Powering Strong Communities

President Biden’s Proposed Budget Calls For Significant DOE Spending Increases

The Department of Energy (DOE) would see significant spending increases under a budget proposed recently by President Joe Biden.

Much of those increases, according to the budget, were made possible by or build on the Infrastructure Investment and Jobs Act (IIJA) signed into law last year.

The appropriation for DOE’s Office of Energy Efficiency and Renewable Energy (EERE) would nearly double under the budget with $4 billion allocated to “accelerating the research, development, demonstration, and deployment of technologies and solutions to cut energy costs through low-cost clean energy resources.”

Additionally, the Advanced Research Projects Agency-Energy (ARPA-E) would receive $700 million to expand its scope beyond energy technology focused projects to include climate adaptation and resilience innovations.

The Weatherization Assistance Program would receive $500 million, which DOE estimates could cover 50,000 homes.  As part of that, $100 million would be targeted to low-income families under what is being called the Low-Income Home Energy Assistance Program (LIHEAP) Advantage pilot program. The program would retrofit LIHEAP qualifying households with energy efficient electric appliances and systems.

LIHEAP itself would receive $4 billion, a $225 million increase from the 2022 enacted level. However, the administration is proposing amending LIHEAP to allow states to divert LIHEAP funds toward water assistance, in light of the expiration at the end of 2023 of the Low-Income Home Water Assistance Program (LIHWAP) created under the American Rescue Plan Act.

The American Rescue Plan Act provided $500 million for LIHWAP, so if funding continued at that level, the overall amount provided under LIHEAP under the budget proposal for energy assistance would actually decline.

Also, as part of the Administration’s Justice40 pilot program, the Department of Health and Human Services – which administers LIHEAP – “plans to increase efforts to prevent energy shutoffs and increase support for households with young children and older people, and high energy burdens,” according to the budget.

The budget includes an American Public Power Association-supported request for $9 million to the Environmental Protection Agency for a coal combustion residual federal permit program. This program was fully funded at $9 million in the FY 2022 Appropriations bill. 

The budget also proposes a “reserve” for legislation that reduces costs, expands productive capacity, and reforms the tax system. “Because discussions with Congress continue, the Budget does not break down the reserve among specific policies or between revenues and outlays,” the budget states.

At a White House briefing, staff clarified that these changes could include the provisions of the Build Back Better Act. Likewise, a Treasury Department explanation of revenue provisions in the budget does not include Build Back Better Act provisions, but instead simply assumes the Build Back Better Act is the baseline off which the budget’s revenue provisions would be built.

The budget does not propose selling the Power Marketing Administrations or the Tennessee Valley Authority, in whole or in part.