Legislation Issues and Public Policy Committee Update David K. Owens Chair of Legislation Issues and Public Policy Committee America Association of Blacks in Energy June 13, 2009

Agenda Status of Stimulus Funding Legislative and Public Policy Development Near-Term Challenges Action Items for Legislation Issues and Public Policy Committee

ARRA Energy Stimulus Funding Total: $78 Billion

Energy Efficiency

State of Funding Federal agencies submit weekly reports showing American Recovery and Reinvestment Act funds made available and paid out. (Amounts shown $B) Source: Federal Agency Financial Activity Reports

How Will The Money Flow? DOE Direct Expenditures Clean coal, carbon capture and storage demo, etc. DOE Indirect Expenditures State block grants, appliance matching grants, etc. DOE Loan Guarantee Directly To Federal Agencies Other Than DOE NIST - Smart Grid Interoperability Standards Federal Bonding Authority Western Area Power Marketing Administration Tax Breaks

Pending Legislation

Climate Policy in the 111th Congress H.R. 2454 The American Clean Energy and Security Act of 2009 Passed by House Energy & Commerce Committee Additional hearings contemplated Up to 8 committees may take it up Waxman wants committee process done by July 4 Full House consideration pending Senate: Ultimate process unclear Energy Committee addressed transmission and other energy issues Climate handled by Environment Committee; schedule unknown Start with HR 2454 or own bill? Sen. Boxer formed working groups to address key issues Current focus on RES and energy, then on transmission and climate?

Key Elements of H.R. 2454 Economy-wide Targets and timetables – below 2005 3% by 2012, 17% by 2020, 42% by 2030, 83% by 2050 Combined Renewable Energy Standard and Energy Efficiency Resource Standard 20% renewables by 2020 with 2.5¢ / kWh alternative compliance payment 75% must be met with renewables Governor can petition to meet 40% with energy efficiency Effectively allows RES at 12-18% and EERS of 2-8% Alternative compliance payments stay within state

Key Elements of H.R. 2454 Cap and Trade - Auctions and Allowances Exclusively for the “benefit of customers” 35% of allowances to electric sector until 2025 with 5 yr phase-out 30% to local distribution companies (LDCs) 50% based on emissions, including purchased power 50% based on retail sales 5% to merchant coal generators and generators with long-term contracts (PPAs) Up to 3.5% for merchant coal PPAs get allowances equal to carbon costs

Key Elements of H.R. 2454 Cap and Trade - Auctions and Allowances (Continued) Natural gas – 9% for 2016-2025, 7.2% for 2026, 5.4% for 2027, 3.6% for 2028, and 1.8% for 2029 Home heating oil and propane – 1.875% for 2012-2013; 1.67% for 2014 and 2015, 1.5% for 2016-2025, 1.2% for 2026, 0.9% for 2027, 0.6% for 2028, and 0.3% for 2029 Low-income consumers – 15% auctioned annually by the Administrator, with the proceed to fund the Consumer Assistance Program established in the legislation.

Key Elements of H.R. 2454 Commercial / residential building code targets 30% improvement w/in 3 years, 50% improvement after 2016 New energy efficiency standard for outdoor lighting fixtures

Financial Impacts of Climate Change EPA Household spending would drop by about $140 / year by 2020; gas prices would increase 33 cents / gallon by 2030 CRAI (for National Black Chamber of Commerce) By 2015; $730 / year less in household purchasing power, electric rates would increase 7.3% by 2015; gas prices by 12 cents / gallon Heritage Foundation By 2035 electricity rates would increase by 90%, gas prices by 74%, household energy bills by $1500 It’s ALL About the Assumptions!

Transmission Siting Many perceive EPACT 2005 FERC backstop authority as ineffective—limited by Piedmont Environmental Council v. FERC (4th Circuit) Several Senate bills would give FERC more transmission siting authority for facilities above 345 KV. Will they: Require interconnection-wide planning? Apply to facilities that primarily serve only renewables? Address cost allocation issues? Expand PMAs? Waxman-Markey avoids transmission, other than to encourage planning

What Are AABE’s Concerns? Climate Change Potential impacts of climate change legislation on African-Americans and other minorities? How do you minimize compliance costs on low-income consumers? What must U.S. climate change legislation and carbon management strategy include to ensure economic growth and energy security and avoid unfairness? Energy Efficiency How significant of a role can energy efficiency play in the future? How can African-Americans benefit and actively participate in energy efficiency programs from the residential and commercial perspectives? Renewable Technology How much can increased renewable capacity contribute going forward? How can renewables be utilized without substantially raising energy bills for low- and fixed-income households? 15

Key Elements of AABE Climate Change Principles AABE supports Cost effective GHG reductions Inclusion of all sectors of the economy and all sources of GHG Consistency of compliance timetables w/ technology development Balancing economic improvements with economic development Ensuring low / fixed income consumers are not disproportionately impacted Cost containment measures Green jobs, economic development, maintain trade balances Preserving all energy options – energy efficiency, renewables, advanced nuclear, carbon capture and storage Public / private partnerships – research, development & deployment Use of alternative fuels and needed infrastructure

Key Elements of AABE Energy Efficiency Principles ABBE supports Enhancements to US energy infrastructure for the development and implementation of energy efficient technologies Focused national, regional and local effort to educate and make available to all consumers a broad range of options to encourage energy efficiency Aggressive campaign for the promotion of energy efficiency technologies including “smart” buildings, appliances, grid and electric meters Optimizing domestic and foreign energy resources while promoting energy security, economic prosperity and environmental solutions Government and commercial suppliers making necessary energy efficiency upgrades to residential and commercial customers

Key Elements of AABE Renewables Principles AABE supports Renewables as part of an overall strategy for meeting energy and climate change challenges Renewable programs that carefully balance the availability of renewable technologies, their cost effectiveness and environmental benefits Recognition of renewable energy standards being developed at the state level Research, education and training for African-Americans to expedite the development of renewable energy solutions Renewable and alternative fuels and needed infrastructure Working with regional and local communities on renewable programs

Some Near-Term Challenges Full funding of Low Income Energy Assistance Program (LIHEAP) Educate and inform consumers about stimulus package and access to funding for weatherization and related programs Support Energy Efficiency Programs Educate consumers on how to use energy more efficiently to lower bills Ensure low- and fixed-income customers participation Secure funding for programs to assist low- and fixed-income families Promote understanding of implications of Climate Change laws Recognize the potential impacts on economic growth and energy security Minimize impact on low- and fixed-income consumers (cost containment) Ensure fairness and equity (environmental justice) Support national commitment / action to accelerate needed technologies

Some Near-Term Challenges Promote understanding of implications of Renewable Energy Standards Impact on energy bills Enhancing economic development Expediting development of renewable technologies Encourage Green Jobs Support minority- and women-owned businesses (supplier diversity) Mobilize economic development in communities Support cooperative effort with government, business and industry Create excitement around Engineering, Mathematics and Science Support programs to replace the aging workforce and to develop technical and strategic leaders Support scholarships, internships and mentorships

New-Term Action Items Congressional Outreach (July – December 2009) Congressman Charles B. Rangel (D-NY) Chairman, Ways and Mean Committee Vice Chair, Joint Taxation Committee Congressman Henry A. Waxman (D-CA) Chair, Energy and Commerce Committee Congressman Edward J. Markey (D-MA) Energy and Commerce Committee Chair, Select Energy Independence and Global Warming Others

New-Term Action Items Webinar on H.R. 2454 (July 2009) Overview of key provisions relating to climate change, energy efficiency, and renewables. Energy Summit (September 2009) Dialogue with key public policy leaders and coalition building. Could include, EPA Administrator Lisa Jackson, Majority Whip James Clyburn and such groups as the Joint Center for Political and Economic Studies and the National Black Chamber of Commerce. Participate in Congressional Black Caucus Foundation Dialogue in Tunica, MS Develop and Implement Community Outreach Program