September 2006
Newsletter Contents:
Guest Highlight
Jason Barbose of Environment California discusses the significance of the groundbreaking greenhouse gas legislation recently passed by the California Legislature.
Alliance to Save Energy Column
Policy Director Kara Rinaldi analyzes the Regional Greenhouse Gas Initiative's recently released Model Rule from an energy-efficiency perspective.
State Updates
Legislative updates from California, Illinois, New Jersey, and North Carolina.
California Passes Historic Global Warming Bill: Governor Announces He’ll Sign AB 32
By Jason Barbose
Global Warming Advocate, Environment California
 On August 30, leaders in the California Legislature and Governor Arnold Schwarzenegger announced they had reached an agreement on California’s historic global warming bill, AB 32.
At a press conference flanked by the Senate President Don Perata, and AB 32 co-author Fran Pavley, Speaker Fabian Nuñez announced that the legislature was moving forward in the last two days of the legislative session to pass the nation’s first-ever statewide cap on global warming pollution.
The bill went on to pass the Senate 23-14 and the Assembly 47-32, signaling a historic moment and another shining example of California’s outstanding leadership in solving some of the most pressing environmental problems. Once AB 32 clears the Governor’s desk, California will be poised to lead the nation and the world in solving global warming.
AB 32 will first charge the California Air Resources Board with creating a mandatory reporting program for greenhouse gas emissions beginning with the largest polluting sectors such as electric power companies, oil refineries, landfills, and cement manufacturers.
CARB will then cap statewide greenhouse gas emissions at 1990 levels by 2020. In order to meet the cap, an initial set of regulations will go into place by 2010 with another set taking effect by 2012.
In the end, AB 32 will reduce greenhouse gas emissions in California by 25% compared to business-as-usual - 174 million metric tons – by 2020. It has been estimated that the reductions will add 83,000 jobs and $4 billion in economic growth to the state.
Some of the key strategies that will be used to meet the reductions will be California’s clean car standards (AB 1493), currently being challenged in court but set to take effect in 2009, as well as the state’s renewable portfolio standard and energy-efficiency programs.
As the 12th largest source of global warming pollution in the world, California knows that it can make a real difference in fighting to solve global warming. In addition, AB 32 supporters are working to make sure the landmark legislation is a model for other states and, eventually, the entire country to follow.
Environment California is a statewide nonprofit, nonpartisan group with 80,000 members working for clean air, clean water, and open space. Our mission is to deliver long term concrete solutions that protect California’s environment and public health. For more information on AB 32 and other global warming solutions, visit Environment California at www.EnvironmentCalifornia.org.
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 Northeast States Release Model Rule for Climate Plan
By Kara Saul Rinaldi
Policy Director, The Alliance to Save Energy
On August 15, 2006, the seven Northeastern states that make up the Regional Greenhouse Gas Initiative (RGGI) released the Model Rule for how they plan to reduce greenhouse gases emissions in the region. The first mandatory cap-and-trade program for carbon dioxide in U.S. history, RGGI focuses on reducing the carbon pollution that contributes to global warming from the region’s power plants. The revised Model Rule contains the agreed policies which each state will now move to implement in the form of legislative or regulatory proceedings.
The participating states – Connecticut, Delaware, Maine, New Hampshire, New Jersey, New York, and Vermont – expect to be joined by Maryland by June 2007 and efforts continue to bring Massachusetts into the program. With more than two years to undertake the necessary legislative and regulatory actions, these states will officially adopt the program on January 1, 2009.
Under RGGI, the participating states will use emissions credits or allowances under a regional cap-and-trade program to limit the region’s CO2 emissions. Between 2009 and 2015, the region will stabilize its emissions of CO2 by capping the region’s power plants at its current levels (about 121 million tons annually). The states would then reduce CO2 emissions by about 10 percent by 2019 which is 35 percent below the region’s estimated emissions without the program.
The Alliance to Save Energy and others have advocated that energy efficiency play a strong and explicit role in state efforts to reduce emissions as part of the RGGI program. The Model Rule currently requires states to allocate at least 25 percent of their emission allowances for "consumer benefit or strategic energy purposes." In the RGGI Memorandum of Understanding (MOU) that was signed by the participating states in December 2005, energy efficiency is explicitly called out as one of the measures that would qualify for this 25 percent allocation. The Model Rule, however, does not provide that specific guidance.
Allocating the majority of consumer allowances to energy efficiency will provide the greatest net benefits to customers. The Alliance not only encourages the participating states to maximize their use of energy efficiency in their consumer benefit allowance, but to treat the 25 percent requirement as a "floor," not a "ceiling," for the dedication of allowances. Even a doubling of the 25 percent allocation would prove cost-effective and sustainable for the region.
The RGGI states may also wish to consider complementary efficiency policies – tax incentives, energy-efficiency resource standards, appliance standards – that would further reduce emissions and the overall cost of the RGGI program. By implementing innovative policies, maximizing the use of energy efficiency in the consumer benefit allocation, and enacting strong energy-efficiency legislation, energy efficiency could play a vital role in the groundbreaking CO2 emissions reductions in the Northeast over the next decade and beyond.
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California
Assembly Bill 32
Passed Senate 8/30/06, Passed Assembly with Senate Amendments 8/31/06, Sent to Governor 9/5/06
AB 32 would require the California Climate Action Registry to create a mandatory reporting program for greenhouse gas emissions of the largest polluters, such as electric utilities and oil refineries, and would create a greenhouse gas emissions cap by reducing emissions to 1990 levels by 2020. For a more detailed analysis, see the Guest Article above.
Assembly Bill 993
Passed Senate 8/22/06, Re-referred to House Committee on Higher Education 8/23/06
AB 993 would require California Community Colleges to encourage one or more Economic and Workforce Development Program regional centers to develop an energy-efficiency training course for facilities managers.
Assembly Bill 1012
Passed Assembly 6/01/05, Passed Senate Committee on Appropriations 8/21/06
AB 1012 would require the state board, by January 1, 2008, to develop and adopt regulations to take effect no later than January 1, 2010, to increase the use of clean alternative fuels for motor vehicles.
Assembly Bill 1337
Passed Assembly 5/27/05, Passed Senate Committee on Appropriations 8/21/06
AB 1337 would enact the Green Building Act of 2006 and would require the California Integrated Waste Management Board to develop and adopt regulations for green building standards for the construction or renovation of state buildings by January 1, 2008, and would require that all state buildings beginning construction or renovation after January 1, 2009 be designed and operated according to those regulations.
Assembly Bill 1925
Passed Assembly 5/30/06, Passed Senate Appropriations Committee 8/23/06
AB 1925 would require a report to the legislature with recommendations for how the state can accelerate the adoption of cost-effective geologic sequestration strategies for industrial carbon dioxide.
Assembly Bill 2021
Passed Assembly 05/31/06, Passed Senate Committee on Appropriations 8/21/06
AB 2021would require the Energy Commission to identify all potentially achievable, cost-effective electricity and natural gas efficiency savings and establish statewide annual targets for energy-efficiency savings and demand reduction over 10 years.
Assembly Bill 2160
Passed Assembly 05/31/06, Passed Senate Committee on Appropriations 8/21/06
AB 2160 would require the Sustainable Building Task Force and Technical Group to define a life cycle cost assessment methodology to be used for state building and construction decisions. It would require the State Energy Resources Conservation and Development Commission to identify and develop financing to facilitate state building energy or resource-efficient projects, and identify appropriate incentives to facilitate those projects.
Assembly Bill 2600
Passed Assembly 5/22/06, Passed Senate Committee on Appropriations 8/9/06
AB 2600 would extend the requirement regarding issuance, distinctive decals, labels, and other identifiers for vehicles that meet California's super ultra-low emission vehicle standards for exhaust emission, and the federal inherently low-emission vehicle (ILEV) evaporative emission standards.
Assembly Bill 2928
Passed Assembly 5/30/06, Passed Senate but Motion to Reconsider Granted 8/23/06
AB 2928 would require the California Integrated Waste Management Board to develop, adopt and make available voluntary green building guidelines for residential home construction by January 1, 2008.
Senate Bill 757
Passed Senate 5/31/06, Passed Assembly 8/24/06
SB 757 would, among other measures, require the California Environmental Protection Agency (EPA) to adopt recommendations, policies and programs by January 1, 2007, to reduce the rate of growth in petroleum consumption and increase transportation energy efficiency, and the use of alternative fuels. It also would require the secretary of the California EPA to take action to influence the United States Congress and Department of Transportation to double the combined fuel economy of cars and light trucks by 2020.
Senate Bill 1250
Passed Senate 6/1/06, Passed Assembly Committee on Appropriations 8/17/06
SB 1250 would allow the California Public Utilities Commission to use energy-efficiency funds to create incentives for the purchase of energy-efficient refrigerators.
Senate Bill 1368
Passed Senate 6/1/06, Passed Assembly Committee on Appropriations 8/21/06
SB 1368 would prohibit any load-serving entity and any local publicly owned electric utility from entering into a long-term financial commitment unless any baseload generation complies with a greenhouse gas emission performance standard, to be established by the Public Utilities Commission, the Energy Commission, and the State Air Resources Board, by February 1, 2007 for load-serving entities, and by June 30, 2007 for local publicly-owned electric utilities.
Senate Concurrent Resolution 132
Adopted by Assembly 8/24/06, Returned to Senate for Concurrence 8/28/06
SCR 132 would proclaim November 2006 as Hybrid Vehicle Awareness Month.
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Illinois
Senate Bill 1827
Signed into Law 7/31/06
Senate Bill 1827 (Public Act 094-1062) extends the maximum payback period of energy savings contracts entered into by local governments, public universities, and public community colleges from ten years to twenty years.
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New Jersey
Senate Bill 2146
Introduced and Referred to Senate Economic Growth Committee 7/28/06
SB 2146 would require new state buildings to be designed and managed to meet Silver level certification under the Leadership in Energy and Environmental Design (LEED) Green Building Rating System.
Senate Bill 2147
Introduced and Referred to Senate Economic Growth Committee 7/28/06
SB 2147 would expand the definition of demand side management programs in the Board of Public Utilities to include low-interest loans and grants to municipalities for energy-efficient programs and innovative energy technologies.
Senate Bill 2148
Introduced and Referred to Senate Economic Growth Committee 7/28/06
SB 2148 would require the Board of Public Utilities to give preference to Energy Star certified residences in regards to their financial incentives for photovoltaic equipment.
Senate Bill 2149
Introduced and Referred to Senate Economic Growth Committee 7/28/06
SB 2149 would require agents purchasing on behalf of the state to complete a course in green product purchasing. It would also require the Department of the Treasury to compile and maintain a list of green product purchasing sources.
Senate Bill 2151
Introduced and Referred to Senate Economic Growth Committee 7/28/06
SB 2151 would require affordable housing that receives credit under the Fair Housing Act to be built to green building standards, to be issued by the Commissioner of Community Affairs.
Senate Bill 2153
Introduced and Referred to Senate Economic Growth Committee 7/28/06
SB 2153 would stop requiring municipalities to follow the pricing guidelines set by the Board of Public Utilities that establish the methodology for computing energy cost savings for municipal contracts (of up to 15 years) for energy efficiency services and goods. With this change, local contracting units and vendors would be free to determine when the long-term contracts are in the best interests of the municipality.
Senate Bill 2154
Introduced and Referred to Senate Economic Growth Committee 7/28/06
SB 2154 would authorize the Commissioner of Community Affairs (the Commissioner) to amend the Uniform Construction Code’s energy subcode to establish enhanced energy-saving construction requirements. The Commissioner would be required to adopt those enhanced requirements whose additional cost would be offset in less than seven years. It would also require the Commissioner to establish a program to assist homebuyers, by providing funding assistance for the purchase of homes which have increased costs attributed to enhanced energy conservation standards.
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North Carolina
Senate Bill 402
Signed into Law 8/3/06
SB 402 (Session Law 2006-190) clarifies that guaranteed energy savings contracts include conservation measures for water and other utilities. It also raises the cap for guaranteed energy savings contracts from $50 million to $100 million.
Senate Bill 2051
Signed into Law 8/8/06
SB2051 (Session Law 2006-206) plans to reduce energy, fuel, and water consumption by, among other measures, studying mechanisms to improve energy and water conservation in state-owned facilities.
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