[Senate Hearing 109-340]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-340
 
 KEEPING THE ELDERLY WARM: HELP FOR SENIORS AND HIGH HOME HEATING COSTS

=======================================================================

                             FIELD HEARING

                               before the

                       SPECIAL COMMITTEE ON AGING
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                            WEST MIFFLIN, PA

                               __________

                            JANUARY 6, 2006

                               __________

                           Serial No. 109-16

         Printed for the use of the Special Committee on Aging



                    U.S. GOVERNMENT PRINTING OFFICE
26-546                      WASHINGTON : 2006
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                       SPECIAL COMMITTEE ON AGING

                     GORDON SMITH, Oregon, Chairman
RICHARD SHELBY, Alabama              HERB KOHL, Wisconsin
SUSAN COLLINS, Maine                 JAMES M. JEFFORDS, Vermont
JAMES M. TALENT, Missouri            RUSSELL D. FEINGOLD, Wisconsin
ELIZABETH DOLE, North Carolina       RON WYDEN, Oregon
MEL MARTINEZ, Florida                BLANCHE L. LINCOLN, Arkansas
LARRY E. CRAIG, Idaho                EVAN BAYH, Indiana
RICK SANTORUM, Pennsylvania          THOMAS R. CARPER, Delaware
CONRAD BURNS, Montana                BILL NELSON, Florida
LAMAR ALEXANDER, Tennessee           HILLARY RODHAM CLINTON, New York
JIM DEMINT, South Carolina
                    Catherine Finley, Staff Director
               Julie Cohen, Ranking Member Staff Director

                                  (ii)




                            C O N T E N T S

                              ----------                              
                                                                   Page
Opening Statement of Senator Rick Santorum.......................     1

                                Panel I

Wade F. Horn, Ph.D., assistant secretary for Children and 
  Families, U.S. Department of Health and Human Services, 
  Washington, DC.................................................     2
Margot Anderson, director of the Office of Energy Markets and End 
  Use, Energy Information Administration, Washington, DC.........    12

                                Panel II

William F. Hecht, chairman and CEO, PPL Corporation, Allentown, 
  PA.............................................................    34
Jimmy Staton, senior vice president-Operations Dominion Delivery.    49
Fred Griesbach, state director, American Association of Retired 
  Persons........................................................    64
Major Deborah R. Sedlar, program secretary, Salvation Army 
  Divisional Headquarters, Pittsburgh, PA........................    75
Estelle Richman, secretary of Public Welfare, Commonwealth of 
  Pennsylvania, Harrisburg, PA...................................    83

                                APPENDIX

Prepared Statement of Senator Rick Santorum......................    97

                                 (iii)

  

 
 KEEPING THE ELDERLY WARM: HELP FOR SENIORS AND HIGH HOME HEATING COSTS

                              ----------                              --



                        FRIDAY, JANUARY 6, 2006

                                       U.S. Senate,
                                Special Committee on Aging,
                                                  West Mifflin, PA.
    The committee met, pursuant to notice, at 9:30 a.m., at the 
West Mifflin Municipal Center, 3000 Lebanon Church Road, West 
Mifflin, PA, Hon. Rick Santorum, presiding.

           OPENING STATEMENT OF SENATOR RICK SANTORUM

    Senator Santorum. Good morning, and let me welcome all of 
those in attendance here this morning, and in particular let me 
thank our witnesses from Washington and across the Commonwealth 
for coming here this morning to talk about an important issue, 
an issue that actually has attracted a lot of attention over 
the last several months as we have been experiencing, as you 
know, a dramatic spike in energy prices and its impact. As we 
look out on a cold, wintry day here in Pittsburgh, we could not 
have picked a better setting for this hearing.
    The effects of these high prices has really caused a lot of 
debate and discussion in Washington about what we can do to 
help those particularly on fixed income and lower incomes to 
meet their energy needs, to keep themselves and their families 
warm through these cold winter months here in the northern 
climes of the United States. The Aging Committee has been 
looking at this. This is an issue that disproportionately 
affect seniors and one that--depending on who you believe, we 
have the second or third largest per capita population of 
seniors here in Pennsylvania--this is an issue that 
dramatically affects Pennsylvania. The Aging Committee held a 
hearing about this last summer when there was concern at that 
time with natural gas prices in particular spiking, that there 
would be a crisis this winter with respect to keeping people 
warm through these winter months, and then with the events of 
Hurricane Katrina things were exacerbated even more. We are now 
faced with a problem of greater proportion than we anticipated. 
The Congress has acted to some degree. We did provide some 
additional funding for the Low Income Energy Assistance Program 
in the appropriations process. We attempted to provide more 
relief in what is called the reconciliation bill, which was a 
package that was put together to actually reduce spending 
overall, but included in that spending reduction bill that came 
out of conference was a provision to provide more money for 
low-income energy assistance, $2 billion immediately and long-
term that was going to provide a stable source of funding for 
low-income energy assistance, tying lease revenue from the sale 
of leases in the North Slope of Alaska for oil exploration. A 
percentage of that would have gone in a mandatory way--in other 
words, it would have been tied to providing increased money for 
low-income energy assistance. Unfortunately, the provision was 
defeated in a procedural move on the floor of the U.S. Senate, 
and as a result all of the benefits that attach to ANWR were 
stripped out, including the low-income energy assistance money 
and the long-term dedication of funding for that program.
    There may be an opportunity, and I certainly hope that 
there will be one next year, to resurrect that and hopefully 
get a stable source. Right now there is no source of funding 
for the low-income program. It is simply appropriated money out 
of the general fund. To have a source of revenue for money on 
top of what we already put forward I think would be a very 
beneficial thing and something that certainly I will work 
toward.
    You did not come here to listen to me, although hopefully 
somewhat to listen to a few things I had to say, but I came 
here to listen to our panelists who are here, and I want to 
thank all of our panelists, but in particular let me thank our 
representatives from the Federal Government here. Dr. Wade 
Horn, who is someone who I work with probably--I won't say 
maybe as much as anybody in the Administration, but certainly 
work with a lot in the Administration, in his role in helping 
those who are less fortunate among us, and we have worked 
together on a variety of things with respect to intercity 
programs that Wade has been involved in, trying to strengthen 
the family, the President's faith-based initiatives, a whole 
laundry list of things that Wade has been active on and 
involved. He is, in my opinion, one of the bright lights of the 
Administration. I want to thank you, Wade, for being here this 
morning. Your official title--and I am not real good with 
Administration titles--but it is assistant secretary for 
Administration and for Children and Families over at HHS. So 
Wade, thank you for being here.
    Margot Anderson, her title is the director of the Office of 
Energy Markets and End-Use at the Energy Information 
Administration, and I want to thank you for coming and sharing 
your thoughts with us, and we can proceed.
    Dr. Horn, thank you for being here.

   STATEMENT OF WADE F. HORN, PH.D., ASSISTANT SECRETARY FOR 
  CHILDREN AND FAMILIES, U.S. DEPARTMENT OF HEALTH AND HUMAN 
                    SERVICES, WASHINGTON, DC

    Mr. Horn. Thank you very much, Senator Santorum, for 
inviting me. I particularly appreciate the kind words that you 
just said. If my parents were here----
    Senator Santorum. They are not? I thought they were here.
    Mr. Horn [continuing]. My father would appreciate those 
words and my mother would have believed them. I appreciate the 
opportunity to appear before you today to talk about the Low 
Income Home Energy Assistance Program and how it provides 
assistance to millions of Americans in helping them meet the 
cost of home energy and heating. The Low Income Home Energy 
Assistance Program, known as LIHEAP, grew out of a series of 
emergency programs generated by the energy crisis of the late 
1970's. Today LIHEAP continues to help ensure that low-income 
families and individuals have adequate home energy through a 
Federal-State partnership to provide States with the 
flexibility they need to design the best program approaches to 
meet consumer needs.
    For the past several years, almost 5 million households per 
year received LIHEAP assistance to help get them through the 
winter months. The program also provides cooling assistance to 
about 400,000 households and weatherization assistance to about 
90,000 more. The receipt of a LIHEAP benefit not only means a 
warm home, or sometimes a cool one, but also often means the 
difference between a family staying in their home or having to 
move, with all the disruption that that entails. Likewise a 
LIHEAP benefit can help make it possible for the elderly to 
stay in their homes. The recently enacted Labor-HHS 
appropriations bill provides almost $2 billion for the LIHEAP 
block grant program, and an additional $181 million for 
emergency contingency funds for fiscal year 2006. To date 
Pennsylvania has requested and received $95.1 million of their 
block grant funds for this year.
    I am also very pleased to announce that yesterday we 
released $100 million of the emergency funds made available in 
the Labor-HHS appropriations Act. Pennsylvania's share of that 
release was nearly $7.7 million. A total of $101.5 million in 
emergency funds remain available for this fiscal year.
    LIHEAP block grant funds are allocated to States based on a 
formula using the State's low-income population, home energy 
expenditures by low-income households, and weather conditions 
substantially weighted toward cold weather. The LIHEAP grantees 
may set their eligibility level to address families with 
incomes as low as 110 percent of their poverty level, as high 
as the greater of 150 percent of the poverty level, or 60 
percent of State median income. Pennsylvania has set its 
eligibility rate for its heating assistance program at 135 
percent of poverty in fiscal year 2005. Legislative changes in 
1994 made it possible for grantees to look less at absolute 
income levels and more at need. In setting eligibility levels, 
States may, for example, give priority to households that have 
greater energy need because of age, for example, or health, and 
we, in fact, encourage States to target their programs to the 
more vulnerable low-income individuals in their communities, 
particularly households with elderly persons or with young 
children.
    In March 2004, the Census Bureau current population survey 
data showed that 35 percent of households receiving LIHEAP 
heating assistance had at least one person 60 years of age or 
older; 47 percent had at least one person with a disability, 
and 22 percent included at least one child 5 years of age or 
younger. However, the data shows that the Mid-Atlantic, East 
North Central and West North Central areas of the country 
reported that the elderly are being served by the LIHEAP 
program at a lower rate than the national level. To address 
this issue, over the last 2 years the Administration has 
conducted an outreach program with LIHEAP brochures in both 
English and Spanish to help inform communities about energy 
assistance available to low-income older Americans. So far we 
have distributed more than 67,000 brochures to organizations 
across the country, with 53 percent of the brochures targeted 
to community-based organizations serving the elderly.
    In Pennsylvania, the Department of Public Welfare works 
with area agencies for seniors across the State to get the word 
out about LIHEAP with outreach and application materials. In 
fiscal year 2004, which is the most recent year for which we 
have data available, DPW here in Pennsylvania authorized 
regular LIHEAP heating assistance for approximately 105,000 
households with an elderly member over the age of 60, 
representing 31 percent of all heating payments made by the 
State. Pennsylvania also provided crisis benefits for such 
incidents as impending shutoffs to more than 23,000 elderly 
households, representing 23 percent of all crisis payments.
    We are continually impressed by the resourcefulness of 
State and local agencies in using LIHEAP funds to provide 
meaningful help to families facing a home energy crisis. These 
workers in the front lines generally resolve or avert crises by 
telephoning the energy vendor who maintains or restores 
services based on an assurance that LIHEAP benefits will be 
paid, and this, of course, is important during these cold 
winter months to help ensure that the elderly, in particular, 
stay safe and healthy.
    In conclusion, I want to assure the Committee that this 
Administration is committed to the LIHEAP program. We at the 
Department of Health and Human Services are working actively 
with our State partners to ensure that LIHEAP funds are 
targeted to America's most needy families, including our 
elderly citizens, so they can maintain a healthy temperature in 
their homes.
    Thank you again for the opportunity to appear before you, 
and I particularly thank you for your steadfast leadership and 
support for the LIHEAP program.
    [The prepared statement of Mr. Horn follows:]

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    Senator Santorum. Thank you very much, Wade.
    Margot.

STATEMENT OF MARGOT ANDERSON, DIRECTOR OF THE OFFICE OF ENERGY 
    MARKETS AND END USE, ENERGY INFORMATION ADMINISTRATION, 
                         WASHINGTON, DC

    Ms. Anderson. Thank you, and I, too, appreciate the 
opportunity to appear before you today to discuss the outlook 
for energy prices and heating expenditures and to examine their 
impact on the elderly population. The Energy Information 
Administration is an independent statistical and analytic 
agency within the Department of Energy. We are charged with 
providing objective, timely and relevant data analysis and 
projections for the Congress, the Administration and the 
public. We do not take positions on policy issues, but we do 
produce data and analysis forecasts that are intended to assist 
policymakers in their deliberations. As it is for all 
Americans, direct energy expenditures for the elderly, defined 
in this testimony as those age 65 and over, is a combination of 
energy cost for running the household, such as heating and 
cooling, and energy cost for transportation fuel. There are 
also indirect expenditures embodied within the energy component 
of the costs for goods and services, but this testimony focuses 
only on the direct costs. The two major determinants for energy 
expenditures for households are energy prices and consumption 
levels. Energy prices are determined predominantly by world 
events, at least in the case of oil prices, and by domestic 
trends in the case of natural gas and electricity prices. In 
the short run, household energy consumption levels are 
determined largely as a function of weather. In the longer run, 
household consumption patterns are influenced by technology 
structure and behavioral trends as homes are constructed or 
remodeled and energy-consuming equipment is purchased.
    Consumption levels for transportation are a function of 
vehicle choice, driving behavior and other behavioral issues.
    In 2005, U.S. spot prices of crude oil and natural gas 
increased an average of 36 and 47 percent, respectively, and 
total U.S. energy demand remained flat despite a healthy 
economic growth rate of more than 3 percent. Prices for crude 
oil, petroleum products and natural gas are projected to remain 
high through 2006 due to continuing tight international 
supplies and the slow recovery from hurricane-induced supply 
losses.
    I will note that all of the numbers that I am talking about 
today are based on our December 2005 forecast. Next week, on 
the 10th of January, we will release another monthly forecast 
that will have slightly revised numbers. We are not expecting 
full hurricane recovery until late winter or early spring of 
2006, so this will continue to impact the markets. For example, 
the price of West Texas Intermediate crude Oil, which is our 
benchmark crude oil price, is projected to average $57 per 
barrel in 2005 and $63 per barrel in 2006. Regular gasoline 
prices are projected to average $2.27 when we look at all of 
2005, and $2.41 in 2006. Natural gas prices are expected to 
average almost $9.00 per thousand cubic feet in 2005 when we 
compile all the numbers for the year, and about $9.30 in 2006. 
Retail natural gas prices are always higher than the spot 
prices.
    Winter residential space heating expenditures in the winter 
of 2005 and 2006 are projected to be higher relative to the 
winter of 2004 and 2005, mostly because of these higher energy 
prices. On average, households heating primarily with natural 
gas, which is what you would find used in this region, will 
likely spend $281 or 38 percent more this winter than last 
winter. Houses heating primarily with heating oil, which is 
used predominantly in the Northeast, can expect to pay on 
average $255 or 21 percent more relative to last winter. 
Households heating primarily with propane--that is typically 
used in the Midwest--can expect to pay on average $167 more. 
These projections are based on weather forecasts by the 
National Weather Service. Should colder weather prevail, 
expenditures could be significantly higher. These averages 
provide a broad guide to changes from last winter, but fuel 
expenditures are highly dependent on local weather conditions, 
the size and efficiency of individual homes and their heating 
equipment and thermostat settings. The effects of energy 
expenditures on the elderly can be difficult to isolate because 
the elderly live in a variety of housing arrangements. Many 
live alone. Others live with elderly or nonelderly partners. 
Some live in extended households and have primary 
responsibility for energy costs, while others live in the care 
of younger household members and may have only partial or no 
responsibility for energy costs. We base these numbers on a 
household residential survey that we conduct every 4 years. 
These numbers are based on a 2001 residential consumption 
survey, and we will be updating that next year when the new 
numbers come in from the 2005 survey.
    Our data show that households consisting solely of elderly 
members use about as much energy as other households, after 
accounting for the number of household members. The elderly use 
less energy per household, but that is because they tend to 
live alone and live in smaller homes. The data show that floor 
of about $1,000 for energy expenditures as of 2001. Converting 
that to 2005 prices, that floor is about $1,200 even for the 
least energy consuming household.
    Regardless of living arrangements, the elderly still have 
transportation requirements. In contrast to household 
expenditures, the relative gap between transportation use by 
the elderly and by other types of households is quite large, 
even after considering differences in household composition. 
The elderly drive quite a bit less than members of younger 
households, although when there are two or more elderly persons 
in a totally elderly household, they tend to have two cars and 
drive almost as many miles as a one-person elderly household. 
Hence, that would translate into higher gasoline purchases.
    The amount of energy expenditures is meaningful in itself, 
but it is also useful to examine those expenditures relative to 
household income. Once again, there appears to be a floor of 
about $1,000 per household as of 2001 for household energy 
expenditures regardless of income. Applying the generally 
higher 2005 prices to 2001 consumption levels results in higher 
expenditures. The burden falls most heavily on the lowest 
income households, which are relatively more prevalent for the 
elderly than for the rest of the population. For a household 
with $15,000 or less in household income, an annual energy bill 
exceeding $1,100 has a much greater impact than a $2,000 annual 
energy bill for a household with greater than $50,000 annual 
income. To the extent energy consumption for both household and 
transportation use is different now than it was in 2001, the 
annual energy bill will be different, but adding household and 
transportation energy costs together, many low-income 
households, including low-income elderly, are now spending 10 
to 20 percent of their income on energy, which is relatively 
higher than those that are in the higher income categories.
    This concludes my testimony, Mr. Chairman, and I would be 
glad to answer any questions you have.
    [The prepared statement of Ms. Anderson follows.]

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    Senator Santorum. Thank you very much, Margot. I appreciate 
that information.
    Doctor, a couple of questions. You mentioned in your 
testimony that you noticed that the percentage of seniors here 
in this region using LIHEAP was lower and that you were 
starting an ad campaign. First off, did you do an analysis as 
to why seniors are not using the program here in Pennsylvania 
or in the Northeast as much as other areas of the country?
    Mr. Horn. As you know, under the LIHEAP program States have 
enormous flexibility to target their funds. The Federal 
Government encourages States to target those funds to the most 
vulnerable populations, but it is still a decision that is left 
up to the States. We do not have the ability to mandate that 
the States target certain populations, but we do have the 
ability to advocate the issue. Pennsylvania is not 
substantially below the national average, but as a region the 
North-Central, East Coast area tends to be lower than the 
national average, and that is why, as I have mentioned, we have 
been publishing brochures in both English and Spanish and 
distributing them through the Eldercare Locator Network that is 
administered through the U.S. Administration on Aging, and 
working in partnership with a variety of different community 
organizations to get this information into the hands of the 
elderly. However, this remains a decision that is made at the 
State level and at the local level through community action 
agencies. It is not something we can mandate that they actually 
provide services to a particular population.
    Senator Santorum. So you are suggesting that the reason it 
is lower is more likely a result of State policy and local 
policy than it is the result of any lack of awareness on the 
part of seniors?
    Mr. Horn. It is certainly not a result of inadequate 
Federal policy in the sense that Federal policy allows States 
flexibility to target these funds in the ways that makes sense 
to State governments. Again Pennsylvania is not substantially 
below the national average and we have been working with the 
State to distribute brochures, and do more effective outreach 
to the elderly. My guess is that part of the problem is related 
to the elderly who may live in remote rural areas in 
Pennsylvania and may not have access to the kind of information 
that would allow them to enroll into the program, but I think 
with more effective State outreach we could reach those elderly 
households.
    Senator Santorum. Do you have any sense of the impact of 
the campaign that you have engaged in, as to whether it is 
having an impact at all?
    Mr. Horn. It is too early to tell because it is a 
relatively new campaign for us, but we hope to be able to 
report back in the next year or so as to the impact.
    Senator Santorum. The Energy Policy Act, as you know, 
requires you to report to Congress on how LIHEAP could be used 
more effectively to prevent loss of life, and I know you are 
fulfilling that requirement right now. Do you have any thoughts 
on what you have learned up to this point?
    Mr. Horn. As you know, under the act we are required to 
consult and we are, in fact, consulting with all 50 States and 
the District of Columbia around this issue. We have been 
working in consultation with the National Energy Assistance 
Directors Association. We also have been in contact with the 
Centers for Disease Control (CDC) to bring their expertise in 
the health arena to bear on this question. We also have been 
identifying best practices through our LIHEAP Clearinghouse. 
Although we do not have any hard information yet to share with 
you, we are on track as required by the law to provide a report 
to Congress by August 2006, so you can invite me back in August 
2006 to talk to you about it.
    Senator Santorum. No one will be thinking about cold 
weather in August 2006 around here, let me assure you. Let me 
ask a question on the release of the emergency funds. You have 
suggested you released--and I think you said Pennsylvania got--
I think it was $7 million from that release. Is that money 
released the same--per the formula that is for traditional 
LIHEAP or is there a separate allocation?
    Mr. Horn. Under the law, the contingency fund can be 
released by the President at his discretion, and there are 
various ways that one can release contingency funds. Generally 
we take into account factors such as high energy costs, 
temperatures and so forth.
    Senator Santorum. On a State-by-State basis?
    Mr. Horn. Yes, and you do not have to distribute the 
contingency fund monies per a formula. You can use those monies 
to target crisis needs, and that is the purpose of the 
contingency fund. In fact, for example, after Hurricane Katrina 
hit the Gulf Coast we released about $27 million to those 
States for energy-related needs because of the impact of the 
hurricane. Yesterday we released $100 million in contingency 
funds particularly targeted to cold weather States because of 
the high energy prices and the cold weather.
    Senator Santorum. Very good.
    Margot, a couple of questions. Obviously, the concern about 
the cost of natural gas here in Pennsylvania, as you mentioned, 
that is a primary source of heat for most of our residents 
here, although obviously electricity and home heating oil is 
another factor, but primarily we are a natural gas State and we 
have seen a dramatic rise in the cost of natural gas, yet there 
is testimony all over the lot about what is causing that, and 
some have suggested that demand has been fairly flat, yet 
prices continue to go up. Any thoughts on what is the dynamic 
there if demand is really not going up very much? I think you 
said demand was flat. Why are we seeing dramatic increases in 
price?
    Ms. Anderson. Well, demand has only been relatively flat 
for total energy for the last year or 18 months. I think if you 
look back over the course of the 1990's and 2001, 2002 and 
2003, there were rather dramatic increases in natural gas 
demand as a lot of power plants converted to coal and to 
natural gas, and as new natural gas plants were constructed, 
and a lot of this has put pressure on supplies. Supplies have 
not kept up, quite frankly, with demand.
    One of the issues you have with natural gas is, of course, 
the market is mostly just a North American market and primarily 
just a U.S. market, unlike petroleum, which is a global market. 
So prices are determined by our ability to either produce for 
ourselves or purchase from Canada, from Mexico, LNG from 
Trinidad, et cetera, and so in a more constrained market where 
supply has not kept pace with demand you will see these long-
term pressures on prices. If you look at supply growth you will 
see that that has not kept pace with the large increases, in 
demand particularly due to the conversion from coal to natural 
gas over the last 10 years.
    Senator Santorum. So you do not think there is anything 
going on beyond just a pure supply and demand issue here? I 
mean, some have suggested that the markets are manipulating the 
prices and what is going on in the futures market could be a 
little bit more transparent than it is. You do not have any 
thoughts on that?
    Ms. Anderson. No, I do not.
    Senator Santorum. OK. You did mention that prices are going 
up. The question I had is are you seeing any impact on those 
prices being elevated on demand? You say demand has flattened 
out. Is that because of the increase in price or have you seen 
any conservation efforts? I mean, what is going on that is 
affecting demand right now, particularly in the natural gas 
area?
    Ms. Anderson. I think a lot of the fourth-quarter effects 
were coming from what we would call demand destruction due to 
the hurricanes, where there were simply just not a lot of 
consumers in the Gulf area using natural gas. There likely has 
been some price effect. It is very difficult to quantify in the 
short term. Sometimes those price effects will not show up till 
a quarter or two after the impact because it is just difficult 
to get the data and do the analysis, but we certainly suspect 
there is conservation going on. There is that impact due to 
price. There is probably some fuel switching, a little bit here 
and there, which is probably having an effect. We are surprised 
that we have not seen as much demand effect due to high prices 
either in the crude sector or the natural gas sector. I think 
everyone, every economist, would have expected demand to have 
shown more dramatic decreases than we have actually seen in the 
data. Part of that is attributed to a rather robust economy, so 
that while we have had these high energy prices, the underlying 
economy has been pretty strong, which, as economists would say, 
would translate into something called an income effect. If your 
income is relatively stable or increasing, as it is for some 
Americans, that would swamp a price effect.
    Over the last 10 or 20 years Americans are devoting 
relatively less of their income to energy expenditures as we 
become much more efficient in our energy use. So all of these 
factors are affecting why we are not seeing the kind of price 
effects that you might expect as gasoline prices got as high as 
they did in the last quarter of 2005.
    Senator Santorum. Do you have that information as to what 
Americans now are spending on energy as a percentage of their 
overall income versus what it was 10, 20 years ago, and--well, 
why don't you share that and then we can sort of make 
conclusions from that?
    Ms. Anderson. Total energy expenditures as a percent of 
Gross Domestic Product (GDP) declined from 8.1 percent in 1990 
to 6.0 percent in 1999 (expenditures and GDP are measured in 
2004 dollars). In 2000, total energy expenditures as a percent 
of real GDP increased to 7.0 percent then fell in 2001 to 6.8 
percent and to 6.2 percent in 2002. Since 2003, energy 
expenditures as a percent of real GDP have been increasing, 
rising to 8.5 percent in 2005. The recent increase is due in 
large part to increasing energy prices.
    Senator Santorum. What is happening in the residential 
market? Have you seen, because of the spike in natural gas here 
in Pennsylvania or in places that use a lot of natural gas, any 
move to converting to other forms of energy as a result of 
these high prices?
    Ms. Anderson. Well, we have not really seen that from our 
data at this point, but that is not likely to show up for 
months because the surveys just cannot keep pace with 
behaviors, but there are technology constraints to being able 
to do that. Not everyone can just switch to one fuel source 
versus another.
    Senator Santorum. What about manufacturers? They probably 
have a little bit more.
    Ms. Anderson. A little bit more, but sometimes they are 
locked into a single source. So we are trying to get better 
information with our survey instruments to try and figure out 
the flexibility that manufacturers, the industrial, commercial 
sectors, might have in their capability to fuel switch, but 
some of that capability just simply is not there and they are 
stuck with the fuel source that they are relying on primarily.
    Senator Santorum. Very good. Thank you both very much for 
your testimony. I appreciate it.
    If the second panel could come up, I would appreciate that. 
I do not think Secretary Richman is here, right? I do not see 
her, so we may have to proceed without her. I hate to do that, 
but she would have been our first witness.
    Secretary Estelle Richman, secretary of DPW, is scheduled 
to be here. We have not heard whether--she is probably just 
delayed, probably due to the weather, so we will move then to 
Bill Hecht, who is the chairman and CEO of PPL.
    Bill, I appreciate you making the trek across the State 
from Allentown to be with us here today and look forward to 
your testimony. Thank you, Bill.

     STATEMENT OF WILLIAM F. HECHT, CHAIRMAN AND CEO, PPL 
                   CORPORATION, ALLENTOWN, PA

    Mr. Hecht. Thank you. I am pleased to be here, Senator. PPL 
is a Pennsylvania-based company with headquarters in Allentown. 
Through our subsidiaries, we serve about five million customers 
worldwide and generate and sell electricity at wholesale in 
markets in Pennsylvania and in the western U.S. In the U.S., 
PPL serves about 1.3 million electricity customers and 75,000 
natural gas customers in Pennsylvania, primarily in the eastern 
and central parts of our State. Our utility operations have 
earned honors for customer service. PPL Electric Utilities, for 
example, has won more awards for customer satisfaction from JD 
Power Associates than any other utility in the U.S. Today's 
hearing addresses a topic of particular importance to PPL, the 
effect of higher costs for home heating on the elderly. In the 
areas of Pennsylvania that we serve, about 28 percent of the 
residents are age 65 or older. This is more than double the 
national average. The increases in home heating bills have been 
primarily driven by oil and natural gas prices. Electricity 
rates in Pennsylvania have been essentially stable for many 
years because of the way the State has deregulated the 
electricity industry. PPL's electricity rates, for example, 
have increased less than 10 percent since 2002.
    Despite greater stability of electric rates, PPL recognizes 
that high oil and gas prices may leave some customers, 
especially the elderly that are on fixed incomes, less able to 
afford electric service. PPL's utility companies offer many 
payment programs, payment options and notification services to 
help customers pay their bills and maintain service. Some are 
specifically designed for the elderly, others are available to 
all customers with a limited ability to pay, but often benefit 
the elderly. In 2006, PPL Electric Utilities will spend more 
than $26 million on programs for low-income customers in 
Pennsylvania. Over the last 2 years, PPL has increased funding 
for the programs by about 25 percent to meet growing need for 
customer assistance. One program, Operation Help, was one of 
the first utility-sponsored funds in the Nation for heating 
assistance when electric utilities created it in 1983. The 
program is funded voluntarily by PPL and by tax-deductible 
contributions from our customers and employees. Operation Help 
offers cash grants to low-income customers to help them meet 
their heating bills regardless of fuel type, including not only 
those that use electricity for space heating, but also those 
who use oil, gas, propane or other fuels that may not be 
supplied by PPL.
    Social service agencies administer the program on behalf of 
PPL and decide who receives the grants, which averaged about 
$225 for some 3,500 recipients last year. This winter, PPL is 
contributing $700,000 to Operation Help, and that is an 
increase of about 40 percent over last winter. PPL Gas 
Utilities, one of Pennsylvania's smaller gas companies, 
provides assistance for gas bill payments through the Operation 
Share program, which is similarly funded by voluntary 
contributions. Because of natural gas prices, PPL is tripling 
its Operation Share contribution this winter. In addition to 
outright grants, elderly customers who meet income guidelines 
may qualify for reduced bills through PPL's Customer Assistance 
Programs, or CAP. PPL expects to provide more than $90 million 
in CAP assistance in 2006 and has increased funding by more 
than 20 percent in the last 2 years.
    PPL Electric Utilities also provides home energy audits and 
energy conservation measures to low-income customers through 
what we call our Winter Relief Assistance Program, or WRAP. 
Customers with electric home heating have saved an average of 
10 percent on their electric bills after receiving these 
services. In the last 2 years, some 700 elderly homeowners have 
benefited from that program. While eligibility for payment 
assistance and weatherization programs is based on income, we 
have other services that are developed specifically for the 
needs of the elderly. For example, PPL will not shut off 
service for a customer having trouble paying their electric 
bill during the winter if we are made aware that there is an 
elderly resident in the home.
    We also offer a program specifically for the elderly that 
extends the due date of bills to coincide with the arrival of 
pension or Social Security checks, and elderly customers may 
designate a third party to receive late payment or shut off 
notices as an extra measure of protection. Our budget billing 
program, although not specifically created for the elderly, 
offers equal monthly payments so that those on fixed incomes 
can more effectively plan their budgets. We remain alert and 
sensitive to the needs of the elderly and all customers so we 
can adjust and expand the programs as needed. PPL works 
productively with community-based social services agencies in 
all 46 counties that we serve. We train our employees to 
recognize problems and to refer the elderly to social service 
organizations which can open doors to a wide range of services 
and other sources of assistance through area agencies on aging. 
Simply put, the elderly that may have difficulty meeting their 
energy bill payments may also have other assistance needs, and 
we can direct them.
    In closing, Senator, I would like to acknowledge your 
support and the support of Senator Specter for increased LIHEAP 
funding. Last winter, some 24,000 PPL customers received $6.3 
million in LIHEAP assistance. One-third of those customers were 
elderly. Last, I want to thank you and the Special Committee on 
Aging for convening this hearing in Pennsylvania to focus on 
the needs of the elderly in our State and across the country.
    [The prepared statement of Mr. Hecht follows.]

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    Senator Santorum. Thank you, Bill. I appreciate that.
    Next we would like to hear from Jimmy Staton, who is the 
senior vice president of Operations for Dominion Delivery.
    Thank you very much, Jimmy, for being here.

 STATEMENT OF JIMMY STATON, SENIOR VICE PRESIDENT-OPERATIONS, 
                       DOMINION DELIVERY

    Mr. Staton. Thank you. Good morning, Senator. As you 
indicated, I'm the Senior Vice President of Operations for 
Dominion Delivery, which is one of the major business units of 
Dominion Resources, Inc. Our natural gas distribution company 
in Pennsylvania is Dominion Peoples, which is based in 
Pittsburgh and serves more than 350,000 homes and businesses in 
16 counties. All of us at Dominion Peoples appreciate the 
opportunity to offer comments this morning on the rising price 
of natural gas for home heating and its impact on customers who 
are elderly or have limited incomes. We are always eager to get 
the word out about the programs available to assist those 
customers, and we hope the hearing will result in more people 
seeking that help.
    The price of natural gas Dominion Peoples buys to serve its 
customers has increased sharply this winter. This has occurred 
despite our best efforts to hold down our procurement costs. 
These measures include buying about 40 percent of our supply 
locally from western Pennsylvania production, a step that hold 
downs our transportation expenses. We are also fortunate to 
have a significant natural gas storage capacity in 
Pennsylvania. This also helps to mitigate our price swings. 
Despite these measures, we estimate the average residential 
bill will increase by more than 40 percent from January 2005 to 
January 2006. Under Pennsylvania Public Utility Commission 
regulations, Dominion Peoples earns no profit from this 
purchased gas. The cost of the fuel is simply passed along to 
customers on a dollar-for-dollar basis. Additionally, our fuel 
costs are periodically audited by the PUC.
    We are very sensitive to the impact these prices can have 
on our customers with low or fixed incomes, especially the 
elderly. We estimate that about 20 percent of our residential 
customers are age 62 or older. We offer and support of a 
variety of programs to help our low-income customers. These 
programs include the CAP program, or Customer Assistance 
Program, a special payment plan for low-income customers having 
trouble paying their bills. We recently asked the PUC for 
permission to expand the number of participants significantly 
from the currently about 10,000 customers served by this 
program.
    We also have a weatherization initiative, the Low Income 
Usage Reduction Program, or LIURP, which provides home energy 
efficiency improvements and audits. We also offer the Customer 
Assistance Referral and Evaluation Services, or CARES, program 
that matches customers with special needs such as serious 
medical conditions with appropriate assistance programs. The 
Dollar Energy Fund, which is an independent nonprofit 
organization that offers last resort assistance regardless of 
fuel source to persons on low or fixed incomes. Our customers 
make contributions to help fund the program and Dominion 
Peoples provides matching contributions and covers 
administrative costs. We also offer a Budget Billing program 
that helps customers manage their energy bills by allowing them 
to make level monthly payments. This program allows them to 
spread their winter heating costs throughout the year. Budget 
Billing is open to all customers who are not in arrears on 
their bills. We also provide special services for persons with 
needs due to age or health, including medical certification, to 
delay service termination or to restore service for patients 
with severe health issues. We also offer the Gatekeeper program 
that enables our company personnel to recognize danger signals 
in the elderly and make sure those individuals are getting the 
help that they need. We also have third-party notification, 
helping individuals who may have trouble handling their bills 
by notifying a designated third-party such as a relative, 
neighbor or a friend of an impending service termination. We 
also offer the provision of easy-to-read thermostats and large-
print bills to customers with impaired vision and interaction 
with hearing-impaired customers through telecommunications 
devices for the deaf. Additionally, we help put our customers 
in touch with government programs that can help pay energy 
bills, such as the Low Income Home Energy Assistance Program 
you have been such a great supporter of.
    Important as these programs are, they are not long-term 
solutions and many of them are approaching their limits of 
effectiveness. Expansion of some of them could result in higher 
customer rates, and it is unclear how much additional money is 
going to be available from government sources. Pennsylvania has 
certainly done its part, with Governor Rendell recently signing 
a bill committing up to $20 million in additional funds for 
fuel aid. But Congress so far has failed to expand LIHEAP 
funding for fiscal 2006. We hope Congress will make additional 
appropriations this month before many States start running out 
of fuel assistance money. Conservation can help, too, and we 
are seeing some new interest in energy efficiency due to the 
recent price increases. Ultimately, however, the best way to 
help all of our customers, including those who are elderly or 
on limited incomes, is to produce more natural gas. Within 
existing limits, producers are trying to do just that. Our 
sister company, Dominion Exploration and Production, drilled 
more than 100 new gas wells in Pennsylvania last year, 
producing an additional six million cubic feet per day. 
Dominion plans to increase its drilling activity in 
Pennsylvania by 15 percent in 2006, but to ensure adequate 
supplies we, as a Nation, must take additional steps to meet 
that goal. We must take steps to increase offshore natural gas 
production, especially from the Outer Continental Shelf. 
Congress should pass legislation allowing the States to opt out 
of the decades-old moratoria that have blocked exploration and 
production in these waters. There is no economical or 
environmental justification for maintaining such blanket 
drilling bans.
    We should also open more Federal lands for natural gas 
exploration and production, including selected portions of the 
Arctic National Wildlife Refuge in Alaska, as well as other 
Federal properties. On Federal lands already open to drilling, 
the permitting process must be improved and accelerated. The 
Domestic Petroleum Council estimates that clearing the current 
permitting backlog could increase Rocky Mountain Area natural 
gas reserves by several trillion cubic feet. We should continue 
to support construction of a new pipeline from Alaska to 
provide North Slope gas to the lower 48 States, and finally we 
should continue to promote development of facilities to bring 
additional supplies of liquefied natural gas, or LNG, into the 
United States. If we are truly serious about helping customers 
in need, our national policies must take a variety of steps to 
bring more natural gas to market. Action is long overdue.
    I thank you for the opportunity to address the Committee. I 
will be happy to answer any questions you have.
    [The prepared statement of Mr. Staton follows:]

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    Senator Santorum. Thank you, Mr. Staton. I appreciate that.
    Now it is my pleasure to introduce Fred Griesbach, who is 
the state director of the AARP. Thank you for being here to 
testify.

     STATEMENT OF FRED GRIESBACH, STATE DIRECTOR, AMERICAN 
                 ASSOCIATION OF RETIRED PERSONS

    Mr. Griesbach. Thank you for inviting us. This is a 
critical issue, and I cannot tell you how much we appreciate 
your focus on it. Yes, I really want to make four points here 
today. One is stating the obvious: Energy prices are going up. 
We heard earlier testimony--gas heat, $281 more this winter; 
oil heat, $255 more nationally. The reality is it looks to us 
in Pennsylvania like it may be worse here than nationally. PGW 
bills are estimated by the PUC to be going up over $400 this 
year and will be on average this year--average--projected to be 
$2,046. That is $400 more than it was last year, and frankly 
this is not just a blip. In 2002-2003, the average gas bill in 
PGW was $870, so we are looking at a very dramatic increase in 
Pennsylvania over a relatively short period of time, and in the 
western part of the State we heard 40 percent increases. These 
are increases that are $400 for some people. So whatever is 
going on nationally, it looks, at least to people--frankly, 
most of the folks who open up their bills, they do not know a 
BTU from--all they see is that bottom line and say, ``Oh, my 
God.''
    This is a crisis for folks in Pennsylvania, and that is the 
first point, that this is not just a blip. This has been going 
on, and it just seems to be getting worse. The second point is 
that the elderly are more vulnerable on this. Elderly people 
generally spend a greater percentage of their income on energy 
than younger people. That is a fact. However, low-income 
elderly are paying an even greater share. The average low-
income elderly person is paying 14, 15 percent of their income 
for energy, and at least a quarter of elderly people are 
paying--and this is nationally--are paying 20 percent of their 
income for energy. So this is a big deal to low-income people, 
generally. It is a very big deal to low-income elderly people.
    It is not just that it is a greater percent. They are 
changing behavior to accommodate these energies, and some of 
those changes in behavior are very, very dangerous changes. We 
have surveyed--AARP nationally surveyed folks, elderly people, 
low income; 60 percent of them had or already were trying these 
things. They are turning the thermostat down in the winter. 
They are turning the thermostat up in the summer. So they are 
living in houses that are colder perhaps than they should be, 
or warmer than they should be, depending on the season. But 
additionally--and this gets kind of scary--about 12 percent of 
them were limiting or doing without food in order to pay their 
energy bills, 11 percent limiting or doing without medical 
treatment to deal with their energy bills, 10 percent limiting 
or doing without prescription drugs to deal with their energy 
bills. We surveyed our members in Pennsylvania, and this is 
before this new kind of wave of increase, and frankly one out 
of seven, over a third, said they were having trouble paying 
their bills, and one out of seven were either skipping meals or 
skipping prescription drugs or not doing something else that 
was important for their health in order to pay their energy 
bills. So clearly it is not just that they are paying more; 
they are making choices already that are not necessarily good 
choices for their long-term health.
    The third point is, in fact, LIHEAP, and it is very 
interesting--I mean, about a third of the folks in Pennsylvania 
who are on LIHEAP are elderly people, but the problem is--and 
as you asked earlier, ``OK, well, should there be a greater 
percentage of elderly people on LIHEAP?'' There should be more 
elderly people on LIHEAP. That is absolutely true, but the 
reality is we are not serving everybody who is eligible, and 
really the one thing we do not want to do is start to force 
choices where, in order to put elderly people on LIHEAP we have 
to take somebody else who is equally deserving and equally 
needy off LIHEAP. When we talk about the increase in the bills 
this winter, that increase is bigger than the LIHEAP grant. So 
if we give everybody that we gave a grant to last year this 
year, they will still be worse off than they were last year in 
terms of their overall energy bill. So the LIHEAP issue, 
which--I mean, the State put nearly $25 million--for the first 
time Pennsylvania has put money into the LIHEAP program. I 
would love to say that AARP could take great credit for that, 
but the reality is I just think it is partly advocacy, but it 
is partly the fact that they are looking and saying, ``You know 
what? We are in deep trouble here and we have to do 
something,'' and on that level you have been a champion of 
LIHEAP, and we need a champion. When this session reconvenes, 
we need LIHEAP assistance and we need somebody to make sure it 
happens, and I am urging you and your colleagues--I know we do 
not have a defined source for it, but we have a very defined 
need for it, and we have to meet that need. If we do not, a bad 
situation in Pennsylvania and nationally is going to be worse.
    Finally--and you have nothing to do with this, but I am 
hoping maybe you could help--Pennsylvania has about 20,000 
households right now who have no heat, has about another 15,000 
who have no electricity, and it has about 4,000--these 
estimates are from the PUC--who are heating with things like 
space heaters or kerosene, which are very dangerous. We allow 
people to be shut off in the winter if their income is above a 
certain level. Given what we are looking at, at prices, when 
you get the chance perhaps and are speaking to your colleagues 
in Pennsylvania, we may need to relook at that, and I urge 
whatever you can do when you talk to them, see if you can get 
them to rethink that one. But the most important thing is that 
we need additional funding for LIHEAP, whatever you can do, and 
the fact that you are holding these hearings, I know you know 
this is important. We need you to be the champion when you get 
back.
    Thank you.
    [The prepared statement of Mr. Griesbach follows:]

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    Senator Santorum. Thank you. I appreciate that, and we have 
been and we certainly will be, and I appreciate your advocacy 
for senior's heating needs.
    Our final testimony is from Major Deborah Sedlar, who is 
the program secretary for the Divisional Headquarters of the 
Salvation Army. Thank you very much for coming and being with 
us this morning.

   STATEMENT OF MAJOR DEBORAH R. SEDLAR, PROGRAM SECRETARY, 
     SALVATION ARMY DIVISIONAL HEADQUARTERS, PITTSBURGH, PA

    Ms. Sedlar. Thank you for your invitation this morning, 
Senator. We appreciate it, and while the Salvation Army does 
not have expertise in these areas, we do have some observations 
that come from meeting with the folks who are within our 
communities. I actually represent the Western Pennsylvania 
Division of this area, and it is roughly half of the State, but 
it is 28 counties, to be precise, and our headquarters is here 
in Pittsburgh. So we are grateful that you convened here. That 
is rather convenient for us. There are some issues that come up 
when it comes to the elderly folks, and I merely want to make 
some observations to you from the Salvation Army's perspective.
    We have provided 1,320 families with energy assistance, and 
that average supplement was about $125, totaling approximately 
$165,000 in the last year. This is exclusively through 
Salvation Army units. Most of the funding is generated through 
government grants or private foundations that we have secured. 
The funding pool is decreasing annually as the need rises. Once 
the resources are depleted there really are no alternate 
funding sources, except to draw from other provisions of 
service that we have. In other words, if we are paying out 
energy bills, then perhaps we cannot assist as many people with 
food or other things that we generate. Agencies that serve as 
conduits for these funds often change annually, such as the 
FEMA funding program or the LIHEAP or the Dollar Energy. 
Sometimes the agency to which a client must go changes 
annually, so they do not know from year-to-year where to go, 
and it becomes rather confusing. Some funding sources are 
restricted to one-time use. We often have foundational things, 
criteria that hold us to just a once-in-a-lifetime use of that 
emergency funding. Transportation issues for the elderly and 
communication barriers contribute a great deal to an already 
strained system of assistance that particularly impacts these 
folks. I think about the new programs that are coming out for 
prescription benefits for many of the elderly folks. They are 
extremely confused by that, so to try and broach the idea of 
trying to get some help to pay the energy bills--I think they 
would rather stay home and be in the cold than try to do this 
on their own. Assisting this population base presents very 
unique challenges, and most seniors have a deep sense of pride 
and are often embarrassed and ashamed to ask for assistance.
    In the United States, more than 3.5 million children are 
raised by grandparents. This presents a new problem to many of 
these folks. These multigenerational homes require increased 
social services in order for these families to thrive. Heating 
is not something that can be done without when you have 
grandchildren in the house with you. Often impoverished elderly 
often have substandard and older housing units that are not 
energy efficient, and subsequently that creates increased 
higher costs, probably more so than many of the newer homes 
that are more energy-efficient. As the energy costs increase, 
so does every other cost to live. The cost for food will go up. 
The cost for any other basic need--clothing--will go up. 
Retailer costs will increase as the cost of energy goes up 
because they have to maintain their operations, as well. 
Collaborative efforts are having the most impact from what we 
can see as an agency and an organization, but that often means 
that an individual who needs assistance has to meet with a 
number of agencies in order to draw from multiple resources, 
and this becomes very confusing to an elderly person.
    So we appreciate the opportunity to speak to you today and 
certainly we commend you for your efforts and would welcome any 
help that you can give to this area for these purposes.
    Senator Santorum. Thank you very much, Major. Just to pick 
up on what you were saying, because when I was listening to the 
testimony from Bill and Jimmy I was struck by the number of 
programs that both of the companies have, and then I hear your 
testimony that this is very, very confusing for a senior. Do 
you guys have a response? Is there a way that we can help sort 
of cut through?
    Mr. Hecht. Yes. We do work with the same agencies, so the 
social service agencies that are in our communities are 
multiple--community action committees, Salvation Army, other 
charity groups. So we do work with those agencies and bring 
them together to allocate our customer assistance money. We 
also work with the agencies when we refer our consumers that 
are identified with a problem to individual agencies, so we 
know which services the different agencies provide, which 
services fit the needs of consumers when we learn what some of 
their challenges are. I did spend an afternoon a couple of 
years ago with what we call our CARES representative, or 
Customer Assistance and Referral program representative, making 
house calls, and saw firsthand that many of the consumers that 
have difficulty paying their energy bills have other 
challenges. We can help identify what they are and send them to 
the right agency, but it is true that although we have great 
benefits from private philanthropy in the U.S., at the same 
time that private philanthropy does get channeled through 
multiple agencies. That is a fact.
    Mr. Staton. Senator, I would agree. It is a fact, that it 
does come through multiple agencies. The way we have attempted 
to try to address that is on staff at Dominion Peoples we have 
two social workers as part of our CARES program and we actually 
do a casework approach, if you will, to helping our customers, 
so that we help them go through the entire process and not just 
simply refer them, because I think we have certainly seen the 
same thing. We can refer to multiple agencies but our customers 
are never going to get all of the help that they truly need.
    Senator Santorum. Do you have a comment on that?
    Ms. Sedlar. I think these gentlemen are accurate, and they 
even do a great deal within their bills to provide information 
to people who might need help and where to call and where to 
go, and that is a referral process, unfortunately, because then 
when the person calls the company, they are referred to the 
specific agency in their area and have to then make another 
call. As an older person, that is more difficult than being a 
younger person. I think the elderly also do not have the access 
to Internet, which is becoming such a thriving area. I think 
about, in terms of the Yellow Pages, it is now costing agencies 
and organizations and businesses to post their information 
within the Yellow Pages so many more are opting not to do that. 
They use Internet sources because they are economical. The 
elderly do not have that. They have the Yellow Pages that come 
to their home every year or so, and that is what they have to 
work with, so they do not have access to all of the 
possibilities that they might need, and they might give up a 
whole lot easier than a younger person might. Again, I want to 
say there is competition for the dollars, as in getting there 
first to be able to get the access to them. Once the dollars 
run out, then there is no more. If there is that type of 
competition, the elderly folks are left behind because they are 
not out there first, they are not the first to hear about it. 
They are pretty much the turtles in the race, so to speak, by 
virtue of their own person.
    Senator Santorum. Mr. Griesbach, you have a statistic here 
that caught my attention. You said lower-income older Americans 
spend an average of 14 percent of their income on residential 
energy. Do you know what that number is in Pennsylvania? Is it 
higher here, or do you have information on that?
    Mr. Griesbach. I do not know. This is a national figure.
    Senator Santorum. Right.
    Mr. Griesbach. We are trying to find out for Pennsylvania, 
but we do not know. It has not been broken down that narrowly 
yet.
    Senator Santorum. OK. In listening to the testimony from 
Mr. Hecht and Mr. Staton, I was struck with the programs that 
you have in place to be able to help those in need, and then 
particularly, Mr. Staton, you talked about the other side of 
the equation, and that is what do we do to try to drive any 
energy costs down, and even though this is a meeting on LIHEAP, 
obviously part of the equation or the need for LIHEAP is the 
fact that we have seen skyrocketing energy prices, which we 
talked about with the first panel. You mentioned something 
interesting to me, that you get 40 percent of your supply from 
Pennsylvania. I suspect that that would surprise most people in 
the room, that there is that much production of natural gas--I 
assume in western Pennsylvania--predominantly in western 
Pennsylvania. You said that new wells produce approximately six 
million cubic feet of natural gas per day. Can you give me an 
idea of what--I do not know how much six million cubic feet of 
natural gas--I mean, maybe people in the audience do, but I do 
not know what that is. I mean, how much is six million cubic 
feet? What does an average consumer use? Is it millions of 
cubic feet or thousands of cubic feet? I mean, what does that 
mean?
    Mr. Staton. Generally customers will use about 100 MCF or 
100,000 cubic feet of natural gas on an annual basis in our 
service territory.
    Senator Santorum. So you say they would use 100,000 cubic 
feet. So that is one customer?
    Mr. Staton. One customer, on average.
    Senator Santorum. Yes, so six million cubic feet does not 
sound like a lot of gas to me.
    Mr. Staton. Six million cubic feet a day.
    Senator Santorum. A day. Oh, OK. I'm sorry. A day?
    Mr. Staton. Yes.
    Senator Santorum. Well, then that is a little bit more. 
That is a little bit more. [Laughter.]
    That is six million cubic feet of additional capacity?
    Mr. Staton. Yes.
    Senator Santorum. OK. Forty percent of what you use in 
natural gas comes from western Pennsylvania. How much is that?
    Mr. Staton. In total, we deliver about--40 percent would be 
about 12 billion cubic feet.
    Senator Santorum. Twelve billion?
    Mr. Staton. A year.
    Senator Santorum. A year, OK. Is it your sense that there 
is more natural gas production capability here--I mean, a lot 
more here in western Pennsylvania?
    Mr. Staton. I would love to say that there is. Appalachian 
supplies generally are not as dramatic as, say, the Gulf Coast 
supplies. When you drill in the Gulf Coast you get huge 
benefits in a very short period of time. You do not get that 
big of a bank for the buck, if you will, but there is still 
capability in western Pennsylvania and the rest of the 
Appalachian Basin to continue to bring on additional resources. 
It is just a matter of being able to get the permits that are 
necessary to drill and to bring it to market.
    Senator Santorum. The question I have, and one of the 
concerns that I know a lot of folks have with respect to any 
kind of energy production, and that is the environmental impact 
of that. We sit here in Pittsburgh, and I guess most folks here 
would really not know very much about what are the 
environmental impacts of drilling a natural gas well. Can you 
talk about that, because I certainly know from the issue of 
offshore drilling, one of the big concerns is what are the 
environmental impacts of offshore drilling and maybe they are 
different than the environmental impacts of drilling here in 
the Appalachian Basin, but can you give us an idea of what that 
is?
    Mr. Staton. The environmental implications--in the old days 
of drilling, you ate up a lot of space, a lot of land, and you 
created a lot of disruption, if you will--arguably you created 
a lot of disruption as you drilled for natural gas or for oil. 
With the newer technologies that we have and the capabilities 
we have, we are not drilling as many holes in order to get the 
same results, if you will. So the environmental impacts have 
dropped dramatically as a result of better technology, better 
underground technology, and greater reach from single 
locations. Directional drilling, for instance, would be an 
example of where in the past you might have to drill in a 
particular area. In an acre of land or 100 acres of land, you 
might need a well per acre in order to drain the reservoir. Now 
you can do that in a much more limited space. So the 
environmental impacts have dropped dramatically, and again we 
are caretakers of the environment as we drill, and when we are 
done drilling, restoring the land to where it needs to be has 
become a much greater effort.
    Senator Santorum. A couple of other things that you 
mentioned I just want to go through to talk about the impact. 
You mentioned the permitting process. Is there something that 
you believe Congress can do to deal with that permitting 
process? What is the complication here?
    Mr. Staton. Let me give you an example. As Margot indicated 
earlier, the natural gas market is a national market and the 
prices are driven by national supply and demand. Dominion 
currently drills on Bureau of Land Management property in Utah, 
and that would be a good example. We have plans to drill, in 
2006, 75 wells in Utah. Each of these wells will cost us about 
$1 million and will produce about a million cubic feet of gas 
per day. Currently we only have 33 drilling permits in hand in 
order to be able to do that, and the process--again, we have 75 
prospects, but only 33 permits. The process is taking now 7 to 
8 months to get these permitted for a process that should only 
take a couple of weeks. I would point out when we make the 
application, all of the environmental work has been done 
beforehand, and so the process should be streamlined. The 
Energy Policy Act of 2005 gave BLM additional funding and 
broader new authorities to eliminate their backlog of permit 
applications. We have committed a significant amount of capital 
and other resources. We would just like to see the BLM do their 
part, and we do believe that with some pressure from Congress, 
the BLM will do what they were permitted to do in the Energy 
Policy Act.
    Senator Santorum. On the first panel, Margot mentioned and 
you reiterated that this is a national price as opposed to an 
international price for natural gas. Having read in the paper 
of the dispute between Ukraine and Russia and looking at the 
price of natural gas in Russia, which was just like, what, a 
dollar or something like that, as opposed to 9 or 10--it has 
been as high as $13 or so here in the United States. In the 
Middle East it is 50 cents for what we pay $13 for, which--
unlike oil, which has a world price and that is what everybody 
pays, that is not the case here. So it is very much tied--here 
in Pennsylvania where we are dependent upon natural gas, it is 
very much tied to how much we can produce here in this country 
to meet this demand. You mentioned a couple of other things 
that I think are important. We did pass a bill that allows for 
a pipeline to come from Alaska. There is a lot of controversy 
about drilling for oil in what is called ANWR. This has nothing 
to do with that. This has to do with where drilling is going 
right now, which is on the Prudhoe Bay, where we drill for oil 
and we send the oil down the oil pipeline, but up in that same 
area--in fact, coterminous in some cases with the oil--is gas, 
and the gas is, to my understanding, just pumped back into the 
ground. Actually the gas does come with the oil, and they just 
have to pump the gas back into the ground because we have no 
way to get it here. So this pipeline which we passed, I guess, 
2 years ago is hopefully something that will get a major 
reserve of gas into our country.
    The other issue is LNG, which you mentioned and Margot 
mentioned earlier from the Caribbean, but LNG is another 
potential source of internationalizing, if you will, the price 
of gas by having gas liquefied and then being able to be 
shipped. I guess the question I have is what are the 
limitations on our ability to make LNG a viable source of 
natural gas?
    Mr. Staton. Currently I would say it is capacity. Dominion 
owns the Cove Point LNG facility in Maryland, and it is one of 
only four in the country currently that can receive natural gas 
or can receive liquefied natural gas. What we need to be able 
to do----
    Senator Santorum. Just for the technology point of view, 
you receive the liquefied natural gas from Qatar, for example?
    Mr. Staton. Yes.
    Senator Santorum. It comes here, and you have a plant there 
that receives it and processes it?
    Mr. Staton. We have a plant there that receives it, 
gasifies it again, and then we deliver it into our pipeline and 
deliver it up into the Northeast and into the Mid-Atlantic area 
of the country.
    Senator Santorum. It has the same properties--once you 
gasify it, it has the same properties as----
    Mr. Staton. There may be some that dispute that right now, 
but yes, it has essentially the same properties, flows through 
our pipelines just like any other type of natural gas.
    Senator Santorum. OK.
    Mr. Staton. What we need to be able to do is to continue to 
permit additional facilities and to----
    Senator Santorum. Does this have the same permitting 
problems as a refinery would have in the sense that people do 
not want an LNG facility in their backyard, if you will? I 
mean, I guess we could have one here along the river or 
someplace, but what goes on there that people would not like to 
see have go on in their neighborhood?
    Mr. Staton. Again, it is really a relatively low-key 
facility. It does not look like a refinery. It is a series of 
tanks and gasification facilities in a very contained area. I 
think aesthetics is not the primary issue. I think folks are 
concerned about potential terrorism impacts, which again, with 
liquefied natural gas, that is really not a problem.
    Senator Santorum. Why is that?
    Mr. Staton. The ability for it to burn is not what people 
would think. It is the same as natural gas. Natural gas only 
burns within very defined limits. Liquefied natural gas in its 
liquid form is not particularly flammable, but nevertheless 
there are folks that raise that issue as a concern due to a 
lack of understanding. So I think it is somewhat aesthetics, 
but I also think it is unwarranted concerns, if you will, as to 
safety.
    Mr. Hecht. Yes, I would reinforce that. There are fairly 
well-publicized issues that have come to light in the proposed 
expansion of a number of LNG terminals and the proposed 
establishment of other LNG terminals in the U.S. Their 
construction has proceeded much more slowly than the 
marketplace would suggest it should. The debates have been over 
safety and security, primarily. There is a process being 
followed. It takes more time to work through that process and 
bring LNG online than many of us would like to see. I would 
suggest that the market indicated that natural gas prices were 
rising and the market was tight even before Katrina, and 
Katrina certainly magnified the shortage in supply.
    I might also reinforce the statements of others regarding 
environmental permitting. We have a very limited amount of 
natural gas production, very, very limited, much smaller than 
my colleague. In one particular case we found it economical to 
make a charitable contribution of the mineral rights rather 
than attempt to get the environmental permits to produce the 
gas.
    Senator Santorum. OK. Just a final comment on the LNG 
facility, because this was somewhat of a--there is a 
controversy on the other end of the State, in Philadelphia, 
about trying to site an LNG terminal in the Philadelphia area, 
and I am not an expert on this, but community groups, upset 
about that facility in their neighborhood even though the 
proposed facility is along the Delaware River, separated by an 
industrial sector and I-95 and then the neighborhood--but that 
is still--it looks to me like they are not moving forward on 
the facility as a result of that. So I wanted to make sure that 
that is in the record in the sense that we talk about 
Pennsylvania being dependent upon natural gas, and then when we 
try to bring more supply in here to get the cost down so 
heating bills are not so high, then we have all sorts of 
impediments to try to get more energy here into this country. 
It is one of those things where you cannot have your cake and 
eat it, too, and somehow or another we have got to work out 
something where we are going to try to drive--we pay more for 
natural gas in this country than any other country in the 
world, and that is because we just simply do not produce what 
the demand is and we do not allow those countries that--the 
price of natural gas in Qatar is 75 cents, I think that's what 
it is. We pay, what, 15, 20 times that here, and we want to 
take that natural gas at that price, liquefy it, bring it here, 
and we cannot. So it is a frustration, but it is something that 
all of those who are advocates for energy assistance need to 
understand, that we would not need as much advocacy for energy 
assistance if the energy costs were lower, and there are ways 
to get those costs lower, and we just need to be conscious 
about pursuing those also in a way that is safe and 
environmentally friendly.
    I was notified 15 minutes ago that Secretary Richman will 
be here in 5 minutes. So we have sort of gone off in a little 
different direction--I won't say stalling for time--but wanted 
to give Secretary Richman every opportunity to come here so she 
could testify.
    I do not have any additional questions. If anybody has any 
other comments that they would like to make for the record, our 
panel will accept them.
    Mr. Griesbach. I am not known as the AARP expert on the 
environmental stuff, and if there is a way to do this more 
efficiently and quicker, that is good. We do have a problem in 
the here and now that is imminent, and no matter what we do on 
these issues, this imminent problem is not going to go away. 
These programs that they are running to help low-income people 
are terrific programs, but just in Pennsylvania alone, while we 
have about 300,000 people, 300,000 households that got LIHEAP 
assistance last year, the projected need is probably 1.4 
million households. So we are not near reaching--and add all 
these programs together, make them all totally efficient so 
that they are all working together, and we are still not there 
yet in terms of providing the kind of heat----
    Senator Santorum. Yes. Of the company-sponsored programs, 
how many folks do you reach compared to the LIHEAP program? I 
mean, what is the total universe of folks? Obviously, you 
potentially know from your companies, but do we know what the 
philanthropic and corporate participation is, how many people 
were served?
    Mr. Hecht. I can give you a general idea, Senator. LIHEAP 
probably helps about 3,500 recipients--no, that is not correct.
    Senator Santorum. You said 300,000, right?
    Mr. Griesbach. Statewide.
    Mr. Hecht. That is Statewide. Among our customers, LIHEAP 
is probably more than half of the total direct cash assistance 
that we are able to provide. As I think I pointed out----
    Senator Santorum. Would you say you are fairly typical of 
most utility companies, that LIHEAP is the majority of the 
assistance?
    Mr. Hecht. We may not be, Senator. I would not want to say, 
because we serve primarily middle-sized cities, 100,000 
population or lower, and the urban areas have their own set of 
challenges that can be different than the rural and midsize 
cities and suburban areas that we serve.
    Senator Santorum. Jimmy, do you have any----
    Mr. Staton. My numbers are not significantly different. In 
total, we have about 10 percent of our customer base, or in the 
30,000 customer range, that are receiving either LIHEAP help or 
are part of our Customer Assistance Program.
    Senator Santorum. I guess the breakout between who gets 
LIHEAP and who gets----
    Mr. Staton. About 20,000 of our customers receive LIHEAP 
assistance.
    Senator Santorum. So about two-to-one.
    Mr. Staton. Then about 10,000 under the CAP program.
    Senator Santorum. You finished your answer just at the 
right time. Secretary Richman just walked into the room, so----
    Mr. Staton. Always willing to help, Senator.
    Senator Santorum. We have had an interesting discussion on 
a variety of topics, Madam Secretary, in making sure that we 
spent enough time to make sure that you could get here, because 
we knew you were trying hard to come and we wanted to make sure 
that your efforts were rewarded. This is a reward? I don't 
know. Some may not think this as much of a reward, but if this 
was your objective, then----
    Ms. Richman. This is my objective.
    Senator Santorum. Madam Secretary, thank you so much for 
making the extraordinary effort to be here, and I will let you 
offer your testimony. Thank you.

  STATEMENT OF ESTELLE RICHMAN, SECRETARY OF PUBLIC WELFARE, 
          COMMONWEALTH OF PENNSYLVANIA, HARRISBURG, PA

    Ms. Richman. Thank you. First let me officially thank you 
for the action taken yesterday and comment on that.
    Good morning, Senator.
    Senator Santorum. You can thank assistant secretary Horn, 
who was the person who declared that emergency or executed that 
emergency.
    Ms. Richman. Well, thank you.
    Good morning, Senator Santorum. I am Estelle Richman. I am 
the secretary of public welfare for the Commonwealth of 
Pennsylvania. Thank you for providing me with the opportunity 
to discuss what we are doing in Pennsylvania to help the 
elderly and some of our most vulnerable citizens stay warm 
during this winter season. We are only 2 weeks into the 
official winter season and already much has been said and 
written about the potentially dangerous situation that many 
Pennsylvanians will face this winter because they cannot afford 
to heat their homes. We need help. The rising cost of home 
heating is putting tremendous financial stress on all of our 
citizens of low and even middle income, but this is especially 
true in the case of people who are elderly and on fixed 
incomes. According to the PUC, the cost to heat homes with gas 
is expected to rise about 50 percent this year, and the cost to 
heat homes with oil is expected to rise 32 percent. As of 
December 15, over 21,000 households were without use of their 
central heating system, an increase of more than 19 percent 
from last year. The Energy Policy Act of 2005 increased the 
authorized spending level for LIHEAP to $5.1 billion annually. 
To authorize is one thing, to appropriate is another. Unless 
further action is taken in the next congressional session, 
which as you know convenes in mid-January, LIHEAP will receive 
only the $2.1 billion in the Labor-HHS Education bill that 
passed the Senate. This amount is less than half of what was 
authorized and woefully inadequate to support the number of 
households here in Pennsylvania and across the country that 
will need energy assistance this winter.
    When adjusted for the 1 percent across-the-board cut to 
discretionary funds, this means that the regular LIHEAP program 
will receive approximately $1.98 billion, and the 1-year 
contingency funds are approximately $181.1 million. In 
Pennsylvania, this translates into about $133 million in basic 
funding, about 5 percent higher than last year, but 
unfortunately not nearly enough to keep pace with the 40-
percent average increase in home heating costs. The $7.6 
million in contingency funds that were announced yesterday for 
Pennsylvania will still leave us short of needed funds.
    Demand for assistance through LIHEAP is very high so far. 
As of December 30, 2005, we had already received 322 
applications for the cash component of LIHEAP. This represents 
a 5-percent increase over last year and means that over 17,000 
additional Pennsylvania households have requested basic heating 
assistance so far this winter. We have seen a 15-percent 
increase in crisis applications, as well, from just over 38,000 
at this time last year to just over 45,000. Already over 
6,000--nearly 7,000--more households in Pennsylvania are facing 
a heating crisis than at the same time last year. The simple 
fact is we need more Federal funds to protect at-risk 
Pennsylvanians from the cold in the coming months.
    In Pennsylvania, Governor Rendell's response to the 
situation is a multi-pronged initiative called Stay Warm 
Pennsylvania. Stay Warm was launched at the beginning of 
November when the Governor convened a statewide energy summit 
that brought together 180 stakeholders. During this live 
statewide videoconference, the Governor and top Cabinet members 
heard firsthand from a broad range of the public and private 
sector leaders and consumers about what our energy needs would 
be for this winter. The summit generated real solutions and 
real ideas on ways for Pennsylvanians to stay warm and safe in 
the winter. The LIHEAP program is the foundation of Stay Warm 
Pennsylvania. Other key components include encouraging energy 
companies to help low-income consumers manage their heating 
bills, ensuring that low-income families get a second chance to 
pay their bills before their heat is shut off, removing 
barriers for families seeking to have their service restored, 
and assembling volunteers to help seniors winterize and take 
care of their homes to help lower energy costs. In addition to 
working with the utility companies, the Governors have secured 
many key partners in the Stay Warm Pennsylvania initiative, 
among them are the United Way, the Red Cross, the Salvation 
Army, the AFL-CIO and the Pennsylvania Council of Churches.
    As I noted a moment ago, LIHEAP is at the center of Stay 
Warm Pennsylvania. For more than 25 years the LIHEAP program 
has been helping citizens who are unable to pay their utility 
bills in the coldest months. To help supplement this vital 
program, Governor Rendell asked for and has received an 
additional up to $21 million from the State Legislature. This 
is the first time since the inception of the program that the 
State has put in its own funds into the program and 
demonstrates the commitment that Pennsylvania has to helping 
our citizens stay warm and safe this winter.
    The increased State and Federal funding is critical. With 
the dramatic increases in energy costs, our estimates show that 
we will need approximately $50 million in additional funding to 
maintain LIHEAP purchasing power just to provide assistance to 
the same number of people as last year. Much more will be 
needed to provide assistance to the number of households that 
will need help this winter. Keeping in mind that this 
Committee's focus is on the energy needs of older 
Pennsylvanians, I would like to point out that the Department 
of Public Welfare works very closely with the Pennsylvania 
Department of Aging to ensure that seniors in Pennsylvania know 
about LIHEAP and how to apply for this important benefit. In 
preparation for this year's heating season, we sent out 
outreach and application materials to the 54 Area Agencies on 
Aging and 518 senior centers across Pennsylvania. In addition, 
seniors who received a LIHEAP grant last year were 
automatically mailed an application for this year's program.
    During the 2004-2005 winter season, more than 128,000 of 
the households that received LIHEAP assistance had at least one 
person over the age of 60. This represents roughly one-third of 
our total number of households served. As of December 24, the 
Department had authorized both cash and crisis benefits for 
approximately 75,437 households which have at least one member 
over the age of 60. This is nearly 40 percent of the total 
approved households. With the additional funding coming from 
the State and Federal sources, we are hopeful that we can 
increase the level of support to older Pennsylvanians and other 
low-income households. In addition to the work we are doing 
with the LIHEAP program, the Governor is reaching out to the 
broader community to help those in need through Stay Warm 
Pennsylvania. For example, the Governor has secured agreement 
from Pennsylvania's utility companies to take voluntary steps 
to ensure that their customers have heat this winter even if 
they are having trouble paying their bills. The utilities 
answered the call to action by expanding existing programs that 
help customers pay their bills, by reducing or eliminating 
disconnections and by removing hurdles poor citizens face to 
reconnect fuel service.
    The Governor challenged the CEOs of the State's major 
utilities to double enrollment into the Customer Assistance 
Program. This is a State program that requires participating 
energy companies to provide grant recipients with reduced 
monthly energy bills. Our efforts to partner more actively with 
these companies are already bearing fruit; 12 utility companies 
have pledged $12 million in new funds to protect low-income 
households. Another successful partnership is with Lowe's, 
which operates 60 home-improvement retail stores in the State. 
They have agreed to hold weatherization workshops on a regular 
basis at senior centers and other locations and to provide 
weatherization materials at no cost to volunteer groups that 
will winterize the homes of seniors and families in need.
    Through outreach with community organizations, we have 
assembled a corps of volunteers to weatherize homes, aid the 
frail and elderly, and establish warm rooms in homes and 
community centers. In Pennsylvania, we have developed a broad 
strategy so our most vulnerable citizens are not left out in 
the cold this winter. While working to address the immediate 
energy needs of low-income citizens, we are also taking steps 
to address the larger issues surrounding our energy needs in 
Pennsylvania and throughout the Nation. The Governor is moving 
quickly and effectively to make Pennsylvania a leader in clean 
and sustainable energy initiatives. Investment in wind energy, 
biodiesel fuel production and converting old waste coal to 
diesel fuel will bring clean, renewable sources to Pennsylvania 
that will meet the needs of Pennsylvania citizens and boost the 
State's economy. This portfolio of energy investment has placed 
Pennsylvania in the lead among States in the Energy 
Independence 2020 Plan, a national effort to reduce dependence 
on foreign oil.
    At this time I would like to conclude my remarks and again 
thank the Committee and the Senator for inviting me to offer my 
comments here today on behalf of the Rendell administration.
    [The prepared statement of Ms. Richman follows.]

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    Senator Santorum. Thank you very much, Madam Secretary, and 
you were well worth the wait. I appreciate it. I just was 
making some calculations based on some of the numbers that are 
in your testimony. You say LIHEAP funding, according to the 
numbers that you provided, was about $140 million, $21 million 
from the State program, $12 million additional from corporate 
programs. So we are looking at $173 million in funding, of 
which it looks like close to $40 million of that is new money.
    Ms. Richman. That is right.
    Senator Santorum. So that is a fairly substantial increase, 
obviously not as big an increase as we have seen in the cost, 
but I think there is some good news here, is that the State and 
the corporate community, as well as Congress, has done 
something, although as I said earlier we wanted to do a lot 
more, and my hope is that when we get back next year, that we 
can figure out a way to get some additional funding through. 
But I would put out a warning that just to put additional money 
on the table without some mechanism to offset where that money 
is coming from is going to be a very, very tough thing in a 
budget that the President is going to lay out here in about a 
month that looks to be probably in the area of $400 billion to 
$500 billion in deficit this year, which is substantially 
higher than it was last year. So I just put a warning out that 
I am going to do everything I can, and I have been doing 
everything I can, to try to get more energy assistance money, 
but we are going to have to find some way to offset this, and 
my hope is that we can bring back the idea that went down in 
the Senate. Hopefully, we can come back and do some 
refashioning of that and hopefully be successful, because a $2 
billion addition, basically doubling of the Federal commitment, 
would be more than what you had even asked for to meet those 
needs.
    Mr. Hecht. Senator, if I may clarify an answer to an 
earlier question and also help put LIHEAP in perspective as a 
fraction of the total, our company last winter had about in 
excess of $22 million of private assistance. We have increased 
that to $28 million, and in addition LIHEAP last winter 
provided $6.3 million. So that gives you a proportion of the 
private funding versus the scope of LIHEAP to our corporation.
    Senator Santorum. So LIHEAP is a much smaller----
    Mr. Hecht. LIHEAP is a much smaller fraction than my 
earlier response to you, in our total funding.
    Senator Santorum. You do not have those numbers?
    Mr. Staton. I do not have those numbers, but dollar wise I 
would imagine we are not too dissimilar.
    Senator Santorum. OK. Well, it would actually be helpful 
for me--and we can certainly, Madam Secretary, pursue this--is 
to understand what the scope of aid out there is. I mean, I 
think you talked about the increase being $12 million on the 
corporate side. The question is what is the base? To look at 
all of the money that is coming from all different sources to 
help those in need, it sounds to me it could be certainly well 
in excess of the number that we are talking about here. So that 
is something that we need to get a better handle on and 
understand where that money is being spent.
    You mentioned also, Madam Secretary--I cannot pass up the 
opportunity--the Governor's efforts on clean coal and taking 
waste coal and turning it into diesel fuel, and we actually 
just 3 weeks ago--well, the week before Christmas--were able to 
pass a technical correction that needed to be passed to 
authorize a loan guarantee for that project, which is in 
Schuylkill County, which is on the other side of the State, 
Pottsville area, which will take coal which is basically 
sitting in piles all over the place, old anthracite waste coal, 
and turning that into zero-sulfur diesel fuel, which also can 
be used for home heating oil. That is a project that I have 
been working on for 6 years. We were able to get a $100 million 
Department of Energy grant 3 years ago, and that grant has been 
turned into a loan guarantee which will guarantee $450 million 
in the project, which basically will make the project go.
    The State has agreed to be a purchaser of that fuel when 
the plant gets operational, but this could be a prototype of 
something that could be incredibly beneficial for the 
environment, cleaning up the environment, producing home 
heating oil here in Pennsylvania, and creating jobs at the same 
time. It is not just waste coal, but we can also use--that is, 
waste anthracite coal--but we can also use bituminous coal here 
in western Pennsylvania and create facilities of the same kind. 
So it is about a $700 million construction which is going to 
happen here in Pennsylvania, so there are jobs related to that, 
plus the production of--we could be an oil-producing State here 
in Pennsylvania here again.
    Ms. Richman. That would be very nice.
    Senator Santorum. Yes, but I just want folks to know that 
we have got to look at this holistically. You cannot just look 
at it as the immediate need. Obviously, the immediate need is 
one that we need to deal with, and we have people that are in 
crisis right now, but we are going to be back here again year 
after year after year unless we do something with the bigger 
picture. So that is one of the reasons I wanted to expand into 
that, and we have been working cooperatively with the Governor 
on this project, and it is an important one for me and one that 
we hope to make happen here in the next couple of years.
    With that, I do not know if anybody has any additional 
comments. I just want to thank everybody for attending, and we 
are adjourned.
    [Whereupon, at 11:21 a.m., the committee was adjourned.]


                            A P P E N D I X

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              Prepared Statement of Senator Rick Santorum

    In June, Chairman Smith held a hearing to examine the 
effect of high energy prices on the elderly and how the basic 
need of heating their homes can be met. Now that winter is 
here, the increasing cost of home heating fuel weighs heavily 
on the minds of the elderly and the rest of the American 
population. Many of our seniors are having to decide what they 
must sacrifice in order to make ends meet.
    Prices of this winter were already projected to be 
considerably higher than last year; the advent of Hurricanes 
Katrina and Rita has made projections even more sobering. For 
example, the Energy Information Administration's December 
Short-Term Energy Outlook shows that on average, consumers will 
spend 38 percent more for natural gas this winter than they did 
last winter.
    Pennsylvania routinely faces harsh winters and is home to 
the third-highest percentage of seniors in the country. 
According to the 2004 American Community Survey, approximately 
53 percent of Pennsylvania's elderly households rely on natural 
gas to heat their homes; 26 percent use fuel oil; and 15 
percent heat their homes with electricity.
    The primary federal heating assistance program is the Low-
Income Home Energy Assistance Program. In FY2005, over 128,000 
Pennsylvania seniors received LIHEAP benefits. According to the 
LIHEAP Home Energy Notebook, the three-year (2001-2003) average 
number of elderly households eligible for LIHEAP under state 
guidelines was nearly 330,000. In 2003 (the most recent year 
for which data is available), only 32 percent of those 
households actually received benefits. Compared to other 
states, Pennsylvania is ranked third for most number of elderly 
receiving this benefit in 2003.
    Unfortunately, as we know, LIHEAP does not reach all of 
those who are eligible. Since being a member of the House of 
Representatives, I have been an ardent, vocal supporter of 
LIHEAP funding. We cannot minimize the importance of this 
program; however, the purpose of this hearing is to take 
another look at the prices of home heating fuel now that winter 
is well underway and to hear from some of our witnesses about 
efforts they are making to help alleviate these burdensome 
prices for some of our most vulnerable citizens. Participation 
by private companies is vitally important to ensuring the 
warmth of our seniors. In addition, the tireless efforts of 
countless non-profits is commendable and essential. By 
continuing to raise awareness for this basic need of our 
elderly population, it is my hope that government, together 
with the private sector, can improve the assistance given to 
these individuals and reduce the number of those living with 
little or no heat.
    I look forward to hearing your testimony and thank you for 
your time today.

                                 
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