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MEANING OF THE WEATHERIZATION ASSISTANCE PROGRAM AND ITS PURPOSES
ENERGY PRICES, ENERGY BURDENS, AND THE ROLE OF THE PROGRAM
FEBRUARY 22, 2010
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
$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)
RATE OF INCREASE IN RESIDENTIAL ENERGY PRICES BY FUEL TYPE
Since 1992(Nominal dollars)
Sources: DOE/EIA Short Term Energy Outlook, January 2008 and December 2009, Bureau of Labor Statistics, Bureau of the Census
AGGREGATE RESIDENTIAL ENERGY EXPENDITURES BY LOW-INCOME HOUSEHOLDS
Federally Eligible
By Primary Heating Fuel
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
2001 2004-5 2005-6 2006-7 2007-8 2009-10
Fuel OilNautral GasPropaneElectricity
SOURCE: ORNL TABULATION BASED ON EIA STEO AND RECS
Millions of Dollars
EXPECTED ENERGY EXPENDITURES FOR 2009-2010
Low-Income Households
$714
$1,684
$1,239
$2,596
$1,813
$3,194
$552
$1,569
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
NaturalGas
Propane Fuel Oil Electricity
By Primary Heating Fuel
Heating/CoolingTotal Bill
Source: ORNL Tabulation from EIA November 2009 STEO & 2005 RECS
ENERGY BURDEN BY INCOME GROUP 2005-2006
0%
5%
10%
15%
20%
25%
POVERTY ELIGIBLE MEDIAN
% of Income
Source: Economic Opportunity Studies
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
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 6.2 MILLION SERVED
• ESTIMATED SAVINGS- $1.684 BILLION P.A.
• FOCUS ON ‘PRODUCTIVE’ HOUSEHOLDS
• INFLATION INSURANCE
• NON-ENERGY BENEFITS
A FEW QUICK PRE-PUBLICATION ‘FACTS’
• ESTIMATED PRIMARY HEAT/COOLING SAVINGS- 30 MBtu P.A.
• ESTIMATED BASE LOAD SAVINGS- 870 KwH• ESTIMATED CURRENT ANNUAL SAVINGS-
$411 in 2010• BENEFIT/COST RATIO- 1.54 TO 1• VALUE OF NON-ENERGY BENEFITS- $4,082
over the life of the measures.• SOCIETAL B/C RATIO- 2.51 TO 1
SHORT-TERM MARKET CONDITIONS
• Inventories levels high for fuel, ample for natural gas
• Imports of fuel oil, natural gas and LNG have provided a safety valve supply source
• Domestic natural gas resources have exploded- Marcellus Shale
• Fairly typical winter so far ‘on average’.
• Slow economy dampens demand
• Natural gas demand is highly dependent on industrial and power generation growth
SUPPLY DEMAND
HISTORY OF MIDWINTER NATURAL GAS COMMODITY PRICE
Price Trend For March, 2010 Futures Contract
Source: Wall Street Journal, February 17, 2010
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
ORNL CONTACTS
JOEL EISENBERG- 703 992 [email protected]
BRUCE TONN- 865 574 [email protected]
MIKE GETTINGS- 865 574 [email protected]
MARK TERNES- 865 574 [email protected]
http://weatherization.ornl.gov
