[Federal Register Volume 65, Number 237 (Friday, December 8, 2000)]
[Rules and Regulations]
[Pages 77210-77219]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31158]
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Part V
Department of Energy
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Office of Energy Efficiency and Renewable Energy
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10 CFR Part 440
Weatherization Assistance Program for Low-Income Persons; Final Rule
Federal Register / Vol. 65, No. 237 / Friday, December 8, 2000 /
Rules and Regulations
[[Page 77210]]
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DEPARTMENT OF ENERGY
Office of Energy Efficiency and Renewable Energy
10 CFR Part 440
(RIN 1904-AB05)
Weatherization Assistance Program for Low-Income Persons
AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
Energy.
ACTION: Interim final rule.
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SUMMARY: The Department of Energy is issuing an interim final rule to
amend the regulations for the Weatherization Assistance Program for
Low-Income Persons to incorporate the regulatory changes proposed in
the notice of proposed rulemaking published in the Federal Register on
January 26, 2000. The preamble of this interim final rule also
discusses the new legislative amendments that Congress recently enacted
which were not a part of the proposed rulemaking. These statutory
amendments, as well as other clarifying language from previous
rulemakings will be incorporated into the program regulations in a
final rule to be issued by the Department early next year. This interim
final rule adds clarifying language, deletes obsolete language, and
improves the overall operation of the Program to assist State and local
agencies in administering the Program.
DATES: Effective January 8, 2001. Written comments are due January 8,
2001.
ADDRESSES: Send written comments (three copies) to Greg Reamy,
Weatherization Assistance Program Division, U.S. Department of Energy,
Mail Stop EE-42, 5E-066, 1000 Independence Avenue, SW., Washington, DC
20585. Copies of any comments received will be available for inspection
between the hours of 9:00 am and 4:00 pm, Monday through Friday, except
Federal holidays at the following address: DOE Freedom of Information
Reading Room, Department of Energy, Room 1E-190, Forrestal Building,
1000 Independence Avenue, SW., Washington, DC 20585 (202) 586-3142.
FOR FURTHER INFORMATION CONTACT: Greg Reamy, Weatherization Assistance
Program Division, U.S. Department of Energy, Mail Stop EE-44, 5E-066,
1000 Independence Avenue, SW., Washington, DC 20585, (202) 586-4074.
SUPPLEMENTARY INFORMATION:
I. Introduction
II. Amendments to the Weatherization Assistance Program
III. Opportunities for Public Comment
IV. Procedural Requirements
V. Other Federal Agencies
VI. The Catalog of Federal Domestic Assistance
I. Introduction
The Department of Energy (DOE or Department) amends the program
regulations for the Weatherization Assistance Program for Low-Income
Persons (WAP or Program). This Program is authorized by Title III of
the Energy Conservation and Production Act, as amended (Act), 42 U.S.C.
6561 et seq. The changes are necessitated by the evolution of the
Program since the last publication of the rule on June 5, 1995 (60 FR
29470). These changes help States by clarifying sections of the rule,
thereby enhancing the interpretation and application of the program
requirements. Some of the definitions in Sec. 440.3 are clarified and,
where needed, new definitions are added to provide a clearer and more
concise meaning to States and local agencies who must interpret these
regulations. Other sections applying to energy audits and allowable
expenditures are clarified to enhance their meanings; and certain
obsolete items are deleted. Other regulatory changes in today's
rulemaking: add new and eliminate obsolete terms in the Program
definitions; add ``household with a high energy burden'' and ``high
residential energy user'' as new categories for those receiving
priority service; create a separate cost category for health and safety
expenditures; provide flexibility on the purchase of vehicles by local
agencies; reduce the eligibility criteria for certain large multi-
family buildings to 50 percent; establish new minimum energy audit
criteria for the Program; and revise the date for reweatherization from
1985 to 1993.
Prior to developing and issuing this interim final rule, a proposed
rulemaking was issued by DOE on January 26, 2000 (65 FR 4331) after
consulting with its primary stakeholders, representatives of both State
and local agencies, to listen to their concerns about what issues they
wanted DOE to consider. The Program has evolved from a relatively
simple approach of providing service to low-income homes with unskilled
labor, installing low-cost/no cost retrofits, to a program that
conducts advanced diagnostics and installs cost-effective energy
conservation materials. The increased demand to maintain highly-trained
crews has placed added strain on State and local agencies efforts to
sustain a quality level of service to its low-income clients. Many of
the changes lessen the administrative burden and provide flexibility
for State and local agencies to incorporate the ever-changing technical
enhancements as they become available. These changes also make State
and local agencies better-suited to attract non-Federal leveraged
resources into their programs. This interim final rule attempts to
address as many of those concerns as possible. Many of the concerns
that the stakeholders raised to DOE were not of a regulatory nature and
were addressed administratively through program guidance documents.
Other concerns were statutory in nature and formed the basis of the
legislative initiative proposed to the Congress. The Department
proposed on September 20, 1999 several statutory changes developed
during discussions with State and local stakeholders. These proposed
statutory changes were enacted on November 9, 2000, as part of the
Energy Policy and Conservation Act Amendments of 2000. These statutory
changes: (1) Eliminate the requirement in Sec. 440.18 that 40 percent
of the funds used to weatherize a home be spent for materials; (2)
restructure the method in Sec. 440.18 by which States compute their
average cost per home by increasing the average cost per home to $2,500
beginning in 2000; and (3) eliminate the separate per dwelling unit
average in Sec. 440.18 for capital intensive improvements and include
capital intensive costs as a part of the average costs. The Department
will issue a final rule that will incorporate these changes into the
program regulations early next year.
DOE plans to include in the preamble of the final rule clarifying
language on several areas of the program regulations where no actual
changes were made. This action will provide States and local agencies
the benefit of explanatory language used in the preambles of previous
rulemakings which are still applicable today. This is necessary since
many State and local staffs have changed several times over the years
and much institutional knowledge has been lost. A comprehensive final
rule will provide Federal, State, and local agency staff a central
document for program regulatory information. This will also help in
providing uniform interpretation of the regulations at all levels of
the Program.
II. Amendments to the Weatherization Assistance Program
Section 440.1 Purpose and Scope
DOE deletes the first sentence in the Scope and Purpose since this
information is duplicative of what is
[[Page 77211]]
stated elsewhere in the rule. DOE amends the Purpose and Scope to add
to the priority categories the terms ``high residential energy user''
and ``household with a high energy burden.'' By adding these two
categories, States are better able to prioritize their low-income
clients by targeting those experiencing high energy costs and burden,
thereby addressing those units with the greatest potential for energy
savings. Additionally, by including these two categories, State and
local agencies are better able to coordinate services with other
Federal programs and leveraging opportunities. The current priority
categories of the elderly, persons with disabilities, and families with
children remain unchanged. Definitions for these two terms are
discussed in Sec. 440.3.
Section 440.3 Definitions
DOE proposed in the notice of proposed rulemaking (NOPR) to include
rule language in Sec. 440.21(h)(1) to encourage States to set the
temperature(s) used to calculate heating and cooling degree data to
more reasonably reflect their housing stock and climate, thereby
reducing the overestimation of energy savings for most measures. By
using, and defining in Sec. 440.3, the term ``balance point
temperature,'' which is also used to describe the outside temperatures
which require operation of heating or cooling equipment to maintain
comfort, the proposed change was interpreted by some comments to be
more substantial than DOE intended. To clarify the change described in
Sec. 440.21(e)(1) of the interim final rule, DOE is substituting a new
term and definition for ``base temperature'' that replaces the
definition of ``balance point temperature'' given in the NOPR.
DOE adds a definition for ``electric base-load measures'' to
describe energy use outside of the traditional weatherization approach
to heating and cooling and building envelope measures. As the Program
evolves over the next several years into a whole house approach, DOE
believes that electric base-load measures, which account for more than
half the energy used in a typical household, are important when
considering total residential energy use. Limited lighting measures are
currently permitted in the Program and in the near future DOE may
consider including other electric base-load measures such as the
replacement of certain appliances. Most of the comments supported this
change.
DOE adds the term ``high residential energy user'' which means a
low-income household whose residential energy expenditures exceed the
median level of residential expenditures for all low-income households
in the State. The definition for this category permits State and local
agencies to better coordinate their activities and resources with many
utility programs. Most of the comments supported this change.
DOE also adds the term ``household with a high energy burden''
which means a low-income household whose residential energy burden
(residential expenditures divided by the annual income of that
household) exceeds the median level of energy burden for all low-income
households in the State. The definition for this category gives States
and local agencies greater flexibility in determining priority service
for those households that may not have traditional priority individuals
such as the elderly, persons with disabilities, or families with
children, but are experiencing a particular hardship due to their high
energy costs.Most of the comments supported this change.
DOE substitutes the term ``persons with disabilities'' for the term
``handicapped'' to reflect the current accepted reference. The
definition remains unchanged.
DOE considered both State and local agency concerns over the
definition of ``low-income'' and the difficulties in effectively
administering, coordinating, and leveraging between various Federal
low-income programs using different definitions. However, in a review
of the Act and the legislative history of the Program, DOE chose not to
amend the existing definition. The comments were generally supportive,
but stated that DOE should consider raising the eligibility criteria to
be more compatible with other Federal programs. The DOE Weatherization
Assistance Program was established to serve the neediest Americans. To
expand the eligibility requirements to facilitate coordination with
other Federal programs either through increasing eligibility to 80
percent of the poverty level, permitting census tracking of
neighborhoods, or allowing area average median income levels would
change the scope and purpose of the Program. More importantly,
expanding the eligibility criteria would substantially increase the
number of households eligible for assistance which already stands at
over 29 million. DOE has addressed this issue in detail in the annual
program grant guidance.
Section 440.14 State Plans
DOE reorganizes and revises Sec. 440.14 to eliminate unnecessary
and duplicative information. The comments stated that some of these
requirements are no longer needed and should be eliminated to reduce
paperwork and time in the production of the annual State plan. In
reorganizing this section, DOE grouped items together relating to the
public hearing. Items specific to the development of the State plan are
also placed together. The information for the production schedule is
now projected annually instead of quarterly and includes the number of
previously weatherized homes expected to be weatherized.
DOE eliminates Sec. 440.14(b)(2), (6), (7), and (b)(8)(iii). The
comments agreed with DOE that this information requirement resulted in
the States providing little more than meaningless estimates to DOE.
States will continue to report to DOE the number of persons served in
each of these groups.
DOE retains the requirement for information on the number of
dwelling units expected to be weatherized for each area, but eliminates
the expected number of previously weatherized units for each area.
States have no idea how many previously weatherized homes can be
expected to be weatherized for each area of the State.
Section 440.14(c)(6)(xi) retains from proposed
Sec. 440.14(b)(6)(xi) the requirement that States identify and describe
the type of audit that meets the criteria outlined in Sec. 440.21 and
that DOE has approved. However, the reference to Project Retro-Tech or
another DOE-approved audit is eliminated in this section as well as in
Sec. 440.21.
Section 440.15 Subgrantees
DOE amends Sec. 440.15(a)(3)(iv) to eliminate the reference to
``JTPA'' and replace it with ``other Federal or State training
programs.'' The JTPA Federal program was repealed effective July 1,
2000 pursuant to Pub. L. 105-220. The comments supported this change.
Section 440.16 Minimum Program Requirements
DOE adds clarifying language to Sec. 440.16(b) to allow States to
include ``high residential energy user'' and ``household with a high
energy burden'' as priority groups among those receiving weatherization
services. The use of the two new priority categories is not mandatory.
Comments received were generally favorable to this change. Most
comments stated that by adding these two categories, DOE has provided
State and local agencies with expanded flexibility to choose the
categories for priority which best serve their respective programs.
DOE amends Sec. 440.16(d) to eliminate the reference to ``JTPA''
and replace it
[[Page 77212]]
with ``other Federal or State training programs.'' The JTPA Federal
program was repealed effective July 1, 2000 pursuant to Pub. L. 105-
220. States should describe any ``other Federal or State training
program'' they will be using in their annual State plans as sources of
labor. The comments supported this change.
Section 440.17 Policy Advisory Council
DOE received numerous comments expressing concern that DOE was
proposing to eliminate the Policy Advisory Council (PAC). Many argued
that the PAC performs very well in the States and provides a unique
insight on many poverty issues, including weatherization. They stated
that a State-body would not offer the same independent oversight and
that the low-income would lose an important voice for the local agency
in managing poverty programs. In proposing this flexibility to the
State, DOE did not mean to imply that the State had the authority to
replace without due cause any PAC. Rather, the State must show cause to
DOE that the existing PAC is either non-existent or is not functioning
as outlined in Sec. 440.17. DOE is aware that in most instances, the
PAC does work as it was intended. DOE also would give preference to any
legitimate PAC that is replaced for cause by a State council or
commission and then later reconstituted. DOE agrees with the comments
that the traditional role played by the PAC should be protected by the
regulations. However, DOE and the States are also concerned that in
some States, the PAC does not function as intended and is, in some
instances, simply non-existent.
Therefore, DOE amends Sec. 440.17(a) to include the language ``or a
State commission or council'' which meets the criteria in Sec. 440.17
and is approved by DOE. Many State agencies which operate the DOE
Weatherization Assistance Program have existing commissions or councils
which review and approve policies and plans for many other Federal
programs. States which opt to utilize an existing commission or council
have to certify to DOE, as a part of the annual application, that the
council or commission is an independent reviewer of activities for the
Program, and that the State will address this issue as a part of the
public hearing held on the State Plan. Therefore, any person(s)
employed in any State Weatherization Program can also be a member of an
existing commission or council but will have to abstain in reviewing
and approving the activities associated with the DOE Weatherization
Assistance Program.
Section 440.18 Allowable Expenditures
DOE deletes from Sec. 440.18(b) and (b)(2)(i) references to
(c)(15), the cost of eliminating health and safety hazards from the
amount of funds used to determine the average cost per home. State and
local agencies indicated to DOE that including the cost of health and
safety into the amount of funds that can be spent on a home severely
restricts their flexibility to operate effectively their programs. In
providing for this flexibility, DOE agrees that excluding these costs
from the average cost per home would afford States and local agencies
the opportunity to fund advanced technology practices into their
weatherization programs while reducing their administrative burden.
In the notice of proposed rulemaking, DOE proposed to create a
separate line item for the cost of purchasing vehicles. DOE solicited
comments on this proposal as well as an alternative approach which
effectively deferred this large cost over both the life of the vehicle
and the number of homes served during that period. DOE has decided to
not create a separate line item because this distorts the actual cost
of weatherization work done on a home. In accepting the alternative
proposal in this interim final rule, DOE retains the cost of purchasing
vehicles as a part of the amount of funds used to determine the average
cost per home currently in Sec. 440.18(c)(6).
For some local agencies, purchasing vehicles under the existing
rule often forced them to seek low cost weatherization candidate homes
in order to maintain their normal operation while ignoring potentially
higher energy savings homes. To address the concerns expressed by State
and local agencies that the cost of these vehicles and certain types of
equipment included in the average cost per home calculation placed an
undue burden on them, DOE amends Sec. 440.18(b) by adding paragraph
(3). This paragraph allows State and local agencies to determine the
average cost per unit by excluding from the average per unit cost
calculations that portion of the purchase cost of vehicles and certain
types of equipment made during that particular funding year. Thus,
States may amortize these costs in their average cost calculations so
that only that fraction of the cost of a new vehicle or equipment
purchase which was actually ``used'' during the current year is
included.
For example, if a local agency purchases a new vehicle for $24,000
with an expected life of the vehicle of 8 years (96 months), then the
cost of that vehicle could be amortized at the rate of $3,000 per year
or $250 per month. This approach also affects certain types of
equipment purchases having a useful life of more than one year and a
cost of $5,000 or more as defined by 10 CFR part 600. It also permits
local agencies to spread these costs out over the useful life of the
vehicle or equipment purchase, even though the full purchase price is
reported in the year in which it occurs. DOE will address the specific
reporting requirements for amortized costs for vehicle and equipment
purchases in program guidance.
The comments generally supported the proposed extension of the date
by which a dwelling unit can be reweatherized. Therefore, DOE amends
Sec. 440.18(e)(2)(iii) by extending the date by which homes can be
reweatherized from 1985 to 1993. Previously, DOE extended this date
from 1975 to 1985 based on the evolution of the Program. Between 1975
and 1979, the Program addressed primarily building envelope measures.
In 1985, the Program expanded to place more emphasis on mechanical
measures, including furnace efficiency modifications. Since the last
rulemaking which introduced new criteria for advanced energy audits,
virtually all States have improved their energy auditing techniques.
DOE acknowledges this overall program improvement by the States and is
confident that by extending the date to 1993, those homes weatherized
between 1985 and 1993 will provide an even greater opportunity to
achieve increased energy efficiency. DOE also reminds States that homes
which become candidates for reweatherization must have a new energy
audit performed and that audit will take into consideration any
previous weatherization improvements done on the home.
Section 440.19 Labor
DOE revises Sec. 440.19 by deleting references to JTPA and
replacing it with ``other Federal or State training programs.'' The
JTPA Federal program was repealed effective July 1, 2000 pursuant to
Pub. L. 105-220.
Section 440.21 Standards and Techniques for Weatherization
DOE proposed in the NOPR to rename, reorganize, and revise this
entire section. The significant changes in response to public comments
incorporated into this interim final rule further revise, reorganize,
and renumber the paragraphs constituting Sec. 440.21.
The proposed name change more accurately reflects the subject
matter of
[[Page 77213]]
Sec. 440.21. The other major changes eliminate the base audit criteria
and make the waiver audit criteria the minimum criteria for an energy
audit used in the Program. In its final rule published on March 4, 1993
(58 FR 12525), DOE provided for a waiver of the 40-percent material
cost requirement described in Sec. 440.18(a) for those States that
adopted advanced energy audit procedures. Today, virtually all of the
States have incorporated an approved waiver audit and received a waiver
of this requirement from DOE. Within the next year, all States will be
using an approved waiver audit.
In the NOPR published on January 26, 2000 (65 FR 4338), DOE
proposed to make the existing waiver energy audit requirements the new
minimum standard for all energy audit procedures. The 40-percent
material cost requirement and the waiver provisions have become
unnecessary and their suggested elimination from the statute is
discussed later in this rule. States and local agencies have made great
strides in improving the energy auditing techniques used in their
programs during this decade. Investments in time and resources have
paid dividends in the form of greater energy efficiency and savings on
the types of materials and the installation techniques used in the
Program.
To implement this change, DOE proposed to delete all references to
Project Retro-Tech audit procedures and the simplified cost-
effectiveness tests used with Project Retro-Tech. DOE proposed that all
energy audits require calculation of a savings-to-investment ratio for
weatherization measures, and assignment of priorities based on the
resulting figures consistent with the life-cycle cost methodology
developed by DOE's Federal Energy Management Program and the National
Institute of Standards and Technology (NIST). While the cost-
effectiveness requirements for the selection of weatherization measures
under the waiver audit criteria were generally not made more stringent,
they were described in more detail since they were to become the
minimum criteria.
Of the 71 total comments that DOE received on the NOPR, 60
contained comments regarding the proposed changes to Sec. 440.21. A
large number of comments (46) expressed the belief that Sec. 440.21 was
overly complicated, detailed, and prescriptive in contrast to the
simplification afforded by the rest of the proposed rule changes. These
comments suggested that much of the text in Sec. 440.21 should be moved
to policy guidance. Further, the comments suggested that the proposed
language locked the program into terminology and technology that time
and research may supersede.
Based on these comments, DOE agrees to simplify Sec. 440.21 by
moving many of the details describing the cost-effectiveness
requirements for measure selection from the regulations to policy
guidance. Only a brief, general description of the cost-effectiveness
requirement remains in the rule text.
In Sec. 440.21(f)(1) of the NOPR, DOE proposed to address the
interaction of measures by including the phrase ``using generally
accepted engineering methods'' to remind States to use reasonable
energy-estimating methods and assumptions to account for the
interaction among weatherization measures. Since no comments were
received, Sec. 440.21(d)(1) of the interim final rule includes this
change.
In Sec. 440.21(d) of the NOPR, DOE proposed to include the
sentence, ``The lifetime of materials must not exceed the remaining
useful life of the dwelling,'' to acknowledge that the low-income
housing stock served by some programs is in poor condition. A
weatherization measure may appear to be cost-effective assuming the
energy cost savings accrue over the entire 20-year economic life of the
material, but may not be cost-effective if the energy savings accrue
over a shorter period of time in light of the remaining useful dwelling
life, for example, ten years.
Three comments pointed out the difficulty in determining accurately
the remaining useful life of a dwelling and the possible adverse
impacts related to this proposed requirement. In response to these
comments as well as to other comments, DOE has agreed to remove from
the rule the language containing this proposed requirement. The
guidance that is eventually issued to detail the cost-effectiveness
requirements will not mandate that the remaining useful life of a
dwelling be used in the life-cycle cost calculations. However, States
will be encouraged in the guidance to consider remaining use dwelling
life when selecting the most appropriate measures in light of the
legislative requirement to measure the rate of return of the total
conservation investment. Determining when the remaining useful life of
a dwelling may impact the cost-effectiveness calculations of
weatherization measures and estimating the remaining useful life of
such dwellings should be left to the discretion of the local agency.
Ten comments questioned the impact of specifying the use of FEMP
life-cycle costing analysis methods to determine measure cost-
effectiveness. The comments expressed concern about what would happen
if FEMP did not establish standards for every material or measure that
may be cost-effective in low-income households. DOE specified the FEMP
annual supplement as a convenient source for the discount rate and, if
used, the fuel cost escalation rates used to calculate savings-to-
investment ratios since the existing rule language did not give States
an easy-to-use information source. The FEMP Handbook and annual
supplement discuss life-cycle costing of any and all energy
conservation investments and do not address material standards.
However, in simplifying Sec. 440.21 and moving many of the cost-
effectiveness details to policy guidance, references to FEMP have been
removed from the rule. Annually, DOE will either distribute the FEMP
annual supplement to each State, or inform the States when the
supplement is published and how it may be obtained.
In Sec. 440.21(h) of the NOPR, DOE proposed changes to the energy
audit requirements that do not pertain to life-cycle costing methods.
DOE proposed in paragraph (h)(1) of the NOPR to substitute the phrase
``climatic data'' for the existing ``number of heating or cooling
degree days'' to acknowledge that other types of weather data besides
heating and cooling degree days can be used in the estimation of fuel
cost savings. Since no comments were received, this change is included
in Sec. 440.21(e)(1) of the interim final rule.
DOE proposed in Sec. 440.21(h)(1) of the NOPR to include rule
language to encourage States to set the balance point temperature(s)
used in conjunction with heating and cooling degree data to more
reasonably reflect the outside temperatures which require operation of
heating or cooling equipment to maintain comfort. Three comments
questioned how balance point temperatures would realistically be
incorporated into the program, and noted that many currently approved
audits did not estimate balance points as NEAT does. The use of the
term ``balance point temperature'' instead of the more appropriate
``base temperature'' made the proposed change appear more substantial
than DOE intended.
Heating degree days are computed by subtracting the average daily
temperature from a base temperature, which has traditionally been
65 deg.F. The traditional heating degree day base temperature assumes
that the furnace needs to run at outside temperatures less than
65 deg.F. In reality, the furnace is typically not needed until the
outside temperature drops below around 60 deg.F due to the heat
generated by lights,
[[Page 77214]]
appliances, and people. Because of the thermal mass of a dwelling and
other reasons, air conditioning is not usually required until outside
temperatures exceed the traditional cooling degree day base temperature
(65 deg.F) by about 5 to 10 deg.F.
Encouraging States to use degree day data calculated at base
temperature(s) that more reasonably reflect their housing stock and
climate would not only reduce the overestimation of energy savings for
most measures, but would also more accurately model their true cost-
effectiveness. While ideally the base temperature(s) used would be the
building's balance point, DOE recognizes the prohibitive analytical
burden this would impose. Instead, States are encouraged to select
appropriate heating and cooling degree day base temperatures based on
the validation of their energy estimating software or other reasonable
basis. DOE has substituted the term ``base temperature'' (and
definition in Sec. 440.3) for proposed ``balance point temperature'' in
Sec. 440.21(e)(1) of the interim final rule and reworded this paragraph
to more accurately reflect the intended change.
The State Energy Efficiency Programs Improvement Act of 1990, which
amended 42 U.S.C. 6861 et seq., stated that energy audit procedures
should ``establish priorities for selection of weatherization measures
based on their cost and contribution to energy efficiency.'' DOE
interprets this language, in part, to mean that advanced energy audit
procedures should consider energy efficiency as well as total energy
savings. For example, replacing an existing space heater being used to
heat a single room, with a more energy efficient central furnace,
capable of heating the whole house, would probably increase energy use
even as it improved energy efficiency. The occupants would also be
better able to use the entire dwelling unit. Unless undertaken for
health and safety reasons, this measure must be cost justified by the
audit. Addressing energy efficiency in this case would require a cost
justification that compares the energy usage of the central unit to the
energy usage of heating the entire home with space heaters.
The existing rule language addressing this issue states that energy
audit procedures must ``consider the rate of energy use,'' which does
not clearly describe the need to look at both energy efficiency and
total energy savings. To more directly address situations similar to
the space heater example, DOE proposed instead to include the phrase
``and energy requirements.'' This proposed change combined the
requirement to determine the existing energy use with the need to
determine existing energy requirements from actual energy bills or by
generally accepted engineering calculations. As in the space heater
example, the energy requirements of a dwelling unit may exceed its
existing energy use.
The one comment addressing this proposed change agreed with the
need to consider both energy efficiency and total energy savings.
However, the comment expressed concern about encouraging the conversion
of zone, or room, heating systems to whole-house systems. DOE realizes
that these types of situations must be considered on a case-by-case
basis, but believes that the proposed change clarifies the original
intent of the legislation. Therefore, DOE has included this change in
Sec. 440.21(e)(2) of the interim final rule.
Proposed Sec. 440.21(h)(7) included language to remind States that
DOE would have to approve an energy audit for each major dwelling type
covered by the State's weatherization program in light of the different
energy audit requirements of single-family dwellings, multi-family
buildings, and mobile homes. One comment expressed concern about this
requirement for programs that only weatherize a few mobile homes or
multifamily buildings each year. The comment stated that the
requirement should only apply if mobile homes or multifamily buildings
represented over five percent of the units weatherized by the State
each year. Based on this comment, DOE has included in Sec. 440.21(e)(7)
of the interim final rule revised language which states, ``that
represents a significant portion of the State's weatherization
program.'' Future guidance will define ``significant'' at an
appropriate level to be determined.
Proposed Sec. 440.21(i) included language that clarified the type
of information DOE currently requires to approve State priority lists
for similar dwelling units. When States submit to DOE their request for
priority list approval, they often do not provide sufficient detail.
For example, an adequate description of the types of dwelling units
(e.g., 1-story ranch, 1\1/2\-story Cape Cod) covered by the priority
list(s) often is missing. The methodology used to select the
representative sample of dwellings used to develop the priority list
often is not explained, nor are the circumstances that will require a
site-specific audit in lieu of the priority list adequately described.
The increased energy savings resulting from advanced energy audit
procedures could be compromised by priority lists that are not based on
truly typical housing stock or used without comprehensive guidelines
that tell an auditor when atypical circumstances require a site-
specific audit.
Three comments disapproved of the perceived increased DOE scrutiny
of priority lists. While DOE encourages the site-specific energy audit
of every dwelling weatherized, it realizes that this is often not
possible considering the constraints on field staff imposed by funding
limitations and production pressures. The comments suggested that time
spent conducting an energy audit might be better spent on increasingly
sophisticated diagnostic testing to ensure that the dwelling is
adequately ventilated, combustion appliances are operating safely and
efficiently, and that the combustion appliances vent properly. DOE
agrees that priority lists are valuable tools in reducing energy costs
in the greatest possible number of low-income households. Yet, DOE is
responsible for ensuring the technical soundness of priority lists in
light of the substantial Federal investment. For this reason, DOE has
retained in Sec. 440.21(h) of the interim final rule the existing
documentation requirements for the approval of priority lists.
One comment pointed out that proposed Sec. 440.21(j), which
requires every State to document the performance of the same
presumptively cost-effective general heat waste (GHW) reduction
materials, needlessly duplicates effort. The comment further noted that
this documentation often comes from publications authored by DOE. The
comment suggested that DOE issue an initial list of approved GHW
materials as policy guidance. DOE agrees with this comment and has
revised that paragraph, which is now Sec. 440.21(g), and will issue
guidance specifying approved GHW materials. States may request approval
for GHW materials not listed in DOE policy guidance by providing the
required documentation.
Existing regulations require priority lists to be revalidated every
five years. To make the revalidation of priority lists more
straightforward, DOE proposed in Sec. 440.21(k) and (l) to require
States to submit to DOE for approval every five years their complete
energy audit procedures including priority lists and lists of general
heat waste reduction materials. To revalidate their priority lists,
States would have to re-run their energy audit on a subset of the
similar dwellings that the priority list covers. Prior to the issuance
of the NOPR, States have logically argued that their housing stock and
typical housing types do not change significantly over a five-year
[[Page 77215]]
period. However, technologies, material and energy costs, and auditing
tools do change. DOE encourages the continual improvement of audit
tools as evidenced by new versions of NEAT over the years. The best and
most current audit software should be used in developing priority
lists. Additionally, since the latest version of a State's audit
software may not have specific DOE approval, it makes sense for the DOE
approval process to update the energy audit and priority lists every
five years.
One comment supported the proposed change to include energy audit
procedures in the priority list revalidation requirement. Five comments
disagreed with the proposed change as well as the existing requirement
to revalidate priority lists every five years. The comments against the
proposed change argue that revalidation of priority lists should be
based on factors that measure cost-effectiveness, such as fuel and
material costs. While DOE does not wish to impose unnecessary
documentation requirements on States, the Department is responsible for
ensuring that only cost-effective weatherization measures be installed
with DOE funds.
One comment argued that DOE-approved energy audits should stay
approved until they no longer comply with the requirements. Since
States constantly change and improve their energy audit practices and
protocols, DOE believes it is prudent to conduct periodic technical
assessments of States' entire energy auditing procedures. DOE looks at
not just the energy audit software but how the State uses the software.
DOE energy audit approval process reviews all of the procedures States
use to select and install weatherization measures, as well as health
and safety practices affecting clients and field crews.
Thirty-nine (39) comments stated that the process by which DOE
reviews energy audits, including garnering State and expert input,
should be described in the rule, as well as the process by which the
Department will update the guidance. The comments also wanted DOE to
include in the rule its plan for assuring uniform consideration by its
regional offices and processes for appeals should a proposed audit be
turned down. While existing guidance and review practices effectively
address many of these concerns, DOE will revisit its energy audit
approval process and will seek State and expert input. However, DOE
believes that policy guidance is the most appropriate place to describe
processes for reviewing energy audits and updating guidance since such
processes are likely to change over time.
Although Sec. 440.21(h) of the interim final rule retains the
general five-year revalidation requirement, DOE has revised the
proposed rule language to indicate that the policy guidance (issued
after seeking State and expert input) will specify the information that
States must submit and the circumstances that reduce or increase
documentation requirements. The documentation required to revalidate
priority lists will likely be substantially reduced in cases where the
factors affecting the cost-effectiveness of weatherization measures on
the priority lists (e.g., housing stock, costs, energy estimating
algorithms) have not changed significantly since original DOE approval.
Twenty-one (21) comments addressed the proposed Sec. 440.21(k)
requirement for States to submit to DOE for approval each new version
of non-NEAT/MHEA energy audit software released subsequent to State-
specific DOE approval. The comments were concerned that the requirement
might stifle the adoption of evolutionary software improvements and
would increase the reporting burden on States. As indicated in
Sec. 440.21(h) of the interim final rule, DOE agrees with these
comments and will include in policy guidance (to be issued after
seeking State and expert input) the reduced reporting requirements
regarding new releases of energy audit software.
Thirty-nine comments suggested that the policy guidance should also
address the manner in which new technologies will be addressed and
incorporated into the program. These comments also asked how additional
benefits other than energy efficiency, such as climate change benefits,
will be added to the program. The Millennium Implementation Planning
Committee has assembled a panel of stakeholders that is currently
developing a new system to identify, assess, and incorporate advanced
technology into the program in a more open and expedient manner. The
non-energy benefits of the Weatherization Assistance Program are often
included in overall program evaluations and program justification
discussions. Perhaps the program can use these non-energy benefits to
its advantage in future emissions trading systems. However, DOE
believes more information on this issue needs to be explored before
making a final decision.
One comment requested that the cleaning and tuning of air
conditioners be added to Appendix A. The comment explained that an air
conditioner clean and tune typically involves cleaning the cooling coil
and straightening the fins. Under the heading ``Heating and Cooling
System Repairs and Tune-Ups/Efficiency Improvements,'' cleaning heat
exchangers of heating systems is listed. DOE considers the lack of a
specific listing for cleaning cooling coils an oversight that will be
resolved when Appendix A is updated in the near future.
In the preamble of the proposed rule, DOE indicated the possibility
of proposing in the future a requirement for States to include overhead
charges (such as costs for off-site supervisory personnel, tools,
vehicles, etc.) in the savings-to-investment ratio calculations for
individual weatherization measures. In that discussion, DOE stated that
such costs are a significant fraction of the total costs of
weatherizing individual homes and should, therefore, be considered in
the assessment of the relative costs and benefits of measures. DOE
received five comments on this suggestion. Four of the comments were
interested in accounting for overhead costs but believed that these
costs should perhaps be a part of an overall State evaluation of the
Program instead of impacting measure selection on a home-by-home basis.
DOE will continue to urge States to consider such overhead costs in the
measure cost-effectiveness calculations. However, in developing any
future proposal to require the inclusion of overhead costs, DOE intends
to study this issue further with the stakeholders.
Section 440.22 Eligible Dwelling Units
DOE amends Sec. 440.22(b)(2) to add certain eligible types of large
multi-family buildings to the list of dwellings that are exempt from
the requirement that at least 66 percent of the units are to be
occupied by income-eligible households. In these large multi-family
buildings, as few as 50 percent of the units would have to be certified
as eligible before weatherization. This exception applys only to those
large multi-family buildings where an investment of DOE funds would
result in significant energy-efficiency improvement because of the
upgrades to equipment, energy systems, common space, or the building
shell. By providing this flexibility, local agencies are better-suited
to select the most cost-effective investments and enhance their
partnership efforts in attracting leveraged funds and/or landlord
contributions. While most comments were supportive, several comments
did suggest that this flexibility should be extended to cover all
multi-family
[[Page 77216]]
buildings. In the proposed rule, DOE made it clear that this
flexibility will be targeted to only these certain types of buildings
because of the large investment involved and the potential for greater
energy savings.
III. Opportunities for Public Comment
A. Participation in Rulemaking
The Department encourages public participation in this rulemaking.
The Department has established a period of 30 days following
publication of this interim final rule for persons to comment. You may
review all public comments and other docket material in the DOE Freedom
of Information Reading Room at the address shown at the beginning of
this notice of the interim final rule.
B. Written Comment Procedures
Interested persons and organizations are invited to participate in
this rulemaking by submitting data, views, or comments with respect to
the interim final rule. Please provide three copies of your comments to
the address indicated in the ADDRESSES section of this interim final
rule. DOE will consider all timely-submitted comments and other
relevant information before this rule becomes effective.
IV. Procedural Requirements
A. Review Under Executive Order 12866
Today's interim final rule has been determined not to be ``a
significant regulatory action'' under Executive Order 12866,
``Regulatory Planning and Review,'' 58 FR 51735 (October 4, 1993).
Accordingly, this action was not subject to review under that Executive
Order by the Office of Information and Regulatory Affairs of the Office
of Management and Budget (OMB).
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires
preparation of an initial regulatory flexibility analysis for any rule
that by law must be proposed for public comment, unless the agency
certifies that the rule, if promulgated, will not have a significant
economic impact on a substantial number of small entities. DOE
published a notice of proposed rulemaking to amend 10 CFR part 440 to
give State and local agencies additional flexibility in addressing the
weatherization needs of low-income citizens and to make other changes
designed to streamline and update DOE's Weatherization Assistance
Program. The proposed rule was developed following extensive
consultation with State and local stakeholders and after reviewing
comments received. DOE said that the proposed rule would have not any
adverse economic impact on any small governments, organizations or
businesses. Accordingly, DOE certified that the proposed rule, as
promulgated, will not have a significant economic impact on a
substantial number of small entities. DOE did not receive any comments
of this certification, and the addition of mandated cost sharing
requirements does not warrant reconsideration of the certification.
C. Review Under the Paperwork Reduction Act
No new collection of information is imposed by this interim final
rule. Accordingly, no clearance by the Office of Management and Budget
is required under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
D. Review Under the National Environmental Policy Act
DOE has concluded that promulgation of this interim final rule
falls into a class of actions that would not individually or
cumulatively have a significant impact on the human environment, as
determined by DOE regulations implementing the National Environmental
Policy Act of 1969, (42 U.S.C. 4321 et seq.) Specifically, this interim
final rule is covered under the Categorical Exclusion in paragraph A5
to subpart D, 10 CFR part 1021, which covers rulemakings that interpret
or amend an existing regulation without changing the environmental
effect of the regulation. Accordingly, neither an environmental
assessment nor an environmental impact statement is required.
E. Review Under Executive Order 13132
Executive Order 13132 (64 FR 43255, August 10, 1999) imposes
certain requirements on agencies formulating and implementing policies
or regulations that preempt State law or that have federalism
implications. Agencies are required to examine the constitutional and
statutory authority supporting any action that would limit the
policymaking discretion of the States and carefully assess the
necessity for such actions. DOE has examined today's interim final rule
and has determined that it does not preempt State law and does not have
a substantial direct effect on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government. No further
action is required by Executive Order 13132.
F. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
``Civil Justice Reform,'' 61 FR 4729 (February 7, 1996), imposes on
Federal agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. Section 3(b) of Executive
Order 12988 specifically requires that Executive agencies make every
reasonable effort to ensure that the regulation: (1) Clearly specifies
the preemptive effect, if any; (2) clearly specifies any effect on
existing Federal law or regulation; (3) provides a clear legal standard
for affected conduct while promoting simplification and burden
reduction; (4) specifies the retroactive effect, if any; (5) adequately
defines key terms; and (6) addresses other important issues affecting
clarity and general draftsmanship under any guidelines issued by the
Attorney General. Section 3(c) of Executive Order 12988 requires
Executive agencies to review regulations in light of applicable
standards in section 3(a) and section 3(b) to determine whether they
are met or it is unreasonable to meet one or more of them. DOE has
completed the required review and determined that, to the extent
permitted by law, this interim final rule meets the relevant standards
of Executive Order 12988.
G. Review Under the Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. No.
104-4) requires each Federal agency to prepare a written assessment of
the effects of any Federal mandate in a proposed or final rule that may
result in the expenditure by State, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million in any one
year. The Act also requires a Federal agency to develop an effective
process to permit timely input by elected officers of State, local, and
tribal governments on a proposed ``significant intergovernmental
mandate,'' and it requires an agency to develop a plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirement that might
significantly or uniquely affect small governments. The interim final
rule published today does
[[Page 77217]]
not contain any Federal mandate, so these requirements do not apply.
H. Review under the Treasury and General Government Appropriations Act
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. No. 105-277) requires Federal agencies to issue a
Family Policymaking Assessment for any rule or policy that may affect
family well-being. Today's interim final rule will not have any impact
on the autonomy or integrity of the family as an institution.
Accordingly, DOE has concluded that it is not necessary to prepare a
Family Policymaking Assessment.
I. Review Under Small Business Regulatory Enforcement Fairness Act of
1996
As required by 5 U.S.C. 801, DOE will report to Congress on the
promulgation of the rule prior to its effective date. The report will
state that it has been determined that the rule is not a ``major rule''
as defined by 5 U.S.C. 804(3).
V. Other Federal Agencies
DOE provided draft copies of the interim final rule to the
Department of Health and Human Services' Low-Income Home Energy
Assistance Program and the Department of Agriculture's Farmers Home
Administration. We have received no comments. DOE also provided a draft
copy to the Administrator of the Environmental Protection Agency,
pursuant to Sec. 7 of the Federal Energy Administration Act, as
amended, 15 U.S.C. 766. The Administrator has made no comments.
VI. The Catalog of Federal Domestic Assistance
The Catalog of Federal Domestic Assistance number for the
Weatherization Assistance Program for Low-Income Persons is 81.042.
List of Subjects in 10 CFR Part 440
Administrative practice and procedure, Aged, Energy conservation,
Grant programs-Energy, Grant programs-Housing and community
development, Housing standards, Indians, Individuals with disabilities,
Reporting and recordkeeping requirements, Weatherization.
Issued in Washington, DC, on November 29, 2000.
Dan W. Reicher,
Assistant Secretary, Energy Efficiency and Renewable Energy.
For the reasons set forth in the preamble, DOE amends part 440 of
title 10, Code of Federal Regulations, as set forth below.
PART 440--WEATHERIZATION ASSISTANCE PROGRAM FOR LOW-INCOME PERSONS
1. The authority citation for part 440 is revised to read as
follows:
Authority: 42 U.S.C. 6861 et seq.; 42 U.S.C. 7101 et seq.
2. Section 440.1 is revised to read as follows:
Sec. 440.1 Purpose and scope.
This part implements a weatherization assistance program to
increase the energy efficiency of dwellings owned or occupied by low-
income persons, reduce their total residential expenditures, and
improve their health and safety, especially low-income persons who are
particularly vulnerable such as the elderly, persons with disabilities,
families with children, high residential energy users, and households
with high energy burden.
3. In Sec. 440.3:
a. Remove the definition for ``JTPA'';
b. Revise the words in the definitions for ``Handicapped Person''
to read ``Persons with disabilities'' and place it in alphabetical
order; and
c. Add the following definitions in alphabetical order to read as
follows:
Sec. 440.3 Definitions.
* * * * *
Base temperature means the temperature used to compute heating and
cooling degree days. The average daily outdoor temperature is
subtracted from the base temperature to compute heating degree days,
and the base temperature is subtracted from the average daily outdoor
temperature to compute cooling degree days.
* * * * *
Electric base-load measures means measures which address the energy
efficiency and energy usage of lighting and appliances.
* * * * *
High residential energy user means a low-income household whose
residential energy expenditures exceed the median level of residential
expenditures for all low-income households in the State.
Household with a high energy burden means a low-income household
whose residential energy burden (residential expenditures divided by
the annual income of that household) exceeds the median level of energy
burden for all low-income households in the State.
* * * * *
Non-Federal leveraged resources means those benefits identified by
State or local agencies to supplement the Federal grant activities and
that are made available to or used in conjunction with the DOE
Weatherization Assistance Program for the purposes of the Act for use
in eligible low-income dwelling units.
* * * * *
4. Section 440.14 is revised to read as follows:
Sec. 440.14 State plans.
(a) Before submitting to DOE an application, a State must provide
at least 10 days notice of a hearing to inform prospective subgrantees,
and must conduct one or more public hearings to receive comments on a
proposed State plan. The notice for the hearing must specify that
copies of the plan are available and state how the public may obtain
them. The State must prepare a transcript of the hearings and accept
written submission of views and data for the record.
(b) The proposed State plan must:
(1) Identify and describe proposed weatherization projects,
including a statement of proposed subgrantees and the amount of funding
each will receive;
(2) Address the other items contained in paragraph (c) of this
section; and
(3) Be made available throughout the State prior to the hearing.
(c) After the hearing, the State must prepare a final State plan
that identifies and describes:
(1) The production schedule for the State indicating projected
expenditures and the number of dwelling units, including previously
weatherized units which are expected to be weatherized annually during
the program year;
(2) The climatic conditions within the State;
(3) The type of weatherization work to be done;
(4) An estimate of the amount of energy to be conserved;
(5) Each area to be served by a weatherization project within the
State, and must include for each area:
(i) The tentative allocation;
(ii) The number of dwelling units expected to be weatherized during
the program year; and
(iii) Sources of labor.
(6) How the State plan is to be implemented, including:
(i) An analysis of the existence and effectiveness of any
weatherization project being carried out by a subgrantee;
(ii) An explanation of the method used to select each area served
by a weatherization project;
(iii) The extent to which priority will be given to the
weatherization of single-
[[Page 77218]]
family or other high energy-consuming dwelling units;
(iv) The amount of non-Federal resources to be applied to the
program;
(v) The amount of Federal resources, other than DOE weatherization
grant funds, to be applied to the program;
(vi) The amount of weatherization grant funds allocated to the
State under this part;
(vii) The expected average cost per dwelling to be weatherized,
taking into account the total number of dwellings to be weatherized and
the total amount of funds, Federal and non-Federal, expected to be
applied to the program;
(viii) The average amount of the DOE funds specified in
Sec. 440.18(c)(1) through (9) to be applied to any dwelling unit;
(ix) The average amount of DOE funds applied to any dwelling unit
for weatherization materials as specified in Sec. 440.18(c)(1);
(x) The procedures used by the State for providing additional
administrative funds to qualified subgrantees as specified in
Sec. 440.18(d);
(xi) Procedures for determining the most cost-effective measures in
a dwelling unit;
(xii) The definition of ``low-income'' which the State has chosen
for determining eligibility for use statewide in accordance with
Sec. 440.22(a);
(xiii) The definition of ``children'' which the State has chosen
consistent with Sec. 440.3; and
(xiv) The amount of Federal funds and how they will be used to
increase the amount of weatherization assistance that the State obtains
from non-Federal sources, including private sources, and the expected
leveraging effect to be accomplished.
5. Section 440.15 is amended by revising paragraph (a)(3)(iv) to
read as follows:
Sec. 440.15 Subgrantees.
(a) * * *
(3) * * *
(iv) The ability of the subgrantee to secure volunteers, training
participants, public service employment workers, and other Federal or
State training programs.
* * * * *
6. Section 440.16 is amended by revising paragraphs (b) and (d) to
read as follows:
Sec. 440.16 Minimum program requirements.
* * * * *
(b) Priority is given to identifying and providing weatherization
assistance to:
(1) Elderly persons;
(2) Persons with disabilities;
(3) Families with children;
(4) High residential energy users; and
(5) Households with a high energy burden.
* * * * *
(d) To the maximum extent practicable, the grantee will secure the
services of volunteers when such personnel are generally available,
training participants and public service employment workers, other
Federal or State training program workers, to work under the
supervision of qualified supervisors and foremen;
* * * * *
7. In Sec. 440.17 paragraph (a) introductory text is revised and
paragraphs (b) and (c) are added to read as follows:
Sec. 440.17 Policy advisory council.
(a) Prior to the expenditure of any grant funds, a State policy
advisory council, or a State commission or council which serves the
same functions as a State policy advisory council, must be established
by a State or by the Regional Office Director if a State does not
participate in the Program which:
* * * * *
(b) Any person employed in any State Weatherization Program may
also be a member of an existing commission or council, but must abstain
from reviewing and approving activities associated with the DOE
Weatherization Assistance Program.
(c) States which opt to utilize an existing commission or council
must certify to DOE, as a part of the annual application, of the
council's or commission's independence in reviewing and approving
activities associated with the DOE Weatherization Assistance Program.
8. Section 440.18 is amended by:
a. Revising paragraph (a);
b. Removing the phrase ``and (c)(15)'' in the introductory text to
paragraph (b) and in paragraph (b)(2)(i);
c. Adding paragraph (b)(3);
d. Revising paragraph (c)(6); and
e. Revising ``September 30, 1985'' to read ``September 30, 1993''
in paragraph (e)(2)(iii).
The revisions and addition read as follows:
Sec. 440.18 Allowable expenditures.
(a) States must spend an average of at least 40 percent of the
funds provided them for weatherization materials, labor and related
matters listed in paragraphs (c)(1) through (9) of this section. DOE
may approve a State's application to waive the 40 percent requirement
under Sec. 440.21.
* * * * *
(b) * * *
(3) For the purposes of determining the average cost per dwelling
limitation, costs for the purchase of vehicles or other certain types
of equipment as defined in 10 CFR part 600 may be amortized over the
useful life of the vehicle or equipment.
* * * * *
(c) * * *
(6) The cost of purchasing vehicles, except that any purchase of
vehicles must be referred to DOE for prior approval in every instance.
* * * * *
9. Section 440.19 is revised to read as follows:
Sec. 440.19 Labor.
Payments for labor costs under Sec. 440.18(c)(2) must consist of:
(a) Payments permitted by the Department of Labor to supplement
wages paid to training participants, public service employment workers,
or other Federal or State training programs; and
(b) Payments to employ labor or to engage a contractor
(particularly a nonprofit organization or a business owned by
disadvantaged individuals which performs weatherization services),
provided a grantee has determined an adequate number of volunteers,
training participants, public service employment workers, or other
Federal or State training programs are not available to weatherize
dwelling units for a subgrantee under the supervision of qualified
supervisors.
10. Section 440.21 is revised to read as follows:
Sec. 440.21 Weatherization materials standards and energy audit
procedures.
(a) Paragraph (b) of this section describes the required standards
for weatherization materials. Paragraphs (c) and (d) of this section
describe the cost-effectiveness tests that weatherization materials
must pass before they may be installed in an eligible dwelling unit.
Paragraph (e) of this section lists the other energy audit requirements
that do not pertain to cost-effectiveness tests of weatherization
materials. Paragraphs (f) and (g) of this section describe the use of
priority lists and presumptively cost-effective general heat waste
reduction materials as part of a State's energy audit procedures.
Paragraph (h) of this section explains that a State's energy audit
procedures and priority lists must be re-approved by DOE every 5 years.
(b) Only weatherization materials which are listed in Appendix A to
this part and which meet or exceed standards prescribed in Appendix A
to this part may be purchased with funds
[[Page 77219]]
provided under this part. However, DOE may approve an unlisted material
upon application from any State.
(c) Except for materials to eliminate health and safety hazards
allowable under Sec. 440.18(c)(15), each individual weatherization
material and package of weatherization materials installed in an
eligible dwelling unit must be cost-effective. These materials must
result in energy cost savings over the lifetime of the measure(s),
discounted to present value, that equal or exceed the cost of
materials, installation, and on-site supervisory personnel as defined
by the Department. States have the option of requiring additional
related costs to be included in the determination of cost-
effectiveness. The cost of incidental repairs must be included in the
cost of the package of measures installed in a dwelling.
(d) The energy audit procedures must assign priorities among
individual weatherization materials in descending order of their cost-
effectiveness according to paragraph (c) of this section after:
(1) Adjusting for interaction between architectural and mechanical
weatherization materials by using generally accepted engineering
methods to decrease the estimated fuel cost savings for a lower
priority weatherization material in light of fuel cost savings for a
related higher priority weatherization material; and
(2) Eliminating any weatherization materials that are no longer
cost-effective, as adjusted under paragraph (d)(1) of this section.
(e) The energy audit procedures also must--
(1) Compute the cost of fuel saved per year by taking into account
the climatic data of the area where the dwelling unit is located, where
the base temperature that determines the number of heating or cooling
degree days (if used) reasonably approximates conditions when operation
of heating and cooling equipment is required to maintain comfort, and
must otherwise use reasonable energy estimating methods and
assumptions;
(2) Determine existing energy use and energy requirements of the
dwelling unit from actual energy bills or by generally accepted
engineering calculations;
(3) Address significant heating and cooling needs;
(4) Make provision for the use of advanced diagnostic and
assessment techniques which DOE has determined are consistent with
sound engineering practices;
(5) Identify health and safety hazards to be abated with DOE funds
in compliance with the State's DOE-approved health and safety
procedures under Sec. 440.16(h);
(6) Treat the dwelling unit as a whole system by examining its
heating and cooling system, its air exchange system, and its occupants'
living habits and needs, and making necessary adjustments to the
priority of weatherization materials with adequate documentation of the
reasons for such an adjustment; and
(7) Be specifically approved by DOE for use on each major dwelling
type that represents a significant portion of the State's
weatherization program in light of the varying energy audit
requirements of different dwelling types including single-family
dwellings, multi-family buildings, and mobile homes.
(f) For similar dwelling units without unusual energy-consuming
characteristics, energy audits may be accomplished by using a priority
list developed by conducting, in compliance with paragraphs (b) through
(e) of this section, site-specific energy audits of a representative
subset of these dwelling units. For DOE approval, States must describe
how the priority list was developed, how the subset of similar homes
was determined, and circumstances that will require site-specific
audits rather than the use of the priority lists. States also must
provide the input data and list of weatherization measures recommended
by the energy audit software or manual methods for several dwelling
units from the subset of similar units.
(g) States may use, as a part of an energy audit, general heat
waste reduction weatherization materials that DOE has determined to be
generally cost-effective. States may request approval to use general
heat waste materials not listed in DOE policy guidance by providing
documentation of their cost-effectiveness and a description of the
circumstances under which such materials will be used.
(h) States must resubmit their energy audit procedures (and
priority lists, if applicable, under certain conditions) to DOE for
approval every five years. States must also resubmit to DOE, for
approval every five years, their list of general heat waste materials
in addition to those approved by DOE in policy guidance, if applicable.
Policy guidance will describe the information States must submit to DOE
and the circumstances that reduce or increase documentation
requirements.
11. Section 440.22 is amended by revising paragraph (b)(2)
introductory text to read as follows:
Sec. 440.22 Eligible dwelling units.
* * * * *
(b) * * *
(2) Not less than 66 percent (50 percent for duplexes and four-unit
buildings, and certain eligible types of large multi-family buildings)
of the dwelling units in the building:
* * * * *
[FR Doc. 00-31158 Filed 12-7-00; 8:45 am]
BILLING CODE 6450-01-P