When LIHEAP Isn't Enough: What to Do When Energy Assistance Runs Out

Did LIHEAP turn you down — or did your state run out of money before your application was even read?

LIHEAP reaches fewer than 1 in 5 eligible households, so a denial is the usual outcome, not the exception — and the programs that pick up where it stops are the ones most people never hear about.

This is the follow-up to our walkthrough of energy assistance programs, which covers how to apply for LIHEAP itself. Below is what to do when that door closes: the order to act in, the programs that erase an old balance, the ones that shrink every future bill, and the help that exists even if you earn too much for LIHEAP.

Why LIHEAP Runs Out: The One-in-Five Math

LIHEAP helps about 5.5 to 6 million households a year — roughly 15% to 18% of the people who qualify.

Federal funding runs about $4 billion a year, and the need is far larger. The National Energy Assistance Directors Association estimates that 1 in 6 U.S. households is behind on an energy bill, owing about $21 billion in total. In a national survey of LIHEAP recipients, 59% said their service would have been disconnected without the grant.

Three different things can go wrong, and each has a different fix:

• Over the income line: Most states set eligibility at or below 150% of the federal poverty level or 60% of state median income. A household just above the line is denied — but other programs start exactly there. See the "too much for LIHEAP" section below.
• Missed the window: Many states open applications on a set date and close when the money is gone. If the window closed, mark the next opening date and use the utility and hardship programs below in the meantime.
• Funds ran out: LIHEAP is first-come, first-served in most states. An early application next season matters more than a perfect one.

None of these means you are out of options. It means LIHEAP was only ever the first stop.

If a Shutoff Is Days Away: Three Things to Do Today

Act before the shutoff date, not after — every protection below works better, or only works, while the power is still on.

1. Call your utility before the due date

Call the number on the bill and say you cannot pay in full. Ask for a payment plan that spreads the past-due balance over several months, an extension of a week or two, and whether a hardship or low-income program applies to your account. Utilities would rather keep an account active than disconnect it, and the person on the phone can often set up a plan the same day.

If your bill suddenly jumped and you do not know why, work through the 10-minute check for a doubled electric bill first — a faulty meter reading or a rate change is sometimes the real problem.

2. Ask for the payment plan that stops the shutoff

Many states limit winter disconnections, but the protection is usually a right to a payment plan, not a ban on shutoffs. Minnesota's Cold Weather Rule is the clearest example: from October 1 to April 30, a utility may not disconnect — and must reconnect — the heating service of a household at or below 50% of state median income, but only if the household enters into a payment agreement and keeps it. The utility cannot require more than 10% of household income toward current and past heating bills, and it must make reasonable efforts to restore service within 24 hours of an accepted agreement. Skip the payments, and the protection ends. Delivered fuels such as propane and fuel oil are not covered at all.

Your state has its own version with its own dates and income line. Ask your utility which rule applies to you, and get the agreement in writing.

3. Flag your case as a crisis when you apply for help

LIHEAP has a crisis track that moves faster than a regular application. If you have a disconnection notice, say so in the first sentence — to the LIHEAP office, to the community action agency, and to the utility. Apply through EnergyHelp.us or call the National Energy Assistance Referral line at 1-866-674-6327 to find the office that serves your address. LIHEAP never charges a fee; anyone asking for payment to process a grant is running a scam — the Department of Health and Human Services fraud hotline is 1-800-447-8477.

How to Get the Old Balance Erased

Two kinds of program erase a past-due balance outright — a one-time grant and a forgiveness plan — and you usually have to choose one.

1. A one-time hardship grant

Most large utilities run a hardship fund, usually paid for by customer donations and administered by a nonprofit. PG&E's REACH program is the best-documented example: it gives an energy credit of up to $800 toward the past-due portion of the bill, for households at or below 200% of the federal poverty level that have received a 15-day or 48-hour disconnection notice. Applications go through the Dollar Energy Fund, once per calendar year. New Jersey's version works differently: households enrolled in the Universal Service Fund are automatically put into Fresh Start, which forgives the overdue balance that existed at enrollment — but only once every five years.

To find the fund that serves your address, dial 211. The free helpline connects you with local charities and emergency funds, including the Salvation Army offices that administer many utility hardship programs.

2. A debt-forgiveness plan

If the balance is too large for a one-time grant, an arrearage management plan (AMP) forgives it a slice at a time. PG&E's AMP forgives up to $8,000: with each on-time payment of your current bill, one-twelfth of the old balance is forgiven, so after 12 on-time payments the eligible debt is gone. To qualify you must be enrolled in the CARE or FERA discount program, owe at least $500, be more than 90 days past due, and have been a customer for at least six months. Miss two payments in a row or three in the year and you are removed — the unforgiven debt comes back, and you cannot reapply for a year.

The choice matters: if your balance is under $800 and you already have a shutoff notice, the one-time grant is faster. If the balance is in the thousands, the forgiveness plan is the only route that clears it. And the two do not stack — customers enrolled in AMP cannot receive REACH.

How to Shrink Every Bill After This One

A discount and a free upgrade beat a one-time grant over a year, because they lower the bill that keeps coming.

• Income-based rate discounts: California's CARE program cuts 20% or more off gas and 30% to 35% off electricity for households at or below 200% of the poverty level; FERA gives an 18% electric discount to households just above the CARE line. Most states have a version — ask your utility for its low-income rate, not just its hardship fund. New Jersey's Universal Service Fund adds a monthly credit of at least $20 on gas or electric bills.
• Budget billing: Your utility averages your annual usage and spreads it over 12 equal payments, so winter and summer bills stop spiking. It does not lower the total, but it makes the total plannable.
• Free weatherization: The federal Weatherization Assistance Program sends a crew to insulate, seal air leaks, and repair heating equipment at no cost to income-eligible households. The Department of Energy reports that weatherized households save an average of $372 or more a year, and the program serves about 32,000 homes a year. Eligibility is generally at or below 200% of the federal poverty level or 60% of state median income. Apply through your state weatherization office — your LIHEAP office can point you to it.

When You Earn Too Much for LIHEAP

"Too much for LIHEAP" is not the same as "too much for help" — several programs deliberately start where LIHEAP stops.

• Nicor Gas Sharing Program: In northern Illinois, this Salvation Army–administered program is aimed at households earning between 301% and 350% of the federal poverty level — above LIHEAP's line by design. It pays one-time annual grants of up to $700 for the 2026–27 program year, and seniors qualify from 0% to 350%. Amounts change each program year, so confirm before you apply.
• New Jersey PAGE: The PAGE program covers households above the LIHEAP line: a single-person household can earn up to $85,455 and still qualify, against a $51,273 line for LIHEAP and the Universal Service Fund. New Jersey's own guidance is to apply for LIHEAP and USF first, then PAGE if you still need help.
• Ask for the cutoff, don't guess it: Utility discount programs and hardship funds each set their own income line, and many reach well above LIHEAP's. A household of four at 250% of poverty is over LIHEAP in most states and still eligible for several utility programs. If you are not sure where you stand, run the 20-minute eligibility screen — it checks hundreds of programs against your income and household size.

One Household, Two Routes: The Math on a $600 Past-Due Bill

The same household, the same $600 debt — the route you pick decides whether the balance disappears now or over a year.

Take a family of four in PG&E territory with a $600 past-due balance and a $240 monthly electric bill. Here is how the programs stack:

What helps	What it does	First-year dollars
CARE discount (either route)	35% off the $240 bill — $156 a month	$1,008 saved
Route A: REACH grant	Up to $800 credit wipes the $600 now	$600 erased
Route B: AMP	$50 of the $600 forgiven per on-time payment	$600 erased in 12 months
Weatherization (either route)	Free upgrades, $372 a year on average	$372 saved

Route A totals about $1,980 in the first year — the debt gone immediately, the monthly bill cut by a third, and the home itself using less energy. Route B reaches the same $1,980, but the debt clears month by month instead of at once. Either route beats paying the $600 out of pocket while the $240 bill keeps arriving in full — and both depend on one move most people skip: calling the utility and asking, by name, for CARE, REACH, or AMP.

Key Takeaway

LIHEAP was never designed to reach everyone who qualifies — it reaches fewer than 1 in 5. A denial is a signal to switch programs, not to stop asking.

If a shutoff is near, call the utility today and get a payment plan in writing. If the balance is old, ask for the hardship grant or the forgiveness plan by name. And if your income is above LIHEAP's line, check the programs built for exactly that gap — the help is there, but none of it finds you on its own.

Start with the phone call, not the application: the fastest help usually comes from the company that sends the bill.

Sources

• U.S. Administration for Children and Families — Low Income Home Energy Assistance Program (LIHEAP)
• Federal Reserve Bank of St. Louis — Energy Assistance: Programs to Reduce Utility Cost Pressures (October 2026)
• U.S. Department of Energy — Weatherization Assistance Program
• Minnesota Public Utilities Commission — Shut-Off Protection
• PG&E — Relief for Energy Assistance through Community Help (REACH)
• PG&E — Arrearage Management Plan (AMP)
• Nicor Gas — Sharing Program
• New Jersey Board of Public Utilities — Utility Assistance Programs
• Fuel Oil News — NEADA testimony on LIHEAP funding (April 2025)
• 211 — Free, confidential help finding local services

Program rules, income limits, and grant amounts change each program year and vary by state and utility. Confirm the current terms with your utility or state agency before applying. This post is general information, not financial or legal advice.