By EDF Blogs

Source: Iwan Baan

By: Rory Christian, Director of New York Smart Power, and Mary Barber, Director of Smart Power Initiatives

It was only a year ago that the most devastating storm the Northeast has ever seen slammed into the region. Hurricane Sandy pummeled the states of New York and New Jersey, destroying homes and businesses and knocking out electricity for millions of families for days, weeks and – in some cases – months.

The unprecedented situation shined a much-needed spotlight on the vulnerability of our century-old energy infrastructure, placing the issue front and center for the region’s state and local leaders, electric utility companies and regulators, particularly as climate change increases the frequency of extreme weather events.  Utilities in the region have since begun to fortify flood-prone substations among other reinforcements to the power grid, but improvements that are ‘status quo’ are only part of the solution to future challenges.

Ensuring the adoption of technologies and policies that move the U.S. power grid into the 21st century, making it more resilient, flexible and smarter, can simultaneously accomplish today’s goals while preparing for future challenges – some of which may not yet be apparent.  EDF is working closely with stakeholders to find innovative and pragmatic solutions to help modernize our aging energy infrastructure, an improvement that is crucial to resiliency, safety and storm recovery.

Modifications to existing rules and policies would allow for more distributed, renewable energy, demand response, energy efficiency and clean energy technologies that improve the environment, reduce harmful pollution and incent and empower customers to take control over their own energy use and lower their electricity bills. One such existing innovation is “demand response,” an energy management solution that provides financial incentives to customers who lower their energy use.  Demand response puts consumers in charge of their own electricity bills by avoiding running energy-intensive devices (like water heaters for example) during periods of peak, or high, energy demand, or by shifting their use to a different time of day.  This approach rewards those who reduce electricity during peak times by paying customers a market-based price for their actions, resulting in more money in peoples’ pockets, a more stable and reliable electric grid and less harmful pollution from fossil fuel-fired power plants.

Also, we cannot overlook the need for an engaged private sector to drive us toward the most creative, innovative energy solutions.  Though significant public funds are being allocated to repairing damage by Sandy and preparing for adverse weather in the future – nearly $50 billion has been pledged in total government funds – government largesse should not be the only answer to the challenges faced by our country’s outmoded power infrastructure. The private sector’s involvement in the energy industry can be mutually beneficial. The energy industry can benefit from the influx of private capital as well as financing tools developed by the private sector, while private players will certainly benefit from investment opportunities in emerging markets.

For example, EDF has developed and is promoting on-bill repayment (ORB), an innovative financing tool that allows home and building owners to finance energy efficiency and renewable energy projects through funds provided by qualifying financial institutions that can then be repaid over time through a customer’s utility bill.  The up-front costs for an upgrade such as the installation of energy-efficient windows comes from private sector lenders at no cost to customers.

EDF has been contributing to this body of knowledge and we are already seeing progress across the Northeast as decision makers act to make their regions more resilient.  Earlier this month, New Jersey Governor Chris Christie allocated $25 million in federal funds to local governments to develop alternative energy projects designed to make the state’s power infrastructure resilient and reliable during widespread electrical outages. In New York, EDF is working with Governor Cuomo’s administration on establishing a “Green Bank” that would transform clean energy markets by filling market gaps in financing for renewable energy and energy efficiency projects in the state.

It will take time to transform the large and complex power generation industry.  But we are beginning to see encouraging movement toward the goal of a cleaner, smarter and stronger energy infrastructure that will not only reduce harmful global warming pollution, but also protect us against future extreme weather events arising from climate change.

By dbwalker

 This commentary originally appeared on EDF's California Dream 2.0 blog.

With the stroke of a pen, North American efforts to combat climate change and promote clean energy reached a new level today.

I was lucky enough to witness the historic event, as Governor Jerry Brown joined the leaders of Oregon, Washington State and the Canadian province of British Columbia, to sign an agreement that formally aligns climate and clean energy policies in the four jurisdictions.

This signing by these “Fab Four” of the Pacific Coast Collaborative makes sense given all they have in common: they’re geographically connected, share infrastructure, and their combined regional economy accounts for a $2.8 trillion GDP, making it the world’s fifth largest economy.

Beyond the symbolic nature of today’s announcement, the event signals California’s far-reaching influence on energy and climate policy development.

Once labeled the “go it alone” state, California is now succeeding with its “lead by example” approach.

What has driven this success? Most recently, the Golden State established the world’s most comprehensive cap-and-trade program, a proven and environmentally and economically sensible approach to limiting greenhouse gas emissions. Once considered a “grand experiment,” its early success has helped to establish a strong, viable market and spur interest from around the world.

Today was no exception, as business, labor and environmental leaders from all four jurisdictions joined the signing, signifying a strong regional commitment to putting a price on carbon, using market mechanisms to spur a clean economy and reduce pollution on a regional scale.

The agreement is also further proof that strong climate and clean energy policies are tied to economic benefits, creating a large market for innovators and low-carbon businesses in the region. California is on the brink of linking its cap-and-trade program with Quebec’s; making the two states’ carbon allowances interchangeable and showing growing carbon market momentum.

Today’s event is a beacon of hope for national and global action to fight climate change.  While the four parties in this agreement are in different stages in putting a price on carbon, their combined commitment is a positive sign and further impetus for regional and international collaboration. The vision of these four leaders – along with California’s proven record of success – makes me very optimistic that we are on the right path.

By John Finnigan

In the 1983 thriller War Games, Matthew Broderick plays a teen-age computer geek who unknowingly signs onto a Pentagon computer while hacking into a toy company’s new computer game. Thinking that he’s simply playing a game called Global Thermonuclear Warfare, Broderick launches the game and nearly starts a nuclear war.  The North American Electric Reliability Council (NERC) will hold its own war game next month with a simulated attack on the U.S. power grid.

The drill, called GridEx II, will take place on November 13-14 of this year. The participants will include 65 utilities and eight regional transmission organizations, representing most of the nation’s electricity customers.  The drill will test how well the electric utility industry and the grid itself respond to physical and cyber attacks.

A NERC Critical Infrastructure Protection Committee (CIPC) working group will begin the drill by sending participants a series of simulated physical and cyber attacks, climaxing in a national security emergency.  Participants will then respond and interact with each other, just as they would in a real emergency.  The simulation will last 36 hours, and the CIPC working group will evaluate the participants’ responses and provide feedback on how their actions impact the ongoing scenario.  After the drill, the working group will analyze the results and prepare a report on lessons learned.

The drill is timely.  Our nation’s power grid is under constant cyber attack, according to a survey of electric utilities by U.S. House Representatives Henry Waxman and (now Senator) Edward Markey. James Clapper, the Director of National Intelligence, described cyber attacks as a soft war that is already underway and a dire global threat in his April 2013 World Threat Assessment of the US Intelligence Community.  The Department of Homeland Security investigated over 200 serious cyber attacks against critical facilities during the first half of 2013, and more than half of these targeted the grid.

Adequate Investment

The U.S. has developed a number of cyber security protections for the grid, but we must do more.  Our country needs to make adequate investments in cyber security.  With the huge budget deficits that the U.S. has incurred in recent years, the proper level of government spending is often at issue.  Given the devastating consequences of a cyber attack on the grid, this is one area where we can’t afford to cut corners.  Our leaders must ensure that federal budget cuts do not impair the Department of Energy’s and the Department of Homeland Security’s means to protect our nation’s critical energy infrastructure from cyber attacks.

Broader FERC Authority

We also need legislation granting the Federal Energy Regulatory Commission (FERC) broader authority to protect against cyber attacks.   FERC is charged with protecting the grid against cyber attacks, but it doesn’t have the legal authority it needs to do so.  FERC has pleaded with Congress to fix this oversight.

The Federal Power Act grants FERC authority over the bulk power system, but most of the smart grid equipment that creates vulnerabilities is installed on local distribution systems beyond its jurisdiction.  As a result, the National Institute of Standards and Technology (NIST) has put together a three-volume set of smart grid cyber security standards – but these standards are voluntary.  FERC is working with the National Association of Regulatory Utility Commissioners to monitor whether utilities are following these voluntary standards, but this is not enough.  The threat of grid cyber attacks is too real, and the potential consequences too dire.  The NIST standards should be mandatory and FERC’s authority should extend to critical distribution infrastructure that puts the bulk power system at risk.

Any new legislation should empower FERC to act proactively.  FERC should have the means to take timely actions to counter clear and present dangers as they arise.  Unfortunately, NERC’s process for adopting cyber standards is slow and unwieldy.  Because FERC’s present jurisdiction is passive in nature, it can only approve standards developed by NERC.  Congress should expand FERC’s authority to act in case of emergency.

Coordinated Enforcement

The appropriate boundary between federal and state control over electricity service has been disputed for over a century, since Thomas Edison’s day.  And, until recently, the manner of providing electric service had not changed much since Edison’s era.  The smart grid is beginning to modernize our energy infrastructure by marrying the Internet to the electric grid.  Just as the Internet is a matter of interstate commerce, so are critical smart grid facilities that could disrupt the bulk power system.  We can ease jurisdictional tensions by following an existing model that uses a federal-state partnership to enforce federal standards – interstate pipeline safety.

Interstate pipeline safety standards are established by the Pipeline and Hazardous Materials Safety Administration (PHMSA), a branch of the Department of Transportation.  Although the PHMSA sets the standards, any state can assume responsibility for enforcing them within their borders.  The state simply needs to follow the federal standards at a minimum and apply the same enforcement penalties.  While not perfect, this federal-state partnership has generally succeeded in ensuring pipeline safety in a cost-effective manner.

Information Sharing

We also need legislation to enable better practices for sharing information about cyber threats.  At the moment, we have two venues where the government and utilities voluntarily share this information:

• the Department of Homeland Security National Cybersecurity and Communications Integration Center (NCCIC); and
• the NERC Electricity Sector – Information Sharing and Analysis Center (ES-ISAC).

Perhaps a better approach would be to establish a new, independent organization to act as a single clearinghouse for cyber security threats.  Today, government agencies share alerts and notifications about impending cyber threats.  But the information often fails to provide sufficient detail for the private sector to take action.

Government employees should be allowed to share sensitive details as necessary, to protect against a cyber attack.  As a matter of security, the utility personnel who receive this information should be screened for the appropriate level of national security clearance.  If electric utilities are required to share confidential information, it should not be disclosed beyond these groups.  Many of these concerns are addressed in the Cyber Intelligence Sharing and Protection Act of 2013. The House passed this bill on April 18, 2013 by a 288-127 vote.  The Senate should pass this bill too.

Electric Utility Commitment

Finally, utilities should commit to following cyber security best practices, rather than doing the bare minimum.  NERC publishes voluntary cyber security recommendations, but only 20% of electric utilities follow these recommendations. Utilities seek to provide safe, adequate and reliable service in a cost-effective manner.  They should add cyber security to this credo.  To facilitate this, state utility commissions should allow timely recovery of cyber security costs.

Hopefully, NERC’s war game simulation will have a happy ending like the 1983 film.  If we don’t do more to strengthen our vulnerable grid’s cyber security, we could be writing our own screenplay for a disaster movie.

By Rachel Neil

This commentary originally appeared on EDF's California Dream 2.0 blog.

It sounds like the opening line of a joke: What can finance do to reduce inequality?

However, this is exactly the question I tried to tackle during my presentation at the Clean Power, Healthy Communities conference last week. Hosted by the Local Clean Energy Alliance, this annual conference focuses on equitable, community-based clean energy solutions for the Bay Area.

In keeping with this theme, I took the opportunity to explain how On-Bill Repayment (OBR) can increase access to energy efficiency and distributed generation installations for low and middle-income families. By overcoming cost barriers, OBR can deliver energy savings, cost savings, jobs and more comfortable and healthy homes to underserved communities. In addition to these tangible benefits, it offers residents greater control over energy generation, as well as their energy consumption.

While I was able to share EDF’s finance work with community organizers and other environmental advocates, the conference was also a chance to hear about and discuss variety of other community-based solutions. One initiative that OBR has tremendous potential to support and complement is community-owned solar. Signed into law in September, California’s Senate Bill 43 allows for shared ownership of renewable generation. This means that individuals who are unable to install solar panels at their residences can invest in an off-site solar system, and receive credit on their utility bill for their share of the power generated.

OBR could support community-owned solar by helping low-income households finance the subscription cost, also through their utility bill. This simultaneously provides convenience for customers, and increases solar providers’ confidence in low-income subscribers’ ability to repay. Residential OBR programs would require the savings from solar generation to exceed the subscription cost, ensuring lower net utility bills for struggling consumers.

As EDF continues to develop energy financing opportunities like OBR, partnerships with local organizations and advocacy groups are essential. Moving forward in California and other states, EDF hopes to tailor OBR to complement local initiatives, like community-owner solar, to ensure that OBR deliver results for underserved communities.

So, what can finance do to reduce inequality?

Punch lines aside, it can increase access to cleaner, cheaper energy, deliver investment and jobs, and expand the opportunity to own renewable generation technology to credit-strapped communities. By working with local partners as we develop financing tools like OBR, EDF can help shift the energy economy towards a more sustainable and equitable future.

By Mary Barber

When Hurricane Sandy barreled through our country’s Northeast nearly a year ago, ravaging coastlines and submerging entire neighborhoods, New Jersey suffered catastrophic effects.  The state suffered more than $30 billion in damage, most of it along the Jersey shore, while an estimated 2.6 million households lost power, many of them for weeks.  Five days after Sandy hit, a third of New Jersey’s homes and businesses still did not have electricity.

New Jersey Governor Chris Christie immediately sought to restore the state’s most vital infrastructure and was tireless in attracting funds for the relief effort.  However, it became clear that it was imperative to not just repair damage caused by Sandy but to upgrade and modernize the state’s outmoded, century-old grid to prevent damage from the next superstorm.

Last week, Governor Christie took a positive  step toward upgrading to a smarter, more flexible  power grid, which is crucial to resilience, safety, and storm recovery.  He announced the allocation of $25 million in federal funds to local governments to develop alternative energy projects designed to make New Jersey’s energy infrastructure resilient and reliable in the face of power outages.

Source: Greenpeace – Tim Aubry

The state of New Jersey, the U.S. Department of Energy’s National Renewable Energy Laboratory, and the Federal Emergency Management Agency, have worked together to identify technologies that will make critical facilities more resilient and able to operate in the event of a power outage.  We believe this unique model can be used nationally as the country faces more and more extreme weather events as a result of climate change.

EDF is advocating for more investment devoted to making the state’s power grid more resilient and reliable.  This funding is a step in the right direction to make New Jersey’s energy infrastructure cleaner, smarter and stronger than ever.

By Jon Goldstein

Everyone wins when states institute strong, science-based groundwater testing programs around oil and gas development areas. Landowners get important information about their water quality and protection from potential spills. Oil and gas companies get what is essentially an insurance policy tracking the quality of area drinking water sources both before and after drilling. And regulators get an important new source of data to help them understand local conditions and target clean up, if needed.

EDF has advocated for a program in Wyoming that aims to do exactly this – establish a groundwater quality baseline in areas where oil and gas development is planned, and then follow up with two sets of tests to monitor for potential impacts from this specific activity. And Wyoming regulators have proposed a program that would, on the whole, create a strong, scientifically valid groundwater testing program.

Late last week, Wyoming’s powerful paper of record, the Casper Star-Tribune, announced it agrees.

In an editorial published Friday, the paper says “It’s go time” for groundwater testing in Wyoming. Acknowledging that this program will create what is so often missing in debates around environmental pollution – hard, empirical data on which to base decisions and draw conclusions – the paper offers its support for the proposed program.

All sides agree this is an effort whose time has come. The editors go on to  quote the Wyoming oil and gas industry’s trade association on the topic, “it’s probably 10 years overdue,” said John Robitaille, vice president of the Petroleum Association of Wyoming.

While we agree that Wyoming’s framework is a strong one, there are still a few issues that deserve attention as this issue moves toward final consideration at the Wyoming Oil and Gas Conservation Commission (WOGCC) on November 12. Based on earlier industry comments, the WOGCC has made a few changes to the draft version of rule. At least two of these changes, weakening testing levels for dissolved gases and inserting a “master plan” concept that could subvert the rule’s strong, well-by-well analysis approach, could be problematic. These can and should be improved as the rule moves forward.

As we’ve said before, a small investment in better groundwater knowledge is money well spent. Now’s the time to finalize a program that will give all involved the vital water quality facts on – and under — the ground.

By Mark Brownstein

Source: San Antonio Business Journal

This year is proving to be a big year for methane research.  We’ve seen a handful of new studies published, some funded by EDF and some not, as well as new projects announced.

The attention methane is getting by the scientific community is justified and overdue. Methane emissions are a central issue in the debate over the role that natural gas may play in our national energy future. Ounce for ounce, methane is 72 times more powerful than carbon dioxide (CO2) when released into the atmosphere over the first 20 years.  And according to new projections by the Intergovernmental Panel on Climate Change (IPCC), methane is far more potent than we realized (as much as 84 to 87 times more potent than CO2 on a 20-year basis).

The oil and natural gas industry is the single largest source of manmade methane emissions in the United States. Despite this, little is known about how much methane is released from where across the natural gas supply chain. But, according to the Environmental Protection Agency’s latest estimates, we know enough to say that methane poses a serious problem to the climate.

Reducing methane emissions is critical. However, effectively doing so depends on our ability to pinpoint potential emission sources – a key driver behind EDF’s methane research series. This overall effort will result in roughly 16 different studies and involves more than 90 universities, scientists, research facilities and natural gas companies. The study announced this week is focused on gathering infrastructure and processing plants, and with this news, EDF now has helped catalyze different projects in all parts of the natural gas value chain, from the well-head to end users like local distribution companies and natural gas vehicles and fueling stations.

Dr. Anthony Marchese, Colorado State University (CSU) mechanical engineering professor and director of the CSU Engines and Energy Conversion Laboratory is leading this new study. CSU will begin collecting data this week from potential methane sources associated with natural gas midstream gathering and processing facilities with access to equipment and sites around the country provided by participating companies. Over the next six months, measurements will be made at more than 100 different sites in 12 states.

In addition to EDF, sponsors of the $1.9 million study include Access Midstream, Anadarko Petroleum Corp., Hess Corp., Southwestern Energy Co. and Williams Partners Operating LLC. DCP Midstream is also allowing the study team access to sites. The results of the CSU study, anticipated in mid-2014 and subject to publication in a scientific journal, will be linked to other studies already underway to help provide a clearer picture of system-wide methane emissions.

We are in the very early stages of this effort and there is much yet to learn –but momentum is building. I led part of a discussion yesterday at Colorado State’s 2013 Natural Gas Symposium with leaders from the energy industry, environmental community and government around natural gas issues, in which methane was a key topic discussed. It is also a topic currently on the mind of Colorado air quality rule makers.

Natural gas, done right, has climate advantages but only if we minimize methane to the lowest possible extent. From what we learned from the UT production study, announced several weeks ago, we know there are opportunities to achieve significant emission reductions. Now we just need to put the data we have to work. Urgent action is essential, even as we learn more. The condition of our immediate climate future depends on it.

By Greg Andeck

Duke Energy is the largest utility in the United States, so of course it gets a lot of attention in its home state of North Carolina.  Yet millions of residents in rural parts of the state rely on electric cooperatives, not Duke Energy, to keep the lights on.  In fact, rural cooperatives serve all or part of the customers in 93 of 100 counties in North Carolina.

This is important because rural areas have just as much, if not more, need to increase energy efficiency.  Case in point: a seven-county area in eastern North Carolina served by Roanoke Electric Cooperative.  The cooperative has made great strides in promoting energy efficiency, yet there are still customers with utility bills that are higher than their mortgage payments some months.  Close to half of Roanoke Electric’s customers live in manufactured homes, which typically have less energy-saving insulation than standard homes.  And, in an economically-distressed region, few homeowners have extra money to pay for energy efficiency improvements, like caulking around windows or adding insulation.

Now, thanks to a new program offered by Roanoke Electric Cooperative, homeowners can secure low-cost loans from a private lender to make home improvements that will reduce energy use and save money.   The loan is paid back on the monthly utility bill, reducing paperwork for homeowners and making repayment easier.  In this program, the energy efficiency home loan is made by Generations Community Credit Union, a lending institution focused on assisting underserved rural communities in North Carolina.  Homeowners can borrow up to $4,000 for improvements, with interest rates as low as 3.5%.

Source: OERB

The program represents a unique public-private partnership between the electric cooperative, the credit union and Environmental Defense Fund.  It is the first on-bill finance program in North Carolina to use private capital for energy efficiency retrofits.  Existing on-bill finance programs in the state typically rely on utility funds or shrinking federal funding.

Unlike some other on-bill programs, this program does not tie the loan to the meter, allowing lenders with different underwriting criteria to participate.  It also limits funding to energy efficiency improvements with expected energy savings paybacks over the five-year maximum loan period.  Estimates show that homeowners can save up to 20% on energy bills, which will help offset the cost of the loan.

Because this program relies heavily on private, not taxpayer funds, there's a good chance it could spread to electric cooperatives across North Carolina, as well as those in other states.  Hats off to Roanoke Electric and Generations Credit Union for being the first in North Carolina.

By Mark Brownstein

Here we go again.  In recent weeks, we have seen both Senator David Vitter and American Petroleum Institute President and CEO Jack Gerard attempt to mischaracterize the results of the groundbreaking University of Texas at Austin (UT) methane emissions study, preferring self-serving sound bites over an honest read of the data.  And now we are seeing another misinformation campaign coming from Americans for Tax Reform.

In his October 2nd Forbes op-ed, Christopher Prandoni, Federal Affairs Manager for Americans for Tax Reform, uses the UT study to disparage new efforts by the State Department to address methane leakage from the natural gas system.  Prandoni wrongfully claims that the UT study “calculated that average emissions were almost 50 times lower than Environmental Protection Agency (EPA) estimates,” and that nothing further needs to be done about methane emissions.

Prandoni’s read of the UT study results couldn’t be further from the truth.  Total emissions from the production sector were found to be in line with the current EPA estimates, not 50 times lower.  Yes, the UT study did report some good news.  Methane emissions from the stage of extraction known as well completions were lower than EPA estimates.  Unfortunately for Prandoni’s argument, these lower-than-expected results were because of new green completion technologies (an emissions control method that routes excess gas to sales), soon to be required by the EPA for all new hydraulically-fractured natural gas wells.

Other measurements taken by the UT study team were actually higher than EPA estimates.  Methane emissions associated with equipment used to control routine operations at well sites were 63 percent higher than current EPA estimates.  Fugitive methane emissions — unintentional leaks from piping, valves, separators and compressors — were 38 to 69 percent higher.  And emissions from chemical injection pumps used at the wellhead to keep pipelines flowing were 100 percent higher than EPA estimates.

As we’ve cautioned since its release, the UT study measured only the production sector, and is not the final word on methane emissions from the entire natural gas supply chain.  It’s just the opening chapter.  Yes, there is some good news in the data, but counter to what Prandoni and Americans for Tax Reform would have the public believe, its news that supports the ongoing efforts of the EPA and the natural gas industry to reduce methane emissions.  The State Department got it exactly right and it is time for the Obama Administration to act.

By Paul Stinson

Last month, the Wall Street Journal reported on an initiative at an increasing number of companies nationwide: on-site, or distributed, power generation. There are many reasons for this growing trend in corporate sustainability, along with many ramifications for the prevailing utility model in the United States – all of which highlight the importance of employing market-based solutions to create a cleaner, smarter, more resilient electric system.

Why Do Companies Unplug?

For companies such as Walmart, increasing the use of distributed, renewable generation is a vital part of larger sustainability goals, including increased use of clean energy and a call for safer ingredients used in the products the company sells. To be sure, however, even the most altruistic companies would be hard pressed to shift off the power grid without sound economic reasons.

A confluence of market factors, including tax incentives that spur attractive returns on investment, advances in solar and wind technologies and policies that encourage greater use of and investments in clean energy (like net metering and time-of-use pricing), has created an economic environment that makes distributed generation not just a viable option, but often a very attractive one. Further, off-grid power can be an effective way for companies to hedge against outages due to storms or unforeseeable catastrophes, a key idea included in the Hurricane Sandy Rebuilding Strategy.

What About Utilities?

FERC Chairman Jon Wellinghoff, speaking in April at a high-level meeting hosted by the Princeton Energy and Environment Corporate Affiliates Program, called the situation “a monumental challenge.”

As distributed generation becomes more common, utilities face unprecedented economic threats, summarized in a blunt report from the Edison Electric Institute (EEI) earlier this year. NRG Energy CEO David Crane has likened the outlook for utilities to the plight of the U.S. Postal Service, warning of a downward spiral where increased distributed power cuts into regulated utility revenue, in turn forcing utilities to raise rates, thereby driving more customers to off-grid generation.

Source: Walmart

What’s Next?

Speaking at the same Princeton meeting in April, EDF’s own Mark Brownstein noted that "there is no shortage of academic studies that envision a future of distributed generation and large-scale renewable deployment." But while distributed generation grows, utilities still look to dominate the power business for years to come. That’s why it is imperative that we keep working with all parties to put the right rules in place for a smarter, more flexible energy system.

America’s Power Plan calls for encouraging distributed generation though fair economic incentives and clear cost-allocation methods, while moving toward new regulatory and business models for utilities that separate revenues from the amount of electricity sold. We must work toward this new energy paradigm by aligning incentives for utilities and customers, and advocating for new financing mechanisms, such as on-bill repayment, to promote clean, distributed energy investments. We must continue to modernize our outdated electric grid to accommodate new, on-site, clean power sources.

While changes to the existing energy system may be incremental, these types of market-based solutions are the most effective path toward a cleaner, smarter energy future.

By Kate Zerrenner

This commentary originally appeared on EDF’s Texas Clean Air Matter blog.

Source: Architect Magazine

The Solar Decathlon, a competition that challenges colleges across the nation to design and construct efficient, affordable and attractive solar powered-home, is taking place October 3-13 at Orange Country Great Park in Irvine, California. The bi-annual event, organized by the U.S. Department of Energy (DOE), awards the team that excels in combining cost-effectiveness, consumer appeal and energy efficiency into a state of the art home. But like many competitions, the real winners are those that pursue the challenge long after the bout ends, and this decathlon is no exception. Year after year, students graduate and form the next wave of clean energy entrepreneurs, engineers and architects looking to advance energy efficient homes.

This year, the University of Texas at El Paso and El Paso Community College have joined forces to create Team Texas. The last time a Texas university participated in the Solar Decathlon was in 2007, when the University of Texas at Austin and Texas A&M University competed as two separate teams.

This year Team Texas has submitted ADAPT, a house that reflects the nature of the two universities’ homestead, El Paso. Its design maximizes the use of solar energy, an abundant resource in the Southwest, and is meant to feel natural on a mountain plateau, high desert or green farmland.  ADAPT embraces the belief that “a home is not just a location or state of mind but a place where the heart is”.

The event itself is open to the public and free of charge. Visitors can tour the houses, get inspiration for their own homes and discover the benefits of energy-efficiency and self-generation. Following the Solar Decathlon, ADAPT will be housed on the El Paso campus and used for a variety of educational and social events.

The Lone Star State’s renewable energy potential is the largest in the nation, with abundant wind and solar resources across the state’s vast landscape. Traditionally, Texas has been an international leader in the oil and gas industry, but in the past decade Texas has made an important effort to increase investment in clean energy for a sustainable future. Universities and colleges are a prime asset in this clean energy focus, which is why the Solar Decathlon and other collegiate research opportunities are so important.

This past July, Texas Tech University established a new wind energy research facility in partnership with Sandia National Laboratories, an extension of the DOE, and with wind turbine manufacturer Vestas. According to Texas Tech researchers, ten percent to 40 percent of wind energy production is lost due to complex wind plant interaction. To create accurate predictions of power output, developers need to know how large numbers of wind turbines may interact with each other in a range of weather conditions. The Scaled Wind Farm Technology (SWiFT) facility tests and monitors the turbines to help operators address these issues and increase productivity for large wind farms.

While the end goal here is to make wind farms more productive, these efforts will also help cement Texas’ position as a leader in wind energy innovation. Similarly, Texas A&M University-Central Texas recently announced a collaboration with the Center for Solar Energy. As partners they will work to develop and test new technologies for solar power, with the goal of attracting new investment. Given the great solar energy potential in Texas, EDF is keen to see the expansion of non-wind renewable energy in the state. When completed, the $600 million center will span close to 800 acres and power the Texas A&M – Central Texas campus.

By advancing research in clean energy technologies, universities play an active role in contributing to the economic growth of the state. Students will continue their clean energy success outside of the classrooms to further their careers in a profession that is both sustainable and booming. Team Texas is hopeful that their work for the Solar Decathlon will set a new standard of energy efficiency in the El Paso community and the state. Here at EDF, we are big fans of the Solar Decathlon initiative; it not only spurs clean energy innovation, but also creates a spotlight for future innovators, especially in sunny, breezy Texas.

By Victoria Mills

This commentary originally appeared on EDF’s Climate Corps blog.

The world’s top scientists reminded us last week that the case for action on climate change has never been more urgent.  And turning the corner on carbon emissions and avoiding the worst impacts of a warming world will require nothing less than a full-scale transformation of our energy system.  That is a huge political, technological and cultural challenge – one that no individual, organization or country can solve on its own.  It will take the leadership and collaboration of people across the world, pulling together toward a common goal.

Environmental Defense Fund (EDF) has a staff of 400 – small in the global scheme. That is why we are experts at deploying powerful networks to get results. Our success with businesses – whether it’s improving the safety of products sold at Walmart, or saving water at AT&T – all rest on our ability to tap into the knowledge, connections, and influence of our partners.

One of our most successful networks: EDF Climate Corps.  Hundreds of organizations ranging from PepsiCo and Office Depot to the Chicago Public Schools and New York City Housing Authority have tapped EDF Climate Corps for energy strategies and solutions that cut costs and emissions.  And best of all, our hosts and fellows are now spreading these innovations through their own networks, creating a multiplier effect that expands our impact exponentially.

Case in point: EDF Climate Corps fellow Jenise Young spent this summer working with professors and administrators at Texas Southern University (TSU).  She learned that minority communities, like those surrounding TSU, are already experiencing the effects of climate change. This inspired Young to help develop a climate education consortium for historically black colleges and universities (HBCUs) across the Southeast. In addition to identifying energy efficiency upgrades on TSU’s campus, Young helped the dozens of HBCUs in the region see why they should invest in such upgrades too.

EDF Climate Corps fellow Kate Daniels worked with the Mayor of Sacramento on one of the nation’s largest Property Assessed Clean Energy (PACE) projects, which uses innovative financing so that property owners can invest in energy upgrades. Daniels tapped into a network of community leaders to expand this initiative across the city.  Beyond immediate energy cost savings, the project is expected to deliver a huge economic boost to the region, as energy retrofits keep contractors busy and facility upgrades attract and retain businesses – all without spending public dollars.

EDF Climate Corps is bringing a networked approach to saving energy in Chicago, where buildings account for 70 percent of the city’s greenhouse gas emissions.  We’ll provide boots the ground to help building owners enrolled in Retrofit Chicago meet their commitments to cut energy use by 20 percent over the next five years.  We’ll bring building owners together to share their energy challenges and solutions.  And we’ll engage utilities, vendors and other partners essential to transforming the regional energy system.

We’re building a similar network in Boston in collaboration with the Boston Green Ribbon Commission, and our work in these cities represents a microcosm of what EDF Climate Corps can do nationwide.  We are weaving a web of connections among the people who have the power to transform the energy system:  large energy consumers, passionate young professionals, policy makers, utilities and our colleagues in the environmental community.  By forging connections and collaboration with and among these key players, we will create change on a scale that is equal to the challenge at hand.

About EDF Climate Corps
EDF Climate Corps (edfclimatecorps.org) taps the talents of tomorrow’s leaders to save energy, money and the environment by placing specially-trained EDF fellows in companies, cities and universities as dedicated energy problem solvers. Working with hundreds of leading organizations, EDF Climate Corps has uncovered nearly $1.3 billion in energy savings. For more information, visit edfclimatecorps.org. Read our blog at edfclimatecorps.org/blog. Follow us on Twitter at twitter.com/edfbiz and on Facebook at facebook.com/EDFClimateCorps.

By Jon Goldstein

Source: Scott Dalton for The New York Times

When it comes to healthy air, what you can’t see can hurt you.

Leaks of volatile organic compounds (VOC) and methane, the primary components in natural gas, may be invisible – but that doesn’t mean they are harmless.  These leaks – called “fugitive” emissions – can create serious air quality problems when VOC's are involved. Meanwhile, methane leaks mean less product available for sale and a wasted resource.

But, while you can’t always see leaks with the naked eye, you can use modern technology to help you detect and fix them.  Cameras that use infrared technology to “see” leaking hydrocarbons and inexpensive hand held sensors that measure leaks are commonly used to help operators find and fix leaking equipment.  Leak Detection and Repair (LDAR) programs that require operators to check for leaks frequently using these modern technologies, and expeditiously repair them, can produce huge air quality benefits.  Such programs are currently required in permits for a number of operators in Wyoming’s Jonah Pinedale Anticline Development Area.

Wyoming regulators are working on a proposal to expand this requirement by mandating LDAR programs across the Upper Green River Basin, where ozone pollution fails to meet federal health-based standards.  The Wyoming program, which was presented to the state’s Air Quality Advisory Board last week, is an excellent start. This program, with one important modification, will help the state improve the air quality and health of local residents and start to catch more “fugitives” – which are the second biggest source of VOC emissions in the UGRB and projected to be the largest source of VOC emissions in Southwestern Wyoming by 2015.

Admittedly, this may seem like an arcane, acronym-laden issue – but the concept is simple: ensuring operators use the best, modern technology available to find and fix leaks in their equipment.  These leaks both pollute the air we breathe and waste their product. In fact, strong LDAR programs may be the best, most cost-effective way to get these leaks fixed and pollution reduced.  And that is why other states should pay attention to what Wyoming is doing.

While there is more that could be done, Wyoming’s willingness to step up and build consensus around reasonable efforts to cut down on harmful air pollution from oil and gas operations exhibits true leadership on an important issue.  The state’s proposal will require operators to inspect all new and modified facilities with more than four tons per year of fugitive VOC emissions in the nonattainment area on at least a quarterly basis.  Once located, these leaks will have to be fixed.

These proposed LDAR requirements improve on existing state standards in a few key ways:

• The four ton per year threshold is twice as protective as the currently imposed standard of eight.
• The proposal doubles the frequency of inspections for facilities that do not have storage vessels (where inspections are currently required on a semiannual basis they will be quarterly in this proposal).
• The LDAR requirement applies across the Upper Green River Basin Nonattainment Area, not just in the smaller Jonah Pinedale Anticline Development Area, as is currently the practice.  A statewide rule would be better, but a strong program in the nonattainment area is certainly a big step in the right direction.

We give high praise to Wyoming for these aspects of its proposal.  However, all of these improvements could be severely undermined if the state allows operators to identify leaks using nothing more than the human eye, ear or nose — the so called Audio Visual Olfactory (AVO) method.  The fact is, the human senses are simply not as finely-tuned and cannot catch as many leaks as today’s off-the-shelf technologies.

If we only rely on what we can see, hear or smell, huge leaks could slip through the cracks and huge quantities of harmful VOC’s and methane will pollute the air unchecked.  Today’s technology can do this job of detecting harmful substances better, so why not use it?  Allowing AVO is a loophole that can and should be fixed as this proposal moves forward.

It is good news then that Wyoming air regulators indicated at the public meeting last week that they “won’t exclusively accept AVO,” and that it would only be allowed in conjunction with other, more reliable detection methods.  We will continue to work with state regulators on this issue ensure that this important clarification is captured in the final guidance document.

Cost-effective LDAR technologies, utilizing reliable, technologically-precise detection methods, will help reduce emissions, clean up unhealthy air, and – given that methane is also what the natural gas industry sells – help gas producers’ bottom lines as well.

Kudos to the Cowboy State for leading on an issue that, once clarified, will again show that clean air and the oil and gas industry can coexist.

By Jim Marston

EDF's Energy Innovation Series highlights innovations across a broad range of energy categories, including smart grid and renewable energy technologies, energy efficiency financing and progressive utilities, to name a few. This Series helps illustrate that cost-effective, clean energy solutions are available now and imperative to lowering our dependence on fossil fuels.

Find more information on this featured innovation here.

As this series has demonstrated, energy innovation is happening around the world in a wide range of areas, from energy storage and smart grid technologies to renewables, electric vehicles and energy-saving software and services.

But innovation isn’t just about inventing new technologies.  It’s about getting those technologies out into the market.  And when it comes to bringing renewable energy options to residential and commercial customers, Texas-based Green Mountain Energy Company was the first to be 100% dedicated to cleaner energy with the electricity market opened to competition in the state in 2002.

Founded in 1997, Green Mountain is the country’s longest-serving retailer dedicated to renewable energy, selling all-renewable energy options directly to residents and businesses in competitive markets in Illinois, Maryland, New York, New Jersey, Pennsylvania and Texas, and partnering with utilities in other regulated markets.

In September 2013, Green Mountain became the first company to offer residential customers in Texas an electricity plan powered by 100% solar energy.  The company’s SolarSPARC™ product (Smart People Accelerating Renewable Change) allows customers to reap the benefits of solar energy without incurring the upfront cost of a solar installation.  Furthermore, Green Mountain Energy’s innovative program overcomes other barriers that many homeowners face, such as lack of open rooftop space without hindrance of shade or a commitment to sign a long-term, twenty-year solar contract.

“Texas has incredible solar potential, and our customers want and deserve solar options,” said Green Mountain’s Shay Ohrel.  “But not everyone can afford the upfront cost of installing their own system or even has a suitable home for solar panels.  SolarSPARC™ gives them a way to be part of the solar revolution.”

The program is available now to residential customers in competitive markets in Texas. According to Green Mountain, SolarSPARC™ electricity comes from 100 percent solar energy.  Initially, the power will come from solar credits acquired from national projects, but the company is breaking ground on Texas-based solar installations and will eventually incorporate a portion of this Texas-based generation to support SolarSPARC™ customers.  The first SolarSPARC™ project is sited alongside the company’s wind facility near Big Spring, Texas.

In addition, Green Mountain will contribute $4 per month for each SolarSPARC customer towards developing new solar projects in Texas, and customers will receive an annual bill credit for each solar project they help fund.  The credit will start at $11 and could amount to $121 per year for customers who participate for 5 years.

Source: Green Mountain Energy

Most people know about Texas’ success with wind power but our state is also ranked first in solar energy potential.  The cost of solar continues to drop, and companies like Green Mountain are offering creative ways for customers to take part without bearing the upfront investment.  A strategic mixture of good policies, creative financing and enthusiastic energy companies will help spur the growth of solar in Texas.

Green Mountain is starting small, but it is committed to grow with demand.  “The more customers that sign up for the product, the more solar we’ll build,” said Ohrel.  “Texas has a lot of sunshine, and we plan on making sure it has a lot of solar power customers.

By Mark Brownstein

This commentary originally appeared on EDF's Voices blog.

Source: WCN 24/7 Flickr

Given the widespread press coverage of the release of the University of Texas methane emissions study, we shouldn’t be surprised that Jack Gerard, CEO of the American Petroleum Institute (API) is spinning a false story about its results. In an email to leaders in Congress, Gerard tells them that there's nothing to worry about. Methane pollution from gas production is low and getting lower. Wrong.

What the study really said is that technology to reduce methane pollution in the transition from drilling a well to full scale production can be very effective at reducing methane emissions when it is deployed – emphasis on when. This is one of the important points Gerard misses, as no national accounting exists to show U.S. producers currently use these methods as a matter of widespread industry practice.

Gerard also conveniently did not tell Congress that the low wellhead emissions detected by the study are the result of EPA regulations adopted last year – rules API lobbied hard to weaken. Gerard further did not explain to Congress that these regulations don't apply to all unconventional gas production today. Meaning the UT study is not an example to of “problem solved, we can all go home.”

Despite what API would like you to believe, the real story is that federal regulation is helping to drive production sector emissions down. Not that “industry’s efforts to reduce emissions are working.”

To be fair, we acknowledge that industry has unparalleled technological skill and can tackle big challenges — IF it's a priority. Making it so and ensuring that the priorities are set, kept and evolve to stay current with the state of industry practice is a role for policy. EPA’s regulations clearly need to be extended to all producers operating shale wells before we can say that this problem is solved.

Another key point Gerard misses entirely is telling Congress that the study found several places at the well site sites where methane pollution was higher than anyone thought. These include 63% higher emissions from valves controlling routine operations, 38-69% higher emissions from equipment leaks, and 100 percent higher emissions measured from chemical injection pumps (used at the wellhead to keep pipelines flowing).

Sadly, Gerard's email isn’t the only time we’ve heard the University of Texas study twisted for political gain. Senator David Vitter also noted without irony that the results show that EPA regulations aren’t needed –the exact opposite point of the results.

Basically, API, Senator Vitter, and more, are saying that all future decisions on natural gas should be based on the fact that certain types of wells, in a certain portion of the production sector, in one segment of the natural gas supply chain emit methane at a lower rate than originally estimated. Does that make sense to you?

The study represents a great step forward in understanding the effects of natural gas processes on our environment and climate, but it is not all good news. There is still a huge void in information about the whole process. The data we do have tells us there are additional opportunities for producers to further reduce methane emissions and that we collectively, the oil and gas producers, the environmental community, and the government, need to examine the procedures in place and push for better practices and better rules around them.

The only policy implications that are clear so far are the EPA rules for new natural gas wells going into effect in January 2015 must be extended to cover all oil and hybrid oil-and-gas wells, and new rules must be written to measure and reduce higher emissions reported for valves, leaks, pumps and other equipment.

We know enough to get started plugging the holes in part of the system. Now if only Jack Gerard and API would put a plug in their campaign of misinformation.

By Brad Copithorne

Progressive Power Providers Show a Path Forward

Traditionally, electric utilities have been in the business of providing reliable power to their customers.  Prices for each class of customer are fixed by state regulators and a customer’s choice is pretty much limited to whether they want to turn on the switch or not.  Much of the EDF Smart Power initiative is focused on helping to create new utility business models that change this paradigm by increasing customer choice, providing market feedback on these choices and incentivizing the use of cleaner sources of power.

Several electric utilities are getting ahead of the curve by embracing these changes.  While both own large fossil fuel assets, NRG Energy and NextEra Energy have also been developing utility-scale and distributed renewable generation projects across the country.  NRG Energy develops solar and other renewable projects for government, commercial and other institutional customers, and NextEra Energy, the largest generator of wind and solar power in North America, develops and finances large commercial and small utility solar projects through its subsidiary Smart Energy Capital. Cumulatively, they have provided more than 110 megawatts of distributed solar generation capacity to schools, government and commercial facilities, among others.

Over the past week, two other energy providers, Direct Energy and Viridian, have announced deals with SolarCity to offer no-upfront cost solar installations to their current and prospective customers.  In many cases, these solar installations will provide clean energy at a lower cost than the customer currently pays for dirtier, fossil fuel power.  Direct Energy even took it a step further by agreeing to provide part of the financing for their customers.  Since there are few investors that currently finance solar projects, Direct Energy can expect to earn a very attractive return on their investment.  While solar financing has been around for several years, Direct Energy and Viridian can now offer customer solutions that bundle solar installations with other energy services.

Both Direct Energy and Viridian compete in “deregulated” utility markets, where customers have the ability to choose between various suppliers of power.  In states such as Texas and New York, customers have a single “wires and poles” company, but can choose between multiple energy providers.  In these states, the energy providers are forced to compete on price, service and other related offerings.  For example, Direct Energy has long been in the business of providing their customers with energy efficient upgrades to their heating and air conditioning systems.  Viridian offers residential customers clean power from renewable generation.

Because Direct Energy and Viridian must compete for customers, there is an incentive to develop offerings that will help increase market share.  When offered at lower cost than dirtier alternatives, smart, clean power options provide advantages in a very competitive marketplace.  Both companies have done the research and know that many of their current and potential customers are interested in renewable power options.  They’ve created an innovative strategy to provide that solution, thereby improving existing relationships and attracting new customers.

Power providers have a lot to lose if they stand still and watch this wave of energy innovation pass them by.  But they also have a tremendous amount to contribute, and leveraging their expertise and capital could accelerate the innovation cycle.  We hope that more utilities across the country will offer their customers innovative choices to not only lower their utility bills, but also reduce their environmental impact.

By Andrew Williams

My passion for protecting the environment dates back to the 1850s – a farm from the 1850s, that is. I gained an early respect for water and land conservation, learning from my grandfather as he tended to our 4th generation family farm just outside of Neosho in Southwestern Missouri. Our farm is spring fed, so you have to be able to manage your water usage very well. I had the opportunity to participate in all aspects of running a farm, from irrigation to plowing the fields. On top of managing the farm, my grandfather was head of Neosho’s water department and we spent a lot of time hiking and fishing in nature. Water, land and the outdoors were at the center of everything he loved, and through his example it became clear to me at a very young age that managing your impact on the environment was of the utmost importance.

I grew up in Tulsa, just a few hours southwest of the family farm. Once known as the oil capital of the world, Tulsa has a long and proud history of oil production. By some estimates, a quarter of all jobs in Oklahoma are tied to the energy sector. As early as high school, I was involved in environmental advocacy, even in the oil patch. That may sound contradictory – environmental advocacy in the oil capital – but I figured out along the way that the industry and environmental stewardship weren’t mutually exclusive. My family taught me a practical and pragmatic approach to protecting the environment, and reiterated that the lessons of conservation learned on my family’s farm could have relevance to the oil and gas industry that surrounded me.

Being from Oklahoma, there weren’t many career options outside of working in the oil and natural gas industry. I spent nearly ten years working in the industry, starting in the environmental department of a small company and working my way up to the executive team.

Today, I oversee EDF’s efforts to reduce the environmental impacts of oil and gas activities in the Marcellus region, which probably contains a few of its own family farms. The insider perspective that comes from almost a decade of working in the oil and gas industry helps me better understand how environmental decisions are made within a business, and how technology and regulation can help to proactively reduce environmental impacts. Most critically, I know how to recognize opportunities to align environmental protection with profitability.

Even though I am now based in Washington, D.C., I still come from the oil patch. And I still value a practical, pragmatic approach to solving complex environmental issues – something EDF and I definitely have in common. EDF approaches issues like regulatory control and legislation in this same manner, and I’m proud to play a part in the organization’s work to reduce the environmental impacts of natural gas, and continue the legacy that started so many years ago on my family’s farm. Our natural gas work at EDF centers around protecting our air, water and landscapes from poor development practices that can have a very direct effect on land owners. The lessons of conservation learned from my grandfather remind that when it comes to natural gas development, we must get the rules right. Generations and family farms to come depend on it.

This is one of a group of posts about why industry experts work at EDF.

By Brad Copithorne

This commentary originally appeared on EDF's California Dream 2.0 blog.

I spend most of my time working to establish On-Bill Repayment programs that allow property owners to use their utility bill to repay loans for cost-saving energy efficiency or renewable energy upgrades.  Many of my colleagues work on a similar program known as Property Assessed Clean Energy (“PACE”), which uses the property tax bill for repayment.  Since both utility and property tax bills are usually paid, both PACE and OBR are expected to lower the cost and increase the availability of financing for clean energy projects.

Last week, I was invited to attend a meeting of the leading PACE program administrators, property owners and other market participants in the country — and was pleasantly surprised to learn how much progress is being made.

Connecticut launched their program in January and is expected to close $20 million of PACE transactions for commercial properties by year end.  The Toledo, Ohio area expects to have executed $18 million of commercial transactions by the end of 2013.  Sonoma County, with a population of less than 500,000, has already completed $64 million of financings for residential and commercial properties.  In late 2012, CaliforniaFIRST launched a PACE program for commercial properties that has already received 130 applications.

We also heard from the head of Keep PACE in Texas who recently sponsored legislation to enable PACE in the state.  PACE, like OBR, uses private funding to allow property owners to voluntarily retrofit their properties.  This makes the program popular with many conservatives and the legislation was able to pass with a unanimous vote from the Texas House of Representatives in May.

Historically, most of the PACE transactions have gone toward financing energy efficiency improvements.  As I wrote in May, Connecticut has set up their PACE program to include financing solar projects as well – using financing structures (leases and power purchase agreements) that tend to provide the lowest-cost solutions for building owners.  Last week, I learned that CaliforniaFIRST and other California-based PACE programs may now be able to offer the same solution for commercial property owners across the state.  This could dramatically increase the availability of financing for solar projects in commercial properties.

Most solar deals are financed over 20 years.  For properties with good credit, this works well as solar photovoltaic (PV) panels have a long lifespan and solar generation can be predicted accurately.  Most government buildings tend to have good credit and can usually finance solar with no money down.  Unfortunately, unless a commercial property is owned or leased by a highly-rated company, the property does not normally qualify for financing.

PACE programs can put an obligation onto the property tax bill that survives all changes in ownership and allows most properties to qualify for credit.  I am hopeful that PACE will be a game changer for solar installations for commercial properties in California. Ultimately, these improvements will save property owners money by reducing their energy consumption, put Californians to work and lower harmful pollution in the process.

By Kate Zerrenner

Hawaii recently topped the national rankings for energy saving initiatives for the second year in a row. In August, the Energy Services Coalition (ESC) granted the state its ‘Race to the Top’ award for modeling excellence in energy and water efficiency. ESC’s Race to the Top challenge ranks states based on investment per capita in energy savings performance contracting. Hawaii leads with $132.25 per capita, followed by Ohio with $108.58 and Kansas with $97.77. The national average hangs at a low $37.20.

Hawaii sets a strong example for outstanding, innovative energy savings performance contracting. Performance contracts are commonly used for public-sector buildings, especially schools, which often cannot afford the upfront costs attributed to energy and water efficiency upgrades. Under many performance contracts, contractors pay the upfront costs and even guarantee net energy savings for the building owner. The contractor then recoups the investment through a portion of the resulting energy savings. This payment structure enables school districts and other public-sector entities to upgrade existing buildings with improved energy efficiency and without the worry of high upfront costs.  To see why upgrades are so important for school buildings, see my other blog post here.

This Race to the Top award is similar to the campaign currently being debated in the U.S. Senate in that it challenges states to strive for energy efficiency gains. Additionally, the national Race to the Top legislation under consideration would award competitive grants to states for state policy and program innovations aimed at increasing efficiency into the future; ESC’s Race to the Top simply recognizes the efforts states have already realized through their own ingenuity and drive for a clean energy economy.

According to Governor Neil Abercrombie, Hawaii’s clean energy efforts will cut costs at state facilities and create several thousand jobs. And the Aloha State shows no signs of slowing down – a funding agency for renewable energy start-ups in Hawaii, the Energy Excelerator, just received $30 million from the U.S. Navy for inventive projects such as an experimental renewable energy microgrid project, a grid-connected wave power system and a rainwater harvesting system.

Source: U.S. Navy

Hawaii is a sunny and windy state with high energy costs, which makes it a desirable market for clean technology. The U.S. Navy’s Pearl Harbor installation is a prime example of the state’s rapid transition to renewable energy. The Navy installed solar panels on five rooftops at the base, which harvest enough solar energy to power 440 homes. Hawaii is also home to the nation’s first grid-connected wave energy system. With the rise and fall of the waves in Kaneohe Bay, the Marine Corps Base is drawing electrical power from the ocean – think of this as ‘blue’ energy. Other innovative projects include sea water air conditioning, which uses cold water from the ocean to help cool several buildings across the islands, including the University of Hawaii medical school and (soon to be) forty buildings in downtown Honolulu.

In May, Hawaii passed Senate Bill 1087, which allows the state to create and issue a Green Energy Market Securitization (GEMS). This will provide low-cost financing for a variety of clean energy projects and be one of the primary lenders under an on-bill repayment (OBR) program currently under development. This program covers a wide range of property types and caters to both residential and commercial customers by financing energy efficiency and renewable energy projects through cost-saving financing from private sector investors as well as GEMS. The investments are repaid through customers’ utility bills and financed at no additional cost to ratepayers. EDF is proud to work with the Hawaiian Electric Company, the Hawaiian Public Utilities Commission, Sierra Club, Earthjustice, Blue Planet and other stakeholders to rollout the OBR program by early 2014.

Frankly, Hawaii’s progress is leaving other states in the dust.

Hawaii is saving $14.2 million and 60.9 million kilowatt hours per year through performance contracting, according to state official Richard Lim. This success goes to show that clean energy delivers quite the bang for your buck.

By EDF Blogs

This commentary originally appeared on EDF's Climate Corps blog.

By: Sitar Mody, Senior Manager of Strategy, Environmental Defense Fund

Today, EDF Climate Corps is thrilled to launch a major initiative to accelerate energy performance in buildings in the city of Chicago.

Chicago is a beautiful city. Chicago is an historic city. Chicago is also a city with a clear and powerful dedication to advancing energy efforts citywide. Many buildings in Chicago are already on a path to greater energy management having committed to Retrofit Chicago – the city’s premier initiative to help buildings reduce their energy use by 20% over 5 years.

EDF’s new Building Energy Initiative in Chicago will complement Retrofit Chicago by giving building owners and operators the “boots on the ground” to sustain their commitments and facilitate access to advanced energy markets – all to save money and the environment.

EDF is recruiting 50 buildings in the city to participate in EDF Climate Corps and developing a robust network for building owners and operators to accelerate adoption of leading energy management practices and gain confidence in implementing innovative investments. We also have two experts, Devesh Nirmul and Ellen Bell, on the ground in Chicago to provide year-round technical support.

Monday September 23rd, we are hosting our first of many events at the Merchandise Mart to share success stories of how hand-picked EDF Climate Corps fellows have advanced the specific energy management needs of different host organizations in Chicago.

EDF Climate Corps is descending on Chicago to prove that when a concentrated coalition of buildings implements best energy management protocols – large scale business and environmental ROI follows. Together with the city of Chicago and other partners including NRDC, C40, and Illinois Science and Technology Coalition, we are creating a tipping point in the marketplace to save money and reduce greenhouse gas emissions, first in the city of Chicago and then throughout the state of Illinois, the Midwest and beyond.

Are you in Chicago? Join us in Lounge 1447 in the Merchandise Mart at 5:30pm on Monday or contact us for further information.