Weatherization Boost Poised to Deliver Energy Price Relief – NRDC (Natural Resources Defense Council)

WAP is managed by the U.S. Department of Energy, which sets nationwide program requirements and allocates funding to states. State agencies develop detailed spending plans to apply for funding from the Energy Department and manage implementation of the program. 

Congress has turned to WAP before in times of economic crisis. In 2009, the American Recovery and Reinvestment Act provided $5 billion over three years for WAP as part of the government’s response to the Great Recession. Despite a slow initial ramp-up period, the initiative was a success, resulting in the weatherization of more than 1 million homes. A retrospective evaluation of the program found major benefits for participating households, including average per-household energy savings of $3,190 and average per-household total benefits (including health benefits) of more than $13,000. Notably, WAP was also one of biggest job creators funded under the Act, supporting more than 15,000 full-time jobs at its peak. 

Today, the $3.5 billion from the infrastructure law presents an opportunity to deliver similar benefits to households, in a time of possibly even greater need. 

This week’s guidance from the Energy Department provides a roadmap for how it plans to spend the $3.5 billion provided by the infrastructure law. Of the $3.5 billion, $3.168 billion will be allocated to states for regular WAP program activities and technical assistance, with the remainder going toward competitive grant programs and administrative costs. Details about the competitive grant programs will be announced at a later date.  

The guidance includes a list of the amounts that each state can expect to receive (available here). States will have up to 5 years to spend the funds, with the possibility of an extension.  

The guidance also outlines the Energy Department’s priorities for the infrastructure funding. These include improving program implementation and flexibility; targeting the highest energy burdened and disadvantaged communities; improving integration with energy efficiency, renewable energy technologies, and electrification; minimizing deferrals; and workforce expansion and diversity. States will need to show how their spending plans meet these goals. 

The Department leaves open precisely how it will comply with the Biden Administration’s Justice40 initiative, which aims to deliver 40 percent of the benefits of federal climate investments to disadvantaged communities. However, the agency commits to providing technical assistance to states and subgrantees to assist with Justice40 implementation. 

The $3.168 billion will be released to states in three stages. First, states will need to prepare an application (called a “Grantee Plan Application”) and a preliminary budget estimate. After those are accepted, the Department will release an initial 15 percent of the funds to support state planning efforts. An additional 35 percent will be released after the completion of a full State Plan, which must be negotiated and approved by the Department. The final 50 percent will be released after the state has completed weatherization of 30 percent of the total planned units under the State Plan, provided that the state has complied with program requirements such as quality control and monitoring. 

The Department of Energy is requiring every state to hold a formal public hearing on their draft Grantee Plan Application prior to submission. This is a key opportunity for the public to provide input on how each state should spend its weatherization allocation. Interested groups should also consider reaching out sooner to the state agency responsible for WAP, to ask about opportunities to shape the draft earlier in the process. 

More broadly, the Department is encouraging states to pro-actively “engage community-based organizations, unions and community colleges committed to workforce development, diversity and energy justice” throughout the planning and implementation process. 

Bottom line: State administrators need to hear from advocates and communities about how to ensure the new weatherization funding is spent wisely. Given current energy price volatility and the huge backlog of households in need of assistance, it is especially critical that the funds are invested swiftly and that states develop pro-active strategies to reach those households most in need. Reach out to your state administrator today to ask how you can get involved! 

A follow-up blog will outline additional policy changes necessary to ensure that the new funding benefits those households most in need, as well as some big-picture next steps for WAP, including the need for increased annual funding and better alignment with climate policy goals.