New York's Senator
CHARLES E. SCHUMER

FOR IMMEDIATE RELEASE February 4, 2001


SCHUMER CALLS ON FEDERAL GOVERNMENT TO INCREASE LIHEAP AID BY $600 MILLION TO DEAL WITH HOME HEATING EMERGENCY

New Data Shows Natural Gas Costs Even Higher than Expected

Schumer Calls for Increased Investment in Exploration and Drilling; Calls for Construction of Gas Pipeline From Alaska to Continental United States; Outlines Steps Homeowners Can Take To Bring Down Costs

Standing with New York seniors who are struggling to pay sky high natural gas bills, US Senator Charles E. Schumer today released projections showing alarming increases in natural gas costs this winter and outlined a series of immediate and long-term steps necessary to reduce natural gas prices and replenish inventories, including increasing emergency LIHEAP (Low Income Home Energy Assistance Program) aid, renewing investment in drilling and exploration for natural gas, and encouraging homeowners to take steps that would reduce their natural gas home heating bills.

"New data shows that in New York City, Long Island and Westchester, natural gas bills are 40% higher than last year, and prices will rise even more if we suffer through another prolonged cold snap," said Schumer. "These price hikes are breaking the bank for seniors and families on tight budgets. No one should have to choose between heating and eating. But that's exactly the choice some New Yorkers face."

Nearly 2,000,000 New York City, Long Island and Westchester residents use natural gas to heat their homes. Last winter, these customers paid, on average, over $700 to heat their homes, with New York City natural gas customers paying $720, Long Island customers paying $689, and Westchester customers paying $717.

According to new estimates obtained from the New York State Public Service Commission (PSC), these costs will likely jump 40%. New York City natural gas customers will shell out $1,007 for the winter and spring; Long Island customers will pay $988; Westchester customers will pay $980 - increases of 40%, 43%, and 37%, respectively, over last year.

Schumer called on Congress to include an additional $600 million in LIHEAP funds in the emergency supplemental budget to help seniors and families pay their heating bills this winter and spring, and to replenish state LIHEAP coffers depleted by an unusually cold winter. Many New Yorkers eligible for LIHEAP did not apply for funding in the fall, but soon found themselves unable to pay their home heating bills. Since New York State has already spent its emergency funding allocated for this winter, more emergency funding is needed to cover the tens of thousands of New Yorkers who need assistance.
Schumer also called for an increase in LIHEAP's eligibility income requirement from 60% of the state's median income to 75% of the median income. New York's benefit program is structured so that higher benefits are provided to households that spend larger percentages of their total income on energy costs, contain a vulnerable individual, and have the lowest income. Vulnerable individuals are defined as children under the age of 8, adults aged 60 or older, or the disabled.

"We face two problems," Schumer said. "Many people who qualify for LIHEAP did not apply in the fall and now desperately need help. Many other New Yorkers need LIHEAP assistance but cannot receive it because the eligibility requirements are too stringent. If you can't afford to heat your home in the dead of winter and you earn 75% of the state median income and have large home heating bills, you should still be able to receive help. And as the economy slows down, raising the eligibility level is all the more important."

LIHEAP served 354,622 residents in New York City, 26,914 residents on Long Island and 12,080 residents in Westchester last year. While enrollment figures for this year are not yet available, overall participation is expected to be much higher.

Schumer called on President George W. Bush to boost total LIHEAP funding from $1.4 billion to $2 billion in the budget he submits to Congress next month. "Cold winters should not automatically equal months of hardship for millions of New Yorkers and tens of millions of Americans," Schumer said.

Schumer said that while increasing LIHEAP funds is an important short-term solution, the nation's natural gas problems demand a long-term, comprehensive plan of attack. He pointed out that this winter's high natural gas costs are part of an escalating national energy shortage, caused in part because the global economic boom has led demand for natural gas to outstrip supply. Because natural gas prices have remained low until recently, suppliers lacked the financial incentive to drill and increase their inventories. As a result, according to the US Department of Energy's Energy Information Administration, as of January 26, natural gas stocks totaled 1,282 billion cubic feet (bcf), which is 31% below the 5-year average of 1,856 bcf.

"The energy markets are all inter-related," said Schumer. "This past summer, when suppliers should have been building their natural gas inventories to meet winter heating demands, they were forced to respond to increased demand for natural gas from electricity generating plants. This diminished their inventories to today's record lows, forcing homeowners to pay higher prices."

Schumer outlined a series of measures gas companies can take to restore supplies and bring down prices, including:

1. Boosting investment in new environmentally-friendly drilling technologies and increasing exploration of federally-owned natural gas reserves, such as Alaska's Natural Petroleum Reserve and North Slope, areas which are known to contain large quantities of natural gas. This would also protect Alaska's Arctic National Wildlife Refuge (ANWR).
2. Constructing a gas pipeline that runs from Alaska to the continental United States.
3. Increasing total pipeline capacity, which could be accomplished by new pipeline construction, improvements to existing infrastructure and streamlining the federal application process for the construction of new interstate pipelines.

Bobbie Sackman, Director of Public Policy, Council of Senior Centers and Services of New York City, Inc., and seniors who are paying sky high heating bills joined Schumer at the press conference.

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