States slow to spend stimulus energy efficiency money, investigators find

Introduction

U.S. states have failed to spend the vast majority of 2009 stimulus money they received to encourage renewable energy and efficiency, the Energy Department’s chief watchdog says.

In an audit released this week, the Energy Department inspector general found that as of July, states had spent just 7.2 percent of the $3.1 billion they were sent under the stimulus law for energy efficiency and renewable energy efforts.

“Even though the Department had granted authority to expend funds as early as May 2009, actual spending at the state level had been lethargic, adversely impacting planned increases in energy efficiency and economic benefits, both of which are critically important to the nation,” the report said.

The stimulus money approved by Congress was supposed to be spent quickly to create jobs and trim energy usage, but the audit found that states weren’t equipped to carry out the mission quickly, a theme echoed in other recent analyses of stimulus program spending.

For instance, the DOE inspector general concluded that states proposed using the stimulus money on complex projects that required lengthy compliance checks with four major federal laws: Davis-Bacon Act, National Historic Preservation Act, Buy American provisions of the Recovery Act, and the National Environmental Policy Act. “In general, these four laws delayed progress because the states had to implement additional controls to ensure that the new requirements would be met,” the report said.

The report also concluded that states gave the federal government vastly overstated estimates of the energy efficiency savings they would achieve with the stimulus money.

“The sum of the states’ estimates for anticipated energy savings was 88 billion MBtus based on their initial proposed State Energy Program projects. However, our review of this estimate found that it contained a number of errors and inconsistencies,” the inspector general reported.

“Management agreed, pointing out that the estimate was not realistic or achievable since the United States’ total energy consumption is estimated at 100 billion MBtus.”

Among the biggest recipients, Texas has spent less than 1 percent of its $218.8 million while California has spent 12 percent of its $226 million. Tiny Delaware has made the most use of its stimulus money – it has spent 45 percent of the $24 million it received for state energy projects.

A list of state-by-state spending is posted here.