Low-Income Households Deserve Affordable Heating
As we celebrate the holiday season, it’s important to remember that for millions of Americans, paying for necessities like food and heating can be a struggle. Because of this, programs like the Low Income Home Energy Assistance Program, or LIHEAP, exist to help low-income households afford these basic necessities.
What exactly is LIHEAP? LIHEAP is a federal program that supplies block grants to U.S. states, territories, and recognized tribes or tribal organizations to help families pay their energy bills. Each of these entities applies for direct LIHEAP awards, which come in the form of a grant that can then be disbursed to households in need. Each state, tribe or territory sets their eligibility based on income, with the allowable minimum income eligibility ranging from 110 percent and 150 percent of the federal poverty line. The primary targets for LIHEAP funding are households with low incomes, a high percentage of income spent on heating and cooling bills, and/or families with elderly or disabled members or young children.
Today, this vital program serves approximately 5.7 million American households. This year, Congress approved a 56 percent increase in funding from 2022 to 2023, with 2023 funding set at $6.1 billion. For millions of households, the increased funding is the difference between being able to pay their energy bills this holiday season or not. While it is important to note that natural gas utilities do not disconnect customers for delinquent bills during the heating season, alleviating financial stress on low-income customers is critical to their overall wellbeing. This program gives millions of low-income customers the confidence that they can afford to keep their homes warm and safe.
Despite this massive increase, 2022 was an unprecedented year for global energy markets. A perfect storm of unusually cold weather, limited takeaway capacity from U.S. natural gas production sites, and an uncertain global market driven by Vladimir Putin’s invasion of Ukraine drove international prices for natural gas as high as $100/MMBtu, and prices at the U.S. Henry Hub as high as $10/MMBtu, a level not seen since the Shale Revolution sent U.S. prices for natural gas plummeting in the mid 2000’s. While prices have since come back down, it took some time for the change in price to work its way through regulatory bodies and to customers.
Because of this, AGA is asking Congress to support supplementary funding for LIHEAP and is aiming for an additional $1.6 billion in funding for low-income households. We’re pleased that this measure has strong bipartisan support and will continue to advocate on behalf of our most vulnerable customers.