Ahead for Heating Oil Users: a Record-Shattering Winter

More are seeking assistance as the average bill tops $2,000.


Penny Osborn lost her expensive fuel oil to a thief.

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Clearly, home energy costs are not a burden for all. Indeed, the money consumers spent on fuel oil, electricity, and natural gas in 2007 amounted to just 2.6 percent of disposable income. But a study by the American Gas Association found that in households eligible for the federal Low Income Home Energy Assistance Program, the cost of heating and cooling now consumes a whopping 20 percent of income.

About 38 million U.S. households are eligible for home energy assistance, up 78 percent since the program was started in 1981, but funding has not kept up. The program now reaches only 16 percent of those who qualify, and the typical grant covers less than a third of the average winter fuel cost. The 2008 budget that Congress and President Bush finally agreed upon appropriated $1.98 billion for LIHEAP—the same as last year—but set aside a significantly expanded emergency fund of $590.3 million. The ink had barely dried on the bill when states were calling on President Bush to release the money.

"We have record numbers of people falling behind, and because this program is routinely underfunded, we're always in a state of emergency," says Jerry McKim, director of Iowa's energy assistance program. McKim reduced the amount of the average household grant to about $300 to try to spread the available money further. With the increase in fuel costs, and a record 18,000 Iowa homes disconnected from utility service at the start of this winter, McKim says he expects applications for assistance to grow. "At some point here, I'm going to run out of funds," he says. "That I'm sure of."