Pa., N.J. getting $372 million in weatherization stimulus

Caulking and sealing. Insulation in the walls and the attic. An upgraded furnace. Perhaps even a new refrigerator.

Energy-saving home improvements - that's how the federal stimulus program will first be felt by tens of thousands of low-income American families.

About 30,000 homes in Pennsylvania and 13,000 in New Jersey will benefit from $5 billion that Congress has allotted nationally for weatherization work.

Pennsylvania will get $253 million and New Jersey will get $119 million under a supercharged expansion of a 33-year-old program that was first meant to help the nation cope with the Arab oil embargo and high energy prices of the 1970s.

States have until Tuesday to submit final plans for how they will distribute the stimulus money to the already established community agencies that identify eligible homeowners and hire contractors.

Officials said the expansion of the Weatherization Assistance Program has three main goals: to reduce the cost of home heating for eligible families, to put about 1,400 people to work in the two states, and to reduce energy consumption.

It is the biggest of several green-energy programs in the American Recovery and Reinvestment Act - the stimulus package - adopted in February.

"I think this will have a fantastic impact in a city like Philadelphia," said Liz Robinson, executive director of the Energy Coordinating Agency of Philadelphia Inc.

Robinson said stimulus money should allow her agency - one of two that do weatherization in the city - to work on 2,300 houses in the next year, up from 1,100 in the last year.

Almost as important, she said, new rules will allow more improvements to each house.

The old guideline was to spend no more than $2,500 on average. A new Pennsylvania guideline will put that at $5,000. New Jersey's average will be $6,500.

Robinson said the increase would allow installation of new heating systems in many homes, saving homeowners or tenants hundreds of dollars a month in heating costs.

Any low-income homeowner can apply for aid to a community-weatherization agency. But Pennsylvania has said it would give priority to people already receiving help paying their heating bills through another federal-state program. Robinson said they tend to be families in big, drafty houses, not twins or rowhouses.

In Philadelphia, she said, those houses are most heavily concentrated in West Philadelphia and Germantown.

"This is the opportunity of a century to retool the deficient housing stock our low-income citizens live in and really deal with problems in a permanent way," Robinson said.

The work will be done free of charge. The general annual income limit for a family of four will be about $44,000. Some states may calculate the limit somewhat differently.

The Weatherization Assistance Program is separate from the tax credit for weatherization that the stimulus program provides for higher-income homeowners. Any homeowner will be able to save up to $1,500 in taxes to offset some of the cost of installing upgrades such as windows, insulation, or furnaces.

So much weatherization money will begin flowing so fast that several people who testified at public hearings last week in Harrisburg and Trenton questioned whether the states would be able to manage all of it.

Louis J. Biacchi of the Pennsylvania Builders Association said there were already backlogs of applicants in some counties under the current, much-smaller program.

The state, which received $14.6 million for home weatherization last year from the U.S. Department of Energy, worked on about 4,000 houses, on average, in each of the last few years.

"How is the existing system going to handle this additional $253 million?" Biacchi asked at a hearing Tuesday held by the state Department of Community and Economic Development.

He then offered his own answer: "I just don't think it's going to happen."

Kenneth Klothen, the deputy department secretary who presided over the hearing, said later in an interview he was confident the money would be spent efficiently.

Across the country, the first major impact of the federal stimulus program has already taken the form of bridge and road repairs.

The next big impact should come from weatherization work starting this summer. Some states have begun to spend a small, initial allotment of weatherization money to train workers and beef up management staffs.

But Klothen said Pennsylvania had been unable to spend its share of that money because the legislature hasn't yet appropriated it. The issue has been caught up in the battle over the state budget, which is to be adopted by July 1.

New Jersey has no such legislative-approval requirement. But a state official there said construction funding wouldn't come from Washington for six weeks or more anyway.

"We don't think our money will be out before July," said Joseph V. Doria Jr., commissioner of the N.J. Department of Community Affairs.

Doria said the money would produce "a lot of good" in the months ahead. In Pennsylvania, Klothen said the money would provide "an exciting time" for state government.

Aware that a tide of money is coming, the construction industry eagerly awaits its arrival.

Pennsylvania hopes the money will create 940 jobs between contracting companies and the 42 community agencies that will choose which houses are to be upgraded, issue the contracts, and oversee the work.

The spending should generate between 400 and 500 jobs in New Jersey, Doria said.

Albert B. Kelly, president of the Tri-County Community Action Agency in Bridgeton, N.J., told New Jersey officials Monday an "abundance" of contractors planned to get into weatherization work.

Kelly wanted assurance that the money would pass through the same 22 New Jersey community agencies that handle current weatherization funding.

That is the plan.

The money will be available to the states for up to three years. But President Obama has said he wants most of it spent in the first year or so to kick start the economy.

Pennsylvania Auditor General Jack Wagner has warned that too much haste could be a bad thing. In letter to the U.S. General Accountability Office last month, he cited an audit of the Pennsylvania weatherization program that his staff conducted in 2007.

The audit cited "poor administration, inadequate funding, and insufficient manpower" in the program and said greater oversight would "minimize potential for fraud and abuse."

Mary A. Soderberg, Gov. Rendell's budget secretary, said in a reply to Wagner's letter that significant improvements had been made to the program since the audit.

"These improvements," she said, "vastly reduce the potential for abuse in the use of funds while assuring that all eligible clients receive the benefits to which they are entitled."