Friday, 5 February 2010

Spending Backlog Irks Energy Chief

WASHINGTON—Energy Secretary Steven Chu expressed frustration Thursday that most of the roughly $37 billion in stimulus money Congress gave his agency last year had yet to be spent, but said the agency could manage a new round of funding for clean-energy projects as part of an expected jobs bill.
At a hearing of the Senate Committee on Energy and Natural Resources, Dr. Chu said his agency had handed out only a fraction of the authorized stimulus funds.
According to the agency's Web site, only $2.1 billion has been spent.
The disbursement has been slowed partly by the complexity of the review process the department must follow when determining which projects are eligible for support, he said.
Dr. Chu also suggested that state and local governments in the U.S. were having problems coping with the bureaucratic requirements.
"We're not dilly-dallying," he said. "Many of these organizations aren't used to dealing with that magnitude of money."
But some lawmakers are questioning the agency's ability to quickly spend more money.
"How will you spend more when you still have $32 billion that is still hanging out there?" asked Sen. Lisa Murkowski, (R., Alaska).
Some state officials say the delays have not been solely on their end. Massachusetts officials say Dr. Chu's agency took nearly seven months to determine whether the state's proposal to spend $55 million on insulation, window replacement and other projects required a review under the National Environmental Policy Act, a federal law that requires agencies to make sure federally funded projects won't harm the environment.
"We made our frustrations known," said Phil Giudice, commissioner of the state's Department of Energy Resources.
Dr. Chu said that his agency could quickly spend additional stimulus dollars on certain items that didn't require much review time, such as awarding tax credits for renewable-energy projects.
Congress is considering giving the Energy Department and other federal agencies billions of additional dollars as part of new legislation intended to spur job creation.
The Obama administration has said it planned to seek as much as $5 billion for tax credits and grants to encourage renewable energy, and that it might seek more money for weatherization programs that reduce energy consumption by installing insulation and new windows in homes.
In December, a report by the Energy Department's inspector general warned that staffing shortages and other internal weaknesses increased the risk of fraud and could delay the agency's efforts to spend economic-stimulus funds.
The report said that the agency had made "substantial progress" in identifying risks and strengthening oversight of projects, but that department offices were still too short-staffed and under-trained to handle such a massive increase in funding authority.