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Austin Energy among poorest performers in Texas' stimulus program to fix up low-income homes

Photo of a compact flourescent light bulb by flickr user k-ideas
Wednesday, Sep 08, 2010, 04:56PM CST
By Mark Lisheron

The utility has been weatherizing homes for three decades and is called a model program. But Austin Energy has been fixing up homes at a snail's pace; officials say they're simply moving carefully.

Of all the local agencies set for a windfall from a $326 million federal stimulus program to weatherize homes in Texas, none seemed in a better position to use the money wisely and quickly than Austin Energy.

utility had run a program to make low-income homes more energy efficient for 30 years, a program considered a model in a city that has long prided itself on being a statewide leader and innovator in energy conservation. Officials for the state Department of Housing and Community Affairs in the spring of 2009 could only imagine what Austin Energy would do with an additional $5.9 million in federal stimulus money for the Weatherization Assistance Program.

Officials are still imagining.

Austin Energy is one of the poorest performing weatherization programs in Texas. There have been months of meetings to find ways to put more crews to work, officials say. Critics of the program with the Environmental Defense Fund office in Austin have volunteered a plan to find homeowners eligible for energy efficiency work.

Still, the program's methodical plodding has caused Housing and Community Affairs director Michael Gerber to threaten handing over a big chunk of Austin Energy's funding to some other agency prepared to spend it. 

"Is time running out for this program? Absolutely," Gerber said. "We will de-obligate funds before we let one penny of this funding go unspent."

After 18 monthsthe Austin Energy program which aims to help the poor by installing appliances, window screens, insulation and other energy-saving devices in their homes has so far weatherized just 56 homes. Only four of the 44 agencies in the state receiving federal weatherization money have done fewer homes through the end of August. By comparison, Corpus Christi, with a $3.2 million budget, has done 367 homes and Sheltering Arms Senior Services, a nonprofit in Houston, 2,190.

In a program that places a premium on pumping money back into the economy, Austin Energy has spent $243,755 of its $5.9 million, nearly $100,000 of it on administrative and program support costs. Only two agencies statewide have spent a smaller percentage. One of them, Travis County Health and Human Services, has spent less than $75,000 of its $4.6 million but has still manged to weatherize nearly twice as many homes as Austin Energy.

In its first monitoring report in mid-May, state housing inspectors reported nothing but a concern about a lack of work. Five homes had reportedly been weatherized, but contractors had so far turned in no paperwork to review. Inspectors reported expenditures at zero. As a result, Austin Energy has reported creating just 4.82 jobs through June, this number based not on actual people hired but on a formula averaging 40-hour work weeks, according to Housing and Community Affairs data.

The anemic numbers nettle Karl Rábago, an Austin Energy vice president who oversees the stimulus weatherization program, but for reasons that hint at why it has taken Austin Energy to get going. From the start, Austin Energy has approached weatherization as a social program, Ra'bago said. The goals are reducing the utility bills of customers and reducing the burden of power use on the utility grid.

From the start, the weatherization program sponsored by the American Recovery and Reinvestment Act was a spending program that was supposed to get money into the economy swiftly and put people to work. The program had the added benefit of helping low-income families live less expensively, Ra'bago said.

Karl RábagoRÁBAGO

Like all of the other local agencies Austin Energy suffered through months of delays trying to satisfy the requirements of the state and the Department of Energy, which was having its own problems ramping up to distribute $5 billion in weatherization money across the country. But when the money began to flow at the end of 2009 and Texas agencies began reporting their first work, Rábago said Austin Energy was at a particular disadvantage, having to get all of its approvals from a third entity, the city of Austin.

"We are the only utility doing weatherization in the state, and there is a reason why others are not doing it," Rábago said. "Utilities don't have the skill set for bureaucratic services delivery. If I were doing a political risk assessment on this weatherization, I'd be told, 'Don't do it. You'll regret it.'"

Because of what Gerber calls the culture of weatherization at Austin Energy, the utility has found it very difficult to go from spending $1,500 a housing unit under the old plan to having as much as $6,500 to spend on each unit. The federal government has very different expectations of future energy savings for the dollars spent on each house, Rábago said.

"We've suffered from trying to spend $6,500 a house. This is way beyond what has ever been done at Austin Energy," he said. "The system is set up for speed, volume and quick hits. Ours is set up to touch lives."

The very success of the utility's weatherization program in the past may have led to overconfidence at the start, Kate Robertson, an energy efficiency specialist with the Environmental Defense Fund's Texas regional office, said. Robertson, whose nonprofit work in Austin includes other projects with Austin Energy, said she and a team of unpaid community volunteers have developed a plan to go back and try to find low-income people missed by Austin Energy's first canvass.

"I was disheartened to hear how poorly they were doing," Robertson said. "Because they have done so much and their program is so respected this is an embarrassment to them."

Gerber said Austin Energy has been poorer than almost all of the other agencies at adapting to the realities of the state and federal regulations that came with the program. Administrators seem abnormally preoccupied with following the weatherizing rules to the letter and not making any mistakes on the paperwork required by both by Housing and Community Affairs and DOE.

"We've been concerned for a while now that they are not growing the program, balancing what they consider their risk with the scale they need to maintain and the dollars they need to spend," Gerber said.

Robertson said Austin Energy had developed over the many years of their own program software and training that had to be set aside and replaced with federal guidelines and training.
Past penetration into low-income areas of Austin made it harder to find homes that needed as much as the $6,500 federal limit on weatherization. Austin Energy's method of contact with those homeowners was to put fliers in the monthly paper bills its customers received, she said.

"It was pretty clear that when we looked at it, people had not gotten the message that this program was available to them," Robertson said. 

In spite of having received noncompliance letters from Gerber's department, threatening to take funds away if things don't shape up, Rábago is adamant that his crews won't do anything less than a complete job on each housing unit simply to get production numbers up -- but he has promised production will improve.

Austin Energy has agreed to have Robertson coordinate the training of about 20 students at Austin Community College and Huston Tillotson University to go door to door in likely neighborhoods to find eligible clients. Robertson said she believes Austin Energy can move forward without the state withdrawing any of its funding.

Oddly, for all their discouraging talk, both Gerber and Rábago insist that a rather large and slow moving ship can be turned in time to avoid the iceberg of transferring the money to other agencies in Texas.

"Right now I'm investing in how to get up and running and doing it right," Rábago said. "I don't believe the program is doomed to fail, and right now I'm not going to get into any rationalization for failure."

Contact Mark Lisheron at 512-299-2318 or

Photo of a compact flourescent light bulb by flickr user k-ideas, used via a Creative Commons license.

Read more about how the stimulus is playing out in Texas. Search STIMULUS at

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Paul T
Thursday, 09/09/2010 - 07:13AM

Thanks Mark, You know something is screwed up when a government entity is having trouble spending money. It would have been nice to have some of that weatherization done before the summer AC months.

Peggy Venable
Thursday, 09/09/2010 - 11:55AM

Thanks for pointing this out - Austin Energy is a municipally-owned monopoly and all customers are captive - we don't have opportunity to choose another provider. The free market works, and we should end the practice of allowing municipally-owned utilities to be monopolies. Currently, only the City can vote to allow competition - and what city council does that? (none) Set captive consumers free and open the market city-owned utilities and co-ops to competition like the rest of the state has!

Thursday, 09/09/2010 - 03:43PM

Give me the money. I can go around Houston, search out the poor, go door to door with CFLs, screw them in for the poor and save energy probably at less than 10% of the cost. Like always a company is abusing taxpayers money and giving top people money without results.

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