Biden administration distributes billions to lower heating costs as energy prices soar

By Tami Luhby, CNNUpdated: Wed, 02 Nov 2022 22:24:59 GMTSource: CNNThe Biden administration is distributing $4.5 billion in federal assistance to help lower many Americans' heating bills this win

By Tami Luhby, CNN

Updated: Wed, 02 Nov 2022 22:24:59 GMT

Source: CNN

The Biden administration is distributing $4.5 billion in federal assistance to help lower many Americans' heating bills this winter as they brace for another season of sky-high energy costs.

The funds for the Low Income Home Energy Assistance Program, known as LIHEAP, stem from regular appropriations by Congress, additional emergency funding lawmakers included in September's continuing resolution and $100 million from the bipartisan infrastructure law that passed last year, according to the Department of Health and Human Services.

LIHEAP funds are distributed to states, territories and tribes, which use the money to help people pay their home heating and cooling costs, settle arrears and make home energy repairs to lower their utility bills in the future.

More than 5.3 million households were served this past year, according to the agency.

However, more funds are needed, advocates said. The cost of home energy this winter is at the highest level in more than 15 years, said Mark Wolfe, executive director of the National Energy Assistance Directors Association.

"While the additional funding will help to offset at least some of the increase in home energy prices this winter, I am very concerned that the additional funding for LIHEAP will not provide the states with sufficient flexibility to help families address higher prices due to the continuing instability in global energy markets, especially if it is a colder winter and the cost of home energy goes even higher," he said.

Higher costs for all types of home heat

The cost of heating a home with natural gas this winter is expected to jump about 28%, on average, to $931, according to an Energy Information Administration report released last month. The projections are based on the forecast for a slightly colder winter ahead.

Those who heat with oil can expect to pay 27% more, bringing their bill to $2,354 for the season. Electric heat costs are projected to rise 10% to $1,359, while heating with propane is expected to cost 5% more, with the bill hitting $1,688.

These increases come on top of hefty hikes last winter.

More funds for home energy upgrades

The Department of Energy announced on Wednesday that it is allocating nearly $9 billion to states and tribes for home efficiency programs under the Inflation Reduction Act, which passed in August.

The new rebate program could help up to 1.6 million households upgrade their homes and apartments to lower energy bills, including by installing up to 500,000 heat pumps and conducting deep building retrofits through insulation and electrical wiring, according to a White House fact sheet distributed Wednesday.

This is on top of the estimated 700,000 homes that will be weatherized with the expanded Weatherization Assistance Program under the bipartisan infrastructure law.

States can now begin planning programs to distribute the Inflation Reduction Act funds to families.