Utility bills assistance program isn’t reaching enough low-income Virginians, state report says

This article was reprinted with permission from Virginia Mercury

A recent state report shows that federal help for people struggling to pay utility bills is decreasing, reaching only a fraction of the Virginians who need it and covering only a fraction of the costs they face.

Dana Wiggins, director of a Consumer Advocacy at the Virginia Poverty Law Center, said the report from the Virginia Department of Social Services underscores how vulnerable households have to balance paying for utility bills with groceries amid inflation and prescription costs.

State law requires the Virginia Department of Social Services to issue the report every two years on the effectiveness of the state’s use of the federal Low Income Home Energy Assistance Program, or LIHEAP, a federal program that sends money to all 50 states. In Virginia, those dollars go toward the Virginia Department of Social Services’ Energy Assistance Program. From there, funds are distributed to help pay heating and cooling bills, offset emergency disconnection or equipment failure costs.

The report found that federal LIHEAP block grant funding to Virginia has decreased since 2009 from $127 million to $89 million in 2023. While there were supplemental funding sources through the pandemic related to the American Rescue Plan Act, Infrastructure Investment and Jobs Act and Continuing Appropriations Act, those were one time funds.

To receive the benefit, households must be below certain income level thresholds and have certain energy needs, such as lacking heat in the winter or housing a person who is over the age of 60, has a disability or is under the age of 6 in the summer.

With those requirements, “only 23% of potentially eligible households receive assistance and while benefits have increased over the last several years, assistance still only covers 29% of costs,” according to the report.

VDSS officials weren’t immediately available to provide comment on the report.

The report also notes a survey DSS conducted in 2023 that found 65% of low-income households had to choose between paying for groceries, medicine and their utility bills, and 75% of respondents said they weren’t as warm in winter and 77% said they weren’t as cool in summer as they needed because they couldn’t afford it.

“I have yet to talk to anybody who just doesn’t want to pay their bill,” said Wiggins, of the Virginia Poverty Law Center. “Most people just want to be able to have a world they can afford, not think about it and move on with all of the other things in life.”

One way to expand assistance for LIHEAP is through a bill Del. Phil Hernandez, D-Norfolk, introduced and Republican Gov. Glenn Youngkin signed this year to expand the application window for fuel assistance for a period beyond the current one-month period in October ahead of the winter season.

In recent years, the state has had to return several million dollars that haven’t been used through the state’s energy assistance program, said the bill’s proponents, which included several environmental and ratepayer advocacy groups, as well as Virginia’s utilities and VDSS.

With the new law taking effect this year, more eligible households can receive the benefits, and more information on how pervasive the struggle is can be gathered.

“The need is maybe even greater than what we understand,” Wiggins said.

Energy costs a burden

The report also discussed the number of Virginians whose energy costs are a burden. The federal government defines severe energy burden as energy costs exceeding 11% of income. The annual income of approximately 45% of households who receive heating bill assistance was less than $10,000 the report notes.

“Even though the average benefit subsidy does not fully meet the needs of low-income households, studies show energy assistance programs significantly reduce the energy burden of recipient households,” the report states.

A separate January 2023 report from Virginia Commonwealth University found that about 579,000 houses experienced energy burden.

The Nature Conservancy commissioned the report to determine the impact of Virginia participating in the Regional Greenhouse Gas Initiative, a multi-state carbon market that has returned millions to the state for flood resiliency and energy efficiency programs. Virginia’s participation in RGGI is caught up in state budget disputes as well as legal proceedings.

Wiggins said that in addition to the LIHEAP benefits, participation in RGGI can further reduce energy burden by providing funding for energy efficiency improvements, which could lead to less occurrences of more costly disconnections. Part of the LIHEAP funding goes toward making energy efficiency upgrades, but professionals in the industry have said that pales in comparison to what RGGI has provided to the state.

“Since the first RGGI auction that Virginia participated in back in 2021, RGGI has provided nearly $400M for low-income energy-efficient housing,” said Chelsea Harnish, executive director of the Energy Efficiency Council, a group that supports RGGI involvement and backed a bill this session that would increase transparency in energy efficiency program determinations. “There are no alternative funding options available at either the state or federal level for these programs in terms of program design nor funding levels.”

When legislators raised objections to Youngkin wanting to leave RGGI, Macaulay Porter, a Youngkin spokeswoman, pointed to $14 million in LIHEAP funding, as well as other sources, as a replacement for the RGGI money for energy efficiency.

“It is a tax,” Youngkin said on Thursday, referring to the fee that utilities can recover from customers for participing in RGGI . “I have supported substantial increases in our resiliency funding. I also believe that we can march towards….increasingly reliable, affordable, and clean power in a far more transparent way, as opposed to suggesting something that RGGI is that it’s not.”

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