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Michigan LIHEAP and Nonprofits Awarded $58 Million from New Fund

January 25, 2012 -- Michigan's LIHEAP and several nonprofits that had faced a loss of state funding now have a reprieve — at least for this year.

Legislation passed and signed into law December 20 provides $58 million for low-income energy assistance and creates a Vulnerable Household Warmth Fund to replace the Low Income and Energy Efficiency Fund (LIEEF) that the Michigan Court of Appeals ruled this summer no longer was authorized to receive funds. The Department of Human Services, the LIHEAP office, was awarded $35 million from the fund and $23 million went to agencies such as the Salvation Army, The Heat and Warmth Fund (THAW), and the Michigan Community Action Association (MCAA), which operate their own energy assistance programs. However, the allocations are one-time only and it is expected the legislature will take up next year's funding in the coming months.

These agencies and others around the state had been receiving money from the LIEEF since 2002. However, last July, the state Court of Appeals said the Michigan Public Service Commission (PSC), which regulates utilities and manages the LIEEF funds, no longer had authority to maintain the fund and disburse the money, which it had been doing annually. Earlier in July, the PSC had announced the distribution of $80 million to the various agencies effective October 1 — with the LIHEAP office slated to get $35 million — but was blocked from distributing it by the court decision.

As a result, many of the agencies had to turn away requests for help while the LIEEF funding was in limbo. The LIHEAP office expects to spend the $35 million through its LIHEAP crisis component, once the funds have been received.

The December legislation allowed the PSC to disburse the $23 million to eight agencies, including $9.7 million to THAW, $6.7 to the Salvation Army, $2.5 million to TrueNorth Community Services, and $2.1 million to the MCAA.

The legislation also refunds about $48 million to customers of Consumers Energy, Detroit Edison and Michigan Consolidated Gas that they had paid into the LIEEF. (More information on LIEEF is available here).

Source: PSC, Governor's office, newspapers