With Congress squelching innovation in Washington, we need to look to the states for policies green on energy. A study released by Stanford University and the Hoover Institution this week (The State Clean Energy Cookbook: A Dozen Recipes for State Action on Energy Efficiency and Renewable Energy) cites 12 innovative projects being implemented by almost 20 state governments (and one federal program) that can inform other capitals and industry about successful approaches.
States have done more to modernize energy than the federal government. They have spurred renewable energy and energy-efficiency programs that improve the economy and reduce emissions at minimal cost. Says George Schulz, coauthor of the cookbook, former Secretary of both State and Treasury, and chair of the Hoover Institution’s Shultz-Stephenson Task Force on Energy Policy:
We are impressed by the breadth of experience that states around the country already have in encouraging energy efficiency and renewable energy in ways that save money, reduce pollution and strengthen their energy security. The goal of the study is to provide a source for states to compare and contrast innovative policies, so that they can learn from each other.
It’s interesting that in both economic and environmental terms, energy efficiency and renewable energy implementation in the states green on energy spark fewer political battles between Democrats and Republicans than many other arguments the parties debate widely. This state unanimity reveals much more common ground between parties than is evident from the constant squabbling in Washington.
The policies included in this report have overall passed several important tests, says Dan Reicher, executive director of the Steyer-Taylor Center and one of the report authors.
- They are already on the books.
- They operate in both blue and red states.
- They enjoy good support.
- They can be cost-effective when implemented well.
Each policy “recipe” in the report includes:
- A detailed policy description
- Recommendation for implementation
- Current examples of states green on energy
- Discussion of policy benefits
- Specific policy design considerations
- Additional policy resources
Here we repeat the policy recommendations verbatim, adding the states that report authors consider good examples.
Energy Efficiency Resource Standard. States should adopt an Energy Efficiency Resource Standard (EERS) to help improve energy efficiency and cut energy bills. An EERS should allow for flexibility in the types of efficiency measures covered, and it should address cost-effectiveness, total incremental costs, and cost shifting among customers. — Wisconsin
Energy-Efficient Building Codes. States should adopt or update energy efficient building codes following an independent analysis of cost-effectiveness, distributional impacts, and other factors. Building energy codes are a relatively straightforward and transparent energy efficiency strategy. Updating codes is likely to be most worthwhile in states with the oldest existing codes. — Mississippi
Building Energy Benchmarking and Disclosure. States should adopt a policy requiring benchmarking and relevant disclosure of energy performance information for larger nonresidential and residential buildings. — California, Washington
Utility and Customer Market Incentives. States should adopt some combination of both alternative utility revenue and customer rate models—for example, decoupling and time-variant pricing—if doing so would advance policy goals, such as increasing energy efficiency, grid security, and distributed generation cost effectively. —Arizona, Washington
Renewable Portfolio Standard. States seeking to increase renewable power generation significantly should consider adopting or expanding a Renewable Portfolio Standard (RPS). RPSs are well understood and have proven effective at increasing deployment of renewable power generation. The extra costs of an RPS should be reasonable and should be shared fairly and transparently across customers. — North Carolina, Minnesota
Net Energy Metering. States should increase the power-generation choices available to utility retail customers by adopting a Net Energy Metering (NEM) policy that compensates customers for offsetting their energy use through a small, on-site, clean-power system. Compensation for the value of the on-site system and any excess generation should be provided in the form of a credit on the customer’s utility bill under a rate mechanism that has been determined in a fair and transparent manner. — Texas, Vermont
Community Renewables. States should enact legislation to permit distributed “community renewables” projects that enable multiple customers to share in the economies of scale and other benefits of an off-site renewable energy system via their individual utility bills. — Colorado, California, Minnesota
Renewable Energy Tariffs. States should permit contracting between utilities and large commercial and industrial energy consumers to procure additional renewable power at the request of, and paid for by, the relevant consumer. Steps should be taken to avoid cost shifting to nonparticipants and to ensure that new generation would not have been developed otherwise. — North Carolina, Virginia
Energy Savings Performance Contracts. States should adopt legislation authorizing Energy Savings Performance Contracts (ESPCs). States with existing authority should ensure that the benefits available through this financing mechanism are being effectively realized. — Pennsylvania
Third-Party Ownership of Distributed-Power Systems. Third-party financing and ownership of on-site and, where applicable, community-based distributed-power systems has proven effective at broadening the availability of such infrastructure. States should authorize this form of financing and, as necessary, clarify that providers of this financing option are not classified as regulated utilities. — New Mexico
Property-Assessed Clean Energy. States should authorize Property-Assessed Clean Energy (PACE) programs allowing property owners to finance the up-front costs of energy improvement projects through an assessment on their property taxes. — Connecticut
On-Bill Repayment. States should authorize On-Bill Repayment (OBR) programs to enable property owners to finance cost-effective energy efficiency and distributed-power upgrades through a third- party investment that is repaid through the owner’s utility bill. — Hawaii, New York
The Administration and Congress should expand funding for the US Department of Energy (DOE), State Energy Program (SEP), the key federal grant program supporting the states in advancing energy efficiency and renewable energy. — Nebraska, Massachusetts
“States truly are the ‘laboratories of democracy’ when it comes to renewable energy and energy efficiency, adopting groundbreaking programs and policies that could provide benefits around the country,” said Tom Bingaman, former New Mexico Attorney General, now chairman of the Senate Energy and Natural Resources Committee, who co-authored the study. The State Clean Energy Cookbook clearly has the potential to advance both laggards and states green on energy and help states and industry meet pending EPA rules.
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