[Senate Hearing 113-70]
[From the U.S. Government Publishing Office]
S. Hrg. 113-70
ENERGY EFFICIENCY BILLS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ENERGY
of the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
ON
S. 717 S. 1205
S. 1084 S. 1206
S. 1191 S. 1209
S. 1199 S. 1213
S. 1200
__________
JUNE 25, 2013
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the
Committee on Energy and Natural Resources
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
RON WYDEN, Oregon, Chairman
TIM JOHNSON, South Dakota LISA MURKOWSKI, Alaska
MARY L. LANDRIEU, Louisiana JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont MIKE LEE, Utah
DEBBIE STABENOW, Michigan DEAN HELLER, Nevada
MARK UDALL, Colorado JEFF FLAKE, Arizona
AL FRANKEN, Minnesota TIM SCOTT, South Carolina
JOE MANCHIN, III, West Virginia LAMAR ALEXANDER, Tennessee
BRIAN SCHATZ, Hawaii ROB PORTMAN, Ohio
MARTIN HEINRICH, New Mexico JOHN HOEVEN, North Dakota
TAMMY BALDWIN, Wisconsin
Joshua Sheinkman, Staff Director
Sam E. Fowler, Chief Counsel
Karen K. Billups, Republican Staff Director
Patrick J. McCormick III, Republican Chief Counsel
------
Subcommittee on Energy
AL FRANKEN, Minnesota, Chairman
TIM JOHNSON, South Dakota JAMES E. RISCH, Idaho
MARY L. LANDRIEU, Louisiana DEAN HELLER, Nevada
MARIA CANTWELL, Washington JEFF FLAKE, Arizona
BERNARD SANDERS, Vermont LAMAR ALEXANDER, Tennessee
DEBBIE STABENOW, Michigan ROB PORTMAN, Ohio
MARK UDALL, Colorado JOHN HOEVEN, North Dakota
JOE MANCHIN, III, West Virginia
MARTIN HEINRICH, New Mexico
TAMMY BALDWIN, Wisconsin
Ron Wyden and Lisa Murkowski are Ex Officio Members of the
Subcommittee
C O N T E N T S
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STATEMENTS
Page
Bennet, Hon. Michael, U.S. Senator From Colorado................. 2
Coons, Hon. Chris, U.S. Senator From Delaware.................... 3
Diament, Nathan J., Executive Director for Public Policy, Union
of Orthodox Jewish Congregations of America.................... 48
Franken, Hon. Al, U.S. Senator From Michigan..................... 1
Laskey, Alex, President and Founder of Opower.................... 19
Molotsky, Brad A., Executive Vice President, General Counsel and
Secretary, Brandywine Realty Trust, on Behalf of the Real
Estate Roundtable.............................................. 40
Nadel, Steven, Executive Director, American Council for an
Energy-Efficient Economy Resources (ACEEE)..................... 10
Risch, Hon. James E., U.S. Senator From Idaho.................... 8
Sanders, Hon. Bernard, U.S. Senator From Vermont................. 52
Spurr, Mark, Legislative Director, International District Energy
Association.................................................... 35
Sylvia, Mark, Commissioner, Massachusetts Department of Energy
Resources......................................................
Udall, Hon. Mark, U.S. Senator From Colorado..................... 1
Warner, Hon. Mark, U.S. Senator From Virginia.................... 8
Wyden, Hon. Ron, U.S. Senator From Oregon........................ 51
Appendix I
Responses to additional questions................................ 65
Appendix II
Additional material submitted for the record..................... 71
ENERGY EFFICIENCY BILLS
----------
TUESDAY, JUNE 25, 2013
U.S. Senate,
Subcommittee on Energy,
Committee on Energy and Natural Resources,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:30 p.m. in
room SD-366, Dirksen Senate Office Building, Hon. Al Franken
presiding.
OPENING STATEMENT OF HON. AL FRANKEN, U.S. SENATOR FROM
MINNESOTA
Senator Franken. Good afternoon. The subcommittee will come
to order. The purpose of this hearing is to consider a number
of energy efficiency bills that have been introduced by our
colleagues.
I'm pleased to be joined by Ranking Member Risch and other
members. I know that Senators Bennet and Coons would like to
speak about the energy efficiency legislation they have
introduced. So we will hear their testimony and then Senator
Wyden, or Chairman Wyden, would like to make some remarks.
Then because of a vote on the floor we will recess for
about 15 minutes then we will move on to the rest of the
witnesses.
At some point Senator Warner will testify on an amendment
that he supports or has written. I know my colleagues are all
very busy. So you should feel free to leave once you've
finished with your testimony, if you wish.
So I'd like to recognize Senator Bennet for his remarks and
then we'll go to Senator Coons.
Senator Bennet.
[The prepared statement of Senator Udall follows:]
Prepared Statement of Hon. Mark Udall, U.S. Senator From Colorado,
on S. 1084
Thank you all for your testimony on the importance and benefits of
furthering energy efficiency efforts in the U.S. As a Coloradan, I am
proud that my State is a leader in a balanced approach to energy and
energy security. In particular, the Department of Energy's National
Renewable Energy Lab in Colorado is a world leader in the research of
efficiency improvements and the future of energy development. Energy
efficiency advancements are an important component of our pursuit of a
clean energy economy, both in my State and throughout the nation.
As we discuss legislation to promote energy efficiency in
buildings, I believe one issue of particular importance is increasing
the efficiency of our children's schools. This is why I, with Senator
Collins, introduced the Streamlining Energy Efficiency for Schools Act
(S.1084), which would help organize the Federal government's efforts to
improve the energy efficiency of our schools. There are numerous
programs already available to schools to help them become more
efficient, but it is challenging for schools to traverse the different
eligibility and application requirements in order to take full
advantage of these programs. This bill will provide a coordinating
structure for schools to better navigate the existing federal programs
and financing options available to them. However, the legislation
leaves the decisions to the states, school boards and local officials
to determine what is best for their schools. It is a common-sense way
to help our schools save money on energy bills, while most importantly,
strengthening our children's education.
I look forward to continuing the dialogue on the Streamlining
Energy Efficiency for Schools Act, and the other efficiency
legislation, over the coming weeks. I look forward to this committee
advancing this bipartisan legislation.
STATEMENT OF HON. MICHAEL BENNET, U.S. SENATOR
FROM COLORADO
Senator Bennet. Thank you, Mr. Chairman. Thank you for
beginning the committee hearings so promptly. Senator Risch,
thank you for being here today as well.
I'm here today to support the Better Buildings Act. Over
the last several years we've worked with building owners across
Colorado and the country to craft this significant bill. I want
to thank Senator Kelly Ayotte of New Hampshire for working with
me to improve the bill and being the lead co-sponsor in the
Senate.
The economic environmental benefits of improving energy
efficiency in buildings are clear. Publicized retrofit of the
Empire State Building reduced energy usage there by 38 percent
and has saved an estimated $4.4 million annually for the
building owner. Not only is the building owner reducing
emissions and saving money, they've also created over 250 good
paying construction jobs in the process. It's this example and
these ideas that help form the basis for the Better Buildings
Act.
In crafting the bill we sought to think about efficiency in
buildings, not only from the top/down, where a building owner
makes improvements, but also from the bottom/up where a tenant
would see advantages from designing and configuring their
rented space in an energy efficient manner. Tenants use 50
percent or more of the energy in all office buildings. With
this in mind the bill we've introduced accomplishes 2 goals.
One it allows for a first of its kind study by the
Department of Energy to chronicle private sector best practices
as tenants build out their lease spaces and commercial
buildings. The study would then form a voluntary Department of
Energy program to recognize tenants that design and construct
high performance, leased spaces in the future.
The second provisions called Tenant Star would expand on
the popular Energy Star program and make it available to
tenants instead of just landlords. Under the Better Buildings
Act tenants will be recognized for the energy efficiency
performance of their leased office space. This will provide
value to their customers, their investors and to the building
owners as well.
The Energy Star label has proven to be a very powerful tool
all over the country to achieve whole building efficiency. Our
bill takes the next logical step and confers this recognition
onto tenants as well. It is broadly supported from the Alliance
to Save Energy, to the Real Estate Roundtable, to the Sierra
Club.
The Congressional Budget Office has confirmed that it has
no score.
I hope the committee will see fit to promptly and favorably
move this bill forward in the process.
With that I thank my colleague from Delaware for his
patience. I thank you, Mr. Chairman for holding this hearing.
Senator Franken. Thank you very much, Senator Bennet.
Senator Coons.
Prepared Statement of Hon. Michael Bennet, U.S. Senator From Colorado,
on S. 1191
Thank you Chairman Franken, Senator Risch and other members of the
panel for holding this important hearing on energy efficiency
legislation.
I'm here today to support The Better Buildings Act,
Over the last several years, I worked with building owners across
Colorado, and the country, to craft this important bill.
I want to thank Senator Kelly Ayotte of New Hampshire for working
with me to improve the bill and being the lead cosponsor in the Senate.
The economic and environmental benefits of improving energy
efficiency in buildings are clear.
A very-well publicized retrofit of the Empire State Building
reduced energy usage by 38 percent and has saved an estimate $4.4
million annually for the building owner.
Not only is the building owner reducing emissions and saving money,
but they also created over 250 construction jobs in the process.
It's this example, and these ideas, that helped form the basis for
Better Buildings Act.
In crafting the bill, we sought to think about efficiency in
buildings not only from the ``top down''--where a building owner makes
the improvements;
But also from the ``bottom up'' where a tenant would see advantages
from designing and configuring their rented office space in an energy
efficient manner.
After all, tenants use 50 percent or more of the energy in all
office buildings.
With all that in mind;
The bill we've introduced accomplishes two goals:
One, it allows for a first-of-its-kind study by the Department of
Energy to chronicle private sector best practices as tenants ``build
out'' their leased spaces in commercial buildings.
This study would then inform a voluntary DOE program to recognize
tenants that design and construct high performance leased spaces in the
future.
The second provision-called Tenant Star-would expand on the popular
Energy Star program, and make it available to tenants instead of just
landlords.
Under the Better Buildings Act, tenants will be recognized for the
energy efficient design and construction of their leased office space;
This will provide value to their customers, their investors and the
building owner.
The Energy Star label has proven a very powerful tool to achieve
``whole building'' efficiency.
Our bill takes the logical next step and confers this recognition
on tenants as well.
Thank you again Chairman Franken and Senator Risch for allowing me
to testify this afternoon.
STATEMENT OF HON. CHRIS COONS, U.S. SENATOR
FROM DELAWARE
Senator Coons. Thank you, Senator Bennet. Thank you,
Chairman Franken.
Before I begin I just wanted to say how much I've enjoyed
and appreciated my time of service on the Energy and Natural
Resources committee. I will genuinely miss it. The view from
this side is nowhere near as good, I must say.
I am grateful to Chairman Wyden and to Ranking Member
Murkowski, who have both been enormously supportive. I
appreciate their leadership and the way that they work
together. It continues to be my belief that energy efficiency
is an area where this committee can make real progress and do
it in a bipartisan way and in a way that contributes to real
progress for the country.
I've been a believer in energy efficiency and its
cumulative power for a long time and an enthusiastic advocate
for it since my days as a county executive. So I leapt at the
chance to support energy efficiency work and in particular the
bill co-sponsored by Senators Shaheen and Portman during the
last Congress which I'm proud to be one of many co-sponsors of
again during this Congress.
The Shaheen/Portman bill receives the bulk of attention in
the energy efficiency space and with good cause. But I'm glad
that Chairman Franken, that you're holding this hearing today
and considering many other great bills in this hearing
including, of course, 2 of which you are the principle author.
One which I introduced with Senators Collins of Maine and
Reed of Rhode Island is bipartisan and it's named the
Weatherization Enhancement and Local Energy Efficiency
Investment and Accountability Act, a catchy name or S. 1213.
This bill reauthorizes 2 critical energy programs for 5 more
years.
The Weatherization Assistance Program.
The State Energy Program.
Both are programs that have been in place for decades and
are at work daily in each of our States. These programs link
national, State and local interests together in a critical way.
It creates highly effective public/private partnerships that
have delivered real results.
For every dollar invested the Weatherization Assistance
Program returns $2.51 cents in household savings. The program
has served more than 7 million families including more than a
million in just the last 4 years.
For the State Energy Program the results are even more
impressive. For every Federal dollar invested there's leverage
of an annual energy cost savings of more than $7 and nearly 11
in non-Federal funds that are leveraged in terms of multiplier
effect.
So this bill isn't just about reauthorization. It is also
about modernization. We wanted to make sure that we approached
these long standing programs in a fiscally appropriate way. So
we've actually reduced the authorization levels by more than
half from 2007.
Second, there was some concern or criticism about how a few
States used the significantly increased Weatherization
Assistance Program funds that were awarded during the Recovery
Act.
Now the vast majority of States used their funds
effectively. But a few, frankly, did not. There wasn't a set of
national standards in place so it became apparent that new
minimum energy efficiency, excuse me, new minimum efficiency
standards in this program and certifications would be needed
going forward.
Now the Department of Energy is already working on some.
This bill requires they be in place no later than October 2015.
This will make sure these Federal dollars are being spent more
wisely and more efficiently.
Third, we're proposing a complementary, competitive grant
program in which a wide range of NGO's or non-governmental
organizations could compete for a piece of the funding. Now the
goal is to bring in new partners, new approaches, new
technologies and new ideas to ensure that more homes can be
weatherized given limited Federal funding going forward.
All told, S. 1213 supports the base programs, enhances them
will new ideas and ultimately ensures their long term viability
so they can keep making a difference in each of our States.
Now this bill has the support of 25 organizations that work
day and night in the efficiency space including some of the
folks you'll hear from on the next panel.
I'll comment that just this past Friday I had the chance to
visit the Energy Efficiency Hub at the Philadelphia Navy Yard,
that Senator Shaheen has also visited, if at some point it
happens to fit within your priorities and schedule, Senator
Franken, we would certainly welcome you. It is an impressive
opportunity to see demonstrated in one place at one time
compelling technologies and a team approach to energy
efficiency. At some point I also hope to be able to speak to
the Master Limited Partnership Parity Act which you were kind
enough to support in the last Congress which has to do with
energy financing, not energy efficiency.
Thank you for the opportunity to be here this afternoon and
for the opportunity to talk about this particular bill, S.
1213. Although no longer a member of the committee, I look
forward to working with you and hope for the passage of it in
this Congress.
Thank you very much, Chairman Franken.
Prepared Statement of Hon. Chris Coons, U.S. Senator From Delaware,
on S. 1213
Before I talk about my bill, I just wanted to quickly say how much
I've enjoyed and appreciated my time on the Energy and Natural
Resources Committee. I'm really going to miss it. Chairman Wyden and
Ranking Member Murkowski have both been enormously supportive, and I
really appreciate their leadership, and the way they work together.
It continues to be my belief that energy efficiency is an area
where this committee can make some real progress, and can do it in a
bipartisan way. I've been a believer in energy efficiency for a long
time, and an enthusiastic advocate for since my days as a county
executive, so I leapt at the chance to support the work of Senators
Shaheen and Portman during the last congress. I'm proud to cosponsor it
again during this congress.
Shaheen-Portman receives the bulk of the attention in the energy
efficiency space, and with good cause, but I'm glad, Senator Franken--
Chairman Franken--that you're holding this hearing today on the other
good ideas in this area. There are a lot of them.
One of them I just introduced with Senators Collins of Maine and
Reed of Rhode Island. It's bipartisan. It's the Weatherization
Enhancement, and Local Energy Efficiency Investment and Accountability
Act, or S. 1213. The bill reauthorizes two critical energy programs for
five more years--the Weatherization Assistance Program and State Energy
Program.
Both are programs that have been in place for decades and are at
work daily in each and every one of our states. These programs link
national, state and local interests together in a very critical way.
They create highly effective public/private partnerships that have
delivered real results.
For every dollar invested, the Weatherization Assistance Program
returns $2.51 in household savings. The program has served 7.4 million
families, including more than 1 million in the last four years.
The results are even more impressive for the State Energy Program,
where for every federal dollar invested, there is an annual energy cost
savings of more than $7, and nearly $11 in non-federal funds is
leveraged.
Our bill isn't just about reauthorization. It's about
modernization.
First, we wanted make sure we approached thee programs in a
fiscally appropriate way, so we've actually cut the authorizations by
more than half from their 2007 authorization levels.
Second, there was some criticism over how a few states used the
significantly increased Weatherization Assistance Program funds awarded
under the Recovery Act. The vast majority of states used their funds
effectively, but a few did not. There wasn't a set of national
standards in place, so it became obvious that new minimum efficiency
standards and certifications were needed. The Department of Energy is
already working on some, and this bill requires that they be in place
no later than October 2015. This will make sure these federal dollars
are being spent more wisely and more efficiently.
Third, we're proposing a complementary competitive grant program in
which a wide range of NGOs could compete for a piece of the funding.
The goal is to bring in new partners, new approaches, new technologies,
and new ideas to ensure that more homes can be weatherized with limited
federal funding.
All told, S.1213 supports the base programs, enhances them with new
ideas, and ultimately ensures their long-term viability so they can
keep making a difference in each of our states.
This bill has the support of 25 organizations that work day and
night in the energy efficiency space, including some of the folks
you'll hear from on the next panel.
Thank you for the opportunity to be here this morning. I may no
longer be a member of this committee, but I look forward to continuing
to work with you on measures to strengthen energy efficiency,
innovation, and independence. Thanks.
Senator Franken. Thank you, Senator Coons and best of
success in your new committee. If I make a request for approps,
I hope you grant it.
[Laughter.]
Senator Coons. I'll be sure to be attentive.
Senator Franken. Thank you. That's all I can really ask
for.
Thank you, Senator Coons. Thank you, thanks to Senator
Bennet, who has left, for those remarks on this very important
work that you both are doing to advance energy efficiency. We
look forward to hearing more about their legislation from the
witnesses, other witnesses today.
I'm pleased to see so many people here. So much interest in
today's subcommittee hearing on energy efficiency.
In the United States and by the way, just no emotional
outbursts, OK?
[Laughter.]
Senator Franken. In the United States our energy
consumption is about one-fifth of the world's total energy
consumption. That's remarkable when you consider that we have
less than one-twentieth of the world's population. A tremendous
amount of that energy is simply lost through inefficient
buildings, appliances, industrial processes and cars. Those
losses have been estimated to cost U.S. businesses and
households $130 billion each year.
In the same way that we discovered new energy reserves off
the Gulf of Mexico or in the Bakken formation we can also
recover and use new energy resources, non-polluting energy
resources, by simply making our energy use more efficient. By
making investments in energy efficiency we can help consumers
lower energy costs and we can reduce pollution, boost our
manufacturing sector and create jobs. That is a win/win/win
formula.
One central question before us today is how to unlock this
tremendous potential. When I talk with Minnesotans about this
question I often hear that there are major impediments to
building retrofits or to industrial energy efficiency. Some
need help with financing. Others need technical assistance and
everyone needs assurance that they're making a worthwhile
investment.
That's why I'm pleased that our committee passed Senators
Shaheen and Portman's Energy Savings and Industrial
Competitiveness Act which will help our economy become more
energy efficient. Today we have the opportunity to receive
testimony on a number of other bills to further that goal. Many
of the bills we will hear about provide ways to overcome
barriers to improving energy efficiency with modest investment
or just simple innovation on the part of the Federal Government
we can help the manufacturing sector, residential and
commercial buildings and communities overcome hurdles to energy
efficiency improvements.
Take one example, over one-third of all the energy consumed
in the United States is simply lost in the form of waste heat.
One of the pieces of legislation we will consider today is a
bill I've developed to help industries, communities,
universities and others capture this waste heat and put it to
use in a way that it's already being done in St. Paul,
Minnesota, and in other places around the country.
We also have a tremendous opportunity to reduce energy
consumption in buildings, in homes, schools and in the non-
profit sector. We have a number of bills that address energy
efficiency in these areas and also in commercial buildings.
When I am back in Minnesota I often meet with folks who are
interested in retrofitting buildings, but who can't access the
required upfront financing. We've got to identify where those
barriers to financing are and figure out how to overcome them.
By the way, a lot of this isn't about new funding. It's about
identifying financing models that already exist and that we
know are working.
Of course we have to remember that if we don't measure
energy use in buildings and compare that use among the
buildings then we can't make fully informed decisions regarding
the best available options to reduce energy costs. That's why
I've introduced legislation to help building owners measure and
report their energy use which will help private investors and
energy service contract companies identify and deploy more
effective energy efficiency retrofit improvements.
I'm very pleased that we have with us an excellent panel of
experts to discuss the range of bills that we have before us. I
was going to turn to the ranking member, but we do have a vote.
So I will recess this hearing for about 15 minutes because
there are votes that I have to go to.
[Laughter.]
Senator Franken. So we now stand in recess for about 15
minutes.
[RECESS]
Senator Franken. The committee will be in order. Thank you
all for your patience. I'm going to turn it over to the Ranking
Member, Senator Risch, for any comments that he might have
before I introduce the witnesses.
I just want to thank Senator Risch for working with me on
this hearing, our first together. I look forward to continuing
our work together on the Energy Subcommittee.
STATEMENT OF HON. JAMES E. RISCH, U.S. SENATOR
FROM IDAHO
Senator Risch. Thank you very much, Mr. Chairman. You may
feel differently after I say a few things here. But I
appreciate those kind words.
[Laughter.]
Senator Franken. OK, well then we'll go right to----
[Laughter.]
Senator Risch. That's right, you do have that.
Senator Franken. I have the gavel.
Senator Risch. Yes, that's right.
But anyway, thank you.
Senator Franken [continuing]. Have consequences.
Senator Risch. Yes, they do that.
Thank you, Mr. Chairman. It will be interesting as we
review these. In the time I've--one of my banes has been the
regulatory overreach of the Federal Government. It's constant.
It's regular. It is incredibly oppressive upon the American
people and upon American businesses.
Market based economy has worked so very well for us for
over 2 centuries, has made us a leader in the world and I
continually look for free enterprise, free market solution to
all issues. Since I've been here, this particular issue on the
use of energy, has been one that it seems like there is no end
to how the Federal Government wants to regulate our lives. I
was shocked to find out when I first got here that they had
passed a bill that indicated that Americans were not smart
enough to buy their own light bulbs.
In any event, I would hope that we would all use as much
restraint as we could, going forward, and that we trusted the
marketplace as we have for over 200 years and that has served
us so well over that period of time.
Having said all that, of course, I'm always interested in
new ideas, innovative ideas and things that can help. Certainly
everyone wants to conserve energy. Everyone wants to spend less
on energy. Given the choice in the marketplace people will do
something.
So thank you very much, Mr. Chairman.
Senator Franken. Thank you, Senator. You're almost right
until the end there. Then I'm very happy that you're here. Look
forward to working with you.
Senator Risch. Thank you.
Senator Franken. I'd like to recognize Senator Warner, who
is going to speak on one of the amendments that he has proposed
to. Take it away.
STATEMENT OF HON. MARK WARNER, U.S. SENATOR
FROM VIRGINIA
Senator Warner. Thank you, Mr. Chairman.
Thank you, Mr. Chairman. I actually have one that might
bridge the gap between the chairman and the ranking member, at
least on one piece of this. I just want to thank you all for
having the hearing. I appreciate the fact that you've got folks
who've traveled long and far and wide to get here. So I'll be
brief.
I mean, we have a lot of debate about energy policy in this
country, but one of the things, I think, we generally agree on
is that American competitiveness and productivity is something
we need to improve. All the rankings are in. America ranks dead
last, behind China, on energy productivity. We've called it in
the past energy efficiency. I actually think we ought to be
calling it energy productivity because this is really about
increasing productivity, about saving money.
I'm proud to be Chairman of the Bipartisan Alliance to Save
Energy that's made up of Senators of both environmental groups,
virtually wide swaths of American industry, who all see this as
an enormous opportunity. We put out a study that showed that a
whopping 57 percent of our energy flowing to our economy is
simply wasted as heat, noise and leaks and cost U.S. businesses
and household owners about $130 billion bucks a year. This
commission, co-chaired by Governor Pataki and has Republican
Senators, Republican House members, Democrats on it as well,
came forward with a goal that said how do we try to double
energy productivity between now and 2030? Over the next 20
years that would create about 1.3 million American jobs, cut
carbon emissions and boost America's overall economic outlook
by 2 percent.
So Senator Manchin and I have established a bill to create
a State energy race to the top which would reduce energy waste
and double energy productivity, again as I said, by 2030.
Again, this is a competitive based grant program. Because it
would save where a lot of the best work is being done is at the
local and State level.
It would be modeled after the very successful race to the
top education competition. It would create $200 million of
existing funds that would basically allow States to go out and
show best examples. Because at the end of the day you need to
demonstrate and show this increased productivity.
I think the ability to take this relatively small amount of
money and leverage it exponentially with local, State, private
sector, would be a very responsible approach.
This would be looking at things in retrofitting buildings.
It would be looking at remote metering.
It would look at the household level, the office level.
It would also basically say to the States and local, not
all wisdom is wise in Washington. I know that's something the
Ranking Member feels very strongly.
That said, there may be a better Idaho situation and
something dictated out of Washington. Let's give Idaho. Let's
give Boise. Let's give Minneapolis. Let's give Minnesota. Let's
give Virginia a chance to prove out this concept. Not all best
ideas come from Washington, but sometimes we can learn from
best practices around the country.
It's, my hope is that this would be one of the tools where
we could find some common agreement. I, again, thank the Chair
and the Ranking Member for having this meeting. I look forward,
I'm not going to be able to stay for all the presentations but
I've got staff here and look forward to hearing the reports of
all the Commission membership that are involved and the
committee members.
Thank you, Mr. Chairman.
Senator Franken. Thank you, Senator Warner. I know you have
a busy schedule today. So feel free to leave whenever you need
to.
I'm going to turn to our panel now. I'll just briefly
introduce our witnesses. All of them are very well positioned
to speak to energy efficiency and the legislation before us.
We have with us today, Steve Nadel with the American
Council for an Energy Efficient Economy, ACEEE.
Alex Laskey, who is President of Power.
Mark Sylvia, the Commissioner of the Massachusetts
Department of Energy Resources.
Mark Spurr with the Internal District Energy Association,
who is with us from Minnesota. So special thanks to you for the
hardship getting here. I understand it so well.
Brad Molotsky joins us from the Brandywine Realty Trust.
Finally Nathan Diament represents the Union of Orthodox
Jewish Congregations of America.
Thank you all for being here. We will start with you, Mr.
Nadel and just work our way down the table. Since we have 6
witnesses, I would ask you to please stick to about 5 minutes
for your testimony.
Thank you.
STATEMENT OF STEVEN NADEL, EXECUTIVE DIRECTOR, AMERICAN COUNCIL
FOR AN ENERGY-EFFICIENT ECONOMY (ACEEE)
Mr. Nadel. OK. Thank you, Senator Franken.
As you noted, my name is Steven Nadel. I'm the Executive
Director of ACEEE. We are a non-profit organization that acts
as a catalyst to advance energy efficiency policies, programs,
technologies, investments and behavior. We were formed in 1980
by energy researchers. Personally I've been involved in energy
efficiency issues since the late 1970s.
Today's hearing is on 9 bills that are potential amendments
to S. 761, the Energy Savings and Industrial Competitiveness
Act. S. 761 was authored by Senators Shaheen and Portman and
previously has been voted out by the full committee on a 19 to
3 vote.
ACEEE strongly supports S. 761 and urges the Senate
leadership to schedule this bill for full floor time as soon as
possible. Now ACEEE has a long history of estimating the energy
and economic impacts of energy efficiency legislation going
back to the 1980s. We have recently begun an analysis of this
year's Shaheen/Portman bill as well as an analysis of most of
the amendments before us today.
At this point we have preliminary estimates of energy
savings, but are only just starting our analysis of the micro
and macro economic impacts. Our preliminary analysis finds that
the 2013 Shaheen/Portman bill, as it is currently drafted would
save about 9 and a half quadrillion BTUs of energy. These are
called quads. It would save these energy over of the 2014 to
2030 period.
As a reference the United States uses about 100 quads per
year. So saving 9.5 quads is significant even though it's over
many years. The amendments that we support and that I discuss
in my written testimony could add 6 additional quads of energy
savings for a combined total of more than 15 quads. These 15
quads is more energy than would be used by the State of Utah or
Nevada over this period or nearly as much energy as would be
used by the State of Oregon. Savings start modestly and grow
steadily over time as illustrated in Figure 1 in my written
testimony.
Of the 9 bills before us today ACEEE supports all of these
bills although in one case our support is contingent on several
modifications. In this oral statement I briefly wanted to touch
on a few of these bills knowing other witnesses will comment on
most of the others.
First I want to discuss S. 1206, dealing with commercial
building benchmarking. Senator Franken, I'd like to thank you
for your leadership in this area and for introducing this bill.
This bill will promote benchmarking of large commercial and
multifamily buildings.
Building benchmarking is a process that allows building
owners to assess the energy use of their buildings and compare
them to otherwise similar buildings. This process helps
identify buildings that can most benefit from building
upgrades. Senator Risch, it's basically providing information
to building owners so that they can work with the market and
try to decide what investments make the most sense.
The Energy Star Building Programs encouraged benchmarking
for many years and has, so far, benchmarked more than a billion
square feet of commercial floor area and resulted in average
energy savings of about 7 percent in those benchmarked
buildings. However, the majority of existing commercial
building stock has not been benchmarked. S. 1206 would
encourage benchmarking of additional buildings by making whole
building energy use information more readily available to
building owners and promoting benchmarking in a variety of
other ways.
This provision only applies to commercial buildings and
multifamily residential buildings. Single family homes and
small buildings that house several families are not included.
Second, I wanted to note S. 1200, introduced by Senators
Sanders and Wyden which would establish a pilot program for
State loans for residential building energy efficiency
upgrades. Many homeowners lack the capital to make energy
efficiency investments. This bill would assist States and other
eligible entities to provide this capital on attractive terms.
This would be a very useful complement to the commercial
building loan program now in S. 761.
Third, I wanted to note S. 1020 and S. 1199, 2 versions
almost of the same bill introduced by Senators Hoeven and
Manchin which would repeal section 433 of the Energy
Independence and Security Act and replace it with 2 new
provisions that would extend and improve energy performance
requirements of Federal buildings and extend the Federal Energy
Efficiency Performance Standards that apply to new construction
to also include alterations.
We support this bill because as currently written section
433 is not workable and because according to our analysis, the
2 new provisions will result in larger energy savings and
repeal Section 433 would use.
Fourth I would note S. 717 introduced by Senators Klobuchar
and Hoeven which would help non-profit organizations save
energy, a laudable goal. We do support this bill, but it does
take its authorization out of the Building Technology Program,
a very important program. So our support is contingent upon
finding another offset. We also recommend a few wordsmithing
details to make the program clearer.
Fifth, while I do not want to go into the details, we do
support the various other bills that are before this hearing.
S. 1191, the Better Buildings Act.
S. 1209, on Race to the Top.
S. 1084, on School Retrofits.
S. 1205, on local energy supply, your bill, Senator
Franken.
S. 1213, on weatherization and State energy programs.
Regarding this last bill, we understand that finding
funding offsets may be difficult in which case we encourage the
Senate to consider moving forward with the usual refinements,
the modernization, as Senator Coons said, that are contained in
the bill while perhaps being silent on the authorizations.
With that, in conclusion, we believe that the energy
savings and industrial competitiveness Act would be an
important step toward improving the energy efficiency to the
U.S. economy. All the bills before us today, as well as several
additional amendments I discuss in my written testimony would
add to these savings. We estimate that we're talking about 16
quads of energy savings over the 2014 to 2030 period. We
recommend that this bill, these bills, be adopted to benefit
our economy and our environment.
So, thank you.
[The prepared statement of Mr. Nadel follows:]
Prepared Statement of Steven Nadel, Executive Director, American
Council for an Energy-Efficient Economy (ACEEE)
Summary
This hearing is on nine energy efficiency bills that are potential
amendments to S. 761, a bill endorsed by the full Senate Energy
Committee that may soon reach the Senate floor. ACEEE strongly supports
S. 761 and also supports the nine bills before us, although for one
bill our support is contingent on a few modifications. In addition, I
discuss several other possible amendments, most of which we support but
one of which is a potential ``poison pill.''
ACEEE has conducted a preliminary energy savings analysis of S. 761
and many of the potential amendments. Overall, we estimate that S. 761,
together with all the amendments we support, will reduce U.S. energy
use by over 15 quadrillion Btu's over the 2014-2030 period. This is
nearly as much energy as will be used by the state of Oregon over this
period. Saving this much energy will benefit our economy and our
environment and we urge the Senate to adopt S. 761 and the other bills
I discuss, but to avoid ``poison pills'' that lack broad support.
Introduction
My name is Steven Nadel and I am the Executive Director of the
American Council for an Energy-Efficient Economy (ACEEE), a non-profit
organization that acts as a catalyst to advance energy efficiency
policies, programs, technologies, investments, and behavior. We were
formed in 1980 by energy researchers and celebrated our 30th
anniversary in 2010. Personally I have been involved in energy
efficiency issues since the late-1970s and have testified multiple
times before this committee and its Subcommittees as well as before the
House Energy and Commerce Committee.
Today's hearing is on nine bills that are potential amendments to
the Energy Savings and Industrial Competitiveness Act of 2013 (S. 761)
that was previously reported out of the Senate Energy and Natural
Resources Committee on a 19-3 vote. ACEEE strongly supports S. 761 and
urges the Senate leadership to schedule this bill for floor time as
soon as possible.
ACEEE has a long history of estimating the energy and economic
impacts of energy efficiency legislation, going back to the 1980s. For
example, last year we prepared an analysis on the 2012 Shaheen-Portman
bill.\1\ We have begun an analysis of this year's Shaheen-Portman bill
as well as an analysis of most of the amendments, which I discuss later
in my testimony. At this point we have preliminary estimates of energy
savings, but are only just starting our analysis of micro- or macro-
economic impacts. Our preliminary analysis finds that the 2013 Shaheen-
Portman bill, as it is currently drafted, would save about 9.5
quadrillion Btu's (``quads'') of energy over the 2014-2030 period. As a
point of reference, the United States uses about 100 quads annually.
The amendments we support and that I discuss below could add 6.3
additional quads of energy savings, for a combined total of 15.8 quads.
This is more energy than would be used by the state of Utah or Nebraska
over this period, and nearly as much energy as would be used by the
state of Oregon (assuming annual use stays constant at current levels).
Savings start modestly and grow steadily over time, as illustrated in
Figure 1.* Near the end of my testimony I will provide additional
information on our analysis including energy savings by provision.
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\1\ Farley et al. 2012. Impacts of Energy Efficiency Provisions in
Pending Senate Energy Efficiency Bills. American Council for an Energy-
Efficient Economy. http://aceee.org/files/pdf/white-paper/shaheen-
portman.pdf
* All figures have been retained in subcommittee files.
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Of the nine bills before us today, ACEEE supports all of these
bills, although in one case our support is contingent on a few
modifications. In the next section of my testimony I discuss each of
these bills, and then touch on several additional potential amendments
that may be introduced when S. 761 reaches the Senate floor.
Bills We Support
S. 1206--Benchmarking
S. 1206, introduced by Senator Franken, would promote benchmarking
of large commercial and multifamily buildings. Building benchmarking is
a process that allows building owners to assess the energy use of their
buildings and compare them to otherwise similar buildings. This process
helps to identify buildings that would most benefit from building
upgrades. The federal ENERGY STAR Buildings program has encouraged
benchmarking for many years and U.S. Environmental Protection Agency
estimates that this program has benchmarked more than 185 million
square feet of U.S. commercial building floor area, and resulted in
average energy savings of about 7 percent in these buildings each year.
However, the vast majority of the existing commercial building stock
has not been benchmarked. This provision would encourage benchmarking
of additional buildings by making whole building energy use data more
readily available to building owners and promoting benchmarking in a
variety of ways. This provision only applies to commercial buildings
and multifamily residential buildings. Single-family homes and small
buildings that house several families are not included.
Specific provisions in the bill call for:
1. Benchmarking additional federal buildings. Under existing
federal law, federally-owned buildings must be benchmarked but
most federally-leased buildings are not included in this
requirement. This provision requires benchmarking of leased
buildings where practical, addressing a gap in current law.
2. A study by the U.S. Department of Energy (DOE) on best
practices for benchmarking, energy use data aggregation, and
energy use disclosure. Many cities and some States are
considering policies in these areas and this study would
provide guidance on approaches that work and those that have
been problematic so that new policies can take advantage of
these lessons.
3. Combining existing public federal buildings databases and
facilitating consolidation of other existing public buildings
databases to make reporting easier for building owners and
identification of best practices easier for analysts.
4. Establishing a small competitive grant program for
utilities, their partners, and utility regulators to make whole
building energy use data available to building owners. This
includes aggregated tenant consumption so that whole buildings
can be benchmarked. Data on individual tenants would not be
provided in order to protect privacy.
This provision has been extensively vetted with the real estate
industry and has been significantly modified to address their views.
S. 1191--Better Buildings Act (Tenant Star)
S. 1191, introduced by Senators Bennet and Ayote, would encourage
landlords and tenants to cooperate on energy efficiency. Presently most
leased buildings suffer from a ``split incentive'' problem. Tenants pay
energy bills but are usually not in buildings long enough to justify
making energy-saving capital investments. Building owners make capital
investments but since tenants pay the energy costs, they have little
incentive to invest in energy efficiency upgrades. This bill would help
address these problems by:
1. Identifying best practices for energy efficiency during
tenant ``fit-outs''--the improvements to a space tenants make
between when they sign a lease and when they move in.
2. Establishing a new voluntary ``Tenant Star'' program to
recognize tenants whose energy performance is substantially
above average, complementing the existing whole building ENERGY
STAR Buildings program.
3. Encouraging ``energy-aligned'' federal leasing by having
the General Services Administration develop model leasing
provisions that would spur cooperation on energy savings
between federal tenants and building owners. Such leases can
reduce costs to federal agencies and also serve as a model for
leases by non-federal tenants.
Another witness at this hearing will be discussing this bill in
depth so I will keep my comments brief.
S. 1200--Residential Energy Savings Act of 2013
(Residential Financing)
S. 1200, introduced by Senators Sanders and Wyden, would establish
a pilot program for state loans for residential building energy
efficiency upgrades. Many homeowners lack the capital to make energy
efficiency investments and this bill would assist states and other
eligible entities in providing this capital at attractive terms, often
working with banks and other financial institutions. The bill would
have DOE make loans to states, local governments, utilities, and other
eligible entities who would use the funds to recapitalize, expand, or
begin energy efficiency loan programs. The loans would be repaid with
interest, providing for a high degree of cost recovery. States and
other eligible entities would apply for funding and DOE would evaluate
these applications based on a variety of criteria in the bill designed
to encourage best practice program design. For example, the bill calls
for consumer repayments to be ``consumer friendly'' and would encourage
innovative approaches such as on-bill repayment. Since the federal cost
of capital is lower than the cost of capital for many eligible
entities, the program could provide a moderate-cost source of loan
capital. To the extent states and other eligible entities could provide
or raise additional funds for such activities as loan loss reserves,
interest rates that are very attractive to consumers may be possible.
This provision is a useful complement to the commercial building loan
program now in S. 761.
S. 1209--Race to the Top
S. 1209, introduced by Senators Warner and Manchin, would establish
a ``race-to-the-top'' program for states to spur innovative energy
efficiency efforts, just as the program by the same name at the
Department of Education has spurred innovation in that field. The Race
to the Top initiative was a top recommendation of the Energy 2030
initiative led by the Alliance to Save Energy, so I will leave it to
their witness to provide more details on this bill.
S. 1084--School Retrofits
S. 1084, introduced by Senators Udall and Collins, would have DOE
coordinate federal efforts to help school systems, including K-12 and
higher education, make their buildings more efficient. Currently there
is a patchwork of efforts by various departments that are not well
coordinated. We believe this is a useful objective that will make it
easier for school systems to retrofit their buildings.
S. 1020--All of the Above Federal Energy Conservation Act
S. 1020, introduced by Senators Hoeven and Manchin, would repeal
Section 433 of the Energy Independence and Security Act of 2007 and
replace it with two new provisions that would:
1. Extend and improve energy performance requirements for
federal buildings. Under current law these requirements call
for reducing energy use of federal buildings by 30 percent by
2015 relative to a fiscal year 2003 base. The new provision
would extend this requirement to a 45 percent reduction by
2020.
2. Extend the federal energy efficiency performance standards
that now apply to new construction to also include alterations.
These standards call for performance levels 30 percent better
than those in the most recent model building code for
commercial buildings established by the American Society of
Heating, Refrigerating and Air-conditioning Engineers (ASHRAE).
We support this bill because, as currently written, Section 433 is
not workable and because, according to our analysis, the two new
provisions would result in larger energy savings than repeal of Section
433 would lose. The current Section 433 is not very workable because in
its present form it discourages investments in long-term energy savings
contracts and in combined heat and power systems. This was not its
intent. Regarding energy savings, our analysis is summarized near the
end of my testimony. We believe that Section 433 had a laudable goal--
to reduce dependence on fossil fuels. We would prefer that Section 433
be rewritten to be more workable rather than outright repealed, but the
legislative process requires compromise and we believe that S. 1020 is
a workable compromise.
We also support the following two bills but recognize that they
have significant costs and therefore to move forward will likely need
reasonable funding offsets.
S. 1213--WAP and SEP Reauthorization
S. 1213, introduced by Senators Coons, Collins and Reed,
reauthorizes the low-income Weatherization Assistance Program (WAP) and
the State Energy Program (SEP). WAP has been the key federal program to
help low-income households to reduce their energy bills. It makes sense
to help these households reduce their energy bills on an on-going
basis, rather than just help to pay bills through the federal Fuel
Assistance program (e.g., recall the old proverb, ``Give a man a fish,
and you feed him for a day; show him how to catch fish, and you feed
him for a lifetime''). The WAP program has been very successful--the
last ``meta-evaluation'' on the program found average energy savings of
more than 20 percent.\2\ The new legislation includes several useful
improvements to the current program--a requirement that DOE develop
minimum professional standards for WAP contractors and workers, a
requirement for an independent quality assurance program, and a new
competitive leveraged grant program for non-profit agencies that have a
track record of success in serving low-income communities. This bill
will also reauthorize the SEP program, which has been a key program
funding State Energy Offices in all states, including some states where
this is the only funding. Another witness at this hearing will discuss
these programs in more depth.
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\2\ See Schweitzer, Martin. 2005. Estimating the National Effects
of the U.S. Department of Energy's Weatherization Assistance Program
with State Level Data: A Meta-Evaluation Using Data from 1993-2005. Oak
Ridge National Laboratory. http://weatherization.ornl.gov/pdfs/
ORNL__CON-493.pdf.
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S. 1205--Local Energy Supply and Resiliency Act
S. 1205, proposed by Senator Franken, is intended to enable energy
efficiency and renewable energy projects by addressing market barriers
for both the planning and financing of district energy and waste energy
recovery projects. From an efficiency perspective, promoting district
energy projects is important in that the aggregation of thermal loads
creates opportunities for expanded combined heat and power, and
implementing thermal systems at scale can improve efficiency and be
responsive to electric system demands. In addition, waste energy
recovery projects offer the opportunity to reduce electricity and
fossil fuel requirements needed to meet local energy needs. The focus
of this provision on the valuation of thermal energy represents an
important precedent. ACEEE has not yet estimated the energy savings
opportunities from this provision, but intends to analyze the provision
in the coming weeks.
Bill We Support with Modifications
S. 717--Non-Profit Energy Efficiency Act
S. 717, introduced by Senators Klobuchar and Hoeven, would help
non-profit organizations save energy, a laudable goal. It provides
matching grants, up to a cap, so that the non-profit organizations
themselves will have to provide a significant contribution. In general
we find this a useful bill. We are troubled, however, by the proposal
to offset this bill with funding from the Building Technologies Program
at DOE, an important program with a budget of only $220 million for
this fiscal year. The Buildings Technology Program is working on
developing and popularizing a variety of new and cost-effective energy-
saving technologies and practices. A cut of $50 million in this program
would be devastating. From our research, spending $50 million on the
Building Technology Program provides a higher return on the federal
investment than would be provided by spending the same money on
retrofits using conventional technologies in a narrow subset of the
building sector. To gain our support, this bill would need to be funded
using an alternative offset.
In addition, we suggest a few other modifications. First, we
suggest adding two criteria by which to prioritize grants: (1) the
percentage of funds leveraged from other sources (e.g., a grant for 25
percent of the cost would receive priority over one for 50 percent of
the cost); and (2) the financial need of the non-profit (e.g., poor
non-profits should have priority over those with large available
resources). Second, the language on eligible measures is probably too
broad as it appears to include items whose primary purpose is not
saving energy.\3\
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\3\ Specifically, on page 2, lines 17-20, we recommend deleting
``electrical wiring'' (on lines 17 and 19) and ``plumbing, sewage'' (on
line 18). Likewise, on page 3, lines 9-10, ``modernize'' should be
deleted. If the primary purpose of a measure is improving energy
efficiency, the remaining language on p. 3, lines 9-12 should be
sufficient.
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Additional Useful Potential Amendments to S. 761
In addition to the bills that are formally part of this hearing, we
wish to briefly mention several other likely amendments to S. 761 that
we support as follows:
S. 1106--Sensible Accounting to Value Energy Act (SAVE)
S. 1106 was recently introduced by Senators Bennet and Isakson and
has been referred to the Banking Committee. The bill would encourage
energy efficiency upgrades to homes by: (1) encouraging efficiency
improvements at the time of purchase; and (2) recognizing the value of
efficiency upgrades, and the operating cost savings they provide, when
buildings are assessed and qualification for mortgages determined.
Specifically, this bill instructs the Department of Housing and Urban
Development (HUD) to issue updated underwriting and appraisal
guidelines for borrowers who submit a qualified home energy report. The
bill would cover any loan issued, insured, purchased, or securitized by
the Federal Housing Administration and other federal mortgage loan
insurance agencies or their successors. These agencies collectively
guarantee more than 90 percent of all new loans. The bill has three
components:
Debt-to-Income Adjustment--Instructs lenders to account for
expected energy cost savings as an offset to other expenses in
the debt-to-income qualifying ratio, which tests the borrower's
ability to afford monthly mortgage payments. If no qualified
energy report is provided, the DTI will not be adjusted.
Loan-to-Value Adjustment--Instructs lenders to add the
present value of expected energy savings when calculating the
loan-to-value ratio, where not already accounted for in the
home's appraisal report. If no qualified energy report is
provided, the valuation will not be adjusted.
Consumer Information--Instructs lenders to inform loan
applicants of the costs and benefits of energy efficiency and
resources for improving the energy efficiency of a home.
The bill does not add to the current deficit or rely on taxes or
fees; instead it removes current obstacles holding back more efficient
building and remodeling of our homes. A recent study of more than
70,000 mortgages found that mortgages on energy-efficient homes were 32
percent less likely to be in default.\4\ This study provides strong
evidence that the SAVE Act is good credit policy and would help protect
lenders and taxpayers from the risk of mortgage default. The bill
removes an impediment to home energy efficiency from federal mortgage
policy by recognizing how energy efficiency can increase home value and
reduce operating costs, freeing up more income to pay a mortgage. In
addition, the bill would allow American homeowners to finance cost-
effective home energy upgrades as part of a traditional mortgage,
improving access to the comfort and money-saving benefits of efficiency
without increasing the cost of homeownership. The result is improved
and lower cost access to capital to invest in making homes better.
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\4\ Sahadi et al. 2013. Home Energy Efficiency and Mortgage Risks.
Institute for Market Transformation. http://www.imt.org/resources/
detail/home-energy-efficiency-and-mortgage-risks.
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The SAVE Act has support from a broad, diverse coalition including
the National Association of Manufacturers, U.S. Chamber of Commerce,
National Association of Realtors, National Association of Home
Builders, ACEEE, the Institute for Market Transformation, the Alliance
to Save Energy, and the Natural Resources Defense Council.
Manchin Power Plant Efficiency
This bill has not been introduced yet but would direct DOE to
conduct a study on opportunities to improve the efficiency of existing
electrical generation plants. There are significant opportunities to
improve existing power plants\5\ and this bill would help identify the
most promising approaches, helping power plant owners and regulators to
identify cost-effective opportunities to improve their plants.
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\5\ For example, the Electric Power Research Institute hosted a
conference on this topic in February, 2013. See http://mydocs.epri.com/
docs/PublicMeetingMaterials/1202/epri/call__to__papers.pdf.
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H.R. 540--Energy Efficient Government Technology Act
This bill was introduced in the House by Representatives Eshoo and
Rogers. We are aware of several senators who plan to shortly introduce
a similar bill. The bill would encourage the use of information and
communication technologies to save energy and would also assist efforts
to improve the energy efficiency of data centers. The bill would expand
upon the guidance in section 401 of S. 761 and also ``turbo-charge''
section 453 of the Energy Independence and Security Act of 2007,
dealing with energy-efficient data centers and cloud computing. Both of
these provisions would take advantage of recent advances in information
and communications technologies to increase opportunities for saving
energy, including reducing energy required to run data centers. To
provide one example of these opportunities, the Natural Resources
Defense Council and an ``intelligent efficiency'' service provider
worked with the owner of several already-efficient Washington, D.C.
office buildings and achieved 13 percent average energy savings in the
first year by monitoring building meter data, identifying problems, and
making actionable suggestions to building operations staff.\6\
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\6\ Report forthcoming shortly.
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Use of Federal Disaster Relief and Emergency Assistance for Energy-
Efficient Products and Services
Senator Gillibrand is now developing a bill to authorize and
encourage the use of efficient products and services when buildings and
other structures need to be replaced following a disaster. Under
current law, if the old building was inefficient, disaster funds cannot
be used to replace it with a more efficient building, which just
perpetuates inefficiency. The proposed bill will specifically authorize
acquisition of efficient equipment that has been screened by the ENERGY
STAR or Federal Energy Management Program, or efficient buildings that
meet national model building codes.
Water Efficiency
S. 761 is focused on energy efficiency, but in a number of places
the term ``and water'' can and should be added to also encourage water
efficiency. Using water more efficiently saves energy by reducing
energy used for water and waste water pumping and treatment. Specific
suggestions have been forwarded to Senators Shaheen and Portman by the
Alliance for Water Efficiency and we hope that some of these
suggestions can be included in a managers' amendment to S. 761.
Potential ``Poison Pill'' Amendments to S. 761
In addition to all of the above amendments which we generally
support, we have heard about a few amendments that have been drafted
but not introduced that would reduce energy efficiency and increase
energy use.
Most importantly, we are concerned about a provision being advanced
by the National Rural Electric Cooperative Association (NRECA) to
establish new efficiency standards for ``grid-enabled'' electric water
heaters that will use twice as much energy as water heaters that meet a
federal efficiency standard that will go into effect in 2015. NRECA
wants to allow electric coops to promote off-peak electric water
heating and to use other demand response techniques. However, their
proposed amendment is poorly drafted and will allow widespread use of
less-efficient water heaters in applications without off-peak water
heating or load management. Furthermore, their proposal would establish
a standard that has not been well vetted and would prohibit DOE from
ever revising that standard to improve energy efficiency. DOE also
understands NRECA's concern and is working on a waiver to the standard
for the appropriate use of electric water heaters in demand response
programs. DOE's initial proposal had some problems, but NRECA and
others heavily commented on the DOE proposal and DOE is now working to
address these comments. We recommend that instead of dictating a
solution that has the support of only one set of parties to this
proceeding, Congress specifically direct DOE to make a decision and
provide a deadline for such a decision. We are also open to discussing
other potential compromises. There is also a potentially troubling
amendment dealing with the Leadership in Energy and Environmental
Design program (LEED), a voluntary ``green building'' certification
program. Fortunately, we understand that negotiations are ongoing
between the interested parties and we hope that a reasonable compromise
can be found.
Energy Savings from these Provisions
As discussed at the beginning of my testimony, ACEEE has conducted
a preliminary analysis of the energy savings from S. 761 and most of
the bills and provisions discussed in my testimony. In compiling these
estimates, we have made informed assumptions on their impacts. For
example, where appropriations are required, given the tight federal
budget, we assume that full authorizations will not be funded and
instead we assume that the appropriation is half of the authorization.
Our savings estimates are summarized in Table 1. Table 1 lists annual
savings in 2020 and 2030 as well as cumulative savings over the 2014-
2030 period (e.g., the sum of annual savings for each year over this
period). The largest savings, in order, come from Section 101 of S. 761
(on building codes), S. 1106 (the SAVE Act), improving the efficiency
of existing power plants (Manchin), and Section 311 of S. 761
(industrial efficiency).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Overall, the savings from the provisions we support are roughly the
same as those from last year's version of Shaheen-Portman. Some
sections that were included in last year's version of this bill have
changed or been dropped, and we now have one year less to accrue
savings before the 2030 end-point in our analysis. Also, we revised
some of our earlier estimates based on updated data. Furthermore, none
of the amendments we analyzed this year were in last year's bill.
In last year's analysis we estimated that the Shaheen-Portman bill
would generate nearly $60 billion in net consumer savings (i.e.,
savings minus costs) and would support nearly 160,000 net jobs by 2030.
Since the energy savings from the new bill with amendments are nearly
the same, we would expect similar economic impacts in the new bill as
in the old. We will publish a detailed report when we complete our
analysis.
We are aware that S. 1020 (``repeal and replace'') has attracted
much attention so we paid special attention in our preliminary analysis
to that section of that bill. We found that the fossil fuel energy
savings achieved as a result of the implementation of Section 433 of
the Energy Independence and Security Act of 2007 (EISA) would be less
than intended when accounting for other, existing requirements
applicable to new and renovated federal buildings. New federal
buildings are already required by Section 305 of the Energy
Conservation and Production Act to operate at 30 percent below the
energy consumption levels of applicable building code. In addition,
there is an existing requirement in Section 431 of EISA for a reduction
of overall energy intensity of federal buildings by 30 percent in 2015.
The benefit to new and renovated federal buildings from these two
requirements effectively reduces the impact of Section 433 by roughly
50-80 percent annually. It is also important to note that these reduced
impacts are also due to some drafting problems with Section 433 that
has hindered its implementation; recognizing this, we assume that
Section 433 would ultimately only achieve 75 percent of its objective
and not 100 percent. If S. 1020 is adopted, it would extend the
existing 30 percent below code requirement for new buildings to all
buildings undergoing major renovations. The energy savings from this
provision, when paired with energy savings from a proposed increase in
the energy intensity target for all federal buildings to 45 percent by
2020, would exceed any savings gap from repeal of Section 433. Together
these two provisions could save approximately 0.03 quads more than
Section 433 would have in both 2020 and 2030, with an estimated total
cumulative additional savings of about 0.4 quads over the 2014-2030
period.
Conclusion
ACEEE believes that Energy Savings and Industrial Competitiveness
Act of 2013 (S. 761) would be an important step toward improving the
energy efficiency of the U.S. economy. All of the bills before us
today, as well as many of the additional amendments that may be
considered, would add to the energy efficiency savings achieved. We
support:
S. 1206--Benchmarking
S. 1191--Better Buildings Act (Tenant Star)
S. 1200--Residential Energy Savings Act of 2013 (Residential
Financing)
S. 1209--Race to the Top
S. 1084--School Retrofits
S. 1020--All of the Above Federal Energy Conservation Act
S. 1213--WAP and SEP Reauthorization
S. 1205--Local Energy Supply and Resiliency Act
S. 717--Non-Profit Energy Efficiency Act provided our
recommended modifications are made
S. 1106--Sensible Accounting to Value Energy Act (SAVE)
Senator Manchin's Power Plant Efficiency provision
H.R. 540--Energy Efficient Government Technology Act
Senator Gillibrand's provision on Use of Federal Disaster
Relief and Emergency Assistance for Energy-Efficient Products
and Services
Adding Water Efficiency to S. 761 in appropriate places
On the other hand, a potential amendment supported by NRECA on
water heater efficiency standards is a potential ``poison pill'' that
could make enactment of energy efficiency legislation difficult.
Overall, we estimate that S. 761, together with all the amendments
we support, will reduce U.S. energy use by more than 15 quadrillion
Btu's over the 2014-2030 period. This is nearly as much energy as will
be used by the state of Oregon over this period. Saving this much
energy will benefit our economy and our environment and we urge the
Senate to adopt S. 761 and the other bills I have discussed, but to
avoid ``poison pills'' that lack broad support.
This concludes my testimony. Thank you for the opportunity to
present these views.
Senator Franken. Thank you, Mr. Nadel. I'll note that all
of your written statements will be entered into the record.
Mr. Laskey.
STATEMENT OF ALEX LASKEY, PRESIDENT AND FOUNDER
OF OPOWER
Mr. Laskey. Thank you, Senator Franken, Senator Risch,
Senator Sanders. It's an honor to be here.
My name is Alex Laskey. I'm the President and Founder of
Power. We are the world's leading provider of energy efficiency
software for the utility industry.
My friend, Dan Yates and I started the company 6 years ago
because we thought that Americans deserved better than a bill
that was basically impossible to understand. That people had a
right to know, ordinary homeowners had a right to know, more
about the energy they use and the energy they waste in their
own homes. What they ought to do to save.
We're based just here in Arlington, Virginia. We're now 400
employees, 2 of us 6 years ago. We're in 7 countries with
serving 91 utilities in 30 States including Minnesota and
Idaho, not yet Vermont and 7 countries.
Today we've helped save ordinary families more than $300
million on their electric bills. This includes as much as $6
million last year in Minnesota alone. I think this year it will
be close to ten million. We're just starting with a vista in
Idaho so we can give you numbers before too long.
But we're just getting started. This year alone, in the
next 12 months, we'll generate another 2 Terrawatt hours in
energy savings. Two Terrawatt hours, that's more than enough
energy to power every home in St. Paul and Cincinnati combined.
It's every home in Vermont uses less, in total, uses less than
2 Terrawatt hours a year. It's roughly a third the size the
State of Idaho.
Put in another context the solar industry last year in this
country produced 4 Terrawatt hours of electricity. We're
producing 2. The Hoover Dam produces just about 2 Terrawatt
hours a year in energy savings, in energy.
I'm pleased to be here today as a designee of the Alliance
to Save Energy and as a Commissioner on Senator Warner's
Commission, the bipartisan Commission, that he led with
National Grid President, Tom King. This was a truly bipartisan
Commission. We--Governor Pataki was on the Commission,
Executives from the Southern company, Exelon Utilities, EEI, as
well as the Presidents of both the National Resources Defense
Council and EDF.
We didn't agree on everything, to put it mildly. But one
thing that we did agree on was that energy productivity was a
significant problem that we needed to address. We believed we
could double energy productivity in this country by 2030. One
of the ways that we had in mind to get there was this race to
the top which I'll speak about in a moment.
So, but before I do I just pose the question that perhaps
doesn't need to be posed in this room with the people sitting
on both sides of the table which is why should we care about
energy productivity?
Senator Warner talked to it. But 57 percent of the energy
in our economy is flat out wasted. I don't know about you, but
I wouldn't tolerate having 57 percent of the coffee I pour into
my coffee mug every morning could fall out the other side of
it. Although I have a 2-year old, so sometimes some of that
coffee does fall out. But all the more reason I need more of
it.
But we tolerate somehow 57 percent of the energy entering
our economy being lost to things like heat, leakage, noise.
This doesn't even account for the energy that's lost and wasted
in homes when lights are left on regardless of the light bulb
in empty rooms or air conditioning is left on in unoccupied
homes. That we've estimated that 20 percent of the energy
that's consumed in homes is wasted on energy that does not
contribute to lifestyle but does contribute to climate change.
It's $40 billion a year just on behavioral waste.
So this is an urgent problem that we ought to do something
about. As the Senator talked we rank ninth of the twelfth
industrialized countries in terms of energy productivity that
is GDP per energy input. We rank behind China. This is costing
us $130 billion a year. That's $1,000 a household.
So the question is what can we do to eliminate waste and
make our economy more productive?
In many places utility regulation, this is in part not just
about regulation, but it's about reforming bad regulation.
Regulation hasn't changed much since Thomas Edison. Rate
utilities are still rewarded when their customers waste energy.
They ought to be rewarded for helping their customers save it.
Thomas Edison may not have envisioned a world in which we
incentivize utilities to help customers use less power, but
it's common sense. Because helping people use less energy costs
a lot less than building new power plants and transmission
lines.
Some States including Massachusetts already get this. Over
the last 2 decades about half the Nation's States have put in
place energy efficiency goals or other policies for their
utilities to help businesses and families use energy more
productively. These policies are working.
Between 2002 and 2011 States without efficiency goals
exhibited an average increase in per capita consumption of 9
percent over a 10-year period. In States with efficiency goals
it's been a 5 percent reduction. So it's a 14 percent swing in
10 years just because of better policy.
These are not just States like Minnesota and Vermont.
Governor Bush passed the first energy efficiency resource
standard in Texas. Arkansas, Ohio, North Carolina and Arizona
have all passed efficiency resource standards. Even this week,
I know Senator Landrieu isn't here, but this week in Louisiana
tomorrow they're considering passing a law in Louisiana as
well.
So how do we do more of this? From the Federal Government's
perspective the easiest way to do this is to create a race to
the top. It's, you know, as the Senator mentioned, this would
be based on the education race to the top. This is S. 1209. We
are highly supportive of it.
By providing States with incentives to enact policy and
regulatory reforms, that will stimulate new investment in
energy efficiency and demand response. This legislation would
reduce family's energy bills, increase American competitiveness
and help the environment. More specifically S. 1209 would
challenge States to design effective policies to produce
productivity using a $200 million incentive fund.
While States will have flexibility to address their own
local circumstances, they must demonstrate how the money would
be spent, how the savings and increased productivity will be
measured and how the public dollars can be leveraged through
cooperative efforts with utilities.
Finally, to ensure that energy productivity is actually
improving, the National Resource Council would be required to
produce an independent evaluation of the program's performance.
So in conclusion, right now our approach to energy is
wasting our money, polluting our skies and reducing our
competitiveness. S. 1209, the Energy Race to the Top bill, is a
common sense approach that will accelerate the elimination of
outdated regulation, spur innovative reform of energy markets
and energize our economy.
Thanks again for letting me be here. I look forward to
hearing your questions.
[The prepared statement of Mr. Laskey follows:]
Prepared Statement of Alex Laskey, President and Founder of Opower
Introduction
As President and Founder of Opower, I am pleased to appear before
this Subcommittee as the designee of the Alliance to Save Energy and a
Commissioner on the Alliance's Commission on National Energy Efficiency
Policy. Thank you Chairman Franken, Ranking Member Risch, and the other
esteemed members of the Subcommittee for the opportunity to testify.
Opower is the world's leading provider of energy efficiency
software and customer engagement solutions to the utility industry. My
friend Daniel Yates and I founded Opower six years ago because we
believed that if we provided families better information about their
energy use, they could save money and help the environment all at the
same time.
Based in Arlington, Virginia with offices now in San Francisco,
London, and Singapore, our company has grown to more than 400 employees
and works with 91 utilities to serve 18 million households in 30 states
and 7 countries. To date, we have helped families save more than $300
million on utility bills. Last year alone, we saved Ohioans $7 million,
Minnesotans $6 million, Arizonans and Michiganders $3 million, and
Coloradans more than $2 million on their electricity bills.
We're just getting started. Over the next twelve months we' ll
generate another 2 Terrawatt hours in energy savings. That is more than
enough energy to power every home in Cincinnati and St. Paul combined,
or to take all of the homes in Las Vegas off the grid for the whole
year. It's enough energy to power every home in Portland (OR),
Nashville, Albuquerque, or Tucson for a year. 2 Terrawatt hours is
roughly half of what the entire US Solar industry produced last year,
and it's equivalent to the annual production from the Hoover Dam.
Utilities partner with Opower to provide families both the
motivation and information to save energy. Smart people understandably
struggle to decipher typical energy bills with esoteric terms such as
Kilowatt Hours. We firmly believe everyone has a right to personally
relevant energy usage information. To that end, we show families how
their energy use compares to similarly sized homes coupled with
personalized tips for saving. Importantly, our approach delivers
consistent savings regardless of one's age, income, education, or
access to technology.
Broad-based engagement on energy efficiency is a prerequisite for
reducing energy waste at scale. To that end, Opower is helping make
every household and every person a part of the solution to energy
waste. For instance, as part of our partnership with National Grid
Rhode Island, we will soon be delivering energy usage information to
all 425,000 households in that stale.
Commission on National Energy Efficiency Policy
For the past year and a halC l have served on the the Alliance to
Save Energy's Commission on National Energy Eiliciency Policy's (see
attached list of Commission members and their biographies). The
Alliance is a non-partisan group of business leaders, policymakers, and
utility executives, representing stakeholders ranging fi'om leading
utilities such as Southern Company, Exelon, and the Edison Electric
Institute to leading non-governmental organizations including the
Natural Resources Defense Council and the Environmental Defense Fund.
Our Commission, co-chaired by Senator Mark Warner and National Grid
USA President Tom King, released a report earlier this year calling for
a bold national strategy to double our energy productivity by 2030
(i.e., in 2030, every unit of energy consumed will correspond to twice
the amount of GDP as compared to 2011). We issued a list of policy
recommendations (Energy 2030) designed to help America meet this goal.
Meeting this goal would deliver exceptional benefits to the United
States, including enhanced economic competitiveness and technological
innovation, greater energy reliability and security, and strengthened
stewardship of our environment and natural resources.
Created in 2012 to identify solutions for increasing U.S. energy
productivity and jump starting the economy, the Commission built its
recommendations upon a large body of research that examines the issues
of investment, technology, human behavior, and government in relation
to growing energy productivity in the United States across an array of
economic sectors, including residential, commercial, industrial, and
transportation.
An independent analysis by the Rhodium Group for the Commission
found that doubling energy productivity would require investment of
$166 billion each year through 2030, but would avoid $327 billion a
year above those costs, save the average household $1000 a year, add
over a million jobs, and reduce both carbon dioxide emissions and oil
imports by a third.
Moreover, the enclosed figure demonstrates how the Commission's
energy productivity target compares with the reference (i.e., current
course of activity) case projection of the U.S. Energy Information
Administration (EIA) 2012 Annual Energy Outlook
Over the last 40 years, the United States has made significant
gains in energy productivity. In 1970, about $63 billion of GDP in year
2005 dollars were produced per quadrillion Btu (quad) of energy used
domestically according to the U.S. Energy Information Administration.
In 2011, the figure was about $135 billionon per quad. The Commission's
goal is for the U.S. economy to achieve $270 billion (in 2005 dollars)
of GDP for each quadrillion Btu consumed in 2030.
If not for energy productivity gains since the early 1970s, the
United States would need about 50 percent more energy--with concomitant
impacts on energy bills, oil imports, energy reliability and security,
and environmental quality--to deliver today's GOP. The following
Alliance to Save Energy figure graphically illustrates the point.
While the United States has made significant energy productivity
progress over the last several decades, the nation cannot afford to
rest on its laurels. Indeed, heightened international economic
competition; stresses on American energy, transportation, and other
physical infrastructure; continued economic and geopolitical
vulnerabilities to energy price shocks (despite increased North
American oil and natural gas production); and multiple environmental
challenges associated with energy all underscore the need to strengthen
U.S. efforts to enhance energy productivity.
In addition to the Commission's work, three other reports have been
issued recently that call for energy efficiency as a central pillar of
sound U.S. energy policy. These include the National Association of
Manufacturers' Energy Efficiency Task Force on the building sector; the
Business Roundtable's Taking Action on Energy: A CEO Vision for
America's Energy Future; and the Bipattisan Policy Center's America's
Energy Resurgence: Sustaining Success, Confronting Challenges. The
Commission intends to work collaboratively with these organizations and
their associates to implement our common and important agendas on
energy efficiency.
The Alliance Commission on National Energy Efficiency Policy urges
policy makers and the private sector to take immediate and concerted
action to grow our economy and create jobs while using less energy and
reducing associated costs, environmental harm and security impacts.
Of the recommendations, three overarching strategies were
established to meet this energy productivity goal:
UNLEASH INVESTMENT in energy productivity throughout the
economy;
MODERNIZE REGULATIONS and Infrastructure to improve energy
productivity; and
EDUCATE and ENGAGE consumers, workers, business executives,
and government leaders on ways to drive energy productivity
gains.
LEGISLATIVE INITIATIVES
State Energy Race to the Top (S. 1209)
The education ``Race to the Top'' initiative spawned significant
education reforms and has received broad, bipartisan support.
Similarly, an energy productivity competition that provides federal
resources and rewards states for progress toward becoming more energy
productive could spur significant advances in efficiency throughout the
nation.
To that end, Opower applauds Alliance to Save Energy Honorary Chair
Senator Mark Warner (D-Va.) and Senator Joe Manchin (D-W.Va.) for
introducing the State Energy Race to the Top proposal (S. 1209) that
would create, fund, and implement a voluntary energy productivity
competition for states. This concept was a key pillar of the Alliance
Commission's consensus-based Energy 2030 recommendations to double U.S.
energy productivity.
This Race to the Top-style competition- which was embraced by the
President in his State of the Union and Fiscal Year (FY) 2014 budget-
aims to promote innovation and adoption of best practices in energy
efficiency at the state and local levels of government. By providing
states with incentives to enact policy and regulatory reforms that will
stimulate new investment in energy efficiency and demand response, this
legislation would help keep more money in local communities, save
taxpayer dollars, reduce families' energy bills, and increase American
competitiveness.
More specifically, S. 1209 would empower the federal government to
challenge states and local governments to design effective policies to
boost energy productivity, using a $200 million incentive fund. The
legislation builds upon existing public/private networks and encourages
states, businesses, and utilities to modernize. Key aspects of the
legislation include;
Up to 25 states would compete tor a combined $60 million to
develop innovative energy productivity programs and policies.
States must demonstrate how the money would be spent, how
the savings and increased energy productivity will be measured,
and how the public dollars can be leveraged through cooperative
efforts with utilities.
Eighteen months after the initial allocation to 25 states,
an additional $105 million would be divided among no more than
six additional states to continue implementation of energy
productivity e11orts, including adoption of ``best practices''
spearheaded by the initial group of 25 states.
$25 million would be set-aside for innovative energy
productivity programs proposed by public power utilities, rural
electric cooperatives and utilities serving recognized Native
American reservations.
The National Research Council would be required to produce
an independent evaluation of the program's performance.
Proposals Related to the Building Sector
Buildings account tor approximately 40 percent of all U.S. energy
use. Efficiency in the domestic building sector represents an
investment opportunity in the hundreds of billions of dollars, with
potential savings estimated as high as $1 trillion over the next 10
years--30 percent of what we now spend annually on electricity. New and
existing building stock can become more eflicient and productive
through adoption and enforcement of codes and standards, investment in
efficiency retrofits, improvement in technologies, and greater
education of users, among other means.
The Alliance's Commission on National Energy Efficiency Policy also
assesses the state of building energy efficiency to inform the
development of policy recommendations for expanding energy productivity
in residential and commercial buildings. It examines the unique
financing challenges in the buildings sector, an array of available
energy productivity technologies, new developments in providing
building efficiency information, and recent policy innovations.
Building owners and builders themselves decide on components that
affect energy use; building operators affect energy use through
operations and maintenance; and occupants exert control over many types
of energy-using equipment. Importantly, energy management can be
improved through building energy use feedback and benchmarking systems,
building staff training and occupant education, social norms and
marketing, and financial incentives. Behavior-based energy efficiency
approaches, such as energy feedback systems, can empower building
operators and individual households to better manage their energy use
and costs. An Environmental Defense Fund study estimated a $3 billion
potential annual savings if simple monthly comparative energy-e reports
were sent to residential customers nationally.
For these reasons, the Alliance to Save Energy supports Chairman Al
Franken's (D-Minn.) legislation (S. 1206) that would extend the
existing federally owned building benchmarking requirement to federally
leased buildings; require an agency study on benchmarking methodologies
for commercial and multifamily buildings; and authorize a competitive
grant program for interested utilities and regulators to ensure
availability of building energy use data. Similarly, the Alliance also
commends Senators Michael Bennet (D-Colo.) and Kelly Ayotte (R-N.H.)
for introducing the Better Buildings Act (S. 1191 ), which would
advance a voluntary, market-driven approach by creating a Tenant Star
program within ENERGY STAR to promote efficiency in tenant-occupied
commercial spaces. Both of these measures are in keeping with the
policy recommendation in the Education Energ 2030 category, which calls
for effective building energy ratings, benchmarks, and disclosure
methods to reduce energy waste.
Equally important is the leadership role that all levels of
government can play. The federal government is the largest single
energy user in the United States, responsible for just over 1 percent
of total energy use. State and local governments combined own one fifth
of commercial building space, with much larger energy use. But beyond
their own energy use, governments can serve as highly visible test beds
and early adopters of innovative technologies and practices. They also
can influence their large base of contractors and suppliers to increase
their energy productivity.
Furthermore, Federal agencies should adopt the Investment category
Energy 2030 policy recommendation that focuses on applying innovative
best practices to government buildings, including setting targets for
efliciency improvements; implementing energy management systems (under
ISO 50001 standard); benchmarking, rating, and disclosing of building
energy use and eniciency; and conducting recommissioning.
As such, the Alliance to Save Energy has publicly endorsed the All-
Of-The-Above Federal Building Energy Conservation Act (S. 1199).
Authored by Senators John Hoeven (R-N.D.) and Joe Manchin (D-W.Va.),
this bipartisan legislation would strengthen several energy efliciency
targets and requirements for federal buildings by extending the current
efficiency targets to require each agency to reduce energy intensity of
its buildings (energy use per square foot) by 3 percent each year,
ending in a 45 percent reduction by 2020. It would also modify a
current directive to conduct energy and water audits, and adjust
efficiency standards that apply to new federal buildings.
Although the proposal is much different in scope, the Streamlining
Energy Efficiency for Schools Act (S. 1084) falls under the same Energy
2030 policy recommendation, and is backed by the Alliance as well.
Introduced by its Honorary Vice-Chairs Senator Mark Udall (D-Colo.) and
Senator Susan Collins (R-Maine), this bill would simplify the scope of
existing federal energy effciency programs available to schools and
provide clearer guidance on financing options to help make certain that
they are able to take advantage of energy savings opportunities.
Uncertainties and risks, capital constraints, corporate strategy,
and public policy affect decisions to invest in energy productivity in
the building sector as significantly as they do other investment
decisions. Businesses and households can be dissuaded from making
energy or other upgrades by high first-costs. Both often demand very
rapid payback on investments.
Energy productivity investments may be undertaken primarily to
achieve energy benefits, but often energy productivity gains are a co-
benefit of investments made for other purposes. A broader modernization
of manufacturing, renovation of building stock, replacement of
vehicles, and upgrade of infrastructure can yield energy productivity
gains while simultaneously improving economic productivity and business
competitiveness, quality of products and services, and energy and
environmental performance.
Promising opportunities for such investments include the
Weatherization Enhancement and Local Energy Efficiency Investment and
Accountability Act (S. 1213). This bipartisan measure, which was
sponsored by the Alliance to Save Energy's Honorary Vice-Chairs
Senators Chris Coons (D-Del.) and Susan Collins (R-Maine), would
reauthorize and improve the Weatherization and State Energy Programs,
which have been responsible for efficient upgrades in more than 7.4
million homes. This important bill would maintain the national profile
of the programs, allowing millions of low-income Americans to reduce
their energy consumption and save money, and also introduce a
complementary innovation initiative to leverage private funding tor
weatherization projects.
Other potential initiatives that aim to address investments include
the Non-Profit Energy Efficiency Act (S. 717), which would create a
Federal pilot program to provide grants of up to $200,000 (with a 50
percent match) to schools, youth centers, houses of worship, hospitals
and other nonprofit facilities to undertake energy efficiency
improvements. Chairman Franken's Local Energy Supply and Resiliency Act
(S. 1205) also offers promise by offering financing for public and
private entities the ability to assess and implement energy systems
that recover and use waste heal and local renewable energy resources.
CONCLUSION
While the United States has made significant energy productivity
progress over the last several decades, the nation cannot afford to
withhold support for policies or investments in energy efficiency.
Heightened international economic competition; stresses on American
energy, transportation, and other physical infrastructure; continued
economic and geopolitical vulnerabilities to energy price shocks
(despite increased North American oil and natural gas production); and
multiple environmental challenges associated with energy all indicate a
necessity to strengthen U.S. efforts to enhance energy productivity.
Opower recognizes that today's economic and political challenges
make it increasingly diflicult to address national energy policies.
Advancement of the State Energy Race to the Top initiative and other
efficiency proposals, however, would help address high energy costs,
create jobs, improve our national energy security and reduce the
harmful environmental impacts associated with the production and use of
energy.
In many places, utility regulation has not changed much since the
days of Thomas Edison. Utilities make more money when their customers
waste energy. They ought to be rewarded for helping their customers
save it. While Thomas Edison may not have envisioned a world in which
we incentivize utilities to help customers use less power, it is common
sense. Reducing demand and increasing energy productivity is cheaper
and cleaner than building new power plants and transmission lines.
Thank you for your time and attention, and I would be glad to
respond to any questions that you may have.
Senator Franken. Thank you, Mr. Laskey. I'm sure Senator
Risch is looking forward to those figures from your project in
Idaho. It is Risch, by the way, not Reesch. It's Risch.
Mr. Laskey. Sorry.
Senator Franken. It's OK. I just want to recognize that
Senator Saunders is here.
[Laughter.]
Senator Sanders. Thank you, Senator Franken.
Senator Franken. Mr. Sylvia.
STATEMENT OF MARK SYLVIA, COMMISSIONER, MASSACHUSETTS
DEPARTMENT OF ENERGY RESOURCES
Mr. Sylvia. Thank you very much, Chairman Franken and
Senator Sanders. My name is Mark Sylvia. I am the Commissioner
of the Massachusetts Department of Energy Resources. I'm
appearing today on behalf of the National Association of State
Energy Officials.
As noted in the written testimony we generally support the
multiple pieces of legislation being considered by the
subcommittee today. We appreciate your consideration of these
bills. In my oral statement I will mostly focus on the
bipartisan legislation introduced by Senators Coons, Collins
and Jack Reed, to reauthorize the State Energy Program and the
Weatherization Assistance Program.
As discussed in my written testimony there are good
examples of energy efficiency programs from every State. We
would be happy to answer questions and supply other information
for the record. However a few overarching points should be
stressed.
One, the existing State programs leverage a large amount of
non-Federal funds.
Two, these energy efficiency programs are a key to economic
development and international competitiveness.
Three, there is an important and continuing Federal role in
key areas of energy efficiency as reflected in the bills the
subcommittee is considering today.
The Coons/Collins/Reed bill reauthorizes the State Energy
Program at a lower funding level than contained in the 2007
authorization. But otherwise recognizes that the program has
been a continuing success. Because it encourages State
flexibility and acknowledges the programs efforts with the
private sector.
For the Weatherization Program the bill makes some changes
to the underlying statutes, but also recognizes that this
program is robust and has been successful as well. The bill
would strengthen weatherization standards and establish a
modest innovations program that would encourage other
organizations, such as volunteer organizations, to expand on
the fine work of the Community Action Agencies and non-profit
delivery agents. Our biggest challenge for the State energy
program in weatherization is maintaining strong Federal
appropriations.
Just a brief word on other bills you are considering today.
The Warner/Manchin State Energy Race to the Top Initiative
would build on the success of the State energy program while
acknowledging that all States are at different places. The
Massachusetts Lead by Example program is the type of activity
that could be expanded with this program and adopted by other
States. We support this bill as well.
Mr. Chairman, your bills on benchmarking and encouragement
of combined heat and power focus attention on important
untapped resources. We hope these bills are advanced as well.
Finally the Sanders/Wyden bill would encourage the
establishment and expansion of energy efficiency financing
programs by creating a Federal loan program to the States. We
also support this bill.
That concludes my oral statement. I would be happy to
answer any questions. Thank you.
[The prepared statement of Mr. Sylvia follows:]
Prepared Statement of Mark Slvia, Commissioner, Massachusetts
Department of Energy
My name is Mark Sylvia. I am Commissioner of the Massachusetts
Department of Energy Resources (DOER). I am very pleased to be here
today. I am appearing before the Subcommittee on behalf of the National
Association of State Energy Officials (NASEO). NASEO represents the 56
states, territories and the District of Columbia on energy matters. The
state energy officials generally represent their Governors and address
a range of energy issues. Our primary focus is the development and
implementation of rational energy policies in the context of economic
development, promotion of a diverse portfolio and working with the
private and public sectors to achieve these goals. As a NASEO member I
am very pleased to serve on the Board of Directors. As energy directors
we share ``best practices'' and work across party lines and across
state lines to move the country forward.
In general, NASEO supports the bills that the Subcommittee is
considering today. I would be remiss if I did not offer some additional
context with respect to the Shaheen-Portman bill (S. 761). NASEO worked
with the bi-partisan sponsors as well as the Committee Staff of this
committee, on both sides of the aisle, in developing this rational
legislation. We certainly urge swift floor action and, we hope, passage
by the Senate. We will continue to support House action on their
companion legislation, also introduced on a bi-partisan basis, by
Representatives' McKinley and Welch. S. 761 addresses a variety of
matters, and certainly relevant to today's discussion is the private
commercial buildings energy financing program included as Section 201
to that bill. Some of the pieces of legislation that you are debating
today are complementary to that provision of S. 761.
Reauthorization of the State Energy Program and the Weatherization
Assistance Program
Senators' Coons, Collins and Reed have introduced a bill to
reauthorize the State Energy Program (SEP) and the Weatherization
Assistance Program (WAP), ``The Weatherization Enhancement and Local
Energy Efficiency Investment and Accountability Act''. These two
programs are critical to our nation and need to be continued. The bill
reauthorizes SEP at a lower funding level than the level contained in
the 2007 reauthorization, but otherwise recognizes that the program has
been a success because it encourages state flexibility. After the
original authorization in the 1970s, Congress has modified the
underlying statute to increase that flexibility through the State
Energy Efficiency Programs Improvement Act of 1990, the Energy Policy
Act of 1992, the Energy Policy Act of 2005 and the Energy Independence
and Security Act of 2007. Many of the bills that you are considering
today are intended to expand on many of the pilot programs developed in
SEP. The goals of the states' implementation of SEP include:
Support the public and private sectors;
Strengthen America's competitive position and energy
security;
Provide high value programs and projects that facilitate the
private sector delivery of energy innovation;
Maximize energy, environmental, and economic benefits;
Increase market acceptance of energy efficiency and domestic
energy resources; and
Use innovative approaches to reach market segments and meet
policy goals.
The provisions regarding WAP in this bill make some changes to the
underlying statute. I should stress that the underlying program is
robust and has been a success. With changing times, we all recognize
that certain modifications can help this program in the 21st century.
The bill would strengthen standards for weatherization services,
something that has been worked on by state and local officials,
community action agencies, the private sector and DOE. Over the years,
training has certainly improved and DOE and the states have had a
strong partnership in expanding these activities. I should also note
that Oak Ridge National Laboratory has been extremely helpful in
assisting in this effort. Regional training centers have also been
established to update the program. New technologies have been used for
the first time in WAP, such as blower-door testing programs. In
addition to reauthorizing the basic program, also at a reduced funding
level, the bill would establish an innovation program that would
encourage other potential participants to seek out opportunities to
weatherize dwellings of low-income Americans, those with disabilities,
the elderly and an expanding population of returning veterans.
Organizations such as Habitat for Humanity and Rebuilding Together,
that have a track record of helping people with volunteer labor, are
the types of groups that we hope will participate in the program. We
also hope that the community action agencies and existing nonprofit
entities that deliver WAP services will also participate in the
innovation program.
Some examples of the states' accomplishments utilizing WAP funding,
include:
Served over 7.4 million low-income homes since the program's
inception, with millions more high-energy use units still
eligible and in dire need of services;
Saves low-income families an average of $250 to $450 per
year in heating, cooling, and electric costs, depending on
their housing type, location, and fuel source;
Returns $2.51 for every dollar spent in energy and non-
energy benefits over the life of the weatherized home;
Serves as a foundation for residential energy efficiency
retrofit standards, technical skills, and workforce training
for the emerging broader residential energy efficiency retrofit
market;
Impacts communities through local purchasing and jobs,
supporting over 10,000 local, American businesses nationwide;
and
Decreases national energy consumption by the equivalent of
24.1 million barrels of oil annually.
Following enactment of landmark environmental and economic
legislation in 2008, Massachusetts, has used funding for the energy
efficiency and renewable energy investments from a variety of sources,
including ratepayer funds, RGGI auction proceeds, renewable energy
credits, and the forward capacity market created through the New
England Independent System Operator. Massachusetts also uses SEP funds,
which support the core functions of the Department of Energy Resources
(DOER), including oversight of the state's energy efficiency programs,
recognized by ACEEE as the best in the nation for the last two years.
SEP funding awarded to Massachusetts enables DOER to support the
state as an innovation hub for energy policy and technology. In FY2013
Massachusetts used federal SEP funding to 1) conduct energy reliability
planning and monitoring; 2) develop an energy data and analysis
database to be used for public and private energy market analyses; 3)
support the Commonwealth's Renewable Portfolio Standard to enhance our
state's robust solar and emerging renewable heating and cooling
markets; and 4) fund education and infrastructure enhancement to
facilitate a transition to alternative forms of transportation,
including expanded use of biofuels and electric vehicles. Following are
a few examples:
We have leveraged federal funds through our Leading by
Examples (LBE) program to procure $122.3 million in additional
public and utility investments for state facility improvements
estimated to produce greenhouse gas emission reductions
equivalent to removing 139,802 cars from the road. In addition,
LBE project investments generated 1,162 construction-related
jobs.
The majority of LBE funding, $9.7 million, went toward
supporting the Enterprise Energy Management System (EEMS)
program, which installed 1,291 real-time energy meters at 469
buildings to enhance energy efficiency planning. EEMS is the
largest project of its kind in the United States. Other LBE
projects include: 238 energy efficiency measures by the
Division of Capital Asset Management and Maintenance, low
emissivity ceilings at five public ice skating rinks, 86 small-
scale energy efficiency and lighting projects, and the purchase
of 7,464 LED light bulbs for 58 state facilities. Overall,
LBE's investment of funds helped reduce energy use and GHG
emissions at more than 200 state-owned facilities.
SEP funds led to a wide variety of innovative initiatives,
ranging from deep energy retrofits at commercial and
residential buildings that achieved greater than 50 percent
savings, creative new energy outreach strategies, pellet boiler
installations at schools and residences, real-time metering at
dozens of state facilities, envelope, lighting and HVAC
improvements at state buildings, and over 9 megawatts of solar
installations across public and private entities. The SEP
program for the past five years is projected to save $290M over
the lifetime of the projects.
A few other examples of state innovation utilizing SEP funding to
leverage other public and private sector resources include:
Idaho's K-12 Energy Efficiency Project began with a pilot in
the Homedale School District that replaced two failed
compressors, a blower motor, multiple thermostats and outside
air damper actuators; at a cost of $11,196, these projects
provide an estimated $18,000 in yearly savings to the district.
With the success of the K-pilot, the state moved forward with
the K-12 Energy Efficiency project to audit 894 K-12 school
buildings throughout Idaho; continued with HVAC and control
system tune-ups on 836 of the buildings resulting in an
estimated yearly energy savings of up to $3.9 million dollars;
and Energy Expert Software was installed in 91 schools.
Michigan utilizes SEP funding to leverage private sector
resources to upgrade energy efficiency in state buildings. Over
25 loans and grants have been made through the Michigan Clean
Energy Advanced Manufacturing program. One example of a private
sector project is a Michigan based company that manufactures
biomass gasification systems for waste to energy projects. The
firm built a pilot scale biomass gasification center and an
advanced manufacturing rapid prototyping center. Their labs are
capable 4 of characterizing many types of biomass giving them
the ability to optimize their gasification technology.
North Dakota operates a cost-shared training initiative
implemented by North Dakota State University that helps farmers
adopt conserving farming practices to lower production cost. To
date, 43 workshops have been held with 861 participants.
Another SEP--supported program has provided 23 grants to state
agencies, cities and towns to incorporate energy efficiency
equipment into their facilities to reduce energy usage. The SEP
funding provides for energy efficiency measures that have a
payback of less than ten years.
In Washington the state's transportation and commerce
departments leveraged SEP funds and teaming up to implement the
nation's first ``electric highway,'' an initial network of
public access electric vehicle recharging locations along
Interstate 5. The infrastructure will enable electric vehicle
drivers to travel the length of the state along the 276 miles
of Interstate-5 between Washington's borders with Oregon and
Canada.
We strongly support reauthorization of SEP and WAP.
Our biggest challenge in 2013 and now looking at 2014 is the lack
of funding for the programs. SEP has received approximately $50 million
in each the past three years (postsequester--$47 million), with $36.6
million going to the base, formula program in FY'13. We really want to
see the base, formula program receive the maximum amount of funding
because, by its nature, it encourages innovation and flexibility at the
state level. The most recent comprehensive study showed that for every
Federal dollar invested approximately $11 is leveraged and over $7 is
saved in energy costs.
For WAP, the House passed a $68 million funding level in FY'12,
which was maintained through the FY'13 Continuing Resolution. We are
very concerned that the House Energy and Water Development
Appropriations Subcommittee has continued to cut the program. Though
the Subcommittee marked-up their version of the FY'14 bill on June
18th, we have not seen the details, other than a 50 percent cut in the
overall Energy Efficiency and Renewable Energy accounts. A national
program cannot be run on $68 million. Funding in FY'11 for WAP was $174
million. The Senate Energy and Water Development Appropriations
Subcommittee was scheduled to act today. We remain hopeful. 40 Senators
signed a ``Dear Colleague'' letter supporting a funding level of $57
million for SEP and $230 million for WAP.
We urge the committee to approve this legislation. It is good for
the country and costeffective. The changes in the bill will only make
the program better.
State Energy Race to the Top (S. 1209)
Senators' Warner and Manchin have introduced the State Energy Race
to the Top legislation (S. 1209), which would authorize $200 million to
further encourage innovation at the state level. The proposal would
provide $60 million to up to 25 states to offer amended plans for
policy and program changes. After 18 months, a smaller group of states
would share a larger portion of funds (up to 6 states) based upon their
success in implementing their plans. This would be a voluntary,
competitive program operated by DOE. It is focused on improving energy
productivity. One key facet of the bill, is that it is based on
improvements from where states are now, without an arbitrary set of
absolute goals. Based upon the Administration's recommendation, there
is a set-aside for consumer-owned utilities and tribes of $25 million.
Each state is in a different position, with different resources and
priorities. The fine work of the Alliance to Save Energy's, Commission
on Energy Policy, recommended a Race to the Top. A wide variety of
groups support this effort.
NASEO also strongly supports this legislation.
The Residential Energy Savings Act of 2013 (S. 1200)
Senators' Sanders and Wyden have introduced the Residential Energy
Savings Act of 2013 (S. 1200). It would provide homeowners with access
to low-cost loans for energy efficiency upgrades. Funds would run
through the states and tribes, but the bill encourages cooperation with
local utilities, financial institutions and others. The key objective
is to reduce the financing barriers by limiting up-front costs. As
energy cost savings generated through buildings upgrades payback over
time, financing programs can be catalysts for energy efficiency
investment.
In Massachusetts, the Mass Saver HEAT loan program has closed
18,371 zero interest loans valued at nearly $155 million from 2006-
2012, for residential energy efficiency upgrades. The program has been
a great success, but we have had to promote it tirelessly, as consumers
often do not understand the value of investing in energy efficiency.
This program is offered through 40 local banks across Massachusetts.
A number of other states' programs are worth stressing, including
the following:
Delaware's SEP funds have supported rebates and loans for
residential efficiency measures through which 3,000 homeowners
have improved their home's energy efficiency. Through the same
program, 96 solar electric systems, 14 geothermal system
installations, one wind system, and one solar thermal hot water
system have been supported with SEP funding since 2010.
Louisiana's Energy Office manages an SEP-funded Home Energy
Rebate Option Program (HERO) that offers cash rebates for
energy retrofits and provides training and quality control for
the energy raters who certify efficiency projects. During the
past two years, more than 1,100 existing homes were
retrofitted, resulting in a 30 percent average increase in
energy efficiency per home completed. SEP funding also
supported energy efficiency designs in 565 new homes, resulting
in a 35 percent average increase in energy efficiency per home.
For the commercial portion of the program, 89 energy retrofits
were completed, resulting in a 25 percent average increase in
energy efficiency.
Nebraska's Energy Office has operated the Dollar and Energy
Saving Loan Program for more than 21 years, which finances
energy efficient improvements in homes, farms, ranches,
businesses, industrial facilities, schools, and other
buildings. SEP funds are leveraged with utility and other funds
for a total loan pool of $36 million. Between 1990 and 2011,
27,339 projects totaling more than $258.7 million have been
financed with low-interest loans from the Energy Office and the
state's 894 participating lender locations. Although the
overwhelming majority of loans are for residential projects, in
the summer of 2011 the first two public compressed natural gas
stations in Omaha were financed with low-interest loans.
Defaults of only $106,000 on the $258 million in loans has
occurred since the program began.
Oregon, in 2010, issued nearly 77,000 Residential Energy Tax
Credits with SEP funding, saving more than $4 million in energy
costs for Oregonians. SEP has also helped fund more than $11
million of projects in 60 urban and rural school districts
across Oregon in the past two years providing for lighting
upgrades, window replacements, HVAC improvements, and biomass
boiler installations, resulting in enhanced learning
environments, reduced energy bills, and contractor jobs. SEP
also provided for energy audits that provided work for audit
firms and students in the local college energy management
program in 101 rural Eastern Oregon school districts
participating in the Governor's School Energy Audit Initiative.
Consumers need more information on energy efficiency. In working
with the Senators' staffs we believe this proposal can really encourage
innovation and public-private partnerships. This will build on the work
of the revolving loan programs that are operated in over 35 states.
Other opportunities include, guarantees, bond financing, on-bill
financing, etc. In order to reduce the cost to the U.S. Treasury, the
bill is designed through loans to states and tribes. The key criteria
are: 1) reduction in energy use and increased energy efficiency; 2)
leveraging of non-federal funds; and 3) consumer-friendly financing
options.
Separate legislation that is not jurisdictional to this committee
would also have a positive impact on residential energy efficiency. The
Sensible Accounting to Value Energy Act of 2013 (SAVE Act), introduced
by Senators Bennet and Isakson, would encourage the consideration of
energy costs in the appraisal process. NASEO supports enabling the
consideration of the energy performance of residential properties
through the appraisal process. This will be a true market
transformation that will build awareness of energy performance and
allow for greater transparency to facilitate more informed real estate
investments. DOER is managing a residential ``HomeMPG'' project, also
funded through a competitive SEP grant award, to provide property
owners in Western Massachusetts with better information about the
energy performance of their homes. The Colorado Energy Office recently
launched a new partnership with The Appraisal Institute to incorporate
building energy elements into a Green Multiple Listing Services (MLS)
program.
Benchmarking and CHP bills
Subcommittee Chairman Franken has introduced two innovative bills
to promote: 1) building benchmarking--to encourage entities to utilize
available resources so they know what they are using in terms of
energy; and 2) Combined Heat and Power (Local Energy Supply and
Resiliency Act of 2013). We support both bills.
Benchmarking has been used in increasing numbers of jurisdictions
so that businesses and consumers know how much energy they are using
and can help bridge the ``information gap.'' As noted above, helping
consumers understand their energy use and their energy use patterns is
a key first step in appropriately increasing energy efficiency as well
as energy conservation behavior. The bill would facilitate benchmarking
of federally-leased buildings, require a benchmarking sturdy, and
establish a small competitive grant program.
There are a number of good state models in the area of public
facility efficiency improvements and benchmarking, such as the
following:
Alaska's program which established a $250 million Alaska
Energy Efficiency Revolving Loan Fund (AEERLF) to finance
public facility energy efficiency improvements, using SEP funds
to benchmark 1,300 public facilities in order to identify
high--energy use buildings and provide an Investment Grade
Audit. SEP funding was also used to develop the Alaska Retrofit
Information System (ARIS) database that holds 60,000 records of
residential energy audits and benchmark data from the 1,300
public facilities.
In addition to Minnesota's groundbreaking benchmarking of
state facilities and the creation of a model Energy Savings
Performance Contracting Program, 36 facilities were retrofit
across the state which are now realizing more than $3 million
in permanent, ongoing annual energy savings through a one-time,
$4.1 million energy upgrade grant program. The grants, funded
through SEP, were completed during the past year and are
contributing significant energy-savings to commercial,
industrial, and nonprofit facilities across Minnesota.
Combined Heat and Power (CHP), district heating and cooling, and
waste-heat-to power are an enormous untapped resource in the United
States. This bill will help begin to address the economic necessity of
encouraging us not to waste energy. Industrial and commercial
facilities throughout the United States presently use these
technologies. Unfortunately, the upfront costs tend to be high. The
positive impacts on economic productivity, especially when measured
against our foreign competition, is critical to our nation's future.
Flexible actions are the key to success. A number of the state energy
offices are involved in promoting these activities. Ohio is among the
states taking action to support industrial efficiency and CHP through
actions such as the state's Energy Efficiency Program for Manufacturers
(EEPM) program, which provides facilitation services and financial
assistance to Ohio manufacturers to diagnose, plan, and implement cost-
effective energy improvements at their facilities, estimates energy
savings of 28,331,432 kwh/year (electric) and 876,349 MMBTU/year (gas,
oil, other) through $21 million in grants supported by SEP. There are
other examples and district heating systems have been operational for
decades. The benefits for economic development cannot be overstated.
Combined Heat and Power (CHP) can be a cornerstone to efficiency
gains and add resiliency, as communities and businesses diversify their
fuel supply. Massachusetts has been effective in driving more adoption
of CHP in our industrial, commercial, institutional, and multiunit
residential sectors. The Commonwealth deploys two mechanisms to support
CHP. The first is through the energy efficiency programs, based on
projected energy savings. The second is through the Alternative Energy
Portfolio Standard, where annual payments are achieved as a matter of
system performance.
The success of these programs is supported by the Northeast CHP
Application Center, one of the regional Centers supported by DOE across
the country. The Northeast CHP Application Center, co-located at Pace
University and the University of Massachusetts Amherst, provides
important policy and market support and technical assessments directly
to industry. Federal funding for this Center is highly leveraged by our
programs and affords opportunities for industrial facilities to drive
down their energy costs.
Tenant Star (S. 1191)
The Bennet-Ayotte ``Better Buildings Act'' (Tenant Star) (S. 1191)
would help address the ``split incentives'' problem that exists which
discourages energy efficiency investments by both tenants and
landlords. The people paying the bill don't generally get the benefits
of energy efficiency investments. This voluntary effort should help
break down these problems. Tenant Star should be read in conjunction
with Section 201 of Shaheen-Portman (S. 761), which would help provide
financing for large and small commercial building energy efficiency
retrofits.
Massachusetts believes that there is a need for a transformation of
the manner in which commercial markets consider energy use and cost.
Information about the energy performance of a building can be difficult
to ascertain and the incentive programs do not always benefit the bill
payer.
In recent years state energy offices and their private sector
allies have tried to address problems such as the split incentive, in
both the residential and commercial markets, and to provide market
actors with more accessible and accurate information about the energy
performance of building assets, with which we believe they are better
able to make informed investments.
For example, a 2012 analysis of the potential gas and electric
savings in Massachusetts' commercial sector suggests that nearly 38
percent of the electric savings and 55 percent of the gas savings
reside in office buildings. In such properties, where a high proportion
of occupants lease space from the building owner, investments in the
building's major assets may be a low priority for owners as the
performance benefit, in the form of lower utility bills and increased
comfort accrue to the tenant. For this reason, DOER and one of the
state's largest utilities,
Northeast Utilities, have convened a Commercial Real Estate Working
Group to address problems such as this split incentive. Additionally,
DOER's Building Asset Rating (BAR) pilot, which is funded by a
competitive SEP grant, seeks to develop new, low cost methods to assess
the energy performance of buildings. These new methods conduct an
analysis in a fraction of the time and cost of conventional techniques
and with a lower barrier to information, DOER hopes they will provide
the market with more information about building energy use to drive
increased investment in energy efficiency.
NASEO also supports this bill.
School Retrofits Legislation (S. 1084)
NASEO also supports the Udall-Collins ``Streamlining Energy
Efficiency for Schools Act'' (S. 1084). Both Senators have worked on
school energy issues for many years. NASEO worked with Senator Udall's
staff in the House when they were first developing energy efficiency
schools legislation. Many of the innovations in school energy
efficiency programs stemmed from the Institutional Conservation Program
(ICP)(42 U.S.C. 6371e), which has not been funded for many years. This
program began in the 1970s, but in 1986, through an amendment to an
annual appropriations bill pushed by Iowa and Oregon (and their
Senators), these states were able to utilize their ICP funds to promote
alternative delivery systems. Oregon had prepared bond financing, which
it implemented, while using the small amount of federal ICP dollars to
support the private financing. It produced much greater leverage. In
Iowa, they established a Schools Facilities Program, in which the state
energy office utilized an RFP to bring in the best financing available,
developed fill-in-the-blank forms for the school superintendents,
prequalified engineers to evaluate energy efficiency upgrade options
and do all the legal work necessary to get the program going. The
hundreds of school districts utilized this program, with private
financing, and it achieved over 100 percent of projected savings with
net-present-value paybacks of less than 6 years for measures.
In Massachusetts, we have several relevant models that we have
implemented in both state and local facilities. The schools sector has
been a real test-bed for energy service performance contracts, and we
would expect that the Udall-Collins bill will help with this set of
activities. The states stand ready to help implement S. 1084, in
conjunction with the schools.
We support the legislation.
Non-Profit Grants Program (S. 717)
Senators' Hoeven and Klobuchar have introduced ``The Non-Profit
Energy Efficiency Act'' (S. 717), which is intended to provide funding
from DOE to non-profits, including religious institutions, to provide
energy efficiency upgrades to these facilities. A number of state
energy offices have programs targeted to non-profits and look forward
to expanding those activities. S. 717 could be a key asset in this
effort. We are concerned that the $50 million authorization takes
funds, generically, from the buildings technology office at DOE, which
is already underfunded. We hope to work with the sponsors and the
outside groups to identify alternatives. Otherwise, the bill is well-
grounded and provides the opportunity for states to work with these
institutions. We have not had the opportunity to examine individual
state laws or constitutional constraints that may limit the ability in
certain areas to provide funding. We have been assured by the outside
groups that this situation has been addressed.
CONCLUSION
We applaud the Subcommittee for holding this hearing. As noted
above, we support the legislation being considered and we encourage an
early mark-up, with full Senate consideration quickly.
Senator Franken. Thank you, Mr. Sylvia.
Mr. Spurr.
STATEMENT OF MARK SPURR, LEGISLATIVE DIRECTOR, INTERNATIONAL
DISTRICT ENERGY ASSOCIATION
Mr. Spurr. Chairman Franken, Ranking Member Risch and
members of the committee, I want to thank you for inviting me
to talk with you today about opportunities to reduce energy
waste and strengthen the resilience of our energy
infrastructure.
My name is Mark Spurr. I'm Legislative Director for the
International District Energy Association. This is a group
formed 104 years ago to improve the efficiency of thermal
energy delivery.
I'm also President of FEB Energy which is an international
consulting firm that focuses on energy efficiency.
I want to congratulate Senators Shaheen and Portman on S.
761. It's an outstanding bipartisan bill that will help
increase energy efficiency in 2 important sectors, buildings
and industry.
I invite the committee to consider the broader picture of
U.S. energy use and how S. 761 can be amended to make
significant additional strides in reducing energy waste. We can
do this by considering not only the buildings and industrial
sectors, but also the potential synergies between these sectors
as well as with a broad array of energy resources that exist in
every State represented at the U.S. Senate. Of particular note
is a huge energy consuming sector that is not considered in S.
761 and that's power generation.
When you look at the total picture of U.S. energy use what
is striking is that based on DOE data 36 percent of total
national energy consumed is wasted, largely in the form of heat
from power generation, industry and buildings. We've heard
several times today a figure of 57 percent which is also
correct. However, given the difficulty of chasing around
millions of cars and trying to harvest the waste heat from the
tailpipes, we're focusing on the waste heat that we have a
prayer of actually recovering. That's the 36 percent.
I know that Senator Manchin has called attention to this
issue in prior committee deliberations on S. 761. Speaking of
power generation, which is currently only 32 percent efficient,
Senator Manchin commented we have a lot of waste there. He's
quite right.
I believe this committee is well aware that combined heat
and power systems are highly efficient. They generate power
while recovering the normally wasted heat boosting efficiency
from the current 32 percent to over 80 percent. DOE has
estimated that increasing CHP from its current 9 percent share
of U.S. electric power to 20 percent by 2030 would create more
than 1 million new high skilled jobs.
So, how do we get there?
It's important to note that CHP is more cost effective at
larger scales. Industrial plants can provide those economies of
scale. So can district energy systems.
District energy systems supply hot water or steam and
chilled water to buildings for space heating, domestic hot
water, air conditioning and industrial process energy. These
systems pool the thermal users to accommodate larger, more cost
effective CHP units. District energy systems exist in all 50
States and cities, colleges, universities, industrial
facilities, hospitals and military bases.
District energy systems are critical to more widespread
implementation of CHP because they provide not only economies
of scale but also because they're usually operated by
organizations that have a long term economic perspective.
Existing district energy systems represent a substantial heat
sink for implementation of combined heat and power.
Beyond CHP, there are plenty of other sources of local
energy, homegrown energy sources that exist in our backyards. I
noted a few examples in my testimony. I would be happy to
elaborate as time permits.
Mr. Chairman, with your permission I'd like to call 6
additional witnesses to this hearing. Their names are Sandy,
Katrina, Ike, Irene, Gustav and Wilma. Beyond huge property
damage these storms resulted in enormous economic losses from
interruption of business operations, reducing output, income
and employment.
For example, Moody's Analytics attributed nearly $20
billion in losses from suspended business activity just due to
super storm Sandy.
CHP and other local energy sources are inherently more
resilient to disruption from natural disasters or other events
that interrupt energy supply from complex and interconnected
grids. CHP systems can be designated to operate in island mode
during a grid outage and have demonstrated that they can keep
the power on, keep businesses running and continue to keep
people warm in the winter and cool in the summer even when the
power grid is down.
I cited a few examples in my written testimony. I'd be
happy to elaborate as we have time.
I urge your support for S. 1205, recently introduced by
Senator Franken. The Local Energy Supply and Resiliency Act
will help industry, universities, hospitals, cities and others
implement combined heat and power, capture industrial waste
heat and use renewable resources for heating, cooling and power
generation. It will also strengthen our ability to keep the
lights on, keep buildings comfortable, keep people safe and
enable uninterrupted business operations during increasingly
common severe weather events.
I greatly appreciate the opportunity to talk with you
today. I would be happy to answer any questions.
[The prepared statement of Mr. Spurr follows:]
Prepared Statement of Mark Spurr, Legislative Director, International
District Energy Association
Chairman Franken, Ranking Member Risch, and Members of the
committee, thank you for inviting me to testify today on behalf of the
International District Energy Association regarding opportunities to
reduce energy waste and strengthen the resilience of U.S. energy supply
infrastructure.
I want to congratulate Senators Shaheen and Portman on S.761--the
Energy Savings and Industrial Competitiveness Act of 2013. It is an
outstanding bipartisan bill that will help increase energy efficiency
in two important sectors: buildings and industry.
I invite the committee to consider the broader picture of U.S.
energy use, and how S.761 can be amended to make significant additional
strides in reducing energy waste. We can do this by looking at energy
efficiency holistically, considering not only the buildings and
industrial sectors but also the potential synergies between those
sectors as well as with a broad of energy sources right in our own
backyards. Of particular note is a huge energy consuming sector that is
not considered in S.761: power generation.
Lawrence Livermore National Laboratory produces a flow diagram
showing the total picture of U.S. energy use, based on data from the
U.S. Department of Energy. I've included the 2011 version as Figure 1*
on the next page. It shows how each source of fuel flows through five
energy-using sectors: power generation, residential buildings,
commercial buildings, industry and transportation.
---------------------------------------------------------------------------
* All figures have been retained in subcommittee files.
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What is striking is that of the total 97.3 quadrillion Btu (quads)
of energy consumed, only 43 percent was converted to useful energy, and
57 percent was wasted (or, in the more neutral term, ``rejected''). Of
the wasted energy, power generation and transportation loom large.
Boiling down the data, Figure 2 shows that 36 percent of our total
national energy use is waste energy--largely in the form of heat--from
power generation, industry and buildings.
I know that Sen. Manchin has called attention to this issue in
prior committee discussion of S.761. Speaking of the power generation
sector, which is only 32 percent efficient, Sen. Manchin commented ``We
have a lot of waste there.'' He's quite right.
Combined heat and power (CHP) refers to a set of technologies for
generating power while recovering the normally-waste heat, boosting
efficiency to over 80 percent. The recovered heat can be used for
industrial process heat, space heating and/or domestic hot water, or
can be converted to cooling for industrial processes or air
conditioning.
CHP currently represents 82 GigaWatts (GW) or about 8 percent of
U.S. power generation capacity, compared to 30 percent or more in
European countries such as Denmark, Finland and the Netherlands.
A recent study estimated a technical potential of 125 GW in
additional CHP capacity in systems below 100 MegaWatts (MW) in size. Of
the technical potential for new CHP capacity, 56 GW is in the
industrial sector and 69 GW is in the commercial sector. Of the total
technical potential, it is estimated that 6 GW has strong economic
potential (payback less than 5 years), 35 GW has moderate economic
potential (payback 5-10 years) and 82 MW has low economic potential
(payback exceeds 10 years).\1\
---------------------------------------------------------------------------
\1\ The Opportunity for CHP in the United States, ICF
International, May 2013.
---------------------------------------------------------------------------
The Department of Energy has estimated that increasing CHP from its
current 9 percent share of U.S. electric power to 20 percent by 2030
would:
Avoid 60 percent of the projected increase in U.S. carbon
dioxide emissions (equivalent to taking half of all U.S.
passenger vehicles off the road);
Create more than 1 million new, high-skilled jobs here in
the U.S.; and
Generate $234 billion in new investments.\2\
\2\ U.S. Department of Energy, ``Combined Heat and Power: Effective
Energy Solutions for a Sustainable Future'' (Dec. 1, 2008), p. 3-4.
Economies of scale make it more cost-effective to install CHP in
sizes above 5 MW, which is why district energy systems are critical to
more widespread implementation of CHP.
District energy systems supply hot water or steam and chilled water
to buildings for space heating, domestic hot water, air conditioning
and industrial process energy. These systems pool the thermal users to
accommodate larger, more cost-effective CHP units. Widespread use of
district energy is the reason that countries like Denmark and Finland
have high levels of CHP.
District energy systems help increase CHP because they pool the
thermal users to accommodate larger, more cost-effective CHP units. 4
District energy systems represent a substantial ``heat sink'' for
further implementation of CHP. Many U.S. cities, colleges,
universities, industrial facilities, hospitals and military bases use
district energy. These systems exist in all 50 U.S. states. Landmark
buildings like the White House, U.S. Capitol and Supreme Court, Empire
State Building, Mayo Clinic and Harvard Medical School use district
energy. District energy systems serve over 8 billion square feet of
building space, equal to 12 percent of total commercial floor space.\3\
About 13 percent of U.S. district energy systems incorporate CHP.\4\
---------------------------------------------------------------------------
\3\ Commercial Buildings Energy Consumption Survey, 2003, U.S.
Energy Information Administration, with updated based on data collected
by the International District Energy Association.
\4\ Energy and Environmental Analysis Inc. and IDEA, District
Energy Services: Commercial Data Analysis for EIA's National Energy
Modeling System, August 2007; unpublished surveys by IDEA, 2003-2009.
---------------------------------------------------------------------------
Beyond CHP, there are plenty of other sources of local energy--
``home-grown'' energy sources that exist today in our backyards. For
example:
Most of the buildings in downtown St. Paul, Minnesota are
heated and cooled using energy that literally comes from
residents' backyards: tree trimmings and other waste wood. This
community waste material is converted to supply heating,
cooling and electricity.
In Detroit, Michigan, the downtown district energy system
fueled with municipal solid waste.
Both the University of Iowa and the University of Minnesota
have used oat hulls, a food processing waste, as fuel.
Lake Cayuga is in Cornell University's backyard. Cornell
constructed a piping system which uses the naturally occurring
cold lake water for air conditioning, cutting power consumption
by 87 percent.
Montpelier, Vermont broke ground in April on a district
heating system to be fueled with local wood.
The Oregon Institute of Technology uses a resource under its
backyard-- geothermal hot water that provides a clean,
renewable source of campus heat.
A BMW manufacturing plant in Spartanburg, SC uses local
landfill gas as a CHP fuel. Combustion turbines produce 11 MW
of electricity as well as process steam.
Cox Interior is a Kentucky company that makes interior and
exterior finishing products. They use wood waste from their
manufacturing process to fuel a 5 MW CHP system, providing
process power and heat.
Hurricanes Sandy (2012), Irene (2011), Gustav (2008), Ike (2008),
Katrina (2005) and Wilma (2005) brought power grids down, causing huge
economic losses in output, income and employment. The Northeastern
blackout in 2003 was not caused by severe weather but by transmission
system failures, but also resulted in substantial economic losses as
data centers, factories, hospitals, offices and other employers shut
down.
The economic losses from energy supply disruption from interruption
of business operations are enormous. For instance, economic research
firm Moody's Analytics attributed nearly $20 billion in losses from
suspended business activity just due to Superstorm Sandy.\5\ Rutgers
recently published a report that estimates economic losses, not
including damages to physical structures, of approximately $11.7
billion in state Gross Domestic Product (GDP).\6\ The study found that
overall GDP losses could have been reduced in New Jersey if there had
been additional backup sources of power such as CHP, which would have
lessened the economic losses associated with power outages.
---------------------------------------------------------------------------
\5\ http://money.cnn.com/2012/10/29/news/economy/hurricane-sandy-
business/index.html
\6\ Rutgers Regional Report, The Economic and Fiscal Impacts of
Hurricane Sandy in New Jersey, January 2013.
---------------------------------------------------------------------------
In 2001 report,\7\ the Electric Power Research Institute (EPRI)
evaluated industrial and digital economy businesses to determine the
economic costs of power outaes and power quality disturbances, focusing
on 3 sectors:
---------------------------------------------------------------------------
\7\ Consortium for Electric Infrastructure to Support a Digital
Society (CEIDS), An Initiative by EPRI and the Electricity
1. Digital Economy (DE) sector: comprised mainly of data
storage and retrieval, data processing, or research and
development operations such as the telecommunications, data
storage, biotechnology, electronics manufacturing, and the
financial industry.
2. Continuous Process Manufacturing (CPM) sector: comprised
of manufacturing facilities that continuously feed raw
materials through an industrial process such as the paper,
chemical, petroleum, rubber and plastics, stone, clay, glass,
and primary metals industries.
3. Fabrication and Essential Services (F&ES) sector: all
other manufacturing industries, plus utilities and
transportation facilities, water and wastewater treatment, and
gas utilities and pipelines.
Although these three sectors only accounted for 17 percent of all
U.S. businesses, they amounted to 40 percent of U.S. GDP. The study
found that industrial and digital economy firms are losing about $45.7
billion per year due to power outages, with an additional $6.7 billion
in costs resulted from power quality disturbances other than outages.
The EPRI study concluded that the cost of power outages for all
industry combined is an estimated at $120 to $190 billion per year.
The total cost of business interruptions from the 2003 Northeastern
blackout, which lasted 2 days, have been estimated as follows: 1)
Anderson Economic Group\8\--$4.5 to $8.2 billion; 2) U.S. Department of
Energy\9\--$6 billion; and 3) ICF Consulting\10\--$7 to $10 billion.
---------------------------------------------------------------------------
\8\ Anderson, Patrick L. and Ilhan K, Geckil, ``Northeast Blackout
Likely to Reduce US Earnings by $6.4 Billion,'' AEG Working Paper 2003-
2, August 19, 2003
\9\ Transforming the Grid to Revolutionize Electric Power in North
America, Bill Parks, U.S. Department of Energy, Edison Electric
Institute's Fall 2003 Transmission, Distribution and Metering
Conference, October 13, 2003.
\10\ The Economic Cost of the Blackout: An Issue Paper on the
Northeastern Blackout, ICF Consulting, August 14, 2003.
---------------------------------------------------------------------------
CHP and other local energy sources are inherently more resilient to
disruption from natural disasters or other events that interrupt energy
supply from complex and interconnected grids. CHP systems can be
designed to operate in ``island'' mode during a grid outage. CHP and
district energy systems have demonstrated that they can keep the power
on, keep factories and business running, and continue to keep people
warm in the winter and cool in the summer even when the power grid is
down.
A recent report for Oak Ridge National Laboratory\11\ notes: ``When
Superstorm Sandy made landfall on the eastern coast of the United
States-New Jersey, New York and Connecticut were the most heavily hit
areas.
---------------------------------------------------------------------------
\11\ Combined Heat and Power: Enabling Resilient Energy
Infrastructure for Critical Facilities, prepared for Oak Ridge National
Laboratory, ICF International, March 2013.
---------------------------------------------------------------------------
Extended power outages affected the region for days. However, some
commercial and industrial facilities in the area were able to power
through Superstorm Sandy due to onsite CHP.'' Here are very brief
summaries of some of case studies presented in that report:
Princeton University--Princeton, NJ.--During Superstorm
Sandy, Princeton disconnected from the grid and used its
district energy CHP system to power the campus. The CHP system
was also able to provide uninterrupted steam and chilled water
service. Many staff members stayed overnight at the University
because of the storm. CHP was vital to maintaining important
university facilities such as research labs, experiments and
data that could have been compromised by a loss of power.
Louisiana State University--Baton Rouge, LA.--For four days
during Hurricane Gustav in 2008, the CHP system provided
electricity to critical sections of the campus. During
Hurricane Katrina, LSU stayed on-line and never lost power,
which allowed the school to continue to operate and allow
administrative offices of the University of New Orleans and the
LSU Medical School to relocate to the main LSU campus.
Nassau Energy Corporation--Garden City, NY.--During
Superstorm Sandy, the CHP system was able to continue supplying
power to the grid, and also maintained the supply of thermal
energy to the Nassau University Medical Center, Nassau
Community College, and all other end-use customers. Nassau
Community College served as an emergency shelter during the
hurricane and provided services to over 1,000 people displaced
by the storm for about a month and a half. A representative
from the Community College said that the College has never
experienced any disruptions in service from the district energy
CHP system.
South Oaks Hospital--Amityville, NY.--South Oaks isolated
itself from the grid on the evening of October 28 and remained
disconnected from the grid for 15 days. South Oaks was able to
provide critical services relying solely on their CHP system.
They admitted patients from other sites that had been displaced
by the storm. They offered refrigeration for vital medicines to
those who had lost power and had no means of keeping medicines
refrigerated.
Greenwich Hospital--Greenwich, CT.--Due to its CHP system,
Greenwich Hospital was able to continue normal operations
throughout the storm. The hospital admitted additional patients
during the outage period. In addition, 150 extra staff stayed
overnight to ensure the hospital remained fully functioning.
Public Interest Data Center--New York, NY.--During the storm
the power to the building and surrounding area was out for over
two days; however, the data center was able to remain fully
operational. Even though the areas surrounding the building
were out of power, employees of PINS were able to come into the
office and resume their normal functions. In addition to
keeping the power and cooling operational for the data center,
the CHP system was also able to provide the building landlord
with power to continue to run their computer and security
systems.
New York University--New York, NY. NYU's core campus
maintained both power and heat during Superstorm Sandy because
of its CHP system. The system provided uninterrupted
electricity, heating, and cooling to the campus, and also
enabled NYU and City officials to set up a command post on the
campus as well as serve area residents forced to evacuate their
homes.
I urge your support for legislation introduced by Sen. Franken. The
Local Energy Supply and Resiliency Act (LESRA) will help industry,
universities, hospitals and others implement CHP, capture waste heat
and use renewable resources for heating, cooling, and power generation.
It will also strengthen our ability to keep the lights on, keep
buildings comfortable and enable uninterrupted business operations.
Industrial competitiveness will be enhanced by LESRA because it
will help steel mills, paper mills and other businesses develop new
revenue streams. LESRA will also help communities, universities and
others reduce energy costs, reduce emissions and enhance energy supply
resiliency.
The bill establishes two programs:
Technical Assistance Program.--The bill establishes a grant
program in the Department of Energy to provide technical
assistance for identifying, evaluating, planning and designing
waste heat recovery systems for the purposes of heating,
cooling, and power generation. This program helps for-profit
and nonprofit entities identify opportunities, assess
feasibility, overcome barriers to project implementation,
conduct financial assessments and perform the required
engineering. Authorized appropriations: $150 million over the
period 2014 to 2018.
Local Energy Infrastructure Loan Guarantee Program.--The
bill authorizes the Department of Energy to provide loan
guarantees to projects that: 1) recover waste heat or use local
renewable energy for heating or cooling: 2) generate power
locally with CHP or renewable energy; 3) distribute power in
microgrids, or 4) distribute heating or cooling energy to
buildings. Reducing interest costs is the key to implementing
highly efficient and resilient energy infrastructure. Unlike
past DOE loan guarantees for innovative technologies, this
program would focus on proven technologies, with the goal of
reducing interest costs for local energy infrastructure. Funds
to carry out the program will come from user fees and unused
funds that were previously appropriated.
Thank you for the opportunity to speak with you today.
About the International District Energy Association
IDEA is a non-profit trade association founded in 1909 to
facilitate the exchange of information among district energy
professionals. IDEA currently has 1733 members in 27 countries, and is
governed by a 20-member, all-volunteer Board of Directors. IDEA's
mission is to foster the success of its members as leaders in providing
reliable, economical, efficient and environmentally sound district
energy services. IDEA promotes energy efficiency and environmental
quality through the advancement of district heating, district cooling
and cogeneration (also known as combined heat and power or CHP).
Senator Franken. Thank you, Mr. Spurr.
Mr. Molotsky.
STATEMENT OF BRAD A. MOLOTSKY, EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY, BRANDYWINE REALTY TRUST, ON
BEHALF OF THE REAL ESTATE ROUNDTABLE
Mr. Molotsky. Good afternoon, Chairman Franken, Ranking
Member Risch and Senator Sanders. Thank you for the opportunity
to testify today. My name is Brad Molotsky. I am the Executive
Vice President and General Counsel of Brandywine Realty Trust,
one of the Nation's largest commercial office building owners
with over 30 million square feet of built and owned space.
I'm here today on behalf of the Real Estate Roundtable
where I currently serve as the Vice Chair of its Sustainability
and Policy Committee. My comments will focus on S. 1191, the
Better Buildings Act introduced by Senators Bennet and Ayotte.
This is a priority initiative for the roundtable and many
other real estate stakeholders. Yesterday a letter signed by
over 50 organizations and companies, representing over 5
billion square feet of built space, including real estate
firms, trade associations and environmental advocates, all
lined in support of the bill was sent to the committee.
The Better Buildings Act is innovative in that it's readily
actionable and potentially transformative energy policy. It
imposes no mandates and as Senator Risch had indicated earlier,
no additional regulations. It comes at no cost to taxpayers
because it builds upon already existing, highly successful
programs already existing with the EPA and DOE which have
already achieved extraordinarily high levels of market
penetration throughout the Nation's commercial real estate
markets.
S. 1191 is unique and powerful and will be a piece of
legislation because it focuses on the end users of energy. In
my sector, which is the commercial buildings environment, this
is the tenant. Tenants in our office buildings tend to use well
over 50 percent of the energy in the building. Lights and plug
loads being the main culprit.
Visualize for a moment all the data, Senators, to law
firms, the banks, the restaurants, the stores that lease space
in commercial office buildings.
Think about the spaces leased in buildings to medical
offices and high tech companies like Google, Facebook and
LinkedIn. Now think in that space about all of the computers,
monitors, printers, coffee machines, vending machines and cell
phone chargers being used each and every day.
Now consider how those office spaces are lit, heated and
cooled. Over 70 billion square feet of built space in the
United States uses these types of devices every single day, 365
days a year.
Now consider how and when those devices are turned off or
down at night and if in fact they are at all.
The Better Buildings Act will help focus attention on these
types of consumption and move the market forward to reduce it.
Meaningful efficiency legislation should, as the bill
indicates, encourage commercial tenants to work with their
landlords to design, construct and operate within leased spaces
to achieve optimal levels of energy performance. That, in fact,
is the Better Buildings Initiative or Better Buildings Act
objective. To date much of the policy coming from Congress and
the Federal agencies focused on what owners can do at the whole
building level. A worthy endeavor and initiative, but it only
hits on half of the puzzle and as I said earlier tenant's
consumption in their built space consumes the other 50 percent
via plug load and lighting.
As Senator Bennet noted in his comments earlier today the
Better Buildings Act recognizes that energy efficiency in
buildings must be tackled both from the top/up and the bottom
or reverse that from the bottom/up and the top/down. S. 1191
centerpiece revision is known as Tenant Star. It would give
tenants in leased spaces the same opportunity for energy
efficiency recognition that building owners like me currently
receive from the EPA through the Energy Star label.
The Energy Star label for buildings is something that has
helped transform the real estate markets by bringing focused
energy consumption within the built environment. It's free and
it's voluntary and it provides a marketing incentive that is a
powerful motivator toward higher performing buildings.
I'd like to refer to pages 9 and 10 of my written testimony
which describes a huge success that Energy Star's building
program has had to date. Namely over 240 thousand buildings in
the United States, out of over 5 million buildings that exist,
use portfolio manager to measure their energy consumption.
While 240 thousand buildings is a mere 5 percent of the
building stock in the United States, in terms of the square
footage it represents, those 240 thousand buildings represent
27.5 billion square feet out of 70 billion square feet of built
space.
Suffice it to say that buildings rated by the EPA's Energy
Star are located in every single State in the country. Energy
Star certified buildings with scores of over 75 represent over
3 billion square feet of that inventory. EPA estimates that
these buildings alone help save businesses more than $2.7
billion annually in energy costs.
Clearly Energy Star for the whole building has positively
impacted the real estate markets. Imagine, however, the added
benefit we would see if tenants also get similar opportunities
for recognition via S. 1191 Tenant's Star program. A national
platform for Tenant Star spaces in Energy Star buildings could
very easily reshape how commercial landlords and tenants
interact together on energy use and help create a more
collaborative exchange between the 2 parties most needed to
overcome inertia to not doing anything in the middle of a lease
term and to breaking down the split incentive barriers that
exist in certain markets of energy efficiency investments.
I speak a bit from experience. Because at Brandywine we've
engaged with a large 125 thousand square foot new tenant Reed
Smith. At the beginning of the lease term, prior to their build
out and connected them with the NRDC Center for Market
Innovation which is doing some ground breaking work on the high
performance lease space demonstration project at the Empire
State Building and elsewhere. This upfront innovative focused
collaborative effort will allow them to save over $1.5 million
over the term of their lease which they can then reinvest in
people, plant and equipment inside their law firm.
With the national Tenant Star platform envisioned by
Senators Bennet and Ayotte there will be important recognition
based incentives to encourage more landlords to work with their
tenants in the common goal of lowering energy consumption
across the United States.
In summary it's my view and that of the Roundtable that
Congress should enact the Better Buildings Act as its earliest
opportunity. Together we can reduce the over $210 billion we
all spend on energy in the built environment. A 10-percent
reduction via energy efficiency gains can and will make a
difference for all of us, each and every year, the gift that
keeps giving.
Saving energy is much less expensive to our Nation and
better, frankly, for our collective health and now the planet
than producing more energy. With this bill it can be done.
Enacting the Better Buildings Act and Tenant Star will help us
take a big step toward making that goal a reality.
I thank you and I appreciate any questions you would have.
[The prepared statement of Mr. Molotsky follows:]
Prepared Statement of Brad A. Molotsky, Executive Vice President,
General Counsel and Secretary, Brandywine Realty Trust, on Behalf of
the Real Estate Roundtable
Introduction
Chairman Franken, Ranking Member Risch, and Members of the Energy
Subcommittee, thank you for the opportunity to testify at this hearing
on pending energy efficiency legislation.
My name is Brad A. Molotsky, and I am the Executive Vice President,
General Counsel and Secretary of Brandywine Realty Trust (http://
www.brandywinerealty.com/.) My curriculum vitae is attached for your
reference. I am currently Vice Chair of the Sustainability Policy
Advisory Committee (SPAC) of The Real Estate Roundtable (www.rer.org),
and appear before you on its behalf. The Roundtable represents the
leadership of the nation's top privately owned and publicly held real
estate ownership, development, lending and management firms, as well as
the elected leaders of the major national real estate industry trade
associations. Collectively, Roundtable members hold portfolios
containing over 5 billion square feet of developed property valued at
over $1 trillion; over 1.5 million apartment units; and in excess of
1.3 million hotel rooms. Participating Roundtable trade associations
represent more than 1.5 million people involved in virtually every
aspect of the real estate business. Gerard H. Sweeney, Brandywine's
President and CEO, is one of The Roundtable's members.
Of the bills that the subcommittee is considering today, my
statement will focus on and emphasize S. 1191, the ``Better Buildings
Act,'' introduced by Senators Michael Bennet (D-CO) and Kelly Ayotte
(R-NH). Companion legislation has also been introduced in the House
(H.R. 2126) by Representatives David McKinley (R-WV) and Peter Welch
(D-VT).
As explained in more detail below, the Better Buildings Act will
help drive commercial real estate markets across the nation to become
more energy efficient through a voluntary, non-regulatory, non-
financial, recognition-based program. This bill requires no
appropriations, because it would build upon existing, highly successful
partnership programs between the Environmental Protection Agency
(``EPA''), the Department of Energy (``DOE''), and the private sector
real estate community. S. 1191 has garnered widespread support from a
diverse group of real estate and energy advocacy stakeholders, as
evidenced by the letters to Senate and House energy committee
leadership that are attached to this statement.
(II) Brandywine Realty Trust and its Commitment to a Sustainable Real
Estate Portfolio
I would like to provide a bit of context as to my company and our
commitment to owning and managing a high performance real estate
portfolio. Brandywine Realty Trust (NYSE: BDN) is headquartered in
Radnor, PA, and is one of the largest, full-service, integrated real
estate companies in the nation. Organized as a real estate investment
trust (REIT), Brandywine owns, leases and manages an urban, town center
and suburban office portfolio of over 30 million square feet with
properties in California, Delaware, Maryland, Metro DC, New Jersey,
Pennsylvania, Texas, and Virginia.
An energy efficient real estate portfolio lowers utility bills and
other operating costs. Minimizing energy use in our buildings is not
simply good business for Brandywine and our tenants, but also responds
to investors who increasingly demand more efficient and
environmentally-responsible performance. Sustainability and energy
efficiency are thus among Brandywine's core values, consistent with an
overall commitment to provide excellent office environments to our
customers, our employees and our vendor service providers. As part of
our management structure, we have established a Sustainability Advisory
Group led by a coordinator who organized a ``Green Team'' that meets on
a regular basis to develop and prioritize corporate-wide policies and
practices, makes recommendations to the Senior Management Committee,
and keeps sustainability initiatives at high levels of awareness in our
company through employee education and discussion programs. The Green
Team is responsible for providing periodic reports to Brandywine's
management and for posting results on-line regarding progress in
minimizing our company's environmental footprint--reflected in policies
such as those that encourage energy conservation in our assets'
heating, cooling and lighting systems; negotiations with tenants and
utilities to realize higher and more efficient performance from our
buildings and spaces; use of sustainability criteria in the purchase of
supplies, equipment, and services; and waste reduction and recycling
platforms to minimize disposables and packaging, and foster the reuse
of equipment and supplies where feasible.
As a result of these and other efforts, Brandywine is proud to have
been distinguished with several of the real estate industry's prominent
awards that recognize leadership in sustainability including an EPA
Energy Star Partner of the Year (2013); Honorable Mention for NAIOP
Sustainable Development Award--2012; Finalist for NAIOP Developer of
the Year 2012 and 2013; Pinnacle Award Winner for our sustainable
efforts; and NAREIT Leader in Light Silver Award winner (2011).
Brandywine's Voluntary Participation in the EPA ENERGY STAR
Program and Tenant Engagement on Energy Efficiency
As S. 1191 draws heavily on the market acceptance of EPA's ENERGY
STAR program for commercial buildings, it is worthwhile to discuss
Brandywine's voluntary commitment to the program. In 2009, eight of the
approximately 260 buildings in our real estate portfolio at that time
were labeled as ENERGY STAR. Today, we have 97 ENERGY STAR-labeled
buildings, representing over 14.5 million square feet of our owned
portfolio as labeled by EPA (i.e., receiving a ``75'' score or higher
on the agency's rating scale). This represents over 50 percent of
Brandywine's owned square footage, and over 75 percent of buildings
where utility meters are in our name and where we can fully benchmark
those assets ourselves. Monthly data from these meters is automatically
fed into EPA's energy consumption benchmarking tool, Portfolio Manager;
no human interaction is needed to direct this data or to return it to
us with our ENERGY STAR scoring. The energy consumption data is then
provided back to us on a per building basis, and shared every month
with our Property Managers for over 205 assets that we presently own.
This process reveals to us the ``top performers'' in our portfolio that
strive for the ENERGY STAR label, and those that can improve their
energy performance with positive impacts from equipment, behavioral
changes, and/or increased education.
As a result of and in connection with Brandywine's voluntary
involvement in the ENERGY STAR program and our use of the Portfolio
Manager benchmarking tool, we have:
Engaged a local company out of Richmond, VA to check 25
buildings in our Pennsylvania portfolio to confirm and fix
metering configurations and assist in reducing consumption;
Developed building-by-building energy plans in our Northern
Virginia portfolio to review and reduce consumption;
Automated our Richmond portfolio with Trane system controls
that measure building energy consumption daily via pulse
meters, and which send warning emails to our engineers when
tolerance is out-of-kilter or if set points (start and stop
times) are off by five percent;
Retrofitted all parking lots serving our Richmond buildings
with LED fixtures--which will save wattage and extend useful
life ten-fold;
Retrofitted lobby and elevator lights in selected buildings
in the Philadelphia, PA central business district, thereby
reducing consumption and extending useful life--and using all
local workers.
Participated in EPA's national ``Battle of the Buildings''
competition--a ``biggest loser'' program to recognize buildings
that lower the most energy consumption over a 12-month period--
where our participating assets have placed in the top 10-15
office buildings nationwide over the last two years.
Finally, while the energy measures I discussed above are steps
Brandywine has taken that are within our control, the work we have
started to better align tenants with our ENERGY STAR-related goals
warrants a brief description. We have directly engaged with a tenant
prospect and connected them with the team at NRDC's Center for Market
Innovation, which is assisting them with an integrated design for their
energy usage in a new leased space ``fit-out.'' This high performance
new tenant space design should save this tenant approximately $1.25
million dollars in utility costs over the leased term (i.e., the
savings are between $.85 to $1.00 per square foot in a 225,000 square
foot leased space). With another set of tenants in the middle of their
leases, we have agreed to a 50/50 split to share the costs of lighting
upgrades. The payback on this effort was less than three years, which
was inside the lease term--a great result for the tenants and for our
building's performance. Also, we have met with various tenants to
engage them in discussions about how they can better manage ``plug
loads'' and lighting loads within their leased spaces via wireless
devices (e.g., Modlet and BERT).
In short, Brandywine's voluntary commitment to ENERGY STAR has had
a profound impact across our real estate portfolio. Creating a brand of
EPA recognition for tenants in our buildings--as the Bennet-Ayotte bill
(S. 1191) would accomplish--will allow us to better engage on energy
efficiency initiatives with our key customer base, and can help achieve
an even higher level of energy performance in our assets.
(III) Fast Facts on Energy Efficiency
As part of an ``all of the above'' energy policy, the Subcommittee
is right to emphasize efficiency legislation. The following ``fast
facts''\1\ from EPA, DOE's Energy Information Administration, and other
sources confirm that the cheapest barrel of oil or the least expensive
kilowatt of energy is the one that is avoided. Programs to encourage
energy efficiency are the most effective and lowest-cost measures in
moving our nation closer to energy independence, and spurring U.S. job
growth in a globally competitive ``new energy economy":
---------------------------------------------------------------------------
\1\ http://www.energystar.gov/ia/business/challenge/learn--more/
FastFacts.pdf.
There are over 5 million commercial buildings and industrial
facilities in the U.S., totaling about 70 billion square feet.
The vast majority of commercial buildings standing today
will be with us for decades and into the middle of this
century. For example, in New York City, as much as 85 percent
of commercial buildings that exist today will still be standing
in 2030.\2\
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\2\ PlaNYC, ``Greater Greener Buildings Plan'': http://www.nyc.gov/
html/gbee/downloads/pdf/greener__greater__buildings__plan.pdf.
---------------------------------------------------------------------------
Commercial buildings account for approximately 20 percent of
the nation's energy consumption, and as much as 80 percent of
energy consumed in urban areas.
The combined average annual energy costs for U.S. commercial
buildings and industrial facilities is $202.3 billion.
About $20 billion can be saved every year if the energy
efficiency of commercial buildings and industrial facilities
improves by 10 percent.
The basic tools to retrofit buildings--like efficient
furnaces, boilers, water heaters, and spray foam insulation--
are manufactured here in the United States and not in China,
Germany, or elsewhere overseas.\3\ Construction workers on
retrofit projects rely on local workforce resources where,
obviously, buildings are located.
---------------------------------------------------------------------------
\3\ http://green.blogs.nytimes.com/2010/03/12/made-in-the-u-s-a-
efficiency-materials/.
---------------------------------------------------------------------------
Saving energy is cheaper than producing energy. Our country
should pursue an ``all of the above'' energy policy, but it is
important to recognize the cost of a kilowatt hour of energy
saved is cheaper than the cost of an equivalent kilowatt hour
of energy produced:
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
--As a result of the $79.7 billion expenditures for office
operations, 1.6 million indirect jobs were created across
all sectors of the economy, about the same number employed
by McDonald's worldwide. This is in addition to the
estimated 2.2 million jobs directly related to the on-site
management and operations of buildings.
With that foundation on the importance that Congress should place
on energy efficiency policy, I appreciate this opportunity to draw the
Subcommittee's attention specifically to ``The Better Buildings Act''
(S. 1191).
(IV) The Better Buildings Act (S. 1191) (a.k.a., ``TENANT STAR'')
Congress should enact S. 1191, sponsored by Senators Michael Bennet
(D-CO) and Kelly Ayotte (R-NH), at the earliest opportunity.
Owners and managers of large buildings report that tenants consume
50 percent or more of their structures' total energy.\7\ Accordingly,
choices made by office tenants in designing and operating within leased
commercial spaces have a great impact on U.S. energy consumption.
Although tenants and building occupants have an essential role to play
within spaces they control to improve overall building efficiency, to
date bills introduced by Congress have focused on how real estate
owners and developers may lower energy consumption at the ``whole-
building'' level. This is only part of the issue. Office tenants like
data centers, law firms, banks, trading floors, restaurants, and retail
stores use high amounts of energy--especially in our nation's growth
centers.
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\7\ See http://www.nrdc.org/business/cgi/process.asp.
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In Brandywine's experience, voluntary education and recognition
programs create motivation for building owners to engage with tenants
who account for vast quantities of the energy consumed by commercial
real estate. S. 1191 is an innovative step forward in federal energy
efficiency policy, because it takes a holistic approach by considering
office tenants' impact on energy consumption. It will synchronize
commercial landlords and tenants toward a common goal of lowering
energy use in built environments across our nation. Notably, the bill
does not impose regulations or mandates on businesses. Rather, the
Better Buildings Act relies on market-driven, non-regulatory, ``best
practices'' and recognition incentives to align building owners and
occupants to cooperatively reduce demands on the energy grid. It
warrants emphasis that this bill does not require new federal spending
or appropriations, because it fits within existing, proven, and
already-funded public-private partnership programs at EPA and DOE.
The Better Buildings Act offers two mechanisms to prompt tenants
and landlords to cooperate on energy efficiency. The first concerns
``best practices'' to encourage high-performance design and
construction of new tenant ``fit-outs'' of spaces in buildings, prior
to the point they are occupied pursuant to the terms of a commercial
lease agreement. The second concerns valuable marketing recognition for
leased spaces after they are occupied, by offering a ``Tenant Star''
label for building occupants that distinguish themselves through high
efficiency operations in the spaces or floors they lease. The ``Tenant
Star'' label will serve to incent positive end-user behavior, help
companies attract and retain like-minded employees, and may satisfy
increasing demands from the shareholder and pension fund communities
that call for investments in environmentally responsible business
concerns.
(1) Best Practices to Encourage New High Performance Tenant
``Fit-Outs''
Commercial tenants are most likely to make structural investments
in the building spaces they occupy at the time they enter into new
leases, or renew leases. S. 1191 would encourage high-performance
design and construction of leased spaces at the point of new ``fit-
outs'' by authorizing DOE to study and learn from private sector ``best
practices'' of how commercially leased spaces are constructed up-front
to achieve high performance, implement cost effective measures with
viable pay-back periods, and ultimately reduce utility costs for
businesses. Based on DOE's study, it may then develop a voluntary
program--with stakeholder comment--to reward and recognize tenants that
design and construct high performance leased spaces.
DOE would be given the platform to draw heavily from the
groundbreaking work by the Natural Resources Defense Council's Center
for Market Innovation (CMI). In particular, CMI is spearheading a
``High Performance Tenant Demonstration Project'' in collaboration with
industry leaders and technical advisors including Goldman Sachs,
Johnson Controls, Jones Lang LaSalle, Malkin Holdings, SKANSKA, and
Urban Land Institute(ULI)/Greenprint.
I strongly encourage the Subcommittee's members and staff to
explore CMI's webpage\8\ to gain a fuller appreciation for this
project, which makes the business case for the design and construction
of cutting edge and efficient tenant spaces. As CMI explains, the
``High Performance Tenant Demonstration Project'':
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\8\ http://www.nrdc.org/business/cgi/.
[A]ims to promote the compounding effect of owner/tenant
collaboration, as tenants who value high performance spaces
choose to locate or remain in buildings with highly efficient
central systems and transparent energy management practices. As
a result, building owners investing in central system energy
efficiency improvements will not only garner operating savings,
but will also gain competitive advantage in attracting and
retaining these high value tenants.
CMI's Project team is modeling, quantifying, documenting, and
publishing the energy savings generated by a series of high
efficiency tenant build-outs, and the corresponding return on
the tenants' respective incremental investments in the
installed energy performance measures (EPMs). The Project case
studies will also note the value placed by tenants on various
other advantages to these build-outs, including furthering
corporate social responsibility goals, and increasing employee
attraction, retention, and productivity.
The CMI website contains a ``how to'' design guide, case studies,
and describes a replicable ``optimization process'' for commercial
landlords and tenants to consider how various energy performance
measures can be packaged to reduce loads and manage occupant behavior
in leased commercial spaces. CMI's work shows that its process--used in
actual buildings (such as the Empire State Building) during the early
stages of build-out and design of leased spaces--can provide 30 to 50
percent energy use savings compared to a standard code compliant space.
The payback period for these measures is three to five years, ensuring
that these projects ``pencil out'' and make for sound investment
choices given the duration of commercial leases (generally around 10
years) in the nation's urban and suburban growth centers.
The Bennet-Ayotte bill fills a market need in providing commercial
landlords and tenants with information and ``best practices''
guidelines to select, design, build, and occupy spaces that will make a
significant difference in energy usage and operations across the U.S.
real estate sector.
(2) Opportunities for Voluntary ``Tenant Star'' Recognition
in Existing Leases
In addition, once tenants move into their leased spaces, they
should be able to gain recognition for energy efficient behaviors as a
marketing tool to advertise to their own customers, investors, and
other audiences. S. 1191 furthers this objective by authorizing EPA and
DOE to develop a new program for a voluntary ``Tenant Star'' label.
Such a program would build upon the widely successful ENERGY STAR label
that is already available for real estate owners at the whole-building
level.
The ENERGY STAR label for buildings has been available since 1999.
Its growth, popularity--and impact--are well-documented.\9\ Across the
U.S., owners strive to voluntarily distinguish their buildings as
ENERGY STAR rated, to attract tenants and satisfy investor demands. The
Better Buildings Act brings this market-based program to the next
level--with a tenant-oriented certification for leased spaces. Today's
ENERGY STAR is based on whole- building recognition for ``top of the
class'' energy performers. The Bennet-Ayotte bill correctly tackles
energy efficiency as an issue that the commercial real estate sector
must advance from both the ``top-down'' and ``bottom-up.'' It would
enable ``Tenant Star'' certified spaces within ``ENERY STAR'' whole-
buildings and thereby transform--in a non-regulatory way--how building
owners and their tenants think about energy efficiency.
---------------------------------------------------------------------------
\9\ See ``Celebrating a Decade of ENERGY STAR Buildings,''
available at: http://www.energystar.gov/
index.cfm?c=business.bus__ES__bldgs
---------------------------------------------------------------------------
Just as ENERGY STAR has dramatically improved how real estate
owners, utilities, governments, and businesses interact to improve
energy efficiency in buildings and lower energy costs, ``Tenant Star''
has vast potential to do the same. Please consider the following:
ENERGY STAR buildings are located in all 50 states. Any
member of Congress can find where these buildings are located
in their states or districts with EPA's easy-to-use on-line
locator tool.\10\
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\10\ http://www.energystar.gov/
index.cfm?fuseaction=labeled__buildings.locator.
---------------------------------------------------------------------------
Attached at the end of this statement are fact sheets\11\
that EPA makes available on its website. They show the
geographic range of cities and real estate markets from coast-
to-coast that boast the most ENERGY STAR labeled buildings.
---------------------------------------------------------------------------
\11\ See ``Data Trends'' series: http://www.energystar.gov/
index.cfm?c=business.bus__energy__star__snapshot
---------------------------------------------------------------------------
EPA's facts sheets also explain that:
--As of December 2012, more than 20,000 ENERGY STAR certified
buildings across America helped save more than $2.7 billion
in annual utility bills.
--The cumulative number of ENERGY STAR certified buildings
increased by more than 24 percent from 2011 to 2012,
representing more than 3 billion square feet of floorspace
nationwide. In 2012 alone, more than 8,200 buildings earned
EPA's ENERGY STAR certification. The program is thus
experiencing great growth.
--ENERGY STAR certified whole-buildings use an average of 35
percent less energy and emit 35 percent fewer greenhouse
gas emissions than typical buildings.
--As of December 2011--on a voluntary basis--organizations have
used the ENERGY STAR benchmarking tool known as ``Portfolio
Manager,'' to track and manage the energy use of over
260,000 buildings across all 50 states, representing nearly
28.2 billion square feet--that is, nearly 40 percent
penetration of the commercial real estate market.
--ENERGY STAR certification is good business for commercial
building owners. Studies show that ENERGY STAR labeled
buildings may command higher rents, have less volatile
occupancy rates, and can command higher selling prices than
otherwise similar conventional buildings.
With these metrics for success at the whole-building level, the
Better Buildings Act sets the stage for further innovation through
voluntary recognition for commercial office tenants that may cooperate
with their landlords to earn the ``Tenant Star.'' The Bennet-Ayotte
bill would help to further unleash the economic and environmental power
of the ENERGY STAR brand, through the innovative next step of allowing
tenants to join their landlords in striving for--and reaching--higher
levels of energy performance, and giving them the tools they need to
understand how much energy is consumed by the devices and equipment
they control within their leased spaces.
Thank you again for this opportunity to testify on behalf of The
Real Estate Roundtable on the important topic of energy efficiency, and
S. 1191 in particular. I look forward to answering the committee's
questions.
Senator Franken. Thank you, Mr. Molotsky.
Mr. Diament.
STATEMENT OF NATHAN J. DIAMENT, EXECUTIVE DIRECTOR FOR PUBLIC
POLICY, UNION OF ORTHODOX JEWISH CONGREGATIONS OF AMERICA
Mr. Diament. Subcommittee Chairman Franken and Ranking
Member Risch and members of the subcommittee, thank you for
inviting me to participate in today's hearing. My name is
Nathan Diament. I'm the Executive Director for Public Policy of
the Union of Orthodox Jewish Congregations of America.
But I'm not here today just representing the largest
Orthodox Jewish umbrella organization in the United States and
our nearly 1,000 congregations. I'm here representing a diverse
coalition of faith based and other non-profit sector groups
including the U.S. Conference of Catholic Bishops, National
Council of Churches, the YMCA Association, the Association of
Art Museum Directors, Jewish Federations of North America and
more. Our organizations all strongly support S. 717, the Non-
Profit Energy Efficiency Act sponsored by Senators Klobuchar
and Hoeven.
We appreciate your consideration of this legislation today.
As you know our organizations and so many others in the
non-profit sector provide an array of social welfare,
educational, recreational and communal across this country to
people from all walks of life. But across the diversity of
services we provide and citizens we serve we have at least one
thing in common, our training workshops, English language
classes, soup kitchens, clothing co-ops, tutoring sessions,
homeless shelters, health clinics and more all take place in
buildings. Some of those buildings are quite old and quite
drafty, but they must be warmed in the winter and cooled in the
summer.
According to the EPA non residential buildings in the
United States consume more than $200 billion annually in energy
costs. Among those many buildings are this country's 2,700
YMCAs, 2,900 non-profit hospitals, 17,000 museums and more than
370,000 houses of worship. Looking just at the house of worship
sector, the EPA, based on its Green Congregations project
estimates that these entities could cut their energy use and
costs by one-third through energy efficiency improvements.
If America's houses of worship cut their energy use by just
10 percent, the EPA estimates that would save 1.8 billion
kilowatt hours of electricity and reduce 1.3 million tons of
greenhouse gas emissions, the equivalent of the emissions of
240,000 cars. We, in the non-profit sector are eager to achieve
these results by updating and replacing outdated and
inefficient energy systems. Unfortunately the front end costs
to make these improvements and retrofits are very high. For the
non-profit charity world, the hurdle of these front end costs
is even higher to surmount because we cannot just raise the
prices of our widgets we sell or take on greater debt to
finance them. Candidly a new HVAC unit or boiler in the
basement is not the most exciting project to pitch to even the
most deeply dedicated donor to our institutions.
Moreover while there have been and still are a variety of
State and Federal financial incentives to making energy
efficiency retrofits, they are often in the form of tax credits
and rebates which are, of course, not available to tax exempt,
non-profit charities. That's why we are supported the
Klobuchar/Hoeven proposal which will create a pilot program in
the Department of Energy to award financial grants to non-
profits for energy efficiency building improvements. Under S.
717, non-profits could apply for grants for up to 50 percent of
the cost of an energy efficiency retrofit project with a
maximum grant of $200,000.
The legislation authorizes an appropriation of $50 million
for each of the fiscal years 2014 through 2017 and identifies
an offset for those funds.
We are confident that by making these funds available in a
cost sharing program Congress would enable non-profits to raise
or borrow the balance of the funding needed for an energy
efficiency project and thus leverage public funds as they
should.
We also suggest that S. 717' program would be a catalyst
for job creation as non-profits would finally be able to
undertake deferred projects and generate demand for the
products and the contractors to install them.
Finally, the Federal investment in the non-profit sector's
energy efficiency would be leveraged through our sector's
social capital to generate greater private action and
investment toward efficiency. This would recognize the 2010
report of the President's Advisory Council on faith based
partnerships which spoke of this multiplier effect for
congregations.
Senators, the Orthodox Union and our coalition partners
appreciate and support your efforts to enact broad and
impactful energy efficiency legislation including the various
other bills before the subcommittee today as well as other
legislation pending before the Senate. Improving America's
energy efficiency is, in our view, critical for the long term
welfare of our Nation's environment and economy. We hope you
recognize and support S. 717, aiding the non-profit sector as a
complementary effort to those other bills.
But if I may, I'd like to conclude with an important note
that improving energy efficiency and reducing harmful pollution
is not just a matter for the economy and the environment. From
our perspective it's also a matter of values. God charged us
with a mission to be his partner in creation to work the Earth,
but also in Genesis 2:15 spoke of our mission to preserve the
Earth.
As you Senators work to enact legislation to help us be
good stewards of God's creation and our energy resources and
environments, you are serving this mission as well. For that,
we thank you.
[The prepared statement of Mr. Diament follows:]
Prepared Statement of Nathan J. Diamenti, Executive Director for Public
Policy, Union of Orthodox Jewish Congregations of America
Subcommittee Chairman Franken, Ranking Member Risch and Members of
the Subcommittee--thank you for inviting me to participate in today's
hearing. My name is Nathan Diament and I am the Executive Director for
Public Policy of the Union of Orthodox Jewish Congregations of America.
But I am not here today just representing the largest Orthodox
Jewish umbrella organization in the United States and our nearly 1000
congregations, I am here representing a diverse coalition of faith
based and other nonprofit sector groups--including the U.S. Conference
of Catholic Bishops, the National Council of Churches, the YMCA
Association of the USA, the Association of Art Museum Directors, Jewish
Federations of North America and more.
Our organizations strongly support S.717--the Nonprofit Energy
Efficiency Act--sponsored by Senators Klobuchar and Hoeven. We
appreciate your consideration of this legislation today.
As you know, our organizations--and so many others in the nonprofit
sector--provide an array of social welfare, educational, recreational
and communal services across this country to people from all walks of
life. But across the diversity of services we provide and citizens we
serve, we have at least one thing in common--our job training
workshops, English language classes, soup kitchens, clothing co-ops,
tutoring sessions, homeless shelters, health clinics and more all take
place in buildings. Some of those buildings are quite old and drafty,
but they must be warmed in the winter and cooled in the summer.
According to the EPA, nonresidential buildings in the United States
consume more than $200 billion annually in energy costs. Among those
many buildings, are this county's 2700 YMCAs, 2900 nonprofit hospitals,
17,000 museums and more than 370,000 houses of worship. Looking just at
the houses of worship sector-- the EPA, based on its ``Green
Congregations'' project,\1\ estimates that these entities could cut
their energy use--and costs--by one third through energy efficiency
improvements. If America's houses of worship cut their energy use by
just ten percent, the EPA estimates that would save 1.8 billion kWh of
electricity and 1.3 million tons of greenhouse gas emissions,
equivalent to the emissions of 240,000 cars.
---------------------------------------------------------------------------
\1\ http://www.energystar.gov/
index.cfm?c=small__business.sb__congregations
---------------------------------------------------------------------------
We are eager to achieve these results by updating and replacing
outdated and inefficient heating and cooling systems, lighting and
other electrical systems, windows and doors and more. Unfortunately,
the ``front end'' costs to make these improvements and retrofits are
very high. For nonprofit charities, the hurdle of these front end costs
is even higher to surmount because we cannot just raise the prices of
the widgets we sell or take on greater debt to finance them. Candidly,
a new HVAC unit or boiler is not the most exciting project to pitch to
even deeply dedicated donors to our institutions.
Moreover, while there have been (and still are) a variety of state
and federal financial incentives for making energy efficiency
retrofits, they are typically in the form of tax credits and rebates--
which are, of course, unavailable to tax exempt, non-profit
charities.\2\
---------------------------------------------------------------------------
\2\ At the federal level, the Energy Policy Act of 2005 enacted
Section 179D of the Internal Revenue Code, providing a one-time
accelerated depreciation for commercial, multifamily, and public agency
owned facilities; there are also federal tax credits available for
residential homeowners installing energy efficiency improvements http:/
/www.energystar.gov/index.cfm?c=tax__credits.tx__index
---------------------------------------------------------------------------
This is why we are supporting the Klobuchar--Hoeven proposal which
will create a pilot program in the Department of Energy to award
financial grants to nonprofits for energy efficiency building
improvements.
Under S.717, nonprofits could apply for grants for up to 50 percent
of the cost of an energy efficiency retrofit project--with a maximum
grant amount of $200,000. The legislation authorizes an appropriation
of $50 million for each of the fiscal years 2014-2017, and identifies
an offset for those funds.
We are confident that making these funds available--in a cost
sharing program--will enable nonprofits to raise or borrow the balance
of the funding needed for an energy efficiency project, and thus
leverage public funds as they should.
We also suggest that S.717's program would be a catalyst for job
creation as nonprofits would finally be able to undertake deferred
projects and generate the demand for new HVAC systems, windows and
insulation as well as the contractors and workers to install them.
Finally, the federal investment in the nonprofit sector's energy
efficiency will be leveraged through our sector's social capital to
generate greater private action and investment toward energy
efficiency. As was stated in 2010 by the President's Advisory Council
on Faith Based Partnerships:
Houses of worship can exert a powerful influence when they
practice good energy stewardship . . . Similarly, actions taken
by nonprofit organizations can serve as an important role model
for their employees, volunteers, and beneficiaries. There is a
multiplier effect as congregants and nonprofit participants
adopt the energy-saving practices in their homes and
businesses\3\
---------------------------------------------------------------------------
\3\ Report and Recommendations to the President; Environment &
Climate Change-- http://www.whitehouse.gov/sites/default/files/
partnerships-environment-climate-change.pdf
Senators--the Orthodox Union and our coalition partners appreciate
and support your efforts to enact broad and impactful energy efficiency
legislation, including the various other bills before the Subcommittee
today, as well as other legislation pending in the Senate.
Improving America's energy efficiency is, in our view, critical for
the long term welfare of our nation's environment and economy; and we
hope you recognize and support S.717--aiding the nonprofit sector--as a
complementary effort to these other bills.
But if I may, I would like to conclude with an important note--that
improving energy efficiency and reducing harmful pollution is not just
a matter of the economy and the environment. From our perspective, it
is also a matter of values.
God charged us with the mission to be His partner in creation--to
``work'' the earth; But God also charged us to ``preserve'' it.
(Genesis 2:15)
As you, Senators, work to enact legislation to help us be good
stewards of our energy resources and environment, you are serving this
mission as well.
For that, we thank you.
Senator Franken. Thank you, Mr. Diament.
The Chair of the full committee, Chairman Wyden, is here. I
know that you'd like to make a few remarks, sir.
STATEMENT OF HON. RON WYDEN, U.S. SENATOR
FROM OREGON
The Chairman. Thank you very much, Mr. Chairman. I will
make them very, very few. I apologize for just parachuting in
and having to go out again. But I want to commend you and
Senator Risch for holding this very important hearing.
You know, I think it's very clear if you look at the
President's address today, whether one agrees or disagrees with
a particular part of it, there is strong support for energy--
efficiency, what you and Senator Risch are looking at this
afternoon. Certainly the Shaheen/Portman legislation, which we
hope to have on the floor early in July after we come back from
the work period, is an example of it.
It has exceptional bipartisan support. The Chamber of
Commerce and the Business Roundtable understand it makes sense.
It's jobs. It's the quality of life that empowers our
communities.
You're going the next step today which is to look at bills
that would complement the Shaheen/Portman legislation. I very
much appreciate that you're doing it because the fact is all of
these bills that constitute the energy efficiency agenda put
points on the board in the fight against climate change which
you, Mr. Chairman, have hammered away at. Senator Sanders has
hammered away at it.
We talked about it this morning; the NOAA finding, in terms
of concentration, we're talking about 400 parts per million
now. This is not something made up by an advocacy group. This
is the government's finding. I think it reaffirms how important
the energy efficiency agenda is.
I commend you and Senator Risch for tackling something
which is demonstratively bipartisan. I'm glad you're holding
this hearing.
I also want to commend the leadership of Senator Sanders.
I'm very proud to join him in this effort to try to use the
States in a creative role to promote energy efficiency. I think
we all understand.
It really stems from earlier days, the earliest days of our
Republic, that we wanted to use the States as a laboratory to
try out fresh, creative approaches. Senator Sanders, in my
view, deserves considerable credit for really zeroing in on the
energy efficiency needs of homeowners. So I am proud to be a
partner in this Sanders effort.
I think it really--without mandates, without requirements,
the participation is voluntary--really targets in a way that I
think it'd be very effective in the energy efficiency area. I
want to commend my colleague from Vermont. Again, apologize to
Senators for my bad manners to just be here so shortly. The
Intelligence Committee is meeting now and I'm being brought
back to that.
But I want to commend all of you and especially Senator
Sanders for his good work on this. I thank you.
Senator Franken. Thank you for your statement.
Now we're going to go to questions, but first Senator
Sanders, would you like to make a statement?
STATEMENT OF HON. BERNARD SANDERS, U.S. SENATOR FROM VERMONT
Senator Sanders. I would just very briefly. I want to thank
Senator Wyden for his work and thank you and Senator Risch for
holding the hearing and the fine testimony from all of our
panelists.
Here's the issue. Let me boil it down and maybe somebody
agrees with me, maybe they don't. In my view, global warming is
real. It is the major crisis facing our planet.
We have already seen many of the disastrous impacts of
global warming today. If we don't get our act together in terms
of extreme weather disturbances, floods, droughts, fires, it
will only get worse in years to come.
There are a lot of ways we can tackle this problem. I've
got legislation in global warming. But what Senator Wyden and I
are trying to do is something enormously simple. What every one
of you has said and what every American understands is we are
an enormously wasteful society. We all agree on that. We all
agree that the lowest hanging fruit, the easiest way to save
energy is through energy efficiency.
One of the great stumbling blocks is that while millions of
Americans want to be involved. They want to make their homes
more energy efficiency. They want to move to sustainable
energy. They understand that they could cut their fuel bills,
play a role in protecting our environment.
What the problem?
The problem is they don't have the $10,000, $15000, $20,000
that they need in order to become energy efficient.
The beauty of what, in a sense, all of us are talking
about, but what Senator Wyden's bill and my bill does, is say
to these people, look, we are going to lend you. Each State
will do it in a different way. We're going to lend you the
money.
You're going to save, I think it was Mr. Molotsky or
somebody talking about 20, 30 percent reduction. You're going
to save in your home 20, 30, 40 percent. You know what? You're
going to pay back the loan with that savings.
Now if that doesn't make sense to everybody, I can't see
that this is a partisan issue. We're lending people money.
They're going to pay that money back by saving energy and at
the same time we cut greenhouse gas emissions.
You know what else we do? Somebody has to make those
products. Somebody has to install those products. You create
jobs.
So if this is not a win/win/win situation of which there
should be no ideological opposition. I cannot understand why we
all can't come together on this.
So I look forward to working with you, Mr. Chairman,
Ranking Member Risch, certainly Senator Wyden and everybody
else. With all of your help to bring forth this legislation.
Thank you very much.
Senator Franken. Thank you, Senators Sanders.
Now we'll start the questions. I'll go first, then the
ranking member and then we'll go to Senator Sanders.
I'd like to start with Mr. Spurr. Thank you for coming from
Minnesota.
I'd like to discuss distributed energy with you, in
particular combined heat and power, CHP. As you said in your
testimony in the United States up to 36 percent of all energy
we consume is lost from power plants, industrial facilities and
buildings as waste heat. Combined heat and power or co-
generation and district energy systems are available, tested
the technologies that can be used to capture waste heat and put
it to use.
In Minnesota the city of St. Paul, as a biomass district
energy system, it's a great model on how to do this. By using
more of our abundant biomass more efficiently we can support
more forest jobs, invest in our power infrastructure and
provide environmental benefits.
Senator Risch has pointed out that we need to be doing a
better job of getting rid of the hazardous fuel in our forests
to prevent forest fires. We can do that. Use the biomass we get
out of this to power our combined heat and power systems or our
district energy plants.
Mr. Spurr, I know that you've been working with the city of
Grand Marais on the north shore of Lake Superior and others
throughout Minnesota to deploy combined heat and power in other
distributed energy systems. Can you talk about the level of
interest that you've received from communities there and
elsewhere in the country?
Mr. Spurr. Alright. Thanks very much for that question,
Senator Franken.
We're seeing an enormous increase in the interest of
communities large and small in becoming more efficient and in
using the resources in their own backyards.
You mentioned fire hazard. That actually was the initial
motivation by the city of Grand Marais to develop a biomass
district heating system. When I first went up to Grand Marais
to talk with folks there I usually ask people, well, why are
you interested in this? When the guy, who was on the Public
Utilities Commission, said fire, I was taken aback. I was
expecting energy or jobs or what not.
It's certainly true, certainly in Minnesota and I think, in
many other places the decline of the forest products industry
has led to a lot of forests becoming what the foresters call
decadent. In other words they're falling in on themselves.
They're becoming fire hazards.
So one of the things that I think is a tremendous
opportunity is to take that problem and turn it into a positive
for the communities.
But beyond biomass and smaller communities that don't have
natural gas. They rely on fuel and on propane. There's also
strong interest by larger communities that do have natural gas
but are very much interested in the resiliency of having a CHP
system serving their downtowns.
I think this is really a turning point in this country.
Many other countries have long had municipal governments
getting it when it comes to energy opportunities and reducing
energy waste. I'm seeing a great growth in the U.S. now.
Thank you.
Senator Franken. I wish Senator Risch had been here to hear
that. But we'll make sure that he, you know, has access to that
testimony because he's someone who has a degree in Forest
Management. This is something that he talks about a lot which
is these hazardous waste materials that are on the forest floor
in the forests that we need to harvest if we're going to
prevent the kind of wildfires that we've had.
I'd just like to follow up on combined heat and power. I
have a feeling that when Senator Risch comes back we'll maybe
have a couple rounds to be able to do it.
Can you talk, Mr. Spurr, about how combined heat and power
could be helpful to utilities, to electric utilities?
Mr. Spurr. Thank you, Senator Franken.
I do think sometimes when you bring up combined heat and
power to utilities they can approach it with a bit of
trepidation. Because in many cases these facilities, these
combined heat and power facilities, are being developed by
somebody other than that utility. But in fact, combined heat
and power can really be a great partner for electric utilities.
Utilities have a tough time when the July afternoon comes.
It's 95 degrees and the power demand is peaking. It's a
challenge meeting that peak power demand not only from the
standpoint of generation because it requires them to bring on
inefficient, expensive, usually dirty power generating plants.
But also oftentimes they're having a tough time getting the
power into the load centers relative to transmission
constraints. So combined heat and power systems can actually
help electric utilities solve problems and manage the grid
better.
A great example is Princeton University. They have, not
only a combined heat and power system, but also a thermal
energy storage system. So they make chilled water at night when
power is cheap and clean. Store it in big tanks and use it in
the daytime to meet peak power demands.
They've been able to reduce their peak power demand from 27
megawatts to 2 megawatts, more than a 90 percent decrease
through the use of, what I think of, is the dynamic duo. It's
combined heat and power and thermal energy storage. I think
oftentimes when utilities stop to think about it they realize
hey, this is actually helping us do our job. I'm hoping more
utilities will look at it from that perspective.
Senator Franken. Thank you. I understand the Princeton
stayed on line because they had a combined heat and power
plant.
Mr. Spurr. Yes, that's a----
Senator Franken. During Hurricane Sandy. I'll get to that
maybe in a while, but about the resilience of these systems in
these hurricanes.
Let me move on. I'll come back to other, the combined heat
and power. But let's talk, Mr. Nadel, about data.
One of challenges improving energy efficiency in buildings
is lack of important data. Unless we really know how well our
buildings are performing, we can't be sure what types of energy
efficiency technologies will be the most effective. That's why
the city of Minneapolis and there are others around the country
have begun looking at energy data disclosure policies for large
commercial buildings.
I would like to help more cities take advantage of these
opportunities. To that end I have introduced legislation to
provide grants to utilities and their partners to help them
work with building owners and pursue energy benchmarking and
disclosure. Now Mr. Laskey's company, Power, is doing great
work based on the idea that if you tell people how much energy
you are using and how their energy consumption compares to that
of their neighbors, that will lead people to change their
behavior. How they use energy and how much they use. That will
lead to energy savings.
I think we can get energy savings by applying this model to
the commercial building sector. So Mr. Nadel, is there evidence
that that same basic idea that more information energy can lead
to energy savings can be applied at the commercial level? Can
you talk about how energy disclosure in large commercial
buildings can lead to improved energy use and money being
saved?
Mr. Nadel. Yes. You are absolutely right. Providing that
information to the building owner so that they can understand
it and then to decide to act can be very influential. As I
mentioned earlier, EPA has found that average energy savings
among buildings that have been benchmarked has averaged 7
percent over about, a multiyear period.
Do a little bit 1 year. Do a little bit more. So 7 percent
savings is very significant.
You also pointed out a number of cities that are doing--
going farther. Are understanding they are well on the path to
achieving additional energy savings. Because in this way not
only the building owner gets the information but in some of
these cities the information is also provided to perspective
purchasers, perspective renters and therefore there is--creates
a demand for these more efficient buildings.
I do know that it's been shown by Costar that occupancy
rates tend to be a little bit lower in buildings that are
Energy Star lead certified. Rents tend to be a little higher.
So these are ways if the tenants can understand what the
benefits are they can create a benefit as well.
Thank you.
Senator Franken. They can have a more desirable building.
Mr. Nadel. Exactly.
Senator Franken. Somebody talked about the Empire State
Building earlier. Maybe it was in the earlier testimony by one
of the Senators, but my understanding is not did it save an
incredible amount of energy, but also drove up the cost of the
tenants, the rent.
Mr. Nadel. Right.
Senator Franken. Why can't I think of the word?
So let's go to Mr. Laskey and Mr. Molotsky.
What, in your view, should we be doing to maximize energy
efficiency of commercial buildings?
Mr. Laskey. I think your proposal is an excellent one.
Providing the data is one first piece. I think doing it absent
the utilities though is there's an opportunity to engage the
utilities. After all even in commercial buildings the amount of
money that goes to energy is relatively low. We have relatively
low energy prices in this country.
In households the average American household spends less
than 2 percent of their income on household energy. So even the
promise of cutting that by 50 percent is not significant
savings for ordinary people. So, engaging cities as you have
and as you propose in your legislation, but also engaging
utilities which have the scale to act across multiple buildings
across multiple tenants, I think, is a necessary step in
addition to making the data available.
Senator Franken. Mr. Molotsky.
Mr. Molotsky. Yes, Senator Franken. Thank you for the
opportunity.
I'd just add a couple of points to that. It goes back to
your original opening comments.
It's giving people information to make informed decisions,
I think. So 7 different things.
Creating a national equipment data base where owners, like
me and friends and colleagues like us that own a lot of square
footage, can go without having to be nipped at by 50 different
vendors. So an objective national equipment data base that
tells us what the return on the investment is in particular
environment at a particular tariff rate would be extremely
helpful.
Assistance with national policy and/or discussion with
utilities to provide us, the owner, with real time data would
also be extraordinarily helpful. In certain sectors of the
country the utilities do share that data. In others, it's much
more difficult to obtain. So I own the building, yet I need to
get permission from the tenant, who has a meter in the
building, to get their consumption data. Difficult in order for
me to move a conversation forward, in order to reduce
consumption if I don't know what they are consuming.
A national repository of case studies for different
buildings and what they've been able to achieve and how quickly
they've been able to get a return on their investment would be
helpful.
Education, frankly. Resources for training of building
owners and engineers on energy efficiency and frankly, where to
start. I'll have a conversation with informed folks in this
room but once we leave it folks are a little bit less informed
as to--they are overwhelmed with the information. They're not
exactly sure where to start. So education.
Continued support for portfolio manager and what Energy
Star has been able to do. Again, a free resource, online, easy
to access, easy to use, good information.
I think following up on some earlier conversations with
this committee and the Tax Committee. Liberalization of 179(d)
which is a great tool which has not been used under the tax
code to provide for tax deductions for energy efficiency
upgrades to create a sliding scale and to allow that deduction
to be portable so that folks like to my left, who are
501(c)(3)'s that can't use that. But then they can assign it to
the installer to reduce the cost of the equipment. That type of
initiative would start to, again, start to move the discussion
along.
Senator Franken. Thank you.
In crafting this we've been very conscious of partnering
with utilities. So it's very important. My bill provides
grants, $2.5 million in grants to utilities and utility
partners to help building owners develop these benchmarking
practices.
Is there any, I mean, what is the data on benchmarking,
just----
Sure, Mr. Laskey.
Mr. Laskey. So we've been able to demonstrate now over 5
and a half years that in the residential sector across, now
more than 8 million homes, on average just by providing people
benchmark data, proactively delivered to them. The importance
of engaging utilities is that this table is filled with energy
geeks. But most of the voters and citizens out there are not
energy geeks.
Senator Franken. Oh, I don't know.
[Laughter.]
Mr. Laskey. In Minnesota I wouldn't discount it.
[Laughter.]
Mr. Laskey. But so the utilities have the ability to
proactively deliver this information not just about making the
information available for some geek or ordinary citizen to come
find but actually delivering it. When you deliver that data on
average in the residential sector you can reduce consumption by
between 2 and 3 percent just on behavior. Then that in turn
spurs interest in larger investments in the home whether it's
insulation, new appliances, lighting, etcetera. Those numbers,
of course, grow over time in terms of the total impact.
Two to 3 percent is diminimus in any one home, but across
millions of homes it adds up to quite a bit of energy.
Senator Franken. What about the evidence in commercial
buildings?
Mr. Molotsky. Again the use of Energy Star and when you,
kind of, marry that with either voluntary or mandatory
benchmarking the trajectory is left side of the page to the
right side of the page, almost straight up.
The number of buildings that have been included in
portfolio manager on Energy Star in their numbers is rather
extraordinary. So that 240,000 buildings I was alluding to
earlier most of that is in the recent, 3, 4, 5 years. The
amount of energy that's been saved is rather extraordinary.
It's in the billions of dollars in those buildings.
Not per se because they've benchmarked. But because they're
starting to pay attention to and use that information to,
again, make these informed decisions.
Senator Franken. I'm here and I might as well go on. This
is--I want to talk about combined heat and power and district
energy some more. Can you just describe for everyone St. Paul's
district energy and combined heat and power system and just in
a nice nutshell?
Mr. Spurr. I'd be happy to. I have a lot of familiarity
with that system.
That system was started in the early 1980s. It's a district
hot water system. It supplies about 80 percent of the heating
in the downtown area. I don't recall now what they're up to on
cooling but a substantial majority of the cooling in downtown.
It's fueled with urban waste wood, tree trimmings, old
pallets, land clearing waste. This is community waste that
would otherwise end up in a landfill. It's used to produce
power and heat and cooling.
Ironically enough one can make cooling with heat. So----
Senator Franken. For those who aren't energy geeks, just
explain how you can create cooling from heat.
Mr. Spurr. It's--well, there actually are 2 ways.
One is to use steam and push it through a steam turbine to
make heat.
Another is a chemical process kind of like----
Senator Franken. To make electricity which in turn?
Mr. Spurr. No, actually you directly turn the chiller
compressor with the steam turbine.
Senator Franken. Oh, I see. OK.
Mr. Spurr. But in St. Paul they use a process called
absorption cooling. Basically the heat is used to recharge a
set of chemicals, who once they want to combine together
they're actually able to chill another water loop.
I remember, Senator Franken, some years ago you asked me to
explain in simple terms how absorption cooling works. It's
pretty hard to do it in a simple way.
Senator Franken. Right.
Mr. Spurr. But it's----
Senator Franken. Obviously.
[Laughter.]
Mr. Spurr. Thank you very much.
But the other element in that system besides using urban
waste wood to make power heating and cooling is they use
extensively chilled water storage.
So as I spoke earlier----
Senator Franken. I see.
Mr. Spurr. They depress that electric demand by making
chilled water.
Senator Franken. OK. Speaking of that because you were
talking about Princeton and I want to talk about the resilience
and this island mode. Can you explain what an island? What it
means to be in island mode and why this could represent
incredible savings in terms of saving businesses from incurring
tremendous costs during an electrical, electricity outage?
Mr. Spurr. The use of CHP in island mode has saved the
bacon of a lot of universities and industries and other areas
during storms. In my written testimony----
Senator Franken. Mr. Diament, sorry about the bacon.
[Laughter.]
Mr. Spurr. Exactly.
It's been--what happens with an island mode is that you
generally CHP systems are run in integration with the broader
grid. But it can be designed so that if the broader grid goes
down, it can cutoff the relationship and operate as its own
micro grid. That has allowed many places, noted in my written
testimony.
Senator Franken. Right.
Mr. Spurr. To survive these storms. In my written testimony
is only a sampling of the case studies that have taken place.
It's an enormously important issue because whatever your
beliefs are about what's happening with climate change. The
fact is we're having a lot more severe storms. They're causing
power outages.
Senator Franken. Thank you.
Your written testimony does provide a number of examples
that are very interesting.
I want to talk about retrofitting and why it obviously
makes sense. I've been partnering with leaders in Minnesota
like Governor Dayton, local chambers of commerce, businesses,
utilities, elected officials, non-profits on the retrofitting.
I call it back to work Minnesota because as Senator Sanders
suggested it's just win/win/win/win/win because when you do a
retrofit it obviously saves energy. That's the purpose.
Over a certain amount of time pays for itself. A great
retrofit can pay for itself or, you know, very quickly or over
a certain amount of time. But in the meantime you're putting
people to work. You're putting people to work actually doing
the work on the retrofit, people in the building trades, also
people in energy service companies, who design the retrofit and
implement them.
You are putting people to work who manufacture the energy
efficient material that's being used and who make the software
for energy efficient lighting and those kinds of things. Also
you're lowering the carbon footprint which we all know or most
of us know is very important. So that's a win/win/win/win/win.
I think that's 4 or 5. Anyway, it's a lot of wins.
Now and so sometimes there are barriers. One of the
barriers is in the financing. We have been focused and back to
work Minnesota is providing different creative and I want just
everyone or anyone who wants to talk about this of what we can
do to help people help entities. This can be everything from
commercial buildings to hospitals, university, you know MUSH,
municipals, universities, schools and hospitals, MUSH.
The city--I'll give one example, the city of Edina has set
up the first commercial property assess clean energy or PACE
program outside of California. Minneapolis has begun energy
benchmarking programs for large commercial buildings and that.
But as far as--talk to me about barriers and about financing.
Anybody? I'm throwing it up. It's a jump ball.
Mr. Molotsky. I'll jump in.
So the barrier in particular, I guess, it's not my
expertise or my area, but it won't stop me from talking about
it. In the residential side and also on the commercial side one
of the big barriers is when you go to borrow money from a
financing source. The lack of underwriting criteria and
appraisal techniques that would take into account energy
efficiency for purposes of value for the asset is not there
yet. So the appraisal institute some of us have talked with or
aware of it, but they still need to promulgate educational
activities for their members because they don't take that into
account.
So when they come up with what the value of the building or
what the home is, to the extent somebody has invested in some
good technology, it's not typically counted or ever counted for
purposes of what that property is worth. Separate from today
but there's the SAVE Act, S. 1106, addresses or starts to focus
on that particular issue which is appraisal techniques and
getting the appropriate amount of credit on the credit score.
So that would be one thing in particular I would start to think
about or continue to think about.
Senator Franken. Thank you.
Mr. Laskey. Just quickly on the, I think, some lessons from
the short lived PACE programs on the residential side. You
look, there was a paper that came out of Elton, the Lawrence
Berkeley National labs in California looking at financing
programs, I think, 19 different financing programs across the
country. It looked at--had different structures, different
underwriting criteria.
One thing that was striking to me was that even in
Berkeley, California where everyone agrees climate change is an
issue and where there was an opportunity to take advantage of
PACE financing, less than one-third of 1 percent of people took
advantage of PACE financing when it was available, residential.
This was not from lack of interest, high electric rates, access
to financing, all this. In spite of that only one-third of 1
percent.
I think one of the reasons for this is that energy just is
a low engagement thing. People only think--I was in a meeting
with a utility CEO, who compared it to toilet paper. You only
notice it when it's not there. So when the lights don't work.
So I think one of the things as you look to push out MUSH
or MUSH, is to think about how are you going to market it. How
are--and I think your data benchmarking idea is a terrific one
because if you can identify which of the buildings that are
most likely to benefit the most then you can go after those
buildings aggressively to make--so they can avail themselves to
the financing.
So this isn't about mandates, but it's about targeted
marketing using these kinds of marketing techniques that are
used in other industries to make--so when you design these
financing systems they actually have customers.
Senator Franken. Let's--actually Mr. Diament, let's talk
about this in the context of the non-profit sector. Then we'll
go to Mr. Nadel. Then Mr. Sylvia I'd like to talk about in
terms of weatherization.
Let's go first to Mr. Diament.
Mr. Diament. Thank you, Senator.
So as I said before, I mean, the front end cost is
definitely the highest barrier, the front end cost of an HVAC
system or a whole, you know, or a couple scores of windows,
especially if they have to be specially designed to fit over
very pretty stained glass windows and other things. So the
front end cost is a barrier that the non-profit sector shares
with the other sectors as well.
I would, before I forget, want to say you asked what can
you do aside from the legislation before the committee today.
What my colleague mentioned earlier which is with regard to the
Section 179(d) tax credit. If that could be made portable, if
that could be made transferrable that would be very valuable to
the non-profit sector because----
Senator Franken. Can it be made transferrable to a vendor?
Mr. Diament. Yes.
Senator Franken. That's what you're talking about, Mr.
Molotsky, right?
Mr. Diament. Or to some other party that's--either a vendor
or it could be like--you could structure it like air rights
where you could really have a market for it, theoretically.
But the other thing is when you're talking about the
financing sector, I mean, when you're talking about small and
midsized non-profits, they have real trouble getting financing.
If you're looking at, you know, open market sort of terms
because the balance sheets of small and midsized non-profits
are not something that people who----
Senator Franken. Pretty.
Mr. Diament. Yes.
[Laughter.]
Mr. Diament. Pretty much. I mean, you know, you can--they
are very much living whether they are secular or sacred they
are very much living on a wing and a prayer.
[Laughter.]
Mr. Diament. On, you know, you can know that your donor is
going to come through to help you close your budget gap, but
when you go in for the loan application that doesn't really,
they don't have a box for that.
Senator Franken. Right.
Mr. Diament. Just the last thing I would mention in the
non-profit sector and certainly in the religious non-profit
sector to make up for the comment before, I mean, going down
the road of energy retrofits is both kosher and commendable.
[Laughter.]
Mr. Diament. We've seen that in the fact that the EPA
Energy Star runs a green congregations project which has
gotten, I think, thousands of churches and synagogues and
others participating in it. It's not a finance. It's a set of
webinars and internet tools that you can use to try to
benchmark your own institution and so on.
But there's a substantial amount of traffic on that on a
regular basis because in the non-profit sector folks know that
every dollar of savings they can squeeze out of their overhead
budget is--are dollars they can devote to the kinds of social
welfare and other kinds of programs that they're really in the
mission to do.
Senator Franken. Thank you.
Mr. Nadel? Then we'll go to Mr. Sylvia on the
weatherization assistance program.
Mr. Nadel. Right. Just to add to the discussion about
financing which I agree can be a very useful tool for those
people who lack the capital.
But as Mr. Laskey pointed out only a limited number of
people want to apply to these special programs whether they are
PACE or what have you. To the extent we can make the
conventional financing much more accessible for energy
efficiency. Mr. Molotsky mentioned the SAVE Act and how it
would incorporate energy efficiency into evaluations. That's
helpful.
But another part of the SAVE Act would encourage the
lenders to offer energy efficiency financing at the time of the
mortgage.
Senator Franken. Right.
Mr. Nadel. You already have someone taking out a loan. Why
not add the energy efficiency at that point? Likewise in the
commercial sector the average building gets refinanced every 8,
10 years, something like that. They vary.
That's a great time to add in the energy efficiency. Not
have a special loan, but make energy efficiency part of that.
Senator Franken. Add it to the refinance.
Mr. Nadel. Exactly.
One other thing I'd say is we need creative ways to make it
much easier for people to participate in these loan programs
instead of having to go down to the bank and the special
system.
Two examples come to mind.
One is OnBill repayment where the utility arranges for
capital could actually do a credit check based on whether you
pay your utility bill or not. Then collect the money as part of
your bill. It makes it very simple for people.
A variation on that and I'll use this to pass off to Mr.
Sylvia. In Massachusetts they have worked with a whole
coalition of community banks and credit unions to make it very
simple.
I'll let him take it from here.
Senator Franken. Nice segway.
Mr. Sylvia. Thank you.
Senator Franken. Beautiful.
Mr. Nadel. Yes, sorry.
Mr. Sylvia. Thank you very much, Steve.
In Massachusetts the experience has been particularly with
the heat loan program which is a program that is offered in
conjunction with the utilities that provide our efficiency,
energy efficiency programs and working with local community
banks and credit unions and others to provide loans to
residents and businesses to do energy efficiency work. Over the
course of the loan program there have been 18,000 loans that
have been made and over $155 million worth of investments made
in energy efficiency as a result.
So this program has been very successful and has had high
utilization. We had to deal with some of the challenges that
have been talked about in terms of educating lenders in the
banking community of the value of energy efficiency. But
certainly once you get over that hump it's a pretty easy sell.
In Massachusetts we have a very good model with the heat loan
program.
As to the weatherization assistance program from, certainly
from our perspective at NASEO and more specifically as an
official for Massachusetts, the weatherization assistance
program has provided critical support to low income families
and households so that they are able to provide for their
families. Comfort, reduced costs, without the weatherization
assistance program they would, in all likelihood, not be able
to take advantage of energy efficiency programs or they
themselves provide the necessary resources to do the types of
things to reduce their costs to provide a healthy and safe
environment for their families.
So from our perspective in Massachusetts using the
weatherization assistance program has been critically important
for low income families.
Senator Franken. Thank you, Mr. Sylvia. Thank you everyone.
It's been a great discussion today.
I hope we can move these bills soon as part of the Shaheen/
Portman package on the Floor.
Thanks again to everybody.
With that, we will adjourn.
[Whereupon, at 4:30 p.m., the hearing was adjourned.]
APPENDIXES
----------
Appendix I
Responses to Additional Questions
----------
July 12, 2013,
Union of Orthodox Jewish Congregations of America.
Hon. Ron Wyden,
Chairman, Senate Committee on Energy & Natural Resources, Washington.
Dear Chairman Wyden & Subcommittee Chairman Franken,
Thank you for the opportunity to testify at the Subcommittee's June
25 hearing in support of S.717, the Nonprofit Energy Efficiency Act. I
am writing to respond to the Question for the Record transmitted to me
by your staff.
Question 1. Production of energy is not the same as energy
efficiency, yet the definition of ``energy-efficient improvement'' in
this bill includes ``an installed measure involving a renewable energy
generation or heating system, including a solar, photovoltaic, wind,
geothermal, or biomass system or component of the system.'' Why is
this?
Answer. As we discussed at the hearing, S.717 seeks to aid
nonprofit entities reduce their energy use--and thus their overhead
costs--by improving the energy efficiency of their buildings. These
efficiencies can be achieved by replacing outdated HVAC, electrical and
other systems with newer more efficient ones. It is our understanding
that a nonprofit's energy usage can also be reduced by installing the
types of energy systems listed in Section (2)(B)(ii) of S.717 in
circumstances in which these alternative or renewable energy systems
are most cost efficient than others. We anticipate that, with the
assistance of the grants program proposed by S.717--nonprofits will be
able to make market-informed choices about the most cost effective
building retrofit they can implement to improve their efficiency and
reduce their operating costs.
Thank you again for your interest in and support for this
bipartisan legislation.
.Nathan Diament
______
Responses of Alex Laskey to Questions From Senator Murkowski
Question 1. Federal vs. State Budgets--Why is it appropriate for
the federal government--which has $16.8 trillion in debt, and
counting--to give grants to the States, for efficiency, when many of
them have budgets that are in far better shape?
Answer. Energy is a national issue: it impacts our national
economy, environment, and security. If not for energy productivity
gains since the early 1970s, the United States would need about 50
percent more energy to deliver today's GDP. However, the U.S. is far
behind many developed countries in our energy productivity, which
undermines our competitiveness and leads to hire utility bills for
businesses and families.
Energy efficiency is a sound national investment because it pays
for itself and delivers a healthy return on every taxpayer dollar
spent. An independent analysis by the Rhodium Group done for the
Alliance to Save Energy found that doubling energy productivity by 2030
would provide net savings to Americans of $327 billion per year.
While some states have made significant investments in energy
efficiency, others lack the expertise, capacity or resources to develop
their own energy productivity policies and programs. The Department of
Energy has experts and best practices that can assist states in meeting
their energy productivity objectives and can share innovative
approaches for those looking to do even more.
Finally, the initiative does not constitute new federal energy
efficiency spending-it is paid for with an offset from an existing
program. Therefore, it should have no negative impact on our national
debt.
Question 2. Legislative Goal--This bill has a goal of doubling
electric and thermal energy productivity by the year 2030. How does
that compare to the past 20 years? How close is the U.S. is projected
to come to that mark--through 2030--under the current collection of
codes, standards, regulations, and programs?
Answer. According to the Energy Information Agency (EIA), energy
productivity improved by 47 percent between 1993 and 2013. The EIA
projects a baseline improvement of only 45 percent between 2013 and
2030-leaving us less than half way toward our goal of doubling energy
productivity by 2030.
Question 3. As I understand it, this bill would require States to
establish a ``statewide baseline of energy use.'' How, exactly, are
States expected to do that? What are the practical limits on that
baseline--would the private sector, not to mention private individuals,
have to report their energy use?
Answer. Participation in the Race to the Top initiative is entirely
voluntary, and states that don't opt to participate will not be
required to establish a baseline or do anything different from what
they are doing right now. In order to ensure that energy efficiency
programs stimulated by the Race to the Top initiative actually move the
needle on energy productivity, states that do choose to participate
will have to establish the a baseline consisting of the energy use and
potential resources for calendar year 2010.
Most state public utility commissions/ regulators will already have
the data necessary to determine the baseline energy use in 2010. In the
unlikely event they do not, there will be no need for the private
sector or private individuals to report energy use, because aggregate
statewide energy use can be easily determined entirely from the supply
side.
States must also develop a plan to determine potential resources as
of 2010. This is important because it will allow states to identify
opportunities to cost effectively replace energy generation with energy
savings. The initiative encourages states to view energy efficiency and
improvements in energy productivity as an alternative to increased
energy generation.
______
Responses of Steven Nadel to Questions From Senator Murkowski, on
S.1084, S.1199
Question 1. This bill seeks to coordinate and streamline efficiency
programs for schools across federal agencies. It's an admirable goal,
and something I think we should do more of. But while I am supportive
of the effort to streamline, it concerns me that we have an
authorization of ``such sums''. What do you consider to be an
appropriate level of funding for this legislation? How exactly would
any appropriated funds be used?
Answer. ACEEE was not involved in drafting this bill so I would
suggest you address your question to the bill authors. This said, my
take is that the funding would be used for staff time and outreach and
meeting expenses to coordinate among agencies and identify productive
paths forward. My guess is this might cost a million dollars per year
or perhaps a little more. S. 1199--The Better Buildings Act-- Steve
Nadel, ACEEE
Question 2. In your testimony, you said that the enhanced
efficiency provisions in S. 1199 would actually save more energy than
the original Energy Independence and Security Act provision it will
replace (Sec. 433). Can you elaborate on this point?
Answer. Through our analysis we found that Sec. 433 would not yield
as much energy savings as we had expected due to the extent of overlap
between Sec. 433 and existing provisions already on the books. The 30
percent below code requirement for new federal buildings set forth in
Sec. 305 of the Energy Conservation and Production Act as amended,
coupled with Sec. 431 of the Energy Independence and Security Act of
2007 which lays out the current energy intensity reduction goals of all
federal buildings (30 percent below 2003 levels for a similar building,
as measured by CBECS, by 2015), would significantly limit the
standalone consumption reductions attributable to Sec. 433.
Additionally, we assume only 75 percent compliance will be achieved
because of the challenges associated with implementation that have
arisen due to of the ambiguous language of Sec. 433.
When comparing the savings we anticipate would be attributable to
Sec. 433 with the savings likely to be achieved by S. 1199 we found
that subjecting major renovations to the same energy consumption
requirement that new buildings are already subjected to (energy
consumption 30 percent below model code) by itself results in greater
cumulative energy savings than what we might expect from Sec. 433
alone. Our analysis is based on current model codes and does not assume
future code upgrades. When you add in the even greater savings that
result from an additional 15 percent improvement in the energy
intensity of the federal building stock from 2015-2020 we found that S.
1199 savings would significantly exceed what we would have expected to
achieve under Sec. 433.
______
Responses of Mark Spurr to Questions From Senator Murkowski
Question 1. Many of the members of this panel have significant
concerns about the Department's loan guarantee program, including poor
funding decisions that have been made in the not-too-distant past. This
bill would create a new program for local energy infrastructure, and
reserves $4 billion of the existing loan volume limitation for it. Is
it really necessary to expand the loan guarantee program? What types of
local energy infrastructure are not covered by current statutory
authorities?
Answer. Rather than expand the program, S.1205 would reform and
redirect a portion of the existing program. S.1205 represents a reform
because it focuses on demonstrated, commercial technologies backed by
long-term contracts, in contrast to innovative businesses which have
business risks associated with project revenues and expenses. Without
S.1205, loans can't be made to less-risky commercial projects.
Congress has provided a total of $60 billion in loan or loan
guarantee authority ($34.8 billion in loan guarantees for 1703 and $25
billion for the Advanced Technology Vehicles Manufacturing (AVTM) loan
program. No loan guarantees have been made under the 1703 program and
only $8.4 billion in loans have been made in the ATVM program. Of the
total $51.4 billion in remaining authority, S.1205 would redirect less
than 8 percent to the S.1205 loan guarantee program.
The purpose of the proposed S.1205 loan guarantees is to reduce the
interest rate on loans for local energy infrastructure projects.
Reducing interest costs is the key to implementing highly efficient and
resilient energy infrastructure because these technologies, although
they reduce energy consumption, reduce emissions and increase
resiliency, tend to have relatively high capital costs.
Following are some examples of commercial local energy
infrastructure technologies that are not covered by the statutory
authority:
Natural gas combined heat and power (CHP)
CHP provides both electricity and thermal energy in one
highly efficient integrated fuel combustion system. There are
three main types of commercial natural gas CHP systems:
combustion turbines, steam turbines and reciprocating engines.
CHP can be added to many existing industrial and district
energy systems. For example:
The Texas Medical Center in Houston recently added a 48
MegaWatt (MW) natural gas CHP system as well as thermal energy
storage (TES) to its existing district heating and cooling
systems.
Broshco Fabricating Products, a ferrous metal fabricator in
Mansfield, OH, operates a 4.6 MW natural gas CHP system that
generates electricity and hot water to meet building and
process heat loads.
The Medical Center Co. in Cleveland OH wants to add natural
gas CHP to supply heat and power as it seeks to phase out use
of coal and boost the resilience of its heating, cooling and
power supply to educational, cultural and health care
institutional customers.
Arlington County VA, in partnership with a major real estate
company and Washington Gas, recently completed a feasibility
study and is evaluating financing options for a natural gas CHP
district heating and cooling system to serve Crystal City.
Thermal energy storage systems (TES)
In TES systems, chilled water or ice is produced at night
(when power load is low and power is cheaper and cleaner) and
stored for use during the following day, thereby reducing peak
power demand. TES reduces power demand because it allows
cooling to be provided from stored cooling energy rather than
running power-intensive chillers.
TES can be much more extensively deployed, thereby helping
manage peak demands on power generation, transmission and
distribution.
Biomass
Biomass CHP or heat-only boilers can convert a wide variety of
biomass materials to thermal energy and/or power. Common biomass fuels
include urban waste wood (tree trimmings), sawmill wastes, agricultural
residues and food processing wastes. Examples include:
In downtown St. Paul MN a 25 MW CHP system fueled with urban
waste wood generates electricity, heating and cooling for most
of the downtown.
Urban waste wood is also the primary fuel for Seattle Steam
Co., which supplies steam heating for downtown Seattle.
University district energy systems are evaluating use of
biomass in place of coal as a major heating fuel.
Many small communities throughout the country which lack
natural gas service are considering biomass district heating in
order to reduce and stabilize fuel costs, boost local
employment and productively use ageing forest resources which
have become a significant fire hazard. The heating cost
predicament is especially acute in the more than 100
communities in Alaska that are only accessible by air or water.
Heating oil prices in these communities are among the highest
in the nation, exceeding $10 per gallon in 2012.
Industrial waste heat recovery
Oil refineries, natural gas compressor stations, chemical
facilities, paper plants, steel mills, cement plants and glass
manufacturers and other energy intensive industries generate large
quantities of waste heat.
Industrial exhaust gases or liquids are no longer useful for
the industrial process but are hot enough to provide building
space heating and domestic hot water. Recovery of this waste
heat requires installation of heat exchangers in the
manufacturing plant as well as hot water piping to transport
the heat to users.
Waste heat can also be converted into electricity through
backpressure steam turbines or organic rankine cycle generation
systems.
Heat recovery chillers
This equipment, sometimes called heat pump chillers, enables the
heat that is produced by air conditioning to be recovered and used for
heating. This saves energy by reducing the need to burn fuel for
heating. It also saves water because with conventional systems water is
consumed to dissipate the heat that is extracted from buildings by air
conditioning systems. Particularly large quantities of heat are
produced by data centers.
Geothermal direct use
Over 270 communities, primarily in the western states of ID, NV,
NM, CA, OR and WA, have been identified with geothermal resources
located nearby. Directly using geothermal hot water for district
heating reduces the use of fossil fuels, improves air quality and
increases energy supply reliability. Downtown Boise ID and the Oregon
Institute of Technology are among the current users of geothermal
district heating.
District heating piping to distribute hot water or steam to users
Although in many circumstances the district heating piping is
already installed, in some projects it will be necessary to install an
underground closed loop piping system to supply hot water to buildings
and return the cooled water to the plant to be re-heated. In expansion
of an existing steam district heating system, steam supply piping would
be installed with a return piping system for condensate.
District cooling piping to distribute chilled water to users
Similarly, in a district cooling system, chilled water is pumped
through supply piping to absorb heat from buildings. The water is then
returned to the plant to be re-chilled.
Question 2. In the wake of high-profile failures like Solyndra,
Abound Solar, and Beacon Power, many people believe that the Loan
Guarantee Program should be abolished, or at the very least,
significantly reformed. Do you agree that reforms are needed so that
taxpayers are not left on the hook for business failures? Please
explain your answer.
Answer. As the committee is aware, the Solyndra loan guarantee was
made under Section 1705, a temporary loan guarantee program for rapid
deployment of projects as part of the American Recovery and
Reinvestment Act of 2009. The 1705 authority is now expired. S.1205
will better protect taxpayer dollars because unlike 1703 or 1705 it is
focused on proven technologies that have been tested and are
commercially available. As discussed above, S.1205 would reform and re-
direct less than 8 percent of the authorized loan guarantee authority
to proven, commercial technologies backed by long-term contracts for
the thermal and/or electric energy produced.
With S.1205, the federal government can play an important and
appropriate role in reducing energy waste and increasing energy supply
resiliency: leveraging the credit of the federal government to reduce
interest costs and thereby facilitate the implementation of energy
infrastructure that captures and productively uses otherwise-wasted
heat or other local sources of energy.
Question 3. This bill appears to continue the practice of using
taxpayer dollars to cover the credit subsidy for loan guarantees. Do
you believe it is appropriate to ask taxpayers to foot the bill for
credit subsidy for these projects?
Answer. S.1205 provides the opportunity to use funds that have
already been appropriated to facilitate implementation of less-risky
projects, thereby reducing risks for taxpayers. S.1205 would use funds
already appropriated for 1703 to the extent that they are available. To
the extent that such alreadyappropriated funds are not available, the
costs of guarantees under S.1205 would be covered through fees assessed
to borrowers. We believe that the use of a limited amount of
alreadyappropriated funds can make a crucial difference in reducing
borrowing costs, particularly for smaller projects being undertaken by
cities and universities. In these smaller projects, loan guarantee
transaction costs are relatively higher than for large projects, such
as nuclear power plants or carbon sequestration projects.
Question 4. This bill has an authorization for ``technical
assistance,'' including assistance with utility interconnection,
negotiation of power and fuel contracts, permitting and siting issues,
marketing and contract negotiation, business planning and financial
analysis and engineering design. It seems to me that these services
would be better handled by the private sector. Even so, it's my
understanding that the Clean Energy Application Center within DOE
already offers some of these services. Is a new authorization
necessary? Why would we need the additional technical assistance? What
is needed that the existing center does not already provide?
Answer. We anticipate that most of the technical assistance would
be provided by the private sector. What is needed is additional funding
to provide the assistance called for in S.1205. The DOE can then
procure the appropriate support from the private sector and/or the
Clean Energy Application Centers (CEACs) (which we understand will be
rebranded the Technical Assistance Program next year). The CEACs have
developed expertise in screening tools to assist in the early stage
evaluation of the economic viability of CHP/district energy projects.
If a project is feasible based on an initial assessment, in-depth
feasibility studies, engineering, business assessment and financial
analysis is required before capital financing can be sought. It is in
these next stages of more robust technical assistance that private
sector support would be facilitated by the technical assistance program
established by S.1205.
An example of a situation where S.1205 technical assistance would
be important is in Ely, MN. Preliminary studies have been done which
have identified a range of opportunities to use biomass for district
heating in this small community. Ely is representative of the types of
communities described above: they lack natural gas service and are
considering biomass district heating in order to reduce and stabilize
fuel costs, boost local employment and productively use ageing forest
resources which have become a significant fire hazard. However, they
lack the funds to carry out the additional studies and engineering work
necessary to make the project ready for financing. S.1205 technical
assistance would make the crucial difference.
______
Responses of Mark Sylvia to Questions From Senator Murkowski
Question 1. As I understand it, these programs currently exist and
are functioning successfully on the state or even the local level. Is
this accurate? If so, why shouldn't they remain state or local level
programs? Is there anything stopping states, many of which have budget
situations that are less dire than what we face here, from doing this
on their own? If state programs are working, why is there a need for
legislation to authorize a new program at the Department of Energy?
Production of energy is not the same as energy efficiency, yet the
definition of an ``energy-efficient upgrade'' includes the
``installation or improvement of renewable energy for heating or
electricity generation serving a residential building carried out in
conjunction with an energy efficiency project or activity.'' Why is
this?
Answer. While state and local programs are successful in the area,
there is always room for improvement as programs evolve over time. As
discussed in the testimony, there are examples of programs and policies
that work across the United States. We provided a number of examples in
the testimony and would be happy to provide other examples for the
record.
This does not mean that there is not a role for federal legislation
or the federal government in encouraging energy efficiency financing
programs through the loan vehicle propounded in the bill. There remain
a wide variety of barriers to successful implementation of energy
efficiency financing programs. Reducing the costs of borrowing, using
limited federal funds as a ``seed'' fund to leverage private and state
funding, and expanding consumer-friendly financing options are all
areas where a state-federal partnership can be useful. The State Energy
Program is a flexible model, which utilizes this type of approach. S.
1200 is a vehicle to address the barriers identified and provides
limited federal funding for stated objectives.
Many state and local governments (in addition to utilities and
other entities) are running effective programs designed to make it
easier for homeowners and tenants to finance energy efficiency
upgrades. S.1200 is designed to support those programs by providing
funding that states, local governments, and others can use to re-
capitalize an existing, successful program that has depleted its
initial capital, to capitalize the expansion of existing, successful
programs, and to capitalize new programs that states and local
governments believe will effectively meet the needs of their own
communities.
The federal program should accommodate the reality on the ground,
which is that many homeowners integrate energy efficiency and renewable
energy projects. The core of S.1200 is energy efficiency, but it can
accommodate homeowners and residents that are integrating energy
efficiency and renewable energy upgrades. We are happy to answer any
further questions on this important legislation.
Question 2. Of all the topics the Department of Energy's Inspector
General has written about in the wake of the 2009 stimulus,
weatherization has to be one of the most frequent. We've seen report
after report about waste, fraud, and abuse within the program, after $5
billion was awarded to it. Does this bill take any concrete steps--
aside from new ``standards''--to ensure that taxpayer dollars aren't
wasted like we've seen in recent years?
Answer. The Weatherization Assistance Program has been, and
remains, a very successful state-federal initiative targeting a
specific population of low-income Americans, as well as veterans, the
disabled, and the elderly, who fit defined economic criteria. While the
Inspector General for DOE and other agencies perform an important
function, we would expect that any federal or state program, no matter
how well run or well intentioned, will have some degree of waste. This
is not a rationale for eliminating the programs, but another reason for
continuous improvements and updates. The proposed legislation helps to
address these issues.
The states, the federal government, local delivery providers, and
others, have learned from mistakes and made positive changes in order
to ensure that Weatherization is improving over time. In fact, many of
the shortcomings identified by the IG, however limited, were found
through the regular post-project audit process conducted by the state
and the providers. These problems were later ``identified'' by the IG;
though they had already been corrected. The states and DOE take their
responsibilities to be good stewards of funding very seriously. In our
experience, this has not been a partisan issue. To the extent that
problems are found, we have worked to correct them. In addition to the
changes included in the reauthorization bill, if the committee has
additional suggestions or recommendations, we would certainly attempt
to address them as expeditiously as possible. Overall, the program is
making a significant difference in Americans lives.
Appendix II
Additional Material Submitted for the Record
----------
Statement of Steven Nadel, Executive Director, American Council for an
Energy-Efficient Economy (ACEEE), (revised version)
Summary
This hearing is on nine energy efficiency bills that are potential
amendments to S. 761, a bill endorsed by the full Senate Energy
Committee that may soon reach the Senate floor. ACEEE strongly supports
S. 761 and also supports the nine bills before us, although for one
bill our support is contingent on a few modifications. In addition, I
discuss several other possible amendments, most of which we support but
one of which could be a backward step.
ACEEE has conducted a preliminary energy savings analysis of S. 761
and many of the potential amendments. Overall, we estimate that S. 761,
together with all the amendments we support, will reduce U.S. energy
use by over 15 quadrillion Btu's over the 2014-2030 period. This is
nearly as much energy as will be used by the state of Oregon over this
period. Saving this much energy will benefit our economy and our
environment and we urge the Senate to adopt S. 761 and the other bills
I discuss, but to avoid ``backward steps'' that lack broad support.
Introduction
My name is Steven Nadel and I am the Executive Director of the
American Council for an Energy-Efficient Economy (ACEEE), a non-profit
organization that acts as a catalyst to advance energy efficiency
policies, programs, technologies, investments, and behavior. We were
formed in 1980 by energy researchers and celebrated our 30th
anniversary in 2010. Personally I have been involved in energy
efficiency issues since the late-1970s and have testified multiple
times before this Committee and its Subcommittees as well as before the
House Energy and Commerce Committee.
Today's hearing is on nine bills that are potential amendments to
the Energy Savings and Industrial Competitiveness Act of 2013 (S. 761)
that was previously reported out of the Senate Energy and Natural
Resources Committee on a 19-3 vote. ACEEE strongly supports S. 761 and
urges the Senate leadership to schedule this bill for floor time as
soon as possible.
ACEEE has a long history of estimating the energy and economic
impacts of energy efficiency legislation, going back to the 1980s. For
example, last year we prepared an analysis on the 2012 Shaheen-Portman
bill.\1\ We have begun an analysis of this year's Shaheen-Portman bill
as well as an analysis of most of the amendments, which I discuss later
in my testimony. At this point we have preliminary estimates of energy
savings, but are only just starting our analysis of micro- or macro-
economic impacts. Our preliminary analysis finds that the 2013 Shaheen-
Portman bill, as it is currently drafted, would save about 9.5
quadrillion Btu's (``quads'') of energy over the 2014-2030 period. As a
point of reference, the United States uses about 100 quads annually.
The amendments we support and that I discuss below could add 6.3
additional quads of energy savings, for a combined total of 15.8 quads.
This is more energy than would be used by the state of Utah or Nebraska
over this period, and nearly as much energy as would be used by the
state of Oregon (assuming annual use stays constant at current levels).
Savings start modestly and grow steadily over time, as illustrated in
Figure 1.* Near the end of my testimony I will provide additional
information on our analysis including energy savings by provision.
---------------------------------------------------------------------------
\1\ Farley et al. 2012. Impacts of Energy Efficiency Provisions in
Pending Senate Energy Efficiency Bills. American Council for an Energy-
Efficient Economy. http://aceee.org/files/pdf/white-paper/shaheen-
portman.pdf
* All Figures have been retained in subcommittee files.
---------------------------------------------------------------------------
Of the nine bills before us today, ACEEE supports all of these
bills, although in one case our support is contingent on a few
modifications. In the next section of my testimony I discuss each of
these bills, and then touch on several additional potential amendments
that may be introduced when S. 761 reaches the Senate floor.
Bills We Supports
S. 1206--Benchmarking
S. 1206, introduced by Senator Franken, would promote benchmarking
of large commercial and multifamily buildings. Building benchmarking is
a process that allows building owners to assess the energy use of their
buildings and compare them to otherwise similar buildings. This process
helps to identify buildings that would most benefit from building
upgrades. The federal ENERGY STAR Buildings program has encouraged
benchmarking for many years and U.S. Environmental Protection Agency
estimates that this program has benchmarked more than 185 million
square feet of U.S. commercial building floor area, and resulted in
average energy savings of about 7 percent in these buildings each year.
However, the vast majority of the existing commercial building stock
has not been benchmarked. This provision would encourage benchmarking
of additional buildings by making whole building energy use data more
readily available to building owners and promoting benchmarking in a
variety of ways. This provision only applies to commercial buildings
and multifamily residential buildings. Single-family homes and small
buildings that house several families are not included.
Specific provisions in the bill call for:
1. Benchmarking additional federal buildings. Under existing
federal law, federally-owned buildings must be benchmarked but
most federally-leased buildings are not included in this
requirement. This provision requires benchmarking of leased
buildings where practical, addressing a gap in current law.
2. A study by the U.S. Department of Energy (DOE) on best
practices for benchmarking, energy use data aggregation, and
energy use disclosure. Many cities and some states are
considering policies in these areas and this study would
provide guidance on approaches that work and those that have
been problematic so that new policies can take advantage of
these lessons.
3. Combining existing public federal buildings databases and
facilitating consolidation of other existing public buildings
databases to make reporting easier for building owners and
identification of best practices easier for analysts.
4. Establishing a small competitive grant program for
utilities, their partners, and utility regulators to make whole
building energy use data available to building owners. This
includes aggregated tenant consumption so that whole buildings
can be benchmarked. Data on individual tenants would not be
provided in order to protect privacy. This provision has been
extensively vetted with the real estate industry and has been
significantly modified to address their views.
S. 1191--Better Buildings Act (Tenant Star)
S. 1191, introduced by Senators Bennet and Ayote, would encourage
landlords and tenants to cooperate on energy efficiency. Presently most
leased buildings suffer from a ``split incentive'' problem. Tenants pay
energy bills but are usually not in buildings long enough to justify
making energy-saving capital investments. Building owners make capital
investments but since tenants pay the energy costs, they have little
incentive to invest in energy efficiency upgrades. This bill would help
address these problems by:
1. Identifying best practices for energy efficiency during
tenant ``fit-outs''--the improvements to a space tenants make
between when they sign a lease and when they move in.
2. Establishing a new voluntary ``Tenant Star'' program to
recognize tenants whose energy performance is substantially
above average, complementing the existing whole building ENERGY
STAR Buildings program.
3. Encouraging ``energy-aligned'' federal leasing by having
the General Services Administration develop model leasing
provisions that would spur cooperation on energy savings
between federal tenants and building owners. Such leases can
reduce costs to federal agencies and also serve as a model for
leases by non-federal tenants.
Another witness at this hearing will be discussing this bill in
depth so I will keep my comments brief.
S. 1200--Residential Energy Savings Act of 2013
(Residential Financing)
S. 1200, introduced by Senators Sanders and Wyden, would establish
a pilot program for state loans for residential building energy
efficiency upgrades. Many homeowners lack the capital to make energy
efficiency investments and this bill would assist states and other
eligible entities in providing this capital at attractive terms, often
working with banks and other financial institutions. The bill would
have DOE make loans to states, local governments, utilities, and other
eligible entities who would use the funds to recapitalize, expand, or
begin energy efficiency loan programs. The loans would be repaid with
interest, providing for a high degree of cost recovery. States and
other eligible entities would apply for funding and DOE would evaluate
these applications based on a variety of criteria in the bill designed
to encourage best practice program design. For example, the bill calls
for consumer repayments to be ``consumer friendly'' and would encourage
innovative approaches such as on-bill repayment. Since the federal cost
of capital is lower than the cost of capital for many eligible
entities, the program could provide a moderate-cost source of loan
capital. To the extent states and other eligible entities could provide
or raise additional funds for such activities as loan loss reserves,
interest rates that are very attractive to consumers may be possible.
This provision is a useful complement to the commercial building loan
program now in S. 761.
S. 1209--Race to the Top
S. 1209, introduced by Senators Warner and Manchin, would establish
a ``race-to-the-top'' program for states to spur innovative energy
efficiency efforts, just as the program by the same name at the
Department of Education has spurred innovation in that field. The Race
to the Top initiative was a top recommendation of the Energy 2030
initiative led by the Alliance to Save Energy, so I will leave it to
their witness to provide more details on this bill.
S. 1084--School Retrofits
S. 1084, introduced by Senators Udall and Collins, would have DOE
coordinate federal efforts to help school systems, including K-12 and
higher education, make their buildings more efficient. Currently there
is a patchwork of efforts by various departments that are not well
coordinated. We believe this is a useful objective that will make it
easier for school systems to retrofit their buildings.
S. 1020--All of the Above Federal Energy Conservation Act
S. 1020, introduced by Senators Hoeven and Manchin, would repeal
Section 433 of the Energy Independence and Security Act of 2007 and
replace it with two new provisions that would:
1. Extend and improve energy performance requirements for
federal buildings. Under current law these requirements call
for reducing energy use of federal buildings by 30 percent by
2015 relative to a fiscal year 2003 base. The new provision
would extend this requirement to a 45 percent reduction by
2020.
2. Extend the federal energy efficiency performance standards
that now apply to new construction to also include alterations.
These standards call for performance levels 30 percent better
than those in the most recent model building code for
commercial buildings established by the American Society of
Heating, Refrigerating and Air-conditioning Engineers (ASHRAE).
We support this bill because, as currently written, Section 433 is
not workable and because, according to our analysis, the two new
provisions would result in larger energy savings than repeal of Section
433 would lose. The current Section 433 is not very workable because in
its present form it discourages investments in long-term energy savings
contracts and in combined heat and power systems. This was not its
intent. Regarding energy savings, our analysis is summarized near the
end of my testimony. We believe that Section 433 had a laudable goal--
to reduce dependence on fossil fuels. We would prefer that Section 433
be rewritten to be more workable rather than outright repealed, but the
legislative process requires compromise and we believe that S. 1020 is
a workable compromise.
We also support the following two bills but recognize that they
have significant costs and therefore to move forward will likely need
reasonable funding offsets.
S. 1213--WAP and SEP Reauthorization
S. 1213, introduced by Senators Coons, Collins and Reed,
reauthorizes the low-income Weatherization Assistance Program (WAP) and
the State Energy Program (SEP). WAP has been the key federal program to
help low-income households to reduce their energy bills. It makes sense
to help these households reduce their energy bills on an on-going
basis, rather than just help to pay bills through the federal Fuel
Assistance program (e.g., recall the old proverb, ``Give a man a fish,
and you feed him for a day; show him how to catch fish, and you feed
him for a lifetime''). The WAP program has been very successful--the
last ``meta-evaluation'' on the program found average energy savings of
more than 20 percent.\2\ The new legislation includes several useful
improvements to the current program--a requirement that DOE develop
minimum professional standards for WAP contractors and workers, a
requirement for an independent quality assurance program, and a new
competitive leveraged grant program for non-profit agencies that have a
track record of success in serving low-income communities. This bill
will also reauthorize the SEP program, which has been a key program
funding State Energy Offices in all states, including some states where
this is the only funding. Another witness at this hearing will discuss
these programs in more depth.
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\2\ See Schweitzer, Martin. 2005. Estimating the National Effects
of the U.S. Department of Energy's Weatherization Assistance Program
with State Level Data: A Meta-Evaluation Using Data from 1993-2005. Oak
Ridge National Laboratory. http://weatherization.ornl.gov/pdfs/
ORNL_CON-493.pdf.
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S. 1205--Local Energy Supply and Resiliency Act
S. 1205, proposed by Senator Franken, is intended to enable energy
efficiency and renewable energy projects by addressing market barriers
for both the planning and financing of district energy and waste energy
recovery projects. From an efficiency perspective, promoting district
energy projects is important in that the aggregation of thermal loads
creates opportunities for expanded combined heat and power, and
implementing thermal systems at scale can improve efficiency and be
responsive to electric system demands. In addition, waste energy
recovery projects offer the opportunity to reduce electricity and
fossil fuel requirements needed to meet local energy needs. The focus
of this provision on the valuation of thermal energy represents an
important precedent. ACEEE has not yet estimated the energy savings
opportunities from this provision, but intends to analyze the provision
in the coming weeks.
Bill We Support with Modifications
S. 717--Non-Profit Energy Efficiency Act
S. 717, introduced by Senators Klobuchar and Hoeven, would help
non-profit organizations save energy, a laudable goal. It provides
matching grants, up to a cap, so that the non-profit organizations
themselves will have to provide a significant contribution. In general
we find this a useful bill. We are troubled, however, by the proposal
to offset this bill with funding from the Building Technologies Program
at DOE, an important program with a budget of only $220 million for
this fiscal year. The Buildings Technology Program is working on
developing and popularizing a variety of new and cost-effective energy-
saving technologies and practices. A cut of $50 million in this program
would be devastating. From our research, spending $50 million on the
Building Technology Program provides a higher return on the federal
investment than would be provided by spending the same money on
retrofits using conventional technologies in a narrow subset of the
building sector. To gain our support, this bill would need to be funded
using an alternative offset.
In addition, we suggest a few other modifications. First, we
suggest adding two criteria by which to prioritize grants: (1) the
percentage of funds leveraged from other sources (e.g., a grant for 25
percent of the cost would receive priority over one for 50 percent of
the cost); and (2) the financial need of the non-profit (e.g., poor
non-profits should have priority over those with large available
resources). Second, the language on eligible measures is probably too
broad as it appears to include items whose primary purpose is not
saving energy.\3\
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\3\ Specifically, on page 2, lines 17-20, we recommend deleting
``electrical wiring'' (on lines 17 and 19) and ``plumbing, sewage'' (on
line 18). Likewise, on page 3, lines 9-10, ``modernize'' should be
deleted. If the primary purpose of a measure is improving energy
efficiency, the remaining language on p. 3, lines 9-12 should be
sufficient.
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Additional Useful Potential Amendments to S. 761
In addition to the bills that are formally part of this hearing, we
wish to briefly mention several other likely amendments to S. 761 that
we support as follows:
S. 1106--Sensible Accounting to Value Energy Act (SAVE)
S. 1106 was recently introduced by Senators Bennet and Isakson and
has been referred to the Banking Committee. The bill would encourage
energy efficiency upgrades to homes by: (1) encouraging efficiency
improvements at the time of purchase; and (2) recognizing the value of
efficiency upgrades, and the operating cost savings they provide, when
buildings are assessed and qualification for mortgages determined.
Specifically, this bill instructs the Department of Housing and Urban
Development (HUD) to issue updated underwriting and appraisal
guidelines for borrowers who submit a qualified home energy report. The
bill would cover any loan issued, insured, purchased, or securitized by
the Federal Housing Administration and other federal mortgage loan
insurance agencies or their successors. These agencies collectively
guarantee more than 90 percent of all new loans. The bill has three
components:
Debt-to-Income Adjustment--Instructs lenders to account for
expected energy cost savings as an offset to other expenses in
the debt-to-income qualifying ratio, which tests the borrower's
ability to afford monthly mortgage payments. If no qualified
energy report is provided, the DTI will not be adjusted.
Loan-to-Value Adjustment--Instructs lenders to add the
present value of expected energy savings when calculating the
loan-to-value ratio, where not already accounted for in the
home's appraisal report. If no qualified energy report is
provided, the valuation will not be adjusted.
Consumer Information--Instructs lenders to inform loan
applicants of the costs and benefits of energy efficiency and
resources for improving the energy efficiency of a home.
The bill does not add to the current deficit or rely on taxes or
fees; instead it removes current obstacles holding back more efficient
building and remodeling of our homes. A recent study of more than
70,000 mortgages found that mortgages on energy-efficient homes were 32
percent less likely to be in default.\4\ This study provides strong
evidence that the SAVE Act is good credit policy and would help protect
lenders and taxpayers from the risk of mortgage default. The bill
removes an impediment to home energy efficiency from federal mortgage
policy by recognizing how energy efficiency can increase home value and
reduce operating costs, freeing up more income to pay a mortgage. In
addition, the bill would allow American homeowners to finance cost-
effective home energy upgrades as part of a traditional mortgage,
improving access to the comfort and money-saving benefits of efficiency
without increasing the cost of homeownership. The result is improved
and lower cost access to capital to invest in making homes better.
---------------------------------------------------------------------------
\4\ Sahadi et al. 2013. Home Energy Efficiency and Mortgage Risks.
Institute for Market Transformation. http://www.imt.org/resources/
detail/home-energy-efficiency-and-mortgage-risks.
---------------------------------------------------------------------------
The SAVE Act has support from a broad, diverse coalition including
the National Association of Manufacturers, U.S. Chamber of Commerce,
National Association of Realtors, National Association of Home
Builders, ACEEE, the Institute for Market Transformation, the Alliance
to Save Energy, and the Natural Resources Defense Council.
Manchin Power Plant Efficiency
This bill has not been introduced yet but would direct DOE to
conduct a study on opportunities to improve the efficiency of existing
electrical generation plants. There are significant opportunities to
improve existing power plants\5\ and this bill would help identify the
most promising approaches, helping power plant owners and regulators to
identify cost-effective opportunities to improve their plants.
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\5\ For example, the Electric Power Research Institute hosted a
conference on this topic in February, 2013. See http://mydocs.epri.com/
docs/PublicMeetingMaterials/1202/epri/call__to__papers.pdf.
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H.R. 540--Energy Efficient Government Technology Act
This bill was introduced in the House by Representatives Eshoo and
Rogers. We are aware of several senators who plan to shortly introduce
a similar bill. The bill would encourage the use of information and
communication technologies to save energy and would also assist efforts
to improve the energy efficiency of data centers. The bill would expand
upon the guidance in section 401 of S. 761 and also ``turbo-charge''
section 453 of the Energy Independence and Security Act of 2007,
dealing with energy-efficient data centers and cloud computing. Both of
these provisions would take advantage of recent advances in information
and communications technologies to increase opportunities for saving
energy, including reducing energy required to run data centers. To
provide one example of these opportunities, the Natural Resources
Defense Council and an ``intelligent efficiency'' service provider
worked with the owner of several already-efficient Washington, D.C.
office buildings and achieved 13 percent average energy savings in the
first year by monitoring building meter data, identifying problems, and
making actionable suggestions to building operations staff.\6\
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\6\ Report forthcoming shortly.
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Use of Federal Disaster Relief and Emergency Assistance for
Energy-Efficient Products and Services
Senator Gillibrand is now developing a bill to authorize and
encourage the use of efficient products and services when buildings and
other structures need to be replaced following a disaster. Under
current law, if the old building was inefficient, disaster funds cannot
be used to replace it with a more efficient building, which just
perpetuates inefficiency. The proposed bill will specifically authorize
acquisition of efficient equipment that has been screened by the ENERGY
STAR or Federal Energy Management Program, or efficient buildings that
meet national model building codes.
Water Efficiency
S. 761 is focused on energy efficiency, but in a number of places
the term ``and water'' can and should be added to also encourage water
efficiency. Using water more efficiently saves energy by reducing
energy used for water and waste water pumping and treatment. Specific
suggestions have been forwarded to Senators Shaheen and Portman by the
Alliance for Water Efficiency and we hope that some of these
suggestions can be included in a managers' amendment to S. 761.
Potential ``Backward Steps'' on Energy Efficiency
In addition to all of the above amendments which we generally
support, we have heard about a few amendments that have been drafted
but not introduced that could reduce energy efficiency and increase
energy use.
First, we are concerned about a provision developed by the National
Rural Electric Cooperative Association (NRECA) to establish new
efficiency standards for ``grid-enabled'' electric water heaters that
will use substantially more energy than water heaters that meet a
federal efficiency standard that will go into effect in 2015. NRECA
wants to allow electric coops to promote off-peak electric water
heating and to use other demand response techniques. While we are
hopeful we can work something out with them, their initial draft has
multiple problems and we strongly oppose its adoption. DOE also
understands NRECA's concern and is working on a waiver to the standard
for the appropriate use of electric water heaters in demand response
programs. DOE's initial proposal had some problems, but NRECA and
others heavily commented on the DOE proposal and DOE is now working to
address these comments. While we will work hard to reach an agreement
with NRECA, if those discussions do not succeed, we recommend that
instead of dictating a solution that has the support of only one set of
parties to this proceeding, Congress should instead include a provision
to direct DOE to make a decision and provide a deadline for DOE to make
such a decision.
There is also a potentially troubling amendment dealing with the
Leadership in Energy and Environmental Design program (LEED), a
voluntary ``green building'' certification program. Fortunately, we
understand that negotiations are ongoing between the interested parties
and we hope that a reasonable compromise can be found.
Energy Savings from these Provisions
As discussed at the beginning of my testimony, ACEEE has conducted
a preliminary analysis of the energy savings from S. 761 and most of
the bills and provisions discussed in my testimony. In compiling these
estimates, we have made informed assumptions on their impacts. For
example, where appropriations are required, given the tight federal
budget, we assume that full authorizations will not be funded and
instead we assume that the appropriation is half of the authorization.
Our savings estimates are summarized in Table 1. Table 1 lists annual
savings in 2020 and 2030 as well as cumulative savings over the 2014-
2030 period (e.g., the sum of annual savings for each year over this
period). The largest savings, in order, come from Section 101 of S. 761
(on building codes), S. 1106 (the SAVE Act), improving the efficiency
of existing power plants (Manchin), and Section 311 of S. 761
(industrial efficiency).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Overall, the savings from the provisions we support are roughly the
same as those from last year's version of Shaheen-Portman. Some
sections that were included in last year's version of this bill have
changed or been dropped, and we now have one year less to accrue
savings before the 2030 end-point in our analysis. Also, we revised
some of our earlier estimates based on updated data. Furthermore, none
of the amendments we analyzed this year were in last year's bill.
In last year's analysis we estimated that the Shaheen-Portman bill
would generate nearly $60 billion in net consumer savings (i.e.,
savings minus costs) and would support nearly 160,000 net jobs by 2030.
Since the energy savings from the new bill with amendments are nearly
the same, we would expect similar economic impacts in the new bill as
in the old. We will publish a detailed report when we complete our
analysis.
We are aware that S. 1020 (``repeal and replace'') has attracted
much attention so we paid special attention in our preliminary analysis
to that section of that bill. We found that the fossil fuel energy
savings achieved as a result of the implementation of Section 433 of
the Energy Independence and Security Act of 2007 (EISA) would be less
than intended when accounting for other, existing requirements
applicable to new and renovated federal buildings. New federal
buildings are already required by Section 305 of the Energy
Conservation and Production Act to operate at 30 percent below the
energy consumption levels of applicable building code. In addition,
there is an existing requirement in Section 431 of EISA for a reduction
of overall energy intensity of federal buildings by 30 percent in 2015.
The benefit to new and renovated federal buildings from these two
requirements effectively reduces the impact of Section 433 by roughly
50-80 percent annually. It is also important to note that these reduced
impacts are also due to some drafting problems with Section 433 that
has hindered its implementation; recognizing this, we assume that
Section 433 would ultimately only achieve 75 percent of its objective
and not 100 percent. If S. 1020 is adopted, it would extend the
existing 30 percent below code requirement for new buildings to all
buildings undergoing major renovations. The energy savings from this
provision, when paired with energy savings from a proposed increase in
the energy intensity target for all federal buildings to 45 percent by
2020, would exceed any savings gap from repeal of Section 433. Together
these two provisions could save approximately 0.03 quads more than
Section 433 would have in both 2020 and 2030, with an estimated total
cumulative additional savings of about 0.4 quads over the 2014-2030
period.
Conclusion
ACEEE believes that Energy Savings and Industrial Competitiveness
Act of 2013 (S. 761) would be an important step toward improving the
energy efficiency of the U.S. economy. All of the bills before us
today, as well as many of the additional amendments that may be
considered, would add to the energy efficiency savings achieved. We
support:
S. 1206--Benchmarking
S. 1191--Better Buildings Act (Tenant Star)
S. 1200--Residential Energy Savings Act of 2013 (Residential
Financing)
S. 1209--Race to the Top
S. 1084--School Retrofits
S. 1020--All of the Above Federal Energy Conservation Act
S. 1213--WAP and SEP Reauthorization
S. 1205--Local Energy Supply and Resiliency Act
S. 717--Non-Profit Energy Efficiency Act provided our
recommended modifications are made
S. 1106--Sensible Accounting to Value Energy Act (SAVE)
Senator Manchin's Power Plant Efficiency provision
H.R. 540--Energy Efficient Government Technology Act
Senator Gillibrand's provision on Use of Federal Disaster
Relief and Emergency Assistance for Energy-Efficient Products
and Services
Adding Water Efficiency to S. 761 in appropriate places
On the other hand, a potential amendment supported by NRECA on
water heater efficiency standards is a potential ``backward step'' that
could make enactment of energy efficiency legislation difficult.
Overall, we estimate that S. 761, together with all the amendments
we support, will reduce U.S. energy use by more than 15 quadrillion
Btu's over the 2014-2030 period. This is nearly as much energy as will
be used by the state of Oregon over this period. Saving this much
energy will benefit our economy and our environment and we urge the
Senate to adopt S. 761 and the other bills I have discussed, but to
avoid ``backward steps'' that lack broad support.
This concludes my testimony. Thank you for the opportunity to
present these views.
______
American Civil Liberties,
June 25, 2013.
Hon. Al Franken
Chairman, Subcommittee on Energy and Natural Resources, 304 Dirksen
Senate Office Building, Washington, DC.
Hon. James E. Risch,
Ranking Member, Subcommittee on Energy, Committee on Energy and Natural
Resources, 304 Dirksen Senate Office Building, Washington, DC.
Dear Chairman Franken and Ranking Member Risch:
We, the undersigned organizations, write to express our concerns
about S. 717, ``the Nonprofit Energy Efficiency Act,'' as it is
currently written. Although we do not object to the creation of a
program that awards grants to nonprofit organizations for the purpose
of retrofitting nonprofit buildings with energy-efficiency
improvements--indeed some of us would actively support such a program--
we do object to providing those grants to ``houses of worship.'' All
programs funded by Congress must adhere to the Establishment Clause of
the U.S. Constitution, which has been the foundation of religious
liberty in our country for over two hundred years. S. 717, in its
current form, however, cannot meet that demand.
Longstanding Supreme Court precedent\1\ firmly establishes that
``the State may not erect buildings in which religious activities are
to take place'' and ``it may not maintain such buildings or renovate
them.''\2\ This bedrock constitutional principle remains controlling
law. The Supreme Court has long maintained that direct money grants
create ``special Establishment Clause dangers.''\3\
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\1\ Tilton v. Richardson, 403 U.S. 672 (1971) (holding unanimously
that a government subsidy used to construct buildings at colleges and
universities was constitutional only if the buildings could never be
used for religious activities); Hunt v. McNair, 413 U.S. 734 (1973)
(upholding issuance of revenue bonds to finance the construction and
renovation of facilities because the law included a condition barring
government-financed buildings from being used for religious worship or
instruction); Committee for Public Education v. Nyquist, 413 U.S. 756
(1973).
\2\ Nyquist, 413 U.S. at 777 (emphasis added).
\3\ Mitchell v. Helms, 530 U.S. 793, 819 (1999) (quoting
Rosenberger v. Rector and Visitors of Univ. of Va., 515 U.S. 819, 842
(1995)) (Thomas, J., plurality opinion); see also id. at 856 (O'Connor,
J., controlling and concurring opinion) (describing Tilton as striking
down the grant statute because it lacked a ``secular content
requirement'').
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For nearly four decades, Congress has also consistently recognized
this constitutional principle. Statutory prohibitions on using taxpayer
funds to construct, renovate, or improve sanctuaries and buildings used
primarily for religious purposes exist throughout the U.S. Code.\4\
Most recently, Congress recognized the applicability of this precedent
when it limited green construction funding in the Recovery Act to
buildings in which secular activities take place.\5\
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\4\ See, e.g., 20 U.S.C. Sec. 1066c; 20 U.S.C. Sec. 1062; 20
U.S.C. Sec. 1103e; 25 U.S.C. Sec. 1813; 20 U.S.C. Sec. 1068e; 25
U.S.C. Sec. 3306; 20 U.S.C. Sec. 1011k; & 29 U.S.C. Sec. 2938.
\5\ Section 14004(c)(3) of the Americans Recovery and Reinvestment
Act of 2009 prohibited renovation of buildings used for religious
worship or instruction.
---------------------------------------------------------------------------
Religious liberty is one of our Nation's most cherished values and
it is best protected when the institutions of religion and government
are kept separate. The core constitutional rule prohibiting taxpayer
funds from being used to construct or renovate houses of worship is not
hostile to religion, but rather is a fundamental protection for
religious liberty.
Houses of worship are fundamentally religious, and as such, may and
sometimes must receive certain rights and protections that are
different from other nonprofits. When it comes to taxpayer funds, for
instance, there are certain limitations that serve to protect their
autonomy and independence from the government-the strings that come
attached to government funding ultimately weaken religion. Treating
houses of worship just like other nonprofits undermines the very
foundation underlying many of their special rights and protections.
Moreover, funding houses of worship would defy the fundamental
principle that no taxpayer should be forced to fund a religion with
which he or she disagrees and would open the door to government
favoring, or creating the perception that it favors, certain religions
over others.
Encouraging energy efficiency is a worthy goal, but cannot be done
in a way that jeopardizes the religious freedom for which our country
stands. We request that the bill be amended to reflect the
constitutional prohibition on providing direct government funds to
houses of worship and align with existing statutes.
Sincerely,
American Civil Liberties Union,
Americans United for Separation of Church and State,
Baptist Joint Committee for Religious Liberty,
Hindu American Foundation,
Interfaith Alliance,
Union for Reform Judaism,
______
Statement of Maggie Garrett, Legislative Director, Americans United For
Separation of Church and State
Americans United offers this written statement to the Energy
Subcommittee of the Senate Committee on Energy and Natural Resources to
express our strong concerns regarding S. 717, ``the Nonprofit Energy
Efficiency Act,'' as it is currently written. Although we take no
position on the underlying purpose of the bill-the creation of a
program that awards grants to nonprofit organizations for the purpose
of retrofitting nonprofit buildings with energy-efficiency
improvements-we oppose the language in the bill that explicitly
authorizes these grants to ``houses of worship.'' Providing taxpayer
funded retrofitting grants to houses of worship threatens religious
liberty and creates serious Establishment Clause concerns. Regardless
of the value of the proposed grant program, it should not be
implemented in a manner that violates cherished religious freedom
protections.
Founded in 1947, Americans United is a nonpartisan educational
organization dedicated to preserving the constitutional principle of
church-state separation as the only way to ensure true religious
freedom for all Americans. We fight to protect the right of individuals
and religious communities to worship as they see fit without government
interference, compulsion, support, or disparagement. Americans United
has more than 120,000 members and supporters across the country.
The Bar on Providing These Grants to Houses of Worship Protects
Religious Freedom
The bar on the government grants to retrofit houses of worship is
an important limitation that exists to protect religious freedom for
all. First, it protects religion and houses of worship. Houses of
worship are special in our country and our constitution. They are both
the place where worship takes place and are themselves expressions of
worship. Accordingly, they are accorded special protections-exemptions,
accommodations, and tax deductions. Restrictions on government funding
of religion is also a special protection-they protect the conscience of
the individual taxpayer, safeguard the autonomy of the religious
institution, and ensure an equal playing field for all religions by
prohibiting the government from playing favorites.
Such a bar also upholds the fundamental principle that no taxpayer
should be forced to fund a religion with whom he or she disagrees and
that the government should never support building (``establishing''
religion in its most basic form) religious sanctuaries. It protects
against the government favoring, or creating the perception of
favoritism for, certain religions over others.
The Tilton and Nyquist Line of Supreme Court Cases Prohibits Such
Grants for Houses of Worship
In order to further religious freedom, the U.S. Constitution places
certain limits on the government's ability to fund houses of worship.
The Tilton and Nyquist\1\ line of Supreme Court cases firmly establish
that the constitution prohibits the government from providing aid for
the construction, repair, and maintenance of houses of worship. These
cases stand for the proposition that ``the State may not erect
buildings in which religious activities are to take place'' and ``it
may not maintain such buildings or renovate them when they fall into
disrepair.''\2\
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\1\ Tilton v. Richardson, 403 U.S. 672 (1971); Hunt v. McNair, 413
U.S. 734 (1973); Committee for Public Education v. Nyquist, 413 U.S.
756 (1973).
\2\ Nyquist, 413 U.S. at 777.
---------------------------------------------------------------------------
Tilton v. Richardson\3\ the first in the line of cases, involved a
challenge to the constitutionality of a federal law under which federal
funds were used by secular and religious institutions of higher
education for the construction of libraries and other campus buildings.
The law allowed money to go to religious institutions, but it also
contained a provision that expressly prohibited funds from being spent
on buildings that would be used for worship or sectarian instruction.
Although the Court upheld the program, it unanimously held that the
provision was constitutionally required and unanimously invalidated
part of the statute that would have allowed religious schools to
convert the federally-funded facilities for worship or sectarian
instruction after twenty years had passed. The court explained: ``If at
the end of 20 years, the building is, for example, converted into a
chapel or otherwise used to promote religious interests, the original
federal grant will in part have the effect of advancing religion.''\4\
Tilton stands for the proposition that no building constructed with
federal funds can ever be used for worship or sectarian instruction.\5\
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\3\ 403 U.S. 672 (1971).
\4\ 4 Id. at 683.
\5\ Id. at 692 (Douglas, J., concurring in part and dissenting in
part).
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The Supreme Court reaffirmed this principle two years later in Hunt
v. McNair,\6\ when it upheld the South Carolina Educational Facilities
Authority Act, which established an ``Educational Facilities
Authority,'' through which educational facilities could borrow money
for the construction and renovation of their facilities at favorable
interest rates. The Act, however, required each lease agreement to
contain a clause forbidding religious use in such facilities and
allowing inspections to enforce that requirement.\7\ The Court upheld
the Act, including the condition that government-funded physical
structures could never be used for religious worship or instruction.
---------------------------------------------------------------------------
\6\ 413 U.S. 734 (1973).
\7\ Id. at 744.
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Finally, in Committee for Public Education v. Nyquist,\8\ the
Supreme Court struck down New York's program of providing grants to
nonpublic schools for the maintenance and repair of ``school facilities
and equipment to ensure health, welfare, and safety of enrolled
students.'' The Court summarized its previous holdings as ``simply
recogniz[ing] that sectarian schools perform secular, educational
functions as well as religious functions, and that some forms of aid
may be channeled to the secular without providing direct aid to the
sectarian. But the channel is a narrow one.''\9\ The Court then held
that ``[i]f the State may not erect buildings in which religious
activities are to take place, it may not maintain such buildings or
renovate them when they fall into disrepair.''\10\ In other words,
government funding for the construction, maintenance, or repair of
physical structures is unconstitutional unless there is no possibility
that the structures will be used for sectarian worship or instruction.
---------------------------------------------------------------------------
\8\ 413 U.S. 756, 762 (1973),
\9\ Id. at 775.
\10\ Id. at 777.
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This line of cases clearly holds that, in accordance with the
constitution, the federal government may not provide direct grants to
renovate and green houses of worship.
The Tilton and Nyquist Line of Cases Remains Good Law and Is Applicable
The rule set down by the Supreme Court in the Tilton/Nyquist line
of cases remains controlling law, as it has never been overruled in any
subsequent Supreme Court decision. Indeed, in its more recent cases
examining the constitutionality of government aid under the
Establishment Clause, the Supreme Court has maintained that direct
money grants create ``special Establishment Clause dangers.''\11\
---------------------------------------------------------------------------
\11\ Even though Mitchell was a fractured opinion, justices agreed
that direct money grants are different than in-kind aid. Mitchell v.
Helms, 530 U.S. 793, 819 (1999) (quoting Rosenberger v. Rector and
Visitors of Univ. of Va., 515 U.S. 819, 842 (1995)) (Thomas, J.,); see
also id. at 856 (O'Connor, J., concurring) (describing Tilton as
striking down the grant statute because it lacked a ``secular content
requirement'').
---------------------------------------------------------------------------
Proponents of this provision may try to argue that the Sixth
Circuit case, American Atheists v. City of Detroit Downtown Dev.
Auth.,\12\ limits Tilton and Nyquist and justifies these grants. This
case involved a challenge to a downtown revitalization project that
issued grants to organizations, including houses of worship. The
decision, which upheld the grants, is an outlier in this area of the
law\13\ and, nonetheless, cannot overturn a Supreme Court decision.
Furthermore, the court considered only ``neutrality'' to uphold the
program even though Mitchell states that the Supreme Court has ``never
held that a government-aid program passes constitutional muster solely
because of the neutral criteria it employs as a basis for distributing
aid.''\14\ Neutrality alone cannot not save a grant program.
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\12\ 567 F. 3d 278 (6th Cir. 2009).
\13\ See, e.g., Community House v. Boise, 490 F.3d 1041, 1059 (9th
Cir. 2007) (enjoining a private company that leased a government built
and owned building from conducting religious services and other
religious activities at a homeless shelter, even though the religious
activities were voluntary); FFRF v. Bugher, 249 F.3d 606, 614 (7th Cir.
2001) (striking down cash grants for telecommunications access for both
public and private schools because the grants ``provide[] a direct
subsidy to participating religious schools.''); Foremaster v. City of
St. George, 882 F. 2d 1485 (1989) (striking down a grant of free
electricity to a house of worship).
\14\ Mitchell, 530 U.S. at 840 (emphasis in original).
---------------------------------------------------------------------------
Proponents of providing government construction grants to houses of
worship also try to distinguish Tilton and Nyquist by pointing to free
speech cases. But in Locke v. Davey,\15\ the Supreme Court explained
that the speech-forum cases do not apply to government grant cases: A
government-funded scholarship program ``is not a forum for speech. . .
. Our cases dealing with speech forums are simply inapplicable.''\16\
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\15\ 540 U.S. 712 (2004).
\16\ Id. at 720 n.3 (2004); accord Teen Ranch v. Udow, 389 F. Supp.
2d 827, 839 (W.D. Mich. 2005), aff'd 479 F. 3d 403, 410 (6th Cir.2007)
(``the unconstitutional viewpoint restriction discussed in Rosenberger
is limited to cases involving speech in a public forum''); see also
Freedom from Religion Foundation v. McCallum, 179 F. Supp. 2d 950, 980
(W.D. Wis. 2002) (This ``interpretation of the free speech clause would
require the state government to recognize a forum for private
expression with regard to each of its fiscal decisions.'')
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Congress Has Consistently Followed the Principle of Tilton and Nyquist
Congress has consistently recognized that the constitution bars
direct funding for the building, renovating, and repairing of buildings
used primarily for religious purposes. Such provisions exist throughout
the U.S. Code\17\ Most recently, Congress recognized the applicability
of this precedent when it limited green construction funding in the
Recovery Act to buildings in which secular activities take place.\18\
We urge Congress to continue following Supreme Court precedent and the
principles of religious liberty.
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\17\ See, e.g., 20 U.S.C.A. Sec. 1066c; 20 U.S.C.A. Sec. 1062; 20
U.S.C.A. Sec. 1103e; 25 U.S.C.A. Sec. 1813; 20 U.S.C.A. Sec. 1068e;
25 U.S.C.A. Sec. 3306; 20 U.S.C.A. Sec. 1011k; & 29 U.S.C.A. Sec.
2938.
\18\ Section 14004(c)(3) of the Americans Recovery and
Reinvestment Act of 2009 prohibited renovation of buildings used for
religious worship or instruction.
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For all of the reasons listed above, we object to S. 717 as written
and urge this subcommittee to fix this Constitutional infirmity. We
urge that the subcommittee remove ``houses of worship'' from the list
of eligible entities and include language, similar to the language in
so many other statutory provisions, that restricts the grants from
funding the renovation of buildings in which primarily religious
activities take place. 18
______
Art Museum Directors,
Washington, DC, June 24, 2013.
Hon. Al Franken,
Chairman, Senate Subcommittee on Energy, Washington, DC.
Hon. James E. Risch,
Ranking Member, Senate Subcommittee on Energy, Washington, DC.
Dear Chairman Franken and Ranking Member Risch,
On behalf of 200 leading art museums in the United States, I am
writing to ask you to support S. 717, the Nonprofit Energy Efficiency
Act.
Given their prominence as civic institutions and their importance
to public education, museums have generally been built to high
architectural standards. That tradition continues today, with energy
efficiency now being a priority for new museum buildings. For example,
the Barnes Foundation's facility in Philadelphia, opened to the public
in 2012, was certified as Platinum under the US Green Business
Council's LEED (Leadership in Energy and Environmental Design) rating
system. The Grand Rapids Art Museum, built in 2008, received a Gold
LEED certification.
However, about half of America's leading art museums were opened to
the public before 1950. If you think of the word ``museum'' and try to
form a mental picture, chances are you'll see a grand colonnaded
building, vintage about 1920.
These building are often energy-inefficient and extraordinarily
expensive to maintain. In fact, building maintenance and utilities
comprise about fifteen percent of art museum operating expenses. The
problem is exacerbated considering that standards for climate control
are extraordinarily strict, with objects needing to be kept at nearly
uniform temperature and humidity regardless of external and internal
conditions. The director of the Boise Art Museum succinctly stated the
challenge:
The building has been added onto several times so that the
HVAC systems don't all function well together. The building is
fitted with a geothermal system, but using it could pose a
potential threat to the artwork.
The effort to achieve efficiency is time-consuming and expensive.
To cite one example, the Toledo Museum of Art has worked for twenty
years to reduce consumption in its 101-year-old Beaux Arts main
building.
Museums that are able to undertake retrofitting will serve as
highly visible public examples of the importance of energy-efficiency.
Most museums also have extensive outreach and education programs
focused on students, providing an excellent opportunity to help foster
greater awareness of the importance of energy sustainability, involve
young people in museum projects, and facilitate their discussion of
current energy issues.
Simply put, money saved by museums on utilities and maintenance
will be put back into the community in the form of exhibitions,
programming, education services to schools and families, and jobs.
For these reasons, the art museum community strongly supports the
bi-partisan Klobuchar-Hoeven legislation.
Sincerely,
Christine Anagnos,
Executive Director.
______
Committee on Domestic Justice and Human Development,
Washington DC, June 24, 2013.
Hon. Al Franken,
Chairman, Senate Subcommittee on Energy, Washington, DC.
Hon. James E. Risch,
Ranking Member, Senate Subcommittee on Energy, Washington, DC.
Dear Chairman Franken and Ranking Member Risch:
On behalf of the Committee on Domestic Justice and Human
Development of the United States Conference of Catholic Bishops
(USCCB), I write to express our support of The Nonprofit Energy
Efficiency Act (S. 717) to be heard before the Energy Subcommittee of
the U.S. Senate Committee on Energy and Natural Resources on Tuesday,
June 25, 2013.
Introduced by Senators Amy Klobuchar (D-MN) and John Hoeven (R-ND),
the Nonprofit Energy Efficiency Act will establish a pilot program at
the U.S. Department of Energy to provide financial grants to non-profit
organizations to help make the buildings they own and operate more
energy efficient. Under the proposal, $50 million would be authorized
for Fiscal Years 2014-2017 with non-profits eligible to apply for
grants up to 50 percent of the total cost of the energy efficiency
program-up to $200,000 per project.
The breadth of the Catholic Church's institutions includes
thousands of schools, parishes, hospitals and other organizations that
serve people and communities in need. Our institutions would benefit
greatly from this important pilot program meant to assist non-profits
to become more energy-efficient and environmentally responsible.
As Catholics, we are called to care for God's creation and to be
stewards of the environment and the earth's resources. As the U.S.
bishops insist in their statement Renewing the Earth, ``As individuals,
as institutions, as a people, we need a change of heart to preserve and
protect the planet for our children and for generations yet unborn.''
Currently there are no programs to incentivize the non-profit
community to invest in the energy efficiency of their hundreds-of-
thousands of buildings across the country. If enacted, S. 717 will
enable America's schools, youth centers, houses of worship, hospitals,
museums, community centers, and more to reduce operating costs, invest
more in the communities they serve and lessen their impact on the
environment, all while helping to conserve energy.
We thank you for your thoughtful consideration of this necessary
pilot program that will provide an important pathway for nonprofits
serving our communities to become more energy-efficient. We hope you
will join us in supporting S. 717, The Nonprofit Energy Efficiency Act.
Sincerely,
Most Reverend Stephen E. Blaire,
Bishop of Stockton, Chairman, Committee on Domestic Justice and
Human Development.
______
Statement of Elizabeth Thompson, President, Environmental Defense
Action Fund, on S. 1218
I would like to thank Chairman Franken and Ranking Member Risch for
this opportunity to provide written testimony to the Committee on
Energy and Natural Resources and the Subcommittee on Energy. On behalf
of the Environmental Defense Action Fund (EDAF) I urge your support for
an important piece of legislation that would advance energy efficiency
policies and measures to dramatically reduce America's energy waste.
Please support the Warner-Manchin bill, S. 1218, to establish a State
Energy Race to the Top Initiative.
EDF's mission is to preserve the natural systems on which all life
depends. Guided by science and economics, we find practical and lasting
solutions to the most serious environmental problems--including
America's wasteful energy consumption. We believe the State Energy Race
to the Top Initiative is one of those solutions.
This idea of a Race to the Top program for energy productivity has
been emerging over the last several months. The Alliance Commission on
National Energy Efficiency Policy published a set of policy
recommendations aimed at doubling U.S. energy productivity by 2030, a
goal that has also been echoed by President Obama. Within this set of
recommendations was the idea of a Race to the Top program. Senators
Warner and Manchin took this idea and created a workable solution that
could provide real energy and cost savings across the Nation. Modeled
after the successful Education Race to the Top, the initiative created
under their bill will challenge states and utilities to develop
innovative new policies that would advance energy productivity. This
voluntary initiative allows states the flexibility to pursue ideas that
make sense for their circumstances and economic conditions. By allowing
states the opportunity address their energy needs by their unique
design, the programs will encourage the states to be the nursery of new
ideas which can then be shared with other states to further energy
savings.
Under a Race to the Top Initiative, states, public power utilities,
electric cooperatives and Indian tribes would be eligible to apply for
funding. Applicants would be judged on their plans to implement
policies and programs aimed at improving the state's energy
productivity--this could include policies related to building
efficiency, combined heat and power, demand response, and smart grid.
As an example, because they deliver cleaner air, better health,
more reliable electricity and greater consumer control over electric
power and costs, programs and policies related to the advancement of
smart grid technologies could be incentivized under a State Energy Race
to the Top Initiative. The Federal Energy Regulatory Commission (FERC)
estimates that the installation of smart meters, programmable
thermostats and other technologies, along with Time-Of-Use (TOU)
pricing and full use of potential demand response, could reduce the
Nation's peak demand by 150GW by 2020--this reduction equates to the
output of about 2,000 power plants\1\. Implementation of smart grid
technologies not only reduces energy consumption and associated carbon
pollution, but also creates opportunities for American households and
businesses to save money. A number of states and localities are already
putting such programs and policies in place- and these efforts would be
rewarded and potentially expanded to other cities and states under a
Race to the Top Initiative.
---------------------------------------------------------------------------
\1\ 1) Federal Energy Regulatory Commission, A National Assessment
of Demand Response Potential, June 2009, p. x, ferc.gov/legal/staff-
reports/06-09-demand-response.pdf
---------------------------------------------------------------------------
We recognize that the federal government faces significant budget
challenges. For this reason the State Energy Race to the Top Initiative
would provide merely the seed money for innovative thinking, pushing
policymakers and program managers in the states to design new policies
that will drive energy efficiency, smart grid, and demand response.
These modest funds will drive innovative policies that will help states
best use their program dollars--further leveraging these funds. By
providing the initial funding for innovation, and additional support to
those with winning proposals, the Initiative will be able to drive
innovation at minimal cost, sending resources to the states who know
best how to save energy within their borders.
EDF believes that energy efficiency is vital to our economic growth
and international competitiveness. Thank you for providing this
opportunity to submit testimony. We look forward to working with you.
______
Friends Committee on National Legislation,
Washington, DC, June 21, 2013.
Hon. Al Franken,
Chairman, Senate Subcommittee on Energy, Washington, DC.
Hon. James E. Risch,
Ranking Member, Senate Subcommittee on Energy, Washington, DC.
Dear Chairman Franken and Ranking Member Risch:
On behalf of the Friends Committee on National Legislation (FCNL),
I would like to thank you for scheduling a hearing on pending energy
legislation, including the Klobuchar-Hoeven Nonprofit Energy Efficiency
Act (S. 717). FCNL is a strong supporter of S. 717 and its companion,
the Shaheen-Portman energy efficiency bill (S. 761), and we thank the
subcommittee for its hard work on these issues.
FCNL is a Quaker lobby in the public interest, established in 1943.
We have been on Capitol Hill, across from what is now the Senate Hart
Office Building, since our founding. In 2005, following a renovation,
we became Capitol Hill's first LEED-certified green building. Our
reflective and anti-leak windows, green roof and rain-capture system;
and geothermal heating and cooling system are all features of the
building that reduce our carbon footprint and save money.
With experience in energy efficiency, FCNL believes that S. 717 is
a common-sense measure that will help non-profits around the country
advance to the new standard in energy efficiency. Hospitals, schools,
and community centers-t a few institutions that will benefit from S.
717-will be able to devote resources to their constituents rather than
to energy bills. It will also help all of us become more
environmentally responsible.
FCNL is proud to support the Shaheen-Portman bill (S. 761) which
passed out of committee in early May. We know, however, that the
maximum impact from energy efficiency initiatives comes from full
participation: it is not sufficient to have only the for-profit or
private sectors taking advantage of the opportunity afforded by S. 761.
With its pair, S. 717, the non-profit sector can also become more
efficient and we are able to maximize our impact. Therefore, we are
also proud to support S. 717 on its own merits, but also as an effort
to extend the benefits of energy efficiency to the other half of the
institutions in the United States.
We thank you for your consideration of our support and for holding
this hearing on S. 717. We look forward to working with you in the
months to come to secure passage of both S. 717 and the broader
Shaheen-Portman bill.
Sincerely,
Jose Aguto,
Legislative Secretary, Energy and Environment.
______
Statement of Rev. Dr. C. Welton Gaddy, President of Interfaith
Alliance, on S. 1084
On behalf of Interfaith Alliance, whose members across the country
belong to more than 75 different faith traditions, I write to express
our religious freedom concerns with the Non-Profit Energy Efficiency
Act (S. 717) as it is currently written. As an organization who works
to protect the proper boundaries between institutions of religion and
government-in the best interests of both-Interfaith Alliance strongly
opposes grants to houses of worship to retrofit their facilities.
By including ``houses of worship'' in the list of non-profit
organizations eligible to receive government grants, this legislation
sets in motion a violation of religious liberty that ultimately hurts a
house of worship more than helps it. To steer such money to religious
institutions opens the door to government intrusion into the affairs of
houses of worship. Making an exception in this case will only result in
damaging a principle that has ensured the ability of diverse faiths and
beliefs to flourish in this country for centuries. Interfaith Alliance
has long been critical of efforts to funnel tax dollars to religious
institutions because of reverence and respect for these important
institutions in our society.
As a Baptist minister to a congregation in Monroe, Louisiana, I saw
first-hand the attempts of state and national officials to provide
houses of worship with rebuilding aid after Hurricane Katrina. Indeed,
just this year in the wake of Superstorm Sandy such attempts were made-
and continue to be made-to change existing Federal Emergency Management
Agency policies to enable houses of worship to receive direct
rebuilding grants. Though there is an understandable, compassion-based
temptation to steer federal funds to help houses of worship that have
been damaged or could become greener, I continue to believe it a
temptation we must resist. An act of compassion must not be allowed to
erode our Constitution.
The independence of houses of worship from the government
regulations which accompany government funds is more important than a
few federal dollars with which to rebuild or renovate. Becoming
dependent on or indebted to our government's financial benevolence is
far from being in a house of worship's best interest. The autonomy of
religious institutions-and religious leaders-from the government
coffers and the government's regulation is what enables religion to
flourish, enabling clergy to speak truth to power and be a prophetic
voice to our government.
I urge you to strike ``houses of worship'' from the language of the
bill and to add language to clarify that the funds authorized cannot be
used to retrofit buildings and spaces used for primarily religious
purposes. Government can do so much to help communities live greener
lives and build more energy efficient buildings. But to violate a
principle inherent in the foundation of our religious freedom would be
a disservice to all Americans.
Thank you for your consideration.
______
Interfaith Power & Light,
San Francisco, CA, June 21, 2013.
Hon. Al Franken,
Chairman, Senate Subcommittee on Energy, Washington, DC.
Hon. James E. Risch,
Ranking Member, Senate Subcommittee on Energy, Washington, DC.
Dear Chairman Franken and Ranking Member Risch:
Interfaith Power & Light (IPL) strongly urges your support for
S.717, the Nonprofit Efficiency Act, to be heard before the Energy
Subcommittee of the US Senate Committee on Energy and the Environment
on June 25, 2013.
With bipartisan support from its sponsors, Senators Amy Klobuchar
and John Hoeven, the Nonprofit Energy Efficiency Act will establish a
new pilot program at the U.S. Department of Energy to provide financial
grants to nonprofit organizations to help make buildings they own and
operate more energy efficient.
IPL and our 40 state affiliates are reaching over 15,000
congregations around the country, educating them about energy
stewardship, and inspiring them to utilize energy efficiency and
renewable energy in their facilities. However, as nonprofits with
limited resources and no access to tax credits, there is a cost barrier
for many of our faith communities. Grants for energy efficiency would
make a big difference and expedite adoption of these cost saving,
pollution reducing solutions while providing the added benefit of
demonstrating energy efficiency to congregational and community members
who visit the facilities.
Thank you and please let me know if you would like any more
information about our organization. I hope you will support S. 717.
Best regards,
Susan Stephenson,
Executive Director.
______
National Rural Electric Cooperative Association,
Arlington, VA, July 10, 2013.
Hon. Al Franken,
309 Hart Senate Office Building, Washington, DC.
Hon. James Risch,
483 Russell Senate Office Building, Washington, DC.
Dear Chairman Franken and Ranking Member Risch:
The Energy Subcommittee recently held a hearing on energy
efficiency, and the Energy Savings and Industrial Competitiveness Act
of 2013 (S. 761), and we wanted to make the subcommittee aware of the
important work electric cooperatives have done and will continue to do
in the area of energy efficiency. Additionally, we would like to
clarify the importance of both energy efficiency and demand response
programs for cooperative consumer-members.
The National Rural Electric Cooperative Association (NRECA) is the
not-for-profit, national service organization representing over 900
not-for-profit, member-owned, rural electric cooperative systems, which
serve 42 million customers in 47 states. NRECA estimates that
cooperatives own and maintain 2.5 million miles or 42 percent of the
nation's electric distribution lines covering three-quarters of the
nation's landmass. Cooperatives serve approximately 18 million
businesses, homes, farms, schools and other establishments in 2,500 of
the nation's 3,141 counties. Our member cooperatives serve over 13
million member owners in states represented on the Senate Energy &
Natural Resources Committee.
Rural electric cooperatives have a straightforward mission: to
provide safe and reliable electric service at the lowest possible cost.
Electric cooperatives believe energy efficiency, conservation and
demand response play an important role in helping to lower consumers'
energy costs, shift peak demand, and meet power supply goals all while
maintaining positive consumer member relationships. In fact, 96 percent
of electric cooperatives nationwide operate efficiency programs while
70 percent of co-ops offer financial incentives to promote greater
efficiency.
A recent nationwide American Customer Satisfaction Index (ACSI)
survey confirmed what cooperative consumer-members already know--that
the electric coops are unmatched in their service compared with other
industries. In the third quarter of 2012, Touchstone Energyr co-ops
tied their all-time high showing in the ACSI, scoring an 83. That
compares to an average of 76 for investor-owned utilities.
This responsiveness to membership and high quality of service is
exhibited by the fact that electric cooperatives across the country
have long provided information and advice to consumers to help them
manage their energy bills. This includes programs and incentives for
their member-owners to use electricity in an efficient and cost-
effective manner. The wide range of assistance includes rebates for
energy-efficient appliances, the replacement of compact fluorescent
light bulbs, and time of day rates to encourage off-peak usage.
Further, many co-ops across the country have voluntary programs
called ``Beat the Peak'' that are designed to provide consumer-members
with information on the amount of energy they use, and ways to take
additional steps at home that will save money and energy by reducing
energy use during peak periods.
Midwest Energy, in Hays, Kansas, has saved almost 1.4 million
kilowatt hours per year through the cooperative's ``How$mart'' program,
a ground-breaking on-bill financing initiative that aims to help
consumer-members overcome the cost hurdles standing in the way of
energy efficiency improvements.
Accordingly, NRECA supports legislative proposals such as The Rural
Energy Savings Program Act (RESPA) that would assist rural electric co-
operatives in offering or expanding efficiency programs like the
``How$mart'' program that offer of low-interest loans to their
consumer-members for efficiency improvements, while allowing repayment
of the loan through savings on monthly electric bills.
NRECA believes that RESPA would be a powerful tool that electric
co-ops can use to enable their member-owners to maximize energy
efficiency. The RESPA program would provide an ``on-bill financing''
mechanism that allows co-op members to borrow money from the co-op for
energy efficiency improvements at their homes and businesses and to pay
back those loans through their monthly electric bills. In most cases,
it is anticipated that even after adding the loan repayment on their
bill, consumer members' bills will still be lower than before the
efficiency improvements were made. This will improve consumer-members
quality of life and economic circumstances, while saving energy and
delaying or avoiding costly new investments in generation facilities.
Central Electric Power Cooperative (Central) and The Electric
Cooperatives of South Carolina (ECSC) commissioned a report on their
``Help My House'' Loan Pilot Program. This cutting-edge pilot program
provided on-bill financing through the South Carolina co-ops for
consumer-owners to make energy efficiency improvements to their homes.
For the 125 participating South Carolina homes, there was a 34 percent
reduction in total energy use (or 1.35 million kWh) in the year
following the completed improvements, with an average savings of $288
per home per year even while making the loan payment.
This report provides further evidence that on-bill financing for
energy efficiency improvements is a success, and should be expanded to
all electric cooperatives who wish to establish such an efficiency
program.
The prospects for these programs expanding in rural areas is
improving with the inclusion of language in both the House and Senate
Farm Bill reauthorizations that would provide for or expand co-op
relending to consumer-members for efficiency improvements.
The South Carolina co-ops have an existing load control program
with 120,000 switches for water heaters and air conditioners that also
allowed a comprehensive view of the benefits of both an on-bill
financing program and a demand response program. Importantly, the study
also concluded that load control devices coupled with energy efficiency
measures provided added value to efficiency retrofit programs. The
study determined that on-bill financing programs ``should deploy load
control devices and energy efficiency measures simultaneously, which
will improve load factor and benefit the system, the power purchaser,
and even the non-participants.'' This is a critical finding for
electric cooperatives that also provide leadership in load control
programs that save at least 500 MW of demand and hundreds of millions
of dollars per year for consumers.
In numerous major energy bills (including the Public Utility
Regulatory Policies Act (PURPA) of 1978; the Energy Policy Act of 1992;
the Energy Policy Act of 2005; and the Energy Independence and Security
Act (EISA) of 2007) Congress has declared the promotion of demand
response an important federal policy. A 2012 report by the Federal
Energy Regulatory Commission (FERC) based on the 2007 energy bill
recognized co-ops' leadership in demand response. It is through the use
of large capacity electric resistance water heaters that co-ops are
able to meet such federal goals.
Approximately 250 co-ops in 34 states have voluntary demand
response programs using large capacity electric resistance water
heaters that allow co-ops to reduce demand for electricity during peak
hours. In parts of the country, large capacity electric water heaters
also allow co-ops to integrate renewable energy like wind and store it
for use during daytime on-peak hours. Because the wind blows as much or
even more in the evening, generating energy at a time when consumers
least need it, large capacity electric resistance water heaters act as
a battery that stores wind energy at night that can be discharged
during the day in the form of hot water. This results in energy
efficiency benefits that offset the need to build new peaking
generation and transmission lines, not to mention cost benefits for co-
ops and consumers.
Great River Energy a generation and transmission cooperative in
Minnesota estimates that their 70,000 large capacity electric
resistance water heaters that are ``charged'' in the off-peak hours
each night each store approximately 14 Kilowatthours per water heater
per evening, totaling nearly one Gigawatthour of energy stored each
night. This could be considered the largest battery in the Midwest, and
a significant way to store renewable energy.
On April 16, 2010, the Department of Energy (DOE) issued a new
standard requiring 200 percent efficiency for large electric resistance
water heaters, which was a much higher standard than was expected. This
standard, which applies to manufacturers, is set to take effect in
April 2015. The new standard will require the use of heat pump water
heaters for electric water heaters larger than 55 gallons. However,
heat pump water heaters are more expensive, not considered as effective
in colder climates, and do not currently work with our co-ops' demand
response programs.
While NRECA continues to push DOE to find a common sense solution,
we believe a legislative fix would provide the clearest direction. We
also believe that the Energy Savings and Industrial Competitiveness Act
of 2013 (S. 761) sponsored by Senators Shaheen and Portman provides the
most appropriate vehicle to provide such a solution.
NRECA continues to work diligently to seek common ground with
energy efficiency and environmental advocacy groups who we believe see
the value in co-ops' demand response programs. We also continue to
solidify our coalition of stakeholders, including manufacturers of both
electric resistance and heat pump water heaters, as well as Regional
Transmission Organizations (RTOs) to find the best way to continue the
beneficial use of electric resistance water heaters.
We appreciate the Committee's leadership in the area of energy
efficiency, and look forward to continue to work with you minimizing
the impact of DOE's water heater efficiency standard on co-ops' demand
response programs. Also, even though RESPA is under the jurisdiction of
the Agriculture Committee, we will continue to update the Energy
Committee on its progress. Further, we believe that the notion of
combining demand response in conjunction with other energy efficiency
measures to achieve maximum impact, as concluded in the EESI study, is
something the Subcommittee should explore further. Again, we appreciate
the opportunity to provide information on the co-ops' work in the area
of energy efficiency and would be happy to answer any questions.
Sincerely,
Kirk Johnson,
Sr. Vice President, Government Relations.
______
Statement of Rabbi David Saperstein, Director and Counsel, Religious
Action Center of Reform Judaism
On behalf of the Union for Reform Judaism, whose more than 900
congregations across North America encompass 1.5 million Reform Jews,
and the Central Conference of American Rabbis, whose membership
includes over 2000 Reform Rabbis, I write to express our concerns about
the Nonprofit Energy Efficiency Act (S. 717) as it is currently
written. In its current form, the Nonprofit Energy Efficiency Act
threatens our nation's founding principle of separation of church and
state. We are asking that ``houses of worship'' be struck from section
(3)(B) and that protective language be added clarifying prohibited uses
of the funds. Leaving this section as is not only begs a lawsuit if
that provision remains in the enacted bill, but can hurt support for
the bill and make it needlessly controversial.
We believe that retrofitting buildings for increased efficiency is
one important way to meet emissions reductions targets. However, we are
deeply troubled by the language that explicitly makes houses of worship
eligible to receive funding for building retrofits. The Reform Jewish
Movement has a long history of strong opposition to government funds
flowing directly to houses of worship as it is both unconstitutional
and bad public policy (raising serious concerns for ``church autonomy''
and religious liberty). Indeed, direct cash funding of houses of
worship has never been upheld by the Supreme Court.
We are inspired by our tradition to fight for a climate and energy
future that protects our earth and all of its inhabitants. The Book of
Genesis tells us that God placed men and women on earth to till and
tend creation, and our sages remind us to ``Take care, lest you spoil
and destroy my world, because if you do, there is no one after you to
make it right again.'' (Kohelet Rabbah 7:13). As people of faith, we
are responsible for seeking justice as we work for a healthier and
safer environment for all. At the same time, we remain committed to our
long-established position that the principle of separation of church
and state is best for both church and state and is indispensable for
the preservation of that spirit of religious liberty which is a unique
blessing of American democracy.
The Supreme Court (in Tilton v. Richardson and Committee for Public
Education v. Nyquist, among other cases) has long held that taxpayer
dollars cannot go to construct, rebuild or repair buildings used for
religious activities. As written, without language prohibiting use of
these funds in sectarian settings, this bill would allow government
money to do just that. No taxpayer should be forced to support a faith
in which he or she does not believe. In addition, these funds would
risk government entanglement with religion, from which neither party
benefits. With government money come government rules and regulations,
which threaten the prophetic voice and autonomy that are central to our
country's diverse religious institutions.
The Reform Movement is deeply committed to putting our nation and
our world on the path to a clean, sustainable, and equitable climate
and energy future. In doing so, however, we must not compromise the
wall separating church and state, which has been a bedrock of democracy
and the foundation of religious liberty in our country for over two
hundred years.
______
The Jewish Federations of North America,
Washington, DC, June 20, 2013.
Hon. Al Franken
Chairman, Senate Subcommittee on Energy, Washington, DC.
Hon. .James E. Risch,
Ranking Member, Senate Subcommittee on Energy, Washington, DC.
Dear Chairman Franken and Ranking Member Risch:
We understand that the Subcommittee will be conducting an oversight
hearing on June 25, 2013, pertaining to pending energy efficiency
legislation, including the bi-partisan Klobuchar-Hoeven Nonprofit
Energy Efficiency Act (S. 717). On behalf of The Jewish Federations of
North America (JFNA), I want to share our strong support for S. 717,
for the following reasons:
JFNA has a long history of public private partnerships, and
with working with Congress to promote innovations and
efficiencies in nonprofit human services delivery. In this
regard, we endorse S. 717 as a timely and necessary pilot
program to assist nonprofits to become more energy efficient
and environmentally responsible.
JFNA represents one of the largest philanthropic health and
social services systems in North America. We are comprised of
153 Jewish Federations and 300 independent Jewish communities.
Within our umbrella, we support and operate thousands of
agencies (i.e., schools, community centers, hospitals, health
centers, day care facilities, and more) that serve millions of
individuals and families within most major population centers
across the country. Many of our institutions are several
decades old, and some more than a century. Their needs to
upgrade and retrofit antiquated and unreliable operating
systems are great.
We know only too well the importance of creating energy
efficiencies to our bottom line-- to ensure that we maximize
the use of philanthropic dollars to best serve the most
vulnerable populations and to maintain healthy and vibrant
communities across the country. We also know the power and
opportunity that is created through congressionally-derived
pilot projects. They help to shed needed light on issues of
importance to the country. They help to galvanize support for
needed public policy shifts. They help to bolster and promote
positive change within the nonprofit sector. In this regard, S.
717 would provide an important catalyst for energy improvements
and modernization within the nonprofit sector.
Comprehensive energy efficiency reform cannot succeed without
Congress also addressing the issues facing the nonprofit sector. Senate
inclusion of S. 717 within the greater Shaheen-Portman Energy Savings
and Industrial Competitiveness Act would be a non-controversial, bi-
partisan improvement to the bill.
We commend you for holding this important hearing and thank you for
your consideration of our strong support for S. 717
Sincerely,
Robert B. Goldberg,
Senior Director, Legislative Affairs.
______
The YMCA,
Chicago, IL, June 21, 2013.
Hon. Al Franken,
Chairman, Senate Subcommittee on Energy Washington DC.,
Dear Chairman Franken and Ranking Member Risch:
The YMCA of the USA is the national resource office for the 2,700
YMCAs across the U.S. The nation's YMCAs engage 21 million men, women
and children--of all ages, incomes and backgrounds--with a focus on
strengthening communities in youth development, healthy living, and
social responsibility.
We understand that the Subcommittee will hold an oversight hearing
on June 25 on the pending energy efficiency legislation, including the
bi-partisan Klobuchar-Hoeven Nonprofit Energy Efficiency Act (S. 717).
The YMCA of the USA strongly supports S. 717.
This is a timely and necessary pilot program to assist nonprofits
to become more energy efficient and environmentally responsible.
Many of our Ys are several decades old, and some even older. Their
need to upgrade and retrofit antiquated and unreliable operating
systems is great.
We want to ensure that we maximize the use of philanthropic dollars
to best serve the most vulnerable populations and to maintain healthy
and vibrant communities across the country.
S. 717 would provide an important catalyst for energy improvements
and modernization within the nonprofit sector.
Comprehensive energy efficiency reform cannot succeed without
Congress also addressing the issues facing the nonprofit sector. Senate
inclusion of S. 717 within the greater Shaheen-Portman Energy Savings
and Industrial Competitiveness Act would be a non-controversial, bi-
partisan improvement to the bill.
We commend you for holding this important hearing and thank you for
your consideration of our strong support for S. 717.
Sincerely,
Neal Denton,
Senior Vice President and Chief Government Affairs Officer.