Legislation Crossfire Setting the Stage Legislation Crossfire Setting the Stage David K. Owens AABE Chair Legislative Issues and Public Policy Committee 2010 Annual AABE Conference May 20, 2010

America’s Challenges Stimulate economy and get America back to work Health Care (Legislation passed) Financial Reform Immigration Address climate change Transform our society to be greener and more efficient

Increases in Energy Prices Hit Low- and Fixed-Income Households the Hardest Income spent on energy for households earning >$50,000 / year - 7% of income $10,000 - $30,000 / year – 20% of income (25% of households) <$10,000 / year - 46% of income (8% of households) Households earning < $30,000 Mostly senior citizens, single parents, and minorities Force hard decisions about what bills to pay … housing, food, education, health care, and other necessities One-third of Americans shoulder major energy burden Sources: Redefining Progress; U.S. Census Bureau, Current Population Survey, 2006 Annual Social and Economic Supplement

Climate Change Questions We Must Answer! How do you minimize the impact of compliance costs on consumers? What must U.S. climate change legislation and carbon management strategy include to Ensure economic growth? Ensure energy security? Avoid unfairness?

Protecting Customers Targets & timetables Must be harmonized with the availability of technologies Timing of transition to full auction Allocation of allowances can help address cost of compliance Other ways to mitigate cost impacts on consumers Price collar / safety valve Offsets Strategic allowance reserve Combined efficiency and renewable energy standard

*Includes generation by agricultural waste, landfill gas recovery, municipal solid waste, wood, geothermal, non-wood waste, wind, and solar. ** Includes generation by tires, batteries, chemicals, hydrogen, pitch, purchased steam, sulfur, and miscellaneous technologies. Sum of components may not add to 100% due to independent rounding. Source: U.S. Department of Energy, Energy Information Administration, Power Plant Operations Report (EIA- 923); 2008 preliminary generation data. January 2010 © 2010 by the Edison Electric Institute. All rights reserved. Different Regions of the Country Different Fuel Mixes to Generate Electricity

African American Communities: Have high unemployment rates Have the lower median family income Are in regions heavily dependent on power generated by coal Have the least access to Renewable Energy May be Required to Purchase Renewable Energy From Other Regions of the Country Will be significantly impacted by Climate Change efforts

What Will It Take to Address Climate Change? Renewables Energy efficiency Clean coal technologies Carbon capture and storage Nuclear Plug-in hybrid electric vehicles (Smart grid) We need it all … but it will be costly! There is no silver bullet!

Energy Efficiency Can Lower Bills Help Address Climate Change Average US household owns 24 consumer electronic product s 2 DVRs use as much energy in 1 year as a refrigerator Play Station and X-Box use more electricity than a PC PCs and TVs now account for 10% of a home’s electricity usage 99% of these products must be plugged in or recharged 42” Plasma TV uses more than twice as much as a standard 27” TV More efficient use of energy could significantly reduce energy bills Need to educate all consumers about how to save energy and use it more efficiently

American Reinvestment and Recovery Act (ARRA) Total: $78 Billion

Beyond Green Jobs: America’s Future Energy Jobs Source:

Opportunities - Green Jobs Energy Independence and Security Act of 2007 $125 million / year to create a worker training program, special focus on opportunities for low income people American Reinvestment and Recovery Act (Stimulus Bill) Significant funding for a broad range of programs – including energy efficiency, renewables, climate change, smart grid Workforce training Home Star Energy Retrofit Act of 2010 Authorize $6 billion over 20 years for a national energy retrofit program for American homeowners

Opportunities - Green Jobs Renewables - Roof-top solar heating, water, energy Meeting the increasing state, federal and consumer requirements Energy Efficiency Energy audits, retrofits, new technologies, green building standards Efficiency management – data mining Smart meters / smart grid Replacing legacy systems with new technologies Demand response Provide consumers and utilities with new tools to manage demand Plug-in Hybrid Electric Vehicles Need programs to develop and attract new talent

What Do We Need To Do? Cost mitigation Mitigate the costs on low-and fixed-income consumers associated with the new energy and climate economy Jobs and Small Business Create jobs and business opportunities for minority communities, and for minorities in general; and Energy Literacy Facilitate improvements in energy literacy through education, training, and outreach