WGA Clean and Diversified Energy Advisory Committee Briefing

1. WGA Clean and Diversified Energy Advisory Committee Briefing Brian Horii Energy and Environmental Economics, Inc 415-391-5100

2. Background • Clean and Diversified Energy Initiative launched in June 2004 • “Identifying ways to increase the contribution of renewable energy, energy efficiency, and clean energy technologies within the context of the overall energy needs of the West.” • Transportation, buildings, electricity, and other needs

3. Goals • 30,000 more MW of clean energy by 2015 (EE, solar, wind, geothermal, biomass, clean coal, advanced natural gas) • 20% electricity savings by 2020, relative to reference case • Ability to meet transmission needs of the West for the next 25 years. • Better position Western energy system to respond to new environmental challenges

4. Clean and Diversified Energy Advisory Committee • To identify technically and financially viable policy mechanisms, stressing non-mandatory, incentive-based approaches • Formed task forces for specific options such as energy efficiency • Consider price, reliability, and the mitigation of environmental impacts of all recommendations • Develop energy efficiency recommendations that take into account all types of energy used in buildings, not just electricity • Identified cost-effective energy efficiency that can reduce annual load growth in the West from 2% to 0.5% .

5. Task Force Recommendations – State Level • Electricity • Require utilities to integrate cost effective DSM into resource planning and procurement • Dedicate at least 2% of revenues to energy efficiency (if cost effective (CE)) • Establish minimum savings targets • Recommend 3-5% of projected sales in 2010 (if CE) • Recommend 10-15% of projected sales in 2020 (if CE) • Decouple • Add incentives for implementing CE DSM programs

6. Task Force – Gas • Encourage or require utilities to • integrate EE into resource planning and procurement • pursue EE whenever it is the lowest cost resource option • Recommend investing 1.5-2% of revenues on EE • Recommend 0.5-1.0% savings per year (if CE) • Decouple, add incentives for implementing CE DSM programs

7. Task Force – Building Energy Codes • Adopt the 2004 International Energy Conservation Cost, and consider features of CA Title-24 • Update codes frequently (3-yr cycle suggested) • Implement code training and technical assistance for architects, builders and local code inspectors. • Establish a “reach code” for state-owned buildings to exceed the standards • Establish a regional building code collaborative

8. Others • Adopt minimum efficiency standards for appliances not covered by federal standards • Establish goals for reducing energy intensity by 2%/yr or greater in state buildings • Consider providing tax incentives • Decouple and adopt inverted block rates for residential electricity and consider for natural gas • Continue and expand education and training • Initiate, continue and expand R&D

9. Task Force – Regional Initiatives • Create regional market-transformation organizations • Promote energy star, train the building sector, develop targets and standards, promote best practices, and perform R&D. • Building energy code collaborative • Coordinated appliance standards advocacy • Quantify air emission benefits of EE • Inclusion of EE in transmission planning • Develop a working group to help overcome the barriers to implementing EE in commercial and public buildings.