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April 2005
Newsletter Contents:
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Guest Highlight
Thomas Singer and Craig O’Hare of the Natural Resources Defense Council Explain why Energy Efficiency is Taking Off in New Mexico. |
Alliance to Save Energy Column
Feebates:
A “carrot and stick” approach to incentivizing efficient vehicles. |
State Updates
Legislative and Regulatory News from Alabama, Arizona, Arkansas, Colorado, Connecticut, Georgia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Texas, Vermont, Washington. |
RECA Report
Get the latest on the work of the Responsible Energy Codes Alliance (RECA).
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The Alliance Wants to Hear from You!
Contact us with suggestions or comments.
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Energy Efficiency Takes Off in New Mexico
By Thomas Singer and Craig O’Hare,
Natural Resources Defense Council
 New Mexico is now on a fast track to achieve significant savings of both electricity and natural gas due to passage of three important efficiency laws in the recent legislative session. The bills encountered virtually no opposition, due largely to consensus reached through a governor’s task force made up of efficiency advocates, state energy officials, investor-owned utilities, Rural Electrification Administration (REA) co-ops, business associations and consumer groups. The result: new utility and state programs that are estimated to save consumers over $765 million by 2020 through electricity savings of about 7 percent and natural gas savings of about 8 percent of total forecasted demand.
The three new laws are the Efficient Use of Energy Act, the Energy Efficiency and Renewable Energy Bonding Act, and amendments to the Public Facility Energy Efficiency and Water Conservation Act. These new initiatives complement the state’s existing Renewable Portfolio Standard, enacted in 2004, which requires the state’s investor owned electric utilities to provide 5 percent renewable energy in their mix by 2006 and 10 percent by 2011.
 The Efficient Use of Energy Act allows utilities to begin or expand efficiency programs. It instructs the New Mexico Public Regulation Commission (PRC) to require electric and gas utilities to develop cost effective programs that help residential, commercial and industrial consumers reduce energy consumption and peak demand. Proposed programs must be submitted to the PRC for approval, and they must be cost effective as determined by the Total Resource Cost Test (TRC). The state’s major utility, Public Service Co. of New Mexico (PNM), has just completed a study of the potential for natural gas efficiency measures. This study is providing the basis for new programs that are currently under design. The utility expects to submit gas programs to the PRC within the next few months for roll-out next winter. A second phase of programs targeting electricity savings will be developed in subsequent years.
The law also requires annual independent measurement, verification, and reporting of program expenditures and energy savings. Utility investment in efficiency is currently capped at 1.5 percent of revenues, although the cap can be raised if programs prove successful. Program costs will be recovered through an annual tariff rider. Since programs must be cost effective as measured by the TRC, these costs will be lower than costs consumers would otherwise face without the programs (i.e., gas purchases, new power plants). The law establishes programs for low income households and a “self-direct” program for large industrial customers. SWEEP, the Southwest Energy Efficiency Project, estimates that utilities are likely to invest roughly $7 million in energy efficiency in 2005, growing to $25 million annually by 2010.
 A second, pioneering new law is the Energy Efficiency and Renewable Energy Bonding Act. It authorizes the New Mexico Finance Authority (NMFA) to issue up to $20 million in revenue bonds, the proceeds of which are for energy efficiency and renewable energy projects in existing state agency, university, and public school buildings. Utility bill savings will be captured from the participating entities to pay debt service on the bonds, and up to ten percent of the savings above the money needed for debt service will be kept by participating agencies as an incentive to participate. Participation is voluntary.
The program requires the state energy office to develop an implementation plan that includes a detailed funding and construction schedule. In addition to efficiency, the plan must consider the maximum amount of on-site renewable energy measures possible while remaining revenue-neutral; i.e. the total cost of the plan must be covered entirely by the combined utility bill savings of both the renewable energy and energy efficiency measures undertaken. Priority will be given to those projects that can realize the greatest cost savings in the shortest time frame, and all installations must be completed by the end of fiscal year 2010.
 The third new efficiency law is an amendment to the Public Facility Energy Efficiency and Water Conservation Act that will make energy performance contracting more efficient and effective. This efficiency mechanism has been severely underutilized in New Mexico in recent years. While about $4 million in taxpayer dollars are already being saved each year as a result of 35 existing statewide contracts , greater use of these contracts will produce more savings. The amendments expand the types of guarantees that may be provided and reduce the amount of the guarantees, while authorizing use of Request for Qualifications (as opposed to RFPs) for soliciting bids from Energy Service Companies.
With these new laws in place, coupled with plenty of energy efficiency potential, and great public enthusiasm, all that remains is for us here in New Mexico is to roll up our sleeves and get to work!
Thomas O. Singer, Ph.D. is a Senior Policy Analyst with the Natural Resources Defense Council. NRDC is a national, nonprofit organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. Founded in 1970, NRDC has more than 1 million members and e-activists nationwide, served from offices in New York, Washington, Los Angeles and San Francisco.
Craig O’Hare was appointed by Governor Bill Richardson as the Special Assistant for Renewable Energy in the New Mexico Energy, Minerals and Natural Resources Department. He is responsible for guiding the implementation of the Governor’s clean energy agenda, in particular: energy efficiency and renewable energy.
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 Feebates:
A “carrot and stick” approach to incentivizing efficient vehicles
By Anna Carmichael
Here are the facts: the transportation sector consumes 75 percent of the oil we use in this country (two-thirds of which goes to power our vehicles); and releases one-third of all U.S. carbon dioxide emissions. Yet, since 1973, Congress has done little to enact policies that would reduce transportation-related oil consumption or discourage the use of inefficient vehicles. So several states are moving ahead and circumnavigating the federal government in order to enact meaningful energy-efficient transportation polices.
One relatively new policy that several states are considering is a “feebate.” A feebate is a financial mechanism that encourages the purchase of efficient vehicles while discouraging consumers from buying inefficient vehicles. It can work several ways, but the basic idea is that a government body establishes “set-points” for vehicles. Purchasers of vehicles below the set-point (vehicles with poor fuel economy) would pay a fee, and purchasers of vehicles above the set point (vehicles with better fuel economy) would receive a rebate.
 This “set-point” could be established between each class of vehicles (there are 13 overall classes of vehicles that range from two-seater cars to SUVs), or within each vehicle class. In the first case, passenger cars would receive a majority of the rebates, while trucks would pay most of the fees. If the set-points are established within each class, purchasing the most efficient vehicles will be rewarded, while purchasing the least efficient vehicles in each individual vehicle category would be penalized. In this second scheme, SUVs  would not compete against two-passenger cars; instead they would compete against other SUVs.
For example, Ford’s new hybrid Escape would be measured against something like the Mercedes-Benz G55 AMG: the Escape gets 33 miles per gallon (MPG) and the BMW G55 gets 13 MPG, so consumers who purchase the Escape would receive the rebate. Depending on how the program is structured, it can be revenue-neutral, or can even generate funds. Both Connecticut and Vermont are considering legislation to enact a feebate system.
 Thanks to a bill that came into effect in October 2004, a consumer purchasing a hybrid in Connecticut currently pays no sales tax. The Connecticut State Legislature is considering a new bill (AB 6908), introduced on March 10, (the bill recently passed the Legislative Commissioner’s Office on 4/13) that would change the sales tax level for all vehicles sold in the state. It would increase the sales tax above the current 6 percent for the least efficient vehicles, and lower it for more efficient vehicles. If the bill passes, the sales tax rates would drop to 3 percent on fuel-efficient vehicles such as the Ford Focus station wagon and the Toyota Corolla, for savings of $460 to $870 to the consumer.
Conversely, the sales tax would increase up to 9 percent for the purchase of fuel-inefficient vehicles like the Dodge Viper and the Lincoln Navigator, resulting in an extra cost of $1,598 or more per vehicle. The net sales tax revenues generated by this clean car incentive bill would be placed into a fund dedicated to reducing harmful air emissions. The first $1 million in the fund would be used to retrofit old school buses with emissions control equipment or to replace them with low-emissions models.
In Vermont, the legislature also is considering a feebate. HB 444 , which was introduced on March 8, would impose a fee of $500 on the purchase of vehicles that get 21 MPG or less in city driving. The money collected from the fee would be awarded as a rebate to consumers who purchase a vehicle that gets over 35 MPG. The rebate could be as high as $5,000 per fuel-efficient vehicle!
The Alliance supports the feebate structure and is currently exploring a national feebate system with interested policy makers in Washington D.C. We will keep you updated on our progress, and also will keep you informed about the feebates pending in the states.
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Alabama
Senate Bill 363 Passed Finance and Taxation Committee 3/1/05
SB 363 would exempt the sale of some energy-efficient products from any state, county, and municipal sales and use taxes during the month of October 2005.
Click here for more information.
Arizona 
House Bill 2390 Passed the House 3/24/05, Passed the Senate Committee of the Whole 4/13/05
HB 2390 would set standards for fifteen energy-efficient appliances sold in Arizona.Click here for more information.
Arkansas
House Bill 2935 First Amendment Read and Adopted by the House Committee on Revenue & Taxation 3/24/05
HB2935 would exempt purchasers of hybrid vehicles from the state sales tax.
Click here for more information.
Colorado
House Bill 1133 Passed the House 3/14/05, Passed with Amendments in the Senate 4/4/05
HB 1133 would authorize local governments to require investor-owned electric and gas utilities to collect an energy efficiency surcharge from customers and to direct the revenue into programs that promote the installation of cost-saving measures. It also would direct the public utilities commission (PUC) to adopt rules for distributors of natural gas to engage in conservation and energy efficiency programs, and require periodic reports subject to PUC review and approval.
Click here for more information.
House Bill 1162 Passed the House and Senate and now awaits signature into law by the Governor
HB 1162 would adopt statutory energy-efficiency standards for certain household appliances, commercial equipment and traffic signals sold in Colorado on or after January 1, 2008 or installed in Colorado on or after January 1, 2009.
Click here for more information.
Connecticut
House Bill 5567 Referred to the Office of Legislative Research and Office of Fiscal Analysis 4/6/05
HB 5567 would ensure that the energy conservation and load management program funds are not diverted for any other purpose.
Click here for more information.
House Bill 6908 Filed with the Legislative Commissioners Office 4/1/05
HB 6908 would provide purchasers of low emission vehicles a sales tax reduction of up to 3% of the vehicle purchase price.
Click here for more information.
Senate Bill 923 passed the Joint Committee on Government Administration and Elections 3/31/05
SB 923 would require certain state-financed construction projects to meet or exceed the Leadership in Energy and Environmental Design’s silver building rating.
Click here for more information.
Georgia
House Bill 559 Passed the Senate and the House now awaits signature into law by the Governor
HB 559 would exempt certain energy efficient products from state sales and use taxes for a limited period of time.
Click here for more information.
Hawaii
Senate Bill 1427 Passed the Committee on House Finance 3/30/05
SB 1427 would require governmental bodies to procure highly efficient vehicles when purchasing motor vehicle fleets.
Click here for more information.
Illinois
Senate Bill 250 Referred to the Senate Rules Committee 3/24/05
SB 250 would require the Capital Development Board to implement the Leadership in Energy and Environmental Design green building rating system and require any new building, repair, or retrofit construction work authorized by the Board to meet LEED requirements for certification.
Click here for more information.
Iowa
House Bill 606 Introduced and Referred to Ways and Means Committee 3/7/05
HB 606 would exempt the purchase of clothes washers, refrigerators, and dishwashers that meet federal Energy Star energy efficiency standards from sales and use taxes, starting January 1, 2006.
Click here for more information.
Maine
House Bill 999 Referred to the Joint Committees on Utilities and Energy 3/22/05
HB 999 would set minimum energy efficiency standards on nineteen products sold or installed in Maine and would authorize the Public Utilities Commission to establish higher energy efficiency standards and to adopt standards for additional products.
Click here for more information.
House Resolution 751 Referred to the Joint Committees on Utilities and Energy 3/8/05
HR 751 would require the Public Utilities Commission to propose energy efficiency standards for residential rental properties that are occupied year-round. The properties not currently meeting standards must be brought up to code by January 1, 2010 or within 90 days of sale, whichever comes first.
Click here for more information.
Maryland
House Bill 367 Passed the House 2/24/05 and Passed the Senate and now awaits signature into law by the Governor
HB 367 would reinstate an expired provision exempting qualified hybrid vehicles from emissions testing and inspection requirements.
Click here for more information.
House Bill 490 Passed the House 3/28/05, Referred to Finance Committee 4/7/05
HB 490 would establish an Energy-Saving Investment Program (ESIP) to provide funding for energy efficiency programs and would require specified electric and gas customers to contribute to the fund through an energy-saving investment charge.
Click here for more information.
Massachusetts
Senate Bill 497 Referred to Joint Committee on Environment, Natural Resources and Agriculture 3/16/05
SB 497 would establish a tax credit for green buildings, green base buildings, green tenant space, a fuel cell, or photovoltaic modules.
Click here for more information.
Senate Bill 1380 Referred to Joint Committee on Public Safety and Homeland Security 3/22/05
SB 1380 would exempt low emission vehicles from maintenance and emissions inspections.
Click here for more information.
Senate Bill 1821 Referred to Joint Committee on Telecommunications, Utilities and Energy 1/26/05
SB 1821 would establish minimum energy efficiency standards for 18 products.
Click here for more information.
Minnesota
Senate Bill 1536 Passed the Senate Transportation Committee, 4/4/05
SB 1536 would allow hybrid vehicles to drive in high-occupancy vehicle lanes.
Click here for more information.
Senate Bill 1685 Introduced and Referred to Senate Taxes Committee 3/14/05
SB 1685 would provide a property tax valuation reduction for the construction of new energy-efficient commercial property that will consume 20% less energy than the standard set in the state energy code rules.
Click here for more information.
New Jersey
House Bill 3930 Introduced and Referred to Assembly Environment and Solid Waste Committee 3/10/05
HB 3930 would require existing State buildings to be evaluated under certain energy and environmental performance standards and new State buildings to be designed and managed using those standards.
Click here for more information.
New Mexico
House Bill 619 Passed the House 2/28/05 and the Senate, signed by the Governor
HB 619 would amend the Public Utility Act (PUA) to encourage utility investment in energy efficiency and load management programs by allowing public utilities to recover, in an expedited manner, reasonable and prudently incurred program expenses.
Click here for more information.
New York
Senate Bill 2730 Introduced and Referred to Committee on Senate Environmental Conservation 2/25/05
SB 2730 would require the Commissioner of Environmental Conservation to promulgate rules and regulations implementing carbon dioxide reductions by major electric generating facilities.
Click here for more information.
North Carolina
House Bill 445 Referred to Committee on Finance 3/2/05
HB 445 would provide an income tax credit of up to $2,000 for builders and purchasers of energy-efficient homes.
Click here for more information.
House Bill 454 Referred to Committee on State Government 3/3/05, Companion Bill S.402 Referred to Committee on Commerce 3/7/05
HB 454 would clarify that guaranteed energy savings contracts (GESCs) include conservation measures for water and other utilities, would raise the cap for GESCs, and would expand the state’s energy policy and life-cycle cost analysis to include the conservation of water.
Click here for more information.
Senate Bill 1015 Referred to Committee on Finance 3/24/05
SB 1015 would create a tax credit of up to $2,000 for the purchase or lease of alternative fuel vehicles.
Click here for more information.
Senate Bill 1038 Referred to Agriculture/Environment/Natural Resources Committees 3/24/05
SB 1038 would create a mobile source emissions reduction program fund through an emissions-based surcharge on vehicle registration fees.
Click here for more information.
Ohio
Senate Bill 84 Referred to Senate State & Local Government & Veterans Affairs Committee 3/2/05
SB 84 would create the Hybrid Vehicle Acquisition Study Committee for the purpose of studying the feasibility of replacing the existing state motor vehicle fleet with hybrid vehicles.
Click here for more information.
Oklahoma
Senate Bill 610 Passed the Senate 3/16/05, Passed the House and now awaits signature into law by the Governor.
SB 610 would create an income tax credit of up to $4,000 for energy efficient residential construction.
Click here for more information.
Texas
House Bill 2129 Passed the Environmental Regulation Committee 3/31/05
HB 2129 would require the state energy conservation office to determine whether setting appliance standards for products currently not covered under Texas law would reduce the emission of air contaminants. If so, the energy office would have to complete a cost-benefit analysis to consumers of setting standards for those appliances.
Click here for more information.
House Bill 2857 Referred to Environmental Regulation Committee 3/17/05
HB 2857 would increase certain energy efficient standards for new residential construction.
Click here for more information.
Senate Bill 953 Referred to Business and Commerce Committee 3/14/05
SB 953 would authorize the commission to establish an energy-efficient building accreditation program that would provide home buyers with energy-efficient building scorecards that could help buyers compare potential homes and qualify for energy-efficient mortgages under the National Housing Act.
Click here for more information.
Vermont
House Bill 444 Assigned to Transportation Committee 3/8/05
HB 444 would create a gas guzzler surcharge of $500 on the purchase or use of a 2005 or later model vehicle with a gross vehicle weight of 10,000 lbs or less if that vehicle is rated by the federal government as getting 21 mpg or less in city driving. It would also create energy conservation rebates of up to $5,000 to each tax-paying purchase of 2005 or later model vehicles with a gross vehicle weight of 10,000 lbs or less if that vehicle is rated by the federal government as getting 35 mpg or more in city driving.
Click here for more information.
Senate Bill 52 Passed Senate 2/24/05, Referred to House Commerce Committee 4/14/05
SB 52 would establish a renewable energy portfolio standard, would establish specific energy efficiency standards to apply to 19 products.
Click here for more information.
Washington
House Bill 1010 Referred to Rules Committee 3/16/05
HB1010 would require each electric utility, investor-owned utility, and consumer-owned utility in the state to develop an integrated resource plan.
Click here for more information.
House Bill 1272 Passed House 3/4/05, Public Hearing Held in Senate Water, Energy & Environment Committee 3/24/05
HB 1272 would require new public buildings to meet high-performance green building standards.
Click here for more information.
House Bill 1397 Passed House 3/16/05, Companion bill S.5397 passed Senate and now awaits signature into law by the Governor.
HB 1397, similar to California’s “Pavley Bill”, requires Washington to adopt California’s low emissions vehicle program for vehicles of the model year 2009 and thereafter by December 31, 2005.
Click here for more information.
Senate Bill 5098 Passed Senate 3/11/05, Passed to House Rules Committee for Second Reading 4/1/05
SB 5098 would establish minimum efficiency standards for 12 products.
Click here for more information.
Senate Bill 5100 Public Hearing Held in Senate Ways & Means Committee 3/7/05
SB 5100 would establish greenhouse gas reduction objectives and strategies.
Click here for more information.
Senate Bill 5509 Passed Senate 3/11/05, Passed House 3/30/05, Signed By the President of the Senate 3/30/05, Signed by the Governor 4/8/05
SB 5509 will require public buildings to be built using high-performance green building standards.
Click here for more information.
Senate Bill 5916 Referred to Rules Committee 4/1/05
SB 5916 would provide tax incentives for clean and alternative fuel vehicles.
Click here for more information.
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The Responsible Energy Codes Alliance (RECA) continues its work to promote adoption of the International Energy Conservation Code (IECC). In March, RECA and its members were active in Arizona, Indiana, Michigan, Minnesota, New York and North Carolina. States to watch for code developments in the months ahead are Indiana, Minnesota and North Carolina. In excitng news, the city of Phoenix adopted the 2004 IECC on March 30, 2005!
Click here to visit the RECA website for more information.
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