U.S. Senator Susan Collins, Co-Chair of the Senate Northeast-Midwest Coalition, today sent a letter to President Bush calling on him to release $120 million in remaining contingency funds from the Low Income Home Energy Assistance Program (LIHEAP) to help alleviate the burden high energy prices have placed on working families and seniors throughout the country. Collins was joined by 44 other senators in making the request, including Sen. Jack Reed (D-RI), Co-Chair of the Northeast-Midwest Coalition.
LIHEAP is a federal block grant program that provides states with annual funding to operate home energy assistance programs for low-income households. In addition to helping to pay energy bills for low-income families and the elderly, LIHEAP helps to fund energy crisis intervention programs, low-cost residential weatherization and other energy-related home repairs, and can provide life-saving assistance to provide air-conditioning and fans to the elderly and disabled. Each year, almost five million low-income families rely on LIHEAP to assist with the costs of heating and/or cooling their homes.
“With the costs of heating and cooling our homes at unprecedented levels, we must provide adequate funding for this essential program that serves as the lifeline to some of our most vulnerable citizens,” said Senator Collins. “It is my hope that the President will support our request to immediately release these emergency funds.”
In her letter, Collins noted that a recent survey conducted by the National Energy Assistance Directors’ Association (NEADA) found that more than 15.6 million households across the United States stand to be disconnected from electric and natural gas service because they cannot pay their energy bills.
Currently, the average cost of a gallon of #2 Heating Oil in Maine stands at $4.60, an increase of $1.91, or 71 percent since October of last year.
A full text of the letter follows:
Dear Mr. President:
We are writing to urge you to immediately release the remaining $120 million in the Low Income Home Energy Assistance Program (LIHEAP) contingency fund to address the needs of families and seniors across the nation. Due to the urgency of this crisis, we request that you release funds in no less than two weeks of today’s date.
In some areas of the country, many families are still reeling from the high energy prices from this past winter. In other areas of the country, we have already seen hotter than normal temperatures. For low-income households, LIHEAP is an important safety net and will save many from making the tough choice between paying their energy bill or putting food on the table.
As you release contingency funds, we urge you to consider several factors: the threat of utility shutoffs for millions of households, families trying to pre-buy energy for the coming winter, continued high energy costs and the lack of leveraging money this year that states were counting on.
Record high energy costs have resulted in record numbers of households facing utility disconnection. The National Energy Assistance Directors Association (NEADA) estimates that more than 15.6 million households face utility shutoffs because they cannot pay their energy bills. Shutoff moratoria have run out in the states that have them. Many families are already experiencing this difficult situation and many more will face this prospect without additional LIHEAP funding.
Additionally, families in cold weather states who were able to pay this winter’s bill are already preparing for next winter and are finding the costs of home heating to be out of reach. In its most recent Short-Term Energy Outlook, the Energy Information Administration (EIA) predicted that the cost of home heating oil will increase more than 41 percent from the 4th quarter of 2007 to the 4th quarter of 2008. This increase comes on top of the 162 percent increase in heating oil prices that occurred between January 2000 and March 2008. Recognizing that prices will continue to rise, many families are trying to be prudent by locking in lower fuel prices. Even now they cannot afford payments. If prices escalate during the winter, the burden will be even greater. An influx of LIHEAP money now will help those families plan ahead and be a more efficient use of federal funds.
In the immediate term, already-high energy costs are putting upward pressure on energy rates. Many utility companies have already or will soon increase their rates. In Virginia, Dominion Power has applied to raise rates 18 percent; in Missouri, AmerenUE asked for a 12.1 percent increase; in Oklahoma, Public Service Co. implemented a 25 percent increase on June 1; and in New York City, Con Edison expects a 13 percent increase this summer on the heels of a 4.7 percent rate increase in April.
Finally, we encourage you to consider assistance to states that were expecting – but will not receive – funding this fiscal year under the LIHEAP Leveraging Incentive Program. This program rewards states for supplementing their federal LIHEAP dollars through acquiring non-federal funds. However, the Department of Health and Human Services determined that the FY2008 Omnibus Appropriations Act (P.L. 110-161) did not authorize them to distribute leveraging grants. Unfortunately, HHS failed to provide adequate notice of this determination to states. As a result, states that planned for this money in their budget will be forced to serve fewer households at this critical time.
For all these reasons, we believe that it is of utmost importance that you release all contingency funds now. Approximately $100 million of the fund will expire at the end of the fiscal year. The other $20 million in the contingency fund – left over from a FY2005 appropriations bill (P.L. 108-447) – does not expire, but we urge you to release it as well, given the clear need.
Thank you for your consideration of this vital issue.
Sincerely,
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