Allocation Formula

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.

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.

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.