Stimulate Recovery Through Small Business Efficiency? We Hear You, Ernie, And We Couldn’t Agree More!
“We could, for example, use existing utility programs for energy efficiency, to use them for residences, for business – small business, for public buildings. And the latter two in particular, small businesses and public buildings, are sectors where there are typically large parts of the day where there aren’t many people involved, so even in the midst of our large concerns about the virus, you can imagine major opportunities for efficiency projects.” – Ernie Moniz, former U.S. Secretary of Energy
In a recent interview, former U.S. Secretary of Energy Ernie Moniz highlighted opportunities for energy efficiency to be part of the economic recovery response in the wake of the COVID-19 pandemic. In particular, Moniz pointed to utility programs aimed at small businesses. We couldn’t agree more. That’s why the Alliance has developed the Small Business Energy Efficiency Grants (SBEEG) proposal to bolster the backbone of the U.S. economy.
Small businesses – which represent half of all U.S. employment (59 million) and half of its annual GDP ($10 trillion) – are at a critical disadvantage, lacking the cash on hand or access to capital to buoy them through extended hard times. While payroll support has been an immediate lifeline in the short run, longer-term relief must not only retain jobs but also improve the bottom line. Energy efficiency has the proven track record to do just that, improving competitiveness by reducing energy costs – one of the largest ongoing operational costs to small businesses.
Efficiency is an economic engine that can help drive America out of recession, while reducing emissions and increasing the resilience and reliability of the nation’s electricity grid. What’s more, the vast majority of energy efficiency workers are themselves employed by small-to-medium sized businesses, which means the benefits to small businesses are two-fold – we like to say, it’s small business helping small business.
What would this program do?
The small business program would invest $6 billion in grants to deliver energy efficiency at zero cost to small businesses customers through utility demand-side management (DSM) programs. DSM programs are operated by 75% of utilities, in virtually every state in the nation, ensuring widespread applicability. Using existing delivery infrastructure administered by utilities and DSM program administrators would deliver funds quickly to the desired target, which is a “lesson learned” from previous stimulus efforts.
Utilities spend $8.3 billion annually on DSM programs, meaning that federal stimulus dollars would be highly leveraged with non-federal investment, typically funded through customer surcharges or as part of the rate base. These investments are at risk as utilities nationwide face severe loss of revenues as business customers go belly-up. This program would not only shore up the DSM investments, but also help utilities, a critical industry, to retain employees and project pipelines that deliver efficiency.
If keeping Main Street afloat were not enough incentive to support the program, here are a few more reasons the Alliance supports DSM programs as a stimulus vehicle:
- Small businesses account for up to half of a utility’s demand. Yet, only about 12% of DSM spending targets small business customers.
- Across the nation, small businesses sit empty on the brink of closure. Work could be done more rapidly than in homes as virus concerns continue.
- Utility programs undergo rigorous cost-effectiveness, EM&V, and cost-allocation protocols. This embedded quality control will shepherd funds from wasteful spending.
These are just a few of the reasons why the Alliance and a host of endorsing organizations, including utilities, energy service providers, product suppliers, and environmental and efficiency advocates, will be asking Congress to consider the Small Business Energy Efficiency Grant proposal as it looks to kickstart economic revival. We look forward to working with Congress to include this proposal in any recovery legislation.
Want to join us? Hop aboard, the more, the merrier!