U.S. States & Regions

States and regions across the country are adopting climate policies, including the development of regional greenhouse gas reduction markets, the creation of state and local climate action and adaptation plans, and increasing renewable energy generation. Read More
 

Proud of what we've done, but there's still more to accomplish

When I founded a new nonprofit organization 15 years ago, the United States and the world urgently needed practical solutions to our energy and climate challenges. That need has only grown more urgent.

Earlier today, I announced my plans to step aside as the President of the Center for Climate and Energy Solutions (C2ES) once my successor is on board. As I look back, I find we have come a long way. That said, any honest assessment of our progress to date in addressing one of this century’s paramount challenges must conclude that we have much, much further to go.

When our organization, then named the Pew Center for Global Climate Change, first launched in 1998, 63 percent of the world’s electricity generation came from fossil fuels. Incredibly, that number is even higher today – 67 percent. The concentration of carbon dioxide in the atmosphere, the main driver of climate change, is also higher than it was then – in fact, at its highest level in more than 2 million years.

Scientists around the globe have just reaffirmed with greater certainty than ever that human activity is warming the planet and threatening to irreversibly alter our climate. Climate change is no longer a future possibility. It is a here-and-now reality. It’s leading to more frequent and intense heat waves, higher sea levels, and more severe droughts, wildfires, and downpours.

We at C2ES have believed from the start that the most effective, efficient way to reduce greenhouse gas emissions and spur the innovation needed to achieve a low-carbon economy is to put a price on carbon. It’s a path that a growing number of countries, states, and even cities are taking.

State Policy Actions to Overcome Barriers to Carbon Capture and Sequestration and Enhanced Oil Recovery

State Policy Actions to Overcome Barriers to Carbon Capture and Sequestration and Enhanced Oil Recovery

September 2013

by Patrick Falwell

Download the full report (PDF)

The development of Carbon Capture and Sequestration (CCS) and Enhanced Oil Recovery with Carbon Dioxide (CO2-EOR) projects faces a wide range of barriers, but state-level policy can help overcome many of these challenges. In addition to establishing a regulatory framework for CCS and CO2-EOR projects, states can provide incentives, financial or nonfinancial, to promote the development of CCS and CO2-EOR. So far, states have adopted a diversity of policies that meet local expectations and needs. Additional state policies have been proposed, but not yet adopted.
 
This paper, developed through the Sequestration Working Group of North America 2050, lists the key regulatory and economic barriers CCS and CO2-EOR projects must overcome, and lists examples of existing or proposed state-level policies to help in addressing each.
 

 

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Key Considerations for Industrial Benchmarking in Theory and Practice

Key Considerations for Industrial Benchmarking in Theory and Practice

September 2013

by Kyle Aarons

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The industrial sector is responsible for 20 percent of the nation's energy consumption and greenhouse gas emissions. Benchmarking is used in a variety of applications to improve the efficiency of industrial facilities and therefore bring emissions down. In this context, benchmarking refers to developing and using metrics to compare the energy or emissions intensity of industrial facilities. Benchmarks are primarily used to compare facilities within the same sector, but can also be used to identify best practices across sectors where common process units, such as boilers, are used. Policymakers can use benchmarking for a variety of purposes, including setting emissions standards, recognizing leading facilities, promoting information sharing, or allocating emission credits in a cap-and-trade program.

This paper, developed through the Industry Working Group of North America 2050, is intended to encourage consistency in benchmarking methodology across programs within a single jurisdiction, as well as across jurisdictions. When facilities are benchmarked using a consistent methodology, it is possible to identify best practices as well as opportunities for improvement across sectors and jurisdictions. For example, two paper mills in neighboring states will only be able to compare their performance if both states use the same data collection methods and metrics. To encourage such consistency, this paper defines and explains key issues that arise when policymakers establish a benchmarking program. It also includes guiding principles recommended by the Working Group based on a review of benchmarking literature and successful programs.

 

 

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On-Bill Financing: Encouraging Energy Efficiency

On-Bill Financing: Encouraging Energy Efficiency

August 2013

by Sylvia Zhang

Download the full report (PDF)

Buildings account for 41 percent of the United States’ primary energy consumption. One generally cost-effective way to decrease buildings’ energy consumption is by improving building efficiency. However, the high up-front cost of efficiency improvements is often a barrier. To address this challenge, many states and utilities are exploring innovative financing mechanisms to make efficiency measures more financially feasible. On-bill financing is one such measure that has recently been gaining popularity. 

On-bill financing (OBF) refers to a type of loan that can be used to invest in improving the energy efficiency of a building. The loan is paid back over time through additional charges on the building’s utility bill. This mechanism encourages building occupants and owners to invest in energy efficiency measures, which can decrease energy consumption and utility bills.

This brief explains the basics of OBF, describes its distribution across the United States, and provides a number of examples of programs in place.

 

 

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Building Sector



On-bill financing (OBF) refers to a type of loan that can be used to invest in improving the energy efficiency of a building. The loan is paid back over time through an additional charge on the building’s utility bill. This mechanism encourages building occupants and owners to invest in energy efficiency measures, which can decrease energy consumption and utility bills.

Installing energy efficient measures often comes with a high upfront cost that many people, businesses, and institutions cannot afford. OBF programs can mitigate this problem because the administering utility or a third party covers the upfront cost of the energy efficient installations, which the participating utility ratepayer then repays through an additional charge on their utility bill. Since the ratepayer will be using less energy, and therefore paying less for energy, after the installation, there should be little or no net increase in the monthly bill.

On-bill financing programs vary by state and by provider, and each program has its own terms and process. Programs may be available to residential, commercial, industrial, and/or institutional customers depending on the state and utility policies. In those states with legislation that requires utilities to offer OBF, generally it is only obligatory for investor-owned utilities (IOUs). Administration of OBF programs also varies; programs may be administered by the utility itself, a nonprofit organization, or a government entity. Some OBF programs feature a discounted or zero interest rate. Generally, non-repayment of the loan will lead to a shutoff in utility service, which deters defaults and makes OBF more attractive for the loan provider. Initial investment funds for energy efficient installations can come from utility ratepayers, government grants, or other funding sources. To date, much of the funding for OBF has come from funds directed by the American Recovery and Reinvestment Act of 2009 (ARRA).

Most participants in OBF begin the program with an audit of the building to determine if energy efficient upgrades would be cost-effective. Some programs require all upgrades to be “bill-neutral.” Bill-neutrality occurs when the savings accrued by the decreased energy use will be equal to or greater than the monthly repayment amount. Unless specifically noted, the programs described in the map are not required to be bill-neutral.

On-bill financing programs may also have the characteristic of being “tied to the meter,” meaning that responsibility of repayment lies with the current resident of the building, rather than forever with the resident who instigated the financing. This allows for flexibility for residents who wish to move or sell their home. Unless specifically noted, the programs described in the map are not tied to the meter.

The states are organized into the following policy categories:

1.    State-Required On-Bill Financing: These states have passed laws or public utilities commission orders that require utilities statewide (usually only large or investor-owned utilities) to provide an OBF program. Program specifications, such as loan terms, program size, and customer eligibility vary from state to state. 

2.    State-Supported On-Bill Financing: These states have passed laws or public utilities commission orders that authorize and/or support the implementation of OBF state-wide, but do not require any utilities to offer OBF programs. These include policies that remove legal barriers to offering OBF or establishing funds for OBF programs.

3.    Preliminary On-Bill Financing Policy: These states’ public utilities commissions have ordered the establishment of pilot OBF programs or commissioned research or working groups to analyze the feasibility of OBF programs.

4.    On-Bill Financing Offered by Individual Utilities: Utilities in some states have voluntarily created OBF programs without direction from local or state government. In some states, utilities can earn money from reducing overall demand.  Energy efficiency can also be a way to reduce peak loads and thus generation costs.

To learn more about On-Bill Financing programs, please see the C2ES On-Bill Financing Brief.

Additional information:
ACEEE: On-Bill Financing for Energy Efficiency Improvements
NRDC: On-Bill Financing Overview and Key Considerations for Program Design
C2ES Climate TechBook: Building Envelope

Texas Encourages Combined Heat and Power

Promoted in Energy Efficiency section: 
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On June 14, 2013, Texas Governor Rick Perry signed into law two bills that should increase the use of combined heat and power (CHP) in the state. Although natural gas production has been on the rise in Texas, the use of CHP has stagnated due to a difficult financing environment and regulatory barriers, and these laws may help remove some of those barriers.

HB 2049 clarifies language in the Texas Utility Code to allow CHP facilities to sell electricity and heat to multiple customers near the CHP facility to maximize efficiency and minimize financial risk. HB 1864 clarifies how to conduct CHP feasibility studies for government facilities that seek to use CHP for disaster preparedness.

Increased use of CHP has a number of positive effects. It is much more efficient than producing heat and power separately.  It will replace coal usage in the state with natural gas and therefore decrease greenhouse gas emissions. In addition, because CHP is a decentralized method of energy generation, increased usage of CHP would decrease losses that generally occur while moving power from central power plants to customers. CHP is also less vulnerable to broader grid disruptions.  Lastly, unlike typical power plants, CHP uses essentially no water, a welcome benefit in drought-ridden Texas.

 

For more information:
Texas CHP Initiative – Press Release
Energy Business Review – Story

Maine Overrides Governor Veto and Passes Omnibus Energy Bill

Promoted in Energy Efficiency section: 
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Maine’s Omnibus Energy Bill (HP 1128 or LD 1559) became law on June 27, 2013 after the state Senate unanimously overrode Governor LePage’s veto. The House overrode the governor’s veto with a 121-11 margin. The law, which focuses on reducing energy costs to Maine residents, increasing energy efficiency, improving electric system reliability, and protecting the environment, had strong bipartisan support.
 
The law will expand natural gas infrastructure in the state. In addition, the law will increase spending on energy efficiency programs, including home weatherization programs, to bring it in line with other states participating in the Regional Greenhouse Gas Initiative (RGGI). The law also includes a provision to adopt the RGGI Model Rule. Maine and New Hampshire are the only states in RGGI that require legislative action to adopt the model rule. The New Hampshire legislature has already sent a bill to do this, HB 306, to Governor Hassan’s desk, and she is expected to sign it soon.
 
Governor LePage supported some aspects of the bill, but vetoed it for a couple of specific reasons. He wanted the bill to support an offshore wind project proposed by the University of Maine rather than one developed by a Norwegian energy company. In addition, the Governor wanted a version that would alter the state’s Renewable Portfolio Standard (RPS) to allow non-wind projects larger than 100 megawatts in capacity to qualify.
 

For more information:

Kennebec Journal – Story
Bangor Daily News – Story 

 

Obama will need to act on his climate plan with a sense of urgency

In his State of the Union address, President Obama promised stronger action on climate change.  Today he followed up with a credible and comprehensive plan.  The real issue now is how vigorously he follows through.

From a policy perspective, the president’s plan lacks the sweep, cohesion and ambition that might be possible through new legislation.  With Congress unwilling to act, the president instead is offering an amalgam of actions across the federal government, relying on executive powers alone.

Taken together, the actions represent the broadest climate strategy put forward by any U.S. president, addressing the need to both cut carbon emissions and strengthen climate resilience.  While many of the specific items are relatively small-bore, and quite a few are actions already underway, the plan also includes new initiatives that can significantly advance the U.S. climate effort.

New York takes leadership role in climate resilience

Mayor Michael Bloomberg’s $20 billion plan to safeguard New York City against a future Hurricane Sandy and other climate risks is the most ambitious effort yet by any U.S. city to prepare for the expected impacts of climate change.

The mayor last week announced “A Stronger, More Resilient New York,” a comprehensive plan to protect communities and critical infrastructure, and proposed significant changes to New York’s building codes for new construction and major renovations that will help buildings withstand severe weather and flooding. Its 250 recommendations include building new infrastructure (like installing armor stone shoreline protection in Coney Island), changing how services are  provided (like encouraging redundant internet infrastructure), and establishing standardized citywide communication protocols for use during disruptions.

Nebraska to support wind farm development with tax incentives

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On June 4, 2013, Nebraska Governor Dave Heineman signed into law a bill that supports wind farm development with tax incentives. LB 104 provides a sales tax exemption for the purchase of turbines, towers, and other wind farm components. These tax incentives for wind development will allow wind projects to stay competitive with other methods of electricity generation in Nebraska and are expected to increase wind generating capacity in the state.

The American Wind Energy Association ranks Nebraska as having the fourth best wind resources in the nation, but the state lags in wind energy development. It ranks 26th out of the 39 states that generate electricity from wind energy. Nebraska currently has 459 MW of wind power capacity, while its neighbors Iowa, Kansas, and Oklahoma have 5133 MW, 2713 MW, and 3134 MW of capacity, respectively. Iowa, Kansas, and Oklahoma already have tax incentive provisions similar to those of LB 104.

At the time of the bill passage, Nebraska does not have a Renewable or Alternative Energy Portfolio Standard, but the Renewable Energy Credits (RECs) that are generated from Nebraskan wind farms have value in other states and can be traded through REC tracking systems.

 

For more information:

C2ES Climate TechBook: Wind Power

JournalStar: Heineman signs bill to offer wind energy tax incentives

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