RD40 - Report on the Effectiveness of Low-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. Energy assistance services, including heating and cooling subsidies, crisis intervention and weatherization assistance, are available through a number of programs administered by the Departments of Social Services, Aging and Housing and Community Development, as well as Virginia’s major utilities.

The confluence of utility deregulation, fluctuating residential energy costs and the current recession economy create an uncertain environment for energy affordability in the Commonwealth. According to the 2000 Census, the income of 254,551 households in Virginia is below the federally defined poverty threshold and many more struggle to meet their monthly bills due to the high cost of housing in many Virginia communities. During state fiscal year (SFY) 2003, energy assistance programs in the Commonwealth jointly served approximately 144,330 households, up from 125,000 households during SFY 2002.

While about 57 percent 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 determined by looking at the programs 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. Among the households 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 of not being able to meet other basic needs.

According to a random sample survey of 2200 low-income Virginians conducted by Virginia Tech on behalf of VDSS, more than one-fifth (21 percent) of households stated that in the past year they sometimes had less heating than they felt they needed because they could not afford it. The majority (80 percent) stated that they need help paying their heating bills, and 15 percent said they need help in buying, fixing, or installing heating equipment. More than one fifth (22 percent) reported having received assistance from at least one source in the last year to help pay for their heating costs. These sources included VDSS (11 percent), their church (3 percent) or their family/friends (5 percent).

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 appears that these programs are not duplicative. Each program offers a discrete and complimentary 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.

In addition to helping meet immediate energy assistance needs, the Commonwealth is aggressively pursuing efforts to improve energy efficiency, targeting residences of low-income households. This past year, VDSS was awarded $1 million under the Office of Community Services' Residential Energy Assistance Challenge (REACh) Option Program for federal fiscal year (FFY) 2002. Virginia is one of only six states to receive a grant. Funding from this grant will support services that provide consumer education to low-income families to increase energy efficiency. Data collected will measure the effectiveness of weatherization.

Clearly, there is a demand for energy assistance programs in the Commonwealth. The existing programs offer needed services and benefits to low-income Virginians. Existing data from programs, the Census, and the random sample survey of low-income Virginians indicates that the majority of eligible households in Virginia do not receive any assistance.