Higher Utility Bills Face Homeowners

Heating oil and propane costs are expected to jump 28 percent.


Despite the pleasant early autumn weather warming much of the country, sky-high heating costs are in store this winter and many of the nation's households are in the grips of a home energy crisis, says a coalition of state officials, the AARP, and the nation's natural gas utilities. The group is calling on the Bush administration to release $151.5 million in federal emergency assistance funds to help poor households.

Most of the funds in this contingency pot will disappear, under the program enacted by Congress, if they are not released by September 30. Some 1.2 million U.S. households were disconnected from electric and natural gas service this summer due to failure to pay utility bills, says the National Energy Assistance Directors' Association. The average delinquent family's unpaid bill is $850, a sum that typically must be paid before it can be reconnected for the winter.

Heating oil and propane costs this winter will be up 28 percent over last year, NAEDA projects, with the average heating bill for homes using those fuels ranging from $1,700 to $1,800. That's roughly double the average cost of heating a house from 2000 to 2005. Natural gas and electricity costs also are expected to be up 6 to 7 percent this year, with the average winter heating bill at about $880. "These record prices will place a significant burden on low- and moderate-income families this winter," says Mark Wolfe, director of NAEDA. "We are calling on the administration...to help poor families pay for the first tank of fuel as well as cover outstanding arrearages from high cooling costs this summer."

In late August, the Bush administration released $50 million in funds from the Low-Income Home Energy Assistance Program to 12 states in the South and Midwest that experienced hotter than normal conditions this summer. There's been no word yet from the Department of Health and Human Services on whether it intends to distribute the rest of the contingency funds, but the agency said it targeted the August release of emergency funds to states most affected by heat, with the most families in need. HHS said it made $2 billion in LIHEAP funds available to states and tribes in the past year.

But Daphne Magnuson, spokeswoman for the American Gas Association, the organization representing gas utilities, says LIHEAP has not kept up with inflation since its inception in the early 1980s. If it had, she says, the sum available would be closer to $4 billion. For families receiving federal energy assistance, home heating and cooling costs now eat up 20 percent of annual income, according to a new study by AGA. In contrast, these costs only consume 3 percent of income for households that are not low income.