Austin Energy Low-Income Assistance Program Benefits Some High-Earners

Dec 2, 2014

With hundreds of thousands of customers, Austin Energy must rely on computer programs to filter through their customer database when it sends out bills. As intricately as some of these systems are designed, there are a few recent instances in which those programs have led to unintended consequences.

If you're an Austin Energy customer you may have noticed one item on your bill called a "Community Benefit Charge,” a fee which partly helps low-income Austin Energy customers pay their bills. Some of that money, however, is actually going to wealthy customers.

"Austin Energy improved its technology around tracking debt,” says Jo Katheryn Quinn, executive director of the nonprofit Caritas. Since 2012, she says, more and more people have come to her office looking for help with their utility bills.

The reason for the uptick is simple: the utility noticed it had many delinquent accounts and wanted to collect on them. It realized that some people were able to walk away from their debt and then were able to get new utility contracts, but now under their spouse's name or under another relative's name.

Now, Quinn says, Austin Energy has the ability to connect those dots and collect those debts. Austin Energy started collecting on the years-old debt, but Quinn noticed it was hurting some of Austin's poorest residents.

Quinn says that was an unintended consequence that’s left Austin Energy scrambling to retool efforts to help low-income customers.

Another unintended consequence dates from a 2012 tweak.

When Austin Energy raised its rates, the city council created a plan that would, in theory, open up the city's utility assistance program to as many low-income residents as possible. The idea was to prompt a billing program to automatically enroll those customers who were also enrolled in any of seven government assistance programs such as Medicaid or the Supplemental Nutrition Assistance Program, also called SNAP, or the Children’s Health Insurance Program, also called CHIP. Some of those programs serve low-income people. But, as utility advocate Paul Robbins found out, they're not only serving low-income families.

“Some of those enrollees are in very wealthy enclaves like West Lake Hills and Rollingwood and Lakeway,” says Robbins.

A person can live in Rollingwood and own a million dollar home and have a child with disabilities who receives medical assistance. That would prompt them to receive utility assistance from the city automatically.

Robbins found hundreds of households receiving the assistance without having the financial need for it.

"The person that had the most expensive home, lived in a mansion that was $4 million in appraised value, 8,100 square-foot in size,” he says.

The home has an indoor movie theater and an elevator, and the owners receive utility assistance.

Robbins ran a report and found hundreds of families receiving assistance. While many were not as wealthy as that example, some are relatively well-off and are enrolled in the utility assistance program.

Robert Cullick, an Austin Energy spokesperson, says the utility has a computer program that screens customers who receive Social Security or have foster children and it automatically enrolls them in Austin Energy's assistance program.

"Let me make it clear that there's no glitch here,” Cullick says. “There's nobody that we know of who doesn't qualify and is not eligible for the program who is receiving the program.”

As Robbins found out, many people receiving assistance didn't even know it. Even if they asked to be removed, the computer program would automatically re-enroll them because they qualify.

Only action from the Austin City Council action could mandate a change in the billing program.