Mr. Chairman and members of the Task Force:
Weatherization is an essential element of low-income assistance programs needed to ensure energy affordability for low-income Virginians. Evaluation of the Weatherization Assistance Program by Oak Ridge National Laboratory proves that energy conservation significantly reduces the burden of electric bills on low-income households. Energy efficiency programs help low-income families reduce their demand for electricity, thereby reducing their energy costs and enabling them to use that income to meet other needs (remember my earlier remarks with respect to food and medicine especially). Weatherization and other energy efficiency programs that make electricity affordable reduces the amount of money needed for crisis payment assistance.
Energy efficiency programs also help utilities by reducing problems of nonpayment. Making electricity more affordable to low-income consumers means lower collections costs and less money that utilities will have to write off as bad debt.
Energy efficiency has non-energy benefits as well, including environmental benefits from reduced use of fuel; creation of jobs as weatherization workers, taxes paid, unemployment benefits avoided; enhanced property values for homes, extended dwelling lifetimes, and decreases in home fires caused by faulty heating equipment.
Acknowledging that there are great benefits from energy conservation programs, low-income people can’t afford them without help. What does it matter that they could save 30% on their electric bills by spending $2,000 to make their homes more energy efficient. They don’t have the extra money to invest in energy-saving expenditures.
In FY 97-98, around 2200 Virginia homes were weatherized. In contrast, we estimate approximately 350,000 households in Virginia have incomes that would qualify them for weatherization services. Waiting lists are long; it is not unusual for eligible families to wait two years or more for services. Funding is so scarce that the program is, for the most part, targeted to the elderly and families with small children–i.e., households with the most health and safety issues.
Currently, about $3 million is spent in Virginia each year on weatherization. Today’s federal Weatherization funding is less than half of what it was five years ago. The OMB analysis of the Congressional tax cut projects that, instead of more than 72,000 homes weatherized in FY 2009, that number will drop to less than 35,000.
In addition, the DOE appropriations bill which has passed the House of Representatives contains a new provision of which you should be aware. The bill requires that states provide a 25% cash match for the federal weatherization funds. The addition of low-income energy conservation funding through the Virginia Electric Utility Restructuring Act would be one way to accomplish this. Otherwise, the match for the Weatherization Assistance Program would have to come from the General Fund.
VACAP recommends two types of energy efficiency programs for low-income Virginians. The first is weatherization, at increased funding levels so that more eligible families can be served. The second are other energy efficiency measures, such as the replacement of inefficient refrigerators and water heaters, and conversion of lighting from incandescent to compact fluorescent bulbs.
Utilities, their customers and society as a whole can reap benefits from the reduced electricity use of Virginia’s low-income consumers. Energy conservation programs should be an essential part of the package of benefits that Virginia consumers receive from deregulation of the electric utility industry.