Stimulus Weatherization Project Costs Higher Than Expected

March 26, 2012
By

(Wiki Image)

DENVER — Winter in Colorado often means harsh weather, cold temperatures, and high heating bills for a majority of the calendar year.  And as the 2011-2012 winter draws to a close, so too is a portion of the 2009 stimulus bill that provides subsidies for home weatherization.  The program is set to expire on March 31.

The stimulus appropriated nearly $5 billion nationally for the Weatherization Assistance Program (WAP), and the nonpartisan Government Accountability Office (GAO) found approximately 15,400 temporary positions at the peak of the program in December 2010.  Excluding the nearly $3 billion of the program consumed by physical upgrades included in the project costs, the program spent in excess of $130,000 per position ($2,025,700,000 divided by 15,400 Full Time Equivalents).

Colorado

According to Recovery.gov, Colorado’s weatherization assistance program has received more than $80 million from the Obama Administration through the end of the fourth quarter of 2011.  The Colorado Governor’s Energy Office (GEO) reported 12,884 weatherized homes and estimated approximately 387 jobs created during the most recent quarter.

In October 2010, the GEO conducted an audit of the program, and found that between Fiscal Years 2006 and 2010, despite a near doubling in the number of homes weatherized under the program, the amount spent on weatherization per home skyrocketed by whopping 62 percent, or nearly $1,500 per house after stimulus funding was made available. (See chart below)

The Recovery Act authorized an increase in the amount available per home to $6,500, a steep increase above the average cost of the program in the years prior to stimulus, according to the December 2011 report from the U.S. Government Accountability Office entitled “GAO: Progress and Challenges in Spending Weatherization Funds”:

“ Since 2001, the statewide average expenditure limit per home for DOE weatherization was about $2,500, but adjusted annually to reflect changes in consumer prices. The Recovery Act increased this limit to $6,500, and in their state plans, recipients use the average cost per home of $6,500 to calculate their planned production. As of September 2011, the actual average cost per home was about $4,900, according to DOE data.” [emphasis added]

In the same GAO report, DOE officials estimated that the program would reach its production target of 607,000 homes weatherized by the end of the program, which would occur at the end of the first quarter of 2012. At an estimated $4,900 per household, that comes to roughly $3 billion.

Grantee Programs

Colorado’s Weatherization Assistance Program allocated more than $78 million of its DOE funds to nearly a dozen state counties, intergovernmental organizations, and nongovernmental organizations like Arapahoe County ($11,443,548), Energy Resource Center ($7,976,722), Northwest Colorado Council of Governments ($6,189,426), and Veterans Green Jobs ($14,716,751).

The Northwest Colorado Council of Governments, comprising most of the counties in the northwest part of the state, reported that they had completed the weatherization of the 1000th home due to stimulus funding in a press release dated November 21, 2011.

At just over $6,000 per job, NWCCOG weatherization was significantly higher than GAO averages.

Some of the increase in costs could be attributable to so-called “Davis-Bacon” wage requirements that call for artificially inflated wage levels to be paid to contractors working on projects authorized under the stimulus, according to the GEO audit from 2010.

The controversial wage requirement, strongly supported by labor unions, has been shown to increase constructions costs on government funded projects by as much as 22 percent.

Veterans Green Jobs

The non-profit Veterans Green Jobs, according to its own website, has provided weatherization assistance for Denver and Jefferson Counties and the San Luis Valley, creating an estimated 100 staff positions between 2008 and 2010, approximately 60 jobs for veterans and qualified non-veteran community members, and providing training for 200 military veterans.

An AP story from November 2011 estimated that Veterans Green Jobs had trained or placed approximately 370 veterans since the introduction of the program, at a cost of nearly $40,000 per position created.

Unlike the weatherization projects requiring artificially inflated wages under the Davis-Bacon mandate, many of the other green jobs programs for veterans paid as little as $8 an hour.

The Governor’s Energy Office expected 1,700 homes to be weatherized by Veterans Green Jobs by the end of the first quarter of 2012 according to a 2010 contract.

Final numbers for Colorado’s weatherization efforts will become available once first quarter 2012 reports have been submitted by the Governor’s Energy Office following the March 31 deadline, and will be available to the public at recovery.gov.

Weatherization Assistance Program, Governor’s Energy Office Performance Audit – October 2010:

WAP_2010Audit

GAO: Progress and Challenges in Spending Weatherization Funds—December 2011:

GAO Weatherization

GEO Total Expenditures: 1/2/2008-11/10/2010:

GEO Acct. Data

Weatherization Program Regions, WAP GEO Performance Audit, October 2010

 

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