JAMES BRETT
‘An uphill battle’
Between the war in Iraq and the devastating hurricanes hitting some of the nation’s major oil refineries, everything from driving a car to heating a home is going to be more expensive.
New Englanders are bracing for an anticipated surge in home heating costs, with some regional groups and Massachusetts legislators preparing for the worst.
In recent weeks, Bay State lawmakers have proposed a package of tax credits and deductions to encourage energy efficiency and help low- and moderate-income families with home heating bills.
On a national level, groups like The New England Council have urged lawmakers to increase funding for the Low Income Home Energy Assistance Program, or LIHEAP, a 23-year-old federal program that provides home heating and cooling funds to low-income households throughout the country. The New England Council wants Congress to boost funding for the program – which could be funded anywhere between $2 billion to $2.18 billion for the next fiscal year – to at least $4 billion.
“This is a quality-of-life issue,” said James T. Brett, president and chief executive officer of The New England Council. “We live in a region of the country that is colder than all the other regions of the country.”
The New England region, which relies heavily on the funding because harsh winters can lead to unaffordable heating costs for low-income residents, received more than $217 million in LIHEAP funding this year.
Massachusetts received the biggest share, 43 percent – or $91.5 million – which served 136,656 households. Eligible households in the Bay State received an average of $464 to help pay home heating costs.
‘Extremely Thankful’
The state allocated no additional money to LIHEAP from 1999 to 2003. Last year the state provided an additional $7.5 million, and the House and Senate recently approved different versions of a heating assistance bill that would provide a one-time $20 million supplement to the LIHEAP program and create a new state income tax deduction of up to $800 for home heating expenses for low- to moderate-income residents.
Under the proposed legislation, both homeowners and renters would be eligible for the deduction.
The Senate approved its own version of the $80 million bill last week. A week earlier House lawmakers passed a bill that would provide up to $40 million in tax credits for the purchase of products that increase residential heating efficiency. Residents who buy products such as energy-efficient water heaters, insulation or replacement windows could get a tax credit of up to 30 percent of the purchase price, with a maximum credit of $600.
In addition, the House bill would create a $5 million fund for the state Division of Energy Resources to provide zero-interest loans for residential energy-efficiency improvements and a one-time tax credit of 15 percent or up to $300 to businesses for the purchase of solar water-heating systems.
Agencies that provide fuel assistance to families in Massachusetts praised the state Legislature for taking swift action to address the issue. Under the proposed legislation, eligible households would be able to receive up to $765 in assistance, compared to $600 in previous years.
“We are extremely thankful that the state stepped up early,” said John Wells, vice president for energy services at Action for Boston Community Development, an agency that has provided assistance to 15,000 households in Boston, Brookline and Newton.
Wells said state leaders realized the severity of the situation when they saw the dramatic increase in oil prices. The average cost of a gallon of oil is around $2.45, up from just under $2 a gallon last year, according to Wells.
“Historically, [the LIHEAP] program has generally covered about two tanks of oil per household. The average household in Massachusetts uses about three or four tanks a year. In the past, we have been able to assist people through early February,” Wells said. “The problem with the price increase in the last few years is that the federal allocation and the state allocation were buying a little over a tank [of oil].”
Earlier this fall, Massachusetts launched a number of statewide education efforts to give residents energy-saving conservation tips, such as installing or replacing weather stripping, windows and doors. The state Department of Telecommunications and Energy also held informational hearings in October to discuss rising energy costs and what assistance is available to residents.
Nationally, the House of Representatives has appropriated a total of $2 billion for the LIHEAP program for next fiscal year, while the Senate has appropriated $183 million more. The projected funding for New England for next year is between $181 million and $192 million.
But given that heating costs are expected to soar this winter, groups like The New England Council are pushing federal legislators to allocate even more funding for the program.
The cost of fuel is projected to rise nearly 50 percent this year on average, according to a report released last month by the U.S. Department of Energy. Households relying on natural gas are expected to see their bills rise by 48 percent, or $350, according to the report, while households heating primarily with heating oil will pay $378 more, or 32 percent.
As it stands, families who were eligible for assistance last year will get the same amount of assistance this year, but the funds won’t be enough to cover this year’s costs, according to The New England Council.
“These vouchers that have been given in the past just won’t go as far,” Brett said.
Efforts to bolster the LIHEAP program have come up several times in Congress, with attempts to increase the funding by $1.5 billion to $2 billion, but a supermajority Senate vote is required to pass any increase.
Fifty-four senators have agreed to vote for the increase so far, Brett said, and several have offered amendments.
“Unfortunately, these amendments have passed with a majority but we need 60 votes,” Brett said. “It’s an uphill battle.”
But Brett is optimistic that the increase could pass. Most people recognize the importance of LIHEAP, he said.
About 349,600 households in New England received assistance this year, a 29 percent increase over the year before.
Citing information from the National Energy Assistance Directors’ Association, the New England Council said that number of households nationwide receiving LIHEAP assistance has jumped from 4.2 million in 2002 to an estimated 5.1 million this year, the highest level in a decade.
“In [fiscal year] 2004, Congress appropriated $2.186 billion for LIHEAP. But the program funding has not kept pace with the increase in energy prices,” Brett said.
