HD6 - Report on the Effectiveness of Low Income Energy Assistance Programs


Executive Summary:
This report on the effectiveness of low income energy assistance programs in the Commonwealth assesses the adequacy of energy assistance efforts targeted to low income households and discusses whether a duplication of services exists among the myriad energy assistance programs serving low income households.

The confluence of utility deregulation, fluctuating residential energy costs, and the current recession in the economy create an uncertain environment for energy affordability in the Commonwealth. According to the 2000 Census, 254,551 households in Virginia lived below the federally defined poverty threshold and many more struggle to meet their monthly bills due to the high cost of housing in many communities. The federal Department of Health and Human Services estimates that 650,000 Virginians are eligible to receive benefits and services through the Low Income Energy Assistance Program. During the past year, federal energy assistance programs in the Commonwealth served approximately 125,000 households and spent slightly more than $33 million.

A variety of energy assistance programs exist in Virginia to help low income households meet their heating and cooling needs. Sources of support for low income individuals include the Virginia Energy Assistance Program funded by the federal Low Income Home Energy Assistance Program (LIHEAP); the Weatherization Assistance Program funded by the United States Department of Energy; and utility-based programs including EnergyShare, Fan Care, and the Neighbor-to-Neighbor Program.

Although less than half of all Virginia households with incomes at or below the federally defined poverty threshold received assistance from the major energy assistance programs, the full extent of unmet need cannot be fully known by looking at the program utilization statistics. The ratio of households served to households eligible does not capture the adequacy of benefits delivered or the true number of households in need. For example, among those participating in the Virginia Energy Assistance Program, 75 percent spend in excess of 50 percent of their income on home energy. Given the finite resources and competing demands for housing and food, it is likely that this high percentage of a household's budget spent on energy costs places a low income family at risk for being able to meet other basic needs.

In order to better answer questions about unmet energy needs, a random sample survey of low income Virginians that explores the need for energy assistance, level of program utilization, and program effectiveness is currently being conducted by the Virginia Polytechnic Institute and State University through a contract with the Virginia Department of Social Services. The results from this survey will offer a new, rich source of data to further elucidate the issues discussed in this report.

Another important component of assessing the effectiveness of energy assistance programs in the Commonwealth is the degree to which program duplication exists. In examining the major state and utility-based programs, it is clear that these programs are not duplicative. Each program offers a discrete and complementary energy assistance benefit to low income Virginians. Additionally, a host of smaller, community and faith-based energy assistance programs operate throughout the state. These programs typically serve individuals from their local community, offering subsidies to help defray energy bills.

The degree to which these community-based programs duplicate the efforts of large state and utility sponsored programs is not known, and the extent to which multiple services are provided to the same household cannot be determined due to confidentiality and privacy restrictions on the sharing of client/customer level data. While some of these confidentiality barriers may be overcome among state agencies and not-for-profit providers, it is not clear that utility companies will have the ability to share customer information. Through a partnership with the statewide Information and Referral Network and deliberations with state agencies and utility companies, a strategy for maximizing the sharing of data is being pursued. The best source of information on program utilization by household will come from the aforementioned survey of low income Virginians that will ask respondents to identify all the sources of assistance received.

Clearly, there is a demand for energy assistance programs in the Commonwealth. The existing programs offer needed services and benefits to low income Virginians. While these major programs are not duplicative, the extent to which they meet the overall energy assistance needs is not fully known. Existing data from programs and the Census indicates that the majority of eligible households in Virginia do not receive any assistance.