Economic Slowdown Means More Americans Need Help with Energy Bills

Contact: Mark Wolfe
Phone: Mark Wolfe 202-237-5199/cell: 202-320-9046
Date: October 3, 2001

WASHINGTON, DC — Pointing to a recent surge in unemployment and a dramatic increase among households that are receiving emergency low income energy assistance, the National Energy Assistance Directors’ Association (NEADA) today called on Congress to appropriate $2 billion for the Low-Income Home Energy Assistance Program (LIHEAP), a $600 million increase in LIHEAP to help those workers and other low-income households.

Wolfe, NEADA’s Executive Director, who represents the directors of state programs helping families pay their heating bills, predicted that even a “normal winter” and normal energy prices could lead to severe hardship among the nation’s low-income households. In addition, because many consumers have not recovered from last winter’s high prices, many are beginning this year’s heating season with significant arrearages.

Low income households are having an increasingly difficult time paying their home energy bills. Last year, the number of households receiving energy assistance increased by 30% from 3.9 million to almost 5 million. Twelve states reported increases of more than 40%.

Last week’s unemployment data was the highest in nearly four years. Even more alarming, the number of households receiving crises assistance (those who are at risk of utility shutoff) also increased by 30%. Twenty one states reported increases of more than 60%.

Another serious indication of the need for additional assistance in the increase in utility arrearages and bad debt. Limited data collected by NEADA suggest that this problem is growing rapidly and can only be addressed through additional federal funding. The following provides a summary of the some of the data collected by NEADA:

  • Alabama: Alabama Gas increased its allowance for doubtful accounts from $5 million to $8.3 million between 6/30/2000 and 6/30/2001 (SEC filings).
  • Delaware: Conectiv Power Delivery reported that 34,836 households were past due on more than $22.4 million. The average amount owed is $643 per customer, almost double the comparable rate owed the previous year.
  • District of Columbia: Washington Gas increased its allowance for doubtful accounts from $6.3 million to $17.3 million between 6/302000, and 6/302001 (SEC filings).
  • Iowa: The number of households disconnected increased by 26% from 27,830 to 35,043. The amount in arrears increased by 42% from $14.5 million to $20.6 million.
  • Kansas: 34,689 households have arrears of more than 90 days; 27,388 were shut-off between January 1 and July31, 2001.
  • Maine reported that 26,000 households were disconnected in July.
  • Missouri: Laclede Gas reported that 35,910 customers were delinquent and had overdue bills totaling more than $90 million. The average overdue amount is $900.
  • New York: KeySpan Energy increased its allowance for doubtful accounts $27.8 million to $70.5 million between 6/30/2000 and 6/30/2001 (SEC filings).

The Administration has proposed an appropriation of $1.4 billion for LIHEAP for FY 2002. NEADA is recommending that the total be increased to $2 billion in order to address the increased need for assistance as a result of the recent increase in low wage unemployment. The additional $600 million would allow the states to provide services to those households that are losing jobs because of the slowdown in the economy plus provide additional funding to cover crises assistance to help households at risk of shut-off. Table 3 provides a state-by-state listing of allocations under the Administration’s proposal versus the increased funding level proposed by NEADA. Table 4 provides a summary of state-by-state utility shut-off rules.

The National Energy Assistance Directors’ Association represents the state LIHEAP directors.
Suite 800
1615 M St. NW
Washington, DC 20015
202-237-5199