The History of LIHEAP [see this URL for a chronology of LIHEAP]

The Low Income Home Energy Assistance Program was authorized by Title XXVI of the Omnibus Budget Reconciliation Act of 1981 and began in 1982. Its purpose 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." LIHEAP was designed to provide help to low-income households with a minimum of government bureaucracy and a maximum of involvement by civic institutions. LIHEAP evolved from earlier programs created in response to the energy crisis of the 1970s. The most notable of these was the Emergency Energy Assistance Program, established when Congress provided funds in 1977 to turn a pilot program into one that was national in scope.

Federal dollars for LIHEAP are allocated by the U.S. Department of Health and Human Services to the states as a block grant and are disbursed under programs designed by the individual states. Program funds are distributed by a formula, which is weighted towards relative cold-weather conditions and households living in poverty.

The program is administered at the state and county levels by governmental agencies and implemented primarily at the local level by community action programs (CAPS), local welfare agencies and area agencies on aging. LIHEAP funds are supplemented to a limited extent by additional state appropriations, programs from energy suppliers and utilities, church donations and local charitable "fuel funds" administered by the Salvation Army, Catholic Charities and other organizations.

The Need for LIHEAP

LIHEAP remains dependent on federal appropriations process for its funding, which means that the amount granted to the program varies from year to year. Federal funds for LIHEAP have fluctuated from a high of $2.1 billion in FY 1985 to a low of $1.0 billion in FY 1997. In FY 2006, Congress appropriated $2 billion for LIHEAP, however President Bush approved an additional $1 billion ($500 million in regular program funds and $500 million as emergency contingency funds), bringing the total funding up to $3 billion. In June of 2006, the House Appropriations Committee voted to cut LIHEAP funding by one third, returning LIHEAP's funding to the $2 billion level. It remains to be seen whether the Senate will accept the proposed cuts.

Source: LIHEAP Report to Congress for FY 2000, Table 2

Even with the relatively high funding level for FY 2006, LIHEAP program directors face an ongoing crisis. According to the US Department of Health and Human Services, between 1981 and FY 2000, the number of federally eligible households rose over 49 percent; however, federal fuel assistance funds rose only 22 percent. As a consequence, the percentage of federally eligible households receiving LIHEAP assistance has declined sharply, from 36 percent in 1981 to 20 percent in FY 2000.[1]

The funds allotted to states cannot meet growing needs for heating and cooling assistance. The total number of recipient households has declined from 7.1 million in 1981 to 3.9 million in 2000, as states have had to restrict eligibility to the neediest of the needy. Despite the additional $1 billion appropriated for FY 2006, only 15 percent of households that were eligible received LIHEAP assistance.

Source: LIHEAP Home Energy Notebook for FY 2001, page 26, figure 3-20

The residential energy burden (including heating, cooling and all other energy uses in the home) for all U.S. households in 2001 was $1,537 per household, or 7.0 percent of income. For LIHEAP recipient households, the respective figures are $1,301 and 17.2 percent, nearly two and one half times the average burden. At this level, many poor and elderly, including households with children, are forced to choose between heating their homes and purchasing food and/or important medications.[3]

Increasingly, the energy markets at the wholesale level have been deregulated and behave now like other commodity markets where price volatility exists. But price volatility adversely affects the poor, because they enter the market at the highest times of demand. Low-income consumers generally do not have the disposable income to purchase fuels off-season at lower costs. Thus, while energy prices have remained fairly stable on an annualized basis, seasonal price spikes have had terrible effects on the poor.

The Success of LIHEAP

LIHEAP has nurtured a very positive, effective partnership between the federal government, state governments and the private sector. By leveraging private dollars to supplement federal dollars, LIHEAP has proven that successful relationships can exist between the government, businesses, gas and electric utilities and community-based social service organizations.

While states, local governments and the private sector have demonstrated their capacity to develop programs to address some energy assistance needs, collectively these programs cannot meet the demand for LIHEAP assistance. The need for energy assistance continues.

Learn how you can help to support LIHEAP

Learn about LIHEAP's program components

Are you in need of heating and cooling assistance? Start here.