Weatherization Study Draws Fire From DOE, Others Over Methodology

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By Rebecca Kern

June 25 — A study that concluded the federal Weatherization Assistance Program cost more money than it saved was based on a faulty methodology, relying on data from only one state and one utility, the Energy Department and energy efficiency groups told BNA July 25.

The study went too far in extrapolating the outcome of one state's Weatherization Assistance Program to characterize the entire program, they said.

In addition, the report was never peer-reviewed, Eben Burnham-Snyder, the Energy Department's deputy director of the office of public affairs, told Bloomberg BNA June 25.

At issue is a study released by researchers at the University of California-Berkeley, the University of Chicago and the Massachusetts Institute of Technology, which conducted a field test of the federal Weatherization Assistance Program.

The researchers conducted a randomly controlled trial of more than 30,000 households in the state of Michigan and found that the costs of the associated energy efficiency investments were about double the energy savings. They also found that the agency's model projected savings were about 2.5 times the actual savings.

The main concern for the Energy Department is that the study focused on a limited geographic area set in only one state with a single utility provider and then these results were extrapolated into a larger criticism of the weatherization program, Burnham-Snyder said.

The Weatherization Assistance Program is a whole-house energy efficiency program that began in 1976 for low-income households in all 50 states, the District of Columbia, five U.S. territories and three Native American tribes.

The department estimates that annual energy savings per home in the program ranged from $275 to $450. To date, it has assisted 7 million families by lowering their energy bills, according to the department.

Agency to Release National Analysis

This August, the department plans to release a national analysis of the program that it began in 2010 based on 30,000 homes from around the country.

Preliminary results have found that for every $1 that is invested in labor and materials to complete an energy-saving weatherization measure, there is $1.70 in energy savings over the lifetime of the measure.

Burnham-Snyder also pointed out that the analysis of the program in Michigan took place over the funding time period during which the national program received increased stimulus funding from the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5), which he said increased program spending.

Similarly, Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, which works to advance energy efficiency policies, said studying the program during the stimulus period created an anomaly for the program's funding.

“They looked at it at a time when the costs were relatively high because there were other purposes like job creation going on,” he said in a June 25 interview.

Doesn't Address Non-Energy Benefits

Another problem with the report is that it didn't take into account the nonenergy benefits of the weatherization program, Nadel said.

“With the low-income weatherization program, energy benefits are only a portion of benefits. Weatherization is done for many other reasons, which includes home repairs, safety repairs; it reduces problems with nonpayment of bills because the bills are lower,” he said.

Megan McGuinness, the associate director for energy and environment at the Bipartisan Policy Center, a Washington think tank, agreed that the study didn't encompass the other benefits of the weatherization program.

“Basically, it's a very unique program,” she told Bloomberg BNA June 25. “It's not characteristic of your typical utility energy efficiency program by any means. It's targeting low-income residents. It wasn't really construed as an emission reduction effort; it's really to benefit low-income families both in terms of energy savings and bill savings but also in terms of health and safety.”

She added, “When you look at the cost numbers, a portion of the spending DOE authorized was actually used by states for health and safety improvements that weren't required to result in energy savings.” For example, she said spending was used for asbestos removal, where there wouldn't be an expectation of energy savings.

More Third-Party Studies Needed

Deron Lovaas, the senior policy adviser with the Urban Solutions Program at the Natural Resources Defense Council, said he was disappointed that this study received so much media attention when it misrepresented the program at large.

“Now that we have enough of a track record with these programs, these kind of studies do make sense. We need to take a look at what worked, what didn't, what could we learn,” he said.

“So it's really disappointing that this study, with so many limitations methodologically, has gotten so much attention because we do need to do study of these programs and figure out how to improve them,” he said.

To contact the reporter on this story: Rebecca Kern in Washington at rkern@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

The report, “Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program,” is available at http://op.bna.com/der.nsf/r?Open=rken-9xtllb.