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F I S C A L I M P A C T R E P O R T

SPONSOR Wirth

ORIGINAL DATE

LAST UPDATED

01/23/08

HB 246

SHORT TITLE Low Income Energy Efficiency Programs

SB

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

$6,000.0

Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

Energy Minerals and Natural Resources Department (EMNRD)

SUMMARY

Synopsis of Bill

House Bill 246 appropriates $3,000.0 from the general fund to The Human Services Department

to augment the low-income home energy assistance program and another $3,000.0 to the New

Mexico Finance Authority to support the weatherization-energy efficiency program.

FISCAL IMPLICATIONS

The appropriation of $6 million contained in this bill is a recurring expense to the general fund.

Any unexpended or unencumbered balance remaining at the end of FY09 shall revert to the

general fund.

SIGNIFICANT ISSUES

This additional funding could allow HSD to serve over 20,000 additional LIHEAP households at

the current average benefit of $140 (based on $19 per point); or HSD could increase the average

benefit. Another alternative is to use all or a portion of these funds for a special bulk fuel

project. The current bulk fuel project began October 1, 2007 and is expected to run for one year

or until funding runs out. LIHEAP participants that heat their home with bulk fuels such as

House Bill 246 – Page

2

propane, wood, wood pellets fuel oil or coal are eligible for an additional $300. HSD, through

HELP New Mexico is using carry-forward federal funds from FFY 2007 to provide this extra

benefit because of increased costs for these fuel types (sometimes as much as 27% increase from

last year). These carry-forward funds accrued when HSD used the SFY 2007 state funds

provided by the Legislature for most of the SFY 2007 LIHEAP benefits.

Energy and Minerals notes that providing weatherization services is critical to reducing energy

expenditures for low income households. According to Oak Ridge National Labs’ Joel

Eisenberg, low-income families spend 15 percent of their income on energy, compared to three

percent for the average family. Savings follows waste, thus those who consume large amounts of

energy have great energy efficiency potential. Eisenberg recommends targeting high burden,

high usage households, which are those whose energy bills exceed $2600 per year. Key are

energy audits, when performed by trained diagnosticians, to get cost effective weatherization and

energy efficiency improvements installed in low-income families’ homes. Without

weatherization services, low income families will continue to pay high energy bills and need

continuing home heating utility assistance.

On weatherization, according to the NM Mortgage Finance Authority, 118,000 New Mexico

households are eligible to receive weatherization assistance, yet only one percent per year

receives assistance.

MW/bb