Stretching heating funds will keep more families warm

More than 50,000 families in Maine need help heating their homes every winter. With high fuel costs, too many people are left to make impossible choices between staying warm, buying medicine or going hungry. Every cold day becomes a struggle, and there just aren’t enough resources to meet all the needs.

The ever-increasing price of heating oil only makes matters worse. That’s why this year MaineHousing updated the Low Income Home Energy Assistance Program (LIHEAP) so that more resources will be available to help families stay warm.

There are things that can be done that will stretch the money we have and provide more people with assistance. Oil dealers voluntarily participate in LIHEAP. They give the state a discount off their retail rate, and the state pays them in advance for the oil they will deliver throughout the winter.

It’s a good deal for everyone. Oil dealers get customers and the money (nearly $25 million in LIHEAP payments) up front, and needy families get the oil they need to heat their homes.

This year, MaineHousing made a small change to one of its discount programs. Participating oil dealers agree to take 7 cents off the price of a gallon of oil, up from 3 cents last year.

While the discount increase isn’t enough to hurt the oil dealers, it makes a huge difference for LIHEAP families, providing them with enough oil for an additional week of heating oil.

Some oil dealers, it appears, have lost track of LIHEAP’s purpose. The Maine Oil Dealers Association has attacked the new discount rate. The lobbying group has forgotten that LIHEAP helps families with an average annual income of $13,000 and that more than half are elderly or households with children younger than 2.

In modifying the plan this year, we met with many individual oil companies, listened to them, and brokered a compromise on what was acceptable. We held public hearings. We also surveyed oil dealers and 80 percent of the respondents said they would participate with the new discount. Our final discount plan is significantly less than the discount we initially proposed because of the oil industry input. As one participating oil dealer put it: “MaineHousing compromised. What’s the problem?”

MaineHousing has a long and productive relationship with Maine’s oil dealers. We care about their businesses and value their service to Maine’s most vulnerable people. We could obtain the lowest oil prices by putting the LIHEAP contract out to bid and selecting the lowest bidders to serve the entire state, but that would limit competition to five or 10 of the state’s largest oil dealers. We chose not to do that and instead offer the program to any dealer who wants to participate and provide the discount. Our dealer surveys and the LIHEAP contracts that already have come in demonstrate that most of our 400 LIHEAP oil dealers will continue to participate in LIHEAP.

No customers need worry about receiving the LIHEAP oil they need to stay warm.

MaineHousing must balance the need to help families stay warm with the reality that their needs outstrip available resources. Our decision to increase the discount rate puts more oil in furnaces, keeps more families warm, and stretches taxpayer money.

Dale McCormick is the director of MaineHousing.