Energy Affordability


Home energy costs are a major expense for U.S. households. Price increases have a greater impact on older consumers, especially those with fixed incomes and households with lower incomes. Too often, older adults with low incomes must choose between cutting back on energy expenditures and reducing spending for other necessities. They may end up risking their health or comfort. 

The Low Income Home Energy Assistance Program helps households with low incomes pay for their heating and cooling costs. The U.S. Department of Health and Human Services administers the program in coordination with the states. 

The Weatherization Assistance Program helps households with low incomes make their homes more energy-efficient. It also helps these households reduce energy expenditures and improve health and safety. This program is implemented by the U.S. Department of Energy with annual grants allocated to states and territories. In turn, they provide funds to community-based nonprofits or local government agencies with expertise in delivering program services. Preference is given to households with low incomes particularly at risk of adverse health impacts due to a loss of heating or cooling, such as those over age 60. 

Many states and municipal utilities also sponsor bill-payment assistance and weatherization programs, often funded through utility rates. These programs are aimed primarily at electric and natural gas service. Their scope and scale varies widely. 

Energy assistance programs are not funded enough to assist all those who qualify. An explicit universal service policy for household energy services is needed. The need for such a policy is particularly evident during difficult economic times. When energy prices are high or volatile, the size of home energy bills compared with available household income can increase dramatically. Households can accrue past-due amounts, which place them at risk of disconnection. Public health, safety, and welfare are compromised when customers are unable to pay energy bills, and utilities respond by disconnecting service. 



Energy assistance

Policymakers should increase funding for energy assistance programs. All households should be able to afford their essential energy needs. 

Policymakers should streamline enrollment in energy assistance programs. They should automatically enroll customers in energy assistance programs when they enroll in other income-based financial assistance programs with similar qualifying criteria. 

Congress and the states should provide enough funding for the Low Income Home Energy Assistance Program (LIHEAP) and the Weatherization Assistance Program (WAP) to ensure all who qualify can receive assistance. States should supplement LIHEAP and WAP. They should also fund assistance programs for utility bill payment if necessary to ensure that all who qualify receive assistance. 

Policymakers should strengthen outreach and education programs to increase awareness of and participation in energy assistance programs. 

When energy crises prematurely exhaust funds, Congress should promptly pass supplemental emergency appropriations to replenish LIHEAP. 

Policymakers should: 

  • require an annual study to document the energy assistance needs of consumers with low incomes, 
  • require a performance-based evaluation of LIHEAP, 
  • encourage companies that supply LIHEAP households to plan and coordinate service with the responsible state agency to reduce the adverse impact of delayed federal funding for other critical state programs and services until all federal funds are available, 
  • 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, and 
  • prohibit utilities from disconnecting or refusing to reconnect utility service when weather conditions or a public health emergency threaten health or safety. 

Universal service for energy

State policymakers should establish a definition of “universal service” for the energy industry that is similar to the one in the Telecommunications Act of 1996. It should explicitly state that rates must be just, reasonable, and affordable. Energy assistance programs should be available to households with low incomes. 

Policymakers should consider expanding public power when doing so would create significant and measurable benefits for residential customers.