States are struggling to distribute federal utility relief funds. The shutdown makes it worse

Parts of Arizona are starting to see temperatures dip; overnight lows in Flagstaff are forecast to be in the 30s for the next week before dropping into the 20s.

With the federal government shutdown, though, home heating assistance money is not available. The Low Income Home Energy Assistance Program, or LIHEAP, exists to help cover heating or cooling costs. But not, as it turns out, during a shutdown.

Courtney Fieldman, director of Utility Programs at the Southwest Energy Efficiency Project joined The Show to talk more about this.

Full conversation

MARK BRODIE: Courtney, what are you hearing from states across the region about LIHEAP, about what they’re able to do or not able to do to help people heat their homes?

COURTNEY FIELDMAN: I think the short answer is everything right now is on hold or frozen. The funding technically exists on paper, but it’s frozen in practice. So right now, the Low Income Home Energy Assistance Program, or LIHEAP, is effectively stuck in states like Arizona.

So Congress did actually appropriate the $4 billion nationwide, and about $378 million of that is still undistributed since the April layoffs. And when we look at those numbers, like specifically in Arizona, Arizona should receive about $30 million of that to help about 27,000 households keep their homes heated or cooled.

So the scale of this is pretty significant. And when the federal employees running that program were laid off, there was no one left to manage it or communicate with states. So when the federal government did shut down, the few remaining staff who were in charge of processing those transfers were sent home.

So Arizona’s Department of Economic Security and local community action agencies, they can still take applications, but they can’t actually release those payments until the shutdown ends. So while the money technically exists, this delivery system for the states has stalled, and families who applied weeks ago are still waiting to receive that.

BRODIE: Is that money frozen in federal accounts or in state accounts?

FIELDMAN: Yeah, so it’s really more in state. It’s the transfer from federal to state agencies. These state agencies are set up to actually receive those payments. And so when they were laid off, the system was already struggling to get those funds out of the door. So now with the shutdown, even the small number of people still waiting to process state transfers are unable to work, which means the entire funding chain is paused.

So normally each fall, the Department of Health and Human Services reviews state plans, signs the grant agreements and releases funds for the winter season, but that process is on hold. So for local community action agencies, the one who helps families pay their bills, this means that they can’t draw down federal dollars to process approved applications. They’re ready to help, but they don’t have access to the funds.

And so those families, it’s really just this silent crisis, right? Their bills are due, but the aid can’t be issued. And so I would say the real impact, it isn’t just delay, it’s really disruption. Every week we see the shutdown continue, the administration backlog grows.

And once the government reopens, states will have to start restarting those approvals and reprocess payments before any aid can actually reach those households.

BRODIE: Yeah, I was going to ask if this is the kind of thing that once the shutdown ends, that the money can quickly go to where it’s needed, but it sounds like it can’t.

Courtney Fieldman

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FIELDMAN: Absolutely. So even once the government reopens, it takes time to restart the system. It takes time to rehire staff, reauthorize contracts and reissue grants. So the shutdown doesn’t just pause help, it’s really the series of delay that could last into the new year.

So for families we’re talking about, that means extra late fees, or in some cases even disconnection notices. And for local agencies, I think it means tighter budgets and tough decisions about who to prioritize first when funding actually does arrive.

BRODIE: So I know that there are some states around the country that are trying to sort of step into the void here and backfill, some of this money. Are there any states in this region that are in a position to do so?

FIELDMAN: Historically, I would say no. And I would say that is one of the challenges. I mean, potentially. So LIHEAP’s funding formula was built around heating needs back in the 1980s. So you’re seeing these colder northern states tending to get a larger share of that, even though we’re seeing extreme heat now as one of the biggest weather related killers, especially in Arizona.

So cooling costs are just as life critical as heating costs elsewhere. And so I think that’s really where the work I’m doing at SWEEP and others have been urging to really modernize this so that federal programs recognize heat risk as a public health issue on par with winter cold.

And so until that happens, I think you’re seeing some states that are getting less of a fair share than others, even as we’re seeing the need grow.

BRODIE: Obviously, as you reference, when you think about Arizona, you tend to think about cooling costs. But there are of course places in the northern part of the state and outside of the desert areas where it does get pretty cold and is starting to get pretty cold. I know some of the low temperatures, for example, in Flagstaff for the next several days are predicted to be right around freezing.

What are communities like that supposed to do? What are families living in places like that who can’t afford their heating bills supposed to do right now?

FIELDMAN: Yeah. I feel like everything that we’re saying really sounds bleak, but I just want to highlight that there are, you know, opportunities and that for anyone listening, you know, there are places to turn. So if you or someone you know, depends on LIHEAP, let’s say, the Arizona Department of Economic Security is still accepting applications.

So once the shutdown ends, those payments will still be processed retroactively. So it’s important to stay in that queue in the meantime. Utilities like APS and SRP, they offer hardship and limited income rate programs. You can even call 211, Arizona’s Heat Relief Network. They can connect families to cooling centers and emergency bill support.

These local programs are still running and can help until federal funds resume.

But I think one of the bigger things and part of the story here is that Arizonans or, you know, other states shouldn’t have to wait on Washington every time there’s a funding delay. I think SWEEP is really working with utilities to have the capacity to actually build programs that help these families have access to things like insulation, better air sealing or smart thermostats that can help efficiently control energy use and cost year-round.

These are local solutions that don’t stop when the government does. More than anything, I would just like to call out that this is really a moment for Arizona and for some of the state utilities and regulators to actually start to strengthen these local efficiency and affordability programs so that these families can count on steady, affordable energy no matter what is happening in D.C.

BRODIE: We talked about the layoffs in the office that administers LIHEAP. Is there an expectation of whether or not this program will even exist in another couple of years?

FIELDMAN: I don’t think so. I mean, this program has been operating as a bipartisan program since the 1980s. I don’t think that there’s any risk that we’re going to actually see this program cease to exist. But I do think that we need to work a little bit on the mechanisms to ensure that there’s stability so that it’s not so much of a roller coaster for families who depend on it.