Rhode Island winters are always cold, but this year's high costs of heating oil, coupled with high statewide unemployment, have added an extra chill. Federal and state officials have allocated additional funding recently to low-income families to cover energy costs.
The state's average cost of heating oil per gallon spiked in early January, after three weeks of moderately stable prices, according to data from the Office of Energy Resources Web site. The price of heating oil increased by 28 cents per gallon the first two weeks of January, an increase of over 10 percent.
Though prices have steadily decreased in the past three weeks — and are now equivalent to rates from late November — increased costs still hit Rhode Island families hard, according to data released Friday by the Office of Energy Resources.
The spike was not limited to Rhode Island, but had a particularly strong effect on the Ocean State due to the high proportion of residents that rely on oil for heat. About 42 percent of Rhode Island homes rely on heating oil, compared to a national average of just 9 percent, according to the office.
Additional federal funding for low-income energy assistance programs will help cover state residents struggling to pay heating oil, natural gas or electric bills this winter. This federal funding is not a response to high oil heating costs, but will provide additional support to Rhode Island families.
Federal funds hit home
The federal government released additional contingency funding for the Low Income Home Energy Assistance Program two weeks ago, allocating roughly $4 million to Rhode Island, according to a press release from the office of Sen. Jack Reed, D-R.I. This money comes in addition to the $29.6 million of program funding allocated to the state for the current fiscal year, according to the press release.
The federal program, which funds state assistance to help low-income families pay their energy bills, offers qualifying Rhode Island residents monetary support during the winter season for their gas, oil or electricity payments, said Andrew Kostrzewa '08, a project manager at the energy office. The general award amount is $675, but awards are not guaranteed to applicants since they are dependent on the program's total funds, he said. In Rhode Island, a four-person household with a combined annual income of less than $49,945 qualifies for assistance from the program.
Participation in the program is 10 percent higher this year than last year at the same time, according to data provided by Kostrzewa.
Though he attributed the increase in applications to the energy program in part to a "colder January," Kostrzewa said the "number-one factor is unemployment."
Two years ago, the state unemployment rate during the winter season was 6.2 percent, according to data from the Office of Energy Resources. Last year, that number jumped to 9.8 percent, and this year it stands at nearly 13 percent. Residents who have been forced to live off savings during the recession are now running short on long-term finances, Kostrzewa said.
While over 33,000 families participated in the program last year, Kostrzewa estimated that 60,000 that have not applied could qualify for assistance. He cited pride as one potential reason eligible residents might not apply.
But some residents simply don't know about the program, said Maggie Rogers P'12, board member of the George Wiley Center, a statewide community organizing group. "There's not enough public education," she said.
"We've got people calling (the George Wiley Center) every day asking where they can get assistance for oil," Rogers said.
A short-term rise in the cost of heating oil is also unlikely to change LIHEAP application numbers because those residents who know about the program will have already applied, Kostrzewa said. Rather, it is primarily middle-class families paying for their own oil who are affected by changes in heating oil costs, he said.
But even with these options for low-income energy cost assistance, the heat is still off in some local homes. The "number of shutoffs has been terrible" for those who rely on natural gas and electric heat, Rogers said.
LIHEAP-eligible residents are legally protected from shut-offs of natural gas or electricity from Nov.1 to April 15. But come April 15, it's "what we call open season" on families who are unable to pay off the debt they have accumulated, Rogers said.
"There are all kinds of public health and safety ramifications to (the) lack of utilities," she said. She cited the use of candles and unsafe extension cords running from neighboring homes as examples of measures that people turn to when the heat is off.
"What we really need to do is rein in rate increases," she said. "The system is clearly broken."
Though heating oil costs may make headlines, gas and electric rates — unaffected by oil costs — have been rising for years, Rogers said. On Tuesday, the Public Utilities Commission will announce a possible increase in electricity rates, she said.
Low-income families who spend a greater proportion of their income on heating and utilities, are hit hardest by rising energy costs, said Arthur Handy, D-Dist. 18, who represents Cranston.
The average Rhode Island resident spends about 4 percent of household income on utilities, whereas "people with lower income can be spending potentially 50 percent of their income" on such costs, Handy said.
He is currently proposing a bill to fix home energy burdens at 6 to 8 percent of the combined income of qualifying residents.
Other energy assistance programs exist to help low-income residents. Narragansett Electric, a local division of the National Grid energy company, provides a discount rate for low-income residents. For those who do not qualify for LIHEAP funding but still require assistance, the Rhode Island Good Neighbor Energy Fund provides a limited number of one-time $500 grants, according to its Web site.