The federal Energy Information Association released its annual winter outlook on Tuesday. The prognosis: The weather will be colder, and home heating costs will be higher this year. Undoubtedly, this is unwelcome news to the estimated 35 million low-income households that qualify for federal energy assistance and have been working to manage consistently climbing home energy costs over the last several years.
Current projections suggest that the United States will be 2.4 percent colder during the winter of 2008-09 compared to last year. This may cause households to increase their use of home heating in order to stay warm. Increased need will coincide with increased home heating prices. The EIA estimates that, on average, the price of winter heating fuels will be 15 percent higher this winter than last. Families using heating oil will experience the most significant sticker shock, with estimated price increases of 17.4 percent since last winter. Consumers of this fuel also are located disproportionately in the Northeast, one of the coldest regions in the country.
Low-income households will be particularly disadvantaged. They typically spend a larger percentage of their income on home energy than higher-income households, and often find home energy to be unaffordable. Low-income households are increasingly falling behind on their home energy payments and placing themselves at risk for shutoffs. According to a survey conducted by the National Energy Assistance Director’s Association, home energy prices are causing families to cut back on basic necessities, with 70 percent reporting that they are reducing their purchases of food while 31 percent are buying less medicine.
Fortunately, Congress was recently proactive in helping to reduce the looming impact of a costly winter on low-income households. This September, lawmakers increased funding for federal programs that serve the energy needs of low-income families—the Low Income Home Energy Assistance Program, which provides income supplements for families that experience difficulty in paying for home heating or cooling, and the Weatherization Assistance Program, which provides those who qualify with home retrofits and repairs that help to conserve energy.
The Continuing Resolution for Fiscal Year 2009 more than doubled LIHEAP funding to $5.1 billion, and provided a 10 percent increase to WAP, totaling $250 million. This will dramatically expand LIHEAP by allowing it to serve 2 million additional households and raise the average grant from $355 to $550, while also supporting efforts to increase the number of weatherized homes.
This boost from Congress will definitely be helpful, but sustained and increased support will continue to be necessary, especially if home energy prices remain at elevated levels, or worse, continue to increase as summer ends and we head into winter.
Read more on low-income winter weather assistance from CAP: