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Home heating oil will cost Suffolk County residents an additional $287 million this winter, according to estimates released this week by the U.S. Department of Energy.
U.S. Senator Charles Schumer announced the ominous news this week along with a report detailing increases in the entire New York City area—including all of Long Island—and a list of tips New Yorkers can use now to help lower heating expenses when the cold months begin. Mr. Schumer said skyrocketing prices will be some 25 percent more than last year, and New Yorkers with an average heating bill will spend an additional $720 for oil this winter.
“Unless we take immediate action, families across New York State will be paying an arm and a leg to heat their homes this winter,” the senator said, noting, “The energy crisis isn’t just hitting New Yorkers at the pump, but it’s going to hit right at home this winter.”
To combat the problem and prevent families from being literally left in the cold, Mr. Schumer has revealed a plan to expand the federal Low Income Heating Energy Assistance Program, which provides direct aid to help families cover the monumental cost to heat their homes.
Senator Schumer explained that the increases will translate into New York City area residents paying a total of $1.24 billion more than last year to heat their homes—and that number has increased significantly in just the past month, up $200 million from the Energy Department estimate released in May. The price of a barrel of oil has already topped $140, and the senator noted that some analysts predict it could surpass $150 a barrel during the winter. Currently, the price of oil is about 65 percent higher than the same period last year.
Mr. Schumer is not the only New York politician taking steps to help area residents stay warm while continuing to put food on the table. U.S. Representative Tim Bishop held a press event on Monday, July 28, during which he led a tour of a Riverhead home and discussed how proper and improved winterization can save residents money on heating. He was joined by United Way of Long Island CEO Christopher Hahn, that organization’s housing director, Rick Wertheim, and Gordian Raacke of Renewable Energy Long Island. United Way is in the process of making energy-efficient improvements to the home; Mr. Wertheim was slated to be on hand to explain those improvements and how families can weatherize their homes.
According to Mr. Bishop’s office, the congressman is promoting legislation to give homeowners tax breaks for heating oil as well as weatherizing their homes and subsequently saving energy. He’s co-sponsoring a House bill, the Home Energy Affordability Tax Relief, which would provide a $500 tax credit for individuals and families who spend more than $1,500 on home heating costs, including electricity, gas and oil, during the winter season.
Mr. Bishop is also an original co-sponsor of the Middle Class Home Heating Relief Act, which should be introduced by early next week; it would provide a $1,000 refundable tax credit for individuals and $2,000 for families to offset the cost of home heating oil. The temporary two-year tax credit is designed to give middle-class families some relief while Congress works on a long-term energy policy.
The bill also would create a low-interest loan program that would provide up to $5,000, at 1-percent interest, to be used for home weatherization projects. Many houses, particularly older ones, need new windows, new burners, and better insulation in order to be more energy efficient and use less fuel, according to Mr. Bishop.
This fiscal year, Mr. Bishop is also supporting $3.12 billion for LIHEAP as part of a future economic stimulus package or other appropriate bill aimed at giving grants to states, territories and tribes to operate energy assistance programs for low-income households. Created in 1981, the LIHEAP statute authorizes both regular funds—which are allocated to all states—and contingency funds, which are allocated to one or more states at the discretion of the administration. Congress appropriated $1.98 billion in regular LIHEAP funds in fiscal year 2007 and 2008 and contingency funds of approximately $590 million in 2008—up from $181 million in 2007.
LIHEAP falls under the Education and Labor Committee, on which Mr. Bishop sits.
In the 110th Congress, several bills have been introduced that would appropriate additional funds for LIHEAP. Sen. Schumer is part of a bipartisan group of senators who are introducing the Warm in Winter and Cool in Summer Act, which would provide $2.53 billion in additional emergency LIHEAP funding for this winter.
Among his list of tips released Monday, Sen. Schumer suggests locking into a fixed-rate contract for heating oil early to protect against future spikes, but those contracts are slowly falling by the wayside and are rarely offered by local oil companies. Of 11 local oil providers polled, only one, Bangtson-General in Hampton Bays, offered fixed contracts, and that served only as a 12-month promotion, which was at $4.69 per gallon on Tuesday. Other companies, including Indigo Fuel in Montauk, offer COD service, by which customers can pay cash for single deliveries and pay whatever the market bears that day. Fixed contracts “are a sure-fire way to hang yourself,” said one seller, noting the danger of offering fixed rates when prices are so volatile.
Mr. Schumer also suggests buying price caps from fuel companies, which allow consumers to pay according to market trends, yet never more than the capped amount. A representative for Mendenhall Fuel in East Quogue said they offered their cap at $2.99 last year and customers complained, but those who signed on saved $2 per gallon for half of the winter season. The company continues to offer a rate cap this year, but it has risen to $4.99 per gallon, just 30 cents more than the current rate on Tuesday.
Sen. Schumer has also encouraged New York homeowners to buy programmable thermostats to regulate home temperatures when they’re out, pay a nominal fee to have an energy audit done of their home, and visit www.EnergyStar.gov to learn more about reducing costs.
In the release, the senator pointed out that the Energy Information Administration reports U.S. residential electricity prices are also on the rise and will likely increase by 3 percent this year. He noted that states undergoing market restructuring experience more rapid increases as rate caps expire and sharply higher fuel costs are passed to consumers. In some instances, Mr. Schumer said, electricity customers could see rate increases of up to 50 percent.
