Category Archives: LIHEAP

Richard Meyer Low-Income Households Most Vulnerable to DOE Furnace Standard

In March, the U.S. Department of Energy (DOE) proposed a rule that would mandate the manufacture of natural gas furnaces that meet a 92 percent or higher specification for energy efficiency. At first glance, the rule appears to be a positive step forward for energy efficiency. In reality, DOE’s proposal would create a number of counterproductive and unintended consequences that could increase energy use.

As I noted in a previous blog post, the rule would put prohibitive installation costs on many consumers, potentially undermine energy efficiency programs and incentives, and lead to higher energy use and emissions from customers induced to switch to less efficient electric equipment.

In this post, I want to focus on the economic burden placed on consumers and in particular low-income households, which are disproportionately vulnerable to higher costs.*

On April 13, DOE held a public meeting on the proposed rule. In its response to concerns about how the rule will affect low-income households, DOE stated that “most low income households are tenants.”

DOE’s argument is that property owners, not renters, are responsible for the higher upfront costs of a furnace installation. Tenants do not have to cover the costs of a higher efficiency furnace, but would enjoy the lower fuel savings. Consequently, low-income households, most of which DOE says are renters, are insulated from the higher costs imposed by DOE’s rule.

Except this is not true. An analysis of US Census data** shows that 53 percent of low-income natural gas households are owner-occupied. Less than half are renters. In fact, 1 out of 7 U.S. households is low-income with a natural gas furnace.

This means up to 9 million low-income home owners with a natural gas furnace would be faced with higher upfront costs imposed under DOE’s rule.

US Households with Nat Gas Space HeatingBecause low-income households have fewer resources to pay for the installation of a higher-efficiency gas furnace, they are more likely to switch to less-expensive electric equipment that costs more to operate. This, in turn, means low-income households are more likely than other homes to see higher utility bills under DOE’s rule.

Even renters could pay more. If a property owner cannot or chooses not to cover the upfront costs of a furnace installation, they may make a switch to less efficient equipment, in which case fuel costs will go up. Many renters pay separate utility bills (myself included). Landlords of these properties don’t see operating costs, so they don’t directly benefit from an upgraded furnace.

Ironically, even the study that DOE cited notes that rental units are less likely to have efficient equipment. In fact, it’s this principal-agent problem that stymies a lot of energy efficiency potential. Are we to just assume, as DOE does, that no landlords will switch to lower-cost electric equipment?

The disproportionate effect of higher costs is one reason why 71 percent of gas utility efficiency programs target low-income customers.

The rule may have a pernicious secondary effect on low-income assistance. Each year, through the Low Income Home Energy Assistance Program (LIHEAP), the Federal government assists the most vulnerable households to meet heating and cooling needs. But the program is stretched already.

Current LIHEAP funding leaves 4 out of 5 eligible households without assistance. The furnace rule could exacerbate this condition. If this rule induces customers to switch to higher cost heating fuels, the requirements of a low-income program like LIHEAP will increase, putting further strain on the program.

Industry concerns about this rule are not about taking a position against energy efficiency. Natural gas utilities have a demonstrated track record of supporting efficiency and reducing household gas consumption. Rather, it’s about re-examining a top-down prescriptive approach and instead applying a comprehensive vision for furnace efficiency, one that recognizes proven approaches that are cost-effective and protects all customers.

*Here’s a rundown on the costs. A 92 percent efficient furnace costs roughly $300 more than unit rated at 80 percent, which is the mandated minimum today. However, the installation cost of these higher-efficiency furnaces be in excess of $1000 to $4000 more, a result of new venting requirements that may be difficult or impossible in some homes.

**AGA analysis of the U.S. American Community Survey, 5-Year 2009-2013 multi-year combination microdata files, accessed via DataFerrett. The summary table shows the breakdown of occupied households with natural gas space heating by tenure and income level (using $45,622 as the low-income threshold)

Posted in appliances, environment, LIHEAP, Natural Gas, people | Comments Off on Low-Income Households Most Vulnerable to DOE Furnace Standard

Christina Nyquist Calling on Congress to Help Low-Income Natural Gas Customers

Senate to Set LIHEAP Funding Levels This Week

This week, the U.S. Senate will make key decisions regarding the ability of vulnerable energy customers to meet their basic home heating and cooling needs. Since 2010, funding for the Low-Income Home Energy Assistance Program (LIHEAP) has dropped by nearly $2 billion and the President’s budget for Fiscal Year (FY) 2015 calls for just $2.8 billion – less than half of the $5.1 billion allocated in FY2010. Even when LIHEAP was funded at $5.1 billion, that amount was only enough to assist one in five eligible Americans.

Today, June 10, the Labor, Health and Human Services, Education and Related Agencies Subcommittee, which funds the LIHEAP program, will mark up their Fiscal Year 2015 appropriations spending bill, setting target funding levels for LIHEAP and other critical programs. The Senate Full Appropriations Committee is then expected to take up the bill on Thursday, June 12.

The National Energy and Utility Affordability Coalition (NEAUC), AGA and low-income energy assistance supporters are calling on Congress to help ensure that all Americans can access essential energy to support their daily needs. AGA has signed a multi-party NEAUC letter, which will be delivered to every member of the House and Senate Appropriations Committees.

Are you a low-income assistance organization or a utility representative? Sign the multi-party letter here.

You can help spread the word through social media or by contacting your representatives. AGA and NEAUC are sharing messages on Twitter at @AGA_naturalgas and @liheapcampaign using the hashtag #LIHEAP. Make sure to mention @SenateApprops in your tweets.

Photo Credit: Center for American Progress

Photo Credit: Center for American Progress

With U.S. Census data showing that more than 46 million Americans live in poverty and that the average low- and fixed-income family spends 13.5 percent of its annual income on energy – nearly twice the 7.2 percent spent by the average U.S. household – the need for sufficient LIHEAP funding is great.

AGA and America’s local natural gas utilities are committed to helping all customers meet their energy needs through efficiency programs and bill payment assistance. In 2012, utilities contributed nearly $3.7 billion in assistance to low-income customers – roughly equal to the $3.47 billion provided in LIHEAP funding that year. This assistance included discounted rates, arrearage forgiveness, weatherization and efficiency programs, and support to charitable organizations that provide resources for customers in need. Utilities also spent $1.1 billion in natural gas efficiency programs for all customers in 2012, helping homes and businesses reduce their typical annual natural gas usage by an average 16 percent and save $117 in annual energy costs.

You can find more information about LIHEAP in a 2014 report, Investing in LIHEAP, and individual state factsheets detailing funding scenarios, demographic information and the number of households served.

Posted in LIHEAP, Natural Gas, people, safety, weather, winter heating | Comments Off on Calling on Congress to Help Low-Income Natural Gas Customers

Lisa O'Leary AGA Members Unveil LIHEAP Trolley Tour in Western PA

Four utility members of the American Gas Association (AGA) located in Western Pennsylvania kicked off the Low Income Energy Assistance Program (LIHEAP) for the 2012-2012 winter heating season with the announcement of a new outreach program.

The “Partners for Warmth” — comprised of Columbia Gas of Pennsylvania, Equitable Gas Company, Peoples Natural Gas, and Peoples TWP — officially launched the new LIEHAP Trolley Tour in an effort to spread awareness of available funds. The trolley, powered by clean natural gas, will make stops in Pittsburgh, Homestead, Washington, Aliquippa, Butler and New Kensington and provide assistance in applying for LIHEAP to area residents.

LIHEAP is a block grant program under which the federal government gives states annual funds to operate home energy assistance programs for low-income households that struggle to heat their homes in the winter and cool them during the hot summer months. Each year, AGA joins the National Fuel Funds Network in sponsoring LIHEAP Action Day, a day of activities aimed at building awareness about this life-saving program on Capitol Hill. AGA advocated for at least $5.1 billion in LIHEAP funding for FY2013, but only $3.472 billion was approved.

“Approximately $200 million in LIHEAP funds are available to Pennsylvania residents this winter heating season to stay safe and warm in their homes,” said Equitable Gas President Bill Lucas. “It is vital that individuals and families receive the assistance they need.  Therefore, the Partners for Warmth continue our joint LIHEAP promotion efforts to let our customers know help is available.  Our ambitious goal is to have every customer who is qualified for a LIHEAP grant apply for a LIHEAP grant between now and March 29, 2013.”

Eligibility guidelines for LIHEAP change, and customers who may not have been eligible in the past are encouraged to reapply. For the 2012-2013 winter heating season, the income eligibility limit is 150% of federal poverty income guidelines. This means a family of four cannot exceed an annual income of $34,575 to be eligible.  The minimum grant for the heating season is $100.  LIHEAP closes March 29, 2013, or earlier if funds run out.

To learn more about LIHEAP funding and how to apply, visit

Posted in LIHEAP, utility, winter heating | Comments Off on AGA Members Unveil LIHEAP Trolley Tour in Western PA

Christina Nyquist Advocates Descend on Capitol Hill for Summer LIHEAP Action Day

Citizens from across our nation descended on Capitol Hill yesterday with a clear message for lawmakers: for millions of American households struggling to pay their energy bills, a fully-funded Low Income Home Energy Assistance Program (LIHEAP) is as critical in the dog days of summer as it is in the frigid winter months.

“Record numbers of our fellow citizens have suffered this summer,” said Marsha Belcher, of the Community and Economic Development Association of Cook County (CEDA), and chair of the National Fuel Funds Network (NFFN) Board of Directors. 2012 has seen an unprecedented number of heat-related deaths in the United States. “We are here because we want to help those families afford the energy they need to stay cool.”

After gathering at the headquarters of the American Gas Association, 65 LIHEAP advocates met with Congressional members and their staff from approximately 100 offices for almost seven hours to present their case and discuss why, even in tight budget times, energy assistance is for our nation’s most vulnerable and it must not be sacrificed. AGA joins these advocates in the belief that Congress should appropriate at least $5.1 billion in Fiscal Year (FY) 2013 for LIHEAP funding.

LIHEAP Action Day participants prepare to meet with Congress at AGA headquarters on Tuesday morning.

LIHEAP helps those who truly need the assistance. Here are the facts:

  • About 75 percent of LIHEAP households earn less than $15,000 a year.
  • 50 percent earn less than $10,000.
  • Almost all recipient households support someone who is disabled, elderly, or have a child under 6.
  • More than 40 percent of recipients are seniors living on fixed incomes.
  • 20 percent of LIHEAP recipients are veterans.

Patty Riddlebarger, of Entergy Corporation, said speaking with policymakers and telling themabout the people behind the LIHEAP numbers was “a positively inspirational experience.”

“Hearing the stories about the struggles of families in need and their courage in the face of hardships we can only imagine makes all the difference in helping our elected officials understand the significant impact that their support for LIHEAP can have on our neighbors in need,” she said.

LIHEAP is an effective, life-saving program. When LIHEAP was funded at its highest level in FY09 and FY10, that $5.1 billion helped about 8.9 million households, or about 23 million people. Still, that only assisted one out of five eligible Americans.

Now, the need for LIHEAP is greater than ever. Poverty and unemployment are at historic levels, increasing the number of households eligible for assistance. The number of veteran households seeking LIHEAP aid has jumped 150 percent since FY08. For more than half of America’s households, energy bills account for more than 20 percent of their budget. For those making less than $10,000 a year, energy costs eat up over 75 percent of their income. These homes must make tough choices, possibly sacrificing other needs in order to pay their utility bills.

Congress is proposing $3.47 billion and the Administration is proposing just $3.02 billion for FY13 for this crucial life-saving program. All in attendance agreed that these proposals fall woefully short of what is needed.

The day culminated with a presentation of the NFFN Extra Mile award to Congressman Gene Green of Texas. The award recognizes those who demonstrate exemplary leadership and strong support for increased LIHEAP funding by taking extra steps to speak out in a congressional committee or on the House floor, securing legislation, generating media coverage, or more.

Marsha Belcher of CEDA and chair of the NFFN Board of Directors and Kim Campbell of TXU Energy stand with Texas Congressman Gene Green as he receives the NFFN Extra Mile Award. Photo credit: Ed Rissing, Coalition for Affordable Energy for All

AGA was proud to provide a “home away from home” for these advocates as they continue the fight  for this important program.

Posted in energy, LIHEAP, people, safety, winter heating | 1 Comment