WASHINGTON — The Biden administration said Wednesday it is making $4.5 billion available through a low-income home energy assistance program to help cover heating costs ahead of what should be a brutal winter.
Spending for the program is significantly higher than typical annual funding of about $3.5 billion, but well below the $8 billion the administration and congressional Democrats provided last winter as part of the President Biden’s coronavirus relief package.
The money spent last year was by far the largest credit in a single year since the Home Energy Assistance Program for low-income people was established in 1981.
The money will be provided to state, local and tribal governments to help more than 5 million families with heating costs and utility bills, and can also be used to make home energy repairs.
“One of the best ways for a family to reduce their energy bill is to make their home more energy efficient,” Vice President Kamala Harris told a crowd at a union hall in Boston.
“But here’s the challenge for many homeowners — many people who are here today — you know energy efficiency upgrades are expensive,” she said. “And while we know it can save you thousands of dollars in the long run, the upfront cost is often too high for so many families to afford.”
By helping families improve their energy efficiency, “we’re also lowering energy bills, lowering household costs, creating jobs and fighting the climate crisis,” Harris said.
In New England, one of the major utilities has already announced a 60% increase in electricity prices this winter. Utilities are also looking to raise natural gas and heating oil prices, citing the war in Ukraine and inflation. The top executive of Eversource Energy, New England’s largest energy supplier, warned Biden last week that the region may not have enough power if a severe cold snap hits this winter.
“This poses a serious threat to public health and safety,” Eversource CEO Joseph Nolan told Biden, urging the president to use emergency powers to ensure adequate fuel resources in the region.
The heating aid announcement comes in the final days before Tuesday’s election that will determine which party controls Congress. Democrats are trying to contrast their efforts to help middle- and low-income people through the $1 trillion infrastructure act and other pieces of legislation with Republican suggestions that they would use the debt limit as leverage to cut Social Security and Medicare benefits and other federal programs.
“As heating costs rise, it’s more important than ever to help families struggling to make ends meet,” said Health and Human Services Secretary Xavier Becerra.
Families across the country face winter with dread as energy costs soar and fuel supplies tighten. The LIHEAP program served more than 5.3 million households last year, and a similar number is expected to participate this year.
The Department of Energy predicts sharp increases in home heating prices compared to last winter. Some worry that heating assistance programs may not make up the difference for struggling families. The situation is even grimmer in Europe, where supply constraints caused by Russia’s invasion of Ukraine are pushing up natural gas prices and causing painful shortages.
In a related announcement, the Department of Energy said Wednesday it would begin allocating $9 billion approved under the new Climate and Health Act for a program to support energy upgrades from 1 .6 million households over the next 10 years. Officials plan to make funds available starting next year for states and tribes to better weatherproof homes and install some 500,000 new heat pumps.
The White House also said it was spending $250 million from the Defense Production Act to boost domestic production of heat pumps, which are mostly made in Europe and Asia.
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