have less of a loss. You can address peak issues, you can address reliability issues.

The bottom line, I guess, with the time I have got, is that there is no one silver bullet to addressing these energy problems. We cannot say efficiency is going to do it. We cannot say supply is going to do it. We have to have a pretty broad approach, and if Americans are waiting for the magic technology that is going to solve all of our energy problems, then it is my observation that that technology does not exist. We are going to have to do a lot of relatively small things extremely well.

Senator BURNS. Well, I agree with you, and I have heard the chairman of this committee, Mr. Bingaman, say that very thing. It has to be a hand-in-glove situation, a cooperative situation, and especially, just to give you a case in Montana, we can really produce a lot of electricity because we have got the coal and we have got a very, very cheap way, low-cost way of producing electricity.

Now, I can get that to my farmers, but we are not the only State in agriculture. We have got Iowa and the bread basket of this great country that also are feeling the effects of this energy crunch at the agricultural production level, and I guess I worry about that as much as anybody does, because I still think the basic purpose of this country is the production of food and fiber for our people.

We cannot put that on the back burner, because I do not know what the first thing you do when you get up in the morning, but I know the second thing you do is, you eat, and you have got a lot of options, the first thing, but that second one you do not, and I worry about that, and the efficiency, and the way we can get food and fiber to our people.

And then an attitude, an attitude that we can do, so it has to be a mix. I agree with my chairman wholeheartedly, it has to be a mix. It cannot be just one single thing, production or efficiency. Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much. We have two additional panels with a total of eight witnesses, and with that in mind let me thank Secretary Garman very much for being here, and we will continue to talk with you and seek your advice as we move ahead. Thank you very much.

Mr. GARMAN. Thank you, Mr. Chairman.

The CHAIRMAN. Will the second panel please come forward. We have Ms. Mary Ann Manoogian, director of the Governor's Office of Energy and Community Services in New Hampshire, Ms. Joanne Choate, the LIHEAP manager for the State Housing Authority in Maine, Mr. Erik Emblem, the administrator with the National Energy Management Institute here in Virginia, and Mr. Mark Wagner, director of government relations with Johnson Controls.

Thank you all very much for being here. Why don't we go right across, starting on the left here and just go across, and each of you, we will include your full statement in the record as if read, but if you could summarize the main points that you wish to make to us, we would be anxious to hear those, and then we will have some questions.

Ms. Manoogian.

STATEMENT OF MARY ANN MANOOGIAN, DIRECTOR, GOVERNOR'S OFFICE OF ENERGY AND COMMUNITY SERVICES, CONCORD, NH

Ms. MANOOGIAN. Thank you, Mr. Chairman, members of the committee. My name is Mary Ann Manoogian. I am pleased to testify today on behalf of the National Association of State Energy Officials, known as NASEO. I serve as director of the Governor's Office of Energy and Community Services in New Hampshire, where my responsibilities include the oversight of the State Energy Program, known as SEP, the Low Income Weatherization Program, and the Low Income Home Energy Assistance Program, also referred to as LIHEAP.

As you know, NASEO represents 49 of the State energy offices, as well as the territories and the District of Columbia. NASEO's overall objective is to support balanced national energy policies, and to provide State perspectives on energy issues. NASEO members operate energy programs involving all sectors of the economy and all types of energy sources.

As you move forward in addressing our Nation's energy policy needs, we are pleased to provide input on a nonpartisan basis to both the Senate and the House, as well as the administration, and my written testimony elaborates further on NASEO's support of S. 352, the Energy Emergency Response Act of 2001. I would like to, however, highlight the importance for NASEO of the programs we support with respect to the increased authorization for the State energy program to $75 million, the base LIHEAP grant to $3.4 billion a year, and the weatherization program to $310 million per

year.

This would be a 4-year authorization, which is a more efficient way for the States to be able to operate these federally funded programs. The State Energy Program, the Weatherization and LIHEAP programs are all deserving of bipartisan support and generally we have received such support in the past.

Recently, I understand S. 352 was added to the Senate-passed bankruptcy reform bill. Provisions similar to S. 352 are included in Senator Murkowski's comprehensive bill, and I understand that if the committee were to begin the final drafting process for S. 352 by starting with provisions common to both Mr. Murkowski's bill and S. 352, that S. 352 would be included in its entirety, and that is a measure that we would support.

As you may know already, SEP activities touch on every sector of the economy. The State energy offices work with residential consumers, the small business sector, manufacturing, industry, agricultural interests, our public schools and hospitals, and nonprofit entities, et cetera. SEP has documented the ability to leverage at least $4 in private sector funds for every Federal dollar that is spent, and that does not even include the State contribution.

Unlike other energy programs funded by the U.S. Department of Energy, SEP is tailored to acknowledge State-by-State and regional differences, including diverse priorities and, in fact, in my written testimony I have been able to provide you with some examples of SEP activities going on in various States throughout the country, and I would encourage you to review that if possible.

I would, however, like to highlight a program that was initiated by NASEO and included Louisiana, Alaska, New Mexico, Oklahoma, Colorado, Wyoming, and Montana, and the project was to increase the energy efficiency of marginal oil wells.

I have provided a copy of NASEO's publication entitled Dashboard Guide to Energy Efficiency in the Oilfield to the committee. Ironically, many scoffed when NASEO began to work on this project, questioning why energy producers would want energy efficiency. Our efforts revealed that the highest cost of energy production is in removing it from the ground, higher than the associated equipment costs, and labor cost. A producer with marginal wells needs every little bit of savings he or she can put their hands on.

As a result of implementation of the recommendations contained in NASEO's guide, a marginal well can expect to cut its lifting or production cost by $1 per barrel with little or no investment of additional funds.

I would also like to call to your attention the value of the weatherization program, which is vital to addressing the disproportionate energy burdens that low-income citizens face. In addition to the meaningful energy conservation measures that help reduce energy bills, the program also addresses important health and safety measures of many families and vulnerable elderly and disabled persons.

The weatherization program has been an essential long-term program that complements the critical short-term assistance provided by the LIHEAP program. One of the reasons that the program has been so effective is due to the fact that the delivery network responsible for implementing the cost-saving weatherization measures are highly skilled. In addition, weatherization program energy auditors play a key role in helping low income households respond to our present energy crisis while addressing their long-term needs as well.

So the issue of the weatherization program is not in producing meaningful results. It has already been proven through a report with Oak Ridge National Laboratory. The issue is that the program does not have sufficient funding to meet the demands of our most vulnerable residents.

For instance, in my State of New Hampshire, using both DOE funds and available LIHEAP funds last year, out of the approximately 7,493 New Hampshire fuel assistance recipients who requested weatherization of services, New Hampshire was able to complete 526 weatherization jobs, only 7 percent of the requests. Low income households know the value of energy conservation. They just do not have the means to get there. The weatherization provides the support to help them reduce their energy bills.

NASEO strongly supports the authorization provided in Chairman Bingaman's bill and Senator Murkowski's bill. What I would like to say also is that if we are serious about dealing with our energy problems, substantial increased funding for weatherization would enable our States to plan for energy emergencies and, when possible, take preemptive action to avoid an energy crisis by promoting energy efficiencies.

NASEO urges the committee to move forward not only on the authorized funding levels but also to support a funding level at least

equal to the House-passed Interior Appropriations bill during conference, and although I have restricted my testimony to the State energy and weatherization programs, I would be rather remiss, as someone who is responsible for the oversight of the LIHEAP program in our State as well, to not underscore the importance and value of that program.

This past year, our State had an 18-percent increase from the number of households served by LIHEAP, and at a funding level that is currently being discussed. What we know is that my office will have a harsh reality of having to deny assistance to more than 11,000 elderly, disabled, and working poor households in the upcoming winter season. What I can tell you is that as I am sitting here spewing these figures and numbers out to you, I also have the benefit, as being the director of a State agency, of telling you the value of these programs that have been implemented, and I am reminded of a story of the woman who is an employee at a wellknown department chain and she never expected to be needing LIHEAP assistance.

This past year she was one of the 3,848 requests that we received for emergency assistance, meaning she was in a dangerous situation of being with no heat, or low heat situation, and being out of heat in the middle of winter in New Hampshire is a serious issue. Had it not been for the LIHEAP program, she would not have made it through the winter months with her disability, and be able to support and keep her disabled son warm in her home. She was trying to do the best she could. She tried to do whatever she could do to provide for her son, and she was working full-time. It just was not enough to pay for the heating costs.

Thank you. I appreciate your support, and we look forward to working with the committee.

[The prepared statement of Ms. Manoogian follows:]

PREPARED STATEMENT OF MARY ANN MANOOGIAN, DIRECTOR, GOVERNOR'S OFFICE OF ENERGY AND COMMUNITY SERVICES, CONCORD, NH

Mr. Chairman, members of the Committee, my name is Mary Ann Manoogian, and I am pleased to testify today on behalf of the National Association of State Energy Officials (NASEO). I will be discussing our views on S. 352, introduced on February 15, 2001, and supported by a wide range of Senators. I serve as Director of the Governor's Office of Energy and Community Services in New Hampshire, where I am responsible for the oversight of the State Energy Program, the Low-Income Weatherization Program and the Low-Income Home Energy Assistance Program (LIHEAP).

NASEO represents forty-nine of the state energy offices, as well as the territories and the District of Columbia. NASEO's overall objective is to support balanced national energy policies and to provide state perspectives on energy issues. NASEO members operate energy programs involving all sectors of the economy and all types of energy resources. The state energy officials are also generally our Governors' energy policy advisors, frequently called upon to advise our Governors and legislators on policy, programmatic, regulatory and legislative options to address our energy situation. As you move forward in addressing our Nation's energy policy needs, we are pleased to provide input on a non-partisan basis to both the Senate and the House, as well as the Administration.

S. 352, the Energy Emergency Response Act of 2001, would increase authorizations for: 1) the State Energy Program (SEP) to $75 million; 2) base LIHEAP to $3.4 billion per year; and 3) the Weatherization Program to $310 million. This would be a four-year authorization, which is a more efficient way to operate these federally funded programs. The bill would also encourage expanded use of energy efficiency and renewable energy measures in federal buildings, permit expanded use of energy savings performance contracts in federal buildings, eliminate the "sunset" provision

for energy savings performance contracts and expand federal energy efficiency performance contracts to include water efficiency. In light of the current energy needs of the country, these provisions provide a common sense approach to the challenges before us. These programs save money, save energy, and in many instances reduce air pollution, combat climate change and leverage enormous amounts of non-federal investment for meaningful projects that actually help people.

The State Energy Program, Weatherization and LIHEAP are all deserving of bipartisan support, and have generally received such support in the past. Recently, S. 352 was added to the Senate-passed bankruptcy reform bill. Provisions similar to S. 352 are included in Senator Murkowski's comprehensive bill (Sections 601, 603-604). I understand that if the Committee were to begin the final drafting process for S. 352 by starting with provisions common to both Mr. Murkowski's bill and S. 352; S. 352 would be included in its entirety.

Our experience has taught us that, the State Energy Program, Weatherization, and LIHEAP are critical components of a balanced national energy policy. These programs are both under-valued and under-funded. We applaud you for initiating a comprehensive look at energy programs and policy. We are also encouraged by the Administration's decision to conduct a complete review of the energy efficiency and renewable energy program of the U.S. Department of Energy. Assistant Secretary Garman is to be commended for his work in conducting these reviews. If the analysis is intended to focus on measures of success: energy saved, money saved, leverage of other resources, new technologies deployed, research and development stimulated, SEP would be a huge winner. It offers a balanced approach that recognizes the value of efficiency improvements and encourages development of both supply-side and demand-side resources is responsible and necessary.

STATE ENERGY PROGRAM

SEP is the major state-federal partnership program in the energy area. While it makes up a small portion of overall funding for state energy activities, it is a critical nucleus for many of the states. For example, SEP funds are used to prepare for and respond to energy emergencies and supply disruptions. State energy offices have used these funds to help states effectively respond to these challenges, ranging from western electricity problems to Midwestern natural gas and gasoline price spikes, historically low inventory levels and multiple other problems across the country over the last few driving and heating seasons.

SEP activities touch on every sector of the economy. The state energy offices work with low-income Americans, the small business sector, manufacturing industry, agricultural interests, our public schools and hospitals, non-profit entities, and so on. SEP has documented a leverage of at least $4 in private sector funds for every federal dollar, not even including the state contribution. Unlike other energy programs funded by the U.S. Department of Energy, SEP is tailored to acknowledge state-bystate and regional differences; including diverse priorities.

Examples of innovative projects, funded in part by SEP, include the following: New Mexico-Assisted the community of Los Alamos in its rebuilding efforts after the Cerro Grande fire. Provided technical assistance and information at several forums to enhance awareness of the benefits of using renewable resources and applying energy efficiency measures in new construction. Sponsored a two-day workshop, "Passive Solar Design Strategies and the Energy-10 Program," October 2000, at the Los Alamos branch of the University of New Mexico (UNM).

Hawaii-The Hawaii energy office operates one of the most comprehensive energy emergency programs in the nation. The threat of typhoons and tsunamis pose a great risk to its citizens. Consequently, the energy office is constantly updating their energy emergency planning and conducting simulations that involve federal, state, and private sector representatives from the 5 big islands and even from the mainland. Hawaii's expertise in the area of energy emergency planning is recognized nationwide and, consequently, members of the state's energy office staff have made numerous presentations and even assisted in writing other state energy emergency plans.

North Dakota-The North Dakota State Buildings Energy Conservation Program provides grant funding to state institutions and agencies for the installation and implementation of energy efficiency measures. Energy audits are required to identify potential energy conservation measures, respective costs, energy savings and payback periods.

Awards have been made to many of the state-supported colleges and universities to match federal energy conservation funds. In addition, grants have gone to projects at the Capitol complex, the State Penitentiary, Department of Transportation buildings, and many others.