New England desperately needs LIHEAP funding

Experts predict it’s going to cost more for homeowners to heat their homes this year. The Energy Information Administration (EIA) is predicting a 28 percent increase in heating costs for homeowners this winter. Therefore it is critical for New England that Congress fully fund this year’s Low Income Home Energy Assistance Program (LIHEAP) before the end of the session.

In its recent winter fuels outlook report, the EIA noted that heating oil prices are expected to average 29 percent higher compared with last winter and homeowners’ bills will likely rise about 28 percent.

In addition, the EIA reports that natural gas prices are expected to be 11 percent higher and propane prices could average 17 percent above last winter, with 22 percent higher costs for propane-heated households. The EIA points to tight global oil markets and increases in crude oil prices as the cause of the higher prices.

LIHEAP provides money to help low-income households afford home heating. Funds are allocated to the neediest populations, including families with young children, people with disabilities and the elderly. An estimated 314,000 households in New England received assistance through the 2003 heating program. Historically, New England has received almost 10 percent of formula funding through LIHEAP.

LIHEAP funding is an important issue for New England, which is not only colder than other parts of the country, but also lacks natural energy supplies of its own and relies heavily on energy imports. New England and the rest of the Northeast are more dependent on home heating oil, consuming 75 percent of the nation’s heating oil.

New Hampshire receives a significant amount of LIHEAP funding. In 2003, New Hampshire received more than $16 million in funding – or 8 percent of the New England total – and served more than 24,000 households.

The funding of LIHEAP also is a quality of life issue. The program makes a key difference in the lives of those who are in the most need so that they will not have to face the difficult choice of balancing heating costs against other living expenses.

Last year, LIHEAP was funded at $1.8 billion with $100 million in emergency funds.

With instability in the economy and unemployment, more families are eligible and will likely need assistance this year. Forecasters also are predicting a colder-than-normal winter this year. The rapidly rising costs of home heating and an increase in the number of applicants for state LIHEAP aid are pushing the program’s effectiveness to its limits. If LIHEAP funding is not increased, states will be confronted by difficult choices such as reducing the benefits per household or turning away new applicants.

In September, the U.S. House of Representatives increased LIHEAP funding for the 2005 fiscal year to $1.911 billion, with $100 million in emergency contingency funds. The U.S. Senate Appropriations Committee subsequently set LIHEAP funding at $1.9 billion, with $100 million in emergency funds. There also is additional support in the Senate to add up to $600 million to the LIHEAP emergency contingency fund.

It is critical that Congress finish its work as soon as possible so that LIHEAP can be fully funded as New England and the rest of the country enter the winter heating season. The New England Council applauds the continued efforts of the New England Congressional delegation to increase LIHEAP funding and calls upon Congress and the administration to keep our citizens warm this winter.

James T. Brett is president and chief executive officer of the New
England Council, the nation’s oldest regional business organization.