The failure of a stimulus weatherization program in Tennessee, one of the nation’s leaders in federally-funded home energy improvement, could serve as a warning to laggard programs like many in Texas.

Rather than lose what remains of a $3.6 million contract because the Chattanooga Department of Human Services could not meet federal performance standards, the city turned the weatherization program over to a nonprofit corporation, Chattanooga Neighborhood Enterprise, the Chattanooga Times Free Press is reporting.

“The state was about to pull the plug on our weatherization program, and I managed to convince them that if we switched it over to Chattanooga Neighborhood Enterprise we could do better,” Chattanooga Mayor Ron Littlefield told the newspaper. “It was really a pretty easy call because we either talked the state into switching the money over to CNE or we lost the money.”

The problems in Chattanooga were particularly glaring in Tennessee, which is a leader, nationally, in the percentage of a homes they have done so far with the $99 million the state received through the U.S. Department of Energy’s $5 billion Weatherization Assistance Program.

Texas has so far spent $40.2 million or just 12.3 percent of its $326 million. State and federal officials have expressed concerns about losing millions in federal weatherization funds because of low performance standards like those in Chattanooga. In May, the state Department of Housing and Community Affairs, which oversees state weatherization, suspended a program in Abilene for habitual administrative problems and began looking for another local group to assume the contract.

However, top Housing and Community Affairs officials here remain confident Texas subrecipients will meet  their August 2011 federal deadlines.