LIHEAP American Rescue Plan Funding: Racial and Economic Justice is Also Equity in Energy

May 4, 2021
| Dr. Lanikque Howard, Director |Office of Community Services
Energy bills

People of color face systematic disadvantages in energy costs, stable energy supply, access to renewable energy resources, energy efficiency technologies, and the economic and health benefits of the clean energy economy. A long history of redlining and discrimination in energy and housing policy have forced many people of color to live near or in hazardous environments that are plagued with pollutants and toxins, leading to high rates of intergenerational health disparities and death. Sustained and widening income and wealth gaps, caused by structural racism, have forced low-income households and households of color to remain in these communities, often relegated to older homes with poorly functioning energy infrastructure. These energy inefficient homes require more energy to heat and cool, resulting in a higher energy burden for individuals who often already struggle to make ends meet.

A recent study (PDF) Visit disclaimer page found that low-income households spend three times more of their income on energy costs than more affluent households, with 67 percent of low-income households experiencing high energy burden. And when examining energy equity by race and ethnicity, the study found that, on average, Black households’ energy burden is 43 percent higher than white households, while Hispanic households’ energy burden is 20 percent higher than white households.

This reality has likely been exacerbated by the COVID-19 pandemic, as individuals with low incomes and people of color have disproportionately experienced job loss and severe health challenges during the pandemic. Compounding the impact of the pandemic, extreme weather has become more frequent over the last 20 years, with extreme heat killing more American’s than any other weather-related disaster and February’s polar vortex demonstrating the danger of freezing indoor temperatures. The threat of extreme weather is disproportionately felt by communities of color and lower-income households, as they are more likely to live in “urban heat islands Visit disclaimer page ,” are often unable to afford adequate heating and/or air conditioning, and are more likely to use riskier methods of heating, like stoves and older heaters, risking fire and carbon monoxide poisoning.

Another survey focused on rural and low-income rural populations (PDF) Visit disclaimer page , finding that low income rural households can see as high as a 25 percent home energy burden and have a median home energy burden of nine percent—which is nearly three times the median burden of metropolitan households. The home energy burdens of rural households are particularly high in the New England, Mid Atlantic and East South Central regions. 

Additionally, rural households tend to rely more heavily on home deliverable heating fuels, such as fuel oil and kerosene, which are supplied by unregulated vendors insofar as the customer won’t get another fuel delivery unless they pay first.  Other rural households receive electricity service through cooperative owned or municipally owned utilities which are not regulated by the state and often not subject to mandatory disconnection moratoria.  And we know that some of these issues are not exclusive to rural communities; some households in suburban and even urban areas also rely on unregulated deliverable fuels, particularly in the Northeast and Midwest.

The Low Income Home Energy Assistance Program (LIHEAP)

Since 1981, the Low-Income Home Energy Assistance Program (LIHEAP) has been providing critical energy assistance to those most in need. Eligible households receive benefits for heating, cooling, crisis assistance, weatherization, budget counseling, and other vital services to help ensure safe indoor air temperature. More than 30 million American household experience high energy burden,with more than five million Visit disclaimer page households receiving assistance through LIHEAP each year. These services have been a lifeline to many individuals and families who would have faced shutoffs or would have had unmanageable arrears, not to mention the health implications of unsafe indoor temperatures, particularly for households with members who are elderly, disabled, and/or a young child.

More Funding for LIHEAP through the American Rescue Plan Act of 2021

With a belief that energy should be affordable, so that no one has to go without other basic necessities to have it, the Biden-Harris administration and Congress appropriated $4.5 billion in relief funds through LIHEAP, as part of the American Rescue Plan, to help low-income families afford home heating and cooling costs and meet unpaid electric and natural gas bills. These funds will also help families make cost-effective home energy repairs.

We are proud to announce that today’s LIHEAP funding release represents the single largest increase in funding for home energy assistance in our nation’s history. It will provide relief to millions of households and help to address the energy disparities that disproportionately impact low-income household and communities of color. We know that addressing these disparities is an important part of achieving racial justice