Alliance to Save Energy - Promoting Energy Efficiency World Wide: News: January 2006 State Energy Bulletin

January 2006

Newsletter Contents:

Guest Highlight
Gary Cook, Director of US Climate Action Network(USCAN), describes how local and state governments are leading the effort to address climate change.

Alliance to Save Energy Column
Brian Castelli, Executive Vice-President, and David Mann, Policy Intern, provide details from the first meeting of the Energy Efficiency Action Plan leadership group on December 2, 2005 in Washington, DC.

State Updates
Legislative updates from Colorado, District of Columbia, Florida, Illinois, Indiana, Iowa, Kansas, Maine, Massachusetts, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, Ohio, Rhode Island, South Carolina, Utah, Vermont, Virginia, Washington State, and Wisconsin.

State and Local Governments Show Leadership In Tackling Climate Change
By Gary Cook,
Director, US Climate Action Network(USCAN)

Over the past year there was a relentless barrage of stories on new and compelling scientific evidence that the earth’s climate is becoming more and more unstable as a result of pollution-induced global warming. Yet despite the overwhelming scientific evidence our energy use is pushing the climate out of balance, a responsible U.S. Federal policy to address climate change appears indefinitely blocked by special interest politics in Washington and a lack of leadership by both the White House and Congress.

But in hindsight, we may find that 2005 was indeed the tipping point for climate policy in the U.S. The devastation along the U.S. Gulf Coast in the aftermath of Hurricane Katrina illustrated how vulnerable the U.S. is to natural disasters, with stronger hurricanes expected in a warmer world. Public opinion polls show strong support for mandatory measures to reduce our carbon pollution, and more and more businesses are now calling for mandatory federal action. Add to that the record high energy costs that emerged in 2005, and you have a recipe for significant change.

The strongest evidence of this change is the growing leadership by Governors, Mayors, and other local elected officials in adopting policies to cut emissions. In 2005 state and local elected officials moved beyond talking about whether to take action, and began setting long-term pollution reduction targets and adopting innovative policies that will require the deployment of clean energy and energy-efficient technologies.

Key examples:

Mayors: Following the Kyoto Protocol entering into force in February 2005 (without the U.S.), 195 US Mayors, representing over 40 million people, signed the US Mayors Climate Protection Agreement launched by Seattle Mayor Greg Nickels, committing their cities to meet or beat the U.S.’ emissions-reduction target for the U.S. under the Kyoto Protocol
State Climate Plans: In 2005, Governors from several states, including California, New Mexico, and Arizona, committed their states to ambitious emission reduction targets or launched processes to develop cross-cutting state climate plans like those that have been adopted in the New England states.
Regional Cooperation: In December 2005, seven northeast states signed a groundbreaking regional plan to create a regional cap-and-trade program to restrict carbon dioxide emission from power plants.

While efforts by other countries to reduce carbon pollution have helped spur local action in the U.S., local leadership played a critical role in pushing the world community forward at the international climate negotiations in Montreal this past December, as countries gathered to discuss a second round of commitments under the Kyoto Protocol. When the official U.S. Delegation’s refusal to engage in future talks threatened to unravel the negotiations, the world community took notice of a new U.S. delegation present in Montreal, one composed of state and local climate leaders pushing for solutions, inspiring renewed confidence that the U.S. will eventually return to the table as a full partner.

Energy-efficiency policies will play a large role in meeting these state climate goals, and many states are charting their own path in adopting appliance efficiency standards in the face of the federal logjam. Although we ultimately must have action at the federal level, the emerging mandatory approach at the local level is producing real carbon reductions and is, state by state, helping to create a new America, one with a low-carbon and clean energy future. While we wait for leadership in Washington, D.C., it will continue to be the states and cities on the cutting edge of US climate policy.

Further information on the growing efforts to tackle global warming at the state and local level can be found in the USCAN report “Turning the Tide: Establishing Mandatory Climate Change Policy in the United States”.

The Energy Efficiency Action Plan

By Brian Castelli,
Executive Vice President
David Mann,
Policy Intern
Alliance to Save Energy

On December 2, 2005 representatives from all sectors of the energy industry, including the Department of Energy (DOE), the Environmental Protection Agency (EPA), about 50 electric and gas utilities, state utility commissioners, state air and energy agencies, energy service providers, energy consumers, and energy efficiency and consumer advocates (including the Alliance to Save Energy), convened for the first meeting of the Energy Efficiency Action Plan leadership group. The Action Plan’s primary goal is to secure an aggressive new commitment to energy efficiency by the nation’s electric and natural gas utilities.

The Energy Efficiency Action Plan has grown out of the wide-spread recognition that energy efficiency is the most cost-effective way to help meet increased electricity and natural gas demand. Energy efficiency’s potential to reduce demand in transmission constrained areas, to provide direct reductions in natural gas use across key customer groups, and to ease peak energy demand can help ensure the reliability of the energy grid, save money and energy, and reduce pollution.

The Action Plan was created to identify barriers to greater implementation of energy-efficiency measures and programs, and to develop and document strategies and best practices to remove them. Upon completion of the Action Plan, it is anticipated that the industry leaders will follow these recommendations and will attempt to establish them as standard practices.

The Leadership Group of the Energy Efficiency Action Plan is co-chaired by Diane Munns, Member of the Iowa Utilties Board and President of the National Association of Regulator Utility Commissioners, and Jim Rogers, Chairman and Chief Executive Officer of Cinergy. The Alliance was invited to participate in the leadership group due to our role as a leading energy-efficiency advocacy group, and because of our extensive successful work increasing the energy efficiency of utilities, most recently in Georgia.

At the meeting, four working groups were established to tackle specific areas of the task. Alliance staff will serve on two of them – the Energy Efficiency Program Best Practices group and the Utility Ratemaking and Revenue Requirements group. The first will be tasked with identifying the most effective energy-efficiency program options by examining the more successful energy-efficiency programs across the nation.

The second working group the Alliance will participate in will focus on developing ways to remove financial considerations that actually discourage utility companies from investing in energy efficiency. For example, utilities that promote energy efficiency, in the absence of special rules or regulations allowed by their public utility commission, hurt their financial viability as their revenues are reduced by the decrease in electricity or gas sales. This working group will identify strategies to disentangle utilities’ financial health from the volume of their sales.

The members of the Leadership Group, including the Alliance to Save Energy have committed to take additional action within each organizations niche. The combination of leadership and the valuable information and recommendations in the final report – including best practices, business cases and guidelines – will spur significant investment in energy efficiency within the next five years.

For more information visit the EPA’s Energy Efficiency Action Plan.

Colorado

House Bill 1147
Assigned to Transportation & Energy Committee 1/16/06
HB 1147 would direct distributors of natural gas to develop and implement cost-effective energy-efficiency programs once the public utilities commission adopts rules to establish funding and cost-recovery mechanisms for those programs.