Senator DOMENICI. Thank you very much, Mr. Secretary.

Senator Ford, do you have any questions?

Senator FORD. Yes, Mr. Chairman, I do. I appreciate your allowing me to go first. I have another meeting to go to which is difficult for all of us. I feel very strongly for you in your position, the way you are being pulled and tugged.

Ms. Fitzpatrick, let me ask you two or three questions, and I have two or three questions for Mr. Bauer. You end your testimony, the full one you submitted to the committee, by saying, and I quote, "This is a budget which I believe seriously recognizes today's fiscal responsibilities as well as tomorrow's needs."

DOE's budget request for the entire Department exceeds their actual fiscal year 1986 appropriation, yet your request for energy conservation is a 91-percent cut from last year's appropriation. Is this a fair share for energy conservation to carry in light of the overall increase in your budget?

Miss FITZPATRICK. Senator Ford, it is true that there is a 91-percent cut in the total appropriation.

Senator FORD. So my figure is correct?

Miss FITZPATRICK. If you include the State grant programs which total about $250 million. So the bulk of the cut has come because we have not asked for funds for State grant programs. The reason for not doing that is that the States have just received, and we knew they would be receiving, $2.1 billion from an Exxon oil overcharge case which they are required by court order to apply to those same programs. In light of that funding to the States from that other source, we judged that it was not advisable to seek an appropriation for those grants.

Senator FORD. What are you going to do with the people in the Department who have been working on these programs? Will they be RIF'd?

Miss FITZPATRICK. No, we have requested funding for the people for two reasons: First, because we have outstanding Federal appropriations which must still be administered. The grants that have been appropriated from 1985 and 1986 will still need administration. Also, we have been working hard with the States on helping them to make better use of the funds they have received either from Federal or other sources in achieving energy conservation.

Senator FORD. Are you going to monitor the States' expenditure of Exxon's oil overcharge money?

Miss FITZPATRICK. The court order requires that the States send us an annual report on how they are using those funds. Senator FORD. But you do not oversee anything?

Miss FITZPATRICK. Our ordinary monitoring process would be involved with the distribution of funds for the most part and also some detailed reports on it. So because the funds are going out through a different mechanism, we will not be engaged in that kind of monitoring.

Senator FORD. Will you be reporting to the court in any way?
Miss FITZPATRICK. Yes, I expect we will.

Senator FORD. Has the court ordered you to report to them? Miss FITZPATRICK. The court did not explicitly order us to report to them.

Senator FORD. Why are you reporting, then?

Miss FITZPATRICK. What we have said is that if we find that there is something amiss in the States' use of the funds, then we expect that we would bring that to the attention of the court.

Senator FORD. In your noticing from the Hollifield table that DOE requested $213 million at the Assistant Secretary level for energy conservation and received $39.4 million as a budget request, apparently OMB does not think much of energy conservation.

Miss FITZPATRICK. Senator, I think the $213 million is not correct.

Senator FORD. It is not?

Miss FITZPATRICK. No.

Senator FORD. It is in the table that the Secretary sent up here. Miss FITZPATRICK. I would have to look at those tables and see what is included in that figure, but I do not believe it is correct. I would like to provide for the record the accurate figures.

[The information follows:]

CONSERVATION BUDGET REQUEST

The $213 million figure refers to one of the levels that was considered in the Internal Review Budget process. The request that was actually provided to the Office of Management and Budget was $177 million for energy conservation programs. The Congressional Request was $39.4 million.

Senator FORD. How many people at OMB are on the energy conservation budget?

Miss FITZPATRICK. How many people does OMB have working on it?

Senator FORD. Yes; do you have any idea?

Miss FITZPATRICK. I think there are a couple of budget examiners and their supervisors.

Senator FORD. There is a lot of interest in this area at OMB.
Miss FITZPATRICK. I hear a lot from them, yes.

Senator FORD. Madam.

Miss FITZPATRICK. I hear a lot from them; yes.

Senator FORD. In a question and answer for the record last year you showed a list of countries and what they spent on R&D and industrial energy conservation. The list is in annualized American dollars at the exchange rate of January 1, 1985. The Federal Republic of Germany $10.2 million, France $12.4 million, Sweden $22.1 million, United Kingdom $28.1 million, United States $31.9 million.

Your answer for the record last year quoted a report which said, and I quote from your answer last year:

The search for high quality research and development was fueled by a growing recognition in all four countries that industrial energy conservation can increase industrial productivity.

Your budget request of $15.6 million, if adopted, would put the United States behind Sweden and the United Kingdom. Is that correct?

Miss FITZPATRICK. Yes; it would.

Senator FORD. Let us talk about deferrals. How much are you proposing to defer?

Miss FITZPATRICK. About $23 million from renewables and about $31 million from conservation.

Senator FORD. $57 million?

Miss FITZPATRICK. About $54 million.

Senator FORD. $54 million. How much of this was congressional add-ons?

Miss FITZPATRICK. Essentially all of it.

Senator FORD. All of it.

Miss FITZPATRICK. Yes.

Senator FORD. So whatever Congress wanted to do, you are going to defer?

Miss FITZPATRICK. The administration has had to make a decision about what is the most proper budget request, and we are remaining consistent in our recommendations of what should be done.

Senator FORD. Whatever Congress did shall go under, and whatever the administration has shall go on?

Miss FITZPATRICK. That is essentially our present position; yes, Senator.

Senator FORD. When do the deferrals go into effect?

Miss FITZPATRICK. They went into effect on our books when the President's budget request went up.

Senator FORD. Senator Wallop asked you a question, to respond to a depreciating assessment of the planning process in conservation and renewable energy programs at DOE. Criticism of the programs' management was leveled by former Under Secretary Pat Collins, and you responded to Senator Wallop-Wallop called Collins' assertions "pretty tough stuff," I quote from him, and asked you to respond to each of Collins' comments on conservation and renewable energy programs. Have you done that?

Miss FITZPATRICK. Yes, sir; I have.

Senator FORD. Is that available to the committee?

Miss FITZPATRICK. Yes, sir; I will most certainly make it available to you.

Senator FORD. Will you see that it is made available to us?
Miss FITZPATRICK. Yes, sir.

[The information follows:]

REVIEW OF "CONSERVATION AND RENEWABLE ENERGY, STATE AND LOCAL
ASSISTANCE PROGRAMS, TECHNOLOGY PROGRAMS"

A report by W. Patrick Collins, former Under Secretary of the Department of Energy, entitled "Conservation Renewable Energy, State and Local Assistance Programs, Technology Programs," has been submitted to the Secretary. The following is a review of that report and CE's response to it.

The report is a critique of the way in which the Government activities in conservation and renewable energy research and grant programs have been established and maintained. It reviews the roles of the Department of Energy (DOE), the Congress, scientists in the private sector, universities, and Government laboratories, research contractors, industry, special interest groups, and public information media. The recurring theme is that, in one technology after another, sufficient information to make rational funding and research decisions has been lacking, insufficiently disseminated, or overridden by local or special interests. The solution offered is to establish mechanisms for the open sharing of information among all interested parties, so that Federal budget decisions can be made responsibly in the best interests of the Nation and long range research and development plans can be based on the most reliable information and opinions.

The second major theme of the report is the lack of sufficient expertise in the Government to transfer the results of Government funded research to the public. The report proposes that the Government should use electronic and print media to inform the public of the status of the various technologies, their availability for use, and Government policy in developing energy technologies.

Observations regarding DOE's planning processes in conservation and renewable energy research are accurate to the extent that they reflect conditions in 1983, when Mr. Collins came to the Department. The Administration had been submitting budget requests which would essentially shut down much of the research in the Office of Conservation and Renewable Energy (CE) and eliminate the conservation grant programs. In such a situation, CE was not motivated to undertake long range planning. Congress never accepted the proposed budgets and instead wrote its own, amounting to approximately $700 million per year. Appropriations hearings were acrimonious and the Department was not effectively participating in determining its own budget.

Under the direction of former Secretary Donald Hodel, with Mr. Collins's support, CE began in 1983 to analyze the technologies in the CE research programs to determine their potentials for increasing the efficiency of energy use (conservation) or supplying energy in a variety of forms from domestically available non-fossil, non-nuclear