MEANING OF THE WEATHERIZATION ASSISTANCE PROGRAM AND ITS PURPOSES

MEANING OF THE WEATHERIZATION ASSISTANCE PROGRAM AND ITS PURPOSES

ENERGY PRICES, ENERGY BURDENS, AND THE ROLE OF THE PROGRAM

FEBRUARY, 2012

The Statutory Purpose:

…to develop and implement a weatherization assistance program to increase the energy efficiency of dwellings

owned or occupied by low-income persons, reduce their total residential energy expenditures, and improve their health and safety, especially low-income persons who

are particularly vulnerable such as the elderly, the handicapped, and children.

Title 42 of the U.S. Code, Chapter 81, Subchapter III, Part A, 6861

RATE OF INCREASE IN RESIDENTIAL ENERGY PRICES BY FUEL TYPE

Since 1992(Nominal dollars)

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

Natural Gas (mcf) Fuel Oil (10 gallons)Electricity (100 kWh) Inflation ($5)Income (lowest quintile)

Sources: DOE/EIA Short Term Energy Outlook , October 11, Bureau of Labor Statistics, Bureau of the Census

AGGREGATE RESIDENTIAL ENERGY EXPENDITURES BY LOW-INCOME HOUSEHOLDS

Federally Eligible

SOURCE:TABULATION BASED ON EIA STEO OCT 2011 AND RECS for 2005

Millions of Dollars

EXPECTED ENERGY EXPENDITURES FOR 2011-2012

Low-Income Households

Source: Tabulation from EIA October 2011 STEO & 2005 RECS

ENERGY BURDEN BY INCOME GROUP 2011-2012

Source: Tabulation based on EIA STEO October 2011, 2005 RECS, Census for 2010

PRIMARY HEATING FUEL FOR LOW-INCOME HOUSEHOLDS

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Percent Of Households At Or Below 150% of Poverty By Region

Natural Gas 53.4% 59.1% 79.6% 42.2% 56.7%

Propane 5.4% 0.4% 11.4% 6.4% 3.7%

Fuel Oil 6.0% 26.2% 6.5% 1.3% 0.0%

Electricity 35.2% 14.4% 2.4% 50.1% 39.6%

U.S. Northeast Midwest South West

Source: DOE/EIA Residential Energy Consumption Survey for 2001

VARIATIONS IN SAVINGSSELECTED STATES

Sources: ORNL Weatherization Assistant Tabulations, EIA Annual Energy Outlook 2010

CL J2

APRIL 2012 LIGHT SWEET CRUDE OIL CONTRACT

APRIL 2012 NATURAL GAS CONTRACT

Eligible For LIHEAP With Bills Under $5,500

Distribution Of Low-Income Energy Bills

Estimated for FY 2008

Num

ber

Of

Hou

seho

lds

4,000,000

3,000,000

2,000,000

1,000,000

0

Std. Dev = 970.18

Mean = 1791

N = 33513408.0

DROP IN THE BUCKET?

• STEADY WINS THE RACE- APPROXIMATELY 7 MILLION SERVED

• ESTIMATED SAVINGS- $1.684 BILLION P.A.

• FOCUS ON ‘PRODUCTIVE’ HOUSEHOLDS

• INFLATION INSURANCE

• NON-ENERGY BENEFITS

A FEW QUICK ‘FACTS’

• ESTIMATED PRIMARY HEAT/COOLING SAVINGS FOR RECOVERY ACT- 29 MBtu P.A.

• ESTIMATED CURRENT ANNUAL SAVINGS-$437 in 2010

• BENEFIT/COST RATIO- 1.8 TO 1• VALUE OF NON-ENERGY BENEFITS- $4,082

over the life of the measures.• SOCIETAL B/C RATIO- 2.5 TO 1

Title 42 Chapter 81, Subchapter III Part A 6863

U.S. Code

“Standards…shall include a set of procedures to be applied to each dwelling unit to

determine the optimum set of cost-effective measures, within the cost guidelines set for the program….Such standards shall…take

into consideration the following factors-

The cost of the weatherization material;

Variation in climate; and

The value of energy saved by the application the weatherization material.

THINGS TO REMEMBER

• THE DIFFERENCE BETWEEN AN AUTHORIZATION AND AN APPROPRIATION

• THE DIFFERENCE BETWEEN A BUDGET PROPOSAL AND A BUDGET

• THE DIFFERENCE BETWEEN A BLOCK GRANT AND A CATEGORICAL PROGRAM

THE LAW

• PRIORITIZES REDUCED SHELTER COSTS AND HEALTH AND SAFETY

• EMPHASIZES THE ROLE OF STATES AND LOCALS

• PROVIDES SECRETARIAL MANDATE FOR STANDARDS IN MATERIALS AND TECHNIQUES

• PROVIDES SECRETARIAL MANDATE FOR OPTIMIZING COST-EFFECTIVENESS

A LITTLE MORE LAW

• STANDARDS TO ACHIEVE UNIFORMITY WITHIN CLIMATE ZONES

• AUTHORITY FOR LEVERAGING • LIMITS ADMINISTRATIVE USES TO 10%• MANDATES AUDIT PROCEDURES,

TECHNIQUES• ESTABLISHES A COST CEILING• MANDATES MONITORING AND EVALUATION

There is a tide in the affairs of men.Which, taken at the flood, leads on to fortune;Omitted, all the voyage of their lifeIs bound in shallows and in miseries.On such a full sea are we now afloat,And we must take the current when it serves,Or lose our ventures.

Julius Caesar Act 4, scene 3, 218–224

William Shakespeare, CSA

ORNL CONTACTS

JOEL EISENBERG- 703 992 6703Eisenbergjf@ornl.gov

BRUCE TONN- 865 574 4041Tonn.bruce@gmail.com

MIKE GETTINGS- 865 574 4506g5f@ornl.gov

MARK TERNES- 865 574 0749tmp@ornl.gov

http://weatherization.ornl.gov