NGI The Weekly Gas Market Report / NGI All News Access

Energy Needy Setting Records, Say State LIHEAP Chiefs

The number of households receiving home heating/cooling assistance reached record levels for the second year in a row, according to the National Energy Assistance Directors' Association (NEADA).

The group -- made up of state directors of the Low-Income Home Energy Assistance Program (LIHEAP) -- released the results of its fiscal year (FY) 2009 state recipient survey. The number of households receiving heating assistance grew from 6.1 million (5.8 million heating and 0.3 million cooling) to 8.3 million (7.7 million heating and 0.6 million cooling).

Eleven states reported increases of more than 50%. They are California, 162%; Texas, 122%; Florida, 104%; Nevada, 80%; Arizona, 80%; Oklahoma, 76.3%; Kentucky, 72.1%; Delaware, 71%; Tennessee, 62%; Oregon, 55%; and Washington, 54%.

For FY 2010 NEADA is projecting an increase of 20% in the number of families applying for assistance based on initial application rates. The current funding level will not be sufficient to meet the need if these trends continue, the association said. "In the absence of supplemental funding, states will have few choices other than to reduce benefits, tighten eligibility requirements or close programs early."

Utility shut-offs and arrearages remained at high levels with approximately 4.3 million households shut off from power in FY 2009, up from 4.1 million in 2008. These families owed a total of $1.2 billion, up from $1 billion in FY 2008. The average amount owed increased from $253 to $279. Approximately 12.5 million households were at least 30 days behind in paying utility bills in FY 2009 as compared to 13.1 million in FY 2008. These families owed about $3.4 billion as compared to $3.6 billion in FY 2008. The average amount owed increased from $272 to $276.

While arrearage and shut-off rates remain high, the situation could have been significantly worse if Congress had not increased LIHEAP funding from $2.57 billion in FY 2008 to $5.1 billion in FY 2009 (see NGI, Oct. 20, 2008), NEADA said. Nevertheless, only 18% of the eligible households received assistance, according to the association.

And households have been dialing back their thermostats, too, according to analysts following the energy industry. In September analysts at Barclays Capital said the recession had impacted gas demand among residential and commercial consumers to a degree not seen in previous downturns. "Previous recessions have not materially shifted demand from trend growth. However, with the focus of the current recession on the housing sector and knock-on effects to consumption, perhaps another variable has been introduced in the determination of demand," the analysts said (see NGI, Sept. 14, 2009).

Some price relief could be in store for some consumers, NEADA pointed out. Average energy prices are projected by the Energy Information Administration to decline modestly by $76 from $1,038 to $962, according to NEADA. Prices in the cold weather states are expected to be significantly higher, though. For example, those using heating oil in the Northeast are expected to pay close to $2,000 this winter, almost double the national average by NEADA's estimate.

The average share of home heating costs covered by LIHEAP increased from 33.3% to 47.7%. The average grant increased from $330 to $495, largely because of the increase in the appropriation level, according to NEADA's latest report.

©Copyright 2010 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus