Joe Loper, Lowell Ungar, Brad Penney<br />Alliance to Save Energy<br />June 29, 2009<br />Energy Efficiency in Energy Legi...
Federal Energy and Climate Legislation<br />Brad Penney<br />Director of Government Relations<br />June 29, 2009<br />
Federal Energy and Climate Legislation - Overview<br />In the House<br />ACES (The American Clean Energy and Security Act,...
Ad in Roll Call, The Hill, Politico<br />Dear Members of Congress:<br />As businesses and organizations that employ thousa...
Climate Outlook in Senate<br />Senate EPW Chairwoman Boxer hopes to introduce a cap-and-trade measure in July and mark it ...
EE Highlights in ACES<br />Cap on carbon: 83% reduction in covered emissions by 2050 (85% of emissions are covered)<br />B...
EE Highlights in ACELA<br /><ul><li>Renewable electricity standard of 15% by 2021
4% may come from efficiency if governor petitions
Improvements in model building energy codes
30% by 2010
50% by 2016
Energy Efficiency in Manufacturing
Funding for research and implementation of EE technologies, expansion of IACs
Clean energy investment fund
Loans, loan guarantees, etc., for commercialization of clean energy technologies</li></li></ul><li>EE Highlights in ACELA<...
for portable lighting fixtures, commercial furnaces and reflector lamps; new appliance test procedures
State building retrofit grant program
Grants for retrofits of residential and commercial buildings</li></ul>Voluntary building energy performance information pr...
The Waxman-Markey Bill: A Giant Leap Forward (or Sideways)<br />Joe Loper<br />Alliance to Save Energy<br />June 29, 2009<...
Overview<br />Meaningful cap <br />Significant and reasonable cost control measures<br />Substantial energy efficiency pro...
Cap is the crown jewel<br />85% of GHG emissions covered by cap<br />Other emissions TBD<br />Covered emissions reduced 83...
Cap creates a carbon price <br />Allowance price<br />$10/ton/CO2e rising to $62/ton in 2050<br />Energy price increases v...
Impact on Energy Demand <br />Flattens overall demand thru 2050<br />2050 demand 12% below BAU<br />Nuclear a big winner<b...
Controlling Cost<br />Different types of hurt<br />all -- minimize overall cost <br />some – ease transition<br />for a wh...
Allowance allocations<br />Allocations do not undermine the cap<br />Major concern about allocations is fairness (not emis...
Complementary EE Funding<br />3-6% of allowance value<br />$85 to $174b over 2012-2050<br />
Impact on Electric Demand<br />More than 1/3 of 2030 demand reduction from policy/program<br />EE policy/program impact sm...
Allowance Allocations by Program<br />
State & Local Governments<br /><ul><li>DOE to establish “State Energy & Environmental Development” (SEED) Accounts for EE/...
5.2% of total allowance value SEED
Annual funding for EE = $0.8b to $3b
Largest source of EE funding</li></li></ul><li>Natural Gas Utilities <br />Natural gas utilities receive 7.7% of total all...
Building Code Incentives<br />0.5% of allowance value states for code development and enforcement<br />$380 million annual...
Home Heating Oil, Propane and Kerosene<br />To states based on residential/commercial  consumption of home heating oil<br ...
Renewable Electricity Standard<br />$25/MWh in lieu charge<br />For states to promote EE and RE<br />Perhaps hundreds of m...
Clean Energy Innovation Centers<br />DOE to 8 Clean Energy Innovation Centers <br />one will likely focus on energy-effici...
Other<br />(allocations and authorizations)<br />Electric and plug-in hybrid vehicles;<br />Smart Grid;<br />Transportatio...
That’s a lot of offsets! <br />Up to 2 billion tons annually (One-third to two-thirds of total allowances) <br />EE may no...
Make them real<br />If offsets are not real<br />Cap is undermined <br />Cost/ton reduction is higher, not lower <br />EMV...
Muting the End-use Price Signal<br />Transfers burdens to others <br />Increases overall cost of abatement<br />Utility fr...
EE Policy and Program Challenges<br />Address real market barriers<br />Imperfect information, externality costs, split in...
Joe Loper<br />Senior VP, Policy and Research<br />Alliance to Save Energy<br />202-530-2223<br />jloper@ase.org<br />
Strategic reserve<br />Reduces effective stringency<br />Pressure relief varies<br />$28/ton plus for first 3 years<br />6...
Energy Efficiency Policies as a Carbon Cap Complement<br />June 29, 2009<br />Lowell Ungar<br />Director of Policy<br />
Goals<br />Policies will no longer save more energy.  Instead they will—<br />Reduce cost of meeting carbon cap by<br />Ad...
Efficiency Policies<br />Buildings: <br /><ul><li>Building codes
Building labels
Appliance standards + labels
Federal energy use + ESPCs</li></ul>Utilities: <br /><ul><li>Efficiency + renewable standard
Smart grid + transmission</li></ul>Industry<br />Transportation<br /><ul><li>Vehicle emissions standards
Reducing driving through land use planning + transit</li></li></ul><li>Codes and Standards<br />Address major market barri...
Building Energy Codes: Development<br />Senate + House:<br /><ul><li>Energy savings targets:
30%, 50%, and beyond
ICC and ASHRAE get first chance, with DOE help
DOE sets if they don’t</li></li></ul><li>Building Energy Codes: Targets<br />
Building Energy Codes: Adoption<br />
Building Energy Codes: Compliance<br />
Appliances and Lighting: New Standards<br />
Appliances and Lighting: Standards Process<br />
Efficiency Information<br />Make price signal more effective by addressing information barriers<br />Building efficiency l...
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Energy Efficiency in Energy Legislation, Waxman-Markey, and Stimulus: Update and Overview

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  • In addition to codes preemption.Also Senate: deadline for response to petitions, study on compliance and other, Energy Star provisions.
  • In addition to codes preemption.Also Senate: deadline for response to petitions, study on compliance and other, Energy Star provisions.
  • Light duty already accomplished. VMT sets stage for transportation bill. No money for VMT reduction.
  • Ones funded by allowances matter most
  • Energy Efficiency in Energy Legislation, Waxman-Markey, and Stimulus: Update and Overview

    1. 1. Joe Loper, Lowell Ungar, Brad Penney<br />Alliance to Save Energy<br />June 29, 2009<br />Energy Efficiency in Energy Legislation, Waxman-Markey, and Stimulus:Update and Overview <br />
    2. 2. Federal Energy and Climate Legislation<br />Brad Penney<br />Director of Government Relations<br />June 29, 2009<br />
    3. 3. Federal Energy and Climate Legislation - Overview<br />In the House<br />ACES (The American Clean Energy and Security Act, or Waxman-Markey) reported by E&C on May 21st ; <br />Status: Narrowly passed the House on Friday by a vote of 219 to 212. <br />In the Senate<br />ACELA (The American Clean Energy Leadership Act)<br />Scope: Energy<br /><ul><li> EPW working on a climate section, to be integrated</li></ul>Status: Approved by ENR on June 27th<br />
    4. 4. Ad in Roll Call, The Hill, Politico<br />Dear Members of Congress:<br />As businesses and organizations that employ thousands of workers in the<br />clean energy industry, we urge Congress to move and improve the<br />American Clean Energy and Security Act. <br />A strong clean energy policy that promotes innovation and deployment in<br />energy efficiency and renewable energy can help reduce energy costs for<br />consumers and provide the basis for sustained economic growth. <br />1.  Energy efficiency generates $3 in economic benefits for each $1<br />invested, producing jobs in every Congressional district in America; <br />2.  Renewable energy will stabilize energy costs as we reduce our<br />dependence on fossil fuels and use sources of energy that have no<br />or low cost such as wind, sun, water, geo-thermal and biomass;<br />3.  Taken together, energy efficiency and renewable energy can reduce the<br />costs of achieving our climate goals by lowering overall energy demand<br />and the costs of generating power – saving Americans money on their<br />utility bills while cutting greenhouse gas emissions. <br />Without a change in direction, the United States economy will<br />continue to lose ground to other countries that are more<br />aggressively investing in clean energy technology. Strong clean<br />energy legislation can provide that framework and restore<br />American leadership in job creation and innovation. <br />We urge every Member of Congress to vote in favor of the American<br />Clean Energy and Security Act of 2009 now!<br />
    5. 5. Climate Outlook in Senate<br />Senate EPW Chairwoman Boxer hopes to introduce a cap-and-trade measure in July and mark it up before August recess (week of Aug. 3?)<br />Other committees have tentatively agreed to be through with their amendments by Sept. 18<br />Majority Leader Reid wants to bring comprehensive bill to the floor in the fall; we are hearing October for floor action<br />Boxer released climate principles in February<br />House bill will be the framework <br />
    6. 6. EE Highlights in ACES<br />Cap on carbon: 83% reduction in covered emissions by 2050 (85% of emissions are covered)<br />Building codes, building labels, appliance standards and labels<br />Renewable electricity standard of 20% by 2020 – a quarter may be met through EE, or 40% if governor requests<br />Vehicle emissions standards<br />Land use planning to reduce VMT<br />
    7. 7. EE Highlights in ACELA<br /><ul><li>Renewable electricity standard of 15% by 2021
    8. 8. 4% may come from efficiency if governor petitions
    9. 9. Improvements in model building energy codes
    10. 10. 30% by 2010
    11. 11. 50% by 2016
    12. 12. Energy Efficiency in Manufacturing
    13. 13. Funding for research and implementation of EE technologies, expansion of IACs
    14. 14. Clean energy investment fund
    15. 15. Loans, loan guarantees, etc., for commercialization of clean energy technologies</li></li></ul><li>EE Highlights in ACELA<br /><ul><li>New energy efficiency standards
    16. 16. for portable lighting fixtures, commercial furnaces and reflector lamps; new appliance test procedures
    17. 17. State building retrofit grant program
    18. 18. Grants for retrofits of residential and commercial buildings</li></ul>Voluntary building energy performance information program<br />To display relative energy performance; raise public awareness<br />Residential High-Performance Zero-Net-Energy Buildings Initiative<br />Goal to enable residential buildings without net emissions to be cost-effective by 2020<br />
    19. 19. The Waxman-Markey Bill: A Giant Leap Forward (or Sideways)<br />Joe Loper<br />Alliance to Save Energy<br />June 29, 2009<br />
    20. 20. Overview<br />Meaningful cap <br />Significant and reasonable cost control measures<br />Substantial energy efficiency program funding<br />At least two major concerns <br />
    21. 21. Cap is the crown jewel<br />85% of GHG emissions covered by cap<br />Other emissions TBD<br />Covered emissions reduced 83% in 2050<br />Cap will need defending<br />
    22. 22. Cap creates a carbon price <br />Allowance price<br />$10/ton/CO2e rising to $62/ton in 2050<br />Energy price increases vary widely<br />Across fuels and regions <br />Source: Alliance analysis based on HR 2454 and EPA Preliminary Analysis of the Waxman-Markey Discussion Draft, April 20, 2009<br />
    23. 23. Impact on Energy Demand <br />Flattens overall demand thru 2050<br />2050 demand 12% below BAU<br />Nuclear a big winner<br />Source: EPA Analysis of the Waxman-Markey Discussion Draft, June 23, 2009<br />
    24. 24. Controlling Cost<br />Different types of hurt<br />all -- minimize overall cost <br />some – ease transition<br />for a while -- avoid price shocks<br />Note trade-offs<br />Many measures to control cost<br />We like -- EE policies/programs<br />Of great concern in WM -- offsets, muting prices <br />
    25. 25. Allowance allocations<br />Allocations do not undermine the cap<br />Major concern about allocations is fairness (not emissions levels)<br />Allocations can reduce cost of abatement <br />If purchasing least cost abatement resource<br />Justified by market barriers<br />Including program cost<br />But can also raise overall abatement cost/price<br />If not purchasing the least cost abatement resource<br />If allowed to mute price signal – e.g., utility allowances<br />
    26. 26. Complementary EE Funding<br />3-6% of allowance value<br />$85 to $174b over 2012-2050<br />
    27. 27. Impact on Electric Demand<br />More than 1/3 of 2030 demand reduction from policy/program<br />EE policy/program impact small in 2050<br />EE policy/program do not affect overall NG demand <br />Unclear impact on NG generation<br />Source: EPA Analysis of the Waxman-Markey Discussion Draft, June 23, 2009<br />
    28. 28. Allowance Allocations by Program<br />
    29. 29. State & Local Governments<br /><ul><li>DOE to establish “State Energy & Environmental Development” (SEED) Accounts for EE/RE programs
    30. 30. 5.2% of total allowance value SEED
    31. 31. Annual funding for EE = $0.8b to $3b
    32. 32. Largest source of EE funding</li></li></ul><li>Natural Gas Utilities <br />Natural gas utilities receive 7.7% of total allowance value from 2016 --2029<br />Must use one-third for energy efficiency<br />$1.9 billion per year for 2016 -- 2029;<br />Alliance recommends same for electric utilities <br />
    33. 33. Building Code Incentives<br />0.5% of allowance value states for code development and enforcement<br />$380 million annually <br />$14.8 billion over the life of the bill<br />
    34. 34. Home Heating Oil, Propane and Kerosene<br />To states based on residential/commercial consumption of home heating oil<br />1.4% of total allowance value 2012 -- 2029<br />One-half for energy efficiency<br />$465 million annually for EE<br />
    35. 35. Renewable Electricity Standard<br />$25/MWh in lieu charge<br />For states to promote EE and RE<br />Perhaps hundreds of millions for EE annually<br />
    36. 36. Clean Energy Innovation Centers<br />DOE to 8 Clean Energy Innovation Centers <br />one will likely focus on energy-efficient building systems and designs, per FY 2010 budget request<br />Centers to receive 0.45% of emission allowances, distributed on a competitive basis (1/8 to EE?)<br />1.05% of emissions allowances go to ARPA-E( 1/8 to EE?)<br />$142 million annually for EE R&D (?) <br />
    37. 37. Other<br />(allocations and authorizations)<br />Electric and plug-in hybrid vehicles;<br />Smart Grid;<br />Transportation Planning;<br />Industrial energy efficiency and waste heat recovery;<br />Low-income energy efficiency<br />
    38. 38. That’s a lot of offsets! <br />Up to 2 billion tons annually (One-third to two-thirds of total allowances) <br />EE may not fare so well<br />1/5 of CDM credits is EE<br />But 90% is power generation<br />Source: Alliance to Save Energy analysis based on HR 2454<br />
    39. 39. Make them real<br />If offsets are not real<br />Cap is undermined <br />Cost/ton reduction is higher, not lower <br />EMV critical<br />WM addresses – EPA, advisory board, random audits<br />Hard decisions deferred<br />Discourage other countries’ policies? <br />BAU policies reduce “additional” potential <br />WM addresses -- int’l clean energy fund, sectoral offsets, int’l reserve allowances<br />
    40. 40. Muting the End-use Price Signal<br />Transfers burdens to others <br />Increases overall cost of abatement<br />Utility free allowances<br />Allocation formula only partially linked to emissions and… <br />rebates cannot be “solely based” on electric consumption, but……<br />if utilities simply surrender free allowances, could be perfect muting of price signal<br />
    41. 41. EE Policy and Program Challenges<br />Address real market barriers<br />Imperfect information, externality costs, split incentives<br />Inelastic demand is not a market barrier<br />Deploying EE at large scale<br />No more CFLs!<br />EMV<br />RES, programs <br />
    42. 42. Joe Loper<br />Senior VP, Policy and Research<br />Alliance to Save Energy<br />202-530-2223<br />jloper@ase.org<br />
    43. 43. Strategic reserve<br />Reduces effective stringency<br />Pressure relief varies<br />$28/ton plus for first 3 years<br />60% above rolling 3-year average most other years<br />Limits<br />10% of total allowances<br />20% of a single entity’s allowances<br />Not a problem<br />
    44. 44. Energy Efficiency Policies as a Carbon Cap Complement<br />June 29, 2009<br />Lowell Ungar<br />Director of Policy<br />
    45. 45. Goals<br />Policies will no longer save more energy. Instead they will—<br />Reduce cost of meeting carbon cap by<br />Addressing market barriers, especially among energy end-users<br />
    46. 46. Efficiency Policies<br />Buildings: <br /><ul><li>Building codes
    47. 47. Building labels
    48. 48. Appliance standards + labels
    49. 49. Federal energy use + ESPCs</li></ul>Utilities: <br /><ul><li>Efficiency + renewable standard
    50. 50. Smart grid + transmission</li></ul>Industry<br />Transportation<br /><ul><li>Vehicle emissions standards
    51. 51. Reducing driving through land use planning + transit</li></li></ul><li>Codes and Standards<br />Address major market barriers<br />Split incentives<br />Decision/transaction costs<br />Higher levels may be justified by carbon price<br />
    52. 52. Building Energy Codes: Development<br />Senate + House:<br /><ul><li>Energy savings targets:
    53. 53. 30%, 50%, and beyond
    54. 54. ICC and ASHRAE get first chance, with DOE help
    55. 55. DOE sets if they don’t</li></li></ul><li>Building Energy Codes: Targets<br />
    56. 56. Building Energy Codes: Adoption<br />
    57. 57. Building Energy Codes: Compliance<br />
    58. 58. Appliances and Lighting: New Standards<br />
    59. 59. Appliances and Lighting: Standards Process<br />
    60. 60. Efficiency Information<br />Make price signal more effective by addressing information barriers<br />Building efficiency labels<br />Improvements to Energy Star<br />
    61. 61. Building Efficiency Labels<br />House and Senate:<br />EPA to establish model ratings and labels<br /><ul><li>Actual performance and designed performance ratings
    62. 62. Build up EIA surveys (CBECS, RECS) as basis</li></ul>Implementation:<br /><ul><li>EPA to work with states andlocal governments</li></ul>House: lists disclosure methods, limited to new construction<br />
    63. 63. Appliances and Lighting: Energy Star Label<br />
    64. 64. Utilities: Efficiency Programs<br />Standard for savings from programs<br />Efficiency as resource in combined standard<br />Allowance value to fund programs<br />Use of allowances to utilities<br />Use of allowances to states, local govt’s<br />
    65. 65. Utilities: Efficiency and Renewable Electricity Standard<br />Efficiency without bill likely to reach 5%<br />
    66. 66. Transportation<br />House only:<br />Light duty vehicle emission standards <br />Emission standards for trucks, trains, ships, and airplanes<br />Require states to set emissions reduction goals and large MPOs to set plans that meet them. <br />
    67. 67. Authorizations<br />Building energy code implementation<br />Building retrofits<br />Building labeling programs<br />Manufactured home replacement<br />“Best-in-class” appliance program<br />Motor rebates<br />Waste heat recovery grants<br />Vehicle electrification and plug-in vehicle programs<br />SmartWay heavy duty vehicle program<br />ARPA-E and Clean Energy Innovation Centers<br />Low Income energy efficiency program<br />
    68. 68. Savings Estimates<br />Potential energy and carbon savings (toward meeting cap) from key policies in 2030 (ACEEE):<br />
    69. 69. Thank You!<br />Lowell Ungar <br />Alliance to Save Energy<br />Phone: (202) 857-0666<br />Email: lungar@ase.org<br />Website: www.ase.org<br />
    70. 70. Stimulus Overview and Update<br />June 29, 2009<br />Brad Penney<br />Director of Government Relations<br />
    71. 71. $65B Related to Energy Efficiency<br />(Millions of US Dollars)<br />
    72. 72. Funding Rollout<br />Energy Funds Slow to Unroll:<br />1% of FY2009 awards<br />90% of FY2009 awards go to health, transportation and education<br />Funding allotted in segments:<br />For SEP & WAP:<br />10% on initial app approval<br />40% on comprehensive app approval <br />Remaining 50% contingent on demonstrated success<br />Projected timing of all funds made available to states and localities. <br />FY09 and FY12 funding for states and localities<br />http://www.recovery.gov/sites/default/files/GAO-09-580+Recovery+Act.pdf<br />
    73. 73. Program Timeline<br />Sept. 30: All funds to be obligated<br />March 31: All funds to be spent<br />Initial Apps Due – 10% of funding<br />Progress reports quarterly through-<br />out stimulus period<br />Estimated time for DOE Approval <br />Comp Apps Due – 40% of funding<br />18 months after award: Funds to be obligated<br />State Apps due<br />36 months after award: Funds to be Spent<br />Estimated time for DOE Approval<br />Local Apps due<br />Sept. 30: All funds to be obligated<br />March 31: All funds to be spent<br />Progress reports quarterly through-<br />out stimulus period<br />Estimated time for DOE Approval <br />Initial Apps Due – 10% of funding<br />Comp Apps Due - 40% of funding<br />Administration Application Review<br />www.ase.org/stimulusresources<br />
    74. 74. Core Energy FundingObligation & Spending to date<br />SEP<br />Appropriated: $3.1 billion<br />Obligated: $301.6 million<br />Spent: $9.4 million<br />EECBG <br />Appropriated: $3.2 billion<br />Obligated: $0<br />WAP<br />Appropriated: $5 billion<br />Obligated: $553.4 million<br />Spent: $8.3 million<br />Green Jobs<br />Appropriated: $500 million<br />Obligated: $0<br />Smart Grid Investment Grant Program<br />Appropriated: $4.5 billion<br />Obligated: $0<br />Smart Grid Demonstration Projects<br />Appropriated: $615 million<br />Awarded: $4.7 million<br />Spent: $0<br />HUD’s EE Public Housing Capital Funds<br />Appropriated: $4 billion<br />Awarded: $0<br />HUD’s Green Retrofit Program<br />Appropriated $250 million<br />Obligated: $0<br />$890 million of $18 billion awarded (.5%)<br />
    75. 75. Uses of Funds:State Energy Programs Plans<br />Plans Due May 12: ~15 SEP Plans Released<br />Available through ASE Stimulus Resources Page, NAESCO Recovery.gov when they are approved by DOE<br />Some more complete than others<br />Trends:<br />Building Energy Efficiency Programs <br />State, industrial, residential, performance contracting<br />Energy Efficiency Financing Mechanisms<br />Revolving Loans, Grants, Rebates<br />Green Job Training Programs<br />Technical installation, auditing, energy assessments<br />Transportation<br />Hybrid vehicles, Smart Traffic Management systems<br />
    76. 76. State Energy Programs (cont.)<br />Updated on our stimulus resources page: www.ase.org/stimulusresources<br />
    77. 77. Oversight and Advocacy<br />Immense problems of implementation<br />size and complexity; <br />challenge of administration within limited time frame; <br />political appointees not in place; <br />demands on career appointees<br />Credibility of future energy efficiency initiatives depends on competent and effective implementation<br />Problem of EM & V: How do we measure savings? <br />Continuity of Programs: What happens when the funding goes away? <br />
    78. 78. Energy Efficiency Coalition<br />100+ energy efficiency, environmental, public interest organizations and corporations<br />Focus on ARRA formation, passage, implementation. Now also works on other legislation<br />Coalition Activities:<br />SEP – Utility Rate Reform<br />SEP - Disclosure of Plans<br />WAP – Davis Bacon Issues<br />State-level Collaboration needed<br />SEP, WAP, & EECBG Best practices, knowledge sharing<br />
    79. 79. For More Information…<br />Brad Penney<br />Director of Government Relations<br />The Alliance to Save Energy<br />bpenney@ase.org<br />(202) 530-3348<br />

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