As the Government Shutdown Freezes Low-Income Assistance Funds, PUCs Can Help

Even before the shutdown, America was in an energy affordability crisis. Now, as federal assistance stalls, public utility commissions are acting swiftly to protect families this winter.

As the US federal government shutdown drags on, critical energy assistance for low-income households hangs in the balance. The Low-Income Home Energy Assistance Program (LIHEAP) — which helps over 7 million US households pay their heating and cooling bills — has seen its funding distribution come to a halt.

States typically receive LIHEAP allocations in late October or November, allowing funds to reach households by early winter. That process is now frozen just as temperatures drop. Many of the same households awaiting LIHEAP support are also facing delays in other essential benefits, such as SNAP food benefits, deepening financial strain across already vulnerable communities.

A deepening affordability crisis

Even with LIHEAP in place, one in three US households already sacrifices rent, food, or medical care to pay energy bills. RMI’s recent analysis estimates that US households collectively owe more than $21 billion in electric utility debt, underscoring the scale of ongoing energy affordability challenges.

Without LIHEAP, families face heightened risks of overdue bills, service disconnections, and the cascading health and economic consequences of energy insecurity. For many households, the loss of assistance this winter could mean losing access to essential energy services, with serious implications for health, safety, and financial stability. The stakes of not receiving this relief in this time of large need cannot be understated as vulnerable people such as children, the elderly, and those reliant on medical devices are most likely to face energy insecurity.

Public utility commissions can provide a new safety net

Public utility commissions (PUCs) have the tools — and the precedent — to respond quickly when federal safety nets falter.

On October 27, the Massachusetts Department of Public Utilities (DPU) approved a joint stakeholder request to advance and extend the state’s winter shutoff moratorium. The moratorium now runs immediately through April 1, 2026, instead of the usual November 15–March 15 period. The DPU emphasized the importance of maintaining continuity of service and helping customers stay engaged with payment plans during the funding disruption.

On October 28, the Maryland Office of People’s Counsel (OPC) petitioned the Public Service Commission (PSC) to enact a similar emergency moratorium for energy-assistance customers. The proposal includes a November 1–March 31 moratorium, a 45-day grace period after LIHEAP funds resume, and waivers of late fees, reconnection fees, and down-payment requirements.

These efforts echo what regulators did during the COVID-19 pandemic, when at least 33 states instituted shutoff moratoria. Then, as now, commissions acted with regulatory agility — using existing authorities to protect public health and prevent widespread hardship.

Why additional action is needed

Disconnection moratoria are a vital short-term safeguard, but they do not solve the structural causes of energy unaffordability. Regulators and utilities can build on these emergency responses by pairing them with long-term affordability strategies:

• Percentage-of-income payment programs (PIPPs) and low-income discount rates can stabilize energy costs relative to income. These tools are critical even when LIHEAP is fully funded, since the program reaches only about one in six eligible households.
• Arrearage management programs can help customers resolve accumulated debt and return to regular payment schedules.
• Low-income energy efficiency programs can reduce long-term costs and strengthen resilience to energy price volatility.

According to RMI analysis, a portfolio of these policies could end energy poverty in the electric sector at a net cost of about $9.3 billion nationally — a relatively modest investment compared to the cost of inaction. The tools already exist; what’s needed is coordinated deployment and sustained regulatory commitment.

From crisis response to comprehensive affordability reform

The LIHEAP shutdown is testing the limits of America’s energy safety net. But it is also beginning to spotlight how quickly state regulators can respond when families’ well-being is at stake. By combining short-term regulatory agility with long-term safeguards, PUCs can protect households through this winter’s crisis while advancing a more affordable energy system for the future.