Role of Energy Efficiency in Federal Policy

Energy Solutions CenterNew York Marriott at the Brooklyn Bridge Hotel

Brooklyn, New York

October 6, 2010

The Alliance to Save Energy

Policy Leaders

Environ-mental Groups

Academia

Business Leaders

Mission: To promote energy

efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security.

Organization: Staffed by 60+ professionals 32 years of experience $12 million annual budget Recognized as the premier

energy efficiency organization in the world

About the Alliance

About the Alliance

The Alliance to Save Energy promotes energy efficiency worldwide to achieve a healthier economy, a cleaner environment and greater energy security.- Non-profit organization headquartered in U.S.; operations world-wide- Led by Senator Jeanne Shaheen and Peter Darbee, President

and CEO of Pacific Gas and Electric

- Includes 14 Members of Congress – Bi-Cameral; Bi-Partisan- Also includes environmental, consumer, and trade associations heads,

state and local policy makers, corporate executives

Alliance Associates Program

Business ▪ Government ▪ Public Interests Sponsorship and participation of more than 160 organizations Involvement by businesses in all economic sectors Initiatives underway in research, policy advocacy, education, technology

deployment, and communications

Milestone Energy Efficiency lawsYear Statute

1975 Energy Policy and Conservation Act

1976 Energy Conservation and Production Act

1978 National Energy Act

1989 National Energy Conservation Policy Act

1992 Energy Policy Act of 1992

2005 Energy Policy Act of 2005

2007 Energy Independence and Security Act of 2007

2009 ARRA (Stimulus Bill)

Major Energy Efficiency Programs Year Statute Residential Commercial Industrial Transport Electric Federal/State

Government

1975 Energy Policy and Conservation Act

§340 Industrial Equipment Efficiency

§321 CAFE for cars and light trucks

§381 Federal Conservation Programs;

1976 Energy Conservation and Production Act

Low-income home weather-ization; appl. eff stds

EPCA §361 State Energy Programs

1978 National Energy Act Energy efficiency tax credits

Energy efficiency tax credits

PIFUA PURPA §210, PIFUA

NECPA; EPCA §381, 382 Fed’l efficiency standards

1989 National Energy Conservation Policy Act

EPCA §321 Consumer Appliance Efficiency

EPCA §400 Alt fuel use in light duty vehicles

§210 Utility conservation program

EPCA §400 Federal fleet requirements; state program update; ESCOs

1992 Energy Policy Act of 1992

Model energy eff. building codes; appl and window stds

Comm office equipmt eff stds

§131 indust. efficiency grants

Utility energy efficiency grants

§157 Fedl energy training, audits, procurement

2005 Energy Policy Act of 2005

§135 Appliance stds, 124 eff appliance rebates

Eff standards for commercial equipment

Fuel efficiency studies

Net-metering,Interconnect standards, PURPA relief

§101 Energy saving measures in Federal buildings

2007 Energy Independence and Security Act of 2007

Light bulb and consumer appliance standards

Institutional Grants and Loan; Zero-energy Comm Bldgs

EPCA §371 Industrial Waste Energy Recovery

§101, new CAFE Stds;

Title XIII, Smart Grid policy

§141 Fed fleet reqs; §431,521 high perf Fed bldgs; §541 EECGB

2009 ARRA (Stimulus Bill) Weatherization funding for low-income homes

Electric vehicle and battery funding

Smart grid funding; transmission study funding

State Energy Office Funding; EECGB Funding

Energy Efficiency is Our Greatest Resource

Geothermal, Solar and Wind

Conventional Hydroelectric

Biomass

Nuclear Electric Power

Coal

Natural Gas

Petroleum

Increased Efficiency (Compared to 1973)

0 10 20 30 40 50 60

1

3

4

8

19

23

35

52

Figure 1 - America's Greatest Energy Resource Sources of U.S. Energy in 2009

(Quads)

Increased Efficiency (Compared to 1973) 2009 Domestic Production Net Imports

Alliance to Save Energy, August 2010

The Advantages of Energy Efficiency Most abundant potential energy source Shortest lead-time & lowest cost source of energy

The Advantages of Energy Efficiency Most abundant potential energy source Shortest lead-time Lowest cost incremental source of energy Utilizes many on-the-shelf technologies Cleanest – no incremental emissions Wholly domestic Least obtrusive – no land use impacts Lowers energy costs across the board Keeps producing indefinitely… non-depletable energy

source Zero carbon, reduces use of carbon-based energy

The Disadvantages of Energy Efficiency Requires hundreds of millions of individual decisions Almost all of which are driven primarily by factors other

than energy With significant individual transaction costs Usually requiring significant up-front capital investment Usually under State or local law or regulations Requires efforts to measure and verify

Energy Efficiency’s Largest Disadvantage is Political

Not enough economic stakeholders who see energy efficiency as key to their future

Lack of constituent demands for pro-energy efficiency policy Reluctance to change long-time incentives Uncertainty of short-term federal tax incentives Credit crunch in today’s economy, Federal budget constraints

EE Provisions of Waxman-Markey

• Buildings– New building advanced energy efficiency codes*

– Existing building retrofits*

– Manufactured homes replacement rebates*

– Building labeling program*

– CEDA Funding for Tax-Financed Loans*

– GREEN Act

• Appliances– Codifies certain new lighting standards for outdoor and portable lights

– New appliance standards for several classes of equipment

– Upgrades DOE standard-setting process

– Encourages “best-in-class” appliances, smart appliances

* Funded through ACES carbon emission allowance allocations

Demise of climate legislation and slim prospects for energy bills

Alliance advocacy for energy bill priorities in July and early August;

Introduction in July of the “oil spill” bill by Senator Reid --- (S.3663) Clean Energy Jobs and Oil Company Accountability Act of 2010

Reid announcement in early July that comprehensive energy & climate legislation would not be enacted;

Factors in failure of climate bill: partisan gridlock & pending mid-term elections; WH did not press the issue;

Alliance & other advocates shifted message to stress urgency of passing an energy bill this year with RES/EERS; codes; appliance standards and other key provisions;

Implementation of National Consensus Agreements (appliances) Bi-partisan RES bill (S. 3813), requiring utilities to generate 15% of

their electricity from renewable sources by 2021 (up to ¼ of the requirement can be met by EE; 27 co-sponsors but need 60

Major push from wind, solar on RES bill

bill is identical to the ACELA RES Graham alternative bill has nuclear, clean coal Much depends on mid-term elections Next year: smaller, piecemeal “chunks” Republican “repackaging” of climate issues? Constrained federal budget for EE programs; Energy efficiency financing, revolving funds will be key issue

Outlook for Lame Duck and Beyond

Other Lame Duck Candidates for Floor Action this year

Bingaman wants new DOE loan guarantee program;

He is also advocating for CEDA + oil spill bill in lame duck;

Rockefeller bill (S. 3072) delays EPA regulation of stationary sources for two years (not vehicles)

Reid bill on natural gas vehicles and electric vehicles (S.3815);

Tax bill/extenders; Extend clean energy manufacturing

tax credit

American Recovery and Reinvestment Act

$26B for core efficiency programs Money obligated, but not fully spent in five key programs:

State Energy Program Appropriated: $3.1 billion Spent: $0.5 billion (16%)

Energy Efficiency and Conservation Block Grants Appropriated: $3.2 billion Spent: $.4 billion (12%)

Weatherization Assistance Program Appropriated: $5.0 billion Spent: $1.5 billion (31%)

Appliance Rebates Appropriated: $300 million Spent: $187 million (63%)

Smart Grid Grants and Demonstration Appropriated: $4.2 billion Spent: $.3 billion (8%)

ARRA EE spending to date Of these programs, about $3 billion (about 18%) has been

spent as of September 17: - Low estimate: only funds associated with completed projects

can be counted as “spent.” Also does not account for private investment in stimulus funded projects.

- DOE has overcome major federal hurdles (NEPA, Davis-Bacon, etc.)

Thank You!

Brad Penney

bpenney@ase.org

202-530-4348