Weatherization Program Ramps Up After Slow Start

By: - June 8, 2010 12:00 am

Of all the programs funded by the federal economic stimulus law, one of the most criticized has been the boost given to weatherizing homes. Taxpayer groups and critical members of Congress said the $4.7 billion set aside for installing insulation, plugging air leaks and putting in energy-efficient furnaces and air conditioning systems would result in wasteful spending. Other critics questioned whether tiny local authorities that do this sort of work could gear up to spend the avalanche of new funding in time to meet tight stimulus deadlines.

For a while, the skepticism seemed justified. The program was paralyzed for the first year after the stimulus law was passed — although not for the predicted reasons. The problem wasn’t training workers or managing the money. Rather, it was confusing federal labor rules that made states reluctant to release funds; new environmental regulations that increased requirements for doing work on houses that might have lead paint in them; and historic preservation laws that made it difficult to do energy retrofits in old homes.

Now, a report from the U.S. Department of Energy suggests that states have the program back on track. As of March 31, the DOE reports that nearly 87,000 homes have been weatherized. That number puts the program on a path to meet the stimulus goal of weatherizing nearly 600,000 homes by March 31, 2012.

One state that is ramping up production quickly is Nevada. In the month of November, Nevada weatherized only seven homes. In April, that number was up to 748; in total, Nevada has weatherized some 2,869 homes. “We were never concerned that we wouldn’t be able to spend the money or achieve the goals,” says Hilary Lopez, chief of federal programs for the Nevada Housing Division.

According to the DOE report, states that are ahead of the pack in implementing the weatherization program are Delaware, Idaho, Ohio and South Carolina. These states all exceeded a federal goal of drawing down more than 30 percent of their stimulus money by March 2010. Still lagging are Arizona, California, Florida and Texas — big states that got a larger increase in funding because of a bias in the federal formula that favored warm-weather states. While the national average was for states to receive an 11-fold increase in weatherization funding, the stimulus gave Texas an amount equal to 55 times its historical grant.

The stimulus program is building off an existing federal weatherization program that started in the wake of the 1973 OPEC oil embargo. The DOE’s weatherization program is generally considered cost-effective — it received a seal of approval from the U.S. Office of Management and Budget in 2006. The program, funded by the federal government but run by states, has improved energy efficiency by more than 20 percent in some 6.2 million homes since its inception.

In 2008 — before the stimulus law passed — the program created at least 21,000 new jobs weatherizing 140,000 homes at a savings of $400 per household, according to Economic Opportunity Studies , which supports the local agencies that administer the program.

The Obama administration decided to make the program much bigger, touting weatherization as a cross-cutting program that would help the poor save money on energy bills while cutting pollution, reducing foreign oil consumption and creating thousands of jobs. Obama said the work funded by the stimulus would create 60,000 new jobs and weatherize at least 1 million homes each year starting in 2012.

The DOE report shows that the states still have some work to do, but are closing in on that goal quickly. In January 2010, states reported completion of 12,000 homes, the number jumped to more than 18,000 in February, 25,000 in March, and April numbers are expected to be higher.

The program also is beginning to show results in terms of putting people to work. On the administration’s list of top job creating programs, the energy efficiency program is credited with creating 10,638 jobs — right behind federal transit and highway planning and construction.

But now that the numbers are rising, there’s a new wrinkle: quality control and accounting.

A May 26 audit report from the Energy Department concluded that Virginia did not have required accounting and reporting controls in place, which had resulted in inaccurate payments to subcontractors and inconsistent reporting of the numbers of homes completed.

Delaware also has been cited for doing work on homes that did not qualify under the weatherization program and for not following energy department protocol for testing and upgrading homes for energy efficiency.

With inspectors in all 50 states, the Energy Department and the Government Accountability Office intend to root out potential fraud and waste, which could slow progress. In addition, state inspectors are looking over the shoulders of local operators.

It’s not clear how much time the new auditing will take, but critics say the oversight will simply add to the cost of insulating each home.

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Christine Vestal

Christine Vestal covers mental health and drug addiction for Stateline. Previously, she covered health care for McGraw-Hill and the Financial Times.