Energy posts from the Daily Score blog - Sightline Daily

Keeping PACE with Energy Efficiencies

Roger Valdez — Fri, 20 Nov 2009 09:26:07

Someone recently said “energy efficiencies aren’t low hanging fruit, they are the fruit lying on the ground.” Then why don’t people retrofit their homes? There are a lot of reasons, but one of them is finding the money to pay for efficiencies up front. While innovative financing tools (like my favorite bond financing) can help, they are only part of the solution.

An article in the New York Times this week called “A Stimulus That Could Save Money” traverses a well worn path in the discussion of energy efficiencies, asking the question “what will make people retrofit their homes?” The article doesn’t have any shockingly new ideas, but the discussion does surface the concept of Property Assessed Clean Energy financing—or PACE.

Now, sidestepping for a moment the obvious answer, “you can sell the energy efficient home for more money,” PACE is an interesting way of paying for the retrofits as part of regular property taxes. This is another version of “on bill” financing that puts the payments back on the owner’s property tax bill rather than on their utility bill.

PACE enables a property owner to pay for efficiencies over time, and if she sells the home, the new owner would pick up the payments as part of their regular property taxes. The program is funded and financed, typically, with bonds that are sold by local governments. PACE legislation allows bonds to be sold for this purpose and for a lien to be placed on property so the payments are attached to the property—not the owner.

New York State, with some fanfare, just this month passed PACE legislation and the Oregon legislature passed HB 2626 earlier this year, allowing PACE as a tool to create demand for retrofits.

Oregon’s legislation sets up the Energy Project Bond Loan Fund, and the Energy Revenue Bond Fund, allowing the state Department of Energy to sell bonds to finance local retrofits. In turn, the money generated from the sale can fund smaller loans, not to exceed $40,000 per project.

Oregon’s PACE program also provides funding of renewable energy projects, like solar, wind and geothermal, with money from these funds.

Since the legislation was just passed, it is going to be some time before we see how the program affects demand and whether it creates new jobs. California was among the earliest adopters of the program, passing their PACE legislation in 2008.

Now as much as I love the idea of government borrowing money using bonds to finance serious retrofits paid back on property tax bills (a twofer: debt and taxes!), PACE is not a silver bullet solution.

So far the California program started slow, inspiring only hundreds in a state with more than 5 million single family homes, to take on renewable energy and efficiency projects. And all 40 of the Berkeley residents participating in the program opted for solar panels, not efficiencies. There is nothing wrong with solar panels, but tricking out a house with expensive renewable energy equipment when the underlying house might be an energy hog doesn’t seem very smart. Nor is it a way to break through the static of multiple split incentives stalling demand for deep energy retrofits.

The California Institute for Energy and Environment (CIEE) produced a fine report earlier this year called Enabling Investments in Energy Efficiency: A study of energy efficiency programs that reduce first-cost barriers in the residential sector that studied a variety of financing tools intended to stoke demand for retrofits. Their work confirmed what we found (see our two pager on green jobs and energy efficiencies) when looking at how financing energy efficiencies can create green collar jobs: it is only one part of the over all solution. The CIEE concluded that:

Financing is one of many important tools to overcome barriers to implementing improvements in energy efficiency. It is valuable, but not sufficient on its own.

Conventional energy efficiency loan programs cannot address much of the need without significant public support.

New mechanisms are being developed to address key barriers. While these innovations hold great promise, they currently have limited to no experience.

And the review further concluded that the various financing programs have shown “little success in addressing the financial barriers faced by those most in need of financing, including those with the highest energy cost burdens as a percentage of income, low or fixed incomes, poor credit, and those in rental housing.”

However, attaching the financing to the property might make these sources of funding more accessible to these groups because it would tie the lien to an asset, the house or apartment building, meaning that the owner’s or renter’s credit would be less important.

Oregon’s PACE legislation is also on the lookout for jobs, requiring that contractors hired “employ at least 80 percent of employees . . . from the local work force,” and it establishes basic requirements and standard qualifications for project managers. This is a critical component that can create new career ladder jobs.

PACE is a good idea, and Oregon’s legislation has elements that could create fair access to real energy efficiencies and green jobs. But innovative financing tools, in order to get the maximum benefit ought to be embedded in a broader energy efficiency strategy.

As we continue to refine our chart reviewing energy efficiency programs we've decided to add a question mark. The question mark means that the program or idea has promise in a specific indicator area, but hasn't been around long enough to really prove itself.

Photo of the Week?

Eric de Place — Tue, 17 Nov 2009 08:57:56

A remarkably prescient photo from 1891:

No further comment needed, I think.

Hat tip to Nancy Hirsh. Image is used in accordance with the Washington State Historical Society's fair use policy.

Look to Alaska for Energy Efficiency

Roger Valdez — Mon, 16 Nov 2009 08:28:00

Eureka! I have discovered a huge new source of clean energy in Alaska that can create green jobs too. Well sort of.

I’m not the first to strike gold, but lately I’ve been describing the potential of energy efficiency like hitting the jackpot. Efficiency is a clean, domestic energy source that would add, in the next decade, $1.2 trillion dollars to the economy. The big numbers (like saving 9.1 Quadrillion BTUs in Two Minutes) get people’s attention. If the kind of economic impact we could gain from energy efficiencies was a natural resource buried in the ground, you can bet that every level of government would be trying to dig them up.

Instead, the job is really about aligning interests, stimulus dollars, and great ideas to capture as much of that potential energy savings in the economy as possible. And that takes time. But Alaska, a state very familiar with taking natural resources out of the ground, has a great model for stoking the demand among homeowners for retrofitting their homes—and tapping this new energy source I’m talking about. The program is just the kind of example that is worth looking at when problem-solvers set out to get green jobs right in their jurisdictions.

The Home Energy Rebate Program is run by the Alaska Housing Finance Corporation (AHFC) and provides homeowners up to $10,000 in rebates for retrofits that will produce significant energy savings. It works like this:

Homeowners contact the AHFC to sign up for an audit, and with the auditor identify where the biggest savings might be. The improvements can range from insulation to water heater replacement, whatever creates the biggest improvement on the scorecard used by the auditor. The homeowner has to pay for the work and can only be reimbursed for the materials and the audits before and after the work. Once the homeowner has an estimate the AHFC will earmark funds for approved work and hold it for 18 months. Once the work is done and a follow up audit is complete the funds are released.

Don’t have money for the work? For those who qualify AHFC provides financing for everything. And the program has had a lot of takers. A recent report in the Alaska Journal of Commerce cites some pretty impressive numbers.

Since May of last year there have been 1,675 approved rebates with an average cost of about $9,000 for each project. Of that, the program paid out an average of $6,100 in rebates per project, or about two thirds of the projects’ costs. Of the $160 million appropriated by the Alaska legislature, about $110 million has been set aside for the program and about $20 million has already been paid out. The average savings per household so far has been gauged at more than $500 per year, meaning that for those average retrofits, payback for the owner’s investment should take about 6 years.

Where is all this money coming from? Alaska experienced huge increases in its oil tax revenue, and they have used $200 million of those dollars for energy efficiency programs like this one.

Another thing this program has going for it is the jobs it is creating. The AHFC estimates that the rebate program, along with weatherization, has directly created 2000 jobs. Some of the jobs are efficiency raters for the before and after audits. There were 30 qualified raters when the program started, now there are more than a hundred, enough to fill more than 6 pages. For a frame of reference, there are 7 in Wasilla alone—population: 10,256.

This program scores big in my book because it does many of the things that are critical for getting it right on both energy savings and green jobs. There is an audit at the beginning and the end of each project, with the biggest savings incentivized (not just fancy new windows—but whatever humble improvements that may prove to be the biggest bang for the buck). There is financing available and AHFC has consolidated all the information in one place, not quite an energy concierge, but darned close. And all of this is funded with oil tax dollars. Not the most sustainable source of funds, but a use that would complement comprehensive cap and trade legislation well. As the cost of oil goes up, that revenue can be turned into efficiencies and alternatives to help us get off the fossil fuel rollercoaster.

I plan on digging into this program more. Members (a Republican and a Democrat) of the Alaska Legislature’s energy committee have issued a report recommended adding $150 million more dollars to the program next year. Senator Bill Wielechowski, one of the authors of the recommendations, had this to say about the report.

This report is a call to action. Alaska’s energy future depends on what we do now. With oil prices on the rise again, Alaska is at a crossroads. We need to invest now for Alaska’s long-term benefit. This plan is an effort to shine the light on one of Alaska’s most pressing needs and offer solutions that can move Alaska forward for decades.

The committee is accepting public comment until next week, November 15th.

We are trying a new way of measuring energy efficiency programs in the region. The check mark indicates which of the most important elements a particular program includes and that they are doing it well. A red dash means the program doesn’t address the element or isn’t addressing it as effectively as it could. Each of these indicators emerged from careful review of dozens of energy efficiency programs in the region. You can find a full description of each of them in our one pager Green Collar Jobs: Realizing the Promise--Energy Efficiency. Let us know if you have a program you’d like us to review.

Where's My Green Job?

Roger Valdez — Tue, 10 Nov 2009 13:03:45

Last Saturday, two stories about green jobs caught my eye. One was in the Washington Post and the other in the Seattle Times. The Post article was a hand-wringing affair about the failure of energy efficiency efforts funded by stimulus dollars to create any of the promised green jobs. The Times article was a bit more positive, reporting about a training program I wrote about in a post titled Labor Sees Green Job Opportunity. The Times piece highlighted the first graduates of the program, created by the Laborers' International Union of North America (LiUNA) to train weatherization workers. But the Times piece also asked the crucial question of one of the graduates, “will you be able to get a job?”

The graduate, Ahmalik Claiborne, answered, "I'm sure I can get a job . . . We are at the start of something good." Not everyone is so optimistic. But it is important for our region’s problem solvers not to give in to pessimism. The fact is, our region is ahead of the rest of the country and getting green jobs right is better than getting them right now.

The Post piece deserves a response. First, in our region, as I wrote recently (Oregon's Energy Policies Stimulate High Ranking), states and local governments have already been doing work in weatherization and energy efficiency. These measures account for Oregon and Washington’s consistently high ratings by the American Council for an Energy-Efficient Economy. The Post article focuses on some irresponsible use of weatherization dollars in Indiana (a sweetheart deal for a local contractor) and false starts in Virginia.

The central thesis of the article is in this paragraph:

Nine months after Congress passed the $787 billion stimulus package, there is little tangible to show for one of its biggest single areas of investment, the $25 billion energy-efficiency effort. That points to one of the central tensions of President Obama's landmark stimulus package: His goal was to inject money quickly into the economy while at the same time laying the groundwork for his broader, transformational agenda on energy, education and health care.

And what is at stake for green jobs and our economy is articulated perfectly in the next paragraph.

Officials overseeing the energy-efficiency effort want to fundamentally alter the way the country uses energy. They are trying to craft initiatives that will produce real savings to build the case for continued private or public investment. And they are putting safeguards in place to avoid any spending scandals that could tarnish the effort.

What the article gets wrong is that the choice isn’t between creating jobs now and total failure of the effort. The truth is that if there isn’t a careful alignment of the multiple and fragmented interests in the energy efficiency economy, there is a good chance stimulus money won’t lead to long lasting green jobs. Sure, local and state governments could easily put all that money to work immediately by developing, for example, a crash course for thousands of unemployed workers in auditing buildings, then turn them loose on every building in sight. All that would yield is a lot of questionable audits without the necessary financing and project management in place to support households and businesses to take the next step of actually retrofitting their home or business. And what would those auditors do for work once the audits are done?

Training (Green Collar Jobs Start With Basic Skills), effective financing models (Portland Finds Our How Clean Energy Works) and managing the projects well (Color of Money) are important elements to line up so that demand is created and sustained and workers are trained for career ladder jobs. Projects with the potential to address these critical connections are getting started in our region, and now is not the time to slow the effort. But rushing ahead recklessly isn’t the answer either.

I will let Bob Peck the commissioner of public buildings, quoted in the Post article, have the last word.

"Is it possible or reasonable to think that the stimulus package could have moved faster moving into winter? I don't know . . . But if you step back a couple feet and say, 'where do we need to be in five years,' then the steps we're taking now are exactly right."

Oregon's Energy Policies Stimulate High Ranking

Roger Valdez — Mon, 02 Nov 2009 16:42:14

Over the last week there has been quite a bit of discussion in the media about the number of jobs created by stimulus dollars. Some argue the money is being wasted and others that the amount of money allocated were never enough in the first place. Paul Krugman suggested that “the really bad news is that “centrists” in Congress aren’t able or willing to draw the obvious conclusion, which is that we need a lot more federal spending on job creation.”

Either way, as I wrote in a post called Color of Money, a lot of money has been allocated and has yet to be spent. The facts seem to agree that moving funds (and allocations for bond and tax credit programs) out to local governments and into broader circulation is taking a long time.

But, when it comes to energy efficiency in general and stimulus funding in specific, the Northwest is getting high ratings. In their 2009 state ranking of local implementation of energy efficiency programs, the American Council for an Energy-Efficient Economy (ACEEE) ranks Oregon 3rd and Washington 7th among the top ten states for implementing energy efficiency policies.

This is the third edition of the ACEEE’s annual ranking of states’ implementation of energy efficiency policies. The ranking is based on 6 policy categories: (1) utility-sector and public benefits programs and policies; (2) transportation polices; (3) building energy codes; (4) combined heat and power; (5) state government initiatives; and (6) appliance efficiency standards. States are given points in each of the six policy areas combined and are ranked out of a possible 50 points.

How does the ACEEE rating help us better understand whether stimulus dollars are ultimately going to be effective in the Northwest with green jobs creation? There isn’t enough information to know for sure, but based on what we learned in our research for our Green Collar Jobs Primer: Realizing the Promise, stoking demand for energy efficiencies through increasing standards, creating incentives and strong coordination of efficiency work are all key ingredients of green job creation. Oregon ranks high for creating multiple programs that do all these things.

The ACEEE credits Oregon for having upped requirements for energy efficiency in state buildings, having an effective performance contracting program in place and for its two financial incentive programs, the Business and Residential Tax Credit, to incentivize energy efficiency. Oregon doesn’t have to re-invent the energy efficiency wheel and has programs already working that can be enhanced with stimulus funding.

Just last week ShoreBank Enterprises Cascadia received a $40 million allocation of New Market Tax Credits (NMTC) as part of the stimulus package. The NMTC is a program that incentivizes investment in low income communities with a 39 percent tax credit. The credit allows investors a discount on their federal taxes after 7 years and makes lending to non-profits and community based organizations more appealing by creating better returns on the initial investment. Credits from NMTC can be used to invest in clean energy projects, training facilities and renewable energy infrastructure.

ShoreBank Enterprises Cascadia has great experience in what they describe as their triple bottom line: positive economic, ecological, and social benefits through engaging in market-based approaches. They created a loan program to help rural households upgrade or replace leaky septic systems and they are the lead financial agency in Clean Energy Works, a Portland program I wrote about most recently in a post called Green Collar Jobs Start With Basic Skills.

ShoreBank will use NMTC resources to provide loans and equity-like investments in severely distressed communities, especially rural and Native American communities and they already have projects in the works in the renewable and energy efficiency sectors that will benefit from the allocation.

The collaboration by ShoreBank , the City of Portland and the State is a big part of the reason Oregon has enacted so many far reaching and effective energy policies and programs, earning them them such a high rating from the ACEEE. There is still a lot more money to be allocated and dispersed. But effective partnerships also mean that Oregon has real projects lined up to benefit from stimulus dollars, which should offset much of the recent criticism that the stimulus isn’t creating jobs.

Wanted: Smart Workers for Smart Grid

Roger Valdez — Thu, 29 Oct 2009 13:20:18

Early this week, President Obama gave a speech touting the $3.4 billion in grants the federal government has awarded to local companies, utilities and cities working to improve the country’s aging and outmoded electric energy grid. The awards will support “smart grid” technology that enables easier and more effective transmission of electricity from one region to another. One of the recipients is Pacific Northwest Generating Cooperative (PNGC), a Portland-based electric generation and transmission cooperative owned by 16 Northwest electric utilities. The grant will fund installation of “95,000 smart meters, substation equipment, and load management devices that will integrate electric cooperatives across four states using a central data collection software system hosted by PNGC.”

But will all the smart grid money create green collar jobs?

Unfortunately—and surprisingly considering unemployment rates—according to a recent report by the National Commission on Energy Policy, smart-grid investment will require trained workers who aren’t yet available in large numbers.

So, what is a smart grid and how do we build it? Here’s how Obama described the importance of developing smart grid technology:

To offer one analogy, just imagine what transportation was like in this country back in the 1920s and 1930s before the Interstate Highway System was built. It was a tangled maze of poorly maintained back roads that were rarely the fastest or the most efficient way to get from point A to point B. Fortunately, President Eisenhower made an investment that revolutionized the way we travel -- an investment that made our lives easier and our economy grow.

The highway example is a common one but probably not the best. And the term “smart grid” is in serious danger of becoming another empty buzzword. If you have the time, I highly recommend a presentation by Roger Levy of the Smart Grid Technical Advisory Project based at the Lawrence Berkeley National Laboratory. Levy gave the presentation at last month’s meeting of the Oregon Public Utility Commission.

Click here for a full size image.

Smart grid is really about integrating demand and supply from the on-off switch on your dishwasher all the way to the source of energy production. Our current energy grid wasn’t built for this kind of integration. If renewable energy is going to work as a replacement for more resource-intensive sources (coal, for example), there has to be a way to get that energy into the grid so consumers can reliably buy it. when it’s windy at one point of entry into the grid, windmill energy needs to be generated then supplied to another point on the grid where there is no wind. That means infrastructure—equipment and transmission wires—to get the energy to the market place.

Click here for full size image.

Rate design is also important. Rates need to be structured so that consumers are incentivized to use energy when it is less taxing on the overall system (when wind energy is abundant, for example), and to make improvements to their facilities and homes to improve efficiencies.

But who is going to build, operate, and maintain all this new infrastructure and technology to make the smart grid work? The Commission’s report found that about 30 to 40 percent of the electric power sector’s workforce will be eligible for retirement by 2013 and of those, 58,200 will be skilled craft workers, exactly the people who could build the smart grid.

The study further found that nationwide, smart grid technology will require an additional 90,000 workers. This is a huge green-collar job opportunity. But the barriers for training workers I described in my post, Green Collar Jobs Start With Basic Skills, are the same for the electric power sector; basic skills aren’t being integrated into technical training programs. The report cites “lack of math and science skills in the population” and “lack of career preparatory skills” as significant barriers to ensuring a ready workforce for the new green-collar army we’re going to need. This is further hampered by lack of portability of credentials and training certifications between different schools and training programs.

It’s not the worst problem you could have—people need jobs and the demand is being created. The question is one of coordination so that the work can get done and people can get back to work in our communities. To that end, the report recommends more or less what Oregon has started doing, getting important players—unions, educators, utilities—in the same room to start tackling these problems. Last session the Oregon legislature passed HB 3300 which tasked the State Workforce Investment Board to “leverage and align existing public workforce development programs and other public and private resources to the goal of recruiting, supporting, educating and training of targeted populations of workers.”

The good news is that the effort is getting started. It is likely that the biggest step toward capturing the efficiencies inherent in smart grid technology won’t depend on that technology at all, but on breaking down age-old barriers between basic education and workforce training.

Gas Prices Are Noisy

Eric de Place — Tue, 27 Oct 2009 11:25:16

Do people notice small changes in gas prices? I've been wondering about this lately -- which gave me an excuse to download historical gas price data -- and I learned a couple of things in the process. Consider:

Gas prices changed by 7 cents per week, on average, during 2008 and 2009. Sometimes prices went up and sometimes they went down, but they rarely stayed constant. What's more, the price changed by very different amounts each week.

Much of the most intense volatility occurred during 2008 when gas prices broke the $4 barrier and then subsequently collapsed as the economy unravelled. But even in 2009, gas prices are changing 5 cents per week, on average.

Is 5 cents a lot? The answer depends on what you mean.

Five cents is a lot historically. From 1993 through the end of 2007, gas prices changed by just 2 cents in an average week. Expressed as a percentage of gas prices, the average weekly price change represented less than 1.4 percent of the retail price of gas during that period (when gas prices were much lower). In 2009, by contrast, the 5 cent weekly change represents 2 percent of the retail price.

Five cents is also a lot, I think, in the context of recent policy proposals. The modest carbon tax proposed by the conservative Washington Policy Center would work out to roughly 3 cents per gallon of gasoline. The most recent gas tax increase in Washington -- the hotly contested "nickel" tax of 2003 -- was, of course 5 cents. In Oregon, there's a big to-do about whether to raise the state gas tax by 6 cents. And this year, Idaho's legislature rejected a 2 cent tax increase. In other words, when we talk about gas tax increases, we're mostly talking about pretty small sums of money -- less than the weekly average price change.

What's interesting to me is that it's not entirely clear that consumers would even notice such small price increases. (That's a different question, by the way, than whether consumers would be affected by the price increases.) For example, consider what would have happened to gas prices if the Washington legislature had passed ESHB 1614 last year, a bill that would have added at most 3.5 cents to the price of gasoline to fund Puget Sound cleanup.

In case you can't tease this apart, the red line shows actual gas prices during 2008 and 2009; the green line shows a hypothetical price if a 3.5 cent fee had been added starting in January 2009. (The price, however, is a US national average, while the fee would have been specific to Washington.) As you can see, there's not a huge difference between the two scenarios.

I've argued before that gas prices have a bigger effect on consumption than we think. But I've also argued that not all gas prices are equal. It appears that for a price increase, such as a tax, to reduce consumption the change should be big enough to notice and -- just as important -- the price increase shouldn't be used to increase consumption. So there's probably a good debate to have about whether 3.5 cents per gallon would be enough to affect consumption, given that every week the price of gas changes by 5 cents per gallon on average. My hunch is that it wouldn't make much difference: it wouldn't impact consumers in a serious way and it wouldn't dent oil company profits (in part because oil companies just pass on price increases to consumers).

Needless to say, however, reducing gasoline consumption is hardly the only purpose of a fee or tax on petroleum products. State gas taxes are generally used to build and maintain highways. Other fees are used to clean up pollution. But insofar as we want to affect consumption with prices, my guess is that the price change would have to be outside the "noise level" -- the ordinary fluctations we see every week -- to have a significant impact. Discuss.

Green Collar Jobs Start With Basic Skills

Roger Valdez — Tue, 27 Oct 2009 07:59:50

A study released over the summer found that there are some great opportunities in Washington state for green jobs in the renewable energy sector. But it also pointed to some problems ensuring adequate training for those jobs.

The study confirms what Professor W. Norton Grubb found: work force training needs to be better integrated with education. Training is about learning tasks or work related skills that allow immediate employment while education is grounded in more broadly applicable skills like reading, writing and organizational skills.

The education training dichotomy is one aspect of the fragmentation that plagues work force training and by extension training for green collar jobs. Grubb’s ideas, creating better connections between education and training, are still relevant today more than a decade after he wrote about them in his book Learning to Work.

The study, Renewable Energy Industry Trends and Workforce Development in Washington State, was completed by the Washington State University Extension. It analyzed the renewable energy sector and also conducted in depth interviews with 27 state renewable energy employers and experts in the wind, solar, bio energy, hydro efficiency upgrades and small hydro fields. The wind sector is by far the fastest growing area of renewable energy in the state with other parts of the renewable energy industries – solar, bio-power, hydropower efficiency upgrades and small hydro – with slower growth.

Across these industries employers found candidates for positions and trainees in the various fields lacking in core skills.

Many employers reported serious academic skill gaps among new hires and job applicants, especially among younger and less-experienced workers and job applicants. Basic math, writing and communication skills were often described as inadequate for entry-level employment.

Grubb argues in his book is that better connection between education and job skills training, like that found in a community college setting, would lead to workers with better core skills and career prospects for future employment and upward mobility. Grubb’s study of numerous workforce training programs found that simply training workers in specific and narrow skills, without a good basic education in things like reading, writing, math and teamwork might get them to get jobs but probably not keep them employed long-term.

The implication of this argument is that, in the interest of great long run effects, more attention should focus on enhancing both basic education and jobs skills and less on simply getting individuals into employment.

This is a tall order for a higher education system in Washington State threatened with reductions in funding beyond reductions passed in last years state budget.

But one existing program at Edmonds Community College is one example of tying jobs training with basic education. Their Energy Management Degree includes basic courses in math, English and management.

More coherent, integrated oversight of training and education programs by state-level agencies like the Department of Commerce and the Higher Education Coordinating Board would help improve this integration and, according to Grubbs deal with the concerns of green employers that future green collar workers have the skills they need for more than just a short-lived stint in renewable or energy efficiency sectors.

Right now there are at least two large groups working on workforce training in Washington State under mandates from legislation. The Clean Energy Leadership Council created by SB 5921 and the Evergreen Jobs Leadership Team created by HB 2227 have started meeting to talk over renewable energy opportunities and job training for all kinds of green jobs. Shouldn’t the Council and Leadership team be part of the same coordinated effort?

In Grubbs’ words, better “vertical coordination, [to] oversee the development of improved information, and the like” could lead to more programs like the one at Edmonds Community College. And, based on the WSU study and Grubbs’ analysis, this kind of program would lead to green jobs that will last and provide a career path for displaced and new people coming into the workforce.

Image derived from flickr user Holger Zscheyge, distributed under a Creative Commons license: http://www.flickr.com/photos/zscheyge/ / CC BY 2.0

The Hidden Cost of Coal

Clark Williams-Derry — Fri, 23 Oct 2009 16:25:37

Over at Grist last week, Dave Roberts blogged about a recent -- and very important -- study by the National Research Council on the enormous hidden costs of energy consumption.

I'm surprised that the study hasn't gotten more press coverage. It's fact-rich, sober, and completely non-ideological -- and, at the same time, it's an incredibly damning indictment of the nation's energy system. The report looks at a variety of "external" costs of energy -- that is, the costs that energy consumers themselves don't pay, but pass on to the public at large. The costs they could pin down were largely related to air pollution, including the impacts on human health, crop and timber yields, and visibility. And the researchers find a big culprit: coal-fired power. From the NRC press release:

In 2005 the total annual external damages from sulfur dioxide, nitrogen oxides, and particulate matter created by burning coal at 406 coal-fired power plants, which produce 95 percent of the nation's coal-generated electricity, were about $62 billion; these nonclimate damages average about 3.2 cents for every kilowatt-hour (kwh) of energy produced. A relatively small number of plants -- 10 percent of the total number -- accounted for 43 percent of the damages.

Based on my awesome powers of multiplication, and a quick trip to the US Energy Information Administration website, these numbers suggest that the "hidden" costs of coal fired power in 2005 were roughly twice as high as the cost of the coal itself. And those costs, according to the NRC, don't even include "damages from climate change, harm to ecosystems, effects of some air pollutants such as mercury, and risks to national security, which the report examines but does not monetize."

So any time someone tells you that coal is "cheap," just remember that in 2005 the real, comprehensive cost of coal was well over three times as high as the market price.

The tally of damages that the NRC could calculate came to $156 million per coal-fired plant per year. The biggest culprits seem to be in the Midwest. According to this map in the NRC report, The Centralia and Boardman plants, in Washington and Oregon, respectively, don't rank particularly high for the kinds of costs the NRC was looking at. But if you added in the costs for mercury emissions and climate risks, then the Northwest's coal plants might rank a bit higher.

Obviously, the National Research Council is no group of amateurs, nor is it driven by any sort of ideology. It operates under the umbrella of the National Academies, a Congressionally-chartered non-profit that also houses the National Academies of Science and Engineering and the National Institute of Medicine. In other words, it's a bunch of hard-core nerds: people who care about, y'know, facts & stuff. So tell your friends: the experts have spoken, and despite what the market says, coal ain't cheap.

Image derived from flickr user ittybittiesforyou, distributed under a Creative Commons license: http://www.flickr.com/photos/ittybittiesforyou/ / CC BY-NC 2.0

Climate Poll: Hike in Skepticism; Support for Cap and Trade

Anna Fahey — Thu, 22 Oct 2009 13:35:29

The latest national survey by the Pew Research Center for the People & the Press, conducted Sept. 30-Oct. 4 among 1,500 adults (reached on cell phones and landlines) revealed some disheartening trends when it comes to opinions about climate change. At the same time, things are looking decent (if not rosy) for cap and trade policy.

57 percent think there is solid evidence that the average temperature on earth has been getting warmer over the past few decades. In April 2008, 71 percent said there was solid evidence of rising global temperatures.
Over the same period, there has been a comparable decline in the proportion of Americans who say global temperatures are rising as a result of human activity, such as burning fossil fuels. Just 36 percent say that currently, down from 47 percent last year.

The decline in the belief in solid evidence of global warming has come across the political spectrum, but has been particularly pronounced among independents. Pew found that just 53 percent of independents now see solid evidence of global warming, compared with 75 percent who did so in April 2008.
Republicans, who already were highly skeptical of the evidence of global warming, have become even more so: just 35 percent of Republicans now see solid evidence of rising global temperatures, down from 49 percent in 2008 and 62 percent in 2007. Fewer Democrats also express this view -- 75 percent today compared with 83 percent last year.

Despite this trend backwards when it comes to skepticism (is it a seasonal thing?), the survey found more support than opposition for a policy to set limits on carbon emissions.

Half of Americans favor setting limits on carbon emissions and making companies pay for their emissions, even if this may lead to higher energy prices.
39 percent oppose imposing limits on carbon emissions under these circumstances.

The fact is, most folks just haven't heard much about cap and trade. Sadly, the more people hear, the more likely they are to oppose the policy--and the numbers indicate that opponents' anti-cap and trade messaging to Republicans and independents are sinking in more effectively.

Just 14 percent say they have heard a lot about cap and trade policy; another 30 percent say they have heard a little about the policy, while a majority (55 percent) has heard nothing at all.
The small minority that has heard a lot about the issue opposes carbon emissions limits by two-to-one (64 percent to 32 percent).
More Republicans (20 percent) and independents (17 percent) than Democrats (8 percent) have heard a lot about cap and trade.

Among the much larger group that has head little or nothing about the issue, most support it (50 percent little, 58 percent nothing).

Finally, with less than two months before the United Nations Climate Change Conference in Copenhagen, a majority (56 percent) of Americans think the United States should join other countries in setting standards to address global climate change.

Read the entire Pew report here.

Photo courtesy: Algo, Flickr.com.

Color of Money

Roger Valdez — Wed, 21 Oct 2009 14:04:12

Very few of the stimulus dollars allocated for energy efficiency -- and the green jobs they can create -- have been allocated or spent by governments. At first this might seem a bit discouraging. Lots of money allocated but caught up in the bureaucracy of federal, state, and local governments. However, a look at green stimulus funding in the Northwest is more encouraging, with some cities and local agencies starting their work off on the right foot.

A recent report by London-based New Energy Finance has found that less than 10 percent of green stimulus money allocated worldwide has actually been spent by governments this year. That’s about $177 billion spent so far on supporting energy efficiencies, renewable energy and green jobs out of more than a trillion available. (The report found that the United States government has spent about 12 percent of its stimulus allocation thus far or about $7.92 billion dollars.)

Green for All, a national advocacy and action agency focused on energy efficiency and green jobs, has highlighted local stimulus spending in a recent report. Accompanying the report is this chart in which Oregon and Washington feature prominently.

Click here for a full size version.

Washington will spend about $14 million of its State Energy Efficiency Program funding on retrofits in urban neighborhoods and another $5 million on low interest loans, according to Green for All. And Oregon will spend $2.5 million in stimulus on Clean Energy Works, a program we’ve highlighted before. But is the money getting into the communities yet? There are two examples in both states that show that strong foundations have been built to support getting the money into action fast and effectively.

In Bellingham, a collaborative effort by the Opportunity Council and Sustainable Connections has just been granted $2.7 million dollars for the Community Energy Challenge, a program that includes retrofits for homeowners and businesses and training for workers to do those retrofits. The money hasn’t been spent yet, but these two organizations are well positioned to make use of it.

Sustainable Connections will focus on aggregating information, creating a one stop shop for people in the community who want to get retrofits and marketing the program. This is important because one of the biggest concerns about retrofits is getting all the right information together in one place. Once information is organized it helps to talk with a knowledgeable person. Information and support helps keep homeowners and businesses on track to complete retrofits.

And the Opportunity Council has for years been a leader in weatherization work. There are few organizations that come closer to the idea of an energy concierge – a surprisingly important component of efficiency investments -- than weatherization programs. So the Opportunity Council can manage the projects and also make sure the improvements yield the greatest energy savings to the homeowner or business.

In Portland, Clean Energy Works continues to charge ahead. The program is already qualifying participants for its energy efficiency loan program and the City Council approved a Community Workforce Agreement, signed by businesses, churches and labor unions to focus the job creation effort in the places where it is needed most.

The agreement is more of a promise than a contract, but its important. In order to actually train workers and get them on the job unions, environmental and community organizations need to start talking with one another. The agreement is the first step to getting organizations familiar with each other to build the programs that will train the work force needed to implement the Clean Energy Works model throughout the Portland area.

It is still early and there is a lot of money in the pipeline. But Bellingham’s and Portland’s work so far ought to be instructive to the rest of the country and the world. Focus on bringing groups together that already know how to develop and market programs, train workers and manage energy efficiency projects. Bellingham’s effort relies on existing expertise in marketing and managing energy efficiencies projects. Portland’s agreement is focused on engaging part of the community that haven’t often connected in past, aligning interests to benefit green jobs training. Taking these first steps in the early stages of spending stimulus money improves the chances that the money will have a big impact when it starts flowing, without wasteful mistakes or false starts.

A Sustainable Night's Sleep

Jennifer Langston — Tue, 20 Oct 2009 16:11:31

Editor’s Note: This post is part of Sightline’s Getaway to Seattle Sweepstakes. Sign up for one of our emails and be entered to win a two-day trip to Seattle.

Seattle always ranks high on lists of US cities with green buildings, with more than 80 large buildings and nearly 50 homes now certified by the Leadership in Energy and Environmental Design program. Since the city began mandating green construction practices in its own buildings a decade ago, the techniques have spread to offices, condos, single family homes, educational centers, even clean-and-sober low-income housing.

Take the Hyatt at Olive 8, which will be hosting our lucky sweepstakes winner for two luxurious nights. It’s the first LEED-certified hotel in the city, with everything from low-flow showerheads to preferred parking spaces for fuel-efficient cars to spa treatments that feature locally-grown ingredients. It’s expected to use 23 percent less energy than a comparable conventional building, and 36 percent less water. Plus, it walked the anti-sprawl walk: by purchasing development rights that allowed it to build higher in the city, the project also helped preserve open space on Sugarloaf Mountain in rural King County.

Here are some other green building projects to check out while you're in town:

Northgate Civic Center

Several years ago, the city faced a daunting task: create a liveable civic center for a neighborhood whose identity was defined primarily by a shopping mall and parking lots. A new Northgate library, community center and park helped provide a collective anchor for the community, incorporating green building features and amenities for residents of high-density projects planned nearby.

Seattle Central Library

Okay, so we already gushed about the city's architecturally arresting downtown library in another post on what’s great about Seattle. But it also achieved LEED silver status with an abundance of energy-saving measures and attention to giving the building a long and fruitful life. In particular, its window glazing system and abundant natural light decreases energy use and the need for artificial lighting, even in cloudy Seattle.

Mosler Lofts

Across from Seattle Center, the 12-story Mosler Lofts residential condo building also features 10-foot-tall windows to maximize daylight. Forty-three percent of the street level has been transformed from concrete into green landscaping, and 18 percent of the roof is covered in gardens. Many of the building materials – from brick to concrete to glass – were made within 500 miles of the site.

Kenyon House

This project proves that green building can be done on a tight budget. These affordable studio units in Southeast Seattle use radiant heat, passive cooling systems and finishes that resist mold to improve indoor air quality for residents living with HIV/AIDS. Its other sustainable features made it the first multi-family affordable housing project in Washington to receive LEED platinum status for homes.

Seattle University Admissions and Alumni Building

This interactive tour shows off the features of the newest addition to Seattle University’s campus on Capitol Hill, which is expected to achieve LEED gold certification. The structure itself is a recycled warehouse, with 90 percent of the new building’s materials coming from the older building.

Interested in green building, urban design and energy efficiency? Sign up to receive Sightline Daily, a daily rundown of news on Northwest sustainability, before Oct. 28 and win a two-night stay at Olive 8.

Olive 8 photo courtesy of flickr user fristle, Northgate photo courtesy of flickr user djwudi, and Seattle Central Library photo courtesy of flickr user brewbooks, under the Creative Commons license. Kenyon House photo courtesy of Housing Resources Group and Seattle University photo courtesy of Braden Van Dragt.

I-1033: Debt and Taxes

Roger Valdez — Thu, 15 Oct 2009 14:19:00

It caught my attention when I heard State Treasurer Jim McIntire saying he won’t be supporting I-1033 because he is concerned that if it passes, it could hurt Washington State’s bond rating, increasing costs for the state to borrow money.

My dad has an annoying saying about borrowing and debt: “Neither a borrower or a lender be.” The quote is from Shakespeare’s Hamlet and is given as sage advice by another father, Polonius to his son Laertes. I’ve never liked the quote because I have always been a fan of the creative use of public financing options, especially bonds. I wrote about Qualified Energy Efficiency Bonds (QECBs) and a proposal in Washington’s last legislative session as great opportunities to use public financing, or public debt, as a tool to create large scale energy efficiencies for cities and schools.

In spite of what Polonius and my dad say, debt is a good thing if it is managed well. The positive term for debt is ‘leverage’ and when the state seeks a loan it is often through bonds. Leverage means making tax dollars go further. Just like a homeowner wouldn’t necessarily pay cash to put an addition on the house, a state often won’t pay cash for big capital projects.

Like an addition, capital projects usually add value to the state’s equity. Large drainage projects, building schools or investing in energy efficiencies are examples of projects that are financed through the sale of bonds, or leveraged, rather than paid for outright. The idea is that tax the improvements would generate more value, in revenue or savings, to make the cost of borrowing worth it.

What is a bond rating anyway and why would a lower one be so damaging to the state?

A bond rating for a state is a lot like a credit rating for a person. Moody's Investment Service, Fitch, and Standard and Poor are the three major bond rating agencies. Instead of a three digit number used for rating people, they rate states with a range of scores from AAA all the way down to CCC, with AAA being the top rating (sometimes, like grades in school, a plus or a minus is added). Like an individual borrower, if the state’s books are in good order and there is a strong reserve and money coming in the door, the score will be higher and the interest rate will be lower. If things are unstable with future revenues uncertain, the rating will drop and the cost to borrow increases.

After Colorado passed a similar initiative, rating agencies downgraded Colorado’s credit rating. While Colorado does not issue general obligation bonds, they do issue financial instruments called certificates of participation which also are rated by the agencies--and when the state's credit rating lost ground, the buying power of those instruments took a hit.

But why would the Eyman initiative wreak havoc on Washington’s bond rating?

In a nutshell, it reduces investors' confidence that the state will repay its obligations. Lenders like certainty and stability; but since a spending cap creates uncertainty about the state's ability to pay for basic services and infrastructure, it makes some investors will worry that the state could default on their bond payments. That uncertainty drives up the interest rate that bond buyers demand--just the way banks charge higher mortgage rates for people who don’t have a steady income.

California’s budget chaos is a case in point of what happens when bonding becomes expensive because of budget problems. The Fitch rating service, this summer, downgraded California from an A- rating to a BBB. That simple change could cost as much as $7.5 billion in increased interest payments over a 30 year period.

Eyman’s initiative could force Washington to take a place in line behind states like California and Colorado at the payday loan store, where borrowing money to build new energy efficient schools and upgrade old ones, for example, would cost more because of higher interest rates. For energy-efficiency loans, a higher interest rate would consume some of the savings on heat and power -- making it even more difficult to use those savings to pay back the loan.

So the initiative’s stated purpose, saving money for taxpayers, would be undermined by the higher borrowing costs created by the initiative itself. Ironically, like Eyman’s two other initiatives ultimately enacted by the Democratic legislature and governors, 1033 would harm the very people it claims to help. In the case of I-1033 any tax dollars saved by tax payers could end up getting shifted to paying the higher costs of borrowing money. Or the state could have to forgo borrowing all together, creating a backlog in new school construction.

So when deciding whether to be or not to be for I-1033, voters should consider Washington's credit rating as one of many .

Green-Collar People: Greg Jordan

Jennifer Langston — Wed, 07 Oct 2009 13:48:10

Editor's note: The following is a profile from Sightline's green-collar jobs primer. Read more about what makes a green-collar job and how we can create more in the Northwest.

Before Greg Jordan graduated with a degree in environmental sciences from Portland State University, he imagined he might find a job working in stormwater control or restoring wetlands.

Instead, he spent his summer on a weatherization crew doing hands-on labor—slithering through crawl spaces, blowing insulation into wall cavities, sealing up air leaks—and loving it.

Out of a dozen program graduates, he’s only one of two who were able to quickly land a job in a tough economy. It wouldn’t have happened, he said, without a renewed attention and commitment to energy efficiency.

“Without the stimulus and the funding, I don’t think I would have been given this chance,” said Jordan. “The field is really just getting going. It’s been around, but finally people are realizing these little things make a big difference.”

He answered an ad placed by EcoTech LLC, an environmental services company with a background in pollution cleanup. It launched a new a business line in October 2008 in energy efficiency and weatherization.

“Historically, workers who do the unsexy work of energy efficiency, putting in insulation and doing air sealing, were viewed as no-skill or low-skill,” said Marshall Runkel, a company partner. “That’s yesterday’s way of doing business.”

Anyone can insulate a home poorly, as his crews have learned from finding others’ mistakes. The industry could use more trained employees. And it needs to pay them enough to do quality work that will help meet the nation’s carbon reduction and energy independence goals, Runkel said.

The start-up division has six employees and expects that to double or triple in the next calendar year. EcoTech started getting referrals by becoming a trade ally—essentially a recommended contractor—of the Energy Trust of Oregon, which offers cash incentives for homeowners to make energy efficiency improvements.

The company has also been accepted into a pilot program that will use $2.5 million in federal stimulus funding to weatherize 500 homes in the greater Portland area.

One factor limiting EcoTech’s growth so far is finding workers with weatherization skills. It has a graduated approach to staffing, with trainees, weatherization technicians, project supervisors and energy auditors all working together. Employees can move up that ladder as they gain skills and experience.

“The workforce development is very, very important to me. …I have to balance the work with people who are trained to do a quality job,” Runkel said. “These programs aren’t going to last if we send people into people’s houses and they mess it up.”

Jordan, 27, is interested in making a career out of energy efficiency work. He’s learning on-the-ground weatherization skills, such as how to depressurize a house, find air leaks, install floor insulation, and caulk gaps. Eventually, he’d like to run a crew, learn how to audit, and perhaps even craft policy.

For now, though, he’s happy to have a job that offers a tangible benefit—to the environment and to the community—and makes him feel like he’s making a difference.

“I do like the hands-on aspect of it,” he said. “Each house is different, so you definitely have to be creative and kind of think on the fly.”

Brother Can You Spare a Kilowatt?

Roger Valdez — Thu, 01 Oct 2009 15:01:27

As I have been researching energy efficiency something has bothered me about energy and poverty data. I wanted to see actual income numbers next to energy use, kind of the way we would look at prevalence rates in public health. That would help me wrap my head around the connections between climate policy and fairness. I want to be able to say something like “people who earn less than $15,000 a year pay x percent of their income in energy costs while those who earn more than $50,000 pay much less than x percent.”

I did find a chart on the Department of Energy website that indicated that the average family pays 5 percent of its income in energy costs while low income families pay 16 percent. Pretty good information; but I wanted more. The chart was based on the Residential Energy Consumption Survey (RECS) from 2001. So I looked behind the chart and found data from the most recent survey in 2005.

Here is a snapshot.

Based on our deeply flawed system of measuring poverty, it’s pretty clear that those who are below 100 percent of the poverty line—which, in 2005 was $15,577 for a family of three—pay more per square foot, for energy. What about income?

Logically, as square footage goes down energy costs per square foot would go up. But consider a person who earns $100,000 per year and lives in 1000 square feet and a person who earns $15,000 and lives in 500 square feet. Based on the survey the wealthy person is paying about $760 a year for energy or less than 1 percent of her income. On the other hand the person making $15,000 is paying about $495 a year on energy—or more than 3 percent of his or her income.

Clearly, as a percentage of income, the less you make, the bigger share of your income goes for energy.

But still doesn’t seem like a lot of money does it? Three percent. It is true that after looking at the self-sufficiency standard for Washington State and a recent Washington State University review of rents in the state, energy is cheap enough that it isn’t devouring a dangerous amount of monthly income. Solid and current numbers can be hard to come by, but average rent for a one bedroom apartment in Clallam County in 2004, for example, was about $477 a month which is close to the Fair Market Rent (Set by HUD) of $458 per month for that year. And these numbers are averages. There are actual families in the region who are certainly paying greater percentages for energy.

So, here is what I took away from all of this. Even though poor people are paying a bigger share of their income on energy costs, energy is cheap enough today in the Northwest that it isn’t having a huge impact, yet. I have to emphasize the word yet. Many people have been experiencing trouble paying their bills already and imagine what happens when incomes are lost (unemployment in the region is up as are utility rates). And if energy prices go up suddenly, that 3 percent can become an even larger chunk of a shrinking or disappearing pay check. And all of this assumes a person or family is able to find a place with a rent that fits into their budget.

As Chuck Eberdt from the Whatcom County’s Opportunity Council told me this summer, energy efficiency, for him, really is primarily about reducing poverty and creating fairness. Today many families are already struggling to make ends meet while paying more for energy. Tomorrow achieving broad energy savings could translate into keeping energy costs under control for those who are most vulnerable to price shocks. The time to be addressing efficiency for those on the edge of poverty is today, not when costs soar and do become the difference between families choosing to pay their child care costs or the utility bill.

For more on how energy efficiencies can both address poverty and create jobs be sure to read Sightline's Green Collar Jobs Primer: Realizing the Promise.