Congress Battles Itself Over Affordable Energy

Published March 1, 2003

Two Congressional events held on January 8–a news conference supporting more federal funding to help the poor pay their winter energy bills and a Senate hearing on a bill to fight global warming–may at first blush appear completely unrelated. But the two are in fact at cross-purposes, as one seeks to make energy more affordable while the other would send energy costs through the roof.

The Northeast-Midwest Congressional Coalition held a press conference drawing attention to the need to replenish the federal Low Income Heating and Energy Assistance Program (LIHEAP). Several legislators want to increase the program’s funding from $1.4 to $1.7 billion.

The stated purpose of LIHEAP is laudable: to provide financial assistance to persons unable to pay their energy bills so their heat isn’t shut off in the dead of winter. But the program’s impact is less clear in practice.

Utilities in most Northern states are forbidden by law from shutting off a customer’s electricity or gas during the cold weather months, so LIHEAP assistance is rarely needed to keep people from freezing in their own homes. The program’s real beneficiaries are the utilities, who receive taxpayer dollars for energy bills that otherwise would have gone unpaid, and the bureaucrats who administer the program.

Nonetheless, the message that the poor should not have to suffer because of prohibitively expensive energy is a politically powerful one. Yet the message seems to get lost when the subject turns to the environment.

Costly Global Warming Policy

Thirty years of environmental regulations have greatly increased the cost of energy–often unnecessarily so.

The latest, and by far the largest, attack on affordable energy comes from global warming alarmists. The January 8 hearing in the Senate Commerce, Science and Transportation Committee discussed a measure proposed by Sens. John McCain (R-Arizona) and Joe Lieberman (D-Connecticut) aimed at reducing the use of fossil fuels believed to warm the planet. Their bill would do this by making it more costly to use such carbon-based energy sources.

The McCain-Lieberman measure carries an enormous price tag. Though its initial targets and timetables are not as strict as those in the Kyoto Protocol–the as-yet-unratified multilateral agreement to reduce greenhouse gas emissions–the costs of McCain-Lieberman would be similarly high. The Department of Energy’s Energy Information Administration has estimated the Kyoto Protocol would increase energy costs by $77 billion to $338 billion dollars a year.

If the McCain-Lieberman bill becomes law, many more poor–and not so poor–households will be in need of LIHEAP funds. Of course, absent a budget-busting increase in the program’s funding, there won’t be enough money to go around.

LIHEAP remains a popular program, and the $300 million increase will likely be approved. After all, it is good politics to ensure there is affordable energy for everyone, including the neediest. But if Congress feels obligated to take steps to make energy more affordable and available, it should refrain from taking other steps that move us far in the opposite direction.

Ben Lieberman is a senior policy analyst with the Washington, DC-based Competitive Enterprise Institute.