States are rethinking weatherization program

WASHINGTON -- The state-run Weatherization Assistance Program for low-income families was singled out for big stimulus spending partly because it had worked the same way for nearly 35 years and didn't need adjustments. But governors in some states are proposing brand new approaches that critics say could derail the tried-and-true home insulation program.

"With so much scrutiny and so much at stake with a program that's the centerpiece of the Obama administration's agenda, why would we want to weaken the experience and effectiveness of the current weatherization programs?" National Community Action Foundation director David Bradley said.

Weatherization has been attacked by members of Congress and taxpayer groups who say the local agencies that run the program won't be able to spend the stimulus windfall fast enough to generate jobs.

Now, a handful of states want to spread the money around, in part, to speed rollout.

Texas plans to give half of its funding to mayors in cities with populations of 75,000 or more instead of funneling it to the community action agencies that have done the work in the past. Massachusetts wants to use about a quarter of its allocation to upgrade energy efficiency in state and privately owned public housing. Indiana proposes giving its depressed homebuilding industry a crack at the project. And Missouri plans to set aside 40 percent of the funds for competitive proposals that would pool weatherization money with other housing assistance programs.

Started in the wake of the 1973 OPEC oil embargo, the U.S. Department of Energy's weatherization program helps low-income families reduce energy costs by plugging air leaks, installing insulation and purchasing fuel-efficient furnaces, hot water heaters and refrigerators. Last year, the federal government gave states $227 million, and states supplemented the program with $770 million more in state money, energy company fees and nonprofit contributions.

Generally considered cost-effective -- even receiving a seal of approval from the U.S. Office of Management and Budget in 2006 -- the state-run program has improved energy efficiency by more than 20 percent in some 6.2 million homes since its inception. Last year, the program created at least 21,000 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.

Operating on about $200 million in federal funding in recent years, the $5 billion stimulus fund represents a far bigger increase than in most other stimulus projects. In warm-weather states, the allocation is even steeper because of arcane rules that gave priority to cold-weather states prior to the stimulus. Texas, for example, will get 55 times what it got last year.

"Some states don't have any idea how they are going to do this. It hasn't been well thought out. The money is going to be pushed down to tiny community service groups with very little oversight," said Leslie Page, spokesperson for taxpayer watchdog group Citizens Against Government Waste.

But the 900 nonprofit community organizations that have been weatherizing low-income homes for more than three decades say they are confident they can hire and train people to do the work, and they have a long waiting list of qualified low-income families. Routine audits by state agencies and the Department of Energy have deemed the community-run programs cost-effective.

Still, some states have decided that other nonprofits and commercial organizations are equally qualified to do the work -- and there's a lot to do in a short time.

In Texas, which stands to get $326 million, Department of Housing and Community Affairs weatherization director Amy Oehler says most cities in the state already have their own energy conservation programs that could be enhanced with the new money. In addition, poverty is concentrated in the state's urban areas, she said.

Missouri is promoting neighborhood sweeps. The plan for spending Missouri's $128 million weatherization share suggests that "many homes in a targeted neighborhood could be improved in one sweep by using funds from various funding sources to meet multiple needs at each home as workers move through the neighborhood."

In Indiana, where Republican Gov. Mitch Daniels is known for privatizing everything from road maintenance to social services, the state's entire $132 million allocation would be turned over to others to do the job.

"In using federal stimulus dollars, our template is speed, jobs and lasting value," Daniels said. He proposed a bidding process that would include community action agencies and other nonprofits, Rural Electric Membership Corporations and the Indiana Builders Association.

State weatherization plans were due to the Department of Energy by this past Tuesday and scheduled for approval 60 days later, allowing work to start by mid-June. Ten percent of the stimulus money already has gone to states for program development and training. An additional 40 percent is due upon approval of the plans, and the final installment will come after the programs are up and running and deemed cost-effective. Funds must be spent or committed by Sept. 30, 2010.

If the states' innovative plans are rejected, they will have to go back to the drawing board before they can receive federal funds.