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Low Income Energy Assistance
Background
The Low Income Home Energy Assistance Program (LIHEAP) is a federal block grant program that provides financial assistance to low- and fixed-income individuals for fuel and utility bills, as well as low-cost weatherization and energy-related home repairs.
LIHEAP is administered by the states, with each state having maximum flexibility in directing program funds. In addition, state and local governments provide assistance through taxpayer-funded initiatives. Fuel funds and other charitable groups also provide direct assistance, funded by donations, to those in need. Utilities help these customers through discounts, fee waivers, arrearage forgiveness, and efficiency/weatherization programs, funded by customers and stockholders. In 2004, nearly half of all energy assistance dollars for low-income households was provided through utility rate assistance and efficiency programs enacted through state legislative and regulatory actions.
Since LIHEAP was created in 1981, it has been funded at about the same level - $2 billion - even though the average energy bill has tripled and the consumer price index has increased by 80 percent since that time. The number of low-income homes also has grown, as evidenced by the 78 percent jump in households eligible for federal energy aid between 1981 and 2006. Finally, the costs of all home-heating fuels, including natural gas, are currently at historic highs, so programs that help low-income households pay their energy bills are more critical than ever.
The Energy Policy Act of 2005 reauthorized LIHEAP through 2007 and increased the authorization for the basic grant from $2 billion to $5.1 billion. For FY2006, Congress approved a total of $3.2 billion in LIHEAP funding, the highest level of federal funding the program has ever received. LIHEAP will be funded at $2.2 billion for the remainder of this fiscal year unless Congress passes additional appropriations in a supplemental bill. The President's FY2008 budget request is $1.5 billion in base and $282 million in contingency funding, a proposal that would further cut the program by 44% from its 2006 record high.
AGA Viewpoint
AGA strongly supports appropriating the $5.1 billion in LIHEAP funding authorized in the Energy Policy Act of 2005. AGA has taken the lead in increasing LIHEAP funding for all states by building a strong coalition of energy trade associations, state and local governments, and non-profit organizations. If funded at the full $5.1 billion, LIHEAP could assist more than twice the current number of beneficiary households. This would provide assistance to 30 percent of those eligible for home heating aid.
News, Reports and Additional Resources
Additional Information
AGA Contact: Vivan Lausevic, (202) 824-7208
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