The Residential Conservation Service

GAO conducted a review of the Department of Energy's (DOE) Residential Conservation Service (RCS) program to determine: (1) whether DOE has adequately administered the program and enforced its requirements; (2) the effect of recent budget and staffing reductions on the RCS program activities; (3) the current status and experience of state RCS programs; and (4) the potential effects of key changes contained in DOE-proposed revisions to the RCS program regulations and whether the changes are consistent with congressional intent.

GAO found that a wide diversity exists in the operational status of state programs and much uncertainty and confusion surrounds the program's future. Inadequate DOE program management has severly hampered progress in achieving the type of nationwide program envisioned by Congress. Revised DOE program regulations will probably not reduce program costs as expected, and they could adversely affect the program's effectiveness. As a result, nearly half of the states either do not have an RCS program or are not implementing the program consistent with existing regulations or approved state plans. Although the Senate rejected a proposal to prohibit all RCS funding this fiscal year, the Administration requested no RCS funding. GAO also found that, since local utilities are exercising a large degree of flexibility in carrying out the RCS program, states with ongoing RCS programs have had widely differing program experiences. Proposed revisions to RCS program regulations will not likely generate expected cost savings and may adversely affect the program. GAO concluded that DOE cost-saving expectations are overstated, even if adopted by the states. Over the past year, DOE has exhibited an unwillingness to carry out the program, expressing its view that there is no longer a need for the federal government to require the RCS program; a view consistent with Administration efforts to reduce the cost and burden of federal regulations.