	Funding Increases Have Expanded or Created Programs with Varying Results

From fiscal years 2007 through 2012, DOE’s budget requests rose in  nominal terms from about $23.6 billion to $29.5 billion, and its  appropriations rose over that time from about $23.8 billion to $26.3 billion,  increasing to almost $33.9 billion in fiscal year 2009. DOE Programs Funded by the Recovery Act

Through the Recovery Act, Congress provided approximately $8 billion  for three existing DOE programs: (1) $0.4 billion in initial funding for the  Advanced Research Projects Agency-Energy to support advanced energy  research, (2) $2.5 billion for the Loan Guarantee Program to guarantee  loans for innovative energy projects, and (3) $5 billion for the  Weatherization Assistance Program to make energy efficiency  improvements to the homes of low-income families. In addition, under the Advanced Technology Vehicles  Manufacturing loan program, which received some Recovery Act funds,  DOE can provide up to $25 billion in loans for fuel-efficient vehicle  projects, but at the time of our review, it could not be assured that  projects would be delivered as agreed. According to ARPA-E’s budget director, as  of March 1, 2012, the program has awarded no more than the $521.7  million that, as we reported in January 2012, was provided to universities,  public and private companies, and national laboratories to fund 181  projects that attempt to make transformational advances to a variety of  energy technologies, including high-energy batteries and renewable fuels. ARPA-E is required by statute to achieve its goals through energy  technology projects that, among other things, accelerate transformational  technological advances in areas that industry by itself is not likely to  undertake because of technical and financial uncertainty. In January 2012, we reported that ARPA-E uses several selection criteria  in making awards, although its requirements for information on private  sector funding could be improved. DOE agreed with  our recommendations. However, we also reported that the program does  not have the consolidated data on application status needed to facilitate  efficient management and program oversight. In addition, the program  adhered to most of its established process for reviewing applications, but  we reported that its actual process differed from its established process at  least once on 11 of the 13 applications we reviewed. Weatherization Assistance Program

The Recovery Act appropriated $5 billion for the Weatherization  Assistance Program to help low-income families reduce their energy bills  by making long-term energy efficiency improvements to their homes. Advanced Technology Vehicles Manufacturing Loan Program

In December 2007, Congress enacted the Energy Independence and  Security Act of 2007, which mandates more stringent average fuel  economy standards for newly manufactured passenger vehicles sold in  the United States by model year 2020 and established in DOE the  Advanced Technology Vehicles Manufacturing (ATVM) loan program, to  provide loans for projects to produce more fuel-efficient passenger  vehicles and their components. Opportunities May Exist to Achieve Savings and Enhance Revenue

We have previously reported on several areas at DOE that may provide  opportunities for achieving increased savings and enhancing government  revenue. Areas that may provide opportunities for increased savings  include (1) contractor support costs and (2) potential overlap of effort  across certain activities for programs to reduce diesel emissions from  mobile sources. An area that may provide an opportunity for enhanced  government revenue concerns DOE’s uranium inventories, which are  worth potentially billions of dollars to commercial nuclear power plants  that can use the material as fuel in their reactors. Also in February 2012, in our annual  report on overlap and duplication of federal programs that may result in  inefficient use of taxpayer funds, we recommended that DOE assess  whether further opportunities could be taken to streamline support  functions, estimated to cost over $5 billion, at its contractor-managed  laboratories and other sites, including Office of Science sites, in light of  contractors’ historically fragmented approach to providing these  functions. DOE agreed with the recommendation. Table 6 shows funding, by program, for DOE activities to  reduce diesel emissions from mobile sources. In February 2012, we reported that federal grant and loan funding for  activities that reduce mobile source diesel emissions is fragmented  across 14 programs at DOE, the Department of Transportation (DOT),  and the Environmental Protection Agency (EPA). DOE agreed with our recommendation. Excess Uranium Inventories

Uranium is used in fuel for nuclear power plants.
Why GAO Did This Study

Understanding the impact of budget-related considerations has become particularly important as Congress and the administration seek to decrease the cost of government while improving its performance. In recent years, Congress has authorized large increases in funding for DOE. For example, the Recovery Act, which Congress enacted to, among other things, preserve and create jobs and promote economic recovery, provided DOE with more than $41.7 billion in areas such as energy efficiency, renewable energy, and environmental cleanup.
This testimony focuses on several key programs and related budget issues at DOE, including (1) the management of selected programs expanded or created by recent funding increases and (2) potential opportunities to achieve savings or enhance revenue. This testimony is based on prior GAO reports from February 2011 to March 2012, and updated with readily available data from DOE.

What GAO Found

Recent GAO work found that funding increases have expanded or created Department of Energy (DOE) programs with varying results. For example:
Advanced Research Projects Agency-Energy (ARPA-E) awards grants to projects that help develop high-risk energy technologies. Since fiscal year 2009 the program has received $855 million to fund energy projects that industry by itself was not likely to undertake. GAO found that ARPA-E uses several selection criteria in awarding funds, but its requirements for information on private funding could be improved.
The Loan Guarantee Program provides loan guarantees for innovative energy technologies. DOE has made about $15 billion in loan guarantees and is authorized to make up to $34 billion in additional loan guarantees. GAO found that the program does not have sufficient data to facilitate oversight, and its actual process for reviewing applications has differed from the established process.
The Weatherization Assistance Program helps low-income families reduce their energy bills by making long-term energy efficiency improvements to their homes. The American Recovery and Reinvestment Act of 2009 (Recovery Act) provided $5 billion to enhance the programs ability to make energy efficiency improvements to low-income family homes. GAO made recommendations to DOE to clarify the programs production targets (e.g., the number of homes weatherized) and guidance.
The Advanced Technology Vehicles Manufacturing Loan Program provides loans for projects to produce more fuel-efficient passenger vehicles and their components. DOE can make up to $25 billion in loans for fuel-efficient vehicles; at the time of GAOs review, DOE could not be assured that projects would be delivered as agreed.
GAO also reported that improvements at DOE may provide opportunities for increasing savings and enhancing revenue. For example:
Contractor support costs. DOEs management of contractors, who operate DOE sites and represent 90 percent of DOEs budget, has historically been decentralized, or fragmented. This adds to inefficiencies in support functions. Since 2007, DOE and contractors at some DOE sites have had efforts to streamline these functions. GAO recommended that DOE assess whether further opportunities could be taken to streamline such functions.
Diesel emissions. DOE, the Department of Transportation, and the Environmental Protection Agency receive federal funding to reduce diesel emissions from mobile sources14 programs in all, which also overlap on certain activities. DOE received $572 million for its 3 programs. GAO recommended that the three agencies establish a strategy for collaboration to reduce diesel emissions from mobile sources.
Excess uranium inventories. Uranium is used in fuel for nuclear power plants. GAO reported DOEs excess uranium inventories could be worth billions of dollars in additional revenue as fuel for commercial nuclear power plants.

What GAO Recommends

GAO is making no new recommendations in this testimony but continues to believe that implementing the recent recommendations made in the reports discussed should improve DOE program management, achieve savings, and enhance revenue. DOE has generally agreed with most of our recommendations, but disagreed on certain points related to the timing of implementing our recommendations.