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Home Energy Notebook for FY 1998, Part 2
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Low income home energy
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The section presents data on home energy trends for low income
households from 1979 through FY 1998.² Statistics are derived
from the series of national residential energy consumption surveys
and from HHS' administrative statistics. The analyses demonstrate
that since 1979 there have been significant shifts in the types
of energy used by low income households.
Home heating and cooling trends
Figure 4 demonstrates that low income households increased their
use of electricity as their main heating fuel from 10 percent
in 1979 to almost 33 percent in 1997. In contrast, households
using fuel oil as their main heating fuel declined from 20 percent
in 1979 to 10 percent in 1997. Natural gas remained the dominant
type of space heating fuel used over the 15-year period.
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² Here, low income households are defined as those
households with incomes at or below 150 percent of poverty.
Figure 4. Percent of low income households using electricity
and fuel oil as main heating fuels, 1979 to 1997
As shown in Figure 5, the most important change
in home cooling has been in the percent of households with central
air-conditioning. Low income households increased their use of
central air-conditioning from 8.5 percent in 1979 to over 30 percent
in 1997.
Figure 5. Percent of low income households using central
air-conditioning, 1979 to 1997
Trends in mean residential consumption, expenditures,
and energy burden
Low income households substantially decreased
their mean residential energy consumption between 1979 and 1983
as shown in Figure 6.³ This suggests a significant increase
in efficiency that resulted from conservation measures or actions.
From 1983 to 1990, mean residential energy consumption fluctuated
from year to year, corresponding to expected changes in heating
and cooling consumption because of changes in heating and cooling
degree days. For 1993 through FY 1998, there appears to have been
an increase in the use of energy for purposes other than home
heating and home cooling.
Figure 6. Mean residential energy consumption (in mmBTUs)
per low income household, 1979 to FY 1998
Residential energy expenditures increased rapidly between 1979
and 1985 because of fuel price increases, as shown in Figure 7.
However, since 1987, expenditures have risen only moderately.
Expenditures on heating have remained well below 1985 levels,
while expenditures on cooling and other uses rose through 1993
and have remained at about that level.
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³ The mean is the sum of all values divided by the
number of values. The mean is also referred to as the average.
Figure 7. Mean residential energy expenditures for low
income households, 1979 to FY 1998
As Figure 8 shows, mean group home energy burden declined from
about 8 percent in 1979 to about 4 percent in FY 1998, a total
of 4 percentage points. The decline in residential energy burden
from 1979 to FY 1998 was almost 6 percentage points (from about
16 percent to about 10 percent). Most of the decline in residential
energy burden is associated with a decline in home energy burden
(i.e., burden associated with home heating and home cooling) rather
than a decline in the burden associated with energy use for other
purposes (i.e., water heating, appliances, and refrigeration).
Data on aggregate residential expenditures show
that the proportion of expenditures for home energy fell from
50 percent in 1979 to 36 percent in 1998. However, the total expenditures
for home energy increased 87 percent over the same period, from
$4.5 billion in 1979 to $8.4 billion in FY 1998.
Figure 8. Mean group residential energy burden by end use
for households with incomes at or below 150 percent of the poverty
income guidelines, 1979 to FY 1998
Analysis of energy trends
Trends in energy consumption and expenditure are
dependent on factors such as energy prices, weather, and energy
efficiency. Energy prices outpaced the Consumer Price Index (CPI)
from 1979 through 1983, as shown in Figure 9 on the next page.
While the CPI increased about 37 percent, the composite average
of energy prices (a weighted average of electric, natural gas,
and fuel oil prices) increased by about 79 percent between 1979
and 1983. From 1985 through 1993, energy prices rose at a slower
rate than the CPI (i.e., at a slower rate than the cost of other
goods). In FY 1998, the composite energy price index was 221 while
the CPI was 223. The impact of energy prices on energy expenditures
resulted in low income household energy expenditures surging upwards
until 1985 even though energy consumption for these households
declined over the same period. The moderate growth in composite
fuel prices from 1985 to FY 1998 (23 percent) explains why residential
energy expenditures per low income household rose slightly during
that period.
Figure 9. Shifts in composite energy price index and Consumer
Price Index (CPI), 1979 to FY 1998
For low income households, Figure 10 shows energy consumption
for heating and cooling compared to heating and cooling degree
days from 1979 to FY 1998. As shown, heating consumption per heating
degree day declined continuously as a result of to energy conservation
efforts. In contrast, cooling consumption per cooling degree day
rose sharply over the same period because of a large increase
in the availability of air-conditioning to low income households.
Only 37 percent of low income households had air-conditioning
equipment4
in 1979, but by 1997, the number had risen to 62 percent.
Figure 10. Index of heating degree days (HDD), heating
consumption for low income households per HDD, cooling degree days
(CDD), and cooling consumption for low income households per CDD,
1979 to FY 1998
Mean group home energy burden for low income households has remained
considerably higher than the burden for all households. In 1979,
the mean group home energy burden of 8 percent for low income
households was four times higher than the 2 percent burden for
all households. In FY 1998, the mean group home energy burden
for all income households was 1 percent, while for low income
households it was almost 4 percent. So in FY 1998, the mean group
burden for low income households was still almost four times higher
than for all households.
Trends in LIHEAP
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Between 1981 and FY 1998, as shown in Figure 11
the number of federally eligible households has risen 48 percent;
however, federal fuel assistance funds have been reduced by almost
40 percent.5 As
a consequence, the percentage of federally eligible households
assisted has declined sharply from 36 percent in 1981 to 13 percent
in FY 1998. In current dollars, average winter crisis and heating
benefits per household increased until 1985 and have fallen since
then. Cooling benefits per household actually fell until 1985
and then increased sharply in 1993 and again in FY 1998. After
adjusting for inflation, the mean value of combined federal heating
and winter crisis fell from $213 in 1981 to $117 in FY 1998. Cooling
benefits fell from $129 in 1981 until FY 1998, when they rose
to $136.
The percentage of the total home heating bill
for LIEAP/LIHEAP eligible households covered by LIHEAP heating
and winter crisis benefits decreased from 23 percent in 1981 to
9 percent in FY 1998. The decrease resulted from the combination
of a larger total home heating bill and a smaller amount of assistance
benefits.
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4Air-conditioning equipment
includes electric and natural gas central air conditioners and electric
window or wall units.
5The LIHEAP household
data for 1997 and FY 1998 are preliminary estimates. Final data
were not available at the time of the Notebook's publication.
Figure 11. Number of LIEAP/LIHEAP eligible and recipient
households, 1981 to FY 1998
The mean group home heating burden for LIEAP/LIHEAP assisted households
is substantially reduced because of the LIHEAP benefits, but even
with the assistance, it has always remained about twice the burden
of all households.
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Page last updated: October 21, 2011
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