States Anxiously Prepare for Winter Heating Season
The following post is excerpted from the August 2008 issue of the Low-Income Home Energy Assistance Program (LIHEAP), newsletter.
“Before the summer heat waves hit, states had begun planning for the winter of 2008-09 and the heavy energy burdens LIHEAP households will face.
Not only were many states still helping low-income households pay last winter’s bills and cope with disconnections, but they were also hearing that next winter’s heating bills will increase dramatically.
The Energy Information Administration said the average price of natural gas next winter will be 53 percent higher than it was last winter and the cost of home heating oil will increase more than 41 percent from the fourth quarter of 2007 to the fourth quarter of 2008.
As of mid-July, Northeast states were seeing heating oil prices in the $4.50 per gallon range and were worrying how they could assist customers when expected LIHEAP funds won’t even cover a minimum oil delivery of 100 gallons. (According to most predictions, LIHEAP FY 2009 funding will be included in a Continuing Resolution that will likely extend into early 2009 at a preliminary level of $1.98 billion, upon which states will initially base their benefits.)
In prior years, consumers could better deal with winter heating costs by pre-buying their oil in the summer, but as one New Hampshire dealer said, the costs and risks have become prohibitive. With the current average price of heating oil at $4.53 a gallon, and the average use in New Hampshire about 800 gallons each winter, a pre-buy contract can cost as much as $4,000.
This year, newspaper articles from across the Northeast say heating oil dealers aren’t offering the capped plans because they can’t afford the financial outlays. In fact, the livelihood of some has been threatened. It was reported that three companies had failed in Connecticut.”