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Senate OKs More LIHEAP Dollars for 2006; Bill Awaits House Action

March 13, 2006
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The Senate last Tuesday approved by voice vote a measure that shifts $1 billion in funds that were set aside to aid low-income energy consumers in fiscal year 2007 to the current fiscal year. The bill has been sent to the House for action, where it faces an uncertain fate.

The vote came on the heels of a Senate move earlier this month to waive the budget act, which cleared the path for senators to vote last Tuesday on whether to transfer $1 billion included for the Low-Income Home Energy Assistance Program (LIHEAP) in a recent deficit-reduction measure from fiscal 2007 to the current fiscal year. The measure (S 2320) was sponsored by Sen. Olympia Snowe (R-ME) and other Northeast senators.

By 68 to 31, the Senate approved a second-degree amendment, also offered by Snowe, that would place 50% of the additional LIHEAP dollars in a "contingency" fund to be distributed by President Bush in emergency situations. These funds would most likely go to help poor energy consumers in cold-weather states pay their heating bills during the winter season.

The other half of the additional LIHEAP funds will be distributed according to a long-held formula, which would allocate funds to poor energy consumers in both warm- and cold-weather states.

"I think that [50-50 allocation] is patently fair to all the states, to all the regions," Snowe said. Republicans, such as Sen. John Ensign of Colorado and Jon Kyl of Arizona, had fought to have all of the additional LIHEAP monies distributed based on formula funding, which they said more fairly recognized the needs of consumers in southern and western states who need help with their energy bills during the warm-weather months when air-conditioning loads are high.

"Our point is that the contingency fund has not been allocated fairly," Ensign said, adding that most of the LIHEAP funds are depleted during the winter months. There is a definite "bias toward the northern states" in the LIHEAP program, he noted.

Following the Senate vote, Kyl conceded that the "50-50 compromise" offered by Snowe would benefit all states, not just those in the North.

Snowe and her supporters in the Senate have been trying since late last year to obtain an increase in LIHEAP funding for Maine and other Frost Belt states. Despite the huge run-up in natural gas prices as the winter heating season approached last November, Congress allocated fewer LIHEAP dollars for fiscal year 2006 than in fiscal year 2005.

The American Gas Association (AGA) gave high marks to the Senate for approving more LIHEAP assistance for fiscal year 2006, bringing total funding for the year to nearly $3.2 billion.

If passed by the House, this will be a 50% hike in funding for LIHEAP this year, arriving just in time to prevent energy-assistance programs from running out of money to help low-income energy customers pay their heating and cooling bills, said the Washington, DC-based AGA, which represents natural gas local distribution companies.

"This is the first meaningful increase to LIHEAP in 20 years," said Steve Crout, AGA's managing director of government relations. "However, even now that total funding is up to $3.2 billion, it is still not enough to help the 33 million households that are eligible to receive LIHEAP." He noted that the AGA will continue to press for full funding of $5.1 billion for the LIHEAP program -- the level authorized by the Energy Policy Act of 2005 that was enacted last summer.

The average LIHEAP household received $318 to help pay its home energy bill in 2005 -- far less than the $700-$1,200 that the Energy Information Administration (EIA) said it cost the average American household to pay for home heating last winter and significantly less than the $800-$1,400 the EIA has projected the average American household will pay for home heating this winter, the AGA said.

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