S. Hrg. 101-99
STATE ENERGY CONSERVATION
PROGRAMS IMPROVEMENT ACT OF 1989
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY REGULATION
AND CONSERVATION
OF THE
COMMITTEE ON
ENERGY AND NATURAL EESOURCES
UNITED STATES SENATE
ONE HUNDRED FIRST CONGRESS
FIRST SESSION
ON
S. 247
TO AMEND THE ENERGY POLICY AND CONSERVATION ACT TO IN-
CREASE THE EFFICIENCY AND EFFECTIVENESS OF STATE ENERGY
CONSERVATION PROGRAMS CARRIED OUT PURSUANT TO SUCH ACT,
AND FOR OTHER PURPOSES
MAY 2, 1989
99-832
$arcl
rary
DAILY DEPOSITSRY
Printed for the use of the
Committee on Energy and Natural Kes<nTOj^_
^■oibsf
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1989
For sale by the Superintendent of Documents, Congressional Sales Office
U.S. Government Printing Office, Washington, DC 20402
nn on'^ on
S. Hrg. 101-99
STATE ENERGY CONSERVATION
PROGRAMS IMPROVEMENT ACT OF 1989
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY REGULATION
AND CONSERVATION
OF THE
COMMITTEE ON
ENERGY AND NATUEAL RESOUECES
UNITED STATES SENATE
ONE HUNDRED FIRST CONGRESS
FIRST SESSION
ON
S. 247
TO AMEND THE ENERGY POLICY AND CONSERVATION ACT TO IN-
CREASE THE EFFICIENCY AND EFFECTIVENESS OF STATE ENERGY
CONSERVATION PROGRAMS CARRIED OUT PURSUANT TO SUCH ACT,
AND FOR OTHER PURPOSES
MAY 2, 1989
Printed for the use of
Committee on Energy and Natural
DA!:., ^Li^OSiTOSY
U.S. GOVERNMENT PRINTING OFFICE
99-832 WASHINGTON : 1989
^^^^^ For sale by the Superintendent of Documents, Congressional Sales Office
Q n U.S. Government Printing Office, Washington, DC 20402
"y*
Boston PubUe Library
Boston, MA 0211@
COMMITTEE ON ENERGY AND NATURAL RESOURCES
J. BENNETT JOHNSTON, Louisiana, Chairman
DALE BUMPERS, Arkansas JAMES A. McCLURE, Idaho
WENDELL H. FORD, Kentucky MARK O. HATFIELD, Oregon
HOWARD M. METZENBAUM, Ohio PETE V. DOMENICI, New Mexico
BILL BRADLEY, New Jersey MALCOLM WALLOP, Wyoming
JEFF BINGAMAN, New Mexico FRANK H. MURKOWSKI, Alaska
TIMOTHY E. WIRTH, Colorado DON NICKLES, Oklahoma
KENT CONRAD, North Dakota CONRAD BURNS, Montana
HOWELL T. HEFLIN, Alabama JAKE GARN, Utah
JOHN D. ROCKEFELLER IV, West Virginia MITCH McCONNELL, Kentucky
Daryl H. Owen, Staff Director
D. Michael Harvey, Chief Counsel
Frank M. Gushing, Staff Director for the Minority
Gary G. Ellsworth, Chief Counsel for the Minority
Subcommittee on Energy Regulation and Conservation
HOWARD M. METZENBAUM, Ohio, Chairman
BILL BRADLEY, New Jersey DON NICKLES, Oklahoma
JEFF BINGAMAN, New Mexico FRANK H. MURKOWSKI, Alaska
TIMOTHY E. WIRTH, Colorado PETE V. DOMENICI, New Mexico
J. Bennett Johnston and James A. McClure are Ex Officio Members of the Subcommittee
Allen Stayman, Professional Staff Member
Lesue Black, Professional Staff Member
(II)
CONTENTS
Page
S. 247 5
STATEMENTS
Berg, Dr. John R., Assistant Secretary, Conservation and Renewable Energy,
Department of Energy, accompanied by Frank M. Stewart 19
Concannon, William L., assistant secretary, Massachusetts Executive Office of
Communities and Development 64
Duckett, Cherry, assistant director, Arkansas Industrial Development Com-
mission 90
Lee, Henry, executive director. Energy and Environmental Policy Center,
Harvard University 33
Metzenbaum, Hon. Howard M., U.S. Senator from Ohio 1
Tombari, Carol, director. Governor's Energy Management Center, State of
Texas 47
Tucker, Fred, executive director, Little Dixie Community Action Association... 71
Wirth, Hon. Timothy E., U.S. Senator from Colorado 3
APPENDIXES
Appendix I
Responses to additional questions Ill
Appendix II
Additional material submitted for the record 193
(III)
STATE ENERGY CONSERVATION PROGRAMS
IMPROVEMENT ACT OF 1989
TUESDAY, MAY 2, 1989
U.S. Senate,
Subcommittee on Energy Regulation and Conservation,
Committee on Energy and Natural Resources,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:15 p.m. in room
SD-366, Dirksen Senate Office Building, Hon. Howard M. Metz-
enbaum, presiding.
OPENING STATEMENT OF HON. HOWARD M. METZENBAUM, U.S.
SENATOR FROM OHIO
Senator Metzenbaum. It has been over a decade since the energy
crisis of the 1970s, but the threat of new crises remains. Oil import
dependence will soon surpass the levels experienced in the 1970s,
and at the rate we are going we will pass the 50 percent threshold
for the first time.
At the same time, we are reminded of the tremendous environ-
mental costs of unchecked energy consumption from the catastro-
phe in Alaska's Prince William Sound to the growing problem of
global warming.
While Congress often has difficulty agreeing on a coherent set of
responses to these threats, one response does have broad support:
increasing energy conservation and energy efficiency.
In 1974 Congress authorized several programs which provide
Federal grants to State and local governments for specified energy
activities known collectively as the State and Local Assistance or
SLAP Programs. What a terrible acronym that is, SLAP.
In doing so. Congress recognized the essential constitutional role
of states and communities in promoting Intelligent energy plan-
ning and reducing the nation's rising level of energy consumption.
With this assistance, the states have made significant strides in
conserving energy despite repeated attempts by the Reagan Admin-
istration to eliminate all funding.
The Weatherization Program provides money and assistance to
improve the homes of low income families who spend an inordinate
share of their income on heating and cooling bills. The State
Energy Conservation Program allows states to develop energy con-
servation goals and plans for meeting their targets and to get pre-
pared for any future energy emergencies.
The Institutional Conservation Program offers much needed
matching grants to schools and hospitals for conservation invest-
(1)
ments that help reduce their cost in providing education and
health services.
Finally, the Energy Extension Service helps educate consumers
about the most economical use of energy alternatives.
The programs have been successful, but that is part of our hear-
ing today. Part of our hearing and certainly not an insignificant
part is to learn from today's witnesses the degree of success, wheth-
er we are getting full value for the dollars we are spending.
We have learned a great deal about energy conservation pro-
grams and technologies, and individual states have developed new
and innovative approaches to energy conservation; but we need to
know more about what you are doing. We now need to update the
SLAP programs to incorporate your successful approaches.
Yes, we would like to know where you have successfully endeav-
ored to cope with the problem. As of this moment it would appear
the monies have been wasted, but at least we would like to know
the facts.
I introduced the legislation we are considering today, S. 247, to
help reinvigorate the SLAP programs. This legislation would im-
prove the legislation of these programs by incorporating many les-
sons learned over the past 15 years. I am pleased that Representa-
tive Phil Sharp has introduced identical legislation in the House.
Many new and innovative energy conservation activities which
are not explicitly authorized have more recently been implemented
by various states. The states would like authority to use their Fed-
eral dollars for these new programs which include statewide least
cost energy planning, financing for capital investments and energy
efficiency, and conservation activities — energy audits to help busi-
ness and industry cut energy consumption and costs, promotion of
the use of alternative transportation fuels, an adoption of energy
efficiency rating systems for homes — and thus help consumers to
make wise financial decisions.
The bill would also promote coordination between Federal, State
and local institutions which often operate similar conservation pro-
grams. The bill establishes a State energy advisory board to pro-
mote communication among states and to advise the Department of
Energy on energy issues.
Finally, the bill would establish new energy conservation goals
for the states to replace those which recently expired.
Energy conservation remains a powerful tool to respond to a va-
riety of national problems from national security to global warm-
ing. The SLAP programs and this legislation are important parts of
strengthening the effectiveness of energy conservation.
I look forward to hearing from our witnesses today. I am asking
that their comments be limited to no more than five minutes.
Our first witness today is the Honorable John R. Berg, Assistant
Secretary, Conservation and Renewable Energy of the U.S. Depart-
ment of Energy, accompanied by Frank Stewart, Director of the
Office of State and Local Programs, the Department of Energy.
We are happy to have both of you with us.
[The prepared statement of Senator Wirth and the text of S. 247
follow:]
STATEMENT OF THE HONORABLE TIMOTHY E. WIRTH
MAT 2, 1989
ON S. 247
Mr. Chairman, I am pleased to be able to join you today. This
legislation may be the first energy-efficiency bill to work its way out
of this committee during the 101st Congress. And there are several
reasons why.
First, this is a sound piece of legislation. The State and Local
Energy Assistance Progrcims at the Department of Energy have served the
nation well for more than a decade. But the time is right to revisit
the work done in past Congresses and to update these programs so they
reflect the lessons we have learned over the years. The state energy
programs are the testing grounds, the front-lines of the public sector's
efforts to help this nation use its energy resources more prudently.
They must be up-rto-date and increasingly ambitious.
The need for these programs is great. The nation's and the
world's priorities are changing very rapidly. As Yogi Berra used to say
"it's deja vu all over again." The United States is becoming
increasingly dependent on foreign oil. Concurrently, we have became
complacent about energy efficiency when the gas lines gave way to the
oil glut. As a result, there have been virtually no gains in U.S.
energy efficiency for three years. In fact, when the final numbers on
1988 are in, I believe we will find that we have slipped backwards.
The results of this slowdown are beginning to be felt in our
trade deficit, in our international competitiveness and elsewhere in our
economy. Most importantly, however, this unacceptable decline in
efficiency runs counter to what must be one of the top, if not
preeminent, goal of public policy in this and other nations — the
enormous environmental crisis we face.
The threat of profound environmental degradation has become one
of the greatest challenges confronting our citizens. The American
public and other citizens around the world are deeply troubled by the
growing evidence of strain on the environmental systems around the
globe. We in this committee have an opportunity, indeed a
responsibility, to address these problems. And we can begin by enacting
this sensible legislation.
In developing policy responses to this enormous and pressing
challenge, energy efficiency must be our top priority. Any way you look
at it, producing more energy services with less energy is good public
policy. In that effort, it is imperative that we provide state and
local governments, schools, hospitals and low-income households with the
tools that they need to renew this nation's commitment to energy
conservation. That is why I included the provisions of S. 247 in the
omnibus global warming legislation I introduced with 33 of my
colleagues .
While I fully support this legislation, I have been looking for
additional opportiuiities . I intend to offer several aunendments to the
bill when it is considered by the full conunittee. Most importantly, I
would like to offer two new optional program objectives that would
encourage state energy offices to promote energy efficiency in state
economic development progreuns and to incorporate energy efficiency into
environmental protection strategies at the state level .
Second, as Chairman of the Alliance to Save Energy, I urge the
committee not repeal the Performance Fund for state weatherization
progrctms. This is a common-sense provision that rewards those states
the run the most effective weatherization programs. The Alliance helped
craft that provision and it should be maintained. Although this concept
has never been tested because the budget priorities of the past
Administration never allowed federal weatherization funds to exceed $200
million, it remains sound policy. Its goal, simply stated, is to give
states an incentive to run lean, efficient weatherization programs by
rewarding those states that achieve the greatest performance in
weatherizing homes.
Third, I think more can be done to recognize the regional needs
of certain regions of the country in these programs . Many states are
more in need of programs to encourage efficiency in cooling homes.
Unfortunately, our legislation does not give states the clear authority
to aggressively reduce cooling energy use. The technology is available
now for deployment and we should make this minor change in language.
Fourth, we need to set another priority for our weatherization
programs. Commendably, Mr. Chairman, S. 247 sets as priorities for
weatherization homes of the elderly and handicapped. I believe we
should expand this provision to give priority as well to high energy
using households, which are most often occupied by the poorest of the
poor — single women with dependent children.
Finally, I recommend that we add a new subsection that would
encourage the Department of Energy to develop a uniform method of
analyzing the strengths and weaknesses of state weatherization programs.
It simply makes good sense for state as well as the federal government
to evaluate its work and improve the provision of services .
Mr. Chairman, your leadership has been instrumental to the
current surge in attention to energy efficiency in all segments of the
U.S. economy. These efforts come none too soon given the enormous
energy, economic and environmental threats that loom over us because we
have fallen behind in getting more out of less energy. I look forward
to working with you to pass this bill and I hope that we can work
together to make this the best possible bill when it moves out of the
Energy Committee. Thank you very much.
n
lOlsT CONGRESS
IST Session
S.247
To amend the Energy Policy and Conservation Act to increase the efficiency and
effectiveness of State energy conservation programs carried out pursuant to
such Act, and for other purposes.
IN THE SENATE OF THE UNITED STATES
Januaey 25 Oegislative day, Januaby 3), 1989
Mr. Metzenbaum introduced the following bUl; which was read twice and
referred to the Committee on Energy and Natural Resources
A BILL
To amend the Energy Policy and Conservation Act to increase
the efficiency and effectiveness of State energy conservation
programs carried out pursuant to such Act, and for other
purposes.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be referred to as the "State Energy Con-
5 servation Programs Improvement Act of 1989".
6 SEC. 2. STATE ENERGY CONSERVATION GOALS.
7 Section 364 of the Energy Policy and Conservation Act
8 (42 U.S.C. 6324) is amended to read as follows:
2
1 "energy conseevation goals
2 "Sec. 364. Each State energy conservation plan with
3 respect to which assistance is made available under this part
4 on or after October 1, 1990, shall contain a goal consisting of
5 a reduction, as a result of the implementation of such plan, of
6 10 percent or more in the amount of energy consumed in
7 such State in the year 2000 from the projected energy con-
8 sumption, as of October 1, 1990, for such State in the year
9 2000.".
10 SEC. 3. REQUIRED STATE ENERGY CONSERVATION PLAN ELE-
11 MENTS AND CONSOLIDATION OF ENERGY EX-
12 TENSION SERVICE.
13 (a) In General. — Section 362(c) of the Energy PoUcy
14 and Conservation Act (42 U.S.C. 6322(c)) is amended —
15 (1) by striking "and" at the end of paragraph (4);
16 (2) by striking the period at the end of paragraph
17 (5) and inserting in lieu thereof a semicolon; and
18 (3) by adding at the end thereof the following new
19 paragraphs:
20 "(6) an energy emergency planning program for
21 an energy supply disruption which shall include a spe-
22 cific implementation strategy and regional coordination
23 and may include planning for petroleum, electricity,
24 natural gas, coal, and nuclear power supply and deliv-
25 ery disruptions;
S 247 IS
3
1 "(7) procedures for ensuring that effective coordi-
2 nation exists among various local, State, and Federal
3 energy conservation programs within the State, includ-
4 ing any program administered within the Office of
5 State and Local Assistance Programs of the Depart-
6 ment of Energy as of December 31, 1987, and the
7 Low Income Energy Assistance Program administered
8 by the Department of Health and Human Services;
9 and
10 "(8) programs to implement all the functions of
11 the Energy Extension Service, as provided by law on
12 the day before the date of enactment of the State
13 Energy Conservation Programs Lnprovement Act of
14 1989, which shall—
15 "(A) include programs for identification, de-
16 velopment, and demonstration of energy efficiency
17 opportunities, techniques, methods, materials, and
18 equipment (including those that are responsive to
19 local needs or resources) and alternative energy
20 technologies such as solar heating and cooling for
21 agricultural, commercial, and small business oper-
22 ations, mdividual energy consumers, and new and
23 existing residential, commercial, and agricultural
24 buildings or structures;
8
4
1 "(B) provide for technical assistance, instnic-
2 tions, information dissemination, and practical
3 demonstrations with respect to energy efficiency
4 opportunities;
5 "(C) provide, to the maximmn extent practi-
6 cable within personnel and funding limitations,
7 active outreach energy extension assistance (in-
8 eluding information on end-user technology re-
9 quirements) at the local level through appropriate
10 offices (including metropoUtan offices) and through
11 county agents and technical staff assistance;
12 "(D) make maximum use of existing outreach
13 or delivery mechanisms or programs and include,
14 to the maximum extent practicable, any State,
15 local, university, college, or other organization's
16 programs for energy information, education, or
17 technology transfer which have activities or pur-
18 poses similar to those of this part; and
19 "(E) establish and implement policies and
20 procedures designed to assure that assistance pro-
21 vided under this part does not replace or supplant
22 the expenditure of other Federal or State or local
23 funds for the same purposes, but instead supple-
24 ments such funds and increases the expenditure of
5
1 such State or local funds to the maxunum extent
2 practicable.".
3 (b) Elimination of EES. — The National Energy Ex-
4 tension Service Act (title V of Public Law 95-39) is
5 repealed.
6 SEC. 4. OPTIONAL STATE ENERGY CONSERVATION PLAN ELE-
7 MENTS AND CONSOLIDATION OF SUPPLEMEN-
8 TAL STATE ENERGY CONSERVATION PLAN.
9 (a) In General. — Section 362(d) of the Energy Policy
10 and Conservation Act (42 U.S.C. 6322(d)) is amended—
11 (1) by striking "and" at the end of paragraph (4);
12 (2) by striking the period at the end of paragraph
13 (5) and inserting in lieu thereof a semicolon; and
14 (3) by adding at the end thereof the following new
15 paragraphs:
16 "(6) programs for financing energy efficiency and
17 renewable energy capital investments, projects, and
18 programs —
19 "(A) which may include loan programs and
20 performance contracting programs for leveraging
21 of additional public and private sector funds, and
22 programs which allow rebates, grants, or other in-
23 centives for the purchase and installation of
24 energy efficiency and renewable energy measures;
25 or
S 247 IS
10
6
1 "(B) in addition to or in lieu of programs de-
2 scribed in subparagraph (A), which may be used
3 in connection with pubUc or nonprofit buildings
4 owned and operated by a State, a political subdi-
5 vision of a State or an agency or instrumentality
6 of a State, or an organization exempt from tax-
7 ation under section 501(c)(3) of the Internal Reve-
8 nue Code of 1986;
9 "(7) programs to increase transportation energy
10 efficiency, including programs to accelerate the use of
11 alternative transportation fuels for State government
12 vehicles, fleet vehicles, taxis, mass transit and private-
13 ly owned vehicles;
14 "(8) programs for encouraging and for carrjdng
15 out energy audits with respect to buildings and indus-
16 trial plants within the State;
17 "(9) programs to promote the adoption of inte-
18 grated energy plans which provide for —
19 "(A) periodic evaluation of a State's energy
20 needs, available energy resources (including great-
21 er energy efficiency), and energy costs; and
22 "(B) utilization of reliable energy supplies,
23 including greater energy efficiency, that meet ap-
24 plicable safety, environmental, and policy require-
25 ments at the lowest cost;
S 247 IS
11
1 "(10) programs to promote energy efficiency in
2 residential housing, such as —
3 "(A) programs for development and promo-
4 tion of energy efficiency rating systems for newly
5 constructed housing and existing housing so that
6 consumers can compare the energy efficiency of
7 different housing; and
8 "(B) programs for the adoption of incentives
9 for builders, utilities, and mortgage lenders to
10 build, service, or finance energy efficient housing;
11 and
12 "(11) programs to protect consumers from any
13 unfair or deceptive acts or practices which relate to the
14 implementation of energy efficiency measures and re-
15 newable resource energy measures.".
16 (b) Elimination of SSECP.— Section 367 of the
17 Energy Policy and Conservation Act (42 U.S.C. 6327) is
18 repealed.
19 SEC. 5. AUTHORIZATION OF APPROPRIATIONS.
20 (a) State Plan Peogeam. — Section 365(f) of the
21 Energy Policy and Conservation Act (42 U.S.C. 6325(f)) is
22 amended to read as follows:
23 "(f) For the purpose of carrying out this part, there are
24 authorized to be appropriated $25,000,000 for fiscal year
S 247 IS
12
8
1 1990, $35,000,000 for fiscal year 1991, and $45,000,000 for
2 fiscal year 1992.".
3 (b) Energy Conservation Program for Schools
4 AND Hospitals. — Section 397 of the Energy Policy and
5 Conservation Act (42 U.S.C. 6371f(a)) is amended to read as
6 follows:
7 "authorization of appropriations
8 "Sec, 397. For the purpose of carrying out this part,
9 there are authorized to be appropriated $40,000,000 for
10 fiscal year 1990, $50,000,000 for fiscal year 1991, and
11 $60,000,000 for fiscal year 1992.".
12 (c) Weatherization Assistance Program. — Sec-
13 tion 422 of the Energy Conservation and Production Act (42
14 U.S.C. 6872) is amended to read as follows:
15 "authorization of appropriations
16 "Sec. 422, There are authorized to be appropriated for
17 purposes of carrying out the weatherization program under
18 this part $200,000,000 for fiscal year 1990 and such sums as
19 may be necessary for 1991 and 1992.".
20 SEC. 6. state energy advisory board.
21 Section 365 of the Energy Policy and Conservation Act
22 (42 U.S.C. 6325) is amended by adding at the end the
23 following:
24 "(g)(1) There is hereby established within the Depart-
25 ment of Energy a State Energy Advisory Board (hereafter in
26 this subsection referred to as the 'Board') which shall consist
S 247 IS
13
9
1 of not less than 10 nor more than 15 members appointed by
2 the Secretary. Not less than one-half of the members of the
3 Board shall be persons who serve as directors of the State
4 agency, or a divison of such agency, responsible for develop-
5 ing State energy conservation plans pursuant to section 362.
6 At least one member of the Board shall be a director of a
7 State weatherization assistance program. Other members
8 shall be appointed from other persons, including those who
9 have experience in energy efficiency or renewable energy
10 programs for the private sector, consumer interest groups,
11 utilities, public utility commissions, educational institutions,
12 or research institutions.
13 "(2) The Board shaU—
14 "(A) make recommendations with respect to the
15 energy efficiency objectives of the programs carried out
16 under this part, part G of this title, and under part A
17 of title IV of the Energy Conservation and Production
18 Act to the Assistant Secretary for Conservation and
19 Renewable Energy, the Director of the Office of State
20 and Local Assistance Programs, and the Director of
21 the Building and Community Systems Office within the
22 Department of Energy;
23 "(B) serve as a liaison between the States and
24 such Department on energy efficiency and renewable
25 energy resource programs;
14
10
1 "(C) recommend changes to State and Federal
2 energy policies; and
3 "(D) encourage technology transfer of the results
4 of research and development activities carried out by
5 the Federal Government with respect to energy effi-
6 ciency and renewable energy resources.
7 "(3) The Secretary shall designate one of the members
8 of the Board to serve as its chairman and one to serve as its
9 vice-chairman. The chairman and vice-chairman shall serve
10 in those offices no longer than two years.
11 "(4) The Secretary shall provide the Board with such
12 services and facilities as may be necessary for the perform-
13 ance of its functions.
14 "(5) The Board shall be nonpartisan.
15 "(6) The Board may adopt administrative rules and pro-
16 cedures and may elect one of its members Secretary of the
17 Board.
18 "(7) The Secretary shall reimburse members of the
19 Board for expenses (including travel expenses) necessarily in-
20 curred by them in the performance of their duties.
21 "(8) The Board shall meet at least annually and shall
22 submit an annual report to the Secretary and the Congress
23 on the activities carried out by the Board in the previous
24 fiscal year, including any reconmiendations it may have for
25 administrative or legislative changes.".
S 247 IS
15
11
1 SEC. 7. UPDATE OF ENERGY CONSERVATION PROGRAM FOR
2 SCHOOLS AND HOSPITALS.
3 (a) Non-Federal Shaee of a Project. — Section
4 396(b)(1) of the Energy Policy and Conservation Act (42
5 U.S.C. 6371e(b)(l)) is amended by adding at the end thereof
6 the following: "The non-Federal share of the costs of any
7 such energy conservation project may be provided by using
8 programs of innovative financing for energy conservation
9 projects, including loan programs and performance contract-
10 mg.".
11 (b) Definition. — Section 3910) of such Act (42
12 U.S.C. 6371(1)) is amended by striking "April 20, 1977"
13 and inserting in lieu thereof "December 31, 1984".
14 SEC. 8. WEATHERIZATION ASSISTANCE FOR LOW-INCOME
15 PERSONS.
16 (a) Waiver of 40-Percent Requirement. — Section
17 415(a) of the Energy Conservation and Production Act (42
18 U.S.C. 6865(a)) is amended—
19 (1) in the first sentence, by striking "An average"
20 and inserting in lieu thereof "(1) Except as provided in
21 paragraph (2), an average"; and
22 (2) by adding at the end the following:
23 "(2)(A) The Secretary may approve a State application
24 to waive the 40-percent requirement established in paragraph
25 (1) if the State includes in the State's plan —
S 247 IS
16
12
1 "(i) an energy evaluation which establishes prior-
2 ities for selection of weatherization measures based on
3 their contribution to energy efficiency; and
4 "(ii) a standard for determining whether to invest
5 in individual measures based on a rate of return that
6 will ensure that investment in each measure is an ap-
7 propriate use of funds.
8 "(B) For States applying for a waiver under this para-
9 graph, the Secretary shall establish standards for determining
10 whether the energy audit techniques of each such State
1 1 measure —
12 "(i) the energy requirements of individual dwell-
13 ings;
14 "(ii) the rate of return of each conservation in-
15 vestment; and
16 "(iii) the interaction between conservation meas-
17 ures.
18 State applications for waivers shall be judged on these stand-
19 ards.
20 "(C) The Secretary shall make information on energy
21 evaluation instruments available to States appljdng for a
22 waiver under this paragraph and shall provide training for
23 State and local agencies in the implementation of such instru-
24 ments.".
S 247 IS
17
13
1 (b) Dwelling Unit Limitation. — Section 415(c) of
2 such Act (42 U.S.C. 6865(c)) is amended—
3 (1) in paragraph (1), by striking "The expendi-
4 ture" and inserting in lieu thereof "Except as provided
5 in paragraphs (3) and (4), the expenditure"; and
6 (2) by adding at the end thereof the following new
7 paragraphs:
8 "(3) Beginning with fiscal year 1990, the $1,600 per
9 dwelling unit limitation provided in paragraph (1) shall be
10 adjusted annually by increasing the limitation amount by an
11 amount equal to the percentage increase in the Consumer
12 Price Index for the previous fiscal year multiplied by the lim-
13 itation amount for such previous fiscal year. The increase
14 under the preceding sentence for any fiscal year shall not
15 exceed 3 percent.
16 "(4)(A) In addition to the average per dwelling unit lim-
17 itation appUcable in a State under paragraphs (1) and (3), the
18 Secretary may, upon application by a State, estabhsh an av-
19 erage per dwelling unit limitation for dwelling units in such
20 State—
21 "(i) which conform to program requirements;
22 "(ii) which, in addition to any other weatheriza-
23 tion modifications, have furnace efficiency modifications
24 made under this part; and
18
14
1 "(iii) for which a determination is made pursuant
2 to regulations prescribed by the Secretary that such
3 furnace efficiency modifications are a cost-effective use
4 of funds.
5 "(B) The average per dweUing unit limitation applicable
6 in a State to units described in subparagraph (A) shall not
7 exceed an amount equal to —
8 "(i) the amount permitted for the expenditure of
9 financial assistance for labor, weatherization materials,
10 and related matters for dwelling units in such State
11 under paragraphs (1) and (3), plus
12 "(ii) an amount determined by the Secretary to be
13 the average amount that is appropriate for furnace effi-
14 ciency modifications of dwelling units of the type as-
15 sisted under this part in such State.".
16 (c) Repeal of Peefoemance Fund. — Section 415(d)
17 of such Act (42 U.S.C. 6865(d)) is repealed.
O
19
STATEMENT OF DR. JOHN R. BERG, ASSISTANT SECRETARY, CON-
SERVATION AND RENEWABLE ENERGY, DEPARTMENT OF
ENERGY, ACCOMPANIED BY FRANK M. STEWART, DIRECTOR,
OFFICE OF STATE AND LOCAL PROGRAMS, DEPARTMENT OF
ENERGY
Dr. Berg. Thank you very much, Mr. Chairman. We do offer our
testimony to be put in the record, and, if I might, we would like to
summarize it, please.
As you mentioned, I am accompanied today by Mr. Frank Stew-
art, the Director of our State and Local Assistance Programs.
We appreciate this opportunity to appear before you today to dis-
cuss the Department of Energy's views on S. 247, the State Energy
Conservation Programs Improvement Act of 1989.
Conservation and energy efficiency are critical components of
our national energy resources. Secretary Watkins has stated re-
peatedly his commitment to conservation as an important part of
the portfolio of technologies required to meet our economic energy
and environmental objectives. We are moving as quickly as possible
to translate that leadership into cogent and well articulated poli-
cies, programs and strategies; these will form the framework
within which the Department, the Congress, the State and local
governments and the individual energy suppliers and consumers
can take appropriate action to meet their respective responsibil-
ities.
Before I refer directly to the bill, let me make a few observations
about the direction of our State and Local Assistance Programs.
These programs were established 15 years ago as part of the Feder-
al response to the OPEC oil embargo. Today our quest for energy
efficiency is driven as much by the desire to save money or to
lessen the environmental impacts of energy production as it is by
the danger of another oil cutoff.
Our notion of the proper Federal role in this process has also
evolved over time. The proper Federal role, I would suggest, is to
act as a broker to the States, not just of money, but of ideas — to
encourage a dialogue that will help identify successful and innova-
tion conservation initiatives as they emerge at the State, local or
even the international level and then to provide the information
and technical assistance needed to replicate them elsewhere.
The time is also ripe for a reassessment of the Federal effort in
weatherization. If Congress is committed to spending $160 million
per year on this program, how can that money be best spent? How
can we ensure that the benefits are real and long lasting and that
they reach the intended target? How can weatherization programs
best be integrated with a Low-Income Home Energy Assistance
Program is order to maximize its impact? I raise these questions
not because I have the answers but because I believe they are
worthy of examination and discussion before we reauthorize this
program. Let us work together to make these programs work
better.
I will now turn my attention to the specific provisions of S. 247,
as currently drafted.
Section 2 proposes to set uniform State energy conservation
goals. We believe that a goal of a 10 percent reduction in energy
20
consumption for each State by the year 2000 is unrealistic and
without full and specific consideration of the special circumstances
of each State; therefore, it would be unreasonable and counterpro-
ductive.
Regarding Section 3, the Department is opposed to the inordinate
restriction of a State's prerogative in addressing its own needs. We
favor the providing of general guidance in permitting the maxi-
mum flexibility of a state in defining and designing the means to
meet our common objectives.
We believe that the goal of great energy efficiency would be
better served by the elimination of mandatory provisions. We
object to the provisions of requiring an energy emergency plan as
part of the energy conservation plan. We would suggest that any
requirement for energy emergency planning not be subsumed in
the State's energy conservation plan, but that the State be allowed
the flexibility to develop its energy emergency plan as part of its
other emergency planning or as free-standing document.
We agree with the provision calling for the elimination of the
Energy Extension Service. Much of the work of the service has
been done in conjuction with the State Energy Conservationa Pro-
gram, and there should be little difficulty in combining all the
function into the State Energy Conservation Program.
Section 4 lists several programs that the States would be allowed
to undertake. This list in large measure gives the States more flexi-
bility and would likely strengthen the program. However, we rec-
ommend that the allowance in subsection (11), of the programs to
protect consumers from unfair or deceptive practice, be stricken.
This assignment belongs to the States' Attorneys General.
Regarding authorization of appropriations covered in Section 5,
we would like to work with the committee in reexamining the fun-
damental structure of these programs. This process must precede a
determination of the appropriate authorization levels.
Regarding the State Energy Advisory Board In Section 6, the De-
partment believes that the advisory board would be of greater use
if it more fully reflected the public being served by the programs
and did not duplicate the interaction with the State energy offi-
cials, which should exist as a matter of course.
We recommend that the board be composed of a minimum of 15
members and not more than 20 and that it meet three times a year
and that no more than one-quarter of the membership consist of
directors of the State agencies responsible for developing State
energy conservation plans.
Regarding Section 7, we believe these new provisions would in-
crease the flexibility provided to the States to make the best use of
the resources available to them, increase the degree of competition
among the schools and hospitals participating in the program, and
permit the States to take advangage of many energy conservation
financing techniques.
We believe the modification that Section 8 makes in the Low
Income Weatherization Assistance Programs failed to go far
enough to correct the identified concerns. We suggest elimination
of the requirement that 40 percent of the weatherization funds be
used for the purchase of materials and request in its place the re-
21
quirement that the States report their average materials and labor
costs.
We believe that the dollar limit in the average cost per dwelling
unit should be eliminated as a National determination, and each
State should be allowed to establish those limits to make the best
sense for the housing stock, climate and materials or appliances
for fuels available within the State. We believe instead that the
State should be asked to report periodically on the average cost of
weatherizing individual dwelling units.
Finally, the Department has no objection to the provisions re-
pealing the Performance Fund.
Mr. Chairman, I wish to reiterate the commitment of the Depart-
ment and the Administration to conservation. While we cannot
support S. 247 as currently drafted, we believe that further discus-
sion could lead to mutually supported legislation, and we want to
work with the committee to achieve these objectives.
This concludes my prepared remarks. Thank you.
[The prepared statement of Mr. Berg follows:]
22
CTATEMEKT OT"
DR. JOHN R. BERG
ASSIOTANT SEXTRETTARy
FOR
OCWSERVATICN AND REEJ^WABLE ENERGY
U. S. DEPARTIMENT OF ENERGY
BEFORE TOE
CCMMITTEE CW ENERGY AND NATURAL RESOURCES
SUBCOMMITTEE CN ENERGY REGULATION AND CONSERVATION
UNITED STATES SENATE
MAY 2, 1989
23
Mr. Chairman and Distinguished Members of the Subcommittee:
Thank you for the opportunity to appear before you today to share the views of
the Department of Energy concerning S. 247, the "State Energy Conservation
Programs Improvement Act of 1989."
Conservation and energy efficiency are critical components of our National
energy resources. Secretary Watkins, in his first months in office, has
stated repeatedly his commitment to conservation as an important part of the
portfolio of technologies required to meet our economic, energy, and
environmental objectives. We are moving as quickly as possible to translate
that leadership into cogent and well articulated policies, programs, and
strategies; these will form the framework within which the Department, the
Congress, State and local governments, and individual energy suppliers and
consumers can take appropriate action to meet their respective
responsibilities.
The availability, cost, security, reliability, safety, and environmental
impact of energy supply and use are fundamental to the strategic interests of
the Nation. They affect our competitiveness, productivity, security, and
environmental quality. Over the past two decades, conservation has emerged as
a major domestic and international resource, making inroads into virtually
every energy production and demand sector, improving the efficiency with which
all fuels are used, and providing powerful impetus to expansion of the
domestic economy. Since the energy crisis of the early seventies, the Nation
has made great progress in reducing the amount of energy we need to produce a
1
24
dollar of gross national product (GNP). While GNP has increased about 40
percent, energy consumption has remained relatively constant. However,
conservation has not approached its full economic or technical potential, and
properly focused Federal efforts can help in sustaining and building upon past
achievements and current practice.
I am here today to comment on S. 247, but before I refer directly to the bill,
let me begin with a few general observations about the direction of our State
and Local Assistance Programs. These programs were established 15 years ago,
as part of the Federal response to the OPEC oil embargo. Since that time,
much has changed. Many millions of dollars have been spent, and many gains
have been made. Today our quest for energy efficiency is driven as much by
the desire to save money or to lessen the environmental impacts of energy
production as it is by the danger of another oil cutoff. Our notion of the
proper Federal role in this process has also evolved over time.
The time has come, in our judgment, for a more fundamental reshaping of the
Federal effort in this area than is contemplated in S. 247. Just as our goal
in energy conservation must be to do more with less -- to get more heat, more
light, more output with less energy -- so, too, must our Federal goal also be
to do more with less -- to get more energy conservation and efficiency with
less Federal involvement.
To do that, let us start with the recognition that energy conservation pays.
When implemented in a cost-effective way, it results in direct savings to the
consumer in the form of lower utility bills. It also reduces the need for
25
additional, often very expensive energy production by the utility. These
facts have been used by the States in a variety of innovative ways. In some
States, public utility commissions have encouraged or even forced utilities to
"implement conservation measures as a least-cost approach to the need for
additional capacity. In other States, shared energy savings programs have
been implemented, reducing the initial capital costs of conservation measures
to the consumer in exchange for a share of the savings in utility bills.
States like Iowa, Montana, and Oregon have taken the lead in replacing public
with private financing in this area, and Texas has created a self-sustaining
$200 million revolving fund for this purpose. The enormous sums of money
transferred to the States through the oil overcharge program have provided and
will continue to provide ample resources with which to take such steps.
These actions suggest that the need for direct Federal grants to the States
for energy conservation measures is much reduced. The proper Federal role, I
would suggest, is to act as a broker to the states, not just of money, but of
ideas -- to encourage a dialogue that will help identify successful and
innovative conservation initiatives as they emerge at the State or local or
even international level, and then to provide the information and technical
assistance needed to replicate them elsewhere.
The time is also ripe for a reassessment of the Federal effort in
weatherization. If Congress is committed, as it has been in the past, to
spending $160 million a year on this program, how can that money be best
spent? How can we ensure that the benefits are real and long-lasting and that
26
they reach the intended target? How can the Weatherization Assistance Program
best be integrated with the Low-Income Home Energy Assistance Program in order
to maximize its impact? I raise these questions not because I have the
answers, but because I believe they are worthy of examination and discussion
before we reauthorize this program. I offer the Committee, as President Bush
did in his Inaugural Address, an open hand -- "a new engagement. . .between the
Executive and the Congress." Let us work together to make these programs work
better.
I will now turn my attention to the specific provisions of S. 247, as
currently drafted.
Section 2 proposes to set uniform State energy conservation goals. We believe
that the goal of a 10 percent reduction in energy consumption for each State
by the year 2000 is unrealistic and, without full and specific consideration
of the special circumstances of each State, is unreasonable and
counterproductive. Those States that will, within the next ten years, have to
contend with declining population, economic recession, or economic dislocation
might find such a goal easy to meet. On the other hand, the rapidly growing
population and economies of other States may make it impossible for them to
meet consumption reductions of that magnitude.
Section 3 expands the mandatory provisions that exist in the present law. The
Department is opposed to the inordinate restriction of a State's prerogatives
in addressing its own needs; we favor providing general guidance and
permitting the maximum flexibility to the State in defining and designing the
27
means to meet our common objectives. We believe that the goal of greater
energy efficiency would be better served by the elimination of the mandatory
provisions. For example, while we agree that the States should be encouraged
to coordinate with similar programs in-State as well as with other States, we
cannot support the provision that requires the establishment of procedures for
"effective" intrastate coordination of State, Federal and local energy
conservation programs -- along with the Federal review of such procedures that
would be required to ensure compliance.
For different reasons, we object to the provision requiring an energy
emergency plan as part of the energy conservation plan. We would suggest that
any requirement for energy emergency planning not be subsumed in the State's
energy conservation plan, but that the State be allowed the flexibility to
develop its energy emergency plan as part of its other emergency planning or
as a free-standing document. It would be more appropriate to require an
energy emergency planning program as a prerequisite for eligibility for
receipt of funds under this authorization.
We agree with the provision calling for the elimination of the Energy
Extension Service. Much of the work of the Service has been done in
conjunction with the State Energy Conservation Program, and there should be
little difficulty in combining all the functions into the State Energy
Conservation Program.
28
Section 4 lists several programs that the States would be allowed to
undertake. This list, in large measure, gives the States more flexibility and
would likely strengthen the program. However, the allowance in subsection
(11) of programs to protect consumers from unfair or deceptive practices
strays far afield, into an open-ended area only peripherally related to energy
conservation, possibly including, for example, the financing of class-action
lawsuits by consumer action groups. The section should be stricken. The
consumer protection envisioned in this language more appropriately rests in
programs already established elsewhere within State and Federal government.
The authorization of appropriations is covered in Section 5. As previously
noted, we would like to work with the Committee in re-examining the
fundamental structure of these programs. This process must precede a
determination of appropriate authorization levels.
Section 6 establishes a State Energy Advisory Board heavily weighted toward
the directors of state energy agencies. The Department believes that
consultation with such agencies should be a frequent and routine part of the
administration of these programs, involving issues of program operation,
program policies, the identification of State needs for technical assistance
and training, program guidance, and individual energy consumer needs.
Accordingly, we believe the advisory board would be of greater use to the
Department if it more fully reflected the public being served by the programs
and did not duplicate the interaction which should exist as a matter of
course. We recommend that the board be composed of a minimum of 15 members
and not more than 20, that it meet three times a year, and that no more than
29
one-quarter of the membership consist of directors of the State agencies
responsible for developing State energy conservation plans.
Section 7 establishes broader eligibility requirements for buildings
participating in the Institutional Conservation Program. We believe these new
provisions would increase the flexibility provided to the States to make the
best use of the resources available to them, increase the degree of
competition among the schools and hospitals participating in the program, and
permit the States to take advantage of the new energy conservation financing
techniques that have proven successful in many applications across the Nation.
We believe that the modifications that Section 8 makes in the Low Income
Weatherization Assistance Program fail to go far enough to correct the
identified concerns. We suggest elimination of the requirement that 40
percent of weatherization funds be used for the purchase of materials, and
request in its place a requirement that the States report their average
material and labor costs. Although the original objective of this provision
was to ensure that a reasonable level of materials would be installed in a
weatherized dwelling, the actual experience in implementing this provision has
been fraught with administrative and managerial difficulties. Elimination of
this requirement would be hailed by the vast majority of the weatherization
providers as relieving them of an unnecessary burden and improving their
ability to effectively manage their programs. Additionally, Federal
case-by-case review of requests for modification of any requirement
leads inevitably to delays in implementation, increased bureaucracy, and
increased administrative expenses.
qq-832 - 89 - 2
30
We believe that the dollar limit in the average cost per dwelling unit should
also be eliminated as a National determination, and each State should be
allowed to establish those limits that makes the best sense for the housing
stock, climate, and materials or appliances or fuels available within the
State. We believe instead that the States should be asked to report
periodically on the average costs of weatherizing individual dwelling units
under their programs.
The Department has no objection to the provision in Section 8 repealing the
Performance Fund. Although laudatory in concept, the Fund has never been
implemented.
In conclusion, I wish to reiterate the commitment of the Department and the
Administration to conservation; it is a domestic energy resource that must be
used as surely as our vast reserves of coal. While we cannot support S. 247
as drafted, we believe that further discussion could lead to mutually
supported legislation, and we want to work with the Committee to achieve that
objective.
Mr. Chairman, this concludes my prepared remarks; I appreciate the opportunity
to appear here today, and I am prepared to address your questions at this
time.
31
Senator Metzenbaum. Thank you, Dr. Berg.
Dr. Berg, on a scale of one to 10, how would you feel that these
energy conservation programs have worked over the last 15 years
or the last eight years? I will put it that way.
Dr. Berg. How would I view how the conservation program
worked on what?
Senator Metzenbaum. How would you evaluate the programs
that we are reauthorizing here during the eight years and maybe
the previous seven as well?
Dr. Berg. I think, like everything, sir, there are some that are
very good in some areas and a little bit shaky in some other areas.
For instance, let us take the Institutional Conservation Program.
For the most part, the programs in those areas, working with the
schools and hospitals has provided a means by which we have seen
a 50-50 co-financing, if you wish, of energy conservation and
energy efficiency usage within those institutions.
Many of these institutions, particularly the universities and the
hospitals, have energy engineers responsible for measurement of
the energy usage. As a result, most of them have pretty good data
as to what works and what does not work and why.
In many of the schools, it is kind of a mixed bag. Depending
upon the school districts, some of them have worked together and
have very good data, and others do not.
If we take a look at the Weatherization Program, we again have
what I call a mixed bag. Some of the best areas that I have visited
are those in some of our larger areas. Some of the worst ones have
been in our larger areas.
A specific example of what I would call an excellent program is
the City of Chicago, run by a director there that is a former con-
tractor who knows the contracting business. Each year some 25
groups or so bid to weatherize homes in the city of Chicago.
More importantly, they have, on computer, records to show the
energy savings that have resulted from the measures that have
been installed. That type of program when it is working properly, I
think, is well worth the money that has been spent on it. There are
other areas, however, in which I do have concerns, and I would be
happy to address those.
Senator Metzenbaum. Are you in a position to answer what the
total energy savings of the four SLAP programs outlined in S. 247
could achieve?
Dr. Berg. No, sir, I am not. At this point much of it, unfortunate-
ly, tends to be estimated, and specific hard data is something that I
have been trying to get some handles on. For instance, I have
asked our Institutional Conservation Program to come up with a
method by which they could actually detail more specifically, with
the States, the results from these programs.
In our Weatherization Program, we had a contract this past year
in which we asked the Alliance to Save Energy to go back and look
at the energy savings five years after the installation of furnaces.
That report is due very shortly. In essence, they showed that at the
time furnaces were put on that on the average they were going to
save the consumer roughly 30 percent in energy savings. Going
back and looking at that data now, five years later, they still show
32
an energy savings. However, it has dropped by about one-third. In
other words, there is a 20 percent savings.
Again, I think the reason why is most important
Senator Metzenbaum. That is better than the budget estimates
that we make around here. We do not even get that close.
Dr. Berg. The reasons why, on these things, I think, are impor-
tant. Again, it depends on you and I, the consumers, going down
and cleaning those furnaces out and keeping them tuned up. I
think that is part of the reason the programs really need to be ex-
amined, and that is one of the reasons I have asked that in the
coming year we go back and actually do a nationwide analysis in
which we would go in on a random sampling basis in each of the
States and examine weatherized homes in those States that would
help us determine what measures are effective and why.
Senator Metzenbaum. Dr. Berg, you say that oil overcharge
funds should provide ample resources for State energy conserva-
tion. I wonder first if you could tell me how much oil overcharge
funding has been made available to the States so far and how
much of the total is allocated to each of the four SLAP programs
and how much remains to be allocated?
Dr. Berg. I think I can answer if you give me just a moment, sir.
We have run an item here. Taking Warner, there has been $200
million distributed on the Warner, $2,1 billion in Exxon, and
$1,100,000,000 in Stripper Well. At the present time, allocated to
the five programs, and I will count LIHEAP in this, out of the $200
million of the Warner, $197 million was allocated to the five pro-
grams, the four SLAP and the LIHEAP.
Of the $2.1 billion in Exxon, so far allocated to these programs
has been $2,089,000,000. Of the Stripper Well, of $1,100,000,000,
$333.9 million so far has been allocated to these programs and
$569.4 has been allocated to other energy programs.
Senator Metzenbaum. Would you provide for the committee a
breakup without the life allocations?
Dr. Berg. I would be happy to do that, sir.
[The information follows:]
STATE ALLOCATIONS OF OIL OVERCHARGE FUNDS TO SU^P PROGRAMS (AS OF MAY 1, 1989)
Program:
SECP $775.2 39.3
EES» 137.2 6.9
WAP 673.4 34.1
ICP 389.5 19.7
' In some cases, EES allocations are reported in combination with SECP.
Senator Metzenbaum. As I understand it, the Department of En-
ergy's position is that they support the legislation but it needs
some modifications. Is that correct?
Dr. Berg. With modifications, we would support the bill.
Senator Metzenbaum. I thank you. Dr. Berg and Mr. Stewart. I
thank you for being with us.
33
Our next panel consists of Mr. Henry Lee, Director of the Energy
and Environmental Policy Center at Harvard; Ms. Cherry Duckett,
Deputy Director of the Arkansas Industrial Development Corpora-
tion; Ms. Carol Tombari, Director of the Energy Management
Center in Austin, Texas; Mr. William Concannon, Assistant Secre-
tary, Executive Office of Communities and Development of Boston;
and Mr. Fred Tucker, Executive Director of the Dixie Community
Action Agency of Hugo, Oklahoma.
I think you all know our rules of a five-minute presentation.
Your statement will be included in the record.
Mr. Lee, we would be happy to hear from you first.
STATEMENT OF HENRY LEE, EXECUTIVE DIRECTOR, ENERGY
AND ENVIRONMENTAL POLICY CENTER, HARVARD UNIVERSITY
Mr. Lee. Thank you. Senator. My name is Henry Lee, and I wel-
come the opportunity to come before you this afternoon to testify
on behalf of S. 247.
In recent years. State energy conservation programs have come
on hard times. Even in those instances in which Congress has been
able to restore funds for State programs, the threat of cutbacks in
subsequent years has inhibited the ability of State officials to
create any programmatic continuity. Very simply, we cannot devel-
op an effective energy efficiency program if its life expectancy is
totally uncertain.
This statement is especially valid for energy efficiency programs
in which continuity is essential in order to develop markets for
those programs and the infrastructure to deliver them.
In my prepared remarks I talk a little bit about the reasons we
need a conservation program in this country and why State pro-
grams are important. I think you summed up, Senator, some of
them in your description of the energy security problems.
It is also important to link these to the concerns about environ-
ment. As you well know, many of our problems relating to ozone,
acid rain and the greenhouse warming or greenhouse effect are re-
lated to the combustion of fossil fuels, and there is direct linkage
between energy efficiency improvements and environmental protec-
tion.
I think there are three questions the committee should consider.
One is improved energy efficiency, a reasonable policy option for
improving environmental quality. Second, why should State gov-
ernments be given the responsibility for implementing efficiency
programs. Third, what is the difference between the conservation
programs that were effective in the 1970s and those that will be
effective in the 1990s. Let me quickly summarize some answers to
these.
First, in the area of efficiency, at first blush this is relatively
simple to answer. Efficiency options do not admit air pollutants,
toxic materials and water pollution. Further, they take up almost
no land. Anybody who has tried to site a power facility and run
into the very legitimate array of new air, water and land regula-
tions is aware in what direction the winds of public policy are
blowing.
34
Why State government? What constitutes an effective energy
program will differ from one rejoin to another. The idea that there
is a single efficiency program that is effective for the nation as a
whole ignores reality. Furthermore, the Federal Government
cannot design 50 separate energy efficiency programs. The only
way one can develop programs which are sensitive to the require-
ments of each state is to have the state develop those programs.
If the state should design them, then why not let them pay for
them? If the benefits could be contained within State borders, I
would agree with that statement, but benefits from these efficiency
programs would in large part accrue to the nation as a whole. The
benefits of increased energy security will not be limited to a small
number of states, and the benefits of reduced pollution will not
remain localized.
At this stage I would like to offer some suggestions for bringing
some of the programs contained in this legislation in line with the
needs of the 1990s. I will limit my comments to programs and poli-
cies that relate to State governments, and I will try to be sensitive
to the realities of the Federal budget, but I feel strongly that 0MB
and others must expand their time horizon and start realizing that
failures to invest in the future could result in very high cost down
the road.
I make the following recommendations. First, the committee
should try to change the name of this bill to the State Energy Effi-
ciency Program Improvements Act. The term "conservation" is a
stark reminder of cardigan sweaters, low thermostat settings and
gas lines and is a term that is not conducive to generate public sup-
port.
Second, to the extent possible, all existing State programs except
the Low Income Weatherization Program should be consolidated
into a single program, and I think the bill makes great strides in
this direction.
Third, the energy conservation programs for schools, hospitals,
local governments and public care institutions should eventually be
phased out. While this program has been successful in the past, the
rationale for singling out these institutions for special attention is
no longer relevant. Programs to assist schools and hospitals should
be treated in the same way that we treat programs focusing in
other institutions. If a dollar invested in reducing energy use in a
school building is the most cost effective option, then states should
spend that dollar accordingly. If not, then it makes no sense to
require them to make such investments.
There is a very substantial danger with this suggestion, and that
is that the money now going to this specific program will simply be
diverted away to nonenergy programs. There must be an agree-
ment, therefore, between Congress and the executive branch that
the funds now used for this program will be available to the states
to be used for a broader spectrum of energy efficiency uses.
Fourth, in keeping with the theme of my comments I would sug-
gest a tradeoff. In return for more flexibility for states. Congress
should require the Department of Energy to develop an effective
process for evaluating State energy conservation programs. 20 per-
cent of the funding for all programs except the Low Income Weath-
erization Program should be allocated to those states which have
35
been evaluated as having done the best job. These evaluations
should be conducted by independent contractors who are paid di-
rectly by DOE and should take place every two years.
The difficult task will be to design the criteria for judging what
constitutes a good job. I would suggest the establishment of a com-
mittee consisting of State and Federal officials who would submit a
plan to Congress within 180 days. Congress would have 45 days to
disapprove or amend that plan. This process should be repeated
every two years, since what constitutes appropriate criteria will
change from year to year.
Fifth, as a prerequisite for receiving funds each state should be
required to submit to the Department of Energy a plan which not
only includes a description of how the state proposes to spend its
share of Federal conservation monies but also the following: a de-
scription of the policies and programs will be put in place to ensure
the demand and supply side options are evaluated on an equitable
basis in the consideration of energy efficiency.
[The prepared statement of Mr. Lee follows:]
36
TESTIMONY BEFORE THE SENATE SUBCOMMITTEE
ON ENERGY REGULATION AND CONSERVATION
ON S. 247 THE STATE ENERGY
CONSERVATION PROGRAM'S IMPROVEMENT ACT OF 1989
BY
HENRY LEE
EXECUTIVE DIRECTOR
ENERGY AND ENVIRONMENTAL POUCY CENTER
HARVARD UNIVERSITY
MAY 2, 1989
37
My name is Henry Lee and I am the Executive Director of Harvard's Energy and
Environmental Policy Center. Prior to coming to Harvard, I served four and a half
years as the Director of Massachusetts' State Energy Office. In this capacity, I was
responsible for the implementation of all energy conservation programs for that state.
In recent years, I have done substantial research on the effectiveness of state
and local energy conservation programs and I am now serving as Chairman of the
Advisory Committee to the New England Electric System for their Demand Management
Programs. These experiences have provided me with an opportunity to look at energy
conservation programs from many perspectives. Therefore, I welcome the opportunity
to come here this afternoon to testify on behalf of Senate Bill 247, The State Energy
Conservation Programs Improvement Act of 1989.
In recent years, state energy conservation programs have come on hard times.
Even in those instances in which Congress has been able to restore funds for State
programs, the threat of cutbacks in subsequent years has inhibited the ability of State
energy officials to create any programmatic continuity. Very simply, you caimot
develop an effective energy efficiency program if its life expectancy is totally
uncertain. This statement is especially valid for energy efficiency programs in which
continuity is essential in order to develop markets for those programs and the
infrastructure to deliver them.
Cutbacks in federal funding were based on a premise that government
intervention to promote energy efficiency was simply unnecessary. Markets left to
their own devices would solve the nation's energy problems.
38
2.
There are two fallacies with this view.
First, there is no free market for oil. For the last several months, OPEC has
been able to maintain prices in the range of $18.00 per barrel despite the fact that
there still is a 5,000,000 barrel capacity surplus in the world. As oil consumption
increases worldwide and conventional production declines in the Western countries and,
more particularly, the United States, this surplus will disappear and OPEC will become
even stronger. Oil imports for the past 4 weeks comprised more than 55% of US oil
consumption and could increase to 70% by the middle of the next decade. While there
have been increases in non-OPEC supplies, it is clear that the residual barrel of oil in
the 1990s will be coming out of the Persian Gulf-an area that remains unstable.
While I find these arguments compelling, I am not politically naive. This country
has experienced six consecutive years of declining real energy prices. Gasoline prices
dropped 63% in real terms between 1982 and 1988. The American public feels that
prognosticators such as I are akin to "Chicken Little". The bottom line is that
government can still pursue certain poHcies, such as the Strategic Petroleum Reserve,
but given the present fiscal realities, I do not foresee large amounts of funding being
directed towards energy programs, even though, over the long term, such investments
would be more than justified.
This brings me to my second "source of market failure". It is becoming clear
that energy and environmental policies are inextricably linked. While problems of acid
rain and the failure to meet tropospheric ozone standards in approximately 92 cities
have been targets of concern, it was the emergence of the possibility of global
climate change that turned this concern into a mandate for governments to be much
more sensitive to the environmental implications of their energy policies.
This argument does have public support.
39
3.
Therefore, I find this legislation, S. 247, to be timely. I would, however, urge
the Committee to consider expanding its scope. To some extent, this bill simply takes
the old conservation programs based on the old rationales and makes them more
efficient and equitable. While these goals are worthy of support, this Committee
should consider going further and shaping conservation programs to meet emerging
public concerns.
At this stage, one could legitimately pose three questions:
1) Is improved energy efficiency a reasonable policy option for improving
environmental air quality?; 2) Why should state governments be given the
responsibility for implementing efficiency programs?; and 3) What is the difference
between the conservation programs that were effective in the 70s and those that will
be effective in the 90s?
WHY AIR EFFICIENCY?
At first blush, this is a relatively simple question to answer. Efficiency options
do not emit air pollutants, toxic materials, and water pollution. Further, they take up
almost no land.
I am not advocating that we build no additional power plants, or tear down our
factories or abandon the automobile as a means of transportation. All I am saying is
that we cannot continue to "do business as usual." Anybody who has tried to site a
power facility and run into the very legitimate array of new air, water and land
regulations is aware of what direction the winds of public policy are blowing.
Let me give you a simple example. New England will need about 6,500
megawatts of additional power between now and the year 2000. Given that power
plants are going to be built in smaller increments, this means that we must build 15-25
new moderately sized power facilities, each demanding 300,000-600,000 gallons of water
40
4.
a day, and each spewing out hundreds of tons of pollution into the atmosphere. I
would note that most areas of Southern New England are not in compliance with
federal air standards-standards which some experts are beginning to question as being
too lax. Now, if I ask this Committee, what is the possibility that 15-25 of these
facilities are going to get sited over the next six years, what would be your answer?
I suspect that you would be reasonably skeptical of this prospect. If this is the case,
then the New England states have no choice but to either aggressively pursue energy
conservation or reverse their environmental goals. I do not suspect they will do the
latter.
I can give similar examples for transportation, industrial or commercial sources.
WHY STATE GOVERNMENTS?
What constitutes an effective energy program will differ from one region to
another. The idea that there is a single efficiency program that is effective for the
nation as a whole ignores reality.
Furthermore, the federal government carmot design 50 separate energy efficiency
programs. The only way one can develop programs which are sensitive to the
requirements of each state is to have the state develop those programs.
If the states should design them - why not let them pay for them? If the
benefits could be contained within state borders, I would agree - let them pay. But
benefits from these efficiency programs will, in large part, accrue to the nation as a
whole. The benefits of increased energy security will not be limited to a small
number of states. The benefits of reduced pollution will not remain localized. Acid
rain and ozone have taught us that pollution does not recognize state boundaries.
41
5.
EFFECTIVE PROGRAMS FOR THE 90s
Energy efficiency requires decisions by literally millions of individuals.
Governments do not conserve, people do.
You must give people incentives and the tools to react to those incentives.
The nation went through a quadrupling of oil prices in 1973-74 and then a
tripling in 1979-80. These increases were more than enough to induce homeowners
and businesses alike to substantially reduce their use of energy.
The role of state energy efficiency programs was to provide information to those
people who would not otherwise efficiently and quickly obtain that information. While
most of the conservation that we saw in the late 70s and early 80s stemmed almost
exclusively from responses to price increases, government efficiency programs insured
that the consumer response to those prices occurred at a more rapid rate. I would
argue that the benefit of accelerating the nation's response both measured in terms of
economic stability and social well-being was not trivial.
The situation today is different. As I mentioned earlier, we have seen real
energy prices decline year after year during the 1980s. To try and argue that people
should conserve in response to price will be relatively ineffective. To argue that one
must conserve in order to minimize the damage to our environment will, however, be
compelling in the present political atmosphere.
In the remaining minutes, I would like to offer several suggestions for broadening
the scope of this proposed legislation. I will limit my comments to programs and
policies that relate to state governments, and I will try to be sensitive to the
realities of the federal budget.
42
I would recommend the following:
1) The Committee should change the name of the bill to "The State Energy
Efficiency Programs Improvement Act of 1989". The term, "conservation" is a stark
reminder of cardigan sweaters, low thermostat settings and gasoline lines. It is a term
that is not conducive to generating public support.
2) To the extent possible, all existing state programs, except the Low Income
Weatherization Program, should be consolidated into a single program. This bill makes
important strides in this direction.
3) The Energy Conservation Program for Schools, Hospitals, Local Governments,
and Public Care Institutions should be phased out. The rationale for singling out these
institutions for special attention is no longer relevant. Programs to assist schools and
hospitals should be treated in the same way that we treat programs focusing on other
institutions.
If a dollar invested in reducing energy use in a school building is the most cost-
effective option, then states should spend that dollar accordingly, but if it is not,
then it makes no sense to require states to make such investments, thereby foregoing
more effective alternative uses of this money. The decision as to how to maximize
both fair and efficient use of state conservation money should lie with state officials.
In some states, I am sure that the optimal use of a portion of the money will be to
reduce energy use in hospitals and schools. In other states, this will not be true.
The danger with my suggestion is that the money now going to this specific
program will simply be diverted away to non-energy programs. Therefore, there must
be an agreement between the Congress and the Executive Branch that the funds now
43
7.
used for this program will be available to the states to be used for a broader spectrum
of energy efficiency programs.
4) In keeping with the theme of my comments, I would suggest a trade-off. In
return for more flexibility for the states, Congress should require the Department of
Energy (DOE) to develop an effective process for evaluating state energy conservation
programs. Twenty percent of the funding for all state conservation programs (except
the Low Income Weatherization Program) would be allocated to those states which are
evaluated as having done the "best job". These evaluations should be conducted by
independent contractors who are paid directly by DOE and should take place every
two years.
The difficult task will be to design the criteria for judging what constitutes a
"good job". I would support the establishment of a committee consisting of state and
federal officials who would submit a plan to Congress within 180 days. Congress would
have 45 days to disapprove or amend that plan. This process should be repeated
every two years, since what constitutes "appropriate" criteria will change from year to
year.
It is imperative that the evaluation process be perceived by all the parties as
fair, otherwise this process will not work. On the other hand, I feel confident that an
effective process could galvanize the competitive instincts in each state to develop
more effective energy efficiency programs.
5) As a prerequisite for receiving funds, each state should be required to submit
to the Department of Energy a plan which not only includes a description of how the
state proposes to spend its share of federal conservation monies, but also the
following:
44
8.
a) A description of the policies and programs which will be put in place to
insure that demand and supply-side options are evaluated .on an equitable basis in
the consideration of future energy investments, licensed or regulated by the state.
b) A description of how energy efficiency and alternative fuel programs
compliment and enhance efforts by state transportation and environmental officials
to meet federal Clean Air requirements for mobile sources.
c) An evaluation of the effect of the state energy plan on air emissions
conducted independently by the state's department of environmental affairs (or its
equivalent).
Ten percent of the funding available to the states under the provisions of this
legislation should be earmarked for the development of these state plans.
The purpose of this section is to create a process at the state level which
integrates energy and environmental considerations~a planning process which will
become essential if we are to meet the public's concerns about clean air, global
warming and general environmental quality.
6) I have purposely separated the Low Income Weatherization Program from other
state energy efficiency programs, because it has a dual purpose - first, to save energy
and second, to improve the social welfare of the recipient.
This program has been plagued by an inability on the part of governments to be
clear about the existence of this dual purpose. For example, if one wants to
maximize energy savings, then one would want to insure that the conservation option
on which the last dollar available was spent resulted in more energy savings than any
45
9.
Other option for spending that dollar. If, on the other hand, the goal of the program
is to maximize the welfare for each individual served, then one would want to make
sure that investments were equal for each recipient.
In other words, the design of the Low Income Weatherization Program will differ
significantly, depending on whether you choose to maximize savings or maximize
welfare. If one also considers that the present program is being implemented by
literally hundreds of organizations across the country, one should not be surprised that
there is substantial diversity. I would urge Congress to either attempt to reconcile
this difference or to explicitly agree that the program will continue to have two
purposes and allow the states to select how they wish to strike a balance between the
two.
I also support the provisions in this legislation to waive the 40% requirement,
which has resulted in a substantial amount of uneconomic investment. I would,
however, suggest that a more optimal standard for determining whether to invest in
individual measures would be the ratio of discounted benefits to costs over a broad
spectrum of available investment opportunities. A simple rate of return criteria is only
appropriate if there are no constraints on the total amount of funding available.
These six recommendations attempt to meet four goals.:
1) Provide strong incentives for the states to engage in a creative planning
process, integrating energy and environmental priorities. In an era of low prices, I
think this is the only way to provide new momentum for state energy efficiency
programs.
2) By integrating environmental, energy and transportation concerns, it may be
possible to leverage additional funding for programs which are multi-faceted, i.e. they
serve both energy and environmental purposes.
46
10.
3) Give the states the flexibility and the funds to do the most effective job
possible. In return for this flexibility, the federal government has an obligation to
evaluate these programs and to insure that this evaluation is both objective and fair.
4) Streamline the existing array of programs to maximize the ability of states to
pursue cost-effective measures in an era of fiscal constraint and where feasible,
provide incentives to insure these abilities are tapped to their fullest potential.
I appreciate the opportunity to voice my views on this subject and I will be glad
to answer any questions.
47
Senator Metzenbaum. We will put the balance of your statement
in the record.
What did you suggest the new name ought to be?
Mr. Lee. Substitute "Energy Efficiency" for "Conservation".
Energy Efficiency Improvements.
Senator Metzenbaum. Ms. Duckett, you are the next witness ac-
cording to our schedule, but Senator Bumpers would like to be here
to hear your testimony, and I do not want to deny him that oppor-
tunity. He will be here by 2:50 p.m., if that would be all right with
you.
Ms. Carol Tombari, Director of the Energy Management Center,
Austin, Texas. We are happy to hear from you.
STATEMENT OF CAROL TOMBARL DIRECTOR, GOVERNOR'S
ENERGY MANAGEMENT CENTER, STATE OF TEXAS
Ms. Tombari. Thank you very much. I am happy to be here. I am
the director of the governor's Energy Management Center for the
State of Texas, and we administer the Federal and the State con-
servation programs for the State.
I am also on the board of directors of NASEO, which is the Na-
tional Association of State Energy Officials, and in that capacity I
have chaired a committee of NASEO, the Committee on State
Energy Conservation Programs. We have been aware of the devel-
opment of this legislation and have worked with some of your staff
over the months, having been very privileged to do so.
I want to thank you very much for taking leadership on this im-
portant issue. We think it is vital, and we are interested in seeing
these programs reinvigorated and ready to take us on into the 21st
Century.
NASEO as an organization represents 50 states, territories and
the District of Columbia, so you can imagine that we bring a lot of
different perspectives to bear when we evaluate energy issues, not
the least of which some of us are producing states and some of us
are consuming states.
Among the large common ground that we have found is our
belief that energy efficiency is a vitally important part of the over-
all energy mix that should take us into our energy future.
We in Texas, by the way, abandoned the word "conservation"
about eight years ago. "Efficiency", for whatever reasons, just
seemed to speak very well in our state. We use the terms "efficien-
cy" and "management" interchangeably. We found that when
President Reagan said that "conservation" had connotations of
sweating in the summer and freezing in the dark in the winter, we
tried to find a happier word. I am not sure how substantive that is,
but we went for it.
We are very happy to support this bill, S. 247. We heartily en-
dorse it. We think it takes a realistic and achievable step towards
boosting the effectiveness of the energy efficiency programs that
we all run.
You asked what we have learned in the course of administering
these programs. One very important lesson that we have learned is
that as important as it is to provide technical assistance and to
educate people in energy efficiency, you have not completed the job
48
unless you have made the capital investments that actually secure
those energy savings.
With all the technological developments over the past 10 years
and the advancements that have been made in the analj^tical meth-
odologies whereby we can quantify the energy savings, we now are
at the point where we can say that energy conservation, energy ef-
ficiency and capital improvements can result in measurable, reli-
able and predictable energy savings.
That is, I think, the mission of these programs in the future, and
that is why I especially like the innovative financing provisions of
this legislation. It will enable the states to get those hardcore sav-
ings in place and working for us. We find that that is a key provi-
sion in this bill.
A related provision in the bill that we in Texa also like is the
integrated energy planning provision, because on we have those
measurable and reliable savings in place, then w can look at off-
setting additional generating capacity. I think that that will help
everybody in the future.
I am not saying there are no more power plants are going to be
needed. That is not the case at all; but such additional generating
capacity can be offset through these programs.
The State of Ohio I think is to be commended in particular for
the innovative financing strides that that state has taken. They
have leveraged additional private sector funds, and that is some-
thing that S. 247 would make available to all states to do. We think
that would be beneficial.
Other provisions of the ill require energy emergency planning on
the part of the states. States do not often like to be told by the Fed-
eral Government what to do, but there is a clear national interest
at stake here. Really, this is a case where if we do not all hang
together, we most assuredly will all hang separately.
I believe in the last decade there has been some ground lost
among some of the states in their energy emergency planning ef-
forts. We really do need to be prepared so that we have no weak
links in the chain.
I will be very happy to answer any other questions that you may
have.
[The prepared statement of Ms. Tombari follows:]
49
NASEdJNt/tionalAssockid^i
TESTIMONY
Chairman
Charles R Gumn
(New York)
OF
CAROL TOMBARI
Vice Chairman
Dr Donaia E Milsien
IMarylanO)
OF THE
Treasurer
Charles J Clinton
(District ol Columbia)
Secretary
Chetryi Duckett
(Arkansas)
NATIONAL ASSOCIATION OF STATE ENERGY OFFICIALS
BEFORE THE
SUBCOMMITTEE ON ENERGY REGULATION
Parliamentarian
Mitch Beaver
AND CONSERVATION
(Illinois)
COMMITTEE
ON ENERGY AND NATURAL RESOURCES
Paul Burks
(Georgia)
UNITED STATES SENATE
Mark Ginsberg
(Arizona)
MAY 2, 1989
Charles R Imbrecht
(California)
Bob Jackson
(Missouri)
Van Jamison
(Montana)
Sharon M Pollard
(Massachusetts)
Carol Tombari
(Texas) J
Richard Watson
(Washington)
Executive Director
Annette Osso
Counsel
Jeffrey C Genzer
Duncan, Weinberg, Miller
& Pembroke
1615 M Street NW
Suite 800
Washington, D C 20036
(202)467-6370
IJlgHWWCW 613 C Street. SW. 5d> Floor. VMitngm..m^lOSf^^^
:rpyg^!^sp!.:
50
Chairman Metzenbaum, Subcommittee members, I am
pleased to have the opportunity to appear before you today
as you consider this important legislation. I am Carol
Tonibari, Director of the Governor's Energy Management
Center in Texas. We administer federal and state energy
conservation and renewable resource programs. I also am a
member of the Board of Directors of the National
Association of State Energy Officials (NASEO) and I chair
the NASEO Committee on State Energy Conservation Progrcims.
Today, I am testifying on behalf of NASEO in strong
support of this legislation
Mr. Chairman, I would initially like to thank you
for your aggressive support of these energy progreons over
the years. Your dedication has not gone unnoticed by the
state energy officials. We like to think of ourselves as
the foot soldiers in the trenches actually reducing energy
waste and promoting a secure energy future. Senator, if
we are the foot soldiers you are certainly one of the
generals.
NASEO is comprised of state energy officials in 50
states, territories and the District of Columbia, and
NASEO is affiliated with the National Governors'
Association. State energy offices are independent
agencies, or are located in Governor's offices, public
service commissions, natural resource agencies and other
bureaucratic configurations across the land. The vairying
51
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institutional arrangements — plus our orientation as
"producing" or "consuming" states — bring differing
perspectives to bear in our evaluation of energy issues.
It should be stressed, however, that there are far
more issues on which we all agree than disagree.
Obviously, energy policy is vital to the security of our
nation and the quality of life of its citizens.
Identifying our energy needs and mapping a realistic,
economical strategy for meeting these needs are too
important and complicated to ignore. Moreover, meeting
these needs involves finding the ideal mix of resources,
technologies and actions.
An important part of the mix is energy efficiency.
It also is a valuable tool in alleviating a number of
national ills, from over-dependence on foreign sources of
oil to acid rain. A modest step in boosting the positive
impact of energy efficiency would be to update and improve
the four Federal energy conservation programs created in
the 1970 's and administered by the states since that time.
These four programs are the State Energy Conservation
Program (SECP), the Energy Extension Service (EES), the
Institutional Conservation Program (ICP) and the
Weatherization Assistance Program (Weatherization) .
These programs have established a solid track
record in the decade or more during which they have served
the public. In 1987, the cumulative energy savings
attributed to program intervention through the SECP
52
- 3 -
progreun was reported by DOE to be more than four quads —
or 744 million barrels of oil equivalent. At $20 per
barrel/ that represents almost $15 billion that was
available for other investments (hopefully within the
doroest;' c: economy) — with no penalty in productivity or
comfort. According to the U.S. DOE calculations, ICP
produced cumulative savings of 317 trillion Btu's,
resulting in a cost avoidance of almost $2 billion.
SECP, ICF, EES and Weatherization were enacted as
the result of the nation's sudden realization — prompted
by the Arab oil embargo — that its wasteful energy habits
could have devastating economic and security consequences.
It was imperative that citizens be educated to the need
for energy efficiency, and the means of achieving it.
These programs have met those needs and, beyond that, have
resulted in significant, measurable energy savings. The
fact is, had these programs not existed, we would be in
far worse shape today.
Times have changed in the past fifteen years, and
it is time for the programs to change with them.
Technological advances permit impressive and reliable
energy savings unheard of in 1976, and improved analytical
methodologies permit us to evaluate and quantify those
savings more accurately. Thirty-four-watt high-efficiency
fluorescent tubes, motion detectors, packaged cogeneration
units, high-efficiency absorption chillers, electronic
energy management systems, high efficiency magnetic
53
- 4 -
ballasts, and thermal storage are among the host of
conservation and load management devices that have
significantly raised our expectations regarding what is
realistically achievable in energy savings and cost
avoidance. It should be noted that ICP, SECP and EES have
provided a valuable proving ground for such devices.
S. 247, the "State Energy Conservation Programs
Improvement Act of 1989," proposes changes in these
programs to meet the challenge of a changing world and to
bring the programs into the 21st Century as effective
tools in helping meet the Nation's energy needs and
alleviate its environmental problems. The mid-course
corrections proposed in S. 247 reflect increased knowledge
regarding the unmet energy needs of the country. These
amendments would permit states to capitalize on the
technological improvements of the past decade and to make
modifications based on what we have learned.
Integrated Energy Planning
One key development over the past decade has been
the ability to quantify and reliably predict energy
savings attributable to energy improvement measures.
Energy conserving measures thus supply energy, and load
management devices supply plant capacity, making it
possible to recognize the contribution of energy
efficiency to reducing future power plant additions. For
example, the City of Austin, Texas, has attributed 553
megawatts to these conservation and load management
54
- 5 -
resources during the next decade through these prograuns
and is building what it calls a "conservation power
plant".
The ability to supply energy and capacity through
conservation and load management has staggering
implications for the electric utility industry. The right
mix of conservation, alternative resource and load
management measures can offset the need for a substantial
amount of additional generating capacity. In Texas, we
estimate that the ten-year conservation potential in just
the residential and commercial sectors is 7 300 megawatts -
- more than seven large power plants. An additional seven
power plants may be found in the industrial sector when we
finish modelling it.
An integrated energy planning process is needed to
effectively blend the reliable and predictable demand-side
options with the traditional supply-side alternatives, on
a "level playing field." S. 247 would specifically
promote integrated energy planning. This activity would
be added to the list of optional programs allowable under
SECP, so that all resources are examined by States. NASEO
has formed a joint committee with the National Association
of Regulatory Utility Commissioners (NARUC) to promote
this activity. I might add that NARUC has written a
letter in support of S. 247.
We believe that new power plants are needed, but
that when we look at all resources we must also fairly
55
- 6 -
consider energy efficiency. We wish to stress, however,
that we support a balanced energy policy that considers
all resources. In fact, last year, NASEO prepared a
national energy policy statement which I have provided to
the Subcommittee. This policy is consistent with the
policy adopted in early March by the National Governors '
Association.
Innovative Financing
Another key lesson learned in the past decade is
that reliable and predictable energy savings derive not
only from brochures and workshops but from energy
efficient capital improvements to structures and
equipment. Education and technical assistance, as
valuable as they are, do not produce the reliable and
measurable savings that equipment and building shell
upgrades do. Unfortunately, the lack of adequate capital
has profoundly limited these needed investments. S. 247
would permit states to use funds expended under both TCP
and SECP to promote alternative financing programs to
leverage the funds needed for energy efficient
investments .
Specifically, S. 247 would permit the states to
capitalize on developments in the financing field. It
would allow them to match the 50% Federal grant funds in
ICP with loan progreims, performance contracting or with
other programs of innovative financing to provide the
school or hospital's share. We have found that schools
56
- 7 -
and hospitals, especially in depressed areas, have
difficulty meeting the 50% match requirement. This bill
explicitly provides that other financing can satisfy this
match in ways that may not require a front-end loaded
capital contribution by the institution. Obviously, money
saved on reduced energy costs can be used to provide more
educational and medical services in these institutions,
which is clearly an important national goal.
Under the SECP program states have instituted so-
called demonstration projects involving capital investment
in energy projects. The rules, and especially the
application of these rules by DOE, have slowed these
projects down and have added more paperwork than is
necessary. Reflecting the needs identified by State
energy offices, SECP has evolved from more of a planning
and educational program into a progrcun that mixes planning
and education with capital investment in energy projects.
States have worked to get a reasonable rule since 1983.
In response to NASEO's 1986 petition, DOE issued a final
rule in December, 1988, to loosen the rules slightly to
allow more financing projects to go forward. The rule is
a step in the right direction, but frankly it does not go
far enough.
The states want a greater ability to obtain
outside financing and to stimulate public-private
partnerships, including leveraging of resources. Some of
the innovative financing projects instituted by states.
57
- 8 -
despite the limitations of the current law, include the
following:
(1) QhJQ
In Ohio the state recently subsidized the
interest rates on more than 2,000 loans for energy
conservation improvements in Ohio homes. The $1.2
million interest subsidy leveraged $6 million in
private sector funds. Also in Ohio, the State Energy
Office provided $4 million to match $7 million from
three major utilities to weatherize 12,000 housing
units. This is an example of the type of public-
private partnership that we want to encourage.
(2) Idaho
The State of Idaho's Energy Office has
developed an Alternative Financing Demonstration
Progrcun which provides low-interest energy conservation
loans to virtually every sector of the economy. In
less than two years, 1,000 loans totalling $15,700,000
have been completed. Energy savings have totalled an
estimated $1,707,815 per year.
(3) Colorado
Through SECP, the Colorado Office of Energy
Conservation has launched a demonstration performance
contracting project in the state capitol complex.
State in-kind contributions have leveraged private
sector investments of more than $175,000. The state
will realize approximately $50,000 per year in energy
58
- 9 -
savings throughout the period of the performance
contract and $50,000 per year during the remaining
useful life of the retrofits.
(4) Utah
The Utah Energy Office currently utilizes
SECP funds for a Demonstration Energy Financing Progrsun
for State Government Buildings. This program provides
three-year loans to implement energy savings projects,
such as automatic control systems, variable air volume
retrofits, lighting modifications, storm windows and
insulation. The Energy Office estimates the annual
savings for this demonstration activity at $558,264.
(5 ) Oregon
In Oregon, SECP funds were used to establish
the Business Energy Tax Credit Progreun (BETC). BETC
has helped more than 1,600 businesses and generated
more than $140 million in project investments. The
annual energy savings for this program currently exceed
$50 million.
Flavorland Foods, Inc. of Forest Grove,
Oregon is just one example of a business that
participated in the BETC program. Flavorland will
receive a $52,000 state tax credit for new freezers
used to process berries and corn. The new freezers
will save an estimated $12,000 per year in energy
costs. These savings, in addition to those from a
previous BETC project at their new plant, have reduced
59
- 10 -
Flavorland's energy consumption to 45 percent of the
consumption at the old facility.
Energy Savings Goal
S. 247 also sets an updated energy savings goal of
ten percent of projected consumption by the year 2000.
The energy office in Michigan estimates that, if met, this
target could mean energy cost savings for the nation of
$326 billion over 10 years, based upon DOE's current long-
term energy use projections. Frankly, these energy
programs are critical to reducing our consumption of
foreign energy sources. In 1988, the net value of our
energy imports was $32.9 billion, which was 28% of our
trade deficit. Thus far in 1989, our crude oil and
petroleum product imports have increased by 13.2% and
18.1%, respectively, through mid-April.
Energy Emergency Planning
Another provision of S. 247 adds energy emergency
planning to the list of mandatory programs states must
undertake with their SECP funds. Due to the ten-year
respite from energy supply disruptions and dreunatically
reduced federal funds available for these programs, energy
emergency planning has been relegated to "back burner"
status in many states. These energy conservation progreuns
were created, in part, to build a national infrastructure
in the event of an energy emergency, yet SECP did not
mandate energy emergency planning. It would be a cruel
irony indeed if years of neglect by some rendered the
60
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infrastructure impotent when needed by all. We have
worked closely with Edward Badolato, Deputy Assistant
Secretary for Energy Emergencies at DOE, since he joined
the Department. We have made great progress in forging
needed communications links with DOE in this area and we
hope to continue that close cooperation.
We would also suggest a technical cunendment to
Section 3(a)(6) of S. 247 to ensure that dual approvals at
the state level of energy emergency planning progreuns are
not required before submission to DOE. We have worked
with DOE energy emergency planning staff in developing the
language which we will submit to the Subcommittee. We
want to clarify the point, however, that no approvals of
state energy emergency plans are sought or required by
DOE. These plans will be submitted to DOE for
informational and coordination purposes.
Energy Extension Service and Supplemental State Energy
Conservation Program
The proposed merger of EES into SECP, recognizes
that energy offices generally operate these progrcims
together. In the interest of streamlining administrative
tasks associated with progreun delivery, S. 247 would
eliminate the EES as a separate progrcun while retaining
and incorporating key EES activities among the mandatory
SECP elements. This provision would also eliminate the
EES Advisory Board. Finally, S. 247 proposes the repeal
of the so-called "Supplemental State Energy Conservation
61
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Program" (42 U.S.C. § 6327), since all the key provisions
are included in the merged SECP/EES program.
Alternative Transportation Fuels
The legislation would also explicitly promote the
use of alternative transportation fuels. The states have
been the leaders in this area, with California especially
contributing significant resources to the development of
cleaner transportation fuels, such as methanol, ethanol,
compressed natural gas and electric vehicles. This is a
key area in which the state energy programs are linked to
mitigation of environmental problems. Southern
California's recently announced air quality improvement
program assumes a significant contribution from
alternative motor fuels. The states have worked closely
with General Motors, Ford and Detroit Diesel Corporation
in promoting such alternatives. A number of other states
from New York to Hawaii have begun activities in this
area.
This is just one area where energy and
environmental issues are linked. It should be noted that
S. 247 is included as Title V of S. 324, the legislation
dealing with global warming. Energy offices are involved
in a variety of environmental programs. New York State
has an extensive radon mitigation progreim operated by the
energy office. Connecticut's energy office has set up
regional recycling centers. State energy offices
throughout the country are engaged in activities ranging
99-832 - 89 - 3
62
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from waste reduction to resource recovery plants. Other
examples include:
(1) Rhode Island
The Governor's Office of Energy Assistance and the
Department of Environmental Management have designed a
program for the state to provide a "start-up" incentive
for communities to recover and utilize waste oil as energy
while protecting the environment. Rhode Island projects
that this program should recover an estimated 193 billion
Btu's per year of energy statewide, which is the
equivalent of more than 33,000 barrels of oil.
(2) North Dakota
The State of North Dakota has instituted an SECP
demonstration project for wheat farmers — a "Solid Fuel-
Fired Grain Dryer". This device is not merely a dryer,
but it is also a furnace which is compatible with most
existing commercial crop dryers.
The furnace uses a heater which burns coal in
conjunction with agricultural wastes such as straw, chaff,
sunflower hulls, and corn cobs. Burning at 85%
efficiency, the dryer produces low stack temperatures and
eliminates many possible air contaminants. The fuel cost
savings for this dryer approach 90%, which amounts to an
estimated net cost savings of $.10 per bushel for wheat
that yields 35 bushels per acre.
63
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Conclusion
I would be remiss if I did not mention that we
appreciate the cooperation we have received from both Alan
Stayman and Leslie Black of the Subcommittee staff, and
from David Nemtzow of your staff, in developing this
legislation. We have worked with Al on this bill for over
a year.
The energy challenges facing the nation are many
and complex. Despite the impressive performance of these
programs, there still is a large unmet need in our
country. For example, DOE estimates that the ICP program
has served 29% of the total eligible schools and
hospitals. S. 247 proposes a number of measures that are
achievable. They represent a logical step in tackling the
larger energy issues that will confront us by the year
2000. We heartily endorse this bill.
64
Senator Metzenbaum. Thank you very much, Ms. Tombari.
Mr. WiUiam Concannon, Assistant Secretary in the Executive
Office of Communities and Development in Boston, Massachusetts.
STATEMENT OF WILLIAM L. CONCANNON, ASSISTANT SECRE-
TARY, MASSACHUSETTS EXECUTIVE OFFICE OF COMMUNITIES
AND DEVELOPMENT
Mr. Concannon. Thank you, Senator Metzenbaum. Thank you
for the opportunity to testify on behalf of S. 247.
Prior to becoming Assistant Secretary, I was the Director of the
Massachusetts Office of Energy Conservation for five years. In that
office rests the responsibility for the policy and management devel-
opment of State, Federal and oil overcharge energy conservation
programs.
I am here today. Senator, to tell you that the Weatherization As-
sistance Program is not a soft delivery program. It is a program
that has a hard message and delivers cost effective results to poor
families across this nation. We are a program with notable bene-
fits. We save energy, and in saving energy we reduce fuel bills for
poor persons. We stabilize and observe low income housing by
adding benefits to that home which last for in excess of 20 years.
We create a conservation industry and sustain it on a local level
either through the purchase of inventory or through developing
skills among persons who otherwise may not have them. We lower
C02 emissions into the environment by conserving energy.
We have changed this program in the course of the last decade,
and we have changed it for the better. I would like to share with
you a brief chronology of the Massachusetts history relative to
change.
In 1981 we introduced a tenant-landlord agreement for the pro-
tection of tenants. They could not have their rent increased for one
year based upon conservation improvements.
In 1981 we also purchased our first infrared scanners as a qual-
ity control measure in a home.
In 1983 we began paying for subgrantee staff persons to get their
oil burner technician licenses so that they were informed and
skilled in people's homes.
It was that year that we first did an energy saving study and fol-
lowed it up for two successive years to evaluate ourselves relative
to the improvements in the program.
In 1984, five years ago, we purchased our first blower door to
ensure that what we were doing in a home was cost effective.
In 1985, we focused on training and began in concert with the oil
and gas industry providing training for all of our people.
In 1985, we created a heating system program. We noted that the
Department of Energy Weatherization Program did not have the
resources for us to retrofit, repair or replace a low income person's
heating system. We could not serve people well. Consequently,
through a separate pot of money we created a program which will
spend up to $2,200 in someone's home to replace their heating
system. It is a tremendous program. It is noteworthy. It is valuable
and necessary for low income persons and presently not possible
through the DOE program.
65
In 1986 we began our linkages to other programs to ensure that
our dollars were leveraged well. For instance, we ensure that if we
are going to weatherize public housing that other funds are in
there as well.
We have grown. We have changed. We have coordinated applica-
tions for fuel assistance and weatherization. Many opportunities
await us. S. 247 addresses some of those.
We support the elimination of the 6040 provision but support it
on the condition that there is a cost payback audit. If you want to
protect dollars, we need the audit.
We support the elimination of the $1,600 cost per unit if there is
the replacement of someone's heating system. We would add that
the heating system should be replaced not only in terms of cost
payback but alwo in terms of safety. It makes no sense to weather-
ize someone's home and leave an unsafe heating system.
We do not support the authorization level of $200 million but ask
that you increase it to $350 billion. Our suvey shows that we have
spent $500 million in one year based upon oil overcharge funds,
weatherization and other support, and with the elimination of oil
overcharge funds and the use of fuel assistance funds we request a
$350 million authorization level.
Thank you very much.
[The prepared statement of Mr. Concannon follows:]
66
TESTIMONY
OF
WILLIAM L. CONCANNON
ASSISTANT SECRETARY
MASSACHUSETTS EXECUTIVE OFFICE OF COMMUNITIES AND DEVELOPMENT
ON BEHALF OF THE
NATIONAL ASSOCIATION FOR STATE COMMUNITY SERVICES PROGRAMS
ON
S.247
THE STATE ENERGY CONSERVATION PROGRAMS IMPROVEMENT ACT OF 1989
BEFORE THE
SUBCOMMITTEE ON ENERGY REGULATIONS AND CONSERVATION
OF THE
COMMITTEE ON ENERGY AND NATIONAL RESOURCES
MAY 2, 1989
67
I would like to thank Senator Metzenbaum and the other members of the
Subcommittee on Energy Regulation and Conservation of the Committee on
Energy and Natural Resources for the opportunity to testify on S.247, the
State Energy Conservation Programs Improvement Act of 1989. My name is
William L. Concannon, and I am an Assistant Secretary with the Massachusetts
Executive Office of Communities and Development. For five years prior to
assuming this current position, I was the Director of the Massachusetts
Office of Energy Conservation in which rests the responsibility for all
state, federal, and oil overcharge weatherization assistance programs.
Today I shall present the official position of the National Association for
State Community Services Programs (NASCSP), and shall limit observations and
comments to those pieces of the proposed legislation which affect the
Department of Energy Weatherization Assistance Program.
The weatherization assistance program has, throughout its history, provided
low income people with a service which reduces fuel consumption, saves
energy, and lowers fuel bills; preserves affordable housing; and provides
comfort against the elements. It is also a program which has supported the
economy by producing the growth of small business contractors.
The weatherization program is not a soft delivery program. Rather, it is
one which brings to a low- income person's home a product for which there is
a cost-effective result. The weatherization program has evolved from
emergency one-time service and do-it-yourself workrhops to a quality program
which promotes long-term, maximum payback measures. States have developed
strong tenant/landlord policies, promulgated well researched consumer
education literature, established energy conservation material standards,
and created cost efficient heating system assistance programs with other
funds - soon to disappear entirely.
Approximately 2 million households have received weatherization assistance
since the DOE program began in 1977. While this is certainly a significant
number, 1980 census data indicates about 19 million households are eligible
for our services.
The weatherization program has matured, achieved an outstanding record of
accomplishment, and gained effectiveness as we have weatherized low-income
homes over the last twelve years. Weatherization is a comprehensive program
that provides economic benefits to low-income Americans while contributing
to energy conservation, lessening environmental degradation caused by the
buildup of C02 (carbon dioxide) in the atmosphere, and stimulating the
economy. Notable benefits of the program include:
0 Results in substantial energy savings and therefore reduces monthly
fuel bills for low-income families, particularly the elderly and the
handic? led, who walk the line between paying for housing, food,
and/or edical needs. Among other costs, and being homeless;
0 Stabilizes and preserves low-income housing stock, a rapidly
diminishing product, by insulating walls and attics, replacing
windows, and completing furnace modifications - all measures which
remain with a home well into the future;
0 Continues to create a residential conservation industry in the labor
force whose expertise and technical know-how is substantial; and
68
0 Lowers C02 emissions due to reduced energy consumption, and therefore
a) diminishes the need for foreign energy resources and b) helps to
relieve global warming. (The energy savings estimated for the
weatherization program of the last year alone corresponds to 1.5
billion pounds of C02 not being emitted into the atmosphere each
year. )
The Weatherization Assistance Program continues to grow and to change. It
has responded to the challenge to offer low-income households state-of-the-
art technology. Through considerable effort on the part of DOE, State
personnel, and interested advocates, we have changed the program from
installing a plastic cover on a window to installing vinyl replacement
windows with low e glass; from using CETA and volunteer labor to employing
trained technicians, often with licensed skills; from delivering the program
as a single source of assistance to creating one application for energy
assistance which ensures that a household is considered for every energy
conservation program offered.
At present in every state in the union there are professionally managed
weatherization offices which administer weatherization operations through an
extensive network of over 1,500 subgrantee agencies. Working with in-house
crews, private subcontractors, or some combination, weatherization services
provided by a significant portion of those professional organizations
presently include:
0 Careful energy audits that make use of field computers, blower doors,
infrared scanners, and furnace testing equipment. The audit results
in rite specific analyses and detailed work orders;
0 Sophisticated air sealing and insulation applications tailored to the
needs of each dwelling, taking into account cost-effectiveness of
measures installed, as well as indoor air quality and related
considerations;
0 The retrofit (or replacement, where appropriate) of inefficient
heating systems to achieve greater efficiencies in producing and
distributing heat;
0 New energy-efficient window and door systems, particularly in multi-
family buildings and mobile homes whose doors and windows are
typically dilapidated;
0 Detailed energy conservation consumer education related specifically
to clients' dwellings; and
0 The coordination of various resources, over and above the
weatherization funds, to increase the scope of work on client
dwelling units, thus increasing the net ffectiveness of the program.
The DOE Weatherization Assistance Program has matured in capability and
design and is at a point where, now, in its young adulthood, it represents
the best of government in kind and spirit. There are, however, more
opportunities for growth, more areas in which the program can change to
ensure comprehensive service to low-income families. S.247 addresses some
of those areas.
The current law requires that 40% of the expenditures in a unit be for
materials. At the time the weatherization program was conceived, this made
69
-3-
sense. It tried to guarantee that maximum service - measured by installed
materials - occurred in every weatherized home. However, this reauirement
is now becoming obsolete as technical advances in the field of auditing
indicate that it is sometimes more cost-effective to perform labor-intensive
work. In other words, after performing a sophisticated audit in a home, we
may learn that the most cost-effective blend of measures is one which
installs labor-intensive measures which the 60/40 ratio would otherwise
prohibit. For instance, furnace work and wall insulation are low-
material/high labor items; often these measures cannot be added to a home
because of the out-dated standard which S.247 proposes to eliminate. The
National Association for State Community Services Program (NASCSP) advocates
that the 40% requirement for materials be replaced by a proviso which ties
expenditures to an energy audit to determine the most cost-effective
measures to be installed.
S.247 also seeks to amend the dwelling unit limitation under specific
circumstances. While NASCSP believes that the $1,600 average is, in many
instances, still appropriate, the proposed revision would better allow
states to perform heating system improvements. As it stands now, most
states try to perform heating system work using non-DOE WAP funds, typically
LIHEAP or oil overcharge resources. Access to LIHEAP funds for
weatherization activities is now almost impossible in the face of continued
reductions in the federal appropriation; Oil Overcharge funds have - for the
most part - been committed or spent. The proposed change in S.247 is
proactive in nature, and not a fiscal year too soon. It is essential that
states have the ability to serve low-income households in a comprehensive
manner. We believe that this must include the opportunity to perform
heating system retrofits and replacements.
S.247 seeks to authorize $200 million for the weatherization program in
FY 1990 and such sums as may be necessary for 1991 and 1992. NASCSP cannot
support the authorization level as proposed. Instead, we propose that the
authorization level for DOE WAP for the next three years be no less than
$350 million. We did not reach this figure arbitrarily. As noted above,
the weatherization program is facing a withdrawal of financial support from
two of its most abundant sources. During the past few years, when the
weatherization program had access to LIHEAP and oil overcharge funds, we
estimate that we were, in fact, spending on the national level at roughly
$500 million. We are soon to be dependent on DOE funds alone. A $200
million appropriation, though certainly appreciated, would force us to
continue the weatherization of American at a snail's pace. A lowely funded
program would allow us to continue our work, but at a level without great
and immediate benefit.
NASCSP advocates four additional changes in program direction, presently not
stated in S.247, as follows:
0 Funds need to be made available within the weatherization program to
replace a primary heating system where safety is a factor (as opposed
to its replacement in instances of cost-benefit). Weatherizing a
home which has an unsafe heating system can pose health problems and
tragedy.
0 We seek legislative language permitting states to weatherize multi-
family buildings conditioned upon the owner's willingness to
contribute funds toward the cost of that weatherization.
70
-4..
0 We would like to see the conservation of electricity as an important
activity within DOE WAP. To that end, we propose tnat weatherization
programs be allowed to install electricity-saving measures (ballasts,
fluorescent bulbs) in a low-income home independently of the cost-
effective audit.
0 The weatherization program needs an ongoing evaluation component to
determine t!ie effectiveness of measures that are performed. Funds
need to be available to allow states to develop studies that will
enable DOE and the Congress to make better determinations about the
effectiveness of the program nationally.
The good sense and logic behind the weatherization program is even more
sound today than it was when it was conceived over a decade ago. Those
years in between have built a dynamic, committed network of people who
believe deeply in the validity of the program's purpose and who feel a
responsbjlity to deliver on the promise of that purpose. Indeed, the energy
and commitment of the program's human resources may be its greatest asset.
From it comes the innovation and dedication that has brought the
Weatherization Assistance Program to the level of competence and
professional integrity in evidence today.
Thank you for this opportunity to testify on behalf of S.247 and other
issues important to the Department of Energy Weatherization Assistance
Program. The National Association for State Community Services Programs
looks forward to working with you to shape this legislation and to guarantee
its passage.
i
71
Senator Metzenbaum. Thank you very much, Mr. Concannon.
Mr. Fred Tucker, Executive Director of the Dixie Community
Action Agency of Hugo, Oklahoma.
STATEMENT OF FRED TUCKER, EXECUTIVE DIRECTOR, LITTLE
DIXIE COMMUNITY ACTION ASSOCIATION
Mr. Tucker. Thank you, Mr. Chairman. I am very pleased
Senator Metzenbaum. Does Oklahoma consider itself Dixie?
Mr. Tucker. Little Dixie. This came from the history of a former
speaker that named that area of the country.
Senator Metzenbaum. Thank you.
Mr. Tucker. Senator, I am very pleased to be able to represent
the National Community Action Foundation and the 900 communi-
ty action agencies who deliver most of the Weatherization Assist-
ance Programs. We are grateful for your leadership on this new
legislation and for your unwaivering support of our efforts over the
past difficult years.
Our DOE program is typical of small programs in rural areas in
the Sunbelt. What is not necessarily typical about our agency is
the variety of other funding sources that we have coordinated with
the DOE program, the help we have received from the State office
on getting funding for several related programs.
We have $77,000 from DOE and $41,000 from Energy Assistance.
Together they provide insulation, infiltration reduction, storm win-
dows and minor repairs to 107 homes per year at an average cost of
$1,100.
In addition, we can save a lot of money even at this level of in-
vestment. I am submitting for your records three records of house-
hold bills before and after weatherization.
We also administer a housing and energy rehabilitation program
under the Farm Home Administration. This is very important to
us because of our extremely substandard housing stock. We use oil
overcharge funds administered through the DOE program to pay
for that part of the rehab which involves energy efficiency. This
program puts $1,600 of the energy funds together with $8,000 of
farm home preservation grant funds and 30 homes per year. We
leave these families with a safe and sturdy housing unit that con-
tinues to be habitable for many years.
Frankly, Mr. Chairman, it is a shame that we cannot combine
rehab funds with all of the energy jobs we do. Energy is one of the
significant housing costs in our area, and the deteriorated condi-
tions of the homes and the inadequacy of the basic plumbing and
wiring systems are also costly to these families.
Our housing stock is extremely poor. So are our clients. The av-
erage income of the household we weatherize is $5,563 for a family
of three. These are typically people who work at jobs that are not
secure and fulltime but, rather, hourly jobs and are occasional and
seasonal. We have 426 such families on our waiting list, and they
could expect to wait an average of 11 months.
As you can tell, Mr. Chairman, we have a lot of need in Oklaho-
ma but not enough resources to meet that need. Under the formu-
la, we got just under a $3 average per household compared to ap-
proximately $60 in some mountain states. We would like to be able
72
to use these monies to keep houses cooler in the summer, as their
elderly are really threatened by the terrible heat.
In closing, Mr. Chairman, weatherization has become the key
part of the arsenal we use in fighting poverty. We have expanded
the core DOE system using other resources and ideas that we can
make a real cut in energy bills that stays with the household long
after the work crews have gone home. Our clients are more com-
fortable, healthier and have a little more money for basic necessi-
ties.
National studies show that poor have only 6 percent of their
income left for all discretionary uses after paying for household, in-
cluding energy and food. In our area, that translates to about $336.
Thank you for having me here today and, far more important,
Mr. Chairman, thank you for maintaining this important energy
initiative.
[The prepared statement of Mr. Tucker follows:]
73
May 2, 1989
TESTIMONY OF FRED TUCKER
Executive Director
Little Dixie Community Action Association
Hugo , Okl ahoma
On Behalf of the National Community Action Foundation
Washington, DC
Mr. Chairman, the National Community Action Foundation
represents the nation's 900 Community Action Agencies who deliver
the Department of Energy's Weatherization Assistance Program, as
well as conservation initiatives funded by Energy Assistance, oil
overcharge funding and major utility conservation program. Our
programs are alive and healthy thanks to the continuing support of
your Subcommittee and its House and Appropriations Committee
counterparts. Without the firm resistance you have provided all
our low income programs in the face of serious threats of
extermination from the Reagan Administration over 4 million low-
income Americans would be colder, poorer, sicker and less well-
housed than they are today. We and our clients are deeply
grateful the legislation you have proposed will improve and
modernize the program and enable it to function even more
effectively in the coming decade.
I would like to make four brief points and then provide a
great deal of supporting material for your record.
First, the scale of low-income weatherization programs is far
far greater than the DOE's initiative, but the DOE program
structure, agencies and procedures are the template by which most
other initiatives are shaped. The total federal state and private
utility - funded effort totals somewhat more or less than one half
billion dollars, that's $500 million per year. The last
comprehensive study was undertaken in 1986 by the National
Association for State Community Services and showed over 400,000
units of low income housing a year being weatherized. Our
agencies perform the majority of the work, and probably employ
20,000 or more carpenters and building workers both through
private contractors and directly.
Second, unlike the Energy Assistance Program, the Weatheriza-
tion Program has benefitted greatly by the availability of oil
overcharge funds. The National Consumer Law Center report we are
submitting for the Record estimates that, from FY 1986 to sometime
in the early 90 's, some 6 to 7 fiscal years, $635 million will be
added by the States to the DOE program and additional amounts, in
at least the tens of millions, will be channeled through Energy
Assistance programs for conservation improvements.
However, these funds are running out. Doe reports that
States had committed and been approved by DOE to spend $489
million of that amount by the end of FY 88. Fy 89 figures are not
available to us.
74
page two
Some states which made very large commitments to the poor
from PVE funds will use up all available funding in FY 89. We
will be providing detailed material for your record. In any case,
there are not large sums left to use for any low-income programs.'
The NCLC reports states $130 million remains uncommitted.
Frankly, with over 15 million eligible housing units not yet
weatherized and the long long waiting lists at most of our
agencies, we and our clients face the future with great concern.
Energy Assistance resources for conservation have also declined
each of the past 3 fiscal years. The authorization levels in the
bill will permit us to maintain our current efforts somewhat more
adequately than would otherwise be the case.
Third, this program has matured dramatically since the early
1980 's. Since 1983, when we became able to use trained workers
instead of hard core unemployed trainees, and 1984 when your
Committee's amendments made it possible to work on upgrading
heating systems and installing modern technology, our
sophistication has soared. While states like Ohio or Oklahoma
still use a standardized list of conservation measures, we have
more options to use on each house. Further, our crews and
contractors are carefully trained and certified for the tasks they
perform. Many other states have, in conjunction with their
utilities and/or through separate research efforts, developed
advanced energy audit techniques which can be easily used out on
the building site. Our state is now looking for appropriate
models as well, and the results of DOE-sponsored field tests of
measures suitable for warm-climate problems are eagerly awaited.
In cold-weather states in particular, there has been much
experimentation with heating system improvements by our agencies,
generally employing licensed private subcontractors. In those
regions the audits show the value of heating system work outweighs
several other measures of the kind their programs used to use,
like infiltration improvements and storm windows. We are looking
forward to the forthcoming DOE summary of available studies on
these new measures as requested by the Senate Appropriations
Committee.
The net result is that high energy conservation consumption
states can achieve well over 30% energy savings in the program and
regions like my own can achieve around twenty percent. All of us
can meet rigorous tests of prompt rates of return on investment or
"payback." I am submitting for your Record sample before and
after bills for some of our clients which show substantial
savings.
In our State, we do not work on heating systems in spite of
their inefficiency, because our State and local programs are so
small compared to those in cold weather states. We invest an
average of $1100 per home, not the $1600 allowed.
75
page three
We need to be sure we can complete some reasonable share of
our year-long waiting list but, given the deplorable condition of
our housing stock, that doesn't permit mechanical work.
Further, no measures related to cooling efficiency are
allowable under DOE rules. The Oklahoma field tests of cooling
measures funded by DOE should tell the Department some items that
must be permitted to allow localized solutions to our summer
energy problems and our staggering electric bills.
Your legislation brings the program rules in line with the
evolutionary growth in the state and local programs. It removes
the impediments federal law and regulations pose to the
technological advances achieved locally. For example, the current
law requirement that 40% of expenditures be for materials is
replaced with a better guarantee of quality investments in the
bill.
The original purpose of the existing requirement was to
ensure that each home received some high quality energy invest-
ment. The formulation was conceived to be a way to protect
against a worker spending long hours on repairs and low cost
materials and then departing without assuring a permanent change
in energy efficiency.
Since weatherization today depends on an audit-driven list of
measures and in many states includes specialized work on heating
systems by licensed (and well-paid) contractors as a top priority.
The revised and more sophisticated audits protect against the
possibility of inappropriate investments. The 60/40 requirement
means weatherizers are sometimes choosing less efficient invest-
ments in more expensive items to meet their arbitrary 40% quota.
Similarly, the $1600 average limit, which was a compromise to
allow reasonable expenditure levels while maintaining production,
is too low to permit major heating system work or replacement
where necessary. Most states doing this work supplement DOE/WAP
with LIHEAP funding. However, this ad hoc solution may not be
available much longer.
The legislation permits DOE to waive the requirement for a
state for very limited purposes, including major heating and
cooling system work or replacement, and second, to provide an
inflation escalator for the $1600. We will propose a short list
of other eligible heating system measures to you shortly. Again
we do not support unlimited waivers. Strict criteria should be in
place both to assure Congress that the expenditures are necessary
and also for the purposes of maximizing production of units
consistent with energy savings.
76
page four
We also hope you will consider amending S 247 to include
provisions:
1. To permit use of best available cooling technology.
2. To ease administrative funding limitations or small
agencies as pointed out by Oak Ridge National Laboratory
in its program review.
3. To require funds to DOE to promote the sharing of new
management and technical tools among the states.
4. To require more protection of tenants we have
weatherized as proposed by the National Consumer Law
Center.
In conclusion, Mr. Chairman, as you are well aware, the poor
are still profoundly affected by the high cost of energy and the
high costs of staying in their homes and apartments. They
typically spend over 11% of their incomes on home energy costs -
compared to between 3 and 4% for the average household. This is a
terrible burden when added to the high cost of renting or
maintaining a home and acquiring the basic necessitites of life.
By cutting 20 or 30% off that energy bill, we give our low income
client between $200 and $300 back in Oklahoma, which approximates
an entire months income for some of them.
The nation has moved on to new concerns since the energy
crisis of the early 80 's was in the headlines. Drug wars, carbon
dioxide and homeless families have the headlines. But for the
poor, energy costs are a larger part of their budget problems and
lightening the energy burden is an important part of the solution
of our housing, environmental and quality of life problems.
Thank you for hearing our views.
77
HARDWARE
IICTA WHint-POOL
APP4.IANCU
PLUMBINO
LUMBER
BUILDINO
SUPPLIU
TEXACO SERVICE
STATION
Tints
IHC TRUCKS
Pickup*
Scouts
LP GAS
Tanks
FEED ANO SEED
CAFE
U. C. BASTCR
UWMKll
M. C. EASTER COMPANY
SINCE I930
PHONI aU-37U
Box 33S
BOKCHITO. OKLA. 74726
April 27, 1989
The dates and totals below represent the purchases of oropane made
by Raymond Renick of Boswell, Oklahoma, before and after his house
was weatherized by the Little Dixie Community Action Aqency of Huqo
Oklahoma:
BEFORE
AFTER
4-3-85
S43.76
5-28-86
';3n.9o
4-20-85
39.17
6-24-86
33.48
5-9-85
30.35
7-8-86
33.48
5-28-85
36.72
7-14-86
23.38
6-22-85
30.28
7-15-86
30.81
7-3-85
33.66
8-8-86
30.90
7-20-85
35.02
9-3-86
30.90
7-30-G5
33.62
9-17-86
30.90
8-8-85
32.76
10-3-86
30.00
8-23-85
43,45
11-5-86
75.70
9-11-85
28.74
11-13-86
50.47
9-11-85
32.76
12-23-86
78.80
9-26-85
35.85
1-17-87
78.80
11-19-85
35.02
3-4-87
75.71
12-10-85
105.06
3-1^-87
15.51
12-19-85
108.15
3-25-87
30.90
l-ni-86
36.05
,'^681.54
1-21-86
72.10
2-01-86
70.04
■^882. 56
Savinns: <;201.02
W D CURTIS
Manog«f
78
6
I
Lone Star Gas Company
n3E Jackson Sl • Hugo, Oklohomo 74743
James Burton
906 W. Oklahoma
142640108604
DATE
CONSUMPTION
NET BILLING
7-21-86
8-19-86
9-18-86
10-17-86
11-17-86
12-18-86
1-21-87
2-19-87
3-20-87
4-21-87
5-20-87
6-19-87
7-21-J2_
9-18-87
10-19-87
11-17-87
12-18-87
1-21-88
2-19-88
3-21-88
4-20-88
5-19-88
6-20-88
7-20-88
1.0
1.3
1.7
3.7
8.2
12.4
10.1
8.1
4.3
2.0
1.9
1.1
8.89
8.06"
8.78
10.32
13.97
24.58
30.99
34.17
26.88
29.67
11.78
10.36
__8^67
7.33
8.72
9.15
18.18
40.85
55.93
50.45
39.80
23.06
13.86
12.48
9.19
Weather ization 7/27/87
Pr e-wea ther iza t ion -- 12 months
39.3 mcf total $218.23
plus 6 ricks of wood at $35 210.00
total $428.23
Post-wea ther i zat ion -- 12 months
55,8 mcf total $289.00
No Wood
79
PUBLIC SERVICE COMPANY OF OKLAHOMA
A CENTRAL AND SOUTH WEST COMPANY
April 27, 1989
The infornation below represents the electricity used by Ila Mae Jones of
Boswell, Oklahoma, twelve months before and twelve months after her house
was weatherized by the Little Dixie Community Action Aqency of Hugo, Oklahoma;
Service Dates
Before:
KWTS
Amount
Service Dates
AFTER
KWTS
1,765
Amount
11-20-86
1,232
$63.65
12-22-87
$79.62
12-23-86
2,058
94. 9Q
1-26-88
2,200
94.69
1-26-87
2,450
106.18
2-24-88
1,165
61.02
2-24-87
1.704
78.63
3-24-88
1,330
65.27
3-25-87
1,312
65.24
4-21-88
1,109
59.85
4-23-87
1,432
69.49
5-23-88
1,236
63.44
5-21-87
1,333
66.60
6-22-88
1,438
109.13
6-23-87
1,835
144.48
7-25-88
1,991
150.12
7-24-87
2,338
181.41
8-23-88
1.775
133.76
8-24-87
2,716
210.70
1-22-88
1,532
113.88
9-23-87
1,519
114.41
10-21-88
1,079
52.59
10-22-87
955
52.47
11-21-88
1,189
55.28
11-19-87
1,027
53.72
$1,301.97
$1,038.65
CENTRAL AND SOUTH WEST SYSTEM
Central Power and Lrght Public Service Company ol Oklahoma Southweslern Electric Power West Texas Utilities
Corpus C^f'ST' Texas Tu'sa Oklahoma Shrevepon Louisiana AO'iene Texas
80
App'icar
POiN"'S
• Aoc6:o'Ove' IIOP^^'
2 Har.c.ca:.oec- . ... (^0'
3 inccm? 0 ■ ag^c (12)
50 - 7C- (8)
75 - 99 = : (5) a
100 - 125?= (3) ■
r - (4) ^
- FueiT.,pe- Electricity
Propane
Wood
(3)
(2)
Natural Gas '1'
5 Da;eof App;icatior.. More than 3 Years Old W
2 to 3 years Old (3)
1 to 2 Years Old (2)
Less than 1 Year OIci (1)
A. Sub-Total
Pvvg'iir.c \'eeds
1. Ce'.ing. Insulatipn (5)
2 Wa:'5; Replace sheet rock 0)
Replace, tighten caulk O
3 FIcors Repair flooring C)
£ Door; Vi^eaiherstripping/caulk (2) •
Install threshold/doorsweep C'
JaTib/sash/sill replace or repair (i).
Repair/replace exterior door (1)
5 Windows. Weatherstrip/caulk (2)
Window repair/replacement (2)
Storm Windows '■^'
6 Roof. Rcof Repairs '2'
■J ijnderpinnmq. Install underpinning/skinmg (3)
B. Sub-Total
PAZ Discretion
-■ the aoolicar,; has special problems which warrant extra consideration the PAC may award up
to four (-:) additional points Such problems might include: emergency situations, small children
■jnd-jr age six, unusual medical expenses, etc ('*'
I- discretionary pomts are awarded, please state reason:
'oial Points From A, 3 and C
PAC Review Signature Date
dicapped person' means ar.y individual (1) who is a handicapped ind
Illation Act o< 1973, (2) who is under a disability as defined inSemoi
, •, Actor :n Section 102(7) of the Developmental Disabilities Services
rec-'i.rg oenefits under Chapter 1 1 or 1 5 of Title 38, United States Code.
■ Hi-.dicapped person' means ar.y individual (1) who is a handicapped individual as defineo m Section 7(5) of the
.;r.£;ilitation Act o< 1973, (2) who is under a disability as defined in Semon 1614(1)(3)(A) or 223(d)(1) of the Social
l:I'v, Act or :n Section 102(7) of the Developmental Disabilities Services and Facilities Construction Act, or (3) who
3:3 ksp 12/87
81
February, 1989
introduction'
This report was prepared by the National Consumer Law Center under a grant
from the U.S. Department of Energy and is the second of four quarterly reports to be
provided under this grant.^
This report incorporates information collected by NCLC in telephone surveys
conducted from late-January through February, 1989. As with the previous report, the
information we collected on the status and state uses of both Exxon and Stripper Well
funds is contained in a series of tables and in the narrative summary section of the
report.
Under the terms of the DOE grant, each of the quarterly reports tracks final
state decisions allocating use of these funds. The terms "allocated" and "designated" are
used interchangeably throughout the document to mean that final state decisions have
been made regarding these funds. Tracking state allocations about these funds is the
only practical way for us to provide an overview of the actual status of state processes or
decisions which have occurred with regard to this money.
Focusing only on state expenditures, or even obligations, of these funds docs aoi
provide a true picture of state activity in this area. The same is true with regard to
submissions to or authorizations by the U.S. Department of Energy (DOE). Most states
have adopted multi-year allocation plans; however, since DOE is only required to
approve expenditures on a year to year basis (and states need only submit planned
expenditures 30 days before they are made), the data that DOE officially receives from
a state may only reflect partial allocation plans. Where available, however, the status of
DOE review of a state's allocation is noted in the narrative summary section.
By focusing on final state decisions, or allocations, NCLC's reports give
recognition to the subsequent activity which occurs following a final state allocation of
these oil overcharge funds. In most states, for example, after a Governor and/or state
legislature adopt a multi-year plan which designates specific amount of funds to certain
programs, it is then ,up to the responsible state agencies to choose (through the Request
For Proposal process, or otherwise) and fund individual projects within those programs.
The likelihood that most states will be willing to revisit their decision-making with
regard to these funds is not high, given the practical considerations that are a part of
that process. For all intents and purposes, then, this allocated money is "committed,"
even if it may not be obligated under a contract.
1. This report was prepared by Helen Gonzales, Staff Attorney, with the assistance of
Ralph DiPictro, who served as law clerk in the Center's Washington, D.C. Office during
the survey period.
2. Grant No. DE-FG02-88CH10381 was awarded to NCLC on August 15, 1988, at the
request of the Congress, in PL 100-202 (12/87).
82
11. STATE USES OF OIL OVERCHARGE FUNDS-
STATUS REPORT
As indicated at the outset, this is the second of four quarterly reports to be
prepared for DOE on the status of state uses of the Exxon and Stripper Well oil
overcharge funds. The current report reflects state information gathered by telephone
from late-January through February, 1989.
Summary Findings
Between the time of our last report and the beginning of the surveying for this
report (in late-January), the states received another $12.9 million of Stripper Well funds.
Wnilc only a small amount of money, this distribution by the Department of Energy
slightly changed the amount, and percentage, allocations of these funds.
Our survey revealed that of the total $3.05 billion of Exxon and Stripper Well
funds that the states had received from 1^86 through January, 1989 (when our survey
began), 95.4%, or $2.91 billion, had been allocated. This figure represents an additional
allocation of only 2.2%, or another of $80,000, from the amount allocated during the
survey period of our first report (i.e.. last fall). Further, we found that 22 states had
already allocated 80% - 100% of these combined Exxon and Stripper Weil funds (down
by 8 states since our last report, due to the additional allocation of Stripper Well funds
and to revisions made to the allocation amounts, by the states). Specifically, 12 states
had made final decisions, or allocations, regarding all of both their Exxon and their 1986
through January, 1989, Stripper Well funds. An additional 15 states had 10% or less of
their total funds left unallocated, while another 7 states had only 11-20% of their total
money for which final decisions had not yet been made.
Allocation of Exxon Funds. In 1986, the states and U.S. Territories received $2.1
billion from the oil overcharge judgment against the Exxon Corporation; the state's
share of this amount was $2,057 billion. According to our recent survey, 99% (or $2,044
billion) of the states' share of this money had been allocated.
Furthermore, thirty-nine (39) states had allocated all, or virtually all (95%-99%),
of their Exxon money, while another 5 states had only 16-20% of these funds still
unallocated. As we pointed out in our first report, this figure is significant because since
the use of these funds is limited to only five programs, with the two larger programs
serving low-income consumers, states have been more willing to use this money, rather
than Stripper Well money, for low-income purposes; in fact, one-half of the allocated
Exxon funds (or $1,012 billion) had been designated for LIHEAP or WAP. The division
of funds between LIHEAP and WAP was $483.65 million (or 24%) for LIHEAP and
$529.02 million (or 26%) for WAP. (The percentage share for the two programs has
basically remained the same, since the first report.) It should be noted that a large
amount of the funds designated for LIHEAP were intended to be used for
wcatherization.
-7-
83
All but one state had allocated roughly 50% (48% or more) or these Exxon Tunds.
Wc found that 12 states had not used any funds for LIHEAP; 8 of these states had
already allocated 100% of their Exxon money. Five states had not designated any
money for WAP; 3 of these states had allocated 100% of their funds. One state had qqi
allocated any funds for either LIHEAP or WAP (it had allocated 24% of its Exxon
funds), while another state (which had allocated 59% of its funds) had allocated less
than 1% to these programs. Eight (8) states had allocated 25% or less of their funds for
LIHEAP or WAP. Some states had also designated some of their SECP or EES money
for low-income outreach and other uses aimed at low income households, for a total of
at least $13.52 million (see Table 3 for list of which states have made these identifiable
low-income uses).
Use of Stripper Well Funds. From 1986 through January, 1989, the states
received a total of $990.36 million under the terms of the Stripper Well agreement. Our
survey revealed that 88% (or $868.03 million) had been allocated. All but one state had
made some Stripper Well allocations and only six states had not allocated roughly 50%
of these funds. We found that 22 states had allocated all or virtually all (95-99%) of
their funds. Specifically, thirteen (13) states had allocated all of their funds, while
another 11 states had allocated 95% or more of this money. Another nine (9) states
had only 6% to 10% of these funds unallocated, while a further eight (8) states had only
11-20% of funds still left to designate.
We found that states had used about 28% of the $868.03 million in Stripper Well
money they had allocated for exclusively low-income programs; these programs include
LIHEAP and WAP, as well as other low-income projects. Of the $243.42 million
allocated for low-income programs, LIHEAP had received $106.73 million (or 12%)
while WAP had received $57.36 million (or 7%). The other $79.33 million (or 9%)
designated for low-income uses were being spent through programs other than LIHEAP
or WAP. Excluding the one state which has not yet made any allocations, 27 states had
not allocatetd any funds for LIHEAP and 33 had not allocated any funds for WAP.
Four (4) states had not allocated any funds for LIHEAP, WAP, or any other low-income
uses, although one of these states (NC) had allocated 100% of the funds they had so far
allocated for primarily, but not exclusively, low-income uses (so its allocation is shown in
the "Other" category).
84
EXXON: SUMMARY ALLOCATIONS
[NUMBERS IN MILLIONS]
TABLE 1
FEBRUARY, iy»»
TOTAL
AMOUNT
OTHER
STATE
RECEIVED
ALLOCATED
LIBEAP
WAP
SECP
EES
SECP/EES
ICP
USES
AL
$32.19
$32.38
$5.50
$5.00
S5.25
S3. 25
$12.00
SI. 38
AK
S8.27
SB. 70
S6.29
SI. 49
SO. 90
AZ
$21.56
$14.08
SI. 50
S4.00
S6.15
$0.25
SI. 50
$0.68
AR
S25.95
S29.31
$4.80
$2.50
$2.01
$20.00
CA
$194.72
$214.78
$66.36
$61.33
$79.80
S5.29
S2.00
CO
S22.71
$25.33
$4.71
$20.61
CT
$34.90
$37.00
$29.60
SI. 75
$4.52
SI. 20
DE
$9.94
$8.68
$0.19
$3.00
SO. 10
SO. 04
$5.35
DC
$4.67
$4.67
S2.07
SO. 90
SI. 00
$0.30
$0.40
FL
$98.11
$57.93
$0.20
$16.10
$1.90
$39.70
GA
$46.62
$55.60
$21.00
S14.70
SI. 50
S2.40
$16.00
HI
$14.48
$14.50
S4.00
$4.62
SI. 63
$4.25
ID
$8.69
S8.95
$3.28
$3.87
$1.80
IL
$96.10
$115.00
$40.00
$62.55
$12.45
IN
S51.63
$54.08
$20.90
S13.70
$8.81
$10.27
$0.40
lA
$27.42
$24.13
S6.17
$12.61
$5.35
KS
$23.96
$19.13
$10.84
SI. 00
$2.49
$0.09
$4.72
KY
$27.44
$13.11
S4.62
S8.49
LA
$51.54
$51.54
$11.54
SIO.OO
S30.00
HE
$15.09
S16.50
SO. 20
$7.60
$6.70
$1.00
SI. 00
MD
$36.41
$40.35
S4.30
$30.00
S2.ll
SO. 94
$3.00
MA
S70.34
$72.50
S9.85
$42.15
$20.50
MI
$70.99
$79.30
S47.60
S13.00
$18.67
MN
$36.07
$36.45
S5.50
S5.50
$14.30
$11.15
MS
$28.38
$29.95
S2.37
S7.61
S5.10
SO. 25
$2.12
$12.50
MO
$41.52
$41.49
S3. 86
S15.25
$11.29
SO. 50
$10.59
MT
$9.58
$10.55
$4.87
$2.90
SO. 23
SO. 90
$1.65
NE
$15.50
$3.67
S2.49
$1.18
NV
$8.77
$7.53
S3. 27
$2.51
SO. 51
SI. 02
$0.22
NH
$9.80
$11.43
$0.75
$1.17
$5.16
S3. 85
SO. 50
NJ
$75.43
$67.50
S43.50
$4.00
$20.00
NH
$13.69
$15.92
$3.09
S3. 61
$3.97
SI. 03
S3. 74
NY
$159.87
$173.50
S17.00
$39.40
$72.00
S14.00
S31.10
NC
$47.03
$27.54
S6.64
S7.40
S8.50
S5.00
ND
$7.72
$8.30
$2.80
$1.30
$0.40
SO. 10
SO. 90
S2.70
OH
$79.74
$78.00
S12.00
$50.30
S12.40
S3. 30
OK
$26.23
$30.10
$6.54
$5.31
$12.98
S4.00
OR
$20.72
S22.31
S3. 18
S10.71
$5.34
50.03
$3.05
PA
$96.80
$106.00
$66.10
$31.30
$8.60
RI
$8.00
S8.05
SO. 55
SI. 34
$3.31
$1.34
SI. 50
SC
$25.19
$29.30
S7.50
$8.60
S4.50
$4.40
S4.30
SD
$7.50
$8.77
SI. 56
S5.74
$0.41
SI. 00
$0.06
TN
$34.60
S35.50
$3.50
S18.00
S4.00
$10.00
TX
$157.19
S153.40
S2.00
$7.00
$130.10
$9.00
S8.00
UT
$12.45
S13.20
S5.50
S5.50
$0.45
SI. 75
VT
$5.00
S5.66
SO. 36
S3. 00
S2.30
VA
$53.38
$39.10
S14.10
S15.20
$6.40
SO. 42
S3. 00
VA
$32.12
$41.59
SI. 00
$15.13
$16.38
SO. 77
S6.44
SI. 87
WV
$12.90
$15.45
$7.15
S4.53
S3. 03
$0.27
SO. 47
WI
S36.97
$17.70
$17.70
WY
$8.87
S9.00
S2.00
S5.00
S2.00
TOTALS
$2,064.75
$2,044.51
$483.65
S529.02
S480.77
$66.67
$194.04
$280.52
$10.69
I
85
Exxon FUNDS: LOU INCOME OSES
[NUNBERS IN KILLIONS]
TtBLE 2
FEBRUARY, 1989
PCT OF
LIBEAP
LIBEAP
TOTAL
ANOUNT
RECD. S
LIBEAP
DOE
VAP
( VAP
( lAP
STATE
RECD.
ALLOC.
ALLOC.
LIHEAP
PCI.
lAP
PCT.
AKT.
PCT.
tl
S3M9
$32.38
ion
$5.50
17t
$5.00
15t
$10.50
32t
n
58.2]
S8.70
105»
Ot
$6.29
72t
$6.29
72t
n
S21.56
$14.08
65«
$1.50
lit
$4.00
28t
55.50
39t
it
S25.95
$29.31
113*
54.80
I6t
$2.50
9t
$7.30
2St
Ci
$191.72
$214.78
110«
566.36
3U
Ot
$66.36
31t
CO
S22.71
$25.33
112«
Ot
$4.71
19t
$4.71
19t
CI
$34.90
$37.00
106«
$29.60
80t
Ot
$29.60
sot
DE
S9.94
$8.68
87*
$0.19
2t
$3.00
35t
$3.19
37*
DC
S(.60
$4.67
102t
S2.07
44t
$0.90
19t
$2.97
64t
EL
$98.11
$57.93
59*
Ot
$0.20
Ot
$0.20
Ot
Gi
$<6.62
$55.60
119»
$21.00
38t
514.70
26t
535.70
64t
EI
$14.48
$14.50
loot
Ot
54.00
2St
54.00
28t
ID
$8.89
$8.95
103«
Ot
53.28
37t
53.28
37t
IL
$96.10
$115.00
not
$40.00
35t
562.55
54t
$102.55
89t
IN
$51.63
$54.08
105«
$20.90
39t
S13.70
25t
$34.60
64t
U
$27.42
$24.13
88t
Ot
$6.17
26t
$6.17
26t
XS
$23.96
$19.13
sot
510.84
57t
$1.00
5t
5n.84
62t
lY
$27.44
$13.11
48t
$4.62
35t
$8.49
65t
513.11
loot
Li
$51.54
$51.54
loot
Ot
S11.54
22t
511.54
22t
DE
$15.09
S16.50
109t
SO. 20
It
$7.60
46t
57.80
47t
ID
$36.41
S40.35
lilt
$4.30
lit
530.00
74t
534.30
S5t
Ki
$70.34
$72.50
103t
S9.85
14t
$42.15
58t
552.00
72t
II
$70.99
$79.30
112t
$47.60
60t
$13.00
16t
560.60
76t
UN
$36.07
$36.45
lOlt
$5.50
15t
$5.50
15t
511.00
30t
KS
$28.38
$29.95
106t
$2.37
8t
$7.61
25t
59.98
33t
HO
$41.52
$41.49
loot
$3.S6
9t
515.25
37t
$19.11
46t
IT
$9.58
$10.55
not
Ot
54.87
46t
$4.87
46t
IE
$15.50
S3. 67
24t
Ot
Ot
$0.00
Ot
17
$8.77
$7.53
86t
$3.27
43t
52.51
33t
$5.78
77t
IB
S9.J0
511.43
int
$0.75
7t
51.17
lot
51.92
nt
RJ
$75.43
$67.50
89t
$43.50
64t
Ot
543.50
64t
NH
$13.69
$15.92
116t
S3. 09
19t
53.61
23t
56.70
42t
NT
$159.87
$173.50
109t
$17.00
lot
539.40
23t
556.40
33t
IC
$47.03
$27.54
59t
56.64
24t
57.40
27t
514.04
51t
ID
$7.72
$8.30
108t
52.80
34t
51.30
Ut
$4.10
49t
OH
$79.74
$78.00
98t
512.00
15t
$50.30
64t
$62.30
80t
OX
$26.23
$30.10
list
$6.54
22t
$5.31
ISt
$11.85
39t
OR
$20.72
S22.31
lost
$3.18
14t
S10.71
48t
$13.89
62t
Pi
$96.80
$106.00
not
$66.10
6]t
531.30
}0t
$97.40
92t
RI
$8.00
$8.05
lOlt
50.55
7t
51.34
17t
$1.89
23t
SC
S25.19
$29.30
116t
57.50
26t
$8.60
29t
516.10
55X
SD
S7.50
$8.77
int
51.56
Ut
ot
SI. 56
18t
TN
$34.60
$35.50
103t
53.50
lot
$18.00
51t
$21.50
61t
TX
$157.19
5153.40
9lt
52.00
It
57.00
5t
$9.00
6t
01
$12.45
S13.20
106t
Ot
55.50
42t
$5.50
42t
VT
$5.00
55.66
mt
50.36
6t
53.00
53t
$3.36
59t
Vi
$53.38
539.10
73t
514.10
36t
515.20
39t
$29.30
75t
n
S32.12
$41.59
129t
51.00
2t
515.13
36t
516.13
39t
IV
$12.90
515.45
not
S7.15
46t
54.53
25t
511.68
76t
II
S36.97
$17.70
48t
Ot
517.70
loot
$17.70
loot
n
S8.87
$9.00
lOlt
n
$2.00
22t
52.00
22t
TOTilS
$2,064.6!
$2,044.51
99t
$483.65
24t
$529.02
26t
51,012.67
50t
86
EUOI FUIIDS: OTEEK Kli
IIOHBEIIS II miiioisl
IIBLS 3
FEiKHARY, in;
mn
TOTIL ANODKT
RECEIVED kllOCtTED
SECP
EES SECP/EES ICP
OTBEP
USES
ROTES
Al
AE
AZ
A!
Ct
CO
CI
DE
K
Fl
GA
EI
ID
II
II
lA
IS
H
It
IE
ID
lA
III
n
IS
10
I!
IE
IV
IB
IJ
n
I!
ic
ID
OB
OK
OK
PA
JI
SC
SD
!«
II
DI
VT
VA
lA
IV
II
II
S32.19
S8.27
S21.56
S25.95
S194.72
$22.71
$34.90
S9.9t
S4.60
$98.11
$46.62
S14.48
SS.69
$96.10
$51.63
$27.42
$23.96
$27.44
$51.54
$15.09
$36.41
$70.34
S70.99
$36.07
$21.38
$41.52
S9.58
S15.50
S8.77
$9.80
$75.43
$13.69
$159.87
$47.03
$7.72
$79.74
$26.23
$20.72
S96.80
$8.00
S25.19
$7.50
$34.60
S157.19
$12.45
55.00
S53.3!
S32.12
$12.90
$36.97
$8.87
$32.38
$8.70
$14.08
S29.31
$214.78
$25.33
$37.00
S8.68
$4.67
$57.93
$55.60
$14.50
$8.95
S115.00
$54.08
$24.13
$19.13
S13.ll
S51.54
S16.50
$40.35
$72.50
$79.30
$36.45
$29.95
S«1.49
$10.55
S3. 67
$7.53
$11.43
$67.50
$15.92
$173.50
$27.54
S8.30
$78.00
$30.10
S22.31
$106.00
S8.05
$29.30
$8.77
S35.50
$153.40
sn.2o
$5.66
$39.10
S41.59
$15.45
$17.70
$9,110
S5.25 $3.25
S6.15
$2.01
$61.33
$1.75
SO.IO
SI. 00
$16.10
SI. 50
S4.62
$3.87
$12.45
$8.81
$12.61
$2.49
S6.70
$2.11
$20.50
S14.30
S5.10
S11.29
$2.90
S2.49
$0.51
S5.16
S4.00
$3.97
$72.00
SO. 25
S3. 31
$4.50
S5.74
$4.00
$130.10
$5.50
$6.40
S16.3B
S3. 03
S5.00
$1.49
$79.80
$20.61
S4.5J
$0.04
$0.30
$1.90
$2.40
SI. 63
S10.27
S5.35
$0.09
$10.00
SI. 00
$0.94
$12.00
$0.90
$1.50
$20.00
$5.29
$1.20
$5.35
S0.40
$39.70
SU.OO
$4.25
$1.80
SO. 40
S4.72
$30.00
$1.00
S3. 00
$0.25
SO. 50
$0.23
SI. 18
$1.02
$3.85
$1.03
$14.00
$18.67
$11.15
S2.12
$0.40 SO.IO
S5.34 SO. 03
S8.50
$0.90
$12.40
$12.98
S8.60
SI. 34
$4.40
$0.41
$9.00
$0.45
$0.42
SO. 77
$0.27
S12.50
$10.59
$0.90
$0.22
$0.50
$20.00
$3.74
$31.10
$5.00
S2.70
$3.30
$4.00
S2.30
$1.38
Soie SECP funds for priiaril; loa-iDcoie use
SO. 68 $680,000 to liiajo latioo, for leatberlzatioii
$2.00 Other S for bousing rebab. for fariirkrs.elderli, handicapped
About $1.2 lillion of EES funds for loi-incoie projects
SECP includes $1.25 lillion for loa-incoie uses
$1.50
$4.30
SI. 00
$10.00
S8.00
SI. 75
$3.00
$6.44
SO. 47
$2.00
SECP includes $315,000 for loi-incoie uses
$900,000 of SECP/EES $ for loa-Co-ioderate iocoie use
$7.5 lillion of SECP $ for loi-to-ioderate incoie uses
$50,000 of SECP/EES S for boieless energ; conservation
$1.65 teser<ed for IIBEAF and/or lAP
$450,000 EES $ for energ; iiproieints in public bousing
S12 lillion of EES S for loa-to-ioderate inc. uses
SECP/EES: S3. 7 lillion for lo> 6 lodeiate inc. uses
$3.05 S3.05I for cutbacks in LIEBAP/IAP;$820,000 SECP for lo»-inc.
$0.06 S.06 for tribal governient LIBEAP
$200,000 of SECP/EES funds for lo«-incoie use
SI. 87 $1.8ii!/$1.87|--lo«-inc:S2.8!i of SECP S =lo»-iod. inc. uses
TOTALS: $2,064.68 $2,044.51 $480.77 $66.67 $194.04 $280.52 $10.69
87
STRIPPER WELL: SUMMARY ALLOCATjr^NS
[NUMBERS IN MILLIONS]
STATE
AMOUNT
RECEIVED
3/86-1/89
AMOUNT
ALLOCATED
TABLE 4
LIHEAP
DOE
WAP
FEBRUARY, 1989
OTHER
LOW-INC
OTHER
PROGRAMS
AL
AK
AZ
AR
CA
CO
CT
DE
DC
FL
GA
HI
ID
IL
IN
lA
KS
KY
LA
HE
MD
MA
MI
MN
MS
MO
MT
NE
NV
NB
NJ
NM
NY
NC
ND
OH
OK
OR
PA
RI
SC
SD
TN
TX
UT
VT
VA
WA
WV
WI
WY
$15.44
S3. 89
S10.32
$12.81
$92.13
$10.82
$17.09
$4.78
S2.40
$46.50
$22.41
$6.91
$4.13
$46.22
$24.79
$13.11
$11.28
$12.90
$23.94
$7.40
$18.02
$34.45
$34.29
$17.46
$13.74
$19.87
$4.55
$7.42
$4.08
$4.69
$37.15
$6.59
S77.93
$22.59
$3.69
$37.82
$12.43
$9.97
$46.86
$3.99
$12.00
$3.60
S16.28
$74.25
$5.94
$2.41
$25.83
S15.37
$6.01
$17.71
$4.10
$15.29
$0.00
$9.93
$12.53
$90.94
$10.72
$18.35
$4.15
$2.20
$33.85
$22.45
$1.00
$3.82
$46.05
$22.64
$11.03
$2.87
S4.76
$25.09
$7.28
$19.93
$28.00
$42.36
$16.67
$12.70
$16.76
$3.68
$0.75
S5.18
$4.45
$35.00
S7.50
$70.00
S21.00
S3. 64
$26.00
$12.67
$11.31
S21.50
$3.62
S10.60
S3. 85
S5.00
$70.50
S5.00
SI. 56
S20.60
S15.98
S5.65
$17.50
$4.12
S2.27
$2.08
$15.50
$0.06
$4.25
$11.50
$2.28
$3.18
$1.60
$7.34
$10.00
$14.60
$1.34
$2.08
SO. 35
$1.00
$0.60
$14.40
$2.20
SI. 00
$7.00
SI. 00
SI. 10
$2.92
S2.01
SI. 00
$13.25
$4.49
S6.70
S8.30
$1.25
S2.86
$0.65
$0.98
SO. 10
S7.60
$0.02
$1.74
$1.00
SI. 35
SI. 14
S3. 80
SI. 68
$4.92
$0.68
S3. 75
SO. 16
S3. 16
$0.35
SO. 11
SO. 58
S5.02
$1.07
S2.57
SI. 05
SO. 08
$0.44
S6.00
S10.50
$2.20
$0.60
SI. 00
SO. 12
$5.00
$20.00
SI. 88
50.25
S2.10
$0.26
S13.02
S6.13
$7.53
$116.00
$7.03
$13.42
$3.15
$1.46
$20.60
$14.45
$1.00
$3.66
$34.55
$17.20
$10.68
S2.76
SI. 00
$20.07
S4.61
S5.53
S18.00
$21.30
$8.37
$10.11
$11.82
S2.63
SO. 10
S4.75
$3.03
$35.00
S7.40
$56.40
S21.00
S4.50
$15.50
S9.85
58.97
$7.10
$1.42
$8.60
$3.56
$4.00
$58.50
S5.00
SO. 21
SO. 60
S11.05
S5.40
$15.40
$2.76
TOTALS:
S990.36
$868.03
S106.73
$57.36
$79.33
$666.18
88
STRIPPER HELL
: LOS IICGliE USES
TABLE 5
FEBRUARY
1989
IIUKBERS IH HILLIORS]
—
PCT. OP
AHODIT
RECD.
OTBER
TOTAL
TOTAL
RECEIVED
ANT.
PDIDS
LIBEAP
DOE
lAP
CTBER
LOJ-IHC
LOI-IHC.
L08-IIC
STATE
3/86-1/89
ALLOC.
ALLOC.
LIBEAP
PCT.
lAP
PCT.
LOH-IKC
PERCEIT
AHT.
PERCENT
iL
S15.4i
$15.29
99*
$2.27
15*
0*
0*
S2.27
15*
n
$3.89
SO. 00
0«
0*
0*
0*
SO. 00
0*
ii
$10.32
$9.93
96X
0*
0*
53.80
38*
$3.80
38*
n
sn.ei
$12.53
98t
S2.08
17*
$2.92
23*
0*
$5.00
40*
CA
$92.13
$90.94
991
$15.50
17*
0*
0*
$15.50
17*
CO
$10.82
$10.72
99*
0*
$2.01
19*
SI. 68
16*
S3. 69
34*
CT
$17.09
$18.35
107«
0*
0*
$4.92
27*
S4.92
27*
DE
$1.78
$4.15
87«
0*
$1.00
24*
0*
$1.00
24*
DC
$2.<0
$2.20
92«
SO. 06
3*
0*
SO. 68
31*
$0.74
34*
PL
$46.50
$33.85
73«
0*
$13.25
39*
0*
$13.25
39*
GA
S22.41
$22.45
loot
54.25
19*
0*
S3. 75
n*
$8.00
36*
EI
S6.91
$1.00
14*
0*
0*
0»
SO. 00
0*
ID
$4.13
$3.82
92*
0*
0*
SO. 16
4*
50.16
4*
IL
$46.22
$46.05
100*
$11.50
25*
0*
0*
$11.50
25*
IB
$24.79
S22.64
91*
$2.28
10*
0*
$3.16
14*
S5.44
24*
lA
$13.11
$11.03
84*
0*
0*
$0.35
3*
50.35
3*
IS
$11.28
$2.87
25*
0*
■ 0*
$0.11
4*
50.11
4*
11
$12.90
S4.76
37*
$3.18
67*
0*
$0.58
12*
53.76
79*
LA
$23.94
$25.09
105*
0*
0*
S5.02
20*
S5.02
20*
HE
$7.40
$7.28
98*
$1.60
22*
0*
$1.07
15*
$2.67
37*
KD
$18.02
$19.93
HI*
S7.34
37*
$4.49
23*
52.57
13*
S14.40
72*
DA
$34.45
$28.00
81*
$10.00
36*
0*
0*
510.00
36*
HI
$34.29
$42.36
124*
$14.60
34*
$6.70
16*
0*
521.30
50*
Kl
$17.46
$16.67
95*
0*
$8.30
50*
0*
S8.30
50*
US
$13.74
$12.70
92*
$1.34
11*
51.25
10*
0*
S2.59
20*
HO
$19.87
$16.76
84*
$2.08
12*
52.86
17*
0*
$4.94
29*
RT
S4.55
$3,68
81*
0*
0*
SI. 05
29*
51.05
39*
IE
57.42
$0.75
10*
0*
50.65
87*
0*
50.65
87*
IV
$4.08
$5.18
127*
SO. 35
7*
0*
$0.08
2*
50.43
8*
no
j«.i>j
54.45
'.y.
;■.
50.98
".'.
** ;
• ,•■
::.«:
•,^'
IJ
S37.U
S35.00
94*
ct
p^
0*
50.00
0*
IH
$6.59
$7.50
114*
0*
SO. 10
It
0*
SO. 10
1*
IT
S77.93
$70.00
90*
0*
57.60
11*
56.00
9*
513.60
19*
■C
$22.59
S21.00
93*
0*
0*
0*
SO. 00
0*
ID
$3.69
$3.64
99*
SI. 00
27*
0*
0*
SI. 00
27*
OE
$37.12
$26.00
69*
0*
0*
$10.50
40*
$10.50
40*
01
$12.43
$12.67
102*
$0.60
5*
50.02
0*
S2.20
17*
$2.82
22*
Ot
S9.97
$11.31
113*
0*
51.74
15*
$0.60
5*
$2.34
21*
PA
$4S.t(
$21.50
46*
$14.40
67*
0*
0*
$14.40
67*
tl
S3.99
$3.62
91*
$2.20
61*
0*
0*
$2.20
61*
sc
$12.00
$10.60
88*
0*
51.00
9*
SI. 00
9*
S2.00
19*
SD
$3.60
$3.85
107*
0*
0*
50.12
3*
SO. 12
3*
Tl
$16.28
$5.00
31*
SI. 00
20*
0*
0*
SI. 00
20*
TI
$74.25
$70.50
95*
57.00
10*
0*
S5.00
7*
512.00
n*
OT
$5.94
S5.00
84*
0*
0*
0*
SO. 00
0*
VI
$2.41
SI. 56
65*
0*
51.35
87*
0*
51.35
87*
VA
$25.83
$20.60
80*
0*
0*
S20.00
97*
S20.00
97*
lA
$15.37
$15.98
104*
SI. 00
6*
SI. 14
7*
51.88
12*
$4.02
25*
IV
$6.01
$5.65
94*
0*
0*
SO. 25
4*
SO. 25
4*
II
$17.71
$17.50
99*
0*
0*
52.10
12*
52.10
12*
lY
$4.10
$4.12
100*
SI. 10
27*
0*
SO. 26
6*
SI. 36
33*
-"Tire-
toon ic
infill HI
OQ^
S106.73
12*
557.36
7*
S79.33
9*
5243.42
28*
89
STKIPPEJ VEIL: OTHER OSES
IKUNBERS III HIUIOHS)
TABLE i
FEBRUARY, 1989
STATE
AKOUST
RECEIVED
J/86-1/89
ANOimT
ALLOCATED
OTHER
PROGRAMS
SEE
REF TABLE
AL
S15.44
$15.29
$13.02
akl
Ai;
S3. 89
$0.00
AZ
S10.32
$9.93
S6.13
deqotr
AR
$12.81
$12.53
$7.53
aeg
CA
S9M3
$90.94
$116.00
ai
CO
S10.82
510.72
S7.03
adegipru
CT
S17.09
$18.35
$13.43
acdeikiopr
DE
S4.78
$4.15
$3.15
3
DC
$3.(0
$3.30
$1.46
dfklru
FL
S<6.50
S33.85
$30.60
b
GA
$22.41
522.45
$14.45
icdfgbjliporu
BI
S6.91
Sl.JlO
$1.00
i
ID
54.13
53.82
$3.66
abdfbjipr
IL
$46.22
$46.05
$34.55
diu
IR
$24. 79
$22.64
517.30
ak
lA
$13.11
S11.03
$10.68
acfhjr
KS
$11.28
S2.87
53.76
ab
KY
$12.90
$4.76
51.00
I
LA
S23.94
525.09
520.07
afr
HE
$7.40
$7.28
54.61
cdef jUipru
MD
$16.02
$19.93
S5.53
cdejUpr
KA
$34.45
S28.00
$18.00
cdu
HI
$34.29
$42.36
$31.30
ehikru
KN
$17.46
$16.67
S8.37
fghirkl
NS
$13.74
$12.70
$10.11
afbjiipr
HO
$19.87
S16.76
$11.83
ill
XT
$4.55
53.6!
53.63
dbjkr
IE
57.42
50.75
50.10
r
HT
$4.08
55.18
S4.75
aenr
IB
$4.69
$4.45
$3.03
jrt
RJ
$37.15
$35.00
$35.00
dp
m
S6.59
$7.50
$7.40
jinr
BY
$77.93
$70.00
$56.40
acdfghijkipr
HC
$22.59
$21.00
■$35,00
u
ID
$3.69
$3.64
S4.50
bjipr
OE
$37.82
S26.00
S15.50
acu
01
S12.43
S12.67
$9.85
aefginopu
OR
$9.97
$11.31
$8.97
a
PA
$46.86
$21.50
$7.10
cdebiprs
RI
S3. 99
$3.62
$1.43
acdjklpqtr
SC
$12.00
$10.60
$8.60
dbjklp
SD
$3.60
$3.85
$3.56
aegbjr
TB
$16.28
$5.00
S4.00
ikP
n
$74.25
$70.50
$58.50
aijioru
DT
55.94
55.00
55.00
fgjr
TI
53.41
51.56
50.21
br
VA
535.83
530.60
50.60
9
VA
515.37
515.98
511.05
abcdbjnpu
IV
56.01
55.65
S5.40
a
II
sn.7i
S17.50
$15.40
abcdfhjinpr
IT
54.10
54.12
$3.76
adtbopru
TOTALS $990.36 $868.03 S666.18
REF. TABLE
a bridge and road repair and other
traasportatioD projects Ivan pools,
public transit uses, etc. I
b traffic signal s;ncbronization
c energ; conservation projects for
noD-profits
d residential energy conservation uses
e projects for older persons
f deionstration projects
g alternate fuel projects
b agricultural sector projects
i university sector projects
j state/local governient energy
conservation prograis
k SBCP (State Energy Conserv. Prog. I
1 EES {Energy Extension Service!
I Schools ( Bospitals leatheri:ation
Itbrougb ICP or otber»isel
n Bative Aierican uses
0 energy conservation projects for shelters
ait. sboin in 'Other Loi Inc.*
p couercial energy conservation uses
g pooled Biion ( Stripper lell il/or
other overcharge) funds
r other uses (includes adiin. costs)
s SECP 4/or EES
t technical assistance for a given sector
u prograis targeted, but not eidusivciy,
for lo»-incoie uses and projects for
lo«-to-ioderate inccie persons
90
Senator Metzenbaum. Thank you very much, Mr. Tucker. We
appreciate your testimony.
Ms. Duckett, he is here, so we can hear from you.
STATEMENT OF CHERRY DUCKETT, ASSISTANT DIRECTOR,
ARKANSAS INDUSTRIAL DEVELOPMENT COMMISSION
Ms. Duckett. Thank you, both of you.
Chairman Metzenbaum, Senator Bumpers, I am pleased to have
the opportunity to appear before you today to discuss this legisla-
tion. My name is Cherry Duckett. I am Deputy Director of the Ar-
kansas Industrial Development Commission. The department in-
cludes the Arkansas Energy Office. I am a member of the Execu-
tive Committee and the Secretary of the National Association of
State Energy Officials, NASEO. Today I am testifying on behalf of
NASEO.
As my colleague, Carol Tombari, has stated, we stongly support
S. 247. Carol has very effectively described our views on the legisla-
tion. I would like to discuss the importance of the State Energy Ad-
visory Board and the home energy rating system as well as certain
amendments that we propose.
The board of directors of NASEO met with Secretary Watkins,
Deputy Secretary Hanson Moore, Undersecretary John Tuck, and
the principal Deputy Assistant Secretary for Conservation and Re-
newable Energy, Reid Detchon, on April 7, 1989. I was fortunate to
attend the meeting, and I want to say publicly how pleased we are
as states that the new regime is aggressive and interested in work-
ing with us. They have set the right tone, and we intend to work as
closely with DOE as possible.
I also want to add that we had the occasion to meet with Reid
Detchon while he was serving as President Bush's transition repre-
sentative for DOE, and we look forward to an immensely positive
working relationship.
We have also met with Robert Grady, the new Associate Director
for Energy Environment and Science at 0MB, and have found him
to be very open and interested in these issues. We believe the new
administration is interested in working toward a balanced national
energy policy that includes energy conservation.
Regarding the State Energy Advisory Board, this discussion of
the old and new regime serves as a prelude to why we believe a
State Energy Advisory Board makes sense. The State energy offices
are not just another interest group. Not only do we operate the
State Energy Conservation Program, SECP, EES, and the ICP, but
we are engaged in a variety of other activities. Many of the energy
offices work on nuclear waste, nuclear waste transportation. Many
of the offices have a statutory siting responsibilities for electric
transmission lines and natural gas pipelines.
We are involved in coal, oil and gas development and particular-
ly in the new and innovative approaches in these areas.
One of our primary responsibilities through EES and SECP is to
disseminate the results of the research and development conducted
by DOE's labs to the real world. In short, we believe we can com-
municate good ideas to the Secretary of Energy. Also equally im-
91
portant, he and his staff can communicate their views and ideas to
us, and we can implement them.
As Carol said earlier, the State Energy Offices are the individ-
uals that implement programs and activities on the local and the
State level.
On energy rated homes, S. 247 also adds an optional SECP meas-
ure calling for the creation of a uniform home energy rating
system. We have developed a program of uniform energy ratings in
Arkansas to help increase the public's awareness and understand-
ing of energy efficiency. We are very pleased with this program,
which is being instituted in a number of states, and we hope that
the addition of the language in this bill will help encourage the
creation of these voluntary programs throughout the country.
Senator Bumpers is considering introducing legislation to accel-
erate the application in the states and would provide technical as-
sistance on the State, local government and utility level. NASEO
will be very supportive of this legislation.
In the appeals process, we would like to take this opportunity to
propose an amendment to S. 247 that goes to the heart of DOE-
State relations. A sensible appeals process must be instituted. We
recommend the following procedure on matters involving the four
State and local assistance programs, SECP, EES, ICP and Weather-
ization.
When a support office and state disagree, the state has the right
to seek an appeal to the director of the office of State and local as-
sistance program. OSLAP under the Secretary for Conservation
and Renewable Energy runs these programs. I maintain it makes
sense to have an appeal to an office that knows something about
the program. This appeal would hopefully result in affording con-
sistent application of DOE rules among the 10 regions.
A secondary appeal to DOE's Office of Hearings and Appeal also
makes sense. The present appeals route established last year ends
at the office of hearings and appeals but bypasses OSLAP office.
We also believe that the support office would have to make a deci-
sion within 60 days, and the director of OSLAP office should have
to make a decision appeal within 60 days.
If you wish, I can provide an example of a problem in my own
State of Arkansas we have had in the regional office. The regional
office is trying to micromanage projects in the State and thereby
dictate to the governor and the legislature on a very narrow
ground and in great detail of what they are permitted to do on
behalf of our citizens. Federalism means very little if the state does
not have the opportunity to implement the program.
Thank you, Mr. Chairman, for your time.
[The prepared statement of Ms. Duckett follows:]
92
I
Chairman
Charles fl Guinn
(New York}
Vice Chairman
Dr Donald E Milsten
(Maryland)
Treasurer
Charles J Clinton
(District ot Columbia)
Secretary
Cherry L Duckett
(Arkansas)
Parliamentarian
Mitch Beaver
(Illinois)
Paul Burks
(Georgia)
Mark Ginsberg
(Arizona)
Charles R Imbrecht
(California)
Bob Jackson
(Missouri)
Van Jamison
(Montana)
Sharon M Pollard
(Massachusetts)
Carol Tomban
(Texas)
Richard Watson
(Washington)
TESTIMONY
OF
CHERRY DUCKETT
OF THE
NATIONAL ASSOCIATION OF STATE ENERGY OFFICIALS
BEFORE THE
SUBCOMMITTEE ON ENERGY REGULATION
AND CONSERVATION
COMMITTEE ON ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
MAY 2, 1989
Executive Director
Annette Osso
Counsel
Jeffrey C Genzer
Duncan. fA^mberg. Miller
& Pembroke
1615 M Street NW
Suite 800
Washington, D C 20036
(202)467-6370
(a3 C Street, NW. SAebtf, I
vm.xoBi,
93
Chairman Metzenbaum, Subconunittee members, I eun
pleased to have the opportunity to appear before you today
to discuss this fine legislation. My name is Cherry
Duckett, Assistant Director of the Arkansas Industrial
Development Commission. My Department includes the
Arkansas Energy Office. I am a member and the Secretary
of the National Association of State Energy Officials
(NASEO). Today, I am testifying on behalf of NASEO.
As my colleague Carol Tombari has stated, we
strongly support S. 247. Carol has very effectively
described our views on the legislation. I would like to
discuss the importance of the State Energy Advisory Board,
the home energy rating system, as well as certain
amendments we propose.
The Board of Directors of NASEO met with Secretary
Watkins, Deputy Secretary Benson Moore, Under Secretary
John Tuck and the Principal Deputy Assistant Secretary for
Conservation and Renewable Energy, Reid Detchon, on April
7, 1989. I had the pleasure to attend that meeting as did
Carol Tombari, and I want to say publicly how pleased we
are that the new regime is interested in working with the
States. They have set the right tone and we intend to
work as closely with DOE as possible. I also want to add
that we had occasion to meet with Reid Detchon while he
was serving as President Bush's transition representative
for DOE and we look forward to an immensely positive
working relationship. We also had occasion to meet with
99-832 - 89 - A
94
- 2 -
Robert Grady, the new Associate Director for Energy,
Environment and Science at 0MB, and we have found him to
be very open and interested in these issues. We believe
that the new Administration is interested in working
towards a balanced national energy policy that includes
energy conservation.
I do not wish to dwell on the past but for the
last few years the previous Administration was simply not
interested in working with the States in this area. They
showed open hostility towards the State and Local
Assistance Programs (SLAP). Their view was that no
Federal appropriations were needed for these programs.
Unfortunately, they took that one step further and did not
communicate with the States because they felt that might
somehow provide the programs with some legitimacy.
Needless to say, that attitude set-back national energy
policy. Congress preserved these programs, in large part
due to Senator Metzenbaum's efforts, as well as strong
support from the Appropriations Committee, including
especially Senator Bumpers from my State.
State Energy Advisory Board
This discussion of the old and the new regime
serves as a prelude to why we believe a State Energy
Advisory Board makes sense. The State energy offices are
not just another interest group. Not only do we operate
the State Energy Conservation Progreun (SECP), the Energy
Extension Service (EES) and the Institutional Conservation
95
- 3 -
Program ( ICP ) , but we are engaged in a variety of other
activities. Many of the energy offices work on nuclear
waste and nuclear waste transportation. Many of our
energy offices have statutory siting responsibilities for
electric transmission lines and natural gas pipelines.
Many of our energy offices are involved in coal, oil and
gas development, and especially innovative approaches in
this area.
One of our primary responsibilities, through EES
and SECP, is to disseminate the results of the research
and development conducted by DOE ' s laboratories to the
real world. We take this responsibility seriously, and we
especially have focused on delivery to small and medium-
sized businesses that can utilize the technologies but
without us would not know how to find it. These
businesses do not have the large engineering staffs of our
major corporations. Many of our energy officials are
engineers and economists . Some of our members are serving
on an advisory board to the Energy Engineering Board of
the National Academy of Sciences.
I cannot stress enough the importance of this
energy office function of disseminating the results of the
work of DOE's laboratories to the business world. We take
this responsibility seriously and we believe the State
Energy Advisory Board could help us relay the needs of
business, and the needs of the public generally, to DOE to
help focus the work of the labs. We understand that
96
- 4 -
Senator Domenici has a keen interest in this area of
technology transfer and we look forward to working with
him and his staff to develop a suitable amendment to S.
247 to further encourage this function.
The energy offices are also directly involved in
energy emergency planning and integrated energy planning.
The energy offices have also been promoting pollution
mitigation in areas such as radon control progreuns,
rebates for energy efficient appliances and efficient
motors, waste oil recycling, resource recovery,
telecommuting, alternative motor fuels, etc. Many of the
State energy offices have the responsibility to update
building codes, and energy efficiency standards have begun
to be included in these codes. We also work with and
encourage utilities to engage in sensible, broad-based
energy conservation programs.
In short, we believe we can communicate some good
ideas to the Secretary of Energy. Also, and equally
important, he and his staff can communicate their views
and ideas to us and we can implement them. As Carol
Tombari said earlier, the State energy offices are the
individuals that implement progreuns and activities on the
local and state level.
This concept is not new. EPA set-up a State
Advisory Board composed of State environmental officials
from each of the ten EPA regions. They have been meeting
with the Administrator on a regular basis over the past
97
- 5 -
few years. It is my understanding that both EPA and the
States are very pleased with this system.
We are also suggesting a trade; eliminate one
Board and create another. S. 247 eliminates the EES
Advisory Board, which has been composed of political
appointees without a great deal of expertise in the energy
field. We believe a Board of the type proposed in this
bill is necessary to ensure that the lines of
communication stay open with DOE. Frankly, we think the
information exchange will be beneficial to both the States
and the Federal government and may even create some
innovative solutions.
Energy Rated Homes
S. 247 also adds an optional SECP measure calling
for the creation of a uniform home energy rating system.
We have developed a progrcim of uniform energy ratings in
Arkansas to help increase the public's awareness and
understanding of energy efficiency. We are very pleased
with this progrcun which is being instituted in a number of
states and we hope that the addition of the language in
this bill will help encourage the creation of these
voluntary programs throughout the country. We understand
that separate legislation may be introduced to encourage
the creation of a home energy rating system. It is very
important that we work closely with realtors, builders,
financial institutions and others in the development of
such a program. It has been successful in Arkansas.
98
- 6 -
Appeals Process
We would like to take this opportunity to propose
an amendment to S. 247 that goes to the heart of DOE/State
relations. A sensible appeals process must be instituted.
This issue strikes close to home, because DOE's problems
in this area have prevented a sound energy project from
being implemented in my home State of Arkansas.
DOE has ten regional offices, and these so-called
Support Offices are responsible for monitoring and
approving programs implemented in nearby states. My
office reports to the Dallas Support Office. These
Support Offices spend over 95% of their time on the State
energy programs. These Support Offices then report to
DOE'S Operations Offices. For the Dallas Support Office,
the Operations Office is in Albuquerque. Another excunple
is the Atlanta Support Office, which reports to Savannah
River. The Operations Offices then report to the Under
Secretary of Energy. Unfortunately, some Operations
Offices know next-to-nothing about the State energy
programs. In these cases, if a State has a dispute with a
Support Office, the Operations Office defers to the
Support Office since it does not understand the prograuns.
It is as if the appeal is heard by the trial judge. This
is not due process.
Correspondence between Congressman Sharp, Chairman
of the House Energy and Power Subcommittee, and DOE last
99
- 7 -
year confirmed that this is how the process allegedly
works. Well, it does not work and it makes no sense.
We recommend the following procedure. On matters
involving the four State and Local Assistance Programs,
SECP, EES, ICP and Weatherization, when a Support Office
and a State disagree, the State has the right to seek an
appeal to the Director of the Office of State and Local
Assistance Programs (OSLAP). OSLAP, under the Assistant
Secretary for Conservation and Renewable Energy, runs
SECP, EES, ICP and Weatherization. Doesn't it make sense
to have an appeal to an office that knows something about
the progreun? This appeal might actually have the effect
of affording consistent application of DOE's rules among
the ten regions.
A secondary appeal to DOE's Office of Hearings and
Appeals makes sense. The present appeals route
established last year ends at the Office of Hearings and
Appeals but bypasses the SLAP office.
We also believe that the Support Office should
have to make a decision within sixty days and the Director
of the SLAP office should have to make a decision on the
appeal within sixty days.
If you wish, I can provide you with a real life
example of a problem my own State of Arkansas has with the
Dallas Support Office. Dallas is trying to micro-manage
projects in our State and thereby dictate to the Governor
and Legislature on very narrow grounds and in great detail
100
- 8 -
what they are permitted to do on behalf of our citizens.
Federalism means very little if a State does not have the
opportunity to actually implement progrcuns.
In sum, I hope we have the opportunity to work
with you to craft appropriate legislative language as soon
as possible. Could this issue of an appeal be corrected
by DOE without legislation? The answer is yes.
Unfortunately, it has not yet been done.
ICP Amendments
1) Technical Assistance Funds
States have begun to institute a number of
innovations both through ICP and through State progreuns
that complement ICP. For exeunple, Iowa established a
School Energy Bank Program, which arranges for so-
called master lease financing of energy projects in
schools. ICP's existing rules prevent effective
melding of these alternative state-initiated programs.
Language has been included in recent Interior
and Related Agencies Appropriation Bills to help
address this problem. Senator Hatfield has been very
helpful in this regard. We would propose that S. 247
be amended to permit up to 100% of the Federal ICP
funds to be used for technical assistance analyses of
schools and hospitals, provided that funds for the
technical analyses constitute no more than 15% of
available funds to conduct the actual energy retrofits
of the buildings. This amendment would be conditioned
101
- 9 -
on the availability of funds for all schools and
hospitals and that such activities would occur
throughout the year. The aunendment would also permit
the federal ICP funds to be used to leverage private
capital. We have prepared language and we look forward
to discussing it with your staff prior to mark-up.
2) Passage of Title
We would also propose a technical amendment
to Section 7(a) of the bill which would permit legal
title to the equipment purchased with the non-federal
share (the matching funds) to pass to the school or
hospital after the ICP grant is completed.
Specifically, at the end of Section 7(a) of S. 247
(page 11, line 10), the following phrase would be
added! "even if title to the equipment does not pass
to the school or hospital until after the ICP grant is
completed." This amendment will freely permit the
implementation of performance contracting activities as
envisioned by the bill. Needless to say, lending
institutions are very concerned about passage of title.
3) Eligible Buildings
The ICP Statute defines eligible buildings
for purposes of receiving conservation measures as
structures completed "on or before April 20, 1977." S.
247 proposes updating this to December 31, 1984. We
would suggest a date of May 1, 1989. This would
obviously allow buildings constructed in the recent
102
- 10 -
past to be eligible, which is especially important in
fast-growing regions. It would also avoid the
necessity of revisiting the statute in the near future.
On the other hand, this date, as opposed to the date of
enactment or some future date, eliminates any incentive
to build energy inefficient structures in order to
become eligible for the ICP program.
SECP Definitions
We propose certain amendments to the Definitions
section of the SECP statute. These cimendments are
necessary, in large part, because the statute has not been
eunended since 1978. First of all, definitions of an
eligible "energy conservation measure" and a "renewable
energy measure" are restricted to modifications of
buildings completed before August 14, 1976. 42 U.S.C.
S 6326(4) and (6). We believe that in both instances this
should be May 1, 1989.
Second, we would like eligible "conservation
measures" to include cost-saving measures such as demand
management devices. Such measures do not necessarily save
energy, but they save energy dollars and can offset the
need for power plant additions. For example, the State of
Texas estimates that power factor correcting capacitors
installed at some prison facilities will save $16,000
monthly and would pay for themselves in seven months by
improving load factor rather than saving energy. In 42
U.S.C. § 6326(4), we propose adding references to
103
- 11 -
"building system, energy consuming device associated with
the building." Also, to take into account these load
management devices, we would propose to substitute "or"
for "and" in the same section. The new provision would
read as follows:
(4) The term "energy conseirvation
measure" means a measure which modifies
any building, building system, energy
consuming device associated with the
building, or industrial plant, the
construction of which has been completed
prior to May 1 . 1989. if such measure has
been determined by means of an energy
audit or by the Secretary, by rule under
section 6325(e)(1) of this title, to be
likely to improve the efficiency of energy
use or to reduce energy costs (as
calculated on the basis of energy costs
reasonably projected over time, as
determined by the Secretary) in an amount
sufficient to enable a person to recover
the total cost of purchasing and
installing such measure. . . .
Technology Applications Project
We have worked with the Weatherization program
representatives to develop a proposal which they will
discuss in greater detail. The purpose of this amendment
is to encourage DOE to conduct more intensive evaluations
of technologies and measures which increase energy
efficiency. This so-called "Technology Applications
Project" is also intended to distribute the results of
these efforts to State energy offices. State
weatherization offices and local providers.
I might add that in my own State of Arkansas the
Weatherization progretm has been quite effective. We
104
- 12 -
recognize the important relationship between the State
energy office and the Weatherization progreun and these
programs are complementary.
Conclusion
I want to reiterate our strong support for S. 247.
It is time to change the underlying statutes to allow more
innovations to occur. Our suggested cunendments build upon
the basic structure of the bill and should help stimulate
more sound energy investments.
105
Senator Metzenbaum. Thank you very much, Ms. Duckett. Your
entire statement will be included in the record.
Senator Bumpers, I do not know if you have any opening state-
ment.
Senator Bumpers. I do not, Mr. Chairman. Thank you.
Senator Metzenbaum. I have just a few questions, probably one
for each of the panelists.
Mr. Tucker, under DOE rules no measures related to cooling effi-
ciency are allowable. Can you please give us some examples of the
cooling measures you would like to see authorized under the pro-
gram and, if you would be good enough to do so, describe the Okla-
homa field test of cooling measures funded under DOE.
Mr. Tucker. Thank you. Senator. The field tests that are being
done in Oklahoma are being included as a part of my report. I am
not familiar enough to discuss it.
However, the cooling measures have long been a very serious
problem in Oklahoma because of the extreme heat. The statistics
have shown that there are more fatalities from heat than there are
from cold in our particular state.
We would like to have the opportunity to carry out some of those
recommendations from this study as the heat barrier that is being
studied.
Senator Metzenbaum. Do you think that you might have some
further response on the cooling measures that you would advocate
by the time we move this legislation forward? If so, we would be
pleased to hear from you. I will put it that way.
Mr. Tucker. Senator, I really do not other than the same meas-
ures to a large extent that we do for heat do have an effect. We
have a particular problem in Oklahoma due to the wind that cre-
ates movement through the house. When a home is stopped from
infiltration, then that conserves the energy in the cooling effort the
same as it does in the heating effort.
The study also includes some work that is being done with high
efficiency air conditioners, and we would hope that that could be
attained and be affordable within the program for some of the very
low income.
Senator Metzenbaum. Thank you very much, Mr. Tucker.
Mr. Concannon, it is pretty well accepted that Massachusetts
runs one of the very best weatherization programs in the country.
Other states do not do all well.
Can you offer some recommendations as to how to better encour-
age the other states to improve their programs, and how have you
done it? Does the performance fund actually have to encourage
program improvement in your state?
If you can answer all of that in about a minute or so, I would be
grateful.
Mr. Concannon. Thank you for your commendation, Senator.
I think that part of the reason Massachusetts has done as well as
it has done with its energy conservation programs is a commitment
not only from the State personnel in the program but the subgran-
tee personnel as well to serve low income people to a maximum
degree possible.
106
I think that if you have the client at heart, you will continue to
find ways that are technically advanced, that save money and that
protect your investment.
I think that it demands a dedication to the program not just in
terms of social service delivery but looking into the program each
year for a fine tuning; to not be content with what we do but to
move forward.
I would invite other states to have a public process that does that
that includes the subgrantees and includes poor persons saying this
is what we need in our homes.
I would invite other states to approach the gas industry, the oil
industry, the utility industry to say what can we do and how can
you help us to achieve this.
Relative to the performance fund, while clearly I think the state
would have benefited from it, the funding maximum never was
such that we did receive anything from it, and we do support its
elimination.
Senator Metzenbaum. Thank you very much.
Mr. Lee, you allude to the fact that conservation programs that
were effective in the 1970s may not continue to be so in the 1990s.
What suggestions would you make for improving existing pro-
grams, and can you suggest potential new programs for addressing
energy efficiency?
Mr. Lee. I would suggest, first of all, that one of the major prob-
lems in the 1990s is this linkage between energy efficiency and the
protection of our environment.
Senator Metzenbaum. The linkage between
Mr. Lee. Energy efficiency and the protection of our environ-
ment.
The fact that a number of our key environmental issues today,
acid rain, the global warming problems, the issues of transported
ozone which are dominating our political agenda, are directly relat-
ed to fuel use. As you begin to have to address these, one of the
measures to address them, I think, that has been well represented
in some legislation filed by Senator Wirth is to develop energy effi-
ciency programs to deal with the problems of air emissions.
I think that you need to link a lot of these conservation pro-
grams to the need to protect our environment. To do so, you should
set up a process at the State level that forces State environmental
officials to work closely with State energy officials. I believe the
State of New York has already begun a program in this area, but
unless you bring these two groups together they will both work in
parallel but very separate directions. I think it is essential that
they be brought together.
The second thing is I think you need to look at incentives. The
whole question of providing incentives to states so that they begin
to develop the most effective program possible, if you have a limit-
ed resource pie, limited dollars, limited staff, it is important to
ensure that those resources are used most effectively and you get
the most energy savings for the dollar invested.
I think the only way to do that is with positive incentives for the
state, and I have outlined a couple of them in my testimony.
Senator Metzenbaum. Thank you very much, Mr. Lee.
107
Ms. Duckett, other witnesses from the DOE suggested that the
State Energy Advisory Board should have fewer State energy offi-
cials and more members from Federal labs, utilities, regulatory
agencies, financial institutions and the private sector.
Do you agree that communications would be enhanced by a
broader membership, and how do you perceive the role of the State
Energy Advisory Board? How can it help us to achieve a balanced
national energy policy?
Ms. Duckett. Mr. Chairman, I think the critical issue here is
that the advisory board is being looked at. I think it is very impor-
tant. I have worked in energy programs since 1976, and as long as
the lines of communication are informal and not institutionalized,
they are greatly impacted by personalities, change of people, et
cetera.
I think that the need has never been greater for an institutional
formal line of communication. I think the energy offices as a group
bring probably as broad a perspective as you can bring together. I
am not so sure on the numbers at this point is that all perspectives
are included and that we are looking at the entire picture. We are
more or less the pivot point at this time. We are supposed to take
what the labs issue and get out to the people.
We have had far too many good things happen in our labs that
no one knows about or are well kept secrets. I think we are that
conduit, and I think we are there and stabilized.
Senator Metzenbaum. Thank you.
Ms. Tombari, in their statement DOE maintains that oil over-
charge funds provide ample resources for State energy conserva-
tion programs.
Would you agree with that statement?
Ms. Tombari. Not at all. Senator. DOE also says that 95 percent
of the oil overcharge funds have already been allocated. They have
been allocated not by bureaucrats but by governors and by legisla-
tures. Those people consider that they have looked at the restitu-
tionary needs of their constituents and that they have put the
funds into those programs.
It is very difficult to go back for whatever reason and ask them
to change their allocation if not enough money is going into these
programs through the budgetary process.
There also is a fundamental difference in the fundamental pur-
pose of these funds, and that is that the oil overcharge funds were
intended to be restitutionary. That does not mean that other pro-
grams and funds going to the citizens were to be taken away so
that these funds could supplant them. They were intended to sup-
plement them.
So I disagree with the DOE statement.
Senator Bumpers. Mr. Chairman, that is an excellent question.
That is just the very point that we fight with the administration
around here about all the time. Every time there is any money
coming from any other source, they use that as an opportunity to
cut funding which has existed in the past.
I just came from an Appropriations Subcommittee on Interior
where Admiral Watkins, our new Secretary of Energy, was testify-
ing very precisely on this point by saying that they were not
108
asking for any additional money for State energy conservation pro-
grams because the oil overcharge funds were more than adequate
to take care of it. It was almost as though saying the States can
sort of as 50 separate entities solve the national conservation prob-
lems. Well, the states can do a lot but they cannot formulate a na-
tional energy conservation policy.
We are going to go for an increase in CAFE standards. The Sena-
tors are taking a lead in that. There are a whole host of national
conservation guidelines that we have to formulate because we are
dealing with a whole host of new issues. Energy conservation
cannot be just energy conservation anymore. You have to remem-
ber the global warming effect. You have to remember ozone deple-
tion. You have to do all those things that are international in
scope.
So I am very pleased with your answer, Ms. Tombari. I think
your answer is precisely correct. The Reagan Administration and
now the Bush Administration is using the oil overcharge funds. Of
course, we have more coming from Texaco now.
Incidentally, how much money have you all had? Are your from
Texas?
Ms. Tombari. Yes, I am from Texas.
Senator Bumpers. Well, you do not sound like a Texan, but how
much money have you all gotten out of the Exxon overcharge
fund?
Ms. Tombari. From Exxon, $157 million.
Senator Bumpers. Do you have all of it yet?
Ms. Tombari. Yes. From Exxon, we have received all of it.
Texaco will still be coming in over the next five years.
Senator Bumpers. So how much do you anticipate from that?
Ms. Tombari. That will probably be about $30 million to Texas.
Senator Bumpers. Do you agree with Cherry that the Dallas
office tries to micromanage?
Ms. Tombari. I agree with Cherry, yes.
Senator Bumpers. Cherry, is our Medicreek project still on hold,
or is it dead, or what?
Ms. Duckett. I hope it is not dead. Senator, but it definitely is on
hold. I have documentation here from when I was asked; 22 formal
transactions have taken place in the last nearly 18 months, and
the ball is currently in their court.
Senator Bumpers. Mr. Chairman, you know they want an ap-
peals process very badly because they think, for example— I do not
know whether the other witnesses are having these kinds of prob-
lems with the regional offices or not, but the people who deal with
the Dallas office, you have just heard Ms. Tombari and Cherry
both testify that the Dallas office is acting in what they consider to
be a very arbitrary and capricious way. We have spent more money
in the Washington office furnishing paperwork that has been re-
quired than the entire $75,000— how much was it, Cherry?
Ms. Duckett. Down to $76,000 at this point.
Senator Bumpers. $76,000 for a solar demonstration project. I
will not go into details. It is called the Medicreek project, and there
are all kinds of exciting things there.
109
We have spent more money answering their questions and fur-
nishing paper than we asked for for the project, and we still do not
have it approved and probably never will.
The reason they are asking for a better appeals process is to take
it out of the hands and at least give somebody else a chance to look
at it when they feel they have been wronged on their request for
spending money.
Is that a fair statement, Cherry?
Ms. DucKETT. And people who have some knowledge of the pro-
gram.
Senator Bumpers. Are these political appointees down there who
know nothing?
Ms. DucKETT. Well, when you leave that office, when you leave
the regional office, you are talking to Albuquerque, which effective-
ly has no knowledge of the program whatsoever. More critical, the
people who wrote the program and dealt with the very specific
issues in it are totally circumvented from the process and have no
input whatsoever.
Senator Bumpers. How much money have we gotten from the
overcharge fund?
Ms. Duckett. Total will be in the neighborhood of $27 to $30 mil-
lion right now. Texaco has started coming in. Our Texaco allot-
ment is much less than theirs. It is probably going to be less than
$6 million, and it will dribble in.
Senator Bumpers. Are you already getting some Texaco money?
Ms. Duckett. Yes. We have had two awards at this point, but
they will come in at about $1 million plus each over the next five
years.
Senator Bumpers. What is going to happen when all this over-
charge money is gone and the Feds are not picking up anjrthing?
Ms. Duckett. You are going to have a lot of programs that will
collapse.
Senator Bumpers. How do you coordinate the weatherization pro-
gram that you get from these overcharge funds with the weather-
ization program that the Federal Government sponsors?
Ms. Duckett. The weatherization program, as you know, in Ar-
kansas is not under the energy office directly. It works with the
CAP energies. The oil overcharge money, our process involves the
governor and the joint committee on energy. We funnel money into
weatherization through that process.
Senator Bumpers. Thank you, Mr. Chairman.
Senator Metzenbaum. I very much appreciate the cooperation of
the witnesses. I think I as well as other members of the committee
may have some questions before we go to final markup.
I would say to the Department of Energy that this question of
the appeals process, if you cannot figure out a procedure that is
workable on your own we can draft an amendment to put into this
bill before it goes to the floor. I would hope that you can do it with-
out our having to put additional legislative language in.
Having said that, unless Senator Bumpers has anything fur-
ther
Senator Bumpers. I do not think they can do it. I think we are
going to have to put it in the bill. But then I agree with your state-
ment.
no
Senator Metzenbaum. Any other questions?
Senator Bumpers. No.
Senator Metzenbaum. Thank you very much. The hearing
stands adjourned.
[Whereupon, at 3:15 p.m., the hearing was adjourned.]
Ill
APPENDIXES
Appendix I
Responses to Additional Questions
Department of Energy
Washington, DC 20585
June :?9, 1989
The Honorable Howard f,. Metr.enbaum
Chairman
Subcommittee on Energy' Regulation
ano Conservation
Commit fee on Energy and Natural Resources
United States Senate
Washington, D.C. 20510
Dear Kr '"hairman:
On Hay 2, 1989, Dr. John R. Berg, Assistant Secretary for Conservation and
Renewable Energy appeared beifore your subcommittee to discuss S. 247,
the State Energy Conservation Programs Improvement Act of 1989.
Follov;ing that hearing, you submitted written questions including questions on
behalf of Senator Don Hickles for our response to sunplcment the record.
Enclosed are tlie answers to those questions. A copy of the responses to
Senator Nickles' questions have also been sent to him.
If you have any questions, please have your staff call Frances Btyant on
586-4277. She will be happy to assist.
Sincerely,
i^2j2£^:^^L^y^^J&yK.^j^^^Z-—
Z--i?1t*obert G. Rahben
Assistant General counsel
for Legislation
Enclosures
112
POST-HEARING QUESTIONS AND ANSWERS
RELATING TO THE
MAY 2, 1989
HEARING BEFORE THE
COMMITTEE ON ENERGY AND NATURAL RESOURCES
SUBCOMMITTEE ON REGULATION AND CONSERVATION
UNITED STATES SENATE
WITNESS: DR. JOHN R. BERG
ASSISTANT SECRETARY FOR CONSERVATION AND RENEWABLE ENERGY
113
QUESTIONS FROM SENATOR METZENBAUM
Question 1(a): What is the total energy savings of the four SLAP programs
outlined in S. 247? What other benefits do these programs
offer?
Answer: Each of the four programs have achieved energy savings.
Because post-retrofit data is not regularly collected by the
grantees, it is extremely difficult to determine with a high
degree of certainty what actual energy savings are attributable
to this program. The Department of Energy has made an attempt
to perform such a study; however because of methodology and
data limitations, its energy savings estimates must be used
with care. A recently completed national evaluation of ICP
shows a cumulative estimated energy savings of 317 trillion
BTU's, or a cumulative financial savings of $1.9 billion, based
on refined estimates by professional architects and engineers.
For WAP, average heating energy savings are estimated to be
14%, or average annual savings per home weatherized of about
2.6 barrels of oil equivalent, based on a 1981-1982 sampling.
WAP also provides health and comfort benefits for the
low-income elderly and handicapped. Cumulative energy savings
from SECP/EES, based on annual energy savings reports submitted
by the States, are estimated to be 4.23 quads through FY 1987.
States calculate energy savings using similar methodology but
apply the methodology to individual state specific programs
that are unique to each state. In addition to specific energy
savings, SECP and EES have led to the establishment of an
114
energy planning network at the state and local level, and,
through the outreach and educational activities carried out by
States, they have assisted in the development of an energy
efficiency ethic across the country.
4
1
115
QUESTIONS FROM SENATOR METZENBAUM
Question 1(b): Does DOE consider these programs to be cost-effective?
Answer: Because no recent cost-effectiveness evaluations have been
undertaken for some of these programs it is impossible to
state whether or not these programs are cost-effective. The
Department is reviewing the need for such evaluations in
conjunction with its review of the need for energy savings
studies.
116
QUESTIONS FROM SENATOR METZENBAUM
Question 1(c): Are certain programs or measures more effective than others?
Answer: The programs are designed for different audiences, to address
different needs, and each is effective in its own way. ICP
and WAP are targeted toward buildings-oriented conservation
measures, and both programs have achieved energy savings in
their target groups. SECP/EES have enabled States to design
and implement broad, state-wide energy conservation and
outreach programs to address each State's specific energy
needs, and the States report that energy savings have been
achieved.
117
QUESTIONS FROM SENATOR METZENBAUM
Question 1(d): How can DOE ensure that the benefits of these programs are
"real and long-lasting"?
Answer: Over the 12 years that these programs have been in operation,
we have seen the growth of an energy efficiency ethic across
the country--people are now aware of and adopting energy
efficient practices in their homes and businesses. Many
States and local governments have developed multi-year plans
to address energy needs. Over 1.8 million low-income homes
have been retrofitted through WAP, and client education
programs are carried out to ensure that the savings will be
maintained. Through TCP, energy conservation measures have
been installed in 29,000 school and hospital buildings, and
energy engineering studies have been performed in over 32,000
buildings. These activities lead not only to permanent energy
conservation benefits in the buildings, but also to an
increased awareness of energy conservation on the part of the
school children and their families. Also over the last few
years, the operation of these programs has led to the
establishment and growth of the "shared-savings" industry, an
industry which enables energy conservation activities to be
supported through innovative financing mechanisms not
dependent on Federal funding.
118
QUESTIONS FROM SENATOR METZENBAUM
Question 1(e): What steps is the Department taking to ensure that the best
State programs and state-of-the-art technologies are being
introduced throughout the country?
Answer: DOE carries out a variety of technology transfer activities to
make information available about effective conservation
programs and state-of-the-art technologies. A recent
Demand-Side Management Conference sponsored by DOE was
attended by over 600 people, representing 150 utilities,
engineering firms and State and local governments. DOE also
publishes "Conservation Update" monthly, to disseminate
information about innovative State programs and the latest
technology developments. In addition, DOE sponsors national
and regional conferences to provide networking opportunities
for program managers and implementers at the State and local
level. DOE also operates an electronic bulletin board
accessible to anyone across the country to provide information
on State energy conservation programs supported with oil
overcharge funds.
119
QUESTIONS FROM SENATOR METZENBAUM
Question 2{a): You say that oil overcharge funds "provide ample resources"
for State energy conservation. How much oil overcharge
funding has been made available to the States so far?
Answer: The States have received $3.8 billion to date from the
resolution of all oil overcharge cases, of which $200
million was distributed under the terms of the Warner
Amendment, $2.1 billion came from settlement of the Exxon oil
overcharge case and $1 billion has been distributed under the
Stripper Well Settlement Agreement.
120
QUESTIONS FROM SENATOR METZENBAUM
Question 2(b): How much of the total was allocated to each of the four SLAP
programs? Please provide total and percentages.
Answer: As of May 1, 1989, $1,975 billion has been allocated by the
States to the four SLAP programs. By program, the funding
totals and percentages are as follows:
PROGRAM
SECP
EES*
WAP
ICP
FUNDING($/M)
%
OF TOTAL
$ 775.2
39.3%
137.2
6.9%
673.4
34.1%
389.5
19.7%
*in some cases, EES allocations are reported in combination
with SECP.
121
QUESTIONS FROM SENATOR METZENBAUM
Question 2(c): How much remains to be allocated to the States?
Answer: It is estimated that $500-650 million in oil overcharge
funds will be distributed to the States, in the future, for
use in these programs.
122
QUESTIONS FROM SENATOR METZENBAUM
Question 2(d): How much can the SLAP program reasonably be expected to
receive in the future from oil overcharge funds? How many
years do you expect these funds to last and should these
expected funds substitute for direct Federal grants to the
States?
Answer: It is estimated that the States will receive $500-650 million,
mainly over the next five years, under the terms of the
Strippei- Well Settlement Agreement. The States will determine
the allocation of these funds among the eligible conservation
programs, which include the SLAP programs and others. These
funds may last a year or two beyond the date of the last
distribution, since most States have adopted multi-year
spending plans. These funds represent a stable and ample
source of funds for the SLAP programs over the next several
years.
123
QUESTIONS FROM SENATOR METZENBAUM
State and Local Assistance Programs
Question 3(a): You state that the State Energy Conservation Goal of a 10
percent reduction by 2000 is "unrealistic, unreasonable, and
counterproducti ve . "
Could you suggest language which might establish a more
flexible goal toward which states could strive?
Answer: Based on the Department's experience with the goals
established in the original SECP legislation, it is believed
that for a variety of reasons, a legislatively mandated,
quantitative goal is not practical. Instead, a more
generally defined target can be set in legislation.
124
QUESTIONS FROM SENATOR METZENBAUM
State and Local Assistance Programs
Question 3(b): Are there some states that may be able to achieve the 10
percent reduction goal?
Answer: Clearly, it may be possible for some States to reduce their
energy consumption by 10 percent. An adverse event, causing
sudden economic distress, could accomplish such a goal in an
undesirable way.
125
QUESTIONS FROM SENATOR METZENBAUM
State and Local Assistance Programs
Question 3(c): Might not a 10 percent 'per capita' reduction in energy
consumption make states in the grip of economic recession
more competitive with their more economically sound
counterparts?
Answer: A 'per capita' standard would not seem to affect this in any
signigicant way.
99-832 - 89 - 5
126
QUESTIONS FROM SENATOR METZENBAUM
State and Local Assistance Programs
Question 4(a): You propose the elimination of the provision requiring
40 percent of weatherization funds be used for the
purchase of materials. Are you concerned that the
elimination of this rule may lead to abuses within the
program?
Answer: We do not believe that elimination of the 40 percent
rule would lead to program abuse. We believe that
DOE'S monitoring and training and technical assistance
activities, combined with periodic Federal audits of
State programs, provide an adequate safeguard against
potential abuses.
127
QUESTIONS FROM SENATOR METZENBAUM
State and Local Assistance Programs
Question 4{b): What provisions would you suggest be enacted that could
help to prevent potential abuses and avoid 'inevitable'
delays?
Answer: The "State Energy Conservation Programs Improvement Act
of 1989" (S. 247, H.R. 711) currently being considered
by the Congress would provide for a waiver of the
requirement that 40 percent of weatherization funds be
used for materials; waivers could be granted by DOE on
a State-by-State basis. We suggest elimination of the
40 percent requirement for the following reasons.
First, we share the Committee's concern that the
requirement, as it now stands, frequently provides an
incentive not to install the most appropriate
weatherization measure(s). For instance, storm windows,
on the average, result in annual energy savings of only
5 percent and a payback period of about 27 years; they
should not be generally prescribed. They are, however,
a materials-intensive measure and are sometimes
installed in order to meet the 40 percent requirement.
Labor intensive measures, e.g., furnace retrofit
(average annual savings of 18 percent and payback of 2
years) may, for the same reason, be overlooked.
We believe, given the high degree of experience and
professionalism which now exists among State and local
weatherization program implementers, that they are
128
Answer 4(b)
Continued: the appropriate persons to decide which measures will
be most effective in a given circumstance. A waiver
provision, as opposed to elimination of the
requirement, would require DOE to review and second
guess the decisions of those State and local officials
with the most immediate knowledge and expertise. The
waiver provision contained in the proposed legislation
would, itself, result in "inevitable" delays;
elimination of the requirement would not.
129
QUESTIONS FROM SENATOR METZENBAUM
Question 5(a): Could you please provide examples of cooling
measures currently being studied by the Department?
Answer: DOE is currently involved in several weatherization
research efforts to field test the effectiveness of
installing two potentially effective measures -
attic radiant barriers and replacing room air
conditioners with high-efficiency units.
130
QUESTIONS FROM SENATOR METZENBAUM
Question 5(b): Will the field tests be completed in the near
future and what conclusions are they likely to
offer?
Answer: We expect these projects to be completed by the end
of 1989. Until these projects are completed, no
conclusions can be drawn.
131
QUESTIONS FROM SENATOR METZENBAUM
Question 6(a): The Department's report on the 1988 program says the
Weatherization program has changed substantially in
recent years through the adoption of new technology and
management techniques. On what basis was this
statement made?
Answer: The statement was made on the basis of (1) a soon to be
released comparative analysis of State program
evaluations; (2) a 1987 Oak Ridge National Laboratory
study, "Weatherization Assistance for Low-Income
Households; An Evaluation of Local Program
Performance;" (3) materials and background compiled for
a report, now in process, to the Senate Appropriations
Committee; and (4) information gathered through program
monitoring, training, and other oversight activities.
132
QUESTION FROM SENATOR METZENBAUM
Question 6(b): When was the last independent national evalution of the
Weatherization program conducted?
Answer: The last independent national evaluation of the impact
of the weatherization program was conducted in 1984 and
covered homes weather i zed in 1981.
133
QUESTIONS FROM SENATOR METZENBAUM
Question 6(c): Does the Department have plans to complete another
comprehensive evaluation of the Weatherization program
in the near future?
Answer: As of the moment, the Department has not developed any
plans for another comprehensive program evaluation.
However, the report to the Senate Appropriations
Committee mentioned above will indicate that a need
exists for such an evaluation, and the Department is
planning to look at options for how and at what cost a
comprehensive program evaluation could be done.
134
QUESTIONS FROM SENATOR METZENBAUM
State and Local Assistance Programs
Question 7: Assume the establishment of a State Advisory Board with 25
percent of the board consisting of State agency directors
responsible for developing state energy plans.
What does the Department feel would be an effective balance of
members for the remaining positions on the board?
Answer: The Department of Energy recommends that the membership of the
Board consist of a minimum of 15 and not more than 20 members,
and that 75 percent of the membership consist of
representatives of small business, agriculture, transportation,
industry, local government, educational and research
institutions, financial institutions, consumer interest groups,
community service action agencies, utilities and public utility
commissions. The Department also recommends that membership be
geographically balanced. Every effort should be made to select
representatives who have some knowledge of or experience in
energy efficiency or renewable energy programs.
135
QUESTIONS FROM SENATOR METZENBAUM
Question 8: Does the appeals process currently authorize state energy
agencies to appeal to headquarters in Washington?
Answer: An appeals process currently operates for three OSLAP programs,
the State Energy Conservation Program, Energy Extension Service,
and Weatherization Assistance Program, under 10 CFR 420.9, 465.10
and 440.30. The process is under review in the Department with
the expectation that a new policy, establishing formal appeals
procedures for all four OSLAP programs, will be put in place by
the Secretary in the near future.
136
QUESTIONS FROM SENATOR METZENBAUM
State and Local Assistance Programs
Question 9: What impact do you feel the merger of SECP and EES, as called
for in S. 247, will have on the activities of the EES?
Answer: Over the last five years, the Department has actively promoted
the consolidation of SECP and EES State grant applications and
plans. The Department has brought both programs' regulations
and operating procedures into a high degree of conformance, and
the States have been encouraged to establish compatible EES
outreach programs for SECP activities. In many States, the
staffs of both programs already are located in the same
organization. Thus, the proposed merger, requiring the
mandatory inclusion of EES functions under SECP, should have no
adverse impact on the national EES program.
137
QUESTIONS FROM SENATOR METZENBAUM
State and Local Assistance Programs
Question 10(a): What has been the nature of the relationship between the
Secretary and state energy officials? How many times has
the Secretary met with state energy officials?
Answer: Secretary Watkins met with representatives of the National
Association of State Energy Officials shortly after his
confirmation. In addition, members of the Secretary's
staff have met on several occasions with State energy
officials. Those meetings have been cordial and resulted in
an open exchange of information and views.
138
QUESTIONS FROM SENATOR METZENBAUM
State and Local Assistance Programs
Question 10(b): Do you foresee any changes in this relationship under the
new Administration?
Answer: We would expect such meetings between the Secretary and
State energy officials to continue. The Secretary invited
the active participation of State Energy Officials in the
formation of an integrated national energy strategy.
139
QUESTIONS FROM SENATOR METZENBAUM
Question 11(a): The OSLAP office in Washington sets program guidelines. DOE
support offices make decision on individual state plans and
programs. These support offices do not report back to OSLAP
and Washington in the chain of command, but instead to
operations offices such as Savannah River which are
essentially weapons plants and R & D facilities.
Does this system make sense?
Answer: The Department historically is structured with the Operations
Offices, which have administrative responsibility for the
Field Offices, reporting to the Secretariat. The Program
Offices work through the Operations Offices to effect
Headquarters policy and guidelines.
140
QUESTIONS FROM SENATOR METZENBAUM
Question 11(b): Does DOE have any plans to review this chain of command
issue?
Answer: Yes. This issue is under active review at this time.
141
QUESTIONS FROM SENATOR METZENBAUM
Question 12: Mr. Detchon, currently, states have the right to appeal
decisions made by the regional support offices on these
programs, but there is not an appeals process for the schools
and hospitals program.
Does the department have plans to review the various appeals
processes and extend them to ICP?
Answer: The Department is presently reviewing the OSLAP appeals process.
Any new appeal process will include the Institutional
Conservation Program as well as the other OSLAP programs.
142
QUESTIONS FROM SENATOR NICKLES
Weatherization Assistance Programs
Question 1: Would you comment for the Record on the comments I
recently received by letter of April 21, 1989, from
Donald D. Paulsen, Executive Director of the Oklahoma
Department of Commerce commenting on S. 247?
Answer: The Department is not currently contemplating a revision
in its WAP allocation formula, absent a change in
statute. Any change in the allocation formula could
result in reduced funding for some States with the result
that many well established, well run programs (at both
the State and local levels) would be severely disrupted.
143
QUESTIONS FROM SENATOR NICKLES
Weatherization Assistance Programs
Question 2(a): What currently are the best available technologies
for air conditioning or cooling buildings? What is
the estimated energy efficiency of such systems?
Answer: One of the major factors in determining the energy
savings effectiveness of cooling season measures for
the Weatherization Assistance Program is the cost of
energy used for cooling low- income homes. Many
low-income homes only have electric fans which
circulate air, but do not cool the house. The
relatively low-cost of operating these fans results
in a very minor potential for cost-effective cooling
season measures. Those homes, particularly in hot
and humid climates, that have typical window or
central air conditioning systems have a relatively
high energy cost for cooling and good potential for
cost-effective cooling season measures. Significant
benefits result from replacing an old air
conditioner with a new high efficiency air
conditioner. Similarily, measures that either
reduce the infiltration of hot, humid air into the
house or prevent the heat from the sun entering the
house have economic potential when the costs of air
conditioning are relatively high. Homes in climates
that are hot and dry that use evaporative coolers
have a significantly smaller potential due to lower
energy costs for cooling than with the typical
window or central air conditioning systems.
144
QUESTIONS FROM SENATOR NICKLES
Weatherization Assistance Program
Question 2(b): What improved air conditioning or cooling
technologies are now being field tested? How were
these technologies selected?
Answer: The Department is presently involved in several
weatherization research efforts to determine the
effectiveness of installing attic radiant barriers
and replacing room air conditioners with
high-efficiency units. These two measures were
selected because of their high potential for
cost-effectiveness in warm climates.
145
QUESTIONS FROM SENATOR NICKLES
Weatherization Assistance Program
Question 2(c): How many dwelling units are now eligible for
weatherization efficiency modification assistance?
How many of these units have air conditioning or
cooling systems? What is the estimated energy
efficiency of such systems?
Answer: Presently we estimate 18 million households remain
eligible for assistance under the DOE weatherization
program. Based upon the DOE Residential Energy
Conservation Survey we estimate 7.3 million of those
households have air conditioning, nearly two-thirds
of which are window units. The Department does not
have a report on the energy efficiency of these
units or other cooling systems. If the air
conditioning units are old, particularly window
units, they would be energy inefficient compared to
new units.
146
QUESTIONS FROM SENATOR NICKLES
Weatherization Assistance Program
Question 2(d): What do low-income persons now spend on air
conditioning or cooling? What other air
conditioning or cooling costs are now being
incurred?
Answer: The Department does not have a report on low-income
costs for air conditioning or cooling. U.S. Census
Bureau data, however, indicates for the residential
sector as a whole that, in the South where homes are
more likely to be air conditioned than in the North
(77% versus 51%), energy expenses for an
electrically heated home with an air conditioner
will be, on average, 29% more than for a home
without an air conditioner.
147
BENNETT JOHNSTON lOU'SIANA CHftlHMAN
JAMIS * MeCtyRE lOAMO
MAHk 0 HATFIELD OREGON
PETE V OOMENlCi NEW MEXICO
MAlCOlM WALLOP WV0M1NG
(flANN H MUXaOWSKI ALASKA
OON NiCklES OhLAmOMA
CONRAD BURNS MONTANA
JAKE GARN UTAM
MITCH MgCONNELL •.ENTUCKT
DALE BUMPERS ARKANSAS
WENDELL H «0«0 KENTUCHT
HOWARD M METZENBAUM OHIO
BILL BHAOLEt NEW JERSET
jE'F BINGAMAN new MEl'CO
TIMOTHT i WiRTm COLORADO
KENT CONRAD NORTH CAKOTA
HOWtLL T HCFUN ALABAMA
JOHN 0 ROCREfELLER iV WEST VIRGINIA
OARVL OWEN STAFF DIRECTOR
D MICHAEL HARVET CHIEf COUNSEL
FRANK M CUSHING STAff DIRECTOR F0« THE MINORITY
GART C ELLSWORTH CHlCf COUNSEL FOR THE MINORITY
Bnited States ^oiate
COMMITTEE ON
ENEnGY AND NATURAL RESOURCES
WASHINGTON DC 205 10-6150
May 5, 1989
The Honorable John R. Berg
Assistant Secretary
Conservation and Renewable Energy
U.S. Department of Energy
Washington, D.C. 20585
Dear Mr. Berg:
Thank you for your expert testimony presented at the Committee's
May 2 hearing on S.247, the State Energy Conservation Programs
Improvement Act of 1989. I have enclosed several questions from
Committee members to be answered for inclusion in the hearing record.
Please submit your responses to these questions to the Committee by
May 23, 1989.
In addition, you will receive a copy of the printed hearing record
as soon as it becomes available.
Howard M.
Chairmam,
Metzenbaum
Subcommittee on
Regulation and Conservation
HMM/aks
Enclosure
148
QUESTIONS FOR JOHN R. BERG
DEPARTMENT OF ENERGY
1. What is the total energy savings of the four SLAP programs outlined
in S. 247? What other benefits do these programs offer?
* Does DOE consider these programs to be cost-effective?
* Are certain programs or measures more effective than others?
* How can DOE ensure that the benefits of these programs are
"real and long-lasting"?
Follow-up:
* What steps is the Department taking to ensure that the best
state programs and state-of-the-art technologies are being
introduced throughout the country?
2. You say that oil overcharge funds "provide ample resources" for
state energy conservation.
* How much oil overcharge fxinding has been made available to the
states so far?
* How much of the total was allocated to each of the four SLAP
programs? Please provide total and percentages.
* How much remains to be allocated to the states?
* How much can the SLAP programs reasonably be expected to
receive in the future from oil overcharge fvinds? How many
years do you expect these ftonds to last and should these
expected funds svibstitute for direct Federal grants to the
states?
3. You state that the State Energy Conservation Goal of a 10 percent
reduction by 2000 is "unrealistic, unreasonable, and counter-
productive" .
* Could you suggest language which might establish a more
flexible goal toward which states could strive?
* Are there some states that may be able to achieve the 10
percent reduction goal?
* Might not a 10 percent 'per capita' reduction in energy
consumption make states in the grip of economic recession more
competitive with their more economically sound counterparts?
4. You propose the elimination of the provision requiring 40 percent
of weatherization funds be used for the purchase of materials.
149
* Are you concerned that the elimination of this rule may lead to
abuses within the progrcun?
* What provisions would you suggest be enacted that could help to
prevent potential abuses and avoid ' inevitcible' delays?
5. Could you please provide excunples of cooling measures currently
being studied by the Department?
* Will the Department's field tests be completed in the near
future cind what conclusions are they likely to offer?
6. The Department's report on the 1988 program says the Weatherization
prograun has changed substantially in recent years through the adoption
of new technology and management techniques. On what basis was this
statement made?
* When was the last independent national evaluation of the
Weatherization Prograun conducted?
* Does the Department have plams to complete another
con^rehensive evaluation of the weatherization program in the
near future?
7. Assume the establishment of a State Advisory Board with 25 percent
of the board consisting of State agency directors responsible for
developing state energy plans .
* What does the Department feel would be an effective balance of
members for the remaining positions on the Board?
8 . Does the appeals process currently authorize state energy agencies
to appeal to headquarters in Washington?
9. What impact do you feel the merger of SECP eind EES, as called for
in S. 247, will have on the activities of the EES?
10. What has been the nature of the relationship between the Secretary
and state energy officials? How mamy times has the Secretary met with
state energy officials?
* Do you foresee any chamges in this relationship under the new
Administration?
150
' 1. The OSLAP Office in Washington sets program guidelines. DOE
support offices make decisions on individual state plans and programs .
These support offices do not report back to OSLAP and Washington in the
chain of command, but instead to operations offices such as Savannah
River which are essentially weapons plants and R&D facilities.
--Does this system make sense?
--Does DOE have any plans to review this chain of command issue?
2. Mr. Detchon, currently, states have the right to appeal
decisions made by the regional support offices on these programs, but
there is not an appeals process for the schools and hospitals program.
— Does the department have plans to review the various appeals
processes and extend them to ICP?
I
151
May l, 1989
HEARING ON S. 2 47
QUESTIONS FOR DEPARTMENT OF ENERGY
QUESTIONS FROM SENATOR NICKLES
1 . Would you comment for the Record on the comments I recently
received by letter of April 21, 1989, from Donald D. Paulsen,
Executive Director of the Oklahoma Deparment of Commerce
commenting on S. 247? (Copy of letter is attached for the
Record. )
2. a. What currently are the best available technologies for air
conditioning or cooling buildings? Wliat is the estimated
energy efficiency of such systems?
b. What improved air conditioning or cooling technologies are
now being field tested? How were these technologies
selected?
c. How many dwelling units are now eligible for weatherization
efficiency modification assistance? How many of these units
have air conditioning or cooling systems? What is the
estimated energy efficieny of such systems?
d. What do low-income persons now spend on air conditioning or
cooling? What other air conditioning or cooling costs are
now being incurred?
152
DEPARTMENT Of COMMERCE
HEfiltr BELLSIOH DONALD D.^Al
GOVEJtNOR ECXCinVKDIIf
April 21, 1989
E. L. Stewart
Office of the Governor
State Capitol Building
Oklahoma City, Oklahoma 73105
Thank you for the opportunity to comment on this significant
legislation. Four programs, the Weatherization Assistance Program
(WAP) , the Energy Extension Service (EES) , the Institutional
Conservation Program (TCP) and the State Energy Conservation
Program (SZr?) , have been styled b^- the Department to contribute
to the stara's support of coraraunity and business development.
Under the S'^te Energy Conservation Program and the Energy Exten-
sion Servica, several programs, with the addition of Oil Over-
charge func3 provided by the Governor, are designed to directly
support bus_ness and rural communities, e.g.:
Interest Subsidy Program. Works with lenders to "buy down"
the interest rate to small businesses making energy im-
provements.
Small Business Demonstration Program. Will help businesses
to try innovative energy saving measures.
Rural Small Business Audit Program. Utilizes state Rural
Electric Cooperatives Association to perform energy audits
on rural businesses.
(If you would like additional information on any of these pro-
grams, please let me know.)
The proposed changes on SECP make emergency energy plannirg a
mandatory activity. While we wholeheartedly agree with the need
for this activity. Senator Nickles should be advised that 3his
will be an expensive undertaking. We would endorse the recommended
changes in the legislation for SECP and EES.
htiOI Broadway Extenstun • Oklahoma City. Ohiahoma T:U 1H-^2H
Telephone: 405-fl43-9TT0 • Teie.x: 350352
153
The Institxrtional Conservation Program is providing much needed
cissistance to the infrastructure of schools and hospitals across
the state. We would endorse the recammended changes in the legis-
lation for this program.
The Weatherization Assistance Program provides home energy conser-
vation measures to qualified residences. We would endorse the
recommended changes in the legislation for this program.
I believe it is important that Senator Nicides be advised of the
following concerning these programs and their impact on Oklahoma:
1. The Weatherization Assistance Program is designed to reduce the
energy costs for qualified residences. The formula for the
distribution of these furds was skewed intentionally by the
Department of Energy in favor of northern states. The attached
position paper outlines the issues.
Wte reodnnerri that Senator Nickles request that the SecrHtary of
FnPTTjy create an equitable distxiixitiai of the funds.
2. Existing legislation and the legislation, as proposed, allow
that furnace efficiency modifications are eligible activities
under the Weatherization Assistance Program. In southern
states, air conditioning operating costs are a significant
portion of low- income persons' energy expenditures; however,
the law does not allow that air conditioning or cooling effi-
ciency modifications can be made in order to reduce both the
energy usage and ■^e cost to our clients.
Vb reccmnend that Senator Nickles seek charges in tiie law and
in DCE regulatiCTTS to allow for efficiency modifications on
coolirig-related equipnent in the same manner that furnace
efficiency modificaticns are addressed.
If you have any questions, please contact Sherwood Washington of
my staff, at (405) 841-932,6.
Donald D. Paulsen
Executive Director
DDP/mjw
Enclosures
154
Position Paper
WEATHERIZATION ASSISTANCE PROGRAM
ALLOCATION FORMULA
Oklahoma Department of Commerce
6601 Broadway Extension, Building #5
Oklahoma City, Oklahoma 73116-8214
(405) 843-9770
155
INTRODUCTION
The Low-Income Weatherization Assistance Program administered by the U.S.
Department of Energy (DOE) has, according to 42 USCS §6861, two basic objectives.
They are:
1. To aid those persons least able to afTord higher utility costs (the adverse effect
of higher energy costs); and
2. To conserve needed energy.
To accomplish these objectives. Congress directed the Secretary of Energy to:
"...allocate financial assistance to each state on the basis of the relative
need for weatherization assistance among low-income persons throughout
the states, taking into account the following factors:
A. The number of dwelling units to be weatherized;
B. Climatic conditions in the state respecting -energy-conservation,
which may include consideration of annual degree days;
C. The type of weatherization work to be done in various settings; and
D. Such other facto.-s as the Secretary may determine necessary in order
to carry out the purpose and provisions of this part."
The allocation formula devised by DOE to fulfill Congressional intent is defined in
10 CFR Part 440.14 (b) (2). The elements of the formula are as follows:
(i) the square of the number of heating degree days in a state multiplied by the
percentage of total residential energy used for space heating;
(ii) plus the square of the'number of cooling degree days in the state multiplied
by the percentage of total residential energy used for space cooling;
(iii) multiplied by the sum of the number of low-income, owner-occupied dwelling
units in the state and one-half renter-occupied;
Page 1 of 4
156
(iv) divided by the sum of the results produced for all dates by the computation
outlined in paragraphs (i), (ii) and (iii); and
(v) multiplied by 100.
If the formula is designed to give equal treatment to each program objective, then it
is logical to assume that there would be an obvious connection between the climatic
c&nditions and number of eligible dwelling units within a state and its allocation.
Unfortunately, the relationship between a state's allocation, as determined by the
current formula, and the number of eligible dwelling units within its borders is not
readily discernible. The purpose of this paper is to call attention to the inadequacy of
the present formula and to suggest a more equitable formula for allocating funds to
achieve the objectives of the program.
DISCUSSION
When states are categorized as shown in Table A, it becomes apparent tha. the
current allocation formula denies states in the Southern and Western regions of the
nation an equal opportunity to contribute to the achievement of program objectives.
In Fiscal Year 1985, states in the South and West received allocations totalling
$49,453,940 — 26 percent of all funds allocated, even though their combined eligible
population accounted for 56 percent of all eligible dwelling units. As the following
charts indicate, the disparity can be even greater on a state-by-state basis.
Page 2 of 4
157
DOLLARS ALLOCATED PER DWELLING UNIT
Texas
$2.89
Louisiana
$2.54
North Dakota
Montana
Texas
Louisiana
ELIGIBLE UNITS
ALLOCATIONS
$ ALLOCATED
PER UNIT
36,900
47,340
858,120
319,380
2,276,904
2,153,804
2,481,398
813,609
$61.70
45.49
2.89
2.54
The current allocation formula contains three basic elements. They are heating and
cooling degree days, the percentage of total residential energy used for heating and
cooling, and the number of eligible dwelling units. The discrepancy between the
amount allocated and the number of eligible dwelling units is the result of the
Page 3 of 4
99-832 - 89 - 6
158
emphasis placed on heating and cooling degree days by the current formula. Within
the formula, the total number of heating degree days and the total number of cooling
degree days for each state are squared before calculation of relative allocation
percentages begins. Squaring exaggerates the importance of degree days and
significantly reduces the impact of the other two elements on the amount allocated to
each state.
RECOMMENDATION FOR CHANGE
The current formula biases the distribution of program funds in favor of Northern
states. The rationale for this bias is that: (1) Northern states use more energy for
residential heating, and (2) weatherization costs are higher in the North than in the
South and West. Unfortunately, such a raticnale provides insufficient justification
for skewing the distribution of funds to the degree caused by the squaring of degree
days. Regional differences in the amount of energy used for residential heating are
already reflected in the actual number of heating and cooling degree days (see Table
B) and the weights assigned to energy used for heating (.578) and cooling (.033)
within the formula. Furthe.'-more, a study completed by the Economic Opportunity
Research Institute in March, 1986, revealed no significant regional difTerences in the
average expenditures per unit weatherized. For example, in Fiscal Year 1984, North
Dakota spent an average of $976 per unit, while Texas averaged 51,036 per unit
weatherized.
It is therefore recommended that the Secretary of Energy take whatever action is
necessary to eliminate the squaring of degree days from the Weatherization
Assistance Program allocation formula. The formula would then more accurately
reflect the difTerences in the need for weatherization among states in terms of related
energy usage and the number of eligible dwelling units; encourage more balanced
achievement of program objectives; and provide states in the South and West with an
equal opportunity to contribute to the achievement of these objectives.
Page 4of 4
159
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162
EEPC
ENERGY AND ENVIRONMENTAL POLICY CENTER
HARVARD I \l\ tRSIT^ • JOHN F KENNEDY SCHOOL OF GOVERNMENT
79 JOHN F- KENNEDY STREET ■ CAMBRIDGE, MASSACHUSETTS 02B8
ANSWERS TO THE QUESTIONS FROM THE
SENATE SUBCXDMMnTEE ON ENERGY REGULATION AND CONSERVATION
Henry Lee
Executive Director
Energy and Environmental Policy Center
1) What is the role of the state energy offices in the dissemination of energy research and
development?
I am not sure what you mean by the question. Are you referring to disseminating
R&D in the way the North Carohna Alternative Energy Council funds small R&D projects
in the state or are you talking about disseminating the results of R&D?
State governments do not usujdly do a good job funding R&D because they find it
difficult to attract and maintain technical expertise at the agency level. Successful state
R&D operations tend to structure themselves as quasi-public corporations or authorities -
- one step removed from the normal state government strucmre.
The advantage of state R&D "corporations" is that the money usually goes to
research which is perceived as providing local benefits. On the other hand, State programs
find it very difficult to get the economies of scale that are needed to make significant
breakthroughs.
Rather, I would urge the Committee to focus on disseminating the results of R&D.
In other words, have DOE maintain the lead in funding R&D and then establish a liaison
163
operation with the states in which the results of R&D are disseminated to the states for
further dissemination to users.
EPA has estabhshed such programs for hazardous waste clean-up and source
reduction technologies. In some instances, EPA hires a consulting company which is
responsible for providing the information to the states. In others, it sets up regional
computer banks, from which state officials can obtain substantial amounts of information.
I would think DOE could establish a similar operation for conservation and smaller-
scale production technology.
2) Do weatherization programs ease the value of substandard owner-occupied housing?
To the extent you lower the cost of operating a home, you increase its value. Also,
since many of these improvements are capital intensive, the asset (ie. the home) increases
in value.
For many homes, however, non-energy investments may at the margin be more
valuable. For example, if you have a home that needs a thousand dollars worth of
plumbing, but instead federal monies are used to install storm windows, you have not made
the optimal investment.
This questions touches on a very tough issue, ie. should the federal government
provide housing assistance which includes an energy component or do you provide energy
assistance which happens to improve housing values.
164
3a) Should there be more interaction between state energy offices and environmental
agencies?
Yes. The experience in New York has demonstrated quite clearly that there are
enormous benefits to be obtained ft'om persuading state energy officials to sit down with
their environmental counterparts. In most states, very little of this occurs, even though in
almost every instance states will claim otherwise.
Further, as I mentioned in my testimony, energy and environmental issues are now
inextricably linked in the public's mind. If the Committee wants to put out a bill that will
have strong public support (ie. have a good chance of obtaining reasonable authorization
levels), then it should stress this linkage.
3b) Is improved energy efficiency a reasonable policy for improving environmental air
quality?
In areas in which a marginal kilowatt of electricity is generated by coal (ie. the
Midwest and parts of the Southeast), there is a direct correlation between energy efficiency
and reduced air emissions. I am told that TVA has just finished a major study
demonstrating this fact and that the state government of Michigan has done some research
on this issue. In areas in which the incremental kilowatt hour is produced by natural gas,
the relationship is not as strong. In other words, every BTU saved does not have the same
effect on emissions. States should integrate their energy conservation and emission
reduction planning processes.
165
4) What suggestions would I have for improving existing programs and developing
potential new programs?
I have made a number of suggestions in my original testimony. My basic message,
however, is that you ought to give states flexibility to pursue those options which can
produce the greatest amount of energy savings. To insure compliance, I have suggested that
Congress mandate an effective evaluation system and that a portion of the funds available
to states be awarded to those states which have produced the best results. If state energy
offices know they will be evaluated and their funding will be partially tied to the results of
this evaluation, they will do a better job than if they were being judged based on
compliance with a laundry list of programs mandated by either Congress or DOE.
A key to this approach is that the evaluation be fair and not be done by the states
themselves.
The only suggestion in my testimony that I would change would be to have the
evaluation process every three years rather than every two. It takes a couple of years to
build the human capital and the continuity to effectively deliver conservation programs.
If I was to gaze into a crystal ball and predict what programs will be effective in the
nineties, I would suggest that programs linked to other public concerns will do better than
those which are not linked. One of the reasons electricity efficiency programs are doing
well is that they are perceived as a way of avoiding the externalities associated with building
new power plants. Effective energy efficiency programs should be linked to enviroimiental
goals. Another emerging focus is transportation policy , an area the State Energy Offices
have neglected heretofore. I suspect that transportation decisions in the nineties will be
166
influenced to a much greater degree by energy and environmental concerns than they were
in the eighties and seventies.
5) What impact with the merger of all existing state programs into a single program have
on the quality of services and energy savings?
As mentioned above, I think it will dramatically improve services, since states will
be judged on results.
The only reason to mandate specific programs is the belief that state govenmients,
if left to their own devices, will not adopt the most cost effective approach, ie they will
neglect good programs for provincial reasons. While there will be instances of this attitude,
they will be rare. Further, under my recommendations, they would be costly, since states
would end up with a program which would not compare well with those pursued by other
states. Ergo, they would lose funds.
Another concern is that Congress will find it less appealing to authorize funds to
states, if there are no requirements. Again, if one believes that there are national security
benefits as well as regional environmental benefits inherent in improving energy efficiency,
then one would want to maximize those benefits.
I am, however, realistic enough to know that a completely flexible program, will
probably gamer less of a constituency and be less likely to receive sufficient authorizations.
Therefore, while I may continue to espouse the goal of maximum flexibility, the politically
wise choice probably lies somewhere between the existing array of programs and my hands-
off approach.
167
]s^J^<SEQ?Natiancd Association of State Energy Officials
Chtlrmut
W/IcA Bt*¥tr
(llllmli)
Immtdlttt P—l Chtlrmtn
(Htm Yorti)
Vht Chilmivi
Dr. DotfU E. Ullimn
(Utryltni)
Tnuunr
Ctttritt J. Clinton
(DItlHol ot Columbit)
S»crtt»ry
Ct)*rry L Duckm
(Arkinttt)
Piul Burnt
(QtoraH)
AMr* Qlntbtrg
(Arttoni)
Chirm a lmbe*chl
(Clltomit)
BobJtekten
(Uluaurl)
Vtn Jvnlnn
(Mentvn)
Shtnn M. Po»ird
(Uttuehuitlti)
Carol Tomfrl
(Tmu)
niofivd Wtlton
(WmKlngton)
BncutlM Olrwcfor
Fnnk SIthop
CouniH
J»Ht*y C. ^m»r
Dunom, Wlnbmra, Ullhr
tPwnbrett
ItlSM.Slrtt.N.W.
amnaoo
W§§hlngton, OX. 20036
(tn) 497-9370
May 23, 1989
The Honorable Howard M. Metzenbaum
Cbairman
Suboommittea on Energy Regulation
and Conservation
Committee on Energy and Natural Resources
SH-212 Hart Senate Office Building
Washington, D.C. 20510
Re: Hearing on S. 247 /Response to Questions
Dear Chairman Metzenbaum:
On behalf of the National Association of State
Energy Officials (NASEO), I am enclosing responses to the
written questions which were directed to Carol Tombari
and Cherry Duckett aa a result of the hearing held on May
2, 1989, to discuss the "State Energy Conservation
Programs Improvement Act of 1989." Both these witnesses
testified on behalf of NASEO.
Thank you for your strong support of the state
energy programs, which S. 247 will improve.
ccj Mitch Beaver
Chairman
Frank Bishop
Executive Director
Carol Tombari
Cherry Duckett
J^^phom20a-639-a?t9 6t3 C Sf/wt AfW, ShFloor, Wbahtngtor, DC. 2O001
168
A. ftpfiWBRS OF CHERRY DUCKETT. DEPUTY DIRECTOR. ARKANSAS
TMmiSTRIAL DEVELOPMENT COMMISSIOM. TO QUBSTIOHS RESULTING
FWQM MAY 2. 1989. HEARING TO DISCUSS THE "STATE ENERGY
COKSERVATION PROGRAMS IMPROVEMENT ACT OF 1989"
QUESTION 1» Other witnesses and DOE suggest that the State Energy
Advisory Board should have fewer State Energy Officials and more
members from Federal labs, utilities/ regulatory agencies/
financial institutions, and the private sector.
* Do you agree that communications would be enhanced
by a broader membership?
* Bow do you perceive the role of the State Energy
Advisory Board and how will it help us to achieve a
balanced national energy policy?
ft^SWERt Section 6 of S. 247 creates the State Energy Advisory
Board, which as presently drafted, would include energy directors
as fifty percent of the membership. Other representatives would
include at least one director of a State Weatherization program,
and other representatives would include "those who have
experience in energy efficiency or renewable energy programs for
the private sector, consumer interest groups, utilities, public
utility commissions/ educational institutions/ or research
institutions." The State Energy Advisory Board thus would
include representatives from this broader array of interests.
A group broader than the one presently suggested would
be counter-productive. The state energy offices have a unique
role in the development and implementation of national energy
policy. A comparable board has been created by EPA, which
includes representatives from each region of the United States.
In the EPA example, they meet with the Administrator and his
designees on a regular basis. It must be stressed that the
states are not simply another interest group when it comes to
energy policy. The state energy offices are concerned not only
with state conservation programs, but energy research and
development programs/ siting of electric plants and transmission
lines / siting and development of natural gas lines, nuclear waste
disposal and transportation, development of new technologies,
energy emergency preparedness, etc. The states are charged with
actually implementing programs. The reason the Board was
suggested to be broader than the EPA analogue was so that these
other individuals could present their views. Yet it must be
stressed that these individuals are not generally responsible for
implementing programs and managing energy policy on the state
level. While we believe communications with these other groups
and interests is important it should not have the effect of
involving the Board in a morass of other issues.
169
- 2 -
The aecond part of this question concerns the role of
the Board. We believe that the Board ia extraordinarily
important. One of DOE's major problems over the past few years
has been a lack of communication with the states on many issues,
ranging from these energy conservation programs to nuclear waste
transportation. While there is no doubt that Admiral Watkins and
his able staff have changed the entire tone of the Department to
one of openness, the institutionalization of a communications
link between the Department and the states will help us move
forward in developing a sensible national energy policy. The
states are closer to the range of practical, in-state energy
problems, and as such have a unique view on what is both
practical and achievable.
The energy offices really serve as the foot soldiers in
the war waged to address our energy problems and examine our
energy future. The states can learn from DOB and DOE can learn
from the states. The states have been developing innovative
energy programs and the Board will help transfer these ideas.
The role of the states as the extension agents of much
of the energy R&D that is disbursed to small and medium-sized
businesses is also very important. One role of the Board would
be to work with the Department and the DOB labs to relay what hes
been learned in terms of the needs of this group of entities that
will need more support if we wish to become more competitive and
also to use the technologies devised by DOB's research program.
OUBSTIOM 2. DOE suggests in its statement that a requirement for
emergency planning should not be under a conservation program,
but should be a free-standing document or made a part of other
emergency planning.
* Do you think this is a reasonable suggestion?
* Do you see any disadvantages?
ANgWBR! In general we agree with DOB to the extent that we do
not see a need for the actual energy emergency plan to be
included as part of the SECP plan. In other words, the energy
emergency plan should not have to go through two approvals at the
state level. We would suggest a technical amendment to S. 247 to
ensure that these dual approvals are not required. We have
worked with DOB's energy emergency office staff in developing
language that we will submit to the Subcommittee in the near
f utura .
We wish to clarify, however, that these energy
emergency plans will be submitted to DOB for informational and
coordination purposes only.
OXJESTIOM 3. DOE believes that an across-the-board state energy
conservation goal of a 10% reduction in energy consumption for
170
- 3 -
each Stats by 2000 is "unrealistio^ unceasonabla and
oounterproductiva . "
* Do you agree f and do you think that the goal should
be more flexible to reflect differences among
conditions in the states?
AMSWERi It is very in^ortant to have a goal for the year 2000.
We do not wish to suggest that the states will collectively snap
their fingers and achieve a 10% reduction. It will not be easy,
and it will be harder for some states than others. On the other
hand/ as a nation we must try to achieve significant energy
efficiency inqprovements and it is achievable. Cooperation and
coordination, as well as the necessary commitment of both federal
and state resources, will be required to achieve this energy
savings goal.
QDKSTION 4. DOB suggests that the mandatory programs of SBCP be
made discretionary to give states greater flexibility. Do you
agree?
* Are there any programs that would be better served.
by maintaining their mandatory status? '
'f.
AMSWBRt As a general issue of federal-state relations, states }
would generally support maximum flexibility. On the other hand,
with respect to the SBCP mandatory programs it is generally felt
that these are appropriate as they are generally constructed. In
fact, to the best of our knowledge and belief, the right-tum-on-
red mandatory SBCP feature appears nowhere else in federal law,
and we all generally feel that while this has been implemented we
would be uncomfortable with any "backsliding" in this regard.
The states feel that all of the states should engage in energy
emergency planning, and that it should be mandatory on public
policy grounds. For example, if state set-aside programs are not
consistent, and an energy crisis occurred, then severe interstate
shifting of product supplies might occur which could create
unwanted and unneeded restrictions on fuel supplies for essential
services. Energy emergency planning and coordination is a very
iinportant insurance policy for our nation.
QUESTION 5. Could you discuss the role of the state energy
offices in the dissemination of energy research and development?
AMSWBRi The energy offices work closely with many of the DOB
labs, as well as with DOE Headquarter ' s offices involved in R&D.
The energy offices have worked especially closely with Oak Ridge,
Sandia, Lawrence Berkeley, Argonne and Pacific Northwest labs.
The Office of Buildings and Community Systems, under the
Assistant Secretary for Conservation and Renewable Energy, has
also worked closely with the states. Many of the energy offices
see themselves as the prime dissemination vehicle for energy R&D
to businesses and the public at large. The labs do not have
sufficient outreach staff, nor the constant contact with the
171
- 4 -
businasB community that the energy office* have. The energy
offioeg talk to each other and talk with the labs. There le far
more that can be done and should be done. We hope that the State
Energy Advisory Board can help in this area, xn conjunction with
the new level of communication with the Department.
B. ANSWERS OF (j^BOT. TQMBART . DIRECTOR. GQVgRMQR'S BMERflX
Management gRNTRR. to oiiEgTions resui^timg from may 2. 1989,
gSgjgfl ii^A KlSrSsS 45E^.igTATg'ENg5GyPnti5RwIVTQN PROGRAMS
IfffRffYBMBHT ^^-"^ Q^ ^^8^"
QUESTION 1. In their statement DOE maintains that oil overcharge
funds "provide ample resources" for state energy conservation
programs. Would you agree with that statement?
* If so, when would you expect the funding situation
to change?
* If not, what funding levels do you expect to have
available for programs in the future?
Follow-up:
* Would you please provide the subcommittee with data
to support your position.
ANSWER! We could not be in greater disagreement with DOB on this
issue. The short answer is that the Department is simply wrong.
As the charts which are included below indicate, the oil
overcharge refunds received by states since 1981 total
approximately $3.5 billion. 0£ this amount, £22co!i($2.1 billion)
can only be used for the State and Local Assistance Programs
(SLAP) and the Low-Income Home Energy Assistance Program ( LIBBAP ) .
The Stripper Well funds ($1 billion), and other crude oil cases,
including Texaco (S4 30 million in future funds), can also be used
for the aforementioned uses, bridge and road repair, etc.
The fact of the matter is that over 95% of the refunds
received thus far have been allocated. Furthermore, the SLAP
programs, including SBCP, BBS, ICP and Weatherization, have been
cut from a high of $557.6 million in FY' 79 to $200 million in
FY '89. The funds have remained at the $200 million level during
the last three federal fiscal year*. There has been no inflation
increase. The LIHEAP program has been cut from $2.1 billion in
FY '85 to $1,383 billion in FY '89. The Administration has
proposed a cut in this program to $1.1 billion in FY '90.
In short, if you add up the cumulative c\fX^ from the
base years in the LIHEAP and SLAP programs you exceed the oil
overcharge refunds received by states by over $900 million.
172
- 5 -
In addition, while $3.5 billion has been delivered to
the states for restitution to injured parties in oil overcharge
refunds thus far, the future distributions are very limited. The
TaxacQ casa will provide $430 million through 1994 and the Cit^ies
Sarviea case will provide $60 million over 8 years (if the
proposed settlement is finalized).
It should also be stressed that these oil overcharge
refunds were provided to states in order to compensate classes of
consumers injured by oil overcharges in the 1970 's. Cutting
federal funds because of the existence of oil overcharge refunds
turns the concept of restitution on its head. By supplanting
federal funds with oil overcharge refunds, you are eliminating
restitution to injured consumers.
Finally, once funds have been allocated by the states,
which involves approval by the Governor and usually the
legislature as well as DOE, states cannot easily reprogram funds
in light of federal budget cuts. In addition, to reprogram such
funds would violate the court orders in the Exxon and Stripper
Well cases, which mandate that these funds be used to supplement
and not to supplant federal and state funds.
The chart below illustrates the cumulative reductions i
A.
ABPropriflt4gn8
Reductions
FY
'85 - $2.10 billion
FY
'86 - $2.01 billion
•• $90 million
FY
'87 - $1,825 billion
- $275 million
FY
'88 - $1.53 billion
- $570 million
FY
'89 - $1.38 billion
- S720 million
Total Reductions
- $1,$?? tpUAiaa
B. S^te and Local Assistance Proaram fin
millions o
ropriations
f dollars)
Appj
Heatheri- SECP
BBS
ICP
TOTALS
Total
zation
Reductions
FY'79
$199 $47.8
S10.7
$300.1 •
■$557.6
FY'80
199 37.8
25.0
143.8 >
■ 405.6
$152.0
FY'Si
175 30.4
20.6
150 .
. 375.4
162.2
FY '82
144 24.0
9.6
48
• 225.6
332.0
FY '83
244.9 24.0
10.0
97.6 .
• 376.5
181.1
FY '84
190.9 24.0
10.0
53.3 -
■ 278.2
279.4
FY'85
191.9 23.5
9.8
47.0 -
• 272.2
285.4
FY'86
182.0 17.9
7.3
44.9 ■
• 252.1
305.5
FY'87
161.4 9.4
4.0
25.2 ■
• 200.0
357.6
FY'88
161.4 9.4
4.0
25.2 •
• 200.0
357.6
FY'89
161.4 9.4
4.0
25.2 >
• 200.0
357.fi
173
- 6 -
Total Reductlona - s?.79 billion
QUESTION 2. DOE Buggests eliminating Bubeection (11) regarding
the protection of consumers because they feel it is peripheral to
conservation. Do you have a problem with eliminating this
proposed discretionary program?
AMSWBRi While we certainly believe that consumer protection is
is^ortant/ we would not be averse to eliminating this provision*
It should be noted^ however/ that this provision is from the
existing statutory language in the Supplemental State Energy
Conservation Program.
QUESTION 3. Other witnesses, as well as DOB/ suggest that the
State Energy Advisory Board should have fewer State Energy
Officials and mors members from Federal labs, utilities,
regulatory agencies, financial institutions, and the private
sector. Do you agree that communications would be enhanced by a
broader membership on the Board?
* Would you agree with the DOB proposal to limit the
membership of state energy officials to 25 percent
of the Advisory Board?
ANSWER; As we responded to Question 1 to Ms. Duckett, we believe
that it is extremely important to maintain the present minimum
number of state officials on the Advisory Board. We hope to work
with the Subcommittee and the Department to develop a Board which
is of a reasonable size and composition.
QUESTION 4 . DOB suggests that the mandatory programs of SECP be
made discretionary to give states greater flexibility. Do you
agree?
Follow-up:
* DOE suggests that states be allowed to develop their
energy emergency plan as part of their other
emergency planning or as a free standing document.
Could you comment?
* Should energy emergency planning be a mandatory
activity?
ANSWER! Please see the responses to Questions 2 and 4 by Ms.
Duckett .
QUESTION 5. The Committee hears a great deal regarding the
linkages between energy efficiency and economic development. Can
you discuss this linkage and suggest ways the legislation might
help to strengthen this linkage?
I
174
- 7 -
AMSWBRi The United States ueea more than double the amount of
energy aa a percentage of GNF as the Japanese, with West Germany
only sliahtly less energy efficient than Japan. The fact is that
U.S. business must become more energy efficient in order to
survive In the global marketplace. In addition, a substantial
amount of our trade deficit is attributable to energy
iii^ort8( approximately 28% in 1988, or $32.9 billion). This
legislation would promote energy efficiency programs in the
business sector and would, most importantly, allow innovative
financing of energy projects that could be used by the business
sector. For exao^le, Mew York and Massachusetts established
energy audit programs for businesses of all types. In the New
York State program the audits were conducted mostly be r6tir«d
engineers. Over 11,000 audits have been performed. New York
then uses oil overcharge refunds to create a zero interest loan
program for these businesses. The energy savings estimated by
the energy office has been on the order of $50 million per year.
Programs throughout the country Instituted by energy offices
focus on the link between energy efficiency and economic
development*
QUBSTION 7. What impact do you perceive the merger of the BBS
and the SBC? will have on the two programs?
AKSWBRi The impact will be minimal since almost all of the
energy offices operate the programs together. The merger will
also increase administrative efficiency. A technical amendment
will be required to merge the present funding formula for each of
the programs. The SECP funding formula includes an allocation
based upon energy savings, while the BBS formula does not include
this provision. This is a problem that can be solved.
QUESTION 8. Do you believe that a State Energy Conservation Goal
of a 10 percent reduction in energy use by 2000 is realistic?
Follow-up:
* In the state of Texas, what steps would be necessary
to achieve a 10 percent reduction in energy use?
ANSWER I See the response to Question 3 directed to Ms. Tombarl.
With respect to Texas, we believe that by targeting energy
efficiency in large institutional buildings, including capital
retrofits we can make great progress. In addition, improving
energy efficiency in new building construction should produce
significant savings. The Texas Energy Management Center is
working with architects to achieve this goal. We have also
worked very closely with the industrial sector and that
cooperation is producing, and will produce, more energy savings.
175
National Association for State
Community Services Programs
EXECUTIVE OFFICERS
Chairperson
Ann Kagie
Utah
Vice Chairpersons:
Evelyn Hams
New York
Cathy Chandehan
Wisconsin
Charles McCann
Missoun
Susan Madian
Colorado
Secretary
Joseph Barker
West Virginia
Treasurer
Eddie Cunn
South Carolina
Executive Director
Marjone J Witherspoon
BOARD MEMBERS
REGION I
Cwen PelleOer
Massachusetts
REGION II
Bemice Shepard
New Jersev
REGION III
Fay G. Uhr
Vii^nia
REGION tV
Susan Cook
Flonda
REGION V
Peter Yelorda
Michigan
REGION VI
Thomas Green
Arkansas
REGION VII
Brenda Bostic
Nebraska
REGION VIII
Bill Verbeten
Colorado
REGION IX
Theresa Speake
California
REGION X
Peggy Jo Mihala
W^ington
CSBG Chair
Shirley Dykshoom
North Dakota
Weathenzabon Chair
Eldon Hattervig
Mtssoun
444 North Capitol Street. NW
Suite 318
Washington. DC 20001
202/624-5865
May 30, 1989
Ms. Leslie Black
Professional Staff
Senate Coininittee on Energy
and Natural Resources
364 Senate Dirksen Office Building
Washington, D.C. 20510-6150
Dear Ms. Black:
Enclosed please find responses from Bill Concannon,
Massachusetts, to the further questions posed by the
Senate Subcommittee on Energy Regulation and
Conservation.
If the National Association for State Community
Services Programs can be of further assistance please
do not hesitate to call.
Enclosure
176
QUESTIONS FROM THE SENATE SUBCOMMITTEE
ON ENERGY REGULATION AND CONSERVATION
FOR WILLIAM L. CONCANNON
MASSACHUSETTS EXECUTIVE OFFICE OF COMMUNITIES AND DEVELOPMENT
AND RESPONSES
Question 1, DOE suggests the elimination of the 40 percent
materials requirement under the Weatherization Program. Would
you oppose its elimination, and if so why?
Follow-up: * DOE is concerned about the costs and delays
involved in a case-by-case review of waivers. Do
you see that as a legitimate concern and how
could such a problem be solved?
Response To 1. While many states would certainly be able to
handle such freedom, it is questionable that a complete
elimination of the "materials installed requirement" without an
acceptable performance-based substitute could be considered good
public policy. NASCSP would be willing to work with USDOE to
develop criteria to address both the need to maintain a certain
performance standard and the legitimate concern about
administrative delays to review each waiver on a case-by-case
basis.
Question 2. How can improvements in efficiency be utilized to
promote economic development in the states? Should state energy
offices work with economic development agencies within the states
to promote development through conservation?
Response To 2. Weatherization, as a construction management
industry, has an estimated economic multiplier effect of three,
which illustrates the inherent economic benefit of the program.
Specific strategies for economic development could work well with
the Weatherization Program. New technologies which are easily
transferred to the private sector, development and manufacture of
weatherization materials, and the subsequent creation of jobs in
these areas could enhance the economic benefits of the program.
However, any economic development strategy should be fully funded
from non-weatherization sources so as not to restrict or inhibit
the main purpose of the program.
177
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Question 3. What do you see is the role for DOE in assisting
with the evaluation of programs, if any? Should there be a
common methodology for completing these evaluations throughout
the states?
* Do you feel these evaluations could be used to
reward states for successful programs?
* What system does Massachusetts currently employ
for conducting evaluations of weatherization
programs?
Response To 3. There must be consistent criteria for analyzing
state weatherization effectiveness. The greatest value to
continual evaluative studies comes from the data, which enables a
state or USDOE to make intelligent policy decisions regarding the
future direction of the program. Because of the natural
differences of state weatherization programs and the climatic
conditions endemic to their regions, it would be virtually
impossible to create an effectiveness evaluation which could
fairly incorporate the subtleties of those differences.
Therefore, any national evaluation would become subjective and
would not be desirable. NASCSP encourages the development by
USDOE of statewide evaluations with consistent methodology, but
would not support state rewards on the results.
Massachusetts currently uses fuel savings studies for conducting
evaluations of priorities for energy saving measures in clients
homes. The studies have been performed by an independent
subcontractor. On site monitoring of client homes with a base
line study and a follow-up study after installation of a measure
is the specific system used. Such studies have allowed
Massachusetts to implement a specific change in priority measures
from one heating season to the next.
In addition Massachusetts performs detailed program assessments
of subgrantee program operation, looking at every phase of the
program operation on the local level including the technical
aspects of the program as well as management, fiscal operations,
procurement and coordination with local subcontractors.
178
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Question 4. Many of the criticisms of the Weatherization
Program have centered on the lack of sophistication of these
programs and their use of unskilled labor. Could you comment on
this? What are the job training benefits to be gained from these
programs? Have private contractors learned from these programs?
Response To 4. The Weatherization program has built a
professional, innovative delivery network over the last twelve
years. Many states have incorporated state-of-the-art technology
and approaches into the svibgrantee provision of services.
Weatherization, in these instances represents the cutting edge of
residential conservation. State field representatives and
technical trainers and subgrantee weatherization personnel are
schooled in construction and energy conservation management
techniques and many have included some of the following
techniques into their state and local programs:
o Infrared thermography;
o Blower door instrumented audit technology;
o Heating systems' diagnostics and repairs; and
o Sophisticated protocol based fuel-use analyses to determine
the most cost-effective level of investments in homes.
Question 5. How effective are weatherization programs in
keeping the stock of affordable housing maintained for low-income
tenants? Are these programs effective in reducing the decline of
low-income housing stock?
Response To 5. Weatherization is an important part of the
strategy to maintain low-income housing in this era of
homelessness. Not only does a low-income client realize an
increase in comfort and a decrease in fuel bills, but
weatherization services also go to the heart of maintaining the
integrity of older housing. Heating system upgrades, window
repairs and replacement, and infiltration and other necessary
repairs all increase the viable life of low-income housing.
Strong landlord agreements maintain rental housing as low-income
housing stock in some instances up to ten (10) years.
Weatherization programs have a proven ability to leverage a non-
eligible owner's resources and other public or private funds to
enhance conservation services with other housing-related repairs.
179
WRITTPIN RESPONSE OF FRED TUCKB^, Executive Director
Little Dixie Corrmunity Action Agency, Inc.
Hur;o, Ok 1 ahoina
May 23, 1989
Question 1: Please describe the types of homes most likely to
fnil under the wea t her i zat i on program you currently administer.
What criteria is used to select these homes for
we a t h e r i z a t i o n ?
How inefficient are chese houses? How much energy is
wasted, on average, from these homes prior to
wea t herization?
Do you run into h ome s that you cannot weatherize
because they are too dilapidated? VNTiat measures are
taken for such units to provide some minimum energy
sav i ngs ?
Answer 1: Most homes selected for weatherization under our
progra'.i are older, poorly constructed frame liouses. They are
very drafty ana open and in many instances they were never
total 1 y comp I e ted .
In selecting the houses to be weatherized, we apply a point
system that is based upon rhe concept of doing the repairs that
conserve the greatest amount of energy, e.g., stop infiltration,
attic insulation, underpinning, etc.
The inefficiency of the home selected for weatherization can
best be measured by a comparison of the heating and cooling cost
before and after weatherization. On a limited basis, v/e believe
that a savings in the 20 to 30 percent range can be obtained.
This is a rough measure and does not take into consideration the
human factor of comfort, Ileal th, etc.
In those instances where a house is too dilapidated to work
on, an effort is made to find alternate housing for the family.
This is usually accomplished by moving the family into some form
of subsidized housing such as elderly, low-income. Section VIII,
and Farmers Home Administration Section 504 Program.
We atherization Is a vital part of housing repair and
rehabilitation, but it cannot do the entire job in the kind of
dilapidated rural housing we serve. Some of our clients live in
homes with no inner v/a 1 I s , or proper bathroom facilities.
We have one Housing Preservation Grant from Farmers' Home
Administration which allows us to do comprehensive structural
work and weatherization combined. For the 30 homes a year on
which we spend an average of 39,600 from all sources, we can
assure a safe, stabilized home for 10? 20? years io come. All
180
wea t he r i za t i on work really ought to be a part of a low-income
housing preservation strategy, but the resources simply aren't
there.
Question 2: The U.S. Department of Energy suggests that
oil overcharge funds "provide ample resources" for state
conservation programs.
• Do you agree?
• Do you see these oil overcharge funds as a long-term source of
funding for state funding for state conservation programs"
7
Answer 2: We do not agree that there are ample resources. The
weather i zat ion program has had to compete with other interests to
obtain a portion of the oil overcharge resources while the
Department of Energy we a t h e r i z a t i on appropriations have
diminished and now the oil overcharge funds are diminishing,
which eliminates the potential for oil overcharge funds as a
long-term source for funding wea t he r i z a t i on programs and the
overall result will be a rcductit^n of resources for
weather i zat ion purposes.
The report of the National Consumer Law Center we made
available for your Record is closer to the Department of Energy's
testimony today than to figures previously offered by the
Administration. Both agree that the funds are largely conmitted.
We rely on tliese quarterly reports the National Consumer Law
Center prepares under contract to Department of Energy. Their
surveys have always identified funding allocations made by
legislative or executive decisions for long term funding. Until
recently. Department of Energy reported only funds already
legally obligated by a state agency. The newer Department of
Energy reports are different. Unlike those used by Q^ID and the
Reagan budget documents, they also identify funds allocated but
unspent. The figures are getting closer; however, we have not
seen details of their analysis no s t a t e-by- s t a te breakdowns, so
we cannot resolve for the moment the arithmetical differences.
In fact, let us assume the Administration's numbers for the
moment. Say that something over S400 million is not yet
obligated from oil overcharge funds. You may not be aware that
the Administration has testified to the Labor Health and Human
Services Subcommittee that from available overcharge funds:
The S442 million L I HEAP cut from FY19 87
levels, plus the proposed $238 million for
PfigOO, cut can be made up.
181
Now we are to believe that in addition to the
G52 million annual cut we had to make up in
the state programs, some unspecified future
cut, perhaps the entire $200 million, can he
made up.
Over 5700 million per year would be necessary
to hold these five programs alone at the pre-
oil overcharge levels.
The National Consumer Law Center reports show little will be
added to oil overcharge distributions annually not as the bulk of
both cases has been distributed, and the rest flows over an
eight year period, much of it to the U.S. Treasury and not the
states .
In addition, there are many allowable uses for these funds.
States gave about half the Exxon settlement for low-income uses
and 28 percent of St r i pper We I I . These are creditable figures
and show the importance that states attach to our programs. But
the fact is, the money is largely gone.
Question 3: Department of Energy suggests elimination of the 40
percent materials requirement under the weatherization program.
Would you oppose its elimination, and if so, why?
Answer 3: The original intent of the requirement which was
proposed by the Senate Aging Corrmittee, was to guarantee quality
permanent investment for the client. It was probably an
appropriate reflection of the state of the weatherization art at
the time, in which insulation and storm windows were the most
effective measures.
We feel there should be an alternative way to assure that
the taxpayer dollar is being used in a cost-effective manner.
The Department's proposal provides for neither accountability nor
minimum standards of effectiveness. We feel Congress and the
public still have a right to know how weatherization decisions
are made. For states which drop the simple standard, a new
method of decision making, e.g., the new energy audit, which
includes certain minimum elements, creates the test for
expenditure of public funds. The bill provides for both
flexibility and accountability and should not be changed.
Department of Energy has helped develop new audit
techniques. Mo st audit proposals from states will be variations
on these models or RCS program audits. States must be required
to submit field test and technical data with their applications
which Department of Energy or its contractors or the labs can
review for completeness, but which cannot be repeated. Not all
states will apply, of course.
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182
We do not oppose the elimination of the 40 percent
requirement. The question also states that Department of Energy
is concerned about the costs and delay in reviewing/negotiating
the average material ratio during the plan approval process.
Depending upon Department of Energy's review/approval procedures,
such delays are very possible. We have three suggestions:
1. That only those states requesting an average
material percentage of less than 40 percent be required
to negotiate with the Department of Energy.
2. That the Department of Energy Support Offices be
given the authority to negotiate and approve material
averages of less than 40 percent. The Support Offices
are the most knowledgeable of regional economic
conditions and wea t her i zat i on needs.
3. That Department of Energy be required to approve or
set a specified materials average within a specified
time, otherwise the (State) proposed average is
automatically approved.
Question 4: Under Department of Energy rules, no measures
related to cooling efficiency are allowable. Can you please give
us some examples of the cooling measures you would like to see
authorized under the program? Please describe the Oklahoma field
tests of cooling measures funded under Department of Energy.
Answer 4: Question 4 asks for examples of cooling measures we
would like to see authorized:
Window air conditioning retrofits and replacement with
high efficiency unit(s)
Rad i an t ba r r i ers
Ceramic Insulating Coating
Question 4 also asks for a description of the Oklahoma field
test of cooling measures funded under the Department of Energy:
The field test will evaluate the effectiveness of installing
conservation measures to reduce electric cooling costs in low-
income homes.
This project will determine the energy savings and benefit-
to-cost of three technical approaches to improve residential
cooling efficiency. It will first examine the effectiveness of
using the combination of measures currently installed by the
Oklahoma Wea t he r i za t i on Assistance Program. These include
measures to reduce air infiltration, attic insulation, and storm
windows. Then, in combination with these measures, the project
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183
will test the value of adding an attic radiant barrier, or
replacing existing window air conditioner{s) with high
ef f i c i ency un i t ( s ) .
The project will provide state, utility, and local managers
with detailed analysis about which weat her i za t i on measures are
most effective in reducing residential cooling costs. It will
provide technical researchers with more information about how
homes operate in hot and humid climates and aid in the
development of better energy audits that are based on measured
energy use in actual homes.
We recommend to you that the Department of Energy be ordered
to put on its list of allowable measures the best available
technologies for guaranteeing health, safety, arid energy savings
in warm weather, and to keep that list updated as the test
results and other technologies are reviewed. Cooling systems
where they exist will nearly always mean window air conditions or
ceiling fans, and should be treated the same as heating systems
are treated in the program and replacement allowed. Ventilation
measures should be encouraged.
llov/ever. Congress' role should be to require I^epartment of
Energy action and allow the experts and the states to decide what
can work in this fast-changing field.
Question 5: Could you briefly describe the nature of the client
education necessary to maximize the benefits to low- income
families of wea t her i z a t i on materials installed.
Are follow-up visits necessary to ensure proper
maintenance of weat her i za t i on equipment?
V/hat is the average lifetime and payback period of this
weat her i zat i on equipment?
Consumer education is extremely important and clearly can
save energy. Proper use of a weather i zed building and its
heating or cooling systems can mean far greater energy
efficiencies than uninformed use of the building.
We regret that the limited wea t her i zat i on resources we have
in our own program does not permit us to undertake as extensive
education efforts as we would like. However, our crews do spend
time with our clients upon completion of the job, to show them
how to protect the materials installed and extend their life. In
addition, they discuss techniques for getting the best use of
heating or ventilation and of major appliances.
In discussion with my counterparts around the United States,
I find that the most extensive consumer education programs occur
where the local utility acts in partnership with the
184
wea t he r i z a t i on subgrantees. I would like to submit for your
records one excellent model program, this one a joint venture of
Wisconsin Electric Power and CAP Services of Stevens Point,
Wisconsin. In addition, the Department of Energy has compiled
materials that are very helpful.
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185
vices, inc.
CAP SERVICES, INC.
ARREARAGE REDUCTION PROJECT
In 1985, CAP Services approached Wisconsin Gas with a
proposal for a project targeted to low income customers in
arrearage. The project was designed to give these households
better control over their energy usage and an incentive to make
maximum use of this control. CAP felt that through conservation
many households could eliminate future arrearages by reducing
unnecessary consumption. The strategy proposed included a better
targeting of the ongoing weather i zat ion programs offered by both
CAP and WI Gas, the addition of a consumer education curriculum,
and an arrearage credit component which rewarded conservation
efforts by reducing arrearages.
After a series of meetings, CAP and WI Gas entered into an
agreement to initiate a pilot project to test the feasibility of
reducing past and future arrearages of Wisconsin Gas customers by
first, reducing consu.tipt ion , and then providing several options
for earning "credits" which could be applied against past
arrearages. Credits could be earned by either: r-.eeping current
on monthly bills (payment method); reducing consumption compared
to the previous year's usage adjusted for weather (conservation
method); or a combination of both (deluxe model)
ssistance: Client responsible for eliminating arrearage.
herization only: Client responsible for eliminating arrearage.
herization and Energy Conservation Counseling: Client
onsible for eliminating arrearage.
herization and Payment Credits: One thi cty-sixth< of
arage forgiven for each month the participant pays his or
current bill.
herization and Conservation Credits: Arrearage reduced by
cost of each therm saved on a weather-adjusted basis.
herization, Counseling and Payment Credit.
herization, Counseling and Conservation Credit.
herization. Life Style Counseling, Payment and Conservation
its (Deluxe method).
All participants were required to be low income and at
least two months in arrearage at the time of enrollment. Early
in the negotiations, it was decided that participants themselves
would choose the method they wanted to use to reduce their
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186
arrearage to encourage participation. There were two exceptions.
One was that the "deluxe" option was be limited to par-
ticipants whose gas service was shut-off at the time of their
enrollment but who would be reconnected if they agreed to
participate. The second was to limit conservation credits to
those Wisconsin Gas offices which did monthly meter readings
(Wautoma and Wisconsin Rapids). CAP felt monthly feedback to
clients on the savings achieved as a result of conservation
efforts was essential to successful implementation of the life
style counseling.
For participants selecting a payment or conservation
credit option, all collection efforts by the utility ceased upon
enrollment and their arrearage was placed into "holding".
Participants were informed, however, that collection efforts
would renew if they were dropped from the program or if their
bills during or after enrollment were not kept current.
Due to delays in receiving WI Gas corporate and Public
Service Commission approval, the project was not implemented as
early as originally projected. On August 1st, 1985, referrals
began being accepted from WI Gas and the project was implemented.
The project has since been refunded for a second year,
(7/1/86-6/30/87) and a third (7/1/87-6/30/88). Based on the first
year's experience, the number of options offered participants has
been reduced to four. Efforts are now being made to expand the
project into additional areas of the state.
Below are some of the initial results of the project.
1. 57% of the participants enrolled had never had their dv^elling
unit weatherized by either CAP or WI Gas.
2. The 211 participants enrolled the first two years wore 383,537
in arrearage when enrolled (an average of S396/household ) .
3. 528,564 in arrearage has already been eliminated through a
combination of cash payments and credits. 45% of Year I and 16%
of Year II participants have eliminated their total arrearages.
4. Only 6% of all participants have failed the program.
5. Participants enrolled in counseling in combination with any
other option reduced their energy usage 9.8% more than participants
not receiving counseling.
Attached is an interim report on the project coverino the period
8/1/85 through 11/30/87.
187
ARREARAGE REDUCTION PROJECT
July 1, 1987 through June 30, 1988
Interim Report: January 9, 1988
INTRODUCTION
CAP Services' Arrearage Reduction Project is funded 'by the
Wisconsin Gas Company. It began in 1985 to provide budget and
energy counseling to low-mcorae families in six counties in
central Wisconsin. The Project is staffed uith one energy
resource manager and a part-time data clerk.
The Project assists participating families m reducing home
energy consumption and in eliminating arrearages on past heating
bills. Tuo strategies are used to reduce consumption. One is
intensive in-home energy conservation counseling based on the
family's energy use patterns and the other is ueatheriiiation and
structural retrofit.
Energy conservation data measures each participant's energy use
prior to enrollment in the Project and compares it to their
current usage. Adjustments are made for the number of degree
days and curreat gas rates.
Arrearage reduction is addressed through enrollment in a special
budget plan and then offering tuo methods of earning credits
against arrearages. Payment credits are based on a fixed
payment amount (one-thirty-sixth of arrearage) being forgiven
each month payment is made. Conservation credits are based on
the dollar value of energy savings achieved. Some families are
eligible for both credit options.
To date, 290 participants have been enrolled (90 m Year I, 121
in Year II, and 79 m Year ill). Sixty have totally eliminated
their past-due amounts.
YEAR I PARTICIPANTS PROJECT-TO-DATE ACCOMPLISHMENTS
STATUS IN THE PROJECT:
- 90 participants were enrolled in Year i
- 82 (69%) uere referred and received uea theriza tion
- 41 (46%) completely eliminated their arrearage
- 12 (13%) moved from the Wisconsin Gas Service Area
6 (7%) failed the program.
- S35,208 of arrearages uere frozen upon enrollment
ARREARAGE REDUCTION: Year I participants reduced their frozen
arrearages by an average of 44.8% Credits uere given for
conservation and LIBP totaling $12,806. With an additional S2974
paid in cash, Year I participants eliminated a total of $15,780
of arrearages. This amount does not include the monthly budget
payments for families using the LIBP.
188
ENERGY CONSESVATION: Participants in the counseling
components of the ?i-oject saved an average of 7.3% more energy
than those who did not receive counseling.
YEAR II PARTICIPANTS FROJECT-TO-DATE ACCOMPLISHMENTS
STATUS IW THE PROJECT:
- 121 participants were enrolled
- 59 (31%) were reterred to weatnenzation
- 19 (16%) have completely eliminated their arrearages
- 25 (21%; people moved fron the Wisconsin Gas Service Area
- 13 (52%) of those uho moved made arrangements through the Project to
pay off their arrearages
6 (5%) people failed the program.
- $48,379 of arrearages were frozen upon enrollment
ARREARAGE REDUCTION: Total arrearage reduction for Year :I
participants is $12,734, with S9S33 as credits and $2951 as cash.
Participants reduced their arrearages an average of almost 26%.
ENERGY CONSERVATION: Participants in the counseling component
saved an average of 11.58% more energy than those uho did not'
receive counseling. Following ueathenzation. Year II
participants uho received intensive counseling saved an average
cf 8 times the energy of those uho did not receive counseling.
YEAR Hi PARTICIPANTS ACCOMPLISHMENTS - Data net yet available
FUTURE CONSIDERATIONS FOR THE PROJECT
The need exists to continually assess staffing levels and
activities. Many factors contribute to seasonal demands on atafl
time. These include the substantial numbei cl reiferrals occuri:i.-;
at the onset of the heating season and agam during the sprmg.
The need for i e-enrollomen t and adju:j taien t of budget payments"
also occurs in the early winter when energy assistjnce aid is
distributed. Activities bottleneck: at a time whei; tiiergy
conservation counseling is most effective but less time is'
available to addres." those needs intensively.
An additional factor effecting staffing levels is time required
fot monitoring and foUou-up activities. The number of
participants who require re-servicmg of their budget plan or
additional conservation counseling grows exponentially.
Customers may participate as long as three years.
A variety of patterns are emerging based on the the time spent
Within each component. The amount of time required to serve a
participant in the LIBP Only option is less than one who also
receives counseling. At the same time, renewal of the LIBP in
189
subsequent years requires less Lime than uhen the participant ua.
originally enrolled. A participant uho elects to receive
conservation credits similarly requires more time than one whu
uho does not. Many factors including the number ol times a
participant requires additional budget or energy counseling
within a year can have an impact on the overall costs of the
Project. Management is in the process of assessing the
comparative costs cf each component for the future.
99-832 - 89 - 7
190
Ai pm ol [he Arrearige Reduction Project, family members track their daily energy comumption habits on a poster at home
An energy-use chart on a refrigerator door. Conservation goals.
Kids and parents. A counseling program sponsored by Wisconsin Gas
has put them all together and made saving energy
A family affair
"I
I m learning a lot about how to save energy and
money at home. This will help me when I grow up."
Mike. 12. is not the only one in hrs household who is
learning to save energy and money. His 14-year-old
brother and his mother also are involved.
Mike's (amily is one of 90 in Adams, Outagamie.
Waupaca. Waushara, and Wood counties participat-
ing in the Arrearage Reduction Project, an experi-
mental program funded by Wisconsin Gas.
The Arrearage Reduction Project was developed
about a year ago by Wisconsin Gas and CAP Services,
a Community Action agency based in Stevens Point.
The project helps low-income district customers who
are at least two months behind in paying their gas bills
reduce their debts and become regular payers.
"The program is the most fantastic thing that could
have happened to us." says Mike's mother, Judy. A
single parent, she lost her full-time |ob while recover-
ing from surgery. Without any income, the unpaid gas
bills mounted.
"If it weren't for the arrearage project, my gas ser-
vice probably would've been disconnected. It gave
me a real b^eak when I needed ii to catch up and
showed me how to avoid getting behind again. "
191
Program participants are placed on a long-term
budget payment plan geared to their incomes and gas
usage.
The families also receive basic energy conservation
counseling to help decrease their current energy
consumption. Later, CAP Services weatherizes the
houses and apartments to further cut energy waste.
Past-due bills reduced
The participating families can reduce or eliminate
their past-due gas bills one of two ways. Through
"payment credits," the company forgives one-third
of the past-due amount for every 12 months they
continue making payments according to their budget
plans. With "conservation credits," one dollar is
deducted from the participants' healing arrears for
every dollar conserved in heating costs.
The one aspect of the projea that sets it apart from
other conservation programs is the emphasis on
energy counseling. Dave Lovejoy, CAP Services
energy resource manager, counsels arrearage project
families in their homes. The entire family gets
involved, particularly children, and the results in
energy savings have been dramatic.
"Dave gave us conservation literature and basic tips
on how to save energy and reduce our heating bills
using a team approach," said )udy. Instead of apply-
ing this information on a do-it-yourself basis, Judy
chose to have Lovejoy develop a specific conserva-
tion plan for her household and counsel her family at
home regularly. Forty-nine other families in the
arrearage project also chose this ongoing counseling
option. It usually entails five to 10 one-hour meetings
every one to three weeks.
"During counseling," Lovejoy says, "I describe
some quick, easy and inexpensive measures to reduce
energy consumption by about 10% to 20%." They
include: turning the thermostat down at night and
during the day; turning the water heater down or off
when no one is home; sealing air leaks in walls, doors
and windows; and closing off unused rooms.
Significant savings
Program participants are enthusiastically applying
these basic conservation steps and saving an average
of 15% on their monthly bills during the heating
season, Lovejoy said. Some participants are saving as
much as 26%. He noted that these figures may drop
due to changes in weather conditions and some
conservation practices, but significant energy savings
are still possible in the long run.
Judy has saved an average of 12% a month. She
opted to receive the conservation credits to help
reduce the $243 she owed. After being in the program
six months, she cut her past-due amount by about
$100.
On the average, families are expected to reduce
their arrears more than 33%duringthefirst 12 months
of the project, with some totally eliminating them
within the first six months. The conservation credits
are proving far more effective than the payment
credits in reducing arrearages for most of the
customers, Lovejoy said.
"The Arrearage Reduction Project is demon-
strating that families can achieve major savings even
before any weatherization work is done," Lovejoy
said.
He credits kids for being a key to the project's
success. "Children, especially those in their pre-
teens, surprisingly are very receptive to the energy
counseling. Teenagers usually are tougher to involve,
but their participation is especially important because
of the influence they can have on the younger kids."
Additional efforts
ludy's sons both took their energy conservation
goals very seriously. "Mybrother and I don't open the
refrigerator door as often or for as long; we shut off
lights and close the outside doors." says Mike.
"The boys also insulated their bedroom windows
and use less hot water," )udy says. "I didn't believe
they could be so energy conscious."
The program's benefits also extend beyond the
home. "The things we learn through our energy
counseling are helping my brother and me with our
energy studies in school and with earning energy
conservation merit badges in Boy Scouts," says Mike.
Getting kids involved in the arrearage project in-
creases the involvement of parents. The family mem-
bers list their individual conservation goals and log
their daily consumption habits on an "Energy Notes "
poster on the refrigerator door. The kids earn food
coupons from McDonald's and Hardee's restaurants,
and CAP "Energy Saver" t-shirts as rewards for
progress.
"It's just great!" says |udy. "We have familyconfer-
ences where we discuss our progress and make chal-
lenges to save so much a month, lis drawn us all
closer together. "
"The arrearage project helps people help them-
selves," Lovejoy says. "It's a real pride builder for
participants of all ages." He noted that the project
helps relieve families of financial and emotional pres-
sures by giving them the confidence and ability to im-
prove their situation.
"I hated to see my gas bills pile up, but 1 didn't want
to pay pennies when I owed dollars," )udy said. "And
I wouldn't beg my friendsor family for help. I wanted
to get myself out of this on my own."
Project participants say they have been astonished
by the savings they have achieved, Lovejoy said.
"Many of them now actually look forward to getting
their bills to see what they've saved whereas before
some wouldn't even open them. "
"I feel wonderful about what we've done so far
through the program," says Judy. "I know I'm notout
of the woods yet, but I can walk down the street and
say, 'Hey, I'm doing the best I can.' "
Lovejoy emphasized that Wisconsin Gas has been
192
"Energy Saver" t-shirts and free food coupons for McDonald's and Hardee's restaurants are
used to reward kids for conserving.
the major supporter of the project, providing funds,
referrals, conservation literature, budget billing and
assistance wnh monitorrng participants' monthly bills
and energy consumption.
"As far as we know," Lovejoy said, "there is no
other program in the country thai is using m-home
energy counseling, wealhenzatton and arrearage re-
duction credits to resolve this problem."
Kurt Koepp, Wisconsin Gas district coordinator-
.vealherization programs, said the company plans to
extend the program another year.
"We'll analyze which combination of the project's
main components — the do-it-yourself energy con-
servation, ongoing conservation counseling, credit
incentives and weatherization — works best and
then gradually extend that combination disiriciwide.
The company may adapt some aspects of the project
for its Milwaukee-area programs as well."
"With weatherization of the homes in progress, '
Lovejoy says, "company customers like )udy and her
famriv look forwara to even lower ^uel costs next
winter and to better control over their energy bills in
the future. ' ^
Appendix II
Additional Material Submitted for the Record
Sf naiof iMrof I t^an^
Sf iMIor John Hrin.
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1925 K Street, NU
Suite 206
Washington. DC, 20006
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TBE OKLAHOHA COOLING RETROFIT FIELD TEST:
Evaluating Technologies to Reduce
Cooling Costs in Low-Income Homes
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Conducted By:
Public Service Company of Oklahoma
Oklahoma Department of Commerce
Division of Community Affairs and Development
Wa-Ro-Ma Tri-County Community Action Foundation
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Supported By:
U.S. Department of Energy:
Office of Buildings and Community Systems
Building Retrofit Program
Office of State and Local Assistance Programs
Weatherization Assistance Program
Alliance to Save Energy
Oak Ridge National Laboratory
November 1987
(193)
194
OKLAHOMA COOLING RETROFIT FIELD TEST
EXECUTIVE SUMMARY
The field test will evaluate the effectiveness of
installing conservation measures to reduce
electric cooling costs in low-income homes.
This project will determine the energy savings and
benefit-to-cost of three technical approaches to
improve residential cooling efficiency. It will first
examine the effectiveness of using the combination of
measures currently installed by the Oklahoma
Weatherization Assistance Program. These include
measures to^reduce air infiltration, attic insulation,
and storm windows. Then, in combination with these
measures, the project will test the value of adding an
attic radiant barrier, or replacing existing window air
conditioner(s) with a high efficiency unit(s).
The project will provide state, utility, and local
managers with detailed analysis about which weatherization
measures are most effective in reducing residential cooling
costs. It will provide technical researchers with more
information about how homes operate in hot and humid
climates and aid in the development of better energy audits
that are based on measured energy use in actual homes.
To determine the effectiveness of the retrofit
measures, the project will install measures in randomly
selected low-income homes and analyze each home's pre- and
post-retrofit energy consumption. One hundred and twenty
homes will be divided into three treatment groups and a
control group. Energy use will be monitored weekly by
reading each homer's electric and gas meters and separate
submeters installed on air conditioning systems. In
addition, indoor air temperature and weather data will be
monitored. Data will be collected over a two year period
that includes a full cooling season both before and after
the retrofit. Upon completion of this field test, a final
report will be written and the results disseminated to
state, community, and utility weatherization managers.
This Oklahoma Field Test is a cooperative project
involving six organizations:
(1) U.S. Department of Energy,
(2) Public Service Company of Oklahoma,
(3) Alliance to Save Energy,
(4) Oak Ridge National Laboratory,
(5) Oklahoma Department of Commerce, and
(6) Wa-Ro-Ma Tri-county Community Action Foundation.
195
THE NEED FOR BETTER COOLING RETROFIT
Weatherization programs in hot and humid climates
are not as effective as possible because managers
lack information about the performance of
conservation measures to reduce cooling costs.
Up to half of an Oklahoma family's energy costs occur
during the cooling season. Oklahoma's Weatherization
Assistance Program, like almost all southern programs,
installs measures primarily intended to reduce heating costs
- air infiltration reduction, attic insulation, and storm
windows. While these measures may reduce cooling costs as
well as heating costs, installing other conservation
measures specifically designed to reduce cooling costs could
increase the program's energy savings and cost-
effectiveness.
The field test will help the Oklahoma Weatherization
Assistance Program determine which cooling measures should
be included in their program. U.S. Department of Energy
research indicates that several cooling measures may be cost
effective to install in southern weatherization programs.
However, two of the most promising measures - radiant
barriers and replacement air conditioners - need to be
tested under field conditions.
The field test will help Public Service Company of
Oklahoma (PSO) to accurately inform their customers about
the best ways to reduce cooling costs. PSO's residential
customers have not saved as much energy as expected from
recommended conservation measures and have been slow to
upgrade to high efficiency appliances. The field test will
provide PSO with the experience and information needed to
better predict energy savings and encourage the adoption of
appliance upgrades.
The results of the field test will be used by
researchers to design a new residential audit for southern
climates. Also, field test data will be placed in a
national data bank to help the research community better
understand the performance of buildings.
196
FIELD TEST TECHNICAL APPROACH
The field test will retrofit randomly selected
low-incone homes using three different
conservation packages. Energy use will be
measured before and after installation, to
determine the benefit-to-cost of each approach.
TREATMENT GROUPS
The field test will include 120 randomly selected low-
income homes divided into four equal groups: .
Group #1 — Weatherization
Weatherization measures currently used in the Oklahoma
Weatherization Assistance Program — infiltration
reduction, attic insulation, and storm windows — will
be installed in the weatherization group of homes.
Group #2 — Radiant Barrier
In addition to the measures installed in the
weatherization group, these homes will be retrofitted
with a radiant barrier (a type of reflective foil)
applied horizontally above the attic insulation.
Group #3 — Air Conditioner
These homes will have existing room air conditioners
replaced by new high efficiency units of similar
capacity, in addition to receiving the measures
installed in the weatherization group. *
Group #4 — Control
No conservation measures will be installed in the
control homes during the test period. The group will
be used as a standard for comparison to account for the
effects of factors, such as price-induced conservation,
that could bias the results. Control group homes will
be weatherized at the conclusion of the field test.
BOUSE SELECTION CRITERIA
The field test homes will be 1) single family, owner
occupied (no mobile homes), 2) eligible for the Oklahoma
Weatherization Assistance Program, 3) in PSO's customer
territory, and 4) cooled by one or two rocsn air
conditioners. Prospective households will be screened to
determine if they meet these minimum selection criteria and
197
other conditions designed to minimize variances between the
groups and loss of homes during the course of the study.
PROJECT TRAINING
Training workshops will be conducted to assist the
organizations involved in the project. Workshops will covej
radiant barrier installation and blower door use.
PROJECT TIMEFRAME
The field test will be conducted from spring 1988
through fall of 1989. Pre-retrofit energy use will be
monitored during the summer of 1988. Retrofits will be
installed between the fall of 1988 and the spring of 1989.
Post-retrofit energy use will be monitored during the summer
of 1989.
DATA COLLECTION
Energy use, indoor air and temperature, and local
weather information will be collected on a regular basis.
Total household electric and gas use will be read weekly
from each home's existing master meters. Air conditioner( s)
will be submetered and readings will be jnade weekly. A
small temperature sensing cube will be installed in each
home to record indoor air temperatures at 15 minute
intervals; it will be read monthly. In up to five homes,
small weather stations will be installed and data will be
collected weekly. All data will be forwarded to Oak Ridge
on a monthly basis.
AHALYSIS AND REPORTS
Two technical reports will be published — an interim
report after the completion of the pre-retrofit summer and a
final report at the end of the field test. Based on the
technical results, a summary briefing paper will be
developed and disseminated to state, community, and utility
weatherization program managers.
198
CCX>LING RETROFIT MEASURES
The cooling efficiency performance of a basic
package of weatheriiation measures — infiltration
reduction, attic insulation, and storm windows —
and two cooling retrofit measures — attic radiant
barriers and high efficiency room air conditioners
— will be evaluated.
BASIC PACKAGE OP WEATHJERIZATION MEASURES
The Oklahoma Weatherization Assistance Program typically
installs a standard set of weatherization measures in each
low-income home serviced by the program. Although normally
thought of as measures to reduce heating energy consumption,
they may also have the side benefit of reducing cooling
costs. These measures include:
Infiltration Reduction
Installing measures to reduce air infiltration is an
important part of the Oklahoma program. For this field
test, a blower door will be used to locate and fix major
bypass areas. The blower door will provide data on the pre-
and post-retrofit levels of air infiltration in each home.
Weatherization crews will use this information to determine
the optimal amount of materials and labor to invest in
infiltration reduction measures.
Attic Insulation
The Oklahoma program currently increases each home's
attic insulation level to a R-19; this procedure will be
used in homes in the three retrofit study groups. Attics
will be properly vented and minor roof leaks repaired. No
other insulation measures will be employed.
Storm Windows
Storm windows are currently a major program measure and
will be used in the study groups. Existing storm windows
will be repaired if possible. Combination storm and screen
windows will be installed on all windows where no storm
exists, or where the existing storm is beyond repair.
199
NEW COOLING RETROFIT MEASURES
Both radiant barriers and high efficiency room air
conditioners are designed to reduce cooling costs and have
shown good results in laboratory and small-scale tests.
This project will be the first large-scale field test of
these options in a low-income weather ization program.
Attic Radiant Barriers
A reflective film, commonly known as a radiant barrier,
will be installed horizontally across the R-19 insulation in
the attics of group #2. The film is like a layer of
aluminum foil which reduces the effects of solar gain in the
summer by reflecting radiant heat away from the attic
insulation. The barrier also reflects escaping heat back
into the home in the winter. Laboratory studies have shown
installing a radiant barrier can reduce a home's cooling
load by up to 15 percent. Perforated radiant barriers will
be used to allow any moisture escaping frcxn the house and
passing through the insulation, to also pass through the
barrier and be carried out through the attic vents.
High Efficiency Roon Air Conditioner(s)
In group #3, existing room air conditioners will be
replaced with new high efficiency units of equal capacity.
The new units will be selected based on their Energy
Efficiency Ratio (EER)*. The following is a chart of the
minimum EER for the replacements based upon capacity:
Capacity (BTU) Minimum EER
< 6,000 BTU 8.0 EER
6 - 7,999 BTU 8.5 EER
8 - 13,999 BTU 9.0 EER
14 - 19,999 BTU 8.8 EER
>= 20,000 BTU 8.2 EER
*EER is calculated by dividing the cooling capacity in BTU's
per hour (BTUH) by the power input in watts. This analysis
is expressed in BTUH per watt (BTUH/watt). The higher the
EER number, the more efficient is the air conditioner. The
range of the existing units is expected to be between 5 EER
and 7 EER.
200
THE ROLE OF EACH PARTICIPATING ORGANIZATION
The field test is supported by a teaun of federal,
state, and local organizations interested in
improving the performance of weatherization
programs in Oklahoma.
The following are the field test responsibilities of
each of the participating organizations:
U.S. DEPARTMENT OF ENERGY (DOE)
The U.S. Department of Energy is the federal department
responsible for promoting energy efficiency research. Two
offices at the U.S. Department of Energy provide support to
the project. The Office of Buildings and Community Systems
(BCS) provides funds to support the Alliance and ORNL
research staff through the Building Retrofit Program. The
Office of State and Local Assistance Programs provides the
State of Oklahoma with funds to weatherize field test homes
through the Weatherization Assistance Program.
ALLIANCE TO SAVE ENERGY (Alliance)
The Alliance to Save Energy is a non-profit coalition
of business, government, and consumer leaders dedicated to
increasing the efficiency of energy use. The Alliance has
developed this project plan based on the contributions and
comments of field test participants. Future
responsibilities include trouble shooting problems,
conducting field test training for energy auditors and
weatherization installers, and disseminating field test
results. In addition, the Alliance will draft
recommendations for residential conservation programs based
upon the field test results.
PUBLIC SERVICE COMPANY OF OKLAHOMA (PSO)
Public Service Company of Oklahoma is a major electric
utility in state. PSO will review project documents and
provide technical comments as needed. PSO will support the
cost of submetering each home and provide an instrumentation
specialist to work on the project. ORNL and PSO will
jointly fund the salary and expenses of the instrumentation
specialist. The instrumentation specialist will work with
researchers at ORNL to maintain equipment and collect indoor
temperature and weather data.
201
OAK RIDGE NATIONAL LABORATORY (ORNL)
Oak Ridge National Laboratory is the lead federal
research organization on single family retrofit
technologies. ORNL will draft a detailed experimental plan
for the field test based on this project plan. ORNL will
supply indoor temperature cubes and weather instruments and
train the local instrumentation specialist in installation
and use of the equipment. ORNL will check the quality of
the field data, suggest how to correct errors, analyze data,
and prepare interim and final technical reports.
OKLAHOi4A DEPARTMENT OF COMMERCE (ODC)
The Oklahoma Department of Commerce manages the state's
low- income weather ization program. ODC will manage the
field test at the state level, coordinating the involvement
of PSO and the local weatherization program provider, Wa-Ro-
Ma Tri-County Community Action Foundation. The state will
also provide the funds necessary to identify households,
conduct audits, install retrofit measures and repairs,
collect metered and submetered data, and remove the
monitoring instruments at the conclusion of the study.
WA-RO-MA TRI-COUNTY COMMUNITY ACTION FOUNDATION (WA-RO-MA)
Wa-Ro-Ma Tri-County Community Action Foundation is the
local weatherization provider in part of greater Tulsa. Wa-
Ro-Ma will identify low-income homes that meet the field
test criteria and interview each household. Wa-Ro-Ma will
assess each homes, install basic conservation measures,
radiant barriers, and air conditioners and make minor
repairs. Some work, such as electrical work, will be
contracted out to a private firm. Wa-Ro-Ma staff will read
each home's electric, gas, and air conditioner meters weekly
and forward the data to ORNL.
202
FIELD TEST TASKS
The field test is divided into ten tasks; each is
the responsibility of one or more participating
organizations.
PROJECT PLAN (Alliance; assisted by ORNL, with input from
each participating organization)
The Alliance has prepared this project plan for the
field test. The plan describes the project, need, approach,
measures, role of each organization, task plan, time-line,
and budget. The first draft of the plan was reviewed by the
other participating organizations in July 1987. This final
version of the plan is based on comments made during the
review period.
EXPERIMENTAL PLAN (ORNL; assisted by the Alliance and PSO)
ORNL will develop an experimental plan based on the
agreements outlined in this project plan. The experimental
plan will provide detailed instructions about how the field
test will be conducted and analyzed. The plan will be
completed by January 1, 1988.
HOUSEHOLD SELECTION (Wa-Ro-Ma; assisted by the Dept. of
Ccanmerce, ORNL, and the Alliance)
Wa-Ro-Ma will identify 120 study homes eligible for the
Weatherization Assistance Program. Wa-Ro-Ma will interview
these households to determine if they meet other field test
criteria and are willing to participate in the field test.
This work must be completed by March 1, 1988. The
experimental plan will outline household selection criteria
and a method to assign homes to each of the four field test
groups.
MONITORING INSTALLATION (PSO and Wa-Ro-Ma; assisted by
ORNL)
PSO will fund Wa-Ro-Ma to contract with electricians to
submeter air conditioners in each house (ORNL will provide
necessary technical assistance). ORNL will provide 120
indoor temperature cubes and up to five small weather
stations. All monitoring equipment will be installed by May
1, 1988 and removed by October 30, 1989. Funds for
monitoring equipment removal will be provided by the
Oklahoma Department of Commerce.
203
PROJECT TRAINING (Alliance; assisted by ORNL and
subcontractors)
The Alliance will arrange technical training workshops
for energy auditors and weatherization crews on using blower
doors and installing radiant barriers.
AUDITING (Wa-Ro-Ma; assisted by ORNL, and the Alliance)
Wa-Ro-Ma weatherization staff will audit all 120 homes
and conduct interviews of homeowners in the spring of 1988.
At the conclusion of the field test, in the fall of 1989,
auditors will interview each household again to identify any
lifestyle or equipment changes that occurred during the test
period. The experimental plan will provide interview forms.
INSTALLATION OF MEASURES (Wa-Ro-Ma)
Wa-Ro-Ma weatherization crews will install blower door
guided infiltration reduction measures, attic insulation,
and storm windows in homes in treatment groups #1, #2, and
#3. In addition, they will install radiant barriers in
group 12 and high efficiency room air conditioners in group
#3. Measures will be installed between the fall of 1988 and
the spring of 1989. Wa-Ro-Ma will also Veatherize the
control homes at the end of the field test.
DATA COLLECTION (Instrumentation specialist and Wa-Ro-Ma)
Data will be collected from the spring of 1988 through
the fall of 1989. Wa-Ro-Ma data collection staff will visit
each house on a weekly basis to read household gas and
electric master meters and submeters. The instrumentation
specialist will collect indoor temperature data monthly and
weather station data weekly. All data will be forwarded to
ORNL each month.
FIELD TEST ANALYSIS (ORNL; with review and comment by all
participating organizations)
ORNL will analyze the before and after retrofit energy
use, correcting for differences in indoor temperature and
weather, to determine the energy reduction and cost
effectiveness of measures. Data from control group of homes
will be used to adjust the results in the other groups.
ORNL will prepare an interim report by June 1989 and final
technical report by March 1990.
204
TECHNOLOGY TRANSFER (Alliance, ORNL; assisted by PSO and
the Oklahoma Department of Commerce)
The Alliance will prepare a brief on project results
and implications, and disseminate it to weather ization
program managers nationwide. Results will also be reported
at weather izat ion and utility conferences. The results will
be used to develop a new energy audit for southern state and
utility weather ization programs.
FIELD TEST TIMELIKE
The field test will be conducted over a two year
period. Pre-retrofit data will be collected
during the summer of 1988, retrofits will be
installed between the summer of 1988 and 1989, and
post-retrofit data will be collected during the
summer of 1989. Performance analysis will be
completed by March, 1990.
205
FIELD TEST BUDGET
The U.S. Department of Energy funds the Alliance
and Oak Ridge, the Oklahoma Department of Coomerce
funds the costs of retrofitting test homes, and
Public Service Company of Oklahoma funds field
test instrumentation costs.
TASKS
Planning
Experimental Plan
Household Selection
ALLIANCE*
$15,000
ORNL*
ODOC
PSO
***
$50,000
$6,000
Instrumentation
Electric subraeters $10,000
Submeter installation $15,000
Temperature meters $30,000
Weather stations $20,000
Instrumentation specialist $20,000 $20,000
Instrument removal $10,000
Project Training $10,000
Auditing
Staff $8,000
Equipment $4,000
Retrofit Costs
Measures $135,000
Repair $27,000
Data Collection $20,000
Analysis $105,000
Technology Transfer $10,000 $15,000
Alliance $3 5,000
ORNL $240,000
State WAP $210,000
PSO $4 5,000
Total Field Test Budget - $530,000
* Alliance and ORNL work is funded by DOE.
** The DOE Weatherization Assistance Program provides
these funds to the Oklahoma Department of Commerce.
*** PSO contribution is a combination of in-kind services
and direct financial support.
206
National Association of
State Energy Officials
NATIONAL ENERGY POLICY STATEMENT
An optimal, integrated and least cost national energy
policy should balance the goals of energy resource
development, economic impact, national security,
environmental quality, global warming mitigation,
provide for the special needs of the low-income and
elderly, and define the appropriate roles of Federal,
state and local governments. Such a search for
consensus on these issues will require hard choices to
be made.
A National energy policy should be based on a concise,
integrated plan for all energy sources which is designed
to achieve the following objectives:
o Prioritize energy resource development,
including energy conservation and energy
efficiency improvements, by weighing and
balancing the trade-offs between reliability,
risk, and cost-effectiveness, and its effect
on the environment;
o Consider the direct and indirect economic and
societal impacts of developing energy resources;
o Enhance national security through diversity in
energy resources, developed in an integrated and
least-cost manner;
o Balance competing environmental and energy
production concerns;
o Provide consistent and coherent guidance for
Federal, state and local energy policy makers; and
o Define the Federal government's role as a
coordinator and provider of sustained funding,
technical assistance and research, development and
demonstration of emerging energy technologies and
techniques.
207
National Energy Policy Objectives
o Assure the most economic and efficient use of the
Nation's resources by promoting improved energy
efficiency throughout the economy focusing on the
residential. commercial and industrial sectors,
building technologies, transportation alternatives
and residential and commercial appliances.
Improved energy efficiency should form the
cornerstone of an optimal and integrated National
energy policy. The formation of National energy
policy must be predicated on an integrated energy
planning process that evaluates improved energy
efficiency equally with other traditional supply
options. Such a planning process must explicitly
recognize and account for the external benefits
and costs of improved efficiency by considering
its environmental, economic development and
societal impacts.
Additionally, National energy policy should
recognize that a new and more flexible
Federal/state/local partnership must be established
to translate the Nation's energy policies and
priorities into state and local implementation and
action. This partnership requires increased and
sustained federal funding and technical assistance
to continue the innovative state and local
assistance programs, and energy efficiency research
and development programs which have made major
contributions to the Nation's efficiency gains to
date.
In the short-term, National energy policy must
emphasize and increase funding at all levels for
research, development and demonstration of energy
efficient designs, technologies and applications
which will pay f-ture dividends in the form of new
products, processes and jobs.
National energy policy, building on recent Federal
legislation, must also ensure that cost-effective
energy efficiency standards are implemented for
residential and commercial appliances, new building
construction, manufactured homes and buildings,
lighting and motors. Transportation efficiency
should be encouraged by retaining and
strengthening fuel economy standards for
automobiles and light duty trucks as well as
promoting increased use and expansion of the
Nation's mass transit systems.
208
National energy policy should promote, when
practicable, private/public partnerships in the
development of innovative energy practices,
techniques, and financial arrangements such as
shared savings or performance contracting. The
Federal Government can provide leadership by using
new and more efficient energy saving technologies
in procurement and purchasing practices. The
Federal government should emphasize and promote the
use of alternative transportation fuels, renewable
energy sources and the consideration of life-cycle
costing in the design, construction and purchasing
of new buildings and equipment.
Also, Federal and state governments should increase
outreach, technical assistance and information
transfer programs to educate the public that
improved energy efficiency provides the same
service at lower cost, is good for business, and
provides greater return on investment than a
comparable investment in new energy supplies.
In the longer-term, energy efficiency resource
development and demonstration budgets must be
increased and joint public/private partnerships
must be developed which focus on particular
projects and research initiatives in the areas of
more efficient appliances, transportation
alternatives and alternative fuels development as
well as the energy applications of super
conductivity.
Increase the contribution of renewable energy to
the Nation's energy supply through consistent
recfulatory treatment, concerted public awareness
and increased research. development and
demonstration .
National energy policy must foster the development
of the Nation's renewable and indigenous resource
potential in an era of increasingly competitive
markets, regulatory uncertainty and rising foreign
oil dependency.
Rising foreign oil dependency and oil price
uncertainty, coupled with the long-- rm
environmental impacts of increasing fossil . ael
use, highlight the urgent need for greater interest
in renewable resource development by the Federal
government. Rising petroleum imports require that
Federal energy policy refocus its efforts on
promoting and sustaining the use of alternative
209
transportation fuels, biomass, geothermal,
hydroelectric, hydrogen, ocean thermal energy
conversion, photovoltaics, waste, wood and wind as
energy resources which can diversify the Nation's
energy base.
Additionally, renewable resources and cogeneration
for electricity generation should play an important
role in the Nation's future energy mix. Regulatory
reform at both the State and Federal levels should
be considered to ensure the proper and efficient
integration of these power sources into the
electric utility system. Among those issue which
should be analyzed are transmission pricing,
appropriate access to the transmission grid, the
role of competitive bidding in future generation,
which fairly considers renewable resources' unique
attributes and environmental benefits, and
Federal/State jurisdictional issues related to
transmission services and wholesale utility
markets .
Renewable resource development should be given
Federal tax incentives similar to those provided
for the exploration and development of the Nation's
fossil fuels to allow these technologies to compete
on an equal footing with comparable fossil and
nuclear based fuels and technologies.
Additionally, accelerated research, development,
and demonstration initiatives should be funded and
promoted as part of a multi-year authorization for
renewable resource based projects. A multi-year
authorization would serve to enhance private
participation in projects which benefit the
Nation's economy by developing emerging renewable
technologies, thus contributing to new
manufacturing activity as well as developing an
exportable product for the world market.
Renewable technologies should also be an integral
element of Federal, state and local capital
construction projects as well as part of government
procurement and purchasing programs. Additionally,
renewable resource projects should be given more
widespread application through the State Energy
Conservation Program (SECP) and Energy Extension
Service (EES) program. Greater emphasis should be
placed on demonstrating innovative uses of
renewable resource technologies at all levels of
government to showcase practical applications of
these technologies and techniques.
210
Ensure a stable. economic and environmenrally
acceptable supply of domestic energy resources.
National energy policy must ensure that the
domestic energy industry is sustained in an era of
moderating energy prices so that a portion of the
Nation's future energy needs can be met with
domestic energy resources.
The United States possesses enormous coal reserves,
has a mature and extensive petroleum and natural
gas industry and has developed the use of nuclear
energy to generate electricity. National energy
policy must recognize that a strong domestic energy
industry is vital to our national security.
To better utilize our abundant coal reserves, which
have been restricted by environmental
considerations, a Federal/state partnership must be
established which will promote the environmentally
sound use of coal through new coal cleaning,
conversion and combustion technologies which
satisfy stringent standards for controlling
particulates, sulfur and nitrogen oxides.
To sustain the domestic oil industry and promote
greater exploration and development. National
energy policy should focus on tax incentives which
will spur exploration and maintain marginal
production. Additionally, increased research and
development on enhanced oil recovery for oil fields
should be vigorously pursued.
The continued growth and expansion of the natural
gas industry should be a major tenet of National
energy policy. Since the U.S. gas reserve-to-use
ratio is significantly larger than the domestic oil
reserve-to-use, National energy policy should
recognize the potential for increased natural gas
use throughout the Nation's economy. Increased
gas use can be achieved through a more market
oriented industry by regulatory reform at both the
Federal and state levels. National energy policy
should also remove any restrictions on natural gas
use; provide open access to interstate
transportation which would encourage competition
and allow suppliers to balance supply and demand;
and expand the North American pipeline to bring
more Canadian and Mexican gas to U.S. markets, thus
significantly improving the U.S. long-term gas
supply outlook.
211
In the short term, to more fully enhance our
domestic energy resources, National energy policy
should encourage the FERC and other regulatory
agencies to expedite the expansion of the energy
supply and distribution system for natural gas as
well as electricity. Additionally, to continue the
safe use of nuclear energy a number of steps should
be considered such as standardized plant design, as
well as increased research development must be
initiated to address nuclear waste disposal.
National energy policy must also undertake
innovative research development and demonstration
to commercialize cost-effective alternative
transportation fuels as a substitute for gasoline
and diesel fuel.
In the near future, National energy policy must
strive establish an alliance with other Western
Hemisphere countries to stabilize our sources of
energy supplies and decrease our reliance on the
Middle East.
Further, longer-term basic research and
development and demonstration should be
initiated to promote environmentally sound
development of all our domestic resources.
o Meet the essential needs of the Nation's low-income
people.
National energy policy must explicitly recognize
the special needs of low and fixed income consumers
and the elderly. The growing reliance of market
mechanisms to meet the Nation's energy needs must
acknowledge that certain segments ci the population
are unable to respond to market signals. Minimal
access to comfort and mobility is essential to the
health and welfare of all Americans.
To assist low-income consumers in making informed
energy decisions a number of policy initiatives
should be pursued including: initiating a
widespread energy education campaign as part of the
Low Income Home Energy Assistance program, State
and Local Assistance Programs such as SECP and EES ,
and Housing and Urban Development Low-Income
Housing programs; implementing research and
development initiatives designed to provide
extremely low-cost housing that is energy-
efficient; developing and enforcing rental-facility
guidelines.
212
National energy policy must sustain the
commitnient to providing weatherizat ion
assistance and low-income energy assistance
through continued Federal funding recognizing
that petroleum overcharge recoveries are non-
recurring sources of funds. States, through
the use of oil overcharge refunds, and
public/private collaboration must strive to
develop innovative programs to make permanent
energy savings improvements to low- income and
elderly housing, thus decreasing the reliance
on payments to meet continuing energy costs.
The private sector and utility sponsored low-
income assistance programs should also be
leveraged in partnership with government
programs, especially in the Weatherization
Assistance Program. Existing statutory
language and regulations governing the
construction and maintenance of publicly
financed housing should be amended to require
that existing public housing incorporate cost-
effective conservation improvements and that
new public housing be built based on life-
cycle energy costs.
Additionally, the Federal government, in
cooperation with the states should compile better
data and statistics regarding low-income energy
needs, percentage of income spent on energy and
other relevant data to better assess ways to reach
this segment of the population.
In the longer-term, public/private partnerships
should be forged which encourage the use of shared
savings and performance contracting in public
housing.
Assure energy emergency preparedness by promoting
coordination and cooperation among, national, state
and local government, and the private sector.
National energy policy must clearly recognize that
rising energy imports increase the Nation's
vulnerability to an energy supply disruption.
Reliance on the free market to meet the Nation's
energy needs at the lowest cost must be tempered by
the realization that the market discounts their
longer-term national security considerations and
energy and environmental implications to the
Nation's economy. Furthermore, even with today's
relative energy supply abundance, an energy supply
emergency could be triggered by an act of terrorism
213
in our own Country which could have widespread
impacts on the supply and distribution of energy.
Therefore, it is the responsibility of Federal and
state governments to focus on preparing a
coordinated, interrelated, and flexible strategy to
meet any energy emergency which mitigates the
impact on the Nation's economy and balances
regional effects of an energy supply disruption.
Foremost in the formulation of an energy emergency
response capability is the establishment of clear
lines of communication and jurisdiction between the
Federal Government, states, and the energy
industry.
In the short term, a mechanism must be instituted
on the Federal level which allows the President to
respond to any energy supply disruption. A
planning mechanism must be instituted which
accounts for the Nation's responsibility to meet
international obligations to share petroleum
supplies pursuant to International Energy Agency
agreement without unduly burdening any region of
the Country. States should also be full
participants in the International Energy Agency's
Allocation System Tests.
Additionally, the Strategic Petroleum Reserve must
be filled expeditiously to the one billion barrel
level to provide a hedge against foreign oil
producers controlling the availability of petroleum
supply in the event of a supply disruption. The
Federal government also must continue to test SPR
drawdown procedures and the distribution of refined
product at specified intervals to ensure that the
product reaches the market in a timely manner. The
drawdown procedures of the SPR should be amended to
include only domestic companies with refining
capacity as those eligible to receive crude oil
from the reserve.
The Federal government also must continue its
independent effort to gather comprehensive energy
data with enough state level specificity to match
energy use with supply, price, demand and product
inventories. Also, the Federal government in
cooperation with the states, should provide ongoing
guidance, training and technical assistance for
specific energy emergency scenarios by conducting
energy emergency simulations which coordinate and
delineate Federal, state and local
responsibilities .
214
On the state and local level, state energy
emergency plans must be reestablished and tested to
mitigate economic dislocations and balance state
and local needs. Complementary State set-aside
programs must also be reestablished and revised
under Federal authority to avoid misallocations of
scarce energy supplies and to increase regional
cooperation. The implementation of State set-aside
programs should require no prior Federal approval.
In addition, State and localities must
cooperatively work to provide accurate and timely
energy emergency information on the availability of
energy supplies, the outlook for energy emergency
relief and a plan of action to mitigate the
impacts of supply disruptions.
The private sector must provide expertise and
advice to Federal, state and local officials on how
to manage a shortage, as well as to coordinate
their responses to meet energy supply shortfalls
with governments efforts to manage an energy
emergency.
A primary objective of a National energy
emergency policy is to ensure that there is a
rational, integrated and cooperative
contingency plan to meet any energy supply
emergency. Such a balanced policy must
account for regional disparity and
vulnerability while protecting the health and
welfare of the Nation's citizens, businesses
and industries.
215
National Association of Regulatory Utility Commissioners
Incorporated
1102 Interstate Commerce Commission Building
Constitution Avenue and Twelfth Street, N.W.
Post Office Box 684, Washington, DC. 20044-0684
Hknrv G. Yonce. President
Soulli Ciirolina Public Service Commis^inri
1 1 1 Doctors C:irtlc, Post Oflice liox I I(i4>.)
Columbia, South Carolina 2921 1
Sharon L. NKi..soN.fiV.rf Vice Presidenl
Washingloii Utilities .ind Traiispoi t.ilion (Inmniissuin
Chaudier Pla^a Building
ISlll) .South Evcigrceu Park Drive, S.W.
Olvmpia, Washington <IS.il)4-8(IIIL'
VVii.i.i,\,\i .\. ^wn.t.v.. Second Vice Presidenl
M.it viand Public Service CoininissiHU
Atuciicatl Building
2S1 East Baltimore Street
Baltimoie, Maryland 212()2-348()
Telephone: 202-898-2200
Facsimile: 202-898-2213
Pall Rouclrs
Atimiiitstmtwe Director
Gfimai Cmimel
Gaile Arihro
Treasurer
May <?, 1989
The Honorable Howard M. Metzenbaum
Chairman
Subcommittee on Energy Regulation and Conservation
Committee on Energy and Natural Resources
212 Hart Senate Office Building
Washington, DC 20510
Re: Testimony on S. 2 47, the "State
Energy Conservation Programs
Improvement Act of 1989"
Dear Chairman Metzenbaum:
The National Association of Regulatory Utility Commissioners
(NARUC) respectfully requests that this letter be included in the
hearing record on S. 247, the "State Energy Conservation Programs
Improvement Act of 1989."
As the Association representing the State Commissions
responsible for the economic regulation of our nation's electric
and gas utilities, we have a vital and direct interest in
proposals to make State energy conservation programs more
effective. We are pleased to support the legislation now before
you. It outlines an opportunity you have to help this country use
energy in an economically sound and environmentally sensible way.
We urge you to take advantage of that opportunity.
As utility regulators at the state level, our members are very
concerned about funding for energy conservation programs. These
programs have helped millions of consumers to minimize their
utility bills and have spurred the development of many new energy-
saving technologies by U.S. industries. Due in part to the wise
investments made by the government over the past 15 years, energy
efficiency has become the fastest growing energy source in the U.S.
economy, and the most economical.
216
Page 2
A huge reservoir of untapped energy efficiency exists. As S.
247 points out, this reservoir is capable of actually reducing our
current consumption of energy. The environmental benefits which
accompany that increased energy efficiency make the bill doubly
worthwhile.
It is worth reminding the Subcommittee that energy use per
unit of GNP declined steadily from the period between 1973 and
1986. Indeed, the energy-saving investments our country made after
the Arab Oil Embargo 15 years ago saved our country $130 billion
a year in energy bills. Unfortunately, this trend has begun to
reverse itself over the last two years.
This leaves at least three urgent reasons to provide serious
and substantial funding to energy conservation: environmental,
economic, and resource preservation.
1) Environmental : the recently issued public policy study
called, "Project 88", sponsored by Senators Wirth and Heinz,
strongly recommended a set of policies to deal effectively with the
combined problems of global warming, acid rain, local air
pollution, and energy security, mainly — though not exclusively — by
encouraging more efficient energy production and use of energy
throughout the U.S. economy. They found that, "a comprehensive
energy efficiency program will go a long way towards reducing some
of our major environmental problems while providing society with
a broad range of important economic benefits . . . The cornerstone
of any program to fight global warming is likely to be promotion
of energy efficiency and non-fossil fuel energy generation.
Encouraging a more energy efficient economy will mitigate the
greenhouse effect and will reduce problems with local air pollution
and acid rain."
2) Economic: Insofar as economic benefits are concerned, not
only must we reduce residential and business customers' energy
bills but, by reducing energy bills for industry, monies are freed
for use in plant modernization and expansion. It is of vital
importance to our trade balance to change the current level of
industrial expenditures on energy. The U.S. spends 11% of its GNP
on energy supplies while Japan spends only 6%. If the U.S. were
to match Japan's level, we would save $190 billion annually on
energy bills with no loss in output of goods and services.
3) Resource Preservation: Finally, to the extent that we can
extend the life of proven, economically retrievable but unrenewable
resources, we enhance our national security and can avoid or
postpone the need to explore for these resources in sensitive
areas.
217
Page 3
Surely, these reasons are sufficiently compelling to justify
an expenditure at this time to ensure the continued momentum of
energy conservation. How we choose to produce and use energy in
the immediate future and beyond, will deeply affect the quality and
viability of our environment and our economy.
We W'
presen
d likg-*o thank the Subcommittee for allowing NARUC to
n this vital subject.
Paul BSragers
General Counsel
Respectfully yours.
\j:ic^
Jurienne Wood
Assistant Director
Congressional Relations
218
BOB MILLER STATE OF NEVADA
»c«nsGo«mof PUBLIC SERVICE COMMISSION OF NEVADA
Capitol Complex
727 Fairview Drive
Carson City, Nevada 89710
(702) 687-6007
Commisstontn:
TOM STEPHENS
Chtifman
' "1^ " " PATRICK J JOYCE
STEPHEN WIEL EBld5**aSd CounM
JO ANN KELLY VCStJ'^/
MICHAEL A PITLOCK V^S^^^X Mflrrh 71 1 QflQ WILLIAM H VANCE
ROSE McKINNEY-jAMES XigjjSx' narcn ZJ, 1^05 Stenary
The Honorable Howard Metzenbaum
Chairman
Energy Regulation and Conservation
Subcommittee
SH-212 Hart Senate Office Building
Washington, D.C. 20510
Re: S. 247/the "State Energy
Conservation Programs Improvement
Act of 1989."
Dear Chairman Metzenbaum:
On behalf of the Conservation Committee of the National Association of
Regulatory Utility Commissioners (NARUC) , I want to take this opportunity to
congratulate you on introducing S.247. NARUC heartily endorses this
legislation which updates the state energy conservation programs and
authorizes Increased expenditures for these important activities. NARUC is
working very closely with the National Association of State Energy Officials
(NASEO) on least-cost energy planning activities as well as a variety of other
Important national energy issues. This legislation would enhance the state
energy office role in least-cost energy planning.
We as a nation are becoming increasingly concerned about global climate
change and it is clear that energy efficiency programs are the most
inexpensive and effective step to begin to address this significant problem.
Thank you again for introducing this Important legislation and we look
forward to working with you on the enactment of this bill.
STEPHEN WIEL
Chairman
NARUC Conservation Committee
SW/mpy
Mitch Beaver, Chairman, NASEO
Chuck Clinton, Chairman, NASEO Least-Cost Energy Planning Committee
Jeffrey C. Genzer, NASEO Counsel
Julienne Wood, NARUC Congressional Relations
coniuKii omaoa:
CafSon City/Hero— 687-6000 • Las Ve9as-4«6-6550 • Other Areas— 800-992-0900. Ext 87-6000
o
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