THE CLINTON-GORE ADMINISTRATION: WORKING TO MITIGATE
THE EFFECTS OF HIGH HOME HEATING OIL PRICES
February 28, 2000
Today, in a meeting with the National Governors Association, President
Clinton will emphasize that his supplemental appropriation FY2000
request to Congress includes important assistance for consumers and
businesses affected by unexpectedly high home heating oil and diesel
fuel prices. The request includes $620 million in additional funds for
the Low Income Housing Energy Assistance Program, the Dept. of Energy's
(DOE) Weatherization Assistance Program, and the Small Business
Administration (SBA) to help provide SBA loans to those affected by high
home heating oil and diesel fuel prices. In addition, President Clinton
will also urge the Governors to adjust LIHEAP eligibility standards to
assist as many low and moderate income families as possible under
federal law and emphasize that Federal law permits states to use
Temporary Assistance for Needy Families (TANF) funds to provide
emergency heating assistance to very low income families with children.
THE SUPPLEMENTAL APPROPRIATION REQUEST INCLUDES:
$600 million to replenish the Low Income Housing Energy Assistance
Program (LIHEAP) fund which was depleted by recent disbursements of $295
$19 million in additional funds for the DOE Weatherization
Assistance Programs. These funds will meet the President's original
request for weatherization and help increase the energy efficiency of
homes, thereby reducing homeowners' energy burden and cost.
$1 million for SBA program to support $86 million in loans for
small businesses affected by rising oil prices. This will allow home
heating oil dealers, for example, to extend flexible payment terms to
THIS REQUEST BUILDS ON EARLIER ADMINISTRATION STEPS IN RESPONSE TO THE
INCREASE IN HOME HEATING OIL PRICES: In addition to the steps announced
today, the Administration has already taken aggressive steps to expedite
the delivery of home heating oil to markets in the Northeast and to help
mitigate the effects of the unexpected price spike.
Recently, the President:
Released a total of $295 million of LIHEAP emergency funds. The
funds are being distributed so as to give priority to states most
affected by increases in heating oil prices.
Encouraged states, which administer the LIHEAP program, to adjust
their eligibility standards to assist as many low and moderate income
families as possible under federal law.
Directed the Secretary of Energy to conduct a 60-day study of
diversifying energy supplies in the Northeast, including converting
factories and other major users from oil to other fuels, in order to
free up oil supplies for use in heating homes.
Directed the Small Business Administration to ensure the
availability of Small Business Administration loans for heating oil
distributors who need a better cash flow in order to buy heating oil and
make deliveries to their customers.
In addition, the Department of Energy has:
Recently hosted a home heating oil summit in Boston with refiners
and major distributors of home heating oil, elected officials, analysts,
and consumers to discuss the reasons for the problems in home heating
oil markets, and how the government and industry can work together to
better meet the needs of consumers in the Northeast and New England now
and in the future.
Requested that refiners defer routine maintenance turnarounds,
subject to safety requirements, so that heating oil production remains
at full throttle until the home heating oil problem has passed.
Urged eligible utilities to switch from heating oil to natural gas.
Created a DOE/Coast Guard Task Force for Product Movement, to
prioritize heating oil shipments at terminals when necessary, clear
rivers as needed, deploy Coast Guard vessels and other resources to make
certain there are no shipping or loading delays.
Initiated a DOE's Energy Information Administration and Office of
Policy study on the impact of interruptible contracts on home heating
oil supply. Such contracts direct gas customers to switch from gas to
other fuels when the temperature drops below certain levels, to reduce
peak demand for gas.
Announced plans to re-establish an Energy Emergency Office at the
Energy Department to enable the federal government to work more closely
with the states to anticipate, plan and respond in a more immediate and
coordinated way when energy crises occur, including heating oil/gasoline
shortages, power outages, or pipeline emergencies.
HOW THESE PROPOSED ADDITIONAL FUNDS WILL HELP
Low Income Home Energy Assistance Program (LIHEAP): LIHEAP helps
eligible families pay the costs of heating and insulating their homes in
the winter, and cooling their homes in the summer. States determine
eligibility and benefit levels based on federal law. Approximately 4
million low-income households receive assistance each year. As part of
LIHEAP, the Congress sets aside emergency funds ($300 million in FY
2000) to help States meet urgent home heating or cooling needs. The
President determines when an emergency warrants the release of these
funds, and directs the Secretary of Health and Human Services to release
the funds to the States.
On January 25th, the President directed Secretary Shalala to
release $45 million to eleven states that were hit hardest by increases
in home heating fuel prices this winter.
On February 10th, in response to further increases in the price of
home heating oil, the President directed Secretary Shalala to release an
additional $130 million.
On February 16th, the President directed Secretary Shalala to
release the $120 million remaining in the LIHEAP Emergency Fund, in
response to fuel prices that kept climbing -- by more than 80 percent
compared to last year in some states -- and causing significant hardship
for low-income families throughout the country.
DOE Weatherization Assistance Program: DOE's Weatherization
Assistance Program reduces the heating and cooling costs for low-income
Americans by improving the energy efficiency of their homes while
ensuring their health and safety. The President is calling on Congress
to fund his original request for weatherization.
The FY 2000 appropriation level of $135 million will weatherize
67,340 low-income homes. The supplemental request of $19 million will
restore the funding level to the President's FY 2000 request of $154
million and will weatherize an additional 7,000 low-income homes. To
date, 4.7 million homes have been weatherized, however, more than 29
million households are eligible for weatherization services.
This additional funding will also allow DOE to provide the
resources for community agencies to employ more advanced technologies
that will increase the energy savings for this under-served group. It
will also enable more low-income households to moderate the impact of
sudden energy commodity price increases of the type recently experienced
by fuel oil consumers.
Small Business Administration Loans: SBA will make loans available
under existing 7(a) programs to qualified businesses that need funds to
weather current problems caused by high oil prices. SBA will rely on a
variety of loan programs, such as SBAExpress and CAPLines, which are
especially suitable for helping these small businesses get through this
The President has asked Congress for a supplemental appropriation
of $1 million, enough to support $86 million in loans.
These loans will allow home heating oil dealers, for example, to
extend flexible payment terms to their heating oil customers.
Loans will also be available to other types of businesses, such as
logging and trucking, which have been affected by the price spike.