03.01.05

Cantwell Urges $3 Billion in Funding for Low-Income Energy Assistance

Bipartisan group of Senators pushes for additional LIHEAP funds;Increased aid could help more than 100,000 Washington families

WASHINGTON, D.C. – Senator Maria Cantwell (D-WA) and a bipartisan group of 43 other Senators today urged the Senate Budget Committee to provide $3 billion in funding for the Low-Income Home Energy Assistance Program (LIHEAP) in Fiscal Year 2006. A full $3 billion in the Budget Resolution for LIHEAP would allow the Senate to reauthorize and fully fund the program this year. The program officially expired in 2004. If funded at the $3 billion level, the federal government would provide resources to serve over 100,000 Washington state families in need of heating assistance next year.

"Over three out of four Washington families that need help won't get it this year because the funds aren't there," said Cantwell, a member of the Senate's Energy Committee. "For many low-income families, disabled individuals, and senior citizens living on fixed incomes, home energy costs are unaffordable. In the aftermath of the Western energy crisis and the proposed Bush energy rate increases, we can't leave thousands in Washington out in the cold."

"If the Bush Administration is successful in adding another $1.7 billion to Northwest power rates, we'll find ourselves in the midst of another energy crisis—especially since we know the impacts will be felt disproportionately by the Washingtonians who can least afford it," Cantwell continued. "We need to prepare for the worst and provide the federal funds necessary to start addressing the backlog in energy assistance. And we need to fight tooth and nail to prevent the Administration from raising our region's power rates any further."

The LIHEAP program provides federal funds to states every year to distribute to low-income families through local organizations. Typically, Congress designates a portion of this money for distribution to states through a formula set in the law, and sets aside another fund for the Administration to release when an energy emergency occurs.

For Fiscal Year 2005, Congress appropriated about $1.9 billion in LIHEAP money. Washington state received about $38 million of these funds, or enough to serve about 62,000 low-income households in need of energy aid. But in addition, Congress designated $300 million in emergency energy assistance funds. While Washington state has received about $2.8 million of these resources, the Administration has thus far opted not to release the remaining $100 million, which remains unspent even as the total number of households asking for assistance nation-wide is expected to reach a 10-year high. This year, 77 percent of the eligible families in Washington state cannot receive energy assistance due to a lack of funds.

Meanwhile, as part of its Fiscal Year 2006 budget proposal, the Bush Administration unveiled a plan to raise the energy rates of the Bonneville Power Administration (BPA) until they are roughly the same as rates charged elsewhere in national electricity markets. Based on assumptions about current market prices, the Northwest Power Planning Council has estimated the Administration's proposal would hike Northwest power rates by $1.7 billion.

On average, residential customers of public power utilities would see rates rise about 39 percent, or by $288 a year. However, "the effect would be larger for customers of utilities that rely heavily on Bonneville power. These utilities tend to be smaller and more rural and are likely to have a greater share of electric heat. A household with an all-electric home would see larger increases-about $40 per month," the Council concluded.

In Washington state today, 72 percent of low-income families use electricity to heat their homes. And already, the 105,000 Washingtonians with incomes below 50 percent of the federal poverty level spend 34 percent of their entire annual pay on home energy bills.

The Administration included its BPA rate increase proposal in its Fiscal Year 2006 budget, released February 7. Since its creation in the 1930s, BPA's rates have been based on costs—rather than market prices, which are typically about double. Bonneville provides about 70 percent of the power consumed in the State of Washington as a whole. Cantwell has vowed to stop the Administration's Northwest rate hike plan.

Text of Senators' letter to the Budget Committee Below

March 1, 2005

Dear Chairman Gregg and Ranking Member Conrad:

The Low Income Home Energy Assistance Program (LIHEAP) provides a vital safety net for our nation's low-income households. LIHEAP helps low-income families and seniors remain healthy and secure from bitter cold winters in the North and hot summers in the South. We are writing to request that the budget provide $3 billion for LIHEAP in fiscal 2006 and that the allocation provide for advance appropriations for fiscal 2007. With $3 billion in regular funding and advance appropriations, LIHEAP can help working low-income families, senior citizens, and disabled individuals maintain economic stability.

For many low-income families, disabled individuals, and senior citizens living on fixed incomes, home energy costs are unaffordable. These families often carry a higher energy burden than most Americans – spending up to 17 percent of their income on home energy bills. Each year, this burden grows as natural gas, heating oil and propane prices continue to increase.

Since 1981, the number of households eligible for LIHEAP assistance has grown. This winter, LIHEAP will serve an estimated 5 million households. Yet, this is only about 15 percent of the 32 million households that are eligible for federal assistance. We recognize the difficult choices that you face in shaping the fiscal 2006 budget resolution, however, we believe that the continued growth in households eligible for LIHEAP assistance demonstrates that the need for this program has never been greater. The LIHEAP program remains seriously underfunded. The program needs at least $3 billion simply to equal the purchasing power it provided in 1982.

Energy is a basic need, and without LIHEAP assistance, low-income families and senior citizens face the impossible choice between paying their home energy bills or affording other basic necessities such as prescription drugs, housing and food. The Boston Medical Center found that many poor children with chronic health conditions start to lose weight and suffer additional health problems associated with malnutrition in the winter because their families are spending less of their income on food and medicine and more on fuel bills. The National Energy Assistance Directors Association surveyed over 2,000 LIHEAP recipients on the choices made by households when faced with high-energy bills. The survey found that in the last five years:

· 38 percent of LIHEAP recipients went without medical or dental care;

· 30 percent went without filling a prescription or taking the full dose of a prescribed medicine;

· 28 percent did not make a rent or mortgage payment;

· 22 percent went without food for at least one day; and

· 21 percent became sick because their home was too cold.

We also request advance funding for LIHEAP. Advance funding enables states to pre-purchase fuel and start planning for the winter heating season in spring and early summer. Advance LIHEAP funding allows states to plan more efficiently and improve program management, and therefore, be more economical with limited Federal resources. It also ensures that states provide timely assistance to low-income families who cannot afford to wait.

Thank you for your consideration. We look forward to working with you to make sure that working families, seniors and disabled individuals have the resources necessary to provide for their basic energy needs.

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