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NAESCO Newsletter

Fourth Quarter 2009

Featured Articles

NAESCO Updates


Advocacy

  • NAESCO 2009 Advocacy Report
    NAESCO’s advocacy work continues to expand to ensure that the growing number of energy efficiency initiatives across the country are cost-effective, sustainable, and offer new opportunities for ESCOs and other NAESCO members.

New Members

NAESCO welcomes the following new members:

Upcoming Events

Website

Industry News

Member News

For a full list of all NAESCO Member News, please click here.


Featured Articles

Interview with Christopher Seeley of the Clinton Climate Initiative
 

1. Can you provide some background on the Clinton Climate Initiative's Energy Efficiency Building Retrofit Program?
CCI’s Energy Efficiency Building Retrofit Program (EEBRP) brings together many of the world’s largest cities, energy service firms and financial institutions in a landmark effort to reduce energy consumption in existing buildings. CCI works with industry, financial, government and building partners to overcome market barriers and develop financially sound solutions that accelerate the growth of the global building efficiency market. CCI provides support to building owners such as city governments, commercial portfolio owners, schools, universities, and public housing authorities in identifying, designing, and implementing large-scale energy efficiency retrofit projects and brings the owner together with the necessary contracting and financial firms for implementation.

2. How did you come to work with the Clinton Climate Initiative and what exactly is your role there?
I joined CCI as the City Director of Bangkok, Thailand (a C40 City which is a group of the world's largest cities committed to tackling climate change) and now also help to manage projects across Asia for the Building Retrofit Program (including Tokyo, Seoul, Hong Kong, Ho Chi Minh City, Jakarta, Singapore, Sydney and Bangkok)

3. I understand you worked with Johnson Controls to implement energy efficiency upgrades at the International School Bangkok. Can you describe some of the energy efficiency upgrades involved in this project?
This project focused on upgrading mechanical systems - mainly air-conditioning systems, as well as implementation of lighting solutions which together represent approximately 85% of all energy consumed across the campus. The project will reduce approximately 30% of total energy consumption and eliminate 700 tons of CO2 per year.

4. How did the Clinton Climate Initiative come to work with ESCOs?
Energy Performance Contracting was identified by CCI as a valuable model for building owners and utilizes the services of ESCOs to deliver projects. This model focuses on a delivery methodology whereby the energy savings are contractually guaranteed by the ESCOs and hence helps to remove direct risk on the building owner by placing it on the ESCO.

5. On the CCI website, the benefits of Energy Service Performance Contracting are outlined. What investments, both in the public and private sector, do you think are needed to increase the accessibility of this type of retrofit financing?
Both sectors can play a role in developing specific financing mechanisms that make it easier for building owners to access funds to encourage energy efficiency retrofits. Preferential terms may include ease in access, high project financing values (90% and above), long term payback periods, and more flexible collateral requirements.

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NAESCO Updates

Advocacy

 
During the fourth quarter, NAESCO concentrated its advocacy efforts on federal government energy efficiency initiatives and on several major states that are implementing major new energy efficiency programs or significant expansions of existing programs.

FEDERAL

At the federal level we have been working on the issues surrounding the implementation of the American Recovery and Reinvestment Act, the inclusion of new funding for energy efficiency in the upcoming Jobs Bill and the development of energy and climate legislation.

American Recovery and Reinvestment Act (ARRA)
The ARRA, better known as the stimulus bill, appropriated more than $20 billion for energy efficiency and renewable energy programs, as well as another $20 billion of potential tax credits. The $20 billion of appropriations is supposed to be spent very quickly, with all funds contractually obligated in the next two years. The three major elements of the ARRA that have the greatest potential direct impact on the ESCO business are:

  • State Energy Program (SEP) - $3.1 billion distributed by formula to the states. Public building ESPC programs are a major component of many state plans. All of the state plans have now been approved, and all of the program funds have been obligated. Plan approval, however, has been conditional for most states. US DOE and the states are incrementally working out procedures for state program compliance with three laws that will affect the programs: the National Environmental Protection Act (NEPA), the Historic Preservation Act and the Davis-Bacon Act (prevailing wages). Consequently, very little of the program funds have been released, and virtually no funds have been obligated to actual projects. We now anticipate that funds will begin to flow to projects in the first quarter of 2010.
  • Energy Efficiency and Conservation Block Grants (EECBG) - $2.8 billion distributed by formula directly to communities with greater than 35,000 population and through the states to smaller communities plus $400 million distributed to states and local governments on a competitive basis. Most of the applications from the large local governments (>35,000 population) that are eligible for direct grants have been approved, subject to resolution of the compliance issues with the three federal laws that affect the SEP programs. The program plans for the grants that are to be distributed by the states to the smaller local governments (<35,000 population) are subject to an additional 2-4 months of review by DOE. The proposals for the $400 million in competitive grants, which is called the Retrofit Ramp-up and focuses on regional programs that can dramatically accelerate EE, were submitted in mid-December. Many of the proposals contain substantial ESPC programs, because ESPC is recognized as a critical component of these programs. The timing of award announcements is not clear, but seems to be 2Q2010.
  • Weatherization Assistance Program - $5 billion distributed through the existing program network of state and local governments and community organizations (CBOs). About 750 applications were submitted, and most of them have been approved. Funding is actually flowing in this program, because the major issue, application of the Davis-Bacon Act, to a program that had previously been exempt, has been resolved with the publication by the US Department of Labor of prevailing wage rates for weatherization workers.

NAESCO Advocacy Activities
NAESCO has been working with the National Save Energy Coalition that consists of hundreds of environmental and energy efficiency groups, industry trade associations and major companies to try to accelerate the implementation of the ARRA programs. The Coalition is in regular contact with White House and US DOE officials to push the resolution of the issues that are holding up the expenditure of SEP and EECBG grant funds.

NAESCO is also part of a small “SWAT Team” convened by US DOE to address the implementation of revolving loan funds and other finance plans that are elements of many SEP and EECBG plans. According to DOE, approximately $1 billion of the available grant funds will be devoted to revolving loan funds, most of which will be administered by government agencies with little or no relevant experience. The SWAT Team is assembling guidance documents and best practices program guides that will be distributed to the grantees through the US DOE website and a series of webinars that are scheduled on a weekly basis. One of the two major focuses of the SWAT Team is to ensure that the loans funds will able to work efficiently with public building ESPC projects. NAESCO is concentrating its work in this area. The documents and downloadable versions of the past webinars are available on the US DOE website at: www.eecbg.energy.gov/solutioncenter/.

NAESCO is also part of a consortium that submitted proposals to US DOE in the competitive EECBG program described above. NAESCO’s role in the consortium will be to ensure the public building ESPC programs are a major element of the proposed programs, and to provide training to local government officials that will implement the ESPC programs. The consortium anticipates submitting four different proposals from four regional groups of communities - Southeast, Midwest, California and Northeast.

To multiply our resources for this effort, NAESCO, in collaboration with the Energy Services Coalition and NASEO, submitted a proposal to US DOE for a grant to provide training and technical assistance to states and local governments that will be implementing ESPC programs as part of their SEP and EECBG plans. This unsolicited proposal has now been superseded by a DOE solicitation for technical assistance that is being run by the Oak Ridge National Laboratory. The ORNL RFP asks for about 90,000 hours over three years, or about 17 FTEs, for a task entitled “Improving Building Energy Efficiency through Energy Savings Performance Contracting.” The proposal was due December 7, and we expect DOE to make a decision quickly, as the date for starting work is February 10, 2010.

A bright note is that Kathleen Hogan, who has been at US EPA, in mid-October moved to US DOE as the Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy (EERE), which is responsible for administering the ARRA programs. NAESCO has worked with Ms. Hogan for a number of years. She has the reputation of being a very capable manager and perhaps she will be able to speed up DOE program administration. In early January, Roland Risser from PG&E also joined DOE to take charge of the appliance standards programs.

The Jobs Bill
The Congress is now working to assemble a second stimulus bill, which is currently called the Jobs Bill, which will apparently be considered once the debate on health care legislation has been concluded. One component of the bill will apparently be a residential program called Home STAR, which has been dubbed “Cash for Caulkers.” President Obama has embraced the program concept for its populist appeal (every voter can participate). Manufacturers and big box stores that would sell insulation and equipment to homeowners are also on board. NAESCO has been working with two national coalitions to ensure that companion legislation called Building STAR will provide rebate and enhanced tax incentives for the commercial and industrial sectors. NAESCO has drafted and is circulating to key Congressional staffers a measure that provides a dedicated funding stream to the MUSH markets, because we believe that these markets have special characteristics that require dedicated legislation. There is also now some talk in the advocacy community that some of the energy provisions of the energy and climate legislation (see below) may be included in the Jobs Bill. Assembly of the Jobs Bill will probably continue through January and early February, and is expected to be considered after Congress’ Presidents Day recess.

Federal Energy and Climate Legislation
The third major federal initiative combines two initiatives that had previously been separate: national energy efficiency and renewable energy resource standards (EERS and RES) and a national greenhouse gas emissions reductions policy (GHG). The House of Representatives passed the American Clean Energy and Security Act of 2009 (ACES) on a very close vote in late June. The Senate is now considering its own version of the bill, which is being assembled in separate bills being considered by the six Senate Committees that have asserted jurisdiction of parts of the legislation (e.g., Energy and Natural Resources, Environment and Public Works, etc.). The first of these bills, the American Clean Energy Leadership Act (S. 1462, or ACELA), passed the Senate Energy and Natural Resources Committee on June 17th by a vote of 15 to 8. ACELA contains no climate change or cap-and-trade provisions, because they are under the jurisdiction of the Environment and Public Works Committee. Senator Boxer (Chair of EPW) and Senator Kerry released their draft bill, the Clean Energy Jobs and American Power Act (CEJAPA) in late September and passed the bill out of Committee without debate because the Republican members of the Committee boycotted the Committee meetings. The other four Committees have not announced their schedules for release of their draft bills.

Senator Kerry announced that he is going to work with Senator Graham (R-S. Carolina) and Senator Lieberman (I- Connecticut) to draft a compromise bill that can draw broad bi-partisan support. The Senators issued an outline of their bill before the UN Climate Conference in Copenhagen, but to date there is no flesh on the skeleton. Further action on the bill may be delayed until Senator Kerry, who is currently recovering from hip replacement surgery, returns to work.

Senators Cantwell (D-WA) and Collins (R-ME) introduced a third bill in late December in late December. Their bill has many of the same GHG reduction goals as the Waxman-Market and Kerry-Boxer bills, but has a much simpler enforcement mechanism. Instead of the elaborate emissions allocations formulas in Waxman-Markey and Kerry-Boxer, the Cantwell-Collins bill would auction all allowances. About 75% of the auction proceeds would be returned to consumers as rebates, with the remaining 25% retained by the Federal government for deficit reduction.

Energy Efficiency Policy - RES and EERS
Both ACES and ACELA mandate a number of national energy efficiency programs, including a Renewable Electricity Standard (RES). This means that utilities must by that year procure a mandated percentage of their energy from renewable sources. ACES mandates 20% by 2020; ACELA mandates 15% by 2021. In both bills approximately one quarter of the mandate can be met with energy efficiency. This is commonly known as an Energy Efficiency Resource Standard or EERS.

NAESCO is part of a national coalition that is exclusively focused on making a standalone EERS a major provision of the legislation. Twenty-two states now have EERS mandates for their utilities. We are asking the Senate to enact an 10% standalone EERS, independent of whatever they may decide to do with and RES. Senator Schumer ( D-New York) is sponsoring the 10% EERS and has worked to recruit other Senators to support it. NAESCO Chairman Adam Procell has taken the lead in this effort, by asking Senator Hagan (D-N. Carolina) to sign onto the EERS. NAESCO will be approaching other companies to lobby their home state Senators in support of a stand alone EERS.

It is important to note that the argument for a strong national EERS is supported by a virtual blizzard of research reports that document the economic development and job creations of energy efficiency. A summary of one such report is contained in the Briefing Book.

GHG Reduction or Climate Change Policy
The GHG provisions of the legislation involve the establishment of a national carbon cap-and-trade system, in which the federal government issues a limited number of carbon emission allowances (in effect permits to emit CO2). The number of allowances is reduced each year to reach the target level of emissions in a future year.

The first major debate is about how the initial allowances will be distributed. The Obama administration has proposed that all allowances be auctioned. Industries (including utilities) that emit large amounts of CO2 have argued that forcing them to purchase allowances at auction will deal the economy a body blow, by increasing the cost of energy, and so they should be granted allowances at no cost.

The second major debate is about the use of the proceeds from the allowance auctions. NAESCO and the national coalition are urging that a substantial portion of the proceeds be invested in energy efficiency programs, because EE programs produce CO2 emissions at a negative net cost. Consumer groups and advocates for low-income ratepayers insist that most of the proceeds should be rebated to ratepayers. Advocates for utilities and energy intensive industries would like to see a substantial portion of the proceeds used to help them defray the cost of implementing emissions reduction technologies.

The coalitions that include NAESCO are arguing that cap-and-trade is important because it produces the revenues that can finance large-scale national EE programs. We are urging that the legislation mandate that substantial portions of the allowances be used to finance EE programs.

Media and Messaging
NAESCO is part of a third national coalition that is concentrating on communicating the job creation and economic development benefits of EE to the Congress and the public. The coalition is trying to counter the huge national media campaign, financed by energy producers and utilities, that is delivering the message that climate change legislation will cripple the national economy. NAESCO believes that by participating in this national communications effort we can also help to realize our own communications goals – to build the national reputation of the ESCO industry. The coalition has begun its effort by running newspaper ads in Pennsylvania and in specialized Washington publications whose readership are Congressional staffers.

REGIONAL

RGGI
RGGI is a prototype of a national carbon cap-and-trade program that encompasses nine Northeastern states that auction carbon emissions allowances and invest the auction proceeds in energy efficiency programs. These RGGI-financed programs are complementary to the substantial utility and state-administered EE programs in each of the RGGI states. NAESCO was appointed to the Advisory Committee for the New York program (approximately 34% of the total RGGI program) that advises NYSERDA, the program administrator on the composition of the RGGI program portfolio. So we are getting useful early experience with the issues that will affect the investment of the proceeds of a national cap-and-trade program.

NYSERDA’s initial program plan, approved last year, budgeted about $525 million over three years. The draft revised program plan budget has been reduced to about $301 million by two factors. The first is that because of the recession the value of the allowances has dropped significantly, from $3/tonne to $1.86/tonne. The second is that the Governor and the Legislature have appropriated $90 million from the RGGI proceeds to help balance the state budget. Lessons learned are that the auction proceeds may be volatile during the early years and that the proceeds are always subject to diversion from energy programs to other government programs.

On top of these two major adjustments on the revenue side, the Legislature passed Green New York legislation, which mandates that about $125 million of the $301 million be spent on residential and small commercial building EE programs and workforce training. NAESCO and other members of the Advisory Committee questioned whether this money could actually be spent effectively, since it is additional to substantial sums from EECBG, WAP, the NYSERDA and utility ratepayer-funded programs, and the Home STAR provisions of the pending Jobs Bill. The answer to our questions was that the Green Buildings spending mandate is absolute, and not subject to NYSERDA’s judgment as program managers. The lesson learned is that mandates for the expenditure of auction proceeds or emissions allocations do not always optimize the use of those funds.

To accommodate the Green New York mandate, NYSERDA is proposing to eliminate a program that NAESCO believes is at the core of the RGGI concept – a program that solicits competitive bids for innovative carbon emissions reductions – and to reduce funding for commercial and industrial building programs. The rationale for reducing the C/I programs is that that the ARRA SEP funding, which was not anticipated when the original program plan was approved, is supplying more money for MUSH market buildings than the RGGI budget reduction. The elimination of the competitive bidding program is apparently a trade-off to allow the continuation of several R&D programs (carbon sequestration and smart grid). It is not clear to NAESCO, and to other Advisory Committee members, that the research programs are meaningful, in light of the billions that are being spent on R&D in these areas across the country. The Advisory Committee discussion indicated that these research programs are politically untouchable, despite their questionable value.

NAESCO will now work with other members of the Advisory Committee to attempt to restore funding to these programs.

STATES

Perhaps the most exciting development at the state level is the flurry of activity related to the receipt and dissemination of the federal ARRA funding, which will invest about $11 billion in state and local government EE programs in the next two years. But while the states and local governments are working on their ARRA implementation plans, a number of states are instituting or expanding ratepayer-funded EE programs. Some states in which NAESCO has been working are highlighted below.

California
On September 24, the California Public Utilities Commission approved about $3.1 billion for energy efficiency programs in the 2010-2012 program cycle. This is a major re-affirmation of the importance of energy efficiency to the future of California’s struggling economy. During the months that preceded the Commission’s decision, NAESCO filed two rounds of comments stressing the need for timely Commission action and full funding of current programs until the new programs start in the first quarter of 2010.

Massachusetts
The state is doubling its energy efficiency programs, pursuant to the 2008 Green Communities Act. Utilities have filed implementation plans. NAESCO is participating in a statewide coalition of energy and environmental groups, and is co-sponsoring, with the state Division of Capital Asset Management (DCAM) and the Division of Energy Resources, a series of meetings and workshops about how to maximize ESCO participation in Green Communities and ARRA program implementation.

New York
The Energy Efficiency Performance Standard (EEPS) proceeding, which will approximately triple EE funding and put utilities back into EE program administration, is now entering its third year. A limited set of “fast track” programs is in the early stages of implementation. NAESCO has retained a consultant to monitor the proceeding and is directly participating in the Evaluation Advisory Group, the successor to the SBC Advisory Group, which is setting program EM&V standards and protocols. NAESCO is also monitoring and commenting on the development of new programs in the ConEd service territory. NAESCO filed comments urging the New York Public Service Commission to make the rules for program EM&V more workable.

Pennsylvania
The utilities will begin large EE programs (called Act 129 programs) with aggressive savings goals in early 2010. The utilities filed their program plans in mid 2009. Hearings on the plans were held during the summer. The Pennsylvania Public Utilities Commission (PAPUC) issued its decisions in mid-October. NAESCO filed comments that urged the PAPUC to address the Act 129 mandate that at least 10% of program savings come from government and non-profit customers by ordering the utilities to use their program funds to supplement and expand the very successful Guaranteed Energy Savings Agreement (GESA) program. The PAPUC rejected this suggestion, as it rejected most of the program suggestions made by various parties, and approved the utility plans without much modification. Rather than establish a separate delivery channel for government customers, the PAPUC decided to accept the utility approach of offering the same incentives to government customers but to differentiate the marketing to those customers. So ESCOs in Pennsylvania will have to piece together the rebates offered for various ECMs, along with the custom rebates, to make the best package for their customers.

North Carolina and South Carolina
Utility regulatory commissions in both states have ordered the states’ major electric utilities - Duke and Progress Energy - to implement large new energy efficiency programs. Both state commissions have rejected Duke’s program compensation proposal, called Save-a-Watt, as advocated by NAESCO and a coalition of energy and environmental groups who argued that the original compensation was excessive for the program elements. In December, the North Carolina Commission approved a settlement negotiated by the coalition that preserves the innovative aspect of the Save-a-Watt compensation plan (allowing utilities to collect a fraction of the avoided cost of power the EE programs replace) while reducing and capping the compensation at a reasonable level.

Florida
NAESCO continues to monitor the proceedings to update utility energy conservation goals based on current cost-effectiveness standards. The analysis of the potential market for energy efficiency submitted by the utilities does not seem credible. In contrast to the targets that have been set by other states, which typically range from 1-2% incremental savings per year, the Florida utilities are proposing targets of less than 1% cumulative through 2020. NAESCO is working with regional environmental and energy organizations to see how we might assist them in making the case for more aggressive EE programs. The talking point used by the interveners is that the utilities and the PSC staff seem to think that a 2-3% rate increase to fund EE programs is intolerable while a 30% rate increase to fund new nuclear plants is reasonable. In December, the Florida Commission ordered the utilities to resubmit their plans with more aggressive efficiency goals.

Illinois
The expanded Illinois utility EE programs started their second year of implementation, with approximately double their first-year budgets, in mid-June. NAESCO is working with the program managers for the Commonwealth Edison program to set up meetings with ESCOs to encourage the development of more comprehensive projects.

Michigan
The electric utilities have filed new energy efficiency program plans. NAESCO is monitoring the development of those plans, and has held a series of meetings with officials of the state Department of Energy, Labor and Economic Growth (DELEG) and the state Department of Management and Budget (DMB) about making ESPC a major part of the state’s ARRA implementation.

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New Members

NAESCO welcomes the following new members.

Duke Energy - Energy Service Affiliate Member - Duke Energy is the third largest electric power holding company in the United States, based on kilowatt-hour sales. Its regulated utility operations serve approximately 4 million customers located in five states - North Carolina, South Carolina, Indiana, Ohio and Kentucky - representing a population of approximately 11 million people. Duke Energy’s commercial power and international business segments operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.

Eaton Corporation - ESCO Member - Eaton is a $15.4 billion global power management company with product lines including electrical power distribution and control equipment, engine components, and hydraulic and fluid power products for aerospace, automotive, and other industrial uses. With 75,000 employees, the company has customers in more than 150 countries. Eaton has various solutions and services within each of these business sectors that deliver Energy Solutions. Specifically within the Eaton Electrical Sector - Eaton's Energy Solutions Business is focused on helping customers define, establish, achieve, and sustain their Energy program, objectives, and goals.

Onset Corporation - Energy Service Affiliate Member - Onset is one of the world’s leading suppliers of data loggers. The company’s HOBO data logger and weather station products are used around the world in a broad range of monitoring applications, from verifying the performance of green buildings and renewable energy systems to agricultural and coastal research. Based on Cape Cod, Massachusetts, Onset has sold more than one million data loggers since the company’s founding in 1981.

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Upcoming Events
 

NAESCO's Fifth Annual Federal Market Workshop
March 19, 2010
Pepco Building, 701 Ninth St., NW Washington, D.C. 20068

The fifth annual NAESCO Federal Workshop is a forum for public and private sector representatives to discuss the emerging opportunities in the federal marketplace. President Obama has indentified investment in energy efficiency as one of the key ways to revitalize the U.S. economy and put the country on a path to sustainable prosperity. Through aggressive federal energy mandates, the Obama administration has already started working toward a clean energy future that will create millions of jobs while cutting our imports of foreign oil. These mandates requires all federal buildings to cut their energy use drastically and very quickly these government entities will be looking for cost effective ways to reduce their carbon footprint. This workshop will focus on how the energy efficiency marketplace can leverage these unique opportunities by participating in a dialogue with the public sector concerning the value of ESCO projects, the fastest, cleanest and cheapest way to reduce energy use.

To register, please click here.

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Website

NAESCO has added a new feature, "This Week in Energy Efficiency", which is a weekly feature that provides short summaries of this week’s top news stories and what news makers are saying about energy policies. "This Week in Energy Efficiency News" is sent to our membership via email every Friday in addition to being posted to our webpage.

A coalition webpage has been added to the website which provides information about energy policy coalitions of which NAESCO is a part. The page highlights the specific policy issues and advocacy initiatives with which NAESCO and these other coalitions and groups are mutually interested and engaged. The page details NAESCO’s contributions to these groups and includes links to the relevant pages of the coalitions.

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Industry News

New Study Finds Federal Dollars Fuel Local Efficiency
A new report released by The American Council for an Energy-Efficient Economy (ACEEE) contends that cities and counties have long been active developers of successful energy efficiency programs, and with the release of grant funds, local governments are in a position to further their role. The report examines a number of efficiency programs implemented by American towns and cities prior to the passage of the American Recovery and Reinvestment Act of 2009 (ARRA). The Energy Efficiency and Conservation Block Grant (EECBG) program included in the ARRA will dispense more than three billion dollars to cities and states, creating jobs while improving U.S. energy efficiency through a variety of initiatives, including building retrofits, incentives, and audit programs. Some block grant recipients have already received funding to execute their chosen “shovel-ready” projects; however, many cities and towns are still waiting to put project plans into action.

ACEEE’s new report, Energy Efficiency Program Options for Local Governments under the American Recovery and Reinvestment Act of 2009, can be downloaded by clicking here.

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New Study Finds States are Leading the Way in Cutting Emissions
According to a recent study by Environment America, about half of the states have broad plans and specific regulations aimed at reducing carbon dioxide emissions. The report contends that these actions would cut emissions by over 7 percent between now and 2020, a sizable distance toward the 17 percent reductions President Obama promised at Copenhagen.

About half the reductions would come from proposed emission limits in six big states, plus a regional cap on power plant emissions adopted by New York and nine other Northeastern states. The other half would result from legally required increases in the use of alternative energy sources like wind as well as stronger state and city efficiency standards for appliances, lighting and buildings.

According to the authors, California’s goal of cutting greenhouse gases by one-quarter by 2020 is likely to be achieved because the state has been so successful in improving the efficiency of its power plants and buildings, promoting renewable energy and insisting on fuel-efficient vehicles. The state recently approved strict new energy-efficiency requirements for television sets, which now account for 10 percent of the average household’s energy use but are largely unregulated. The rules will save consumers $1 billion in energy bills and reduce carbon dioxide emissions by three million tons each year.

Environment America is a federation of state-based, citizen-funded environmental advocacy organizations. To download a free copy of the report, entitled America on the Move, click here.

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Energy Efficiency Consulting Companies Expected to Make $5.6 billion in 2010
According to a new report by Pike Research, companies providing energy efficiency consulting services to U.S. commercial building owners are expected to generate about $5.6 billion a year in revenue in which about 75 percent of the revenues come from implementing a suite of energy efficiency measures. Pike Research projects 250 percent growth to $19.9 billion by 2020. According to the report, about 80 percent of the current market is tied to projects in the institutional and federal sectors, spurred by the injection of nearly $11 billion in incentives, grants and lending opportunities through the American Recovery and Reinvestment Act of 2009 (ARRA). The market is expected to be boosted by the acceleration of Property Assessed Clean Energy (PACE) financing, in which companies pay a higher property tax in exchange for financing of energy efficiency measures. If more PACE financing becomes available and companies face higher costs from cap-and-trade legislation, Pike Research estimates the market would balloon to $37.6 billion by 2020.

Additionally, green building projects are expected to increase their market share. Green building currently accounts for five to nine percent of the retrofit and renovation market activity by value, which equates to a $2 billion to $4 billion marketplace for major projects. By 2014, this share is projected to grow to 20-30 percent, making it a $10 billion to $15 billion market for major retrofit projects.

Pike Research is a market research and consulting firm that provides in-depth analysis of global clean technology markets. The report, entitled The US Energy Service Company Market, can be accessed be clicking here.

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New Study Lays out Roadmap to Low-Carbon Energy by 2030
According to a new report released by the Worldwatch Institute and the Renewable Energy and Energy Efficiency Partnership (REEEP), energy efficiency and renewable energy used in concert, can play a key role in meeting rising global demand for energy services while averting catastrophic climate change. Losses in energy are wasted when converting fossil fuels to energy services can be sidestepped through the use of renewable energy, providing the same level of energy services with far less primary energy. The report states that improvements in energy efficiency make it easier, cheaper, and faster for renewables to achieve a large share of total energy production, while also rapidly reducing greenhouse gases and other emissions associated with energy use. The report states that for more than a decade, solar power, wind power, and other renewable technologies have experienced double-digit annual growth rates. Renewable technologies are already enabling Germany, Spain, Sweden, the United States, and several other countries to avoid carbon dioxide emissions and several communities have successfully transitioned from fossil fuels to 100-percent renewable energy, or are well on their way. The report concludes that this transition to a highly efficient economy utilizing renewable energy is essential for both developed and developing countries.

REEEP is a global partnership that structures policy initiatives for clean energy markets and facilitates financing for sustainable energy projects. To download a copy of the report, entitled Renewable Revolution: Low-Carbon Energy by 2030, by Janet Sawin and William Moomaw click here.

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Six States to Develop Comprehensive Action Plans to Improve Energy Efficiency of Existing Buildings
The National Governors Association Center for Best Practices (NGA Center) announced six states have been selected to participate in the Policy Academy on State Building Efficiency Retrofit Programs. The program helps states develop strategies to improve the energy efficiency of existing buildings and reduce costs and emissions. The states chosen are Colorado, Hawaii, Massachusetts, North Carolina, Utah and Wisconsin. The Policy Academy will help participating states develop and refine a number of policy options including innovative funding and financing mechanisms; building energy use benchmarking tools; targeted education and outreach measures; and workforce training programs. These measures will be used to help states design larger-scale building retrofit programs that lead to lower energy use, the reduction of greenhouse gas emissions and the creation of new jobs. Building retrofit programs may include measures like air sealing; insulation; upgrading or replacing heating or hot water systems; lighting upgrades; window replacement; appliance replacement with ENERGY STAR products; solar thermal hot water; and energy management system installation. The Policy Academy is being funded by the U.S. Department of Energy.

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LED Bulbs Save Substantial Energy, a Study Finds
A study conducted by Osram, a German lighting company, provides evidence that LED light bulbs save significant amounts of energy. The study results show that over the entire life of the bulb, from manufacturing to disposal, the energy used for incandescent bulbs is almost five times that used for compact fluorescents and LED lamps. The energy used during the manufacturing phase of all lamps is insignificant, less than 2 percent of the total. Previous to the release of this report, Osram notes that no studies had been done measuring the energy used to produce LED lamps. While it is known that LEDs use a fraction of the electricity of a regular bulb to create the same amount of light, it was not known how much energy was used in the manufacturing and distribution process.

To calculate what is know as a Life Cycle Assessment of LED lamps, Osram compared nearly every aspect of the manufacturing process, including the energy used in manufacturing the lamps in Asia and Europe, packaging them, and transporting them to Germany where they would be sold. It also looked at the emissions created in each stage, and calculated the effect of six different global warming indexes which includes the amount of greenhouse gas emissions created by each process, the acid rain potential, photochemical ozone creation, the release of harmful chemical compounds, and the resultant scarcity of gas, coal, and oil.

You can access the report by clicking here.

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The Copenhagen Diagnosis: Sobering Update on the Science
A new report released by the UN’s Intergovernmental Panel on Climate Change (IPCC) contends there is a very high probability of overall global warming exceeding two degrees Celsius unless global emissions peak and start to decline rapidly within the next decade. According to the report, recent measurements show a large net loss of ice from both Greenland and Antarctica, and the relatively rapid rise in global sea levels. The report contends there are several elements of the climate system that could reach a “tipping point” in coming decades if current emissions trends continue. The report notes that even at current greenhouse gas concentrations, it is already very likely that a summer ice-free Arctic is inevitable. The Greenland Ice sheet, too, the report warns, may be nearing a tipping point where it is committed to shrink.

The report states that the sun’s brightness has been extremely low over the past three years yet temperature records have been broken during this time. The years 2007, 2008 and 2009 had the lowest summer Arctic sea ice cover ever recorded, and in 2008 for the first time in living memory the Northwest Passage and the Northeast Passage were simultaneously ice-free. This feat was repeated in 2009. According to the IPPC report, every single year of this century (2001-2008) has been among the top ten warmest years since instrumental records began.

The report’s 26 authors include scientists from Germany, France, Switzerland, Austria, Canada, the U.S., and Australia. Most were also authors of the last IPCC report, and donated their time to draft “The Copenhagen Diagnosis.” The University of New South Wales’ Climate Change Research Centre provided logistical support.

You can access the study by clicking here.

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New Study Finds Energy Efficiency Could Reduce US Energy Use 20% by 2020
According to a new report, fully implementing current and likely future energy efficiency technologies could reduce US energy use 17-20% by 2020. Buildings are a key issue, says the report, which estimates that they account for nearly 70% of total electricity consumption. Deploying cost effective energy efficiency technologies in the building sector alone could eliminate the need for any new electricity generation capacity until 2030. Simple measures such as replacing air conditioners, refrigerators, freezers, furnaces, and hot water heaters with more efficient models could reduce energy usage by nearly a third. The report contends that the manufacturing sector, particularly energy intensive industries such as chemicals, petroleum refining, pulp and paper, iron and steel, and cement, could also reduce energy use by 14-22% by 2020 by implementing energy efficiency technologies. The report indentifies the major barriers to adopting energy efficiency measures as the upfront costs, volatile energy prices and a lack of readily available and reliable information.

The report found that moving ahead with a major energy efficiency overhaul will require a sustained effort and substantial public and private support. The report cites California and New York as examples of what can be achieved with sustained efforts and there are existing successful programs that could be expanded to good effect.

The report entitled, Real Prospects for Energy Efficiency in the United States, was released by the US National Research Council and can be accessed by clicking here.

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Member News

For a full list of all NAESCO Member News and Projects, please click here.

City of Knoxville Council Approved a $19 million Energy Services Agreement with Ameresco
The City of Knoxville Council approved an energy services agreement with Ameresco that will save the City of Knoxville millions of dollars while reducing its energy consumption and carbon emissions. The savings generated by the $19 million energy conservation package will pay for the costs of installing and maintaining the improvements in less than 15 years. Through this project, the city will upgrade 99 city-owned buildings, as well as 37 ballparks/athletic fields and 3 public golf courses in and around Knoxville. Ameresco will implement more than 17 different energy conservation measures such as energy efficient lighting, water conservation and weatherization to more capital intensive improvements such as upgrades to building comfort control systems, boiler replacements and HVAC improvements. Renewable measures, like solar hot water heating systems and a photovoltaic energy generation system, are included for several buildings. Among the cost savings the city will realize include equipment standardization and a reduction in maintenance costs. The City of Knoxville currently spends slightly over $4 million a year on utilities. The planned investments in energy efficiency and renewable energy will save over $1.1 million in the first year after the installation process and the savings should increase in subsequent years.

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Ameresco Awarded $2.7 Million Contract by U.S. Department of Agriculture
Ameresco was awarded the contract to implement five energy conservation measures for the U.S Department of Agriculture – Agricultural Research Service at two sites in Texas under the Department of Energy’s Central Regional Super Energy Savings Performance Contract. The ECMs include HVAC system upgrades, motor replacements, advanced metering, and energy management controls systems upgrades. The project will save over $2.7 million in energy and utility costs and provide the following benefits to the USDA: implementation of key energy/infrastructure/maintenance projects with no upfront funding; firm, fixed-price contract and expedited implementation schedule; reduced O&M demands; improvement of aging infrastructure to support USDA-ARS’s mission and progress toward meeting Federal energy/emissions-reduction goals through efficiency upgrades.

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City of Newburyport and Ameresco Unveil Largest Municipal Solar Project in Massachusetts
The City of Newburyport and Ameresco unveiled a solar photovoltaic system that is the largest municipal project of its kind in Massachusetts and will supply 502 kW of clean, renewable electricity to the Rupert A. Nock Elementary School and the City’s Department of Public Works building. Ameresco was the designer and builder of the system and will own, operate, and maintain the project over the next 20 years providing electricity exclusively to the two city-owned facilities. The city will receive $1.6M dollars in rebate funding from the Massachusetts Technology Collaborative Renewable Energy Trust, from which Newburyport was allowed to retain $400,000.00.

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Rhode Island Selects Chevron Energy Solutions to Construct Wind Turbines in Narragansett
The Department of Environmental Management, in partnership with the Town of Narragansett, has begun negotiations with Chevron Energy Solutions Co. to construct, operate, and maintain onshore wind turbines on State and/or Town properties in Narragansett. The project is designed to provide a sustainable energy supply to meet the needs of the state and town while maximizing potential revenue over the life of the generating facility. The energy produced from these sites will address needs for DEM activities at the Port of Galilee and state camping and beach facilities located in Narragansett. Energy produced on town sites will be used to power the sewage treatment plant and other municipal needs.

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Honeywell Partners with Washington Gas To Design And Build Major Power Facility For GSA
Washington Gas and Honeywell have been selected by the U.S. General Services Administration (GSA) to jointly design, install and maintain a central utility and cogeneration plant and distribution system at St. Elizabeth’s West Campus in Washington, D.C. The plant will meet up to 30 percent of the peak energy demand for the campus, which will serve as the U.S. Department of Homeland Security (DHS) headquarters as well as its agencies. The central plant will give GSA the flexibility to support the energy needs of DHS through onsite generation that will deliver nearly 25 megawatts of electricity for the 4.5-million-square-foot campus that is scheduled to be completed by 2016. The plant and distribution systems will provide thermal utilities; chilled and hot water; electrical services; and normal and emergency power. The new plant is expected to reduce emissions by more than 50,000 metric tons of carbon dioxide equivalent to removing nearly 10,000 cars from the road.

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Lone Star College System Awards $65 million Contract to Johnson Controls
Lone Star College System, the second largest community college system in the state of Texas, is updating facilities across eight campuses. Johnson Controls is overseeing the energy savings program that will reduce overall environmental impact and is projected to save more than $65 million in energy costs over the next 20 years. Water conservation measures, plumbing system upgrades and heating, air conditioning and ventilating improvements will affect eight college campuses and university centers, including LSC-North Harris, LSC-Kingwood, LSC-Tomball, LSC-Montgomery, LSC-University Center, Fairbanks Satellite College, LSC-CyFair and LSC-University Park. The college system is expected to realize utility reductions of 27 percent in electricity, 12 percent in natural gas and 28 percent of water resources. Additional enhancements include solar window film, updated vending machines and direct digital controls upgrades to the building management system at the North Harris campus. Lighting improvements and mechanical retrofits will be installed at the University Park center, as well as the North Harris campus.

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Pepco Energy Services Awarded Energy Savings Performance Contract by Prince George’s Country Government
Pepco Energy Services has been chosen by the Prince George’s County Maryland Government to implement a $4 million energy performance contracting project. The contract calls for Pepco Energy Services to provide high-efficiency lighting and water conservation measures, the replacement of heating and cooling systems with more efficient designs, and the installation of new energy management control systems in seven buildings which include the County Administration Building, Inglewood Center, Largo Government Center, the Public Works Maintenance Facility, RMS, Hyattsville Justice Center and the Central Communications Facility. Also included in this project is an Energy Awareness program for the building occupants which will promote behavior intended to simulate energy conservation actions.

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Pepco Energy Services Selected by Norfolk Public Schools for Lighting and Energy Infrastructure Upgrades
Pepco Energy Services has been chosen to provide a comprehensive lighting retrofit and complete the geothermal system installation at the Norfolk Virginia Public School System. Pepco Energy Services will provide high-efficiency lighting and lighting controls for 44 Norfolk public schools. As part of the contract, Pepco Energy Services will be completing the installation of the geothermal heating and cooling system at Sewell Point Elementary School with more than 60% of the energy to heat and cool the school being derived from the earth. The energy saved by this project is equivalent to the removal of 11.9 million pounds of CO2 from the atmosphere or the planting of 1,964 acres of trees.

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Pepco Energy Services Selected by Appalachian State University to Implement Energy Savings Performance Contract
Pepco Energy Services will provide over $5.4 million in energy infrastructure at Appalachian State University (ASU), located in Boone, North Carolina paid by guaranteed energy savings. The 12-year contract calls for Pepco Energy Services to provide energy conservation measures in 15 buildings on the ASU campus. As part of the performance contract, Pepco Energy Services will install over 8,800 energy-efficiency lighting fixtures and water saving fixtures, replace and upgrade heating and air-conditioning systems, update building automation systems in nine buildings, install a solar thermal water heating system for the Varsity Gym and add LED lighting to the River Street parking deck. The project will also include an Energy Awareness program with a web site that will monitor how much energy is being used in buildings where energy efficiency measures have been performed. With guaranteed annual energy savings exceeding $550,000 per year, this project will allow ASU to add over $5.4 Million in energy infrastructure paid by savings over the life of the contract. Construction has begun and is expected to be completed by the end of 2010.

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Schneider Electric Awarded Oregon Department of Corrections $1.85 Million Energy Efficiency Project
The Oregon Department of Corrections in Salem, Ore., is implementing $1.85 million in facility enhancements designed to improve operations, comfort and efficiency in four buildings with approximately 96,000 square feet. Schneider Electric will complete the work and guarantees that SCI will reduce its utility and labor costs by $335,000 annually when the project is completed in December 2009. Through this project, Schneider Electric will significantly reduce the peak temperatures in the summer by upgrading to a web-based direct digital control system, reducing lighting loads with lighting controls and retrofitting fixtures, installing modern thermal windows, and adding insulation and circulation in the attic. The staff will have full control and visibility of current conditions through the new control system. Schneider Electric partner Control Contractors, Inc. of Portland, Ore., will install a TAC I/A Series control system in the facility. When the project is completed, not only will the SCI facility be more comfortable, but it will also be more efficient. Schneider Electric estimates that as a result of the reduction in energy use, 314 tons of carbon will not released. This is equivalent to planting 12,575 trees, taking 68 cars off the roads for one year, or making 41 houses carbon neutral.

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Lawton Schools Awards Schneider Electric $2.2 Million Energy Efficiency Project
The Lawton Public Schools in Lawton, Okla., are implementing $2.2 million in facility enhancements designed to improve operations, comfort and efficiency at five campuses totaling nearly 900,000 square feet. Schneider Electric will complete the work as a performance contract with the district. Schneider Electric guarantees that the Lawton Public Schools will reduce its utility costs by $254,854 annually when the project is completed in the summer of 2010. The Lawton Public Schools has 35 campuses to serve this southwestern Oklahoma community with a population of 92,000. Faced with increasing utility costs, the district began to look at a means to update its aging facilities. The facilities contained aging automation systems with limited climate control or energy management capabilities. Schneider Electric will install a new direct digital control energy management system for efficient and reliable control of the facilities. A lighting upgrade, including gym high bay conversions in the five facilities, will both improve illumination and save energy. Schneider Electric will work against a deadline so the district will qualify for a $63,000 rebate from the local electric provider. The Lawton schools performance contract will produce a positive environmental outcome for the community as well. The reduction in energy use will avoid 5.8 million pounds of C02 pollution, 50,000 pounds of S02 pollution, and 21,000 pounds of N0x pollution. The benefits to air quality are equivalent to planting more than 365,000 trees across 700 acres or taking 653 cars off the roads every year.

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Siemens Industry, Inc. Awarded $27 Million Contract at Eastern Kentucky University
Eastern Kentucky University entered into a $27 million performance contract with Siemens Industry, Inc. to oversee an energy efficiency project which includes modifications to the coal-fired central heating plant which will double its efficiency thereby cutting coal consumption by half. EKU's utility bill is now about $6.4 million a year. When the work is completed next year, the university will have cut its energy consumption by 40 percent and will save almost $8,000 a day in energy costs. That's equivalent to taking 6,229 cars off the road, creating 227 acres of forest or not burning 179 rail cars of coal.

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Trane to Implement Energy Saving Improvements in Ohio Schools
Trane recently completed a project at the Lakota Local School District in Liberty Township, Ohio. The $2.45 million in energy efficiency upgrades are anticipated to save more than $195,000 in annual energy costs and more than $62,000 in annual operating costs. Upgrades included CO2-based demand control ventilation and dynamic air cleaners; updated HVAC controls; installation of variable speed pumping; installation of galvanized steel cooling towers; upgraded lighting and upgraded air handlers. In addition, repairs were completed on the original system design to help reduce the risk of damaging the equipment in the future.

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Trane Partners with Osage County to Upgrade Facilities
Trane recently completed facility upgrades in Osage County, KS. The completed upgrades are expected to reduce the county’s environmental impact and increase the productivity and comfort of county employees. Infrastructure improvements were also completed on county health, road and bridge, and sheriff facilities. The county will gain an anticipated $23,000 in annual utility, operations and maintenance savings from the improvements along with a rebate of nearly $245,000 from the Kansas State Historical Tax Rebate program. Upgrades at the courthouse include installing four high efficiency rooftop heating, ventilation and air conditioning systems to replace less effective and less efficient window air conditioning units and outdated steam boiler radiator systems.

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Trane Improves Efficiency at the Historic Oxford Hotel
Trane recently partnered with the Oxford Hotel in Denver, to implement upgrades on the building that improve energy efficiency while decreasing average monthly utility costs by 47 percent. New systems included two highly efficient chillers as well as a building automation system to optimize operation of the overall heating, ventilation and air conditioning (HVAC) system. Management used innovation to install the chiller systems in a basement not originally designed to accommodate such an advanced system. Two chilled water systems were included to ensure uninterrupted service, and each includes dual compressors for added flexibility and system redundancy. During high demand, the backup chiller and secondary compressors run as needed. To boost efficiency, a plate-and-frame heat exchanger was installed in the chilled water system to provide free cooling during winter months without the need to operate the new electric chillers.

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Wendel Energy Services has been Awarded Contract by the Town of Chenango
Wendel Energy Services was selected by the town of Chenango to upgrade the town’s aging water and wastewater infrastructure. The first step of the project will entail performing an energy efficiency study of nineteen Town-owned facilities including its Wastewater Treatment Plant and Pumping stations. Among the critical improvements planned are the upgrade of town’s wastewater treatment plant and the replacement of aging water meters and other failing equipment. The improvements being implemented will also to help the town comply with federal regulations related to the Chesapeake Bay. An additional $11.2 million in grants have been made available for fiscal year 2010 to assist municipalities with reducing pollution and improving water quality for the Bay region.

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All content Copyright 2009 The National Association of Energy Service Companies. All rights reserved. NAESCO, as sponsor and publisher, as well as the Newsletter editors cannot be held liable for changes, revisions or inaccuracies contained in the material published. For more detailed information on the products, projects, programs, services or policies covered in the NAESCO Newsletter, it is recommended that readers contact the appropriate person, company, organization, agency, or industry group.

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