oversight

Concerns regarding Report on the Solar Energy Research Institute

Published by the Government Accountability Office on 1977-11-25.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                         DOCUMENT   iRESUM
04255 - [B3334564]

(Concerns regarding Report on the Solar Energy Research
Institute]. EMD-78-20; B-186105. NcveQ.Ner 25, 1977. 3 pp. + 2
enclosures (9 pp.).
Report to Rep. Timothy E. Wirth; Sen. Floyd K. Haskell; Sen.
Gary W. Hart; by Elmer B. Staats, Comptroller General.
Issue Araa: Energy: Exi.cutive Branch Organization and Processes
    for Dealing with Energy Problems (1611); Science ar.d
    Technology: Federal Laboratoties and Federally Supported
    OiCgenizations Performing ",search and Developm.ent (2003).
Contact: Energy and Minerals Div.
Budget Function: Natural Resources, Environment, and Energy:
    Energy (305).
Organization Concerned: Department of Energy: Solar Energy
    Research Inst.; Entergy Research and Development
    Auministration.
Congressional Relevance: Rep. Timothy E. Wirth; Sen. Floyd K.
    ;askell; Sen. Gary WN. Hart.
Authority: Solar Heating and Cooling Denonstration Act of 1974
     (P ,. 93-409).
          GAO's September 9, 1977 report on the Solar Energy
Research Institute (SERI) was based on information obtained from
continuing reviews of Federal. solar energy research and
development efforts. Research specifically related to the
authorization and creation of SERI began in April 1977 after the
Energy Research and Development Administration (ERDA) announced
the selection of a contractor for SERI. Disagreements were
expressed relating to findings and conclusions in this report.
Findings/Conclusions: Clarifications were offered on the
following questions raised about the report: (1) It inaccurately
asserts that a certain amendment was adopted by the Senate
during deliberations on the ERDA authorization bill. GAO did not
make this assertion, but stated that a bill scheduled to be
introduced in the House was similar to one adopted by the
Senate. (2) It suggests that the need for SERI has been
eliminated through consolidation of Federal sclar energy
efforts. At the present time, such efforts are fragmented. (3)
GAO failed to recognize the congressional commitment To SERI by
asserting that many of its  projected functions could be
performed it existing laboratories. Because of the time iapse
since SERI's authorization, placing it at an existing laboratory
could have hastened ics operation. (4! Existing Federal
 ahboratories are not geared to perform certain functions.
Multiprogram laboratories not only have capabilities that could
be built upon, but many laboratories have viable ongoing solar
energy efforts. (5)Undefined factors do not limit SERt's
importance. Tho importance of SERI's purposes were not
questioned, but its need should be reexamined. (HTW)
                             COMPT'O.I{    GENMALA   OF -1r    UNI'TE   MA-raS
                                          WAIIsNOION, Q.C.   am4




      B-1861O0   sNovember                                                25, 1977

UJ
      The Honorable Floyd K. Haskell
CO    The Honorable Gary W. Hart
      United States Senate
      The Honorable Timothy E. Wirth
      House of Representatives

           In your joint letter dated
      presented various information andSeptember  23, 1977, you
                                         indicated concern regarding
      our September 9, 1977, report or the Solar
                                                   Energy Research
      Institute (SERI). We have carefully considered
      in your letter, and our comments on each          the matters
      enclosure I. For convenient reference,     are contained  in
      is shown in enclosure II.                a  copy of your letter

            Au you know, our report was prepared as
      August 2, 1977, request from the Chairman,       a result of an
      Advanced Energy Technologies and Energy      Subc-ommittee    cn
                                                Conservation Research,
      Development, and Demonstration of the House
                                                     Committee on
      Science and Technology. The reptrt, however,
      extensive and careful research that had           was based on
                                                actually begun long
      before our receipt of the Subcommittee
                                              Chairman's request.
            Part of that research included drawing
      body of Information accumulated during        on the tremendous
      assignments involving solar energy. In our prior and on:going
      been continually reviewing the Federal this regard, we have
                                              solar energy research
      and development efforts for the past several
      issued a number of reports which touch          years and have
                                              on various aspects of
      these efforts. The most comprehensive
                                              of these reports was
      issued in November 1976 and contained several
     regarding the adequacy of the planning             recommendations
                                              pLocess
     by the former Energy kesearch and Development establi.-hed
      (ERDA) to meet the goals of its solar            Administratiao,
     opment, and demonstration program.      energy   research,   devel-
           We have also recently completed a comprehensive
     tion into possible considerations for encouraging          examina-
     spread use of solar space and water heating.           the  wide-
                                                       This examination
     covered the technical and economic status
                                                 of the various solar
     heating applications; constraints or impediments
     spread use; and, effectiveness of current             to their wide-
                                                 and
     to encourage the use of solar energy, particularlyproposed   efforts
                                                             existing

                                                                                 EMD-78-20
                                                                                  (990516)
B-186105



State incentives legislation and the President's proposed tax
credits. We are currently drafting a report on the results
of that examination for issuance to the Congress.

     We also have underway three other assignments in the
solar energy research, development, and demonstration area
which we expect to complete during 1978. They are (1) a
review of Federal efforts and progress relative to the
requirements of the Solar Heating and Cooling Demonstration
Act of 1974 (Public Law 93-409); (2) a review of the p obable
impact of selected funding levels on the development and com-
mercialization of solar energy; and, (3) an assessment of the
management, progress, and problems associcated with Federal
efforts to develop the various solar technologies into viable
energy sources.

     In addition to drawing on the results of our prior and
ongoing efforts specifically relating to solar energy, our
research included obtaining input from our recesnt examination
of the energy research, development, and demonstration roles
of ERDA's multiprogram laboratories. That examination
included obtaining and analyzing information on the capabili-
ties of these laboratories for performing work in the energy
research, development, and demonstration areas, the nature
and extent of their involvement in such areas, and the manner
or mechanisms by which their respective roles in these areas
are determined. Our examination was made, in detail, at each
of the eight multiprogram laboratories and ERDA headquarters.
We also did wbrk at three of ERDA's operations offices, two
endrgy research centers, tl.e National Aeronautics and Space
Administration headquarters &adtwo of ti.ir facilities--the
Jet Propulsion Laboratury and Lewis Research Center. In addi-
tion, we visited 25 industrial and educational organizations
and met with a panel of several of our consultants having
expertise in energy research and development at university,
industry, and Government organizations to assist us in
addressing the issues affecting the roles of the multiprogram
laboratories. aWe expect to issue our report on the results
of that examination early next year.
     Our research that was specifically related to the
authorization and creation of SERI began in April 1977,
shortly after ERDA announced the selection of the Midwest
Research Institute as the managing/operating contractor for
SERI. Our rationale for beginning at that time was two-
fold. First, ERDA's selection of the SERI contractor would
have a probable effect Cr the ongoing work at other Federal
laboratories, and this had to be assessed in light of our
than ongoing examination of the mult'program laboratories.
Second, we recognized the sensitivity inherent in selecting

                             2
B-186105


the contractor and location for SERI, and we anticipated
congressional interest in this area.
     Thus, by the time we received the Subcommittee Chair-
man's August 2, 1977, request, much of tne research needed
to satisfy that request had already been done, We had to do
more, however, than simply write and issue the report. We
still had to complete our review of pertinent legislation,
obtain and analyze a substantial number of documents relating
to the evaluation and selection of the SERI contractor, dis-
cuss the issues with many persons connected with bringing
SERI into being, and prepare and process the report through
our various normal review channels.
     We trust that this background information and our
enclosed specific commenti satisfactorily meet your needs.
We would be pleased to meat with you to provide further
inforvatio'i should you so desire.
     As agreed with your office, copies of this report are
being sent to the Chairman, Subcommittee on Advanced Energy
Technologies and Energy Conservation Research, Development,
and Demonstration of the House Committee on Science and
Technology, and other interested members of the Congress.
Also, copies will be available to the public.
                              Sig       yoursX



                              Comptroller General
                              of the United States

Enclosures - 2
ENCLOSURE I                                            ENCLOSURE I



              GAr   COMMENTS ON MATTERS PRESENTED BY

       SENAT'JXS IASKZLL A'.D HART AND CONGRESSMAN WIRTH

           REGARDING GAO'S SEPTEMFER 9, 1977, REPORT

         ON THE SOLAR ENERGY RESEARCH INSTITUTE (SERI)

     The matters presented in a September 23, 1977, letter
signed jointly by 'enators Floyd K. Haskell and Gary W.
Hart and Congressman Timothi E. Wirth, are enumerated and
underscored below, followed by our comments thereon. To
facilitate presentation, we restated or paraphrased some of
the matters presented. The full text of the September 23
letter is contained in enclosure II.

1.   The report inaccurately asserts that an amendment requir-

the reqional SERI network was adopted by the Senate in June
of this vear during its deliberations on the Energy Research
and Development Administration (ERDA) authorization bill.
     Our report did not flake such an "assertion." In discus-
sing the amendment in question, we stated in the report that
the fiscal year 1978 authorization b:* ' for ERDA was
scheduled to go to the House floor in early September 1977.
We pointed out that we were requested 1/ to provide comments
on an amendment that was expected to be introduced at the
time requiring $25 million of ERDA's solar program funding
to be spent through SERI, with 80 percent going to the
regio1 .al SERI network. With respect to the amendment adopted
by the Senate last June, we stated that it was 'similar" to
the one that was expected to be introduced on the House floor.

     We recognize that th3 amendment adopted by the Senate
did not set a specified amount or percentage of furds for
allocation to the regional SERI network. The amendment did,
however, provide that funding be authorized for the network.
Accordingly, our use of the term "similar  il the report was
based on the fact that the expected House amendment would
similarly have had the affect of authorizing funds for the
network.




l/Request dated August ?2, 1977, from the Chairman. S,.bcommit-
  tee on Advanced Energy Technologies and Energy Conservation
  Research, Development, and Demonstration, Louse Committee
  cn Science ard Technology.


                                 4
ENCLOSURE I                                           ENCLOSURE I


     It was not our intention to convey the impression that
these two amendments wet- identical. Nowhere in the report
did we discuss the issue pertaining to the specified allo-
cation of funds to the network, other than by way of back-
ground information on the nature of the Subcommittee Chair-
man's request.
     Our primary concern was that any authorization of funds
for the regional SERI network, regardless of the specific
dollar amount, would have been premature. Our bases for this
position were:
     -- ERDA's decision to create the network appeared
        to have been rather arbitrary.
     -- Indications that the eventual role of the
        network may dilute the intended focal point
        role of SERI.
     -- The total estimated cost of the regional SERI
        network was unknown.
     -- Decisions had not yet been made concerning how
        the regional network would impact on and inter-
        face with SERI, the other Federal laboratories,
        =.uJ the headquarters organization.
     -- The reporting ana control structure for the
        network had not yet been defined.
     Accordingly, we stated our belief that the Congress
should reject any amendment or proposal that would have the
effect of authorizing funds for the network until the need
for such a network is adequately demonstrated. In this
regard, we stuggested that the Congress should require the
Department of Energy to conduct an examination into the need
for the network and to provide the Congress with a comipre-
hensive report setting forth its total estimated cost, organ-
izational structure, management interrelationships, and scope
of work.
2. The report suggests that the need for SERI has been elim-
inated through consolidation of previusly disprsedFederal
 SOA.r energy research, development, and demonstration (RD&D)
e-fo-ts. Such efforts however, remain fragmented.

  -  It should be recognized that the primary purpose of c¢ur
report was to bring out questions or problems which we saw
with the amendment that was expected to be introduced on the
House floor. We pointed out in the report that the changes


                              5
ENCLOSURE I                                         ENCLOSURE I


in the Federal efforts to develop solar energy, both in terms
of consolidation of efforts and increased emphasis: have been
significant since SERI's authorization in 1974. We felt it
was necessary to bring these changed circumstances and asso-
ciated matters to the attention of the Congress because the
funding levels contained in the 1978 ERDA authorization bill,
as well as the expected amendment, represented the first major
financial commitment to the SERI effort. Since SERI had not
yet become a viable operating entity, we pointed out that the
opportunity exists for the Congress to rethink its position
on SERI before embarking on a more substantial investment in
the SERI effort.
3. GAO failed in its analysis to au     the dree of con-
gressional commitment:to SERI as an instrument to asten the
realization of solar energy by assertinq that many of the
research and development functions prou =ted for SLI could
be adequately performed at exising laboratories, and that
ERDA did not give due consideration to the option of placitn
SERI at one of these facilities.
     We recognize that there has been substantial congres-
sional interest and commitment to SERI as one of the means
for hastening the early use of solar energy as a viable
energy source. We note, however, that 3 years have elapsed
since SERI's authorization and, as stated in our report, SERI
has yet to become a viable operating entity. Accordingly,
our report pointed out that by placing SERI at one of the
existing Federal laboratories, ERDA could have brought SERI
into being at an earlier date.
     One of our prl._cipal concerns, h!owever, was that ERDA
did not give adequate consideration to placirng SERI at one
of these existing laboratories. We had a number of reasons
for this concern. First, the legislation authorizing 6ERI's
creation refers specifically to these laboratories as possi-
ble locations for SERI. In this connection, section 10(b)
of the Solar Energy Research, Development, and Demonstration
Act of 1974 states:
      "The Institute may be located (as designated
      by the Chairman) at any new or existing Federal
      laboratory (including a non-Federal laboratory
      performing functions under a contract entered
      into with the Project or with any of the agencies
      represented in che Project as well as a la'ora-
  -   tory whose personnel are Federal employees)."
Second, no detailed evaluation was made of the extent to
which these labcratorles could perform, or be modified to


                               6
 ENCLOSURE I                                       ENCLOSURE I


perform, the functions eavisioned for SERI. Third, the
Federal laboratories were not allowed to respond to ERDA's
request for proposals from organizations inte£tsted in
becoming the managing/operating contractor for SERI. Taking
into consideration the tremendous amount of funds already
invested in the Federal laboratory system and the involvement
of certain of theso laboratories in solar energy, we believe
equal consideration should have been given to placing SERI at
one of these laboratories.

4. The existing Federal laboratories are not geared to per -
form such SERI functions as workshops and symposiums   ana
institutional impediments- or i-dentiy incentives.
                                           .       thatwld-
enhance the economics of solar essential
                                                           to
ear--   reaiization of s;oiar. energy.
      With respect to the capabilities of the federal labora-
tories, our recent work on the roles of the multiprogram
laboratories shows that certain of the Federal laboratories
not only have the capability for conducting research on solar
energy, but they have viable ongoing solar energy efforts as
well.

      As pointed out in our report, two of these laboratories
-- the National Aeronautics and Space Administration's Jet
Propulsion Laboratory and ERDA's Sandia Laboratories--were
expected to have outlays of $33 million and $30 million,
respectively, for such efforts during fiscal year 1977.
Also, according to ERDA, work at the Sandia Laboratories is
typical of the solar energy research underway in university,
industry, and other Federal laboratories throughout the
country.

      The laboratories have also been involved in providing
management support to headquarters in such areas as solar
energy RD&D planning, proposal assessments, and contract
monitoring. Furthermore, five of the laboratories are cur-
rently involved in the Department of Energy's ongoing Solar
Technology Transfer Program. This program is to facilitate
the early transfer of solar technology, in part, through pro-
viding potential users of solar energy with information on
technical and economic feasibility,. Government incentives,
and consumer protection.   In this program, the laboratories,
together with the Department of Energy's Chicago Operations
Office, provide support type functions to a network com-
prising six regions located throughout the country. Such
functions include education and training; conduct of work-
shops, seminars, and conferences: preparation and display
of exhibits and other information dissemination activities;
and work with individuals and groups, sucl as universities,


                                 7
ENCLOSURE I                                        ENCLOSURE I


                                                      and
industry-related trade and professional associntions,
regional. State, and local Gov.rnment entities.

     The capabilities of the multiprogram laboratories were
                                                     of the
also recognized by ERDA in its December 1975 report purpose  of
Field and Laboratory Utilization Study  Group.  The
that study was to evaluate the management practices  inherited
                                                            that
by ER3A from other organizations and make recommendations
                                     existing field and lab-
might contribute to the best use of ERDA's
oratory resources in accomplishing         mission. The Study
Group concluded that the multiprogram laboratories' capabil-
ities in solar energy and other nonnuclear areas warranted
giving them major mission assignment" in such areas. The
pertinent section ,f the Study Group's report is quoted
below:

     "With the change in the Atomic Energy Act in
     1972, the multi-program laboratories were
     strongly encouraged to enter into AEC-supported
     work in the non-nuclear energy area. Their
     achievements tc date, as exemplified by progress
     in geothermal energy, in situ coal gasification,
     solar thermal energy, analysis of energy systems,
     and applications of high technology developments
     such as super-conductivity to energy have been
     impressive for the efforts inves.ted.  The major
     activities of the multi-program  laboratories
     continue to be in nuclear-related research andof
     development and in long-range research, both
     which are important and are statutory respon-
     sibilities of ERDA. Their skills and disciplines,
     as well as some related experience, can be directly
     applied to the non-nuclear energy-related challenges.
     The flexibility inherent in a Government-owned,
     contractor-operated operation, with a broad tech-
      nology base, gives the laboratories the ability
      to marshall broad technical project teams to
      concentrate on specific conplex scientific and
      technological problem areas. The laboratories,
      therefore, should be assigned major missions in
      non-nuclear areas."

      In our report on SERI, it was not our intent to portray
 the laboratories as having in place all of the prerequisites
                                                        all of
 (e.g., staff, equipment, and facilities) for handlingbelieve,
 SZRI's immediate and possible future functions.  We
 however, that by building on the research expertise, manage-
 ment structure, and facilities existing at the laboratories,
 ERDA could have brought SERI into being at an earlier date.


                                8
ENCLOSURE I                                       ENCLOSURE I


5. While there are many important factors which are not
adequately defined at the present time about SERI, this does
not in any way limit the importance -r require a reevaluation
of SERI.

     Certainly, our report did not suggest that the many
unknowns about SERI limit the importance of the purposes it
was designed to serve. We pointed out, however, that substan-
tial changes in the organization, management, and content of
the Federal solar energy RD&D efforts have occurred during
the intervening years since SERI's authorization and that, in
light of these changed circumstances, the need for creating
SERI may be called into question. Accordingly, w- stated in
the report that this need should be reexamined before SERI
becomes a viable operating entity.
     We believed it appropriate to advise the Congress that
there are a number of unknowns about the SERI effort and
that the Congress may wish to consider them in light of the
requested funding levels for SERI and the regional SEPR net-
work. In this connection, we made two suggestions concerning
these unknowns. The first dealt only with the regional SERI
network. We pointed out that because of thle current unavail-
ability of information and the rather arbitrary justification
for establishing such a network, the Congress should reject
any amendment or proposal that would have the effect of
authorizing and funding a regional SERI network until the
need for and composition of such a network are adequately
demonstrated.
     Our second suggestion dealt with the need for the
Congress to be more fully informed concerning SERI nd the
regional SERI network. We suggested that
    "* * * the Congress should request ERDA or the
    Department of Energy to submit to the appro-
    priate legislative committees of the Congress,
    a comprehensive report setting forth the total
    estimated cost, organizational structure, manage-
    ment interrelationships, and scope of work for
    both SERI and, to the extent warranted, the
    regional SERI network.'




                             9
ENCLOSURE II                                         ENCLOCURE II




                    WCnifc2b Z£alcs
                                  * ?enas
                        WMWPMTON. DC.   Oi"

                      September 23, 1977



 Tmle Honorable Elmer B. Staats
 Comptroller Genera'. of the United States
 General Accounting Office
 441 G Street
 Washington, DC 20548
 Dear Mr. Staats:
      We take issue with several of the conclusions of a
 recent Government Accounting Office (GAO) report on the
 Solar Energy Research Intitute (SERI). This report,
 prepared At the request of Rapresentative Mike McCormack of
 the House Science and Technology Cnmmittee on September 9 of
 this year, is overly siEplistic in its analysis of the
 issues relating to SERI and includes significant errors of
 fact and judgement which we would like to call to your
 attention.
         In its recitation of the legislative history surround-
  ing the evolution of SERI, the GAO report asserts that an
  amendment which would require the allocation of 80% of
  SEI'sa appropriation to the Institute's regional network was
  adopted by the Senate in June of this year during its
  deliberations on the ERDA authorization bill. This is
  wholly inaccurate. Senator Bart's remarks in the June 27,
   19'17. Congressional Record (p. S 10815) clarify the intent
  of the Senate in doptngthe umphrey amendment to the ERDA
   authorization. Senator Church, the Floor Manager of this
   legislation, agreed only to making SERIa separate line item
   in the PRDA budget. -I--his response to a' written inquiry by
   Senators Hart and hskell, he indicated shat the Senate
   Energy and Natural Resources Coumittre's acceptance of the
   Humphrey amendment did not comit the Co=ittee to the
   concept of providing a Mied percentage of SERI'o funding
   for the Institute's regional network. This is indicated in
   the text of Senator Hart's statement.
       The GAO report also suggests that the creation of the
  Energy Research and Development Administration and,   subs-
  quently, the new Department of Energy have eliminated the
  .need for SERI through consolidation of previously dispersed
   Federal solar research and development efforts.



                                  10
ENCLOSURE II                                         ENCLOSURE II


                            -2-




      Although the level of funding for solar energy has
 increased significantly since 1974, researc-., development,
 deaonstration and commercialization efforts in this area
 have remained fragmented. No clear lines separate ERDA's
 and YEA's responsibilities in the development of various
 solar tchnologies. In the new Departmint
 least three assistnt secretaries will ;hareof responsibility
                                                Energy, at
 for solar technologies, with no individual or entity devoted
 specifically-to solar energy or to exercising integrated
 program control over Federal efforts in this area.
      Congssional itet     regarding the development of
 solar energy is clear: our efforts are to be accelerated
 so that this important alternative resource may provide
                                                         a
 aignificant percentage of our future energy ner ts. To
 accomplish its aggressive goalS for solar, Congress man-
 dated th,. creation of a single, integrated, highly visible.
 semn.-au.'ono=ons and adequately financed Federal
 energy rasear.h institute. Clearly, the foundingsolar
                                                    premises
 for SERI remain *t valid today as at the Institute's
 inceptirmn.
      The GAO report asserts that many of the
 development functions projectud for SERI couldresearch  and
                                                 be adequrteay
 performed at existing laboratories, and that ERDA did not
 give due consideration to the option of placing SERI at
 of these facilities. Again, it is evident that the GAO one
                                                           has
 failed in its analysis to gauge the degree of Conqressiontal
 commiitent to SERZ   as an instrument to hasten the realization
 of solar energy.
      WASA's Jet PropulRion Laboratory (JPL) and ERDA's
 Sandia Laboratory will receive 85% of the $75 million
 will                                                  ERDA
      devote to solar research and development   this year.
  .rwever,solar *neruy~. comprises only a small part of the
 functions presently perforned at the JPL and Sandia.    The
 National Academy of Sciences (NAS), which considered the
 possibility of placing SERI in an existing research facility
 as part of a comprehensive set of recommendation3 to ERD.. on
 SERI, stated that a national solar program -. . . needs an
 institution *combininganalysis with experimental science
 and engineering.' Additionally, the NAS report envisioned
 a SERI facility which would conduct workshops, symp=7sia
 other activities designed to increase public acceptance end
                                                          and
 utilization of sotlar energy, as well as analyze insttutional
 impediments to the development of Zolar and the ident!icea-
 tion of incentives for co=nunities and industries that will
 enhance the economic attractiveness of this aiernative



                                  11
ENCLOSURE II                                            ENCLOSURE II


                                3




energy' resource. Existing Federl i research laboratories
are not geared to perform these functions, which are
essential to the early tealiza+.ion of solar energy.
          Finally, we agree that many important factors, such
as the total cost for SE~R and the regional SERI network,
their respective work assignments and program responsi-
bilities, organi..ational structure, and management inter-
relationships,' are not adequately defined it the present
time. However, we do not believe that this in any way
Limits the importance or requires re-evaluation of SERI.
We believe that ongoing dialogue between Congress, SERI
 and the Department of Energy and, where appropriate,
clarifying legislation, should help more clearly to define
 and enhance SERI's role in solar rsstrch, development,
 demonstration and commercialization.
      Our greatest concern is that this GAO report has,
 through failure to appreciate the scope and magnitude
 of the responsibl .ities assigned to SERI by Congress,
 unjustifiably tarnished the public image of the Institute
 and unnecessarily confused the role it is to play in the
 development of solar to meet our future energy needs.
 Consequently, we request that the GAO reassess its
 recomnendations on SERI in light of the arguments presented
  here.
           Thank you for your kind assistance.
                                    Sincere   ,




  Flo,&     k.   Hgassei                            n
                                                    Timothy     . Ni-J:

  U.S.S/                             ..   11.C.     1




                                     12