States Strapped to Provide Low-Income Heating Assistance

Northeastern states are facing a difficult choice this winter: Increase the heating assistance benefit to adjust for higher energy prices and thereby reduce the number of households served or provide a smaller heating assistance benefit to a large number of homes. The key concern for the Eastern region is the rapid rise in heating oil prices.   

The Northeastern situation is unique. The Energy Information Administration has projected that prices in the Northeast for home heating oil could go as high as $1,879 this winter, about 25 percent higher than last year’s level.  In comparison, the price of natural gas, the other major heating fuel in the Northeast, is only expected to increase 9.1 percent. This is of particular concern to the Northeast, since the region uses 75 percent of the heating oil used in the nation.

Traditionally heating assistance has been issued through the Low-Income Home Energy Assistance Program, which provides grants to states to help low income families pay their heating and cooling bills. LIHEAP, however, has not been keeping up with the rise in home energy prices. As a result, the purchasing power of the average grant has been declining.   

Individual states are feeling the effects of home heating price increases in different ways. This is clearly expressed by The National Energy Assistance Directors’ Association Issue Brief released Nov. 26.

• Delaware, according to the report, will serve up to 20 percent fewer households than in 2007 in order to maintain current benefit levels. Delaware faces a unique predicament – 50 percent of homes that receive LIHEAP benefits are heated by delivered fuel. In many cases venders include a surcharge on deliveries of less than 100 gallons of fuel. Delaware therefore opted to decrease the number of homes it covers in order to maintain a benefit package that buys at least 100 gallons of fuel. 
• New York has increased the regular grant from $440 to $540 in order to maintain the level of home heating fuel provided each month. Because of the current costs of heating fuels and the lack of funding, New York is facing a situation where a household’s entire LIHEAP benefit amount will be exhausted in November.
• Rhode Island is not only decreasing the number of households that receive benefits, the state is also simultaneously decreasing the benefits provided. Not only has Rhode Island reduced its average primary grant benefit from $475 to $350, but the state also expects to serve 15 percent fewer families this winter.
• Vermont, meanwhile, illustrates another problem faced by state heating assistance programs this year –demand. The demand for heating assistance has increased by 10 percent, and the average cost of heating a home has gone up by 40 percent. The funding for LIHEAP in Vermont’s, however, is the same this year as it was last year. The result is that the individual home benefit package in Vermont has decreased in order to cover all the new homes eligible for LIHEAP.
• Massachusetts has chosen to spawn an individual effort to provide an extra $15 million in state funds on top of its regular and emergency LIHEAP funds. "The $15 million ... largely enables us to assure there are not cutoffs," Massachusetts Gov. Deval Patrick said during a press conference. The state hopes these funds will effectively supplement LIHEAP, and prevent the state from having to severely cut back on the benefits offered and the number of homes assisted.

Funding for LIHEAP has become a contentious issue. The 2005 Energy Policy Act authorized $5.1 billion for LIHEAP block grants and $600 million for emergency funds, though it expired in FY 2007. Of the funds authorized, $2.1 billion was appropriated for LIHEAP for FY 2007 –  $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 FY 2008, the appropriation level as specified in the FY 2008 Labor, Health and Human Services and Education Appropriations Act, passed by Congress, would provide the same level for the block grant and increase the emergency contingency funding level by $250 million from $181.5 million to $431 million. 

As in FY 2007, no advance funding was appropriated.  President George W. Bush vetoed the Labor-HHS bill Nov. 13. In his budget, Bush requested LIHEAP funding be cut by $379 million. Congress now needs to pass another appropriations bill with LIHEAP funding.

Though the final appropriation level for LIHEAP is being debated, the federal government could still help poor families cope with high heating oil prices this winter. The federal government has the power to release LIHEAP emergency contingency funds. This section of the legislation allows the President to release funds under certain condition including high energy prices.

The Council of State Governments’ Eastern Regional Conference (CSG/ERC) wrote to President Bush urging him to release the remaining $20 million in emergency contingency funds for LIHEAP. In the letter, CSG/ERC stated that “while families across the nation are struggling with high energy prices, we believe that the extreme increase in home heating oil calls for a selective release of emergency funds to address the needs of these households.”

--Zach Campbell

Comments

[Wood Stove Accessories]

Several counties including Jackson County, NC are actually providing firewood to low income families.

[Henry Switzer]

Hi, I would like to say that I have been successfully heating my home now for over 5 years with wood. It truly is an awesome way to save money on heating costs. I would advise anyone considering a wood furnace or some type of wood heating device to have a good free source of your own wood though, preferably your own wood lot.