Federal utility assistance programs help qualified individuals afford telephone service through the Lifeline program and adequate energy with the Low Income Home Energy Assistance Program (LIHEAP) and Weatherization Assistance Program (WAP).
The federal Lifeline program—the federal Lifeline program was created in 1984 to provide households with low incomes discounts on their monthly phone bills. It has made telephone service more affordable for tens of millions of people with low incomes throughout the US. The program, which is funded through the universal service fund, is consistent with one of the explicit universal service objectives of the Telecommunications Act of 1996: affordable rates for consumers with low incomes in all regions of the US.
In March 2016, the FCC announced reforms to the Lifeline program that include the following:
- Eligible services are voice-only wireline and wireless, voice and data bundles, and fixed and mobile broadband Internet service.
- Support for voice-only Lifeline is phased out after five years, but voice service will be available as part of a voice and data bundled Lifeline option.
- The initial minimum standard for wireless voice starts at 500 minutes per month and will go up annually in phases until it reaches 1000 minutes per month. The initial minimum standard for fixed broadband is 10 Mbps for download and 1 Mbps for upload with an initial usage allowance standard of 150 GB per month, which will increase over time.
- Lifeline eligibility determination will move from the carriers to a national verifier.
- Qualifying programs include the Supplemental Nutrition Assistance Program, Medicaid, Supplemental Security Income, federal public housing assistance, veterans pensions and survivors’ pension benefit, and the same tribal programs that are currently used. In addition, households may still qualify for Lifeline by demonstrating income at or below 135 percent of the federal poverty guidelines.
- The program’s annual budget is set at $2.25 billion.
Low income energy assistance programs—federal energy assistance programs help many low-income older adults meet their residential fuel costs and improve their home’s energy efficiency. The two major programs are LIHEAP, which is administered by the Department of Health and Human Services (HHS), and WAP, which is sponsored by the Department of Energy and implemented by state and local agencies. Some states also supplement federal assistance through state-based funding. More common are utility-specific rate or bill discounts, which are funded by other ratepayers.
Federal rules specify that a household is eligible for LIHEAP if its income is less than the greater of 150 percent of the federal poverty level or 60 percent of the state median income. States, however, may establish more restrictive standards, but not lower than 110 percent of the federal poverty level. About 89 percent of the households served by LIHEAP have at least one vulnerable member; 40 percent have at least one member age 60 or older.
LIHEAP funding allocations—LIHEAP funding goes to all 50 states, the District of Columbia, and other grantees (such as US territories, commonwealths, and Native American tribal organizations). Each state or grantee receives a percentage of the annual LIHEAP appropriation. A state’s percentage may vary, however, depending on the total amount of appropriations funding Congress has approved for that fiscal year.
When the “regular appropriation” for a fiscal year does not exceed $1.975 billion, HHS applies a particular formula to determine each individual state’s allotment. That formula is based on the total home heating expenditures of the state’s low-income households from 1976 to 1980. A different formula applies when the regular appropriation for LIHEAP exceeds $1.975 billion. In that case, each state’s share is determined by estimates of current home heating and cooling costs for the state’s low-income households. Because the first formula omits any consideration of cooling costs, that method of distributing LIHEAP funds directs more money to northern states. Meanwhile, states in the South and West that have high cooling burdens receive less assistance.
In recent years funding for LIHEAP has decreased significantly, from a high of $5.1 billion in FY 2009 to $3.39 billion in FY 2016. The 2016 allocation was estimated to serve 6.8 million households.
Weatherization Assistance Program—WAP has helped more than 6.4 million low-income households make their homes more energy-efficient, reduce energy expenditures, and improve health and safety. A 2015 study found that a weatherized single-family home saved on average $283 in energy costs each year. Each state establishes its own eligibility rules for WAP based on national guidelines. Preference is given to people over 60, people with disabilities, and in some cases households with children.
WAP is funded primarily through annual congressional appropriations managed and allocated by the Department of Energy. The WAP program distributes grants to states and territories, which in turn provide funds to community-based nonprofits or local government agencies with expertise in delivering program services.
Low-income water assistance programs—home energy and telephone service are crucial to all Americans’ health and personal welfare. Recognizing this, the federal government has created rate-assistance programs to help consumers with low incomes afford these essential services. Water services are just as important, yet the federal government has not established a rate-assistance program for water. Several states and municipalities have adopted rate-assistance programs for customers with low incomes.
Assistance Programs: Policy
Affordability of utilities
Financing for telecommunications assistance
The Federal Communications Commission (FCC) and state public-utility commissions should ensure that financing for telecommunications assistance programs is preserved and enhanced in a competitively neutral manner as telecommunications markets are restructured.
The FCC and state public utility commissions should ensure that Lifeline customers are able to apply their Lifeline discount to any offering from an eligible telecommunications carrier that includes voice service.
Eligibility for telecommunications assistance programs
State policymakers should require eligible telecommunications carriers to engage in vigorous outreach and education programs to increase participation in telecommunications assistance programs.
- substantially increase funding for the Low Income Home Energy Assistance Program (LIHEAP) and the Weatherization Assistance Program and should ensure that these programs strengthen their outreach efforts by conducting effective education and publicity campaigns;
- pass supplemental emergency appropriations to replenish LIHEAP funds when energy crises prematurely exhaust them;
- require an annual study to document the energy assistance needs of consumers with low incomes; and
- require a performance-based evaluation of LIHEAP.
Coordination among companies supplying LIHEAP households
Policymakers should encourage companies that supply LIHEAP households to plan and coordinate service with the responsible state agency. Coordination should reduce the adverse impact of delayed federal funding for other critical state programs and services until all federal funds are available.
- appropriate state funds to supplement federal LIHEAP allocations;
- create and fully fund statewide electric and natural gas bill-payment assistance programs for residential customers with low incomes;
- automatically enroll electric and natural gas customers in state low-income energy assistance programs when they apply for other income-based financial assistance programs;
- prohibit utilities from disconnecting or refusing to reconnect electric or natural gas service to households with low incomes when weather conditions threaten health or safety; and
- strengthen outreach and education programs to increase participation in LIHEAP and other energy assistance programs in the state.
Water utility assistance
Policymakers should consider the development of effective water assistance programs.
Congress should fund research and analysis to determine the scope and depth of residential water-affordability problems and the best options to assist households with low incomes that face increasing water rates.