Congress should appropriate $500 million for low-income energy program

President Joe Biden proposed including a $500 million emergency supplemental appropriation for the Low-Income Home Energy Assistance Program (LIHEAP) in the coming stopgap funding bill for 2023, to help households cope with high prices for home heating fuels as winter approaches.

With prices high and more than 20 million U.S. families behind on their utility bills, Congress should appropriate at least that amount, according to David Reich, a senior fellow at Center on Budget and Policy Priorities, who advocates spending more if possible.

“LIHEAP provides funds by formula to states, tribes, and territories to help low-income households meet household energy bills,” said Reich. “Within federal guidelines, states and other recipients have flexibility to design their programs to best meet their needs.”

The largest share of LIHEAP funding goes to help pay heating costs, but substantial amounts are also used to assist with summer cooling costs, to provide crisis assistance (such as payments to prevent utility shutoffs or to repair heating and cooling equipment), and to pay for weatherization to reduce energy costs.

“The need for LIHEAP is growing as energy costs have been rising, reflecting dislocations in energy markets resulting from the Russian invasion of Ukraine, among other things. The consumer price index shows that prices for home heating oil, natural gas, and electricity all rose sharply over the past year,” said Reich.

Those prices may moderate a bit but are expected to remain high.

The Department of Energy is forecasting that in the last quarter of 2022, prices for home heating oil will be up 37 percent relative to the same period in 2021, while residential prices for natural gas will be up 27 percent and for electricity by 6 percent.

According to the association of state officials who administer LIHEAP, more than 20 million U.S. families are now behind on paying their utility bills, with those families owing about $16 billion — up from about $8.1 billion in December 2019.

“Despite sharply rising energy prices and growing needs, without a supplemental appropriation or other specific relief, funding for LIHEAP will remain at the fiscal year 2022 level of $3.9 billion under the stopgap continuing resolution, which is expected to remain in place at least until mid-December and perhaps beyond,” said Reich. “With rising energy costs and falling temperatures, supplemental appropriations for LIHEAP are urgently needed. The pending continuing resolution for 2023 would be a good vehicle for doing that.”

The U.S. Department of Health and Human Services (HHS), Administration for Children and Families (ACF), Office of Community Services (OCS), Division of Energy Assistance (DEA), has allocated all of the LIHEAP funding available for 2022.

New Jersey received $130.8 million of the total $3.9 billion LIHEAP allocation.

Affordable utilities are essential to promoting physical health and combating the harmful health impacts of extreme weather caused by climate change.