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S. HRG. 111–1023 

HEARING TO RECEIVE TESTIMONY ON S. 3102, 

THE RURAL ENERGY SAVINGS PROGRAM ACT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY, SCIENCE AND 

TECHNOLOGY 

OF THE

COMMITTEE ON AGRICULTURE, 

NUTRITION, AND FORESTRY 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

JUNE 17, 2010 

Printed for the use of the 

Committee on Agriculture, Nutrition, and Forestry 

( 

Available via the World Wide Web: http://www.agriculture.senate.gov 

SUBCOMMITTEE ON ENERGY, SCIENCE AND TECHNOLOGY 

MICHAEL BENNET, Utah, Chairman 

KENT CONRAD, North Dakota 

E. BENJAMIN NELSON, Nebraska 

SHERROD BROWN, Ohio 

AMY KLOBUCHAR, Minnesota 

DEBBIE STABENOW, Michigan 

KIRSTEN E. GILLIBRAND, New York 

JOHN THUNE, South Dakota 

RICHARD G. LUGAR, Indiana 

PAT ROBERTS, Kansas 

MIKE JOHANNS, Nebraska 

CHUCK GRASSLEY, Iowa 

JOHN CORNYN,Texas 

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY 

BLANCHE L. LINCOLN, Arkansas, Chairman 

PATRICK J. LEAHY, Vermont 

TOM HARKIN, Iowa 

KENT CONRAD, North Dakota 

MAX BAUCUS, Montana 

DEBBIE STABENOW, Michigan 

E. BENJAMIN NELSON, Nebraska 

SHERROD BROWN, Ohio 

ROBERT CASEY, Jr., Pennsylvania 

AMY KLOBUCHAR, Minnesota 

MICHAEL BENNET, Colorado 

KIRSTEN GILLIBRAND, New York 

SAXBY CHAMBLISS, Georgia 

RICHARD G. LUGAR, Indiana 

THAD COCHRAN, Mississippi 

MITCH MCCONNELL, Kentucky 

PAT ROBERTS, Kansas 

MIKE JOHANNS, Nebraska 

CHARLES GRASSLEY, Iowa 

JOHN THUNE, South Dakota 

JOHN CORNYN, Texas 

ROBERT HOLIFIELD, Majority Staff Director 

JESSICA L. WILLIAMS, Chief Clerk 

MARTHA SCOTT POINDEXTER, Minority Staff Director 

ANNE C. HAZLETT, Minority Chief Counsel 

(II) 

(III) 

C O N T E N T S 

Page 

HEARING(S): 

Hearing to Receive Testimony on S. 3102, The Rural Energy Savings Program 

Act ......................................................................................................................... 1 

Thursday, June 17, 2010 

STATEMENTS PRESENTED BY SENATORS 

Lincoln, Hon. Blanche L., U.S. Senator from the State of Arkansas, Chairman, Committee on Agriculture, Nutrition, and Forestry ................................ 9 

Bennet, Hon. Michael F., U.S. Senator from the State of Colorado, Chairman, 

Subcommittee on Energy, Science, and Technology .......................................... 1 

Lugar, Hon. Richard G., U.S. Senator from the State of Indiana ....................... 3 

Panel I 

Merkley, Hon. Jeff, U.S. Senator from the State of Oregon ................................ 4 

Panel II 

Elgohary, Nivin, Acting Assistant Administrator, Rural Development Rural 

Utility Service Electric Program, U.S. Department of Agriculture, Washington, DC ............................................................................................................. 6 

Panel III 

Singer, Kent, Executive Director, Colorado Rural Electric Association, Denver, 

CO .......................................................................................................................... 11

Hanesworth, William, Vice President and General Manager, Air Conditioning 

Division, Rheem Manufacturing Company, Fort Smith, AR ............................ 13 

APPENDIX 

PREPARED STATEMENTS: 

Elgohary, Nivin ................................................................................................. 22 

Hanesworth, William ....................................................................................... 31 

Singer, Kent ...................................................................................................... 36 

(1) 

HEARING TO RECEIVE TESTIMONY ON S. 3102, 

THE RURAL ENERGY SAVINGS PROGRAM ACT 

Thursday, June 17, 2010 

UNITED STATES SENATE, SUBCOMMITTEE ON ENERGY, SCIENCE, AND TECHNOLOGY, COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY, Washington, DC 

The committee met, pursuant to notice, at 9:31 a.m., in Room 

328A, Russell Senate Office Building, Hon. Michael Bennet, Chairman of the subcommittee, presiding. 

Present or submitting a statement: Senators Bennet, Lincoln (ex 

officio), and Lugar. 

STATEMENT OF HON. MICHAEL F. BENNET, U.S. SENATOR 

FROM THE STATE OF COLORADO, CHAIRMAN, SUBCOMMITTEE ON ENERGY, SCIENCE, AND TECHNOLOGY 

Senator BENNET. Good morning and welcome to this hearing of 

the Senate Agriculture Committee’s Subcommittee on Energy, 

Science, and Technology. Hello, Senator Merkley. Thank you for 

joining me here today so we can hear testimony on S. 3102, the 

Rural Energy Savings Program Act. 

Today, we have the privilege of hearing testimony from Senator 

Jeff Merkley, of Oregon; Nivin Elgohary, the Acting Assistant Administrator of Rural Development’s Electric Program at USDA. I 

am very pleased that Kent Singer is here today, the Executive Director of the Colorado Rural Electric Association, and William 

Hanesworth, Vice President and General Manager of the Rheem 

Air Conditioning Division, who is here from Fort Smith, Arkansas. 

I am going to make a short opening statement on today’s hearing 

and then I will recognize other Senators as they arrive to make a 

statement in the order in which they arrive. 

In my home State of Colorado, there is tremendous enthusiasm 

surrounding the push toward what we call the new clean energy 

economy. We have seen the clean energy economy take root in 

areas all across our State, in rural and urban communities alike. 

But with clean energy projects cropping up all across the State, 

people in rural Colorado are wondering what they can do to bring 

the clean energy economy a little closer to home. They are wondering what role small towns can play in making energy more affordable to help usher in an energy independent future. 

It is my view that the right way to transform our energy economy is one in which we all share in the economic benefits. One way 

we can help rural America in particular harness these economic 

benefits is to rethink not only how we produce our energy, but how 

2 

we can make better more efficient use of that energy in our rural 

communities. Energy efficiency is the low-hanging fruit in the drive 

to reduce our overall energy consumption and diversify the kinds 

of energy sources we use. 

As we are likely to hear today, homes in rural areas tend to be 

older and less energy efficient. As a result, working families in 

rural America tend to spend a larger proportion of their income on 

energy and utility costs than families in urban areas. So simple efficiency upgrades can help lower energy costs and help ease the 

burden on already tight family budgets. Yet up-front costs sometimes—often— put these improvements out of reach for families 

struggling to make ends meet. 

The bipartisan bill before us this morning provides a common 

sense solution to this very pervasive problem in rural America. Our 

purpose is to create new jobs for rural Americans, to save families 

money and help the environment, a win-win-win. By overcoming 

the high up-front costs of energy efficiency improvements, this bill 

puts simple energy efficiency improvements within reach for families all across rural America. That is something we can all get behind, as Republicans and Democrats, and in a time when partisan 

gridlock prevents a lot from getting done, this bill offers an opportunity for both parties to work together to get the job done for the 

American people. 

The Rural Energy Savings Program Act authorizes $4.9 billion in 

lending authority through USDA’s Rural Utilities Service. I want 

to emphasize here that this is a fiscally responsible way to solve 

a very real problem for families in rural America because the resources are distributed through loans, not grants. The American 

taxpayer will be paid back for every dime put into these innovative 

energy efficiency loans. 

Once the bill is passed into law, and I hope today’s hearing 

marks another step forward in that process, a rural cooperative 

would apply to RUS to borrow money to fund these local energy efficiency programs. A no-interest loan is then given to the cooperative, which they in turn lend to rural homeowners and small businesses. The homeowners and small businesses use the money to 

help cover the up-front costs of energy efficiency improvements. 

These costs are paid back to the co-op over a ten-year time period 

as an addition onto that homeowner’s or small business’s monthly 

electric utility bill. Those additional costs to the homeowners and 

small businesses will be substantially offset by the cost savings 

stemming from the installed energy efficiency improvements. 

This bill will help rural economies recover by creating thousands 

of good paying jobs in my home State of Colorado and across the 

country. These jobs serve several important public purposes. They 

save families money and they make us more secure by supporting 

our energy independence and reducing harmful pollution. These 

are jobs that will be created right here in America, and they can’t 

be shipped overseas. 

The Rural Energy Savings Program is a common sense, bipartisan bill supported by a broad coalition of partners, and I look forward to having today’s hearing and subsequently getting it passed 

into law. 

3 

In my home State, the bill has the support of the Colorado Rural 

Electric Association, the Rocky Mountain Farmers Union, and Environment Colorado, a diverse coalition that is working toward a 

new approach to an old problem. I thank them for their support 

and my colleagues for their leadership. Working together, I am confident we can help pass this bill into law, and in doing so, help ensure that we move forward into the new energy economy and that 

rural America is not left behind. 

With that, Senator Lugar, would you like to make a statement? 

Thank you for being here. 

STATEMENT OF HON. RICHARD G. LUGAR, U.S. SENATOR 

FROM THE STATE OF INDIANA 

Senator LUGAR. Thank you, Mr. Chairman. I appreciate the opportunity to discuss this important legislation. I applaud you for 

holding this hearing today. I would like to extend a warm welcome 

to all of our guests this morning, but in particular, I would like to 

thank and recognize Senator Merkley, for his leadership on S. 

3102, the Rural Energy Savings Program Act. As an original cosponsor, I enjoyed working with him and others on this legislation. 

I believe it provides a positive way forward for energy efficiency for 

rural America. 

More than 42 million Americans live in rural communities and 

many of these Americans reside in homes that are significantly 

more inefficient than those typically found in urban communities. 

In fact, USDA has found that rural households spend $200 to $400 

more per year on their utility bills than comparable urban households. This utility bill disparity is significant given that rural 

households earn $10,000 a year less than the national average, 

meaning that fewer rural households are capable of affording the 

up-front cost to increase the energy efficiency of their homes. 

Accordingly, I am pleased to be an original cosponsor of the 

Rural Energy Savings Program Act, which permits members of 

Rural Electric Cooperatives to receive long-term low-interest loans 

to improve the energy efficiency of their properties with no up-front 

costs. These loans would be required to be repaid in ten years 

through monies saved on utility bills. Not only will this legislation 

lower utility bills for individual rural households and businesses, 

it will also improve the ability of Rural Electric Cooperatives to 

keep pace with increased consumer electricity demand. 

The Rural Energy Savings Program Act is projected to create 

nearly 26,000 jobs, spur retrofits in up to 1.6 million rural homes, 

and save rural households hundreds of dollars a year after the 

loans are repaid, and eliminate the need for new generating capacity to power 625,000 homes in coal-dependent areas. 

Mr. Chairman, I recently introduced a bill referred to as the 

Lugar Practical Energy and Climate Plan, which largely incorporates the Rural Energy Savings Program Act and other similar 

policies that fix the major leaks in our energy system. My bill focuses on three areas of policy: Foreign oil reduction, energy efficiency, and power diversification. In writing my bill, I focused on 

energy policies that are achievable, cost effective, and most importantly, that save American consumers and businesses money. 

4 

Independent analysis has estimated that by the year 2030, my 

plan would reduce foreign oil dependence by 40 percent, energy 

consumption by 11 percent, average household electric bills by 15 

percent, and greenhouse gas emissions by 20 percent, or about 1.6 

billion metric tons, the equivalent of taking more than 240 million 

cars off our highways. The bill we are considering today is a very 

considerable part of that program. 

I look forward to today’s hearing testimony on the Rural Energy 

Savings Program, and again, I thank the Chair for holding this 

very timely hearing. 

Senator BENNET. Thank you, Senator Lugar, and thank you for 

your statement. Thank you for being here. 

I would also like to extend a warm welcome to our colleague, 

Senator Merkley. Thank you for your leadership, and we look forward to hearing from you as the lead sponsor of S. 3102. We are 

glad you are here. I am delighted that you introduced the bill and 

that you are providing testimony today. Senator Merkley? 

STATEMENT OF HON. JEFF MERKLEY, U.S. SENATOR FROM 

THE STATE OF OREGON 

Senator MERKLEY. Good morning and thank you very much, Mr. 

Chairman and Senator Lugar. It is terrific to have both of you as 

original cosponsors of this bill. I also want to thank Senator Graham and Senator Shaheen, who were the other original cosponsors, 

and other members of the Agriculture Committee who are among 

the cosponsors, Senator Lincoln, Senator Brown, Senator Harkin, 

Senator Klobuchar, and Senator Stabenow. 

This bill is designed for a simple but important purpose: To provide a cost-effective way to help rural residents and rural businesses participate in the clean energy economy by helping them invest in energy efficiency renovations for homes and buildings. 

We all talk today about clean energy. As members of this committee are aware, energy efficiency is both the cleanest form of energy and the cheapest form of energy. That is a nice combination 

and a real contrast as we look at the challenges that we are seeing 

in the Gulf today. 

In the current dire straits that our economy is in, energy efficiency is also a major opportunity for job creation. Since the recession began, we have lost 3.7 million jobs in manufacturing and construction. One in five construction workers is out of work. Energy 

efficiency renovation creates jobs in both of these sectors. It is estimated by some to be the most effective strategy for creating jobs 

per dollar expended by the Federal Government. Buildings use 40 

percent of our energy, and so they must be a central focus for making progress on energy efficiency. 

Energy efficiency renovations for buildings help create jobs for 

small businesses. More than 90 percent of construction firms employ fewer than 20 people. More than 60 percent of the manufacturers that create materials and equipment for energy renovations 

employ fewer than 20 people. And as the Chair pointed out in his 

remarks, these are jobs that cannot be sent overseas. These are 

jobs created here in America. 

There are two important aspects of this bill’s approach to energy 

efficiency, its rural focus and its financing strategy. First, in many 

5 

parts of our country and certainly in Oregon, our rural areas have 

been the hardest hit by the recession. In Oregon, many of these 

communities are forest-based communities, and with the collapse of 

the housing market, timber prices are at an all-time low and unemployment is at an all-time high. Families need jobs and they need 

help with their energy bills. 

Second, Rural Electric Cooperatives often have higher costs of 

doing business. During the New Deal, the cooperatives were formed 

specifically because the cost of connecting rural customers spread 

out over very long distances meant that private utilities weren’t 

willing to provide the service. While those Rural Cooperatives still 

have the fewest customers per mile of distribution line, in even a 

State like Oregon, where we have access to low-cost hydropower, 

that means higher costs and higher electric rates for many rural 

residents and businesses. 

The financing strategy for this bill is important because it helps 

families and businesses cover the up-front costs of renovations. You 

can imagine that it is very difficult to consider buying a whole set 

of, say, double-paned vinyl windows. But when you realize the energy savings on your electric bill or on your heating bill are going 

to be greater than the costs of the loan that you are getting to do 

it, then it becomes, well, this is a win-win in all respects. 

Our scarce Federal dollars go even further with financing than 

with grants or rebates because the government does get repaid, a 

critical element as we wrestle with the deficit. For financing programs, we only need to appropriate funds for the anticipated losses. 

In the case of the Rural Energy Savings Program, by appropriating 

$775 million, we can fund a lending volume of $4.9 billion. 

In the case of setting up financing through co-op utilities, there 

is an even greater benefit because they can offer the on-bill financing. It makes it very convenient for customers to repay, very low 

servicing overhead. 

That is the core concept, helping rural co-ops offer low-cost loans 

to customers which they can repay right on their utility bills. We 

do this by building off existing programs at the Rural Utilities 

Service, which already makes loans to rural electric co-ops. The bill 

proposes to have RUS make zero-interest loans to co-ops and then 

allow those co-ops to finance energy efficiency renovations at an interest rate of three percent. 

In addition, the bill offers jump start grants to help co-ops launch 

or expand energy efficiency programs. It also includes programs for 

training and for technical assistance, as well as for measurement 

and verification of energy efficiency renovation work to make sure 

that the work is high quality and it is delivering the savings the 

rural customers are counting on. 

In closing, this is a win-win-win for our rural communities, creates jobs, helps people reduce their energy bills, and, of course, it 

improves environmental impacts of electricity generation. 

Thank you for your cosponsorships. Thank you for the committee’s interest. It is a pleasure to be here today. 

Senator BENNET. Thank you, Senator Merkley. 

Senator Lugar, do you have any comments? 

Senator LUGAR. Mr. Chairman, let me just ask, and this is much 

more of a procedural question, obviously, all three of us are strongVerDate Nov 24 2008 04:23 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\66271.TXT MICHA
6 

ly in favor of this piece of legislation, so we do not have a great 

number of questions to ask each other except how this might proceed. I am just curious as to whether you know the will of the 

Chairman as to whether she plans to have a business meeting in 

which this might be considered. 

Secondly, if such a meeting were to occur, and I presume a majority of members would vote in favor of the legislation, what its 

prospects may be on the floor, whether there is a reasonable chance 

of unanimous consent passage in which members are polled by telephone as opposed to floor activity, which is the normal course, I 

think, for many bills now that are not monumental in character, 

given the difficulties on the floor. Do you have any—— 

Senator BENNET. Chairman Lincoln will be here later this morning, so I will ask her when she arrives. I don’t know, Senator 

Merkley, whether you have got—so we will figure that out today. 

Thank you. 

Senator LUGAR. Thank you. 

Senator BENNET. Thank you. 

Senator MERKLEY. Thank you very much. 

Senator BENNET. Thank you for being here. That concludes our 

first panel. Thank you again to Senator Merkley for joining us here 

today. 

We will now hear from Nivin Elgohary—I have been practicing 

this all night long—— 

[Laughter.] 

Senator BENNET. —Elgohary, and I will say that today is her 

birthday. 

[Applause.] 

Senator BENNET. I didn’t need to practice that. Happy birthday. 

She is the Acting Assistant Administrator with the USDA Rural 

Development Electric Program. She has been Acting Assistant Administrator for the Electric Program since January 2009. Ms. 

Elgohary is responsible for directing and coordinating all activities 

pertaining to the Rural Electric loan and grant programs. Ms. 

Elgohary’s tenure with the USDA began in 1999 as a loan specialist with the Power Supply Division of the USDA Rural Development Electric Program. Her experience also includes time in the 

Office of the Program Advisor for the USDA Rural Development 

Telecommunications Program. 

Thank you for joining us today. I look forward to hearing your 

testimony and asking some questions. You have got about five minutes to deliver your remarks, and please go ahead. 

STATEMENT OF NIVIN ELGOHARY, ACTING ASSISTANT ADMINISTRATOR, RURAL DEVELOPMENT RURAL UTILITY SERVICE 

ELECTRIC PROGRAM, U.S. DEPARTMENT OF AGRICULTURE 

Ms. ELGOHARY. Thank you, Mr. Chairman, and thank you for the 

birthday wish. Also, thank you, members of the committee, for inviting me to discuss energy efficiency solutions to the U.S. Department of Agriculture Rural Development Rural Utility Service Electric Program. 

The Rural Utility Service, or RUS, Electric Program is the successor to the Rural Electrification Administration established in 

1935. Today, RUS has over 650 borrowers with an outstanding 

7 

portfolio of $42 billion and a delinquency rate of less than one-half 

of one percent. Forty-two-point-seven percent of our borrowers 

serve at least one poverty county, and 77 percent serve at least one 

out-migration county in the United States. Our borrowers provide 

electric service to about 17 percent of the poverty counties in the 

U.S. and 39 percent of the out-migration counties. 

RUS is authorized to provide loans for construction and operation 

of generating plants and electric transmission and distribution 

lines. RUS is also authorized to provide loans to fund, furnish, and 

improve electric service, including demand-side management and 

energy conservation. RUS is also authorized to defer borrower principal and interest payments on RUS direct debt as compared to the 

Federal financing debt which is guaranteed by RUS. 

The Energy Resource Conservation Program allows our borrowers to defer principal payments and reamortize the deferment 

over seven years. The borrowers, in turn, may use these 

deferments to make funds available for energy efficiency and conservation measures. The first ERC agreement was signed with the 

borrower in 1981. To date, we have 43 agreements with a total of 

$64 million in deferments. Although the ERC Program has been 

available for approximately 30 years, the loans for eligible 

deferments are declining. Only RUS direct loans may be deferred. 

RUS has not received direct funding appropriated since 2007. 

Recently, Section 6101 of the 2008 farm bill amended Sections 2 

and 4 of the Act to explicitly authorize loans to borrowers for energy efficiency. This amendment codified a longstanding USDA policy. We are currently working on regulation to implement this farm 

bill provision. 

S. 3102 is an energy savings loan program for rural areas. It pro- vides $4.9 billion in loan program at a cost of $755 million. These 

funds would be available for five years or until the funds are fully 

obligated. S. 3102 also includes grants, identified as a jump start 

grant, for each loan, not to exceed four percent of the loan amount. 

If enacted, eligible applicants would be able to borrow the funds 

from RUS and re-lend these funds to their consumers for energy 

efficiency measures. The grant funds may be used to defray the 

costs of implement energy efficiency re-lending programs. The eligible applicant will submit to RUS an energy efficiency plan and request for a loan. RUS will then approve the loan request upon receipt and review the applicant’s plan along with any existing application requirements and lending policies. Once the loan is approved, the borrower will receive a zero-interest loan for up to ten 

years. The borrower will use the loan proceeds to provide low-interest loans to their members for energy efficiency measures. 

The consumer’s loan may carry an interest rate of no higher than 

three percent. The consumer’s energy savings as a result of the energy efficiency measures will be reflected on the electricity bill. The 

savings will be used to pay back the energy efficiency measures 

over a ten-year period. 

The cost of this Rural Energy Savings Loan Program as suggested in S. 3102 is $993 million. The cost includes $755 million 

as the cost of the direct loan program and an additional $238 million for grants, technical assistance, administrative expenses for 

RUS to implement this program. 

8 

Mr. Chairman, I want to thank you for the opportunity to discuss 

RUS energy efficiency efforts and to provide expert testimony on S. 

3102. I would be glad to answer any questions the members of the 

subcommittee may have. 

[The prepared statement of Ms. Elgohary can be found on page 

22 in the appendix.] 

Senator BENNET. Thank you very much for your testimony. I just 

have a couple of questions. 

Do you have a sense—can you say yet whether the administration supports. S. 3102? 

Ms. ELGOHARY. At this current time, the administration does not 

have a position on S. 3102. 

Senator BENNET. Do you know when the USDA is likely to be 

able to have a position on the bill? 

Ms. ELGOHARY. I am not aware. 

Senator BENNET. Okay. Senator Lugar, do you have any questions? 

Senator LUGAR. Mr. Chairman, I tried to follow carefully your description of authorization and appropriation. I gather that even 

though the administration has not taken a position, nor has the 

Secretary of Agriculture, that the money that is envisioned in S. 

3102 is available, is that correct? In other words, if, in fact, the administration decided this was a great idea and the Secretary was 

directed to proceed, are the steps in place now in which the money 

has been authorized and appropriated so that action can be taken 

in a timely way? 

Ms. ELGOHARY. RUS is authorized to do energy efficiency and we 

could do it out of our existing appropriations. However, it would 

not be at the same cost that is projected in S. 3102. S. 3102 identifies a zero-interest loan to the borrower. Our borrowers currently 

take loan funds out of our existing FFB portfolio. The long-term interest rate there is about 4.3 percent for a 30-year loan. 

Senator LUGAR. Granted, that is the current situation. I suppose 

my question is, does the passage of this legislation then change 

those circumstances, at least for the loans that are envisioned 

under the legislation, leaving aside what the current predicament 

may be or the past ideas. Do you have a response to that? 

Ms. ELGOHARY. We can—— 

Senator LUGAR. In other words, are we stuck at the old rates, 

notwithstanding the fact this is supposed to be a zero-loan situation. 

Ms. ELGOHARY. We will get back to you with an answer to that 

question. 

Senator LUGAR. Well, I would appreciate it, because that is material in terms of the timeliness of this. Let us say that we have the 

good fortune that our Chairman is persuasive with the President 

and the President says, let us get on with this, that it makes a lot 

of sense in terms of energy efficiency in the country. But the President then is stymied. He says, what is going on out there at 

USDA? So I just want to make sure what is going on at USDA, 

kind of grease the skids. That may be the wrong terminology, but 

prepare the way for successful action on this bill. 

Ms. ELGOHARY. I can share some process, maybe, that might help 

to answer the question. RUS currently, as part of our normal proVerDate Nov 24 2008 04:23 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 C:\DOCS\66271.TXT MICHA
9 

cedures in funding, we find two findings in any loan application, 

whether it be for energy efficiency, plan improvements or Consumer Connects. There is a financial finding and there is an engineering finding. But prior to those findings being made, we require 

that our borrowers submit to us long-range plans, loan forecasting 

requirements, and within those studies that they submit to us, energy efficiency is a component of the product of that study. 

Senator LUGAR. Is the study now for the co-op as opposed to the 

individual rural borrower? I am just thinking of a farmer and then 

his or her home who wanted to make one of these loans. Is that 

person required to make this kind of study, or is—— 

Ms. ELGOHARY. No, no, no, no. 

Senator LUGAR. No? 

Ms. ELGOHARY. No. The loans would be made to the electric coop and then the electric co-op, in turn, would market the energy 

efficiency efforts with their consumers, whether it be the farmer or 

a local business or a homeowner. That consumer, a member of the 

electric cooperative, would make a loan with the co-op over a certain period of time and pay that loan back through their energy 

bill. So RUS would be making the loan to the electric utility. 

Senator LUGAR. Fine. Thank you. And you are going to get back 

to us now as to whether things are underway in the event the 

President says yes and USDA says yes, quite apart from our saying 

yes to move this situation. 

Ms. ELGOHARY. Correct. 

Senator LUGAR. Thank you. 

Senator BENNET. I would like to echo Senator Lugar’s point there 

and also say that if there are other suggestions the administration 

has for the bill, we would like to hear those, as well. I think that 

the reason it is such an appealing piece of legislation for a lot of 

us is, first, that it will allow much more retrofitting to be done in 

rural areas, but also the on-bill financing component of it is not 

available today and I think would make a big difference to our 

communities and to our families. So if you could get back to us 

with suggestions on the legislation, we are all ears. 

Ms. ELGOHARY. Okay. 

Senator BENNET. Thank you very much for being with us today. 

Thank you for your testimony, and we appreciate your taking the 

time. That concludes our second panel. 

We are delighted to be joined today by Chairman Lincoln, and 

I am going to turn the microphone over to her for some comments 

on the bill. 

STATEMENT OF HON. BLANCHE L. LINCOLN, U.S. SENATOR 

FROM THE STATE OF ARKANSAS, CHAIRMAN, COMMITTEE 

ON AGRICULTURE, NUTRITION, AND FORESTRY 

Chairman LINCOLN. Well, thank you, Mr. Chairman. I certainly 

appreciate all of your hard work and your willingness to hold this 

very important hearing on the Rural Star bill. I do think it is a key 

proposal that will help us immensely in creating jobs and increasing energy conservation. 

I know on the Energy Committee, we found that in our bipartisan energy bill we passed there that the conservation measures 

actually did save as much or more than any of the renewable enerVerDate Nov 24 2008 04:23 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 C:\DOCS\66271.TXT MICHA
10 

gies we produced and initiated. And so conservation is such a critical part of the overall equation. 

But it does all of those things, all the while lowering utility bills 

for rural families. And having lived out on that rural county road 

myself, I know how important that is to the families, the hardworking families that live out there. 

So creating this rural retrofit program is a partnership, which I 

am all about partnerships with the rural co-ops and will only enhance its success as a partnership, I think, and I am very grateful 

to you for that. 

I am very proud to be a cosponsor of this Rural Star legislation 

that will help put Arkansans back to work and help consumers 

save on their energy costs, and I think, ultimately, those really do 

meet so many of the goals and aspirations we have in moving ourselves from an old energy economy to a new energy economy, obviously to not only improve in terms of our conservation and environment, but also in terms of consumers and what we can do for them. 

There is a company with a demonstrated record of success in 

working with our co-ops as well as employing Arkansans and it is 

one of our good corporate citizens in Arkansas, Rheem. I am 

pleased that they are represented with a witness here today. 

Rheem employs about 1,300 individuals at its Fort Smith, Arkansas, facility and the head of their Air Conditioning Division in Fort 

Smith is Bill Hanesworth, who is here on their behalf today. 

Mr. Hanesworth, I did want to welcome and make sure I gave 

him a good Arkansas welcome so he felt at home here at the Agriculture Committee and before your subcommittee, Mr. Chairman, 

and I look forward to his testimony and all of the other testimony 

here. But just to say that Rheem has been a wonderful corporate 

citizen in our State, not only in terms of employing, but also in 

terms of looking at innovative ways to work with both the electric 

co-ops and certainly in terms of energy efficiency in the manufacturing products that they produce. 

So we are excited about all that and certainly excited about you 

having this hearing and grateful to you for doing that today. So 

thank you very much. 

Senator BENNET. Thank you, Chairman Lincoln. And as you 

know, but Mr. Hanesworth might not, my wife is from Marianna, 

Arkansas, so there is a lot of Arkansas at the subcommittee today. 

So we will now welcome the final panel, Kent Singer, Executive 

Director of the Colorado Rural Electric Association, and William 

Hanesworth, Vice President and General Manager of Rheem Air 

Conditioning Division, Fort Smith, Arkansas. 

Kent Singer is the Executive Director of the Colorado Rural Electric Association. Previously, Kent was CREA’s General Counsel 

since 1996 and has operated a successful law practice representing 

electric cooperatives in Colorado. In addition to representing 

CREA, he has been the Corporate Counsel for Tri-State Generation 

and Transmission Association, General Counsel for Holy Cross 

Electric Association, and counsel for Western United Electric Supply Association. 

Bill Hanesworth is Vice President and General Manager of 

Rheem Manufacturing Company’s Air Conditioning Division. He 

has served in that position since 2007. 

11 

Thank you both—thank you both for traveling all the way from 

your home States to be here today and for the important work that 

you do. 

Once again, we would like to keep the remarks to about five minutes, and Mr. Singer, why don’t you go ahead and start. 

STATEMENT OF KENT SINGER, EXECUTIVE DIRECTOR, 

COLORADO RURAL ELECTRIC ASSOCIATION 

Mr. SINGER. Thank you very much, Mr. Chairman. It is a pleasure to be here. Thank you, Senator Lugar. It is an honor to appear 

before you this morning and I thank you for inviting me to provide 

the views of the Colorado Electric Cooperatives on S. 3102, the 

Rural Energy Savings Program Act. 

CREA, the trade association that I represent, is a nonprofit 

group that represents the interests of Colorado’s 22 electric distribution cooperatives as well as Tri-State Generation and Transmission Association. Tri-State is the power supplier for 18 of Colorado’s electric co-ops. The remaining four co-ops receive their power 

supply from Xcel Energy in Colorado. 

Colorado’s electric co-ops provide electric service to approximately 75 percent of the land area of Colorado and approximately 

25 percent of all electricity consumers in Colorado. Colorado’s electric co-ops average about seven customers per mile of line and they 

serve some of the most economically challenged communities in 

Colorado. Many of our co-ops also serve territory that is some of 

the most challenging in the United States in terms of the terrain 

and the weather conditions. 

Electric co-ops in Colorado and across the country have a 

straightforward mission: To provide reliable electric service at the 

lowest cost possible. Electric co-ops are nonprofit, member-owned 

utilities, and they were created not to make a profit for shareholders, but to provide affordable and reliable electricity to their 

member owners. 

In that spirit, Colorado’s electric co-ops have for many years provided information and advice to their member owners to help them 

manage their energy bills. This includes programs and incentives 

for their member owners to use electricity in an efficient and cost 

effective manner. These programs include rebates for energy efficiency appliances, time of day rates to encourage off-peak usage, 

and in some cases, direct loans for energy efficiency improvements. 

Tri-State, the power supplier for 18 of our co-ops, has an Energy 

Efficiency Credits Program which provides cash rebates for efficient 

lighting, heating, and cooling systems, as well as for high-efficiency 

motors. This program has reduced overall demand in Colorado by 

75 megawatts and waved approximately 80,000 megawatt hours of 

energy since its inception. 

CREA believes that S. 3102, the Rural Energy Savings Program 

Act, is another tool that co-ops can use to enable their customers 

to maximize energy efficiency. The bill authorizes an on-bill financing program that allows co-op members to borrow money from the 

co-op for energy efficiency improvements at their homes and businesses and to pay back those loans through their monthly electric 

bills. 

12 

The program is a model of simplicity. Co-ops would be authorized 

to borrow no-interest funds from the RUS and in turn make lowinterest loans, not to exceed three percent, to their residential or 

business consumers for the sole purpose of improving the energy efficiencies of those residences or businesses. No loan funds would be 

approved until an energy audit is performed by the co-op, an application for funds is approved by the RUS, and the project is completed in accordance with the plans contained in the application. 

The Act requires that energy efficiency loans have a payback period of no more than ten years. This means that the savings to customers related to the energy efficiency improvement projects must 

be more than the amount of the loan and that customers will be 

able to repay the loan from those monthly savings on their energy 

bill. It also means that if the projects are not cost effective within 

a ten-year period, they will not be funded, and such a limitation, 

we believe, will put pressure on some energy efficiency technologies 

to bring costs down. 

The program is designed also to minimize the impact on the Federal budget because it is primarily a loan program, not a grant program, and it requires repayment of loans to the Federal Government. The program does have a small grant component that enables co-ops to receive up to four percent of the loan amount in 

order to offset the up-front costs of initiating the program. 

The program will also use the existing infrastructure at the RUS 

and the RUS loan protocols to evaluate loan applications, obligate 

funds, and advance them to the co-ops. The co-ops already have the 

billing capabilities and the consumer relationships that will enable 

them to deliver and administer the loans to their consumers. 

The loan funds will not cover the entire cost of the program, however, because individual co-ops will incur certain costs to administer the program. The program is voluntary and individual co-ops 

will have to determine whether there is a need in their community 

that could be addressed with funds from the program. 

CREA supports the bill because we believe there are co-op members in Colorado, as the Chairman has observed, that would benefit 

from energy efficiency improvements on their homes and who cannot afford to make the initial up-front investment in these improvements. The average initial costs of energy efficiency upgrades has 

deterred many co-op customers from making much-needed energy 

efficiency improvements. By providing low-interest funds, the Act 

would benefit rural Colorado by making homes and businesses 

more comfortable and energy efficiency and it would also create 

much-needed jobs in rural communities. 

I thank you today for the opportunity to speak to you and I 

would be glad to address any questions you may have. 

[The prepared statement of Mr. Singer can be found on page 36 

in the appendix.] 

Senator BENNET. Thank you, Mr. Singer. I do have a couple of 

questions. I wanted to start where you ended, which is could you 

share with the committee and the staff what kinds of energy efficiencies you think exist in our rural communities in Colorado and 

what are the kinds of things that your customers would do if they 

had access to this kind of on-bill financing? 

13 

Mr. SINGER. Yes, Mr. Chairman. As to the first part of your question, as far as energy efficiencies and the co-op system generally, 

you can really go from the first part of where energy is generated 

at the power plants to the transmission lines to the distribution 

system. So there are many sources of efficiencies along the entire 

stream of producing power. Both the G&T and the distribution coops have many investments that they could make to improve efficiencies. 

At the end of the line for the distribution customers, the ones 

who pay the bill, I think in Colorado, our experience is that they 

are very interested in trying to find ways to reduce their monthly 

bill and our co-ops are fully engaged in promoting programs to help 

them do that. That is a tradition in the co-op program, is for our 

members, our managers, our directors, to find ways to help those 

folks at the end of the line. We don’t have a profit motive. We are 

nonprofit entities. We are simply interested in providing reliable 

service at a low cost. 

So our co-ops, both the G&T and the distribution co-ops, have 

programs in place today. We feel, though, that this would be a 

more comprehensive program that would provide a pool of funds 

and a process that would ramp up that effort. And in Colorado, I 

believe there are many co-ops who are anxious to get underway 

and try to benefit their customers at the end of the line. 

Senator BENNET. Thank you for that, and I am going to go to Mr. 

Hanesworth, so I am going to hold my other questions. I don’t 

know, Senator Lugar, whether you would like to wait or—— 

Senator LUGAR. I will wait until he is finished. 

Senator BENNET. Okay. Mr. Hanesworth. 

STATEMENT OF WILLIAM HANESWORTH, VICE PRESIDENT 

AND GENERAL MANAGER, AIR CONDITIONING DIVISION, 

RHEEM MANUFACTURING COMPANY, FORT SMITH, ARKANSAS 

Mr. HANESWORTH. Good morning, Chairman Bennet, Ranking 

Member Thune, and members of the subcommittee. Thank you for 

the opportunity to speak about the Rural Energy Savings Program 

Act. My name is Bill Hanesworth and I am Vice President and 

General Manager of Rheem Manufacturing Company. Rheem is a 

leading global producer of water heaters, air conditioners, furnaces, 

pool heaters, and boilers, and from our headquarters in Atlanta, we 

are proud to be a significant manufacturer and employer of thousands of people and market participant in the United States. 

I lead our Air Conditioning Division, which is based in Fort 

Smith, Arkansas, and I especially wish to acknowledge Chairman 

Lincoln. We thank Senator Lincoln for her exceptional leadership, 

work, and support of our ability to compete in a rural America. 

The bill would really help the people who work in our plant and 

similar jobs across the United States. The Fort Smith plant was 

completed in 1970 and is the home for more than 1,300 employees 

and many members of rural co-ops across Arkansas. It is where 

Rheem designs its gas furnaces, advanced electronics, condensing 

units, electric heat pumps. It is also where Rheem designs and 

manufactures its residential and commercial heating and cooling 

products. 

14 

The important legislative proposal before us known as the Rural 

Energy Savings Program Act would help support demand for the 

work of our Fort Smith team and other facilities across the country, enabling our dedicated employees to continue to design and 

build products to compete in a global marketplace. 

Since our founding by the Rheem brothers in California in 1925, 

we have provided good manufacturing, research, and development 

and distribution jobs across this country. Rheem is an innovator 

and consistently designs increased efficiency into its products. In 

fact, Rheem invented the first tank water heater used in the 

United States. As a result, we are very interested in legislation and 

government programs which incentivize the reduction of energy 

costs and increase the demand for energy efficiency products. 

We believe the Rural Energy Savings Program Act, in particular, 

is critically important because it lowers the cost of barriers for consumers to invest in energy efficient program solutions and to do so 

in partnership with rural co-ops, which will only enhance the program’s success. 

Rheem is proud to have substantial experience working with coops to offer its water heaters, air conditioners, furnaces, and heat 

pumps to the American public. Presently, we partner with nearly 

300 co-ops across the country and we work hard to bring energy 

efficient products to meet the demands of those customers. 

One such product is a unique rust-proof water heater which we 

appropriately call the Marathon. With a lifetime tank warranty, it 

is a popular product among co-ops, because in rural America, the 

water quality may not always be what would be optimal. The Rural 

Energy Savings Program would enable consumers to realize significant lifetime savings by lowering their ongoing energy expenses 

and by smoothing out the up-front cost of the kind of durable and 

efficient water heaters which we design in Alabama and manufacture in Minnesota, the home State of Senator Klobuchar, and we 

appreciate her support. 

As you know, the availability of low-interest financing through 

co-ops would allow homeowners and small businesses to more readily afford energy efficient products. Generally, consumers’ heating 

and cooling and water hearing bills represent the majority of their 

energy spend, which was mentioned earlier today. We at Rheem 

take this seriously and consistently work to reduce energy costs for 

the consumer. 

Your constituents really need this bill. The economy has been especially hard on those, especially whose access to credit has been 

substantially curtailed in recent years. Therefore, it is important 

that the government find innovative public solutions and avenues 

to keep people working and the money in their pockets. 

This Act encourages and assists consumers to purchase better 

products that will reduce their energy costs and improve their 

quality of life. I commend this subcommittee for considering it 

today. The legislation will benefit consumers in the program and 

our country as a whole. The policy will improve our country’s carbon footprint. It will reduce the cost of operation for small businesses. It will enable consumers to save money and have access to 

affordable credit. And it will support job creation, a critical point 

in our economic recovery. 

15 

In the words of Chairman Bennet, this bill would help rural 

economies recover by creating thousands of good-paying jobs in Colorado and across the country. Additionally, cosponsor Senator 

Lindsey Graham described the bill as a plan that will help consumers, particularly those in rural areas of the State and nation, 

become more energy efficient and lower their electricity cost. 

Picking up on Senator Graham’s point, we at Rheem especially 

are proud of the relationship with McCall’s Distribution Company 

in South Carolina, which represents the very constituency to whom 

this legislation is directed. We could not agree more with Senators 

Bennet and Graham and strongly encourage Congress to move forward to establish the Rural Energy Savings Program. 

In closing, I would like to note the committee has been writing 

agriculture policy for over 200 years. Throughout its history, members of this body have tackled critical energy and rural development issues. This is another such important initiative. We are 

hopeful this bill can become law and provide energy conservation 

incentives, economic growth, and savings to rural America. 

Toward that end, we look forward to working with you and thank 

you for the opportunity to speak with you today, and I welcome any 

questions that you may have. 

[The prepared statement of Mr. Hanesworth can be found on 

page 31 in the appendix.] 

Senator BENNET. Thank you. Thank you for your excellent testimony, both of you. You both came in at exactly five minutes, so we 

appreciate that, I have to say. 

[Laughter.] 

Senator BENNET. I also want to say to Mr. Singer how much I 

appreciate your characterization of this bill, as you did in your testimony, as a model of simplicity. I can’t tell you what high praise 

that is in this place, in particular, to hear those words. 

You did mention in your testimony that there might be some increased administrative costs as a result of this, and I wonder 

whether you have got some suggestions today about how we might 

be able to help with that, or if anything occurs to you going forward, we certainly would like to hear that because we want to 

make this as user friendly as possible. 

Mr. SINGER. And I appreciate that, Mr. Chairman. I don’t have 

any specific recommendations. I think the point I was trying to 

make is that although the government is funding this program, or 

would be if the Act passes, the co-ops still would have some skin 

in the game. 

Senator BENNET. Right. 

Mr. SINGER. They have to make a commitment to this, and 

whether that is by having some additional contract folks or others 

to administer the program, there is some expense. They have a 

commitment to it. And so I am just trying to make the point that 

it is not just a free ride for the co-ops. 

Senator BENNET. Right. 

Mr. SINGER. They will have to invest in this, as well. 

Senator BENNET. And it is voluntary, as well. 

Mr. SINGER. That is correct. Yes. 

Senator BENNET. A question for both of you to share with the 

committee and with the staff. What kinds of changes and investVerDate Nov 24 2008 04:23 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 C:\DOCS\66271.TXT MICHA
16 

ments would you expect typical rural homeowners to make if they 

had the support of a loan like this? What are the things that they 

wish they could do today but aren’t doing because they can’t incur 

the up-front expense? Either one. Mr. Hanesworth, would you like 

to start? 

Mr. HANESWORTH. Recently, especially in the last few years, one 

of the biggest obstacles to having people upgrade their systems has 

been the lack of affordable credit. When the credit market collapsed, it really changed the way people qualified for loans and 

their ability to upgrade. In the last two or three years, people chose 

to repair and fix, and repaired units that may be ten, 15 years old, 

that aren’t very efficient, and they are continuing to do that because they can’t get the funds. 

Our experience over the last year with some of the policies that 

the tax credits and things have spurred some of these systems. At 

the end of the day, they have to keep them running. Again, these 

are families who have been hurt specifically harder, I think, than 

most of the economy because they are in manufacturing jobs, two 

household incomes, and they are doing everything they can to get 

by. I think this plan with low interest will allow them to do upgrades. 

Mr. SINGER. And, Mr. Chairman, I would just add that in terms 

of the funding for the program, there have been studies conducted. 

There was a University of California study about a year ago that 

identified certain barriers to investments in energy efficiency. It is 

an excellent study, came out about a year ago. And one of them, 

of course, is the access or the availability of up-front funds to do 

the work, and that is what this bill goes to. 

Another point I would like to make is that some of the energy 

efficiency programs around the country have had limited success 

because of the credit limitations that are put on some of the borrowers. I think this program has adequate flexibility to allow these 

co-ops to determine which of their customers are able to repay 

these loans, and they can do that by evaluating their payment history for their bills. So it is, I think, an easier program to apply for, 

in many cases, for low-income folks in our service territory, in particular. 

Senator BENNET. I think that is actually a very important point, 

to. What this bill does is rely on the expertise of our rural co-ops 

to establish those kinds of questions rather than setting the rules 

ourselves. I think that is an important step forward. 

I wonder, and then I will stop, whether either of you can give us 

a sense of the kinds of savings that a family that is able to install 

that new boiler or able to install that new HVAC system would be 

able to realize as a consequence of this. I assume, Mr. Hanesworth, 

that is part of how you market what you sell, is you say to people, 

you are making an investment now, but it is going to pay off in 

savings later. 

Mr. HANESWORTH. Right, Senator. Well, obviously, it depends on 

the consumer and how they apply the product and the age of the 

product that they are changing out. But in a typical very high efficient system, they could save up to 40 percent on their heating and 

cooling bill based on what they chose to put in. Again, a lot of it 

has to do with the way they operate the system, the insulation, 

17 

windows, and things in their house. But there are some significant 

savings that go along with this, would more than probably offset 

the monthly payment on an electric bill. 

Mr. SINGER. I would just echo that that is one of the conditions 

of the program, in fact, that the co-op identify that those savings 

can be made. It is difficult to precisely quantify how much, but 

hopefully, you are looking at in the magnitude of hundreds of dollars, which will enable folks to repay these loans and still be saving. So it is going to be a case-by-case analysis, but the bill is premised on the fact that those technologies are cost effective and the 

loans won’t be made unless they are. 

Senator BENNET. Thank you. 

Senator Lugar, I want to thank you for coming and staying. Do 

you have questions for the panel? 

Senator LUGAR. I would just like to follow through on your question, Mr. Chairman. Just as a practical matter, you have mentioned a water heater might be replaced and windows might be replaced. I want to get your view as to really, as a homeowner looks 

at his or her home, do you have sort of a list of things that might 

be looked at? 

I ask it from this standpoint. A lot of people read generally about 

energy savings but are not necessarily sophisticated enough to understand specifically what items in the house, or one by one, you 

might take up. Would co-ops have, let us say, an inventory or a list 

of suggestions for this? 

What I fear is that even though the program might be out there, 

unless there is considerable publicity about this and suggestions to 

individual families as to how this might be important, still taking 

on a loan or a responsibility, or getting involved with an analysis 

of your light bills and so forth may be daunting to many persons 

who may sort of remain back there as opposed to stepping forward. 

What kind of literature or lists or what have you might be available? 

Mr. SINGER. Senator, to your question, it is a great point. You 

are exactly right. If there is not an adequate communication program by the co-op, then the program won’t succeed. There has got 

to be an adequate communication program. I think that is one of 

the hallmarks of the co-op program, though, is that our utilities 

have a unique relationship with our customers. 

All our co-ops have webpages today. You can go on just about 

any co-op webpage and it will list all of the things you can do to 

save money on your energy bill. Similarly, I am sure that is a 

methodology that would be used to advertise how this program 

works. And, in fact, the bill requires that the co-op develop what 

is the list of technologies, what are the steps you could take to reduce your energy costs. So I think the bill recognizes the point you 

are making. 

Mr. HANESWORTH. I might dovetail on that, also, Senator. We develop a lot of tools for consumers. One of those is when a consumer 

is ready to make a decision on an air conditioning, heating system, 

or water heater, we have programs that allow them to go in and 

take information about their home and they can actually project 

what their savings are. Some people can’t overbuy and it helps 

them really direct what they are capable of spending and demVerDate Nov 24 2008 04:23 Jul 28, 2011 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 C:\DOCS\66271.TXT MICHA
18 

onstrates to them what they might save over the period of a lifetime. 

So there are a lot of tools there that help them make decisions 

and I am sure that the co-ops are using those tools to help those 

consumers make good decisions about their purchase. 

Senator LUGAR. Let me ask how much money a co-op might be 

prepared to loan to a specific consumer. Let us say that a consumer 

is really stimulated by all of this, so the consumer says, well, I am 

going to fix simultaneously my air conditioning, my water heater, 

my windows, the whole lot. And so this now is up to a sizeable 

loan. The co-op determines that each one of these investment is 

going to have an excellent return which meets the requirements of 

the program, but is a measurement on the basis of the total income 

of the consumer, the value of the property, or how do you determine the extent of the loan? 

Mr. SINGER. I think that the analysis that we have done shows typical loan amounts of perhaps $1,500 to $5,000 or $6,000 or 

$7,000. I think what you are describing perhaps might exceed that, 

if someone wanted to retrofit many systems in their home. I do 

think the bill allows sufficient flexibility for a co-op to manage the 

loan program in the way it sees fit. So I think there is a range that 

would be typical. I suppose on a case-by-case basis, there might be 

a higher amount loaned. 

Senator LUGAR. But the co-op would make its judgment on the 

basis of knowledge of this homeowner and potential net worth or 

supposed ability to repay? 

Mr. SINGER. And the audit that they would conduct to determine 

which of those technologies is, in fact, cost effective. It may be that 

not all of them are and they would tell the consumer, no, you can’t 

do that part of your project, but you can do these other parts. So 

it is a relationship between the co-op and their customer. 

Senator LUGAR. And I think as the hearing has displayed, there 

really is no arbitrary limit on this, that this is really left to the 

judgment of the co-op—— 

Mr. SINGER. That is correct. 

Senator LUGAR. —as opposed to the language in the bill, which 

is probably important, too, that arbitrarily it has not been cut off. 

Mr. SINGER. Correct. 

Senator LUGAR. Finally, I would just ask, what kind of reception 

have you experienced either as a manufacturer of the material or 

as a co-op up to this point with potential consumers? Is this something that has attracted their interest, or is this something that is 

enthusiasm of members of the Senate and our witnesses today in 

which we try to project this? I am not denigrating it. That may be 

important, that somehow or other we become more vitalized in 

America to save energy. But I am just curious what sort of possibilities you see out there now. 

Mr. SINGER. From the co-op perspective, I think there is a great 

amount of interest, I know in Colorado, with consumers in finding 

ways to be more energy efficient, both from a pure cost standpoint 

and from the standpoint that folks understand, I think these days, 

what the implications are for having to build more power supply 

to the environment. And many, many customers in Colorado want 

to invest in these kinds of programs for both of those reasons. 

19 

So I believe that they have shown a great interest in the past 

in existing programs, and with this kind of a new program that I 

think is going to be more widely available, I think that they will 

take advantage of it very quickly. 

Mr. HANESWORTH. And I would agree with that. I think the interest demonstrated by the tax incentives that were put out in the 

last 18 to 24 months, we saw a significant shift to energy efficiency 

equipment in our portfolio of products. Again, one of the limitations 

was based on the ability to qualify for loans, so they chose to repair 

versus replace. 

The interest grows every year. In fact, as a manufacturer, and 

most manufacturers are running incentive programs on their own 

where they will pay up to $1,200 of their own money in rebates and 

things to go on top of low interest and go on top of the tax incentives to generate high efficiency sales. So it is growing demand. 

People are more and more aware. And clearly, it is the way people 

want to move going forward. 

Senator LUGAR. Thank you very much. 

Senator BENNET. Thank you, Senator Lugar. 

I have just one last question. We focused very much on savings 

in this discussion and in the energy conservation. There is also the 

real possibility that these improvements would actually enhance 

the value of homes, as well, isn’t there, in rural communities? 

Mr. SINGER. Yes. I think that is clearly true, that if a consumer 

who invests in one of these projects decides to sell their property 

and they have got a well-insulated home that has the newest, most 

efficient heating and cooling technologies, certainly you are correct. 

That is going to be a selling point if they decide to move and sell 

that property. 

Senator BENNET. Well, I would like to thank all of the witnesses 

on all of the panels. Thank you, Senator Lugar, for being here 

today and for all your testimony before the committee and for 

working together to bring real energy savings to rural Americans 

nationwide. 

I would also like to say a final thank you to Chairman Lincoln 

and her staff for their assistance in putting this hearing together 

today. It is a real testament to the support that this bill has that 

Chairman Lincoln was here and we deeply appreciate her taking 

the time to be here. 

With that, the hearing of the Senate Agriculture Committee’s 

Subcommittee on Energy, Science, and Technology is adjourned. 

[Whereupon, at 10:28 a.m., the subcommittee was adjourned.] 

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