Low-income residents who apply for state help to pay their heating bills this winter will get less money than last year due to a projected nation-wide increase in requests coupled with potential cuts in federal funding.
Federally funded state programs helped a record 5 million low-income Americans pay their heating bills last year, but demand is expected to increase this winter due to high jobless rates and heating fuel costs.
"Unemployment remains high and poverty rates are up. You have continuing high natural gas and heating oil prices and a return to normal, colder winters," Mark Wolfe, head of the National Energy Assistance Directors' Association, said.
"As it stands, states will have to spread less money between more applicants," Wolfe said.
States in the Northeast, upper Midwest and Rocky Mountains expect the largest increase in the number of people asking for help to pay their heating bills. To meet the demand, states will either tighten eligibility or lower assistance stipends, Wolfe said.
In Colorado, Montana and Wisconsin, for example, state officials are estimating a 10 to 20 percent increase in the number of people applying for heating assistance because of spikes in natural gas prices and high unemployment.
To make sure the Wisconsin Home Energy Assistance Program can help all applicants, the average heating stipend this winter has been reduced by 25 percent, from $387 to $292. Natural gas, used by 70 percent of Wisconsin residents for heating, is about 20 percent more expensive than last year, officials said.
Natural gas prices have spiked more than 70 percent in Colorado and Montana, where it is also the main source of heating fuel. Montana's energy assistance program reduced its average stipend of $420 by 17 percent, to $350. Colorado's program reduced its average stipend 14 percent, from $302 to $262.
Increased requests for heating assistance come at a time when Congress is debating cutting federal funding for the Low-Income Home Energy Assistance Program (LIHEAP), which is the primary source of funding for state programs. The annual program expired at the end of October, but Congress has extended temporary funding through November 14.
"The longer (renewing funds) drags on the better, because once it gets cold, Congress is more likely to relax funding," Wolfe said.
Last year, Congress allocated just under $2 billion nationally for LIHEAP, but is wrangling over this winter's funding, with the House pushing for $1.7 billion and the Senate proposing $2 billion. About 20 states supplement their LIHEAP programs with fees charged to utility companies, but few or none will pay for energy assistance out of their general funds this year due to tight state budgets, Wolfe said.
Regardless of which version passes, the projected need for energy assistance "far outweighs the available funding," the Coalition of Northeastern Governors said in a letter to Congress last month. The governors estimate that only 15 percent of the country's 30 million eligible households receive help paying their heating bills at current funding levels.
Demand for energy assistance depends largely on how cold it gets, which is difficult to predict. The National Oceanic and Atmospheric Administration says there's an even chance for either above or below average temperatures this winter.
Whatever the temperature, heating bills are expected to increase.
Nationwide, winter natural gas prices are expected to be 10.5 percent higher than last winter, said Dave Costello, an Energy Information Administration economist. If winter temperatures are colder than expected this year, prices could go higher, Costello said.
Colorado's energy assistance program, called LEAP, is bracing itself for a record number of applicants this winter because the state's largest heating utility raised natural gas prices 73 percent last month, the largest increase in the nation, said LEAP director Glenn Cooper.
"People need more help this year and we're giving them less," Cooper said.
The average heating bill in Colorado will increase from $389 per month to $673 per month from November to April, Colorado officials estimate. As a result, enrollment in LEAP is expected to exceed last year's record of 83,000 by at least 10,000.
At that price, many low-income and elderly residents will have to choose between buying food and medication or heating their homes this winter, said Marsha Schuppe, director of energy assistance in Logan County.
"Even people that work full-time jobs for minimum wage won't be able to pay for heat this winter," Schuppe said.
To inquire about low-income energy assistance in your state, visit the federal Administration for Families and Children LIHEAP state contact list.