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Wednesday, January 18, 2012

DOE Weatherization Program: A Review of Funding, Performance, and Cost-Effectiveness Studies

Fred Sissine
Specialist in Energy Policy

This report analyzes the Department of Energy’s (DOE’s) Weatherization Assistance Program. (WAP, the “program”). It provides background—a brief history of funding, program evolution, and program activity—and a review of program assessments and benefit-cost evaluations.

Budget debate over the program is focused on a $5 billion appropriation in the Recovery Act of 2009, a report that state and local governments have yet to commit about $1.5 billion of that total, and concerns about the quality of weatherization projects implemented with Recovery Act funding. During the debate over FY2011 funding, the House Republican Study Committee called for program funding to be eliminated. In April 2011, Congress approved $171 million for the program in the final continuing resolution for FY2011 (P.L. 112-10). For FY2012, DOE requested $320 million, the House approved $30 million, the Senate Appropriations Committee recommended $171 million, and the Conference Committee approved $68 million. The budget debate provides the context for this report, but details of the current debate are beyond the scope of this report, which is focused on evaluations of program cost-effectiveness.

WAP is a formula grant program: funding flows from DOE to state governments and then to local governments and weatherization agencies. Over the 32 years from the program’s start-up in FY1977 through FY2008, Congress appropriated about $8.7 billion (in constant FY2010 dollars). The $5 billion provided by the Recovery Act added more than 50% to the previous spending total.

Over the program’s history, DOE’s Oak Ridge National Laboratory (ORNL) and the Office of Management and Budget have used process and impact evaluation research methods to assess WAP operations and estimate cost-effectiveness. Virtually all the studies conducted through 2005 showed that the program was moderately cost effective. The studies included measures of operational effectiveness, energy savings, and non-energy benefits. The timing of past studies was a bit sporadic, driven mainly by new statutory requirements and program audits. Performance assessments have alternately identified improvements in program operations or identified operational problems that subsequently stimulated program improvements. Only the intensive evaluation study of program year 1989 (published in 1993) was designed to directly draw a national sample to produce empirical data on program cost-effectiveness. Such in-depth evaluations are costly and time-consuming. Most other “metaevaluations” were much less costly, using available state-level evaluation studies as the basis to infer national-level program impacts.

The large infusion of Recovery Act funding—and attendant changes in program structure— heightened interest in conducting a fresh assessment of operations and new scientifically based evaluations of program impacts. Unforeseen recession-driven events delayed use of Recovery Act funding. For example, the DOE Inspector General (DOE IG) found that recession-driven budget shortfalls, state hiring freezes, and state-wide planned furloughs delayed program implementation—and created barriers to meeting spending and home weatherization targets. In December 2011, the Government Accountability Office (GAO) released a performance audit which found that the Recovery Act phase of the program was successfully addressing most goals and the challenges identified by the DOE IG. Recently-launched evaluation studies by DOE aim to determine whether Recovery Act funding was used cost-effectively and whether it fulfilled goals for job creation.

The report concludes by reviewing the debate over the use of “outside” contractors to improve the objectivity and independence of weatherization program evaluations.

Date of Report: January
11, 2012
Number of Pages:
Order Number: R
Price: $29.95

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