Energy and Utility

NCLC has a solid history of protecting and representing the interests of low-income consumers in the area of utility services. For over 30 years NCLC has used its legal and policy expertise to create and advocate for energy and utility policies that promote affordable prices and the efficient use of natural resources.

The Energy Crisis

It may come as no surprise to any of us opening a winter energy bill that fuel prices are painfully high. As illustrated in the chart below, home heating fuel bills have increased steadily and dramatically in recent years. According to Energy Information Administration (EIA) data, residential natural gas expenditures this winter in the Midwest rose 70% from the average for 1997 to1999.1 Home heating oil expenditures in the Northeast were 83% higher than the average heating oil expenditures for that region for 1997 to 1999. Propane expenditures in the Midwest were 73% higher than the average propane expenditures for that region for 1997 to 1999. As the chart below illustrates, and as residential consumers are experiencing, home energy prices have reached a new, higher baseline, one which experts agree will not decline in the foreseeable future.

Consumers are now having a hard time affording their energy bills even when weather conditions are not extreme. EIA’s April 2005 residential heating prices data show that even though consumption of residential natural gas in the Midwest declined by 2 percent from last year and 8 percent from the year prior, expenditures increased by 7 percent and 17 percent respectively. The same pattern holds true for home heating oil consumption in the Northeast which declined 2 percent from last year and 8 percent from the year prior with expenditures increasing by 18 percent and 13 percent respectively. Propane consumption in the Midwest also declined 2 percent from last year and 8 percent from the year prior, with residential expenditures increasing by 17 percent and 20 percent, respectively. These steadily rising prices have strained the limited budgets of the low-income households and increased the demand for LIHEAP assistance.

The ripple effect from prior winters’unaffordable energy bills are still being felt. Arrearages and disconnections are up around the country. Unfortunately, even in the most prosperous times for this nation, low-income households face energy burdens (the proportion of available income devoted to home energy costs) several times higher than that that of middle-income households. When costs for other vital services such as phones, water and sewage are added to the costs of other basic necessities such as housing, food and medicine, families constantly face dire choices in order to make it from one month to the next. The deregulation of utility services resulted in the additional danger of higher prices with fewer protections.

TOPICS OF INTEREST

ENERGY PUBLICATIONS

FY 2005 - 3rd LIHEAP Emergency Release:  On March 1, HHS announced the 3rd release of $50 million in LIHEAP emergency contingency funds to all states to help low income households cope with high heating bills.  The allocation of the emergency funds to the states is based on the same formula used in the the 1st and 2nd releases.   There now remains $47.6 million in unspent LIHEAP emergency contingency funds.   [spreadsheet]

FY 2005 - 2nd LIHEAP Emergency Release :  On January 31, 2005 HHS announced the 2nd release of $100 million in LIHEAP emergency contingency funds to all states to help low income households cope with high heating bills.  The allocation of the emergency funds to the states is based on the same formula used in the 1st release. [spreadsheet]

FY 2005 - 1st LIHEAP Emergency Release :  On December 23, 2004 HHS announced the 1st release of $100 million in LIHEAP emergency contingency funds to all states to help low income households cope with high heating bills.  The allocation of the emergency funds to the states is based on the following formula:  50 percent of the funds is based on each state's share of the regular block grant allocation formula and 50 percent of the funds is based on the regular block grant allocation formula weighted by the relative percentage of low income households in each state that uses heating oil and propane for heat. [spreadsheet]

FY 2005 LIHEAP Funds: On December 8th, the President signed the FY 2005 Omnibus spending bill (Public Law No. 108-447) which contains funding for LIHEAP. On November 20, 2004 both houses of Congress had passed the spending bill. The FY 2005 Omnibus provides $1.9 billion for the regular LIHEAP program and $300 million in emergency contingency funds. However, there is an across-the-board cut for programs in the omnibus of around .08 percent. As a result, the final LIHEAP figures are $1,884.8 billion for regular block grant funds and $297.6 million for LIHEAP emergency contingency funds. Note: The release of the emergency contingency rests with the Administration's discretion. [2005 allocation spreadsheet]

On October 8, 2004 HHS announced the availability of first quarter LIHEAP funds for FY 2005 under the current continuing resolution (CR). Each state received an allocation based on the state's full first quarter request for FY 2005 (note: tribes and insular areas will receive their annual allocations at the FY 2004 level). The CR allocations were based on the FY 2004 LIHEAP block grant funding level of $1.789 billion." Spreadsheet and link to HHS press release.

NCLC's Role: Fighting on Behalf of Consumers for Thirty Years
NCLC's Energy and Utilities staff regularly testify in regulatory proceeding, provide technical assistance for other low-income advocates and agencies, design and evaluate low-income energy affordability and efficiency programs, analyze energy and utility policies that effect low-income consumers, write manuals and other education materials for advocates and their clients, conduct trainings, facilitates the dissemination of information to a national network of low-income advocates.

NCLC has hosted 13 Low-Income Energy Affordability Conferences, bringing together consumer advocates, utility regulators, customer service representatives and program administrators. In September 2002, we were a sponsor of the conference Electricity - Too Important to Leave to the Market: A Conference on Restoring Just and Reasonable Electricity Service.

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1 EIA, Short-Term Energy Outlook, April 2005, Fig. 10 and EIA, Short-Term Energy Outlook, March 2004, Fig.4.