Maryland's energy assistance program is expected to run $12 million over budget this year because of soaring demand from residents who can't afford their utility bills - another sign of how severely the economic downturn and rising energy bills are pinching consumers' wallets.
The state Department of Human Resources has seen a 14 percent jump in applications to the Electric Universal Services Program, which helps low-income ratepayers with current or past-due electricity bills. State officials project that they will pay out $64 million in benefits to more than 113,000 households by June 30, the end of this fiscal year.
The increased payouts are partly because of an 85 percent increase in electricity rates since 2006, and the problem could soon get worse: Last week, the Public Service Commission approved an additional 8 percent BGE rate increase, which will add $137 a year to a typical homeowner's bill. But the spike in the energy assistance program's enrollment has also stemmed from state efforts to find and assist those eligible for the benefits. In the past, state officials have cut off enrollment when the program runs out of money, but Gov. Martin O'Malley's administration decided this year to keep it open.
"My department is in the business of helping poor people," said Human Resources Secretary Brenda Donald. "We know that many people have multiple needs, and with the customers we serve, we're seeing the same downward trends in the greater economy. They are a leading indicator of recession, but a lagging indicator of recovery. Poor people come knocking on the door sooner than others. On top of that, there's been a great spike in utility rates, so it's a double whammy."
Donald said the department has seen enrollment increases this year in other aid programs, including Maryland's Temporary Cash Assistance program, the ranks of which have swelled from 48,000 last year to 51,000 this year. And, she said, people are staying on the rolls longer because "there are fewer jobs. And the jobs that may be available to these people are being filled by others, who may be getting second jobs."
The energy assistance program came up last week in a meeting of the governor's StateStat team, which was formed to make state government more efficient and accountable.
"We took an issue we were aware of, and we were able to watch very closely our outreach effort, applications and disbursements, and leverage that information to serve more people and not less," said Matthew Gallagher, O'Malley's deputy chief of staff, who oversees StateStat. "We weren't going to arbitrarily turn this off just because there were more people who needed assistance than there were funds for. You don't turn off the fire department. You've got to cope with these conditions."
Last month, none of the customers considered "low income" by Baltimore Gas & Electric Co. had their power cut off, said company spokeswoman Linda Foy. Still, the number of residential customers who are more than 30 days behind in paying their bills has swelled. This month, that figure is 13 percent of BGE's customer base, or more than 100,000 customers; in April last year, that figure was 8 percent. Foy said the number generally fluctuates between 9 percent and 15 percent.
Johanna Neumann, state director of the Maryland Public Interest Research Group, said oversubscription of the energy assistance program should not be surprising given that electricity prices have nearly doubled in less than two years. She commended O'Malley's decision to put more money in the program.
"This is literally the difference between people having their power switched off and people being able to power their homes," she said. "We need to be helping these people lower their consumption through energy efficiency programs and by the kinds of appliances they use. We don't do that by turning people's power off."
The administration won approval in this year's General Assembly session for several proposals that set a statewide target of reducing per-capita energy consumption 15 percent by 2015, which will be accomplished in part through a number of programs targeted to low- and moderate-income households. But those programs will be paid for through proceeds from carbon credit auctions, which advocates acknowledge could lead to increased costs for electric consumers.
This year, O'Malley also negotiated a settlement valued at $2 billion that ended the state's legal battle with BGE's parent company, Constellation Energy Group, and will provide the utility's 1.1 million residential customers with one-time rebates of $170.
In the past, the state has sometimes not used all of the money budgeted for energy assistance. This year, Donald said, the state has sought to enroll people who apply for other assistance and might not have been aware that they qualify for help with their energy bills, reaching them in some cases through community action agencies or other entities that administer the benefits. The department sent out notices to individuals who used assistance in prior years, she said.
"The governor was very concerned with the significant rate increases this year that we would have even more people in need of assistance," she said.
That prompted him to provide an extra $12 million for the fiscal year ending June 30 in two budget proposals that were approved in the recent General Assembly session. The state has appropriated $53 million for next year - less than they expect to spend in this year - meaning a continued shortfall in the program is likely unless benefits are reduced, something state officials said was unlikely.