Preparing for a Flood of Energy Efficiency Spending

By KATE GALBRAITH
Published: February 25, 2009

KNOXVILLE, Tenn. — To the casual eye, the basement of this city’s Firehouse 9 looks like a jumble of old hydrants, Dr Pepper cartons, rakes and random gear. To specialists in energy efficiency, the 1960s-era building is a mess of a different sort: wasteful hot water heaters for the firefighters’ showers, ancient refrigerators and outdated lights.

Wrapping up an elaborate energy audit, Knoxville is about to find out which of 99 city buildings are wasting the most energy. It hopes to begin repairs this summer, just in time to catch a tsunami of federal stimulus money earmarked for such unglamorous tasks as replacing light bulbs and fixing leaky insulation.

Knoxville’s timing is excellent. The city began the arduous work of cataloging deficiencies before the stimulus bill passed, and it is well along in planning its next steps. But experts worry that other beneficiaries, especially cities, are not ready to oversee the huge sums of energy-efficiency money about to come their way.

The money in the bill is enough to pay for a tremendous expansion of efficiency efforts across the country. But as with other parts of the stimulus package, the efficiency plan is creating tension between spending the money quickly, to get rapid economic stimulus, and spending it well, to do the most good over the long run.

“There’s enormous opportunity here for expansion of energy efficiency in this country,” said Lowell Ungar, the policy director for the Alliance to Save Energy, an advocacy group. “But there is certainly the potential for waste.”

President Obama signed the stimulus package into law on Feb. 17, hailing it as a shot of money big enough to help shake the economy from its lethargy while advancing many of his campaign priorities. Accelerating the country’s energy transition is at the top of his list. Many experts in the field agree with him that carefully chosen investments in efficiency will ultimately save more than they cost, by cutting energy bills.

At least $20 billion in the stimulus bill was earmarked for programs like improving the efficiency of government buildings and the homes of poor people, and trying to find better ways to save energy. That is far more, advocates say, than any bill in history. Within a few months, the money is likely to start landing in the bank accounts of thinly staffed state and city agencies that are accustomed to scraping for a dime here, a dollar there.

Utah expects that its state energy office will receive $40 million for energy efficiency, renewable energy and related programs — 123 times the size of the office’s current budget, said Jason Berry, who manages the four-person unit. He is about to go on a hiring spree.

The package contains $5 billion to weatherize low-income homes through the Department of Energy, enough to give the state programs that manage that work 10 to 30 times the money they received last year, said Christina Kielich, a department spokeswoman.

For advocates of this relatively obscure program, “it’s like they finally got to the other side of the desert and it’s pouring rain,” said Seth Kaplan, a vice president of the Conservation Law Foundation, an environmental group.

The stimulus package also contains $4.5 billion to modernize federal buildings and $2.5 billion for research into energy efficiency and renewable energy. The biggest chunk, $6.3 billion, will be distributed by the Energy Department in grants to state and local governments, which can spend the money on things as diverse as thicker window panes for state capitols and rebates for homeowners who change their light bulbs.

Homes and commercial buildings account for 39 percent of national energy consumption. Experts say that improving their efficiency is not only cost-effective but also a good way to reduce the nation’s emissions of the greenhouse gases that cause global warming.

But figuring out how to spend the money effectively — learning which university buildings need their doors caulked, for example, or which firehouse walls have insulation that is too thin — can involve time-consuming, tricky analysis by skilled technicians.

“People are very conservative about their buildings,” said Donald Gilligan, the president of the National Association of Energy Service Companies, a trade group. “Nobody wants to put a failed technology into the school buildings or have the lights not work.”

In Knoxville, a team of auditors hired by the city is spending six months peering into the grimy nooks of fire and police stations and even the convention center, where one employee referred to the downstairs boiler area as a “money-eating room.”

Knoxville — which says the stimulus money may help accelerate or expand its program — hopes to reduce the city’s energy bills as much as 25 percent, and the city is “definitely on the front end of the wave as far as efficiency and municipalities addressing efficiency,” said John Plack Jr., a director of project development for Ameresco, which is conducting the Knoxville energy audit.

In the Southeastern region of the country, where Mr. Plack works, low electricity prices have often made saving energy an afterthought, unlike in California and much of the Northeast. For example, Nashville, nearly 200 miles west of Knoxville, has not conducted an energy audit of its city buildings, though it hopes to use stimulus money to look through its own stock of fire stations and libraries.

“There’s a lot of municipalities out there who are completely unaware this is moving forward,” Mr. Kaplan said, referring especially to smaller cities. “They just don’t have the infrastructure in place to deal with this.”

The Energy Department, which is doling out most of the grants, has been assailed on Capitol Hill for delays in disbursing other types of assistance for clean energy. Ms. Kielich said in an e-mail message that the department hoped efficiency grants would begin flowing to city and state energy offices within 120 days, and that it planned to begin disbursing weatherization money “expeditiously and responsibly.”

On the receiving end, absorbing the huge increase in money for weatherization could be particularly challenging, said Ian Bowles, the secretary of energy and environmental affairs for Massachusetts. Though he contends it can be done, “the weatherization folks are going to have to quintuple their effort in order to put that money out,” he said.

In some cases, the managers of efficiency programs may not need to look far to find ways to spend the money.

In Knoxville, the Community Action Committee, whose operations include helping poor people weatherize their homes, works from a building with a $14,000 monthly utility bill — some of it because of an enormous skylight that lets in too much blistering Tennessee sunshine in the summer.

“It’s embarrassing,” said Barbara Kelly, executive director of the committee. “We do better for our clients than we do for us.”