Friday, November 2, 2007

Putting Conserve back into Conservative

When did conserve fall out of the Conservative movement? It's a serious question for Virginians on both sides of the political divide today. Amid the dust ups about climate change and among all the tears shed for drowning polar bears, Conservatives have overlooked the underlying issue of Virginia's runaway, cash and resource wasting energy consumption. No successful businessman would add a vehicle to his fleet or a person to his staff without first being absolutely certain that he had wrung every ounce of efficiency out of his operation. Yet as a state we pay and pay some more to increase energy supplies without addressing our underlying inefficient energy usage. Energy inefficiency is not good business and it's not sound fiscal policy for the Commonwealth.

Companies as large and as diverse as General Electric, Bank of America and 3M as well as future oriented utilities like Florida Power and Light, BC Hydro and Pacific Gas and Electric have all put considerable study into America's energy future and are taking steps to insulate their companies from the coming worldwide energy crisis and inevitable rate hikes as well as rapidly repositioning their product lines and portfolios to take advantage of the New Industrial Revolution (NIR) in energy efficient generation spreading across the nation (Alliance to Save Energy- www.ase.org ). One gauge of the strength of the coming NIR is venture capital investment in Renewable Energy, steady at around $250 million per year for the last several years, suddenly blossomed to $1.5 Billion in the first six months of 2007 alone (Newsweek, 08 Oct 07). Yet Virginia's energy future stands firmly rooted in the dirty past.

In 2006 the American Council for Energy Efficient Economy ( www.aceee.org ) issued it's annual report rating the 50 states in six categories, from Utility Spending on Energy Efficiency to Building Codes to State Leading by Example. The maximum score of 44 points was earned by Vermont while the Commonwealth of Virginia scored a measly 6 points, mostly on the strength of our building codes. Fortunately for the Commonwealth, enforcement of those building codes was not rated or we would have probably fallen even further in the rankings. In the end, Virginia finished 41st in ACEEE's assessment, much lower than it appears because of the numerous two- and three-way ties above us in the rankings.

What Virginians need now is some creative thinking in Richmond about energy efficiency. Our legislature could look to Austin (TX) Energy for inspiration. Back in the early part of this century Austin Energy bought a 3-acre property and set it aside for a future coal-fired electrical plant. Today, that property has yet to be developed as a generation plant. Austin Energy, instead, opted to increase demand-side efficiency first by offering free energy audits to homes and small businesses as well as offering financing assistance and guarantees for energy efficient improvements. In the end Austin saved 600 MW of electricity through increases in energy efficiency alone and avoided building a 500 MW coal-fired generator. The cost of the new efficiency program? The citizens of Austin saved about one half the cost of the proposed billion dollar plus generation plant, and energy efficiency savings keep paying month after month after month.

In Virginia the stumbling block to utility-based efficiency programs is the way that Commonwealth utilities make money. Here, utilities only make money by selling electricity (supply-side), so there is no financial incentive for programs to reduce demand-side waste nor to limit supply-side growth. This is where proper conservative thinking in Richmond can help. We have not suffered an energy crisis in the Commonweath in modern times, but we should learn from those who have. Consider California, seventh largest economy in the world.

Like many people I got a good chuckle as California worked it's way through several energy problems over the last few decades, but California emerged with an energy system more efficient, more supply diverse, and considerably more future proof than that of complacent Virginia. In fact, because they are more efficient, the average Californian consumes only one half the energy the average Virginian does (on an annualized, per capita basis, in millions of BTUs from all sources of energy, less transportation--so as to compare residential and business use alone, Energy Information Agency - www.eia.doe.gov). As I write this, California is now on track to increase energy efficiency 1% per year over 30 years. They're halfway there. That's the equivalent of a major oil field discovered under the state, an oil field that is never depleted.

Nor does Virginia's government lead by example, as highlighted in the ACEEE ratings. Governor Kaine's 2007 Virginia Energy Plan is largely aspirational (aspirational goals having replaced Blue Ribbon Commissions in politics as the political fig leaf of choice for lack of vision and legislative inaction). The energy re-regulation bill now coming out of Richmond is largely written to favor one supply-side intensive industry. Our state legislature will not even commit to a modest Renewable Energy Portfolio Standard or enforceable Energy Efficiency standards for Virginia (again, offering only aspirational goals), even though there is a 20% payback on energy efficiency investments. My own city of Virginia Beach, is equally guilty. With 200 other cities Virginia Beach signed the Cool City Initiative, but as far as I can discover has made pitifully little progress toward energy independence nor energy efficiency for the city. Our elected leadership may not get it, but leaders in other jurisdictions do.

In Blountville, TN, for instance, the Sullivan County School District engaged in a performance contracting project to improve energy efficiency in their schools (projects from daylighting, to geothermal heating and cooling to just shutting off computers overnight--which saved the district $35-40k/year alone). No new taxes were raised for the project, the schools received millions in energy efficient upgrades and the district is saving $1 million dollars per year in energy expenditures, cash which they then put back into the classroom. Sumner Country, TN, installed geothermal heating and air conditioning in their schools and now have an extra $5k per month in cash flow to invest in education. The state of Kentucky saves $3 million per year in replacement and manpower costs by replacing every traffic signal with long lived LEDs signals ( www.kilowattours.org ). Even the most mundane application can be improved. It is estimated (FacilityManagement.com) that all the EXIT signs in the nation burn about 35 billion KWH per year. If those were replaced with more efficient LED models, it would save about 90% of the energy, the equivalent of 5 nuclear power plants.

So before Virginia agrees to yet another expensive, mountain destroying, air and water polluting, $1.5 billion coal-fired generation plant in Wise county, before we open a new power line corridor to the Ohio Valley to get yet more energy from some of the oldest, most inefficient coal-fired plants in the nation, join me on insisting that our representatives in Richmond ensure the Commonwealth is operating as efficiently as possible. Join me in putting the conserve back into Conservative.