How would you spend $50 billion, Part 2 — The Alliance to Save Energy Plan

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"How would you spend $50 billion, Part 2 — The Alliance to Save Energy Plan"

Part 1 reported that Obama and the Dems are planning a huge stimulus package with a big cleantech component and asked for ideas. Brian Castelli, Executive Vice President of the DC-based Alliance to Save Energy sent me their recommendations.

Brian has been a cleantech leader for over three decades. I got to know him at the DOE where he served as Chief of Staff to the assistant Secretary for energy efficiency and renewable energy, during which time we perfected our “bad cop – worse cop” routine. He has an MBA, served as a state energy director and has lots of other creds the world might know about if the link on ASE’s website to his bio wasn’t broken.

Here are the Alliance’s proposals:

Energy efficiency in state and local facilities
Appropriate $4 billion to DOE for grants for energy efficiency projects in state and local facilities including schools. The funding would pass through the State Energy Program using the existing distribution formula. Studies indicate that the potential for energy efficiency investments in the public sector is between $35 and $70 billion, and that less than 25 percent of all state buildings have had comprehensive energy-efficiency retrofits, which suggests that the potential for job creation and energy savings is quite large. Half should be distributed to states within 3 months of enactment based on the usual distribution formula; the remaining funds shall be available for 2 years after enactment and their allocation may consider evaluation of the initial funds The Program may retain 4 percent of the funds for administrative costs.
Outcomes:
1. 24,000 job years (based on commercial building energy efficiency labor intensity estimate of 5.9 jobs per $1 million invested) on same timetable.
2. Energy savings will help strapped state and local governments, and result in air quality and other benefits. Energy savings could reach 36 trillion Btus (based on estimate of 9 billion Btu savings per $1 million invested).
Green jobs workforce training
Appropriate $250 million over two years to the Department of Labor for workforce training programs under the Green Jobs Act that was in EISA. The programs could be used to train displaced and unemployed workers (especially in the construction industry) to retrofit homes. These workers might be used to retrofit foreclosed homes owned by the federal government. Appropriate an additional $250 million over two years to DOE and EPA for programs that include training for industrial and building energy audits and building efficiency.
$100,000,000 would go to the Energy Star program at the Environmental Protection Agency to remain available for 2 years after enactment, including for training for the Home Performance with Energy Star and Energy Star New Homes programs. $100,000,000 to the Building Energy Codes program at the Department of Energy to remain available for 2 years after enactment. $50,000,000 for the Industrial Assessment Center program at the Department of Energy to remain available for 2 years after enactment.
Weatherization of low-income homes
Appropriate $1.4 billion over two years to expand the national Weatherization Assistance Program (WAP). The funding will be used to expand infrastructure that is already in place to lower energy costs and thereby increase the purchasing power of low income consumers.

Outcomes:
1. 11,500 job years (based on residential building energy efficiency labor intensity estimate of 8.1 jobs per $1 million invested) on same timetable.
2. Energy savings will directly benefit low-income homeowners, and will help them keep their homes.
Energy efficiency improvements in federal buildings
Appropriate $1.2 billion to DOE to fund audits, metering and energy efficiency improvements in federal buildings. The Department of Energy would retain 2 percent of the funds as a tariff to improve staffing and fund the administration of the program. The funds should be available to agencies on a first-come, first-served basis, and should be available for 24 months after the effective date of the stimulus bill.
Outcomes:
1. 7,000 job years (based on commercial building energy efficiency labor intensity estimate of 5.9 jobs per $1 million invested) on same timetable.
2. Energy savings will help federal agencies and result in air quality and other benefits. Energy savings could reach 11 trillion Btus (based on estimate of 9 billion Btu savings per $1 million invested).
National consumer efficiency education campaign
Appropriate $90 million for the Public Information Initiative authorized in EPAct 05 for a two-year education campaign to help consumers to lower their energy bills. The campaign, which would be administered by the Department of Energy, would target the general American public, from students to seniors. It would encourage energy efficiency and conservation actions that can deliver work to home contractors, retailers, and manufacturers of efficient appliances and vehicles.
No-Cost (or Very Low Cost) Recommendations
Clear backlog of federal facility retrofit projects
The new Administration should take immediate administrative steps to direct DOE to clear the energy efficiency upgrade project “backlog” of $1.3 billion in major energy efficiency projects in federal facilities. In addition, Congress should consider providing a 25 percent match in Treasury funds if projects are implemented within 24 months of the effective date of the stimulus bill. In 2006, FEMP implemented more than $400 million in projects in a concerted six-to-nine-month “blitz,” so there is a precedent for concerted action to clear the pipeline, and a history of positive results.

Outcomes:
1. 7,500 job years (based on commercial building energy efficiency labor intensity estimate of 5.9 jobs per $1 million invested) on same timetable.
2. Energy savings will help federal agencies and result in air quality and other benefits. Paybacks likely to average around 15 years, but no direct cost to the federal government as these projects would be funded through Energy Savings Performance Contracts.
Make energy tax credits refundable
Make the appliances energy efficiency tax credit refundable for twelve months; this will require a minor legislative change and will drive investment, employment and manufacture of appliances at the highest efficiency levels by providing cash-strapped manufacturers with funds to invest in improved efficiency. The score should be minimal as it mostly enables this year tax credits that were already scored when extended (most of the credit is capped for each manufacturer).
Outcomes:
1. Thousands of jobs would be saved and created (based on manufacturer plans).
2. Would benefit consumers by increasing production and decreasing cost of very high efficiency refrigerators, dishwashers, and clothes washers.

Serious, practical stuff.

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7 Responses to How would you spend $50 billion, Part 2 — The Alliance to Save Energy Plan

  1. paulm says:

    Flying pigs and carbon tax….surely this couldn’t fly. Why are they picking on farmers….

    Flatulence tax could bankrupt farmers
    http://www.independent.co.uk/news/world/americas/flatulence-tax-could-bankrupt-farmers-1053519.html

    Belching cows and pigs could start costing farmers money if a proposal to charge fees for air-polluting animals becomes law…..annual fee of about $175 for each dairy cow….

  2. Brendan says:

    I realize that this is a stimulus package, but shouldn’t we be trying to create sustainable jobs? I know there are a lot of houses that need reweathering, and thus training someone to do so will give him/her new skills for a job for a few years, but what after that? Is the thought that weatherizing underprivileged homes create a demand to do so for affluent homes?

    Just like we want to spend the money in a way that will lead to long term progress in what is built, we also want to spend the money in a way that will create a long term source of jobs.

  3. Eddie says:

    The path of least resistance for the new administration and Congress will be to give most of any stimulus package to the largest corporations which have been writing and lobbying feverously since the talk of energy and economic stimulus were first discussed.

    In the electric generation industry given current lobby efforts we would expect to see a push for major grid expansion investments, smart grid/smart meter replacement programs and investment in what is called “clean coal”. Supporting this strategy would be a major policy blunder in my opinion.

    The subject of investment in grid expansion raises a lot of interesting issues. Is the current grid full or can it handle significant new generation dispersed on local distribution lines? A Minnesota transmission study shows a lot of available transmission on the distribution grid. And, I’m afraid the any new wire will be used for coal and not wind….oh yes…eminent domain issues will increase as well. Smart grid/smart meter makes we wonder what they mean by “smart”. When you look at the definitions that utilities like to use for smart grid they usually mean smart meters. A smart meter will just tell you when you’re using electricity so you can run your cloths dryer at night and save you money… and not save you or us any kWh’s. What it will do is to give the utility a way to charge you more during times of high demand and less during low. The only bad thing I see here is that if we shift to the time of low cost…we will also likely be switching to the coal option…at least in the central US. And money into “clean coal”? Well, I’ll only say…I remember the “coal slurry” projects and their incredible costs.

    There are excellent ideas already expressed in previous letters. Placing an order with the Big Three for plug-in-hybrids makes a lot of sense. The open source battery concept is brilliant. Weatherization with its multitude of benefits should be one major component of any energy stimulus package and On-Bill-Financing seems to be a reasonable method of billing.
    But one strategy does not require a lot of money. It is a policy change the can be a game changer.
    The concept, “feed-in-tariffs” are catching on world wind. They are responsible for Germany leading the world in renewable energy, Denmark has an aggressive policy and just last week Great Britain decided to follow the lead. Congressman Jay Inslee of Washington is the current concept leader in D.C. This is not the place for a complete description of the concept but if you’re interested in a game changing concept take a look at http://www.wind-works.org/index.html

  4. mauri pelto says:

    Eddie: I looked at the above link and am clear on the difference of FIT-ART, but not their difference to our PURPA as currently applied. The Alliance to Save Energy proposals fit well with their mission to-reduce energy usage. So though I love alternative energy development proposals they are not the organization to formulate these.

  5. Sally says:

    Brendan,

    I think you’re absolutely right that the stimulus package should strive to create longterm jobs, not temporary ones. But increasing funding to the the Weatherization Asistance Program is one of the best ways to create longterm jobs. There are currently more than 15 million households in the United States that qualify for WAP. In the past 30 years about 6 million homes were weatherized through WAP. At this rate, it would take about 75 years to finish the job (assuming no growth in the number of low-income households over this time). President-elect Obama would like to ramp up to eventually weatherizing 1 million homes a year through WAP. Even at this extremely ambitious rate it would take more than 15 years to weatherize all the homes that currently qualify. Then take into account that many energy efficient home improvements, like normal home improvements, degrade over time, meaning the households weatherized in the early years will be ripe for re-weatherization by the time the last ones are patched up. All of these factors mean that WAP jobs (which include energy auditors and program administrators as well as contractors) are long-lasting and potentially perpetual, making increased funding for WAP an ideal use of stimulus money.

  6. Lucio says:

    The plan should support local sources of renewable energy as a first stage program: wood in the NE, solar in South, etc. Then the plan should go nationally when it would incentive the technologies transfer trades as 2nd phase program. Service support programs are also important but should be linked with technology development plus commercialization because should not invest only in R&D as today. The last important point is about regulation. Old associations and their rules must be changed and adapted to a new era of technology transfer mainly from Europe but also from Asia and Latin America.