Winter Fuels Price Outlook Could Have Major Impact on LIHEAP Purchasing Power

By Mark Wolfe

The cost of home heating this winter could increase by up to 11.1%, according to recent data released by the U.S. Energy Information Administration. The average cost of home heating for those using heating oil is expected to increase from $2,087 to $2,494; natural gas from $608 to $697; propane from $1,962 to $2,222; and electricity from $902 to $951. The overall increases are expected not because of higher fuel prices but primarily from an expected return to “normal” colder temperatures this winter.

The higher cost of home heating this winter will have a significant impact on the purchasing power of the federal Low Income Home Energy Assistance Program (LIHEAP), the primary source of assistance to help poor families pay their home energy bills. The purchasing power will decline from 46% of the cost of home energy during the 2011–12 winter heating season to 38% in 2012–13.

The program is already under considerable stress due to the impact of budget cuts enacted since FY2010, which reduced the appropriation from $5.1 billion to $4.7 billion in FY2011 and then to $3.47 billion in FY2012. The average benefit was reduced during this period from $513 to $405. For the coming winter heating season, the National Energy Assistance Directors’ Association is projecting that the average benefit will decline to $375 as a result of expected increases in the number of households receiving assistance due to the higher cost of winter heating and the continuing weak economy.

LIHEAP: Winter Heating Program Puchasing Power (10/12/2012)

Est. Average % of Home Heating Purchased with LIHEAP (FY 10 – FY 13)
Fiscal Year Heating Oil Natural Gas Propane Electricity All Fuels
2010 22.3% 70.8% 28.2% 54.2% 51.8%
2011 20.7% 65.5% 26.1% 50.2% 47.9%
2012 19.4% 66.6% 20.6% 44.9% 46.0%
2013 15.0% 53.7% 16.9% 39.4% 38.3%

 

Est. Home Heating Costs (20010-11 to 2012-13)
Winter Heating Season Heating Oil Natural Gas Propane Electricity All Fuels
2010-11 $2,298 $724 $1,817 $946 $990
2011-12 $2,087 $608 $1,962 $902 $880
2012-13 $2,494 $697 $2,222 $951 $978
%Change
2011/12- 2013/14
19.5% 14.6% 13.3% 5.4% 11.1%

 

Est. Households Served & Average Grant (FY 2010 – FY 2013)
Fiscal Year Appropriation
(in thousands)
Households
(in thousands)
Average Grant
2010 $5,100,000 8,047 $513
2011 $4,700,000 8,013 $475
2012 $3,471,672 6,937 $405
2013 $3,471,672 7,500 $375

Source: Prices based on Short Term Energy Outlook, Energy Information Adm & State LIHEAP Surveys

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