Beginning in 1996, the federal Energy Department began competitions for state activities in selected areas. Since that first competition, the Energy Office has garnered a total of $1.39 million: $370,000 for three 1996 projects - Climate Wise, Rebuild Nebraska and Energy Guard; $355,510 for two 1997 projects - Rebuild Nebraska and Building Codes; $550,000 for three 1998 projects - financing incentives for new home construction, Rebuild Otoe County and Home Energy Rating System; and $157,300 for three projects in 1999 - training for the installation of geothermal heat pumps in Nebraska schools, operating several Omaha buses on a 15 percent ethanol/80 percent diesel blended fuel and hiring staff to make energy saving improvements in Army National Guard buildings.

Some of the special projects are multi-year and complement one another.

The specific activities for each project are summarized in this section.

• Building Codes. This 1997 grant of $255,500 created a non-traditional financing approach to encourage Nebraskans to construct energy efficient buildings above the minimum requirements of the Model Energy Code.
  
  During the reporting period, the agency exceeded its plans of conducting code compliance reviews of 500 housing units by an additional 325 - a 65 percent increase beyond the planned activities. An additional 110 affordable housing units in 10 rehabilitation projects were also reviewed for compliance. The agency also provided technical assistance to state Department of Economic Development grant recipients building or remodeling 532 affordable housing units. The agency was also successful in integrating the Model Energy Code standards in buildings constructed and remodeled using funds from the state's Department of Economic Development and the Nebraska Investment Finance Authority under the technical assistance review process.
  
  By the end of the reporting period, the agency had spent $83,559 of the original grant funds.
  
  Energy Office staff worked with the University of Nebraska-Lincoln's College of Architecture to provide training on model energy codes and renewable energy technologies for state agency personnel. This activity was in response to a gubernatorial executive order requiring the use of these codes and technologies in facilities used by the state.
  
  Near the end of the reporting period, the Legislature adopted a bill requiring all state buildings and newly constructed facilities financed with state funds to comply with the 1998 International Energy Conservation Code after January 2000.
  
• Climate Wise. Climate Wise is a national effort to help manufacturers willing to voluntarily make energy efficiency and pollution prevention improvements. In total, the agency received two multi-year grants totaling $100,000 for the effort, of which $50,000 preceded the Special Projects competition. By June 1999, the agency had recruited 26 voluntary Climate Wise partners.
  
  During the reporting period, the agency continued to provide services to partners, including reviewing action plans and providing financial counseling; solicited additional partners from the state's manufacturers; co-sponsored several workshops on steam boilers, utilizing wood waste, lighting efficiency; and offered 2.5 percent interest loans for pollution reduction projects.
  
  By the end of the reporting period, the agency had expended the final $50,000 of the grant received under the Special Projects competition and this multi-year effort was completed.
  
• Energy Guard. This $70,000 grant was for a two-year effort to assist the Nebraska Military Department identify energy saving and renewable energy options in their buildings and operations. The Military Department selected 44 buildings for energy assessments. Utility bills on the buildings were gathered and on-site inspections by staff, student interns and two private contractors were conducted. Reports on each building analyzing energy use and recommending cost-effective improvements were completed. During this reporting period, the Energy Office concluded this project, turning the findings over to the state's Military Department.
  
• Federal Energy Management Program/Nebraska Army National Guard. This new grant, totaling $64,5000 was funded July 1, 1999. Under the project, a resource energy manager will be hired by the Guard so that energy saving improvements identified in the Energy Guard undertaking (see description above) can be made in federal and state military buildings.
  
• Financing Incentives for New Home Construction. This $400,000 grant was received in April 1998 and continued the work begun under a 1997 federal grant for building codes work. As conceived, the grant funds would leverage an additional $400,000 in private funds from lenders to finance an estimated 750 new affordable homes constructed to exceed the 1995 Model Energy Code by 30 percent. Once the original loans are repaid, these grant funds will become available to finance additional new homes.
  
  During 1998-1999, the agency continued to promote the use of these incentives to a variety of groups involved in housing construction including the Department of Economic Development, Nebraska Investment Finance Authority, U.S. Department of Agriculture Rural Development and U.S. Department of Housing and Urban Development.
  
• Geothermal Heat Pump Training. This new grant, selected in the spring of 1999 for funding, will team three of the state's electric utilities - Nebraska Public Power District, Omaha Public Power District and Lincoln Electric System - along with Central Community College and Energy Office staff to provide information to school officials, architects and engineers and provide training for well drillers and installers of geothermal heat pump systems.
  
  Nebraska is a national leader in the installation of geothermal heat pumps. According to the agency's utility partners, an estimated 30 heat pump systems have been installed in schools across the state.
  
  This one year grant effort totals $50,000.
  
• Home Energy Rating System. This $50,000 grant enables the Energy Office to create a Home Energy Rating System in Nebraska. A home energy rating system is a measurement of a house's energy efficiency. A homeowner can also use the ratings to pinpoint the most cost-effective energy saving improvements.
  
  During the first year of this effort, the Energy Office selected a system for use in the state and developed rater conduct codes and a certification process. The state energy rating system was accredited by the national organization. In addition to publicizing this new  measurement tool, the agency recruited potential home energy raters. Thirty-seven individuals attended rater training workshops, the first step to becoming a home energy rater in Nebraska. The agency and Fannie Mae co-sponsored a seminar for lenders and others on home energy rating systems and energy efficient mortgages.
  
  To date, $13, 810 has been spent from this $50,000 federal grant. Work will continue during 1999-2000.
  
• Omaha Clean Cities Coalition Oxy-Diesel Project. This new 1999 effort will fuel ten Metro Area Transit Authority buses with a 15 percent ethanol/80 percent diesel blend/5 percent diesel additive for one year to test the ability of the fuel blend to reduce pollution at a cost of $42,800. The special diesel additive makes the ethanol/diesel blend usable with modifications to the bus engines.
  
• Rebuild Nebraska. This multi-year effort was financed with two grants totaling $350,000. Under Rebuild Nebraska, the agency helps voluntary multiple-family housing and commercial business partners to increase energy efficiency and reduce energy costs in existing buildings. The agency offers partners free assessments of energy use in their buildings and access to low-interest financing for making improvements.
  
  

  "There is a good chance the cost of any energy efficiency improvements made will be recovered in as little as two or three years - and sometimes even less." Gaila Gilliland Wayne Chamber of Commerce Wayne Herald , July 30, 1998

  Throughout the reporting period, agency staff - complemented by university student interns and utility and local economic development personnel - recruited commercial, utility and housing partners. They performed assessments of energy use in buildings, compiled lists of potential cost-effective improvements and provided information on how the improvements could be financed.
  
  One of the key barriers to making energy efficiency improvements can be access to affordable financing. Under Rebuild Nebraska, the agency attempts to eliminate this barrier where possible by extending access to low-interest Dollar and Energy Saving Loans for larger commercial ventures. The agency also provides a customer-specific listing of financing options available to each partner. An outgrowth of the gathering of the financial options process was the publication, revision and reprinting of 40 Ways to Finance Your Improvements, a compilation of federal, state and local financing options. The financing handbook was featured at a national Rebuild America conference and is considered a national model for providing financing options for building improvements. During the reporting period, the handbook was revised, reprinted and distributed throughout the state. Rebuild partners are identified in figure 2.
  
  One unique aspect of Rebuild Nebraska is its utility partnerships, such as the partnerships with Nebraska Public Power District and NMPP Energy. The District has become a key player in the recruitment of new partners and conducting energy audits in Wayne, Geneva and Fillmore Counties. Similar Rebuild activities were provided in Alliance by NMPP Energy.
  
  At the end of the reporting period, the agency had secured 161 Rebuild Partners in the state. One hundred and twelve audits covering 414 buildings totaling nearly 4.1 million square feet were completed by June 30, 1999. By June 1999, all of the grant funds from the 1996 Rebuild award were spent. The second grant will be completed by June 30, 2000.
  

• Rebuild Otoe County. This $100,000 grant was received in April 1998. It provided the impetus for a localized effort to show owners of historically significant commercial and multi-family buildings ways to make these homes and businesses more energy efficient without destroying the architectural integrity of the vintage buildings.
  
  

  "We hope to return many of the region's oldest buildings to productive use at an affordable cost without compromising their historic integrity, thus avoid losing them to the wrecking ball." Nancy Hoch, President of River Country Economic Development Corporation, July 17, 1998

  This project is spearheaded by River Country Economic Development Corporation and several local, regional and state partners - Nebraska Municipal Power Pool, Nebraska State Historical Society-Preservation Office, Nebraska City Utilities, Berggren and Woll Architects and Joslyn Castle Institute for Sustainable Development. Once a building owner joins the voluntary effort, staff from the Municipal Power Pool performs an energy audit of the building. Then the owner is presented with the recommendations and funding options for making the improvements that have been identified during the examination of the building. During the reporting period a local coordinator was hired.

  "Rebuild Otoe County...is the notion that these wonderful buildings can be renovated to be energy efficient with a little help from the state and federal government." "Through the Looking Glass," Nebraska City News Press February 19,1999

  By the end of the reporting period, 16 buildings with 206,000 square feet in Otoe County had become Rebuild partners. Two of the buildings were on the Historic Register, two were eligible for the Register and 13 of the buildings were more than 50 years old.
  
  Rebuild Otoe County was entered in the 1999 Nebraska Community Improvement Project competition. The project won first place in the Class V Environmental Projects and Awareness category of the competition.
  
  Of the $100,000 grant, $26,008 had been spent by June 1999.

Oil Overcharge Funds

 

Since 1982, Nebraska has received oil overcharge funds (sometimes referred to as Petroleum Violation Escrow Funds) as a result of various court actions against oil companies that overcharged their customers during the period of federal price controls from 1973 to 1981. Since direct compensation to injured consumers seemed unrealistic, the courts ordered the money recovered from lawsuits be distributed to the states to fund programs that provide indirect restitution to injured energy consumers. States were directed to use the money, within parameters established by the courts and federal regulators, to fund energy assistance and efficiency programs.

The agency manages projects financed by oil overcharge funds through three program divisions - Energy Projects, Financing and Weatherization.

The Nebraska Energy Settlement Fund

The Nebraska Energy Settlement Fund was established by the Legislature for money paid to Nebraska from overcharge cases. Since 1986, Nebraska has received $44.88 million, including interest: $23.99 million in Exxon funds, $20.31 million in Stripper Well funds and $.58 million in Diamond Shamrock funds (see figures 1 and 3 for specifics on how the funds have been used).

Oil Overcharge Projects From Previous Years

Activity this year for each oil overcharge project financed by the Nebraska Energy Settlement Fund, reviewed by the Legislature and approved by the U.S. Department of Energy is described on this page and those that follow in this section.

Dollar and Energy Saving Loans

Exxon funds totaling $13.71 million plus $8.35 million in Stripper Well, $.18 million in Amoco, $.01 million in Coline, $.08 million in National Helium and $.17 million in Vickers funds (amounts include interest earnings) have capitalized the Dollar and Energy Saving Loan Program, which provides low-interest loans to Nebraskans to finance home, building, transportation and system improvements. More than 320 participating lenders provide six percent interest rate financing for up to fifteen years on loans for energy saving improvements.

Some energy-saving improvements require an energy audit before a borrower may secure financing. These improvements may be financed for up to five, ten or fifteen years depending on the type of improvement, its cost and the amount of energy saved. Loans for energy audits are available directly from the Energy Office at no interest.

Applicants may obtain appropriate forms from the Energy Office, participating lenders, utilities or equipment dealers. After obtaining bids, applicants then submit loan forms to participating lenders at one of more than 600 sites across the state. Once a lender approves the loan application, a commitment agreement is submitted to the Energy Office for review. On final approval from the agency, the lender notifies the applicant to proceed with the energy improvement.

1998-1999 Highlights

By mid-1999, the Energy Office had financed more than 15,500 Dollar and Energy Saving projects (see figure 5). The loans first became available in mid-1990. During the reporting period, the agency surpassed two milestones of note:

• $100 million in loans issued and
• 15,000 projects financed.

Since the loan program began more than eight years ago, 15,565 projects totaling $107,859,000 have been financed. More than $47.05 million in oil overcharge funds (including interest and loan payments) have leveraged in excess of $50.58 million from the state's private lenders. These projects also leveraged an additional $12.2 million spent on non-energy related improvements to the properties. Loans have financed projects in all of the state's 93 counties. Each year about 1,700 loans are available for financing new projects worth in excess of $10 million. The average amount of a loan is $6,483. For reporting and other purposes, the agency "categorizes" loans into one of 11 types. The summary of the major categories follows: 

Residential Improvements. Nearly 92 percent of all the energy efficiency projects financed are made in the homes of Nebraskans. Slightly less than 70 percent of all loan funds have financed typical home improvements such as replacing or installing furnaces, air conditioners and heat pumps, replacing windows and doors and insulating walls and ceilings. Typically these improvements have a lifetime of 20 years and longer and will continue to pay benefits in the form of lower energy bills for the homeowners for decades to come. By mid 1999, the Energy Office and lenders had teamed to finance 14,289 projects totaling $73 million. An additional $4.2 million worth of improvements were made on these projects.

Small Business Improvements. More than 9.6 percent of the low interest financing - $10.4 million - has been used to make improvements in 667 buildings and systems in small businesses in the state. About one-third of the financing has been used to replace furnaces and air conditioners. Much like home energy-saving projects, insulation and replacement doors and windows are high on the list of typical improvements made by business owners.

Mortgage Loans. The Energy Office began financing new home construction in 1996. To date, the agency and lenders have financed 105 new homes that surpass the 1995 Model Energy Code by up to 30 percent. In financing these projects, the agency offers inducements in the form of interest rate reductions - from 1/4 to 1 percent - to encourage future homeowners and their builders to construct very, very energy efficient homes. The maximum mortgage amount is $250,000. The Energy Office and lenders have financed $13.2 million in new home construction, and the lenders and homeowners have financed an additional $2.6 million on the same 105 projects. Currently, 12.2 percent of all loan funds have been used for new home mortgages. The weatherization mortgages, described in greater detail on page 10, are also included in this loan category.

Agricultural Improvements. Coming in a close fourth in use of these funds, are loans for agricultural equipment and systems. More than 6.6 percent of all loan funds have financed typical agricultural projects such as low-pressure irrigation systems, replacing irrigation pumps and motors, making well modifications and replacing grain dryers. Since 1990, the Energy Office and lenders have issued 422 loans totaling nearly $7.1 million for agricultural projects. On average, agricultural loans exceed $16,000.

Other Types of Improvements. The other categories of loans - local governments, state buildings, rural nursing homes, Climate Wise, Rebuild Nebraska, telecommunications and alternate fuels - collectively account for about 3.8 percent of all loan funds.

Impacts. A 1997 evaluation of the impact of Dollar and Energy Saving Loans found the projects have created the equivalent of 1,416 jobs between 1990 and 1996, primarily among heating and cooling contractors and remodeling industries all across the state. Savings earned by Nebraskans who used the loans to finance improvements in their homes came in two ways: savings from reductions in energy use and savings from lowered financing costs. Between 1990 and 1997, the dollars saved by Nebraskans from reduced energy use total $16.9 million and the savings from the reduced financing costs total $15.86 million.

Number of Loans. As illustrated in figure 4, the number of loans issued each year can vary markedly. Many factors - demand, availability of funds, addition of new funds, speed of loan repayments and limitations within some categories - can significantly affect loan volume in any given period. The precipitous decline from 1990 to 1993 was, in great part, due to the large initial demand for loans depleting the loan pool. As repayments have replenished the loan pool, the number of loans made increased from that low point, rebounding to more than 2,000 in 1994-1995.

Low-Income Weatherization Assistance Program

A total of $7.87 million in oil overcharge funds ($4.02 million from Exxon and $3.85 million from Stripper Well) have been allocated to the Low-Income Weatherization Assistance Program to assist Nebraskans with residential weatherization to reduce energy use and costs. In 1998-1999, $139,124 in Stripper Well funds were spent through the program.

The terms of the Stripper Well court order mandate that an equitable share of the funds be set aside for the state's low-income population. To date, $2,591,869 in Stripper Well funds have been spent.

For more detailed information about the Low-Income Weatherization Assistance Program, see pages 9 and 10.

Native American Tribal Governments

The Stripper Well court order requires the state to provide an equitable share of oil overcharge funds to Native American tribal governments. Based on the number of Native Americans in the state, $77,000 have been set aside for eligible projects suggested by the tribal governments. No projects were undertaken in 1998-1999. A total of $8,528 remains for Native American projects.

Planning, Monitoring and Evaluating Oil Overcharge Programs

To comply with federal and court reporting regulations, $384,199 in Stripper Well and $450,000 in Exxon funds have been committed for planning, monitoring and evaluating programs funded with oil overcharge dollars. In 1998-1999, a total of $15,441 in Stripper Well funds were spent.

Statewide Energy Education

Starting in 1993, the Energy Office joined with the Nebraska Math and Science Initiative to further energy education in the state. The Initiative is a group of educators across the state and staff from the University of Nebraska-Lincoln working to improve science and math education.

In 1994, the Energy Office committed $500,000 more in Exxon funds to match a $4.9 million grant to achieve excellence in elementary and secondary math and science education. Since this project began, more than 2,500 teachers have attended energy education workshops and 208 grants totaling $229,000 have been awarded for specific energy projects in schools across the state.

During the reporting period, $48,432 was spent for teacher training and grants.

The Initiative continued to operate the agency's energy education resource library and maximize use of the Internet for locating energy education resources. This project concluded in 1999.

Other Energy Settlement Funds

Not all oil overcharge funds are part of the Nebraska Energy Settlement Fund. Some of these funds have been held in escrow by the U.S. Department of Energy's Office of Hearings and Appeals. These funds are distributed to the states as payments are made by oil companies according to settlement agreements. According to the Department of Energy, all future oil overcharge funds received by the state will be classified as Stripper Well funds and not subject to review by the Office of Hearings and Appeals.

The oil overcharge project financed with these funds is described below.

Statewide Energy Information Service

In 1992-1993, the Energy Office began to develop energy information services to assist consumers to make decisions resulting in the efficient and economic use of energy.

Funded with $150,000 in Amoco funds, the agency developed a library collection and developed and distributed energy informational materials at a variety of events. This project concluded during this reporting period after all the funds were spent.

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