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NAESCO Newsletter

February 2013

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NAESCO Federal Market Workshop
March 5, 2013
Pepco Building
701 Ninth Street, NW
Washington, DC 20068

NAESCO Midwest Regional Meeting
June 6, 2013
Morrison Conference Center
Ralph H. Metcalfe Federal Building
77 West Jackson Boulevard, Chicago, IL 60604

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NAESCO Advocacy Report

The full version is posted on the NAESCO Members Only Site, which can be accessed here.

NAESCO's advocacy work in 2013 will build on the work undertaken in 2012 and will continue to be a mix of working toward achievement of the following three priorities:

  • Ensuring the continued funding and political support for key federal, state and utility-administered ESPC programs,
  • Advocating for utility and state energy efficiency incentives that enhance ESCO projects in states with major ESCO markets, and
  • Promoting the adoption and use of state and utility energy savings monitoring and verification (M&V) rules and protocols that are workable and that recognize the full value that customers realize from ESCO projects.

While the re-election of President Obama ensures a continuing commitment to the use of energy efficiency and renewable energy strategies at federal facilities, it is not yet clear what the Administration's energy priorities may be on a broader scale.

FEDERAL ISSUES

Registration as Municipal Advisor
The SEC announced that it is postponing the issuance of the final rule on the registration of Municipal Financial Advisors until September 2013. Articles about the resignation of SEC Chair Schapiro cited the fact that the SEC has completed less than a third of the rules it is required to issue to implement Dodd-Frank, so our issue has not been singled out for delay. NAESCO has been lobbying the SEC and the Congress to have ESCOs excluded from registration since the temporary rule was promulgated in 2010. NAESCO participated in an intense effort in 2012 to educate House members on the issues in an attempt to get the exclusion included in HR 2827, bi-partisan legislation with 38 co-sponsors, which attempted to correct by legislation some of the problems with the SEC interim Municipal Advisor rule. The bill was enacted by the House but is not expected to clear the Senate this Congressional session. We viewed our effort as a way to educate key members and their staff about this issue and position ourselves for 2013 as we think this bill may be the basis for future legislative consideration.

Federal ESPC Program
NAESCO continues to focus on the implementation of the Executive Order 13514, the $2 billion Federal Performance Contracting Challenge, which President Obama announced in December, 2011.

NAESCO is working under a FEMP subcontract to help FEMP identify and address the barriers to project development and implementation. NAESCO is also engaged in the design and implementation of the initial pilot Deep Retrofit programs proposed by the Army and the GSA.

Tim Unruh, the FEMP Director, will present a status report on the Challenge at the NAESCO Federal Workshop on March 5 in Washington: https://www.naesco.org/events/meetings/federal/2013.

NAESCO 2013 Wish List for Obama Administration
In response to a suggestion from Jeff Genzer, NAESCO's General Counsel, we surveyed our member ESCOs to come up with a short list of priorities to take to the Obama Administration for action early in 2013. Our list is as follows:

  • Complete the implementation of the President's $2 billion Federal Performance Contracting Challenge.
  • Clarify and standardize the allowable term and other regulations that apply to UESC projects across agencies.
  • Expansion of the federal ESPC IDIQ to include mobility (e.g., ships and planes) as part of the permissible scope.
  • Rework and re-deploy the 179d tax deduction beyond the end of 2013, when it is scheduled to expire.
  • Streamline HUD EPC project development and approval procedures.
  • And finally, a wish that all of us can support from one of the founding members of NAESCO, a 30% federal tax credit for all EE and RE measures.

NAESCO is already working on all of these items. The 30% tax credit may be a stretch, but we are working with national EE and RE coalitions to extend the existing tax credits.

NAESCO has participated in meetings with senior US DOE officials and White House staff during the last month, as part of a national coalition of energy efficiency organizations. We have communicated our priorities to the Administration, and have learned that the Administration intends to focus its efforts on what it can accomplish with administrative actions using its existing authority. In conjunction with our peers in the national coalition, we have urged adoption of these administrative actions:

  • Follow through execution of the $2 billion Federal Performance Contracting Challenge and ensure that the federal ESPC programs maintain this accelerated pace of production in future years.
  • Issue rules that improve energy efficiency in appliances, equipment, manufactured housing and new site-built homes.
  • Focus the Better Buildings Initiative on commercial buildings and implement previously announced programs.
  • Expand federal adoption and procurement of CHP and assist states in accelerating CHP.
  • Continue data-gathering efforts, building on Green Button and including residential and commercial sectors.
  • Adopt the provisions of the SAVE Act administratively.
  • Work with FHFA to develop criteria under which PACE first liens will be permitted
  • Support of increased implementation of benchmarking, evaluation, and energy use disclosure programs at all levels of government.

Federal Energy Policy Legislation
NAESCO worked in 2012 in conjunction with other national energy efficiency and environmental groups on several bills, which, if enacted, would have supported policies that accelerate the use of energy efficiency and promoted the use of ESPCs. However, all parties, including ourselves, viewed 2012 as primarily one of positioning and the focus of the legislative activity on teeing up key legislative initiatives for inclusion in a 2013 energy bill. To the extent new energy legislation will be introduced in 2013, it is expected to draw upon the language and policies of the following bills which were introduced in the last session of the previous Congress.

  • HR 4107 (Bass-Matheson) would have mandated that the federal government lead by example in making its energy use more efficient, emphasizing the use of ESPC to meet federal energy savings goals. HR 4107 also included a loan fund for existing commercial buildings and a mandate that US DOE develop a plan for doubling the use of CHP by 2020. Congressman Bass was not re-elected in November.
  • S 1000 (Shaheen-Portman), which was approved in a bi-partisan 18-3 vote early in the session, also emphasizes federal government EE programs, without the explicit promotion of ESPC and the loan program for existing buildings. The provisions of S. 1000 that mandate increased coordination of US DOE industrial programs and standards for federal facility metering systems were passed in early December in HR 6582, the American Energy Manufacturing Technical Corrections Act of 2012.
  • S 3591 (Snowe), the Commercial Buildings Modernization Act was introduced in mid-September 2012 and would have updated the Section 179(d) tax deduction to address the current state of the real estate market, and emphasize retrofits rather than new construction. The bill would institute a higher sliding scale credit, from $1/SF for a 20% reduction to $4.00 per SF for a 50% reduction, and liberalize the ability of the building owner to allocate credits to project participants such as architects, ESCOs and financiers. The 179(d) tax deduction expires at the end of 2013. While Senator Snowe did not run for re-election, a version of this bill with an extension of multi-year support for Section 179(d) tax deductions is expected to be a high priority among proponents of energy efficiency in 2013.
  • Markey-Welch (amendment to HR 3409), which was introduced in mid-September and would amend the "no more Solyndras" bill to mandate a combined national RPS and EERS.
  • Schumer-Franken, the Energy Savings Act (ESA), which would mandate a national EERS and is expected to be introduced in early 2013.
  • HOMES Act (McKinley-Welch), which is essentially a re-working of the HomeSTAR bill that would boost residential energy efficiency and almost passed last year.
  • SAVE Act, Senators Bennet (D-CO) and Isaakson (R-GA), which would instruct federal loan agencies to assess a borrower's expected energy costs when financing a house.

Though not embodied in legislation, "Energy 20/20, A Vision for America's Energy Future," a "blueprint" released on February 4, 2013 by Senator Lisa Murkowski (R-AK), the Ranking Minority Member on the Senate Energy and Natural Resources Committee, outlines what might be characterized as a comprehensive Republican approach to national energy policy. Apparently Senator Murkowski began developing the paper last fall, when it seemed that the Republicans would take control of the Senate, and she would be chair of the Senate ENR Committee. Most of the paper discusses increasing energy production and removing regulatory barriers, but it does accurately characterize the contribution that increased efficiency has made to US energy supplies in the last four decades, and urges that the federal government re-design and streamline its energy efficiency programs to overcome barriers. There does not appear to be an equivalent paper on national energy policy from Senator Ron Wyden (D-OR), the Chair of Senate ENR, though both Senators Wyden and Murkowski have committed to holding a series of broad-ranging hearings on national energy policy later this year.

Streamlining HUD PHA Project Development
NAESCO helped to organize an all-day meeting at HUD on November 28 that was designed to walk through the process of developing ESPC projects at HUD-assisted Public Housing Authorities in order to highlight the positive changes that HUD has put into place to streamline the EPC project cycle, to discuss remaining bottlenecks to the development process as well as to identify potential solutions to eliminate some of these barriers. A number of NAESCO member ESCOs attended the meeting, and we came away with a list of near-term action items, one of which is for NAESCO to host a follow-on meeting with HUD to examine in a smaller and more interactive setting how best to overcome significant barriers that continue to frustrate the many ESCOs working in this space. NAESCO is currently working with HUD to discuss the ground rules for such a meeting, which we hope to be able to formally schedule in the near future. In addition, there will be a policy session at the upcoming NAESCO federal workshop on the HUD EPC program.

Tax Credits and Deductions
The renewal and/or expansion of federal energy tax credits will be elements in the overall debt reduction and tax reform package that will be negotiated in 2013. Some credits, notably the Production Tax Credit (PTC) that is vital to the wind energy industry, were extended for one year as part of the revenue package that was passed at the end of December, but the fate of the whole portfolio of tax credits and deductions beyond the current year has not been decided.

Federal Budget
The federal government is currently operating under a Continuing Resolution (CR) that carries through March, 2013. The CR, however, is not resulting in a business-as-usual continuation of federal spending at the same rate as FY12, because of the significant differences between the House and Senate version of the FY13 budget (a CR mandates maximum spending at the lower of the two) and the pending automatic budget sequestrations that are scheduled to take effect on January 1, 2013. In response to this uncertainty, the Office of Management and Budget (OMB) issued guidance that instructs federal agencies to only spend 28% of their FY12 budgets (rather than the 50% that one might expect) during the first half of FY13. We expect that this guidance will impose significant cuts on programs that are of interest to ESCOs, such as the State Energy Program (SEP), which has a 50% cut in the House budget.

STATE ISSUES
While some of our 2013 state activity will be related to new initiatives arising from the work of the state legislatures currently convening for the new year, we do know that there will be some states that will require continued attention in 2013. These states include:

Michigan - New ESPC Legislation
HB 5727 was passed by the legislature and signed into law at the end of 2012. The bill is similar to legislation in a number of other states that seeks to encourage state and local government agencies to use ESPC by defining the measures that can be included in a project, extending the maximum term of the project to 15 years, appointing a state "champion" agency (Department of Technology, Management and Budget), and authorizing DTMB to create a pre-qualified list of ESCOs and a set of standardized ESPC program processes and documents. In 2012, NAESCO organized a group of ESCOs to review the pending legislation, testified before the House and Senate Energy and Technology Committees, and worked with ESCOs and the Governor's office to finalize the bill language. In addition, NAESCO submitted to the Governor's Office a Briefing Book on the potential for ESPC in Michigan public facilities (more than $1 billion of potential projects). ESPC and energy efficiency were a centerpiece of Governor Snyder's new energy policy announced in late November. NAESCO is now meeting with DTMB, key legislators and the Governor's Office to ensure a fast start to the new state buildings ESPC program. As we have seen in other states, the start-up process is slower than we want it to be, but we think that the strong support of the Legislature and the Governor, and their belief that the ESPC program represents a significant opportunity for job creation and economic development, will be able to overcome the bureaucratic inertia.

New York - New NYPA Program
As part of Governor Cuomo's program to boost energy efficiency in New York, the New York Power Authority has initiated a new program to finance $450 million of energy efficiency projects in the next four years. This is the vindication of about a decade of work by NAESCO and member ESCOs to convince NYPA to run programs that work with ESCOs. We will continue to monitor the progress of the new NYPA programs to ensure that they are operating efficiently and leveraging the capabilities of the participating ESCOs.

Governor Cuomo has recently named Richard Kauffman, formerly a special assistant to US DOE Secretary Chu, to the position of Chairman of Energy and Finance in the Office of the Governor, where he will coordinate the Governor's ambitious program.

Ohio - New ESPC Initiative
In 2012, the Ohio legislature enacted SB 315, which was a key piece of Governor Kasich's state energy policy. SB 315 re-affirms the state's commitment to aggressive energy efficiency goals, and includes CHP as an allowable technology. NAESCO has been working to build on this success to persuade the Governor to re-organize the state's ESPC programs, which have significant potential in both state and local government facilities. We have convened a working group of interested ESCOs and are working with the Ohio chapter of the Advanced Energy Economy (AEE) and the Energy Future Coalition to facilitate the efficient review of local government and K-12 ESPC projects by the state government. Additionally, NAESCO was part of a coalition of energy efficiency and other groups, including the Ohio Manufacturers' Association (OMA) that beat back a challenge to the state's aggressive Energy Efficiency Resource Standard (EERS) by First Energy, a major Ohio utility. Indications are that First Energy may bring back this challenge as new legislation in 2013.

Pennsylvania - Resurrect the GESA Program
We will continue to try to work with the Department of General Services and the Pennsylvania chapter of the Energy Services Coalition to get the state buildings ESPC program back on track. We are also working with Pennsylvania-based NGOs, in the absence of strong state government leadership, to promote local government and K-12 ESPC projects. NAESCO suggested the structure of the new initiative to the Pennsylvania NGOs and helped them get funding from national foundations to pursue efforts to reinstate a strong ESPC program in the state.

North Carolina - Keep ESPC on Track
During the past few years, North Carolina has built a very successful state ESPC program, implementing hundreds of millions of dollars worth of projects. There are now some indications that the state Local Government Commission, which must approve all local government ESPC projects, is getting worried that ESPC is not delivering what it promises, because the project savings guarantee applies to energy savings, not dollar savings. Apparently some projects that were signed a few years ago contained energy cost escalation clauses that started with the then-high natural gas prices and applied high cost escalation rates for the full term of the contract.

We are working with North Carolina ESCOs to ensure that the ESPC market in the state continues to grow, and to address this issue of ESCOs guaranteeing dollar savings, before concerns over this issue can disrupt the program. NAESCO is drafting legislative language to address the issue of dollar savings guarantees and is scheduling a meeting with the State Treasurer to discuss the issue.

California - Major Legislative and Regulatory Proceedings

Implementation of Prop 39
California will add significant new funds to its energy efficiency efforts in 2013. In November, the state passed a ballot initiative known as Proposition 39, which closes some tax loopholes and will put about $500 million for five years into public school and community college energy efficiency projects. The Prop 39 funds will be administered by mechanisms to be determined by the state legislature in early 2013. NAESCO is monitoring the development of these mechanisms in the legislature and the Brown Administration. As such, NAESCO has formed a working group of ESCOs that will coordinate our industry lobbying efforts, contribute the work of the lobbyists that have been retained by several individual NAESCO members' on the subject and, if necessary, hire a NAESCO lobbyist to further support existing member lobbying activities. This lobbying effort is structured to replicate how NAESCO worked with member ESCOs in 2011, which resulted in our successful effort to defeat SB 118, which would have devastated the California ESCO industry.

Continue Advocacy in Key Regulatory Proceedings
We will continue to participate in the various CPUC proceedings whose outcomes affect the ESCO industry. We will continue to work with our California utility members and to focus our efforts on issues where NAESCO can have a significant impact without wasting our advocacy resources.

AB 32
In addition to the new EE funding from Prop 39, the California cap-and-trade program, commonly known as AB 32 (its authorizing legislation), held its first quarterly auction in November, generating about $100 million of funds. The CPUC decided to return the proceeds of this auction, and future auctions for the next few years, to consumers in the form of rebates.

Transition Period (2013-2014) Programs
In early July, the four California IOUs filed their program plans for the 2013-2014 Transition Period in response to the Commissions 450-page "guidance" document. NAESCO reviewed all of these program plans and filed comments, which urged the CPUC not to allow the IOUs to cut their program budgets, and urged the Commission to hold the REN and CCA proposals to the same rigorous standards for cost-effectiveness as the IOUs. The REN proposals as filed did not contain the kind of cost effectiveness analyses required of utilities. In response to the comments of NASESCO and other parties, the CPUC ordered the utilities and the other parties to file extensive supplements to their proposals in late August, and allowed parties to file two additional rounds of comments. In response to the NAESCO comments, which were echoed by comments from other parties, the Commission ordered the RENs to file detailed cost analyses, similar to the analyses required of utilities, for their proposed programs.

The Commission issued its Proposed Decision (PD) in mid-October, and the PD contained several orders that are problematic for the ESCO industry in California. The first is that the IOUs are ordered to reduce their non-incentive program expenses by 30% (approximately $300M). The PD contained no specifics about where the IOUs should make these cuts, so it is impossible for ESCOs and other stakeholders to determine how the cuts will affect programs. Some programs may be eliminated; others may be kept going with reduced staffs that will hinder program throughput. So NAESCO, in its comments, urged the Commission to suspend this part of the order until the beginning of the 2015 program cycle to allow for an orderly planning process. This issue is particularly important for NAESCO RES ESCOs, because RES programs are often less cost-effective than C/I programs, and so the cuts would be expected to fall disproportionately on RES programs. NAESCO's comments urged the Commission to recognize this problem and to recognize that cuts to RES programs, particularly programs that serve Hard to Reach customers and the working poor, run counter to long-established Commission policy.

The PD also put off indefinitely a revision of the dysfunctional review process for Customer Measures, which many ESCOs use, and appeared to tell the IOUS that they had to take the risk of predicting the results of the reviews (which are supposed to occur before a project is approved, but in fact are at least 90 days delayed). NAESCO comments urged the Commission to change this provision of the PD to protect the IOUs from unreasonable risk and to keep the Custom Measures program producing at full speed.

Financing
One element of the IOU program proposals that is mandated by the CPUC is a new set of financing programs that must total a minimum of $200 million of utility funding, money that would be diverted from other programs. NAESCO has supported the utilities' protests that this mandate is too much, too fast, and argues that the utilities should instead operate pilot financing programs during the Transition Period and plan to scale up the successful pilots during the full program cycle that begins in 2014. The CPUC rejected these protests and ordered the utilities to hire a finance program consultant to help the utilities assemble a program proposal in six weeks. In NAESCO's opinion, the consultant proposal, which is currently out for comment, is an exercise in putting the cart before the horse, in that it lays out a plan to develop a significant new financing infrastructure before there is a demonstrated market for the financing. For example, the plan for the large commercial market segments envisions spending about $7 million to set up a new utility billing system and to market the new financing program to service about 22 projects over two years. NAESCO's comments urged the Commission to suspend these expenditures until there is a demonstrated market that warrants them. In addition, NAESCO continues to meet with the consultants who formulated the financing program plan to get them to focus on more realistic short-term objectives.

Ratepayer Incentive Mechanism (RRIM)
Additionally, the CPUC is pushing ahead with separate elements of the proceeding that are examining the standards of program cost effectiveness, the approach to program EM&V, the proper structure for utility program administration incentives (for both the 2010-2012 and Transition Period programs) and other critical program elements. NAESCO is participating in all of these proceeding elements. The problem is that the ALJ's ruling makes the incentive fee based on what amounts to "good behavior" rather than documented energy savings. The metrics used to determine "performance" all relate to how responsive the utilities are to the rules and program changes proposed by the Commission and the Energy Division. These metrics harken back to the early days of utility EE programs, when utilities programs were evaluated on how many energy audits they performed or how many contractors attended training programs. NAESCO filed comments stating that this is a terrible move that will undercut national efforts to demonstrate that energy efficiency is a resource equivalent to supply side resources.

Oklahoma
NAESCO is working with a group of ESCOs to assist the state in the implementation of Senate Bill 1096 (SB 1096), which established the Oklahoma State Facilities Energy Conservation Program. The program is designed to combine both behavior-based and performance-based elements, but a recent RFP solicited only behavior-based services for all state facilities. NAESCO wrote a letter questioning this approach to the state official responsible for implementing the program, as well as to the Governor and key legislators. We will work with interested ESCOs to assist the state to implement a balanced program that delivers the maximum benefits.

West Virginia - Educate State Officials about ESPC
We are reaching out to state officials who have indicated an interest in performance contracting to educate them about the value of using NAESCO accredited ESCOs in their projects and to assist them in developing language for RFQs and RFPs for ESPC.

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New Members

NAESCO is pleased to welcome the following new members and to include their "Statements of Introduction" about their organization.

CTI - ESCO Member- CTI offers a Qualifying Review of facilities for their EPC potential which outlines potential energy savings measures, estimated savings, the estimated project cost, the positive environmental impact and the steps involved in an EPC. CTI will tailor a comprehensive set of Energy Conservation Measures to fit a PHA's particular savings needs. They may include lighting; heating, air conditioning and ventilation; control systems; building envelope improvements - insulation, roofs, windows, water and sewer metering and use reduction; as well as the implementation of renewables, sustainable materials and operations, Demand Response, cogeneration and CHP.

E3, Inc. - ESCO Member - E3, Inc. is a professional consulting firm with greater than 100 years of combined experience through its engineers. We are a firm which endorses "Green /LEED Technologies" and has the experience, knowledge, and the confidence to offer engineering services that we believe are unmatched in the Energy Service Company field. Our designs balance Cost, Quality, and Time to guarantee that our clients receive the best possible results.

Lutron Electronics - Energy Service Affiliate Member - Lutron light control products range from individual dimmers to total light management systems that control entire building complexes. Some of the larger Lutron light control systems in the US include the 52-story New York Times Building in New York; Lincoln Financial Field in Philadelphia; and the Orange County Convention Center in Orlando. Lutron light control systems beautify some of the world's most prestigious public locations: the Statue of Liberty; the Guggenheim Museum in Bilbao, Spain; and the Bank of China headquarters in Beijing, to name just a few. As world-renowned as they are, Lutron light controls continue to perform the most valuable of personal services - helping to keep people safe and comfortable in their own homes.

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Featured Articles

Interview with Joe Castro, Head of the City of Boulder, Colorado's Energy Performance Contracting Program

The American Council for an Energy-Efficient Economy and the Alliance for Water Efficiency recently announced the first-ever awards for exceptional efficiency programs that save both energy and water. The City of Boulder's EPC Program was named one of the five exemplary award winners. Programs selected for the award were honored for their market penetration and innovation in helping their customers or stakeholders to achieve both water and energy savings through efficiency. The lessons learned by these programs can be found in a new report, Tackling the Nexus: Exemplary Programs that Save Both Energy and Water, released by ACEEE and AWE. To read the report, click here.

What number of projects have been implemented and are currently operating and what data have you collected thus far on energy and dollar savings?
We did energy and water conservation projects in 66 buildings. We base lined our energy consumption in 2008 and we did the same in 2011 and we found that we reduced our energy consumption by 20 - 30% more than we expected. Overall, the projects are expected to save $667,000 a year from our $3 million utility bill.

What is the typical project size, typical contract tenure, and typical energy conservation measures employed?
We didn't choose buildings based on their size but rather the amount of energy they used. We have over 300 facilities and we choose the 66 buildings that used the most energy. The typical contract is 13-15 years. We wanted to make sure we were saving the most energy as possible. Energy conservation measures include everything from lighting to solar. We also put in sensors to control lighting and HVAC.

What, if any challenges, did you face in growing the program?
Financing was our toughest challenge - our goal was to go as deep as we could to get the energy savings we wanted. We were willing to go as long as 20 years but we found that financing was best at 13-15 years, so we had to cut out longer payback projects.

What, if any, new or revised procurement requirements needed to be in place to support the use of ESPCs?
The concept of a lease purchasing contract was new to us but the Colorado Energy Office had a template contract for their program that we used as a template. We were able to adjust it to fit our needs. The state also had 13 pre-selected ESCOs so we had a pool of qualified companies to choose from. If it were not for the fact that Colorado had already established an ESPC program, we might not have been able to complete this project.

If you were to "brag on" the program, what achievements and successes would you highlight?
We are very proud of all the renewable projects that we implanted - overall we had a 15 year payback but our solar projects had a 30 year payback. We were able to implement the solar projects by bundling them into the overall project. The renewable projects allow us to avoid future energy costs and help us reach our overall greenhouse emissions reduction goals.

What are the future objectives of the program-do they have an overall number of projects or level of investment that they are aiming to accomplish?
Our goal was to reduce our energy use by 20% so we met out immediate goal. Long term, we are looking at the city operations becoming carbon neutral. In order to do that, we need to go beyond buildings and look at other emissions emitters like wastewater and commuting.

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Industry News

Tax Reforms Could Save Energy, Create Jobs, And Pay For Themselves
Tax reform will provide Congress with many opportunities to promote energy efficiency and remove barriers through the tax code, according to Tax Reforms to Advance Energy Efficiency, a new report issued by the American Council for an Energy-Efficient Economy (ACEEE). The report looks at tax reforms that could be made in six major areas including promoting capital investment in manufacturing, encouraging advanced energy-saving technologies, and rationalizing depreciation schedules. The authors find that changes in these three areas would pay for themselves as the increased energy savings increase profits and tax receipts. They also find that the provisions to encourage advanced energy-saving technologies would increase employment by an average of 164,000 jobs over the 2014-2030 period. Other topics discussed in the report are reduction of subsidies for fossil fuels, emissions fees, and radical change to the business tax code in order to reduce marginal tax rates and remove some disincentives to energy efficiency. This report evolved from a series of several working papers that were published by ACEEE over the course of 2012. The authors invited stakeholders and tax policy experts to comment on the working papers, and this final report reflects many of the comments and critiques that the authors received.

To read the report, click here.

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Study Finds Urban Office Buildings Can Deliver Energy Efficiency Projects That Beat Energy Codes
Designing a building holistically, and making sure that its components and systems work together according to design intent, can pay big dividends in energy savings and occupant satisfaction, according to a study of The New York Times Building by the Lawrence Berkeley National Laboratory.

Located near Times Square in New York City, the 52-story building has 1.5 million square feet of commercial office space, and the Times Company has occupied floors 2 through 21 since the building's opening in 2007. A Berkeley Lab research team began working with the Times Company in 2003 to design, evaluate and specify an integrated solution with energy-efficient lighting and automated shading systems for the windows in a full-scale mockup at a nearby Times Company site in Queens. Measured results from the post-occupancy monitored evaluation in the final building five years after initial occupancy showed a 24% reduction in annual electricity use and 51% reduction in heating energy use, compared to expectations from a design that just met the prescriptive energy-efficiency code in effect at the time of construction (ASHRAE 90.1-2001), and a 25% reduction in peak electric demand. In addition, a significant fraction of occupants indicated a high level of satisfaction with the overall building and its design features. The Times Company's investment in advanced energy-efficiency technologies is estimated to yield a 12% rate of return on their initial investment.

According to the authors, this study demonstrates that office buildings in an urban environment can deliver measured energy performance substantially surpassing energy codes. The lesson for replicating the success of this building on a large scale is that the technologies and systems solutions are available, but that it is essential to pay attention to details from the initial stage of procurement of building equipment to verifying the proper performance of the equipment after it is installed, the study states.

Read more here.

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New Report Reveals How Next Generation Energy Efficiency Programs Can Help Utilities Achieve High Energy Savings
New technologies and innovative program designs are combining to create the next generation of energy efficiency programs that can meet the aggressive saving targets being set by many states, finds a new report, released by the American Council for an Energy-Efficient Economy. The report finds that these technologies and programs can offer the potential to achieve and sustain high savings—27% of forecasted electricity use and 19% of forecasted natural gas use by 2030.

Energy efficiency programs for utility customers have been in place for over three decades in many areas in the United States. These programs have experienced unprecedented growth over the past decade, in significant part because of policies that establish high, specific energy savings targets to be achieved through energy efficiency programs. Over the next two decades, achieving and sustaining high savings levels present challenges for energy efficiency programs. Increasingly stringent building codes and energy efficiency standards for appliances and other technologies are moving baseline energy efficiency performance higher. Achieving high participation rates has been difficult for certain types of programs. The technologies and programs profiled in this report offer an answer to these concerns.

While savings opportunities exist for all types of customers, the report finds some of the greatest potential exists for renovations and retrofits of homes and commercial buildings. Lighting also remains a large source of energy savings along with building mechanical systems and a variety of electronics. Reaching more customers is another direction for next generation programs. Improved understanding of more narrowly defined customer segments through better data analytics can enable program administrators to structure and focus incentives and marketing to increase participation. Programs are successfully serving customers in markets that historically have been difficult to reach, such as multifamily housing and manufactured homes. Another clear trend across program portfolios is an emphasis on better understanding customer behavior and motivations in order to design programs that engage greater numbers of customers to take actions that save energy.

The report examines a total of 22 different program types and concepts, from residential lighting to commercial buildings to industrial processes, and examines a wide range of energy efficiency technologies, including light-emitting diode lighting; high-efficiency heating, ventilation, and air-conditioning equipment; and combined heat and power systems. The research draws upon extensive interviews completed with a large number of experts on customer energy efficiency programs and technologies and includes numerous examples of where these leading principles and practices are being used or tested.

To read the report, Frontiers of Energy Efficiency: Next Generation Programs Reach for High Energy Savings, click here.

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New Study Finds United States Lags In Clean Energy
The U.S. competitive position in clean energy is lagging, a new report says. The report, "Innovate, Manufacture, Compete: A Clean Energy Action Plan," released by the Pew Charitable Trusts says that revenue in the clean energy sector worldwide could total $1.9 trillion from 2012 to 2018. The United States has the potential to secure 14.5 percent of that revenue, equal to $276 billion, over the next six years, Pew said. But because of uncertainty about government policies for the renewables market, the United States could fail to capitalize on that opportunity.

Pew said roundtable discussions with more than 100 U.S. industry leaders reveal that private investment, manufacturing, and deployment of renewable power have been hampered by the country's lack of a long-term, consistent energy policy. Pew recommends an increase in the clean energy tax credit, or Section 48C, to help support the nation's clean energy economy.

To tap into the expected global $6 trillion worth of clean energy investment in the next quarter century, Pew suggests that the U.S. could also focus on exporting technologies, including microgrid and renewable solutions for developing nations with incomplete electric grids. Among the G20 nations, the U.S. ranks eighth in investment intensity in energy research and development and 10th in the world in installed clean energy capacity growth rate since 2006, the report says.

According to the authors of the report, the nation's competitive position in clean energy is also constrained by tight credit markets, growing international competition and an uneven playing field in fossil energy resources. Still, cumulative clean energy installations for non-hydroelectric generation in the U.S. are expected to more than double, reaching 126 gigawatts by 2018, the report says.

Click here for a copy of the report.

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Member Projects

Ameresco Expands Partnership With Battle Ground School District In Washington State to Reduce Energy Costs And Support Efficiency Goals
Ameresco, Inc. announced that work has begun on a $3.9 million ESPC for the Battle Ground School District in Clark County, Washington. The cost of the project to the District will be reduced by a $1 million Energy Savings Grant from the Office of the Superintendent of Public Instruction and an estimated $322,000 in rebates from the Clark County Public Utility District. This group of energy efficiency infrastructure upgrades follows two energy conservation projects completed by Ameresco for the District in 2010 and 2011 that focused on major plumbing and lighting upgrades. Over the course of the contract, Ameresco will manage the design and installation of new mechanical systems, as well as upgrades and replacements to the District's energy management systems and other equipment. In addition to reducing utility costs, these improvements will reduce greenhouse gas emissions by decreasing carbon emissions by nearly 2 million pounds per year. The $1 million state energy efficiency grant that Ameresco helped secure for this project is one of more than 78 such grants valued at nearly $35 million that the state of Washington has awarded to projects developed by Ameresco since 2009.

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Ameresco And Fall River Housing Authority Execute Energy Performance Contract
Ameresco, Inc. announced the execution of an energy performance contract with the Fall River Housing Authority (FRHA) which will provide water and energy efficiency upgrades to more than 1,500 FRHA housing units. The $6.8 million scope of work includes water and lighting efficiency upgrades, upgraded apartment temperature controls, cogeneration, and mechanical system upgrades for space heat and domestic hot water. In addition, energy management systems will be installed to control and monitor the efficiency upgrades. Construction will begin in early 2013 and continue for about 15 months. The U.S. Department of Housing and Urban Development EPC program provides incentives to public housing authorities across the country to implement energy and water savings improvements to their housing units. Since inception of the program about 20 years ago, more than 240 public housing authorities nationwide have participated in the program, which has leveraged over $839 million in energy and water improvements.

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City of Solana Beach, CA Teams With Chevron Energy Solutions To Cut Utility Costs
The City of Solana Beach in California and Chevron Energy Solutions have joined to implement a ground-breaking energy program expected to improve the city's streetscape, boost efficiency in city facilities, and save the city more than $40,000 in its first year alone, all with minimal impact to the city's general fund. The $1.4 million project is expected to trim the city's annual energy consumption by more than 350,000 kilowatt-hours by upgrading more than 500 streetlights to highly efficient LED technology; adding a new "cool roof" and more efficient heating, ventilation and air conditioning to City Hall; and installing new efficient lighting fixtures at City Hall, the Fire Station and Marine Safety buildings. Solana Beach was one of first cities in San Diego County to pilot LED street lights, and is now the county's first city to complete a retrofit of all city-owned street lights to LED. These improvements are expected to reduce the city's annual energy consumption, improve lighting quality and aesthetics, reduce maintenance costs, and provide consistent indoor climate quality. Through this project, the city expects to cut its electrical utility usage for three buildings and city-owned streetlights by 41 percent in its first year, with the majority of savings from the LED streetlight retrofit alone. To replace the City Hall roof, which was past its current useful life, the city used total expected savings from the upgrades, a fiscally responsible approach.

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Chevron Energy Solutions Completes Solar Installation At Santa Cruz County, CA Office Of Education
Santa Cruz County, California's Office of Education and Chevron Energy Solutions announced completion of a solar installation and energy efficiency improvements expected to reduce both carbon emissions and energy costs, saving more than $2 million over the program's life. The project, located at the county Office of Education offices in Santa Cruz, is expected to offset carbon emissions by close to 150 metric tons in the first year alone, and reduce office energy use and purchases of utility-generated power by over 40 percent. Chevron Energy Solutions designed, engineered and installed the solar system and efficiency improvements, and will perform ongoing operation and maintenance services.

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Town of Munster, Indiana In Partnership With Energy Systems Group Generating Electricity From Local Centennial Park Landfill
Centennial Park is a closed landfill which has been transformed into a centerpiece for the town of Munster, Indiana's recreational and community activities, and now includes a 9-hole golf course, water features, amphitheater, a restaurant and banquet facility, walking trails, and public art. In partnership with Energy Systems Group and through funding made available by the U.S. Department of Energy, the Munster Redevelopment Commission approved development of this $4.3 million beneficial-use electric generation project in 2011. The town plans to sell the power it generates as a part of this project back to the Northern Indiana Public Service Company at their Renewable Feed-in Tariff rate for biomass projects. This project includes a GE Jenbacher engine/generator which utilizes the landfill gas from the municipally-owned Centennial Park Landfill site to produce approximately 1.1 MW of electricity. In addition to a new flare and blower, the project employs a heat conversion technology which will take excess heat off of a large generator at the site. This heat will then be transformed into additional electricity. By capturing these landfill gases, this sustainable project is helping provide environmental benefits equivalent to the removal of emissions from more than 1,100 cars per year or the planting of about 1,200 acres of forest annually.

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Maryland Clean Energy Center Launches Maryland Clean Energy Capital Financing Program: First Deal Provides $6M for Energy Efficiency Upgrades at Coppin State University Delivered by Energy Systems Group
The Maryland Clean Energy Center announced it has closed on the first of its Maryland Clean Energy Capital (MCAP) transactions benefitting the University System of Maryland, Coppin State University to finance six energy efficiency upgrades on campus. This first-ever use of the MCEC bond authority will provide largely tax-exempt debt financing to underwrite six energy conservation measures on campus. Through this new and unique MCEC financing vehicle, Energy Systems Group will install, operate and maintain lighting, electrical, mechanical, and water system upgrades, as well as HVAC control and building envelope improvements to reduce energy consumption within the Coppin State University campus.

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NextEra Energy Solutions Launches $7.5 million Renovation Project In Mt. Pleasant, Texas Independent School District
The Mt. Pleasant Independent School District in Texas partnered with NextEra Energy Solutions to upgrade lighting, replace aging HVAC equipment, lower operating and maintenance costs, and deliver a significantly improved educational environment for Mt. Pleasant students and staff. The $7.5 million project, which will benefit almost all of the district's buildings, produces a positive cash flow in each of the 15 years of the contract term. The district will see more than $500,000 per year in savings, thus exceeding the total cost of the project. Construction began in April 2012 and is scheduled to be completed by the summer of 2013. Like many school districts throughout the country, the Mt. Pleasant ISD had an aging infrastructure, limited capital budgets, and expanding educational needs. Working closely with the district, NextEra Energy Solutions created a multi-phase plan under which renovations would be done using a performance contracting agreement. Additional savings will come in the form of rebates from the local utility and by taking advantage of a Department of Education loan program. NextEra helped the school district apply for utility rebates as well as a funding mechanism known as Qualified Zone Academy Bonds (QZAB).

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Siemens To Help Sky Lakes Medical Center in Oregon Achieve Nearly $3 million In Energy Savings
Sky Lakes Medical Center in Klamath Falls, Oregon, has teamed with Siemens Building Technologies to implement energy efficiency measures that will reduce the hospital's operating and energy costs by at least 19 percent. The savings—guaranteed by Siemens—will total nearly $2.7 million over the term of the agreement. Siemens also secured $1.1 million in incentives and tax credit contributions for Sky Lakes Medical. The energy savings are the equivalent of removing 17,600 cars off the road annually. Local and regional subcontractors are being employed and the project is expected to be completed in May 2013.

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Kentucky's Morehead State Set to Realize $9.3 Million In Energy Savings With ESPC From Siemens
Siemens Industry, Inc. Building Technologies division announced that Morehead State University in Kentucky will save over $775,000 annually in utility costs through an Energy Savings Performance Contract. This will accrue over $9.3 million in aggregate utility savings over the term of the 12-year agreement. Siemens worked with the university to complete a detailed facility infrastructure assessment and energy audit. The university opted to construct a new natural gas-fired plant that would be more cost effective - and compliant- over time than the existing coal plant. In total, the project will affect 30 campus buildings and consist of a new, 4,000-square foot natural gas-fired boiler plant to replace the university's outdated coal-fired boiler plant, housing two new 900 horsepower steam boilers as well as facility upgrades for many of the campus buildings' HVAC and electrical systems. Siemens will replace older fan motors and belts, and install variable speed drives and, where necessary, dampers, valves and cooling coils. Digital Energy Monitors on most campus buildings will be used to track electricity consumption on a per-building basis and there will be digital control upgrades that can be networked over the university's existing IT infrastructure as well as the installation of lighting controls and occupancy sensors. In addition to lowering ongoing operating costs, the university will curb its CO2 emissions by over 8,381 tons per year, which is equivalent to planting 75.3 acres of trees or taking 1,491 cars off the road annually. The university also will avoid costs of over $4 million during the program primarily from reduced plant operations.

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Tyler County, West Virginia Board Of Education Saves More than $2 Million Through ESPC With Siemens
Siemens Industry, Inc. announced that through an ESPC, the Tyler County Board of Education in West Virginia has realized enough energy savings to reduce equivalent energy and operational costs by $2,115,132. This effort, first implemented in 2002, was among the first of its kind in the region. The facility improvement measures included a comprehensive energy savings retrofit to 294,000 square feet of space that included Tyler Consolidated High School/Middle School, Arthur I. Boreman Elementary School and Sistersville Elementary School. Upgrades consisted of the following measures: comprehensive building management system to manage all major HVAC equipment on campus; lighting upgrades, lighting controls and occupancy sensors to ensure that light levels are efficient and conducive to the learning environment for the students and faculty; premium efficiency motors and variable frequency drives added to major energy consuming HVAC equipment to control fan and motor speeds and ensure proper and efficient control to conserve energy and extend the life cycle of building critical equipment; and the use of low flow devices to reduce water usage while mitigating the impact of the rising rates for sewage and water. The more than $2 million savings represents over a 12% reduction in baseline electric usage, a 38% reduction in baseline gas usage, and a 38% reduction in baseline water usage over a ten-year period. From an environmental standpoint, the Tyler County Board of Education has dramatically reduced their carbon footprint through this project with a reduction of 28% in carbon dioxide emissions, which is equivalent to approximately 3,530 cars removed from the road or 98 acres of trees, preserved from deforestation each year.

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Trane Installs Upgrades At Old Colony Regional Vocational Technical High School In Massachusetts Cutting Energy Consumption By More Than 50 Percent
Trane recently installed energy efficient infrastructure upgrades at Old Colony Regional Vocational Technical High School which have reduced energy consumption by more than 50 percent while improving the learning and teaching environment. An ongoing service and maintenance program helps ensure that all systems continue to run at optimum levels. Infrastructure improvements, completed in 2011, were needed to improve the academic environment, increase energy and operational efficiency and sustainability, and reduce energy costs. Funding was provided through a tax exempt municipal lease under a performance contract enabled in Massachusetts through M.G.L. CH25A,11I which allowed the school to use future energy and operational savings to finance infrastructure improvements up front.

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Member News

Climatec Expands Operations into Texas with Acquisition of Cohesive Automation, Inc.
Climatec Building Technologies Group, a leading provider of complete building automation and energy management services, is pleased to announce its expansion into Texas with the acquisition of Cohesive Automation, an independent building automation and controls contractor with offices in Dallas and Austin, Texas. Terms of the deal were not disclosed. Founded in 2000, Cohesive designs, installs and services building automation systems for schools, colleges and universities, government and commercial offices, data centers, and healthcare facilities throughout the greater Dallas-Fort Worth and Austin metropolitan areas as well as customers across east and west Texas and western Oklahoma. Its founders, Chris Hill, Rob Hudson and Mark Sullivan will continue to serve in their current roles within the newly acquired Climatec business unit.

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Peter Keating Joins ConEdison Solutions As Federal Programs Manager In Washington, DC
ConEdison Solutions has named Peter Keating to the position of Federal Programs Manager. He will manage ConEdison Solutions relationships in Washington, D.C. as a member of the company's Falls Church, Virginia office. Mr. Keating will leverage his knowledge of federal processes and his extensive network of contacts in the federal space in support of ConEdison Solutions' substantial energy services portfolio. He will focus on program coordination and sales support for the company's energy services sales team for both governmental and commercial clients. Before joining ConEdison Solutions, Mr. Keating worked for PS&S Global, where he managed programs that leveraged the economic and technical benefits of Energy Savings Performance Contracts and Power Purchase Agreements.

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Energy Systems Group Participates in First "Advanced Energy Day at the Legislature" Hosted By Arkansas Advanced Energy Association
Energy Systems Group participated in Arkansas Advanced Energy Association's first "Advanced Energy Day at the Legislature," featuring nearly 20 exhibitors in the Capitol Rotunda and a panel of advanced energy industry leaders who addressed questions from legislators and the public. The day's activities showcased the strength of the state's advanced energy economy and its ability to provide Arkansans with more energy choices. A recent employment study released by AAEA showed more than 11,300 Arkansans employed by about 90 advanced energy companies across the state. ESG has developed several energy efficiency projects throughout Arkansas which have helped schools, colleges, and cities modernize their infrastructure, reduce energy and operational costs, and conserve resources.

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Revolutionary Philips DimTone BR30 LED Lamp Creates The Right Atmosphere By Imitating the Warm Dimming Effect of Incandescents
Building off of the company's innovative new line of Airflux products, which eliminate the distracting heat sinks of LED lamps, Philips adds a unique dimming technology to their BR30 LED. Unlike other BR30 LED lamps on the market, which dim at the same color temperature, the new Philips DimTone BR30 LED Lamp transitions from 2700K to 2200K while dimming, mimicking the warm tones of incandescent light sources, and is dimmable to 10% of full light levels. The BR30 is one of the most popular lamps in the hospitality industry, commonly used in recessed lighting and track lighting. Switching to the Philips Dimtone BR30 will allow owner/operators to reduce lighting energy use by up to 80%, while maintain the atmosphere their customers prefer. The new lamp works with most commonly used dimmers and can last up to 20 times longer than traditional light sources, helping to reduce maintenance costs and disruptions for guests. Additionally the new BR30 Airflux family has an improved optical design to diffuse the light without the LED "dots" that can be visually distracting. Combined, these features allow Philips Dimtone BR30 customers to achieve the right look and feel for their environment.

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