up to 1,500 kilowatt hours per month)

“The Council should remove the CAP volume discount for the 4th and 5th tiers of electric consumption and redistribute this money more fairly among all CAP participants,” Robbins wrote in a letter to Council last year. “Redistributing this money could increase the average annual electric discount of about $250 per customer by approximately $60 while encouraging energy conservation.”

Despite his constant criticism of the utility, Robbins says that he generally gets along well with its leadership. His efforts have also earned respect from political leaders: in 2007 City Council voted to name a cooling plant after him.

Richard Ford's picture
Richard Ford on Mar 27, 2018

We need more people like Mr. Robbins who speak up when something is not right.  How are low income residents treated in your state?  Is there a high "Customer Charge" or "Basic Service Charge" that, in effect, results in higher prices per kWh for residents in small apartments that for residents who live in mansions? 

Jack Craver's picture
Thank Jack for the Post!
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