Transcript Advocating for Arizona’s Energy Future

Arizona Energy Policy Update
Jeff Schlegel, The Southwest Energy Efficiency Project
USGBC Arizona Chapter; March 17, 2011
Southwest Energy Efficiency Project (SWEEP)
• Public interest initiative founded in 2001
• Promotes greater energy efficiency (EE) in AZ and SW
• Board of Directors includes utility, state government,
national laboratory, and private sector representatives
• Funding provided by the Energy Foundation, Hewlett
Foundation, Edwards Mother Earth Foundation, U.S.
Department of Energy (DOE), and U.S. Environmental
Protection Agency (EPA)
www.swenergy.org
Energy Efficiency
Delivers Benefits for:
Customers (Consumers & Businesses)
The Utility System (Electric & Gas)
Our Economy
Our Environment
Arizona Energy Policy Forums
Arizona Corporation
Commission
Salt River Project
Board and Managers
Arizona State
Legislature
Governor’s Office
& State Administration
Cities & Counties
Congressional
Delegation
Arizona Corporation Commission (ACC)
• 5 elected commissioners
• Has jurisdiction over quality
of service & rates charged
by public service utilities
Arizona Electric Sales by Utility, ‘08
13%
38%
13%
• Regulates 14 electric utilities
including APS & TEP, not SRP
36%
• Approves/denies many
utility actions (i.e. rates)
Arizona Public Service Company (APS)
Salt River Project (SRP)
• Can establish rules further
governing utilities
Tucson Electric Power Company (TEP)
Other
Recent Policy Developments at the ACC
① Electric Efficiency Standard
Requires 22% energy savings by 2020
② Gas Efficiency Standard
Requires 6% energy savings by 2020
③ Decoupling Policy Statement
Allows investor-owned electric and gas utilities to file specific
decoupling proposals to align utility financial interests with the
interests of customers and the public (which supports EE, RE DG)
(Decoupling “de-couples” utility revenues from energy sales)
④ Integrated Resource Planning Rules
Allows meaningful opportunities for EE & RE to compete on a
level playing field with conventional resources.
What is the Electric Efficiency Standard (EES)?
• Approved unanimously by ACC in July 2010
• Requires investor-owned utilities to:
– Achieve cumulative annual energy savings of 22% by 2020
– Includes a 2% credit for peak reductions from Demand Response
• Electric Coops required to meet 75% of standard
• Countable energy savings include:
– Savings from combined heat and power (CHP)
– 1/3 of measured savings from building energy code support
Gas Efficiency Standard
 Approved Unanimously 
 Requires 6% Savings by 2020 
 Savings from CHP, building energy codes, & standards 
7
EES Impact on Retail Sales
Retail Energy Sales (MWh)
APS' Retail Sales, 2010-2020
40,000,000
35,000,000
Retail Energy
Sales Forecast
30,000,000
Energy Sales
Forecast with EES
25,000,000
2010
2012
2014
2016
2018
2020
 APS’ energy sales growth reduced from 2.8% to 1.1% per year
 TEP’s energy sales growth reduced from 1.5% to -0.2% per year
8
The Effect of Much Higher EE Savings
AZ 2008
AZ 2020
6% 0%
0%
24%
37%
19%
20%
Coal
Natural Gas
Nuclear
Conv. Hydro
Renewables
Energy Eff.
15%
24%
Other
33%
4%
18%
- Energy efficiency becomes one-fifth of the energy “pie” in 2020
- Lower total costs, lower utility bills, more jobs, less pollution
- Deferral of 3 large baseload plants from early 2020’s to 2030’s (and by
then renewables, storage, electric vehicles, etc.)
- Plus $9 billion in lower customer bills (2011-2030)
9
EE: ACC Policy Advancements In Action
• TEP 2011-2012 EE Implementation Plan Filed
• New programs, expansions of existing programs
• Continuation and expansion of new
construction programs
• Includes pilot program to support building
energy codes
• Also EE programs for existing buildings
• APS 2011 EE Implementation Plan Approved
• New programs (including multi-family new
construction) and program expansions
TEP’s Residential New Construction Program
• Uses an incentive schedule that awards larger
incentives for more energy-efficient homes
• To qualify, homes must:
– Be tested by an approved energy rater
– Meet one of three tiers in the program based on a
Home Energy Rating System (HERS) Index Score:
1) Tier 1: ≤ 85 ($400 incentive per home to builder)
2) Tier 2 ≤ 70 ($1,500 incentive)
3) Tier 3 ≤ 45 ($3,000 incentive)
TEP’s Commercial New Construction Program
• Offers rebates to non-residential customers in TEP service
territory who design and/or build new energy efficient facilities
• Two rebate types offered:
1)
2)
•
Design Assistance Rebates
Promote EE integration into design process
New Construction Rebates
Promote incorporation of EE products/practices
during construction
New in ’11-’12:
High Performance
Window Glazing
Rebate Caps
1)
Customer Caps
Depends on funding availability & number of program participants
2)
Measure Caps

Design Assistance: 50% of the incremental cost up to a max of $10K

New Construction: 50% of the incremental cost up to max of $75K
APS Multi-Family New Construction Program
• Promotes EE in construction/renovation of new multi-family
buildings
• Building owners/developers offered an incentive per dwelling unit
for installing select packages of EE improvements in each unit.
–
–
–
–
Four different packages
One package targets major renovation projects
Three packages target new construction
New construction packages offer progressively higher incentives for
projects that meet higher levels of energy
• Eligibility
– All existing multi-family rental housing complexes and new multifamily rental construction projects within APS service territory with
five dwelling units or more are eligible for the program
– No owner-occupied condominiums or townhomes
Support Building Energy Code Advancement
ENERGY
70%
USED
30% WASTED
Building energy codes ensure our homes
& offices are “built right” the first time
Energy efficient homes are more affordable &
reduce the risk of defaults and foreclosures
Building energy codes are a cost-efficient policy strategy
for reducing energy costs and pollution
Building Energy Codes in Arizona
• Arizona is a “home rule state” (local
jurisdictions enact building codes)
• Only 33% of 111 municipalities have
adopted a version of the International
Energy Conservation Code (IECC)
• To date, no single municipality has adopted the
2009 IECC (although several are working on it)
• Also, Green Building Codes and “beyond code”
standards
Arizona Legislature
•
HB2574 energy districts (PACE) – failed (10)
•
HB2332 schools; energy contracts (09) -(appliance standards)
•
HB2496 schools; energy savings (07)
•
HB2430 energy savings; state bldgs (06)
•
HB2429 solar tax incentives (06)
•
HB2390 appliance standards (05)
•
HB2703 performance contracting (04)
•
HB2324 state energy savings goals (03)
•
f
Arizona Legislature – Current Session
• SB 1172 – Performance contracting and energy
savings accounts for cities and counties (failed
in Senate committee but may come back)
• Greenhouse gas “freedom to breath” proposals
to prevent action on climate (SB 1393, SB 1394)
• Challenges to ACC authority (HB 2195, HB 2185)
• HB 2501 – “ambiguous” rules or laws
• “Energy parks” and “energy districts”
• Sustainable finance authority
• BUDGET