LIHEAP Under Heat: Assessing Policy Reforms and Funding Needs to Address State Energy Burdens

Abstract

The Low Income Home Energy Assistance Program (LIHEAP) is the federal government’s primary tool for addressing energy affordability, distributing billions of dollars to low-income households each year. While LIHEAP has served millions of households for decades, it has faced ongoing criticism for the efficiency, adequacy, and fairness of its funding distribution. This report shows that warm-weather states—with higher cooling energy burdens than heating ones—receive disproportionately less funding relative to their energy expenditures compared to cold-weather states. Modeling conducted for the report reveals that a 3% increase in total LIHEAP funding over several years could correct this imbalance without reducing any state’s current support. Given rising concerns about the effects of extreme heat events on low-income households, modernizing LIHEAP to better reflect energy burden will protect at-risk populations and ensure that federal assistance keeps pace with need. Increasing LIHEAP funding from the FY2024 baseline to $10.7 billion would serve an additional 9.7 million households. That would increase the share of income-eligible households served from 18% to 48%.