Though it helps roughly 6 million Americans a year, the federal government's Low Income Home Energy Assistance Program is facing steep cuts in Washington. Mark Wolfe, executive director of the National Energy Assistance Directors' Association, talks about the program with Farai Chideya.
FARAI CHIDEYA, host: Jamita and Larissa's stories ended happily, thanks in large part to LIHEAP. But the program's own story may not. LIHEAP's annual budget reached $3 billion, but President Bush's new proposed budget slashes energy aid. For more, we turn to Mark Wolfe, executive director of the National Energy Assistance Directors Association.</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): Somebody's electricity is shut off, it's like throwing them back the Dark Ages. They lose their refrigeration. They lose their lights. They might lose access to power. It's a terrible situation. It's the kind of thing you'd expect to see in a Third World country. For example, if you were in India, you wouldn't be shocked to hear that when people can't pay their bills, they're shut off. But this is the United States.</s>FARAI CHIDEYA, host: What does it mean to people who receive LIHEAP? Is it a lifeline for them?</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): Oh, yes. It's extremely essential. We're dealing with fairly poor people, people who have incomes of less than $30,000 a year, many with incomes less than 15,000 a year. And without this assistance, they wouldn't be able to pay their bills. And we know what happens, you know. You get shut off; you get arrearage notices. People don't buy their medicine. They don't buy clothes for their children. People do a lot of things to pay those bills, and this helps to cover that one need.</s>FARAI CHIDEYA, host: What about this winter? There was, in some cases, places were having a fairly mild winter and then recently just got dumped on - snow, ice, sleet. What are people up against this winter?</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): You know, there's increasing demand for energy. You know, China's growing as an economy; India's growing. So there's demand for heating oil not just in the United States, but in other parts of the world. Natural gas is not keeping up with demands, so those prices are going up. And then coal, which was very cheap for a very long time, has gone up by close to 30 percent in the last couple of years. Again, partly because of growth in demand outside the United States.</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): So those are the kinds of things that are pushing up price. Now at the same time, incomes have not kept up with this increase in price. So if a family was earning, say, $15,000 four years ago, maybe this had some very small increase, and so maybe they're earning $16,000. Well, the price of energy went up 40 percent. So instead of costing $600 to heat your home, say, four years ago, saying even in cold state like Maine, now it's maybe $1,200.</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): So you have a whole series of things going on, you know, rising prices. And then on top of that there's one other thing that people are starting to see, which I think is really kind of scaring a lot of people, electricity prices are going up.</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): For the longest time, we had very cheap electricity in the United States. And then we came up with this brilliant idea of choice. Well, it worked in airlines. You had deregulation of the airline industry. And yes, in fact, we got lower prices.</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): In electricity, though, that didn't happen. It was the worst of all worlds. What instead happened is that the agreement between regulators who set prices and set the rules was that utilities were allowed to separate the delivery of services - so the wires, essentially - from the generation of electricity. Saying that, gee, what'll happen is many, many companies will come in to provide electricity and prices will come down.</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): Well, that didn't happen. The agreement was that you'd have fixed pricing for four or five years during what was called a transitional period and then we would have a thousand blossoms bloom. Well, that's come off. The cap on prices is over and prices are going up a lot.</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): We just saw increases in Maryland of close to 70 percent. We saw increases in Illinois of about 15 percent. So for the average consumer out there, they're seeing much higher electricity prices in some states on top of higher natural gas in heating oil prices. And it's almost like a triple whammy. They're getting the worst of all worlds.</s>FARAI CHIDEYA, host: So we spoke with one woman whose family has LIHEAP, and she has money that she owes but she's actually doing just fine in terms of being able to heat her home at the moment. But we spoke with another woman whose energy was completely cut off in the middle of winter because the officials didn't know that she was part of the LIHEAP program.</s>FARAI CHIDEYA, host: How could this happen? And do regulations vary from state-to-state?</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): Well, it's easy to see how this could happen. LIHEAP is not an entitlement program like food stamps where there is national rules in terms of how much food you get and it's supposed to be enough to help you get through the month.</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): LIHEAP is a granted aid program, which means if the money runs out, it's over. And then states supplement that program. So some states like Iowa have very strong shutoff protection rules and a family cannot be shutoff during the winter. Other states have weaker rules and families sometimes fall between the cracks and they get shut off.</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): Now, generally when a family's on LIHEAP, a utility's more willing to work with that family to help them work out a payment plan. But when you think about the millions of families that need help, it's easy to see how families can fall between the cracks. And utilities have become increasingly interested in collecting on their bills than have been in the past, you know?</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): One of the things that has come out of utility deregulation is that companies have gone from more paternalistic, you know, they care about their community, they're willing to, you know, give people more time to work out bills, to becoming much more aggressive and saying, well, you owe the bill, we want the payment.</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): And it all depends on what the state shutoff rules are. And some state rules are weaker than others.</s>FARAI CHIDEYA, host: Well, Mark Wolfe, thank you so much.</s>Mr. MARK WOLFE (Executive Director of the National Energy Assistance Directors Association): Sure. Thank you.</s>FARAI CHIDEYA, host: Mark Wolfe is executive director of the National Energy Assistance Directors Association. He joined us from NPR's Washington, D.C. headquarters.</s>FARAI CHIDEYA, host: Just ahead, Iran tells Western leaders they'll put down their nukes if the West does, too, and internal fighting within the Congressional Hispanic Caucus surfaces.