Leveraging Success Story: Washington

As the Weatherization Assistance Program (WAP) reaches the end of the American Recovery and Reinvestment Act (Recovery Act) period on March 31, 2012, States and local agencies are looking to the future. To sustain the program and ensure the uninterrupted provision of quality services to low-income people, the network is exploring innovative partnerships and initiatives. WAP creates good, green jobs and helps reduce our reliance on foreign oil.  Additionally, no one wants to scale down the ramped up programs and lay off trained workers, especially as the effects of the recession persist. The uncertainty of future Department of Energy (DOE) funding exacerbates these concerns. States around the nation have taken the lead in connecting with energy efficiency and low-income stakeholders to find alternate means to fund the WAP in a post-Recovery Act age. Below is the first of a series of profiles demonstrating how States leverage significant funds to bridge the gap between low- income energy efficiency retrofit needs and available resources, as well as to continue the pace and breadth of the Recovery Act WAP going forward.

Washington State leveraging efforts, which provided $8.3 million to WAP in PY2010, were originally funded with Petroleum Violation Escrow (PVE) charges, or oil overcharges, comprised of the fines oil companies paid in response to their violation of federal oil price caps in the years following the OPEC oil embargo in the 1970’s. In Washington, the state initiated a matching program to contribute $1 to each utility dollar spent, significantly leveraging the utility funds. The state requires at least a dollar for dollar investment by utilities. As the program progressed, Washington realized that some flexibility would be beneficial and now allows in-kind matches, such as the utility performing energy conservation work. Utilities also started to contract directly with local agencies to perform these services. Originally, the state hoped these dollars would provide an infinite revolving resource. However, due to the demand for matching funds far in excess of expectations, the funds did not become a permanent revolving loan fund. For the first 10 years of the initiative, efforts were funded strictly through PVE, but as PVE funding ended over time, by the mid to late 90’s the state transitioned to capital funds from a housing trust fund sustained by the sale of bonds. By 2000, capital funds became the sole source of funding for matching utility funds.

Once the amount of available funds is established each year, the state issues a county planning estimate based on heating degree days and low-income population by county to determine the proportional amount of funds appropriate for each jurisdiction, then sets leveraging goals. The local agency in that area then works with utilities, landlords, and other interested parties to raise matching funds. Next, three involved partners: the state, local agency, and utility, sign an agreement that commits the utility to providing a specified level of funding and stating that the state will match it once the utility reaches its goals. Once the contract is executed, the local agency sends in reports to confirm the funds disbursed and work done. With the utility effort confirmed, the state releases the matching funds.

The Washington WAP network uses utility funds for traditional weatherization energy efficiency services as well as repairs in support of those measures. Local agencies have flexibility within what DOE and utilities cover to provide comprehensive services. The hope is to expand efforts to provide additional repair and rehabilitation work as the economy recovers.

Steve Payne, Managing Director of the Housing Improvements & Preservation Unit in the Washington Department of Commerce, which administers the WAP, encourages using DOE funds as allowed to pursue leveraging efforts. In Washington, DOE funded leveraging efforts  spurred the establishment of The Energy Project, which serves as an advocate for the network, works with the Utilities and Transportation Commission, and looks for untapped opportunities. For instance, if a utility wants a rate increase, The Energy Project can argue that this will adversely affect low- income ratepayers and ask for protection of low-income customers, such as bill assistance and/or weatherization funding. Payne advises creating a similar group saying, “You have to be at the table. Investor owned utilities will have advisory groups you can be a part of, especially leading up to rate cases.” Establishment of a steering committee comprised of the state and local agencies can provide oversight and approve future plans. Payne notes, “These efforts are complicated – to have someone who can be the expert and advocate on behalf of local agencies makes the likelihood of success even greater.”

by Rebecca Stewart