Maryland Newsline

• Wynn Calls for State Gas Tax Relief

ANNAPOLIS - Spiraling fuel costs could hit low-income Marylanders hard this winter. State officials who distribute energy assistance to the poor worry that they will be swamped with increased requests for aid at a time when it is still uncertain exactly how much money will be available.

Mary Lou Kueffer, director of Maryland's Office of Home Energy Programs, said she expects demand for aid to rise with prices for heating oil and natural gas. Last year about 83,000 people applied for assistance through the federally funded Maryland Energy Assistance Program, an increase of 5 percent from 2003.

With prices for heating oil up almost a dollar a gallon and a predicted double-digit percentage increase in natural gas prices, Kueffer said her program would have difficulty meeting this year's demand with last year's budget.

"It is a concern whether we'll be able to make it this year," Kueffer said. "If we have a particularly harsh winter, [demand] will increase even more."

Kueffer said officials will not know until the end of October how much money will be available in Maryland for the program. She expects it to be roughly equal to the $29 million received last winter -- but is concerned it may even be less.

"Until Congress votes, we don't know for sure," she said. "We're waiting and watching what Congress is doing very expectantly."

Congress has yet to approve a final budget for the national program, but the proposed budget is slightly less than the $2.2 billion available nationwide last year, according to figures from the Department of Health and Human Services.

David Fox, who heads the Campaign for Home Energy Assistance, a Washington-based advocacy group composed of charities and energy providers, said the proposed funding isn't enough.

Fox said only 15 percent of eligible families applied for help last year nationwide, but he expects that number to grow as more households find themselves unable to cope with heating bills.

"Those dollar amounts are not going to stretch as far," Fox said. "Do we have a problem? Yes indeed."

Fox said that low-income households have traditionally done everything they can to pay their energy bills, up to and including skipping meals and going without medicine, but often "there comes a time when whatever they're doing is not enough, and people who never applied for it are going to be in a position where they have to."

In Maryland, Kueffer said, people who are financially eligible are often reluctant to sign up for help, but she expects that "a lot of these people will be pushed over the edge" by prices this year.

Eligibility for assistance in Maryland is based on monthly income-- for a Maryland family of four, the maximum income is $2,419, and $1,196 for a single person.

Pete Horrigan, president of the Mid Atlantic Petroleum Dealers Association, whose members provide 90 percent of Maryland's heating oil, says prices will definitely be up this season, but he did not anticipate any supply problems.

"The product will be available," Horrigan said, "and if they're purchasing from a legitimate dealer, that dealer is doing everything they can to keep the price down."

Horrigan said that while not much of Maryland's oil comes from the Gulf regions affected by Hurricane Katrina, the storm's effect on the world energy market would have an effect on local prices.

Horrigan said dealers were concerned that higher prices could lead to more unpaid bills. Most dealers give customers 30 days to pay, but their suppliers often need to be paid in 10, leading to a crunch for dealers who need to refill their stocks.

Dave Costello, an economist for the federal Energy Information Administration, said prices are expected to continue rising, and were already on the way up last month, the most recent period for which figures were available.

Since the hurricane, however, "last month is ancient history," Costello said. "It's just a different world."

Fox said: "Quite frankly, the only saving grace is if we have a mild winter. It's a difficult situation where all we can do is keep our fingers crossed."