Everything You Always Wanted to Know About Congress**But Were Afraid to Ask

Plumbing Manufacturers InstituteOctober 8, 2008

Arlington, Virginia

Brian T. Castelli, Executive Vice President-Programs/Development

Presentation Outline What is the Alliance to Save Energy? What Ails Congress? EISA – Post-Mortem Looking Ahead 2009 Water/Toilet Efficiency Legislative Strategy

An NGO whose mission is: To promote energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security

Guided by a 37-Member, Elected Board of Directors

- Led by Sen. Mark Pryor (D-AR) & Jim Rogers, CEO of Duke Energy

- 9 Members of Congress – Bi-Cameral; Bi-Partisan

- Environmental, consumer, and trade associations heads, state and local policy makers, corporate executives

What is the Alliance?

Alliance ASSOCIATES

Forging Alliances with Business, Govt. & Public Interests

Alliance enjoys sponsorship by >150 businesses and organizations across a broad spectrum of economic sectors.

Complete list at: www.ase.org/section/_audience/associates

First, What Ails Congress?

Whatever happened to the Congress that used to pass Appropriations bills and follow regular order?

The Broken Branch: Neither body passed a single appropriations bill in ’08 and the Senate set an all time record for filibusters.

What’s Wrong Under the Dome

Collapse of the center in Congress – extinction of the “moderates”

Sharper partisanship in the last 20+ years The impact of “permanent campaigns” Weaker Congressional leadership Trend to the extreme in both parties: “anything

goes” as “the ends justify the means” Adversaries are enemies Bending of rules & precedents “Regular order” is frequently ignored (e.g.

votes held open)

Maybe Gridlock should be the national pastime?

Post-Mortem on EISA

Energy Independence & Security Act (EISA), P. L. 110-140, is the most sweeping energy bill enacted in over 30 years

First increase in CAFE standards (to 35 mpg by 2020) since 1975

Renewable Fuel Standard (RFS): Set a minimum annual volume of renewable fuel in U.S. gasoline, rising to 36 billion gallons in 2022

Appliance & Lighting Efficiency standards

Left on the Cutting Room Floor

Renewable Energy Portfolio Standard: Would have required electric utilities to generate15% of their electricity from renewable energy resources by the year 2020; up to 4% of the 15% target could have been met with EE measures

Energy Tax Incentive extensions were also left out, because they were “paid for” by $22 billion in oil and gas subsidies that would have been repealed

End Game: the 110th Congress Partisan, election-year wrangling & disputes

over “pay-fors” prevented final action on tax incentives legislation, despite overwhelming support in both House & Senate

House-passed Pelosi energy bill and “Gang of Twenty” package in the Senate fell by the wayside after Wall Street crisis erupted

Efficiency and Renewable Tax Incentives finally pass as part of “Bail Out” – Rnd. 2- Kateri Callahan at Press Conference with Sns. Baucus, Grassley &

Bingaman to push tax credits, House doesn’t include them in their NO vote, & then Senate puts them back in their bill & it passes in House as well.

For the 111th Congress, energy legislation will be front and center

Good chance for another economic stimulus bill in January – perhaps addressing the anticipated home heating oil crisis this winter

Increasing support for Green Jobs as a means of retraining the unemployed and addressing energy efficiency for existing homes;

Support growing for Tom Friedman’s idea of a “green revolution” that would rebuild the economy and develop new markets overseas for RE and EE technology

Looking Ahead

2009 Outlook Good chance for a major energy bill ahead of

climate legislation Push to enact provisions left over from EISA,

e.g. RES and building energy codes, and for $$ for authorized but unfunded provisions from EPACT ‘05 and EISA ‘07

Alliance is developing a “portable package” of policy recommendations for appropriations “asks” and for new proposals such as Smart Growth/VMT

We will be briefing transition teams on our “asks” Transportation Reauthorization is up in ’09 and

will be a major target for EE initiatives

Alliance, together with other organizations, is working to develop recommendations for the next climate bill

We are looking at evaluation, measurement and verification; third-party programs; how much should be spent on R&D

Objective is to develop a unified “ask” from the efficiency community by the end of this year, then start briefing Congressional staff

We expect negotiation on the next climate bill in ’09, with enactment of a bill more likely in 2010

Economic woes, war in Iraq/Afganistan/etc., and new Administration initiatives expected to crowd out climate bill in ‘09

What about a Climate Bill?

After Wall Street collapsed, this election is indeed about change

small

change

The Water and Energy Connection – the Big Picture

The National Regulatory Research Institute (2006) and the Electric Power Research Institute (2002) determined that the production of 1,000 gallons of water (from ground and surface) uses 1.4 kWh and 1.8 kWh, respectively. That’s enough water for only 1 person for 10 days.

The Alliance’s International WATERGY program reduces water and energy consumption in the delivery of water from the utility to the consumer. In many of the municipal water projects we have done, water and energy costs are 60 to 80% of a municipality’s overall budget. (example follows)

EPA notes that supply and treatment together use 56 Billion kWh per year.

CASE STUDY: Emfuleni, South AfricaESCO Model of Performance Contracting APPLIED TO WATER

PROBLEM• 80% of water delivered was lost through leaking plumbing fixtures! • Exacerbated by high pressure in bulk water supply lines: makes existing leaks worse; premature failure of plumbing fixtures in this low-income area.

SOLUTIONFix/replace plumbing fixturesPressure reduction Water pressure management firm acting as ESCOFees: firm gets 20% of savingsBuild-Own-Operate-Transfer to municipality after 5 years

Emfuleni Case Study, continuedThe water lost was enough to fill two Olympic swimming pools every hour!The water lost was enough to fill two Olympic swimming pools every hour!

Emfuleni Case Study, continued

RESULTSRESULTS• • PaybackPayback period: 3 months period: 3 months

• • Annual Savings Annual Savings

COST: $3.8 millionCOST: $3.8 million

ENERGY: >14 million kWhENERGY: >14 million kWh

WATER: 7 million kilolitersWATER: 7 million kiloliters

COCO22 Emissions avoided: Emissions avoided:

12,000 tonnes12,000 tonnes

• • Performance contracting applied to water supplyPerformance contracting applied to water supply

Case Study – the 1.28 Solution

High-efficiency toilets are defined by the EPA as those that use an average of 20% less water per flush than the industry standard of 1.6 gallons

High-E toilets can save up to 8,760 gallons of water annually for a family of four (averaging 24 flushes/day)

Types include the gravity-fed, single-flush, dual-flush, pressure-assist and power-assist high performance toilets

Case Study – the 1.28 Solution

EPA Water Sense high-efficiency toilet standard is set a 1.28 gpf (with removal of 350 grams of waste) as of 1/24/07

California passed the 1.28 gpf standard in 07 Need to avoid different state standards,

particularly as more states understand water conservation and the water/energy nexus.

So, how best to legislate a 1.28gpf standard?

Alliance Legislative Strategy RecommendationsBuild your campaign around realistic expectations;Make sure you have all the technical data in hand for the first meeting with committee staff; Have supporting letters to the Committee from key “stakeholder” groups; Be prepared to answer “who opposes the provision & why”; andDemonstrate energy efficiency savings plus environmental & water gains

Identify your champions & get the right legislative vehicle

• Any successful legislative “campaign” begins with securing the right “champions” for your initiative, in this case legislative language mandating a national standard;

• Stand-alone bills are difficult; • Identify a broader bill that has “legs” and then

cross-walk the committee members with your natural constituencies;

• Find a key member of the authorizing committee to “champion” your issue

Build the Right Coalition to Yield Success• Any technical legislative provision ultimately

depends on the coalition of supporting organizations; members must be contacted;

• Work closely with the federal agency involved (DOE) to make certain there isn’t opposition or unanswered questions at the agency level;

• Is there a CBO “scoring” issue – what, if any, is the cost impact of the provision?

• Quantifiable numbers must be developed in support;

• Look at working with trade press to build interest and credit the members who work on your issue

Contact Us!Alliance to Save Energy

1200 18th Street, NW

Washington, D.C. 20036

Phone: 202.857.0666

Website: www.ase.org

Brian T. Castelli, EVP Programs & Developmentbcastelli@ase.org

Brad Penney, Director, Government Relations bpenney@ase.org

“The Broken Branch,” by Thomas Mann and Norman OrnsteinOxford Press, 2006

“Hot, Flat & Crowded,”by Thomas L. FriedmanFarrar, Strauss & Giroux, 2008

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