FACT SHEET: Biden Administration Deploys American Rescue Plan Funds to Protect Americans from Rising Home Heating Costs; Calls on Utility Companies to Prevent Shut Offs This Winter
Unprecedented Funding and Partnerships with State, Local and Tribal Governments to Protect Vulnerable Homeowners and Renters
Today, the Biden-Harris Administration called on states, localities and tribes to plan early and coordinate across programs to effectively use historic American Rescue Plan resources to address home energy costs this winter. The White House also called on utility companies that receive public dollars to prevent devastating utility shut-offs this winter and help expedite the delivery of unprecedented federal aid.
The American Rescue Plan provides critical resources that states, localities and tribes can use to address home energy costs:
- More than doubling available Low Income Home Energy Assistance Program (LIHEAP) funding: The recent average annual funding for LIHEAP is $3-4 billion, which typically serves 5 million households. The American Rescue Plan provided an additional $4.5 billion available until September 2022.
- Delivering Emergency Rental Assistance—unavailable in previous winters—to help cover utility bills: First established last December—and provided an additional $21.5 billion in funding by the American Rescue Plan—Emergency Rental Assistance (ERA) programs provide help with past-due utility bills or ongoing assistance with energy costs to help distressed renters avoid shut-offs and keep current on expenses. Even as most programs were just beginning to ramp up between January and June 2021, grantees made over 200,000 payments to support households with utility arrears and over 140,000 prospective utility payments.
- Providing state, local and tribal governments additional resources to help energy-burdened middle-class families, including through the $350 billion State & Local Fiscal Recovery Fund: States and localities have the flexibility to use Fiscal Recovery Funds to help deliver energy relief to families, including for middle-class households that may not be eligible for programs directed to the lowest income consumers.
Today the White House called on Utilities and Energy Providers to Commit to Proactively Use Their Resources to Help
The Administration welcomed initial commitments from seven major utility companies including DTE Energy, Eversource, Green Mountain Power, National Grid, NorthWestern Energy, Portland General Electric and Vermont Gas,as well as the delivered fuel trade association NEFI,that all agreed to the following:
- Identify Eligible Recipients: Many utility companies already offer programs to help families in need. Utilities should proactively identify those who may be eligible for public benefits, such as LIHEAP and ERA, using financial hardship and other customer data. In order to help identify and prequalify customers for benefits, utilities can also use third-party data – such as whether a home is rented or owned and which census tract it is in – and data through partnership with government agencies including income or proxies, like eligibility for other programs. For example, in Connecticut, utilities are using third-party data to pre-qualify and contact customers, and share the results with state agencies to expedite energy assistance payments.
- Directly Screen and Notify Potentially Eligible Recipients: Utilities and energy providers should inform customers of energy assistance programs, screen customers for benefits eligibility, and facilitate referrals to available benefits programs prior to any shut-offs.
- Expedite Assistance to Vulnerable Households: Energy providers should be critical partners by proactively working to establish the processes and data-sharing relationships needed to speed benefits to their eligible customers as quickly as possible. For example, in Michigan, utilities work in partnership with the state to receive bundled payments on behalf of many customers at once, speeding processing and helping benefits quickly reach their customer’s accounts. In South Carolina, utility companies receive a bulk payment from the state prior to the full satisfaction of application and documentation requirements that they can use to apply benefits to customers quickly.
- No Shutoffs for Customers Applying for Financial Hardship Assistance: Beyond state or local shut-off moratoria requirements, when utility companies are notified that a customer is applying for financial hardship assistance, including energy assistance benefits, they should commit to restore service or delay shut-off. For example, in Michigan, once a household applies for ERA utility benefits, the utility company places a hold on utility shut off. Utilities should also commit to provide at least 30 days’ notice to all customers before a shut-off.
- Facilitate Assistance to Delivered Fuel Customers: In order to expedite benefits, providers of delivered fuels should commit to proactively notify families in distress of how to contact a state and local agency for assistance. Fuel providers with capacity should set up processes to facilitate referrals with customer permission. Fuel providers should prioritize deliveries to households approved for benefits, particularly where providers receive direct deposits credited to customer accounts prior to or immediately following delivery. Fuel providers with capacity should go even further by agreeing to deliver fuels to approved households through deferred payment or budgeting agreements.
Today the Administration also called on States, Localities and Tribes to:
Prepare Early to Distribute Expanded LIHEAP to More Families
- Strong and Effective Winter Plans: The Administration is providing technical assistance to LIHEAP grantees to speed up state and local planning and program implementation for winter.
- Quick and Automatic Distribution of Benefits: HHS is urging grantees to consider expediting payments to households that have benefitted from LIHEAP in previous years and simplifying eligibility verification. This option will not be appropriate for all grantees, but some states have already shown it can work. For example, Maine and New York are providing automatic payments to households who have received benefits in the past.
- Expanded Outreach to Newly Eligible Households: HHS is urging grantees to consider additional outreach to households who need energy assistance for the first time this year. A significant number of households receive LIHEAP year after year, but as a result of the economic disruption of the pandemic and rising energy prices additional households are expected to need help. These households may be unfamiliar with how to access benefits, and grantees can help these families access the unprecedented LIHEAP resources available as well as refer to other benefits.
- Coordination between LIHEAP, ERA and Other Programs: Given differences in eligibility, HHS and Treasury are clarifying how grantees of LIHEAP and ERA can coordinate to quickly provide benefits to eligible households. Coordination ensures support can reach a greater number of households, including those who do not qualify for LIHEAP due to their household incomes, people on fixed incomes, the elderly, and others in need. These best practices include coordinating outreach to households, establishing regular communication with program leaders and energy providers, streamlining intake, and referring across programs as appropriate. For example, rental households not fully served by LIHEAP could be referred to ERA, and homeowners could be referred to LIHEAP. Where available, the Homeowners Assistance Fund may be able to serve middle-class homeowner households.
Use Emergency Rental Assistance to Aid Renters with Utility Costs
- Provide Forward-Looking Assistance to Low-income Renters Facing High Energy Costs: The Treasury Department is encouraging grantees to take advantage of the flexibility to provide forward-looking utility assistance payments over the next several months to low-income families facing high heating costs, including for those renters who rely on delivered fuels to heat their homes. ERA grantees may also cover arrears and related fees for utility bills dating back to the start of the pandemic.
- Lower Burdens and Speed Assistance to Distressed Renters Through Collaboration between ERA Program Administrators and Utility Providers: The Administration is facilitating cooperation between state and local governments and utility providers to identify customers at risk of energy insecurity and confirm household eligibility. To support this effort, the Treasury Department has issued guidance encouraging grantees to establish data sharing agreements and bulk payment methods with utility providers.
- Expedite Payments Through Partnerships with Non-Profits to Prevent the Loss of Utility Services: When the rapid delivery of a payment could reasonably be necessary to prevent the loss of utility services, Treasury has provided grantees flexibility to partner with nonprofit organizations for the purpose of making immediate payments while a household’s application is still being processed.
- Increased Home Heating Costs Can Qualify Income-Eligible Households for Needed Assistance this Winter. The Treasury Department is clarifying that elevated energy costs may be a form of COVID-19-related hardship that puts distressed renters at-risk of housing instability qualifying them for assistance with their utilities. Households can self-attest to experiencing both a COVID-related hardship and risk of housing instability based on significant increases in their home heating costs.
Use All Available Tools to Help Working and Middle-Class Families
- State and Local Fiscal Recovery Fund Can Help Families Ineligible for Other Support: States, localities and tribes can tap the $350 billion allocated by the American Rescue Plan to provide additional relief on home heating costs, particularly to middle-class households. For example, Louisville has supported a utility relief fund that provides residents who have fallen behind on gas or electric bills a one-time credit of up to $1,000.
- $10 Billion Homeowners Assistance Fund to help Distressed Homeowners Keep Up with Utility Bills: Treasury is encouraging states, tribes and territories to utilize funds from this American Rescue Plan program to help cover home energy costs or prevent the loss of utilities this winter, including for hard-pressed middle-class families.
- $1 Billion Pandemic Emergency Assistance Fund: The American Rescue Plan also created a new fund for states, territories and tribes of which a substantial portion remains and is available to provide cash or utility-specific assistance to needy families.
The Administration also Highlighted Additional Financial Support Helping Hard-Pressed Families with Energy Costs:
- 1/3 of Families Using Child Tax Credit for Utility Bills: Thanks to the American Rescue Plan, the families of more than 61 million children are receiving expanded monthly Child Tax Credit payments up to $300 per child and nearly a third used it to pay for utilities –including home energy costs – between July and October 2021.
- Weatherization Assistance to Reduce Energy Costs: The bipartisan Infrastructure Investment and Jobs Act invests a historic $3.5 billion in the Department of Energy’s Weatherization Assistance Program, reducing energy costs for more than 700,000 low-income households by increasing the energy efficiency of their homes.
- $100 million to Cover Rent and Utilities in Hard-Hit Rural Areas: The American Rescue Plan is providing financial support through September 2022 to over 26,000 overburdened rural households living in multi-family housing financed by the U.S. Department of Agriculture.
- Preventing Families from Choosing “Heat or Eat”: More low-income children and families face hunger when energy prices rise during winter as higher home heating costs eat up family budgets. The Biden-Harris Administration increased Supplemental Nutrition Assistance Program (SNAP) benefits on October 1 by an average of $36.24 per month, which will help to prevent this cruel tradeoff between heat and food this winter.