President’s FY 2016 Budget Request for LIHEAP

The President’s Budget for LIHEAP was released on February 2, 2015 (see page 485 – 486 of the Appendix to the Budget).

A state-by-state table showing obligations by state is available here.

(Source: Detailed Technical Appendix) Note: the cut in funding in state grants reflects the reallocation of $200 million for the competitive grant program.

Summary

  • The Budget proposes to reduce the block grant allocation by $200 million from $3.39 billion to $3.19 billion and then would use those funds to create a new $200 million competitiveness grant program. See text below.
  • Of special concern, the Budget would require that states set-aside at least 10% of their allocation for Weatherization purposes (no set-aside is required now) and allow grantees to request a waiver of up to 40% of their allocation (up from the current waiver level of 25%).
  • The Budget would allow ACF to set-aside up to $50 million to support REACH grant activities, up from the current maximum of $12.5 million.
  • The Budget would also include a contingency fund of $1.1 billion.

Additional details and back up documents

HHS Budget documents, pages (123-124) (text follows)

Low Income Home Energy Assistance Program

The Budget includes $3.4 billion in discretionary funding for LIHEAP, the same as FY 2015. A new mechanism will provide additional mandatory funds triggered by significant increases in the number of eligible low-income households, the price of fuel, or extreme cold at the beginning of winter.

To better address both the short and long-term needs of low-income households, the budget proposes increased emphasis on activities that increase energy efficiency, such as weatherization. LIHEAP households often live in housing that is less energy-efficient than the homes of higher income families and are more likely to rely on more expensive fuels such as oil and propane. In some cases, energy efficiency investments, including switching to less expensive fuels, can significantly reduce families’ energy bills over the long-term.

Despite the potential benefits of improving energy efficiency in low income households, only a few states spend more than 15 percent of their LIHEAP formula funds on energy efficiency measures. To promote greater investment in these longer term strategies, the Budget requires states to dedicate at least 10 percent of their LIHEAP allocations to weatherization and other energy efficiency activities to give states the flexibility to spend up to 40 percent of their allocation on energy efficiency if they choose to do so.

The Budget also includes $200 million to test innovative strategies to serve LIHEAP households, including reducing energy use, supporting fuel switching, reducing energy bills, and smoothing energy costs to avoid large spikes during some parts of the year.

OMB Appendix (text follows)

Weatherization text:
Provided further, That notwithstanding section 2605(k) of the Low-Income Home Energy Assistance Act of 1981, a state receiving an allotment for fiscal year 2016 shall use not less than 10 percent of such allotment for residential weatherization or other energy-related home repair activities, and may use up to 40 percent of such allotment for such purpose without regard to the waiver process specified in such section

Competitive grants text:

For competitive grants to states that partner with other entities as determined appropriate by the Secretary, to further the purposes of section 2602 of the Low Income Home Energy Assistance Act of 1981 and to foster innovation in the provision of energy assistance to low-income households and for conducting a national evaluation of such grants, $200,000,000 , to remain available until expended.

Contingency Fund text:

The Budget also proposes to establish a contingency fund providing additional mandatory funds to respond to increases in the number of low-income households, spikes in the price of natural gas, electricity, or oil, and extreme cold at the beginning of winter.