THE NEW GILDED AGE (Part 2)
THE NEW GILDED AGE (Part 2)
Special for Review Magazine
06th December, 2007 0
Good insulation and extra blankets can help low-and low-middle income families avoid the tragedy of a home-heating utility shutoff. Knowledge of legal rights also can make a difference. That's where Deb Pratt often comes into the picture.
As a paralegal at Legal Services of Eastern Michigan for nearly 20 years, Pratt has overseen hundreds of customers' encounters with Consumers Energy when bills become overdue.
"Their clerks can be very, very difficult. Too many of them tend to be rude and not very nice," is Pratt’s first piece of insight.
"It's very important to go higher up and insist on speaking with a customer services representative. If a payment plan is negotiated, make sure to get it in writing. At the same time, send letters back to Consumers in which you confirm the results of phone conversations, and always include the account number."
Consumers Energy did not have a response, when Review Magazine went to press, for statements made by Pratt and other advocates who sometimes are displeased with their perceptions that the utility lacks a responsive staff at the customer level.
Tom Begin, area manager in Saginaw, provided initial information to The Review a full month ago and was extremely cooperative, but he later said he was directed to steer some questions to a higher executive, Mary Gust. An email from Gust outlined various Consumers Energy payment plans, but Begin already had provided this information in a set of brochures. Gust did not return calls over a span of nearly three business days before our deadline.
If an established news magazine cannot receive responses from Consumers, what is the fate of an average customer?
Pratt encourages customers who face troubles to contact her at (989) 755-4465, or toll-free at 1-800-322-4512. Almost anyone who is low-income will qualify, along with many who may consider themselves as low-middle income.
"That's the purpose of having Legal Services, to help represent people," she notes.
Pratt keeps score of foreclosures she helps prevent, and she also keeps counts of billings that Consumers Energy administrators wiped off the books because they agreed the charges were improper.
"Since the start of January, its $29,488.02 says Pratt from memory, with no need to consult a spread sheet. If a customer reaches a deep impasse with Consumers, Pratt says the final resort is to take a complaint all the way to the Michigan Public Service Commission, which regulates utilities. That number is 1-800-292-9555.
While Begin deferred to Gust, he maintains that the utility strives to offer a helping hand.
"Shutoffs tend to mirror the Michigan economy," Begin says. "As the economy worsens, we tend to see shutoffs increase. However, shutoffs are our last resort, which is why we strongly encourage customers to contact us before they anticipate a problem arising so we can try and help them. Often that includes referring them to outside agencies that can assist."
Bills Rise for Home-Heating Natural Gas
Since the energy crunch of the 1970s, energy costs have come into far sharper focus.
Begin says Consumers Energy has kept electrical costs below the rate of inflation, but that natural gas costs have exceeded the Consumer Price Index, and gas comprises about 80 percent of a typical bill.
A frustrating aspect, as Begin points out, is that Consumers Energy does not profit from gas costs, only from electrical service. This means that residents pay more but Consumers doesn't earn more.
The National Energy Assistance Directors Association reports that this winter's average three-month bill for natural gas home heating will come to $900, which is up 50 percent during the past five years from a previous sum of $600.
"Just about everyone has trouble with high heating bills, even people who don't qualify for Department of Human Services assistance, even people in homes that are well-insulated," Pratt says.
Consumers Energy's Budget Plan, adopted during the 1980s, allows customers to pay equal monthly amounts. In other words, winter payments are less than normal but summer payments are higher. Any differences between estimated costs and actual costs are reconciled each June.
Advocates for the needy pushed for more beyond the Budget Plan. Next came the Winter Protection Plan, which prohibits shutoffs between the start of December and the start of April except for extraordinary circumstances. A customer need pay only 7 percent of the estimated annual bill in December, January, February and March. However, higher payments to make up for the shortfalls are required starting in April, or else shutoffs may occur.
"The month of April is when we start to have all of our troubles," an agency worker told Begin during a recent forum. "Problems are put off during the winter, but the amount owed continues to grow and by April there is no more protection."
Begin readily agreed. He said Consumers Energy recommends the Budget Plan, but adopted the Winter Protection Plan only because the Michigan Public Service Commission insisted.
"I call it 'The Deceiver Plan'. It was mandated on us," Begin told the audience. "It really does protect people during the winter, but come April it's a whole different story."
Make Plans Before Accepting a Payment Plan
Pratt urges customers to show caution before entering either the Budget Plan or the Winter Protection Plan.
Since a Budget Plan begins in July, she says customers should make sure they are able to make the full monthly payment. Otherwise, the household could face a shutoff during the fall months before winter arrives.
She agrees that the Winter Protection Plan offers stronger shutoff prevention during the coldest months, but she agrees that the result is a rash of spring shutoffs in April and May.
Making payments can prove difficult, even when Consumers Energy and customers follow the procedures right down to the letter.
However, Pratt says other monkey wrenches can come into play.
First, she says some of Consumers' lower-level clerks fail to put either the Budget Plan or the Winter Protection Plan into the records, leading to a sudden shock and disaster for unfortunate customers.
Second, she asserts that a string of bills based on usage estimates – rather than actual meter reads, "can create overdue amounts that are higher than reality. A problem occurs when a customer asks Consumers Power for a direct reading of a meter, but either an employee doesn't show up or the knock on the door is so faint that there is no way you will hear it," Pratt says, citing her own personal experience.
Third, she says customers may face unfair and undue 'tack on's. These scenarios take place when Consumers assigns one person's overdue amount to another person who has family or friendship ties.
"You may learn that when you were a child, the mother or father put the bill in your name," Pratt says. "You may have an unhappy former spouse or friend or landlord who uses your Social Security number to establish an account at a different address. The way Consumers views it you are responsible. In some cases I can be highly productive in helping to wipe out these wrongful charges, but in others it is like the client has to prove that the person who did the 'tack on' wasn't even there, and that can put a customer into a real bind."
Sources of Aid for Those in Need
Households at or below the poverty level, such as about $20,000 for a family of four, may qualify for federal aid through LIHEAP, the Low Income Home Energy Assistance Program.
President Bush, in a surprise to many observers, has approved program funds far more generously than did President Clinton, reaching a peak of more than $3 billion in 2005. But amid the costly Iraq War, Bush is seeking more domestic cuts and he wants to shrink the LIHEAP sum to below $2 billion. Bush and Congress are at an impasse as winter arrives.
Smaller amounts of aid may come through PeopleCare operated through The Salvation Army in cooperation with Consumers Energy. These funds are generated through customers who are generous enough to make PeopleCare contributions in addition to paying their own bills.
The Department of Human Services may offer emergency aid on a hit-or-miss basis. Protections also are available for a family that faces a medical emergency, or that has a breadwinner called to military service.
However, funds are shrinking, the same as for many other projects that combat poverty. The maximum a Michigan family can receive this winter is $350 for home heating and $350 for electricity, down from $550 last year in each category.
Last year's average grant in Michigan was $200, with 358,000 households served.
"We don't know where some families are going to turn," says Cherrie Benchley, Saginaw United Way president and chief executive.
Consumers Energy also encourages families to seek tax breaks. The federal Earned Income Tax Credit is not linked to energy costs, but low- or low-middle income families - especially those with children - can receive refunds of up to $4,700. Michigan, unlike some other cold weather states, also offers a Home Heating Credit.
Families seeking free tax preparation help after the holidays may contact the United Way at 755-0505 or the Saginaw County Community Action Committee at 753-7741.
CAC Tries to Bridge the Gap
At the Community Action Committee, known as CAC, staff members tell stories similar to those from Legal Aid's Deb Pratt.
Many clients have difficulty communicating with the Consumers Energy office, say Rosetta Scott and Sunshine Marlowe, assistants in CAC's Weatherization Program.
"Consumers has a number of payment plans, but some customers say they are only told about one or two of them," Marlow says.
The Weatherization Assistance Program builds into a five-pronged approach, explains Director Omowale Art Smith.
First, CAC processes the families through a 'central intake' so that other needs also are identified, such as possible eligibility for surplus food or tax preparation assistance.
Second, of course, the agency weatherizes homes for low- and low-middle income families. (Maximum incomes to qualify are $15,315 for a single adult, $20,525 for two people, $25,755 for three, and then continue to add $5,220 for each additional family member.)
Third, CAC conducts workshops that offer energy-saving tips and product demonstrations for residents.
Fourth, staff members attempt to help clients deal with Consumers Energy and its various aid programs
Then comes the fifth prong, in cases when a family faces an absolute dire emergency. Smith describes the crisis of a family with six children in a two-story home.
"The fan on the basement furnace quits, and there are no heat ducts to the children's bedrooms on the second floor," Smith says, "Before we can weatherize the house, CAC will try to leverage various resources to get the furnace fixed and the ducts installed."
Marlow emphasizes the value of the classes. CAC provides participants with incentives of a $50 payment certificate from Consumers and an energy savings kit. The items in their kits include caulk, stripping, a low-flow showerhead, a pair of the newfangled low-watt florescent light bulbs, and plastic window covers.
"We can't provide everything to do a whole house, but we provide a start," Marlowe says. "We describe it as our jump-off kit."
For a Consumers’ Spokesman, Less is More
During community forums, Tom Begin presents himself as a rare sort of salesman.
He wants you to purchase his product, but he will help you avoid buying too much of it.
In his role at Consumers Energy, he explains how to cut natural gas and electric use so that payments are more affordable.
"We can't show you how to bring a $300 monthly bill down to nothing, but we can help you shave $30, $40, maybe even $50," Begin recently told members of the Quality of Life Support Ministry at Saginaw's Zion Baptist Church. This was one of many seminars he conducts across mid-Michigan. A week earlier, he spoke to assistance providers coordinated through the Saginaw United Way.
Some of the Zion group members stated that even with energy conservation, rising costs still are pushing bills beyond the means of low-income customers.
Begin's role is not to referee rate debates that go to the Michigan Public Service Commission, pitting citizen critics against Consumers Energy.
Instead, he preaches conservation to any group that will have him.
"To save money on energy requires a change in lifestyle," Begin says. "You pay for how comfortable you want to be."
He tells participants, "Don't just look at the cost amount on your bill and try to pay it. Look at the details."
Indeed, small print on a bill shows 12 line items for electric use and three for gas to heat the home. Customers should aim to reduce electrical use via their KWH counts, or kilowatt-hours. For gas, the numbers are posted as CCF for cubic feet.
Advocates for the needy told Begin that some customers have trouble with estimated billings. He answered that any customer who desires a direct meter reading each month may call toll-free at 1-800-477-5050, which is Consumers’ overall help line not just for meter readings but also for all sorts of program information and questions.
Also, advocates said some clients fail to understand shutoff notices because they appear on the second page of a bill mailing. Begin pledged in early November to look into this question, but responses were not available for The Review.
Begin shows his audiences a list of electrical costs to run appliances. These range from 38 cents per hour for a 40-gallon water heater to about a penny per hour for a television. A clothes washer is 3 cents an hour and a dryer is 15 cents per hour, while a coffee maker falls in between at 7 cents per hour.
He also offers a booklet with more than 100 energy-saving tips. Some are standard, such as cutting the heat at night while covered with extra blankets. Some are lesser known, such as placing sheets of aluminum foil between steam radiators and cold inner walls.
"When you consider all of the appliances in your home, the nickels and dimes add up," Begin says.
The site for various cost-saving tips, for both home heating and electrical use, is consumersenergy.com/energy answers.
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THE NEW GILDED AGE (Part 2)