HARRISBURG, Pa., April 2, 2008 (PRIME NEWSWIRE) -- In a study released today, the Pennsylvania Gas Association (PGA) demonstrates how "inappropriate" the Pennsylvania Department of Public Welfare (DPW) acted in shutting off the LIHEAP program on March 21. The Association is concerned about the exclusion of 62,000 needy households that were slated to receive assistance under DPW's plan, but did not because Pennsylvania abruptly terminated the LIHEAP program. The program was closed despite continued availability of at least $13 million and possibly $22 million in funds.
The study found that 22 states and the District of Columbia offer LIHEAP grants 12 months of the year. Another 22 states close their LIHEAP program in April, May, June, July or August. Five states, including Florida, close their LIHEAP heating program in March, but four of those five wait until the end of March; "A couple of additional weeks of cold winter without assistance can cripple a low-income family's budget," says J. Michael Love, the Association's president and CEO.
The PGA study found that most states run their LIHEAP program until they are out of funds. Pennsylvania is unique in that it routinely carries over large sums of designated federal low income funds until the following year. Love is concerned that "the unused funds the DPW is stashing away will only make it more difficult to seek federal funding next year."
Pennsylvania residents are, as of March 21, without a method to obtain access to federal LIHEAP funding. Ohio residents have until May 31st to apply for LIHEAP. New York residents have until May 15th, and New Jersey and Maryland residents have until April 30, 2008 to apply.
Love adds, "The Gas Association's study concluded that fairness, equity, and compassion should lead DPW to re-open the LIHEAP program to enable applications to be received and paid during the time period of April 15 to April 30, 2008. The State now has the use of $22 million in federal dollars for eight months while its lowest-income consumers, using all energy types, are struggling to pay for that service."
"CARRYING OVER" FUNDS IS TRULY SHORTSIGHTED
Another concern raised by the study shows that while last year DPW carried over $6 million dollars, this year DPW claims it will carry over $13 million dollars. The Gas Association believes DPW is underestimating the amount still available for distribution and contends that more than $22 million remains in state coffers. The study asks "Why would dollars be 'carried over' when the need is so great?" Adds Love, "With LIHEAP grants of between $244 and $500 a customer, this means an incredible number of households are not being served. Typically, utility households must wait for the end of winter to apply for and receive LIHEAP crisis grants. These applications are meant to cover winter energy usage by the low-income energy users. Now, because of DPW's haste, these households have no funds." The approved DPW state plan promised 540,000 LIHEAP grants; yet, the program was stopped at a time when only 478,000 LIHEAP grants had been awarded.
CLOSING LIHEAP IN A PREMATURE FASHION HURTS MANY IN NEED
Pennsylvania's decision to close LIHEAP on March 21, 2008 is the earliest in a number of years. The previous Pennsylvania closing dates were April 16, 2004, April 8, 2005, April 28, 2006 and April 13, 2007. In fact, this year, in response to the rise in heating oil, propane, kerosene and natural gas prices, other states, like the state of New York, have extended their programs to close in mid-May.
The Association's study revealed that nearly every state provides notice to the public, the energy providers, and the legislature prior to the closure of the program. The Pennsylvania DPW acted differently by NOT providing any press release to the public signaling its departure from its common practice of extending the program into April.
BY THE NUMBERS
The Association's study revealed that last year more than 62,000 low income Pennsylvania households received LIHEAP grants during the 3 weeks between the third week in March 2007 and the middle of April 2007. By shutting down the LIHEAP program and yet retaining the funds, 62,000 households who received a LIHEAP grant last year will be denied LIHEAP assistance this year. Due to the way DPW runs the program, low income utility consumers are denied LIHEAP crisis funds during a major portion of the winter, and their eligibility for crisis funds does not begin until February or March.
The State Plan approved by DPW projected that there would be 374,484 LIHEAP cash grants given out this fiscal year and 166,243 LIHEAP crisis grants. This projected a total of 540,727 grants to low-income consumers. DPW's numbers released the day after the program close demonstrate that only 336,191 cash grants were given out as of March 22, 2008, and worse, only 142,408 crisis grants for a grand total of 478,599, meaning more than 62,000 households have lost the opportunity to receive a grant to pay delinquent winter heating bills.
---------------------------------------------------------------------
2007-2008 Actual Payments Budget Projection Through
From DPW EASUM Reports Program End of State DPW Shortfall
Approved Plan
---------------------------------------------------------------------
3/22/08 Cash
Grants 336,191 Cash 374,484 -38,293
---------------------------------------------------------------------
3/22/08 Crisis
Grants 142,408 Crisis 166,243 -23,835
---------------------------------------------------------------------
Total 478,599 Total 540,727 -62,128
---------------------------------------------------------------------
The loss of 23,835 crisis grants refers to households (1) without oil in their tank, (2) without propane in their tank, or (3) facing an immediate lapse of utility service due to a failure to pay even a minimum amount for winter energy usage. Most of these crisis grants would have been awarded in three counties: Allegheny, Philadelphia, and Erie.
Love said, "Having a loss of more than 62,000 grants from the state approved plan creates a disturbing contrast. In two years, Pennsylvania has gone from a state that provided energy assistance to an additional 63,000 households as the state supplemented federal LIHEAP dollars in 2006, to a situation where there are over 100,000 fewer grants distributed than in the 2005-2006 fiscal year." All of these households are people who earn less than 150% of the Federal Poverty Level or $25,755 for a family of three.
COMPARISON OF SELECTED COUNTIES
The DPW decision to reduce the number of LIHEAP grants from either those awarded last year or the stated DPW goal for this year has had differing impacts depending on what county a resident inhabits. For example, the level of grants processed in Philadelphia County year to date at the day the program closed was around 79,000 compared to 116,000 grants provided last year. This 37,000 or 32% reduction could amount to over $14 million dollars that residents of Philadelphia County lost. While pending applications may narrow this number by 1 or 2%, it is clear that there has been an impact on residents.
In Allegheny County, there has been a reduction of over 11,500 or 26% in LIHEAP grants from last year. This change, due to the closing of the LIHEAP program in March rather than April, leads to $4 million less being awarded in grants to the residents of Allegheny County this year compared to last year. In Dauphin County, there are over 1,900 (or 25%) fewer LIHEAP grants resulting in $672,000 fewer dollars being distributed to Dauphin County residents than was given out last year. In Erie County, there are nearly 2,200 (15%) fewer grants given this year than last. This led to a reduction in LIHEAP funding of approximately $860,000 compared to last year, all because of the closing of the plan prior to reaching its stated approved level of assistance. In Lackawanna County there are 800 (8%) fewer applications which could lead to $250,000 fewer dollars provided this year compared to last. In Luzerne County, there were nearly 600 fewer grants, or 3% less, than last year which reflected a potential loss of grant funding of $191,000. Some counties like York received about the same level of grants or more than they received a year ago.
GAS INDUSTRY SOCIAL SAFETY NETS
The Gas Industry continues its record of providing, through its rates, the largest social safety net for its customers. In 2006, through hardship grants, CARES programs, weatherization programs and CAP (discounted rates for payment troubled customers under 150% of the Federal Poverty Level), the gas industry provided assistance of $184 million dollars to its low-income residential customer. In 2007, that level of commitment was raised as more gas customers were helped.
What is striking about that number is that the gas industry's social commitment of its customers is now greater than DPW's commitment of LIHEAP funds for all energy types. Last year, DPW provided 502,000 LIHEAP grants; this year the amount of grants dropped to 478,000, and the surplus carry over was increased.
DIFFICULTY NEXT YEAR
The state received $6 million of additional emergency funds on February 22, 2008 because the Congress and the President were concerned about energy debt being compiled by low-income consumers. Similar additional emerging funds were sent to every state, and those funds were used to draw down the amount owed by low-income consumers. "By carrying over the emergency funds, the state jeopardizes receiving additional emergency funds in the future," Love said. Traditionally, LIHEAP programs reach between 16% and 22% of the eligible consumers. The closing of the program does not alleviate the need.
Editor's Note: Michael Love is available for interviews by calling (717) 901-0603 (Office) or (717) 579-1659 (Cell)