October State Energy Efficiency Policy Bulletin

The Alliance Wants to Hear from You!
Contact us with suggestions or comments.

Click here to subscribe to the State Energy Efficiency Policy Bulletin

View Archives

California and the Northeast Seek to Reduce Greenhouse Gas Emissions from Vehicles
by Gail Hendrickson, Director of Transportation

Leading the Way
California has always been a leader in seeking ways to reduce pollution from motor vehicles and this again became apparent last month as the California Air Resources Board (CARB) voted unanimously on September 24 to approve regulations limiting greenhouse gas emissions (GHG) from passenger cars and light trucks in the state. The regulation requires automakers to begin cutting emissions of carbon dioxide and other greenhouse gas emissions from cars and light trucks starting in the 2009 model year and to achieve 30 percent reductions in GHG emissions from 2002 levels by 2016.

The regulation, which the CARB adopted after a marathon public hearing, results from legislation (AB 1493) introduced by Assemblywoman Fran Pavley (D) that was signed into law in 2002 by the previous California Governor, Gray Davis.  The law required CARB to adopt regulations by January 1, 2005 that “achieve the maximum feasible and cost-effective reduction of greenhouse gas emissions from motor vehicles.”  Over the past two years, CARB has been holding workshops to implement AB 1493, including a workshop on different technologies that can provide feasible and cost-effective reductions in GHG emissions from vehicles.  Technologies evaluated included modifications to conventionally-fueled vehicles, improvements in air conditioning systems, alternative fuel vehicles and hybrid vehicles. 

Substantial Results and Potential Roadblocks
According to CARB staff, the average reduction of greenhouse gases from new California cars and light trucks will be about 22 percent in 2012 and about 30 percent in 2016, compared to today’s vehicles.  Costs for the added technology needed to meet the rule are expected to average about $325 per vehicle in 2012 and about $1050 per vehicle to comply in 2016.  The CARB staff analysis concludes that the new rule will result in savings for vehicle buyers by lowering operating expenses that will more than offset the added costs of the new vehicles and provide an overall cost savings to consumers.  The automotive industry has estimated that the costs will be much higher, at approximately $3,000 per vehicle. 

There are several important issues related to the implementation of this GHG regulation which will need to be resolved in the coming months.  First, the regulations must still be approved by the state’s Office of Administrative Law (OAL) and reviewed by the state legislature before they can take effect.  In addition, it is not clear whether California will ask EPA for a waiver under Section 209 of the Clean Air Act as required when California adopts vehicle emission standards different from the federal standards.  If California requests a waiver, Section 209 requires that the state demonstrate, among other factors, that the GHG standards are needed to address “compelling and extraordinary conditions.”  California will have to make the case that concentrations of CO2 in that state are dramatically different from other areas of the country (which comply with the federal emission standards).  Whether EPA, particularly under the Bush administration, would even grant a waiver is questionable.  Last year, EPA concluded that it lacks the ability under the Clean Air Act to regulate CO2 or other greenhouse pollutants.  That decision is being challenged in federal appeals court by environmental groups and states, and a decision is expected as early as next spring. 

Beyond the Golden State
Seven Northeast states already have California’s LEV II emissions standards in place.  These states include Connecticut, Maine, Massachusetts, New Jersey, New York, Rhode Island and Vermont.  All of these states have indicated an interest in following California’s lead, and adopting California’s GHG regulations.  In fact, New York Governor George Pataki has already declared that his state will adopt California’s greenhouse gas emissions standards.  Since the GHG regulations have been inserted into California’s existing LEV II Program, it could be argued that the Northeast states will have to adopt the CO2 standards in order to keep their emissions standards identical to California’s as is required for those states that adopt California emission standards under Section 177 of the Clean Air Act.

The automotive industry opposes the CARB regulations, arguing that they attempt to regulate fuel economy standards, an area that is under the sole jurisdiction of the federal government.  The automotive industry also has argued that there is inadequate lead time to meet the new technology requirements. 

California Governor Arnold Schwarzenegger has indicated his support for the CARB regulations, and that he will fight for their implementation as well as defend them vigorously if challenged in court.

Northeast Regional Energy Efficiency Initiatives
Leverage Resources, Move Markets and Get Results
by Sue Coakley, executive director and founder of
Northeast Energy Efficiency Partnerships, Inc

The Northeast has some of the strongest and most consistent energy efficiency policies and programs in the country.  With $550 million per year in ratepayer funding across New England, New York and New Jersey, efficiency programs are making a difference. Complementing these programs are building energy codes and appliance standards.  However, more energy efficiency is needed to address environmental, economic and energy infrastructure issues facing the region.

Regional Coordination Produces Results

As the leading facilitator of regionally coordinated programs, Northeast Energy Efficiency Partnerships, Inc. (NEEP) helps program administrators (i.e., utilities and state entities) across a seven-state area to deliver consistent messages and requirements, leverage resources and ideas, and attract market attention. The collaboration NEEP helped facilitate has resulted in the collective transformation of markets for energy efficiency.  Listed below are several examples of this impressive transformation:

• High Efficiency Unitary HVAC:  Electric program administrators in New York, New Jersey and New England worked together through a NEEP-facilitated initiative to significantly increase the availability and sales of high efficiency unitary HVAC equipment across six states.  Using coordinated incentives and outreach, the initiative recruited the majority of HVAC distributors and manufacturers serving the region to promote equipment that meets or exceeds the Consortium for Energy Efficiency (CEE) Tier 2 standard, now adopted as the ENERGY STAR^® specification.

• Premium Motors: Through a partnership of electric program administrators in New York, New Jersey and New England and facilitated by NEEP, this regional initiative increased sales of premium motors in seven states to 19 percent, despite a decline in overall motor sales.  Following a new federal motor efficiency standard in 1998, initiative sponsors helped to pull into the market a new generation of premium motors that meet a consistent national specification developed by CEE and adopted by the motor industry in 2001 as “NEMA Premium.”

• The Residential HVAC Initiative:  Coordinated by NEEP through a regional forum, gas and electric program administrators in six states have developed consistent program requirements for the quality installation of high efficiency HVAC equipment. New Jersey utilities have been leaders in this effort, exceeding 30 percent market share for the quality installation of SEER 13 air conditioning systems. GasNetworks, a consortium of Massachusetts gas companies, achieved high levels of market saturation of high efficiency heating equipment, significantly exceeding the national average.

• Building Operator Certification (BOC) Program:  With support from gas and electric program administrators in seven states, NEEP has trained and certified over 1,000 building facility operators in resource efficient practices through the nationally acclaimed BOC Program. 

• The ENERGY STAR Lighting Program: Coordinated by NEEP, initiative sponsors in New England and New York significantly increased the availability and sale of compact fluorescent lamps (CFLs) and fixtures across the region, while reducing product costs and maintaining a high level of product quality.  CFLs can now be found in nearly every hardware and home improvement store and many grocery stores in New England.  Co-promotions with the lighting industry across the region increased product availability and sales to some of the highest levels in the country (about 5 percent of sales in Massachusetts).

• The ENERGY STAR Appliances Program: This initiative used joint and coordinated promotions by gas and electric program administrators in New England and New York to increase sales of ENERGY STAR clothes washers from less than 5 percent in 1998 to over 40 percent of sales by 2004. The success of this program helped to establish a new federal standard that begins in 2007.

Market Transformation for High Efficiency Clothes Washers in New England

Sue Coakley (seated, second from left); Glenn Reed (holding award) and Subid Wagley (standing, second from left), all from NEEP, join members of the Northeast ENERGY STAR Appliance and Lighting Initiative as the group is awarded its fifth consecutive ENERGY STAR Leadership in Energy Efficiency Award, presented by the US EPA and US DOE.

Meeting Regional Climate Change Goals

Going forward, increased energy efficiency may be called upon to resolve regional issues, including climate change goals adopted by Northeast governors, which call for stabilizing carbon dioxide (CO₂) emissions at 1990 levels by 2010. State leaders know that energy efficiency can be a key strategy to achieve quick, cheap carbon reductions.  The Regional Greenhouse Gas Initiative (RGGI or "ReGGIe"), a cooperative effort of nine Northeast and Mid-Atlantic states designing a regional cap-and-trade program for CO₂ emissions from power plants in the region, is exploring the potential carbon savings from energy efficiency.

Moderating Electric System Distribution and Transmission Constraints

Besides climate change goals, energy efficiency is also a valuable tool for easing electric system distribution and transmission constraints, which threaten system reliability in parts of New England and New York.   The New England Demand-Response Initiative developed a comprehensive, coordinated set of demand response programs for the New England regional power markets, and identified 38 major recommendations for incorporating demand response, including energy efficiency, in retail and wholesale electricity markets.

Easing High Energy Bills and Pipeline Constraints

The region also continues to be challenged by some of the highest electric and gas prices in the country, an issue of concern as electric rate caps established in utility restructuring expire in several states.  Currently, New England is running out of adequate gas pipeline capacity to meet the growing appetite for gas-fired power generation, and energy efficiency can be a large part of the solution for both issues.

Substantial Cost-Effective Energy Efficiency STILL Available

As Northeast states face the challenges of achieving climate change goals; increasing electric system reliability while decreasing transmission constraints; alleviating gas system constraints; and high energy costs, many are assessing the remaining potential for cost-effective, achievable energy efficiency.  This year, NEEP completed a summary analysis which found that sufficient cost-effective energy efficiency is available to more than offset projected load growth at a net savings to New England. 

Upcoming Event!!  On November 17 and 18, NEEP will host its annual regional conference in Waltham, MA to discuss these issues and consider policy options that can build on the tremendous results and capability that exists in the Northeast to increase energy efficiency. See www.neep.org for more information.

Sue Coakley is executive director and founder of Northeast Energy Efficiency Partnerships, Inc. Founded in 1996, NEEP regionally coordinates programs and policies that increase the use of energy efficient products, services and practices.

House Bill 653 vetoed by Governor 9/29/04