[Official GPO Transcript] [The Chairman] … of the Select
Committee on Energy Independence and Global Warming. While the debate in Congress over high gas
prices has been red-hot this summer, families in the Northeast
and Midwest have also been thinking about how they will cope
with the cold weather this winter. The prices of home heating
fuels have been skyrocketing and millions of families will
face tough choices during the upcoming months between the purchasing
of fuel or purchasing of food. The Department of Energy's projections for
home heating prices this winter are grim. DOE forecasts
that families in the Northeast who use heating oil will spend 30
percent more this winter than last year, an increase of more
than $600.
Families using natural gas will spend nearly 20 percent
more this year. And regardless of the region of the country
or the home heating fuel, the Department of Energy is forecasting
that families will experience a substantial increase in
their heating costs this winter. We will be hearing from the Department of
Energy later on this afternoon. American consumers, who have already been
getting tipped upside down when they pull up to the gas pump,
will now also face high energy prices when they return home.
Incredibly, this year many low-income families will spend even
more to heat their homes than they have already spent on
record gasoline prices.
Low-income families on average spend
roughly 15 percent of their income on home energy bills. For nearly 30 years, the LIHEAP program, the
Low Income Home Energy Assistance Program, has helped
low-income families pay their home energy bills. This program
has been a vital safety net for millions of Americans. However, under the Bush administration, this
program has been woefully underfunded. In his budget request
this year, President Bush proposed cutting total LIHEAP
funding by 22 percent, reducing it from $2.57 billion to
$2 billion. Indeed, in recent years, LIHEAP has generally been
funded at less than half of its authorized level of $5.1 billion.
As a result, last year LIHEAP was only able to provide assistance
to about 15 percent of eligible families nationwide. At a time of record oil prices, the President
can't continue to freeze funding for this important
heating assistance program. Earlier this week, nearly
100 Members signed a letter requesting that LIHEAP receive
full funding in any continuing resolution that passes the
Congress.
And yesterday, under the leadership of Speaker
Pelosi, the House passed a continuing resolution that would
massively increase LIHEAP funding, providing a total of $5.1
billion for the program. That is full funding at the authorized
level. This additional funding could not come at
a more important time to ensure that families will not be left
out in the cold this winter. Indeed, the increase in LIHEAP
funding over last year's level that is included in the CR would
be greater than the total funding level for the program in
25 out of the 27 years that the program has existed. The House-passed continuing resolution would
also expand the number of people eligible for LIHEAP assistance,
in order to help additional families already struggling
under the increased costs of everything from gas to
groceries. Governor Patrick, who is our first witness,
has given outstanding leadership to this program.
[Prepared statement of Chairman Markey follows:] Many members of this committee are also on
the Financial Services Committee and other committees with
jurisdiction over this financial bailout that we are going to
be deliberating upon later on today and tomorrow. And so that
is just an unfortunate set of circumstances that have
developed–that, as the afternoon goes by, I think we will be
visited by those members as well. Cleaver follow:] But I don't think it should interfere with
hearing from Governor Patrick at this time, so that he
can be recognized to make his statement to the committee. We welcome you, sir. We thank you for your
great leadership on this issue. Whenever you are ready, please
begin. [Governor Patrick] Mr. Chairman, thank you.
And thanks to you and the members of the committee for the
opportunity to appear today and testify. I know, as you mentioned, that the turmoil
in the financial markets is dominating your own and the general
public's attention today, as well it should. It is
certainly on my mind and, I am sure, on the mind of every other
Governor in the country. Especially under those circumstances,
I thank you for turning some of your attention today to the
subject of this hearing, a crisis in the making that has the
potential to become a public health threat in Massachusetts,
in New England, and in many other parts of the country.
I
am talking about the crisis of home heating costs that cold-weather
States expect this winter. Without help, many of our most
vulnerable citizens will find themselves facing heating bills
they cannot pay. And the challenge is right around the corner.
Nighttime temperatures are already dropping into the
40s and 30s this week in New England. Unless we prepare, including
by fully funding the LIHEAP fuel assistance program,
my State and others will face what some call a slow-motion Katrina. Let me try to dimensionalize the challenge
for you. Home heating oil is used by nearly 40 percent or
963,000 Massachusetts households. According to our
Department of Energy Resources' regular statewide survey of prices,
the average price of home heating oil in Massachusetts
hit a record high of $4.71 a gallon after steadily rising week
after week for over a year. Now, even after the recent moderating of those
prices, prices of heating fuels have settled in at
roughly $4 a gallon, which is 50 percent higher than just last
year, when the average price was $2.70 a gallon.
Should the
price remain at $4 a gallon through the coming heating season,
it will take more than $3,200 to heat an average Massachusetts
household with oil this winter, up from $1,800 just two winters
ago. Many consider that estimated average to be conservative.
If a family uses the more commonplace 1,100 gallons next winter,
which is not unusual as I say, it will cost them over $4,000
to heat their home. Again, that compares to $1,800 just
two winters ago. The Massachusetts LIHEAP program is expected
to serve almost 144,000 households this winter. With
rising energy costs and level funding, our benefits would barely
cover half the roughly $1,130 it costs to fill a tank of
heating oil. At that rate, the benefit would run out by the end
of this calendar year.
So I want to thank the House for substantially
increasing the Federal Funding for the LIHEAP program
through the continuing resolution passed last night, and
for doing so on a broad bipartisan basis. The prospect of significantly higher home
heating cost this coming winter was sufficiently alarming to
me and to my colleagues in the legislature that we formed
a Winter Energy Costs Task Force. In five public hearings
across the State, the task force heard compelling testimony about
the impact that high heating costs would have our most vulnerable
citizens, including low-income families with children,
people with disabilities, and seniors as well. I just want to give you a couple of the stories
that we learned with. One about a senior citizen from
Gloucester, not unusual, who was living on $790 a month to
pay for his housing and medical expenses, and who, beyond that,
could not afford the oil needed to heat his home. Without an
increase in funding for fuel assistance, he would be eligible
for only so much as to buy two-thirds of one tank, which might
not even get him to January. He is considering a reverse mortgage
in order to get by this winter.
Another example, a director of a community
action program in Lynn told the story of a woman with three
school-aged kids who just lost her job. She is collecting $157
each week in unemployment. She doesn't even have enough
to cover her rent of $800 a month. Without additional LIHEAP funding,
fuel assistance won't be enough to fill her oil
tank even once. This CAP director who told us that story said
that, in 29 years of his own service, he has never seen
so many folks asking for fuel assistance for the first time. Now, I do want you to know that Massachusetts
is doing everything we can to avoid disaster this winter.
Our Department of Public Utilities has recently ordered an
increase in the discount given to low-income customers on
their electric and natural gas bills, which will save them between
$75 and $300 over the coming winter.
We have also expanded
programs to help low-income customers pay past-due bills. We have appropriated $10 million in State
funds in unusually tight fiscal times to supplement
Federal fuel assistance funding this winter as well. And
we are working to expand energy-efficiency services provided
by utilities this fall to help their customers tighten and insulate
their homes as well as upgrade their heating systems with
the help of rebates and low-interest loans. These latter measures, by the way, are consistent
with the accelerated implementation of what we call
the Green Communities Act, a comprehensive energy reform
legislation, which I know you know about, Mr. Chairman,
that I signed into law earlier this year. In addition, we are going to use the proceeds
of the very first auction of greenhouse gas emission allowances
under the Regional Greenhouse Gas Initiative, which
took place this morning, to support energy-efficiency efforts.
The specific targets of those investments will depend on
the recommendations of that Winter Energy Costs Task Force I mentioned
a moment ago. We will have their report shortly on
measures we can take to help our fellow citizens stay warm and
safe this winter.
But the fact is that we still need you. I
very much understand and respect the demand for resources
that compete for your attention; I really do. Nevertheless,
what is at stake is the real possibility that many citizens
in the colder regions of this country will be at risk of
freezing to death without Federal help. So I thank you again for the House action
yesterday. And I urgently ask the full Congress to fully fund
the Low Income Home Energy Assistance Program at the $5.1
billion level now under consideration as part of the continuing
resolution. This funding would almost double this winter's
expected LIHEAP benefit in Massachusetts, providing enormous
help to families across the Commonwealth and, indeed, to families
in all of the affected regions. I lastly just want to acknowledge that, though
essential, this funding is a stopgap measure. High energy
costs in the Northeast are a foreseeable and continuing
reality.
A dedicated Federal plan that includes support for State
LIHEAP programs and also for efficiency strategies and renewable
energy generation and delivery is the big task remaining.
And we look forward to working with you on that, as well. Thank you very much. [The Chairman] Thank you, Governor, very much. Let me now turn and recognize the gentleman
from Arizona, Mr. Shadegg. [Mr. Shadegg] Governor, I want to thank you
for your appearance here.
This is an important topic,
and I share many of the concerns you expressed. As I listened to you–I am not going to ask
questions–but as I listened to you, I couldn't help but
think of T. Boone Pickens and his argument to us that natural
gas is more plentiful in this country and that it is a
cleaner fuel. I guess that leads me to wondering–and I
listened to you describe the program you have to encourage
people to put in more efficient fuel heating systems in their
homes.
Obviously, gaining as much savings as we can in energy
in this country through efficiency gains, through better insulation,
and through the cleaner fuels, for example, natural
gas, are all a part of this problem. LIHEAP has played a
key role. I am going to suggest or request that a letter
from one of your colleagues, my Governor, Janet Napolitano,
be inserted in the record. It is a letter she wrote in September
to former Governor Mike Leavitt about the inequity. I do not know that heat kills as many Americans
as cold or is as vast a problem, but it is a real problem.
We do have people in Arizona who die as a result of not
having heat in their homes, and that is as big a tragedy
as somebody dying in your home State of the lack of heat. Arizona
is, in some ways, blessed by having both problems. We have parts
of Arizona which are, quite frankly, as cold as Massachusetts.
So this program is important. I guess I would hope for the day when we need
this program less because we have taken on American energy
and brought down the price of energy by forging on into the
future, as my colleague from Massachusetts has pushed us
to do for so long.
So I would request unanimous consent to put
that letter in the record. [The Chairman] Without objection, so ordered. [Mr. Shadegg] I commend you for your work
and initiative in this area, and I appreciate your testimony. With that, I will yield back. [The Chairman] Thank you. Any comment, Governor? [Governor Patrick] Well, I would just say,
Congressman, first of all, on the point about natural gas,
I couldn't agree with you more. In terms of its impact on the
environment, it is a lot cleaner than the burning of oil or coal
for that matter. It is a challenge for us, because we are at
the end of the pipeline. And so we have been working on strategies,
some with Canada and some with other suppliers, on how
safely to deliver liquefied natural gas into the pipeline that
affects us in New England. We don't have a solution for that,
but we have been working on it.
And I take your point also about the concerns
that are different but no less significant in their
impact on human beings of extreme heat just as extreme cold
and not being able to necessarily deal with that or respond to
it. I understand that the LIHEAP program will
be up for reauthorization soon, and I suspect that,
tough as those issues are, they will get worked out there. And we
look forward to being part of that conversation. [Mr. Shadegg] Well, as hot as it is in Arizona
and in parts of the area, it presents a very real challenge.
And, fortunately, I think we are going to look
at this program and find a little bit greater equity in it. But
I appreciate your efforts. Thank you. [Governor Patrick] Thank you. [The Chairman] The gentleman's time has expired.
Governor, do you work with other Governors
in the region in putting together a strategy to deal with this
issue? [Governor Patrick] Well, we have worked with
Governors in the region on two fronts. First of all, we
had all of the Governors in New England together to discuss
common ways or just, really, to trade best practices around
efficiencies and to help prepare for the coming winter. We
did that in July. And it was following that that we wrote to
the President and to the congressional leadership, asking
for the full funding of LIHEAP and the Weatherization Program,
precisely the action that you took in the continuing resolution.
So, again, thank you for that.
The outcome of the Winter Energy Costs Task
Force that I mentioned earlier, the recommendations that
will come from that from Massachusetts we will share with our
colleagues around the region. And we have been taking some of their
counsel, as well. And, finally, I would mention that, just 2
weeks ago, maybe last week–I am losing track of time–the
New England Governors met with the eastern Canadian Premiers, which
we do periodically, but particularly to talk about
how we can begin to economically get renewable energy generated
in Canada down into our region.
[The Chairman] That would really be a huge
breakthrough if we could accomplish that goal. And you put together a joint task force this
past summer in anticipation of the higher energy prices. [Governor Patrick] That is right. [The Chairman] Could you talk a little bit
about that and the lessons that other States might learn
from that? [Governor Patrick] Well, we will have those
recommendations in the next week or so, Mr. Chairman. They
are due at the end of this month to myself, the Speaker and the
Senate President. They took testimony from around the Commonwealth
so that we were getting practical and not theoretical
insights. LIHEAP was a part of that discussion, but
not the sole part by any means.
A lot of interest in how we
support efficiency initiatives, including weatherization, including
changing out or updating inefficient heating systems, that
sort of thing, and what resources there are for that. Some of this is paid for already by an added
charge on utility bills. And I have used my own, sort
of, bully pulpit to encourage residents to get those energy audits
now before the weather gets too cold, so that they can begin
to prepare. [The Chairman] Thank you, Governor. The Chair recognizes the ranking member of
the committee, the gentleman from Wisconsin, Mr. Sensenbrenner. [Mr.
Sensenbrenner] Thank you very much, Mr.
Chairman. First of all, I am sorry I am late, but I
was getting my picture took with the Judiciary Committee,
since I have my bright red tie on. That ended up being more
important. Sorry, Governor. [Governor Patrick] No worries. [Mr. Sensenbrenner] Secondly, I have an opening
statement that I would ask unanimous consent to be included
in the record. [The Chairman] Without objection, it will
be included. [Mr. Sensenbrenner] Thirdly, let me say that,
while I think the LIHEAP program is important, you know,
I expressed my concern about how the formula operates. You
know, the chairman and I both represent cold-weather States.
Having assistance to low-income people is much more important in
cold-weather States than it is in places that your constituents,
Governor, and mine flee to, like Arizona, which get hot upon
occasion but doesn't get cold very much.
And, you know, the LIHEAP program, in my opinion,
was designed to help people stay warm when it
was cold, not to help people cool down when it was warm. And I guess
I can say that I am not surprised but I am a little disappointed
in seeing the letter that is up here from the Governor of
Arizona saying that she isn't getting her fair share, when nobody
is going to freeze in Arizona or in most places in Arizona. So having put that marker in and raising the
blood pressure of the gentleman to my left, I will yield
back the balance of my time. [Mr. Shadegg] Will the gentleman yield? [Mr. Sensenbrenner] Of course I will.
[Mr. Shadegg] You missed my remarks. Heat
kills people. It actually, all kidding aside, heat does kill
people. And I am not saying that it is as expansive a problem
as it is for cold States, nor fortunately does it last as long,
but it does kill people. And I also pointed out in your absence that
there are parts of Arizona where cold kills people, where,
for example, our Native Americans on the Navajo reservation
confront the same cold problems that you do. [Mr. Sensenbrenner] Reclaiming my time, let
me say to my colleague from Arizona that I thought I had
him on our side on the whole debate on global warming. And I
am afraid you are falling off the wagon. And now I will yield back. [The Chairman] We haven't seen that, by the
way, in 2 years. This is a high point in our final hearing. The Chair recognizes the gentlelady from California,
Ms.
Solis. [Ms. Solis] Thank you, Mr. Chairman. And I welcome our guest for being here. [Governor Patrick] Thank you. [Ms. Solis] I would also like to submit my
statement for the record, if I could do that, Mr. Chairman. Anyway, I just want to welcome you, Governor,
here. I am excited about some of the things you are doing
in your State and want to know how—- [The Chairman] Without objection, so ordered. [Ms. Solis] Thank you. [Ms. Solis] And I would like to know how the
Federal Government might help expand some of your
State efforts for weatherization in the LIHEAP program. We are
very concerned in the State of California, in my district, creating
opportunities, job opportunities also in weatherization and
also other technologies in the form of green-collar technologies.
So, any thoughts on that? [Governor Patrick] A couple. We have been working in this area of efficiency
and alternatives for some while now. We have some
new legislation, a package of legislation that includes something
called the Green Communities Act, an oceans bill, green
jobs initiative, biofuels initiative, which are all a part
of a comprehensive approach where we are trying both to get ahead
of the issue on efficiencies and renewables and also create
new manufacturing jobs, in particular. And we are making some
progress. I do think that the Weatherization Program,
whose funding was also substantially increased in the continuing
resolution, I alluded to it briefly before you came in,
but this is enormously important. And this is one of those
examples of teaching someone to fish rather than just
giving them a fish, so that we can leverage those investments
at the Federal level with State money, as we are trying to do,
and some of the subsidies that are already built into utility
bills, to enable and to show people what strategies are available
to them, practically help them to move into more efficient
insulation, updating heating and cooling systems, that
sort of thing.
[Ms. Solis] We had an initiative here in the
Congress, the President actually signed a bill, the energy
bill, that included about–proposed $125 million to create
green-collar jobs. Our thoughts were to try to see how
we can get that back through the Department of Labor and Energy
and through the Workforce Investment Act that could go to
States like yours. Would that be helpful, and how do you see
that? [Governor Patrick] Absolutely. Absolutely.
We have two areas, really three, but two I will mention,
where our economy is showing particularly sharp growth. One
is the life sciences, and the other is so-called green tech. And the biggest concern, among many, but the
biggest concern about the long-term future is the
availability of a well-trained workforce. So we have tried to
target more of our limited State dollars in that direction, and
we welcome any Federal assistance we can get. [Ms. Solis] Great. Okay, thank you.
I yield back. [The Chairman] The gentlelady's time has expired. The Chair recognizes the gentlelady from South
Dakota, Ms. Herseth Sandlin. Ms. Herseth Sandlin. Thank you, Mr. Chairman.
I don't have any questions for Governor Patrick. I thank you for being here and for your testimony
and for the leadership you are undertaking in the
State initiatives that are so important in serving our constituents,
but also recognizing the importance of the Federal
resources to help leverage those funds and serve more people. So thank you, again, for your time. [Governor Patrick] Thank you. Ms. Herseth Sandlin. Thank you, Mr. Chairman.
[The Chairman] The Chair recognizes the gentleman
from Washington State, Mr. Inslee. [Mr. Inslee] Thank you. Governor, thanks for your leadership on this
issue. I wanted to ask you about the relationship
between efficiency measures, weatherization, and cash
reimbursement. I suspect that almost probably 90 percent at
least of houses, you know, a $1,000 expenditure to weatherize the
home is going to save the resident, over 10 years, more than
a $1,000 reimbursement for their heating costs. [Governor Patrick] That is right. [Mr. Inslee] In almost every home, including
mine, there are still a lot of efficiency improvements to
make that are cost- effective.
With that in mind, if you agree with that,
what is the best distribution between upfront capital to help
reduce those inefficiencies and cash reimbursement? Ideally,
how would we allocate that fund? [Governor Patrick] Well, if I can respond
to your question, Congressman, and also come back to the ranking
member's comments without wading into the debate between
you and your colleague there, there is a–we appreciate
very much the substantial increase in both LIHEAP and weatherization
funding in the continuing resolution. But it is a
stopgap. And there is a broader strategy, which we would look forward
to working with all of you on, around how we move toward a
more comprehensive efficiency alternative framework for the country. Until we do some of that homework, I couldn't
tell you what the tradeoffs exactly would be. But I can
tell you that, right now, in Massachusetts, where we have a generally
older housing stock, efficiency tends to pay back at the
rate of about 20 percent a year.
That is a pretty–so you don't
even have to look out 10 years; you can look out just 4
or 5 on that $1,000 and have it paid for. Now, we also have some compounding challenges,
which kind of comes back to the ranking member's point,
differences in cold-weather States than in warm-weather States,
I think, and also differences in the cost of heating oil,
in particular, and other heating sources in the Northeast because
we are at the end of the pipeline. So the rate of payback
is going to be different because the price of the commodities
is different. But you can imagine, and you have, that the
return in the long run in moving toward efficiency is greater
than having to come back every year and spend–it is not
that we may get away from that entirely, at least in the short
run, but having to come back every year and reappropriate for
more straight cash assistance.
I hope one day we will be able
to wean ourselves of that. [Mr. Inslee] Well, some of us think it is
better to try to do the weatherization and insulation and maybe
reduce the rate of global warming, rather than just wait for
your climate to change so that you become a problem of heating
rather than cooling. [Governor Patrick] That is not what I am advocating. [Mr. Inslee] Okay, I just wanted to make sure
that is the situation. Thank you, Governor. [Governor Patrick] Thank you. [The Chairman] The gentleman's time has expired. Actually, Governor, in last year's budget,
there was $228 million for weatherization. In the continuing
resolution yesterday, it was increased to $478 million. [Governor Patrick] And we very much appreciate
it. [The Chairman] More than a doubling. And hopefully
more innovative programs will flow out of Massachusetts
and Wisconsin and other States that can help to
chart a new course, and Arizona and southern California and—- [Laughter.] [Mr. Shadegg] Mr. Chairman, we need to insulate
in Arizona as well. [The Chairman] I hadn't finished my question.
It was a run- on sentence with no period that had yet arrived.
Some of my happiest memories are at Fort Huachuca,
Arizona, in the summer of 1969. It didn't go under
110 any day, and I am willing to stipulate the conditions that existed
there. So we thank you, Governor, very much for being
here. Any closing statement you would like to make? [Governor Patrick] Just again, you know, I
think probably you don't hear from us with thanks as often
as you are entitled to or you should. And we thank you very much
for the support through the continuing resolution. And we
urge the Senate to act similarly and the President to sign the
bill. [The Chairman] On that subject, we are in
total permanent concurrence, hoping the Senate will do the
right thing. You know, that is something that is the overarching
reality of our lives. Wonderful to see you again, Governor. Thank
you for your great testimony. [Governor Patrick] Thank you.
[The Chairman] Appreciate it. Our second panel, we would invite them up
to the witness panel. On our second panel, we have Mark Wolfe, who
is the executive director of the National Energy Assistance Directors'
Association, representing the State directors of the Low Income
Home Energy Assistance Program. We welcome you, sir. Whenever you are ready,
please begin. [Mr. Wolfe] Thank you. First, on behalf of the members of NEADA,
I would like to first take the opportunity to thank the members
of the select committee for holding today's hearing on the
importance of higher funding for LIHEAP to help low-income
families pay their home energy bills this winter. LIHEAP is the only Federal program that helps
families pay their home energy bills. There is no comparable
program for gasoline, for example. The discretionary grant program in fiscal
year 2008 only had sufficient funding to meet the energy
needs of about 16 percent of the Nation's poorest households.
Rising energy prices are placing millions of low-income
families at risk of losing access to home energy. We are witnessing record arrearages across
the country, as families struggle to pay high energy bills
and utilities, as well as families struggling to pay delivery
fuel bills for heating oil and propane.
This is followed
by high rates of shutoffs, as families lose their ability and
access to utility service. The good news, actually, the excellent news,
of course, is the House already nearly doubled funding for
LIHEAP to $5.1 billion and added $250 million for weatherization.
Hopefully, this will lead to a policy discussion in the
next Congress as to the appropriate level of funding for LIHEAP
and its place in the social service system in the future, as
we continue to cope with high and volatile pricing for all forms
of home energy. And I think, just to give a sense of what
this $5.1 billion means: In Arizona, it would take us from $9
million last year to $29 million; California, $103 million last
year to $225 million; Massachusetts would go from $126
million to $163 million; Wisconsin, from $91 million to $130
million; South Dakota, $17 million to $30 million; and Washington
State, $45 million to $75 million.
What this really means at the end of the day,
at $2.5 billion, which was the amount of money we
had last year, it was really only enough money to provide a minimally
adequate program in the cold-weather States and, at
best, an emergency program in the rest of the country. That is
what $2.5 billion bought us. But $5.1 billion really transforms
the program, creating a truly national basis for providing
home energy assistance across the country for both heating
and cooling. One of the issues that came up a lot in the
last couple of months was why were we asking for $5.1 billion.
First, winter home heating costs have been increasing rapidly
since the end of the last economic recession in 2002. One of the tables we prepared, since the last
recession ended in 2002, home energy prices have gone
up dramatically. Heating oil went from $912, the cost to heat
a home during the winter of 2002-2003, to an estimated $2,500
during the coming winter heating season, or an increase of about
176 percent. In the coming winter season, prices are expected
to go up about 30 percent.
Natural gas increased by 69 percent,
propane by 105 percent, electricity by 34 percent, during
this period since 2002. What is really worrisome to us about this
is that energy went from a period of being basically affordable,
back in 2002 to 2003, to an awful lot of Americans. There
were many low- income families that could afford to pay the
average of $681. But with an average cost starting to press
$1,200, we are finding more and more families that just can't
pay these bills. More families are falling behind on the utility
and the natural gas and electric bills, and more and more
arrearages and shutoffs. The other issue, of course, is purchasing
power of LIHEAP. Without the $5.1 billion, we would have seen
a dramatic decrease in the purchasing power this winter.
In 2006, when LIHEAP funding peaked at $3.2 billion, we
were able to cover close to half the cost, on average, of home
heating. It wasn't terrific; it didn't meet all the needs. But
it allowed us to negotiate with utilities, allowed us to deal
with arrearages, and allowed us to cover significant costs
of the cost of delivered fuels.
With the continuing rise in energy costs,
last year we were only able to cover about 36 percent of the
cost of home heating. It was definitely not enough. And
the kinds of things that happened last year that we hope won't
happen this year is we will see fewer people basically suffering.
We saw people basically being shut off from power. We have
had reports in some utility districts of up to 10 percent
of the households being shut off.
In some cases, it amounts
to a small city within a State losing access to electricity
and natural gas. If you look at the next table, one of the
things that concerns us–yes, heating oil costs are coming
down, and that is terrific. In the middle of July, we were
looking at upwards of $5 a gallon for home heating oil. Now we
are in a range of $4. So, in a sense, that sounds terrific.
But that is still a dollar more a gallon than what it was last
year at this time. And what that really means, to fill up a 275-gallon
tank, typical tank of heating oil in the Northeast,
it is close to $1,000 now. For many people, especially elderly,
that is more than their entire monthly income. The average
single person who gets Social Security gets $1,027 a month.
That is about the cost of one tank of oil. Another indicator of the rising need for energy
assistance is the increase in arrearages and shutoffs.
The National Regulatory Research Institute, for example,
in a recent report, found that past-due gas utility accounts rose
from 16.5 percent in 2001 to 21 percent in 2006. Last spring,
in a survey we conducted, States reported that 1.2 million
households were cut off from natural gas and electric service
due to nonpayment of electric bills.
What I would like to do briefly is give for
you a couple of numbers that we have collected in the last
2 months that I think give a sense of just how serious this
affordability problem is and how we think the $5.1 billion
will really make a big difference in addressing the need. For example, across the country–and, again,
we don't have national statistics on shutoffs, arrearages,
how many people are behind in their home heating bills. But
the numbers we are getting are very, very scary. In Arizona,
the Public Service Commission reported that disconnections are
up 40 percent over last year. Southern California Edison, for
example, has shut off nearly 165,000 of its 4.8 million customers
in the past 6 months. Xcel Energy in Colorado expects to
shut of 72,000 Colorado customers this year because of delinquent
bills, a 33 percent increase from 2007. In Massachusetts,
for example, at the end of May, Natural Grid reported that
115,000 out of 1.2 million electric customers were at least 3
months behind on their bills. And the numbers continue. What I would like to do is just briefly review
a survey that we conducted in June.
We wanted to find
out how families were coping across all income ranges. And
we asked how they were coping with high gasoline and home energy
bills. Because I believe that some of the reason for the increase
in arrears and shutoffs is not just that home energy bills
are going high, it is that families don't have enough money to
pay for gasoline. The average family uses about 800 gallons
of gasoline a year. So if gasoline is running about a dollar a
gallon higher, that is about $70 more a month than they were paying
last year at this time. We surveyed 500 families across the country
in all income groups, and what we found was–we weren't
surprised to see that poor families, those with incomes of under
150 percent of poverty, were responding that they were having
trouble of paying their energy bills. What we were worried
about and surprised was that somewhere between 151 and
250 percent of poverty, basically working families, were
finding that they were also reporting difficulties in paying
these bills.
We asked the question about whether energy
costs had a large impact in a household, and, again, families
under 150 percent of poverty, those making about $35,000
a year, said yes. About 38 percent reported difficulties
paying it, but also about 19 percent of the next group up also
said the same thing. Basically, families between about $35,000
and $50,000 a year were saying they were also struggling with
these bills. But, of course, the thing that was most worrisome
was the next one, where we said, well, okay, because
of high energy and gas costs, did it change your purchasing plans?
And we always knew that poor families had this problem.
In all the previous surveys, very poor families always said they
had to choose between heating and eating. But what we found
this time, which is what really alarmed us, was families between
150 and 250 percent of poverty mainly were saying the
same things. And these are families that normally we don't
cover in energy assistance programs because we don't
have enough money.
And one of the advantages of going to $5.1
billion is the law, in the House bill at least, allows us to go
to 75 percent of State median income. So for families in this
next group, between 150 and 250, who are saying they are
having trouble buying food, medicine, basic necessities,
they can also be helped in this program this year. The next chart, of course, is a sign of poverty,
but, again, it is the next group up, also, that
is reporting it. We asked them questions, did you close off parts
of your home? Did you keep your home at an unsafe temperature?
Did you leave the home part of the day because it was too cold
or too hot? And, again, we are seeing families that earn between
150 and 250 percent saying the same thing some of the
very poorest families in the country are saying. And, of course, the next chart is the one
that causes most concern. We asked about skipping bill payments
and also shutoffs. And 29 percent of very poor families
said they skipped paying their electric bill or utility
bill, but 8 percent said they were shut off. But also
families between 150 and 250 percent of poverty reported some of
the same exact numbers.
So what seems to be going on, I think, is
a compression across incomes, that it is no longer just
the families earning less than $35,000 a year, I think it is becoming
families earning less than $45,000 to $50,000 a year
who are basically struggling to make ends meet. What I would like to do is talk just briefly,
at this point–you were asking some questions about
weatherization. And, essentially, we don't think it is an
either/or.
We don't think it is either weatherization or home
energy assistance. Under the LIHEAP program, States are allowed
to transfer up to 15 percent of their LIHEAP appropriation to
weatherization. And, on average, about 10 percent of that
is transferred. So if the future is as in the past, then about $500
million of the $5.1 billion will also transfer into weatherization
programs. These are extremely successful programs, but
they are not well-funded. Last year, only about 150,000
homes across the country received weatherization assistance.
Weatherization returns about $2.72 cents in energy and nonenergy
benefits of the life of a weatherized home. It is a terrific
investment. It also supports about 20,000 jobs that come
through the program. These are the green jobs that we are concerned
about. And when thinking about green jobs or green-collar
jobs, the potential in the low-income community
is significant for weatherization. You know, about 25 percent
of the families in the United States are low-income, and about
40 percent come under the 250 percent of poverty category.
Many of these families can benefit from weatherization,
and a lot of the jobs are not that highly skilled.
So it is a great,
sort of, entry point into a career for a lot of people right
out of high school. Another point I would like to mention to,
sort of, wrap up my testimony, we have been looking a lot at
other strategies to weatherize homes. We have been working with
the Ford Foundation to develop an energy-efficiency mortgage program
that would help families integrate weatherization and
energy efficiency as part of their mortgage.
And this is a real
opportunity, as we look at all these subprime mortgages that
are in trouble now that need to be refinanced, to also make their
homes more energy efficient at the same time. For families that make less than $50,000 to
$60,000 a year, reducing their energy bill by 30 percent makes
a very significant difference to their discretionary
income. It not just reduces their energy bill, it strengthens
their ability to maintain their home. I think there is a great
opportunity this coming year, as we look at how do we help
low-income families move to a more stable mortgage, look at making
the home energy efficient at the same time. It will accomplish
two very related goals. Thank you. [The Chairman] Thank you, Mr. Wolfe, very
much. Our next witness is Mr. John Drew, who is
the executive vice president of Action for Boston Community
Development, the largest nonprofit agency in New England. He
has been a very prominent figure in this whole area of LIHEAP
throughout his career, a real national expert on the subject.
Whenever you are ready, Mr. Drew, please begin. [Mr. Drew] Thank you, Mr. Chairman. Thank
you for letting me come before you today. First of all, I want to thank you because
you are my congressman, and I want to thank you for everything
you have done over the years. Action for Boston Community Development is
a community action agency, one of 900 across the country.
What we do is we are undergirded by a community service block
grant, which we are so much grateful to this Congress for
continuing that program, because it allows us to do a variety
of programs, including Head Start, weatherization, our
heating assistance program.
We also do programs for–we run a
college, we run high schools. We will do anything that we need
to do to help people who are poor. Mr. Chairman, I just want to make a note that
you are my Congressman, and I very much appreciate the
hard work you have done over many, many years. [The Chairman] I thank you. [Mr. Drew] Really. You have been a true champion. [The Chairman] Thank you. [Mr. Drew] And I also want to note that I
am so grateful for the Governor of Massachusetts coming here
today. I won't cast anything other than to say this is the first
Governor in my time who has come before you on LIHEAP, and
he has done a heck of a job in Massachusetts.
I mentioned the community service block grant
and I mentioned community action because they go
together. I go back 36 years. I know I don't look it. I go back
36 years, back to the OPEC time, when we had that spike with
that OPEC where the lines were long. And we have had over 36 years
of trying to keep this program going through the ups and
downs, through the period of time when we had enough money, we
didn't have enough money. We put together weatherization programs.
We put together programs that provided for new boilers. We
have matured to the point where we are actually doing windows
and refrigerators and appliances, working with utilities. But I
must say from the bottom line is that we are dealing with people
who do not have enough income to live on. I left my office today to take an airplane.
Lined up in the corridors in our buildings were people who
got there early this morning, had been getting there for quite
a while, clutching in their hands shutoff notices, payments they
can't make, looking very, very scared, bleak, and wondering how
they are going to get through the winter.
My experience over the years is that, if we
do not intervene, we will see experiences of hypothermia.
We have seen that. We have a woman, 94 years old, who went
to bed one night, decided that she couldn't afford the heat,
couldn't pay the bills, put as many blankets on as she could,
and unfortunately in the morning she didn't get up. We have
children who leave their house to go to school and they are not
able to think because they have been cold all night. We have a large Head Start program in the
city of Boston.
And thank you again, Congress, for keeping
that and reauthorizing the Head Start program. But
we have 2,600 children in Boston in preschool, and for many,
many of those children, the only heat or the major part
of the heat, warmth they have that day is when they come to the
center. Their major caloric intake will be at that center. So I was, with great fear and trepidation,
going into this summer, with $5 a gallon. All I could think
of was the Arctic air is coming. It is going to be icy, it is
going to be cold, we are going to have ground freezing, we are
going to have snow.
And what is going to happen to all these
folks? This is my Katrina. This is my Northeast. These people are going to be standing out
there with no ability to save themselves. They don't have
incomes to be able to buy the product that is necessary. They
are also trying to struggle to buy milk that are increased and
to buy products that have increased. Their incomes have not
gone up at all; they really have been compressed.
So I am here basically to bear testimony on
the part of so many people who need this program, whose families–and,
as Mark Wolfe has said, more and more people are falling
into the trap of stagnated wages and not being able to take
care of their families. And it is an income issue. And over the years I have struggled when people
have come up with a debate, which is we should do more
weatherization and less of the fuel assistance. And I say fine,
fine, let's get the cost of energy down to the point where
people can afford it. You cannot take out payments before you
can get the energy efficiency and we can bring down the oil price
from overseas. So I think that we not only need both, we
have to keep up with the income.
We, in fact, in our program,
we pay the dealers directly. We work with the dealers.
We work with the companies. We have great relationships and,
as a result, have been able to run a LIHEAP program. Every LIHEAP
household who is eligible also is eligible for conservation,
for boiler repair, boiler replacement. They get discounts
from utilities up to 20 percent off their bills. So we are
leveraging an awful lot through this LIHEAP program. The downside is that we are getting more and
more people in our homeless shelters.
And in Massachusetts,
in fact, there are 500 or 600 families in hotels as a result
of not being able to maintain a household. My concern, going into
this winter, is we are going to see an epidemic of homelessness. So I was coming down here with bags of cement
on my back, saying, how are we going to do this? We are
going to run out of assistance before Christmas. We are going
to be trying to figure out how we can keep these families
and elders alive. And when I got the call that said $5.1 billion
has been passed by this House, I just said, “Oh, my God, this
is great.'' And the Senate has to pass it, the President has to
sign it.
And, with that, we will be able in Massachusetts
to be able to provide heating assistance right through
the end of February. Think about that. We have so many
people who are sitting there right now, saying, how am I
going to make it? Everybody has their following story, but it
is true. In my building today was Mr. Warren. He comes in,
he is 78, and he is looking for assistance. And he is working
at an elderly program, our foster grandparent program. I said, “How are you doing today?'' And he
said, “Well, my wife and I, it is a little tough, but,
you know, we are getting by.
It is going to be a tough winter.''
I said, yeah. He said, “Where are you going?'' I said,
“I am going down to testify before a committee in Washington about
heating assistance.'' He said, “What is that all
about?'' I said, “Well, you know, trying to get you some more
money so you can get through the winter.'' His wife has these
huge bills for her disabilities, her medicines. He said, “Would you tell those folks something?
I am really concerned.
I don't understand how they
can understand they can find trillions of dollars for bankers
and stuff and they can't help me get through the winter.''
I said, “I will pass the story along,'' which is true. And
I can appreciate that this committee understands that feeling
of helplessness, that nobody is really going to be there for
you. So the $5.1 billion, let's hope that goes
through. Let's hope we have it at the end, let's hope we
have it at the beginning of the season, so we can assure
people that they will have hope through the winter, that they will
be able to buy their food, that they will be able to buy
their medicines, they will be able to live life normally, they will
get through the winter.
Because, right now, what we have, Mr. Chairman,
in Massachusetts is 100,000 households way behind
in their utility bills. We have 20,000 households already shut
off. [The Chairman] Mr. Drew, thank you. Thank
you for your passionate presentation today. We really appreciate
it. Thank you. [Mr. Drew] Thank you. [The Chairman] Now we will move to our final
witness. Then we will go to questions from our committee
members. And our final witness is Mr. Howard Gruenspecht.
He is the acting administrator of the Energy Information
Administration at the Department of Energy. Prior to joining
EIA, he was a resident scholar at Resources for the Future
and served as its director of economics. We welcome you, sir. Whenever you are ready,
please begin. [Mr. Gruenspecht] Mr. Chairman, members of
the committee, I appreciate the opportunity to appear before
you today to discuss the short-term energy outlook for
the United States, particularly for the upcoming winter. The Energy Information Administration is the
independent statistical and analytical agency within the
Department of Energy that produces objective, timely and
relevant projections and analyses to assist policymakers, help
markets function efficiently and inform the public. And I notice
that Mark Wolfe mentioned many of our products.
We don't promote,
formulate or take positions on policy issues. And our views
should not be construed as representing those of the Department
or the administration. Our most recent short-term energy outlook,
released on September 9th before Hurricane Ike hit the
Gulf Coast, forecasts that residential upcoming heating
oil prices during the upcoming heating season of October through
March will average 4.13 per gallon, an increase of about
25 percent over the previous season. Residential and natural
gas prices over the same period are projected to average nearly
$15 per thousand cubic feet, an increase of about
17 percent over the previous heating season. Price increases for
propane and electricity are projected to be about 11 percent
and 8 percent respectively. Natural gas is used as the primary heating
fuel by a majority of U.S.
Households, while oil is
the primary heating fuel for about 7 percent of U.S. households.
But, as the other two witnesses have noted, heating oil use
is heavily concentrated in the Northeast, where it is
used by nearly one- third of households. Fuel expenditures for individual households
are highly dependent on weather conditions, the size
and efficiency of individual homes and their heating equipment,
and thermostat settings. So while cross-fuel comparisons
of average heating expenditures can be misleading because of
differences in the extent to which each fuel is used in colder
and milder areas of the country, the change in projected expenditures
relative to the prior winter for each heating fuel provides
a broad gauge as to expected movements in heating costs. Although all of the major heating fuels are
expected to register sizable increases in total expenditures,
heating oil customers are likely to be particularly hard
hit, with heating fuel expenditures for the average household
using oil as the primary heating fuel expected to rise by $585
over last winter.
The corresponding increases for households
heated with natural gas and propane are $162 and $217 respectively,
while they are $86 for households using electricity. Heating oil prices are expected to be significantly
higher than last winter, primarily because crude
oil prices are much higher. Higher crude oil prices account for
about 68 cents per gallon of the projected increase of 85 cents
per gallon over the upcoming heating season relative to the
comparable year ago period. Increases in heating oil prices above those
due to higher crude oil costs largely reflect tighter markets
for diesel fuel worldwide. Diesel fuel and heating oil are
connected, as both products are very similar, except for the
fact that diesel fuel contains less sulphur than heating oil.
World diesel fuel demand growth is coming
both from increasing transportation use and increasing
use of distillate as a fuel for electricity generation, particularly
in developing countries. And there are also a
number of special circumstances this year. Turning to natural gas markets, the factors
contributing to higher prices include higher oil prices, low
imports of liquefied natural gas, and some strength in
the spot prices of natural gas in the first half of the year
that will be reflected in the cost of gas that has been
stored to be used this upcoming winter. Colder than normal temperatures during the
first 4 months of the year contributed to a substantial year-over-year
decline in inventories of gas. The good news is that, taken together, robust
domestic production of natural gas and limited consumption
growth in electric power this summer due to relatively
mild summer temperatures allowed for rebuilding of natural
gas storage inventories.
And, by the end of August, we
actually were ahead of the 5-year average for the first time since
February. We will be updating these forecasts for the
October edition of the “Short-Term Energy Outlook,'' which
will also include an expanded discussion of the upcoming heating
season. That concludes my statement, Mr. Chairman,
and I would be happy to answer any questions that you or
the other members may have. [The Chairman] I thank you very much. And now we will turn and have the members
of our committee ask questions. I recognize the gentlelady from California,
Ms. Solis. [Ms. Solis] Thank you, Mr. Chairman. All of you have given us some interesting
insight, including the Governor. But I wanted to just ask our last witness
who spoke if you could shed some light on the recent effect
that we saw in some Midwestern States with respect to Ike, Hurricane
Ike, where we saw some shortages in Tennessee and, you know
we saw a tremendous spike up in demand there.
Obviously,
we may see more of that happen as we see more hurricanes hitting
our areas where our major producers of crude and the
refineries are found. Can you shed any light on that? [Mr. Gruenspecht] I can shed a little bit
of light on it. Clearly, the two hurricanes that hit the gulf,
one Louisiana, the other Texas, which are both
big areas for importing crude oil and big areas for refinery
production, had an impact. Although refinery capacity is really
returning, really–in today's report, for the first time,
the amount of refinery capacity out is under a million barrels
a day of capacity. It had been up above, well above
3 billion barrels a day out at the peak. So there has been progress
in bringing things back. But the areas that are served either from
crude oil that comes through the gulf, because some of the
crude oil that is used in the Midwest comes through the gulf
and is shipped up to the Midwest by pipeline, or by products that
are produced in the gulf–and that has affected most of the
south Atlantic States; Tennessee, North Carolina, Georgia
has had some issues–those are the areas that have seen
the most severe impacts.
We have seen prices in those areas
falling in recent days. Just yesterday, we put out a report on inventories
that, sort of, looks at the last week. The last
week was a tough week, in that production was severely impacted
by Hurricane Ike. We do see the situation improving. There
may be some spot outages, mostly of gasoline. Fortunately the
distillate market has done better. The diesel fuel and heating
market has not seen those outages.
But gasoline is a little
tight. [Ms. Solis] I guess, for me, I really have
some concerns when we have discussions and debate about
increasing more drilling along the southern part of our country
here, and how rapid that infrastructure will go up, and
how many times in each season will we find ourselves in a similar
situation, that natural recourses like hurricanes and others
are still going dampen our ability to be able to get those
products to market into that part of the country.
And shouldn't we be thinking about other alternative
types of fuels? And some of you have mentioned that;
I know the Governor did in his presentation. But it just
hits home again that somehow we continue to be so reliant
on the old way of doing things, and we are not really looking
at projecting what is currently happening with the current state
of our country. And I want to thank Mr. Drew for coming all
the way up from Boston, Massachusetts, because the program
you talk about is very similar to one in my district that provides
services actually through Veterans. And they have veterans
who are employed who come back that are either disabled,
that get these jobs in the LIHEAP program, do weatherization
in California. Our temperatures are a lot different, but
we also have very needy families as well. We always find that
there is a backlog of families that need to have this assistance
and not enough money.
And the Community Development Block
Grant Program has suffered tremendously under this administration,
And we need to find other ways of infusing dollars. And I am wondering if maybe programs like,
for example, HUD, Department of Energy, and even EPA could
somehow better collaborate with the Community Development
Block Grant Programs when we look at weatherization or trying to
help restructure our old buildings, even for landlords in some
of our public housing.
Because I am very concerned that,
when we talk about, for example, even removing lead paint in old
buildings, at the same time these same housing structures are
maybe built in the 1930s or 1920s and could use some other forms
of assistance. But we are not talking to each other, so it
may not be another 10 years before the department of
HUD or someone else go out there, and that we are piecemealing,
we are just putting a little Band-Aid on a much far greater program.
I mean, disease that we see in housing and with our
poor stock of housing in areas like southern California. What are your thoughts on that? [Mr. Drew] I have spent a lot of time over
these years trying to take the silos and put them together
as best we can.
And we do a certain amount of work, we have
done work with the Department of Energy. And the things we run
into, for example, are asbestos removal. [Ms. Solis] Or lead. [Mr. Drew] And you get in, and all of a sudden
you have regulations and other things you have to deal
with. So any time we are dealing with trying to
get something done in a household, we have to be well aware
of all of the other rules and regulations. So we do, as
best we can, try to pull together resources, working with city
hall, CDBG black grant. We try to put something together with
DOE. But I would not want to say to you that we feel comfortable
that we are maximizing our resources and target them as
directly as we can.
[Ms. Solis] Thank you. Thank you very much. [The Chairman] The gentlelady's time has expired. The Chair recognizes the gentlelady from South
Dakota. Ms. Herseth Sandlin. Thank you, Mr. Chairman. I represent the State of South Dakota. I also
have the honor of representing nine sovereign Sioux
tribes within their reservation boundaries, primarily within the
State of South Dakota. You know, our temperatures–we have drastic
ranges of temperatures. And even without a wind chill,
we can be many degree below zero. And then when you add the
wind chill, we have had record temperatures anywhere from
negative-40 to negative-70 below zero. So a couple of years ago–and, actually, even,
I think, last year–we had reports from one of the
tribes that I represent that people in very rural outlying
areas were burning clothing in order to stay alive and warm,
because we are dealing with severe poverty in many of these
areas, as well.
And I guess my first question would go to
you, Mr. Wolfe. I have had some discussions with the Rosebud
Sioux Tribe about how they didn't get leveraging incentives
last year because there was language omitted in the fiscal year
2008 budget. And so if you could talk a little bit more about
the LIHEAP leveraging incentive and, as well, the Residential
Energy Assistance Challenge option. Because, again,
I am wondering if other States or communities are experiencing
the same problem because of that omitted language. And then, in general, could you just discuss
whether you think tribes face particular challenges with
regard to energy assistance for their members, especially in
more rural areas? [Mr. Wolfe] Yes, I would be glad to. There was an omission in the fiscal year 2008
appropriation for LIHEAP, so leveraging wasn't funded, nor
were reach grants.
For some States, this created a problem, because
leveraging funds are the funds they use often to fund
their discretionary activities, to provide supplemental energy
assistance. Leveraging is also targeted, weighted toward
small- population States. So where large States receive
about 1 percent–I mean, it doesn't pay a lot. Leveraging,
on average, pays only about 1 or 2 percent of the total
amount of money that is raised outside of LIHEAP. But for
small-population States, it can go to 3 percent, which can
be quite significant. It can be $100,000, $200,000. So we heard
from a number of States that really was a problem and they
had to cutback services. REACH is really the demonstration grant part
of LIHEAP. We don't really have a dedicated research budget
in LIHEAP other than the REACH grants. And this was the first
year since it was started that we didn't have funding. Again,
it seemed to be an omission in the law. And HHS decided–they had to go ahead and
reallocate those funds, I think it was in June. Because we
thought maybe they could wait, but they said they couldn't wait
for a fix in the law.
So the seven or eight demonstration grants
that would have been given out weren't given out. And they
are multiyear and they do make a difference to the local agencies
that use them, because they are really designed to create
new approaches to funding energy assistance. And then lastly, your question on tribes.
It is different in each State. In some States the tribes act
as basically sovereign nations, so they receive funds directly
from HHS. In other States, they receive funds through the
States. The State acts as the grantee. I have looked at the numbers, and, frankly,
the allocation for tribes, in many cases, they are just very,
very small, especially in light of the poverty on some
of the reservations.
Ms. Herseth Sandlin. Does it differ? And when
you describe–what have you seen in the disparities
of what tribes get if they are getting the direct allocation
versus what they end up getting if they have to go in terms
of the block grant through the States? Is there a discrepancy
you have seen in that analysis? [Mr. Wolfe] Some States have told me that,
if they go under the block grant, the tribe will receive more
money. Ms. Herseth Sandlin. Some States have told
you that.
Have you verified that? [Mr. Wolfe] I haven't done any research on
it. But they have said they have offered–they have talked to
the tribes about going as part of the block grant and then
give them a higher allocation. But they said that many tribes
would prefer to stay as sovereign nations for the purposes of dealing
with HHS. I think that, because tribes overall don't
receive that much money from the program, this is something
worth looking at. Ms. Herseth Sandlin. Thank you. Before my time expires, just one other quick
question for Mr. Gruenspecht. [The Chairman] Our problem is this. There
are 12 minutes left to go on the House floor, and the gentlelady
only has 30 seconds left. Ms.
Herseth Sandlin. Yes. [The Chairman] So I would like to be able
to recognize the other two—- Ms. Herseth Sandlin. Just a question on propane,
because many people I represent rely on propane, the
recipients of propane for heating fuel. Mr. Gruenspecht, could you just discuss the
price trends for propane in recent months and years, and
what families who rely on propane can expect this winter? [Mr. Gruenspecht] Yeah. Let me quickly try
to flip to that. I think propane is not as tough a situation
as heating oil; probably is the second toughest situation.
So for propane, nationally we would expect a 13 percent increase
in expenditures. And I am trying to think whether
you are in the West or the Midwest. Ms. Herseth Sandlin. Both. [Mr. Gruenspecht] Probably both. You are a
big State. In the Midwest, 11.4 percent increase in expenditures
for propane. [The Chairman] The gentlelady's time has expired. The Chair recognizes–we will divide it into
3 minutes apiece– the gentleman from New York, Mr.
Hall.
[Mr. Hall] Thank you. I will submit my statement for the record
and just ask two questions, if you could answer me, starting
with Mr. Drew. Even with the $5.1 billion appropriation, is it
possible or even likely that more contingency funds will be
needed this year? [Mr. Drew] I hope not. I hope not. Just quickly,
we could use—- [Mr. Hall] That is fine. That is quick enough.
Thank you. Mr. Gruenspecht. [Mr. Gruenspecht] That would be a policy question,
so I would pass that to Mr. Wolfe. [Mr. Hall] Mr. Wolfe? [Mr. Wolfe] Well, using EIA's data, no, $5.1
billion won't be enough. If you look at the Northeast, low-income
families paid $14 billion for heating oil last year.
This year it is going to be in the range of $17 billion. If
the additional money was just part of the heating oil, they
would use it all up. So it is quite likely that we will need
more money.
But, again, you know, in a practical sense,
$5.1 billion is an enormous increase. So it is sort of half
a dozen of one, six of another. [Mr. Hall] Okay, thank you. The second thing is the administration, in
their bill, tried to kill the weatherization assistance
program, and we restored that today in the House bill. Do you have a suggestion as to how we can
better coordinate LIHEAP, low-income heating assistance, with
weatherization expenditures in order to maximize effectiveness? [Mr. Wolfe] I think we have a terrific partnership
now in most States. State agencies work very closely
together, in many States in the same office. The problem is
there is just not enough money in weatherization. That is the
real bottom-line problem. [Mr. Hall] Do the other gentlemen concur?
I guess you concur. [Mr. Drew] In Massachusetts we have a deregulation,
so we are doing more weatherization through utility
companies. That doubled our weatherization. [Mr. Hall] That is good. Thank you. I yield back. [The Chairman] The gentleman from Missouri,
Mr. Cleaver, is recognized. [Mr. Cleaver] Thank you, Mr. Chairman. Let me apologize, first of all, for not being
here. I am on what is essentially the Banking Committee,
and we have been at it all day yesterday and today.
I apologize.
But I came over even though that committee is still going,
because I–but I think Mr. Hall asked the primary question
that I was going to ask. I will throw a softball; anybody can hit it.
I would imagine Mr. Drew has already swung at it before. But we are going to have to do a rescue program.
We are going to have to do it–have to. Do you think
that the current level of funding for LIHEAP will allow those
who are struggling to have any level of appreciation for a rescue
program of Wall Street? [Mr. Drew] I don't know if they will have
an appreciation. They are trying to live by themselves. I did
mention that there was a person who said, “I don't understand
how they can spend trillions of dollars and not help me get through
the winter.'' They are making a direct connection between
the two. [Mr. Wolfe] No, I don't think so. When you
look at incomes for families making less than $50,000 a year,
they are living paycheck to paycheck.
Across the board, the
last 5 years, between higher health-care costs and now higher
energy costs and higher rental costs, they just don't have
any resources. So when you talk about a $700 billion bailout,
the number is so enormous. The average family only saves $300
a year now. I think that LIHEAP helps, I mean, certainly
helps take some of the edge off of this. But the magnitude
of the bailout versus–you know, LIHEAP is what? Less than
1 percent of the total bailout amount. It is hard to get your
hands around the bailout numbers, I think.
[Mr. Cleaver] It is less than that? [Mr. Wolfe] Yes, it is less than 1 percent. [Mr. Cleaver] Thank you, Mr. Chair. [The Chairman] The gentleman's time has expired. We are going to give each one of you 30 seconds
to tell us, in summary, what you want us to remember.
There are four roll- calls on the House floor. You have 30 seconds
to have something ring through our brains for the rest of this
session and winter, in terms of this program. We will start with you, Mr. Wolfe. [Mr. Wolfe] I would say a fully funded LIHEAP
and weatherization program working together will
make the difference between families not being able
to afford access to electricity, natural gas and heating oil and
being able to afford it. [The Chairman] Mr. Gruenspecht. [Mr. Gruenspecht] We need to work with the
States throughout the winter. And we have a State heating oil
and propane program. We will be tracking the prices on
a weekly basis. I think there are other improvements we need
to make. In particular, this year we have had a lot of
exports of distillate fuel. It took us a while to catch
up with that.
That is something that I think a better data program
would be helpful, in tracking movements of products. [The Chairman] And you have the final word,
Mr. Drew. [Mr. Drew] Well, I, first of all, thank you.
And what we are talking about is money that is filling a hole
in the face of poverty. I am glad that it is happening, but
I think I want to think about an overall anti-poverty effort,
I hope, in the new administration. I would like to just end today, because I
know you are busy, but we know that to end the cycle of
crisis that drags the hardworking families and retirees into
a path of economic insecurity, your climate and protection act,
H.R.
6186, is the best proposal. We have considered devoting
significant investments to making low-income communities
and housing sustainable and affordable. It is fair, does
not waste resources or give away to polluters or energy
vendors. It is consistent with the fair climate change principle.
The community action has developed, with the National
Community Action Foundation, Friends of the Earth, Public
Citizen, the National Consumer Law Center. And, with your
permission, I would like to submit these as part of my testimony. And I wish very much to thank you very much. [The Chairman] I thank you, Mr. Drew. And
I gave you an extra 30 seconds because of the obvious wisdom
that you were bringing to the committee.
[Laughter.] I have a group of questions which I did not
get a chance to ask on this round, and we are going to submit
it to you in writing. And we would appreciate the answers
in writing from you in a timely fashion. We thank you each for coming here today. With that, this hearing is adjourned. Thank
you. [Whereupon, at 3:18 p.m., the committee was
adjourned.].