By Louisa Warren, NC Justice Center
Soaring crude oil prices don’t just mean an increase at the fuel pumps; they also will result in bigger utility bills for many North Carolinians this winter. Some of us can afford to cut the bigger check and avoid draping ourselves in blankets and wool socks indoors. But for the more than 200,000 elderly, disable and low-income households that depend on the Low-Income Home Energy Assistance Program (LIHEAP) to pay their heating bills, it may be a long, cold winter.
LIHEAP is a federal program administered by the states that provides heating and cooling assistance to very low-income folks. The one-time cash assistance may be small change to many North Carolinians and only covers a fraction of monthly energy bills (LIHEAP assistance averages at $82 per household), but it’s warmly received by those who are faced with the difficult choice between paying their heating bills and food, medicine, and other essential needs.
More expensive heating bills across the board hit those low-income households eligible for LIHEAP funds harder than the rest of us. Low-income families are more likely to live in energy-inefficient housing and spend, on average, a far greater percentage of their income on home energy bills (16% for these families) and in peak season, energy bills can rise up to 25% of a low-income families’ income. Other families spend, on average, just 4% of their income on home energy bills.
Congress is currently considering LIHEAP funding for 2008 and the prospects look grim. Last year, Congress decreased its funding from $3.2 billion in 2006 to $2.1 billion for 2007. That’s not even close to the amount actually needed; states are suffering shortfalls in their LIHEAP funds and can’t even serve close the number of those eligible for energy assistance. In North Carolina, only 22% of those eligible for LIHEAP assistance received it. But at least we’re faring better than the 22 other states that stopped taking applications for energy assistance this spring because funds ran out.
The House and Senate proposals at least maintain or increase slightly (by $500 million) the 2007 levels of LIHEAP funding. But the President proposes further cuts in LIHEAP funds, $320 million from last year, and is likely to veto any Congressional proposal that is higher than his. Pressure is needed on a federal level to maintain, at the very least, current levels of LIHEAP funding.
An Opportunity for State Action
As depressing as the prospects for strong LIHEAP funding are (and they’re much more than depressing for those who rely on the funds to keep themselves and their families warm; they’re downright cold), there are opportunities here in North Carolina to turn the heat on. A number of states have taken matters into their own hands and our state policymakers can and should join the crowd to pursue policy changes that help low-income consumers with their energy bills in the future. Here are some recommendations for moving forward:
- State LIHEAP Funds – North Carolina should establish a state program to supplement federal LIHEAP funds. Twenty-four states have such programs and it’s clear that the federal funds will be insufficient not only this year, but in years to come, to fully cover all those eligible for low-income energy assistance.
- Explore Discount Utility Rates for Low–Income Customers – While LIHEAP funds are incredibly important to those who receive them, they’re only a temporary fix for the larger issue of rising utility and housing costs for low-income residents, the elderly, and disabled. North Carolina should investigate other states’ strategies directed at easing utility cost burdens for low-income individuals and families. Discounting rates for low-income elderly and handicapped consumers is one tactic that’s worked well in other states.
- Increase the Size of the NC Housing Trust Fund – Utility bills are disproportionately high among low-income households largely because they are most often living in energy-inefficient housing. More investment is needed in the systemic cause of high bills—the housing itself. North Carolina should invest in repair, renovation, and production of more energy efficient homes for low-income consumers by increasing appropriations for the NC Housing Trust Fund.
These recommendations are just among a few that could help address utility costs for low-income consumers. But any improvement is better than nothing. Bottom line, nobody deserves to be left out in the cold this winter.
Louisa Warren is a Senior Policy Advocate at the N.C. Justice Center.