Expanded weatherization program–stimulus and investment

Six months into the federal stimulus program (the American Recovery and Reinvestment Act, or ARRA), most of the discussion has centered  on infrastructure projects and the impact on economic recovery and jobs, if any. Today, we’d like to focus on a stimulus program that has the potential to help jump start the economy, and continue paying off years down the road.

The Weatherization Assistance Program (WAP) makes grants to states, which award funding to local governments and  nonprofit Community Action Agencies (CAAs). These organizations take applications from low- and moderate-income  homeowners (and renters) and conduct an energy audit to determine if weatherization will be cost-effective. If so, they may replace doors, windows, and weatherstripping, and install energy-efficient refrigerators, water heaters, and heating and cooling.

The stimulus adds $5 billion nationally to WAP. Oklahoma’s share is $61 million to be spent over three years, dramatically higher than the previous budget. The stimulus significantly expands the options under the program as well, by expanding the maximum income to 200 percent of the poverty level and allowing up to $6,500 in improvements per housing unit.

This program has benefits beyond the obvious one of reducing energy use for the nation as a whole. Here are a few described by Texas’ Center for Public Policy Priorities (CPPP), a fellow member of the State Fiscal Analysis Initiative:

• Low-income families save money: Low-income families spend 12.2 percent of their income on energy costs, compared to the national average of 3.7 percent. These families save an average of $413 in energy costs the first year. This gives them the opportunity to spend on greater needs and even to save some money.
• Families become safer: Weatherization reduces the risk of illness or death from extreme hot or cold. Whole-house energy audits test for lead, mold, carbon monoxide, and gas leaks, which are fixed during the weatherization.
• Jobs are created: Each million dollars spent in WAP creates 17 to 26 jobs. That means the ARRA infusion of funds into the program could create over 1,000 jobs in Oklahoma. These jobs can serve as gateways for low-income workers to gain skills and embark on careers with growth potential.

Is this program without risks and flaws? No. Pennsylvania’s Auditor General found numerous instances of poor internal controls, contracting problems, and lack of follow-up in that state’s existing WAP program. Many states have expressed concern about the risks involved in putting so much more money into this program.Curiously, neither the Department of Energy’s Inspector General nor the Government Accountability have seriously looked at WAP for years.

We encourage early national, state, and local efforts to make this program accountable and to minimize waste. With careful planning and precautions,  the ARRA increase for the Weatherization Assistance Program could be a model program that invests in reducing our nation’s energy needs, creating skilled jobs for people who need better financial security, and helping low-income families build assets rather than pay high utility bills.