Less LIHEAP funding, higher utility debt means more power shut offs, says watchdog group

The combination of high energy costs, high temperatures, and reduced federal support for the Low Income Home Energy Assistance Program (LIHEAP) is setting millions of families back financially, according to the latest quarterly analysis by the National Energy Assistance Directors Association (NEADA).

“Paying for energy is not like paying for other basic needs, where you can choose to buy cheaper groceries or cheaper clothing,” said NEADA Executive Director Mark Wolfe on Wednesday. “Whether you’re rich or poor, you’re forced to buy the same gas or electricity. You have no control over the price and little control over the bill.

“That means that low-income families feel the volatility of the global energy market most acutely, and it feels like living under the threat of getting your power turned off or living indebted to a faceless utility,” Wolfe said. “It’s a real indignity that low- and middle-income families are dealt. It doesn’t have to be this way.”

According to NEADA’s Third Quarter (Q3) Energy Hardship Report, utility debt has increased by 8.4 percent to almost $17.4 billion since December 2023. The debt is spread across 17.4 million electric and 11 million natural gas households, according to NEADA.

But due to LIHEAP budget cuts, the number of households served has been reduced by close to one million households, the group said, noting that roughly 80 percent of LIHEAP funds are used for heating, leaving only 20 percent of funds to cover the growing and urgent need for home cooling assistance.

Additionally, the Q3 report projects that utility shut offs will increase by 300,000 households to 3.5 million by the end of the year, and while families are protected from shut offs during cold months, 33 states do not have shut off protections for the summer months, leaving families vulnerable to extreme heat.

“Shutting off power is a ruthless and effective debt collection strategy, forcing roughly more than a third of families to prioritize utility payments over other basic necessities,” the group said.

NEADA is calling for utilities to suspend shut offs for the summer months to protect low-income families during extreme summer temperatures.

Congress also must increase funding for LIHEAP from $4.1 billion to $6.1 billion, plus an additional $1 billion for emergency assistance, which would help to provide supplemental LIHEAP assistance for some of the nation’s poorest families, recommends NEADA.

At the same time, the Federal Emergency Management Agency should include extreme heat as a trigger to help families cope with high summer cooling bills, the group said.

“In the short-term, we need to support the millions of families across the country who are struggling to keep up with monthly utility payments,” said Wolfe. “Long-term, it is critical that federal and state officials fund weatherization and retrofits for low-income households, so that low-income families are more insulated, both from climate change’s extreme temperatures and from the global energy market’s wild price fluctuations.”

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