Alliance Building Codes Initiative

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Energy Efficiency Resource Standards
ASE Conference Call April 2, 2009 Lowell
Ungar Director of Policy Alliance to Save Energy
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Presentation Outline

• Utility and State Efficiency Programs
• State-level EERS programs
• Federal EERSIssues
• Scope and Targets
• Trading and alternative compliance
• EMV and Administration
• Efficiency in an RES

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Utility Energy Efficiency Programs

• Help customers save electricity or natural gas
• Many kinds of programs
• Consumer education
• Technical training
• Energy audits
• Appliance rebates
• Financing
• 3.7 billion in 2008

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Why Should Ratepayers Fund Energy Efficiency?

• Because its cheaper, quicker, and cleaner than
  providing more energy
• Demand-Side Management (DSM) avoids 30 GW of peak
  loadabout 100 power plants
• Reported cost of about 3-4 cents per kWh

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Program Opportunities
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Energy Efficiency Resource Standards (EERS)

• Electric and natural gas utilities required to
  achieve set level of customer energy savings
• Similar to a Renewable Electricity Standard (RES)
• Complements other policies to spur utility
  programs
• Public Benefits Fund
• Integrated Resource Planning
• Competitive bid in wholesale markets
• Utility rate reforms

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State-Level EERS

• Spreading rapidly
• 10 states set efficiency targets
• 5 states include efficiency in renewable
  standard
• 5 states have related requirements

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State-Level EERS - Examples

• Texas initially 10 of peak load growth,
  increased to 20
• Nevada combined EERS and RES EE capped at 25
  of total
• Ohio ramps up to 2/year target
• Connecticut 1/year target as separate tier in
  RES, plus new all cost-effective efficiency
  requirement
• California CPUC sets electric and gas targets
  based on potential study

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Federal EERS

• Save American Energy Act
• H.R. 889 by Rep. Markey and S. 548 by Sen.
  Schumer
• Bingaman draft RES

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Federal EERS Potential Benefits

• By 2020
• 117,000 MW peak demand savings(390 power plants)
• 260 MMT CO2 emission reductions (48 million
  cars)
• 168 billion net savings in utility bills
• 222,000 net jobs created
• (ACEEE estimates for Save American Energy Act)
• Bring efficiency programs to additional states
  and regions.

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Save American Energy Act Scope

• Applies to local distribution companies (LDCs)
• Regulated even in restructured-market states
• Size threshold
• Counts savings from
• Utility energy efficiency programs
• Combined heat power and recycled energy
• Distribution system savings
• Building codes and appliance standards

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Save American Energy Act Targets

• Requires savings rising to 15 electricity and
  10 natural gas by 2020
• Estimated savings from efficiency programs, not a
  sales limit
• Codes and standards may account for 5 electric
  and 3 natural gas
• State EERS and policies may account for 6
  electric

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Save American Energy Act Trading and Alternatives

• Utilities can buy savings from customers and
  third parties through bilateral contracts
• In-state or in power pool with PUC approval
• EMV rules still apply
• No credit markets
• Buyout 5 cents/kWh or 5/million Btu

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Save American Energy Act Implementation

• DOE sets rules
• States administer with DOE review
• If states choose not to, DOE administers
• Does not affect state EERS
• Same programs can qualify for both

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Save American Energy Act EMV

• DOE sets Measurement and Verification
  requirements
• Utility played significant role
• Additional to business-as-usual practices
• May have outside (including federal) funding
• Account for useful life of measures
• May use deemed savings, sampling
• Third-party verification
• States can apply their own rules if at least as
  accurate

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Renewable Electricity Standard Bingaman Draft

• Energy efficiency can meet up to one-fourth of
  requirement (5 savings in 2020)
• Customer savings, CHP, and distribution system,
  but NOT codes or standards
• Trading of credits
• Applies to Load Serving Entitites
• Current state EERS add up to 6 savings ? No
  additional efficiency

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House side EERS bill

• H.R. 889, the Save American Energy Act,
  introduced by Rep. Edward Markey (D-MA) on
  February 4, 2009.
• EERS included in the Waxman-Markey in the
  American Clean Energy and Security Act of 2009
  discussion draft.
• Cosponsors include Rep. Olver (D-MA), Rep.
  Hirono (D-HI), and Rep. Schakowsky (D-IL). Likely
  others that the Markey office has not yet
  released.
• Coalition is targeting Blue Dogs, e.g. Barrow
  (D-GA), Matheson (D-UT), Gordon (D-TN), Holden
  (D-PA), and others, e.g. Welch (D-VT),
• Need for letters and visits from in-state
  businesses and organizations

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Senate side EERS bill

• S. 548, the Save American Energy Act,
  introduced by Sen. Charles Schumer (D-NY) on
  March 9, 2009.
• Coalition meetings last week with Bingamans
  staff cracked open the door for a stand-alone
  bill
• No official cosponsors yet - a Republican
  cosponsor will be critical for gaining support
  throughout the ENR committee.
• Coalition still supports a stand-alone bill, but
  if made to compromise, would take a 10 carve-out
  of an RPS (currently 5)
• Need for letters and visits, particularly from
  in-state businesses, particularly to Republican
  and moderate Dems.

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Thank You!
Lowell Ungar Alliance to Save Energy Phone
[phone] Email LUngar_at_ase.org Website
www.ase.org