THIS REPORT PRESENTS AN OVERVIEW FROM THE PERSPECTIVE OF THE PROJECT MANAGER. IT PROVIDES DATA ON THE PROJECT INITIATION, THE DEPARTMENT OF COMMUNITY AFFAIRS ORGANIZATION ACTIVITIES TO CARRY OUT THE DEMONSTRATION, THE PROBLEMS ENCOUNTERED, AND THE RESULTS ACHIEVED. BECAUSE SPECIFIC ENERGY CONSERVATION STRATEGIES WERE TO BE DEFINED IN THE COURSE OF THE PROJECT, THE PROGRAM DESIGN PROVIDED FOR THE DIRECT PARTICIPATION OF LOCAL GOVERNMENTS. THE STAFF'S INITIAL INVOLVEMENT WITH SIX MUNICIPALITIES FOCUSED ON COLLECTION AND ANALYSIS OF ENERGY CONSUMPTION DATA AND THE CHARACTERISTICS OF THE MUNICIPALITIES' ENERGY SYSTEMS. DATA GAPS FOR MEASURING SYSTEM EFFICIENCY WERE REVEALED AS WAS A LACK OF TECHNICAL SKILLS FOR DETAILED ENERGY ANALYSIS AMONG THE MUNICIPAL STAFFS. RESEARCH ACTIVITY WAS CONCENTRATED IN AREAS OF GREATEST IMPACT ON THE MUNICIPAL OPERATING BUDGET. AN INTRODUCTORY TRAINING SEMINAR ACCOMPANIED THE ISSUANCE OF THE ENERGY MANAGEMENT IN MUNICIPAL BUILDINGS MANUAL, A MANUAL DOCUMENTING SPECIFIC ENERGY CONSERVATION MEASURES IN EACH OF THE FOLLOWING AREAS: (1) MUNICIPAL BUILDINGS, (2) MUNICIPAL VEHICLES, (3) STREET LIGHTING, AND (4) ZONING. THE PROJECT DEMONSTRATED AN EVIDENT NEED AND DEMAND AMONG MUNICIPALITIES FOR TECHNICAL ASSISTANCE AT THE LEVEL OF BASIC PROGRAM ORGANIZATION. A STATE ENERGY POLICY OFFICE HAS BEEN ESTABLISHED TO THIS END. TABULAR DATA ARE INCLUDED. (MRK)