Amid high heating prices, emergency funding for energy bills dries up

The summer of 2023 was the hottest on record, according to NASA scientists. The relentless heat had people nationwide cranking up their air conditioners—and their energy bills. With winter looming and heating prices still near record highs, states are in jeopardy of losing $2 billion in federal funding to help lower-income families pay their energy bills. 

A million households, as a result, may struggle to heat and cool their homes next year, said Mark Wolfe, executive director of the National Energy Assistance Directors Association, which represents state and local agencies that administer the 42-year-old Low Income Home Energy Assistance Program, or LIHEAP.

“Prices are still unaffordable. People are struggling to pay these bills,” he said. Wolfe added that should the program not receive additional funding in the spending package Congress is currently negotiating, “we'll have to cut back the number served.”

As heating prices reached a 10-year high last winter, Congress added an additional $2 billion in emergency funding to the $4 billion program, which covered about six million people. But that one-time funding has run out, and the spending bills passed by both the House and Senate appropriations committees only provide $4 billion for the program next year.

President Joe Biden last month urged Congress to again approve one-time emergency funding for LIHEAP, calling for $1.6 billion in his proposed $56 billion domestic supplemental funding package. The proposed funding would finance other programs competing for scarce dollars, including resuming the child care subsidies that ended on Sept. 30 and continuing subsidies that help low-income families pay for broadband.

“This funding is critical to preventing drastic service and benefit cuts compared to last year,” the White House said in a fact sheet about the request. 

Alaska Sen. Lisa Murkowski, a Republican, joined Rhode Island Sen. Jack Reed and 26 other Democratic senators in urging Congress to approve more money for LIHEAP. “With limited funding,” they wrote in a letter in October, “states will face tough choices about the amount of assistance they can provide and the number of people they can serve.”

It is unclear, however, if House Republicans will heed the call for more LIHEAP funding. In approving a spending bill on Friday that reduced funding for the Environmental Protection Agency by almost 40%, Republicans said they were willing to make “tough choices to rein in federal spending.”

“We just have to wait and see what the House does,” said Katrina Metzler, executive director of the National Energy and Utility Affordability Coalition. “The new speaker is getting settled.”

“Congress is so dysfunctional right now that the government could shut down,” Wolfe added. “There’s a lot of uncertainty in Congress.”

As winter approaches, Wolfe's organization estimates that heating costs will remain high for many families. In one piece of good news, the price of natural gas is expected to drop 7.8 percent. But with Russia and Saudi Arabia reducing petroleum production, families living in homes heated by oil will be spending about 8.7% more than last year. And heating homes with propane will cost 4.2% more than last year. 

Even with the additional funding this year, it was only enough to help 16% of those who are eligible, according to Metzler. “And that number would change for the worse if we didn't receive any supplemental funding this year,” she said.

The percentage of low-income people who get the assistance varies from state to state. 

In Texas, only about 4.6% of those who are eligible receive help. One reason for that is that the state has higher energy prices than others, according to a spokesperson. In other words, the state gives out more in aid—about $2,400 a year to each household, much more than most states—to fewer families.

California’s share of the funding was only enough to assist 7% of those who were eligible, said a spokesperson for the state’s Department of Community Services and Development. They prioritize households with the lowest incomes, highest energy burden, children, older adults and those living with disabilities.

The impact of a reduction in funding on states would also vary, according to those contacted by Route Fifty. 

But reducing or eliminating how much assistance a household receives would mean they’d have to pay more for energy.  “For many struggling families, higher prices can mean being forced to choose between heat, food or medication,” the National Energy Assistance Directors Association said in a letter to congressional leaders in September. The group also said a reduction in funding would come as states are reporting that the number of people applying for the program has increased by between 10% to 20% this year. 

Hawaii, which has among the highest utility rates in the country, has been expanding the number of people who are eligible for help, the state’s department of human services said. With the end of other forms of pandemic assistance, more people are also applying for LIHEAP.  The state intends to give assistance to all who are seeking help. But with less funding, the state will have to reduce how much relief it can give to each household. “So an increase in numbers with a decrease in budget,” the department said.

The Sacramento Municipal Utility District offers low-income families up to a $70-a-month discount on their energy bills and extends how long customers have to pay their bills. Still, Kim Rikalo, who manages the utility’s customer and community services, said not receiving as much in federal aid would  “significantly impact” the 5,500 households who are ”facing financial strains after the pandemic, along with challenges posed by inflation.”

A spokesperson for the Nevada Department of Health and Human Services said more people have been applying for the assistance. However the state is providing enough funding that it “has sufficient funding at this time and does not anticipate any impact to Nevadans.”

John Godfrey, senior director of government relations for the American Public Power Association, which represents public utilities serving 2,000 towns and cities nationally, was particularly concerned about how a decline in funding would affect people served by smaller utilities that are less able to help low-income customers.

“If households are struggling to pay their bills that means that somebody else has to come in,” he said. “A smaller community may not have the resources to respond [in absence of LIHEAP].”