Lawmakers face a shortfall in an essential fuel assistance program

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A legislative committee is scrambling to find ways to help Vermonters pay for the skyrocketing cost of heating fuel. The energy crisis affects both personal pocketbooks and the state budget. Lawmakers learned on Thursday that state government faces a potential $19 million shortfall in an essential fuel assistance program.

VPR’s John Dillon reports.

 

(Dillon) About 60 percent of Vermont residents heat their homes with fuel oil. Prices have almost doubled over the last year – and they keep going up.

(Matt Cota) "I can tell you in the past hour, the market has moved 10 cents. Heating oil has gone up 10 cents..."

(Dillon) Matt Cota represents Vermont fuel companies. He blames market speculation for much of the increase.

(Cota) "Most people in our industry, and many outside, believe we are in a speculative bubble, that it is worse than the sub-prime mortgage, that it will pop. And when it does, prices will go down faster than it went up. However, the problem is, we don’t have a crystal ball to determine when that will happen."

(Dillon) But if prices don’t drop by the time cold weather arrives, the state faces a serious funding shortfall in its fuel assistance program.

Vermont uses a combination of federal and state dollars to help low income people stay warm. The program aims to cover 60 percent of the heating bill. But Steve Dale, the commissioner of Children and Families, says the state may be $19 million short this winter.

(Steve Dale) "What we’re facing this winter is going to be unprecedented. And we’ve been involved in lots of conversations over the last couple of weeks as we’re trying to figure out what’s available. Frankly… substantial infusion is needed from the federal government to assist with this."

(Dillon) Vermont’s congressional delegation had a glimmer of good news. The Senate will soon consider a bill that would direct an additional $20 million dollars in heating assistance funds to the state.

Vermont also has about $60 million set aside in "rainy day" accounts to handle budget emergencies. But the Douglas Administration is reluctant to tap those funds for the heating programs. Neale Lunderville is the incoming state administration secretary. He says the administration first wants to see what the federal government will pay.

(Lunderville) "The administration and the Congressional delegation are all working together on this, to make that push, and make it strong. Then we have to look at contingencies if that doesn’t happen and we are going to explore all contingencies."

(Dillon) The Legislature’s Joint Fiscal Committee may also step in to help Vermont’s retail fuel companies. Matt Cota of the Fuel Dealers Association said oil dealers are being squeezed along with their customers.

Cota said the dealers must purchase their product in advance. But because their own customers are sometimes late in paying bills, the companies will have trouble coming up with cash or a line of credit to buy the fuel.

(Cota) "If dealers can’t get their lines of credit extended from their wholesaler or their bank during these months, they will face delivery problems."

(Dillon) Cota asked the state to step in to guarantee the lines of credit for fuel oil dealers. Senator Susan Bartlett – who chairs the appropriations committee – was receptive to the idea. She said the dealers are usually small, local businesses that often serve customers who are late paying their bills.

(Bartlett) "So it is time for we as a state to step up to the plate and give them the kind of support that they have offered low income Vermonters forever."

(Dillon) Bartlett said she’d also consider tapping the rainy day funds to address the fuel crisis. But she said the money should not be used to make up for the federal funding shortfall.

She said the state could instead use the money to help middle-income Vermonters make their homes more fuel efficient.

For VPR News, I’m John Dillon in Montpelier.

 

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