Touted initiative's funds cut

EPA drew from energy program

By H. Josef Hebert, Associated Press, 8/30/2003

WASHINGTON -- "Energy Star" is the Bush administration's most highly touted energy conservation program, but that has not kept the Environmental Protection Agency from quietly slashing its budget by shifting millions of dollars to other programs. Only recently, after three-fourths of this fiscal year had passed, the White House ordered some of the money put back, according to government and private sources.

By then, however, the 25 percent budget shortfall dating back to last October had forced cancellation of some pending Energy Star contracts and postponement or abandonment of other projects, said sources familiar with the program, speaking on condition of anonymity.

The program promotes products and business practices that conserve electricity and ease the load on what this month's blackout from Michigan to New York City proved to be a fragile transmission system.

Some of the most severe belt-tightening in the EPA's Energy Star office came as administration officials, including then-EPA Administrator Christie Whitman, repeatedly praised the program's successes, according to several sources who have followed the program closely.

Senior administration officials repeatedly have lauded Energy Star for saving billions of dollars in energy bills by helping businesses develop energy conservation plans and by promoting energy efficient appliances, building materials, electric motors and other products.

The Energy Star label -- used in the EPA program as well as a much smaller program within the Energy Department where funding was increased -- has become synonymous with energy efficiency.

The program produces $70 in benefits for every dollar spent on it, according to EPA officials. Last spring, Whitman singled it out as "a shining example" of government-business cooperation to cut energy use, saying it has spurred $7 billion in energy savings. Two years ago, Vice President Dick Cheney's energy task force called for its expansion.

But partly because Congress failed to protect it, and partly because of budgetary pressures on the EPA, the Energy Star program has had to make do with millions of dollars less than what lawmakers thought they were providing.

Even as Whitman and other senior administration officials were praising the program, EPA budget planners informed the Energy Star office last February it could count on only $37.5 million this fiscal year, $12.5 million less than what Bush requested and Congress appeared to have approved, congressional and private sources said.

Because of the funding shortfall, some contracts with private businesses to promote energy efficiency were canceled and a number of tests to determine whether products warranted the "Energy Star" label were scrapped, the sources said.

The reason given, according to these sources, was that the EPA had to find money to pay for scores of congressionally mandated projects while at the same time absorbing an across-the-board spending cut.

But the cut was only about one-half of 1 percent, meaning Energy Star should have lost no more than about $250,000.

Instead, the $12.5 million was siphoned away to pay for other programs and projects within the agency, including "pork barrel" projects that lawmakers demanded be fully funded, said EPA and private sources familiar with the budget process.

"It's been used as kind of a slush fund," said Kara Renaldi, director of policy for the Alliance to Save Energy, an advocacy group. She said it was easy to target the program because Energy Star's specific funding level is not protected as a line item in the EPA budget, and because it is not linked to any specific regulatory requirement.

While declining to give a specific amount, Jerry Kurtzweg, a budget official at the EPA, acknowledged that money was shifted from the Energy Star program to meet other budgetary needs. While acknowledging Energy Star's popularity and success, he said it fell victim to a shortage of money and a need to fund other programs, including clean air rules facing court deadlines.

Last month, the White House directed $7 million be put back into the program, bringing its budget for this year to $44.6 million, but still shy of what Bush and lawmakers had intended. The EPA had to scramble to find the money elsewhere in its budget.

This summer the House, in its committee report on EPA's budget for the next fiscal year beginning Oct. 1, directed specifically that Energy Star get $50.3 million. The Senate has not taken up the bill yet.