WASHINGTON, DC - With the economy sputtering and more families struggling with soaring energy bills, U.S. Senators Jack Reed (D-RI) and Susan Collins (R-ME) today urged President Bush to release the remaining $120 million in contingency funds for the Low Income Home Energy Assistance Program (LIHEAP) immediately. If President Bush fails to act by September 30, 2008, $100 million that Congress approved for LIHEAP will not go to helping families in need. The other $20 million in contingency funds appropriated by Congress remain available until expended.

"While Americans are struggling with record energy prices, President Bush is sitting on $120 million that could provide some immediate relief to working families. Releasing the remaining LIHEAP contingency funds will help thousands of Rhode Islanders and millions of Americans with their energy bills. I strongly urge the President to release this critical funding before it's too late," said Reed.

"With the costs of heating and cooling our homes at unprecedented levels, all available funds for this essential program that serves as the lifeline to some of our most vulnerable citizens must be utilized," said Senator Collins. "It is my hope that the President will support our request to immediately release these emergency funds to help families in Maine and across the country."

In a letter to President Bush today the senators wrote: "As you are aware, the bulk of the contingency funds that are currently at your disposal will expire when the current fiscal year ends on September 30th unless they are released to help consumers. While valuable time has already been lost, it would be a shame for these critical resources to disappear as well. Again, we urge you to release these contingency funds and to support on-going bipartisan efforts in the Congress to provide additional emergency funds for LIHEAP."

Senators Collins and Reed serve as Co-Chairs of the Senate Northeast-Midwest Coalition, a bipartisan group working together to address issues common to their states, including home heating costs. Last year, 5.8 million low-income households nationwide, including nearly 30,000 in Rhode Island and more than 45,000 in Maine, relied on LIHEAP to assist with the costs of heating and cooling their homes.

The text of the letter follows:

August 15, 2008

Dear Mr. President:

The increase in energy costs this year have hit American consumers hard, particularly those who already struggle to make ends meets.

On June 27, 2008, a bipartisan group of 43 senators joined us in a letter requesting that you immediately release $120 million in contingency funds from the Low-Income Home Energy Assistance Program (LIHEAP). Regrettably, you have not responded to this letter nor have these funds been released. LIHEAP contingency funds can be used immediately to help consumers pay their utility bills and, for those in cold-weather states, prepare for the winter ahead. It is disappointing that while you have acknowledged the pain many consumers are feeling you have ignored the call to provide immediate help. The LIHEAP statute (42 USC Sec. 8622) outlines the conditions under which the release of contingency funds is warranted. These conditions include:

  • a significant increase in the cost of home energy,
  • a significant increase in home energy disconnections,
  • a significant increase in participation in a public benefit program, such as the food stamp program, or
  • a significant increase in unemployment.

By each of these measures, low-income consumers are in the midst of an emergency which justifies the release of these funds.

According to the Department of Energy's Energy Information Administration (EIA), "[r]esidential electricity prices are projected to increase by an annual average of about 5.2 percent in 2008 and 9.8 percent in 2009." In response, utilities across the country have sought double digit rate increases. In Rhode Island, the Public Utilities Commission approved a 22% increase in electricity rates this summer. The burden on consumers who rely on heating oil during the winter will be even greater, with heating oil projected to rise 50% higher this winter, according to EIA.

These price and rate increases loom over consumers at a time when millions are having trouble paying their bills. As noted in the June 27th letter, the National Energy Assistance Directors Association (NEADA) has estimated that more than 15.6 million households face utility shutoffs this year because they cannot pay their energy bills. On August 7th, the Los Angles Times reported that "Utility shut-offs for consumers behind on their energy bills are increasing around the country, reaching 50% or more in some hard-hit areas…."

Furthermore, the impact of the economic downturn on low-income individuals and families is growing. In July, the national unemployment rate jumped to 5.7%, a four-year high. This was the seventh straight month of aggregate job losses. As a result, more Americans are finding it hard to meet their daily needs. The Food Research Action Center (FRAC) notes that in May 2008 food stamp participation grew to 28,435,841 persons, an increase of more than 2 million from a year earlier. For households dealing with one or more of the problems described above, LIHEAP can be a critical safety net. Helping these low-income families pay their energy bills will free up limited income to pay for other essentials like lifesaving prescription medicines.

As you are aware, the bulk of the contingency funds that are currently at your disposal will expire when the current fiscal year ends on September 30th unless they are released to help consumers. While valuable time has already been lost, it would be a shame for these critical resources to disappear as well.

Again, we urge you to release these contingency funds and to support on-going bipartisan efforts in the Congress to provide additional emergency funds for LIHEAP.

Thank you for your attention to this request. We look forward to your reply.

Sincerely,

Jack Reed Susan M. Collins