At the same time, the future of a home insulation project that has so far improved more than 500 city properties hangs in the balance, as the Dunedin City Council looks for new ways to save money.
The Healthy Homes project and the Consumer Electricity Fund have been dropped from the council's pre-draft annual plan in a drive to trim about $260,000 from next year's budget.
The changes will be discussed during a two-day meeting starting today, as will an idea to reallocate the electricity assistance money to homeowners through a renewable energy fund.
The proposed new fund would offer homeowners low or no-interest loans to improve their homes' energy efficiency.
The loans would be managed through home owners' rates accounts.
Council community development team leader Rebecca Parata has advised councillors the $200,000 electricity fund had helped about 9000 families since it started nearly 12 years ago.
Losing the up-to $350, one-off grant would mean new hardship for people dealing with debt and poverty, forcing them to take loans, cut their spending, or make new demands on social services, budget advice and food banks.
Using the money to fund an alternative scheme of loans for homeowners would improve energy efficiency - but it was unlikely those who used the hardship fund would be able to use it.
The council was thought to be the only one in the country to offer such a grant, and removing it would affect about 0.2% of the proposed rates increase, she says in a report.
Anglican Family Care child and family support service manager Kathy Richards, whose organisation administers the fund, said losing the budget would mean losing the service.
The six agencies distributing the fund relied on donations and there was "no fat in the system" to keep the "safety-net" assistance going, Mrs Richards said.
Most applicants did not own their own homes and would be very unlikely to be able to get the proposed energy efficiency assistance.
Foodbanks and Work and Income assistance would inevitably come under more pressure.
"The future of the fund has been debated in the past, and it is a shame that it has come to this again.
"Electricity prices continue to go up, and there are other costs that go with it, but the fund has been an incredible support."
The fund was established in 1989, after the forced sale of the Waipori power scheme.
About $27,000 is paid to the six agencies that distribute it.
Anglican Care gets $15,000 to administer the fund and, along with each agency, gets $15 for each grant.
Time spent working with people who did not meet the grant criteria outstripped the funding the agencies received, Mrs Richards said.
The council's $62,500 contribution to the Healthy Homes subsidised home insulation scheme, which has helped insulate 545 houses - homes to more than 1300 people - since June 2007, has also been dropped from the plan.
Council community adviser Paul Coffey says the subsidy attracted significant additional funding.
It was last year part of a $496,810 suite of subsidies and its annual energy and health savings were worth more than $200,000.
Community and recreation services manager Mick Reece said the council was one of several agencies involved in the EnergySmart-led scheme.
The other agencies would have to decide their own support if the council pulled out.
