[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
 LOW INCOME HOME ENERGY ASSISTANCE PROGRAM: OVERVIEW AND CURRENT ISSUES 

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

                                HEARING

                               before the

                        SUBCOMMITTEE ON HEALTHY
                        FAMILIES AND COMMUNITIES

                              COMMITTEE ON
                          EDUCATION AND LABOR

                     U.S. House of Representatives

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

           HEARING HELD IN WASHINGTON, DC, NOVEMBER 13, 2007

                               __________

                           Serial No. 110-72

                               __________

      Printed for the use of the Committee on Education and Labor


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                    COMMITTEE ON EDUCATION AND LABOR

                  GEORGE MILLER, California, Chairman

Dale E. Kildee, Michigan, Vice       Howard P. ``Buck'' McKeon, 
    Chairman                             California,
Donald M. Payne, New Jersey            Ranking Minority Member
Robert E. Andrews, New Jersey        Thomas E. Petri, Wisconsin
Robert C. ``Bobby'' Scott, Virginia  Peter Hoekstra, Michigan
Lynn C. Woolsey, California          Michael N. Castle, Delaware
Ruben Hinojosa, Texas                Mark E. Souder, Indiana
Carolyn McCarthy, New York           Vernon J. Ehlers, Michigan
John F. Tierney, Massachusetts       Judy Biggert, Illinois
Dennis J. Kucinich, Ohio             Todd Russell Platts, Pennsylvania
David Wu, Oregon                     Ric Keller, Florida
Rush D. Holt, New Jersey             Joe Wilson, South Carolina
Susan A. Davis, California           John Kline, Minnesota
Danny K. Davis, Illinois             Cathy McMorris Rodgers, Washington
Raul M. Grijalva, Arizona            Kenny Marchant, Texas
Timothy H. Bishop, New York          Tom Price, Georgia
Linda T. Sanchez, California         Luis G. Fortuno, Puerto Rico
John P. Sarbanes, Maryland           Charles W. Boustany, Jr., 
Joe Sestak, Pennsylvania                 Louisiana
David Loebsack, Iowa                 Virginia Foxx, North Carolina
Mazie Hirono, Hawaii                 John R. ``Randy'' Kuhl, Jr., New 
Jason Altmire, Pennsylvania              York
John A. Yarmuth, Kentucky            Rob Bishop, Utah
Phil Hare, Illinois                  David Davis, Tennessee
Yvette D. Clarke, New York           Timothy Walberg, Michigan
Joe Courtney, Connecticut            Dean Heller, Nevada
Carol Shea-Porter, New Hampshire

                     Mark Zuckerman, Staff Director
                   Vic Klatt, Minority Staff Director
                                 ------                                

            SUBCOMMITTEE ON HEALTHY FAMILIES AND COMMUNITIES

                 CAROLYN McCARTHY, New York, Chairwoman

Yvette D. Clarke, New York           Todd Russell Platts, Pennsylvania,
Carol Shea-Porter, New Hampshire       Ranking Minority Member
Dennis J. Kucinich, Ohio             Howard P. ``Buck'' McKeon, 
Raul M. Grijalva, Arizona                California
John P. Sarbanes, Maryland           Kenny Marchant, Texas
Jason Altmire, Pennsylvania          Luis G. Fortuno, Puerto Rico
John A. Yarmuth, Kentucky            David Davis, Tennessee
                                     Dean Heller, Nevada














































                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on November 13, 2007................................     1

Statement of Members:
    McCarthy, Hon. Carolyn, Chairwoman, Subcommittee on Healthy 
      Families and Communities, Committee on Education and Labor.     1
        Prepared statement of....................................     3
        Letter from Nassau County Department of Senior Citizens 
          Affairs, Nov. 2007.....................................    79
    Platts, Hon. Todd Russell, Senior Republican Member, 
      Subcommittee on Healthy Families and Communities, Committee 
      on Education and Labor.....................................     3
        Prepared statement of....................................     4

Statement of Witnesses:
    Barlow, Linda, vice-president of community alternative 
      programs, Education and Assistance Corp....................    34
        Prepared statement of....................................    36
    Caruso, Guy, Administrator, Energy Information 
      Administration, U.S. Department of Energy..................     6
        Prepared statement of....................................     8
    Manning, David, executive vice president, U.S. external 
      affairs, National Grid, on behalf of the American Gas 
      Association................................................    42
        Prepared statement of....................................    43
        AGA Energy Analysis, Sept. 26, 2007......................    48
    Swanson, Lawrence A., executive director, ACTION-Housing Inc.    38
        Prepared statement of....................................    39
    Wolfe, Mark, executive director, National Energy Assistance 
      Directors Association......................................    18
        Prepared statement of....................................    22


 LOW INCOME HOME ENERGY ASSISTANCE PROGRAM: OVERVIEW AND CURRENT ISSUES

                              ----------                              


                       Tuesday, November 13, 2007

                     U.S. House of Representatives

            Subcommittee on Healthy Families and Communities

                    Committee on Education and Labor

                             Washington, DC

                              ----------                              

    The subcommittee met, pursuant to call, at 3:05 p.m., in 
room 2175, Rayburn House Office Building, Hon. Carolyn McCarthy 
[chairwoman of the subcommittee] presiding.
    Present: Representatives McCarthy, Clarke, Sarbanes, 
Platts, and McKeon.
    Staff present: Tylease Alli, Hearing Clerk; Alfred Amato, 
Legislative Fellow for Education; Denise Forte, Director of 
Education Policy; Lamont Ivey, Staff Assistant, Education; 
Deborah Koolbeck, Policy Advisor for Subcommittee on Healthy 
Families and Communities; Danielle Lee, Press-Outreach 
Assistant; Joe Novotny, Chief Clerk; Margaret Young, Staff 
Assistant, Education; Chad Miller, Minority Professional Staff; 
Susan Ross, Minority Director of Education and Human Resources 
Policy; and Linda Stevens, Minority Chief Clerk/Assistant to 
the General Counsel.
    Chairwoman McCarthy [presiding]. A quorum is present. The 
hearing of the subcommittee will now come to order.
    Pursuant to Committee Rule 12(a), any member may submit an 
opening statement in writing which will be made part of the 
permanent record.
    Before we begin, I would like everyone to take a moment to 
ensure that your cell phones and BlackBerrys are off. My 
BlackBerry is off. Last time, I did not do it.
    I now recognize myself followed by the ranking member, Buck 
McKeon from California, for his opening statement.
    I want to thank everyone here for coming.
    We will be discussing a very serious issue facing our low-
income families. With energy costs consistently on the rise, 
more and more families must make the tough decision on whether 
to heat their homes or put food on the table.
    This morning, I met with a group from Island Harvest, which 
feeds our poor on the island. I know everybody thinks Long 
Islanders are very wealthy people, but we have a large 
population of homeless, and besides our veterans, we have more 
and more people who are homeless today.
    I think that concerns me the most, is the children. If they 
cannot afford to have heat in their homes, that means they most 
likely do not have food on their plates, and I think that is 
something, speaking as a nurse--no heat, no food--we are going 
to end up seeing these children and our elderly and our 
disabled in hospitals, which is going to end up costing more 
money. This is a decision that no one should ever be forced to 
make.
    Unfortunately, heating costs will only increase as we enter 
into the winter months. Oil is trading at nearly $100 per 
barrel, even though in the last couple of days we have seen it 
come down, but it is fluctuating. And the prices of other 
heating sources, such as natural gas, propane and electricity, 
have all increased by record number, according to the Energy 
Information Administration. These increased costs make it 
extremely difficult for low-income families to heat their 
homes, placing their families and loved ones in harm's way.
    That is why the federal government created the Low Income 
Home Energy Assistance Program, or LIHEAP. This great program 
has been helping low-income families heat their homes since 
1981. Currently, over 5 million households receive LIHEAP 
assistance. That is people that are receiving the assistance. 
Those that do not even apply are probably making the numbers 
even larger.
    Just last week, the House passed language in the Labor-HHS 
appropriations bill to provide $2.4 billion for the LIHEAP 
program. Unfortunately, we saw President Bush veto this vital 
legislation just today, placing the health and wellbeing of 
millions of families at risk this winter.
    Studies have shown that the energy burden on low-income 
families is much higher than wealthier families. According to 
the American Gas Association and the Department of Health and 
Human Services, low-income families spend nearly 20 percent of 
their income on heating and cooling costs, compared to 7 
percent for standard households. It is clear our nation's low-
income families spend a much greater portion of their income on 
heating and cooling costs, and they deserve and need assistance 
from the federal government.
    There are things that can be done to reduce the monthly 
energy bills at home. To be very honest with you, this morning, 
before I flew down here, I pulled out every single plug in my 
house--every single plug. I turn the TVs off. I turn my 
computer off. I pull everything out. And the house right now is 
set at 54 degrees. And let us hope my pipes do not burst.
    But I have been doing this for a number of years. Being 
that I am not there for 5 days a week, I figure I can cut down 
on energy just doing my small part. But I am not there. What 
happens to the families that are living there and have the high 
costs?
    I also check to make sure I have not left any lights on 
that are not being used and turn my heat off when I am not at 
home. And I guess I grew up--you know, my mom and dad went 
through the depression years--and when you walk through a room, 
you turn the light off. I was taught that as a child. I think a 
lot of people have forgotten that.
    And we also must also work to develop clean and renewable 
and cost-efficient fuel to put an end to the energy crunch in 
this nation.
    We will hear from a panel of experts today who will offer 
their views on the LIHEAP program and provide this subcommittee 
with ideas and suggestions to improve the delivery of this 
program.
    I now want to yield to Mr. Platts from Pennsylvania.
    [The statement of Mrs. McCarthy follows:]

 Prepared Statement of Hon. Carolyn McCarthy, Chairwoman, Subcommittee 
                  on Healthy Families and Communities

    Thank you all for coming today. We will be discussing a very 
serious issue facing our low income families.
    With energy costs consistently on the rise, more and more families 
must make the tough decision whether to heat their homes, or put food 
on the table.
    That is a decision no one should ever be forced to make.
    Unfortunately, heating costs will only increase as we enter into 
the winter months.
    Oil is trading at nearly one hundred dollars per barrel.
    And the prices of other heating sources, such as natural gas, 
propane and electricity have all increased by record number, according 
to the Energy Information Administration.
    These increased costs make it extremely difficult for low income 
families to heat their homes, placing their families and loved one in 
harms way.
    That is why the Federal government created the Low Income Home 
Energy Assistance Program or LIHEAP.
    This great program has been helping low income families heat their 
homes since 1981.
    Currently, over five million households receive LIHEAP assistance.
    Just last week, the House passed language in the Labor--HHS 
Appropriations bill to provide 2.4 billion dollars for the LIHEAP 
program.
    Unfortunately, President Bush vetoed this vital legislation just 
today, placing the health and well being of millions of families at 
risk this winter.
    Studies have shown that the energy burden of low income families is 
much higher than wealthier families.
    According to the American Gas Association and the Department of 
Health and Human Services, low income families spend nearly twenty 
percent of their income on heating and cooling costs, compared to seven 
percent for standard households.
    It is clear our nation's low income families spend a much greater 
portion of their income on heating and cooling costs, and they deserve 
and need assistance from the Federal government.
    There are things that can be done to reduce the monthly energy 
bills at home.
    I make sure to unplug my appliances at my home in New York before I 
travel to Washington each week.
    I also check to make sure I have not left lights on that are not 
being used, and turn my heat off when I am not at home.
    There are many things that can be done to reduce home heating 
costs, and this Subcommittee is committed to improving the LIHEAP 
program.
    But we must also work to development clean, renewable and cost 
efficient fuel to put an end to the energy crunch in this nation.
    We will hear from a panel of experts today who will offer their 
views of the LIHEAP program, and provide this Subcommittee with ideas 
and suggestions to improve the delivery of this proven program.
                                 ______
                                 
    Mr. Platts. We are playing musical chairs over here, Madam 
Chair.
    Thank you. I am delighted to join with you and our 
witnesses here today and will tell you, as a parent of a third-
grader and fifth-grader, we parents are still out there trying 
to get our kids to turn those lights out as they leave the 
rooms and go to another part of the house or go out to play.
    Good afternoon. I am delighted to be here. I apologize for 
my late arrival coming right from my district, but I am 
delighted to be part of this hearing.
    And, Madam Chair, I want to thank you for hosting this very 
important hearing on a topic that is critically important to, 
as you stated, millions of our citizens and their families 
across this country.
    I appreciate everyone's interest in this topic, and coming 
from a northeastern state, Pennsylvania, the winter months 
approaching certainly are trying times for a lot of our 
citizens. Hundreds of thousands of Pennsylvanians this year, 
along with the more than 5 million you referenced across this 
country, will look to LIHEAP for assistance as we go into the 
winter months.
    And I can tell you in my district, as a Congressman and 
previously as a state representative, the LIHEAP program is one 
that I certainly have been very aware of and often engaged in 
with citizens on trying to make sure that they knew of this 
important program and were able to acquire assistance from it.
    While I am certainly grateful for all of our witnesses and 
want to thank each and every one of you for being here, I, as a 
Pennsylvanian, am especially looking forward to, Mr. Swanson, 
your testimony and your work back in Pennsylvania, my home 
state.
    The rising costs of energy, as was referenced by the Chair, 
especially with the price of oil where it is today, is more and 
more challenging for so many families across the country, and 
while I believe it is vitally important that we rein in energy 
costs and decrease our consumption of foreign energy, we must 
not forget these citizens who are oftentimes having to choose 
between heating--or in summer in the southern states, cooling--
their homes and putting food on the table or meeting other 
necessary expenses.
    And I think that is why this hearing is so important, and 
as great a nation, a wealthy nation, as we are, we should not 
have citizens having to make those very difficult decisions for 
themselves or their families.
    With the LIHEAP program up for reauthorization this year, I 
certainly stand ready to work with you, Madam Chair, and with 
our colleagues on both sides of the aisle to improve this 
critically important program, and the testimonies we are going 
to hear today I know will help further educate us and further 
this effort and this cause of making sure we do right by all of 
our fellow citizens.
    So, with that, I yield back, and I look forward to our 
testimonies.
    Thank you, Madam Chair.
    [The statement of Mr. Platts follows:]

    Prepared Statement of Hon. Todd Russell Platts, Ranking Member, 
            Subcommittee on Healthy Families and Communities

    Good afternoon. Welcome to this hearing on the Low-Income Home 
Energy Assistance Program (LIHEAP). I appreciate and share the 
Chairwoman's interest in this important issue. With the winter months 
approaching, this hearing is especially timely.
    Hundreds of thousands of low-income Pennsylvanians are able to take 
advantage of LIHEAP assistance during the winter months. I hear 
regularly from constituents regarding the important role which this 
program plays in their lives. I look forward to hearing from Mr. 
Swanson regarding his personal experience working with the LIHEAP 
program in Pennsylvania.
    The rising cost of energy has become increasingly burdensome to 
individuals and businesses alike. While I believe that it is vitally 
important that we reign in energy costs and decrease our consumption of 
foreign energy, we must not forgot those citizens who must choose 
between heating or cooling their homes during times of severe 
temperatures or buying groceries for their families.
    The LIHEAP program is up for reauthorization this year. I stand 
ready to work with Chairwoman McCarthy to improve this important 
program. The testimonies of the distinguished panel before us today 
will greatly enhance our understanding of the issues surrounding the 
program and help us to focus our efforts where they are most needed.
    Thank you to all of the panelists for joining us today. With that, 
I yield back to the Chairwoman.
                                 ______
                                 
    Chairwoman McCarthy. Thank you. Thank you, Mr. Platts.
    I know that there are only a few of us here. For the 
Democrats, we have a caucus off the Hill, so a lot of our 
colleagues are not here, and a lot of people are traveling from 
the West Coast. We do not have votes until 6:30, so a lot of 
people do not get here until much later in the afternoon.
    Without objection, all members will have 14 days to submit 
additional materials or questions for the hearing record.
    Today, we will hear from a panel of witnesses, and I do 
appreciate you all being here. Your testimonies will proceed in 
the order of your introduction.
    Our first witness is Hon. Guy Caruso, the administrator for 
the U.S. Department of Energy Information Administration, known 
as EIA. The EIA is the energy within the DOE, the Department of 
Energy, which will provide policy independent data, forecasts 
and analysis regarding energy. Mr. Caruso has more than 30 
years experience in the economic study of energy, with 
particular emphasis on topics related to energy markets, policy 
and security. Today, Mr. Caruso will share with us the EIA's 
short-term energy forecast and why oil prices are so high.
    We look forward to your presentation and interpretations.
    Next, we will hear from Mark Wolfe, the executive director 
of the National Energy Assistance Directors' Association. This 
association represents the state directors of LIHEAP programs. 
Prior to his current position, Mr. Wolfe has served at the U.S. 
Treasury as well as at our own Congressional Research Service. 
Today, Mr. Wolfe will present an overview of the LIHEAP program 
and discuss the current state of affairs, given the energy 
forecast that Mr. Caruso will share with us. We will look 
forward to hearing what states are doing to prepare for the 
winter and following summer in regard to the LIHEAP program.
    Our next witness will focus on the running of a LIHEAP 
program and give us some more on-the-ground perspective. Ms. 
Linda Barlow is the vice president of community-based 
alternatives of the Education & Assistance Corporation. The EAC 
oversees the LIHEAP program in Nassau County of Long Island in 
my district, and I was just down in their offices about 2 weeks 
ago. In addition to supervising the LIHEAP program, Ms. Barlow 
is a published author and serves as a consultant and trainer 
for various organizations. I look forward to hearing about the 
challenges and successes of administering LIHEAP at home.
    Our next witness is Mr. Lawrence Swanson. He is the 
director of ACTION-Housing, Inc., of Pittsburgh, Pennsylvania. 
ACTION-Housing empowers people to build more secure and self-
sufficient lives through the visions of decent and affordable 
housing, essential support services and asset building programs 
and education and employment opportunities. Mr. Swanson has 
been at ACTION-Housing since 1979.
    Our final witness today is Mr. David Manning. Mr. Manning 
is the executive vice president of U.S. external affairs for 
National Grid and Key Span, a utility company which is part of 
the American Gas Association. Mr. Manning will testify on the 
AGA's recent report, the increased burden of energy costs on 
low-income consumers, and the role that utilities can play in 
helping our nation's low-income individuals and families 
through this winter and summer to follow.
    Given the energy cost forecast, I want to thank each and 
every one of you for coming. Each one of us on this committee 
is passionate about these issues. This comes through our 
jurisdiction, and I have to say that other hearings that we 
have had, we have had great results on trying to push through 
reauthorization on issues because of people like yourselves, 
you know, traveling and coming in and talking to us.
    So, first, we are not appropriating LIHEAP at its maximum 
authorized levels, and only 14 percent of those eligible 
receive assistance. As funds are consumed this winter, it is 
unclear how LIHEAP can continue to be of assistance to those in 
need in the summer months. I look forward to your testimonies 
and the work ahead of us.
    For those of you who have not testified before in front of 
us, in front of you, you have a lighting system. It will turn 
on green as you start talking. When it is the yellow light, you 
have 1 minute to finish up, and then red, we really ask you to 
wind up. We are not going to cut you off as soon as it turns 
red, but we appreciate it if you could follow through with 
that.
    And if you could do a favor, when you are speaking, turn on 
your microphone so that everybody here in the audience can also 
hear you.
    We will now hear from our first witness, the honorable Guy 
Caruso.
    Mr. Caruso?

  STATEMENT OF GUY CARUSO, ADMINISTRATOR, ENERGY INFORMATION 
           ADMINISTRATION, U.S. DEPARTMENT OF ENERGY

    Mr. Caruso. Thank you, Madam Chairwoman and members of the 
committee. Thank you for this opportunity to discuss recent 
events in energy markets and the Energy Information 
Administration's latest short-term outlook as well as our 
heating fuel price outlook.
    EIA produces objective, timely and relevant data, 
projections, and analyses that are meant to assist policymakers 
and to help markets function efficiently and inform the public. 
Our views and outlooks should be attributed to EIA only and not 
to the Department of Energy or the administration.
    My testimony draws from our November Short-Term Energy 
Outlook, which was released last Tuesday, and this outlook 
gives projections for world oil markets and U.S. energy markets 
through the end of 2008, including the price projections, 
consumption, and expenditures for heating fuels as they are 
projected. These projections reflect weather forecasts from the 
National Oceanographic and Atmospheric Administration and 
household heating characteristics from EIA's Residential Energy 
Consumption Survey.
    As I review our outlook for prices and expenditures, I must 
stress that the heating bills for individual households are 
highly dependent on local weather, the market size, size and 
efficiency of the house and the behavioral characteristics, as 
you mentioned in your opening statement, and such things as the 
equipment being used in the individual homes.
    On average, households heating primarily with natural gas 
are expected to spend about $87, or 11 percent, more this 
winter in fuel expenditures than last winter. However, 
households heating primarily with heating oil are expected to 
pay an average of $375, or 26 percent, more. Households heating 
primarily with propane are expected to pay an average of $273 
more, or 20 percent more. Finally, households heating primarily 
with electricity are expected to pay an average of $22, or 3 
percent, more.
    There are some significant regional differences in the use 
of various heating fuels, and the written testimony contains 
much more detail with respect to the regional costs throughout 
our country. Nationwide, about 58 percent of all households use 
natural gas as their primary heating fuel, and these average 
expenditures are expected to be up 11 percent due to higher 
prices and also expected higher temperatures this year compared 
with last.
    In the Midwest, nearly 80 percent of all households rely on 
natural gas, and they are expected to have a 12 percent 
increase in average expenditures. Regionally, the increase in 
expenditures for households relies primarily on heating oil 
ranges from 24 percent in the West to 30 percent in the South. 
However, only 7 percent of householders nationally rely on 
heating oil. In the Northeast, 32 percent of households do, and 
there, the expected increase in expenditures will be 25 
percent.
    Of course, these projections are highly dependent on the 
actual weather that occurs. Colder or warmer weather than 
predicted by NOAA in key regions of the country would have a 
significant impact on prices and consumption of heating fuels. 
Uncertainty in world oil markets could also be a major factor 
in the price of heating oil with the most impact on the 
northeastern region of the nation.
    Turning to energy markets in general, as we all know, oil 
prices have risen sharply this year and are likely to remain 
high through 2008. We are expecting the price of the West Texas 
Intermediate Crude, which is traded on the New York Mercantile 
Exchange, to increase from an average annual price of $66 in 
2006 to $71 per barrel in 2007 to nearly $80 in 2008. A number 
of factors are driving these prices, including strong economic 
growth worldwide, production decisions by members of OPEC, 
moderate supply growth in non-OPEC nations, low spare 
productive capacity in OPEC, tight inventories, refinery 
bottlenecks, and ongoing geopolitical concerns.
    On the other hand, natural gas markets have softened. U.S. 
inventories reached an all-time high on November 2 of this 
year. In addition, key regions using natural gas for heating 
had warmer-than-normal weather to begin the fourth quarter of 
this year. Natural gas production continues to increase, 
particularly in the lower 48. On-shore region and L&G imports 
are expected to exceed last year's level by about 40 percent. 
The Henry Hub spot price of natural gas is expected to rise 
from the October average of nearly $7 per thousand cubic feet 
to about $8 for the full year 2008.
    Madam Chairwoman, this completes by oral testimony. I would 
be glad to answer any questions that you or any other members 
of the committee may have as we proceed.
    Thank you very much.
    [The statement of Mr. Caruso follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
                                ------                                

    Chairwoman McCarthy. Thank you, Mr. Caruso.
    Mr. Wolfe?

 STATEMENT OF MARK WOLFE, EXECUTIVE DIRECTOR, NATIONAL ENERGY 
               ASSISTANCE DIRECTOR'S ASSOCIATION

    Mr. Wolfe. Okay. Good afternoon. I appreciate the 
opportunity to testify on behalf of the National Energy 
Assistance Directors' Association, or NEADA, on the importance 
of the Low Income Home Energy Assistance Program meeting the 
heating and cooling needs of some of the nation's poorest 
families.
    NEADA represents the state LIHEAP directors. Members of 
NEADA would first like to take this opportunity to thank the 
members of the subcommittee for its continued program support 
in working to increase funding for LIHEAP.
    By way of background, there are four components of the 
LIHEAP program: the block grant providing formula grants to 
states to help low-income families pay their heating and 
cooling bills and also allows states to transfer up to 15 
percent to pay for the companion program, weatherization, which 
helps families reduce their energy costs through conservation; 
emergency contingency funds that can be released by the 
administration for a number of reasons, including natural 
disasters, rapid increases in home energy prices, high 
unemployment rates and other economic conditions; the 
Residential Energy Assistance Challenge grant providing 
competitive discretionary grants to states to develop new 
strategies to assist households in reducing their home energy 
burden; and, lastly, the leveraging grants which provides 
states with additional incentives to raise nonfederal funds for 
energy assistance.
    In addition, the law authorizes the appropriation of 
advance funds 1 year before the start of the program year in 
order to allow states to plan for the design of their program. 
This is especially important in years when the appropriation 
for the federal fiscal year is delayed, as is likely in this 
year, and states in cold weather states have to start their 
programs without knowing the final appropriation level.
    The LIHEAP appropriation level for FY 2007 was $2.1 billion 
of which $1.98 billion was for the block grant and $181 million 
was allocated for emergency contingency funding. Of this 
amount, $27.3 million of the block grant was set-aside for the 
REACH and leveraging programs. No advance funding was 
appropriated.
    For FY 2008, the appropriation level as provided in the FY 
2008 Labor, Health and Human Services Appropriations Act, as 
passed by the Congress, would provide the same level for the 
block grant but increase the emergency contingency funding by 
$250 million from $181.5 million to $431 million. As in FY 
2007, again, no advance funding was appropriated.
    The President's budget would have reduced the LIHEAP basic 
grant to $1.5 billion and provided $282 million in emergency 
contingency funds. This, in fact, would have been devastating 
impact on the program. At a minimum, we would have had to 
eliminate at least a million families in the President's 
budget.
    The authorized level for LIHEAP was increased from $2 
billion to $5.1 billion by the Energy Policy Act. The Act also 
continued the authorization level for emergency funds at $600 
million. And I included a table in my testimony showing the 
allocation of $5.1 billion.
    Who receives LIHEAP? More than 70 percent of families 
receiving LIHEAP have incomes of less than 100 percent of the 
federal poverty, which is $20,650 for a family of four, and 44 
percent have incomes of less than 75 percent of the poverty 
level, which is $15,500 for a family of four. Families 
receiving energy assistance carry a higher energy burden than 
most Americans, spending about 15 percent on home energy bills, 
compared to about 3.4 percent for all Americans.
    A major concern of state energy officers this year is the 
declining purchasing power of the program. This is largely 
because federal funding has just not kept up with the rise in 
energy prices. Unfortunately, energy prices are soaring. Home 
heating prices projected by the Energy Information 
Administration could reach almost $1,000 this year for a 
typical family, an increase of almost 80 percent of the cost of 
home heating during the winter of 2001-2002 and 47 percent more 
than the year 2002-2003.
    And just by fuel type--this is what really concerns us--in 
2003, it cost $951 to heat your home with heating oil. This 
coming year, according to the Energy Information 
Administration, it is $1,841. We think it will go even higher 
because global prices are approaching $100 a barrel. We think 
it is going to $2,200, which would be just plain devastating 
for low-income families in the Northeast.
    Natural gas has gone from $600 to $900 in this period. 
Propane from $926 to $622. And, again, propane tends to track 
oil prices. Electricity has gone from $697 to $845. And it is 
just not an issue of home heating. Electricity is used for 
cooling, and across the South, we are looking at rising 
electricity prices. We are very, very concerned about the 
impact of these prices on cooling, especially in that part of 
the country.
    We have been tracking and trying to put this in perspective 
in terms of rising energy prices showing how the purchasing 
power is declining, and, for example, 4 years ago, heating oil 
would buy about 36.7 percent of the average cost. I am sorry. 
The grant would buy about 36.7 percent of the cost of home 
heating with heating oil. Now it is about 20 percent. Natural 
gas would pay more than 50 percent of the cost of home heating. 
Now we are down to 37 percent; propane, 37 down to 22; and so 
on. What it is showing is that the grant is not keeping up with 
the increase in prices.
    The other thing that is of concern is from 2003 to 2007, 
the number of households receiving energy assistance increased 
by 26 percent from $4.6 million to about $5.8 million in 2007, 
or about 15.6 percent of the eligible population. During the 
same period, the federal appropriation increased by only 10 
percent, with the resulting average grant declining from $349 
to $305. This would not be a problem if energy prices were 
decreasing proportionally or remaining stable.
    So what does this mean for 2008? We started surveying 
states about a week ago and saying, ``Well, what do you plan to 
do? You know, if grants stay about the same level--if the 
appropriation stays about the same level or it goes up by 10 
percent--how will you set your grants?'' And what I thought 
they were going to do was say, ``Look, we are going to follow 
the same pattern as previous years. We will decrease the grants 
in order to adjust to increasing applications.''
    Instead what they have decided is that the grant has 
reached the point where it cannot be decreased any further, and 
so what they are planning to do in the absence of additional 
funding--this includes the $250 million that is in the budget 
passed by Congress--they are projecting decreases of 10 percent 
to 20 percent on the number of families that can be served. So 
we are expecting to go from about 5.8 million in 2007 to about 
4.9 million families. It would increase the average grant from 
about $305 to $400 on average. This would really be tragic in 
several ways because with rising energy prices, we are 
expecting more families to come into the program.
    I think--one more thing I would just like to mention--we 
have a strong partnership with utilities, and part of those 
programs, especially around the areas of arrearage management, 
are not working as well, as families have fewer dollars to 
match the kinds of matching programs we have to make up for 
overdue payments, and so what we are seeing is a very, very 
stretched program.
    Additional funding for LIHEAP can help to address rising 
arrearages and shutoffs, allow the states to reach out to 
vulnerable households and avert the type of hardships we know 
happen with families who do not have sufficient funds to pay 
their home energy bills. Adequate funding for LIHEAP can help 
families avert the need to choose between paying their heating 
and cooling bills and other vital household necessities, like 
food, medicine, and other essentials.
    The authorized level of $5.1 billion to provide sufficient 
funds to increase grant levels to adjust for inflation and 
energy prices and allow states to reach out to eligible 
households who are not currently receiving assistance.
    Thank for you this opportunity to testify today. I welcome 
any questions or requests for additional information.
    [The statement of Mr. Wolfe follows:]

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    Chairwoman McCarthy. Thank you, Mr. Wolfe.
    Ms. Barlow?

     STATEMENT OF LINDA BARLOW, VICE PRESIDENT, COMMUNITY 
      ALTERNATIVE PROGRAMS, EDUCATION AND ASSISTANCE CORP.

    Ms. Barlow. Okay. Good afternoon. I would like to thank the 
committee for giving me the opportunity to testify today on 
this very important topic.
    I am here representing the Education & Assistance 
Corporation, also known as EAC. Established in 1969, EAC 
administers over 70 programs across Long Island and the five 
boroughs of New York City, assisting more than 45,000 people 
annually. Our unique programs provide services for people with 
substance abuse addictions, students experiencing learning 
difficulties, child victims of abuse or caught in the foster 
care system, frail elderly individuals needing support and 
guidance, and public assistance recipients seeking work.
    EAC assists people with basic living support, such as those 
who need help with utility payments. Due to the rising costs of 
energy, growing population of the elderly on fixed incomes, and 
the cold winters, these numbers are increasing daily.
    EAC has been administering the HEAP program since 1991. In 
the 2006-2007 heating season, we assisted 5,051 applicants. The 
program provides eligible households with benefits to assist 
with their heating and utility costs. EAC is under contract 
with the Nassau County Department of Social Services to process 
HEAP applications.
    Eligible HEAP applicants may also apply for additional 
services in our office. HEAP staff process applications for 
Verizon's LIFELINE Program, which offers discounted telephone 
services for eligible clients. Clients who have exhausted their 
HEAP benefits may also apply for Project Warmth, which help 
clients who are in immediate need of oil or who have been 
scheduled termination. Project Warmth benefits are provided by 
the United Way and LIPA.
    In addition to HEAP, EAC also implements the Weatherization 
Referral and Packaging Program to assist low-income families in 
meeting home energy and safety needs. WRAP helps to identify 
energy-related structural problems in homes and makes 
arrangements for the correction of these problems.
    Almost two decades of administering HEAP gives our agency a 
breadth and depth of experience with the program. It is our 
contention that with rising heating costs coupled with the high 
cost of living on Long Island, many residents would be cold, 
hungry and possibly homeless without HEAP.
    Applicants line up at our door starting at 7:00 a.m. when 
the HEAP season starts. They are anxious and afraid of what the 
winter will bring. Many are vulnerable senior citizens who fear 
having to make a choice between getting their prescribed 
medications or staying warm.
    I just want to share with you a brief vignette to 
demonstrate how essential HEAP is. Mr. Jones applied for HEAP 
assistance on a cold February morning. He was interviewed by a 
worker and submitted all of the required documents to process 
his application. The application was approved for an oil 
benefit of $400. He thanked the worker and left the office.
    About an hour later, we noticed Mr. Jones still sitting in 
the reception area. Once again, we informed him that his 
application was approved and that he would receive the oil 
within 72 hours. This very tall frail 80-year-old man looked 
the worker in the eyes and said, ``Yes, Ma'am. Thank you. I was 
just sitting here a while to warm up before I started walking 
home.'' Home was eight miles away.
    It turns out that he had run out of oil during the night, 
had no money and did not have an oil contract with a company. 
EAC staff immediately went into turbo mode, and while he 
waited, we were able to get him a new winter coat, blankets and 
paid for a taxi to take him home.
    Despite an increasing number of applicants, our agency's 
funding has remained set for the last 13 years. We currently 
receive $190,900 to operate HEAP and $30,916 for WRAP. With 
inflation and all other costs related to the program 
escalating, this has made it almost impossible to continue the 
program. Staff is severely undercompensated and, each year, 
they have to be laid off earlier in the season. As efficient as 
we are, waiting time for new applicants is now longer, 
averaging two and a half hours, as we do not have adequate 
staff. Despite our best efforts, we are losing ground.
    Heating costs for an average family using heating oil are 
projected to soar this year. Low-income Americans can least 
afford price increases. In 2007, the average American household 
will spend nearly $5,000 for residential energy services and 
gasoline. The 61 million households with annual incomes of 
$50,000 or less, the majority of American households, will 
spend 18 percent of their after-tax income on energy. In 1997, 
energy consumed just 10 percent of the after-tax income of 
these working families.
    HEAP has been a Godsend to the vulnerable population in 
Nassau County. The program needs to be reauthorized. However, 
reauthorization at the current level will not solve the 
problem. Agencies that implement HEAP need to receive enough 
money to properly serve their constituents in their time of 
need.
    Thank you very much.
    [The statement of Ms. Barlow follows:]

    Prepared Statement of Linda Barlow, Vice-President of Community 
                    Alternative Programs, EAC, Inc.

Overview
    Established in 1969, EAC administers over 70 programs across Long 
Island and the 5 boroughs of New York City, assisting more than 45,000 
people annually. Our unique programs provide services for people with 
substance abuse addictions, students experiencing learning 
difficulties, child victims of physical or sexual abuse or caught in 
the foster care system, frail elderly individuals needing support and 
guidance, and welfare recipients seeking work.
    EAC assists people with basic living support, such as those who 
need help with utility payments. Due to the rising costs of energy, 
growing population of the elderly on fixed incomes, and the cold 
winters, these numbers are increasing daily. Our home energy programs 
assist these low income families in meeting the cost of energy and 
utility expenses, safety needs and also identify energy-related 
structural problems in homes, making arrangements for correction of 
these problems.
    The Education and Assistance Corporation (EAC) has been 
administering the HEAP program since 1991. In the 2006/2007 heating 
season, we served 5,051 applicants. The program provides eligible 
households with benefits to assist with their heating and utility 
costs. EAC is under contract with the Nassau County Department of 
Social Services to process HEAP applications. Gross income includes but 
is not limited to salary, pension/retirement benefits, social security, 
unemployment benefits and worker's compensation. All applicants are 
interviewed by a worker to evaluate their application and determine 
eligibility.
    Eligible HEAP applicants may also apply for additional programs in 
our office. HEAP staff process applications for Verizon's LIFELINE 
Program, which offers discounted phone service for eligible clients. 
Clients who have exhausted their HEAP benefits may apply for PROJECT 
WARMTH benefits, which helps clients who are in immediate need of oil 
or who have scheduled termination notice for LIPA. Project Warmth 
benefits are provided through United Way and LIPA. Voter registration 
applications are also available for clients. Additional referrals are 
given for Food Stamps, Public Assistance and Emergency Assistance.

    Funding: Funding for EAC's HEAP program is provided by Nassau 
County Department of Social Services.

    In addition to HEAP, EAC also implements the Weatherization 
Referral and Packaging Program to assist low income families in meeting 
home energy and safety needs. Working in combination with the Home 
Energy Assistance Program, WRAP helps to identify energy-related 
structural problems in homes and makes arrangements for correction of 
identified problems.
    Weatherization is an essential part of assisting families in need 
of home energy assistance. In order to ascertain a household's needs, 
WRAP staff may conduct a home assessment to identity any apparent 
energy-related structural deficiencies. The WRAP Coordinator identifies 
any immediate needs necessary and assesses any other issues related to 
social, health or safety problems. If repairs are needed, WRAP staff 
serve as a liaison with the Weatherization Assistance Provider, helping 
to guide clients through the service process and working with the 
Weatherization Provider to ensure delivery of services. Recommendations 
may include insulation and caulking of windows and doors, repair of 
broken windows, replacement of doors, repairs on the heating system or 
wrapping of pipes and water heaters.
    Clients receive a directory outlining other agencies offering 
assistance with housing, home repairs, financial information, 
emergencies, weatherization, food pantries and crisis intervention.

    Funding: Funding for HEAP is provided by Nassau County Department 
of Social Services.
Successes
    Almost two decades of administering HEAP gives our agency a breadth 
and depth of experience with the program. It is our contention that 
with rising heating costs coupled with the high cost of living on Long 
Island, many Long Islanders would be cold, hungry and possibly homeless 
without the HEAP program. County residents line up at our door starting 
at 7:00 a.m. when the HEAP season starts. They are anxious and afraid 
of what the winter will bring. Many are vulnerable senior citizens and 
their issues are complex. They depend on HEAP to get them through the 
long winter months.
    I just wanted to share with you a brief vignette to show you how 
essential HEAP is. Mr Jones applied for HEAP assistance on a cold 
February morning. He was interviewed by a worker and submitted all of 
the required documents to process his application. The application was 
approved for a Regular Oil benefit for $400.00. He thanked the worker 
and left the office. About an hour later we noticed Mr. Jones sitting 
in the reception area and called him into the office. Once again we 
informed him that his application was approved and he would receive the 
oil within 72 hours. This very tall frail eighty year old man looked 
the worker in the eyes and said, ``yes Ma'am thank you, I was just 
sitting here for a while to warm up before I start walking back home.'' 
Home was 8 miles away, on this very cold and snowy day.
    It turns out he ran out of oil during the night and had no money 
for oil and did not have an oil contract with a company. He never 
mentioned this or the fact that his oil burner was completely off and 
needed a prime to start up again. He said that if he informed us that 
he needed a prime he would receive less oil and preferred to prime the 
burner himself. EAC staff immediately went into turbo mode, while he 
waited, we were able to get him a new winter coat, blankets and called 
and paid for a cab to take him home.
Challenges
    Despite an increasing number of applicants over the years, our 
agency's funding has remained stagnant for the last thirteen years. We 
currently receive $190,900 to operate HEAP and $30,916 to operate WRAP. 
With inflation and all other costs related to the program escalating, 
this has made it almost impossible to operate the program. Staff are 
severely under compensated and each year we have to lay them off 
earlier in the season. As efficient as we are, waiting time for new 
application's is longer (now averaging 2.5 hours) as we do not have the 
staff for adequate assistance. Despite our best efforts, we continue to 
feel like we are losing ground.
Conclusion
    Heating costs for an average family using heating oil are projected 
to soar this winter. Lower income Americans can least afford price 
increases. In 2007, the average American household will spend nearly 
$5,000 for residential energy services and gasoline--The 61 million 
households with annual incomes of $50,000 or less-the majority of 
American households--will spend 18% of their after-tax income on 
energy. In 1997, energy consumed just 10% of the after-tax income of 
these working families. HEAP and WRAP have been a God send to the 
vulnerable population in Nassau County. The program needs to be 
reauthorized . However, reauthorization without additional financial 
support will not solve the problem. Agencies and programs that 
implement HEAP need to receive enough money to properly serve their 
constituents in their time of need.
                                 ______
                                 
    Chairwoman McCarthy. Thank you, Ms. Barlow.
    Mr. Swanson?

 STATEMENT OF LARRY SWANSON, EXECUTIVE DIRECTOR, ACTION HOUSING

    Mr. Swanson. Chairwoman McCarthy, Ranking Member Platts of 
Pennsylvania and other members of the committee--and I would 
like to mention that we serve under--the weatherization program 
I am going to talk about--part of Jason Altmire's district who, 
I believe, is also a member of the committee. So I am one of 
his constituents in that matter.
    I want to thank the committee for giving me the opportunity 
to testify about something that is very important to us at 
ACTION-Housing. My remarks today represent both ACTION-Housing, 
which is a regional nonprofit housing provider and the single 
largest provider of weatherization services in the State of 
Pennsylvania as a nonprofit and the weatherization task force. 
The weatherization task force is the 42 nonprofit and public 
agencies in Pennsylvania who deliver energy conservation 
services in crisis, emergency and no heat services every year 
in Pennsylvania.
    This is a huge, really important program for us. My 
organization has been doing weatherization for 25 years. We 
have done about $50 million worth of weatherization 
improvements in the City of Pittsburgh, Allegheny County and 
Washington and Green Counties, which we also serve.
    Why is a nonprofit in housing so heavily engaged in energy 
conservation? The answer is simple: Our mission is to help 
people create safe, secure, affordable housing. Other than the 
cost of rent or for a mortgage, the single largest component is 
the utility cost that they face, including heating and cooling. 
So we have long been engaged in this.
    I have come here to support the continuation of the option 
for using LIHEAP funds for weatherization and encourage, as 
well, the expansion of the program. In Pennsylvania, we use 
LIHEAP funds both to do the traditional conservation measures, 
but also to implement a crisis no heat situation throughout the 
state. Last year, $27 million was used in LIHEAP in 
Pennsylvania for the energy conservation program. The energy 
conservation program is essentially a program that is involved 
in technical evaluation of air infiltration, the heat, the air 
that we either heat or cool in our environments, and that is 
the principle measure.
    The emergency no heat situation is a program where 
individuals who apply for LIHEAP cash assistance are given an 
opportunity to declare a no heat situation, and if they have 
one, they are immediately referred directly to the state 
weatherization services who, within 48 hours, have to intervene 
to determine whether it is a valid situation and intervene. 
Last year, 5,353 customers received that assistance in 
Pennsylvania.
    The weatherization work that we do based on the task 
force's own analysis of our own performance achieves 
conservation savings of 15 to 35 percent. That amounts to $323 
to $763 per household in our state, and it exceeds the one-time 
benefit of cash assistance.
    Why is there so much variation in what is saved? Well, 
Pennsylvania has a largely older housing stock. Our ability to 
intervene and provide the air infiltration measures varies 
tremendously depending upon the housing stock that we start 
with. Another factor is the quality of the heating equipment 
that we are dealing with.
    In other parts of the country, it is a combination of 
heating and cooling, and in the southern parts of our country, 
it is the cooling that is the primary factor.
    Much of our heating equipment in housing that is more than 
15 years old was designed for 50 percent and 60 percent 
efficiencies and operates well below 50 percent. The equipment 
that we are installing operates at 85 percent and 90 percent 
efficiencies, and in Pennsylvania, we go back and do an annual 
service for a couple of years afterward, and some of our 
customers stay with us for long term.
    Why is it important to Pennsylvania? Last year was an 
exceptional year, but most years, $15 million to $18 million, 
the full 15 percent allotted, is used for the conservation and 
the crisis intervention program. We serve 4,000 to 5,000 
customers a year out of the LIHEAP portion and then combine it 
with funds provided by the Department of Energy to make the 
difference. Many of these services that are provided on an 
emergency basis are minor in nature, but allow the restoration 
of heat. The program, this year, began on November 5. In our 
first week of operation, we had 118 referrals at my agency 
alone to intervene in situations with no heat.
    In my remaining time, I want to talk about the importance 
of LIHEAP funds to our system. We are able to build a larger 
scale operation than our 42 agencies and respond in a cost-
effective manner. In 2004, my agency joined with Allegheny 
County in its efforts to restore heat to 650 households that 
were without service due to the impact of Hurricane Ida. It 
occurred in late September. In a 45-day period, based on the 
capacity that we had in place because we had the crisis funds 
to continue to do work, we were able to restore heat in 650 
households in Allegheny County by the middle of December.
    This year, we had a small but significant for those 
affected flood situation where 100 families in Congressman 
Altmire's North Hills District were essentially without heat. 
Today, we are working with Allegheny County to provide heat for 
those households without heat below 150 percent of poverty, 
again using foundation and charitable support for those above 
that to get people back in their homes.
    Thank you very much.
    [The statement of Mr. Swanson follows:]

 Prepared Statement of Lawrence A. Swanson, Executive Director, ACTION-
                              Housing Inc.

    Madam Chairwoman and Committee Members: I am pleased to testify 
today in support of the utilization of LIHEAP funds for weatherization 
and emergency CRISIS based upon the experiences of my agency and the 42 
other provider agencies in Pennsylvania. We are a diverse group of 
agencies across the Commonwealth that deliver this important program. 
We represent non profit housing organizations, community action 
agencies and local public housing agencies. We use both private 
subcontractors and work crew models and mixes of those models to 
accomplish our work. We work in a State that is \1/3\ urban; \1/3\ 
small communities and \1/3\ rural. Pennsylvanian's use natural gas, 
electricity, heating oil, propane, coal and wood to heat their homes. 
And the State has developed a comprehensive program that responds to 
all these variables.
    Pennsylvania has seen strong leadership on a bi-partisan basis for 
some time. The Pennsylvania Department of Community and Economic 
Development (DCED) operates this comprehensive program and engages the 
operating agencies to design effective delivery systems. DCED also 
operates a training center for weatherization technicians, supports 
ongoing pilot programs and engages outside evaluators to help monitor 
the quality of the measures performs. This September the Governor and 
Legislature conducted a special session of the Legislature to examine a 
program for Energy Independence for Pennsylvania and is now considering 
a wide range of ventures that will assist our State. A centerpiece of 
this initiative is conservation of energy. It's the single biggest 
payback that we have today for the investment we make. Residential and 
commercial energy conservation have proven paybacks for investments and 
they can be implemented in the short term.
    My organization, ACTION-Housing, is a non profit housing 
organization that operates a diverse set of programs designed to help 
people achieve secure and self-sufficient lives. Founded in 1957 we 
have worked to develop affordable housing, deliver important programs 
that make homes safer and economically viable and a range or programs 
that help families and individuals become more self-sufficient once 
they have a stable housing environment. We operate in the City of 
Pittsburgh, Allegheny County and work extensively in the surrounding 
counties in various programs. ACTION-Housing is the largest single 
Weatherization provider in Pennsylvania and provides services for the 
City of Pittsburgh, \2/3\ of Allegheny County and the Counties of 
Washington and Greene.
    This includes the portions of the districts of Congressmen Altmire, 
Murphy, Doyle and Murtha. We have operated this program at scale for 
some 25 years and estimate that we have weatherized 22,000 homes and 
repaired or replaced 15,000 heating units in that time. The combination 
of LIHEAP weatherization and DOE weatherization has led to an 
investment of $ 55,000,000 in conservation during that period of time.
    All of these programs funded by 15% of the annual LIHEAP allocation 
in tandem with DOE funds have helped create a strong, vital network of 
agencies that provide high technology intervention in homes, respond to 
high priority needs and do so in a cost effective manner. This amounts 
to some $ 15-18,000,000 in each program year which is typically split 
between the regular weatherization programs and CRISIS interface 
efforts.
    Each of these provides critical work that makes a significant 
difference in the lives of Pennsylvania families and children. ACTION-
Housing and the Weatherization Task Force of Pennsylvania representing 
all 42 providers strongly support the retention of the option for 
States to allocate 15% of funds for weatherization and pledge their 
ongoing support for the effective implementation of the program.
The 2006-2007 Program Year
    The 2006-07 program year was an exceptional one in Pennsylvania. 
Though annual allocations from LIHEAP average $ 16,000,000 there were 
additional funds that were released from contingencies. As a result the 
allocation reached some $ 27,000,000 last year. Funds were utilized for 
two distinct components for the program. The basic energy conservation 
program which used some 64% of the LIHEAP transfer ($17,000,000) and 
the CRISIS interface that works with LIHEAP cash assistance customer 
who have a no heat situation used 36% of the funding available 
($10,000,000). Each of these programs is described below.
Energy Conservation With LIHEAP F nds
    The basic energy conservation program enables low income families 
to permanently reduce high energy usage. Weatherization aims to reduce 
the energy costs for low--income families, primarily the elderly and 
families with children, by making energy efficient improvements to the 
home. According to research conducted by the Pa Weatherization Task 
Force ``At current Pa energy costs, the investment in energy 
conservation saves more in one heating than the average cash assistance 
grant in Pa.
With Energy Conservation the Savings Continue Year After Year
    In Pennsylvania Weatherization providers embrace the concept of 
``whole house weatherization''. Under this concept the house is treated 
as a single energy consuming-system rather than a loose collection of 
unrelated measures. Using this approach weatherization providers 
provide the best combination of measures for reducing total energy 
consumption.
    Our standard weatherization treatments include assessment, 
selection of measures, installation, and quality verification. Trained 
technicians use advanced computer software and diagnostic equipment to 
identify energy saving measures that are cost effective and safe. 
Common measures include the installation of insulation, ventilation, 
heating and cooling tune-ups, replacement of units of energy efficiency 
and/or safety, air sealing and installation of energy efficient 
lighting and appliances.
    Some 9200 households were weatherized in the program year with 
savings ranging from 15-35%. The use of LIHEAP funds enabled providers 
around the state to increase overall production in the energy 
conservation about 40% from the base of funds provided through the DOE 
funds. In many cases these funds not only served many people in need 
but also provided the scale of work necessary for an operating agency 
to function effectively and maintain its workforce. The key to capacity 
over the long term is a qualified and trained staff so that agencies 
can achieve effective savings in the work performed.
CRISIS Interface With LIHEAP Funds
    This program is provided in every County in Pennsylvania and links 
those families who receive cash assistance but have no operable heat 
source with weatherization providers. During the winter heating season 
(November through March) local cash assistance agencies refer customers 
eligible for LIHEAP but without safe and operable heating systems to 
the network of weatherization providers. These repairs and replacements 
are performed on a 48 hour emergency basis and include emergency repair 
or replacement of heating systems, fuel line replacement, and hot water 
systems in low income households. In the 2006-07 year some 5,353 
families were assisted with emergency repairs of primary heating 
systems.
Key Facts Provided by the Weatherization Task Force Reports
    The Weatherization Task Force provides annual updates based upon 
who has been served across the Commonwealth as well as estimates of 
future energy costs. A few of those key findings are repeated below 
from recent reports:
     Weatherization results in average savings of 15-35% in 
energy consumption among those served. Homes that receive both air 
infiltration treatments and heat plant repairs provide the greatest 
savings.
     Low income families (those at 150% of poverty and below ) 
will spend about 26.7% of their income in the total energy burden in 
the coming year. This compares to all households who spend about 4% of 
their budgets for energy.
     Conservation is the lowest cost--proven source of energy 
and providing it to those with the economic means has the benefit of 
achieving conservation that would not otherwise occur.
     The savings associated with weatherization at the 15-35% 
level equate to savings of $ 323 to $ 763 per year and exceed the 
annual payments for LIHEAP cash assistance in Pennsylvania and have 
annual benefits going forward.
     The projected increases in electric, heating oil and gas 
prices in Pennsylvania for the 07-08 season will only increase the 
importance of the LIHEAP energy conservation program for the future.
Final Thoughts
    The retention of the 15% State Option for LIHEAP funds is critical 
to the operation of an effective program in Pennsylvania. The diversity 
of the state and its needs have been best met by a well diversified 
program operated in tandem with LIHEAP cash assistance so that low 
income customers can receive help with paying their energy bill, reduce 
future expenses and live in a safe environment is the key to providing 
secure environments for our families and children. The use of these 
funds in Pennsylvania has meant that the state based program can reach 
through conservation 40% more families each year, provided a linked 
emergency heat program and given operating agencies the scale necessary 
to be effective over time. On behalf of the Weatherization Task Force 
and all 42 operating agencies we thank the committee for its support.
                                 ______
                                 
    Chairwoman McCarthy. Thank you, Mr. Swanson.
    Mr. Manning?

  STATEMENT OF DAVID MANNING, EXECUTIVE VICE PRESIDENT, U.S. 
EXTERNAL AFFAIRS, NATIONAL GRID, ON BEHALF OF THE AMERICAN GAS 
                          ASSOCIATION

    Mr. Manning. Thank you very much, Madam Chairwoman, and I 
want to thank you and the members of the subcommittee.
    My name is David Manning, and I am an executive vice 
president with Key Span, now National Grid. We serve over 3 
million gas customers--and more electric customers--largely in 
urban areas, such as New York, but also in some of the very 
challenged areas in upstate New York, Worcester, Massachusetts, 
some portions of Long Island where the economy is struggling.
    I am pleased to have this opportunity as well to testify on 
behalf of the American Gas Association in strong support of 
additional federal funding for the life-saving Low Income Home 
Energy Assistance Program, which we are discussing, known as 
LIHEAP. AGA represents over 200 energy utility companies that 
deliver natural gas to more than 172 million Americans. For the 
purpose of home heating, approximately--all of you heard Mr. 
Caruso indicate--nationally 58 percent of homes depend on 
natural gas for their heat. In our particular territory, which 
is a larger oil heat region, that number, in fact, is lower, 
but it is still a major component of our energy needs.
    First, I would like to thank, Madam Chair, Ranking Member 
Platts, other members of the subcommittee that I know, for 
setting the stage for the fiscal year 2008 appropriation of 
$2.4 billion for LIHEAP. We appreciate this demonstration of 
support, and we encourage you strongly to continue to set the 
highest possible authorization level that you can. For 2009, we 
request that the subcommittee establish a LIHEAP authorization 
funding level of at least $5.1 billion.
    Again, I am the last speaker. I think it is almost self-
evident, but I will continue. We believe it is absolutely 
essential to increase our nation's home energy commitment to 
America's most vulnerable citizens. AGA shares the concerns of 
many prominent organizations, but actual LIHEAP appropriations 
remain substantially below the current $5.1 billion authorized 
in fiscal year 2007. Interestingly, LIHEAP's last appropriation 
was just 17 percent higher than the original funding amount 
that Congress approved at the program's inception more than a 
quarter century ago, and yet during that period, the cost of 
the Consumer Price Index has gone up 133 percent.
    Without question, more and more households need help paying 
their energy bills. The number of households eligible for 
LIHEAP funding has increased by 78 percent since the program 
began. Because funding has not kept pace with the growing need, 
an increasing percentage of eligible families simply cannot get 
help.
    In fact, despite the billion-dollar increase in the program 
in the fiscal year 2006, fewer homes got LIHEAP assistance than 
when the program started a quarter century ago. In 1981, the 
needs of more than 12 million eligible households were unmet. 
By 2006, the unmet need grew to 30 million.
    Higher heating and cooling bills hit low-income households 
the hardest. The energy burden on LIHEAP households was more 
than six times that for non-low-income households. LIHEAP 
recipients spend 20 cents out of every dollar on energy. Their 
burden is also increasing, leaving them with less for food, 
shelter and health care, and often making very difficult 
choices.
    I want to stress that the private-sector assistance is 
substantial, but these efforts cannot substitute for the 
decreased purchasing power of federal funds.
    Virtually all local gas utilities have programs and 
policies that enable low-income customers to manage their gas 
bills, such as deferred budget payment plans, payment 
counseling, weatherization programs, voluntary fuel funds, 
subsidized rates, matching grants for improved buildings, and 
appliance efficiencies. In 2006, utility programs generated 
$1.8 billion in low-income customer assistance. These were 
often paid for through very modest surcharges for consumers.
    AGA surveyed its membership additionally, however, on 
programs to assist low-income customers. Fifty percent provide 
shareholder contributions to low-income customers, 45 percent 
offer rate discounts, 38 percent support fuel funds, 35 percent 
forgive part or all of past arrears.
    It is evident that while states, local governments and the 
private sector have demonstrated their capacity to develop 
creative and effective programs to address energy assistance 
needs, collectively, these programs can only modestly 
supplement the essential federal support for LIHEAP and 
weatherization programs.
    In the future--and this is important--it is expected that 
the U.S. will adopt legislation to address climate change. 
Whether utilities will have to purchase credits to purchase 
emission allocations, whether they will have to pay additional 
taxes or fees, the legislature will likely impose additional 
costs in fossil fuel. I strongly recommend that this committee 
authorize an ongoing study of the potential cost impact of 
climate change legislation on the LIHEAP program and its 
recipients. Every increase in energy cost reduces the ability 
of this program to serve its mission.
    As the nation girds for winter, it is clear that LIHEAP 
must retain its $5.1 billion authorization amount and be 
infused with additional resources to receive an appropriate 
appropriation of at least $3.2 billion.
    Thank you very much. I will welcome your questions.
    [The statement of Mr. Manning follows:]

  Prepared Statement of David Manning, Executive Vice President, U.S. 
    External Affairs, National Grid, on Behalf of the American Gas 
                              Association

Executive Summary
    The Increasing Burden of Energy Costs on Low-Income Customers 
reports that:
    The number of households eligible for LIHEAP has increased by 78 
percent since 1981, when the program was created.
    Since the creation of LIHEAP in 1981, the consumer price index has 
increased by 133 percent, however funding for the program has increased 
by only 17 percent. Current funding should be $4.2 billion just to keep 
pace with inflation--and without taking into account the increased 
number of low-income families.
    Low-income households typically spend one-fifth of their annual 
income on home energy bills--more than six times the level that other 
income groups are spending. The proportion of income going towards home 
energy costs is growing despite notable conservation efforts on the 
part of low-income households.
    A survey of gas utilities showed that the total amount of natural 
gas customer uncollectible accounts rose 39 percent between 2003 and 
2006, indicating that customers face increased difficulty in paying 
their home energy bills.
    In 2005, utilities provided $1.8 billion in program assistance to 
help needy families manage their energy bills. Despite this significant 
level of support, the need continues to be far greater than utility 
programs are able to fulfill, despite our best combined efforts.
    Good afternoon, I am pleased to have an opportunity to testify, on 
behalf of the American Gas Association, in strong support of additional 
federal funding for the life-saving Low-Income Home Energy Assistance 
Program (LIHEAP).
    The American Gas Association, founded in 1918, represents 200 local 
energy utility companies that deliver natural gas to more than 64 
million homes and businesses throughout the United States. A total of 
69 million residential, commercial and industrial customers receive 
natural gas in the US, and AGA's members' deliver 92 percent of all 
natural gas provided by the nation's natural gas utilities. AGA 
represents 189 local natural gas utilities that deliver gas to almost 
60 million homes and businesses in all 50 states. For the purpose of 
home heating, approximately 52 percent of LIHEAP households use natural 
gas; 21 percent, electricity; 10 percent, fuel oil; and 11 percent 
propane (2005 data).
    National Grid is an international energy delivery company. In the 
U.S., National Grid (www.nationalgridus.com) is the largest distributor 
of natural gas in the northeastern U.S., serving approximately 3.4 
million customers in New York, Massachusetts, New Hampshire and Rhode 
Island. It also delivers electricity to approximately 3.3 million 
customers in Massachusetts, New Hampshire, New York and Rhode Island, 
and manages the electricity network on Long Island under an agreement 
with the Long Island Power Authority. National Grid is the largest 
power producer in New York State, owning 6,650 megawatts of electricity 
generation that provides power to over one million LIPA customers and 
supplies roughly a quarter of New York City's electricity needs.
    First, I would like to thank Chairwoman McCarthy, Ranking Member 
Platts, and members of this Subcommittee for setting the stage for a 
Fiscal Year (FY) 2008 appropriation of $1.98 billion for LIHEAP, with 
an additional $431 million for emergency assistance. We appreciate this 
demonstration of support for LIHEAP, and encourage you to continue to 
set the highest possible authorization amount you can. If you do, you 
will afford your appropriations colleagues the essential maneuvering 
room they need to further improve funding for both LIHEAP and the 
Weatherization Assistance Program.
    For FY2009, we request that the Subcommittee establish a LIHEAP 
authorization funding level of at least $5.1 billion, and we join with 
the bipartisan appeal of 35 of our nation's governors, who earlier this 
year urged the congressional leadership in establishing at least a $3.2 
billion appropriation for the program.\1\ Notably, we also stand with 
the Governors on the matter of further supplementing funds in the near-
term, should that opportunity present itself.\2\ Additionally, we also 
recognize that many states exhaust their available grant dollars early 
in the fiscal year, and it is for this reason that AGA continues to 
also support the National Energy Assistance Directors Association 
(NEADA) recommendation that LIHEAP appropriations be forward-funded.
---------------------------------------------------------------------------
    \1\ http://www.neada.org/comm/correspondence/070215.pdf
    \2\ Ibid.
---------------------------------------------------------------------------
    We believe it is absolutely essential to increase our nation's home 
energy commitment to America's most vulnerable citizens who qualify for 
LIHEAP. It's worth remembering that virtually all LIHEAP-eligible 
households live below, at, or just above our nation's official poverty 
level, and further--that they shelter some combination of the elderly, 
the disabled, or the very young.
The Need for Increased Funding
    The FY07 LIHEAP program was authorized at a level of $5.1 billion a 
year. Under the current Omnibus funding arrangement, this is also the 
present threshold. However, AGA shares the concerns of many prominent 
organizations that actual LIHEAP appropriations remain substantially 
below that authorization amount. LIHEAP appropriations briefly improved 
in FY 06, when $3.2 billion was committed to help low-income households 
with their home energy needs. Unfortunately, LIHEAP funding then fell 
to $2.2 billion in FY 07. Interestingly, that FY 07 funding level was 
just 17 percent higher than the original funding amount Congress 
approved at the program's inception more than a quarter-century ago. By 
way of comparison, over the same time period, the consumer price index 
rose 133 percent. Had LIHEAP kept pace with inflation, annual 
appropriations would now be $4.2 billion.
    More and more households need help paying their energy bills. The 
number of households that are eligible for LIHEAP funds has increased 
15 percent over the past five years and 78 percent since the program 
began. Since funding has diverged from the growing need for energy 
assistance, an increasing percentage of people that are clearly 
eligible for it, simply cannot get the help they need. In fact, fewer 
homes got LIHEAP assistance in FY 06 than when the program started a 
quarter-century ago. In 1981, almost 20 million were eligible for 
LIHEAP assistance, and the needs of more than 12 million (64 percent) 
households went unmet. By 2006, 35 million households were eligible, 
and the needs of almost 30 million (84 percent) went unmet.
    The Department of Energy reports that consumers' heating bills will 
be higher across the board. Overall, consumers could face an average 
increase of 11 percent in their heating bills, and some must gird for a 
whopping 26 percent increase this winter. These percentages are 
premised upon weather forecasts that are close to normal. If the 
temperatures drop below normal, the increases in heating bills will be 
even higher.
    Higher heating and cooling bills hit low-income household hardest. 
The term ``energy burden'' refers to the portion of a household's 
income that is spent on home energy costs. An average American family 
spends about six to seven percent of its total income on household 
energy. Non-low income households (with incomes above the LIHEAP 
federal maximum income standard) have energy burdens of only three 
percent or less. The energy burden on LIHEAP households is more than 
six times that of a non-low income household. Not only must LIHEAP 
recipients' spend 20 cents out of every dollar on energy, their burden 
is also increasing, leaving them with less for food, shelter and health 
care.
    Because of rising costs, many customers cannot meet all their 
obligations, and many are falling behind on their energy bills. 
Customers that have difficulty paying their energy bills are an 
increasing problem for utilities.
    NEADA estimates that 1.2 million households were disconnected and 
lost utility services in the spring of 2007 due to non-payment 
problems.
    A National Regulatory Research Institute report shows that the 
percentage of gas utility accounts that are past due rose from 16.5 
percent in 2001 to 21.0 percent in 2006.
    The average amount past due for a gas account rose 27 percent--from 
$263 in 2001 to $334 in 2006. Furthermore, this trend appears to be 
increasing. Another study suggests uncollectible natural gas utility 
expenses increased 39 percent between 2003 and 2006.
Low-Income Households Are Reducing Their Energy Needs
    Many low-income households have made great strides in reducing 
their energy consumption. The amount of energy used for space 
conditioning by these families declined 26 percent since 1981, in part 
due to conservation efforts funded independently or through LIHEAP and 
utility conservation programs. Low-income households reduced their 
space heating energy use by 36 percent since 1981.
    Despite these conservation efforts, the rising cost of energy over 
that time period has nonetheless caused home energy bills to rise, 
particularly heating bills. From 1981 through 2005, overall energy 
expenditures for space heating and cooling for LIHEAP-eligible 
households increased 37 percent.
Private Sector Assistance Is Substantial, but Cannot Substitute for 
        Federal Funds
    Over the years, many private sector and utility-initiated energy 
assistance programs have been launched to supplement the basic LIHEAP 
program. For example, virtually all local gas utilities have programs 
and policies that enable low-income customers to manage their gas 
bills--such as deferred and budget payment plans, payment counseling, 
weatherization programs, voluntary fuel funds, subsidized rates, and 
matching grants for improved building and/or appliance efficiencies 
LIHEAP has also received strong support from a variety of community-
based social service organizations such as Catholic Charities, the 
Salvation Army, the National Fuel Funds Network and churches and 
synagogues.
Utilities
    Many utilities administer, sponsor, and promote programs to augment 
LIHEAP, and in 2006 utility programs generated $1.8 billion in low-
income customer assistance. Typically, state and local policymakers 
collaborate to initiate and/or approve these programs. The costs for 
these programs are often recovered through a very modest surcharge. 
Further, and oftentimes, utility stockholders cover at least a portion 
of these costs. These programs do not include past-due customer debts 
that a utility must eventually write off as uncollectible.
    During the spring of 2006, AGA surveyed its membership on their 
programs to assist low-income customers. Of the 107 respondents with 
low-income customer programs:
    45% offer rate discounts
    35% forgive part or all of past arrearages
    38% support fuel funds
    50% provide shareholder contributions to assist low-income 
customers
    10% offer a discount on the reconnection fee to low-income 
customers that had been disconnected due to inability to pay
    35% have other programs
    The ``other'' categories include weatherization programs, universal 
service funds, special budget billings, and matching of customer 
donations. Nearly three-quarters of respondents (71%) had more than one 
program in place to assist low-income customers.
State & Local Governments
    In addition to regulating utility assistance programs, state and 
local governments also provide direct funding and/or provide tax 
incentives to assist households in paying or reducing their home energy 
bills. In 2006, state and local governments provided $739 million for 
this kind of assistance. The governments fund these programs through 
general or special taxes as well as other sources.
Fuel Funds
    These charitable programs are typically a partnership between fuel 
funds, community-based organizations (churches, synagogues, charities, 
etc.), local government agencies, and utilities. Fuel funds are 
dedicated to raising and distributing money for energy bill-payment 
assistance. Religious and other community programs assist households 
with utility bills as part of their charitable work. These programs are 
funded primarily by donations. In many instances, the utility will 
solicit contributions (e.g., by way of bill inserts), while government 
and community organizations will identify the qualified households that 
can benefit, and the community organizations will distribute the 
assistance. In 2006, fuel funds and other charitable organizations 
provided more than $103 million for energy assistance.
Other
    Other parties that provide energy assistance to low-income 
households include faith-based/community groups, landlords 
(weatherization improvements) and fuel suppliers (bulk fuel discounts 
and needs-based discounts). These parties provided a total of $60 
million in energy assistance in 2006.
Despite All These Good Works--the Federal Role in LIHEAP Remains 
        Absolutely Essential
    It is evident that while states, local governments, and the private 
sector have demonstrated their capacity to develop creative and 
effective programs to address energy assistance needs, collectively 
these programs can only modestly supplement the essential federal 
support for the LIHEAP and Weatherization programs.
C-SNAP: Without LIHEAP--Children Suffer Gravely
    Just last month, the Children's Sentinel Assessment Program (C-
SNAP) linked rising fuel prices to the health and well being of poor 
children. Dr. Deborah A. Frank, a principal investigator of the report, 
explained ``we know there is a medicine that is partially effective in 
protecting children during the current epidemic of the 'heat or eat' 
dilemma.'' She pegged LIHEAP as an effective medicine to improve the 
well-being of poor children, and revealed that children in income-
eligible families who do not get LIHEAP compared to similar children in 
income-eligible families who do, were more likely to grow poorly, and 
to have to be hospitalized. But, like a scarce vaccine, LIHEAP reaches 
only a fraction of the children at risk. Babies and toddlers in energy 
insecure households are most likely to suffer poor health, require 
hospitalization, have developmental problems, and lack adequate food.
    When families do not have access to sufficient energy, they often 
resort to unsafe heating methods and cannot refrigerate or prepare 
food. It is for reasons like these that we should all be troubled that 
in 2006, only 16.1% of LIHEAP-eligible households were helped. Today's 
hearing is an opportunity to spotlight this crisis, and to begin to 
remedy it.
Efforts to Reduce Greenhouse Gas Emissions Will Increase Energy Prices 
        Even Further
    Congress is demonstrating substantial interest in materially 
addressing the challenge of global climate change. Several legislative 
proposals have been introduced, and are moving through the legislative 
process. Strategies proposed so far are widely anticipated to result in 
increased energy costs for all consumers, regardless of income. The 
need for LIHEAP assistance will grow even more once these measures are 
put in place. AGA believes that climate change legislation will 
absolutely necessitate increased LIHEAP funding.
Support for LIHEAP is strong and widespread
    The American public supports federal energy assistance for low-
income households. A national poll conducted in September 2006 found 
that by a 74 percent of all Americans support the Low Income Home 
Energy Assistance Program. Moreover, 72 percent of all Americans 
responding to the survey believe that Congress should increase funding 
for LIHEAP.
Conclusion
    The need for LIHEAP assistance is much greater than the coverage 
currently provided by current federal appropriations for this purpose. 
AGA is aware that the number of at-risk households across our nation is 
rising. As our nation girds for winter, and also prepares to deal 
forthrightly with the added challenge of global climate change, it is 
clear that LIHEAP must retain its $5.1 billion authorization amount, 
and be infused with additional resources to achieve an appropriation of 
at least $3.2 billion. To paraphrase C-SNAP's Dr. Frank, LIHEAP is a 
precious, life-saving vaccine, and on behalf of the members of the 
American Gas Association, I respectfully urge you to aggressively 
dispense it to at-risk Americans struggling to heat and cool their 
homes.
                                 ______
                                 
    [Additional submission from Mr. Manning follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                 ______
    
    Chairwoman McCarthy. Thank you, Mr. Manning.
    Listening to your testimony and reading your testimony, one 
of the things that became perfectly clear to me is that the 
association between heating for those homes and--by the way, 
the majority of homes that you assist with are hardworking 
families. Most of them have two or three part-time jobs, but 
they are working. Then, obviously, we are looking at those that 
are disabled, which are low-income jobs when they go out into 
the workforce, then, obviously, those that are senior citizens 
who can possibly not work. Again, speaking as a nurse, I am 
looking at the overall picture.
    I know in your testimony, Mr. Manning, you went into it a 
little bit deeper on those that cannot heat their homes most 
likely do not have enough money for food or even their 
medicines. So they are making choices on what they are going to 
be doing. The organizations that are out there, you know, that 
are helping, I also heard that they are cutting back because 
they do not have enough money to help those that need it the 
most.
    So it is very frustrating for certainly a number of us that 
want to make sure that those that--and I do believe the federal 
government has a role to take care of those that cannot take 
care of themselves. I believe in that with all my heart and 
soul since I have been here, and the majority of people that we 
have seen being helped through the district office, again, are 
the working poor. They are not looking for a handout. They want 
to work.
    And yet when we look at the children, we are sending them 
into the same cycle. We know that if you have a warm home, food 
on the table, are healthy, those children thrive, and yet we 
see those that do not have those ingredients do not thrive. We 
in the end, the community--the state, end up paying more money.
    So I believe that we need to strengthen our public-private 
partnerships and help states to find ways to work with 
companies to increase the reach of LIHEAP without lowering the 
benefits of LIHEAP. All of you talked about, you know, how we 
need the extra money. You know, hopefully, we will be able to 
override some the vetoes and be able to give the services that 
I believe that should go out to our citizens at this particular 
time.
    So, with that, I would like to ask all of you, we all know 
you need more money, we all know that. Are there better ways of 
trying to get the services out? And I am glad that Mr. Swanson 
brought up, you know, it is not just heating. It is doing the 
energy part of the home because the elderly homes--I know in my 
neighborhood, I have five or six neighbors that were there when 
I was a very little girl, and I know those homes have not been 
touched over the years. So I could see the heat probably going 
out the windows just about.
    So what else can we do? We will fight for the money. I 
mean, we always will. But is there any other way to reach out 
to those that need the help most, and how do you turn people 
away? I mean, that has to be the hard job for all of you.
    With the statistics Mr. Caruso had mentioned, one of the 
other things that I am concerned about is, you know, I am 
seeing in my state and especially on Long Island people are not 
spending, so the local taxes are not being collected, and 
programs that Nassau County runs might have to be cut back, 
too, and I am sure that is going to be happening all over the 
country. So I am looking to each and every one of you on 
helping us with maybe some solutions that we can also look at.
    Mr. Wolfe. Well, one thing that we have noticed is that 
there are new areas of concern. Medicaid has these new programs 
to keep people out of nursing homes, and what we are finding is 
that some of the elderly people are getting into shutoff 
situations. So I think that we need to almost rethink the 
LIHEAP program.
    When it was first started, it was a very focused program. 
There were very few elderly living at home. If you were frail 
elderly, you were in a nursing home. So we have new 
populations. There are new populations of families with young 
birth-weight babies. Thirty years ago, often, these babies did 
not survive, and, often, they are low income. So we have a 
growing population of vulnerable households, and so we need to 
revisit the shutoff rules for those families. We need to 
revisit how we target funds to help them.
    And then I think we also need to really think through as a 
grant, rather than an entitlement--it is currently designed to 
only reach about 17 percent of the population. So I think we 
need to think, you know, how can you use energy assistance to 
help both working families who work, still to go to work and 
take care of the home, and I think this is really an important 
niche piece, and we have not really addressed it in terms of 
2007.
    It is really a program design for the early 1980s, and so I 
guess if I was going to make a recommendation, it is maybe time 
for all the different partners, both the utility partners, the 
way we fuel, the states and everyone to sit down and say, 
``With much higher prices than we had before, what do we want 
the Energy Assistance Program to look like?''
    And then the last piece is how does it tie into and affect 
with the weatherization? You know, the Energy Information 
Administration does this wonderful survey every couple of 
years, and the last one showed that low-income families used 
about 22 percent or 27 percent, I think, more energy per square 
foot than non-low-income people because they have older 
appliances, they have older furnaces, and there is a lot of 
potential there for energy savings if we start thinking about 
low-income people not just as needing assistance, but as being 
able to contribute towards climate change legislation for 
efficiency.
    Chairwoman McCarthy. Thank you.
    Ms. Barlow?
    Ms. Barlow. You had mentioned getting the private sector 
more involved, and I think that is something we really need to 
do. Our agency has been very aggressive over the years in 
seeking funding from foundations and getting private grants, 
and yet even within our own agency, HEAP is not considered one 
of the sexier topics and sometimes falls to the bottom. I think 
we need to market this program in terms of how it affects 
families and that it is an extremely worthwhile program and get 
the private sector more involved.
    At one point, we had approached Key Span for private 
funding. We continue to do that type of thing. Unfortunately, I 
do not think we can continue to rely on government funding, but 
somehow make it an area of concern that affects all Americans 
and market it in such a way that the private sector thinks this 
is something that they want to put their money towards.
    Mr. Swanson. I would like to add that, first of all, I am 
embarrassed that Mr. Manning asked for expansion of LIHEAPs, 
and I did not do that. So I am personally embarrassed, but I 
will get over it.
    I attended a meeting last week in this town when Jonathan 
Fanton spoke, who is the president of the MacArthur Foundation, 
one of the large private charitable foundations in the country, 
and he talked--in the other part of my business, housing, 
affordable housing preservation--about the need to be bold, the 
need to see new opportunities and reach beyond where we are, 
and I think that is what the Chair is suggesting here. We need 
to think bigger about this.
    I think a dramatic expansion of the federal funding 
combined with state initiatives--in our state, as I am sure 
Congressman Platts knows, we had a special session of the 
legislature in which we talked about a major investment of 
state funds, I think it was about $800 million, on a whole 
range of conservation measures.
    Conserving energy will help. We still have the issue of how 
those after that can afford the utilities, and I think the 
utilities and the nonprofits and government working together on 
the state level can make a lot of impact. But I think it is 
time to be bold because I do not think the energy prices are 
going down, and I do not think that we can continue to do what 
we have been doing in the past.
    Mr. Manning. Madam Chair, if I could just go forward, we 
have recently received a grant request from the EAC which is 
going to be accepted, and, again, wisely they are looking to 
the private sector for resources to manage their programs and 
develop programs so that the money goes purely to those in 
need, and I think that is an important piece, that they are not 
looking to the LIHEAP funding for their needs. They are going 
to look to people like us for that, and that is appropriate, 
and we need to be there, and we will be there.
    We also need to raise the awareness because with bill 
inserts, we have been raising about $200,000 plus per year from 
our customers on Long Island, just Long Island alone. That is 
from bill inserts, just talking about this concern. I do not 
read the bill inserts, and I write them.
    So I think there is an opportunity there to raise awareness 
among the community, but, at the same time, the community must 
know that, in fact, we need to help those who are most in need, 
and it has to be spread across the population. So I do think 
that the funds that we have requested must be there.
    Also, I want to tip my hat to those doing weatherization. 
Clearly, we are very focused ourselves in better programs to 
provide facilitation and incentives to weatherize, to reduce 
energy consumption. You pointed out yourself that there is a 
lot of education there. Mayor Bloomberg just recently pointed 
out that he was unplugging his cell phone charger because he 
did not realize that it was still running when he was not home 
and his phone was with him. So I think there is an education 
function.
    I think there is an additional funding function. I think it 
hits those in the cities. I think it hits those in the rural 
areas. I think that this is really a national crisis, and I 
think it is driven, in fact, by the fact that I do not think 
any of us, those of us in this business--Mr. Caruso and I have 
been having conversations about energy prices for 20 years, and 
maybe he anticipated this. I did not.
    So I think what has happened now is that we really do have 
a tremendous issue before us, and I think it is our 
responsibility to try and provide additional education in terms 
of how to manage these issues, provide additional incentives 
and facilitation for those who are least able to do so to use 
less energy and, of course, provide more funding and provide 
more partnership dollars just as we are doing with EAC.
    Chairwoman McCarthy. Thank you.
    Mr. Platts?
    Mr. Platts. Thank you, Madam Chair.
    Mr. Wolfe, in your testimony, you talked about the 
realities of where we are today, and perhaps as many as 10 to 
20 percent of eligible families will likely not get assistance 
this year because instead of reducing down the grant, we are 
going to reduce the number. You know, the way the bill passed 
out of conference and we passed it in the House, it is about a 
$2.4 billion block grant and contingency. What do you think 
that number would be if we were to not have that 10 to 20 
percent cut, but no increasing grant amount? What do you think 
the number would have to be?
    Mr. Wolfe. There is no one answer to that, but, basically, 
in 2006, when we had the extra billion dollars and funding was 
at $3.1 billion, that was adequate to meet the needs for about 
5.8 million households. States were able to increase their 
grants to adjust to rising prices. In 2007, this last year, 
some states carried money forward from that $3.1 billion, and 
that sort of helped keep the balance.
    Going to 2008 where the extra $250 million is certainly 
welcome, the thing also is we do not know when it will be 
released. You know, every year, it is a fight with the 
administration to get these dollars out there, and so you 
cannot count on them. But what the states are saying is that 
the appropriation has not kept up with the increased energy 
prices. That is the real problem.
    And when you look at the Northeast especially with heating 
oil or the Midwest or states like Texas that use propane, we 
are very worried about those places because what should happen 
this year is you should have enough money because especially 
elderly families, people who grew up during the depression, do 
not like to ask for help. The prices are so high that we expect 
people to be coming in that we did not see last year.
    So, when I initially put my testimony together, I assumed 
we would be going to about 6.2 million, 6.3 million households, 
and then as I was talking to the states this last week, they 
were all saying the same thing, ``We have to cut the program 
back in order to provide a meaningful benefit.''
    And now there is another piece to add to that, too, and I 
think this is where it is getting very troubling. Energy 
assistance is becoming a checkerboard across the country. Some 
states are providing significant supplemental assistance. So 
combined LIHEAP will get through. Other states for different 
kinds of reasons provide much less assistance or none. So, in 
those states, if you are low income, you are much worse off.
    So we are looking at a situation developing across the 
country where some parts of the country, there could be an 
adequate package of services to help people both in the winter 
as well as the summer. Other states, it is much less. And I do 
not think that is a good situation for the country.
    I think we have to have a core basic appropriation level, 
and, again, you know, this is not an entitlement. There is no 
magic number--$5.1 billion would be much, much better, but $3.1 
billion was enough that you could see in states the ability to 
work out new partnerships with utilities. It seemed much 
better. It seemed like we were bringing enough money to the 
table that you could sit down with the utility companies that 
are delivering services and say, ``Well, let us work out a 
better program this year,'' and there was much more 
willingness. So that to me seemed like the minimum level to 
keep the program going.
    Mr. Platts. Is there a state that you would point to as 
being a leader in the state assistance complementing----
    Mr. Wolfe. Well, a number of different models, but I think 
states where you can see, you know, good examples--New York for 
sure, Massachusetts has strong programs, California, 
Wisconsin--where you see states do a combination of things. For 
example, like in Pennsylvania, where you have strong shutoff 
protection rules during the winter heating season. You have a 
combination of shutoff protections, arrearage management 
programs, as well as discounts on electric and gas, as well as 
supplements for delivered fuels. When you put them together, 
you come up with an ability to pay at least half the bill, and 
that seems to be important in order to keep people connected.
    The other thing that we are very worried about is the 
arrearage management programs that we have developed over the 
years with utilities where, in a sense, a family runs out of 
money, cannot pay the bills during the shutoff moratorium, in 
the shutoff moratorium, that the matching part offered to help 
them pay the difference--we are finding more and more families 
just do not have any money. They really do not have anything to 
contribute, and so that is also alarming us and points to the 
fact that the $2.1 billion or $2.4 billion is not enough now to 
meet the needs.
    Mr. Platts. Mr. Caruso, you touched on the different 
areas--oil, natural gas, propane--and this is related but not 
to the LIHEAP program. It is related because it impacts the 
cost and how far the funding goes. When you talked about 
electricity, you talked about a 3 percent projected increase. 
Is that mainly because electricity is heavily coal-fired plants 
and so there is less volatility?
    Mr. Caruso. Yes, it is. Fifty percent is coal generated, 
and the coal price stays relatively low, and 20 percent is 
nuclear. So both of those base load electricity-generating 
fuels have been at about 2 cents per kilowatt hour, so that has 
been pretty steady.
    Mr. Platts. So it is fair to say, as we look at issues like 
LIHEAP, there are a lot of bigger issues, too, the broader 
energy policy and if we are able to advance more clean coal or 
if we return to development of nuclear. I was in, let us see, 
10th grade, I guess, when Three Mile Island happened. We were 
10 miles from the plant. That scared everyone off for 30 years 
now. But if we were able to make progress in those long term, 
that gets to issues that impact programs such as LIHEAP because 
it does have an impact on energy costs.
    Mr. Caruso. That is absolutely correct. There are a lot of 
issues with respect to things like carbon restraints, which 
would change that picture, and renewable portfolio standards, 
which are being debated as we sit here. So I think everyone has 
indicated they believe we are in for long-term higher prices, 
and I think part of it is this changing fuel mix picture as 
well.
    Mr. Platts. Yes, I am the lead Republican with Congressman 
Markey from Massachusetts on the CAFE standards where, you 
know, one change could diminish our importation of foreign oil 
by 10 percent by raising CAFE standards for automobiles to 35 
miles per gallon, which certainly is a good starting point in 
my opinion, you know, to impact, again, the big picture which 
then drives these issues.
    I have other questions, but I know I have to wait for a 
second round if we have a chance to come around.
    Thank you, Madam Chair.
    Chairwoman McCarthy. Thank you, Mr. Platts.
    Mr. Sarbanes from Maryland?
    Mr. Sarbanes. Thank you, Madam Chair, for holding the 
hearing.
    I want to get a little more information about whether there 
is a train wreck coming this winter, and it sounds to me like 
there is, and it sounds to me like people will freeze to death 
this winter because they are not getting heat, and that $3.1 
million in 2006, while it may have represented kind of the 
minimum you could get away with under the cost of energy at 
that time would not be enough today if it were at that level 
given the cost of energy.
    But, of course, we are talking today about levels that are 
much lower than that, and the president of the United States of 
America this morning vetoed the Labor HHS Education 
appropriations bill, which contained more money for LIHEAP than 
he had proposed, but even then not nearly enough to address the 
need that you have described.
    So I would just like you to get on the record so that in 
January and February and March when the local 11 o'clock news 
is running stories about how people are freezing to death in 
their apartments or their homes because this assistance was not 
available, we can look back on this hearing and understand why. 
So, if you could speak to that, I do not know if numbers are 
kept about what happens to people as a result of not getting 
this assistance from the prior year, but I would be interested 
in that perspective, and then in any predictions you have, as 
specific as you can get, about what is coming this winter if we 
do not have the kind of resources in place that we need to 
provide people with this assistance.
    Mr. Wolfe, maybe you can start.
    Mr. Manning. Mr. Wolfe, perhaps I can just make one quick 
correction to the record which would be helpful in response. 
Then I will yield the time.
    The number of eligible families or individuals who can 
qualify, who can actually receive this funding, is 16 percent. 
So it is not that we are serving all but, say, 20 percent. Only 
16 percent of those who are eligible under the guidelines to 
receive LIHEAP funding actually receive it. So there is your 
first scary number, and now I would like to----
    Mr. Wolfe. Okay. We received funding from the 
Appropriations Committee 2 of the last 4 years to conduct 
surveys of families receiving energy assistance, and we asked 
them that question, ``What happens when you do not have enough 
money?'' I do not think it is as black and white in a sense as 
freezing to death or not freezing to death.
    What happens is that people say that they do not buy as 
much food, they do not buy medicine, they cut back on other 
essentials--clothing, for example, for their children. The 
elderly--they turn the heat down to unsafe levels. We know from 
public health data that if it is too cold in the apartment and 
you are elderly, some medicines do not work that well. We know 
that people do not use their air conditioning in the summer. 
They are afraid to turn it on. And if it is hot in the summer 
and you are in a very hot apartment, the incident of stroke 
increases.
    So if the kinds of public health things that this program 
helps prevent will not--what will happen? And those are the 
kinds of things we are concerned about. Also at the edge, you 
do see an increase in fires. We know what happens when people 
have their power turned off or cannot afford to buy heating 
oil. They do unsafe things, they use candles. In D.C. about a 
year ago, there was a tragic fire in a part of the city where a 
young boy died because they were using a candle for a light at 
night, and it, unfortunately, got knocked over.
    Those do not happen as much. I think they used to happen a 
lot more 25 years ago, before there was a LIHEAP program.
    Mr. Sarbanes. What does it mean for a senior to reduce the 
temperature in their home to unsafe levels?
    Mr. Wolfe. If you reduce it below 65 at night, the evidence 
is quite strong that if an elderly person gets up at night, in 
the middle of the night to, say, go to the bathroom or 
something, and it is very cold, they can get disoriented and 
slip. There is ample evidence of that.
    We know that medicine that helps prevent heart attacks or 
high blood pressure medicine does not work as well in a very 
cold apartment. So those are the kinds of things that we are 
concerned about. We also know from evidence from surveys that 
elderly people will not buy as much medicine to pay their 
energy bill.
    It is sort of quiet suffering, I guess you could say, and 
without adequate energy assistance, you will see an increase in 
that.
    Mr. Sarbanes. Would you venture a prediction of how this 
winter is going to compare with the last 10 winters in terms of 
the incidence of need and then crisis based on where prices are 
going and the amount of assistance that is available?
    Mr. Wolfe. What I think is going to happen this winter are 
a couple of things. One, states will impose much tougher 
moratoriums than in the past, and shutoff moratoriums will 
continue on through May, and that has happened when in previous 
times there has not been enough energy assistance money. States 
will shift money from regular utilities to pay for heating oil 
and propane because those are immediate bills that have to be 
paid.
    We will also find we will not be doing the outreach that we 
should be doing. There are elderly people who we know are 
eligible but struggle and do not like to ask for assistance, 
but if the price of heating oil hits $2,000 this winter, they 
will have to ask for assistance and we will have to turn them 
away because we do not have enough money to help them.
    Those are the kinds of things that I think will happen this 
winter, and they are preventable.
    And I think the other point to add is that energy 
assistance is not like Medicaid where you have, you know, tough 
issues like cancer, curing cancer or curing illnesses. This is 
a program that comes down to a bill. It is not a complicated 
program, and we have a network in place of well over 1,000 
community action agencies, for example, that reach people, that 
provide services, so funding can be spent quickly. This is not 
a program when additional funding is provided that it just sits 
there.
    So the way I always think about energy assistance is that 
even though we have a fairly complex law, it is a very, very 
straightforward program. It is a program that comes down to a 
bill, and it is really for the absence of having adequate 
funding, and the thing is over the years we know what happens 
when you do not have enough funding. We know the kinds of 
tragedies that happen, and they are totally preventable.
    Mr. Sarbanes. Thank you.
    Chairwoman McCarthy. Ms. Clarke from New York?
    Ms. Clarke. Thank you very much, Madam Chair and Ranking 
Member, to our panelists.
    Today is a very important issue. I think it has really been 
driven home by your testimony, and I thank you for taking the 
time.
    I do not think there is anything more disturbing or more 
distressing than hearing of the death of an elderly person who 
has frozen to death or death by fire because of faulty wiring 
of an electrical appliance, or similarly the converse, for 
seniors and children who suffer in extreme heat conditions in 
the summer or in those areas where the climate is always very 
warm.
    This question is for you, Mr. Wolfe. Our weather patterns 
have become less and less predictable and increasingly more 
dramatic. We have seen summer temperatures extend well into 
fall and storms increase in ferocity. Working-class, low-income 
families are being adversely affected by these extreme changes.
    Here is my question. In your testimony, you discuss the 
complex formula that determines LIHEAP appropriations in regard 
to the amount of heating and cooling days per year. Does this 
formula take into consideration the unpredictable weather 
patterns that we have seen in recent times, and, if so, what 
does this formula look like?
    Mr. Wolfe. Well, the formula right now is that the funds 
are allocated on the basis of a hold harmless provision that, I 
think, goes back to 1981. When you go past $1.975 billion, the 
new formula kicks in, or the formula that was passed back in 
1986 kicks in, and that takes into account heating and cooling 
days over time. So changes in weather would be taken into 
account.
    For example, in the Midwest, in states like Nebraska, 
people have told me they now have days in the summer that they 
would like to be able to provide cooling assistance, and that 
is fairly new. In the cold weather states, it is still cold. It 
might not be quite as cold, but it is still cold.
    What we are finding is that in the past, back in 1981, 
there was not much known about the need for cooling in the 
summer. People just thought, ``Well, you know, it gets hot. You 
know, just open the window.'' Now we know when it gets hot, the 
rate of stroke for the elderly goes up. We know that cooling is 
extremely important where, I think, when the programs passed, 
there was less knowledge. We also know a lot more about the 
impact of being in a cold apartment than we did.
    So the public health concern for LIHEAP and the knowledge 
behind there, I think, is much stronger than it was then.
    And we also know that, as I was saying earlier, there are 
more and more people in frail health living at home that need 
adequate energy assistance. It really should be part of their 
program to keep them in the house, and, unfortunately, it is 
not. It is often thought of as an aside, like, ``Oh, right. 
There is an energy bill there.'' Well, it is an extremely 
important part of the package of helping people stay healthy in 
their homes.
    Ms. Clarke. I have heard in your testimony the discussion 
around weatherization and how critical that is, but, you know, 
I think that that is a preventative measure. For many homes in 
New York City, in Brooklyn where I am from, there is a cost 
involved, and, you know, I wanted to ask both you, Mr. Wolfe, 
and Ms. Barlow. In your testimony, you state that 
weatherization is a central part of assisting families in need 
of home energy assistance. Mr. Wolfe, you stated that if a home 
is weatherized, it can use up to 30 percent less energy than a 
comparable home.
    What can we do to help educate more families on the 
importance of weatherization and energy efficient living, given 
the fact that there is an upfront cost to those families? 
Oftentimes, people defer it because, you know, their income to 
do something like that is not there. It is just as bad. It is 
like being between a rock and a hard place because your energy 
is going up, yet you cannot do the things that are required 
because of the finances involved.
    Can you both give us a sense of that?
    Mr. Wolfe. That is a very good point. Unfortunately, the 
core program of the weatherization assistance program does not 
receive sufficient funding. It is only enough funding to serve 
about 100,000 families a year. States supplement that with 
their own funds. So there is enough funding to weatherize about 
200,000 homes a year nationally. That is in contrast to the 
close than 6 million families that get energy assistance. So 
really the federal focus is really on bill payment, but the 
data are clear there is a lot of potential to save energy in 
low-income homes, which would result in a lower energy bill.
    Ms. Clarke. Ms. Barlow and Mr. Swanson, if you would give 
us your impressions as well.
    Ms. Barlow. As I indicated earlier, we only receive 
annually $30,000 a year for the WRAP program, and with that 
money, we do a home assessment to identify any apparent energy-
related structural deficiencies. We make recommendations that 
might include insulation, caulking of windows and doors, repair 
of broken windows, replacement of doors, repairs on the heating 
system, or possibly wrapping the pipes and water heaters. So it 
is a tremendous savings.
    Again, maybe some sort of public service announcements--we 
need to get the word out there that this is available, but, 
again, funding is really a critical issue to reach all the 
people, and it would be a tremendous cost savings.
    Mr. Swanson. I think that in addition to what I have said 
in my comments about Pennsylvania, my organization provides 
both direct services and quality control for major utilities. 
We have been able to get them significantly engaged in the 
conservation programs as well. I think the scale is there to do 
a lot more and get a lot of involvement.
    Mr. Manning mentioned that in Pennsylvania we have private 
contributions by other rate payers, and we are beginning to see 
a mix of loan programs provided by our state agencies for those 
who are not quite in this extreme need, but who have some of 
ability to pay but need these measures.
    If there is one thing I have seen over a long period of 
time, it is a progression of people who more and more have 
problems with their bills. So, at the same time that we are 
responding, as Congressman Clarke said, to those people in 
need, we also want to build a protection system for those who 
are close to that margin, and given the likely increases in 
energy costs over time, that is going to be a continuing issue. 
Pennsylvania is a state that has benefited in many ways--85 
percent of its electricity is coal generated. It is the 
original coal and steel state, okay.
    But those protections have helped us a bit. But we have to 
build a program that starts with people with the greatest need 
and responds to everybody.
    Mr. Manning. Congresswoman Clarke, just very quickly, we 
are working also at the state level as a company to ramp up and 
to introduce additional and new incentive programs for energy 
efficiency, and allocation will be set for those who are least 
able to help themselves. So there will be a committed amount 
out of those additional funds, and we are working through that 
at the state level, but it is not nearly enough to get us where 
we need to be.
    Ms. Clarke. Thank you very much, Madam Chair.
    And it is great to see you, Mr. Manning.
    Chairwoman McCarthy. Thank you.
    If it is all right with the panel, we have extra questions 
that some members would like to do. So I do not know what your 
time restraints are, if you could spend a little bit more time 
with us?
    Mr. Platts?
    Mr. Platts. Thank you, Madam Chair.
    I guess first maybe, Mr. Swanson, with your work in 
weatherization and the conservation side, I think one of the 
challenges of how to reach out to individuals to understand the 
benefits, and even with their own funds, not waiting for 
public, you know, assistance or private assistance, but 
depending on the type of unit in which they live that it would 
be in their own best interests to invest, and so, you know, do 
you have suggestions on how we can better outreach to the 
public to say, you know, ``here--you know, in the fall, 
investing in this weatherization with your own dollars, in the 
end going to reduce''--rather than waiting to get to that 
crisis?
    And then related to that, is one of the challenges--and I 
do not have numbers to back this up, but my assessment is that 
with low-income families, more of them are living in rental 
properties. And so where there is any kind of investment that 
is infrastructure involved, they are not really the ones to be 
making that investment--the landlord is, and if the landlord is 
not paying the utility bill, the renter is paying it directly. 
The landlord does not really care to make the investment 
because it is not going to save him or her money. It is going 
to save the renter money in that direct payment. Do you have 
any feel for that?
    Mr. Swanson. Yes. The first issue is how do we encourage 
people in general, particularly those of modest means, to 
invest in energy, and one of our benefits is we have been doing 
this for 25 years. We actually started doing a lot of low-tech 
energy items for people, and public agencies did it. Utilities 
have done it. The time has come to go back to a serious 
investment in resources from private utilities and from 
weatherization agencies to convince people they have got to 
look at their consumption of energy, how to reduce it.
    You know, the other side of this is behavioral changes 
within acceptable limits. I am always concerned about pushing 
turning the thermostat down too low because, as Mr. Wolfe has 
testified, particularly with our senior citizens, they get 
carried away with it and create dangerous situations. But the 
behavioral changes along with the other modifications, to go 
back to more serious investigations, reduce energy, and this is 
not just for people with modest incomes. You know, it has 
tremendous other positive benefits. So I think we need to go 
back to that, and we need to go back to it in a way that is 
more comprehensive and that reaches out to those that I 
generally refer to as those that are hard to serve.
    The hardest work we do at ACTION-Housing is providing 
service to people for the first time. These are people, seniors 
or not, who are tremendously resistant to taking advantage of 
any resource. I see Congressman Clarke. She knows what I am 
talking about. These are people who keep saying, as poor as 
they are, as needy as they are, ``This is not for me,'' right? 
``I do not need help. I need to go on my way.''
    We have to find ways working with those who understand 
communication a lot better than we do to connect with those 
people and make a difference, okay? So we need to do that, and, 
in many ways, we need to do it for all our households, to make 
a difference not only in terms of affordability of energy, but 
also conservation, as you mentioned.
    What we could do in autos, what we could do in homes and, I 
believe, residentially--there are experts here. Residential and 
commercial is like 40 to 50 percent of our energy consumption. 
It some significant number.
    Mr. Caruso. Thirty.
    Mr. Swanson. Thirty percent. Well, it is a huge consumption 
of energy in our society, and we have mostly ignored it, okay. 
So I think that is the answer there, is go back to that, and 
most of our utilities provide high-quality audits. We do. And 
we can do them very affordably, and that is really a message 
there.
    I have now forgotten your second question. [Laughter.]
    Mr. Platts. I believe I have as well. [Laughter.]
    Mr. Platts. And I am going to run out of time here. 
Actually, I am going to jump to Mr. Manning for a different 
question.
    And it sounds like from Mr. Swanson's testimony or 
statement in the last response that utility companies are 
trying to partner with customers investing in improvements, 
conservation efforts, weatherization and providing some funding 
for that, for their customers.
    Mr. Manning. Absolutely, and there are various different 
pots. I mean, to be candid, there is a regulatory opportunity 
here at the state level where it can be spread across the rate 
payers. So those are some of the incentive programs which 
exist.
    In addition to that, companies such as ours are putting in 
shareholder dollars. So the most traumatic was we had a very 
cold winter 2 or 3 years ago. LIHEAP completely ran out. It was 
the first of March. It was still severely cold. And we had an 
opportunity and we just redirected $3 million from what was 
going to go into a bonus program right into making up those 
dollars. So that would be the extreme case where you just write 
a check from the shareholder.
    We also have a foundation which participates every year. We 
also work very closely with all of the various organizations 
that are doing this. So there is a shareholder opportunity. 
There is a rate-payer opportunity where they all participate, 
and there is an outreach to the consumer as well, and I do not 
think we have done enough there because, as I indicated, we 
have had some pretty good response with minimal outreach.
    So I think those are sort of your opportunities, and, 
again, knowing that--I mean, Mr. Swanson has been very 
articulate on this need for weatherization, and the unfortunate 
thing is we are so concerned about just the health of our 
people this winter that we would like to do more on the 
weatherization, the long term, the prevention. We would love to 
do more on that.
    Obviously, we are being held back a bit because we are 
keeping concerned about those who are eligible for LIHEAP, and 
as the chairwoman pointed out, many of these are working 
families. These are the struggling, working, poor families in 
the rural areas where the economy is not strong, in the inner 
city. We have many of both, and we see it.
    So, yes, we absolutely believe it is an opportunity to 
partner, but let us be perfectly clear. The opportunity to bear 
this with the entire population of the nation is not only 
opportune, but it is necessary because that is the scale of the 
problem.
    Mr. Platts. A final kind of broader picture question for 
you, Mr. Manning, and it relates earlier when I asked Mr. 
Caruso about coal and you talked about coal and nuclear. I am 
one that believes that to address this and related issues that 
have any connection to energy, we need a truly comprehensive 
plan, so I am one who is Republican, who is the lead Republican 
on the CAFE standards, on renewable energy standards, promoting 
alternative renewable fuels.
    But I am also on the other side as far as production that 
we better access our resources that we have, especially to make 
the transition to new technology, and in the natural gas area, 
there is a lot of documentation of our huge reserves in the 
outer continental shelf area and, you know, getting access to 
the area that most other nations are already accessing in their 
regions, but we are not.
    Mr. Caruso mentioned the number 11 percent as the projected 
increase this winter for those who use natural gas. Any 
projection of, if we were better accessing those resources that 
we currently are not, how big a difference it would make in 
that 11 percent? Would it be half of that if we had that, you 
know, reserve available, or does it give any kind of 
projection?
    Mr. Manning. My friends behind me will be smiling because, 
of course, this is an opportunity I have been waiting for for 
some time, and----
    [Laughter.]
    Mr. Platts. And no one told me that, but it is part of my 
approach.
    Mr. Manning. Well, I actually am a chosen American. I got 
my citizenship this year, and I could take you just a few hours 
north of here to Eastern Canada where, of course, we have been 
drilling successfully very well and very safely, and there is a 
tremendous resource. You are absolutely right.
    And the AGA has been very committed because we have the 
relationship with the consumer. We are the ones that serve. We 
are the ones that talk to the consumers. We are the ones that 
are taking care of those who need the resource. My background 
is in the upstream, and so I, in fact, worked on the rigs when 
I was 18. So, if you ever want to have this conversation, I am 
available.
    But, yes, I cannot give you hard numbers. I think probably 
my friend on the end can do more, but we need it all, and to 
increase your availability of natural gas does not say that you 
are not going to do wind. We absolutely need it all, and we 
need an energy strategy that captures all of those resources 
because we cannot get there from here without them.
    So we are absolutely enthusiastic about renewables, and we 
are doing everything we can, and our company has done a lot of 
work to make sure we facilitate that. We installed the first 
fuel cells in Staten Island in 1972. So we are also the first 
ones to tap methane coming off a landfill in New York City. So 
that is another conversation for another day perhaps, but----
    Mr. Platts. Thank you and, again, my thanks to all of our 
witnesses, both the big picture and then on the front lines--if 
I remember, Mr. Jones who came to your program--in truly 
serving those in need. I commend you.
    Thank you, Madam Chair.
    Chairwoman McCarthy. Actually, I am listening to the 
conversation. I said, ``This could be the energy committee'' as 
we are listening to everything, but it is true because one fits 
into the other. I know that on the island I do read those 
little flyers that you put in there, and I am going to be very 
honest with you as, maybe, just as a little bit of criticism.
    As you point out the different areas that need insulation 
and everything else, it probably would be good just for the 
average citizen to have some idea what it is going to cost--you 
know, how much does it cost to put a wrap around your hot water 
heater--because if we are talking about the clients that we are 
trying to help the most, they are going to get a flyer like 
that, and they are going to say, ``I cannot afford it,'' even 
though, you know, the different companies are helping them to 
get to that point.
    But I am talking also about the average citizen. You have 
no idea what it is going to cost to insulate this. I did not 
know. I thought I had good insulation. I saw one of your 
flyers. If I can see the wood beams on the floor, I do not have 
enough insulation. Well, I do not have enough insulation. So I 
think that might be a good idea just for the regular consumer. 
So, hopefully, you will make more money so you can help those 
that we need to help.
    But, Mr. Caruso, I had the pleasure of going to India and 
China and, obviously, the growth there is unbelievable, and so 
I am looking at the energy crisis as very long term because, as 
we see undeveloped countries from when I was a young person to 
being developing countries now, more and more resources are 
going to be used.
    And so I do believe that this nation--and I did live 
through the 1970s when we had the crisis and the long lines and 
the complaining when I think the gas went up to, what, 75 
cents, if you could find gas, and here we are going through a 
crisis again, and then--you know, maybe the government or most 
people do not feel that way, but, you know, when you are 
spending $50 a week to fill up your tank versus what you used 
to spend, that is going to pull back, you know, whether someone 
is not going to go shopping or Christmas is going to be a 
little bit tighter this year because people are nervous out 
there. The average person is nervous because they do not 
understand everything.
    So I think if there is anything that happens long term, it 
is going to affect, again, the clients that we are looking to 
help, whether it is heating them, feeding them and certainly 
making sure that children can grow up to be productive citizens 
to keep our whole economy going. I mean, that is what we should 
be looking at, the future for our young people.
    So if you could kind of give us a little outlay on what you 
see for the future in your crystal ball, you know, and what 
this country is going to face, I think the country is strong 
enough to understand that we need to do a lot more, and I think 
everybody realizes it nowadays, but somehow we have to push it 
a little bit more.
    Mr. Caruso. Yes. Our long-term projections are for higher 
real energy prices, particularly oil and natural gas, and a lot 
of that upward pressure on price is the result of strong growth 
in places like China and India. I mean, they are really going 
to lead the energy future markets as we project out 20, 30 
years.
    Now, clearly, that is good news because it means there is a 
growing global economy. On the other hand, as Mr. Manning has 
pointed out and Mr. Platts' question implied, we need to look 
at all sources of energy, including efficiency. That is a 
source of energy by reducing waste.
    And, therefore, as you point out, this sounds like an 
energy committee, but, indeed, the issues you are dealing with 
here are directly related to that, and I think we need to think 
of it in terms of the broad picture and specifically with 
regard to access to--and I know it is controversial--East and 
West Coast resources, oil and natural gas, whatever that number 
is. I agree with Mr. Manning it is hard to say, but whatever 
the number is that is not being developed in our own country, 
that will have to be imported.
    So, if you do not find and develop new natural gas--let us 
say it used to be close to the United States--for every 
thousand cubic feet, we will be importing most likely liquefied 
natural gas and most likely from the Middle East or perhaps, 
you know, Nigeria or Russia. So, in terms of security of supply 
and the economics of it, I think we need to think of this in 
the broadest way, including how energy relates to the issues of 
your own committee.
    So I absolutely agree with you, Madam Chairwoman, that 
there is a complete linkage between what we are doing, in my 
case the Energy Information Administration, and what the other 
panelists here are doing in serving their clients.
    Chairwoman McCarthy. Let me just go with a follow up, and, 
Mr. Manning, you can jump in on it.
    I had the pleasure of going to a large corporation on the 
island that had been using fuel cells, and, obviously, they are 
very expensive to, number one, put the program together, but, 
you know, at this point now, they are actually going to be 
getting new fuel cells because the price has dropped down 
dramatically. So, with that, I happen to look forward to 
hopefully research and development where there is clean coal, 
hopefully that this nation can be independent down the road--I 
know it is not going to be in my generation, but down the 
road--so that we can do a better job.
    But even with Mr. Manning on helping certainly constituents 
on Long Island, upstate New York and in the Northeast--and, 
again, it is not our committee because I happen to be one of 
those people that do believe that if we do not look at 
everything, we are not going to survive down the road, and so, 
with that--and, again, this is not our committee, but it does 
have to do with helping our constituents that need the most 
help.
    Even having a tax credit--even though you were doing well 
and you are helping our constituents and I appreciate that, 
would it be more conducive to even have some sort of credit 
because you are reaching out, and would that raise money to be 
able to help the constituents that we have, whether it is 
weatherization, which would fit in perfectly----
    Mr. Manning. Yes, it would. If you look to the quiver of 
the federal government, that would certainly be one of the 
opportunities that you can have access to, and it certainly 
would, obviously, encourage the utilities. We are looking at a 
number of opportunities to drive energy efficiency, including 
decoupling.
    There are ways to break that relationship between the 
volume of energy that you sell and the way you compensate the 
company. Those are all opportunities. But, certainly, taxation 
has proven to be a very effective carrot as well and 
particularly when it is focused. So I would encourage that 
review.
    Mr. Swanson. If I might add, I think it is an excellent 
concept. The housing nonprofits in this country have had the 
benefit of working with a federal low-income housing tax 
credit, which today produces 120,000 units a year. It is, in 
fact, the driving force behind affordable housing, the business 
that I am in. It took time to develop it, but, you know, the 
investments come from banks, from major corporations, from 
investing in credits.
    About 75 percent of the cost of the housing is actually 
paid for by the credit investment. The rest of it is in public 
resources and private loans. I think a similar bold concept 
related to energy and even cash assistance is very workable, 
and there is a whole industry out there that is now built and 
thriving around a tax credit in housing.
    Ms. Barlow. I think tax credits are an excellent, but, once 
again, we really have to publicize and make people aware of it. 
The earned income tax credit that would benefit so many people 
is left on the table by many, many individuals. So, again, if 
we had something like that, we would have to get the word out 
and make sure people know how it would benefit them, but I 
think it is certainly something worthwhile to pursue.
    Mr. Wolfe. I think that--I mean, I agree with everyone--the 
LIHEAP really works well the way it is. Only 10 percent goes 
for admin. The low-income housing tax credit--there are quite a 
few middle men that take, you know, 10 to 20 percent right off 
the top in terms of trying to move it from the credit to banks 
to investors.
    LIHEAP is really designed to get money out to people right 
way. In a sense, it is more complementary to, say, food stamps, 
and I think we need to think about that as an income support 
program. Yes, it pays for energy, but it also helps support 
income, and I think the related piece to that is going to be 
how it ties to the earned income tax credit, is there is no 
federal program to help with gasoline, and millions of working 
families this winter are not just going to see higher energy 
bills to heat their home, but to drive to work.
    So we are really looking at almost a second shoe that is 
going to fall, and I think, as I have sort of listened to 
everyone talk, I think that is the real problem that poor 
people are facing this winter, higher costs to go to work as 
well as higher costs to heat their home, and that is, I think, 
what we are worried about. And the only program we have to help 
people with their energy bill is LIHEAP, and I think if that is 
strengthened, that could help mitigate some of the problems 
with gasoline.
    Chairwoman McCarthy. With that, Mr. Wolfe--and I am not 
going to go into another subject because that is a 
transportation problem. I know on Long Island, for my working 
poor, there is no way to go north and south. It is by buses. So 
that is even another subject. We probably could sit here all 
day and, you know, maybe by the end of the session, we could 
actually have some answers.
    Ms. Clarke?
    Ms. Clarke. Thank you very much, Madam Chair.
    AS a practical matter, behavior modification is costly when 
it comes to homes and families. According to the company Energy 
Star, if every American were to replace one regular light bulb 
with a fluorescent bulb, we would save enough energy to light 
more than 3 million homes a year. The initial cost of 
fluorescent bulbs may be more expensive than your average bulb, 
though the payoff would be greater in terms of the energy 
efficiency savings.
    I want to ask what can this committee do to alleviate the 
initial economic strain on energy efficient living for working-
class and low-income families, and I want to just sort of touch 
on the topic that Madam Chair just raised and combine that with 
something that Mr. Platts talked about, and that is the issue 
of renters, and I want to add to that the factor of aged 
housing stock and absentee landlords.
    Do you believe that a weatherization incentive in the form 
of a tax abatement could target those particular home 
environments? That is for everybody.
    Mr. Manning. I think we are on to something, Madam Chair, 
and I think the opportunity, Congresswoman Clarke, is to look 
at some of the existing programs which are functioning now, 
such as the one that my friend lives and breathes with, and see 
if we cannot take that model and that structure and turn our 
attention to that kind of weatherization and those kind of 
enhancements. Your comment with respect to the upfront cost and 
the opportunity for light bulbs, that is an excellent example, 
particularly as just, you know, the compact fluorescents have 
come down dramatically in price in the last 5 years.
    There are more opportunities for what we call compact or 
distributed generation, micro-combined heat and power, some of 
these technologies where right now they are just now affordable 
for those who can afford it. Ultimately, they will come down in 
price, and they will start to become part of the solution, if, 
in fact, you can adjust the system.
    So there may be an opportunity for us to collaborate and 
have a look at some of those structural models and try and 
address the specific questions you have asked.
    Mr. Swanson. Thank you for reminding me what Congressman 
Platts' second question was, what do you do about rental 
situations, and we already do conservation in rental 
situations. It is easier to structure when, in fact, the 
landlord is paying the energy bill. The landlord is, therefore, 
motivated to conserve, and it can have the benefit of keeping 
rents down. It is more complex when--I said it the other way 
around--the tenants pay, but it is easier to set a benefit 
there.
    When the landlord, in fact, has the opportunity to absorb 
that benefit, then we actually ask them to make the 
investments. As you know, my main line business is working with 
affordable housing. We work with a lot of private landlords, 
and, you know, many of them are motivated because when they 
look at the trends and future projections of energy costs, they 
probably assume scenarios far worse than Mr. Caruso would 
paint.
    They tend to look at 1-year increments and then multiply 
them by 10 years and assume that their energy bill is going to 
be 250 percent larger in a short period of time, and so they 
more than anything understand that there is a limit to what 
their tenants can afford, all right. It does not do any good to 
charge tenants for rents that you cannot collect, okay. And 
that is what we are talking about here.
    So I think you see a mix of different benefits there. We 
already do that in a modest way, and, again, with the right 
investments, you can structure it so it makes some sense.
    Thank you.
    Ms. Barlow. I think what is difficult for people who are 
cash poor is to understand the concept that spend more now, and 
you will be able to save later, and that really relates to what 
Mr. Wolfe said, and that is the problem with the tax 
abatements, very, very difficult to get that concept across, 
even though it would benefit them. So it is kind of a negative 
answer. I do not have an alternative answer, but that is my 
reaction.
    Mr. Wolfe. One thing to add is 40 percent of all low-income 
families own their own home. You know, nationally I think it is 
about 65 percent, and we have a program with the Ford 
Foundation. We have pilot sites in 12 cities. We actually had 
one on Long Island, with CDC on Long Island, where you looked 
at using weatherization as the base, not just energy efficiency 
and helping save bills, but you can also see it as a program 
that can help strengthen low-income home ownership.
    We brought together HUD programs with weatherization with 
state funds, and what we saw was that many families had a set 
of common problems--many families that own homes--high energy 
bills, homes that were in need of repair, and high interest 
rate mortgages, and it all comes together. You know, in some 
ways, you can think of subprime lending as an issue over there 
and HUD programs as an issue over there and weatherization over 
here and energy assistance, but when you put them together, you 
can really make a terrific difference in a family's life.
    And that is what we saw in our pilot programs, that, yes, 
these programs are underfunded. There is no question there is 
not enough money, but they really can work and do terrific 
things to help families, and we saw that in each of our pilot 
sites, and I think what we are trying to get at is: Is there a 
way to use federal and state monies to strengthen low-income 
home ownership? And I think the answer is ``yes,'' that if you 
think of weatherization and energy assistance as a key piece of 
that solution, then I think all else follows.
    And you see that, yes, of course, this program should be 
funded better and, of course, I think it helps to strengthen 
those families because they are all struggling to retain home 
ownership. These are families who live paycheck to paycheck. 
How they got their first house is a miracle sort of thing. It 
is the only asset they have. It is how they grow assets over 
their life. And we can use weatherization as a way to give them 
a helping hand to kind of strengthen their ability to keep and 
maintain their home.
    Chairwoman McCarthy. I want to thank all of you for coming 
here and testifying today. I think we have learned an awful 
lot. We have covered an awful lot of subjects. But, again, it 
is how are we going to do a better job on taking care of our 
constituents to make sure that they have heat?
    You have heard me mention before my background is a nurse, 
so I believe holistically, and, unfortunately, Ms. Barlow, you 
hit it right on the head because Congress does not see 
sometimes that by spending a little money, we can save a lot of 
money in the end, and that could be for health care, that could 
be for education, that could be almost every single subject 
that you want to, you know, cover there.
    So I thank you for your insight, but, again, it is 
unacceptable that over a million households lost use of 
critical utilities last year. We must work together to make 
sure this program gets the funds it needs. We want local 
program administrators like you, Ms. Barlow, to retain the 
dedicated staff such as the people you talked about. We need to 
strengthen public-private partnerships and help states to find 
ways to work with companies to increase the reach of LIHEAP 
without lowering the benefits of LIHEAP.
    I want to again thank each and every one of you. I would 
love to have a committee hearing with Charlie Rangel for the 
tax area, Financial Services, Mr. Swanson, because we are 
actually doing a lot on housing, and we want to look at how we 
are rebuilding or renovating the apartments that so many of our 
low-income families are in.
    I live in an apartment building right here, and you have to 
open the windows in the winter even though I do not have the 
heat on. I never put the heat on in my apartment, but, last 
year, they decided to put in brand-new windows. At least now 
during the summer, I do not have to raise the air conditioning 
all the way up because it actually stays cool. So there is 
money to be saved.
    As previously ordered, members will have 14 days to submit 
additional materials for the hearing record. Any member who 
wishes to submit follow-up questions in writing to the 
witnesses should coordinate with the majority staff within the 
requested time.
    [Additional submission from Chairwoman McCarthy follows:]

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    Without objection, this meeting is adjourned. Thank you 
very much.
    [Whereupon, at 4:52 p.m., the subcommittee was adjourned.]

                                 
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