Clean Energy & Climate Changes Initiatives in Pennsylvania

1. Clean Energy & Climate Changes Initiatives in Pennsylvania Christina Simeone Director, PennFuture Energy Center September 4, 2013

2. About Us • PennFuture – non-profit environmental advocacy organization working on air, land, water and energy issues impacting Pennsylvania (and beyond). • Pillars of PennFuture: • Legal • Legislative/Policy • Grassroots • Energy Center: • “Champion Pennsylvania’s transition to a clean energy economy”

3. Overview of Presentation • The Pennsylvania Story • What PennFuture is Doing Now on Clean Energy • Plans for 2014

4. The PA Story: The Good Years • Rendell Administration • Act 129 (2008) • Alternative Energy Investment Act (2008) • PA Climate Change Act (2008) • Biofuels Mandate and In-State Production Act (2008) • Clean Vehicles Law (2006) • Growing Greener II (2005) • Alternative Energy Portfolio Standard (2004)

5. The Current Administration • Dismantled the PA DEP Energy Office. • Ended the Energy Management Office at PA DGS that facilitated performance contracts. • Ended PA government’s purchase of renewable energy. • Opposed efforts to increase PA’s solar requirements. • Denying the existence of human induced climate change • ETC…

6. What Next? • 2014 Governor’s Election? New Leadership on Clean Energy? • Prepare for and leverage market opportunities. • Defend against efforts to undermine existing initiatives. • Work to strengthen existing policy and set the stage for new policy development. • Organize, coordinate and publicize.

7. East Coast Clean Energy Hub • Pennsylvania is geographically desirable • Concentration of Clean Energy Activity • Renewables, efficiency, alternative transportation fuels • Leveraging Market Opportunities • Driven in part by existing policies with accelerating compliance schedules • Regional energy resources • solar, wind, shale gas, biomass, coal, alt fuels…

8. Biomass Resources of the U.S. by County (NREL, Sept 2009) Biodiesel Production Plants (National Biodiesel Board, NBB Member Plants) Electric Vehicle Charging Stations (U.S. DOE Alt. Fuels Data Center) U.S. Shale Gas Plays (U.S. DOE EIA)

9. Renewables(PA AEPS 18% by 2021) • SREC Market tanked • 2013 SRECs $10.00 • 2009 SRECs ~ $300.00 • Tier I REC Market is low • 2012 REC $2.00 • 2009 REC $19.00 • Expired ARRA and Reduced State Funding • Electric Competition and Renewables • Discouraging long term contracts • AEPS Attacks

10. Projected Renewable Energy Requirements in PJM By 2026: 133,000 GWhof renewable energy, 13.5% of PJM annual net energy (41 GW of wind and 11 GW of solar) Image Courtesy of PJM

11. Some PennFuture Renewable Energy Activities in 2013 • Defend existing laws and policies • AEPS attacks • PUC proceedings in RMI, etc • Promote legislation to increase standards (though unlikely to pass in political climate). • Streamline solar zoning and permitting (DOE SunShot I)

12. What is Happening in the Power Markets? • Low gas prices + • EPA regulations + • Demand has not recovered = • Many coal plants shutting down + • Previously underutilized gas capacity turning on + • Limited new power plant construction.

13. How Does this Impact Renewables? • If a new plant is needed, what is most economic? • High efficiency gas, then wind. • Future uncertainty about the federal PTC extension impacting wind projects. • REC/SREC prices are too low and there is no additional state support. • Limited new development.

14. Energy Efficiency

15. Data Disclosure (Benchmarking) • Philadelphia Benchmarking Law (May 17, 2012) • What: Requires commercial buildings over 50,000 sq ft of indoor space to report energy and water usage information to the city, for public disclosure. • When: 2012 data is due Oct 31, 2013, subsequent annual deadlines will be June 30. Data goes public Oct 2014 • How: EPA portfolio manager, automated utility data reporting • Penalties: $300/for first 30 day period, $100/day thereafter. • In 2014, trying to bring this to Pittsburgh, along with voluntary disclosure for residential sector.

16. Energy Codes: Will PA Keep Up? • Act 1 of 2011 • Altered PA’s triennial review process for building and energy codes, effectively giving the UCC Review and Advisory Council (RAC) veto power over code adoption. • Prior to this, building and energy codes were automatically adopted by reference. • PA is currently operating under 2009 codes and RAC rejected 2012 update. • RAC failed to follow the analysis procedures required by statute. • Next steps? • Legislative fix? • How will 2015 code update impact PA and building industry if we are still stuck in 2009? • www.builditsafe.org

17. Energy Savings Performance Contracting (ESPC) • PA’s GESA office was closed in 2011 • Program has been suspended ever since • Program guidance changes proposed in Dec 2011, nothing has been publicly finalized, yet. • Program to re-open in pilot phase sometime soon, incorporating a new business model. • School and Municipal budget cutbacks have been significant in PA • Increased demand for energy and non-energy capital upgrades? • Compelling need to promote public-private sector partnerships that facilitate economic development, job creation and cost savings.

18. PennSave Initiative • PennFuture, Local Development Districts across the state, Energy Savings Coalition, and interested ESCOs. • Statewide education and outreach program • 3-Step educational curriculum for schools and municipalities. • Streamline: Start-to-finish procurement templates and guidance. • De-mystify the process: consumer education materials, decision-maker briefing modules, importance of roles and responsibilities, etc. • Focus on consumer protection • Resources: contractor qualification criteria, 3rd party facilitators criteria, and peer-to-peer mentors. • Small project finance component too! • www.pennsave.org • NAESCO & ESC National Support • Federal Grant Application pending

19. Energy Efficiency Requirements for Electric Utilities • Act 129 of 2008 • Required electric distribution companies (EDCs) to reduce consumption load by 3% and peak load by 4.5%, by 2013 • Accomplish this by investing in consumer energy efficiency, conservation and peak demand reduction programs. • PUC can extend the program if proven to be cost-effective. • Early 2012 • PennFuture petitioned PUC to begin extension proceedings prior to statutory deadline. • PUC was very committed to the program, due to consumer savings. • PennFuture later withdrew petition.

20. Act 129 Extension • August 2012 – PUC adopts final order extending efficiency and conservation requirements at a statewide average of 2.3% by 2016 • Proceeding on extension of peak demand program is forthcoming. • Several PA EDC’s challenge PUC’s order on various grounds • Sept 27, 2012 – PUC rejects PECO/FE/PPL petition for reconsideration. • December 5, 2012 – PUC rejects requests by PECO/FE to lower energy savings goals. • Feb 14, 2013 – PUC rejects PPL request to preserve the right to challenge energy savings goals in the future. • PennFuture was involved in every step of these proceedings, fighting to protect, extend and preserve Act 129 requirements.

21. Demand Response and Dirty Diesel • PennFuture loves Demand Response! • However, 18% of PJM’s DR market is backup generation and 93% of that is diesel powered, and likely have no pollution controls. • Rep. Chris Ross is sponsoring a bill to require these engines to install pollution controls as a condition of DR market participation.

22. Ongoing Activities with the PUC • PennFuture intervened in the merger case between Equitable and Peoples natural gas distribution companies. • Goal: establish an energy efficiency program for low and non-low income customers in residential, commercial and industrial classes. • Ongoing oversight of Act 129 implementation • Examples: 2014 technical reference manual updates, demand response program, First Energy settlement. • Monitor retail markets proceeding

23. Alternative Fuels • Alternative Fuels Incentive Grant (AFIG) Program • $6 million annually for alternative fuels • Avoided proposed elimination in Governor’s budget • Rebates (Jan 26, 2013) – PHEV, EV, NGV, propane, hydrogen, electric scooter, etc. • Defend against repeated efforts to undermine or eliminate this program.

24. Climate Change • Very political issue in Pennsylvania • Administration doesn’t acknowledge the existence of human-caused climate change • Is gas part of the solution? • PA has not played a leadership role in addressing the methane leakage question. • Climate Change Advisory Committee • Resources to support this initiative have been significantly reduced.

25. CCAC • Impacts report due April 2012, was provided to CCAC in July 2013. Still hasn’t been released. • Climate action plan was due October 2012, DEP is behind schedule. • Effort is understaffed in both man power and technical expertise. • At what point is DEP going to obviate CCAC input?

26. What is the Plan for 2014 • Develop a comprehensive clean energy plan for PA. • White papers • Clean energy business roundtables • Wind, Solar, Energy Efficiency, Alternative Transportation • Outreach to all candidates and the incumbent.

27. Additional Initiatives • Builditsafe.org • Continue to promote solutions to PA broken code adoption process. • PennSave.org • Engage in statewide education efforts on performance contracting, focusing on school districts and municipalities. • Pittsburgh Benchmarking • Dirty Diesel Demand Response • Act 129 and AEPS implementation oversight • Much, much more!!!

28. Questions?