Heating and Cooling Relief Act Proposes Major Boost to Energy Aid, Caps Bills at 3% Income, Adds Year-Round Support

The Heating and Cooling Relief Act aims to overhaul the federal program helping households manage energy costs, renaming the Low-Income Home Energy Assistance Program (LIHEAP) to simply the Home Energy Assistance Program (HEAP) and significantly expanding its scope and funding. This bill responds to findings that energy costs disproportionately burden lower-income families, forcing tough choices between heating/cooling and necessities like food or medicine (Sec 2). Key changes include removing the previous $2 billion funding cap to potentially assist all eligible households, boosting base funding starting in FY2026, and raising the income eligibility threshold to the greater of 250% of the federal poverty level or 80% of the state median income (Sec 3, Sec 6).

More Help, For More People, More Often

So, what does this mean practically? First, more households could qualify for help. The bill pushes states to ensure eligible households ideally spend no more than 3% of their income on home energy (Sec 6). It also streamlines getting help by requiring data sharing between assistance programs, simplified re-enrollment, and allowing self-attestation of eligibility when needed (Sec 6). Crucially, the bill mandates year-round program operation, recognizing that energy struggles aren't just a winter problem, especially with rising extreme heat events (Sec 7). It explicitly adds assistance during emergencies like natural disasters, extreme heat, or extreme cold, and ensures states allow funds to be used for cooling needs, including efficient AC units, without requiring proof of medical necessity (Sec 5).

Keeping the Power On and Bills Down

This legislation puts new rules on energy suppliers working with the program. Suppliers would be barred from charging late fees for six months surrounding assistance payments and couldn't shut off power for two years after a household receives aid (Sec 7). They'd also need to share data on customers behind on bills (to help states target outreach) and eventually offer low-income affordability payment plans in partnership with the state (Sec 7, Sec 9). The bill also tackles the root causes of high bills by boosting the funds states can use for weatherization and energy-related home repairs (from 15% to 25%), encouraging upgrades that cut fossil fuel use and improve efficiency, like installing electric heat pumps (Sec 8).

Smarter Systems and Future Planning

Beyond immediate relief, the Act pushes for systemic improvements. It mandates better data collection on energy payment arrears (unpaid bills), directing federal agencies to create standardized tracking and provide guidance on using program funds to clear these debts without raising rates for others (Sec 9). States get more administrative funding (up to 15%) specifically to handle the expanded year-round services and must offer online applications within five years (Sec 7). The bill also establishes 'Just Transition Grants' to help state and local governments plan ways to lower energy costs for high-use households while shifting away from fossil fuels and adapting to climate change, prioritizing projects that partner with workforce development programs (Sec 11).