Earlier this year, the Alliance Commission on National Energy Efficiency Policy unveiled a plan to double nationwide energy productivity by 2030. It’s an ambitious move to greatly increase our nation’s use of energy efficiency, which represents a huge – and largely untapped – opportunity. Reducing wasted energy through efficiency cuts harmful pollution and saves people money on their energy bills. After all, the cheapest, cleanest, most reliable electricity is the electricity we don’t have to use.
Similarly, the State Energy Race to the Top Initiative (Initiative) is an incentive for states to make voluntary progress to increase their energy productivity. The U.S. Senate is moving forward to make this idea a reality. Originally introduced as a bill in June, the Initiative has now been filed as a potential amendment, sponsored by Senators Mark Warner (D-VA), Joe Manchin (D-WV), and Jon Tester (D-MT), to the Shaheen-Portman energy efficiency bill. If passed, the Initiative will stimulate energy innovation in both the public and private sectors, and allow states to tailor energy saving policies to their particular needs.
Administered by the Department of Energy (DOE), the Initiative will be broken into two phases. In the first phase, following the submission of state proposals through their energy office, DOE selects 25 states to receive funding (a combined $60 million) to move their energy productivity concepts forward. Although states have complete independence in developing and implementing their own clean energy strategies, the DOE will provide technical assistance upon request. Eighteen months later, in the second phase, the 25 states will be asked to submit progress reports to DOE. Based on their projects’ success, DOE will then select up to six states to receive a share of $122 million to continue their energy saving efforts.
The $200 million initiative challenges states to work with diverse stakeholders, including electric utilities, regulators, clean tech entrepreneurs and environmental organizations. Proposals should benefit all stakeholders, and can include a number of clean energy policy and program ideas. This could involve the expansion of industrial efficiency, building retrofits, demand response policies, smart grid investments and combined heat and power.
In order for innovative clean energy technologies to take off as the “norm” across the country, some key states need to lead the charge – and this is where a State Energy Race to the Top Initiative could help drive progress. Many of the decisions regarding clean energy investment and deployment, including grid modernization, are governed by state policies in coordination with state legislatures, state energy offices, utilities and other stakeholders.
State regulators in some states, such as California, Texas, Illinois, North Carolina and New York, are already working to put smart power policies in place. California, one of the first to act, ordered its main investor-owned utilities to address three areas: reducing harmful pollution, fostering competition to increase energy innovation and allowing new clean energy sources the same access as traditional fossil fuel power generation. Texas, for example, boasts one of the most modern power grids in the country due to advanced, smart metering and greater customer engagement, allowing Texans to participate as “prosumers’ – or consumers and producers of energy. Under this Initiative, any state that takes steps to push clean energy policies such as these would be eligible to apply for funds through the competitive grant program.
If you’re wondering how states that are newer to clean energy policy will compete with those that are already clean energy leaders, the Initiative is designed to prevent this advantage. The productivity increase of any state is relative to that state’s initial baseline, as opposed to other states. DOE will also be taking geographic diversity into account when allocating the funding, and will put aside $8 million for Indian Tribe participation.
The Initiative builds on existing public and private networks, like the State Energy Program, but is a separate statute in itself. It has also seen strong support from groups such as the National Association of State Energy Officials, the American Gas Association and Edison Electric Institute.
The initiative has potential to make a great difference in our country’s energy productivity – providing a cost-effective tool for reducing our nation’s energy consumption, while saving consumers money and reducing harmful air pollution. A recent ACEEE study estimates that the State Energy Race to the Top Initiative would result in cumulative energy savings of roughly 380 billion kilowatts per hour (kWh) and a cumulative savings of carbon dioxide of 71.25 million metric tons (MMT) by 2030. This reduction in CO2 emissions is equivalent to the annual greenhouse gas emissions from nearly 15 million passenger vehicles, or 20 coal-fired power plants. According to a recent study, the Initiative would also significantly leverage additional capital. In fact, ACEEE’s study shows that every $1 invested in this program returns $8.40 in energy savings. A great investment for the American taxpayer!
The bottom line is that this Initiative a simple, effective, affordable idea that could yield real results for our health, economy and environment. It will allow states to develop energy saving policies and programs that work best for them, without mandates. It will also drive states to become clean energy leaders by giving them a reason to innovate and a means to do it.
Click here to take action by urging your Senator to cosponsor the State Energy Race to the Top Initiative.