Green Mountain Global Forum Waitsfield, VT Michael Dworkin, Professor of Law & Director,

1. Energy Policy: The world's most important environmental issue Green Mountain Global Forum Waitsfield, VT Michael Dworkin, Professor of Law & Director, Institute for Energy and the Environment Vermont Law School June 19, 2007 -

2. The Energy “Trilemma” • Cost of Energy -- $ $ $ • Security and Reliability • Foreign & Domestic • Environmental Stress • Land Use, Air & Water Pollution, and Climate Change

3. Why Care About World Energy Trends ?

4. Because the World Prices – and World Emissions Affect You • World energy demand sets world natural gas price. • World natural gas price sets wholesale new England electricity price. • New England wholesale electricity price sets one-sixth of Vermont power costs now • Climate Change is global, and Green House Gases have global effects

5. Bering Sea 2004(NYTimes 07/02/03)

6. Climate Change…..an environmental tragedy Carbon dioxide that results from burning coal, oil and gas (using energy) remains in the atmosphere for over a hundred years trapping heat. The earth’s temperature correlates with the amount of carbon dioxide in the atmosphere. As it accumulates, the earth’s temperature rises.

7. Surface and sea temperatures have risen around the world and they will rise further over the next century Then…1884 Now…..2006

9. The end of nature-- Six months of mud-season Bill McKibben A sharp drop in the human-carrying capacity of the earth Kurt YeagerWe are confronted with insurmountable opportunities Amory Lovins What we need is not a silver bullet, but “A Green New Deal” -- a broad spectrum of measures.

10. Sources of US air pollution…. About 1/3 200 million Cars & Trucks Less Than 1/3 2 Billion Other Sources More Than 1/3 3,000 Power Plants 15% from dirtiest 20 50% from dirtiest 100 90% from dirtiest 300

11. Carbon Emissions: The Willie Sutton Principle

12. Are The Current Challenges Episodic or Fundamental ? Average household electricity use of world population (6.1 billion people) in the late 1990s---- 0.6 billion people 10,000 kWh (US level ca. 12,000)2.0 billion people 5,000 kWh (typical Latin/Eastern Eur)2.0 billion people 1,000 kWh (typical Asia, Africa)1.5 billion people 0 kWh (Asia, Africa) If 5.5 billion people use 5,000 kWh/ year in 2025: equals about 200% of 1990s’ electricity demandIf 9 billion people use 5,000 kWh/year in 2030: equals almost 300% of 1990s’ electricity demand If 9 billion people use 10,000 kWh/year in 2030: equals over 500% of 1990s’ electrical demand. Pareto assumption – new need met without reducing current usage levels of 600 mm people

13. Power costs will be high for a long time We will be competing with the developing world for gas and oil Shifting to efficiency and renewables will save money over the next decade. Cheap coal will hit financial and environmental limits very soon. What does the rising demand for energy mean?

16. Do we have a national energy policy? We do .. And it is this So, how is America dealing with the likelihood of more expensive less available energy?

17. Stunning coal resurgence: 154 new plants planned -- 93 GW, $137 billion

18. Where is the problem? • Think vehicles • Think fossil-fired electric power • Think a dozen other ideas across the board • Most Importantly: THINK !

19. Potential Sectors For State Climate Policy • Electric System Efficiency – • Utility Generation, Transmission, Distribution • Natural Gas Use • End Use Efficiency • Buildings, Farms • Appliances • Industrial Processes • Non-Utility Electric Generation – • especially renewables • Transportation

20. It is feasible: We have done it , we can do itEnergy Efficiency, Most important Electric Efficiency: Lighting, motors, insulation, pumps Transportation efficiency: New Cars, feebates, guzzler fees High Mileage TiresBus routes ?New FuelsElectricity from Renewable energy: Wind, solarTransportation fuels: Bio Fuels, Cellulosic EthanolAttention & Awareness, Commitment! Low Carbon Futures – Key Next Steps

21. US energy use already cut to Lovins’ “soft path” actual total energy consumption Government (DOE- EIA) gas nuclear renewables but that just scratches the surface, esp. for oil & electricity…

23. But, Isn’t Vermont Already Clean? • Physically, operationally, Vermont is part of New England’s unified electric system so sometimes the ISO-NE ramps up “dirty” power plants to meet our electricity demand. • 85% of time fossil fuel runs the marginal electric unit in New England (fueling the power plant that is turned on if our demand goes up, and turned off if our demand goes down) • Every kWh Vermont serves with efficiency or with renewables reduces New England’s – and world’s -- global warming pollution/ carbon.

24. … and we may not be low-carbon for long

25. Things for Vermont to do : • Reduce emissions from Transportation • Reduce emissions from Stationary Sources • Seize Business Opportunities • Take advantage of Fiscal Opportunities • Enact Policies • Provide Technical Assistance

26. Reduce Emissions from Mobile Sources Ways to reduce emissions from transportation: • Travel fewer miles • Use greener fuels • Create and use efficient vehicles • Create good public transportation systems

27. Things for Vermont to do : • Reduce emissions from Transportation • Reduce emissions from Stationary Sources • Seize Business Opportunities • Leverage Fiscal Opportunities • Enact Policies • Technical Assistance

28. Electric Non-Utility Community Energy Production & Ownership or Control • Group Net Metering • Clean Community Generation • Distributed Generation/CHP • Streamlined Permitting for Renewables

29. Electric Utility and Use Improve System • Sustain Renewable Energy Support • Ratepayers • Taxpayers • Utility Performance Based Regulation with GHG in performance End-Use Efficiency • Make Efficiency Vermont Enduring • Franchise with same term and same freedom to advocate that investor-owned utilities now have • Expand scopeof efficiency utility

30. Reduce Emissions from Stationary Sources Electric • Utility • Non-Utility Non-Electric • Regulated • Unregulated State-Funded Buildings & Programs • State-Owned Buildings • Non-State-Owned Buildings

31. Regulated Non-Electric VT Gas Systems • Continue and expand VGS efficiency programs • Building Energy Use • HVAC • Residential insulation and furnaces

32. Unregulated Non-Electric End-Use Efficiency • Expand Efficiency Vermont • Building Codes • Updating • Enforcement • Appliance & Equipment Efficiency Standards Renewable Content in Heating Fuels

33. State-Funded Buildings & Programs State-Owned Buildings • Goal • Stiffer standard than generally applies • Clean energy and efficiency as a design fundamental State Supported Non-State Buildings • High Performance Schools - required for state $$ • Scoring bonus on state-administered grants for green buildings and clean energy

34. Things for Vermont to do : • Reduce emissions from Transportation • Reduce emissions from Stationary Sources • Seize Business Opportunities • Leverage Fiscal Opportunities • Enact Policies • Provide Technical Assistance

35. Seize Business Opportunities • Jump start for forest products industry • Note sustainability issues (regrowth and mono-culture) • Use reserved ag land for woody (cellulosic) fiber • Biofuels • Biomass Energy • Intellectual capital brings $ to Vermont • Professional – Regulatory Assistance Project • Academic – VLS & UVM… and GMC and … … • Promote Implement Skills and Tools for Export • GRO • NRG • Stone Environmental Services • Solar Works • VEIC

36. Leverage Fiscal Opportunities • Exclude value of clean energy systems in grand-listvalue. • Make green systems and/or insulation and high efficiency appliances tax exempt. • Offer Production Tax Credit (better than Investment Tax Credit) • Provide Low-cost financing of high efficiency and/or renewable projects. • Use long-term financing of efficiency potentials through Efficiency Vermont VT state employees’ pension fund investments

37. Implement Policies to Foster Green Energy Land Use Planning & Regulation: • Require efficiency and GHG consideration in Act 250 permit decisions • Emission Fees / “Carbon Tax” • Pollution Caps (first “cap”, then “trade”) • Public Allocation of RGGI Credit Revenues • Green House Gas Assessment Obligations for Significant Governmental Actions

38. Efficiency Vermont • The nation’s first energy efficiency utility • Established by regulatory order and supporting legislation • Implements energy efficiency as a least-cost resource to meet Vermont’s electric power needs • Kennedy School of Government 2003 Award of $100,000 for one of 5 Most Innovative and Effective Programs in America

39. Key Design Features • Funded by a “System Benefits Charge” ( a 2- 4% surcharge on customer bill) • A single, statewide administrator acts as: “Efficiency Vermont” • Selected through competitive performance bidding • Independent, non-utility contractor, under a multi-year, performance-based contract with the Vermont Public Service Board, with significant $ holdback

40. 2004 Savings Distribution

41. Cost of Wholesale Electric Energy including ancillary and bulk transmission costs but not distribution ISO NE Monthly Average Wholesale Market Price Efficiency Vermont, Contract Price per levelized kWh, stacked below customer-cost

42. Market Potentials– and Results • Nation-Leading Market Shares • Highest 2002 Efficient Residential Air Conditioning Share (61%) • Highest 2003 Efficient Washer Share (62% in 3rd Quarter) • 2002 Share for Energy Star Homes: 25% • High Participation of Lighting and Appliance Dealers • High Participation in Key Markets • Affordable Housing • Commercial and Industrial New Construction

43. Recognized for Innovation $100.000 Award from Harvard’s Kennedy School of Government for Innovation in American Government

44. Things for Vermont to do : • Reduce emissions from Transportation • Reduce emissions from Stationary Sources • Seize Business Opportunities • Leverage Fiscal Opportunities • Enact Policies • Provide Technical Assistance

45. Provide Technical Assistance Provide Ombudsman for state and federal grants to : Help Cow Power farmers deal with: • Bureaucracies: USDA, DOE, VT Agriculture, VT DPS • Guide them through regulatory mazes Help people who install on-site clean generation through Net Metering, etc. Answer questions

46. Leadership  Vermont leads effectively and others join • Rich Cowart and public allocation of RGGI credits: NY, MA and other RGGI states will follow • Efficiency Vermont’s awarded $100, 00 Kennedy School for Innovative and Effective Governmental programs • Rich Sedano’s work with Arkansas PSC efficiency. • In March, May, and September, the IEE at VLS will be working with Chinese law schools and Chinese governmental utilities: • What shall we tell the energy leaders of one-quarter of humanity ?

47. Institute for Energy & the Environmentwww.vermontlaw.edu/energy/research Michael Dworkin, Professor of Law and Director, Institute for Energy and the Environment Vermont Law School 802.831.1319 South Royalton VT 802.249.7840 Cellular MDworkin@VermontLaw.edu

48. Vermont’s Energy Efficiency And Affordability Act: Vetoed • Provisions of H-520 • Sets renewable energy for state at 25 percent by 2025 • Energy‑efficiency and load management measures beyond electric sector (i.e., for inefficient buildings) • Allows self‑generation and net metering • Facilitates wind energy production with a tax incentive. • Commercial building energy standards • Renewable energy pricing • Gives credit for businesses that use solar power

49. Vermont’s Energy Efficiency And Affordability Act: Vetoed • Encourages energy projects on farms • Requires utilities to offer renewable energy to customers • Several provisions that encourage conservation and efficiency • Expands weatherization program to save energy and money for customers • Sets goals for bio-diesel use • Encourages small hydro power projects\ • Make Efficiency Vermont as enduring as an electric utility