BACKGROUND
In 1992, DOE commissioned a study through the National Association of State Community Services Programs (NASCSP) to address the concerns of warm-climate states regarding the equitable distribution of funds under the Weatherization Assistance Program allocation formula. A panel of 10 state representatives studied the issues and made recommendations to DOE. The recommendations provided greater equity for warm-climate states while minimizing the impact of a formula change on the capacity of cold-climate states to deliver services to their low-income clients. DOE acted on virtually all of the recommendations and issued a new revised formula in the Federal Register in 1995. The final rule states that when the total program allocation (Congressional appropriation minus T&TA) is below $209,724,761, state allocations are determined with 1995 formula. When the total program allocation exceeds $209,724,761, state allocations reflect the full impact of the revised warm weather formula.

THE WEATHERIZATION ASSISTANCE PROGRAM ALLOCATION FORMULA
Here is how the weatherization allocation formula works. From the total congressional appropriation, DOE reserves funds on a national level for national training and technical assistance (T&TA) activities that benefit all states. DOE also allocates specific funding to states for T&TA activities at both the state and local levels.
The remaining funds are distributed to states as program allocations, consisting of two parts: the first part is the base allocation, which is fixed for each state but differs from state to state. The sum of the base allocations for all the states totals $171,858,000. The second part is the formula allocation, which is computed by applying the revised formula to appropriated funds in excess of $171,858,000.

The revised Weatherization Program allocation formula is based on three factors for each state:
1. Low-income population- This number reflects how many low-income households live in each state and is expressed as a percentage of the total for the country.
2. Climatic conditions – These data are obtained from the heating and cooling degree-days for each state and deal proportionally with the energy needed for heating and cooling.
3. Residential energy expenditures by low-income households – This number is an approximation of the financial burden that energy use places on low-income households in each state.

EXAMPLE
The following is a hypothetical example of how the Weatherization allocation formula works for calculating the total funding for weatherization to the states in a given year.