New York, NY — Responding to new U.S. Department of Energy projections of staggering price increases for home heating oil and natural gas due to Hurricane Katrina, Senator Hillary Rodham Clinton today called on President Bush to request $1.276 billion in emergency funds for the Low Income Home Energy Assistance Program (LIHEAP). LIHEAP, which offers federal funds to help low income households meet their home heating needs, will be critical to helping to deal with a looming crisis for thousands of New Yorkers caused by the soaring cost and diminishing availability of home heating fuel as fall and winter approach. Last year, an estimated 800,000 New Yorkers received LIHEAP assistance.

“The average New York family will need to spend at least $400 more this winter to pay their heating bills. This could spell disaster for seniors, low income families, and the disabled across New York who are struggling to make ends meet. That’s why I am calling on President Bush to support emergency funds for LIHEAP as part of the next Hurricane Katrina relief package,” said Senator Clinton. “Unless we take action now, thousands of New Yorkers will be left out in the cold.”

According to a new report by the U.S. Energy Information Administration (EIA), “Hurricane Katrina caused significant direct damage to offshore rigs, refineries, pipelines and ports in the Gulf of Mexico, with wide-scale electricity outages and flooding exacerbating the already devastated infrastructure, compounded by the evacuation of thousands of employees.” As a result of this damage, the EIA projects that home heating oil will hit $2.49 per gallon this December and that natural gas prices will also be higher than expected. (See table below for analysis of the projected cost increase per New York family).

In light of this forecast, Senator Clinton today wrote to President Bush to request an additional $1.276 billion in funding to enable LIHEAP to have the same purchasing power as last year. This would provide $150 million in additional funding to New York so that New York can provide the same level of service to seniors, disabled and low income families as last winter.

Senator Clinton is working on all fronts to help New Yorkers affected by skyrocketing energy prices. On August 18, Senator Clinton sent a letter to President Bush urging him to: direct the Federal Trade Commission (FTC) to investigate whether oil companies are engaging in anti-competitive practices, release oil from the Strategic Petroleum Reserve, and pressure our OPEC allies to increase production. In the wake of Hurricane Katrina with gas pricing growing even more suspicious, Senator Clinton last week co-sponsored legislation along with Senator Bill Nelson of Florida to require the FTC to investigate price gouging at the gas pump. Senator Clinton also supports a temporary suspension of the gas tax if savings are passed on to consumers and there is no negative impact on New York jobs or projects.

“I will continue to fight to ensure that oil companies aren’t profiting at the expense of consumers and that the federal government takes the short-term steps that we can to get gas prices under control. The fact is that this Administration needs to take control and tell the oil companies that they should be taking some of their profits and passing them onto consumers who are struggling to pay for gas to get to work, and, soon, heat their homes.”

Senator Clinton today also called on the President to provide emergency funding for programs to reduce demand for energy, urging the President to request that the Weatherization Assistance Program (WAP) be fully funded. The program was reauthorized at $500 million in the energy bill recently approved in Congress. Through this program, weatherization service providers install energy efficient measures in homes of qualifying homeowners free of charge. According to the U.S. Department of Energy, the program reduces energy use by approximately 31 percent in each home it serves and saves the average homeowner about $300 per year. It also produces $1.83 in energy savings for every federal dollar invested. Senator Clinton also underscored the need for a conservation plan for the Northeast Region so that we are prepared for possible supply disruptions, particularly of heating oil.

Last year, New York received $20.3 million in WAP funds, which enabled the state to serve approximately 11,000 families. If overall WAP funding were raised to $500 million, New York’s share would increase by $24.1 million and the number of homes served would increase by 13,000, or an overall increase of 55%.

Click here to view the the projected increase in heating costs for New York families.

The text of Senator Clinton’s letter to President Bush follows:

September 9, 2005

President Bush
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500

Dear President Bush:

On September 1st, I joined with colleagues in writing to you to request your support for $900 million in emergency Low Income Home Energy Assistance Program (LIHEAP) funds as a component of supplemental funding to address the aftermath of Hurricane Katrina. In the letter, we stressed that we stand ready to help the millions of people in the Gulf region whose lives have been turned upside down by the hurricane. This remains our top priority. However, we also know that the effects of Hurricane Katrina are being felt by Americans outside of the Gulf Region as gasoline, heating oil and natural gas prices rise in the wake of this disaster. Indeed, there is an imminent emergency confronting millions of Americans in cold weather states. The current rise in energy prices coupled with energy debt remaining from last winter are leading to increased disconnections and arrears among consumers as the winter heating season begins – threatening the well-being of low-income families and seniors. This situation warrants the provision of emergency LIHEAP funding in the supplemental request, and we asked in our September 1 letter that you include $900 million in emergency Low Income Home Energy Assistance Program (LIHEAP) funds as a part of the Katrina supplemental appropriations to enable the program to have the same purchasing power as the LIHEAP funds that were provided last year.

It now appears that $900 million will not be sufficient to accomplish this goal. Two days ago, the U.S. Energy Information Administration (EIA) released its monthly “Short-Term Energy Outlook” for September. As noted in the report, “Hurricane Katrina caused significant direct damage to offshore rigs, refineries, pipelines, and ports in the Gulf of Mexico, with wide-scale electricity outages and flooding exacerbating the already devastated infrastructure, compounded by the evacuation of thousands of employees.” The impact of this damage is reflected in the Eva’s new price forecasts for heating oil and natural gas. Whereas the prior EIA “Outlook” forecasted that home heating oil prices would be $2.27 a gallon after taxes in December in the Northeast, the Eva’s new forecast is that home heating oil will hit $2.49 this December. Similarly, natural gas prices are now projected to be higher than previously thought. The EIA forecasts that residential natural gas prices in the Mid-Atlantic region, which includes New York, will be $17.30 per thousand cubic feet in the first quarter of 2006, versus $12.33 for the first quarter of 2005. For the average New York family, these projected increases mean that a family using heating oil will need to spend $1,729 this winter, an increase of $479 over last year; and a New York family using natural gas will need to spend $1,540 this winter, an increase of $442 over last year.

In light of these new forecasts, I ask that you include $1.276 billion in emergency LIHEAP funds in your next supplemental funding request to enable the LIHEAP program to keep pace with skyrocketing heating oil and natural gas prices. This step is needed to help avert a looming, but preventable, crisis for the estimated 800,000 New Yorkers and millions of other Americans who will depend on the LIHEAP program.

In addition to helping low-income families and seniors pay their heating bills, I think that the projected energy prices make it imperative that we provide emergency funding for programs to reduce demand for energy. I urge you to request emergency funding to fully fund the Weatherization Assistance Program, which was authorized in the energy bill at $500 million. Through this program, weatherization service providers install energy efficiency measures in the homes of qualifying homeowners free of charge. According to the Department of Energy, this program reduces energy use by approximately 31% in each home that the program serves, and produces $1.83 cents in energy savings for every federal dollar expended.

Finally, I am disappointed that the Administration has still not responded to my call of August 18th to launch an investigation into gas price gouging and pressure our OPEC allies to increase production. Since then, prices have continued to skyrocket at the pumps, but your Administration has refused to act.

Thank you for your consideration of these requests.

Sincerely,

Senator Hillary Rodham Clinton

###