National Voice of the ESCO Industry
NAESCO serves as the national voice of the ESCO industry through its national and regional advocacy efforts that support the strategic interests of its members. We are proud that our industry and our members continue to serve as a vanguard in providing the investment, the jobs, and the infrastructure improvements needed to rebuild America.
NAESCO’s advocacy work is built around growing market opportunities for ESCOS and their key providers and partners. Key priorities include the following:
- Ensuring that federal administrative policies continue the high level of performance contracting work in the Trump administration;
- Supporting national and state policy initiatives that will boost energy efficiency and performance contracting;
- Proactively advocating for ESCO business friendly laws, regulations, and guidelines, such as supporting the extension of federal tax deductions and credits that boost energy efficiency and performance contracting;
- Defending ESCO enabling legislation or policies that are under attack; and,
- Working to relieve the bottlenecks that are crippling state buildings ESPC programs in several states with large potential ESPC markets.
Workshops, Conferences and Webinars
In 2017, NAESCO hosted its twelfth annual federal market workshop in Washington DC on March 15th and will host a dual track technology and financing focused workshop St. Louis on June 7-8th, and its national conference in Los Angeles on November 14-16th.
NAESCO offers four webinars throughout the year. NAESCO registered as a CEU provider with the AIA in 2016 and began to offer CEU credits at its workshops, webinars, and conferences. Currently, 2017 Webinar dates are set for February 27, April 24th, September 18th and December 11th.
Communications and Outreach
The website is continuously being updated. Additional photos, video links, and case studies were added throughout the site and the website was made smartphone and tablet-user friendly. We have expanded visibility and marketing opportunities for member companies on the NAESCO website. We introduced a NAESCO Twitter account @NAESCONews.
Promotion of NAESCO Accreditation as Market Differentiator
Policy makers and program administrators are struggling to identify experienced, high-quality energy service providers and NAESCO continues to expand its efforts to communicate the value of its rigorous accreditation program as a ready-made solution. The NAESCO Accreditation program began in 1996 and we currently have 9 Accredited Energy Service Providers, 15 Accredited ESCOs, and 2 Accredited Energy Efficiency Contractors. During 2017, we are undertaking one of our periodic reviews of accreditation criteria, focusing on project Monitoring and Verification (M&V) standards; these reviews ensure that our accreditation program stays current with the needs and concerns of industry customers.
NAESCO is very grateful for the support of our annual sponsors. Philips, Blue Energy Group, and Rexel Energy Solutions are Annual Platinum sponsors in 2017. Annual Gold sponsors in 2017 include Synergy Companies and UCONS, which have served as gold sponsors for the past eight years, and Walker Reid Strategies, which has served as a sponsor for the last three years. Our 2016 Silver sponsor Lutron is also a silver sponsor in 2017.
NAESCO Policy and Advocacy Activities
While we don’t know the specifics of the Trump Administration’s energy and tax programs, we believe that they will not threaten, and may even boost, performance contracting, for two reasons. First, Energy Performance Contracting has very strong bi-partisan support in the Congress and in state legislatures around the country. We don’t think that will change. EPC cuts government waste and re-directs money currently spent on wasted energy into a payment stream for badly-needed capital improvements in schools and other public facilities.
Second, President Trump has pledged to launch a major new program to rebuild America’s infrastructure – roads, bridges, schools, etc. We are proposing that EPC projects be used to rebuild public facilities which can complement other elements of the infrastructure program that will have to be funded from appropriations. And performance contracting has the potential to create good jobs in every community across the country.
NAESCO is making a focused effort to get the Trump administration to adopt a public buildings “Retrofit for Resiliency” program as part of its infrastructure initiative. Our proposal emphasizes performance-based tax and interest rate incentives for EPC projects, rather than direct grants, in order to leverage federal dollars. We propose that the Retrofit for Resiliency program include a comprehensive suite of measures, including EE, RE, CHP and DG, energy storage, and advanced controls and microgrids.
Performance Contracting Challenge
NAESCO continues to work with the FPCC to ensure the actual implementation of the $2 billion extension of the Challenge announced in October, 2016 with its new focus on both water and energy efficiency. FEMP has announced that federal agencies implemented $4.2 billion of ESPC and UESC projects by the end of 2016, exceeding the original $4 billion target. NAESCO has sent a welcome letter to the new Secretary of Energy Perry congratulating him on his new role and providing him with direct examples of what NAESCO member companies have accomplished in Texas and elsewhere, the magnitude of the energy and dollar savings created by the industry nationwide, and suggestions of how NAESCO, working with its members and DOE, can contribute meaningfully to the realization of the Administration’s interest in implementation of a massive infrastructure program.
NAESCO had worked successfully for four years with a group of interested NAESCO members and the lobbying firms Van Ness Feldman and Prime Policy Group to secure the extension of the Section 179D deductions for energy efficiency work in commercial buildings. We got extensions that covered the 2014 through 2016 tax years, but there were no action on extenders at the end of 2016. We are now working with our members as well as VNF and PPG to discuss next steps in 2017.
HUD Programs and Procedures
NAESCO and a number of ESCOs had established bi-monthly conference calls, hosted by HUD, to discuss several chronic problem areas in the HUD PHA ESPC program, including the difficulties of implementing ESPC projects with the Rental Assistance Demonstration (RAD) program that is changing the federal funding of PHAs, the lack of knowledge of local HUD staff and PHA managers about the HUD Rate Reduction Incentive program, and the HUD initiative to stimulate EE projects in federally assisted multifamily housing. We hope to resume these calls with the installation of the new HUD senior management team led by Secretary Carson.
Clean Power Plan (CPP)
NAESCO had worked for three years with a group of ten ESCOs that developed a substantial White Paper and a number of formal comment documents that were submitted to the EPA. Though President Trump signed an Executive Order to unwind the CPP, the actual process could take several years, because the CPP is based on federal court orders and an extensive record of EPA research and findings that must be challenged and reversed.
ESCO Market Survey Report
We worked with Lawrence Berkeley National Laboratory to publish the ESCO Market Survey in October 2016 which can be found on this website under industry reports. The report highlights several issues on which NAESCO and LBNL intend to conduct further research, including the increasing competition for performance contracting projects from non-ESCO companies, the role of M&V in distinguishing ESCOs from non-ESCO companies, and the political opposition to the increasing use of Non Energy Benefits in ESPC project savings calculations.
NAESCO now has a seat on the board of PACENation which is promoting the adoption of high-quality PACE programs across the country. We will work with the Trump Administration to identify opportunities to promote commercial PACE nationally as a way to stimulate EE and RE investments in commercial, non-profit and public facilities.
NAESCO state advocacy has focused on states where we have defended the industry against potentially damaging legislation, states that offer legislative opportunities to improve ESCO industry opportunities in the short term, and two precedent-setting states where we are working to assure that multi-year proceedings to re-vamp energy efficiency programs and utility regulation offer new opportunities for ESCOs.
NAESCO organized a group of ESCOs and their lobbyists to defeat legislation that was sprung on us at the end of the state legislature's 2016 session. The promoters of the 2016 legislation introduced the same legislation (SB1287) this January and NAESCO has organized a 2017 lobbying campaign to fight the legislation.
Apparently inspired by their colleagues in Illinois, the AIA in Indiana are trying to rouse support for a bill similar to IL SB1287.
Governor Walker has introduced, as part of his budget package, a provision that would revoke the Revenue Limit Exemption (RLE) for K-12 ESPC projects. The RLE allows school districts that implement ESPC projects to avoid the referenda that are normally required to raise school district debt limits because ESPC projects pay for themselves from savings.
In late December, Governor Kasich vetoed legislation that would have made the suspension of the state’s EERS and RPS goals permanent. Unfortunately, the legislation has been reintroduced in the 2017 legislative sessions, and we anticipate that it will be pushed aggressively by fossil-fuel interest groups in the state.
Over the past couple of years, a phrase in the ESPC enabling laws – that government agencies can use all types of financing except for state loan funds -- has caused problems with the development of some projects, particularly for water and sewer agencies. NAESCO has assembled a group of interested ESCOs interested in promoting a legislative fix.
Michigan passed a comprehensive energy bill that included increases in the state’s EERS and RPS and other provisions that encourage utilities to promote the development of Distributed Energy Resources. The bill had been under development in the legislature for two years, with the active sponsorship of Governor Snyder.
In California, a multi-year proceeding of the CPUC that is re-working the structure of the ratepayer-funded EE programs has reached an important juncture. One of the major changes in the CPUC’s August 2016 decision is that the utilities were ordered to raise the percentage of third-party programs from the current minimum of 20% of the portfolio to a minimum of 60% of the portfolio by 2020. Third party programs are defined as programs designed and implemented by third parties, not designed by the utilities and bid out to third parties for implementation.
Utilities filed their Business Plans in January, and other parties filed their Responses and Protests on March 3. The Responses and Protests of NAESCO and a number of other parties said that the utility plans failed to conform to the CPUC guidance in critical areas – Third Party programs, doubling the state’s implementation of energy efficiency (SB 350), and modifying the programs to recognize savings above existing conditions, with M&V based on normalized meter readings (AB 802).
We are also working to support California SB 518 which would extend the Prop 39 funding for K-12 and community colleges for an additional 5 years, until the end of 2023.
New York -- Reforming the Energy Vision
The New York State Public Service Commission is in the middle of a proceeding to restructure the state's utility industry to enable customers to implement the full range of Distributed Energy Resources (DERs) -- EE, RE, DR, CHP, DG -- with utility support rather than resistance.
- The first stage of the proceeding established the fact that widespread DERs are technically feasible and valuable to all ratepayers, and the NY Public Service Commission (PSC) ordered each of the utilities to begin pilot DER programs.
- The second stage moves the utility revenue model away from the old centralized system, in which utility financial health and profitability are dependent on kWh throughput, to a system in which the utility acts as the operator for a complex network of DERs.
NAESCO is proud to be the leading organization of the ESCO industry. NAESCO will continue to provide a strong and effective voice for the industry while pursuing creation of new market opportunities. We stand committed to moving industry causes forward and to promoting the good and essential work our members do to address the energy and infrastructure challenges faced by our nation.