More face heating fuel crises

Friday, Jan. 23, 2009

Click here to enlarge this photo Staff photo by REID SILVERMAN Preston Day, a Southern Maryland Oil employee for 15 years, refills a tank at a home in California recently. Day said the busiest time of year is from October through April, when he makes about 30 runs a day. E-Mail This Article | Print This Story

Justin McLean didn't know what he was going to do.

His work as a painter had drastically slowed by September. Not only was he on the verge of a utility cutoff, but he didn't know how he would fill his heating oil tank and keep his 3-year-old daughter warm through the winter. The Huntingtown resident had never been in such a position before.

Back in August, long before blustery winds and cold temperatures made their way to Southern Maryland, residents were beginning to worry about how $4-a-gallon gasoline was going to translate into higher heating oil prices.

But despite a rapid drop in crude oil prices over the last couple of months that has brought prices down 20 to 30 percent from last winter, more people are in need this winter, mostly due to increased job losses and home foreclosures that have become common in a tough economy, local assistance program officials say.

And because many local heating oil companies purchased their product in bulk to protect consumers from escalating prices, residents haven't yet seen the effects of much lower crude oil costs in their propane or oil tanks as they have at the gas pump.

"We are overwhelmed with applications," said Swynice Hawkins, executive director of Southern Maryland Tri-County Community Action Committee, which runs home energy and bill assistance programs for Charles, Calvert and St. Mary's County residents using private, state and federal grant money. "We are seeing an average of 50 households per day. By 1:30 p.m." on a recent Monday, "we had already seen 60 households."

The organization has spent about $1.3 million from the state for its home heating assistance program, about $1.2 million for bulk fuel purchases for needy families, about $1.5 million for energy bill assistance and about $457,000 to help families in arrears on utility bills. Last year the state ran out of funds and Community Action had to stop taking applications, Hawkins said. She hopes not to run into the same problem this year. With the software the organization uses, the state can see how much funding it has obligated to households for assistance, which it must pay. Hawkins participates in monthly conference calls to discuss who needs more funds and who isn't spending their funds. For example, Community Action was given $411, 269 for arrearage funds and in December the state gave it an additional $215,000 for arrearage. The state's allocation was $11.2 million for the program.

"These funds are first come, first served and whoever needs it, gets it," Hawkins said.

The money is used to help more people than ever before, especially those in arrears, who are of all ages and walks of life, and who may have never had to apply for any assistance before in their lives.

Applicants who have fallen behind on utilities bills receive a one-time benefit of $300 to $2,000 to bring them up to speed.

McLean was one of them. He turned to Community Action after a friend told him help was available.

"My work basically told me we don't have any work. ... That's why I couldn't afford" heat or electricity, McLean said. "The day they came and shut my electric off, I called [SMTCCAC] panicked and they made a call to SMECO to turn it back on that day."

Based on the 22-year-old's finances over the previous 30 days, the organization paid $700 of his $1,100 utility bill and filled his heating oil tank.

Since July 1, SMTCCAC has received 4,868 applications for all of its assistance programs — up from 4,055 in fiscal 2008. That's about a 20 percent increase. Applications began to flood in over the summer and are expected to continue to trickle in until April. Applications are up nearly 40 percent from fiscal 2008.

The number of applicants, like McLean, in Calvert County has doubled since fiscal 2007.

"I was surprised when I got those last numbers. I was shocked with Calvert's numbers. Folks think [Southern Maryland's] rich, but we still have people who can't pay their bills," Hawkins said. "People have been sick, went in the hospital and didn't work for a couple weeks. We've seen a lot of that."

"A lot of [middle-class] people come in and they're in tears and they're ashamed because they've never had to ask for help," said Lucinda Hardy, a Waldorf resident who applied for assistance in October after she was laid off from her substitute teaching job with Charles County's public schools. She inquired about employment and now works for the energy assistance program. At the time of her interview with a reporter, she was bombarded with clients. "And all you can do is hold their hands and tell them it's going to be OK. Everybody's out there just trying to survive the times right now."

Hardy is also facing foreclosure on her home but is working on a loan modification.

"I was already struggling with regular bills because I'm a single parent of two children. I used to be able to buy 100 gallons [of heating fuel] at a time and it would be $250 or $300. Now for 200 gallons you're talking about $600 to $700," Hardy said. "[SMTCCAC] helped me with bill payments. I was not going to have heat this winter at all and I received $800 in fuel, which is like two tanks full and will last me through next winter. I haven't had the oil changed in my car in six months. Those kinds of things you take for granted … the things that you need the most are expensive."

The assistance from SMTCCAC was especially helpful because she and her children do not qualify for other types of public assistance or health insurance.

Despite increased demand that puts a strain on grant budgets, Hawkins said funds are released to about 85 percent of applicants.

The organization is noticing more applicants tend to be moving in with relatives and friends so they can share utility responsibilities, Hawkins said, and some applicants are in arrears as much as $2,800.

"People, they're struggling. They've got house payments and other bills. It's not easy," Hawkins said.

To qualify for SMTCCAC assistance, an individual or family must have earned a salary of no more than 175 percent of the federal poverty level in the previous 30 days. That's the equivalent of $1,516 gross income for a single person to $3,091 for a family of four. An applicant must be a Southern Maryland resident and can be a homeowner, boarder, roommate, renter or Section 8 housing assistance recipient.

"We tell people they can come back if things change, because it's based on the last 30 days," Hawkins said.

At a time when funds are needed most, the Southern Maryland Electric Cooperative's Project Match program has seen a drop in contributions since last year, from about $17,000 to $14,380. The program allows SMECO customers to donate money that the company will match and donate to SMTCCAC weekly to help needy customers pay electric bills.

"So far, we've received $14,380 and the program goes from Nov. 1 through April 15. SMECO matches dollar for dollar up to $50,000. We are slightly down from last year's total with $17,000. Last year we matched $27,033. You can make those payments right with your monthly SMECO bills. It goes to a very good cause," said SMECO spokesman Tom Dennison.

"Over the past year, when we started to see the economic conditions really take hold, we have noticed that there have been customers having more difficulty in paying their bills," he said.

"While there may be more customers in arrears, we are working with our customers continuously by placing them with assistance agencies and working with them to conserve energy as best we can as we move into these cold weather months."

SMECO is not allowed by law to disconnect electricity from October through April. Dennison said more people are delinquent than in past years, though he could not give an exact number.

Lock Wills, president and chief executive officer of Southern Maryland Oil, said his company has had to work harder this year to work out payment plans with customers who find times tough, even lowering payments by as much as 30 percent for some customers. But it may be too early to tell if overall consumption has taken a hit.

"We expect consumption to cut back on a weather adjustment basis," Wills said. "Frankly, prices today are cheaper than a year ago. With some good luck that'll continue. It's about $2.50 [per gallon] now, versus $2.90 a year ago and about $4.50 over the summer. The weather is about 7 percent colder than normal so you would expect consumption to be up but … we haven't been through the peak season. … Our fixed-income and long-term customers, they rely on us to be responsive to their needs and help them through difficult times."

kkulp@somdnews.com

Where to turn for help

The Southern Maryland Tri-County Community Action Committee will accept applications for its energy and bill assistance programs technically until June 30, but heating assistance will be available until April for fiscal 2009. Call 301-274-4474 for more information or to set up an appointment with an energy assistance counselor. The organization also does weatherization checks to ensure proper heat containment in homes.