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Evaluation of LIPURP and other ALLEGHENY POWER Universal Service Programs





Evaluation of LIPURP and other
ALLEGHENY POWER Universal
Service Programs








Prepared by:
The RETEC Group, Inc.


59 Elm Street


New Haven, CT 06510


David Cross, Principal Evaluator and


Senior Project Manager

October 28, 2003


Contents

SUMMARY................................................................................................................................................... 1

A
NSWERS TO
K
EY
E
VALUATION
Q
UESTIONS
.............................................................................................. 4

1. INTRODUCTION .................................................................................................................................... 7

1.1

S
COPE AND
G
OALS OF
E
VALUATION
..................................................................................................... 7

Organization of Report........................................................................................................................... 7

1.2

E
VALUATION
C
ONTEXT
:

T
HE
A
LLEGHENY
P
OWER
S
ERVICE
A
REA
..................................................... 8

Residential Customers, Rates and Usage Levels .................................................................................... 8

Low Incomes in the Service Area.......................................................................................................... 10

1.3

U
NIVERSAL
S
ERVICE
P
ROGRAMS
........................................................................................................ 11

1.4

LIPURP

P
ROGRAM
D
ESCRIPTION
....................................................................................................... 13

Current Program Design...................................................................................................................... 13

Eligibility .............................................................................................................................................. 15

Determination of Customer Payment Amounts .................................................................................... 16

How Subsidies are Delivered ............................................................................................................... 18

Recent Changes to Program................................................................................................................. 21

2. EVALUATION OF PROGRAM OPERATIONS ............................................................................... 23

2.1

M
ETHODOLOGY OF
P
ROCESS
E
VALUATION
........................................................................................ 23

2.2

P
ROGRAM
A
DMINISTRATION
............................................................................................................... 23

Outreach and Application Process....................................................................................................... 23

USP Information Systems ..................................................................................................................... 25

LIPURP Program Costs ....................................................................................................................... 25

Recertification ...................................................................................................................................... 27

3. EVALUATION OF PROGRAM IMPACTS ....................................................................................... 28

3.1

M
ETHODOLOGY OF
I
MPACT
E
VALUATION
........................................................................................... 28

3.2

W
HO PARTICIPATES IN
USP
PROGRAMS
?............................................................................................. 29

Poverty Levels for Participants ............................................................................................................ 29

Household Characteristics ................................................................................................................... 30

Payment Plans and Usage Levels......................................................................................................... 31

Account Transience .............................................................................................................................. 35

3.3

W
HAT HAPPENS TO
LIPURP

P
ARTICIPANTS
? ...................................................................................... 35

3.4

A
CCOUNT
F
INANCIAL
P
ERFORMANCE AND
Q
UALITY OF
S
ERVICE
....................................................... 38

Aggregate Program Impacts ................................................................................................................ 38

Results of a Full Year in LIPURP......................................................................................................... 40

3.5

C
HANGES
O
BSERVED IN
A
CCOUNT
B
EHAVIOR
.................................................................................... 41

Month by Month Financial Analysis..................................................................................................... 41

Pre-Post Comparison of Account Performance ................................................................................... 45

Increasing Monthly Bills in LIPURP.................................................................................................... 46

Collection Activity Avoided for LIPURP Participants ......................................................................... 47


4.

OTHER UNIVERSAL SERVICE PROGRAMS ............................................................................ 49

4.1

H
OW
M
ANY
C
USTOMERS
H
AVE
P
ARTICIPATED IN
U
NIVERSAL
S
ERVICE
P
ROGRAMS
R
ECENTLY
? ...... 49

4.2

LIURP................................................................................................................................................. 49

4.3

L
INKAGE
............................................................................................................................................. 50

4.4

LIHEAP.............................................................................................................................................. 51

5. RECOMMENDATIONS ....................................................................................................................... 52

A
SSESS THE COSTS OF CHANGE
................................................................................................................. 52

F
INE
-
TUNE CURRENT PROGRAM DESIGN
.................................................................................................... 53

Adjust percent of income scale for family size...................................................................................... 53

Eliminate shortfall credits for full bill payers ...................................................................................... 53

Raise minimum payment amounts ........................................................................................................ 54

Allow for short periods when customers do not make their full co-payment........................................ 55

Revise the prompt payment reward ...................................................................................................... 55

Provide budget counseling ................................................................................................................... 55

Counsel high use customers. ................................................................................................................ 56

Verify and target needs......................................................................................................................... 56

Link to LIURP....................................................................................................................................... 58

Record keeping and administrative reporting ...................................................................................... 58

Help customers leave LIPURP ............................................................................................................. 60

Shorten the script.....................................................................................................................