Weatherization Heats Up

Weatherization Heats Up

Location: New York
Author: Ken Silverstein, EnergyBiz Insider, Editor-in-Chief
Date: Monday, February 23, 2009

Long relegated to the back halls of Congress, weatherization has moved up the ranks. President Obama has now signed the stimulus bill with $5 billion included in it so as to make 2.5 million low-to-moderate income homes more energy efficient.

The federal government is greatly increasing its involvement in the area. By promoting energy efficiency and weatherization programs to insulate homes and save money, it says that families can permanently cut their energy bills while putting thousands of foot soldiers to work ensuring that the insulation and reparation gets underway.

About $227 million authorized last year under the Low Income Heating Assistance Program goes toward reducing energy costs, or weatherization. The $5 billion in the stimulus bill just signed will be added on top of that. The goal is get the work done within two years -- something critics say will be impossible, given that the protocol now in place is ill-equipped to handle such an increase in size.

During the last 30 years, the U.S. Department of Energy's Weatherization Assistance Program has provided such services to more than 5.6 million low-income families. By cutting the energy bills of low-income families instead of offering aid, weatherization reduces dependency and liberates these funds for spending on more pressing family issues, says the U.S. Department of Energy, noting that residential customers consume about a fifth of the nation's electricity supply.

Cutting that demand would make a big difference. On average, weatherization reduces heating bills by 32 percent and overall energy expenses by $358 per year at current prices, the agency adds, although it takes a sizable up front investment to achieve that savings. The spending, though, spurs low-income communities toward job growth and economic development. Its Weatherization Assistance Program Technical Assistance Center adds that such programs have a net energy benefit of $1.65 for every $1 spent.

A resource called The Cold Facts says that average Americans may spend around 5 percent of their take-home pay on utility bills. Low income residents, conversely, will spend an average of 19.5 percent of their annual income on utility bills. When it's cold, they spend more. A sustainable energy burden is 6-8 percent of household income, say community activists.

Consider Seattle's HomeWise Weatherization program, which offers qualifying residents free services that include air sealing, insulation, venting and weather-stripping: In 2008 the city committed $2.72 million to weatherize 877 Seattle low-income homes through this program. To participate, annual household income for electric heat must not exceed about $43,000 for singles, or about $49,000 for a two-person household. The city estimates that its efforts have saved 2 million kilowatt hours of power while also significantly reducing the level of greenhouse gas emissions.

"Some residents, particularly the elderly living on fixed incomes, feel the impact of high utility bills more than others," says Mayor Greg Nickels, who has oversight of municipally-owned Seattle City Light. "These weatherization services ensure folks don't have to suffer through the cold days because they can't afford to heat their homes."

Shouldering the Burden

Roughly 28 million American households are eligible under the Obama administration's plan. The aim of fixing about 1.25 million of homes over the next two years will certainly be a daunting one. To get the job done, the administration said in a BusinessWeek report that it could spend up to $5,000 per house. At the same time, it is prepared to raise the income limits to qualify. Private companies that perform audits and do contracting work say that they are eager to start.

To the extent that utilities can help address the problems, they will be reducing their own bad debt and collections expenses. Altogether, they provided about $1.5 billion a year in the form of low-income assistance and discounted rates to consumers in recent times. Pacific Gas & Electric, for example, has a program that cuts electric and gas bills by 20 percent. Washington state-based Puget Sound Energy, meanwhile, gives more than $6 million annually to help low-income customers.

Utilities provide varying degrees of support. The reasons for doing less are mostly philosophical. That is, some make a point of saying that it is the government's role to maintain a safety net and that their central function is to provide safe, reliable and low cost service to their customers. At the same time, most utility customers are more concerned with their own bills and say that the utilities and their stockholders should shoulder the burden.

The cost of energy remains volatile, hurting low-income households and resulting in a growing number of them to require home heating assistance. Obama's commitment may be good news to many. But the federal government's pockets are only so deep. Broad cooperation is therefore needed. Utilities, cities and community activists have all rallied to support the cause, saying that the need is ever-expanding and important to resolve.

"While a properly weatherized house provides a safe and healthy environment for the current residents, it also preserves our housing stock, ensuring future residents will have a healthy home," say Adrienne Quinn, director of the Seattle Office of Housing. "Plus, the increased energy efficiency is a benefit to our environment and our entire community."

Ultimately, the expenditures in weatherization programs must be made. And now is the time to do it -- at a point when the nation is recession-ridden and the people are voicing concerns about job creation. It's an investment in the nation's infrastructure, or its housing stock, and one that will reap benefits in the form of lower bills, fewer emissions and economic development.