[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
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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
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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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