Buying heating oil now, when it is less expensive, makes sense so it is good news that Maine will receive $7 million in federal funds to allow low-income residents to fill up their oil tanks before cold weather sets in. This not only increases the benefit to Maine residents of the Low Income Home Energy Assistance Program, it makes a politically controversial program more efficient, which even its detractors should support.
The Maine State Housing Authority was planning to begin sending out LIHEAP assistance funds this week, much earlier than usual. Late last winter, Congress approved an additional $1 billion for LIHEAP. Because the funds came late in the heating season, the housing authority decided to save the money to buy oil in the late summer when prices are lower. The additional federal money means individual recipients can now buy more oil to start the heating season.
Last week, the statewide average retail price for home heating oil was $2.48 a gallon. Nationwide, the average price is projected to climb to $2.56 a gallon in early 2007, according to the Energy Information Administration. Long cold snaps, supply disruptions
or other unforeseen events could drive prices higher.
The additional federal funding, which totals $80 million nationally, are left over LIHEAP emergency funds that are distributed at the president’s discretion. If the money was not allocated by Oct. 1, it would have expired and been returned to the U.S. Treasury.
Sen. Susan Collins repeatedly encouraged Robert Portman, the new director of the Office of Management and Budget, to release LIHEAP funds earlier in the season so that heating oil can be bought for the program’s participants when it is less expensive. When the emergency funds were not used, she suggested they be used for a summer fill program.
Last week, she wrote to Mr. Portman that, because heating oil prices frequently rise with the arrival of low temperatures “as hundreds of thousands of households seek to fill their tanks, releasing these funds now would not only provide the most benefit for our neediest citizens, but would also be a more efficient use of funds.”
She and Sen. Olympia Snowe were instrumental in getting an additional $10 million for Maine earlier this year.
Because $80 million is a small fraction of total LIHEAP funding, it is unlikely that critics of the program can successfully argue that future appropriations should be shrunk by that amount. The perception among conservative and some southern lawmakers that LIHEAP is northern welfare will remain, however. Stretching LIHEAP funds, which Maine is also doing by seeking discounts from oil dealers, should help mute criticism
of the program.
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