Increase in federal fuel aid desperately needed as prices soar

Washington must act now to keep low-income households warm this winter

HIGH PRICES HAVE left millions of Americans struggling to pay their bills. 

The cost of virtually everything has skyrocketed, from food to rent to used cars, but particularly energy. 

Wellhead prices of natural gas have more than doubled in the last year and heating oil costs this winter will double as well. No one who lives on a limited budget is looking forward to the changing colors of autumn or a soft winter’s snowfall. Because the changing season means facing the prospect of being cold in your own home. 

This past year, the $3.2 billion baseline federal fuel assistance benefit for low-income seniors and working families received a $5 billion boost from President Biden’s American Rescue Plan Act, giving some 5.2 million households considerable relief during the bitterly cold stretches of the 2021-2022 winter heating season. 

The funds have also helped families living in sun-baked states like Florida, Arizona, and California cover higher electricity charges during this summer’s record heat. 

But for the next fiscal year, the federal Low-Income Home Energy Assistance Program, or LIHEAP, is so far facing a 50 percent cut at a time skyrocketing energy costs are eroding the value of the benefit. 

During a press conference last week in Roxbury, 75-year-old Phillip Mayo stood in front of the drafty Victorian home where he’s lived for nearly 50 years and said the only thing that stands between him and the freezing cold during the harsh New England winter is fuel assistance. 

Mr. Mayo joined representatives of the oil industry – business owners with a social conscience – and veterans from the front-lines of the unending War on Poverty to sign a letter to President Biden asking him to support a $10 billion funding level for LIHEAP in the next fiscal year. 

“I think President Biden is a good man and I hope he reads our letter and heeds our call,” said Mr. Mayo. 

Sharon Scott-Chandler, president of Action for Boston Community Development, the largest fuel-assistance agency in New England, said that “extreme temperatures are increasingly the norm” and warned that more help – including support from state government – is needed to contain health risks associated with climate change. 

Michael Ferrante, president of the Massachusetts Energy Marketers Association, said that homeowners like Mr. Mayor “desperately need additional financial support from the federal government.” 

Looking ahead to winter, it’s impossible to predict exactly where prices will be, but we do know this: Last year, heating oil was selling retail at $3 a gallon and the average price right now is $5 a gallon. That means it costs close to $1,500 to fill the average household tank and the average household that paid $2,250 for heat last winter will pay $4,300 this coming season – a 90 percent increase. 

Meanwhile, natural gas prices have doubled and utilities will be passing along the increased cost of gas and the electricity it generates to their customers. 

Also on the horizon is a hurricane season that federal meteorologists are predicting could be unusually severe. A replay of the 2005 season, when hurricanes Rita and Katrina shut down Gulf Coast oil refineries, could drive prices even higher. 

Adding to the burden is the general rise in the price of all essentials. What we are experiencing now is different from previous oil-price shocks. In the past, oil prices rose while the cost of other goods and services rose modestly. This time the annual increase in other costs is rising 3.5 times as fast. The Consumer Price Index last month rose to a record level of 9.1 percent. Low-income households need a safety net and they need it now. 

Middle-class and upper-income Americans will make it through this economic turbulence just fine. They pay an average of 5 percent of their budget on energy. But what about poor Americans who routinely dole our 25 percent of their take-home pay to heat their homes and keep the lights on? 

When President Biden came to Massachusetts a few weeks ago, he properly identified LIHEAP as the federal program we should use this summer to address urgent cooling needs during these record temperature hikes.  

LIHEAP is also the vehicle to avert heating disasters caused by shivering seniors using open stoves and kerosene heaters to stay warm once cold weather moves in. 

Meet the Author
Meet the Author
The current $4 billion baseline funding level for LIHEAP making its way through Congress is simply inadequate to meet the challenges of rising energy costs. The White House and Congress should aim higher and support a $10 billion funding level to protect the needy from rising energy costs. 

Joseph P. Kennedy III, a former Massachusetts congressman, is managing director of Citizens Energy Corporation in Boston. Larry Goldstein is a global oil industry analyst and a trustee of the Energy Policy Research Foundation.