RD249 - Report on the Effectiveness of Low-Income Energy Assistance Programs - October 2011


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 a continued downturn in the economy, the struggle to pay home energy costs has created additional hardships for many vulnerable, low-income individuals and families in the Commonwealth. Approximately 40% 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 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) 11 Virginia provided services to 270,460 households, representing an increase of 49,488 households from SFY 09. Total spending across programs during SFY 11 was $83,844,507. Outreach efforts and a continued declining economy, contributed to the increase in the number of low-income households served by Virginia's energy assistance programs by 22% over SFY 09. The increase in recipient households coupled with a decrease in the SFY 11 Fuel Assistance allocation only allowed Virginia's energy assistance programs to provide a benefit that met approximately 25% of recipient household's heating needs compared to SFY 09 where the benefit met approximately 47% of heating needs. 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.

Because the Low-Income Home Energy Assistance Program (LIHEAP) operated under a continuing resolution until April 2011, the funding level for the 100% federally funded EAP remained uncertain for most of SFY 11. The U.S. Department of Health and Human Services (HHS) did not finalize grantee allocations until May 2011. The EAP allocations for the SFY 11 Fuel and Crisis Assistance Programs were based on funding available under the continuing resolution at the time. As a result, the allocation for the SFY 11 Fuel Assistance Program was significantly less than SFY 09 and 10. This resulted in a substantially decreased average fuel benefit of $269 in SFY 11 compared to $518 and $439 in SFY 09 and 10 respectively. Once HHS finalized the LIHEAP allocations, Virginia received an allocation almost equal to Federal Fiscal Year (FFY) 10. This late release in funding while decreasing the Fuel Assistance benefit, allowed Virginia to operate a robust Cooling Assistance Program during the summer of 2011. As a result, SFY 12 benefit levels for Cooling Assistance will be substantially greater than previous years.

According to the U. S. Census Bureau and HHS, 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. Although data from surveys, the census, and energy assistance programs indicate that a greater percentage of eligible households received assistance in SFY 11 (33%) than in SFY 09 (27%), reduced benefit levels for heating assistance, energy costs and the current economy resulted in hardships and difficult choices for families which can 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.