Green Mountain Global Forum

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Energy Policy The world's most important
environmental issue

• Green Mountain Global Forum
• Waitsfield, VT
• Michael Dworkin, Professor of Law Director,
• Institute for Energy and the Environment
• Vermont Law School
• June 19, 2007
• -

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The Energy Trilemma

• Cost of Energy --
• Security and Reliability
• Foreign Domestic
• Environmental Stress
• Land Use, Air Water Pollution, and Climate
  Change

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Why Care About World Energy Trends ?
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Because the World Prices and World
Emissions Affect You

• World energy demand sets world natural gas price.
• World natural gas price sets wholesale new
  England electricity price.
• New England wholesale electricity price sets
  one-sixth of Vermont power costs now
• Climate Change is global, and Green House Gases
  have global effects

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Bering Sea 2004(NYTimes 07/02/03)
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Climate Change..an environmental tragedy

• Carbon dioxide that results from burning coal,
  oil and gas (using energy) remains in the
  atmosphere for over a hundred years trapping
  heat.
• The earths temperature correlates with the
  amount of carbon dioxide in the atmosphere. As it
  accumulates, the earths temperature rises.

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Surface and sea temperatures have risen around
the world and they will rise further over
the next century
Then1884
Now..2006
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The end of nature -- Six months of mud-season
Bill McKibben A sharp drop in the
human-carrying capacity of the earth
Kurt YeagerWe are confronted with
insurmountable opportunities Amory Lovins

• What we need is not a silver bullet, but
• A Green New Deal -- a broad spectrum of
  measures.

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Sources of US air pollution.
About 1/3 200 million Cars Trucks
Less Than 1/3 2 Billion Other Sources

• More Than 1/3
• 3,000
• Power Plants
• 15 from dirtiest 20
• 50 from dirtiest 100
• 90 from dirtiest 300

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Carbon Emissions The Willie Sutton Principle
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Are The Current Challenges Episodic or
Fundamental ?

• Average household electricity use of world
  population (6.1 billion people) in the late
  1990s----
• 0.6 billion people 10,000 kWh
  (US level ca. 12,000)2.0 billion people
  5,000 kWh (typical Latin/Eastern Eur)2.0
  billion people 1,000 kWh (typical
  Asia, Africa)1.5 billion people
  0 kWh (Asia, Africa)
• If 5.5 billion people use 5,000 kWh/ year in
  2025 equals about 200 of 1990s electricity
  demandIf 9 billion people use 5,000 kWh/year in
  2030 equals almost 300 of 1990s electricity
  demand If 9 billion people use 10,000 kWh/year
  in 2030 equals over 500 of 1990s electrical
  demand.
• Pareto assumption new need met without reducing
  current usage levels
• of 600 mm people

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Power costs will be high for a long time
We will be competing with the developing world
for gas and oil Shifting to efficiency
and renewables will save money over the next
decade. Cheap coal will hit financial and
environmental limits very soon.
What does the rising demand for energy mean?
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Do we have a national energy policy?
We do .. And it is this
?
So, how is America dealing with the likelihood of
more expensive less available energy?
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Stunning coal resurgence 154 new plants
planned
-- 93 GW, 137 billion
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Where is the problem?

• Think vehicles
• Think fossil-fired electric power
• Think a dozen other ideas across the board
• Most Importantly THINK !

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Potential Sectors For State Climate Policy

• Electric System Efficiency
• Utility Generation, Transmission, Distribution
• Natural Gas Use
• End Use Efficiency
• Buildings, Farms
• Appliances
• Industrial Processes
• Non-Utility Electric Generation
• especially renewables
• Transportation

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It is feasible We have done it , we can do
itEnergy Efficiency, Most important Electric
Efficiency Lighting, motors, insulation,
pumps Transportation efficiency New Cars,
feebates, guzzler fees
High Mileage Tires
Bus routes ?New FuelsElectricity from
Renewable energy Wind, solarTransportation
fuels Bio Fuels, Cellulosic EthanolAttention
Awareness, Commitment!
Low Carbon Futures Key Next Steps
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US energy use already cut to Lovins soft path
actual total energy consumption
Government (DOE- EIA)
gas
nuclear
renewables
but that just scratches the surface, esp. for oil
electricity
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But, Isnt Vermont Already Clean?

• Physically, operationally, Vermont is part of New
  Englands unified electric system so sometimes
  the ISO-NE ramps up dirty power plants to meet
  our electricity demand.
• 85 of time fossil fuel runs the marginal
  electric unit in New England (fueling the power
  plant that is turned on if our demand goes up,
  and turned off if our demand goes down)
• Every kWh Vermont serves with efficiency or with
  renewables reduces New Englands and worlds
  -- global warming pollution/ carbon.

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and we may not be low-carbon for long
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Things for Vermont to do

• Reduce emissions from Transportation
• Reduce emissions from Stationary Sources
• Seize Business Opportunities
• Take advantage of Fiscal Opportunities
• Enact Policies
• Provide Technical Assistance

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Reduce Emissions from Mobile Sources

• Ways to reduce emissions from transportation
• Travel fewer miles
• Use greener fuels
• Create and use efficient vehicles
• Create good public transportation systems

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Things for Vermont to do

• Reduce emissions from Transportation
• Reduce emissions from Stationary Sources
• Seize Business Opportunities
• Leverage Fiscal Opportunities
• Enact Policies
• Technical Assistance

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Electric Non-Utility

• Community Energy Production Ownership or
  Control
• Group Net Metering
• Clean Community Generation
• Distributed Generation/CHP
• Streamlined Permitting for Renewables

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Electric Utility and Use

• Improve System
• Sustain Renewable Energy Support
• Ratepayers
• Taxpayers
• Utility Performance Based Regulation with GHG in
  performance
• End-Use Efficiency
• Make Efficiency Vermont Enduring
• Franchise with same term and same freedom to
  advocate that investor-owned utilities now have
• Expand scope of efficiency utility

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Reduce Emissions from Stationary Sources

• Electric
• Utility
• Non-Utility
• Non-Electric
• Regulated
• Unregulated
• State-Funded Buildings Programs
• State-Owned Buildings
• Non-State-Owned Buildings

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Regulated Non-Electric

• VT Gas Systems
• Continue and expand VGS efficiency programs
• Building Energy Use
• HVAC
• Residential insulation and furnaces

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Unregulated Non-Electric

• End-Use Efficiency
• Expand Efficiency Vermont
• Building Codes
• Updating
• Enforcement
• Appliance Equipment Efficiency Standards
• Renewable Content in Heating Fuels

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State-Funded Buildings Programs

• State-Owned Buildings
• Goal
• Stiffer standard than generally applies
• Clean energy and efficiency as a design
  fundamental
• State Supported Non-State Buildings
• High Performance Schools - required for state
• Scoring bonus on state-administered grants for
  green buildings and clean energy

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Things for Vermont to do

• Reduce emissions from Transportation
• Reduce emissions from Stationary Sources
• Seize Business Opportunities
• Leverage Fiscal Opportunities
• Enact Policies
• Provide Technical Assistance

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Seize Business Opportunities

• Jump start for forest products industry
• Note sustainability issues (regrowth and
  mono-culture)
• Use reserved ag land for woody (cellulosic)
  fiber
• Biofuels
• Biomass Energy
• Intellectual capital brings to Vermont
• Professional Regulatory Assistance Project
• Academic VLS UVM and GMC and
• Promote Implement Skills and Tools for Export
• GRO
• NRG
• Stone Environmental Services
• Solar Works
• VEIC

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Leverage Fiscal Opportunities

• Exclude value of clean energy systems in
  grand-list value.
• Make green systems and/or insulation and high
  efficiency appliances tax exempt.
• Offer Production Tax Credit (better than
  Investment Tax Credit)
• Provide Low-cost financing of high efficiency
  and/or renewable projects.
• Use long-term financing of efficiency potentials
  through Efficiency Vermont VT state employees
  pension fund investments

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Implement Policies to Foster Green Energy

• Land Use Planning Regulation
• Require efficiency and GHG consideration in Act
  250 permit decisions
• Emission Fees / Carbon Tax
• Pollution Caps (first cap, then trade)
• Public Allocation of RGGI Credit Revenues
• Green House Gas Assessment Obligations for
  Significant Governmental Actions

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Efficiency Vermont

• The nations first energy efficiency utility
• Established by regulatory order and supporting
  legislation
• Implements energy efficiency as a least-cost
  resource to meet Vermonts electric power needs
• Kennedy School of Government 2003 Award of
  100,000 for one of 5 Most Innovative and
  Effective Programs in America

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Key Design Features

• Funded by a System Benefits Charge ( a 2- 4
  surcharge on customer bill)
• A single, statewide administrator acts as
  Efficiency Vermont
• Selected through competitive performance bidding
• Independent, non-utility contractor, under a
  multi-year, performance-based contract with the
  Vermont Public Service Board, with significant
  holdback

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2004 Savings Distribution
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Market Potentials and Results

• Nation-Leading Market Shares
• Highest 2002 Efficient Residential Air
  Conditioning Share (61)
• Highest 2003 Efficient Washer Share (62 in 3rd
  Quarter)
• 2002 Share for Energy Star Homes 25
• High Participation of Lighting and Appliance
  Dealers
• High Participation in Key Markets
• Affordable Housing
• Commercial and Industrial New Construction

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Recognized for Innovation 100.000 Award from
Harvards Kennedy School of Government for
Innovation in American Government
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Things for Vermont to do

• Reduce emissions from Transportation
• Reduce emissions from Stationary Sources
• Seize Business Opportunities
• Leverage Fiscal Opportunities
• Enact Policies
• Provide Technical Assistance

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Provide Technical Assistance

• Provide Ombudsman for state and federal grants to
  
• Help Cow Power farmers deal with
• Bureaucracies USDA, DOE, VT Agriculture, VT DPS
• Guide them through regulatory mazes
• Help people who install on-site clean generation
  through Net Metering, etc.
• Answer questions

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Leadership ? Vermont leads effectively and
others join

• Rich Cowart and public allocation of RGGI
  credits NY, MA and other RGGI states will follow
• Efficiency Vermonts awarded 100, 00 Kennedy
  School
• for Innovative and Effective Governmental
  programs
• Rich Sedanos work with Arkansas PSC efficiency.
• In March, May, and September, the IEE at VLS will
  be working with Chinese law schools and Chinese
  governmental utilities
• What shall we tell the energy leaders of
  one-quarter of humanity ?

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Institute for Energy the Environmentwww.vermont
law.edu/energy/research

• Michael Dworkin,
• Professor of Law and Director,
• Institute for Energy and the Environment
• Vermont Law School
• 802.831.1319 South Royalton VT
• 802.249.7840 Cellular
• MDworkin_at_VermontLaw.edu

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Vermonts Energy Efficiency And Affordability
Act Vetoed

• Provisions of H-520
• Sets renewable energy for state at 25 percent by
  2025
• Energy-efficiency and load management measures
  beyond electric sector (i.e., for inefficient
  buildings)
• Allows self-generation and net metering
• Facilitates wind energy production with a tax
  incentive.
• Commercial building energy standards
• Renewable energy pricing
• Gives credit for businesses that use solar power

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Vermonts Energy Efficiency And Affordability
Act Vetoed

• Encourages energy projects on farms
• Requires utilities to offer renewable energy to
  customers
• Several provisions that encourage conservation
  and efficiency
• Expands weatherization program to save energy and
  money for customers
• Sets goals for bio-diesel use
• Encourages small hydro power projects\
• Make Efficiency Vermont as enduring as an
  electric utility

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