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S. HRG. 109–192

KEEPING THE POWER ON:

EXAMINING THE IMPACT OF SOARING ENERGY

COSTS ON THE ELDERLY

HEARING

BEFORE THE

SPECIAL COMMITTEE ON AGING 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

WASHINGTON, DC

JUNE 15, 2005

Serial No. 109–9

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 Gordon Smith ....................................................... 1

Opening Statement of Senator Herb Kohl ............................................................. 3

Opening Statement of Senator Larry Craig .......................................................... 4

Opening Statement of Senator Conrad Burns ...................................................... 4

PANEL I 

Margot Anderson, director, Officer of Energy Markets and End Use, Energy 

Information Administration, U.S. Department of Energy, Washington, DC .. 5

PANEL II 

Nelda Barnett, member, AARP Board of Directors, Owensboro, KY .................. 28

Donna K. Harvey, president, National Association of Area Agencies on Aging, 

and executive director, Hawkeye Valley Area Agency on Aging, Inc., Waterloo, IA .................................................................................................................... 40

Jim Slusher, executive director, Mid Columbia Community Action Council, 

Inc., The Dalles, OR ............................................................................................. 53

APPENDIX 

Prepared Statement of Senator Talent .................................................................. 61

Questions from Senator Talent to Margot Anderson ............................................ 61

Questions from Senator Talent to Ms. Barnett ..................................................... 62

Questions from Senator Talent to Ms. Harvey ..................................................... 62

(III) 

(1)

KEEPING THE POWER ON: EXAMINING THE 

IMPACT OF SOARING ENERGY COSTS ON 

THE ELDERLY 

WEDNESDAY, JUNE 15, 2005 

U.S. SENATE, 

SPECIAL COMMITTEE ON AGING, 

Washington, DC. 

The committee met, pursuant to notice, at 3:04 p.m., in room 

215, Hart Senate Office Building, Hon. Gordon H. Smith (chairman 

of the committee) presiding. 

Present: Senators Smith, Talent, Craig, Burns, Kohl and Carper. 

OPENING STATEMENT OF SENATOR GORDON H. SMITH, 

CHAIRMAN 

The CHAIRMAN. Good afternoon, ladies and gentlemen. We thank 

you all for attending today’s Aging Committee hearing entitled 

‘‘Keeping the Power On: Examining the Impact of Soaring Energy 

Costs on the Elderly.’’ 

The seemingly exponential rise in energy costs, especially as we 

head into the summer months, is a critical issue facing our Nation 

today. Prices of natural gas, oil and electricity impact each and 

every one of us no matter how old we are and how much we pay 

for everything from gasoline to countless everyday goods and services. 

The cost of heating and cooling our homes and fueling our automobiles has reached historic levels during this current trend of 

steadily rising energy prices, and it really does impact folks on 

fixed incomes, specifically many of our elderly. Compared with 

prices from 1999—2001, this past winter’s natural gas prices increased 38 percent. The cost of propane increased 39 percent, and 

heating oil prices increased 63 percent. In the past year alone natural gas prices have shot up 25 percent. High energy prices are 

being felt at the pump as a gallon of gasoline has rocketed past 

$2.00 with no signs of coming down in the foreseeable further. 

While soaring prices affect all Americans, as I said, our seniors 

are being hardest hit. Elderly citizens, a large percentage of whom 

live fixed incomes, are feeling the financial impact of high-cost energy more than any other segment of our society. These individuals 

and households spend a significant percentage of their income on 

energy bills, and in extreme cases, seniors are paying as much as 

35 percent of their annual income toward these nondiscretionary 

and critical expenses. As a result of this high-energy burden, many 

elderly in our society must choose between heating and cooling 

2

their homes or purchasing essential medications or foods. Sometimes the situation is much graver, when the choice boils down to 

paying for energy or going hungry. 

Clearly something needs to be done to help our low-income elderly population make ends meet as we search for solutions to this 

ever-worsening problem. While passage of a comprehensive energy 

policy would better manage America’s long-term energy needs, the 

question still remains: what can we do in the short run to alleviate 

the financial disastrous effects of skyrocketing energy prices that 

they are having on our senior citizens? 

In the Coos-Curry County area of Oregon, 60 percent of seniors 

receiving assistance are struggling to pay their utility bills or pay 

for their medications. Households in this area of my home State 

have experienced an overall increase in the price of their utilities 

of up to 40 percent from last year, and similar examples and statistics can be found all across the country and I am sure the case is 

the same in Wisconsin or in Idaho. 

The Low-Income Home Energy Assistance Program certainly 

does make a difference. LIHEAP assists many low-income families 

with paying their utility bills and serves as a vital safety net for 

households that cannot afford a residential energy cost to keep 

their home warm in the winter or cool in the summer. Higher energy costs have resulted in an even greater increased need for energy assistance among low-income seniors. 

Transportation is another area that is heavily impacted by the 

cost of energy. Affordable transportation is important for the elderly to maintain their independence and enable them to engage in everyday activities such as attending medical appointments, picking 

up groceries and visiting grandchildren. With gasoline prices surpassing $2.00 per gallon, many elderly are forced to curtail driving 

as they can no longer afford to pay for a tank of gas. 

Moreover, seniors are being further squeezed as high gas prices 

are coupled with an economic climate where local governments are 

curtailing services or increasing the price of public transportation 

services. 

Today’s hearing will focus on the impact that high energy prices 

are having on America’s elderly population and how low-income 

seniors’ energy assistance needs can best be met. This hearing is 

also timely in that we are debating and voting on an energy bill 

on the floor of the Senate as we speak. 

Our expert witnesses will talk about their experiences with these 

issues and how they are helping our elderly population manage 

with the limited resources that are available to them. I am especially pleased the Mr. Jim Slusher of the Mid Columbia Community Action Council in the great State of Oregon is with us today. 

Mr. Slusher is here to discuss the impact high-energy costs are 

having on the ability to provide energy assistance to low-income 

seniors in Oregon and how energy prices have impacted the demand for assistance. 

I look forward to hearing the testimony from all of our witnesses 

on these issues that are so important to our senior population. 

With that, I will turn to my colleague, Senator Kohl, for his 

opening statement, and then Senator Craig of Idaho for his as well. 

Senator Kohl. 

3

OPENING STATEMENT OF SENATOR HERB KOHL 

Senator KOHL. Mr. Chairman, we thank you for calling this hearing today. As the Senate starts work on a comprehensive energy 

bill this week, this hearing gives us an opportunity to learn about 

the impact of high gas and energy prices on our Nation’s seniors. 

Last year the National Energy Assistance Directors Association 

confirmed that many seniors either turn their heat down to a dangerous level in the winter, or even skip taking prescription drugs 

in order to pay their utility bills. In addition, increased energy 

prices are felt by all consumers who have to pay more for manufactured goods and basic staples. 

For the past 24 years the Federal Government has attempted to 

provide financial help to low-income families and seniors who cannot pay their utility bills through the program known as Low-Income Home Energy Assistance Program or LIHEAP. Unfortunately, as demand for this assistance has increased, energy prices 

have reached records highs, the administration has not provided 

the funding necessary to serve those who need it the most. Between 2003 and 2004 LIHEAP payments to households decreased 

by approximately 30 percent. In the past the LIHEAP program was 

able to pay between 45 and 50 percent of a person’s utility bill if 

they were eligible, but now the program can only cover between 25 

and 30 percent of households’ energy cost. 

Unfortunately, LIHEAP has always faced significant funding 

shortfalls going back beyond this administration. Funding is only 

increased from 1.8 billion in 1982 when the program was initiated 

to 2.3 billion here in 2005. Today the buying power of LIHEAP is 

roughly half of what it was back in 1982. In fact, because of the 

reduced buying power current funding levels provide only enough 

funding to help 17 percent of LIHEAP eligible enrollees. Yet even 

if LIHEAP’s funding was adjusted for inflation to $3.6 billion today, 

it would still not be enough to provide assistance to all eligible 

households. 

Clearly we need to do more if we are serious about helping lowincome families with energy costs. This brings us to the energy bill 

that is being considered on the floor. Comprehensive energy legislation has come up in each of the last 3 congresses, but has died because of controversy over different provisions. While I am pleased 

that the prospects for final passage of this legislation are better 

than they have been in the past, I am troubled by the fact that this 

bill is not doing more to help consumers who are facing higher energy prices. 

That being said, we are happy to be here today. We are looking 

forward to our witnesses and their testimony. We are looking forward to hearing more about high-energy prices and their impact on 

older Americans. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Kohl. 

Senator Craig.

4

OPENING STATEMENT OF SENATOR LARRY E. CRAIG 

Senator CRAIG. Mr. Chairman, thank you for holding this hearing. I agree with both you and Senator Kohl. Its timing is impeccable as we debate a national energy policy on the floor. 

There is no question we have to address in part the cause of rising energy costs to all of our consuming public, but that portion of 

our public that largely lives on fixed and very limited incomes obviously feel the impact of higher-energy costs much greater as you 

both have well expressed. 

Of course, trying to help with LIHEAP and keeping it currently 

funded is ever more important as we move into the hot summer 

months. To some air conditioning is life providing, and we know 

that, and we have heard of those tragic situations where the air 

conditioner could not be repaired, did not exist, or they simply 

could not deal with the heat, and they lost their lives. That is a 

tragedy played out in some of our cities that should not have to 

happen, but it does. 

Dealing with this issue is important. Building a record as we 

work our way through a national energy policy and as we get to 

the appropriations on the Health and Human Services Subcommittee of Appropriations, where Herb and I serve, that will 

deal with these issues and with LIHEAP funding is ever more important. 

The CHAIRMAN. Senator Burns, welcome. 

OPENING STATEMENT OF SENATOR CONRAD BURNS 

Senator BURNS. Thank you very much, Mr. Chairman, and thank 

you for talking about energy. I think it is pretty timely, as we are 

into an energy bill which we hope will maybe relieve some of the 

strain that we have. 

I was struck by a report that came out from the Department of 

Energy where the elderly right now are paying about 35 percent 

of their income on energy costs, and to folks that are on these fairly 

restricted retirement incomes this is just terrible. They not only get 

hit in a couple places, transportation, especially in my State of 

Montana, where I have 14 counties that have no doctors or offer 

health care. So you have transportation costs plus electricity costs. 

I realize that our electricity is maybe not as high in cost as other 

States, but nonetheless it has gone up recently, and we look at that 

and we try to figure out ways to soften the landing, so to speak, 

when we talk about energy cost. We do not talk about air conditioning in Montana all that much, but we talk about long winters 

and heating costs and transportation costs. So this hearing is important. 

It is also important that we work on our energy bill to where we 

can get some of these costs under control, and either through a 

larger supply or in some program that is offered by the Federal 

Government to cushion the increases that we have experienced in 

the last 4 or 5 years. 

It looks like gasoline prices are not going to go below 2 bucks 

until 2006. Now, any time anybody wants to forecast what prices 

are going to do, you are either a damn fool or a weather man, but 

nonetheless all indicators are going that way and we have to do 

5

something in order to blunt the increases that befell these people 

that are on fixed incomes. 

Thank you for holding the hearing and I look forward to the testimony. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Burns. 

We are very honored to have with us Margot Anderson, director 

of Energy Markets and End Use. She is with the Energy Information Administration here in Washington. Ms. Anderson, we thank 

you for being here. We invite your testimony now. 

STATEMENT OF MARGOT ANDERSON, DIRECTOR, OFFICE OF 

ENERGY MARKETS AND END USE ENERGY INFORMATION 

ADMINISTRATION, U.S. DEPARTMENT OF ENERGY 

Ms. ANDERSON. Mr. Chairman and members of the committee, I 

do appreciate the opportunity to appear before you today to discuss 

the outlook for energy prices 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 

do not take positions on policy issues, but we do produce data, 

analyses and forecasts that are meant to assist policymakers. 

Our views are strictly those of EIA and should not be construed 

as representing those at the Department of Energy or of the Administration. 

First I want to discuss the recent and projected energy prices 

and expenditures based on our most recent Short-Term Energy 

Outlook, which was released June 7th, and we have copies here for 

you. Then I would like to address consumption and expenditure 

patterns associated with elderly households. 

Since January 2005, monthly average crude oil prices, as measured by the price of West Texas Intermediate Crude Oil, have 

ranged between $46 a barrel and $54 per barrel. EIA predicts that 

crude oil prices will average $52 a barrel during the remainder of 

2005 and $54 a barrel in 2006. If our prediction holds, prices in 

2006 will more than double what they were in 2001. 

Several factors are contributing to these high crude oil prices. 

First, worldwide petroleum demand growth is projected to remain 

strong during 2005 and 2006. Second, projected growth in nonOPEC supplies is not expected to accommodate worldwide demand 

growth. Third, worldwide spare crude oil production capacity has 

been recently diminished. Fourth, downstream sectors such as refining and shipping are expected to remain tight. Finally, geo-political risks, such as the continued insurgency in Iraq, are expected 

to keep the level of uncertainty in world oil markets high. 

Heating and gasoline prices closely follow crude oil prices. In 

2005 heating oil prices are expected to average $1.91 per gallon, 

compared to $1.22 in 2001. Average heating oil expenditures per 

household were $719 per year in 2001, and are projected to climb 

to $1,143 in 2006. We predict gasoline prices will stay above $2.00 

per gallon through 2006, compared with $1.43 in 2001. Between 

2001 and 2006 expenditures for gasoline are expected to increase 

from $1,300 per household a year to $2,088 per household. 

Natural gas prices have also been affected by changes in the 

world oil market, but to a lesser extent than gasoline and heating 

6

oil prices. While natural gas spot prices recently fell, the natural 

gas market is likely to tighten over the next few months as the 

summer cooling demand picks up. Prices are projected to continue 

to increase as the winter heating season boosts natural gas demand. 

Electricity prices and expenditures are expected to change less 

over time compared with oil and natural gas. As is the case for all 

Americans, direct energy expenditures for the elderly, defined here 

as those age 65 and over, are comprised of the energy costs for running the household—that would be heating and cooling—and energy cost for transportation fuel. 

There are also indirect expenditures embodied in the energy component of the costs for goods and services, but I am just going to 

be speaking about the direct cost for energy. 

Isolating energy consumption among the elderly is difficult because the elderly live in a variety of housing arrangements. Many 

live alone or with elderly or non-elderly partners. Some live in extended family households, either with primary responsibility for energy costs on in situations where they are in the care of younger 

household members, so may have only partial or no responsibility 

for energy costs. Still others live in institutional or retirement facilities where they may or may not pay directly for energy. 

EIA’s own 2001 Residential Energy Consumption Survey shows 

that the average elderly household spends less per household on 

energy than non-elderly households because they often live alone or 

in two-person households. Compared to younger one- and two-person households, the elderly spend just about the same amount on 

energy. 

In terms of transportation use, the elderly drive quite a bit less 

than younger households, although when there are two or more elderly persons in all-elderly household, they tend to have two cars 

and tend to drive almost twice as many miles as a one-person elderly household. 

Looking at expenditures relative to household income, our data 

show that there is a floor of about $1,000 per household for energy 

expenditures regardless of income. Applying the generally higher 

2005 energy prices to 2001 consumption levels shows somewhat 

higher expenditures. Energy costs fall most heavily on the lowestincome households, which are relatively more prevalent for the elderly than for the rest of the population. 

For transportation expenditures we used the Department of 

Transportation’s National Household Travel Survey, and found 

that elderly households use their vehicles less than other households, and for any type of household composition, lower-income 

households drive less. Even so, low-income elderly households 

spend several hundred dollars per year on vehicle fuel. Because 

gasoline prices have recently increased so much more than household energy prices, the difference between 2001 consumption at 

2001 prices and the same consumption at today’s prices is relatively much larger than the increase for overall household energy 

costs. 

To the extent that energy consumption for both household and 

transportation use is different now than what it was in 2001, the 

annual energy bill will also be different, but adding household and 

7

transportation energy cost together, many low-income households, 

including low-income elderly, are now spending 10 to 20 percent of 

their income on energy. For comparison, higher-income Americans 

of all ages, those making more than $30,000 per year, spend on average about 7 to 10 percent of their income on energy. 

This concludes my statement, Mr. Chairman. I would be happy 

to respond to any questions. 

The CHAIRMAN. Ms. Anderson, did I understand your testimony 

to say that the homes of the elderly are less energy efficient generally speaking? 

Ms. ANDERSON. Generally speaking, elderly households tend to 

live in older homes that may be less energy efficient. I do not think 

we have exact statistics on energy efficiency, but they do tend to 

live in older homes. 

The CHAIRMAN. How significant do you anticipate technology to 

influence future energy consumption? I mean all the appliances we 

use today are more energy efficient than the ones we used to use, 

but do you see technology reducing these costs or at least holding 

them steady? 

Ms. ANDERSON. Well, we think there are two sides to that coin. 

Certainly, as we have seen over time, there has been an increase 

in energy efficiency of our appliances and of building shells. At the 

same time we are using more energy for a lot of the appliances. We 

have more appliances, computers, palm pilots, everything that has 

to be recharged, cell phones, and so there is some energy use there. 

Certainly over time we have seen energy intensity or consumption 

per household per capita decline. 

Whether we will continue to see those gains at that rate in the 

future is unclear, but there is certainly movement toward more efficiency in the major appliances that we do use in most of our 

homes. Buildings continue to become more energy efficient. 

The CHAIRMAN. As energy becomes more expensive, obviously the 

cost of buying new technologies, I suppose you could say, is relatively less expensive because of maintenance and energy use 

would be less and may defray those costs. But would it be a fair 

characterization to say that the elderly are usually less likely to 

buy new technologies and have the advantage of those things? 

I mean I am speaking really about myself. I am sort of computer 

technology, not illiterate but just about. I wonder if the elderly generally are less inclined to go for the new technologies? 

Ms. ANDERSON. I do not think that our survey collects statistics 

on that. If I am wrong, I will certainly correct that for the record. 

But anecdotally you certainly hear a lot of people talking about the 

fact that the elderly are less inclined to buy some new technology, 

maybe less inclined to be on the Web and less inclined to buy cell 

phones and palm pilots. 

The CHAIRMAN. If that is the case and that there are perhaps energy efficiencies to be gained and therefore costs saved, what can 

the Energy Information Administration do in terms or outreach to 

the elderly community to make them aware of what is out there 

that could save them money? 

Ms. ANDERSON. Well, I will tell you what the Department of Energy is doing now, is we have a website. We can also be reached 

by telephone or certainly reached by letter, and have brochures and 

8

information that is available on the Web that help all Americans 

conserve energy tips for reducing your summer cooling bill, tips on 

conserving fuel costs—and so there are opportunities that folks 

have ranging from using fans, using ceiling fans, setting thermostats to different levels, simple things about using shades during 

the day to help drive down cooling costs, and simple things that 

people can do to consolidate errands, to keep tires inflated, and 

keep cars tuned up. All of that is information that’s readily available to help shave off some of those costs at the margin and help 

reduce in the short term the average monthly energy bill. 

The CHAIRMAN. I know you made clear in your opening statement you obviously are not taking partisan positions, but we in the 

Senate are producing a fairly nonpartisan energy bill. Do you see 

that as helpful in reducing increases or will they actually result in 

some real savings in terms of energy costs and its impact on seniors? 

Ms. ANDERSON. The Secretary of Energy has certainly been on 

record of saying that the energy bill will go a long way toward increasing long-term supplies of energy to the extent that that helps 

all Americans whether through the diversity of supplies or, increasing supplies here at home, all of that can help contribute to reducing prices and reducing the volatility of prices that can help all 

Americans. 

The CHAIRMAN. I hope we get it to the President soon. 

Senator CRAIG. Senator CRAIG. Conrad, do you have questions you want to ask? 

Senator BURNS. No. He asked every one of them, and she answered every one of them. 

The CHAIRMAN. Sorry for taking your question there, Senator 

Burns. 

Senator CRAIG. Thank you, Mr. Chairman. 

Ms. Anderson, thank you. Based on known sources of supply, 

what are the demand projections for Third World economies? By 

that I mean how accurate do we expect those projections to be? In 

the past of course we have seen China now take off, if you will, and 

start reaching into the world market and pulling a great deal of 

supply out. Is there any indication, looking at the economic growth 

in China today and other emerging nations, that similar things will 

happen? We think we are driving, with the legislation we have on 

the floor, toward some stabilizing potentially, but with these new 

emergences, what are you looking at and what are you projecting? 

Ms. ANDERSON. Sir, we come out with projections every month 

that do tend to look at what is going on in developing countries, 

and we are looking very closely at China and India. We, like other 

organizations, make adjustments month to month to these forecasts, but we think that Chinese demand growth will continue to 

be as strong as—not quite as strong as it was in 2005, but will continue to be strong in 2005 and 2006 and beyond. For India, we do 

not project any declines in demand growth. Certainly we look at 

other countries as well, and do not see that there is going to be 

large diminishment in demand. As their economies grown, energy 

consumption grows as well. 

I can get you the exact figures that we have for the predictions 

for the short-term as well as all the way out to 2025. We do have 

9

those estimates. But certainly no demand abatement is foreseen as 

long as their economies grow, which is the main driver for energy 

demand. 

[Insert for the Record]

Oil Demand Projections.—Based on known sources of supply, what are (energy) 

demand projections for third world economics? 

The Energy Information Administration’s (EIA) International Energy Outlook 

2004 (IEO2004), released in April 2004, projects strong growth for worldwide energy 

demand over the 24-year projection period from 2001 to 2025. Total world consumption of marketed energy is expected to expand by 54 percent, from 404 quadrillion 

British thermal units (Btu) in 2001 to 623 quadrillion Btu in 2025. Developing nations of the world are expected to account for most of the increment in world energy 

consumption. In particular, energy demand in the emerging economies of developing 

Asia, which include China and India, is projected to more than double over the next 

quarter century. In the developing world as a whole, primary energy consumption 

is projected to grow at an average annual rate of 2.7 percent between 2001 and 

2025. In contrast, in the industrialized world—with its more mature energy-consuming nations—energy use is expected to grow at a much slower rate of 1.2 percent per year over the same period, and in the transitional economies of Eastern 

Europe and the former Soviet Union (EE/FSU) growth in energy demand is projected to average 1.5 percent per year. 

In the developing world, oil consumption is projected to increase for all end uses. 

In some countries where non-marketed fuels have been widely used in the past 

(such as fuel wood for cooking and home heating), diesel generators (as well as distributed generators, such as solar photovoltaics) are not sometimes being used to 

dissuade rural populations from decimating surrounding forests and vegetation—

most notably, in Sub-Saharan Africa, Central and South America, and Southest 

Asia. 

Because the infrastructure necessary to expand natural gas use has not been as 

widely established in the developing world as it has in the industrialized world, natural gas use is not expected to grow enough in the developing world to accommodate 

all of the increased demand for energy. 

Energy use in the developing nations (China, India, Central and South America, 

Africa, the Middle East, and Other Developing Asian nations) is projected to increase more rapidly than in other regions over the coming decades. Population 

growth and urbanization in populous China and India are expected to produce lare 

increases in demand for residential energy services, and rising incomes and rural 

electrification efforts are generally expected to bolster demand for electricity-using 

appliances in most of the developing countries. Given the current low market saturation of such appliances, rapid growth in demand for electricity is projected over 

the forecast period as air conditioning, refrigeration, and laundry equipment become 

more commonplace. China’s electricity supply system already is struggling to meet 

the demand of its customers, causing brownouts and curtailments. In South America, where air conditioning is more widely used, the electricity infrastructure is better established than in some of the other developing nations.

Senator CRAIG. In discussing crude oil prices you testified that 

projected growth in OPEC supplies is not expected to accommodate 

worldwide demand growth and that worldwide spare crude oil production capacity had diminished. Later you said that gas prices are 

projected to rise only slightly in the next 20 years due to increased 

production from OPEC and non-OPEC sources. At first glance at 

least these seem to be contradictory statements. Can you please 

clarify the assumptions on which those projections are based? 

Ms. ANDERSON. I hope that I said that non-OPEC supplies are 

not going to be adequate to maintain the increase in demand 

growth. It is non-OPEC supplies. We do expect that over the next 

20 years in part because of higher prices there will be long-term 

growth in world supplies as well as in some additional U.S. supply, 

and that would have the impact on long-term gasoline prices. So 

over the next 20 years we do anticipate that as new supplies come 

along, as there are some efficiencies worldwide, we would not exVerDate 0ct 09 2002 14:14 Dec 01, 2005 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 H:\DOCS\23940.TXT SAGING1 PsN: JOYCE
10

pect to see the kind of growth in prices as we have seen in the last 

few years. 

So that is what that is in reference to, for the longer term. We 

hope there will be some mitigation. 

Senator CRAIG. In regards to elderly driving significantly less 

than younger households, does your date make a distinction between those who drive less because of costs versus those who drive 

less because of age-related conditions? 

Ms. ANDERSON. No, sir, I do not believe that our data would go 

into the kind of rationale for why there would be differences. I can 

get back to you if we have that information, but I believe we just 

calculate data on miles traveled by age group, not due to a reason 

that might affect their behavior. 

Senator CRAIG. Thank you, Mr. Chairman. 

The CHAIRMAN. We have been joined by Senator Carper. Welcome, Tom. 

Senator CARPER. Thanks, Mr. Chairman. 

Hi, Ms. Anderson. 

Ms. ANDERSON. Good afternoon. 

Senator CARPER. How have they been doing? 

Ms. ANDERSON. Great. 

Senator CARPER. Are there any questions they have not asked 

you that you ought to be asked? 

Ms. ANDERSON. I do not think so, no, sir. 

Senator CARPER. I want to follow up on a couple of things that 

I heard them asking, if I could. One of the—it may have been our 

chairman—was talking about the energy bill and aspects of the energy bill, which we very much need a good balanced piece of legislation. Part of our energy bill will be production. Some will be renewable, some will be non-renewable. Part of the energy bill will 

focus on conservation. What I would like to do is just to maybe 

focus a little bit on conservation with respect to the elderly. What 

I would like to do is see if we could not tie that in with funding 

for LIHEAP. I understand the LIHEAP can be used in part our 

electric bills or our gas bills or oil bills. It can also be used I think 

for weatherization if I am not mistaken. 

Would you just take a minute and share with us any insights 

that you might have on how meaningful that has been, how worthwhile that has been? If this is not something that is within your 

purview, that is fine, but I just thought I would like to ask. 

Ms. ANDERSON. I regret that it is not within my purview. 

Senator CARPER. Why not? No, I am just——

Ms. ANDERSON. I could explain that too. 

Senator CARPER. Do you want to answer another question? Usually when we are asked questions that we cannot answer, we pretend that we are answering the question we have been asked, but 

then we just answer another one, sort of like we can stay on message. That is the way we do it. Do you want to try that? 

Ms. ANDERSON. Sure, why not? I will give it a shot. [Laughter.] 

Working for the Energy Information Administration, we do not 

really get involved in commenting on programs that DOE may 

have an interest in or programs of HHS. So I just do not have the 

numbers or the information on hand to opine about LIHEAP, but 

I know that the panel behind me knows a lot about LIHEAP. 

11

Senator CARPER. Oh, good. 

Ms. ANDERSON. They are going to be talking at length about——

Senator CARPER. I see them back there nodding their heads to 

say, ‘‘yes, we do know a lot.’’ 

Ms. ANDERSON. They are probably far more expert than I am 

about the provisions of LIHEAP and how that might be related to 

the current energy bill. I regret that I am not an expert in this 

area. 

Senator CARPER. That is OK. Let me ask one more if I could. Unfortunately, I am not going to be able to stay here for the second 

panel, so I am just going to be putting all this pressure on you. But 

when we look at the run-ups in gasoline prices and the cost of oil 

per barrel, we look at the run-ups in natural gas prices, and we 

see those spiking. I am wondering what kind of correlation is there 

between, say, increases in natural gas prices, increases in oil 

prices, with the actual costs that elderly people are incurring for 

their energy costs? 

Ms. ANDERSON. Natural gas prices, like heating oil and like gasoline prices, although closely follow crude oil prices, although natural gas prices somewhat less so than gasoline or heating oil. So 

as we see crude oil prices rise, we see that those increases do filter 

through to the major fuels, and that certainly would include natural gas. Natural gas prices are determined also in part by what 

happens here in the United States, because natural gas of course 

is not traded nearly as much as crude oil is, and so those prices 

tend to reflect different kinds of factors within the United States 

that have to do with U.S. production and storage here in the U.S. 

Senator CARPER. OK. A different kind of questions, and this is 

maybe asking you to look at the kind of expenditures that maybe 

our parents make for their energy costs and some idea of like the 

percentage of their income that maybe our parents or grandparents 

are spending for energy as compared to those who are a bit younger, their children and grandchildren. Any thoughts? Is it the same? 

Are they comparable? I seem to recall that—you may have mentioned it but I think before I got here—that the elderly are spending anywhere from 10 to 20 percent of their income for energy 

costs. How does that compare to the percentage that their children 

or grandchildren might be spending out of their income for energy 

costs? 

Ms. ANDERSON. If we look at low-income elderly, we get the 10 

to 20 percent figure. For significantly low-income elderly it would 

be higher. Compared to the average American, all Americans—excuse me—compared to all Americans in higher-income classes, perhaps making $30,000 a year or more, the percentage would be in 

the 7 to 10 percent category. We can break that down by income 

levels, but at those averages it is about half of the percentage of 

lower income households. 

Senator CARPER. Last question, and you can go anywhere you 

want with this one, but if you were just giving us some advice here 

in the Senate as to what we can do to really make a meaningful 

difference for folks, whether it is this summer, this winter, older 

Americans in our respective States, whether it is Idaho or Oregon 

or Montana or Delaware, but some things that we might want to 

consider doing more of, less of, better, to help meet their human 

12

needs Ms. Anderson. Regrettably, I am not in a position to advocate any policy actions. If my boss, the Secretary of Energy were 

here, he would say pass the energy bill. 

Senator CARPER. He is not here, but I am glad you are, and 

thanks for that advice. 

Ms. ANDERSON. Thank you very much. 

Senator CARPER. Thank you. 

Ms. ANDERSON. Thank you. 

The CHAIRMAN. Thank you very much, Ms. Anderson. We so appreciate your time and your attention to this issue. 

[The prepared statement of Ms. Anderson follows:]

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The CHAIRMAN. We will now call up our second panel. It consists 

of Nelda Barnett, a member of AARP Board of Directors. She is 

from Owensboro, KY; and Donna Harvey, executive director, Hawkeye Valley Area Agency on Aging from Waterloo, IA, and she is the 

president of National Association of Area Agencies on Aging; and 

then my constituent, Jim Slusher, executive director of Mid Columbia Community Action Council, The Dalles, OR. We welcome you 

all. 

Nelda, why do we not begin with you? 

STATEMENT OF NELDA BARNETT, MEMBER, AARP BOARD OF 

DIRECTORS, OWENSBORO, KY 

Ms. BARNETT. That is fine. Good afternoon, Mr. Chairman and 

committee members. Thank you for this opportunity to be able to 

testify on behalf of AARP. I am Nelda Barnett and I am from 

Owensboro, KY, and I am a member of the AARP Board of Directors. 

Older Americans face some of the most serious consequences to 

rising energy costs. My remarks will focus on five critical issues. 

First, energy prices are projected to continue their rise dramatically into the cold winter months this year. According to the Department of Energy, household expenditures this winter for natural 

gas are expected to rise to 9.4 percent higher. Heating oil expenditures are expected to rise 34 percent, and propane prices 22 percent. 

Second, older Americans devote a higher percentage of their total 

spending to residential energy costs. About 1 of every 4 low-income 

older households spend 19 percent or more of their entire income 

on home energy bills. 

Third, rapidly rising energy costs force older Americans to adjust 

their overall spending, sometimes resulting in life-threatening 

choices. AARP recently surveyed about 850 older Americans across 

the country to determine if they had taken any steps to deal with 

the rising energy costs. We have found 61 percent have limited the 

use of energy in their homes; 62 percent have raised their thermostats in hot weather, lowered their thermostats in cold weather; 48 

percent have limited their travel by automobile and 11 percent 

have turned to public transportation rather than driving their own 

car. A number have also delayed payment for their energy bills, 11 

percent, and/or their bills for other services, 14 percent. In addition, rising energy costs led 11 percent of those surveyed to apply 

for energy assistance. 

Most troubling, however, are the significant number of older 

Americans that have taken more serious measures to account for 

their rising energy costs. Twelve percent have been forced to limit 

or do without food. Eleven percent have reduced or done without 

medical services, and 10 percent have done without their prescriptions. 

As we experience these hot summer days and look ahead to another cold winter, the safety and security of older Americans should 

not be compromised. 

Fourth, increased energy costs impact older Americans’ reliance 

on transportation and transportation services. Rising energy costs 

are also reflected in gasoline prices, and 90 percent of trips by older 

29

persons are by private vehicle. Transportation is the second highest 

expenditure category for households age 45 and above, second only 

to housing. Transportation consumes on average 19 percent of 

spending in these households. Services for seniors that rely on cars, 

vans and trucks, such as transportation services and meals on 

wheels, are severely challenged by the sharp increase in gasoline 

prices. Many meals programs have had little, if any, increases in 

funding and are operating in deficit to cover the higher gas costs. 

Higher gas prices particularly affect transportation service providers in rural areas where destinations are at greater distance 

from one another. 

Finally, Federal assistance programs such as the Low-Income 

Energy Assistance Program, or LIHEAP, and the Weatherization 

Assistance Program, offer life-saving assistance. LIHEAP provides 

financial assistance for home heating and cooling. Without this program older Americans would have to make an unacceptable choice, 

a warm home during the cold winter, or life-sustaining food and 

medicines. This winter requests for energy assistance are expected 

to rise at an all-time high, and LIHEAP has struggled to keep pace 

with the ever-increasing number of eligible households. 

The proposed LIHEAP budget will assist only 14 percent of the 

estimated 34 million eligible recipients. LIHEAP needs at least 3.6 

billion for 2006 to simply maintain the assistance level it provided 

in 1982. 

The Weatherization Assistance Program, another valuable Federal program, offers services to low-income households free of 

charge, reducing the burden of their energy costs. We commend 

Members of Congress for your continued support of this program. 

In conclusion, AARP looks forward to working with the members 

of this committee and Congress to ensure the welfare of older 

Americans at a time when burgeoning energy costs have the potential to threaten their safety, health and welfare. 

Thank you very much for this opportunity. 

[The prepared statement of Ms. Barnett follows:]

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The CHAIRMAN. Thank you, Nelda. I think you said that Meals 

on Wheels programs do not receive funding for increased energy 

costs. 

Ms. BARNETT. They have not, and what they are planning to do, 

it looks like, is go to one meal, one hot meal and frozen meals for 

the rest of the week. 

The CHAIRMAN. So that is how they are dealing with the deficit? 

Ms. BARNETT. That is how they are doing it, but you have to remember, most of our older people that are in a Meals on Wheels 

category are the ones that only see that meal driver from one day 

to the next, so we are forcing them into more isolated——

The CHAIRMAN. So they may have been getting two meals before 

but will now only get one? 

Ms. BARNETT. No. They would be getting probably the five meals, 

but there would be one hot meal and the rest will be frozen. 

The CHAIRMAN. What kind of frozen? 

Ms. BARNETT. Well——

The CHAIRMAN. Do they have the ability to cook? 

Ms. BARNETT. They usually have the ability to reheat it, to reconstitute it through maybe microwave or through hot water, but they 

are able. You know, most of the homes they have gone in, they 

know this. 

The CHAIRMAN. You are talking about they get a TV dinner or 

something? 

Ms. BARNETT. Yes, something of that nature. 

The CHAIRMAN. Do they have peas in the TV dinner? I am just 

kidding. That is my business. [Laughter.] 

Ms. BARNETT. Or it could be a shelf meal in some instances, 

where they reconstitute it with water. 

The CHAIRMAN. I was just kidding you on this point. 

Ms. BARNETT. I know you were. 

The CHAIRMAN. A lot of your members live in assisted living facilities. How are increased costs with assisted living facilities impacting seniors? Can you discern whether they are passing on costs 

to them? 

Ms. BARNETT. In a lot of cases in the lower income housing, they 

cannot provide any assisted living. 

The CHAIRMAN. I see. 

Ms. BARNETT. They have to have coordinated services in some 

way, but most of your assisted living is coming through your more 

affluent senior who can afford to pay for it. 

The CHAIRMAN. One more thing on the frozen dinners. Are they 

well rounded? I mean are the same kind of things——

Ms. BARNETT. Let me say that I have not had one of those meals. 

[Laughter.] 

The CHAIRMAN. I am really just more asking a nutritional question. 

Ms. BARNETT. Right. Well, they would be nutritionally balanced. 

We have to have that. 

The CHAIRMAN. OK. 

Ms. BARNETT. That is a requirement of the program, and we do 

have the nutritionists who oversee that. 

The CHAIRMAN. Thank you. 

Senator CRAIG.

40

Senator CRAIG. Images of the Jolly Green Giant bouncing 

through my head. [Laughter.] 

Ms. BARNETT. We will get the peas. [Laughter.] 

Senator CRAIG. Nelda, you commented that the Federal assistance programs such as Weatherization Assistance Program are 

reaching only a fraction of the eligible households. Why is that so? 

Are there barriers other than financial constraints? If so, what are 

the barriers to reaching more people? 

Ms. BARNETT. Some of this could be limited outreach of where 

people are not aware of the program, and where we would know 

the programs have done everything they could to try to find these 

people. It may be that there are some that are missing it. 

Senator CRAIG. OK, that is all I have. 

The CHAIRMAN. We have been joined by Senator Talent, who is 

one of the brighter talents in——

Senator TALENT. Mr. Chairman, you really are too kind. 

I understand we have not yet heard from the other witnesses? 

The CHAIRMAN. We have not. 

Senator TALENT. I think I will suspend and wait until they do. 

The CHAIRMAN. Thank you, Nelda. 

Donna, we will turn to you. 

STATEMENT OF DONNA K. HARVEY, PRESIDENT, NATIONAL 

ASSOCIATION OF AREA AGENCIES ON AGING, AND EXECUTIVE DIRECTOR, HAWKEYE VALLEY AREA AGENCY ON 

AGING, INC., WATERLOO, IA 

Ms. HARVEY. Thank you, Chairman Smith, Ranking Member 

Kohl, who had to leave us, and other distinguished members of the 

committee. As stated, my name is Donna Harvey and I am the current executive director of Hawkeye Valley Area Agency on Aging 

in Waterloo, IA. If Senator Grassley were here he would tell you 

that is a suburb of New Hartford. I currently serve as the president 

of the National Association of Area Agencies on Aging, which represents 655 area agencies on aging, and 240 Title VI Native American aging programs across this Nation, and we have been doing 

that for 30 years. 

I want to thank the committee for inviting me here today to testify on the impact of higher energy costs on older adults, and the 

AAA sponsored transportation and nutrition programs that serve 

America’s seniors. 

Currently older adults over the age of 65 spend approximately 15 

percent of their income on transportation. As a result of high fuel 

costs many adults have had to curtail their driving to make only 

the most essential trips. For the 10 percent of seniors 65 and older 

living in poverty and the 30 percent of older Americans classified 

as low income, rising gasoline prices can mean making tough 

choices between maintaining their mobility and meeting other necessities of life. 

Cutbacks due to rising fuel costs are not just impacting individual older drivers, they are also impacting the AAA sponsored 

transportation and nutrition programs that older adults rely on 

due in part to the fact that Older Americans Act funding for services such as transportation has not been able to keep pace with inflation and have made it necessary for AAAs to attempt to find adVerDate 0ct 09 2002 14:14 Dec 01, 2005 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 H:\DOCS\23940.TXT SAGING1 PsN: JOYCE
41

ditional funding streams to supplement the Older Americans Act 

funding. AAAs have drawn upon SSBG, DOT funds and other private and foundation grants in an attempt to cobble together the 

funding to continue to provide these essential services. 

Mr. Chairman, despite their best efforts to juggle multiple funding sources, many AAAs are now forced to shift additional costs to 

transportation recipients, as well as to make cutbacks in the level 

of transportation services they provide. 

At my own agency we have had to make several adjustments to 

the transportation services we can provide to seniors as a result of 

increased operating costs passed on to us from our local transit entity. We have been forced to restrict destinations and only fund 

transportation for seniors to go to congregate meals, grocery shopping, medical appointments and the pharmacy. Consequently, 

transportation services have been eliminated for all non-essential 

trips such as family visits, general shopping and work or volunteer 

activities. This limitation has unavoidably impacted the quality of 

life for seniors in our area. 

One of our main transportation providers now predicts that fuel 

expenditures for the fiscal year starting July 1 will increase by 20 

percent over last year’s expenses. To save fuel the provider has already taken steps to transition its fleet of vehicles to more fuel efficient mini vans where possible. However, they are limited in using 

these types of vehicles due to passenger capacity and accessibility 

considerations. 

In addition to dealing with increased fuel costs, this provider has 

been saddled with a 25 percent hike in its insurance premiums, 

equivalent to $500 per vehicle in its fleet. As a result of these escalating operating expenses the cost of providing a trip has more 

than doubled. Rising gasoline prices are especially burdensome to 

AAA programs that depend heavily on volunteers. My AAA currently reimburses volunteer drivers that deliver meals from preparation sites to congregate sites at the rate of 29 cents per mile. 

Within the last month many of our volunteers have requested an 

increase in the reimbursement to cover their rising fuel expenses, 

which we have not been able to provide. In addition, home-delivered meal directors report that uncompensated Meals on Wheels 

volunteers are decreasing their days of service due to the rising 

fuel costs. 

Mr. Chairman, in your home State the Community Connections 

of Northeast Oregon AAA based in La Grande, has reported their 

agency’s fuel costs have increased 20 percent this fiscal year alone. 

This year the AAA has been able to maintain its commitment to 

serving the area’s older adults only because it has successfully 

tapped into two new funding sources from the FTA under the Section 5310 formula grant and the Section 5311 rural formula grant. 

The AAA has also redesigned its transportation program to deal 

with the increased demands by limiting its services. 

Mr. Chairman, at the same time that AAAs are being confronted 

with growing costs in operating their senior transportation and 

meal programs, Older Americans Act Title III funding has remained largely level funded. With the reauthorization later this 

year Congress will have the opportunity to assess the increased 

42

cost of providing Older Americans Act services, such as transportation, and establish new authorization levels. 

In addition, with the reauthorization of the TEA–21 this year, 

Congress has indicated its willingness to further invest in senior 

transportation needs through the FTA’s section 5310 formula 

grant. We would also ask that more flexibility be allowed in those 

programs to allow the monies to go to operating costs rather than 

capital replacement. 

In conclusion, all Americans have been feeling the pain of higher 

gasoline prices, but this pain is compounded for older Americans on 

fixed incomes who can ill afford the rising cost of gasoline. 

We encourage Congress to make additional resources available to 

AAAs to better meet the growing demand for and cost of providing 

senior transportation and meal programs. The health, mobility and 

independence of America’s seniors depend upon it. 

Thank you for holding this very important hearing. 

[The prepared statement of Ms. Harvey follows:]

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The CHAIRMAN. Thank you, Donna, for your testimony, your contribution here. I think it is probably logical to conclude that at 

least seniors who live in cities have public transportation alternatives, but places like La Grande, OR really do not, and really do 

depend on these kind of services. When we reauthorize the Older 

Americans Act, should there be included in there some sort of formula as to rural and city to make sure that some of these more 

distant places not be cutoff in times like these? 

Ms. HARVEY. That has been a longstanding debate. I have been 

in the network 20 years, and Nelda was there longer than I was, 

but personally serving a rural area, I agree that it is time we look 

at it. I serve an urban area of 50,000 people, if you want to call 

that urban, and certainly the challenges I have in Waterloo-Cedar 

Falls is not what I have in the counties where I have no physicians 

or grocery stores or pharmacies available. Because money comes 

solely on income and numbers of seniors, it really does not allow 

adequate funding to do the extra outreach and provision of services 

to those isolated seniors in rural areas. 

The CHAIRMAN. Well, the question I asked, is it a subject of some 

controversy in your organization? 

Ms. HARVEY. Yes. 

The CHAIRMAN. Sorry to put you on the hot seat. 

Ms. HARVEY. Oh, no, that’s fine. 

The CHAIRMAN. I am just trying to look at the inequities and 

what alternatives seniors might have when they live in different 

places, and I do not know what alternatives they would have in La 

Grande or in Iowa. You are from Iowa? 

Ms. HARVEY. I am from Iowa. I might tell you, in Iowa we use 

some intergovernmental transfer funds, the dreaded word, but 

through those funds we build in a rural factor in the allocation, 

and it was extremely beneficial to the rural areas. Southwest Iowa 

is very, very poverty stricken, very few numbers of seniors, very 

few services, and for the first time they felt like they really received funding and they could do some creative program and meet 

greater needs of seniors. I think it is time that we look at that. 

The CHAIRMAN. Does Missouri have any good ideas or Senator 

Talent, any questions? 

Senator TALENT. Missouri has plenty of good ideas. I do not know 

about Missouri’s junior Senator today. 

You mentioned expanding 5310 formula grants to include assistance with operating costs such as vehicle maintenance, et cetera, 

But you also talked about the need to expand funding for Section 

5310. Are there funds in that section now going unused because we 

do not have a broad enough definition, or is this a case where we 

are going to need additional funds, but then also allow them to be 

used for these transportation needs? 

Ms. HARVEY. I believe it is where we are going to need additional 

funds. In a previous life I was a transportation provider, and it was 

always a challenge to look at those monies being primarily targeted 

toward capital replacement when in fact that may not be where 

your challenge was. It was really if you could expand services. Certainly the OATS system in Missouri is far and above some other 

services that other States have, but in Iowa it is a huge challenge. 

52

When you see that we have decreased services to seniors and yet 

they are purchasing new vehicles, it does not seem to correlate. 

Senator TALENT. Right. So we may need additional funding but 

we need to give the managers the flexibility to use that funding in 

a way that will meet the transportation needs the best. 

Ms. HARVEY. Certainly, certainly. 

Senator TALENT. I was going to raise the issue you raised, Mr. 

Chairman, because this goes to the heart of what I see as the ability to provide services to seniors, and in fact, really to all needy 

people in rural areas. I see it all the time in health care, for example. We can do wonders with rural health clinics, but if you cannot 

get people to the clinics that is a major problem. 

So I think, notwithstanding the understandable maybe division 

within your organization, I think we need to look at this. Maybe 

some kind of an automatic surcharge, not surcharge but extra payment when fuel costs go above a certain amount for providers in 

rural areas because if they are not driving these folks around to 

get them from one place to another, there is nothing you can do 

in any of these areas. 

Ms. HARVEY. Exactly. 

Senator TALENT. I understand why you may not want to comment on that because the concern is that it will come out of somebody else’s funding, but it is just so crucial in rural areas. 

Ms. HARVEY. It truly is. If you think of the home care agencies 

that are facing the very same challenges, you know, how do you get 

to someone’s home to provide homemaker services without incurring the extra gasoline costs for reimbursement. 

Senator TALENT. It goes both ways. 

Ms. HARVEY. Exactly. 

Senator TALENT. In order to save money in other areas like to 

expand Tele-health, for example, which I think is hugely important 

for the seniors and everybody, but you have to get the patient to 

where they can set up the Tele-health, or even if you set it up in 

their home, you have to get the health care professional at least 

sometimes to that home. 

Ms. HARVEY. Exactly. 

Senator TALENT. So your transportation costs may be going up 

in efforts that will provide better care and lower cost as regards 

other programs. 

Ms. BARNETT. Right. 

Senator TALENT. That is a good point. 

Thank you, Mr. Chairman. 

The CHAIRMAN. We will take the controversy from your organization and bring it here. We are not used to controversy in the Senate. 

Senator TALENT. We do not ever have to deal with that. 

The CHAIRMAN. It is a very good idea, will—you have given us, 

all of you, have given us some ideas for when we take up the Older 

Americans Act reauthorization. 

Thank you, Donna. 

Jim, you have come a long way. The Oregon Trail is a long way 

between Washington, DC, and The Dalles, OR, and we appreciate 

your efforts to be here, so we invite your testimony now. 

53

STATEMENT OF JIM SLUSHER, EXECUTIVE DIRECTOR, MID 

COLUMBIA COMMUNITY ACTION COUNCIL 

Mr. SLUSHER. Thank you, Senator. Mr. Chairman, members of 

the committee, good afternoon. My name is Jim Slusher. I am the 

executive director for Mid Columbia Community Action Council. 

We are a small, private nonprofit community action agency located in North Central Oregon, along the Columbia River Gorge. 

Our agency serves three rural counties, Hood River, Wasco and 

Sherman, with our mission being to eliminate the causes and conditions of poverty that exist in our area. 

I am also here today representing Oregon’s 18 community action 

agencies, and all of us want to let you know about the rising cost 

of energy for seniors and people with disabilities and the impact it 

has on their lives, not only from a financial standpoint but also 

from a health and safety issue. 

In the past year our State has seen the price of home heating 

oil increase by at least 61 percent, natural gas prices by 18 percent 

just this past winter, coupled with another 18.7 percent increase 

just a few years ago. In addition, Oregon’s two largest utilities have 

raised their rates between 16 and 20 percent, and currently have 

a request in to the Oregon Public Utility Commission for small rate 

increases this fall. 

These continued rising energy costs have a dramatic effect on 

seniors’ lives, as they are often faced with difficult choices between 

heating their homes, purchasing necessary prescription drugs, or 

eating healthy, balanced nutritious meals. I believe we can and 

should do something about seniors not having to worry about staying warm in the winter by providing more resources to help this 

growing demand. 

In January Oregon’s community action agencies produced a snapshot report on the status of the energy assistance situation. This 

report clearly shows that Oregon had over 25,000 households waiting for energy assistance, but the agencies had no money to help 

them, and many of these households are seniors. 

My agency operates the Federal Low-Income Energy Assistance 

program—on the East Coast they call it LIHEAP, with the H; on 

the West Cost it is LIEAP—as well as Oregon’s energy assistance 

program, OEA. This past year nearly 70 percent of our funds assisted senior or disabled households. This leaves very little funding 

for the general low-income population, for families who have children under the age of 6, over the age of 6, and many poor working 

households. 

More seniors accessing the program has been a growing trend 

the past few years, and recognizing as more seniors continue to access the program, it will leave even less assistance available to the 

general population. 

In addition to the Federal LIEAP dollars or about 23 million, Oregon raises an additional $15 million in energy assistance through 

our Low-Income Energy Assistance Meter Charge Program. Otherwise, Oregon’s situation would be much worse than it currently is 

today. 

I would like to thank Senators and Congressmen and women 

who have recognized the need for low-income energy assistance and 

54

who have helped in the fight for more low-income energy assistance 

funding, which is sorely and desperately needed. 

I want to personally thank Oregon Senators Gordon Smith and 

Ron Wyden for their hard work in fighting to get more low-income 

energy assistance funds released, thus allowing us to help thousands more people who would have otherwise gone without this assistance. 

In closing I would like to leave you with this thought: what can 

Government do to help? We have a couple of obvious options: (1) 

work on getting the prices of energy lowered or reduced; or (2) by 

raising the amount of the current energy assistance budget to meet 

growing demand. 

Thank you for allowing me to be here today to speak to you on 

the important issue of the dramatic rising costs of energy and its 

effect on low-income seniors, and I would also be happy to answer 

any questions that you may have. 

[The prepared statement of Mr. Slusher follows:]

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The CHAIRMAN. Thank you very much, Jim. Has demand for assistance for the elderly increased at a higher rate than other lowincome segments of the population in the Mid Columbia——

Mr. SLUSHER. In my area it has. I actually started in this program in 1977 before it was Low-Income Energy Assistance Program, and over the years we have seen an increase in the number 

of seniors that are using the program and it is now as high as 

nearly 70 percent. So when I open my doors to the general public 

on December 1—because seniors are given priority, seniors and 

people with disabilities are given priority, and we open that program to them in November. When we open our doors December 1, 

that is open to the general population, and only 30 percent of the 

funds remain. That is including the $15 million that Oregon raises 

itself. So without that 15 million we would be severely hampered. 

My agency was the front of the Oregon snapshot, when at 11 

o’clock the night before, on November 30, we had people lined up 

at our door. When we opened our doors at 8 o’clock there were 

nearly 300 people standing in line to get assistance that had started from 11 o’clock the night before. 

The CHAIRMAN. Whenever I drive through your community I 

marvel at that great hydroelectric dam there, and what a tremendous public asset that is. Do the seniors you serve understand the 

relationship of that dam and its non-use for creating energy much 

any more? Do they understand what that means to them? 

Mr. SLUSHER. Well, I think they do when they get ready to go 

pay their energy bills. I think they understand that the price has 

gone up, that they are not as able to afford that as well as they 

had in the past because of the rising costs. So I think they know 

it is there, but it is not always of value to us to. 

The CHAIRMAN. Is that a source of frustration to them like it is 

to me? 

Mr. SLUSHER. I believe that it is too. 

If I could expand just a little bit, one of the things from some 

earlier questions. Fifteen percent of the Low-Income Energy Assistance Program goes toward weatherization services, so we try to do 

a longer term effect. We also do energy education with our seniors 

and with people that are on the program as well, trying to teach 

them to reduce energy, reduce their energy consumption. It is one 

of the things that they do have some control over. 

So in addition to trying to provide energy assistance, weatherization and some energy education to help them reduce their bills, but 

we have seniors that live on $774 a month Social Security. Their 

energy bill sometimes is as high as $200 a month. Luckily, this 

past winter was not a severe winter for us, but if you know anything about the Columbia River Gorge, it can be 114 or 115 in the 

summertime, and it can be 30-mile-an-hour freezing winds in the 

wintertime. So we do have extreme temperatures that require a lot 

of energy. 

The CHAIRMAN. You no doubt see some very heart-rending cases 

of folks that live there, and I just applaud you for what you are 

doing and thank you for your public service. 

Mr. SLUSHER. Thank you. 

The CHAIRMAN. Senator Talent. 

58

Senator TALENT. Since Mr. Slusher referred to it, and you said 

it also, Mr. Chairman, I just want to comment that it is important 

to focus on the fact that rising energy prices have a human cost. 

I think for a while people adopted almost an abstract view here toward energy, a kind of a ‘‘well, you know, if gas prices go up 50 

cents that will cause investment in this area and that will be good 

for this reason and that reason,’’ and a lot of people were speculating that high energy prices might actually be a good thing. 

There is an enormous human cost to it in terms of lost jobs, and 

of course, as in everything else, whenever something gets harder, 

it is the people who are closest to the margin in the first place who 

suffer the most, which in many cases is seniors on a fixed income. 

So you all see it day to day, and I appreciate your raising that 

point with regard to hydro. I mean let us use the energy that we 

have, keep these costs as low as we can, and then keep the economy strong so we can help the needy. 

The CHAIRMAN. The interesting thing about the hydro issue is 

they live where this tremendous hydroelectric dam is located, and 

under a Federal court order right now it is not allowed to operate 

like it certainly can. The Pacific Northwest is 70 percent dependent 

upon hydroelectricity, and so the order is in place to spill water 

over the dams so that the fingerlings can get spilled hundreds of 

feet as opposed to barged around. So when you spill you do not create energy, and there is a consequence to energy prices of the Pacific Northwest, which used to be a very, very good deal, now are 

frankly little different from other places in the country. 

It is debatable whether it is helping fish or actually killing more 

fish, but I know it is hurting seniors and it is certainly hurting industries in his community that have shut down as a result of nonavailability of electricity. So the human cost to this is staggering 

in a community like The Dalles, OR, and it is a great tragedy. It 

is a human tragedy. Obviously, where there are alternatives for environmental mitigation we ought to pursue them, but sometimes 

we do not factor in the human price that is being paid, and it is 

very high, and in my view, higher than it needs to be. 

Senator TALENT. I could not agree more. You sound like somebody from Missouri, Mr. Chairman. We have a very clear view on 

these things in Missouri. 

The CHAIRMAN. Very, very frustrated. 

Senator TALENT. The kind of things that will get us prosperity 

in the long run and help the needy in the long run are also better 

for the environment in the long run. You cannot have a poor country with high environmental standards, and we are getting off the 

subject of the hearing now, but I appreciate your comments, Mr. 

Chairman. 

The CHAIRMAN. I think it is one of the reasons why an energy 

bill is important because it really does go to the bottom line as it 

impacts the most vulnerable of our citizens, and it is affecting them 

probably disproportionately. 

You had a comment? 

Mr. SLUSHER. Well, my comment was my mother lives in Missouri, so I am partially from Missouri. 

Senator TALENT. Oh, Mr. Slusher. 

Mr. SLUSHER. Sedalia. 

59

Senator TALENT. Sedalia. 

Mr. SLUSHER. Yes. She said, ‘‘My bill this last month, my electric bill was $195. Would you please tell those people to get the price 

of energy down?’’ 

Senator TALENT. Yes, she is right. 

Mr. SLUSHER. It is very high for this time of the year for her. 

Senator TALENT. Do you get to visit very often? 

Mr. SLUSHER. Every now and then. 

Senator TALENT. Those beautiful wide streets and those great 

trees in Sedalia? 

Mr. SLUSHER. Oh, you bet. 

Ms. HARVEY. Good peaches. 

Senator TALENT. Come sometime for the State fair. 

Mr. SLUSHER. I have been there for that. Thank you. 

Senator TALENT. You have to stay at your mom’s house though 

because there are not any hotel rooms available. [Laughter.] 

You are invited too, Mr. Chairman, we would love to have you. 

The CHAIRMAN. I would love to come. 

Nelda, Donna, Jim, thank you so much for traveling all this way 

to add I think measurably to the public record in the U.S. Senate, 

and in the Aging Committee we hold these hearings to put light 

and heat on issues of real urgency, and we have been speaking of 

one today. So to add to the debate on the energy bill, we have held 

this hearing and you have contributed tremendously. Thank you. 

We are adjourned. 

[Whereupon, at 4:10 p.m., the committee was adjourned.] 

(61)

A P P E N D I X 

PREPARED STATEMENT OF SENATOR TALENT

This is a timely hearing, as we are in the middle of debating an energy bill that 

we hope to pass this summer. 

The hearing highlights an important issue—energy costs are too high for all 

Americans, and recent increases hit the elderly especially hard, as many are on 

fixed incomes. 

This disproportionate impact makes imperative passing an energy bill that increases supply of conventional sources of energy while laying the foundation for increased use of new and renewable sources of energy to bring down the cost of energy. 

The bill is being discussed on the floor even as we proceed with this hearing. If 

it passes, it would: 

Increase the production of ethanol, both to reduce the cost of gasoline and also 

to create jobs and reduce our dependence on foreign oil. 

Improve the reliability of our electric grid, so that we don’t face blackouts when 

demand for electricity is at its highest. 

Through conservation and efficiency measures, reduce demand for electricity by 

50,000 MW by 2020, preventing the need for up to 170 300–MW power plants, and 

reduce the need for 1.1 trillion cubic feet of gas, both of which wil help keep energy 

prices down. 

Encourage the development of renewable resources, clean coal, and nuclear power, 

which will provide cheaper and cleaner sources of energy. 

Encourage the importation of liquefied natural gas (LNG) to increase natural gas 

supply, thereby reducing prices to heat homes and produce electricity. 

Reduce the price of gasoline, natural gas, and home heating oil by allowing states 

to decide whether to allow drilling offshore to increase oil and gas supply. 

Fund research and development for hydrogen as a primary energy source, new 

and more efficient lighting, and other innovative technologies. 

These measures are our best hope to reduce the current cost of energy. Had we 

passed a bill four years ago when we first took up an energy bill, we may have 

avoided some of this supply-induced price spikes. 

I look forward to hearing your ideas on helping our nation’s seniors with respect 

to energy costs. 

QUESTIONS FROM SENATOR TALENT TO MARGOT ANDERSON

Question. Has EIA factored into its figures increases in ethanol production and 

increased oil and gas drilling into its price projections? 

Answer. EIA’s Annual Energy Outlook 2005 (AEO2005), which was released on 

the EIA website on February 11, 2005, does factor increased production for ethanol 

into its price projections for transportation fuels. The AEO2005 assumes that the 

United States will consume several billion gallons per year of renewables (mostly 

ethanol blended into gasoline) in transportation fuels and this number will increase 

by an average of 2.2 percent per year between 2003 and 2025. The price projections 

for transportation fuels using ethanol blends are highly dependent on the assumptions of the world price for crude oil. Currently, with West Texas Intermediate 

(WTI) crude oil priced at around $60 per barrel, the use of ethanol in gasoline actually lowers the pump price of blended gasoline since ethanol is less expensive than 

WTI. If crude oil prices were to decline to $25 (adjusted for inflation in 2003 dollars) 

per barrel in 2010 as the AEO2005 assumes, then use of ethanol in gasoline would 

be expected to increase the pump price by a few cents per gallon. 

Increases in oil and gas drilling are the result of growing demand for petroleum 

and natural gas as well as increasing crude oil and natural gas prices. In the very 

near term, end use prices will not be affected by current increases in drilling activVerDate 0ct 09 2002 14:14 Dec 01, 2005 Jkt 000000 PO 00000 Frm 00065 Fmt 6601 Sfmt 6601 H:\DOCS\23940.TXT SAGING1 PsN: JOYCE
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ity. However, the price incentives for increased exploration and drilling will add to 

productive capacity, increasing supply and thus relieving some of the upward price 

pressure caused by rising demand for fossil fuels. 

Question. The studies you reference compare 2001 energy costs to those in 2005 

and 2006 projections. How much more would LIHEAP funding have to increase in 

order to keep LIHEAP support comparable to levels in 2001? Would this level of 

funding fully meet the need in FY 2006? 

Answer. It is difficult to determine what constitutes either ‘‘comparable’’ support 

or ‘‘fully’’ meeting needs in FY 2006. Between 2001 and 2006 fuel oil prices are projected to increase about 60 percent, natural gas prices about 21 percent, and electricity prices about 12 percent. 

LIHEAP has historically provided a certain amount of energy assistance per 

household that covers some of the home energy costs. Whether increased funding 

would ‘‘fully meet the need’’ is difficult for EIA to answer since it raises many more 

questions about the goals of the program, eligibility, program effectiveness, etc., all 

of which are outside EIA’s scope and fall within the purview of the Department of 

Health and Human Services, which adminsters the LIHEAP program. 

QUESTIONS FROM SENATOR TALENT TO MS. BARNETT

Question. On p. 8 of your testimony, you mention that the proposed $2 billion 

budget would reach only 14% of the estimated 34 million eligible recipients, and 

that it would take $3 billion in FY 2006 to fund LIHEAP at 1982 levels. What level 

of funding would be required to meet the needs of all eligible recipients, after state 

and local help is factored in? 

Answer. The most recent HHS LIHEAP estimates available show that there were 

32,588,222 eligible households (averaging 2001, 2002 and 2003 data) and approximately 5,768,805 received assistance in 2003. The figure of $3 billion needed is 

based on a raw percentage of eligible households served in prior years. This figure 

cannot be used to estimate total funding needs in future years; states provide varying amounts of assistance and the number of eligibles is dependent upon local and 

national economic conditions. 

The best estimates of the total number of eligible households can be found in the 

LIHEAP Report to Congress http://www.acf.hhs.gov/programs/liheap/cps—eligibles.htm). A 2002 AARP report entitled, ‘‘Energy and Telephone Assistance in the 

States’’ details how many individuals received various forms of assistance, and the 

states providing varying amounts of assistance for each category of assistance. 

QUESTIONS FROM SENATOR TALENT TO MS. HARVEY

Question. On. p 7–8 of your testimony, you mention that Section 5310 formula 

grants should be expanded to include assistance with operating costs such as vehicle 

maintenance, insurance premiums, and volunteer recruitment and training. Are 

there Section 5310 funds that are now going unused because of the need to broaden 

the eligibility definition? 

Answer. Section 5310 formula grant funds are not going unused. On the contrary, 

from what n4a has heard from Area Agencies on Aging and local transportation providers there is a need for additional funding and greater flexibility in the use of the 

funding to cover rising fuel costs and insurance premiums. While capital assistance 

funds are being fully utilized, many aging service providers have had to cut back 

transportation services and reduce the amount of rides they provide due to growing 

operating costs causing vehicles to remain idle when they could be more fully utilized if funds were better directed to areas of need. 

Question. On p. 8 of your testimony, you mention that the Older Americans Act 

has been flat funded, though fuel costs have risen 74 percent over the last five 

years. What level of additional funding for the Older Americans Act would meet the 

needs, after LIHEAP and other programs are factored in? 

Answer. As noted, from 2000 to April 2005, gasoline prices have skyrocketed by 

an average of $.95 a gallon, an increase of 74 percent, with retail prices rising from 

$1.28 to $2.24 a gallon. This year alone, gasoline prices have jumped an average 

of over $.40 a gallon. During this same time, Older Americans Act Title III appropriations which fund Area Agency on Aging transportation services and home-delivered and congregate nutrition programs have received relatively nominal increases 

and in many instances flat or reduced funding. 

N4A believes that authorized funding levels of all the titles of the Older Americans Act need to be raised by at least 25 percent over five years to compensate for 

inflation and the rising costs of providing services. This increase is required to enVerDate 0ct 09 2002 14:14 Dec 01, 2005 Jkt 000000 PO 00000 Frm 00066 Fmt 6601 Sfmt 6601 H:\DOCS\23940.TXT SAGING1 PsN: JOYCE
63

sure that the nation has the necessary resources to adequately serve the projected 

growth in the number of older adults and is essential to meet the needs of the nation’s aging baby boomers—with a baby boomer projected to turn age 60 and become 

eligible for Older Americans Act services every 7.7 seconds beginning January 1, 

2006.

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