Fostering Efficiency and Renewables

• Author: John Pendergrass
• Position: Director of ELI's Center for State, Local, and Regional Environmental Programs
• Pages: 10-10

Page 10 ❧ THE ENVIRONMENTAL FORUM Copyright © 2010, Environmental Law Institute®, Washington, D.C. www.eli.org.

Reprinted by permission from The Environmental Forum®, Jan./Feb. 2010

By John Pendergrass

Fostering Efciency

and Renewables

In mid-December, Green Energy

DC, the of‌f‌ice within the District

of Columbia Department of the Envi-

ronment with responsibility for energy

ef‌f‌iciency and customer-sited renew-

able energy, sent checks for thousands

of dollars each to about 50 members

of the Mt. Pleasant Solar Cooperative.

e cooperative is an organization

of homeowners in the Mt. Pleasant

neighborhood who collectively were

able to work their way through the le-

gal, policy, f‌inancial, and bureaucratic

issues associated with installing pho-

tovoltaic systems in an urban neigh-

borhood. e money comes from the

city’s Renewable Energy Incentive

Program, which was so popular that

it was oversubscribed within its f‌irst

two months of operation and still has

more than 100 homeowners on its

waiting list.

As a result of the Clean and Af-

fordable Energy Act, enacted in the

District in 2008, the city has a com-

prehensive set of programs to reduce

energy consumption and increase the

generation and use of renewable en-

ergy. In February the District plans

to issue a request for proposals for a

contractor to operate its Sustainable

Energy Utility to provide “sustainable

energy programs” to residents of the

District. e SEU was authorized by

the 2008 legislation and is similar to

the f‌irst state SEU, created in Dela-

ware in 2007. Each of these entities is

a public-private partnership intended

to deliver comprehensive energy ef‌f‌i-

ciency and renewable energy programs

to residential and business customers.

e SEUs are an attempt to unify

energy ef‌f‌iciency and consumer-sited

renewable energy services under a pro-

vider that is independent of energy

suppliers. In Delaware, the task force

that recommended to the state legisla-

ture that it create the f‌irst SEU noted

that energy suppliers are excellent at

marketing and delivering, but making

them responsible for energy ef‌f‌icien-

cy and sustainable energy programs

can present a conf‌lict of interest and

at best is not their core strength. Yet

when states mandate energy ef‌f‌iciency

programs and customer-sited renew-

able energy systems they typically re-

quire energy suppliers to provide those

services.

In Maryland, the state Public Ser-

vice Commission is overseeing utilities

in providing energy ef‌f‌iciency services.

is regulatory scheme is needed be-

cause, even though Maryland decou-

pled electricity rates

from consumption in

2007, utilities do not

make their money

from energy ef‌f‌iciency.

Making energy suppli-

ers responsible for pro-

moting customer-sited

renewable energy just does not make

sense if the utility is required to pur-

chase excess power from the customer.

e goals set for the Delaware SEU

are to reduce energy consumption by

30 percent for each participant by 2015

and to reduce greenhouse gas emissions

by 30 percent by 2020. As a result of

the programs, the state also expects to

create green jobs. e DC Council’s

goals for its SEU include reducing per-

capita energy consumption; increasing

renewable energy generating capacity;

reducing the growth of peak electric-

ity demand; improving the energy ef-

f‌iciency of low-income housing; reduc-

ing the growth of the energy demand

of the District’s largest energy users; and

increasing green-collar jobs.

Delaware and the District have

reason to expect they will be able to

achieve these goals, based on the expe-

rience in a few states with longstand-

ing energy ef‌f‌iciency programs, such

as California, Connecticut, Massachu-

setts, New Jersey, New York, and Ver-

mont. Vermont has had a public-pri-

vate entity similar to the SEUs, but fo-

cused solely on energy ef‌f‌iciency, since

2000. Ef‌f‌iciency Vermont has reduced

peak energy demand in summer and

winter and in 2008 it more than of‌f-

set expected increases in consumption.

Reductions in electricity use are par-

ticularly benef‌icial for reducing GHG

emissions because fossil fuel–f‌ired gen-

erating plants waste up to two thirds of

the energy they consume.

Such state and local ef‌forts could

be signif‌icant contributors to overall

reductions in GHG emissions. Mi-

chael Vandenbergh, a visiting profes-

sor at Harvard Law School, has stud-

ied consumers and energy use and

notes that households in the United

States contribute eight percent of to-

tal global GHG emissions, an amount

larger than the emis-

sions of every country

other than the United

States and China. He

and a colleague esti-

mate that realistically

achievable changes in

household behavior

could reduce U.S. emissions by seven

percent within 10 years. Among the

changes they single out are improve-

ments such as weatherization, which

are some of the f‌irst activities that Ef-

f‌iciency Vermont promoted and the

SEUs plan to target.

e Sustainable Energy Utilities

created by Delaware and the District

of Columbia hold promise for sig-

nif‌icantly expanding the adoption of

energy ef‌f‌iciency measures and renew-

able energy generation by consumers

and could provide a model for other

states and local governments.

John Pendergras s is Dir ector of ELI’s

Center for State, Local, and Regional Envi-

ronmental Programs. He can be reached at

pendergr ass@eli.org.

A  S

Sustainable ener gy

utilities focus state

eorts and leve rage

alternative prog rams