The Fight to Fund LIHEAP

Since the economic downturn in 2008, utility companies have felt the pinch of consumers unable to pay their utility bills, and government programs stretched to the max. The price to heat a home with electricity has increased by a third, and to heat that home with fuel oil has more than doubled.¹  Not just utility bills have been hit. This price increase can be seen across industries as reports demonstrate that the costs of supplies are increasing.  In April 2007, the price of a gallon of regular unleaded gas was $2.86, and is $3.92 in April 2012.    Eggs have jumped from $1.61 per dozen in April 2007 to $1.82 in April 2012.  Coffee has jumped from $3.43 per lb to $5.51 per pound over the same period.²  In September 2010, the U.S. Census Bureau reported that one in seven Americans lived below the poverty level, due in part to the deterioration of the labor market, and that number was one in five for children.³  Struggling families wrestle with the decision whether to heat their home or put food on their table. 

The main federal program that helps these low-income households, veterans, seniors and struggling consumers, LIHEAP (Low Income Home Energy Assistance), has lost funding in recent years.  Originally authorized at $5.1 billion, the program was only funded at $3.47 billion in FY 2012.  While the program was able to help nearly 9 million Americans with their home heating bills this last winter, only 20% of families eligible for assistance received LIHEAP aid.  The current funding levels have forced down the amount of aid provided to an average family from $417 in 2011 to $308 last winter- a cut of more than 26%.⁴  The proposed budget for 2013 further cuts this program’s funding to $3.02 billion.  The National Energy Assistance Directors’ Association (NEADA), which represents the directors of each state’s program administrating the LIHEAP program, estimates that this funding decrease would eliminate 1 million families from the LIHEAP program.⁵  

For illustration, Ohio received $234,875 in direct and contingency dollars under the program in 2011.  The 2012 level is projected at $165,463, and the proposed level for 2013 would further reduce the available aid to $132,443. In 2011, the Ohio LIHEAP program helped nearly 450,000 households, but the average award only relieved 8% of the household’s energy bill.⁶  LIHEAP’s impact will be dramatically reduced by the proposed budget.

In March, 137 members of the House of Representatives sent a letter to the Committee on Appropriations urging them in the face of these numbers to restore LIHEAP funding to its authorized level of $5.1 billion dollars in the 2013 budget.  The letter notes that 20% of those receiving assistance are veterans, 2% having served in Iraq and Afghanistan.  Further, 43 Senators sent a similar letter to the Senate Appropriations Committee urging funding at $4.7 billion for 2013.  The letter notes that 46.2 million people are living in poverty according to the 2010 Census, the largest number in the 52 years that poverty numbers were recorded, and that the number of households helped by LIHEAP has increased 54% since 2008.7    

Without increased funding, LIHEAP cannot reach all of the families unable to pay their utility bills.  Utility companies will continue to face rising costs which are passed onto consumers, while the inability to disconnect customers during certain months based on temperatures and with certain health conditions.  While LIHEAP does not pay a family’s entire outstanding utility bill, it gives the family some relief to begin to move forward.  The funding of LIHEAP is critical to both utility companies and families facing their own economic crisis. 

¹ Erik Ekholm, “Utility Bill Is One More Casualty of Recession” NYTimes.com, Dec. 19, 2009. http://www.nytimes.com/2009/12/20/us/20utility.html
² United States Department of Labor, Bureau of Labor Statistics.   http://data.bls.gov/cgi-bin/surveymost?ap
³ Devon Dwyer, “Poverty Rate Climbs in Recession, One in Seven Now Poor” abcnews.com, Sept. 16, 2010, http://abcnews.go.com/Politics/poverty-rate-increases-recession-highest-level-1994-census/story?id=11652753
⁴ See LIHEAP Letter to Appropriators, March 20, 2012, published at http://www.neada.org/appropriations/FinalFY13LIHEAP%20Approps%20Letter.pdf
⁵ http://www.neada.org/news/2012-02-13.html6 
⁶ http://www.liheap.org/assets/fact_sheets/liheap-OH-2011.pdf
⁷ See LIHEAP letter to Appropriators, March 29, 2012, republished at http://www.neada.org/news/3.28.12%20FY13%20LIHEAP.pdf