The End of LIHWAP (Low-Income Household Water Assistance Program)?

By Rita Moore and Stacey Isaac Berahzer

The Low-Income Household Water Assistance Program (LIHWAP) emerged as a pivotal but temporary initiative to aid low-income households with their water, wastewater, and stormwater bills. This historic program was the first federal program of its kind to assist with water bills, and was created in the wake of the COVID-19 pandemic. Funding for the program came from the Consolidated Appropriations Act of 2021 allocations, amounting to $638 million, coupled with an infusion of 500 million from the American Rescue Plan of 2021[1]. What would its termination now mean?

 

What Might a Permanent LIHWAP Look Like?

If LIHWAP did not end, how might it look as a permanent program? To help answer this question, this spring, IB Environmental (ibE) joined with five other entities specializing in water policy, finance, and specifically affordability, to co-author The Low-Income Water Customer Assistance Program (LIWCAP) Assessment. This paper analyzed the administrative landscape and pathways that a more permanent low-income water assistance program could take. It outlined the relative merits of patterning a permanent water assistance program after existing assistance programs (or coupling a water program with an existing assistance program). The image below shows the administrative pathways that the project team considered.

 

Alternative Administrative Pathways

 

Each of the five pathways were evaluated based on the following attributes:

Benefits

  • High participation

  • Low administrative burden on customers

  • Benefits for hard-to-reach customers

  • Ensures application of funds to water/wastewater accounts

  • Equal benefits across customers, communities, and states

  • Flexibility for local needs

Administration

  • Low administrative cost for utilities

  • Accessible to small utilities with low organizational capacity

  • Low administrative cost for federal/state agencies 

Some draw conclusions, but the objective of this report was, well … to be objective – and no specific one of the five pathways was prioritized as the “winner” by the project team. While the different project partners focused on different areas of the report, ibE's focus area was LIHWAP. As the inaugural federal water assistance program, LIHWAP is administered by the Office of Community Services (OCS) under the Department of Health and Human Services (HHS). The OCS also rolled out the LIHWAP Data Dashboard - a dynamic tool powered through ARCGIS with quarterly updates regarding amount of money obligated, number of households served, number of water service provider agreements signed, etc.

 

Should LIHWAP End?

Perhaps the answer to this question lies partly in the level of need, and partly on how successful LIHWAP has been. In terms of the level of need, the report states that “the number of water-burdened households in the U.S. ranges from an estimated 7.5 to 21.3 million, depending on how water burden is defined. Between $2.4 and $7.9 billion in annual water bill assistance would be required to eliminate these burdens for households that are direct or indirect customers of water utilities. These figures do not consider the substantial number of economically challenged households who face increasing costs of private well and/or septic systems.” While numbers are hard to pin down for something like this, there seems to be a significant need.

In terms of LIHWAP’s success, six months after that report's initial release and four additional “quarters” of data later, let’s briefly examine the rest of the LIHWAP rollout. As of June 30, 2023, the national LIHWAP program spans 54 states/territories, and 82 tribal communities. The program has served over 1.1 million households in paying their water and wastewater bills. It hit this “1 million plus” milestone during the quarter that ended on June 30th, 2023. $978.7 million has been obligated out of the total reservoir of $1.1 billion awarded.

Zooming in on one state, we provided some information on Georgia’s approach to LIHWAP a year ago. Georgia was initially funded $37,173,132 ($16,332,659 from the American Rescue Plan, and $20,840,473 from the Consolidated Appropriations Act). Zooming in further to one utility, Georgia’s Douglasville-Douglas County Water and Sewer Authority saw LIHWAP assist over 1,300 families with over $500,000 over the last two years.

 

A Quick Sidenote on ”Additional Funding”

The recent LIHWAP dashboard update, and conversations with the state’s LIHWAP administrator, confirmed that Georgia is one of only eight states/territories[2] that received an increase in total awards. States that were having problems using all their money were invited to return those funds, while states that had used 75% or more of their original allotment were invited to apply for these voluntarily-returned funds. Low-income Georgia water customers, within participating utilities, benefited from $4,321,846 in water financial assistance from these additional funds. These states that were “winners” in the reallocation process saw an average of 11.5% more than their total award. [3]

 

Wrapping Up

While this blog first mentioned LIHWAP in the spring of 2021 as part of “Getting Ready for Temporary Increased in Water Finance,” the program comes to an end this month (September 2023). Eighty-nine grantees (states and tribes) will have a few more months to spend their funds, but, in states like Georgia that does not need a “no-cost extension” to spend the money, LIHWAP ends.

One utility director put it this way: “it has been a great tool to help those in need in our community, and now we are going to have to tell them it is done. Just like that, gone.” Even though from its very beginning it was designed to sunset this year, many - like this utility director - see the value in continuing LIHWAP. In fact, water affordability experts and policy wonks have been calling for a water version of the Low Income Home Energy Assistance Program (LIHEAP -the energy big sister of LIHWAP) for decades now.

 So, what’s a water utility to do now? Besides holding out hope (and contacting the relevant powers that be to stoke that hope) that a program will emerge in a permanent form, water utilities can do their own local assistance program. The industry best practice is not to “go it alone,” but partner with other local organizations in creating/administering a “customer assistance program” or “CAP.” Here you can also find a handful of profiles of CAPs in the state of Georgia. An important characteristic of the U.S. water utility sector to keep in mind for designing either local CAPs or a national program is that the vast majority of water utilities lack administrative capacity. Almost 60% of local governments that operate water/wastewater utilities have fewer than five full-time equivalent (FTE) staff. This underscores that a federal water assistance, while needed, must also be accessible to these small water utilities and their customers.

  

Here is the list of states where, after September 30, 2023 LIHWAP will no longer be accepting any applications:

  • Arizona

  • Colorado

  • Delaware

  • Georgia

  • Idaho

  • Illinois

  • Kansas

  • Kentucky

  • Minnesota

  • Mississippi

  • Montana

  • North Carolina

  • Oklahoma

  • Utah

  • Wisconsin

References:

[1] https://www.acf.hhs.gov/ocs/fact-sheet/lihwap-fact-sheet

[2] States/ territories include: America Samoa, Iowa, Kentucky, Louisiana, Pennsylvania, Virginia, and Washington, DC.

[3] This strategy redistributed resources from underutilizing regions, who saw an average decline of 35.2% in their allocation.


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Stacey Isaac BerahzerLIHWAP, HHS, Low-income, water funding, water finance, wastewater, water, water affordabilityComment