Commission on Energy and Environment

June 24, 2009

The Commission on Energy and Environment met on June 24, 2009, in Richmond. Delegate Poindexter opening the meeting on behalf of Senator Whipple, chair of the Commission.

Presentations

Staff Reports
Staff presented information on energy-related legislation considered during the 2009 Session of the General Assembly. SB 1212, Clean Energy Financing, was discussed, including how such financing would be accomplished and whether the statute would apply to all localities. Steve Walz, Director of the Department of Mines, Minerals and Energy, explained that the financing would be secured by a lien on the property and could be repaid in conjunction with other local government invoicing. The ordinance by the locality would address the priority of payments. Private lenders will have the opportunity to participate in the program. Staff stated that the bill applies to all cities, counties, and towns. Members of the Commission also asked about SB 1350, Marine Resources Commission; authority to lease subaqueous lands for generating electrical energy, and the jurisdiction of the lands contemplated by the legislation. The bill refers to state territorial waters, which extend three miles from shore into the Atlantic Ocean.

Of those energy-related bills from the 2009 Session, SB 1452, was directed to the Commission for review. Staff provided a more detailed assessment of this legislation and its background. The program is based upon a successful program in Vermont and would assess a $1 fee. A member noted that the program was based upon Efficiency Vermont and would take the efficiency programs approved by the General Assembly and send those to a third-party program administrator. Delegate Poindexter asked how efficiency programs would be selected and audited. The member replied that any program would be conducted with transparency and accountability.

Al Christopher, Dir., Division of Energy, Dept. of Mines, Minerals and Energy (DMME)
Mr. Christopher reviewed the framework of the American Recovery and Reinvestment Act (ARRA), procedures for project proposals and grants, and reporting requirements mandated by ARRA. In addition to the numerous state and federal guidelines to which DMME must adhere when awarding grants, projects will be selected in part for their conformance with existing policy and the ability of such projects to preserve or create jobs.

Mr. Christopher relayed that the Commonwealth received a total of $76.5 million—$70 million from the State Energy Program and $6.5 million from the Energy Efficiency and Conservation Block Grants (EECBG)—to broadly promote the conservation of energy, reduce the rate of energy growth, expand existing energy efficiency, and support renewable energy. Programs include:

• Rebates for the purchase of renewable energy systems such as wind and solar power for households and businesses;
• Installations of such systems in state and local government facilities and public schools;
• Economic development incentives to support biomass, waste-to-energy, renewable energy and energy efficiency products, services, and projects; and
• Grants and rebates for energy efficiency improvements in homes and commercial properties.

The EECBG program also provides grants directly to localities to stimulate economic growth and reduce reliance on fossil fuels through conservation and efficiency. In Virginia, $44.6 million will be provided directly to 28 larger localities and $9.7 million will be provided competitively to smaller localities.

A question about the selection and eligibility of certain localities and who the contact person and liaison in state government for localities was raised. Al Christopher advised that he is appropriate person to contact.

Shea Hollifield, Deputy Director, Virginia Dept. of Housing and Community Development
Ms. Hollifield provided a review of the Weatherization Assistance Program, which receives funds from the U.S. Department of Energy's Weatherization Assistance Program and the U.S. Department of Health and Human Services Low Income Home Energy Assistance Program (LIHEAP). The program has received $94.1 million in additional funding from ARRA. Currently weatherization services are provided through regional nonprofit organizations and allocated based on the federal weatherization formula that weighs income, number of heating and cooling days, and residential energy expenditures by low-income households. Eligibility is determined through an intake process that measures income and feasible energy savings. Priority is given to the elderly, disabled, and households with children. The weatherization process includes an energy audit, prioritized work specifications (which may be accomplished directly through providers or subcontractors), and a postproject assessment to document the energy savings accomplished. As for the ARRA funding, DHCD has entered into initial contracts for 40% of the moneys, accessed ramp-up funds for additional capacity to process the expanded program, and established training initiatives with the Virginia Community College System and the New River Center for Energy Research and Training. Ms. Hollifield stated that the challenge faced by DHCD in the implementation of the program is that of the limited time for implementation—March 31, 2012. Members had a variety of questions regarding the moneys, which can be viewed at the Commission’s website.

Emory Rodgers, VA Dept. of Housing & Community Development
Mr. Rodgers provided the Commission with a review of the regulatory procedures for changes to the building code. The 2009 Virginia Uniform Statewide Building Code (USBC) will reference both the 2009 International Energy Conservation Code and the 2009 International Residential Code. The development of the regulation proceeds in accordance with the Administrative Process Act and includes two public hearings before the approval by the Board of Housing and Community Development on September 30, 2010. The progression of energy efficiency gains is occurring incrementally with each three-year amendment to the code. The 2006 USBC provided an approximate increase in energy efficiency of 11%, the 2009 USBC will provide an approximate increase in energy efficiency of 15%, and the 2012 USBC will provide an approximate increase in energy efficiency of 15%. Mr. Rodgers stressed that, while the process is complicated because of its interrelation to other numerous and specific uniform codes, it is also open and transparent. Finally, Mr. Rodgers reviewed the changes to the USBC for 2009.

Kenneth Newbold and Jeffrey Tang, James Madison University
Mr. Newbold and Mr. Tang spoke to the Commission about the 25 x '25 Initiative to acquire 25% of energy from renewable resources such as wind, solar, and biomass by the year 2025. Although over 850 entities have endorsed the 25 x '25 Initiative, the General Assembly has not done so. A number of entities have joined to form the state alliance to create a demonstration area in the Shenandoah Valley. The demonstration area in the Shenandoah Valley is only the second project endorsed by the national 25 x '25 organization. Clarification was asked of JMU's assertion that it, as an institution, will meet the goal of 25% renewable energy by 2015 — 10 years early. Mr. Tang responded that the numbers shift with the measurements and that how one measures proportion of renewable energy used is not clear. It was also asked how, from a policy standpoint, that "25%" is the right choice if it isn’t known how to measure renewable energy as a portion of all energy. Mr. Tang asserted that 25% is a reachable goal. Mr. Newbold added that the numbers can be viewed from a consumption or production standpoint. Delegate Poindexter suggested that the presenters review an article published by the University of Massachusetts, which can be found at http://www.peri.umass.edu/fileadmin/pdf/other_publication_types/Green_Jobs_PERI.pdf. Delegate Poindexter further warned the speakers of the negative impacts that can come from a rushed or uninformed adoption of renewable standards, such as biofuels that can damage vehicle operations. Senator Whipple asked about whether the presenters had an opinion of the Waxman-Markey legislation. Mr. Tang responded that the legislation was still evolving and that the definition of renewable energy should not be crafted to cut out entire sectors such as agriculture and forestry.

John Oyhenart, CLEAResult Consulting, Inc.
Mr. Oyhenart provided the Commission with some details on the value of energy efficiency. Mr. Oyhenart suggested that there are four approaches to energy efficiency programs:

• Direct-install, which includes energy-saving and load control technologies installed by a utility;
• Educational such as ad campaigns, informational brochures, and presentations;
• Incentives-only measured as dollars per unit installed and/or savings achieved; and
• Market moving, which includes education, incentives, and pro-active steps to build infrastructure and help accelerate and sustain market adoption of energy efficiency.

There are also several models that can be adopted to administer an energy efficiency program. It could be done solely by the utility, the government, or a third-party and each model has its pros and cons. Interest in having a subcommittee looking at efficiency issues so that this topic could continue to be studied was expressed.

Next Meeting

Senator Whipple discussed funding and work plans with the Commission. The June 24 meeting was covered by special exception of the Joint Rules Committee under the current fiscal year. For the next year, the Departments of Mines, Minerals and Energy and Environmental Quality have offered to assist with expenses, although members would not receive compensation. The next meeting will be held on Tuesday, August 18, 2009, in Richmond, Virginia.

Chairman:
The Hon. Mary Margaret Whipple

For information, contact:
Ellen Porter, DLS Staff