RD433 - Report on the Effectiveness of Low-Income Energy Assistance – October 2019

Executive Summary:

This biennial report on the effectiveness of low-income 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, 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 struggle to pay home energy costs continues to create additional hardships for many vulnerable, low-income individuals and families in the Commonwealth. Approximately 45% of all households who receive energy assistance have family incomes less than $10,000, which is well below the federal poverty limit. These families have little room in their budgets to absorb even modest increases in energy costs; given limited family resources, the need for energy assistance services continues to be critical.

During State Fiscal Year (SFY) 19 Virginia provided services to 212,677 households, representing an increase of 682 households from SFY 17. Total spending across programs during SFY 19 was $91,873,125 representing an increase of$8,817,514 from SFY 17. Currently, Virginia's energy assistance programs provide a benefit that covers approximately 46% of recipient household's heating needs compared to SFY 17 where the benefit covered 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.

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. Virginia received an allocation of just over $91 million for FFY 18 and 19.

According to the U.S. Census Bureau and the U.S. Department of Health and Human Services (HHS), there are over 922,930 families living at or below 150% of the federal defined poverty limit in Virginia. Over 449,747 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 as well as 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. Data from surveys, the census, and energy assistance programs indicate that 23% of eligible households received assistance in SFY 19 (note: this percentage has not changed since SFY 17). Energy benefits that only cover 46% of home heating needs coupled with energy costs that remain high relative to household income 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.