July 18, 2008
Homeowners brace for higher fuel oil costs
Proposal would expand HEAP program as companies offer customers payment plans
Joe McIntyre/staff photographer
E&V Energy driver Kevin Bays of Willet makes a delivery of 138 gallons of fuel oil to a home on Gallagher Road in Cortlandville Wednesday morning.
Facing last year’s rise in heating oil prices, Cortland Firefighter Louis Loiselle II decided to sell a rental property he owned in Ithaca last November.
“I don’t know how people do it,” Loiselle said, explaining that he was paying about $600 per tank of heating oil.
With heating oil poised to reach more than $4.50 a gallon this winter, Central New Yorkers can expect to see their energy bills rise dramatically in a matter of months.
Loiselle’s 1,100 square foot, two-bedroom house cost about $1,800 per winter to heat — and with oil prices rising about 77 percent this year, he could have expected to pay more than $3,000 this winter.
“Too many families across upstate New York will be feeling the heat — but not the warmth — this winter,” U.S. Sen. Charles Schumer (D-N.Y.) said this week as he announced his efforts to almost double the federal allocation for the Low-Income Home Energy Assistance Program.
Crude oil rose to $146 per barrel this week, Schumer said.
With its cold winters and high population, Schumer said New York benefits more than any other state from HEAP, and that heating oil will cost New York residents an additional $573 million this winter, with about $36 million of that coming from the Central New York region.
His bill, S-3186, which is co-sponsored by Sen. Bernie Sanders (I-Vt.), would add $2.5 billion to the HEAP national budget, nearly doubling the $2.6 billion already budgeted for the program, Schumer said. It will face a vote in the Senate by early next week.
“Basically, this will double HEAP aid to New York state residents,” he said. More people will need the assistance this year, he said, and the allotment will need to be increased as well.
County Social Services Department director Kristen Monroe said New York structures its HEAP eligibility based on income, percent of income spent on energy, family size, and the presence of a “vulnerable person” — a child less than 6 years old, an adult more than 60 years old or a disabled person — in the home.
Last year, she said, the monthly gross income limit for a family of three to receive HEAP benefits was $3,031. This year, if more money is made available to HEAP, that limit could be raised, making more Cortland-area families eligible for the benefit.
But Monroe said that will not be clear until the state determines benefits and eligibility for this year’s HEAP season in September.
The amount of HEAP assistance provided also depends on what kind of heating a household uses, she said. For a family of three or less, she said, the monthly payment for natural gas was $250. For electricity, that same family would receive $125. But for heating oil, propane, or kerosene, the monthly payout last year was $700.
In total, Monroe said, last year the county paid more than $2.2 million in HEAP assistance to about 3,300 homes.
Residents who are not eligible for state assistance are looking for other ways to cut down on their heating bills.
County Administrator Scott Schrader said the county Legislature has considered looking at lifting the sales tax on fuel oil, but that the benefits of that to customers would be minimal, particularly if companies decide to simply absorb the profits.
Schrader, who heats his home with oil, said he’s going to be burning more wood this winter to offset the increased oil prices.
Calvin Wright, who owns Wright Way Oil on North Homer Avenue, said his customers have expressed concern over the coming heating season.
“They’ve asked me what the price of oil is going to be, and I don’t know,” he said. “And they don’t know how they’re going to come up with the money to pay for it.”
Wright’s company provides heating oil to homes in Cortland County and parts of Tompkins County.
While many oil companies, including Wright Way, have had to drop their “lock-in” payment option due to wildly fluctuating oil prices, Wright and other oil suppliers have established budget programs to help customers spread the high heating costs over a 10- or 12-month period.
James Marshall, the chief operating officer for E&V Energy, said the budget programs can help ease the financial crunch caused by elevated oil prices.
“It’s up to the customer, they can choose to spread payments out over 10 or 12 months,” Marshall said. “It makes it easier to manage those big bills.”
Even with this option, Wright said he is seeing more customers switch to alternative heating sources.
“I’ve had some customers switch to natural gas, and some have switched to coal,” he said.
County residents have in some cases already made moves to avoid paying the increasing fuel oil bills. In some cases, people have started relying more heavily on wood-burning stoves, even those using natural gas.
Loiselle said since November, he has burned hard coal in his home, which last year cost him about $600 for the winter (at about $200 per ton).
“Another good thing is that coal comes from Pennsylvania, so you’re not helping the foreign countries out,” he said.
Schumer acknowledged that adding more money to the HEAP budget will not address the long-term problem created by skyrocketing oil prices.
“We have to become much less dependent on foreign oil,” he said, adding that he is supportive of domestic off-shore oil drilling. “I believe nuclear (energy) should be on the table.”
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