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National Association of Energy Service Companies

Policy Priorities

State Advocacy Updates

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 formulating their ARRA implementation plans, a number of states are proceeding with instituting or expanding ratepayer-funded EE programs. Highlights are summarized below.


The CPUC proceeding to approve the 2009 program portfolio, which will approximately double the size of utility EE programs, is about one year behind schedule. NAESCO and a number of other parties have recommended that the CPUC view 2009 as a bridge year, and use the time to resolve outstanding issues in program savings goals, program EM&V and utility incentives. NAESCO is also urging that during 2009 successful programs be fully funded at the level of their maximum production during the 2006-2008 program cycle. If the CPUC accepts this recommendation, the new program portfolios will be implemented in 2010.


The state is doubling its energy efficiency programs, pursuant to the 2008 Green Communities Act. Utilities filed implementation plans in mid-May. NAESCO is participating in the state 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 are 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.


The utilities will begin large EE programs with aggressive savings goals in early 2010. Initial program plans from the eight electric IOUs are due by the end of June. The balance of the year will be spent in a public review and approval process. NAESCO has retained a consultant to monitor the proceedings and is attending meetings and submitting comments as appropriate.

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. The rejection was advocated by NAESCO and a coalition of energy and environmental groups because they believe that the Save-a-watt proposal was not sustainable. The commissions ordered the utilities to accumulate their program costs (very modest by California or Northeast standards) in deferral accounts pending future proceedings on appropriate cost recovery and compensation mechanisms. NAESCO continues to work with the state coalitions to ensure that the new programs include significant opportunities for ESCOs.


In April, the Georgia legislature rejected a bill that would have made ESPC projects in state facilities somewhat easier to implement. ESPCs in Georgia are hampered by a constitutional prohibition against the state taking on debt. NAESCO is continuing to work with Georgia state officials on reviving the ESPC legislation or developing approaches that might allow some state ESPC projects to proceed. The state has proposed that the majority of its SEP funds (about $65 million) be used in State building EE projects.


NAESCO continues to monitor the proceedings to update utility energy conservation goals based on current cost-effectiveness standards. Utility submittals are due on June 1. The comment and hearing process will last through the summer, with a decision expected in late October. NAESCO will work with a coalition of state energy and environmental groups on comments and participation in the hearings.


The expanded Illinois utility EE programs will start 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.


The electric utilities have filed new energy efficiency program plans. NAESCO is monitoring the development of those plans, and is holding a series of meetings with officials of the state Department of Energy, Labor and Economic Growth (DELEG) about making ESPC a major part of the state's ARRA implementation. Michigan is particularly interested in the potential of ESPC to leverage the impact of federal ARRA funding with private ESPC funds and Don Gilligan has been invited to several meetings in Lansing to discuss ESPC as a delivery channel of stimulus monies.