What is the Home Energy Affordability Gap?
In an effort to quantify the gap between "affordable" home energy bills and "actual" home energy bills, Fisher, Sheehan & Colton (FSC) developed a model that estimates the "home energy affordability gap" on a county-by-county basis for the entire country.

Introduced in April 2003 (using 2002 energy prices), FSC found in that initial Home Energy Affordability Gap analysis that the annual "affordability gap" reached roughly $18.2 billion and that federal fuel assistance provided through the Low-Income Home Energy Assistance Program (LIHEAP) covered just a fraction of that gap.

In April 2006 (using 2005 energy prices), FSC released the fourth annual Home Energy Affordability Gap analysis. FSC found that the shortfall between actual home energy bills and affordable home energy bills had increased to $23.2 billion, an increase of twenty-seven percent (27%) in just four years.

Actual Home Energy Bills
In addition to residential energy prices, home energy bills are a function of the following factors:
  •  Energy use intensities (by fuel and end use)
  •  Tenure of household (owner/renter)
  •  Housing unit size (by tenure)
  •  Household size (by tenure)
  •  Heating fuel mix (by tenure)
  •  Heating Degree Days (HDDs) and Cooling Degree Days (CDDs) (by county)

Bills are calculated using "energy intensities" published by the U.S. Department of Energy. The energy intensities used for each state are those published for the Census Division in which the state is located. State-specific demographic data (i.e., tenure, housing size, household size and heating fuel mix) are obtained from the most recent Decennial Census of the U.S. Census Bureau. Heating Degree-Days (HDDs) and Cooling Degree-Days (CDDs) are obtained from the National Weather Service's Climate Prediction Center on a county-by-county basis for the entire country. Energy bills are calculated using normal HDDs and CDDs. Accordingly, annual variations in temperature do not have an impact on the analysis.

Actual home energy bills include all home energy end uses, including heating, cooling, lighting, electric appliances and hot water. Fuels included in the calculation of home energy bills include natural gas, electricity, propane (LPG) and fuel oil. State price data for each fuel and end-use are obtained from the Energy Information Administration's (EIA) fuel-specific price reports.  back to top

Affordable Home Energy Bills
The "affordable burden" for home energy bills is set at 6% of gross household income for the Home Energy Affordability Gap model. This burden takes into account the total cost of shelter and the proportion of total shelter cost devoted specifically to energy.

The "affordable burden" for home heating and cooling is set at 2% of gross household income.  back to top

The Home Energy Affordability Gap
Each state's annual Home Energy Affordability Gap is calculated on a county-by-county basis. Within each county, the affordability gap is calculated for individual segments of the low-income population as follows:
  •  Less than 50% of the household Federal Poverty Level
  •  50%-74% FPL
  •  75%-99% FPL
  •  100%-124% FPL
  •  125%-149% FPL
  •  150%-185% FPL

The total Home Energy Affordability Gap for each state is then aggregated by weighting each low-income segment within each county. Other aggregations are possible and useful. In fact, Home Energy Affordability Gap data can be aggregated for any geographical area described as a list of counties or zipcodes (e.g. legislative districts and utility service territories).  back to top