PACE is always seeking new avenues and alliances that will strengthen our ongoing mission of highlighting consumers’ interests in reliable and affordable energy. We’ve made a lot of new friends this past year. However, we are particularly excited about a new relationship with the National Energy and Utility Affordability Coalition (NEUAC). PACE officially joined NEUAC last week and is looking forward to diving in on various committees and learning from the expert leaders and volunteers who created NEUAC to strengthen efforts to help energy consumers in need.
As a short introduction, NEUAC is a 501(c)(3) nonprofit organization that “brings together a broad-based coalition of diverse member organizations and individuals dedicated to heightening awareness of the energy needs of low income energy consumers.” From its headquarters in Arlington, Virginia, but working with member organizations across the country, NEUAC expends energy and effort to:
- increasing awareness and understanding of the nature and magnitude of low-income energy problems.
- formulating and advancing low-income energy policy.
- providing information and technical assistance in the creation and development of fuel funds.
- promoting the development of statewide and regional fuel funds.
The coalition has also greatly boosted the advocacy voice for the federal LIHEAP (Low Income Home Energy Assistance Program), which is administered by the U.S. Department of Health and Human Services. LIHEAP and the millions of citizens it helps each year depend on annual congressional appropriations.
How does LIHEAP work? The federal government provides block grants from appropriated funds to states. States then work with organizations including utilities and community support/service groups to make sure that funds are distributed to those in need through approved channels. The federal government requires that grantees target benefits to households with low incomes, adhere to income eligibility definitions, and focus on those households with the greatest home energy needs, taking into consideration age, disability, number of residents, and household income.
NEUAC members regularly meet with Members of Congress and other stakeholders to explain why LIHEAP is a critical program that helps vulnerable citizens afford energy services in hard times. PACE looks forward to joining other NEUAC members and leaders on letters, rallies and congressional visits that educate lawmakers and staff about the importance LIHEAP funding plays in keeping vulnerable consumers supplied with energy. As expressed by NEUAC earlier this year:
- LIHEAP appropriations have fallen by more than a third in five years.
- Current funding levels provide only enough LIHEAP funding to serve one-fifth of eligible households.
- Although the economy has improved, it hasn’t for many LIHEAP households.
- While costs for energy are low, the burden to low-income families is significant with many paying up to 30% of their income for utilities.
PACE is truly fired up about engaging with NEUAC to help consumers. To learn more about NEUAC and LIHEAP, check out the coalition’s website and follow them on Twitter and Facebook.
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Last week, I was honored to be invited to address the American Public Gas Association’s annual marketing conference. Millions of consumers across the country receive natural gas service from community-owned distribution utilities.
Over 150 attendees spent three days examining trends affecting how customers view and use natural gas in their homes, businesses and vehicles. Spending a day with APGA gave me a great opportunity to spread the word about the Partnership’s mission and to re-learn some lessons about how natural gas distribution utilities view the energy policy landscape. I say “re-learn” because I spent two happy years representing APGA at federal agencies in the mid-2000’s.
Just like electric utilities, natural gas utilities are driven by the obligation to provide least-cost service and an extremely reliable product. They also feel whip-sawed by the ever-changing regulatory shuffle over the years in Washington, D.C. and the states. Attendees are paying particularly close attention to California’s drive to 100 percent renewables and the current fad for electrifying every possible application. Natural gas utilities are also increasingly aware that business forces outside the usual energy players are talking to consumers about choices for energy usage and control of home applications.
I was able to share observations from my first year with the Partnership and our ongoing campaigns on retail deregulation, natural gas hedging, and right-sizing payments for private solar. While deregulation and net metering aren’t directly of concern to gas distribution utilities, all energy stakeholders have a vested interest in keeping elected and appointed officials engaged in an ongoing, productive conversation about the realities of providing always-on, affordable service to millions of consumers. Hedging issues are a bit different animal, as natural gas utilities also depend on hedging to control supply and transportation costs.
Questions from the audience covered a lot of ground. Using electric co-op statistics we discussed shifts in the electric generation portfolio mix. Co-ops report that their national fuel mix was 54 percent coal in 2014, but 41 percent in 2016, while natural gas use went from 18 percent in 2014 to 26 percent in 2016. Understandably, the changing ratios of coal-natural gas-renewables are of interest to utilities who must rely on one fuel and pipeline network to deliver to consumers.
Natural gas utilities are curious about battery storage trends and electric vehicles; accordingly, I shared some Partnership observations from last fall’s blog “What’s in Store for Storage.” The audience seemed to agree that residential storage and a mature electric transportation infrastructure are not yet right around the corner. A robust effort is underway to study and deploy Natural Gas Vehicles.
The best presentations, in my view, give the speaker many insights and questions to follow up on, and that certainly was the case for my visit with APGA. Coming away with some old friendships and knowledge rekindled, I’ll be looking more closely at model energy communities to see how electric and gas choices are presented to consumers, and at LNG export issues to see how supply may impact the bottom line bills for homes and businesses across the nation. And, I’ll hope to bring news from a key natural gas gathering this June – the World Gas Conference here in Washington, D.C.
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Brian Munzlinger is a member of the Missouri State Senate, representing District 18. He recently introduced a resolution, which is advancing in the Missouri Senate, to educate consumers and fellow lawmakers about the benefits of allowing utilities to hedge fuel inputs. His April 2 op-ed in the Hannibal Courier-Post appears below as a PACE guest blog.
Brian Munzlinger: Hedging Protects More than Just Energy - Opinion - Hannibal Courier - Post - Hannibal, MO.
http://www.hannibal.net/opinion/20180401/brian-munzlinger-hedging-protects-more-than-just-energy
Just like for any good or service that depends on commodities, power prices are linked to the costs of generation fuels. For years now, utilities have “hedged” natural gas supplies to make it easier to predict the price of this critical generation source over time.
Owing to federal environmental policy shifts, consumer preference for lower emission energy sources, and market dynamics, Missouri’s generation fuel mix is slowly changing. Utilities and consumers will increasingly depend on natural gas for decades to come.
Natural gas commodity prices are relatively low today, but market forces outside of Missouri and the United States, including increased global competition for natural gas supplies, could cause supplies to tighten. Following the logic of basic economies, natural gas could face unpredictable price hikes and extended periods of price volatility.
Utilities attempt to manage outside influences with several strategies, including hedging, which is akin to insurance. A hedge is essentially a reasonable payment that ensures a steady supply at an agreed-upon price for a set time period.
Before natural gas prices rise, or become more volatile, prudent hedging strategies help provide security and stability. Missouri should continue allowing utilities to help consumers and businesses predict and manage their power bills.
Missouri and many other states allow utilities to engage in hedging, and I’ve recently introduced a resolution in the Missouri legislature encouraging allowing this common- sense business practice to continue.
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