Low-Income Home Energy Assistance Program Research Articles

Behavioral and financial coping strategies among energy-insecure households

When households struggle to pay their energy bills and avoid being disconnected from the grid, they may accrue debt, forgo expenses on food, and use space heaters or ovens to warm their homes. These coping strategies can introduce significant physical and financial risks. In this study, we analyze an original survey with a representative sample of low-income households during the first year of the COVID-19 pandemic, from June 2020 to May 2021. We evaluate the prevalence of a wide range of coping strategies and empirically estimate the determinants of these strategies. We find that more than half of all low-income households engage in at least one coping strategy, and many use multiple strategies. Households with vulnerable members, including young children or those who rely on electronic medical devices, and households that live in deficient housing conditions, are more likely to use a range of coping strategies, and many at once. Our findings have direct implications for public policy improvements, including modifications to the US Weatherization Assistance Program, the Low-Income Home Energy Assistance Program, and state utility disconnection protections.

Red tape is not so hot: Asset tests impact participation in the Low-Income Home Energy Assistance Program

Many social welfare programs, including the Low-Income Home Energy Assistance Program (LIHEAP) consider both income and assets to determine assistance eligibility. LIHEAP is historically an underfunded block grant program that helps low-income households pay their utility bills. LIHEAP's eligibility requirements, including the presence of an asset test, are at the discretion of the state. Asset tests are included in welfare programs to limit abuse of the benefit; however, the literature suggests that building assets is important to overall well-being. Using a generalized difference-in-difference model, we evaluate the effect of eliminating an asset test on LIHEAP's participation rates and administration costs. We find that the inclusion of an asset test reduces program participation in a regressive manner, hurting the lowest-income households the most, and increases average administrative costs of program operations. On average, we estimate that the elimination of asset tests would allow each state that retained an asset test to heat an additional 9097 households in 2014. Therefore, LIHEAP's asset tests may divert resources that could be used to assist low-income households. In the absence of expanding LIHEAP funding, we recommend eliminating asset tests and lowering the income-eligibility thresholds so that existing funds can be targeted to the lowest-income households.

THE IMPACT OF LOW‐INCOME HOME ENERGY ASSISTANCE PROGRAM PARTICIPATION ON HOUSEHOLD ENERGY INSECURITY

The impact of the low‐income home energy assistance program (LIHEAP), the single largest energy assistance program available to poor households in the United States has received little rigorous attention. If LIHEAP participation significantly improves low‐income household energy security, funding cuts or eliminating the program could negatively impact the poor. This article empirically estimates the impact of LIHEAP on household energy security. The results indicate participation in LIHEAP significantly increases energy security in low‐income households. Simulations suggest that elimination of the current household energy‐assistance safety net will decrease the number of low‐income energy secure households by over 17%. (JEL I38, Q48)

The Assault on Workers’ Rights

The November 2010 election in the USA resulted in a wave of conservative candidates winning in local and national contests, and taking office in January 2011. Most analysts argued that this election result was due to a combination of typically small voter turnout for by-elections, a strong turnout by zealous advocates of the now well known Tea Party, and general voter dissatisfaction with the sluggish state of the economy and relatively high unemployment levels. Progressives and those who made up the ‘Obama coalition’ were discouraged after two years of tepid political action and a general disappointment over the positions and programs of Obama’s presidency to that point. All reports indicated that the key issue for voters was the economy and unemployment, and yet after the election, to hear conservative politicians tell it, it was this mantra that government was too big, spending exceeded revenues, and the voters have voiced their desire to put an end to government regulations and reduce the national debt. The neoliberal agenda is now in full swing, Republicans at all levels of government speak with one voice, and social programs are on the radar to be eliminated. Emboldened conservatives are demanding major cuts in social programs to the tune of over $60bn in the current budget, and are attacking the favorite targets of the Right. Programs like National Public Radio and Headstart programs for children are on the chopping block, and even the Obama administration is climbing on the bandwagon by proposing to cut funding for LIHEAP (Low Income Home Energy Assistance Program) designed to subsidize fuel costs for the indigent. With no sense of embarrassment, and with the rhetoric pouring out about the need to curtail the deficit even as these targets hardly put a dent in the problem, critical services long opposed by conservatives are in line for defunding. Regulations designed to protect consumers or curtail the actions of corporations in finance, pharmaceuticals, mineral extraction, oil exploration, food production and all the rest are called ‘job killing’ restraint, and either the regulations are being dismantled and altered or the enforcement arm of government agencies are having budgets slashed. A feeding frenzy has begun on the right, and the target is all those programs and policies that enable workers to fight for a decent life. What cannot be done on the Federal level is being done in many of those state governments recently captured by conservatives. Governors of many states have announced cutbacks on Medicaid and a reduction in the number of weeks unemployed workers can receive benefits, all the while cutting business and other taxes. Perhaps the most transparent of these efforts are seen in Wisconsin and Ohio, where any semblance of a rationale to cut costs has disappeared. The recently elected Wisconsin governor and state legislature announced that in order to balance the state budget, concessions from state workers are necessary and the only way to ensure these concessions is to legislatively deny public sector workers the right to collective bargaining. Never mind that a business tax cut passed in the opening of the legislative year in Wisconsin resulted in a loss of Critical Sociology 37(5) 507 –511 © The Author(s) 2011 Reprints and permission: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/0896920511408343 crs.sagepub.com 408343 CRSXXX10.1177/0896920511408343FasenfestCritical Sociology

Concerns Over the Allocation Methods Employed in the US Low-Income Home Energy Assistance Program

The Low-Income Home Energy Assistance Program (LIHEAP) is the largest federal energy assistance program in the United States and forms an important component of the social safety net for low-income households. The manner in which LIHEAP funds are allocated to states has been a contentious issue since the inception of the program. The distribution of funds among states is not proportionate to the need for assistance based on commonly accepted standards of fairness, with states in the Northeast and Midwest receiving more, and states in the South and West, less than they should. We derived and evaluated the formula by which states receive LIHEAP funding, and we found that unanticipated circumstances, not congressional intent, have perpetuated an inequitable distribution. In 1984, Congress corrected the formula it had hastily enacted in 1981 using a rational and equitable allocation system. It also added provisions, however, that prevented the improved system from being activated. As Congress considers future reauthorizations of LIHEAP, it has three options: to fully implement the intent of the 1984 reform of the program; to acknowledge that LIHEAP is primarily a heating-assistance program and adopt a heating-only formula to distribute LIHEAP funding; or to significantly increase LIHEAP funding. The history of LIHEAP appropriations does not imply that the reforms incorporated in the 1984 legislation should be thwarted; it implies that Congress should remove or reduce the legislative provisions that have produced the unintended result. Congress can fully implement the 1984 reform by removing the trigger appropriation or reducing the threshold to $1 billion or less.

Science and politics: The 1981 and 1984 LIHEAP distribution formulas

The Low-Income Home Energy Assistance Program (LIHEAP) is a federal block grant program to help low-income households pay their heating and cooling bills. If the regular fiscal year LIHEAP appropriation is less than or equal to $1.975 billion, then a 1981 formula is applied to distribute funding across states, while if appropriations rise above the $1.975 billion threshold, a 1984 formula is applied in conjunction with two hold-harmless provisions. In 18 of the past 20 years, the 1981 formula has served as the default mechanism to distribute LIHEAP funding. The purpose of this paper is to call attention to the inadequacy of the 1981 formula and to explain why the objectives of LIHEAP are not met when this formula is used. We explain why the distribution of LIHEAP funds is not proportionate to the need for assistance and offer some suggestions for improvement. The 1981 formula is shown to be the outcome of a convoluted political process heavily biased in favor of cold-climate states, with cold-climate states receiving on-the-order of at least $150 million a year in allotment dollars beyond their “fair share” of heating requirements. The 1981 and 1984 distribution formulas are derived and a critical examination of each formula is presented. The 1984 formula is shown to be an ideal mechanism to distribute LIHEAP funds, based on a scientific and rational understanding of low-income energy needs, but legislative constraints prevent its application.

The design of a dynamic allocation mechanism for the federal energy assistance program LIHEAP

A dynamic allocation mechanism for the Low-Income Home Energy Assistance Program (LIHEAP) is designed and analyzed using a theoretical decision-making framework. LIHEAP is a federal block grant program established in 1981 to help low-income households meet a portion of their home energy costs. The manner in which LIHEAP funds are allocated to states, however, has been a contentious issue since the inception of the program with many warm-weather states objecting to the distribution formula since it did not adequately address the cooling requirements of their states. In 1984, the Health and Human Services developed a more equitable formula by incorporating state cooling requirements in an equal weighting scheme with state heating requirements. In addition to the new distribution formula, various provisions were also legislated that specified when and how the 1984 formula could be employed. These provisions have turned out to be so constraining that they have effectively disabled the 1984 formula, and the consequence of the amendments is that an ad hoc and arbitrary formula for allocating funds among states continues to be applied. The purpose of this paper is to design a dynamic allocation mechanism that adjusts the provisions of the LIHEAP statute relative to the level of the regular appropriation. Specifically, the trigger level that enables the 1984 formula is considered a design parameter and the effect of a trigger level reduction on state allotments is described. The LIHEAP statute is quantified and the allocation percentages are represented in terms of a “universal tableaux.” System functionals that quantify the capital transfer between recipient states is defined and empirically constructed. The probability of realizing a fair allotment is computed as a function of various decision parameters.

The impact of the hold-harmless and give-back provisions on the Low-Income Home Energy Assistance Program allocation mechanism

The federal government distributes funds to states in a block grant for the Low-Income Home Energy Assistance Program (LIHEAP) using a mechanism based on hold-harmless and give back provisions triggered at various appropriation levels. If the regular appropriation in a given fiscal year is less than or equal to $1.975B, then a 1981 formula is used to allocate funds, while if the regular appropriation exceeds $1.975B, then a 1984 formula is applied in conjunction with a primary hold-harmless provision and a secondary hold-harmless provision triggered at $2.25B. The 1984 formula is a more equitable distribution mechanism than the 1981 formula, but because of the high legislated value of the trigger, has only rarely been employed—specifically, twice over the past 17 years, and last during the fiscal year 1986. In this paper, the history and legislative amendments of LIHEAP will be briefly reviewed, and then the LIHEAP statute will be investigated in terms of the hold-harmless and give-back provisions. A general analytic and computational framework is developed to analyze the impact of the hold-harmless and give-back provisions, and aggregate system measures are employed to examine the manner in which these provisions distort the 1984 formula allocation percentages.

03/01969 Weatherizing the homes of low-income home energy assistance program clients: a programmatic assessment: Tonn, B. et al. Energy Policy, 2003, 31, (8), 735–744

03/01969 Weatherizing the homes of low-income home energy assistance program clients: a programmatic assessment: Tonn, B. et al. Energy Policy, 2003, 31, (8), 735–744

LIHEAP Reauthorization: Is the Time Right for a Formula Fight?

During reauthorization of the Low-Income Home Energy Assistance Program, Congress and the Bush administration will need to address the issue of whether the allocation mechanism used to distribute LIHEAP funds should be revised. Defenders of the status quo argue that even debating this issue could destroy political consensus on LIHEAP and lead to reduced funding or abolition of the program. Proponents of change maintain the current formula is grossly inequitable.

LIHEAP reconsidered

The Low-Income Home Energy Assistance Program (LIHEAP) is a federal block grant program established in 1981 to help low-income households meet a portion of their home energy costs. The manner in which LIHEAP funds are allocated to states, however, has been a contentious issue since the inception of the program. In 1984, the Health and Human Services developed a new formula to increase equity among the states by incorporating state cooling requirements in an equal weighting scheme with state heating requirements. In addition to the new distribution formula, various provisions were also included in the LIHEAP re-authorization amendment that specified when and how the 1984 formula could be employed. These provisions have turned out to be so constraining, however, that they have effectively disabled the 1984 formula. The purpose of this paper is to introduce realistic policy alternatives to the current LIHEAP allocation mechanism and to examine the impact of each alternative. Three options are discussed ranging from the complete elimination of the hold-harmless (HH) provisions to a proposal that maintains the primary HH provision but reduces the trigger level when it is enabled. A simple allotment block distribution based on mixing the two competing funding formulas is also considered. The models presented in this paper represent the first time that policy alternatives to the LIHEAP allocation mechanism has been examined within an analytic framework.

Weatherizing the homes of low-income home energy assistance program clients: a programmatic assessment

The purpose of this project was to assess the relationships between two United States (US) federal-level programs that support low-income households, the Weatherization Assistance Program and the Low-Income Home Energy Assistance Program (LIHEAP). The study area for this project was Boston, Massachusetts, which is a representative of large northern urban areas in the US. Data were collected for three groups of households that received both weatherization and LIHEAP assistance and for one control group that only received LIHEAP assistance. The clearest impact of weatherization assistance on changes in LIHEAP assistance is shown in decreases in eligibility for high-energy benefits post-weatherization. A further statistical test also suggests that weatherization has a significant impact in reducing the overall needs for LIHEAP subsidies. However, it cannot be concluded that weatherization reduced the need for standard LIHEAP subsidies. Households in the sample that did drop out of the LIHEAP program had relatively higher incomes, younger household heads, and fewer years in home than those who stayed in the program. These demographics suggest that the households that dropped out of the program were more likely to experience income increases to make them ineligible for the program and were more likely to move out of the study area. Additionally, for no group for no time period did LIHEAP benefits cover all primary heating fuel bills. Thus, the overall conclusions of this study are that weatherization decreased the need for high-energy benefits but did not lead to low-income households relinquishing the need for standard LIHEAP benefits.

LIHEAP as a Textbook Case of Government Befuddlement

The Low-Income Home Energy Assistance Program federal block grant program has been a focus of contention since its inception in 1981 over the manner in which funds are allocated to the states. A 1984 revision to the original funding formula that sought to correct an overallocation of funds to cold-weather states has been so constrained as to be ineffective. The means of distributing LIHEAP funds to states needs to be revised.

Client Consumption Patterns Within An Income-Based Energy Assistance Program

An increasing number of states and utilities are exploring and implementing income-based energy assistance programs for their lowincome clients and customers [Hill, Gonzales and Colton 1990]. Such programs include not only programs involving federal fuel assistance funds,' but programs involving utility rate discounts as well. The Public Utilities Commission of Ohio initiated this approach to low-income problems in 1983 when it ordered that state's utilities to implement a Percentage of Income Plan (PIP).2 Since then, a number of generations of programs have arisen. The Low-Income Home Energy Assistance Program (LIHEAP)-based PIP3 was first implemented in Rhode Island in 1986.4 In Pennsylvania, the Philadelphia Electric Company (PECO) implemented its Customer Assistance Program (CAP), an income-based payment plan program,5 while Wisconsin and Minnesota undertook programs similar to the LIHEAP-based PIP.6 Just recently, the Philadelphia Gas Commission approved an incomebased rate design for the Philadelphia Gas Works7 and the Vermont Department of Public Service proposed an income-based Basic Energy Needs Program (BENP) for regulated non-heating vendors. Some analysts rely upon blackboard economic theory to oppose income-based programs. They argue that such programs are contrary to public policy promoting energy conservation. These analysts assert that implementation of such a program will inexorably lead to the