The American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ) was signed into law by President Obama on February 17, 2009. The stated purposes of the law include the following: 1. To preserve and create jobs and promote economic recovery. 2. To assist those most impacted by the recession. 3. To provide investments needed to increase economic efficiency by spurring technological advances in science and health. 4. To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits. 5. To stabilize state and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases. Several energy provisions in the law are designed to help address these purposes, including a number of appropriations provisions in Division A and several tax incentive provisions in Division B. For appropriation provisions with a specific energy funding figure, House and Senate action on H.R. 1 is included in addition to the final ARRA appropriation. For appropriation provisions that do not have a specific energy funding figure, only the final ARRA appropriation is reported. Division A of ARRA includes several energy appropriations provisions. Highlights of ARRA funding for selected departments and agencies is provided in Table 1 below. For each of the departments and agencies listed in Table 1 , more details about program authorizations and ARRA funding is provided under the section below entitled "Division A- Appropriations Provisions." Division B of ARRA includes several energy tax provisions. Highlights of ARRA funding for selected provisions is provided in Table 2 below. For each of the tax provisions listed in Table 2 , more details about the background and significance of the provision are provided under the section below entitled "Division B—Tax Provisions." Each of the energy program funding provisions described below includes a brief explanation and the enacted appropriation figure. Most of the energy efficiency and renewable energy spending initiatives in ARRA are contained under Title IV. The law specifies (§1603 of Division A) that unless otherwise provided in the act, all appropriations are to be obligated by the end of fiscal year 2010 (FY2010). Of the $4.24 billion that ARRA provides for DOD's Facilities Sustainment, Restoration, and Modernization (FSRM) account, ARRA directs that $3.69 billion be used "to invest in energy efficiency projects and to repair and modernize" DOD facilities. DOD accounts for approximately 63% of the energy consumed by federal buildings and other facilities. The department's activities occupy more than 316,000 buildings and an additional 182,000 structures on 536 military installations worldwide. DOD's annual spending on facility energy use stood at more than $3.4 billion in 2007. This makes DOD the single largest energy consumer in the nation, even though the agency consumption comprises only 1% of the national total for site-delivered energy. The FSRM account covers expenses associated with maintaining the physical plant at DOD posts, camps and stations. The conference report directs that FSRM funding is available only for facilities in the United States and its territories. ARRA provides $300 million for this program, encompassing $75 million each for Army, Air Force, Navy, and Defense-wide funding of research, development, test and evaluation projects, including pilot projects, demonstrations and energy-efficient manufacturing enhancements. The House-passed version of H.R. 1 recommended $350 million for "Energy Research and Development," including $87.5 million for each of the above-noted accounts. The Senate-passed version of H.R. 1 recommended $200 million for "Research, Development, Test, and Evaluation Defense-Wide, but made no specific mention of energy. The ARRA conference report specifies that "funds are for improvements in energy generation and efficiency, transmission, regulation, storage, and for use on military installations and within operational forces, to include research and development of energy from fuel cells, wind, solar, and other renewable energy sources to include biofuels and bioenergy." ARRA provides funding for several Department of Energy (DOE) offices and programs. Highlights of ARRA funding for selected DOE offices and programs are provided in Table 3 below. For each of the offices listed in Table 3 , more details about program authorizations and ARRA funding follows. ARRA provides $2.5 billion for applied research, development, demonstration and deployment activities at DOE's Office of Energy Efficiency and Renewable Energy (EERE). Of this total, $800 million is slated for biomass energy projects and $400 million for geothermal projects. The conference report ( H.Rept. 111-16 ) further directs that DOE use $50 million for R&D to increase the efficiency of information and communications technology and to improve standards. The House-passed version of H.R. 1 recommended an appropriation of $2.5 billion for these programs, while the Senate-passed version recommended $2.6 billion. Annual funding for EERE programs stood at about $1.72 billion in FY2008. For FY2009, the continuing resolution ( P.L. 110-329 ) provided for continued funding (through March 6, 2009) at the same level as FY2008. ARRA provides $3.2 billion for an Energy Efficiency and Conservation Block Grants (EECBGs) program. Of that total, $400 million is to be awarded on a competitive basis to grant applicants. The House-passed version of H.R. 1 recommended $4.2 billion for the program, while the Senate-passed version recommended $3.5 billion. The Energy Independence and Security Act (EISA, P.L. 110-140 ) established the program structure for the EECBG program. The goals of the program are to help reduce energy use and carbon emissions at the local and regional level. EISA set allocation percentages and listed the allowed purposes for the use of funds, which includes strategic planning, consultant services, and energy audits. Eligibility requirements include payment of prevailing wage rates, submission of a strategic plan, and sharing of information. The House-passed version of H.R. 1 recommended $3.5 billion for the program, while the Senate-passed version recommended $4.2 billion. ARRA provides $5.0 billion for the DOE Weatherization Program. The House-passed version of H.R. 1 recommended $6.2 billion for the program, while the Senate-passed version recommended $2.9 billion. The Weatherization Assistance Program enables low-income families to permanently reduce their energy bills by making their homes more energy efficient. DOE program guidelines specify that a variety of energy efficiency measures are eligible for support under the program. Such measures include insulation, space-heating equipment, energy-efficient windows, water heaters, and efficient air conditioners. For household income eligibility, ARRA (§407a) revises the guidelines to increase the eligibility cap from 150% to 200% of the poverty level. DOE employs a formula to allocate funding to each of the states and territories. Each state and territory, in turn, decides how to allocate its share of the funding to local governments and jurisdictions. DOE Weatherization Program funding stood at $227.2 million in FY2008. For FY2009, the continuing resolution ( P.L. 110-329 ) provides for continued funding (through March 6, 2009) at the same level as FY2008, plus a special one-time additional appropriation of $250.0 million. ARRA provides $3.1 billion for DOE's State Energy Program (SEP). However, as discussed below, allocation of nearly all of this funding appears to depend on whether or not states will implement new building codes and at least pursue adopting utility rate "decoupling." The House-passed version of H.R. 1 recommended $3.4 billion for SEP, while the Senate-passed version recommended $0.5 billion. SEP provides grants to states and directs funding to state energy offices from technology programs in DOE's Office of Energy Efficiency and Renewable Energy (EERE). The states design and carry out their own renewable energy and energy efficiency programs. SEP funding goes to state energy offices in all states and U.S. territories. SEP projects are managed by state energy offices, not by DOE. The decoupling problem involves efforts to encourage utilities to promote customer use of energy efficiency measures. An issue in promoting efficient use of electricity is that the profitability of electric utilities depends in large part on how much power they sell. Utility profits also increase with greater capital investment, such as in power plants. These utilities therefore have limited motivation to implement conservation programs that would slow or even reverse the growth of electricity demand. A solution to this problem is a regulatory approach called decoupling, under which utilities that meet energy conservation targets receive payments (funded by ratepayers) that compensate the utility for lost sales. The approach therefore decouples growth in sales from profitability. Decoupling has been implemented in varying forms in some states, probably most notably in California. Retail rate design, of which decoupling is a part, has historically been under exclusive state or local authority. ARRA follows this precedent by offering incentives, instead of creating mandates, for the implementation of decoupling by the states. Specifically, §410 of Division A authorizes DOE to make about $3.05 billion of energy efficiency and renewable energy funds available to states in excess of normal allocation methods if a state meets certain criteria. One criterion is that the governor of a state certifies in writing that the "applicable state regulatory authority will seek to implement " decoupling rules [emphasis added]; note that this is a guarantee of best efforts, not a guarantee that decoupling will be adopted.