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New Methodology for Ranking States on CHP to be Implemented This Year

May 10, 2012 - 12:39pm

By Anna Chittum, Senior Policy Analyst

ACEEE is improving the methodology it uses to evaluate a state’s policies toward combined heat and power (CHP) for this year’s annual State Energy Efficiency Scorecard. The new analysis will incorporate lessons learned from prior years as well as feedback provided by the CHP community.

CHP is a suite of technologies that simultaneously generate electricity and thermal energy. These systems can provide reliable, cost-effective power to a wide range of types of buildings, from single-family homes and small commercial buildings to large institutions and energy-intensive manufacturing facilities. CHP systems run on a variety of fuels, including natural gas, biomass, and biogas, and are much more efficient than traditional centralized generation. For all these reasons ACEEE considers CHP a smart policy choice and worthy of preferential treatment by state governments and public utility commissions.

For almost a decade, we have tracked and analyzed how different states encourage the deployment of CHP. While the market for CHP varies dramatically with the local price of electricity and other factors, state policies also make a difference. States can offer financial incentives, financing assistance, preferential emissions permitting, and game-changing regulatory treatments that may make CHP much more attractive to facility owners and managers. States that see robust CHP deployment typically have higher electricity prices as well as strong policies in place that encourage the local CHP market.

We rank states on their CHP policies in our annual State Energy Efficiency Scorecard. This analysis has always looked at several policies and regulations and ranked states based on their in-place policies for CHP. In recent years, CHP developers and advocates have indicated that the CHP rankings were not always reflective of their experience on the ground. To address this, we issued a report reflecting some of these anecdotal thoughts on local CHP markets and began to consider the methodology we would use in future analyses.

Today we issued a white paper outlining a new methodology for ranking states on their CHP policies. While many of the categories remain the same, the new methodology offers substantial clarity in the ranking process and incorporates additional considerations of a state’s CHP market and attendant policies. One notable change is the inclusion of additional policies and revenue streams for CHP, such as feed-in-tariffs, standard offer, and inclusion of CHP in utilities’ energy efficiency programming.

One common concern with prior Scorecard rankings was the fact that highly-ranked states were also home to utilities that tended to discourage CHP projects. ACEEE recognizes the importance of this concern. However, the Scorecard is primarily a tool to reflect state-level policies, and as such is not the proper venue in which to rank individual utility treatment of CHP, as we have attempted to do in the past. While such activity does impact local CHP markets, it is not reflected in the updated methodology. Our future work may again address utility treatment of CHP.

We hope this revised methodology will yield easier-to-understand rankings and a clearer picture of the policy and regulatory framework for CHP in each state. As regulators and policymakers at states around the country increasingly view CHP investments as a smart long-term energy strategy, we expect more and more states will adopt new policies and regulations that enhance the market for CHP around the country.

Categories: Combined Heat and Power (CHP), State Policy, Industrial

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Of Gold and Goldilocks: Funding the Next Chapter in the Local Energy Efficiency Journey

May 2, 2012 - 11:40am

By Eric Mackres, Senior Researcher and Local Policy Lead

This post is the third of three on sustaining local energy efficiency efforts. The first post described trends in local implementation of energy efficiency. The second was about the challenges and successes of local energy planning around the United States.

The last three years have been a productive period of trial and error for communities and initiatives around the country. During that time, federal funds from the American Recovery and Reinvestment Act (ARRA) were distributed to thousands of local governments to be used for energy efficiency. Most local governments were new to implementing energy efficiency for their citizens or local businesses, or in their own operations. Projects have varied widely from public building energy benchmarking and equipment replacement to community-wide programs incorporating engagement, workforce development, and financing. Communities have determined which energy efficiency strategies best meet their needs and they are already seeing the benefits through lower energy bills and economic development. Depending on community priorities and resources, like the three bears’ porridge in the Goldilocks fairy tale, some strategies may be “too hot” or “too cold.” But most communities have now settled on what, for them, is “just right.”

Regardless of their chosen strategies, communities have now had a taste of the energy efficiency porridge and want more. But things aren’t looking great for turning these visions into reality now that federal funding is largely drying up and local governments across the country are facing extremely tight budgets. Even among deeply committed and comparatively well-resourced communities, finding the means to continue funding energy efficiency activities is a challenge.

But during this gloomy national outlook there are many bright spots around the country. Communities such as Ann Arbor, Michigan, Arlington County, Virginia, Chula Vista, California, and Saint Louis County, Missouri have developed sustainable funding mechanisms to allow them to continue energy efficiency activities in the face of dwindling grant funds. As these communities have shown, there are many energy efficiency funding options available to local governments. ACEEE’s new report, Keeping It in the Community: Sustainable Funding for Local Energy Efficiency Initiatives, discusses various sustainable funding opportunities and includes case studies of these communities and others.

After reaping the benefits of the growing momentum on energy efficiency over the past few years, local governments can’t afford to abandon their efforts now. Alternative funding strategies are feasible and there are options appropriate for all kinds of local governments and community priorities. With dedication from local stakeholders and decision-makers toward continuing efficiency efforts, the energy narrative of the next few years will include efficiency becoming a permanent part of how communities around the country do business to improve their economy and environment. Luckily, communities are already taking these important steps forward on the journey from “Goldilocks” to “gold” (sustainable funding and reduced energy costs) and “glory” (economic development and the bragging rights of leadership).

Categories: American Recovery and Reinvestment Act of 2009, Energy Efficiency Financing, Energy Efficiency Investment, Energy Efficiency Program Funding, Energy Efficiency Programs, Energy Management, Government Lead by Example Initiatives, Local & Community Initiatives, Market Transformation, Public Buildings, Local Policy

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Inventing Tradition with your O&M Staff and Tenants

May 1, 2012 - 3:00pm

By Susan Mazur-Stommen, Behavior and Human Dimensions Program Director

I will be speaking at the upcoming NCBC meeting in Nashville on May 15^th. The organizers and I decided to write a short blog with some ideas to help jump-start conversation and participation. In my keynote I will be talking about some of these ideas in more depth, in particular the idea of invented traditions. Today I thought I would stray a little bit into how we can create embodied traditions that work holistically (mind, body, and environment) to enhance memory and learning.

In order to permanently implement building commissioning practices that provide long-term savings, providers of commissioning services need to harness the processes of institutional culture change. This requires an understanding of how people actually learn new practices. A successful dialogue between the commissioning service provider and their client needs to take place within a space constructed for learning, one which takes into account the recursive nature of the information exchange and how information is processed and acted upon.

One might refer to this as “education” but for the fact that “education” as a concept has come to mean a one-way transfer of information (for example, from me to you) delivered via media that favors visual-verbal learning styles (written directions) and with the responsibility for retention resting with the passive recipient (memorization). How do people learn? How do you learn? Do you remember everything that people tell you? Or do you find yourself referring to notes? Are there complex activities you conduct semi-automatically and precisely? What might those be and how did you acquire those habits?

Running a large building is analogous to running a large ship. Think of the sailing ships of the past, with their crews working together precisely. Their work was embodied, automatic, and mostly learned kinesthetically. Much of the information they deployed in their everyday activities (adjusting and controlling a complex system, responding to weather events and temperature changes) was also embedded in lore; but where did this lore come from? It was invented. Someone, somewhere, encapsulated complicated sets of observations into pithy structures, like:

Red sky at night, sailor’s delight
Red sky at morn, sailor be warned.

Is there a scientific basis to this snippet? According to the Library of Congress there is. Many disciplines have built mnemonic devices (My Very Elegant Mother Just Served Us Nine Pies worked very well until “they” did away with Pluto!) and behavioral cues into how they transmit knowledge. Medical students famously learn mnemonics as a matter of course; there are pages and pages of them on the web. Are there appropriate mnemonics one could devise for O&M staff to help them retain solutions to problems as they are encountered?

Ritual, something done repeatedly and automatically to bring about a desired result, is another way to bind memory into behavior. Creating a physical routine that someone can act out without thinking through is how we drive a car. You don’t have to consciously run through a list of activities; instead you likely automatically scan the dashboard, looking to see if you have gas, if the oil light is on, before engaging gears and driving away. Are there analogs to driving in the maintenance of a commissioned building? When there are system aspects of the building that need irregular oversight, you can tie them to other seasonal activities—“When the beer is green, check the screens.”

It may sound a bit silly, and it certainly won’t accumulate overnight, but using real insight into how people actually learn can help you change their organizational behavior and preserve the status of your commissioned building!

Categories: Behavior & Human Dimensions, Building Envelope, Building Modeling and Simulation, Building Performance, Commissioning & Retrocommissioning, Energy Audits

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ACEEE Updates State and Local Technical Assistance Toolkits

May 1, 2012 - 9:33am

By Max Neubauer, Senior Policy Analyst

ACEEE has collaborated with state and local stakeholders for decades, arming them with valuable, up-to-date resources on energy efficiency to facilitate effective program and policy development and deployment. Recently we developed our State and Local Technical Assistance Toolkits in order to meet state and local governments’ disparate and often immediate needs for relevant resources on all things energy efficiency. Whether providing best-practice program design or policy approaches, ACEEE’s tools have been developed out of our experience working with policymakers and program managers. Our resources are intended to provide a solid foundation for achieving lasting energy savings and stimulating economic growth through energy efficiency.

In the absence of current federal leadership, the challenge of developing and implementing prudent energy policy has increasingly fallen on the shoulders of our state and local governments. Many have shown laudable initiative, enacting laws and designing programs that will make homes and buildings more efficient and communities cleaner and more livable, while others have lagged behind. State and local governments often lack the financial capital and technical resources to design and implement energy efficiency policies and programs. A fundamental need also exists to educate stakeholders (such as state legislatures and city councils, non-governmental organizations, and, perhaps most importantly, consumers) about energy efficiency and its myriad benefits. Resources from ACEEE’s State and Local Technical Assistance Toolkits are designed to meet these various needs, providing stakeholders with tools ready for immediate use in policy and program development and implementation.

This month, ACEEE releases two new tools for its State Technical Assistance Toolkit. These new tools address on-bill energy efficiency financing programs and self-direct programs for industrial and large-scale commercial customers.

On-bill financing (OBF) is a method of encouraging investments in energy efficiency by home or business owners by leveraging electric and natural gas utilities’ unique relationship with their customers to provide convenient access to funding. OBF reduces one of the structural barriers to efficiency upgrades—up-front capital—by allowing utility customers to “borrow” funds to invest in energy efficiency improvements and repay the financing through an additional charge on their utility bill. If structured properly, an on-bill program can substantially reduce the cost of, and improve access to, financing. In many cases, the product can be “bill-neutral,” meaning that the energy savings are sufficient to cover the monthly payments for the financing, so that the total monthly charge on the utility bill is less than or equal to the pre-investment amount. There are several barriers to adoption of this financing mechanism such as the costs associated with complying with consumer lending, and the perception that utilities must act outside their business model to provide these services. For more on this topic, click here.

Self-direct programs target industrial and large commercial operations—facilities that are sometimes underserved by traditional utility-financed energy efficiency programs due to their unique energy use characteristics. These customers sometimes advocate for alternatives to traditional energy efficiency programming, and as a result many states have developed “self-direct” or “opt-out” provisions that allow these customers to either self-direct their energy efficiency fees (embedded in rates or as a surcharge on a utility bill) directly into energy efficiency investments in their facilities, or opt-out of paying their energy efficiency fees altogether, with no corresponding obligation to make investments in energy efficiency independently.

Like other utility system resources, energy efficiency is a resource that benefits all users; therefore, energy efficiency should be paid for by all users. Unfortunately, the absence of industrial and large commercial customers paying into energy efficiency programs greatly reduces the potential system-wide benefits that can be generated through efficiency. While self-direct programs, if properly structured, can be effective tools to capture industrial and large commercial energy efficiency, and can help overcome long-standing barriers to greater energy efficiency for these customer classes, opt-out programs are never appropriate policy tools for doing so. For more on this topic, click here.

Other Resources

ACEEE’s State and Local Technical Assistance Toolkit provides informational resources on programs and policies currently being implemented, such as utility performance incentives for energy efficiency and tools for deciding what policies best fit a particular jurisdiction. Each resource provides readers with links for more information and additional technical assistance documents. The Toolkits are works in progress and are continuing to evolve as we identify additional policy and program needs. If you do not find the tool you need in the current offering, please let us know so we can consider addressing it in the future.

Categories: ACEEE, Combined Heat and Power (CHP), Decoupling, Distributed Generation, Economic Development, Electricity, Energy Efficiency as a Resource, Energy Efficiency Financing, Energy Efficiency Investment, Energy Efficiency Resource Standards, Evaluation, Measurement, & Verification (EM&V), Exemplary Energy Efficiency Programs, Financial Incentives for Energy Efficiency, Government Lead by Example Initiatives, Interconnection Standards, Local & Community Initiatives, Net Metering, Policy Analysis, Public Buildings, Standby Rates, Utilities, Utility Regulation & Policy, Utility Restructuring, State Policy, Local Policy

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