LIHEAP IM 2022-01 LIHEAP Coordination with ERA During Winter FY2022

Low Income Home Energy Assistance Program

Information Memorandum

IM#:  LIHEAP-IM-2022-01

DATE:  November 18, 2021

TO:  LIHEAP Grant Recipients

SUBJECT:  LIHEAP Coordination with ERA During Winter FY 2022

ATTACHMENT(S):  N/A

The purpose of this grant recipient communication is to support you in (1) preparing for the likelihood of a significant increase in need for energy assistance over the coming winter months, (2) implementing historic levels of funding provided by the American Rescue Plan Act to respond to the energy price increases in your state and communities, and (3) adopting model policy and program options in order to coordinate available federal grant resources and most effectively meet the needs of low income households. This communication, created in consultation with the U.S. Department of Treasury and U.S. Department of Health and Human Services, provides information about other resources available for energy assistance this winter and best practices for coordination.

Upcoming Winter Energy Needs: Heightened Energy Costs and Climate Prediction

Recent estimates from the U.S. Energy Information Administration (EIA) indicate that households across the United States will experience a surge in home energy costs this winter compared with the past several winters. The EIA Winter Fuels Outlook Visit disclaimer page (PDF) forecasts that many U.S. households will spend more than last winter, particularly households that heat with natural gas, propane, and heating oil. Weather is a critical factor in these estimates, with larger increases projected if the country experiences a colder-than-expected winter.

These price increases are expected to disproportionately impact households living in rural areas, tribal lands, and with members from vulnerable or disadvantaged communities such as those with varying income levels, the elderly, disabled, young children, and ethnic minorities.

Grant recipients are strongly encouraged to review available forecasts for their area, including the EIA report, as forecast expenditures can vary significantly across U.S. regions Visit disclaimer page and by fuel types this winter. (See: Winter Fuels Outlook table Visit disclaimer page (PDF).)

We also encourage grant recipients to review the U.S. Department of Commerce, National Oceanic and Atmosphere Administration’s (NOAA) Climate Prediction Center updates to prepare for what is likely to come in the months ahead and minimize the impact of the changing weather on households. The Climate Prediction Center provides a three-month outlook on weather each month as well as monthly and season outlook maps Visit disclaimer page.

Federal Emergency and Supplemental Resources: Energy Assistance for Homeowners and Renters

The American Rescue Plan Act of 2021 provided historic resources to help states and localities protect families from the impact of rising energy costs and prevent winter utility shutoffs. These resources included $4.5 billion in energy assistance to homeowners and renters through the Low-Income Home Energy Assistance Program (LIHEAP), over $21 billion in Emergency Rental Assistance (ERA), and nearly $10 billion in the Homeowner Assistance Fund (HAF). In addition to annual LIHEAP appropriations, these funds are available to help states, territories, tribes, and communities provide home energy assistance to households this winter.

Low Income Home Energy Assistance Program (LIHEAP)

• LIHEAP is a longstanding source of federal support for households that need assistance with winter heating costs administered by the U.S. Department of Health and Human Services (HHS). Through a nationwide network of governmental and locally-based nonprofit service providers, LIHEAP provides federally funded assistance in managing costs associated with home energy bills, energy crises, weatherization and energy-related minor home repairs.
• LIHEAP provides grant funding to states, the District of Columbia, territories, and approximately 150 Native American Tribes and Tribal organizations to help households meet home energy needs, including vulnerable households with very young children, individuals with disabilities, and older individuals.
• HHS grant recipients are allowed flexibility in determining payment levels and types of payments, including direct cash payments, payments to vendors on behalf of eligible households, and/or energy vouchers. 
• Grant recipients may design LIHEAP to provide a one-time annual benefit or to support recurring payments for households.
• States, federally recognized tribes and tribal organizations (including Alaska native villages), and territories may apply for direct LIHEAP awards. The states and territories then provide assistance to households in need, often in partnership with administering agencies, such as Community Action Agencies, other non-profit organizations, or branches of local government. The tribal grantees administer the program directly through their offices. The federal agency does not make awards directly to households.
• The American Rescue Plan Act of 2021 signed into law by President Biden on March 11, 2021 included $4.5 billion in funding for LIHEAP, in addition to annual appropriations. HHS also released $3.37 billion in FY 2022 LIHEAP funds on October 29, 2021. Both the regularly-appropriated and American Rescue Plan LIHEAP funds have been allocated to states, territories and tribes according to a formula based on population and energy needs. These funds provide critical resources to cushion families from increased home heating costs this winter.

LIHEAP eligibility guidelines:

• Household must have home energy needs (i.e., need for financial assistance with home energy costs) as defined by LIHEAP grant recipients.
• The income guideline is set at 150 percent of the federal poverty level or 60 percent of state median income, whichever is greater. However, a grantee may not exclude a household from eligibility solely on the basis of household income if such income is less than 110 percent of the poverty level, but the grantee may give priority to those households with the highest home energy costs or needs in relation to household income.
• Grant recipients can adopt categorical eligibility to automatically determine income eligibility for households with at least one member who also receives assistance from federal programs, such as Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), and certain means-tested veterans programs.
• Eligibility criteria determined by grant recipients may include other requirements according to the federal LIHEAP block grant regulations.

Emergency Rental Assistance Program (ERA) Visit disclaimer page

• ERA, administered by the U.S. Department of Treasury (U.S. Treasury), makes funding available to assist rental households that are unable to pay rent or utilities. This assistance was appropriated as part of two pieces of coronavirus relief legislation:
  • ERA1 provides up to $25 billion under the Consolidated Appropriations Act, 2021, which was enacted on December 27, 2020. These funds are available until September 30, 2022.
  • ERA2 provides up to $21.55 billion under the American Rescue Plan Act of 2021, which was enacted on March 11, 2021. These funds are available until September 30, 2025.
• The funds are provided directly to states, U.S. territories, local governments, and (in the case of ERA1) Indian tribes. Grantees across the United States have been working hard to stand up their Emergency Rental Assistance (ERA) programs, many providing utility along with rental assistance.

ERA eligibility guidelines Visit disclaimer page:

• Specific ERA eligibility requirements and level of assistance provided to applicants vary by program.  In order to receive ERA for rental and/or utility assistance, a household must have an obligation to pay rent.  In general terms, they must also meet the following eligibility criteria:
  • The household must be below 80 percent of area median income. Most grantees have prioritized lower income households.
  • At least one household member has experienced financial hardship such as qualified for unemployment or experienced a reduction in household income, incurred significant costs, or experienced other financial hardship due to, directly or indirectly, (ERA1 funds) or during (ERA2 funds) the COVID-19 outbreak.
  • At least one member of the household is experiencing or at risk of homelessness or housing instability.  This may include, among other things, a past due utility bill.
• Treasury guidance encourages grantees to accept self-attestation, fact-based proxy, and categorical eligibility to meet eligibility criteria.
• Eligible households can receive a maximum of 18 months of ERA1 and ERA2 assistance combined.

Homeowner Assistance Fund (HAF) Visit disclaimer page

The purpose of the Homeowner Assistance Fund (HAF) is to prevent mortgage delinquencies and defaults, foreclosures, loss of utilities or home energy services, and displacement of homeowners experiencing financial hardship after January 21, 2020. Funds from the HAF may be used for assistance with mortgage payments, homeowner’s insurance, utility payments, and other specified purposes. The law prioritizes funds for homeowners who have experienced the greatest hardships, leveraging local and national income indicators to maximize the impact.

These new programs are under development, though many HAF grantees have implemented pilot programs. As these programs launch, LIHEAP, ERA, and HAF grantees may also consider coordinated utility strategies to support homeowners, similar to those listed in these recommendations.

HAF eligibility guidelines Visit disclaimer page (PDF):

Homeowners are eligible to receive amounts allocated to a HAF participant under the HAF if they experienced a financial hardship after January 21, 2020 (including a hardship that began before January 21, 2020, but continued after that date) and have incomes equal to or less than 150 percent of the area median income or 100 percent of the median income for the United States, whichever is greater. A HAF participant may provide HAF funds only to a homeowner with respect to qualified expenses related to the dwelling that is such homeowner’s primary residence.

Leveraging LIHEAP and ERA to Comprehensively Meet Household Needs

Eligible households can receive both LIHEAP and ERA benefits (i.e., receiving benefits from one program does not preclude a household from receiving benefits from the other program). Braiding resources from both programs is a promising strategy to ensure that eligible households receive the maximum benefit amount available to them. Notwithstanding resource constraints, grant recipients should consider coordinating efforts to increase benefit assistance across programs. Furthermore, the federal LIHEAP statute and associated regulations call for outreach and coordination with similar and related programs (see 42 U.S.C. 8624).

As a best practice, we recommend LIHEAP grant recipients refer households that need rental assistance to ERA. We also recommend LIHEAP grant recipients refer the following types of households to ERA for additional utility assistance:

• Renter households who apply to and/or are served by LIHEAP that also need rental assistance;
• Renter households served by LIHEAP that did not receive an adequate benefit to meet their full utility needs;
• Renter households that are income-or otherwise ineligible for LIHEAP but are -eligible for ERA; or
• Renter households not served by LIHEAP due to limited program resources or other constraints.

Depending on the mix of local ERA and LIHEAP policies, households that might benefit from ERA to LIHEAP referrals include:

• Households that are facing a home energy crisis where there is a need to expedite intervention to restore or prevent the loss of services (the federal LIHEAP statute requires that eligible households applying for crisis assistance receive an intervention to resolve the crisis within 48 hours or within 18 hours for life-threatening situations);
• Renter households that apply to a local ERA program that does not offer utilities assistance;
• Renter households that have home energy needs not typically covered by ERA grantee’s program;
• Homeowners that need energy utility assistance; or
• Households that have maxed-out or may max out the months of assistance offered by the ERA grantee.

Potential Areas of Coordination Between LIHEAP and ERA

While certain income eligibility limits and allowable uses are defined at the federal level, both the LIHEAP and ERA program efforts have been designed to allow significant adaptation based on the specific needs and conditions within states and communities and may be administered differently.  For example, in both program areas, grantees have significant discretion in minimum and maximum benefit levels and in designing systems for outreach, application and administration of household assistance. Accordingly, coordination will look different across communities.

To best utilize the American Rescue Plan’s substantial additional LIHEAP and ERA resources that are available to address potential increases in home energy needs this winter, HHS and U.S. Treasury recommend that all grant recipients engage in coordinated efforts to support the following objectives:

• Household awareness of potential supports through both LIHEAP and ERA;
• Assistance levels that are sufficient to meet the utility needs of households within their state or community jurisdictions; and
• Intake and eligibility determination systems that are as transparent, accessible, efficient, and well-coordinated as possible at state and community levels.

Strategic and concerted investments in the following promising practices can help support these goals:

1. Regular Communications Between LIHEAP and ERA Program Leadership — In many cases, these closely-related areas of assistance are available within the same jurisdictions, but may be administered through different departments or governmental entities. Establishing regular and thoughtful program leadership communication can ensure awareness of the policies, processes, and systems of their respective program efforts.

2. Regular Stakeholder Communications — Establishing regular stakeholder communication collaboratively convened by both the LIHEAP and ERA programs with energy providers, local administering agencies, and regulatory authorities can assist in more effective coordination of the programs. In particular, LIHEAP grant recipients should share best practices learned about program coordination, operational improvements, and outreach that could be helpful to ERA programs as they administer utility assistance. 

3. Collaborative Review of Local Program Offerings — In preparation for potential increases in winter utility needs, both LIHEAP and ERA grantees may seek to better serve their local community through reviewing locally-imposed eligibility requirements, the types of assistance offered, and assistance benefit levels. For instance, LIHEAP and/or ERA grantees may wish to consider increased income eligibility and benefit levels to reach additional households or cover a greater proportion of households’ energy needs. 

4. Policy Coordination — As noted above, ERA and LIHEAP grantees have significant discretion in targeting and distributing resources based on priority areas of need within the communities they serve. Grantees should consider opportunities to coordinate or sequence benefits across both LIHEAP and ERA programs to identify areas of shared or differing priorities for each program, coordination of timeframes for assistance, or alignment of benefits.

5. Coordinated Outreach — Local households may benefit from simple and coordinated messaging about utility and related housing stability resources through trusted channels (e.g. creating shared educational resources to message utility and related housing stability benefits, coordinated public information campaigns, etc.).

6. Categorical Eligibility — Categorical eligibility can support faster income determination, reduce paperwork burden, and expedite the overall eligibility process. For example, using eligibility for LIHEAP as categorical eligibility for ERA can simplify intake for households seeking assistance from both programs.
    
7. Data Sharing, Linked Application, or Referral Systems — A single “front door” or single intake process across benefit programs can simplify application processes for households. When feasible, establishing protocols for data sharing, linked applications, and/or referral systems with a warm handoff process can help ensure the best match between the household and the assistance program. This type of system can have a long-lasting effect on future federal benefit coordination efforts.

Coordination with Energy Providers to Increase Efficiency and Reach

Energy providers across the country stand to benefit from the unprecedented federal assistance available this winter on behalf of their customers. The Administration is calling on these energy providers to help deploy these resources quickly and seamlessly. As part of these efforts, we encourage administering agencies across LIHEAP and ERA to work together to coordinate with energy vendors (including delivered fuel vendors) and utilities companies. In particular, LIHEAP and ERA grant recipients should explore:

• Encouraging energy providers to provide educational materials through their regular mailings to potential applicants.
• Building relationships with energy providers and establishing information sharing protocols that allow transparency into the application process across stakeholders.
• Encouraging energy providers to automate processes to proactively identify households in need. For instance, vendors can coordinate with administering agencies to identify households that may be eligible and automate the process of providing potential client data to the relevant intake agency where the eligibility/benefit determination is made.
• Entering into vendor agreements that lead to reconnection, pausing the shut-off of service, and consumer protections for households upon application for utility assistance. For providers of delivered fuels, vendor agreements should include automatic deliveries to households receiving benefits as quickly as possible.
• Collaborating with grantees of other energy assistance programs to build out parallel operations that can help make it easier for utility companies to cooperate with the programs while increasing the incentives for the utility companies to engage in consumer-friendly practices.
• Establishing or maintaining agreements that ensure electronic payment processes. For example, vendors can coordinate with administering agencies to credit payments automatically to customer accounts upon approval for benefits.

In the coming months, HHS and U.S. Treasury plan to provide additional information about emerging promising practices, training and technical assistance to help support grant recipients’ efforts to address the comprehensive utility needs of eligible households. Thank you for your ongoing work to help address the utility and rental support needs in the communities you serve. 

Please contact the federal LIHEAP liaisons for your region with any questions.

Thank you for your attention to these matters. OCS looks forward to continuing to provide high-quality services to OCS grantees.