As per Re-Energizing ... ENERGIZE AMERICA ..., the Energize America team (and all of Daily Kos) has been asked by a senior member of Congress to develop elements of the plan for introduction as legislation in the Congress. To start with, we plan to develop 5-10 concept papers, fleshed out as best we can with community input, for then working with legislative counsel and other Congressional resources to arrive at the actual legislative initiatives.
Re-Energizing ... ENERGIZE AMERICA has the full list of Energize America Acts that we plan to develop. At this time, we are still developing our team approach (volunteers, comments, other contributions VERY WELCOME) and developing the plan for strengthening the Energize America 2020 as a home base for this activity.
This is DRAFT TWO of The Neighborhood Power Act.
Join the conversation after the fold ... let us know what you think ... what we’re missing ... what is right here ...
ENERGIZE AMERICA: The Neighborhood Power Act has the first draft, with some 60+ comments to it. And, Energize America website has a pdf with version 5 of the overall Energize America 2020 concept as of June 2006.
The Neighborhood Power Act
Concept
The Neighborhood Power Act will assist state and local governments in accelerating progress in energy efficiency and renewable energy in state and local infrastructure. In particular, the Neighborhood Power Act will leverage the power of the private financial markets through structured bonds specifically targeted to provide a financial return on investment (ROI) for American taxpayers through bonds structured to produce reduced ongoing energy operating costs (financial savings) higher than the costs for repaying the bonds.
Bond programs built around energy efficiency and renewable energy already exist in the United States. San Francisco executed a $100 million bond which generates enough renewable energy and energy savings to enable paying back this bond. (See Vote Solar.) The Neighborhood Power Act seeks to accelerate local and state government execution of bond programs. It has several objectives:
- Improve energy efficiency and increased renewable power use at state and local levels – throughout the United States.
- Save local and state governments – and thus American taxpayers – money through reduced energy operating costs.
- Reduce strain on electrical systems in the United States through reduced governmental demands on the electrical system and increased distributed power generation to support local and state government infrastructure power requirements.
- Increase understanding of energy efficiency and renewable energy in the public sector – as well as in the private sector (both business and general public) through exposure to a breadth of energy efficiency and renewable energy programs.
- Increase energy efficiency and renewable energy program capacity across the United States.
Background
America’s electrical grid could be described as decaying 20th century industrial model confronting the 21st century information age. There are tremendous inefficiencies in the production, management, and distribution of electrical power.
Not only is the electrical system inefficient and polluting in the production of energy, America is (and Americans are) highly inefficient in our use of electricity (as per energy overall). There are tremendous opportunities for reduced electricity usage through efficiency – with compact fluorescent light bulbs (CFLs) literally serving as the poster child for potential efficiency.
- Lighting, today, accounts for 22 percent of US electrical use.
- As per the images from space at night, much of this lighting is inefficiently used.
- And, much of the lighting is inefficient. As per the example, Compact Fluorescent Lightbulbs (CFLs) use roughly 26% of the electricity of traditional incandescent light bulbs (that date from the days of Thomas Edison) while lasting roughly eight times longer.
- Light-Emitting Diodes (LEDs), which are penetrating into more lighting markets virtually every day, use roughly 20% of the electricity of CFLs for comparative lighting requirements. In other words, LEDs offer the potential for an over 90% reduction in electricity use from incandescent bulbs will lasting almost over 50 times as long.
- According to UC Santa Barbara's Steven DenBaars:
if 25 percent of the light bulbs in the United States were converted to LEDs putting out 150 lumens per watt (higher than the current commercial standard), the country as a whole could save $115 billion in utility costs, cumulatively, by 2025.
As a path toward understanding the potential for LED lighting – as one element of potential savings – it is worthwhile to look at the Energy Star Exit Sign Tech Sheet (pdf file). Those ubiquitous "EXIT" signs over emergency exits in public buildings use surprising amounts of energy. Older signs can use as much 350 kWh of electricity each per year, weighing in at 574 lbs of carbon. LED exit lights use 40 kWh, reducing carbon used to 72 lbs. (NOTE: there are luminescent lights appropriate for some exit sign requirements that do not require electricity. See the Energy Star tech sheet for some information.)
Let us imagine that a community has 1000 exit lights throughout its schools, police stations, office buildings, community centers, and such. Those 1000 exit lights might cost $50,000 just for the new LED lights and $10,000s more in labor costs for changing all these lights. Let us, for a moment, imagine that this is a $100,000 bill. That is a large amount for most governmental structures around the country to put into just replacing exit lights ...
But, we should consider the operating cost implications:
- The 1000 incandescent lights to be replaced would use 350,000 kilowatt hours of electricity per year while the new LED lights would use 40,000 KwH.
- If one assumes electricity at $.08 per KwH, this translates in an electricity cost reduction from $28,000 per year to $3200, making the payoff of the switch just four years just for electricity savings.
- And, this is not counting, of course, labor savings from greatly reduced (by almost several orders of magnitude) reduced requirements to change lights. This, alone, might reduce annual costs by $10,000s more.
Yet, that up front $100,000 investment is a barrier – both mental and real fiscal – preventing smart investments for the cost of operating the local government.
This is a classic COST TO BUY versus COST TO OWN challenge that inhibits smart energy choices throughout the American economy – including in state and local governments. And, the issue is far from limited to LED lighting choices.
But, financial issues are only a part of the equation.
As per this point, electricity is also a significant driver of US Green House Gas (GHG) emissions, with half of U.S. electricity coming from coal generation. Quite roughly, the average every Kilo-watt Hour (KwH) of electricity use in the United States generates 1.5 pounds of CO2 pollution. In fact, the electricity industry is the largest source of global warming pollution in the United States -- 40 percent of U.S. carbon dioxide emissions come from electric power generation. Thus, efforts to foster efficient use of electricity, more efficient power generation, and movement toward renewable (non-CO2 source) electricity generation have a large potential for reducing America’s total CO2 pollution loads. (Along with other pollution from coal-fired electricity, such as mercury.)
Back to the LED lighting example, to quote DenBaars again:
if 25 percent of the light bulbs in the United States were converted to LEDs ... That would alleviate the need to build 133 new coal-burning power stations ... In turn, carbon emissions in the atmosphere would go down by 258 million metric tons.
Inefficient use of electricity and the resultant pollution is true – sadly – with most sectors of the economy, residencies, businesses, industry and government.
Throughout the economy – whether in the private or public sector, there is a serious challenge:
- How do we balance the tight realities of today’s finances and the issue of tomorrow’s financial implications?
- This can be described as the Cost to Buy versus Cost to Own dilemma: How to get additional funds for investing today to reduce tomorrow’s costs?
The Neighborhood Power Act seeks to assist state and local governments address this dilemma for their infrastructure. It will spark accelerated investment in energy efficiency (both in energy use and energy production) and renewable energy programs in state and local buildings (and other infrastructure). And, it will do so in a path that is not simply ‘efficient’ in use of public resources, but actually profitable in reducing the ongoing operating costs for these governments, reducing pollution, and enabling better provisions of services to Americans across the country.
The Neighborhood Power Act will leverage federal government resources (expertise plus some financial) to enable local governments pursue programs for energy efficiency (reduce that waste in energy use) and local renewable energy programs (reduce the pollution for the energy that is still required) – and to do so in a way that reduces the cost of conducting business.
With this in mind, the following is a one-page summary of the act and its objectives.
The 2007 Neighborhood Power Act
Objective
To enable local communities across America deploy community-scale energy projects suited to their locale and available resources by making private, low-interest financing available with Federal government technical and (limited) matching financial assistanc.
Description
Local communities around the country have used bonds to finance energy efficiency and renewable energy programs. Structured so that the energy savings and produced energy have a greater annual value than the cost of the bond, these programs have enabled communities like San Francisco to invest in their energy future. (The Vote Solar program is a model for this effort.)
The Community-Based Energy Investment Act, the Neighborhood Power Act of 2007 will provide funding for energy-saving investments and renewable energy production via bonds that are paid off via those savings, and which lower total community energy costs. These combined energy efficiency and production programs can provide annual returns of well over ten percent, which provides a path for continuing investments in these arenas.
Structuring these bonds, however, is an expensive process requiring significant expertise and skills which many state and local communities cannot afford. The federal government shall establish a program within the Department of Housing bringing together this expertise and hiring advisors from the financial community to help local and state governments establish bond programs to fund energy efficiency and renewable energy programs. The federal government will assist in the structuring of program elements, from technical surveys, to balancing efficiency and production elements, to offering bond model options. This act will make available up to 10 percent of the project cost (matching the amount invested by the local authorities), with the balance of funding coming from the private market, thus ensuring the commercial validity of each project. The agency will help ensure that the realized energy savings can be monetized to repay the loans – e.g., the energy savings will be greater each year than the funds required to pay back the loans.
Benefits
The Community-Based Energy Investment Act will allow local communities to launch energy projects most suited to their local requirements and conditions such as weather, availability of resources, commercial or residential needs, and presence of specialized local competences or industries. By providing up to $1 billion of seed money, the Act will facilitate up to $10 billion per year of local and state investments in energy efficiency and renewable energy production.
These bonds will serve a critical purpose by using Federal, State, and Local government expenditures to spur development of expertise and private industry capabilities to meet private requirements for energy efficiency and renewable energy specialists for construction, installation, and maintenance of these new systems. The investments will also provide a strong market environment welcoming of new technologies and approaches for energy efficiency and renewable energy programs that are suitable across all the different climates of the United States.
Investment
The Federal Government will invest $1.1 billion dollars per year in the Community-Based Energy Investment Act. Approximately, $1 billion per year will be dedicated for matching funds to local and state governments. The administration of the program – including the expertise required to assist local and state governments – will have $100 million per year dedicated to it.
Additional concepts:
The Neighborhood Power Act should:
- Aim to support programs in all 50 states and, preferably, all 435 Congressional Districts and the territories.
- Foster development of local capacity for energy efficiency and renewable energy programs in multiple ways. The local government knowledge of such programs (permitting, planning, building code, building inspectors) will increase and foster strengthened building codes, eased permitting, and more competent inspection related to energy efficiency.
- Require all programs have some sort of public, visible path for understanding the payoff for the taxpayer. This can include (but not limited to) meters in the lobbies of buildings with projects that provide real-time tracking of save energy and/or generated renewable energy.
- Foster educational opportunities. Public schools (at all levels) should be particular priorities for these programs for several reasons: 1. Schools are, writ large, highly inefficient energy users. Relatively small investments will have high payoffs in reduced energy use and financial savings. 2. As well, currently, American youth are being educated to energy inefficiency. This Act can help turn this around. This should include (but not be limited to) using students to assist in tracking and analyzing savings from funded projects. (Big6 provides an example of such student analysis.) And, funding should be reserved for scholarships for students at local, state, and federal levels.
The objectives can also be phrased as follows:
- Provide an incentive path (both in terms of resources and eased process of execution) for energy efficiency/renewable energy projects in local communities across the country -- lower cost of governance through more energy efficiency; improve the infrastructure, across the nation, for energy efficiency/renewable energy projects; awareness nationally of the payoff potential
- Foster a path that will improve resiliency in the face of natural and man-made disasters by providing greater continuity of power.
- Foster paths -- nationwide -- that reduce our energy requirements while, at the same time, transitioning the electrical system to greater use of renewable power
Why might this work?
- This is profitable for local government -- but there is the obstacle of 'up front costs' (COST TO BUY) as a barrier to long term savings (REDUCED COST TO OWN). The federal matching fund should be enough to eliminate (or nearly eliminate) any upfront expenditure by the local government and improve the payoff ratio even more.
- The fear of leaving money on the table is a serious motivator for local governments/bureaucrats. The matching fund provides that motivating factor.
- The HUD-based experts in efficiency / renewable program structuring AND the structuring (writing/negotiating) of bonds reduces the capacity challenge of uncertain expertise, limited expertise resources at the local level for understanding/structuring a combined program for reaping efficiency savings.
- In terms of Congress, this should gain broad-based support as this offers the potential for resources going to every state, to every Congressional District. This is "pork" -- but a meat product that is healthy for all Americans. (This program offers a Bridge to a Better Future rather than a Bridge to Nowhere.)
DRAFTING OF LEGISLATION –
Okay, this is where the Daily Kos community could come to the rescue ... This draft is not a serious draft yet ... suggestions, development, writing in the posts will be greatly appreciated ....
SECTION 1. SHORT TITLE
The Community-Based Energy Investment Act of 2007 may be cited as the *`Neighborhood Power Act'*.
SEC. 2. FINDINGS.
The Congress finds that it is in the public interest to:
(1) Assist local governments across the United States execute energy efficiency and renewable energy projects for existing and new local government infrastructure.
(2) Assist local governments reduce energy operating costs.
(2) Encourage the development of private capacity for renewable energy and energy efficiency programs throughout the United States.
(3) Promote pursuit of energy efficiency and renewable energy in the public and private sectors.
(4) Provide opportunities for American youth to learn about renewable energy and energy efficiency to foster greater understanding of energy as a critical issue of concern through the 21st century.
(5) Stimulate economic growth.
(6) Enhance the improved energy efficiency in the American economy along with continued diversification section of energy resources used in the United States.
SEC. 3. COMMUNITY RENEWABLE ENERGY AND ENERGY EFFICIENCY PROGRAM.
[note: assistance required in determining relevant laws to be changed/amended]
DEFINITIONS:
- Energy Efficiency Retrofit: Programs undertaken to improve performance of existing structures or infrastructure.
- Energy Efficiency Design: Design and implementation costs for developing infrastructure in accordance with U.S. Green Building Council (USGBC) Leadership in Energy and Environmental Design (LEED) standards.
- Fossil Fuel Energy Efficiency: Retrofit to existing fossil-fuel systems that bring them in line with Energy Start + 10% guidance for heating and cooling systems. Or, the installation of energy efficient fossil fuel systems that meet guidance for federal tax credits for energy efficiency by home owners and businesses.
- Fossil Fuel Energy Efficient Power Generation: High-efficiency power generation, such as the use of Combined Heat and Power (CHP) systems.
- _Renewable Energy: Energy generation from renewable energy sources including, but not limited to: solar, wind, geothermal, traditional hydropower, new hydropower (wave, tidal), geothermal, and biomass.
The Neighborhood Power Act:
- Establishes a ten-year program to support local and state government bond programs seeking to make public infrastructure more energy efficient and with a greater reliance on energy efficiency programs.
- $1 billion dollars per year in matching funds.
- No greater than $100 million per year for federal government management of the program
- Federal matching funds to represent no more than ten percent of total program value.
- No single state shall receive more than ten percent of the program’s value in any calendar year. No single state shall receive more than 5% of the program’s total value over any four-year period and over the ten-year program life.
- Programs eligible for these bonds will combined energy efficiency retrofit of existing infrastructure, energy efficient design and construction (new facilities), fossil-fuel energy efficiency, fossil fuel energy efficient power generation, and renewable energy programs. Fossil-fuel related energy efficiency and energy efficient power generation will not comprise more than twenty-five (25) percent of any specific bond program nor greater than fifteen (15) percent of aggregated bond value.
- With Federal Government assistance from the Department of Housing and Urban Development, these programs will be structured so that financial savings from the energy efficiency and renewable energy generation will be greater than annual bond repayment requirements.
- No less than an equivalent of .25% of total bond value will be set aside each year, for a minimum of 15 years, for assessment monitoring using local community student programs, scholarships for local students related to energy efficiency and renewable energy, and for other educational programs.
- Directs the Secretary of the Department of Housing and Urban Development
- to develop, within three months of its enactment, draft guidelines for public comment on execution of the Act’s provisions. The draft guidelines are to be provided, as well, to the Conference of Mayors and to all Governors for their comment and contributions.
- Following a 45 period of public comment, to publish no later than six months after enactment application guidelines for state and local governments to seek matching funds for bond programs.
- Initial disbursement should be available to state and local governments no later than nine months after this law has been enacted.
- Directs the Secretary of the Department of Energy, the Secretary of the Treasury, and the Secretary of the Department of Agriculture to provide expertise support to the Department of Housing and Urban Development for execution of the Act’s provisions
Please note that the
Energize America 2020 team is well aware of the numerous and tremendous plans for a better energy future such as the Apollo Alliance and the NRDC's A Responsible Energy Plan for America. As far as our work has discerned, the concepts of The Neighborhood Power Act are unique -- especially in the focus of leveraging minor assistance from the Federal Government to spark energy efficiency and renewable energy programs throughout state and local governments across the United States.
Clearly, The Neighborhood Power Act is a work in progress ... please help it progress ....
NOTEs:
- For background, see also Jerome a Paris' truly excellent Energize America coming to Congress. You can help.
- The EA2020 (still developing, re-energizing) team is forming a concept that different individuals will take lead responsibility for individual acts. Look at Re-Energizing ... ENERGIZE AMERICA ..., see if you want to get involved in a greater way than simply providing magnificent comments in posts. Join the team ... and, perhaps, take the lead on part of the effort.