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26–546 PDF 2006

S. HRG. 109–340

KEEPING THE ELDERLY WARM: HELP FOR

SENIORS AND HIGH HOME HEATING COSTS

FIELD HEARING

BEFORE THE

SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

WEST MIFFLIN, PA

JANUARY 6, 2006

Serial No. 109–16

Printed for the use of the Special Committee on Aging

(

SPECIAL COMMITTEE ON AGING 

GORDON SMITH, Oregon, Chairman 

RICHARD SHELBY, Alabama 

SUSAN COLLINS, Maine 

JAMES M. TALENT, Missouri 

ELIZABETH DOLE, North Carolina 

MEL MARTINEZ, Florida 

LARRY E. CRAIG, Idaho 

RICK SANTORUM, Pennsylvania 

CONRAD BURNS, Montana 

LAMAR ALEXANDER, Tennessee 

JIM DEMINT, South Carolina 

HERB KOHL, Wisconsin 

JAMES M. JEFFORDS, Vermont 

RUSSELL D. FEINGOLD, Wisconsin 

RON WYDEN, Oregon 

BLANCHE L. LINCOLN, Arkansas 

EVAN BAYH, Indiana 

THOMAS R. CARPER, Delaware 

BILL NELSON, Florida 

HILLARY RODHAM CLINTON, New York 

CATHERINE FINLEY, Staff Director 

JULIE COHEN, Ranking Member Staff Director 

(II) 

C O N T E N T S 

Page 

Opening Statement of Senator Rick Santorum ..................................................... 1

PANEL I 

Wade F. Horn, Ph.D., assistant secretary for Children and Families, U.S. 

Department of Health and Human Services, Washington, DC ........................ 2

Margot Anderson, director of the Office of Energy Markets and End Use, 

Energy Information Administration, Washington, DC ..................................... 12

PANEL II 

William F. Hecht, chairman and CEO, PPL Corporation, Allentown, PA .......... 34

Jimmy Staton, senior vice president-Operations Dominion Delivery ................. 49

Fred Griesbach, state director, American Association of Retired Persons .......... 64

Major Deborah R. Sedlar, program secretary, Salvation Army Divisional 

Headquarters, Pittsburgh, PA ............................................................................. 75

Estelle Richman, secretary of Public Welfare, Commonwealth of Pennsylvania, Harrisburg, PA .......................................................................................... 83

APPENDIX 

Prepared Statement of Senator Rick Santorum .................................................... 97

(III) 

(1)

KEEPING THE ELDERLY WARM: HELP FOR 

SENIORS AND HIGH HOME HEATING COSTS 

FRIDAY, JANUARY 6, 2006 

U.S. SENATE, SPECIAL COMMITTEE ON AGING, West Mifflin, PA. 

The committee met, pursuant to notice, at 9:30 a.m., at the West 

Mifflin Municipal Center, 3000 Lebanon Church Road, West Mifflin, PA, Hon. Rick Santorum, presiding. 

OPENING STATEMENT OF SENATOR RICK SANTORUM 

Senator SANTORUM. Good morning, and let me welcome all of 

those in attendance here this morning, and in particular let me 

thank our witnesses from Washington and across the Commonwealth for coming here this morning to talk about an important 

issue, an issue that actually has attracted a lot of attention over 

the last several months as we have been experiencing, as you 

know, a dramatic spike in energy prices and its impact. As we look 

out on a cold, wintry day here in Pittsburgh, we could not have 

picked a better setting for this hearing. 

The effects of these high prices has really caused a lot of debate 

and discussion in Washington about what we can do to help those 

particularly on fixed income and lower incomes to meet their energy needs, to keep themselves and their families warm through 

these cold winter months here in the northern climes of the United 

States. The Aging Committee has been looking at this. This is an 

issue that disproportionately affect seniors and one that—depending on who you believe, we have the second or third largest per 

capita population of seniors here in Pennsylvania—this is an issue 

that dramatically affects Pennsylvania. The Aging Committee held 

a hearing about this last summer when there was concern at that 

time with natural gas prices in particular spiking, that there would 

be a crisis this winter with respect to keeping people warm through 

these winter months, and then with the events of Hurricane 

Katrina things were exacerbated even more. We are now faced with 

a problem of greater proportion than we anticipated. The Congress 

has acted to some degree. We did provide some additional funding 

for the Low Income Energy Assistance Program in the appropriations process. We attempted to provide more relief in what is called 

the reconciliation bill, which was a package that was put together 

to actually reduce spending overall, but included in that spending 

reduction bill that came out of conference was a provision to provide more money for low-income energy assistance, $2 billion immediately and long-term that was going to provide a stable source 

2

of funding for low-income energy assistance, tying lease revenue 

from the sale of leases in the North Slope of Alaska for oil exploration. A percentage of that would have gone in a mandatory 

way—in other words, it would have been tied to providing increased money for low-income energy assistance. Unfortunately, 

the provision was defeated in a procedural move on the floor of the 

U.S. Senate, and as a result all of the benefits that attach to 

ANWR were stripped out, including the low-income energy assistance money and the long-term dedication of funding for that program. 

There may be an opportunity, and I certainly hope that there 

will be one next year, to resurrect that and hopefully get a stable 

source. Right now there is no source of funding for the low-income 

program. It is simply appropriated money out of the general fund. 

To have a source of revenue for money on top of what we already 

put forward I think would be a very beneficial thing and something 

that certainly I will work toward. 

You did not come here to listen to me, although hopefully somewhat to listen to a few things I had to say, but I came here to listen to our panelists who are here, and I want to thank all of our 

panelists, but in particular let me thank our representatives from 

the Federal Government here. Dr. Wade Horn, who is someone who 

I work with probably—I won’t say maybe as much as anybody in 

the Administration, but certainly work with a lot in the Administration, in his role in helping those who are less fortunate among 

us, and we have worked together on a variety of things with respect to intercity programs that Wade has been involved in, trying 

to strengthen the family, the President’s faith-based initiatives, a 

whole laundry list of things that Wade has been active on and involved. He is, in my opinion, one of the bright lights of the Administration. I want to thank you, Wade, for being here this morning. 

Your official title—and I am not real good with Administration titles—but it is assistant secretary for Administration and for Children and Families over at HHS. So Wade, thank you for being 

here. 

Margot Anderson, her title is the director of the Office of Energy 

Markets and End-Use at the Energy Information Administration, 

and I want to thank you for coming and sharing your thoughts 

with us, and we can proceed. 

Dr. Horn, thank you for being here. 

STATEMENT OF WADE F. HORN, PH.D., ASSISTANT SECRETARY 

FOR CHILDREN AND FAMILIES, U.S. DEPARTMENT OF 

HEALTH AND HUMAN SERVICES, WASHINGTON, DC 

Mr. HORN. Thank you very much, Senator Santorum, for inviting 

me. I particularly appreciate the kind words that you just said. If 

my parents were here——

Senator SANTORUM. They are not? I thought they were here. 

Mr. HORN [continuing]. My father would appreciate those words 

and my mother would have believed them. I appreciate the opportunity to appear before you today to talk about the Low Income 

Home Energy Assistance Program and how it provides assistance 

to millions of Americans in helping them meet the cost of home energy and heating. The Low Income Home Energy Assistance ProVerDate 0ct 09 2002 14:31 Apr 04, 2006 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 H:\DOCS\26546.TXT SAGING1 PsN: JOYCE
3

gram, known as LIHEAP, grew out of a series of emergency programs generated by the energy crisis of the late 1970’s. Today 

LIHEAP continues to help ensure that low-income families and individuals have adequate home energy through a Federal-State 

partnership to provide States with the flexibility they need to design the best program approaches to meet consumer needs. 

For the past several years, almost 5 million households per year 

received LIHEAP assistance to help get them through the winter 

months. The program also provides cooling assistance to about 

400,000 households and weatherization assistance to about 90,000 

more. The receipt of a LIHEAP benefit not only means a warm 

home, or sometimes a cool one, but also often means the difference 

between a family staying in their home or having to move, with all 

the disruption that that entails. Likewise a LIHEAP benefit can 

help make it possible for the elderly to stay in their homes. The 

recently enacted Labor-HHS appropriations bill provides almost $2 

billion for the LIHEAP block grant program, and an additional 

$181 million for emergency contingency funds for fiscal year 2006. 

To date Pennsylvania has requested and received $95.1 million of 

their block grant funds for this year. 

I am also very pleased to announce that yesterday we released $100 million of the emergency funds made available in the LaborHHS appropriations Act. Pennsylvania’s share of that release was 

nearly $7.7 million. A total of $101.5 million in emergency funds 

remain available for this fiscal year. 

LIHEAP block grant funds are allocated to States based on a formula using the State’s low-income population, home energy expenditures by low-income households, and weather conditions substantially weighted toward cold weather. The LIHEAP grantees 

may set their eligibility level to address families with incomes as 

low as 110 percent of their poverty level, as high as the greater of 

150 percent of the poverty level, or 60 percent of State median income. Pennsylvania has set its eligibility rate for its heating assistance program at 135 percent of poverty in fiscal year 2005. Legislative changes in 1994 made it possible for grantees to look less at 

absolute income levels and more at need. In setting eligibility levels, States may, for example, give priority to households that have 

greater energy need because of age, for example, or health, and we, 

in fact, encourage States to target their programs to the more vulnerable low-income individuals in their communities, particularly 

households with elderly persons or with young children. 

In March 2004, the Census Bureau current population survey 

data showed that 35 percent of households receiving LIHEAP heating assistance had at least one person 60 years of age or older; 47 

percent had at least one person with a disability, and 22 percent 

included at least one child 5 years of age or younger. However, the 

data shows that the Mid-Atlantic, East North Central and West 

North Central areas of the country reported that the elderly are 

being served by the LIHEAP program at a lower rate than the national level. To address this issue, over the last 2 years the Administration has conducted an outreach program with LIHEAP brochures in both English and Spanish to help inform communities 

about energy assistance available to low-income older Americans. 

So far we have distributed more than 67,000 brochures to organizaVerDate 0ct 09 2002 14:31 Apr 04, 2006 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 H:\DOCS\26546.TXT SAGING1 PsN: JOYCE
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tions across the country, with 53 percent of the brochures targeted 

to community-based organizations serving the elderly. 

In Pennsylvania, the Department of Public Welfare works with 

area agencies for seniors across the State to get the word out about 

LIHEAP with outreach and application materials. In fiscal year 

2004, which is the most recent year for which we have data available, DPW here in Pennsylvania authorized regular LIHEAP heating assistance for approximately 105,000 households with an elderly member over the age of 60, representing 31 percent of all heating payments made by the State. Pennsylvania also provided crisis 

benefits for such incidents as impending shutoffs to more than 

23,000 elderly households, representing 23 percent of all crisis payments. 

We are continually impressed by the resourcefulness of State and 

local agencies in using LIHEAP funds to provide meaningful help 

to families facing a home energy crisis. These workers in the front 

lines generally resolve or avert crises by telephoning the energy 

vendor who maintains or restores services based on an assurance 

that LIHEAP benefits will be paid, and this, of course, is important 

during these cold winter months to help ensure that the elderly, in 

particular, stay safe and healthy. 

In conclusion, I want to assure the Committee that this Administration is committed to the LIHEAP program. We at the Department of Health and Human Services are working actively with our 

State partners to ensure that LIHEAP funds are targeted to America’s most needy families, including our elderly citizens, so they can 

maintain a healthy temperature in their homes. 

Thank you again for the opportunity to appear before you, and 

I particularly thank you for your steadfast leadership and support 

for the LIHEAP program. 

[The prepared statement of Mr. Horn follows:]

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Senator SANTORUM. Thank you very much, Wade. 

Margot. 

STATEMENT OF MARGOT ANDERSON, DIRECTOR OF THE OFFICE OF ENERGY MARKETS AND END USE, ENERGY INFORMATION ADMINISTRATION, WASHINGTON, DC 

Ms. ANDERSON. Thank you, and I, too, appreciate the opportunity 

to appear before you today to discuss the outlook for energy prices 

and heating expenditures and to examine their impact on the elderly population. The Energy Information Administration is an 

independent statistical and analytic agency within the Department 

of Energy. We are charged with providing objective, timely and relevant data analysis and projections for the Congress, the Administration and the public. We do not take positions on policy issues, 

but we do produce data and analysis forecasts that are intended to 

assist policymakers in their deliberations. As it is for all Americans, direct energy expenditures for the elderly, defined in this testimony as those age 65 and over, is a combination of energy cost 

for running the household, such as heating and cooling, and energy 

cost for transportation fuel. There are also indirect expenditures 

embodied within the energy component of the costs for goods and 

services, but this testimony focuses only on the direct costs. The 

two major determinants for energy expenditures for households are 

energy prices and consumption levels. Energy prices are determined predominantly by world events, at least in the case of oil 

prices, and by domestic trends in the case of natural gas and electricity prices. In the short run, household energy consumption levels are determined largely as a function of weather. In the longer 

run, household consumption patterns are influenced by technology 

structure and behavioral trends as homes are constructed or remodeled and energy-consuming equipment is purchased. 

Consumption levels for transportation are a function of vehicle 

choice, driving behavior and other behavioral issues. 

In 2005, U.S. spot prices of crude oil and natural gas increased 

an average of 36 and 47 percent, respectively, and total U.S. energy 

demand remained flat despite a healthy economic growth rate of 

more than 3 percent. Prices for crude oil, petroleum products and 

natural gas are projected to remain high through 2006 due to continuing tight international supplies and the slow recovery from 

hurricane-induced supply losses. 

I will note that all of the numbers that I am talking about today 

are based on our December 2005 forecast. Next week, on the 10th 

of January, we will release another monthly forecast that will have 

slightly revised numbers. We are not expecting full hurricane recovery until late winter or early spring of 2006, so this will continue to impact the markets. For example, the price of West Texas 

Intermediate crude Oil, which is our benchmark crude oil price, is 

projected to average $57 per barrel in 2005 and $63 per barrel in 

2006. Regular gasoline prices are projected to average $2.27 when 

we look at all of 2005, and $2.41 in 2006. Natural gas prices are 

expected to average almost $9.00 per thousand cubic feet in 2005 

when we compile all the numbers for the year, and about $9.30 in 

2006. Retail natural gas prices are always higher than the spot 

prices. 

13

Winter residential space heating expenditures in the winter of 

2005 and 2006 are projected to be higher relative to the winter of 

2004 and 2005, mostly because of these higher energy prices. On 

average, households heating primarily with natural gas, which is 

what you would find used in this region, will likely spend $281 or 

38 percent more this winter than last winter. Houses heating primarily with heating oil, which is used predominantly in the Northeast, can expect to pay on average $255 or 21 percent more relative 

to last winter. Households heating primarily with propane—that is 

typically used in the Midwest—can expect to pay on average $167 

more. These projections are based on weather forecasts by the National Weather Service. Should colder weather prevail, expenditures could be significantly higher. These averages provide a broad 

guide to changes from last winter, but fuel expenditures are highly 

dependent on local weather conditions, the size and efficiency of individual homes and their heating equipment and thermostat settings. The effects of energy expenditures on the elderly can be difficult to isolate because the elderly live in a variety of housing arrangements. Many live alone. Others live with elderly or nonelderly 

partners. Some live in extended households and have primary responsibility for energy costs, while others live in the care of younger household members and may have only partial or no responsibility for energy costs. We base these numbers on a household residential survey that we conduct every 4 years. These numbers are 

based on a 2001 residential consumption survey, and we will be updating that next year when the new numbers come in from the 

2005 survey. 

Our data show that households consisting solely of elderly members use about as much energy as other households, after accounting for the number of household members. The elderly use less energy per household, but that is because they tend to live alone and 

live in smaller homes. The data show that floor of about $1,000 for 

energy expenditures as of 2001. Converting that to 2005 prices, 

that floor is about $1,200 even for the least energy consuming 

household. 

Regardless of living arrangements, the elderly still have transportation requirements. In contrast to household expenditures, the 

relative gap between transportation use by the elderly and by other 

types of households is quite large, even after considering differences in household composition. The elderly drive quite a bit less 

than members of younger households, although when there are two 

or more elderly persons in a totally elderly household, they tend to 

have two cars and drive almost as many miles as a one-person elderly household. Hence, that would translate into higher gasoline 

purchases. 

The amount of energy expenditures is meaningful in itself, but 

it is also useful to examine those expenditures relative to household income. Once again, there appears to be a floor of about 

$1,000 per household as of 2001 for household energy expenditures 

regardless of income. Applying the generally higher 2005 prices to 

2001 consumption levels results in higher expenditures. The burden falls most heavily on the lowest income households, which are 

relatively more prevalent for the elderly than for the rest of the 

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come, an annual energy bill exceeding $1,100 has a much greater 

impact than a $2,000 annual energy bill for a household with 

greater than $50,000 annual income. To the extent energy consumption for both household and transportation use is different 

now than it was in 2001, the annual energy bill will be different, 

but adding household and transportation energy costs together, 

many low-income households, including low-income elderly, are 

now spending 10 to 20 percent of their income on energy, which is 

relatively higher than those that are in the higher income categories. 

This concludes my testimony, Mr. Chairman, and I would be glad 

to answer any questions you have. 

[The prepared statement of Ms. Anderson follows.]

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Senator SANTORUM. Thank you very much, Margot. I appreciate 

that information. 

Doctor, a couple of questions. You mentioned in your testimony 

that you noticed that the percentage of seniors here in this region 

using LIHEAP was lower and that you were starting an ad campaign. First off, did you do an analysis as to why seniors are not 

using the program here in Pennsylvania or in the Northeast as 

much as other areas of the country? 

Mr. HORN. As you know, under the LIHEAP program States 

have enormous flexibility to target their funds. The Federal Government encourages States to target those funds to the most vulnerable populations, but it is still a decision that is left up to the 

States. We do not have the ability to mandate that the States target certain populations, but we do have the ability to advocate the 

issue. Pennsylvania is not substantially below the national average, but as a region the North-Central, East Coast area tends to 

be lower than the national average, and that is why, as I have 

mentioned, we have been publishing brochures in both English and 

Spanish and distributing them through the Eldercare Locator Network that is administered through the U.S. Administration on 

Aging, and working in partnership with a variety of different community organizations to get this information into the hands of the 

elderly. However, this remains a decision that is made at the State 

level and at the local level through community action agencies. It 

is not something we can mandate that they actually provide services to a particular population. 

Senator SANTORUM. So you are suggesting that the reason it is 

lower is more likely a result of State policy and local policy than 

it is the result of any lack of awareness on the part of seniors? 

Mr. HORN. It is certainly not a result of inadequate Federal policy in the sense that Federal policy allows States flexibility to target these funds in the ways that makes sense to State governments. Again Pennsylvania is not substantially below the national 

average and we have been working with the State to distribute brochures, and do more effective outreach to the elderly. My guess is 

that part of the problem is related to the elderly who may live in 

remote rural areas in Pennsylvania and may not have access to the 

kind of information that would allow them to enroll into the program, but I think with more effective State outreach we could 

reach those elderly households. 

Senator SANTORUM. Do you have any sense of the impact of the 

campaign that you have engaged in, as to whether it is having an 

impact at all? 

Mr. HORN. It is too early to tell because it is a relatively new 

campaign for us, but we hope to be able to report back in the next 

year or so as to the impact. 

Senator SANTORUM. The Energy Policy Act, as you know, requires you to report to Congress on how LIHEAP could be used 

more effectively to prevent loss of life, and I know you are fulfilling 

that requirement right now. Do you have any thoughts on what 

you have learned up to this point? 

Mr. HORN. As you know, under the act we are required to consult 

and we are, in fact, consulting with all 50 States and the District 

of Columbia around this issue. We have been working in consultaVerDate 0ct 09 2002 14:31 Apr 04, 2006 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 H:\DOCS\26546.TXT SAGING1 PsN: JOYCE
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tion with the National Energy Assistance Directors Association. We 

also have been in contact with the Centers for Disease Control 

(CDC) to bring their expertise in the health arena to bear on this 

question. We also have been identifying best practices through our 

LIHEAP Clearinghouse. Although we do not have any hard information yet to share with you, we are on track as required by the 

law to provide a report to Congress by August 2006, so you can invite me back in August 2006 to talk to you about it. 

Senator SANTORUM. No one will be thinking about cold weather 

in August 2006 around here, let me assure you. Let me ask a question on the release of the emergency funds. You have suggested you 

released—and I think you said Pennsylvania got—I think it was $7 

million from that release. Is that money released the same—per 

the formula that is for traditional LIHEAP or is there a separate 

allocation? 

Mr. HORN. Under the law, the contingency fund can be released 

by the President at his discretion, and there are various ways that 

one can release contingency funds. Generally we take into account 

factors such as high energy costs, temperatures and so forth. 

Senator SANTORUM. On a State-by-State basis? 

Mr. HORN. Yes, and you do not have to distribute the contingency fund monies per a formula. You can use those monies to target crisis needs, and that is the purpose of the contingency fund. 

In fact, for example, after Hurricane Katrina hit the Gulf Coast we 

released about $27 million to those States for energy-related needs 

because of the impact of the hurricane. Yesterday we released $100 

million in contingency funds particularly targeted to cold weather 

States because of the high energy prices and the cold weather. 

Senator SANTORUM. Very good. 

Margot, a couple of questions. Obviously, the concern about the 

cost of natural gas here in Pennsylvania, as you mentioned, that 

is a primary source of heat for most of our residents here, although 

obviously electricity and home heating oil is another factor, but primarily we are a natural gas State and we have seen a dramatic 

rise in the cost of natural gas, yet there is testimony all over the 

lot about what is causing that, and some have suggested that demand has been fairly flat, yet prices continue to go up. Any 

thoughts on what is the dynamic there if demand is really not 

going up very much? I think you said demand was flat. Why are 

we seeing dramatic increases in price? 

Ms. ANDERSON. Well, demand has only been relatively flat for 

total energy for the last year or 18 months. I think if you look back 

over the course of the 1990’s and 2001, 2002 and 2003, there were 

rather dramatic increases in natural gas demand as a lot of power 

plants converted to coal and to natural gas, and as new natural gas 

plants were constructed, and a lot of this has put pressure on supplies. Supplies have not kept up, quite frankly, with demand. 

One of the issues you have with natural gas is, of course, the 

market is mostly just a North American market and primarily just 

a U.S. market, unlike petroleum, which is a global market. So 

prices are determined by our ability to either produce for ourselves 

or purchase from Canada, from Mexico, LNG from Trinidad, et 

cetera, and so in a more constrained market where supply has not 

kept pace with demand you will see these long-term pressures on 

33

prices. If you look at supply growth you will see that that has not 

kept pace with the large increases, in demand particularly due to 

the conversion from coal to natural gas over the last 10 years. 

Senator SANTORUM. So you do not think there is anything going 

on beyond just a pure supply and demand issue here? I mean, some 

have suggested that the markets are manipulating the prices and 

what is going on in the futures market could be a little bit more 

transparent than it is. You do not have any thoughts on that? 

Ms. ANDERSON. No, I do not. 

Senator SANTORUM. OK. You did mention that prices are going 

up. The question I had is are you seeing any impact on those prices 

being elevated on demand? You say demand has flattened out. Is 

that because of the increase in price or have you seen any conservation efforts? I mean, what is going on that is affecting demand 

right now, particularly in the natural gas area? 

Ms. ANDERSON. I think a lot of the fourth-quarter effects were 

coming from what we would call demand destruction due to the 

hurricanes, where there were simply just not a lot of consumers in 

the Gulf area using natural gas. There likely has been some price 

effect. It is very difficult to quantify in the short term. Sometimes 

those price effects will not show up till a quarter or two after the 

impact because it is just difficult to get the data and do the analysis, but we certainly suspect there is conservation going on. There 

is that impact due to price. There is probably some fuel switching, 

a little bit here and there, which is probably having an effect. We 

are surprised that we have not seen as much demand effect due to 

high prices either in the crude sector or the natural gas sector. I 

think everyone, every economist, would have expected demand to 

have shown more dramatic decreases than we have actually seen 

in the data. Part of that is attributed to a rather robust economy, 

so that while we have had these high energy prices, the underlying 

economy has been pretty strong, which, as economists would say, 

would translate into something called an income effect. If your income is relatively stable or increasing, as it is for some Americans, 

that would swamp a price effect. 

Over the last 10 or 20 years Americans are devoting relatively 

less of their income to energy expenditures as we become much 

more efficient in our energy use. So all of these factors are affecting 

why we are not seeing the kind of price effects that you might expect as gasoline prices got as high as they did in the last quarter 

of 2005. 

Senator SANTORUM. Do you have that information as to what 

Americans now are spending on energy as a percentage of their 

overall income versus what it was 10, 20 years ago, and—well, why 

don’t you share that and then we can sort of make conclusions from 

that? 

Ms. ANDERSON. Total energy expenditures as a percent of Gross 

Domestic Product (GDP) declined from 8.1 percent in 1990 to 6.0 

percent in 1999 (expenditures and GDP are measured in 2004 dollars). In 2000, total energy expenditures as a percent of real GDP 

increased to 7.0 percent then fell in 2001 to 6.8 percent and to 6.2 

percent in 2002. Since 2003, energy expenditures as a percent of 

real GDP have been increasing, rising to 8.5 percent in 2005. The 

recent increase is due in large part to increasing energy prices. 

34

Senator SANTORUM. What is happening in the residential market? Have you seen, because of the spike in natural gas here in 

Pennsylvania or in places that use a lot of natural gas, any move 

to converting to other forms of energy as a result of these high 

prices? 

Ms. ANDERSON. Well, we have not really seen that from our data 

at this point, but that is not likely to show up for months because 

the surveys just cannot keep pace with behaviors, but there are 

technology constraints to being able to do that. Not everyone can 

just switch to one fuel source versus another. 

Senator SANTORUM. What about manufacturers? They probably 

have a little bit more. 

Ms. ANDERSON. A little bit more, but sometimes they are locked 

into a single source. So we are trying to get better information with 

our survey instruments to try and figure out the flexibility that 

manufacturers, the industrial, commercial sectors, might have in 

their capability to fuel switch, but some of that capability just simply is not there and they are stuck with the fuel source that they 

are relying on primarily. 

Senator SANTORUM. Very good. Thank you both very much for 

your testimony. I appreciate it. 

If the second panel could come up, I would appreciate that. I do 

not think Secretary Richman is here, right? I do not see her, so we 

may have to proceed without her. I hate to do that, but she would 

have been our first witness. 

Secretary Estelle Richman, secretary of DPW, is scheduled to be 

here. We have not heard whether—she is probably just delayed, 

probably due to the weather, so we will move then to Bill Hecht, 

who is the chairman and CEO of PPL. 

Bill, I appreciate you making the trek across the State from Allentown to be with us here today and look forward to your testimony. Thank you, Bill. 

STATEMENT OF WILLIAM F. HECHT, CHAIRMAN AND CEO, PPL 

CORPORATION, ALLENTOWN, PA 

Mr. HECHT. Thank you. I am pleased to be here, Senator. PPL 

is a Pennsylvania-based company with headquarters in Allentown. 

Through our subsidiaries, we serve about five million customers 

worldwide and generate and sell electricity at wholesale in markets 

in Pennsylvania and in the western U.S. In the U.S., PPL serves 

about 1.3 million electricity customers and 75,000 natural gas customers in Pennsylvania, primarily in the eastern and central parts 

of our State. Our utility operations have earned honors for customer service. PPL Electric Utilities, for example, has won more 

awards for customer satisfaction from JD Power Associates than 

any other utility in the U.S. Today’s hearing addresses a topic of 

particular importance to PPL, the effect of higher costs for home 

heating on the elderly. In the areas of Pennsylvania that we serve, 

about 28 percent of the residents are age 65 or older. This is more 

than double the national average. The increases in home heating 

bills have been primarily driven by oil and natural gas prices. Electricity rates in Pennsylvania have been essentially stable for many 

years because of the way the State has deregulated the electricity 

35

industry. PPL’s electricity rates, for example, have increased less 

than 10 percent since 2002. 

Despite greater stability of electric rates, PPL recognizes that 

high oil and gas prices may leave some customers, especially the 

elderly that are on fixed incomes, less able to afford electric service. 

PPL’s utility companies offer many payment programs, payment 

options and notification services to help customers pay their bills 

and maintain service. Some are specifically designed for the elderly, others are available to all customers with a limited ability to 

pay, but often benefit the elderly. In 2006, PPL Electric Utilities 

will spend more than $26 million on programs for low-income customers in Pennsylvania. Over the last 2 years, PPL has increased 

funding for the programs by about 25 percent to meet growing need 

for customer assistance. One program, Operation Help, was one of 

the first utility-sponsored funds in the Nation for heating assistance when electric utilities created it in 1983. The program is funded voluntarily by PPL and by tax-deductible contributions from our 

customers and employees. Operation Help offers cash grants to 

low-income customers to help them meet their heating bills regardless of fuel type, including not only those that use electricity for 

space heating, but also those who use oil, gas, propane or other 

fuels that may not be supplied by PPL. 

Social service agencies administer the program on behalf of PPL and decide who receives the grants, which averaged about $225 for 

some 3,500 recipients last year. This winter, PPL is contributing 

$700,000 to Operation Help, and that is an increase of about 40 

percent over last winter. PPL Gas Utilities, one of Pennsylvania’s 

smaller gas companies, provides assistance for gas bill payments 

through the Operation Share program, which is similarly funded by 

voluntary contributions. Because of natural gas prices, PPL is tripling its Operation Share contribution this winter. In addition to 

outright grants, elderly customers who meet income guidelines may 

qualify for reduced bills through PPL’s Customer Assistance Programs, or CAP. PPL expects to provide more than $90 million in 

CAP assistance in 2006 and has increased funding by more than 

20 percent in the last 2 years. 

PPL Electric Utilities also provides home energy audits and energy conservation measures to low-income customers through what 

we call our Winter Relief Assistance Program, or WRAP. Customers with electric home heating have saved an average of 10 percent on their electric bills after receiving these services. In the last 

2 years, some 700 elderly homeowners have benefited from that 

program. While eligibility for payment assistance and weatherization programs is based on income, we have other services that are 

developed specifically for the needs of the elderly. For example, 

PPL will not shut off service for a customer having trouble paying 

their electric bill during the winter if we are made aware that 

there is an elderly resident in the home. 

We also offer a program specifically for the elderly that extends 

the due date of bills to coincide with the arrival of pension or Social 

Security checks, and elderly customers may designate a third party 

to receive late payment or shut off notices as an extra measure of 

protection. Our budget billing program, although not specifically 

created for the elderly, offers equal monthly payments so that those 

36

on fixed incomes can more effectively plan their budgets. We remain alert and sensitive to the needs of the elderly and all customers so we can adjust and expand the programs as needed. PPL 

works productively with community-based social services agencies 

in all 46 counties that we serve. We train our employees to recognize problems and to refer the elderly to social service organizations which can open doors to a wide range of services and other 

sources of assistance through area agencies on aging. Simply put, 

the elderly that may have difficulty meeting their energy bill payments may also have other assistance needs, and we can direct 

them. 

In closing, Senator, I would like to acknowledge your support and 

the support of Senator Specter for increased LIHEAP funding. Last 

winter, some 24,000 PPL customers received $6.3 million in 

LIHEAP assistance. One-third of those customers were elderly. 

Last, I want to thank you and the Special Committee on Aging for 

convening this hearing in Pennsylvania to focus on the needs of the 

elderly in our State and across the country. 

[The prepared statement of Mr. Hecht follows.]

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Senator SANTORUM. Thank you, Bill. I appreciate that. 

Next we would like to hear from Jimmy Staton, who is the senior 

vice president of Operations for Dominion Delivery. 

Thank you very much, Jimmy, for being here. 

STATEMENT OF JIMMY STATON, SENIOR VICE PRESIDENTOPERATIONS, DOMINION DELIVERY 

Mr. STATON. Thank you. Good morning, Senator. As you indicated, I’m the Senior Vice President of Operations for Dominion 

Delivery, which is one of the major business units of Dominion Resources, Inc. Our natural gas distribution company in Pennsylvania 

is Dominion Peoples, which is based in Pittsburgh and serves more 

than 350,000 homes and businesses in 16 counties. All of us at Dominion Peoples appreciate the opportunity to offer comments this 

morning on the rising price of natural gas for home heating and 

its impact on customers who are elderly or have limited incomes. 

We are always eager to get the word out about the programs available to assist those customers, and we hope the hearing will result 

in more people seeking that help. 

The price of natural gas Dominion Peoples buys to serve its customers has increased sharply this winter. This has occurred despite 

our best efforts to hold down our procurement costs. These measures include buying about 40 percent of our supply locally from 

western Pennsylvania production, a step that hold downs our 

transportation expenses. We are also fortunate to have a significant natural gas storage capacity in Pennsylvania. This also helps 

to mitigate our price swings. Despite these measures, we estimate 

the average residential bill will increase by more than 40 percent 

from January 2005 to January 2006. Under Pennsylvania Public 

Utility Commission regulations, Dominion Peoples earns no profit 

from this purchased gas. The cost of the fuel is simply passed along 

to customers on a dollar-for-dollar basis. Additionally, our fuel costs 

are periodically audited by the PUC. 

We are very sensitive to the impact these prices can have on our 

customers with low or fixed incomes, especially the elderly. We estimate that about 20 percent of our residential customers are age 

62 or older. We offer and support of a variety of programs to help 

our low-income customers. These programs include the CAP program, or Customer Assistance Program, a special payment plan for 

low-income customers having trouble paying their bills. We recently asked the PUC for permission to expand the number of participants significantly from the currently about 10,000 customers 

served by this program. 

We also have a weatherization initiative, the Low Income Usage 

Reduction Program, or LIURP, which provides home energy efficiency improvements and audits. We also offer the Customer Assistance Referral and Evaluation Services, or CARES, program that 

matches customers with special needs such as serious medical conditions with appropriate assistance programs. The Dollar Energy 

Fund, which is an independent nonprofit organization that offers 

last resort assistance regardless of fuel source to persons on low or 

fixed incomes. Our customers make contributions to help fund the 

program and Dominion Peoples provides matching contributions 

and covers administrative costs. We also offer a Budget Billing proVerDate 0ct 09 2002 14:31 Apr 04, 2006 Jkt 000000 PO 00000 Frm 00053 Fmt 6633 Sfmt 6633 H:\DOCS\26546.TXT SAGING1 PsN: JOYCE
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gram that helps customers manage their energy bills by allowing 

them to make level monthly payments. This program allows them 

to spread their winter heating costs throughout the year. Budget 

Billing is open to all customers who are not in arrears on their 

bills. We also provide special services for persons with needs due 

to age or health, including medical certification, to delay service 

termination or to restore service for patients with severe health 

issues. We also offer the Gatekeeper program that enables our company personnel to recognize danger signals in the elderly and make 

sure those individuals are getting the help that they need. We also 

have third-party notification, helping individuals who may have 

trouble handling their bills by notifying a designated third-party 

such as a relative, neighbor or a friend of an impending service termination. We also offer the provision of easy-to-read thermostats 

and large-print bills to customers with impaired vision and interaction with hearing-impaired customers through telecommunications devices for the deaf. Additionally, we help put our customers in touch with government programs that can help pay energy bills, such as the Low Income Home Energy Assistance Program you have been such a great supporter of. 

Important as these programs are, they are not long-term solutions and many of them are approaching their limits of effectiveness. Expansion of some of them could result in higher customer 

rates, and it is unclear how much additional money is going to be 

available from government sources. Pennsylvania has certainly 

done its part, with Governor Rendell recently signing a bill committing up to $20 million in additional funds for fuel aid. But Congress 

so far has failed to expand LIHEAP funding for fiscal 2006. We 

hope Congress will make additional appropriations this month before many States start running out of fuel assistance money. Conservation can help, too, and we are seeing some new interest in energy efficiency due to the recent price increases. Ultimately, however, the best way to help all of our customers, including those who 

are elderly or on limited incomes, is to produce more natural gas. 

Within existing limits, producers are trying to do just that. Our sister company, Dominion Exploration and Production, drilled more 

than 100 new gas wells in Pennsylvania last year, producing an additional six million cubic feet per day. Dominion plans to increase 

its drilling activity in Pennsylvania by 15 percent in 2006, but to 

ensure adequate supplies we, as a Nation, must take additional 

steps to meet that goal. We must take steps to increase offshore 

natural gas production, especially from the Outer Continental 

Shelf. Congress should pass legislation allowing the States to opt 

out of the decades-old moratoria that have blocked exploration and 

production in these waters. There is no economical or environmental justification for maintaining such blanket drilling bans. 

We should also open more Federal lands for natural gas exploration and production, including selected portions of the Arctic National Wildlife Refuge in Alaska, as well as other Federal properties. On Federal lands already open to drilling, the permitting 

process must be improved and accelerated. The Domestic Petroleum Council estimates that clearing the current permitting backlog could increase Rocky Mountain Area natural gas reserves by 

several trillion cubic feet. We should continue to support construcVerDate 0ct 09 2002 14:31 Apr 04, 2006 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 H:\DOCS\26546.TXT SAGING1 PsN: JOYCE
51

tion of a new pipeline from Alaska to provide North Slope gas to 

the lower 48 States, and finally we should continue to promote development of facilities to bring additional supplies of liquefied natural gas, or LNG, into the United States. If we are truly serious 

about helping customers in need, our national policies must take 

a variety of steps to bring more natural gas to market. Action is 

long overdue. 

I thank you for the opportunity to address the Committee. I will 

be happy to answer any questions you have. 

[The prepared statement of Mr. Staton follows:]

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Senator SANTORUM. Thank you, Mr. Staton. I appreciate that. 

Now it is my pleasure to introduce Fred Griesbach, who is the 

state director of the AARP. Thank you for being here to testify. 

STATEMENT OF FRED GRIESBACH, STATE DIRECTOR, 

AMERICAN ASSOCIATION OF RETIRED PERSONS 

Mr. GRIESBACH. Thank you for inviting us. This is a critical 

issue, and I cannot tell you how much we appreciate your focus on 

it. Yes, I really want to make four points here today. One is stating 

the obvious: Energy prices are going up. We heard earlier testimony—gas heat, $281 more this winter; oil heat, $255 more nationally. The reality is it looks to us in Pennsylvania like it may be 

worse here than nationally. PGW bills are estimated by the PUC 

to be going up over $400 this year and will be on average this 

year—average—projected to be $2,046. That is $400 more than it 

was last year, and frankly this is not just a blip. In 2002–2003, the 

average gas bill in PGW was $870, so we are looking at a very dramatic increase in Pennsylvania over a relatively short period of 

time, and in the western part of the State we heard 40 percent increases. These are increases that are $400 for some people. So 

whatever is going on nationally, it looks, at least to people—frankly, most of the folks who open up their bills, they do not know a 

BTU from—all they see is that bottom line and say, ‘‘Oh, my God.’’ 

This is a crisis for folks in Pennsylvania, and that is the first 

point, that this is not just a blip. This has been going on, and it 

just seems to be getting worse. The second point is that the elderly 

are more vulnerable on this. Elderly people generally spend a 

greater percentage of their income on energy than younger people. 

That is a fact. However, low-income elderly are paying an even 

greater share. The average low-income elderly person is paying 14, 

15 percent of their income for energy, and at least a quarter of elderly people are paying—and this is nationally—are paying 20 percent of their income for energy. So this is a big deal to low-income 

people, generally. It is a very big deal to low-income elderly people. 

It is not just that it is a greater percent. They are changing behavior to accommodate these energies, and some of those changes 

in behavior are very, very dangerous changes. We have surveyed—

AARP nationally surveyed folks, elderly people, low income; 60 percent of them had or already were trying these things. They are 

turning the thermostat down in the winter. They are turning the 

thermostat up in the summer. So they are living in houses that are 

colder perhaps than they should be, or warmer than they should 

be, depending on the season. But additionally—and this gets kind 

of scary—about 12 percent of them were limiting or doing without 

food in order to pay their energy bills, 11 percent limiting or doing 

without medical treatment to deal with their energy bills, 10 percent limiting or doing without prescription drugs to deal with their 

energy bills. We surveyed our members in Pennsylvania, and this 

is before this new kind of wave of increase, and frankly one out of 

seven, over a third, said they were having trouble paying their 

bills, and one out of seven were either skipping meals or skipping 

prescription drugs or not doing something else that was important 

for their health in order to pay their energy bills. So clearly it is 

not just that they are paying more; they are making choices alVerDate 0ct 09 2002 14:31 Apr 04, 2006 Jkt 000000 PO 00000 Frm 00068 Fmt 6633 Sfmt 6633 H:\DOCS\26546.TXT SAGING1 PsN: JOYCE
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ready that are not necessarily good choices for their long-term 

health. 

The third point is, in fact, LIHEAP, and it is very interesting—

I mean, about a third of the folks in Pennsylvania who are on 

LIHEAP are elderly people, but the problem is—and as you asked 

earlier, ‘‘OK, well, should there be a greater percentage of elderly 

people on LIHEAP?’’ There should be more elderly people on 

LIHEAP. That is absolutely true, but the reality is we are not serving everybody who is eligible, and really the one thing we do not 

want to do is start to force choices where, in order to put elderly 

people on LIHEAP we have to take somebody else who is equally 

deserving and equally needy off LIHEAP. When we talk about the 

increase in the bills this winter, that increase is bigger than the 

LIHEAP grant. So if we give everybody that we gave a grant to 

last year this year, they will still be worse off than they were last 

year in terms of their overall energy bill. So the LIHEAP issue, 

which—I mean, the State put nearly $25 million—for the first time 

Pennsylvania has put money into the LIHEAP program. I would 

love to say that AARP could take great credit for that, but the reality is I just think it is partly advocacy, but it is partly the fact 

that they are looking and saying, ‘‘You know what? We are in deep 

trouble here and we have to do something,’’ and on that level you 

have been a champion of LIHEAP, and we need a champion. When 

this session reconvenes, we need LIHEAP assistance and we need 

somebody to make sure it happens, and I am urging you and your 

colleagues—I know we do not have a defined source for it, but we 

have a very defined need for it, and we have to meet that need. 

If we do not, a bad situation in Pennsylvania and nationally is 

going to be worse. 

Finally—and you have nothing to do with this, but I am hoping 

maybe you could help—Pennsylvania has about 20,000 households 

right now who have no heat, has about another 15,000 who have 

no electricity, and it has about 4,000—these estimates are from the 

PUC—who are heating with things like space heaters or kerosene, 

which are very dangerous. We allow people to be shut off in the 

winter if their income is above a certain level. Given what we are 

looking at, at prices, when you get the chance perhaps and are 

speaking to your colleagues in Pennsylvania, we may need to 

relook at that, and I urge whatever you can do when you talk to 

them, see if you can get them to rethink that one. But the most 

important thing is that we need additional funding for LIHEAP, 

whatever you can do, and the fact that you are holding these hearings, I know you know this is important. We need you to be the 

champion when you get back. 

Thank you. 

[The prepared statement of Mr. Griesbach follows:]

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Senator SANTORUM. Thank you. I appreciate that, and we have 

been and we certainly will be, and I appreciate your advocacy for 

senior’s heating needs. 

Our final testimony is from Major Deborah Sedlar, who is the 

program secretary for the Divisional Headquarters of the Salvation 

Army. Thank you very much for coming and being with us this 

morning. 

STATEMENT OF MAJOR DEBORAH R. SEDLAR, PROGRAM SECRETARY, SALVATION ARMY DIVISIONAL HEADQUARTERS, 

PITTSBURGH, PA 

Ms. SEDLAR. Thank you for your invitation this morning, Senator. We appreciate it, and while the Salvation Army does not have 

expertise in these areas, we do have some observations that come 

from meeting with the folks who are within our communities. I actually represent the Western Pennsylvania Division of this area, 

and it is roughly half of the State, but it is 28 counties, to be precise, and our headquarters is here in Pittsburgh. So we are grateful 

that you convened here. That is rather convenient for us. There are 

some issues that come up when it comes to the elderly folks, and 

I merely want to make some observations to you from the Salvation 

Army’s perspective. 

We have provided 1,320 families with energy assistance, and that average supplement was about $125, totaling approximately 

$165,000 in the last year. This is exclusively through Salvation 

Army units. Most of the funding is generated through government 

grants or private foundations that we have secured. The funding 

pool is decreasing annually as the need rises. Once the resources 

are depleted there really are no alternate funding sources, except 

to draw from other provisions of service that we have. In other 

words, if we are paying out energy bills, then perhaps we cannot 

assist as many people with food or other things that we generate. 

Agencies that serve as conduits for these funds often change annually, such as the FEMA funding program or the LIHEAP or the 

Dollar Energy. Sometimes the agency to which a client must go 

changes annually, so they do not know from year-to-year where to 

go, and it becomes rather confusing. Some funding sources are restricted to one-time use. We often have foundational things, criteria 

that hold us to just a once-in-a-lifetime use of that emergency funding. Transportation issues for the elderly and communication barriers contribute a great deal to an already strained system of assistance that particularly impacts these folks. I think about the 

new programs that are coming out for prescription benefits for 

many of the elderly folks. They are extremely confused by that, so 

to try and broach the idea of trying to get some help to pay the 

energy bills—I think they would rather stay home and be in the 

cold than try to do this on their own. Assisting this population base 

presents very unique challenges, and most seniors have a deep 

sense of pride and are often embarrassed and ashamed to ask for 

assistance. 

In the United States, more than 3.5 million children are raised 

by grandparents. This presents a new problem to many of these 

folks. These multigenerational homes require increased social services in order for these families to thrive. Heating is not something 

76

that can be done without when you have grandchildren in the 

house with you. Often impoverished elderly often have substandard 

and older housing units that are not energy efficient, and subsequently that creates increased higher costs, probably more so than 

many of the newer homes that are more energy-efficient. As the energy costs increase, so does every other cost to live. The cost for 

food will go up. The cost for any other basic need—clothing—will 

go up. Retailer costs will increase as the cost of energy goes up because they have to maintain their operations, as well. Collaborative 

efforts are having the most impact from what we can see as an 

agency and an organization, but that often means that an individual who needs assistance has to meet with a number of agencies 

in order to draw from multiple resources, and this becomes very 

confusing to an elderly person. 

So we appreciate the opportunity to speak to you today and certainly we commend you for your efforts and would welcome any 

help that you can give to this area for these purposes. 

Senator SANTORUM. Thank you very much, Major. Just to pick up 

on what you were saying, because when I was listening to the testimony from Bill and Jimmy I was struck by the number of programs that both of the companies have, and then I hear your testimony that this is very, very confusing for a senior. Do you guys 

have a response? Is there a way that we can help sort of cut 

through? 

Mr. HECHT. Yes. We do work with the same agencies, so the social service agencies that are in our communities are multiple—

community action committees, Salvation Army, other charity 

groups. So we do work with those agencies and bring them together 

to allocate our customer assistance money. We also work with the 

agencies when we refer our consumers that are identified with a 

problem to individual agencies, so we know which services the different agencies provide, which services fit the needs of consumers 

when we learn what some of their challenges are. I did spend an 

afternoon a couple of years ago with what we call our CARES representative, or Customer Assistance and Referral program representative, making house calls, and saw firsthand that many of 

the consumers that have difficulty paying their energy bills have 

other challenges. We can help identify what they are and send 

them to the right agency, but it is true that although we have great 

benefits from private philanthropy in the U.S., at the same time 

that private philanthropy does get channeled through multiple 

agencies. That is a fact. 

Mr. STATON. Senator, I would agree. It is a fact, that it does 

come through multiple agencies. The way we have attempted to try 

to address that is on staff at Dominion Peoples we have two social 

workers as part of our CARES program and we actually do a casework approach, if you will, to helping our customers, so that we 

help them go through the entire process and not just simply refer 

them, because I think we have certainly seen the same thing. We 

can refer to multiple agencies but our customers are never going 

to get all of the help that they truly need. 

Senator SANTORUM. Do you have a comment on that? 

Ms. SEDLAR. I think these gentlemen are accurate, and they even 

do a great deal within their bills to provide information to people 

77

who might need help and where to call and where to go, and that 

is a referral process, unfortunately, because then when the person 

calls the company, they are referred to the specific agency in their 

area and have to then make another call. As an older person, that 

is more difficult than being a younger person. I think the elderly 

also do not have the access to Internet, which is becoming such a 

thriving area. I think about, in terms of the Yellow Pages, it is now 

costing agencies and organizations and businesses to post their information within the Yellow Pages so many more are opting not to 

do that. They use Internet sources because they are economical. 

The elderly do not have that. They have the Yellow Pages that 

come to their home every year or so, and that is what they have 

to work with, so they do not have access to all of the possibilities 

that they might need, and they might give up a whole lot easier 

than a younger person might. Again, I want to say there is competition for the dollars, as in getting there first to be able to get 

the access to them. Once the dollars run out, then there is no more. 

If there is that type of competition, the elderly folks are left behind 

because they are not out there first, they are not the first to hear 

about it. They are pretty much the turtles in the race, so to speak, 

by virtue of their own person. 

Senator SANTORUM. Mr. Griesbach, you have a statistic here that 

caught my attention. You said lower-income older Americans spend 

an average of 14 percent of their income on residential energy. Do 

you know what that number is in Pennsylvania? Is it higher here, 

or do you have information on that? 

Mr. GRIESBACH. I do not know. This is a national figure. 

Senator SANTORUM. Right. 

Mr. GRIESBACH. We are trying to find out for Pennsylvania, but 

we do not know. It has not been broken down that narrowly yet. 

Senator SANTORUM. OK. In listening to the testimony from Mr. 

Hecht and Mr. Staton, I was struck with the programs that you 

have in place to be able to help those in need, and then particularly, Mr. Staton, you talked about the other side of the equation, 

and that is what do we do to try to drive any energy costs down, 

and even though this is a meeting on LIHEAP, obviously part of 

the equation or the need for LIHEAP is the fact that we have seen 

skyrocketing energy prices, which we talked about with the first 

panel. You mentioned something interesting to me, that you get 40 

percent of your supply from Pennsylvania. I suspect that that 

would surprise most people in the room, that there is that much 

production of natural gas—I assume in western Pennsylvania—predominantly in western Pennsylvania. You said that new wells 

produce approximately six million cubic feet of natural gas per day. 

Can you give me an idea of what—I do not know how much six million cubic feet of natural gas—I mean, maybe people in the audience do, but I do not know what that is. I mean, how much is six 

million cubic feet? What does an average consumer use? Is it millions of cubic feet or thousands of cubic feet? I mean, what does 

that mean? 

Mr. STATON. Generally customers will use about 100 MCF or 

100,000 cubic feet of natural gas on an annual basis in our service 

territory. 

78

Senator SANTORUM. So you say they would use 100,000 cubic 

feet. So that is one customer? 

Mr. STATON. One customer, on average. 

Senator SANTORUM. Yes, so six million cubic feet does not sound 

like a lot of gas to me. 

Mr. STATON. Six million cubic feet a day. 

Senator SANTORUM. A day. Oh, OK. I’m sorry. A day? 

Mr. STATON. Yes. 

Senator SANTORUM. Well, then that is a little bit more. That is 

a little bit more. [Laughter.] 

That is six million cubic feet of additional capacity? 

Mr. STATON. Yes. 

Senator SANTORUM. OK. Forty percent of what you use in natural gas comes from western Pennsylvania. How much is that? 

Mr. STATON. In total, we deliver about—40 percent would be 

about 12 billion cubic feet. 

Senator SANTORUM. Twelve billion? 

Mr. STATON. A year. 

Senator SANTORUM. A year, OK. Is it your sense that there is 

more natural gas production capability here—I mean, a lot more 

here in western Pennsylvania? 

Mr. STATON. I would love to say that there is. Appalachian supplies generally are not as dramatic as, say, the Gulf Coast supplies. 

When you drill in the Gulf Coast you get huge benefits in a very 

short period of time. You do not get that big of a bank for the buck, 

if you will, but there is still capability in western Pennsylvania and 

the rest of the Appalachian Basin to continue to bring on additional 

resources. It is just a matter of being able to get the permits that 

are necessary to drill and to bring it to market. 

Senator SANTORUM. The question I have, and one of the concerns 

that I know a lot of folks have with respect to any kind of energy 

production, and that is the environmental impact of that. We sit 

here in Pittsburgh, and I guess most folks here would really not 

know very much about what are the environmental impacts of 

drilling a natural gas well. Can you talk about that, because I certainly know from the issue of offshore drilling, one of the big concerns is what are the environmental impacts of offshore drilling 

and maybe they are different than the environmental impacts of 

drilling here in the Appalachian Basin, but can you give us an idea 

of what that is? 

Mr. STATON. The environmental implications—in the old days of 

drilling, you ate up a lot of space, a lot of land, and you created 

a lot of disruption, if you will—arguably you created a lot of disruption as you drilled for natural gas or for oil. With the newer technologies that we have and the capabilities we have, we are not 

drilling as many holes in order to get the same results, if you will. 

So the environmental impacts have dropped dramatically as a result of better technology, better underground technology, and greater reach from single locations. Directional drilling, for instance, 

would be an example of where in the past you might have to drill 

in a particular area. In an acre of land or 100 acres of land, you 

might need a well per acre in order to drain the reservoir. Now you 

can do that in a much more limited space. So the environmental 

impacts have dropped dramatically, and again we are caretakers of 

79

the environment as we drill, and when we are done drilling, restoring the land to where it needs to be has become a much greater 

effort. 

Senator SANTORUM. A couple of other things that you mentioned 

I just want to go through to talk about the impact. You mentioned 

the permitting process. Is there something that you believe Congress can do to deal with that permitting process? What is the complication here? 

Mr. STATON. Let me give you an example. As Margot indicated 

earlier, the natural gas market is a national market and the prices 

are driven by national supply and demand. Dominion currently 

drills on Bureau of Land Management property in Utah, and that 

would be a good example. We have plans to drill, in 2006, 75 wells 

in Utah. Each of these wells will cost us about $1 million and will 

produce about a million cubic feet of gas per day. Currently we only 

have 33 drilling permits in hand in order to be able to do that, and 

the process—again, we have 75 prospects, but only 33 permits. The 

process is taking now 7 to 8 months to get these permitted for a 

process that should only take a couple of weeks. I would point out 

when we make the application, all of the environmental work has 

been done beforehand, and so the process should be streamlined. 

The Energy Policy Act of 2005 gave BLM additional funding and 

broader new authorities to eliminate their backlog of permit applications. We have committed a significant amount of capital and 

other resources. We would just like to see the BLM do their part, 

and we do believe that with some pressure from Congress, the 

BLM will do what they were permitted to do in the Energy Policy 

Act. 

Senator SANTORUM. On the first panel, Margot mentioned and 

you reiterated that this is a national price as opposed to an international price for natural gas. Having read in the paper of the dispute between Ukraine and Russia and looking at the price of natural gas in Russia, which was just like, what, a dollar or something 

like that, as opposed to 9 or 10—it has been as high as $13 or so 

here in the United States. In the Middle East it is 50 cents for 

what we pay $13 for, which—unlike oil, which has a world price 

and that is what everybody pays, that is not the case here. So it 

is very much tied—here in Pennsylvania where we are dependent 

upon natural gas, it is very much tied to how much we can produce 

here in this country to meet this demand. You mentioned a couple 

of other things that I think are important. We did pass a bill that 

allows for a pipeline to come from Alaska. There is a lot of controversy about drilling for oil in what is called ANWR. This has 

nothing to do with that. This has to do with where drilling is going 

right now, which is on the Prudhoe Bay, where we drill for oil and 

we send the oil down the oil pipeline, but up in that same area—

in fact, coterminous in some cases with the oil—is gas, and the gas 

is, to my understanding, just pumped back into the ground. Actually the gas does come with the oil, and they just have to pump 

the gas back into the ground because we have no way to get it 

here. So this pipeline which we passed, I guess, 2 years ago is 

hopefully something that will get a major reserve of gas into our 

country. 

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The other issue is LNG, which you mentioned and Margot mentioned earlier from the Caribbean, but LNG is another potential 

source of internationalizing, if you will, the price of gas by having 

gas liquefied and then being able to be shipped. I guess the question I have is what are the limitations on our ability to make LNG 

a viable source of natural gas? 

Mr. STATON. Currently I would say it is capacity. Dominion owns 

the Cove Point LNG facility in Maryland, and it is one of only four 

in the country currently that can receive natural gas or can receive 

liquefied natural gas. What we need to be able to do——

Senator SANTORUM. Just for the technology point of view, you receive the liquefied natural gas from Qatar, for example? 

Mr. STATON. Yes. 

Senator SANTORUM. It comes here, and you have a plant there 

that receives it and processes it? 

Mr. STATON. We have a plant there that receives it, gasifies it 

again, and then we deliver it into our pipeline and deliver it up 

into the Northeast and into the Mid-Atlantic area of the country. 

Senator SANTORUM. It has the same properties—once you gasify 

it, it has the same properties as——

Mr. STATON. There may be some that dispute that right now, but 

yes, it has essentially the same properties, flows through our pipelines just like any other type of natural gas. 

Senator SANTORUM. OK. 

Mr. STATON. What we need to be able to do is to continue to permit additional facilities and to——

Senator SANTORUM. Does this have the same permitting problems as a refinery would have in the sense that people do not want 

an LNG facility in their backyard, if you will? I mean, I guess we 

could have one here along the river or someplace, but what goes 

on there that people would not like to see have go on in their 

neighborhood? 

Mr. STATON. Again, it is really a relatively low-key facility. It 

does not look like a refinery. It is a series of tanks and gasification 

facilities in a very contained area. I think aesthetics is not the primary issue. I think folks are concerned about potential terrorism 

impacts, which again, with liquefied natural gas, that is really not 

a problem. 

Senator SANTORUM. Why is that? 

Mr. STATON. The ability for it to burn is not what people would 

think. It is the same as natural gas. Natural gas only burns within 

very defined limits. Liquefied natural gas in its liquid form is not 

particularly flammable, but nevertheless there are folks that raise 

that issue as a concern due to a lack of understanding. So I think 

it is somewhat aesthetics, but I also think it is unwarranted concerns, if you will, as to safety. 

Mr. HECHT. Yes, I would reinforce that. There are fairly wellpublicized issues that have come to light in the proposed expansion 

of a number of LNG terminals and the proposed establishment of 

other LNG terminals in the U.S. Their construction has proceeded 

much more slowly than the marketplace would suggest it should. 

The debates have been over safety and security, primarily. There 

is a process being followed. It takes more time to work through 

that process and bring LNG online than many of us would like to 

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see. I would suggest that the market indicated that natural gas 

prices were rising and the market was tight even before Katrina, 

and Katrina certainly magnified the shortage in supply. 

I might also reinforce the statements of others regarding environmental permitting. We have a very limited amount of natural gas 

production, very, very limited, much smaller than my colleague. In 

one particular case we found it economical to make a charitable 

contribution of the mineral rights rather than attempt to get the 

environmental permits to produce the gas. 

Senator SANTORUM. OK. Just a final comment on the LNG facility, because this was somewhat of a—there is a controversy on the 

other end of the State, in Philadelphia, about trying to site an LNG 

terminal in the Philadelphia area, and I am not an expert on this, 

but community groups, upset about that facility in their neighborhood even though the proposed facility is along the Delaware River, 

separated by an industrial sector and I–95 and then the neighborhood—but that is still—it looks to me like they are not moving forward on the facility as a result of that. So I wanted to make sure 

that that is in the record in the sense that we talk about Pennsylvania being dependent upon natural gas, and then when we try to 

bring more supply in here to get the cost down so heating bills are 

not so high, then we have all sorts of impediments to try to get 

more energy here into this country. It is one of those things where 

you cannot have your cake and eat it, too, and somehow or another 

we have got to work out something where we are going to try to 

drive—we pay more for natural gas in this country than any other 

country in the world, and that is because we just simply do not 

produce what the demand is and we do not allow those countries 

that—the price of natural gas in Qatar is 75 cents, I think that’s 

what it is. We pay, what, 15, 20 times that here, and we want to 

take that natural gas at that price, liquefy it, bring it here, and we 

cannot. So it is a frustration, but it is something that all of those 

who are advocates for energy assistance need to understand, that 

we would not need as much advocacy for energy assistance if the 

energy costs were lower, and there are ways to get those costs 

lower, and we just need to be conscious about pursuing those also 

in a way that is safe and environmentally friendly. 

I was notified 15 minutes ago that Secretary Richman will be 

here in 5 minutes. So we have sort of gone off in a little different 

direction—I won’t say stalling for time—but wanted to give Secretary Richman every opportunity to come here so she could testify. 

I do not have any additional questions. If anybody has any other 

comments that they would like to make for the record, our panel 

will accept them. 

Mr. GRIESBACH. I am not known as the AARP expert on the environmental stuff, and if there is a way to do this more efficiently 

and quicker, that is good. We do have a problem in the here and 

now that is imminent, and no matter what we do on these issues, 

this imminent problem is not going to go away. These programs 

that they are running to help low-income people are terrific programs, but just in Pennsylvania alone, while we have about 

300,000 people, 300,000 households that got LIHEAP assistance 

last year, the projected need is probably 1.4 million households. So 

we are not near reaching—and add all these programs together, 

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make them all totally efficient so that they are all working together, and we are still not there yet in terms of providing the kind 

of heat——

Senator SANTORUM. Yes. Of the company-sponsored programs, 

how many folks do you reach compared to the LIHEAP program? 

I mean, what is the total universe of folks? Obviously, you potentially know from your companies, but do we know what the philanthropic and corporate participation is, how many people were 

served? 

Mr. HECHT. I can give you a general idea, Senator. LIHEAP 

probably helps about 3,500 recipients—no, that is not correct. 

Senator SANTORUM. You said 300,000, right? 

Mr. GRIESBACH. Statewide. 

Mr. HECHT. That is Statewide. Among our customers, LIHEAP 

is probably more than half of the total direct cash assistance that 

we are able to provide. As I think I pointed out——

Senator SANTORUM. Would you say you are fairly typical of most 

utility companies, that LIHEAP is the majority of the assistance? 

Mr. HECHT. We may not be, Senator. I would not want to say, 

because we serve primarily middle-sized cities, 100,000 population 

or lower, and the urban areas have their own set of challenges that 

can be different than the rural and midsize cities and suburban 

areas that we serve. 

Senator SANTORUM. Jimmy, do you have any——

Mr. STATON. My numbers are not significantly different. In total, 

we have about 10 percent of our customer base, or in the 30,000 

customer range, that are receiving either LIHEAP help or are part 

of our Customer Assistance Program. 

Senator SANTORUM. I guess the breakout between who gets 

LIHEAP and who gets——

Mr. STATON. About 20,000 of our customers receive LIHEAP assistance. 

Senator SANTORUM. So about two-to-one. 

Mr. STATON. Then about 10,000 under the CAP program. 

Senator SANTORUM. You finished your answer just at the right 

time. Secretary Richman just walked into the room, so——

Mr. STATON. Always willing to help, Senator. 

Senator SANTORUM. We have had an interesting discussion on a 

variety of topics, Madam Secretary, in making sure that we spent 

enough time to make sure that you could get here, because we 

knew you were trying hard to come and we wanted to make sure 

that your efforts were rewarded. This is a reward? I don’t know. 

Some may not think this as much of a reward, but if this was your 

objective, then——

Ms. RICHMAN. This is my objective. 

Senator SANTORUM. Madam Secretary, thank you so much for 

making the extraordinary effort to be here, and I will let you offer 

your testimony. Thank you.

83

STATEMENT OF ESTELLE RICHMAN, SECRETARY OF PUBLIC 

WELFARE, COMMONWEALTH OF PENNSYLVANIA, HARRISBURG, PA 

Ms. RICHMAN. Thank you. First let me officially thank you for 

the action taken yesterday and comment on that. 

Good morning, Senator. 

Senator SANTORUM. You can thank assistant secretary Horn, who 

was the person who declared that emergency or executed that 

emergency. 

Ms. RICHMAN. Well, thank you. 

Good morning, Senator Santorum. I am Estelle Richman. I am 

the secretary of public welfare for the Commonwealth of Pennsylvania. Thank you for providing me with the opportunity to discuss 

what we are doing in Pennsylvania to help the elderly and some 

of our most vulnerable citizens stay warm during this winter season. We are only 2 weeks into the official winter season and already much has been said and written about the potentially dangerous situation that many Pennsylvanians will face this winter 

because they cannot afford to heat their homes. We need help. The 

rising cost of home heating is putting tremendous financial stress 

on all of our citizens of low and even middle income, but this is especially true in the case of people who are elderly and on fixed incomes. According to the PUC, the cost to heat homes with gas is 

expected to rise about 50 percent this year, and the cost to heat 

homes with oil is expected to rise 32 percent. As of December 15, 

over 21,000 households were without use of their central heating 

system, an increase of more than 19 percent from last year. The 

Energy Policy Act of 2005 increased the authorized spending level 

for LIHEAP to $5.1 billion annually. To authorize is one thing, to 

appropriate is another. Unless further action is taken in the next 

congressional session, which as you know convenes in mid-January, 

LIHEAP will receive only the $2.1 billion in the Labor-HHS Education bill that passed the Senate. This amount is less than half 

of what was authorized and woefully inadequate to support the 

number of households here in Pennsylvania and across the country 

that will need energy assistance this winter. 

When adjusted for the 1 percent across-the-board cut to discretionary funds, this means that the regular LIHEAP program will 

receive approximately $1.98 billion, and the 1-year contingency 

funds are approximately $181.1 million. In Pennsylvania, this 

translates into about $133 million in basic funding, about 5 percent 

higher than last year, but unfortunately not nearly enough to keep 

pace with the 40-percent average increase in home heating costs. 

The $7.6 million in contingency funds that were announced yesterday for Pennsylvania will still leave us short of needed funds. 

Demand for assistance through LIHEAP is very high so far. As 

of December 30, 2005, we had already received 322 applications for 

the cash component of LIHEAP. This represents a 5-percent increase over last year and means that over 17,000 additional Pennsylvania households have requested basic heating assistance so far 

this winter. We have seen a 15-percent increase in crisis applications, as well, from just over 38,000 at this time last year to just 

over 45,000. Already over 6,000—nearly 7,000—more households in 

Pennsylvania are facing a heating crisis than at the same time last 

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year. The simple fact is we need more Federal funds to protect atrisk Pennsylvanians from the cold in the coming months. 

In Pennsylvania, Governor Rendell’s response to the situation is 

a multi-pronged initiative called Stay Warm Pennsylvania. Stay 

Warm was launched at the beginning of November when the Governor convened a statewide energy summit that brought together 

180 stakeholders. During this live statewide videoconference, the 

Governor and top Cabinet members heard firsthand from a broad 

range of the public and private sector leaders and consumers about 

what our energy needs would be for this winter. The summit generated real solutions and real ideas on ways for Pennsylvanians to 

stay warm and safe in the winter. The LIHEAP program is the 

foundation of Stay Warm Pennsylvania. Other key components include encouraging energy companies to help low-income consumers 

manage their heating bills, ensuring that low-income families get 

a second chance to pay their bills before their heat is shut off, removing barriers for families seeking to have their service restored, 

and assembling volunteers to help seniors winterize and take care 

of their homes to help lower energy costs. In addition to working 

with the utility companies, the Governors have secured many key 

partners in the Stay Warm Pennsylvania initiative, among them 

are the United Way, the Red Cross, the Salvation Army, the AFL–

CIO and the Pennsylvania Council of Churches. 

As I noted a moment ago, LIHEAP is at the center of Stay Warm 

Pennsylvania. For more than 25 years the LIHEAP program has 

been helping citizens who are unable to pay their utility bills in the 

coldest months. To help supplement this vital program, Governor 

Rendell asked for and has received an additional up to $21 million 

from the State Legislature. This is the first time since the inception 

of the program that the State has put in its own funds into the program and demonstrates the commitment that Pennsylvania has to 

helping our citizens stay warm and safe this winter. 

The increased State and Federal funding is critical. With the 

dramatic increases in energy costs, our estimates show that we will 

need approximately $50 million in additional funding to maintain 

LIHEAP purchasing power just to provide assistance to the same 

number of people as last year. Much more will be needed to provide 

assistance to the number of households that will need help this 

winter. Keeping in mind that this Committee’s focus is on the energy needs of older Pennsylvanians, I would like to point out that 

the Department of Public Welfare works very closely with the 

Pennsylvania Department of Aging to ensure that seniors in Pennsylvania know about LIHEAP and how to apply for this important 

benefit. In preparation for this year’s heating season, we sent out 

outreach and application materials to the 54 Area Agencies on 

Aging and 518 senior centers across Pennsylvania. In addition, seniors who received a LIHEAP grant last year were automatically 

mailed an application for this year’s program. 

During the 2004–2005 winter season, more than 128,000 of the 

households that received LIHEAP assistance had at least one person over the age of 60. This represents roughly one-third of our 

total number of households served. As of December 24, the Department had authorized both cash and crisis benefits for approximately 75,437 households which have at least one member over the 

85

age of 60. This is nearly 40 percent of the total approved households. With the additional funding coming from the State and Federal sources, we are hopeful that we can increase the level of support to older Pennsylvanians and other low-income households. In 

addition to the work we are doing with the LIHEAP program, the 

Governor is reaching out to the broader community to help those 

in need through Stay Warm Pennsylvania. For example, the Governor has secured agreement from Pennsylvania’s utility companies 

to take voluntary steps to ensure that their customers have heat 

this winter even if they are having trouble paying their bills. The 

utilities answered the call to action by expanding existing programs that help customers pay their bills, by reducing or eliminating disconnections and by removing hurdles poor citizens face to 

reconnect fuel service. 

The Governor challenged the CEOs of the State’s major utilities 

to double enrollment into the Customer Assistance Program. This 

is a State program that requires participating energy companies to 

provide grant recipients with reduced monthly energy bills. Our efforts to partner more actively with these companies are already 

bearing fruit; 12 utility companies have pledged $12 million in new 

funds to protect low-income households. Another successful partnership is with Lowe’s, which operates 60 home-improvement retail 

stores in the State. They have agreed to hold weatherization workshops on a regular basis at senior centers and other locations and 

to provide weatherization materials at no cost to volunteer groups 

that will winterize the homes of seniors and families in need. 

Through outreach with community organizations, we have assembled a corps of volunteers to weatherize homes, aid the frail 

and elderly, and establish warm rooms in homes and community 

centers. In Pennsylvania, we have developed a broad strategy so 

our most vulnerable citizens are not left out in the cold this winter. 

While working to address the immediate energy needs of low-income citizens, we are also taking steps to address the larger issues 

surrounding our energy needs in Pennsylvania and throughout the 

Nation. The Governor is moving quickly and effectively to make 

Pennsylvania a leader in clean and sustainable energy initiatives. 

Investment in wind energy, biodiesel fuel production and converting old waste coal to diesel fuel will bring clean, renewable 

sources to Pennsylvania that will meet the needs of Pennsylvania 

citizens and boost the State’s economy. This portfolio of energy investment has placed Pennsylvania in the lead among States in the 

Energy Independence 2020 Plan, a national effort to reduce dependence on foreign oil. 

At this time I would like to conclude my remarks and again 

thank the Committee and the Senator for inviting me to offer my 

comments here today on behalf of the Rendell administration. 

[The prepared statement of Ms. Richman follows.]

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Senator SANTORUM. Thank you very much, Madam Secretary, 

and you were well worth the wait. I appreciate it. I just was making some calculations based on some of the numbers that are in 

your testimony. You say LIHEAP funding, according to the numbers that you provided, was about $140 million, $21 million from 

the State program, $12 million additional from corporate programs. 

So we are looking at $173 million in funding, of which it looks like 

close to $40 million of that is new money. 

Ms. RICHMAN. That is right. 

Senator SANTORUM. So that is a fairly substantial increase, obviously not as big an increase as we have seen in the cost, but I 

think there is some good news here, is that the State and the corporate community, as well as Congress, has done something, although as I said earlier we wanted to do a lot more, and my hope 

is that when we get back next year, that we can figure out a way 

to get some additional funding through. But I would put out a 

warning that just to put additional money on the table without 

some mechanism to offset where that money is coming from is 

going to be a very, very tough thing in a budget that the President 

is going to lay out here in about a month that looks to be probably 

in the area of $400 billion to $500 billion in deficit this year, which 

is substantially higher than it was last year. So I just put a warning out that I am going to do everything I can, and I have been 

doing everything I can, to try to get more energy assistance money, 

but we are going to have to find some way to offset this, and my 

hope is that we can bring back the idea that went down in the Senate. Hopefully, we can come back and do some refashioning of that 

and hopefully be successful, because a $2 billion addition, basically 

doubling of the Federal commitment, would be more than what you 

had even asked for to meet those needs. 

Mr. HECHT. Senator, if I may clarify an answer to an earlier 

question and also help put LIHEAP in perspective as a fraction of 

the total, our company last winter had about in excess of $22 million of private assistance. We have increased that to $28 million, 

and in addition LIHEAP last winter provided $6.3 million. So that 

gives you a proportion of the private funding versus the scope of 

LIHEAP to our corporation. 

Senator SANTORUM. So LIHEAP is a much smaller——

Mr. HECHT. LIHEAP is a much smaller fraction than my earlier 

response to you, in our total funding. 

Senator SANTORUM. You do not have those numbers? 

Mr. STATON. I do not have those numbers, but dollar wise I 

would imagine we are not too dissimilar. 

Senator SANTORUM. OK. Well, it would actually be helpful for 

me—and we can certainly, Madam Secretary, pursue this—is to 

understand what the scope of aid out there is. I mean, I think you 

talked about the increase being $12 million on the corporate side. 

The question is what is the base? To look at all of the money that 

is coming from all different sources to help those in need, it sounds 

to me it could be certainly well in excess of the number that we 

are talking about here. So that is something that we need to get 

a better handle on and understand where that money is being 

spent. 

95

You mentioned also, Madam Secretary—I cannot pass up the opportunity—the Governor’s efforts on clean coal and taking waste 

coal and turning it into diesel fuel, and we actually just 3 weeks 

ago—well, the week before Christmas—were able to pass a technical correction that needed to be passed to authorize a loan guarantee for that project, which is in Schuylkill County, which is on 

the other side of the State, Pottsville area, which will take coal 

which is basically sitting in piles all over the place, old anthracite 

waste coal, and turning that into zero-sulfur diesel fuel, which also 

can be used for home heating oil. That is a project that I have been 

working on for 6 years. We were able to get a $100 million Department of Energy grant 3 years ago, and that grant has been turned 

into a loan guarantee which will guarantee $450 million in the 

project, which basically will make the project go. 

The State has agreed to be a purchaser of that fuel when the 

plant gets operational, but this could be a prototype of something 

that could be incredibly beneficial for the environment, cleaning up 

the environment, producing home heating oil here in Pennsylvania, 

and creating jobs at the same time. It is not just waste coal, but 

we can also use—that is, waste anthracite coal—but we can also 

use bituminous coal here in western Pennsylvania and create facilities of the same kind. So it is about a $700 million construction 

which is going to happen here in Pennsylvania, so there are jobs 

related to that, plus the production of—we could be an oil-producing State here in Pennsylvania here again. 

Ms. RICHMAN. That would be very nice. 

Senator SANTORUM. Yes, but I just want folks to know that we 

have got to look at this holistically. You cannot just look at it as 

the immediate need. Obviously, the immediate need is one that we 

need to deal with, and we have people that are in crisis right now, 

but we are going to be back here again year after year after year 

unless we do something with the bigger picture. So that is one of 

the reasons I wanted to expand into that, and we have been working cooperatively with the Governor on this project, and it is an important one for me and one that we hope to make happen here in 

the next couple of years. 

With that, I do not know if anybody has any additional comments. I just want to thank everybody for attending, and we are 

adjourned. 

[Whereupon, at 11:21 a.m., the committee was adjourned.] 

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A P P E N D I X 

PREPARED STATEMENT OF SENATOR RICK SANTORUM

In June, Chairman Smith held a hearing to examine the effect of high energy 

prices on the elderly and how the basic need of heating their homes can be met. 

Now that winter is here, the increasing cost of home heating fuel weighs heavily 

on the minds of the elderly and the rest of the American population. Many of our 

seniors are having to decide what they must sacrifice in order to make ends meet. 

Prices of this winter were already projected to be considerably higher than last 

year; the advent of Hurricanes Katrina and Rita has made projections even more 

sobering. For example, the Energy Information Administration’s December ShortTerm Energy Outlook shows that on average, consumers will spend 38 percent more 

for natural gas this winter than they did last winter. 

Pennsylvania routinely faces harsh winters and is home to the third-highest percentage of seniors in the country. According to the 2004 American Community Survey, approximately 53 percent of Pennsylvania’s elderly households rely on natural 

gas to heat their homes; 26 percent use fuel oil; and 15 percent heat their homes 

with electricity. 

The primary federal heating assistance program is the Low-Income Home Energy 

Assistance Program. In FY2005, over 128,000 Pennsylvania seniors received 

LIHEAP benefits. According to the LIHEAP Home Energy Notebook, the three-year 

(2001–2003) average number of elderly households eligible for LIHEAP under state 

guidelines was nearly 330,000. In 2003 (the most recent year for which data is available), only 32 percent of those households actually received benefits. Compared to 

other states, Pennsylvania is ranked third for most number of elderly receiving this 

benefit in 2003. 

Unfortunately, as we know, LIHEAP does not reach all of those who are eligible. 

Since being a member of the House of Representatives, I have been an ardent, vocal 

supporter of LIHEAP funding. We cannot minimize the importance of this program; 

however, the purpose of this hearing is to take another look at the prices of home 

heating fuel now that winter is well underway and to hear from some of our witnesses about efforts they are making to help alleviate these burdensome prices for 

some of our most vulnerable citizens. Participation by private companies is vitally 

important to ensuring the warmth of our seniors. In addition, the tireless efforts of 

countless non-profits is commendable and essential. By continuing to raise awareness for this basic need of our elderly population, it is my hope that government, 

together with the private sector, can improve the assistance given to these individuals and reduce the number of those living with little or no heat. 

I look forward to hearing your testimony and thank you for your time today.

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