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LIHEAP Energy Burden Evaluation Study

Final Report

**Prepared for:**

**Division of Energy Assistance**

**Office of Community Services**

**Administration for Children and Families**

**U.S. Department of Health and Human Services**

**PSC Order No. 03Y00471301D**

**July 2005**

403 Wall Street • Princeton, NJ • 08540 • 609 252-8008 • Fax 609 252
8015

Table of Contents

**Executive summary [i](#executive-summary)**

Purpose of study [i](#purpose-of-study)

Federal LIHEAP targeting performance
[i](#federal-liheap-targeting-performance)

Analysis of energy burden [iii](#analysis-of-energy-burden)

LIHEAP targeting performance [v](#liheap-targeting-performance)

Conclusions [vi](#conclusions)

I. Introduction [1](#i.-introduction)

Purpose of study [1](#purpose-of-study-1)

Definition of terms [2](#definition-of-terms)

Organization of report [3](#organization-of-report)

II\. Federal LIHEAP targeting performance
[4](#ii.-federal-liheap-targeting-performance)

National LIHEAP program goal [4](#national-liheap-program-goal-1)

National LIHEAP performance goals
[4](#national-liheap-performance-goals-1)

Defining LIHEAP targeting indexes
[5](#defining-liheap-targeting-indexes-1)

III\. Analysis of energy burden [8](#iii.-analysis-of-energy-burden)

Measurement of energy burden [8](#measurement-of-energy-burden-1)

Variation in energy burden [9](#variation-in-energy-burden)

Defining high energy burden [11](#defining-high-energy-burden-1)

Energy burden by income group [12](#energy-burden-by-income-group)

Energy burden by vulnerable group
[15](#energy-burden-by-vulnerable-group)

Energy burden by geography [17](#energy-burden-by-geography)

Energy burden by climate [19](#energy-burden-by-climate)

Energy burden by household characteristics
[20](#energy-burden-by-household-characteristics)

Energy burden by housing unit characteristics
[24](#energy-burden-by-housing-unit-characteristics)

Findings for LIHEAP eligible households
[27](#findings-for-liheap-eligible-households)

IV\. LIHEAP targeting performance
[29](#iv.-liheap-targeting-performance)

2001 RECS LIHEAP Supplement [29](#recs-liheap-supplement-1)

Energy burden for LIHEAP recipient households
[29](#energy-burden-for-liheap-recipient-households)

Net energy burden for LIHEAP recipient households
[31](#net-energy-burden-for-liheap-recipient-households)

LIHEAP targeting performance [33](#liheap-targeting-performance-1)

Targeting performance analysis [36](#targeting-performance-analysis)

V. Findings and conclusions [39](#v.-findings-and-conclusions)

LIHEAP targeting performance measurement findings
[39](#liheap-targeting-performance-measurement-findings)

Conclusions [40](#conclusions-1)

Appendix A: 2001 Residential Energy Consumption Survey
[1](#appendix-a-2001-residential-energy-consumption-survey)

Description of RECS [1](#description-of-recs)

Strengths and limitations of RECS data
[2](#strengths-and-limitations-of-recs-data)

Energy burden [3](#energy-burden)

Appendix B: 2001 RECS LIHEAP Supplement
[1](#appendix-b-2001-recs-liheap-supplement)

Description of the 2001 RECS LIHEAP Supplement
[1](#description-of-the-2001-recs-liheap-supplement)

Strengths and limitations of RECS LIHEAP Supplement data
[1](#strengths-and-limitations-of-recs-liheap-supplement-data)

Net energy burden [2](#net-energy-burden)

Appendix C: U.S. Census Regions [1](#appendix-c-u.s.-census-regions)

Figures and Tables

Table 1-1. Definition of special terms [2](#__RefHeading___Toc100630249)

Table 3-1. Residential energy expenditures and residential energy burden
by income group, United States, 2001 [10](#__RefHeading___Toc100630250)

Table 3-2. Home energy expenditures and residential energy burden by
income group, United States, 2001 [10](#__RefHeading___Toc100630251)

Table 3-3. Distribution of residential energy burden for all households
and for households with income less than \$10,000, United States, 2001
[10](#__RefHeading___Toc100630252)

Table 3-4. Distribution of home energy burden for all households and for
households with income less than \$10,000, United States, 2001
[11](#__RefHeading___Toc100630253)

Table 3-5. Distribution of residential energy burden for low income
households, non low income households, and all households, United
States, 2001 [13](#__RefHeading___Toc100630254)

Table 3-6. Distribution of home energy burden for low income households,
non low income households, and all households, United States, 2001
[13](#__RefHeading___Toc100630255)

Table 3-7. Distribution of residential energy burden for low income
households by income level, United States, 2001
[13](#__RefHeading___Toc100630256)

Table 3-8. Distribution of home energy burden for low income households
by income level, United States, 2001 [14](#__RefHeading___Toc100630257)

Table 3-9. Distribution of residential energy burden for low income
households by income source, United States, 2001
[14](#__RefHeading___Toc100630258)

Table 3-10. Distribution of home energy burden for low income households
by income source, United States, 2001 [14](#__RefHeading___Toc100630259)

Table 3-11. Distribution of residential energy burden for low income
households by poverty group, United States, 2001
[15](#__RefHeading___Toc100630260)

Table 3-12. Distribution of home energy burden for low income households
by poverty group, United States, 2001 [15](#__RefHeading___Toc100630261)

Table 3-13. Distribution of residential energy burden for low income
households by vulnerable group, United States, 2001
[16](#__RefHeading___Toc100630262)

Table 3-14. Distribution of home energy burden for low income households
by vulnerable group, United States, 2001
[16](#__RefHeading___Toc100630263)

Table 3-15. Distribution of residential energy burden for low income
households by Census Region, 2001 [17](#__RefHeading___Toc100630264)

Table 3-16. Distribution of home energy burden for low income households
by Census Region, 2001 [17](#__RefHeading___Toc100630265)

Table 3-17. Distribution of residential energy burden for low income
households by Census Division, 2001 [18](#__RefHeading___Toc100630266)

Table 3-18. Distribution of home energy burden for low income households
by Census Division, 2001 [18](#__RefHeading___Toc100630267)

Table 3-19. Distribution of residential energy burden for low income
households by climate zone, 2001 [19](#__RefHeading___Toc100630268)

Table 3-20. Distribution of home energy burden for low income households
by climate zone, 2001 [19](#__RefHeading___Toc100630269)

Table 3-21. Distribution of residential energy burden for low income
households by household size, 2001 [20](#__RefHeading___Toc100630270)

Table 3-22. Distribution of home energy burden for low income households
by household size, 2001 [20](#__RefHeading___Toc100630271)

Table 3-23. Distribution of residential energy burden for low income
households by age of householder, 2001
[21](#__RefHeading___Toc100630272)

Table 3-24. Distribution of home energy burden for low income households
by age of householder, 2001 [21](#__RefHeading___Toc100630273)

Table 3-25. Distribution of residential energy burden for low income
households by race of householder, 2001
[22](#__RefHeading___Toc100630274)

Table 3-26. Distribution of home energy burden for low income households
by race of householder, 2001 [22](#__RefHeading___Toc100630275)

Table 3-27. Distribution of residential energy burden for low income
households by Spanish descent of householder, 2001
[23](#__RefHeading___Toc100630276)

Table 3-28. Distribution of home energy burden for low income households
by Spanish descent of householder, 2001
[23](#__RefHeading___Toc100630277)

Table 3-29. Distribution of residential energy burden for low income
households by household tenure, 2001 [23](#__RefHeading___Toc100630278)

Table 3-30. Distribution of home energy burden for low income households
by household tenure, 2001 [24](#__RefHeading___Toc100630279)

Table 3-31. Distribution of residential energy burden for low income
households by housing unit type, 2001 [24](#__RefHeading___Toc100630280)

Table 3-32. Distribution of home energy burden for low income households
by housing unit type, 2001 [24](#__RefHeading___Toc100630281)

Table 3-33. Distribution of residential energy burden for low income
households by housing unit size, 2001 [25](#__RefHeading___Toc100630282)

Table 3-34. Distribution of home energy burden for low income households
by housing unit size, 2001 [25](#__RefHeading___Toc100630283)

Table 3-35. Distribution of residential energy burden for low income
households by main heating fuel, 2001 [26](#__RefHeading___Toc100630284)

Table 3-36. Distribution of home energy burden for low income households
by main heating fuel, 2001 [26](#__RefHeading___Toc100630285)

Table 3-37. Distribution of residential burden for low income households
by AC type, 2001 [26](#__RefHeading___Toc100630286)

Table 3-38. Distribution of home energy burden for low income households
by AC type, 2001 [27](#__RefHeading___Toc100630287)

Table 4-1. Residential energy expenditures and residential energy burden
for LIHEAP recipient households, income eligible nonrecipient
households, non low income households, and all households, United
States, 2001 [30](#__RefHeading___Toc100630288)

Table 4-2. Home energy expenditures and home energy burden for LIHEAP
recipient households, income eligible nonrecipient households, non low
income households, and all households, United States, 2001
[30](#__RefHeading___Toc100630289)

Table 4-3. Distribution of residential energy burden for LIHEAP
recipient households, eligible nonrecipient households, non low income
households, and all households, United States, 2001
[30](#__RefHeading___Toc100630290)

Table 4-4. Distribution of home energy burden for LIHEAP recipient
households, eligible nonrecipient households, non low income households,
and all households, United States, 2001
[31](#__RefHeading___Toc100630291)

Table 4-5. LIHEAP residential energy expenditures, gross residential
energy burden, LIHEAP benefit, and net residential energy burden for
LIHEAP recipients and eligible nonrecipients, United States, 2001
[31](#__RefHeading___Toc100630292)

Table 4-6. LIHEAP home energy expenditures, gross home energy burden,
LIHEAP benefit, and net home energy burden for LIHEAP recipients and
eligible nonrecipients, United States, 2001
[32](#__RefHeading___Toc100630293)

Table 4-7. Distribution of gross and net residential energy burden for
LIHEAP recipient households and gross residential energy burden for
eligible nonrecipient households, United States, 2001
[32](#__RefHeading___Toc100630294)

Table 4-8. Distribution of gross and net home energy burden for LIHEAP
recipient households and gross home energy burden for eligible
nonrecipient households, United States, 2001
[33](#__RefHeading___Toc100630295)

Table 4-9. LIHEAP residential energy benefit targeting statistics for
high burden households, elderly households, young child households, and
all recipient households, United States, 2001
[34](#__RefHeading___Toc100630296)

Table 4-10. LIHEAP home energy benefit targeting statistics for high
burden households, elderly households, young child households, and all
recipient households, United States, 2001
[34](#__RefHeading___Toc100630297)

Table 4-11. LIHEAP residential energy burden reduction targeting
statistics for high burden households, elderly households, young child
households, and all recipient households, United States, 2001
[35](#__RefHeading___Toc100630298)

Table 4-12. LIHEAP home energy burden reduction targeting statistics for
high burden households, elderly households, young child households, and
all recipient households, United States, 2001
[35](#__RefHeading___Toc100630299)

## List of Acronyms and Abbreviations {#list-of-acronyms-and-abbreviations .unnumbered}

> ACF Administration for Children and Families
>
> CDD Cooling Degree Days
>
> CPI Consumer Price Index
>
> CPS Current Population Survey
>
> DEA Office of Community Services' Division of Energy Assistance
>
> DHLC Design Heat Load Computation
>
> EIA Energy Information Agency
>
> EL Electricity
>
> FO Fuel Oil
>
> FY Fiscal Year
>
> GPRA Government Performances and Results Act
>
> HDD Heating Degree Days
>
> HHS U.S. Department of Health and Human Services
>
> KE Kerosene
>
> LIHEAP Low Income Home Energy Assistance Program
>
> LIEAP Low Income Energy Assistance Program
>
> LPG Liquefied Petroleum Gas
>
> mmBTUs Million British Thermal Units
>
> NC No cases in sample
>
> NG Natural Gas
>
> OCS Administration for Children and Families' Office of Community
> Services
>
> RECS Residential Energy Consumption Survey
>
> SEPER State Energy Price and Expenditures Report

# Executive summary {#executive-summary .unnumbered}

The Low Income Home Energy Assistance Program (LIHEAP) is one of seven
block grants originally authorized by the Omnibus Budget Reconciliation
Act of 1981. LIHEAP is administered at the federal level by the
Department of Health and Human Services (HHS) through the Office of
Community Services (OCS) in the Administration for Children and Families
(ACF). In 1994, the purpose of the LIHEAP statute was amended to clarify
that the program is \"to assist low income households, particularly
those with the lowest income, that pay a high proportion of household
income for home energy, primarily in meeting their immediate home energy
needs.\" (The Human Services Amendments of 1994, Public Law 103-252,
Sec. 2602(a) as amended.) Furthermore, Congressional Committees
indicated in 1994 that LIHEAP grantees needed to reassess their LIHEAP
benefit structures to ensure that they are targeting those low income
households that have the highest energy costs or needs.[^1]

## Purpose of study

The purpose of this evaluation study is to assess to what extent the
LIHEAP program is serving the lowest income households that have the
highest energy burdens.[^2] The study uses data from the 2001
Residential Energy Consumption Survey (RECS) to examine the distribution
of income and energy burden for low income households and identify those
that have the lowest incomes and highest energy burdens (i.e., high
burden households). The study uses the 2001 RECS LIHEAP Supplement to
measure the effectiveness of the FY 2001 LIHEAP program in serving high
burden households. The study quantifies program effectiveness using
targeting performance measures.[^3] The study also identifies procedures
for updating energy burden targeting performance statistics in the
future.

## Federal LIHEAP targeting performance

The Government Performance and Results Act (GPRA) of 1993 established a
government-wide requirement for federal agencies to develop performance
goals and measures for federal programs. OCS has responsibility under
GPRA for developing the annual LIHEAP program performance plan and an
annual report on LIHEAP program performance. The GPRA performance plan
for LIHEAP must take into account that LIHEAP is a block grant whereby
LIHEAP grantees have broad flexibility to design their programs, within
very broad federal guidelines, to meet the needs of their citizens.

### National LIHEAP program goal

The LIHEAP program does not have sufficient funds to serve all of the
households that are income eligible under the federal maximum income
eligibility standard. Given that limitation, the LIHEAP statute requires
LIHEAP grantees to provide, in a timely manner, that the highest level
of assistance will be furnished to those households that have the lowest
incomes and the highest energy costs or needs in relation to income,
taking into account family size. The LIHEAP statute identifies two
groups of low-income households as having the highest home energy needs:
vulnerable households and high burden households. Vulnerable households
are those with at least one member that is a young child, an individual
with disabilities, or a frail older individual. High burden households
are those households with the lowest incomes and highest home energy
costs.

### National LIHEAP performance goals

> Based on the national LIHEAP program goals, OCS has focused its
> initial performance goals and measurement on targeting income eligible
> vulnerable households and income eligible high burden households. The
> current performance goals are:

-   Increase the percent of LIHEAP recipient households having at least
    one member age 60 years or older.

-   Increase the percent of LIHEAP recipient households having at least
    one member age 5 years or younger.

-   Increase the percent of LIHEAP recipient households having the
    lowest incomes and the highest energy costs.

Baseline data for the elderly and young child targeting performance
goals have been measured to provide a picture of the current status of
recipiency targeting performance across the country.

Targeting performance for high burden households is part of the LIHEAP
performance measurement plan. However, prior to the completion of the
2001 RECS LIHEAP Supplement, there were no data at the national level
sufficient to develop performance measurement statistics for recipiency
targeting for high burden households. The goals of this study are to
develop baseline performance statistics for high burden household
targeting and suggestions for updating these performance statistics over
time.

### Defining LIHEAP targeting indexes

Performance goals must be measurable in order to determine if the goals
are being achieved. OCS has developed a set of performance indicators
(i.e., targeting indexes) that provide for the collection of
quantitative measures regarding the following aspects of LIHEAP
targeting performance:

-   The **recipiency targeting index** quantifies recipiency targeting
    performance. The "recipiency targeting index" for a specific group
    of households is computed by comparing the percent of LIHEAP
    households that are members of the target group to the percent of
    all income eligible households that are members of the target group.

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-   The **benefit targeting index** quantifies benefit targeting
    performance. The index is computed by comparing the mean LIHEAP
    benefit for a target group of recipients to the mean LIHEAP benefit
    for all recipient households.

-   The **burden reduction targeting index** quantifies burden reduction
    targeting performance. The index is computed by comparing the
    percent reduction in the median individual energy burden for a
    target group of recipients to the percent reduction in the median
    individual energy burden for all recipients.

The LIHEAP performance measurement plan has established performance
goals only for recipiency targeting performance. Further, baseline
performance statistics have been developed only for targeting to
vulnerable households. This study is focused on development of baseline
performance statistics for targeting to high burden households. In
addition, this study presents information that will allow OCS to
consider whether benefit and burden reduction targeting performance
measurement statistics should be added to the LIHEAP performance
measurement plan.

## Analysis of energy burden

The LIHEAP statute identifies "households with the lowest incomes and
highest home energy costs" as one of the groups with the "highest home
energy needs." However, the statute does not furnish an operational
definition that can be used to identify such households. This study uses
energy burden as the statistic to classify households with respect to
income and energy costs. This study further defines households as high
burden if they have an energy burden that exceeds a threshold level.
This section of the report describes how energy burden is computed and
how the threshold level for high burden was selected.

### Measurement of energy burden

Energy burden can be defined as the share of annual household income
that is used to pay annual energy bills. For example, if a household has
a gross annual energy bill of \$1,000 and a gross annual income of
\$10,000, the household's gross energy burden is 10 percent of income.
In the RECS study, responding households report gross annual income, but
annual energy bills for a household are obtained from the household's
energy suppliers.

The household's net energy burden is defined as the share of annual
household income that is used to pay annual energy bills net of the
household's LIHEAP grant. For example, if a household has a gross annual
energy bill of \$1,000 and LIHEAP benefit of \$250, the household's net
energy bill is \$750. If the household's annual income is \$10,000, the
household's net energy burden is 7.5 percent of income. In the RECS
LIHEAP Supplement, LIHEAP assistance amounts were obtained for
households from state LIHEAP administrative data.

### Defining high energy burden

Energy burden varies significantly between income groups. For example,
households with incomes under \$10,000 have average home energy burdens
of 6.3 percent, while those with incomes above \$50,000 have average
home energy burdens of 0.9 percent. Lower income households tend to have
higher energy burdens than higher income households.

Energy burden also varies significantly among income groups. One tenth
of the households with incomes below \$10,000 have a home energy burden
less than 1.6 percent, while one tenth have a home energy burden greater
than 22.2 percent. Energy burden is not simply a function of income, but
is also affected by the size of the household's energy bill.

To categorize households as high burden, this study sets an energy
burden threshold; i.e., households with an energy burden that exceeds a
fixed percentage of income are defined as high burden households. This
approach was selected over a population share approach (which defines a
certain share of the population as having a high energy burden) and a
variance approach (which defines high energy burden as lying one
standard deviation above the mean). The threshold approach is preferred
because it allows the number of high burden households to rise and fall
as energy prices increase and decrease.

It is theoretically possible to develop an energy burden threshold that
would be analytically meaningful in the context of energy affordability.
However, the data needed for that study are not available and collecting
such data is beyond the scope of this study. For this study, the high
burden threshold makes use of research that has been conducted in the
housing sector. Some housing analysts have defined a housing burden of
50 percent of income as a severe burden. For low income households,
since total residential energy costs are about 21.8 percent of shelter
costs, high total residential energy burden is defined as energy burden
greater than or equal to 10.9 percent of income. High home energy burden
is defined as home energy burden greater than or equal to 4.3 percent of
income.

However, it is important to understand that high energy burden is
related to, but not the sole determinant of the need for energy
assistance. Each household has a unique set of financial circumstances
that determine whether they have the financial resources to pay for an
adequate supply of energy (i.e., a supply of energy that keeps the
household healthy and safe.) While states can use energy burden
indicators to compare need among households, they also should consider
other information that is available on the financial circumstances of
the household.

### Energy burden statistics

The most important findings from this study relate to the relationship
between income and the characterization of households as having high
home energy burden.

-   Low income households (i.e., households with income at or below the
    LIHEAP federal maximum income standard) represent over 92 percent of
    all households that have a high home energy burden. Over 36 percent
    of low income households are categorized by this study as having a
    high home energy burden. Only about 1 percent of non low income
    households are categorized as having a high home energy burden.

-   Households with incomes less than \$20,000 per year represent over
    95 percent of all households that have a high home energy burden.
    Almost two-thirds of households with incomes below \$10,000 are
    characterized as having a high home energy burden.

The study also furnishes a number of other important findings with
respect to the geographic and demographic distribution of high home
energy burden.

-   Elderly low income households are more likely to have high home
    energy burden than other types of low income households.

-   Almost 40 percent of low income households that have a high home
    energy burden live in the South Census Region.

-   Almost 40 percent of low income households that have a high home
    energy burden are one-person households.

-   Renters and apartment dwellers are less likely to have high home
    energy burden than other types of households.

These statistics illustrate the challenge faced by the LIHEAP program.
In 2001, about 13.4 million households were characterized by this study
as having a high home energy burden. About 8.8 million high burden
households have incomes below the HHS poverty guideline. About 7.0
million high burden households have incomes less than \$10,000. About
5.0 million high burden households are elderly and almost 3 million have
a young child.

## LIHEAP targeting performance

This study presents energy burden statistics for LIHEAP recipient
households and the resulting targeting performance measures for high
burden households, including recipiency targeting, benefit targeting,
and burden reduction targeting.

### 2001 RECS LIHEAP Supplement

The 2001 RECS LIHEAP Supplement was designed to furnish high quality
data for LIHEAP recipient households. It achieved this by developing a
LIHEAP recipient sample frame directly from state LIHEAP administrative
records. The Supplement improves on the core RECS in two ways. The
LIHEAP Supplement uses state administrative records to identify LIHEAP
recipient households and furnish information on energy assistance
benefits, rather than relying on respondent reports.

### Energy burden statistics

There are a number of reasons that LIHEAP recipient households are
expected to have higher energy bills and energy burdens than other
LIHEAP eligible households. LIHEAP funds are allocated to geographic
areas with higher energy bills. Households with higher energy burdens
are more likely to have difficulty paying energy bills and have more
incentive to apply for LIHEAP.

The statistics from this study confirm that LIHEAP recipients have
higher energy bills and burdens than other LIHEAP eligible households.
Median home energy expenditures for LIHEAP recipients are \$613 and the
median home energy burden is 5.6 percent. For eligible nonrecipients,
median expenditures are \$440 and median burden is 3.0 percent. About 62
percent of LIHEAP recipients have high home energy burden, while the
rate for eligible nonrecipients is only 34 percent.

The LIHEAP program helps to make energy bills more affordable for LIHEAP
recipients. In FY 2001, median home energy expenditures for LIHEAP
recipients were \$613 and the median LIHEAP benefit was \$318, for a net
home energy bill of about \$295. While the median gross home energy
burden was 5.6 percent of income, the median net home energy burden was
1.9 percent of income.

### LIHEAP targeting performance measurement statistics for FY 2001

LIHEAP targeting performance measurement statistics help to quantify the
effectiveness of LIHEAP targeting for FY 2001.

-   Recipiency targeting -- About 36 percent of eligible households have
    a high home energy burden, but over 62 percent of LIHEAP recipient
    households have a high home energy burden. The recipiency targeting
    index for high home energy burden households is 170 indicating that
    the program targets high burden households.

-   Benefit targeting -- The average LIHEAP benefit for all recipient
    households is \$380, but the average LIHEAP benefit for high burden
    households is \$411. The benefit targeting index is 108, indicating
    that the program targets higher benefits to high burden households.

-   Burden reduction targeting -- For the average LIHEAP recipient, home
    energy burden is reduced by 52 percent, from 8.0 percent of income
    to 3.8 percent of income. For high burden households, home energy
    burden is reduced by 51 percent, from 11.3 percent of income to 5.5
    percent of income. The burden reduction targeting index is 98,
    indicating that the program does not achieve a higher level of
    burden reduction for high burden households.

The study shows that, in FY 2001, the LIHEAP program served high burden
households at a higher rate than other households. In addition, the
program gave high burden households higher benefits, but did not give
them benefits that were high enough to match the burden reduction for
recipient households that did not have high home energy burden.

### Overall LIHEAP program performance

The national LIHEAP performance goals target increasing the percentage
of LIHEAP recipients that are elderly, have a young child, and have a
high home energy burden. The statistics from this study show that the
program has already made substantial progress toward those three goals.

-   About 60 percent of LIHEAP recipients have a high home energy
    burden.

-   About 90 percent of LIHEAP recipients have an elderly member, have a
    young child, or have a high home energy burden.

-   About 40 percent of LIHEAP recipients have a high home energy burden
    **and** also are in one of the other target groups.

Improving the performance of the LIHEAP program with respect to any of
those goals would require increasing the percentage of households that
fulfill more than one of the goals.

## Conclusions

This study finds that the LIHEAP program targets LIHEAP benefits to the
households with the highest home energy needs as defined by the LIHEAP
statute (i.e., vulnerable households and high burden households).
However, the program could further increase the rate at which it targets
households that both are vulnerable and have a high home energy burden.
In addition, the study finds that, on average, the program does not give
higher benefits to the households that are in the greatest need.

### Improving targeting performance

LIHEAP grantees can improve the performance of the LIHEAP program by
placing a greater emphasis on serving and providing higher benefits to
high burden households. The most accurate way to increase LIHEAP program
targeting is to measure home energy burden for all application
households, to give high burden households priority in receipt of energy
assistance grants, and to furnish high burden households with higher
program benefits. In the absence of procedures to measure home energy
burden, grantees can serve higher burden households by prioritizing
benefits for low income households and furnishing higher benefits to
lower income households, since income is the best proxy for energy
burden. However, any grantee with the ability to directly measure energy
bills for low income households should account for energy costs in the
computation of program benefits.

This study finds that the national performance goals set by the LIHEAP
program are complimentary and that all three targeting indexes need to
be tracked simultaneously. Until this study was conducted, the program
was able to only furnish information on the serving elderly and young
child households. By focusing on those goals, without information on the
goal of serving households with high home energy burden, the program
might move in the direction of serving fewer households with high home
energy burden.

Within the limitations on federal LIHEAP administrative funds for
grantees, a practical way to collect information on the performance of
the LIHEAP program with respect to serving high burden households is
through the RECS LIHEAP Supplement. However, to be more useful, the RECS
LIHEAP Supplement needs to be updated more often than the current
schedule of administration once every four years.

### Meeting the needs of low income high burden households

Neither the LIHEAP statute nor the federal government furnishes an
operational definition of "high burden" households. This study developed
an operational definition of high burden households in order to assess
LIHEAP targeting performance for high burden households. The definition
was derived from established standards for severe shelter burden.
However, this definition has not been subjected to a thorough peer
review from experts in the low income energy field. Moreover, since the
need for energy assistance is dependent on the unique financial
circumstances of individual households, grantees should continue to use
procedures that account for such circumstances in their benefit
determination procedures.

Using the definition proposed in this study, over 12 million low income
households were categorized as having high home energy burden and over 7
million low income households were categorized as both vulnerable and
having high home energy burden in FY 2001. In 2001, about 90 percent of
the 4.4 million recipients were either vulnerable or high burden
household, and about 40 percent were both vulnerable and high burden
households. While these statistics demonstrate that the program is
serving targeted households (i.e., households that are either vulnerable
or high burden), the program might be able to further increase targeting
to households with the highest home energy needs (i.e., those that are
both vulnerable and high burden).

Energy researchers should consider whether this definition of "high
burden" households is useful as an empirical analysis standard for
analyzing LIHEAP performance. A next step in this research program is to
solicit comments on the definition from experts in the low income energy
field and should examine the implications of adopting this definition
for analytical purposes.

# I. Introduction {#i.-introduction .unnumbered}

The Low Income Home Energy Assistance Program (LIHEAP) is one of seven
block grants originally authorized by the Omnibus Budget Reconciliation
Act of 1981. LIHEAP is administered at the federal level by the
Department of Health and Human Services (HHS) through the Office of
Community Services (OCS) in the Administration for Children and Families
(ACF). In 1994, the purpose of the LIHEAP statute was amended to clarify
that the program is \"to assist low income households, particularly
those with the lowest income, that pay a high proportion of household
income for home energy, primarily in meeting their immediate home energy
needs.\" [^4] (The Human Services Amendments of 1994, Public Law
103-252, Sec. 2602(a) as amended.) Furthermore, Congressional Committees
indicated in 1994 that LIHEAP grantees needed to reassess their LIHEAP
benefit structures to ensure that they are targeting those low income
households that have the highest energy costs or needs.[^5]

## Purpose of study

The purpose of this evaluation study is to assess to what extent the
LIHEAP program is serving the lowest income households that have the
highest energy burdens. The study uses data from the 2001 Residential
Energy Consumption Survey (2001 RECS) to examine the distribution of
income and energy burden for low income households and identify those
that have the lowest incomes and highest energy burdens (i.e., high
burden households). The study uses the 2001 RECS LIHEAP Supplement to
measure the effectiveness of the FY 2001 LIHEAP program in serving high
burden households. The study quantifies program effectiveness using
targeting performance measures. The study also proposes procedures for
updating the FY 2001 targeting energy burden performance statistics in
the future.

The Government Performance and Results Act (GPRA) of 1993 established a
government-wide requirement for federal agencies to develop performance
goals and measures for federal programs. Beginning in FY 1999, GPRA
required federal agencies to submit program performance plans and
reports on an annual basis. OCS has responsibility under GPRA for
developing the annual LIHEAP program performance plan and an annual
report on LIHEAP program performance.

OCS has developed a GPRA performance measurement plan based on the
legislative goals of LIHEAP. The plan calls for measurement of LIHEAP
recipiency targeting rates that show the extent to which the LIHEAP
program serves vulnerable households and the households with the lowest
income and highest energy burdens (i.e., high burden households). OCS
has developed baseline performance statistics for LIHEAP targeting to
vulnerable households and has undertaken performance enhancement
initiatives to increase the targeting of such households. Prior to the
release of the 2001 RECS LIHEAP supplement, the available data sources
were inadequate to develop recipiency performance statistics for LIHEAP
targeting to high burden households.

OCS also has defined performance indicators relating to the targeting of
LIHEAP benefits. Special studies of energy burden and benefit
distribution data at the state level have demonstrated the usefulness of
benefit targeting and burden reduction targeting indexes as LIHEAP
performance indicators. However, prior to the 2001 RECS LIHEAP
Supplement, no data sources were available to examine benefit targeting
at the national level.

## Definition of terms {#definition-of-terms .unnumbered}

Table 1-1 furnishes the reader with definitions of special terms that
are used throughout this study.

[]{#__RefHeading___Toc100630249 .anchor}Table 1-1. Definition of special
terms

  -----------------------------------------------------------------------
  **Term**               **Definition**
  ---------------------- ------------------------------------------------
  AIA Zones              Areas classified by the number of heating and
                         cooling degree days.

  Billing data           Energy expenditure and consumption data
                         furnished by the household's energy supplier(s).

  Cooling degree days    Daily CDD are computed by comparing the mean
  (CDD)                  temperature for a day to a base temperature (65
                         degrees Fahrenheit). If the mean temperature on
                         a day is 70, the number of CDD for that day is 5
                         (70 minus 65). Annual CDD refers to the sum of
                         all CDD experienced during a year.

  Energy burden (gross)  The percentage of gross annual household income
                         that is used to pay annual residential energy
                         bills.

  Energy end uses        The specific use of energy in the home for home
                         heating, home cooling or ventilation, water
                         heating, and appliances.

  Fuel assistance        LIHEAP heating, cooling, and crisis assistance.

  Household income       The total amount of income received by a
  (gross)                household, before subtracting income taxes,
                         payroll taxes, and certain work expenses.

  Heating degree day     Daily HDD are computed by comparing the mean
  (HDD)                  temperature for a day to a base temperature (65
                         degrees Fahrenheit). If the mean temperature on
                         a day is 60, the number of HDD for that day is 5
                         (65 minus 60). Annual HDD refers to the sum of
                         all HDD experienced during a year.

  High burden households Households with the lowest incomes and highest
                         energy expenditures.

  Home energy burden     The share or percentage of annual household
                         income that is used to pay annual home heating
                         and home cooling expenditures.

  Home energy            Expenditures for home space heating and home
  expenditures           space cooling and ventilation.

  LIHEAP income eligible Households with incomes below the federal
  households             maximum LIHEAP income standard, i.e., at or
                         below the greater of 150 percent of the HHS
                         poverty guidelines or 60 percent of state median
                         income.

  LIHEAP recipient       Households that received home heating, cooling,
  households             or energy crisis benefits during FY 2001
                         according to state LIHEAP administrative
                         records.

  MmBTUs                 A British Thermal Unit (BTU) is the amount of
                         energy necessary to raise the temperature of one
                         pound of water one degree Farenheit. MmBTUs
                         refers to millions of BTUs. The average
                         household uses about 100 mmBTUs of energy per
                         year.

  Net energy burden      The household's energy burden after the receipt
                         of LIHEAP fuel assistance.

  Residential energy     The percentage of annual household income that
  burden                 is used to pay for all residential energy used
                         in the home.

  Residential energy     Energy expenditures for all residential uses,
  expenditures           including home heating, home cooling or
                         ventilation, water heating, refrigeration,
                         lights, and appliances.

  Vulnerable households  Households with at least one member who is 60
                         years of age or older or 5 years of age or
                         younger.[^6]
  -----------------------------------------------------------------------

## Organization of report {#organization-of-report .unnumbered}

The remaining sections in this study are organized as follows.

-   Section II -- Federal LIHEAP Targeting Performance. This section
    describes the GPRA performance goals and performance measures in the
    LIHEAP annual performance plan.

-   Section III -- Analysis of Energy Burden. This section furnishes
    data and analyses on residential energy burden and home energy
    burden for CY 2001. Subsections include measurement of energy
    burden; defining high energy burden; energy burden by income group,
    by vulnerable group, by geography, by household characteristics, and
    by housing unit characteristics.

-   Section IV --LIHEAP Targeting Performance. This section furnishes
    data and analysis that measures LIHEAP targeting performance for
    FY 2001. It furnishes baseline measures of recipiency targeting
    performance with respect to high burden households, baseline
    statistics on benefit and burden reduction targeting performance for
    high burden and vulnerable households, and an assessment of
    targeting performance on other geographic, demographic, and housing
    characteristics.

-   Section V -- Findings and Conclusions. This section furnishes
    findings and conclusions regarding the use of targeting performance
    measures that relate to targeting high burden households and the
    targeting of LIHEAP benefits.

-   Appendix A -- 2001 Residential Energy Consumption Survey. This
    appendix provides information on the 2001 RECS and how energy burden
    estimates were developed.

-   Appendix B -- 2001 RECS LIHEAP Supplement. This appendix provides
    information on the 2001 RECS LIHEAP Supplement and how energy burden
    estimates for LIHEAP recipients were developed.

-   Appendix C -- Map of US Census Regions

# II. Federal LIHEAP targeting performance {#ii.-federal-liheap-targeting-performance .unnumbered}

GPRA focuses on program results to provide Congress with more objective
information on the achievement of statutory objectives or program goals.
The resulting performance data are to be used in making decision on
budget and appropriation levels. The GPRA performance plan for LIHEAP
must take into account that the federal government does not provide
LIHEAP assistance to the public. Instead, the federal government
provides funds to states, federal or state-recognized Indian
tribes/tribal organizations, and insular areas to administer LIHEAP at
the local level. LIHEAP grantees have broad flexibility to design their
programs, within very broad federal guidelines, to meet the needs of
their citizens.

## National LIHEAP program goal

LIHEAP is not an entitlement program. The amount of LIHEAP funding
varies by state. Therefore, the LIHEAP program is unable to serve all of
the households that are income eligible under the federal maximum income
eligibility standard.[^7] In FY 2002, 13 percent of federally income
eligible households received assistance with their heating costs. Given
that limitation, the LIHEAP statute requires LIHEAP grantees to provide,
in a timely manner, that the highest level of assistance will be
furnished to those households that have the lowest incomes and the
highest energy costs or needs in relation to income, taking into account
family size. The LIHEAP statute identifies the following two groups[^8]
of low-income households as having the highest home energy needs:

-   *Vulnerable Households*: Vulnerable households are those with at
    least one member that is a young child, an individual with
    disabilities, or a frail older individual. The statute does not
    define the terms \"young children,\" \"individuals with
    disabilities,\" and \"frail older individuals.\" The primary concern
    is that such households face serious health risks if they do not
    have adequate heating or cooling in their homes. Health risks can
    include death from hypothermia or hyperthermia and increased
    susceptibility to other health conditions such as stroke and heart
    attacks**.**

-   *High Burden Households*: High burden households are those
    households with the lowest incomes and highest home energy costs.
    The primary concern is that such households will face safety risks
    in trying to heat or cool their home if they cannot pay their
    heating or cooling bills**.** Safety risks can include use of
    makeshift heating sources or inoperative/faulty heating or cooling
    equipment that can lead to indoor fires, sickness, or
    asphyxiation**.**

The authorizing legislation requires states to design outreach
procedures that target LIHEAP recipiency to income eligible vulnerable
and high burden households, and to design benefit computation procedures
that target higher LIHEAP benefits to higher burden households.

## National LIHEAP performance goals

> Based on the national LIHEAP program goals, OCS has focused its
> initial performance goals and measurement on targeting income eligible
> vulnerable households and income eligible high burden households.
> OCS\'s performance plan focuses the LIHEAP program on "increasing the
> availability of LIHEAP fuel assistance to vulnerable and high-energy
> burden households whose health and/or safety are endangered by living
> in a home without sufficient heating or cooling.\" The current
> performance goals are:

-   Increase the percent of LIHEAP recipient households having at least
    one member age 60 years or older.

-   Increase the percent of LIHEAP recipient households having at least
    one member age 5 years or younger.

-   Increase the percent of LIHEAP recipient households having the
    lowest incomes and the highest energy costs.

Baseline data for the elderly and young child targeting performance
goals have been measured to provide a picture of the current status of
recipiency targeting performance across the country. The baseline data
serve as a starting point against which the degree of change in LIHEAP
targeting can be measured, analyzed, and attributed to federal
performance enhancement initiatives. The baseline data also provide a
roadmap to set realistic recipiency performance standards (a
quantitative statement of the degree of desired change) for those parts
of the country in which recipiency targeting performance can be
improved.

Targeting performance for high burden households is part of the LIHEAP
performance measurement plan. However, prior to the completion of the
2001 RECS LIHEAP Supplement, there were no data at the national level
sufficient to develop performance measurement statistics for recipiency
targeting for high burden households.

## Defining LIHEAP targeting indexes

Performance goals must be measurable in order to determine if the goals
are being achieved. OCS has developed a set of performance indicators
(i.e., targeting indexes) that provide for the collection of
quantitative measures regarding the following aspects of LIHEAP
targeting performance:

-   The **recipiency targeting index** quantifies recipiency targeting
    performance. The index is computed for a specific group of
    households by comparing the percent of LIHEAP households that are
    members of the target group to the percent of all income eligible
    households that are members of the target group. For example, if 25
    percent of LIHEAP recipients are high burden households and 20
    percent of all income eligible households are high burden, the
    recipiency targeting index for high burden households is 125 (100
    times 25 divided by 20).

```{=html}
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-   The **benefit targeting index** quantifies benefit targeting
    performance. The index is computed by comparing the mean LIHEAP
    benefit for a target group of recipients to the mean LIHEAP benefit
    for all recipient households. For example, if high burden household
    recipients have a mean benefit of \$250 and the mean benefit for all
    households is \$200, the benefit targeting index is 125 (100 times
    \$250 divided by \$200).

-   The **burden reduction targeting index** quantifies burden reduction
    targeting performance. The index is computed by comparing the
    percent reduction in the median individual energy burden for a
    target group of recipients to the percent reduction in the median
    individual energy burden for all recipients.[^9] For example, if
    high burden recipients have their energy burden reduced by 25
    percent (e.g., from 8 percent of income to 6 percent of income) and
    all recipient households have their energy burden reduced by 20
    percent (e.g., from 5 percent of income to 4 percent of income), the
    burden reduction targeting index is 125 (100 times 25 divided by
    20).

The development of these indexes facilitates tracking of recipiency,
benefit, and burden reduction performance for vulnerable and high burden
households.

-   The recipiency performance data allow for outreach initiatives to
    improve recipiency targeting performance.

-   The benefit and burden reduction performance data facilitate
    analysis of how different kinds of benefit determination procedures
    lead to different levels of benefit targeting performance.

The benefit targeting index and the burden reduction targeting index are
both useful indicators, but they measure the different aspects of
benefit targeting.

-   The benefit targeting index requires fewer data elements; it is a
    simple measure of how benefits for a particular group of recipient
    households compare to benefits for all recipient households.

-   The burden reduction index is more comprehensive; it accounts for
    differences in both energy costs and benefit levels for the group of
    recipient households compared to energy costs and benefit levels for
    all households.

The LIHEAP performance measurement plan has established performance
goals only for recipiency targeting performance. Further, baseline
performance statistics have been developed only for targeting to
vulnerable households. This study is focused on development of baseline
performance statistics for targeting to high burden households. In
addition, this study presents information that will allow OCS to
consider whether benefit and burden reduction targeting performance
measurement procedures and statistics should be added to the LIHEAP
performance measurement plan.

### Interpreting targeting indexes

Recipiency targeting indexes can be used in the following ways to
examine the effectiveness of outreach initiatives to households with
vulnerable members:

-   In absolute terms, if a group has a recipiency targeting index over
    100, it means that the group receives benefits at a rate higher than
    the eligible household population.

-   In relative terms, if a group of vulnerable households is served at
    a higher rate than are recipient households with no vulnerable
    members, that group has been targeted. For example, if the targeting
    index for elderly households is 90 and the index for households with
    no vulnerable members is 75, elderly households are served at a
    higher rate than are households with no vulnerable members.

Benefit and burden reduction targeting indexes can be used in the
following ways to examine the effectiveness of benefit determination
procedures in serving households with vulnerable members and households
with high energy burdens:

-   In absolute terms, if a group has a benefit or burden reduction
    targeting index greater than 100, the group receives higher benefits
    (benefit targeting index) or experiences a greater burden reduction
    (burden reduction index) than the average for all recipient
    households. If a group has a benefit or burden reduction targeting
    index less than 100, the group receives lower benefits (benefit
    targeting index) or experiences a smaller burden reduction (burden
    reduction index) than the average for all recipient households. For
    example, if the benefit targeting index for elderly households is
    125, this indicates that elderly households receive an average
    benefit that is 25 percent higher than the average for all
    recipients.

-   In relative terms, if a group of vulnerable households has a higher
    targeting index than recipient households with no vulnerable
    members, that group has been targeted. For example, if the benefit
    targeting index for elderly households is 90 and the targeting index
    for recipient households with no vulnerable members is 75; this
    indicates that elderly households have higher benefits. If the
    burden reduction targeting index for elderly households is 90 and
    the targeting index for recipient households with no vulnerable
    members is 75, this indicates that elderly households have a greater
    percentage reduction in energy burden.

######  {#section .unnumbered}

# III. Analysis of energy burden {#iii.-analysis-of-energy-burden .unnumbered}

The purpose of this evaluation study is to assess to what extent the
LIHEAP program is serving the lowest income households that have the
highest energy costs. The purpose of this section of the study is to
explain how energy burden is used to identify the lowest income
households with the highest energy costs and to examine the geographic
and demographic dimensions of energy burden. Information is presented on
both residential energy burden (i.e., energy for all residential
purposes) and home energy burden (i.e., energy for home space heating
and home space cooling). Energy burden statistics are reported by income
group, Census Region, Census Division, vulnerable group, household
characteristics, and housing unit characteristics.

## Measurement of energy burden

Energy burden can be defined as the share of annual household income
that is used to pay annual energy bills.[^10] Energy burden is
characterized as "the percent of income spent on energy" and is computed
for an individual household as:

Energy Burden = 100 \* (Annual Energy Bill) ÷ (Annual Income)

For example, if a household has an annual energy bill of \$1,000 and a
gross annual income of \$10,000, the energy burden is 10 percent.

This study examines both residential energy burden and home energy
burden.[^11]

-   Residential energy burden refers to the share of income spent on
    energy for all residential uses, including home heating, home
    cooling or ventilation, water heating, refrigeration, lighting, and
    other household appliances.

-   Home energy burden refers to the share of household income spent on
    energy for home space heating and home space cooling.

This study also examines gross energy burden and net energy burden.

-   Gross energy burden, referred to as energy burden, is defined as
    annual energy expenditures as a share of annual household income.

-   Net energy burden is defined as the household's energy burden after
    the receipt of a LIHEAP grant. Net energy burden for an individual
    household is computed as:

> Net Energy Burden = 100 \* (Energy Bill -- LIHEAP Benefit) ÷ (Annual
> Income)
>
> For example, if a household has an annual energy bill of \$1,000, a
> LIHEAP benefit of \$250, and a gross annual income of \$10,000, the
> energy burden is 10 percent and the net energy burden is 7.5 percent.
> Net energy burden is used extensively in Section IV of the study to
> examine the impact of the LIHEAP program on households.

Energy burden can be used to compare energy expenditures among
households and groups of households. For example, consider the case
where one household has an energy bill of \$1,000 and an income of
\$10,000 and a second household has an energy bill of \$1,200 and an
income of \$24,000. While the first household has a lower energy bill
(\$1,000 for the first household compared to \$1,200 for the second),
the first household has a much higher energy burden (10 percent of
income compared for the first household compared to 5 percent of income
for the second). The LIHEAP program guidelines suggest that the first
household has a greater need for LIHEAP benefits. In fact, the first
household in the example would need a LIHEAP benefit of \$500 to reduce
its net energy burden to 5 percent of income, the energy burden
experienced by the second household. Throughout this study energy burden
and net energy burden are used to compare the need for energy assistance
among groups of low income households.

In most cases, energy burden is calculated using gross annual income
(i.e., the total amount of income received by the household). However,
many state LIHEAP programs use net income when considering a household's
need for energy assistance. These states may subtract income taxes,
payroll taxes, excessive medical costs, and certain work expenses from
income to compute net annual income. It might be valuable to examine
energy burden statistics developed using net annual income. However, the
2001 RECS survey that was used for this study only collected data on
gross annual income.

## Variation in energy burden

Energy burden is a function of income and energy expenditures. Since
residential energy expenditures increase more slowly than income, lower
income households have higher energy burdens. For example, Table 3-1
shows the median residential energy expenditures and median residential
energy burden by income group.[^12] Median residential energy
expenditures increase as income increases; median residential energy
expenditures for households with income below \$10,000 are \$923 and
median residential energy burden is 15.9 percent, compared to median
expenditures of \$1,688 and median burden of 2.3 percent for households
with incomes of \$50,000 or more. The median energy bill for households
with incomes of \$50,000 or more is almost twice the size of the median
energy bill for households with income below \$10,000. However, the
energy burden for the highest income households is only about 15 percent
of the energy burden for the lowest income households.

Table 3-2 shows the average home energy expenditures and average home
energy burden by income group. Home energy expenditures increase more
slowly than income; thus, households with lower incomes have higher home
energy burdens. Median home energy expenditures for households with
income below \$10,000 are \$350 and median home energy burden is 6.3
percent, compared to \$684 and median energy burden of 0.9 percent for
households with incomes of \$50,000 or more.

[]{#__RefHeading___Toc100630250 .anchor}Table 3-1. Residential energy
expenditures and residential energy burden by income group, United
States, 2001

  ------------------- ------------ ----------------------- --------------------
  Income group        Number of    Median residential      Median residential
                      households   energy expenditures     energy burden

  \$0-\<10,000        11,035,000   \$923                   15.9%

  \$10,000-\<20,000   16,580,000   \$1141                  7.4%

  \$20,000-\<30,000   13,975,000   \$1242                  5.0%

  \$30,000-\<40,000   13,902,000   \$1291                  3.7%

  \$40,000-\<50,000   13,194,000   \$1402                  3.1%

  \$50,000 or more    38,303,000   \$1688                  2.3%
  ------------------- ------------ ----------------------- --------------------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630251 .anchor}Table 3-2. Home energy
expenditures and residential energy burden by income group, United
States, 2001

  -----------------------------------------------------------------------------
  Income group        Number of     Median home energy      Median home energy
                      households    expenditures            burden
  ------------------- ------------- ----------------------- -------------------
  \$0-\<10,000        11,035,000    \$350                   6.3%

  \$10,000-\<20,000   16,580,000    \$446                   2.9%

  \$20,000-\<30,000   13,975,000    \$505                   2.0%

  \$30,000-\<40,000   13,902,000    \$532                   1.5%

  \$40,000-\<50,000   13,194,000    \$570                   1.3%

  \$50,000 or more    38,303,000    \$684                   0.9%
  -----------------------------------------------------------------------------

Source: 2001 RECS.

Energy burden varies significantly from household to household. For
example, Table 3-3 shows that the median residential energy burden in
2001 for households with income less than \$10,000 was 15.9 percent.
However, 10 percent of households had residential energy burdens less
than less than 5.7 percent (10^th^ percentile) and 10 percent of
households had residential energy burdens greater than 52.1 percent
(90^th^ percentile). Similarly, Table 3-4 shows that 10 percent of
households with income less than \$10,000 had home energy burdens less
than 1.6 percent (10^th^ percentile) and 10 percent had home energy
burdens greater than 22.2 percent (90^th^ percentile). These statistics
show that energy burden and the need for energy assistance vary
considerably even within the group of households with incomes less than
\$10,000.

[]{#__RefHeading___Toc100630252 .anchor}Table 3-3. Distribution of
residential energy burden for all households and for households with
income less than \$10,000, United States, 2001

  -------------- ------------ ----------- ----------- ------------ ------------
  Income group   Number of    Mean energy Median      Energy       Energy
                 households   burden      energy      burden       burden
                                          Burden      10^th^       90^th^
                                                      percentile   percentile

  0-\<\$10,000   11,035,000   23.2%       15.9%       5.7%         52.1%

  \$10,000 or    95,955,000   4.2%        3.3%        1.6%         8.1%
  more                                                             
  -------------- ------------ ----------- ----------- ------------ ------------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630253 .anchor}Table 3-4. Distribution of home
energy burden for all households and for households with income less
than \$10,000, United States, 2001

  -------------- ------------ ----------- ----------- ------------ ------------
  Income group   Number of    Mean energy Median      Energy       Energy
                 households   burden      energy      burden       burden
                                          Burden      10^th^       90^th^
                                                      percentile   percentile

  \$0-\<10,000   11,035,000   9.7%        6.3%        1.6%         22.2%

  \$10,000 or    95,955,000   1.7%        1.3%        0.4%         3.5%
  more                                                             
  -------------- ------------ ----------- ----------- ------------ ------------

Source: 2001 RECS.

## Defining high energy burden

Since this evaluation study is focused on energy burden as an indicator
of need for LIHEAP benefits, it is useful to set levels for low,
moderate, and high energy burden. Three main approaches have been used
in existing research to define level of energy burden:

-   The "variance" approach defines high energy burden as lying one
    standard deviation above the mean energy burden. For a normal
    statistical distribution, about two-thirds of households fall within
    one standard deviation of the mean. This implies that about
    one-sixth of the population would be categorized as high burden.

-   The "absolute value" approach defines high energy burden as energy
    burden that is "unaffordable" due to being above a fixed percentage
    of income. It is challenging to define that fixed share -- some
    studies have picked 6 percent of income while others have used 25
    percent of income as a standard for high residential energy burden.
    However, using such an absolute standard would make tracking high
    burden households more consistent over time.

-   The "population share" approach defines households with high energy
    burdens based upon a percentile distribution. For example, high
    burden households might be characterized as the 10 percent of
    households with the highest energy burden.

This study uses an absolute value approach because it furnishes more
consistent information than the other two approaches.

-   The variance approach makes the assumption that the statistic of
    interest has a statistically normal distribution. However, the
    distribution of energy expenditures is skewed by high values for a
    small number of households. As a result, the standard deviation is
    larger than for a normal distribution, causing the number of
    households included in the "high burden" group to be lower than
    expected.

-   The population share is too rigid in its construction. It says that
    a certain percentage of low income households (e.g., 25 percent)
    have high burden. However, if energy prices rise rapidly as they did
    in 2001, the energy burden at which a household is categorized as
    high energy burden also rises. Alternatively, if prices fall
    significantly, the energy burden at which a household is categorized
    as high energy burden also falls.

The absolute value approach used for this study is based on the broader
concept of housing burden. Some researchers have defined severe shelter
burden as shelter costs greater than or equal to 50 percent of
income.[^13] This study defines high energy burden as the "energy share"
of severe housing burden. The median total residential energy costs for
households at or below 150 percent of the HHS poverty guidelines are
21.8 percent of shelter costs.[^14] For households with shelter costs of
50 percent of income, residential energy costs would be about 10.9
percent of income (computed as 21.8 percent of 50 percent). Therefore,
if residential energy costs for a household exceed 10.9 percent of
income, it would help to push the household's shelter costs above 50
percent of income. So, this study defines a residential energy burden of
10.9 percent income as a high residential energy burden. Similarly,
moderate shelter burden is defined as shelter costs at or greater than
30 percent of income but less than 50 percent of income. Therefore,
moderate residential energy burden is defined as total residential
energy costs above 6.5 percent of income and less than 10.9 percent of
income.

This study also defines total home energy burden in terms of severe
shelter burden. Heating and cooling expenditures comprise 39.3 percent
of total residential energy expenditures. Therefore, high home energy
burden is defined as heating and cooling costs that exceed 4.3 percent
of income. Moderate home energy burden is defined as heating and cooling
costs above 2.6 percent of income but less than 4.3 percent of income.

However, it is important to understand that high energy burden is
related to, but not the sole determinant of the need for energy
assistance. Each household has a unique set of financial circumstances
that determine whether they have the financial resources to pay for an
adequate supply of energy (i.e., a supply of energy that keeps the
household healthy and safe.) While states can use energy burden
indicators to compare need among households, they also should consider
other information that is available on the financial circumstances of
the household.

## Energy burden by income group

This evaluation study is focused on households that are income eligible
for the LIHEAP program under the federal maximum income standard (i.e.,
low income households). Table 3-compares the distribution of residential
energy burden for low income households to the distribution for
households that are not LIHEAP eligible (i.e., non low income
households). Table 3-6 compares the distribution of home energy burden
for low income households to the distribution for non low income
households.

These tables show that the median residential energy burden for low
income households is almost three times the median for non low income
households, and that the median home energy burden for low income
households is almost three times the median for non low income
households. Over one-third of low income households had high residential
and home energy burdens, but very few non low income households had high
residential energy burdens or high home energy burdens.

[]{#__RefHeading___Toc100630254 .anchor}Table 3-5. Distribution of
residential energy burden for low income households, non low income
households, and all households, United States, 2001

  ------------ ------------- ------------- ------------- ------------ ------------ ---------- --------
  Household    Number of     Mean          Median        Energy       Energy       \%         \% High
  group        households    residential   residential   burden       burden       Moderate   energy
                             energy burden energy burden 10^th^       90^th^       energy     burden
                                                         percentile   percentile   burden     

  Low income   33,805,000    12.6%         8.2%          3.6%         24.5%        28.5%      33.5%

  Non low      73,184,000    3.1%          2.8%          1.4%         5.3%         3.6%       0.4%
  income                                                                                      

  All          106,989,000   6.1%          3.6%          1.6%         11.4%        11.5%      10.8%
  households                                                                                  
  ------------ ------------- ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630255 .anchor}Table 3-6. Distribution of home
energy burden for low income households, non low income households, and
all households, United States, 2001

  -------------------------------------------------------------------------------------------
  Household    Number of     Mean     Median    Energy       Energy       \%         \% High
  group        households    home     home      burden       burden       Moderate   energy
                             energy   energy    10^th^       90^th^       energy     burden
                             burden   burden    percentile   percentile   burden     
  ------------ ------------- -------- --------- ------------ ------------ ---------- --------
  Low income   33,805,000    5.2%     3.2%      0.9%         11.0%        23.6%      36.5%

  Non low      73,184,000    1.3%     1.1%      0.4%         2.4%         7.1%       1.4%
  income                                                                             

  All          106,989,000   2.6%     1.4%      0.5%         5.0%         12.3%      12.5%
  households                                                                         
  -------------------------------------------------------------------------------------------

Source: 2001 RECS.

Tables 3-5 and 3-6 show that even among low income households,
residential and home energy burden vary considerably. Tables 3-7 and 3-8
provide a more in-depth distribution of residential energy burden and
home energy burden, respectively, for low income households by income
level. About 67.6 percent of households with incomes below \$10,000 and
24.0 percent of households with incomes between \$10,000 and \$20,000
have high residential energy burdens, compared to just 1.2 percent of
households with incomes of \$30,000 or more. About 63.8 percent of
households with incomes below \$10,000 and 31.7 percent of households
with incomes between \$10,000 and \$20,000 have high home energy
burdens, compared to 1.2 percent of households with incomes over
\$30,000.

[]{#__RefHeading___Toc100630256
.anchor}^Table\ 3-7.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ income\ level,\ United\ States,\ 2001^

  --------------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Income group    Number of    Mean          Median        Energy       Energy       \%         \% High
                  households   residential   residential   burden       burden       Moderate   energy
                               energy burden energy burden 10^th^       90^th^       energy     burden
                                                           percentile   percentile   burden     

  \$0-\<10,000    11,035,000   23.2%         15.9%         5.7%         52.1%        17.9%      67.6%

  \$10-\<20,000   14,959,000   8.4%          7.9%          3.6%         13.5%        37.5%      24.0%

  \$20-\<30,000   5,109,000    6.2%          5.9%          3.2%         9.3%         33.4%      4.4%

  \$30,000 or     2,702,000    5.0%          5.0%          2.7%         7.5%         12.0%      1.2%
  more                                                                                          

  All low income  33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  --------------- ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630257 .anchor}Table 3-8. Distribution of home
energy burden for low income households by income level, United States,
2001

  --------------- ------------ -------- --------- ------------ ------------ ---------- --------
  Income group    Number of    Mean     Median    Energy       Energy       \%         \% High
                  households   home     home      burden       burden       Moderate   energy
                               energy   energy    10^th^       90^th^       energy     burden
                               burden   burden    percentile   percentile   burden     

  \$0-\<10,000    11,035,000   9.7%     6.3%      1.6%         22.2%        14.7%      63.8%

  \$10-\<20,000   14,959,000   3.5%     3.1%      0.9%         6.5%         27.8%      31.7%

  \$20-\<30,000   5,109,000    2.4%     2.2%      0.6%         4.2%         30.4%      9.8%

  \$30,000 or     2,702,000    1.8%     1.8%      0.5%         3.2%         23.9%      1.2%
  more                                                                                 

  All low income  33,805,000   5.2%     3.2%      0.9%         11.0%        23.6%      36.5%
  --------------- ------------ -------- --------- ------------ ------------ ---------- --------

Source: 2001 RECS.

Tables 3-9 and 3-10 contain the distribution of residential energy
burden and home energy burden, respectively, for low income households
by income source. Low income households that receive public assistance
benefits are more than twice as likely to have high residential energy
burdens and home energy burdens as households with wage income. However,
even among the households with wage income, more than 25 percent of
households have high energy burden.

[]{#__RefHeading___Toc100630258
.anchor}^Table\ 3-9.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ income\ source,\ United\ States,\ 2001^

  ------------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Income source Number of    Mean          Median        Energy       Energy       \%         \% High
                households   residential   residential   burden       burden       Moderate   energy
                             energy burden energy burden 10^th^       90^th^       energy     burden
                                                         percentile   percentile   burden     

  Wages         15,117,000   10.7%         7.2%          3.5%         20.0%        29.9%      25.4%

  Retirement    10,699,000   12.5%         9.2%          3.7%         22.1%        30.9%      38.2%
  income                                                                                      

  Public        1,707,000    21.2%         12.9%         5.7%         56.0%        21.4%      60.3%
  assistance                                                                                  

  Other         6,281,000    15.0%         8.3%          3.8%         40.6%        22.8%      37.7%

  All low       33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                      
  ------------- ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630259 .anchor}Table 3-10. Distribution of home
energy burden for low income households by income source, United States,
2001

  -------------- ------------ -------- -------- ------------ ------------ ---------- --------
  Income source  Number of    Mean     Median   Energy       Energy       \%         \% High
                 households   home     home     burden       burden       Moderate   energy
                              energy   energy   10^th^       90^th^       energy     burden
                              burden   burden   percentile   percentile   burden     

  Wages          15,117,000   4.2%     2.7%     0.8%         9.2%         22.8%      28.5%

  Retirement     10,699,000   5.7%     3.9%     1.3%         10.9%        24.4%      44.5%
  income                                                                             

  Public         1,707,000    8.6%     4.5%     1.1%         17.5%        21.4%      51.7%
  assistance                                                                         

  Other          6,281,000    6.0%     3.3%     0.9%         12.6%        24.8%      37.7%

  All low income 33,805,000   5.2%     3.2%     0.9%         11.0%        23.6%      36.5%
  -------------- ------------ -------- -------- ------------ ------------ ---------- --------

Source: 2001 RECS.

Tables 3-11 and 3-12 show the distribution of residential energy burden
and home energy burden, respectively, for low income households by
poverty group.[^15] Of households below the poverty line, 58.4 percent
have high residential energy burdens. Even among low income households
with incomes above 150 percent of poverty, 6.5 percent have high energy
burdens and 26.8 percent have moderate income burdens.

[]{#__RefHeading___Toc100630260
.anchor}^Table\ 3-11.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ poverty\ group,\ United\ States,\ 2001^

  ------------ ------------ ------------- ------------- ------------ ------------ ---------- --------
  Percent of   Number of    Mean          Median        Energy       Energy       \%         \% High
  poverty      households   residential   residential   burden       burden       Moderate   energy
  group                     energy burden energy burden 10^th^       90^th^       energy     burden
                                                        percentile   percentile   burden     

  Less than    14,975,000   19.5%         12.5%         5.2%         34.5%        22.6%      58.4%
  100%                                                                                       

  100-\<150%   11,476,000   7.8%          7.2%          3.2%         12.6%        37.1%      18.2%

  150% or more 7,354,000    6.0%          5.7%          2.9%         9.5%         26.8%      6.5%

  All low      33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                     
  ------------ ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630261
.anchor}^Table\ 3-12.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ poverty\ group,\ United\ States,\ 2001^

  ------------ ------------ -------- -------- ------------ ------------ ---------- --------
  Percent of   Number of    Mean     Median   Energy       Energy       \%         \% High
  poverty      households   home     home     burden       burden       Moderate   energy
  group                     energy   energy   10^th^       90^th^       energy     burden
                            burden   burden   percentile   percentile   burden     

  Less than    14,975,000   8.0%     4.8%     1.0%         18.0%        17.5%      54.9%
  100%                                                                             

  100-\<150%   11,476,000   3.3%     2.8%     0.8%         6.1%         28.5%      25.3%

  150% or more 7,354,000    2.6%     2.3%     0.7%         5.0%         28.5%      16.2%

  All low      33,805,000   5.2%     3.2%     0.9%         11.0%        23.6%      36.5%
  income                                                                           
  ------------ ------------ -------- -------- ------------ ------------ ---------- --------

Source: 2001 RECS.

## Energy burden by vulnerable group

Tables 3-13 and 3-14 show the distribution of residential energy burden
and home energy burden, respectively, by vulnerable group. The Federal
LIHEAP program has defined vulnerable households as those with a
household member who is 60 or older, a household member who is 5 or
younger, or a household member who is disabled. The 2001 RECS survey
does not have response categories that match those definitions. For
purposes of this study, vulnerable households are defined in the
following way: an elderly household is one that has a household member
who is 65 years of age or older, a frail elderly household is one that
has a household member who is 75 years of age or older, and a child
household is one that has a household member who is 12 years of age or
younger. The RECS does not have information on disabled households. A
nonvulnerable household is one that does not have a vulnerable member
according to the RECS response categories. Since questions on disability
are not on the survey, households categorized as nonvulnerable may
include those with disabled household members.[^16]

Table 3-13 shows that low income households categorized by the RECS
survey as nonvulnerable had the highest mean residential energy burden
(14.7 percent) and the greatest share of high burden households (40.1
percent). However, Table 3-14 shows that, with respect to home energy
burden, over 40 percent of nonvulnerable households, elderly households,
and frail elderly households all had high energy burdens. For both
residential energy and home energy, young child households had the
lowest median energy burden and the smallest share of households with
high energy burdens. However, even for the young child households, over
25 percent of the households had high energy burden.

[]{#__RefHeading___Toc100630262
.anchor}^Table\ 3-13.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ vulnerable\ group,\ United\ States,\ 2001^[^17]

  ------------------------------------------------------------------------------------------------------
  Household group Number of    Mean          Median        Energy       Energy       \%         \% High
                  households   residential   residential   burden       burden       Moderate   energy
                               energy burden energy burden 10^th^       90^th^       energy     burden
                                                           percentile   percentile   burden     
  --------------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Elderly         12,088,000   12.0%         8.9%          3.7%         20.3%        32.2%      33.9%

  Frail elderly   6,681,000    12.2%         9.1%          3.5%         21.2%        30.7%      36.4%

  Child           11,314,000   11.1%         6.9%          3.5%         21.3%        26.7%      26.0%

  Nonvulnerable   11,221,000   14.7%         9.0%          3.8%         37.1%        25.9%      40.1%

  All low income  33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  ------------------------------------------------------------------------------------------------------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630263
.anchor}^Table\ 3-14.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ vulnerable\ group,\ United\ States,\ 2001^[^18]

  --------------- ------------ -------- -------- ------------ ------------ ---------- --------
  Household group Number of    Mean     Median   Energy       Energy       \%         \% High
                  households   \`home   home     burden       burden       Moderate   energy
                               energy   energy   10^th^       90^th^       energy     burden
                               burden   burden   percentile   percentile   burden     

  Elderly         12,088,000   5.3%     3.6%     1.0%         9.9%         25.9%      41.7%

  Frail elderly   6,681,000    5.5%     3.7%     0.9%         11.1%        25.6%      43.4%

  Child           11,314,000   4.2%     2.6%     0.7%         9.2%         24.4%      25.6%

  Nonvulnerable   11,221,000   6.1%     3.4%     1.0%         14.4%        20.3%      41.2%

  All low income  33,805,000   5.2%     3.2%     0.9%         11.0%        23.6%      36.5%
  --------------- ------------ -------- -------- ------------ ------------ ---------- --------

Source: 2001 RECS.

Another way of looking at these data is to assess the share of high
burden low income households that are vulnerable. The 2001 RECS
estimates that there were about 11.3 million low income households that
had a high residential energy burden. About 4.1 million of those high
burden households were elderly and about 2.9 million had a young child.
The unduplicated count of households shows that 6.8 million of the high
burden households were vulnerable. \[Note: This undercounts the total
share of high burden households that are vulnerable, since the 2001 RECS
does not furnish information on disabled households.\]

## Energy burden by geography

Energy burden is affected by energy prices, weather, and income. Higher
fuel prices increase expenditures and, as a result, energy burden.
Extreme weather, especially colder winter weather, may cause consumption
to increase, thereby increasing energy burden. Lower income for a given
level of energy expenditures increases the level of energy burden.
Tables 3-15 and 3-16 show that energy burden varies across Census
Regions because of differences in energy prices, weather, and income.
For example, 18.5 percent of low income households in the West have high
residential energy burdens, compared to over 30 percent of low income
households in the Northeast, Midwest, and South. The West also has the
smallest proportion of low income households with high home energy
burdens, 12.7 percent, compared to over 40 percent in all other regions.
Low income households in the South had median home energy burden almost
the same as for the Northeast and Midwest, and over 40 percent of low
income households were categorized as high home energy burden.

[]{#__RefHeading___Toc100630264
.anchor}^Table\ 3-15.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ Census\ Region,\ 2001^

  ----------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Census      Number of    Mean          Median        Energy       Energy       \%         \% High
  Region      households   residential   residential   burden       burden       Moderate   energy
                           energy burden energy burden 10^th^       90^th^       energy     burden
                                                       percentile   percentile   burden     

  Northeast   6,819,000    15.1%         9.0%          4.1%         39.5%        30.3%      38.6%

  Midwest     7,438,000    12.5%         8.3%          4.2%         23.1%        28.2%      34.6%

  South       12,085,000   13.8%         9.3%          4.6%         30.1%        32.5%      39.2%

  West        7,463,000    8.4%          5.5%          2.6%         15.2%        20.4%      18.5%

  All low     33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                    
  ----------- ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630265
.anchor}^Table\ 3-16.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ Census\ Region,\ 2001^

  ----------- ------------ -------- --------- ------------ ------------ ---------- --------
  Census      Number of    Mean     Median    Energy       Energy       \%         \% High
  Region      households   home     home      burden       burden       Moderate   energy
                           energy   energy    10^th^       90^th^       energy     burden
                           burden   burden    percentile   percentile   burden     

  Northeast   6,819,000    6.8%     3.8%      1.2%         15.4%        23.6%      45.1%

  Midwest     7,438,000    5.8%     3.5%      1.5%         11.2%        25.2%      43.2%

  South       12,085,000   5.7%     3.6%      1.5%         12.3%        26.2%      42.1%

  West        7,463,000    2.6%     1.5%      0.4%         5.3%         17.8%      12.7%

  All low     33,805,000   5.2%     3.2%      0.9%         11.0%        23.6%      36.5%
  income                                                                           
  ----------- ------------ -------- --------- ------------ ------------ ---------- --------

Source: 2001 RECS.

Tables 3-17 and 3-18 show the distribution of residential energy burden
and home energy burden, respectively, for low income households by
Census Division. The Pacific Division has the smallest proportion of low
income households with high residential energy burdens (14.5 percent),
while the West North Central and the East South Central Divisions have
the largest proportions (42.8 and 43.1 percent, respectively). Of low
income households in the Pacific Division, 6.5 percent have high home
energy burdens, compared to 53.2 percent in the West North Central
Division.

[]{#__RefHeading___Toc100630266
.anchor}^Table\ 3-17.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ Census\ Division,\ 2001^

<table>
<colgroup>
<col style="width: 18%" />
<col style="width: 12%" />
<col style="width: 11%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 1%" />
<col style="width: 8%" />
<col style="width: 3%" />
<col style="width: 11%" />
<col style="width: 3%" />
<col style="width: 11%" />
<col style="width: 8%" />
</colgroup>
<thead>
<tr class="header">
<th>Census Division</th>
<th>Number of households</th>
<th>Mean residential energy burden</th>
<th colspan="3">Median residential energy burden</th>
<th colspan="2">Energy burden 10<sup>th</sup> percentile</th>
<th colspan="2">Energy burden 90<sup>th</sup> percentile</th>
<th>% Moderate energy burden</th>
<th>% High energy burden</th>
</tr>
</thead>
<tbody>
<tr class="odd">
<td>New England</td>
<td>1,571,000</td>
<td>14.7%</td>
<td colspan="3">8.9%</td>
<td colspan="2">4.2%</td>
<td colspan="2">28.6%</td>
<td>29.4%</td>
<td>39.6%</td>
</tr>
<tr class="even">
<td>Middle Atlantic</td>
<td>5,248,000</td>
<td>15.3%</td>
<td colspan="3">9.2%</td>
<td colspan="2">4.1%</td>
<td colspan="2">39.5%</td>
<td>30.6%</td>
<td>38.3%</td>
</tr>
<tr class="odd">
<td>East North Central</td>
<td>5,206,000</td>
<td>12.0%</td>
<td colspan="3">7.7%</td>
<td colspan="2">3.8%</td>
<td colspan="2">21.6%</td>
<td>28.6%</td>
<td>31.1%</td>
</tr>
<tr class="even">
<td>West North Central</td>
<td>2,232,000</td>
<td>13.7%</td>
<td colspan="3">9.7%</td>
<td colspan="2">5.1%</td>
<td colspan="2">24.3%</td>
<td>27.3%</td>
<td>42.8%</td>
</tr>
<tr class="odd">
<td>South Atlantic</td>
<td>5,903,000</td>
<td>13.8%</td>
<td colspan="3">9.0%</td>
<td colspan="2">4.5%</td>
<td colspan="2">30.1%</td>
<td>32.0%</td>
<td>35.9%</td>
</tr>
<tr class="even">
<td>East South Central</td>
<td>2,324,000</td>
<td>14.3%</td>
<td colspan="3">9.5%</td>
<td colspan="2">5.2%</td>
<td colspan="2">31.6%</td>
<td>35.4%</td>
<td>43.1%</td>
</tr>
<tr class="odd">
<td>West South Central</td>
<td>3,857,000</td>
<td>13.4%</td>
<td colspan="3">9.8%</td>
<td colspan="2">4.8%</td>
<td colspan="2">28.1%</td>
<td>31.6%</td>
<td>41.8%</td>
</tr>
<tr class="even">
<td>Mountain</td>
<td>2,496,000</td>
<td>11.2%</td>
<td colspan="3">7.0%</td>
<td colspan="2">3.2%</td>
<td colspan="2">23.1%</td>
<td>29.2%</td>
<td>26.4%</td>
</tr>
<tr class="odd">
<td>Pacific</td>
<td>4,968,000</td>
<td>6.9%</td>
<td colspan="3">4.8%</td>
<td colspan="2">2.2%</td>
<td colspan="2">13.1%</td>
<td>16.0%</td>
<td>14.5%</td>
</tr>
<tr class="even">
<td>All low income</td>
<td>33,805,000</td>
<td colspan="2">12.6%</td>
<td>8.2%</td>
<td colspan="2">3.6%</td>
<td colspan="2">24.5%</td>
<td colspan="2"><blockquote>
<p>28.5%</p>
</blockquote></td>
<td>33.5%</td>
</tr>
</tbody>
</table>

Source: 2001 RECS.

[]{#__RefHeading___Toc100630267
.anchor}^Table\ 3-18.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ Census\ Division,\ 2001^

  ----------------------------------------------------------------------------------------------
  Census         Number of    Mean     Median   Energy       Energy       \%         \% High  
  Division       households   home     home     burden       burden       Moderate   energy   
                              energy   energy   10^th^       90^th^       energy     burden   
                              burden   burden   percentile   percentile   burden              
  -------------- ------------ -------- -------- ------------ ------------ ---------- -------- --
  New England    1,571,000    7.0%     3.9%     1.6%         15.1%        27.2%      47.1%    

  Middle         5,248,000    6.7%     3.8%     1.2%         15.4%        22.5%      44.5%    
  Atlantic                                                                                    

  East North     5,206,000    5.5%     3.2%     1.3%         11.1%        25.5%      38.9%    
  Central                                                                                     

  West North     2,232,000    6.4%     4.3%     2.0%         12.3%        24.6%      53.2%    
  Central                                                                                     

  South Atlantic 5,903,000    5.5%     3.5%     1.4%         12.3%        23.2%      39.9%    

  East South     2,324,000    6.4%     4.0%     2.0%         13.7%        35.2%      43.2%    
  Central                                                                                     

  West South     3,857,000    5.6%     3.9%     1.7%         10.4%        25.4%      44.9%    
  Central                                                                                     

  Mountain       2,496,000    4.3%     2.6%     0.9%         8.7%         25.6%      25.0%    

  Pacific        4,968,000    1.7%     1.1%     0.3%         3.6%         13.9%      6.5%     

  All low income 33,805,000   5.2%     3.2%     0.9%         11.0%        23.6%      36.5%    
  ----------------------------------------------------------------------------------------------

Source: 2001 RECS.

## Energy burden by climate

Tables 3-19 and 3-20 show the distribution of residential energy burden
and home energy burden, respectively, for low income households by AIA
Zone. The AIA Zones classify geographic areas by the number of HDD and
CDD. Zone 1 is the coldest and has the greatest number of HDD. Zone 5 is
the warmest and has the fewest number of HDD. The median residential
energy burden is similar for all zones. The home energy burden is
slightly lower for Zone 4 than for other zones. While energy consumption
does vary by AIA Zone, differences in the price of energy and the
average income of households results in similar energy burdens across
AIA Zones.

[]{#__RefHeading___Toc100630268
.anchor}^Table\ 3-19.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ climate\ zone,\ 2001^

  ----------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  AIA Zone    Number of    Mean          Median        Energy       Energy       \%         \% High
              households   residential   residential   burden       burden       Moderate   energy
                           energy burden energy burden 10^th^       90^th^       energy     burden
                                                       percentile   percentile   burden     

  Zone 1      2,718,000    12.2%         8.7%          3.7%         23.1%        30.3%      33.9%

  Zone 2      9,363,000    12.8%         8.0%          3.9%         28.4%        28.6%      32.0%

  Zone 3      7,765,000    13.1%         8.0%          3.0%         24.3%        25.2%      33.9%

  Zone 4      6,701,000    12.1%         7.9%          3.4%         27.6%        24.9%      34.5%

  Zone 5      7,058,000    12.3%         8.9%          4.5%         24.5%        34.6%      33.9%

  All low     33,804,801   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                    
  ----------- ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630269
.anchor}^Table\ 3-20.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ climate\ zone,\ 2001^

  ----------------------------------------------------------------------------------------
  AIA Zone    Number of    Mean     Median   Energy       Energy       \%         \% High
              households   home     home     burden       burden       Moderate   energy
                           energy   energy   10^th^       90^th^       energy     burden
                           burden   burden   percentile   percentile   burden     
  ----------- ------------ -------- -------- ------------ ------------ ---------- --------
  Zone 1      2,718,000    5.5%     3.6%     1.1%         11.4%        23.8%      40.9%

  Zone 2      9,363,000    5.9%     3.5%     1.3%         11.6%        25.7%      39.3%

  Zone 3      7,765,000    5.7%     3.2%     0.9%         12.3%        22.2%      37.7%

  Zone 4      6,701,000    4.3%     2.6%     0.4%         9.9%         18.7%      31.1%

  Zone 5      7,058,000    4.6%     3.1%     1.2%         9.3%         26.9%      34.7%

  All low     33,804,801   5.2%     3.2%     0.9%         11.0%        23.6%      36.5%
  income                                                                          
  ----------------------------------------------------------------------------------------

Source: 2001 RECS.

## Energy burden by household characteristics

The next set of tables furnishes information on how energy burden varies
by household characteristics, including: household size, age of
householder, race and ethnicity of householder, and tenure.

Tables 3-21 and 3-22 show the distribution of residential energy burden
and home energy burden, respectively, for low income households by
household size. Low income households with 2 or fewer members are more
likely than households with 3 or more members to have high residential
energy burdens. The trend is even more dramatic for home energy burden
among low income households. About 45.4 percent of 1-person households
and 43.5 percent of 2-person households have high home energy burdens,
compared to 15.8 percent for households with five or more members. It
appears that, as households get larger, a smaller share of income is
used for energy and more is used for other household purposes.

[]{#__RefHeading___Toc100630270
.anchor}^Table\ 3-21.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ household\ size,\ 2001^

  ----------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Household   Number of    Mean          Median        Energy       Energy       \%         \% High
  Size        households   residential   residential   burden       burden       Moderate   energy
                           energy burden energy burden 10^th^       90^th^       energy     burden
                                                       percentile   percentile   burden     

  1 person    11,301,000   13.2%         9.2%          3.7%         29.0%        28.2%      39.5%

  2 persons   7,788,000    13.3%         9.2%          4.1%         28.6%        31.2%      38.2%

  3 persons   5,235,000    12.0%         7.7%          3.5%         21.6%        28.6%      29.6%

  4 persons   4,274,000    13.4%         7.1%          3.1%         32.3%        23.7%      30.5%

  5 or more   5,207,000    10.0%         6.5%          3.5%         14.8%        28.8%      19.8%

  All low     33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                    
  ----------- ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630271
.anchor}^Table\ 3-22.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ household\ size,\ 2001^

  --------------------------------------------------------------------------------------------------------
  Household   Number of    Mean     Median   Energy       Energy               \%                 \% High
  Size        households   home     home     burden       burden               Moderate           energy
                           energy   energy   10^th^       90^th^               energy             burden
                           burden   burden   percentile   percentile           burden             
  ----------- ------------ -------- -------- ------------ ------------ ------- ---------- ------- --------
  1 person    11,301,000   6.1%     3.9%     1.1%         12.6%        22.0%              45.4%   

  2 persons   7,788,000    5.7%     3.8%     12.3%        11.9%        25.2%              43.5%   

  3 persons   5,235,000    4.7%     2.9%     0.6%         8.5%         27.2%              30.1%   

  4 persons   4,274,000    5.1%     2.6%     0.9%         10.4%        17.0%              32.8%   

  5 or more   5,207,000    3.5%     2.2%     0.6%         5.6%         26.5%              15.8%   

  All low     33,805,000   5.2%     3.2%     0.9%         11.0%        23.6%              36.5%   
  income                                                                                          
  --------------------------------------------------------------------------------------------------------

Source: 2001 RECS.

Tables 3-23 and 3-24 show the distribution of residential energy burden
and home energy burden, respectively, for low income households by age
of householder. The tables show that younger households (i.e.,
householder less than 45) tend to be less likely to have high energy
burden than older households.

[]{#__RefHeading___Toc100630272
.anchor}^Table\ 3-23.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ age\ of\ householder,\ 2001^

  ----------------------------------------------------------------------------------------------------
  Householder   Number of    Mean          Median        Energy       Energy       \%         \% High
  Age           households   residential   residential   burden       burden       Moderate   energy
                             energy burden energy burden 10^th^       90^th^       energy     burden
                                                         percentile   percentile   burden     
  ------------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Under 25      2,788,000    13.9%         6.9%          3.4%         38.6%        24.4%      31.2%
  years                                                                                       

  25 to 34      5,143,000    11.5%         6.5%          3.5%         21.6%        26.5%      23.3%
  years                                                                                       

  35 to 44      5,945,000    11.6%         7.5%          3.5%         24.3%        26.2%      30.4%
  years                                                                                       

  45 to 59      6,436,000    14.4%         9.0%          3.9%         31.8%        26.8%      40.2%
  years                                                                                       

  60 years or   13,492,000   13.5%         9.2%          3.8%         21.2%        31.8%      36.0%
  older                                                                                       

  All low       33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                      
  ----------------------------------------------------------------------------------------------------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630273
.anchor}^Table\ 3-24.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ age\ of\ householder,\ 2001^

  ------------- ------------ -------- -------- ------------ ------------ ---------- --------
  Householder   Number of    Mean     Median   Energy       Energy       \%         \% High
  Age           households   home     home     burden       burden       Moderate   energy
                             energy   energy   10^th^       90^th^       energy     burden
                             burden   burden   percentile   percentile   burden     

  Under 25      2,788,000    5.1%     2.8%     0.7%         13.7%        20.2%      32.3%
  years                                                                             

  25 to 34      5,143,000    4.5%     2.4%     0.9%         8.5%         19.9%      24.6%
  years                                                                             

  35 to 44      5,945,000    4.6%     2.9%     0.7%         9.9%         26.1%      29.3%
  years                                                                             

  45 to 59      6,436,000    6.0%     3.4%     0.8%         13.7%        21.4%      40.9%
  years                                                                             

  60 years or   13,492,000   5.5%     3.8%     1.2%         10.0%        25.7%      42.9%
  older                                                                             

  All low       33,805,000   5.2%     3.2%     0.9%         11.0%        23.6%      36.5%
  income                                                                            
  ------------- ------------ -------- -------- ------------ ------------ ---------- --------

Source: 2001 RECS.

Tables 3-25 and 3-26 show the distribution of residential energy burden
and home energy burden, respectively, for low income households by race
of householder. Over half of low income households with African American
householders have high residential and home energy burdens. About a
third of low income households with White householders have high
residential and home energy burdens. In contrast, 6.3 percent of
households with Asian or Pacific Islander householders have high
residential energy burdens and 5.2 percent have high home energy
burdens.

[]{#__RefHeading___Toc100630274
.anchor}^Table\ 3-25.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ race\ of\ householder,\ 2001^

  ----------------------------------------------------------------------------------------------------
  Householder   Number of    Mean          Median        Energy       Energy       \%         \% High
  Race          households   residential   residential   burden       burden       Moderate   energy
                             energy burden energy burden 10^th^       90^th^       energy     burden
                                                         percentile   percentile   burden     
  ------------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  White         22,007,000   11.2%         8.2%          3.7%         21.2%        30.7%      31.8%

  African       5,726,000    21.3%         11.6%         5.2%         58.4%        26.7%      53.9%
  American                                                                                    

  Asian or      1,122,000    6.4%          5.1%          2.0%         9.5%         11.8%      6.3%
  Pacific                                                                                     
  Islander                                                                                    

  Hispanic      3,343,000    9.8%          5.8%          3.0%         20.0%        24.4%      21.3%

  Other         1,606,000    10.6%         6.6%          3.1%         24.5%        24.5%      27.7%

  All low       33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                      
  ----------------------------------------------------------------------------------------------------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630275
.anchor}^Table\ 3-26.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ race\ of\ householder,\ 2001^

  ------------- ------------ -------- -------- ------------ ------------ ---------- --------
  Householder   Number of    Mean     Median   Energy       Energy       \%         \% High
  Race          households   home     home     burden       burden       Moderate   energy
                             energy   energy   10^th^       90^th^       energy     burden
                             burden   burden   percentile   percentile   burden     

  White         22,007,000   4.7%     3.2%     1.1%         9.6%         26.3%      36.2%

  African       5,726,000    9.4%     5.0%     1.5%         22.3%        19.4%      55.9%
  American                                                                          

  Asian or      1,122,000    2.0%     1.3%     0.5%         3.4%         14.6%      5.2%
  Pacific                                                                           
  Islander                                                                          

  Hispanic      3,343,000    3.2%     1.8%     0.4%         6.3%         15.9%      20.0%

  Other         1,606,000    3.9%     2.7%     0.7%         8.8%         24.3%      26.8%

  All low       33,805,000   5.2%     3.2%     0.9%         11.0%        23.6%      36.5%
  income                                                                            
  ------------- ------------ -------- -------- ------------ ------------ ---------- --------

Source: 2001 RECS.

Tables 3-27 and 3-28 show the distribution of residential energy burden
and home energy burden, respectively, for low income households by
Spanish descent of householder. About 23.5 percent of households with
householders of Spanish descent have high residential energy burdens,
and 21.5 percent have high home energy burdens. In comparison, 35.4
percent of households with householders who are not of Spanish descent
have high residential energy burdens, and 39.4 percent have high home
energy burdens. This may be related to the geographic distribution of
households with householders who are of Spanish descent. A larger share
of these household live in the West Region where households, in general,
are less likely to have high energy burdens.

[]{#__RefHeading___Toc100630276
.anchor}^Table\ 3-27.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ Spanish\ descent\ of\ householder,\ 2001^

  ------------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Householder   Number of    Mean          Median        Energy       Energy       \%         \% High
  Descent       households   residential   residential   burden       burden       Moderate   energy
                             energy burden energy burden 10^th^       90^th^       energy     burden
                                                         percentile   percentile   burden     

  Spanish       5,537,000    10.0%         6.0%          3.2%         20.7%        23.1%      23.5%
  descent                                                                                     

  Not of        28,268,000   13.1%         8.6%          3.8%         27.5%        29.5%      35.4%
  Spanish                                                                                     
  descent                                                                                     

  All low       33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                      
  ------------- ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630277
.anchor}^Table\ 3-28.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ Spanish\ descent\ of\ householder,\ 2001^

  ------------- ------------ -------- ---------- ------------ ------------ ---------- --------
  Householder   Number of    Mean     Median     Energy       Energy       \%         \% High
  Descent       households   home     home       burden       burden       Moderate   energy
                             energy   energy     10^th^       90^th^       energy     burden
                             burden   burden     percentile   percentile   burden     

  Spanish       5,537,000    3.3%     2.1%       0.4%         7.9%         16.3%      21.5%
  descent                                                                             

  Not of        28,268,000   5.6%     3.5%       1.1%         11.9%        25.0%      39.4%
  Spanish                                                                             
  descent                                                                             

  All low       33,805,000   5.2%     3.2%       0.9%         11.0%        23.6%      36.5%
  income                                                                              
  ------------- ------------ -------- ---------- ------------ ------------ ---------- --------

Source: 2001 RECS.

Tables 3-29 and 3-30 show the distribution of residential energy burden
and home energy burden, respectively, for low income households by
household tenure. About 30.8 percent of low income households that rent
their homes, compared to 42.5 percent who own their homes, have high
home energy burdens. In the next part of this section, statistics are
presented by housing unit type. Those statistics show that households in
smaller units have lower energy burdens. The average housing unit size
for renters explains the lower average energy burden.

[]{#__RefHeading___Toc100630278
.anchor}^Table\ 3-29.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ household\ tenure,\ 2001^

  ----------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Tenure      Number of    Mean          Median        Energy       Energy       \%         \% High
              households   residential   residential   burden       burden       Moderate   energy
                           energy burden energy burden 10^th^       90^th^       energy     burden
                                                       percentile   percentile   burden     

  Own         16,318,000   13.1%         9.0%          4.2%         24.3%        33.8%      35.2%

  Rent        17,486,000   12.1%         7.3%          0.3%         28.4%        23.4%      31.9%

  All low     33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                    
  ----------- ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630279
.anchor}^Table\ 3-30.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ household\ tenure,\ 2001^

  ----------- ------------ -------- --------- ------------ ------------ ---------- --------
  Tenure      Number of    Mean     Median    Energy       Energy       \%         \% High
              households   home     home      burden       burden       Moderate   energy
                           energy   energy    10^th^       90^th^       energy     burden
                           burden   burden    percentile   percentile   burden     

  Own         16,318,000   5.8%     3.7%      1.4%         10.9%        26.9%      42.5%

  Rent        17,486,000   4.8%     2.7%      0.6%         11.1%        20.6%      30.8%

  All low     33,805,000   5.2%     3.2%      0.9%         11.0%        23.6%      36.5%
  income                                                                           
  ----------- ------------ -------- --------- ------------ ------------ ---------- --------

Source: 2001 RECS.

## Energy burden by housing unit characteristics

The next set of tables furnishes information on how energy burden varies
by housing unit characteristics, including: housing unit type, housing
unit size, main heating fuel, and type of air conditioning.

Tables 3-31 and 3-32 show the distribution of residential energy burden
and home energy burden, respectively, for low income households by type
of housing unit. About one third of low income households that live in
mobile homes, detached single family houses, attached single family
houses, and units in building with 2 to 4 units have high residential
energy burdens, compared to 19 percent of households that live in
buildings with 5 or more units. About 13.9 percent of households that
live in buildings with 5 or more units have high home energy burdens,
compared to over 40 percent of households that live in other types of
housing units.

[]{#__RefHeading___Toc100630280
.anchor}^Table\ 3-31.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ housing\ unit\ type,\ 2001^

  ----------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Housing     Number of    Mean          Median        Energy       Energy       \%         \% High
  Unit Type   households   residential   residential   burden       burden       Moderate   energy
                           energy burden energy burden 10^th^       90^th^       energy     burden
                                                       percentile   percentile   burden     

  Mobile Home 3,324,000    12.2%         8.7%          4.9%         24.3%        38.5%      32.6%

  Single      17,809,000   14.0%         9.3%          4.4%         28.1%        31.3%      39.4%
  Family                                                                                    

  2-4 Units   4,331,000    14.2%         8.5%          4.3%         35.9%        25.4%      37.6%

  5 or More   8,341,000    8.9%          5.6%          2.4%         17.7%        20.1%      19.0%
  Units                                                                                     

  All low     33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                    
  ----------- ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630281
.anchor}^Table\ 3-32.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ housing\ unit\ type,\ 2001^

  -----------------------------------------------------------------------------------------
  Housing     Number of    Mean     Median    Energy       Energy       \%         \% High
  Unit Type   households   home     home      burden       burden       Moderate   energy
                           energy   energy    10^th^       90^th^       energy     burden
                           burden   burden    percentile   percentile   burden     
  ----------- ------------ -------- --------- ------------ ------------ ---------- --------
  Mobile Home 3,324,000    4.9%     3.7%      1.7%         8.9%         33.0%      40.5%

  Single      17,809,000   6.1%     3.8%      1.3%         12.3%        25.1%      44.9%
  Family                                                                           

  2-4 Units   4,331,000    6.8%     3.5%      1.3%         17.5%        25.7%      42.1%

  5 or More   8,341,000    2.7%     1.7%      0.4%         5.8%         15.5%      13.9%
  Units                                                                            

  All low     33,805,000   5.2%     3.2%      0.9%         11.0%        23.6%      36.5%
  income                                                                           
  -----------------------------------------------------------------------------------------

Source: 2001 RECS.

Tables 3-33 and 3-34 show the distribution of residential energy burden
and home energy burden, respectively, for low income households by size
of housing unit. Households that live in housing units that are 2,000
square feet or larger are more likely than those households living in
smaller housing units to have high residential energy burdens and high
home energy burdens.

[]{#__RefHeading___Toc100630282
.anchor}^Table\ 3-33.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ housing\ unit\ size,\ 2001^

  --------------------------------------------------------------------------------------------------
  Housing     Number of    Mean          Median        Energy       Energy       \%         \% High
  Unit Size   households   residential   residential   burden       burden       Moderate   energy
  (in sq.                  energy burden energy burden 10^th^       90^th^       energy     burden
  ft.)                                                 percentile   percentile   burden     
  ----------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Less than   12,777,000   10.7%         6.7%          2.8%         22.3%        25.2%      27.1%
  1000                                                                                      

  1000 to     13,356,000   13.1%         8.4%          4.1%         24.9%        28.8%      34.7%
  1999                                                                                      

  2000 or     7,671,000    14.9%         9.8%          4.7%         30.1%        33.2%      42.0%
  more                                                                                      

  All low     33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                    
  --------------------------------------------------------------------------------------------------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630283
.anchor}^Table\ 3-34.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ housing\ unit\ size,\ 2001^

  ----------- ------------ -------- -------- ------------ ------------ ---------- --------
  Housing     Number of    Mean     Median   Energy       Energy       \%         \% High
  Unit Size   households   home     home     burden       burden       Moderate   energy
  (in sq.                  energy   energy   10^th^       90^th^       energy     burden
  ft.)                     burden   burden   percentile   percentile   burden     

  Less than   12,777,000   4.0%     2.4%     0.6%         8.3%         18.7%      27.9%
  1000                                                                            

  1000 to     13,356,000   5.5%     3.3%     1.1%         10.7%        27.1%      36.1%
  1999                                                                            

  2000 or     7,671,000    6.9%     4.5%     1.6%         13.8%        25.7%      51.4%
  more                                                                            

  All low     33,805,000   5.2%     3.2%     0.9%         11.0%        23.6%      36.5%
  income                                                                          
  ----------- ------------ -------- -------- ------------ ------------ ---------- --------

Source: 2001 RECS.

Tables 3-35 and 3-36 show the distribution of residential energy burden
and home energy burden by main heating fuel. Low income households that
heat with bulk fuels (i.e., LPG, fuel oil, or kerosene) have the highest
residential energy burdens and home energy burdens. Households that heat
with electricity have the lowest burdens. However, those differences
reflect the findings from tables 3-15 and 3-16. A large share of the
households that use electricity as their main heating fuel live in the
West where energy burdens are lower because energy usage is lower than
for the other regions.

[]{#__RefHeading___Toc100630284
.anchor}^Table\ 3-35.\ Distribution\ of\ residential\ energy\ burden\ for\ low\ income\ households\ by\ main\ heating\ fuel,\ 2001^

  ------------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Main Heating  Number of    Mean          Median        Energy       Energy       \%         \% High
  Fuel          households   residential   residential   burden       burden       Moderate   energy
                             energy burden energy burden 10^th^       90^th^       energy     burden
                                                         percentile   percentile   burden     

  Natural Gas   18,051,000   13.4%         8.7%          3.8%         27.5%        28.7%      34.7%

  Electricity   10,365,000   10.7%         6.8%          3.1%         23.4%        25.5%      26.3%

  Bulk Fuel     4,612,000    14.4%         9.9%          5.4%         27.5%        33.8%      46.0%

  Other Fuel    604,000      10.5%         8.7%          3.6%         16.0%        31.3%      34.0%

  Do not heat   172,000      5.5%          4.6%          3.2%         9.3%         30.9%      0.0%

  All low       33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  income                                                                                      
  ------------- ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630285
.anchor}^Table\ 3-36.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ main\ heating\ fuel,\ 2001^

  ------------- ------------ -------- -------- ------------ ------------ ---------- --------
  Main Heating  Number of    Mean     Median   Energy       Energy       \%         \% High
  Fuel          households   home     home     burden       burden       Moderate   energy
                             energy   energy   10^th^       90^th^       energy     burden
                             burden   burden   percentile   percentile   burden     

  Natural Gas   18,051,000   5.9%     3.4%     1.1%         12.3%        22.9%      40.3%

  Electricity   10,365,000   4.0%     2.6%     0.7%         9.0%         23.8%      25.6%

  Bulk Fuel     4,612,000    5.8%     4.3%     1.7%         11.9%        28.2%      50.4%

  Other Fuel    604,000      2.0%     0.8%     0.0%         6.0%         13.8%      10.7%

  Do not heat   172,000      0.0%     0.0%     0.0%         0.0%         0.0%       0.0%

  All low       33,805,000   5.2%     3.2%     0.9%         11.0%        23.6%      36.5%
  income                                                                            
  ------------- ------------ -------- -------- ------------ ------------ ---------- --------

Source: 2001 RECS.

Tables 3-37 and 3-38 show the distribution of residential energy burden
and home energy burden, respectively, for low income households by air
conditioning type. About 28.4 percent of low income households that use
a central air conditioning unit to cool their homes have high
residential energy burdens, compared to 40 percent of households that
use individual air conditioning units, and 33.2 percent of households
that do not use air conditioning. Among the three groups, households
that use individual air conditioning units are more likely to have high
home energy burdens.

[]{#__RefHeading___Toc100630286
.anchor}^Table\ 3-37.\ Distribution\ of\ residential\ burden\ for\ low\ income\ households\ by\ AC\ type,\ 2001^

  -------------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Air            Number of    Mean          Median        Energy       Energy       \%         \% High
  conditioning   households   residential   residential   burden       burden       Moderate   energy
  type                        energy burden energy burden 10^th^       90^th^       energy     burden
                                                          percentile   percentile   burden     

  Central Air    12,925,000   10.9%         7.4%          4.1%         20.0%        30.6%      28.4%

  Individual     10,516,000   13.9%         9.2%          3.8%         29.2%        27.3%      40.0%
  Units                                                                                        

  None           10,364,000   13.3%         8.2%          3.1%         32.3%        26.9%      33.2%

  All low income 33,805,000   12.6%         8.2%          3.6%         24.5%        28.5%      33.5%
  -------------- ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630287
.anchor}^Table\ 3-38.\ Distribution\ of\ home\ energy\ burden\ for\ low\ income\ households\ by\ AC\ type,\ 2001^

  -------------- ------------ -------- --------- ------------ ------------ ---------- --------
  Air            Number of    Mean     Median    Energy       Energy       \%         \% High
  Conditioning   households   home     home      burden       burden       Moderate   energy
  Type                        energy   energy    10^th^       90^th^       energy     burden
                              burden   burden    percentile   percentile   burden     

  Central Air    12,925,000   4.7%     3.2%      1.3%         8.8%         31.0%      33.2%

  Individual     10,516,000   5.8%     3.6%      1.1%         12.4%        19.9%      43.4%
  Units                                                                               

  None           10,364,000   5.3%     2.7%      0.4%         11.6%        18.1%      33.4%

  All low income 33,805,000   5.2%     3.2%      0.9%         11.0%        23.6%      36.5%
  -------------- ------------ -------- --------- ------------ ------------ ---------- --------

Source: 2001 RECS.

## Findings for LIHEAP eligible households

The statistics presented in this section show that energy burden varies
widely among households. About 10 percent of all households have a home
energy burden that is less than 0.5 percent of income, while 10 percent
of all households have a residential energy burden that is above 5.0
percent of income. Even within the lowest income group (households with
incomes less than \$10,000), about 10 percent of households have a home
energy burden that is less than 2 percent of income, while about 10
percent of households have a home energy burden that exceeds 22 percent
of income.

The statistics presented in this section furnish some information on how
energy burden varies among different types of households. As might be
expected, energy burden is highest for the lowest income households.
However, other findings from this section might be unexpected.

-   The South has the warmest weather and comparatively low heating
    costs. However, almost 40 percent of the low income households that
    have a high home energy burden live in the South.

-   Elderly households and one-person households use less energy than
    households with children. However, on average, elderly and
    one-person households are more likely to have a high home energy
    burden than families with children.

-   Renters and apartment dwellers have lower income, on average, than
    homeowners. However, since they have lower energy consumption than
    homeowners, they are less likely to have high home energy burden.

The findings demonstrate that the best way to assess whether a household
has high home energy burden is to directly measure household income and
household energy costs. It is generally, but not universally true that
lower income households have higher home energy burdens. However, it is
difficult to use other geographic, demographic, or housing
characteristics to accurately assess whether one group of households has
higher home energy burden than another.

Neither the LIHEAP statute nor the federal government furnishes an
operational definition of "high burden" households. This study developed
an operational definition in order to assess LIHEAP targeting
performance of high burden households. The definition was derived from
established standards for severe shelter burden. However, this
definition has not been subjected to a thorough peer review from experts
in the low income energy field.

Using the proposed definition, this study estimates that over 13 million
households have a high home energy burden. Of the high burden
households, over 7 million of have annual incomes less than \$10,000 and
over 8.8 million have annual incomes that are less than or equal to the
HHS poverty guidelines.

The LIHEAP program also targets vulnerable households (i.e., households
with an elderly member, a disabled member, or a young child). Using the
proposed definition, the study found that there is a significant overlap
between high burden households and vulnerable households. For example,
the data show that over 5 million high burden households have an elderly
member and almost 3 million high burden households have a young child.

# IV. LIHEAP targeting performance {#iv.-liheap-targeting-performance .unnumbered}

The purpose of this section of the study is to present energy burden
statistics for LIHEAP recipient households and the resulting targeting
performance measures, including recipiency targeting for high burden
households, benefit targeting, and burden reduction targeting.
Statistics on targeting performance are presented by income group,
income source, main heating fuel type, and Census region.

The 2001 RECS LIHEAP Supplement furnishes the data to develop the energy
burden statistics for LIHEAP recipient households. It furnishes
statistics from a sample of households that is not biased by recipiency
reporting error and includes information on LIHEAP benefits that is
based on administrative data, rather than respondent reports. Using
these data furnishes high quality estimates of gross and net energy
burden for LIHEAP recipient households.

## 2001 RECS LIHEAP Supplement

The 2001 RECS LIHEAP Supplement was designed to furnish high quality
data for LIHEAP recipient households. It achieved this by developing a
LIHEAP recipient sample frame directly from state administrative
records.

As discussed in Appendix A, the RECS survey furnishes high quality data
on energy consumption and expenditures because energy billing data are
collected directly from the energy suppliers for each responding
household. The LIHEAP supplement uses a similar model to enhance the
quality of data for LIHEAP recipients in two ways.

-   Recipiency - In the main RECS survey, respondents are categorized as
    LIHEAP recipients if they report receipt of energy assistance
    benefits. The LIHEAP supplement is a sample of LIHEAP recipients
    from administrative records, thereby ensuring that all interviewed
    households are LIHEAP recipients.

-   Assistance benefits - In the main RECS survey, respondents report on
    the amount of LIHEAP benefits they received. For the LIHEAP
    supplement, state LIHEAP offices furnished information on the value
    of LIHEAP benefits for each responding household thereby eliminating
    response error with respect to LIHEAP benefit amounts.

Appendix B furnishes more detailed information on the procedures for the
2001 RECS LIHEAP Supplement.

## Energy burden for LIHEAP recipient households

There are a number of reasons that LIHEAP recipient households are
expected to have higher energy burdens than other income eligible
households. The LIHEAP statute requires that LIHEAP grantees provide,
"in a timely manner, that the highest level of assistance will be
furnished to those households which have the lowest incomes and the
highest energy costs or needs in relation to income, taking in account
family size." States are expected to target LIHEAP benefits to
households that have higher energy burdens. Households that have high
energy burdens are more likely to have difficulty in paying their energy
bills and can be expected to have an incentive to apply for LIHEAP
benefits.

Tables 4-1 and 4-2 compare the residential and home energy expenditures,
respectively, for LIHEAP recipient households, LIHEAP income eligible
nonrecipient households, non low income households, and all households.
Table 4-1 shows that LIHEAP recipients have higher residential energy
expenditures than income eligible nonrecipients. Table 4-2 shows that
home energy expenditures for LIHEAP recipient households are about 40
percent higher than those for eligible nonrecipients and that the median
home energy burden for LIHEAP recipient households is five times the
home energy burden for non low income households.

[]{#__RefHeading___Toc100630288 .anchor}Table 4-1. Residential energy
expenditures and residential energy burden for LIHEAP recipient
households, income eligible nonrecipient households, non low income
households, and all households, United States, 2001

  --------------- ------------- --------------------- --------------------
  Household group Number of     Median residential    Median residential
                  households    energy expenditures   energy burden

  LIHEAP          4,373,000     \$1,399               12.4%
  recipients                                          

  Eligible        29,703,000    \$1,164               7.8%
  nonrecipients                                       

  Non low income  73,184,000    \$1,458               2.8%

  All households  106,989,000   \$1,373               3.6%
  --------------- ------------- --------------------- --------------------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630289 .anchor}Table 4-2. Home energy
expenditures and home energy burden for LIHEAP recipient households,
income eligible nonrecipient households, non low income households, and
all households, United States, 2001

  --------------- ------------- --------------------- --------------------
  Household group Number of     Median home energy    Median home energy
                  households    expenditures          burden

  LIHEAP          4,373,000     \$613                 5.6%
  recipients                                          

  Eligible        29,703,000    \$440                 3.0%
  nonrecipients                                       

  Non low income  73,184,000    \$594                 1.1%

  All households  106,989,000   \$552                 1.4%
  --------------- ------------- --------------------- --------------------

Source: 2001 RECS.

Tables 4-3 and 4-4 compare the distribution of residential and home
energy burden, respectively, for LIHEAP recipient households, LIHEAP
eligible nonrecipient households, non low income households, and all
households. Table 4-3 shows that over 60 percent of LIHEAP recipients
are categorized as having high residential energy burden and over 80
percent are categorized as having moderate or high residential energy
burden. However, there are also a large number of eligible nonrecipients
with high energy burden. About 30 percent of the households that were
eligible for LIHEAP in FY 2001 but did not receive benefits were
categorized as having high residential energy burden. Table 4-4 shows
that the statistics for home energy burden are similar, with over 60
percent of LIHEAP recipient households having high home energy burden,
and over 30 percent of income eligible nonrecipients having high home
energy burden.

[]{#__RefHeading___Toc100630290 .anchor}Table 4-3. Distribution of
residential energy burden for LIHEAP recipient households, eligible
nonrecipient households, non low income households, and all households,
United States, 2001

  -------------------------------------------------------------------------------------------------------
  Household group Number of     Mean          Median        Energy       Energy       \%         \% High
                  households    residential   residential   burden       burden       Moderate   energy
                                energy burden energy burden 10^th^       90^th^       energy     burden
                                                            percentile   percentile   burden     
  --------------- ------------- ------------- ------------- ------------ ------------ ---------- --------
  LIHEAP          4,373,000     17.4%         12.4%         5.1%         31.5%        20.6%      61.7%
  recipients                                                                                     

  Eligible        29,703,000    11.9%         7.9%          3.6%         22.7%        29.8%      30.0%
  nonrecipients                                                                                  

  Non low income  73,184,000    3.1%          2.8%          1.4%         5.3%         3.6%       0.4%

  All households  106,989,000   6.1%          3.6%          1.6%         11.4%        11.5%      10.8%
  -------------------------------------------------------------------------------------------------------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630291 .anchor}Table 4-4. Distribution of home
energy burden for LIHEAP recipient households, eligible nonrecipient
households, non low income households, and all households, United
States, 2001

  --------------- ------------- -------- -------- ------------ ------------ ---------- --------
  Household group Number of     Mean     Median   Energy       Energy       \%         \% High
                  households    home     home     burden       burden       Moderate   energy
                                energy   energy   10^th^       90^th^       energy     burden
                                burden   burden   percentile   percentile   burden     

  LIHEAP          4,373,000     8.0%     5.6%     1.5%         16.1%        17.8%      62.2%
  recipients                                                                           

  Eligible        29,703,000    4.9%     3.0%     0.9%         9.9%         23.9%      33.9%
  nonrecipients                                                                        

  Non low income  73,184,000    1.3%     1.1%     0.4%         2.4%         7.1%       1.4%

  All households  106,989,000   2.6%     1.4%     0.5%         5.0%         12.3%      12.5%
  --------------- ------------- -------- -------- ------------ ------------ ---------- --------

Source: 2001 RECS.

## Net energy burden for LIHEAP recipient households

LIHEAP recipient households have their annual energy bill reduced by the
amount of their LIHEAP benefits. As discussed in Section III, a
household's net energy burden is the share of income that is required to
pay their net energy bill (energy bill minus LIHEAP benefits).

Table 4-5 compares residential energy expenditures and the residential
energy burden for LIHEAP recipients to eligible nonrecipients. Median
residential energy expenditures for LIHEAP recipients are about \$235
higher than for eligible nonrecipients. That difference is more than
offset by the median LIHEAP benefit of \$318. However, since LIHEAP
recipient households have a lower average income than eligible
nonrecipients, the median net residential energy burden for LIHEAP
recipients is still higher than the average for eligible nonrecipients.

[]{#__RefHeading___Toc100630292 .anchor}Table 4-5. LIHEAP residential
energy expenditures, gross residential energy burden, LIHEAP benefit,
and net residential energy burden for LIHEAP recipients and eligible
nonrecipients, United States, 2001

  -----------------------------------------------------------------------------------
  Household group Number of    Median         Median        Median      Median net
                  households   residential    residential   LIHEAP      residential
                               energy         energy burden benefit     energy burden
                               expenditures                             
  --------------- ------------ -------------- ------------- ----------- -------------
  LIHEAP          4,373,000    \$1,399        12.4%         \$318       8.9%
  recipients                                                            

  Eligible        29,703,000   \$1,164        7.9%          \$0         7.9%
  nonrecipients                                                         
  -----------------------------------------------------------------------------------

Source: 2001 RECS.

Table 4-6 compares home energy expenditures and the home energy burden
for LIHEAP recipients and eligible nonrecipients. It shows that the
LIHEAP benefit makes the median net home energy burden for LIHEAP
recipients lower than the gross home energy burden for eligible
nonrecipients.

[]{#__RefHeading___Toc100630293 .anchor}Table 4-6. LIHEAP home energy
expenditures, gross home energy burden, LIHEAP benefit, and net home
energy burden for LIHEAP recipients and eligible nonrecipients, United
States, 2001

  --------------- ------------ -------------- ----------- ----------- -----------
  Household group Number of    Median home    Median home Median      Median net
                  households   energy         energy      LIHEAP      home energy
                               expenditures   burden      benefit     burden

  LIHEAP          4,373,000    \$613          5.6%        \$318       1.9%
  recipients                                                          

  Eligible        29,703,000   \$440          3.0%        \$0         3.0%
  nonrecipients                                                       
  --------------- ------------ -------------- ----------- ----------- -----------

Source: 2001 RECS.

Tables 4-7 and 4-8 furnish more information on how the receipt of LIHEAP
changes the distribution of residential and home energy burden,
respectively for LIHEAP recipient households. These tables show two
important things about the allocation of LIHEAP benefits:

-   Receipt of LIHEAP makes the recipient population look more similar
    to the population of eligible nonrecipients (i.e., it lowers the
    average energy burden and the number of households with high energy
    burden).

-   There are many eligible nonrecipient households that have
    substantially higher energy burdens than some of the recipient
    households.

For example, the 90^th^ percentile column in Table 4-7 shows that 10
percent of eligible nonrecipients have a residential energy burden over
22.7 percent, while the same table shows that 10 percent of recipients
had a net residential energy burden under 2.9 percent after the receipt
of LIHEAP benefits. Table 4-8 also shows that the net home energy burden
was reduced to 0 percent for at least 10 percent of LIHEAP recipient
households.

[]{#__RefHeading___Toc100630294 .anchor}Table 4-7. Distribution of gross
and net residential energy burden for LIHEAP recipient households and
gross residential energy burden for eligible nonrecipient households,
United States, 2001

  --------------- ------------ ------------- ------------- ------------ ------------ ---------- --------
  Household group Number of    Mean          Median        Energy       Energy       \%         \% High
                  households   residential   residential   burden       burden       Moderate   energy
                               energy burden energy burden 10^th^       90^th^       energy     burden
                                                           percentile   percentile   burden     

  LIHEAP          4,373,000    17.4%         12.4%         5.1%         31.5%        20.6%      61.7%
  recipients                                                                                    
  *(gross                                                                                       
  burden)*                                                                                      

  LIHEAP          4,373,000    12.6%         8.9%          2.9%         21.9%        29.1%      39.5%
  recipients                                                                                    
  *(net burden)*                                                                                

  Eligible        29,703,000   11.9%         7.9%          3.6%         22.7%        29.8%      30.0%
  nonrecipients                                                                                 
  *(gross                                                                                       
  burden)*                                                                                      
  --------------- ------------ ------------- ------------- ------------ ------------ ---------- --------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630295 .anchor}Table 4-8. Distribution of gross
and net home energy burden for LIHEAP recipient households and gross
home energy burden for eligible nonrecipient households, United States,
2001

  --------------------------------------------------------------------------------------------
  Household group Number of    Mean     Median   Energy       Energy       \%         \% High
                  households   home     home     burden       burden       Moderate   energy
                               energy   energy   10^th^       90^th^       energy     burden
                               burden   burden   percentile   percentile   burden     
  --------------- ------------ -------- -------- ------------ ------------ ---------- --------
  LIHEAP          4,373,000    8.0%     5.6%     1.5%         16.1%        17.8%      62.2%
  recipients                                                                          
  *(gross                                                                             
  burden)*                                                                            

  LIHEAP          4,373,000    3.8%     1.9%     0.0%         9.3%         14.5%      27.3%
  recipients                                                                          
  *(net burden)*                                                                      

  Eligible        29,703,000   4.9%     3.0%     0.9%         9.9%         23.9%      33.9%
  nonrecipients                                                                       
  *(gross                                                                             
  burden)*                                                                            
  --------------------------------------------------------------------------------------------

Source: 2001 RECS.

## LIHEAP targeting performance

As described in Section II, OCS has developed a set of performance
indicators that provide for the collection of quantitative information
regarding LIHEAP recipiency, benefit, and burden reduction targeting
performance. The recipiency targeting index assesses whether a
particular group has been targeted for receipt of LIHEAP benefits, while
the benefit targeting indexes indicate how benefits are targeted among
LIHEAP recipients.

### LIHEAP recipiency targeting for high burden households

Estimates of recipiency targeting performance for vulnerable groups have
been developed using Current Population Survey data and state
administrative reports. These measures are reported annually. However,
prior to the implementation of the 2001 RECS LIHEAP Supplement, no data
were available to develop recipiency targeting measures for high burden
households.

The statistics from Tables 3-5 and 4-3 can be used to compute a
recipiency targeting index for households with a high residential energy
burden. The recipiency targeting index for high burden households is
defined as: 100 times the percent of LIHEAP recipients that are high
burden divided by the percent of LIHEAP eligibles that are high burden.

High Burden Household Targeting Performance (Residential Energy)

Index = 100 \* Percent LIHEAP High Burden / Percent Eligible High Burden

Index = 100 \* 61.7% / 33.5%

Index = 184

The statistics from Tables 3-6 and 4-4 can be used to compute a
recipiency targeting index for households with a high home energy
burden. The recipiency targeting index for high burden households is
defined as: 100 times the percent of LIHEAP recipients that are high
burden divided by the percent of LIHEAP eligibles that are high burden.

High Burden Household Targeting Performance (Home Energy)

Index = 100 \* Percent LIHEAP High Burden / Percent Eligible High Burden

Index = 100 \* 62.2% / 36.5%

Index = 170

The targeting statistics show that the LIHEAP program targets high
burden households.

### LIHEAP benefit targeting

OCS developed performance measures for the distribution of LIHEAP
benefits - the benefit targeting index and the burden reduction
targeting index. However, prior to the implementation of the 2001 RECS
LIHEAP Supplement, these performance measures had only been used for
analysis of state level data in states that had energy expenditure data
for recipient households.

The benefit targeting index shows whether benefits are targeted to a
specific group of recipients. The benefit targeting index is defined as:
100 times the average benefit for the target group divided by the
average benefit for all LIHEAP households. Table 4-9 shows the mean
residential energy expenditures, mean residential energy burden, the
mean LIHEAP benefit, and the benefit targeting index for high burden
recipients, elderly recipients, young child recipients, and all LIHEAP
households. Table 4-10 shows a similar table that examines benefits with
respect to home energy expenditures.

Table 4-9 shows that the average LIHEAP benefit for high burden LIHEAP
recipients is \$411, compared to the average of \$380 for all
recipients. The benefit targeting index for high burden households is
108; higher benefits are targeted to households with a high residential
energy burden. However, while elderly recipients have an average
residential energy burden of 18.5 percent, more than one percent higher
than the average of 17.4 percent for LIHEAP recipients, the average
LIHEAP benefit for elderly recipients is \$304, about \$75 lower than
the average for all recipients.

Table 4-10 furnishes benefit targeting indexes for LIHEAP recipients
with high home energy burdens. The benefit targeting index for high home
energy burdens households is 108, which shows that higher LIHEAP
benefits are targeted to recipient households with higher home energy
burdens.

[]{#__RefHeading___Toc100630296 .anchor}Table 4-9. LIHEAP residential
energy benefit targeting statistics for high burden households, elderly
households, young child households, and all recipient households, United
States, 2001

  ---------------- ------------ -------------- ------------- ---------- -----------
  Household group  Number of    Mean           Mean          Mean       Benefit
                   households   residential    residential   LIHEAP     targeting
                                energy         energy burden benefit    index
                                expenditures                            

  High burden      2,697,000    \$1,567        23.9%         \$411      108
  recipients                                                            

  Elderly          1,395,000    \$1,342        18.5%         \$304      80
  recipients                                                            

  Young child      1,633,000    \$1,652        16.2%         \$424      111
  recipients                                                            

  All LIHEAP       4,373,000    \$1,451        17.4%         \$380      100
  recipients                                                            
  ---------------- ------------ -------------- ------------- ---------- -----------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630297 .anchor}Table 4-10. LIHEAP home energy
benefit targeting statistics for high burden households, elderly
households, young child households, and all recipient households, United
States, 2001

  ---------------- ------------ -------------- ---------- ---------- -----------
  Household group  Number of    Mean home      Mean home  Mean       Benefit
                   households   energy         energy     LIHEAP     targeting
                                expenditures   burden     benefit    index

  High burden      2,718,000    \$786          11.4%      \$411      108
  recipients                                                         

  Elderly          1,395,000    \$638          8.8%       \$304      80
  recipients                                                         

  Young child      1,633,000    \$694          7.0%       \$424      111
  recipients                                                         

  All LIHEAP       4,373,000    \$655          8.0%       \$380      100
  recipients                                                         
  ---------------- ------------ -------------- ---------- ---------- -----------

Source: 2001 RECS.

### LIHEAP burden reduction targeting 

The burden reduction targeting index shows whether burden reduction is
targeted to a specific group of recipients. The burden reduction
targeting index is defined as: 100 times the average reduction in energy
burden for the target group divided by the average burden reduction for
all LIHEAP households.

Table 4-11 furnishes the mean residential energy expenditures, the mean
LIHEAP benefit, the mean gross home energy burden, the mean net
residential energy burden, the burden reduction percentage, and the
burden reduction targeting index for high burden recipients, elderly
recipients, young child recipients, and all LIHEAP households.

Table 4-11 shows that the average reduction in residential energy burden
for LIHEAP recipients is about 28.9 percent (i.e., the net residential
energy burden is 28.9 percent less than the gross residential energy
burden). The average reduction in residential energy burden for the
three target groups in this analysis, high burden households, elderly
households, and young child households, are all measured to have a
slightly smaller reduction in residential energy burden than the average
for all recipients.

Table 4-12 shows that the same finding holds true for the reduction in
home energy burden for the target groups.

[]{#__RefHeading___Toc100630298 .anchor}Table 4-11. LIHEAP residential
energy burden reduction targeting statistics for high burden households,
elderly households, young child households, and all recipient
households, United States, 2001

  ---------------- ------------ --------- ------------- ------------- ------------ -----------
  Household group  Number of    Mean      Mean          Mean net      Burden       Burden
                   households   LIHEAP    residential   residential   reduction    reduction
                                benefit   energy burden energy burden percentage   targeting
                                                                                   index

  High burden      2,697,000    \$411     23.9%         17.4%         28.1%        97
  recipients                                                                       

  Elderly          1,395,000    \$304     18.5%         14.3%         26.5%        92
  recipients                                                                       

  Young child      1,633,000    \$424     16.2%         11.7%         26.5%        92
  recipients                                                                       

  All LIHEAP       4,373,000    \$380     17.4%         12.6%         28.9%        100
  recipients                                                                       
  ---------------- ------------ --------- ------------- ------------- ------------ -----------

Source: 2001 RECS.

[]{#__RefHeading___Toc100630299 .anchor}Table 4-12. LIHEAP home energy
burden reduction targeting statistics for high burden households,
elderly households, young child households, and all recipient
households, United States, 2001

Source: 2001 RECS.

The statistics presented in this part of the study show that the LIHEAP
program has mixed results in targeting to high burden households, given
the following:

-   Households with a high energy burden are more likely to receive
    benefits than households that have a moderate or low energy burden,
    though some recipient households have relatively low energy burdens.

-   The average benefit received by high burden households is slightly
    higher than the benefit received by other types of households.

-   The average reduction in burden for high burden households is
    slightly lower than the burden reduction for other types of income
    eligible households.

These statistics show that the LIHEAP program does a good job of
ensuring that high burden households receive LIHEAP. However, the
program could do a better job of ensuring that the highest burden
households receive the highest LIHEAP benefits.

## Targeting performance analysis

### Recipiency targeting performance by income 

The tables in Section III of this report show that the majority of high
burden households are in the lowest income groups. Further, the analysis
of LIHEAP Supplement data shows that the LIHEAP program serves the
lowest income households at a high rate. This, in part, accounts for
successful performance of the LIHEAP program with respect to serving
households with high home energy burdens. For example:

-   About one third of low income households (11.0 million) have incomes
    below \$10,000. (Table 3-8)

-   Over one third of low income households (12.3 million) are defined
    by this study as having high home energy burden. (Table 3-6)

-   Over 7.0 million of the 12.3 million high burden households have
    incomes below \$10,000.

-   By delivering about half of its benefits to households with income
    below \$10,000, the LIHEAP program is effective in reaching
    households with high home energy burdens.

However, it is not just by serving the lowest income households that the
LIHEAP program is able to reach households with high home energy
burdens. Households with a high energy burden are more likely to be
served by LIHEAP, even after accounting for income. For example:

-   About 64 percent of households with incomes below \$10,000 have a
    high home energy burden. (Table 3-8)

-   About 83 percent of the LIHEAP recipients with incomes below
    \$10,000 have a high home energy burden.

But, whenever the program serves higher income households, it is
challenging to ensure that those households have high home energy
burdens. For example:

-   Only 10 percent of low income households with incomes between
    \$20,000 and \$30,000 have a high home energy burden. (Table 3-8)

-   About 18 percent of LIHEAP recipient households with incomes between
    \$20,000 and \$30,000 have a high home energy burden.

Though LIHEAP recipients in the \$20,000 to \$30,000 income group are
more likely to have a high home energy burden than nonrecipients, LIHEAP
recipients in this income group are much less likely to have a high home
energy burden than LIHEAP recipients with incomes below \$10,000.
Whenever the LIHEAP program serves households in high income or poverty
groups, it appears to be more difficult to ensure that the program is
targeted to the households with high home energy burdens.

### Recipiency targeting performance by vulnerable group

It is important to consider whether targeting high burden households
conflicts with the goal of serving vulnerable households (i.e.
households with an elderly member, a disabled member, or a young child).
In Section III, the analysis shows that a large number of vulnerable
households have a high home energy burden. However, the LIHEAP program
strives to serve vulnerable households, even if they don't have a high
home energy burden. However, statistics show that households with a high
home energy burden are served at a high rate for all vulnerable groups.
For example:

-   About 42 percent of low income elderly households have a high home
    energy burden (Table 3-14), but 67 percent of LIHEAP recipient
    elderly households have a high home energy burden.

-   About 43 percent of low income frail elderly households have a high
    home energy burden (Table 3-14), but 78 percent of LIHEAP recipient
    frail elderly households have a high home energy burden.

-   About 26 percent of low income young child households have a high
    home energy burden (Table 3-14), but 56 percent of LIHEAP recipient
    young child households have a high home energy burden.

For FY 2001, the LIHEAP program was successful at targeting households
that were vulnerable and that had a high home energy burden. Of the
estimated 4.4 million LIHEAP recipient households, the RECS LIHEAP
Supplement shows that at least 2.9 million had vulnerable household
members and about 2.7 million had high home energy burden. At least 1.8
million LIHEAP recipients had vulnerable members and had high home
energy burden. Only about 0.5 million LIHEAP recipients were neither
vulnerable nor had a high energy burden. The LIHEAP program was
successful in furnishing almost 90 percent of its benefits to targeted
households.[^19]

### Recipiency targeting performance by geography

The analysis in Section III shows that the West has the lowest incidence
of households with high home energy burden (Table 3-16). Only 13 percent
of low income households in the West had high home energy burdens in FY
2001, while over 40 percent of low income households in the other
regions had high burdens. However, statistics from the 2001 RECS LIHEAP
Supplement show that LIHEAP grantees in all regions were successful in
targeting high burden households.

-   In the Northeast, 45 percent of low-income households had a high
    home energy burden, while 73 percent of LIHEAP recipient households
    had a high burden.

-   In the Midwest, 43 percent of low-income households had a high home
    energy burden, while 57 percent of LIHEAP recipient households had a
    high burden.

-   In the South, 42 percent of low-income households had a high home
    energy burden, while 65 percent of LIHEAP recipient households had a
    high burden.

-   In the West, 13 percent of low-income households had a high home
    energy burden, while 37 percent of LIHEAP recipient households had a
    high burden.

For all regions except the West, more than half of LIHEAP recipients had
a high home energy burden in FY 2001. In the West region, the incidence
of high burden among LIHEAP recipients was almost three times the
incidence of high burden in the LIHEAP eligible population.

### Benefit targeting performance 

The LIHEAP program benefit targeting analysis shows that, in FY 2001,
LIHEAP benefits were slightly higher for high burden households than for
other recipient households, and that energy burden reduction was
slightly smaller for high burden households than for other recipient
households. In this study, detailed analysis of benefit targeting
statistics show that those findings are consistent across income groups,
vulnerable household groups, and geography. For example:

-   For the overall LIHEAP program, the benefit targeting index for high
    burden households was 108, indicating that high burden households
    received slightly higher benefits than other recipient households.

-   The benefit targeting statistics by income group show that high
    burden households with income at or below 100 percent of poverty had
    a benefit targeting index of 107 and that high burden households
    with incomes between 100 and 150 percent of poverty had a benefit
    targeting index of 111.

-   The benefit targeting statistics by vulnerable group show that
    vulnerable high burden households had benefit targeting indexes that
    ranged from 107 to 111.

-   The benefit targeting statistics by region show that the benefit
    targeting indexes for high burden households ranged from 103 to 115.

These statistics show that there was no group for whom significantly
higher benefits were made available when the household had a high energy
burden. Even thought the program serves high burden households at a
higher rate than other types of households, it does not offer those high
burden households significantly higher LIHEAP benefits.

# V. Findings and conclusions {#v.-findings-and-conclusions .unnumbered}

The purpose of this evaluation study is to assess under GRPA to what
extent the LIHEAP program is serving the lowest income households that
have the highest energy burdens. This section of the study summarizes
the statistics that lead to those findings and suggests what would be
required for the LIHEAP program to improve targeting performance. This
section of the study also furnishes conclusions regarding the usefulness
of LIHEAP recipiency, benefit, and burden reduction targeting
performance measures in analyzing LIHEAP targeting performance.

## LIHEAP targeting performance measurement findings

The study finds that the LIHEAP program is effective in targeting the
highest burden households for receipt of LIHEAP benefits. However, the
program is not as successful in furnishing higher benefits to high
burden and vulnerable households. Further, the program does not furnish
high burden and vulnerable households with the largest percentage
reduction in energy burden.

### LIHEAP recipiency targeting

The primary LIHEAP performance measure used in this analysis is the
recipiency targeting index for households with high energy burden. This
index measures to what extent LIHEAP is serving the lowest income
households that have the highest energy burdens.

-   The recipiency targeting index for high burden households is 184 for
    residential energy burden and 170 for home energy burden. This index
    shows that LIHEAP is serving the lowest income households with the
    highest home energy burdens at a significantly higher rate than
    households that have a moderate or low energy burden.

However, the LIHEAP program is concerned with serving both vulnerable
and high energy burden households. Income eligible households can be
vulnerable households only, high energy burden households only, can be
both vulnerable and high energy burden households, or can be neither
vulnerable nor high energy burden households.

-   The LIHEAP program was successful in targeting over 90 percent of
    LIHEAP benefits to income eligible households that fall into at
    least one of the target groups (i.e., vulnerable households or high
    energy burden households.

-   However, the statistics developed in this report show that there are
    at least 7 million income eligible households that have both a high
    home energy burden and a vulnerable household member. In FY 2001,
    the program only served about 2 million of those households.

More detailed analysis of targeting shows that the LIHEAP program is
successful in targeting benefits to high burden households, even after
controlling for income, vulnerable household status, and geography. For
example:

-   About 64 percent of households with incomes below \$10,000 had a
    high home energy burden in FY 2001, while 83 percent of LIHEAP
    recipient households with incomes below \$10,000 had a high home
    energy burden.

-   About 42 percent of low income elderly households had a high home
    energy burden in FY 2001, while 67 percent of LIHEAP recipient
    elderly households had a high burden.

-   About 45 percent of low income households in the Northeast had a
    high home energy burden in FY 2001, while 73 percent of LIHEAP
    recipient households in the Northeast had a high home energy burden.

Moreover, after accounting for both vulnerability status and high energy
burden, only about 10 percent of LIHEAP recipient households were not a
member of at least one of the target groups, and over 40 percent of
LIHEAP recipient households were both a member of a vulnerable group and
had a high home energy burden.

### LIHEAP benefit targeting

The LIHEAP benefit targeting index is used to assess the extent to which
the highest LIHEAP benefits are given to the highest burden LIHEAP
recipients. The LIHEAP benefit targeting index for high burden
households is 108, showing that high burden households receive slightly
higher benefits than other types of LIHEAP recipients.

### LIHEAP burden reduction targeting

The LIHEAP burden reduction targeting index is used to assess the extent
to which LIHEAP benefits reduce energy burden by the greatest percentage
for the highest burden LIHEAP recipients. The burden reduction targeting
index for high burden households is 97, indicating that high burden
LIHEAP recipients have a slightly smaller burden reduction percentage
than other types of LIHEAP recipients.

## Conclusions

The findings from this study show that grantees target LIHEAP benefits,
but that targeting could be further improved. However, such improvements
would require changes in LIHEAP intake and benefit determination
procedures.

-   Recipiency Targeting -- The program has successfully targeted the
    two groups that have been identified as having the highest home
    energy needs. However, the program could attempt to increase
    targeting so that a greater percentage of recipients are both
    vulnerable and have high energy burden by placing a greater emphasis
    on identifying and serving high burden households. However, many
    grantees do not have procedures in place that allow them to measure
    energy burden for LIHEAP recipients.

-   Benefit Targeting -- The program does not give significantly higher
    benefits to high burden households. The best way to increase
    targeting would be to measure energy burden for LIHEAP recipients
    and give higher benefits to households that have higher energy
    burden. However, many grantees do not have procedures in place that
    allow them to measure energy burden for LIHEAP recipients.

-   Burden Reduction Targeting -- The program does not target the
    highest burden households with the greatest level of burden
    reduction. The best way to increase targeting would be to measure
    energy burden for LIHEAP recipients and give higher benefits to
    households that have higher energy burden. However, many grantees do
    not have procedures in place that allow them to measure energy
    burden for LIHEAP recipients.

With limits on LIHEAP administrative funds, it is not clear that
grantees have the resources to make the changes that are required to
improve recipiency and benefit targeting.

### Strategies for targeting high burden households

The most direct way to target high burden households is to measure
energy burden for applicant households, give priority for awarding
grants to the highest burden households, and furnish higher benefits to
higher burden households. However, given the current structure of the
LIHEAP program, there are important barriers to the implementation of
such a system. First, a number of LIHEAP programs operate on a
continuous basis during the heating season, that is, they give grants to
households as they apply, making it difficult to prioritize applications
for benefits. Second, only a few grantees have mechanisms in place that
allow them to assess the energy burden for households. While some
grantees obtain information from energy suppliers regarding the
household's energy bill in the last 12 months, most grantees believe
that such a system would be too costly to implement.

However, this evaluation study furnishes information that suggests a
strategy to move the program in the direction of furnishing higher
benefits to higher burden households. The study shows that the single
most important indicator of energy burden is income, rather than the
household's energy bill. By giving priority to the lowest income
households and giving higher benefits to lower income households,
grantees would, in most cases, improve their targeting to high burden
households.

### Usefulness of LIHEAP targeting performance measures

The LIHEAP program assists low income households in meeting their
immediate home energy needs. The LIHEAP statute mandates that grantees
furnish the highest level of assistance to those households that have
the lowest incomes and the highest energy costs or needs, in relation to
income, taking into account family size. The national LIHEAP performance
goals under GPRA focus on "increasing the availability of LIHEAP fuel
assistance to vulnerable and high energy burden households whose health
and/or safety are endangered by living in a home without sufficient
heating or cooling." The current performance goals are:

-   Increase the percent of LIHEAP recipient households having at least
    one member age 60 years or older.

-   Increase the percent of LIHEAP recipient households having at least
    one member age 5 years or younger.

-   Increase the percent of LIHEAP recipient households having the
    lowest income and highest energy costs.

Previous evaluation studies have examined the performance of the LIHEAP
program in meeting the first two performance goals outlined above.
However, prior to this evaluation study, research had not been conducted
on performance with respect to the goal of serving households with the
lowest income and highest energy costs. The study shows that the
majority of nonvulnerable households served by the program have high
home energy burdens. Therefore, all three goals are important and are
complimentary, and a failure to measure information on energy burden
would push the program in the direction of serving vulnerable households
at the expense of high burden households.

This evaluation study also measured benefit and burden reduction
targeting indexes at the national level for the first time. The study
shows that these are important targeting measures that OCS should
consider adding to the LIHEAP performance plan. While the evaluation
study shows that the LIHEAP program is effective in targeting receipt of
LIHEAP benefits to high burden households, it is not as effective in
furnishing the highest level of benefits to the recipients with the
lowest gross household incomes and the highest energy needs. High burden
households receive benefits that are only slightly higher that the
average for all LIHEAP recipients and have a lower average reduction in
energy burden than other recipient households. The benefit targeting
index and the burden reduction targeting index help to quantify the
extent to which the highest benefits are targeted to those low income
households with the highest energy needs and allow the LIHEAP program to
set goals for improving the targeting of program benefits.

### Data for LIHEAP performance measurement

Computation of the LIHEAP performance measures used in this evaluation
study -- the recipiency targeting index for high burden households, the
benefit targeting index, and the burden reduction targeting index --
require OCS to have a data source with the following items available:

-   LIHEAP recipiency

-   Household demographic characteristics

-   Household income

-   Residential and home energy costs

-   LIHEAP benefits

There are two data sources that could potentially furnish these data
items -- annual state administrative reports and the periodic
Residential Energy Consumption Survey. Each of these requires a special
supplement to furnish the required data.

-   State reports: In order for the states to furnish these data as part
    of their annual LIHEAP reports, they would need to collect
    information on energy expenditures for recipients from energy
    suppliers. A number of states, including Maine, Wisconsin, and
    Washington, have procedures in place to capture these data. However,
    most states do not collect these data as part of their information
    processing systems.

> *The alternative of increasing requirements for annual state reports
> is not recommended. Most states do not have a system in place that
> could capture and report on LIHEAP recipient energy expenditures. It
> is expected that the costs of implementing such a system for all
> states would be considerably more expensive than the RECS
> alternative.*

-   RECS: In order for the RECS to furnish these data, it must include a
    supplemental sample of LIHEAP recipients. As part of the supplement,
    data on LIHEAP benefits must be obtained from state administrative
    records.

> *The 2001 RECS LIHEAP Supplement successfully met the targeting
> information requirements for 2001. The next RECS survey will be
> conducted in 2005. A LIHEAP Supplement is planned for the 2005 RECS.*

The RECS Supplemental sample could be modified to furnish additional
data for LIHEAP performance measurement while reducing the variance of
estimates for LIHEAP recipient households and updating performance
measurement findings annually.

-   Energy data collection: As part of the RECS survey implementation,
    energy data for an additional sample of LIHEAP recipients could be
    gathered as part of the RECS Energy Supplier Survey.

-   Energy data updates: As a follow-up to the 2005 RECS, energy data
    could be gathered for responding households annually.

The evaluation study finds that LIHEAP performance measurement should
include measures of targeting to high burden households, as well as
measure of benefit and burden reduction targeting. The evaluation study
further finds that the RECS LIHEAP supplement is required to develop
these targeting performance measures. Finally, it recommends enhancing
the RECS Supplemental sample to increase the sample size and increase
the frequency of the data collection, thereby further improving these
performance measures.

# Appendix A: 2001 Residential Energy Consumption Survey {#appendix-a-2001-residential-energy-consumption-survey .unnumbered}

Appendix A provides information on how home energy burden estimates were
derived from the 2001 Residential Energy Consumption Survey (RECS). The
following topics are covered in this Appendix.

-   Description of RECS.

-   Strengths and Limitations of RECS data.

-   Estimates of energy burden.

    Appendix B provides information on how home energy burden estimates
    were derived from the 2001 RECS LIHEAP Supplement.

## Description of RECS

RECS is a national household sample survey that provides information on
residential energy use. It has been conducted by the Energy Information
Administration (EIA) of the U.S. Department of Energy since 1978. It is
designed to provide reliable data at the national and Census regional
level. RECS includes information on energy consumption and expenditures,
household demographics, housing characteristics,
weatherization/conservation practices, home appliances, and type of
heating and cooling equipment. Currently, this survey is conducted every
four years.

The survey consists of three parts:

-   EIA interviews households for information about fuels used, how
    fuels are used, energy-using appliances, structural features,
    energy-efficiency measures taken, demographic characteristics of the
    household, heating interruptions, and receipt of energy assistance.

-   EIA interviews rental agents for those households whose rent
    includes some portion of their energy bill. This information
    augments information from those households that may not be
    knowledgeable about the fuels used for space heating or water
    heating.

-   After obtaining permission from respondents, EIA mails
    questionnaires to their energy suppliers to collect the actual
    billing data on energy consumption and expenditures. This fuel
    supplier survey eliminates the inaccuracy of self‑reported data.
    When a household does not consent or when fuel consumption records
    are unusable or nonexistent, regression analysis is used to impute
    missing data.[^20]

The 2001 RECS is the eleventh survey in the series of surveys.[^21] For
the 2001 RECS, approximately 4,822 households were interviewed in the
core sample. In addition, a supplemental sample of 496 LIHEAP recipient
households was interviewed for the first time as part of the RECS.[^22]

## Strengths and limitations of RECS data

RECS provides the most recent, comprehensive data on home energy
consumption and expenditures. The strengths of using RECS to derive home
energy estimates are as follows.

-   RECS uses a representative national household sample, providing
    statistically reliable estimates for all, non low income, and low
    income households.

-   The 2001 RECS included a supplemental sample of LIHEAP recipient
    households that is representative of the population of LIHEAP
    heating and cooling assistance recipients.

-   RECS includes use of all residential fuels.

-   Energy suppliers provide information on actual residential energy
    consumption and expenditures of RECS sample households.

-   Regression analyses of RECS data provide estimates of the amounts of
    fuels going to various end uses, including home heating and cooling.

While the updated 2001 RECS data provide the most current and
comprehensive data on residential energy use by low income households,
several significant limitations must be addressed:[^23]

-   The household is a basic reporting unit for RECS and LIHEAP. RECS
    employs the Bureau of the Census\' definition of household, i.e., a
    household includes all individuals living in a housing unit, whether
    related or not, who (1) share a common direct access entry to the
    unit from outside the building or from a hallway, and (2) do not
    normally eat their meals with members of other units in the
    building. A household does not include temporary visitors or
    household members away at college or in the military. LIHEAP defines
    a household as one or more individuals living together as an
    economic unit who purchase energy in common or make undesignated
    payments for energy in their rent. Some variation in the count of
    households, particularly those containing renters or boarders, may
    result from the difference in definitions.

-   Households are asked to report gross income for the last twelve
    months. While households are instructed to include income from all
    sources, it appears that households focus only on income from
    earnings and underreport income from other sources. From that
    perspective, the RECS overestimates the number of low income
    households.

-   In LIHEAP analyses conducted through 2001, households were
    categorized as LIHEAP recipients if they reported incomes at or
    below the LIHEAP federal maximum income standard and they reported
    receiving energy assistance. An analysis of the 2001 RECS LIHEAP
    Supplement resulted in a change in this procedure. All of the
    households in the sample for the LIHEAP Supplement received LIHEAP
    benefits during FY 2001. However, about 8 percent of the survey
    respondents reported annual incomes that were above the federal
    maximum standard. Since state LIHEAP programs often use one-month or
    three-month accounting periods to determine income eligibility, it
    is expected that, for a small percentage of households, annual
    income might be higher than the eligibility standard. For this study
    households in the core RECS survey are categorized as LIHEAP
    recipients if they reported receiving energy assistance. All
    households in the RECS LIHEAP supplement are categorized as LIHEAP
    recipients.

## Energy burden

Energy burden is an important statistic for policymakers who are
considering the need for energy assistance. Energy burden can be defined
broadly as the burden placed on household incomes by the cost of energy.
However, there are different ways to compute energy burden and different
interpretations of the energy burden statistics. The purpose of this
section is to examine alternative energy burden statistics and discuss
the interpretation of each.[^24]

### Computational procedures

There are two ways to compute mean energy burden for households.[^25]
The first is the \"mean individual\" approach, and the second is the
\"mean group\" approach. While these approaches appear to be similar,
they give quite different values.

Using the \"mean individual burden\" approach, energy burden is computed
as follows: First, the ratio of energy expenditures to annual income for
each household in a specified population is computed. Then, the mean of
these energy burden ratios is computed for the population.[^26] For
example, consider the situation where there are four households with
energy burdens of 4, 5, 7, and 8 percent. The mean of these energy
burdens is calculated by adding the percentages (24 percentage points)
and dividing by the number of households (four households), resulting in
a mean individual burden of 6 percent.

Using the \"mean group burden\" approach, energy burden is computed as
follows. First, total energy expenditures for households and total
annual income for households in a specified population are computed.
Then, the ratio of total energy expenditures to total income is computed
for the specified population. For example, consider the situation where
a group consists of four households that have a total income of
\$100,000 and a total energy bill of \$4,000. Dividing the \$4,000 in
total energy bills by \$100,000 in total income results in a mean group
burden of 4 percent.

Using the 2001 RECS, the mean residential energy burden for LIHEAP
eligible households using the first approach is 19.1 percent and using
the second approach is 11.8 percent. The disparity between the two
statistics is because the lowest income households spend a greater share
of their income on residential energy than do higher income
households.[^27] If the relationship between income and residential
energy expenditures is linear (i.e., a 10 percent increase in income is
associated with a 10 percent increase in residential energy
expenditures), the two statistics would be equal. However, since a
number of low income households spend a large share of their income on
energy, the relationship between income and residential energy
expenditures is not linear (i.e., a 10 percent increase in income is
associated with a considerably smaller increase in energy expenditures).
Therefore, there is a substantial difference between the two statistics.

### Statistical measures

Different \"measures of central tendency\" can be used to describe
energy burden. The most commonly used measures are the mean and the
median. As previously noted, the mean is computed as the sum of all
values divided by the number of values. The median is computed as the
value that is at the center of the distribution of values (i.e., 50
percent of the values are greater than the median and 50 percent are
less).

In the discussion of computational procedures, the \"mean individual
burden\" was examined. It is also possible to look at the \"median
individual burden.\" As noted above for LIHEAP eligible households, the
mean residential energy burden computed as the \"mean individual
burden\" was 19.1 percent. The median of the distribution of residential
energy burdens from the 2001 RECS survey was 12.6 percent. The disparity
between these two statistics is the result of the skewed distribution of
energy burden ratios.

### Data interpretations

The statistic used to describe energy burden depends on the question
being asked. Each statistic offers some data on energy burden while not
telling the whole story by itself.

The key difference between \"mean individual burden\" and \"mean group
burden\" is that the first statistic focuses on the experience of
individual households and the second on the experience of a group of
households. The \"mean individual burden\" furnishes more information on
how individual households are affected by energy burden (i.e., it
computes a mean by using each household\'s burden). The \"mean group
burden\" furnishes more information on group burden (i.e., it computes
the share of all income earned by LIHEAP eligible households that goes
to pay for energy). Both statistics are useful, though the individual
burden statistic puts more emphasis on the experience of individual
households, and the group burden puts more emphasis on the share of
group income that is used for energy.

The key difference between the \"mean individual burden\" and the
\"median individual burden\" is that the first statistic furnishes
information on all LIHEAP eligible households at the expense of
\"overstating\" what is happening to the \"average\" LIHEAP eligible
household. The second statistic furnishes information on the \"average\"
LIHEAP eligible household at the expense of disregarding what is
happening to households at either end of the distribution.

Since targeting decisions are being examined in this study, individual
household energy burdens are used in order to examine how individual
households are affected by LIHEAP targeting. In tables that compare
groups of households, mean individual burden and median individual
burden are presented.

# Appendix B: 2001 RECS LIHEAP Supplement {#appendix-b-2001-recs-liheap-supplement .unnumbered}

Appendix B provides information on how home energy burden estimates for
LIHEAP recipient households were derived from the 2001 RECS LIHEAP
Supplement. The following topics are covered in this Appendix.

-   Description of the 2001 RECS LIHEAP Supplement.

-   Strengths and Limitations of RECS LIHEAP Supplement data.

-   Estimates of energy burden.

    Appendix A provides information on how home energy burden estimates
    were derived for all households from the 2001 RECS.

## Description of the 2001 RECS LIHEAP Supplement

The 2001 RECS LIHEAP Supplement was conducted as part of the 2001 RECS.
(See Appendix A for more information on the basis RECS study
procedures.) The RECS Supplement differs from the RECS core sample in
terms of the sampling procedures and the inclusion of administrative
data.

-   Sampling procedures -- The sample for 2001 RECS LIHEAP Supplement
    was restricted to the PSUs in which the core RECS was being
    administered. Within each PSU, state LIHEAP directors furnished
    information on the number of LIHEAP recipients by ZIP code. A sample
    of ZIP codes was selected and then, with the selected ZIP code, a
    sample of LIHEAP recipients was selected.

-   Administrative data -- In addition to the information collected
    through the Household Survey and the Energy Supplier Survey,
    information also was collected from state administrative records.
    The data obtained from those records included the type and amount of
    benefits received by the household.

    The 2001 RECS LIHEAP Supplement was the first supplement to
    interview a sample of LIHEAP recipients. Previously, the RECS had
    included a low income supplement that included both LIHEAP
    recipients and nonrecipients. The 2001 RECS LIHEAP Supplement
    included 496 LIHEAP recipient households.

## Strengths and limitations of RECS LIHEAP Supplement data

The RECS LIHEAP Supplement enhances the RECS data in the following ways.

-   Recipiency -- In the RECS Supplement, LIHEAP recipiency is obtained
    directly from administrative records. This is an improvement over
    self-reports that have been shown to furnish biased estimates of the
    characteristics of LIHEAP recipient households.

-   Benefits -- In the RECS Supplement, LIHEAP benefits are obtained
    directly from administrative records. This is an improvement over
    self-reports where a significant number of respondents are unable to
    recall the receipt of benefits and the amount of benefits. In
    addition, respondent reports also might income other types of energy
    benefits.

While the 2001 RECS LIHEAP Supplement data provide the most current and
comprehensive data on residential energy use by LIHEAP recipient
households, several significant limitations must be addressed:

-   Households are asked to report gross income for the last twelve
    months. While households are instructed to include income from all
    sources, it appears that households focus only on income from
    earnings and underreport income from other sources. From that
    perspective, the RECS LIHEAP Supplement may overstate energy burden
    for LIHEAP recipients.

-   The 2001 RECS LIHEAP Supplement is a survey and is subject to
    variance in the estimates due to sampling. The true population value
    for statistics may vary from those presented in this report.

## Net energy burden

Energy burden is an important statistic for policymakers who are
considering the need for energy assistance. Energy burden can be defined
broadly as the burden placed on household incomes by the cost of energy.
However, there are different ways to compute energy burden and different
interpretations of the energy burden statistics. In Appendix A,
information is presented on alternative energy burden statistics and the
interpretation of each is discussed. In this section, the concept of net
energy burden is discussed.

Energy burden can be defined as the share of annual household income
that is used to pay annual energy bills. Energy burden is characterized
as "the percent of income spent on energy" and is computed as:

Energy Burden = 100 \* (Annual Energy Bill) ÷ (Annual Income)

For example, if a household has an annual energy bill of \$1,000 and a
gross annual income of \$10,000, the energy burden is 10 percent.

The LIHEAP program is concerned with two energy burden statistics:
residential and home energy burden, and gross and net energy burden.
Residential energy burden refers to the share of income spent on energy
for all residential uses, including home heating, home cooling or
ventilation, water heating, refrigeration, lighting, and other household
appliances. Home energy burden refers to the share of household income
spent on energy for home space heating and home space cooling.

The LIHEAP program also is concerned with gross and net energy burden.
Gross energy burden, referred to as energy burden, is defined as annual
energy expenditures as a share of annual household income. Net energy
burden is defined as the household's energy burden after the receipt of
a LIHEAP grant. Net energy burden is computed as:

Net Energy Burden = 100 \* (Energy Bill -- LIHEAP Benefit) ÷ (Annual
Income).

For example, if a household has an annual energy bill of \$1,000, a
LIHEAP benefit of \$250, and a gross annual income of \$10,000, the
energy burden is 10 percent and the net energy burden is 7.5 percent.
Net energy burden is used extensively in Section IV of the study to
examine the impact of the LIHEAP program on households.

Energy burden can be used to compare energy expenditures among
households and groups of households. For example, consider the case
where one household has an energy bill of \$1,000 and an income of
\$10,000, and a second household has an energy bill of \$1,200 and an
income of \$24,000. While the first household has a lower energy bill
(\$1,000 for the first household compared to \$1,200 for the second),
the first household has a much higher energy burden (10 percent of
income compared for the first household compared to 5 percent of income
for the second). The LIHEAP program guidelines suggest that the first
household has a greater need for LIHEAP benefits. In fact, the first
household in the example would need a LIHEAP benefit of \$500 to reduce
its net energy burden to 5 percent of income, the energy burden
experienced by the second household. Throughout this study energy burden
and net energy burden are used to compare the need for energy assistance
among groups of low income households.

In most cases, energy burden is calculated using gross annual income
(i.e., the total amount of income received by the household). However, a
number of state LIHEAP programs use net income when considering a
household's need for energy assistance. Such states may subtract income
taxes, payroll taxes, and certain work expenses from income to compute
net annual income. It might be valuable to examine energy burden
statistics developed using net annual income. However, the 2001 RECS
survey that was used for this study only collected data on gross annual
income.

# ![](media/image2.wmf)Appendix C: U.S. Census Regions {#appendix-c-u.s.-census-regions .unnumbered}

[^1]: In this regard, both the House and Senate Committees on Education
    and Labor urged that LIHEAP grantees use actual energy bills in
    determining energy burdens and designing their benefit structures
    (H. Report 103-483, Part I dated April 26, 1994, and S. Report
    103-251, April 19, 1994).

[^2]: We would like to acknowledge the useful critique that Joel
    Eisenberg, Director of Oak Ridge National Laboratory's Washington
    D.C. office provided in reviewing an early draft of this report.

[^3]: The estimates in this report are based on data collected from the
    Energy Information Administration's Residential Energy Consumption
    Survey (including the experimental LIHEAP Supplement) and the Census
    Bureau's Annual Social and Economic Supplement to the Current
    Population Survey. As with all surveys, the estimates may differ
    from actual population values because of sampling variation and
    nonsampling errors associated with the surveys. Unless indicated
    otherwise, statements in this report about the differences have not
    been subjected to statistical tests for significance.

[^4]: The statutory intent of LIHEAP is to reduce home heating and
    cooling costs for low-income households. However, information on
    total residential energy costs is more accessible and more apparent
    to LIHEAP-recipient respondents. Moreover, any reduction in home
    heating and cooling costs leads to a direct reduction in total
    residential energy costs. Therefore, this report will sometimes
    refer to the broader measure of total residential energy costs.

[^5]: In this regard, both the House and Senate Committees on Education
    and Labor urged that LIHEAP grantees use actual energy bills in
    determining energy burdens and designing their benefit structures
    (H. Report 103-483, Part I dated April 26, 1994, and S. Report
    103-251, April 19, 1994).

[^6]: The legislation also includes individuals with disabilities, but
    this study does not include those individuals due to limitations in
    the available data.

[^7]: Not all income eligible households are eligible under state
    program rules.

[^8]: These groups are not mutually exclusive. A household can be in
    both groups at the same time.

[^9]: In general, the mean (or average) is preferred to the median (or
    midpoint), as it is more informative. The mean is the sum of all
    values divided by the number of values, or what is commonly called
    the average. The median is the value at the midpoint in the
    distribution of values. LIHEAP benefits are not highly skewed (or
    distorted) variables; therefore, mean benefits are used to compute
    the benefit targeting index. Because energy burden is a highly
    skewed statistic, the median energy burden, which is less affected
    by extreme values, is used to calculate the burden reduction index.

[^10]: See Appendix A for information on energy burden computation
    procedures.

[^11]: As previously noted, the statutory intent of LIHEAP is to reduce
    home heating and cooling costs for low-income households. However,
    information on total residential energy costs is more accessible and
    more apparent to LIHEAP-recipient respondents. Moreover, any
    reduction in home heating and cooling costs leads to a direct
    reduction in total residential energy costs.

[^12]: This report furnishes point estimates that are developed from the
    2001 RECS and the 2001 RECS LIHEAP Supplement. Since these surveys
    have complex samples, special analysis procedures are required to
    develop confidence intervals for the statistics presented in this
    report. At the time that these statistics were developed, the data
    required to develop variance estimates were not available to the
    project team.

[^13]: Cushing N. Dolbeare. 2001. "Housing Affordability: Challenge and
    Context." Cityscape: A Journal of Policy Development and Research,
    (5)2:111-130. A Publication of the U.S. Department of Housing and
    Urban Development, Office of Policy Development and Research.

[^14]: Source: 2001 American Housing Survey.

[^15]: FY 2001 HHS Poverty Guidelines

[^16]: About 83.7 percent of the 5.6 million LIHEAP eligible disabled
    households also have a household member who is either 60 years or
    older or five years or younger. About 81.9 percent of the 2.8
    million LIHEAP recipient disabled households also have a household
    member who is either 60 years or older or five years or younger.
    Source: 2001 Current Population Survey, March Supplement.

[^17]: The definition of vulnerable households for the 2001 RECS is
    limited to the response categories available. This definition of
    vulnerable households is not consistent with those used by OCS in
    other documents and reports.

[^18]: The definition of vulnerable households for the 2001 RECS is
    limited to the response categories available. This definition of
    vulnerable households is not consistent with those used by OCS in
    other documents and reports.

[^19]: The number of vulnerable households is understated because the
    2001 RECS did not have information on disabled households.

[^20]: Regression analysis is a statistical tool for evaluating the
    relationship of one or more independent variables to a single
    continuous dependent variable. Formulas developed from regression
    analysis are used to predict the value of the dependent variable
    under varying conditions of the independent variable(s).

[^21]: For information about the RECS sample design, see Energy
    Information Administration, *Sample Design for the Residential
    Energy Consumption Survey*, DOE/EIA-0555 (94)/1, Washington, DC,
    August 1994.

[^22]: The data collected from the 2001 RECS are available on the EIA
    website: *RECS homepage,* Energy Information Administration, March
    9, 2004, http://www.eia.doe.gov/emeu/recs/contents.html.

[^23]: Information about the quality of RECS data is available on the
    EIA website: Energy Information Administration, March 9, 2004,
    http://www.eia.doe.gov/emeu/recs/contents.html.

[^24]: More detailed information is available in the Division of Energy
    Assistance\'s technical report, *Characterizing the Impact of Energy
    Expenditures on Low Income Households: An Analysis of Alternative
    Energy Burden Statistics,* (November, 1994).

[^25]: The mean is the sum of all values divided by the number of
    values. The mean is also referred to as the average.

[^26]: For some households, residential energy expenditures appear to
    exceed income. Elderly households living on their savings are an
    example of such households. For such households, the energy burden
    has been limited to 100 percent.

[^27]: For example, 2001 RECS households with incomes of \$10,000 or
    less had average residential energy expenditures of \$1042, while
    those with incomes between \$20,000 - \$35,000 had average
    residential energy expenditures of \$1,315. Thus, households which
    had more than twice as much income spent only 26 percent more on
    energy.