Equally important, given that 52 jobs are created for every million federal dollars invested, the FY 1996 cuts will lead to the unemployment of over 5,660 skilled workers. This will further erode the technical base built by DOE over the past decade by resulting in the closure of 400 local agencies and employers. Beginning April 1, Ohio is reducing its program by 37% and will serve over 4,000 fewer families than last year. In anticipation of funding cuts, local agencies began to eliminate personnel through attrition last fall, and new layoffs have begun. We estimate a future loss of 240 to 300 skilled workers statewide by the end of April. Yesterday, I learned that one agency, rather than reduce staff and loose the capacity to provide services in its Appalachian counties, will eliminate family health coverage for its employees to cut costs.

The Weatherization Program creates new market opportunities. In Ohio, the weatherization program, called the Home Weatherization Assistance Program (HWAP), has always been an integral part of the residential strategies that we, the State Energy Office, employ to bring solid cost effective energy efficiency technology into the marketplace. But the marketplace today is not geared toward providing objective information to consumers about how to select energy efficiency services that will result in capturing the true benefits that we know are possible.

To address this reality, in 1992 the Office of Energy Efficiency, embarked upon an initiative which resulted in the establishment of what is know as the Home Energy Ratings of Ohio (HERO) Foundation. The HERO Foundation has conducted market research that tells us that Ohioans want to be empowered to improve the environment for future generations and will do so if given the opportunity. HERO, in cooperation with the Franklin County Weatherization Program entered into a joint venture with the Columbia Gas and the 5th/3rd bank to market residential energy efficiency and health and safety services. Special financing is available to consumers to increase the comfort, safety and efficiency of their homes while contributing to the improvement of the environment. This, in turn, allows the Weatherization Program to generate new private sources of funds for their low-income clients.

The Weatherization Program leverages other funds. Funding from this committee to the Weatherization program is the core through which other funding for low-income residential weatherization flows. Historically, states have been successful in identifying additional sources of funds for weatherization but many of these sources are also facing funding reductions. The Low Income Home Energy Assistance Program (LIHEAP) which in 1995 provided an additional $139 million was cut almost 30% in FY 1996. Until this year, the Ohio HWAP was blessed with an annual supplement for weatherization services by the transfer of 15% of its HEAP. That changed this year because of the serious threat of significant reductions in HEAP federal funds. The administration decided that it may have to choose between long term relief for vulnerable Ohioans, and the possibility of someone freezing to death in the winter. The decision this year was to maintain HWAP's supplement from HEAP. However, it was at considerable cost to the fuel assistance benefits available to Ohioans this winter, and there is no guarantee that the transfer will continue.

Other sources of leveraged funds are also declining. The petroleum violation escrow funds (PVE) which are almost depleted, provided $198 million in 1989, but only $24 million in 1995.

Page 3 - TESTIMONY, March 7, 1996: Sara Ward, Ohio, for NASCSP

Demand-Side Management (DSM) and other Public Service Commission ordered funds are also facing challenges as the electric utility industry is restructured.

The utility industry is going through the significant change from regulation to competition. One of the many significant policy issues that Ohio and other states are facing is who will pay for the stranded investments and stranded benefits in an environment of competition. Another is who has the obligation to provide safe reliable service in a competitive environment. How will this affect vulnerable Ohioans? The impacts of restructuring are already being felt.

The States have been aggressive in seeking other sources of funds for this program. But without the core that the federal dollars provide, it will be impossible for the program to garner the extra support that will maintain the Weatherization program. For example, during the 1995 federal fiscal year the local HWAP network in Ohio leveraged a reported $6,633,641.46 to supplement the program within their local communities. Support comes from a number of sources including state and federal housing programs, local governments, landlords, charities such as the Red Cross and the United Way, churches, and private individuals. However, over 80% of these leveraged resources came from the utility industry. We are already experiencing reductions in support from the utilities since recovery mechanisms are in a state of uncertainty for the industry and the companies are more concerned with positioning themselves for the onset of competition. In 1994 we reported almost $1 million more in leveraged resources statewide than in 1995. Further utility investments are not likely to occur to the degree previously enjoyed until the mechanisms for paying for these services are worked out within each State. This process could take a number of years to work out, even in States that are ahead of the restructuring game.

This committee has the opportunity to avert considerable harm to the weatherization program and to a great many low-income Americans. The window of opportunity is still open to restore vital funds to this program in 1996 and in 1997.

During the years 1991 through 1995, the Weatherization Assistance Program has been at its most productive level in its history. This is due in part to the stable funding that this committee supported for the program. Stability in federal support for the weatherization program has never been more important to vulnerable senior citizens and American families than it is today. The partnership with the federal government has measurable payoffs every day that services are provided. But beginning with April 1, 1996, because of funding cuts, the weatherization program will no longer have the capacity to provide year-round services nationwide. This committee has the authority to ensure that services are provided nationwide year-round and that the skilled workforce which comprises the stable infrastructure of the program remains intact in FY 1996 and 1997. We respectfully request that you exercise that authority.

Page 4 TESTIMONY, March 7, 1996: Sara Ward, Ohio, for NASCSP

There are 693,526 households in Ohio below 125% of the poverty guidelines.

Of the almost 700,000 households:

✡87,273 more households spend between 15 and 20%,

*62,862 spend from 20 - 25%, and

POTENTIAL IMPACTS OF FEDERAL FISCAL YEAR '96

PROPOSED BUDGET ON

OHIO'S HOME WEATHERIZATION

ASSISTANCE PROGRAM

OA 37% reduction in funding for the LIHEAP program equals a 37% loss of $3,243,082 to Ohio's HWAP, which receives 15% of the state's total LIHEAP allocation. This is due to the supplemental summer crisis funds that were made available late last summer.

OFor PY'96, HWAP services will be significantly reduced so that approximately 3,464 fewer households will receive services.

OThe overall funding reduction is anticipated to be approximately 35% as demonstrated below:

OAt this lower funding level there will be six of the thirty-nine grantees at or below $150,000. Without other sources of funding services may not be available year round.

Olt is doubtful that all current HWAP grantees will have the ability to plan for 12 months of service delivery for the PY'96 HWAP which begins April 1, 1996.

*Estimated because the DOE share is still not final. This amount represents 50% of the 1995 allocation.

2/21/96

THURSDAY, MARCH 7, 1996.

DOE

WITNESS

JAMES C. CORMAN, GENERAL MANAGER, POWER GENERATION SYSTEMS, GENERAL ELECTRIC POWER SYSTEMS

Mr. REGULA. Welcome, Mr. Bevill. General Electric Power Systems, Mr. Corman. Thank you for coming.

Mr. CORMAN. Mr. Chairman, thank you for inviting me.

My name is James Corman. I'm general manager of Power Generation Systems for the power systems business of the General Electric Company. I'm here today to testify in support of DOE's advanced turbine systems program. GE has been a participant in this program since its initiation when this subcommittee appropriated funds in 1992.

My message is very straightforward. It is a very well-run program. DOE has conducted very competitive assessments at each stage of the program in order to get the industry's support for the program. They have requested us to integrate that with our product development strategy. We have done that. We have done that very effectively in the General Electric Company. We have made it a part of our product development strategy, and we are committed to the program. My message is very straightforward. We are requesting the Federal Government to honor their commitment the same as we're prepared to honor our commitment.

We are now in the third phase of this program which is the detail design phase of the advance gas turbine which will service this market. We've started out in the program with a goal of increasing the efficiency of natural gas use for electricity to 60 percent. This is a very stretch goal for us. The current machines run at about 55 percent efficiency. Those machines are being accepted worldwide today at the 55 percent level. Sixty percent will increase

Mr. REGULA. So, you're saying that there's quite an export market for the technology?

Mr. CORMAN. Absolutely. Right now, as we view the program initially, when we started it as an internal GE program, we viewed it primarily as an export market. We viewed the export market as being the fastest growing market which is a 50 hertz market. So, we started our program on that 50 hertz base. The DOE/ATS program has allowed us to bring along in parallel the 60 hertz product which would service the domestic market. So when that market comes along we'll be prepared to address that market as well. We've gotten through the design phase, the preliminary design phase as part of the DOE program. We're now in the detail design phase, and we're ready to start commissioning the demonstration plant which is really the key to this technology. In order to get anything accepted by both the international and the domestic market place, you have to demonstrate, validate the technology at a full size. We're involved right now with three utilities which are committed under the ATS program to demonstrate this technologyMr. REGULA. When do you think you can go commercial?

Mr. CORMAN. We're committed to go commercial by 1999. Both internationally and domestically. The key to that, however is run