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State plan would ease heating costs Energy officials predict 30% jump

Consumers would get tax breaks for improving home heating systems and be provided a sales tax-free week for purchasing certain types of energy-efficient heating appliances under a proposal advanced Thursday by Gov. George E. Pataki.

His plan comes a day after state energy officials and Niagara Mohawk officials told a legislative panel that costs will likely jump by one-third this winter in New York over last year -- the result of higher crude oil prices and Hurricane Katrina. Niagara Mohawk has about 540,000 customers for natural gas, primarily in the central part of the state.

"Our first priority must be to assist our most vulnerable populations, who may struggle to pay higher heating bills this winter," Pataki said in a news release.

The proposal, which would cost the state about $200 million, comes as state lawmakers are scrambling to respond to high motor fuel prices, which have been coming down over the past week, and forecasts for sky-high prices on natural gas and home heating oil this winter.

The State Senate is due back next week to consider energy issues. There are proposals pending to do everything from cutting state sales taxes on motor fuel to providing tax credits for programmable thermostats.

Timothy Smith, president of New York State Energy Research and Development Authority, which monitors energy costs, on Wednesday said natural gas and home heating oil prices are expected to be at least 30 percent higher this winter over last year.

A Niagara Mohawk official told lawmakers at a hearing Wednesday that the utility's customers can expect to pay 35 percent more to heat their homes this year -- about another $360 for the typical household, which last winter paid about $1,000 on average.

A National Fuel Gas spokeswoman said in a telephone interview late Thursday that the company is projecting a 20 to 30 percent increase in home heating costs "based on the prices we've already contracted for," the after-effects of Hurricane Katrina, and on it being "a normal winter."

Twenty-four hours after the Assembly hearing, Pataki released his energy-savings plan, which includes:

An income tax break for residents older than 65, providing a refundable credit, up to $500, for 25 percent of home heating expenses when total home heating costs are more than 7.5 percent of a person's income. The program, costing the state $100 million, would serve people with incomes up to $75,000.

Up to $25 million in state funds -- more if federal aid is increased -- to help qualifying low-income residents pay their heating bills.

Tax credits, up to $3,000, for certain small businesses and farmers, a plan that will lower revenues to the state by about $60 million.

An income tax credit for individuals, up to $500, for 50 percent of the costs to upgrade a home heating system, and two weeks of tax-free purchases of qualifying energy efficient appliances, weather stripping and insulation.

He also wants to let alternative-fueled cars use high occupancy vehicle lanes no matter how many passengers are in the vehicle.

While prices at the pump have fallen in recent days, they are still high compared with other states. The Oil Price Information Service, a trade publication that tracks petroleum prices, found the price of regular gas this week to be $3.20 per gallon on average across New York, second only to Hawaii. Mississippi, at $2.64, has the lowest per gallon price.

Senate Republicans are exploring a plan to cap the sales tax on gasoline. All government taxes combined make up about a quarter of the price of a gallon of gas, according to the U.S. Department of Energy.

But some experts, including a University at Albany economist, at a hearing here Wednesday, have warned that cutting the gas tax will only increase consumption, further straining supplies and driving up prices.

Assembly Democrats, meanwhile, appear in no rush to get back to Albany. Assembly Speaker Sheldon Silver, D-Manhattan, said his house will continue to hold hearings around the state on the energy situation. Silver said the Assembly is focusing on keeping low-income residents, schools and local governments from being hit too hard by fuel costs.

e-mail: tprecious@buffnews.com

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