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AGA Study Shows Low-Income Energy Assistance is Critical

December 18 – Programs that help low-income households pay their energy bills are more critical than ever, according to a new study released today by the American Gas Association (AGA).  The study, “LIHEAP and Energy Efficiency Programs are Essential to Help At-Risk, Low-Income Consumers Cope with Increasing Energy Costs,” reports that in recent winters impoverished households have experienced substantially increased difficulty in paying their heating bills.

“Study after study has demonstrated the clear linkage between adequate heating and cooling and public health, so we were thrilled that this year Congress funded the Low Income Home Energy Assistance Program (LIHEAP) at an historic level of $5.1 billion,” said David N. Parker, president of AGA.  “Despite this impressive level of funding, however, more is needed to address the underlying and enduring problem of Americans not being able to handle the high cost of energy.”

In Fiscal Year (FY) 2007, 5.8 million households benefited from federal energy assistance programs. Eighty-four percent of those eligible, however, did not receive LIHEAP heating assistance. The doubling of LIHEAP in 2008 will increase the number of those helped, but others will still be left to do their best to stay warm this winter and cool in the summer.

“While funding will always play a critical role in helping those in need, energy efficiency programs can offer a longer term solution for income-eligible consumers seeking to mitigate high energy costs now,” Parker said. 

Since 2000, more than half a billion dollars has been spent annually by energy utilities and governments to improve the energy efficiency of low-income homes. Taking simple steps like caulking, increasing insulation, replacing weather stripping, installing energy efficient windows and doors, and purchasing high efficiency appliances can provide years of energy and dollar savings.

According to the report:

  • The number of households that are eligible for LIHEAP funds has increased 22 percent since 2001.
  •  This winter’s heating bills are expected to be near last year’s record levels, but colder than normal weather could push these increases higher.
  • The portion of the LIHEAP recipients’ annual income needed to pay home energy bills jumped from 15 percent in 1998 to 22 percent in 2007.
  • The number of households in arrears on their utility bills increased 9.5 percent in early 2008. Electric utilities experienced an increase of 7.1 percent in uncollectible expenses between 2006 and 2007, while natural gas customer uncollectible expenses increased 9.5 percent.  This confirms that customers were facing increased difficulty in paying their home energy bills even before the increases in energy costs took hold in 2008. Deteriorating economic conditions likely will exacerbate this problem.

American Gas Association Press Release