State of Wisconsin Department of Administration Division of Energy

Transcription

1 State of Wisconsin Department of Administration Division of Energy Focus on Energy Public Benefits Evaluation Low-income Weatherization Assistance Program Evaluation Economic Development Benefits Final Report: February 23, 2007 Evaluation Contractor: PA Government Services Inc. Prepared by: Lisa Petraglia and Glen Weisbrod, Economic Development Research Group, Inc.

2 State of Wisconsin Department of Administration Division of Energy Focus on Energy Public Benefits Evaluation Low-income Weatherization Assistance Program Evaluation Economic Development Benefits Final Report: February 23, 2007 PA Knowledge Limited 2006 Liaison Contact: Dr. David Sumi PA Government Services Inc Enterprise Lane, Suite 300 Madison, WI Tel: Fax: Prepared by: Contributions by: Lisa Petraglia and Glen Weisbrod, Economic Development Research Group, Inc. Bryan Ward and David Sumi PA Government Services Inc. This report is the property of the State of Wisconsin, Wisconsin Department of Administration, Division of Energy, and was funded through the Wisconsin Focus on Energy Program.

3 TABLE OF CONTENTS 1. Findings Objective of This Report The Low-income Weatherization Assistance Program How Does the Low-income Program Affect the Economy? Analysis Results Interpretation: Who Benefits from the Economic Impacts of the Low-income Programs? Detailed Findings Introduction Types of Findings Conclusions 2 11 Appendices APPENDIX A: Economic Impact Results by Program Aspect A 1 iii

4 1. FINDINGS 1.1 OBJECTIVE OF THIS REPORT This report examines economic development impacts of the Wisconsin s Low-income Weatherization Assistance program as one part of a multi-faceted suite of program evaluation reports. It describes the nature and magnitude of economic development impacts by tracing program effects on income and spending in the state, and by calculating the larger long-term effects on the net growth of business and generation of jobs in the Wisconsin economy. These results are measured by four alternative views business sales, value-added, jobs, and personal income. The report examines the size of these impacts, their timing, and their characteristics. The Low-income Weatherization Assistance program (funded in part through Wisconsin s Public Benefit programs) has other effects on the Wisconsin economy in addition to increasing energy affordability. One of these effects is stimulating the state s economy through the direct purchase of energy efficiency goods and services that low-income residents would not otherwise purchase on their own. These purchases provide direct impacts in the forms of jobs in the energy efficiency industry. They also produce indirect effects in the increased personal income with jobs created and increased business sales in Wisconsin industries. The program s services create flows of money through the state economy, increasing the state s competitiveness, decreasing imports of fuels from outside the state, and increasing the attractiveness of the state as place to live and work. It is important to note that economic impact is one of many program impacts. Other program impacts include reductions in energy use, consumer non-energy benefits, such as increased comfort, environmental benefits, and cost effectiveness. There is some inter-relationship among these various types of program impacts, though they are measured differently and are associated with different policy objectives. Other impacts are examined in other reports in this series. 1.2 THE LOW-INCOME WEATHERIZATION ASSISTANCE PROGRAM The Weatherization Assistance program (WAP) provides comprehensive energy efficiency services to the homes of low-income customers across the state. In addition to Wisconsin Public Benefits funds, federal funds from the Departments of Energy and Health and Human Services also support this program. This report documents how WAP creates economic development impacts for Wisconsin due to energy conservation efforts. WAP has operated in Wisconsin for many years. In April 2001, WAP came under the Focus on Energy banner, along with a variety of programs offered to business and residential customers across the state. The Low-income programs share the Focus goals of producing short- and long-term benefits for Wisconsin residents. In the short term, Low-income programs are designed to result in the participating customers gaining the benefits of more energy-efficient equipment: reduced energy usage, reduced energy bills, and increased personal income to spend on other critical needs. Focus also has the long-term policy objective of transforming Wisconsin s energy efficiency and renewable energy markets over time, so that all Wisconsin energy consumers will eventually realize benefits from a marketplace where the basic level of energy efficiency in all 1 1

5 1. Findings kinds of energy-using devices is greater than it was previously. Given these broad policy objectives associated with Focus programs, there are many types of benefits to be assessed. This report focuses solely on one of them specifically impacts on the Wisconsin state economy arising from the low-income programs. WAP generates the following economic impacts: 366 jobs and $16.3 million of real disposable income in the first program year and 666 jobs, $39.7 million of real disposable income in the fifth year to the Wisconsin economy. They also increase the state s gross regional product (GRP) and add to business sales $33.8 million in the fifth year. These benefits grow through the years the program is in effect, driven principally by energy savings generated by the programs and by non-energy benefits, such as increased productivity through fewer lost sick days for the program participants. 1.3 HOW DOES THE LOW-INCOME PROGRAM AFFECT THE ECONOMY? WAP directly affects customers budgets by decreasing energy costs through increased home efficiency and conservation through education. These activities can leave more money in families pockets to spend on other necessary purchases. This Focus Low-income program also creates other direct and indirect impacts throughout Wisconsin s economy. At the same time as they increase the flow of dollars staying within Wisconsin, they also reduce the outflow of money from the state associated with importation of coal and natural gas. Each of these effects produces jobs, increases personal income, and overall makes the Wisconsin economy more efficient and competitive. The Low-income program produces a number of non-energy benefits, such as increases in comfort, and increased productivity from fewer sick days. Some of these non-energy benefits produce money flows in the economy and are therefore factors in the economic impact analysis. A complete list of the non-energy benefits, indicating those that have economic and effects and those that do not is found in Section A full discussion of the development of the non-energy benefits is found in Low-income Public Benefits Evaluation: FY07 Detailed Evaluation Plan. 1 There are also cost effects. The Public Benefits charge that funds part of the Low-income programs is a cost to all customers, although not a new one, since customers have paid the cost of demand-side management programs through utility rates for a number of years. In general, this Low-income program leads to shifts in spending by households. The result is that some sectors of the economy gain sales while others do not. For instance, reductions in the growth of demand for traditional energy sources can mean less growth (or actual reductions) in business activity and jobs associated with construction and operation of coalfired power plants and retail sales from those plants. On the other hand, this is offset by increased business sales and jobs associated with energy-efficient products and services made in Wisconsin. The report covers all aspects of changes in the economy and describes the types of jobs and industries where there are changes in business sales, value added, employment, and income attributable to the Public Benefit Low-income programs. 1 PA Government Services, Inc. June 19,

6 1. Findings 1.4 ANALYSIS RESULTS As detailed in the full report Economic Development Benefits: FY07 Evaluation Final Report, the REMI economic model generated estimates of the current and projected future economic impacts of Focus Low-income program. For the purposes of consistency with the analysis of other Focus on Energy programs, this analysis examined Low-income WAP assuming a tenyear program span, even though the Low-income programs have been in effect for many years and are assumed to continue in effect after the ten year analysis period. It is import to note that some economic impacts will continue for an additional 15 years beyond any active program period because some program activities produce energy savings for the life of the measures installed, subject to normal decay as efficiencies decline with age or measures are taken out of use. Table 1-1 summarizes the economic analysis results for the Low-income WAP. The table shows the projected economic impacts for selected years and periods. It shows how program impacts accumulate over time within an assumed 10-year period of program operation. These economic impacts are presented in terms of (1) the number of full-time equivalent job years created for Wisconsin residents, (2) the sales generated for Wisconsin businesses, (3) the value added portion of those sales, and (4) personal income generated for Wisconsin residents. Altogether, the analysis found that the Low-income program leads to significant economic development benefits for Wisconsin s economy. The first year of program operation causes a variety of household savings and spending changes that altogether support 366 jobs in the state, supporting more than 6,162 jobs over ten years of program operation. The personal income generated in Wisconsin from this additional business activity represents $16.3 million in the first year and grows to over $39 million by the fifth year of program operation. Table 1-1. Summary of Economic Effects for WAP Low Income WAP Year 1 Year 5 Year 10 Sum 10 Years Jobs (job years for sum) ,162 Sales generated $33.8 $65.5 $78.0 $612.4 GRP (Value-added) $23.3 $45.6 $54.8 $426.7 Disposable income generated $16.3 $39.7 $55.5 $385.6 All dollar amounts are year 2006 constant dollars GRP = Gross Regional Product, reflecting both net personal incomes to households and net income to businesses. 1 3

7 1. Findings 1.5 INTERPRETATION: WHO BENEFITS FROM THE ECONOMIC IMPACTS OF THE LOW-INCOME PROGRAMS? To assess the diversity of economic development benefits, the REMI economic model was applied to show the breakdown of economic growth impacts by industry sector and occupation category. The comparison of job impacts by industry shown in Figure 1-1 reveals that the Low-income program provides widespread benefits among all sectors of the economy. Figure 1-1. Summary of Job Impacts by Industry, Year 5 Wholesale Trade 2% State & Local Gov 5% Retail Trade 13% Nat Res, Mining, Util, Const 7% Manufacturing 11% Transp, Inform, Fin Act 5% Services 57% While many of the program provider participants are manufacturing and commercial businesses, many of the spillover economic benefits accrue to wholesalers, retailers, and service providers that provide goods and services to participating businesses, or that benefit from the re-spending of additional household income within the state. A breakdown of job impacts by occupation shows that the types of additional jobs created or supported by this Low-income program spans a wide range of skill levels among both blue-collar and whitecollar categories. Figure 1-2 shows a summary of job impacts by occupation. 1 4

8 1. Findings Figure 1-2. Summary of Job Impacts by Occupation, Year 5 Other 21% Prof Tech Srvc Mgnt-Bus.-Finance 9% 12% Scientists 1% Transportation 5% Manufacturing related 8% Construction 5% Sales, office, admin occ 29% Healthcare 4% Social Service 1% Legal 2% Education-related 3% 1 5

9 2. DETAILED FINDINGS 2.1 INTRODUCTION This section of the report discusses methodology and results in additional detail. These sections shows how the major elements of the program program spending, energy savings, non-energy benefits, and emissions benefits impact the state s economy with respect to jobs created, personal income generated, business sales, and changes in gross regional output (GRP) Purpose of this report This report describes the nature and magnitude of economic development impacts of the Low-income Weatherization Assistance (WAP) program tracing changes in the flow of income and spending caused by the program, and showing how the program causes both direct and indirect effects on the flow of money in the Wisconsin economy as well as effects on the states economic competitiveness for business attraction. The primary objective of economic development is to increase job opportunities and income levels, as part of a broader effort to improve the lives of Wisconsin residents by expanding and diversifying the state s economic base. In this report, we measure economic development impacts through four alternative views business sales, gross regional product, jobs, and personal income. The report examines the size of these impacts, their timing, and their characteristics Program Background The Weatherization Assistance program (WAP) provides comprehensive energy efficiency services to the homes of low-income customers across the state. This program is funded by federal funds from the Departments of Energy and Health and Human Services in addition to Wisconsin Public Benefits funds. WAP has operated in Wisconsin for many years. In April 2001, WAP came under the Focus on Energy banner, along with a variety of programs offered to business and residential customers across the state. The Low-income programs share the Focus goals of producing short- and long-term benefits for Wisconsin residents. In the short term, Low-income programs are designed to result in the participating customers gaining the benefits of more energy-efficient equipment: reduced energy usage, reduced energy bills, and increased personal income to spend on other critical needs. Focus also has the long-term policy objective of transforming Wisconsin s energy efficiency and renewable energy markets over time, so that all Wisconsin energy consumers will eventually realize benefits from a marketplace where the basic level of energy efficiency in all kinds of energy-using devices is greater than it was previously. Given these broad policy objectives associated with Focus programs, there are many types of benefits to be assessed. This report focuses solely on one of them specifically impacts on the Wisconsin state economy arising from the Low-income Programs. 2 1

10 2. Detailed Findings The Public Benefits Low-income programs share the Focus on Energy six formal policy objectives: 1. Near-term resource acquisition (increased energy efficiency; decreased energy use) 2. Environmental benefits 3. Economic development 4. Market transformation (overcome market barriers to increased energy efficiency) 5. System reliability (electricity generation, transmission and distribution in the state) 6. Stimulate energy efficiency services industry. Given these policy objectives, there are clearly many types of program benefits that need to be assessed: improvements in energy efficiency and total energy consumption; improved air quality resulting from decreased electricity generation; improved health and quality of life; and, improvements in Wisconsin s economy from the activities generated by the program. Each of these areas is being addressed as part of the overall evaluation of the Low-income Programs. This report focuses solely on economic development impacts Types of Economic Development Impacts The Low-income program directly affect Wisconsin s economy, and thus the income and jobs of Wisconsin residents, in three primary ways: (1) Improved Cost of Living. Decreasing residential electric and gas customers energy costs, through increased efficiency and conservation, can also leave more money in families pockets (to spend on other necessary purchases.) By lowering the cost of living, it also makes Wisconsin a more competitive location for additional business attraction, investment, and expansion. (2) Import Substitution. The Low-income programs also encourage more spending dollars to stay within Wisconsin. Wisconsin businesses are major manufacturers of heating and air conditioning equipment. Low-income programs stimulate sales for these industries in Wisconsin. At the same time as they are increasing the flow of dollars staying within Wisconsin, they are also reducing the outflow of money from the state associated with importation of coal and natural gas. Each of these effects produces jobs, increases personal income, and overall makes the Wisconsin economy more efficient and competitive. (3) Spin-off Spending Changes. There are also various indirect and induced impacts that cause both positive and negative changes in spending. Suppliers to the directly affected businesses can realize increased orders for their products and services. Additional jobs and worker income can mean more re-spending of that income on consumer purchases. On the other hand, reductions in the growth of demand for traditional energy sources can mean less growth (or actual reductions) in business sales and jobs associated with construction and operation of coal-fired power plants and retail sales from those plants. The Public Benefits charge that in part funds Low-income programs is a cost to customers, although not a new one, since customers have paid the cost of such programs through utility rates for many years. 2 2

11 2. Detailed Findings The report covers all aspects of changes in the economy and describes the types of jobs and industries where jobs are gained as well as lost due to the Low-income programs. We refer to the sum of all of the above-cited effects as economic development impacts because they reflect changes in the growth and development of the state s economy i.e., the flow of money into, out-of, and within the state, affecting jobs and income for Wisconsin residents Distinguishing Economic Development from Other Impacts Some aspects of energy, environmental, and other non-energy impacts can cause changes in the flow of dollars as measured in this report. However, there are other aspects of those impacts that are not reflected in the analysis of economic development impacts in this report. They include some aspects of safety, security, reliability, health, and other aspects of quality of life which either lack estimates of how they affect the economy, or have policy importance beyond their mere effect on the flow of dollars. It is also important to distinguish the analysis of economic development impacts from a traditional benefit-cost analysis. A benefit-cost study can include any type of benefit that can be put into dollar terms (based on either actual flows of money or willingness-to-pay studies), whereas economic development analysis considers only effects on the actual flow of dollars in the economy. On the other hand, a traditional benefit-cost study does not encompass impacts on economic competitiveness, on economic diversification, or on shifts in activity between this state and other states. An economic development impact analysis can consider all of these other types of impacts. Finally, a benefit-cost study considers program spending as a cost that is subtracted from program benefit, while an economic development impact analysis traces how program spending can also be a source of additional business growth. Doing both types of analysis provides decision makers with a fuller understanding of how the programs affect the state s economy Steps in the Analysis Process There are three steps in the process of analyzing the economic development impacts of the Focus on Energy program. These steps are briefly summarized below, while a more detailed explanation of this methodology is provided in Appendix A of Economic Development Benefits: FY07 Evaluation Final Report. 2 (1) Document Direct Effects. The first step is to track the net direct effects of the program. These are net changes in: Program operations spending in this case public benefit dollars are spent in operating the program and paying incentives to business and household participants. Household these are dollar savings to households (resulting from reductions in energy and electric demand), realized because of the existence of the program. 2 (December 2006), submitted to the Wisconsin Department of Administration as one element of the Focus on Energy Statewide Evaluation. 2 3

12 2. Detailed Findings Household cost these are the additional household expenditures associated with the incremental cost of purchasing energy-efficient equipment (generally the total cost of new equipment minus incentives paid by the program, and net of what would otherwise have been spent anyway). The Low-income programs pay 100 percent of the costs, so household cost is not a factor in this category of programs. Other spending shifts shifts in patterns of spending and business sales among sectors of the state economy affecting the flow of dollars into, out-of, and within the state. We rely on other program evaluation reports to obtain the basic information for these direct economic impacts. A key element of this process is careful attention to establishing the net change in government, household, and business behavior compared to what would otherwise be expected to occur without the program. In addition, attention is given to estimating the lifetime and persistence of energy savings for program participants. In general, the representation of program cost, participation, and energy impacts in this report builds upon program evaluation studies that are described in more detail in other reports. (2) Apply the Economic Model. The second step is to apply the REMI economic model of the state of Wisconsin. The model is a tool used to trace how the direct effects lead to changes in household and business costs, spending, and sales patterns throughout the state s economy. As illustrated in Figure 2-1 below, we apply the inputs from step 1 to the REMI economic model to track a series of shifts in the state economy, including: Lower household living costs (increased attraction as a place to live) Import-substitution (Wisconsin-made products substitute for purchases of out-of-state equipment and fuels) Increased orders for firms supplying goods and services to equipment manufacturers and installers in Wisconsin (indirect effect) Re-spending of additional worker income within Wisconsin (induced effect) The results of the REMI model represent changes in the economy of the state, on a year-byyear basis. The key indicators of change in the state s economy are: Total volume of business sales by type of business Total number of jobs associated with the change in business sales by type of business and occupation category Total personal income associated with the change in jobs and business sales by type of business Total gross regional product the change in value added that is generated in Wisconsin, which is essentially the sum of personal income and corporate income (profit) (3) Analyze Economic Development Implications. The third and final step in the analysis process is to apply results of the economic model (step 2) to assess how the forecast program impacts translate into economic development changes. These include: 2 4

13 2. Detailed Findings Changes in the growth and mix of jobs for Wisconsin residents, in terms of industries and occupations. These can lead to increased diversification of the economy, increased opportunities for job skills, and higher income levels for Wisconsin workers. Changes in the incidence of economic impacts, in terms of urban and rural locations. Shifts in the nature and size of impacts occurring over time. Shifts in the economic competitiveness and attractiveness of Wisconsin as a place to live and to locate a business. 2 5

14 2. Detailed Findings Figure 2-1 Key Elements of Economic Development Impact 2 6

15 2. Detailed Findings Roles of the Low-income Programs The Low-income program is a distinctive type of energy efficiency program. The Low-income Weatherization Assistance program transfers spending from the Public Benefits fund along with federal funds to low-income households by paying contractors to improve the energy efficiency of low-income households. Contractors install insulation, weather stripping, and other improvements that increase the homes efficiency. They also install efficient lighting and in some cases provide energy efficient appliances. Low-income program participants therefore realize energy savings while not spending any of their own resources. Through these subsidies, the Low-income Weatherization Assistance program produces important benefits to program participants, not the least of which is increased home affordability. Each element of the Low-income program has some effect on the economy, either by shifting purchasing patterns, saving energy or providing other non-energy benefits. Thus, we apply the same economic analysis framework (discussed next) for all elements of the programs. However, we note that those program elements that are specifically designed to save money, like the WAP energy efficiency work, naturally emerge with the greatest magnitude of economic benefits. 2.2 TYPES OF FINDINGS This section presents the economic development impacts, based on implementation completed between FY02 and FY07 of the Low-income Weatherization Assistance program, and projections of program activity over the next five years. It discusses how economic development impacts evolve over time. The types of industries and jobs benefiting from these economic development impacts were presented and discussed above. Table 2-1 presents the direct aspects for WAP through the first five years of implementation as well as the projections for the latter 5-year period. Table 2-1. WAP Program Parameters* $ Budget (mil.) Year 1 Year 5 Year 10 $35.0 $57.0 $57.0 $ Direct Savings (mil.) $1.1 $7.3 $15.2 $ Non-energy Benefit (mil.) $0.8 $4.5 $7.3 $ Emission Benefit (mil.) $0.001 $0.011 $0.038 kwh Saved (cumulative) 4,273,257 22,614,131 35,623,975 Therms Saved (cumulative) 808,836 4,903,636 9,076,352 * dollars are year 2006 constant Source: KEMA,

16 2. Detailed Findings Effects Over Time Through the analysis process that was previously described, the REMI economic model generated estimates of the current and projected future economic impacts of Focus on Energy. Since a key feature of the Low-income programs is energy cost savings for households, and since those savings continue over the lifetime of installed equipment, it is necessary to measure economic impacts over a period of time. Figure 2-2 illustrates the economic analysis results for the WAP. It shows how overall program impacts increase as user cost savings benefits, non-energy and emission benefits (NEBs), and non-program spending benefits all accumulate over time. With regard to economic benefits, the economic impacts attributable to the WAP program benefits come predominantly from the effect of program-related purchases 81.8 percent of the increases in real disposable household income, 91.6 percent of increases in business sales, and 92.8 percent of increases in gross regional product result from program spending. Energy savings and non-energy/emission benefits account for the remainder of effects. Further breakdowns of impacts by causal factor are provided in Appendix A. Figure 2-2. Employment Impact Over Time, by Cause (WAP) Jobs Implementation Year Program Purchases energy Savings Non-energy Benefit emission Benefit Table 2-2 shows the projected economic impacts for selected years and periods, presented in terms of (1) the number of full-time equivalent job years created for Wisconsin residents, (2) the sales generated for Wisconsin businesses, (3) the value added portion of those sales, and (4) personal income generated for Wisconsin residents. 2 8

17 2. Detailed Findings Table 2-2. Economic Development Impacts for WAP Low Income WAP Year 1 Year 5 Year 10 Sum 10 Years Jobs (job years for sum) ,162 Sales generated $33.8 $65.5 $78.0 $612.4 GRP (Value-added) $23.3 $45.6 $54.8 $426.7 Disposable income generated $16.3 $39.7 $55.5 $385.6 *All dollar amounts are year 2006 constant dollars GRP = Gross Regional Product, reflecting both net personal incomes to households and net income to businesses. Altogether, the analysis found that WAP leads to significant economic development benefits for Wisconsin s economy. The first year of program operation causes a variety of household savings and spending changes that altogether support 366 jobs in the state, supporting more than 6,162 jobs over ten years program operation. The real disposable household income generated in Wisconsin from this additional business activity represents $16 million in the first year and grows to over $39 million by the fifth year of program operation Non-energy Benefits Non-energy benefits (shown in Table 2-3) are one of the drivers of increasing program savings. These benefits result from the energy efficiency activities of the WAP (increased comfort, increased productivity due to better health, decreased water and sewer bills resulting from water efficiency measures, and so on). Some non-energy benefits have economic consequences. These benefits produce flows of money in the economy. When program participants are sick less often they can work more and increase their income. Some benefits do not produce economic flows, such as increased comfort, but they do provide quality of life benefits to the program participants. Table 2-3 below briefly describes the non-energy benefits and indicates which are applicable to WAP and which were considered in the economic analysis. A complete discussion and analysis of non-energy benefits is found in the following memo: Low-income Public Benefits Evaluation: FY07 Detailed Evaluation Plan. 3 3 PA Government Services, Inc. June 19,

18 2. Detailed Findings Table 2-3. NEBs Counted in the Economic Impact and Benefit-Cost Analysis for WAP Benefits to Counted in the Economic Impact Analysis? Counted in the BC Analysis? Counted for WAP? NEBS Counted in the Economic Impact and BC Analysis Reduced arrearage carrying cost Utility YES YES YES Lower bad debt write-offs Utility YES YES YES Payment plan negotiation (utility savings) Utility YES YES YES Utility disconnect and reconnects Utility YES YES YES Lower collection costs to utility Utility YES YES YES Improved health and safety Utility YES YES YES Moving and mobility costs avoided Participant YES YES YES Water and Sewer savings Participant YES YES YES Reduced illnesses and lost work days Participant YES YES YES Maintenance and repair costs avoided Participant YES YES YES appliances Indoor air quality (CO related) Participant YES YES YES Avoided Capital Expenditure ( increased Participant YES YES YES property value ) NEBS Counted in the BC Analysis but Not in the Economic Impact Analysis Reduced illnesses for participants (lost Participant NO YES YES personal time) Comfort Participant NO YES YES Bulbs only: Personal time and bulb cost Participant NO YES YES avoided on maintenance and repair NEBS Not Counted in the Economic Impact or BC analysis Arrearage reduction Utility NO NO NO Detailed discussion of the non-energy benefits will be found in the low-income benefit/cost analysis and another report in this evaluation series devoted to the topic. The results shown here provide a starting point for further policy analysis. The economic and geographic distribution of these economic impacts can be compared to a various indicators of Wisconsin statewide economic patterns and trends, in order to better understand the value of Focus as an impetus to economic diversification. The magnitude of these economic impacts can also be compared to those associated with a variety of energy and public benefit programs in other states. The nature of these economic impacts can also be compared with those associated with other types of public programs and policies in Wisconsin. 2 10

19 2. Detailed Findings 2.3 CONCLUSIONS Focus Low-income program provides significant direct benefits to program participants in the form of energy and non-energy benefits in the WAP. The direct benefits increase participants personal income by decreasing their energy expenditures. These increases allow participant households the ability to make other necessary purchases they would otherwise have spent on their critical energy needs. The Non-energy benefits are also a significant part of the benefits stream. Non-energy benefits that have economic impacts further directly improve participants economic situations through increased personal income and indirectly benefit the state through increased business sales and increases in the gross regional product. This program generates additional significant benefits in the Wisconsin economy, which are broadly based because that program employs a variety of contractors who provide a range of energy efficiency, conservation, and education services. WAP also stimulates manufacturers and suppliers of energy-efficient appliances, lighting, heating equipment, insulation, and other staples of the profession. The efficiency services of the WAP also contribute to decreased imports of coal and other fossil fuels purchased from out of state, keeping more money in the state s economy as a whole. 2 11

20 APPENDIX A: ECONOMIC IMPACT RESULTS BY PROGRAM ASPECT WAP Program Purchases Year 1 Year 5 Year 10 Sum 10 Years Jobs (job years for sum) Sales generated (mil.) GRP (mil.) Disposable income generated (mil.) 340 $31.7 $22.1 $ $51.4 $36.8 $ $49.6 $36.4 $24.3 4,425 $457.3 $328.6 $211.7 Energy Savings Year 1 Year 5 Year 10 Sum 10 Years Jobs (job years for sum) Sales generated (mil.) GRP (mil.) Disposable income generated (mil.) 16 $1.2 $0.7 $ $8.7 $5.4 $ $19.0 $12.3 $21.0 1,110 $98.6 $62.6 $111.2 Non-energy Benefits Year 1 Year 5 Year 10 Sum 10 Years Jobs (job years for sum) Sales generated (mil.) GRP (mil.) Disposable income generated (mil.) 11 $0.9 $0.5 $ $5.3 $3.4 $ $9.2 $6.1 $ $54.6 $34.8 $60.4 Emission Redux Benefits Year 1 Year 5 Year 10 Sum 10 Years Jobs (job years for sum) Sales generated (mil.) GRP (mil.) Disposable income generated (mil.) All dollars are reported in year 2006 constant basis 0 $0.0 $0.0 $0.0 1 $0.1 $0.1 $0.1 3 $0.3 $0.2 $ $1.5 $1.0 $1.3 With regard to economic benefits, the economic impacts attributable to the WAP program benefits come predominantly from the effect of program-related purchases, i.e. 84 percent of the increases in real disposable household income, 94 percent of increases in business sales, and 95 percent of increases in gross regional product result from program spending. Energy savings and non-energy/emission benefits account for the remainder of effects. A 1