Agenda - 10-07-2008 - 7c - Laserfiche WebLink

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Mr. Kevin Lindley Orange County September 24, 2008 page 6 `~..J Lifeline Rates: Special rates often set below the utility's actual cost of service and therefore require offsetting contributions from other rate papers or through a subsidy provided by the County. The most beneficial lifeline rates for the Efland System may be to reduce or eliminate the base charge component of the modified rate structure. This strategy would give the lifeline customer the added benefit of more control over the amount of their bill by controlling water usage. Discount Plans: Plans that reduce the bills of low-income customers by either a fixed amount or a percentage. Again, these plans have the most impact when the discount is applied to base charges rather than the volumetric charge. • Leak Repair Programs: Programs that provide utility vouchers to have plumbers visit qualified low-income housing customers to identify and repair leaks. Low-income housing generally has a disproportionately high incidence of water loss through leakage which results in higher levels of water usage. Since this type of program would benefit the low income customers by reducing both their water and sewer bills, and have a positive impact on water conservation efforts, the County may want to fund this as a joint program with the water providers. Since two of these alternatives focus on the eliminating or discounting a portion of the base charge, the amount of affordability assistance could be enhanced by increasing the base charge component of the rate structure to recover more from the higher income customers through this component of the bill. To ensure these programs are effective in targeting the appropriate customers, the County will need to develop assistance qualification criteria. Criteria commonly used to determine assistance eligibility include the following: Income: This is determined as income commonly set between 1.25 and 2.0 times the poverty level, adjusted by the number of members in the household. Households exceeding an income level specified by the County would be ineligible for assistance. EPA Income Indicator: This is a residential indicator that measures the monthly average residential bill as a percentage of Median Household Income ("MHI'~ for the entire system. The resulting indicator percentage is used to yield an estimated residential burden of Low (< 1.0%), Mid-range (1% to 2%) and High (> 2%). Employment: Eligibility under this criterion is proven through the presentation of . dismissal notices, pink slips, or proof of successful enrollment in government unemployment programs. Eligibility for other aid programs: Under this criterion, eligibility for utility billing assistance is based upon successful enrollment in assistance programs offered by other institutions. This criterion has the benefit of requiring minimal administrative costs because the utility may be able to simply check applicant's names against enrollment databases maintained by other programs. The disadvantage to this approach is that the utility has no control over enrollment criteria. Geographic designation: Using customer addresses as eligibility criteria. may be appropriate if the utility can. document specific poverty areas within the service area.