Statement from the Southeast Energy Efficiency Alliance (SEEA)

Statement from the Southeast Energy Efficiency Alliance (SEEA) Provided by:

Jenah Zweig, Policy Director, Southeast Energy Efficiency Alliance, 50 Hurt Plaza, Suite 1250, Atlanta, GA

Event:

Environmental Protection Agency (EPA)’s Public Hearing on Clean Power Plan: Regulation 111(d)

Location:

Omni Hotel, 190 Marietta Street NW, Atlanta, GA 30303

Date:

July 30, 2014

I. SEEA Introduction Good morning, my name is Jenah Zweig, and I serve as Policy Director for SEEA (the Southeast Energy Efficiency Alliance). SEEA is a 501(c)(3) nonprofit, nonpartisan organization headquartered in Atlanta, Georgia that serves an 11-state territory—from Virginia, down to Florida, and over to Louisiana and Arkansas—which includes all of EPA Region 4, and portions of Region 3 and Region 6. SEEA leverages its extensive network—consisting of utilities, trade allies and manufacturers all working towards greater energy efficiency in the Southeast—to convene partners, strengthen enabling policies and strategic programs, and educate stakeholders through technical advisory services. SEEA is also one of six Regional Energy Efficiency Organizations (or REEOs) across the U.S., and works closely with the five other REEOs, and the regions they represent. SEEA does not take a position on EPA’s authority to issue the 111(d) draft guidelines. Instead, SEEA is here today to provide productive perspective on how EPA can facilitate the use of energy efficiency as a compliance pathway.

II. Request for More Energy Efficiency Compliance Guidance If the final rules move forward, SEEA requests that EPA provide more guidance and resources on: (1) the kinds of energy efficiency compliance options EPA would definitively accept as a component of compliance plans, and (2) how plans that incorporate energy efficiency as a compliance option should be structured. More specific guidance and resources will help states incorporate energy efficiency into their compliance plans, expanding the role of least-cost, market-based solutions for meeting EPA’s targets. EPA’s currently proposed guidelines wisely include energy efficiency as a compliance option. However, little-to-no guidance has yet been provided on how energy efficiency can be effectively incorporated into these plans through potential mechanisms such as utility-funded programs, statefunded projects, energy codes and appliance standards, and energy efficiency financing options. Many key southern stakeholders have expressed a need for greater certainty and guidance when considering how to approach energy efficiency as a compliance option. EPA’s assurance that it will be flexible and work with states on compliance plans once submitted is not enough. There is understandably a deterrent to the necessary investment in new metrics and infrastructure to support energy efficiency compliance without (1) the certainty that it will then be included, and (2) guidance on how it will be included. 1

In particular, utility energy efficiency program protocols for Evaluation, Measurement and Verification (EM&V) has many years of “tried and true” experience determining the energy-saving impacts of energy efficiency programs, and has been fully vetted within most public utilities commission jurisdictional proceedings. States and the EPA do not need to rebuild a duplicate EM&V infrastructure. However, the value of cost-effective energy efficiency for utility resource planning purposes, versus the value and cost-effectiveness for emissions purposes are not the same. Moreover, valuation and “scorekeeping” of the emission reductions attributable to end-use energy efficiency is not nearly as well-developed, and in most cases, is quite unfamiliar to state-level implementing agencies, such as state environmental protection agencies. Accordingly, EPA should develop the tools necessary to help states bridge this gap, such as emissions valuation protocols, deemed emissions values, a scoring system, or other quantification guidelines. A strong analogy can also be drawn between quantification of energy efficiency and mobile source emission reductions. For example, providing a tool comparable to the EPA Office of Transportation and Air Quality‘s MOtor Vehicle Emission Simulator (or MOVES) model could help alleviate concerns that energy efficiency EM&V will be onerous and cost-prohibitive. Doing so could also help clarify responsible parties and provide resources to more effectively support non-utility EM&V. Most significantly, such a framework would allow states to more confidently pursue energy efficiency strategies appropriate to their circumstances. Additionally, in the Southeast where most utilities remain vertically integrated, incentive mechanisms will likely be needed to eliminate return-on-investment gaps that utilities experience with energy efficiency as compared to other capital investments. Accordingly, EPA should consider how the framework they put forth may encourage market-based solutions that can address the regional implications of state-based plans in light of ISOs/RTOs, multi-state utilities, and the inherent interconnectedness of the electrical grid. Without more guidance and resources to increase confidence in energy efficiency as an assured compliance option, southeastern states are less likely to incorporate energy efficiency as a part of their compliance plans, foregoing the opportunity to secure this least-cost resource and the many benefits it can provide.

III. Beyond 111(d): Energy Efficiency as a Least-Cost, Multi-Pollutant Solution Providing guidance and resources to encourage and set the stage for the incorporation of energy efficiency into compliance plans has applicability far beyond 111(d). This process represents an unprecedented opportunity for energy efficiency to be comprehensively embraced as a least-cost, multipollutant solution, addressing not only CO2 emissions, but also facilitating compliance with other environmental regulations. For example, energy efficiency simultaneously reduces sulfur dioxide (or SO2) and oxides of nitrogen (or NOX) emissions, and can thus help reduce ozone and fine particle nonattainment designation risks. Accordingly, energy efficiency will also be relevant as a least-cost approach if new ozone or fine particle NAAQS or regional haze requirements are established. Additionally, energy efficiency generates water quantity and quality benefits–issues of increasing concern in Southeast.

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IV. Conclusion: Maximizing the Benefits and Economic Opportunity of Energy Efficiency To conclude, energy efficiency is a proven economic development tool. In addition to offsetting CO₂ and other criteria pollutant emissions, energy efficiency enhances the reliability of the electric grid, reduces power sector risks, improves public health, and supports job creation and economic growth. On average, $1M invested in the U.S. economy supports approximately 17 total jobs, while an investment in energy efficiency supports approximately 20 jobs, according to the American Council for an EnergyEfficient Economy (ACEEE). A recent 2014 SEEA study further supports above-average energy efficiency job creation findings, reinforcing the advantage of energy efficiency to local economies. With more guidance and resources, we believe that energy efficiency can be an equally effective emission reduction tool. The Southeast is well positioned to leverage its current energy efficiency momentum as a part of potential 111(d) compliance—where appropriate and cost-effective—to build a stronger, more vibrant region. Thank you for your thoughtful consideration of our comments and requests, and please do not hesitate to reach out if we may be of further assistance. Respectfully Submitted,

Jenah Zweig Policy Director Southeast Energy Efficiency Alliance (SEEA) [email protected] Office: 404-602-9663

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