Congressional Correspondence

The signed letter can be viewed at the link at the bottom of this page.

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February 28, 2023

The Honorable Frank Pallone, Jr.
Ranking Member, Committee on Energy and Commerce

Diana DeGette
Ranking Member, Subcommittee on Energy, Climate, and Grid Security

Kathy Castor
Ranking Member, Subcommittee on Oversight and Investigations

2125 Rayburn House Office Building
Washington, DC 20515

Dear Ranking Members Pallone, DeGette, and Castor:

Thank you for your outreach. The American Public Gas Association (“APGA”) is the trade association representing more than 730 communities across the U.S. that own and operate their retail natural gas distribution entities. These include not-for-profit gas distribution systems owned by municipalities and other local government entities, all accountable to the citizens they serve.¹ We are happy to help the Committee understand how our members are handling the volatility in home energy costs, which correlates with an increase for utility bill payment assistance. As well, we want to briefly offer perspective on what could be driving the ups and downs in the energy markets.

Public gas utilities are committed to serving all their customers, especially the most vulnerable, ensuring none are left without access to energy. In fact, with support from our Board of Directors, one of APGA’s five advocacy priorities for 2023 is “Protecting Gas Consumers from Price Volatility in Emergencies.” With this focus, the trade association has been and will continue to engage policy makers, both on Capitol Hill and within federal agencies, to act, limiting impacts to all gas consumers from volatile energy costs.

Answers to the questions the Committee raised are addressed below, but at the outset, APGA would like to recognize that the price volatility, which includes the high natural gas prices seen in recent months, could be best resolved with more infrastructure. Americans experiencing the highest prices, such as in the northeast, do not have adequate pipeline access. These constraints effectively illustrate the economic principle of supply and demand, meaning natural gas prices are high because there is a large demand that supply cannot meet.

APGA is very supportive of efforts to fully fund the Low-Income Home Energy Assistance Program (“LIHEAP”), and we hope the Committee will work with your colleagues to achieve that goal. However, collaborating with other Congressmen to pass permitting reform legislation would be equally helpful in addressing the high energy costs many consumers are experiencing.

APGA would also like to highlight another advocacy priority that, with appropriate Congressional action, would help to address high energy prices. The Natural Gas Act (“NGA”) and the Federal Power Act (“FPA”) establish the authority of FERC to regulate natural gas and electric entities, respectively. Both statutes allow rate complaints to be filed and for the Federal Energy Regulatory Commission (“FERC”) to determine whether the rates interstate transmission entities are charging is fair. If FERC determines a rate is unjust or unreasonable, the FPA allows FERC to order an electric transmission entity to refund any overcharges from the time the complaint was filed. The NGA, however, does not grant FERC refund authority in natural gas rate cases. These rate review cases can take years to resolve, and transmission pipelines have no incentive to work towards a swift resolution due to the lack of having to refund overcharges collected while the case is in progress.

As mentioned earlier, our country lacks sufficient natural gas infrastructure, so most public gas systems rely on a single transmission pipeline for supply. These communities are held captive and have no alternatives if they are being charged an unfair rate. In 2021 alone, 7 of the most profitable interstate pipelines received almost $900 million above a reasonable rate of return.² Reforming Section 5 of the NGA would benefit all gas consumers, including large industrial companies and electricity customers who depend on gas-fired generation. Public natural gas systems are not-for-profit, so FERC’s lack of refund authority is an especially significant challenge to keeping rates low for the communities APGA’s members serve.

In the last two Congresses, legislation has been introduced to reform Section 5 of the NGA.³ If passed, these bills would have granted FERC the same refund authority in natural gas pipeline rate cases that the regulator already has in electric transmission rate cases under the FPA. Enacting such legislation would create parity between the statutes and help ensure that public gas systems can continue to supply their customers, American consumers, with affordable, reliable, and efficient energy.

APGA does urge continued funding of LIHEAP, since it continues to be extremely important to our members’ communities. Below please find input to the questions the Committee raised pertaining to the program.

1. Given high energy costs, how did your member utilities, particularly those in cold weather states, plan for this winter season? Please include examples of customer assistance programs, program enrollment strategies, customer communications, and any additional assistance funding (beyond LIHEAP) that your members are pursuing.
Several APGA member utilities have programs to help customers during the colder months. Here are a few examples:

• • One APGA member has a program that provides a fixed monthly bill (e.g., customer only pays maximum of 4% of household income) for those that qualify, which is more affordable for many households.
  • Another member used appropriated funding to the Tennessee Valley Authority (“TVA”) during the Coronavirus (“COVID-19”) Pandemic to establish a utility bill assistance program to assist customers based on their energy consumption, regardless of income level. To promote and administer this effort, the utility partners with a local Community Action Committee (“CAC”).
  • As well, an emergency bill assistance program was established by one member, and it is offered in partnership with the local CAC. It is nearly four decades old and allows for utility customers or community members to donate funds to assist those that may need bill payment help during a crisis or in case of unusually high winter bills. In conjunction with several community partners, the utility annually encourages donors to contribute. There are also efforts to make those in need aware of what is available.
  • Another APGA member has a similar voluntary program, supported through its customers’ tax-deductible contributions. Also, this utility matches contributions, up to $20,000 each year.
  • Hardship grants up to $1,500 for customers at risk of termination or without service are also offered by one APGA member.

Public gas utilities work hard to ensure their customers are as aware as possible of high energy costs. Many reach out through a variety of communications, including social media posts, information on websites, and bill insert notices. This outreach is also an opportunity to educate customers on energy-saving tips, home weatherization opportunities, and the assistance and predictable billing programs mentioned earlier.

Finally, whether it is ensuring reasonable utility bills, decreasing emissions, or preserving natural resources, the efficient use of energy is critical to meet these objectives.

• • Some APGA members offer residential customers a rebate when switching to a tankless natural gas water heater. If appropriate for the occupant based on need and house design, tankless natural gas water heaters, also known as demand-type or instantaneous water heaters, provide hot water only as it is needed. They do not produce the standby energy losses associated with storage water heaters, which can save consumers energy and money.
  • If new space heating equipment is needed, APGA member utilities may provide a rebate for a natural gas furnace or boiler. With efficient natural gas space heating equipment, the resident can benefit from improved comfort, increased value of their home and property, and more for their money with lower heating bills.
  • Many APGA member gas systems offer rebates to add insulation to their customers’ home attics. Upgrading the insulation is one of the most cost-effective ways to increase comfort, lower heating bills, and improve a home’s energy efficiency.
  • Tenants can save money on heating bills by simply resetting the thermostat when asleep or away, and this can be done automatically without sacrificing comfort by installing a programmable thermostat. To help their customers have energy efficient homes, APGA members may be able to cover the cost of a programmable thermostat and the expense of installing it. Some APGA members may also help properly dispose of old thermostats that may contain mercury.
  • One specific example of these energy efficiency upgrades is an APGA member utility’s partnership with TVA that funds energy efficiency upgrades just for homes of low-income customers.

2. How can LIHEAP better account for heating and cooling needs that result from climate change and extreme weather, such as winter storms or summer heat waves?

APGA encourages continued support for the LIHEAP program. If the energy price volatility continues, then, when it is higher, a bigger percentage of the resident’s income will be needed. Especially in states with colder weather, LIHEAP should be used for the energy source that would be life threatening to go without: heat. If possible, to help local CACs and utilities stretch funds as far as they can, the projected costs of energy, as well as weather trends should be examined to ensure appropriate LIHEAP benefit amounts for applicants.

3. Are your members developing long-term strategies to mitigate the impact of increasing extreme weather events as a result of climate change on customers’ bills, aside from LIHEAP assistance? If so, please provide details on the types of emergency assistance being considered.

Most of our members’ focus is on normalizing volatile energy prices through several approaches, which in turn will minimize customer bills. Many APGA members are implementing hedging tactics for purchasing energy, with some terms being much longer to mitigate price risk potential. Energy buying strategies, in concert with assistance programs, levelized billing, payment arrangement, and weather normalization mechanisms for rates aim to help mitigate customer issues related to higher commodity costs. There is also an effort to have residents weatherize their properties through available programs to ensure in the winter, the property can keep in the heat and keep out the cold.

4. Please provide examples of partnerships between utilities and others in the community (churches, nonprofits, etc.) that increase awareness and enrollment in assistance programs.

As mentioned previously, several APGA members work closely with the local CAC to increase awareness and enrollment in assistance programs. One utility partners with its department of social services to get the word out about heating assistance. Another partners with many non-profit organizations throughout the city it serves. This network provides a coordinated and comprehensive approach to utility bill payment help, as well as related problems for low- and moderate-income households. In addition to those partnerships, this utility’s employees are dedicated to working with faith-based institutions and other non-profit organizations to share information about LIHEAP to their constituencies by having information booths or speaking at events. Yet another APGA member employs two full time “Customer Counselors,” which are experienced and educated social workers who connect customers to community resources. The Customer Counselors work and partner with area agencies on concerns related to bill payments. Having two dedicated employees with relationships to various groups allows promotion of any programs that become available and for direct conversation with those low-income homeowners or customers experiencing a crisis.

5. How is your association addressing the specific needs of low-income, marginalized, and underserved communities served by your member utilities?

Many of the programs discussed earlier are targeted to low-income households. As well, where costs for efficiency measures may be an issue, some APGA members offer “smart” thermostats to customers at no cost. Similarly, low-income, marginalized, and underserved communities may receive free weatherization services or participate in programs that repair or replace water heaters and space heating for free or a fraction of the cost. Public utilities also focus on partnerships with appropriate and respected community-based organizations to remove any perceived barriers.

6. What is your association doing to facilitate discussions between your member utilities about energy assistance, need, energy equity, and energy burden?

APGA is a member of the National Energy and Utility Affordability Coalition (“NEUAC”).⁴ This great organization works to highlight the needs of low-income households, and APGA is happy to join in their advocacy to help reduce Americans’ energy burdens. One effort led by NEUAC is a letter to Congressional appropriations committees that urges Congressmen and Senators to maximize funding for LIHEAP in fiscal year 2024. In addition to APGA, over 20 of our members also signed the letter.⁵ APGA also has a webpage with specific information to point our members to LIHEAP resources.⁶

APGA is also working with policy makers to ensure natural gas remains an energy choice for Americans. Recently, the Energy Information Administration (“EIA”) released its latest short-term energy outlook and lowered its natural gas price forecast for 2023 by 30.5%. EIA is now forecasting the Henry Hub natural gas spot price will average $3.4 per MMBtu in 2023.⁷ All-electric policies would not allow for the continued direct use of affordable natural gas and not support the shared goal between APGA and the Energy and Commerce Committee to decrease energy burden.

7. During the height of the COVID-19 emergency, we sought to establish a federal moratorium on utility shutoffs. While some in the energy sector supported that effort, many more opposed it. Those in opposition argued, in part, that shutoff notices were necessary to push customers to seek financial aid. But shutoffs, which threaten vulnerable Americans, should be avoided. What LIHEAP reforms are necessary to reduce the overall number of shutoffs? (For example, would increased coordination between states and utilities result in greater identification of need? Would allowing utilities to seek funding on behalf of customers help achieve that goal?)

While specifics require more conversation, generally, increased coordination between states and utilities would result in greater identification of need. Currently, there is not engagement directly with the utility, and, without that step, the community members in most need may not be identified. Our public utility members have excellent relationships with those in their cities and towns, especially those non-profit organizations serving the low-income and marginalized communities. As well, utilities have firsthand knowledge of what is needed. If utilities were able to coordinate with all those involved in the LIHEAP funding process, the program and all other assistance efforts could be more tailored to the needs of the natural gas utility consumers.

8. As currently constituted, does LIHEAP effectively reach utilities of all sizes, particularly smaller utilities? Are there changes that could be made to the existing program to ease the path for customers of smaller utilities to benefit from LIHEAP?

LIHEAP does reach all utilities, but all customers especially those in smaller, rural counties may not be aware of the program. The same customers, year after year, know about LIHEAP and receive the benefit, but there is very little outreach being done to attract new consumers who have need. More awareness of the program would be helpful.
Additional outreach could occur if small utilities had the capability to join organizations like NEUAC, but they lack resources, both the finances and the time, to participate. Too, smaller public gas companies often cannot dedicate staff specifically to address LIHEAP-eligible households and their concerns.

9. What additional recommendations do you have for energy assistance reform (including updates to LIHEAP)?

The first recommendation is additional funding for LIHEAP, as it currently is woefully underfunded, serving just 1 in 5 eligible households.

Second, some effort to work out the inconsistencies in how LIHEAP applications are processed and approved would be helpful. It could vary by state, but there are irregularities between counties in how applications are approved. In addition, whether just perceived or not, to a few APGA members, the LIHEAP funding looks like it is provided at different times for different administrative agencies. APGA would support more of a regular cadence for funding release. All these inconsistencies can cause quite a bit of confusion for both the customer and utility. One possible solution would be allowing an increase in the administrative funding for the program. It is currently capped at 10 percent, which is among the lowest of all federal grant programs. The administrative level for the program has remain unchanged since the program’s inception, even while the need for trained personnel has grown, considering increases in applications.

As much as possible, collaborating with all the stakeholders, including the utilities, to determine benefit amounts and eligibility standards, accounting for energy burden and energy costs would be helpful. This review could be done each year.

APGA hopes the above input will be helpful as the Committee pursues further action. Providing affordable energy to the low-income, marginalized, and underserved communities in the cities and towns public gas utilities serve is critical. Please do not hesitate to contact me with any additional questions.

Respectfully submitted,

Dave Schryver

President & CEO
American Public Gas Association

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1 For more information, visit www.apga.org.

2 Assuming a 12% reasonable rate of return, using data from a 2022 Natural Gas Supply Association study found at https://www.ngsa.org/resources/analyses-studies/.

3 H.R. 3979, Protecting Natural Gas Consumers from Overcharges Act of 2021 (117th Congress (2021-2022)), https://www.congress.gov/bill/117th-congress/house-bill/3979/all-info and H.R. 5718, and H.R. 5718, Protecting Natural Gas Consumers from Overcharges Act of 2020 (116th Congress (2019-2020)), https://www.congress.gov/bill/116th-congress/house-bill/5718/text?r=23&s=1.

4 For more information, visit https://neuac.org/.

5 National Energy and Utility Affordability Coalition, “2024 All Parties Letter,” https://neuac.org/2024-all-parties-letter/.

6 American Public Gas Association, “Low Income Home Energy Assistance Program (LIHEAP),” https://www.apga.org/advocacy/liheap.

7 Energy Information Administration, “Short Term Energy Outlook,” https://www.eia.gov/outlooks/steo/.