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July 28, 2014

$200 Million in Energy Efficiency Funding, Obama Proposes

President Barack Obama will propose $200 million in his next budget for a “Race to the Top” program rewarding states that pursue energy efficiency, asking Congress to put teeth on an initiative to help the US use less electricity.

Mr. Obama’s mentioned the idea in Tuesday’s State of the Union address but didn’t outline a dollar figure or other specifics. The budget proposal is expected next month.

The proposal would be modeled after a similar effort that gave states funding for implementing education reforms, according to a summary provided by a White House official. That program rewarded states who made policy changes in line with the Obama administration’s priorities.

The proposed energy-efficiency funding would “support state governments that implement effective policies to cut energy waste,” specifically measures such as modernizing utility rules and building codes to encourage efficiency and standardizing financing for energy-efficiency upgrades, the summary said.

The White House official said Congress would have to vote to fund the initiative, but the administration believes it can work with lawmakers to implement the new effort under existing law, without authorizing any new programs.

The idea is part of a wider push in favor of energy-efficient buildings, which could help achieve Mr. Obama’s climate change goals by resulting in less greenhouse gas emissions from burning coal or natural gas to make electricity.

“I’m also issuing a new goal for America: Let’s cut in half the energy wasted by our homes and businesses over the next 20 years,” Mr. Obama said Tuesday.

Susan Tierney, who helped author a series of recommendations released last week by the Alliance to Save Energy, a nonprofit group that promotes energy efficiency policy, said the “Race to the Top” funding could be attractive to states.

“Right now the energy efficiency opportunities are massive within all of these states but they also have a lot of other challenges around their economic conditions,” Ms. Tierney said.

Business engaged in energy-efficiency retrofits applauded the proposals, but said it was important to back them up with action.

“Mandates and requirements will be absolutely essential if the administration is serious about cutting energy waste in half,” said Dave Myers, president of building efficiency for Johnson Controls.

Mr. Myers and others are also focused on another of the president’s goals: in December 2011, the White House directed federal agencies to close $2 billion worth of contracts for energy-saving upgrades on federal buildings within two years.

Paul Orzeske, president of the building solutions unit of Honeywell International, said the administration was in danger of falling behind that goal if it doesn’t finish the process of selecting contractors by this summer at the latest. The president is sending “the right message,” he said, “but at a working level you have to get it through the system.”

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About the Author

Jordin Collins, government relations, Mintz levin law firm
Director of Government Relations

Jordan advises clients on issues surrounding clean energy investments, capital markets, and technology commercialization as well as on federal and state policy developments in these areas.

Before joining ML Strategies, Jordan worked for SRA, Inc. as a consultant to the US Department of Energy in both the Office of Energy Efficiency and Renewable Energy and the Office of Policy and International Affairs. In his capacity as a policy and regulatory analyst, Jordan researched and drafted memoranda analyzing clean energy regulatory, tax, market, trade, and financial issues on behalf of...

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