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Full text of "State Energy Conservation Programs Improvement Act of 1989 : hearing before the Subcommittee on Energy Regulation and Conservation of the Committee on Energy and Natural Resources, United States Senate, One Hundred First Congress, first session, on S. 247 ... May 2, 1989"

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 



- 2 - 

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) Qh JQ 

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 



- 11 - 

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 



- 12 - 

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 



- 13 - 

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 



- 14 - 

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: 

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; 

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; 

Continues to create a residential conservation industry in the labor 
force whose expertise and technical know-how is substantial; and 



68 



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: 

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; 

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; 

The retrofit (or replacement, where appropriate) of inefficient 
heating systems to achieve greater efficiencies in producing and 
distributing heat; 

New energy-efficient window and door systems, particularly in multi- 
family buildings and mobile homes whose doors and windows are 
typically dilapidated; 

Detailed energy conservation consumer education related specifically 
to clients' dwellings; and 

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: 

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. 

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.. 



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. 

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? ■ 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 Stri pper 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 Stri pper 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 Stri pper 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 

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 - 

A ppeals 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 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 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 



A NSWER S 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 DUCK ETT. DEPUTY DIRECTOR. ARKANSAS 

TMmiSTRIAL DEVEL OPMENT COMMISSIOM. TO QUBSTIOHS RESULTING 
FWQM MAY 2. 198 9. HEARING TO DISCUSS THE "STATE ENERGY 
COKSERVATION PR OGRAMS 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 ^SWER t 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? 

AN gWBR ! 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? 

AMSWER i 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. 
AMSWBR t 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? 

AMSWBR i 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 res ui^timg from may 2. 1989, 

gSgjgfl ii^A KlSrSsS 45E^.igTATg'ENg5Gy Pnti5RwIVTQN 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 Stripp er 
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? 

AMSWBR i 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 - 



AMSWBR i 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? 

AKSWBR i 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 



- 2 - 

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 



- 3 - 



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. 

-3- 



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 

-4- 



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. 



-6- 



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 



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Alliance 

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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 a nd cooperation among, national, state 
and lo cal 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: 
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