On the Block: Energy Assistance Programs

During the holiday season, many of us wish for a “White Christmas” while we “dream by the fire.” For others, the warmth of the season is illusive, with high heating costs and declining income leaving them vulnerable to the cold. Congress created two programs to help the less fortunate afford to heat their home during the winter: the Low Income Home Energy Assistance Program (LIHEAP) and the Weatherization Assistance Program (WAP).

The deadly effects of lack of warmth during the winter are a statistical reality. Two economists associated with the National Bureau of Economic Research (NBER) wrote a study of the effects of extreme heat and extreme cold on death rates. They found that, on average, over 14,000 people die each year in the United States of exposure to extreme cold temperatures. Even worse, those who die during cold snaps could live upwards of 10 more years if they had been warm enough. Elderly and low-income residents are most likely to be effected by cold weather, and these are the groups LIHEAP and WAP target.

LIHEAP, which is administered by the Department of Health and Human Services (HHS), provides low-income households with grants to offset heating costs. This accounts for almost half of LIHEAP's annual budget. While HHS provide some weatherization assistance, the majority of that comes from the Department of Energy's Weatherization Assistance Program. WAP provides grants to help with insulation and repairs to increase a home's energy efficiency. (The amount states received for each program is part of our database – LIHEAP can be found under “Income Security & Labor” and WAP can be found under “Environment, Energy, and Science.”)

The benefits provided by these programs differ greatly in their utility. In Massachusetts, for example, the average WAP benefit is $5,500, which is sufficient for a home insulation project. On top of the one time grant to purchase insulation (which is especially critical for the elderly who cannot do it themselves), the Department of Energy estimates that a fully insulated home can save the homeowner $437 a year on energy bills.

LIHEAP, however, is subject to a number of variables that bring the real value of the grant down. The cost of heating oil – a staple in most Northeastern homes – has skyrocketed in the last ten years. In Connecticut, the average price of a gallon of heating oil has risen from $1.28 in 2001 to the current price of $3.32 per gallon. Additionally, each year's grant provides the state a fixed amount of money, which they may or may not supplement. The rising number of unemployed people needing help making ends meet has forced agencies providing LIHEAP grants to lower the dollar amount of each grant in order to assist more people.

So far WAP and LIHEAP are not on the chopping block, so to speak. Both received an increase in funds from the American Recovery and Reinvestment Act of 2009, otherwise known as the stimulus package. In the Continuing Resolution passed by Congress on December 21st, LIHEAP is specifically funded at Fiscal Year 2010 levels; at $5.1 billion, this would be less than the $5.3 billion the Department of Health and Human Services asked for for Fiscal Year 2011. The Department of Energy asked for $115 million more for WAP, but it too is presumed to be funded at last year's levels until further notice.

These programs work in conjunction with eachother to provide low income households with both short term and long term energy assistance. Increasing demand from the millions of unemployed Americans this winter will force both LIHEAP and WAP to do more with less. Funding below the White House's request for these programs is just one example of the problems caused by Congress' inability to pass a FY 2011 budget. And these programs, and the departments that run them, are far from the only ones hanging in the balance.