Senators try to nip record heating costs in the bud

Emergency loans would help small businesses

By Owen Boss

WASHINGTON — At a recent hearing on high heating oil prices, Sen. John F. Kerry, and Sen. Olympia J. Snowe announced their proposed legislation that would provide support to small businesses in the region that are suffering from rising heating fuel costs. More than ever, heating oil distributors are facing a considerable credit crunch as a result of taking out loans to cover higher costs from heating oil while their customers struggle to pay their rising heating bills, according to the senators. The solution proposed in the bill is to offer businesses affected through the rising oil costs access to credit through disaster loan programs at the Small Business Administration. At the hearing, Mr. Kerry, a Massachusetts Democrat, emphasized how dire the home heating situation has become, and called for a timely response to the crisis because if legislators wait until homes need to once again be heated, it may be too late. “Nationally, 7.7 (million) households heat their homes with home heating oil. In Massachusetts, over 963,000 households use home heating oil delivered by over 800 distributors, many of them small businesses,” said Mr. Kerry, chairman of the committee on small business and entrepreneurship, in a press release. “It is reality — not rhetoric — that price spikes will force people to decided whether to feed their families or heat their homes.” Also on hand was the committee’s ranking member, Ms. Snowe, who said that when dealing with providing heat to families, the state must take the life or death consequences into consideration. “We are facing an energy crisis of the highest order and Congress must curb this looming catastrophe because this truly is a matter of life or death — when people can’t afford the cost of home heating oil, they simply freeze,” said Ms. Snow in a press release. “Consumers and small businesses are being stretched to the limit and beyond, but nowhere is the ensuing calamity looming larger than in New England where just getting through this winter is fast-becoming our number one priority. I fear that parts of Maine might, quite literally, become uninhabitable for many this coming winter.” It has been estimated that heating oil costs have risen 116 percent since 2005, and heating prices in New England are currently as high as $4.65 per gallon, which is $2 per gallon higher than 2007. One business owner that attended the hearing to share her own personal story was Sandra Farrell, of the Northboro Oil Co., a small oil distribution business that operates out of Northborough, Mass. “The current price of product is both unpredictable and severely volatile,” said Ms. Farrell in a press release. “Every day we face increases in the price of fuel, historically high accounts receivables, insufficient lines of credit, shrinking margins due to higher costs of operations and angry customers who believe the small oil dealers like us are raking in the same obscene profits as the ‘big oil’ companies.” Mr. Kerry originally introduced the proposed disaster loan program that would provide support to small businesses hurt heating prices in 2001 as the Small Business and Farm Energy Emergency Relief Act. The economic-injury disaster loans included in the program provide financially strapped small businesses sufficient working capital until they can restructure or change their business to the fluctuations of the national marketplace. oboss@thegardnernews.com

Appeared on Page 1 on 7/1/2008 (Vol. 206 No. 155)