LIHEAP is a federal government-funded program to assist low-income citizens with heating bills during the winter months. From November 1 through March 31 each year, PECO is prohibited from shutting off power to delinquent customers. Grants are given to qualified customers to pay their heating bills, which can equate to otherwise uncollected funds for PECO.

Grant funding is typically allocated to only one utility. PECO is competing against PGW (Philadelphia Gas Works). PECO wanted to increase the $14 million funding received for the 2007-2008 program to $20 million for the current year. On an annual basis, PECO’s budget for this program is about 1/5 of the competition’s. PGW spends about $500,000 per year.

SKM Group analyzed the 2007-2008 program participants’ demographics to determine similarities in demographic information. This helped to determine what types of information (age, gender, employment, etc.) indicated a customer would be most likely to qualify for and respond to the LIHEAP program application. A mailing list was developed by selecting those customers ranked as most likely to participate that also met the LIHEAP program qualification criteria.SKM Group also recommended simplifying the application process. In past years, an applicant had to call the LIHEAP office, request an application, fill out the application and then mail it back to the LIHEAP office. PECO was able to simplify the process by mailing a partially-filled application to those individuals meeting the mailing criteria. The mail recipient needed to just complete the application and mail it to the LIHEAP office in the envelope supplied in the mailing.

PECO received over $25 million in funding for the 2008-2009 program period and achieved a 4.25% response rate to the direct mail program.