RD196 - Annual Report on the Effectiveness of Low-Income Energy Assistance Programs


Executive Summary:
The annual report on the effectiveness of energy assistance programs in the Commonwealth evaluates the extent to which these programs meet the needs of low-income Virginians and assesses the adequacy of the services provided to recipient households. The report also addresses whether a duplication of services exists among programs designed to serve these households. Energy assistance services including heating and cooling subsidies, crisis intervention and weatherization are available through a number of programs administered by the Virginia Departments of Social Services, Aging, and Housing and Community Development, and Virginia's major utilities. The report concludes that there is little duplication across programs and that the benefits are distributed to the poorest and most vulnerable households in the Commonwealth, and that additional resources are necessary to accommodate the dramatic increases in energy costs and the rise in poverty within Virginia.

In the past year, drastic increases in home energy costs have created additional hardships for many low-income, vulnerable citizens in the Commonwealth. Almost 60 percent of all households served by the energy assistance programs have family incomes less than $10,000, which is well below the federal poverty line. These poor families have little room in their budgets to absorb even modest increases in energy costs, making the need for energy assistance services even more critical than previous years.

During state fiscal year (SFY) 2006, energy assistance programs in Virginia provided services to 180,758 households, representing an increase of 20,934 households from SFY 2005.Total spending across programs during SFY 2006 was $57,997,297 compared to $42,617,248 the previous year. Due to outreach efforts and the media attention generated by rising energy costs, requests for benefits resulted in a 13 percent increase in households served and a 36 percent increase in spending within the energy assistance programs. Even with the additional funding, data show these subsidies offer a benefit that provides less than 25 percent of a recipient household's energy needs. With relatively static program funding and continuing increases in home energy costs, energy assistance subsidies are likely to provide less assistance each year, leaving many vulnerable Virginians continuing to struggle with their home energy needs and other basic necessities. Included in this report are statistics which highlight the difficult choices these households are forced to make, some of which jeopardize the health, safety and well being of individual household members. Without additional funds, many of these programs may need to further restrict eligibility and consequently the number enrolled in order to ensure that the benefit maintains value in the energy marketplace.

According to the latest current population survey and the U. S. Department of Health and Human Services, there are over 795,000 families living at or below 150 percent of the federal defined poverty guidelines in Virginia. Over 370,000 of these households have incomes at or below 130 percent of poverty, meaning they are income eligible for most if not all of Virginia's energy assistance programs. In an effort to increase program awareness and participation, various outreach and enrollment strategies are pursued each year; however, limited funding for energy assistance programs in Virginia makes attempts to increase program participation a tenuous initiative at best.

An overview of major energy assistance programs offered by state agencies and utilities and analysis of households served, expenditures, and case denial data are included in the overview of programs. Additionally, the results of surveys of both energy assistance program participants and low-income Virginians that focused on benefit adequacy, program utilization and energy insecurity are included. Analysis of benefit adequacy based on increases in home energy costs and decreases in recipient household purchasing power and the extent to which benefits actually subsidize total energy costs as well as a discussion on recipient household's energy burden is included.

The number of recipient households continues to increase each year, as do the number of potentially income eligible households. Data from surveys, the census and energy assistance programs indicate that less than half of eligible households are receiving assistance. This is alarming given that even recipient households are forced to make difficult choices which can even further compromise health and safety. The need for energy assistance programs in Virginia continues to exist. These programs are part of a safety net that, while not perfect, clearly makes a significant difference in the lives of many low-income vulnerable Virginians.