Press Releases

Testimony of Joanne Choate, Maine State Housing Agency on Behalf of National Energy Assistance Directors' Association

Before the Energy and Natural Resources Committee United States Senate Hearing on Energy Efficiency Programs

Contact: Mark Wolfe
Phone: 202-237-5199
Date: July 13, 2001

National Energy Assistance Directors' Association
Suite 800 1615 M St NW
Washington, DC 20036

Mr. Chairman, members of the Committee, my name is Joanne Choate, I serve as the manager for LIHEAP, the Low-Income Home Energy Assistance Program, for the Maine State Housing Authority as well as the Vice-Chair of NEADA, the National Energy Assistance Directors' Association. I am honored at the request of the Committee to testify today on behalf NEADA, which represents the state directors of LIHEAP. We support the development and implementation of programs to help low-income households afford the cost of home energy.

Maine is a small New England state, with long cold winters. During the last winter heating oil prices rose sharply to $1.56 per gallon, bringing the average cost per household to $1,000. While the average households spends 4% to 5% of their income for home energy, for a low-income household, the total can reach as high as 20%. Without LIHEAP assistance, many of Maine's poorest households would have to choose between staying warm and other vital household necessities, such as food and medicine. Fortunately, LIHEAP was there this year to help over 60,000 households in the state of Maine.

During the winter months many letters have crossed my desk from grateful recipients. An elderly recipient in northern Maine wrote, "Thank you, very much for fuel assistance….It is, indeed a much needed help. I am 82 years old, in poor health, and nearly desperate with so many bills pushing for payments." A mother wrote, "I want to take this opportunity to sincerely and humbly thank you for your assistance that you approved for my children and I. Things had been looking very bleak, thanks for the ray of sunshine." The elderly and families with young children represent two of the most vulnerable groups to rising energy costs. About 73% of all LIHEAP funds in Maine are allocated to assist these groups.

In light of recent rise in energy prices, we have to ask the question, is LIHEAP funding adequate?

Unfortunately, the answer is no. In spite of the fact that federal funding was increased from $1.1 billion to $1.4 billion in addition to $855 million in emergency funds, it still is not enough to meet the need. The total number of households receiving assistance this year totaled 4.9 million, an increase of almost 1.1 million from the previous year. Still, on average, the states were still only able to serve about 17% of the eligible population. A copy of the table is provided at the end of my testimony.

In my home state of Maine, the total number of households receiving assistance increased since last year by 32%, from 44,000 to 58,000. While the additional funds went a long way to helping address the need this winter, unfortunately it was not enough. As a result of rising prices, energy bills for the average household increased by $400 to $500. Many households, not only in Maine, but throughout the nation, were not able to pay these bills. As a result, states are reporting significant increases in arrearages and shut-offs.

A key indicator of the need for additional assistance is the number of households applying for emergency assistance. Since last year, the number has increased by 400% -- these are households that exhausted all other resources, including their regular LIHEAP benefit and could not afford to purchase any additional fuel. The average annual income for a LIHEAP recipient in Maine is $10,262 and for an elderly recipient is only $7,200. The average cost of home heating this winter was $1,087. About 30% of the average recipient's annual income is spent on home energy.

We are also experiencing an increase in the number of households that have not applied for assistance before. 67% of these households in Maine are frail elderly households. These are proud people who have always paid their taxes and have never before asked for government assistance.

The need for assistance is being felt throughout the nation. According to a recent NEADA survey, many states are reporting that their utilities are experiencing significant increases in bad debt. For example, the District of Columbia reported $6.6 million in natural gas arrearages by 14,694 natural gas households, Georgia reported approximately $147 million in arrearages owed by 479,000 natural gas households; and Louisiana reported $32.9 million in arrearages, owed by about 76,000 households. We expect that the problem of arrearages and shut-offs will get worse as the summer cooling season progresses, especially in southern and western states.

Twenty-eight states and the District of Columbia are now out of funds and no longer are able to provide households with assistance to cover summer cooling bills and avert shut-offs.

S. 352 would play a significant role in helping to address the need for additional funds. By increasing the authorization for LIHEAP to $3.4 billion, it would send a signal to the appropriations committees that additional funding is necessary to address the needs that low-income households face with their winter heating and summer cooling bills.

With the additional money we would increase outreach efforts to provide funds to underserved populations, take advantage of pre-purchase and other payment arrangements to reduce the cost of home energy, and provide higher grant levels to offset the impact of higher prices on poor families.

NEADA would also like to recommend that the Committee consider an increase in the set-aside for training and technical assistance funds. Current law limits the federal program office from using more than $300,000 for these purposes. This amount is not sufficient to meet the growing need to develop new and innovative methods for managing program funds, collect data for program design and evaluation, and provide training to program managers. We recommend that training and technical assistance funds be increased to $750,000.

Mr. Chairman, we are also pleased to see increased support provided in S.352 for the State Energy Program (SEP) and Weatherization Assistance Program (WAP). Across the nation, LIHEAP works in close partnership with these two programs in helping to target assistance to those most in need. SEP plays an essential role in implementing energy programs at the state and local level for all sectors of the economy and WAP delivers energy efficiency services to low income households to help reduce their energy bills.

Taken together, the increased funding for LIHEAP, WAP, and SEP contained in S.352 will go a long way in helping to meet the energy needs of low-income households.

Thank you for the opportunity to testify today on the important role played by LIHEAP, and its companion programs, the Weatherization Assistance Program and the State Energy Program. The members of NEADA look forward to working with the Committee on this important issue.