in other interventions $2.1 million in increased costs were

avoided.

Although our litigation efforts are possibly the most visible means by which we provide legal support to the Department, other legal services which we provide may have an even greater impact over the longer term. For example, another area of legal work which this office is actively engaged in is the drafting of proposed legislation. such example was our work which resulted in the introduction of the Administration's proposed natural gas legislation entitled the "Natural Gas Consumer Regulatory Reform Act of 1983."

One

The legal counsel which this office provides also may affect the conduct of the Department's most critical program responsibilities. In the nuclear area, we have been active in the implementation of the Nuclear Waste Policy Act of 1982, as well as the amendments to the Atomic Energy Act of 1954 concerning the protection of the Department's nuclear sites and information. We assisted in efforts to enhance security at DOE's weapons facilities by working with the Department of Justice, the Federal Bureau of Investigation and the Department of Defense to develop a Memorandum of Understanding between those Departments governing the use of military support in an emergency and by working with the Federal Aviation Administration towards the adoption of appropriate airspace restrictions. The emergency preparedness activities of the Department also required our extensive support including our participation in the International Energy Agency's Fourth Allocation Systems Test and the development of regulations governing the utilization of the Strategic Petroleum Reserve.

In addition to our current activities, we will be

pursuing a number of additional initiatives. Such activities include: assisting in the adoption of the Department's final position on the issuance of both the January 1981 and the "clean-up" entitlements lists stemming from the Emergency Petroleum Allocation Act; settlement of a number of major enforcement cases arising during the period of crude oil and petroleum product price controls; and, the development of Guidelines for the Recommendation of Sites for Nuclear Waste Repositories which will be promulgated pursuant to the Nuclear Waste Policy Act.

By ensuring that the activities of the Department are conducted in a manner which fully comports with the law, while avoiding the imposition of unnecessary requirements and burdens, this office is able to make a significant contribution to our national energy policy which is to foster an adequate supply of energy at reasonable costs.

Our budget request for fiscal year 1985 is for $12 million. This will provide $10.6 million for 220 FTE's and the remaining $1.4 million will be utilized for this office's support funding. In addition to the 220 FTE's, an additional 4 FTE's, to be funded from the Nuclear Waste Fund, are being requested for this office. The fiscal year 1985 budget represents a 15 percent decrease from the $14.1 million fiscal year 1984 budget. The savings, which result primarily from a reduction in personnel levels, represents our commitment to achieve a more efficient utilization of resources.

With this budget we believe we can continue to provide

the high calibre legal services which this office has furnished to the Department since its formation.

SUMMARY OF REQUEST

MS. HESSE. These organizations include not only management and administration of the Secretary's office, the Technical Information Center, and the five nondefense operations offices, but also such support services as the General Counsel, the Inspector General, and three Assistant Secretaries-Congressional, Intergovernmental, and Public Affairs; Policy, Safety, and Environment; as well as International Affairs and Energy Emergencies.

Our total request for 1985 for all of these activities is about $433 million in direct costs. This amount is offset by almost $220 million worth of revenues as well as a $29 million deferral from previous years' unused funds, which brings the total to about $178 million. A third of this amount is for salaries and expenses, about a third is for direct support services, and the remaining third is for the cost of work for others. The overall program level for these activities in 1985 is essentially the same as it was in 1984. The personnel request is also about the same, a slight reduction of about 3 percent overall.

The only request that I would like to mention has to do with financial audits. Good business practice dictates that you have aggressive financial audits, and this year we are requesting through the IG an additional $5 million for financial audits of our various contractors.

With that I think I would be happy to answer any questions that you or anyone else might have.

MORALE WITHIN DOE

Senator JOHNSTON. Thank you very much, Ms. Hesse.

First of all, how is the morale in DOE now? I know for a while when there was talk about terminating DOE the morale was down pretty much. Is it back up now?

MS. HESSE. I think that morale has improved significantly since the Secretary came to the Department. The budget process has stabilized, the staffing level has stabilized, and I think that he has done a great deal to provide much higher morale and much happier people in the Department.

Senator JOHNSTON. I would guess that that would be so, because when Mr. Hodel came in I think there was a realization that the administration had crossed the Rubicon. On the question of whether we should have a Department of Energy, that is something I support and I am glad to hear that.

EVALUATION OF PROJECT DEMONSTRATIONS

Now second, Ms. Hesse, we have through the years spent a great deal on making demonstrations on solar energy. We have put in photovoltaic arrays, hot water systems, everywhere from the White House to the George Washington Parkway, we are doing it at Georgetown University and visitors' centers all over the world. I am wondering whether you have an inventory of those and whether there is any continuing evaluation of those projects.

MS. HESSE. Well, certainly, sir, the reduction of energy utilization in the Government is indeed a function of the Department of Energy, not only governmentwide but also in the Department itself, and I am certain that we do have an inventory of the activities that we have undertaken and I will be glad to submit that for the record.

Senator JOHNSTON. I am not talking about just what you have done. MS. HESSE. Governmentwide.

Senator JOHNSTON. Through the years an evaluation as to how it worked. That would be somewhat of a job to undertake, but I think it really ought to be done. I am not criticizing you for not having done it, nobody else has done it, but it really ought to be done.

Could you undertake that?

MS. HESSE. Yes, sir.

Senator JOHNSTON. Relatively modest cost and get me a copy of it. MS. HESSE. Yes, sir.

Senator JOHNSTON. I think it is something that we all ought to know about. We are not talking about small change when we look at what we are asked to spend on DOE solar programs, so we ought to find out what the performance has been in the past, how well have they worked, can we say how much energy they have produced. There have been problems with maintenance-what percentage of the day they worked. You know, all of those kinds of things ought to be looked at. MS. HESSE. Yes.

[The material requested follows:]

SOLAR AND RENEWABLE ENERGY DEMONSTRATIONS

Question. Over the years, the Department has funded a number of demonstration activities, especially in the solar and renewable energy programs. Is there an inventory of these activities and an evaluation of their performance? If so, please provide it. If not currently available, can it be undertaken? The performance evaluation should include data on maintenance, percent of time working, energy created/saved, et cetera.

Answer. The Department of Energy and its predecessor agencies have sponsored thousands of renewable energy demonstrations over the last 10 years. These projects individually include performance monitoring and evaluation requirements as a means to communicate lessons learned to all other interested parties. The DOE Technical Information Center (TIC) maintains an extensive inventory of performance data which has resulted from sponsored demonstrations. This information is available for extraction to manufacturers and the public and private research communities.

Initial renewable energy demonstrations were in the area of solar heating and cooling. Over 12,000 residential and 300 commercial projects were sponsored totaling $134 million over a 5-year period. Construction and operating experience gained and transferred from this activity has been instrumental in creating a solar heating and cooling industry with 1983 annual sales estimated at approximately $700 million.

In recent years, DOE demonstration activities have concentrated on proof-of-concept projects. These multimillion-dollar facilities include larger scale, more complex processes, and are usually conducted in cooperation with industry as to maximize technical information transfer. Again these demonstrations have built-in monitoring and evaluation components. Valuable technical and economic data gathered from those projects is being transferred by TIC and the Solar Energy Research Institute to the private sector for further study and analysis. Over the past several years, DOE has sponsored numerous workshops and conferences to provide knowledgeable and interested citizens with the results, including lessons learned, from these programs.

The fiscal year 1985 renewable energy budget request contains increased funding for

specific technology transfer activities. Enhanced activity in this area includes the communication of demonstration and other research results, in a timely and responsive manner, to renewable energy researchers, developers, and users.

MANAGEMENT INITIATIVES

Senator JOHNSTON. Your statement indicates the savings of $96 million by making management initiative. Do you think that this figure really is reasonable and was it in line with OMB's original suggestion?

MS. HESSE. Well, I do indeed think that the figure is reasonable. I think, in fact, that there are many other efficiencies that we can undertake, and we will undertake in the future, which will provide cost savings that will make these programs more efficiently managed but will not affect the program itself.

Senator JOHNSTON. I know, but are they realistic?

MS. HESSE. I think they are realistic.

Senator JOHNSTON. Do you?

MS. HESSE. Yes, I do.

Senator JOHNSTON. All right.

MS. HESSE. The original numbers, of course, were part of the Grace Commission report which I am certain you are familiar with, and also some savings are from Reform 88. The estimates of savings that were in the Grace Commission report were actually much higher than those which we are actually pursuing.

Senator JOHNSTON. I thank you very much, Ms. Hesse.
MS. HESSE. Thank you.

ADDITIONAL QUESTIONS FOR THE RECORD

Senator JOHNSTON. We appreciate your testimony today. There are some additional questions which I will submit for Senator Hatfield. [The questions and answers follow:]