Pricing options to help LIHEAP

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AUGUSTA (AP) – Hoping to stretch the dollars allocated by the federal government for heating assistance, the Maine State Housing Authority’s overseers Tuesday approved new ways to calculate prices paid to oil dealers, including one that has been adopted by other regional states.

The housing authority commissioners unanimously approved three payment options for oil dealers who participate in the Low Income Home Energy Assistance Program, or LIHEAP. More than 46,000 Maine households rely on LIHEAP to help with the costs of heating their homes.

One of the options, called margin over rack, replaces the current cash price system with one that takes into account each oil company’s operating costs and overhead, cost of delivery and other factors, including a profit margin.

If used this past winter, the margin over rack system could have allowed the purchase of an additional 500,000 gallons of heating oil for the poor, the housing authority says.

Dealers will also be allowed to offer a specified discount off the retail price to the LIHEAP customers. A third option is to offer customers their own plans, provided the price is less than the cash price and is available to others.

The margin over rack and discount off retail methods were used in upstate New York in counties with demographics similar to Maine’s. The margin over rack system has been used in Connecticut and Massachusetts.

Gov. John Baldacci had asked the housing authority to look for ways to get more oil for LIHEAP without harming Maine’s oil dealers. “This approach accomplishes that,” he said.

Meanwhile in Washington, U.S. Sens. Olympia Snowe and Susan Collins of Maine asked for full funding of LIHEAP at $5.1 billion for the year starting next Oct. 1. While Congress has authorized $5.1 billion this and last year, it has allocated far less than that amount, said spokeswoman Jen Burita of Collins’ office.


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