Legislation Crossfire Setting the Stage David K Owens

Legislation Crossfire Setting the Stage David K. Owens AABE Chair Legislative Issues and Public Policy Committee 2010 Annual AABE Conference May 20, 2010

America’s Challenges n Stimulate economy and get America back to work n Health Care (Legislation passed) n Financial Reform n Immigration n Address climate change n Transform our society to be greener and more efficient

n Increases in Energy Prices Hit Low - and Fixed-Income Households the Hardest Income spent on energy for households earning l l l n >$50, 000 / year - 7% of income $10, 000 - $30, 000 / year – 20% of income (25% of households) <$10, 000 / year - 46% of income (8% of households) One-third of Americans shoulder major energy burden Households earning < $30, 000 Mostly senior citizens, single parents, and minorities l Force hard decisions about what bills to pay … housing, food, education, health Sources: Redefining Progress; U. S. Census Bureau, Current Population Survey, 2006 Annual Social and Economic Supplement care, and other necessities l

Climate Change Questions We Must Answer! n How do you minimize the impact of compliance costs on consumers? n What must U. S. climate change legislation and carbon management strategy include to l Ensure economic growth? l Ensure energy security? l Avoid unfairness?

Protecting Customers n Targets & timetables l n Timing of transition to full auction l n Must be harmonized with the availability of technologies Allocation of allowances can help address cost of compliance Other ways to mitigate cost impacts on consumers l l l Price collar / safety valve Offsets Strategic allowance reserve

Different Regions of the Country Different Fuel Mixes to Generate Electricity *Includes generation by agricultural waste, landfill gas recovery, municipal solid waste, wood, geothermal, non-wood waste, wind, and solar. ** Includes generation by tires, batteries, chemicals, hydrogen, pitch, purchased steam, sulfur, and miscellaneous technologies. Sum of components may not add to 100% due to independent rounding. Source: U. S. Department of Energy, Energy Information Administration, Power Plant Operations Report (EIA-923); 2008 preliminary generation data. January 2010 © 2010 by the Edison Electric Institute. All rights reserved.

African American Communities: Have high unemployment rates l Have the lower median family income l Are in regions heavily dependent on power generated by coal l Have the least access to Renewable Energy l May be Required to Purchase Renewable Energy From Other Regions of the Country l Will be significantly impacted by Climate Change efforts l

What Will It Take to Address Climate Change? There is no silver bullet! n Renewables n Energy efficiency n Clean coal technologies n Carbon capture and storage n Nuclear n Plug-in hybrid electric vehicles (Smart grid) We need it all … but it will be costly!

Energy Efficiency Can Lower Bills Help Address Climate Change n Average US household owns 24 consumer electronic products l l l 2 DVRs use as much energy in 1 year as a refrigerator Play Station and X-Box use more electricity than a PC PCs and TVs now account for 10% of a home’s electricity usage 99% of these products must be plugged in or recharged 42” Plasma TV uses more than twice as much as a standard 27” TV n More efficient use of energy could significantly reduce energy bills n Need to educate all consumers about how to save energy and use it more efficiently

American Reinvestment and Recovery Act (ARRA) Total: $78 Billion

Beyond Green Jobs: America’s Future Energy Jobs Source:

Opportunities - Green Jobs n Energy Independence and Security Act of 2007 l n American Reinvestment and Recovery Act (Stimulus Bill) l l n $125 million / year to create a worker training program, special focus on opportunities for low income people Significant funding for a broad range of programs – including energy efficiency, renewables, climate change, smart grid Workforce training Home Star Energy Retrofit Act of 2010 l Authorize $6 billion over 20 years for a national energy retrofit program for American homeowners

Opportunities - Green Jobs n Renewables - Roof-top solar heating, water, energy l n Energy Efficiency l l n Energy audits, retrofits, new technologies, green building standards Efficiency management – data mining Smart meters / smart grid l n Meeting the increasing state, federal and consumer requirements Replacing legacy systems with new technologies Demand response l Provide consumers and utilities with new tools to manage demand n Plug-in Hybrid Electric Vehicles n Need programs to develop and attract new talent

What Do We Need To Do? n Cost mitigation l n Jobs and Small Business l n Mitigate the costs on low-and fixed-income consumers associated with the new energy and climate economy Create jobs and business opportunities for minority communities, and for minorities in general; and Energy Literacy l Facilitate improvements in energy literacy through education, training, and outreach