Last week, the Senate Energy and Natural Resources Committee heard witnesses say that while 70 percent of the funds have been obligated, bureaucracy is stalling spending. Patricia Dalton, managing director of natural resources and environment at the Government Accountability Office, said spending had been most delayed by requirements associated with the 1931 Davis-Bacon Act and the 1969 National Environmental Policy Act. Davis-Bacon requires contractors and subcontractors to pay workers locally prevailing wages on construction projects, and the National Environmental Policy Act requires agencies to consider environmental consequences before approving projects.

For example, the Department of Energy’s Weatherization Assistance Program, which previously had been exempt from Davis-Bacon, became subject to the requirements under the Recovery Act. That meant the Department of Labor had to determine the prevailing wage rates for weatherization activities in each county in the nation.

To prevent this requirement from affecting program starts, Energy and Labor in 2009 issued a joint memo authorizing work under the program as long as recipients paid workers Labor’s prevailing wage rates for residential construction and agreed to compensate them for the difference later, if Labor established a higher rate for weatherization activities. However, many states refused to spend the money until Labor determined the county-by-county wage rates for weatherization activities.

“Many states did not proceed with awarding grants out of fear of future liability,” said Michele Nellenbach, director of the Natural Resources Committee for the National Governors Association. “States were concerned they would have to later divert funds from one project to retroactively pay workers on another project that were unintentionally paid less than the prevailing wage, or would have to take money away from workers who were paid more than the contractually mandated prevailing wage.”

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Start following her here: @lisapjackson

This is one way the EPA, and Jackson in particular, will work to be more open and transparent. The EPA has been progressing to meet all of OPM’s guidelines for the Open Government Directive. You can track EPA’s progress here: http://www.epa.gov/open/evaluate.html

About the administrator: “I am honored by the confidence and faith President Obama and the Senate have reposed in me to lead the EPA in confronting the environmental challenges currently before us. As administrator, I will ensure EPA’s efforts to address the environmental crises of today are rooted in three fundamental values: science-based policies and programs, adherence to the rule of law, and overwhelming transparency. By keeping faith with these values and unleashing innovative, forward-thinking approaches – we can further protect neighborhoods and communities throughout the country.”

– Administrator Lisa Jackson

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We had the chance to talk to her about the Recovery Act funds because the Department of Energy received around $40 billion to create more clean-energy jobs, as well as make the country less dependent on foreign oil. We learned how the Department of Energy has gone above and beyond OMB requirements, what forward-looking risk management means, and how Shafik manages an extremely large amount of information on a day-to-day basis.

ExecutiveGov: You’ve been working to translate OMB guidance and make sure the Recovery Act funds are being used appropriately. How has the Department of Energy gone above and beyond the OMB requirements?

Shafik: The OMB requirements were fairly comprehensive. They required risk plans for Recovery Act projects that were deemed medium and high risk projects. At the Department of Energy, because we wanted to have a special focus on the Recovery Act, we went above and beyond and required Recovery Act risk plans for some projects deemed slightly lower risk. We also conducted many site visits to state governments since so much of our Recovery Act funds actually went to the states.  Over the past summer, before any of the Recovery Act funds were executed, we went to several states including the sub-grantees and many of the agencies that were going to be recipients of the Recovery Act funds, to ensure that they had appropriate internal controls and risk management plans of their own before any of their funds were released.  We also wanted to assist the states in addressing any concerns so that Recovery Act funds could be spent appropriately and expeditiously once received.

ExecutiveGov: Transparency and accountability are a hot topic and the time has come for risk management. So, if other agencies were thinking of coming into this direction, what advice would you give to them and what steps could they take, or what are some lessons you’ve learned?

Shafik: One of the most important aspects of having an effective risk-management program is to have senior leadership support, where it is really embedded in the culture of the agency. I think in the business world and the private sector, risk management is a given, and in the federal government it is a newer phenomenon, especially on the financial side. Having very strong senior leadership support, that would be the No. 1 area that I would focus on. Secondly, I would also ensure that the staff has the appropriate skill sets. Risk management, even on the financial side, is very broad, and we interpret it to be much more than just looking at the numbers. We focus on what the numbers really telling us and what are some early indicators or early warning signs of financial risks. So the first is definitely leadership support and then second is having very strong, diverse skill set amongst the staff who perform this work.

ExecutiveGov: Can you tell us what forward-looking risk management means to you? How does this better the mission of the office?

Shafik: Our focus every day is to ensure that taxpayers’ dollars are being spent appropriately. So, again, we look for early indicators, so we analyze financial statements, external audit reports and we constantly seek various sources of information to try to predict what is coming next. What is really the risk? What are some hidden costs that are growing or escalating or very volatile that are not readily apparent to people who do not do financial analysis every day? Really, we try to be proactive in terms of giving the senior leadership in the department the information that they need, proactively before something becomes a crisis, trying to identify those areas of risk and mitigate them.

ExecutiveGov: What areas do you pay the most attention to in terms of risk management, or you predict will get the most attention, with this push for green energy and energy conservation?

Shafik: In terms of risk management, we obviously follow the money. In terms of the Recovery Act specifically, most of the funds went to exactly what you have here: energy conservation, energy efficiency, renewable energy and green energy. That is where the bulk of the Recovery Act dollars were and we have staff who are focused exclusively on those programs. In terms of what else we pay attention to, not related to Recovery Act, are things in the department such as costs that are escalating or that appear to be very volatile. We use the financial statements and we do variance analysis, to see anything that has increased significantly over the previous year. We also use a variety of other reports looking for any variance, significant variances, not just from the previous year, but over maybe a five-year period to look at trends. We do a lot of trending in this office and those are usually good indicators of issues that we need to watch out for. We also track regulatory changes that could have material impacts on the department.

ExecutiveGov: You were talking about reports of trending, so you look at so many different numbers and reports and audits, it must be an extremely large amount of information, so how do you go about handling all this information? What is the key to remain organized?

Shafik: Actually, that is a very good question because it is, you are absolutely right, it is a huge amount of information. We have literally hundreds, if not thousands, of audit reports that we look at constantly. In addition, we conduct our own reviews and we get information from the field sites, so that is actually one of our largest challenges: is how do we mine all that information to make sure that we are connecting all the dots appropriately? We have several different databases that collect each one of these pieces of information, but our challenge is that they are not linked; they are not connected yet. We are looking to see if we can find some technology to help us in that area, in terms of being able to consolidate that data and really conduct comprehensive searches. In the meantime, until we get such a solution, the key is constant communication. We sometimes have daily meetings with the staff where we just get together for a few minutes every day to touch base on what issues everyone is seeing, especially in related programs. We have a very open office structure and everyone is encouraged to be working in teams and keep each other informed of daily events because everything that we do is related.  It all really goes back to making sure that the tax payer dollars are spent appropriately, so it is very important that everyone is constantly aware of any issues as they come up in real time. I think simply good communication; we have a very strong team environment here and the importance of communication cannot be over emphasized.

ExecutiveGov: What drives your passion to work in the public sector? What gets you excited about coming to work every day?

Shafik: My passion to work in the public sector actually goes all the way back to college. I knew I had wanted to have a career in the government; I felt that that was a great place to really make a difference.  I have to say, when I started working for the government, it was not quite as cool as it is right now. Nonetheless, I started volunteering for the Internal Revenue Service when I was in college and as soon as I graduated went to work for the Resolution Trust Corporation. I am really very attracted to the idea of really being able to make a difference and I think with hard work and focus, there is no better place than the public sector to really have a big impact. Right now, specifically, being at the Department of Energy, it is a transformational time and it is a really unique time in our nation’s history. Especially right now, I cannot imagine being anywhere else other than the public sector and having an opportunity to really make an impact and make a difference. I think the point that you made earlier, about making sure that taxpayer dollars are used appropriately, that gets me really excited about coming to work every day. There are so many opportunities to really improve the financial management and implement good financial management practices in the government. Tax payers may not always realize that we are doing this, but it is a great feeling to know that we are able to make sure that tax-payer dollars are used as efficiently as possible. I find that very rewarding.

ExecutiveGov: When you get a second to breathe, what is your favorite pastime or hobby to do in your free time?

Shafik: My free time, the very little that I have, I love to read, I love to travel and go running.

ExecutiveGov: Is there anything else you wanted to add?

Shafik: In closing, I think risk management is absolutely a critical part of operations and really should not be seen as something that is an afterthought but really on the front-end of the planning. I feel fortunate to be in an environment that values risk management, and where it is becoming a part of the culture and way that the Department of Energy does business. I think that is the most effective way to use it, to really have it on the initial planning and that is the best way to ensure the tax-payer money is spent appropriately is to consider the risks and mitigate those upfront versus after the fact.

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The funds will go directly toward increasing energy efficiency, reducing harmful greenhouse gases, and saving consumers money. EPA Administrator Lisa Jackson said in an press release, “These communities see the overwhelming scientific evidence on climate change and are working with EPA to fight back.”

She added, “We’re working on innovative, win-win strategies that reduce greenhouse gases and cut energy bills for families and businesses – strategies that can be put in place to fight climate change in communities from Utah and Ohio to China and India.”

EPA will be monitoring each of the communities and tracking their process online with quarterly updates. The agency is hoping to award an additional $2.2 million in the coming months to different communities.

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The plan includes a detailed description of all of the biggest threats facing the area, as well as lays out the goals and actions for restoration.

According to an EPA press release, Lisa Jackson says, “We have an historic opportunity to restore and protect these waters. This action plan outlines our strategy to protect the environmental, human health, and economic interests of the millions of people who rely on the Great Lakes.”

President Obama has made the restoration of the Great Lakes a priority because it is a natural, as well as economic treasure. The Great Lakes provide drinking water for about 30 million Americans as well as help support an economy from the recreational activities, boating, and fishing.

The action plan has five focus areas, which include the following:

1) Protection and cleanup of the most polluted areas in the lakes

2) Combating invasive species

3) Protection of high priority watershed and reduced runoff from urban, suburban and, agricultural sources

4) Restoration of wetlands and other habitats

5) Implementation of accountability measures, learning initiatives, outreach and strategic partnerships

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The move by the GSA follows an executive order on sustainability, issued by President Obama in October 2009, calling on the federal government to “lead by example” in helping the nation’s infrastructure become greener.

“GSA continues to answer President Obama’s call to create a more sustainable government by becoming a leader in innovative, greener solutions and technologies for federal agencies,” said GSA Administrator Martha N. Johnson. “As part of Government-wide Policy, the Office of Federal High-Performance Green Buildings will broaden its reach to provide federal agencies with the necessary measurement tools and policies they need to meet their own sustainability mandates under the Executive Order.”

According to the GSA, the Office of Federal High-Performance Green Buildings sets policies and standards for building construction, operations, and maintenance across government. It was established by the Energy Independence and Security Act of 2007 to ensure all federal buildings meet sustainable design and energy-reduction targets mandated in the Act.

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The smart meter has been tested in parts of Virginia by the power provider with over 50,000 units installed in central parts of the state.  The firm now wants an additional 30,000 meters in Northern Virginia.

The power company is looking to ease concerns about the program with the expansion into the more populated area in suburban D.C.  The meters serve as a key part of the Smart Grid initiative and have other benefits – notably giving Dominion the ability to detect power outages from a remote location.

According to SmartMeters.com: “Kenneth Barker, Dominion Virginia Power’s vice president for customer solutions and energy conservation, said despite the expanded filed test, the utility’s commitment to the smart grid and automatic metering has not changed. ‘We know it works. We’re getting a significant energy reduction for our customers… We think it’s the best interest of everybody to demonstrate this a little longer.’”

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Energysaver.gov is a Department of Energy site devoted to ways in which American’s can reduce their energy impact. The site has information about designing and remodeling, heating and cooling, landscaping and appliances. They provide online energy audits as well other tools for the user.

The website is well designed, organized and functional, but still a government site. Why all the attention and popularity?

Rebates

The Department of Energy’s program Cash for Appliances gives incentive to replace older appliances for Energy Star appliances. As a part of the American Recovery and Reinvestment Act of 2009, the rebates are being funded with $300 million from the Federal government.

Each state has a separate program and all have been approved by the Department of Energy. The earliest programs start today, hence a majority of the online buzz about the programs.

More than 70% of the energy in homes is spent on appliances, refrigerators, heating, cooling and water heating. The DOE has recommended that states offer rebates on boilers, central air conditioners, washers and driers, freezers, water heaters and many other big purchase appliances.

Much like the Cash for Clunkers program, the Cash for Appliance program will last as long as there is money to support the program. Rebates can range from $50-$250 depending on product being purchased.

In addition to the rebate program, announcements have been made that according to a bill passed in 2007, the government does plan on phasing out the incandescent light bulb by 2012. The incandescent light bulb invented in the mid 1800’s revolutionized society, the work day and brought light to the world. The incandescent bulb uses high amount of energy driving up usage and bills across the world. Many European nations have had similar bans and the program looks to be a success in the U.S.

With the news of the Rebates and Lightbulb ban, energysaver.gov, a relatively small government site has risen to the top of searches across the internet.

To find information about your state, http://www.energysavers.gov/financial/70022.html

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“Now, I happen to believe that we should pass a comprehensive energy and climate bill,” said Obama.  “It will make clean energy the profitable kind of energy, and the decision by other nations to do this is already giving their businesses a leg up on developing clean energy jobs and technologies.”

During a session with a bipartisan group of governors, Obama presented three measures that will “work in concert to boost biofuels production and reduce our dangerous dependence on foreign oil.”  The Environmental Protection Agency (EPA) has created a rule to implement the long-term renewable fuels standard of 36 billion gallons by 2022 established by Congress.

The U.S. Department of Agriculture has proposed a rule on the Biomass Crop Assistance Program (BCAP) that would provide financing to increase the conversion of biomass to bioenergy.

“But even if you disagree on the threat posed by climate change, investing in clean energy jobs and businesses is still the right thing to do for our economy.  Reducing our dependence on foreign oil is still the right thing to do for our security.  We can’t afford to spin our wheels while the rest of the world speeds ahead.”

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While the Smart Grid concept has had some issues getting off the ground, the initial validation from higher education should come as moral victory for backers of the idea.

The major will come into existence this fall as part of the school’s power systems engineering technology program.

According to the school’s site, Larry Feist, chairman of the energy efficiency and renewable energy major, said “the Smart Grid major is designed to capitalize on both the short term demand for technicians to install new generations of electric and gas meters, and on the longer-range need for specialists who will be able to maintain the new systems and work on the distribution and transmission aspects of the electrical grid.”

The school says that students will also be required to take part in a sequence of courses devoted specifically to the smart grid, along with the instrumentation and control systems that they are likely to encounter upon becoming a professional.

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