LIHEAP IM 2001-13 Uses of LIHEAP Funds

Special Topics

Publication Date: January 10, 2001


SUBJECT:           Uses of LIHEAP Funds

REFERENCES:    Low Income Home Energy Assistance Act, Title XXVI of the Omnibus Budget Reconciliation Act of 1981, Public Law 97-35, as amended.

PURPOSE:       To offer suggestions and solicit ideas about uses of LIHEAP funds far in excess of the usual allotments.

BACKGROUND:    Congress increased the LIHEAP appropriation for fiscal year 2001 from $1.1 billion to $1.4 billion.  Additionally,the President made two contingency fund releases of $1.56 million dollars on December 18, 2000 and $300 million on December 30, 2000 because of increases in heating oil and natural gas costs.  An additional $400 million in contingency funds released September 22, 2000 also are available for use in FY 2001.

Sharp energy price increases this year, exacerbated by unusually cold weather, are creating a serious hardship for low income households.  The Department of Energy (DOE) is projecting still higher winter prices that threaten catastrophic consequences.  For example, DOE projects that residential natural gas heating bills this winter will be on average 50% higher than last winter.  However, we are getting widespread reports of natural gas bills more than twice as high as the same month(s) last winter.  Heating oil prices seem to have stabilized at almost $1.50 per gallon, which is 20% higher than last winter average price, but bills are much higher than the price increase indicates because the winter has been colder.

CONTENT:       The infusion of more funds into the LIHEAP program than in recent years allows grantees to use greater flexibility in offering assistance to low income households, even though the demand for assistance is higher.  No special restrictions were imposed on the use of the funds.  The funds may be used for any purpose authorized under LIHEAP, including heating assistance, cooling assistance, crisis assistance,  weatherization,  administration and planning costs, Assurance 16 activities,  and carryover to FY 2002.

Some of the ways grantees are responding to the increased needs of low and moderate income households for assistance are:

  • Raising benefit amounts
  • Providing additional crisis assistance
  • Expanding definition of service population for crisis assistance
  • Reconnecting electrical or natural gas service
  • Raising eligibility levels (increasing the maximum to as much as 60% of state median income)
  • Making supplemental payments
  • Extending program duration (year-round, if needed)
  • Carrying over 10% of funds awarded in FY 2001 into FY 2002
  • Increasing weatherization activities (may request waiver to use up to 25% of available LIHEAP funds)
  • Establishing heating or cooling centers so that those without heat or air conditioning may obtain relief from the elements
  • Providing energy awareness training or other "Assurance 16" activities to reduce need for energy assistance
  • Providing furnace replacement or repair
  • Purchasing air conditioners or repairing air conditioners
  • Performing additional outreach activities
  • Investing in the leveraging incentive program
  • Asking subgrantees to stay open weekends and evenings to take additional applications
  • States agreeing to increased tribal allocations

Grantees may be unaware that they have a lot of flexibility in providing services in crisis situations.  Generally, any activity that is necessary to resolve a crisis is allowable, such as providing temporary shelter until heat can be restored by the repair or replacement of a furnace.  Repair or replacement of a furnace during a crisis situation does not need to be counted against the 15% weatherization cap.

Grantees also may be unaware of the Federal maximum allowable income eligibility level for their state.  Section 2605(b)(2)(B) of the LIHEAP statute sets the income eligibility maximum as follows:

(B) households with incomes which do not exceed the greater of -- (i) an amount equal to 150 percent of the poverty level for such State; or  (ii) an amount equal to 60 percent of the State median income....

 Sixty percent of the state median income is at least a little higher than 150% of the poverty level in every state and over 200% of the poverty level in about one-third of the states.  Attached is a chart showing the comparison of 60% of the FY 2001 state median income estimates with 150% of the 2000 HHS poverty guideline.  You may also refer to LIHEAP-IM-2000-10 and LIHEAP-IM-2000-11, both dated March 15, 2000, for additional details concerning establishing eligibility levels.

We welcome your input concerning additional uses of LIHEAP funds.  After you have implemented any additional activities to those indicated in your FY 2001 LIHEAP plan, please submit a plan amendment informing us of changes in your programs.  You do not need approval from us.  The amendment can be in the form of a letter explaining program changes.

ATTACHMENTS:   1. Comparison of 60% of FY 2001 State Median Income Estimates with 150% of the 2000 HHS Poverty Guidelines
                              2. List of current State income limits

INQUIRIES TO:  Janet M. Fox, Director
                         Division of Energy Assistance
                         Office of Community Services, ACF, HHS
                         370 L'Enfant Promenade, S.W.
                         Washington, D.C.  20447
                         Telephone:  (202) 401-9351
                          Fax:  (202) 401-5661

                                    Janet M. Fox
                                    Division of Energy Assistance
                                    Office of Community Services

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