Kara Saul Rinaldi

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Clean Air Act 111(d)VAEEC Spring
MeetingThursday, May 29Richmond, VA

• Kara Saul Rinaldi
• National Home Performance Council/
• Home Performance Coalition

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The National Home Performance Council

• National, non-profit, 501c3 organization
• Supports whole-house upgrade programs through
  research and convening projects
• Addresses challenges and barriers to advancing
  the home performance industry and whole-house,
  energy efficiency programs.

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Emergence of the Home Performance Coalition

• Merged with ACI
• State energy offices
• Program implementers
• Utility Sector
• Manufacturers
• Non-profit stakeholders
• Contractor Connection Efficiency First

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The Development of the rulE

• 2007 Supreme Court ruling in Massachusetts v.
  EPA, which said the agency has the authority
  under the Clean Air Act to limit emissions of
  greenhouse gases from vehicles
• 2009 - American Clean Energy and Security Act of
  2009 (ACES) Waxman-Markey Legislation passed
  house, not Senate
• December 7, 2009 The U.S. Environmental
  Protection Agency (EPA) announced that greenhouse
  gases (GHGs) threaten the public health and
  welfare of the American people
• 2012, a three-judge panel of the U.S. Court of
  Appeals for the District of Columbia Circuit
  concluded that the EPA was "unambiguously
  correct" in using existing federal law to address
  global warming.

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Copenhagen accord

• 2009 Copenhagen Conference of the Parties of the
  United Nations Framework Convention on Climate
  Change to reduce U.S. emissions of greenhouse
  gases by about
• 17 below 2005 levels by 2020, 42 by 2030, 83
  by 2050
• 15th session of the Conference of the Parties
  (COP 15) to the United Nations Framework
  Conventions on Climate Change (UNFCCC) and the
  5th session of the Conference of the Parties
  serving as the meeting of the Parties (CMP 5) to
  the Kyoto Protocol

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THE ADMINISTRATIONS CLIMATE ACTION PLAN (JUNE
25, 2013)

• limiting carbon emissions from both new and
  existing power plants
• continuing to increase the stringency of fuel
  economy standards for automobiles and trucks
• continuing to improve energy efficiency in the
  buildings sector
• reducing the emissions of non-CO2 greenhouse
  gases through a variety of measures
• increasing federal investments in cleaner, more
  efficient energy sources for both power and
  transportation and
• identifying new approaches to protect and restore
  our forests and other critical landscapes, in the
  presence of a changing climate.

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Third National Climate Assessment(May 2014)

• May 2014 effects of global warming had "moved
  firmly into the present.
• The recent U.S. contribution to annual global
  emissions is about 18, but the U.S. contribution
  to cumulative global emissions over the last
  century is much higher.
• There is no "one-size fits all adaptation, but
  there are similarities in approaches across
  regions and sectors. Sharing best practices,
  learning by doing, and iterative and
  collaborative processes including stakeholder
  involvement, can help support progress.
• Carbon dioxide is removed from the atmosphere by
  natural processes at a rate that is roughly half
  of the current rate of emissions from human
  activities. Therefore, mitigation efforts that
  only stabilize global emissions will not reduce
  atmospheric concentrations of carbon dioxide, but
  will only limit their rate of increase. The same
  is true for other long-lived greenhouse gases.
• To meet the lower emissions scenario (B1) used in
  this assessment, global mitigation actions would
  need to limit global carbon dioxide emissions to
  a peak of around 44 billion tons per year within
  the next 25 years and decline thereafter. In
  2011, global emissions were around 34 billion
  tons, and have been rising by about 0.9 billion
  tons per year for the past decade. Therefore, the
  world is on a path to exceed 44 billion tons per
  year within a decade.
• Carbon dioxide accounted for 84 of total U.S.
  greenhouse gas emissions in 2011.

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What is 111D

• Clean Air Act Section 111(d)
• Regulate carbon emissions from existing power
  plants
• best system of emissions reductions - EPA can
  deploy a systemic approach to reducing pollution
  from power plants
• Flexibility EPA can look beyond each individual
  source in isolation to find the "best," most
  cost-effective system for reducing pollution.
• Location Matters Inside and Outside the fence

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Will it work?

• EPA and the states used section 111(d) to
  implement emission guidelines for fluorides from
  phosphate fertilizer plants (1977), sulfuric acid
  mist from sulfuric acid plants (1977), sulfur
  from kraft pulp mills (1979), and fluoride from
  primary aluminum plants (1980).
• Results were reductions in emissions from the
  sources of 75 fluoride emissions, almost 80 of
  sulfuric acid emissions, 82 of sulfur, and up to
  78 of fluoride emissions.
• Carbon is different. But it can be done.

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Stakeholder positions

• State Air and Utility Regulators from CA, CO, CT,
  DE, IL, ME, MD, MA, MN, NH, NY, OR, RI, VT and
  WA We encourage EPA to develop a stringent but
  flexible framework that equitably achieves
  meaningful reductions in carbon pollution from
  the electricity sector while recognizing that
  states may employ a variety of strategies,
  including successful state programs already in
  force, to achieve these goals.
• Kentucky
• NASEO/NARUC/NACAA (3Ns)

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Big questions

• What is the amount of reductions required? By
  When? Compared to What Baseline?
• New York Times, 20
• Cap and Trade
• Auction
• Registry
• Where Measured
• By Ton or by Rate
• Compliance Mechanisms
• Flexibility

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compliance
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Challenges for Energy Efficiency

• Compensation Model May Change
• Deemed and Modeled Savings
  Metered and Measured Savings
• QA and QC will be more vigorous
• Professions Certifications, Third Party
  Inspections, Annual Performance
• Large Aggregations will be Vetted
• Convincing States Energy Efficiency Works!

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OPPORTUNITIES FOR ENERGY EFFICIENCY

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timeline

• the most significant opportunity for energy
  efficiency advancement in our lifetime
• Timeline
• June 2014 Comment Period
• June 2015 Final Rules Released
• June 2016 State SIPs Developed
• June 2017 Compliance.

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Cost-Effectiveness Test Reform

• Current Five tests (CA SPM)
• Societal Cost Test (SCT)
• Total Resource Cost Test (TRC)
• Program Administrator Cost Test (PACT)
• Ratepayer Impact Measure Test (RIM)
• Participant Cost Test (PCT)

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WHATS WRONG WITH CURRENT COST-EFFECTIVENESS
TESTING?

• Systematically unbalanced often all costs, but
  not all benefits, considered
• Wide variation in methods, not all in accordance
  with best practices
• No systematic consideration of public policy
  goals
• Result inaccurate information that is used as
  the basis for decisions

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recommendations

• Recommendations for Reforming Energy Efficiency
  Cost-Effectiveness Screening in the United States
• Frames tests with key question is a program in
  the Public Interest?
• RVF principles recommend that all tests
• Address energy policy goals
• Account for hard-to-quantify benefits
• Ensure transparency and balance
• Use best practices

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Transparency and Symmetry

• Test Your Test!
• Use a worksheet to make assumptions and inputs
  explicit
• Ensure that if a category of costs is considered,
  that the corresponding benefits are also
  considered
• Incorporate hard-to-quantify benefits
• Take public policy into account
• Address the public interest

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Incorporate hard-to-quantify Benefits

• If its clear that a particular type of benefits
  exist, they should be adequately accounted for
• Range of methods
• Monetization
• Quantification
• Proxy adders
• Alternative screening benchmarks
• If benefits clearly exist but are not accounted
  for, the corresponding costs should not be
  considered. You may be using the wrong test.

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Ensure that policy goals are considered

• Most (all) states have goals policy goals
  affected by energy efficiency programs
• Assisting low-income customers
• Diversifying energy resources
• Reducing price volatility
• Water savings
• Job creation
• Carbon reduction
• May be in the form of executive orders, statutes,
  regulations, etc.
• These policies should be taken into account in
  the test

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Implementing the RVF

• Decide which overall perspective is appropriate
  for the state a utility perspective or a
  societal perspective
• Identify the states energy policy goals that are
  relevant to, and might be affected by, energy
  efficiency resources.
• Identify a method of accounting for those energy
  policy goals in the states screening test.
• Develop a standard template to explicitly
  identify the components of its screening test,
  and to document the assumptions and methodologies
  used to account for those components

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Best Practices also important

• Ensure avoided costs are fully accounted for
• Use an appropriate discount rate
• Use appropriate measure lives
• Test at the appropriate level

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Cost Effectiveness Test campaign

• NHPC Launched national campaign in support of
  recommendations at NARUC 2013
• Build the national Energy Efficiency Screening
  Coalition (http//www.nhpci.org/campaigns.html)
• Target states for adoption of recommendations
• NY, MD, OR, ??

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Thank you!

• National Home Performance Council
• (Home Performance Coalition)
• Kara Saul-Rinaldi
• Executive Director
• kara.saul-rinaldi_at_nhpci.org
• 202.276.1773
• www.nhpci.org
• http//www.nhpci.org/campaigns.html

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