Sequester Cuts 300,000 Poor Families from Low Income Home Energy Assistance Program

For Immediate Release
Date: November 14, 2013
Contact: Mark Wolfe/NEADA
Cell: 202-320-9046

Sequester Cuts 300,000 Poor Families from Energy Assistance
Grim Outlook for the Winter Heating Season: Higher Prices, Declining Purchasing Power

The National Energy Assistance Directors’ Association (NEADA) representing the state directors of the Low Income Home Energy Assistance Program (LIHEAP) reported that FY 2013 sequester cut about 300,000 from receiving heating or cooling assistance. The sequester reduced total funding during this period by about $155 million from $3.47 billion to $3.32 billion.

According to Larry Dawson, chair of NEADA, “the impact of these cuts were especially severe, in light of the close to $1.8 billion that has been cut from the program since FY 2010, reducing total funding from $5.1 billion to $3.32 billion. States are not able to make up the cuts in the program’s purchasing power let along the additional cuts that come with a second sequester”

Key Facts from the NEADA Survey:

  • As a direct result of the sequester, the total number of households receiving home heating assistance declined by 194,000 from 6.9 million in FY 2013 to about 6.7 million in FY 2012 and for those receiving cooling assistance declined by about 104,000 from 1.1 million to about 996,000.
  • Cuts enacted since FY 2010, have reduced the program’s purchasing power from 52.5% of the cost of home heating to 44% during last year’s winter heating season and the number of households served from about 8.1 million to 6.7 million.
  • The sequester cuts were on top of severe cuts in the program that had been enacted since FY 2010. Since FY 2010, total funding was reduced from $5.1 billion to $3.47 billion in FY 2012 and then further reduced by the sequester to $3.3 billion in FY 2013. The impact has been significant. Total number of households receiving assistance has declined by 17% from about 8.1 million in FY 2010 to 6.7 million in FY 2013.
  • The outlook for the coming winter is especially grim since the Energy Information Administration has projected that the average cost of home heating will increase from $922 to $977. For those using natural gas, home heating costs are expected to increase by 13% and the overall average increase is projected to be about 6%. As such, the purchasing power of the program will be further reduced from 44% to 41.5% even before the impact of a potential second sequester.

Table 1 provides national summary data on the purchasing power of LIHEAP between FY 2010 and projected for FY 2014 as well as households served and appropriations data.

Table 2 provides state-by-state heating and cooling data for households receiving energy assistance in FY 2013 and FY 2012 (see attached).