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benefits of government-funded energy R&D. Unlike the retrospective study, this methodology could be used to evaluate program management and funding decisions on an ongoing basis. This project is expected to be completed with the issuance of an NRC report in early 2005. At the request of the House Appropriations Subcommittee on Interior and Related Agencies, this letter report3 is being provided before the conclusion of the study. It satisfies the subcommittee’s request, transmitted to the NRC on July 21, 2004, to “provide an overview of the study committee’s methodological approach; how that approach differs from the retrospective study delineated in the Academies’ report …; and what is expected to be contained in the committee's final report.”

This letter report begins with a summary of the context of the prospective benefits study. It then discusses the main characteristics of the prospective methodology. The final report is discussed in the section “Contents of the Phase 1 Final Report,” below.


Recognizing the importance of technological innovation, the Department of Energy, the Office of Management and Budget (OMB), and Congressional appropriations committees have given increasing attention to understanding the effectiveness of federal funding of applied energy R&D. The conference report of the Consolidated Appropriations Act4 for fiscal year (FY) 2000 requested that the NRC assess the benefits and costs of DOE’s R&D programs in fossil energy and energy efficiency5—a task agreed upon by the House and Senate subcommittees with jurisdiction over the funding of these programs.

Completed in 2001, the retrospective study conducted by the NRC reported that, in the aggregate, the benefits of federal energy R&D exceeded the costs, but it observed that the DOE portfolio included both striking successes and expensive failures. As important, the NRC study noted that the methodologies by which DOE had calculated the benefits of its programs varied considerably, thus making comparisons of program benefits difficult. The committee that carried out the retrospective study, the Committee on Benefits of DOE R&D on Energy Efficiency and Fossil Energy, developed and applied its own uniform methodology for assessing the benefits of


This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the NRC’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report: William Agnew, NAE, General Motors (retired); Joel Darmstadter, Resources for the Future; Clark W. Gellings, Electric Power Research Institute; Lester Lave, IOM, Carnegie Mellon University; Burton Richter, NAS, Stanford University; and Robert Socolow, Princeton University.

Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by John Ahearne, NAE, Sigma Xi, and Larry Papay, NAE, Science Applications International Corporation (retired). Appointed by the NRC, they were responsible for making sure that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.


House Report 106-479. November 18, 1999. Washington D.C.: U.S. Government Printing Office, p. 493.


The fossil energy R&D programs are administered by the Office of Fossil Energy and the energy efficiency programs by the Office of Energy Efficiency and Renewable Energy.

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