ENERGY EFFICIENCY:

Besieged DOE weatherization program faces Republican attacks

Soon after Congress passed the American Recovery and Reinvestment Act, a contractor walked into a home in St. Louis to make it more energy-efficient.

The contractor used a routine test: pumping air into the house with a fan, then measuring how quickly it seeped out, and thus how leaky the house was.

There was something the worker didn't know: The old house may have contained asbestos. If it did, the blower test might have scattered it throughout the house.

That's exactly why Missouri had forbidden the test in homes that might have asbestos -- a rule the contractor should have known.

As a one-off case, this might not have caused great concern. But in an August report, the Department of Energy's inspector general had found quality to be a common problem in Missouri's retrofits. And since 2009, when the Recovery Act was passed, the IG had released nearly a dozen audits of the Weatherization Assistance Program.

"The IG reports haven't been pretty," said Michael Sciortino, a senior analyst with the American Council for an Energy-Efficient Economy, or ACEEE. "The quality of these jobs has been -- it needs improvement. There definitely needs to be some lessons learned here."

In some cases, the problems made up a small share of largely successful state programs. But other states have faced rampant quality problems, missing money, inadequate training and an inability to get the money out the door quickly.

Whether these problems turn out to be the exception -- as DOE has claimed -- or the rule could result in a major Republican talking point on energy.

Use-it-or-lose-it policies spark problems

The weatherization program sprang from the 1970s oil crisis. It has sought out eligible, low-income Americans and outfitted their homes with the most cost-effective improvements.

DOE distributes the funds to the states with some basic conditions, but generally, the states have wide latitude to implement and enforce the program as they wish.

In a normal year, the program would have received $300 million or or $400 million, but in the Recovery Act, Obama had a different plan. Weatherization would serve as the quickest job creator in a "green jobs" program that needed time to build factories and start research on breakthrough innovations.

Instead of millions of dollars, the legislation gave it $5 billion and a goal of retrofitting 600,000 homes. States have to spend their remaining funds by March 2012 or surrender the money to the Treasury Department.

Sciortino said the haste to spend stimulus dollars and create jobs -- an unusual speed for the 40-year-old program -- contributed to the quality problems in some states.

In Missouri, the inspector general said, a lack of training led to unreliable retrofits. Between July 2009 and June 2010, when the state reinspected homes, it found about 30 percent "required further action because the work was not acceptable."

Furnaces were leaking dangerous amounts of carbon monoxide, according to the IG. Hot-water heaters were missing vents and pressure release pipes. Insulation hadn't been correctly installed.

These cases cast doubt on the larger program, auditors said, because Missouri reinspected only 5 to 10 percent of the retrofitted homes.

In May of 2010, Missouri disputed some of the IG's findings. It also began working with DOE, though, to improve training and oversight of the contractors.

Matt Belcher, a contractor affiliated with the Home Builders Association of St. Louis and Eastern Missouri, said the state rolled out the program so fast that it skipped over the experienced, unemployed contractors that he knows.

"They needed a pool of qualified people to do all this work, and you had people coming out of the woodworks to try to get qualified," he said.

For example, he said, any experienced builder in Missouri knows how to retrofit a wall. One would know the state's humid air -- and that simply stuffing insulation in a wall and caulking the windows shut will result in moisture getting caught inside, causing mold down the road.

Homebuilders kicked this issue a long time ago, Belcher said, but a newcomer might not know that.

"That's almost worse than a high utility bill," he said. "By the time you discover it, it can cost big bucks to fix."

Hoped-for domino effect falls short

In two other states, the inspector general found less to be concerned about. In Virginia, a May 2010 audit had found $1.2 million unaccounted for; by last month, the state had located all but $26,000 of it. In Indiana, contractors had retrofitted 15,000 of the 20,000 targeted homes; the IG's review "did not reveal material problems." Both reports came out in August.

The defenders of the program point to its real, human impact. Consider Anthony Mooney, of Hawk Point, Mo., who also received a home retrofit under the Recovery Act.

"We were eating only hot dogs and baloney," he told the Natural Resources Defense Council. Since the retrofit, he said, "last month my electric bill went from $266 to $165, and I can eat real beef sometimes."

Still, the program's overall record falls short of President Obama's ambitions.

As a candidate, Obama called for weatherizing 1 million homes each year. When the Recovery Act presented an opportunity, he pounced, awarding enough cash to retrofit 600,000 homes by March 2012.

The administration wanted a domino effect. By retrofitting these homes, it reckoned, construction workers would gain training and go on to retrofit millions more, creating a self-sustaining market.

But the program stumbled out of the gate. Some states couldn't get past hiring freezes. Others were caught off guard by federal wage requirements: Workers had to receive at least the local prevailing wage, something that hadn't applied before. Others found that workers needed more training before implementing this new campaign, which caused further delay.

By August 2010, the program had weatherized 200,000 homes, just a third of its target under the Recovery Act.

DOE claims it has resolved the major issues, and the rate of completion has picked up: As of July, it has weatherized more than 484,000 homes.

Nevertheless, the ramp-up couldn't save the weatherization program from becoming a Republican punching bag.

Republicans take aim

In May of last year, Rep. Tom Price (R-Ga.) mocked H.R. 5019, a new, White House-backed bill to help pay for home retrofits. More than a year into the Recovery Act, he said, Texas had weatherized just 47 homes.

"That track record would be laughable if it wasn't so sad," he said in a statement. "There is no reason to believe they'll do better handing out another $6.6 billion in taxpayer money this time around. Moreover, with bureaucrats trying to rush this money out the door, the opportunity will be ripe for fraud and abuse."

In July, freshman Rep. Todd Young (R-Ind.) used an amendment, attached to the bill that funds DOE, to block the paychecks of weatherization program staff for implementing their Recovery Act plans. The amendment passed, although the bill is still awaiting Senate action.

Sciortino said all the criticism overlooks the silent majority of states where the program has worked fine.

"The IG reports are definitely fodder for the detractors of these programs, and there's plenty of success programs for advocates," he said. "The silence is probably a sign that these things are working out pretty well."

Ashley Richards, general manager of a weatherization company in Maine, said he doesn't think the program's troubles have given Republicans a golden talking point.

"Personally, I'm not a big fan of government spending," he said. "However, I like things where it puts people back to work, saves people money so they can go out and spend it."

As weatherization dollars go, so go the jobs

In Maine, 70 percent of homes get their heat from oil. An average weatherization job saves about 410 gallons a year; at $3.50 a gallon, he said, that household now has $1,435 more to spend.

"The folks doing the installation work are qualified, and the work is inspected. And there's always a test-out done. We've not had any issues in Maine with poor-quality work," he said.

But his company, WarmTech Solutions, has had issues with hiring. At the program's height, he had 10 contractors weatherizing homes, making $15 an hour and $4 in benefits.

When the program scaled down, so did he -- to three workers.

"If that stimulus had stayed in effect, I would have been able to carry those 10 people," he said. "But seven of them have been unemployed for the last six months."