August 2010 - Michigan Energy Forum - Amy Butler


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Amy Butler presents: Michigan's Energy Future Today - 'Focus on Energy Efficiency'.

Join the Michigan Energy Forum's discussion of Residential Energy Efficiency: A 360 Degree Perspective. The panel will represent the issue from the view of the contractor, utility, government, non-profits and homeowners. The panel includes individuals who have undertaken residential energy efficiency measures first hand and can speak from experience.

Some of the questions we will answer include: What are the opportunities for entrepreneurs in this emerging market? What are the typical energy efficiency measures that homeowners should consider? What is the process a homeowner follows to pursue energy efficiency improvements? What financial incentives are available to homeowners and contractors? What are the objectives of the utilities relative to their energy optimization programs? What are the goals of state and local government relative to energy efficiency?

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  • KEY POINT #1:MICHIGAN HAS A HUGE ENERGY PROBLEM • Michigan uses a lot of energy – Total cost $22 billion per year in 2000 By 2008, had increased to $37 billion!!! – 9 th highest cost burden in the nation • Michigan is almost totally dependent on fuels imported from other states and countries We import: – 100% of the coal and uranium we use – 99% of oil & petroleum products – 70% of the natural gas COST OF MICHIGAN‟S ENERGY IMPORTS • Before the new „high energy cost‟ era (circa 2000), roughly $12 billion per year was leaving Michigan to pay for fuel imports • At 2008 market prices, this dollar outflow was over $24 billion per year- THIS IS A HUGE ECONOMIC DRAIN ON OUR STATE ECONOMY! In 2007 Total Statewide Energy Bill estimated at $37 billion: Petroleum accounts for more than half of total expenditures (56%), natural gas accounted for 18 percent, electricity 25 percent and 1 percent was spent on industrial coal, biomass and others. About 30 cents of every dollar Michigan spends on energy is retained within the State’s economy, which means about 70 cents of every dollar goes to other states and nations to pay for the petroleum, natural gas, coal and nuclear fuel the State imports.
  • FOR OUR OWN STATE POLICIES…MICHIGAN NEEDS TO EMPHASIZE: • Energy Efficiency • Michigan-based Renewable Energy As a matter of state policy, we should be trying to maximize the amount of energy efficiency resources we can acquire, … and minimize the amount of additional fuel imports we need
  • 12KEY POINT #3 It is much cheaper to save energy than it is to produce it. [We can save electricity for about one-third the cost of producing it through a new power plant … . With no carbon (CO2) emissions] Michigan Green Jobs Report found 23 % of jobs directly involved in generating or supporting a firm’s green related products or services were in improving energy efficiency. Local jobs and tend to pay well.
  • In the early 1990’s, Michigan was among the national leaders in utility efficiency programs. Our top utilities were spending 1 to 2% of revenues on energy efficiency Independent evaluations documented that the energy efficiency programs were very cost-effective (1.5 to 2.6 cents per kWh saved)…less than half the cost of new electric supply. The programs were very popular with the public Michigan’s utility energy efficiency programs were terminated in 1996, in the rush to utility deregulation [Many other states maintained their energy efficiency programs, and have realized hundreds of millions of dollars in utility cost savings.] PA 295 Corrected in 2008 when PA 295 was signed into law, requiring utility energy efficiency programs and setting annual energy savings requirements for electric and natural gas utilities. Cost Recovery - re-established utility EE programs in Michigan and authorized cost-recovery through a surcharge. [ Problem : charge is capped at 2% of revenues. Will need somewhat more in order to reach high savings levels.] Shareholder Incentives – PA 295 did create incentive mechanism for utilities that exceed savings goals. Decoupling – PA 295 allowed for gas utilities, did not address for electrics. [Status: MPSC has since approved decoupling for DTE and Consumers electric. Will be crucial in convincing utilities to achieve high EE savings levels.]
  • Complimented by the LIEEF fund, public service commission.
  • Appliance Rebate Program 9.6 million Complement and go beyond existing utility EO programs. Provide rebates for Energy Star appliances and some that exceed ENERGY STAR standards. Michigan Residential rebates Compliment to utility E. O. programs Launched February 10, 2010, updated August 1, 2010; is not retroactive.
  • Target homes and commercial buildings for energy efficiency retrofits in neighborhoods across the state Awarded $30 million by DOE per EECBG program Proposal submitted by Michigan Department of Energy, Labor & Economic Growth and Michigan SAVES on behalf of a collaborative group including the cities of Detroit and Grand Rapids and Southeast Michigan Regional Energy Office Pilot a well informed model program that will drive economies of scale and large-scale uptake of significant energy efficiency improvements across entire neighborhoods/communities Strengthen our existing MI Saves financing program to ensure a strong private sector market ready to invest in energy efficiency loans in Michigan and a deep pool of energy efficiency incentives and credit enhancements in perpetuity Create a critical mass of growing awareness about the benefits of energy efficiency and the means to achieve it in residential, commercial, industrial and public buildings Kick start an energy efficiency qualified contractor infrastructure that is strong and growing Develop an informed knowledge base about what drives uptake of energy efficiency improvements across numerous customer segments Develop and amplify nascent policy and voluntary programs in order to enhance their efficacy in driving consumer awareness and uptake
  • August 2010 - Michigan Energy Forum - Amy Butler

    1. 1. Michigan’s Energy Future Today ‘ Focus on Energy Efficiency’ Amy Butler [email_address] 517-335-2823
    2. 2. Michigan Has A Huge Energy Challenge <ul><li>Michigan Exports Dollars to Import Energy: </li></ul><ul><ul><li>100% coal </li></ul></ul><ul><ul><li>99% oil & petroleum prd </li></ul></ul><ul><ul><li>70% natural gas </li></ul></ul><ul><li>$24 Billion Leaves </li></ul><ul><li>Michigan Each Year </li></ul>
    3. 3. Effects On Households <ul><li>In 2002, the average household nationally spent about $3,000 on energy [half for transportation, half for home uses] </li></ul><ul><li>By 2006, that amount was up to $4,600 per year … an increase of over 50%, …. or $1,600 taken out of every household’s annual disposable income </li></ul>
    4. 4. Why Energy Efficiency? <ul><li>U.S. residents significantly under-invest in energy efficiency in our homes. </li></ul><ul><ul><li>Investing in net positive value measures alone could reduce U.S. residential energy consumption by 3.2 quadrillion btus (and an order of magnitude of 200 coal fired plants in one year) </li></ul></ul><ul><li>Promoting Energy efficiency is beneficial public policy </li></ul><ul><ul><li>Most cost effective way to meet future energy needs. </li></ul></ul><ul><ul><li>Upfront costs far less than generating additional electricity to meet demand. </li></ul></ul><ul><ul><li>Energy efficiency is low hanging fruit to reduce ghg emissions. </li></ul></ul><ul><ul><li>Energy efficiency increases productivity and has potential to put dollars back into circulation into the economy and creates a substantial number of local jobs. </li></ul></ul><ul><ul><li>Also serves to help reduce poverty through lowering utility bills of low income individuals. </li></ul></ul>Source: McKinsey & Company, Unlocking Energy Efficiency in the U.S. Economy (2009)
    5. 5. Michigan’s Progress in Energy Efficiency <ul><li>Energy Optimization Statute in 2008 PA 295 </li></ul><ul><li>ARRA – 400 million for state energy programs including: </li></ul><ul><ul><li>Weatherization Assistance Program </li></ul></ul><ul><ul><li>Appliance Rebates </li></ul></ul><ul><ul><li>State and local energy efficiency funding </li></ul></ul><ul><li>State of Michigan leading the way – Decreased electrical use in SOM buildings by 23% saving Michigan taxpayers over $60 million </li></ul><ul><li>Michigan Saves Financing Program </li></ul><ul><li>Improvement in Michigan building codes </li></ul>
    6. 6. Weatherization Assistance <ul><li>Weatherization Assistance Program + $243 million </li></ul><ul><li>Money flows through MI Department of Human Services </li></ul><ul><li>Distributed by the Community Action Agencies </li></ul><ul><li>Targeted to homes under 200% of poverty level </li></ul><ul><li>Low Income Energy Efficiency Fund </li></ul><ul><li>Energy Optimization Programs </li></ul><ul><li>Low Income Home Heating Assistance Program </li></ul><ul><li>Michigan State Housing Authority Assistance Programs </li></ul>
    7. 7. State Appliance Rebates <ul><li>What’s Included? </li></ul><ul><ul><li>Rebate: </li></ul></ul><ul><ul><ul><li>Between $25-$2,500 in rebates </li></ul></ul></ul><ul><ul><li>Expires: </li></ul></ul><ul><ul><ul><li>Started February 10, 2010 </li></ul></ul></ul><ul><ul><ul><li>2 nd Phase: August 1, 2010 </li></ul></ul></ul><ul><ul><ul><li>Ends when funds are exhausted </li></ul></ul></ul><ul><ul><li>Details: </li></ul></ul><ul><ul><ul><li>This program is NOT retroactive </li></ul></ul></ul><ul><ul><ul><li>Only Michigan residents are eligible </li></ul></ul></ul><ul><ul><ul><li>Only one rebate per product per household </li></ul></ul></ul><ul><ul><ul><li>Applicant must be REPLACING an appliance to be eligible </li></ul></ul></ul><ul><ul><ul><li>Call or go on-line to reserve rebate </li></ul></ul></ul><ul><ul><ul><li>Mail in application along with receipt </li></ul></ul></ul><ul><li>Purpose: </li></ul><ul><ul><li>To complement utility energy optimization rebates </li></ul></ul><ul><ul><li>To reach rural customers not typically serviced by utility companies </li></ul></ul><ul><ul><li>To push marketplace by having some standards higher than Energy Star </li></ul></ul>
    8. 8. Better Buildings For Michigan <ul><li>Two major components </li></ul><ul><ul><li>Residential Neighborhood Retrofit Program – 27 n eighborhood “sweeps” across Michigan </li></ul></ul><ul><ul><li>Detroit Commercial Centers Program - Focus on large institutional, commercial, and public buildings in three areas in urban Detroit </li></ul></ul><ul><li>Direct incentives for customers along with affordable loans through Michigan SAVES and other innovative financing options </li></ul><ul><li>Create a growing, sustainable market for deep energy efficiency building retrofits </li></ul>
    9. 9. State Appliance Rebates <ul><li>What’s Included? </li></ul><ul><ul><li>Rebate: </li></ul></ul><ul><ul><ul><li>Between $25-$2,500 in rebates </li></ul></ul></ul><ul><ul><li>Expires: </li></ul></ul><ul><ul><ul><li>Started February 10, 2010 </li></ul></ul></ul><ul><ul><ul><li>2 nd Phase: August 1, 2010 </li></ul></ul></ul><ul><ul><ul><li>Ends when funds are exhausted </li></ul></ul></ul><ul><ul><li>Details: </li></ul></ul><ul><ul><ul><li>This program is NOT retroactive </li></ul></ul></ul><ul><ul><ul><li>Only Michigan residents are eligible </li></ul></ul></ul><ul><ul><ul><li>Only one rebate per product per household </li></ul></ul></ul><ul><ul><ul><li>Applicant must be REPLACING an appliance to be eligible </li></ul></ul></ul><ul><ul><ul><li>Call or go on-line to reserve rebate </li></ul></ul></ul><ul><ul><ul><li>Mail in application along with receipt </li></ul></ul></ul><ul><li>Purpose: </li></ul><ul><ul><li>To complement utility energy optimization rebates </li></ul></ul><ul><ul><li>To reach rural customers not typically serviced by utility companies </li></ul></ul><ul><ul><li>To push marketplace by having some standards higher than Energy Star </li></ul></ul>
    10. 10. State Appliance Rebates Products to be Rebated Rebate Level ($) Dishwashers - ENERGY STAR $25 Dishwashers - CEE Tier 2 $50 Clothes Washers - CEE Tier 3 $50 Refrigerators - ENERGY STAR $50 Refrigerators - CEE Tier 3 $300 Propane Tankless Water Heaters EF>=.82 $300 Propane Storage Water Heaters EF>=.67 $300 Natural Gas Tankless Water Heaters EF>=.82 $300 Natural Gas Storage Water Heaters EF>=.67 $300 Propane Furnaces - AFUE 95% $500 Oil Furnaces - ENERGY STAR $500 Natural Gas Furnace - AFUE 95% $500 Propane Furnaces w/ ECM - AFUE 95% $650 Oil Furnaces w/ ECM - ENERGY STAR $650 Natural Gas Furnace w/ ECM - AFUE 95% $650 Solar Water Heaters ENERGY STAR 25%, max $2,500
    11. 11. To Apply for the State Appliance Rebate Program <ul><li>For refrigerators, dishwashers, & clothes washers </li></ul><ul><ul><li>Online: </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Phone: </li></ul></ul><ul><ul><li>1-866-621-8782 </li></ul></ul><ul><li>For furnaces and water heaters </li></ul><ul><ul><li>Online: </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li>Phone: </li></ul></ul><ul><ul><li>1-888-MICHNRG </li></ul></ul><ul><ul><li>(1-888-642-4674) </li></ul></ul>