You asked for additional information on the energy programs funded under the federal stimulus bill (H. R.  1) that are described in OLR report 2009-R-0125. You were specifically interested in who is eligible for funding under these programs and what activities are eligible for funding. This report uses information from a summary of the energy provisions of the bill prepared for the Council of State Governments (CSG). Information on these and other provisions of the bill is available on CSG's web site, www. staterecovery. org.

SUMMARY

The bill appropriates over $ 17. 5 billion for existing and new federal energy programs that are directly relevant to Connecticut.  This report focuses on the State Energy, Weatherization Assistance, and Energy Efficiency and Conservation Block Grant programs. In addition, the bill provides funding for energy efficiency in federally-supported housing and has many other energy provisions, notably competitive grant programs for energy technologies.

The bill provides $ 3. 1 billion for the Department of Energy's (DOE) State Energy Program, which provides funding to state energy offices (in Connecticut, the Office of Policy and Management (OPM). The Office of Fiscal Analysis (OFA) estimates that Connecticut will receive $ 39 million of this funding. This funding can be used for a very wide range of activities, including loan and grant programs for energy efficiency and renewable energy, energy planning, energy efficiency programs in the

transportation sector, and emergency preparedness planning. The funding is conditioned on governors' assurances regarding utility rate regulatory policies, building code requirements, and prioritizing existing state programs in accordance with the bill.

The bill provides $ 5 billion in funding for the Weatherization Assistance Program (WAP). OFA estimates Connecticut will receive $ 64 to $ 66 million for this program. Unlike the State Energy Program, the federal law governing WAP is very specific as to how it can be used. The funding must be used to improve the energy efficiency of the homes of low and moderate-income households. The funding must flow through local weatherization service providers (in Connecticut, the program is administered by community action agencies).

The bill provides $ 3. 2 billion in funding for the Energy Efficiency and Conservation Block Grant Program. In Connecticut, the bulk of this funding will go directly to medium and large municipalities to help them implement energy efficiency programs.  Part of this funding will go to OPM, primarily for grants to smaller municipalities. As is the case with the State Energy Program, grantees under the block grant program can use its funds for a wide range of activities promoting energy efficiency in buildings and transportation.

STATE ENERGY PROGRAM

The goals of this program are to increase energy efficiency in the economy; reduce energy costs; improve the reliability of electricity, fuel, and energy services delivery; develop alternative and renewable energy resources; and promote economic growth with improved environmental quality. The program also helps states prepare for natural disasters and improve the security of the energy infrastructure.

Funding under this program goes to state energy offices, which must develop an annual plan for using the money. The plan must contain several elements, such as:

1. the establishment of mandatory lighting efficiency standards for public buildings;

2. programs to promote carpools, vanpools, and public transportation;

3. incorporating energy efficiency criteria into government procurement procedures; and

4. adopting mandatory thermal efficiency standards for new and renovated buildings.

Beyond these measures (all of which Connecticut has adopted), states can include a very wide range of energy programs in their plans. These include programs:

1. to increase transportation energy efficiency, including programs to accelerate the use of alternative fuel and hybrid vehicles for state government fleets, mass transit, and privately owned vehicles;

2. that encourage the introduction of energy saving technologies in the industrial, buildings, transportation, and utility sectors and encourage state and industry partnerships to demonstrate advanced energy efficiency and clean energy technologies;

3. for financing energy efficiency and renewable energy investments, including programs that provide rebates, grants, or other incentives to install energy efficiency and renewable energy measures in buildings owned by state or local governments or nonprofit organizations;

4. for energy audits for buildings, industrial facilities, and industrial processes;

5. for integrated energy plans that evaluate a state's energy needs, available energy resources (including greater energy efficiency), and energy costs and its use of energy resources, including energy efficiency, that meet applicable policy requirements at the lowest cost;

6. to promote energy efficiency in housing, such as incentive programs for builders, utilities, and mortgage lenders to build, service, or finance energy efficient housing;

7. to reduce peak demands for energy and improve the efficiency of energy supply systems;

8. to promote energy efficiency in state or local economic development and environmental planning;

9. to train building designers and contractors on building energy efficiency; and

10. to develop building retrofit standards and regulations.

The funds appropriated by H. R. 1, unlike those provided in the past, do not require a state match. But to be eligible for the new funds, a state's governor must certify that (1) the state utility commission will implement polices that ensure state-regulated electric and gas utilities have appropriate financial incentives to help their customers reduce energy use (i. e. , “decoupling” a utility's revenues from energy consumption) and (2) the state will implement energy codes for residential and commercial buildings that meet or exceed certain conservation and efficiency standards. States also must prioritize funding to energy efficiency and renewable energy projects, such as building retrofits.

WEATHERIZATION ASSISTANCE PROGRAM

DOE provides grants to states for distribution to low- and moderate -income households to purchase and install materials and implement other weatherization measures to improve energy efficiency under this program, 42 U. S. C. §§ 6861 et seq. The bill expands the number of households eligible for assistance by increasing maximum income eligibility level from 150% to 200% of the federal poverty level. It increases maximum assistance per dwelling unit from $ 2,500 to $ 6,500. It also broadens the eligibility of units that had been previously weatherized for additional efficiency measures.

DOE provides funding to states, which manage the day-to-day details of the program.  Low-income families receive services from a network of local weatherization service providers, e. g. , community action agencies. Through this program, the providers install energy efficiency measures in the homes of qualifying homeowners free of charge.  The measures include such things as caulking and weather stripping; furnace and cooling system tune-up, repair, and replacement; replacement of windows and doors; and building insulation.  In Connecticut, the program is administered by the Department of Social Services, which contracts with community action agencies as part of the Connecticut Energy Assistance Program.

ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT

The bill provides $ 3. 2 billion for grants to local governments and states to develop and implement energy efficiency and conservation strategies. The program seeks to decrease energy consumption and reduce fossil fuel emissions by increasing energy efficiency in the building, transportation, and other energy-consuming sectors of the economy. As of February 2009, DOE had not published rules governing this program.

Of the funds provided by the bill, $ 2. 8 billion will be distributed by a statutory formula. Under this formula, the bulk (68%) of the formular funding will go directly to medium and large municipal and county governments.  The direct grants are provided to municipalities with a population of 35,000 or more according to the most recent U. S. Census data.  Most of the remainder of the formula funding goes to state energy offices.  The state energy office must allocate 60% of its funding to those municipal or county governments that are not eligible for direct grants.

The activities eligible for use of these funds include:

1. residential and commercial building energy audits;

2. financial incentive programs for energy efficiency improvements;

3. grants to nonprofit organizations and governmental agencies to perform energy efficiency retrofits;

4. energy efficiency and conservation programs for buildings;

5. development and implementation of programs to conserve energy in transportation;

6. funding technologies that significantly increase energy efficiency, including distributed generation, combined heat and power (cogeneration), and district heating and cooling systems;

7. material conservation programs including source reduction, recycling, and recycled content procurement programs that increase energy efficiency;

8. reduction and capture of methane and greenhouse gases, excluding carbon capture or sequestration from power plants,

9. energy efficient traffic signals and street lighting; and

10. renewable energy technologies in government buildings.

Grantees must provide DOE with a proposed energy efficiency and conservation strategy within one year of receiving funding. DOE must approve the proposed plan within 120 days or return it to the grantee for revision. Within two years after receiving the funds, grantees must provide DOE with a report detailing how the strategy was implemented and how much energy it saved. Additional information about this program is available at http: //apps1. eere. energy. gov/wip/block_grants. cfm or by calling 1-877-337-3463.

In addition to the formula grants, the bill provides DOE with $ 400 million for a competitive grant program. All municipalities can apply for these grants; DOE is developing rules, including application procedures, for these grants.

KM: ak