AUGUSTA – A legislative panel learned Thursday the Baldacci administration is preparing for fuel shortages and considering emergency state allocations to help prop up programs that provide relief from rising heating oil costs.

The Legislature’s Appropriations Committee also was informed of shortfalls within one of the state’s most popular heating programs that provides financial assistance to Maine’s poorest residents.

Dale McCormick, director of the Maine State Housing Authority, asked lawmakers to consider an emergency funding request of $10.2 million from the state’s General Fund to bolster insufficient federal revenues.

“This is not going to be a good year for Maine citizens who depend on the Low Income Heating and Energy Assistance Program, otherwise known as LIHEAP, to ease the financial burden of buying fuel,” she said.

In a related development, Gov. John E. Baldacci joined a group of 28 governors Thursday who signed a letter to congressional appropriators in Washington in support of a request for an additional $1.276 billion of emergency funding for LIHEAP. Baldacci emphasized that many families and businesses in Maine are facing difficult times as fuel prices rise. He said the cost of heating oil this year is nearly 60 percent higher than last winter, and a surge of applications is expected for the heating assistance.

“Congress must recognize that covering dramatic increases in natural gas and heating oil prices will pose an immense challenge for our citizens as winter arrives,” the governors said in the letter. “Therefore, we encourage you to give strong consideration to the above requests.”

McCormick said Maine’s LIHEAP program served 46,450 families in 2004 compared to 45,000 families the previous year. The fuel assistance benefit averaged $478 in 2004 compared to $440 in 2003. Immediate emergency fuel benefits were extended in 2004 to 4,475 people under the program and averaged $232 per household. McCormick said the average household income for the LIHEAP participants in 2004 was $12,062.

Because of skyrocketing fuel costs and anticipated increased demand for benefits under the program, McCormick estimated that last year’s $478 average benefit will drop to $420 without state intervention.

“I would urge you to consider a state appropriation for [$10.2 million] and what that would do upfront is to allow us to increase the base benefit,” she said. “There is a chance that the federal government will allocate emergency appropriations to LIHEAP. If they do, that can be taken into consideration as well.”

Jeff Green of the state Department of Health and Human Services said increased fuel costs were seriously jeopardizing two programs designed to get the department’s clients to appointments. Volunteers who help transport the poor to and from medical visits, and friends and family who also assist state clients, are finding they no longer can honor their obligations.

“We’re in a situation now where some providers told me this morning that they are literally down to zero volunteers who are willing to provide transportation services – they have no volunteers left that are providing that service,” Green said.

Anticipating increased costs as state clients turn to taxis to provide the service once offered by volunteers, Green said the administration is proposing a rule change to increase volunteers’ reimbursement per mile from 30 cents to 44 cents. Friends and family reimbursement would increase from 15 cents to 22 cents a mile.

“So compared to the cost of doing nothing, the cost of making the rate changes that we’re talking about here will be approximately $1 million,” Green said. “We plan to go ahead with this and we will [seek a] supplementary appropriation when the Legislature convenes.”

Upon hearing from volunteers in Aroostook County that the Department of Health and Human Services was paying to transport children taken by the state for visits with their parents while telling those who need transportation for kidney dialysis or cancer radiation treatments that resources are drying up, Rep. Jeremy Fischer, D-Presque Isle, suggested the department should start prioritizing.

“Is it time to say that we’re not going to do as much visitation stuff?” Fischer asked. “We’re not delivering kids halfway across the state. The parents ought to be responsible for coming to visit their kids, no matter where the courts have put them, instead of just spending more money.”

Green said Fischer’s observations represented an “important policy question” that would “require further discussion” by the department.

Beth Nagusky, director of Maine’s Office of Energy Independence and Security, said her agency was having tremendous success with state programs such as Operation Keep Maine Warm, which is expected to deliver winter weatherization services to 3,000 homes.

Still, with the statewide average cost of heating oil hovering at $2.49 a gallon and severely diminished refining capacity as a result of Hurricane Katrina, Nagusky said it was necessary for her agency to join forces with the state Department of Transportation and the Maine Public Utilities Commission to monitor all available fuel supplies.

“I don’t want to have to overstate the case, but I do have to tell you that there are concerns about fuel supplies this winter – particularly natural gas, and because natural gas fuels 40 percent of electricity generation, [it] has raised concerns about electricity supplies,” she said.