NORTH STAR GROUP

Senate Energy & Natural Resources Committee Hearing on Energy Efficiency Legislation

April 30, 2015 By No Comments

The Senate Energy & Natural Resources Committee kicked off a series of four hearings on April 30 with the consideration of a package of 22 bills dealing with energy efficiency.  (Find the press release here and the full list of bills here.)

 

Sen. Brain Schatz (D-HI) noted in his testimony to the committee that his bill S. 723, Utility Energy Service Contracts Improvement Act of 2015 (text found here), is endorsed by the Bristol Bay Native Association.

 

Following bill presentations from Senators Susan Collins (R-ME), Amy Klobuchar (D-MN), Jeanne Shaheen (D-NH), Christopher Coons (D-DE) and Schatz (D-HI), a witness panel testified on the potential impacts and benefits of the proposed legislation on state government, consumers, economy, and project implementers.

 

This panel consisted of the following individuals, with links to full testimony included:

 

A former Alaska State Senator, Therriault endorsed S. 703, the Weatherization Enhancement and Local Energy Efficiency Investment and Accountability Act, in his testimony.  The bill was sponsored by Sens. Coons, Collins, Shaheen, and Jack Reed (D-RI) (full bill text can be found here).  S. 703 would reauthorize appropriations for the U.S. State Energy Program (SEP) and the Weatherization Assistance Program (WAP), while updating the latter to expand non-profit participation through a competitive grant program.

 

Therriault described how SEP funds are used in Alaska to leverage state funding for the Village Energy Efficiency Program, facilitate state participation in the Tribal Strategic Technical Assistance Response Team program, and expand energy efficiency educational outreach in various school districts.

 

Therriault also supported the following bills (with links to more information):

  • 720: Energy Savings and Industrial Competitiveness Act (Link)
  • 858: Energy Savings through Public-Private Partnerships Act (Link)
  • 893: Energy Productivity Innovation Challenge (EPIC) Act (Link)
  • 878: Residential Energy Savings Act (Link)
  • 888: Promoting Regional Energy Partnerships for Advancing Resilient Energy Systems (PREPARE) Act (Link)
  • 523: a bill to coordinate energy retrofitting assistance to schools (Link)

 

While not opposing any bills, Therriault said he was concerned about S. 939, Sen. Jeff Flake’s (R-AZ) bill to require the evaluation and consolidation of duplicative building programs within the Department of Energy (link).  Therriault said the bill would impose an unnecessary administrative burden on local, state and federal governments.

 

In his oral testimony, Therriault discussed the Quadrennial Energy Review (QER) and praised the U.S. Department of Energy for its openness and for soliciting input.  He said the QER is a positive step toward making energy efficiency a reality.  He said NASEO wants to maximize collaboration with the states, a process that would provide benefits for Alaska’s Arctic energy needs.  He added that he is willing to work with the Department of Energy and the committee to implement the Energy Efficiency Improvement Act (Link) that was signed into law the day of the hearing.

Sen. Lisa Murkowski (R-AK), the committee chair, asked the panel: “If states are successful in implementing these programs, should we be duplicating or overruling their efforts or decisions at the federal level?  How can we bring about efficiency with our processes to make sure programs are working?”

 

Therriault responded that NASEO has not taken an official stance on energy efficiency resource standards.  While NASEO doesn’t want the federal program to duplicate state efforts, the organization is looking for bills that build federal-state partnerships with entities such as Alaska’s Cold Climate Housing Resource Center (CCHRC) and Center for Energy and Power, which Therriault said often “dance” between the state and federal governments.

 

In response to Sen. Maria Cantwell’s (D-WA) question regarding issues with energy efficiency program implementation, Crasi said different home manufacturers lack a consistent platform, which makes home owners reluctant to work with home efficiency systems.

 

Therriault responded that in Alaska, heating is a crippling energy demand for all buildings. All of the systems in buildings need to work together to achieve maximum efficiency, which is a subject that the CCHRC has been researching. He stressed the need to focus on the simplest mechanisms so that they can be used in villages, be easily maintained and understood, and be cost effective and transferable.

 

Sen. Jeff Flake (R-AZ) said he introduced his bill, S.939, in response to a 2012 General Accounting Office recommendation that federal agencies evaluate, consolidate and reduce duplications among the 94 green-building programs that span 11 federal agencies.  Sen. Flake said S.939 would be a modest step toward implementing that recommendation.  Sen. Flake asked Dr. Hogan to identify programs that could be consolidated.   Dr. Hogan answered that DOE has oriented its programs to complement each other and meet different goals.

 

Sen. Elizabeth Warren (D-MA) said she and Sen. Mike Crapo (R-ID) introduced a bill in the last Congress to encourage businesses to use energy efficient technology and practices such as light sensors and more efficient shipping routes.  While such programs work, Sen. Warren noted there is no definitive study that quantifies the cost savings, which makes businesses reluctant to embrace these tools without the data to help them weigh the costs and benefits.  Sen. Warren said she will introduce a bill to direct DOE to conduct a study on the potential cost savings.

 

Dr. Hogan said demonstrating technology costs and savings delivered over time is a key tool for the private sector.  Asked if proof of the bottom-line savings of energy efficiency technologies would encourage more businesses to adopt them, Steve Nadel said yes, many businesses require concrete evidence before they make a transition.

 

Sen. Warren then asked Therriault about the importance of quantifiable benefits in his work to encourage adoption of energy efficiency technologies.  He said states, including Alaska, would benefit from legislation that could help businesses implement energy efficiency.  He cited an Alaska legislative bill introduced by Alaska Gov. Bill Walker to implement PACE (Property-Assessed Clean Energy) financing.  (SB 56 moved from the Alaska Senate Community & Regional Affairs Committee and is now pending in the State Senate Finance Committee.)

 

SB 56 is patterned after a Texas bill that was passed last year, Therriault explained, which included a follow-up audit to ensure that energy efficiency technology is installed and operating correctly and generating savings.

 

Sen. Warren agreed the federal government can assist in this effort, not with regulations or spending money, but by providing data to evaluate the cost savings and benefits of efficient technologies.

 

Sen. Murkowski noted this hearing generated plenty of discussion about businesses and homes wanting to upgrade their energy efficiency technology, but it’s the upfront cost that stops them from going further.  She said both she and Therriault have lived in Fairbanks, where the energy costs are extraordinarily high.

 

Sen. Murkowski said programs that can help with the costs—such as the Weatherization Assistance Program and the Low-Income Heating and Energy Assistance Program (LIHEAP)—already exist in Alaska.

 

Therriault responded that some LIHEAP money can be used to upgrade home furnace technology.  Venting furnaces is critical in Alaska and other northern states.  The full utilization of furnaces has a long-term payback, and that may deter homeowners from upgrading their systems and, as an unintended consequence, might motivate them to switch to less efficient electric heat because it is cheaper in the short term.

 

Sen. Murkowski clarified her question about looking for resources to help homeowners cover the costs, and asked Nadel if he looks at upfront costs that may hinder homeowners from moving forward in upgrading technologies.  He confirmed that he does, and cited the PACE laws in many states, such as in California, where the state is putting up money to gather data and to ensure there are no adverse impacts on mortgage payment rates.  Nadel’s organization hosts a conference every year to bring together retrofitters, financiers, utilities to consider more creative ways on this.

 

Therriault agreed that Alaska is confronted with the upfront cost of technology upgrades, and is encouraging Fairbanks to switch to natural gas and to build a gas distribution system.  The upfront cost for an individual home, however, can be $10,000 to $11,000.  NASEO is looking across the U.S. for other programs the states have used and that may be applied to help the Fairbanks community convert to natural gas with lower upfront costs, which is why SB 56 was introduced.  The bill creates PACE as a financing mechanism that can be used by local governments and local lenders at no cost to the state.

For homeowners, Therriault explained there is bill financing to allow utilities to help finance individual residential conversions.  On-bill financing is very attractive to consumers, he found, more so than the interest rate charged on the financing.  Alaska is looking across the nation for more mechanisms, in addition to PACE, that can be used at low or no cost to the state government.  He said there is a potential role for state energy programs to contribute some dollars to provide a meaningful loan-loss guarantee for loan mechanisms.