LIHEAP Energy Burden Evaluation Study (July 2005)
THIS CONTAINS INFORMATION ISSUED BY THE U.S. ADMINISTRATION FOR
CHILDREN AND FAMILIES IN LIHEAP INFORMATION MEMORANDUM TRANSMITTAL
NO. LIHEAP-IM-2006-3, DATED 11/16/05
TO: LOW INCOME HOME ENERGY ASSISTANCE PROGRAM (LIHEAP)
STATE GRANTEES
SUBJECT: LIHEAP Energy Burden Evaluation Study (July 2005)
RELATED
REFERENCES: Section 2610 of the Low Income Home Energy
Assistance Act of 1981, Title XXVI of the Omnibus
Budget Reconciliation Act of 1981, Public Law 97-35,
as amended; Government Perfand Results Act
of 1993.
BACKGROUND: In 1994, Congress amended the purpose of the LIHEAP
statute to clarify that the program is "to assist
low-income households, particularly those with the
lowest income, that pay a high proportion of
household income for home energy, primarily in
meeting their immediate home energy needs." (The
Human Services Amendments of 1994, Public Law
103-252, Sec. 2602(a) as amended.) Furthermore,
Congressional Committees indicated in 1994 that
LIHEAP grantees needed to reassess their LIHEAP
benefit structures to ensure that they are
"targeting" those low income households that have
the highest energy costs or needs. In this regard,
both the House and Senate Committees on Education
and Labor urged that LIHEAP grantees use actual
energy bills in determining energy burdens and
designing their benefit structures (H. Report
103-483, Part I dated April 26, 1994, and S. Report
103-251, April 19, 1994).
The Administration for Children and Families (ACF)
has responsibility under the Government Performance
and Results Act of 1993 (GPRA) for developing the
annual LIHEAP program perfplan and an
annual report on LIHEAP program performance. ACF
has developed a set of GPRA perfindicators
(i.e., targeting indexes) that provide for the
collection of quantitative measures regarding the
following aspects of LIHEAP targeting performance:
. The recipiency targeting index quantifies
recipiency targeting performance. The
"recipiency targeting index" for a specific
group of households is computed by comparing the
percent of LIHEAP households that are members of
the target group to the percent of all income
eligible households that are members of the target
group.
. The benefit targeting index quantifies benefit
targeting performance. The index is computed by
comparing the mean LIHEAP benefit for a target
group of recipients to the mean LIHEAP benefit
for all recipient households.
. The burden reduction targeting index quantifies
burden reduction targeting performance. The index
is computed by comparing the percent reduction in
the median individual energy burden for a target
group of recipients to the percent reduction in
the median individual energy burden for all
recipients.
Beginning in FY 1981, the Department has funded the
development, collection, and analysis of low-income
home energy data through the U.S. Energy Information
Administration's Residential Energy Consumption
Survey (RECS). This is a national household survey
that provides information on residential energy
every four years. The last RECS was completed in
2001. The RECS is being conducted again in 2005.
The RECS core sample is designed to cover all
residential housing units that are primary
residences in the United States. RECS is
considered to be the most complete and accurate
Federal source of home energy data at the national
and Census regional level. RECS includes
information on energy consumption and
expenditures, household demographics, housing
characteristics, weatherization/conservation
practices, home appliances, and type of heating
and cooling equipment.
The 2001 RECS was the first time that ACF funded a
LIHEAP Supplemental Sample as part of the RECS.
Prior to the 2001 RECS LIHEAP Supplemental Sample,
there were no data at the national level
sufficient to develop perfmeasurement
statistics for recipiency targeting for high
burden households. ACF has also funded a LIHEAP
Supplemental Sample in the 2005 RECS. Selected
State LIHEAP agencies have provided recipient
households and data for the LIHEAP Supplemental
Samples.
CONTENT: As part of its GPRA plan, ACF funded an evaluation
study to assess to what extent the LIHEAP program
is serving the lowest income households that have
the highest energy burdens. The main features of
the study include:
. using data from the 2001 RECS to examine the
distribution of income and energy burden for
low-income households and identify those that
have the lowest incomes and highest energy
burdens (i.e., high burden households);
. defining households as high burden if they have
an energy burden that exceeded an empirical
threshold level;
. developing baseline perfstatistics for
high burden household targeting and developing
procedures for updating these perf
statistics over time;
. using data from the 2001 RECS LIHEAP Supplemental
Sample to measure the effectiveness of the FY
2001 LIHEAP program in serving high burden
households; and
. quantifying program effectiveness using targeting
perfmeasures.
The study's report was completed in July 2005. A
copy of the report's Executive Summary is attached.
The full report can be downloaded from our LIHEAP
web site
High Energy Burden Data
The study presents the following important findings
that relate to the relationship between income and
the study's characterization of households as
having high home energy burden:
. Low income households (i.e., households with
income at or below the LIHEAP Federal maximum
income standard) represent over 92 percent of
all households that have a high home energy burden.
Over 36 percent of low income households have a
high home energy burden. Only about 1 percent of
non low-income households are categorized as having
a high home energy burden.
. Households with incomes less than $20,000 per year
represent 95 percent of all households that have a
high home energy burden. Almost two-thirds of
households with incomes below $10,000 are
characterized as having a high home energy burden.
The study also presents the following important
findings with respect to the geographic and
demographic distribution of high home energy
burden:
. Elderly low income households are more likely to
have a high home energy burden than other types of
low-income households.
. Almost 40 percent of low income households that
have a high energy burden live in the South Census
Region.
. Almost 40 percent of low income households that
have a high home energy burden are one-person
households.
. Renters and apartment dwellers are less likely to
have high home energy burden than other types of
households.
LIHEAP Targeting PerfData
ACF's national LIHEAP targeting goals focus on
increasing the percentage of LIHEAP recipients that
are elderly, have a young child, and have a high
home energy burden. The following statistics from
this study show that the program has already made
substantial progress toward those three goals for
LIHEAP households that receive heating assistance:
. About 60 percent of LIHEAP recipients have a high
home energy burden.
. About 90 percent of LIHEAP recipients have an
elderly member, have a young child, or have a high
home energy burden.
. About 40 percent of LIHEAP recipients have a high
home energy burden and also are in one of the
other target groups.
Observations
The study makes the following observations:
. Improving the targeting perfof the LIHEAP
program with respect to any of the targeted
households would require increasing the percentage
of eligible households that fulfill more than one
of the goals.
. The LIHEAP program targets LIHEAP benefits to the
households with the highest home energy needs as
defined by the LIHEAP statute (i.e., vulnerable
households and high burden households). However,
the program could further increase the rate at
which it targets households that both are
vulnerable and have a high home energy burden.
In addition, the study finds that, on average,
the program does not give higher benefits to the
households that are in the greatest need.
. LIHEAP grantees can improve the perfof the
LIHEAP program by placing a greater emphasis
on serving and providing higher benefits to high
burden households. The most accurate way to
increase LIHEAP program targeting is to measure
home energy burden for all LIHEAP applicant
households, to give high burden households
priority in receipt of energy assistance grants,
and to furnish high burden households with higher
program benefits. In the absence of procedures to
measure home energy burden, grantees can serve
higher burden households by prioritizing benefits
for low income households and furnishing higher
benefits to lower income households, since income
is the best proxy for energy burden. However, any
grantee with the ability to directly measure energy
bills for low-income households should account for
energy costs in the computation of program benefits.
. The national perfgoals set by the LIHEAP
program are complimentary and that all three
targeting indexes need to be tracked simultaneously.
Until this study was conducted, the program was
able to only furnish information on the serving
elderly and young child households. By focusing on
those goals, without information on the goal of
serving households with high home energy burden,
the program might move in the direction of serving
fewer households with high home energy burden.
. Using the study's definition of high home energy
burden, over 12 million low income households were
categorized as having high home energy burden and
over 7 million low income households were
categorized as both vulnerable and having high
home energy burden in FY 2001. In 2001, about 90
percent of the 4.4 million recipients were either
vulnerable or high burden household, and about 40
percent were both vulnerable and high burden
households. While these statistics demonstrate that
the program is serving targeted households (i.e.,
households that are either vulnerable or high burden),
the program might be able to further increase
targeting to LIHEAP income eligible households with
the highest home energy needs (i.e., those that are
both vulnerable and high burden).
ATTACHMENT: Executive Summary, LIHEAP Energy Burden
Evaluation Study, July 2005
INQUIRIES TO: Leon Litow, Program Analyst
Division of Energy Assistance
Office of Community Services, ACF
370 L'Enfant Promenade, S.W.
Washington, D.C. 20447
(202) 401-5304
E-mail: llitow@acf.hhs.gov
__________________/s_________
Nick St. Angelo
Director
Division of Energy Assistance
Office of Community Services
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