Last week Sen. Ed Markey (D-Mass.) and Rep. Jamaal Bowman (D-N.Y.) introduced the Heating and Cooling Relief Act, with the specific purpose of ending energy poverty in the United States for low and moderate income families. The intent of the bill is simple: lower income families would no longer have to struggle to pay unaffordable home energy bills. The bill would also establish a “just transition” grant program to ensure lower income households do not get left behind during the clean energy transition by helping them move away from fossil fuels through home retrofits, decarbonization, and renewable energy.
Energy is simply unaffordable for lower income families.
Last month the Census Bureau reported that for families with incomes of less than $35,000 a year, about 51 percent said that they reduced or went without basic household necessities, such as medicine or food, in order to pay an energy bill. There is nothing surprising about this data. Low income families struggle to pay for basic needs, including energy. They cannot afford to have their power shut off and will go without food and medicine in order to pay the bill.
The Low Income Home Energy Assistance Program (LIHEAP) is the primary federal effort designed to help families pay their home heating and cooling bills, but the program has been underfunded for years and reaches fewer than one out of six eligible households. As a result of limited funding, we have watched families fall further and further behind on their home energy bills during the pandemic. And even with supplemental funding for LIHEAP, outstanding energy arrearages have remained stubbornly high, at about $22 billion.
The Markey/Bowman bill would increase funding for LIHEAP, with a goal of reaching all eligible households by setting the authorized funding level at $40 billion a year, up from a current authorization level of $5.1 billion and an appropriation level of about $3.8 billion. The additional funding would increase the eligibility ceiling from the greater of 150 percent of the federal poverty level or 60 percent of state median income to 250 percent of the federal poverty level or 80 percent of state median income, thereby increasing coverage to low and moderate income families, not just to the poorest families in the country.
The bill would set a cap on the percentage a family would need to spend on home energy. Low income families currently spend an average of 8.6 percent of their income on home energy. The bill would ensure that no family spent more than 3 percent of their income on home energy, which is the same percentage spent by other higher income families. It would also provide states with the flexibility to use program funds to weatherize up to one million units per year.
LIHEAP was passed 40 years ago when the nation was more concerned about helping families pay for high winter heating costs rather than rising temperatures due to climate change. The Markey/Bowman bill would directly address the concern raised by rising temperatures by providing sufficient funds for cooling as well as provide an additional $1 billion in additional assistance to families during periods of extreme heat. Why is that important? Because extreme heat waves are occurring more often. The EPA found that the average heat wave season across 50 cities is now 47 days longer than it was in the 1960s. In addition, EPA reported that extreme heat can be an underlying cause for heat stroke, heart attacks and stroke, especially among the elderly.
The bill would also provide families that are behind on their energy bills with additional protections by requiring utilities that accept program funds to agree to waive late fees and interest charges. Furthermore, such utilities would agree not to shut off a family from power for one year after receiving program funds. The bill would also simplify the application process by allowing families to self-certify for eligibility.
The Heating and Cooling Relief Act deserves the full support of Congress. Low income families need to be protected from rising temperatures and they shouldn’t have to choose between paying for home energy, on the one hand and on the other hand, food, medicine and other essentials of daily living.
Mark Wolfe is an energy economist and serves as the executive director of the National Energy Assistance Directors’ Association (NEADA), representing the state directors of the Low Income Home Energy Assistance Program. He specializes in energy and housing affordability and related finance issues.