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Energy assistance program hits jackpot

Published February 13, 2009 at 6:29 p.m.
Updated February 13, 2009 at 6:29 p.m.

Most state program budgets grow leaner by the day, but one has gotten fat — making it a juicy target for certain hungry lawmakers.

The Low-Income Energy Assistance Program, which helps pay heating bills for people in need, received twice its normal allocation from the federal government this year — roughly $63.6 million.

That means LEAP has an extra $25 million, which administrators planned to give to recipients in the form of bigger benefit checks.

The average LEAP family's heating bill over the six-month winter period is $650, said program director Todd Jorgensen. If LEAP gave out all the new federal money it received, it could cover 92 percent of the average bill, up from 50 percent just one year ago.

That would be a shot in the arm for Colorado's economy, say members of the legislature's Joint Budget Committee.

"It's a stimulus because it gives people the ability to spend their money other places, pay off debt and buy the food and clothing that they need," said Rep. Mark Ferrandino, D-Denver.

He and other JBC members nixed a staff recommendation that as much as $5 million of state funding for the program be transferred to other areas.

But other legislators, who will hold a special joint session on proposed budget cuts Monday, say that flush of money needs to prop up underfunded programs in state government. Rural representatives have complained especially about cuts to agricultural programs.

Rep. Marsha Looper, R-Calhan, said that $6 million in severance-tax revenue was transferred this year from the Department of Natural Resources to the LEAP program. She asked if that money could be used more wisely to continue water-inspection programs that are heading for cutbacks.

"We have to maintain a functioning water resources department," Looper said. "Is it appropriate to raise that (LEAP payment) cap? I don't know. I think that's a policy discussion we need to have."

Colorado usually gets about $30 million per year from the federal government for LEAP, about 15 percent of which is diverted to a Governor's Energy Office program for increasing the energy efficiency of low-income homes. But the program was fully funded for all states this year, leaving Colorado with $63.5 million in initial allocation and another $7.9 million in emergency contingency funds authorized by Congress.

LEAP, administered by the Department of Human Services, also gets a $6 million transfer from severance tax funds and about $2.1 million from Energy Outreach Colorado, a non-profit that takes donations from utility customers. After accounting for administration costs and a $2 million set-aside for funding of emergency furnace repairs, that leaves the $63.6 million pot, Jorgensen said.

Colorado residents who make $3,269 a month or less can apply for funding. The financial help, which typically is paid in monthly installments to participants' utility companies, is determined by income, family size and last year's heating costs, Jorgensen said.

When Congress approved the full funding and subsequent emergency funding this year, it anticipated correctly that more people would be out of work and applying for help. About 92,000 applied for help last year, while slightly more than 103,000 have applied this year.

But the state also projected a caseload that was much higher — around 116,000, Jorgensen said. The load has been smaller than anticipated, likely because of the drop in natural-gas prices and because this winter has been warmer than usual, at least along the Front Range, he said.

Colorado can't use the federal LEAP dollars for any other state program, though it could revert some of the transferred severance-tax revenue.

The state could roll over as much as 10 percent of the federal funding to the next year, though any of that it doesn't use by 2010 would revert to Washington D.C., Jorgensen said.

One of the benefits of paying such a high percentage of bills for the needy is that it relieves them of a debt heading into the summer months, when electricity bills typically are lower. In recent years, those high winter bills would carry into the off-season and continue to build up debt on utility customers, Jorgensen said.

Relieving this debt is good, Looper said. But she also questioned whether the departments transferring severance-tax funding or the people donating to Energy Outreach Colorado might be more willing to do so if there was more of a need.

"The intent of LEAP is not to pay the entire utility bill. It's to pay a portion of it," she said.

SealoverE@RockyMountainNews.com or 303-954-5438

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