Working to Mitigate the Effects of High Home Heating Oil Prices

T H E W H I T E H O U S E

Working to Mitigate the Effects of High Home Heating Oil Prices

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THE WHITE HOUSE
Office of the Press Secretary

For Immediate Release

February 28, 2000

THE CLINTON-GORE ADMINISTRATION: WORKING TO MITIGATE
THE EFFECTS OF HIGH HOME HEATING OIL PRICES

Today, in a meeting with the National Governors Association, President Clinton will emphasize that his supplemental appropriation FY2000 request to Congress includes important assistance for consumers and businesses affected by unexpectedly high home heating oil and diesel fuel prices. The request includes $620 million in additional funds for the Low Income Housing Energy Assistance Program, the Dept. of Energy’s (DOE) Weatherization Assistance Program, and the Small Business Administration (SBA) to help provide SBA loans to those affected by high home heating oil and diesel fuel prices. In addition, President Clinton will also urge the Governors to adjust LIHEAP eligibility standards to assist as many low and moderate income families as possible under federal law and emphasize that Federal law permits states to use Temporary Assistance for Needy Families (TANF) funds to provide emergency heating assistance to very low income families with children.

THE SUPPLEMENTAL APPROPRIATION REQUEST INCLUDES:

$600 million to replenish the Low Income Housing Energy Assistance Program (LIHEAP) fund which was depleted by recent disbursements of $295 million.
$19 million in additional funds for the DOE Weatherization Assistance Programs. These funds will meet the President’s original request for weatherization and help increase the energy efficiency of homes, thereby reducing homeowners’ energy burden and cost.
$1 million for SBA program to support $86 million in loans for small businesses affected by rising oil prices. This will allow home heating oil dealers, for example, to extend flexible payment terms to their customers.

THIS REQUEST BUILDS ON EARLIER ADMINISTRATION STEPS IN RESPONSE TO THE INCREASE IN HOME HEATING OIL PRICES: In addition to the steps announced today, the Administration has already taken aggressive steps to expedite the delivery of home heating oil to markets in the Northeast and to help mitigate the effects of the unexpected price spike.

Recently, the President:

Released a total of $295 million of LIHEAP emergency funds. The funds are being distributed so as to give priority to states most affected by increases in heating oil prices.
Encouraged states, which administer the LIHEAP program, to adjust their eligibility standards to assist as many low and moderate income families as possible under federal law.
Directed the Secretary of Energy to conduct a 60-day study of diversifying energy supplies in the Northeast, including converting factories and other major users from oil to other fuels, in order to free up oil supplies for use in heating homes.>/li>
Directed the Small Business Administration to ensure the availability of Small Business Administration loans for heating oil distributors who need a better cash flow in order to buy heating oil and make deliveries to their customers.

In addition, the Department of Energy has:

Recently hosted a home heating oil summit in Boston with refiners and major distributors of home heating oil, elected officials, analysts, and consumers to discuss the reasons for the problems in home heating oil markets, and how the government and industry can work together to better meet the needs of consumers in the Northeast and New England now and in the future.
Requested that refiners defer routine maintenance turnarounds, subject to safety requirements, so that heating oil production remains at full throttle until the home heating oil problem has passed.
Urged eligible utilities to switch from heating oil to natural gas.
Created a DOE/Coast Guard Task Force for Product Movement, to prioritize heating oil shipments at terminals when necessary, clear rivers as needed, deploy Coast Guard vessels and other resources to make certain there are no shipping or loading delays.
Initiated a DOE’s Energy Information Administration and Office of Policy study on the impact of interruptible contracts on home heating oil supply. Such contracts direct gas customers to switch from gas to other fuels when the temperature drops below certain levels, to reduce peak demand for gas.
Announced plans to re-establish an Energy Emergency Office at the Energy Department to enable the federal government to work more closely with the states to anticipate, plan and respond in a more immediate and coordinated way when energy crises occur, including heating oil/gasoline shortages, power outages, or pipeline emergencies.

HOW THESE PROPOSED ADDITIONAL FUNDS WILL HELP

Low Income Home Energy Assistance Program (LIHEAP): LIHEAP helps eligible families pay the costs of heating and insulating their homes in the winter, and cooling their homes in the summer. States determine eligibility and benefit levels based on federal law. Approximately 4 million low-income households receive assistance each year. As part of LIHEAP, the Congress sets aside emergency funds ($300 million in FY 2000) to help States meet urgent home heating or cooling needs. The President determines when an emergency warrants the release of these funds, and directs the Secretary of Health and Human Services to release the funds to the States.

On January 25th, the President directed Secretary Shalala to release $45 million to eleven states that were hit hardest by increases in home heating fuel prices this winter.
On February 10th, in response to further increases in the price of home heating oil, the President directed Secretary Shalala to release an additional $130 million.
On February 16th, the President directed Secretary Shalala to release the $120 million remaining in the LIHEAP Emergency Fund, in response to fuel prices that kept climbing -- by more than 80 percent compared to last year in some states -- and causing significant hardship for low-income families throughout the country.

DOE Weatherization Assistance Program: DOE’s Weatherization Assistance Program reduces the heating and cooling costs for low-income Americans by improving the energy efficiency of their homes while ensuring their health and safety. The President is calling on Congress to fund his original request for weatherization.

The FY 2000 appropriation level of $135 million will weatherize 67,340 low-income homes. The supplemental request of $19 million will restore the funding level to the President’s FY 2000 request of $154 million and will weatherize an additional 7,000 low-income homes. To date, 4.7 million homes have been weatherized, however, more than 29 million households are eligible for weatherization services.
This additional funding will also allow DOE to provide the resources for community agencies to employ more advanced technologies that will increase the energy savings for this under-served group. It will also enable more low-income households to moderate the impact of sudden energy commodity price increases of the type recently experienced by fuel oil consumers.

Small Business Administration Loans: SBA will make loans available under existing 7(a) programs to qualified businesses that need funds to weather current problems caused by high oil prices. SBA will rely on a variety of loan programs, such as SBAExpress and CAPLines, which are especially suitable for helping these small businesses get through this period.

The President has asked Congress for a supplemental appropriation of $1 million, enough to support $86 million in loans.
These loans will allow home heating oil dealers, for example, to extend flexible payment terms to their heating oil customers.
Loans will also be available to other types of businesses, such as logging and trucking, which have been affected by the price spike.