Bill Aims to Help Poor Pay Higher Utility Costs

Congress is poised to pump more money into a program that helps the poor pay their utility bills as California and other Western states struggle to respond to surging demand for the federal assistance.

Although the money is distributed under a formula that favors colder states in the Northeast and Midwest, advocates said the proposed funding boost would give California a proportionately bigger share than it normally gets.

The Low-Income Home Energy Assistance Program, which will dispense $1.4 billion this year, would get an additional $1 billion annually if Congress passes a comprehensive energy bill introduced Monday by Sen. Frank Murkowski (R-Alaska), chairman of the Energy and Natural Resources Committee.

Though the funding increase enjoys strong bipartisan support, other elements of Murkowski’s bill face strong opposition, particularly a provision to open up the Arctic National Wildlife Refuge to oil drilling.

Some lawmakers Monday urged Congress and President Bush to bypass Murkowski’s bill, which may not come up for a final vote until summer. They said Congress should approve an additional $1 billion in funding immediately to meet a recent surge in requests for the assistance.

Although supply shortages have caused utility bills to soar in some parts of California, the state’s share will be constrained by a funding formula that was deliberately designed to favor cold-weather states.

The poor get far more assistance if they live in areas where the temperature is abnormally low, though their counterparts in warmer states may be paying just as much for the energy they consume.

Although 14.6% of the nation’s poor live in California, it will receive only $63 million, or 4.6% of this year’s home energy funds. The largest single share, $174 million, goes to New York; Illinois, Michigan, Ohio and Pennsylvania will also get more money than California.

Some government officials and independent analysts say the Northeast and Midwest deserve the largest share because of their severe weather.

Others, however, contend the funds should be distributed to states based on the size of their low-income populations, or under a new formula that gives greater weight to those hardest hit by high fuel prices, no matter where they live or what the thermometer says.

“If the program is primarily to help poor people . . . the weighting should be given to the low-income population,” said Glenn Schleede, a Virginia-based energy consultant who has studied the program.

Tim Ransdell, executive director of the California Institute for Federal Policy Research, said the existing formula is unfair to California. Cold-weather states get bigger shares because they have “powerful members in the right places,” he said.

“The Northeast and Midwest are cold, but California has energy needs as well, especially in the current crisis,” Ransdell said.

Dick Munson, Ransdell’s counterpart at the Northeast-Midwest Institute, said the formula is intended to help regions with particularly harsh winter climates, noting that “California is blessed with wonderful weather.”

The formula does, in fact, reflect the power politics and regional rivalries within Congress, according to those familiar with the legislation.

“The members from the Northeast have been the ones who have given their pound of flesh to save this program,” said Mark Wolfe, executive director of the National Energy Assistance Directors’ Assn.

But support is building across the board to increase funding for the program.

“Congress is realizing this is not a regional problem,” said Wolfe. “It’s a national problem.”

If funding is increased substantially, California and other states in the West and South will receive slightly larger portions of the new money. That’s because the allocation formula will become more even-handed when total funding tops $2 billion a year.

The energy assistance program helps low-income families pay the cost of heating and insulating their homes in the winter, and cooling them in the summer.

Advocates for the poor say low- and moderate-income households typically pay about 14% of their income on energy bills, but the figure is expected to rise to 20% or more this year. In California, officials say some low-income families are using as much as 40% of their income to pay their fuel costs.

In extreme cases, “they have to make a choice between paying their energy bills or buying food,” said Toni Curtis, chief deputy director of the California Department of Community Services and Development.

In some parts of the country, natural gas prices have more than tripled. California had the highest average gas prices in the nation during December, according to the Energy Information Agency.

“More families than ever are in need of federal LIHEAP funding,” says a letter prepared by Rep. Bernie Sanders (I-Vermont) and signed by 130 House members. “Several states have no remaining funds available.”

In California, a family of four with an annual income of up to $33,125 is eligible for the aid. Priority is given to low-income families whose fuel bills consume a big chunk of their incomes, and to the elderly, the disabled, and families with young children.

California officials estimate that 2.1 million households are eligible to receive assistance, but only about 190,000 will get it because of the limited funds available. They estimate the average benefit will be $192 this year.

“California receives a low share of the federal block grant resources when measured against its eligible population,” said Margaret Power, executive director of Economic Opportunity Studies in Washington.

In recent testimony before the California Public Utilities Commission, Power said the state receives the equivalent of about $29 per eligible family, compared to $169 per family in New York.

In addition to the $1.4 billion in regular grant funds allocated this year, President Clinton last September and December distributed $855 million in emergency assistance. Of that, California received $39 million.

California has the largest state delegation in Congress, and its members have never been shy about seeking their fair share of federal funds. In 1999, the most recent year for which data are available, Californians sent $23 billion more to Washington than they got back in services.

Persuading Congress to make additional formula changes for the benefit of states like California would be a “very difficult fight,” said Pamela Barry, a top staffer for California’s Democratic congressional delegation.

“The regional politics are overwhelming,” Barry said. “If you’re just one state against multiple states, it’s a very tough fight. . . . No one is going to sit still and wait for you take their money away.”

Even so, a spokesman for Gov. Gray Davis said the governor’s Washington office “has been actively involved in trying to increase funding to California.”