NAESCO Advocacy Report
First Quarter 2008
NAESCO has firmly established itself as the national voice of the
ESCO industry through its national and regional advocacy efforts.
NAESCO has taken a leadership role in working with the US Department
of Energy to accelerate the ESPC project award pipeline, encourage
federal streamlining efforts, and expand federal organizational
capabilities to support the expected expansion of ESPC investment at
federal facilities.
NAESCO will be examining the effect of these changes on the
overall federal ESPC investment level and project pipeline at its
upcoming Federal Market Workshop. Entitled "Reinvigorating the
Pursuit of Energy Efficiency at Federal Buildings: A Report from the
Trenches", the workshop will be held on March 10, 2008 in
Washington DC. Click
here for additional information about the workshop.
NAESCO works to ensure that state initiatives focus on creating
verifiable energy savings and stimulate industry market
opportunities. In 2007, NAESCO provided written testimony in NY, CA,
MA, TX, NC and NJ state proceedings and participated as a witness in
Senate hearings on green job opportunities. NAESCO has also
strengthened organizational ties with the ESC, NASEO, BOMA, the
FPCC, the Apollo Alliance, ACEEE, and the NEMA CBTD Coalition.
NAESCO also participated in the national coalition to enact a
federal Efficiency Performance Standard, and in the Apollo Alliance
Clean Energy Investment Task Force to develop policies for the
investment of potential carbon cap-and-trade revenues into energy
efficiency.
During 2008, NAESCO will emphasize promoting energy efficiency as
a complement to new power plant construction in state regulatory
proceedings across the country; striving to make ESCO services part
of "demand response" programs; and, working to ensure that the new
demand-side "bidding" programs are as ESCO-friendly as possible.
Ratepayer-funded energy efficiency programs currently spend
nearly $2 billion per year nationwide and NAESCO participates in
state proceedings where significant program decisions are being
made. In 2008, NAESCO’ advocacy plan includes the following focus:
- California: The annual IOU funding level for energy
efficiency is about $600 million for the current program cycle
ending in 2008. ESCOs have the opportunity to access
approximately $750 million in incentives under the standard
performance contract, express efficiency and several residential
programs. NAESCO served this year and last on the Program
Advisory Groups that help the utilities operate their program
portfolios. NAESCO worked on the issues of third-party
contracts, and co-authored the PAG reports asking the CPUC to
improve utility administration of third-party programs. The CPUC
has changed the program planning process to longer-term
strategic planning, which will require even more of NAESCO's
resources in 2008 and beyond to continue to represent industry
interests.
- New York: The current NYSERDA Energy$mart programs
invest about $175 million each year for the next five years;
NYSERDA and ConEdison are operating a second program that is
spending $225 million in the ConEdison service territory; and
the New York Power Authority and the Long Island Power Authority
operate independent programs that invest an additional $100
million or more each year in energy efficiency. In addition,
Governor Spitzer has announced a "15 by 15" initiative that
mandates New York utilities to procure 15% of their energy
supply from energy efficiency by 2015 We anticipate that New
York will have to approximately triple its energy efficiency
spending to reach the Governor’s goal and the current PSC Staff
proposal for "Fast Track" programs increases the spending on the
Commercial Industrial Performance Program from about $22 million
in 2007 to almost $90 million in 2009.
NAESCO continues to serve on the SBC Advisory Group that
formally evaluates the NYSERDA-administered programs for the NY
PUC, as well as on the NYSERDA technical advisory panel
monitoring the energy supply situation and producing the state
energy plan. NAESCO serves as well on the Collaboratives that
approve the new programs in the ConEd service territory and is
also participating in the Collaborative effort that is making
the Governor’s "15 by 15" initiative into workable programs.
- North Carolina: The North Carolina legislature has
enacted a Renewable Energy Portfolio Standard that includes a
substantial set aside for energy efficiency. NAESCO was part of
a coalition that worked to support that effort and would like to
see similar types of EE/RE portfolio standards adopted by other
states as well as codified in federal legislation.
Also in North Carolina, Duke Energy responded to a NCPUC mandate
to spend 1% of its retail revenues on energy efficiency by
filing a program that it calls Save-a-Watt, which the utility
has also filed in South Carolina and Indiana, and plans to file
in Kentucky and Ohio. While the program is potentially
groundbreaking – investing hundreds of millions of dollars in
energy efficiency- NAESCO is working with a coalition of North
Carolina and national stakeholders to help Duke refine its SAW
proposal into a set of programs that we think are sustainable
and fair to ratepayers. The work to date has been in North
Carolina, and is now expanding into South Carolina and Indiana.
NAESCO President Donald Gilligan testified before the SC PUC on
the Duke program in early February.
- Massachusetts: The state legislature, with the
support of Governor Patrick is enacting legislation that will
significantly change the way that the state’s energy efficiency
and renewable energy programs are funded and implemented. NAESCO
has participated in the Save Energy Coalition, a broad-based
group of stakeholders that has helped the Legislature and the
Administration refine the pending legislation. NAESCO
anticipates being active in 2008 program design efforts that
will be required to implement the legislation.
State-Specific Business Issues
NAESCO participates in initiatives designed to address state-
specific industry business issues. Typically these involve delays in
the implementation of state buildings performance contracting
programs and/or program rules hindering project implementation. For
example, NAESCO delivered a workshop in Louisiana on M&V in May 2007
to staff from various state agencies, and agreed to support their
effort to develop standard protocols in Louisiana. NAESCO has
subsequently secured funding from the US DOE to develop in 2008 a
model M&V protocol for O&M and capital cost avoidance savings.
NAESCO expects to work in several states including Louisiana on this
issue, as well as in Tennessee, Ohio, Massachusetts, New Jersey,
Georgia, and Illinois in 2008 on other state-specific issues. NAESCO
will continue to respond to specific industry issues as they emerge
over the course of the year.
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