Energy & Environmental Issues for South Central PA

1. Energy & Environmental Issues for South Central PA Christina E. Simeone Director, PennFuture Energy Center

2. Energy and Environmental Issues of Interest to SC PA Governments • Energy • Solar • Energy efficiency in buildings • Act 129 • Energy Disclosure • Energy Codes • Energy efficiency financing • Alternative transportation fuels • Environment • Marcellus shale development • Interstate Pipeline • Chesapeake Bay • Stormwater management

3. 5 Electric Distribution Companies PPL First Energy (Penn Elec) West Penn Power First Energy (Met Ed) PECO

4. Plus, 2 Rural Electric Coops Adams Electric Valley Rural Electric

5. General Observation • Difficult to come up with standardized approach throughout this region. • Role of increased coordination and consumer education? • Education on electricity savings through shopping for electricity. • WWW.PAPOWERSWITCH.COM • PA-based renewable energy • WWW.CHOOSEPAWIND.COM

6. U.S. DOE SunShot Project • Reducing non-hardware costs and market barriers. • Convening local government teams and relevant stakeholders. • Improving market conditions for grid-connected rooftop photovoltaics (PV) for residential and commercial sectors in southwestern Pennsylvania. • Create model ordinance and best practice for expedited permitting and inspection processes. (October 2012) • Region-wide training for code inspectors on expedited review and inspection. • Work with utilities to develop best practices and training on interconnection. • Convene a regional finance strategy group to explore innovative project finance opportunities.

7. City of Philadelphia:Energy Disclosure for Commercial Buildings • The bill will require commercial buildings over 50,000 sq ft (amended from 25,000 sq ft)  to have their energy efficiency (electricity and water) rated. • Use Free Energy Star Portfolio Manager tool and submit data yearly to the Mayor’s Office of Sustainability. • On Tuesday, 6/5/2012, Councilwoman Blondell Reynolds-Brown’s energy benchmarking bill was passed out of committee. • It will be up for a full vote in the next week or two. • Building Owners and Management Association (BOMA) opposes it – so there are some headwinds.

8. Act 129 Extension • Phase I of Act 129 - 10% of total 2013 required electricity savings targets for utilities are from federal, state and local governments; including municipalities, school districts, institutions of higher education and nonprofit entities. • Savings are obtained by offering incentives like equipment rebates for HVAC, refrigeration, appliance recycling, lighting, fans, compressors, motors and custom projects. • Each utility is exceeding the 10% requirement thus far except for West Penn which is only about ½ way to 10%. • Many utilities are under a waiting list for these programs: • PECO’s programs all under waitlist for this sector. • FirstEnergy’s Audit Program for County and Local Governments and Schools is now fully subscribed for customers of Met-Ed, Penelec and Penn Power. They do still have rebates available for equipment and lighting upgrades. • PPL’s programs are all still open • PUC is currently investigating Phase II of Act 129. If the PUC decides to allow for utilities to “bank” excess savings for use in Phase II then some of these waitlisted programs may able to reopen. • Currently the PUC is also proposing to continue the 10% carve-out requirement for Phase II and is asking that utilities give special emphasis to the multifamily housing sector as part of this carve-out in the next phase.

9. Energy Codes:A Big Loss for Pennsylvania • Codes set minimum requirements for energy-efficient design and construction for new buildings. • Pennsylvania had been a leader in building energy codes until January 18, 2012 when the Uniform Construction Code Review and Advisory Council (RAC) voted not to update the code from the 2009 International Energy Conservation Code (IECC) to the new 2012 IECC. • Previously, new codes were automatically adopted and it was up to the RAC to recommend what should be excluded. Unfortunately, the recently passed House Bill 377 (Act 1 of 2011) requires a 2/3 vote from the RAC in order to update the statewide building code, including energy codes. • This law places veto power in the hands of homebuilders and their allies, who make up 1/3 of the RAC and hold firmly to the belief that new codes are too costly and burdensome and should not be adopted. • While building to higher energy codes can cost more up front, the resulting energy savings allow homebuyers to recover those costs within five to 23 months, according to a recent analysis by the Building Codes Assistance Project (BCAP) and ICF International. Once the up front costs are recouped, the owner saves between $192 and $669 in reduced energy bills per year.

10. Energy Code Solutions • Work to reverse RAC’s decision and ask that they adopt the “noncontroversial” code changes; Hold separate hearings and votes on the “controversial” code changes (which they never did and is required by the Act 1 law) • Federal Energy Policy Act of 1992 (EPAct) which requires adoption of certain energy codes by July 2013, or certification of why the Commonwealth cannot comply. • Pennsylvania is the recipient of over $100 million Department of Energy (DOE) funding specifically to promote energy efficient buildings. • Pennsylvania risks this funding if it fails to comply with the EPAct requirements, but the RAC has also created a potential public relations debacle in terms of the Commonwealth’s relationship with the DOE. • Develop a complete analysis of the Act 1 factors and adopt the residential and commercial energy codes to comply with EPAct. • Work on a legislative fix.

11. Energy Efficiency Financing • Guaranteed Energy Savings Act Program • Allows school districts, municipalities, and state government to finance upfront capital cost of energy efficiency upgrades through long term energy savings. • 3rd party financing • Private sector guarantees energy savings • Program was facilitated by DGS. • In early 2011, DGS Energy Management Office was eliminate, GESA Program suspended. • In late 2011, Significant changes proposed to the program that will decrease its effectiveness. • Unknown if and when proposal will be finalized and how it will impact private sector interest in contracting.

12. Alternative Transportation Fuels • Major opportunities for: • Natural Gas Vehicles • Transit (ex. buses, taxis) • Fleets (delivery trucks, garbage trucks) • Heavy Duty Vehicles (ex. tractor trailers) • Electric Vehicles • Consumer vehicles (cars) • Medium duty fleets • Biodiesel • Cars • Diesel additive for trucks and non-road equipment

13. Alt. Fuels Policies in Pennsylvania • AFIG Program – eliminated in Governor’s budget? • Grant program with ~$6 million annually to promote alternative fuel vehicles, infrastructure, technology, etc. • Act 13 grant program • >$20 million over 4 years for a natural gas grant program to purchase or convert heavy duty vehicles and HDV fleets. • Public Utility Commission’s Alternative Fuel Vehicle proceeding • Examining the role of the public utility commission in alternative fuel infrastructure and market development. • Local Governments? • PECO EV Program • $50 rebate per car for letting PECO know about the car • $1,000 for every public charger installed – government, institutional and non-profit customers • Up to $3,000 to counties to install public charging station in PECO territory. • www.peco.com/SmartIdeas

14. Marcellus Shale • Some MS in North Dauphin, no active exploration • County passed resolution for the marcellus impact fee, so can receive Act 13 money if there ever is drilling. • Items of Interest for Local Governments: • Marcellus Compact Bills – package of 6 pieces of legislation to reform Act 13. ·Restore municipal zoning authority by eliminating Act 13’s override of local zoning provisions; ·Ensure tax fairness for Pennsylvanians by imposing a reasonable statewide tax on natural gas drillers for the life of the well; ·Protect critical natural resources by increasing environmental setbacks and bonding requirements; ·Increase transparency and safety by establishing a public online tracking system for fracking wastewater storage and disposal; prohibiting drilling in floodplains; and placing a moratorium on discharging drilling wastewater into surface waters; ·Guarantee the rights of patients to full medical disclosure and transparency when their health might have been affected by fracking chemicals; and ·Make jobs a priority by establishing a Marcellus Shale Job Creation Tax Credit to provide incentives for companies to hire Pennsylvania workers.

15. Pipeline • $1 Billion UGI “Commonwealth Pipeline” • 200 miles. 7.8 Million cubic feet/day. Operational 2015 • Lycoming County (existing MARC1 pipeline), through Harrisburg/Lancaster/Philadelphia to Baltimore and DC. • Interstate pipelines are largely under FERC jurisdiction. Act 13 essentially preempts local regulation of pipelines. • Process: • Contract for capacity to build regulatory interest (open season) • FERC pre-filing & notice • Landowner and municipal notification, permits, data, etc (6-12 mos until submission of filing) • FERC determination of public interest (consideration of environmental impact too)

16. Q2 2012 – Non-Binding Open Season • Q3 2012 – FERC Pre-Filing • Q1 2013 – FERC Filing • Q1 2014 – Award Contract • Q2 2014 – Start Construction • Q2 2015 to Q2 2016 – In-Service WWW.COMMONWEALTHPIPELINE.COM

17. Chesapeake Bay • EPA has backed off a little on local government pollution loads, with more emphasis on state role in clean up. • DEP is restructuring permits. County conservations districts to have greater role in enforcement and compliance. • What about local governments? • Keep in touch with DEP • Leverage resources and services with other municipalities to maximize efficiencies (wastewater caps, land use decisions, nutrient trading) • Lancaster has a terrific model – The Green Infrastructure Plan. • 25-year strategy to eliminate combined sewer overflows to local river. • Compliments efforts to improve efficiency of existing wastewater plants. • Financing and incentives • Tree planting, conservation, permeable features • Focus on quality of life

18. Stormwater Management • Existing issues, plus, new NPDES requirements for larger municipalities with the MS-4 • SB 1261 – Passed Senate • Allows municipalities to develop stormwater authorities to help assess fees to finance stormwater infrastructure projects. • City of Philadelphia • Combined sewer and stormwater overflow • Changed fee structure • Change from meter size based fee to a fee based on area of impermeable surface. • Incentives and credits for mitigation measures (engineered solutions, rain barrel, increasing permeable surfaces, etc)

19. Question and Contact Info • Christina Simeone – Energy Issues • simeone@pennfuture.org • Steve Stroman – Marcellus Issues • stroman@pennfuture.org • Kate Gibbons – Water Issues • gibbons@pennfuture.org