July Map of the Month

By William D. Bryan, Ph.D.

The federal Low Income Home Energy Assistance Program (LIHEAP) is a lifeline for millions of Americans. Since 1981, this program has helped low-income households keep their lights on and remain safe during extreme weather through bill assistance, crisis intervention, and funding for weatherization improvements. 

Despite its demonstrated impact, LIHEAP faces an uncertain future. The White House proposed eliminating the program in its FY26 budget recommendations, and the entire staff at the U.S. Department of Health and Human Services (HHS) responsible for administering LIHEAP was terminated this April. Ending this program will leave millions of households with no stopgap for unaffordable energy and extreme weather, with ripple effects on states, utilities, and ratepayers in the South. 

Using data from the LIHEAP Data Warehouse, this month’s visualization explores the significant impact this program has had on the Southeast. Over the past decade, LIHEAP has supported 10.3 million households in the Southeast, and more than 52 million households nationally. In FY24, this made up nearly 15% of households at or below 150% of the federal poverty level across the region. Almost three-quarters of Southern households served (7.75 million) include at least one resident in a vulnerable age group (60+ or under 5 years old) or with a disability. 

Though benefits vary by state, LIHEAP provides emergency assistance for households who struggle to afford their energy bills and may face the disconnection of essential energy services – an event that can contribute to heightened health and safety risks, potential housing displacement, and strained household finances. Since 2016, this assistance has prevented or resolved disconnections for 4.6 million households in the South. As this month’s chart shows, Kentucky and North Carolina lead the region with the highest number of households who were able to avoid disconnection or have their service restored thanks to LIHEAP, followed by Alabama. In Kentucky alone, 1.25 million households have avoided disconnection entirely or been reconnected thanks to LIHEAP – more than in any other state in the nation. 

Although LIHEAP is primarily known as a bill assistance program, states can allocate a portion of their funding to support weatherization efforts that permanently reduce energy bills. Through the U.S. Department of Energy’s Weatherization Assistance Program (WAP), LIHEAP has funded the weatherization of 220,127 households in the South since 2001, allowing WAP providers extend their reach and serve more households with energy- and cost-saving home improvements. As the chart below shows, five states – Arkansas, Kentucky, South Carolina, Virginia, and West Virginia – have reached their maximum contribution to weatherization, though they can exceed this 15% allocation through a waiver. 

The elimination of LIHEAP would remove a vital backstop for financially insecure households, making it harder for millions of people across the Southeast to catch up on overdue energy bills. In FY24, the average energy burden for LIHEAP recipients in the South was 14.5% of household income, well over the 12.4% national average and nearly two-and-a-half times the 6% threshold considered affordable. A 2018 survey conducted by the National Energy Assistance Directors Association (NEADA) underscored the difficult tradeoffs that LIHEAP recipients often have to make to maintain access to energy: 36% went without food for at least one day to save money for utility bills, 41% skipped medical or dental care, 30% resorted to heating their home with an oven or stove, and a quarter kept their homes at unhealthy or unsafe temperatures. Trade-offs like this were not always enough to make bills affordable, and 13% of LIHEAP recipients took out high-interest payday loans to cover utility bills, deepening their financial precarity. 

Besides the direct impacts on households receiving assistance and efficiency investment, the elimination of LIHEAP is likely to increase energy costs for all ratepayers. When customers fall behind on their bills and face disconnection, utilities incur “bad debt” costs that are often passed along to consumers through higher energy rates. In 2024, utilities nationwide faced $17.4 billion in bad debt from customers with substantial arrearages or disconnections due to nonpayment, an 8.4% increase from the previous year, which NEADA attributes to significant cuts in LIHEAP funding. Although this was less than during the peak of the COVID-19 pandemic, bad debt remains a challenge amid historic demand levels that are putting upward pressure on rates. Without access to LIHEAP, the 1.2 million households in the Southeast who successfully resolved utility disconnections last year will have no recourse, likely increasing bad debt and requiring utilities to invest in energy efficiency, bill management, and payment assistance programs to keep arrearages under control. 

LIHEAP is a critical safeguard serving a large population in the Southeast while helping to mitigate rate increases caused by utility bad debt. In FY24, LIHEAP assisted 1.1 million households in the region – outpacing all other federal, state, local, and utility assistance and weatherization programs. Beyond providing immediate bill assistance, LIHEAP also expands access to weatherization services that permanently reduce energy consumption, offering a long-term path to lower energy bills. The elimination of LIHEAP threatens to put energy affordability further out of reach for millions of households across the Southeast, driving up costs for all ratepayers, exacerbating financial hardship, and increasing risks of utility disconnections at a time when rising energy costs and extreme weather already strain household budgets. 

*Stay tuned for SEEA’s forthcoming policy brief on LIHEAP for a deeper dive into the program’s impact on the Southeast. Please reach out to Will Bryan, Director of Research, for more information.