Keating: South Bend Utility Assistance
by Maryann O. Keating, Ph.D.
For low-income households, putting food on the table is the highest priority-and rightly so. Yet electricity, water, heating and telephone bills strongly increase the stress levels of both low- and middle-income households.
This month, approximately 41,500 households received a letter this from the South Bend Mayor describing the City’s Utility Assistance Program (UAP). Under the program, eligible households can receive monthly credits ranging from $8.00 to $25.50 on their combined water, trash and sewer bills, representing annual savings between $96 to $306.
Eligibility is limited to households with incomes at or below 80 percent of Area Median Income (AMI). Dollar income categories are not provided on the City’s application form but UAP credits, adjusted for family size, are listed. Based on preliminary 2026 HUD income estimates, a 2.5-person household with an annual income near $75,000 could qualify for an average annual utility credit of roughly $177.
According to the City website, UAP is financed through an additional monthly charge of $2.18 paid by all customers not enrolled in the program. The website does not disclose the anticipated number of participants or the expected average credit per recipient. If, for example, 87 percent of households are either ineligible or choose not to participate, South Bend Municipal Utilities could gain an estimated $1.08 million annually in additional revenue.
Participants must renew eligibility each year and reapply if income, household size, or address changes. It is unknown if additional revenue received by Municipal Utilities will closely match the value of benefits distributed. If, for example, the administrative costs of operating the program exceed the extra revenue charged non-participants, each additional employee required would cost South Bend approximately $70,000.
It is conceivable that the UAP program would somewhat reduce the number of clients defaulting on their bills and the need for the City to cut off service to particular households. Even so, an important policy question remains. If there is a more effective way to offer one-time temporary relief to a limited number of households conserving usage but experiencing financial distress.
Most residents reasonably assume that every dollar paid through their utility bill is dedicated to providing safe, reliable and affordable service, both now and in the future. Providing these services at a reasonable fee is a challenge for the City and requires trade-offs. However, with no other such providers available, it has become increasingly difficult if not impossible to maintain a middle-income household. This raises a question: Why is a program such as UAP, with minimal benefits for all and modest relief for some, created and permitted to exist indefinitely?
The answer is that it is worthwhile for politicians seeking votes, city employees and the few receiving maximum credits to lobby for such programs. The vast majority of residents who neither qualify nor bother to apply for UAP have little incentive to organize or raise objections to an additional $2.18. monthly charge. They are too busy trying to figure out how to make ends meet with respect to their other utility bills.
Maryann O. Keating, Ph.D., a resident of South Bend and an adjunct scholar of the Indiana Policy Review Foundation, is co-author of “Microeconomics for Public Managers,” Wiley/Blackwell.
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