[Senate Hearing 110-822]
[From the U.S. Government Publishing Office]
S. Hrg. 110-822
HOME HEATING CRISIS
=======================================================================
FIELD HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
ON
EXAMINING THE HOME HEATING CRISIS, FOCUSING ON THE RESPONSIBILITY OF
OUR NATIONAL GOVERNMENT TO RESPOND TO THE NEEDS OF FAMILIES THAT ARE
FACING ENORMOUS PERSONAL CHALLENGES
__________
JANUARY 17, 2008 (BOSTON, MA)
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
senate
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
EDWARD M. KENNEDY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut MICHAEL B. ENZI, Wyoming,
TOM HARKIN, Iowa JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico RICHARD BURR, North Carolina
PATTY MURRAY, Washington JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island LISA MURKOWSKI, Alaska
HILLARY RODHAM CLINTON, New York ORRIN G. HATCH, Utah
BARACK OBAMA, Illinois PAT ROBERTS, Kansas
BERNARD SANDERS (I), Vermont WAYNE ALLARD, Colorado
SHERROD BROWN, Ohio TOM COBURN, M.D., Oklahoma
J. Michael Myers, Staff Director and Chief Counsel
Ilyse Schuman, Minority Staff Director
(ii)
C O N T E N T S
__________
STATEMENTS
THURSDAY, JANUARY 17, 2008
Page
Kennedy, Hon. Edward M., Chairman, Committee on Health,
Education, Labor, and Pensions, opening statement.............. 1
Coard, Robert, President of ABCD, Action for Boston Community
Development, Boston, MA........................................ 3
Gilliam, Margaret, Resident of Dorchester, MA.................... 5
Colby, Diane, Resident of Lynn, MA............................... 6
Strollo, Beth Ann, President, Massachusetts Association for
Community Action, Quincy, MA................................... 7
Prepared statement........................................... 10
Wolfe, Mark, Executive Director, National Energy Assistance
Directors' Association, Washington, DC......................... 12
Prepared statement........................................... 15
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Sanders, Bernard, a U.S. Senator from the State of Vermont,
prepared statement......................................... 27
Collins, Susan, a U.S. Senator from the State of Maine,
prepared statement......................................... 28
(iii)
HOME HEATING CRISIS
----------
THURSDAY, JANUARY 17, 2008
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Boston, MA.
The committee met, pursuant to notice, at 11:30 a.m. in the
Cass Room of Action for Boston Community Development, 178
Tremont Street, Hon. Edward M. Kennedy, chairman of the
committee, presiding.
Present: Senator Kennedy.
Opening Statement of Senator Kennedy
The Chairman. Thank you. We will come to order.
I am the Chairman of the Health, Education, Labor, and
Pensions Committee of the U.S. Senate that is concerned about
the challenges of working families, it's concerned about
education, concerned about health, concerned about our seniors.
It does have responsibilities in other areas as well, research
programs, pensions, and others, but most of all, it is the
committee that carries the focus most about the quality of life
of working families, and I am fortunate to be the chairman of
it, and the information that we have today will be printed and
shared with our colleagues as part of a continuing process of
the listening to what is happening across America today, in
Boston, in Quincy, and the Greater Boston area, the families
that are facing what I consider to be a perfect storm of
adversity.
Today we are focused on fuel assistance and the failure of
our Nation to respond to the needs of families that are facing
enormous personal challenges, very real challenges in terms of
their health, whether they can stay healthy, whether they have
to make choices between prescription drugs for their children,
whether they can purchase the food which is nutritious for
their children. Working families across this Nation are facing
a perfect storm, and the perfect storm is with the challenges
of recession that we are facing here in Massachusetts, here in
Boston, Quincy, all across the Greater Boston area, all across
Massachusetts, New England, and the country, and the failure of
our government, of this Administration to meet its
responsibilities in terms of home heating oil. That is what we
are basically facing.
Yesterday, in the U.S. Senate, as a member of the Joint
Economic Committee, we heard from economists that talked about
the recession and the need to take action now to help working
families, hardworking families all across our Nation, and we
are committed to doing that; I am, and we are, in the U.S.
Senate. That's enormously important. It's related to the
subject matter that we're talking about today. It's a part of
this whole challenge that families are facing, and it's
important that we are, as a country, going to recognize it.
Today, we are focused on the failure of our national
government, this Administration, to meet the responsibilities
that we have toward families that are hard-pressed to provide
one of the most basic necessities of life, and that is a warm
home. We also recognize that for many of those that are trying
to provide a warm home for their families, for their
grandchildren, for their children, for senior citizens, many of
them, after they scrape together enough resources to purchase
some heating oil, are looking over their shoulder at their
mortgage. Two hundred-thousand Americans are going to lose
their home this month. With the escalation of the mortgages,
families are faced with this double whammy, and they are also
faced with the challenges of access to food, the food banks.
Shelves, in many instances, are bare. They are failing to
provide the kind of support and assistance that we have seen
here in Boston. As one who has been a strong supporter of that
program, we know the challenges that we are facing.
So real people are hurting. Real people are hurting. Real
people that are playing by the rules every day, who have worked
hard, saved, tried to provide for their children are hurting,
and we and Members of the Congress, we who are your
representatives in the Senate of the United States have a
responsibility. We have a responsibility to try and end a war
that we never should have fought in, but we also have a
responsibility and a budget that is $2.8 trillion, to be able
to say that we ought to be able to find sufficient resources to
help and assist people that are in critical need. That is part
of the American dream. The budgeting for this country is a
matter of priorities and it is what we think is important for
people. This is one U.S. Senator, as well as my colleagues,
John Kerry, and Bernie Sanders, my neighbor from Vermont, who
hoped to have been here, would have been here yesterday, if the
schedule had worked out, and I know I speak for all of my
colleagues from New England. We are strongly committed to doing
something about it. We made some progress yesterday. I think
the Administration listened to Diane and Margaret and Beth Ann.
I think they might have heard what they are going to say today
and said, ``Well, we're going to start out a little process,''
and provided some resources. That said, ``Too little and too
late,'' but we'll take it, and use it effectively. We'll hear
more about that.
I am enormously grateful to welcome Robert Coard, who has
been a long-time friend, and to thank him so much for opening
up this facility here today and to welcome us. We are fortunate
to have had his leadership over many, many years. I've enjoyed
working with him. He's been really the heart and soul of
dealing with the challenges of many needy people. He's not only
in fuel assistance, he's been out there in terms of educational
opportunities for underserved communities. He's been a valued
and real friend. Bob, I want to thank you. If you have a word
to say, we would be glad to hear from you.
STATEMENT OF ROBERT COARD, PRESIDENT OF ABCD, ACTION FOR BOSTON
COMMUNITY DEVELOPMENT
Mr. Coard. Thank you. Thank you very much, Senator.
We at ABCD, it is to us a great pleasure and an extremely
great privilege to welcome our outstanding senior Senator from
Massachusetts, U.S. Senator Edward M. Kennedy, to Boston and to
ABCD today.
We consider Senator Kennedy the champion of the poor, the
vulnerable, and the future of our citizens in the United
States. We are extremely glad to see him, as usual, at any
time. He does a fantastic job. I really would like us to give
him a hand. Another round of applause.
[Applause.]
We very much appreciate his taking the time and the effort
to hold this important Senate field hearing here in Boston to
gather information and to draw attention to the critical issue
of home heating capability for low-income and elderly and
working poor families in Massachusetts and particularly across
the cold mountain tier of the United States.
As a result of just even announcing the hearing, the
Administration released not the full emergency contingent
amount of $586 million, but they released $450 million of it
yesterday, just before the hearing.
The Chairman. There's a little more in there, too, Bob.
[Laughter.]
Mr. Coard. Right.
We also welcome the other Senate hearing witnesses to ABCD
itself, and we thank the members of the press for being here to
carry this important story.
I want to acknowledge the Chair of the ABCD Board. Will you
stand so the folks can recognize you.
[Applause.]
A very important citizen of South Boston, and she has been
involved in the ABCD program since she was 17 years old. Of
course, that's only 2 days ago.
[Laughter.]
I will make just a few brief points regarding the Fuel
Assistance Program and its important role in the lives of
struggling-to-survive persons in the cold New England winter.
First of all, this year is not like other years. In more
than 35 years of providing fuel assistance ABCD has been
involved with, this is by far the worst winter we've seen for
the poor, the elderly, disabled, and vulnerable and working
families in Massachusetts.
The reason is two-fold. First, heating oil has now gone up
50 percent to $3 per gallon from last year, and it's at the
highest price in history. Natural gas and electricity are not
very far behind.
Second, this is a very cold winter, based on the Degree-Day
System which oil companies use to make deliveries.
At this point, all of the 15,000 families served by the
ABCD Fuel Assistance Program have used up their benefits and
have nowhere to turn. We serve not only Boston but we serve
Brookline and Newton with our program.
Yesterday, President Bush released the $450 million of $586
million available, and Massachusetts will get $27.2 million,
according to the allegations worked out by the State. With that
funding, we will make a 100-gallon delivery to our eligible oil
customers. If we gave only what would amount to 65 gallons, the
oil companies would refuse to do that. They want to deliver at
least 100 gallons. That's $300 these days. That 100 gallons
will cost $300 and will provide a family with heat for about 2
to 3 weeks at the most. It is clear that more help is needed
for them to get through this winter.
In 2005, when the LIHEAP Program was reauthorized by
Congress, $5.1 billion annually was promised and voted by the
Congress and signed by the President. It was based on
documented need. Despite that commitment, Federal funding
nationwide has been less than $2 billion a year, and that
amount has proved completely inadequate in the face of soaring
fuel prices, which have gone up consistently every single year.
We need this program to be funded at the full $5.1 billion
level.
Two-thirds of the families we serve in the ABCD Fuel
Assistance Program have take-home salaries of $1,000 to $1,500
per month, and a full tank of oil cost almost $900 these days.
You do the math. How can people pay high Boston rent, feed
their families, pay for needed medication, and also put oil in
their tank every single month? It's impossible. It's the reason
why children in Head Start--according to the Boston Medical
Center, a study recently--are losing weight in the winter
months. It's the reason why our older residents, who work all
their lives, take their diabetes medicine every other day these
days to stretch it out and to their very immediate error. It's
the reason we have tragic and avoidable fires from space
heaters every single winter. It's the reason working families
fall behind in their rent, get evicted from their apartments
and end up in homeless shelters or hotels where the cost to the
taxpayer is far more than a tank of oil. A study by UMass
showed that ending up in the shelters cost--if a person is in
there for the whole year, which many are--$32,800 a year.
That's much more than a tank or so of oil.
In this Nation in the 21st century, we should not have
children, older residents, and working people cold and hungry
in their homes in the bitter New England weather.
Thank you so much. And thank you again, Senator Kennedy.
The Chairman. Thank you, Bob. We're always glad to hear
from you and we are very grateful for your summation--
enormously important.
We are going to hear from some very special guests this
morning. We will hear from two: Margaret Gilliam, senior
citizen, fuel aid recipient from Dorchester, and then Diane
Colby, a single parent, fuel aid recipient in Lynn, MA.
I think the one part that we ought to understand at the
outset, people will be watching and listening to these two
extraordinary women and say, ``Well, you've looked around and
finally found two individuals.'' I think both of them can tell
you that they speak for their neighbors. They speak for their
friends. They speak for their community. We could have had a
room filled with people that could tell similar kinds of
stories. We certainly have those letters in my office here in
Boston and also in Washington, and we certainly know that they
are really speaking for so many people in Massachusetts and
really throughout the country. We are very fortunate to welcome
them.
Why don't we start with you, Margaret.
STATEMENT OF MARGARET GILLIAM, RESIDENT OF DORCHESTER, MA
Ms. Gilliam. Good morning, everyone.
I consider Mr. Coard, a very dear friend, a savior. I have
been involved with assistance from this organization since
caring for six of my seven grandchildren. Fortunately, for the
past 12 years, I was living in government housing, which
included heat. These recent 12 years, I have been residing in a
private family home. It's a two-family home. I do have to
supply my own heat. Again, through ABCD, I was qualified to
receive the oil assistance. I received my first delivery the
first week of December. The amount afforded me was $435. The
first delivery came to $430. That lasted like 3 weeks, because
it wasn't really that cold at that particular time.
The oilman doesn't want to carry anyone, because he can't
afford to. It cost him to stay in line in Chelsea, or wherever
he has to go and pick up his oil to deliver it to our home, so
it's like, ``I'll carry you for a week, please pay me the
following week.'' If you don't have it, you don't get a
delivery. With what little moneys I can reserve from my once-a-
month check, Social Security check, I offer to just have 50
gallons delivered for each delivery, and I pay him. That leaves
me kind of short. I still have two grandchildren at home. I
have to pay rent. They need some assistance as far as getting
through school, and other resources. Our Christmas this year
was very, very light, but they didn't mind. They knew that we
would be married to the oilman from now until April.
Two weeks ago, I was really kind of desperate and I really
needed to call someone. I called ABCD and I told them what my
dilemma was--I didn't have money to call my oilman--and she re-
directed me to another source, and they came and delivered 200
gallons of oil. They left a slip in my door, and when I saw the
slip, I almost fainted. For 200 gallons of oil the cost was
$630. Right now, I probably have about 100 gallons of oil left
in my tank, and I am really nursing it like there is going to
be another tomorrow. Where do I go after next week? I will call
ABCD, hoping that they will be able to give me at least 100
gallons. I probably will be counting on that, because there's
no other resources that I can go to, because everyone is, you
know, handing out moneys for other people. I'm not the only
one. You know, I'm not ready for a senior citizen building,
because they do supply your heat. I love my comfort of a two-
family home. It is quite private. My children are happy. I just
don't need to have this kind of concern, because it is mind-
boggling after a while, and I can feel myself getting very
anxious. And there's a long ways to go yet from January until
April.
The Chairman. This anxiety--you know, often we find a
society that knows the cost of everything but fails to realize
the cost of anxiety, fear, and frustration, the lost sleep that
you've had, the fact--and we're going to hear from Diane, who
was talking to us earlier about that, you know, the chill in
the air in the early morning, you know, when you're trying to
get those children up and getting them dressed so they can get
out to school, wondering whether that room was warm enough for
those children or whether they're going to catch cold. All of
that is a wearing factor on people. We don't see it measured in
terms of the cost of the heating oil or the oil itself, but it
is something that's very real, and it's happening to people. We
have to ask ourselves whether that is necessary when they're
having these record profits of the oil companies, when they're
all having this--I mean, they ought to be able to make a fair
profit, but these record profits, and no--very little voice to
try and do anything about it. Who ends up paying for it? We
just heard from Margaret.
Thank you, Margaret. We'll come back.
Diane, can you tell us a little.
STATEMENT OF DIANE COLBY, RESIDENT OF LYNN, MA
Ms. Colby. I am Diane Colby from Lynn, MA, and I am a
single mother raising two daughters, elementary school age and
junior high. Just that the fuel assistance hasn't gone as far
as it used to go because of the price of oil. One hundred
gallons, like you said, is $300. It goes about 2 weeks. And
that's keeping it at a very conservative 62 degrees. Just like
I said, getting up in the morning----
The Chairman. Sixty-two degrees is pretty cold.
Ms. Colby. Yes, we keep it down. I keep it down.
The Chairman. Which is pretty cold.
Ms. Colby. Isn't that the truth. We keep it down to 62 to
63 degrees, and that's the normal, keeping it down. Just
worrying, when you do run out, where will you get more oil, and
the fuel assistance is gone; it just goes really fast now
because of the prices. It's just like you said, getting up in
the mornings, my biggest worry with my kids, you know, having
oil. Even at night, just being home watching TV and it's cold
when you get up.
That's my concern. You may have to go not paying a bill,
another bill, to save. You might skip another bill when you pay
that----
The Chairman. Tell us a little bit that. You were
mentioning that earlier, that sometimes you feel that you have
to pay that heating oil bill and you pass up on some of these
other----
Ms. Colby. Yes, I'll skip a phone bill or an electric bill
a month or so just to get through the winter, if you do run out
of fuel assistance, yes.
The Chairman. We have to ask ourselves, as a country and as
a society, is this acceptable, and it isn't. Clearly, it's not.
These are people that are looking after children,
grandchildren, have worked, and continue to work hard, and they
are faced with that kind of dilemma in this country.
Let me just put up the chart. This is the temperatures
drop, the home heating oil prices soar. This has gone up 47
percent since last year. I mean, people will wonder why are we
having this hearing and what's so different this year than even
last year. We find out there's an increase and the cost has
gone up 47 percent. I think it's at 175 percent over the last 5
years, 180, 186, in the last decade. But this gives you--this
is the real input.
The next chart, if you would please.
This gives you--it may be difficult in the back to see, but
it shows on the one hand what Bob had mentioned and that is
that the Congress has said that there needs to be the $5.1
billion, and that, to be very honest about it, is really a bare
minimum. It's really a bare minimum. I mean, I think even now,
where we are at double, you find out that we are fortunate.
We've got very good associations here--we're going to hear from
some--where we take care of a much higher percent here in
Massachusetts than many other States in the country. The
national average is about one in seven. We do much, much
better, and we'll hear about that this morning. It's great
credit to those organizations that do it, but there are still
people that are eligible that are missing out on this program.
On the one hand, if you look at the item on the left, it's
the request from the Administration, then what has been
appropriated, and then the difference. You'll see over on the
right column the increases that each year actually the Congress
has added to the program, the largest one being in this last
year, 2008, by a billion dollars. That's not insignificant, and
it does have something to do, quite frankly--we're not here
trying to make partisan points, but the fact is, it was
democrats that voted, with the change of leadership in the
House and Senate, to get that up to a billion dollars. It's the
appropriated 2.57, and we're the ones now that are trying to
increase that in the budget when we come back in January, and
we're going to fight on the stimulus program. There'll be a
stimulus program and we ought to have increased fuel
assistance. I'm going to work on that. I know my colleagues are
going to work on that as well. So, Bob, that's what we're going
to try and do as a follow-along. People wonder when we have
these hearings, and we'll be glad to keep in touch with you and
the organizations here, and Margaret and Diane, they'll let you
know how that's going. But this gives you some of the overall
kind of facts here.
We have another chart. It's just the point that has been
made earlier, and that is the fact that it's a noticeable and
factual situation that children lose a good deal of weight
during the course of the winter because they're getting less
nutrition because the bills the parents are paying are fuel-
assistance bills. I mean, that is something that is generally--
when you hear that, you really wonder about it. It's happening,
it's real, and it's wrong. And that, we're going to battle as
well.
I'm going to ask Beth Ann Strollo, who is the President of
the Massachusetts Association for the Community Action and
Executive Director, Quincy Community Action Program, if she
would be good enough to say a word.
STATEMENT OF BETH ANN STROLLO, PRESIDENT, MASSACHUSETTS
ASSOCIATION FOR COMMUNITY ACTION, QUINCY, MA
Ms. Strollo. Thank you, Senator.
On behalf of my colleagues, many of whom are here today,
from the Massachusetts Association for Community Action, and
our friends in Washington at the National Community Action
Foundation, I want to thank you for the hard work that you have
done throughout your career in the Senate on behalf of the
families and individuals that we serve, not just programs like
Fuel Assistance, but Head Start, some wonderful work that you
did last year in Head Start and for many years. We've very
appreciative of that.
We also just want to thank you for the opportunity to talk
about this issue today and draw attention to this issue that
we've been concerned about since the beginning of the heating
season, really for a number of years now, and as my friend, Mr.
Coard said, we will give you credit for that emergency release
of funds. So I am happy to do that.
You just illustrated the problem, and it's really very
clear and simple. The fuel assistance benefits have never, in
my recollection, been indexed for the increase in the cost. So
we have now this huge gap, as you just showed us, between the
cost to heat your home in a year and the benefit level. This
cost is not just a cost for low-income people, it's a problem
for everybody, to some extent. But when you are poor and you
don't have any increase in your fixed income for a year or your
wages are going up, if at all, they're going up a very small
amount while many of your other living costs are increasing,
your housing cost is increasing. Here in Massachusetts, we have
some of the highest housing costs in the country. That puts an
incredible burden on low-income households, many of whom
receive no public assistance of any sort for housing. When they
have a spike in their heating cost like this, there is no
margin for people to cover that cost. That is real economic
insecurity that has now turned into heat insecurity, it turns
into food insecurity, it turns into medicine insecurity and
housing insecurity. We see a direct correlation between this
problem and the rise in family homelessness this past year in
Massachusetts, which is a problem that we're very concerned
about. When people are insecure, it is human nature that we
sometimes do things that don't make a lot of sense and that
maybe we wouldn't do otherwise. This is a problem that concerns
us and has for a long time. But many of our clients have to
resort to space heaters or opening their ovens, turning their
ovens on and opening them as a source of heat. This is done in
desperation.
Yesterday, we had a briefing at the State house where we
had a fire chief and a fire captain talk to us about this
problem and what they see happening and one of the things that
they are seeing happening this year is that we have low-income
people taking their gasoline cans and filling them with heating
oil and then putting that into their heating system. They have
a real fear that it's going to be an explosion in the house. I
haven't heard of this problem before, but they spoke about it
yesterday when we met with them about their concerns as the
safety officials in all of our communities.
Those are the kinds of things that people are doing because
they are fearful, they are anxious, and they are desperate.
Other things that we see happening that maybe aren't as
dangerous but are very troubling is that many of our clients
are using their credit cards to pay their basic living costs,
food, heat, medicine, and there is not enough income in their
household to pay their credit card bills, so they are left with
now a very serious credit card and debt problem. Their credit
is ruined. Last year, as we closed out the fuel year and we
looked at so many households who had huge utility arrearage
bills, that their gas and electric stayed on all winter, but
when spring and summer came around, it had to be turned off
because the bills were so high. We have seen clients now put
their utility bills in their child's name. There are teenagers
now whose credit will be bad, because they really have no other
alternative. They are doing it because they feel like they have
no other choice but to do that to keep their utility on.
The Chairman. Let me mention this issue on the credit
cards. We've had a big increase in the last few years of
bankruptcies, and these are directly attributed to this follow-
along. The way that the bankruptcy law works now, used to be
people went into bankruptcy and you got a clean slate. You went
back on--they had to have a workout in terms of paying whatever
they could, but people were given a chance to get back on their
feet. Do you think that's it now? Absolutely not. Those credit
card companies have got their jaws into you for the rest of
your life, just as Beth Ann has mentioned. You will find out in
a bankruptcy the people that are going bankrupt, they work as
hard as anyone else does. I mean, there's a normal sense,
``Well, they've gone into bankruptcy because they're goofing
off.'' If you look at what's happening now at the people who
are going into bankruptcy, they are working as hard as anybody
else who caused it, and a lot of it is the fact that they can't
pay their health bill because of the expense of health and what
Beth Ann has mentioned here in terms of these other
necessities. Once their credit, then, is adversely impacted, it
is a continuing kind of a spiral that is going to affect these
families, and that is going to cause them this kind of anxiety
in the future. This is all adding to this all-insecurity that
you talked about, and it is really the new phenomenon that's
taking place for families, and they are battling this thing, by
and large, themselves or with their children or their
grandchildren in trying to do this and they've got these forces
that are out there, and this is really very unacceptable.
Continue.
Ms. Strollo. Thank you. Yes, we could have a whole other
discussion on what the credit card problem is sometime.
The Chairman. Yes, I know.
Ms. Strollo. I think on maybe an encouraging note, here in
Massachusetts, the community action and fuel agencies have
worked closely with our partners, and there are a lot of them.
A lot of people step up to the plate to help make this program
stretch the dollars as far as we possibly can. Our friends over
at the Department of Housing and Community Development
administer this program. We work with them and the utility
companies and the oil vendors. We are doing things that are not
necessarily unique around the country, but they are certainly
something for us to be proud of because we've been able to take
the Federal money and leverage it with the utility companies
and the oil vendors to get them to--particularly the oil
vendors, who only get paid what's called a margin-over-rack
price here in Massachusetts. Their profit is capped and it
stretches the dollar.
In Quincy, where I deliver this service, we saved about
$100,000 a year by doing this, so that we can use that money to
go back into benefits for clients. That is true all over the
State. In all of the fuel assistance agencies, that number just
gets blown up to get much bigger.
The utility companies work to provide weatherization and
heating system programs. We combine our resources, and, again,
can help do more work for many families to make their homes
more energy efficient.
We are also blessed here, as you know, to work with many
renowned physicians and medical institutions. You mentioned the
impact on children. There's been some wonderful research done
and our friends in the medical community have spoken publicly
about that in recent years about the impact of cold on
children. Yesterday, we heard again from another physician who
spoke about what a child's body has to do to counter the cold
that it feels and that that has a very negative impact on that
child's health--it can have. It's another one of many reasons
why this program needs to be fully funded.
Locally, every community in Massachusetts can tell you
stories about how local organizations, churches, foundations,
and municipal governments come to help this program. In Quincy,
where I am, the mayor and the city council appropriated $50,000
this year for fuel assistance. This will help about 115
households. Not very many. We have at least 2,000 households
that we help with fuel assistance in Quincy. So it won't go
very far, and you can see that's not the answer and that they
can't be expected to solve this problem. So while we're very
grateful for their help and they are very concerned about it,
this does need to be a national Federal solution. So we urge
you to--not you. We know you believe in----
The Chairman. You can urge me.
[Laughter.]
Ms. Strollo [continuing]. To continue fighting, I guess,
for $5 billion, because that is what we need.
Right now, this is a crisis management program. You've
heard Margaret and Diane talk about the state of high anxiety.
We see it with so many of the families and individuals that we
help. We really want to be working with them to help them
become economically self-sufficient, but when you are anxious,
and you are fearful that you're going to be cold that night and
all day, then you can't really think about how to get out, get
better education, get a new job, or work to survive a little
better on your limited income.
So we hope that someday we can get this back to being an
assistance program, not a crisis program, so we can really work
with folks to help them move forward.
Thank you.
[The prepared statement of Ms. Strollo follows:]
Prepared Statement of Beth Ann Strollo
Chairman Kennedy, Ranking Member Enzi and members of the committee,
I thank you for the opportunity to testify today. On behalf of all of
the Massachusetts Association for Community Action Agencies (MASSCAP)
and our advocacy colleagues at the National Community Action Foundation
(NCAF) I want to express our gratitude to Chairman Kennedy for your
tremendous leadership on LIHEAP and other initiatives that help low-
income residents in Massachusetts and throughout the Nation. In
particular, I want to thank you for your recent and successful efforts
to encourage the President to release the LIHEAP Emergency funds
yesterday.
I appreciate the opportunity to share the concerns of the
Massachusetts fuel assistance providers. Last year Massachusetts fuel
assistance agencies served over 140,000 low-income households.
Approximately 40,000 of those households heat their homes with oil. In
fiscal year 2007 Massachusetts had $90 million in fuel assistance
funds. This year MASSCAP expects to serve at least that many households
if not more. Prior to the release of the LIHEAP emergency funds
Massachusetts had $106 million available to distribute to low-income
residents this year. However, the record breaking cost of heating fuels
without a commensurate increase in LIHEAP has created the most serious
problem we have seen in years. Low-income households simply cannot
bridge the gap between the rising costs of heat and their household
income. As heating costs consistently rose over the past 7 years the
purchasing power of the LIHEAP program has been greatly diminished.
Based upon the Energy Information Administration's (EIA) data and
the current cold temperatures we project the cost of heat for the
Northeast to be between $1,600 and $3,000 depending on your heating
source. Combining the current Federal LIHEAP funds with $15 million of
State fuel assistance funds Massachusetts low-income residents will
have a fuel assistance benefit of between $590 and $865 for the heating
season. If you are at 100 percent of poverty and heat with oil that
benefit will buy you a little over a tank of oil. Based on these
benefit levels, essentially all of the Commonwealth's residents are now
out of fuel assistance and we are right in the middle of a very cold
winter. Once we receive the recently released emergency funds we will
distribute them as quickly as we can, however, it is already too late.
Historically, we have seen it take almost 2 months from the President's
release before we can actually distribute those resources. When LIHEAP
funds get released in this fashion it begs the question why wouldn't
the full appropriation be distributed at the beginning of the heating
season. Especially in the rising cost environment seen over the past 7
years.
Quincy Community Action Programs (QCAP) is the community action
agency that administers the LIHEAP for Quincy, Weymouth, Braintree and
Milton. We provide fuel assistance to approximately 3,000 households in
those communities. This year we have seen a 20 percent increase in the
number of low-income residents coming to us with less than \1/8\ of a
tank of oil. This trend began by the end of November and continues. Our
oil clients are telling us that they used to be able to pay for at
least half of a tank to get them by until they received their fuel
assistance benefit. Now they cannot afford the minimum cost necessary
to get their first oil delivery. They arrive in our offices fearful and
desperate. This trend is seen throughout the Commonwealth. The fear
that faces a family when they cannot keep their children warm or an
elderly woman who decides not to eat that day or take her necessary
medicines so that she can pay for heat is real and should outrage us
all.
Low-income families and individuals cannot bridge this income/
expense gap. This economic insecurity now becomes heat insecurity--food
insecurity--medicine insecurity--and housing insecurity. The number of
homeless families is on the rise in Massachusetts. There are many
reasons why but one of them is the high cost of heat and the
significant utility arrearages from last winter. When we are insecure
we do things that we may not otherwise do--things that don't always
make sense. Many families and individuals facing this heat insecurity
resort to using space heaters and turning their ovens on and open to
heat their home. They run the risk of fire and loss of lives but they
feel they have no alternative. Less dangerous but very troubling is the
on going pattern we see of low-income households using credit cards to
pay their daily living costs including food and heat. The concern lies
in the fact that when you only have income of $20,000 a year you do not
have enough money to pay those credit card bills. The result is that
credit card bad debt strangles them from moving forward in their lives.
A disturbing trend seen last year was that more and more of our utility
clients are putting their utility bills in their child's name. When
they cannot pay that bill the teenager is left with the bad credit.
These stories are not provided with blame made, but merely to
illustrate the means of survival for many low-income families.
On a positive note here in Massachusetts we have many partners in
the effort to provide fuel and energy assistance. We are proud of our
partnerships with the utility companies, the oil vendors, municipal
government and the many local foundations, churches and community
agencies that help low-income residents get through the winter. In the
city of Quincy for example, the Mayor and the city council appropriated
$50,000 this year to help our LIHEAP clients. We expect to help about
150 households with those funds. We serve almost 2,000 households in
the city so you can see how difficult it is for a local government to
handle the scope of the need.
On a statewide level MASSCAP, the State Department of Housing &
Community Development (DHCD) and the oil vendors have joined in
partnership to stretch the LIHEAP dollars as far as possible by paying
a margin over rack (MOR) price to the oil vendors. The vendors have
agreed to capping their profit margin. At QCAP that effort has allowed
us to provide almost another $100,000 in benefits to our clients. In
addition, the utility companies have worked hand-in-hand with MASSCAP
and DHCD to create a variety of energy efficiency initiatives funded by
the utility companies and leveraged with Federal weatherization and
heating system funds. In Massachusetts we are fortunate to have
renowned physicians and medical centers conducting cutting edge and
compelling research on the impact of cold on child development and
health. We are grateful to all of our partners who work towards
addressing this serious problem.
In closing I want to emphasize that this program has moved from an
assistance program to a crisis management program. Our clients come to
us anxious and fearful that they will not get through the winter.
Working with our clients when they are in a state of high anxiety
prevents them and us from helping them work towards real economic self
sufficiency.
We urge the President and Congress to fully fund LIHEAP at $5
billion and to assure those appropriations are authorized by the
beginning of the heating season. All of us have an obligation to help
our neediest residents stay warm and avoid the pain of living in the
cold and in fear. Addressing their heating needs now will be the first
step towards moving low-income families and individuals towards a
brighter future.
Thank you for the opportunity to provide this information to you
today.
The Chairman. Very good. Thank you. Thank you.
Ten days of our involvement in Iraq would fund that whole
program. You don't want to get me going on this one.
We'll hear from Mark Wolfe, who is the Executive Director
of the National Energy Assistance Association. We are grateful
for your presence here.
STATEMENT OF MARK WOLFE, EXECUTIVE DIRECTOR, NATIONAL ENERGY
ASSISTANCE DIRECTORS' ASSOCIATION, WASHINGTON, DC.
Mr. Wolfe. Thank you, Senator.
As you said, I am Executive Director of the National Energy
Assistance Directors' Association. I represent the State
directors of the Low-Income Home Energy Assistance Program. Of
course, we'd like to thank you and your committee members for
supporting LIHEAP.
I would like to mention that I view States across the
country on LIHEAP, and it's a checkerboard. This is not
entitlement, and some States contribute to the program, others
don't. Massachusetts, I believe, is among the top small group
of States where you have comprehensive State support.
Massachusetts, for example, is the only State so far, to my
knowledge, that's put any direct appropriations in this year
towards LIHEAP, and I think that the State should really be
applauded for that.
I'd like to talk a little bit about the program and our
concerns about where it's going.
As you were showing in the table before, it's been a
struggle with the Administration for the last 8 years. Each
year they come with very low recommendations for LIHEAP and
then it's a struggle throughout the year, along with the very
tight budgets we've been working with.
For fiscal year 2008, the current year, for example, the
appropriation levels are the same level of block grant funding
of $1.98 billion for the program, but increased the contingency
fund, the emergency part of the program, by $408.6 million to
$590.3 million. I believe that, frankly, is one of the bright
spots in the Omnibus Appropriations Bill.
Looking across programs, all the important social service
programs that are funded, LIHEAP received one of the larger
increases, and I think that's part of what's making a
difference right now.
The President's budget for fiscal year 2008 would have
reduced LIHEAP, the basic grant, to $1.5 billion. That would
have been drastic. We would have had to eliminate about 1.1
million households from the program.
For Massachusetts, just to give you an example of what
happened, under the basic grant in the President's budget, the
State would have received $61 million. Under the funding that
was provided, the core funding, the State received $81 million.
If the program was fully funded at the authorized level,
Massachusetts would receive $157 million. So that's to just
give a sense of the numbers of where we are and what would have
happened if the President's budget had gone through.
The number of households receiving assistance has been
rapidly rising. This reflects a significant rise in home energy
prices and the number of low-income households.
Since 2002, the number of households receiving LIHEAP
heating assistance has increased from 4.2 million to an
estimated 5.8 million for the current year. Even at this level,
the program serves only 15.6 percent of eligible households.
The majority of households have at least one member that's
elderly, disabled, or a child under the age of five. Families
receiving LIHEAP assistance carry a much higher energy burden
than most Americans, spending, on average, about 15 percent of
their income on home energy bills, as compared to 3.4 percent
for eligible households--households with at least one member
who is disabled or elderly.
LIHEAP is not an entitlement program like Medicaid,
unfortunately, providing a minimum benefit level of health care
coverage for eligible households. When the number of households
receiving Medicaid increases, the appropriation increases. In
the case of LIHEAP, however, when the number of households
increases, the average grant goes down, but if energy prices
increase, the purchasing power goes down.
We've been tracking the purchasing power issue for a couple
of years and we are very alarmed by it. Between 2003 and 2007,
the number of households receiving LIHEAP increased by 26
percent, from 4.6 million to 5.8 million. In the same period,
the Federal LIHEAP appropriation increased by about 10 percent.
The resulting average annual grant decreasing from $349 to
$345. The increase provided by the Omnibus Appropriations Act,
assuming the Administration releases all the emergency funds,
will increase the average benefit to $359 per household, about
the same level provided in fiscal year 2003 and fiscal year
2005. This would not be a problem if energy prices were
decreasing or remaining stable.
Unfortunately, as everyone knows in this room, energy
prices are soaring. Home heating bills are projected by the
U.S. Energy Information Administration to average about $1,000
per year for the typical family, an increase of almost 80
percent more than the average cost of home heating during the
winter of 2001-2002, and 47 percent higher than 2002-2003.
Between 2003 and 2008, the average LIHEAP grant percent of
total home heating costs declined from 36 percent of the
average cost to 17.8 percent for heating oil, from 58.2 percent
to 40.6 percent for natural gas, 37 percent to 21 percent for
propane, and 50 percent to 43 percent for electricity. The
increase provided for fiscal year 2008 is to offset this, but
certainly only on the margin.
Increase in the price of heating oil, however, is a special
concern for the northeast States and to the LIHEAP directors
because 75 percent of heating oil is used in this region. Local
market conditions are driving the cost of home heating oil to
record levels, products, and the price of other fuels. The U.S.
Energy Information Administration has projected the price of
home heating oil will increase from last year by $551 this year
to $2,019. These prices, however, assume the typical family
only uses 610 gallons of fuel. In fact, in some of the colder
places in the northeast, like Massachusetts, for example, we're
hearing about families who need 1,000 gallons that would cost
about $3,200. The fact that heating oil now cost about $900,
more than half the total monthly Social Security payment for
the average-aged couple, almost the entire monthly income for
an aged widow woman who lives alone. The 2008 average increase
in Social Security is only about $24 a month, less the amount
needed to pay the increase in home heating this year.
I think that one thing that's not understood outside of New
England, you know, if you talk to people in Ohio and the south,
they really can't comprehend spending $3,000 for home heating.
I think that when you look at the average, which that's such a
problem for Social Security, the average works in some States,
because if you're using natural gas, you might not see that
much of an increase. If you're using heating oil in the
northeast or in New England, this average is pretty useless, so
that an elderly family might be seeing an increase of five to
$600; this year their Social Security is only going up by $240.
That's the problem. There's a real disconnect. I think that
heating oil, because it's really in this region, we're
concerned about the public health implications of families not
having adequate funds to pay for heating oil, and I just don't
think this is understood outside of this part of the country.
A few more points I would like to raise. One of our
concerns about the rising need for energy assistance is the
increase--is in arrearages and the shutoffs that we're starting
to see. The National Regulatory Research Institution came out
with a recent report of [inaudible] percent between 2001 and
2006. Last spring, we did a survey where States reported about
1.2 million households that were cut off from natural gas and
electric service due to nonpayment of energy bills.
What we're finding and bringing back from utilities is that
the basic structure of energy assistance worked up to recently.
Five or six years ago, you could heat a home for $600, and many
families could afford that. There are also many elderly
families that didn't want to ask for help and they could make
do with prices at that level. But we are looking at $2,000,
$2500 to heat your home. That doesn't include the rest of the
electric bill. They just don't have the money. So what
utilities are starting to see is rapidly increasing arrearages
and that the tools they have aren't working that well, and
especially for the elderly with the threat of shutoff. I mean,
these families can't go to work at Wal-Mart to make extra
money. We need to begin to acknowledge that threats of shutoff
just doesn't work in many cases and you have to start having
broader-based protections.
The Chairman. Mark, talk about that for a minute about what
the dangers of shutoff are and how it is different for
utilities, if you could explain that to everyone here.
Mr. Wolfe. Again, it's a checkerboard situation. Some
utilities are extremely aggressive. Part of what's going on is
that, not to be Pollyannaish about this, but 20 years ago, the
local head of the utility was often a local community leader
and there were a lot of concerns. They would work closely with
the State to work out the end plans to work out long-term
agreements and often they just wouldn't shut people off. There
were very low instances of shutoff. What we're finding now is
that utilities are becoming more bottom-line oriented and
becoming much more aggressive in their shutoff procedures.
Massachusetts, again, is a bright spot in the national
picture. In Massachusetts, if an elderly person has a doctor's
note, they are permanently protected during the period. Many
States require notes to be recertified every 30 days. It's just
not practical.
The other thing that's going on is that the Federal
Government is pushing very hard to help elderly people stay in
their homes through these new home health care programs. Well,
that's wonderful, except what happens with the energy bill.
So we're starting to have this disconnect between more and
more elderly people, more of the people can stay at home, but
not have adequate funding for energy assistance. With the bill
getting larger, it's really starting to hit--you know, about
that horrible phrase ``a perfect storm.'' Utilities are
becoming more aggressive about collections, much higher prices,
but energy assistance is not keeping up with it. Then you have
about 10 States in the country that have clearly stepped up to
the plate, put a lot of their own resources into the program,
and even those States are struggling, like in Massachusetts.
You know, frankly, if you went to Virginia, for example, they
don't put anything into this. It's a totally different
discussion. And it's sad.
In the State of Massachusetts, you're talking about a State
putting significant resources into this, very strong shutoff
protections and still it is a struggle. So I think that is
where your own country, unfortunately, becomes two countries
for energy assistance, one where the States are trying very
hard to provide minimum protections and others where they
basically supply heat to basically fill the full bill.
[The prepared statement of Mr. Wolfe follows:]
Prepared Statement of Mark Wolfe
Good morning, I am pleased to testify on behalf of the National
Energy Assistance Directors' Association (NEADA) on the importance of
the Low Income Home Energy Assistance Program (LIHEAP) in meeting the
heating and cooling needs of some of the Nation's poorest families.
NEADA represents the State LIHEAP directors. The members of NEADA would
like to first take this opportunity to thank the members of the
committee for its continued program support in working to increase
funding for LIHEAP.
By way of background, there are four components to the LIHEAP
program:
Block grant providing formula grants to States to help
low-income families pay their heating and cooling bills.
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.
Residential Energy Assistance Challenge (REACH) grant
providing competitive discretionary grants to States to develop new
strategies to assist households in reducing their home energy burden.
Leveraging grants providing States with additional
incentives to raise non-
Federal 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 programs. This is especially important in
years when the appropriation for the Federal fiscal year is delayed and
States in cold weather have to start their programs without knowing the
final appropriation level. As a result, States sometimes have to revise
their program benefit and eligibility levels several times during the
course of the program year, until a final appropriation level is
reached. This can cause considerable delay and confusion in the
delivery of program services.
authorization and appropriations levels
The LIHEAP appropriation level for fiscal year 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 the amount provided
for the block grant , $27.3 million was set-aside for REACH and
leveraging. No advance funding was appropriated.
For fiscal year 2008, the appropriation level provides the same
level for the block grant and increases the emergency contingency
funding level by $408.6 million from $181.5 million to $590.3 million.
As in fiscal year 2007, no advance funding was appropriated.
The President's Budget for fiscal year 2008 would have reduced the
LIHEAP basic grant appropriation to $1.5 billion and provided $282
million in emergency contingency funds. If the President's Budget had
been approved, the number of households served would have been reduced
from about 5.8 million to 4.7 million.
The authorization level for LIHEAP was increased from $2 billion to
$5.1 billion by the Energy Policy Act in fiscal year 2005. The act also
continued the authorization level for emergency funds at $600 million.
The program's authorization expired at the end of fiscal year 2007. The
following table compares the current block grant funding level by State
with the authorized funding level of $5.1 billion.
eligibility criteria
LIHEAP allows States to set eligibility at the greater of 150
percent of the Federal poverty level, or 60 percent of State median
income. In fiscal year 2007, 150 percent of the Federal poverty level
for a family of four was $30,975. In practice, most States target funds
to lower income families.
More than 70 percent of families receiving LIHEAP have incomes of
less than 100 percent of the Federal poverty level ($20,650 for a
family of four) and 44 percent have incomes of less than 75 percent of
the poverty level ($15,488 for a family of four).
State agencies generally contract with non-profit agencies to
conduct outreach and sign-up activities. The application process is
relatively straightforward. Most States require only proof of income
and a copy of an applicant's most recent utility bills. Generally,
asset tests are not required and some States now allow applications by
mail.
households served
The number of households receiving assistance has been rising
rapidly. This reflects a significant rise in home energy prices and in
the numbers of low-income households. Since 2002, the number of
households receiving LIHEAP heating assistance has increased from 4.2
million to an estimated 5.8 million in fiscal year 2007. Even at this
level, the program serves only 15.6 percent of eligible households. The
majority of households have at least one member who is elderly,
disabled or a child under the age of 5.
Families receiving LIHEAP assistance carry a higher energy burden
than most Americans--spending on average about 15 percent of their
income on home energy bills, as compared to 3.4 percent for all other
households. Many of these households also have at least one member who
is disabled (43 percent) or elderly (41 percent).
uses of formula grant funds
LIHEAP is a block grant providing grantees with considerable
flexibility delivering program services. In designing their programs,
States are allowed to set-aside up to 10 percent of their allotment to
cover administrative costs, up to 15 percent of program funds (25
percent with a waiver from the U.S. Department of Health and Human
Services) to support weatherization activities and up to 5 percent to
support activities that enable households to reduce their home energy
needs, including needs assessments, counseling, and assistance with
energy vendors to reduce the price of energy.
On average, States set-aside 10 percent of their block grant to
support weatherization activities. These funds complement program
support provided by the Weatherization Assistance Program (WAP).
Weatherization assistance can include insulation, appliance and furnace
repair and replacement and related health and safety measures. A
weatherized home can use up to 30 percent less energy than a comparable
home.
States are also required to set-aside ``a reasonable amount'' of
funds to be used until March 15 of the program year for energy crisis
intervention. These interventions are defined to include households
that need additional assistance to address life-threatening situations
including shut-offs due to non-payment.
LIHEAP: FY 08 Basic Grant Appropriations Status ($'000)
----------------------------------------------------------------------------------------------------------------
FY 08 Energy Policy
State FY 2006 FY 2007 President FY 08 Enacted Act
----------------------------------------------------------------------------------------------------------------
Alabama......................... $31,310 $16,770 $12,645 $16,770 $87,205
Alaska.......................... 16,475 10,704 8,071 10,704 26,002
Arizona......................... 15,142 8,110 6,115 8,110 42,233
Arkansas........................ 22,765 12,796 9,648 12,796 47,082
California...................... 153,182 89,963 67,835 89,963 316,814
Colorado........................ 43,165 31,367 23,652 31,367 58,158
Connecticut..................... 62,727 40,920 30,855 40,920 98,878
Delaware........................ 10,140 5,431 4,095 5,431 21,871
District of Columbia............ 7,851 6,355 4,792 6,355 16,239
Florida......................... 49,541 26,534 20,007 26,534 138,181
Georgia......................... 39,170 20,979 15,818 20,979 109,253
Hawaii.......................... 2,555 2,113 1,593 2,113 5,284
Idaho........................... 14,370 12,235 9,226 12,235 29,721
Illinois........................ 187,251 113,259 85,401 113,259 301,871
Indiana......................... 72,682 51,280 38,666 51,280 111,654
Iowa............................ 50,013 36,343 27,404 36,343 60,776
Kansas.......................... 26,798 16,690 12,585 16,690 55,424
Kentucky........................ 44,346 26,686 20,122 26,686 91,718
Louisiana....................... 32,009 17,144 12,927 17,144 85,072
Maine........................... 36,480 26,509 19,989 26,509 47,034
Maryland........................ 58,499 31,332 23,625 31,332 136,730
Massachusetts................... 112,639 81,853 61,720 81,853 157,890
Michigan........................ 147,974 107,529 81,080 107,529 199,566
Minnesota....................... 106,606 77,469 58,414 77,469 90,280
Mississippi..................... 26,843 14,377 10,841 14,377 74,871
Missouri........................ 76,035 45,240 34,112 45,240 123,142
Montana......................... 22,088 14,351 10,821 14,351 34,861
Nebraska........................ 27,661 17,973 13,552 17,973 43,658
Nevada.......................... 7,112 3,809 2,872 3,809 19,836
New Hampshire................... 23,846 15,493 11,683 15,493 37,634
New Jersey...................... 105,244 75,986 57,296 75,986 160,368
New Mexico...................... 11,925 10,153 7,656 10,153 24,663
New York........................ 341,432 248,112 187,084 248,112 471,752
North Carolina.................. 69,037 36,976 27,881 36,976 164,462
North Dakota.................... 23,995 15,590 11,755 15,590 37,869
Ohio............................ 158,789 100,194 75,549 100,194 252,854
Oklahoma........................ 28,780 15,415 11,623 15,415 64,604
Oregon.......................... 24,591 24,311 18,331 24,311 42,504
Pennsylvania.................... 183,399 133,273 100,492 133,273 272,515
Rhode Island.................... 20,737 13,473 10,159 13,473 32,728
South Carolina.................. 24,866 13,318 10,042 13,318 69,357
South Dakota.................... 19,488 12,662 9,548 12,662 30,756
Tennessee....................... 46,362 27,033 20,384 27,033 95,888
Texas........................... 82,421 44,144 33,286 44,144 229,887
Utah............................ 22,434 14,576 10,991 14,576 35,407
Vermont......................... 17,872 11,613 8,757 11,613 28,208
Virginia........................ 71,258 38,166 28,778 38,166 149,727
Washington...................... 40,449 39,988 30,152 39,988 64,001
West Virginia................... 23,818 17,660 13,317 17,660 49,261
Wisconsin....................... 95,961 69,733 52,581 69,733 105,404
Wyoming......................... 8,983 5,836 4,401 5,836 14,176
Territories/HHS Training........ 3,658 2,951 2,294 2,951 7,171
Leveraging...................... 27,225 27,225 27,500 27,225 27,500
----------------------------------------------------------------------------------------------------------------
TOTAL....................... $2,980,000 $1,980,000 $1,500,023 $1,980,000 $5,100,000
----------------------------------------------------------------------------------------------------------------
\1\ FY 06 included $1 billion in supplemental funding.
\2\ FY 07 included $181 million in emergency contingency funding.
\3\ Adm. FY 08 Budget included $282 million in contingency funds.
\4\ FY 08 Appropriations, as passed, included $590.3 million in contingency.
program appropriations
The distribution of formula grant funds is based on a complex
formula that provides that no State beginning in fiscal year 1986 will
receive less than the amount of funds it would have received in fiscal
year 1984 if appropriations for this part for fiscal year 1984 had been
$1.975 billion. Fiscal year 1984 funds were distributed to States on
the same share of funds they received in fiscal year 1981 under the
predecessor program to LIHEAP, the Low-Income Energy Assistance Program
(LIEAP). The fiscal year 1981 allotment percentages that were derived
from an extremely complex formula included such factors as heating
degree days squared, home heating expenditures, total residential
energy expenditures, and the population with income equal to or less
than 125 percent of the poverty income guidelines.
The law also provides that when LIHEAP block grant appropriation
exceeds $1.975 billion (only in fiscal year 1985, fiscal year 1986 and
fiscal year 2006), not including $27.5 million in other program set-
asides, funds are allocated under a complex formula that includes
cooling as well as heating degree days and a small State minimum
allocation.
LIHEAP is not an entitlement program like Medicaid providing a
minimum benefit level of health care coverage for eligible households.
When the number of households receiving Medicaid increases, for
example, the appropriation is automatically increased to guarantee the
same benefit level for all recipient households. In the case of LIHEAP,
however, when energy prices increase, the purchasing power is reduced;
when the number of households receiving assistance is increased, the
average benefit is reduced. This is the situation the program is
currently facing.
declining purchasing power
Between fiscal year 2003 and fiscal year 2007, the number of
households receiving LIHEAP increased by 26 percent from 4.6 million to
about 5.8 million or about 15.6 percent of the eligible population.
During this same period, the Federal LIHEAP appropriation increased by
about 10 percent with the resulting average annual grant decreasing
from $349 to $345. The increase provided by the Omnibus Appropriations
Act will allow the States to increase the average annual grant to $359
per household, about the same level as provided in fiscal year 2003 and
fiscal year 2005. This would not be a problem if energy prices were
decreasing proportionally or remaining stable.
Est. Change in Households Served & Average Grant (FY 03-FY 08)
----------------------------------------------------------------------------------------------------------------
Appropriation (in # ofHouseholds
Fiscal Year thousands) (in thousands) Average Grant
----------------------------------------------------------------------------------------------------------------
2003................................................... $1,988,300 4,610 $349
2004................................................... $1,888,790 4,828 $317
2005................................................... $2,186,000 5,083 $348
2006................................................... $3,162,000 5,717 $448
2007................................................... $2,186,000 5,800 $305
2008................................................... $2,570,000 5,800 $359
----------------------------------------------------------------------------------------------------------------
Unfortunately, energy prices are soaring. Home heating prices are
projected by the U.S. Energy Information Administration (EIA) to reach
almost $1,000 this year for the typical family, an increase of almost
80 percent more than the average cost of home heating during the winter
of 2001-2002 and 47 percent higher than in 2002-2003. As a result,
there has been a significant decrease in the program's purchasing
power.
Between fiscal year 2003 and fiscal year 2008, the average LIHEAP
grant as a percentage of total home heating costs declined from 36.7
percent to 17.8 percent for heating oil, 58.2 percent to 40.6 percent
for natural gas, 37.7 percent to 21.2 percent for propane and 50.1
percent to 43.1 percent for electricity. The increase provided for
fiscal year 2008 has helped to offset the decline, however, the share
of expenditures covered continues to be inadequate to meet the need.
The increase in the price of heating oil is of special concern to
the Northeast States because 75 percent of heating oil is used in this
region. Global market conditions are driving the cost of home heating
oil to record levels, far exceeding the price of other fuels.
The U.S. Energy Information Administration has projected that the
price of home heating oil will increase from the 2006-2007 heating
season by $551 (37.6 percent) to $2,019. These prices assume that the
typical family will only need about 610 gallons of fuel. In fact in
some of the colder parts of the Northeast the total is expected to be
closer to 1,000 gallons for a cost of about $3,200.
A tank of heating oil now costs about $900, more than half of total
monthly Social Security payment for the average aged couple and almost
the entire monthly income for an aged widower living alone. The 2008
average increase in Social Security is only about $24 a month, less
than the amount needed to pay for the increase in home heating oil this
year.
Low-income families using heating oil this winter are facing a
difficult situation. This is especially true for those on fixed incomes
including the elderly and disabled. I do not expect the situation to
change anytime soon.
This situation for natural gas is quite different. Prices are set
domestically and have been increasing at a much slower rate. For
example, the average cost of home heating with natural gas is projected
at $884 for the current winter heating season, about $71 more than last
year and $1,135 less than the cost of home heating oil.
outlook for fiscal year 2008
The increase in contingency funding provided by the Omnibus
Appropriations Act will help States to adjust benefit levels to pay for
higher heating and cooling costs. Yesterday's release of funds will
provide needed help to offset the impact of higher energy costs this
winter.
The States are concerned that the increase will not be sufficient
to meet the growing need for energy assistance and offset the impact of
higher energy prices. We are currently conducting a survey of the
States and the reports are grim. The States are serving about 15.6
percent of eligible households. State directors believe that the
percent served needs to be increased to at least 25 percent of the
eligible households to help offset the growing affordability gap as
prices increase faster than the rate of income.
arrearages and shut-offs
One indicator of the rising need for energy assistance is the
increase in arrearages and shut-offs. The National Regulatory Research
Institute, for example, in a recent report found that past-due gas
utility accounts rose from 16.5 percent in 2001 to 21 percent in 2006.
Last spring, in a survey conducted by NEADA, States reported that 1.2
million households were cut off from natural gas and electric service
due to nonpayment of their energy bills. Several States reported
significant increases in arrearage and shut-off rates from previous
years. In addition, we are also learning that traditional arrearage
management programs that provide matching payment programs to help
families reduce their outstanding debt are becoming less and less
effective. States are reporting that families increasingly do not have
the resources to meet matching payment requirements and as a result are
at greater risk of shut-off.
The following provides a brief summary from several of the initial
group of States that have responded to the survey:
Arizona: the State continues to struggle in meeting the
increasing demand for LIHEAP services due to various factors working
together as the ``perfect storm'' to deplete all available resources.
Providers report that requests for energy assistance services continue
to increase and include inquiries from non-traditional populations who
are in financial distress due to the sub-prime lending problem. One of
the largest utility companies in the State has reported a 42 percent
increase in calls to its customer service department from September
2006 to September 2007, most calls from customers who cannot pay their
home energy bills. One LIHEAP provider (the Community Action Human
Resources Agency in Pinal County) reported a total of 1,000 families
turned away due to lack of funds between August and September of 2007.
In fiscal year 2007, Arizona served approximately 33,000 households
with LIHEAP benefits. However due to the sharp decrease in funding,
together with an increase in energy costs, Arizona estimates that at
least 10,000 fewer families will be served in 2008.
Arkansas: the State expects to reduce the number of
households served by up to 20 percent as compared to the number served
in fiscal year 2007.
California: the State expects to serve fewer households
and will have to reduce the amount of funding available for weather-
related (and fire-related) emergencies and disasters than they have
used in the past. No change has been implemented in the eligibility
criteria or benefit structure. The maximum benefit is still $200 and
with higher prices that won't cover much. The maximum for emergency
assistance will remain at $1,000 and that may not be enough to prevent
cutoffs of utility service as energy costs increase. They are only able
to serve 8 percent of the eligible population and there has been an
increase in the number of applications at the local level--with some
local agencies exhausting their allocations sooner. The available
funding will be prioritized to those with the lowest income and highest
energy burden.
Connecticut: the State set their income eligibility level
at 60 percent of State median income as a result of State statute.
Benefits were also set in statute. There is concern that the high cost
of fuel will result in households exhausting their benefits early in
the heating season and there will not be sufficient funding available
to provide adequate benefit levels throughout the winter heating
season.
Delaware: the State will serve up to 20 percent fewer
households than in fiscal year 2007 in order to maintain adequate
benefit levels. Delaware's average benefit is $355 which currently buys
at least 100 gallons of heating oil, propane or kerosene. While the
$355 benefit is not a problem for those homes heating primarily with
gas or electricity, approximately 50 percent of Delaware's LIHEAP
households heat with delivered fuel. In many situations vendors will
not deliver less than 100 gallons of fuel to a home without adding a
surcharge. For this reason, the State did not want to lower their
benefit levels from last year.
In some rural areas the minimum delivery is 150 gallons. If the
State were to lower the average benefit, LIHEAP or the customer would
be paying a premium just to have the fuel delivered. The State believes
that this approach would be unacceptable and therefore they have opted
not to reduce the benefit level this year. In many instances the LIHEAP
benefit is only about 20 percent of the households total winter heating
bill; if the winter is especially cold, the LIHEAP percentage will be
even lower.
Kentucky: the State is expecting to maintain benefit and
eligibility levels; in light of the reduction in Federal funding, they
are expecting to have to reduce the number of households served. With
last year's funding, Kentucky was able to serve 100,566 households with
basic grant funds and 123,728 with crisis assistance. Kentucky's
program generally operates until the end of March and into April as
funding allows, but could run out of funds as early as next February.
Kentucky has made no change to its eligibility criteria or benefit
structure, but will reduce the number served as necessary based on
final funding.
Maine: for the more than 84 percent of the LIHEAP
households that heat with oil or kerosene, the cost of oil as of 11/6/
07 averaged $3.09 per gallon and kerosene at $3.40 per gallon. An
average benefit of $579 to service 48,000 households will only purchase
193 gallons of oil and kerosene at $3.40 will only purchase 170
gallons. This will provide 2 to 3 weeks of home heating in most low-
income housing. The average household's income is $13,000 annually,
many senior citizens with only $7,000 a year to survive on. Right now
Maine would need to receive another $17.5 million just to provide a
$370 supplemental benefit to LIHEAP households and this will still not
provide the same relief as in past program years.
Maryland: the State increased their grant amounts this
year but reduced eligibility from 200 percent of the Federal poverty
level to 175 percent. Governor O'Malley has stated that Maryland will
serve all who apply and are qualified and has stated that ``we will
find the money'' to serve them.
Michigan: the State reduced the maximum amount it will pay
to prevent shut-off or to restore payments from $550 per household to
$350 per household for natural gas and electricity and from $850 to
$650 for households using deliverable fuels in June 2007 due to lack of
sufficient funds to meet the demand during the last fiscal year that
ended 9/30/07. Michigan will continue that reduction into fiscal year
2008 and is closely monitoring weekly expenditures with these reduced
maximums in place to determine if additional reductions will be needed
to stay within available funds. If the high rate of expenditures the
State experienced in October continues, an additional reduction in
these maximums will be needed without additional funds.
Minnesota: the State is maintaining current eligibility
and benefit levels but could run out of funds as early as February.
Nebraska: deliverable fuels make up around 12 percent of
the heating fuels used; the rest is provided by natural gas and
electricity. Nebraska is not planning on reducing benefits but is
looking at how much they can pay in crisis funds for a household this
early in the heating year. Nebraska runs a year around crisis program
along with a cooling program and will continue to make heating/cooling
payments and crisis payments as long as they have the funding to do so.
New Mexico: several of the large companies in New Mexico
have had rate increases approved for natural gas and electricity. Two
rate cases are pending. The propane prices are the biggest concern
since some have gone up more than 50 percent over summer prices. One
company is currently reporting $3.19 a gallon for propane. Most
companies are between $2.20 and $2.65 per gallon for propane.
New York: the State has increased the program's maximum
regular grant by $100 to $540 in order to maintain the program's
purchasing power. The program has only been open for 2 weeks and they
are finding many situations where a regular and an emergency grant must
be issued simultaneously for deliverable fuel customers to be able to
meet minimum delivery requirements. This means that a household's
entire LIHEAP benefit amount will be exhausted in November. If
additional funding is not provided, the State will have to reduce the
number of households receiving benefits.
Ohio: will have to cut back its regular benefit by between
15 and 20 percent. The cost of all utilities are up across the board,
mostly for propane and heating oil. In addition, Ohio has already
received about 10 percent more applications this year than last year at
this time.
Pennsylvania: the State is planning on maintaining current
eligibility and benefit requirements but anticipated serving fewer
households if Federal funding is not increased.
Rhode Island: the State expects to serve 15 percent fewer
families this year compared to last year. Rhode Island has reduced its
average primary grant benefit from $475 to $350. Even with reducing the
average benefit, Rhode Island will assist approximately 15 percent
fewer families as compared to last winter.
Texas: the State operates a year-round energy assistance
program. Their eligibility criteria is set at 125 percent of the
Federal poverty level. They are expecting to serve only 6 percent of
the eligible population, down from 7 percent in fiscal year 2008.
Virginia: the State will serve all eligible households who
apply during the application period. In order to do so, they are
expecting to reduce the percent of heating costs covered by the program
grant. The State is concerned that as a result of the expected
reduction in purchasing power, it could prove to be very difficult for
households that use deliverable fuel, since most vendors have minimum
delivery requirements that will likely well exceed their benefit
amounts.
supplemental funding
Many States, in partnership with their local utilities, also
provide supplemental funding through direct appropriations or by
creating system benefit funds, which are small charges against the
utility rate base that are used to provide discounts and arrearage
protection programs. In addition, utilities have also taken steps to
provide low-income families with additional time to pay their bills by
providing flexible payment arrangements and in many cases actively
supporting State efforts to develop system benefit funds.
The combined total of State, utility and charitable giving was
about $3.2 billion in 2006 with charitable giving being the smallest
amount at about $140 million annually. It is important to note,
however, that these State, utility and charitable funds are no
substitute for adequate Federal funding. The level of support varies
considerably with only 12 States accounting for 83 percent of the total
non-Federal spending on energy assistance.
what happens when families do have sufficient funds to pay for home
heating or cooling? research findings
Funding provided by the Appropriations Committee has allowed us to
conduct surveys of families receiving LIHEAP assistance. Among the
findings of our last survey:
Of the families surveyed, 44 percent said that they
skipped paying or paid less than their entire home energy bill in the
past year. Households with children (67 percent) and those with income
below 50 percent of the Federal poverty level (62 percent) were more
likely to do so.
In addition, 30 percent reported that they received a
notice or threat to disconnect their electricity or home heating fuel.
Again, households with children (51 percent) and those with income
below 50 percent of the Federal poverty level (51 percent) were more
likely to experience this problem.
Also 8 percent reported that their electricity or gas
service was shut off in the past year due to nonpayment of utility
bills. In addition, 16 percent of households with children and 22
percent with income below 50 percent of the poverty level reported a
service termination in the past year.
As well as 18 percent said that they were unable to use
their main source of heat in the past year for reasons ranging from
their heating system was broken and they were unable to pay for its
repair, they ran out of their bulk fuel and could not afford to pay for
more, or because their utility used for heat was disconnected.
Households with children (27 percent) and households with income below
50 percent of the poverty level (36 percent) were more likely to face
this problem.
And 13 percent reported that broken air conditioners or
termination of electric service prevented them from using their air
conditioner. Households with a disabled member (19 percent), households
with children (19 percent) were somewhat more likely to report this
problem.
public health consequences of unaffordable energy
Unaffordable home energy presents a threat to public health and
safety directly in the following ways:
Households respond to high bills, arrearages, or worries
about incurring high costs, by choosing not to heat their homes
adequately in winter or cool them during the summer, or by using unsafe
means to heat or illuminate their homes, for example, heating with a
kitchen oven or barbecue grill or lighting by means of candles. Utility
service shutoffs directly threaten health in this manner. In addition,
when homes in poor structural shape need weatherization, it may be
prohibitively costly or impossible to keep interiors within a safe
temperature range.
Lack of access to energy assistance also threatens health
indirectly. The squeeze put on home budgets by high utility bills and
the threat of shutoff leads households to make difficult trade-offs,
purchasing heat or electricity for air-conditioning instead of food or
medications. In northern States, for example, poor families with
children spend less on food, and children eat fewer calories, compared
with higher-income families (Bhattacharya et al., 1993). Poor seniors
in the north are also more likely to go hungry in late winter and early
spring, while seniors in the south, where energy bills for air-
conditioning can be high, are more likely to go hungry in late summer
(Nord and Kantor, 2006).
Seasonal differences in heating and cooling costs explain
much of the difference in hunger prevalence for low-income households
without school-aged children. Young children from families that are
eligible for but not enrolled in energy assistance are more likely,
than children from families receiving LIHEAP, to be small for their age
(underweight) and more likely to need hospital admission on the day of
a health care visit (Frank et al., 2006).
Researchers from the Children's Sentinel Nutrition
Assessment Program (C-SNAP) at the Boston Medical Center, conclude
that:
``The health consequences of trade-offs in spending can be
serious especially for the youngest children. The first 3 years
of life are a uniquely sensitive period of extraordinary brain
and body growth; the cognitive and physical development that
takes place at this stage will never occur to the same degree
again. Babies and toddlers who live in energy insecure
households are more likely to be in poor health; have a history
of hospitalization; be at risk of developmental problems and be
food insecure.''
conclusion
There is no substitute for adequate Federal funding of LIHEAP. The
authorized level of $5.1 billion would provide sufficient funds to
increase grant levels to adjust for inflation in energy prices and
allow States to reach out to eligible households who are not currently
receiving assistance.
Thank you for this opportunity to testify today. I would welcome
any questions or requests for additional information on this important
program.
The Chairman. Well, I think that's very important to know
and useful to understand. I think that's what's happening here
in the State, I think they deserve credit for being involved,
and that's certainly good but, obviously, we need to do a great
deal more.
Margaret, I saw earlier you had that yellow envelope in
front of you.
Ms. Gilliam. Yes, I do.
The Chairman. Yes, you do.
[Laughter.]
You told me a little earlier that you were carrying your
bills around in that, is that what you are doing, your heating
bills?
Ms. Gilliam. Yes, I am.
The Chairman. I don't know if you wanted--you look like
you've got it all marked down.
Ms. Gilliam. During the summer months, I try to always
prepare for the winter, something I've been doing now for the
past 4 years and----
Let me put my bifocals on so I can see.
[Laughter.]
My heating season consists, I would say, about 5 months a
year. So, you know, saying this is what it cost me last year is
not so. This is only for 5 months. Five months last year, up
until April, the total amount I spent on fuel was $4,384.80.
This year so far, up until yesterday, my heating bill is close
to $4,000, and the last delivery I did get was through the Mass
Energy Association, and I didn't have to pay for that one. That
was actually a good donation. This is only January. So you can
see where my concern is on it.
I even called up Mr. Coard and asked dispirited enough to--
--
The Chairman. I think you're going to get a call, Robert.
[Laughter.]
Ms. Gilliam [continuing]. And he'll say, ``Well, okay, I'll
see what I can do.'' But I can't sit by the phone waiting to
hear from him. I have to kind of sit there and get a little bit
nervous, get a little anxious. All that you see that's on TV is
not so. We weren't told up until the last moment that we
weren't getting this government oil this winter. They were
willing to give us, if we qualified and sent our applications
in on time, first come, first served, we would get 100 gallons
of oil. That's what happened. I called earlier in the season to
make sure that I was able to get it, because as time goes by,
the phone lines, you can't get through. So I did get only 100
gallons of oil.
I don't know where the statistics come from that we see in
the newspapers or on TV. That's not so.
I can spend at least, up until yesterday, with my figures,
at least $700 a month for fuel only. And that's quite a bit. My
Social Security cost-of-living increase this year was only $20.
But my insurance premium went up. My co-pay for my medication
went up. And other little things went up $2 or $3 here, and I
ended up being able to have $1.24 left from that $20 increase
that I had gotten at the beginning of the year.
So it hurts. It really hurts. I'm not ready to give up my
apartment yet, because I have two children that are counting on
me. They are lovely children. They are two young teenagers, and
they need me, and I need to be there for them. But I do need to
reach out to the community to give me the help I've needed.
Like I say, I'm not the only one out there. If I call--I don't
even get upset when they tell me that they cannot--and just
stay in and keep my eyes glued to the newspaper or TV to kind
of get a feel of where can I go, and that's been kind of hard.
But as Mr. Coard has stated, all that he has stated, it is
facts, not fiction.
The Chairman. Diane, is there anything you want to add to--
--
Ms. Strollo. No, I think that was all I had to say today.
The Chairman. I am very grateful to all of our panel, but
to you two in particular. It's never easy to be able to talk
about the kind of personal challenges that you are facing. I
mean, it's not easy. I think, the best way we can ever express
our appreciation is to do something about it. And that, you
certainly have my commitment and pledge that we will.
I want to thank all of you. It has been very useful and
helpful. We touched on related subjects: are the people going
to be able to hold on to their mortgages when they're running
through these kinds of challenges, whether they're going to be
able to get the food because of what's happening in these food
banks; cost of their health care--an issue that's very close to
my heart about what we're trying to do and how failure to deal
with this issue undermines efforts that we are facing on that.
We haven't talked about even tuition, how we're going to get
these teenagers in school along with the increase of cost of
tuition. These are all the central challenges that are just
defining challenges about what kind of society we are and
whether we really have a sense of community and whether we have
a sense of fairness and decency.
It is, I find, unconscionable about the profiteering that's
going on at this time. I mean, it is unconscionable when you
have these extraordinary--the core prices that are being set by
a monopoly internationally and the OPEC and American companies
are profiting in the most incredible way, and finding out that
our fellow citizens who have been part of our community are
faced with these kinds of challenges in terms of their own
lives and in terms of their children's lives. Again, it's
difficult, but I think any family that hears the story can
certainly understand the cost in terms of anxiety for these
family members as they're looking--thinking about this week,
next week, the following week, every week, every day. This is
something that's going on, and we, as a country and as a
society, know how to deal with it, and we can deal with it, and
the question is whether we will deal with it.
Well, you have certainly my strong, strong commitment to be
in the battle for it, and I am hopeful about the outcome,
hopefully, the sooner, the better.
I had a number of my colleagues that had good statements--
all who are strong supporters of our program, Senator Dodd of
Connecticut, Bernie Sanders of Vermont who has been very, very
involved and engaged in this and talked to me before being
here, he is actually hearing some other committee business,
otherwise, I think he would be here today; Senator Collins,
Representative Markey, all of those, and my colleague, Senator
Kerry, as well.
So we have a very good group that are strongly committed,
and we will make the battle, and we don't intend to lose.
So we thank all of you for being here today.
[Additional material follows.]
ADDITIONAL MATERIAL
Prepared Statement of Senator Sanders
Chairman Kennedy, thank you for holding this very important
hearing. As you know, I had planned to be here with you this
morning but due to the change in schedule, I unfortunately
could not make it to Boston today. Thank you for including my
statement in the record.
Mr. Chairman, the skyrocketing price of home heating oil,
propane, kerosene, natural gas and electricity is already
stretching the household budgets of millions of families with
children, senior citizens on fixed incomes and persons with
disabilities beyond the breaking point.
Today, there is one Federal program to help the most
vulnerable people in this country stay warm this winter. That
program is the Low Income Home Energy Assistance Program
otherwise known as LIHEAP, and that program is needed now more
than ever.
Unfortunately, the spike in energy costs is completely
eviscerating the purchasing power of this extremely important
program in Vermont and other cold weather states across the
country. If the President and the Congress do not act soon to
confront this problem head-on, I fear for the public health and
well-being of millions of our most vulnerable citizens.
Community Action Programs throughout the State of Vermont,
the agencies on the front lines of this energy crisis, have
reported to me and my office about the severity of the heating
crisis this winter. Let me just give you a few examples.
As of last week, the Central Vermont Community Action
Council (CVCAC) exhausted their entire $206,000 LIHEAP budget,
and is currently negotiating with the State for more money.
CVCAC has estimated that they will need an additional $400,000
in LIHEAP funding to make it through the rest of the winter or
more than double what they spent on LIHEAP all of last year. In
central Vermont, CVCAC has reported heating oil prices as high
as $3.73 a gallon and propane prices as high as $3.99 a gallon.
These are astronomical prices. To put this in perspective, just
four years ago it cost less than $1.50 a gallon for heating oil
in my state. Today, it now costs about $500 for CVCAC to
arrange a delivery of 125 gallons of emergency heating oil this
winter, $200 higher than last year.
The Champlain Valley Office of Economic Opportunity has
reported to my office that if more LIHEAP funds aren't released
soon, they will have exhausted all of their LIHEAP funding by
the third week of February.
Similar problems are also occurring in the northeastern,
southeastern and southwest parts of Vermont. In other words,
thousands of senior citizens on fixed incomes, low-income
families with children, and persons with disabilities are in
danger of going cold in my State of Vermont if we don't
significantly increase LIHEAP funding soon. In the richest
country on the face of the earth, we must not allow that to
happen. We must ensure that no American has to make the
unacceptable choice between heating their homes, putting food
on the table or paying for other basic necessities.
Mr. Chairman, as you know, on December 4, 2007, I
introduced S. 2405, the Keep Americans Warm Act, to provide an
extra $1 billion in emergency LIHEAP funding--money that would
be in addition to the $2.4 billion provided in the Fiscal Year
2008 Labor, Health and Human Services and Education
Appropriations bill. I am pleased that the Omnibus
Appropriations bill provided an extra $200 million for LIHEAP,
but I strongly believe that LIHEAP still needs an additional
$800 million. That is why I will be introducing an amendment as
soon as possible to provide this much needed increase to
LIHEAP.
Mr. Chairman, I am deeply appreciative that you are a co-
sponsor of this amendment and the Keep Americans Warm Act. I am
also delighted that this legislation has strong bipartisan
support and has so far been endorsed by the AARP, the American
Gas Association, and the National Energy Assistance Directors
Association, just to name a few.
Finally, Mr. Chairman, while I welcome the President's
release of $450 million in emergency LIHEAP funding, everyone
should know that the President still has $160 million at his
disposal to distribute to states dealing with heating
emergencies. Anyone paying attention to this issue can tell you
that there is a home heating emergency in Vermont and
throughout this country. The President should release all of
this funding immediately targeted to those States most in need.
Again, I thank the Chairman for holding this important
hearing and allowing me this opportunity to submit this
statement for the record.
Prepared Statement of Senator Collins
As I travel around the State of Maine, I hear again and
again about the high cost of energy causing a crisis situation
for many Maine citizens. The cold weather combined with rapidly
increasing prices for home heating oil, gasoline, diesel fuel,
and other products refined from oil has created a huge burden
for families throughout the Northeast. I am pleased that
Chairman Kennedy and Ranking Member Enzi are bringing attention
to this important issue with today's hearing.
Earlier this month, the price of crude oil on the New York
Mercantile Exchange briefly reached $100/barrel. This caps a
rapid rise in prices from $71/barrel in August 2007, a sharp
increase just at the time when heating oil demand rises. This
winter, the Energy Information Administration estimates that
households can expect to pay between 10 to 22 percent more for
heating fuels than during the 2006-2007 winter. In my State of
Maine, consumers face home heating oil prices 48 percent higher
than this time last year ($2.26/gallon on January 8, 2007
compared to $3.35/gallon as of January 9, 2008).
That troubling rise touches virtually every aspect of the
economy. Oil prices significantly affect the costs of heating
homes, driving family cars and commercial trucks, running
fishing boats, operating farm and logging equipment, and
manufacturing operations.
All of this has a particular impact on low-income citizens.
Throughout my time in the Senate, along with a bipartisan group
of Senators, I have fought for increased funds for the Low
Income Heating Assistance Program, LIHEAP, the Federal program
that provides States with funding to help low-income people and
the elderly meet their energy needs. The LIHEAP program
provides assistance for 48,000 Mainers each year and nearly 6
million households nationwide.
In September 2007, we secured $131 million in contingency
LIHEAP funds. We also supported a nearly $400 million increase
over last year for LIHEAP funding in the consolidated
appropriations bill, signed by the President this month.
However, this winter has brought a sharp increase in
applications for LIHEAP assistance, but hundreds of those
requests are being turned down due to a shortage of funds. For
that reason, we requested that the President immediately
release the $586 million that Congress put in the LIHEAP
contingency fund. Maine needs at least $20 million of those
additional contingency funds to keep abreast of the increased
requests. Yesterday the President released $450 million of the
LIHEAP contingency funds, with about $9 million going to Maine.
While it is encouraging news that the Administration agreed to
our request to release these funds, the need for additional
assistance remains critical. This winter has brought a sharp
increase in applications for LIHEAP assistance, but hundreds of
those requests are being turned down due a shortage of funds. I
will continue to seek the release of the remaining contingency
funds. Citizens in the Northeast should not be forced to choose
between medicine and food or heat, yet I continue to hear from
people faced with exactly such dire choices.
We also are working to obtain additional emergency LIHEAP
funding for this winter. We are pursuing every possible
option--for example we tried to include this funding in the
Farm Bill the Senate debated in December. Unfortunately, we did
not succeed, but this will remain a priority when the Senate
reconvenes.
Many causes appear to have contributed to the sharp rise in
oil prices: increased global demand for crude oil, instability
in the Middle East and Venezuela, supply decisions of the OPEC
cartel, insufficient U.S. refining capacity, the declining
value of the dollar, the timing of government purchases for the
Strategic Petroleum Reserve, and speculative trading on futures
markets. To minimize one of these causes, I, along with
Senators Lieberman, Levin, and Coleman, recently urged the
Department of Energy to temporarily suspend filling the
Strategic Petroleum Reserve (SPR). It makes no sense whatsoever
for the Department of Energy to purchase more oil for the SPR
at a time when prices are at record highs. The Department
should not be taking oil off the market and adding to pressures
on supplies when consumers are struggling to heat their homes
and fill their gas tanks.
Our long-term challenge to address energy prices is, of
course, to reduce our reliance on imported oil. We need to
pursue the goal of energy independence just as fervently as the
Nation embraced President Kennedy's goal in 1961 of putting a
man on the moon. Energy independence and stable energy costs,
and environmental stewardship, are goals that are within our
reach, but they require a major national effort. The time to
begin that effort is now.
[Whereupon, at 12:32 p.m., the hearing was adjourned.]