Study Finds States are Running Out of Energy Assistance Funds

Contact: Mark Wolfe
Phone: 202-237-5199 / Cell Phone: 202-320-9046
Date: June 11, 2001

Millions of Americans are facing the risk of having their energy cut off this summer as a result of rising energy bills. The primary program providing assistance to help families pay their energy bills and address energy emergencies – including the threat of shut-off due to non-payment or partial payment of energy bills – is running out of money.

A study just completed by the National Energy Assistance Directors’ Association (NEADA) found that Of the states that have responded to date to the NEADA summer survey, 19 states and the District of Columbia reported that they were either out of funds or had very low balances. States reporting they were out of funds: District of Columbia, Iowa, Maine, Minnesota, Montana, New Hampshire, New Mexico, Rhode Island, and Wisconsin. States reporting very low balances: Alabama, Colorado, Georgia, Illinois, Kansas, Kentucky, Maryland, Massachusetts, Nebraska, New York, and Utah.

The remaining 24 states have at least the same amount of funds available to help low-income families as they last year at this time: Alaska, Arizona, Arkansas, California, Connecticut, Delaware, Florida, Hawaii, Idaho, Indiana, Michigan, New Jersey, Nevada, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Vermont, Virginia, Washington, West Virginia and Wyoming.

The NEADA survey follows two earlier surveys this year. The first survey reported that the number of new families applying for program assistance had increased by more than 1 million, bringing the total of recipient families up to more than 5 million. The second survey of 19 states and the District of Columbia reported that arrearages and threats of shut-offs increased to 4.3 million households. A copy of the study is attached. In addition, attached is a copy of the table listing program recipients by state, as well as a summary of the shut-off and arrearage data released last month by NEADA.

According to Mark Wolfe, Executive Director of NEADA, without additional federal assistance this summer, states will have to begin denying program assistance to low-income families. Many of these households have young children and elderly members – those at greatest risk of health related ailments from not having adequate cooling. While we welcome the Administration’s proposal to provide an additional $150 million in assistance for low-income households, with the rapid increase in households applying for assistance, we just don’t believe that the amount will be adequate to meet the need and avoid serious health-related consequences for the nation’s families who cannot cope with high energy prices.

NEADA represents state directors of the federally funded Low Income Home Energy Assistance Program (LIHEAP), a program that this winter supplied low-income families with almost $2.25 billion of funds to help pay their energy bills.

Survey findings include the following:

  • Alabama indicates an additional $5-6 million is needed for summer cooling, especially if the state experiences the “severe” summer that has been predicted.
  • Colorado may have to discontinue its summer crisis intervention program and the summer fan distribution program for lack of funding.
  • Georgia needs an additional $1 million for summer cooling and to provide assistance to the 200,000 households that owe approximately $80 million in natural gas bills alone.
  • The Illinois program estimates it needs $15-20 million for a statewide summer program and $15 million for arrearage/shut-off avoidance assistance.
  • Kansas had to revert to prorated benefits for winter heating assistance to compensate for the higher number of applicants and fuel costs.
  • Kentucky needs $7 million to operate a cooling program since many areas of the state have already been experiencing temperatures in the high 80’s with high humidity.
  • Minnesota needs for an additional $13 million to cover the applications received this year and provide the same level of services as last year.
  • New Hampshire has responded to the increased demand for assistance this winter season (18% increase in the number of households enrolled) by suspending other fuel assistance programs.
  • Rhode Island’s program will not be able to stay open for most of the summer to help out with shut-offs, unless it receives an additional $4 million.
  • Wisconsin has depleted all LIHEAP funds available, in contrast to last year when there was over $4 million left to use for summer fills and arrearages.