Questions/Answers

The Energy Voucher program was introduced as the first energy welfare system that supports purchase of cooling and heating services to prevent the incidents of cold weather-related and heat-related casualties or the adoption of risky and inappropriate heating and cooling methods in vulnerable households in Korea which has four distinct seasons. The tragic incident in 2005, a death of a teenage girl by candle-lit fire in the electricity-cutoff household due to tariff payment failure, shocked Korean society and led to a voice calling for the nation-wide energy welfare program which was reflected in 2013 Government’s Key Tasks. It was designed in the form of voucher to allow the vulnerable groups to choose the payment method. Starting with support to heating bills in 2015, the coverage was expanded to include cooling bills in 2018 when Korea was hit by nation-wide heat wave caused by global warming. The eligible beneficiaries of Energy Voucher are senior, children, handicapped people, pregnant women, patients with rare and and incurable disease, single parented households and child-headed households among the low-income households. The government identifies the cases of households which were not able to use the vouchers because of malfunctioned heating appliances in 2018. And a new program called Energy Voucher Plus was added to inspect the heating appliances of 12,000 households and provide related consulting to the households. The Energy Voucher in Korea is unique in providing cooling, and heating together with energy efficiency improvement and pursuing a holistic approach of energy welfare. In case of New York State in the US, the beneficiaries of cooling bill support and the ones of heating bill support are different. Likewise, the tasks of managing energy bills support and the enhancement of energy appliance efficiency are split in different State authorities.

The Energy Voucher is the systematic initiative for preventing casualties related to extreme cold weather and heat waves which are recurring by climate change. Statistics show the increasing number of low-income households, from 1.055 million (2019) to 1.09 million as of 2020 due to economic crisis caused by COVID-19 pandemic. As face-to-face contact is limited due to COVID-19, the importance of pleasant housing gets higher attention. Against this backdrop, the Energy Voucher is an effective system to overcome infectious disease, economic crisis and climate change risk by providing pleasant housing to vulnerable groups.

The Energy Voucher is targeting the lower-income group with bottom 40% of median income, which contribute to attaining the first SDG of ending poverty. It prevents diseases related to extreme cold and heat and assures healthy lives of the physically vulnerable social groups including seniors, the handicapped and the diseased, which supports the third SDG of health and welfare. It supports the lives of vulnerable women such as pregnant women and single mothers, which is linked to the fifth SDG of gender equality attainment. In 2020, the eligible target group is to be expanded to include multi-culture (expatriate) households. In 2019, approximately 642,000 households were supported and, over 670,000 households are expected to be supported in 2020 while it is still ongoing. Among the beneficiaries, the handicapped accounts for 44%, senior citizens 38%, patients with severe, rare and incurable disease 9%, pregnant women 0.1% and child-headed household 0.6%.

In social aspect, the Energy Voucher functions as the social security service supporting the energy cost of vulnerable social groups. In environmental aspect, it contributes to eco-friendly safe energy environment with Energy Voucher Plus which checks and eliminates the inefficient energy environment of lower-income group, leading to GHG emissions reduction. The financing of the Energy Voucher is covered by national budget with tax revenue. Over 600,000 lower-income households are supported with average amount of KRW 9,000 in summer and KRW 107,000 in winter. This contributes to building sustainable economic environment through redistribution of wealth.

In case of existing voucher systems, the beneficiaries had to make personal visits for application when the validity of voucher was terminated. In some cases, it turned out that seniors and the handicapped people who have difficulties in mobility gave up submitting the application. Energy Voucher introduced the first of its kind automatic application system for the existing beneficiaries in voucher system in Korea. It improved the transparency through electronic card payment which does not allow illegal use and retained the system flexibility through the introduction of refund type voucher for the beneficiaries under special residential situation such as inn residents who have difficulties in using purchasing type voucher. The operator has made an effort to identify the target households in blind spot every year. Through such effort the number of beneficiaries has been increased from 570,000 households (2017) to 670,000 households (2019) As an extra mile effort, the program agency identified the cases where the voucher holders were not able to use the vouchers due to broken heating apparatus. To resolve this kind of blind spot situation, Energy Voucher Plus program was introduced to provide repair and exchange services for malfunctioned appliances.

Analysis on the representatives of beneficiary household is utilized for the program improvement. The ratio of female has been higher than that of male, 56% female and 44% male in 2019. Such result is interpreted to be caused by the inclusion of socially vulnerable women such as pregnant women and single mother and higher share of females in senior beneficiaries due to higher average lifespan of women. Also, the current Energy Voucher division has higher ratio of women (63%) and the division head is a female. Energy voucher systemis is taking the lead in gender equality.

The Energy Voucher system targets households with 1 or more socially vulnerable citizen(s) among the low-income population and supports them with vouchers which they can use to select and purchase the energy source in summer and winter. The low-income group is defined as the beneficiary of national basic livelihood support (livelihood, medical care, housing and education) who earns the bottom 50% of median income. And the target group of the Energy Voucher are the beneficiaries of livelihood support and medical care, earning bottom 40% of median income. The Energy Voucher has been expanding its coverage of beneficiaries by adding pregnant women in 2016, patients with severe, rare and incurable disease in 2018 and single parents and child-headed households in 2019. The number of beneficiary households shows an upward trend - 545,000 in 2017, 565,000 in 2018, 642,000 in 2019. Over 670,000 households are expected to get support in 2020. The support amount is cascaded in accordance with the number of household members. It is KRW 86,000(KRW 5,000in summer) for single-member households, KRW 120,000 (KRW 8,000 in summer) for two-member households and KRW 145,000 (KRW 11,500 in summer) for three-member households.

The Energy Voucher program was first introduced as one of government’s key national tasks in 2013 and currently the 5th round is going on in 2020. Korea Energy Agency was appointed as a dedicated organization for the operation of the Energy Voucher in 2013 and has operated the program since the beginning. The 2-year process flows is as follows: 1. Beneficiary application at community-level local government office 2. Confirmation of beneficiaries and notification by city/county/district-level local government office 3. Voucher issued by Korea Social Security Information Service 4. Voucher used by beneficiaries and payment settled by energy suppliers, credit card companies and Korea Social Security Information Service 5. Monitoring and post management by local governments and Korea Energy Agency The Energy Voucher has maintained higher application rate of above 80% every year since its introduction in 2015 and its usage rate is also very high , above 85%. The complaints are immediately inspected and resolved by the specialized counselors at a call center. The organizations related to Energy Voucher including Korea Energy Agency, energy suppliers and credit card companies hold monthly meeting to monitor the program activities, identify and resolve the issues and finally come up with the improvement of the program. Also, a sample group of approximately 1,000 households is extracted among the beneficiary households to execute panel survey on usage status, difficulties, improvement factors and satisfaction level and the results are reflected on system improvement. Awareness campaign and training for the local government officials and other people being engaged in the program are carried out every year to promote the program. Online training sessions and awareness UCCs (User Created Contents) are in place as a rapid and flexible measure to deal with COVID-19 constraints in conducing face-to-face training and awareness campaign.. .

The administration of refund type voucher was split among different organizations: local Government for application, public instituion for payment. It caused delays and omissions to beneficiaries. After diverse communications such as panel survey and consultation with specialists, a solution package of online application system and process improvementization were worked out. The credit information inquiry system was linked to online application system and this linkage reduced the cases of account payment errors from 892 to 70. A verification process has been incorporated into application collection stage and the process reduced the time for payment from 3.5 months to 2 months.

A first of its kind refund type voucher has been newly introduced to refund the energy cost in cash for those residing in unconventional residences such as inns or shack houses and thus have difficulties in providing proof of energy bills. The Energy Voucher Plus has been in place since 2018. The program identifies those who are unable to use the voucher due to heating apparatus breakdown in advance of heating season. The identified households get various support such as energy diagnosis and repair for safe and efficient use of energy through public-private partnership.

The Energy Voucher is benchmarked the system of other welfare vouchers. But it introduced the first of its kind automatic re-application for existing beneficiaries, getting rid of beneficiary’s burden of processing application and thus increased the application rate to unprecedented 96%. Also, it introduced virtual voucher with which users like senior and the handicapped can get automatic discount in their energy bills through collaboration with energy suppliers for the first time in Korea. As a result of improving convenience for beneficiaries, the usage rate hit 86.5%, higher than other vouchers (sanitary pad 30%, diaper 84% in Gyeonggi Province).

In response to increasing calls at call center, the big data of the phone calls during the past 5 years has been analyzed and an optimized response manual has been produced based on the analysis. An AI chatbot available for 24 hour response was introduced at the call center. A big data-based machine running was applied to the AI counselor for responding to incoming complaints at all times. The AI chatbot is expected to greatly contribute to the improvement of response rate and client convenience.

The Energy Voucher system became an exemplary case in the aspect of caring for the vulnerable citizens and resolving energy issues. It is being benchmarked by local governments, leading to increase in replicated projects nationwide. Gyeonggi Province is operating similar voucher system that provides heating cost for 5 months to the household of seniors and the handicapped which are under basic livelihood security . Ansan City is providing the energy allowance to single parent households during winter. Cheolwon County is providing the heating cost to lower-income groups once a year. These cases are the examples of local government’s program inspired by the Energy Voucher. It is expected that the number of these cases will increase in the future.

The Energy Voucher system became an exemplary case in the aspect of caring for the vulnerable citizens and resolving energy issues. It is being benchmarked by local governments, leading to increase in replicated projects nationwide.

Energy Voucher is a national subsidy to support the vulnerable social groups and its budget has been continually increased from KRW 51.2 billion in 2017 to KRW 71.1 billion in 2019 and KRW 78 billion in 2020. Korea Energy Agency is the dedicated organization for the Energy Voucher. a tem of 10 staff at Energy Welfare Division is working on the program and there are 8 counselors at a call center for responding to inquiries and complaints. Around 3,700 local government officials are working on receiving and collecting the applications and other processes.

The 2nd social security ㅡmaster plan announced in 2019 included consistent expansion of Energy Voucher for vulnerable social groups, which guarantees the sustainability of the system. The financing sustainability has been secured by the government’s allocation of the dedicated budget into Energy and Resources Special Account. The budget amount has been increasing from KRW 62,050 million in 2018 to KRW 79,023 million in 2020 Korea Energy Agency founded its own fund for the smooth operation of Energy Voucher Plus program and accumulated KRW 300 million in collaboration with Community Chest of Korea for 3 years.

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The government evaluation of the best practice is conducted on the candidate best practices submitted by the program agencies through fair competition including specialist review, citizen preference survey. One of the key performance indicators, the number of beneficiaries are counted by data aggregated through the Haengbok-e-eum system. The other indicator, the number of households is counted through connection with the portal system of Energy Voucher. The achievement of target performance is evaluated through the panel survey, which is conducted in every year. A sample group of 1,000 people participates in the survey for energy usage status, satisfaction, etc.

① Energy Voucher Performance Indicator Ⅰ: No. of Households Applied Measurement Method - Measuring Agency: Korea Social Security Information Service (Haengbok-e-eum system) - Target No. of sample and selection method: Complete enumeration ② 2020 Energy Voucher Performance IndicatorⅡ:Energy Voucher Satisfaction Level ㅇ Measurement Method - Measuring Agency: external survey agency - Survey target: Around 1,000 households that received the Energy Voucher during period of measurement - Survey item: program awareness, application process·voucher validity·support amount, satisfaction level, etc. - Rating method: Measured by five-point Likert and converted to 100 point score

The Energy Voucher has been overachieving the target performance every year. In 2019, 642,000 households against the target of 580,000 households and in 2020, the target is 656,000 households. The number of beneficiaries shows the effort to minimize vulnerable groups in blind spot. The satisfaction level survey is used to get information on program awareness path and ratio, ripple effect of usage, satisfaction level at each administrative procedure, support amount and period of usage, reason for unused balance and room for improvement. All the items arelinked to the program improvement for the next year and the survey will contribute to close monitoring and galvanizing of the program. A 2018 panel survey revealed the high demand for the voucher support during summer, sitting at the top of wish list. The summer voucher was introduced in 2019, reflecting the 2018 survey results. At the beginning of the program, the engagement of multiple administrative agencies made the application procedures complex and caused inconveniences to the beneficiaries such as omissions of the applications, An electronic application system was introduced to prevent such inconvenience and increase the efficiency of the program.

The Energy Voucher is a seamlessly integrated system for the delivery of energy vouchers to vulnerable social group beneficiaries which sets Korea Energy Agency at its center as the designated program operator and connects diverse authorities and utilities such as over 20,000 energy suppliers, Ministry of Health and Welfare, Ministry of Land, Infrastructure and Transport and related public organizations and ensures close collaboration among them , and requires proactive engagement of over 3,700 government officials and over 25,000 apartment management offices. The Energy Voucher has a bottom-up structure where the community-level local governments (Eup/Myeon/Dong) inform the beneficiaries of their eligibility and guide them to submit application at proper time and city/county/district-level local governments (Si/Gun/Gu) receive applications, verify the applicants’ eligibility e and approve the applications. Also, the energy suppliers, Korea Social Security Information Service and credit card companies hold regular meetings for improvement of system and mutual cooperation. The Energy Voucher system is operated vertically between central and local governments and horizontally as well among the dedicated program operator and every related agency to operate the Energy Voucher as smoothly and reliably as possible.

At the initial stage of system introduction, the constraints in time and manpower were resolved through collaboration among 336 separate organizations including energy suppliers, etc. The local government officials took charge of guiding target households and receiving applications, the energy suppliers incorporated payment deduction in their energy bills and supervised the heating fuel sales agencies. And Korea Social Security Information Service and private companies including credit card companies collaborated in establishing a system for application registration, issuance and payment of energy vouchers. Through such successful public-private partnerships, the system was successfully established in short time and showed almost 90% of application rate from the very first year of implementation. The Energy Voucher Plus programt was introduced to execute the joint investigation together with local government on the difficulties of households that are not able to use vouchers due to their aged or malfunctioned heating apparatuses. After the investigation, the heating apparatuses are inspected and replaced with new ones in collaboration with private heating appliance companies. The Energy Voucher Plus program enhanced the effectiveness of the existing Energy Voucher program and achieved energy safety. It is a success case of close public-private partnership.

The Energy Voucher has become the systematic safety net for vulnerable social groups who are forced stay inside their residences due to current COVID-19 pandemic by ensuring healthy lives of the groups with the provision of appropriate cooling and heating. It has shown the fact that the importance of preemptive welfare policy is getting more important in the crisis situation. The Korea Energy Agency has gone extra mile to identify the room for improvement from the beneficiary's perspective through monitoring activities to enhance the effectiveness of the system. As a result of such additional effort, the new subprograms of Cooling Voucher and the Energy Voucher Plus were born. The operation of Energy Voucher program shows the importance and good example of preemptive welfare system in disaster and of seeing the issues from the beneficiaries’ perspective, not from the system operator's identify room for improvemen in program. In the future, the Energy Voucher will be positioned as sustainable welfare system which can see things from beneficiary's perspective through expansion of target beneficiaries by adding multi-culture households that are rapidly increasing in Korea and reviewing gradual increase of support amount, taking into account the upward trend of energy cost.