Kateri Callahan President, Alliance to Save Energy States awaiting stimulus funds will be pleased to know that when it comes to funding energy efficiency programs, their dollars will go far. Drastically reduced energy consumption and immediate job growth are just some of the benefits that effective policies and programs can bring, particularly to the Appalachian region, which has the highest energy consumption in the country. Kateri Callahan presented these findings to the annual Charlotte Regional Partnership Investors Board in Charlotte, N.C., where already progressive energy efficiency policies and programs are taking root. Callahan also briefed the audience of investors and board members on the climate and energy bills moving through Congress.

1. Energy Efficiency – Good for the World’s Economy; Good for the Nation’s Economy; Good for Yours! Presentation by Kateri Callahan, President Charlotte Regional Partnership Investors Forum July 29, 2009

2. Overview A Few Words About the Alliance Why Energy Efficiency? Why Now? Policy: Tapping the Full Potential of Energy Efficiency Regional/State Leadership: Building Green Economies One by One Forecast for the Future: Energy Efficiency as the Foundation of a New, Green Economy

4. Guided by a 37-Member, Elected Board of Directors

5. Led by Senator Mark Pryor (D-AR) and Jim Rogers, CEO of Duke Energy

6. Includes 9 Members of Congress – Bi-Cameral; Bi-Partisan

8. Involvement by businesses in all economic sectors

9. Initiatives underway in research, policy advocacy, education, technology deployment, and communications

10. Energy Efficiency: Faithful Friend Energy Efficiency has been powering the U.S. economy for over 30 years!

11. Enormous Savings Energy Efficiency AVOIDING roughly 2.5 billion tons of CO2 annually Saving roughly$400 billion annually

12. Why Now? Energy Use is a Global Climate Issue Source: Energy Information Administration

13. 18 18 Other renewables Other renewables Biomass Biomass 16 16 Hydro Hydro 14 14 Nuclear Nuclear Gas Gas 12 12 Oil Oil 10 10 Coal Coal billion tonnes of oil equivalent billion tonnes of oil equivalent 8 8 6 6 4 4 2 2 0 0 1980 1990 2000 2010 2020 2030 1980 1990 2000 2010 2020 2030 Why Now? Growing Energy Demand is Unsustainable Global demand grows by more than half over the next quarter of a century, with coal use rising most in absolute terms

14. Why Now? U.S. Growth in Energy Use Poses a National Security Threat

15. Why Now: Energy Efficiency is a Pocketbook Issue

16. Why Efficiency? Cheapest, Quickest, Cleanest…. Annual world-wide investment of $170 billion in energy efficiency through 2020 could: cut global growth in energy demand by ½! save $900 billion a year in avoided energy costs dramatically reduce greenhouse gas emissions Source: The McKinsey Global Institute

17. Why EE? Enormous Potential for Savings in ALL Sectors… Source: McKinsey Global Institute

18. Why Efficiency? Local Benefits

19. EE: Enormous Potential for Regional Job Growth… The same study reveals that cost-effective energy policies can positively impact the larger Appalachia economy, creating 77,378 jobs regionally.

20. The Challenge? Market Distortions Principal Agent or “Split Incentives” Home/Commercial builder versus buyer Landlord versus tenant Utility versus customer Transaction Costs Lack of information on life-cycle cost for products and/or paybacks for upgrades Lack of Investment in RD&D and EE Programs

21. How Do We Unlock the Potential of Energy Efficiency?

22. Five Tenants of Sound EE Public Policy Research, development and deployment (RD&D) Education and outreach Incentives and Financing Mechanisms Standards & Codes Government “Leadership by Example”

23. A Big Year for Energy Efficiency in Public Policy October 08 January 09 2008/2009 June July May May May Obama’s election platform American Recovery & Reinvestment Act (ARRA, or Stimulus Bill) President’s Fiscal Year 2010 budget NEW! American Clean Energy and Security Act (ACES) Ongoing appropriations in House and Senate climate & energy bills President’s new CAFÉ standards House PASSES ACES (6/26) DOE: new lighting standards

25. Net-zero energy buildings by 2030

26. Overhaul federal appliance standards

27. By 2014, reduce energy use in new federal buildings 45%; 25% in existing federal buildings

28. Flip incentives for utilities

29. Invest in a “smart grid”

30. Weatherize 1 million homes/year

31. Investment incentives for “livable cities”

32. Showed early commitment to large green energy component in the economic recovery billPresident Obama: Energy Efficiency Advocate

33. American Recovery & Reinvestment Act: $65B Related to Energy Efficiency Funding in Millions of US Dollars

35. Smart Grid ($4.5 bill)

36. DOE RD&D ($2.25 billion)

37. Incentives and Financing Tools

38. Extension of tax incentives

39. Codes & Standards

40. “Conditions” State funding on strong building codes

41. Education & Outreach

42. State Energy Star rebate programs ($300 million)

43. Government Leadership by Example

45. Core Energy FundingObligation & Spending to date SEP Appropriated: $3.1 billion Obligated: $301.6 million Spent: $9.4 million EECBG Appropriated: $3.2 billion Obligated: $0 WAP Appropriated: $5 billion Obligated: $553.4 million Spent: $8.3 million Green Jobs Appropriated: $500 million Obligated: $0 Smart Grid Investment Grant Program Appropriated: $4.5 billion Obligated: $0 Smart Grid Demonstration Projects Appropriated: $615 million Awarded: $4.7 million Spent: $0 HUD’s EE Public Housing Capital Funds Appropriated: $4 billion Awarded: $0 HUD’s Green Retrofit Program Appropriated $250 million Obligated: $0 $890 million of $18 billion awarded (.5%)

46. ARRA Funding for EE North Carolina: State Energy Program (SEP) Appropriated: $76 million Awarded: $30.4 million (June 25) Weatherization Assistance Appropriated: $132 million Obligated: $53 million (June 18th) Weatherization goal: 23,500 homes Energy Efficiency and Conservation Block Grants* Appropriated: $ 58 million South Carolina State Energy Program (SEP) Appropriated: $51 million Awarded: $20.2 million (June 25) Weatherization Assistance Appropriated: $59 million Obligated: $24 million (June 18th) Weatherization Goal: 6,500 homes Energy Efficiency and Conservation Block Grants* Appropriated: $ 31 million

47. State Energy Program Plans Updated regularly on our stimulus resources page: www.ase.org/stimulusresources

48. Uses of Funds:State Energy Programs Plans North Carolina: Support small business and industry through energy savings ($11.5 million) Grow North Carolina’s green workforce- ($8.85 million) Foster renewable energy technology and resource innovation ($13.5 million) Improve energy efficiency in local and state government ($9.5 million) Promote residential energy efficiency and renewable energy ($10 million) Create an Energy Investment Revolving Loan Fund ($18 million) South Carolina: Improve energy efficiency in Public Institutions ($40 million) Create South Carolina Energy Efficiency Training Center Collaborative ($.9 million) Establish Small Business/Utility Partnership for Energy Efficiency Equipment ($50 thousand) Improve energy efficiency in Low-Income Manufactured Housing ($3 million) Establish Carolina Clean Green Investment Incentives ($3 million) Establish Competitive Renewable Energy Grants Program ($3 million)

49. Oversight and Advocacy Immense problems of implementation size and complexity; challenge of administration within limited time frame; political appointees not in place; demands on career appointees Credibility of future energy efficiency initiatives depends on competent and effective implementation Problem of EM & V: How do we measure savings? Continuity of Programs: What happens when the funding goes away?

50. A Word on Federal Tax Incentives New Homes Builder tax credit - up to $2,000 if 50% more efficient compared to 2004 IECCC code; $1,000 for a home that saves 30% or qualifies for the Energy Star Homes Program. (Through 2009) Existing Homes Homeowner tax credit – 30% of cost of installing building envelope components; capped at $1,500 (Through 2010) Commercial Buildings Deduction up to $1.80/sq.ft. for buildings designed to use 50% less energy than ASHRAE-90.1-2001 (Through 2013) Combined Heat and Power property – 10% investment tax credit, applicable to only the first 15MW of CHP property (Through 2016) Solar Energy Systems- 30% tax credit of the cost of the system (Through 2016) Small Wind Systems- 30% of total cost for owners of small wind systems with 100 (kW) of capacity and less (Through 2016) Geothermal Heat Pumps- Investment tax credit of 10% of installed cost or a grant in lieu of the credit worth 10% (Through 2010) Public Buildings:Assignable deduction!

51. Next Up? Energy and Climate Legislation In the House ACES (The American Clean Energy and Security Act, or Waxman-Markey) Status: Narrowly passed the House on June 26th by a vote of 219 to 212. In the Senate ACELA (The American Clean Energy Leadership Act) Scope: Energy Only Status: Approved by Energy Committee on June 27th

52. ACES:Cap is the crown jewel 85% of US GHG emissions covered Could be higher Covered emissions reduced 83% in 2050 Defend and protect the cap!

53. ACES: Goals for Energy Efficiency Policies will no longer save more energy. Instead they will— Reduce cost of meeting carbon cap by Addressing market barriers, especially among energy end-users

54. ACES: EE Programs Complementary EE policies Codes, standards, building labeling, electric efficiency resource standards; authorizations; financing mechanisms Complementary Programs EE in WM is 3-6% of allowance value $81 to $167b over 2012-2050 12.5% of allowance value could get Allowance prices 10% lower Electric, nat gas and petrol prices 1-3% lower Electric and natural gas demand 3-7% lower according to EPA analysis April 20

55. Climate Outlook in Senate Senate EPW to release draft in September At least six other committees have jurisdiction over climate legislation; Senator Reid has asked these Committees to conclude deliberations by Sept. 18 Majority Leader Reid wants to bring comprehensive bill to the floor in the fall; we are hearing October for floor action Opponents/Proponents in “Pitched Battle”

56. ACES: Where the Votes Are States with majority of votes in the delegation for the Waxman-Markey bill are in green; states with majority opposing W/M are in red

57. The Challenges Can Be Overcome: Unleashing NC and SC’s Potential!

59. Institute Electric & Natural Gas DSM Programs

60. Update & Enforce New Building Codes

61. Government Leadership in Facilities/Practices

62. Financial Incentives

63. Pricing Policies (Pay more for the more you use)

64. Education & Outreach

65. Technology R&D and Transfer

66. Form Regional Initiatives

68. Unleashing the Power of Charlotte: Suggestions for Success National Action Plan for Energy Efficiency EEI, NARUC, EPA, DOE… EPA Clean Energy-Environment Guide to Action DOE, NARUC, NASEO, ASE, RAP State Energy Efficiency Policies: a Series of Briefs, pub. by the Alliance Western Governors Association Energy Efficiency Task Force Report

69. EE Global 2010Monday, May 10 to Wednesday, May 12, 2010Washington DC Convention Center, Washington DC EE Global 2010, will serve as the “Davos” of the energy efficiency community, drawing over 600 leaders from government, industry, NGOs, and media from 40+ countries together to share best practices and policies for global implementation of energy efficiency. With over 80% of 2009 participants self-identifying as executive or management-level, participation in EE Global will provide access to energy efficiency’s most notable leaders and decision makers.

70. Final Words… “Our greatest national energy resource is the energy we currently waste.” Former Energy Secretary Spence Abraham

71. Thank you! For More Information…. Kateri Callahan President Alliance to Save Energy 1850 M Street, NW Washington, D.C. 20036 kcallahan@ase.org www.ase.org 202.857.0666