    [House Hearing, 111 Congress]
    [From the U.S. Government Publishing Office]

              HOMESTAR: JOB CREATION THROUGH HOME ENERGY RETROFITS

    =======================================================================

                                    HEARING

                                   BEFORE THE

                     SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED ELEVENTH CONGRESS

                                   SECOND SESSION
                                   __________

                                 MARCH 18, 2010

                                   __________

                               Serial No. 111-105

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

          Printed for the use of the Committee on Energy and Commerce
                            energycommerce.house.gov
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                        COMMITTEE ON ENERGY AND COMMERCE

                     HENRY A. WAXMAN, California, Chairman
    JOHN D. DINGELL, Michigan            JOE BARTON, Texas
      Chairman Emeritus                    Ranking Member
    EDWARD J. MARKEY, Massachusetts      RALPH M. HALL, Texas
    RICK BOUCHER, Virginia               FRED UPTON, Michigan
    FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
    BART GORDON, Tennessee               NATHAN DEAL, Georgia
    BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
    ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
    BART STUPAK, Michigan                JOHN B. SHADEGG, Arizona
    ELIOT L. ENGEL, New York             ROY BLUNT, Missouri
    GENE GREEN, Texas                    STEVE BUYER, Indiana
    DIANA DeGETTE, Colorado              GEORGE RADANOVICH, California
      Vice Chairman                      JOSEPH R. PITTS, Pennsylvania
    LOIS CAPPS, California               MARY BONO MACK, California
    MICHAEL F. DOYLE, Pennsylvania       GREG WALDEN, Oregon
    JANE HARMAN, California              LEE TERRY, Nebraska
    TOM ALLEN, Maine                     MIKE ROGERS, Michigan
    JANICE D. SCHAKOWSKY, Illinois       SUE WILKINS MYRICK, North Carolina
    CHARLES A. GONZALEZ, Texas           JOHN SULLIVAN, Oklahoma
    JAY INSLEE, Washington               TIM MURPHY, Pennsylvania
    TAMMY BALDWIN, Wisconsin             MICHAEL C. BURGESS, Texas
    MIKE ROSS, Arkansas                  MARSHA BLACKBURN, Tennessee
    ANTHONY D. WEINER, New York          PHIL GINGREY, Georgia
    JIM MATHESON, Utah                   STEVE SCALISE, Louisiana
    G.K. BUTTERFIELD, North Carolina
    CHARLIE MELANCON, Louisiana
    JOHN BARROW, Georgia
    BARON P. HILL, Indiana
    DORIS O. MATSUI, California
    DONNA M. CHRISTENSEN, Virgin
        Islands
    KATHY CASTOR, Florida
    JOHN P. SARBANES, Maryland
    CHRISTOPHER S. MURPHY, Connecticut
    ZACHARY T. SPACE, Ohio
    JERRY McNERNEY, California
    BETTY SUTTON, Ohio
    BRUCE L. BRALEY, Iowa
    PETER WELCH, Vermont
                     Subcommittee on Energy and Environment

                   EDWARD J. MARKEY, Massachusetts, Chairman
    MICHAEL F. DOYLE, Pennsylvania       RALPH M. HALL, Texas
    JAY INSLEE, Washington               FRED UPTON, Michigan
    G.K. BUTTERFIELD, North Carolina     ED WHITFIELD, Kentucky
    CHARLIE MELANCON, Louisiana          JOHN SHIMKUS, Illinois
    BARON HILL, Indiana                  JOHN B. SHADEGG, Arizona
    DORIS O. MATSUI, California          STEVE BUYER, Indiana
    JERRY McNERNEY, California           GREG WALDEN, Oregon
    PETER WELCH, Vermont                 SUE WILKINS MYRICK, North Carolina
    JOHN D. DINGELL, Michigan            JOHN SULLIVAN, Oklahoma
    RICK BOUCHER, Virginia               MICHAEL C. BURGESS, Texas
    FRANK PALLONE, Jr., New Jersey
    ELIOT ENGEL, New York
    GENE GREEN, Texas
    LOIS CAPPS, California
    JANE HARMAN, California
    CHARLES A. GONZALEZ, Texas
    TAMMY BALDWIN, Wisconsin
    MIKE ROSS, Arkansas
    JIM MATHESON, Utah
    JOHN BARROW, Georgia

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Edward J. Markey, a Representative in Congress from the
      Commonwealth of Massachusetts, opening statement...............     1
    .................................................................
    Hon. Fred Upton, a Representative in Congress from the State of
      Michigan, opening statement....................................     3
    Hon. John D. Dingell, a Representative in Congress from the State
      of Michigan, opening statement.................................     4
    Hon. Joseph R. Pitts, a Representative in Congress from the
      Commonwealth of Pennsylvania, opening statement................     5
    Hon. Michael F. Doyle, a Representative in Congress from the
      Commonwealth of Pennsylvania, opening statement................     6
    Hon. Henry A. Waxman, a Representative in Congress from the State
      of California, opening statement...............................     6
    Hon. Peter Welch, a Representative in Congress from the State of
      Vermont, opening statement.....................................     7
    Hon. John Barrow, a Representative in Congress from the State of
      Georgia, opening statement.....................................     8
    Hon. Michael C. Burgess, a Representative in Congress from the
      State of Texas, opening statement..............................     9
    Hon. Jane Harman, a Representative in Congress from the State of
      California, opening statement..................................    10
    Hon. Joe Barton, a Representative in Congress from the State of
      Texas, prepared statement......................................   100

                                   Witnesses

    Cathy Zoi, Assistant Secretary, Office of Energy Efficiency and
      Renewable Energy, Department of Energy.........................    12
        Prepared statement...........................................    14
        Answers to submitted questions...............................   121
    Larry Laseter, President, Masco Home Services....................    20
        Prepared statement...........................................    22
    John Engler, President and Chief Executive Officer, National
      Association of Manufacturers...................................    36
        Prepared statement...........................................    39
    Michael Thaman, President and Chief Executive Officer, Owens
      Corning........................................................    44
        Prepared statement...........................................    47
    Christopher A.S. Pratt, Vice President, Construction Development
      Services, LLC..................................................    49
        Prepared statement...........................................    51
        Answers to submitted questions...............................   140

                               Submitted Material

    Statement of Consumers Energy Company, Michigan, submitted by Mr.
      Dingell........................................................   106
    Statement of Laborers' International Union of North America,
      submitted by Ms. Capps.........................................   112
    Statement of six public health organizations, submitted by Ms.
      Capps..........................................................   114
    Statement of the National Association of Realtors, submitted by
      Mr. Stearns....................................................   115

              HOMESTAR: JOB CREATION THROUGH HOME ENERGY RETROFITS

                                  ----------

                            THURSDAY, MARCH 18, 2010

                      House of Representatives,
                Subcommittee on Energy and Environment,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The Subcommittee met, pursuant to call, at 10:06 a.m., in
    room 2123 of the Rayburn House Office Building, Hon. Edward J.
    Markey [Chairman of the Subcommittee] presiding.
        Members present: Representatives Markey, Doyle, Inslee,
    Melancon, McNerney, Welch, Dingell, Capps, Harman, Baldwin,
    Barrow, Waxman (ex officio), Upton, Stearns, Shimkus, Pitts,
    Burgess, Scalise, Griffith and Barton (ex officio).
        Staff present: Bruce Wolpe, Senior Advisor; Greg Dotson,
    Chief Counsel, Energy and Environment; John Jimison, Senior
    Counsel; Michael Goo, Counsel; Melissa Cheatham, Professional
    Staff Member; Caitlin Haberman, Special Assistant; Peter
    Ketcham-Colwill, Special Assistant; Lindsay Vidal, Special
    Assistant; Aaron Cutler, Minority Counsel; Mary Neumayr,
    Minority Counsel; Andrew Spring, Minority Professional Staff;
    and Garrett Golding, Minority Legislative Analyst.

    OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN
            CONGRESS FROM THE COMMONWEALTH OF MASSACHUSETTS

        Mr. Markey. Good morning. A few hours from now March
    Madness will officially begin, although for anyone who has
    walked the Capitol Hill halls in the last few days, the madness
    seems to have already started. Unfortunately, my alma mater,
    Boston College, missed the tournament. So since I cannot root
    for my home team, today I will root for HomeStar. Instead of
    watching players score buckets by banking the ball off the
    backboard window, today we will talk about families banking
    bucks through energy-efficient windows and I can guarantee one
    thing, the HomeStar Program will give people a much better
    return on investment then filling out an NCAA bracket.
        HomeStar is our new three-point play for American families
    during this economic recovery. One, it saves energy. Two, it
    saves money. Three, it creates jobs.
        So what is HomeStar? It is a program designed to help every
    homeowner looking for a little extra help to make their home
    more efficient by saving energy. The program will provide
    homeowners rebates for purchasing and installing more efficient
    windows, doors, insulation and other home improvements that
    will cover energy bills while jumpstarting our manufacturing
    and labor sectors. HomeStar was designed to give customers
    their rebates quickly and reimburse contractors within 30 days.
    It will, under my direction, also include a do-it-yourself
    provision that allows people to receive rebates for buying and
    installing insulation materials without going through a
    contractor.
        HomeStar was designed to reduce energy costs in several
    ways. Homeowners receive rebates on products and installation.
    They may also benefit from a loan program to offset the
    remaining cost of the project. Finally, homeowners save on
    reduced heating and cooling costs. HomeStar efficiency upgrades
    are estimated to save homeowners over $1 billion of home energy
    expenses in 2011, and $9.2 billion over 10 years.
        And finally, HomeStar was designed to help American workers
    get back on their feet through energy-efficient construction
    and manufacturing jobs. The products in the Silver Star portion
    of the bill are largely manufactured in the United States.
    Creating a consumer market for these products through HomeStar
    will help save and create approximately 168,000 jobs in the
    next 10 years. Most of these jobs will be available in the next
    2 years. That is why there is such a broad support for
    HomeStar. Fortune 500 companies, small contractors,
    environmental advocates and lumber manufacturers are just some
    of the organizations that have supported HomeStar.
        I would be remiss if I did not mention the hard work of my
    colleague, Peter Welch, who has been a champion of HomeStar and
    a long time supporter of building efficiency as evidenced by
    his provision in the Waxman-Markey legislation that passed the
    House last June. Right now, we don't know who will win March
    Madness. We do know that HomeStar is a winning program for
    hundreds of thousands of American workers, families and our
    ongoing efforts to spur a lasting, sustainable economic
    recovery through clean energy jobs and technologies.
        That completes the opening statement of the chair.
        We now turn and recognize the ranking member, the gentleman
    from Michigan, Mr. Upton.
        Mr. Upton. Well, thank you, Mr. Chairman, and sorry that
    your Boston College team didn't make it. Neither did my
    Wolverines. Maybe we could get the majority leader to do a
    resolution like he did for Maryland on the House floor,
    complimenting them on a wonderful season although they didn't
    win the ACC tournament, like we did yesterday.
        Mr. Markey. But they are in the tournament.
        Mr. Upton. Not the Wolverines.
        Mr. Markey. No, but I mean the Terrapins are in the
    tournament.
        Mr. Upton. They are in but they didn't win the ACC. They
    lost the first game of the tournament but we will see how you
    fill out your bracket.
        Mr. Markey. But they are still alive. They are more like
    the HomeStar Program than Boston College.
        Mr. Upton. Yes, yes, we will see how far they go.
        Mr. Markey. OK.

       OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF MICHIGAN

        Mr. Upton. I appreciate the hearing today and I have always
    been a proponent of all of the above energy policies. All of
    the above isn't just about all sources of energy. It also
    includes conservation and energy conservation. Upgrading energy
    efficiency in homes clearly is the low-hanging fruit in
    reducing overall energy demand and has the added benefit of
    directly lowering home energy bills which is of critical
    importance for working families that are struggling to get by.
        I support energy efficiency and there are bipartisan ways
    to create incentives for home energy efficiency upgrades but I
    am not sure that this legislation fits that bill. The HomeStar
    legislation that we are looking at today could prove to be far
    too expensive at a time of massive budget deficits and runaway
    spending. We don't know what the cost will be because the bill
    as you know as written is a blank check to the appropriators,
    such sums as may be necessary, as the legislation states, so
    how much are we talking about? Is it $6 billion, is it $20
    billion, it could be more. I don't support signing a blank
    check.
        With all due respect to the Department of Energy, they are
    not equipped to run a program of this magnitude regardless of
    whether it is $1 billion or $20 billion. According to the GAO,
    only 9,100 of a planned 593,000 homes were weatherized this
    last year, 9,100 out of 593,000. That is more than a rounding
    error. In my home State of Michigan, 395 homes were weatherized
    in 2009 at a cost of $4 million so there is still another $240
    million left unspent in the Stimulus Package that was passed
    last year. Nationally, about $522 million in Stimulus funds
    have been spent so far on weatherization. That is about 10
    percent of the $5 billion set aside. Why are we going to throw
    countless billions on top of that? Clearly, more money is not
    the answer or the issue.
        Besides the runaway spending and DOE's inability to
    administer the first $5 billion allocated, there are other
    problems as well. Good policy would suggest a HomeStar-type
    program should complement state-regulated energy efficiency
    programs not disrupt them. Existing energy efficiency programs
    are the best way to distribute funding with the greatest level
    of quality assurance, not a giant, new government bureaucracy.
        This legislation as I look at it does pick winners and
    losers, both technology winners and losers, and labor winners
    and losers. That is not the job of this body as we seek to
    promote energy efficiency. It seems to me that many energy
    efficient technologies were left off the list solely because
    their manufacturers weren't represented in the HomeStar
    Coalition. That is not necessarily the American way. The
    American people have grown quite tired of these backroom deals
    and I hope that we can remedy this situation when we markup the
    bill, perhaps as early as next week.
        I would also note that the President's budget called for a
    freeze in spending so where does that fit in when you look at a
    new $23 billion program? Now, we in the Congress now have
    passed PAYGO legislation, where are the offsets? I am not sure
    that this is the best answer and I yield back my time.
        Mr. Markey. The gentleman's time has expired.
        The chair recognizes the Chairman Emeritus of our
    committee, Mr. Dingell.

    OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF MICHIGAN

        Mr. Dingell. Mr. Chairman, thank you for holding this
    important hearing today. I am pleased that the subcommittee is
    setting forth an aggressive agenda for the HomeStar Program.
        I want to take a moment to welcome Larry Laseter from Masco
    Home Services. Welcome, Larry. Masco is headquartered in
    Taylor, Michigan and is an outstanding corporate citizen of the
    State of Michigan so welcome to you, Mr. Laseter, and we look
    forward to your testimony. Also, Governor Engler, it is a
    pleasure to see you this morning.
        HomeStar holds much promise in three important areas. First
    and foremost, it will create jobs. Second, it will lead to
    greater residential energy efficiency. Third, it has the
    potential to lead to significant consumer savings.
        In terms of jobs, my home State of Michigan is in a
    desperate state. Our current unemployment rate is 14.3 percent
    and Wayne County, my home county, has an unemployment rate of
    15.7 percent. Between 2001 and 2009, Michigan lost nearly 43
    percent of its construction jobs. The bottom line, Mr.
    Chairman, we need jobs and we need them desperately.
        This is a program which has the potential to put 168,000
    workers back on the job. Not only will this help individual
    workers but it will also help small businesses, a portion of
    our economy which has been particularly hard hit. We cannot
    afford not to move forward.
        According to HomeStar Coalition, the energy efficiency
    gains have the potential to equal the removal of 615,000
    automobiles from the road. This is particularly important since
    the Senate has yet to act on broader climate change
    legislation.
        Finally, the program will be of great benefit to
    homeowners. It could save families as much as $9.4 billion in
    energy costs over the next 10 years. In addition, it makes
    homes more valuable. In these economic times, these increased
    savings and increased home values cannot be underestimated.
        Mr. Chairman, HomeStar follows on the heels of the widely
    successful Cash for Clunkers Program in which the Federal
    Government provided consumer vouchers to purchase new, more
    fuel-efficient vehicles. The initial allocation of $1 billion
    was exhausted very quickly and we had to secure an additional
    $2 billion in funding for the program. Cash for Clunkers was
    responsible for the sale of nearly 700,000 new vehicles in the
    United States during its run and it added nearly one percent to
    the third quarter gross domestic product growth. Cash for
    Clunkers has been hailed as one of the most successful of all
    recent Government economic stimulus programs. According to the
    Center for Automotive Research (CAR), Cash for Clunkers created
    approximately 40,200 new jobs nationally of which 5,800 were in
    Michigan.
        I ask unanimous consent to submit the testimony of
    Consumer's Energy, a fine American corporation situated in the
    southeast corner of Michigan, from the Senate Committee on
    Energy and Natural Resources on this matter. And, Mr. Chairman,
    I look forward to working with the subcommittee on this
    important legislation and I commend you again for having this
    hearing.
        Mr. Markey. We thank the gentleman and we will by unanimous
    consent include that material in the record.
        [The information appears at the conclusion of the hearing.]
        Mr. Markey. The chair recognizes the gentleman from
    Pennsylvania, Mr. Pitts.

    OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
             CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

        Mr. Pitts. Thank you, Mr. Chairman.
        I would like to thank you for convening this hearing today
    on the proposed legislation to incentivize home energy
    retrofits and reduce unemployment in the construction sector.
    With the unemployment rate at nearly 10 percent in the United
    States, I believe that it is crucial that Congress focuses on
    creating a climate that promotes job creation. By the same
    token, I also believe that sound energy efficiency measures
    will certainly decrease the amount of greenhouse gas emissions
    in our atmosphere. They will also encourage our country to
    strengthen our energy security and end our dependence on
    foreign energy resources.
        The legislation that is being proposed to institute a
    rebate-type program has many promising aspects to it. Under the
    Silver Star Program, rebates will be awarded to participating
    contractors and vendors who perform qualifying energy-savings
    measures. Under the Gold Star Program, rebates will be awarded
    to participating contractors and vendors for retrofits that
    achieve home energy savings. However, I am concerned that
    Section 13A provides that, ``There are authorized to be
    appropriated to carry out this Act such sums as may be
    necessary.''
        We are operating in a fiscally constrained environment. It
    is our job on this committee to authorize a dollar amount.
    While the Senate version calls for a $6 billion program, I am
    greatly concerned about deficit spending or whatever pay-for
    may be used to offset this spending. Additionally, I am
    concerned that the implementation of this program will be
    inefficient. Mr. Chairman, I do agree that creating an
    environment that stimulates jobs is the key however it is of
    the utmost importance that we do this prudently.
        I look forward to hearing from our witnesses today and I
    thank you and yield back.
        Mr. Markey. We thank the gentleman.
        The chair recognizes the gentleman from Vermont, Mr. Welch.
    Oh, I am sorry. The chair recognizes the gentleman from
    Pennsylvania, Mr. Doyle. I apologize.
        Mr. Doyle. Thank you, Mr. Chairman, and for the record, the
    University of Pittsburgh is in the NCAA Tournament.
        Mr. Upton. Do they get a resolution today too?

    OPENING STATEMENT OF HON. MICHAEL F. DOYLE, A REPRESENTATIVE IN
             CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

        Mr. Doyle. I want to thank you for convening this hearing
    today to explore the HomeStar Program that President Obama
    proposed in his State of the Union Address. Over the past
    several years, I have been very interested in the green
    building movement and the technologies and innovations this
    movement has brought forward. As some of you know, the City of
    Pittsburgh is at the forefront of the green building movement.
    Innovations by our researchers, work by our construction
    companies and a real eye to the future has created innovations
    that I believe can benefit each and every Congressional
    District in our Nation. The time for building without concern
    for energy costs is behind us, and the very same can be said
    about energy efficiency. As my constituents are faced with
    rising energy costs in a recession, they are struggling to find
    ways to cut their energy usage but the truth remains that many
    of the investments needed to make your home more energy
    efficient are financially impossible for families in today's
    economy.
        The HomeStar Program will offer families hoping to cut
    their energy costs, the chance to make energy-efficient
    upgrades to their homes with the promise of an immediate rebate
    from the contractor they hire to do this work. If the
    Weatherization Assistance Program in Pennsylvania is any
    indication, HomeStar will be a very popular program in my
    State.
        Another opportunity with the HomeStar Program is the job
    creation potential. The program will increase employment in the
    construction sector which we all know has been particularly
    hard hit in the last year. And the manufacturing sector which
    is imperative to the economy in Pittsburgh and really, all
    across America is set to benefit because the materials used in
    HomeStar projects will be almost entirely domestically sourced.
    I can't think of a greater win-win right now, Mr. Chairman,
    unless of course the Tea Party decides to endorse a single-
    payer system today.
        I look forward to the testimony today as we hammer out the
    details of how this program will be run. I do have a few
    questions regarding the administration of the program and
    making sure that the work done is quality and provides
    measurable savings to homeowners. Mr. Chairman, thank you for
    getting the ball rolling on this excellent program and I yield
    back the balance of my time.
        Mr. Markey. Great, the gentleman's time has expired.
        The chair recognizes the Chairman of the full committee,
    Mr. Waxman.

    OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Mr. Waxman. Thank you, Chairman Markey. Thank you for
    holding this hearing.
        Today our Nation continues its courageous struggle to
    overcome the worst recession in 70 years. No sector of the
    economy has been harder hit than the home construction services
    sector. Today more than one in four construction workers are
    unemployed, more than twice the national average. We need these
    workers and their skills more than ever.
        We must seize the opportunity to modernize our homes and
    buildings and ensure their efficient use of energy. Ten percent
    of global greenhouse gas emissions are attributable to American
    buildings. Improving the efficiency of those buildings would
    allow us to reduce our carbon pollution and save money at the
    same time.
        The HomeStar proposal is compelling because it addresses
    both of these problems simultaneously. First, the proposal will
    put a lot of people back to work making our homes more
    efficient. At the same time, it can stimulate the manufacturing
    sector by increasing demand for energy-efficient products. By
    some estimates, HomeStar will create more than 130,000 direct
    and indirect near term jobs. Second, HomeStar will cut our
    carbon pollution in the near term and be an important down
    payment for even more successful reductions in the future.
        I want to commend Chairman Markey and Representative Welch
    for their leadership on this proposal. They have had the vision
    to see the tremendous economic and environmental benefits of
    nurturing energy efficiency retrofits into a major, national
    undertaking. President Obama has lent his unequivocal support
    to this initiative. We now have the opportunity in our
    committee to make HomeStar a priority and deliver jobs and
    energy efficiency to America's housing and commercial office
    stock throughout the country.
        I would also like to welcome today's witnesses, Assistant
    Secretary Zoi, Governor Engler, Mr. Laseter, Mr. Thaman and Mr.
    Pratt. I appreciate your joining us today and look forward to
    hearing your testimony.
        Mr. Markey. Great, the Chairman's time has expired.
        The chair recognizes the gentleman from Vermont, Mr. Welch.

      OPENING STATEMENT OF HON. PETER WELCH, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF VERMONT

        Mr. Welch. Thank you, Chairman Markey. I very much
    appreciate you convening this hearing. Thank you Ranking Member
    Upton.
        We introduced RECRP, the National Residential Commercial
    Residential Retrofit Program that was passed by this committee
    and the House. It was a coalition that identified, like we have
    today, the incredible potential of the low-hanging fruit of
    energy efficiency and today we have witnesses who show that
    this is bipartisan. It represents something powerful across the
    country and I appreciate Secretary Zoi, Mr. Laseter, Governor
    Engler, Mr. Thaman and Mr. Pratt for being here. You are on the
    front lines. You know how it works. You know it is real and you
    are here to testify and demonstrate that this is a public and
    private partnership, market-based approach to getting something
    done.
        HomeStar is going to put contractors to work. It is going
    to create manufacturing jobs because the source is as Mr. Doyle
    said, American and it is going to help small-town hardware
    stores as well as the big box retailers. It creates 168,000
    jobs this just small, modified program. Three million American
    families can cut their energy bills by $10 billion, $10 billion
    over 10 years and it reduces obviously our dependence on
    foreign oil.
        In Vermont, we are an efficiency State. We have an
    efficient utility. We have created thousands of jobs. We have
    reduced consumption by seven percent and we save folks money.
    That is a good deal for America. What we have seen is that this
    can work and with HomeStar we can replicate what is being done
    across this country and it is going to do those things that
    need to be done about jobs, about energy savings and about
    reducing our dependence on foreign oil.
        What is also so much a tremendous opportunity is that we
    can do this together. This Congress is locked in partisan
    battles and the real differences between us on many issues but
    this is an opportunity for us to find common ground about jobs,
    about energy independence and about putting our folks to work,
    and I am so grateful for you that you are here to testify about
    this and have us focus on doing something real, something
    useful, something necessary and do it together.
        I yield back.
        Mr. Markey. Great, the gentleman's time has expired.
        The chair recognizes the gentleman from Alabama, Mr.
    Griffith.
        Mr. Griffith. Thank you, Mr. Chairman.
        I look forward to working with my colleagues on this
    project. I know that it certainly sounds good theoretically and
    we hope that it works out practically but we know that we have
    had in the past some theoretical successes but some
    implementation problems with just such a project as this as it
    gets down into the communities so I am hoping that we solve
    those or anticipate those problems as we get to them, before we
    get to them so to speak. And I must say that energy efficiency
    is an important step in making our country less dependent on
    foreign oil but because this committee is concerned with energy
    in its totality, I think we not only need this sort of a
    program but we also need to make sure that we are not sending a
    mixed message to our energy producers and our outer-continental
    shelf 5-year plan should be a big part of this as well. And I
    appreciate the opportunity to participate with you and make
    sure that when it gets down to the contractor and the window
    manufacturers we don't get into a bureaucratic nightmare of
    paperwork and 3 or 4 months of form filling out and then no
    response. So I know those are on your mind so thank you, Mr.
    Chairman, for allowing me to participate.
        Mr. Markey. All right, thank you, the gentleman's time has
    expired.
        The gentleman from Georgia, Mr. Barrow is recognized.

      OPENING STATEMENT OF HON. JOHN BARROW, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF GEORGIA

        Mr. Barrow. I thank the chair.
        I am pleased that President Obama chose my hometown of
    Savannah earlier this month to come and roll out the
    Administration's support for this program and I think that it
    has got tremendous promise. I want to quickly register just a
    couple of areas of concern to me based on what we have learned
    from prior efforts in the past. Mention has already been made
    of the fact that the Weatherization Program in the Recovery Act
    hasn't gone as far as we would like. It is not that the program
    hasn't been--the money has been wasted. The money hasn't been
    spent yet and comments have been made that what we don't need
    is something that is impossible to administer or something that
    is impossibly bureaucratic. I happen to believe that this is a
    direct response to our experience with the Recovery Act's
    effort to plus-up existing programs that are relatively high
    maintenance. I remember a great line in the movie ``When Harry
    Met Sally'' when they are talking about relationships that are
    high maintenance and low maintenance and the girl asked the guy
    well what am I and he said well you are the worst kind. You are
    high maintenance but you think you are low maintenance, and I
    kind of feel like that is what the Recovery Act was. It took a
    high maintenance program but we treat it as if it is low
    maintenance and put all kinds of resources into it and it just
    hasn't gotten through. This is a low maintenance approach and
    the more user-friendly we can make this, I think the more
    effective it will be and that I think is an important first
    step.
        Now, I want to know what we can do to actually make this
    not just think it is low maintenance but actually be low
    maintenance and I want to explore with you all and get your
    ideas about we can make this as efficient as possible. Also,
    God bless the do-it-yourselfers out there to the extent that we
    are going to authorize some relief and help with folks who can
    do it themselves. That is important. We might not be helping
    the contracting community quite as much but the manufacturing
    base is going to get a boost out of this and the homeowner who
    is going to have sweat equity in this is going to have the
    energy savings and efficiency to show for it so I want to
    explore those two areas. I want to thank Mr. Welch especially
    for his leadership is this area and with that, Mr. Chairman, I
    yield back the balance of my time.
        Mr. Markey. Great, the gentleman's time has expired.
        The chair recognizes the gentleman from Texas, Mr. Burgess
    is recognized.

    OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
                  IN CONGRESS FROM THE STATE OF TEXAS

        Mr. Burgess. Thank you, Mr. Chairman.
        You know, energy efficiency is the common ground in a lot
    of our fights that we have on this committee and really
    efficiency measures are some of the quickest and most concrete
    ways of solving the energy problems and move this country to a
    more--to a cleaner and more sustainable energy future and the
    market proves this. Upgrade your home's windows and insulation
    and as a consumer, you watch your bills drop. Rather than have
    this committee spend its time with climate bills that run the
    risk of further damaging our already fragile economy, I have
    consistently maintained that both sides of the aisle can come
    together on commonsense issues like efficiency helping to
    reduce our dependency on fossil fuels and make our country a
    greener place to live.
        And not only have I advocated here in the halls of
    Congress, I have also promoted it within the walls of my own
    home. My wife and I built a house in north Texas 4 years ago.
    We wanted to make the investment and use energy efficient
    techniques at the time of building because we knew it would pay
    off down the road and as you can imagine one of the biggest
    challenges in Texas is a long, hot summer. We found there were
    numerous ways to keep out the heat including focusing on low-E
    glass in the windows, higher efficiency air conditioners, an
    efficient attic system and foam insulation in the walls. We
    also installed light color shingles on the roof to reflect
    sunlight and installed a tankless water heater which is more
    efficient than the tank model. Each measure helped us lower our
    consumption on our energy bills to the point that they were 40
    percent lower than our previous years' bills when the house was
    finished.
        Energy efficiency shouldn't be something that we
    necessarily need to incentivize at the Federal level. Show
    people how their bills will drop and they will be running to
    buy a new water heater or to re-shingle their roof. Energy
    efficiency is something that we can promote without having to
    spend a single Federal dollar, certainly, without having to
    spend dollars that we don't have. The cost of this bill should
    concern everyone in this room. In the draft before us today,
    this committee cedes its power as an authorizing committee to
    the Appropriations Committee allowing appropriators rather than
    the authorizers to determine how much money is in the program.
    Regardless of ideology, members of this committee on both sides
    of the dais should be concerned over the precedent set by
    delegating that authority to another committee. Allowing
    phrases such as ``Such sums as may be necessary'' could be used
    for a program of this magnitude is simply giving a blank check
    to a Federal agency, something this Congress can no longer
    afford to do.
        And the devil is in the details with legislation such as
    this. I am grateful the drafters desire to get this program
    moving quickly once the bill has cleared both sides of the
    House or both sides of the Capitol but I am concerned that the
    finite list of approved upgrades, this committee is simply
    picking winners and losers for what technology will be eligible
    for efficiency rebates and I think more attention needs to be
    placed on ensuring that this list is as comprehensive as
    possible for the wide range of efficiency upgrades that are
    available to homeowners today.
        I thank the chairman for his indulgence and I will yield
    back the balance of my time.
        Mr. Markey. Great, the gentleman's time has expired.
        The chair recognizes the gentlelady from California, Ms.
    Harman.

      OPENING STATEMENT OF HON. JANE HARMAN, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Ms. Harman. Thank you, Mr. Chairman.
        This committee is not new to the issue of energy efficiency
    in homes and nor is my own district. Mr. Upton and I
    collaborated pretty successfully I think on lighting efficiency
    standards which are now part of Federal law and we are
    continuing to collaborate successfully I think on outdoor
    lighting standards which we will introduce as a stand-alone
    bill soon and which we hope will be part of the energy package
    that we pass some time later this Congress if we pass an energy
    package.
        In my own district, I just want to call attention to a
    family in Hermosa Beach, the Fortunatos, who are creating what
    they call a net-zero house. That means the house will produce
    as much energy as it uses. It is a revolution. It is not off
    the grid. It is the grid and Southern California Edison will
    move shortly to install smart grids which are also getting
    Stimulus Bill funding in Hermosa Beach so that other families
    can do the same thing.
        In Manhattan Beach, there is a company called Windstream
    which produces small, rooftop wind turbines. Windstream and a
    lighting company Ledtronics are partnering with the Fortunatos
    to make their house energy neutral. There is also a
    communications company in El Segundo which has put solar panels
    over its parking lots and they now produce 20 percent of the
    energy that company, a large communications company, uses.
        I have had solar panels on my rooftop in Venice, California
    for 9 years and they generate the energy I need for hot water
    so there are lots of good local projects. There is a huge
    history here of bipartisanship and these proposals we will hear
    about today will build on the strong record we have in the
    committee and I am very pleased to be here and to welcome our
    witnesses.
        I yield back.
        Mr. Markey. Great, the gentlelady's time has expired.
        The chair recognizes the gentlelady from California, Ms.
    Capps.
        Mrs. Capps. Mr. Chairman, thank you. I will waive my
    opening statement in favor of the questions and look forward to
    the testimony of our witnesses. Thank you.
        Mr. Markey. Great, the chair recognizes the gentleman from
    California, Mr. McNerney.
        Mr. McNerney. Well, thank you, Mr. Chairman, for holding
    this hearing this morning. I want to congratulate you and Mr.
    Welch for your leadership on this issue.
        I spent most of my career developing new energy technology
    and I can tell you it is hard work. It is dirty and the real
    low-hanging fruit is energy efficiency. I know Chairman Markey
    has beat that drum over and over and he is absolutely right.
    For every dollar you invest in energy efficiency, you get
    dollars back.
        And so I also can see there is a business right next to my
    office in California that is an energy efficiency. They go out
    and they look at homes. They see what needs to be done and they
    are making good money doing that and if we can incentivize that
    we are going to create thousands and thousands of jobs while
    helping our dependence on foreign oil. There is almost no
    downside that I can imagine for this bill so I look forward to
    what your testimony is and maybe make some improvements on the
    bill as we move forward but thank you for coming.
        And I will yield back the balance of my time.
        Mr. Markey. We thank the gentleman and all time for opening
    statements has been completed so we will turn to our first
    witness. Our first witness is Ms. Cathy Zoi. She is the
    Assistant Secretary for the U.S. Department of Energy, Office
    of Energy Efficiency and Renewable Energy. Prior to joining the
    Obama Administration, Ms. Zoi served as founding CEO of the
    Alliance for Climate Protection, as chief of staff on
    environmental policy in the Clinton Administration and as a
    former manager at the Environmental Protection Agency where she
    pioneered the Energy Star Program. Ms. Zoi, whenever you are
    ready, please begin.

      STATEMENTS OF THE HONORABLE CATHY ZOI, ASSISTANT SECRETARY,
    OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY, DEPARTMENT OF
      ENERGY; LARRY LASETER, PRESIDENT, MASCO HOME SERVICES; THE
     HONORABLE JOHN ENGLER, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
        NATIONAL ASSOCIATION OF MANUFACTURERS; MICHAEL THAMAN,
       PRESIDENT AND CHIEF EXECUTIVE OFFICER, OWENS CORNING; AND
         CHRISTOPHER A.S. PRATT, VICE PRESIDENT, CONSTRUCTION
                       DEVELOPMENT SERVICES, LLC.

                         STATEMENT OF CATHY ZOI

        Ms. Zoi. Thank you very much. Good morning, Chairman
    Markey, Ranking Member Upton.
        Mr. Markey. If you could turn on your microphone please and
    just move it in a little bit closer.
        Ms. Zoi. Thank you for the opportunity to appear before you
    today and it is a pleasure to appear.
        Mr. Markey. OK, just move that microphone down just a
    little. Just push it down just a little, OK, good.
        Ms. Zoi. How is that? Better, OK.
        Thanks for the opportunity to appear before you and it is a
    pleasure to appear with such a panel of knowledgeable industry
    witnesses. I will make my remarks brief and I have submitted a
    longer statement for the record.
        We have a tremendous opportunity right now to create jobs
    and save money for homeowners all across the country. There are
    approximately 130 million homes in the United States, very few
    of which are as efficient as they could be. Almost all of these
    homes could benefit from additional insulation, caulking,
    upgraded heating and air conditioning systems and other
    improvements. Just as critically, there is a workforce standing
    by ready to make those improvements. The overall construction
    sector currently faces a 27 percent unemployment rate.
    According to the Bureau of Labor Statistics, nearly two million
    construction jobs have been lost since December, 2007, two
    million hardworking Americans ready and anxious to find ways to
    apply their skills to new jobs. With the Home Retrofit Program,
    we can transform these two challenges into an enormous
    opportunity, tapping workers skills and availability to help
    American families save money and energy. Americans are spending
    over $200 billion per year on energy, money that could pay for
    housing, tuition or other basic necessities. As the President
    has said, if you saw $20 bills flying out your window, you
    would try to grab them so let us try to make it easier for
    American families to prevent their hard-earned cash from flying
    out of leaky, inefficient homes while we create good-paying
    jobs for folks across the country. We can do just that through
    a Home Retrofit Program like the one the President called for
    in his State of the Union.
        Two weeks ago, the President outlined more details of what
    he has in mind for HomeStar Program, including rebates
    delivered directly to consumers, a $1,000 to $1,500 level of
    Silver Star rebates, $3,000 Gold Star rebates for whole home
    retrofits, oversight to ensure quality installations and
    support for financing at the local level. Through this program
    we can create tens of thousands of jobs while achieving
    substantial reductions in energy use, up to the equivalent of
    the entire output of several 500 megawatt coal-fire power
    plants each year. Consumers taking advantage of the program are
    likely to save between $200 and $500 per year in their energy
    costs while improving the comfort and the value of their homes.
        I want to thank the members of the subcommittee and other
    members who have been working tirelessly on efforts to create
    legislative language that follows the President's vision. As
    the legislative process moves forward, we will continue to work
    with Congress on the bill until it is enacted. Today I am glad
    the subcommittee has convened the hearing and I am happy to
    answer questions regarding how the HomeStar proposal or how the
    Department would actually implement it once it is in law. My
    goal as Assistant Secretary for Energy Efficiency and Renewable
    Energy is to harness the ingenuity and ability of the American
    workforce to help families save energy and money. Retrofitting
    millions of American homes can truly transform energy
    consumption throughout the Nation while putting people to work.
    Last year, Secretary Chu said, ``In the next several decades, I
    believe that energy efficiency is our most powerful tool for
    reducing our carbon emissions and reducing our energy bills.''
    While home energy retrofits could be crucial to realizing both
    of those goals while supporting American job creation.
        Thank you again for the opportunity to testify on this
    topic and I will gladly answer questions.
        [The prepared statement of Ms. Zoi follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Markey. Thank you.
        And our next witness is Mr. Larry Laseter. He is the
    President of WellHome, a subsidiary of a leading home
    improvement company and as the President of WellHome, we
    welcome you here, sir, and he is going to testify on behalf of
    HomeStar Coalition as the President of WellHome so we welcome
    you, sir.

                       STATEMENT OF LARRY LASETER

        Mr. Laseter. Thank you, Chairman Markey, Ranking Member
    Upton and the distinguished members of the subcommittee for the
    privilege to testify today and your dedication to energy
    efficiency. I would also like to thank Congressman Welch for
    his leadership on this issue.
        I am Larry Laseter, President of Masco Home Services, also
    known as WellHome. Our company is a home performance contractor
    and we are an operating company of Masco Corporation, a
    Michigan-based, Fortune 500 company and one of America's
    largest manufacturers of products for the home. Masco is better
    known by our leading brands such as Behr Paint, Delta Faucets,
    Craft Maid Cabinets and many others and we are the Nation's
    largest installer of insulation, but I am here today to speak
    on behalf of the HomeStar Coalition, a broad group of industry,
    labor, energy and environmental supporters, including more than
    600 small businesses representing all 50 States. We state
    together in support of the HomeStar Program which would deliver
    a rare triple win for the American people in the form of jobs,
    savings for consumers and a positive impact on the environment.
        Let me begin with jobs. Make no mistake about it, the
    construction industry is in the midst of a one-industry
    depression. The unemployment rate in construction is 27
    percent, nearly three times the overall jobless rate and this
    rate is higher than our Nation's unemployment rate at the
    height of the Great Depression. At Masco Corporation, we have
    felt the pain of this industry downturn and we felt it
    firsthand having lost 27,000 jobs or over 40 percent of our
    workforce. However, construction workers have the know-how and
    the experience for home energy retrofits and they are ready to
    get to work in jobs that cannot be outsourced overseas.
        These are workers like Michael Youngblood. Michael fell in
    love with construction when he started working for a family
    friend when he was only 15 years old. He built over 150 custom
    homes during a successful 18-year career but Michael found
    himself unemployed with a young family last year when the
    builder he was working for downsized from 25 project managers
    down to three. Michael joined our WellHome team in Michigan
    last summer, earned his Building Performance Institute
    certification and now helps homeowners achieve energy
    efficiency retrofit. HomeStar will create more jobs for
    construction workers like Michael, most of whom work for small
    businesses and it would drive increased demand for manufactured
    products and building materials that are almost universally
    made in the USA, supporting further job growth and economic
    impact and putting idle plants back online.
        For the American homeowner, the benefit comes in the form
    of annual energy savings of up to 45 percent. On average, these
    savings are equivalent to a $500 stimulus check that a
    participating homeowner would receive every year for years to
    come.
        And, of course, energy efficiency improvements will support
    energy independence in the environment. Home energy represents
    22 percent of our carbon output, twice that of passenger cars
    and more than two-thirds of America's over 100 million homes
    were built before modern building codes. There is clearly a
    need and HomeStar will fill that need by lowering the cost of
    these home improvements. Things like fixing drafty windows and
    leaking ducts, installing insulation and high efficiency
    heating and air conditioning systems, or undertaking whole home
    energy retrofits. Spurring consumer demand for these
    improvements will drive thousands of jobs for small contractors
    nationwide and in addition, the HomeStar Coalition remains
    committed to the inclusion of an incentive for customer-
    installed measures under the Silver Star Program.
        But we also know that many middle-class Americans are
    squeezed by the economy and the credit crisis and that is why
    the HomeStar Program legislation allocates $200 million for
    State programs to make energy efficiency loans more available
    and more affordable. In addition, HomeStar establishes industry
    performance standards, ensures that a portion of all jobs are
    inspected by credentialed professionals after the project is
    completed and offers added incentives to contractors that
    invest in a properly trained and certified workforce. This
    quality assurance system based on rigorous technical standards
    delivers on the promise of energy savings for American
    families.
        I would like to conclude by affirming that HomeStar is a
    win-win-win for jobs, for the American consumer and for the
    environment. It will put an estimated 168,000 skilled Americans
    back to work in the hardest hit part of our economy, the
    struggling construction and its related manufacturing sector.
    It will help more than three million American families retrofit
    their homes for energy efficiency, saving them as much as $9.4
    billion in energy costs over 10 years, a return greater than
    the cost of the program itself and it will positively impact
    the environment and America's energy independence. On behalf of
    the current and future workers represented by the 600
    businesses that make up the HomeStar Coalition and the millions
    of households which will benefit in every community in America,
    I encourage you to move this bill forward without delay.
        Thank you for the opportunity to testify and for your
    important leadership on behalf of the American people.
        [The prepared statement of Mr. Laseter follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Markey. Thank you, Mr. Larry Laseter, very much.
        Our next witness is Governor John Engler. He is the
    President and CEO of the National Association of Manufacturers.
    He is the former Governor of Michigan and previously served for
    20 years in the State legislature. The National Association of
    Manufacturers is the largest industry trade group in America
    representing small and large manufacturers in every industrial
    sector in all 50 States. We welcome you, Governor Engler.

                        STATEMENT OF JOHN ENGLER

        Mr. Engler. Thank you, Mr. Chairman, very much for the
    opportunity to be with you today, ranking member and good
    friend, Fred Upton, distinguished subcommittee members, thank
    you for holding this hearing on the HomeStar proposal and
    offering me the opportunity to testify before you today. I
    thought maybe it could just be deemed that I had testified but
    then I thought I had better show up here in person and so here
    I am.
        The NAM members are very excited, very committed to working
    with the Administration.
        Mr. Markey. If you make the motion, we will pass the bill
    right now.
        Mr. Engler. The thought of being here though just to tell
    you that we want to work with you and the Administration and
    Congress to make the HomeStar proposal as effective as possible
    as soon as possible, and I am pleased to offer our support for
    this important program.
        Our manufacturers firmly believe that an effective program
    to encourage energy efficient home retrofits will stimulate job
    creation by increasing the demand for energy efficient products
    and services and will lead us down a path to more energy
    efficient economy, the bottom line, straightforward, more jobs,
    fewer emissions, less energy. The U.S. manufacturing sector was
    hit hard during the recession. Manufacturing employment has
    fallen by nearly 2.2 million since December of 2007, to a level
    just over 11 and a half million. The deep decline in the
    housing market which includes the home improvement sector has
    had a significant impact on manufacturing. Nearly a quarter of
    the manufacturing jobs have been lost in industries closely
    connected to housing such as furniture, wood and textile
    products, building materials. This sector continues to
    struggle. You have heard that today already and you will
    continue to hear that. Consequently, a sustainable upturn in
    the housing sector will be a key ingredient for getting
    manufacturing back on track, expanding production and creating
    high-paying jobs. In fact, the NAM estimates if, and that may
    be a big if, a healthy rebound in housing takes place over the
    next few years, it likely will create an additional 128,000
    manufacturing jobs in industries connected to this sector.
        The HomeStar Program that we are here today to talk about
    would spur much needed consumer demand for energy efficient
    products and building materials by providing significant and
    immediate rebates for home energy efficiency retrofits. In
    addition to promoting residential energy efficiency, HomeStar
    will quickly create jobs in the manufacturing, distribution and
    sale of energy efficient products. One key reason that has been
    mentioned and some of the members have touched on this, the
    HomeStar Program it will work I think as the consumers can act
    pretty much as soon as Congress acts. It is not necessary this
    program to wait for a Federal agency to act first and there is
    I think further evidence that a temporary, targeted incentive
    program like HomeStar can work the Clean Energy Manufacturing
    Tax Credit Program that was in the Stimulus Bill of last year
    has drawn tremendous interest from the private sector. Section
    48C provided 30 percent tax credit for investments in
    facilities that manufacture clean energy technologies and that
    includes the wind, solar, batteries, advanced transportation,
    advanced energy transmission. The initial tax credit under 48C
    was capped at $2.3 billion. It has the potential to generate
    some 58,000 jobs. It is already over subscribed and so we also
    are happy to support the Administration's initiative that Vice
    President Biden is announcing today that is going to provide
    additional $5 billion to expand that current program.
        We recognize the need to promote energy efficiency across
    the U.S. economy. Manufacturing accounts for one-third of our
    Nation's energy use. Cost effective energy efficiency and
    conservation measures are the key to reducing overall energy
    cost inputs and it is a way to stretch available energy
    supplies, at the same time reducing greenhouse gas emissions.
    The manufacturing sector itself has taken the lead in reducing
    energy usage and increasing energy efficiency making it a
    priority. The improvements in energy efficiency in the
    manufacturing sector have helped the country actually 48
    percent more efficient in energy use per unit of GDP and they
    have reduced the energy intensity of the U.S. economy by nearly
    two percent. Similar efforts by homeowners would make a
    substantial contribution to U.S. energy security because they
    also are responsible for about one-third of energy consumption
    as the Secretary mentions in her testimony.
        Manufacturers are committed to producing the necessary
    energy efficient consumer products such as insulation, windows,
    doors, skylight, heating and cooling systems and likewise, we
    are pleased to see in this morning's draft that was made
    available, the inclusion of other products that are also
    designed to promote residential energy efficiency. With more
    than half of the 86 million single-family homes throughout the
    United States built before modern codes even existed, the vast
    majority of the homes in the United States are not well-
    insulated, have outdated heating and cooling systems,
    inefficient windows and doors. They are great candidates for
    energy efficiency upgrades. Just think this, if consumers
    install more energy efficient products, they could save up to
    30 percent on their energy bills and the MacKenzie Study which
    many of us are quite familiar with, show the United States can
    save more than $600 billion in energy costs by 2020 if we spent
    more on making our homes and our buildings more energy
    efficient.
        Mr. Chairman, as you and your subcommittee fully
    understand, the country faces significant challenges in terms
    of job creation and energy use. Our manufacturers believe the
    HomeStar Program provides a unique opportunity to the public
    and private sectors to work together to address two major
    policy objectives, creating jobs and lowering unemployment
    while making American homes more energy efficient. We look
    forward to working with you expeditiously to make HomeStar a
    reality.
        [The prepared statement of Mr. Engler follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Markey. Thank you, Governor, very much. Our honor to
    have you here with us, thank you.
        Our next witness, Mr. Michael Thaman, he is the President
    and CEO and Chairman of the Board of Owens Corning. Owens
    Corning is a global producer of residential and commercial
    building materials and fiberglass insulation. We welcome you,
    sir.

                      STATEMENT OF MICHAEL THAMAN

        Mr. Thaman. Chairman Markey, Ranking Member Upton and
    members of the committee, thank you for the opportunity to
    testify. I also thank Chairman Markey and the committee for
    your leadership in recognizing the importance of energy
    efficiency as it relates to national energy policy.
    Additionally, I would like to personally thank and recognize
    Congressman Welch for your hard work on the progress we have
    made.
        My name is Mike Thaman. I am Chairman and CEO of Owens
    Corning, a global company based in Toledo, Ohio. I am proud of
    Owens Corning and our energy efficiency focus. Our company was
    founded in 1938, when we first commercialize glass fibers that
    led to the creation of fiberglass insulation. We produce more
    energy-saving insulation than anyone else in North America. We
    operate 55 manufacturing facilities in the U.S., including
    insulation plants in Ohio, California, Texas, Georgia, New
    York, Kansas, Utah, Oregon, Arizona and Illinois.
        In the midst of the downturn in the U.S. economy and the
    housing industry, we have experienced significant job loss at
    Owens Corning. The businesses in our building materials group
    in the U.S. today employ 25 percent fewer people than at their
    peak of the U.S. housing cycle in 2006. In 2009, our insulation
    plants operated at only 50 percent of capacity, compared with
    full utilization in 2006.
        Contractors who buy and install our insulation are also
    struggling. Data from the Insulation Contractor Association of
    America indicates that the unemployment rate in the installer
    community is about 30 percent, three times higher than the
    current national unemployment rate.
        I join you today in support of HomeStar and your effort to
    create jobs in America. HomeStar as currently proposed will
    create demand for the residential insulation products that my
    company manufactures and sells. HomeStar will create jobs at
    Owens Corning. As important, it will create work for insulation
    contractors across the country as well as the suppliers and
    distributors that make up the sales and supply chain supporting
    America's insulation industry.
        As you know, HomeStar is designed to provide financial
    incentives for energy efficiency investments in residential
    buildings. It has two primary components, Gold Star which
    provides incentives for comprehensive energy audits and Silver
    Star which provides immediate near-term incentives to drive
    specific energy-saving investments like insulation, windows,
    doors, HVAC systems and water heaters. We strongly support both
    components of the program. We do believe that Silver Star is
    more likely to have the most immediate impact on jobs.
        We have carefully studied HomeStar. It will create jobs at
    Owens Corning and at many other businesses that employ workers
    across the housing sector. HomeStar will also reduce energy use
    and home energy utility bills. That is important. According to
    the EPA, the average U.S. household spends more than $2,200 a
    year on energy bills with nearly half going to pay heating and
    cooling costs. Buildings in the country are the largest energy
    consumers. Buildings consume 40 percent of our Nation's energy
    and over 70 percent of America's electricity. Our homes are
    with us for generations. Many of our Nation's homes were built
    before there were appropriate energy codes or any energy codes
    at all.
        The fundamental rationale for investing in energy
    efficiency home retrofits is compelling and the outcomes are
    measurable and meaningful. Today, more than 80 million American
    homes are under-insulated. As a leading producer of insulation
    products, our best estimates tell us that each year 99 percent
    of U.S. homeowners will not re-insulate their homes without
    financial incentives. At the same time, our experience has
    shown us that financial incentives will drive people to invest
    in energy efficiency products when those incentives are
    meaningful and when the process to access them is simple and
    direct.
        Insulation reduces energy cost to a homeowner. A study
    published in 2007, by the global consultancy, MacKenzie, which
    Governor Engler referenced, reports that insulation is the most
    cost-effective way to reduce energy consumption and carbon
    emissions in the U.S. In the midst of the current economic
    downturn and with the national unemployment rate surpassing
    nine percent, putting Americans back to work to make energy
    saving investments is a good idea. HomeStar gives all Americans
    an opportunity to act and an opportunity to make a difference
    in creating jobs and saving energy. HomeStar's direct approach
    will drive demand and create sustainable U.S. jobs. By
    including rebates for insulation purchased on an installed
    basis or at retail, all American homeowners can participate in
    this program. This is good policy because there are certain
    consumers who prefer to do the jobs themselves. They should not
    be left out of the program.
        When we drive demand for insulation, we create U.S. jobs.
    The U.S. insulation industry is uniquely U.S. job-centric.
    Virtually, all of the insulation-related jobs, raw materials,
    manufacturing, delivery, sale and installation occur within
    several hundred miles of the U.S. home where the insulation
    will be installed. HomeStar can be a job creation bridge for
    thousands of unemployed insulation manufacturers and
    contractors who are awaiting the return of the U.S. housing
    market. Today, leading economists forecast that the housing
    market will not see a pronounced recovery until 2011 or 2012.
    Without HomeStar, the outlook for unemployment in our industry
    is not expected to improve any time soon. HomeStar is a great
    opportunity to create jobs, save energy, become more energy
    secure and reduce energy bills. Putting people back to work is
    sound economic policy. Making existing homes more energy
    efficient is sound energy policy.
        I urge you to take the necessary steps to ensure that
    HomeStar becomes law. I look forward to answering any questions
    that you might have. Thank you.
        [The prepared statement of Mr. Thaman follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Markey. All right, thank you, sir.
        Our next witness is Mr. Christopher Pratt and he is the
    Vice President of Construction Development Services in Troy,
    Michigan. He is here on behalf of the National Association of
    Homebuilders. Mr. Pratt has authored portions of training
    curriculum for the national homebuilders, Homebuilders
    Institute on Weatherization in Residential Housing so we
    welcome you, sir.

                  STATEMENT OF CHRISTOPHER A.S. PRATT

        Mr. Pratt. Thank you. Good morning, Chairman Markey,
    Ranking Member Upton and members of the subcommittee.
        My name is Christopher Pratt. I am a construction design
    and energy specialist from Troy, Michigan with over 25 years of
    experience, as well as a weatherization instructor for a number
    of State programs. I am pleased to testify on behalf of the
    National Association of Homebuilders about the HomeStar
    proposal.
        Mr. Markey. How old were you when you began getting your
    experience, 25 years ago?
        Mr. Pratt. I tell people I grew up an SOB, a son of a
    builder so I grew up doing hard work.
        Mr. Markey. So like when you were five?
        Mr. Pratt. Fifteen.
        Mr. Markey. Fifteen, OK, good.
        Mr. Pratt. I am old. I don't look it.
        NAHB supports incentives for retrofitting older homes and
    believes this is the best way to achieve meaningful energy
    savings in the residential sector. We see the potential in a
    program like HomeStar to deliver energy savings and create jobs
    if it is crafted in a manner that will promote long term
    workforce development and craft trades for contractors doing
    weatherization work. NAHB has already successfully demonstrated
    its ability to manage federally funded retrofit programs like
    Project Reenergize in Minnesota. Late last year, the builder
    association there administered this rebate program with
    Stimulus funds and in a few short months over 1,400 homes were
    retrofitted, 800 contractors were employed and nearly $3
    million were returned to customers in rebates for energy
    efficiency upgrades.
        NAHB hopes to ensure that the HomeStar Program is equally
    accessible by all qualified, highly-trained contractors that
    have undertaken legitimate workforce training and possess
    appropriate job skills in weatherization. We are concerned with
    the limitations on the certified workforce definition in the
    current draft legislation. Specifically, NAHB requests the
    inclusion of the Homebuilders Institute or HBI as a qualified
    workforce development program. HBI is the largest jobs corps
    partner with the U.S. Department of Labor and has developed a
    robust weatherization curriculum that creates a career path for
    professionals doing retrofit work that will provide them with
    long term employability. While HBI includes a certificate
    component, the development of the worker base and a job skills
    training in retrofit work is the centerpiece of the program and
    meets the goal of creating jobs in the emerging retrofit
    industry that will outlast the short term incentives of the
    program. HBI is a legitimate workforce training program that
    deserves equal considerations with others listed in the draft.
    The weatherization curriculum, although newly introduced was
    developed via a thorough task analysis and skills assessment
    process and provides four levels of skilled training,
    apprentice, weatherization worker, weatherization specialist
    and energy analyst. The curriculum includes course work
    covering everything from basic theory to calculating heat loss,
    in addition to hands-on practicum that teaches workers how to
    install 80 different weatherization products and perform 45
    different installation activities. It is structured to
    accommodate all standards in use and can be administered and
    offered through a network of community colleges around the
    country among others.
        For example, I am currently teaching--I am currently
    training workers in this program in Houston, Texas as part of a
    Workforce Investment Grant. The program is currently being
    delivered throughout a number of partnerships with Goodwill
    Industries, the Carpenters' Union, Ferris State University,
    among other. Above all, the program is about equipping workers
    with the appropriate job skills to serve them for their entire
    career and not just selling a certification credential. In that
    regard, HBI is considered a legitimate workforce development
    program along with other currently listed in the draft.
        Another important item that may affect a successful
    implementation of HomeStar is the effective date of an EPA rule
    covering renovation and retrofit work in pre-1978 homes
    beginning on April 22 of this year. Unfortunately, EPA does not
    have enough certified renovators that can legitimately work to
    retrofit older housing that the HomeStar Program hopes to
    target. Contractors cannot meet the EPA's certification
    requirements for the Lead Renovation Repair and Paint Rule by
    April 22 and will be breaking Federal law if they work on pre-
    1978 homes. NAHB supports lead-safe work practices as well as
    retrofit incentives but unless compliance issues with the lead
    rule are addressed I believe this could deter work in older,
    less efficient homes. NAHB supports retrofitting older homes
    and we are truly the experts in this field. We support the
    benefits in both job creation and energy savings that the
    program like HomeStar could deliver but we are wary of the
    potential limitations such as the exclusion of HBI and the
    effective date of the EPA rule. We believe both of these issues
    if not addressed could ultimately limit the impact of HomeStar.
        I appreciate the opportunity to be here and present our
    thoughts on this proposal and we look forward to working with
    you. I would be happy to answer any questions.
        [The prepared statement of Mr. Pratt follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Markey. Thank you very much, Mr. Pratt.
        That completes the time for opening statements of our
    witnesses. We will now turn to questions from the subcommittee
    members.
        Ms. Zoi, Governor Engler mentioned this morning a program
    announced by Vice President Biden. Could you talk about that
    program and how it dovetails with the program that we are
    talking about here today?
        Ms. Zoi. I think what Governor Engler was referring--how is
    that, better?
        Mr. Markey. Yes, fine.
        Ms. Zoi. I think what Governor Engler was referring to is
    an extension of the 48C Advanced Manufacturing Tax Credit, is
    that right? So that is a program that was part of the Recovery
    Act that gives tax breaks for establishing new manufacturing
    facilities in the United States that are in the clean energy
    sector. The program was over-subscribed, $2.3 billion has been
    allocated to companies that are getting things going over the
    next couple of years that they will create lots and lots of
    jobs in wind, and solar, and energy efficiency technologies,
    and combine heat and power but because it has been so wildly
    over-subscribed, the Vice President is proposing that we
    actually extend that program and top up the money to the tune
    of $5 billion.
        Mr. Markey. OK, so we would need to authorize that as well?
        Ms. Zoi. Yes.
        Mr. Markey. And you support that, Governor Engler?
        Mr. Engler. Yes, we can.
        Mr. Markey. Yes, do you support putting the $2 billion back
    in for wind and solar that we took out for the Cash for
    Clunkers Program as well, Governor?
        Mr. Engler. I haven't looked at that but, you know, we
    would certainly be open to talking about that. I mean I guess
    we look at this sector as being so hard hit that any number of
    these strategies we think can be fairly quickly effective at
    putting people back to work but certainly, we are here on
    HomeStar today because we just think that does put people to
    work.
        Mr. Markey. You were just saying good things about the
    other program so I was just hoping we could just have you get
    on a whole list of programs.
        Mr. Engler. You might as well press on there, I understand.
    OK, now I got you.
        Mr. Markey. And the Administration supports putting the $2
    billion back in for the wind and solar?
        Ms. Zoi. My understanding is that that provision might have
    been included in the first jobs bill that was just passed but
    we should go back and check but yes, of course.
        Mr. Markey. OK, great, I appreciate it.
        Ms. Zoi. Of course.
        Mr. Markey. So how many jobs will this program create, Ms.
    Zoi?
        Ms. Zoi. Somewhere in the tens of thousands, I mean I think
    the HomeStar Coalition has done a direct and indirect jobs
    estimate of 160,000. The direct jobs would be 60 to 70,000,
    lots and lots of important jobs.
        Mr. Markey. Great. Governor Engler, what is your hope for
    new jobs created by a program like this?
        Mr. Engler. We think that this has the potential--I am just
    checking my testimony to make sure I got my number right. I
    think I said sort of like the Secretary. I think it is 168,000
    but I want to make sure that I get that number right.
        Mr. Markey. Mr. Thaman is nodding his head.
        Mr. Engler. We just think that the design of this so that
    the homeowner actually once it is passed they can go forward.
    You are going to have the private sector really running the
    program. We would hope that the reimbursement would work better
    than it did with the Cash for Clunkers but I think everybody
    learned lessons off that and that would happen but Mr. Pratt's
    mention of the lead issue is kind of an interesting one. That
    probably need to also be attended to because you could--I
    happen to be in a home that was built before 1978 and so, you
    know, I am not sure I can get Mr. Pratt to come and take care
    of that so you can have a lot of people caught in that
    inadvertent situation so part of the cleanup would be good and
    I also would support his suggestion on HBI.
        Mr. Markey. Thank you, Governor.
        Mr. Thaman, we have heard complaints that HomeStar picks
    winners and losers for home products. Could you talk a little
    bit about the Gold Star Program creating a higher reward
    program for any product that achieves at least 20 percent home
    energy efficiency?
        Mr. Thaman. Well, I think there is two ways to look at
    improving the energy efficiency of a home. You can either look
    at the products that we know and have been demonstrated to
    improve energy efficiency or you can have performance raters
    come in and rate a home. I think there is a good balance
    between Silver Star and Gold Star to target and Silver Star's
    specific products and initiatives that we know save energy and
    then Gold Star have a more holistic approach, actually rating
    the home and testing the home for energy efficiency
    improvements. We know based on our history as an insulation
    manufacturer that any time you install more insulation you
    improve the energy efficiency of a home so it is a pretty safe
    bet to directly fund that initiative.
        Mr. Markey. OK and, Mr. Pratt, could you talk about the
    Gold Star Program and how that does reward any product that is
    more efficient.
        Mr. Pratt. As an energy rater myself, I personally believe
    that the performance based tests tend to be more efficient or
    guarantee or help improve the chances that the improved
    measures were installed correctly. So I also do some training,
    Mr. Upton might be aware, of the warm or excuse me, the program
    in Michigan where they go around and help homeowners install
    products in their existing home. I find sometimes when you are
    up in an attic space and it is 140 degrees, you spend less time
    working on the insulation then you do trying to get out of the
    attic space. So a lot of times there are good efforts put into
    tests but sometimes they don't get all installed the way you
    would like them to be installed.
        Mr. Markey. OK, thank you, Mr. Pratt.
        Let me turn and recognize the gentleman from Michigan, Mr.
    Upton.
        Mr. Upton. Well, thank you, Mr. Chairman, and I, you know,
    as I have talked to some of my colleagues on our side and heard
    some of the opening statements there is clearly some skepticism
    on this bill and in large part, you know, as we looked at the
    DOEIG report issued last month of the $4.7 billion that was
    awarded in grants under the Stimulus Plan, only $368 million
    has been used by the States so far and only some 30,000 that
    have been used. And I, you know, this was supposed to be a
    shovel-ready program, ready to go and clearly there was some
    need and as we look at the way that the Cash for Clunkers
    Program was administered, I mean I think most of us thought it
    would be pretty easy to do. You got 25,000 auto dealers across
    the country. There were provisions on fraud and abuse that were
    in place. You had to show that the car had been insured,
    actually would run and, you know, it had to meet the mileage
    requirements that anyone could figure out from the Internet and
    the dealers were supposed to be reimbursed I want to say within
    7 days. And I bet everyone of us here on both sides of the
    aisle heard from lots of our dealers saying it has been more
    than a month. We have got dozens of cars sometimes some of the
    larger dealers 50-100 cars the Department of Transportation
    hired more than 1,000 people. I mean that is, you know, they
    only had to make about two calls to a dealer per day to figure
    all this out with the documentation to get them done and it
    didn't happen. And now you are talking about a program that may
    be as large as eight times as more. This was a $3 billion
    program, Cash for Clunkers, over a limited span of time. They
    did 750,000 vehicles. You have got more builders. There is
    already a tax credit that is in place for homeowners to make
    whatever adjustments that they want up to I think it is $1,500
    tax credit on work that has to be at least that is what a 30
    percent tax credit on business that is done and as we look at
    fraud and abuse and how is at DOE that you are going to be able
    to determine whether people did both. They actually took a tax
    credit and then they did a deal with their builder that is
    supposed to be passed through them. Why not just keep it as a
    tax credit and let the power of the IRS make sure that there is
    some compliance versus what you are going to have to do in
    terms of additional staff and certification and everything
    else? Do you see where the skepticism comes on our side?
        Ms. Zoi. And I would love to.
        Mr. Upton. Yes, go ahead.
        Ms. Zoi. A very good series of issues that you raised and I
    welcome the opportunity to talk about first of all, how we the
    structure that we have in mind for this which is designed to
    leverage private sector expertise that is already taking place.
    The design for the main Government function is to prevent
    waste, fraud and abuse and to publish eligibility standards for
    the contractors that are capable of doing the work. I would
    also like to take a moment if I may to update the committee on
    the data about the Weatherization Program. So, in fact, why
    don't I take that one first?
        Mr. Upton. OK.
        Ms. Zoi. So the Weatherization Program as you point out is
    about a $5 billion program. The Recovery Act didn't double
    weatherization. It didn't triple it. It multiplied it times 25
    so 900 community action agencies had to spend a few months
    hiring more people. We had it was the first time ever that
    Davis Bacon wages were applied. The Labor Department had to
    determine what fair wages were. So the community action
    agencies spent the summer months hiring, training, figuring out
    the Davis Bacon wages. The ramp up well and truly started in
    the fall. We tripled the number of homes that were done between
    September and December. The ramp rate that we need to be at to
    meet the overall goals for the program by March, 2012, is about
    20 to 25,000 homes a month. We estimate in February there was a
    short month and it was a snowy month in most of the country but
    we did probably 17,000 homes so we are within striking distance
    to our max ramp rate that is required. This is actually a great
    tribute to the ability of these 900 community action agencies
    to ramp up quickly. So it took longer then expected to get
    going but I would also I applaud what Congressman Barrow
    pointed out, this was a program that is 30 years old. It has
    certain structures in place. The Federal Government has to give
    money to the States. The States then give money to the local
    community action agencies. It is a well-established network. We
    are designing the HomeStar Program to not have be encumbered by
    some of those same things that service the low income community
    only so what we have then done is pivoted and said well Cash
    for Clunkers may have had a few hiccups.
        Mr. Upton. A few.
        Ms. Zoi. Because it required 9 pdf to be submitted for
    every single transaction as you pointed out so what we have in
    mind here is something that uses modern IT that has a list of
    we work very closely with rebate aggregators who are the
    network managers for the sector. They put together, we put
    together a simple form that is filled out by all the certified
    contractors. Those eligibility criteria are all listed and then
    with the Federal what the Department of Energy has to do is
    ensure once the rebates are aggregated and submitted we do the
    reimbursement. The second part of it is establishing a quality
    assurance program and we work in partnership with the States
    because again they are the ones who have home inspector
    networks and what we do is capitalize on the fact that even
    some of those home inspectors are don't have much to do these
    days. We put those guys back to work. They are part of our
    quality assurance scheme where the States that are not quite
    ready to do the quality assurance, the Federal Government
    provides that default function. So we are absolutely taking
    very seriously the concerns that you have raised about other
    programs, taking it to heart and we feel very strongly that we
    can establish this program to get going as quickly as possible
    to get people back to work.
        Mr. Upton. I know my time has expired so I yield back.
    Thank you.
        Mr. Markey. The gentleman's time has expired.
        The chair recognizes the gentleman from Pennsylvania, Mr.
    Doyle.
        Mr. Doyle. Thank you, Mr. Chairman.
        Secretary Zoi, and you have just started to touch on this
    and I want you to expand on it further. A few years ago in my
    State of Pennsylvania, we had an internal audit of the
    Weatherization Assistance Program and it resulted that there
    was a backlog of nearly 9,000 applicants for the program, many
    of them constituents of mine that qualified for the program
    were stuck in this backlog and though the program was federally
    funded it was administered by Pennsylvania's Department of
    Community and Economic Development. So while I am very
    obviously excited about the HomeStar Program, I want to see it
    get going. I am a little concerned about the backlog. I just
    want to ask four quick questions and have you just comment on
    them and I think some of them you have touched on already. Is
    EPA prepared to process the rebates the contractors in the 30-
    day timeframe set out in the bill and what portion of this will
    be the State's responsibility? Do you foresee that it will
    require additional staff at DOE or EPA and at the State level
    to process these rebates? Will small businesses be able to
    process the rebates in the same timeframe as big box retailers
    like Home Depot or Lowe's? And then finally, I am concerned
    about the quality assurance measurement and how will we make
    sure that the work that is being done is good work? Homeowners
    are going to be able to measure the success of their work by
    their energy savings and this means that we don't have much
    margin for error. Can you explain how the contractors will be
    certified and who is going to be responsible for the oversight
    of the installations?
        Ms. Zoi. Yes, OK so the 30-day processing the answer is
    yes, we will absolutely do the 30-day processing. The small
    business eligibility again what we want the rebate aggregator
    concept is so that a variety of experts in the field, sector
    specialists, can help the small guys with what they need and be
    able to contribute so rebate aggregators might be the big box
    guys. They might be utilities. They might be existing home
    performance with Energy Star States that work very well with
    small businesses in bundling up those.
        Mr. Markey. Ms. Zoi, could you move that microphone in just
    a little bit closer, please, just pull it in.
        Ms. Zoi. How is that?
        Mr. Markey. OK, good.
        Ms. Zoi. So there are a variety of ways that the small
    business folks will be able to play and will be able to get the
    attention that they need quickly through the proposed
    structure. In terms of quality assurance for the contractors
    again, what we envision is that 20 percent of the jobs will get
    a field inspection, a post expert field inspection that folks
    that sign up for the program will agree that they will be--that
    they will make their home available for quality assurance
    because consumer confidence that they are going to get quality
    work is very, very important. There are a variety of
    contractors that are out there that do QA right now that will
    be part of this program. Again, the idea that we have got is
    that we lean on the States to be overseeing the programs that
    are happening within their States and again that what we are
    doing is we are leveraging work that is already happening right
    now and building on it and amplifying it to move quickly.
        Mr. Doyle. So what are we doing to make sure that States
    have sufficient manpower and personnel to make sure this, you
    know, how do we ensure that, you know, the State of
    Pennsylvania who had a 9,000 case backlog administering this
    program that this doesn't happen again. What onuses are put on
    the State or what responsibility is put on the State to make
    sure they have sufficient personnel to do this, too?
        Ms. Zoi. Well, there is financial--if the bill passes in
    its current formulation there are financial resources that are
    allocated to the States to be able to stand up those good
    quality assurance programs.
        Mr. Doyle. OK, thank you.
        Ms. Zoi. And just to your backlog question on
    weatherization.
        Mr. Doyle. Yes.
        Ms. Zoi. Unfortunately, there are 40 million people in
    America that are eligible for the low income program. We have
    been working very closely with Governor Rendell and the State
    of Pennsylvania and that program I think in Pennsylvania you
    are going to see a whole new set of Weatherization Program
    going forward so hopefully you will have that backlog will be
    reduced substantially in the coming year.
        Mr. Doyle. Yes, I mean it is a good program but we want to
    see it work as good as possible so thank you, Mr. Chairman.
        Mr. Markey. Great, the gentleman's time has expired.
        The gentleman from Pennsylvania, Mr. Pitts.
        Mr. Pitts. Thank you, Mr. Chairman.
        Madam Secretary, has DOE analyzed whether there are legal
    requirements that may delay the rollout of the HomeStar
    Program? In particular, will DOE have to take any actions to
    comply with the National Historic Preservation Act?
        Ms. Zoi. That is an excellent question, Congressman Pitts,
    because it has been some of those issues that have slowed down
    the implementation of the Recovery Act. The way the bill is
    currently configured what our lawyers tell us is that we will
    be able to stand up the program within 60 days of passage. We
    have to do an administrative rule, that is what the lawyers
    tell us but because of the structure of the law and because
    much of it is embedded in the statute, we will be able to do
    this very quickly.
        Mr. Pitts. Will DOE have to prepare an environmental
    analysis under NEPA? What kind of environmental review of the
    program would need to be done and how long would that take?
        Ms. Zoi. Again, what is envisioned here is similar to what
    happened with the categorical exclusion of the Weatherization
    Program is that essentially it is a very quick, simple,
    straightforward rulemaking because the environmental impacts of
    doing home retrofits are not material so therefore an
    environment assessment will unlikely be required but again it
    is a very quick process that won't inhibit speed at all.
        Mr. Pitts. Will there be any requirements that will need to
    be complied with under the program in terms of rates paid to
    contractors labor costs?
        Ms. Zoi. Again, no Davis Bacon would not apply to this so
    no.
        Mr. Pitts. In the event that in carrying out the program
    workers are injured or homes are damaged is there any risk of
    additional tax bearer liabilities?
        Ms. Zoi. Again, the way we have tried to structure the
    program is to build on existing contractor relationship
    certifications licensing and bonding so to the extent that only
    licensed bonded workers are part of this program that would be
    covered by whatever insurance they currently carry.
        Mr. Pitts. OK, thank you.
        Mr. Laseter, I have some questions about small business
    involved in retrofitting industry and how they would benefit
    from the program. In your written testimony you reference 7,000
    companies that make or install windows, 82 percent of which are
    small businesses. Of these, how many would you estimate are
    eligible to participate in the HomeStar Program?
        Mr. Laseter. Under the Silver Star Program, it is
    structured to for anybody as the Secretary said who is licensed
    and insured according to that State can immediately participate
    in the Silver Star Program so we would expect all of those
    contractors, those small businesses who wish to participate can
    participate immediately.
        Mr. Pitts. And would that also apply to the reference you
    have for 22,000 insulation installers?
        Mr. Laseter. Yes, sir, that is the reason again the Silver
    Star Program was structured in a way so that those existing
    small businesses, you know, as long as they are properly
    licensed and insured could participate immediately.
        Mr. Pitts. In your testimony, you indicate 168,000 jobs
    would be anticipated to be created, three million homes would
    be retrofitted. Is this based on an estimate of $6 billion in
    funding over 2 years?
        Mr. Laseter. Yes, sir.
        Mr. Pitts. And what are the assumptions underlying the
    estimate that three million homes would be retrofitted?
        Mr. Laseter. We can follow-up with the written reports. We
    used the report from AC Triple E and Climate Works who relied
    heavily on the MacKenzie study and other published works to
    come up with those estimates but the HomeStar Coalition would
    be happy to submit the detail.
        Mr. Pitts. Governor, as far as job creation in the
    manufacturing sector is concerned, what impact would a fully
    implemented HomeStar Program have in comparison to new home
    construction returning to pre-recession levels?
        Mr. Engler. Well, I don't know what the new home
    construction gets back to. I said in my testimony if we got
    back to where we were there is an additional 128,000 jobs. I
    mean these are all estimates. Could HomeStar if we suddenly are
    able to reach three million homes you get a lot of impact that
    is not all right in manufacturing because there is a lot of it
    in the service sector as well that is dependent on
    manufacturing and manufacturing is dependent on service people
    being busy so we can make products for them. I don't have a
    hard number on that.
        Mr. Pitts. Are there any other programs you would like to
    see included or does HomeStar exclude any beneficial energy
    efficient products or improvements for the home?
        Mr. Engler. The committee draft there were some concerns on
    some of the do-it-yourself work that could be done. There has
    been some modification I think that recognizes some of that and
    as I think Mr. Thaman testified there is in the Silver Star
    there are things that can get done very quickly. In the Gold
    Star you are pretty much wide open to I mean if you want to do
    an entirely new HVAC, new water heaters, new whatever it is all
    there for that so I think it has done a pretty good job. I
    realize I mean the intention is we would like to move quickly
    to get this gone. In fact, I would like to see the agency
    commit to 30 days to be done. I don't know what there minimums
    are but, you know, most it shouldn't take 60 days of government
    work to write a simple rule, first draft it is a pretty
    straightforward. That ought to be--the draft ought to be done
    now at the agency so the minute it is signed and the rule is
    filed that we can accelerate this because we got to get away
    from government time and go to private sector time which is
    much, much more aggressive.
        Mr. Pitts. Well, the do-it-yourself, Mr. Thaman, provision
    in the latest bill draft is $250. Do you know how much the cost
    for insulation of an average home this would cover?
        Mr. Engler. I will turn to Mr. Thaman. We have got an
    expert sitting next to me on that one.
        Mr. Thaman. You know, again it is going to depend whether
    you have an insulation contractor coming in to install the
    product for you or not but in a typical home if you were to go
    and buy a product at a big box retailer and bring enough
    product home to restore at least the attic portion of your home
    to today's energy codes, certainly for $800 or $1,000 you could
    buy enough product to bring your attic up to code so we would
    expect for the $250 rebate that that is a pretty good size
    incentive to encourage people to want to go do that project.
        Mr. Pitts. Thank you, I have gone over time, sorry.
        Mr. Markey. The gentleman's time has expired, no problem.
        The chair recognizes the gentleman from Vermont, Mr. Welch.
        Mr. Welch. Thank you very much, Mr. Chairman.
        Mr. Engler or Governor Engler, I did some careful research
    about your background before this hearing and I understand you
    are a Republican.
        Mr. Engler. Well, I was certainly elected that way 10
    times.
        Mr. Welch. Well, what I want to ask you if you are here
    supporting a program that is advanced by a Democratic
    Administration, it is being advanced by some of our best
    manufacturers and environmentalists, it is supported by
    management and labor, by homebuilders and homeowners, do you
    get nervous being in that company or should we take this as a
    suggestion that maybe this is a good idea?
        Mr. Engler. Well look, the last time I checked with 10
    percent unemployment rate we have got a lot of unemployment for
    Republicans and Democrats with enough to go around out there so
    we would like to put people back to work. We think this does
    that and from the manufacturing perspective, we just want to
    see things put in place that will work, that will work quickly
    and get us back on a road to recovery. There is simply not
    enough demand in this country.
        Mr. Welch. And that is the point and I really do very much
    appreciate you being here. The other question that is
    legitimately raised is always about details about practical
    implementation and I just ask this of the panel. This is
    intended to be designed so it is simple. You are relying on our
    local manufacturers like Owens Corning and Masco that are
    already in this work but need more demand. You are relying on
    contractors who are not building homes but know how to retrofit
    homes so we don't have to do all kinds of training, and we are
    relying on homeowners who are going to have to get in the game,
    and if I get a $1,500 rebate or pre-bate but I have to put
    $1,500 of my own money in, as a card-carrying, free market
    Republican do you have some confidence that I am going to make
    certain that if I put $1,500 in, the tax payer puts $1,500 in,
    I am going to want to get not $3,000 but maybe $4,000 worth of
    value.
        Mr. Engler. There is no question about that. That is
    exactly right and this is very different then one member has
    asked the question about weatherization earlier. I mean if this
    were going to be running through CAP agencies I would be here
    opposing it.
        Mr. Welch. Right.
        Mr. Engler. This is not going to do that. This is going to
    go to private sector.
        Mr. Welch. Yes, it is private sector. It is private
    homeowner and, Mr. Laseter and Mr. Thaman, does this create
    hassles for you, this program? Sometimes programs come up and
    they have all kinds of strings attached and burdens imposed on
    you or does this allow you to be more successful just by doing
    what you do but do more of it?
        Mr. Laseter. Yes, I think the strength of the HomeStar
    Coalition was having a broad input from, you know, industry,
    labor, environmental groups and, you know, national
    associations and State energy officials so a lot of players who
    have done this for many years with a heavy focus on the
    industry. This program is simple for the customer because the
    consumer gets an instant rebate. It is going to be simple for
    the contractor. They fill out a form to send to get their money
    back and that is one of the reasons this thing is going to
    work.
        Mr. Welch. Right.
        Mr. Thaman. Congressman Welch, in my testimony I said that
    it is important that this be simple, it be meaningful and it be
    direct. I think one of the key things here is homeowner
    education and if we give the private sector an incentive to get
    out there and market the idea and sell the idea I think you are
    going to get a multiplier affect as opposed to having a
    Government agency try to do it.
        Mr. Welch. Right and, Mr. Pratt, we have got the workforce
    out there that wants to get to work?
        Mr. Pratt. Yes and we have an opportunity to use the
    existing 800 homebuilder associations to do training if that is
    the case.
        Mr. Welch. OK and, you know, Secretary Zoi, I do know that
    you have heard from these folks and others that simplicity is
    the key here. That partnership between the public and the
    private using what we have, not reinventing something new to do
    something that needs to be done and we know how to do it.
    Governor Engler suggested speed is of the essence and
    simplicity is of the essence. My sense is that you are very
    committed to speed and simplicity, and I just wish you would
    comment on that.
        Ms. Zoi. Well, absolutely, we and I have spent about half
    my career in the private sector trying to get things done
    quickly and Government is not always famous for that. This
    program has been designed to utilize and harness the very
    strong presence and knowledge of all of these sector experts
    that are in the private sector now and to leverage the
    marketing capability, as I think as Michael just mentioned so
    we absolutely have this in mind. We all need to do this if we
    can do it quickly and we can do it quickly.
        Mr. Welch. OK, well, I look forward to working with my
    colleagues on trying to address whatever suggestions they have
    to make this simpler and more efficient.
        I yield back. Thank you.
        Mr. Markey. Great, the gentleman's time has expired.
        The chair recognizes the gentleman from Illinois, Mr.
    Shimkus.
        Mr. Shimkus. Thank you, Mr. Chairman, and as I start we
    have our fine technician working on our thermostat right here
    perfectly timed. Wave to everybody so it is great timing maybe
    we can include.
        Mr. Markey. It is a very old-fashioned thermostat.
        Mr. Shimkus. That is right. We need some Government money
    to do that.
        Let me and it is great to follow my friend and colleague,
    Peter Welch, who has been working very diligently on this. I
    also find it curious when a progressor really takes a free
    market competitive stance. I think what Republicans and
    conservatives are worried about right now is our national debt,
    all consuming above everything else. In 2009, our budget was
    $3.2 trillion, our deficit was $1.3 trillion and our debt was
    $12.3 trillion. In 2010, our budget was $3.3 trillion, our
    deficit $1.3 trillion and our debt was $14.5 trillion. That is
    debt. This year we got a $3.4 trillion budget, a projected
    $1.65 trillion deficit and a debt that is going to hover around
    $15.7 trillion so a lot of the concerns that we have over here
    is how will we pay for this and does anything on the panel want
    to suggest how we are going to do that?
        Ms. Zoi. The President has suggested previously paying for
    this out of TARP, their funds.
        Mr. Shimkus. And wasn't the TARP legislation originally
    passed that that would go down to pay down the debt?
        Ms. Zoi. And I guess I would suggest.
        Mr. Shimkus. Was that what the law says on the TARP funds,
    correct, right now? The answer is yes so that is not an answer.
    That is taking legislation that we had designed to pay down the
    debt as the TARP funds got paid back and now using it to fund
    another program which is not solving the problem of a pay-for.
        Ms. Zoi. I think this is part of a jobs proposal and I
    think what we find ourselves in is that we still, the economy
    still needs.
        Mr. Shimkus. So you are not predicting a pay-for for this?
        Ms. Zoi. I think that the Congress should work out with the
    Administration the best way to pay for this.
        Mr. Shimkus. OK so you want a pay-for for this?
        Ms. Zoi. We want the bill to be passed so that we can get
    these people back to work.
        Mr. Shimkus. Well, do you want this paid for or not?
        Ms. Zoi. I think that we would like to.
        Mr. Shimkus. Or do you want to go into further debt? That
    is the question I mean you are from the Administration. Do you
    want this paid for or do you want us to go and continue debt
    and deficit spending?
        Ms. Zoi. I think we will need to have conversations to work
    this out together.
        Mr. Shimkus. You know that on the House side we have pay-
    for legislation. Would you think that is important for us to
    continue to abide by our pay-go rules now in the House that
    this be fully paid for?
        Ms. Zoi. I think that is a matter for your consideration.
        Mr. Shimkus. OK, the Administration has no position on
    whether this should be pay-for or not?
        Ms. Zoi. We would like to work with you to get the bill
    passed.
        Mr. Shimkus. OK, thank you very much.
        Anyone else want to talk about whether national debt is
    something to be concerned about?
        Mr. Engler. Sure, I will take a piece of this. I mean you
    have got to realize that the Department here is on the spending
    side. You have to, Mr. Orzag and the budgeters in here I guess
    but from the manufacturing perspective there are a number of
    things that we ought to do as a Nation that would be both
    useful in terms of having a growth strategy and I think
    important to reduce the debt. I will throw one where there is
    $60 billion of exports riding on fixing the export control laws
    that are antiquated in this country. We could export more of
    our technology goods. We ought to do trade policy more
    effectively and there are a lot of jobs there. I think we also
    need to look at as people go back to work and are working, the
    economy is growing there are actually more taxes then even in
    the '90s. If we look it was really economic growth that had a
    big contribution as well as fiscal spending restraint that
    happened and I think when you have got the unemployment rate at
    double digit levels where we are today that these kind of
    programs ought to be looked at as how many people go back to
    work, how many taxes they will pay and how that fits in but
    there is a whole host of other things that I would.
        Mr. Shimkus. Yes and let me finish with this, Governor
    Engler. I appreciate your position and comments. There is a lot
    of uncertainty out there in America today, especially in the
    manufacturing sector. Does movement to an energy legislation or
    climate legislation provide more or less certainty in the
    manufacturing sector?
        Mr. Engler. It is helpful because energy security is very
    important to manufacturing.
        Mr. Shimkus. What about climate?
        Mr. Engler. Well, I think it is helpful in showing that
    there are market-oriented solutions that will work.
        Mr. Shimkus. What about the increased cost of energy that
    will be passed on to the manufacturing sector?
        Mr. Engler. Well, this actually helps to reduce that.
        Mr. Shimkus. No, I am not talking about this. I am talking
    about climate legislation.
        Mr. Engler. Well, we have a number of issues with the
    chairman on when we get to that question and hopefully----
        Mr. Shimkus. Well, that is why we have you here. We get a
    chance to ask you about these all-pressing issues.
        Mr. Engler. I am happy to spend time on that if you wish,
    if you want to go there.
        Mr. Shimkus. I know you are. My time has expired. Thank
    you.
        Mr. Markey. I thank you, Governor, you did not know--you
    did not have an answer to my extraneous questions so thank you
    for not having an answer to Mr. Shimkus. You are very
    consistent and you are very consistent in your testimony.
        Mr. Engler. I realize who is chairing, Mr. Chairman.
        Mr. Markey. I know you have an answer to both of them
    actually but thank you for staying on point here.
        The chair recognizes the gentleman from Georgia, Mr.
    Barrow.
        Mr. Barrow. Thank you, Mr. Chairman.
        Just following up on the theme that has been raised several
    times about how to make this as low-maintenance, as user-
    friendly as possible. What will the customer, the taxpayer, the
    homeowner actually experience? What will the experience be like
    for the man or the woman that we are asking to basically we are
    trying to get to nudge in this direction because as Mr. Welch
    has pointed out, folks are going to have to have some skin in
    the game and we want to give folks an encouragement, a proper
    encouragement. We don't want to discourage them with something
    that is bureaucratic, involves a hassle, involves making them
    think about things that actually try and get in the way of
    doing what is even in there rational best interest to use a
    behavioral economic-type approach to this problem. Who can
    describe what the experience is going to be like for the
    customer? What are the things that they get to consider and
    what is it going to be like and especially comparing and
    contrasting this with another approach, let us say a tax credit
    approach which I think has certain advantages but also certain
    disadvantages in terms of encouraging folks to do things right
    away giving them the feedback, the positive feedback right
    away? Who wants to take a, Mr. Laseter, would you like to take
    a stab at that?
        Mr. Laseter. I am happy to give an answer as a contractor
    serving customers.
        Mr. Barrow. Thank you.
        Mr. Laseter. When we go in the home today we do proposals
    today as general contractors big and small do every single day
    in America, and under this program we can add a line item that
    will say here is your instant rebate under the HomeStar Program
    and subtract that amount so the customer pays the total minus
    the instant rebate to us. That is the customer experience.
    There is not a research do I qualify for the tax credit. I have
    to pay you now and go out-of-pocket and I get my tax credit
    back next year.
        Mr. Barrow. Hopefully.
        Mr. Laseter. Right that, excuse me, is a point of sale from
    the homeowner's perspective when they are buying or purchasing
    they are getting an instant rebate and that is the difference
    and what will really drive some consumer demand.
        Mr. Barrow. How about for the retailer though, the
    manufacturer, the folks who are being who are coming up with
    the materials to be sold and installed? What is the experience
    like for them?
        Mr. Laseter. Yes, from the perspective of the supply chain
    after that, as a contractor I submit my paperwork to get my
    instant rebate. That is applied directly to again contractors
    big and small who participate in the program and then we buy
    through distribution channels that may be at retail. They may
    be, you know, direct. They may be, you know, through
    distributors that are in the marketplace for these different
    products and services. So the money, you know, just goes all
    the way up the supply chain that exists today.
        Mr. Thaman. And from an Owens Corning perspective as is the
    case I think of most the manufacturers, you know, the nature of
    our business would not change dramatically in terms of how we
    invoice or get reimbursed by our customers. Hopefully, it would
    change because there would be more demand and obviously with
    our distinctive pink brand and our brand name we talk to
    homeowners all the time. We talk to retailers all the time. I
    think you would expect companies like ours to be very
    aggressive about helping promote these ideas and get homeowners
    to understand that for a limited time, they have an opportunity
    to do something good for their home, good for their energy bill
    and good for the environment.
        Mr. Barrow. Thank you.
        And with that, Mr. Chairman, in the interest of letting
    some others have some of the time remaining, I yield back the
    balance of my time.
        Mr. Markey. Great, we thank the gentleman.
        The chair recognizes the gentleman from Alabama, Mr.
    Griffith.
        Mr. Griffith. I am sorry. Thank you, Mr. Chairman, I am
    sorry I was late coming back in but the suppliers of the
    windows and other materials, those we heard that they were
    going to be mostly American manufacturers and is there any way
    to ensure what percentage that might be or is that germane? Is
    that an important question?
        Mr. Thaman. Well, you know, I can start by talking about
    the insulation industry. I mean insulation is kind of uniquely
    U.S. centric because it is a very lightweight, low value
    product and so you can't ship it very far. So the nature of the
    product is we make fiberglass insulation; our input materials
    are sand. Our sand suppliers and our bag suppliers are very
    close by to us. We manufacture close to the market. Our
    trucking firms are very close to us. Our contractors live in
    the communities in which they install. So we see a supply chain
    that begins and ends right in the United States without any
    need for any intervention to say this needs to be U.S.-based.
        Mr. Griffith. Thank you.
        Mr. Engler. Specifically on windows, the window and door
    manufacturers were in town this week and all over the Capitol,
    but that again is the kind of product given its weight, it is
    actually being produced in many, many States close to the
    markets. It is not something that you ship from across the
    world here for the domestic door-window, windows in particular.
        Mr. Griffith. Thank you. I agree completely. Where are the
    most obvious areas for abuse of this program? Would it be in
    the contractor? Would it be in the invoicing? Is there any
    competition for a customer to get a second bid on the cost? How
    does that work?
        Ms. Zoi. Well, what we intend to set up is a system that
    does not allow rebates or double rebates so again what the
    limiting factor will be one measure, one eligible measure per
    address and the system, once that gets admitted we won't accept
    double claims so again you can design that with modern IT and
    not allow, I mean just as if you are online shopping and you
    haven't filled out a field you get a little red signal. It is
    like uh-oh, you know, 234 Main Street has already gotten an
    official water heater through this program. They can't do it so
    again, we are going to set up a system that doesn't allow that.
        Mr. Laseter. And if I may, from a customer's perspective,
    this is a market-based program. The customer can shop as many
    general contractors as they would like to shop to get the best
    price before they decide to do the home improvement so again we
    think the strength of the program is it is so market-based.
        Mr. Griffith. I appreciate those answers and they are
    comforting and I appreciate that.
        Mr. Chairman, I yield back my time.
        Mr. Markey. Great, the gentleman's time has expired.
        The chair recognizes the gentlelady from California, Ms.
    Capps.
        Mrs. Capps. Thank you, Mr. Chairman, and before I begin,
    may I ask unanimous consent to enter into the record two
    statements each in favor of the HomeStar and Lead Renovation
    Rule?
        Mr. Markey. Without objection, they will be included.
        Mrs. Capps. One is from the Labors International Union of
    North America and the other is from the American Public Health
    Association.
        Mr. Markey. Great, without objection, so ordered.
        [The information appears at the conclusion of the hearing.]
        Mrs. Capps. Thank you very much.
        As you know, Mr. Chairman, in 1992, this committee held
    hearings on a serious problem, hundreds of thousands of
    children being harmed by exposure to lead which damages the
    development of the brain and nervous system. This committee
    took action and passed the Lead Exposure Reduction Act on a
    bipartisan vote of 39 to 4. That legislation reduced lead
    hazards in a number of ways including by requiring EPA to
    identify lead-safe remodeling and renovation practices and to
    make sure that contractors were trained in these lead-safe
    practices. Now, almost 20 years later, EPA has developed these
    commonsense rules and they will finally go into effect next
    month.
        Now, Mr. Pratt, you have suggested in your testimony that
    these long, overdue projections for children's health should be
    further delayed in conjunction with the HomeStar Program and I
    find this particularly very troubling. I wonder if you are
    aware that the EPA and Centers for Disease Control estimate
    that one million American children are exposed to harmful
    levels of lead that damage the development of their brains and
    nervous systems, often irreparably?
        Mr. Pratt. Yes, the point that I was trying to make was
    that there was 14,000 contractors.
        Mrs. Capps. Let me get to that in a second but thank you.
    Are you aware that the first year it is in effect, the lead
    rule is expected to shield 1.4 million children under the age
    of six from hazardous lead dust?
        Mr. Pratt. Yes.
        Mrs. Capps. Mr. Pratt, your testimony states that EPA has
    not certified enough contractors to comply with the Lead
    Renovation Rule and your testimony asserts that fewer than
    14,000 contractors have been trained to date. Mr. Pratt, I
    understand that the committee's desk spoke with EPA yesterday.
    Did you know that based on updated information, the EPA
    estimates that 50,000 individuals have now been trained to date
    at more than 3,100 courses. Are you aware that EPA estimates
    that at least 100,000 individuals will be trained by the time
    the rule goes into effect next month?
        Mr. Pratt. No, I was not but I would modify my written
    testimony if that is what is needed.
        Mrs. Capps. Thank you. Let me just wind up then. Thank you.
    Your testimony states that there are no training providers in
    several States and I want to clarify that many of the training
    providers do travel from State to State and these traveling
    providers have traveled to States that do not have fixed site
    trainers. For example, despite the absence of a fixed site
    training entity, hundreds of renovators have been trained in
    Louisiana already and I am going to close by just saying, Mr.
    Chairman.
        Mr. Markey. You have 2 minutes left.
        Mrs. Capps. I know but I want to make a statement. I
    appreciate Mr. Pratt's acknowledgement that maybe we need to
    update, you know, the numbers that we have according to the
    latest figures that we were able to get but I for one strongly
    oppose the notion of delaying this Lead Rule. I don't believe
    it is right and I don't believe it is necessary. I believe
    taxpayer dollars shouldn't go to, should not go to projects
    that permanently damage children and I don't accept that we
    need to sacrifice our kids' health in order to put people back
    to work and save energy and with that I yield back my time, Mr.
    Chairman.
        Mr. Markey. We thank the gentlelady.
        The chair recognizes the gentleman from Texas. Oh, yes, I
    think it is the gentleman from Texas, Mr. Burgess.
        Mr. Burgess. Thank you, Mr. Chairman.
        Secretary Zoi, one of the little magazines that we all get
    up here all the time last week had some numbers from your
    Department about what had been received in Stimulus funds and
    what had actually been spent. Presumably, that was public
    information that was put out by the Department of Energy. How
    have you done on spending the money that you got from the
    Stimulus Bill last year?
        Ms. Zoi. The--we are in a really good spot now. We are
    ramping up. Some of the shovel-ready projects took a little
    longer to get the shovels in the ground based in part because
    of the design of the program and the design of the statute.
    Just to take a few that are under my portfolio, the
    Weatherization Assistance Program now.
        Mr. Markey. Ms. Zoi, can I just, yes, thank you.
        Ms. Zoi. How about that?
        Mr. Markey. Good.
        Ms. Zoi. The Weatherization Assistance Program now is at
    nearly at its full ramp rate of about 20 to 25,000 homes a
    month. The State Energy Program, that is a $3.2 billion program
    where the money was obligated to the States at the end of
    September, the structure of the and a third, fully a third of
    the money, $1 billion is out in awards.
        Mr. Burgess. Yes, let me, I hate to interrupt but obviously
    my time is limited. The chairman is very strict with me.
        Mr. Markey. Not today, whatever you want. We will just be
    open-minded.
        Mr. Burgess. But $823 million has been spent as of March 4
    figures that were available of the appropriated $25 billion and
    we have got a bill in front of us that has essentially a blank
    check written in the back and we appropriate such sums as are
    necessary. Why would you need any additional money at all when
    you have $25 billion waiting to be used?
        Ms. Zoi. We have.
        Mr. Burgess. Why not use that money first before coming and
    asking as they were described yesterday, the feckless
    appropriators, for an additional $6 billion.
        Ms. Zoi. The program, the programs have obligated I think
    $25 billion of the $36 billion that came to the Department of
    Energy so that is all either under contract out at the State
    level workers have been hired. The figures that show up as
    spent don't show up as spent in the Federal system until the
    Federal Government gets invoiced by the grantee and in many
    cases it is a State or it is a private, it is a university or
    it is a private company so the actual costing figures which is
    in everyday parlance it is money spent, that lags in terms of
    actually the work being done. There are so we do not have
    available to use whatever number of billions of dollars because
    the vast majority of that has already been obligated to good
    projects that are out in the field creating jobs right now.
        Mr. Burgess. The Stimulus Bill was passed in February with
    a great deal of rapidity without time to read the bill because
    it was so important to get the money out there but now here we
    are 13 months later and only a small portion of the monies that
    you had available has actually been delivered to projects that
    are putting people back to work. How do we have confidence that
    providing additional money to your Department is going to be
    utilized any more efficiently then the large amount of money
    that you already received?
        Ms. Zoi. Well again, first of all, there are thousands of
    jobs that have been created and that money is already being put
    to work so for the State Energy Program for example, $1 billion
    is already under contract at the State level creating jobs.
    Now, those States have not invoiced the Federal Government so
    it is not showing up as spent but the work is getting done.
    Private sector people and State people have been hired to get
    that work done. Secondly, the structure of this program is
    going to move even more quickly I would guess depending on what
    the market demanded then Cash for Clunkers did and Cash for
    Clunkers.
        Mr. Burgess. Oh, please don't mention Cash for Clunkers in
    this committee.
        Ms. Zoi. All right but to your point is there a spending
    bottleneck.
        Mr. Burgess. That is not a good metric.
        Ms. Zoi. The structure of the program.
        Mr. Burgess. Listen, none of us are against energy
    efficiency but this should be driven by the market. I know of
    two electric companies back in my district, one which is
    providing a credit to homeowners if they want to put solar
    equipment on their homes. Another which is really a forward-
    leaning project will allow homeowners to rent the equipment.
    The electricity company is providing the capital and the
    homeowner rents the equipment and sells the electricity back
    because we do have net metering in Texas. Those are great
    programs. This is something that should sell itself. We
    shouldn't have to go in debt billions of more dollars to
    foreign countries in order for these programs to happen because
    they are a good idea. People want to do this and when they find
    out the amount of money, I have no quarrel with people putting
    solar panels on their roof. I think in Texas it makes a lot of
    sense. We primarily use a lot of electricity during the
    summertime. We need our air conditioners. I am all for putting
    lots of solar panels on lots of roofs and let us not build
    another coal fire plant. I think that is a good idea but it
    sells itself. Why are we--is it necessary to pump money into
    what seems to be a fairly inefficient, bureaucratic pipeline
    that takes 13 months to get deliverables out to the other side?
    It seems like the marketplace could move much more rapidly on
    this. That is just an observation. One other thing in the
    newspapers in Texas, the business section of the Dallas Morning
    News a few weeks ago detailed this large wind farm that was
    going to go into west Texas with Stimulus money and they were
    buying Chinese windmills. Now, what is up with that? We have
    got a windmill blade manufacturer in Gainesville, Texas. Why
    didn't we buy American blades for that?
        Ms. Zoi. Well, we haven't seen that, the proposal for that
    project. The 1603 Program I think to which you are referring
    again has created already 10,000 construction jobs, 2,000
    ongoing jobs.
        Mr. Burgess. In China.
        Ms. Zoi. No, no, in the United States. Those jobs are in
    the United States. The wind and I agree with you, the wind
    blade manufacturing capability has grown significantly. A few
    years ago the wind industry, the domestic contract in the wind
    industry was probably about 25 to 35 percent. It is now because
    of all the work that is being done it is now over 53 percent
    and with the 48C Program that we talked about a little earlier
    in this hearing, we are investing in the ability to manufacture
    gear boxes. At the moment, wind gear boxes are not manufactured
    in the United States because we haven't had policies to support
    it but all of that is coming. We are on a trend line here to
    rebuild and catalyze the renewable energy industry that is
    incredibly important for creating jobs across this country.
        Mr. Burgess. I know in the interest of time, let us get you
    that article. It was in the business section of the Dallas
    Morning News last month and I would like to if you don't mind
    submit that to you and see if we can get your comments about
    what was contained within that article.
        Thank you, Mr. Chairman, for your indulgence. I will yield
    back.
        Mr. Markey. We thank the gentleman very much and the Dallas
    Morning News is actually going to host about 25,000 people at
    the Wind Convention in a couple more months.
        Mr. Burgess. There is a lot of money in that.
        Mr. Markey. Well there is and they are turning it into
    money so let me turn now and recognize the gentleman from
    California, Mr. McNerney.
        Mr. McNerney. Thank you, Mr. Chairman.
        I would like to just address the issue that the gentleman
    from Texas raised. I spent my career developing wind energy
    technology only to see that technology go overseas because
    there wasn't sufficient support in this country so the jobs
    that we should have been creating are being created in China.
    They are being created in Germany because they are putting
    windmills in that country like crazy and we need to change that
    and create those jobs here.
        Back to the question at hand, my district has sections that
    are very hard hit by the economy and what I would like to see
    is some mechanism in this legislation or this program that
    would help implement this sort of process in hard hit areas. My
    concern is that people that are marginal economically aren't
    going to be interested in investing $1,500 without some sort of
    incentive that makes it possible, additional training, for
    example, or other methods to get those homes that probably need
    it more than any other homes to be insulated and become more
    efficient. Do you have any suggestions or ideas that would be
    beneficial in that light? I will let the Secretary.
        Ms. Zoi. We will quickly. One of the terrific things about
    the bill is that there is a provision for financing, local
    financing and there are a variety of ways to provide finance to
    make it possible for folks who do not have that money in their
    bank account to be able to take advantage of this and the whole
    theory is that you borrow a little bit of money but the savings
    on you energy bills will allow that to be paid back. So again I
    would commend that provision of the bill in particular.
        Mr. McNerney. OK, Mr. Pratt.
        Mr. Pratt. The training program that HBI has come up with
    has trained disadvantaged people definitely in the
    Weatherization Program. I have instructed hundreds of people on
    the installation of weatherization. Most of those people are
    disadvantaged in some variety to the point where people ask me
    if they can return the bottles to get the bus ride so they can
    come back the next day. It is very imperative that this program
    not necessarily just be a certification program where you
    certify contractors that you are actually specing the
    weatherization training that is going on instead just the
    specific certification that someone gets from it.
        Mr. McNerney. Well, that is a good point. A concern I have
    is that if there is a program that gets ramped up too quickly
    there won't be enough people out there to know how to do what
    they need to do. Walking into a house and making an assessment
    of what needs to happen to make the house more efficient, it is
    not rocket science necessarily but it needs training and it
    needs certification. Are we going to be able to ramp up enough
    people to meet those needs if this program moves forward?
        Mr. Pratt. This program in front of you, this program here,
    not necessarily the HomeStar Program in itself but this program
    right here specs the level of training that is designed for the
    sixth, seventh, eighth-grader level of knowledge to be able to
    confer and install the products. That is what it was designed
    for as workforce training, not just a certification program.
        Mr. McNerney. Sure.
        Mr. Laseter. And I am sorry, the certification programs
    that are currently in the bill, they also have training outlets
    and back where the President announced some of the details that
    Savannah Technical Community College, there are training
    outlets like that everywhere where these kind of rigorous
    training people will receive that gives them the skills they
    need to actually get their certification so the additional
    certifications can happen quickly.
        Mr. McNerney. OK.
        Mr. Engler. The only thing I would add to that is that, you
    know, as governor for 12 years I worked in a lot of hard hit
    areas. I currently also serve on the N.E. Casey Foundation
    Board so we work with communities that are hard hit. When we
    start reducing the unemployment rate, you should start with the
    people who were most recently were detached from the workforce
    and you work your way down. Those that are hardest hit who
    haven't worked in 10 years will be the last to be hired and
    they are the ones that need the very low minimum wage or the
    differential wage to be hired to get some connection. That was
    the way it worked for Welfare Reform and sometimes we try to do
    policy to get the hardest possible person to work first and
    that is just expensive and wasteful and it will fail. In this
    case, we have got millions of Americans who had jobs who aren't
    working. They can go right back to work. They are the ones you
    train first and as we get the economy moving, there are more
    resources left to try to deal with the chronic situations that
    you have just described and as far as investing, the other
    policy decision that is in this bill which I think the
    committee has made I hope is that energy savings are energy
    savings and when we reduce kilowatt consumption, wherever we
    save that kilowatt, MacKenzie's argument was get the most cost-
    effective savings first. Harvest, said Secretary Chu, has said
    the fruit on the ground or the low-hanging fruit first before
    we get on the tall ladder and try to reach the top of the tree
    and I think this is saying let us get it where we can find it
    and so I worry, you know, and I realize I don't have to get
    elected anymore but I worry less about where we get it then how
    much we can get in terms of kilowatt savings.
        Mr. McNerney. OK, thank you.
        Mr. Chairman, I yield back.
        Mr. Markey. Great, the gentleman's time has expired.
        The chair recognizes the gentleman from Florida, Mr.
    Stearns.
        Mr. Stearns. Thank you, Mr. Chairman, and I would like
    first to ask unanimous consent to have a statement by the
    National Association of Realtors inserted in the record
    outlining their position on this legislation. Mr. Chairman, a
    unanimous consent.
        Mr. Markey. Without objection.
        [The information appears at the conclusion of the hearing.]
        Mr. Stearns. All right, thanks and I think you have a copy
    and you have seen it before.
        Ms. Zoi, a question always comes up. Sometimes a bill
    passes and there becomes technical language that changes
    everything. Can you say today categorically that there will be
    no labeling requirement that would be part of this bill if it
    passed? Do you feel comfortable saying that there would be no
    labeling?
        Ms. Zoi. Can you tease that out for me, please?
        Mr. Stearns. Yes, I think the problem would be is like in
    the cap and trade there was a portion of the bill that actually
    put a label on the house to say that it was not complying with
    energy efficient requirements. It had different things and it
    was given in a rating and so this label created in the minds of
    the homeowner that one, his home was worth less and in the
    person who was buying it, it was discounted so you get this
    sort of a stigma attached to a house or a property. So we are
    concerned that if this bill passes that there would be some
    kind of understanding by you and your people in the
    Administration that you would put a label on a house. So I am
    hoping that you will say today that there will be no labeling
    requirement.
        Ms. Zoi. I don't think that the nature of this bill is
    about that.
        Mr. Stearns. So your answer is?
        Ms. Zoi. It is a voluntary program where people go and take
    advantage of energy efficient technology as they get installed
    in their home.
        Mr. Stearns. OK, so your answer is no, for the record. OK,
    the other thing I have a question for you in the bill the White
    House indicates that the number of homes improved under the
    HomeStar Program could be three million. I just flipped through
    here in the notebook they gave me and it appears that when you
    went to weatherize a home that in 1 year they got a maximum
    across all 50 States was 125,000 is all. How did you come up
    with--what is the source of that estimate that you will get
    three million when the facts just for weatherization was only
    125,000?
        Ms. Zoi. Yes, I think that this is a different sort of
    program so the calculations are done based on projecting what
    would be the average rebate that a consumer would take
    advantage of? How big is the pot of money available for Silver
    Star rebates and Gold Star rebates? How big do we, what is the
    average rebate amount and that is the number of transactions
    that we have got so if indeed again the Senate version has
    nominated, you know, $3 billion or so for the Silver Star
    Program, you figure each house will take advantage of, you
    know, one measure or 1.2 measures like 1.2 children, then you
    just do that math. So you are able to reach that many more
    homes then the Weatherization Assistance Project which is what
    I think you are referring to where they go and do kind of a
    whole home retrofit for low-income folks up to the tune of
    anywhere between $4,500 and $6,500 per home. The average
    investment per home and with this is likely to be lower
    therefore, more homes will get done.
        Mr. Stearns. My colleague, Mr. Shimkus, had mentioned how
    are we going to pay for this. The President has talked about
    freezing a very small portion of the discretionary spending.
    Perhaps, an across the board spending freeze would help pay for
    this or even some kind of freezing with Government employees.
    We have seen a lot of articles recently about everybody is
    taking a sacrifice but not necessarily Government employees and
    so that is possibly one way to help pay for this. The other
    thing I am concerned about is that the way you have it in this
    Rebate Program it might be more effective and shall we say less
    bureaucratic that you wouldn't have to use all these formulas
    if you had a tax credit and I think this had been brought up
    before, are you receptive to a tax credit rather than a rebate?
        Ms. Zoi. Well, there is an existing.
        Mr. Stearns. Just yes or no.
        Ms. Zoi. There is an existing tax credit and we have an
    opportunity now to harmonize job creation immediately with
    energy savings for families so I think this program will have
    an immediate catalyzation of a big part of the sector.
        Mr. Stearns. Let me read this other question, it is a
    little long. The bill doesn't allow taxpayers to receive both
    an energy efficient, that is Section 25C, tax credit and a
    rebate. How will you know whether a Section 25C tax credit has
    been applied for regarding a HomeStar product? Is the
    Department of Energy going to check the IRS records? Is the IRS
    going to check the DOE records? Are we just going to assume
    that no one would be so nefarious or simply confused as to
    claim a credit for an item for which a rebate was received?
        Ms. Zoi. I think we would never assume Americans would be
    nefarious.
        Mr. Stearns. That is a safe answer.
        Ms. Zoi. But no, what happens is this is an instantaneous
    point-of-sale rebate. Those records would then be provided to
    the IRS plus it would be tax fraud if taxpayers tried to apply
    for both so we would have the records and then the IRS, we
    would provide our records to the IRS.
        Mr. Stearns. Mr. Chairman, thank you for your questions. I
    assume as we go around that you as the chairman will probably
    find a way to pay for this so that we don't add to the deficit
    so I would be curious--perhaps you might enlighten us how we
    are going to pay for this.
        Mr. Markey. Well, in your own personal instance it will
    probably be your winnings from the NCAA pool that you just
    filled out. OK, I think that you will be able to make perhaps
    $300 up.
        Mr. Stearns. It won't be that much.
        Mr. Markey. The gentleman's time has expired.
        I would like to submit for the record testimony from Steve
    Nadell from the Americans for Energy Efficient Economy that
    outlines the technical specifications in HomeStar as well as
    the job numbers. Without objection, so included.
        [The information was unavailable at the time of printing.]
        Mr. Markey. The chair recognizes the gentleman from
    Washington State, Mr. Inslee.
        Mr. Inslee. Thank you. Thanks for the Coalition's work on
    that. This is just has got such fantastic upside for us both
    short term and long term. We really appreciate all of your
    efforts. Congratulations, Governor Engler. The first lithium
    ion manufacturing plant in America is going to go into
    Michigan, in Holland, Michigan because of the Stimulus Bill. We
    are going to have to give you some credit for that somewhere
    along the line, and thanks to Mr. Welch for his leadership on
    this issue.
        I want to ask a couple of questions about those who might
    be skeptical a little bit about this proposal. I am really not
    but I would like you to address some concerns that have been
    raised. The first one about having the division between silver
    and gold in general, silver being a compensation system for
    specific entities, and gold being more performance-based. So I
    guess my first question I have is why shouldn't--what will we
    say to those who think everything should be performance-based
    and we shouldn't have a dollar of taxpayer money invested until
    we have a specific performance of X percentage for every single
    house?
        Mr. Thaman. I would be happy to address that. In my
    testimony I referenced the MacKenzie Study and I think others
    on this panel did also which looked at carbon emissions and
    also energy efficiency and rated insulation which is the
    product we manufacture as the most energy efficient. One of the
    things you need to understand in rankings like that is cost of
    inspections and cost of audits are not factored into that
    analysis so the assumption, which I think is a good assumption,
    given our contractor base and the people we work with is that
    good, honest, hardworking people are going to install products
    correctly and that products installed correctly for their
    intended use save energy, and we know that that is the case
    with the insulation products that we manufacture. If we get too
    prescriptive in terms of specifying inspections and audits as a
    part of trying to make the economics of this program work, you
    actually destroy the economics of the products that save energy
    because of the additional cost so I think this bill sought to
    find a balance between Silver Star-type products which are
    known to save energy for sure, and then Gold Star-type projects
    where an inspector can come in and come out with a whole house
    approach to improving the energy efficiency of the home.
        Mr. Laseter. And if I may add on the Gold Star side as
    being a home performance contractor ourselves, these are proven
    technologies, proven models. We install many of these same
    proven measures. In fact, at our company we are so certain that
    we actually provide a whole home energy savings limited
    guarantee for the homeowner where we guarantee the first year
    energy savings so one of the beauties in the balance is proven
    technologies immediately in the marketplace.
        Mr. Inslee. So I just did my observation. These are proven
    technologies. We have good data about them about their
    effectiveness however we have to realize there will be some
    Americans who don't install them perfectly. They won't always
    work perfectly when they are installed but my belief is the
    cost of trying to assess perfection is going to be greater than
    the loss of imperfection of those who don't, who have two
    thumbs and don't do the installation exactly perfectly. That is
    my sort of feeling about this and that is why I think this is
    actually a pretty good balance that you have struck.
        Second question, the National Association of Homebuilders
    had asked to recognize the Homebuilders Institute as the
    certifying or a certifying, I am not sure which, entity for
    certifying workforces. That entity was not included. Is there a
    reason for that and what should we be thinking about the
    certifying agencies?
        Ms. Zoi. I can say from the Department of Energy's
    perspective we are quite interested and excited to have all
    qualified certifications be part of this thing and we have
    suggested that the Secretary has the latitude to add more as
    more rating schemes and qualifications schemes become available
    but we are quite open to the HBI being part of this.
        Mr. Inslee. Thank you, I appreciate that.
        Just one comment, I was reading Dr. Chu's testimony in some
    blog somewhere last night about efficiency. I said this before
    but I want to reiterate this, I hope you will unleash him in
    the coming weeks particularly while the U.S. Senate is
    considering energy legislation to really share what he knows
    about this field particularly with the other chamber because it
    is incredibly powerful and I hope that you will allow him to
    live in the U.S. Senate in the next several weeks. We need a
    101st senator and it should be one who knows the physics and,
    you know, could be a second Nobel Prize out there so I hope he
    is there. Thanks very much.
        Mr. Markey. The gentleman's time has expired.
        Well, we thank all of you for being here and here is what
    we are going to do. We are going to give each one of you your 1
    minute. Give us your best shot here in 1 minute. What is it
    that you want this committee to do? A lot of people think that,
    you know, energy conservation is like watching grass grow. How
    can that be exciting, you know? How can that be interesting?
    How can that be good for our country? How can that be the smart
    way of going and so we will give each one of you a minute to
    kind of summarize it why the members of this committee, if they
    were all sitting here, would know why this is such an exciting
    subject and why they should, you know, invest the time to
    understand it and to explain it to the American people. So we
    will begin with you, Mr. Pratt, and we will go in reverse order
    of the opening statements so that we can have each of you make
    your case to the American people.
        Mr. Pratt. Well, as an experienced trainer, as someone who
    has trained workforce in this venue, I feel as though that
    opening up the marketplace to having multiple training
    organizations inside this program allowing disadvantaged people
    to go through and get training, I do believe that the existing
    construction network although it has a lot of training still
    needs to be reinforced with a lot of training. My encouragement
    is that we don't necessarily tie this program to a
    certification program, that we have multiple certification
    programs which are already existing out there and incorporate
    into the program.
        Mr. Markey. All right, can you up the excitement level, Mr.
    Thaman, in your concluding 1 minute?
        Mr. Thaman. I will do my best, Chairman Markey. You know,
    we would say as we have all said that employment is very far
    down in the construction industry. We do not believe the
    economy is out of the woods and we do think that it is
    important that this group take action to try to stimulate the
    economy and create additional jobs in our sector. People are
    trained. They are ready to come back onto the job. We are ready
    to employ them if there were demand. Creating demand for energy
    efficiency products is a great idea. It gets a hard hit part of
    the economy back to work. It creates energy savings and money
    in the pocket of consumers. It reduces energy dependence. It
    reduces energy imports. It increases energy security and it is
    one of the few energy policy moves that we have that is
    actually capital creating as opposed to capital destroying
    because it actually creates savings and creates consumption. We
    think a simple, meaningful and direct incentive to homeowners
    to improve the energy efficiency of their home is good policy
    and we support it.
        Mr. Markey. Great, thank you, Mr. Thaman.
        Governor Engler.
        Mr. Engler. Well, just following on Mr. Thaman's beautiful
    remarks, it is a win for jobs. It is a win for energy
    efficiency. It is a win for the overall American economy and
    then it ought to be followed up the work on this HomeStar
    legislation with picking up the pace on initiatives the
    President has talked about that all can support. We need to get
    these transmission lines built in this country and rebuilt.
    That is free energy. It is being generated but lost in
    transmission. That is a simple revenue bond. We don't need
    Government help to do that. We just need to clean up the
    process and put the EPA in the closet so we don't need NEPA on
    existing rights-of-ways. There are already power lines. Let us
    build the new ones. Let us get that done. Let us get the
    nuclear power industry going. To Mr. Burgess' point earlier,
    the supplier base was largely driven out because we weren't
    doing anything in a lot of these areas and we better start
    building nuclear power plants, we will get that base back here
    so the whole host of these kinds of things that in the energy
    space, all of which put Americans to work and reduce the
    emissions and reduce the energy intensity of the country.
        Mr. Markey. Thank you, Governor Engler, very much.
        Mr. Laseter.
        Mr. Laseter. Yes, sir, Chairman Markey, I will start with
    two words, granite countertops, OK, that is exciting. People
    when they can in this economy when they can often get the money
    to do a home improvement.
        Mr. Markey. If they were remaking the movie, ``The
    Graduate'' today, they wouldn't be saying plastic. They would
    be saying granite countertops.
        Mr. Laseter. When people have the money to do home
    improvement they start thinking granite countertops. This
    program will put energy efficiency on sale for every American
    household so instead of thinking granite countertops, they will
    think energy efficiency and that is the reason this program
    will work.
        Mr. Markey. Great, thank you, Mr. Laseter.
        Ms. Zoi. I like that.
        Mr. Markey. Can you move in that microphone just a little
    bit closer?
        Ms. Zoi. I think we have a moment to create speed and scale
    in the efficiency sector. I don't know whether who has been at
    this longer, Chairman Markey or me but we have been trying to
    make energy efficiency sexy for a long time. The truth is
    though last year only 40,000 non-low-income retrofits were done
    in this country and it sounds like one of them was done in Mr.
    Burgess' house. What we need to do is create speed and scale,
    leverage the private sector. We have an alignment here that is
    unprecedented with private sector players, Government players,
    Federal players, State players to stand this up so that we can
    get out of this and having building tune-ups becomes normal
    business for Americans going forward.
        Mr. Markey. Thank you, Secretary Zoi, as well.
        Oh sure, the gentleman from Texas.
        Mr. Burgess. My home was not a retrofit. It was new
    construction. It was all paid for with duly earned, after-tax
    dollars. No Federal program was involved.
        Mr. Markey. You know what? You were right but too soon for
    this program, OK if you had just waited 40 years.
        Mr. Burgess. Well, Mr. Chairman.
        Mr. Markey. You too could have.
        Mr. Engler. Here is the problem though, Congressman, in
    your district you will have to pay for a new power plant if
    everybody else doesn't get their homes cleaned up because the
    energy will run out some day and I want to avoid that. That is
    cost avoidance.
        Mr. Burgess. And, Mr. Chairman, with your indulgence, let
    me have a try at the 1 minute let us make efficiency appealing.
    Where else could you get Ed Markey, Mike Burgess and Roscoe
    Bartlett on the same page? Energy efficiency is the common
    ground whether you are worried about global warming, national
    security or peak oil. This is where all of those come together
    and no one on this committee, regardless of which side of the
    dais they sit on can really make a coherent argument in favor
    of wasting energy.
        Mr. Markey. I hope it would actually be we would agree that
    we don't want Notre Dame to win the NCAA Tournament, OK. There
    Texas and Boston College is going to agree on that, OK.
        Mr. Burgess. The University of North Texas actually is in.
        Mr. Markey. University of North Texas.
        Mr. Burgess. And they play in just an hour's time so go
    Mean Green.
        Mr. Markey. All right, well, you know, I might change mine.
    I have been filling out my NCAA Tournament bracket up here. I
    might go to North Texas and pick that now.
        So here we are. We have this great opportunity to as we
    know, to instead of generating more megawatts to have
    negawatts. To have the watts never have to be manufactured,
    constructed, built in the first place and as Governor Engler
    said, that saves everybody money. It costs a lot of money to
    build one of these power plants and your bills are lower. There
    are jobs created and helping people save the money, and we back
    out energy that we otherwise would have imported, home heating
    oil or have in the construction of power plants across the
    country.
        So it is win-win-win as Mr. Laseter said. It is working
    smarter, not harder. My mother always used to say that to me.
    Eddie, work smarter, not harder, she would always say it after
    she said she was going to donate my brain to Harvard Medical
    School as a completely unused human organ, OK. So I think this
    is the kind of program she was talking about, working smarter,
    not harder. When I was the chairman of the energy subcommittee
    here back in 1985 and '86 and I authored the Appliance
    Efficiency Act for refrigerators, stoves, you name it all the
    way down the line, well, there are scores of power plants that
    never had to be built because refrigerators are now twice as
    efficient as they were because of that law back in 1986. So you
    just think of every home with a refrigerator twice as efficient
    or stove or you go all the way down the line.
        So that is how we are thinking here. We are thinking, you
    know, there has to be a way in which we not just incentivize
    the importation of more oil from OPEC which is half of our
    trade deficit, by the way. Half of our trade deficit is
    importing oil. Now, that can't be a good idea given where a lot
    of those revenues then get spent against the interest of our
    country, it affects our economy. Here we have a homegrown
    industry. We have companies. We have contractors who are ready
    to go with materials made in America, with contractors who live
    here in America and with homeowners here in America who will be
    the beneficiaries. So that is about the best picture you can
    put on this. It is not made by OPEC and it is not made in
    China, made in the USA for people in the USA, installed by
    people in the USA and sold by people in the USA.
        So it seems to me that of all the tax programs that we have
    got on the books, this is one that will work magic on our
    economy and the more that we can spread this ethic, this idea
    of working smarter, not harder in terms of how we generate
    electricity in our country is the better off we are going to
    be, and a perfect example again is this wind program. Last
    year, 10,000 new megawatts of wind installed in the United
    States so if you think of a nuclear power plant as 1,000
    megawatts, 10,000 new megawatts installed in our country last
    year and half, 500 new megawatts of solar installed in the
    United States last year. That would be like half a nuclear
    power plant. Well, these are big numbers. As Secretary Zoi
    pointed out, that is 10,000 new jobs here in the United States
    and the good news is that as she pointed out is that just 3
    years ago, 4 years ago, 25 percent of the jobs in the wind
    sector were in the United States, 75 percent overseas. Because
    of the Stimulus Program, we now have it up to 53 percent of the
    jobs and the industry and testimony last week said that their
    goal by the end of the Stimulus Program is over 70 to 75
    percent of the wind jobs will be totally generated here in the
    United States.
        OK, so just changing the way in which we view how we
    produce energy or don't produce energy by installing
    insulation, by installing smarter, new devices that are made
    here in the United States, sold here in the United States,
    installed here in the United States. That is the way we have to
    view this and then we dramatically reduce the greenhouse gases
    by doing it all here in our country. We create new jobs and we
    save on the imported energy that we have to bring into our
    country.
        So it is win-win-win, win-win-win, win-win-win. This is
    something that should generate incredible enthusiasm from our
    members, you know. The reporting table should over here be
    excited at this smart new plan that is being put in place and
    so our job is going to be to get out there to sell this to lift
    it up along with these other energy technologies that are
    coming along here. Made in America as the governor said, you
    know, that should be our single most important objective this
    year to begin to put in place a program that will sustain us in
    the long run.
        So what we would like to do, Mr. Welch, Mr. Waxman and I is
    work with the Minority, work with all parties that are
    concerned about this issue so that we can put it on a fast
    track and we put it in place in a way that will give the
    benefits to people out there and give hope that new jobs will
    be created. And as you said, governor, not in 60 days, not in
    90 days, you know, but as soon as possible. Fast track this
    process. Put that gold star up there and again, I think we
    should try to put a gold star. You know, we label children with
    a gold star. We say here are the students who are doing the
    best work, you know. We label things in America. We have honor
    rolls that we want to have put in the newspaper, you know. We
    don't want to stigmatize people who aren't on the honor roll
    but we want to honor the people on the honor roll don't we?
    Don't we want to let people know who is doing the best work?
    Don't we want to let people know who are the gold star students
    and the silver star students? It begins in the first grade.
        I think Americans are ready for this. Maybe we have too
    many trophies. Maybe it is Lake Woebegone, you know, everyone
    is above average but everyone is not above average. We need
    measurements. We need to have America be number one looking
    over its shoulder at number two and three in the world in this
    sector, OK because we will then be manufacturing the jobs. We
    will then be producing the work opportunities in the years
    ahead for all those workers in our country.
        We thank you all. We want to work closely with you in the
    next couple of weeks so that we produce the best possible bill.
    So stay close to the subcommittee. We need you to call us, talk
    to us, you know, visit us and let us know how we can frame this
    because we have some ideas how to change it. I know you might
    too and I think if we all work together, we will be able to
    produce the best possible bill. Thank you. With that, this
    hearing is adjourned. Thank you.
        [Whereupon, at 12:26 p.m., the Subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]

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