RD272 - Report on the Effectiveness of Low-Income Energy Assistance Programs - October 2009


Executive Summary:
This biennial report on the effectiveness of energy assistance programs in the Commonwealth (1) evaluates the extent to which these programs meet the needs of low-income Virginians and (2) assesses the adequacy of the services provided to recipient households. The report examines 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 Departments of Social Services, Aging, and Housing and Community Development, and Virginia’s major utilities. This report concludes that there is little duplication across programs, and that the poorest and most vulnerable households in the Commonwealth benefit from energy assistance programs.

With an uncertain and declining economy, the struggle to pay home energy costs has created additional hardships for many vulnerable, low-income individuals and families in the Commonwealth. Almost 52% of all households who receive energy assistance have family incomes less than $10,000, which is well below the federal poverty limit. Even in a more stable economy, these families have little room in their budgets to absorb even modest increases in energy costs; with the current economic situation, the need for energy assistance services is more critical than in previous years.

During State Fiscal Year (SFY) 09, energy assistance programs in Virginia provided services to 220,972 households, representing an increase of 39,451 households from SFY 07. Total spending across programs during SFY 09 was $99,238,587. Due to outreach efforts and a significant increase in federal funding - leading to an increase in media attention, which included a press conference held by Governor Kaine - the number of households receiving benefits continued to increase in SFY 09. This increase in federal funding, combined with a decline in energy costs, contributed to the increase in the number of low-income households served by Virginia’s energy assistance programs by 22% over SFY 07. It also allowed Virginia’s energy assistance programs to offer a benefit that provided 47% of a recipient household’s heating needs, compared to approximately 25% in previous years. Included in this report are statistics, which highlight the difficult choices these households must make, some of which jeopardize the health, safety, and well-being of individual household members.

According to the U. S. Census Bureau and the U. S. Department of Health and Human Services, there are over 816,492 families living at or below 150% of the federal defined poverty limit in Virginia. Over 340,292 of these households have incomes at or below 130% 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. 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 that focused on benefit adequacy, program utilization, and energy insecurity of program participants and low-income Virginians are included. An analysis of benefit adequacy, based on energy costs and the extent to which benefits actually subsidize total energy costs, as well as a discussion on recipient households’ energy burden, is also 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 approximately 27% of income eligible households receive assistance. This is a concern given that even recipient households are often forced to make difficult choices, which can even further compromise their health and safety. The need for energy assistance programs in Virginia continues to exist. These programs are part of a safety net that clearly makes a significant difference in the lives of many low-income vulnerable Virginians.