What's the Energy Assistance Program and Who Offers It?

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Category: Home Utilities
Posted on: 09/08/2020
What's the Energy Assistance Program and Who Offers It?

U.S. electricity rates are among the cheapest in the developed world, yet it is still hard for some families to pay their utility bills. According to the U.S. Energy Information Administration (EIA), 31 percent of U.S. households were having difficulties paying their energy bills or keeping their homes warm or cool in 2015. Households with the lowest incomes typically pay the highest proportion, often 20% of their income or more, on energy. Economists usually consider energy bills of 6% of the household income as affordable

The Low-Income Home Energy Assistance Program (LIHEAP) is a federal program that helps low-income families stay safe and healthy by assisting them with their energy costs. The program was first established in 1981 and consists of different initiatives that assist families with paying home energy bills, during energy crises such as utility shutoffs, and with weatherization projects and minor energy-related home repairs to stay warm in the winter and cool in the summer. 

How the Program Works

According to the EIA's Residential Energy Consumption Survey (RECS), about 20 percent of U.S. households reduced their basic necessities like food and medicine or went completely without them to be able to pay their energy bills. Eleven percent of households kept their homes at an unhealthy or even unsafe temperature because they couldn't afford to heat or cool their homes. In particular, the elderly, disabled people, and young children are impacted by even minor changes in indoor air temperature. 

LIHEAP does not pay for all of your energy costs. It usually assists you with the bill for your main heating or cooling source. If your home has gas heating, you may not get assistance with your electric bill. LIHEAP funds are distributed unevenly among states based on the local climate, economic, and demographic situation; in some areas, you may receive higher benefits than in others.

Under the weatherization initiative, low-income households can get free home improvements making their homes more energy-efficient. These upgrades can be furnace replacements, home insulation, and infiltration reduction.

Eligibility for the Energy Assistance Program

Eligibility for energy assistance and benefits vary from state to state. A household's eligibility is generally based on the Federal Poverty Guidelines (FPG) depending on household income, household size, the primary heating source, and whether any household members are under the age of 6, over the age of 60, or are permanently disabled.

The main criterion for eligibility, set by LIHEAP statute, is your maximum household income. The household's maximum income must be between 110 percent and 150 percent of the current Federal Poverty Guidelines (FPG), or 60 percent of the median income in your state. Each state can set maximum income at any point within that range.

In some cases, energy assistance can also be tied to other benefits. In some states, residents are eligible for energy assistance if they receive public assistance or benefits such as Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), or Code A Supplemental Security Income (SSI Living Alone). Requirements for receiving LIHEAP benefits vary based on your location. Contact your local LIHEAP office to learn about the requirements for receiving energy assistance.

Eligibility for LIHEAP does not automatically qualify you for receiving assistance. Program funds are limited, and they're given out on a first-come, first-served basis. Households with the greatest home energy needs in relation to household income and number of household members receive higher benefits, as well as those with elderly or disabled members or young children. About 20 percent of households that are qualified for LIHEAP each year receive benefits.

Where Is Energy Assistance Available? 

The fifty states, the District of Columbia, five U.S. territories, and over 150 tribes and tribal organizations administer the program and the LIHEAP grants they receive from the Federal Government. The program is designed differently in every state, and each state has different rules about how to apply, when to apply, and eligibility requirements. Contact your local LIHEAP office for information about energy assistance in your city.

Depending on your state, other energy assistance programs are available, such as the Home Energy Assistance Program (HEAP) in New York State or the Home Energy Assistance Target (HEAT) program in Utah or the Electric Universal Service Program (EUSP) in Maryland. These state programs are often tied to eligibility for LIHEAP.

Who Offers Energy Assistance?

The Low Income Home Energy Assistance Program is run by the U.S. Department of Health and Human Services (HHS). Each year, Federal funding is distributed to the states, U.S. territories, and tribal governments, which often provide additional money to the federal LIHEAP funds they receive. 

The federal government does not help you pay your energy bills directly. Each state has its own form and rules for applying for energy assistance. Contact your local LIHEAP office for details about applying for LIHEAP. Some electric and gas utilities, churches, and social services organizations also have emergency financial assistance programs to support low-income households.

One of the most frequently offered programs is budget billing for electricity and natural gas. With budget billing, utility customers can receive monthly bills in the same amount from their electric or gas supplier. The amount is usually based on the previous year's average consumption and is typically adjusted according to the customer's usage.

Other programs, such as the Customer Assistance Programs (CAP), help utility customers lower monthly utility bills by working with the customer to determine what they can pay. Customer Assistance Referral and Evaluation Programs (CARES) help customers with special needs such as family emergencies, divorce, unemployment, or medical emergencies find ways to pay their utility bills. The Low-Income Usage Reduction Program (LIURP) helps low-income households save electricity or gas, for example, by installing energy-saving measures in their homes.

Utility company hardship funds help customers pay their utility bills by providing assistance grants to customers who are not eligible to receive other financial assistance or those who still need assistance after exhausting all other resources.

Customers must meet certain income limits and be payment-troubled to qualify for CAP, LIURP, CARES, and hardship funds. To find out what other programs are operated by your local LIHEAP office, utility company, or other charities, contact your local LIHEAP office or the National Energy Assistance Referral Hotline at (866) 674-6327 for more information.

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