RD254 - Report on the Effectiveness of Low-Income Energy Assistance Programs - October 2013

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 Rehabilitative Services, 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.

The continued downturn in the economy and the struggle to pay rising home energy costs continues to create additional hardships for many vulnerable, low-income individuals and families in the Commonwealth. Approximately 46% 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 continues to be critical.

During State Fiscal Year (SFY) 13 Virginia provided services to 268,388 households, representing a slight decrease of2,072 households from SFY 11. Total spending across programs during SFY 13 was $109,064,057. Given that the number of households served increased by nearly 50,000 from SFY 09 to SFY 11, the modest decrease in households served during SFY 13 is not surprising. Currently, Virginia's energy assistance programs provide a benefit that covers approximately 29% of recipient household's heating needs compared to SFY 11 where the benefit covered approximately 25% 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.

Typically, the Low-Income Home Energy Assistance Program (LIHEAP) operates under a continuing resolution for the first several months of the Federal Fiscal Year (FFY). Final grantee allocations are often not available until the middle to end of the second quarter making program planning and administration difficult. As a result of the continuing resolution and federal program sequestration, the funding level for the 100% federally funded EAP was not known for most of SFY 13. The U.S. Department of Health and Human Services (HHS) did not finalize grantee allocations until June 2013. Once HHS finalized the LIHEAP allocations, Virginia received an allocation almost equal to FFY 12; however, the final allocation for FFY 13 was approximately $25 million less than FFY 11.

According to the U. S. Census Bureau and HHS, there are over 781,932 families living at or below 150% of the federal defined poverty limit in Virginia. Over 400,265 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 potentially income eligible households continues to increase each year. Although data from surveys, the census, and energy assistance programs indicate that a slightly greater percentage of eligible households received assistance in SFY 13 (34%) than in SFY 11 (33%), over the last several years reduced benefit levels, increases in 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.