President Joe Biden's administration will make $13.5 billion available to help low-income U.S. households lower their heating costs this winter, the White House said on Wednesday.
As part of the initiative, the U.S. Department of Health and Human Services is providing $4.5 billion in low-Income Home Energy Assistance Program (LIHEAP) funding, it said in a statement.
U.S. consumers can expect to pay up to 28% more to heat their homes this winter than last year due to surging fuel costs and colder weather, the U.S. Energy Information Administration (EIA) projected in its winter fuels outlook in October.
The new funding will help Americans with heating costs and unpaid utility bills and repairs of home energy appliances that will help lower their energy costs, the White House said.
Separately, the U.S. Department of Energy will allocate $9 billion in funding from the Inflation Reduction Act to support up to 1.6 million households in upgrading their homes to lower energy bills.
About 90% of the roughly 130 million U.S. households rely on natural gas or electricity for heat. The rest use either heating oil, propane or wood for heat.
EIA forecast the average household will spend about $931 for gas heat this winter and about $1,359 for electric heat. That is a 28% increase for gas and a 10% increase for electric versus last year.
Homes using heating oil will spend about $2,354 for heat this winter, up 27% from last year, while propane users will see their costs rise 5% to $1,668, according to EIA's outlook.
Despite the big increase in cost, gas will remain the nation's cheapest source of heat.
Families are already having a hard time paying their electric and gas bills with about one in six U.S. households in arrears, according to estimates from the National Energy Assistance Directors Association (NEADA) in October.
NEADA, which represents the state LIHEAP directors, said U.S. families were about $16.1 billion behind on their utility bills.
"The rise in home energy costs this winter will put millions of lower income families at risk of falling behind on their energy bills and having no choice but to make difficult decisions between paying for food, medicine and rent," NEADA Executive Director Mark Wolfe has said.
(Reporting by Anirudh Saligrama and Akriti Sharma in Bengaluru and Scott DiSavino in New York; Editing by Andrew Heavens, Tomasz Janowski and Jonathan Oatis)