According to an HHS Report, low-income households in the Northeast pay approximately 22% of their annual income for home energy, while non low-income households pay about 5%. The federal Low Income Home Energy Assistance Act (LIHEAA) provides aid to help states address the needs of low income energy consumers who are often hit the worst by rising energy costs when prices jump or weather is severe. The "block grant" style assistance program created by the law, known as LIHEAP, is designed primarily to address the current home energy needs of low income households.
Low income households tend to live in the oldest and least energy efficient housing stock. Often a weatherization project can results in 20% energy saving, and can make a huge difference for low-income households. Low-income households, however, typically lack the cash or credit to invest in the cost-effective energy efficiency measures that result in lower future bills.
The federal Department of Energy (DOE) Weatherization Assistance Program (WAP) provides funds to states to weatherize homes, reduce household energy usage and greenhouse gas emissions, lower household energy costs, ease energy burdens. It allows households to keep more of their pay for purposes other than energy, stimulates jobs, and provides job training. WAP has been described as this country's longest running, and perhaps most successful energy efficiency program. See Bush Proposes Elimination of Low Income Home Weatherization Program, PULP Network, February 11, 2008.
Federal and State Policy Encourages Supplementing WAP with HEAP Funds
In recognition that states may want to do more than pay unaffordable energy bills, and more than the federal WAP funds allow, Congress encouraged states to use up to 25% of their LIHEAP block grant for weatherization measures, to supplement the federal weatherization program.
Resolving the tension between using a limited sum of federal funds to resolve home energy crises with bill payments, and using funds to reduced future bills and future emergencies, section 97.5 of the New York Social Services Law was amended to require that
No less that fifteen percent of the [LIHEAP] funds available to New York state . . . shall be used for low-cost residential weatherization or other energy-related home repair for low-income households . . . .
No less than ten percent of the [LIHEAP] funds shall be allocated to the divisino of housing and community renewal for its weatherization assistance program and shall be expended as provided in the annual New York state weatherization plan.In 2010, New York expects to receive $475 million in federal funding for HEAP, so about $47.5 million of that is targeted for the DHCR weatherization program under existing law.
The WAP funds go mainly to community based weatherization programs, and they provide jobs and job training to many lower income workers who do the work on the homes of eligible households. Some of the HEAP weatherization funding is allocated to the State Office for the Aging, and some to counties for emergency furnace repair and replacement.
The Governor's Proposal to Cut HEAP Weatherization Funds
Governor Paterson, in his Executive Budget submitted to the Legislature is proposing to eliminate all the HEAP funding for weatherization in state fiscal year 2010 - 2011, which begins April 1, 2010.
In recognition of the large amount of ARRA funds received by New York State for weatherization, the SFY 2010-11 appropriation language would authorize a temporary waiver of the requirement to set-aside 15 percent of all federal HEAP funds for weatherization along with a waiver of the requirement that no less than 10 percent of all of federal HEAP funds be sub-allocated to the Division of Housing and Community Renewal.As a result, the value and effects of the new federal ARRA stimulus funding will be reduced by cuts in the HEAP weatherization funding, if the Governor's proposal is adopted in the state budget process.
There has been a chronic tendency in New York's HEAP program to use the federal HEAP funds in a way that simply supplants expenditures in pre-existing state/local programs designed to resolve energy emergencies. To the extent that happens, federal funds intended by Congress to benefit the poor really reduce the state's need to spend funds from general tax revenues. Last year, the State used an infusion of supplemental HEAP funds, intended to offset high energy prices, to do just that:
some of the supplemental HEAP funds are being used to supplant pre-existing state and local obligations to assist the poor that would be borne by the general public in the absence of HEAP. Funds intended by Congress to be targeted to relieve the high home energy burdens of the poor this winter are, in effect, being used to reduce the budgets of state and local governments, and thus to benefit the general body of taxpayers.Needy Households Must Stop Paying Energy Providers to Obtain Supplemental HEAP Benefits, PULP Network, June 5, 2009.
HEAP Plan Revision and Legislative Action Required to Implement Governor's Proposal
To implement the Governor's proposal, a new or revised HEAP plan taking out the 15% set aside for weatherization would need to be submitted to HHS for approval, after public participation and comment. The Governor has simultaneously proposed to abolish the HEAP Advisory Council, and this may limit exposure of the proposal to public scrutiny, comment and criticism from Advisory Council members who are familiar with the program.
Legislative action would be needed to change the 15% weatherization set aside requirement now in the Social Services Law. It remains to be seen if the Legislature will agree with the Governor to make the change in Section 97 -- which may have been needed and adopted precisely to prevent Governors from doing what Governor Paterson now proposes.