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BUDGET AND SPENDING CONCERNS AT DOE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

APRIL 18, 2012 

Serial No. 112–137 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chairman 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

CLIFF STEARNS, Florida 

Chairman 

LEE TERRY, Nebraska 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

CORY GARDNER, Colorado 

H. MORGAN GRIFFITH, Virginia 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

DIANA DEGETTE, Colorado 

Ranking Member 

JANICE D. SCHAKOWSKY, Illinois 

MIKE ROSS, Arkansas 

KATHY CASTOR, Florida 

EDWARD J. MARKEY, Massachusetts 

GENE GREEN, Texas 

CHARLES A. GONZALEZ, Texas 

DONNA M. CHRISTENSEN, Virgin Islands 

JOHN D. DINGELL, Michigan 

HENRY A. WAXMAN, California (ex officio) 

(II) 

(III) 

C O N T E N T S 

Page 

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 3 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 7 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 8 

Prepared statement .......................................................................................... 10 

Hon. Marsha Blackburn, a Representative in Congress from the State of 

Tennessee, opening statement ............................................................................ 12 

Hon. Diana DeGette, a Representative in Congress from the State of Colorado, opening statement ...................................................................................... 12 

Hon. Donna M. Christensen, a Representative in Congress from the Virgin 

Islands, opening statement ................................................................................. 13 

WITNESSES

Franklin Rusco, Director, Natural Resources and Environment, Government 

Accountability Office ............................................................................................ 14 

Prepared statement .......................................................................................... 17 

Answers to submitted questions ...................................................................... 119 

Gregory H. Friedman, Inspector General, Department of Energy ...................... 39 

Prepared statement .......................................................................................... 41 

Christopher Johns, Director, Office of Budget, Department of Energy .............. 59 

Prepared statement .......................................................................................... 61 

Insert for the record ......................................................................................... 75 

Answers to submitted questions ...................................................................... 122 

SUBMITTED MATERIAL

Executive Order 13589, dated November 9, 2011, Federal Register, November 

15, 2011, submitted by Mr. Stearns ................................................................... 90 

Article, dated April 13, 2012, ’’Analysis: Obama’s ‘green jobs’ have been slow 

to sprout,’’ Reuters.com, submitted by Mr. Stearns .......................................... 92 

Supplemental Memorandum, dated April 18, 2012, ‘‘Supplemental Information on the House Republican Budget’s Cuts to DOE Clean Energy Programs,’’ from Mr. Waxman and Ms. DeGette to subcommittee members, 

submitted by Mr. Waxman .................................................................................. 96 

Report, dated January 31, 2012, ‘‘Report of the Independent Consultant’s 

Review with Respect to the Department of Energy Loan and Loan Guarantee Program, submitted by Mr. Stearns 1 ...................................................... 111 

Letter, dated April 27, 2012, from Mr. Johns to Mr. Stearns, submitted 

by Mr. Stearns ...................................................................................................... 114 

1The information is available at http://www.whitehouse.gov/sites/default/files/ 

docs/reportlonldoelloanlandlguaranteelportfolio.pdf. 

(1) 

BUDGET AND SPENDING CONCERNS AT DOE 

WEDNESDAY, APRIL 18, 2012 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 10:40 a.m., in room 

2322 of the Rayburn House Office Building, Hon. Cliff Stearns 

(chairman of the subcommittee) presiding. 

Members present: Representatives Stearns, Blackburn, Bilbray, 

Scalise, Griffith, Barton, DeGette, Castor, Christensen, and Waxman (ex officio). 

Staff present: Carl Anderson, Counsel, Oversight; Sean Bonyun, 

Deputy Communications Director; Andy Duberstein, Deputy Press 

Secretary; Todd Harrison, Chief Counsel, Oversight and Investigations; Krista Rosenthall, Counsel to Chairman Emeritus; Alan 

Slobodin, Deputy Chief Counsel, Oversight; Samuel Spector, Counsel, Oversight; Roger Stoltz, Government Accountability Office 

Detailee, Oversight; and Alex Yergin, Legislative Clerk; Kiren 

Gopal, Democratic Counsel. 

OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

Mr. STEARNS. Today, we will examine the adequacy of the Department of Energy’s implementation of the President’s promise to 

conduct a ‘‘line-by-line’’ review of the Federal budget. At this time 

of financial distress, the goal of this pledge must be to eliminate 

unnecessary, duplicative, or wasteful government programs to cut 

costs and do more with less. This hearing aims to determine the 

results of the DOE’s efforts to cut spending and to help DOE find 

more spending cuts and savings. 

Over the past year and a half, this Subcommittee has conducted 

rigorous oversight of the programs administered by DOE, including 

those that received a boost in funding under the Recovery Act. 

From the Solyndra debacle and the Loan Guarantee Program to 

DOE’s role in the Section 1603 program, this Subcommittee has 

been seeking transparency and accountability in DOE’s Recovery 

Act spending. 

The American people feel the pain at the pump, as I am sure 

many members are hearing directly from their constituents every 

day. The average national price of gasoline—regular gasoline—is 

nearly $4. Compounding this pain, DOE, the custodian of literally 

billions of dollars in Recovery Act funding, has all too often taken 

its eye off job creation, drawn instead to high risk ventures with 

2 

known questions over commercial viability. Rather than gambling 

in the casino of risky green energy investments, DOE should be 

using taxpayers’ dollars prudently to help get Americans back to 

work, while assuring them reliable access to affordable energy. The President’s fiscal year 2013 budget requests $27.2 billion for DOE, roughly $856 million, or 3.2 percent increase, over the past 

fiscal year 2012 enacted level. To put this in context, this is up 

from a departmental budget of about $17 billion in the year 2000, 

just over a decade ago, and reflects an increase of about 60 percent. 

This, of course, does not include the $35 billion that DOE has received under the Recovery Act in recent years. DOE at present is 

an agency of nearly 15,000 Federal employees, and 100,000 contractors. An Inspector General’s report on management challenges 

from last year discusses options to achieve operational efficiency 

and cost savings at the DOE. While DOE has undertaken a number of new management initiatives intended to increase operational 

efficiency, much more obviously needs to be done. 

Some of the Recovery Act’s most costly programs are DOE-administered programs; however, criminal investigations, poor performance, and reported waste have been the hallmarks of the Loan 

Guarantee Program, Advanced Research Project Agency—Energy, 

the Weatherization Assistance Program and the Advanced Technology Vehicles Manufacturing loan program, according to the IG 

and GAO. This committee, along with the IG and GAO, will continue to work at keeping these programs functioning as Congress 

intended, while operating at not one penny above what is required 

to fulfill their core missions. This committee must remain deeply 

and regularly engaged with the agencies within its jurisdiction, including DOE, as they define their priorities, identify their needs, 

and set their goals for the year ahead. 

So my colleagues, today we will look at the actual results of the 

DOE’s efforts to meet the President’s pledge to comb through the 

Federal budget and cut spending. The committee has learned, for 

example, that DOE chose not to heed the President’s April 2009 

order to cabinet secretaries to identify a combined $100 million in 

budget cuts by July 2009. GAO has also recently identified 700 renewable energy initiatives across the Federal Government, 92 of 

which are housed at DOE. At a time when the President is requesting an increase in funding for DOE’s renewable energy programs, 

can anyone at DOE certify that there is no redundancy among 

these 92 initiatives? 

To learn more about DOE’s efforts, we will take testimony today 

from the Director of the Office of Budget at DOE, Chris Johns; the 

Inspector General of DOE, Gregory Friedman; and Director of Natural Resources and Environment at GAO, Frank Rusco. These individuals, and their staffs, have conducted rigorous oversight and audits of EPA for many years, so I welcome our witnesses this morning. 

This Subcommittee, and the committee as a whole, have no more 

crucial task, my colleagues, than to work with agencies such as the 

Department of Energy to ensure that they have the tools they need 

to realize the aims for which they have been authorized to expend 

a finite set of Federal resources. 

[The prepared statement of Mr. Stearns follows:] 

3 


78727.001

Opening Statement of the Honorable Cliff Stearns 

Chairman, Subcommittee on Oversight and Investigations 

"Budget and Spending Concerns at DOE" 

April 18, 2012 

722 words 

We convene this hearing, the third in our series of oversight hearings on the 

federal budget. Today we will examine the adequacy of the Department of 

Energy's implementation of the President's promise to conduct a "line by line" 

review ofthe federal budget. At this time of financial distress, the goal of this 

pledge must be to eliminate unnecessary, duplicative, or wasteful government 

programs, to cut costs, and do more with less. This hearing aims to determine the 

results of DOE's efforts to cut spending and to help DOE find more spending cuts 

and savings. 

Over the past year and a half, this Subcommittee has conducted rigorous 

oversight of programs administered by DOE, including those that received a boost 

in funding under the Recovery Act. From the Solyndra debacle and the Loan 

Guarantee Program to DOE's role in the Section 1603 program, this Subcommittee 

has been seeking transparency and accountability in DOE's Recovery Act 

spending. 

Page 1 of 4 
4 


78727.002

The American people feel the pain at the pump, as I'm sure many members 

are hearing directly from their constituents. The average national price of a gallon 

of regular gasoline is nearly $4. Compounding this pain, DOE, the custodian of 

literally billions of dollars in Recovery Act funding, has all too often taken its eye 

off job creation, drawn instead to high-risk ventures with known questions over 

commercial viability. Rather than gambling in the casino of risky green energy 

investments, DOE should be using taxpayer dollars prudently to help get 

Americans back to work while assuring them reliable access to affordable energy. 

The President's Fiscal Year 2013 Budget requests $27.2 billion for DOEan $856 million, or 3.2% increase, over the Fiscal Year 2012 enacted level. To put 

this in context, this is up from a departmental budget of about $17 billion in Fiscal 

Year 2000, just over a decade ago, and reflects an increase of around 60%. This, 

of course, does not include the $35 billion that DOE has received under the 

Recovery Act in recent years. 

DOE, at present, is an agency of nearly 15,000 federal employees and 

100,000 contractors. An Inspector General's report on Management Challenges 

from late last year discusses options to achieve operational efficiency and cost 

Page 2 of4 
5 


78727.003

savings at DOE. While DOE has undertaken a number of new management 

initiatives intended to increase operational efficiencies, much more needs to be 

done. 

Some of the Recovery Act's most costly programs are DOE-administered 

programs. However, criminal investigations, poor performance, and reported 

waste have been the hallmarks of the Loan Guarantee Program, Advanced 

Research Projects Agency - Energy, the Weatherization Assistance Program and 

the Advanced Technology Vehicles Manufacturing loan program, according to the 

1G and GAO. This Committee, alongside the 1G and GAO, will continue to work 

at keeping these programs functioning as Congress intended, while operating at not 

one penny above what is required to fulfill their core missions. 

This Committee must remain deeply and regularly engaged with the 

agencies within its jurisdiction, including DOE, as they define their priorities, 

identify their needs, and set their goals for the year ahead. 

Today, we will look at the actual results of the DOE's efforts to meet the 

President's pledge to comb through the federal budget and cut spending. The 

Committee has learned, for example, that DOE chose not to heed the President's 

Page 3 of4 
6 


78727.004

April 2009 order to cabinet secretaries to identify a combined $100 million in 

budget cuts by July 2009. GAO has also recently identified 700 renewable energy 

initiatives across the federal government, 92 of which are housed at DOE. At a 

time when the President is requesting an increase in funding for DOE's renewable 

energy programs, can anyone at DOE certify that there is no redundancy among 

these 92 initiatives? 

To learn more about DOE's efforts, we will take testimony today from the 

Director of the Office of Budget at DOE, Chris Johns; the Inspector General of 

DOE, Gregory Friedman; and Director of Natural Resources and Environment at 

GAO, Frank Rusco. These individuals, and their staffs, have conducted rigorous 

oversight and audits of EPA for many years. I welcome the witnesses. 

This Subcommittee, and the Committee as a whole, have no more crucial 

task than to work with agencies such as DOE to ensure that they have the tools 

they need to realize the aims for which they have been authorized to expend finite 

federal resources. 

Page 40f4 
7 

Mr. STEARNS. And with that, I recognize—— 

Ms. DEGETTE. I will yield to Mr. Waxman. 

Mr. STEARNS. Yield to Mr. Waxman for 5 minutes. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you, Mr. Chairman, and thank you, Ms. 

DeGette, for allowing me to go ahead with my opening statement 

out of order. I welcome this hearing today. No one, Republican or 

Democrat, should be in favor of wasteful Federal spending. If we 

can identify ways to save money without jeopardizing its mission, 

we all should support those changes. 

At the same time, we also need to recognize the Department of 

Energy has a vital mission in developing new clean energy technologies. Congress should be doing more to support these initiatives. Our economic future depends on building the clean energy industries of tomorrow. 

Unfortunately, the Republican budget that the House passed last 

month is stuck in a fossil fuel past. It would all but wipe out DOE’s 

clean energy initiatives. The Democratic committee staff this morning released a supplemental memo that analyzes the impact of the 

Republican budget on clean energy programs, and I would like to 

ask that this be made part of the record. 

Mr. STEARNS. Mr. Waxman, can we review it first? 

Mr. WAXMAN. Certainly. 

Mr. STEARNS. Yes, your staff will give it to us and then we will 

let you know for sure. 

Mr. WAXMAN. The findings of this memo reveal exactly how 

much damage the Republican budget would do to DOE’s mission of 

developing clean and renewable energy technology. It slashes discretionary spending for energy programs by over 50 percent next 

year. While the Republican budget avoids many of the specifics, we 

need to tally up the damage. It is clear that it targets key clean 

energy initiatives. It repeals funding for the Advanced Technology 

Vehicles Manufacturing Program, a program that helps the auto 

industry to improve the fuel efficiency of cars and develop next 

generation advanced batteries for electric cars. It halts DOE Loan 

Guarantee Programs that are creating jobs and funding innovative 

renewable energy projects like wind farms and geothermal power 

facilities. It eliminates funding the Western Area Power Administration is using to build transmission lines to deliver renewable energy to the places it is needed, like a 725-mile transmission line to 

deliver energy from wind from Wyoming to the Southwest. And 

while the Republican budget calls for massive cuts to important 

clean energy programs, it also protects massive tax breaks for oil 

companies. Under the Republican budget, oil companies earning 

record profits would receive $40 billion worth of tax breaks over the 

next decade. 

American families are struggling at the pump and the Republican solution is to give oil companies earning billions of dollars 

more tax breaks. Think about these priorities. While the rest of the 

world is rushing to develop clean energy sources that protect the 

environment and the health of our children, we are continuing to 

8 

squander taxpayer money on the oil industry. Our climate pays the 

prices well. There was a strong scientific consensus that climate 

change is real and it is happening now, but my Republican colleagues continue to ignore and deny this reality, and passed a 

budget that would only make the problems worse. 

Mr. Chairman, at hearings last month Secretary Chu made the 

compelling economic case for investment in renewable energy, but 

the Republican budget sets our country back decades in the effort 

to develop clean renewable energy technologies that will create millions of jobs and power the economy of the future. The Republican 

vision represents a huge mistake. Our energy future can’t depend 

on outmoded thinking or technologies. 

I want to yield back the balance of my time. I hope at the appropriate time, after the Republican staff has had a chance to review 

our request, that you will make our request for the record into effect. 

Mr. STEARNS. For sure. Gentleman yields back the balance of his 

time, and I recognize the gentleman from Texas, Chairman Emeritus Mr. Barton. 

OPENING STATEMENT OF HON. JOE BARTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. Thank you, Mr. Chairman. Before I give my prepared—— 

Mr. STEARNS. For 4 minutes. 

Mr. BARTON. OK, and then I will give a minute to Ms. 

Blackburn, is that right? 

Before I give my brief statement on this issue, I want to comment on Chairman Waxman’s statement. In spite of all our faults 

with our energy policy, you know, gasoline prices $4 a gallon are 

way too high, but they are less than half what they are in Europe. 

They are a lot less than they are in Japan. Natural gas prices at 

the wellhead are below $2 an MCF. That is lower than they were 

under the 1978 Natural Gas Policy Act that Mr. Waxman and Mr. 

Dingell helped pass that regulated wellhead prices. We have the 

most free market-based, private, incentivized energy sector in the 

world, and because of that, our energy prices are the most competitive in the world. So despite of all our faults, we must be doing 

something right in this country and if the Obama administration 

would get out of the way and allow the private sector to operate 

on Federal lands in an environmentally friendly way, we would do 

even better. 

But today we are here, Mr. Chairman, to look at the Department 

of Energy’s budget. This is a recurring hearing that needs to be 

done. Way back in 1981 and ’82, I was a White House fellow at the 

Department of Energy, and I can’t remember exactly if it was in 

December or January, December of ’81 or January of ’82, but Dave 

Stockman was the Director of the Office of Management and Budget, and Ronald Reagan was President, and the Department of Energy had sent its proposed budget over to OMB for review, and 

OMB had sent it back and said that more needed to be cut. Now, 

this was when the whole Federal budget was less than $100 billion—or less than $1 trillion, excuse me, less than a trillion. And 

I don’t remember what Department of Energy’s budget was then, 

9 

but I am going to say $3 or $4 billion. In any event, the Secretary 

of Energy, James B. Edwards, had a meeting with all of his assistant secretaries. He went around the room and he asked each one 

of them, you know, we have to cut. Can you cut some money? And 

this is the Reagan cabinet. Not one assistant secretary, Mr. Chairman, said they could cut a penny. Not one, not one. And I was a 

White House fellow and I was sitting in the back, and the secretary 

turned to me and he said, well maybe my White House fellow can 

find some savings, and being bright-eyed and bushy-tailed and not 

knowing the difference, I said well, I think I can, I think I can. And 

I will continue that story at the next hearing. I am not going to 

tell you what I did. 

But in any event, today we are here for the same thing. Today, 

the Department of Energy’s budget is much larger than it was way 

back then. They have got $35 billion in stimulus. They are going 

to receive another $27 billion next year in stimulus funding. They 

have a renewable energy program that is in shambles. We all know 

about Solyndra. They have a 1705 Loan Guarantee Program that 

almost every company they have given money to is on the watch 

list. They have got a $10 billion 1603 program for green energy 

jobs. It just goes on and on, and yet as you just pointed out in your 

opening statement, Mr. Chairman, they have not been responsive 

to efforts to cut their budget. Hopefully we can encourage them 

today and find ways across the aisle, on both sides of the aisle, to 

help save some money in the Department of Energy’s budget. 

With that, I want to yield the balance of my time to Mrs. 

Blackburn of Tennessee. 

[The prepared statement of Mr. Barton follows:] 

10 


78727.005

Opening Statement of the Honorable Joe Barton 

Chairman Emeritus, Committee on Energy and Commerce 

Subcommittee on Oversight & Investigations Hearing 

"Budget and Spending Concerns at DOE" 

April 18,2012 

Thank you Mr. Chairman. We are here to examine how much money the 

Department of Energy (DOE) has requested and spent since the passage of the 

American Recovery and Reinvestment Act in January 2009 and determine if 

American taxpayer dollars are being spent in a responsible and productive way. 

The DOE received more than 35 Billion dollars as part of the stimulus and the 

President is requesting the Department receive 27.2 Billion dollars for 2013. 

At a time when the federal government is borrowing over 40 cents of every 

dollar it spends, it is imperative that we maintain oversight of these dollars and 

ensure the public that this money works for them to help our economy, create jobs, 

reduce our dependence on foreign oil, and increase our energy independence. 

Under the current Administration's leadership at DOE: we have two 

bankrupt green energy companies that received nearly 600 million dollars under 

the 1705 loan guarantee program and several more companies are now in trouble 

and on a "watch list", we have the President asking Congress to double down on 

his 10 Billion dollar 1603 program that he claims created thousands of green jobs, 

but which exact numbers cannot be validated, we have billions of dollars being 

invested in electric batteries for cars, a technology that has failed in the 
11 


78727.006

marketplace for over a 100 years, we have Billions sitting in unobligated funds ... l 

think it is fair to say we are not being responsible and efficient with this money, 

money that I would like to remind the Administration and the DOE comes from 

hard working American taxpayers. 

The DOE Budgets for 2009 to 2012 range from $25 to $29 Billion, the DOE 

received over $35 Billion in stimulus funds, and is requesting over $27 Billion for 

2013. This adds up to approximately 170 Billion dollars to the DOE in just 5 

years. It is our job to ask the witnesses testifying today if the core mission ofthe 

DOE warrants such an expense, if the programs being funded are performing 

adequately, where and how the DOE can manage their funds better and if sufficient 

oversight of DOE spending is being perfonned. 
12 

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE 

Mrs. BLACKBURN. I thank the gentleman from Texas for yielding. 

We welcome all of you here, and I think many of us are looking 

for ways to make certain that the taxpayer dollar is well-tended, 

and that they feel like they are getting some value from the Federal Government. All too many people do not think that way. Now, your budget has increased $10 billion over the past 10 

years, and this is a lot of money. The President’s addendum to the 

budget with cuts, consolidations, and savings calls for $467 million 

in cuts, and $249 million in savings from DOE, so I have introduced a bill to Consolidate Heavy-Handed and Outdated Program 

Act—we call it the CHOP Act. We are doing this because there are 

problems with loans. We do feel like the EPA and DOE could be 

combined into one department called the Department of Energy 

and Environment, and we think that there is misplaced priorities 

and misguided activity at DOE and EPA. Our goal is to help save 

some of this money and to help get this department on the right 

track. 

Priorities are reflected in your budget. They are reflected in your 

time management. It is no secret that we all have concerns and we 

have those concerns based on what we see and wanting what is 

best for our Nation. I yield back. 

Mr. STEARNS. Gentlelady yields back. We recognize the ranking 

member from Colorado, Ms. DeGette, for 5 minutes. 

OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO 

Ms. DEGETTE. Thank you very much, Mr. Chairman. This is the 

third detailed budget hearing we have had on the DOE budget 

spending decisions this Congress, and I hope it is productive because I am just as interested in wiping out waste and mismanagement at DOE or at any agency as anybody else on this committee. 

So I just want to say one thing as this hearing starts. It is important to maintain a sense of perspective, because DOE does have 

some good news. DOE’s Recovery Act clean energy initiatives funded over 20,000 projects nationwide through tax cuts or cash assistance for clean energy manufacturing and production, and with Recovery Act funding, DOE reduced the Nation’s nuclear waste footprint by 69 percent, or 641 square miles. The Weatherization Program helped more than 650,000 low income families improve their 

home’s energy efficiency and save money over energy bills, and the 

DOE Loan Guarantee Program supported over 60,000 jobs, and the 

Recovery Act supported thousands more, helping most of America 

get through this bad recession. And also contrary to what Ms. 

Blackburn said, during the Bush administration the core DOE 

budget increased by 16 percent. During the Obama administration 

from fiscal year 2009 to 2012, the core DOE budget, not including 

the stimulus funds I just talked about, decreased by 22.18 percent. 

So it is important to put that into perspective. 

But this is not to say there isn’t room for improvement at DOE, 

or that some DOE programs don’t need further examination. The 

13 

GAO and the Inspector General, as we will hear, have looked carefully at the DOE Recovery Act programs and they found some 

areas where management and monitoring needs to improve. I commend GAO and the IG for taking a hard look at these programs 

and identifying areas for improvement, and I encourage my colleagues across the aisle to use these assessments to help find ways 

to improve DOE programs, not to use these findings as a partisan 

sword to try to skewer the administration for political points. And 

it is important to note, as this committee well knows, that GAO 

has had longstanding concerns about DOE’s financial management. 

DOE’s environmental management program has been a part of 

GAO’s high risk series since 1990, and so while the Obama administration has made improvements, they have made the agency more 

transparent and increased accountability, but DOE’s problems go 

back decades and so we can’t fix it all in 3 years. We need to continue to try to fix it. 

We also need to look at where DOE is going, not just where they 

have been. The GAO and the DOE Inspector General will tell us 

that DOE has responded to these concerns raised in their investigations and audits, learned from its mistakes, and made improvements as they continued to spend Recovery Act funds to improve 

the economy and provide new incentives for the development and 

deployment of clean and renewable energy. And so I am looking 

forward to hearing from DOE how they have responded to the concerns raised by these auditors. 

Now, instead of somehow trying to tie higher gas prices to the 

DOE budget, I think what we should do on both sides of the aisle 

is to discuss long-term solutions to gas prices and the threat of climate change. As gas prices continue to rise, we need to think of 

ways to creatively reduce our dependence on foreign oil. So to do 

that, we can’t just say OK, let us have market-based solutions. We 

have to come up with a comprehensive, multi-prong long-term approach, using all energy sources to ensure that we are energy efficient and energy independent. Other nations are already doing 

this, and we can’t be left behind. We should be at the front of a 

renewable energy revolution that uses traditional fuels to transition. 

And so I hope we can have all of these conversations as we go 

forward, Mr. Chairman. I know Ms. Christensen has some things 

she wants to say, and so at this time, I will yield a minute or the 

balance of my time to Ms. Christensen. 

Mr. STEARNS. I think you need your mic closer. 

OPENING STATEMENT OF HON. DONNA M. CHRISTENSEN, A 

REPRESENTATIVE IN CONGRESS FROM THE VIRGIN ISLANDS 

Mrs. CHRISTENSEN. Thank you. Although I must say that this 

does feel like de ́ja` vu all over again, this being at least the third 

meeting, as Congresswoman DeGette said, in a series relating to 

line-by-line budget review of this agency. It is really unclear what 

we are trying to accomplish here. The alleged tendency is to identify ways for duplicative and excessive spending, in addition to assisting DOE to identify and prioritize for the targets for cuts. Instead, however, it reflects the disappointing state of this Congress 

once again ignoring the true concerns of the American people by 

14 

failing to act on the most critical bread-and-butter issues of our 

times: jobs and the economy. 

The course that we are now on will in no way create the jobs necessary to help our unemployed, will not strengthen our environmental protections, reduce the cost of gasoline, or safeguard the 

health of our constituents. Further cuts will not take us one step 

closer to clean air or clean water, or a lower unemployment rate. 

It is still my hope, though, that we can somehow turn these hearings into constructive dialogues about the true cost of benefits of 

public investment and DOE operations, and that does also, of 

course, include critically analyzing areas where DOE can further 

President Obama’s directive to be even more vigorous in efforts to 

find savings by performing in an even more efficient and cost-effective manner, as I am sure you will hear from the DOE employees. 

I thank you, and thank you for the opportunity to have a brief 

opening statement. 

Mr. STEARNS. As you know—I am speaking now to our witnesses—the testimony that you are about to give is subject to Title 

18, Section 1001 of the United States Code. When holding an investigative hearing, this committee has the practice of taking testimony under oath. Do you have any objection to testifying under 

oath? No? 

The Chair then advises you that under the rules of the House 

and the rules of the committee, you are entitled to be advised by 

counsel. Do you desire to be advised by counsel during your testimony today? If not, if you would please rise and raise your right 

hand, I will swear you in. 

[Witnesses sworn.] 

Mr. STEARNS. Thank you, and now you may give your 5-minute 

summary of your written statement. 

Mr. Rusco, we will start with you. 

TESTIMONY OF FRANK RUSCO, DIRECTOR, NATURAL RESOURCES AND ENVIRONMENT, GOVERNMENT ACCOUNTABILITY OFFICE; GREGORY H. FRIEDMAN, INSPECTOR GENERAL, DEPARTMENT OF ENERGY; AND CHRISTOPHER 

JOHNS, DIRECTOR, OFFICE OF BUDGET, DEPARTMENT OF 

ENERGY 

TESTIMONY OF FRANK RUSCO 

Mr. RUSCO. Thank you. Chairman Stearns, Ranking Member 

DeGette, and members of the subcommittee, I am pleased to be 

here today to discuss budget trends at the Department of Energy, 

as well as observations from GAO’s recent reports on selected DOE 

programs and activities. 

Recent years have seen significant growth in funding for DOE, 

particularly in programs that received funding from the 2009 

American Recovery and Reinvestment Act. GAO has reported on 

such DOE programs in response to congressional mandates and requests from Members of Congress. My testimony today provides details about the budget trends and aspects of the performance of key 

DOE programs and activities. In the remainder of my oral remarks, I will highlight three such programs. 

15 

The first is the Advanced Research Projects Agency-Energy, or 

ARPA–E. ARPA–E was created by Congress in the America COMPETES Act of 2007, but did not receive appropriations until 2009 

when it received $.4 billion of Recovery Act funding. Subsequently, 

the program has received appropriations in 2011 and 2012. GAO 

reported on this program in February 2012 and found that the program was generally following its mandate to fund projects with 

high risk, high reward profiles and that the private sector would 

be unlikely to fund on its own. We also found that the program 

could do more to identify and verify information on an applicant’s 

prior private funding, and recommended that ARPA–E provide additional reporting guidance to applicants, and also require applicants to provide letters from investors explaining why these 

projects could not have been funded by private investors. ARPA– 

E agreed with GAO’s recommendations and has begun to implement them. 

Secondly, DOE’s Weatherization Assistance Program is a longstanding program that has generally operated on a budget in the 

neighborhood of $225 million per year, the vast majority of which 

is distributed to States and other recipients to help low-income 

families reduce their energy bills by making long-term energy efficiency improvements to their homes. This program received a $5 

billion infusion from the Recovery Act, and initially experienced difficulties in scaling up its distribution of money to recipients. For 

example, we reported in 2010 that States and other recipients of 

weatherization funds had encountered difficulties in understanding 

and meeting program requirements. These problems delayed the 

distribution of money for the first several quarters of 2009. GAO 

recommended that DOE, among other things, clarify its production 

targets and funding deadlines, and generally improve its communication with recipients. DOE took some steps to improve the clarity of its guidance and communications, and despite the slow start, 

we reported in December 2011 that the States and other recipients 

had access to most of the Recovery Act funds for weatherization, 

and were on target to exceed weatherization goals. However, some 

recipients were unable to meet the original spending deadline set 

by DOE of March 31, 2012, and DOE has recently announced that 

it will allow recipients the opportunity to modify the original deadline to gain additional time to spend the Recovery Act money. 

Lastly, DOE’s Loan Guarantee Program was created under the 

Energy Policy Act of 2005 to provide loan guarantees to innovative 

energy technologies that, among other things, reduce greenhouse 

gas emissions. As initially established, the long-term expected costs 

of the loan guarantees were required to be paid for by loan recipients. The program issued its first solicitation for loan guarantee 

applications, and several more solicitations starting in 2006. However, it did not close its first loan until September 2009. By that 

time, the program had received $2.5 billion in Recovery Act appropriations to pay for the expected costs of program loans, with a 

deadline for breaking ground of September 30, 2011. As of that 

deadline, DOE had spent approximately $2.1 billion of the Recovery Act appropriations to pay the costs of approximately $15 billion 

of loans, primarily for solar, wind, geothermal, and biomass 

16 

projects. The remaining $.4 billion in Recovery Act money went 

back into the Treasury. 

In several reports on the Loan Guarantee Program, GAO found 

numerous problems, including failure to establish performance 

metrics that matched the goals established by the program, as well 

as poorly documented processes and procedures that, in some cases, 

have led to applicants being treated inconsistently, and that have 

opened the program up to criticism about its loan-making decisions. 

I will end my oral remarks here, but I will be happy to answer 

any questions the subcommittee may have about these and other 

DOE programs discussed in my written testimony. Thank you. 

[The prepared statement of Mr. Rusco follows:] 

17 


78727.007

GAO 

For I{(~lea.<;e on Delivery 

Expected at 10:30 a.m. EDT 

Wednesday. April IS, 2012 

GAO-12-659T 

United States Government Accountability Office 

Testimony 

Before the Subcommittee on Oversight 

and Investigations, Committee on Energy 

and Commerce, House of Representatives 

DEPARTMENT OF 

ENERGY 

Budget Trends and 

Oversight 

Statement of Frank Rusco, Director 

Natural Resources and Environment 

GAO 

Accountability * Integrity * Reliability 
18 


78727.008

&: • GAO Accollnlabil"y"ln~gr!ly· Reliability 

Highlights 

Highlights of GAO·12·659T, a testimony 

before the Subcommittee on Oversight and 

Investigations, Committee on Energy and 

Commerce, House of Representatives 

Why GAO Did This Study 

Understanding the impact of budgetrelated considerations has become 

particularly important as Congress and 

the administration seek to decrease 

the cost of government while improving 

its performance. In recent years, 

Congress has authorized large 

increases in funding for DOE. For 

example, the Recovery Act, which 

Congress enacted to, among other 

things, preserve and create jobs and 

promote economic recovery, provided 

DOE with more than $41,7 billion in 

areas such as energy efficiency, 

renewable energy, and environmental 

cleanup, 

This testimony focuses on several key 

programs and related budget issues at 

DOE, including (1) the management of 

selected programs expanded or 

created by recent funding increases 

and (2) potential opportunities to 

achieve savings or enhance revenue. 

This testimony is based on prior GAO 

reports from February 2011 to March 

2012, and updated with readily 

available data from DOE. 

What GAO Recommends 

GAO is making no new 

recommendations in this testimony but 

continues to believe that implementing 

the recent recommendations made in 

the reports discussed should improve 

DOE program management, achieve 

savings, and enhance revenue, DOE 

has generally agreed with most of our 

recommendations, but disagreed on 

certain points related to the timing of 

implementing our recommendations. 

View GAO-12-659T. For more Information, 

contact Frank Ruseo at (202) 512-3841 or 

ruseof@gao.gov. 

timiJll;"Nf 

DEPARTMENT OF ENERGY 

Budget Trends and Oversight 

What GAO Found 

Recent GAO work found that funding increases have expanded or created 

Department of Energy (DOE) programs with varying results, For example: 

Advanced Research Projects Agency-Energy (ARPA-E) awards grants to 

projects that help develop high-risk energy technologies, Since fiscal year 

2009 the program has received $855 million to fund energy projects that 

industry by itself was not likely to undertake, GAO found that ARPA-E uses 

several selection criteria in awarding funds, but its requirements for 

information on private funding could be improved, 

The Loan Guarantee Program provides loan guarantees for innovative 

energy technologies, DOE has made about $15 billion in loan guarantees 

and is authorized to make up to $34 billion in additional loan guarantees, 

GAO found that the program does not have sufficient data to facilitate 

oversight, and its actual process for reviewing applications has differed from 

the established process, 

The Weatherization Assistance Program helps low-income families reduce 

their energy bills by making long-term energy efficiency improvements to 

their homes, The American Recovery and Reinvestment Act of 2009 

(Recovery Act) provided $5 billion to enhance the program's ability to make 

energy efficiency improvements to low-income family homes, GAO made 

recommendations to DOE to clarify the program's production targets 

(e,g" the number of homes weatherized) and guidance, 

The Advanced Technology Vehicles Manufacturing Loan Program provides 

loans for projects to produce more fuel-efficient passenger vehicles and their 

components, DOE can make up to $25 billion in loans for fuel-efficient 

vehicles; at the time of GAO's review, DOE could not be assured that 

projects would be delivered as agreed, 

GAO also reported that improvements at DOE may provide opportunities for 

increasing savings and enhancing revenue. For example: 

Contractor support costs, DOE's management of contractors, who operate 

DOE sites and represent 90 percent of DOE's budget, has historically been 

decentralized, or fragmented. This adds to inefficiencies tn support functions. 

Since 2007, DOE and contractors at some DOE sites have had efforts to 

streamline these functions, GAO recommended that DOE assess whether 

further opportunities could be taken to streamline such functions, 

Diesel emissions, DOE, the Department of Transportation, and the 

Environmental Protection Agency receive federal funding to reduce diesel 

emissions from mobile sources-14 programs in all, which also overlap on 

certain activities, DOE received $572 million for its 3 programs, GAO 

recommended that the three agencies establish a strategy for collaboration 

to reduce diesel emissions from mobile sources, 

Excess uranium inventories. Uranium is used in fuel for nuclear power plants. 

GAO reported DOE's excess uranium inventories could be worth billions of 

dollars in additional revenue as fue! for commercia! nuclear power plants. 

_____________ United States Government Accountability Office 
19 


78727.009

Chairman Stearns, Ranking Member DeGette, and Members of the 

Subcommittee: 

I am pleased to be here today to discuss budget considerations at the 

Department of Energy (DOE). These issues are particularly important as 

Congress and the administration seek to decrease the cost of 

government while improving its performance and accountability. 

In recent years, Congress has authorized large increases in funding for 

DOE. For example, the American Recovery and Reinvestment Act of 

2009 (Recovery Act), which Congress enacted in response to the recent 

economic crisis to, among other things, preserve and create jobs and 

promote economic recovery, provided DOE with more than $41.7 billion-

$35.2 billion for projects and activities and $6.5 billion in borrowing 

authority-in areas such as energy efficiency, renewable energy, and 

environmental cleanup. Congress also passed the America Creating 

Opportunities to Meaningfully Promote Excellence in Technology, 

Education, and Science Act of 2007 (America COMPETES Act), with the 

overall goal of increasing federal investment in scientific research.' In this 

context, the President's fiscal year 2007 budget proposed doubling 

funding for DOE's Office of Science by fiscal year 2016, in part under the 

goals of the America COMPETES Act However, policy decisions made in 

response to the current budget environment have since shifted the Office 

of Science's funding trajectory away from this target 

My testimony today draws on our recent work in which we made 

recommendations intended to improve the management of DOE's 

programs. DOE has generally agreed with most of our recommendations, 

but disagreed on certain points related to the timing of implementing our 

recommendations. I will focus my remarks today on several key programs 

and related budget issues at DOE concerning (1) the management of 

selected programs that were expanded or created by recent funding 

increases and (2) potential opportunities to achieve savings or enhance 

revenue. 

This statement is based largely on our prior work issued from February 

2011 to March 2012, including our work on overlap and duplication of 

'Pub. L. No. 110-69. 121 Stat. 572 (2007). reauthorized by PUb. L No 111-358. 124 Stat 

3982 (2011) 

Page 1 
20 


78727.010

Funding Increases 

Have Expanded or 

Created Programs 

with Varying Results 

federal programs that may result in inefficient use of taxpayer funds, 2 and 

updated with readily available data from DOE. Detailed information on our 

scope and methodology for our prior work can be found in these reports. 

(See our list of related GAO products at the end of this testimony.) We do 

not provide budget summary data for all programs and initiatives 

associated with the activities included in this testimony because many of 

them (e.g., renewable energy initiatives, DOE contractor support costs, 

diesel emissions, and excess uranium inventories) span a number of 

DOE programs. We conducted the underlying performance audits in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform audits to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our statement 

today. 

From fiscal years 2007 through 2012, DOE's budget requests rose in 

nominal terms from about $23.6 billion to $29.5 billion, and its 

appropriations rose over that time from about $23.8 billion to $26.3 billion, 

increasing to almost $33.9 billion in fiscal year 2009. DOE requested 

approximately $27.2 billion for fiscal year 2013, as shown in table 1. 

2012 Annual Report Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO~12~342SP (Washington, 

D.C .. Feb. 28, 2012). This statement does not discuss DOE's National Nuclear Security 

Admmistration (NNSA) or Office of Environmental Management 

Page 2 GAO·12-659T 
21 


78727.011

Table 1: DOE Budget Requests and Appropriations, Fiscal Years 2007·2013 

Dollars in thousands 

2009 

2010 

2011 

2012 

2013 

DOE Programs Funded by 

the Recovery Act 

25,014,956 33,856,453 

26,393,982 26,425,673 

28,404,359 25,692,833 

29,546,730 26,299,547 

27,155,072 

Source DOE 

Note: In fiscal year 2009, DOE received about $36.7 billion In Recovery Act appropriations, with 

varying obligation deadlines. During the yearly appropriations process, DOE generally receives no, 

year funding. No-year funding refers to appropriations that do not restrict the time by which funds 

must be obligated. For more information on DOE's no-year funding, see GAO, DOE's NON Year 

Funding, GAO/RCED-9S-91R (Washington, D.C.: Mar. 8, 1995). 

aThis column does not include Recovery Act appropriations 

bAppropriations have not yet been determined for fiscal year 2013 

According to agency documents, in addition to aligning its fiscal year 

2013 budget request with its strategic plan, DOE released a technology 

review in September 2011 that provided a framework for preparing 

budgets for some of its energy and science programs, Since then, 

according to these documents, DOE has worked closely with the Office of 

Management and Budget to develop, under its strategic plan, new priority 

goals-including maximizing the benefits of investments in scientific 

facilities-for fiscal year 2013. 

Through the Recovery Act, Congress provided approximately $8 billion 

for three existing DOE programs: (1) $0.4 billion in initial funding for the 

Advanced Research Projects Agency-Energy to support advanced energy 

research, (2) $2,5 billion for the Loan Guarantee Program to guarantee 

loans for innovative energy projects, and (3) $5 billion for the 

Weatherization Assistance Program to make energy efficiency 

improvements to the homes of low-income families. Since these funding 

increases were implemented, we reviewed the programs receiving the 

funds and made several recommendations intended to improve their 

management. In addition, under the Advanced Technology Vehicles 

Manufacturing loan program, which received some Recovery Act funds, 

DOE can provide up to $25 billion in loans for fuel-efficient vehicle 

Page 3 GAO-12-S59T 
22 


78727.012

Advanced Research 

Projects Agency-Energy 

projects, but at the time of our review, it could not be assured that 

projects would be delivered as agreed. We also recently reported that, 

among the 92 renewable energy-related initiatives DOE implemented in 

fiscal year 2010, the Recovery Act established 7 and increased funding 

for 36,' 

The America COMPETES Act of 2007 established the Advanced 

Research Projects Agency-Energy (ARPA-E) within DOE to overcome the 

long-term and high-risk technological barriers to the development of 

energy technologies. However, ARPA-E did not receive an appropriation 

until 2 years later, in 2009, in the Recovery Act. Including the Recovery 

Act funds and subsequent appropriations, ARPA-E has received about 

$855 million in appropriations, According to ARPA-E's budget director, as 

of March 1,2012, the program has awarded no more than the $521.7 

million that, as we reported in January 2012, was provided to universities, 

public and private companies, and national laboratories to fund 181 

projects that attempt to make transformational advances to a variety of 

energy technologies, including high-energy batteries and renewable fuels. 

This official told us that ARPA-E has not yet selected award recipients for 

fiscal year 2012, Award winners must meet cost-share requirements, 

through either in-kind contributions or outside nonfederal funding sources. 

ARPA-E is required by statute to achieve its goals through energy 

technology projects that, among other things, accelerate transformational 

technological advances in areas that industry by itself is not likely to 

undertake because of technical and financial uncertainty. At the same 

time, the agency's director is required to ensure, to the maximum extent 

practicable, that its activities are coordinated with, and do not duplicate 

the efforts of, programs and laboratories within DOE and other relevant 

research agencies, Table 2 shows the program's budget requests and 

appropriations since receiving an appropriation through the Recovery Act 

in fiscal year 2009, 

Page 4 

Renewable Energy: Federal Agencies Implement Hundreds of Initiatives, 

(Washington, D,C.: Feb. 27, 2012). 

GAO·12-659T 
23 


78727.013

Table 2: Advanced Research Projects Agency-Energy Budget Requests and Appropriations, Fiscal Years 2010-2013 

2013 

Loan Guarantee Program 

179,640 

275,000 

350,000 

Source'DOE 

Note; In fiscal year 2009, Advanced Research Projects Agency-Energy received about $400 mil!1on in 

Recovery Act appropriations 

aThis column does not include Recovery Act appropriations 

°Appropriatlons have not yet been determined for fiscal year 2013, 

In January 2012, we reported that ARPA-E uses several selection criteria 

in making awards, although its requirements for information on private 

sector funding could be improved,4 For example, we reported that ARPAE's program directors spent time and resources to determine the extent of 

prior funding for proposed ARPA-E projects, Also, our review suggested 

that most ARPA-E projects could not have been funded solely by the 

private sector. Furthermore, according to ARPA-E officials and 

documents, agency officials have taken steps to coordinate with other 

DOE offices in advance of awarding ARPA-E funds to help avoid 

duplication of efforts, We recommended that ARPA-E consider providing 

applicants guidance with a sample response explaining prior sources of 

funding, requiring applicants to provide letters from investors explaining 

why they are not willing to fund proposed projects, and using third-party 

venture capital data to identify applicants' prior funding, DOE agreed with 

our recommendations, 

Under the Energy Policy Act of 2005, the Loan Guarantee Program (LGP) 

was created to provide loan guarantees for innovative energy 

technologies, Until February 2009, the LGP was working exclusively 

under section 1703 of the act, which authorized loan guarantees for new 

4GAO, Department of Energy: Advanced Research Projects Agency-Energy Could Benefit 

from Information on Applicants' Prior Funding, GAO-12-112 (Washington, D,C Jan. 13, 

2012), 

Page 5 
24 


78727.014

or innovative energy technologies that had not yet been widely 

commercialized in the United States. At that time, Congress had 

authorized DOE to guarantee approximately $42.5 billion in section 1703 

loanss Although Congress had provided funds to DOE to cover the 

program's administrative costs, it had not appropriated funds to pay the 

"credit subsidy costs" of these guarantees. Credit subsidy costs are the 

government's estimated net long-term cost, in present value terms, of 

direct or guaranteed loans over the entire period the loans are 

outstanding (not including administrative costs). In February 2009, the 

Recovery Act amended the Energy Policy Act of 2005, adding section 

1705, which made certain commercial technologies eligible for loan 

guarantees if they could start construction by September 30, 2011. 6 The 

Recovery Act also provided $6 billion in appropriations-later reduced by 

transfer and rescission to about $2.5 billion'-to cover DOE's credit 

subsidy costs for an estimated $18 billion in additional loan guarantees. In 

fiscal year 2011, Congress appropriated about $170 million to cover 

subsidy costs of section 1703 loan guarantees for the first time. Table 3 

shows the program's budget requests and appropriations since fiscal year 

2008. 

LGP's total authority for section 170310ao$ was $34 billion, as of March 12, 2012. 

6To be eligib!e for Recovery Act funding, projects were required to meet other 

requirements as well, including that workers employed on the project were to be paid 

wages not less than prevailing on similar work in the locality, in accordance with the 

Davis~Bacon Act 

71n fiscal year 2009, the LGP received nearly $6 billion in Recovery Act appropriations to 

pay the credit subsidy costs of projects supported under section 1705 with the limitation 

that funding to pay the credit subsidy costs of leading-edge biofue! projects eligible under 

this section would not exceed $500 mHlion Congress later authorized the President to 

transfer up to $2 billion of the nearly $6 billion to expand the "Cash for ClunkersH program 

Pub. L No. 111-47 (Aug. 7, 2009) The $2 billion was transferred to the Department of 

Transportation, leaving nearly $4 biWon to cover credit subsidy costs of projects supported 

under section 1705. On August 10, 2010, Pub. L. No. 111-226 rescinded an additional 

$1.5 billion from the loan guarantee appropriation to pay for education~re!ated jobs, 

Medicaid and other initiatives, further reducing avallable funding to $2.5 billion 

Page 6 GAO-12-6591 
25 


78727.015

Table 3: Loan Guarantee Program Budget Requests and Appropriations, Fiscal Years 2008~2013 

Dollars in thousands 

Source DOE 

Notes: The table includes funding for section 1703 and section 1705 of the Energy Policy Act of 2005 

In fiscal year 2009, the Loan Guarantee Program received $6 billion in Recovery Act appropriations, 

which were later reduced by transfer and rescission to about $2.5 billion 

3This column does not include Recovery Act appropriations 

bAppropriations have not yet been determined for fiscal year 2013, 

In March 2012, we reported that DOE had made $15 billion in loan 

guarantees and conditionally committed to an additional $15 billion as of 

September 30, 2011.8 However, we also reported that the program does 

not have the consolidated data on application status needed to facilitate 

efficient management and program oversight. In addition, the program 

adhered to most of its established process for reviewing applications, but 

we reported that its actual process differed from its established process at 

least once on 11 of the 13 applications we reviewed. DOE agreed with 

our recommendations to (1) ensure that its records management system 

contains documents supporting past deCisions, as well as those in the 

future, and (2) regularly update program policies and procedures. DOE 

disagreed with our recommendation to commit to a timetable to fully 

implement a consolidated system to provide information on program 

applications and measure overall program performance, stating that it did 

not agree to a hard timetable for implementing the recommendation. We 

continue to believe that DOE should commit to developing such a system 

in a timely fashion. 

DOE Loan Guarantees: Further Actions Are Needed to Improve Tracking and 

Review of Applications, GAO-12-157 (Washington, D.C .. Mar. 12,2012) 

Page 7 GAO·12~659T 
26 


78727.016

Weatherization Assistance 

Program 

The Recovery Act appropriated $5 billion for the Weatherization 

Assistance Program to help low-income families reduce their energy bills 

by making long-term energy efficiency improvements to their homes. 9 

This appropriation represented a significant funding increase for a 

program that had received about $225 million per year in recent years. As 

of February 28, 2012, we found that DOE had awarded 58 state-level 

grant recipients approximately $4.84 billion to implement the 

Weatherization Assistance Program under the Recovery Act, and these 

recipients reported spending about $4.22 billion and weatherizing 

709,138 homes, exceeding the program's production target of 607,000 

homes. 10 Table 4 shows the program's budget requests and 

appropriations since fiscal year 2007. 

Table 4: Weatherization Assistance Program Budget Requests and Appropriations, Fiscal Years 2007~2013 

Notes: The table includes $250 million in emergency funding for the Weatherization Assistance 

Grants program provided by the Consokdated Security, Disaster Assistance, and Continuing 

AppropriatIOns Act, 2009, Pub. L. No 110-329, § 130(a) (Sept 30, 2008), In fiscal year 2009, the 

Weatherization Assistance Program received almost $5 billion in Recovery Act appropriations 

3This column does not include Recovery Act appropriations 

b The budget request for fiscal year 2013 also includes Weatherization Training and Technical 

Assistance 

CAppropriations have not yet been determined for fiscal year 2013, 

9These improvements include installing insulation, sealing leaks, and modernizing heating 

equipment and air conditioning equipment 

10This information is based on updates provided by DOE officials to our data in GAO, 

Recovery Act Progress and Challenges in Spending Weatherization Funds, GAO-12-195 

(Washington, D.C .. Dec. 16,2011) 

PageS GAO-12-659T 
27 


78727.017

In December 2011, we reported that some grant recipients had been able 

to exceed their production targets because of a lower average cost of 

weatherizing homes and lower training and technical assistance 

expenses than anticipated." In addition, most recipients reported 

experiencing more implementation challenges in the first year of the 

Recovery Act than in the third year. We also reported that a long-term 

Weatherization Assistance Program goal is to increase energy efficiency 

through cost-effective weatherization work and that March 2010 costbenefit estimates from an Oak Ridge National Laboratory study indicate 

that energy savings will likely exceed the program's costs. That is, every 

$1 spent on the weatherization program for 2009 through 2011 would 

result in almost $2 in energy savings over the useful life of the 

investment; the laboratory plans to issue more definitive estimates in 

2013. 12 Also in our December 2011 report, we discussed actions DOE 

took in response to a recommendation we made in a May 2010 report, 13 

that DOE clarify production targets and funding deadlines, among other 

things; DOE officials provided documentation concerning targets but did 

not provide clarification of the consequences for not meeting the targets. 

In response to concerns about whether or not program requirements were 

being met, our May 2010 report included recommendations to DOE to 

clarify its guidance, production targets, funding deadlines, and associated 

consequences. DOE's program guidance stated that recipients could 

spend Recovery Act funds until March 31,2012. According to DOE, 

several grant recipients had requested additional time to spend these 

funds. Between the issuance of our two reports, in September 2011, the 

Office of Management and Budget released a memorandum stating that 

Recovery Act funds should be spent by September 2013. In our 

December 2011 report, we found that, as of November 2011, DOE had 

not determined if an extension would be availablE: for grant recipients. In 

January 2012, DOE issued guidance stating that it was offering grant 

12For its estimates, Oak Ridge National Laboratory considered the 50 states and the 

District of Columbia and not the Native American tribes and the U,S. territories that are 

also recipients of the weatherization program under the Recovery Act Oak Ridge National 

Laboratory assumed that the weatherization Investment would yield energy savings over a 

20-year period 

13GAO, Recovery Act: States' and LocafiUes' Uses of Funds and Actions Needed to 

Address Implementation Challenges and Bolster Accountability, GAO-10-604 

(Washington, D.C .. May 26, 2010) 

Page 9 GAO-12·659T 
28 


78727.018

Advanced Technology 

Vehicles Manufacturing 

Loan Program 

recipients an opportunity to modify the original March 31,2012 funding 

deadline. 

In December 2007, Congress enacted the Energy Independence and 

Security Act of 2007, which mandates more stringent average fuel 

economy standards for newly manufactured passenger vehicles sold in 

the United States by model year 2020 and established in DOE the 

Advanced Technology Vehicles Manufacturing (A TVM) loan program, to 

provide loans for projects to produce more fuel-efficient passenger 

vehicles and their components. The ATVM loan program is to provide up 

to $25 billion in loans for more fuel-efficient vehicles and components. 

Congress also provided $7.5 billion to pay the required credit subsidy 

costs of the loans, as shown in table 5. 

Table 5: Advanced Technology Vehicles Manufacturing Loan Program's Budget Requests and Appropriations, Fiscal Years 

2009-2013 

Oollars In thousands 

Fiscal year 

2009 

2010 

2011 

2012 

2013 

Budget request Appropriations3 

$0 $7,510,000 

20.000 20.000 

9,998 9.978 

6,000 6,000 

9,000 

Source DOE 

Note: In fiscal year 2009, the Advanced Technology Vehicles Manufacturing Loan Program received 

$10 million in Recovery Act appropriations. 

aThis column does not include Recovery Act appropriations 

~Appropria!ions have not yet been determined for fiscal year 2013. 

In February 2011, we reported that the ATVM loan program had made 

$8.4 billion in loans that DOE expects to yield fuel economy 

improvements in the near term, along with greater advances through 

newer technologies, in years to come." These loans represent about a 

third of the $25 billion authorized by law, but we reported that the program 

Department of Energy: Advanced Technology Vehicle Loan Program 

Implementation Is Under Way, but Enhanced Technical Oversight and Performance 

Measures Are Needed, GAO-11-145 (Washington, 0 C .. Feb. 28, 2011) 

Page 10 GAO-12-659T 
29 


78727.019

Renewable Energy 

Initiatives 

had used 44 percent of the $7.5 billion allocated to pay credit subsidy 

costs, which is more than was initially anticipated. These higher credit 

subsidy costs were, in part, a reflection of the risky financial situation of 

the automotive industry at the time the loans were made. As a result of 

the higher credit subsidy costs, we reported that the program may be 

unable to loan the full $25 billion allowed by statute. We also reported that 

the ATVM loan program had set procedures for overseeing the financial 

and technical performance of borrowers and had begun using the 

procedures to oversee the loans; at the time of our report, however, it had 

not yet engaged the engineering expertise needed for technical oversight, 

as called for by its procedures. As a result, we reported that without 

qualified oversight to analyze the information submitted by the borrowers 

and to provide technical monitoring, DOE could not be adequately 

assured that the borrowers are delivering the vehicle and component 

projects as required by the loan agreements. In addition, we reported that 

DOE had not developed sufficient performance measures that would 

enable it to fully assess progress toward achieving its program goals. 

DOE disagreed with our recommendations that the agency accelerate its 

efforts to engage the expertise needed for effective oversight and develop 

sufficient performance measures, although we continue to believe that the 

agency should take these actions. 

In February 2012, we reported that DOE had implemented 92 renewable 

energy-related initiatives in fiscal year 2010." These initiatives supported 

every renewable energy source in our review, including bioenergy, solar, 

and wind, and most initiatives supported more than a single energy 

source. In addition, more than 70 percent of these initiatives supported 

both the public and private sectors. These initiatives were distributed 

across multiple federal responsibilities, with the largest percentage of 

DOE's initiatives supporting research and development. Approximately 

one-third (36) of the 106 existing federal renewable energy-related 

initiatives that received additional funding under the Recovery Act were 

implemented by DOE, primarily involving research and development of 

new renewable energy technologies. Overall, the Recovery Act affected 

49 DOE initiatives: 7 were established, 36 received more funding, and 11 

Page 11 GAO·12~659T 
30 


78727.020

Opportunities May 

Exist to Achieve 

Savings and Enhance 

Revenue 

Contractor Support Costs 

expanded or had their scope changed. 16 Several of the renewable 

energy-related initiatives we reviewed have expired or will expire, in full or 

in part, because of the expiration of legislative authority, depletion of 

available appropriations, or some other expiration under the law as 

written as of fall of 2011.'7 Our report contained no recommendations to 

DOE. 

We have previously reported on several areas at DOE that may provide 

opportunities for achieving increased savings and enhancing government 

revenue. Areas that may provide opportunities for increased savings 

include (1) contractor support costs and (2) potential overlap of effort 

across certain activities for programs to reduce diesel emissions from 

mobile sources. An area that may provide an opportunity for enhanced 

government revenue concerns DOE's uranium inventories, which are 

worth potentially billions of dollars to commercial nuclear power plants 

that can use the material as fuel in their reactors. 

DOE spends 90 percent of its annual budget-which totaled $27 billion 

for fiscal year 2011-on the contractors that carry out its diverse missions 

and operate its sites nationwide. In January 2012, we reported that DOE 

and contractors at some DOE sites, including the Office of Science, have 

been carrying out a variety of efforts since 2007 to streamline and reduce 

the costs of sites' support functions. " Such functions include procuring 

needed goods and services; recruiting and hiring workers; managing 

health and retirement benefits; maintaining facilities and infrastructure: 

numbers total more than 49 because some initiatives were affected by the 

Recovery Act in multiple ways. The Recovery Act also had an Indirect or other impact on 

three DOE initiatives 

17We did not report budget requests or appropriations for these initiatives because our 

data do not always match agencies' reported information on these activities, such as 

information contained in budget documents. In particular, we developed data on agencies' 

initiatives that were related to renewable energy through a specifiC emphaSIS or focus, 

even if renewable energy was part of a broader effort, Renewable energy activities may 

be part of broader initiatives which are not primarlly focused on renewab!e energy, In 

these instances, renewable energy projects can be one of many eligible types of activities 

that receive support under an initiatIve 

18GAO, Department of Energy: Additional Opportunities Exist to Streamline Support 

Functions at NNSA and Office of Science Sites, GAO~ 12~255 (WaShington. D.C Jan, 31, 

2012). 

Page 12 
31 


78727.021

Diesel Emissions 

and providing day-to-day accounting, information technology, and 

security. In addition, we found that contractors at sites have undertaken 

their own streamlining and cost-reduction efforts, ranging from automating 

hiring, training, or other human resources activities to reducing employee 

health care and pension costs. Also in February 2012, in our annual 

report on overlap and duplication of federal programs that may result in 

inefficient use of taxpayer funds, we recommended that DOE assess 

whether further opportunities could be taken to streamline support 

functions, estimated to cost over $5 billion, at its contractor-managed 

laboratories and other sites, including Office of Science sites, in light of 

contractors' historically fragmented approach to providing these 

functions. 19 DOE agreed with the recommendation. 

Diesel engines playa vital role in public transportation, construction, 

agriculture, and shipping, largely because they are more durable and 

reliable than gasoline-powered engines, as well as 25 to 35 percent more 

energy efficient. However, exhaust from diesel engines is a pervasive and 

harmful form of air pollution that affects public health and the 

environment. Table 6 shows funding, by program, for DOE activities to 

reduce diesel emissions from mobile sources. 

19GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO~12-342SP (Washington, 

D,C,: Feb. 28, 2012). In GAO~12-255, we examined sites overseen by both DOE's Office 

of Science and the National Nuclear Security Administration. As discussed in this report, 

these DOE sites' support costs for recent years are not fuUy known, because DOE 

changed its data collection approach in 2010 to improve the quality of its cost data. Also, 

DOE has not yet fully implemented a quality control process for these more recent data 

but intends to do so in 2012. 

Page 13 GAO-12-659T 
32 


78727.022

Table 6: Estimated Federal Grants Obligated for DOE Activities to Reduce Diesel Emissions from Mobile Sources, by 

Program, Fiscal Years 2007~2011 

Doilars in thousands 

Program 

Clean Cittes program 

Energy Efficiency and 

Conservation Block Grant 

program 

State Energy Program 

Purpose Grants 

To advance the nation's economIC, environmental, and energy security by 

funding projects that reduce petroleum use in transportation 

$305,000 

To support energy efficiency and conservation projects that reduce fossil fuel 

emissions and energy use and improve energy efficlency in the transportation 

and building sectors 

To support state development and Implementation of strategies and goalo that 

promote energy efficiency and conservation 

Source GAO analYSIS of relevant laws and DOE dala lind documents 

256,000 

11,000 

Note: The Recovery Act provided funding for DOE's Clean Cities, Energy Efficiency and Conservation 

Block Grant and State Energy programs 

In February 2012, we reported that federal grant and loan funding for 

activities that reduce mobile source diesel emissions is fragmented 

across 14 programs at DOE, the Department of Transportation (DOT), 

and the Environmental Protection Agency (EPA),2O Moreover, we reported 

that each of these programs overlaps with at least one other program in 

the specific activities they fund, the program goals, or the eligible 

reCipients of funding. 21 In addition, we found that these programs 

generally do not collaborate, We previously reported that uncoordinated 

program efforts can waste scarce funds, confuse and frustrate program 

customers, and limit the overall effectiveness of the federal effort.22 To 

help ensure the effectiveness and accountability of federal funding that 

reduces diesel emissions, we recommended that DOE, DOT, and EPA 

establish a strategy for collaboration in reducing mobile source diesel 

emissions. DOE agreed with our recommendation. 

20GAO_12_342SP. 

21We did not report budget requests or appropriations for these programs because onty 

one has a speCific purpose of reducing mobile source diesel emissions The remaining 

programs focus on other goals or purposes, such as supporting energy efficiency projects 

or reducing petroleum use 

22GAO, The Government Petiormance and Results Act: 1997 Govemmentwide 

Implementation Will Be Uneven, GAOIGGD-97·109 (Washington, D.C .. June 1997) 

Page 14 GAO·12·659T 
33 


78727.023

Excess Uranium 

Inventories 

Uranium is used in fuel for nuclear power plants. Twenty percent of our 

nation's electricity comes from nuclear power, and growing anxiety over 

climate change generated by ever-growing demand for fossil fuels has 

sparked interest in increasing the use of nuclear power, despite ongoing 

concerns about the safety of such power in light of the March 2011 

nuclear accident in Japan. In September 2011, we reported that a healthy 

domestic uranium industry is considered essential to ensuring that 

commercial nuclear power remains a reliable option for supporting the 

nation's energy needs" DOE maintains large inventories of uranium that 

it no longer requires for nuclear weapons or as fuel for naval nuclear 

propulsion reactors. A large portion of these inventories consists of 

depleted uranium hexafluoride, otherwise known as "tails"-a byproduct 

of the uranium enrichment process. Recent increases in uranium prices 

could transform these tails into a lucrative source of revenue for the 

government. In addition, DOE maintains thousands of tons of natural 

uranium, which likewise could be sold to utilities or others for additional 

revenue. 

We reported in March 2008 that marketing DOE's excess uranium tails 

could provide billions in revenue for the government 24 In June 2011, we 

reported our estimates of the value of the tails at $4.2 billion; this estimate 

was based on May 2011 uranium prices and enrichment costs and 

assuming sufficient re-enrichment capacity was available. 25 Executed in 

accordance with federal law, sales of natural uranium by DOE could also 

generate additional revenue for the government In September 2011, we 

reported that in seven transactions executed since 2009, DOE has, in 

effect, "sold" nearly 1,900 metric tons of natural uranium into the market, 

using its contractor as a sales agent, and receiving from $109 to $183 per 

kilogram. 26 The total proceeds from these transactions funded over $250 

million in environmental cleanup services by that contractor at the 

Portsmouth uranium enrichment plant DOE characterized these sales as 

23GAO, Excess Uranium Inventories: Clarifymg DOE's Disposition Options Could Help 

Avoid Further Legal Violations, GAO~ 11 ~846 (Washington. D,C .. Sept. 26, 2011) 

24GAO, Nuclear Malena!: DOE Has Severar Potential Options for Dealing wI1h Depleted 

Uranium Tails, Each of Which Could Benefit the Government, GAO~08·606R 

(Washington, D.C.: Mar. 31. 2008) 

25GAO, Nuclear Material: DOE's Dep/eted Uranium Tails Could be a Source of Revenue 

for the Government, GAO-11-752T (Washington, D,C.: June 13, 2011) 

26GAO -11-846. 

Page 15 
34 


78727.024

Contact and 

Acknowledgments 

barter transactions. We reported that while DOE received no cash from 

the transactions, our review found that the agency allowed a sales agent 

to keep cash from the sales, which DOE would otherwise have owed to 

the United States Treasury, thus violating the miscellaneous receipts 

statute." We therefore reported that Congress should consider providing 

DOE with explicit authority to barter excess uranium and to retain the 

proceeds from barters, transfers, and sales. Likewise, Congress could 

direct DOE to sell uranium for cash and make those proceeds available 

by appropriation for decontamination and decommissioning expenses at 

DOE's uranium enrichment plants. Congress has taken some actions in 

response to our work. 2S 

Chairman Stearns, Ranking Member DeGette, and Members of the 

Subcommittee, this concludes my prepared statement. I would be happy 

to respond to any questions you may have at this time. 

For further information regarding this testimony, please contact Frank 

Rusco at (202) 512·3841 or ruscof@gao.gov. COlltact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this statement. Kim Gianopoulos, Chad M. Gorman, Carol 

Herrnstadt Shulman, Kiki Theodoropoulos, Jeremy Williams, Michelle R. 

Wong, and Arvin Wu made key contributions to this testimony. 

Page 16 

statute requires an offlcia! or agent of the government 

government from any source to deposit the money in the U S 

GAO·12·G59T 
35 


78727.025

Related GAO Products 

Department of Energy: Advanced Research Projects Agency-Energy 

Could Improve Its Collection of Infonnation from Applications, 

GAO-12-407T (Washington, D.C.: Jan. 24, 2012) 

2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP 

(Washington, D.C.: Feb. 28, 2012). 

Diesel Pollution: Fragmented Federal Programs that Reduce Mobile 

Source Emissions Could be Improved, GAO-12-261 (Washington, D.C.: 

Feb. 7, 2012). 

Renewable Energy: Federal Agencies Implement Hundreds of Initiatives, 

GAO-12-260 (Washington, D.C.: Feb. 27, 2012). 

Department of Energy: Additional Opportunities Exist to Streamline 

Support Functions at NNSA and Office of Science Sites, GAO-12-255 

(Washington, D.C.: Jan. 31,2012). 

Department of Energy: Advanced Research Projects Agency-Energy 

Could Benefit from Information on Applicants' Prior Funding, GAO-12-112 

(Washington, D.C.: Jan. 13, 2012). 

Recovery Act: Progress and Challenges in Spending Weatherization 

Funds, GAO-12-195 (Washington, D.C.: Dec. 16, 2011). 

DOE Loan Guarantees: Further Actions Are Needed to Improve Tracking 

and Review of Applications, GAO-12-157 (WaShington, D.C .. Mar. 12, 

2012). 

Excess Uranium Inventories: Clarifying DOE's Disposition Options Could 

Help Avoid Further Legal Violations, GAO-11-846 (Washington, D.C.: 

Sept. 26, 2011). 

Nuclear Material: DOE's Depleted Uranium Tails Could be a Source of 

Revenue for the Government, GAO-11-752T (Washington, D.C.: June 13, 

2011). 

Department of Energy: Advanced Technology Vehicle Loan Program 

Needs Enhanced Oversight and Performance Measures, GAO-11-745T 

(Washington, D.C.: June 9, 2011). 

Page 1 GAO·12·659T 
36 


78727.026

(361401) 

Recovery Act: Status of Department of Energy's Obligations and 

Spending, GAO-11-483T (Washington, D.C.: Mar. 17,2011). 

Department of Energy: Advanced Technology Vehicle Loan Program 

Implementation Is Under Way, but Enhanced Technical Oversight and 

Performance Measures Are Needed, GAO-11-145 (Washington, D. C.: 

Feb. 28, 2011). 

Page 2 GAO-12·659T 
37 


78727.027

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38 


78727.028

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39 

Mr. STEARNS. I thank you. 

Mr. FRIEDMAN. 

TESTIMONY OF GREGORY H. FRIEDMAN 

Mr. FRIEDMAN. Mr. Chairman, Ranking Member DeGette, members of the subcommittee, I appreciate the opportunity to testify at 

your request on the work of the Office of Inspector General, and 

our efforts to promote economy and efficiency in the Nation’s $27 

billion annual investment in the Department of Energy’s wideranging set of missions and functions. During the last several 

years, we have issued over 200 reports identifying ways to improve 

operational efficiency and to reduce costs at the Department. 

Through these reviews, we identified millions of dollars in questionable and unsupported costs. 

Since 2009, the major focus of our work has been the Depart- ment’s expenditure of over $35 billion in additional funding from 

the American Recovery and Reinvestment Act. The Recovery Act 

also increased the Department’s loan guarantee authority to over 

$50 billion. This massive new funding stream strained resources, 

stretched the existing infrastructure, and required the establishment of new programs on an expedited basis. Our work in this 

area, which identified both successes and failures, raised what we 

consider to be important issues regarding the prudent expenditure 

of taxpayer provided funds. 

These were reported in our January 2012 report on ‘‘Recovery 

Act Lessons Learned and Best Practices.’’ My focus today, however, 

is on how the Department of Energy can successfully transition 

from its historic levels of funding, including the funding provided 

under the Recovery Act, to the more likely constrained budget levels of the future. In this regard, we develop and publish annually 

a list of the Department’s most significant management challenges. 

These are issues which, in our view, warrant the attention of the 

Department’s senior managers. The full version of my testimony 

discusses these challenges specifically. 

Our management challenges report for 2012 highlighted operational efficiency and cost savings as the Department’s preeminent 

management challenge. As part of this process, we presented for 

consideration five high-dollar-value initiatives, all with potential 

for large payoffs in terms of reducing costs and enhancing corporate economy and efficiency. These included the following. 

First, apply the strategic planning and program analysis disciplines used in the recent Energy Technology Quadrennial Technology Review to the Department’s entire $11 billion per year research, development, and technology portfolio. The purpose being to 

ensure the portfolio is, first, managed effectively, second, funded on 

a priority basis, and third, meeting current policy directions. 

Secondly, eliminate separate National Nuclear Security Administration overhead functions that duplicate existing departmental operations. 

Third, consolidate or realign the Department’s 16 federally funded research and development centers. The Department currently 

spends in excess of $10 billion per year on the FFRDCs, including 

about $3.5 billion per year in overhead administrative expenses. 

We question whether the proportion of funds dedicated to overhead 

40 

administration makes sense, and whether such expenditures can be 

sustained, especially in an austere budget environment. 

Fourth, reprioritize the Department’s $250 billion environmental 

remediation effort by adopting a triage approach in which taxpayers are asked to fund essentially only those projects with a 

near-term impact on health, safety, and environment. 

And finally, consolidate the more than 25 separate protective 

force contract instruments, which are at the core of the Department’s $1 billion per year expenditure for physical security at its 

sites and facilities. 

These initiatives represent significant change to the status quo 

and to existing interests. As a consequence, we recognize and are 

realistic about the fact that implementation would be extremely 

difficult. For example, any meaningful reduction in Department of 

Energy operational costs will require deep and painful staff 

downsizing of the Department’s more than 110,000 Federal and 

contractor personnel. Further, the Department’s laboratory system 

has a rich history of service to the Nation. Any material change in 

the current laboratory structure will be controversial with significant local economic consequences, and frankly, political ramifications. To its credit, the Department has undertaken a number of 

management efforts intended to increase operational efficiency. 

These are briefly discussed in my full testimony. 

The realities of the budget situation, it seems to us, provide the 

Department with a unique opportunity to reassess its mission, reevaluate operating policies and organizational structures, and to 

examine new contractual approaches. We are hopeful that the steps 

outlined in our management challenges report will aid in this regard. We look forward to working with the Department and with 

Congress in addressing these issues. 

This concludes my statement. I will be pleased to answer any 

questions that the subcommittee may have. 

[The prepared statement of Mr. Friedman follows:] 

41 


78727.029

Statement of 

Gregory H. Friedman 

Inspector General 

Before the Subcommittee on Oversight and Investigations 

Committee on Energy and Commerce 

Summary 

The Office of Inspector General promotes the economy and efficiency of the Nation's $27 billion annual 

investment in the Department of Energy's wide-ranging energy, science and national security missions. 

Annually, we indentify the Department's most significant management challenges. Given the concern with 

Federal government expenditures and the mounting U.S. debt, we have concluded that "Operational 

Efficiency and Cost Savings" is the preeminent challenge for 2012. To help achieve this goal, we suggested 

five initiatives to the Department: 

Extending the reach of the Quadrennial Technology Review to guide research. development and 

technology efforts and ensure they are consistent with current policy direction, managed effectively, 

and funded on a priority basis. 

Considering the elimination of separate National Nuclear Security Administration overhead 

operations that duplicate existing Departmental functions. 

Establishing a commission to consolidate support functions and identify opportunities for realignment 

of the 16 Federally Funded Research and Development Centers. 

Rcprioritizing the environmental remediation efforts to adopt a triage approach and fund only those 

projects with a near-term impact on health, safety, and environment. 

Reevaluating the current structure of physical security to identify opportunities for consolidating the 

25 separate protective force contract instruments. 

We believe the Department has a unique opportunity to reassess its operating policies, re-evaluate its 

organizational structure and examine new contractual approaches. 
42 


78727.030

Statement of Gregory H. Friedman 

Inspector General 

U.S. Department of Energy 

Before the 

Subcommittee on Investigations and Oversight 

Committee on Energy and Commerce 

u.s. House of Representatives 

FOR RELEASE ON DELIVERY 

10:30 AM 

April 18, 2012 
43 


78727.031

Mr. Chairman and Members of the Subcommittee: 

I appreciate the opportunity to testify at your request about the work of the Department of Energy's 

Office of Inspector General. My testimony addresses our efforts to promote the economy and 

efficiency of the Nation's $27 billion annual investment in the Department's wide-ranging set of 

missions and functions. 

During the last several years, we have issued over 200 reports identifying ways to improve 

operational efficiency and to reduce cost in many of the Department's programs, including science; 

stockpile stewardship; environmental remediation; worker and community safety; various aspects of 

contract and program management; and, cyber security. Through these reviews, we have identified 

millions of dollars in questionable, unsupported and unresolved costs. For example, we recently: 

I. Identified over $10 million in questioned and unresolved costs related to the operation of 

one of the Department's large national defense laboratories; 

2. Recommended project and financial management improvements for the $3.25 billion 

borrowing authority of one of the Department's power marketing administrations; 

3. Completed a criminal investigation that resulted in a guilty plea by a university research 

professor and the Department's cancellation of a previously-approved $2 million grant; and, 

4. Questioned over $13 million in costs reimbursed by the Department in grants and 

cooperative agreements funded under the American Recovery and Reinvestment Act 

(Recovery Act) of 2009. 
44 


78727.032

Recovery Act 

A major focus of our work has been the Department's implementation and execution of its 

responsibilities under the Recovery Act. The Department received more than $35 billion in 

Recovery Act fi.mding to augment a number of science, energy and environmental initiatives. 

In addition, its authority to make or guarantee energy-related loans increased to as much as 

$52 billion. When viewed collectively, this made the Department one of the largest Federal agency 

recipients of Recovery Act funding. As I have noted in past testimony before this and other 

congressional committees, the influx offunding of this magnitude strained resources, stretched the 

existing infrastructure, forced efforts to overcome a number of institutional barriers, and required 

the establishment of new programs on an expedited basis. The Depaliment undertook an "all hands 

on deck" approach to addressing these challenges. 

As of this date, the Office of Inspector General has completed nearly 80 reviews and a number of 

investigations related to the Department's Recovery Act activities (see the attachment). These 

reports identified a number of successes and failures, and raised what we consider to be important 

issues regarding the prudent expenditure of taxpayer-provided funds, the economic and efficient 

management of Federal programs, and the effectiveness of program execution related to new 

technology in the science and energy arenas. Although our work continues, in January 2012 we 

published an interim overview report entitled, "Lessons Learned/Best Practices during the 

Department of Energy's Implementation of the American Recovery and Reinvestment Act of2009" 

(Special Report OAS-RA-12-03), in which we provided a summary of our work in key areas of 

Departmental operations, including: Risk Management Practices; Financial Management, 

Accounting and Reporting; Human Capital Management; Regulatory Compliance; and, Delivery of 

2 
45 


78727.033

Public Services. It is our hope that this report can be applied broadly by management to improve 

Department operations in the future. 

Significant Management Challenges 

One aspect of our recurring work has been the development of an annual list of the Department's 

most significant management challenges. These represent the issues which, from an Inspector 

General perspective, warrant the immediate and sustained attention of the Department's senior 

managers. Our report entitled, "Management Challenges at the Department of Energy - Fiscal Year 

2012" (Special Report DOEIIG-0858), includes the following issues: 

Contract and Financial Assistance Award Management 

• Cybcr Security 

• Energy Supply 

Environmental Cleanup 

Human Capital Management 

• Nuclear Waste Disposal 

• Stockpile Stewardship 

Incorporated in thc rcport are four additional areas of concern which are part of our "Watch List"-

that is, activities which we believe require intense management attention in 2012 and beyond. The 

"Watch List" includes: 

Infrastructure Modernization 

Loan Guarantee Program 

Safeguards and Security 

Worker and Community Safety 

3 
46 


78727.034

In addition to the challenges already noted, we have added "Operational Efficiency and Cost 

Savings" as the preeminent management challenge for 2012. Given the current concern with 

Federal government expenditures and the mounting U.S. debt, it is clear that the Department must 

address operational efficiencies and cost savings so that it can function and meet its core energy, 

science and national security mission requirements in an environment of limited budgets. In fact, 

the future may well entail funding levels that simply make the programmatic status quo 

unsustainable and which may require rethinking the fundamental structure of the Department and its 

operations. 

In this context, and based on the body of work completed by the Office of Inspector General over 

many years, we presented Ilve initiatives to the Department, which we believe provide opportunities 

to significantly enhance corporate economy and efficiency. These include the following: 

Extend the Reach ofOuadrennial Technologv Review 

The Department spends over $11 billion each year on its science and technology mission. In 

September 20 II, the Department released its Quadrennial Technology Review (QTR). We found 

the QTR, the Ilrst review of its kind to our knowledge, to be an insightful document that raised 

fundamental issues concerning the strategic focus of the Department's energy technology effort. 

The QTR also established a framework for investment in energy technology development paths. 

For example, the QTR concluded that the Department was underinvested in the transportation sector 

and in activities supporting the modernization of the electric power grid. As bcnellcial as it was, the 

QTR was limited to the Department's energy-related technology sector. We concluded that the 

discipline and analytical rigor associated with the QTR process should be applied to the 

Department's entire multi-billion dollar science and technology portfolio. In our view, this would 

4 
47 


78727.035

help guide the Department's research, development and technology efforts, particularly those 

executed through its laboratory system, and would help to ensure that these efforts are consistent 

with current policy direction, managed effectively, and funded on a priority basis. 

Eliminate Duplication of National Nuclear Security Administration (NNSA) Functions 

NNSA, the semi-autonomous Departmental nuclear weapons agency, was created over a decade ago 

in response to national security concerns relating to the management of the Department's three 

weapons laboratories each funded at between $1 billion and $2 billion per year. NNSA, by 

statute, maintains a set of distinctly separate overhead cost operations that often duplicate existing 

Departmental functions for example, in the areas of human resources, congressional affairs, 

procurement and acquisition, information technology, and public affairs. The additional expenses 

associated with these functions are significant, impacting both Headquarters and field operations. 

In addition to cost considerations, these redundancies can complicate communications and program 

execution. We question whether: (i) the benefits of a semi-autonomous NNSA outweigh the 

additional costs; and, (ii) this costly arrangement can be sustained given the likelihood of future 

budget reductions. 

Consolidate Laboratory Functions through the Establishment ofa "BRAC-Style" Commission 

The Department operates 16 Federally Funded Research and Development Centers (FFRDC) with a 

combined annual cost to the taxpayers of more than $10.4 billion. This is in addition to a number of 

other research, development and technology centers which are not categorized as FFRDCs. In 

FY 2009, the Department spent about $3.5 billion, or about 35 percent or total FFRDC laboratory 

operating expenses, on support functions such as executive direction, human resources, 

procurement, legal, safeguards and security, utilities, logistics support, and information services. 

5 
48 


78727.036

This cost structure, specifically the significant proportion of scarce science resources designated for 

administrative and overhead costs for each laboratory, may be unsustainable in the current budget 

environment. In our view, using a blue ribbon commission patterned after the Department of 

Defense's Base Realignment and Closure Commission, the Department should: (i) determine 

whether the Nation can afford to maintain 16 individual FFRDCs and other related research centers 

and their sizeable overhead cost burden, and, (ii) identify opportunities for laboratory consolidation 

and realignment whi Ie minimizing disruption to the Department's overall science mission, 

Reprioritize Environmental Remediation Efforts 

Largely as a result of the U,S, weapons program, which dates back to the Manhattan Project, the 

Department is responsible for a huge inventory of nuclear, hazardous and mixed waste, currently 

found at sites and facilities throughout the United States. The Department has an active 

environmental remediation effort in place to address this problem. It currently estimates that it will 

cost about $250 billion to complete the effort. Funded at about $6 billion per year, environmental 

program costs are largely driven by 37 individually negotiated Federal Facility Agreements that are 

augmented by numerous other local agreements with their own set of actions and requirements at 

Dcpartment sites across the Nation. If available resources for the Department's environmental 

management program are drastically reduced, it is unlikely that the current cleanup strategy can be 

sustained. To address stich shortfalls, we believe that the Department should revise its current 

environmental remediation strategy by adopting an approach which emphasizes addressing 

environmental concerns on a national complex-wide, risk-driven basis. In short, using a form of 

triage, primarily fund only those projects with a demonstrated near-term impact on health, safety 

and environment. 

6 
49 


78727.037

Re-evaluate Current Structure of Physical Security 

Finally, physical security consumes a large portion of the Department's budget and therefore has a 

potential for signiticant cost savings. The Department is responsible for some of the Nation's most 

sensitive sites and spends more than $1 billion per year providing physical security. Of this 

amount, nearly $700 million per year is spent on a complex-wide protective force staff of nearly 

4,000 highly trained paramilitary professional guards. The protective force is made up almost 

exclusively of contractor personnel whose services are procured using three or more distinct 

contract approaches, resulting in at least 25 separate contract instruments that often lack uniformity 

and consistency. It is our view that there may be signiticant economies of scale and related cost 

benefits associated with consolidation of protective force contracting. For example, actions could 

be taken to encourage a more consistent approach to protective force organization, management 

compensation, training and equipment purchases. Accordingly, we believe that the Department 

should consider available options, including a "master contract" (i.e., a single contractor 

nationwide); consolidating protective force contracts using regions of the country, nature of the 

entity, or some other basis; and/or Federalizing the protective force. 

Practical Implications 

We recognize that these proposals will be extremely difficult to implement. For example, any 

meaningful reduction in operational cost will require deep and painful reductions in staff, both 

Federal and contractor. Secondly, the Department's laboratory system, which has essentially been 

unchanged organizationally for about a half-century, has an extraordinarily rich history of service to 

the Nation. Thus, change will be controversial and challenging. And, tinally, the Department's 

facilities are among the most potent economic generators in at least five states, accounting for 

employment of more than I 10,000 personnel. Any material change in this structure will potentially 

7 
50 


78727.038

be disruptive, have significant local economic consequences and, frankly, have political 

ramifications. While we cannot predict the future of the budget process, it appears reasonable to 

conclude that declining budgets are likely. Our proposals are intended to provide a basis for 

discussion by the decision-makers as they prepare for this possibility. 

Departmcnt of Energy Actions 

To its credit, the Department has undertaken a number of management initiatives intended (0 

increase operational efficiency. This includes a new framework for "managemcnt and operational 

excellence." The Department has committed to such actions as realigning roles and responsibilities, 

improving contract and project management, improving transparency, cutting waste, and 

reapportioning savings. Additional Department efforts include programs to reduce the vehicle fleet, 

achieve cost savings associated with building energy efficiency measures, and improve efforts to 

reduce the number of web sites. Similarly, NNSA has introduced plans to consolidate the contracts 

for the Pantex Plant outside of Amarillo, Texas, and the Y -12 National Security Complex in Oak 

Ridge, Tennessee. This is intended to consolidate business and information technology operations 

at these sites. These actions have not yet been reviewed by my office. 

* * * * * 

While the circumstances may be quite challenging, it is our view that the current environment 

provides a unique opportunity to reassess operating policies, re-evaluate organizational structure 

and examine new contractual approaches with a view toward ensuring that important mission 

objectives and core functions can be met. We are hopeful that the steps outlined in our 

Management Challenges report will aid in this effort. 

8 
51 


78727.039

We look forward to working with the Department and Congress in addressing these issues. 

Mr. Chairman, (his concludes my statement and I would be pleased (0 answer any questions that the 

Subcommittee may have. 

9 
52 


78727.040

I. 

2. 

3. 

i 

4. 

5. 

6. 

7. 

i 

, 

8. 

9. 

10. 

Attachment 

Department of Energy Office ofInspector General 

Recovery Act Reports 

Title I Report Number Date Issued 

Department-wide Reports 

Lessons Learned/Best Practices during the OAS-RA-12-03 January 2012 

Department of Energy's Implementation 

of the American Recovery and 

Reinvestment Act 0[2009" 

Review of the Department of Energy's OAS-RA-IO-IS August 2010 

Plan for Obligating Remaining Recovery 

Act Contract and Grant Funding 

Accounting and Reporting for the OAS-RA-I0-06 April 2010 

American Recovery and Reinvestment 

Act by the Department of Energy's 

Funding Recipients 

Management Challenges at the DOE/IG-0832 December 2009 

Department of Energy. 

Selected Department of Energy Program OAS-RA-10-03 December 2009 

Efforts to Implement the American 

Recovery and Reinvestment Act 

The Department of Energy's Quality OAS-RA-I 0-0 I October 2009 

Assurance Process for Prime Recipients' 

Reporting for the American Recovery and 

Reinvestment Act of2009 

Department of Energy's Efforts to Meet OAS-RA-09-04 September 2009 

Accountability and Performance 

Reporting Objectives of the American 

Recovery and Reinvestment Act 

Department of Energy Efforts to Manage OAS-RA-09-03 May 2009 

Information Technology Resources in an 

Energy-Efficient and Environmentally 

Responsible Manner 

Special Report - The Department of IG-RA-09-02 March 2009 

, Energy's Acquisition Workforce and its 

I Impact on Implementation of the 

American Recovery and Reinvestment 

Act 01'2009 

The American Recovery and OAS-RA-09-01 March 2009 

Reinvestment Act at the Department of 

Energy 
53 


78727.041

Attachment (continued) 

Department of Energy Office of Inspector General 

Recovery Act Reports 

Office of Energy Efficiency and Renewable Ener!1.V (EERE) 

II. ' The Department's Management of the OAS-RA-12-04 January 2012 

Smart Grid Investment Grant Program 

12. The Department of Encrgy's Geothcrmal OAS-RA-II-05 March 20 II 

Technologies Program under the 

American Recovery and Reinvestment 

Act 

13. Investigative RepOlt - Management Alert 

on the State Energy Efficient Appliance 

Rebate Program 

14. Review of Allegations Regarding Hiring 

and Contracting in the Office of Energy 

Efficiency and Renewable Energy 

IS. Management Controls over the 

Development and Implementation of the 

Office of Energy Efficiency and 

Renewable Energy's Performance and 

Accountability for Grants in Energy 

Svstem 

16. Progress in Implementing the Advanced 

I 

I Batteries and Hybrid Co~ponents 

Program under the American Recovery 

and Reinvestment Act 

17. The Department of Energy's Program to 

Assist Federal Buyers in the Purchasing 

of Energy Efficient Products 

INV-RA-II-OI 

OAS-SR-IO-04 

OAS-RA-IO-14 

OAS-RA-L-10-04 

OAS-RA-10-08 

EERE - Weatherization Assistance Program 

December 2010 

September 20 10 

July 2010 

April 2010 

April 2010 

18. The Department of Energy's I OAS-RA-12-07 I April 2012 

Funded under the American Recovery and , 

Weatherization Assistance Program I 

Reinvestment Act for the State of New JI , York i 

119 Alleged Misuse of American Recovery ! INS-RA-12-01 I February 2012 

I

I • and Reinvestment Act Grant Funds by the I 

Western Arizona Council of Governments 

I 20. The Department of Energy's American OAS-RA-L-12-03 

Recovery and Reinvestment Act -

Arizona State Energy Program 

21. Examination Report on Action for a OAS-RA-II-21 

Bctter Community, Inc. - Weatherization I 

Assistance Program Funds Provided by 

the American Recovery and Reinvestment 

AClof2009 

22. Examination Report on People's Equal 

Action and Community Effort, Inc. -

OAS-RA-II-20 

January 2012 

September 20 II 

September 2011 
54 


78727.042

23. 

24. 

25. 

26. 

27. 

28. 

29. 

30. 

I 

31. 

Attachment (continued) 

Department of Energy Office of Inspector General 

Recovery Act Reports 

Weatherization Assistance Program 

Funds Provided by the American 

Recovery and Reinvestment Act of2009 

Examination Report on Cuyahoga County OAS-RA-ll-19 September 20 II 

of Ohio Department of DevelopmentWeatherization Assistance Program 

Funds Provided by the American 

Recovery and Reinvestment Aet of 2009 

Examination Report on Community OAS-RA-ll-18 September 20 II 

Action Partnership of the Greater Dayton 

Area - Weatherization Assistance , 

Program Funds Provided by the American 

Recoverv and Reinvestment Act of 2009 

The Department of Energy's OAS-RA-1I-17 September 20 II 

Weatherization Assistance Program under 

the American Recovery and Reinvestment 

Act in the State of Tennessee 

The Department of Energy's OAS-RA-II-14 August 2011 

Weatherization Assistance Program 

Funded under the American Recovery and 

Reinvestment Act for the Commonwealth I 

of Virginia 

The Department of Energy's OAS-RA-II-13 August 2011 

Weatherization Assistance Program 

Funded under the American Recovery and 

Reinvestment Act in the State of Indiana 

The Department of Energy's OAS-RA-II-12 August 2011 

Weatherization Assistance Program under 

the American Recovery and Reinvestment 

Act in the State of Missouri 

The Department of Energy's .OAS-RA-II-09 June 2011 

Weatherization Assistance Program under 

the American Recovery and Reinvestment 

Act in the State of West Virginia 

The Department of Energy's OAS-RA-ll-07 May 2011 I Weatherization Assistance Program ! 

I Funded under the American Recovery and 

, Reinvestment Act for the State of 

Wisconsin 

The Department of Energy's OAS-RA-II-04 February 20 II 

Weatherization Assistance Program under 

the American Recovery and Reinvestment 

Act for the Capital Area Community 

Action Agency - Agreed Upon 

'--__ Procedures I 
55 


78727.043

32. 

33. 

134. 

Attachment (continued) 

Department of Energy Office of Inspector General 

Recovery Act Reports 

The Department of Energy's OAS-RA-II-03 November 2010 

Weatherization Assistance Program under 

the American Recovery and Reinvestment 

Act for the City of Phoenix - Agreed 

Upon Procedures 

Selected Aspects of the Commonwealth OAS-RA-II-02 November 20 I 0 

of Pennsylvania's Efforts to Implement 

the American Recovery and Reinvestment 

Act Weatherization Assistance Program 

The State of I1Iinois Weatherization OAS-RA-II-OI October 20 I 0 

Assistance Program 

35. i The Department of Energy's Use of the OAS-RA-IO-13 June 201 0 

Weatherization Assistance Program 

Formula for Allocating Funds under the 

American Recovery and Reinvestment 

Act 

36. Management Controls over the OAS-RA-IO-J I May 2010 

Commonwealth ofYirginia's Efforts to 

Implement the American Recovery and 

Reinvestment Act Weatherization 

37. ~ssistance Program 

Management Controls over the OAS-RA-10-05 March 2010 

I 

Department's WinSAGA System for 

Energy Grants Management Under the 

Recovery Act 

1

38

. 

Progress in Implementing the Department OAS-RA-10-04 February 2010 

of Energy's Weatherization Assistance 

Program Under the American Recovery i I and Reinvestment Act 

1

39. Management Alert on the Department's OAS-RA-10-02 December 2009 

Monitoring of the Weatherization 

! i Assistance Program in the State of Illinois 

EERE - Energy Efficiency and Conservation Block Grant Program 

40. The State of Nevada's Implementation of OAS-RA-12-02 November 20 I I 

the Energy Efficiency and Conservation 

Block Grant Program 

41. Management Alert on The Status of ·OAS-RA-II-16 September 20 II 

Energy Efficiency and Conservation 

Block Grant Recipients' Obligations 

42. The Department of Energy's Energy OAS-RA-L-II-II September 20 II 

Efficiency and Conservation Block Grant 

I 

Program Funded under the American 

Recovery and Reinvestment Act for the 

State of Pennsylvania 
56 


78727.044

43. 

! 

44. 

45. 

46. 

47. 

48. 

I 

49. 

I 50. 

I 

51. 

1

52

. 

53. 

54. 

155. 

Attachment (continued) 

Department of Energy Office of Inspector General 

Recovery Act Reports 

Thc Department of Energy's OAS-RA-lO-16 August 2010 

Implementation of the Energy Efficiency 

and Conservation Block Grant Program 

under the A merican Recovery and 

Reinvestment Act: A Status Report 

EERE - State Energy Program 

The Department of Energy's American OAS-RA-ll-IO July 2011 

Recovery and Reinvestment Act -

California State Energy Program 

The Department of Energy's American OAS-RA-L-ll-07 April2011 

Recovery and Reinvestment Act - New 

Jersey State Energy Program 

The Department of Energy's American OAS-RA-II-06 March 2011 

Recovery and Reinvestment Act -

Massachusetts State Energy Program 

Management Controls over the OAS-RA-IO-IS September 2010 

Department of Energy's American 

Recovery and Reinvestment Act -

Michigan State Energy Program 

Status Report: The Department of OAS-RA-IO-17 September 2010 

Encrgy's State Energy Program Formula 

Grants Awarded under the American 

Recovery and Reinvestment Act 

The Department of Energy's American ' OAS-RA-L-IO-06 September 20 I 0 

Recovery Act - Georgia State Energy 

Program 

The Department of Energy's American OAS-RA-IO-12 June 2010 

Recovery and Reinvestment Act - Florida 

State Energy Program 

Management Controls over the OAS-RA-10-09 May 2010 

Department of Energy's American 

Recovery and Reinvestment Act -

Louisiana State Energy Program 

Office of Environmental Manal!cment 

The Management of Post-Recovery Act OAS-RA-12-06 February 2012 

Workforce Transition at Office of 

Environmental Management Sites 

Waste Disposal and Recovery Act Efforts ,INS-RA-L-12-01 December 20 II 

at the Oak Ridge Reservation 

Implementation of the Recovery Act at OAS-RA-L-II-12 September 20 II 

the Savannah River Site 

Los Alamos National Laboratory OAS-RA-II-15 August 2011 

Environmental Management Activities 

Funded by the Recovery Act 
57 


78727.045

Attachment (continued) 

Department of Energy Office of Inspector General 

Recovery Act Reports 

56. Department of Energy's Controls over OAS-RA-L-Il-IO July 2011 

Recovery Act Spending at the Idaho 

National Laboratory 

57. Performance of Recovery Act Funds at OAS-RA-L-II-09 July201l 

the Waste Isolation Pilot Plant 

58. Use of American Recovery and OAS-RA-L-ll-08 May 2011 

Reinvestment Act of2009 Funds on Solid 

I Waste Project Activities at the 

Department of Energy's Hanford Site 

59. Management of the Tank Farm Recovery OAS-RA-L-II-03 February 20 II 

Act Infrastructure Upgrades Project 

1

60. Audit of Environmental Cleanup Projects OAS-RA-L-II-02 Decem ber 20 I 0 

Funded by the Recovery Act at the Y -12 

I National Security Complex 

61. Management of the Plutonium Finishing OAS-RA-L-II-OI November 20 I 0 

Plant Closure Project 

62. Decommissioning and Demolition OAS-RA-L-IO-05 August 2010 

Activities at Office of Science Sites 

1

63

. 

Waste Processing and Recovery Act OAS-RA-IO-IO May 2010 

Acceleration Efforts for Contact-Handled 

Transuranic Waste at the Hanford Site 

164. Moab Mill Tailings Cleanup Project OAS-RA-L-IO-03 April 2010 

65'1 Management Alert on Environmental OAS-RA-lO-07 April 2010 

Management's Select Strategy for 

Disposition of Savannah River Site , Depleted Uranium Oxides 

66. Special Inquiry Report - Review of S091S024 December 2009 

Allegations Involving Potential 

Misconduct by a Senior Office of 

Environmental Management Official 

Office of Science 

67. Recovery Act Funded Projects at the OAS-RA-L-12-02 January 2012 

Lawrence Berkeley National Laboratory 

1

68

. 

The 12 GcV CEBAF Upgrade Project at OAS-RA-L-II-13 September 20 II 

Thomas Jefferson National Accelerator 

Facility 

69. Department's Management of Cloud OAS-RA-L-II-06 April201l 

Computing Services 

170. Recovery Act Funded Projects at the OAS-RA-L-II-05 March 2011 

~LAC National Accelerator Laboratory 

i 71. I The Department's Infrastructure OAS-RA-L-II-04 March 2011 

I 

Modernization Projects under the 

Recoverv and Reinvestment Act of 2009 

72. Office of Science's Energy Frontier OAS-RA-L-IO-09 August 2010 

Research Centers 
58 


78727.046

73. 

! 74. 

1-

175. 

76. 

I 

~77 I 

: 

i 78. 

I 

I 

1

79 

I 

Attachment (continued) 

Department of Energy Office ofInspcctor General 

Recovery Act Reports 

Audit of Fermi National Accelerator OAS-RA-L-10-02 April 2010 

Laboratory's NOv A Project 

The Department of Energy's Management OAS-RA-L-I0-0l April 2010 

of the NSLS-II Project 

Advanced Research Projects Agency - Energy 

The Advanced Research Projects Agency OAS-RA-Il-ll August 2011 

- Energy 

Loan Guarantee Program 

The Department of Energy's Loan DOE/IG-0849 I March 2011 

Guarantee Program for Clean Energy 

Technologies I 

Office of the Chief Financial Officer 

Special Inquiry on the Office of the Chief OAS-RA-L-12-01 November 2011 

Financial Officer's In formation 

Technology Expenditures 

Office of Fossil Energy 

Management Alert on Planned Actions OAS-RA-II-08 April 2011 

Related to the National Energy 

Technology Laboratory's SimulationBased Engineering User Center 

Western Area Power Administration 

Management Alert on The Western Area IOAS-RA-12-01 November 20 II 

Power Administration's Control and 

Administration of American Recovery 

and Reinvestment Act Borrowing 

Authority I 
59 

Mr. STEARNS. Thank you for your statement. 

Mr. Johns, you are recognized for 5 minutes. 

TESTIMONY OF CHRISTOPHER JOHNS 

Mr. JOHNS. Thank you, Mr. Chairman. Good morning, Mr. Chairman, Ranking Member DeGette, and members of the subcommittee. Thanks for the opportunity—— 

Mr. STEARNS. Do you have your mic on? 

Mr. JOHNS. My apologies. 

Thank you for the opportunity to speak to you today about the 

monitoring oversight efforts related to developing the Department 

of Energy’s fiscal year 2013 budget request, and the effective implementation of the American Recovery and Reinvestment Act. I 

would like to provide you a summary of my written testimony and 

respectfully request that the full testimony be entered into the 

record. 

Mr. STEARNS. By unanimous consent, so ordered. 

Mr. JOHNS. Thank you, sir. 

As budget director for the Department of Energy, my role is to 

oversee the development and implementation of the Department’s 

budget for the purposes authorized and appropriated by Congress. 

Through the application of sound budget and financial management, the Department is committed to making the most productive 

use of taxpayer’s dollars. 

The Department of Energy is steadfast in its commitment to 

produce annual budgets that reflect the Nation’s highest priorities, 

apply public resources wisely, and execute those resources effectively and efficiently. We review our financial status carefully, conduct senior level reviews of performance, and report our monthly 

balances to select congressional committees. We assess the availability of balances from prior-year appropriations, using them 

where appropriate to offset requests for new budget authority and 

to respond to emerging programmatic needs. 

Our annual budget formulation efforts reflect our commitment to 

the wise use of public resources, and our program offices start preparing budget requests more than a year before they are submitted 

to Congress. The Office of Budget then coordinates a comprehensive corporate review chaired by senior Department officials during 

the summer months, which results in a budget for submittal to the 

Office of Management and Budget in the fall, and then to you in 

February. 

Annually, each program’s budget is built and reviewed, including 

an in-depth analysis of program priorities on a line-by-line basis, 

proposed tradeoffs, including use of any available balances, and an 

analysis of cross cutting subjects. During this process, the formulation material is analyzed to ensure proper coordination and to 

eliminate duplication where possible. 

Your committee has heard Secretary Chu testify to the administration’s priority of promoting economic growth and strengthening 

national security using an ‘‘all-of-the-above’’ strategy that develops 

every source of American energy. The President wants to fuel our 

economy with domestic energy sources while increasing our ability 

to compete in the global clean energy race. Guided by that presidential vision, the Department’s 2011 strategic plan and our inauVerDate Aug 31 2005 14:05 Feb 12, 2013 Jkt 037690 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 F:\11425C~1\112-13~1 WAYNE
60 

gural Quadrennial Technology Review, our fiscal year 2013 budget 

request of $27.2 billion invests in three broad priorities: accelerating the transformation of America’s energy system and securing U.S. leadership in clean energy technologies, investing in mission relevant science and innovation to promote our Nation’s economic prosperity, and keeping Americans safe by enhancing nuclear security through defense, nonproliferation, and environmental 

clean up. 

We can achieve these priorities through a continuing commitment to fiscal responsibility and management excellence. 

On Recovery Act, our Recovery Act investments as passed by 

Congress in February, 2009, are putting Americans back to work, 

making our homes and businesses more energy efficient, increasing 

the use of clean and renewable electricity, cutting our dependence 

on oil, and modernizing the electric grid. As these clean energy 

projects continue over the coming months, we will continue to see 

jobs added in local communities, further fueling our economic recovery. 

The Department of Energy received $35.7 billion in Recovery Act 

funding. Included in this amount were $33.2 billion in contracts, 

grants, reimbursable work, and borrowing authority, and $2.5 billion in 1705 credit subsidy. Oversight of the Recovery Act has been 

a top priority for the Department. Even before the Recovery Act 

was passed, the Department took steps to anticipate agency demands for the management and oversight of proposed funding. We 

created a tiered implementation plan from the Department to individual programs, and defining projected results and specific 

timelines. DOE uses these plans to measure our own performance 

and to trigger corrective actions if a project is found to be—from 

this plan. 

As we established the Recovery Act procedures, the Department, 

with the help of the Inspector General, anticipated the need for 

heightened oversight. The Inspector General conducted a number 

of preventative audits up front, documenting issues they identified 

over the last decade in any program receiving funds from the Recovery Act. The review supported our development of comprehensive risk management plans for each program. Before any Recovery 

Act awards were issued, the Department required the submission 

of detailed risk plans for every designated Recovery Act project, 

over 150 in total. We also analyzed all relevant IG and GAO reports, including those focused on similar programs in other agencies, and incorporated those lessons learned. 

The Recovery Act has improved the Department’s capacity to 

make sound decisions efficiently, and to resolve issues in real time. 

Most importantly, the increased emphasis on transparency and accountability will improve the oversight of programmatic funding 

into the future. 

Mr. Chairman, I would again like to thank you for inviting me 

to testify today on behalf of the Department of Energy, and I look 

forward to answering your questions. 

[The prepared statement of Mr. Johns follows:] 

61 


78727.047

Statement of Christopher ,Johns 

Director, Officc of Budget 

U.S. Department of Energy 

Before the 

Subcommittee on Oversight and Investigations 

Committee on Energy and Commerce 

U.S. House of Representatives 

April 18, 2012 

Good morning. Chairman Stearns, Ranking Member DeGette, and Members of the 

Subcommittee, thank you for the opportunity to speak about monitoring and oversight efforts 

related to Department of Energy's FYI3 budget process and the effective implementation of the 

American Recovery and Reinvestment Act (Recovery Act). As Budget Director, my role is to 

oversee the development and execution of the Department's budget for the purposes authorized 

and appropriated by Congress. Through the application of sound budget and financial 

management, the Department is committed to making the most productive use of taxpayer 

dollars. 

DOE Budget Process Overview 

DOE is steadfast in its commitment to produce annual budgets that reflect the Nation's highest 

priorities, apply public resources wisely and execute those resources effectively and efficiently. 

The Department reviews its financial status carefully, conducts senior-level reviews of 

performance, and reports monthly its balances to select Congressional Committees. We review 

our balances from prior year appropriations, using them where appropriate to offset requests for 

new budget authority and to respond to emerging programmatic needs. 

Our annual budget formulation efforts ret1ect OUf commitment to the wise usc of public 

resources. Our Program Offices start preparing budget requests more than a year before they are 

submitted to Congress. The Office of Budget coordinates a comprehensive "corporate review" 

during the summer months, which results in a budget for submittal to the Office of Management 

and Budget (OM B) in the fall. The annual process involves a structured build and review of 

each program's submission that includes an in-depth analysis of program priorities on a line-by-
62 


78727.048

line basis, proposed trade-ofts, including a review of the plans for use of unobligated and 

Ullcostcd financial balances, and an analysis of crosscutting subjects. During this process, the 

formulation material is analyzed to ensure proper coordination and to eliminate duplication of 

effort. The Department's senior leadership and OMB are engaged throughout the budget process 

to determine DOE's funding request levels including the management and oversight of prior year 

appropriations that were not expended. 

Senior leadership remains involved during the execution phase of the budget. Leadership 

convenes to conduct the Business Quarterly Reviews (BQRs), which are used to evaluate the 

Department's progress against the set of key goals identified in the Strategic Plan; assess our 

progress in implementing critical management reforms; highlight the status of executing 

projects; identify roadblocks to project execution; and examine other core business and 

operational activities in the Department. Program offices also review their progress individually 

011 goals and projects and provide periodic status reports to senior leadership. 

The BQRs evolved from 'best practices' developed and applied in the planning and execution of 

our American Recovery and Reinvestment Act of2009 appropriations, and are also a central part 

of DOE's response to the Government Performance and Results Modernization Act of20 I O. 

Due to the ongoing, multi-year nature of most of the Department's programs, DOE has generally 

received appropriations from Congress that enable the Department to carry forward unobligated 

balances into subsequent fiscal years. These balances are used only for the activities for which 

they were appropriated unless the Department requests a reprogramming; the funds are 

rescinded; the funds arc used to satisfY a Use of Prior Year Balances reduction included in an 

annual appropriations bill; or the funds are used in our request to reduce the Department's new 

budget authority requirements. 

The FY 2013 Budget Request 

When Secretary Chu testified before the Committee on Energy and Commerce last month, he 

outlined the Administration's priority of promoting economic growth and strengthening national 

2 
63 


78727.049

security using an all-of-the-above strategy that develops every source of American energy. The 

President wants to fuel our economy with domestic energy resources while increasing our ability 

to compete in the global clean energy race. 

Guided by the President's vision, the Department's 2011 Strategic Plan and our inaugural 

Quadrennial Technology Review (QTR), our FY13 budget request 01'$27.2 billion invests in the 

f()lIowing priorities: 

• Accelerating the transformation of America's energy system, and securing U.S. 

leadership in clean energy technologies; 

• Investing in mission-relevant science and innovation to promote our nation's economic 

prosperity; and 

• Keeping Americans safe by enhancing nuclear security through defense, 

nonproliferation and cnvironmental cleanup. 

These priorities will be enabled through a continuing commitment to fiscal responsibility 

and management excellence. 

Meeting existing commitments and planning for future needs cannot be done without careful 

analysis and evaluation of program priorities. Analyzing our work at the program/project and 

SUb-program/project level of detail has enabled us to make the tough choices required in these 

challenging fiscal times while staying true to our commitment to fiscal responsibility. In making 

these reductions we have carefully considered guidance from the Administration and Congress 

by looking to less effective, potentially duplicative or overlapping, or unneeded programs or 

activities first for reductions or eliminations. 

Recovery Act Oversight 

Passed by Congress in February 2009, Recovery Act investments are putting Americans back to 

work making our homes and businesses more energy efficient, increasing the use of clean and 

renewable electricity, cutting our dependence on oil, and modernizing the electric grid. As these 

3 
64 


78727.050

clean energy projects continue over the coming months, we'll continue to see jobs added in local 

communities, further fueling our economic recovery. 

DOE received $35.7 billion-including $33.2 billion in contracts, grants, reimbursable work, and 

borrowing authority; $2.5 billion in 1705 credit subsidy-in Recovery Act funding to support 

clean energy projects that are developing infrastructure and technology to address the nation's 

energy issues and position the U.S. for leadership in long-term, clean energy industries. 

DOE has consistently been supporting between 35,000-50,000 direct jobs each quarter since 

Summer 20 I O. In the first quarter of20 12 alone, DOE supported nearly 38,000 direct jobs. 

As of March 31,2012, Department of Energy has outlaid $24.7 billion-69 percent of total 

funds)-supporting over 15,000 clean energy projects across the country. Over the last 12 

months, DOE has averaged 92 percent of its payment plan for the past 12 months. 

Oversight of the Recovery Act has been a top priority for the Department. Aggressive 

monitoring systems that have been put in place are ensuring that taxpayers' dollars are used 

efficiently and effectively for the purposes intended. The Recovery Act has improved 

Departmental capacity to make sOLind decisions efficiently, keeping program and functional 

leaders aligned towards meeting common priorities and resolving issues in real time. Most 

impOIiantly, the increased emphasis on processes to increase transparency and accountability 

will improve the oversight of programmatic funding into the future. 

Improving Oversight and Monitoring of DOE Program and Recovery Act Funds 

Audits and inspections conducted by the DOE Office ofinspector General (IG) and the 

Government Accountability Office (GAO) are an integral part of the Depatiment's monitoring 

and oversight eftorts for both Program and Recovery Act funds. At DOE. we take the work of 

the Inspector General and GAO seriously and welcome input on how to promote the effective, 

efficient, and economical operation of all programs. We are committed to facilitating their work 

and addressing the substantive issues they identify. IG and GAO recommendations help the 

4 
65 


78727.051

Department to improve our programs, identity opportunities for cost savings and operational 

cniciencics, and ensure that DOE is a strong steward of taxpayer dollars. 

Recovery Act 

Even before the Recovery Act was passed, the Department had taken steps to anticipate agency 

demands for the management and oversight of this ftmding. We created an Agency-wide plan 

specifying the anticipated goals of Recovery Act funding. From there, we developed Program 

level plans, which specified in greater detail the projected results and when those results would 

be achieved. Internally, DOE uses these plans to measure our own performance, and if a project 

was oft:plan, the Department took actions to get the project back on track. 

Additionally, iPortal, an online financial interface and database that provides users with a 

standard set offinancials for departmental and public review, serves as a centralized repository 

of ARRA financial reports, impact metrics, and reporting guidance and consolidates data from 

mUltiple sources, including the Department's accounting system, its procurement system, and 

FederaIReporting.gov. iPOIial provides the Department with continuous real time access to key 

information on obligations, payments, jobs, impact metrics, and milestones, enabling the 

Department's management to identify and address problem areas early. Most of this information 

is also made available to the public through DOE's website and Recovery.gov. 

In establishing the Recovery Aet proeedures, the Department, with the help of the Inspector 

General, anticipated the need for heightened oversight. The I nspector General conducted a 

number ofprevenlative audits up front, documenting issues they identified over the last decade 

in any program receiving funds under the Recovery Act. This review supported our 

development of comprehensive risk management plans for each program. Before any Recovery 

Act awards were issued, the Department required the submission of detailed risk plans for every 

designated Recovery Project-over 150 in total. We also analyzed all relevant IG and GAO 

reports, including those focusing on similar programs at other agencies and incorporated the 

lessons learned from the IGs of other agencies (including the Departments of Housing and 

Urban Development and Health and Human Services) into these risk plans. The risk plans are 

5 
66 


78727.052

living documents, and Departmental officials update the plans as necessary for key projects to 

ensure that execution risks are identified and mitigated. 

As part of our comprehensive risk management efforts for Recovery Act programs, we worked 

with the Recovery Accountability and Transparency Board-which is made up of Agency IGsto develop ways of identifying recipients that may require closer monitoring and oversight. As 

part of this effort, we are also receiving real-time alerts on potentially problematic developments 

related to our recipients, which we share with the Inspector General. as appropriate. 

The Department has undertaken major initiatives to ensure complete post-award audit coverage 

oCal1 major recipients of DOE grants and cooperative agreements. We've put new processes in 

place to better leverage the government-wide audit requirement for non-profit recipients and 

state and local governments, as defined by the Office ofManagcment and Budget Circular A133. For the for-profit recipients, we provided detailed guidance for the recipients' audit firms 

outlining the issues they should review when conducting required annual audits; this guidance 

implements a pre-existing DOE audit requirement. The Department has also established 

centralized processes to track and ensure the resolution of these audit findings. 

Conclusion 

Mr. Chairman, I would like to thank you again for inviting me to testifY on behalfofthe 

Department of Energy about its budget process and effective implementation ofthe American 

Recovery and Reinvestment Act. I look forward to answering your questions. 

6 
67 

Mr. STEARNS. I thank the panel and I will start with my questions. 

Mr. Johns, you are the main man. You are the director at the 

Office of Budget at the Department of Energy, so my questions will 

start with you. 

As I understand it, in the year 2000, the budget of the DOE was 

roughly $17 billion. Is that true? 

Mr. JOHNS. Yes, sir. 

Mr. STEARNS. And the budget for 2013 is roughly $27.2 billion, 

is that correct? 

Mr. JOHNS. Yes, sir. 

Mr. STEARNS. And it increased over last year by 3.2 percent, 

roughly? 

Mr. JOHNS. Yes, sir. 

Mr. STEARNS. But that amount does not include the $35.7 billion 

DOE has received from the 2009 Recovery Act, is that correct? 

Mr. JOHNS. Correct. 

Mr. STEARNS. Now as I go back and look at the number of employees you had in 2000, you had roughly 15,700 at the Department of Energy, is that correct, in the year 2000? 

Mr. JOHNS. I don’t know that particular number. 

Mr. STEARNS. And in the year 2011, you had roughly 14,600, is 

that approximately correct? 

Mr. JOHNS. Yes, sir. 

Mr. STEARNS. And the number of contractors during this period 

stayed the same, is that roughly an accurate—— 

Mr. JOHNS. That is my understanding. 

Mr. STEARNS. OK, which is about 100,000, is that correct? 

Mr. JOHNS. Yes, sir. 

Mr. STEARNS. So you had a $10 billion increase over this period 

of time, that is roughly 5 percent every year. Incidentally, during 

this 5 percent increase every year, from 2008, ’09, and ’10, when 

we had the critical recession, did Department of Energy increase 

their budget every year? Yes or no? I assume they did. 

Mr. JOHNS. They—it was relatively flat. 

Mr. STEARNS. Like 3 or 4 percent. 

Mr. JOHNS. Yes. 

Mr. STEARNS. OK, 3 or 4 percent. OK. If you increase your budget this year by $10 billion and the number of employees stayed 

roughly the same, the number of contractors stayed the same, then 

the question is where is the money going? Despite the relatively 

stable workforce, where is that $10 billion going if it is not contractors and it is not employees? Where is it going? 

Mr. JOHNS. Yes, sir. Part of the increase over that time—and I 

would need to get back to you with specifics line-by-line—but in 

general, part of that increase is the increase in the cost of and the 

infrastructure that—— 

Mr. STEARNS. So you are saying everything is inflation? 

Mr. JOHNS. No, sir, not everything is inflation. 

Mr. STEARNS. OK, what is the reason? 

Mr. JOHNS. It is increases in the infrastructure that we are buying and paying for, the cost of that. We are building new capabilities, new technologies. 

68 

Mr. STEARNS. And you did this without increasing the contractors or the number of employees? 

Mr. JOHNS. I would need to get back to you. 

Mr. STEARNS. OK. I have here Executive Order 13589 that was 

issued on November 9, 2011. Are you aware of it? If not, I can give 

you a copy. 

Mr. JOHNS. Yes, sir. 

Mr. STEARNS. In this case, the President instructed all Federal 

agencies to establish a plan for reducing the combined costs associated with travel, employee information technology devices, printing, motor vehicles, fleet, and promotional items. And the Executive Order required an answer submitted to the Office of Management and Budget within 45 days of this order. Has the Department 

of Energy done this? Yes or no? 

Mr. JOHNS. Yes. 

Mr. STEARNS. We have not seen it. Can you submit it to us? Do 

you have it with you? 

Mr. JOHNS. I don’t have it with me right now. 

Mr. STEARNS. Because we have not seen it. 

Mr. Rusco, have you seen it? 

Mr. RUSCO. No, I have not. 

Mr. STEARNS. No. Mr. Friedman, have you seen it? 

Mr. FRIEDMAN. I have, Mr. Chairman. 

Mr. STEARNS. And when did you get a copy of it? Do you remember? 

Mr. FRIEDMAN. I asked for it within the last week, and that is 

when I received it. 

Mr. STEARNS. So actually, this whole thing was issued 2011 and 

it was supposed to be in 45 days of that order. It appears, Mr. 

Johns, that the Department of Energy did not comply with that 45- 

day order of this Executive Order. Is that true? 

Mr. JOHNS. I need to look back at the dates, but I believe we did 

or nearly there. 

Mr. STEARNS. But he just—Mr. Friedman just got it just recently, 

a week ago. I mean—— 

Mr. JOHNS. I understand. 

Mr. STEARNS [continued]. I think the point I am trying to make 

is we don’t see the Department of Energy being compliant with 

even the Executive Order which the White House issued and then 

wanted a 45-day response. 

Mr. Johns, in DOE’s November 15, 2011, letter to the committee, 

you acknowledged that it is absent from the list of 15 agencies that 

heeded the President’s April 2009 Executive Order to Cabinet Secretaries to identify $100 million in budget cuts by July 2009, is 

that correct? 

Mr. JOHNS. That is correct, although we have done so internally, 

even though we were not requested to do that. 

Mr. STEARNS. So we have the President’s order in 2009, and you 

have admitted this morning that you did not comply with that in 

a timely manner. Is that a fair statement? 

Mr. JOHNS. Well sir, I would say that the order requires that we 

submit our plan to OMB, which we have done. So we did comply 

with that. 

69 

Mr. STEARNS. You identified $100 million in budget cuts for that 

year, 2009? 

Mr. JOHNS. I am sorry, the Executive Order requiring us—the recent one, 13589 that requires that we submit a plan in 45 days, 

we submitted that plan to OMB in December of 2011. 

Mr. STEARNS. Is it possible we could get a copy of that? 

Mr. JOHNS. Well let me check on the request. 

Mr. STEARNS. OK. Let me ask you now, knowing what you know, 

what I just asked you in questions, are there additional proposed 

terminations or cuts that have not been made that you are proposing in the year 2013, accompanying the President’s budget? I 

mean, here he gave you something in 2009. It appears you didn’t 

comply. You are not even sure you can give us a copy of what you 

complied with. The people at the witness stand really didn’t get a 

copy. One of them, Mr. Friedman, just got it a week ago. So the 

question is, are there any additional proposed cuts, termination 

fees that you are going to apply for the next 2013 budget? 

Mr. JOHNS. Sir, the budget that we submitted in February of this 

year included other cuts, included cuts consistent with the Executive Order, the implementation of the Executive Order—— 

Mr. STEARNS. Where? Where are these cuts? 

Mr. JOHNS. You would see them in the program direction 

lines—— 

Mr. STEARNS. No, specifically, are they—can you tell me what 

they are? 

Mr. JOHNS. Happy to. 

Mr. STEARNS. Just briefly, I won’t take—— 

Mr. JOHNS. As you identified, there are several areas. I will highlight a few here. In travel we were asked—in most of these cases 

asked to reduce by 20 percent. We have identified—$12.6 million 

is the target for reducing travel. We track that progress throughout 

the year. We have already achieved some savings there. 

Mr. STEARNS. Well, would it be safe to say that the only place 

you have cut is travel? 

Mr. JOHNS. No, sir. No, sir. 

Mr. STEARNS. OK. 

Mr. JOHNS. We have made reductions in printing, we have made 

reductions in advisory services, significant reductions in—— 

Mr. STEARNS. And the total is—how much is that total? 

Mr. JOHNS. The total identified was $473 million over 3 years. 

Mr. STEARNS. OK. I thank you, and my time is expired. The 

gentlelady from Colorado is recognized. 

Ms. DEGETTE. Thank you very much, Mr. Chairman. 

I am a little bit confused, frankly, about the DOE budget because 

I keep hearing you, Mr. Chairman, and others on your side of the 

aisle talking about the budget, and so Mr. Johns, I know you 

haven’t been at the DOE since 2001, but I just want to ask you 

about some of these numbers. 

Now what I am told is in fiscal year 2001, which was the first 

year of the Bush administration, the DOE enacted budget was 

$20.1 billion. Is that correct? 

Mr. JOHNS. Thereabouts. I don’t remember the exact number, but 

yes. 

70 

Ms. DEGETTE. OK, and the final DOE enacted budget of fiscal 

year 2009, the DOE budget was $33.8 billion. Is that correct? 

Mr. JOHNS. Correct. 

Ms. DEGETTE. So that would be about a 65 percent total increase 

in the DOE budget under President Bush, is that correct? 

Mr. JOHNS. Thereabouts, yes, ma’am. 

Ms. DEGETTE. Now, as I said in my opening statement, the DOE 

enacted budget, not including the ARRA money, which was designed to be a one-time stimulus for the economy, the DOE enacted 

budget for fiscal year 2012, the core budget was $27.2 billion. Is 

that correct? 

Mr. JOHNS. For 2012? 

Ms. DEGETTE. Yes. 

Mr. JOHNS. 2013 request is $27.2. 

Ms. DEGETTE. OK, the request for 2013 is—so that is a decrease 

in the core budget, is that right? 

Mr. JOHNS. From the 2009 level? 

Ms. DEGETTE. Yes. 

Mr. JOHNS. Yes, ma’am. 

Ms. DEGETTE. OK. So under the Bush administration, the DOE 

budget, not including the ARRA money which came in 2009, it increased 65 percent and the DOE budget under President Obama is 

decreasing around 20 percent. Is my math correct? 

Mr. JOHNS. Yes, ma’am. 

Ms. DEGETTE. OK. You wanted to add something? 

Mr. JOHNS. I was going to say that part of the increase in the 

2009 budget is a one-time ATVM credit subsidy, but—— 

Ms. DEGETTE. Exactly. 

Mr. JOHNS [continued]. In general, that is about—— 

Ms. DEGETTE. Of about $7.5 billion, right? 

Mr. JOHNS. Yes. 

Ms. DEGETTE. Right, OK. 

So now you had talked to the Chairman about some of the places 

you are cutting, and I just wanted to ask you about some of the 

other places that you are cutting. In the 2013 budget request, you 

are proposing eliminating $4 billion in fossil fuel subsidies, right? 

Mr. JOHNS. Yes, ma’am. 

Ms. DEGETTE. You are proposing cutting funding for nuclear energy activities, right? 

Mr. JOHNS. Yes, ma’am. 

Ms. DEGETTE. And you are proposing cutting funds for the DOE 

Office of Public Affairs and Office of Management, is that right? 

Mr. JOHNS. Yes, ma’am. 

Ms. DEGETTE. Offhand, do you know how much you are going to 

cut in that office? 

Mr. JOHNS. In those offices specifically I would have to get back 

to you, but overall in our departmental administration, which is 

where those two offices lie, we are proposing to cut $45 million. 

Ms. DEGETTE. And here is my question. Has the DOE proposed 

reducing salaries for any of its employees? 

Mr. JOHNS. I am not aware of reducing salaries, but as with the 

rest of the Federal Government, we are under a pay freeze and 

then had a small increase in 2013. 

71 

Ms. DEGETTE. OK. And the Inspector General recommended cutting back on certain contractor costs. Has the DOE proposed any 

contractor cost reductions in its budget request? 

Mr. JOHNS. I would need to get back to you on specifics, but in 

general, we have engaged in an effort over the last several years 

to reduce contracting costs. That is part of the Executive Order and 

part of the work that we have been doing. 

Ms. DEGETTE. OK. And—but at the same time, the DOE is trying to figure out strategically where we should invest so that we 

can become energy independent and that we can support some sectors where maybe we do need some help, right? 

Mr. JOHNS. Yes, ma’am. 

Ms. DEGETTE. So like for example, the DOE budget does not 

make significant cuts in renewable energy and energy efficiency 

programs, is that right? 

Mr. JOHNS. That is correct. 

Ms. DEGETTE. So do you think that the DOE can do more to increase its efficiency and ability to further our energy goals in this 

country? 

Mr. JOHNS. Absolutely. 

Ms. DEGETTE. What other things can we do, do you think? 

Mr. JOHNS. Well, we are engaged—some of these things are 

small things that will never be highlighted in a budget document, 

but things that we in the budget office are doing every day. Other 

things are efforts engaged in by the programs to reduce, as you 

suggested, contracting costs, to be more efficient about the work 

that we do. So we are engaging in those kinds of efforts every day. 

Ms. DEGETTE. Mr. Friedman, one thing you talked about was on 

some of the ARRA money, the DOE really struggled to ramp up so 

they could spend that money efficiently. Do you think that they 

have now been able to disburse those monies efficiently and are 

they going to be able to scale down, and if not, what can they do 

to improve that? 

Mr. FRIEDMAN. Well, Ms. DeGette, the last time I looked at the 

numbers, which was in the last 10 days or so, virtually all of the 

$35 billion has been obligated and only 2/3 of it has been spent. So 

there is still 1/3 of ARRA money which has not been spent. And 

we view that as the most important benchmark in terms of spending stimulus funding. We have a disagreement with the Department on that analysis. So we think—but a lot of the impediments 

that originally existed—after all, it has been 3 years—— 

Ms. DEGETTE. Right. 

Mr. FRIEDMAN [continued]. Since the passage of the Act. A lot of 

the impediments have been worked through and we think they are 

prepared to spend more—— 

Ms. DEGETTE. And you think they should just get that—but you 

don’t want them just to throw the money out there, you want them 

to spend it in an efficient way, right? 

Mr. FRIEDMAN. It is a Venn diagram. Spend it quickly, spend it 

well. Put them together. 

Ms. DEGETTE. Right, perfect. 

Thank you very much, Mr. Chairman. 

Mr. STEARNS. The gentleman from Texas is recognized for 5 minutes. 

72 

Mr. BARTON. Thank you, Mr. Chairman. 

Mr. Johns, are you a political appointee or civil service? 

Mr. JOHNS. I am a civil servant, sir. 

Mr. BARTON. Civil servant. Do you have any control over rejecting or approving spending, or is your role merely coordinative and 

advisory? 

Mr. JOHNS. It is coordinating and advising. I am providing recommendations to the senior leadership. 

Mr. BARTON. OK, so if you see something that you don’t think 

needs to be spent, you can’t deauthorize the voucher, refuse to sign 

it, you could just send a note to the Secretary or Assistant Secretary and express your concerns. Is that correct? 

Mr. JOHNS. In the end that is correct, sir. 

Mr. BARTON. OK. I notice it looks like you have an iPad. 

Mr. JOHNS. Yes, sir. 

Mr. BARTON. Is it hooked up to the Internet? 

Mr. JOHNS. It is in general. It is not at the moment. 

Mr. BARTON. OK, then why is it there? 

Mr. JOHNS. Why is it there? 

Mr. BARTON. Yes. 

Mr. JOHNS. Because I have my testimony on this. 

Mr. BARTON. So it is not—I wanted to ask you some questions 

and have you real time look it up instead of, ‘‘I will get back to 

you,’’ so I was hoping it was wired into the Internet. 

Ms. DEGETTE. If you want me to, I will look it up. I have got my 

iPad here. 

Mr. BARTON. I bet he had the codes quicker—and not that you 

don’t, Diana, but I have a feeling it would take you and I a long 

time just to get to the DOE Web site. 

Well, my first question is do you know how much DOE spent on 

travel last year? 

Mr. JOHNS. I could do the math for you. I don’t have the number 

off the top of my head. 

Mr. BARTON. Do either of my other two witnesses know that 

number? 

Mr. FRIEDMAN. I don’t know the answer, Mr. Barton, but what 

is really interesting is that the amount of money spent by the Federal employees is a paltry amount compared to the amount of 

money spent by the facility management contractors at the Department, and that is where the big bucks obviously are. 

Mr. BARTON. Do you want to put numbers on those? When you 

say paltry, that is a pretty general term. 

Mr. FRIEDMAN. I have not looked at the number. My understanding is it is in the $60 million-a-year range. 

Mr. BARTON. Sixty million for the contractors? 

Mr. FRIEDMAN. No, no, $60 million for the Feds. 

Mr. BARTON. Oh, that is paltry. 

Mr. FRIEDMAN. Compared to the contractors. Let me be clear 

about that. 

Mr. BARTON. OK. If $60 million is paltry, you are saying the contractors spend several hundred million on travel? 

Mr. FRIEDMAN. I don’t have that analysis. I would suspect several hundred million is an understatement. 

Mr. BARTON. Can you get it? 

73 

Mr. FRIEDMAN. I cannot get it easily, no. 

Mr. BARTON. You cannot get it? 

Mr. FRIEDMAN. Mr. Johns perhaps can. I cannot. 

Mr. BARTON. Mr. Johns can get it? Will you get it and provide 

it to the members of the committee on both sides of the aisle? 

Mr. JOHNS. Yes, sir. 

Mr. BARTON. OK. How many—our numbers show that the Department of Energy has about 15,000 employees that are direct 

Federal employees, Mr. Johns. Do you agree with that number? 

Mr. JOHNS. I am sorry, could you repeat that? 

Mr. BARTON. Fifteen thousand Federal employees—— 

Mr. JOHNS. Yes, sir. 

Mr. BARTON [continued]. That are direct employees of the Department of Energy. Is that a generally good number? 

Mr. JOHNS. That is approximately right. It is a little bit less, but 

yes, sir. 

Mr. BARTON. I believe the committee numbers for vehicles owned 

by the Department of Energy is also about 15,000. Do you agree 

with that? 

Mr. JOHNS. That is part of the reason that we have been focused 

on—specifically on that issue, on reducing by 35 percent the number of vehicles that we have—— 

Mr. BARTON. But you do agree that Department of Energy owns 

15,000 vehicles. 

Mr. JOHNS. I don’t know the number. 

Mr. BARTON. All right, give me your best guess. 

Mr. JOHNS. I would prefer not to guess about the number of vehicles. 

Mr. BARTON. Give me an estimate. Do they own one, do they own 

100,000? 

Mr. JOHNS. I am not going to give you that answer off the top 

of my head. I can get back to you on it. 

Mr. BARTON. You are not going to get back to me. You know how 

many vehicles—— 

Mr. JOHNS. Sir, I honestly don’t know the number of vehicles—— 

Mr. BARTON. You have got a pretty good idea. Don’t play games. 

Mr. JOHNS. Sir, I assure you I am not playing games. 

Mr. BARTON. You don’t have a clue and you are the budget manager for the Department of Energy the approximate number of vehicles? I don’t believe that. 

Mr. JOHNS. Well, that is the case, sir. 

Mr. BARTON. You don’t have any idea? 

Mr. JOHNS. No, sir. 

Mr. BARTON. Not at all? 

Mr. JOHNS. No. I can tell you—— 

Mr. BARTON. If I said 10, you wouldn’t—you can’t dispute that? 

If I said a million, you can’t dispute it? 

Mr. JOHNS. Well, I can tell you it is between 10 and a million, 

sir. 

Mr. BARTON. Well, that is good. That is a start. Do you dispute 

that it is about 15,000? 

Mr. JOHNS. Sir, I can’t tell you that that is wrong. I just don’t 

know the answer. 

74 

Mr. BARTON. Do you think it is appropriate for the Department 

of Energy to have approximately one vehicle for every employee, 

which is about what it is? 

Mr. JOHNS. It is not appropriate, which is why we have engaged 

in the effort to reduce the size of the fleet by 35 percent. 

Mr. BARTON. Have you reduced the fleet by one vehicle? 

Mr. JOHNS. Yes, sir. 

Mr. BARTON. Have you reduced it by two? 

Mr. JOHNS. I believe we have, sir. We have reduced—— 

Mr. BARTON. So we know that there are more than two, if you 

reduced it by two. 

Mr. JOHNS. Yes, sir. We have reduced the fleet just for headquarters already by 40 percent this year. 

Mr. BARTON. OK. Does Secretary Chu own a car? 

Mr. JOHNS. I don’t know if he does. He said that he normally 

gets government travel back and forth to work. 

Mr. BARTON. And I want to go on the record. I think the Secretary of Energy should have a government vehicle at his or her 

disposal, so—— 

Mr. JOHNS. He does ride a bike to work. 

Mr. BARTON. Unless he bicycles to work. 

Mr. JOHNS. He does sometimes, sir. 

Mr. BARTON. I know. But you will get some more questions, because I don’t normally ask civil servants to resign, but if you don’t 

really know a general answer to my question about the number of 

vehicles and you are the budget officer, that is inexcusable. 

Mr. STEARNS. I thank the gentleman. Let me just add to his— 

can you find out by your staff behind you? Can they make a call 

over there so that Mr. Barton can get an answer today? We 

shouldn’t have to wait. Can you do that? 

Mr. JOHNS. Of course. 

[The information follows:] 

75 


78727.053

The Honorable Cliff Stearns 

Chairman 

Department of Energy 

Washington, DC 20585 

June 1,2012 

Subcommittee on Oversight and Investigations 

Committee on Energy and Commerce 

U.S. House of Representatives 

Washington, DC 20515 

Dear Mr. Chairman: 

On May 30, 2012, we sent you the transcript of the April 18,2012, testimony 

given by Christopher Johns, Director, Office of Budget, regarding "Budget and Spending 

Concerns at DOE." 

Enclosed is one insert that was requested by Representative Barton for the hearing 

record. 

If we can be of further assistance, please have your staff contact our 

Congressional Hearing Coordinator, Lillian Owen, at (202) 586-2031. 

Enclosure 
76 


78727.054

COMMITTEE: HOUSE ENERGY AND COMMERCE, 

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

HEARING DATE: APRIL \8,2012 

WITNESS: CHRISTOPHER JOHNS 

PAGE: 21; LINES: 3-12 

INSERT OF THE RECORD 

Upon joining DOE, Secretary Chu sought management efficiencies that could be gained to make 

the best use of taxpayer money. One area that he identified for improvement is the DOE vehicle 

fleet size. While recognizing that specialized vehicles are required for critical DOE missions, 

Secretary Chu made an aggressive challenge to DOE programs to reduce the size of the vehicle 

fleet by 35 percent by the end of2013. As described below, DOE is currently making progress 

in reducing its fleet size in response to Secretary Chu's direction. 

The Department's mission is to ensure America's security and prosperity by addressing its 

energy, environmental and nuclear challenges through transformative science and technology 

solutions. Every day, DOE's programs are working to promote energy innovation, transform 

America's energy infrastructure, and enhance our nation's nuclear security by maintaining a safe, 

secure, and effective nuclear stockpile. This mission is executed by the 127,376 DOE employees 

and contractors (14,945 Federal employees and 112,431 contractors) at over 80 major 

laboratories and field site locations across the country. 

Accomplishing this important mission requires access to the right equipment, including a ready 

Heet of vehicles. Much of DOE's mission work is done at National Laboratories and field siles 

located in remote parts of the country. Vehicles are needed at these sites to support operations 
77 


78727.055

and maintenance, which includes maintaining utilities and facilities, providing site security, and 

protecting and transporting nuclear materials. Vehicles are also needed to move hazardous or 

contaminated materials, respond to emergencies, and service tens of thousands of miles of 

transmission lines to support the federal power system. Of the 17 National Laboratories, all but 

one are Government-Owned, Contractor-Operated facilities. This means that the labs and their 

equipment-including the vehicle fleet-is the property of the federal government, while 

mission is executed largely by contractors. This is appropriate given that the mission continues 

despite changes in contractor staff. 

The overwhelming majority of the vehicles used at DOE sites are trucks, specialty, and 

emergency vehicles that are necessary for mission activities. In fact, traditional passenger 

vehicles, such as sedans and station wagons, account for only 5 percent of DOE's vehicle fleet. 

Examples of the types of vehicles used by the Department include: 

• Over 1,900 vehicles are owned by the Power Marketing Administrations (PMAs), which own 

and maintain 33,730 circuit-miles of high-voltage transmission line and 609 substations 

spread out across much of the central and western United States. The PMAs require 

specialized utility vehicles to perform maintenance on these power facilities, which are 

critical to the reliability of the nation's electric grid. The PMAs recover the costs of these 

vehicles in their power and transmission rates; consequently, these are not taxpayer funded. 

• 445 emergency/emergency response vehicles and 7481aw enforcement vehicles. 
78 


78727.056

• Hundreds of vehicles devoted to DOE's nuclear weapons and nuclear waste responsibilities, 

including radiological surveillance vehicles and specially-designed trucks for transporting 

nuclear materials. 

• And in the Washington, DC area, the Department's 7,000 contractor and federal employees 

are served by a total of26 vehicles, 75 percent of which are fuel-efficient or alternative fuel 

vehicles. 

DOE's policy has been to keep the number ofvehic1es at the right levels to satisfy programmatic 

requirements. In this challenging budget environment, the Department is committed to being a 

strong steward of taxpayer resources by reducing administrative costs and saving energy, 

including by reducing the size of the DOE fleet. Secretary Chu has been leading this effort since 

he came into office. For example, in a January 27, 20 II memo, Secretary Chu challenged the 

Under Secretaries, Office of Managemenl, and PMAs 10 reduce fleet inventory by 35 percent 

fleet reduction target without sacrificing either critical mission elements or our commitment to 

operating in a safe, secure and environmentally sound manner. 

The Department has already made significant progress in reducing the size of its fleet. In just the 

last year, DOE has reduced the size of its Headquarters fleet by 35 percent, and over the past 

decade, DOE has reduced its fleet by over 1,000 vehicles, during a time when DOE's 

programmatic work has increased. As of December 31, 20 II, the Department reported a vehicle 

count of 14,644 (3,850 DOE-owned; 9,956 GSA lease; 245 commercial lease). 
79 

Mr. STEARNS. OK. With that, I recognize the ranking member. 

Mr. WAXMAN. Thank you very much, Mr. Chairman. 

Mr. STEARNS. The ranking member of the full committee, Mr. 

Waxman, is recognized for 5 minutes. 

Mr. WAXMAN. Thank you, Mr. Chairman. 

The House Republican budget which was passed last month 

slashes discretionary spending on energy programs by 57 percent 

in 2013. These cuts will derail efforts to make wind and solar 

power competitive with fossil fuels. The budget also rescinds the 

unobligated balances in DOE’s Loan Guarantee Programs, which 

fund clean energy projects and support over 60,000 jobs. Mr. Johns, 

if the Department’s renewable energy funding were cut in half, 

what kind of effect would that have on the agency and its ability 

to fulfill its mission? 

Mr. JOHNS. Well, it certainly would cut the cord on some of the 

key initiatives that we have been engaged in as part of this all-ofthe-above strategy of reducing the cost of energy to the American 

people. We obviously—the Congress enacts—or the Congress passes 

bills and we would do our best to live under those, but it would certainly have a dramatic impact on our ability to provide those services. 

Mr. WAXMAN. The House Republican budget recommends the repeal of borrowing authority for the Western Area Power Administration, which is bringing renewable energy sources to areas in the 

Western U.S. Mr. Johns, if the Western Area Power Administration’s borrowing authority were repealed, how would that affect the 

agency’s ability to modernize transmission lines in the western 

U.S., and what effect would this have on citizens in those western 

States? 

Mr. JOHNS. I can’t give you a precise number on the effect on the 

cost of energy, but it would obviously have an impact there on the 

cost of energy. 

Mr. WAXMAN. Well, would it undermine the electrical grid in 

order to promote renewable energy and cost saving choices for 

western consumers? 

Mr. JOHNS. Well, I know that WAPA has been engaged in an effort to increase reliability, and that is part of what this effort was. 

Mr. WAXMAN. Well, I know right now the—this program is funding a 109 mile transmission line to increase delivery of solar power 

to consumers in the West. 

The House Republican budget wants to rescind the unobligated 

balances of the Advanced Technology Vehicles Manufacturing Loan 

Program. How would that affect the agency’s ability to support 

breakthroughs in energy efficient vehicles? 

Mr. JOHNS. Well, we certainly used that program in the last several years to increase the capabilities of the auto industry to bring 

to the market new innovative technologies. So to the extent that 

we don’t have that money, we wouldn’t be able to continue that effort. 

Mr. WAXMAN. Well, it would eliminate support for this program 

which was passed on a bipartisan basis and helps fund the development of plug-in, hybrid, and electric vehicles, isn’t that right? 

Mr. JOHNS. Yes, sir. 

80 

Mr. WAXMAN. And people complain about high gases prices. If we 

don’t do things like this, we are relying on oil. The more we rely 

on oil, the more we are stuck with the world oil prices which drive 

gasoline prices up. 

We shouldn’t let these important programs be cut. The House 

Republican budget would slash our investments in innovative clean 

energy technologies. Even worse, the Republican budget doesn’t 

just slash beneficial programs that support renewable energy, it 

continues to spend almost $40 billion in the next decade in tax subsidies for big oil. If we cut these programs that are funding breakthroughs in wind and solar production and electric vehicles and the 

electrical grid, we undermine the competitiveness of our country 

and harm our national security. We need to look to new technologies to power our economy, not to dig our heels in with old 

technologies and old ways. 

The U.S. is in a global race to develop new renewable energy 

technologies that will power the economies of the future. I am confident that American companies can win this race, but we need to 

make sure they have the tools they need. 

In 2009, the Chinese government poured $120 billion into renewable energy, a staggering $45 billion on the electric grid alone, 

while the U.S. invested just $20 billion overall. Mr. Johns, how 

much has the Department requested for renewable energy initiatives in the 2013 budget? 

Mr. JOHNS. You would have to look across—sorry. You would 

have to look across not just EERE, but look at several of our programs. The overall renewable energy budget is well into the $3 to 

$4 billion range. 

Mr. WAXMAN. And I think that you had requested a 29.1 percent 

increase in funding for the Office of Energy Efficiency and Renewable Energy. 

Mr. JOHNS. Correct. 

Mr. WAXMAN. OK. What would you—— 

Mr. JOHNS. That takes it to about—— 

Mr. WAXMAN. What would you do with these additional funds? 

Mr. JOHNS. Several different programs—one I would particularly 

want to highlight is the Advanced Manufacturing Initiative, which 

is designed to increase our ability to compete in the world market 

to bring some of the technologies that we are developing here, both 

at our labs and in the private sector, and get them commercially 

ready. So that is one that receives particular increases in this 

budget. 

Mr. WAXMAN. My time has run out. I want to commend you on 

your answers to these questions. You seem to know about the job 

you are required to do. I came here a little late, but it sounds like 

you didn’t know enough about Secretary Chu’s driving and whether 

he drives his own car or rides a bicycle, which you said he does occasionally. I don’t expect you to know that off the—or any of these 

things off the top of your head, but you can get us the information 

on any of the questions we asked you, and I think that is the kind 

of job that we should expect and commend you for. 

Thank you, Mr. Chairman. 

81 

Mr. STEARNS. I will just tell the Ranking Member that he was 

asked a total number of cars in the fleet. He didn’t know, but he 

indicated he is going to find out before the hearing is over. 

And with that, the gentleman from Louisiana, Mr. Scalise, is recognized for 5 minutes. 

Mr. SCALISE. Thank you, Mr. Chairman. I appreciate the opportunity to have the hearing for the panelists to talk about the budget as we are going through—— 

Mr. STEARNS. Is your microphone on? 

Mr. SCALISE. It is—hello? 

Mr. STEARNS. There you go. 

Mr. SCALISE. Just, you know, as we are grappling with budget 

issues, we are working hard to try to reduce spending, to finally 

force the government to start living within its means. The task 

that we have been given is to actually start reigning some of that 

in, looking through agencies, you know. And I know the President 

said in the past he is going to go line by line through the budget. 

I question whether or not he has truly carried through on that 

when you actually look at some of the things and the line items. 

But I want to ask about some of the specific things that you all 

are dealing with. Mr. Friedman, I think you had talked about investigations that are ongoing. Do you—can you share with us, at 

least, how many investigations your office is conducting right now? 

Mr. FRIEDMAN. We have between 300 and 350 potential criminal 

investigations ongoing at any given time, including currently. 

Mr. SCALISE. OK, is that across all agencies or just within Department of Energy? 

Mr. FRIEDMAN. Just within the Department of Energy and grant 

recipients, contractors, and Feds as well. 

Mr. SCALISE. So just within the Department of Energy, somewhere in the neighborhood of up to 350 criminal investigations? 

Mr. FRIEDMAN. Well they—we don’t know how they will turn out, 

obviously. 

Mr. SCALISE. But investigations? 

Mr. FRIEDMAN. But investigations which are carried out with the 

potential of criminality being involved. 

Mr. SCALISE. Do you know, are any of these within the loan program? We have had a number of hearings on Solyndra, trying to 

get in deeper on some of those issues, and in fact, our subcommittee still has not gotten all of the answers we requested from 

subpoenaing the White House, and hopefully they will finally comply with all of those requests. Can you tell us if any of these criminal investigations are within the loan program? 

Mr. FRIEDMAN. Well, both the Department of Justice and my office have publically acknowledged that there is a criminal investigation ongoing with regard to the Solyndra matter. Beyond that, 

I really can’t comment. It is an active investigation. 

Mr. SCALISE. OK, and I appreciate that. I know I have asked and 

a number of others have asked the Attorney General to look into 

especially the subordination of the taxpayer which we feel violated 

Federal law. And very clearly, it looks like most experts would say 

there was a violation of Federal law. I would hope that the Attorney General would investigate that because again, you have got 

millions of dollars in taxpayer money that would be at risk if we 

82 

don’t see the Attorney General take that action, and hopefully you 

are working in conjunction with him to push him to do just that. 

I want to ask, Dr. Rusco, the GAO found that government-wide, 

23 agencies and there are 130 sub-agencies implementing nearly 

700 renewable energy initiatives in fiscal year 2010. Is that what 

you all reported? 

Mr. RUSCO. Yes, that is correct. 

Mr. SCALISE. When you looked at all of that, did you all find any 

duplication? 

Mr. RUSCO. You know, it took pretty much all of an audit just 

to identify all of the initiatives across so many agencies. We have 

efforts underway now to drill down in solar energy, wind energy, 

and battery storage, and we are trying to get a handle on a little 

bit more detail about where those programs and initiatives may 

overlap and where there may be some potential duplication with 

the hope that that could eventually be eliminated. 

Mr. SCALISE. Because it seems like what all of the money that 

was spent, and just in the stimulus there was about $35 billion 

spent in many cases on green energy where the President was just 

trying to have photo opportunities to show some victories, and it 

seemed like a whole lot of money was rushed out the door with 

very little oversight. We saw billions at the very end of the loan 

program just pushed out on the final days without the proper due 

diligence. And many reports have said there was not the proper 

due diligence, not to mention that with all these overlapping where 

you could clearly save millions, possibly higher than millions, of 

dollars. 

I want to ask Mr. Friedman, you had talked in your testimony 

about the review that you all did on the stimulus and just with so 

money rapidly being deployed I think was your term. You might 

even have talked about teachable moments and the amount of 

money that was moved through without the ability to properly 

scrutinize. Can you expand upon that? 

Mr. FRIEDMAN. I certainly can. In January of this year we issued 

our ‘‘Lessons Learned—Best Practices Report’’ on the Recovery Act, 

and although a good portion of the Recovery Act money has yet to 

have been spent and we are continuing our work, there were a 

number of challenges going in. I have cited and was misquoted, I 

guess, a couple of times that it was comparable to attaching a garden hose to a fire hydrant. The rush of money was just so exceptional in such a short period of time. The institutional challenges 

and other barriers were really extraordinary, and neither the 

States nor the Federal Government were fully prepared to address 

it. 

Mr. SCALISE. I appreciate reading that report. 

One final question. Mr. Johns, last year, the President raided 

about 30 million barrels from the Strategic Petroleum Reserve. 

Number one, how much money did that generate? Number two, 

what did you all do with that money? And number three, have you 

all replaced that 30 million barrels that were taken away last year 

just to supposedly lower gas prices, which clearly it did not. Can 

you answer those questions? 

Mr. JOHNS. The sale last year generated a little over $3 billion 

in receipts to the government. That money remains in the Strategic 

83 

Petroleum Reserve account, and a portion of that would be used to 

buy back the oil at the proper time. As you probably know, the decisions on when to make those purchases are related a lot to—— 

Mr. SCALISE. At today’s prices, it may take more than that with 

oil at a little over $100 a barrel. 

Mr. JOHNS. Which is why we have not chosen yet to buy that oil 

back. 

Mr. SCALISE. Why didn’t you do it earlier in the year when the 

price was lower? 

Mr. JOHNS. In part because we needed a space. We needed to do 

some repairs in the caverns, so there were some administrative 

reasons why we wanted to wait. Decisions on when we are going 

to buy that back, though, are decisions that are not made certainly 

in the budget office, but made as a part of the decisions of when 

the oil is available, when it won’t affect the market. And as I think 

you also know, we have made a decision not to buy some of that 

back and—almost $300 million and using that as savings, that that 

we don’t intend to buy back in the next several years. 

Mr. SCALISE. I hope—— 

Mr. STEARNS. The gentleman’s time is expired. 

Mr. SCALISE. Yield back the balance of my time. 

Mr. STEARNS. Recognize Ms. Christensen for 5 minutes. 

Mrs. CHRISTENSEN. Thank you, Mr. Chairman. 

Mr. Johns, in your written testimony you stated DOE received 

$35.7 billion in Recovery Act funds, and DOE has done a lot with 

those funds. For example, you stated that the agency is supporting 

over 15,000 clean energy projects across the country, and I really 

think we should recognize just how effective the Recovery Act has 

been in lifting up the American economy and creating new energy 

economy. Also the time when other nations are focusing heavily on 

aggressively building their green jobs industries, it is vital that 

America do the same to stay competitive on the global stage. 

So Mr. Johns, how many jobs have been supported by DOE’s Recovery Act projects? Do you know that? An approximate number 

would be fine. 

Mr. JOHNS. It is about 50,000 over time. 

Mrs. CHRISTENSEN. Are they located in one region or State, or 

are they spread out across the country? 

Mr. JOHNS. No, ma’am, in fact, that was—the intention of the 

Recovery Act was to spread those around the country. Weatherization is a good example of that where we are hiring local contractors 

all over the country. 

Mrs. CHRISTENSEN. That weatherization program did more than 

create jobs, didn’t it? I know we were able to take advantage of it 

in the Virgin Islands. Can you just say a few words beyond jobs 

what that—what the weatherization project was able to accomplish? 

Mr. JOHNS. Yes, ma’am, certainly. It has reduced the costs to individuals of their monthly energy bills and made a pretty substantial deduction in some cases, $100 or more in some places. 

Mrs. CHRISTENSEN. Thank you. These Recovery Act programs 

had important benefits; nevertheless, we really have to acknowledge that this has not been an easy road for DOE. So Mr. FriedVerDate Aug 31 2005 14:05 Feb 12, 2013 Jkt 037690 PO 00000 Frm 00087 Fmt 6633 Sfmt 6633 F:\11425C~1\112-13~1 WAYNE
84 

man and Mr. Rusco, is it fair to say that DOE struggled with implementing some of its Recovery Act programs? 

Mr. RUSCO. Yes, especially initially, and we have been talking 

about the weatherization program. There was—there were a lot of 

hiccups in the early months of that program. Among other things, 

the law required each State and in many instances, localities, to establish market wages for weatherization workers, and those had 

not been established so they had to work—the States had themselves—had to work to establish what the market wages were to 

meet the requirements of the Davis-Bacon Act. There were also 

some informational and communication hiccups within DOE. DOE 

had a hard time communicating to a wider range of recipients and 

managers, and some of the information that they provided was unclear, and it took them a while to improve that. 

Mrs. CHRISTENSEN. OK, thank you. 

Mr. Friedman, I think you have pretty much answered that question before with the hose and the fire hydrant analogy. Do you 

want to add? 

Mr. FRIEDMAN. I think that will do it. 

Mrs. CHRISTENSEN. OK. 

Mr. JOHNS. Congresswoman, if I could make one quick point on 

this? 

Mrs. CHRISTENSEN. Sure. 

Mr. JOHNS. The kinds of things that they are identifying here 

were designed from the beginning. We very much solicited and 

want these kinds of—this kind of feedback so we can improve the 

execution of these projects over time and take them into account 

as we look at the new budgets. 

Mrs. CHRISTENSEN. And then so that was kind of my next comment and question, because I commend both GAO and the Inspector General for their work the agencies have done in identifying the 

problems and providing recommendations to improve DOE program 

management, but I would like to ask both Mr. Rusco and Mr. 

Friedman, how is—do you feel the DOE has responded well? Have 

they acted on the recommendations and has the program management improved? Has the DOE developed more experience in your 

opinion as well? 

Mr. RUSCO. By and large, DOE has recommended—agreed with 

most of our recommendations and taken steps to implement them. 

They have completed implementing quite a number of them—especially the ones related to the Recovery Act. We have some instances 

in which programs have been less willing to adopt our recommendations, and the Loan Guarantee Program is one. 

Mr. FRIEDMAN. I think that from our vantage point, there is no 

doubt that there have been—a number of our recommendations 

have been accepted. There have been dramatic improvements in a 

number of the programs, so while there are some problems still, we 

think it is largely a good news situation. 

Mrs. CHRISTENSEN. Thank you. So in balance, I really think that 

despite the management problems, that it is pretty fair to say that 

DOE’s recovery programs provided important benefits to many 

American workers and families. 

So—but yet my Republican colleagues continue to claim that the 

Recovery Act had no value. They continue to talk about Solyndra 

85 

as you have heard this morning and proclaim that the Loan Guarantee Program is a failed experiment, which is unwarranted, given 

how much this program has done for American businesses and how 

important it is to invest in innovation. 

Mr. Johns, how did the Recovery Act funding help—would you 

like to speak about the Loan Guarantee Program a minute and 

how it helped to support innovative thinkers with ideas for clean 

energy projects? 

Mr. JOHNS. Of course. As you have already said, the Loan Guarantee Program has supported—— 

Mr. STEARNS. Just finish your question. Finish your question. 

Mr. JOHNS [continued]. Has supported many companies and we 

have had many successes in things like batteries and hybrid power 

and this kind of thing that have been a significant improvement— 

have significantly improved our ability to compete in the future—— 

Mrs. CHRISTENSEN. Thank you. 

Mr. JOHNS [continued]. Bringing these kinds of capabilities that 

were available to us but were not yet ready for production scale 

into the production. 

Mr. STEARNS. I thank the gentlelady. 

Mrs. CHRISTENSEN. Thank you. 

Mr. STEARNS. The gentleman from Virginia, Mr. Griffith, is recognized for 5 minutes. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

Earlier we heard comments about China and its renewables program and how it is working on new energy sources, but I think it 

is interesting we always talk about China in that regard, but we 

don’t recognize that China doesn’t expect over the next couple of 

decades to have about more than 15 percent of its power coming 

from these other sources, and that they continue to build coal-fired 

power plants because they recognize that between now and some 

time in the future when renewable energy comes on board, coal is 

still going to be a major part of their plan, but in this country, for 

some reason we seem to think we can do without coal. So that is 

just an editorial comment on previous editorial comments. 

Mr. Johns, here is the question I have following up on Representative Barton’s comments. How do you know you are going to be 

able to reduce—and I may have it wrong—the central office fleet 

by 40 percent and the overall fleet by 35 percent if you don’t know 

how many cars you have in the first place, because doesn’t it make 

sense in order to know that you need to reduce 35 cars, you have 

to know that you have 100 to get to your 35 percent? Isn’t that logical and do you understand why he is frustrated that you don’t 

know that answer if you are going to throw out numbers about how 

much you are cutting the fleet, but you don’t know how big it is 

to start with? Doesn’t that make sense to you, sir? 

Mr. JOHNS. Thanks for the opportunity to come back to this. I 

will say I am sorry I didn’t know the number, but my job is to review the overall budget requests, and I have excellent staff who 

can get me those numbers. For example, I can confirm that his 

number of 15,000 is about right for the number of vehicles we have 

in the fleet right now. I would say that that also includes, though, 

not just private vehicles—not just cars but it is also nuclear— 

86 

trucks to carry nuclear material, things for the grid, this kind of 

thing. 

Mr. GRIFFITH. I guess the frustration is that you came here today 

to testify on budget numbers and you are talking about reducing 

the fleet, but you don’t know how big the fleet is so it is kind of 

hard to know whether or not your numbers are accurate on reducing the fleet. That was the point I was trying to make there. 

Let me ask this of you, Mr. Friedman, if I might. You indicated 

there are some active investigations going on and I know you can’t 

tell me anything about that, but I would question in the Loan 

Guarantee Program, 1705, under which Solyndra was made and 

the other loans were made, if there were a violation, a knowing and 

willful violation of that section, have you all assessed whether or 

not there might be, depending on whether or not there was a willful and knowing violation, is there a possibility that there might 

be criminal sanctions there, or is it, as I have heard previously, 

that that section has no criminal penalty? 

Mr. FRIEDMAN. I don’t know the answer to your question, Mr. 

Griffith. I am sorry. I just don’t know the answer. 

Mr. GRIFFITH. Are you all in a position to give me an answer at 

a later date, or is that not in your bailiwick? 

Mr. FRIEDMAN. Not within my—— 

Mr. GRIFFITH. Not within your jurisdiction. It is interesting that 

you all added the Loan Guarantee Program to your fiscal year 2012 

watch list in your November, 2011, special report on DOE management challenges. This move is justified in light of the significance 

of the funds involved and the government’s exposure to risk. I 

guess what I have to say is if the program says that loan monies 

are not to be subordinated and they then the are subordinated, am 

I not correct—isn’t it true that that would add substantially to the 

risk that would have to be assessed, if subordination was possible 

even though the law says otherwise? 

Mr. FRIEDMAN. Well, Mr. Griffith, I assume that you would not 

want me to do anything or say anything, nor would you want to 

provoke a question, that would in any way undermine an ongoing 

investigation? Let me pass on that question. 

Mr. GRIFFITH. Absolutely. I do not want to interfere with any ongoing investigations. If there is no potential criminal possibility, do 

you think it would be helpful to add into those sections a civil penalty of say $250,000 for a knowing violation of the law? 

Mr. FRIEDMAN. Well, you know, if I start down this slippery 

slope—— 

Mr. GRIFFITH. I am talking about going forward. I am not talking 

about past. 

Mr. FRIEDMAN. Well, I will tell you going forward I think there 

are a lot of aspects of the Loan Guarantee Program where clarification, more precision would be helpful to everybody, and this may 

be one of those areas. 

Mr. GRIFFITH. Well I certainly think clarifying that there is a 

punishment for violating the law is always helpful in that regard. 

Dr. Rusco, in its March 2012 report, GAO concludes that DOE 

must fully implement a system of overseeing application review 

process to ensure accountability for Federal resources. Among other 

things, GAO found that DOE does not have a consolidated system 

87 

for documenting and tracking its process in reviewing applications 

fully implemented at this time. This is obviously a cause for concern. How did the DOE respond to your recommendation that they 

commit to a time table to fully implement and consolidate system? 

Mr. RUSCO. The program did not want to commit to a timeframe 

to do so. We think that that is misguided. We believe that it is extremely important for them to have a centralized way to track all 

of the applications. We spent months and months of our audit just 

tracking down individual documents in sometimes paper form, 

sometimes spreadsheet form, putting it all together, going back and 

checking for accuracy, and in the end, we found some problems. It 

would be hard for the program itself to do appropriate oversight if 

they don’t have these management data, and we found it to be 

problematic for our own oversight. 

Mr. GRIFFITH. And will continue to be problematic if not fixed, 

am I correct? 

Mr. RUSCO. That is our belief, yes. 

Mr. GRIFFITH. Mr. Chairman, I yield back. 

Mr. STEARNS. Thank the gentleman, and the gentlelady from 

Florida, Ms. Castor, is recognized for 5 minutes. 

Ms. CASTOR. Well thank you, Mr. Chairman, very much, and 

thank you, gentlemen, for being here today. I would also like to 

talk about the Department of Energy’s Weatherization Program, 

because I believe it has been one of the most effective, energy efficient initiatives run overseen by the Federal Government, because 

it is a partnership with local communities. I have seen it firsthand 

in my district in the Tampa Bay area. 

It provides those cost efficient upgrades to homes, many from 

families that don’t have a lot of money to put into repairs to their 

homes, and this has been going on for 34 years. I understand that 

over the course of 34 years, we have helped weatherize over 6.3 

million homes across America. And then in the recession, the Recovery Act provided another huge punch under weatherization, and 

this was smart because we were able to put people to work, especially in the construction industry where the jobs just—the bottom 

fell out of the economy, and then provide the double whammy benefit of helping put money back into the pocketbooks and the personal budgets of people all across the country. 

One of the most effective partnerships I have seen is in the City 

of St. Petersburg and Pinellas County. In my area it was run by 

the Urban League, a nonprofit that had their finger on the pulse 

of folks who needed jobs, needed a little training. They were largely 

in the construction industry and not working. They hired them and 

they did—imagine the State of Florida, what it means for your air 

conditioning bill when you can plug the holes around the windows 

and doors. It saves them—it saves those families a lot of money. 

So Mr. Johns, how many homes have been made more efficient 

through the Recovery Act investment under our Weatherization Assistance Initiative? 

Mr. JOHNS. Approximately 680,000. 

Ms. CASTOR. Six eighty. And I believe I heard you say that the 

average savings to each of these families was over $430 per year? 

Is that right? 

88 

Mr. JOHNS. I have heard that number. I have heard various 

ranges, but yes. 

Ms. CASTOR. I think everyone can appreciate those kinds of savings. 

Mr. Rusco, I noticed in—the Government Accountability Office 

did a report in December, 2011. You said that pursuant to the Recovery Act investment in weatherization, 13,000 jobs were created. 

Is that about right? 

Mr. RUSCO. That is what was reported, yes. 

Ms. CASTOR. OK. By the GAO—reported by the GAO? 

Mr. RUSCO. It was reported by recipients to OMB. 

Ms. CASTOR. OK, and you also made recommendations to the Department of Energy on how to make the initiative more efficient? 

Mr. RUSCO. Yes, we did. 

Ms. CASTOR. And in your testimony today, I hadn’t seen this before, but you—in the Government Accountability Office testimony, 

you say that—you reported that some grant recipients had been 

able to exceed their production target because of a lower average 

cost of weatherizing homes and lower training and technical assistance expenses than anticipated, so that is good news. You also 

said—the GAO also reported that a long-term weatherization assistance goal is to increase energy efficiency through cost effective 

work, and that the Oak Ridge National Laboratory study of March, 

2010, indicated that energy savings here will likely exceed the program’s cost, meaning that every $1 spent on weatherization between 2009 and 2011 would result in almost $2 in energy savings 

over the useful life of the investment. What did you think of the 

Oak Ridge Laboratory’s assessment that every dollar spent on 

weatherization results in $2 in savings over the life of the investment? 

Mr. RUSCO. We did review their study methodology. We think it 

is sound. Those are preliminary results and I think they are about 

to publish a more comprehensive estimate, but we did think that 

their study approach was very sound. 

Ms. CASTOR. Well that is good news for the taxpayer and it is 

good news for the folks who got jobs and it is good news for the 

people in those homes that are saving money on their energy bills. 

Now we have run up on a deadline for all of those Recovery Act 

dollars under weatherization to be spent. The original deadline was 

March 31 of this year. You all mentioned this in your testimony. 

Can you tell me, explain to folks exactly what that deadline means 

and it has been extended until what date? 

Mr. JOHNS. Go ahead. 

Mr. RUSCO. Some States were unable to spend all their money. 

Many States actually did before the deadline, but some States were 

unable to and OMB issued guidance allowing the money to be 

spent up through—I am going to look at Kim, but I think September 30, 2013, and DOE then has issued revised guidance to the 

recipients, allowing them to apply for modifications of their deadlines. 

Ms. CASTOR. OK, so now the burden is on the States to go in and 

make that application? 

Mr. RUSCO. Yes, States and other recipients. 

89 

Ms. CASTOR. Can the recipients do it on their own without having to go through the State or rely on the State? 

Mr. RUSCO. Each State has to apply to DOE for an extension in 

order to—for a modification of the deadline in order to spend whatever funds are remaining. 

Ms. CASTOR. And there is not that much left. How much is left, 

do you know? 

Mr. RUSCO. I think when we last checked, $4.2 billion had been 

spent, so there is something like $.6 billion left. 

Ms. CASTOR. Well, I appreciate—— 

Mr. STEARNS. The gentlelady’s time has expired. 

Ms. CASTOR. Thank you very much. 

Mr. STEARNS. We are going to go around with a second round of 

questions, and I will start with mine. Before I go, I would like 

unanimous consent to put in this Executive Order 13589 and the 

analysis from the Business & Financial News that ‘‘Obama’s ‘green 

jobs’ have been slow to sprout.’’ 

Without objection, so ordered. 

[The information follows:] 

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Federal Register 

Vol. 7[:1, No, no 

Tuesday, November 15,2011 

Title 3-

The President 

70863 

Presidential Documents 

Executive Order 13589 of November 9, 2011 

Promoting Efficient Spending 

By the authority vested in me as President by the Constitution and the 

laws of the United States of America, and in order to further promote 

efficient spending in the Federal Government, it is hereby ordered as follows: 

Section 1. Policy. My Administration is committed to cutting waste in Federal 

Govornment spending and identifying opportunities to promote efficient 

and effectivo spending. The Federal Government performs critical functions 

that support the basic protections that Americans have counted on for decades. As they serve taxpayers, executive departments and agencies (agencies) 

also must act in a fiscally responsible manner, including by minimizing 

their costs, in order to perform these mission~critical functions in the most 

efficient, cost~effective way. As such, I have pursued an aggressive agenda 

for reducing administrative costs since taking office and, most recently, 

within my Fiscal Year 2012 Budget. Building on this effort, I direct agency 

heads to take even more aggressive steps to ensure the Government is a good steward of taxpayer money. 

Sec. 2. Agency Reduction Targets. Each agency shall establish a plan for 

reducing the combined costs associated with the activities covered hy sections 

3 through 7 of this order, as well as activities included in the Administrative 

Efficiency Initiative in the Fiscal Year 2012 Budget, by not less than 20 

percent below Fiscal Year 2010 levels, in Fiscal Year 2013. Agency plans 

for meeting this target shall be submitted to the Office of Management 

and Budget (OMB) within 45 days of the date of this order. The OMB 

shaH monitor implementation of these plans consistent with Executive Order 

13576 of June 13, 2011 (Delivering an Efficient, Effective, and Accountable 

Government). 

Sec. 3. Travel. (a) Agency travel is important to the effective functioning 

of Government and certain activities can be performed only by traveling 

to a different location. However, to ensure efficient travel spending, agencies 

are encouraged to devise strategic alternatives to Government travel. includ w 

ing local or technological alternatives, such as teleconferencing and video- conforoncing. Agencies should make all appropriate efforts to conduct busi~ 

ness and host or sponsor conferences in space controlled by the Federal 

Government, wherever practicable and cost-effective. Lastly, each agency 

should review its policies associated with domestic civilian permanent 

change of duty station travel (relocations), including eligibility rules, to 

identify ways to reduce costs and ensure appropriate controls are in place. 

(b) Each agency, agency component, and office of inspector general should 

designate a senior-level official to be responsible for developing and imple~ 

menting policies and controls to ensure efficient spending on travel aud 

conference~rolated activities, consistent with subsection (aJ of this section. 

Sec. 4. Employee Information Technology Devices, Agencies should assess 

current device inventories and usage, and establish controls, to ensure that 

they are not paying for unused or underutilized information technology 

(IT) equipment, installed software, or services. Each agency should take 

sleps to limit the number of IT devices (e,g., mobile phones, smartphones, 

desktop and laptop computers, and tablet personal computers) issued to 

employees, consistent with the Telework Enhancement Act of 2010 (Public 

Law 111-292), operational requirements (including continuity of operations), 

and initiatives designed to create efficiency through the eHectlve implementa~ 

Hon of technology. To promote further efficiencies in IT, agencies should 
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70864 Federal Register I Vol. 76, No. 220/Tuesday, November 15, 2011/ Presidential Documents 

[FR Doc. 2011-29683 

Fded 11-14-11; 11:15 am] 

ll\lling cod., 329S-F2-J' 

consider the implementation of appropriate agency-wide IT solutions that 

consolidate activities such as desktop servicos, emait, and collaboration tools. 

Sec. 5. Printing. Agencies are encouraged to limit the publication and printing 

of hard copy documents and to presume that information should be provided 

in an electronic form, whenever practicable, permitted by law, and consistent 

with applicable records retention requirements. Agencies should consider 

using acquisition vehicles developed by the OMB's Federal Strategic Sourcing 

Initiative to acquire printing and copying devices and services, 

Sec. 6. Executive Fleet Efficiencies. The President's Memorandum of May 

24, 2011 (Federal Fleet Performance) directed agencies to improve the performance of the Federal fleet of motor vehicles by increasing the use of 

vehicle technologies, optimizing fleet size, and improving agency neet management. Building upon this effort, agencies should limit executive transportation. 

Sec. 7. Extraneous Promotional Items. Agencies should limit the purchase 

of promotional items (e.g., plaques, clothing, and commemorative items), 

in particular where they are not cost-effective. 

Sec. 8. General Provisions. (a) Nothing in this order shall be construed 

to impair or otherwise affect: 

(il authority granted by law to a department or agency. or the head 

thereof; 

{ii} functions of the Director of OMB related to budgetary, administrative, 

or legislative proposals; or 

(iii) the authority of inspectors general under the Inspector General Act 

of 1978, as amended. 

(bl This order shall be implemented consistent with applicable law and 

subject to the availability of appropriations. 

(c) Independent agencies are requested to adhere to this order. 

(d) This order is not intended to, and does not, create any right or 

benefit, substantive or procedural, enforceable at law or in equity by any 

party against the United States, its departments, agencies, or entities, its 

officers, employees, or ag~nts, or any other person. 

THE WHITE HOUSE, 

November 9. 2011. 
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5/14/12 Business & Financial News, Breaking US & International News I Reuters.com 

» Print 

Analysis: Obama's "green jobs" have been slow 

to sprout Fri, Apr 132012 

By Andy Sullivan 

(Reuters) - Three weeks ago, President 8arack Obama stood in front of a 

sea of gleaming solar panels in Boulder City, Nevada, to celebrate his 

administration's efforts to promote "green energy," 

Stretching row upon row into the desert, the Copper Mountain Solar 

Project not far from Las Vegas provided an impressive backdrop for the 

president. 

Built on public land, the faciHtyis the largest of its kind in the United 

States, Its 1 mHlion solar panels provide enough energy to power 17,000 

homes. 

And It employs just 10 people, 

Three years afterObama launched a push to build a job-creating "green" economy, the White House can say that more than 

1 millton drafty homes have been retrofitted to lower heating and cooling costs, while energy generation from renewable 

sources such as wind and solar has nearly doubled since 2008, 

But the millions of "green jobs" Obama promised have been slow to sprout, disappointing many who had hoped that the 

$90 billion earmarked for clean-energy efforts in the recession-fighting federal stimulus package would ease 

unemployment· still above 8 percent in March. 

Supporters say the administration over-promised on the jobs front and worry that a backlash could undermine support for 

dean-energy policies in general. 

"All of this stuff is extraordinarHyworthyfordriving long-term economic transformation but extremely inappropriate to sell as 

a short-term job program ," said Mark Muro, a clean-energy specialist at the Brookings Institution, 

Others say the green-jobs push has crowded out tess fashionable efforts that wou!d have put people back to work quickly. 

"From my perspective it makes more sense for us to arm our clients with the basic skills, rather than saying, '8ygolly, you 

will do something in the green economy or you won'twork,H' said Janet Blumen, the head of the Foundation for an 

Independent Tomorrow, a Las Vegas job-training organization that has seen positions in trucking and accounting go 

unfilled because training money had been earmarked for green efforts, 

A$SOO million job~training program has so far helped fewer than 20,000 people find work, far short of its goal. 

Republicans, meanwhHe, have seized on the failure of solar panel maker Solyndra, which received a $535 million loan 

guarantee, to argue that White House allies have been the only ones who have benefited from the green jobs push, 

"He handed out tens of bjjJjons of dollars to green energy companies, including his friends and campaign contributors at 

companies like Solyndra that are now bankrupt," Republican presidential candidate Mitt Romneysaid on April 4. 

VARYING ESTIMATES 

Backers of the notion of a "green collar" work force argue that earth-friendly energy is a promising growth sector that could 

create a bountyof stable, middle-class jobs and fill the gap left by manufacturing work that has moved overseas, 

On the campaign trail in 2008, Obama promised thata $150 billion investment would generate 5 million jobs over 10 years, 

Obama included $90 billion in the American Recoveryand ReinvestmentActto weatherize drafty buildings, fund electric-car 

makers and encourage otherc!ean-energyefforts. 

"We 'I! put near!yhalf a million people to work building wind turbines and solar panels, constructing fuel-efficient cars and 

buildings, and developing the new energy technologies thatwiU lead to new jobs ," he said at a wind~turbine plant in Ohio 

the day before he took office. 

!n December 2009, Vice President Joe Biden said the effort would create 722,000 green Jobs. 

www.reuters.com/assets/print?aid=USBRE83coa020120413 1/3 
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78727.060

5f14!12 Business & Financial News, Breaking US & International News I ReuterS,com 

The White House said In November 201 0 that its c1ean~energy efforts had generated work for 225,000 people and would 

ultimate!ycreate a total of827,000 ')"ob years" ~ implying average annual empioymentof around 200,000 over the four years 

ofObama's presidential term, 

White House officials stand by that estimate and say job creation is only one aspect of the c1ean-energypush. 

"We have a record of success that has created tens of thousands of jobs and is ensuring that America is not ceding these 

industries to countries like China,"White House spokesman Clark Stevens said. "Thanks to the investments we've made, 

these industries will continue to grow, along with the jobs they create." 

One problem IS that, unlike other elements of the Recovery.A.ct that injected money Into the economy quickly, efforts to 

develop high·speed rail or electric-car batteries Obama also promoted could take a decade or longer to yield dividends. 

Gains in the sector don't necessarily!ead to wider employment. 

The wind industry, for example, has shed 10,000 jobs since 2009 even as the energy capacity of wind farms has nearly 

doubled, according to the .American Wind Energy Association, tv1eanwhile, the oil and gas industry has added 75,000 jobs 

since Obama took office, according to Labor Department statistics. 

Federal agencies also have struggled to get stimulus money out the door in a timely manner, even for prosaic efforts that 

help local governments reduce energy costs. 

The rush offunding encouraged private~sector participants to inflate their job-creation projections as they angled for a piece 

of the action, insiders say. 

'They were obviously just guessing," said Robert POllin, a University of Massachusetts professor and green~energy 

supporter who helped the Energy Department sort through loan applications. "If an undergraduate gave me a paper of that 

quality I would have probably given them a C or a C~plus." 

SLOW PROGRESS 

The high~profile failures of companies that have benefited from federal backing, such as So!yndra and Beacon Power Corp., 

have given ammunition to Republicans who paint the effort as a costly boondoggle. 

They also have targeted the $500 job~training program that aims to train workers for skills they would need in a new "green 

economy." 

The program's initial results were so poor that the Labor Department's inspector general recommended !astfal! that the 

agency should return the $327 million that remained unspent. 

The numbers have improved somewhat since then, but the department remains far shortofits goal of plaCing 80,000 

workers Into green jobs by 2013. 

By the end of2011, some 16,092 participants had found new work in a "green" field, according to the Labor Department~ 

roughly one~fifth of its target. The program also helped employed workers upgrade their skills. 

Republican Senator Charles Grassleysaid the program had reached too few workers to be deemed a success. 

"The green jobs·training program just didn't work. It was a poor investmentoftaxdoUars," Grassleysaid in a prepared 

statement. 

SHADES OF GREEN 

The effort has been complicated by confusion over what exactly constitutes a green job. 

In MarCh, the Labor DepartmenteStimated there were 3.1 million green jobs in the United States as of 2010, using a broad 

definition that included everything from nuclear power~p!antworkers to regulators, lObbyists and park rangers. 

The Recovery kt used a narrower definition, focusing on wind, solar and other renewable~energylndustries and energy~ 

efficiency efforts aimed at reducing consumption. 

USing a definition similar to the Labor Department's, the Brookings Institution estimated that the Las Vegas region that 

includes the vast solar fields sprouting around Boulder City supported 9,797 "dean jobs" in 2010, accounting for 1.2 

percent of the region's employment. 

Local officials don't expect that figure to grow much. 

"Will it add a significant number of jobs, enough to make a real dent in our unemployment? No, I don't see that happening," 

said Darren Divine, vice president for academics at the College of Southern Nevada. 

The fields of health care, education and technology are likely to provide the best employment prospects in the years to come, 

he said. 

PLUGGING THE GAPS 

The much~touted home weatherization program has upgraded more than 1 million houses and provided work for about 

20,000 people, as weI! as generating business for suppliers, according to the White House. 

But here as well, supply has outpaced demand. While government spending has kept contractors busy upgrading low~ 

income houses and public buildings, homeowners have been less eagerto spend their own money in a tumbling rea! 

www.reuters.com/asselsfprint?ald:::USBRE83C08D20120413 213 
94 


78727.061

5f14f12 Business & Financial News, Breaking US & International News I Reuters,com 

estate market. 

Contractors have fared better than the construction industry as a whole but have not found as much work as hoped, said 

Greg Thomas, the chairman of the trade group EfficlencyFirst. 

les lazareck, the head of Home EnergyConnection in Las Vegas, estimated that fewer than one in four people he has 

trained through a Recovery Act program now earn most of their income through weatherization work, 

"There's definitely not enough demand," he said. ''The private market has been very slow." 

(Editing byD3\fid Lmd$eyand Philip Barbara) 

of content from this website for their 

Thornson Reuters journahsts are subject to an Edltonal Handbook which reqUires feW presentation and disclosure of 

relevant Interests. 

ThiS copy IS for your personal, non-commercial 

cilent" or customers. use the Reprints tool at the 

www.reuters.comlassatsiprinl?aid=USBRE83C08D20120413 313 
95 

Ms. DEGETTE. Objection. What is the status on Mr. Waxman’s 

unanimous consent request? OK. 

Mr. STEARNS. By unanimous consent, so ordered. 

[The information follows:] 

96 


78727.062

HENRY A VVi,X1\,lAN, u~LlFOHNlj.\ 

ONE HUNDRED TWELFTH CONGRESS 

(!COllgrc~s of tf)e IDniteb ~t[{tes 

Ji)Ollst of ltcprtscntatibcs 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RA'lBUHN HOl!SF OI-FieF BUILD1Nl'i 

WASIlINGION, DC 20515--6115 

SUPPLEMENTAL MEMORANDUM 

April 18, 2012 

To: Members of the Subcommittee on Oversight and Investigations 

Fr: Henry A, Waxman, Ranking Member, and Diana DeGette, Subcommittee Ranking 

Member 

Re: Supplemental Information on the House Republican Budget's Cuts to DOE Clean 

Energy Programs 

On Wednesday, April 18, 2011, at 10:30 a,m. in room 2322 orthe Rayburn House Ortice 

Building, the Subcommittee on Oversight and Investigations will hold a hearing titled "Budget 

and Spending Concerns at DOE." This memorandum provides supplemental infonnation on the 

I louse Republican Budget and its impact on Department of Energy (DOE) programs. The 

Republican budget passed the I-louse on March 29, 2012, with no Democratic members voting in 

favor. I 

This proposed budget would have significant impacts on DOE programs. It would cut 

billions of dollars to promote the development of clean and renewable energy, eliminate DOE 

loan programs that have helped support over 60,000 jobs, and maintain nearly $40 billion in tax 

subsidies for oil and gas companies. The Republican budget would: 

Cut overall energy discretionary spending by 57% in 2013, forcing major cuts in 

DOE's Office of Energy Eftlciency and Renewable Energy and derailing efforts to 

increase energy efficiency and develop wind, solar, geothermal, and other clean 

energy sources, 

Halt DOE's Advanced Technology Vehicle Manufacturing (ATVM) program and 

loan guarantee programs authorized under sections 1703 and 1705 of the Energy 

Policy Act of2005. These programs - which have supported the development of 

I House Passes UO.P. Budget Plan, Mostly Along Party Lines, New Yark Times (Mar. 

29,2012). 
97 


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plug-in hybrid vehicles and electric vehicles and helped U.S. renewable energy 

companies compete globally - have supported an estimated 60.000 jobs over the last 

three years.2 

• Repeal borrowing authority for DOE's Western Area Power Administration 

Transmission Infrastructure Program, which is working to modernize the electrical 

grid in order to promote energy and cost-saving choices for consumers, reduce 

emissions, and foster the growth of renewable energy sources. 

• Retain billions of dollars in oil industry tax subsidies, including oil and gas company 

tax preferences worth $38.6 billion over 10 years. 

The remainder of this memorandum provides additional detail on the Republican budget 

and its impact on DOE programs. 

l. THE REPUBLICAN BUDGET REDUCES SUPPORT FOR ENERGY 

EFFICIENCY AND RENEWABLE ENERGY INITIATIVES. 

While the House Republican budget does not detail funding levels for specific programs, 

it proposes slashing discretionary spending on energy programs by 57% in 2013. 3 Even if the 

cuts were distributed evenly across the full range of energy programs, the impacts on energy 

efficiency and renewable energy initiatives would be severe. The rhetoric and illustrative 

examples used in the Republican budget suggest that clean encrgy programs would likely be 

targeted for even more draconian cuts. 

Cutting the budget of the Office of Energy Efficiency and Renewable Energy by more 

than half would derail efforts to makc wind and solar power cost competitive with fossil fuels, to 

generate 20 % of U.S. electricity from wind by 2030, to expand geothermal generation capacity, 

and to help entreprcneurs brcak ground on several next-generation biorefineries. Cuts of this 

size would also cripple cfforts to retrofit tens of thousands of residential homes to save 

consumers money and conserve energy, to make the commercial building sector 20 % more 

efficient by 2022, and to develop transformational manufacturing processes and materials 

technologies that advance the clean energy economy by increasing industrial and manufacturing 

energy efficiency. Initiatives to improve the fuel economy of vehicle combustion engincs and 

reduce the cost of electric vehicle batteries would also face significant cuts. 4 

II. THE REPUBLICAN BUDGET CUTS THE ADVANCED TECHNOLOGY 

VEHICLE MANUFACTURING LOAN PROGRAM. 

2 U.S. Department of Energy, The Financing Force Behind America's Clean Energy 

Economy (Apr. 2012) (online at Ipo.energy.gov!?pagejd=45) (accessed Apr. 14,2012). 

3 House Committee on the Budget, Concurrent Resolution on the Budget-Fiscal Year 

2013, 112th Congo (2012) (H. Rep!. 112-421). 

4 U.S. Department of Energy, FY 2013 Congressional Budget Request: Budget 

Highlights (Feb. 2012). 

2 
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The House Republican Budget targets the Advanced Technology Vehicles Manufacturing 

(ATVM) Loan Program as an illustrative policy option for cuts under the heading, "Rescind 

Unobligated Balances in DOE's Green Subsidies and Loan Portfolio.',5 The bipartisan program 

was signed into law by President Bush in order to help auto companies finance the production of 

energy-efficient vehicles and spur private investment. The FY 2009 Continuing Resolution 

appropriated $7.5 billion in credit subsidy funding to support $25 billion in A TVM loans. 7 

By supporting permanent manufacturing jobs, the program revitalizes communities 

experiencing stagnant economic growth. 8 As of April 2012, the ATVM program has supported 

38,700 jobs through loans to five companies operating 20 projects. 9 

The ATVM program has helped fund the development of plug-in hybrid vehicles and 

electric vehicles where private financing was unavailable. JO Projects are reviewed by DOE on a 

competitive basis and must go through a "rigorous financial, legal and technical review 

process." II DOE ensures that each project meets the statutory requirement of a "reasonable 

prospect of payment." 12 

Examples of ATVM loans include: 

• Tesla - DOE has provided $465 million to Tesla Motors, supporting 1,500 permanent 

jobs in California. ll The loan will avoid 26,000 tons of carbon pollution annually, the 

equivalent of taking 5,000 cars off the road. 14 The loan will support the development of 

5 House Committee on the Budget, Concurrent Resolution on the Budget-Fiscal Year 

2013, 11th Congo (2012) (H. Rept. 112-421). 

6 U.S. Department of Energy, Fact Sheet: Advanced Technology Vehicles Manllfacturing 

Loan Program (online at Ipo.energy.govl?p=900). 

7 Senate Committee on Energy and Natural Resources, Alternative Fueled Vehicles 

Competitiveness And Energy Security Act, 112th Congo (S. Rept. 112-72). 

8 Jd. 

9 U,S. Department of Energy, The Financing Force Behind America's Clean Energy 

Economy (online at Ipo.encrgy.gov/?pagc_id=45) (accessed Apr. 14,2012). 

10 Jd. 

II Jd. 

12 lei. 

Jl U.S. Department of Energy, ATVM (online at Ipo.energy,gov/?pageJd=43) (accessed 

Apr. 14,2012). 

14 Jd. 

3 
99 


78727.065

two plants to develop the Tesla Model S, as well as battery packs and electric 

drivetrains. IS 

• The Vehicle Production Group LLC - DOE has provided $50 million to the Floridabased company, supporting 900 jobs. The loan will avoid 9,000 tons of carbon pollution 

annually, the equivalent of taking 2,000 cars off the road. 16 DOE funding will support 

the modernization of facilities in Michigan in order to produce advanced high-strength 

steel. 17 

In February 20 II, the Government Accountability Office issued a report assessing the 

program's performance. GAO concluded: "In making its first loans, the A TVM program has 

injected significant funds into the U.S. automotive industry for promoting improved fuel 

efficiency of conventional vehicles and encouraging the development of vehicles with newer 

technologies that rely less, or not at all, on petroleum." 18 

The A TVM program has broad support. The Chamber of Commerce has opposed 

elimination of the program 19 and Chairman Upton supported and voted for the ATVM program 

in 2007. 20 Chairman Upton also wrote to Secretary Chu in July 20 I 0, along with a group of 

bipartisan lawmakers, urging "prompt completion and consideration of loan applications" from 

his home state21 and noted "[f]or America's auto industry to continue its global leadership into 

the 21 st Century, we must foster the American manufacture of fuel-efficient vehicles for the mass 

market.,,22 

IS Daniel J. Weiss, Bush-Era Joh Program is GOP Leaders' No.JTarget, Center for 

American Progress (Sept. IS, 20 II). 

16 U.S. Department of Energy, ATVM(online at Ipo.energy.gov/?pagejd=43) (accessed 

Apr. 14,2012). 

17 Daniel J. Weiss, Bush-Era Joh Program is GOP Leaders> No,]Target, Center for 

American Progress (Sept. 15, 20 11). 

18 U.S. Government Accountability Office, Department of Energy: Advanced Technology 

Vehicle Loan Program Implementation Is Under Way, but Enhanced Technical Oversight and 

Performance Measures Are Needed (Feb. 28, 2011) (GAO-I 1-145). 

19 Letter from R. Bruce Josten, Executive Vice President, Government Affairs, Chamber 

of Commerce, to Members of the United States Senate (online at 

peters.house.gov/uploads/Chamber%20ATVM%20Ietter.pdf) (accessed Apr. 14, 2012). 

20 See, e.g, Critic of clean energy loans lobbied Energy Department, USA Today (Sep. 

27,2011). 

21 Cluhfor Growth criticizes Solyndra critic Upton, USA Today (Feb. 16,2012). 

22 Id. 

4 
100 


78727.066

Ill. THE REPUBLICAN BUDGET RESCINDS FUNDING FOR LOAN 

GUARANTEES FOR ENERGY EFFICIENCY AND RENEW ABLE ENERGY 

PRO.JECTS. 

DOE's Loan Guarantee Program Office (LGPO) provides and manages ioan guarantees 

for clean energy projects awarded under section 1703 and section 1705 of the Energy Policy Act 

01'2005.23 As of April 2012, the 28 loans that have been finalized under the two programs will 

support 18,603 construction jobs and 3,498 permanent jobs.24 The House Republican Budget 

proposes to de-fund this program by rescinding unobligated balances in 2013. 25 

Innovative renewable energy projects are eligible to receive loan guarantees under 

section 1705 of the Energy Policy Act. For example, LGPO administered a $117 million loan 

guarantee to build a wind farm in Hawaii that will supply clean electricity to more than 7,500 

households. Not only did the project employ hundreds of workers during construction, it relied 

011 wind turbines that were built in Cedar Rapids, Iowa, and featured an energy storage system 

supplied by a company in Texas. In total, this loan guarantee fed a supply chain that reached 104 

U.S. businesses in 21 states?6 

The loan guarantee program helps U.S. manufacturers compete with China and other 

countries that are heavily subsidizing their renewable energy industries. Between 1995 and 

20 I 0, the share of photovoltaic cells and panels manufactured in the United States dropped from 

over 40% to just 6%.27 Since 2005, China's market share has increased from 6% to 54%.28 In 

20 I 0, the China Development Bank provided more than $30 billion in loans to Chinese solar 

manufacturers. 29 Chinese manufacturers also benefit from "free or subsidized land from local 

governments, extensive tax breaks and other government assistance.,,3o 

23 U.S. Department of Energy, About the Loan Programs Office (LPO) (online at 

Ipo.cnergy.gov/?pagejd=2) (accessed Apr. 14,2012). 

24 U.S. Department of Energy, Loan Programs Office, Our Projects (online at 

Ipo.energy.gov/) (accessed Apr. 14,2012). 

25 HOLlse Committee on the Budget. Concurrent Resolution on the Budget-Fiscal Year 

2013, 112th Congo (2012) (H. Rep!. 112-421). 

26 House Committee on Oversight and Government Reform, Testimony of Deputy 

Secretary Daniel Poneman, U.S. Department of Energy, How Obama's Green Energy Agenda is 

Killing Jobs (I 12th Cong.) (Sept. 22,2011). 

27 House Committee on Energy and Commerce, Subcommittee on Oversight and 

Investigations, Testimony of Jonathan Silver, Hearing on Solyndra and the DOE Loan 

Guarantee Program (Sept. 14, 20 II). 

28 [d. 

29 Solyndra 's Failure Is No Reason to Abandon Federal Energy Innovation Policy, 

Forbes (Sept. 2, 2011). 

3D Us. Solar Company Bankruptcies a BoonJor China, New York Times (Sept. 1,2011). 

5 
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78727.067

On January 31, 2012, the White House released a detailed analysis of the DOE loan 

guarantee portfolio, conducted by financial executive Herbert Alison. This analysis of all DOE 

loan guarantees found that the portfolio had effectively managed risks and was expected to cost 

taxpayers approximately $2 billion less than initially anticipated. 31 

IV. THE REPUBLICAN BUDGET ELIMINATES SUPPORT FOR GREEN 

TRANSMISSION PROJECTS 

The House Republican Budget calls for the repeal of borrowing authority for the Western 

Area Power Administration's (W AP A) Transmission Infrastructure Program.12 W APA, a power 

marketing administration within DOE, was provided $3.25 billion in borrowing authority under 

the Recovery Act to modernize the electrical grid in order to promote energy and cost-saving 

choices for consumers, reduce carbon pollution emissions, and foster the growth of renewable 

energy sources like wind and solar. 33 With the Recovery Act borrowing authority, WAPA can 

borrow funds from the Treasury Department to ·'finance. facilitate, plan, construct, operate. 

maintain, and study the construction of new or upgraded transmission lines and related facilities 

for the delivery of power generated by renewable energy resources.,,34 

Three WAPA projects are currently underway: (I) the Montana-Alberta Tie Ltd.; (2) the 

TransWest Express, which spans from Wyoming to Nevada; and (3) Electrical District No.5 to 

Palo Verde Hub in Arizona. W APA is currently reviewing additional projects, which would use 

the full $3.25 in borrowing authority if approved. 35 

The Montana-Alberta Tie transmission line will enhance the development of wind power 

in Montana, powering up to 300,000 homes with wind energy.36 The TransWest Express 

transmission line will deliver 3,000 megawatts of renewable energy from Wyoming to the Desert 

Southwest, supporting roughly 2,000 jobs. 37 And the Palo Verde project, a 109-mile 

3 I The White House, Reporr of the Independent Consultant's Review with Respect to the 

Department oj' Energy Loan and Loan Guarantee Porifolio (Jan. 31, 2012). 

32 House Committee on the Budget, Concurrent Resolution on the Budget-Fiscal Year 

2013, 112'h Congo (2012) (H. Rep!. 112-421). 

33 Western Area Power Administration, About the Transmission Infrastructure Program 

(online at ww2.wapa.gov/sites/Western/recovery/Pages/About.aspx) (accessed Apr. 14,2012). 

34 House Natural Resources Committee, American Taxpayer and Western Area Power 

Administration Customer Protection Act of 20 II, Dissenting Views, I 12th Congo (20 II) (H. 

Rcpt.). 

35 Western Area Power Administration, Transmission lI?j'rastructure Program (online at 

http://ww2.wapa.gov/sites/western/recovery/Pages/default.aspx) (accessed Apr. 16,2012). 

36 Western Area Power Administration, ivfontana-Alberta Tie Limited Project (online at 

ww2.wapa.gov/sites/Western/recovery/project/Pages/MATL.aspx) (accessed Apr. 17,2012). 

37 House Natural Resources Committee, American Taxpayer and Western Area Power 

Administration Customer Protection Act oj'2011, Dissenting Views. 112th Congo (2011) (H. 

Rep!.). 

6 
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78727.068

transmission line, will increase the delivery of solar power to consumers in Arizona, southern 

Nevada, and southern California. 38 

In response to a committee vote by Republicans to repeal W APA, Democrats on the 

I louse Natural Resources Committee wrote that repeal would "destroy jobs, and in the long-term 

... undermine the American companies and workers competing with China in the high-tech 

economic sectors of the 21 st Century:.J9 

IV. THE REPUBLICAN BUDGET MAINTAINS NEARLY $40 BILLION IN TAX 

BREAKS FOR BIG OIL 

While the Republican budget imposes massive cuts on DOE's programs to encourage the 

development of renewable energy and other innovative technologies, the budget does nothing to 

reduce billions of dollars of tax subsidies currently going to oil and gas companies that are 

earning record profits. 

As part of his FY 2013 budget request, President Obama has proposed eliminating $38.6 

billion worth of oil and gas company tax preferences over ten years, including the enhanced oil 

recovery credit and percentage depletion for oil and natural gas wells. 4o Percentage depletion 

allows oil companies to deduct the costs of an oil or gas well on a favorable basis. 41 

In 2011, the largest five oil companies made a combined total of$137 billion in profits, a 

75% increase from 2010. 42 As of December 2011, these five companies were maintaining $58 

billion in cash reserves43 

According to an analysis by the Center for American Progress, eliminating oil and gas tax 

preferences could pay for: (I) the salaries of36,000 high school teachers; (2) Pcll Grants for 

38 Western Area Power Administration, Electrical District No.5 - Palo Verde Hub 

Project (on I ine at ww2. wapa. gov Isites/W esternlrecovery/project/Pages/ED 5 PVH .aspx) 

(accessed Apr. 17, 2012). 

39 House Natural Resources Committee, American Taxpayer and Western Area Power 

Administration Customer Protection Act of 2011, Dissenting Views, 11 t h Congo (2011) (H. 

RepL); Bills 10 Strip $3.3Bfor Transmission, Shooling Sea Lions Pass House Panel, New York 

Times (OCL 6, 2011). 

40 Office of Management and Budget, CUIS, Consolidations, and Savings: Budget of the 

U.S. Government (2012). 

41 Seth Hanlon, Big Oil's Misbegotten Tax Gusher, Center for American Progress (May 

5,2011). 

41 Daniel 1. Weiss, Jackie Weidman, and Rebecca Leber, Big Oil's Banner Year, Center 

for American Progress (Feb. 7, 2012). 

4) 1d. 

7 
103 


78727.069

more than 500,000 college students; or (3) 67,000 homc solar encr,p systems, which would 

reduce carbon dioxide pollution by 175,000 metric tons annually.4 

Instcad of making imp0l1ant investments in clean and renewable energy, the 

Republican's budget retains these multi-billion tax breaks for oil companies that are earning 

record profits. 

44 Id. 

8 
104 

Mr. STEARNS. My question is to the three of you. I will start with 

Mr. Johns. Mr. Johns, in a committee letter of March 15, 2012, the 

Treasury admitted that, ‘‘Job creation is not one of the statutory 

requirements for eligibility, and thus, it is not a factor in a consideration process with the Section 1603 Recovery Act grants to renewable energy projects.’’ Do you recognize that statement? In 

other words, basically, creating jobs is not one of the missions of 

the Department of Energy under the Section 1603. Treasury says 

that that is not a big mission. Is that—do you understand that? 

Mr. JOHNS. Sir, I heard that comment but I will say that because 

1603 doesn’t have a direct budget impact on the Department of Energy, it is not something that I have spent particular time reviewing. 

Mr. STEARNS. But it is true that Department of Treasury administers the 1603 Program with technical support from the Department of Energy, isn’t that true? 

Mr. JOHNS. That is correct. 

Mr. STEARNS. And so when they come and say that under statutory requirements, job creation is not a consideration in the process. I think that is an important fact. 

Nevertheless, when Secretary Chu was before us and he was 

asked questions about this 1603 tax grant program, he says that 

it has created tens of thousands of jobs in industries such as wind 

and solar, and he was under oath. Do you remember him saying 

that? 

Mr. JOHNS. I do remember him saying that. 

Mr. STEARNS. OK. Do you think that is true? 

Mr. JOHNS. I don’t have any other basis to judge, other than—— 

Mr. STEARNS. We had no way to determine if what he was saying 

was true; however, recently there was a released report on Friday, 

April 6, 2012, from the National Renewable Energy Laboratories, 

‘‘Preliminary Analysis of the Jobs and Economic Impact of the 1603 

Program.’’ Are you aware of that? 

Mr. JOHNS. I am aware there was a study. 

Mr. STEARNS. OK. So we have Secretary Chu saying tens of thousands of new jobs. This report comes out in April talking about it, 

and DOE—in fact, it went on to say that DOE did not provide any 

data. There was no data to back up Secretary Chu’s claim of tens 

of thousands of jobs. So basically, you are familiar with this report. 

This report is contradicting Secretary Chu, saying that tens of 

thousands of jobs were not created, and yet, he goes around and 

we hear the Democrats over on this side of the aisle keep talking 

about all these jobs are created and the factual report says that 

they were not. 

Let me ask Mr. Friedman. Are you aware of this report that I 

just mentioned that came out April 6? 

Mr. FRIEDMAN. I am not, Mr. Chairman. 

Mr. STEARNS. OK. Are you, Mr.—Dr. Rusco? 

Mr. RUSCO. No, I am sorry. 

Mr. STEARNS. Well let me ask each of you, in your best estimation, do you think Secretary Chu is correct when he said tens 

of thousands of new jobs were created under the 1603 Program? 

Dr. Rusco? 

105 

Mr. RUSCO. We have not looked into that program. We have not 

received any request to evaluate that, so I am sorry, I don’t have 

any basis to judge. 

Mr. STEARNS. OK. 

Mr. FRIEDMAN. I am in the same situation, Mr. Chairman. 

Mr. STEARNS. Well, we have in this article I just put into the 

record from the Business & Financial, ‘‘The millions of green jobs 

that President Obama promised have been slow to sprout, disappointing many who have hoped that the $90 billion earmarked 

for clean energy efforts in the recession-fighting Federal stimulus 

package would ease unemployment, still above 8 percent in March. 

Supporters say the administration overpromised on the job front 

and worry that a backlash could undermine support for clean energy policies in general. A $500 million job training program has 

thus far helped fewer than 20,000 people find work.’’ It sort of falls 

short of its goal. So I think the question I now want to direct to 

is Dr. Rusco, isn’t it true that the report says that the results—the 

National Renewable Energy Laboratory, that report, cannot be attributed to the 1603 Grant Program alone? Do you understand the 

question? 

Mr. RUSCO. I am sure—if I do, I am sure that is correct. 

Mr. STEARNS. The results presented in this report cannot be attributed to the 1603 Grant Program alone. 

Mr. RUSCO. Yes, I am sure that is true. 

Mr. STEARNS. OK. Some projects supported by the 1603 award 

may have progressed without the award, while others may have 

progressed only as a direct result of the program. Therefore, the 

jobs and economic impact estimates can only be attributed to the 

total investment in the projects. Would that be a fair thing to say? 

Mr. RUSCO. I think in general for any program like this, that 

would be a fair thing to say. 

Mr. STEARNS. Yes. Also, the report’s jobs estimate should be interpreted as gross rather than net estimates. Do you think that is 

true? 

Mr. RUSCO. Yes. 

Mr. STEARNS. OK. The model used by DOE to arrive at their estimate does not account for displacement of jobs or economic activity 

related to changes in utilization of existing power plants, electric 

utility revenues, and household and business energy expenditures. 

Neither do the jobs and economic impact estimates account for possible alternative spending of the Federal funds used to support the 

1603 Program. Is that a fair estimate? Would you agree with that? 

Mr. FRIEDMAN. Yes. 

Mr. STEARNS. Mr. Friedman? OK. I think my time is expired. I 

am going to recognize the gentlelady from Colorado. 

Ms. DEGETTE. Thank you very much, Mr. Chairman. 

So I want to talk a little bit about the themes I was talking 

about in my last set of questions, which are we really need to find 

savings and we need to cut programs that are inefficient or not 

useful towards our overall long-term energy goal. On the other 

hand, I think we do need to in a fiscally responsible way invest in 

energy for the future. So for example, in 2009, as we have heard 

in this committee, the Chinese government poured $120 billion in 

their government funds into renewable energy, $45 billion on the 

106 

electric grid alone, while the United States just invested $20 billion. And most of that wasn’t in direct investment and energy development. 

So Mr. Johns, I want to know how much the Department has requested for energy—renewable energy initiatives in the 2013 budget? 

Mr. JOHNS. It is approximately $2.3 billion. 

Ms. DEGETTE. And that $2.3 billion includes a 29.1 percent increase in funding for the Office of Energy Efficiency and Renewable 

Energy, is that right? 

Mr. JOHNS. That is correct. 

Ms. DEGETTE. Now what do you intend to do with these additional funds? 

Mr. JOHNS. I highlighted one of the particular areas a few minutes ago, the Advanced Manufacturing Initiative. That program invests broadly in solar, offshore wind in this case, and other key investments with a focus on those areas that we—where we can provide groundbreaking research, help get things deployed where appropriate. We have reduced—to your point earlier about reducing 

spending, we have reduced spending in those areas where we think 

there is no more real government gain to be made—— 

Ms. DEGETTE. But where you have got established industries 

that are going forward without the government’s support. 

Mr. JOHNS. Onshore winds, some of the hydro programs, those 

kind of things where we are reducing—we are making shifts in our 

investment where we are reducing funding in those areas that are 

more mature, reducing funding in some of the grid and other investments, fuel cells, where we no longer—the government just 

doesn’t need to play a role anymore. 

Ms. DEGETTE. Those industries seem to be moving forward on 

their own—— 

Mr. JOHNS. Exactly. 

Ms. DEGETTE [continued]. Is that what you are saying? 

Mr. JOHNS. Yes, ma’am. 

Ms. DEGETTE. And for these additional investments that you are 

doing, what kind of accounting oversight do you have to make sure 

that those funds are being efficiently spent? 

Mr. JOHNS. We—for those funds that are already appropriated, 

we have a—we are increasing pretty dramatically right now our 

transparency into the numbers and into the actual progress on 

those, meeting with senior leadership, bringing them this kind of 

information on not just the status of the funding, though that is 

important, but also their progress in reaching the performance 

measures that they have established. 

Ms. DEGETTE. OK. Now Mr. Friedman mentioned about the 

ARRA money, how quite a bit of that still has—while it has all 

been appropriated, some of it has not been disbursed. What is the 

DOE doing to get the rest of that money out the door, and what 

are you doing to ensure that the Venn diagram that he talked 

about comes out just right? 

Mr. JOHNS. He had it exactly right in terms of the—there is a 

tension there between spending the money fast and spending the 

money right. We focused on getting money obligated, which means 

that work is being done. We are now being careful about the rate 

107 

at which we then pay the bills. We haven’t received bills in some 

cases from contractors and from States and from companies, so we 

are very careful in making sure that the work has been done. For 

example, on weatherization, the—each home has to be inspected 

before we can sign off that the work has been done and therefore 

it is appropriate to pay the money. So it is these kinds of measures 

in part through the work of GAO and IG that they have recommended that we are being careful about the rate at which we 

then—— 

Ms. DEGETTE. So when is that all going to be disbursed, that is 

my question. 

Mr. JOHNS. It depends on the program, but as you heard, some 

of it has a deadline of 2013. The money as originally appropriated 

had a deadline of 2015, so we are working to get it out as quickly 

as appropriate, but we don’t want to spend—we don’t want to get 

the money out before we can confirm that the work was finished. 

Ms. DEGETTE. OK. Thank you. 

Thank you very much, Mr. Chairman. I yield back. 

Mr. STEARNS. Gentleman from Virginia is recognized for 5 minutes. 

Mr. GRIFFITH. Dr. Rusco, GAO came out in February of this year 

with a report on Federal renewable energy initiatives, and based 

on its review, GAO found that government-wide, 23 agencies and 

their 130 sub-agencies implemented nearly 700 renewable energy 

initiatives in fiscal year 2010. I guess my question is was it possible before February of this year to effectively identify fragmentation or duplication across the various Federal renewable energy initiatives? 

Mr. RUSCO. I believe that this inventory of these initiatives, this 

is the first time this had been done. 

Mr. GRIFFITH. All right, and so prior to that there would not 

have been a comprehensive inventory of these programs? 

Mr. RUSCO. That is correct. 

Mr. GRIFFITH. And do you believe or do you have any idea how 

much money might be saved if we were able to eliminate duplication in these programs? 

Mr. RUSCO. We were unable to get to that point. It took us all 

the time we had just to create the inventory. We are looking at key 

technologies within that now in three individual studies. We are 

trying to—we are looking at solar, wind, and battery storage, and 

we are trying to get some more granularity so we can determine 

if there is potential duplication. 

Mr. GRIFFITH. OK, and when do you expect that to be done? 

Mr. RUSCO. All three of those reports should be out this summer. 

Mr. GRIFFITH. Mr. Johns, any idea whether or not the agency 

will be willing to work with those duplications, even it means shifting one of the programs somewhere else? 

Mr. JOHNS. As I have said before, we take very seriously the recommendations from GAO. We will be in the middle of our 2014 

budget process if it comes out this summer, so we would certainly 

take a look at those. 

Mr. GRIFFITH. All right. As the Chairman said at the beginning 

of the hearing, and I would agree completely, we are not looking 

to spend a dime more than we should spend. We are looking to 

108 

spend money on the missions we need to spend money on, but if 

we can find or if GAO and IG find places where we can make reductions, then we are absolutely interested in those. Because it 

doesn’t really matter how we got here or which administration did 

what. The bottom line is we know that our country needs to save 

money and we need to do whatever we can to find it. Isn’t that correct? 

Mr. JOHNS. My mission as a civil servant is to do exactly that, 

to make sure that we are spending the money that we have wisely 

and that we are not—— 

Mr. GRIFFITH. And to eliminate any spending that we don’t need 

to be spending? 

Mr. JOHNS. Yes, sir. 

Mr. GRIFFITH. All right. 

Mr. Friedman, in your prepared testimony you noted that the IG 

added operational efficiency and cost savings as a preeminent management challenge for 2012. Your testimony also points out that 

the future may well entail funding levels that simply make programmatic status quo unsustainable, and which may require rethinking the fundamental structure of the Department of Energy 

and its operations. Would you be willing to expand on that for me? 

Mr. FRIEDMAN. Well yes, Mr. Griffith. We felt that it was time 

after being in this business for a long period of time to sort of think 

outside our comfort zone, and given the realities of the situation 

and the seeming consensus and the fact that budgets going forward 

are going to be diminished and much more austere, we decided to 

take the body of knowledge that we had gained over many, many 

years and come up with five big-ticket items that would fundamentally change the Department of Energy and potentially save significant amounts of money, and we identify the five in the testimony. 

Mr. GRIFFITH. All right, and I am going to give you an opportunity to pick out your favorite one and tell me about it. 

Mr. FRIEDMAN. What my favorite one is? 

Mr. GRIFFITH. Yes. 

Mr. FRIEDMAN. Actually there are several that are favorite, but 

I certainly think the Department’s technology centers, the Federally Funded Research Development Centers, there are 16 of them, 

if this were a for-profit business we think it would be time to say 

hey, can we afford 16 with a 35 percent to 40 percent overhead for 

running each of those laboratories? Is it time to rethink the number of laboratories or does consolidation make sense? If this were 

your business or mine, we would have done that already. 

Mr. GRIFFITH. All right, very good. Then you have got time to tell 

me another, since you said there were several. 

Mr. FRIEDMAN. Well, the Department spends about $1 billion a 

year on physical security. We have some of the most sensitive sites 

in the United States. We think each site uses a slightly different 

approach or multiple approaches to obtain the Pro Force guards. 

These are paramilitary, very well-trained general contractors. We 

think there are ways of consolidating these contracts, which would 

result in economies of scale, common training, common arms, reduces the cost dramatically. 

Mr. GRIFFITH. Because I do believe it is a bipartisan—as you 

stated, going forward I think is a bipartisan effort. We have got to 

109 

try to live within our means. We can’t continue to spend money 

that we don’t have, and I appreciate your efforts in that regard, 

and I appreciate all of you being here today. Thank you. 

I yield back, Mr. Chairman. 

Mr. STEARNS. All right. I think we are all done. I am just going 

to take a little liberty here as Chairman to ask a couple questions 

here. 

I want to talk to the ATVM loans. When I say a 30 percent subsidy rate, do you understand what I mean by that? OK. To date, 

DOE has closed five loans totaling $8.4 billion on the ATVM loan, 

which is Tesla and Fisker, those kinds of automobile subsidies, and 

there have been no new loans closed since 2011. And there is $4.2 

billion, I understand, remains authorized but unobligated for loan 

subsidies. Is this correct? 

Mr. JOHNS. Yes, sir. 

Mr. STEARNS. OK. Is it possible we could give that money back 

to the taxpayers? 

Mr. JOHNS. The loan program is currently reviewing multiple applications. I don’t know the status of those individual applications 

right now. Certainly money that is not needed would be given back 

to—— 

Mr. STEARNS. OK, but since $3.3 billion has been obligated for ATVM loan subsidies on $8.4 billion of loans, this is a subsidy rate 

of 30 percent, is that correct? Take my word for it, it is correct. 

How do you explain an actual subsidy rate of 39 percent, when 30 

percent was established for the program in the beginning? You are 

the budget director. Why? 

Mr. JOHNS. I don’t have an answer for you. 

Mr. STEARNS. OK, all right. 

Dr. Rusco, in your testimony you noted that at the time of GAO’s 

review, DOE could not be assured that projects would be delivered 

as agreed. Can you explain what you meant by that? 

Mr. RUSCO. With respect—oh yes, with respect to the ATVM, yes. 

We felt that—well, according to the program guidance, they were 

to have technical engineering expertise on the ground at the time 

that the loan amounts were disbursed for keeping track of key 

milestones, technological milestones, and making sure that the 

companies receiving the loans were meeting those milestones before further disbursements were made. And at the time that we reported, the program did—had not acquired that expertise and we 

felt—— 

Mr. STEARNS. But basically the DOE had not established sufficient performance measures so that you could assess the program? 

Mr. RUSCO. That is true as well that they have not—had not at 

the time established measures that would identify the fleet energy 

savings associated with the program loans. 

Mr. STEARNS. Mr. Friedman, anything you might want to offer 

on that? I mean, I think it is a little shocking to hear that the DOE 

did not even provide sufficient performance measures so that the 

GAO could even understand what is going on, but anyway, Mr. 

Friedman? 

Mr. FRIEDMAN. Well, one of the issues that we have raised in 

terms of lessons learned is the need for due diligence and metrics 

that allow a program evaluation in an intelligent way. 

110 

Mr. STEARNS. Mr. Rusco, we understand that several loan applications have been denied by the Department of Energy. Are you 

aware of that? 

Mr. RUSCO. I am sorry, which—— 

Mr. STEARNS. Some of the loan guarantees have been denied by 

the Department of Energy. 

Mr. RUSCO. Yes. 

Mr. STEARNS. OK. One applicant stated, ‘‘We had been forced to 

say uncle’’—have you heard about that? 

Mr. RUSCO. Not that specific case. 

Mr. STEARNS. But why have no new loans been approved, in your 

estimation? 

Mr. RUSCO. I think that there are a number of loans that have 

reached conditional commitment, including several nuclear loans 

and those, I believe, are still—well, they are still working through 

the licensing process and it is unclear whether, you know, at this 

point when those loans will be issued. 

I think there is some systemic problem with the way that the 

1703 part of the Loan Guarantee Program works, and that is that 

for many of the innovative technologies, they have to pay their own 

credit subsidy costs. And the fact that they are innovative means 

that they are going to be somewhat risky, and those costs may be 

very high. 

Mr. STEARNS. Maybe if you could just dwell on the ATVM loans 

and not in general, just in those. 

Mr. RUSCO. Yes. Since we have looked at that, I am unaware of 

the status of ongoing loan applications. I know there are some that 

are being considered. 

Mr. STEARNS. Yes. Would it be fair to say that since they are not 

approving any new loan applications and they have $4.2 billion of 

unused budget authority for this program, is it possible some of 

this money could be returned to the Treasury and we could help 

to balance the budget with it? 

Mr. RUSCO. Again, I am unaware of what the current status of 

the loan applications are. 

Mr. STEARNS. Just return it to the Treasury. 

Mr. Friedman, any comments on that, just return the money to 

the Treasury? 

Mr. FRIEDMAN. If you are asking could it be done, I am not an 

appropriations law expert but I see no reason why it could not be 

done. 

Mr. STEARNS. Mr. Johns, any reason why that $4.2 billion 

couldn’t be returned to the Treasury? 

Mr. JOHNS. Well as I said, we are active—the Loan Program Office is actively reviewing existing loan applications. I can’t tell you 

the status of those. 

Mr. STEARNS. All right. I think we have completed our questions 

here. 

Ms. DEGETTE. Mr. Chairman? 

Mr. STEARNS. I think Mr. Waxman’s supplemental memo—we 

had a question for Dr. Rusco. On January 31, 2012, DOE loan 

guarantee report by Herb Allison, he states on page 5 that DOE 

estimated the loan subsidy for the existing loan was $2.9 billion, 

while the estimated $2.7 billion of savings of $.2 billion or $200 

111 

million. Is it fair then to claim a savings of $2 billion future loans 

that have not been awarded? Does that make sense to you? 

Mr. RUSCO. I am sorry, I am not aware of—I am not sure what 

you are referring to. 

Mr. STEARNS. Yes, this is related to the Waxman memo in which 

they make a claim about the loan guarantee report by Herb Allison. Can—I guess the question is they are claiming savings of 

money. Can you verify or corroborate this savings? 

Mr. RUSCO. I am sorry, I would have to look at that and get back 

to you. 

Mr. STEARNS. I think that is a fair estimate of your response. I 

mean, that would be my response because it is a little technical. 

Unanimous consent I am just going to order—I am just going to 

put it in the record. How do you feel about that? 

Ms. DEGETTE. I feel excellent about it. Thank you, Mr. Chairman. 

Mr. STEARNS. I agree with that. OK. 

[The information is available at http://www.whitehouse.gov/sites/ 

default/files/docs/reportlonldoelloanlandlguaranteelportfolio.pdf.] 

Mr. STEARNS. Just in closing, Mr. Johns, can you report to us 

now on the number of vehicles in the DOE’s inventory, following 

up on Chairman Barton’s request in which he asked you to find 

precisely down to the four wheels? 

Mr. JOHNS. That is a different question. I can’t tell you number 

of wheels, but I can tell you—— 

Mr. STEARNS. No, I am just sort of making—trying to make light 

on this. 

Mr. JOHNS. Yes, sir. The current number in the fleet is 15,108 

vehicles, as you suggested, 15,000. The target for the—for 2013 is 

9,484, reflecting a reduction over time of the number. I would want 

to point out, though, that this is not just the cars that are sitting 

in the parking lot. This counts all of our vehicles, to include the 

trucks that we use to transfer nuclear material from one place to 

another, the bucket trucks that we use for the grid, those kind of 

things. So some of these are highly technical and highly specific vehicles. It is not just a matter of everyone in DOE gets a car. I assure you, I have not been given a car by the Department. 

Mr. STEARNS. Yes, because it is 15,000 employees and you have 

got 15,000 cars. It would appear that everybody has a car, but you 

are saying there is extrapolatory evidence here that they are using 

cars for things that are project-oriented and not for personal use. 

Mr. JOHNS. And these are also cars that are available to the— 

at the labs, so this is also being used by the contractors as well. 

So this is 15,000 vehicles for that total number, 115,000 people. 

Again, as I said—— 

Mr. STEARNS. One hundred fifteen thousand people? Not the contractors, you mean just the employees? 

Mr. JOHNS. It is for—it includes the contractors. 

Mr. STEARNS. So 100,000 and contractors would also get access 

to a DOE car? 

Mr. JOHNS. Because this is not just cars. We as the Department 

are paying for the contractors, the work of the contractors. 

112 

Mr. STEARNS. Couldn’t they buy their own car with their own 

funds? 

Mr. JOHNS. It is not just—these are not just personal—these are 

not just vehicles for them to drive back and forth with, these are 

vehicles for them to do the work that they do every day, the bucket 

trucks, the larger—these trucks to move nuclear material. 

Mr. STEARNS. Well when I listen to you I get a little more concerned because you said you had roughly 15,000 vehicles and you 

are saying the contractors, which is 100,000, get access to these. 

That is a little disturbing because DOE should control the cars 

under the DOE budget and you should not let private contractors 

have access to government property. These are private companies. 

Why would they give access to private companies to use their vehicles? So maybe you should provide us a more detailed breakout, if 

you can, and so I won’t put you on the spot any longer. But I am 

a little confused now. 

Mr. JOHNS. Well, I certainly can provide more information to 

you, but the point is that there are vehicles that we as the Department of Energy need to do our work. There are certainly cases 

where the private contractor is providing their own vehicle, but in 

these cases where we have highly sophisticated equipment, moving 

nuclear material, for example, bucket trucks, this kind of thing 

where we are paying a contractor to do a mission for the Department of Energy. In some of those cases, we have government vehicles that we are supplying. 

As I said before, we are not happy with that number which is 

why we have engaged in this effort to reduce the size of the fleet. 

Mr. STEARNS. I think if I were you, I would look to make sure 

that a private contractor who is getting paid by you is not using 

your vehicles when they should be using their own. 

Ms. DEGETTE. Mr. Chairman, if I may? 

Mr. STEARNS. Sure. Mr. Friedman, if you want to answer that, 

go ahead. Go ahead, Ms. DeGette. 

Ms. DEGETTE. Mr. Chairman, the private contractors would include—I think what Mr. Johns is trying to say, and I am not giving 

an opinion on whether they have the right amount of cars or not, 

but I think what you are trying to say, Mr. Johns, is some of the 

contract employees are like employees at the labs—— 

Mr. JOHNS. Correct. 

Ms. DEGETTE. And so when they are on site at the labs, they are 

using government vehicles there. It is not like you folks are assigning passenger cars to contractors to drive back and forth to work, 

is that right? 

Mr. JOHNS. That is correct. 

Ms. DEGETTE. I think what would be really helpful, since the 

Chairman and Mr. Barton are both very concerned about the number of vehicles, and me too, is if you guys could give us a breakdown of the types of vehicles, passenger cars versus these other 

types of vehicles and where they are sited, and what your plan is 

for reducing the number of vehicles, so instead of using this like 

a sound bite—you know, 15,000 employees, 15,000 cars—we can actually see what these vehicles are, who is using them, and what 

the reduction plan is. Thank you. 

Mr. JOHNS. Yes, ma’am. 

113 

[The information follows:] 

114 


78727.070

The Honorable Cliff Stearns 

Chairman 

Department of Energy 

Washinnton, DC 20585 

April 27, 2012 

Subcommittee on Oversight and Investigations 

COlllmiltee on Energy and COlllmerce 

U.S. House of Representatives 

Washington, DC 20515 

Deal' Chairman Stearns: 

Thank you for allowing me to testify before the Subcommittee on Oversight and 

Investigations at the hearing entitled "Budget and Spending Concerns at DOE" on April 

18,2012. During the course of the hearing, Committee members raised questions 

regarding the number of vehicles the Department of Energy (DOE) maintains to carry out 

its mission. I wanted to take this opportunity to provide additional details of the 

Department's efforts to reduce our vehicle fleet size to the minimum necessary to safely 

and effectively satisfy our programmatic requirements. 

Upon joining DOE, Secretary Chu sought management efllciencies that could be 

gained to make the best use of taxpayer money. One arc a that he identified for 

improvement is the DOE vehicle fleet size. While recognizing that specialized vehicles 

arc required for critical DOE missions, Secretary Chu made an aggressive challenge to 

DOE programs to reduce the size of the vehicle fleet by 35 percent by the cnd of2013. 

As descrihed below, DOE is currently making progress in reducing its fleet size in 

response to Secretary Clllt'S direction. 

The Department's mission is to ensure America's security and prosperity by 

addressing its energy, environmental and nuclear challenges through transfollnative 

science and technology solutions. Every day, DOE's programs are working to promote 

energy innovation, transform Amcrica's energy infrastructure, and enhance 0\11' nation's 

nuclear security by maintaining a safe, secure, and effective nuclear stockpile. This 

mission is executed by the 127,376 DOE employees and contractors (14,945 Federal 

employees aile! 112,431 contractors) at more than 80 major laboratories and field site 

locations across the country. 

Accomplishing this important mission requires access to the right equipment, 

including a ready fleet of vehicles. Much of DOE's mission work is done at National 

Laboratories and field sites located ill remote parts of the country. Vehicles are needed at 

these sites to support operations and maintenance, which includes maintaining utilities 

and facilities, providing site security, and protecting and transporting nuclear materials. 

V chicles are also needed to move hazardous or contaminated materials, respond to 

® IJtinlCd \'Iilh soy ink on mcYC!C(j paper 
115 


78727.071

emergencies, and service tells of thousands of miles of transmission lines to support the 

federal power system. Of the 17 National Laboratories, all but one arc GovernmentOwned, Contractor-Operated facilities. This means that the labs and their equipmentincluding the vehicle Heet-is the property ofthe fcdcral government, while mission is 

executed largcly by contractors. This is appropriate given that the mission continues 

despite changes in contractor staff. 

The overwhelming majority of the vehicles used at DOE sites arc trucks, 

specialty, and emergency vehicles that are necessary i()!' mission activities. In Hlct, 

traditional passenger vehicles, such as sedans and station wagons, account for only fivc 

percent of DOE's vchicle fleet. 

Examplcs of the types ofvehiclcs used by the Department include: 

o More than 1,900 vehicles owned by thc Power Marketing Administrations (PMAs), to 

maintain the PMAs' 33,730 circuit-miles of high-voltage tmnsmission line and 609 

substations spread Ollt across much of the central and western United States. The 

PMAs require specialized utility vchicles to perform maintcnance on these power 

facilities, which arc critical to the reliability of the nation's electric grid. The PMAs 

recover the costs of these vehicles in their power and transmission rates; 

consequently, these are 110t taxpayer funded. 

" 445 emergency/emergency response vehiclcs and 748 law enforcement vehicles. 

.. Hundreds of vehicles devoted to DOE's nuclear weapons and nuclear waste 

responsibilities, including radiological surveillance vehicles and specially-designed 

trucks for transporting nuelcar materials. 

o And in the Washington, DC arca, the Dcpartment's 7,000 contractor and federal 

employees' are served by a total of 26 vehielcs, 75 pel:eent of which are fuel-efficient 

or alternative fuel vehicles. 

DOE's policy has been to keep the number of vehicles at the right levels to satisfy 

programmatic requirements. In this challenging budget environment, the Department is 

committed to being a strong steward of taxpayer resources by reducing administrative 

costs and saving energy which includes reducing the size of the DOE fleet. Secretary 

Chu has led this elTort since he came into office. For example, in a January 27, 201 I 

memo, Secretary Clm challenged the Under Secretaries, Office of Management, and 

PMAs to reduce Heet inventory by 35 percent without sacrificing either critical mission 

elements or our commitment to operating in a safe, secure and environmentally sound 

manner. 

The Department has already made significant progress in reducing thc size of its 

flect. In just the last year, DOE has reduced the size of its Headquarters fleet by 35 
116 


78727.072

percent, and over thc past decade, DOE has reduced its neet by more than 1,000 vehicles, 

during a timc when DOE's programmatic work has increased. As of December 31,20 II, 

the Department reportcd a vehicle count of 14,644 (3,850 DOE-owned; 9,956 GSA lease; 

245 eOllllllereial lease). 

Thank you for your consideration of this important subject. I have attached our 

vehicle COUllt by type for your information. If you have any further questions or require 

additional dctails, please contact me or have your staff contact Mr. Christopher Davis, 

Deputy Assistant Secretary for Congressional Affairs, at (202) 586-5450. 

cc: The Honorable Diana DeGette 

Sincerely 

Christopher Johns 

Budget Dircctor 

Ranking Member, Subcommittee on Oversight and Investigations 

The Honorable Joe Barton 

Chairman Emeritus 

Enclosures 
117 


78727.073

Department of Energy Vehicle COt)nt as of December 3 I, 2011 

Sedans/St 1,657 1,582 1,552 1,432 1,144 1,117 1,080 983 846 840 843 768 Wgns' 

low Speed 

Electric 0 0 0 0 0 0 0 0 0 0 82 86 

Vehicles 

Ambulances 54 48 65 53 4~ 56 58 57 55 62 60 61 

Buses 175 173 188 183 163 181 182, 187 198 192 182 168 

light Duty 

Trucks 4x22 6,477 5,804 5,522 4,994 4,717 4,801 4,455 4,271 4,322 4,290 4,244 3,942 

light Duty 

Trucks 4x43 2,559 2,535 2,601 2,524 2,452 2,740 2,509 2,576 2,420 2,737 3,122 2,970 

Medium Duty 

Vehicles· 3,496 3,621 4,089 4,245 4,294 3,804 4,449 4,485 4,368 4,114 4,465 4,566 

Heavy Duty 

Vehicies5 1,933 1,898 2,069 2,078 1,994 1,892 1,961 1,985 2,026 2,044 2,110 2,083 

Total: 16,351 15,65916,08615,50914,808 14,591 14,694 14,544 14,23514,27915,10814,644 

Notes: 

1 Includes Ford Fusion, Chevy Malibu, Chrysler Avenger, etc. 

2 Includes Chevy Silverado, Ford F150, Dodge Ram, etc" in the'1500 series, 

3 Includes Chevy Silverado, Ford F150, Dodge Ram, etc., in the 4x4 1500 series configuration. 

" Includes Chevy Silverado, Ford F150, Dodge Ram, etc., in the 2500 series. 

5 Includes GM, Ford, and Chrysler 3500 series to the 5-Ton stake trucks, and the 5-10 ton 

Tractors, 
118 

Mr. STEARNS. Yes, Mr.—— 

Mr. FRIEDMAN. Can I clarify one statement, Mr. Chairman? 

Mr. STEARNS. Sure. 

Mr. FRIEDMAN. I suffered a senior moment when they asked 

about the number of criminal cases we have ongoing, and I want 

to make sure I clarify the record so there is no misunderstanding. 

It is not a static number, it goes up and down depending upon the 

times. I said 350. The actual number is between 250 and 300, and 

I misspoke, and I apologize for that. 

Mr. STEARNS. That is fine. 

All right. I think we are ready to conclude. I would like to thank 

all the witnesses for their patience and staying with us, and also 

for the members who are participating. I remind the members they 

have 10 business days to submit questions for the record, and I ask 

the witnesses all agree to respond promptly to those questions if 

they are given to you. 

And with that, the subcommittee is adjourned. 

[Whereupon, at 12:35 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

119 


78727.074

FRED UPTON, M!CH!GAN 

CHA!RMAN 

Dr. Franklin Rusco 

ONE HUNDRED TWELFTH CONGRESS 

HENRY A. WAXMAN, CALIFORN!A 

RANKING MEMBER 

([ongre55 of tue Wntteb ~ta:te5 

~OUf5C of ~cpref5entatfl.1cf5 

COMMIITEE ON ENERGY AND COMMERCE 

2125 RAYBURN HOUSE OFFICE BUILDING 

WASHINGTON, DC 20515-6115 

(702)<'25-2927 

(202) 125-3641 

May 10,2012 

Director, Natural Resources and Environment 

Government Accountability Office 

441 G Street, N.W. 

Washington, D.C. 20548 

Dear Dr. Rusco: 

Thank you for appearing before the Subcommittee on Oversight and Investigations on April 18, 2012, to 

testify at the hearing entitled "Budget and Spending Concerns at DOE." 

At the hearing, you agreed to follow-up with Committee Members on several items addressed in your 

testimony, and which are attached. In addition, pursuant to the Rules of the Committee on Energy and 

Commerce, the hearing record remains open for 10 business days to penn it Members to submit additional 

questions to witnesses, which are attached. The format of your responses to these questions should be as 

follows: (I) the name ofthe Member whose question you are addressing, (2) the complete text of the question 

you are addressing in bold, and then (3) your answer to that question in plain text. 

To facilitate the printing of the hearing record, please e-mail yourresponses.inWordorPDFfonnat.to 

Alex.Yergin@mail.house.govbythecloseofbusiness on Thursday, May 24, 2012. 

Thank you again for your time and effort preparing and delivering testimony before the Subcommittee. 

1J.fL~ v~~it:ner(J Subcommittee on Oversight and Investigations 

co: The Honorable Diana DeGette, Ranking Member, 

Subcommittee on Oversight and Investigations 

Attachment 
120 


78727.116

The Honorable CUII'Stearns 

1. Was DOE's lowering of the estimate of the loan subsidy amount in the DOE Loan Guarantee 

Program from $5 billion to $2.9 billion due to effective management at DOE or other factors? 

2. How does GAO intend to build upon its February 27, 2012 report "Renewable Energy: Federal 

Agencies Implement Hundrecls ofInitiatives?" (GAO-12-260)? Will GAO be working with 

individual agencies, including DOE, to identify and remove duplication in renewable energy 

initiatives wherever it is found? If so, what is GAO's time line for carrying this out? 
121 


78727.075

The Honorable Cliff Stearns 

1. Was DOE's lowering ofthc estimate ofthe loan subsidy amount in the DOE Loan 

Guarantee Program from $5 billion to $2.9 billion due to effective management at DOE 

or other factors? 

We have not conducted the work necessary to answer whether DOE's lowering of the estimate is 

due to effective management at DOE or other factors. When GAO audited the Advanced 

Technology Vehicles Manufacturing loan program in 2011 (GAO-II-14S), we had concerns 

that, at the time, DOE had not yet hired the technical staff they needed to monitor the progress 

made by loan awardees. The Ford loan was made-and the credit subsidy amount calculatedduring a severe economic downturn in which U.S. auto manufacturers were experiencing 

reduced demands, so it is reasonable that the improvement of the economy would change the 

expectation of the cost of the loan. 

2. How does GAO intend to build upon its February 27, 2012 report "Renewable Energy: 

Federal Agencies Implement Hundreds ofInitiatives" (GAO-12-260)? Will GAO be 

working with individual agencies, including DOE, to identify and remove duplication in 

renewable energy initiatives wherever it is found? If so, what is GAO's time line for 

carrying this ou!'! 

GAO has initiated a series of follow-up engagements looking at solar, wind, and battery/energy 

storage across key federal agencies. These follow up engagements will specifically look at 

ongoing programs for instances where there may be duplication, overlap, or fragmentation, as 

well as the extent to which these etTorts are coordinated to minimize duplication, overlap, or 

fragmentation. One reason for the specific engagements is to look in more detail at the initiatives 

in each of these energy sources. As part of this body of work, GAO will meet with key agencies 

to identify and describe duplication, overlap, or fragmentation to the extent we find it. This work 

will be completed during 2012 and will likely contribute to our report in 2013 on opportunities to 

reduce duplication, overlap, and fragmentation. 
122 


78727.117

FRED UPTON. MICHIGAN 

CHAIRMAN 

ONE HUNDRED lWELFTH CONGRESS 

HENRY A. WAXMAN. CAliFORNIA 

RANKING MEMBER 

~ongrtSS of tbt Itnittb 6tatts 

"OUSt of IbpnStntattbtS 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYBURN HOUSE OFFICE BUILDING 

WASHINGTON, DC 20515-6115 

Mr. Christopher S. Johns 

Director, Office of Budget 

U.S. Department of Enc;rgy 

1000 Indepc:ndc;nce Avenue;, S.W. 

Washington, D.C. 20585 

Dear Mr. Johns: 

Ma,_ 1I021:12W927 

MlnOrityl102l.25-3t14' 

May 10,2012 

Thank you for appearing before the Subcommittc;c; on Oversight and Investigations on April 18. 2012. to 

testiiY at the hearing entitled "Budget and Spending Concems at DOE." 

At the hearing. you agreed to follow-up with Committee Mombelrs on seversl items addressed in your 

testimony. and which are attached. In addition. pursuant to the Rules of the Committee on Energy and 

Commerce. the hearing record remains open for 10 business days to permit Mombclrs to submit additional 

questions to witnesses, which are attached. The ronnat of your responses to these questions should bel as 

follows: (I) the name of the Mombelr whose question you are addressing. (2) the complete text of the question 

you are addressing in bold. and then (3) your answer to that question in plain text. 

To facilitate the printing of the hearing record. please e-mail your responses, in Word or PDF fonnat, to 

Alex.Yergin@mail.house.gov by the close of business on Thursday. May 24. 2012. 

Thank you again for your timo and effort preparing and delivering testimony bclfore the Subcommittee. 

1"Ji(L~ v~ 

Subcommittee on Oversight and Investigations 

co: The Honorable Diana DeGette, Ranking Mom_. 

Subcommittee on Oversight and Investigations 

Attachment 
123 


78727.118

The Honorable CIift'Steams 

Subcommittee on Oversight IIId Invctlipllcms 

~Buctaet IIId Spending Concema at DOE" 

April IS, 2012 

Additional Questions for the Record 

Page I 

1. Please explain in detail why DOE's budget rose substantially between 2000 and today even though 

the number of employees and contractors stayed roughly the same. 

2. Please provide DOE's plan for compliance with Executive Order 13589, as submitted to the Office 

of Management and Budget. 

3. I thank you for providing infonnation on the DOE's vehicle fleet on April 27, 2012, as you had 

promised. However, as additional follow-up, please provide an inventory of these vehicles 

organized by DOE office or laboratory. 

4. During the hearing, when asked what actions, if any, DOE is taIcing to identitY potential 

duplication or overlap across the nearly 100 renewable energy initiatives hosted at DOE in Fiscal 

Year 20 10- as noted by OAO in its February 27, 2012 report "Renewable Energy: Federal 

Agencies Implement Hundreds of Initiatives" (OAO-12-260) - you responded "we take very 

seriously the recommendations from OAO." 

a. Is DOE already talcing steps to address this concern, or is DOE waiting for OAO to come 

out with further reports this Summer on duplication? 

b. If DOE is taIcing actions, what is the envisioned timeftame for their completion? 

c. Are preliminary estimates available on the amount of savings to be obtained from reducing 

duplication across these initiatives? 

5. According to the 010's November 2011 report, "Management Challenges at the Department of 

Energy," the National Nuclear Security Administration (NNSA) maintains a costly set of distinctly 

separate overhead and indirect cost operations that often duplicate existing DOE functions. These 

redwlClancies ean complieate eommunieations and program execution. What is nOE doing to 

eliminate these duplicative and redundant NNSA functions? 

6. According to the report, the DOE operates laboratories, mostly managed and operated by 

contractors, at an annual cost of over $10 billion. Support costs represent 35-40% of total 

laboratory operating costs, which may be unsustainable in the current budget environment. What 

efforts is DOE taIcing to reduce administrative, overhead, and indirect costs at its laboratories? 

a. During the hearing, Mr. Friedman suggested that it might be "time to rethink the number of 

laboratories" or look into "consolidation" of the 16 research centers. Is DOE examining this 

question, and if so can you share details ofnOE's thoughts so far? 

7. According to the report, the DOE spends $700 million for a protective force staffed by contractors 

to secure its nuclear and defense-related facilities. The procurement of these services use three 

arrangements which lack uniformity and consistency and results in 25 separate contract 

instruments. What savings can DOE obtain by restructuring the way it procures its protective force 

support? 
124 


78727.119

Subcommittee on Oversight and Investigations 

"Budget and SperuIIng Concems at DOE" 

April IS, 2012 

Additional Questions for the Record 

Page 2 

8. Concerning the Weatherization Assistance Program, 010 issued a Mauagement Alert in 2009. In 

2010, the DOE 10 issued a further report noting that their ''testing revealed substandard 

perfonnance in weatherization workmanship, initial home assessments, and contractor billing. 

These problems were of such significance that they put the integrity of the entire Program at risk." 

a. Why did DOE take no actions earlier considering that the 10 kept warning DOE about the 

program? 

9. In its 2012 report, "Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve 

Savings, and Enhance Revenue," (OAO-12-342SP), GAO notes that there are fourteen grant and 

loan programs at DOE, Department of Transportation (DOT), and the Environmental Protection 

Agency (EPA) that have the effect of reducing mobile source diesel emissions, and that "enhanced 

collaboration and performance measurement could improve these fragmented and overlapping 

programs." 

a. What actions, if any, has DOE taken to identify and then reduce fragmentation and overlap 

across its programs aimed at reducing mobile source diesel emissions, including Clean 

Cities, Energy Efficiency and Conservation Block Grants, and the State Energy Program? 

b. How has DOE coordinated its efforts with DOT and EPA? 

c. Are preliminaIy estimates available on the amount of savings to be obtained through such 

efforts? 

The Honorable Joe Barton 

1. Please provide the Committee with the total amount DOE spent on travel in Fiscal Year 2011. 
125 


78727.076

Department of Energy 

Washington, DC 20585 

The Honorable Cliff Stearns 

Chairman 

December 20. 2012 

Subconnnitlee on Oversight and Investigations 

Committee Oil Energy and Commerce 

U, S, I'Iouse of Reprcscntalives 

Washington. DC 20515 

Dear tv!!'. Chairman: 

On April IS, 2012, Christopher.lohns. Director, Ollicc of Budget. testified 

regarding the "!1m!gct and Spending Concerns at DOE," 

Enclosed are the answers to I 0 questions that were submitted by Representative 

Joe Barton and you to complete the hearing record, 

If we can be of further assistance, please have your staff contact our 

Congressional Hearing Coordinator. Lillian Ov,;cn, at (202) 586-2031. 

Sincerely. 

Enclosures 
126 


78727.077

QUESTION FROM REPRESENTATIVE STEARi\fS 

Q I. Please explain in detail why DOE's budget rose substantially between 2000 and today cven 

though the number of employees and contractors stayed roughly the same. 

A 1. Budget increases over the time period from FY 2000 to the FY 2013 request level and 

associated Federal personnel increases can be attributed largely to increases in 

• NNS;\ (+$5.542m. +24% Full Time Equivalents (FTEs)). 

Energy Efficiency and Renewable Energy (+S1.285m, ~38% FTEs). 

Science (+$2, 193m. -1 % FTEs). 

Offset in part by decreases in 

Em'ironmcntal Management (-$298m. -40% FTEs). und 

Civilian Radioactive Waste Management (-$340111, -100% FTEs). 

However. large apparent increases in appropriated dollars arc reduced by the effects of 

inl1ation. Figure I depicts the DOE budget grouped in four categories in nominal or 

'then-year' dollars. Peak funding levels of about $70 billion off-scale 011 the chart in FY 

2009 depict tbe one-time Recovery Act Ihnding. which did cause an increase in stamng 

in temporary positions for the purpose of management oflhcsc accounts. 

Figure 1 . DOE Budget Authority FYOO to FY13 Request 

(as enatted dollars in billions) 

'0 

" 

20 

15 

10 

2000 1001 2002 2003 2004 200S 2006 2007 2008 2009 2010 2011 2012 2013 

Energy .. Science iii Nuclear Security Nuclear Cleanup 
127 


78727.078

Figure 2 represents the same interval in FY 2012 constant dollars. While the overall 

increase in DOE Budget Authority in 'as enacted' dollars is about 53%, when the 

increase is calculated in tenns ofFY 2012 constant dollars it is only about 15.6%, or 

about 1.1 % per year over inflation over the course of the 13 year interval with most of 

that growth occurring in FY 2001 and sustained thereafter. Thc largest percentage-wise 

increase is in Energy, while the largest overall increase is in Nuclear Security. 

Figure 2 - DOE Budget Authority FYOO to FY13 Request (FY12 dollars ~ doHar~ ln billions) 

30 ,-------------------.. - .• -.-.------------

2S 

20 

15 

10 

2000 2001 2002 200l 2004 2005 2005 2007 2008 2009 2010 2011 20ll 2013 

~'N Energy r, Science Nuclear Security Nuclear Cleanup 

Table I shows these changes by functional grouping from FY 2000 to the President's 

FY 2013 Budget. Increases in Energy, Science. and Nuclear Security arc partially offset 

by decreases in real terms in Nuclear Cleanup, Provision and Regulation (petrole~lm 

reserves and power marketing administration), and Mission Support. 

Table 1· DOE Changes from FY 2000 to FY 2013 President's Request 

(Constant FY12 $s in thousands)· 

DOE Group/Changes S Changes I 'Y. Changes 

Energy 1,783,476 I 80,1% I Science 1,253,875 I 34.3% l 

( Nuclear Security 3,694,879 I 44.1% , Nuclear Cleanup ·2,608,246 i ·31.9% 

i Provision & Regulation -486.550 I ·100,2% 

Mission Support ·25,466 i ·13.5% 

DOE, Total change 3,611,968 I 15.6% 
128 


78727.079

·Bstimates subject to uncertainties due to budget comparability issues. 

DOE has worked to achieve a more efficient staft"mg level consistent with program 

workload, but n:ductions in some areas have been offset by increases in personnel needed 

in national and homeland security in the post-Sill 1 decade, as well as in the plll'Sllit of 

national priorities in the development of science and technology, and in achieving our 

goals in the development of energy technologies. DOE science and teclmology, in 

particular energy technology are recognized as the engines of future economic srowth. 

DOE Federal FI'E usage, excluding PERC, over the time period from FY 2000 to FY 

2011 (for which there are tull year actual values) increased 0verB11 from 14,361 to 14,663 

or by about 2.1 %; while over the same interval DOE MelO contractor employees fell an 

estimated 3.4% from 100,333 to 96,873. 

Personnel numbers are not strictly proportional to the overall budget numbers as there are 

parts of the budget that fund outside participation, in the form of con1nIcts with industry; 

grants; cooperative efforts; construction of facilities; and equipment purchases. These 

expenditures do not tend to add significantly to either the Federal worIdorce or the M&O 

contractor staffing levels. A construction project may employ many industry contractors 

but have relatively few Federal employees, or M&O contractors in management or 

support of that conttact. While grant money in pursuit of Department research goals may 

employ many academic participants, these researchers would not be counted on the 

Department's roles as either Federal employees nor would they be counted as MelO 

contractors. 

3 
129 


78727.080

Workers who perform under support service contracts, a range of advisory service 

contracts, or R&D service contracts would also not add to the count of Federal employees 

or M&O contractors, but certainly have an effect on the budget and the overall amount of 

work that can be performed. 

Figure 3 depicts the changes in object class obligations from FY 2000 to FY 2013 in 

those classes with the greatest average yearly percentage changes. 'Personnel' reflects 

Federal employees only; not all object classes are shown for clarity and readability. With 

underlying GOP inflation averaging a bit over two percent over this time period, the chart 

shows which categories contributed most to the growth in the DOE topline. 

Figure 3 Chanses In Object Class ObllS8tions FY2000 to FY 2013 (dollars In millions)-

.,- 7% 

5.9" S,OOO '" 51' I.'" 

~ '.3" 51' 4,000 • 4" 3,000 ' 9% 1.9% 

• • 2.3% 3" 2,000 1.8" 

4,769 • 2" O~ 

1,000 -

• 1" U4I '44 lOS 54 393 4Z. 112 

"" Landa Equipment .aD AdvlJiory& Opso' Gr.nu ftartannal 'enonnal 

structures contracts assistance l.dlllIe, benefits 

services 

$ Change ." Change/year 

°FY 2013 obligations estimated at FY 2013 President's Budget levels. 

4 
130 


78727.081

QUESTION FROM REPRESENTATIVE STEARNS 

Q2. Please provide DOE's plan for compliance with Executive Order 13589, as submitted to 

the Office of Management and Budget 

A2. On November 9, 2011, the President issued Executive Order 13589 requiring executive 

agencies to submit a plan to the Office of Management and Budget (OMB) for reducing 

the combined costs in Fiscal Year (FY) 2013 for expenses. such as travel, employee IT 

devices, executive fleet costs, printing and miscellaneous promotional items by not less 

than 20 percent below FY 2010 levels. On December 12,2011, the Department of 

Energy submitted its plan with specific targets to OMB. On March 12,2012, the 

Department communicated to OMS its progress in savings during the first quarter of FY 

2012. OMB has not yet released any data to the public, but the Department looks 

forward to sharing this information with the CommiUee as soon as it becomes available. 

5 
131 


78727.082

QUESTION FROM REPRESENTATIVE STEARNS 

Q3. I thank you For providing information on the DOE's vehicle fleet on April 27,2012, as 

you had promised. However, as additional follow-up, please provide an inventory of 

these vehicles organized by DOE office or laboratory. 

A3. DOE's vehicle flee! inventory is listed below. DOE vehicle fleet totals and breakout is 

per the Federal Automotive Statistical Tool (FAST) FY 20 II year-end report (as of 

December IS, 2011 ). FAST is the system of record for motor vehicle inventories. It is 

aggregate data reported as year-end inventory balances. As such, it does not and will not 

discretely identify a vehicle turn-in executed in response to the Secretary's challenge to 

reduce 35%. FAST provides a one-time look at vehicle inventory data, as it is a statistical 

tool, not a fleet management information system. Updates, i.e., acquisitions, dispositions, 

rotations, will occur during the year, and periodic updates are made in the system. 

Department of Energy Vehicle Feet Inventor,' 

Primary: DOE Office - Site OfficelLaboratory 

Secondary: Vehicle Type 

(a) Passenycr: includes sedans;SUVs; light. medium and heavy duty vans; buses; 

light, medium, and heavy duty tnlcks; some may be dual-use (passenger and 

cargo). 

(b) Cargo: includes cargo vans and trucks. 

(c) Emergencv Response: includes law enforcement, emergency response and 

ambulances. 

Federal Energy Regulatory Commission 

Federal Energv ReyulalOT\' Commission 5 - V chicles 

(a) Passenger - 3 

(b) Cargo - 2 

(c) Emergency Response - 0 

Headquarters Site Office 

DOE Headquarters fleel 26 - Vehicles 

(a) Passenger - 17 

(b) Cargo - 5 

(e) Emergency Response - 4 

Health. Safetv & Securit\' - National '['rronin!! Cenler 25 - Vehicles 

(a) Passenger - 10 

(b) Cargo - 13 

(c) Emergency Response - 2 

6 
132 


78727.083

Office of Legacv Management 

(a) Passenger - 28 

(b) Cargo - IS 

(e) Emergency Response - 0 

National Nuclear SecuritY, Administration 

Ne\'ada Operations 

Livermore Operations-Livermore. CA 

(a) Passenger - 4 

(b) Cargo - 0 

(e) Emergency Response - 0 

:-Jcvada Site Ornec 

(a) Pllsscnger - 29 

(b) Cargo - 0 

(e) Emergency Response - 0 

43 - Vehicles 

4- Vehicles 

29 - Vehicles 

Nevada Test Site 957 - Vehicles 

(a) Passenger - 468 

(b) Cargo - 379 

(c) Emergency Response - 110 

Remote Sensing Laboratorv-Andrews AFB - MD 12 - Vehicles 

(a) Passenger - 7 

(b) Cargo - 5 

(c) Emergency Response - 0 

Special Technologies Laboratorv-Santa Barbara. CA 3 - Vehicles 

(a) Passenger - 2 

(b) Cargo - I 

(c) Emergency Response - 0 

NNSA Service Center - Albuquerque 

Albuquerque Site Ollice NM 34 - Vehicles 

(a) Passenger - 25 

(b) Cargo - 9 

(el Emergency Response - 0 

Honeywell Kansas City Plant. MO 12 - Vehicles 

(a) Passenger - 8 

(b) Cargo - 4 

(e) Emergency Response - 0 

7 
133 


78727.084

Honeywell. NM 16 - Vehicles 

(a) Passenger - 16 

(b) Cargo - 0 

(e) Emergency Response - 0 

Lawrence Livermore National Laboratorv 819 - Vehicles 

(a) Passenger - 418 

(b) Cargo - 367 I' 

(cl Emergency Response - 34 

Livermore Site Office \0 - Vehicles 

(a) Passenger - 10 

(b) Cargo - 0 

(c) Emergency Response - 0 

Los Alamos National Laboratorv 1.582 - Vehicles 

(a) Passenger - 805 

(b) Cargo - 682 

(c) Emergency Response - 95 

Los Alamos Sile Office 26 - Vehicles 

(a) Passenger - 26 

(b) Cargo - 0 

(c) Emergency Response - 0 

Pantel( Plant. TX 450- Vehicles 

(a) Passenger - 167 

(b) Cargo-108 

(c) Emergency Response - 175 

Savannah River/Mixed Oxide (MOX) 39 - Vehicles 

(a) Passenger - 28 

(b) Cargo - II 

(c) Emergency Response - 0 

Sandia Naliollal Laboratou' (SNLI CA. LivemlOre 37 - Vehicles 

(a) Passenger - 13 

(b) Cargo - 15 

(c) Emergency Response - 9 

SNL Hawaii and Alaska 7 - Vehicles 

(a) Passenger - 3 

(b) Cargo - 4 

8 
134 


78727.085

(c) Emergency Response - 0 

SNL Nevada. Tonopah Test Range 

(a) Passenger - 41 

(b) Cargo - 34 

(e) Emergency Response - 4 

SNL New Mexico 

(a) Passenger - 363 

(b) Cargo - 266 

(c) Emergency Response - 27 

Oak Ridge Office (NNSA) 

BWXT- Y-12 

(a) Passenger - 414 

(b) Cargo - 128 

(c) Emergency Response - 22 

Wackenhul Services. Inc. (NNSA) 

(a) Passenger - 34 

(b) Cargo - 6 

(c) Emergency Response - 75 

Office of Secure TraDsportation Roll-up 

Omee of Secure Transportation MSNCMSA 

(a) Passenger - 80 

(b) Cargo - 12 

ec) Emergency Response· 131 

Ollice or Secure Transport:llion Non-MSA 

(a) Passenger - 75 

(b) Cargo - 27 

(e) Eml!rgeney Response - 102 

Naval Reactors Laboratory Field Office 

Bellis Atomic Power Laboratorv 

(a) Passenger - 34 

(b) Cargo - 22 

(c) Emergency Response - 13 

9 

79 - Vehicles 

656 - Vehicles 

564 - Vehicles 

115 - Vehicles 

223 - Vehicles 

204 - Vehicles 

69 - Vehicles 
135 


78727.086

Knulls Atomic Power Laboratorv 

(a) Passenger. 16 

(b) Cargo· 30 

(c) Emergency Response· 13 

Offiee ofEnergy'Efficiene:y and Renewable Energy 

Golden Field Office 

National Renewable Energy Laboratory 

(II) Passenger - 34 

(b) Cargo· 16 

(e) Emergency Response - 0 

Office of Envito~enta~-MlUiagCmentCarlsbad Field Office 

Carlsbad Field Office 

(a) Passenger - 19 

(b) Cargo - 17 

(c) Emergency Response· 1 

EM Consolidated Business Center-Cincinnati 

Cincinnati 

(a) Passenger - 3 

(b) Cargo - 0 

(e) Emergency Response - 0 

Rocky Flals Building 55 

(a) Passenger - 1 

(b) Cargo - 0 

(c) Emergency Response - 0 

EM Small Projects Office 

Encrl.!Y Technology Engineerina Ccnler 

(a) Passenger· I 

(b) Cargo - 0 

(c) Emergency Response - 0 

West Valley 

(a) Passenger - 15 

(b) Cargo - 7 

(c) Emergency Response· 0 

10 

59 - Vehicles 

50 - Vehicles 

37 - Vehicles 

3 - Vehiclc.~ 

I-Vehicle 

1- Vehicle 

22 - Vehicles 
136 


78727.087

Grand Junction 

Grand Junction Office 

(a) Passenger· 4 

(b) Cargo - 0 

(c) Emergency Response - 0 

MOAB Uranium Mil! Trailings Remedial 

Action <UMTRAl Proiect (RAC) 

(a) Passenger - 20 

(b) Cargo - 10 

(c) Emergency Response· 0 

MOAB UMTRA Project (TAC) 

(a) Passenger· 4 

(b) Cargo· 3 

(c) Emergency Response - 0 

Portsmoutb/Paducab Project Office (PPPO) 

Depleted Uranium Hexafluoride (DUF·6) 

(a) Passenger· 16 

(b) Cargo - 0 

(c) Emergency Responsc - 0 

Paducah Deactivation and Decommissioning 

(a) Passenger· 100 

(b) Cargo - 19 

(c) Emergency Response· 0 

Paducah Infrastructure 

(a) Passenger - 25 

(b) Cargo-7 

(c) Emergency Response· 0 

Portsmouth Gaseous Diffusion Plant 

(a) Passenger· 125 

(b) Cargo - 20 

(c) Emergency Response. 0 

PPPO Offices 

(a) Passenger - 16 

(b) Cargo. 0 

(c) Emergency Response· 0 

12 

4-Vehicles 

30 - Vehicles 

7-Vehicles 

16- Vehicles 

119 - Vehicles 

32 - Vehicles 

145 - Vehicles 

16 - Vehicles 
137 


78727.088

Richland Operations Office 

Richland. Office oeRiver Protection 

Bechtel National. Inc. 

(a) Passenger - 37 

(b) Cargo - 42 

(c) Emergency Responsc - 0 

RiehlandlHanford 

Mission SUppOlt Alliance 

(a) Passenger - 616 

(b) Cargo· 44 

(c) Emergency Response - 8S 

Washington Closure Hanford 

(a) Passenger - 53 

(b) Cargo - ISS 

(c) Emergency Response - 0 

Savannah River Operations Office 

Savannah River Nuclear Solutions 

(a) Passenger - 558 

(b) Cargo - 431 

(e) Emergency Response - 13 

Wackenhut Services. Inc.-Savannah River 

(a) Passenger - 22 

(b) Cargo - 10 

(c) Emergency Response - 91 

OMce of Fossil Energy 

National Energy Technology Laboratory 

Albany Research Center 

(a) Passenger - 3 

(b) Cargo - I 

(c) Emergency Response - 0 

National Energy Techllologv Laboratorv-PA 

(a) Passenger - 29 

(b) Cargo - 16 

(e) Emergency Response - 3 

79 - Vehicles 

1,462 - Vehicles 

208 - Vehicles 

1,002 - Vehicles 

123 - Vehicles 

4- Vehicles 

48 - Vehicles 
138 


78727.089

National Energv Technologv Laboratorv-WV 22 - Vehicles 

(a) Passenger - 18 

(b) Cargo - 3 

(c) Emergency Response - 1 

Naval Petroleum Reserves 

Naval Petroleum and Oil Shale Reserves CO, UT, WY 30 - Vehicles 

(a) Passenger - 29 

(b) Cargo - I 

(c) Emergency Response - 0 

Strategic Petroleum Reserve (SPR) Project Management Office 

SPR Bayou Choctaw 20 - Vehicles 

(a) Passenger - 7 

(b) Cargo-7 

(c) Emergency Response - 6 

SPRBigHiIl 

(a) Passenger - 10 

(b) Cargo - 12 

(e) Emergency Response - 9 

SPR Bryan Mound 

(a) Passenger - 5 

(b) Cargo - II 

(e) Emergency Response - 9 

SPR Project Office LA 

(a) Passenger - 17 

(b) Cargo - 4 

(c) Emergency Response - 7 

SPR West Hackberrv 

(a) Passenger - 9 

(b) Cargo - 13 

(e) Emergency Response -11 

14 

31 - Vehicles 

2S - Vehicles 

28 - Vehicles 

33 - Vehicles 
139 


78727.090

omce of Nuclear Eliergy,Selence arid Tecbnology 

Idllbo Operllfions Omce 

BBWI 

(a) Passenger - 91 

(b) Cargo - 17 

(c) Emergency Response - 0 

CWI 

(a) Passenger - 119 

(b) Cargo - 104 

(c) Emergency Response - 0 

Idaho National Laboratorv-BEA 

(a) Passenger - 425 

(b) Cargo - 154 

(c) Emergency Response - 14 

omce .. ofSelence 

Chicago Office 

Ames Laboratorv 

(a) Passenger - 3 

(b) Cargo - 1 

( c) Emergency Response - 0 

Argonne EllSl 

(a) Passenger - 81 

(b) Cargo - 42 

(c) Emergency Response - 13 

Brookhaven National Laboralor\' 

(a) Passenger - 113 

(b) Cargo - 188 

(c) Emergency Response - J 5 

F~rrni National Accelerator Laboratorv 

(a) Passenger - 124 

(b) Cargo - 90 

(c) Emergency Response - 5 

15 

l08 - Vehicles 

223 - Vehicles 

593 - Vehicles 

4- Vehicles 

136 - Vehicles 

316 - Vehicles 

219 - Vehicles 
140 


78727.091

Lawrence Berkeley National Laboratory 

(a) Passenger - 163 

(b) Cargo - 59 

(c) Emergency Response - 3 

Princeton PIa.'IllIa Physics Laboratory 

(a) Passenger· 10 

(b) Cargo - 12 

(c) Emergency Response - 6 

Oak Ridge Office 

ISOTEK 

. (a) Passenger· I 

(b) Cargo - 0 

(c) Emergency Response - 0 

Oak Ridge Institute lor Science and Education 

(a) Passenger - 11 

(b) Cargo - 14 

(e) Emergcncy Response - 2 

Oak Ridge Operations (Fed) 

(a) Passenger - 50 

(b) Cargo - 30 

(e) Emergency Response. 5 

Office of Scientific and Technical Information 

(a) Passenger - 3 

(b) Cargo· J 

(c) Emergency Response - 0 

I'acitic Northwest National LabomlOr" 

(a) Passenger - 45 

(b) Cargo. 64 

(c) Emergency Response - 3 

Stanford Linear Accelerator 

(a) Passenger - 74 

(b) Cargo - 68 

(e) Emergency Response. 0 

16 

225 - Vehicles 

28 - Vehicles 

1- Vehicle 

27 - Vehicles 

87 - Vehicles 

4-Vehieles 

112 - Vehicles 

142 - Vehicles 
141 


78727.092

Stanford Site Office 

(a) Passenger - I 

(b) Cargo - 0 

(c) Emergency Response - 0 

Thomas Jefferson National Laboratorv 

(a) Passenger - 12 

(b) Cargo - 14 

(e) Emergency Response - 0 

URS/CH2M of Oak Ridge 

(a) Passenger - 166 

(b) Cargo - 52 

(c) Emergency Response - 0 

UT-Battelle 

(a) Passenger - 319 

(b) Cargo - 173 

(c) Emergency Response - 6 

Wackenhut Services. Inc. (DOE) 

(a) Passenger - 14 

(b) Cargo - 1 

(c) Emergency Response - 41 

Power Marketing Ad"ministrations 

Bonneville Power Administration 

Bonneville Power Administration 

(a) Passenger - 427 

(b) Cargo· 693 

(c) Emergency Response· 0 

Southeastern Power Administration 

Southeastern Power Administration 

(a) Passenger. 3 

(b) Cargo - 0 

(c) Emergency Response • 0 

17 

1-Vehicle 

26 - Vehicles 

218 - Vehicles 

498 - Vehicles 

56 - Vehicles 

1,120 - Vehicles 

3 - Vehicles 
142 


78727.093

Southwestern Power AdministrlltioQ 

Gore Maintenance 25 - Vehicles 

(a) Passenger - 4 

(b) Cargo - 21 

(c) Emergency Response - 0 

Jonesboro Maintenance 19 - Vehicles 

(a) Passenger - 3 

(b) Cargo - 16 

(c) Emergency Response - 0 

Springfield O&M Otlice 22 - Vehicles 

(a) Passenger - 4 

(b) Cargo - 18 

l c) Emergency Rcsponse - 0 

Springtield Operations II - Vehicles 

(a) Passenger - 10 

(b) Cargo - I 

(e) Emergency Response. 0 

Tulsa 10 - Vehicles 

(0) Passenger - 7 

(b) Cargo - 3 

(c) Emergency Response· 0 

Western Area Power AdministrAtion (W APA) 

WAI'A eso 8 - Vehicles 

(a) Passenger· 6 

(b) Cargo - 2 

(e) Emergency Response· 0 

\VAI'A Desen Southwest 129 - Vehicles 

(a) Passenger· 61 

(b) Cargo - 67 

(c) Emergency Response· I 

\vAJ>A Rocky Mountain Office 255 - Vehicles 

(a) Passenger - 89 

(b) Cargo - 166 

(c) Emergency Response - 0 

18 
143 


78727.094

W APA UPJlIlT Great Plains 

(a) Passenger. 60 

(b) Cargo. 187 

(e) Emergency Response. 0 

W APA Sierra Nevada Region 

(a) Passenger· 24 

(b) Cargo· 28 

(c) Emergency Response· 0 

WAPA Sierra Nevada· non·MSA 

(a) Passenger· 3 

(b) Cargo. 7 

(c) Emergency Response 

19 

247 - Vehicles 

52 - Vehicles 

10- Vehicles 
144 


78727.095

QUESTION FROM CONORESSMAN STEARNS 

Q4. During the bearing, when asked what actions, if Illy, DOE is taking to identify potential 

duplication or overlap across the nearly 100 renewable energy initiatives hosted at DOE 

in F'IICII Year2010-as noted by OAO- in its February 27, 2012 report "Renewable 

Energy: Federal Agencies Implement Hundreds of Initiatives" (GAO-l 2-260) - you 

responded "we take very seriously the recommendations from GAO." 

A4 •. 

a. Is DOE already taking steps to address this concem. or is DOE waiting for GAO to 

come out with further reports this Summer on duplication? 

The Depanmcnt of Energy continually plans, reviews and assesses its renewable energy 

initiatives to ensure that they are complementary and not duplicative. DOE managers ~gularly 

meet with colleagues from other Program Offices within the Department, as well as other 

Federal agencies, to maintain open lines of communication and ensure that related initiatives are 

closely aligned IIId coordinated. 

DOE's renewable energy initiatives noted in the GAO report are distributed across four offices 

within DOE - Energy Efficiency and Renewable Energy (SERE) , the Advanced Research 

Projects Agency - Energy (ARPA-E) , the Office of Electricity (OE), IIId the Office of Science 

(SC), using III integrated technology readiness level (TRL) approach. The TRL approach 

describes and directs the flow of our tec:bnoloay development portfolio from directed .researeh 

and innovation through the stages of product and process development necessary to bring 

technology to market. 

Coordinating and prioritizing these initiatives has enabled the Department to cost-effectively 

undertake multiple initiatives that together support DOE's mission of ensuring America's 

security and prosperity by addressing its energy, environmental, and nuclear challenges through 

transformative science and technology solutions. For example, DOE launched a new model of 

20 
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78727.096

cross-office R&D coordination with the SunShot Initiative. which hannonized the efforts of 

EERB, ARPA-E, and Office ofSciencc around a"single DOE-wide techno-economic goal: 

nuddng electricity from solar energy cost-competitive with other conventional SOUJCeS. In 20 II, 

the Department created four "integrated technology teams" modeled after the success of 

SunShot: Batteries for Transportation; Biofuels; Grid Technologies; and Carbon Capture, 

Utiliation, and Storage. These "tech teams" bring together program managers from different 

offices working in related technical areas. to develop cross-DOE techno-economic goals and 

coordinate R&D portfolios. 

21 
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78727.097

QUESTION FROM CONGRESSMAN STEARNS 

Q4. During the hearing, when asked what actions. if any. DOE is taking to identify potential 

duplication or overlap across the nearly 100 renewable energy initiatives hosted at DOE 

in Fiscal Year 2010 - as noted by OAO - in its February 27. 2012 report "Renewable 

Energy: Federal Agencies Implement HIIIIdmIs of Initiatives" (OAO-12-260) - you 

responded "we take very seriously the recommendations fiom GAO." . 

b. If DOE is taking actions, what is the envisioned timeframe for their completion? 

A4b. The Department of Energy engages in a continual process of review to assess its 

renewable energy initiatives to ensure that they are complementary and not duplicative. To this 

end, DOE managers regularly meet with colleagues fiom other Program Offices within the 

Department, as well as other Federal agencies, to maintain open lines of communications and 

ensure that related initiatives are closely aligned and coordinated. For example, DOE utilizes 

''integrated technology teams" to harmonize efforts across multiple offices. Created in 2011. 

these "tech teams" bring together program managers fiom different offices working in related 

technical areas, to develop cross-DOE techno-economic goals and coordinate R&D portfolios. 

22 
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78727.098

QUESTION FROM CONGRESSMAN STEARNS 

04. During the hearing, when asked what actions, if any, OOE is taking to identify potential 

duplication or overlap across the nearly 100 renewable energy initiatives hosted at OOE 

in Fiscal Year 2010 - as noted by GAO - in its February 27, 2012 report "Renewable 

Energy: Federal Agencies Implement Hundreds oflnitiativos" (GAO-12-260) - you 

responded "we take very seriously the JeCOmmendations from GAO." 

c. Are preliminary estimates available on the amount of savings to be obtained from 

reducing duplication across these initiatives? 

A4c. Though no preliminary estimates are available, OOE is committed to using tax-payer 

dollars in the most etrective and efficient way possible. In order to best support innovation and 

prosperity in the United States, the Department will continually work to address duplicative 

efforts and protect taxpayer investments. 

23 
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78727.099

QUESTION FROM REPRESENTATIVE STEARNS 

QS. According to the 0I0's November 2011 report, "Management Challenges at the 

Department of Energy," the National Nuclear Security Administration (NNSA) maintains 

a costly set of distinctly separate overhead and indirect cost operations that often 

duplicate existing DOE functions. These redundancies can complicate communications 

and program execution. What is DOE doing to eliminate these duplicative and redundant 

NNSA functions? 

AS. As the 10 pointed out in their report, the National Nuclear Security Administration 

(NNSA), as established under the National Defense Authorization Act of 2000 (as 

amended), is a semi-autonomous agency within the Department of Energy (DOE).We are 

working hard to find additional ways to reduce redundant costs and duplication of 

activities within the context of the fonnal alignment required by statute between the 

Department and NNSA. Examples of such efforts include: 

• DOEIHR and NNSAlHR collaboration on all HR policies and initiatives covering 

competitive service and excepted service pay, leave, drug testing. workers 

compensation and statTmg functions. NNSA participates in the development of 

Department HC directives and operating procedures. In addition, the two 

participate in Departmental workgroups and any new government-wide initiatives 

in the human capital arena. 

• NNSAIOC and DOEIOC are not redundant in view of the separate and distinct 

interests, missions, and concerns of the respective organizations supported by the 

Oeneral Counsels. NNSA General Counsel's Office is driven by the specific 

unique matters facing the National Security Complex .. The two offices of general 

24 
149 


78727.100

COUDBel work together colliboratlvely on Issues of mutual interest IIJId ~ 

resoun:es where that is cost efJ.'ective. 

25 
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78727.101

QUESTION FROM REPRESENTATIVE STEARNS 

Q6. According to the report, the DOE operates laboratories, mostly manasecl and operated by 

contractors, at an annual cost of over 510 billion. Support costs represent 35-40% of total 

laboratory operating costs, which may be unsustainable in the current budset 

environment. What effort is DOE taking to reduce administrative, overhead, and indirect 

costs at is laboratories? 

During the hearing Mr. Friedman suggested that it might be "time to rethink the nwnber 

of laboratories" or look into "consolidation" of the 16 resean:b centers. Is DOE 

examining this question, and if so can you share details of DOE's thoughts so far? 

A6. DOE, through the leadersbip ofits Office of Science (SC) and National Nuclear Security 

Administration (NNSA), has actively worked to reshape the relationship between 

national laboratories, sites and headquarters, including enacting a series of management 

refonns to improve operations and reduce costs: and maintain a safe, secure, ~ 

responsible security posture for our sites. Together, SC and NNSA participate in the 

National Laboratory Director's Council, which examines ways to eliminate obsolete 

requirements. SC, NNSA, and contractors are working together to have a better 

understanding of what is driving up costs at the laboratories and sites and what the 

contraCtors are doing to mitigate these costs to ensure that every possible dollar is 

available for mission work. 

For example, SC annually runs a strategic planning process for its laboratories to review 

the status and health of each of their assigned capabilities, to identifY capabilities that 

DOE no longer needs, and to ensure that the laboratories' plans for the future put them on 

the path for continued stewardship of the capabilities DOE does need in the future. The 

planning process includes input from and participation by all major customers at the 

laboratories, including the DOE applied enersY programs, SC, NNSA, and other fecleral 

agencies. In FYI2, DOE is expanding the SC process and including the three 

26 
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78727.102

laboratories under the purview of the DOE applied energy programs. In addition to the 

reviews of the laboratories' capabilities, DOE also uses the planning process to anticipate 

laboratories' infiastructure and other resource needs, what is requinld to keep them 

"mission-ready." and their costs of doing business. In several cases, DOE has found that 

the laboratories' effons to streamline support costs and to use strategic soureing, where 

appropriate, to leverage the buying power across mUltiple laboratories has led to 

reductions in their indirect costs. DOE is actively encouraging these and similar cost 

saving activities across the national laboratories to the benefit of the complex. 

In addition to corporate planning activities, at least once every five years, DOE and 

NNSA review and validate the continuing need and adherence to mission for each 

Federally Funded Research and Development Centers (FFRDC). These reviews are 

conducted in accordance with the requirements and criteria set in the Federal Acquisition 

Regulations (FAR) 35.017 and they encompass an assessment of the Department's needs 

and mission requirements performed bY the FFRDC, whether or not an FFRDC is still the 

appropriate vehicle for the Department to use to meet those needs, and the efficiency and 

cost-effectiveness of the FFRDC's operation. 

For NNSA, the Administrator has also created a policy entitled ''Transformational 

Governance and Oversight" which defines principles, responsibilities, processes and 

requirements to help in transforming and improving governance and oversight, and 

reducing contractor costs. 

27 
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78727.103

First, NNSA is in the final stages of a contract competition which consolidates the Y -12 

National Security Complex and the Pantcx Plant McltO, with an option for the Savannah 

River Site Tritium Operations, to achieve more efficient and effective operations while 

improving mission performance. As part of this consolidation process, NNSA 

benchmarked private industry and developed models for reduction based on industry 

standards. Overall consolidation analysis estimates potential savings to be approximately 

S89SM over a IO-year period, including reductions in administrative, overhead, and 

indirect costs. 

Second, due to the growing importance of achieving effiCiency across NNSA's nuclear 

weapons complex, NNSA created a new Associate Administrator position for 

Infrastructure and Operations with a primary focus on execution ofMcltO management 

and oversight. This office will integrate and align common business processes" 

increasing consistency in the implementation ofMcltO oversight activities, and will 

review whether certain current functions performed at individual site offices can be 

consolidated. These actions are expected to streamline key oversight activities and 

reduce the overhead burden on the McltO. 

NNSA continues to examine additional ways to consolidate functions, reduce costs, while 

executing mission effectively. For example, NNSA is working with its laboratories, such 

as Sandia National Laboratory, to implement a new hcalthcare plan that reduces longterm liability while producing a projected S3M in savings the first year. 

28 
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78727.104

QUESTION FROM REPRESENTATIVE STEARNS 

Q7. According to the report, the Department of Energy (DOE) spends $700 million for 

protective force staffed by contractol'S to secure its nuclear and defense-related facilities. 

The procurement of these services uses three arrangements which lack W1ifonnity and 

consistency and result in 25 separate contract instruments. What savings can DOE obtain 

by rcstr\lcturing the way it procures its protective force support? 

A 7. The savings DOE can obtain by restructuring the way it procures its protective force 

support will be largely determined by the manner in which the procurements arc 

restructured. All three security contracting models currently in place throughout DOE 

and NNSA (included within the management and operating [MolO) contract; separate 

prime contracts; and subcontracts) have, at times worked to provide acceptable security 

performance. However, as the Y-12 incursion on 28 July 2012 clearly demonstrated, 

some models may introduce more weaknesses than others. 

Although NNSA has not yet conducted detailed analysis or produced estimates of the 

savings Possible by restructuring its other protective force contracts, and cannot therefore 

quantitY them at this time, work in this area is ongoing and NNSA believes further 

effieieneies will be possible. While the ultimate goal is and remains the seeurily of these 

important facilities, achieving W1iformity and consistency, to the extent practical, in 

contract model and type is being pursued. NNSA will also continue to encourage 

consolidation where operationally feasible, consistent with larger mission priorities. 

29 
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78727.105

QUESTION FROM CONORESSMAN STEARNS 

QB. Concerning the Weatherization Assistance Program, 010 issued a Management Alert in 

2009. In 2010, the DOE 10 issued a further report noting that their "testing revealed 

substandard performance in weatherization workmanship, initial home assessments, and 

contractor billing. These problems were of such significance they put the integrity of the 

entire Program at risk. It 

a. Why did DOE take no actions earlier considering that the 10 kept warning DOE 

about the Program? 

ABa. The Department of Energy's (DOE) Weatherization Assistance Program (WAP) has helped 

more than one million low-income families nationwide using funds from the American Recovery 

and Reinvestment Act (ARRA) of 2009 as well as regularly appropriated DOE funds .. This 

figure far exceeds the original target of 600,000 homes under ARRA. These retrofits improve the 

enerRY efficiency oC their homes and help them save money on their energy bills. Families save 

between S2S0 and S4S0 per year depending on housing type, fuel source, and location as a result 

of the program. 

DOE takes a reported case of poor performance in WAP very seriously, but the cases ofpoor 

performance have been the exception rather than the rule. As part of DOE's ongoing qualitycontrol process, the Department has pro-actively sought to find and fix problems. Thai is why 

the Department has built in multiple levels of oversight into W AP-including local inspectors. 

the s'!Itcs. DOE project officers, technical assistance contractors. and the Inspector General. 

WAP administered funding Crom ARRA to weatherize low income homes. This. funding has been 

the subject of28 audits covering grantees representing 78% of the Recovery Act portfolio. 

These audits were conducted by the DOE Office of Inspector Oeneral (010) and the Government 

30 
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78727.106

AccoWltabiJity Office (GAO). Of the 28 audits, 17 are complete and II are ongoing. The 

majority of the completed audit reports (14 of 17) contained no significant findings. Of the 

remaining three reports, findings included evidence of substandard performance in workmanship, 

initial home assessments, contractor billing, financial management, and compliance wiih laws 

and regulations, Including Davis-Bacon and Historic Preservation issues. 

It is also important to note that as part of the DOE's guidelines, there are three types of issues 

. that are classified as impacting the quality of the services (I) Missed opportunities where 

additional services could have been installed but were not; (2) Instances where services were 

installed but should not have been; and ( 3) Poor quality installation of materials. Nationwide. 

only three percent of homes have had any of the three issues identified, including homes where 

more could have been done. 

Upon notification from the Inspector General ([G) of issues discovered during audits and 

reviews, DOE has always taken immediate action within the W AP. While not specifically 

mentioned in the question, it appears that Congressman Steams is referencing the DOE IG's 

"Muagement Alert on the Department's Monitoring of the WeatherizatioD AssIslance 

Program in the Slate of IIIlno .... issued in December 2009 and the IG Audit Report entitled 

"Slate orIlllno .. WeatherizatloD An ..... ce Program" issued in October 2010. 

The Management Alert issued in 2009 referred to the monitoring of local W AP operations by the 

state and the inspection process used by local agencies and state officials to determine if quality 

deficiencies exist after the work is complete. The Report also stated that the State must perform 

31 
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78727.107

its requin:d oversight on each local agency under contract and that DOE must complete its 

required monitoring of grantee activities as well. 

The Management Alert contained several findings and recommendations related to these issues. 

In all cases. the state WAP office and DOE concurred with the 10 findings as noted in the DOE 

Management Response to the Report. In addressing the oversight of the Community and 

Economic Development Association (CEDA) of Cook County, Illinois, DOE staff: 

• Stipulated that quarterly onsite monitoring including oversight activities to address these 

fmdings must occur. The first visit to Illinois occurred in November 2009 wheI) the draft 

Management Alert was issued. This visit addressed the quality issues and inspection 

requirements referred to in the Report and the actions to be taken by the State to mnedy 

the lapse in quality assurance. 

• Communicated monitoring and inspection requirements within six weeks of issuance of 

the Alert (on 111511 0) providing WAP Program Notices to all grantees specifically stating 

the oversight by the grantee of every subgrantee each year, and the inspection of at least 

five percent of each arant.s' completions. Grantees were required to acknowledge this 

requirement after receipt of the Notice via an email to their Project Officer. 

• Conducted a second site visit with the State of Illinois in April 2010 and reviewed the 

progress made by the State in implementing their monitoring procedures and tniclcing 

system. This visit also confirmed that special conditions were placed on CEDA for 

production and quality improvement The State assigned two inspectors to CEDA to 

32 
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78727.108

review 100% of production until all remedial actions wen: taken resarciins quality and 

accountability. 

• Conducted a third monitoring visit in Ausust 2010 as a follow-up to activity reports 

provided by the State to ensure progress was being made in W AP operations. CEDA 

failure rate was reduced from 55% to 25% and accountability had improved; however, 

special conditions remained in place and the State continued its inspection procedures. 

At the same time that DOE was monitoring the W AP activities for the State oflllinois and 

CEDA, the Department was making significant improvements in its operating procedures. For 

example, DOE: 

• Directed additional resources (22 DOE stall) to manage ARRA srants and implement the 

Department's Monitorins Plan. In addition DOE had the Institute for Building 

Tccbnoiosy and Safety (IBTS) conduct nearly 30,000 random quality assurance visits 

throushout the W AP network. 

• Ensured that all DOE Project Officers utilize DOE's existing tracking sYstem to record 

monitoring findings including monitoring the report checklists that Project Officers use in 

the field to track follow-up actions taken by grantees to resolve findings. 

• Provided regular review of grantees' trainins plans and performed on-seins trackinS of 

their plans durinS routine monitoring or desk auditing as an on-soing procedure of grants 

manasement. 

• Rel~ 12 Weatherization Prosram Notices in 2009 covering various aspects ofWAP 

operations including updated srant suidance; fund distribution; clarifying monitoring 

requirements; Davis-Bacon Prevailing Wage use and recordkeepins; the National W AP 

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Evaluation requirements; and many other topics. This was followed-up in 2010 with 19 

separate guidance documents to further clarify rules, regulations and policies governing 

Ibe W AP (see attachment entitled "Weatherization Program Notices and Guidance"). 

The second 10 report, concerning Ibe Weatheri7lltion Program in Ihe State ofillinois was issued 

October 2010 and provided a detailed audit oflhe Community Economic and Development 

Corporation of Cook County, Illinois (CEDA),lbe subgrantee for Chicago. The October 2010 

report revealed Ibat serious material deficiencies wilb Ihe work quality and accountability of 

resources still existed in Ibis subgrantee. In addition, CEDA railed to use proper management 

colllrols in conducting its oversight of contractor use and billing. The State inspectors continued 

to find work quality and accountability errors after Ibe homes were wealberizcd and reported as 

completions. 

In Ibe October report, Ibe 10 indicated lhat several actions were adopted by DOE and the State to 

resolve Ihe issues contained in Ihe Management Alert and that "these efforts are positive first 

steps." During Ihe ten monlhs between Ihe Management Alert and Ihe Audit Report, bolb Ibe 

State and CEDA did make progress and continue to improve operations. Unfortunately, Ihe steps 

taken by Ibe State and CEDA remained insufficient to address all oflhe issues referenced in Ihe 

October 2DID 10 audit 

In September 2012lbe DOE 10 began a criminal investigation involving CEDA lhat is ongoing. 

It is WAP's normal operating procedure to not intervene or conduct monitoring while such an 

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investigation is underway unless requested by the 10. The DOE W AP has not been requested to 

take any actions at this time. 

The State continues to monitor the situation and has monitors assigned specifically to CEDA. 

Approximately 15% of their production is reviewed by these staff-nearly three times the 

minimum requirement of DOE. The State also conducts random follow-up inspections ofwork 

that failed to be accepted during the initial review. 

The W AP Project Officer receives copies ofthcsc reports and reviews them for continuity and 

any follow-up activities required. Throughout 20 II, State staff conducted monitoring of field 

operations twice a month - reviewing production quality and file documentation. In 2012, the 

frequency was changed to monthly due to Improvements noted in monitoring findings. These 

reports are retained at the grantee's office and are reviewed when Project Officers conduct onsite visits. 

When the investigation Is cleared, DOE W AP staffwill resume its review ofCEDA. DOE 

performed monitoring of all WAP grantees at least twice a year throughout 2010 and 2011. 

These monitoring visits include a review of the grantees' programmatic and grants management 

activities related to their approved State Plan. Project Officers also visit select subgrantees to 

ensure that grantee monitoring is being performed and quality control inspections are conducted 

at a sufficient rate. 

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QUESTION FROM CONGRESSMAN STEARNS 

Q9. In its 2012 report, "Opportunities to Reduce Duplication. Overlap and Fragmentation, 

Achieve Savings, and Engance Revenue," (GA()'12-342SP), GAO notes that theM are 

fourteen srant and loan programs at DOE, Department of Tnmsportation (DOT), and the 

Environmental Protection Agency (EPA) that have the effect of reducing mobile source 

diesel emissions, and that "enhanced collaboration and performance measurement could 

improve these ftagmented and overlapping programs." 

a. What actions, if any, has DOE taken to identifY and then reduce ftagmentation and 

overlap across its programs aimed at reducing mobile source diesel emissions, 

including Clean Cities, Energy Efficiency and Conservation Block Grants, and the 

State Energy Program? 

A9a. DOE has implemented several mechanisms to improve coordination across programs. For 

example, Clean Cities provides technical staff to the Energy Efficiency and Conservation Block 

Grant (EECBG) Solution Center, enhancing collaboration IS well as leveraging resources and 

expertise. The programs are also planning joint webinars to inform EECBG stakeholders of 

information resources already available through Clean Cities and encourage coordination of 

etTorts at the local level. This is particularly important as many Clean Cities coalition 

coordinators are located in or have strong ties 10 State Energy Offices and other programs 

involved in the State Energy Program or EECBG projects. 

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QUESTION FROM CONGRESSMAN STEARNS 

Q9. In its 2012 report. "Opportunities to Reduce Duplication, Overlap and Fragmentation, 

Achieve Savings, and Enhance Revenue," (GAO.12·342SP), GAO notes that there lie 

fourteen grant and loan prosrams at DOE, Department ofTransporfation (DOT), and the 

Enviroiunental Protection Agency (EPA) that have the effect of reducing mobil~ soun:e 

diesel emissions, and that "enhanced collaboration and perfonnance measurement could 

improve these fragmented and overlapping programs." 

b. How bas DOE coordinated its efforts with DOT and EPA? 

A9b. DOE bas implemented a number ofmecbanisms to enhance coordination, leverage 

resources and expertise to the greatest extent possible, and eliminate the potential for overlapping 

or duplicative efforts. Examples of regular and ongoing coordination activity include the 

following: 

• DOE and DOT hold monthly coordination meetings focused on specific topics within 

areas of mutual interest, including diesel emission reduction efforts and projects such as 

Super Truck, as well as vehicle electrification, codes and standards, ligbtweigbting, and 

fileI economy regulations. 

• Both EPA and DOT participate in the 21" Century Truck Partnership, DOE's cooperative 

resean:b partnership with industry focused on advancing the development of fuel· 

efficient tecbnologies for heavy-duty vehicles. EPA and DOT also participate on various 

technical teams in the U.S. DRIVE Partnership, DOE's cooperative research partnership 

with industry focused on advanced technologies for Iight-duty vehicles. 

• Both EPA and DOT staff serve as technical expert reviewers at DOE's Vehicle 

Technologies Program Annual Merit Review - their participation not only leverages their 

technical expertise as independent merit reviewers but also ensures DOT and EPA staff 

Wlderstand DOE strategy as well as individual project efforts. Similarly, EPA and DOT 

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staffparticipates in DOE's annual Dim:tions in Energy-efticlcncy and Emissions 

Research (DEER) meeting, during which DOE-funded project leads share their progress 

on developing hlgh-cfficiency,low-emissions diesel and gasoline engines. 

• DOE participates in EPA's Mobile Source Technical Review Committee, which meets 

twice annually. 

• Through its Clean Cities initiative, DOE staff communicates with local community 

leaders on a monthly basis - they use this opportunity to emphasize the importance of 

working closely with EPA-supported Regional Diesel Collaboratives. 

In addition to regular coordination, DOE is collaborating with the agencies on specific projects. 

As an example, DOE and EPA have joined the Engine Manufacturers Association, California Air 

Resources Board, American Petroleum Institute, Coordinating Research Council, and a variety of 

after-treatment manufacturers to perfonn a multi-year study to characterize emissions and 

possible health impacts of now, advanced fuels and heavy-duty engine and control systems. 

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QUESTION FROM CONGRESSMAN STEARNS 

Q9. In its 2012 report, "Opportunities to Reduce Duplication. Overlap and Fragmentation, 

Achieve Savings. and Enhance Revenue," (GAO-12-342SP), GAO notes that there arc 

fourteen grant and loan programs at DOE, Department ofTransportatiori (DOT). and the 

Environmenlal Protection Agency (EPA) that have the effect ofrcclucing mobile source 

diesel emissions, and that "enhanced collaboration and perfonnance measurement could 

improve these ftagmented and over1apping programs." 

c. Are prclimimuy estimates available on the amount of savings to be obtained through 

such efforts? 

A9c. Though no prelimimuy estimates arc available, DOE is committed to using tax-payer 

dollars in the most effective and efficient way possible. In order to best support innovation and 

prosperity in the United States, the Department will continually work to address duplicative 

efforts and protect taxpayer investments. 

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QUESTION FROM REPRESENTATIVE BARTON 

Q 1. Please provide the Committee with the total amount DOE spent on travel in Fiscal Year 201 

A I. The DepaJ1mell! reported $59,752,994.79 on foreign and domestic travel for federal 

nployees in Fiscal Year 20 II. This does not include domestic or roreign travel costs for contractor lravel 

imburscd by DOE. The Department does not have syslems to track its tOlal federal and contactor 

nployecs' travel cost and is working on a data call so that it can submit complete information to the 

~mmineeas soon as possible. 

A recent DOE IG Manllgemcnl Alert (hup:llcncr2v.gov/ig/downloads/departmcnt-energvsanagemcm-forcign-travel) identified $59,430,495 in contractor foreign travel costs in FY 201 l. 

40