State expecting more heating aid money, but could still face a shortfall

State officials are now expecting Connecticut to receive $44.2 million more than initially projected for low-income energy assistance–enough to break an end-of-year stalemate between Gov. M. Jodi Rell and the legislature over funding for the program, but perhaps not enough to carry it through the winter.

The money for the Low Income Home Energy Assistance Program was included in a continuing budget resolution passed by the lame duck Congress and signed Wednesday by President Obama.

Word of the funding was welcome news to the Rell administration, which had been expecting the federal government to provide $44.2 million less than last year’s $96.9 million for the block grant that helps low-income residents pay for heating and other energy bills.

Although the U.S. Department of Health and Human Services has not yet announced how much money each state will receive, the continuing resolution calls for states to receive the same amount of LIHEAP funding through March 4 as they did last fiscal year. For Connecticut, that would be $96.9 million.

But the continuing resolution does not appear to include funding for “contingency” energy assistance money, which the state relied on last winter, according to the state Department of Social Services. Last fiscal year, the state received $8.79 million in contingency energy assistance funds. If that money does not come through this winter, the state could still face a deficiency in its energy assistance program, DSS spokesman David Dearborn said, although he noted that the president could release contingency funds later in the winter.

Last year, 82,956 Connecticut households received the energy assistance funds. Through Monday, 64,438 households had been deemed eligible this year, up 4.5 percent from the same time last year. And Dearborn noted that the price of home heating oil has increased this year.

Even with the possibility of a shortfall later in the winter, the additional federal money pushes off a more immediate problem for Rell and Democratic legislators, who had disagreed about how to handle the expected drop in federal LIHEAP funding.

In September, the Rell administration proposed lowering benefit levels and tightening eligibility for LIHEAP, a move estimated to reduce participation by 18,800 households. Legislators overwhelmingly rejected the proposal, but did not appropriate additional state dollars to the program.

Last month, administration officials warned that all of the program’s funds were likely to be committed by December, or even sooner. The Rell administration estimated that another $46 million would be needed to supplement the program’s funding, but later revised it to $33 million.

As Democratic lawmakers explored ways to find the money, Rell wrote them a letter warning that she would oppose borrowing to supplement the energy assistance program and suggesting that they find spending cuts to offset it.

Department of Social Services Deputy Commissioner Claudette J. Beaulieu said last month that the department was facing increased demand for heating assistance than in previous years. The department typically commits between $2 million and $3 million in LIHEAP funding per week, but had committed $3.6 million and $4.4 million in two weeks this year, she said.

Some of the increased demand could come from people applying earlier in case the money runs out, Beaulieu said at the time. But if it keeps up, she said, even getting as much federal funding as last year might not be enough to meet the demand.