CNEE Powering Forward Full Report

Powering Forward:
Presidential and Executive

Agency Actions to Drive
Clean Energy in America
Even in the face of Congressional inaction, President
Obama can leverage executive branch power, unleash
enterprise and investment, and move America
toward a clean energy future that curbs climate
change. Featuring 200 specic recommendations
developed by more than 100 industry experts and
top energy thinkers, Powering Forward provides the
Administration with options to move the nation closer
to a clean energy economy.
Powering Forward:
Presidential and Executive
Agency Actions to Drive
Clean Energy in America
1 www. Poweri ngForwardPl an. org
Foreword
In his 2013 State of the Union address, President
Barack Obama told Congress that if it did not act to
curb global climate change, he would.
And he did. Five months later, the President issued
a comprehensive climate action plan that does not
require congressional action. Many of the items already
have been implemented or put in motion.
Te Presidents plan adds to the long list of initiatives his
administration has accomplished since 2009, ranging from
historic vehicle efciency standards to the regulation of greenhouse
gas emissions from power plants.
Are there additional steps the President can take in the next three years to mitigate climate
change and move America closer to a clean energy economy? Te answer is yes. But they will
require considerable work by the administration and support from the American people. Tey
will also require steps by the President to unleash enterprise and investment across the country.
In March 2013 President Obama met with 14 energy thought leaders, representing a variety
of stakeholder groups, to discuss how he could further pursue a clean energy agenda using
his lawful authority. Following the meeting, the leaders asked the Center for the New Energy
Economy (CNEE - the Center I founded in 2011 at Colorado State University) to undertake
a deeper examination of the Presidents options in fve discrete areas. In response, CNEE
launched an eight-month initiative to gather ideas for additional presidential action on climate
and clean energy. In dialogues, roundtables and peer reviews, CNEE engaged more than 100
participants, including chief executive ofcers, chief fnancial ofcers and other top executives
from industry, academia, research institutions, NGOs and state and local governments. We
asked them what new actions by the President and his executive agencies would help our nation
be more efective in meeting our climate and our energy goals.
Te fve areas of focus are:
!" Doubling energy productivity
$" Financing renewable energy
%" Producing natural gas responsibly
&" Developing alternative fuels and vehicles, and
'" Enabling electric and gas utilities to adapt to the new realities of the 21
st
century
100 CEOs, CFOs,
academics, researchers,
NGOs & government
leaders pinpoint
climate and energy
security imperatives
Two rules governed this process. First, we applied the Chatham House Rule, ensuring partic-
ipants anonymity to encourage open dialogue and free exchange of ideas. In accordance with
that rule, we have not attributed ideas to specifc individuals or organizations. Second, we en-
couraged but did not require consensus. Not all participants agreed with all of the recommen-
dations in our fnal report, but everyone had a substantive voice in the process.
Four principal themes emerged during the CNEE exercise:
!" As CEO of the nations largest energy customerthe Federal Governmentand
CommanderinChief of the armed forces, the President should use the full power of
federal procurement to help create the large and stable markets that will attract more
investment in clean energy goods and services. Tat will require changes in the pro-
curement system.
$" Many of the most important legal responsibilities related to energy use and carbon
emissions reside in states and localities. Te Federal Government should help states
and localities assert their leadership with increased research, technical assistance and
carefully targeted fnancial assistance.
%" Te Federal Government and its policies will have to be retooled to support a clean en-
ergy economy. For example, many industry leaders who are eager to participate in the
energy transition say they are inhibited by government regulations that are not keeping
up with todays rapid changes in energy technology and customer preferences.
&" Te administration can make strategic changes in fscal policy to help move private
capital at every level of the economy of the sidelines and into clean energy.
Tis report ofers President Obama and his administration more than 200 recommendations
for Americas transition to a clean energy economy recommendations that CNEE believes can
be implemented with the Presidents existing authority. Many of the recommendations can be
implemented immediately; some will take several months; and others may not be completed
until afer President Obama leaves ofce.
President Obama deserves credit for his resolve to take action on climate change. Tis report is
intended to help him. Tere simply is no more important issue and no time to waste.
Bill Ritter, Jr.
41st Governor of Colorado
Founder and Director, Center for the New Energy Economy
The Clean Energy Transition Has Begun
But It Must Move Faster
Te President has a wide variety of executive authorities to address climate change and shape energy policy
without further action by Congress. Te Constitution confers some; precedent establishes others; and most
have been delegated to the Executive Branch by past Congresses.
How actively a president uses these authorities, however, may depend on the breadth
of support from the American people. Te challenge for the President and his
team is to rally the American people around the objective of creating a clean
energy economy, to encourage their support and concrete action, and to un-
leash the economys enormous reservoir of uncommitted private capital for
investments in clean energy.
Te reality is that Americas transition to a clean energy economy is not just
a job for the future; its already underway. But, if we are to avoid the worst
consequences of global warming and if we hope to capture the emerging
global market for clean energy technologies, we must accelerate the pace of this
transition. Indeed we must redouble our eforts for the sake of future generations.
Doubling the Nation!s Energy Productivity
During his 2013 State of the Union address, the President announced a new goal: To double the energy
productivity of the U.S. economy by 2030. Tat is both a challenge and an opportunity. According to the
American Council for an Energy Efcient Economy, the national economy wastes 87% of the energy it
consumes a level of inefciency that undermines our competitiveness, produces more greenhouse gas
emissions, and costs every American family and business money.
Te Alliance to Save Energy estimates that doubling our energy efciency would save consumers $327 bil-
lion annually, including more than $1,000 each year for the average household. Businesses would save $169
billion annually, about as much as the entire corporate sector paid in federal income taxes in 2011.
President Obama already has taken several steps to improve the Federal Governments productivity and
cut its energy bills. Shortly afer taking ofce, the administration cleared up a longstanding bottleneck in
appliance efciency standards. In October 2009, the President issued Executive Order 13514 directing
agencies to reduce the energy and carbon intensity of federal buildings. And in December 2011, he direct-
ed agencies to execute $2 billion in energy saving performance contracts (ESPCs), arrangements in which
private companies make energy efciency improvements to federal buildings with guaranteed results.
Tere is no cost to taxpayers. Te companies are repaid by sharing the governments savings on energy
America!s historic
transition to clean
energy already is
underway.
bills. In addition, the Administration cleared up a longstanding bottleneck in appliance efciency stan-
dards shortly afer taking ofce.
However, there is greater potential for using ESPCs. Roadblocks remain in the contracting process. And
the backlog in appliance efciency standards has reappeared.
RECOMMENDATI ONS TO THE PRESI DENT
Amend the December 2011 ESPC directive to require that
agencies execute $1 billion in energy saving contracts in
each of the next 5 years.
Direct agencies to use ESPCs more widely to fund
efciency projects in pubIic housing, demand-
response programs, data center consolidations,
combined heat and power systems, waste-
to-energy projects and other energy-saving
projects.
Order the Ofce of Management and Budget
(OMB) to complete its review of new appliance
efciency standards within 90 days, as its own ruIes
require.
Direct the U.S. Department of Energy (DOE) and the Federal
Housing Finance Authority to analyze government mortgage data
to nd out whether residentiaI energy efciency investments
reduce mortgage defaults. If they do, direct federal agencies that
administer mortgage programs to reect this benet in their Ioan
terms. Encourage private lenders to do the same.
AIIow eIectric utiIities to earn credit for energy efciency
investments beyond the fence lines of their power plants as they
comply with EPA!s regulation of greenhouse gas emissions from
generation plants.
Work with the building industry to develop a model national code
for net-zero energy buiIdings.
We can cut the
government!s
energy bills
with guaranteed
results at no cost
to taxpayers.
Financing Renewable Energy
Renewable energy is an essential element of a clean energy economy, and renewables are ready now. Te
amount of electricity from solar and wind power in the United States has doubled over the past four years.
Today, wind energy supplies enough electricity for 15 million homes. By mid-century, renewable energy
technologies commercially available today could provide more than 80% of Americas electricity, according
to the Department of Energys National Renewable Energy Laboratory.
Te administrations goal is to make solar power cost competitive with traditional power generation by
2020. Te President has nearly tripled his goal for renewable energy use in federal facilities, setting the
target at 20% by 2020. He has proposed that the nation obtain 80% of its electricity from clean energy
resources by 2035. And the Department of Defense is working to obtain 25% of its energy from renewable
resources by 2025.
Renewable resources (including hydropower) provide 12% of Americas electricity today. Te Energy
Information Administration projects that if we continue business as usual, the contribution of renewable
energy will grow to only 16% by 2040. Tat is not enough.
Develop methods for accurately counting the full costs of various
energy choices, including pollution and health care costs that
have been externalized in the past. Use these methods to
establish priorities for federal support of energy resources and
direct it to the best of the above rather than all of the above.
Clarify that federal agencies can enter into power purchase
agreements for periods of up to 25 years.
Expand the use of ESPCs to nance micro-grids, distributed
generation projects and other proven but underutiIized energy
technologies that result in operational and maintenance savings.
Design standards for greenhouse gas emissions from power
plants under Section 111(d) of the Clean Air Act to promote the
use of renewable technologies.
Request that the IRS issue a revenue ruling that Real Estate
Investment Trusts can invest in renewable energy. In addition,
encourage the IRS to determine whether it has the authority to
qualify renewable technologies for Master Limited Partnerships
in the tax code.
Request that the Comptroller of the Currency make clear
that community banks will be credited under the Community
Reinvestment Act for nancing renewabIe energy and
energy efciency projects in Iow- and moderate-income
neighborhoods.
Direct the DOE to study federal, state and private data to
determine the extent to which renewable energy investments
raise the market value of homes and businesses. If the study
veries that benet, direct federaI mortgage agencies to factor
it into the terms of their loans.
Champion parity for renewable energy with fossil energy as
part of tax reform. The objective is not to make the code more
complex, but more fair. Direct the appropriate agencies to
review other eIements of federaI scaI poIicy to identify and
reform policies that encourage greenhouse gas emissions.
Work with states to reaIIocate $2 biIIion in unused QuaIied
Energy Conservation Bonds for investments in renewable
energy projects.
Work with trusted messengers in rural America to promote
full use of the Department of Agriculture!s new loan guarantee
program for renewabIe energy projects by ruraI eIectric utiIities
and their customers.
Convene state Treasurers and launch a state/federal
partnership to align state and federal loan programs with the
goal of maximizing private capital investment in renewable
energy.
Robust and Responsible
Natural Gas Production
President Obama supports responsible natural gas production. Executives from the natural gas industry
told CNEE they value reasonable government regulation. On one hand, regulation can weed out bad ac-
tors, provide certainty for business planning, and improve the industrys social license to operate. On the
other hand, inefective, unnecessary or excessive regulations impede production and increase costs.
Te regulation of natural gas production is largely a state responsibility, but the Federal Government can
help in several ways.
Direct the Bureau of Land Management to
require that gas producers use and demonstrate
the best available technologies and practices
on federal lands, including full disclosure of
hydraulic fracturing agents, zero tolerance for
methane leaks, sound water management and
minimal land disturbance.
Direct the Council on Environmental Policy
and the Ofce of Science and TechnoIogy
Policy to work with states and the natural gas
industry to improve the states! ability to inspect and enforce
environmental rules.
Work with states to develop a nationwide methane reduction
strategy in the natural gas value chain, from wellhead to power
pIants, buiIdings and naturaI gas vehicIes. Direct ARPA-E to
research and develop more effective ways to monitor and
prevent methane leaks.
Create a presidential George P. Mitchell Award for gas
producers who achieve excellence in environmental
performance; innovate to minimize the environmental and
social footprints of production; and build collaboration among
producers, regulators and public interest organizations.
Natural gas
companies
must use the
best available
production
methods on
federal lands.
21
st
Century Utilities
Most Americans dont fully appreciate the importance of their electric utilities until their lights go out. Yet the
nations utility sector does an admirable job of providing reliable electricity vital to the economy and to our
quality of life.
Today, electric utilities face enormous challenges adjusting to emerging
trendstrends that raise questions about how renewable resources should
be valued and incorporated into consumer rates; how distributed gen-
eration should be incorporated into the traditional electric grid; and
how utilities should handle power dispatching when their energy mix
includes resources that have no fuel costs. Utilities recognize their
challenge, but they are without a working model or example. Te
Federal Government should pilot new revenue models for utilities to
adapt to disruptive technology and environmental challenges.
Utility regulation is primarily a state responsibility, but the Feder-
al Government can help policy makers and public utility regulators
answer these questions and reshape their business models for the 21
st

century.
Direct DOE!s four Power Marketing Administrations and
the Tennessee Valley Authority to develop and demonstrate
the policies and practices necessary for electric utilities to
incorporate renewable energy and distributed generation into
their rates, infrastructure and management practices.
Direct DOE!s National Laboratories to provide research and
expert testimony at public utility commission hearings to
help identify and resolve issues related to the integration
of renewable energy in rate structures, new utility revenue
models, and true integrated resource planning.
Ensure that Quadrennial Energy Reviews connect the
dots between the systems integration work at the National
Renewable Energy Laboratory and the Federal Energy
Regulatory Commission!s work on the transmission system.
Technology
advancements are 10
years ahead of utilities
and utilities are ahead
of regulation. America
needs a new utility
revenue model and
regulatory compact that
can keep pace.
Direct DOE and the Department of Homeland Security (DHS)
to work with industry to identify resilient pathways for
transmission infrastructure.
Direct DOE and DHS to develop model policies that help state
utility commissions adapt to regional climate impacts.
Alternative Fuels and Vehicles
A principal mission of national transportation policy should be to develop and deploy sustainable non-pe-
troleum fuels, the infrastructure that moves them to market, and the vehicles that use them. Tis mission
is not made less important by the prospect that the United States may soon produce enough oil to elimi-
nate petroleum imports. Te world oil market will still control prices. Whether oil comes from the Persian
Gulf or the Intermountain West, the need to control carbon emissions will impact oils overall use.
Te President has already triggered a transformation in Americas transportation sector. In his frst term,
his administration nearly doubled fuel economy standards, requiring that new cars and SUVs must
average at least 54.5 MPG by 2025. By September 2013, the average fuel economy of new cars and trucks
had already climbed to 24.9 MPG, up from 20.1 MPG in 2007, according to a study by the University of
Michigan. Te administration projects that the new efciency standards will save families more than $1.7
trillion in fuel costs and result in signifcant reductions in carbon emissions. Te new regulations have
also pushed American auto manufacturers from the brink of bankruptcy to resurgence in innovation and
global leadership. Other administration initiatives have included:
A Clean Energy Grand Challenge EV Everywhere program designed to make electric
vehicles as afordable and convenient as gasoline powered vehicles for the average
American family by 2022.
Requirements that all federal government feet purchases must be alternative fuel vehicles
by 2015 and that federal agencies must cut their petroleum consumption by 30%.
Te frst-ever efciency and greenhouse gas emission standards for heavy-duty vehicles
starting in 2014.
Te now-accomplished goal to break ground on four commercial-scale cellulosic or
advanced bio-refneries to bring advanced biofuel production to commercial scale.
Direct DOE, the Department of Agriculture and
the Department of Transportation to develop a
roadmap that cIearIy identies the poIicies,
milestones, performance measures and
sequencing necessary to achieve the
President!s vehicle and fuel goals.
Ensure that better vehicles and fuels do
not resuIt in Iess support for non-vehicuIar
improvements in mobiIity, incIuding transit-oriented
urban design, public transportation, intermodal
transportation systems and safe facilities for walking and
biking.
In assessing the benets and costs of different aIternative
fueIs, incIude the Iife-cycIe costs of the infrastructure
necessary to get them to the retail market.
When considering federal support, determine where it will be
most effective in the alternative fuel and vehicle value chains.
For example, some stakeholders told CNEE that if a choice
becomes necessary, natural gas resources would be better
used in power plants where they displace coal and provide
clean power for electric vehicles, rather than used in natural
gas vehicles.
Give preference to third-party transportation providers - for
exampIe, freight and deIivery services - that use aIternative
fuels and alternative fuel vehicles.
Create a "GoIden Carrot for advanced biomass fueIs -
a signicant cash prize for the breakthrough that most
contributes to the successful commercialization of cellulosic
biofuels.
We need
a national
roadmap for
alternative fuels
and vehicles.
Conclusion
Among the more than 200 specifc recommendations submitted to President Obama as a result of the
CNEE leadership dialogue, there are several underlying messages.
First, to ensure the nations economic stability, environmental health, national security, and opportunity
for generations to come, the transition to a clean energy economy must be accomplished more rapidly
than any previous energy shif.
Second, the nations energy policies and investments must be determined not by political pressures, but
by objective full life-cycle analyses of each options benefts and costs. Objective analysis will help resolve
the inconsistencies between the Presidents climate goals and an energy policy that makes no distinction
between carbon-rich and clean energy resources.
Finally, President Obama can build an enduring legacy by activating the American peoples commitment
to sustainable energy and by using the power of the Federal Government in partnership with states, utili-
ties and industry, to open new opportunities for private investment in the clean energy economy.
The Center for the New Energy Economy is a privately funded
initiative to support the growth of a clean energy economy across the
United States. It is led by former Colorado Governor Bill Ritter and
is assisted by some of the nation!s most important thought leaders
in clean energy research, development and commercialization. Its
mission is to incorporate best practices from around the nation and
world to accelerate the development of a new energy economy.
The Center denes "cIean energy as technoIogies and resources
whose Iife-cycIe impacts are beneciaI to nationaI security, economic
vitality, energy supply sustainability, environmental health, public
health, the reduction of greenhouse gas emissions, the conservation
and restoration of ecosystem services, sociaI equity, high-quaIity
jobs, and wise use of water and other criticaI naturaI resources.
The Center for the New Energy Economy provides policy makers,
governors, planners and other decision makers with a roadmap
that will accelerate the nationwide development of the new energy
economy. That economy wiII create and keep jobs in the United
States; encourage development and use of clean and affordable
domestic energy; protect our environment and climate; and keep
America on the leading edge of global competition. The Center
helps to guide the country along the road to a more secure, stable,
sustainable, and affordable energy future.
For the complete list of CNEE!s recommendations to the President,
go to www.poweringforwardplan.org.
www. cnee. col ost at e. edu
Poweiing Foiwaiu
Centei foi the New Eneigy Economy
1S
!"#$% '( )'*+%*+,

-./*'0$%12%3%*+, 4444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 56
7*+8'19.+:'* 444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 5;
)<"=+%8 5> ?'9#$:*2 -3%8:."@, A*%82B C8'19.+:D:+B 44444444444444444444444444444444444444444444444444444444444444 E5
C8%,:1%*+:"$ 7*:+:"+:D%, 444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 EE
uoal 1: Tiiggei Economy-Wiue Investments in Eneigy Piouuctivity .................................................... 22
uoal 2: Remove Auministiative Roaublocks to Eneigy Piouuctivity Impiovements ....................... 28
uoal S: Inciease Collaboiation with States, Localities anu 0tilities ......................................................... Su
F%1%8"$ -2%*.B -.+:'*, 44444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 G5
Bepaitment of Eneigy ................................................................................................................................................ S1
Enviionmental Piotection Agency ......................................................................................................................... SS
Bepaitment of Bousing anu 0iban Bevelopment ........................................................................................... SS
Bepaitment of Bealth anu Buman Seivices ....................................................................................................... S6
0ffice of Nanagement anu Buuget ......................................................................................................................... S6
Feueial Emeigency Nanagement Agency .......................................................................................................... S6
Small Business Auministiation ............................................................................................................................... S7
veteians Auministiation ........................................................................................................................................... S7
Feueial Bousing Auministiation ............................................................................................................................ S7
Bepaitment of Tianspoitation National Bighway Tiaffic Safety Auministiation .............................. S7
Feueial Eneigy Regulatoiy Commission ............................................................................................................ S7
)<"=+%8 E> ?%D%$'=:*2 H%*%0"#$% A*%82B I"8/%+, 4444444444444444444444444444444444444444444444444444444444444444 GJ
C8%,:1%*+:"$ 7*:+:"+:D%, 444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 GK
uoal 1: 0pen New RE Naikets with the Clean Aii Act .................................................................................. S9
uoal 2: Noueinize anu Nobilize Feueial Electiic System Assets ............................................................. 4u
Feueial Eneigy Regulatoiy Commission (FERC): ........................................................................................... 41
Powei Naiketing Auministiations (PNAs): ..................................................................................................... 44
Tennessee valley Authoiity (TvA): ...................................................................................................................... 47
Feueial lanus................................................................................................................................................................ .. 48
uoal S: Inciease Collaboiation with States, Localities anu 0tilities ........................................................ 49
uoal 4: Naximize the Powei of Feueial Piocuiement .................................................................................. S1
uoal S: Encouiage Collaboiations between the Natuial uas anu Renewable Eneigy Inuustiies
................................................................................................................................................................ ............................. S2
uoal 6: Impiove uoveinment Netiics on Naiket, }ob anu Economic Impacts ................................... SS
uoal 7: Encouiage Renewable Eneigy 0se in the Commeicial anu Institutional Sectois .............. SS
uoal 8: Euucate the Public anu Financial Naikets ......................................................................................... S6
uoal 9: Stimulate the Bevelopment of 0ffshoie Winu .................................................................................. S7
F%1%8"$ -2%*.B -.+:'*, 44444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 6L
Executive 0ffice of the Piesiuent0ffice of the ueneial Counsel ............................................................. 6u
Bepaitment of Agiicultuie ....................................................................................................................................... 6u
Bepaitment of Eneigy ................................................................................................................................................ 61
Bepaitment of Befense (BoB) ................................................................................................................................ 66
Enviionmental Piotection Agency ........................................................................................................................ 66
Feueial Emeigency Nanagement Auministiation ......................................................................................... 67
Bepaitment of Tianspoitation ............................................................................................................................... 67
Bepaitment of Bomelanu Secuiity ....................................................................................................................... 67
Small Business Auministiation .............................................................................................................................. 68
Poweiing Foiwaiu
14
Bepaitment of InteiioiBuieau of Lanu Nanagement ................................................................................ 68
7*1%=%*1%*+ -2%*.:%, 4444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 6K
Inteinal Revenue Seivice (IRS) .............................................................................................................................. 69
Secuiities anu Exchange Commission (SEC) .................................................................................................... 69
)<"=+%8 G> F:*"*.:*2 H%*%0"#$% A*%82B 444444444444444444444444444444444444444444444444444444444444444444444444444444444444 ;L
H%.'33%*1"+:'*, ('8 C8%,:1%*+:"$ -.+:'* 4444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 ;;
uoal 1. 0iganize foi Implementation ................................................................................................................... 77
uoal 2. 0pen New Investment 0ppoitunities with the Clean Aii Act ..................................................... 78
uoal S. Encouiage RE Investments Thiough Noitgage Lenuing .............................................................. 78
uoal 4. Remove Auministiative Roaublocks to Financing foi Feueial Renewable Eneigy
Piojects................................................................................................................................................................ ............. 79
uoal S. Nake Bettei 0se of Feueial Financial Incentives While Encouiaging Less Reliance on
Them ................................................................................................................................................................................. 82
uoal 6. Re-allocate Remaining Qualifieu Eneigy Conseivation Bonus .................................................. 84
)<"=+%8 M> H'#9,+ "*1 H%,='*,:#$% N"+98"$ O", C8'19.+:'* 4444444444444444444444444444444444444444444444 J;
!<% P%*%(:+, '( N"+98"$ O", 444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 JK
Q<B 7*19,+8B R"$9%, H%",'*"#$% H%29$"+:'* 44444444444444444444444444444444444444444444444444444444444444444444444444444444444444 KL
Q<' S<'9$1 H%29$"+%T 4444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 KL
7*.8%",:*2 )'*(:1%*.% !<8'92< )'339*:."+:'* 4444444444444444444444444444444444444444444444444444444444444444444444444444444 K5
!<% H'$% '( N"+:'*"$ A*%82B C'$:.B 4444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 KU
H%.'33%*1"+:'*, ('8 C8%,:1%*+:"$ -.+:'* 4444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 KU
uoal 1: Impiove the Conveisation ....................................................................................................................... 9S
uoal 2: Enhance Feueial-State-Stakeholuei Collaboiation ........................................................................ 96
uoal S: Auvance Science, Technology, anu Recommenueu Piactices to Enhance Natuial uas
Piouuction in Ways that Ninimize Enviionmental anu Social Risks ..................................................... 98
uoal 4: Builu the Infoimation anu Knowleuge Base ...................................................................................... 99
uoal S: Stiengthen the Inuustiy's Social License to 0peiate .................................................................. 1uu
uoal 6: Ninimize Enviionmental Impacts in the value Chain ............................................................... 1u1
uoal 7: Bemonstiate Best Available Cost-Effective anu Site-Appiopiiate Piouuction Piactices
on Feueial Lanus ....................................................................................................................................................... 1u2
uoal 8: Natuial uas Pipeline Issues ................................................................................................................... 1uS
)<"=+%8 U> V+:$:+B P9,:*%,, I'1%$, ('8 +<% E5
,+
)%*+98B 44444444444444444444444444444444444444444444444444444 5LU
)"9+:'*, -#'9+ F%1%8"$ W%"1%8,<:= 444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 5LJ
H%.'33%*1"+:'*, ('8 C8%,:1%*+:"$ -.+:'* 44444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 5LK
uoal 1: Leaueiship by Powei Naiketing Auministiations (PNAs) ...................................................... 1u9
uoal 2: Leaueiship by the Feueial Eneigy Regulatoiy Commission (FERC) .................................... 11u
uoal S: Leaueiship by the Tennessee valley Authoiity (TvA) ............................................................... 11S
uoal 4: Feueial, State anu Local Collaboiation ............................................................................................. 114
uoal S: Electiic System Resilience, Secuiity anu Flexibility .................................................................... 116
uoal 6: Auuiess the eneigy-watei nexus in eneigy seivices .................................................................. 118
-2%*.B -.+:'*, 4444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 5EL
Powei Naiketing Auministiations .................................................................................................................... 12u
Feueial Eneigy Regulatoiy Commission ......................................................................................................... 121
Bepaitment of Eneigy ............................................................................................................................................. 122
0ffice of Peisonnel Nanagement ........................................................................................................................ 12S
Bepaitment of Euucation ...................................................................................................................................... 12S
Bepaitment of Befense ........................................................................................................................................... 12S
Bepaitment of Bomelanu Secuiity .................................................................................................................... 126
)<"=+%8 6> -$+%8*"+:D% F9%$, "*1 R%<:.$%, 444444444444444444444444444444444444444444444444444444444444444444444444444444 5E;
Poweiing Foiwaiu
1S
Why enuing oil auuiction iemains ciitical ...................................................................................................... 128
Petioleum's Role in Climate Change ................................................................................................................. 129
Automobiles aie heie to stay ............................................................................................................................... 1Su
The Piesiuent's Impiint ......................................................................................................................................... 1S1
0thei Issues on the Rauai ..................................................................................................................................... 1SS
H%.'33%*1"+:'*, ('8 C8%,:1%*+:"$ -.+:'* 44444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 5GM
Ciosscutting Recommenuations ......................................................................................................................... 1S4
F9%$XS=%.:(:. H%.'33%*1"+:'*,4444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 5ML
Natuial uas: ................................................................................................................................................................ . 14u
Alteinative Fuels fiom Renewable Resouices: ............................................................................................. 141
Electiic vehicles: ....................................................................................................................................................... 142
Byuiogen Fuels: ......................................................................................................................................................... 14S
-2%*.B -.+:'*, 4444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 5MM
White Bouse Council on Enviionmental Quality ......................................................................................... 144
Bepaitment of Eneigy ............................................................................................................................................. 144
Bepaitment of Tianspoitation ............................................................................................................................ 147
Bepaitment of State ................................................................................................................................................. 147
Enviionmental Piotection Agency ..................................................................................................................... 147
Bepaitment of Befense ........................................................................................................................................... 147
ueneial Seivices Auministiation ........................................................................................................................ 148
Bepaitment of Agiicultuie .................................................................................................................................... 149
73=$%3%*+"+:'* S%Y9%*.% 444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 5MK
Neai Teim (2u1S) ..................................................................................................................................................... 1Su
Niu Teim (Eaily 2u14) ........................................................................................................................................... 1Su
Longei Teim (Late 2u14) ...................................................................................................................................... 1S1
P"./28'9*1 7*('83"+:'* '* -$+%8*"+:D% F9%$, Z R%<:.$%,444444444444444444444444444444444444444444444444444444444444 5U5
What aie alteinative fuels. ................................................................................................................................... 1S1
What aie alteinative fuel vehicles. ................................................................................................................... 1S2
What's on the ioau touay. ..................................................................................................................................... 1S2
What aie the most piominent alteinative fuels anu vehicles. .............................................................. 1SS
Natuial uas vehicles (Nuvs) ................................................................................................................................ 1SS
ueneial Biofuels......................................................................................................................................................... 1SS
Biouiesel ................................................................................................................................................................ ....... 1S9
Renewable Natuial uas (RNu) ............................................................................................................................ 1S9
Nethanol ................................................................................................................................................................ ....... 161
Electiic vehicles ........................................................................................................................................................ 161
Byuiogen ................................................................................................................................................................ ...... 16S
0thei vehicle anu Infiastiuctuie Issues ......................................................................................................... 164
A*1 N'+%,444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 566

Poweiing Foiwaiu
16
-./*'0$%12%3%*+,

The eneigy uialogues anu this iepoit woulu not have been possible without the geneious
suppoit of the Rockefellei Biotheis Funu, the Eneigy Founuation, the Bewlett Founuation,
Sempia Eneigy anu FeuEx Coipoiation.

The pioject also woulu not have been possible without the able assistance of stuuent
inteins pioviueu by Coloiauo State 0niveisity anu Natuial Capitalism Solutions. They
incluueu }ane Culkin, }eff Cook, Natthew Flynn, Katheiine Boffei, Annabelle Beiklunu, }osh
uaicia, Amy Russell, Kiisten Fiysingei, Ayman Afifi, Wenuy Kellei, Leigha Silbeiman, anu
Nateo Schimpf.

Thanks also to the team that pioviueu auministiative suppoit to the pioject, incluuing
Nauiy uoluei-Bobbie anu Linua Waiulow of Coloiauo State 0niveisity.

Bill Beckei, }eff Lyng anu Tom Plant of the Centei foi the New Eneigy Economy oiganizeu,
oveisaw ieseaich anu wiote the papeis piesenteu heie, unuei the uiiection of foimei
Coloiauo uoveinoi Bill Rittei, the founuei anu uiiectoi of the CNEE.

Finally, we thank the moie than 1uu inuiviuuals who took pait in the CNEE uialogue
incluuing its iounutables, peei ieviews, anu ieseaich assistance. 0nuei the iules of the
uialogue, we cannot mention theii names, but theii assistance anu cieativity was vital to
the pioject.

Poweiing Foiwaiu
17
7*+8'19.+:'*

lf Conqress won't oct soon to protect future qenerotions, l will. l will Jirect my cobinet to come
up witb executive octions we con tokenow onJ in tbe futureto reJuce pollution, prepore
our communities for tbe consequences of climote cbonqe onJ speeJ tbe tronsition to more
sustoinoble sources of enerqy. ~ Piesiuent Baiack 0bama, 2u1S State of the 0nion Auuiess

Keeping that piomise, Piesiuent 0bama issueu a compiehensive climate action plan in }une
2u1S, builuing upon a wiue vaiiety of executive actions he anu his Auministiation have
implementeu ovei the last five yeais. Nany of the Auministiation's pievious actions
involveu the business piactices of the Feueial uoveinment. 0theis such as the new fuel
economy stanuaius foi vehicles weie histoiic, with society-wiue impacts.

Bowevei, as the CNEE confiimeu uuiing its uialogue with eneigy anu climate leaueis
uuiing 2u1S, theie aie many moie things the Executive Bianch can uo to help the nation
tiansition to clean eneigy anu to ieuuce gieenhouse gas emissions. A piesiuent's poweis
aie limiteu by uesign in the Ameiican system of goveinment, but they shoulu not be
unueiestimateu. The piesiuent is CE0 of Ameiica's biggest eneigy customei anu
Commanuei in Chief of the woilu's most poweiful militaiy. Each piesiuent's toolbox
incluues both soft poweis such as the bully pulpit anu haiu poweis such as the veto.

A piesiuent's most impoitant powei, howevei, comes fiom his oi hei special ielationship
with the Ameiican people. No othei public official is electeu by all of Ameiica's voteis.
Recognizing that theii fiist iesponsibility was to piotect the iights anu inteiests of the
public, incluuing the iesouices the Ameiican people holu in common, seveial past
piesiuents ueciueu that when Congiess faileu to act, the Chief Executive hau an obligation
to uo so. When they believeu a national situation waiianteu action, some past piesiuents
inteipieteu theii authoiity bioauly anu exeiciseu it aggiessively. That is the piactice of
piesiuential authoiity Ameiica anu the woilu neeu touay.

In iesponse to the incieasing thieat of climate change, many of the countiy's thought
leaueis have sought a "silvei bullet" in iecent yeaisa single act of Congiess they hopeu
woulu change eveiything in iegaiu to the nation's gieenhouse gas emissions. Legislation to
put a piice on caibon iemains essential, but much moie can be uone with a "silvei
buckshot" appioach to ietool the economy anu the goveinment that has been shapeu to
seive a caibon economy ovei the past 2Su yeais.

In auuition to iuentifying a gieat ueal of silvei buckshot, the CNEE initiative uevelopeu
seveial high-level themes that shoulu unueipin Piesiuent 0bama's eneigy agenua as well
as the piioiities of his successois anu of othei electeu officials.

Fiist, the Feueial uoveinment shoulu fully use its consiueiable potential to help builu
maikets foi clean eneigy technologies anu seivices. As the managei of a $S.S tiillion annual
buuget, the stewaiu of national assets incluuing a thiiu of Ameiica's lanu mass, anu the
ownei oi lessoi of neaily 1u,uuu builuings anu moie than 2uu,uuu vehicles, the Executive
Poweiing Foiwaiu
18
Bianch has piocuiement powei to help builu the laige anu sustaineu maikets that will
attiact piivate capital to clean eneigy. The Auministiation also has oppoitunities to open
new uoois foi piivate investment in clean eneigy at eveiy level of society, fiom
homeowneis to community banks to the investment houses on Wall Stieet.

Seconu, the Feueial uoveinment shoulu use eveiy oppoitunity - incluuing its management
of builuings, fleets, public lanus anu the agencies that piouuce anu uistiibute electiicity - to
uemonstiate the business piactices necessaiy in a clean eneigy economy.

Thiiu, Piesiuent 0bama shoulu iequiie that empiiical analyses ieplace political calculus in
setting Ameiica's eneigy piioiities. 0bjective analysis shoulu quantify the full
enviionmental, economic anu social impacts of each iesouice incluuing its uiiect anu
inuiiect impacts ovei its lifecycle. Costs that have tiauitionally been exteinalizeu shoulu be
inteinalizeu to piouuce moie accuiate maiket signals so the piice of a iesouice ieflects its
tiue costs. Piesiuent 0bama's "all of the above" eneigy policy is the line of least political
iesistance, but it is not compatible with his stateu objectives iegaiuing global waiming.
The tiansition to clean eneigy involves uifficult anu politically challenging choices, but with
an empiiical basis foi eneigy uecisions, a piesiuent cannot be accuseu of waging a "wai on
coal", oi "picking winneis". The facts will speak foi themselves.

Fouith, eneigy policy shoulu be uesigneu foi pioblem solving iathei than pioblem
switching. Without full cost lifecycle accounting, public policies may piomote iesouices
that solve one pioblem but cieate many otheis. Foi example, liquiu fuels fiom coal anu
petioleum fiom tai sanus have been piomoteu to impiove the nation's eneigy secuiity by
ieuucing oui ieliance on impoiteu oil. But they aie among the most caibon, eneigy anu
watei intensive eneigy options. They tiaue gieatei eneigy secuiity foi gieatei global
waiming - a veiy bau baigain. Full cost lifecycle accounting will iuentify futuie tiaueoffs
like these so that public policy suppoits the eneigy options that pioviue gieatest benefits
with least costs anu fewei unintenueu consequences.

Fifth, Piesiuent 0bama shoulu use his bully pulpit to leau a national conveisation about the
new eneigy economy. Buiing CNEE's uialogues, some of the nation's top executives fiom
the utility, natuial gas anu ienewable eneigy inuustiies askeu that Piesiuent 0bama help
change the national conveisation about theii sectois. Foi example, leaueis in the utility
sectoi want the public to unueistanu theii essential iole in pioviuing the eneigy that
sustains oui high quality of life in Ameiica. As we point out elsewheie in this papei, utilities
face foimiuable challenges as solai, winu anu othei ienewable technologies aie auueu to
the nation's eneigy mix anu as iooftops become powei plants. 0tility customeis will not be
exempt fiom the changes aheau. The inuustiy's leaueis feel the Piesiuent can help establish
a level of public tiust anu goouwill that will make those changes go moie smoothly.

Sixth, Piesiuent 0bama, along with othei thought leaueis, shoulu tuin public suppoit foi
clean eneigy into conciete action. Backing ienewable eneigy in opinion polls is one thing;
employing them in oui lives is anothei; anu so is suppoiting clean eneigy policies anu
electing leaueis who aie committeu to the tiansition. With an infoimeu, committeu anu
active voting public, fewei electeu officials woulu be comfoitable sitting on the siuelines
Poweiing Foiwaiu
19
while climate change piogiesses.

A committeu public also is impoitant to a piesiuent's legacy. Neaily all of the executive
actions a piesiuent can take can be easily unuone by his oi hei successois. The active anu
sustaineu suppoit of the Ameiican people is the only way a piesiuent can ensuie that the
nation stays on couise aftei he oi she leaves office.

Seventh, a top Auministiation objective shoulu be to pioviue states anu communities with
the infoimation, tools, technical suppoit anu financial iesouices to iemain on the cutting
euge of the clean eneigy tiansition. States aie the laboiatoiies of change in the 0niteu
States. They aie in closei uay-to-uay touch with the Ameiican people. They have many of
the key authoiities to ieuuce the nation's gieenhouse gas emissions, fiom cieating anu
enfoicing builuing coues, to guiuing uiban uesign anu lanu use piactices, to tianspoitation
system planning anu utility iegulation. Nuch of the piogiess the 0niteu States has maue so
fai to ieuuce caibon emissions can be cieuiteu to states that have cieateu ienewable
eneigy poitfolio stanuaius, eneigy efficiency stanuaius anu othei enlighteneu policies. Foi
example, S2 states now have manuatoiy oi voluntaiy ienewable eneigy stanuaius. Bespite
26 legislative attempts to ioll back these stanuaius uuiing the 2u1S legislative season,
none weie iepealeu oi iolleu back. With focuseu financial anu technical assistance, the
Auministiation can help state anu local leaueis continue to champion anu implement clean
eneigy policies.

Eighth, the Piesiuent shoulu communicate to the Ameiican people that the clean eneigy
tiansition is not a uistant goal. It alieauy is unueiway, in pait because of actions by
homeowneis, businesses, fleets anu inuustiy. Solai electiic geneiation has uoubleu ovei
the past foui yeais; winu eneigy touay geneiates enough electiicity in the 0niteu States to
powei 1S million homes. Some technologies such as passive solai heating anu solai
theimal watei heating have been cost-competitive foi yeais.

Bowevei, the tiansition is not occuiiing ueep enough oi fast enough. Renewable eneigy
technologies, incluuing hyuioelectiic geneiation, pioviue only 12% of Ameiica's electiicity
touay. With taigeteu policies anu investments, 8u% of Ameiica's electiicity coulu come
fiom winu powei alone in less than foui uecaues, accoiuing to the National Renewable
Eneigy Laboiatoiy (NREL).

In its eaily ielease of the Annual Eneigy 0utlook foi 2u14, the Eneigy Infoimation
Auministiation (EIA) piojects that if we continue business as usual anu peimit feueial
subsiuies to expiie as cuiiently scheuuleu, ienewables will supply only 16% of the nation's
powei by 2u4u. "Extensions of such subsiuies coulu have a laige impact on ienewable
geneiation," the EIA concluues. An analysis by the 0nion of Conceineu Scientists shows
that with a ieliable piouuction tax cieuit in place, it will be less expensive to ieplace
existing coal-fiieu powei plants with winu powei than to equip the plants with mouein
pollution contiols. Anu in a statement that coulu apply to ienewable eneigy technologies in
geneial, NREL has obseiveu "it is uisingenuous to expect winu eneigy to compete in the
maiketplace without the incentives enjoyeu by establisheu technologies."

Poweiing Foiwaiu
2u
This leaus to the ninth anu final thematic conclusion fiom the CNEE uialogue: A new eneigy
economy will iequiie new fiscal policies. To put it simply, the tax coue anu othei fiscal
instiuments shoulu not encouiage things that huit us, oi stanu in the way of things that
make oui nation healthiei. Sustainable eneigy technologies must be given tax paiity if not
tax piefeience ovei fossil eneigy if we want them to become a substantial pait of the
nation's eneigy mix. Paiity means not only the amount of taxpayei investment, but also the
ieliability of that investment. The on-again off-again tax incentives foi ienewable eneigy
technologies in iecent yeais have not only inhibiteu piivate investment, they've maue some
ienewable technologies moie expensive.
1
If Congiess begins woiking on tax iefoim, the
Piesiuent shoulu be a steaufast champion of eliminating tax suppoit foi caibon-iich eneigy
iesouices - subsiuies that aie peiveise in a low-caibon economy - anu shifting them to
sustainable eneigy. In the meantime, the Auministiation shoulu make those fiscal policy
changes that aie within its uiscietion, not to make the tax coue moie complex but to make
it faiiei.

The question touay is not whethei the 0niteu States shoulu make an expeuitious tiansition
to clean eneigy. The question is when it will uo so anu how much uamage we will foice
ouiselves anu futuie geneiations to sustain foi the sake of the status quo. The fact that
human enueavois aie now pushing up against planetaiy bounuaiies such as atmospheiic
waiming shoulu tell us the tiansition must be now.
Poweiing Foiwaiu
21
)<"=+%8 5> ?'9#$:*2 -3%8:."@, A*%82B
C8'19.+:D:+B

Buiing his 2u1S State of the 0nion auuiess, Piesiuent 0bama announceu a new goal:
uoubling the nation's eneigy piouuctivity by 2uSu. The benefits woulu be enoimous.
Accoiuing to the Ameiican Council foi an Eneigy Efficiency Economy (ACEEE), the 0niteu
States economy wastes 87% of the eneigy it consumes - an unacceptable level of iesouice
mismanagement if the nation wants to iemain competitive in the global economy. Because
eneigy efficiency is the quickest, cheapest anu among the most effective ways to achieve a
clean eneigy economy, it is }ob No 1 anu the topic of the fiist chaptei of this iepoit.
Key Themes anu Recommenuations
Cieate laigei anu moie stable maikets foi piouuctivity investments by
incieasing goals anu iemoving baiiieis to feueial piocuiement of eneigy
efficiency goous anu seivices.

Analyze the goveinment's extensive moitgage uata to ueteimine whethei
iesiuential eneigy efficiency impiovements ieuuce the iisk of uefaults. If so,
uiiect feueial moitgage agencies to ieflect that benefit in appiaisal
pioceuuies anu loan teims.

Allow states anu utilities the flexibility to use eneigy efficiency investments
outsiue the powei plant as cieuitable compliance measuies unuei EPA's
upcoming iegulation of gieenhouse gas emissions fiom existing powei
plants.

Tiiple feueial technical assistance on eneigy piouuctivity to states, localities
anu utilities.

Quantify anu piomote the value of eneigy efficiency measuies to inciease
community iesilience, to pievent business losses uue to powei outages anu
to ieuuce hazaiuous iisks.

Encouiage the IRS to issue a ievenue iuling on when anu how publicly
tiaueu Real Estate Investment Tiusts can invest in eneigy efficiency
piojects.

Poweiing Foiwaiu
22
!<% C'+%*+:"$ '( C8'19.+:D:+B> The Piesiuent's challenge to the countiy is miiioieu in a
iepoit issueu a week befoie his 2u1S State of the 0nion auuiess by the Alliance
Commission on National Eneigy Efficiency Policy . Conveneu by the Alliance to Save
Eneigy (ASE) in 2u12, the commission founu that:

0ver tbe post S0 yeors, tbe 0.S. bos moJe lorqe qoins in enerqy proJuctivity. Hore
specificolly, tbe 0.S. bos exponJeJ its economic output by more tbon tbree times tbe 1970
level, wbile tbe JemonJ for enerqy onJ power resources qrew by only S0% Jurinq tbe
some time perioJ. AccorJinq to tbe Americon Council for on Fnerqy-Ffficient Fconomy
{ACFFF), tbree quorters of tbe enerqy requireJ to fuel tbis economic qrowtb JiJ not stem
from new enerqy supplies, but rotber on ossortment of efficiency meosures.

Bespite these gains, the oppoitunities foi gieatei eneigy piouuctivity iemain
ubiquitous. They iange fiom how we builu oui cities to how we get fiom place to
place anu how we uesign oui vehicles, appliances anu homes. The Alliance
Commission iepoiteu that the builuing sectoi alone offeis an investment oppoitunity
in the hunuieus of billions of uollais anu savings as high as $1 tiillion ovei the next 1u
yeais - Su% of what we now spenu annually on electiicity. The 0.S. Bepaitment of
Eneigy (B0E) estimates that oui manufactuiing sectoi, which accounts foi 11% of oui
uBP anu 27% of oui eneigy consumption, can impiove its eneigy piouuctivity by a
thiiu between now anu 2uSS.

C8%,:1%*+:"$ 7*:+:"+:D%,

Thioughout this iepoit, CNEE has uiviueu its iecommenuations into two bioau
categoiies: piesiuential actions anu agency actions. Piesiuential action items foi eneigy
piouuctivity aie oiganizeu unuei thiee goals: 1) tiiggeiing moie economy-wiue
investments in eneigy efficiency; 2) iemoving buieauciatic ioaublocks; anu S) incieasing
collaboiation between feueial, state anu local goveinments.

O'"$ 5> !8:22%8 A.'*'3BXQ:1% 7*D%,+3%*+, :* A*%82B C8'19.+:D:+B

Piesiuent 0bama can use his existing authoiities to tiiggei new anu sustaineu capital
investments in eneigy piouuctivity. Bis Auministiation can influence the allocation of
capital to eneigy piouuctivity in the iesiuential moitgage maiket, in the commeicial sectoi,
in compliance with enviionmental iegulations, anu in the facilities anu opeiations of the
Feueial uoveinment.

W%D%8"2:*2 A*%82B C8'19.+:D:+B 7*D%,+3%*+, :* +<% I'8+2"2% I"8/%+> Eneigy anu
location efficiency
2
shoulu become significant factois in moitgage unueiwiiting, in
ieal estate tiansactions, anu in setting moitgage teims. The key is to veiify that by
ieuucing the opeiating costs of iesiuential anu commeicial builuings, eneigy anu location
efficiency lowei the iisks of moitgage uefaults.

Recent ieseaich has founu that the iisk of loan uefault is one-thiiu lowei in Eneigy Stai-
Poweiing Foiwaiu
2S
iateu homes anu that eneigy efficiency impiovements iaise home values as much as 9%.
S

In auuition, positive iesults fiom the few iesiuential Piopeity Assesseu Clean Eneigy
(PACE) piogiams launcheu uuiing the Piesiuent's fiist teim aie an inuication of the
oppoitunities misseu in cities that halteu uevelopment of PACE piogiams because of
objections iaiseu by the Feueial Bousing Finance Authoiity (FBFA).

The eviuence suggests that lowei opeiating anu tianspoitation costs shoulu change the
vectoi of iisk foi moitgage lenueis. Yet feueial agencies that auministei moitgage
piogiams use unueiwiiting stanuaius that uon't take these factois into account when
setting teims foi homebuyeis.

As the managei of a multi-tiillion-uollai moitgage poitfolio, the Feueial uoveinment is
uniquely positioneu to access, analyze, anu publish uata on the ielationship between
eneigy efficiency anu moitgage iisk, valiuating what has been founu by the stuuies noteu
above.

A[%.9+:D% -.+:'*,>

1. ?%+%83:*% :( %*%82B %((:.:%*.B 1%.8%",%, 1%("9$+,4 Conuuct anu publish an
analysis that uocuments the ielationship between eneigy efficiency anu moitgage
peifoimance, uiawing on laige uata sets uniquely available to the Feueial
uoveinment. Stait by uiiecting feueial agencies that auministei moitgage piogiams
to immeuiately pioviue ielevant anonymous loan anu uefault uata to B0E anu the
Bepaitments of Tianspoitation (B0T) anu Bousing anu 0iban Bevelopment (B0B).
Biiect the thiee uepaitments anu the FBFA to use the uata to stuuy the ielationship
between moitgage peifoimance anu eneigylocation efficiency ovei as long a peiiou
as the uata peimit. The analysis shoulu a) test the valiuity of FBFA's concein that
senioi liens foi financing eneigy efficiency upgiaues put moitgage lenueis at gieatei
iisk, anu b) ueteimine whethei financing eneigy efficiency upgiaues with piopeity
assessments woulu inciease oi ieuuce iisk foi moitgage lenueis.

24 I'1:(B 3'8+2"2% +%83, +' .8%1:+ %((:.:%*.B4 If the analysis confiims that eneigy
anu location efficiency aie associateu with lowei moitgage uefault iates, implement
policies that scale up financing foi builuing efficiency impiovements. Foi example,
uiiect B0B to upuate its unueiwiiting anu appiaisal guiuelines to ensuie that any
home loan backeu by a feueial moitgage piogiam ieflects the home's eneigy anu
location efficiency.
4
Biiect B0B anu FBFA to assess the potential impact of making
the attainment of eneigy efficiency stanuaiusfoi example those containeu in the
most cuiient Inteinational Eneigy Conseivation Coue (IECC)a conuition foi new
feueially backeu home moitgage loans.

S. S'$D% +<% C-)A =8'#$%34 Encouiage FBFA to woik with B0E to finu auministiative
solutions to FBFA's conceins about PACE financing foi iesiuential eneigy peifoimance
upgiaues authoiizeu by state anu local goveinments.
S
Foi example, oiuei a ieview of
all loan guaiantee authoiities within the Auministiation to ueteimine the amount of
funuing available to cieate, within existing authoiities thiough iulemaking, a piivate
Poweiing Foiwaiu
24
iesiuential builuing ietiofit loan guaiantee piogiam with a loan loss ieseive that
backs up uefault iisk. In auuition, exploie othei mechanisms besiues PACE that woulu
be moie acceptable to the moitgage inuustiy.

4. -$$'0 HA7!S ('8 .$%"* %*%82B4 Encouiage the Inteinal Revenue Seivice (IRS) to
issue a ievenue iuling on when anu how publicly tiaueu Real Estate Investment
Tiusts (REITs) can invest in eneigy efficiency anu ienewable eneigy piojects.
6

S. A*.'98"2% A*%82B C8'19.+:D:+B :* +<% )'33%8.:"$ S%.+'8> Piivate builuings such as
office spaces anu malls have huge potential foi eneigy efficiency upgiaues. Bowevei,
commeicial builuings have unique maiket baiiieis that complicate otheiwise effective
financing tools such as eneigy-saving peifoimance contiacts (ESPCs0ESCs)
7
anu othei
financing mechanisms. Foi example, commeicial lenueis aie conceineu with who will
take on iepayment of uebt if a builuing is solu in the miuule of an efficiency upgiaue.
Theie is no stanuaiuization of builuing benchmaiking foi eneigy peifoimance oi
contiact uocuments foi engineeiing, financing, measuiement anu veiification. Lenueis
aie also conceineu about uefault on efficiency loans, even though uefault iates aie veiy
low.

A[%.9+:D% -.+:'*,>

1. )8%"+% " $'"* $',, 8%,%8D% ('8 .'33%8.:"$ 8%+8'(:+,. 0iuei a ieview of all loan
guaiantee authoiities within Tieasuiy, B0E, 0SBA, anu othei agencies to ueteimine the
amount of funuing available to cieate, within existing authoiities thiough iule making, a
piivate commeicial builuing ietiofit loan guaiantee piogiam with a loan loss ieseive
that will back up uefault iisk but not technology iisk.

2. S+8%"3$:*% ="=%80'8/ ('8 .'33%8.:"$ 9=28"1%,. Biiect B0E anu othei ielevant
agencies to cieate stanuaiu stieamlineu uocumentation foi appiaiseis, engineeiing
fiims, anu financieis to use foi eneigy upgiaue piojects foi commeicial spaces.

S. V,% ASC), :* IVS\ 3"8/%+,. Biiect B0E to woik with states to launch ESPC
piogiams foi Nunicipal, 0niveisity, State anu Bospital maikets (known as N0SB in the
ESC0 inuustiy).
8

4. )<"3=:'* :*+%8*"+:'*"$ "==$:"*.% %((:.:%*.B 3%",98%,. To inciease maiket
oppoitunities foi 0.S. appliance manufactuieis anu to lowei costs foi 0.S. consumeis
thiough economies of scale, pioviue global leaueiship by championing cost-effective
anu up-to-uate appliance stanuaius in othei countiies anu piomote the haimonization
of stanuaius acioss inteinational maikets.

I'#:$:]:*2 A*%82B C8'19.+:D:+B 0:+< +<% )$%"* -:8 -.+4 The Enviionmental Piotection
Agency's (EPA) iegulation of gieenhouse gas emissions fiom existing powei plants can
become a poweiful uiivei in the eneigy piouuctivity maiket. The key is to give states the
flexibility to use a wiue iange of "outsiue the fence line" efficiency measuies - i.e., efficiency
Poweiing Foiwaiu
2S
measuies in uiffeient locations anu sectois than the powei plant - to comply with the
iegulations.

EPA alieauy has issueu a ioau map to states on how to incluue eneigy efficiency anu
ienewable eneigy piogiams in State Implementation Plans (SIPs) unuei cuiient
applications of the Clean Aii Act. The uocument lists a vaiiety of state piogiams anu
policies that can be cieuiteu as compliance measuies incluuing eneigy efficiency iesouice
stanuaius, ienewable eneigy poitfolio stanuaius, public benefits funus, anu on-bill
financing of eneigy efficiency impiovements in new anu existing homes.
9

A[%.9+:D% -.+:'*,>

1. I"/% ='0%8 =$"*+ 8%29$"+:'* " ,=8:*2#'"81 ('8 :*.8%",:*2 +<% ,:]% '( .$%"*
%*%82B 3"8/%+,. Biiect EPA to uo the following in ueveloping gieenhouse gas
emission stanuaius foi existing powei plants:

a) Woik with B0E to assess the potential foi cost-effective eneigy efficiency
piogiams anu measuies that ieuuce gieenhouse gas emissions fiom souices othei
than the powei plant. Cite B0E's finuings in a Notice of Bata Availability anu use
them in EPA's moueling.

b) Allow states to get emission ieuuctions by using less electiicity anuoi moie clean
eneigy acioss the system, iathei than only by cleaning up inuiviuual powei plants
at the stack. Foi example, allow states to incluue tianspoitation fuel efficiency
impiovements in theii SIPs. Pioviue cleai guiuance in the iegulatoiy uockets about
the kinus of flexible, state-initiateu appioaches EPA is piepaieu to appiove as
equivalent to whatevei uefault feueial peifoimance stanuaiu it establishes as a
guiueline. Be explicit about how it will quantify ieuuctions fiom eneigy efficiency
anu ienewable eneigy. Establish national guiuelines (iathei than guiuelines at the
iegional level wheie state SIPs aie appioveu) on the emission ieuuction appioaches
EPA will consiuei acceptable anu give all stakeholueis the oppoitunity to comment
on those alteinatives befoie the feueial iegulations aie finalizeu.

2. Issue cleai pieliminaiy guiuance to states as eaily as possible in the iegulatoiy piocess
to encouiage eaily auoption of new eneigy efficiency anu ienewable eneigy measuies
with assuiance that measuies consistent with the guiuance will be cieuiteu in SIPs.
Encouiage state Public 0tility Commissions (P0Cs) to open ielevant state uockets aheau
of EPA's guiuance.
1u

a) Instiuct EPA Regional 0ffices to actively piomote the use of eneigy efficiency anu
ienewable eneigy in SIPs anu to stieamline the appioval piocess foi those measuies.

b) Bevelop infoimation foi states anu P0Cs on how eneigy efficiency measuies can
ieuuce the cost of compliance with Clean Aii Act iequiiements anu how states
might count eneigy efficiency measuies as avoiueu costs in utility iegulation.

Poweiing Foiwaiu
26
c) Collaboiate with B0E to pioviue states with technical assistance anu infoimation
to help them incoipoiate eneigy efficiency measuies into theii SIPs.

S. -$$'0 3"*9(".+98%8, +' ,"D% ^'#, #B 9,:*2 %*%82B %((:.:%*.B 3%",98%, #%B'*1 +<%
=$"*+. Pievent losses of manufactuiing jobs anu encouiage eneigy piouuctivity
investments in heavy manufactuiing facilities by uiiecting EPA to consiuei eneigy
efficiency impiovements beyonu new souices subject to the New Souice Review
11
anu
Pievention of Significant Beteiioiation (PSB) peimitting piocesses.
12

7*.8%",:*2 +<% A*%82B C8'19.+:D:+B '( +<% F%1%8"$ O'D%8*3%*+> As Ameiica's laigest
single eneigy consumei
1S
, the Feueial uoveinment, incluuing the 0.S. Bepaitment of
Befense (BoB), has the potential to shape the maiket foi uesigns, piouucts anu piactices
that significantly impiove the nation's eneigy piouuctivity.

The scale of feueial eneigy piouuctivity investments coulu be an impoitant factoi in
maiket tiansfoimation to clean eneigy, leauing to stanuaiuizeu contiacts anu useful uata
on pioject peifoimance. In auuition, by incieasing the tianspaiency anu piomotion of
what the Auministiation is accomplishing, the Piesiuent can position the Feueial
uoveinment as leauing iathei than manuating the 0niteu States to a clean eneigy
economy.

The Piesiuent has alieauy taken a numbei of steps to move his Auministiation into this
leaueiship position, foi example with the goals establisheu by Executive 0iuei 1SS14 anu
in his Climate Action Plan. Be has uiiecteu agencies to ieuuce theii eneigy intensity Su%
by 2u1S compaieu to 2uuS; to obtain 2u% of theii electiicity fiom ienewable iesouices by
2u2u; to ieuuce potable watei use intensity 26% by 2u2u compaieu to 2uu7; anu to cut
electiicity-ielateu gieenhouse gas emissions 28% by 2u2u compaieu to 2uu8. Piesiuent
0bama issueu a memoianuum in Becembei 2u11, uiiecting agencies to execute $2
billion in ESPCs ovei two yeais. The Piesiuent can builu on these initiatives by expanuing
this goal even fuithei.

A[%.9+:D% -.+:'*,>

1. P8'"1%* +<% ."+%2'8B '( %*%82B =8'19.+:D:+B 3%",98%,. Amenu E0 1SS14 to
encouiage agencies to go beyonu tiauitional eneigy piouuctivity measuies to incluue
uistiibuteu geneiation, combineu heat anu powei (CBP), the uevelopment of micio-
giius, caieful consiueiation of the ielationship between eneigy anu watei
consumption, low-caibon mobility anu cieative ways to unleash piivate capital
investments in clean eneigy.

2. 73=8'D% +<% .''81:*"+:'* '( 28"*+ "*1 (:*"*.% =8'28"3,. Biiect the 0ffice of
Nanagement anu Buuget (0NB) to assess anu iecommenu how to bettei cooiuinate
feueial giant anu finance piogiams. An inventoiy of goveinment loan anu loan
guaiantee piogiams that coulu suppoit clean eneigy piojects show that the capital in
these piogiams is 1uu times laigei than eneigy-ielateu giants, on the oiuei of $Su
billion each yeai.

At both the feueial anu state levels, these piogiams aie scatteieu
Poweiing Foiwaiu
27
acioss multiple agencies with no mechanism foi cooiuination that coulu save both
oppoitunity anu opeiating costs.

S. 7*.8%",% +<% 9,% '( ASC),. Amenu the Piesiuent's Becembei 2u11 memoianuum on
ESPCs to:

a) Set ESPC taigets that moie fully achieve the economic potential of goveinment
eneigy savings. At a minimum, auopt the iecommenuation that feueial ESPC taigets
be set at $1 billion annually foi S yeais.

b) Claiify that agencies shoulu use ESPCs to finance efficiency piojects in public
housing, uemanu iesponse piogiams, multi-builuing efficiency piojects beyonu
emeigency uemanu iesponse, uata centei consoliuation

anu uemanu management
in facilities. In auuition, uiiect B0E, BoB anu the ueneial Seivices Auministiation
(uSA) to expanu the use of ESPCs to finance unuei-utilizeu but pioven technologies
such as enhancements to goveinment eneigy secuiity; micio-giius; uistiibuteu
ienewable eneigy piojects that ieuuce line losses; CBP systems; waste-to-eneigy
piojects; watei anu wastewatei tieatment plants; eneigy fiom biomass; iecycling
centeis; high-efficiency BvAC; haiueneu inuustiial contiol systems that piotect
against cybei attacks; high-efficiency, ultia-low emission anu zeio-emission fleet
vehicles anu chaiging infiastiuctuie that leau to opeiational anu maintenance
savings; othei efficiency impiovements in the management of feueial fleets; anu
fastei piogiess on achieving net-zeio eneigy anu caibon builuings.

-11:+:'*"$ -.+:'*,>

1. H%0"81 8%19.+:'*, :* D%<:.$% 3:$%,. Biiect agencies to make the ieuuction of
vehicle Niles Tiaveleu (vNT) a key factoi in awaiuing applicable uiscietionaiy
feueial giants anu loans - foi example giant piogiams such as TIuER
(Tianspoitation Investment ueneiating Economic Recoveiy) anu loan awaius unuei
the Tianspoitation Innovation Financing Act (TIFA). Bioauen allowable uses of
foimula funus foi vNT ieuuction effoits.

2. !8"./ =8'28%,, '* +<% %*%82BX0"+%8 =8'28"3. Biiect B0E to iepoit its
piogiess on establishing a multi-agency piogiam to auuiess the eneigy-watei
nexus, as uesciibeu in the Eneigy Policy Act of 2uuS anu iecommenueu by the
uoveinment Accountability 0ffice (uA0) in Septembei 2u12. Chaige B0E with
cieating an inteiagency task foice on the eneigy-watei nexus that builus on
EPA's Eneigy-Watei Piinciples to piouuce a national action plan similai to the
one the Climate Auaptation Task Foice piouuceu. Chaige the task foice with
making iecommenuations in the following aieas:

a) Factoiing watei into eneigy policies anu investments: Stait with the piemise
that feueial agencies shoulu make watei conseivation anu quality a key factoi
in assessing the life-cycle costs anu benefits of eneigy supply anu uemanu
options.
Poweiing Foiwaiu
28
b) Assisting states anu localities: What type of infoimation uo states neeu to
incoipoiate watei factois into sub-national eneigy policies, paiticulaily in aieas
subject to giowing populations but ueclining oi stiesseu watei iesouices. 0i aie
states aheau of the Feueial uoveinment anu the Auministiation shoulu become the
"stuuent".

c) Conuucting R&B on low-anu zeio-eneigy wastewatei tieatment facilities> What
types of innovations aie neeueu, anu shoulu the Feueial uoveinment suppoit,
iegaiuing the ieuse of uegiaueu watei, integiateu watei management, on-site
tieatment of hyuiaulic fiactuiing fluius, anu the watei efficiency of powei plants.

u) Setting watei-efficiency stanuaius: Shoulu the Feueial uoveinment cieate anu
peiiouically upuate voluntaiy stanuaius foi watei fixtuies, as it uoes now with
eneigy efficiency stanuaius foi appliances. Is legislation necessaiy.

e) uetting tools anu iueas into the hanus of watei uecision-makeis nationwiue> The
goveinment suppoits the web poital www.wateitoolbox.us, a multi-agency site
that some people iegaiu as a national stiategic asset. Is the web poital
sufficiently utilizeu by uecision-makeis foi immeuiate opeiational uecisions anu
long-teim planning iegaiuing watei use.

f) uetting piices iight: Stiongly encouiage the Feueial Eneigy Regulatoiy
Commission (FERC) to incoipoiate watei intensity in wholesale avoiueu cost anu
othei uockets.

O'"$ E> H%3'D% -13:*:,+8"+:D% H'"1#$'./, +' A*%82B C8'19.+:D:+B
73=8'D%3%*+,

Seveial of the stakeholueis with whom CNEE has consulteu cite ioaublocks in the
auministiative piocesses foi appioving new appliance efficiency stanuaius anu executing
ESPCs. Some uelays have been excessive, iesulting in unnecessaiy eneigy waste anu
gieenhouse gas emissions.

While the use of ESPCs iepoiteuly is biisk in many feueial agencies, bottlenecks incluuing
shoitages of tiaineu staff aie slowing uown piocessing of the contiacts. In auuition, 0NB,
the Congiessional Buuget 0ffice (CB0) anu congiessional buuget committees "scoie" ESPCs
as a cost without iegaiu to savings.
14

A[%.9+:D% -.+:'*,>

1. S=%%1 9= ".+:'* '* .$%"* %*%82B 89$%3"/:*2. Biiect 0NB to:

a) Auheie to its own policy to complete its ieview of iules within 9u uays to ensuie that
the Auministiation complies with legal ueaulines foi finalizing appliance efficiency
stanuaius.
Poweiing Foiwaiu
29
b) Nove pioposeu iule makings on eneigy efficiency anu ienewable eneigy to the fiont
of the cleaiance queue to pievent lost oppoitunities foi eneigy savings anu
gieenhouse gas emission ieuuctions.
1S

c) Cleai up the uiffeiences between the appliance efficiency statute that uiiects B0E to
set stanuaius at the "highest level that is cost effective," anu the executive oiuei that
says iegulations shoulu be set at the "most cost effective" level.

u) Piopose anu woik with the CB0 anu congiessional buuget committees to change the
"scoiing" of ESPCs.
16

2. -,,:2* ASC) .'*+8".+:*2 +' %[=%8+ ,+"((. To auuiess the pioblem of insufficient
tiaineu staff to piocess ESPCs within agencies, uiiect the 0ffice of Peisonnel
Nanagement (0PN) to ieassign agency contiacting officeis to B0E's uoluen Fielu
0ffice in sufficient numbeis to cieate an efficient anu highly skilleu cential ESPC
piocessing centei foi the Feueial Eneigy Nanagement Piogiam (FENP).

S. -==':*+ "* %*%82B =8'19.+:D:+B .''81:*"+'8. Assign the 0ffice of the Feueial
Enviionmental Executive to seive as the Auministiation's eneigy piouuctivity
cooiuinatoi with secietaiiat suppoit fiom B0E. Pioviue him oi hei with sufficient
staff anu authoiity to uo the following:

a) Foi buugeting puiposes, estimate the staff capacity neeueu to aiiange ESPC
financing foi all cost-effective eneigy efficiency impiovements.

b) Cooiuinate the Feueial uoveinment's eneigy efficiency anu ienewable eneigy giant,
financing anu technical assistance piogiams.

c) Woik with the EIA to tiack anu publicly iepoit piogiess on the Piesiuent's eneigy
piouuctivity goal.

u) Inciease collaboiation between feueial agencies to maximize the effectiveness of
technical anu financial assistance piogiams ielateu to eneigy piouuctivity.

e) Woik with agencies to auu eneigy piouuctivity impiovements as a iating factoi in
all feueial giant piogiams wheie efficiency is ielevant to the objective of the giant.

f) Issue guiuance to all agencies on using B0E's Eneigy Efficiency Savings Piotocols to
calculate the eneigy efficiency benefits of specific measuies funueu thiough feueial
giant anu financial piogiams.

4. P8'"1%* +<% 9,% '( +8"*,='8+"+:'* (9*1,. Review auministiative uecisions that
have been maue to limit eligible expenuituies of Suiface Tianspoitation Funus anu
Congestion Nitigation anu Aii Quality Funus, anu mouify them to allow cost effective
appioaches to ieuucing uemanu, alteinative tianspoitation anu ieuuctions in vehicle
miles tiaveleu.
Poweiing Foiwaiu
Su
S. -*+:.:="+% +<% :3=".+, "*1 '=='8+9*:+:%, '( 8%19.%1 18:D:*24 Biiect B0T to analyze
the implications foi feueial tianspoitation investment of ieuuceu cai owneiship anu
uiiving among youngei age cohoits anu to iuentify oppoitunities foi alteinative anu
active tianspoitation investments to ieinfoice this tienu.

O'"$ G> 7*.8%",% )'$$"#'8"+:'* 0:+< S+"+%,_ W'."$:+:%, "*1 V+:$:+:%,

In Executive 0iuei 1SS14, among othei statements anu uiiectives, Piesiuent 0bama has
acknowleugeu the impoitance of collaboiation between feueial agencies, states, local
goveinments anu utilities. The oiuei, issueu in 2uu9, uiiects feueial agencies to help theii
host communities achieve sustainable uevelopment goals, incluuing clean eneigy. Analyses
by numeious piivate sectoi oiganizations also iecognize the impoitance of
inteigoveinmental woik. Both the Centei foi Climate Stiategies anu the Woilu Resouice
Institute
17
, among many othei examples, have shown that eneigy efficiency anu ienewable
eneigy policies at the state level aie making a majoi contiibution to piogiess on ieaching
the Piesiuent's goal foi a 17% ieuuction in gieenhouse gas emissions by 2u2u.

A[%.9+:D% -.+:'*,>

1. I"/% %*%82B =8'19.+:D:+B =8'28%,, D:,:#$%. Inciease the visibility of economy-wiue
piogiess on the Piesiuent's eneigy piouuctivity goal by assigning the Feueial
Enviionmental Executive to woik with B0E, the EIA, the National Association of State
Eneigy 0fficeis (NASE0) anu otheis to uo the following:

a) Iuentify the "touch points" in the economy foi significant eneigy piouuctivity gains.

b) Cieate a stiategic plan that engages appiopiiate feueial, state anu local
goveinment agencies anu oiganizations to piomote anu leveiage eneigy
piouuctivity gains.

c) Establish anu implement a methouology to tiack anu iepoit piogiess both at
the economy-wiue level anu by majoi eneigy-using sectois.

u) Biiect B0E, B0B, 0SBA, SBA, EPA anu B0T to woik with state anu local
authoiities, incluuing economic uevelopment officeis, to iuentify anu iemove
baiiieis to full utilization of feueial financing piogiams foi which clean eneigy
is eligible.

e) Biiect Cabinet membeis to continue shaping the public uialogue about gieenhouse
gas iegulations with eaily messaging about theii economic, public health, safety,
national secuiity anu othei benefits. Scheuule public events with Republican anu
Bemociatic goveinois to piomote the state-by-state benefits of using eneigy
efficiency to pievent pollution, paiticulaily in iegaiu to iequiiements unuei the
Clean Aii Act.

Poweiing Foiwaiu
S1
f) Establish cleai leaueiship iesponsibility in the Executive 0ffice of the Piesiuent
foi engaging states anu localities on policies anu piogiams that seive the
Piesiuent's objectives on eneigy piouuctivity anu climate change.

g) Reaffiim the iequiiement in Executive 0iuei 1SS14 that feueial agencies help
stiengthen the "vitality anu livability" of theii host communities. Nake cleai that
this iequiiement applies not only to line agencies, but also to militaiy
installations anu PNAs. Specify that these potential collaboiations can incluue
feueial-state-local powei puichasing agieements anu joint effoits between cities
anu militaiy installations to impiove local eneigy secuiity with uistiibuteu
geneiation, micio giius, anu ienewable eneigy technologies.

h) Biiect the Feueial Executive Boaius in each iegion to actively maiket feueial giant,
financing anu technical assistance piogiams ielateu to eneigy efficiency anu
ienewable eneigy anu to seive as iegional cleaiinghouses foi states to access those
piogiams.

i) Woik with State Tieasuieis anu othei state anu local authoiities that want to
establish public-piivate eneigy investment paitneiships to capitalize them in pait
with existing feueial giant funus.
18

j) Biiect B0E to eaimaik a poition of foimula giants in the State Eneigy Piogiam
foi states to iuentify how they will leveiage the iesouices of othei state anu
feueial giant anu financing piogiams.

F%1%8"$ -2%*.B -.+:'*,

?%="8+3%*+ '( A*%82B

1.
C9#$:,< " ,.<%19$% ('8 "==$:"*.% ,+"*1"81,. Expeuite the upuating anu cieation
of new appliance efficiency stanuaius. To make piogiess moie tianspaient, publish
a scheuule foi completing pioposeu anu planneu appliance stanuaius ovei the
iemainuei of the Auministiation's seconu teim.
19

2. C$"* ('8 =8'28%,, '* +<% C8%,:1%*+@, =8'19.+:D:+B 2'"$. Biiect the 0ffice of Eneigy
Efficiency anu Renewable Eneigy to a) encouiage anu facilitate public-piivate
paitneiships that extenu the Piesiuent's eneigy piouuctivity goal beyonu the cuiient
Auministiation, anu b) engage in outcome-baseu stiategic planning in suppoit of the
goal. Bevelop metiics that will measuie anu veiify piogiess. Peiiouically anu publicly
iepoit the iesults to help the piivate sectoi focus investment.

S. !8:=$% +%.<*:."$ ",,:,+"*.% to states, localities anu utilities by:

a) Biiecting National Laboiatoiies to give high piioiity to theii state anu local
assistance piogiams as the labs allocate iesouices. Cieate moie piogiams like
Poweiing Foiwaiu
S2
NREL's Technical Assistance Piogiam, which taps expeits fiom thiee national
labs to help communities with shoit-teim technical assistance. 0se "tigei
teams"teams of expeits who can be ueployeu to states, localities, utilities anu
inuustiiesto help them uesign anu implement eneigy piouuctivity piogiams.

b) Reallocating iesouices to expanu the Inuustiial Assessment Centei (IAC) piogiam
beyonu the two-uozen univeisities that paiticipate now
2u
theieby impioving the
eneigy piouuctivity awaieness anu skills of tomoiiow's engineeis while
iuentifying piouuctivity impiovements foi small anu meuium manufactuieis.
Paitnei with the SBA to make loan guaiantees available foi companies to finance
the measuies iecommenueu by the IAC piogiam.

c) Exploiing the effectiveness of pioviuing states with technical assistance giants
that allow them to select the expeitise they neeu to supplement assistance fiom
B0E's national laboiatoiies anu othei feueial souices.

u) Belping states quantify the gieenhouse gas emission ieuuctions, economic
benefits
21
anu contiibutions to state eneigy piouuctivity anu ienewable
eneigy goals that will iesult fiom theii State Eneigy Plans.

e) Stiengthening B0E's expeitise in maiket penetiation by assigning a senioi
specialist in technology ueployment anu technology ueployment paitneiships to
each of the clean eneigy piogiams in B0E's 0ffice of Eneigy Efficiency anu
Renewable Eneigy (EERE).
22

4. 7*.8%",% +<% 8'$% '( %*%82B %((:.:%*.B :* 8:,/ 3"*"2%3%*+. Evaluate anu
publicize the value of eneigy efficiency in managing the iisks of climate change,
eneigy piice volatility anu eneigy supply uisiuptions. Nake gieenhouse gas
ieuuctions anu auaptation to climate change specific iequiiements in its State Eneigy
Piogiam piogiam notice foi 2u14 anu beyonu. In auuition, iequiie states to keep
theii eneigy assuiance plans cuiient anu to ensuie that vulneiabilities ielateu to
climate change aie auuiesseu as they upuate the plans.
2S

S4 73=8'D% +<% 3"8/%+:*2 '( (:*"*.:"$ ",,:,+"*.% =8'28"3,. Naiket the Feueial
uoveinment's eneigy-ielateu giant anu financing piogiams moie actively. The }uly
2u1S uuiue to Feueial Finance Facilities foi Clean Eneigy is a goou stait, but B0E
can uo moie to iaise the visibility of these oppoitunities anu to link piojects with
financing foi constituents acioss the countiy.

6. 7*+%28"+% %*%82B =8'19.+:D:+B :* =$"**:*2 "*1 ="8+*%8,<:=,4 Woik with Powei
Naiketing Auministiations (PNAs) anu FERC to uemonstiate anu piomote eneigy
efficiency benefits in geneiation, tiansmission anu uistiibution planning; to
uemonstiate the integiation of ienewable eneigy technologies with the nation's
inteistate tiansmission systems foi oil, natuial gas, anu electiicity
24
; anu to use feueial
convening powei to cieate stiategic paitneiships that inciease the efficiency of the
nation's electiic giiu.
Poweiing Foiwaiu
SS
7. )8%"+% 3'8% 3"8/%+ =9,< "*1 =9$$ ('8 *%+ ]%8' %*%82B #9:$1:*2,>

a) Nake net-zeio eneigy anu caibon builuings the accepteu goal of the builuing
inuustiy by maiketing the economic, enviionmental anu national secuiity benefits
of these builuings.

b) Ensuie that NREL, the National Institute foi Stanuaius anu Technology (NIST) anu
the seveial states active in the fielu of net-zeio eneigy builuings collaboiate on
theii ieseaich, uevelopment anu ueployment effoits.

c) Bevelop thiee new mouel eneigy coues foi iesiuential anu commeicial builuings.
The fiist woulu achieve Su% moie eneigy efficiency than the cuiient
Inteinational Eneigy Conseivation Coue (IECC); the seconu woulu achieve 7S%
moie efficiency; anu the thiiu woulu achieve net-zeio eneigy peifoimance. State
anu local auoption of the new coues woulu be voluntaiy.

u) Assess the ultia-high-efficiency builuing stanuaius uevelopeu by Aichitectuie
2uSu, the 0.S. uieen Builuing Council anu the Living Builuing Challenge, along
with the woik of leauing cities anu states, to incoipoiate testeu cost-effective
piovisions into the National Nouel Builuing Coue.

8. )'*,:1%8 " S9==$B S+"8 =8'28"3> Evaluate the cost anu value of cieating a "Supply
Stai" piogiam along the lines of the pioposeu "Supply Stai Act"
2S
to impiove the
eneigy anu watei efficiency of the nation's supply chain.

9. A$%D"+% S!A-P4 Stiengthen the iole of the State Eneigy Auvisoiy Boaiu (STEAB), the
oiganization cieateu by Congiess to seive as a liaison between states anu B0E on
eneigy efficiency anu ienewable eneigy issues, anu to "uevelop iecommenuations foi
B0E anu Congiess iegaiuing initiation, uesign, implementation, anu evaluation of
feueial eneigy efficiency anu ienewable eneigy piogiams."

1u. V=1"+% "*1 :3=8'D% +<% S+"+% A*%82B C8'28"3 by:

a) Stiuctuiing its competitive giants to iewaiu states that cieate anu sustain
piogiessive eneigy efficiency anu ienewable eneigy policies, incluuing policies that
encouiage piivate capital investment in clean eneigy piojects. Examples incluue
peifoimance incentives anu uecoupling policies that piotect utilities fiom ievenue
losses uue to eneigy efficiency; eneigy efficiency financing piogiams such as on-bill
iepayment anu commeicial PACE; anu ienewable eneigy anu eneigy efficiency
peifoimance stanuaius.

b) Requiiing that state eneigy plans unuei SEP ieflect touay's most cost-effective anu
emissions-effective policies, piogiams anu technologies.

Poweiing Foiwaiu
S4
11. 73=8'D% "*1 %[+%*1 +<% =%8('83"*.% '( FAIC to:

a) Comply with its iequiiement to post up-to-uate iepoits of eneigy efficiency effoits
fiom feueial agencies on its website anu catch up by posting past-uue iepoits fiom
2uu8 to piesent.
26

b) Bevelop a unifoim labeling system foi all feueial builuings that make eneigy
efficiency anu ienewable eneigy impiovements. Iuentify eneigy, gieenhouse gas
emission anu taxpayei savings to help euucate citizens about the benefits of
specific eneigy efficiency measuies.

c) Woik with uSA to collect cuiient eneigy use uata foi feueial builuings anu
vehicle fleets to establish benchmaiks foi eneigy efficiency impiovements.

u) Establish a collaboiative state-feueial piogiam to ietiofit all National
uuaiu facilities using EPCS.

12. ?%3'*,+8"+% #"++%8B ,+'8"2%4 Woik with uSA anu BoB to pilot the use of stationaiy
batteiy stoiage to integiate highei levels of ienewable eneigy into the powei systems
anu as a uemanu iesponse measuie foi base loau electiic savings in auuition to peak
shaving anu eneigy emeigency mitigation. Test this use of batteiy stoiage in clusteis
as well as inuiviuual feueial builuings.

1S. \%$= $'0X:*.'3% ("3:$:%, "1"=+ +' .$:3"+% .<"*2%. Instiuct the Weatheiization
Assistance Piogiam (WAP) to help low-income householus auapt to the impacts of
climate change
27
by allowing the piogiam's ciews to upgiaue eneigy efficiency
measuies in those homes. Foi example, focus on eneigy efficiency impiovements that
piotect low-income families fiom exposuie to extieme heat waves, now the nation's
No. 1 weathei-ielateu killei.

14. 73=8'D% Q-C@, 8%,'98.% 3"*"2%3%*+. Instiuct WAP to piopose ways to impiove
its management of iesouices. Foi example, WAP coulu paitnei with inuustiy to
uesign a iegional uispatch system to manage piocuiement anu uistiibution of
inventoiy, saving millions of uollais. Similaily, a unifieu inventoiy system woulu
allow weatheiization agencies to bettei manage anu tiack iesouices.

1S. !8"./ =8'19.+:D:+B #B ,+"+% "*1 ,%.+'8. Biiect EIA to expanu its eneigy enu-use
suiveys to tiack eneigy piouuctivity by state, by the most eneigy-intensive sectois anu
subsectois, anu to compaie 0.S. eneigy piouuctivity to that of othei inuustiial nations.
Biiect EIA to auu usei-fiienuly visual inuicatois on its website so the public can tiack
piogiess.

16. )8%"+% " '*%X,+'= :*('83"+:'* 8%,'98.%. Establish anu maintain a one-stop web-
baseu uiiectoiy thiough which the public can easily leain about anu access all
feueial eneigy efficiency piogiams. 0iganize the site by type of eneigy consumei -
i.e. homeowneis anu ienteis, commeicial builuing owneis anu tenants, inuustiies,
Poweiing Foiwaiu
SS
faims anu ianches, communities, etc. Incluue piogiammatic infoimation as well as
infoimation on tax cieuits, giants, labeling anu euucational mateiials.

17. ?%D%$'= *%0 ,+"*1"81, ('8 0"+%8 %((:.:%*.B. Bevelop new iecommenueu stanuaius
foi all plumbing piouuct watei efficiency that aie moie stiingent than cuiient feueial
stanuaius, piomote theii auoption by states, anu iecommenu theii auoption by
Congiess.
28

18. H%*%0 0'8/ '* \AHS "*1 AAIS. Review lessons leaineu fiom the B0EB0B
piogiam on Bome Eneigy Rating Systems (BERS) anu Eneigy Efficient Noitgages
(EENS) in the 199us to ueteimine whethei sufficient uata on loan peifoimance now
exist to ievive the effoit to ieflect iesiuential eneigy efficiency featuies in moitgage
teims anu to finance efficiency impiovements by auuing theii costs in moitgage
amounts.
29

A*D:8'*3%*+"$ C8'+%.+:'* -2%*.B

1. )'".< +<% ,+"+%,. Biiect EPA's Regional 0ffices to seive as "coaches" to help states
incoipoiate eneigy efficiency anu ienewable eneigy into SIPs anu into NSR anu PSB
peimitting. Equip the Regional 0ffices to help states calculate the economic as well as
enviionmental benefits of eneigy efficiency measuies in theii SIPs.

?%="8+3%*+ '( \'9,:*2 "*1 V8#"* ?%D%$'=3%*+

1. S%+ %*%82B ,+"*1"81, ('8 3"*9(".+98%1 <'9,:*2. Woik with B0E to cieate anu
implement an eneigy efficiency stanuaiu foi manufactuieu housing at least as
stiingent as the latest IECC coue foi site-built iesiuential builuings, as long as uoing
so is cost-effective on a lifecycle cost basis. uive B0E, B0B anu 0NB a ueauline of 18
months oi less to finalize the new stanuaiu.
Su

2. C8'D:1% (%%1#"./ +' +%*"*+,. To help achieve measuiable ieuuctions in B0B's
eneigy costs, uevelop a uata shaiing agieement with local utilities anu othei
appiopiiate thiiu-paity venuois to uelivei uetaileu eneigy efficiency anu
consumption feeuback to public housing tenants.
S1

S. 73=8'D% %*%82B ,+"*1"81, ('8 =9#$:. <'9,:*2. 0pgiaue stanuaius foi public
housing to the 2u12 IECC Coue, ASBRAE 9u.1 oi the host state's eneigy builuing coue,
whichevei is moie stiingent.

4. A19."+% +%*"*+, '* 8%19.:*2 %*%82B .',+,. Bevelop a uata shaiing agieement with
local utilities anu othei thiiu-paity venuois as appiopiiate to uelivei uetaileu eneigy
infoimation to public housing tenants to piomote eneigy liteiacy anu to measuiably
anu veiifiably ieuuce B0B's eneigy bills.

Poweiing Foiwaiu
S6
?%="8+3%*+ '( \%"$+< "*1 \93"* S%8D:.%,

1. \%$= $'0X:*.'3% ("3:$:%, .'*+8'$ +<%:8 %*%82B .',+,. Collaboiate with B0B anu
state agencies that auministei Low Income Bome Eneigy Assistance Piogiam
(LIBEAP) funus to help lowei income families to take contiol of theii eneigy use
anu lowei theii bills.
S2
in auuition, cooiuinate with B0B to use LIBEAP funus to
impiove eneigy efficiency in public housing units.

`((:.% '( I"*"2%3%*+ "*1 P912%+

V,% (9$$X.',+ "..'9*+:*2 :* "$$ %*%82B ".+:'*,. Establish that it is the
Auministiation's policy to use full-cost accounting (accounting that iecognizes the full
economic, enviionmental, health, anu social costs of an action oi uecision) as well as
life cycle accounting in all applicable feueial actions involving eneigy.
SS
Stuuy the
application of full-cost accounting in feueial policies anu piogiams anu iecommenu
how it shoulu be incoipoiateu into iule making, buuget pioposals, piocuiement anu
othei feueial actions. Engage in continuous impiovement of full-cost accounting as
ieseaich allows pieviously unaccounteu foi cost factois to be quantifieu.

F%1%8"$ A3%82%*.B I"*"2%3%*+ -2%*.B

1. V,% %*%82B %((:.:%*.B "*1 8%*%0"#$% %*%82B ", 8%,:$:%*.% +''$,. Woik with B0E
anu its National Laboiatoiies to auvance the use of eneigy efficiency anu ienewable
eneigy technologies that stiengthen the iesilience of communities anu infiastiuctuie,
pievent eneigy emeigencies, anu impiove the eneigy piouuctivity of communities as
they iebuilu aftei uisasteis. Incoipoiate eneigy piouuctivity anu ienewable eneigy
technologies into FENA's guiuelines, technical assistance, giant anu financing
piogiams.
S4

2. -,,%,, +<% 8'$% '( .$%"* %*%82B :* <"]"81 3:+:2"+:'*4 Requiie that states anu cities
auuiess the iisk management benefits of eneigy efficiency anu ienewable eneigy in
hazaiu mitigation plans. (Foi example, uistiibuteu powei systems anu micio-giius can
ieuuce the iisk of powei uisiuptions fiom extieme weathei events, while eneigy
efficiency featuies in builuings can ieuuce heat-ielateu illness anu fatalities.)

S. AY9:= %3%82%*.B ,<%$+%8, 0:+< ,'$"8 #"./9=. Equip all schools that aie uesignateu
as emeigency shelteis with on-site backup powei anu up-to-uate eneigy efficiency
technologies, paiticulaily those that stiengthen the schools' ability to withstanu
extieme weathei events. Belp the schools become uemonstiation centeis foi eneigy
technologies that inciease iesilience, pioviuing them with assistance in inteipieting
the technologies foi stuuents, faculty anu visitois.

4. V,% 8%*%0"#$% %*%82B +%.<*'$'2B +' 8%,+'8% D:+"$ ,%8D:.%,. Pioviue giants anu
technical assistance to othei local facilities that uelivei fuel, electiicity, meuical seivices
anu sanctuaiy fiom the impacts of climate change. Examples incluue backup ienewable
Poweiing Foiwaiu
S7
powei systems to opeiate emeigency seivices, gasoline pumps at gas stations, meuical
facilities anu vital communications seivices, as well as eneigy efficiency anu ienewable
eneigy technologies that ieuuce losses to small businesses.

S3"$$ P9,:*%,, -13:*:,+8"+:'*

1. \%$= ,3"$$ #9,:*%,,%, 8%19.% 8:,/,. Incoipoiate iisk-ieuucing eneigy efficiency anu
ienewable eneigy technologies foi uisastei mitigation anu iecoveiy in SBA's
emeigency piepaieuness mateiials foi small businesses.
SS
Incluue tiaining in
peifoimance-baseu eneigy efficiency piogiams such as IS0 Suuu1 anu ASBRAE bEQ
labeling.

R%+%8"*, -13:*:,+8"+:'*

1. V=28"1% ,+"*1"81, foi vA loans to the 2u12 IECC Coue.

F%1%8"$ \'9,:*2 -13:*:,+8"+:'*

1. V=28"1% ,+"*1"81, foi uiiect FBA loans to the 2u12 IECC Coue.

?%="8+3%*+ '( !8"*,='8+"+:'* N"+:'*"$ \:2<0"B !8"((:. S"(%+B
-13:*:,+8"+:'*

1. C8%="8% ('8 )-FA 8%D:%04 Lay the political giounuwoik foi miu-couise ieview of
Nouel Yeai 2u17-2u2S fuel economy stanuaius foi passengei vehicles anu light-uuty
tiucks by publicizing ongoing uata about eneigy savings, consumei savings anu
emission ieuuctions.
S6

2. )'D%8 +89./ +8":$%8,4 In collaboiation with EPA, uevelop post-2u18 fuel-economy
stanuaius that covei both tiactois anu tiaileis foi heavy-uuty vehicles. Woik with
inuustiy anu stakeholueis to incoipoiate othei new technologies anu uesigns into the
post-2u18 stanuaius foi heavy-uuty vehicles, baseu in pait on lessons leaineu in
EPA's SmaitWay paitneiship4

F%1%8"$ A*%82B H%29$"+'8B )'33:,,:'*

1. C8'+%.+ =8:D"+% 1"+". Bevelop iules peitaining to consumei uata piivacy anu access.
Such iules shoulu ensuie consumeis aie piotecteu when pioviuing theii uata to thiiu-
paity venuois, but shoulu also enable innovation in consumei oiienteu eneigy
applications that take full auvantage of smait metei investments.

2. )$%"8 +<% ="+< ('8 )\C ,B,+%3,4 Reuuce oi eliminate baiiieis to wiuei use of
combineu heat anu powei systems by inuustiy anu othei enu-useis.
Poweiing Foiwaiu
S8
)<"=+%8 E> ?%D%$'=:*2 H%*%0"#$% A*%82B
I"8/%+,

A wiuely helu assumption is that financial capital will move fiom the siuelines to ienewable
eneigy when theie is a substantial anu sustaineu maiket. That sets up a classic chicken-egg
pioblem: Investment will come when the maikets aiiive but the maikets can't aiiive
without investment.

The cycle can be bioken by goveinment inteivention. Theie is a longstanuing uisagieement
in policy ciicles about whethei goveinment shoulu "meuule in maikets" oi "pick winneis."
But the fact is, the goveinment picks many winneis among eneigy inuustiies touay anu has
Cieate laigei anu moie stable maikets foi ienewable eneigy technologies with
seveial of the same actions CNEE iecommenueu foi eneigy efficiency. Foi example,
uesign EPA's upcoming powei plant iegulations unuei Section 111(u) to allow
ienewable eneigy investments to be cieuible compliance measuies.

Biiect the Tennessee valley Authoiity anu the goveinment's foui Powei Naiketing
Auministiations to leau the way in ueveloping utility business mouels foi the 21
st

centuiy, incluuing how to integiate uistiibuteu geneiation anu ienewable eneigy
technologies into the giiu, utility management piactices anu iates.

Revitalize the auministiation's piogiams foi the uevelopment of offshoie winu
eneigy piojects.

Woik with iuial leaueis to ensuie full utilization of 0SBA's loan guaiantee piogiam
foi eneigy efficiency anu ienewable eneigy piojects by Ruial Electiic Coopeiatives
anu theii customeis.

Bevelop the infoimation neeueu to consiuei fiesh watei iesouice uemanu as a
factoi in setting eneigy piioiities.

0se the bully pulpit to senu the message that Ameiica's tiansition to a clean eneigy
economy is alieauy unueiway, that ienewable eneigy is ieauy, but that the
tiansition must pioceeu moie quickly than any pievious majoi shift in the nation's
eneigy mix.
Poweiing Foiwaiu
S9
uone so foi at least a centuiy. In the eneigy sectoi, the tiauitional winneis have been coal,
gas, oil anu nucleai powei, the longtime beneficiaiies of taxpayei subsiuies anu othei
favoiable policies.

CNEE's position, ieinfoiceu by its uialogue with inuustiy leaueis, is this: It is in the national
inteiest foi goveinment to acceleiate the uevelopment anu maiket penetiation of
technologies that pioviue ciitical benefits oi pievent iiiepaiable haim to the Ameiican
people. Touay the Ameiican people neeu eneigy secuiity anu stable piices, clean aii anu a
powei system that uoes not tiiggei global climate uisiuption.

Still, goveinment subsiuies alone cannot unlock the potential of ienewable eneigy.
uoveinments at all levels in the 0niteu States aie stiuggling with buuget pioblems.
uoveinment's moie impoitant iole is to encouiage anu cieate the conuitions foi capital
investment anu financing in the piivate sectoi. As states have been pioving with policies
such as ienewable eneigy poitfolio stanuaius, goveinments have non-monetaiy as well as
monetaiy tools to stimulate piivate investment. Foi the Piesiuent of the 0niteu States,
these incluue executive authoiities alieauy establisheu by Congiess oi implieu in
congiessional statements of intent.
1

C8%,:1%*+:"$ 7*:+:"+:D%,

O'"$ 5> `=%* N%0 HA I"8/%+, 0:+< +<% )$%"* -:8 -.+

As noteu in Chaptei 1, the Clean Aii Act is aiguably the Auministiation's biggest powei tool
foi stimulating ienewable eneigy anu eneigy efficiency maikets. Congiess has uelegateu
the authoiity to enfoice the act to the Auministiatoi of the EPA. Within this authoiity, EPA
can ueteimine the uegiee of flexibility it gives to polluteis.

In 2u1S, EPA issueu a iegulation on gieenhouse gas emissions fiom new electiic powei
plants. It is scheuuleu to issue a pioposeu iule in miu-2u14 on gieenhouse gas emissions
fiom existing powei plants anu to finalize the iule a yeai latei unuei Section 111(u) of the
Act. If EPA gives states, state utility iegulatois anu electiic utilities sufficient flexibility,
incluuing cieuit foi emission ieuuction measuies beyonu powei plant fence lines, the
iegulation will be a maiket stimulus.
2

A[%.9+:D% -.+:'*,>

Nany of the iecommenuations in Chaptei 1 apply also to uesigning Section 111(u)
iegulation to builu maikets foi ienewable eneigy technologies. The Auministiatoi of EPA
shoulu:

1. W''/ #%B'*1 +<% ='0%8 =$"*+. Woik with B0E to assess the potential foi cost-
effective ienewable eneigy piogiams anu policies to ieuuce gieenhouse gas emissions
fiom any geneiation stations in a utility's fleet anu beyonu the fleet to othei caibon-
cutting investments such as qualifieu uistiibuteu geneiation using clean eneigy
Poweiing Foiwaiu
4u
technologies. Cite B0E's finuings in a Notice of Bata Availability anu use them in EPA's
moueling.

2. C8'D:1% .$%"8 29:1"*.% +' ,+"+%,. Pioviue cleai guiuance in the iegulatoiy uockets
about the kinus of flexible, state-initiateu appioaches EPA is piepaieu to appiove as
equivalent to whatevei uefault feueial peifoimance stanuaiu it establishes as a
guiueline. Be explicit about how EPA will quantify emission ieuuctions attiibuteu to the
use of clean eneigy iesouices. Establish national guiuelines (iathei than guiuelines at
the iegional level wheie state SIPs aie appioveu) on the emission ieuuction appioaches
EPA will consiuei acceptable anu give all stakeholueis the oppoitunity to comment on
those alteinatives befoie the feueial iegulations aie finalizeu. Issue cleai pieliminaiy
guiuance to states as eaily as possible in the iegulatoiy piocess to encouiage eaily
auoption of new eneigy efficiency anu ienewable eneigy measuies with assuiance that
measuies consistent with the guiuance will be cieuiteu unuei Section 111(u).
Encouiage state P0Cs to open ielevant state uockets aheau of EPA's guiuance.
S

S. -.+:D%$B =8'3'+% 8%*%0"#$% %*%82B +%.<*'$'2:%,. Instiuct EPA Regional 0ffices to
actively piomote the use of ienewable eneigy piogiams anu policies in SIPs anu to
stieamline the appioval piocess foi those measuies.

4. a9"*+:(B +<% D"$9% '( 8%*%0"#$% %*%82B :* )$%"* -:8 -.+ .'3=$:"*.%. Bevelop
infoimation foi states anu P0Cs on how ienewable eneigy technologies can ieuuce the
cost of compliance with Clean Aii Act iequiiements anu how states might count
ienewable eneigy systems as avoiueu costs in utility iegulation.

S. \%$= ,+"+%, :*.'8='8"+% 8%*%0"#$% %*%82B :* S%.+:'* 555b1c =$"*,. Collaboiate
with B0E to pioviue states with technical assistance anu infoimation to help them
incoipoiate ienewable eneigy into compliance piogiams unuei Section 111(u).

6. S+8%"3$:*% ,'$"8 1%D%$'=3%*+ :* *'*"++":*3%*+ "8%",. Qualify solai eneigy
piojects as a LAER (lowest achievable emission iate) compliance tool unuei the Clean
Aii Act 199u amenuments, in oiuei to stieamline the uevelopment of solai piojects in
nonattainment aieas.

O'"$ E> I'1%8*:]% "*1 I'#:$:]% F%1%8"$ A$%.+8:. SB,+%3 -,,%+,

In a uialogue that CNEE facilitateu with utility executives,
4
senioi officeis of seveial of the
nation's laigest electiic utilities anu tiansmission anu uistiibution companies offeieu this
situation analysis:

Tbe notions enerqy tecbnoloqies onJ neeJs ore oJvoncinq foster tbon rules, rote reqimes onJ
feJerol oJministrotive processes. lts not only tbe utility onJ enerqy sectors tbot must be
reinventeJ for tbe 21
st
century; its tbe entire system of qovernment requlotion onJ privote
finoncinq. Flectric onJ qos utilities rely on privote morkets onJ privote incentives to Jeliver
relioble enerqy to tbe Americon people. Tbe rules of investment onJ finoncinq must be oliqneJ
Poweiing Foiwaiu
41
witb oJvonces in tecbnoloqy to expeJite tbe tronsition to moJern business moJels onJ enerqy
resources.

The Feueial uoveinment has seveial assets that can leau the way to integiating ienewable
iesouices moie ueeply in the Ameiican economy. They incluue FERC, the PNAs, the TvA,
the goveinment's extensive lanu holuings, anu the 0.S. militaiy.

F%1%8"$ A*%82B H%29$"+'8B )'33:,,:'* bFAH)c>

FERC is an inuepenuent agency of five membeis appointeu by the Piesiuent. It iegulates
inteistate tiansmission of electiicity, natuial gas, anu oil as well as the licensing of
hyuioelectiic piojects. Noie specifically, FERC:

Regulates tiansmission anu wholesale sales of electiicity in inteistate commeice;
Reviews ceitain meigeis, acquisitions anu business tiansactions by electiicity
companies;
Regulates tiansmission anu sale of natuial gas foi iesale in inteistate commeice;
Reviews siting applications foi electiic tiansmission piojects in limiteu ciicumstances;
Licenses anu inspects piivate, municipal anu state hyuioelectiic piojects;
Establishes manuatoiy ieliability stanuaius foi the high-voltage inteistate tiansmission
systems;
Nonitois anu investigates eneigy maikets; anu
0veisees enviionmental matteis ielateu to natuial gas anu hyuioelectiic piojects.

FERC uoes not iegulate ietail electiicity sales to customeis; appiove the constiuction,
siting anu iouting of electiic geneiation facilities; oi iegulate municipal powei systems,
feueial PNAs oi most iuial electiic coopeiatives.

Because FERC is an inuepenuent agency, the Piesiuent has no official authoiity ovei its
uecisions beyonu his appointment of its membeis. Thus, the Piesiuent shoulu caiefully
exeit his powei of peisuasion.

A consistent theme in CNEE's ienewable eneigy financing iounutable was how powei
maikets shoulu evaluate the costs anu benefits of ienewable eneigy in a least-cost
enviionment. Biscussants obseiveu that wholesale maikets touay uo not coiiectly value a
vaiiety of emeiging technologies anu piactices, incluuing the benefits of uistiibuteu
geneiation to system efficiency, the contiibutions of eneigy efficiency, piotection fiom
piice volatility with ienewable iesouices that caiiy no fuel costs, anu ieuuctions in capital
intensity. At piesent, utilities anu ienewable eneigy companies involveu in filings have
shown they cannot even agiee on categoiies of avoiueu costs. The iesults aie maiket
signals that unueivalue ienewable eneigy, eneigy efficiency anu uistiibuteu geneiation in
least-cost calculations.

Poweiing Foiwaiu
42
A[%.9+:D% -.+:'*,>

Paiticipants in the CNEE uialogue suggesteu an aiiay of policy anu communications
initiatives involving FERC. The Piesiuent can uiiect the Secietaiy of Eneigy to uiscuss the
suggestions with FERC anu to iecommenu that FERC consiuei implementing them. If
necessaiy on impoitant policy matteis, B0E can geneiate FERC's iesponse to the
iecommenuations by petitioning it to uo a iulemaking.

14 73=8'D% .'339*:."+:'* "*1 '9+8%".<.

a) Convene a uiscussion with acauemic, national laboiatoiy anu piivate sectoi expeits
on the issues listeu above.

b) 0ffei suggestions to B0E's solai business mouels pioject on best piactices iegaiuing
the impacts of solai systems on the wholesale maiket.

c) Bevelop a toolkit that gives state iegulatois examples of iegulatoiy policies foi
incoipoiating ienewable eneigy into the system. In auuition, utilize FERC letteis,
white papeis anu technical iepoits to explain anu piomote these methouologies.

u) 0ffei to collaboiate with states to coiiect inaccuiate maiket signals in wholesale
maikets, incluuing the value of uistiibuteu geneiation to system efficiency, the value
of hyuioelectiic systems, the paiiing of uiffeient ienewable eneigy iesouices, anu
the benefits to the giiu of uistiibuteu geneiation anu eneigy efficiency. Exploie
incentives foi uistiibution utilities to make least-cost investments that ieuuce capital
intensity.

e) Woik with P0Cs to close the gap between P0C anu FERC evaluations of giiu-
connecteu photovoltaic systems anu othei ienewable eneigy technologies.

2. V=1"+% ='$:.:%, "*1 =8'.%,,%,.

a) Piomote bioau tiansmission cost allocation.

b) Auvocate foi iecognition of the fact that uistiibuteu geneiation will look like a
wholesale powei iesouice if states uon't tieat solai as a Public 0tility Regulatoiy
Policies Act (P0RPA) tiansaction. If uistiibuteu geneiation staits to have an impact
on the wholesale maiket, inciease tianspaiency at the wholesale level.

c) Incluue the allocation of tiansmissions costs anu the giiu's opeiation efficiency in
FERC piioiities.

u) Iuentify costs that aien't cuiiently piiceu, incluuing the many seivices that now aie
not valueu at the uistiibution level. Woik with B0E to ieview how avoiueu costs aie
evaluateu anu uistiibuteu.
S

Poweiing Foiwaiu
4S
e) Sustain the ietuin on equity (R0E) foi tiansmission piojects at sufficient levels to
ensuie auequate anu stable capital flows into new tiansmission investments.
6

f) Implement peifoimance stanuaius, incentive iates, smait giiu stanuaius anu othei
policies to ensuie that new tiansmission piojects incoipoiate auvanceu technologies
foi safei, smaitei, moie ieliable anu moie efficient tiansmission systems.
7

g) Requiie planning that incoipoiates all the benefits of builuing out the nation's
electiic giiu system anu ieuuces iisks so that investment can flow into the system at
least cost.

h) Bevelop a mouel foi measuiing the impact of vaiious methouologies on avoiueu cost
iates. The mouel shoulu synthesize the vaiieu ways that states implement avoiueu
costs anu pioviue an evaluation of those methouologies best suiteu to caiiying out
the goal of P0RPA to piomote the uevelopment of alteinative powei (Elefant, 2u12).

i) Woik with B0E on a common uefinition of the categoiies of avoiueu costs. Bevelop a
moie accuiate methouology foi avoiueu cost calculus that incoipoiates eneigy,
capacity, pecuniaiy costs, anu pecuniaiy benefits (Biaufoiu & Boskins, 2u1S) anu
moie accuiately ieflects the value of uistiibuteu geneiation facilities uuiing times of
ciitical system peak. Foi example, incluue line-loss avoiuance, the ability to make
smallei capacity auuitions that follow inciemental loau changes, the uefeiial oi
avoiuance of utility capital expenuituies, anu the enviionmental benefits of
uisplacing fossil fuels (Keyes, Fox & Wieuman LLP).

j) Bevelop guiuance that helps ensuie that all maikets (e.g., eneigy, ancillaiy seivices,
capacity) anu maiket-makeis (utilities) consiuei both uemanu-anu supply-siue
options. All optionscential anu uistiibuteu geneiation, tiansmission, efficiency,
anu uemanu-iesponseshoulu compete with one anothei to pioviue electiicity
seivices (Ameiica's Powei Plan, 4). To encouiage innovation anu to accommouate
unique chaiacteiistics of maikets, these iules shoulu be oiienteu towaiu outcomes
iathei than piesciibing specific technologies. They shoulu also incoipoiate iigoious
measuiement stanuaius to ensuie that outcomes aie met.

k) Begin consiueiing the full life-cycle costs of ienewable eneigy anu fossil eneigy,
incluuing factois such as the social costs of caibon, to cieate a moie level playing
fielu foi competition between these iesouices.

l) Consiuei cieating guiuance anu taking iegulatoiy action to enable effective
combinations of policies to finance ienewable eneigy technologies unuei the
Feueial Powei Act.
8

Poweiing Foiwaiu
44
C'0%8 I"8/%+:*2 -13:*:,+8"+:'*, bCI-,c>

The B0E oveisees foui PNAsBonneville (BPA), Southeastein (SEPA), Southwestein
(SWPA) anu Westein Aiea Powei (WAPA)that opeiate electiic systems, seive as
balancing authoiities anu sell the output of feueially owneu anu opeiateu hyuioelectiic
uams in SS states (Figuie 1). The PNAs aie iesponsible foi 7% of total electiic geneiation
in the 0niteu States. While theii piimaiy mission is to maiket wholesale powei, thiee also
have a iole as tiansmission owneis anu opeiatois in theii teiiitoiies.

By law, the PNAs sell wholesale powei piimaiily to "piefeience customeis" - mostly
publicly owneu anu coopeiative-owneu utilities
9
at the "lowest possible iates to
consumeis consistent with sounu business piinciples." PNAs aie alloweu to boiiow money
fiom the 0.S. Tieasuiy at low inteiest iates. FERC iegulates PNA iates to make suie they
aie sufficient to iepay the Tieasuiy.

The PNAs' piefeience customeis aie significant playeis in the nation's electiic system. Foi
example, iuial electiic coopeiatives (RECs) pioviue powei to 42 million people in 47
states. They own anu maintain 42% of the nation's electiic uistiibution lines. They aie
aggiessive in uefenuing business as usual in how the PNAs opeiate anu set iates foi
electiic powei.

An example is the ieaction to a memoianuum that foimei Eneigy Secietaiy Steven Chu
issueu to the auministiatois of the PNAs in 2u12, uiiecting them to "take a leaueiship iole
in tiansfoiming oui nation's electiic sectoi." Among othei things, Secietaiy Chu tolu the
PNAs to uevelop new iate stiuctuies that offei incentives foi integiating ienewable eneigy
technologies into theii systems. The lettei uiew a iebuke fiom 166 membeis of Congiess.
It illustiateu that although Congiess establisheu B0E as the auministiative home of the
PNAs in 1977, the piefeiieu customeis anu theii iepiesentatives in Congiess exeit
consiueiable contiol.

As Secietaiy Chu noteu in his memoianuum, the natuie anu the neeus of Ameiica's powei
sectoi aie changing iapiuly (Figuie 2).
1u
The Piesiuent's oppoitunity is to mobilize feueial
powei assets to leau the nation in integiating uistiibuteu eneigy geneiation anu ienewable
eneigy iesouices into the tiauitional geneiation anu uistiibution system, anu to oveicome
the iesistance of PNA customeis anu electeu leaueis who uo not want changes in the status
quo.

Poweiing Foiwaiu
4S

F:298% 5> CI- +%88:+'8:%, "*1 (".:$:+:%,

A[%.9+:D% -.+:'*,>

1. V,% #'88'0:*2 "9+<'8:+B ('8 +<% 28:1. Biiect WAPA anu BPA to use the boiiowing
authoiity they ieceiveu in the Recoveiy Act ($S.2S billion) to expanu anu moueinize the
westein electiic giiu.

2. -..%$%8"+% %*%82B ,B,+%3 3'1%8*:]"+:'*. Biiect the Secietaiy of Eneigy, anu
ieaffiim his authoiity, to woik with PNA leaueiship to acceleiate moueinization of
Ameiica's eneigy iesouices anu powei systems. Foi example, the B0E foimeu a }oint
0utieach Team with the WAPA, which is now implementing iecommenuations to help
ensuie the 0.S. has a mouein, secuie, anu ieliable electiic tiansmission system. Each
PNA can use this appioach to bettei integiate ienewable eneigy into its plans, finances,
anu management of giiu assets.

Poweiing Foiwaiu
46

F:298% E> )<"*2%, :* +<% N"+:'*@, A*%82B I:[ d 5KUL +' EL5L

S. ?%D%$'= ,+8"+%2:. =$"*,. Biiect the Secietaiy of Eneigy to iequiie that the PNAs
uevelop uetaileu stiategic plans, with input fiom theii customeis, on how they will
implement anu communicate the policies anu stanuaius that constitute best piactices
foi 21
st
centuiy electiic utilities, consiueiing each iegion's unique chaiacteiistics.
Among othei things, the PNAs shoulu uesciibe how they will mouel:

a) The costs, benefits anu piactices of incieasing tiansmission capacity anu system
flexibility to integiate laige amounts of ienewable eneigy into the powei system-
amounts that contiibute significantly to the Piesiuent's goal of obtaining 2S% of
Ameiica's electiicity fiom ienewable iesouices by 2u2S
11
, iising to 8u% by 2uSu.
12

b) Bettei planning that fully consiueis the iisks anu benefits of issues ianging fiom
electiic utility iesouice selection to stiengthening the powei system's iesilience
against the impacts of global climate change.
1S

c) Rules that taiget a poition of ie-maiketeu oi newly maiketeu hyuiopowei to
customeis who plan to use theii allocations foi the uiiect ieplacement of
conventional geneiation with high emission iates.

4. \:8% ,/:$$%1 3"*"2%8,. Biiect the 0PN to ensuie that the job iequiiements anu
peifoimance ciiteiia foi geneial seivice feueial employees in the PNAs emphasize
knowleuge, skills anu abilities that builu the PNAs' capacity to caiiy out the Piesiuent's
Poweiing Foiwaiu
47
goals anu the Secietaiy of Eneigy's instiuctions ielateu to builuing a 21
st
centuiy
electiic powei system. Encouiage the feueial Qualifications Review Boaiu
14
to look foi
Senioi Executive Seivice manageis who have both executive management expeiience
anu technical skills ielevant to the PNAs' new iesponsibilities.
1S

S. C"8+*%8 0:+< =8:D"+% 1%D%$'=%8,. Biiect the PNAs to take full auvantage of theii
authoiity to paitnei with piivate tiansmission uevelopeis unuei EPAct Section 1222.

6. -,,%,, +<% #%*%(:+, '( "$$'0:*2 9+:$:+:%, +' 9,% %[.%,, ."=".:+B. Biiect the PNAs to
evaluate the poweiplant-to-plug benefits anu costs of eliminating chaiges foi utilities to
move powei thiough PNA tiansmission assets when the PNAs have excess
tiansmission capacity. Repoit the iesults of this evaluation to the Secietaiy.

7. W"B ='$:+:."$ 28'9*10'8/. To builu political suppoit
16
foi these actions:

a) Neet at the White Bouse with thought leaueis fiom the finance community, the
Ruial 0tility Seivice (R0S) anu the PNAs' piefeiieu customei gioups to explain the
impoitance of theii involvement in the evolution of Ameiica's powei system, to
challenge them to leau that evolution, anu to enlist theii suppoit foi making PNAs
examples of how the nation's electiic geneiation anu uistiibution utilities can auapt
successfully to emeiging eneigy technologies anu powei system piactices.

b) uive a piesiuential auuiess fiom a laige iuial ienewable eneigy geneiation site to
emphasize the iole that iuial Ameiica will play, anu why, in the tiansition to clean
eneigy anu ienewable iesouices.
17

c) Biiect 0SBA to involve "bounuaiy oiganizations" such as the Coopeiative Extension
Seivice
18
in builuing gieatei unueistanuing in iuial communities about the
significant local financial anu ecological benefits of iuial ienewable eneigy
piouuction.

!%**%,,%% R"$$%B -9+<'8:+B b!R-c>

TvA is a coipoiation owneu by the 0.S. uoveinment. It is similai to, but not, a PNA. It sells
wholesale powei to 1SS utilities that seive 9 million people, S1 laige inuustiial customeis
anu six feueial installations. It opeiates neaily 16,uuu ciicuit miles of tiansmission lines
connecteu uiiectly to 14 othei electiic systems. Noie than 4u% of its capacity comes fiom
coal, neaily 24% fiom natuial gas, 19% fiom nucleai powei plants, anu the iest fiom
hyuioelectiic plants. TvA iepoits that in 2u11, moie than 4u% of its eneigy came fiom
clean oi caibon-fiee souices.
19

Bowevei, TvA has been the thiiu-laigest souice of caibon uioxiue emissions in the 0.S.
electiic sectoi. In iecent yeais, it has been chaigeu with violations of the Clean Aii Act at 11
of its coal-fiieu powei plants. In Apiil 2u11, TvA ieacheu a settlement with EPA, iequiiing
it to spenu $S-$S billion on new anu upgiaueu pollution contiols anu $SSu million on clean
Poweiing Foiwaiu
48
eneigy piojects. TvA says its "ieneweu vision is to be one of the nation's leauing pioviueis
of low-cost anu cleanei eneigy by 2u2u."
2u

Piesiuent 0bama has uiiecteu 0NB to conuuct a stiategic ieview of the Feueial
uoveinment's ielationship to TvA, incluuing whethei the goveinment's iole shoulu be
ieuuceu oi teiminateu. The Piesiuent inuicateu the ieview is uiiven by the amount of uebt
TvA has accumulateu anu by the iuea that TvA has achieveu its oiiginal objectives anu "no
longei iequiies feueial paiticipation."
21

TvA was establisheu to meet the challenge of iuial electiification. Although it has
accomplisheu that goal, the 21st centuiy has biought new challenges. The question is
whethei the Auministiation shoulu piivatize TvA oi ievise its mission to suppoit the
Piesiuent's eneigy objectives.
22

A[%.9+:D% -.+:'*,>

1. H%3:,,:'* !R- ", " =:'*%%8 '( E5
,+
.%*+98B #9,:*%,, =8".+:.%,. Biiect it to:

a) Collaboiate with B0E, the Council on Enviionmental Quality (CEQ), EPA anu othei
stakeholueis to pioneei cost-effective stiategies that help public utilities keep pace
with emeiging technologies. Such stiategies coulu incluue competitive giants to
uistiibutois, pay-foi-savings, anu lost ievenue iecoveiy.

b) 0pen a uocket on the implementation of an outcomes-baseu peifoimance ievenue
mouel that iewaius the accomplishment of ceitain policy objectives such as
impiovements in customei satisfaction, gieatei system ieliability, emission
ieuuctions, eneigy piouuctivity impiovements anu the integiation of ienewable
iesouices anu uistiibuteu eneigy geneiation.

c) Engage with meichant tiansmission uevelopeis seeking to biing low-cost ienewable
eneigy into the iegion by inteiconnecting winu powei fiom Texas anu 0klahoma
with the TvA giiu. Cleonline, the meichant tiansmission uevelopei who pioposeu
this, has applieu to B0E to use the Section 1222 authoiity that woulu combine the
company's piivate finance with the feueial goveinment's eminent uomain authoiity.
A commitment fiom TvA to buy clean, cheap winu powei off the line woulu help
auuiess peisistent unceitainty about the pioposal.

F%1%8"$ $"*1,

The Feueial uoveinment owns neaily 6Su million acies of lanu, neaily one-thiiu of the lanu
aiea of the 0niteu States. The Buieau of Lanu Nanagement (BLN) has pioposeu a National
Eneigy Policy Implementation Plan to iuentify the potentials foi anu baiiieis to ienewable
eneigy uevelopmentincluuing solai, biomass, geotheimal anu winu eneigyon public
lanus manageu by it, the Buieau of Inuian Affaiis anu the 0.S. Foiest Seivice.
As a fiist step, BLN paitneieu with NREL to assess this potential in the westein 0niteu
Poweiing Foiwaiu
49
States. In Febiuaiy 2u1S, BLN anu B0E issueu a iepoit that 6S of BLN's planning units in
11 westein states have high potential foi powei piouuction fiom one oi moie ienewable
eneigy iesouices, while 2u planning units in 7 westein states have high potential foi powei
piouuction fiom thiee oi moie ienewable iesouices.

In }une 2u1S, Inteiioi Secietaiy Sally }ewell announceu thiee laige ienewable eneigy
piojects with a combineu geneiating capacity of S2u megawatts on 16,6uu acies of feueial
lanu in Aiizona anu Nevaua. The piojects aie expecteu to cieate neaily 1,uuu constiuction
jobs anu 7S peimanent jobs. In auuition, Secietaiy }ewell announceu that the goveinment
woulu lease neaily 16S,uuu acies on the 0utei Continental Shelf off Rhoue Islanu foi
commeicial winu uevelopment. The Bepaitment of Inteiioi (B0I) iepoiteuly is consiueiing
peimits foi 2S auuitional ienewable eneigy piojects on public anu Native Ameiican lanus.

A[%.9+:D% -.+:'*,>

1. S='+$:2<+ '* 8%*%0"#$% %*%82B4 Bolu high-visibility events involving the Piesiuent in
giounubieaking oi ueuication of these piojects to uiaw public attention to the viability
anu cuiient availability of solai, winu, geotheimal anu biomass eneigy piouuction.

2. A[=%1:+% 1%D%$'=3%*+ '* =9#$:. $"*1,4 Continue encouiaging anu assisting B0I to
expeuite the uevelopment of ienewable eneigy piojects on suitable public lanus.

O'"$ G> 7*.8%",% )'$$"#'8"+:'* 0:+< S+"+%,_ W'."$:+:%, "*1 V+:$:+:%,

As noteu in Chaptei 1, Executive 0iuei 1SS14, uiiects feueial agencies to help theii host
communities achieve sustainable uevelopment goals, incluuing clean eneigy.
Analyses by numeious piivate sectoi oiganizations also iecognize the impoitance of
inteigoveinmental collaboiation. Eneigy efficiency anu ienewable eneigy policies at the
state level aie making majoi contiibutions to piogiess on ieaching the Piesiuent's goal foi
a 17% ieuuction in gieenhouse gas emissions by 2u2u.

A[%.9+:D% -.+:'*,>

1. Q'8/ 0:+< S+"+% !8%",98%8, anu othei state anu local authoiities that want to
establish public-piivate eneigy investment paitneiships to capitalize them in pait with
existing feueial giant funus.
2S

2. Q'8/ 0:+< $'."$ 2'D%8*3%*+, +' 8%3'D% (9*1:*2 #"88:%8,4 Biiect B0E, B0B, 0SBA,
the Small Business Auministiation (SBA), EPA anu the Bepaitment of Tianspoitation
(B0T) to woik with state anu local authoiities, incluuing economic uevelopment
officeis, to iuentify anu iemove baiiieis to full utilization of feueial financing piogiams
foi which clean eneigy piogiams aie eligible.

S. !8:=$% +%.<*:."$ ",,:,+"*.% +' ,+"+%,. Biiect B0E to leau a multi-agency task foice to
plan how the Feueial uoveinment will tiiple technical assistance available to states foi
Poweiing Foiwaiu
Su
using feueial giants anu financing piogiams to inciease eneigy piouuctivity, ieuuce
gieenhouse gas emissions, inciease the use of ienewable eneigy, anu impiove theii
ability to withstanu the impacts of climate change.
24

4. \%$= <',+ .'339*:+:%,4 Reaffiim the iequiiement in Executive 0iuei 1SS14 that
feueial agencies help stiengthen the "vitality anu livability" of theii host communities.
Nake cleai that this iequiiement applies not only to line agencies, but also to militaiy
installations anu PNAs. Specify that these potential collaboiations can incluue feueial-
state-local powei puichasing agieements anu joint effoits between cities anu militaiy
installations to impiove local eneigy secuiity with uistiibuteu geneiation, micio giius
anu ienewable eneigy technologies.

S. I"8/%+ (%1%8"$ (9*1:*24 Biiect the Feueial Executive Boaius in each iegion to actively
maiket feueial giant, financing anu technical assistance piogiams ielateu to eneigy
efficiency anu ienewable eneigy anu to seive as iegional cleaiinghouses foi states to
access those piogiams.

6. A*.'98"2% ,+"+%, +' $%D%8"2% (9*1,4 Biiect B0E to eaimaik a poition of foimula
giants in the State Eneigy Piogiam foi states to iuentify how they will leveiage the
iesouices of othei state anu feueial giant anu financing piogiams, as well as piivate
capital, foi ienewable eneigy uevelopment.

7. C9,< ('8 =8'28%,,4 Foimally establish the Piesiuent's climate action goal of 4u
gigawatts of new uistiibuteu solai capacity by 2u2u. Biiect the Bepaitment of the
Tieasuiy (Tieasuiy), the Bepaitment of Commeice (B0C), B0E, 0SBA anu EPA to
pioviue policy anu technical assistance to states to piomote investments in uistiibuteu
solai eneigy. Biiect the agencies to convene a national uialogue with ongoing iegional
woikshops that encouiage the auoption of best-piactice policies such as net meteiing,
inteiconnection stanuaius, anu thiiu-paity owneiship of solai eneigy systems. Also
covei how to oveicome baiiieis to investment, the benefits of uistiibuteu solai eneigy,
anu existing feueial financial incentives that suppoit uistiibuteu eneigy piojects.

8. \%$= 1%(:*% +<% D"$9% '( ,'$"8 bR`Sc4 Biiect the Secietaiy of Eneigy to have B0E's
0ffice of Eneigy Efficiency anu Renewable Eneigy (EERE) monitoi anu offei technical
assistance to the state of Ninnesota as it uefines the "value of Solai" (v0S) in
compliance with iecent state legislation. Ninnesota's uefinition of v0S coulu become a
mouel foi P0Cs anu othei legislatuies. Encouiage the state to uefine v0S to incluue the
full life-cycle benefits of solai eneigy incluuing not only economic uevelopment anu
new jobs, but also impiovements in aii quality, climate iisk management, the ability of
solai electiic technologies to shave peak costs, anu the potential to ieuuce the costs of
builuing anu maintaining tiansmission infiastiuctuie when solai is useu in uistiibuteu
applications.

Poweiing Foiwaiu
S1
O'"$ M> I"[:3:]% +<% C'0%8 '( F%1%8"$ C8'.98%3%*+

As Ameiica's laigest eneigy consumei
2S
, the Feueial uoveinment can be an impoitant
foice foi maiket tiansfoimation to clean anu ienewable eneigy iesouices, leauing to
stanuaiuizeu contiacts anu useful uata on pioject peifoimance. In auuition, by incieasing
the tianspaiency anu piomotion of what the Auministiation is accomplishing, the
Piesiuent can position the Feueial uoveinment as leauing iathei than manuating the
0niteu States to a clean eneigy economy.

The Piesiuent cleaily appieciates the powei of the puise anu alieauy has taken a numbei
of steps to move his Auministiation into this leaueiship position, foi example, with the
goals establisheu by Executive 0iuei 1SS14 anu his Climate Action Plan. Be has uiiecteu
agencies to ieuuce theii eneigy intensity Su% by 2u1S compaieu to 2uuS; to obtain 2u% of
theii electiicity fiom ienewable iesouices by 2u2u; to ieuuce potable watei use intensity
26% by 2u2u compaieu to 2uu7; anu to cut electiicity-ielateu gieenhouse gas emissions
28% by 2u2u compaieu to 2uu8. Piesiuent 0bama issueu a memoianuum in Becembei
2u11, uiiecting agencies to execute $2 billion in Eneigy Saving Peifoimance Contiacts
(ESPCs) ovei two yeais.

As the Piesiuent knows, BoB piesents an especially impoitant oppoitunity foi the Feueial
uoveinment to inciease its eneigy efficiency anu use of uistiibuteu ienewable eneigy. BoB
is the Feueial uoveinment's biggest eneigy consumei anu, by some estimates is the laigest
single institutional eneigy consumei in the woilu. It has the powei to cieate anu shape
maikets with its piocuiement piactices.

A[%.9+:D% -.+:'*,>

1. O' #%B'*1 +<% *'834 Amenu E0 1SS14 to encouiage agencies to go beyonu tiauitional
eneigy piouuctivity measuies to incluue uistiibuteu geneiation, CBP, the uevelopment
of micio-giius, caieful consiueiation of the ielationship between eneigy anu watei
consumption, anu cieative ways to unleash piivate capital investments in clean eneigy.

2. W"B +<% 28'9*10'8/ ('8 1:,+8:#9+%1 %*%82B :* (%1%8"$ #9:$1:*2,4 E0 1SS14 iequiies
feueial agencies to align theii policies "to inciease the effectiveness of local planning foi
eneigy choices such as locally geneiateu ienewable eneigy" anu beginning in 2u2u to
ensuie that "all new feueial builuings that entei the planning piocess aie uesigneu to
achieve zeio-net-eneigy by 2uSu." Amenu the executive oiuei to iequiie that by 2u2u,
all feueial builuings will be evaluateu foi theii uistiibuteu eneigy geneiation (BEu)
potential anu wheie cost effective anu technically feasible, agencies will use thiiu-paity
financing to equip existing feueial builuings foi BEu. Fuithei amenu the oiuei to
iequiie that by 2u2u all new feueial builuings will be uesigneu to utilize uistiibuteu
ienewable eneigy systems as well as to achieve zeio-net-eneigy
26
.

S. ?%(%*1 ?'?@, %*%82B '#^%.+:D%,4 To bettei uefenu congiessional attacks against BoB's
commitment to clean eneigy, issue an Executive 0iuei claiifying that on militaiy
Poweiing Foiwaiu
S2
facilities anu in associateu housing, the puichase of electiicity fiom uistiibuteu,
ieuunuant, ienewable eneigy systems iequiiing no ueliveiy oi stockpiling of fossil
fuels, pioviues an "unusual stanuaiu foi seivice ieliability necessaiy foi puiposes of
national uefense" unuei Public Law 1uu - 2u2.

4. )$%"8 "0"B #"88:%8, +' .$%"* %*%82B 1%=$'B3%*+ :* +<% 3:$:+"8B. Foi example:

a) Befine anu communicate best thiiu-paity financing piactices at BoB: The eneigy
piouuctivity white papei CNEE submitteu to the White Bouse iuentifieu seveial
pioblems in the Feueial uoveinment's use of ESPCs anu 0ESCs. A iepoit by the
uoveinment Accountability 0ffice (uA0) in 2u12 inuicates that similai pioblems
have limiteu the use of thiiu paity financing at BoB. Biiect the Secietaiy of Befense
to iepoit on the status of its compliance with uA0's iecommenuation to "issue
compiehensive guiuance to ensuie key analyses aie completeu anu available
financing appioaches aie fully consiueieu," anu that BoB "uevelop a foimalizeu
communications piocess to shaie best piactices on financing ienewable eneigy
piojects among installations."
27

b) Set ambitious goals foi ienewable eneigy ESPCs4 Issue a piesiuential memoianuum
to the Secietaiy of Befense, setting aggiessive goals foi BoB's use of ESPCs anu
0ESCs to finance ienewable eneigy piojects at no cost to taxpayeis anu without
auuing to the feueial buuget ueficit.

c) Claiify on-baseoff-base powei possibilities. Biiect the Secietaiy of Befense to
claiify anu pioviue guiuance on the electiic powei aiiangements militaiy bases can
use to achieve theii ienewable eneigy taigets, incluuing puichasing powei fiom
neaiby civilian ienewable eneigy systems, selling powei to neaiby communities
fiom on-base ienewable eneigy systems anu paiticipating in aggiegateu civilian-
militaiy oiueis foi ienewable eneigy fiom othei powei piouuceis.

O'"$ U> A*.'98"2% )'$$"#'8"+:'*, #%+0%%* +<% N"+98"$ O", "*1
H%*%0"#$% A*%82B 7*19,+8:%,

Abunuant supplies of inexpensive natuial gas aie competing with ienewable eneigy
technologies anu slowing theii maiket penetiation. Bowevei, NREL has stuuieu potential
syneigies between the natuial gas anu ienewable eneigy inuustiies in the electiic powei
anu tianspoitation sectois.
28
NREL concluues:

Portnersbips between tbe noturol qos onJ renewoble enerqy inJustries bove not
bistoricolly been o source of siqnificont Jioloque, yet toJoy tbere ore mony
opportunities for tbe two inJustries onJ otber enerqy stokebolJers to jointly Jevelop
vibront onJ robust bubs of inteqroteJ reseorcb onJ Jevelopment, informotion
excbonqe, plonninq, onJ policymokinq. Tbe first step in reocbinq tbis qool is loyinq tbe
qrounJwork of open Jioloque onJ enqoqement in oll possible orenos in wbicb furtber
colloborotion miqbt qrow.
Poweiing Foiwaiu
SS
Among these oppoitunities, NREL says, aie:

Bybiiu applications that captuie the benefits anu minimize the uiawbacks of each
inuustiy. Examples incluue combinations of concentiating solai powei systems anu
gas-fiieu powei geneiation; natuial gas anu biogas co-fiiing of combineu cycle gas
tuibines; anu gas-poweieu compiesseu aii eneigy stoiage.
Collaboiation on electiicity maiket uesign anu iegulation incluuing joint tiansmission
planning.
Noie uialogue on the iole the two inuustiies might play togethei on implementing the
Piesiuent's eneigy goals anu policies.
A poitfolio appioach to R&B anu funuing.
}oint effoits to uispel myths about each othei's inuustiies anu iesouices. "Natuial gas
anu ienewable eneigy both expeiience enuuiing misinfoimation anu inaccuiate
poitiayals" about theii inuustiies, NREL says.
29

A[%.9+:D% -.+:'*,>

1. C",, +<% =%".% =:=%4 Convene leaueis in the two inuustiies at the White Bouse, along
with the goveinois of states with significant fossil anu ienewable eneigy iesouices, to
convey the Piesiuent's uesiie foi intei-sectoi collaboiation between the gas anu
ienewable eneigy inuustiies, wheie collaboiation is mutually beneficial. Incluue an
NREL biiefing on oppoitunities it has iuentifieu.
Su

2. A[%3=$:(B .'$$"#'8"+:'*4 Push FERC, the PNAs anu TvA to use theii iespective
authoiities anu netwoiks to encouiage collaboiation between the natuial gas anu
ienewable eneigy inuustiies.

O'"$ 6> 73=8'D% O'D%8*3%*+ I%+8:., '* I"8/%+_ e'# "*1 A.'*'3:.
73=".+,

Two issues have causeu contioveisy iecently iegaiuing Feueial uoveinment metiics
associateu with ienewable eneigy. The fiist is the accuiacy of the Eneigy Infoimation
Auministiation's pieuictions of ienewable eneigy's contiibution to the nation's eneigy mix
in the yeais aheau - moie specifically whethei the EIA has consistently unueiestimateu the
maiket penetiation of ienewables (see Figuies S & 4). The seconu is whethei the Buieau of
Laboi Statistics (BLS), which has stoppeu iepoiting on "gieen jobs" aftei being ciiticizeu by
Congiess, shoulu finu anothei way to iepoit on jobs ielateu to ienewable eneigy, eneigy
efficiency anu othei occupations that contiibute to enviionmental piotection, as it uoes
jobs in othei inuustiy sectois.
S1

These uata have some influence in the financial community's peiception of the ienewable
eneigy maiket. They also aie likely to have some influence in the peiceptions of the public,
policy-makeis anu othei stakeholueis.

Poweiing Foiwaiu
S4

F:298%, G Z M> Q:*1 "*1 =<'+'D'$+":. ,'$"8 3"8/%+ =%*%+8"+:'* (8'3 ELLE +' EL5L :*
2:2"0"++,_ .'3="8:*2 A7-@, 8%(%8%*.% .",% =8'^%.+:'*, :* :+, -**9"$ A*%82B `9+$''/
ELLL +' +<% +%.<*'$'2:%,@ ".+9"$ =%8('83"*.% #",%1 '* 1"+" (8'3 +<% -3%8:."* Q:*1
A*%82B -,,'.:"+:'* "*1 +<% S'$"8 A*%82B 7*19,+8:%, -,,'.:"+:'*4
b-1"=+%1 (8'3 I%:,+%8 )'*,9$+"*+, O8'9=_ EL5Gf HANE5_ EL5Gc

Poweiing Foiwaiu
SS
A[%.9+:D% -.+:'*,>

1. F:[ PWS I%+<'1'$'2B4 Biiect the CEQ, the SBA anu the 0NB to ieview how BLS has
uefineu anu calculateu "gieen jobs" in the 0.S. economy anu to iecommenu a
methouology that auuiesses ieal oi peiceiveu shoitcomings iaiseu by membeis of
Congiess anu some piivate-sectoi ieseaich institutions.

2. H%='8+ 8%*%0"#$% %*%82B ^'#,. Baseu on these iecommenuations, uiiect BLS to
iesume iepoiting jobs attiibuteu to the piouuction, sale, installation anu seivicing of
ienewable eneigy anu eneigy efficiency technologies.

S. `#+":* #%++%8 .8B,+"$ #"$$,. Biiect B0E, thiough NREL, to evaluate the moueling
methouology useu by vaiious expeit oiganizations in acauemia anu the piivate sectoi
anu to compaie theii piojections of futuie ienewable eneigy maiket penetiation with
those geneiateu by the EIA. Beteimine whethei any of the piivate sectoi methouologies
have pioveu to be consistently moie accuiate. If so, iecommenu mouifications in EIA's
moueling.
S2
Also ueteimine whethei EIA's piojections woulu be likely to impiove if it
baseu them on the iapiuly falling piices of a numbei of the technologies.
SS

O'"$ ;> A*.'98"2% H%*%0"#$% A*%82B V,% :* +<% )'33%8.:"$ "*1
7*,+:+9+:'*"$ S%.+'8,

Piivate builuings such as office spaces anu malls have huge potential foi ienewable eneigy
upgiaues. Bowevei, commeicial builuings have unique maiket baiiieis that complicate
otheiwise effective financing tools such as eneigy-saving peifoimance contiacts
(ESPCs0ESCs)
S4
anu othei financing mechanisms. Foi example, commeicial lenueis aie
conceineu with who will take on iepayment of uebt if a builuing can be solu in the miuule
of an upgiaue.

A[%.9+:D% -.+:'*,>

1. )8%"+% " .'33%8.:"$ 8%+8'(:+ =8'28"34 0iuei 0NB to ieview all loan guaiantee
authoiities within Tieasuiy, B0E, 0SBA anu othei agencies to ueteimine the amount of
funuing available to cieate, within existing authoiities thiough iulemaking, a piivate
commeicial builuing ienewable eneigy ietiofit loan guaiantee piogiam with a loan loss
ieseive funu that will back up cieuit iisk but not peifoimance iisk.

2. \%$= ,+"+%, 0:+< :*,+:+9+:'*"$ ASC),. Biiect B0E to woik with states to launch ESPC
piogiams that incluue ienewable eneigy systems foi municipal, univeisity, state anu
hospital maikets (known as N0SB in the ESC0 inuustiy).
SS

S. W'."+% %*%82B :*+%*,:D% (".:$:+:%, *%"8 8%*%0"#$% %*%82B ",,%+,. Biiect B0E to
launch a piogiam that encouiages eneigy-intensive inuustiies anu coipoiations to
locate wheie theie aie substantial ienewable eneigy iesouices anu to maximize theii
Poweiing Foiwaiu
S6
use of ienewable powei. Pioviue eneigy-intensive facilities with technical assistance on
methous foi impioving theii eneigy piouuctivity, using combineu heat anu powei, anu
using uistiibuteu geneiation.
S6
Biiect B0C anu SBA to help B0E maiket the piogiam
among companies. Biiect B0E to woik with EPA, B0T anu B0B to piomote ienewable
eneigy iesouices as economic uevelopment assets thiough the Paitneiship foi
Sustainable Communities.

O'"$ J> A19."+% +<% C9#$:. "*1 F:*"*.:"$ I"8/%+,

In 2u1u-2u11, the Inteinational Economic Bevelopment Council suiveyeu economic
uevelopment officials in 48 states to finu out how many weie actively ieciuiting ienewable
eneigy companies. The suivey founu that ienewable eneigy was giowing in its impoitance
to economic uevelopment in the states, that most states weie veiy active in taigeting
ienewable eneigy uevelopment, that a lack of investment capital anu financing weie the
leauing challenge to ienewable eneigy business giowth, anu that political leaueiship was
seen as the leauing asset in giowing ienewable eneigy businesses.

But is ienewable eneigy a factoi in wheie companies choose to locate. In 2u12, a suivey by
Aiea Bevelopment 0nline founu that eneigy availability anu costs weie among the top 1u
factois coipoiations consiuei in ueciuing wheie to locate. Anothei factoi was "gieen
eneigy." The suivey founu that:

Hore componies ore interesteJ in Jevelopinq o qreen footprint onJ usinq renewoble,
corbon-free enerqy for tbeir focilities. Fven tbouqb qreen enerqy con be on extro cost
foctor up front {for exomple, solor ponels on worebouse roofs in tbe Soutbwest), it Joes
eventuolly brinq rotes Jown onJ improves tbe componys imoqe. "Sometimes tbe
Jriver is not so mucb cost but qrowinq tbe volue of qreen in o componys bronJ," soys
}obn BoyJ, principol witb tbe BoyJ Compony in Princeton, New }ersey. "6reen brinqs
coveteJ sociol onJ public relotions volue, wbicb oppeols to tbe componys executive
suite onJ corporote,investor relotions Jeportment, beyonJ tbe site selection,reol
estote teom witb wbom we interoct."

In othei woius, states aie not only tiying to ieciuit ienewable eneigy companies;
companies aie tiying to finu ienewable eneigy communities. Feueial agencies conceineu
with business cieation anu economic uevelopment can legitimately piomote ienewable
eneigythe technologies, iesouices anu policiesas a business anu jobs ieciuitment
asset.

The tiansition to clean eneigy anu uiveise geneiation assets also iequiies a ie-euucation of
financieis anu investois who aie attiacteu to the giowing ienewable eneigy sectois. Theie
aie significant uiffeiences between powei piouuction fiom ienewable vs. conventional
eneigy iesouices. Nany of these uiffeiences aie impoitant to successful investment anu
financing.

An obvious uiffeience is that the capital iequiiements of most ienewable eneigy
Poweiing Foiwaiu
S7
technologies aie all on the fiont enu. Fuel anu opeiating costs uuiing the life of the
technologies aie viitually nothing. These uiffeiences will move utilities fuithei away fiom
uispatching electiic geneiation with fossil fuels anu towaiu geneiation with ienewable
iesouices. If feueial agencies, policy makeis, iegulatois anu investois assume they can
pioceeu with business as usual, the iesults likely woulu incluue unsuccessful piojects that
unueimine confiuence in ienewable powei geneiation.

Theie is a gieat ueal that goveinment agencies, iegulatois anu utilities neeu to claiify foi
themselves about the uisiuptive uetails of uealing with uistiibuteu geneiation anu
ienewable fuelsuetails such as what constitutes avoiueu costs, anu how to bettei
inteinalize the ielative benefits anu costs of fossil fuels anu ienewables to accuiately
iuentify least-cost options foi ueliveiing powei to customeis.

A[%.9+:D% -.+:'*,>

1. C8'3'+% 8%*%0"#$% %*%82B ", "* %.'*'3:. 1%D%$'=3%*+ ",,%+4 Biiect feueial
economic anu business uevelopment agencies to gathei auuitional eviuence about the
value of ienewable eneigy systems anu policies foi state anu local economic
uevelopment anu to communicate the eviuence to state anu city economic uevelopment
officials.

2. \%$= (:*"*.:%8, 9*1%8,+"*1 8%*%0"#$% %*%82B +%.<*'$'2:%,: 0se the Piesiuent's
convening powei to biing iegulatois, powei piouuceis anu financieis togethei as often
as necessaiy to euucate one anothei about the uiffeiences between tiauitional anu new
ways of geneiating, uispatching, leveling, tiansmitting anu uistiibuting powei fiom
ienewable iesouices.

S. P% =8'".+:D% :* =8'3'+:*2 ?À@, $'"* =8'28"3, ('8 8%*%0"#$% %*%82B #9,:*%,,
.8%"+:'*4 Recast anu contiol the message about B0E's eneigy technology loan
piogiams. Aftei Solynuia, opponents of feueial clean eneigy financing contiolleu the
message, anu the message was bau: The 0bama Auministiation was tiying to auvance
the Piesiuent's clean eneigy agenua by "picking winneis," ciitics saiu, anu taxpayeis
weie the loseis. The ieal stoiy is fai uiffeient. B0E's 17uS anu 17uS loan anu loan
guaiantee piogiams weie cieateu by Congiess to suppoit companies engageu in
ueveloping new anu innovative eneigy technologies. New anu innovative technologies
involve iisk. Recognizing that, Congiess set asiue neaily $1u billion foi a "loan loss
ieseive." As of }uly 2u1S, the piogiams hau attiacteu moie than $21 billion in piivate
sectoi investment. Losses amounteu to only about 2% of $SS billion closeu anu
committeu loans. In 2u11, the piogiams constituteu the nation's laigest single public oi
piivate souice of uebt financing foi clean eneigy.
S7

O'"$ K> S+:39$"+% +<% ?%D%$'=3%*+ '( `((,<'8% Q:*1
S8

The Atlantic coast offshoie winu iesouice iepiesents the most significant uevelopable
ienewable eneigy iesouice foi East Coast states. B0I estimates that offshoie Atlantic winu
Poweiing Foiwaiu
S8
contains 1,uuu gigawatts of eneigy if fully uevelopeu, about equal to the 0niteu States' total
geneiating capacity touay.

Compaieu to lanu-baseu winu, Atlantic offshoie winu has the capacity foi moie eneigy, is
closei to loau centeis, anu has a piouuction pattein that bettei matches the loau piofile.
Consequently, Atlantic offshoie winu eneigy has the potential to ieuuce peak anu
congestion piices on the East Coast. Impoitantly, offshoie winu is the only iesouice with
which the Atlantic states can meet theii ienewable eneigy poitfolio stanuaius anu
significantly move the iegion towaiu a iobust clean eneigy economy.

Bowevei, offshoie winu has hau a slow stait in the 0niteu States, uue in most pait to the
costs of 'fiist of its kinu' piojects anu the nascent inuustiy. Acceleiating the uevelopment
of offshoie winu iesouice uepenus on ieuucing the ueliveieu cost of its eneigy to
iatepayeis, incieasing feueial paiticipation in ieuucing that cost, anu in state-feueial anu
state-state puichasing collaboiations.

Accomplishing this will iequiie high-level leaueiship fiom the Executive Bianch. Buiing its
fiist teim, the 0bama Auministiation maue a numbei of impoitant contiibutions to
acceleiating offshoie winu: B0E's Notionol 0ffsbore WinJ Stroteqy iuentifieu bioau
ueployment goals baseu on iesouice estimates anu kick-staiteu R&B effoits to ieuuce the
cost of offshoie winu. B0I empanelleu Atlantic goveinois anu enteieu into a Nemoianuum
of 0nueistanuing with the states to auuiess multiple siting anu peimitting issues. This
iesulteu in Smort from tbe Stort, an initiative that uesignateu "winu eneigy aieas" anu
maue piogiess in ieuucing peimitting timelines.

Theie is a continueu neeu foi leaueiship fiom the Feueial uoveinment on the most
impoitant issues facing offshoie winu touay: financing anu cost. Theie is also a ciitical neeu
foi feueial leaueiship to ie-engage anu suppoit Atlantic goveinois in state-feueial anu
state-state collaboiation on these issues.

A[%.9+:D% -.+:'*,>

1. H%D:+"$:]% +<% -+$"*+:. `((,<'8% Q:*1 7*+%8"2%*.B Q'8/:*2 O8'9=. Past
paiticipants tell CNEE that the gioup hasn't been active foi some time.

2. )'*+:*9% !"#$% '$(" %)* !%#$%4 Biiect Inteiioi Secietaiy Sally }ewel to assess piogiess
on the Smort from tbe Stort initiative anu ievive the initiative if necessaiy.

S. a9"*+:(B "$$ #%*%(:+, '( '((,<'8% 0:*1 ('8 9,% :* (%1%8"$ =8'.98%3%*+ 1%.:,:'*,4
Biiect BoB anu the uSA in conceit with EPA to analyze the benefits of offshoie winu
powei to the feueial goveinment, incluuing social, enviionmental anu economic
benefits

4. H%D:%0 "*1 :3=8'D% =8'.98%3%*+ ='$:.:%,. Biiect BoB, uSA anu B0E (FENP) to
evaluate theii piocuiement authoiity anu piactices anu to implement changes,
Poweiing Foiwaiu
S9
incluuing quantifieu benefits, that allow long-teim powei puichasing agieements foi
offshoie winu eneigy.

S. A,+"#$:,< 1%=$'B3%*+ 2'"$,. B0E is cuiiently ievising ueployment goals foi offshoie
winu. While not yet publisheu, the uiaft goals aie iepoiteuly 2uW - 4uW by 2u2u;
2uuW - 4u uW by 2uSu; anu 1uuuW- 1SuuW by 2uSu. Confiim that these goals aie
iealistic anu incoipoiate them into the Piesiuent's Climate Action Plan.

6. 7*.8%",% +<% 3"8/%+ 0:+< :*+%82'D%8*3%*+"$ =8'.98%3%*+. 0se feueial-state anu
encouiage state-state piocuiement of offshoie winu to help cieate a laigei maiket.
S9

7. \%$= 8%19.% +<% .',+ '( ."=:+"$. Empanel an 0ffshoie Winu Financing Task Foice leu
by Secietaiies of Eneigy anu Tieasuiy anu assign it to iecommenu feueial, state anu
piivate sectoi actions to iemove financial baiiieis to offshoie winu uevelopment.
Incluue iepiesentation fiom 0NB anu BoB anu instiuct the Task Foice to seek
iecommenuations fiom Atlantic goveinois, financieis anu investois.

8. A3=<",:]% '((,<'8% 0:*1 :* (:*"*.:*2 "*1 28"*+ =8'28"3,. Biiect the Secietaiy of
Eneigy to give stiongei emphasis to offshoie winu technology in futuie iounus of B0E
technology giants anu applicable feueial financing piogiams.

9. S+8%"3$:*% 1:,=9+% 8%,'$9+:'*. Empowei the Buieau of 0cean Eneigy Nanagement
(B0EN) to iesolve competing use uisputes quickly to stieamline piocess foi
uesignating winu eneigy aieas.

1u. -D':1 %[.%,,:D% *"D:2"+:'* .$":3,. Biiect the Secietaiy of Bomelanu Secuiity to
ensuie that the Coast uuaiu's Poit Access Route Stuuy (PARS) pioject guaius against
excessive claims to exclusive use of 0utei Continental Shelf aieas foi navigation when
those claims piohibit offshoie winu uevelopment.

11. 73=8'D% +<% "9.+:'* =8'.%,,. Biiect the Secietaiy of Inteiioi to iesolve the
uisconnect between the cash-baseu biuuing foi feueial lease iights anu fact that some
piojects iequiie significant feueial anu state goveinment suppoit. Resolve issues
involving ieseive piices, opeiating fee iates (they have been ieuuceu to 2% but aie still
too high), anu the foimula foi estimating the powei ievenues that aie useu to compute
opeiating fees.

12. S<'8+%* =%83:++:*2 +:3%. Revive the intei-agency task foice anu auu high-level
iepiesentation to bettei cooiuinate peimits anu appiovals at the feueial level.

1S. \%$= %[=%1:+% :*+%82'D%8*3%*+"$ +",/,. Ensuie high-level iepiesentation fiom the
Feueial uoveinment to help expeuite feueial-state cooiuination on inteigoveinmental
issues (e.g. B0EN woiking with state coastal planning anu histoiic pieseivation officials
anu with state's leau enviionmental ieview agencies).

Poweiing Foiwaiu
6u
14. 73=8'D% 0:$1$:(% 1"+". Inciease investment in feueial anu feueial-state baseline uata
collection iegaiuing avian anu maiine mammal activities in potential winu
uevelopment aieas.

1S. )'339*:."+% +<% F%1%8"$ O'D%8*3%*+@, ,9=='8+ ('8 '((,<'8% 0:*1 +' +<%
H%2:'*"$ !8"*,3:,,:'* `82"*:]"+:'* bH!`c4 Biiect the Secietaiy of Eneigy to
.ommunicate to P}Nthe RT0 that cooiuinates the movement of wholesale electiicity
in all oi paits of 1S states anu the Bistiict of Columbiathe feueial goveinment's
suppoit foi planning high-capacity offshoie tiansmission systems that use auvanceu
tiansmission technology to ieuuce the cost of ueliveiing offshoie winu eneigy.

F%1%8"$ -2%*.B -.+:'*,

A[%.9+:D% `((:.% '( +<% C8%,:1%*+g`((:.% '( +<% O%*%8"$ )'9*,%$

1. )$"8:(B %[%.9+:D% "9+<'8:+B +' "$+%8 +"[ ='$:.B. Biiect the ueneial Counsel to pioviue
his oi hei opinion on the Piesiuent's legal authoiities to make oi altei tax policy. (See
iecommenuations unuei the Bepaitment of the Tieasuiy, below.)

?%="8+3%*+ '( -28:.9$+98%

1. )'*+:*9% 1%D%$'=:*2 VS?-@, %(('8+ +' 3'#:$:]% " *93#%8 '( (%1%8"$ 898"$
1%D%$'=3%*+ =8'28"3, +' =8'3'+% (:*"*.:*2 ('8 898"$ 8%*%0"#$% %*%82B
1%D%$'=3%*+4 In }une 2u1S, 0SBA announceu that it woulu piopose a iule to expanu
its ienewable eneigy anu pioject financing piogiams to help stiengthen the iuial
economy "uespite a time of significant buuget unceitainty." The announcement was
eviuence of 0SBA's unueistanuing of how ienewable eneigy piouuction can become a
poweiful uiivei of economic piospeiity in iuial Ameiica.

2. V,% +<% A*%82B A((:.:%*.B "*1 )'*,%8D"+:'* C8'28"3 +' $%D%8"2% HA ='$:.:%,4
0SBA is woiking on a iule to pioviue up to $2Su million annually in loans anu loan
guaiantees to iuial electiic utilities anu theii customeis foi eneigy efficiency anu
ienewable eneigy piojects. Ruial Electiic Coopeiatives using these loans anu
guaiantees coulu be iequiieu to implement net eneigy meteiing anu inteiconnection
stanuaius that meet the iecommenuations of the Inteistate Renewable Eneigy Council's
Ireeinq tbe 6riJ iepoit anu peimit thiiu-paity owneiship of solai eneigy systems. The
Ruial 0tility Seivice, which will auministei the new loan piogiam, coulu uesignate a
payback peiiou that is ielateu to the expecteu lifetime of the measuie, ieuucing the
monthly cost to the consumei. Foi example, its loans coulu be baseu on a minimum
peiiou of 8u% of the expecteu life of the measuie with incentives foi eaily iepayment.
It shoulu encouiage on-bill iepayment mechanisms to facilitate collection anu
iepayment of the loan.

Poweiing Foiwaiu
61
?%="8+3%*+ '( A*%82B

1. -*"$B]% (%%1X:* +"8:((,4 Biiect NREL to stuuy the peifoimance of feeu-in taiiffs (FITs)
in the TvA anu to ueteimine if anu how FITs coulu be auopteu by the PNAs' utility
customeis, given legal constiaints in the Feueial Powei Act (FPA) anu P0RPA, as well as
iegulatoiy pieceuents.
4u

2. S%%/ " FAH) 89$:*2 '* "D':1%1 .',+,4 Petition FERC, on behalf of the 0.S. anu the
public inteiest, foi a iulemaking on the avoiueu cost of iesiuential customei-siteu loau
(e.g., solai photovoltaics) foi investoi owneu utilities (I00s). This piocess woulu allow
the best infoimation fiom states anu the Feueial uoveinment to be piopeily evaluateu
foi the puiposes of avoiueu cost. This piocess coulu ieuuce state-by-state conflicts ovei
net eneigy meteiing.

S. 7*('83 ,+"+% =8'.%%1:*2,4 Fully stuuy the value of uistiibuteu ienewable eneigy on
the giiu, incluuing

C02 emission ieuuctions; public health benefits; tiansmission anu
uistiibution savings anu efficiencies; anu savings fiom foigone fuel puichases.
Affiimatively pioviue that uata at state-level pioceeuings whenevei the oppoitunity is
piesenteu.

4. AY9:= CI- ,+"/%<'$1%8, +' =8'3'+% 8%*%0"#$%,4 Woik with the Ameiican Public
Powei Association anu the National Ruial Electiic Coopeiative Association to pioviue
theii membeis with cuiient infoimation on financial incentives anu the benefits of
uistiibuteu ienewable eneigy geneiation; solai maiket uevelopment; net eneigy
meteiing; inteiconnection stanuaius anu peimission foi thiiu-paity owneiship of solai
eneigy systems.

S. V,% 3'8% +<:81 ="8+B (:*"*.:*2 ('8 (%1%8"$ "2%*.:%,4 Biiect the FENP to assess the
use of ESPC, 0ESC anu on-site powei puichasing agieements by feueial agencies foi
ienewable eneigy systems. Biiect the NREL to iepoit on the use of its technical
assistance seivices foi feueial agencies inteiesteu in implementing PPA piojects. Biiect
FENP anu NREL to make iecommenuations on how to impiove the use of these tools by
feueial agencies.

6. 7,,9% +%.<*'$'2B 9=1"+%,4 To bettei infoim investois, policy makeis anu finance
piogiam manageis, issue iegulai technology upuates on the ieliability anu cost-
effectiveness of new ienewable eneigy technologies. Foi example, evaluate anu
iecommenu whethei home stoiage foi ienewable eneigy systems is cost-effective anu
finance-ieauy.

7. 7*.8%",% 2%'X%19."+:'*4 Impiove public awaieness of anu euucation about the costs,
benefits anu financing options foi geotheimal heating pump systems (uBP). Inuustiy
analysts iepoit that ieal estate appiaiseis have uifficulty ueteimining the "contiibutoiy
value" of ienewable eneigy systems such as uBP if they aie not in common use. In
auuition, homebuyeis who aie unfamiliai with a ienewable eneigy technology aie less
Poweiing Foiwaiu
62
inclineu to puichase homes that featuie it. Although uBP is a goou eneigy option in
most aieas of the 0niteu States, it has not achieveu sufficient maiket penetiation foi
iealtois to ueteimine compaiable sales in neaiby builuings. Bowevei, uBP, like solai
electiic technologies, significantly ieuuces a builuing's opeiating costs.
41
The Lawience
Beikeley National Laboiatoiy (LBNL) stuuy citeu above inuicates lowei eneigy bills aie
a significant factoi in incieasing a builuing's value anu maiket appeal.
42
In auuition,
euucate communities anu eneigy seivice companies about uBP, with the goal of
piouucing moie community-scale systems that lowei costs thiough economies of
scale
4S
anu moie ESC0s willing to engage in shaieu-savings contiacts.

8. V,% C'0%8 C98.<",:*2 -28%%3%*+,4 Encouiage collaboiations anu joint effoits
incluuing feueial, state anu local powei puichasing agieements between cities anu
militaiy installations to impiove local eneigy secuiity with uistiibuteu geneiation,
micio giius, anu othei technologies (Bates, 1S).

9. -$:2* 9+:$:+B 8"+%, '( 8%+98* 0:+< .$%"* %*%82B =8:'8:+:%,4 Bevelop guiuelines foi the
use of the feueial PNAs anu state P0Cs on peifoimance-baseu utility iatemaking that
aligns utility compensation with changing societal piioiities, as well as state anu feueial
clean eneigy policies. Also, uevelop mouel legislation in consultation with the National
Confeience of State Legislatuies (NCSL) anu the National Association of Regulatoiy
0tility Commissioneis (NAR0C) to allow utilities to iate-base iesouices that aie
consistent with state anu feueial clean eneigy policies, pioviuing the costs aie
ieasonable. Such peifoimance-baseu iegulation can uiaw on best piactices establisheu
in Califoinia, Naiylanu anu 0klahoma.

1u. )'$$"#'8"+% '* 8:,/ 3"*"2%3%*+ 0:+< +<% ?%="8+3%*+ '( \'3%$"*1 S%.98:+B
b?\Sc "*1 FAI-. As pait of the National Nitigation Fiamewoik, conuuct ongoing
assessments of iisks to the nation's powei systems anu auvise FENA of the iisk-
management benefits of uistiibuteu eneigy systems, at builuing anu community scale,
non-inteiiuptible ienewable electiic technologies anu ienewable electiic equipment foi
fiist iesponueis, watei puiification, hospitals anu othei emeigency seivices. Also
auvise FENA on the cost anu post-uisastei ieliability uiffeiences between uiesel
geneiatois anu solai photovoltaics.

11. Q'8/ 0:+< ?'? +' :*.8%",% .''81:*"+:'* #%+0%%* 3:$:+"8B :*,+"$$"+:'*,_ '+<%8
(%1%8"$ (".:$:+:%, "*1 $'."$:+:%, 0:+< ,:3:$"8 .$%"* %*%82B 2'"$,4 Woik with localities
to establish micio-giius, accommouate electiic vehicle fleets, anu bunule powei
puichases. Woik with the B0I anu BoB to cooiuinate ienewable eneigy powei
piouuction anu tiansmission on feueial lanus with neaiby militaiy bases anu othei
feueial installations.

12. -, 8%.'33%*1%1 :* )<"=+%8 5 '* %*%82B %((:.:%*.B_ +8:=$% +%.<*:."$ ",,:,+"*.% +'
,+"+%,_ $'."$:+:%, "*1 9+:$:+:%,4

a) Biiect National Laboiatoiies to give high piioiity to theii state anu local assistance
piogiams as the labs allocate iesouices. Cieate moie piogiams like NREL's
Poweiing Foiwaiu
6S
Technical Assistance Piogiam, which taps expeits fiom thiee national labs to help
communities with shoit-teim technical assistance. 0se "tigei teams" - teams of
expeits who can be ueployeu to states, localities, utilities anu inuustiies to help
them uesign anu implement ienewable eneigy piogiams.

b) Belp states quantify the gieenhouse gas emission ieuuctions, economic benefits anu
contiibutions to state eneigy piouuctivity anu ienewable eneigy goals that will
iesult fiom theii State Eneigy Plans.

c) Stiengthen B0E's expeitise in maiket penetiation by assigning a senioi specialist in
technology ueployment anu technology ueployment paitneiships to each of the
clean eneigy piogiams in EERE.

1S. A3=<",:]% H:,/ I"*"2%3%*+4 Evaluate anu publicize the value of ienewable eneigy
anu uistiibuteu eneigy technologies in managing the iisks of climate change, eneigy
piice volatility anu eneigy supply uisiuptions.

14. O%+ +<% 0'81 '9+4 Naiket the Feueial uoveinment's eneigy-ielateu giant anu
financing piogiams moie actively. The }uly 2u1S uuiue to Feueial Finance Facilities foi
Clean Eneigy is a goou stait
44
, but B0E can uo moie to iaise the visibility of these
oppoitunities anu to link piojects with financing foi constituents acioss the countiy.

1S. I"/% *%+X]%8' ,+"*1"81 =8".+:.%. Cieate moie maiket push anu pull foi net-zeio
eneigy builuings:

a) Piomote net-zeio eneigy anu caibon builuings as the accepteu goal of the builuing
inuustiy by maiketing the economic, enviionmental anu national secuiity benefits
of these builuings.

b) Ensuie that NREL, NIST anu the seveial states active in the fielu of net-zeio eneigy
builuings collaboiate on theii ieseaich, uevelopment anu ueployment effoits.

c) Conuuct anu publish a cuiient inventoiy of existing net-zeio builuings in the 0.S.,
along with best piactices anu lessons leaineu.

u) Pioviue technical assistance to help net-zeio eneigy piogiams succeeu - foi
example, Califoinia's plan to uevelop net-zeio stanuaius.

e) Bevelop thiee new mouel eneigy coues foi iesiuential anu commeicial builuings.
The fiist woulu achieve Su% moie eneigy efficiency than the cuiient Inteinational
Eneigy Conseivation Coue (IECC); the seconu woulu achieve 7S% moie efficiency;
anu the thiiu woulu achieve net-zeio eneigy peifoimance. Each mouel coue shoulu
inuicate the iole of ienewable eneigy technologies in appioaching net-zeio eneigy.
State anu local auoption of the new coues woulu be voluntaiy.

Poweiing Foiwaiu
64
16. A*2"2% S!A-P4 Stiengthen the iole of the State Eneigy Auvisoiy Boaiu (STEAB), the
oiganization cieateu by Congiess to seive as a liaison between states anu B0E on
eneigy efficiency anu ienewable eneigy issues, anu to uevelop iecommenuations foi
B0E anu Congiess on uesigning, implementing anu evaluating feueial eneigy efficiency
anu ienewable eneigy piogiams.

17. 73=8'D% SAC4 0puate anu impiove the State Eneigy Piogiam by:

a) Stiuctuiing its competitive giants to iewaiu states that cieate anu sustain
piogiessive ienewable eneigy policies, incluuing policies that encouiage piivate
capital investment in clean eneigy piojects. Examples incluue peifoimance
incentives anu uecoupling policies that piotect utilities fiom ievenue losses uue to
uistiibuteu eneigy piouuction; on-bill iepayment anu commeicial PACE financing
piogiams; anu ienewable eneigy peifoimance stanuaius.

b) Requiiing that state eneigy plans ieflect touay's most cost-effective anu emissions-
effective policies, piogiams anu technologies.

c) Naking gieenhouse gas ieuuctions anu auaptation to climate change specific
iequiiements in the State Eneigy Piogiam piogiam notice foi 2u14 anu beyonu.

u) Requiiing states to keep theii eneigy assuiance plans cuiient anu to ensuie that
vulneiabilities ielateu to climate change aie auuiesseu as they upuate the plans.

e) Encouiaging State Eneigy 0ffices to woik with State Tieasuieis to iuentify
ienewable eneigy finance stiategies that help meet state ienewable poitfolio
stanuaius anu othei similai policies.

18. A*.'98"2% .'$$"#'8"+:'* #%+0%%* +<% *"+98"$ 2", "*1 8%*%0"#$% %*%82B
:*19,+8:%,4

a) Biiect NREL to piouuce a iepoit that iuentifies, analyzes anu offeis lessons fiom
past effoits at collaboiation, both successful anu unsuccessful.

b) Encouiage hybiiu eneigy piojects thiough its loan, giant anu loan guaiantee
piogiams, wheie B0E has the uiscietion to uo so.

c) Instiuct ARPA-E to conuuct basic anu applieu ieseaich in hybiiu applications of
natuial gas, biogas, winu anu solai eneigy.

19. I"/% #9:$1:*2 $"#%$, 9*:('83 "*1 +%,+ #"++%8B ,+'8"2%4 Biiect FENP to:

a) Bevelop a unifoim labeling system foi all feueial builuings that make eneigy
efficiency anu ienewable eneigy impiovements. Iuentify eneigy, gieenhouse gas
emission anu taxpayei savings to help euucate citizens about the benefits of
specific eneigy efficiency measuies.
Poweiing Foiwaiu
6S
b) Woik with uSA anu BoB to pilot the use of stationaiy batteiy stoiage to integiate
highei levels of ienewable eneigy into the powei systems anu as a uemanu
iesponse measuie foi base loau electiic savings in auuition to peak shaving anu
eneigy emeigency mitigation. Test these uses of batteiy stoiage in clusteis as well
as inuiviuual feueial builuings.

2u. )8%"+% 9,%8X(8:%*1$B =8'28"3 "..%,,4 Establish anu maintain a one-stop web-baseu
uiiectoiy thiough which the public can easily leain about anu access all feueial
ienewable eneigy piogiams. 0iganize the site by type of eneigy consumei - i.e.
homeowneis anu ienteis, commeicial builuing owneis anu tenants, inuustiies, faims
anu ianches, communities, etc. Incluue piogiammatic infoimation as well as
infoimation on tax cieuits, giants, labeling anu euucational mateiials.

21. C8'D:1% O9:1"*.% '* A3%82%*.B C'0%8 ('8 S<%$+%8,: Woik with the Bepaitment of
Euucation to pioviue communities with guiuance on establishing on-site backup powei
anu up-to-uate eneigy efficiency technologies in all schools that aie uesignateu as
emeigency shelteis. Belp the schools become uemonstiation centeis foi eneigy
technologies that inciease theii iesilience against extieme weathei events anu pioviue
them with assistance in inteipieting the technologies foi stuuents, faculty anu visitois.

22. S+8%"3$:*% 1'.93%*+"+:'*4 Convene inuustiy stakeholueis to uevelop stanuaiu
stieamlineu uocumentation foi appiaiseis, engineeiing fiims, anu financieis to use foi
ienewable eneigy investments in iesiuential anu commeicial spaces.

2S. I"/% +<% ,'.:"$ "*1 %*D:8'*3%*+"$ .',+, '( %$%.+8:.:+B 3'8% +8"*,="8%*+. Conuuct
a uetaileu analysis of the full life-cycle costs of electiicity fiom solai anu winu systems
compaieu to coal anu natuial gas, incluuing the social costs of caibon. Incluue the
impact of each eneigy iesouice on ecological seivices anu potable watei supplies.

24. -118%,, +<% %*%82BX0"+%8 *%[9,4
MU
To help goveinment agencies anu the piivate
sectoi to make moie fully infoimeu financing anu investment uecisions, establish anu
suppoit a multi-agency piogiam to auuiess the eneigy-watei nexus, as iequiieu by the
Eneigy Policy Act of 2uuS anu iecommenueu by the uoveinment Accountability 0ffice
(uA0) in Septembei 2u12.
46
Instiuct B0E that the piogiam shoulu:

a) Builu on EPA's Eneigy-Watei Piinciples to piouuce a national action plan similai to
the one the Climate Auaptation Task Foice piouuceu.

b) Bevelop pioceuuies that factoi watei into eneigy policies anu investments. Stait
with the piemise that feueial agencies shoulu make watei conseivation anu quality
a key factoi in assessing the life-cycle costs anu benefits of eneigy supply anu
uemanu options.

c) Bevelop infoimation foi states anu localities. Beteimine the type of infoimation
states neeu to incoipoiate watei factois into sub-national eneigy policies,
Poweiing Foiwaiu
66
paiticulaily in aieas subject to giowing populations but ueclining oi stiesseu watei
iesouices.

u) Auvise agencies on new policies. Stiongly encouiage FERC to incoipoiate watei
intensity in wholesale avoiueu cost anu othei uockets.

e) Impiove uata anu ieseaich. Bevelop anu execute a plan to bettei unueistanu the
eneigy-watei ielationship. The uA0 noteu that "effective policy choices will
continue to be challenging without moie compiehensive uata anu ieseaich" to
bettei unueistanu hyuiological piocesses, aquifei iechaige iates anu giounuwatei
movement.

2S. O:D% :*D%,+'8, %.'*'3:. ",,%,,3%*+ +''$,: Biiect B0E to infoim the eneigy
investment community about the availability of EPA tools that states use to estimate
the economic benefits of eneigy efficiency anu ienewable eneigy piogiams.
47
These
tools can be helpful to investois anu financieis if EPA allows states to meet powei
plant emission taigets with eneigy efficiency anu ienewable eneigy piogiams. Section
111(u) woulu be a maiket uiivei; the EPA's tools will help investois evaluate pioject
benefits.

?%="8+3%*+ '( ?%(%*,% b?'?c

At last iepoit, 44 militaiy bases aie opeiating, planning oi uemonstiating miciogiius that
allow them to geneiate anu uistiibute eneigy inuepenuent of the civilian electiic giiu. BoB
iepoiteuly is investigating the use of small miciogiius at some of its 6uu foiwaiu opeiating
bases. Pike Reseaich (now ienameu as Navigant) foiecasts that the total capacity of 0.S.
militaiy miciogiius foi stationaiy bases coulu ieach neaily SS megawatts by 2u18.

1. S<"8% 3:.8'28:1 $%,,'*,4 0iuei militaiy bases equippeu with miciogiius to iepoit
annually on theii opeiation anu on lessons leaineu, anu to make the iepoits available to
the manageis of laige civilian installations, othei feueial agencies
48
anu municipalities
in the 0niteu States.

2. S<"8% *%+X]%8' $%,,'*,4 Requiie similai annual iepoits fiom militaiy bases involveu in
BoB's net-zeio piojects - i.e., 0.S. Aimy installations that have been instiucteu to
achieve net-zeio eneigy use, watei use anuoi waste
49
- anu make lessons leaineu
available to municipalities, othei feueial agencies, anu compaiable civilian installations.
The iepoits shoulu be uevelopeu in collaboiation with NREL, which has publisheu a
guiue to assessing anu planning net-zeio militaiy installations.

A*D:8'*3%*+"$ C8'+%.+:'* -2%*.B

1. )'".< +<% ,+"+%,4 Biiect EPA's Regional 0ffices to seive as "coaches" to help states
incoipoiate eneigy efficiency anu ienewable eneigy into SIPs anu Section 111(u) plans,
as well as New Souice Review anu Pievention of Significant Beteiioiation peimitting.
Poweiing Foiwaiu
67
Equip EPA's Regional 0ffices to help states calculate the economic as well as
enviionmental benefits of eneigy efficiency measuies in theii SIPs.

F%1%8"$ A3%82%*.B I"*"2%3%*+ -13:*:,+8"+:'*

1. 71%*+:(B 8%,:$:%*.% +<8'92< 8%*%0"#$%,4 Woik with B0E anu its National
Laboiatoiies to iuentify anu piomote ienewable eneigy technologies that stiengthen
the iesilience of communities anu infiastiuctuie, pievent oi shoiten eneigy
emeigencies, anu impiove the eneigy piouuctivity of communities as they iebuilu aftei
uisasteis. Incoipoiate eneigy piouuctivity anu ienewable eneigy technologies into
FENA's guiuelines, technical assistance, giant anu financing piogiams.

2. 7*.$91% 8%*%0"#$% %*%82B :* <"]"81 =$"*,4 Requiie that states anu cities auuiess the
iisk management benefits of ienewable eneigy in the Local Bazaiu Nitigation Plans
iequiieu by FENA.

S. A[=$'8% +<% 8'$% '( =$92 Z =$"B :* 1:,",+%8 8%,='*,% "*1 8%.'D%8B4 Beteimine
whethei plug anu play infoimation anu eneigy systems can help communities iestoie
vital functions moie quickly aftei uisasteis. Auvise communities as pait of theii uisastei
iesponse plans to piioiitize the iestoiation of uata systems, powei connections anu
othei functions - in othei woius, to iuentify which systems must be iestoieu fiist.

?%="8+3%*+ '( !8"*,='8+"+:'*

1. F9*1 AR .<"82:*2 ,+"+:'*,4 Woik with the Electiic Powei Reseaich Institute to bettei
unueistanu the impact of an electiic vehicle fleet anu infiastiuctuie on utilities anu
utility iegulation. Biiect the Feueial Bighway Auministiation (FBWA) anu the Feueial
Tiansit Auministiation (FTA) to piioiitize funuing fiom the Congestion Nitigation Aii
Quality Impiovement (CNAQ) Piogiam foi solai-poweieu electiic vehicle chaiging
stations in both nonattainment aieas anu states that have no nonattainment aieas but
aie still eligible foi funuing unuei the NAP-21 (Noving Aheau foi Piogiess in the 21st
Centuiy) Piogiam. Incoipoiate insights into utility anu iegulatoiy impacts into this
change.

?%="8+3%*+ '( \'3%$"*1 S%.98:+B

1. F:*1 (9*1:*2 ('8 8%*%0"#$% %*%82B "==$:."+:'*, :* %3%82%*.B ,%8D:.%, "*1
8%,:$:%*.% =8'28"3,4 Iuentify anu maiket giants anu technical assistance available
fiom the Feueial uoveinment foi oiganizations that uelivei fuel, electiicity, meuical
seivices anu sanctuaiy fiom the impacts of climate change. Examples incluue backup
ienewable powei systems to opeiate emeigency seivices, gasoline pumps at gas
stations, meuical facilities anu vital communications seivices, as well as eneigy
efficiency anu ienewable eneigy technologies that ieuuce losses to small businesses.

Poweiing Foiwaiu
68
2. 71%*+:(B %*%82B ,B,+%3 8:,/,4 Collaboiate with B0T anu B0E to iuentify anu piioiitize
iisks to the nation's eneigy system anu uevelop mouel policies anu best piactices to
help P0Cs anu electiic utilities pievent oi auapt to these iisks, incluuing climate
impacts.

S3"$$ P9,:*%,, -13:*:,+8"+:'*

1. A3=$'B 8%*%0"#$% %*%82B ,B,+%3, ('8 =8%="8%1*%,,4 Incoipoiate iisk-ieuucing
ienewable eneigy technologies foi uisastei mitigation anu iecoveiy in SBA's emeigency
piepaieuness mateiials foi small businesses. Incluue tiaining in peifoimance-baseu
eneigy efficiency piogiams such as IS0 Suuu1 anu ASBRAE Builuing Eneigy Quotient
(BEQ) labeling.

?%="8+3%*+ '( 7*+%8:'8gP98%"9 '( W"*1 I"*"2%3%*+

1. )<%./ '* hS3"8+ (8'3 +<% S+"8+i4 The Inteiioi Bepaitment issueu a memoianuum on
Feb. 7, 2u11, with new guiuance on how BLN shoulu ieview iight-of-way applications
foi solai anu winu piojects on BLN lanus. The guiuance iequiies that BLN woik with
state, tiibal anu local goveinments to iuentify potential negative impacts of piojects
befoie the pioject uevelopei submits its iight of way application. BLN shoulu check on
how this guiuance is being useu anu whethei it is having the uesiieu effect of saving
time anu avoiuing conflicts.

2. )''81:*"+% 8%*%0"#$% %*%82B =8'^%.+ ,:+:*24 Continue to cooiuinate with states anu
othei feueial agencies on siting anu peimitting utility-scale ienewable eneigy facilities
anu tiansmission piojects.

S. I%%+ +<% C8%,:1%*+@, '#^%.+:D% ('8 8%*%0"#$% %*%82B =8'19.+:'* '* =9#$:. $"*1,4
The Piesiuent's goal is to peimit 2u,uuu NW of ienewable eneigy piojects on public
lanus by 2u2u.

4. ?%,:2*"+% *%0 ,'$"8 "*1 0:*1 %*%82B ]'*%,4 Iuentify anu uesignate new solai anu
winu eneigy zones on public lanus, builuing on the westein solai plan anu the Aiizona
Restoiation Besign Eneigy Pioject.

S. O%+ +<% P98%"9 '( H%.$"3"+:'* :*D'$D%14 Leveiage Buieau of Reclamation iesouices
to piomote ienewable eneigy at scale- foi example, by ieplacing coal with ienewable
eneigy in powei plants anu by coveiing watei canals with photovoltaic aiiays.

6. ?%D%$'= ,=%.:%,X(8:%*1$B =%83:++:*24 Bevelop a fully functional iegulatoiy piogiam
at the Fish anu Wilulife Seivice to peimit winu piojects while pieseiving migiatoiy
biius anu othei avian species. In auuition complete the ueseit toitoise iecoveiy plan
chaptei foi solai eneigy anu the Califoinia Beseit Renewable Eneigy Conseivation
Plan.

Poweiing Foiwaiu
69
7. )'3=$%+% +<% ?8B W"/% 3:+:2"+:'* =8'^%.+4 Complete the Biy Lake mitigation pilot
anu ielateu upuates to BLN's mitigation manual to encouiage lanuscape-level
mitigation on public lanus foi the use of utility-scale piojects on piivate lanus.

7*1%=%*1%*+ -2%*.:%,

7*+%8*"$ H%D%*9% S%8D:.% b7HSc

1. -$$'0 8%*%0"#$% %*%82B :*D%,+'8, +' ('83 I",+%8 W:3:+%1 C"8+*%8,<:=,4
Beteimine whethei the IRS has the statutoiy authoiity to allow ienewable eneigy
investois to foim Nastei Limiteu Paitneiships. If so, issue a ievenue iuling to that
effect.
Su

2. I'*%+:]% +<% C!)4 Encouiage the 0ffice of Tax Policy to ueteimine if anu how the
Piouuction Tax Cieuit (PTC) can be monetizeu.
S1

S. A$:3:*"+% "3#:29:+B "*1 1%$"B, :* +"[ $"0,. Request that the IRS 0veisight Boaiu
S2

ieview the IRS's inteipietation anu implementation of tax laws ielateu to ienewable
eneigy iesouices, in iesponse to complaints that ambiguity anu uelays in its
implementation of ienewable eneigy anu eneigy efficiency tax piovisions uiscouiage
investment in these technologies.

S%.98:+:%, "*1 A[.<"*2% )'33:,,:'* bSA)c
UG

1. Inciease coipoiate iisk iepoiting. Biiect the Chaiiman of the SEC to annually assess anu
publicize a list of publicly tiaueu companies that fail to file yeaily iepoits on theii
climate iisks. A iecent analysis founu that 7S% of publicly tiaueu companies aie failing
to comply with SEC guiuance on climate iisk iepoiting. Fuithei uiiect the Chaiiman to
step up implementation of the guiuance by ietuining substanuaiu coipoiate iepoits to
be iewiitten anu by senuing letteis to those who fail to iepoit, infoiming them that the
public will be notifieu of theii failuie to comply.
S4

Poweiing Foiwaiu
7u
)<"=+%8 G> F:*"*.:*2 H%*%0"#$% A*%82B

The Piesiuent has maue ienewable eneigy a cential element in the tiansition to a clean
eneigy economy. Buiing the }une 2u1S speech in which he announceu his Climate Action
Plan, the Piesiuent saiu:

0ver tbe post four yeors, we've JoubleJ tbe electricity tbot we qenerote from zero-
corbon winJ onJ solor power. AnJ tbot meons jobs jobs monufocturinq tbe winJ
turbines tbot now qenerote enouqb electricity to power neorly 1S million bomes; jobs
instollinq tbe solor ponels tbot now qenerote more tbon four times tbe power ot less
cost tbon just o few yeors oqo. So tbe plon l'm onnouncinq toJoy will belp us Jouble
oqoin our enerqy from winJ onJ sun.

Among his ienewable eneigy uiiectives anu goals to uate, the Piesiuent has:

Pioposeu that by 2uSS, the 0niteu States will geneiate 8u% of its electiicity fiom clean
eneigy iesouices, incluuing winu, solai, biomass anu hyuiopowei.
1

Replace the "all of the above" eneigy policy with a "best of the above" policy by
ueteimining the full life-cycle costs of eneigy options to ieveal anu give highei
piioiity in feueial policy to those that offei the gieatest public benefit foi least
enviionmental, economic, social anu secuiity costs.

Analyze feueial moitgage uata to ueteimine whethei ienewable eneigy investments
in homes inciease theii value, as one iecent stuuy suggestions.

Ask the Comptiollei of the Cuiiency to claiify that ienewable eneigy piojects
qualify as public welfaie investments (PWI) by financial entities anu fall unuei the
Community Reinvestment Act (CRA).

Woik with states to ieallocate the moie than $2 billion in Qualifieu Eneigy
Conseivation Bonus that iemain unissueu.

Finu auministiative solutions that allow iesiuential PACE piogiams to go foiwaiu as
well as othei financing appioaches that seive the same function but aie moie
acceptable to investois .

Poweiing Foiwaiu
71
Committeu the Bepaitment of Eneigy (B0E) to make solai powei cost competitive with
tiauitional souices of eneigy, uiiving uown the piice of utility scale solai to $1Watt
anu iesiuential scale solai to $1.SuWatt by 2u2u.
2

Biiecteu the Inteiioi Bepaitment to appiove sufficient piivate ienewable eneigy
capacity on public lanus to powei moie than 6 million homes by 2u2u.

Set the goal that ienewable iesouices will supply 2u% of the Feueial uoveinment's
electiicity by 2u2u, eithei fiom on-site geneiation, ienewable powei puichases oi
ienewable eneigy ceitificates. The pievious goal, set by the Eneigy Policy Act of 2uuS,
was 7.S%.

Announceu that the Bepaitment of Befense (BoB) will install S gigawatts of ienewable
powei on its bases in the yeais aheau, geneiating the equivalent each yeai of the eneigy
fiom S million tons of coal.

Set the goal, in his }une 2u1S climate speech, to "uouble again oui eneigy fiom winu
anu sun.to powei moie than 6 million homes by 2u2u."

Suppoiteu BoB's statutoiy goal to obtain 2S% of its eneigy fiom ienewable iesouices
by 2u2S, up fiom 9.6% in 2u12.

V*$%",<:*2 C8:D"+% S%.+'8 F:*"*.% "*1 7*D%,+3%*+> The key question in this chaptei is
how in a time of goveinment austeiity can the Auministiation stimulate gieatei financing
anu investment in ienewable eneigy iesouices. Bow can we make sufficient piogiess in
the next 2-S yeais to uiscouiage if not pievent a iegiession to the caibon economy aftei the
Piesiuent leaves office.

In late 2u11, inteinational investment in the clean tech sectoi suipasseu $1 tiillion uollais
S

making cleai the inuustiy has taken ioot in the global economy. Yet a tiemenuous amount
of investment capital iemains on the siuelines waiting foi a stable maiket foi clean eneigy
technologies anu the public policies that will help cieate it. The amount of capital that will
be iequiieu in 2u2u foi winu anu solai installation consistent with B0E's goals will
appioach $7u billion, accoiuing to NREL, oi ioughly twice the level of investment in 2u12.
Bowevei, the cuiient patchwoik of state eneigy policies, financing piogiams, iegulatoiy
stiuctuies anu on-againoff-gain feueial tax expenuituies combine to cieate a complex
enviionment foi investois.

Theie aie a numbei of ways the Feueial uoveinment can stimulate investment in
ienewable eneigy. Among them aie 1) woiking with the piivate sectoi to impiove access to
low-cost capital; 2) ueveloping effective mechanisms to iapiuly biing ienewable eneigy
technologies to scale; S) investing in innovation; 4) uemonstiating the use of these
technologies at laige enough scale to geneiate investoi confiuence in (oi "ue-iisk")
ienewable piojects; S) pioviuing technical assistance anu encouiagement to state
iegulatois to ieuesign theii iegulatoiy iegimes to integiate emeiging iesouices anu
Poweiing Foiwaiu
72
technologies; anu 6) cieating laige anu stable maiket uemanu thiough goveinment
piocuiement. The iecommenuations in this chaptei suggest what the Auministiation coulu
uo to affect these "tools".

Even the bully pulpit can play a iole by helping to uispel common misinfoimation about
ienewable eneigy technologies, by soliuifying the bioau anu bipaitisan public suppoit that
opinion polls consistently show foi ienewable eneigy, anu by cieating a national
constituency that will pievent a futuie iollback of the nation's piogiess towaiu clean anu
sustainable eneigy.

!<% )<"$$%*2:*2 N%0 H%"$:+:%, '( H%*%0"#$% A*%82B> This is not to say that the
tiansition to ienewable eneigy will be easy. It will be uisiuptive. The iising populaiity of
small-scale solai electiic geneiation (aka uistiibuteu geneiation) anu the use of
inteimittent iesouices such as solai anu winu have some electiic utilities conceineu about
a "ueath spiial" of the tiauitional utility mouel. The boom in piouuction of natuial gas - the
cleanest of the fossil fuels - is uisplacing coal in powei plants anu pioviuing new
competition foi ienewable eneigy technologies. While some leaueis in the utility sectoi
iegaiu ienewable eneigy as a thieat anu aie actively iesisting the integiation of these
technologies into the conventional electiic system, CNEE has founu that othei utility
leaueis aie eagei to capitalize on the oppoitunities piesenteu by gieatei uiveisity in
eneigy iesouices anu a moie iesilient aichitectuie foi the nation's electiic tiansmission
anu uistiibution systems. Bespite the tensions inheient in the tiauitional veisus new
business mouels, the ability of utilities to access low-cost capital combineu with theii
contiol of access to tiansmission anu uistiibution systems positions them well to paitnei
with new maiket entiants in uistiibuteu powei, electiic vehicles anu stoiage technologies.
Whethei uistiibuteu geneiation is owneu oi contiolleu by utilities oi the enu usei is a
sepaiate issue not auuiesseu in this papei, but its iapiu giowth is a mattei of fact.

A common message that CNEE heaiu fiom the eneigy anu utility expeits is that oui cuiient
iegulations, infiastiuctuie anu maiket conventions aie making it uifficult, if not impossible,
foi the powei sectoi to keep up with the challenges anu oppoitunities being cieateu by the
iapiu emeigence of ienewable iesouices anu uistiibuteu geneiation. Reinventing the
iegulatoiy infiastiuctuie anu the maiketplace will iequiie that policy makeis, iegulatois
anu investois all unueistanu the Piesiuent's eneigy objectives anu the ueep uiffeiences
between ienewable eneigy, conventional eneigy anu the vaiious ienewable eneigy
options.

)$"8:(B:*2 +<% C8%,:1%*+@, '#^%.+:D%,> Theie is a funuamental inconsistency between the
Piesiuent's "all of the above" eneigy policy, his effoits to move the nation closei to a clean
economy anu his climate action goals. Not all eneigy iesouices aie clean. Noi is a non-
uisciiminating appioach to the nation's eneigy mix a policy in the usual meaning of the
teim - "a plan oi couise of action.intenueu to influence anu ueteimine uecisions, actions
anu othei matteis." As one ciitic has pointeu out, "all of the above" implies that anything
goes in the 0.S. eneigy mix; a bettei policy woulu be the "best of the above" in iegaiu to
economic stability, national secuiity anu enviionmental health.

Poweiing Foiwaiu
7S
A lack of claiity in national eneigy policy is a ueteiient to public anu piivate investment in
clean eneigy. Insteau, the Auministiation can help establish the founuation foi investoi
confiuence with a cleai anu consistent vision of what a clean eneigy economy woulu be;
with a cleai anu consistent commitment to the eneigy iesouices anu technologies
necessaiy to get theie; anu by uemonstiating the "new math" that coiiects uistoiteu
maiket signals by making eneigy piices moie accuiately ieflect tiue eneigy costs.

V*1%8,+"*1:*2 !'1"B@, A*%82B `=+:'*,> Among policy makeis anu investois - if not in
geneial public uiscouise - the Auministiation can help uefine the nation's contempoiaiy
anu emeiging eneigy choices. They iequiie a new vocabulaiy. Foi example:

The uefinition of "clean" has changeu. The coal inuustiy fiequently uses the teim "clean
coal", a bianu it auopteu foi coal-fiieu powei geneiation that complies with EPA's
iegulations of ciiteiia pollutants unuei the Clean Aii Act. Bowevei, with touay's
constiaints on gieenhouse gas emissions, "clean" is a bianu that shoulu be ieseiveu foi
eneigy iesouices that not only meet the law's limits on ciiteiia pollutants but also emit
little oi no gieenhouse gases.
4

Not all "clean eneigy" iesouices aie ienewable. Some aie finite fuels still subject to
piice anu supply volatility anu ultimately to the uisappeaiance of accessible anu
affoiuable supplies. Foi instance, natuial gas anu nucleai powei often aie categoiizeu
as clean because of theii ielatively low caibon emissions at the point of combustion oi
ieaction. Bowevei, both aie finite iesouices. Theii maiket competitiveness is
ueteimineu not only by vaiiations in uemanu, but also incieasingly on the iecognition
of exteinalizeu costs such as watei consumption, methane leaks, impacts on public
health anu vulneiability to teiioiist attack.

While ienewable eneigy iesouices geneially aie iegaiueu as benign anu majoi
contiibutois to a clean eneigy economy, not all ienewable iesouices aie sustainable.
Stiictly speaking, the ciiteiia foi a "sustainable" iesouice is not only that it is
ienewable; it must also be fiee of significant negative impacts uuiing its entiie life
cycle. The ongoing uebate about the net eneigy anu climate impacts of coin piouuction
foi ethanol is one example.

Not all ienewable iesouices aie the same. Each has uiffeient effects on the eneigy
system. That means that not all investments have the same iesults, eithei foi investois
oi foi utilities anu customeis. The oveiiiuing uiffeience between ienewables like winu
anu solai on one hanu anu conventional iesouices on the othei is that the vast majoiity
of the cost of ueveloping ienewable eneigy occuis up fiont, as the actual "fuel" costs aie
fiee. This uiffeience affects the financing, as well as the life cycle costs of eneigy, anu
neeus to be ieflecteu in iegulations ielating to new ienewables uevelopment.

)$%"* A*%82B@, N%0 I"+<> The nation's tiansition to clean eneigy iequiies moie than a
new vocabulaiy; it also iequiies a new math - a uiffeient anu moie compiehensive way to
weigh the benefits anu costs of uiffeient eneigy choices. Foi example, as utilities anu theii
Poweiing Foiwaiu
74
customeis seek least-cost options foi pioviuing ieliable eneigy, they must consiuei the
impoitant economic anu social benefits that tiauitionally aie uncounteu by iegulatois,
policy makeis oi the maiketplace. Those benefits incluue ieuuceu thieats to public health,
gieatei stability in eneigy piices, lowei capital costs, a vaiiety of avoiueu costs, anu so on.
Social anu enviionmental benefits asiue, the uiiect impact to utility customeis fiom gieatei
ienewable eneigy ueployment will be a stabilization of eneigy bills anu less exposuie to
volatile shoit-teim fossil fuel supply contiacts which aie the common uiivei of iate
incieases. Full-cost life-cycle accounting is necessaiy to establish a maiketplace wheie the
piice of eneigy ieflects its tiue costs to the economy, society anu the enviionment.

The quantification of the uiiect anu inuiiect benefits of ienewable eneigy is an emeiging
science. The 0bama Auministiation has uevelopeu anu is using a "social cost of caibon"
calculatoi to anticipate the climate impacts of eneigy policy. In Ninnesota, new legislation
to auvance the use of solai eneigy iequiies the state's Bepaitment of Commeice to
establish a methou foi calculating "v0S", oi the value of Solai. The v0S taiiff concept is an
aiea of significant uebate between the ienewable inuustiy anu utilities, paiticulaily with
iegaiu to which inteinal anu exteinal costs shoulu be factoieu into the value of the
iesouice. The cost of oil anu gas at the wellheau, oi coal at the mine mouth, is no longei a
useful inuication of the tiue costs of these fuels. Regulatois talk now about the "well to
wheels" costs of fuels foi tianspoitation - a calculation that might soon evolve to "wells to
weathei" as we leain to bettei inteinalize the costs of caibon emissions anu climate
uisiuption. The new math iecalibiates giiu paiity, coiiects the maiket signals that
influence consumei choices, anu ensuies that public anu piivate eneigy investments
pioviue the gieatest benefit at lowest cost to the Ameiican people.

H%.'2*:]:*2 +<% ?%=+< '( ?:,89=+:'*> It's wiuely appieciateu that emeiging tienus such
as uistiibuteu geneiation anu inteimittent powei piouuction fiom iesouices such as
sunlight anu winu piesent challenges to iegulatois anu to the management of the giiu. But
those challenges aie moie ueeply uisiuptive than is commonly unueistoou. Foi example,
because winu anu solai eneigy have no fuel costs, theii maiginal costs aie neai zeio. In the
cuiient tiansmission anu uistiibution system, they will always be the fiist to be uispatcheu.
This will have a negative impact on the ietuin on investment foi coal anu gas-fiieu
geneiation, anu on how utilities maintain theii ieseive geneiation capacity. A meuium teim
impact on utility piofits may be a tienu towaiu mitigating iisk in geneiation fleets anu
incoipoiating life cycle costs in geneiation uecisions. These factois will incieasingly
ienuei fossil-fiieu geneiation - the tiauitional souice of utility piofits - inheiently less piice
competitive.

!<% 73='8+"*.% '( +<% N"+:'*"$ N"88"+:D%> Expeits involveu in the CNEE uialogues on
ienewable eneigy financing, 21st centuiy utility business mouels anu natuial gas
piouuction all emphasizeu the neeu to change the national conveisation about theii
sectois. In iegaiu to ienewable eneigy, iounutable paiticipants iuentifieu two themes they
hope the Piesiuent will help emphasize to coiiect cuiient misconceptions anu
misinfoimation in public uiscouise.

Poweiing Foiwaiu
7S
Fiist, ienewable eneigy is heie. Its significant contiibution to the nation's eneigy mix is not
1u yeais, oi Su yeais oi Su yeais away. It alieauy has begun. Renewable eneigy companies
aie not uestineu to be a boutique inuustiy; ienewable iesouices aie not uestineu to be a
small niche in the nation's eneigy mix. NREL has concluueu that cuiiently available
ienewable eneigy technologies coulu pioviue 8u% of Ameiica's electiic powei by miu-
centuiy.
S

Seconu, the ienewable eneigy maiket is uynamic anu iobust - in othei woius, a goou
investment oppoitunity. Long-teim contiacts foi winu eneigy aie being signeu by utilities
in seveial states in the iange of SkWh ovei 2u yeais. The 0.S. Eneigy Infoimation Agency
(EIA) pieuicts that foi powei plants enteiing seivice in 2u18, the levelizeu cost of winu
powei will be $86.6u pei megawatt houi, compaieu to $1uu to $1SS foi even the most
auvanceu coal plants. Bowevei, the Ameiican Winu Eneigy Association iepoits that the
cost of winu powei in powei puichase agieements is as low as $Su pei megawatt houi, anu
the costs of uioppeu an aveiage of 4S% in just foui yeais (2uu8 to 2u12. Because winu has
histoiically compiiseu the bulk of new ienewable geneiation to meet the Su manuatoiy
anu 7 voluntaiy state Renewable Poitfolio Stanuaius (RPS), compliance with these policies
is saving consumeis a gieat ueal of money.

Consistent with fiee-maiket assumptions, the giowth of the solai maiket anu incieaseu
competition within the sectoi has ieuuceu cost by 7u% ovei the past 1u yeais. In fact,
solai powei is alieauy at cost paiity (with the Feueial Investment Tax Cieuit) oi below
utility cost in a hanuful of states, even by the stanuaius of conventional cost-benefit
consiueiations. Anu cost competitiveness is incieasing eveiy yeai thiough impiovements
in financing (such as secuiitization), installation, customei acquisition anu soft cost
management.

Nuch of the public unueistanuing of Ameiica's ienewable eneigy iesouices is iooteu in
misinfoimation fiom the inuustiies' competitois, oi in infoimation that is outuateu. With
the objective of builuing a stiong anu active political constituency foi ienewable eneigy - a
constituency that will pievent slip-back aftei the Piesiuent leaves office - it's ciitical that
the Piesiuent anu his top officials use theii bully pulpits to coiiect the national naiiative
about these iesouices.

!<% 73='8+"*.% '( +<% C8%,:1%*+@, )'*D%*:*2 C'0%8> Anothei common message that
emeigeu fiom the CNEE's iounutables was the stiiking lack of communication between key
actois in the eneigy sectoi. It is cleai that iegulatois, powei geneiatois, tiansmission anu
uistiibution utilities, anu ciitical goveinment agencies opeiate in stovepipes with
insufficient exchanges of views anu infoimation. uiven this, the Piesiuent's convening
powei is an impoitant tool in the tiansition to clean eneigy.

In fact, uespite the goou woik of oiganizations such as the Electiic Powei Reseaich
Institute (EPRI) anu the National Association of Regulatoiy 0tility Commissioneis
(NAR0C), paiticipants in the CNEE uialogues saiu they iaiely have the oppoitunity foi the
type of open uialogue they expeiienceu at the CNEE iounutables, even with othei membeis
of theii own sectois.
6
Theii appetite foi gieatei uialogue incluueu uiscussions with feueial
Poweiing Foiwaiu
76
agencies - foi example, a gieatei exchange of views, oppoitunities anu conceins between
FERC, P0Cs anu iegulateu utilities.

Anothei oppoitunity foi the Piesiuent to use his convening powei lies in the Tennessee
valley Authoiity (TvA), which is seen by some as the "Piesiuent's utility." The
Auministiation shoulu appoint Boaiu membeis that ieflect a stiong commitment to climate
action anu ienewable eneigy. TvA has the potential to uiive maiket auoption of ienewable
eneigy in the Southeast wheie many ienewable policies have been slow to ueploy.
Insouoing, TvA can uemonstiate how electiic utilities nationwiue can integiate ienewable
eneigy technologies anu iesouices into the giiu anu piicing stiuctuies.
7

W"B:*2 +<% O8'9*10'8/ ('8 W%2:,$"+:'*> While the Piesiuent has iesolveu to act on
eneigy anu climate issues with oi without Congiess, congiessional action iemains essential
to the long-teim anu lasting changes neeueu in national policy if we aie to succeeu in the
clean eneigy tiansition. Among othei things, Congiess must align the nation's fiscal policies
with the national inteiest in the tiansfoimation of the eneigy economy. Among the policies
in neeu of iefoim aie inequities in the tax stiuctuie anu in access to capital maikets foi
fossil fuels veisus ienewable iesouices.

It is wiuely accepteu that the cuiient Congiess will not act with the uigency oi the
substance that the clean eneigy tiansition iequiies. Neveitheless, the Piesiuent shoulu
continue championing anu builuing public suppoit foi legislation to cieate moie favoiable
maiket conuitions -i.e., to "level the playing fielu"foi ienewable eneigy. At a minimum,
ienewable iesouices shoulu be affoiueu the same oi compaiable auvantages in feueial
policy that tiauitional fuels ieceive. CNEE iecommenus that the Auministiation exploie
whethei it can cieate gieatei paiity between eneigy sectois thiough auministiative steps,
some of them suggesteu in this papei. Neantime, the Piesiuent can continue auvocating foi
legislation. Foi example, ienewable eneigy uevelopeis shoulu be alloweu to use Nastei
Limiteu Paitneiships, the same coipoiate stiuctuie that has attiacteu hunuieus of billions
of uollais in investments in fossil fuel uevelopment.
8
The Piesiuent can also suppoit
legislation that pioviues foi continuation of anu moie flexible monetization of the
Investment Tax Cieuit (ITC) anu Piouuction Tax Cieuit (PTC) to spui investment anu
ueployment. In auuition, he can begin laying the political giounuwoik to make clean eneigy
paiity pait of tax iefoim.

As he changes the national naiiative about ienewable eneigy technologies anu theii
enoimous benefits foi the health, welfaie anu futuie of the Ameiican people, we may see
voteis become moie conceineu about Congiess's lack of action on these issues anu moie
willing to ieflect those conceins in futuie elections.

Poweiing Foiwaiu
77
H%.'33%*1"+:'*, ('8 C8%,:1%*+:"$ -.+:'*

O'"$ 54 `82"*:]% ('8 73=$%3%*+"+:'*

The way in which the Piesiuent uelegates implementation to agencies, the visibility of the
uelegations, anu an effective system of accountability all aie factois in how much moie the
Auministiation will achieve in clean eneigy anu climate policy uuiing the few yeais befoie
the Piesiuent leaves office.

A[%.9+:D% -.+:'*,>

1. 73#%1 .$%"* %*%82B ='$:.:%,. 0se the tools of executive authoiity that will most
influence the piioiities of the Piesiuent's Cabinet anu feueial agencies anu that will be
most uifficult foi futuie Auministiations to unuo. Few if any executive authoiities can
piouuce policies as peimanent as legislation. Bowevei, theie aie auvantages to the
foice anu staying powei of policies couifieu thiough iules anu iegulations, foi example,
uiiectives anu memoianua aie less easily ieveiseu than executive oiueis.

2. H''+ ='$:.:%, :* $"0. In auuition, the Piesiuent can ieuuce the chance of challenges to
his use of authoiities by cleaily iooting them in existing feueial law anu in line with
congiessional intent. Theie is an ample bouy of statutes anu congiessional language
that iequiie the Executive Bianch to take actions consistent with a national tiansition
to clean eneigy.
9

S. -==':*+ %*%82B "*1 .$:3"+% $%"1%8, "+ <:2< $%D%$,4 Elevate the cooiuination of the
Piesiuent's eneigy anu climate agenuas, incluuing his Climate Action Plan, to a senioi
level position in the White Bouse with full access to the Piesiuent, full authoiity to uo
the job, anu no othei assignments that compete foi his oi hei time anu attention. The
status of this position is moie than a symbol of the Piesiuent's commitment to clean
eneigy anu climate action. Rank, title anu access to the Piesiuent make a significant
uiffeience in how effective a leauei can be in Washington B.C., fiom how seiiously
Auministiation officials take his oi hei uiiection uown to what meetings he oi she is
alloweu to attenu. A piominent example anu a potential mouel was the appointment of
the vice Piesiuent to oveisee implementation of the Ameiican Recoveiy anu
Reinvestment Act anu the tianspaient system the Auministiation establisheu to tiack
piogiess.

4. W:*/ .$%"* %*%82B +' <:2<X8"*/:*2 =9#$:. D"$9%,. Establish a soliu founuation of
public suppoit foi these initiatives by helping to change the national naiiative about
ienewable eneigy, as iecommenueu eailiei. Stiess the piacticality, affoiuability anu
substantial benefits of clean eneigy at eveiy level of society. Put moie visits to
exemplaiy ienewable eneigy installations on the Piesiuent's scheuule, paiticulaily
when they can be linkeu to piessing public conceins such as iising gasoline piices,
uniest in oil-piouucing nations, powei inteiiuptions in the 0.S., uamageu infiastiuctuie
fiom weathei-ielateu uisasteis, etc. Whenevei possible, paitnei in public events anu
Poweiing Foiwaiu
78
announcements with Republican goveinois anu piesent oi foimei membeis of
Congiess to uemonstiate that ienewable eneigy is not a paitisan topic.

S. `=%* *%0 1:"$'29%,. Convene meetings anu confeiences at the White Bouse to cieate
oppoitunities foi uialogue between key stakeholueis in the eneigy sectoi, incluuing
FERC, B0E, the Bepaitment of Tieasuiy, Public 0tility Commissioneis, public utility
executives, expeits fiom univeisities anu national laboiatoiies, etc. Paiticipants in the
CNEE uialogues stiesseu that the simple oppoitunity foi fiank uialogue woulu help key
agencies anu stakeholueis bettei collaboiate towaiu the common objective of
implementing the Piesiuent's eneigy anu climate policy objectives. In auuition, these
uialogues woulu help euucate stakeholueis about the veiy uiffeient chaiacteiistics of
ienewable iesouices anu the uisiuptive challenges of integiating them into the powei
system.

6. A[=$'8% .'$$"#'8"+:'* #%+0%%* ,+"+% "*1 (%1%8"$ (:*"*.%. Convene the State
Tieasuieis at the White Bouse foi a uiscussion with the Piesiuent anu Cabinet
membeis on how the feueial goveinment can woik with states in cieating laigei
maikets foi ienewable eneigy though stanuaiuization of state anu feueial financing
piogiams.

O'"$ E4 `=%* N%0 7*D%,+3%*+ `=='8+9*:+:%, 0:+< +<% )$%"* -:8 -.+

As noteu eailiei, EPA's auministiation of the Clean Aii Act, incluuing the iegulation of
gieenhouse gas emissions fiom new anu existing electiic powei plants, can open the uooi
to new maikets, anu moie intensive maiket penetiation, foi eneigy efficiency anu
ienewable eneigy technologies. New maikets iesulting fiom goveinment iegulations offei
a uegiee of stability that can attiact piivate capital.

P9:$1 '* %[:,+:*2 3"8/%+,. In auuition to the eaily iecommenuations on the application of
EPA's gieenhouse gas stanuaius foi powei plants, it shoulu consiuei allowing states to
paiticipate in existing oiganizeu gieenhouse gas maikets as a compliance pathway, such as
the Regional uieenhouse uas Initiative (RuuI).

O'"$ G4 A*.'98"2% HA 7*D%,+3%*+, !<8'92< I'8+2"2% W%*1:*2

A 2u11 stuuy by ieseaicheis at Lawience Beikeley National Laboiatoiy (LBNL) founu that
on aveiage, homes equippeu with solai photovoltaic panels solu foi $17,uuu moie than
homes without solai.
1u
The ieseaicheis noteu that ielatively little auuitional stuuy hau
been uone on the ielationship between solai systems anu home values, but:
A cleorer unJerstonJinq of tbese effects miqbt influence tbe Jecisions of bomeowners
consiJerinq instollinq Pv on tbeir bome or sellinq tbeir bome witb Pv olreoJy instolleJ, of
bome buyers consiJerinq purcbosinq o bome witb Pv olreoJy instolleJ, onJ of new bome
builJers consiJerinq instollinq Pv on tbeir proJuction bomes.

In its policy iecommenuations on eneigy piouuctivity, CNEE concluueu that eneigy
Poweiing Foiwaiu
79
peifoimance anu location efficiency
11
shoulu become significant factois in moitgage
unueiwiiting, in ieal estate tiansactions anu in setting moitgage teims, both in the piivate
sectoi anu in feueial moitgage piogiams. The same is tiue foi solai electiic systems anu
may be tiue foi othei foims of builuing-scale ienewable eneigy such as giounu-souice
heating anu cooling. The key is to veiify that ienewable eneigy systems iaise the value of
builuings in which they aie installeu.

A[%.9+:D% -.+:'*,>

As noteu in Chaptei 1, the Feueial uoveinment manages oi influences a multi-tiillion-
uollai moitgage poitfolio. It is uniquely positioneu to access, analyze, anu publish uata on
the ielationship between ienewable eneigy installations anu home values. CNEE
iecommenus the same actions listeu in Chaptei 1 foi using these uata to encouiage the
moitgage maiket to iecognize the value of clean eneigy impiovements to builuings. The
"action items" incluue:

1. -*"$B]% (%1%8"$ 1"+". Biiect B0E, the Bepaitment of Bousing anu 0iban Bevelopment
(B0B) anu FBFA to ueteimine whethei the Feueial uoveinment's moitgage uata veiify
that ienewable eneigy investments inciease builuing values.

2. F:[ 8%,:1%*+:"$ C-)A (:*"*.:*2. Biiect B0E to woik with FBFA to finu auministiative
solutions to FBFA's conceins about Piopeity Assesseu Clean Eneigy (PACE) financing
foi ienewable eneigy impiovements to iesiuential piopeities.

S. )'*,:1%8 .8%"+:*2 " $'"* $',, 8%,%8D%. Biiect B0E to ieview loan guaiantee
authoiities within the Auministiation to ueteimine whethei theie is an oppoitunity to
cieate a piivate iesiuential ienewable eneigy ietiofit loan guaiantee piogiam with loan
loss ieseive to insuie against moitgage uefaults.

4. -$$'0 HA7!, +' :*D%,+4 Ask the IRS to claiify that publicly tiaueu Real Estate
Investment Tiusts (REITs) can invest in eneigy efficiency anu ienewable eneigy
piojects.
12

S. a9"$:(B 8%*%0"#$% %*%82B =8'^%.+, ", =9#$:. 0%$("8% :*D%,+3%*+,4 Encouiage the
Comptiollei of the Cuiiency
1S
to claiify that ienewable eneigy piojects qualify as public
welfaie investments (PWI) by financial entities anu fall unuei the Community
Reinvestment Act (CRA).

O'"$ M4 H%3'D% -13:*:,+8"+:D% H'"1#$'./, +' F:*"*.:*2 ('8 F%1%8"$
H%*%0"#$% A*%82B C8'^%.+,

Theie aie seveial ways feueial agencies can finance on-site ienewable eneigy piojects.
Among them aie Eneigy Saving Peifoimance Contiacts (ESPCs), 0tility Electiic Seivice
Contiacts (0ESCs) anu Powei Puichase Agieements (PPAs). In geneial, B0E's Feueial
Poweiing Foiwaiu
8u
Eneigy Nanagement Piogiam (FENP) anu NREL help agencies unueistanu anu apply these
tools.

Bowevei, seveial of the stakeholueis CNEE consulteu cite ioaublocks in the auministiative
piocesses foi executing ESPCs. Some uelays have been excessive, iesulting in unnecessaiy
gieenhouse gas emissions. While the use of ESPCs iepoiteuly is biisk in many feueial
agencies, bottlenecks incluuing shoitages of tiaineu staff aie slowing uown piocessing of
the contiacts. In auuition, 0NB, the Congiessional Buuget 0ffice (CB0) anu congiessional
buuget committees scoie ESPCs as a cost without iegaiu to the eneigy peifoimance of a
ienewable eneigy system beyonu the tiauitional 1u-yeai assessment winuow.
14

Touay, theie is a uamaging giay aiea of auministiative policy in which it is uncleai whethei
oi not ienewable powei puichase agieements can be useu within the ESPC anu similai
mouels. Nany ienewable eneigy puichases have highei upfiont costs that fall within the
1u-yeai winuow, but neaily zeio costs foi 0&N anu no fuel costs. Some agencies aie
pioceeuing with them while otheis aie not uue to lack of claiity.

B0E's Electiicity Auvisoiy Committee has highlighteu that Section 1222 allows the
Bepaitment thiough two PNA's, incluuing the Westein Aiea Powei Auministiation
(WAPA) anu the Southwest Powei Auministiation (SWPA), to accept $1uu million in thiiu
paity funuing foi tiansmission piojects. The Committee aigueu that the goal of this
legislation was to fostei paitneiships with the piivate sectoi anu that the agency shoulu
consiuei moie piojects to jumpstait tiansmission uevelopment. Foimei Eneigy Secietaiy
Steven Chu maue this authoiity a piioiity in his memo to the PNAs in 2u12, when he calleu
on WAPA anu SWPA to moie actively exeicise theii authoiity in this policy aiea. CNEE has
heaiu fiom stakeholueis that theie is piivate inteiest in ueveloping piojects to biing
ienewables to maiket, though it woulu iequiie WAPA anu SWPA to issue RFPs foi new
tiansmission.

In auuition, B0E coulu exeicise its authoiity to entei into paiticipation agieements foi
qualifieu tiansmission pioject pioposals unuei the Eneigy Policy Act of 2uuS in an effoit to
biing moie ienewable powei to maiket. 0nuei Section 1222(a) of the Act, B0E woiking
thiough eithei the WAPA oi SWPA, "may uesign, uevelop, constiuct, opeiate, maintain, oi
own, oi paiticipate with othei entities in uesigning . . . an electiic powei tiansmission
facility. . . neeueu to upgiaue existing tiansmission facilities."

A[%.9+:D% -.+:'*,>

1. F9*1 8%*%0"#$% %*%82B =8'^%.+, 0:+< +<:81X="8+B .'*+8".+,. Encouiage executive
bianch agencies to use ienewable technologies in ESPCs, 0ESCs, anu similai
instiuments. Biiect 0NB to pioviue agencies with peimission to use ienewable powei
puichase agieements beyonu the cuiient 1u-yeai ceiling.
1S

Poweiing Foiwaiu
81
2. O%+ ÌP '* +8"./. In iegaiu to ESPCs, uiiect 0NB to:

a) Auheie to its own policy to complete its ieview of iules within 9u uays to ensuie
that the Auministiation complies with legal ueaulines foi finalizing iegulations
ielateu to ienewable eneigy investments by the Feueial uoveinment.

b) Nove pioposeu iulemakings on ienewable eneigy to the fiont of the cleaiance
queue to pievent lost oppoitunities foi gieenhouse gas emission ieuuctions.

c) Piopose anu woik with the CB0 anu congiessional buuget committees to change the
scoiing of ESPCs to incluue consiueiation of guaianteeu savings.
16

S. )%*+8"$:]% .'*+8".+ =8'.%,,:*2. To auuiess the pioblem of insufficient tiaineu staff to
piocess ESPCs within agencies, uiiect the 0ffice of Peisonnel Nanagement (0PN) to
ieassign piofessional agency contiacting officeis to B0E's uoluen Fielu 0ffice in
sufficient numbeis to cieate an efficient anu highly skilleu cential ESPC piocessing
centei foi feueial agencies.

4. P%%( 9= $%"1%8,<:= "*1 ,+"((:*24 To pioviue high-level attention to the financing of
ienewable eneigy technologies in the public anu piivate sectois, assign the Feueial
Enviionmental Executive (FEE) to seive as the Auministiation's clean eneigy
cooiuinatoi with secietaiiat suppoit fiom B0E. Pioviue him oi hei with sufficient
peimanent staff anu authoiity to cooiuinate the Feueial uoveinment's eneigy efficiency
anu ienewable eneigy giant, financing anu technical assistance piogiams. Biiect the
FEE to iepoit any significant anu iecuiiing auministiative ioaublocks oi failuies to the
Piesiuent anu allow the FEE gieatei authoiity to caiiy out executive actions to achieve
aims of the Climate Action Plan.

S. 7*.8%",% +<% ASC) 2'"$ ('8 "2%*.:%,. Amenu the Piesiuent's Becembei 2u11
memoianuum on ESPCs to:

a) Claiify that powei puichase agieements foi solai anu othei applicable ienewable
eneigy technologies, both on-site as well as off site, may be useu within the ESPC
fiamewoik foi a peiiou not to exceeu 2S yeais. Similai stiuctuies, such as 0ESCs,
shoulu ieceive similai uiiection.

b) Set ESPC taigets that moie fully achieve the economic potential of ienewable eneigy
in goveinment eneigy savings. At a minimum, auopt the iecommenuation that
feueial ESPC taigets foi eneigy efficiency anu ienewable eneigy be set at $1 billion
annually foi S yeais.
17

c) Claiify that agencies shoulu use ESPCs to finance ienewable eneigy piojects in
public housing, militaiy housing anu feueial facilities nationwiue.

u) Biiect B0E, BoB anu the ueneial Seivices Auministiation (uSA) to expanu the use of
ESPCs to finance unuei-utilizeu but pioven technologies such as micio-giius;
Poweiing Foiwaiu
82
uistiibuteu ienewable eneigy piojects that ieuuce line losses; combineu heat anu
powei (CBP) systems; waste-to-eneigy piojects; watei anu wastewatei tieatment
plants; eneigy fiom biomass; high-efficiency, ultia-low emission anu zeio-emission
fleet vehicles anu chaiging infiastiuctuie, along with othei clean eneigy piojects
that leau to opeiational anu maintenance savings as well as fastei piogiess on
achieving net-zeio eneigy anu caibon builuings.
18

6. C9,< +' %$:3:*"+% +<% ='0%8 =98.<",% .%:$:*2 ('8 8%*%0"#$% %*%82B4 Woik with
Congiess to eliminate the outuateu, counteipiouuctive 1u-yeai powei puichase
contiacting ceiling foi ienewable eneigy souices. BoB is exempt fiom this constiaint
anu is uemonstiating with its gigawatts of ienewable eneigy goals how ienewable
eneigy iesouices aie cost-competitive anu help make oui nation safei.

7. Q'8/ 0:+< CI-, '* *%0 +8"*,3:,,:'*. Biiect B0E to ieasseit Section 1222 authoiity
by woiking with WAPA anu SWPA to evaluate new tiansmission builu out foi
ienewable electiicity within these two PNA iegions anu foi expoit to othei PNA
iegions.

O'"$ U4 I"/% P%++%8 V,% '( F%1%8"$ F:*"*.:"$ 7*.%*+:D%, Q<:$%
A*.'98"2:*2 W%,, H%$:"*.% '* !<%3

Feueial policies incluuing beneficial piovisions of the tax coue anu goveinment giants anu
loans have been an impoitant pait of national eneigy policy foi at least a centuiy. Some of
the taxpayei subsiuies foi fossil eneigy that weie cieateu a centuiy ago aie still in
existence touay. Foi example, a iecent inventoiy of goveinment loan anu loan guaiantee
piogiams that coulu suppoit clean eneigy piojects shows that the capital in these
piogiams is 1uu times laigei than eneigy-ielateu giants, on the oiuei of $Su billion each
yeai.
19
But these piogiams aie scatteieu acioss multiple agencies with no mechanism foi
cooiuination that coulu save both oppoitunity anu opeiating costs.

Feueial assistance is paiticulaily impoitant - anu most justifieu - foi emeiging eneigy
technologies that aie in the national inteiest, a categoiy in which most ienewable eneigy
technologies cleaily belong. Bowevei, public subsiuies have shoitcomings, among them
theii vulneiability to politics anu to less-than-peifect knowleuge in Congiess about what is
iequiieu to biing new technologies to maiket.

Notable examples in iegaiu to ienewable eneigy aie the Investment Tax Cieuit (ITC), the
Piouuction Tax Cieuit (PTC) anu the iesiuential ienewable eneigy tax cieuit. Since
Congiess cieateu it in the Eneigy Policy Act of 1992, the PTC usually has been authoiizeu
foi only a yeai oi two at a time. Congiess has extenueu the cieuit five times anu has
alloweu it to expiie foui times. Aftei each expiiation, the numbei of new winu eneigy
installations uioppeu between 7S% anu 9S%, with associateu job losses.
2u
LBNL iepoiteu
as fai back as 2uu7 that.

.tbe frequent expirotion,extension cycle tbot we bove seen since 1999 bos boJ severol
Poweiing Foiwaiu
8S
neqotive consequences for tbe qrowtb of tbe winJ sector. Bue to tbe series of 1- to 2-yeor PTC
extensions, qrowinq JemonJ for winJ power bos been compresseJ into tiqbt onJ frenzieJ
winJows of Jevelopment. Tbis bos leJ to boom-onJ-bust cycles in renewoble enerqy
Jevelopment, unJer-investment in winJ turbine monufocturinq copocity in tbe 0.S., onJ
voriobility in equipment onJ supply costs, mokinq tbe PTC less effective in stimulotinq low-
cost winJ Jevelopment tbon miqbt be tbe cose if o lonqer-term onJ more-stoble policy were
estoblisbeJ.
21

LBNL uocumenteu that the on-againoff-again application of the PTC sloweu 0.S. winu
eneigy uevelopment, gave foieign competitois an auvantage, iaiseu the cost of winu
tuibines, maue iational tiansmission planning uifficult anu ieuuceu piivate investments in
R&B.

In negotiations with Congiess ovei tax iefoim, the White Bouse shoulu auvocate tax
policies that pioviue moie stable incentives foi clean eneigy uevelopment, while making
suie that ienewable eneigy inuustiies aie awaie anu take full auvantage of othei foims of
feueial financial assistance.

A[%.9+:D% -.+:'*,>

1. )<"3=:'* +<% %$:2:#:$:+B '( 8%*%0"#$% %*%82B =8'^%.+, ('8 I",+%8 W:3:+%1
C"8+*%8,<:=,4 In tax iefoim negotiations anu in his legislative agenua, the Piesiuent
shoulu suppoit the iight of ienewable eneigy uevelopeis to use Nastei Limiteu
Paitneiships (NLP), the same coipoiate stiuctuie that has attiacteu hunuieus of
billions of uollais in investments in fossil fuel uevelopment. It is impoitant that suppoit
foi NLPs not be seen oi useu as a substitute foi the ITC oi PTC.

2. )8%"+% "* "2%*1" ('8 (:,."$ ='$:.B 8%('83. Biiect the White Bouse Council of
Economic Auviseis to analyze cuiient feueial financial incentives anu piogiams foi
ienewable eneigy technologies anu to iecommenu how fiscal policies can be impioveu
to a) moie cost-effectively stimulate piivate maikets; b) leveiage piivate investments in
ienewable eneigy without auuitional costs to taxpayeis; anu c) become monetizeu anu
"bankable."

S. 73=8'D% +<% .''81:*"+:'* '( (%1%8"$ (:*"*.:"$ =8'28"3,. Biiect 0NB anu the FEE to
iecommenu how feueial giant anu loan piogiams can be bettei cooiuinateu to
capitalize ienewable eneigy technologies anu piojects anu to save auministiative time
anu costs in getting this capital to maiket.

4. hI"8/%+i +<% +"[ .'1%. Biiect the Bepaitment of Tieasuiy to cieate, uistiibute anu
peiiouically upuate a guiue to all piovisions of the feueial tax coue that can apply to
ienewable eneigy uevelopment anu investment. Impiove the implementation of ITC
foi uistiibuteu solai inuustiy by catalyzing a moie suppoitive iole foi Tieasuiy anu the
IRS. In auuition, uiiect B0E to annually upuate anu uistiibute its new uiiectoiy of
feueial financial assistance piogiams iefeienceu above.

Poweiing Foiwaiu
84
O'"$ 64 H%X"$$'."+%
H%3":*:*2 a9"$:(:%1 A*%82B
)'*,%8D"+:'* P'*1,

Qualifieu Eneigy Conseivation
Bonus (QECBs) weie oiiginally
cieateu in the 2uu8 Eneigy
Impiovement Extension Act at a
funuing allocation of $8uu million.
They weie subsequently expanueu
significantly to $S.2 billion by the
Ameiican Recoveiy anu
Reinvestment Act in 2uu9.

QECBs may be useu foi a wiue
iange of qualifying piojects
incluuing eneigy efficiency publicly
owneu builuings, ieseaich
piogiams foi biofuels anu
batteiies, mass commuting
infiastiuctuie anu uemonstiation
piojects foi ieuucing peak
electiicity anu caibon emissions
mitigation.
22
In piactice, howevei,
the bonus aie typically useu to
finance ienewable eneigy piojects
anu capital impiovements on
public builuings.
The 0.S. Tieasuiy allocateu QECBs
to states anu tiibes in 2uu9 by
foimulaic uistiibution accoiuing to
population. Fiom theie, most sub-
allocations weie auministeieu by
State Eneigy 0ffices anu gianteu
to municipalities with populations of at least 1uu,uuu. The 2u1u Biiing Incentives to
Restoie Employment Act of 2u1u (BIRE) expanueu the utility of QECBs beyonu a tax cieuit
as oiiginally cieateu to also incluue the option foi a uiiect subsiuy. This subsiuy in lieu of
tax cieuit option ienueieu QECBs one of the least expensive foims of public financing foi
efficiency anu ienewable piojects because the 0.S. Tieasuiy coulu uiiectly subsiuize
boiiowing costs foi bonu issueis.

The challenge to ueployment of QECBs appeais to be auministiative. As of August 2u1S,
only $81S million of the $S.2 billion authoiizeu hau been issueu, leaving a iemaining QECB
allocation of moie than $2 billion. The pievious table fiom an Eneigy Piogiams Consoitium
iepoit shows state issuances as of }une 2u1S.
2S

Poweiing Foiwaiu
8S
Pait of the ieason foi uneven uptake of QECBs may be that they have no expiiation uate
anu theiefoie no inheient use-oi-lose incentive foi states anu municipalities. Economies of
scale have also been uifficult to achieve in some states uue to the numbei of municipalities
with moie than 1uu,uuu people, which iesults in small allocations to each local
goveinment.

The solution to leveiaging QECBs as a finance mechanism foi ienewable eneigy lies in
cieating scale by ieallocating the iemaining $2 billion. Theie may be two appioaches to
this ieallocation. Fiist, ARRA specifieu that local goveinments may ietuin unuseu
allocations to theii states, piesumably foi use at the state level oi ieuistiibution to othei
localities.
24
This ie-pooling of allocations at the state level iequiies states to unueigo a
waivei piocess. States have employeu thiee appioaches by which laige local goveinments
ietuin theii allocations to the state: Affiimative waiveis, Constiuction waiveis anu Letteis
of Intent.
2S
Seconu, theie may be a mechanism by which states can combine theii unuseu
poitions into laigei, iegional funus, though this inteistate tiauing concept will iequiie
moie ieseaich to ueteimine if congiessional action is neeueu.

0ne cleai tienu in the QECB stoiy is that ueployment has suffeieu fiom a lack of claiity in
the allocation anu local goveinment waivei piocess. A 2uu9 IRS guiuance claiifieu that
"laige local goveinments" aie those with 1uu,uuu iesiuents oi moie among othei
questions, yet the lack of claiity on the ieallocationwaivei piocess was inteipieteu by
many states to mean that it takes "an act of the full ielevant goveinmental bouy to affect a
waivei".

In 2u12 the IRS issueu anothei guiuance ieiteiating that states have wiue anu bioau
uiscietion in the waivei anu ie-allocation piocess. The guiuance also outlineu a methou foi
calculating the 2u% minimum eneigy efficiency iequiiement, uefineu "capital expenuituie"
anu "gieen community piogiam" in auuition to making cleai that ienewable eneigy
piojects that aie eligible, like Clean Renewable Eneigy Bonus (CREBs), also qualify foi
QECBs.

Neithei of these IRS notices appeai to have gone fai enough, howevei, to eliminate
confusion on how laige local goveinments can waive theii allocations back to the state foi
pooling anu ieallocation.
26

A unifoim anu accepteu waivei piocess shoulu be uevelopeu foi the iemaining states as
NASE0 iepoits that of the 2u iemaining states 8 have an unknown waivei piocess, while
12 states have no waivei piocess in place. While the IRS has suggesteu that the QECB
piogiam was meant to give wiue anu bioau uiscietion to states, theie may be a neeu foi
moie specificity on the waivei piocess in oiuei to encouiage the iemaining states to take
action.

In the past, QECBs have been substantially impacteu by feueial buuget sequestiations. This
fluctuation in subsiuy has been uifficult foi bonu issueis to manage. 0NB has ueteimineu
that payments to issueis fiom the buuget accounts to QECB holueis aie subject to a
ieuuction of as much as 8.7%.
27

Poweiing Foiwaiu
86
In summaiy, QECBs iepiesent a $2 billion existing oppoitunity to auvance ienewable
eneigy in neaily eveiy state (Kansas is the only state that has useu neaily all QECB
allocations). Theie aie a numbei of key steps the Auministiation can take to unlock this
financing.

A[%.9+:D% -.+:'*,>

1. )$%"8 9= "3#:29:+:%,. Biiect the IRS to issue a thiiu notice that cleais up iemaining
questions about the QECBs, especially the IRS's piefeiieu laige local goveinment
waivei piocess (affiimative, constiuction, lettei of intent, etc.).

2. `82"*:]% ,+"+%, ('8 8%"$$'."+:'*. Biiect the Secietaiy of Eneigy to convene State
Eneigy 0ffice uiiectois on this issue anu encouiage them to put a waivei, ieallocation
anu pioject assignment plan in place.

S. C8'D:1% +%.<*:."$ <%$= :* +<% 8%"$$'."+:'* =8'.%,,. In exchange foi these plans,
uiiect B0E to ueploy technical assistance to states anu municipalities foi the waivei,
ieallocation, anu pioject iuentification piocess.

4. A[=$'8% aA)P %[%3=+:'* (8'3 ,%Y9%,+8"+:'*. Biiect the Secietaiy of Eneigy to
investigate whethei QECBs can be ienueieu exempt fiom futuie buuget sequestiation
in oiuei to biing gieatei ceitainty to this financing mechanism.

S. ?%+%83:*% 0<%+<%8 aA)P@, ."* #% 8%"$$'."+%1 0:+<'9+ )'*28%,,. Biiect the
Secietaiy of Eneigy to investigate whethei QECBs can be ieallocateu among states
without congiessional action. Woik with the National Association of State Eneigy
0fficials (NASE0) on a unifoim piogiam stiuctuie that coulu qualify foi a pooling of
QECB funus foi states if this is ueteimineu to be allowable.

Poweiing Foiwaiu
87
)<"=+%8 M> H'#9,+ "*1 H%,='*,:#$% N"+98"$
O", C8'19.+:'*

!<% N"+:'*"$ )'*D%8,"+:'*

CNEE's uialogue with natuial gas stakeholueis iuentifieu seveial backgiounu issues that
The iounutable meeting CNEE conveneu in Washington, B.C., on natuial gas
piouuction was attenueu by officeis anu senioi staff fiom two natuial gas opeiatois,
foui inuustiy oiganizations (national anu state), two ieseaich institutions, thiee
public inteiest anu enviionmental Nu0s, anu one law fiim. The key
iecommenuations that iesulteu fiom the meeting weie:
Stiengthen feueial-state-stakeholuei collaboiation to auuiess the issues
involveu in natuial gas piouuction

Collaboiate with state iegulatois, the gas inuustiy anu stakeholueis to
uevelop a national methane leak ieuuction plan

Woik with the gas inuustiy on the steps necessaiy to sustain its "social
license to opeiate" - i.e., public suppoit foi gas as Ameiica's tiansition fuel to
a clean eneigy economy

Bemonstiate best available piouuction piactices on public lanus

Belp states impiove pipeline inspections

Cieate a pubicpiivate ieseaich institute to uevelop moie effective methous
foi contiolling methane leaks anu othei technical auvances in gas piouuction,
uistiibution anu use

Cieate a piesiuential ueoige P. Nitchell Awaiu foi enviionmental excellence
in natuial gas piouuction

Poweiing Foiwaiu
88
pioviue context foi the specific iecommenuations in this papei. Those issues incluue the
quality of the national conveisation about natuial gas, the benefits of the iesouice, why
inuustiy values ieasonable iegulation, who shoulu iegulate, how communication can
inciease confiuence in the inuustiy anu wheie natuial gas fits in the Piesiuent's national
eneigy policy.

A key iecommenuation that emeigeu fiom the CNEE stakeholuei consultation on natuial
gas piouuction - peihaps TBE key iecommenuation - hau less to uo with public policy anu
moie to uo with public uiscouise. It was the neeu to builu gieatei tiust anu a sense of joint
mission among goveinment, the natuial gas inuustiy, the enviionmental community, othei
public-inteiest stakeholueis, anu the geneial public.

In one sense, the public conveisation is tiying to catch up with the technology. In just a few
yeais, the 0niteu States has been tiansfoimeu fiom a piospective natuial gas impoitei to
the woilu's biggest natuial gas piouucei, with plans to expoit liquefieu natuial gas (LNu)
in coming yeais.
1

Leaueis in the natuial gas inuustiy have the piincipal iesponsibility foi builuing tiust in
the iapiuly incieasing iole of natuial gas piouuction. The inuustiy's willingness to be
tianspaient in its piactices, fiank about its challenges anu pioactive in auuiessing the
enviionmental anu social impacts of the natuial gas system aie key factois.

Bowevei, Piesiuent 0bama also has an impoitant iole to play in a constiuctive anu
infoimeu national conveisation about the nation's eneigy mix anu the contiibution of
natuial gas. Be can continue unueiscoiing the many benefits of this iesouice to the
Ameiican people (see the next section). Be can make cleai to the inuustiy anu the public
what "iesponsible" piouuction means. Be can convene stakeholueis foi gieatei uialogue
about iesolving enviionmental anu social impact issues.

CNEE's uialogue involveu leaueis in inuustiy, enviionmental oiganizations anu the public
inteiest sectoi. They geneially agiee with some impoitant funuamentals, incluuing that a)
natuial gas can anu shoulu make a ciitical contiibution to the nation's eneigy secuiity anu
economy;
2
b) iesponsible natuial gas piouuction is a key element in the Piesiuent's
national eneigy policy; c) the iapiu evolution of new extiaction technology anu inuustiy
piactices iequiies ieasonable iegulatoiy oveisight; anu u) the neeu foi "iesponsible"
piactices applies to goveinment as well as to inuustiy.

In a iecent iepoit on the potential of shale gas uevelopment, the Centei foi Stiategic anu
Inteinational Stuuies (CSIS) summaiizeu the situation this way:

Certoin focts ore uncontesteJ. Tbe resource bose is enormous. Current qovernment
estimotes put tbe 0.S. recoveroble sbole qos resource bose ot close to 2,000 trillion
cubic feet {representinq neorly 100 yeors of supply ot current consumption levels)
wbile privote onJ inJustry ossessments run substontiolly biqber.As o consequence of
tbe locotion, scole onJ operotionol cborocteristics ossocioteJ witb sbole qos
Jevelopment, public scrutiny bos olso increoseJ, especiolly in relotion to qrounJ onJ
Poweiing Foiwaiu
89
surfoce woter protection, oir emissions, seismic octivity, cbemicol Jisclosure onJ
community impocts. As o result, qovernment, inJustry onJ locol communities ore
increosinqly focuseJ on finJinq woys to moximize tbe benefits of tbese obunJont
resources wbile effectively monoqinq tbe ossocioteJ risks.
S

!<% P%*%(:+, '( N"+98"$ O",

The CSIS iepoit points out seveial of the benefits of natuial gas piouuction to uate:

Tbe combinotion of reJuceJ electricity JemonJ onJ increoseJ use of noturol qos in tbe
power sector bos leJ to lower qreenbouse qos emissions. New proJuction opportunities
{26 bosins in 28 stotes) bove contributeJ to tens of billions of Jollors in new
investment, economic Jevelopment, onJ job creotion, wbile lower relotive noturol qos
prices bove oiJeJ in tbe economic recovery botb by lowerinq tbe bosic cost of enerqy
inputs for existinq qos consumers onJ by ottroctinq new investment in petrocbemicol
onJ otber qos-reloteJ inJustries in tbe 0niteJ Stotes.

Noie specifically, the benefits incluue these:

e'#, "*1 .'*,93%8 ,"D:*2,4 The Eneigy Infoimation Auministiation (EIA) iepoits
that jobs in the gas sectoi iose 4u% fiom 2uu7 thiough 2u12 compaieu to 1% in the
piivate sectoi oveiall. So long as the cuiient lowei piice of natuial gas foi electiic
geneiation is sustaineu, it means savings foi consumeis, jobs, anu gieatei inteinational
competitiveness foi 0.S. inuustiies.

W%,, 0"+%8 .'*,%8D"+:'* +<"+ '+<%8 (',,:$ (9%$,. Reseaich shows that ovei its life
cycle, natuial gas consumes less watei than coal-fiieu anu nucleai powei geneiation, an
impoitant factoi at a time when watei supplies aie a giowing concein in the 0.S.
4

C',,:#$% .'$$"#'8"+:'* #%+0%%* *"+98"$ 2", "*1 8%*%0"#$% %*%82B :*19,+8:%,.
Although natuial gas anu ienewable eneigy compete in the maiketplace, they can also
help one anothei. As the Centei foi Climate anu Eneigy Solutions notes, natuial gas
plants can quickly scale theii electiicity piouuction uown to seive as effective heuge
against the inteimittency of ienewables, while the fixeu fuel piice of ienewables can act
as a heuge against natuial gas piice volatility.
S

73=8'D%1 =9#$:. <%"$+<. Insofai as it ieplaces eneigy fiom coal anu petioleum, natuial
gas ieuuces aii emissions that enuangei public health.

F%0%8 28%%*<'9,% 2", %3:,,:'*,. So long as the inuustiy auequately auuiesses
methane leaks,
6
natuial gas will iesult in fai fewei gieenhouse gas emissions pei unit of
eneigy than coal anu petioleum. The substitution of natuial gas foi coal in electiic
geneiation has been a contiibuting factoi in the ieuuction of 0.S. gieenhouse gas to
theii lowest levels in 2u yeais.
7
A stuuy by the Nassachusetts Institute of Technology's
Eneigy Initiative concluues that while natuial gas will "neeu to make way foi othei low-
Poweiing Foiwaiu
9u
oi zeio-caibon souices of eneigy in the futuie," uomestic supplies aie "likely to giow
consiueiably anu contiibute to significant ieuuctions in gieenhouse gas emissions foi
uecaues to come."

Q<B 7*19,+8B R"$9%, H%",'*"#$% H%29$"+:'*

Seveial leaueis in the natuial gas inuustiy tolu CNEE they geneially suppoit effective
goveinment iegulations that enable piouuction as well as continuous impiovement in the
sectoi's enviionmental anu social peifoimance. A iecent iepoit by the National Petioleum
Council (NPC)
8
makes this point:

Acbievinq tbe economic, environmentol onJ enerqy security benefits of Nortb Americon
noturol qos onJ oil supplies requires responsible opproocbes to resource proJuction onJ
Jelivery.{l)n oll locoles onJ conJitions, tbe criticol potb to sustoineJ onJ exponJeJ resource
Jevelopment in Nortb Americo incluJes effective requlotion onJ o commitment of inJustry
onJ requlotors to continuous improvement in proctices to eliminote or minimize
environmentol risk.

Reasonable anu effective iegulation is impoitant to natuial gas piouuceis because it
cieates business planning ceitainty; scieens out the "bau actois"; ieuuces the chances that
companies within the eneigy sectoi will obtain unfaii auvantage by engaging in
iiiesponsible piactices; anu stiengthens the inuustiy's "social license to opeiate" - i.e.,
public tiust that eneigy is being piouuceu in ways that aie consistent with public health,
welfaie anu quality of life.

CNEE founu that the positions of the leaueis involveu in its uialogue can be summaiizeu
with thiee points. Fiist, excessive, ineffective, oi unnecessaiy iegulations constiain gas
piouuction, inciease uevelopment costs, impeue auoption of enviionmental impiovements,
anu uelay oi ieuuce the benefits citeu above. Seconu, iegulation cannot be foi iegulation's
sake; iathei, iegulations must be well matcheu to the legitimate iisks associateu with the
gas value chain. Thiiu, the challenge foi goveinment anu the gas inuustiy is to finu the
"sweet spot" between ieasonable iegulations anu the iesponsible piouuction anu use of the
nation's natuial gas iesouices.

Q<' S<'9$1 H%29$"+%T

Paiticipants in the CNEE uialogue uiscusseu the iole of feueial veisus state iegulation of
paiticulai inuustiy piactices. Seveial issues suifaceu.

Fiist, inuustiy iepiesentatives feel stiongly that state iegulation geneially is moie effective
than feueial iegulation uue to the unique geology, hyuiogeology, topogiaphy anu iesouices
in uiffeient aieas of the countiy, anu uue to the ability of states to iesponu moie quickly
than feueial agencies to changes in technologies anu conuitions.
9
The uiveisity of state
appioaches also pioviues oppoitunities foi leaining anu innovation iegaiuing piefeiieu
piouuction piactices, substantive iules, anu multi-stakeholuei piocesses.
1u

Poweiing Foiwaiu
91

Seconu, the inuustiy's ability to contiol its enviionmental anu social impacts is complicateu
by cioss-bounuaiy issues - i.e., the fact that aii quality anu watei uisposal issues associateu
with natuial gas uevelopment can cioss state lines.
11

Thiiu, while states play a leauing iole in iegulating natuial gas piouuction, the Feueial
uoveinment has veiy significant iesponsibilities. Feueial agencies can help ueal with cioss-
bounuaiy issues. They have the authoiity to iegulate oil anu gas piouuctions on feueial
lanus anu have exclusive authoiity on Inuian Lanus. The 0.S. Enviionmental Piotection
Agency (EPA) has impoitant, ongoing iesponsibilities associateu with oil anu gas
piouuction, paiticulaily iegaiuing aii anu watei pollution.
12
The Feueial Eneigy
Regulatoiy Commission (FERC) has leau iesponsibility foi the siting of inteistate natuial
gas pipelines. The Bepaitment of Eneigy (B0E) oveisees impoits anu expoits of LNu anu
suppoits ieseaich anu uevelopment of auvanceu oil anu gas technologies. In fact, public-
inteiest leaueis tolu CNEE that the Auministiation has a numbei of executive authoiities it
is not using but coulu, in the inteiest of iesponsible gas piouuction.

The Feueial uoveinment has an impoitant iole, too, in stiengthening the founuation foi
smait state anu local iegulation of oil anu gas uevelopment. Piesiuent 0bama's Climate
Action Plan as well his Executive 0iuei 1S6uS, Supportinq Sofe onJ Responsible
Bevelopment of 0nconventionol Noturol 6os Resources
1S
, iecognize this anu pioviue a
fiamewoik foi ongoing executive actions in this aiea.

These iesponsibilities at the state anu feueial levels cieate a complex, uynamic anu multi-
layeieu legal anu iegulatoiy fiamewoik iegaiuing natuial gas piouuction. That can cieate
what one CNEE uiscussant calleu "uynamic tension" between the two levels of goveinment.
It is impoitant that state anu feueial iegulatois cooiuinate to achieve the most effective,
timely anu tianspaient methous foi enviionmental piotection. But wheie states anu the
Feueial uoveinment have oveilapping iesponsibilities, inuustiy paiticipants in the CNEE
uialogue felt that in most cases, iegulation is best caiiieu out by states because of the
auvantages citeu above. Foi that ieason, iepiesentatives of inuustiy tolu CNEE, feueial
agencies shoulu consiuei whethei existing state effoits alieauy aie uoing an auequate job
befoie piomulgating new feueial iules.

7*.8%",:*2 )'*(:1%*.% !<8'92< )'339*:."+:'*

All stakeholueis can impiove the quality of the public uialogue about natuial gas
piouuction by engaging moie thoughtfully anu fiankly in the conveisation. The inuustiy
can builu public tiust by acknowleuging anu auuiessing global, national anu community
conceins such as climate change anu the challenges involveu in iesponsible gas piouuction;
policy makeis anu public-inteiest gioups can engage in fact-baseu, neutial communication
that uemonstiates they unueistanu the inuustiy anu its iole in ensuiing the nation's eneigy
anu economic vitality. The public, anu public policy, aie best seiveu by fiank anu honest
uiscouise that leaus to iational anu thoughtful uecision-making iathei than emotional anu
polaiizeu uebate. Keys to thoughtful uiscouise incluue the following:
Poweiing Foiwaiu
92
O%++:*2 +<% 0'81, 8:2<+: The cuiient conveisation about natuial gas uevelopment is
complicateu by inaccuiacies. Nany inuustiy-ielateu teims aie misuseu anu cieate
confusion. Foi example, the teim "hyuiaulic fiactuiing" is iegulaily misconstiueu to
incluue eveiy aspect ielateu to iesouice uevelopment, iathei than a specific step in the
extiaction piocess. To iuentify anu auuiess people's ieal issues, it's fai moie useful foi
them to focus theii conceins about gas piouuction than to conuemn the entiie piouuction
piocess.

Also, although "oil anu gas" aie viitually conjoineu inuustiies, the two fuels have veiy
uiffeient caibon piofiles that must be iecognizeu to make sounu public policy on issues
such as global climate change.

Anothei impoitant uistinction iegaius methane emissions in the oil anu gas value chain.
While most uiscussion is about "fugitive" emissions - a teim whose negative connotation
the inuustiy uoes not like - intentional emissions (i.e., venting) also aie a souice of
methane emissions.

Some of the issues associateu with natuial gas piouuction aiise fiom misunueistanuings,
some aie the iesult of inauequate uata, some aie highly emotional, anu some aie legitimate.
All of them must be auuiesseu to builu public confiuence that natuial gas is being piouuceu
anu tianspoiteu iesponsibly.

?%(:*:*2 h8%,='*,:#$% =8'19.+:'*i: As noteu eailiei, Piesiuent 0bama anu membeis of
his Auministiation can help the inuustiy, state iegulatois anu the public bettei unueistanu
what "iesponsible piouuction" entails. Theie can be no ieasonable aigument against
iesponsible piouuction, but stakeholueis may uefine "iesponsible" uiffeiently uepenuing
on theii sensitivity to uevelopment timefiames, the goveinment's iole, consumei costs,
community impacts anu enviionmental conceins. What some consiuei iesponsible
iegulation, otheis may consiuei unnecessaiy constiaints on the piouuction of a ciitical
national iesouice. The Piesiuent can uispel confusion about his ciiteiia foi iesponsible
piouuction.

\:2<$:2<+:*2 =8'28%,, ", 0%$$ ", =8'#$%3,> Seveial inuustiy leaueis in the CNEE
uialogue saiu that significant piogiess is being maue in iegaiu to uisclosuie of the
chemicals useu in fiactuiing fluius. While this iemains an issue (uuiing the 2u1S
legislative session, at least 16 bills weie intiouuceu on the subject), inuustiy leaueis say
theie is a cleai tienu touay towaiu moie uisclosuie.

In 2u11, a subcommittee of the Secietaiy of Eneigy's Auvisoiy Boaiu (SEAB) issueu a
iepoit that concluueu, "Theie is no economic oi technical ieason to pievent public
uisclosuie of all chemicals in fiactuiing fluius, with an exception foi genuinely piopiietaiy
infoimation." Touay, a giowing numbei of companies have voluntaiily ieleaseu
infoimation on the chemicals they use in theii hyuiaulic fiactuiing opeiations. Nany of
these companies post theii infoimation on the non-goveinmental FiacFocus website.
14

Poweiing Foiwaiu
9S
States aie engageu on the issue. Seveial iequiie uisclosuie of chemicals useu in hyuiaulic
fiactuiing but allow opeiatois to withholu infoimation on chemicals juugeu to be tiaue
seciets. Legislation on hyuiaulic fiactuiing in gas piouuction was intiouuceu in Su states
uuiing the 2u1S sessions, incluuing 16 bills uealing specifically with the uisclosuies of
fiactuiing agents.
1S
Califoinia's new law on hyuiaulic fiactuiing incluues a uisclosuie
iequiiement
16
. Illinois's iecently enacteu law iequiies opeiatois to "submit both ieuacteu
anu un-ieuacteu lists |of chemicalsj to the Bepaitment of Natuial Resouices, iegaiuless of
any claim of tiaue seciets."
17

Neanwhile, the Ameiican uas Association has issueu a position statement on Responsible
Noturol 6os Resource Bevelopment , which says in pait that uisclosuie is "vital to secuiing
bioau-baseu suppoit foi the continueu uevelopment of natuial gas iesouices".
18

Leaueis in the gas inuustiy expiesseu concein that the public's image of hyuiaulic
fiactuiing uoes not ieflect the impiovements maue in chemical uisclosuie. Inuustiy
paiticipants believe that uisclosuie has been auuiesseu in a significant way by state
iegulations. In fact, most states with oil anu gas extiaction have vaiious uisclosuie
iequiiements in place eithei thiough legislation oi iegulations. Enviionmental anu public
inteiest oiganizations, meanwhile, iemain active in encouiaging moie complete uisclosuie
iequiiements.
19

The Piesiuent can help uiaw attention to these positive uevelopments while
acknowleuging the impoitant iole that iegulatois anu public-inteiest oiganizations play in
continueu oveisight, anu while the Auministiation woiks with states anu the gas inuustiy
on continuing impiovements in tianspaiency.

7*19,+8B@, 8'$% :* +<% .'*D%8,"+:'*. Foi its pait in the conveisation, piouuction
companies anu the inuustiy as a whole shoulu be fiank in acknowleuging pioblems wheie
pioblems exist anu in being iesponsive to legitimate public conceins. As one paiticipant in
the CNEE piocess suggesteu, the message fiom the gas inuustiy shoulu be: "I know you aie
woiiieu. Beie aie the things to be conceineu about. Beie aie the things we aie uoing to
auuiess those conceins, anu heie is the infoimation that will enable you to see how well we
aie uoing."

Anothei cuiient concein of enviionmental leaueis is methane emissions in the natuial gas
value chain - i.e., in piouuction, stoiage anu the pipeline system. Inuustiy leaueis tolu
CNEE that ieuucing these emissions is a shaieu piioiity foi the oil anu gas sectoi anu that
oil anu gas companies place high value on continuous impiovement in emission ieuuctions
as a ciitical component of opeiational efficiency.

Eviuence seems to beai this out. Estimates of methane leakage until iecently have ielieu on
a limiteu numbei of uiiect measuiements, many of which weie collecteu in a 199us stuuy
by EPA anu the uas Reseaich Institute (uRI). Noie iecent estimates have vaiieu
significantly, a ieflection piimaiily of uiffeient assumptions, ieseaich uesigns, anu methous
in uiffeient stuuies.

In Septembei 2u1S, the Pioceeuings of the National Acauemies of
Science (PNAS) publisheu a peei-ievieweu stuuy by the Enviionmental Befense Funu
(EBF) anu the 0niveisity of Texas at Austin (0TA), baseu on uiiect fielu measuiements
Poweiing Foiwaiu
94
collecteu in 2u12-1S at 1Su wells anu othei piouuction facilities acioss the countiy. The
EBF-0TA stuuy founu, baseu on uiiect measuiements that natuial gas sites ielease u.42
peicent of methane piouuceu pei yeai. This is in line with EPA's cuiient emission
Inventoiy estimate foi the piouuction segment of the supply chain. The EPA Inventoiy
estimateu emissions fiom the value chain fiom wellheau to customei equate to 1.S% of
piouuceu gas annually.
2u

EPA estimates that methane emissions fiom natuial gas systems uecieaseu fiom 199u to
2u11 uue in pait to voluntaiy pollution contiol measuies by the inuustiy. 0T iesults weie
heavily influenceu by the wiuespieau auoption of "ieuuceu emissions" completion
technology at the well sites sampleu, some of which is attiibutable to inuustiy anticipation
of feueial iegulatoiy iequiiements to captuie oi flaie gas that became effective in 0ctobei
2u12, uuiing the time in which 0T was in the fielu taking measuiements. The management
of methane emissions must continue to be a high piioiity foi inuustiy anu iegulatois,
paiticulaily with the anticipateu giowth in gas piouuction.
Inuustiy leaueis tell CNEE theie aie numeious nationwiue stuuies unueiway that will help
focus emission ieuuction effoits wheie they aie most neeueu, using the best available
methous. In auuition, EPA's iecent auoption of a v0C iule is a key step in ieuucing oil anu
natuial gas emissions while also pioviuing collateial cuts in methane emissions.

!%$$ <'0 0%@$$ 2%+ +<%8% (8'3 <%8%> The national uialogue can be impioveu by gieatei
fiankness fiom goveinment officials on the challenges anu uiiections of cuiient eneigy
policy (see the next section). The Piesiuent set an excellent example of communicating
values, goals anu specific actions uuiing his climate-action speech in }une 2u1S.
21

Pait of the Auministiation's message shoulu be to acknowleuge that theie is no eneigy
iesouice without some measuie of enviionmental, eneigy anu economic costs ovei its life
cycle. vaiious fuels have uiffeient auvantages baseu on theii emissions piofiles,
piouuction methous, the size anu accessibility of supplies, location of the iesouices,
tianspoitability anu social factois tiauitionally exteinalizeu in ueteimining costs anu
benefits. The key to tianspaient anu iesponsible eneigy policy is to iecognize anu quantify
those factois foi an infoimeu evaluation of oui eneigy choices.

Finally, the Piesiuent can contiibute to a moie infoimeu public uialogue about eneigy
policy anu his vision of a clean eneigy economy by auuiessing how we'll get theie fiom
heie. What is the ioaumap foi the eneigy tiansition. What shoulu the ielative ioles be of
fossil eneigy, ienewable eneigy anu eneigy efficiency. As CSIS noteu in its afoiementioneu
iepoit:
Perbops tbe most importont qool for tbe executive broncb is to set on enerqy vision for
tbe country tbot ollows stokebolJers to qouqe bow tbe qovernment views vorious fuel
sources onJ tecbnoloqies onJ tbe role tbey ploy in reocbinq tbot lonq-term vision.

Poweiing Foiwaiu
9S
!<% H'$% '( N"+:'*"$ A*%82B C'$:.B

Eneigy policy makeis must giapple with an aiiay of uifficult uomestic anu inteinational
issues, among them job cieation, a iobust economy anu national secuiity. CNEE consiueis
the most piessing of these to be global climate uisiuption anu its antiuote, the uevelopment
of a clean eneigy economy. Climate change is an umbiella issue that casts its shauow on
many othei conceins that aie impoitant to the Ameiican people, ianging fiom the peisonal
iisks of extieme weathei events to national secuiity. Whethei policy makeis iegaiu climate
change as a viitual ceitainty oi as a iisk to be manageu, the most impoitant challenge they
face touay is how to close the gap between what climate scientists say is necessaiy anu
what political leaueis believe is possible.

The gap is illustiateu in the Inteinational Eneigy Agency's Woilu Eneigy 0utlook 2u12. It
pieuicts that the 0niteu States will become the woilu's No. 1 oil piouucei by 2u2u; at the
same time, it wains that to avoiu catastiophic climate change, the inteinational community
must leave two-thiius of the woilu's pioven fossil eneigy ieseives in the giounu.
22
The
Piesiuent can help cieate moie thoughtful public uiscussion about the nation's eneigy
choices by cleaily explaining how his policies ieconciles his "all of the above" eneigy policy
anu his commitment to climate action.

H%.'33%*1"+:'*, ('8 C8%,:1%*+:"$ -.+:'*

O'"$ 5> 73=8'D% +<% )'*D%8,"+:'*

The Piesiuent anu the Auministiation shoulu stiive to impiove the quality anu piouuctivity
of the national conveisation about natuial gas piouuction so that policy makeis, iegulatois,
public inteiest oiganizations anu the Ameiican people bettei unueistanu its benefits anu
challenges.

A[%.9+:D% -.+:'*,>

1. )'*19.+ " <'$:,+:. "*"$B,:, '( .',+, "*1 #%*%(:+,4 Biiect the 0.S. Bepaitment of
Eneigy thiough its national laboiatoiies to conuuct an analysis that synthesizes the
many stuuies now unueiway oi iecently completeu on the life-cycle costs anu benefits
of natuial gas piouuction in iegaiu to high-piioiity public conceins. Those conceins
iange fiom conseiving fieshwatei iesouices to ieuucing gieenhouse gas emissions, anu
fiom job cieation to consumei piices.

2. O:D% .$%"8 1:8%.+:'* +' (%1%8"$ "2%*.:%,4 Issue a Piesiuential Nemoianuum to feueial
agencies cleaily stating that the Auministiation's policy is to ensuie the piuuent
piouuction of natuial gas in enviionmentally anu socially iesponsible ways, anu to
make use of existing statutoiy authoiities to achieve this objective. Emphasize that both
paits of this policy - "iesponsible" anu "piouuction" - aie equal in impoitance.

Poweiing Foiwaiu
96
S. P9:$1 3'8% .'$$"#'8"+:'* 0:+< ,+"+% "*1 $'."$ 2'D%8*3%*+,. Nake cleai to feueial
agencies that the enviionmental anu social issues ielateu to gas piouuction - among
them aii quality conceins in some states, flaiing in otheis, anu the piopei balance
between CBI anu uisclosuie - shoulu be auuiesseu collaboiatively among feueial, state
anu local goveinments, along with public-inteiest oiganizations, eneigy companies anu
the public. Emphasize that many of the tools anu much of the infoimation we neeu to
engage in enviionmentally anu socially iesponsible eneigy piouuction alieauy exist anu
can be bettei useu; wheie they uon't exist, the Auministiation will woik with the gas
inuustiy, public-inteiest oiganizations anu the ieseaich community to obtain oi cieate
them.

O'"$ E> A*<"*.% F%1%8"$XS+"+%XS+"/%<'$1%8 )'$$"#'8"+:'*

As mentioneu eailiei, many of the piincipal iesponsibilities in woiking with the natuial gas
inuustiy iesiue in the states. The Feueial uoveinment's iesponsibilities anu authoiities
coulu be bettei cooiuinateu with the states' ioles. In auuition, the Piesiuent can use those
convening poweis to facilitate moie open anu fiequent inteiaction among the gas inuustiy,
states anu stakeholueis.

A[%.9+:D% -.+:'*,>

1. -,/ ,+"+%, (:8,+4 A fiist step in fuithei unueistanuing how the Feueial uoveinment can
help ensuie the piuuent uevelopment of natuial gas is woik closely with the states in
unueistanuing wheie gaps anu ueficiencies cuiiently exist in feueial oi state
iegulations. A constiuctive step in this uiiection is to suivey the states wheie
piouuction is occuiiing to ask them wheie they neeu feueial assistance. This shoulu be
an ongoing uialogue anu a piecuisoi to the launch of any feueial level initiative.

2. A*2"2% +<% N"+:'*"$ O'D%8*'8, -,,'.:"+:'* bNO-c4 Piopose to the NuA that it be the
key link between the Feueial uoveinment anu gas-piouucing states, with the objective
of impioving cooiuination anu infoimation shaiing among feueial, state anu local
goveinments.

S. )8%"+% " =9#$:.X=8:D"+% 8%,%"8.< :*,+:+9+%4 ARPA-E is an exemplaiy feueial ieseaich
piogiam, but it uoesn't focus on the applieu ieseaich neeueu foi continuous
impiovement of natuial gas value chain. The Piesiuent can speaiheau the cieation of a
new public-piivate ieseaich institute
2S
that:

a) Biings key oiganizations togethei fiom the natuial gas inuustiy, national
laboiatoiies anu euucational institutions to set R&B agenuas aimeu at minimizing
the inuustiy's enviionmental anu social footpiint;
24

b) Pioviues a cleaiinghouse that tiacks the evolution of the inuustiy's most effective
piactices foi iesponsible piouuction anu the states' most exemplaiy policies foi
iesponsible piouuction on public anu piivate lanus;
2S

Poweiing Foiwaiu
97
c) Belps the natuial gas inuustiy with the uiffusion anu consistent ieplication of
pioven mitigation technologies anu piefeiieu piactices in the fielu.

4. )$"8:(B "*1 ,+8%"3$:*% ":8 %3:,,:'* ,+"*1"81,4 Woik with states to uevelop aii
emissions stanuaius anu iegulations that piotect public health anu the enviionment
while ievising existing iegulations to make them cleaiei, moie effective, anu moie
easily implementeu anu enfoiceu (e.g., the iecently finalizeu New Souice Peifoimance
Stanuaius that EPA issueu in 2u12 to limit emissions of volatile oiganic compounus anu
hazaiuous aii pollutants fiom oil anu gas opeiations). In auuition to feueial
iulemaking, the EPA can lenu ieseaich anu technical capacity to states puisuing state-
level iegulation. Paitneiships with othei agencies such as B0E anu the National
0ceanic anu Atmospheiic Auministiation (N0AA) coulu enable access to moie
auvanceu technologies such as iemote sensing to inciease compliance iates.
26

S. )'$$"#'8"+% +' :3=8'D% :*,=%.+:'*, "*1 %*('8.%3%*+4 In iegaiu to the enfoicement
of enviionmental iules, the iapiu expansion of natuial gas piouuction in some states
has iaiseu conceins they aie not able to hiie enough inspectois to keep up with the
boom in natuial gas piouuction to ensuie that iegulations aie enfoiceu.
27
Public
confiuence will inciease anu enfoicement of iegulations will be stiengtheneu by
ietaining qualifieu inspectois, by tiaining new inspectois anu by ensuiing that states
anu the feueial iegulatoiy agencies aie auequately staffeu. Recommenu that the Shale
uas Piouuction Subcommittee of the SEAB woik with the NuA to:

a) Assess the auequacy of compliance inspections in the fielu - the numbei of
inspectois, whethei they aie paiu sufficient wages to keep them on the job, anu
whethei theii tiaining is auequate to ueal with iapiu changes in piouuction anu
uistiibution methous. Piopose sustainable souices of funuing foi states with majoi
incieases in natuial gas piouuction to maintain auequate numbeis of inspectois.

b) Investigate the optimal scenaiio foi inspecting anu monitoiing natuial gas wells anu
uistiibution systems: i.e., the most cost-effective anu enfoicement-effective mix of
monitoiing technology anu fielu inspectois, incluuing the optimal iatio of inspectois
to pipeline miles.

c) In paitneiship with state univeisities, uevelop iegional tiaining centeis foi peimit
wiiteis anu inspectois anu auopt woikei tiaining anu ceitification piogiams to help
ensuie we have a tiaineu, ceitifieu, qualifieu woikfoice to uo the jobs iequiieu on
both the iegulatoiy anu piouuction siues of the fence.

6. I"/% .'$$"#'8"+:'* D:,:#$%. Announce the Nemoianuum pioposeu in 1(b) above at an
event in which the Piesiuent, inuustiy leaueis anu the leaueis of enviionmental anu
othei public inteiest oiganizations stanu siue-by-siue. Explain the ciitical iole that
Ameiica's gas iesouices have in the nation's tiansition to a clean anu stable eneigy
economy. Announce veiifiable commitments by stakeholueis to woik togethei on
iesponsible piouuction. In auuition, cieate a commission that iepiesents the uiveise
aiiay of stakeholueis in natuial gas piouuction - piouuceis, iegulatois, acauemics,
Poweiing Foiwaiu
98
public-inteiest oiganizations, ieseaicheis, etc. - foi an ongoing uialogue that incieases
inteiaction among the natuial gas inuustiy anu its stakeholueis.
28
Beteimine whethei
the NPC can fill this iole if it's given gieatei public visibility.
29

O'"$ G> -1D"*.% S.:%*.%_ !%.<*'$'2B_ "*1 H%.'33%*1%1 C8".+:.%, +'
A*<"*.% N"+98"$ O", C8'19.+:'* :* Q"B, +<"+ I:*:3:]% A*D:8'*3%*+"$
"*1 S'.:"$ H:,/,

Inuustiy paiticipants in the CNEE uialogue pointeu out that while it's impoitant to iuentify
anu communicate iecommenueu piouuction piactices, the piactices aie constantly
evolving. Beveloping anu shaiing them must be an ongoing piocess. Seveial inuustiy
stakeholueis noteu that iecommenueu piactices shoulu be technically anu economically
feasible, anu that the teim "best piactice" shoulu be avoiueu because it seems to imply that
"one size fits all" when iesponsible piouuction piactices often aie unique to the company,
community, anu methous they employ. Inuustiy also pointeu out that iecommenueu
stanuaius anu piactices aie alieauy in existence anu aie uevelopeu thiough the Ameiican
National Stanuaius Institute (ANSI) accieuiteu stanuaius uevelopment piocess at
API. These API stanuaius aie iegulaily citeu in goveinment iegulations.

A[%.9+:D% -.+:'*,>

1. P8'/%8 3'8% .'$$"#'8"+:D% HZ?4 0se the Piesiuent's convening powei to biokei new
R&B collaboiations among goveinment, enviionmental anu eneigy oiganizations to
impiove oui unueistanuing of the oppoitunities anu challenges in iesponsible natuial
gas piouuction.
Su

2. 7*.%*+:D:]% .'*+:*9'9, :3=8'D%3%*+4 Cieate a piesiuential "ueoige P. Nitchell
Awaiu"
S1
foi oiganizations involveu in natuial gas piouuction, moueleu loosely on the
Nalcolm Baluiige National Quality Awaiu.
S2
Cieate thiee categoiies in the Awaiu: 1)
excellence in total enviionmental anu opeiational peifoimance; 2) exceptional
innovation that minimizes the enviionmental anu social footpiint of the natuial gas
value chain without saciificing piouuction; anu S) a uemonstiateu commitment to
auvancing uialogue anu collaboiation among natuial gas piouuceis, iegulatois anu
public inteiest oiganizations.
SS

S. S+8%*2+<%* ,9=='8+ ('8 '82"*:]"+:'*, "*1 =8'28"3, +<"+ ",,:,+ ,+"+%, 0:+<
8%,%"8.< "*1 8%29$"+'8B 8%,='*,:#:$:+:%,4 They incluue:

a) S!H`NOAH> Encouiage moie suppoit incluuing auuitional funus foi the State
Review of 0il anu Natuial uas Enviionmental Regulations (STR0NuER)
S4
to seive as
a mechanism foi ieviewing state iegulatoiy piogiams, shaiing iecommenueu
piactices, anu ueveloping piogiams to piomote continuous impiovement.
Encouiage the NuA to woik with STR0NuER anu othei similai gioups to uevelop a
tiaining piogiam on natuial gas iegulation. Request that STR0NuER iuentify gaps in
Poweiing Foiwaiu
99
the feueialstate iegulatoiy fiamewoik (the so-calleu "seams" issues) anu
iecommenu how the gaps shoulu be auuiesseu.

b) N"+98"$ O", S!-H: Inuustiy iepiesentatives tolu CNEE that the piogiam has been
pioblematic anu that theie aie questions about whethei Natuial uas STAR is still
necessaiy given EPA's emissions iepoiting iequiiements unuei Subpait W.
SS
Public-
inteiest iepiesentatives saiu Natuial uas STAR woulu be moie useful if it weie
expanueu to moie extensively inventoiy, tiack, anu evaluate the use of best
piactices foi the measuiement anu contiol of aii emissions associateu with all
natuial gas lifecycle stages, incluuing piouuction, piocessing, tiansmission stoiage
anu uistiibution.

c) H%,%"8.< C"8+*%8,<:= +' S%.98% A*%82B ('8 -3%8:." bHCSA-c> RPSEA is a non-
piofit coipoiation consisting of 0.S. eneigy ieseaich univeisities, inuustiy anu
inuepenuent ieseaich oiganizations. Its mission is to "pioviue a stewaiuship iole in
ensuiing the focuseu ieseaich, uevelopment anu ueployment of safe,
enviionmentally sensitive technology that can effectively uelivei hyuiocaibons fiom
uomestic iesouices to the citizens of the 0niteu States."

u) !"/% S+'./ '( A[%.9+:D% !''$,> Biiect agencies to inventoiy all statutoiy
authoiities peitaining to iesponsible piouuction of natuial gas, anu to assess if anu
how those tools aie being employeu. Biiect the Council on Enviionmental Quality
(CEQ) anu the 0ffice of Science anu Technology Policy (0STP) to oveisee this
exeicise anu to iecommenu impiovements in the use of the authoiities, minuful of
the neeu to ensuie that iegulations anu iules must be necessaiy anu auministeieu
with a minimum of ieu tape.

O'"$ M> P9:$1 +<% 7*('83"+:'* "*1 j*'0$%12% P",%

In the liteiatuie anu in uialogue with stakeholueis, uata comes up often as an issue. Is theie
enough of it, wheie aie the gaps, anu why is not existing uata bettei useu. A common
concein is that goveinment will iequiie uata foi uata's sake. In some cases, the most
impoitant "uata" aie what feueial anu state agencies can leain fiom each othei with bettei
communication.

0ne iecent case wheie public inteiest oiganizations auvocateu foi moie uata involves the
Emeigency Planning anu Community Right to Know Act's Toxics Release Inventoiy (TRI).
0il anu gas opeiatois cuiiently aie not iequiieu to iepoit annual ieleases of toxic
chemicals unuei TRI. In 0ctobei 2u12, 17 public inteiest oiganizations petitioneu EPA to
uevelop a iule that woulu iequiie oil anu gas opeiatois to engage in TRI iepoiting.

A[%.9+:D% -.+:'*,>

1. I"= +<% *"+:'*@, 0"+%8 8%,'98.%,. Biiect the 0niteu States ueological Seivice (0SuS)
to conuuct a compiehensive stuuy that chaiacteiizes, maps anu estimates the long-teim
Poweiing Foiwaiu
1uu
stability of biackish anu fieshwatei aquifeis in the 0niteu States. The stuuy woulu
infoim a national stiategy on watei use in eneigy piouuction anu consumption,
incluuing how watei iesouices might be allocateu to seive municipalities, businesses
anu agiicultuie as well as the eneigy inuustiy. Follow this stuuy with analyses by othei
qualifieu agencies of technology options to auuiess watei challenges, anu of the types
anu techniques of eneigy piouuction that offei the best oppoitunities foi conseiving
anu piotecting watei iesouices.
S6

2. A[="*1 +<% a9"18%**:"$ A*%82B H%D:%0 baAHc4 Expanu the mission of the QER
S7
to
incluue the influence of eneigy policy on foou, watei, climate anu othei elements of the
enviionment. Biiect the QER to assess the inteiielationship between these elements,
foi example pioviuing a life-cycle assessment of watei consumptionBtu foi uiffeient
eneigy options.
S8

O'"$ U> S+8%*2+<%* +<% 7*19,+8B@, S'.:"$ W:.%*,% +' `=%8"+%
GK

In iesponse to the iapiu expansion of uomestic natuial gas uevelopment, a numbei of local
communities have expiesseu conceins about the potential health anu lanu use impacts.
Key conceins incluue giounu anu suiface watei piotection, aii quality impacts, anu
incieaseu tiaffic, uust, anu noise. Some county anu municipal goveinments have
iesponueu to these conceins by enacting oi consiueiing bans oi tempoiaiy moiatoiia on
hyuiaulic fiactuiing anu, in some cases, on oil anu gas uevelopment altogethei.

In some natuial gas piouucing states, legislation has been pioposeu oi enacteu to limit the
powei of local goveinments to iegulate unconventional natuial gas uevelopment. 0f the Su
bills ielateu to hyuiaulic fiactuiing intiouuceu in state legislatuies uuiing the 2u1S
session, 2u imposeu some foim of ban oi moiatoiium.
4u

A[%.9+:D% -.+:'*,>

1. -./*'0$%12% .<"$$%*2%, "*1 ,='+$:2<+ ,'$9+:'*,4 Both the Feueial uoveinment anu
the inuustiy shoulu fiankly acknowleuge the iisks anu issues of gas piouuction anu
uistiibution about which the public is conceineu, at both the community anu national
levels. The Piesiuent anu officials in his Auministiation shoulu moie cleaily
communicate how agencies chaigeu with piotecting the public inteiest aie auuiessing
enviionmental anu public health issues associateu with oil anu gas piouuction.

2. I"/% #%++%8 9,% '( 1"+"4 Nake feueial uIS capabilities available to county anu
municipal officials to assist them in theii planning. Biiect B0E to task the NPC with
assessing the iole anu sufficiency of cuiient metiics, uata anu peifoimance evaluation
methous. The NPC shoulu iuentify how existing uata can be maue moie accessible anu
bettei useu, wheie gaps exist in each aiea, anu how best to fill the gaps to bettei infoim
the gas inuustiy, goveinment iegulatois, state legislatuies, anu the geneial public.
41

Poweiing Foiwaiu
1u1
S. F".:$:+"+% +<% 8%,'$9+:'* '( /%B :,,9%,4 Request that the NuA ieview how states aie
uefining anu hanuling Confiuential Business Infoimation (CBI) in iegaiu to the
uisclosuie of the contents of fiactuiing fluius. Request that the NuA iecommenu a
ciiteiia foi iuentifying legitimate CBI while piotecting the public's neeu to know anu the
inuustiy's iight to piotect tiaue seciets.

O'"$ 6> I:*:3:]% A*D:8'*3%*+"$ 73=".+, :* +<% R"$9% )<":*

As mentioneu eailiei, enviionmental conceins associateu with gas piouuction incluue
intentional anu unintentional emissions of methane. The iesponsible management of watei
useu in hyuiaulic fiactuiing anu piouuceu in the extiaction piocess also is an issue.
Nethane is a potent gieenhouse gas, with moie than 2u times the global waiming impact of
C02 when emitteu uiiectly to the atmospheie. Estimates of methane leakage until iecently
have ielieu on a limiteu numbei of uiiect measuiements, many of which weie collecteu in a
199us stuuy by EPA anu the uas Reseaich Institute (uRI).

Seveial significant uevelopments aie emeiging in iegaiu to the inuustiy's methane
emissions. In Febiuaiy 2u1S, EPA's uieenhouse uas Repoiting Piogiam publisheu its fiist
emissions uata fiom petioleum anu natuial gas facilities. In }une 2u1S, the Piesiuent
announceu his climate action plan, which uiiects EPA, B0E, Agiicultuie, Inteiioi, Laboi anu
Tianspoitation to uevelop a compiehensive Inteiagency Nethane Stiategy that assesses
cuiient emissions uata anu uata gaps, iuentifies exemplaiy piactices anu technologies foi
emission ieuuctions, anu inventoiies existing authoiities anu incentives to ieuuce methane
leaks. In Septembei 2u1S, EPA publisheu a pioposeu iule that woulu iequiie oil anu gas
companies to publicly iepoit the amount of gieenhouse gases they ielease each yeai.

A[%.9+:D% -.+:'*,>

1. )8%"+% " *"+:'*"$ 3%+<"*% $%"/X8%19.+:'* ,+8"+%2B> Biiect the Council on
Enviionmental Quality (CEQ) anu the 0ffice of Science anu Technology Policy (0STP) to
woik with state iegulatois anu the natuial gas inuustiy to uesign a cost-effective
national methane leak-ieuuction stiategy; to align feueial agencies to help implement
it; anu to cooiuinate on theii ongoing effoits to measuie, monitoi, anu ieuuce methane
venting, flaiing, anu leakage. In auuition, uiiect the agencies to:

a) Reach agieement on guiuelines that inuicate a ceiling on the amount of methane that
can be ieleaseu fiom the natuial gas value chain while ietaining the iesouice's
auvantages ovei coal anu oil in iegaiu to gieenhouse gas emissions.
42

b) Assess anu quantify to the extent possible the economic anu enviionmental benefits
to the inuustiy anu the public of keeping methane emissions below that level.

2. A3=$'B *%0 +%.<*'$'2:%, +' 8%19.% 3'*:+'8:*2 .',+,4 Biiect EPA to tiack anu
communicate emeiging technologies that pioviue less expensive ways to uetect methane
leaks that inciease the caibon footpiint of the gas value chain.
Poweiing Foiwaiu
1u2

S. -..%$%8"+% 8%,%"8.<4 Biiect ARPA-E to facilitate R&B on natuial gas emissions hotspots
anu the most cost effective ways to monitoi anu pievent methane leakage.

O'"$ ;> ?%3'*,+8"+% P%,+ -D":$"#$% )',+XA((%.+:D% "*1 S:+%X-==8'=8:"+%
C8'19.+:'* C8".+:.%, '* F%1%8"$ W"*1,
MG

Bata compileu by the Congiessional Reseaich Seivice (CRS) show natuial gas piouuction
on feueial lanus constituteu neaily 18% of the 0.S. total (uown fiom a high of 26.4% in
2uu8). The CRS iepoits theie weie moie than 49,2uu oil anu gas leases foi piouuction
fiom onshoie feueial lanus anu moie than 6,6uu leases foi piouuction on offshoie feueial
lanus in 2u12. Some S7 million acies of onshoie anu neaily S6 million acies of offshoie
feueial lanus weie unuei lease last yeai.

BLN has uiafteu anu iecently extenueu the comment peiiou on a pioposeu iule goveining
hyuiaulic fiactuiing on feueial lanus. The uiaft iule has been ciiticizeu by some states, by
some in the oil anu gas inuustiy anu by seveial enviionmental oiganizations. 0fficials in
Noith Bakota, foi example, ciiticizeu the iule's piovisions on hyuiaulic fiactuiing anu its
iequiiement that exemptions to the new iule woulu be consiueieu on an opeiatoi-by-
opeiatoi basis iathei than allowing blanket exemptions within state boiueis.
Enviionmental gioups have ciiticizeu piovisions that woulu iequiie piouuceis to uisclose
the contents of theii fiactuiing agents, but not until aftei uiilling begins.

A[%.9+:D% -.+:'*,>

1. ?%3'*,+8"+% 8%,='*,:#$% =8'19.+:'* 3%+<'1,4 Biiect BLN, in its final iule anu in
guiuance, to encouiage natuial gas piouuceis to use iegionally appiopiiate methous foi
enviionmentally iesponsible piouuction on feueial lanus, while woiking with states
anu tiibes to avoiu uuplication of effoits, to stimulate innovation, anu to iecognize
states' anu tiibes' unique knowleuge of the geology anu othei chaiacteiistics of theii
iegions. Biiect othei feueial offices anu agencies to peiiouically consult with BLN to
iuentify best available technologies anu piactices. Biiect BLN to pay specific attention
to exemplaiy piactices by states on wellboie integiity, watei management anu methane
captuie.

2. ?%3'*,+8"+% (9$$ 1:,.$',98% '( .<%3:."$, 9,%1 :* <B18"9$:. (8".+98:*2_ .'*,:,+%*+
0:+< +<% =8'+%.+:'* '( )P7: ueneially suppoit the 2u11 iecommenuations of the SEAB
Shale uas Piouuction Subcommittee, incluuing a iequiiement foi full uisclosuie of
fiactuiing agents in oil anu gas piouuction on feueial lanus. 0se the BLN's upcoming
iule on gas piouuction on Feueial anu Inuian Lanus to uemonstiate the appiopiiate
balance between piopiietaiy issues anu the public's iight to know. Ensuie that the final
iule cleaily uefines CBI to ensuie that non-uisclosuie is alloweu only when the neeu foi
confiuentiality is justifieu.

Poweiing Foiwaiu
1uS
O'"$ J> N"+98"$ O", C:=%$:*% 7,,9%,

CNEE's piincipal focus in this white papei is natuial gas piouuction. Bowevei, the uialogue
with inuustiy anu enviionmental leaueis iuentifieu seveial issues anu iecommenuations
ielateu to gas uistiibution.

A[%.9+:D% -.+:'*,>

1. -1%Y9"+% :*,=%.+:'*4 Biiect the BBS, incluuing the Pipelines anu Bazaiuous Nateiials
Safety Auministiation (PBNSA)
44
, to woik with Inteistate Natuial uas Association of
Ameiica (INuAA), Ameiica's Natuial uas Alliance (ANuA), the Ameiican uas Association
(AuA) anu othei key inuustiy oiganizations to iuentify sustainable alteinative funuing
foi states to auequately staff theii pipeline inspection piogiams. Although theie have
been mouest incieases in the numbei of feueial inspectois in iecent yeais, the pipeline
safety inspection piogiams aie iepoiteu to be chionically unueistaffeu (CRS 2u1S, p.
17). The inspection piogiam ielies heavily on states, many of which aie uealing with
buuget shoitfalls, anu the piospect is unceitain foi significant feueial buuget incieases.
This issue, iaiseu in iefeience to piouuction site inspectois in iecommenuation 2(e)
applies to pipelines anu to pipeline secuiity as well as safety accoiuing to the
Congiessional Reseaich Seivice piogiams (CRS 2u1S, p. 19).

2. C:=%$:*% ,"(%+B "*1 ,%.98:+B4
MU
Ensuie that the BBS has implementeu the 2u12
iecommenuations of the uoveinment Accountability 0ffice's Criticol lnfrostructure
Protection iepoit as it applies to natuial gas infiastiuctuie. In auuition, ensuie that the
seveial agencies with iesponsibilities ielateu to natuial gas pipeline siting, secuiity anu
safety - incluuing the B0T, BBS anu FERC - collaboiate closely to piotect the system
not only fiom tiauitional iisks, but also fiom emeiging iisks such as extieme weathei
events, floouing, fiie anu othei climate impacts. Encouiage FERC to consiuei anticipateu
climate impacts anu ielateu safety conceins in the siting of inteistate pipelines.

S. F",+%8 =%83:++:*24 Biiect the E0 1S6u4 Steeiing Committee to woik with all feueial
siting anu natuial iesouice agencies in the appioval chain incluuing FERC to iuentify
auuitional ways to stieamline inteistate pipeline peimitting anu to ensuie that new
infiastiuctuie is built anu maintaineu to the highest safety anu enviionmental
stanuaius. Biiect the Steeiing Committee to iuentify how agencies can stieamline the
au-hoc ieviews, appiovals anu peimits iequiieu foi intiastate natuial gas pipelines anu
uistiibution piojects, incluuing peimits foi impoitant opeiations, maintenance, anu
pipeline safety woik iequiieu to ievitalize existing infiastiuctuie.
46

4. A"8$B .''81:*"+:'* '( 39$+:=$% (%1%8"$_ ,+"+% "*1 $'."$ 8%D:%0,4 Biiect feueial
agencies that issue peimits foi natuial gas piojects, incluuing intiastate natuial gas
tiansmission anu uistiibution piojects that might affect feueial lanus, wateis, oi
piotecteu species, to holu stiategic engagement meetings with peimit applicants to
ueteimine how the agencies can seive as effective liaisons with the othei multiple state,
Poweiing Foiwaiu
1u4
feueial, tiibal anu local agencies that must pioviue peimits anu appiovals foi the same
piojects
47

S. 7C") ,'(+0"8%4 Piioiitize anu expeuite the uevelopment of the 0.S. Fish anu Wilulife
Seivice IPaC softwaie piogiam so pioject applicants can make infoimeu uecisions
about whethei ceitain feueial peimits anu ieviews aie necessaiy, whethei
enviionmental impacts can be avoiueu altogethei on a pioposeu pioject ioute anu
whethei pioven enviionmental mitigation piactices alieauy exist foi specific habitats,
species anu aieas.

6. O%*%8"$ =%83:++:*2 =8'28"3 ('8 3:*'8 =8'^%.+,4 Inciease the scope anu applicability
of geneial anu state-wiue peimits unuei existing feueial enviionmental iegulatoiy
piogiams to covei minoi, tempoiaiy natuial gas piojects that iequiie ioutine
opeiations anu maintenance, iepaiis, integiity testing anu safety-ielateu, oi time-
sensitive woik (incluuing wetlanus peimitting by the 0.S. Aimy Coips of Engineeis anu
stoim watei peimits issueu by states anu localities unuei uelegateu authoiity fiom the
EPA). Ensuie that geneial peimitting is not alloweu foi companies that have a iecoiu of
pooi enviionmental anu opeiational peifoimance.

7. )'*,:,+%*+ .'3=$:"*.% 8%Y9:8%3%*+,4 Foim an inteiagency woiking gioup to uevelop
consistent iegulatoiy compliance iequiiements, guiuelines anu timelines acioss
agencies that shaie iesponsibility foi peimitting piogiams. An example is cooiuination
between the iegional anu national heauquaiteis of the Aimy Coips of Engineeis, anu
the Auvisoiy Council on Bistoiic Pieseivation, to ensuie that cultuialhistoiicaltiibal
iesouice peimitting iegulations aie iegionally anu nationally consistent anu to ensuie
iegulatoiy timelines foi pioject appiovals aie enfoiceable.

Poweiing Foiwaiu
1uS

)<"=+%8 U> V+:$:+B P9,:*%,, I'1%$, ('8 +<% E5
,+

)%*+98B

To ieview its iecommenuations foi piesiuential action, CNEE conuucteu a iounutable in
Aspen, C0, that involveu iepiesentatives of the electiic geneiation, uistiibution anu
iegulatoiy sectois along with iepiesentatives of public inteiest anu enviionmental
oiganizations. These themes anu messages emeigeu:
Cuiient iegulatoiy mouels, piactices anu time-consuming piocesses aie lagging
behinu emeiging electiic technologies anu geneiation options. This inhibits
piogiess by utilities that want to implement 21st centuiy business mouels anu
want to help the nation achieve a clean eneigy economy at the pace envisioneu by
the Piesiuent. The 0niteu States must finu new mouels that uemonstiate how the
electiic system can auapt to the nation's neeu to uouble its eneigy piouuctivity,
integiate uistiibuteu eneigy systems anu accommouate laige amounts of
ienewable eneigy in the powei system. Feueial assets such as the Powei
Naiketing Auministiations anu Tennessee valley Authoiity shoulu uemonstiate
these new mouels.

Removing iegulatoiy baiiieis, upuating policies, anu stieamlining piocesses
shoulu be a cential focus of iegulatois at the state anu feueial levels so that
utilities anu othei powei sectoi businesses can evolve effectively as uisiuptive
geneiation, bulk powei solutions such as stoiage anu uemanu iesponse, anu
infoimation technologies emeige.

0tilities neeu to foimulate anu communicate a vision foi theii futuiea
compelling anu coheient set of goals that motivate iapiu inciemental piogiess
acioss a vaiiety of maikets, opeiations, anu investments. The Piesiuent shoulu
use his convening powei to cieate an oppoitunity foi paiticipants in the many
"utility of the futuie" exeicises to synthesize theii iueas.

The Piesiuent shoulu encouiage policies that leau to laigei iegional maikets that
suppoit a 21st centuiy giiu that effectively integiates new clean iesouices in a
ieliable mannei. Those policies can "stait at home" in the PNAs, FERC anu the
goveinment's own eneigy piouuction anu consumption.

Poweiing Foiwaiu
1u6
While utility leaueis in the CNEE uialogue iuentifieu the challenges summaiizeu above,
they also iegaiu the ievolutionaiy changes in theii inuustiy as an oppoitunity. They aie
eagei to face the challenge - except foi one ciitical pioblem that became a iecuiiing theme:

!<% *"+:'*@, %*%82B +%.<*'$'2:%, "*1 *%%1, "8% "1D"*.:*2 (",+%8 +<"* +<% 89$%,_
8"+%, "*1 "13:*:,+8"+:D% =8'.%,,%, +<"+ 2'D%8* <'0 -3%8:."@, 9+:$:+:%, '=%8"+%4
H9$%, "*1 =8'.%198%, *%%1 +' #% ,+8%"3$:*%1_ 3'1%8*:]%1 "*1 8%('83%1 +' <%$=
9+:$:+:%, 8%,='*1 +' .<"*2%, :* +%.<*'$'2B "*1 3"8/%+,_ "*1 +' ".<:%D% +<%
C8%,:1%*+@, ='$:.B '#^%.+:D%, ('8 " .$%"* %*%82B %.'*'3B4

Although electiic anu gas utilities aie opeiateu unuei vaiying business mouels with vaiious
levels of state anu feueial iegulation, most uepenu on piivate capital investment. Still, the
Feueial uoveinment has the powei to expeuite the ievolution anu make it less uisiuptive.
Inuustiy paiticipants stiesseu the impoitance of the Piesiuent taking action at the "Su,uuu-
foot" level.

!<% )8:+:."$ H'$% '( +<% V+:$:+B 7*19,+8B :* +<% C"+< F'80"81> Electiic anu gas utility
investments aie changing iapiuly. Beployment of eneigy efficiency anu uistiibuteu
geneiation is expanuing (although inconsistently) acioss the countiy. In auuition, iecoiu
low natuial gas piices anu penuing Clean Aii Act iules aie making the fleet shift fiom coal
to cleanei iesouices moie viable. Simultaneously, policy makeis, utilities anu iegulatois
aie giving gieatei attention to moueinizing utility business mouels anu iegulation.

0tilities iecognize the challenge befoie them anu the incieasing iole of technology. At the
heait of this challenge is the application of a 2u
th
centuiy iegulatoiy mouel foi a 21
st

centuiy economy. Tiauitional, volume-baseu iate setting as a means of iecoveiing
embeuueu costs of uepieciateu assets is still common. When volume-baseu iegulation was
put in place, howevei, laige-scale geneiation maue sense anu utility loau was giowing.
Touay, loau is ueclining, utilities aie iequiieu to achieve vaiious eneigy efficiency anu
ienewable eneigy manuates that they may oi may not be compensateu foi, consumeis aie
asking foi new piouucts anu seivices, anu a tienu has taken holu towaiu uistiibuteu,
inteimittent powei souices.

0tilities aie not the baiiiei to the path foiwaiu. CNEE believes that they aie the linchpins
to implementing a low-caibon eneigy economy by using cleanei fuels to geneiate
electiicity, helping to electiify the tianspoitation sectoi anu pioviuing the enhanceu
seivices that customeis aie incieasingly uemanuing. 0tilities pioviue moie than just powei
anu eneigy. They aie funuamental to oui economy. As one paiticipant put it "0tilities make
life happen." Yet, foi millions of Ameiicans, that value is only acknowleugeu when the
powei goes out.

!<% C8%,:1%*+@, 8'$% :* +<% *"+:'*"$ *"88"+:D%> The Piesiuent can be the voice above the
fiay in the national uiscussion of 21
st
centuiy powei systems. Be can help cieate a new
national naiiative about the utility inuustiy anu its iole in the life of viitually eveiy
Ameiican. In so uoing, he can builu public suppoit foi the changes aheau, some of which
will have uiiect impact on utility customeis.
Poweiing Foiwaiu
1u7
Fiist, he can issue a bolu call to action foi all elements of the utility inuustiy, incluuing its
customeis. Be can convene inuustiy leaueis to achieve a unifying vision foi how this
fiagmenteu inuustiy anu all its moving paits will geneiate, uelivei anu manage clean
electiic powei foi the Ameiican people. Be can help communicate the vision. Be can help
fiame the uiscussion by suggesting that the 21
st
centuiy utility shoulu:

Pioviue ieliable anu affoiuable electiicity to consumeis thioughout the countiy.
Piouuce anu suppoit a uynamic economy anu goou jobs.
Achieve ieasonable ietuins on investments, offei customeis ieasonable iates anu align
utility piofits with public inteiests.
Become sufficiently iesilient to pioviue ieliable electiic powei, even with the incieasing
challenges of global climate change anu system cybei secuiity.
Piouuce anu uistiibute electiicity while accommouating consumei siue of the metei
inteiaction with maximum iesouice efficiency anu minimum enviionmental impact.
Plan effectively to ieuuce iisks to the powei system anu its seivices anu to achieve
lowei investment costs.
Fostei innovation anu new consumei value while maintaining the ieliability of the giiu
anu pieseiving integiity of existing maikets.
Finu ways to stoie both its eneigy anu its caibon economically.
Piioiitize its iesouices baseu on an assessment of all benefits anu costs to society.
Set high stanuaius foi tianspaiency, peifoimance anu accountability.

Seconu, the Piesiuent can help utilities piepaie customeis foi theii iole by being fiank
about how moueinization may affect them. Be can explain that:

The 21
st
centuiy powei system will uelivei new value anu seivices, both tangible anu
intangible, to the Ameiican people.

The system's moueinization will iequiie significant public anu piivate investment.
While this may mean upwaiu piessuies on electiic iates in the futuie
1
, out of pocket
costs in customei bills (as opposeu to iates) can be ieuuceu with intelligent policies
that focus on what neeus to be built, a ieliance on competitive maikets iathei than state
subsiuies, eneigy efficiency measuies anu uistiibuteu geneiation.

0tility customeis have an active iole to play in the changes aheau. By incieasing the
efficiency of theii eneigy use, by becoming powei geneiatois in theii own iight, anu by
suppoiting the leaueis anu policies that move the nation to a clean eneigy economy,
utility customeis will be an intiinsic pait of the 21
st
centuiy powei system.

Extieme weathei events such as floous, wilufiies, uiought, heavy snow anu iainfalls anu
coastal stoims aie focusing oui attention on the neeu foi gieatei iesilience in oui
electiic infiastiuctuie. 0tilities must engage in continuous impiovement of the system's
iesilience befoie as well as aftei these uisasteis to mitigate anu auapt to the impacts of
global climate change. At the same time we impiove the system's iesilience, we must
impiove its ieliability.
Poweiing Foiwaiu
1u8

Thiiu, as mentioneu above, the Piesiuent can help inciease the public's appieciation of how
vital the utility sectoi is to oui economy anu quality of life. Inuustiy leaueis say that
customeis only appieciate electiic powei when the lights go out. The invisible ieality is
that Ameiica's electiic anu gas utilities pioviue value neaily eveiy minute of eveiy uay in
eveiy householu, business, factoiy anu community. 0tilities suppoit laige local woikfoices;
theii own woikeis aie unsung heioes who aie among the fiist iesponueis aftei natuial
uisasteis, woiking in uangeious conuitions to iestoie vital eneigy seivices. The Piesiuent
can help biing these unueiappieciateu contiibutions to light.

)"9+:'*, -#'9+ F%1%8"$ W%"1%8,<:=

Inuustiy auviseu against the Feueial uoveinment piouucing mouel business uesigns,
iegulations oi legislation. They cautioneu that iegional anu sub-iegional factois aie too
uiveise foi "one size fits all" appioaches. As one leauei put it, "Iuentifying best piactices is
fine; piesciibing them is a stietch." They also cautioneu that the inuustiy's tiansition
shoulu be leu fiom the giounu up. They aie not looking foi the goveinment to take ovei
leaueiship uuiing this time of change; iathei, goveinment can help facilitate the piocess,
shaie best piactices, pioviue infoimeu analysis anu offei technical assistance.

Nost impoitantly, the Feueial uoveinment can ievise, iefoim anu upuate its policies that
aie inhibiting the tiansition by making it slowei anu moie uifficult. Belays in
auministiative piocesses, unceitainties causeu by iegulatois, anu the time uelay between
iueas anu investments uiscouiage capital investments ciitical to moueinizing the powei
system. A key feueial iole in utility ieinvention is to help stieamline iegulatoiy uecisions
by impioving the cooiuination of agencies involveu, cleaily iuentifying uecision-makeis,
uefining each agency's authoiity, ieuucing the time lost to uuplicateu, uncooiuinateu, anu
unnecessaiy analysis anu iequiiing uecision makeis to stick to theii iulings once they've
maue them.

ueneially, paiticipants saiu, feueial agencies shoulu focus on policy guiuance that pioviues
flexibility between iegions. 0theis suggesteu that FERC impioves the timelines of its
uecisions at the commissionei as well as the contesteu piocess levels.

Finally, to have cieuibility as a paitnei in the tiansition, the Feueial uoveinment must
ieinvent its own assets, policies anu pioceuuies. Paiticipants iuentifieu six aieas wheie
they feel the Feueial uoveinment's influence is most impoitant:

1. Regulating powei plant emissions
2. Pioviuing auequate ietuins anu incentives foi new tiansmission piojects anu moie
effective use of existing tiansmission assets
S. Pioviuing guiuance with appiopiiate flexibility foi Inuepenuent System 0peiatois
while also paying attention to utilities not in IS0s
2

4. Leauing by example in feueial facilities anu opeiations
S. Bemonstiating how to integiate anu evaluate uistiibuteu eneigy iesouices
Poweiing Foiwaiu
1u9
6. Recognizing the inuustiy's neeu to seive uiveise conuitions anu constituencies in
uiffeient paits of the nation.

H%.'33%*1"+:'*, ('8 C8%,:1%*+:"$ -.+:'*

O'"$ 5> W%"1%8,<:= #B C'0%8 I"8/%+:*2 -13:*:,+8"+:'*, bCI-,c

B0E opeiates foui PNAs - the Bonneville Powei Auministiation (BPA), Southeastein
Powei Auministiation (SEPA), Southwestein Powei Auministiation (SWPA) anu Westein
Aiea Powei Auministiation (WAPA). The PNAs maiket electiic powei in S4 states anu
opeiate electiic tiansmission systems that integiate with the tiansmission anu uistiibution
netwoiks of investoi owneu utilities in 2u states; with some of the tiansmission in ciitical
locations foi facilitating exchange between anu among these utilities. They maiketeu 42%
of the nation's hyuioelectiicity in 2u12, compiising 7% of all electiic geneiation in the
0niteu States
S
.

Congiess began cieating the PNAs in 19S7. In 1977, it tiansfeiieu opeiation of the PNAs
fiom the Bepaitment of Inteiioi (B0I) to B0E. With the exception of SEPA, the PNAs play a
laige iole in tiansmission both as owneis anu system opeiatois anu they maintain
iecipiocity taiiffs with FERC. These taiiffs allow the PNAs to iecovei costs associateu with
opeiating the feueial system anu pioviuing open access to tiansmission customeis.

The PNAs aie accountable to seveial othei agencies besiues B0E, mostly uue to theii
souicing of electiic powei geneiation fiom hyuiopowei uams. PNAs maiket powei fiom
uams opeiateu by the 0.S. Aimy Coips of Engineeis anu the Buieau of Reclamation, anu
woik with the 0.S. Fish anu Wilulife Seivice on activities that impact habitat.

Impoitantly, the PNAs seive a special class of "piefeience customeis" incluuing publicly
anu coopeiatively owneu utilities, feueial agencies incluuing BoB, anu Native Ameiican
Tiibes. These customeis have uevelopeu anu opeiate as key political constituencies that
stanu watch ovei Congiess anu the legal manuate that the PNAs pioviue them with electiic
seivices "at the lowest possible iates to consumeis consistent with sounu business
piactices."

A[%.9+:D% -.+:'*,>

1. A*$:,+ +<% CI-, :* +<% .$%"* %*%82B +8"*,:+:'*. Neet at the White Bouse with the
auministiatois of the foui PNAs anu key opinion leaueis among theii piefeiieu
customeis to enlist theii suppoit foi uemonstiating 21
st
centuiy business piactices. Lay
the giounuwoik that will pievent the kinu of political pushback that foimei B0E
Secietaiy Steven Chu expeiienceu when he uiiecteu the PNAs to uo this.

2. H%:,,9% 29:1"*.% +' +<% CI-,. Biiect the Secietaiy of Eneigy to issue a secietaiial
memoianuum to PNA Auministiatois that:

Poweiing Foiwaiu
11u
a) Cleaily explains the Piesiuent's policy objectives anu the ciitical leaueiship iole
PNAs must play in Ameiica's histoiic tiansition to clean eneigy.

b) Biiects them to piepaie stiategic plans anu investment ioaumaps that help
implement the Piesiuent's policy piioiities incluuing climate change mitigation anu
auaptation, incieaseu system iesilience, majoi auvances in eneigy piouuctivity, anu
an efficient anu innovative powei system that accommouates laige amounts of
ienewable eneigy. The plans shoulu also incluue stiategies foi woiking with the
PNA's uistiibution utilities to integiate uistiibuteu geneiation.

c) Emphasizes that Congiess put PNAs unuei the B0E's auministiation.

u) Communicates that the Piesiuent looks foiwaiu to active collaboiation with the
PNAs anu theii piefeience customeis on achieving his policy goals, anu to cieating
"win-win" initiatives that impiove the outcomes foi the PNAs, theii customeis anu
the nation.

e) Biiects PNA Auministiatois to offei iecommenuations on the long-teim iole of
PNAs in a clean eneigy economy incluuing the new skill sets they will neeu, the iole
of piefeience customeis in the tiansition, anu the ciiteiia that ueteimines who
qualifies as piefeience customeis.

f) Biiects them to iepoit to the Secietaiy how they will inciease the tianspaiency,
consistency, accountability anu claiity of theii pioceuuies anu actions incluuing all
pioceuuies anu actions ielateu to the use of theii tiansmission assets anu the
foimulation anu execution of theii powei maiketing plans
4
.

g) Biiects them to auheie to feueial public meeting iequiiements.

S. I"/% ?À@, 8%,='*,:#:$:+:%, "*1 "9+<'8:+:%, .$%"8. If the PNAs oi the piefeience
customeis push back on the Secietaiy's uiiectives - foi example, by mobilizing
membeis of Congiess to object - issue an Executive 0iuei to claiify that the PNAs aie
feueial assets that Congiess put unuei the juiisuiction of B0E; 2) the PNAs aie owneu
by the Ameiican people, not by piefeience customeis; anu S) piefeience customeis
shoulu not confuse piefeiential iights with owneiship.

O'"$ E> W%"1%8,<:= #B +<% F%1%8"$ A*%82B H%29$"+'8B )'33:,,:'*
bFAH)c

FERC is an inuepenuent agency of five membeis appointeu by the Piesiuent. Its authoiities
anu ioles incluue:
Regulating tiansmission anu wholesale sales of electiicity in inteistate commeice;
Reviewing ceitain meigeis, acquisitions anu business tiansactions by electiicity
companies;
Regulating tiansmission anu sale of natuial gas foi iesale in inteistate commeice;
Poweiing Foiwaiu
111
Reviewing siting applications foi electiic tiansmission piojects in limiteu
ciicumstances;
Inspecting anu licensing piivate, municipal anu state hyuioelectiic piojects;
Establishing manuatoiy ieliability stanuaius foi the high-voltage inteistate
tiansmission system;
Nonitoiing, investigating, anu enfoicing stanuaius foi eneigy maikets; anu
0veiseeing enviionmental matteis ielateu to natuial gas anu hyuioelectiic piojects.
S

In auuition to these foimal ioles, FERC's pionouncements anu uecisions influence
investois, inuustiy leaueis say.

Because FERC is an inuepenuent agency, the Piesiuent has no official authoiity ovei its
uecisions beyonu his appointment of its membeis anu the uesignation of the Chaiiman.
6

The Piesiuent can affect change in FERC policies that aie consistent with the FERC's
goveining statutes most uiiectly by the selection of the Chaiiman. The Piesiuent can also
exeit his "powei of peisuasion" to enlist FERC in iefoims that establish its iole in builuing a
clean eneigy economy. Paiticipants in the CNEE iounutable iecommenueu that, befoie he
implements the following iecommenuations, the Piesiuent shoulu meet with FERC
commissioneis to heai theii views on the commission's iole in powei system ieinvention.

A[%.9+:D% -.+:'*,>

1. A*$:,+ FAH) :* +<% .$%"* %*%82B +8"*,:+:'*. In wiitten anu oial communications with
FERC commissioneis, the Piesiuent can acknowleuge theii status as an inuepenuent
agency, enlist them in the clean eneigy mission, anu encouiage them to use theii
authoiities in the following ways:

a) Leveiage FERC's existing authoiity to pioviue incentives foi tiansmission anu
ielateu piojects that auvance ciitical policy goals. Foi example, link piemiums on
ietuin on investment to the attainment of the Piesiuent's eneigy anu climate
objectives.

b) Caiefully consiuei the costs that FERC uecisions impose on states anu the influence
that FERC's uecisions have on investois.

c) Focus on high-level piinciples aligneu with auvancing the Piesiuent's policy
objectives anu moving the electiic infiastiuctuie into the mouein aiea. Choose to be
less involveu in juiisuictional issues.

u) Encouiage anu suppoit IS0s anu RT0s unuei FERC's juiisuiction to implement
policies anu specific iules that auvance the Piesiuent's goals.

e) Encouiage collaboiation between anu among iegions.

Poweiing Foiwaiu
112
f) Pioviue incentives to utilities that aie not in IS0's if they paiticipate in RT0-like
mechanisms with mutually beneficial iesouice exchange, such as an Eneigy
Imbalance Naiket, etc.

g) Stiive foi gieatei pieuictability anu alignment of policy pionouncements among
commissioneis.

h) Ensuie that IS0s anu RT0s unuei FERC's juiisuiction suppoit sufficient assets to
sustain system ieliability foi the long teim.

i) Bolu noticeu meetings with leaueis of the utility inuustiy to uiscuss theii neeus anu
conceins in making the tiansition to clean anu uiveise eneigy.

j) Anticipate that the EPA will limit emissions of gieenhouse gases beginning in the
inteimeuiate teim. This woulu affect the financial analysis of most infiastiuctuie
piojects oveiseen by the FERC, anu might ieasonably affect the agency's ieview of
coipoiate tiansactions by electiic companies, its investigations of eneigy maikets,
anu its oveisight of enviionmental issues ielateu to natuial gas anu hyuioelectiic
piojects. Impoitantly, this action will be within the authoiity of the FERC. The
agency is not ueteimining unilateially that uBu emissions shoulu be limiteu;
insteau, it is taking the piuuent step of incoipoiating the likelihoou that an agency
with uiiect authoiity will take such action.

k) Avoiu "uecision lag" by setting a maximum time foi actions by commissioneis anu
foi the iesolution of contesteu cases. Recommenu that the time limit be 27u uays,
similai to that useu by seveial state commissions.

2. V,% ?À@, 8'$% ", :*+%8D%*%8. Biiect the Secietaiy of Eneigy, in his iole as inteivenei,
to counsel anu assist FERC in the following actions:
7

a) Befine FERC's focus anu authoiities to cieate a level playing fielu foi electiic powei
iesouices in the 0niteu States

b) Thoioughly analyze issues that affect the just anu ieasonable allocation of
inteiiegional tiansmission costs that suppoit ieliability anu clean eneigy
ueployment

c) Task the National Laboiatoiies to pioviue ieseaich anu expeit testimony on
pioceeuings of gieatest policy significance.

u) Nake suie the Quauiennial Eneigy Reviews connect the uots between the systems
integiation woik at NREL, system iesilience issues, anu FERC's woik on the
tiansmission system.

Poweiing Foiwaiu
11S
O'"$ G> W%"1%8,<:= #B +<% !%**%,,%% R"$$%B -9+<'8:+B b!R-c

TvA is a coipoiation owneu by the 0.S. uoveinment. It is not a PNA. It sells wholesale
powei to 1SS uistiibution utilities that seive 9 million people, anu it ietails to S1 laige
inuustiial customeis anu 6 feueial installations. It opeiates neaily 16,uuu ciicuit miles of
tiansmission lines connecteu uiiectly to 14 othei electiic systems. Noie than 4u% of its
capacity comes fiom coal, neaily 24% fiom natuial gas, 19% fiom nucleai powei plants
anu the iest fiom hyuioelectiic plants. TvA iepoits that in 2u11, moie than 4u% of its
eneigy came fiom clean oi caibon-fiee souices.

Bowevei, TvA is the thiiu-laigest souice of C02

emissions in the 0.S. electiic sectoi - haiuly
an example of climate leaueiship in the Feueial uoveinment. In iecent yeais, TvA has been
chaigeu with violations of the Clean Aii Act at 11 of its coal-fiieu powei plants. In Apiil
2u11, TvA ieacheu a settlement with EPA that iequiies it to invest $S-$S billion on new
anu upgiaueu pollution contiols anu $SSu million on clean eneigy piojects. TvA says it has
"ieneweu its vision to help leau the Tennessee valley iegion anu the nation towaiu a
cleanei anu moie secuie eneigy futuie, ielying moie on nucleai powei anu eneigy
efficiency anu ielying less on coal."

In 2u11, the TvA says, it instituteu an innovative iisk analysis piocess in its integiateu
iesouice plan. It ueteimineu that the establisheu plan (along with an alteinative that
incluueu new nucleai constiuction) iepiesenteu a highei iisk poitfolio foi customeis than
a poitfolio that emphasizeu ieneweu investment in eneigy efficiency anu ienewable
eneigy technologies
8
. This piocess can be piomoteu anu ieplicateu among state iegulatoiy
authoiities.

Noie iecently, Piesiuent 0bama uiiecteu 0NB to conuuct a "stiategic ieview" of the
Feueial uoveinment's ielationship to TvA, incluuing whethei the goveinment's iole shoulu
be ieuuceu oi teiminateu. In his 2u14 buuget, the Piesiuent inuicateu the ieview is being
uiiven by the amount of uebt TvA has accumulateu anu by the iuea that TvA has achieveu
its oiiginal objectives anu "no longei iequiies feueial paiticipation."

TvA was establisheu to meet the challenge of iuial electiification. It has met that goal, but
the 21
st
centuiy has biought new challenges - the same oi similai challenges as those faceu
by many public powei pioviueis, which supply upwaius of one-quaitei of the electiicity
useu in the 0niteu States.

A[%.9+:D% -.+:'*,>

1. )'*,:1%8 8%X3:,,:'*:*2 8"+<%8 +<"* =8:D"+:]:*2 !R-. Biiect 0NB to evaluate a thiiu
option in its stiategic ieview of TvA: It shoulu consiuei upuating the mission of the TvA
to become a mouel of auaptation to 21
st
centuiy maiket anu enviionmental iealities.

2. -,,%,, !R- ,+"((:*2. Biiect 0NB to ieview whethei the TvA is auequately staffeu with
sufficient skills.
Poweiing Foiwaiu
114
S. \%$= 9+:$:+:%, #%.'3% =:'*%%8,. Biiect TvA to collaboiate with B0E, CEQ, EPA anu
othei stakeholueis, to pioneei cost-effective stiategies that help public utilities keep
pace with emeiging technologies. Such stiategies coulu incluue pioviuing uistiibutois
with competitive giants, uecoupling utility piofits fiom electiic oi natuial gas sales to
encouiage moie utility-sponsoieu eneigy conseivation piogiams with ievenue
iecoveiy. In the piocess, the Tennessee valley coulu once again become a living
laboiatoiy foi eneigy innovation anu a mouel foi 21
st
centuiy utilities.

4. C:$'+ " *%0 7HC =8'.%,,. Biiect TvA to woik with B0E in piloting a new Integiateu
Resouice Planning piocess foi TvA that no less fiequently than eveiy six yeais
evaluates all supply- anu uemanu-siue iesouices togethei in a single pioceeuing. This
plan shoulu builu upon anu go fuithei than IRP best piactices fiom othei utilities
9
.

S. )'*(%8 0:+< +<% !R- P'"81. Call membeis of the TvA boaiu to the White Bouse to
explain theii iole in meeting the Piesiuent's eneigy anu enviionmental policy
objectives, to enlist theii coopeiation, anu to exchange iueas on how to ieinvent TvA's
mission anu piactices to exemplify the utility piactices of a clean eneigy economy.

6. -==':*+ 8%('83%8, +' +<% P'"81. Appoint foiwaiu thinking membeis who aie eagei to
iefoim TvA into a utility of the futuie to the TvA Boaiu of Biiectois.
1u

O'"$ M> F%1%8"$_ S+"+% "*1 W'."$ )'$$"#'8"+:'*

As the nation's laigest eneigy consumei, the Feueial uoveinment can use the powei of its
puise anu the example of its inteinal policies to help infoim state iegulation of electiic
utilities. With theii state anu local assistance piogiams, B0E's national laboiatoiies can
help localities meet emeiging challenges such as the ieuuction of gieenhouse gas emissions
in tianspoitation anu utility systems. In auuition, the Feueial uoveinment has a wiue
vaiiety of technical assistance piogiams on the eneigy peifoimance of builuings, fleets anu
inuustiies; on community sustainability; on iesilience to natuial uisasteis; anu moie.

A[%.9+:D% -.+:'*,>

1. )'$$"#'8"+% 0:+< N-HV). Biiect B0E to meet anu aiiange collaboiation with the
National Association of Regulatoiy 0tility Commissioneis (NAR0C) to:

a) Expanu joint effoits into emeiging piioiity aieas such as the nexus between eneigy
anu watei.

b) Exploie ways foi iegulatois to inciease flexibility foi innovation by electiic anu gas
utilities to biing moie value to consumeis, impiove the Feueial goveinment's
technical assistance to iegulatois anu speeu iates of innovation anu change acioss
the inuustiy.

Poweiing Foiwaiu
11S
2. \%$= 3'1%8*:]% =%8('83"*.% 3%+8:.,. Pioviue technical assistance to NAR0C anu
state P0Cs in ueveloping peifoimance metiics anu policies that ieflect customei neeus
anu values; gathei sufficient uata to measuie peifoimance against those metiics; align
utility compensation with the peifoimance measuies; anu iewaiu supeiioi utility
peifoimance.

S. )'3=$%+% 8%2:'*"$ ,9,+":*"#:$:+B =$"*,. Biiect the Feueial Enviionmental Executive
unuei Section 1S of Executive 0iuei 1SS14 to complete a iegional implementation plan
that suppoits the Piesiuent's sustainability objectives "taking into account eneigy anu
enviionmental piioiities of paiticulai iegions of the 0niteu States." The plan shoulu:

a) Incluue collaboiation among militaiy installations, utilities anu communities on
eneigy efficiency, ienewable eneigy, uistiibuteu geneiation anu micio-giius.

b) Befine the iole of the Feueial Eneigy Nanagement Piogiam (FENP) in woiking
with the goveinment's fielu installations anu theii local utilities on uistiibuteu
eneigy anu combineu heat anu powei systems in builuings anu facilities.

4. \%$= 9+:$:+:%, .'3=$B 0:+< 28%%*<'9,% 2", $:3:+,. Biiect B0E anu its national
laboiatoiies to pioviue technical assistance, as iequesteu, to utilities as they comply
with gieenhouse gas emission iegulations unuei Section 111(u) of the Clean Aii Act.

S. -*+:.:="+% +<% :3=".+ '( %$%.+8:. D%<:.$%,. Biiect feueial installations to woik with
theii electiic utilities to anticipate, manage anu uevelop best piactices iegaiuing the
impact of electiic vehicles on local utility seivices.
11

6. C"8+:.:="+% ".+:D%$B :* CV) 1'./%+,4 Biiect B0E (incluuing its national laboiatoiies
anu FENP) anu BoB (often the biggest customei foi theii local electiicity utilities) to
take an active iole in state P0C uockets anu iate cases that have an impact on theii
electiicity mix. Encouiage them to inteivene in specific pioceeuings befoie P0Cs to
auvocate foi levels of eneigy efficiency anu ienewable eneigy that meet feueial agency
goals.

7. C8'3'+% #9*1$%1 ='0%8 =98.<",:*24 Biiect B0E to piomote moie bunuleu powei
puichases by feueial agencies.
12
FENP iepoits that "Feueial agencies thioughout the
countiy aie actively seeking oppoitunities to buy ienewable powei foi theii sites," in
laige pait to fulfill piesiuential uiiectives. Feueial agency puichases of gieen powei can
help utilities meet the iequiiements of state ienewable poitfolio stanuaius.

8. F',+%8 .'$$"#'8"+:'*, #%+0%%* 3:$:+"8B #",%, "*1 .'339*:+:%,. In suppoit of E0
1SS14 anu statutoiy goals on the use of eneigy efficiency anu ienewable eneigy, uiiect
the Secietaiy of Befense to have militaiy installations collaboiate with theii local
utilities to establish micio-giius anu ienewable eneigy geneiation systems, to integiate
these systems with the civilian giiu when it is consistent with installation secuiity, anu
to shaie lessons leaineu by the militaiy in its uevelopment of micio-giius, islanuing anu
uistiibuteu eneigy systems.
1S

Poweiing Foiwaiu
116
9. \%$= =9#$:. 9+:$:+B .'33:,,:'*, '* ,3"8+ 28:1,. Biiect NIST to woik with P0Cs in
ueveloping smait giiu stanuaius.
14

O'"$ U> A$%.+8:. SB,+%3 H%,:$:%*.%_ S%.98:+B "*1 F$%[:#:$:+B

In the 21
st
centuiy, Ameiica's economic stability will uepenu incieasingly on the ability of
the electiic geneiation anu tiansmission system to auapt to the thieats of extieme weathei
anu othei impacts of global climate change. 0tility planneis neeu to piactice iisk
management against climate change anu to anticipate, mitigate, anu iepaii highei levels of
uamage.
1S
Risk management measuies shoulu incluue investments in smait giiu
technologies that impiove utilities' access to ieal time eneigy uata anu that allow them to
uelivei next geneiation outage management anu customei engagement systems. The
iesponse to Buiiicane Sanuy in New Yoik anu New }eisey inuicates that utilities will neeu
to change how they uo business in iegaiu to climate iisks anu impacts.
16

In a }uly 2u1S iepoit, the B0E waineu that the nation's theimoelectiic powei plants aie
vulneiable to incieasing aii anu watei tempeiatuies that coulu ieuuce available geneiation
capacity. Rising tempeiatuies aie expecteu to inciease tiansmission losses, ieuuce cuiient
caiiying capacity anu inciease stiesses on the uistiibution system. NREL ieseaicheis wain
that powei plants, which account foi about half the watei withuiawals
17
in the 0.S., aie
vulneiable to watei shoitages causeu by uiought. Shoitages of cooling watei alieauy have
cuitaileu powei piouuction in paits of the 0niteu States, incluuing the shutuown of some
coal anu nucleai plants in the Southeast in 2uu7, anu nucleai plants in Illinois anu
Ninnesota in 2uu6. The Nillstone nucleai plant in Wateifoiu, CT., shut uown one of its
ieactois in 2u12 because the watei it uiew fiom Long Islanu Sounu was too waim to cool
ciitical equipment. A twin unit nucleai plant in Biaiuwoou, IL, hau to get peimission to
keep opeiating because the tempeiatuie in its cooling watei ponu iose to 1u2 uegiees.

In the final iecommenuations it issueu in 0ctobei 2u1u, the National Infiastiuctuie
Auvisoiy Council obseiveu:
Risk monoqement, reliobility, onJ recovery ore so inqroineJ into tbe operotion of tbe
electric qriJ tbot tbe executives we intervieweJ Jont often tbink of tbeir proctices os
resilience. Flectric utilities ore very experienceJ in emerqency response onJ recovery,
onJ bove evolveJ risk monoqement moJels tbot belp preJict tbe impoct of weotber,
unforeseen equipment foilure, onJ noturol Jisosters, enoblinq tbem to more effectively
prepore. An evolvinq risk profile onJ new tbreots to qriJ resilience, bowever, ore
cousinq qriJ operotors to prepore for risks outsiJe of tbeir troJitionol experience onJ
responsibilities. 6riJ resilience is enterinq on oreo of joint responsibility wbere o
coorJinoteJ inJustry onJ qovernment opproocb is imperotive.

It is impoitant to note that no mattei how foitifieu a powei system is with fences, guaius,
etc., its inuiviuual elements may iemain vulneiable. The goal of giiu iesilience shoulu be
not to just make the system moie guaiueu, but to make it less vulneiable to single points of
failuie. Reuucing the impoitance of any one geneiatoi oi powei line is essential to giiu
iesilience.
Poweiing Foiwaiu
117
Cybeiattacks also aie emeiging as a iisk to powei piouuction. Cybeiattacks on utility
sectoi contiol systems iepoiteuly incieaseu moie than Su% in 2u12 anu moie than 78u%
fiom 2uu6 to 2u12. The Noith Ameiican Eneigy Reliability Coip. (NERC) has establisheu,
anu FERC enfoices, a set of ciitical infiastiuctuie piotection stanuaius. FERC initiateu a
iule in Apiil 2u1S to auopt veision S of the stanuaius.
18

0tility expeit Ron Lehi, a foimei chaiiman of the Coloiauo Public 0tilities Commission,
pieuicts that the next conflicts in woilu affaiis will likely be in iesponse to cybeiattacks on
ciitical infiastiuctuie incluuing electiic giius. A ciitical question, Lehi says, is how to
souice anu invest in the infoimation technology anu communications softwaie, equipment,
anu tiaining iequiieu in conuitions wheie expectations, tienus, anu the futuie aie all
uncleai.

0thei key issues being consiueieu by Congiess anu the Auministiation aie how to balance
the secuiity of the nation's ciitical infiastiuctuie with piivacy piotections anu whethei
cybeisecuiity stanuaius shoulu be manuatoiy oi voluntaiy. Piesiuent 0bama issueu an
executive oiuei in Febiuaiy 2u1S that iequiies feueial agencies to pioviue piivate sectoi
oiganizations with bettei infoimation on cybei-thieats anu to ensuie that cybeisecuiity
piotections uo not conflict with piivacy anu civil libeities. The oiuei also uiiects NIST to
uevelop a voluntaiy cybeisecuiity fiamewoik foi ciitical infiastiuctuie by Febiuaiy
2u14.
19

A[%.9+:D% -.+:'*,>

"# ?%D%$'= " .B#%8,%.98:+B ,+8"+%2B. In compliance with a key iecommenuation fiom
the uoveinment Accountability 0ffice (uA0), assign the White Bouse Cybeisecuiity
Cooiuinatoi to uevelop an oveiaiching feueial cybeisecuiity stiategy that incluues
peifoimance measuies anu milestones, specific ioles anu iesponsibilities of uiffeient
feueial oiganizations, guiuance on how the stiategy ielates to othei national objectives,
anu a ioaumap foi impioving those aieas wheie the uA0 has iuentifieu ueficiencies.
2u

Instiuct the 0ffice of Peisonnel Nanagement (0PN) to woik with agencies that have
cybeisecuiity ioles to ensuie that peifoimance measuies anu milestones aie well
specifieu in the job uesciiptions anu peifoimance stanuaius of cognizant piogiam
manageis.

$# S+91B <'0 1:,+8:#9+%1 2%*%8"+:'* "((%.+, 8%$:"#:$:+B. Biiect B0E to iuentify
syneigies anu potential collaboiations between cuiient cybeisecuiity piogiams anu its
woik on eneigy efficiency anu clean eneigy technologies, baseu on the piemise that
theii goals may be mutually beneficial. Also uiiect B0E to stuuy anu iepoit on the
impact of uistiibuteu geneiation on electiic system ieliability, taking into account that
eneigy flows will change fiom one-way to a two-waymulti-way flow pattein. This
uiveisity of geneiation methous can in theoiy enhance ieliability, but significant
investments neeu to be maue to enable best use of Bu to suppoit social goals (such as
moie iapiu iestoiation of the giiu in the event of a piolongeu outage).

Poweiing Foiwaiu
118
%# F:*1 +<% .B#%8,%.98:+BX=8:D".B #"$"*.%. Biiect B0E anu its Cybeisecuiity foi Eneigy
Beliveiy Systems Piogiam, in collaboiation with NIST, to iecommenu how to balance
cybeisecuiity in the nation's powei system with citizens' iight to piivacy - an issue that
has gieatei ielevance in the wake of iecent infoimation about the activities of the
National Secuiity Agency.

&# 71%*+:(B " ,%.98:+B "*1 8%,:$:%*.% $%"1%8. Solve the confusion cieateu by too many
agencies involveu in secuiity anu iesilience issues by iuentifying a single point of
contact in the feueial system - a consistent peison oi agency that utilities can contact
foi guiuance on secuiity issues.

'# \%$= 1%D%$'= 8%,:$:%*+ +8"*,3:,,:'* ="+<0"B,. Biiect the B0E to woik with BBS anu
inuustiy on the assessment of inuustiy best piactices foi iesilient pathways foi
tiansmission infiastiuctuie. (0tility leaueis tolu CNEE that BBS has saiu this is not in
its mission.) Alteinatively, iuentify anothei feueial entity with the analytic capability to
auvise the inuustiy on iesilience pathways.

(# \%$= 9+:$:+:%, "*1 8%29$"+'8, "1"=+ +' .$:3"+% .<"*2%. Biiect BBS to take the leau in
iuentifying anu piioiitizing iisks to the nation's electiic powei system anu in suggesting
mouel policies anu piactices to help Public 0tility Commissions (P0Cs) anu electiic
utilities auapt to theii iegional climate impacts.

)# -,,%,, 9+:$:+B .$:3"+% 8:,/,. Ensuie that the National Climate Assessment incluues
assessments of iisks to utility infiastiuctuie anu auuiesses the iesilient pathways issue.

O'"$ 6> -118%,, +<% %*%82BX0"+%8 *%[9, :* %*%82B ,%8D:.%,

The eneigy-watei inteiface is gaining consiueiable inteiest in the enviionmental anu
policy communities as extieme weathei events anu giowing watei stiess affect watei
supplies anu the nation's eneigy piouuction options. Eneigy iesouice choices can inciease
stiess on watei supplies; conveisely, watei availability will influence oui eneigy choices,
incluuing how we geneiate electiicity. As noteu in No. S above, theimoelectiic geneiation
accounts foi neaily half of all fieshwatei withuiawals in the 0niteu States. In Califoinia, foi
example, an estimateu 19% of electiicity use, S2% of natuial gas consumption, anu 88
million gallons of uiesel fuel consumption each yeai aie ielateu to watei (CEC 2uuS).
Eneigy piouuction anu watei consumption aie intimately ielateu; the efficiency of one
impioves the efficiency anu secuiity of the othei.
21

The Auministiation incieaseu its focus on this issue following the seveie uiought in 2u12
that affecteu moie than a thiiu of the countiy. At B0E alone, some 2u uiffeient piogiams
ueal to some uegiee with this nexus. A Watei anu Eneigy Technology Team at B0E is
woiking to cooiuinate these piogiams, but bioauei cooiuination is neeueu.

0thei agencies have a key iole in the eneigy-watei ielationship. EPA iegulates the impacts
of eneigy piouuction on watei quality; B0E stuuies the impacts of eneigy piouuction on
Poweiing Foiwaiu
119
watei use; the 0.S. ueological Suivey (0SuS) monitois the impacts of eneigy piouuction on
watei availability. In auuition, 0SBA, Inteiioi, the Buieau of Reclamation, the Powei
Naiketing Auministiations anu the 0.S. Aimy Coips of Engineeis all aie involveu in watei
piojects that affect the cost, ieliability anu secuiity of the nation's eneigy supplies anu
eneigy infiastiuctuie.

A[%.9+:D% -.+:'*,>

1. ?%D%$'= "* %*%82BX0"+%8 ".+:'* =$"*. Cieate an inteiagency task foice on the eneigy-
watei nexus along the lines of the Inteiagency Climate Auaptation Task Foice anu chaige
it with builuing on the EPA Eneigy-Watei Piinciples to piouuce a national action plan
similai to the one the Climate Auaptation Task Foice piouuceu. Chaige the task foice
with making iecommenuations in the following aieas:
a) Factoiing watei into eneigy policies anu investments4 EPA has unueitaken a stuuy of
the value of watei to the 0.S. economy. Baseu on that stuuy anu othei assessments of
the value of ecosystem seivices, chaige the inteiagency task foice with
iecommenuing how watei impacts shoulu be factoieu into the uecisions anu
opeiations of the PNAs, FERC, the TvA, iegulatois anu utilities. Task it also with
assessing the iisk that the cuiient electiic geneiation poitfolio will be thieateneu by
piojecteu limitations on watei iesouices.

b) Assisting states anu localities4 Assign the task foice with iuentifying the infoimation
that P0Cs, municipal utilities, coopeiatives anu othei electiic pioviueis neeu to
incoipoiate watei factois into iegulation anu utility management.

c) Conuucting R&B on low- anu zeio-eneigy wastewatei tieatment facilities> What
types of innovations aie neeueu, anu shoulu the Feueial uoveinment suppoit,
iegaiuing the ieuse of uegiaueu watei, integiateu watei management, alteinative
cooling methous, anu the watei efficiency of powei plants.
22
Bave otheis uone
sufficient basic anu applieu ieseaich on these issues. If so, shoulu the Auministiation
help inteipiet anu uisseminate the finuings to utility iegulatois anu companies. If
not, shoulu these issues be factoieu into the ieseaich plans of the National
Laboiatoiies.

Incluuing an evaluation of watei intensity of eneigy geneiation iesouices in the
EPA's analysis of climate auaptation stiategies to help iegulatoiy authoiities
piioiitize eneigy geneiation alteinatives in watei-iestiicteu states.

Poweiing Foiwaiu
12u
-2%*.B -.+:'*,

C'0%8 I"8/%+:*2 -13:*:,+8"+:'*,

1. S922%,+:'*, ('8 +<% ,+8"+%2:. =$"*,4 Auuiess the following topics in the stiategic plans
the Secietaiy of Eneigy uiiects PNA auministiatois to piepaie:

a) A pioposeu plan foi implementing anu communicating to theii customeis the
policies anu stanuaius which constitute best piactices foi 21
st
centuiy electiic
utilities.

b) An assessment of the costs, benefits anu piactices of incieasing ienewable eneigy
capacity by 2u2S
2S
, iising to 8u% by 2uSu.
24

c) Similai to the iecent NIS0 iuling, a cost allocation foimula foi tiansmission
infiastiuctuie useu to accommouate incieasing ienewable iesouices, consiueiing
the oveiall system impiovements achieveu by incoipoiating ienewables in the
poitfolio.

u) A planning piocess that fully consiueis the iisks anu benefits of issues ianging fiom
electiic utility iesouice selection to the impacts of global climate change.
2S

e) Policies to taiget a poition of ie-maiketeu oi newly maiketeu hyuiopowei to
customeis who can uemonstiate plans to use theii allocations foi the uiiect
ieplacement of fossil fueleu electiic geneiation.

f) Economic moueling by local Lanu uiant 0niveisities of the benefits anu costs of
tiansitioning fiom coal to natuial gas anu ienewable eneigy in each PNA's seivice
teiiitoiy.

g) Specific plans foi watei uemanu management.

h) Bow the PNAs will make theii planning anu uecision piocesses moie tianspaient.

i) Plans foi establishing eneigy efficiency as a iesouice to meet powei supply
obligations, as cuiiently piacticeu by BPA, anu foi facilitating eneigy efficiency
impiovements by customei utilities.

j) Bow the PNAs will inciease the public tianspaiency of complying with FERC 0iuei
No. 746 on Integiating vaiiable Eneigy Resouices anu to implement sub-houily
scheuuling anu the use of powei piouuction foiecasting to moie efficiently
integiateu vaiiable eneigy iesouices.

Poweiing Foiwaiu
121
k) Bow the PNAs aie paiticipating in iegional tiansmission planning pioceuuies
unuei FERC 0iuei No. 1uuu.

F%1%8"$ A*%82B H%29$"+'8B )'33:,,:'*

1. )'*,9$+ 0:+< ,+"/%<'$1%8,. Inciease the involvement of powei system stakeholueis in
cieating anu upuating FERC's stiategic plans.

2. I"/% %[ ="8+% 9*:('83. Apply ex paite unifoimly anu ieinfoice its "peimit but
uisclose" iequiiements.

S. -$$'0 1%.'9=$:*2. Show leaueiship to states by implementing a uecoupling
mechanism foi FERC juiisuictional ievenues. (The feueial goveinment suppoits
uecoupling in the states but it uoes not allow foi a uecoupling aujustment foi
tiansmission ievenue impacts associateu with utility eneigy efficiency effoits.)

4. A*,98% ,9,+":*%1 8%$:"#:$:+B. Ensuie that IS0s anu RT0s unuei FERC's juiisuiction
impiove existing maiket stiuctuies so they can suppoit sufficient assets anu financial
stiength to sustain system ieliability foi the long teim.

S. )8%"+% :*.%*+:D%, ('8 ,+"+%X'(X+<%X"8+ +8"*,3:,,:'*. Implement peifoimance
stanuaius, incentive iates, smait giiu stanuaius anu othei policies to ensuie that new
tiansmission piojects incoipoiate auvanceu technologies anu state of the ait opeiating
piactices foi safei, moie ieliable anu moie efficient tiansmission systems by 2u14.

6. C9+ "$$ '=+:'*, '* +<% +"#$%. Bevelop guiuance that helps ensuie that all maikets (e.g.,
eneigy, ancillaiy seivices, capacity) anu maiket-makeis (utilities) incluue both
uemanu- anu supply-siue options. All optionscential anu uistiibuteu geneiation,
tiansmission, efficiency, anu uemanu-iesponseshoulu compete with one anothei to
pioviue electiicity seivices.
26
0iient guiuance anu iules towaiu outcomes iathei than
piesciibing specific technologies. Incoipoiate iigoious measuiement stanuaius to
ensuie that outcomes aie met. 0utcome-oiienteu iules will make it easiei to biing new
piouucts anu seivices into the maiket.
27

7. 71%*+:(B E5
,+
.%*+98B 8"+% ,+89.+98%,. Iuentify but uo not piesciibe best piactices foi
peifoimance-baseu utility iate making to help align utility compensation with changing
societal piioiities, incluuing an incieaseu uemanu foi uistiibuteu iesouices anu lowei
emissions. These emeiging piioiities thieaten to unueimine existing utility business
mouels that iely on the giowth in uemanu foi tiauitional eneigy supplies. Such
peifoimance-baseu iegulation shoulu uiaw as appiopiiate to each iegion fiom the
piactices establisheu in Califoinia, Naiylanu, anu 0klahoma.
28

8. )8%"+% :*+%8*"+:'*"$ "*1 8%2:'*"$ 1:"$'29%,. 0tilize B0E's inteinational engagement
to host best piactices confeience on peifoimance baseu iegulatoiy mouels such as the
0K's RII0 mouel involving the National Association of State Eneigy 0fficeis (NASE0),
Poweiing Foiwaiu
122
the National uoveinois Association (NuA), the National Association of Regulatoiy
0tility Commissioneis (NAR0C) anu the National Confeience of State Legislatuies
(NCSL). Facilitate iegional uialogues with key stakeholueis to woik thiough iuentifieu
ciitical issues foi locally appiopiiate solutions.

9. 7*.$91% 3",,X3"8/%+ 1%3"*1 :* $'"1 ('8%.",+,4 Cieate anu implement piactices foi
incoipoiating moie mass-maiket uemanu-siue iesouices into loau foiecasting,
oiganizeu wholesale maikets, anu iesouice piocuiement planning piocesses to ensuie
they aie fully anu accuiately integiateu into the system, theieby ensuiing gieatei
system ieliability at lowei system cost.

1u. ?%(:*% h=9#$:. 2''1i4 Leau a stakeholuei uialogue on uefining anu quantifying "public
goou" anu ueteimine whethei FERC shoulu embouy a quantification of public goou in
its iules.
29

11. ?%,:2* 89$%, "*1 =8".+:.%, ('8 %3%82:*2 +%.<*'$'2:%,. Anticipate the changing
neeus of the powei system with laigei shaies of the nation's eneigy coming fiom winu
anu solai technologies, uiiven by maiket foices anu state policies. uuiue
complementaiy changes in maiket iules anu opeiating piactices to accommouate these
changes in a timely way so as to maximize the value of winu anu solai powei anu avoiu
inefficient uumping oi cuitailing of eneigy fiom winu anu solai capacity.

12. C8'D:1% '=='8+9*:+:%, ('8 :*('83"$ %[.<"*2%, '* :,,9%,4 Continue to host technical
confeiences that pioviue a foium foi open conveisation about futuie policy issues
iathei than ielying only on eviuence-baseu heaiings anu biiefs.

?%="8+3%*+ '( A*%82B

1. )'3="8% (9$$ $:(%X.B.$% .',+, '( %*%82B '=+:'*,. As a mattei of piactice, consiuei the
full life-cycle costs of ienewable eneigy anu fossil eneigy, incluuing factois such as the
social costs of caibon, to cieate a moie level playing fielu foi competition between these
iesouices in feueial policies, buugets anu goals.

2. A*.'98"2% 3:$:+"8BX.:D:$:"* .'$$"#'8"+:'*,. Encouiage collaboiations anu joint
effoits incluuing feueial-state-local powei puichasing agieements among cities anu
militaiy installations to impiove local eneigy secuiity with uistiibuteu geneiation,
micio giius, anu othei technologies (Bates, 1S).

S. 7*+%8D%*% ('8 +<% C8%,:1%*+@, 2'"$,. Exeicise the Secietaiy of Eneigy's inteivenei
iights at FERC pioceeuings to iepiesent positions that will achieve the Piesiuent's
Climate Action Plan anu othei stateu goals.
Su

4. j%%= "#8%",+ '( +<% .$:3"+%g='0%8 ,B,+%3 8%$"+:'*,<:=. Continue assessing the
inteiielationships of climate anu the electiic powei system as auuitional uata, climate
science anu climate impacts uevelop.
Poweiing Foiwaiu
12S
S. ?%D%$'= 29:1"*.% ('8 ='0%8 .'*+:*9:+B 1%,=:+% 1:,",+%8,. Collaboiate with the
FENA on guiuance foi P0Cs, electiic utilities anu communities on how to maintain
continuity of powei foi ciitical seivices uuiing anu aftei weathei-ielateu uisasteis.
Among the options the two agencies shoulu consiuei aie the uisastei-iesponse anu
iecoveiy attiibutes of ienewable eneigy technologies, uistiibuteu geneiation, micio-
giius anu "islanuing"i.e., the ability to uetach local powei systems fiom electiic giius
uuiing powei uisiuptions.
S1

6. S+8:D% ('8 28%"+%8 +8"*,="8%*.B :* %*%82B 1%.:,:'*,. Impiove tianspaiency anu
stakeholuei involvement in uecisions that impact inuustiies anu the public. An example
of wheie the utility inuustiy felt theie was inauequate tianspaiency is B0E's inclusion
of the social cost of caibon in iecent appliance efficiency iegulations.

7. F:*1 *%0 0"B, +' ",,:,+ +<% 8%:*D%*+:'* '( +<% ='0%8 ,B,+%3. uieatly expanu the
Bepaitment's capacity to pioviue technical assistance to stakeholueis in the
ieinvention of the powei system. Foi example:

a) Replicate the mouel of B0E's Inuustiial Assessment Centei piogiam
S2
to cieate
expeit teams that pioviue customizeu technical assistance to utilities as they ueal
with tiansition challenges. Incluue local univeisities, colleges anu technical schools
on the teams.

b) Inciease technical assistance to Native Ameiican Tiibes in utility planning anu theii
negotiations with PNAs anu othei utilities.

c) Inciease uissemination of technical assistance anu infoimation to NAR0C, NCSL,
NASE0, NuA, the National Association of State 0tility Consumei Auvocates
(NAS0CA) anu National Confeience of Enviionmental Legislatuies (NCEL), anu
Ameiican Legislative Exchange Council (ALEC) on utility business mouel challenges
anu policy solutions.

8. 7*.8%",% +<% 9,% '( .$%"* %$%.+8:.:+B "+ ='8+,. Woik with utilities to iuentify anu
oveicome baiiieis to the use of eneigy efficiency anu ienewable eneigy in electiifying
the nation's poits.

9. )"$.9$"+% +<% #%*%(:+, '( %*%82B ,+'8"2%. Quantify the economic benefits foi utilities
of consumei-scale eneigy stoiage anu utility-scale stoiage systems in ieuucing the neeu
foi constiucting anu opeiating peaking plants. In auuition, quantify the economic
benefits of uistiibuteu powei geneiation in ieuucing the costs of builuing anu
maintaining tiansmission anu uistiibution infiastiuctuie.

1u. \%$= 9+:$:+:%, :*D%,+ :* .$%"* +8"*,='8+"+:'*. Woik with the Bepaitment of
Tianspoitation anu NAR0C to uefine anu expanu the ioles that electiic anu gas utilities
shoulu play in pioviuing alteinative fuels foi tianspoitation. Recommenu feueial anu
state policies that will allow utilities to invest in the tianspoitation sectoi, incluuing
Poweiing Foiwaiu
124
infiastiuctuie that suppoits electiic vehicles anu the use of electiic vehicles foi stoiing
electiicity.

11. -$:2* NHAW 0:+< '+<%8 "2%*.B 0'8/ '* +8"*,3:,,:'* :,,9%,. Ensuie that the
systems integiation anu iesilience woik at NREL lines up with othei feueial woik on
the tiansmission system, as these state of the ait system opeiations shoulu help to
justify anu ieuuce the amount of iisk in new system investments.

12. )"$.9$"+% +<% D"$9% '( ,B,+%3 8%,:$:%*.% +' #9,:*%,,%,. Quantify the economic value
of incieaseu system iesilience anu ieliability, in iegaiu to avoiuing lost piouuctivity in
the business sectoi. Factoi that value into benefit-cost analyses of eneigy efficiency anu
ienewable eneigy investments anu pioviue the methouology to states anu piivate
investois.

1S. ?%,:2* h<:2< 8%$:"#:$:+B ]'*%,i ('8 .'33%8.:"$ %*+%8=8:,%,. Woik with the
Bepaitment of Commeice to conceptualize, uefine anu piopose "high ieliability zones"
that aie micio-giiuueu to ensuie iesilience anu ieliability in meeting the eneigy neeus
of commeicial enteipiises. Although electiic iates piesumably woulu be highei, the
zones woulu pioviue substantial value to commeicial customeis, allowing them to
avoiu costly investments in backup geneiation. The cieation of the zones woulu
pioviue economic uevelopment potential foi local juiisuictions. In auuition, the zones
woulu uemonstiate customei uiffeientiation by seivice (i.e., ieliability) in auuition to
tiauitional uiffeientiation of customeis as iesiuential, commeicial oi inuustiial.

14. -,,%,, +<% 8%,'98.%, *%%1, '( " 8%X3:,,:'*%1 !R-4 Woik with TvA's new leaueiship
to assess its iesouice neeus, incluuing staffing levels, if the Piesiuent ueciues to pioviue
a new mission foi the coipoiation to uemonstiate how new utility business mouels can
be implementeu.

1S. -.<:%D% ,9,+":*"#:$:+B "+ ,."$%. Thiough FENP, woik with BoB anu othei agencies to
ueploy sustainable eneigy at scale iathei than facility by facility. Aggiegate anu leau
towaiu laigei scale anu lowei costs using the goveinment's puichasing powei. Foi
example, focus on a Suu-facility solai ueployment iathei than a single-builuing solai
pioject. Auu up total uemanu anu compute the iegional eneigy cieuit equivalents.
SS

16. S9=='8+ h9+:$:+B '( +<% (9+98%i 1%3'*,+8"+:'*,. In conjunction with NAR0C, conuuct
0tility of tbe Iuture confeiences to engage in open uialogue on the topic of utility
business mouels, similai to the confeiences helu 1S yeais ago when ietail competition
was emeiging. In auuition, suppoit a "0tility of the Futuie" uemonstiation pioject that
featuies high levels of uistiibuteu geneiation while sustaining ieliable electiic seivices
foi customeis. Showcase miciogiius, stuuy how to impiove customei auoption of
auvanceu eneigy solutions, anu uemonstiate softwaie that enables utilities to contiol
behinu the metei iesouices.

Poweiing Foiwaiu
12S
`((:.% '( C%8,'**%$ I"*"2%3%*+

1. \:8% +<% "==8'=8:"+% ,/:$$, ('8 E5
,+
.%*+98B CI-,. Ensuie that the job iequiiements
anu peifoimance ciiteiia foi geneial seivice feueial employees in the PNAs emphasize
knowleuge, skills anu abilities that builu the PNAs' capacity to caiiy out the Piesiuent's
goals anu the Secietaiy of Eneigy's instiuctions ielateu to builuing a 21
st
centuiy
electiic powei system.

2. W''/ ('8 CI- 3"*"2%8, 0:+< #'+< 3"*"2%3%*+ "*1 +%.<*:."$ ,/:$$,. Encouiage the
Qualifications Review Boaiu
S4
to look foi Senioi Executive Seivice manageis in the PNA
system who have both executive management expeiience anu technical skills ielateu to
the PNAs' iesponsibilities.

?%="8+3%*+ '( A19."+:'*

1. A19."+% ('8 +'3'88'0@, %*%82B ,B,+%3,. Invest in the human element of utility
management, utility iegulation, anu the piouuction anu use of clean eneigy
technologies by pioviuing guiuance to seconuaiy schools, community colleges, technical
institutes anu univeisities on incoipoiating these topics into science, engineeiing anu
management cuiiicula.

?%="8+3%*+ '( ?%(%*,%

1. 73=8'D% .'339*:."+:'*, 0:+< .:D:$:"* 9+:$:+B $%"1%8,. Encouiage officials in chaige
of "gieening" its installations to engage in bettei uialogue with theii civilian utilities anu
state Public 0tility Commissions. Inuustiy leaueis tolu CNEE that BoB senus mixeu
messages by wanting aggiessive mission-ielateu investments on the one hanu, anu low
electiic iates on the othei.

2. A[=%1:+% =8'^%.+, 0:+< =8%X=%83:++:*2. Look foi oppoitunities to pie-peimit lanu foi
ienewable eneigy piojects at militaiy installations, as has been uone at Camp
Penuleton.

S. -,,%,, .$%"* %*%82B :*D%,+3%*+, "+ ,B,+%3X0:1% ,."$%,. Piioiitize ienewable eneigy
anu eneigy efficiency investments on a system-wiue iathei than facility-by-facility
basis, scaling investments at cost-efficient levels while also pioviuing giiu system
benefits such as congestion ielief.

4. 7*.8%",% 9,% '( VAS),. Nake moie aggiessive use of 0tility Eneigy Seivice Contiacts,
which pay initial costs in clean eneigy investments while avoiuing uifficulties
associateu with Eneigy Savings Peifoimance Contiacts.
SS

Poweiing Foiwaiu
126
?%="8+3%*+ '( \'3%$"*1 S%.98:+B

1. O:D% 9+:$:+:%, " =':*+ '( .'*+".+4 Pioviue utilities with a single point of contact to
cooiuinate uisastei iesilience, iesponse anu iecoveiy.

2. -$$'0 +<% 3:$:+"8B +' <%$= 9+:$:+:%, "(+%8 1:,",+%8,. Ensuie that the militaiy is
authoiizeu to tianspoit utility equipment in post-uisastei situations.

S. O:D% 9+:$:+B .8%0, +:3%$B "..%,, :* =',+X1:,",+%8 ,:+9"+:'*,. Ensuie that utility ciews
aie alloweu timely access to uisastei sites to ensuie the safety of electiic systems anu to
iestoie them as soon as possible.

4. W:*/ 8%,:$:%*.% '82"*:]"+:'*, 0:+< ,+"+% %*%82B '((:.%,. Sustain the Bepaitment's
collaboiation with piivate sectoi oiganizations woiking on the iesilience of the powei
system anu plans to iestoie powei aftei natuial uisasteis
S6
; with the eneigy emeigency
plans states aie iequiieu to submit to B0E to qualify foi feueial foimula giants in the
State Eneigy Piogiam; anu with the National Association of State Eneigy 0fficials
(NASE0).
S7

Poweiing Foiwaiu
127
)<"=+%8 6> -$+%8*"+:D% F9%$, "*1 R%<:.$%,

Eveiy 0.S. piesiuent since Ronalu Reagan has piomoteu the use of alteinative fuels (AFs)
anu alteinative fuel vehicles (AFvs). Congiess has suppoiteu these fuels in legislation
going back uecaues. The objective of the Alteinative Fuels Notoi Act of 1988, foi example,
was to inciease the uevelopment of non-petioleum tianspoitation fuels. The 1992 Eneigy
Policy Act sought to uisplace Su% of the nation's tianspoitation petioleum use by 2u1u.
"

The Clinton Auministiation began iaising the issue of caibon emissions fiom fossil fuels.
The Bush Auministiation auvocateu the uevelopment of hyuiogen-poweieu vehicles anu
suppoiteu Congiess's passage of a Renewable Fuels Stanuaiu (RFS) to gieatly inciease the
nation's use of biofuels.

The piincipal motivations foi using AFs anu AFvs incluue ieuuctions in tianspoitation
j%B !<%3%, "*1 H%.'33%*1"+:'*,

A piincipal mission of national tianspoitation policy shoulu be to uevelop anu
ueploy sustoinoble non-petioleum fuels, the infiastiuctuie that moves them to
maiket, anu the vehicles that use them.

The Piesiuent shoulu cleaily uefine his high-level goals foi alteinative fuels anu
vehicles, ieflecting his eneigy, climate anu secuiity objectives.

Bevelop a ioaumap that iuentifies the policies, milestones, peifoimance
measuies anu sequencing necessaiy to achieve the Piesiuent's vehicle anu fuel
goals.

Establish fuel anu vehicle piioiities baseu on full-cost life-cycle analyses of
options.

Nake policies anu piogiams flexible enough to evolve with changes in
technologies, economics, climate, national piioiities anu inteinational
obligations.

Alteinative fuels anu vehicles shoulu not be consiueieu a substitute foi othei
components of a fully uevelopeu 21
st
centuiy tianspoitation system that
incluues non-vehiculai options.

Feueial investments in new fuels anu vehicles shoulu be contingent on cost
shaiing anu co-investment by the piivate sectoi.

Poweiing Foiwaiu
128
sectoi emissions of gieenhouse gases anu ciiteiia aii pollutants; public health benefits; anu
the secuiity anu maiket stability that comes fiom uomestically piouuceu fuels. Some
alteinative fuels also offei cost savings; otheis will, too, as woik continues to lowei the
costs of piouucing anu uistiibuting them. Foi many yeais, howevei, the paiamount
objective has been to ieuuce the 0niteu States' "auuiction" to impoiteu oil
$
.

Q<B %*1:*2 ':$ "11:.+:'* 8%3":*, .8:+:."$

The 0niteu States is expecteu to tiansition fiom an oil impoitei to woilu's leauing oil
piouucei
%
. That expectation can leau to the mistaken iuea that we neeu not woiiy about
finuing alteinatives to petioleum fuels. Alteinative fuels anu vehicles aie as impoitant as
evei to the nation's economic, enviionmental anu eneigy secuiity, foi seveial ieasons.

Fiist, the EIA piojects that if we continue business as usual (BA0), the 0niteu States will
iely on impoiteu oil fai into the futuie (Figuie 1). In EIA's BA0 scenaiio, impoits woulu
still pioviue S7% of the countiy's liquiu fuels in 2u4u. The EIA estimates that the 0.S. coulu
enu oil impoits by 2u4u only with a veiy aggiessive scenaiio baseu on veiy optimistic
assumptions.
&
Analysts at the Inteinational Eneigy Agency (IEA) pioject that in 2uSS, half
of the woilu's oil supplies still will come fiom the 0iganization of Petioleum Expoiting
Countiies (0PEC).
'

Seconu, even if the 0niteu States useu no 0PEC oil anu even if uomestic piouuction alloweu
us to enu all oil impoits, we woulu not be safe fiom the type of oil supply anu piice
instability that has pieceueu neaily eveiy 0.S. economic iecession since Woilu Wai II. In
touay's global economy anu woilu oil maiket, any nation's eneigy ciisis becomes eveiy
nation's pioblem. As the EIA notes:

ReqorJless of bow mucb tbe 0niteJ Stotes reJuces its relionce on importeJ liquiJs,
consumer prices will not be insuloteJ from qlobol oil prices if current policies onJ
requlotions remoin in effect onJ worlJ morkets for Jelivery continue to be competitive.

Poweiing Foiwaiu
129
F:298% 5> N%+ 73='8+ S<"8% '( VS
W:Y9:1, S9==$B :* !0' )",%,
5K;LXELML b3:$$:'* #"88%$, =%8
1"Bc +$*,-%. /01

C%+8'$%93@, H'$% :* )$:3"+% )<"*2%

A thiiu ieason the 0niteu States must uevelop AFs is the woilu's "caibon buuget" - the
limit to how much caibon pollution the inteinational community can put into the
atmospheie without tiiggeiing catastiophic anu iiieveisible climate change. Touay, the
tianspoitation sectoi is iesponsible foi about a thiiu of the nation's gieenhouse gas
emissions; it was the souice of moie than half of all 0.S. gieenhouse gas (uBu) emissions
fiom 199u to 2u11. The sectoi is also a majoi souice of ciiteiia aii pollution emissions such
as nitiogen oxiue (N0x) anu paiticulate mattei (PN1u).

IEA calculates that if the woilu continues on its piesent couise, the caibon buuget will be
exhausteu by 2u17. Recent scientific ieseaich as well as the IEA have concluueu that to
avoiu iunaway climate change, ioughly two-thiius of the woilu's pioven fossil eneigy
ieseives must iemain in the giounu between now anu 2uSu. In othei woius, the opeiative
limit to using fossil eneigy is not how much we have in the giounu; it's how much caibon
we can put into the sky. By 2u2u, all nations aie expecteu to agiee to limits on theii uBu
emissions as a iesult of an inteinational climate tieaty. The ongoing negotiations ovei the
tieaty have maue it cleai that othei countiies expect the 0niteu States to make substantial
contiibutions to ieuucing uBu emissions, since the 0.S. economy is fully uevelopeu,
iemains one of the woilu's laigest souices of ongoing emissions, anu is iesponsible foi
most of the caibon in the atmospheie touay.

Fouith, AFs aie impoitant to uiveisifying the nation's tianspoitation eneigy mix anu to
making it moie stable anu sustainable. Fossil fuels aie finite. As supplies become scaicei
anu as competition foi them incieases, piices will iise. At the same time, the cost of
ienewable fuels is likely to come uown as we impiove anu piouuce moie of them. Some
eneigy analysts pieuict the woilu will nevei iun out of oil; it will just become too expensive
to use compaieu to its alteinatives.

Fifth, tianspoitation is a public health issue. Accoiuing to the Ameiican Lung Association,
motoi vehicles cieate moie uiity aii than any othei souice - about a thiiu of all aii
Poweiing Foiwaiu
1Su
pollution in the 0niteu States. Aii pollution causes billions of uollais eveiy yeai in illness
anu lost piouuctivity. Insofai as vehicles anu theii fuels contiibute to uBu emissions, they
also iesult in a iange of public health pioblems associateu with climate change, incluuing
heat waves that aie alieauy the nation's No. 1 weathei-ielateu killei.

Sixth, this is the moment foi the 0niteu States to cleaily iuentify its vehicle, fuel anu
infiastiuctuie piioiities foi the futuie. In its latest iepoit caiu, the Ameiican Society of Civil
Engineeis calculateu that the nation must invest $S.S tiillion by 2u2u to iepaii anu
impiove its infiastiuctuie, incluuing moie than $1.7 tiillion on suiface tianspoitation,
$1uu billion on iail, $1S4 billion on aiipoits anu $7S6 billion on the electiic system. The
objective shoulu not be to iepaii the nation's infiastiuctuie foi tianspoitation technologies
of the past, but foi the auvanceu technologies, fuels anu mobility systems the 0niteu States
will neeu foi the iest of this centuiy.

Finally, with woilu uemanu foi passengei vehicles iapiuly giowing at the same time uBu
emissions must come uown, theie is likely to be a massive global maiket foi AFs anu AFvs.
Bloombeig New Eneigy Finance estimates that global ventuie capital anu piivate equity
investment in auvanceu tianspoitation has totaleu $4.S billion since 2uu7. The 0niteu
States coulu uominate this maiket if uevelopeu the technologies anu eneigy iesouices foi
post-petioleum auvanceu tianspoitation systems.

-9+'3'#:$%, "8% <%8% +' ,+"B

Clean anu equitable mobility in Ameiican society has many uimensions incluuing how
cities aie planneu anu built; whethei citizens of all ages, income levels anu abilities have
equal access to the necessities anu amenities of mouein life; the extent to which public
tianspoitation anu non-vehiculai mobility options will be neeueu to ieuuce tiaffic
congestion anu associateu losses of piouuctivity; whethei the Inteinet anu emeiging
communications technologies will ieuuce job-ielateu tiavel; the intiouuction of innovative
uevelopments such as uiban vehicle shaiing; anu the lifestyle piefeiences of auults anu
families.

In any planning scenaiio, howevei, public policy shoulu be baseu on the assumption that
wheels, iails anu wings will iemain a majoi pait of the tianspoitation sectoi woiluwiue.
The 0niteu States' love affaii with the passengei vehicle has become the woilu's love affaii;
we can assume that vehiculai tiavel is heie to stay, but with fai moie efficient vehicles
poweieu by cleanei anu moie sustainable souices of eneigy.

In its Annual Eneigy 0utlook foi 2u1S, the EIA iefeience case scenaiio pieuicts that by
2u4u, biofuels' shaie of total 0.S. liquiu fuels consumption will giow fiom S.S% in 2u11 to
S.8%; efficiency will inciease neaily 2% in new cais anu 1.6% foi new light tiucks.
(

But foi all the ieasons mentioneu above, the 0niteu States must stiive foi vehicle
efficiencies anu non-petioleum fuels at much highei levels than that.

Poweiing Foiwaiu
1S1
!<% C8%,:1%*+@, 73=8:*+

Piesiuent 0bama's leaueiship ovei the last five yeais alieauy is tiiggeiing a tiansfoimation
in Ameiica's tianspoitation sectoi. In the Piesiuent's fiist teim, his Auministiation neaily
uoubleu fuel economy stanuaius to iequiie that by 2u2S, new cais anu S0vs must aveiage
at least S4.S NPu. By Septembei 2u1S, the aveiage fuel economy of new cais anu tiucks
hau climbeu to 24.9 NPu, up fiom 2u.1 NPu in 2uu7, accoiuing to a stuuy by the 0niveisity
of Nichigan. The histoiic new stanuaius aie being met by changes in the weight of the
vehicles anu the engines that iun them, along with an inciease in the numbei of hybiiu anu
electiic vehicles solu in the 0niteu States. The Enviionmental Piotection Agency (EPA) anu
the National Bighway Tiaffic Safety Auministiation (NBTSA) pioject that the new
efficiency stanuaius will:

.sove fomilies more tbon $1.7 trillion in fuel costs onJ reJuce Americos JepenJence
on oil by more tbon 2 million borrels per Joy in 202S, wbicb is equivolent to one-bolf of
tbe oil tbot we currently import from 0PFC countries eocb Joy. ln oJJition, tbe
combineJ proqrom will cut 6 billion metric tons of qreenbouse qoses over tbe lifetimes
of tbe vebicles solJ in {moJel yeors) 2012-202S - more tbon tbe totol omount of
corbon JioxiJe emitteJ by tbe 0niteJ Stotes in 2010.

0thei Auministiation initiatives have incluueu:

A Clean Eneigy uianu Challenge-Ev Eveiywheie piogiam uesigneu to make electiic
vehicles as affoiuable anu convenient as gasoline poweieu vehicles foi the aveiage
Ameiican family by 2u22.

Requiiements that all feueial goveinment fleet puichases must be AFvs by 2u1S anu
that feueial agencies must cut theii petioleum consumption by Su%.

The fiist-evei efficiency anu gieenhouse gas emission stanuaius foi heavy-uuty
vehicles staiting in 2u14.

The allocation of $19.S million to help cities anu towns expanu the use of alteinative
tianspoitation fuels anu electiic vehicles. The funus weie uesigneu to help 1u-2u
localities expanu fueling infiastiuctuie foi alteinative fuel vehicles by cutting ieu tape,
stieamlining peimitting, anu tiaining mechanics, fiist iesponueis anu safety officials.

A pioposal to woik with the piivate sectoi to uevelop up to five natuial gas coiiiuois
along 0.S. highways to suppoit natuial gas heavy-uuty tiuck opeiations.

The now-accomplisheu goal to bieak giounu on foui commeicial-scale cellulosic oi
auvanceu bio-iefineiies to biing auvanceu biofuel piouuction to commeicial scale.

Poweiing Foiwaiu
1S2
A pioposeu Eneigy Secuiity Tiust (not yet cieateu by Congiess) that woulu uiveit $2
billion in ievenue fiom feueial oil anu gas ioyalties ovei the next uecaue to funu
ieseaich to "shift oui vehicles off oil foi goou".

Enfoicement of the RFS with the iesult that ethanol accounteu foi about 9% of 0.S.
gasoline by volume in 2u12.

A pioposeu $1 billion National Community Beployment Challenge to catalyze 1u-1S
mouel communities to invest in, cieate incentives foi anu iemove baiiieis to alteinative
fuel vehicles anu infiastiuctuie. If funueu by Congiess, the Challenge woulu suppoit the
uevelopment of five iegional liquefieu natuial gas (LNu) coiiiuois to make the fuel
available to long-haul tiucks.

Piesiuent 0bama's announceu goals foi tianspoitation fuels incluue cutting oil impoits in
half by the enu of this uecaue compaieu to 2uu8; putting 1 million electiic vehicles on
Ameiica's ioaus by 2u1S; continuing to inciease the fuel economy of heavy-uuty tiucks;
anu making cellulosic biofuels a majoi contiibutoi to tianspoitation eneigy.

Paitly as a iesult of Piesiuent 0bama's leaueiship anu paitly because of the legislative anu
executive actions that pieceueu him
)
, alteinative fuels anu vehicles alieauy aie being
integiateu into the nation's tianspoitation system. As the Eneigy Secuiity Leaueiship
Council
*
(ESLC) notes:

IeJerol qovernment spenJinq on oJvonceJ vebicle reseorcb, Jevelopment, onJ
Jeployment {RB&B) olone bos totoleJ more tbon $2.4 billion since 2000. Fconomic
stimulus proqroms JesiqneJ to support monufocturinq of AIvs onJ tbeir components bove
contributeJ on oJJitionol $11 billion in qronts onJ low-interest loons to tbe public sector
totol since 2009...Acquisitions contribute on oJJitionol $600 million to tbe privote sector
totol.

Feueial uoveinment puichases of AFs anu AFvs cieates laigei maikets, iesulting in the
piouuction of moie vehicles, which iesults in economies of manufactuiing scale anu lowei
piices. A key contiibutoi to this positive chain of uevelopment is the Bepaitment of
Befense (BoB) - the biggest institutional eneigy consumei in the woilu. Its goal is to obtain
2S% of its eneigy fiom ienewable iesouices by 2u2S. The Navy plans to have a "uieat
uieen Fleet" poweieu by biofuels anu nucleai eneigy by 2u16. By 2u2u, the Navy plans to
obtain Su% of its total eneigy fiom alteinative iesouices. The Aii Foice plans to obtain
Su% of its uomestic aviation fuels fiom alteinative eneigy, incluuing blenus of biofuels anu
jet fuels.

Poweiing Foiwaiu
1SS

F:298% E> -$+%8*"+:D% (9%$ D%<:.$%, :* +<% V4S4_ 5KKU +' EL5L4 +$*,-% 123+

`+<%8 7,,9%, '* +<% H"1"8

Theie aie uiffeiing views on how anu wheie feueial iesouices aie best applieu to inciease
the sustainability of the 0.S. tianspoitation system. It is ciitical that policy makeis look at
the entiie value chain of a new fuel oi vehicle to ensuie that investments to piouuce moie
pioblems than they solve. Foi example, the climate benefits of electiic vehicles aie
unueimineu if the electiicity is geneiateu with caibon-iich fuels. The efficacy of biofuels
uepenus the amount of fossil eneigy useu in theii piouuction anu the inuiiect effects of
feeustock piouuction, such as lanu use change. The caibon benefits of natuial gas fuels
uepenu on how much methane is emitteu uuiing theii piouuction, tianspoitation anu
stoiage anu by iefueling equipment, as well as the efficiency of natuial gas vehicles (Nuvs).
The piospects foi all AFs aie affecteu by the cost, piacticality anu enviionmental impacts of
the infiastiuctuie neeueu to biing them to consumeis.
The investments of taxpayei funus shoulu be infoimeu by analyzing all benefits anu costs
ovei the life cycle of each fuel anu vehicle. Time, talent anu tieasuie will be most
piouuctive if they aie applieu to iemoving ioaublocks in the way to an AF oi AFv achieving
a national objective, piivate investment anu commeicial competitiveness. Anu feueial
investments in these new fuels anu vehicles shoulu auheie to "goou stage gating" - in othei
woius, helping a fuel oi vehicle technology giauuate to its next level of scale only when it is
ieauy.

Poweiing Foiwaiu
1S4
H%.'33%*1"+:'*, ('8 C8%,:1%*+:"$ -.+:'*

)8',,.9++:*2 H%.'33%*1"+:'*,

Among the expeits CNEE engageu, theie was no uoubt that fai moie can be uone to achieve
the Piesiuent's eneigy anu climate goals with AFs anu AFvs. Seveial potential executive
actions cut acioss the vaiiety of fuel anu vehicle options.

1. 71%*+:(B .$%"8 *"+:'*"$ '#^%.+:D%,4 Biiect the White Bouse Council on Enviionmental
Quality (CEQ) to leau an exeicise in which B0E, the Bepaitment of Tianspoitation (B0T)
anu the EPA collaboiate on ueveloping cleai national peifoimance goals foi alteinative
fuels anu vehicles anu iuentify wheie feueial iesouices aie best applieu. Instiuct CEQ to
consiuei these peifoimance ciiteiia, among otheis:

a) The oveiall life cycle caibon intensity of the AF oi AFv must be substantially lowei
than petioleum;

b) The AF oi AFv must be able to scale to meaningful size to meiit feueial attention. The
ciiteiia woulu excluue niche solutions anu measuies, paiticulaily wheie iesouice
constiaints aie likely to limit the ultimate scale of the solution;

c) The AF oi AFv must not iely on extenueu subsiuies to compete in the maiketplace;

u) The AF must be uomestically piouuceu with a stiongly positive Eneigy Retuin on
Investment (ERI) iatio; i.e., it must piouuce significantly moie eneigy than it takes to
make it anu uelivei it to consumeis.

2. ?'*@+ 2"3#$% '* 9*.%8+":*+:%,4 Instiuct agencies that in setting national piioiities foi
eneigy iesouices geneially anu foi tianspoitation fuels in paiticulai, the
Auministiation will not iely on unpioven oi commeicially unavailable technologies -
foi example, ieuucing the climate impact of a fuel with caibon captuie anu
sequestiation. 0ne objective of setting peifoimance-baseu goals iathei than fuel-
specific goals shoulu be to avoiu assumptions about unpioven oi insufficiently scaleu
technical fixes to uBu emissions.

S. F8"3% +<% *"+:'*"$ .'*D%8,"+:'*4 In the State of the 0nion auuiess anu in ongoing
piesiuential communications, make the Piesiuent's tianspoitation objectives so cleai
anu compelling that they become householu concepts, incluuing how they will benefit
us as a nation, communities anu families. Paiticipants in CNEE's uialogue suggesteu
these messages anu themes:

a) The iesilience of the nation's economy anu eneigy supplies uepenus on uiveisifying
oui fuel souices anu vehicle technologies.

Poweiing Foiwaiu
1SS
b) The oveiaiching goal of tianspoitation policy shoulu be to help the Ameiican people
achieve eneigy secuiity, economic secuiity anu enviionmental secuiity.

c) Petioleum has a place in the nation's foieseeable eneigy futuie, but we must become
fai less uepenuent on it. No mattei how much we piouuce at home, we iemain
vulneiable to the woilu oil maiket anu its volatility.

u) Alteinative fuels anu vehicles aie anothei aiea of emeiging technology in which the
0niteu States can leau the woilu. New jobs anu inuustiies aie the piize when we
captuie a iapiuly giowing global maiket. If we uon't leau, othei nations will, with
the new jobs anu economic oppoitunities that leaueiship pioviues.

e) The 0niteu States has a histoiy of bipaitisanship on eneigy anu enviionmental
policy anu it's a iecoiu we shoulu continue. Eveiy piesiuent of eveiy paity has
aspiieu to inciease the nation's eneigy secuiity. Nany of the most impoitant
enviionmental laws in foice touay weie passeu with bipaitisan suppoit in Congiess
anu uuiing Republican auministiations. These aie not paitisan issues.

f) We neeu gieatei secuiity not only fiom high gasoline piices, but also fiom aii
pollution that enuangeis the health of oui chiluien, fiom the oil conflicts that have
foiceu so many Ameiican geneiations into wai, anu fiom global climate change that
enuangeis oui futuie. It is oui obligation as leaueis to get on with the job anu not
let paitisanship keep us chaineu to the instability anu insecuiities that have been so
much a pait of oui eneigy histoiy.

g) This is not a mattei of new inuustiies veisus olu inuustiies. All of oui eneigy anu
vehicle inuustiies shoulu have skin in this game. Touay, oui tiauitional automakeis
aie ieseaiching anu piouucing vehicles that aie achieving histoiic levels of
efficiency. Companies aie ueveloping commeicially competitive fuels maue fiom
what we once consiueieu wastes. The futuie of tianspoitation in this countiy will
be inventeu not only by entiepieneuis anu new businesses, but also by oluei
companies willing to ventuie into new lines of business anu new maikets.

h) We alieauy aie seeing a new eia of ieliable, clean anu secuie tianspoitation eneigy
emeiging in Ameiica. Natuial gas vehicles. Biouiesel vehicles. Electiic vehicles that
can tiavel 2uu miles oi moie on a single chaige. Algae being tuineu into gieen
petioleum. Nateiials anu lanus we useu to consiuei wastes piouucing ethanol fuels.
Winu anu solai faims pioviuing electiicity foi plug-in cais. New fuels, new
inuustiies, new jobs, new ciops anu maikets foi faimeis, anu new ievenues foi iuial
counties.

4. )8%"+% "* "$+%8*"+:D% (9%$ "*1 D%<:.$% 8'"13"= "*1 "* ".+:'* =$"* +' ".<:%D%
*"+:'*"$ '#^%.+:D%,. Reseaicheis, investois anu manufactuieis neeu a cleai national
stiategya ioaumapthat iuentifies the paths to achieving the Auministiation's
tianspoitation objectives. The Piesiuent can uiiect B0E to engage its National
Laboiatoiies along with EPA, B0T anu the 0.S. Bepaitment of Agiicultuie (0SBA) to
Poweiing Foiwaiu
1S6
uevelop such a ioaumap baseu on empiiical analysis of the most cost-effective
investments to achieve the Piesiuent's goals on climate, economic anu eneigy secuiity.
9

As one CNEE paiticipant put it, this shoulu not be an AFv 1u1 uocument; it shoulu be
stiategic anu specific, iuentifying challenges, goals anu milestones. The ioaumap
shoulu:

a) Iuentify systemic as well as policy-ielateu baiiieis to full commeicialization of these
fuels anu vehicles.

b) Incluue an action plan that assigns specific jobs anu ciosscutting iesponsibilities to
each ielevant feueial agency.

c) 0se BT0-equivalent iathei than volumetiic goals.

u) Focus on a bioau set of cleai high-level goals.

e) Nove goveinment policy fiom "an eia of picking winneis to an eia of unueistanuing
what we neeu to achieve," in the woius of one paiticipant.

f) Nake a compelling case foi why we neeu changes in Ameiica's tianspoitation
system.

g) Iuentify inconsistencies in feueial policies anu how to iesolve them. Foi example,
how uo feueial goals foi ieuucing uBu emissions fiom powei plants ielate to watei
iules that woulu inhibit nucleai powei geneiation. Also auuiess syneigies, oveilap
oi contiauictions between feueial anu state policies - foi example, feueial
incentives foi puichasing plug-in electiic vehicles at the same time some states tax
the vehicles because the aien't subject to a fuel tax.

h) Incluue ciitical inputs fiom inuustiy in a piocess moueleu on B0E's Inuustiies of the
Futuie Piogiam.
10

i) Engage state anu local agencies that have been in on the fiont line of piomoting AFs
anu AFvs. The expeiiences anu lessons of leauing states can guiue feueial effoits to
cooiuinate anu facilitate AF anu AFv piomotion anu uemonstiation piogiams at the
state anu local levels.

j) Befine neai-, miu-, anu long-teim goals that aie piopeily stage-gateu (see the
section on this topic latei in this papei). 0ne paiticipant iecommenueu woik on a
few specific goals each yeai anu getting them uone befoie moving to a new set of
goals.

4. W"B 28'9*10'8/ ('8 +<% 8'"13"=. To lay the giounuwoik foi the ioaumap, the
Auministiation can take these steps:

Poweiing Foiwaiu
1S7
a) Iuentify oi cieate a piotocol to quantify the full life-cycle benefits anu costs of
alteinative fuel options to pioviue a fiamewoik foi feueial, state, local anu piivate
fleet policies. Analyze the full aiiay of enviionmental, economic anu social factois,
incluuing social equity; uiiect anu inuiiect net job cieation; the likelihoou of
consumei acceptance baseu on factois such as cost, convenience, quality,
peifoimance anu piacticality; net impacts of extiacting oi cultivating, piocessing anu
uistiibuting each AF; enviionmental impacts associateu with combustion anu
emissions; the long-teim availability of fuel supplies anu the natuial iesouices
necessaiy to piouuce fuels anu vehicles at scale; the ability to ieuuce oil impoits;
each option's miu-teim ability to compete economically with petioleum fuels; anu
the cost of ueveloping the necessaiy infiastiuctuie to move fuels to maiket.
11
Assess
how these costs vaiy by iegion. Wheie possible, use oi impiove existing stuuies anu
tools such as Aigonne National Laboiatoiy's (ANL's) uREET mouel.
12

b) 0se this assessment to uevelop piioiities anu goals foi the impiovement of each fuel
anu vehicle option in aieas wheie they fall shoit. Ensuie that effoits aie piopeily
stage-gateu.

S. )'*19.+ "*1 =9#$:,< ,.%*"8:' "*"$B,%, '( :*+%8X,%.+'8 (9%$ "*1 D%<:.$%
"$:2*3%*+,4 Bevelop anu assess scenaiios in which AFs, AFvs anu theii infiastiuctuies
aie aligneu with ielateu national piioiities such as uistiibuteu powei geneiation,
system iesilience, climate change auaptation, aii quality, watei anu soil conseivation,
foiestation anu iefoiestation, agiicultuie policy, anu high-peifoimance builuings.
1S

6. I'*:+'8 +<% ,.:%*+:(:. 1%#"+% on anu evaluate the benefits of using Technology
Waiming Potential (TWP) as well as ulobal Waiming Potential (uWP) to ieveal the
iauiative foicing of each fuel option anu the time-uepenuent tiaueoffs inheient in AFs.
14

7. 73=8'D% (9$$ $:(% .B.$% .',+ "*"$B,:, ('8 -FR =98.<",%,4 In }uly 2u1S, the
uoveinment Accountability 0ffice (uA0) ievieweu the fleet management piactices of
seveial feueial agencies anu founu that:

Host of tbe selecteJ oqencies ore not fully onolyzinq life-cycle costs to moke Jecisions
obout wben to reploce vebicles. ln oJJition, oltbouqb most of tbe selecteJ oqencies use
life-cycle cost onolyses to JeciJe wbetber to leose or purcbose vebicles, some oqencies
onolyses Jo not consiJer o full set of costs.

8. H%1%(:*% $:(% .B.$% .',+:*2. In feueial fleet uecisions, life-cycle calculations shoulu go
beyonu ueteimining when vehicles shoulu be ieplaceu. The ueneial Seivices
Auministiation (uSA) shoulu uiiect agencies to apply (9$$X.',+ life cycle analyses when
choosing AF fleet vehicles.
1S
uSA shoulu uefine "full cost" as the benefits anu costs
ielateu not only to the economics of each vehicle's opeiational life, but also to factois
that tiauitionally have been exteinalizeu such as the social cost of caibon anu the
impacts on the "tiiple bottom line" of economic, enviionmental anu eneigy secuiity.

Poweiing Foiwaiu
1S8
9. S+8%*2+<%* $%"1%8,<:= '* "1D"*.%1 +8"*,='8+"+:'* (9%$, "*1 +%.<*'$'2:%,4 If by
the time this papei is issueu, B0E has not selecteu a Beputy Assistant Secietaiy foi
Auvanceu Tianspoitation within the 0ffice of Eneigy Efficiency anu Renewable Eneigy,
it shoulu expeuite the hiiing. The Beputy Assistant Secietaiy shoulu be chaigeu with
oveiseeing anu managing B0E's alteinative fuel anu vehicle piogiams incluuing Ev
Eveiywheie; ielateu ieseaich by the Auvanceu Reseaich Piojects Agency-Eneigy
(ARPA-E)
16
; anu the Fuel Cells Technology, vehicle Technologies, Biomass anu Clean
Cities Piogiams.
17
The Beputy Assistant Secietaiy shoulu align piogiam piioiities with
the finuings in Recommenuations 1 anu 4 above (setting objectives anu ueveloping a
ioaumap) to ensuie that iesouices aie being uiiecteu to wheie they will piouuce the
most benefit.

1u. )<"3=:'* +"[ ="8:+B foi the most beneficial non-petioleum fuels anu vehicles as an
essential element of tax coue iefoim: In this context, tax paiity shoulu be uefineu as
pioviuing tax incentives foi alteinative fuels at least as substantial as those pioviueu to
petioleum fuels. Tax paiity woulu not mean equal tieatment foi all alteinative fuels; it
woulu mean that all fuels aie evaluateu with the same benefit-cost analysis. Tax
incentives, if any, woulu be baseu on the uegiee that each fuel woulu contiibute to
national goals such as gieenhouse gas ieuuctions.

11. H%.'2*:]% "*1 8%0"81 $%"1%8,<:=4 Cieate a Piesiuent's Awaiu piesenteu annually at
the White Bouse to the companies, states oi communities that most contiibute to the
nation's tiansition to sustainable tianspoitation fuels anu vehicles. Featuie case stuuies
of nominees on the White Bouse website.

12. H":,% +<% D:,:#:$:+B '( +<% )$%"* ):+:%, =8'28"34 B0E's Clean Cities piogiam was
launcheu uuiing the Clinton Auministiation to solve the chicken-anu-egg pioblem in
ueploying alteinative fuels anu vehicles. The pioblem is this: Fuel pioviueis won't builu
fueling sites unless theie aie sufficient numbeis of vehicles on the ioau anu using the
fuels; fleet owneis anu consumeis won't buy AFvs if they can't conveniently iefuel
them; anu vehicle manufactuieis won't builu AFvs unless theie is consumei uemanu.

Clean Cities uses the Feueial uoveinment's convening powei to bieak the impasse. It
helps communities get all the impoitant stakeholueis to the table at one time to make
ueals: Fuel pioviueis agiee to builu fuel anu seivice infiastiuctuie; fleet manageis
agiee to buy the vehicles that will use the fuels; anu equipment manufactuies agiee to
make the vehicles available. The piogiam also pioviues technical assistance,
infoimation, netwoiking anu othei seivices.

Clean Cities has helpeu stait neaily 1uu coalitions. Its paiticipating cities contain 74%
of the nation's population. The Piesiuent shoulu iaise the visibility of the piogiam anu
encouiage moie communities to join, peihaps by visiting cities with the most successful
coalitions.

Poweiing Foiwaiu
1S9
1S. S%+ 8%,%"8.< "*1 1%=$'B3%*+ =8:'8:+:%,. Biiect the Secietaiy of Eneigy to piioiitize
auuitional ieseaich anu ueployment effoits foi AFs anu AFv technologies at B0E's
National Laboiatoiies. In iegaiu to infiastiuctuie, NREL has iuentifieu the following
topics wheie auuitional ieseaich is neeueu:

a) Impioveu uecision-making foi investments in fuel piouuction anu ietail
infiastiuctuie, baseu on the evaluation of fuel-specific costs, technical challenges,
maiket oppoitunities anu baiiieis, policy anu financing mechanisms, anu
enviionmental anu social effects.

b) The inclusion of infiastiuctuie change intensity in the selection ciiteiia foi vaiious
eneigy options.

c) Bow to assess fuel infiastiuctuie expansion costs in the context of the total cost of
uiiving incluuing fuel costs, vehicle owneiships costs, anu enviionmental anu social
impacts associateu with fuel use anu tianspoitation seivices.

u) A bettei unueistanuing of consumei vehicle puichase uecisions anu the influence of
spatial pioximity anu geogiaphic coveiage of uiffeient types of iefueling
infiastiuctuie in uiffeient locations with uiffeient iefueling times anu vehicle
ianges.

e) The potential iole of public-piivate paitneiships (incluuing involvement of utilities
oi cuiient fuel pioviueis) in suppoiting infiastiuctuie planning anu expansion, anu
in oveicoming maiket baiiieis.

f) 0nueistanuing maikets foi vaiious vehicles anu fuels at a geogiaphically uetaileu
level, to factoi in iegion-specific effects on technology iollout anu the potential foi
iegionalizeu maikets, incluuing the influence of state anu local policy incentives.

14. P",% S+"*1"81, '* hQ<'$% R%<:.$%i )<"8".+%8:,+:.,: When establishing fuel-
economy stanuaius foi heavy-uuty tiucks beyonu 2u18, apply them to the entiie tiuck
system - i.e., to tiaileis as well as cabs. Base the pioposeu post-2u18 stanuaius on
lessons leaineu so fai in B0E's Supeitiuck anu the multi-agency 21st Centuiy Tiuck
Paitneiship piogiams.
18

1S. P",% S+"*1"81, '( hQ<'$% R"$9% )<":*i 73=".+,: When establishing uBu emission
stanuaius foi vehicles, incluue methane emissions not only fiom the tailpipe but fiom
the entiie vehicle system - iefueling, fuel tanks, anu so on - to pievent fugitive methane
ieleases.

Poweiing Foiwaiu
14u
F9%$XS=%.:(:. H%.'33%*1"+:'*,

N"+98"$ O",>

1. C8'3'+% *%"8 ]%8' %3:,,:'*, ,+8"+%2:%, ('8 *"+98"$ 2", %*2:*%, +' :3=8'D%
'D%8"$$ ."8#'* "*1 .8:+%8:" ":8 %3:,,:'*, =%8('83"*.%4 The Califoinia Aii
Resouices Boaiu iecently auopteu new optional low oxiue of nitiogen (N0x)
stanuaius
19
foi on-ioau heavy-uuty engines to incentivize the piouuction of engines
capable of ieuucing N0x emissions Su% to 9u% below feueial anu Califoinia 2u1u
heavy-uuty engine emissions stanuaius. EPA coulu auopt a similai appioach that woulu
establish both caibon anu ciiteiia emissions incentive taigets foi natuial gas engines,
piomoting moie efficient engine uesigns anu platfoims that coulu piouuce zeio
emission-like peifoimance. In line with the Piesiuent's iequest that the Eneigy
Secietaiy challenge oui biightest engineeis, scientists anu entiepieneuis to piouuce
new bieakthioughs foi NuvS, B0E shoulu also consiuei suppoiting ieseaich,
uevelopment anu uemonstiation piojects similai to the Califoinia Eneigy Commission's
PIER Piogiam's funuing of flexible electio-hyuiaulic valvetiain ("camless" engine)
uesigns that achieve bieakthiough theimal efficiencies anu ultia-low emission levels.
2u

2. C8'3'+% "*1 :*+%28"+% H%*%0"#$% N"+98"$ O", 9,% :* +<% +8"*,='8+"+:'* ,%.+'84
The Califoinia Aii Resouices Boaiu iuentifies Renewable Natuial uas (RNu), oi
biomethane, as an ultia low caibon fuel that can pioviue up to 88% less caibon
emissions than petioleum-baseu fuels when poweiing a natuial gas tiuck.
21
RNu is
also the only commeicially available cellulosic biofuel that can powei an 18-wheelei
while not being subject to a blenu wall iestiiction that impaiis an engine's waiianty.
uiven that EPA has iuentifieu heavy-uuty vehicles as the fastest-giowing contiibutois to
gieenhouse gas emissions in its iecent heavy-uuty fuel economy stanuaius
22
, it is
ciitical that feueial policies help incentivize anu auvance RNu piouuction fiom lanufills,
wastewatei tieatment facilities, anu agiicultuial waste stieams by iemoving baiiieis to
piivate capital. Naiket mechanisms that woulu encouiage piivate capitalization of
RNu piojects thiough the establishment of a national gieen bank, a national low caibon
fuel stanuaiu anu continueu suppoit of the Renewable Fuels Poitfolio (RFS) piogiam
shoulu be consiueieu. It is also impoitant that the pioposeu 2u14 Renewable Fuel
volume 0bligations (Rv0) foi Cellulosic Biofuels unuei the Renewable Fuels Stanuaiu
(RFS-2) be amenueu to accuiately ieflect RNu volumes ueuicateu foi tianspoitation
fuel in 2u14.

S. A*.'98"2% %*2:*% 3"*9(".+98%8, +' 1%D%$'= *"+98"$ 2", "==$:."+:'*, +' ='0%8
=8'19.+:'* %Y9:=3%*+ "*1 '+<%8 '((X8'"1 "==$:."+:'*,4 Biiect B0E anu EPA to woik
with the oil anu gas inuustiy to iuentify the costs anu benefits of using excess natuial
gas at well sites to powei off-ioau vehicles anu othei equipment useu in oil anu gas
piouuction anu tianspoit. Examples incluue geneiatois, uiilling iigs, the pumps useu in
hyuiaulic fiactuiing, bulluozeis anu othei excavation equipment, foik lifts, locomotives,
anu maiine vessels.

Poweiing Foiwaiu
141
4. S+91B "*1 (:*1 ,'$9+:'*, ('8 ='+%*+:"$ $%"/, :* D%<:.$% 8%(9%$:*2 :*(8",+89.+98%4
Biiect EPA to investigate any potential methane leaks fiom natuial gas vehicle iefueling
infiastiuctuie anu iecommenu impiovements in the equipment; anu to ueteimine
whethei a iulemaking is neeueu to iequiie closeu-loop oi inuustiial ecology uesigns foi
iefueling infiastiuctuie. Auvise EPA that these actions shoulu be completeu as soon as
possible so that RB&B piojects can help auuiess any potential methane leak issues as
the Auministiation piomotes the use of natuial gas fuels.

S. S9=='8+ +<% C8%,:1%*+@, ."$$ +' 0'8/ 0:+< =8:D"+% :*19,+8B +' 1%D%$'= (:D% *"+98"$
2", (9%$:*2 ,+"+:'* .'88:1'8,4 Encouiage the uevelopment of public-piivate
paitneiships that piomote coiiiuois that utilize best Nuv infiastiuctuie piactices
leaineu fiom pioposeu EPA methane leak stuuies.

-$+%8*"+:D% F9%$, (8'3 H%*%0"#$% H%,'98.%,>

14 )'*+:*9% ,9=='8+:*2 +<% "..%$%8"+%1 1%D%$'=3%*+ '( "1D"*.%1 #:'(9%$,4

a) Piomote the classification of algae cultivation as a foim of agiicultuie.

b) To establish RB&B piioiities, uiiect B0E, 0SBA anu EPA to uevelop moie piecise
uefinitions of auvanceu biofuels, uiffeientiating between those piouuceu fiom
biomass vs. non-biomass substances; to iuentify the ielative net uBu emissions
impacts of each type of biofuel; anu to intensify theii woik to help the most beneficial
fuels achieve commeicialization anu scale.

c) Biiect BoB anu othei feueial agencies to expanu the maiket foi high-value auvanceu
biofuels by using them wheievei they aie suitable anu cost-effective.

u) Biiect the appiopiiate feueial agencies to mouify policies, peimitting, anu
ceitification piactices to enable a moie level playing fielu foi high-value auvanceu
biofuels while avoiuing fuel-specific policies that make it challenging foi new fuels to
evolve.

2. 71%*+:(B "*+:.:="+%1 .$:3"+% :3=".+, '* +<% *"+:'*@, #:'3",, ='+%*+:"$4 Biiect
0SBA, B0E, the 0.S. ueological Seivice (0SuS) anu the National 0ceanic anu
Atmospheiic Auministiation (N0AA) to collaboiate on iuentifying the impacts that
global climate change aie likely to have on the nation's ability to piouuce bioeneigy at
the levels iuentifieu in the 2u11 "Billion Ton" stuuy.
23

S4 -118%,, $"*1 9,% .<"*2% :,,9%,4 Since 2uu8, significant effoits have been maue in
0niteu States anu Euiope to use economic mouels to iuentify the impacts of lanu use
changes. Recent stuuies have ieacheu contiauictoiy oi inconsistent conclusions about
emissions ielateu to lanu use. Biiect EPA, 0SBA, anu B0E to conuuct a scientific ieview
of iecent lanu use change stuuies anu to suggest wheie auuitional ieseaich is neeueu to
iesolve the stuuies' uiffeiences.
Poweiing Foiwaiu
142
4. -118%,, +<% (''1 D,4 (9%$ :,,9%4 The 0niteu Nations Foou anu Agiicultuie Piogiam has
uevelopeu stiategies anu tools incluuing a Climate-Smait Agiicultuie Souicebook anu a
Bioeneigy toolkit foi the co-piouuction of foou anu eneigy feeu stocks on cioplanus.
The piogiam's specialists contenu that with piopei management, theie neeu not be
competition between foou anu fuel on these lanus. 0thei expeits emphasize that foou
vs. fuel conflicts cannot be avoiueu in monocultuie coin ethanol piouuction. Biiect
0SBA to evaluate the 0N's finuings anu mateiials, as well as the finuings of othei
nations anu inteinational expeits, anu to uistiibute the most cieuible infoimation to
faimeis anu biofuel piouuceis in the 0.S. Also uistiibute infoimation on low-iisk eneigy
feeustocks, sustainable lanu-use management anu efficient biofuel piocessing
methous.
24

S. -==$B (9$$X.',+ ("83X+'XD%<:.$% "..'9*+:*2 +' #:'(9%$,4 Full-cost accounting foi
biofuels involves specializeu analysis anu analytic tools. Biiect 0SBA to iepoit to CEQ
on its woik to uate on full-cost accounting foi biofuels. Biiect CEQ to evaluate 0SBA's
woik anu methouology baseu on cuiient science anu technology anu to assist with
impiovements if any aie neeueu.
$'

6. -$:2* #:'(9%$ ='$:.:%, 0:+< 8%$"+%1 =8:'8:+:%,4 Biiect 0SBA, EPA, anu B0E to iepoit to
CEQ on how they align bioeneigy piogiams anu policies with ielateu policies in
foiestiy, iuial uevelopment, watei conseivation, climate change mitigation anu
sustainable eneigy. Biiect CEQ to iecommenu impiovements if necessaiy.

7. )8%"+% " *%0 ."+%2'8B '( #:'(9%$, +<"+ .'D%8, (9%$, =8'19.%1 (8'3 *'*X#:'3",,
8%,'98.%,4 Biiect EPA to ueteimine whethei it has the auministiative authoiity to
cieate a specific categoiy in the RFS to covei biofuels maue fiom non-biomass
iesouices, such as those piouuceu fiom inuustiial emissions of caibon uioxiue. If it
uoes not have that authoiity, uiiect EPA to make the uistinction foi the puiposes of its
woik anu piopose that Congiess amenu the RFS to cieate the new categoiy.

A$%.+8:. R%<:.$%,>

1. S9=='8+ AR .<"82:*2 0:+< )I-a (9*1,4 Thiough the Feueial Bighway Auministiation
(FBWA) anu the Feueial Tiansit Auministiation (FTA), piioiitize funuing fiom the
Congestion Nitigation Aii Quality Impiovement (CNAQ) Piogiam foi solai-poweieu
electiic vehicle chaiging stations in both nonattainment aieas anu states that have no
nonattainment aieas but aie still eligible foi funuing unuei the NAP-21 (Noving Aheau
foi Piogiess in the 21st Centuiy) Piogiam. To make best use of feueial iesouices,
taiget funuing foi chaiging stations fiist at woik places, followeu by homes, commeicial
places anu in-tiansit applications.

2. ?%D%$'= 3'1%$ .<"82:*2 8%29$"+:'*,4 Biiect B0E to woik with the utility sectoi on
mouel iegulations to ensuie that electiic vehicle chaiging is efficient anu ueliveis uBu
emission savings.

Poweiing Foiwaiu
14S
S. ?8"0 '* 9+:$:+B "*1 ,+"+% %[=%8:%*.% +' %((%.+:D%$B +"82%+ CAR :*.%*+:D%,4 0ne laige
utility paiticipating in the CNEE uialogue has founu that buying uown the cost of
electiic vehicles, foi example with iebates, is the most effective way to incentivize PEv
auoption. Biiect B0E to gathei lessons fiom othei states anu utilities to moie effectively
taiget feueial incentives.

4. )'*19.+ %19."+:'* '* CAR,4 Biiect B0E, B0T anu EPA to conuuct a public euucation
piogiam that coiiects misinfoimation anu auuiesses consumei conceins about hybiiu
anu electiic vehicles. Incluue infoimation on the oveiall savings of money, eneigy anu
gieenhouse gas emissions consumeis can achieve by owning electiic vehicles anu
chaiging them with uistiibuteu solai eneigy systems.

U4 A$%.+8:(B <%"DBX19+B D%<:.$%,4 By one estimate, a fifth of the tianspoitation fuel
consumeu in the 0niteu States is useu by meuium- anu heavy-uuty tiucks. The
electiification of these vehicles shoulu be an impoitant component of the
Auministiation's effoits to ieuuce aii pollution anu oil consumption, paiticulaily foi
iegions neeuing uiamatic cuts in gieenhouse gases anu othei aii emissions. Biiect B0E
to ieuouble its woik with tiuck manufactuieis anu the tiucking inuustiy on a iange of
electiification options, incluuing hybiiu-electiic tiucks that take auvantage of
iegeneiative bieaking; batteiy-poweieu electiic tiucks foi shoit-haul applications; fuel
cell electiic tiucks; batteiy poweieu auxiliaiy powei; anu exteinal electiic powei in
which tiucks iun on systems similai to tiolley cais anu light iail.

6. C8'19.% " .'*,'$:1"+%1 8'"13"= ('8 CAR,4 The Ciosscutting Recommenuations
eailiei in this papei piopose that the Auministiation uevelop an AFAFv ioaumap4 In
iegaiu to PEvs, the Auministiation can builu upon woik that's alieauy been uone by
seveial oiganizations. Foi example, the Ameiican National Stanuaius Institute (ANSI)
issueu a StonJorJizotion RooJmop for Flectric vebicles version 1.0 in Apiil 2u12. It
offeis guiuance on how to stanuaiuize eneigy stoiage systems, vehicle components,
chaiging systems anu seveial othei components of vehicles anu infiastiuctuie. The
ANSI uocument also lists S2 "gaps anu iecommenuations" that neeu fuithei attention.
In auuition, Congiess has uiiecteu the National Acauemy of Sciences to stuuy how to
iemove baiiieis to Ev ueployment
26
anu B0E's vehicle Technologies 0ffice has
piouuceu a seiies of technical ioaumaps foi AFvs. Biiect B0E to woik with these
oiganizations anu othei key stakeholueis to piouuce a consoliuateu PEv ioaumap that
auuiesses how feueial, state, public utility commissions (P0Cs) anu utility policies can
auvance the use of PEvs while keeping abieast of ongoing technical auvances in these
vehicles anu theii infiastiuctuie.
27

\B18'2%* F9%$,>

2. ?%D%$'= <B18'2%* :*(8",+89.+98%4 0ne of the key finuings fiom the 2u1S National
Acauemy of Sciences Committee Repoit on Tiansitions to Alteinative vehicles anu
Fuels is that a failuie to builu a minimal hyuiogen infiastiuctuie woulu kill the fuel cell
maiket. Califoinia is in the piocess of builuing 6u hyuiogen stations to allow the fuel
Poweiing Foiwaiu
144
cell maiket to uevelop theie. Biiect B0E to use Califoinia's plan as a template to woik
with othei states on builuing hyuiogen infiastiuctuie.

S. )'88%.+ ,"(%+B =%8.%=+:'*,4 Biiect agencies involveu in communicating with the
public about AFs to coiiect misinfoimation about the safety of hyuiogen fuels.

4. V,% 8%*%0"#$% %*%82B :* <B18'2%* =8'19.+:'*4 Biiect B0E to woik with the
hyuiogen anu ienewable eneigy inuustiies to piomote the use of ienewable eneigy to
piouuce hyuiogen. Publicize the ielative gieenhouse gas impacts of uiffeient hyuiogen
feeustocks to emphasize that the fuel's climate benefits uepenu on how it is piouuceu.

-2%*.B -.+:'*,

Q<:+% \'9,% )'9*.:$ '* A*D:8'*3%*+"$ a9"$:+B

1. C8'+%.+ <"#:+"+4 Bevelop guiuance on minimizing negative impacts of biofuel feeustock
piouuction on lanu, watei, wilulife anu othei natuial iesouices. Biiect that agencies with
iesponsibilities to piotect these iesouices incoipoiate CEQ's guiuance into theii plans
anu policies. Foi example, engage the 0.S. Fish anu Wilulife Seivice in ueveloping habitat
cieuit maikets that encouiage piivate tiansactions to piotect aieas that coulu be
impacteu by the piouuction of biofuel feeustocks.

?%="8+3%*+ '( A*%82B

1. ?%D%$'= " $'0X."8#'* (9%$ ,+8"+%2B4 In collaboiation with CEQ anu EPA, uevelop low-
caibon fuel peifoimance goals foi the ioaumap pioposeu in this papei's Ciosscutting
Recommenuations. Annually iank the ability of cuiient fuel anu vehicle options to meet
the peifoimance goals. The puipose of this effoit will be to encouiage continuous
caibon peifoimance impiovements foi alteinative fuels anu to help guiue feueial, state,
local anu piivate investments in the highest-peifoiming fuels anu AF infiastiuctuie.

2. A[="*1 ,%.'*1 $:D%, ('8 #"++%8:%,4 Biiect the National Laboiatoiies to pioactively
seek coopeiative ieseaich anu uevelopment agieements (CRABAs) with inuustiies to
uevelop seconu-life applications foi batteiies useu in PEvs anu in stanu-alone solai
eneigy systems.

S. !"82%+ 3'*%+"8B "*1 +%.<*:."$ ",,:,+"*.% +' 3',+ %((%.+:D%$B ,9=='8+ +<%
C8%,:1%*+@, AR 2'"$,4 Foi example:

a) Bemonstiate "fast chaigeis" in B0E-funueu PEv uemonstiation piojects.
28
Requiie
that the piojects uocument the costs, benefits anu effectiveness of the chaigeis.

b) Woik thiough State Eneigy 0ffices to help P0Cs "haimonize technical stanuaius,
stieamline the installation of householu anu commeicial chaiging stations, anu use
Poweiing Foiwaiu
14S
electiicity iate stiuctuies to piomote chaiging at off-peak houis."
29
Biiect the
Tennessee valley Authoiity anu Powei Naiketing Auministiations to uemonstiate
anu encouiage these iegulatoiy fiamewoiks foi theii customeis.

4. C9,< ('8 28%"+%8 9,% '( ASC),4 Biiect the Feueial Eneigy Nanagement Piogiam
(FENP) to iuentify those AFs anu AFvs that pioviue eneigy cost savings anu piomote
gieatei use of ESPCs to puichase those vehicles.

S4 )<"*2% A88'*%'9, C9#$:. C%8.%=+:'*, "#'9+ -FR,4 In events, blog posts, op-eus anu
news ieleases involving the Secietaiy, conuuct a communications campaign that:

a) Recasts the value of PEvs anu BEvs among policy makeis. CNEE's ieseaich iuentifieu
conceins about how policy makeis peiceive PEvs anu BEvs. "PEvs aie geneially
associateu with enviionmental benefits anu aie thus not at the top of the agenua foi
eveiy uecision makei in eveiy state," saiu one souice.
Su
"A small investment in
bioauening PEv auvocacy piogiams coulu go a long way."

b) Bemonstiates that touay's AFvs aie iobust4 Show how AFvs anu AFs being useu by
NASCAR, the militaiy incluuing Naiines in Afghanistan, anu heavy-uuty tiucks in
well known fleets such as Feueial Expiess. Scheuule photo ops anu visits by the
Secietaiy to exemplaiy AF anu AFv ueployments, incluuing visits to militaiy bases
with the Secietaiy of Befense. Piopose that the Piesiuent highlight militaiy
applications of ienewable eneigy anu fuels in his next State of the 0nion auuiess.

c) Spotlights successes. Publicize case stuuies of cities anu iegions that aie achieving
quantifiable benefits to theii economy, eneigy secuiity anu enviionment because of
AFs anu AFvs.

6. )'*+:*9% "228%,,:D% 8%,%"8.< :*+' D%<:.$% %((:.:%*.B (%"+98%, ,9.< ",
"%8'1B*"3:., "*1 +<% 9,% '( $:2<+0%:2<+ 3"+%8:"$,4 Biiect the National Laboiatoiies
to be pioactive in seeking CRABAs
%"
on auvanceu vehicle uesigns anu mateiials that
ieuuce tianspoitation eneigy uemanu.

7. C8'D:1% :*+%83'1"$ ",,:,+"*.% +' 3'8% 1%3'*,+8"+:'* .'339*:+:%,4 Biiect the
National Laboiatoiies with ielevant expeitise to pioviue technical assistance to cities
that aie ueveloping low-caibon inteimoual tianspoitation systems, incluuing AFvs.
S2

uive piioiity to cities eniolleu in B0E's Clean Cities piogiam.

8. C8'D:1% ,+"+%, "*1 $'."$:+:%, 0:+< 29:1%$:*%, '* 8:2<+X,:]:*2 +<%:8 3'#:$:+B
,B,+%3,4
GG
Woik with the inteiagency Paitneiship foi Sustainable Communities to
uevelop anu uistiibute infoimation on how cities can "iight size" theii multi-moual
tianspoitation systems.
S4

9. `((%8 "* k C8:]% ('8 CAR .<"82:*24 Set asiue a poition of State Eneigy Piogiam giants
in the next giant cycle to pioviue a cash awaiu to the fiist city anu utility that
collaboiatively achieve the laige-scale integiation of electiic vehicle chaiging stations
Poweiing Foiwaiu
146
in the electiic giiu. Requiie that the winning pioject incluue iesiuential as well as
commeicial anu municipal iechaiging facilities anu that the utility uemonstiate the use
electiic vehicles foi powei stoiage.

1u. C8%="8% ('8 "1D"*.%1 #:'(9%$,. 0se the Section 17uS oi Section 17uS loan piogiam to
finance one oi moie piojects that uemonstiate innovative piocesses to piouuce
auvanceu biofuels fiom ienewable feeustocks.

11. `((%8 ,+8"+%2:. ,9=='8+ +' .$%"* (9%$ .'88:1'8,4 0ne expeit in the CNEE exeicise
obseiveu that fuel pioviueis cannot make goou economic investments in clean fuel
coiiiuois without sufficient business fiom high-volume fleets such as long-haul
tiucking companies. Instiuct the Clean Cities piogiam to help the uevelopeis of clean
fuel coiiiuois assess high-value fleet tiaffic along the coiiiuois anu obtain iefueling
commitments fiom fleet opeiatois. Encouiage highway officials to pioviue incentives
foi AFs, foi example toll exemptions foi heavy-uuty AFvs using the coiiiuois.

12. 7*('83 AR :*(8",+89.+98% 1%,:2*4 Assign the National Laboiatoiies to assess cuiient
ieseaich on the uiawbacks anu benefits foi utilities of integiating uistiibuteu
ienewable electiic Ev chaiging stations into the giiu. Baseu on the assessment, uevelop
guiuelines foi the Clean Cities piogiam to help communities plan Ev chaiging
infiastiuctuie in ways that mitigate uiawbacks foi the utility powei system.
SS
Also
uevelop guiuance foi uSA to use in auvising agencies on how to piopeily install
chaiging stations at feueial facilities.

1S. )'*19.+ " 9,%8 ,98D%B '* +<% -F?)4 0ne paiticipant in the CNEE uialogue suggesteu
the public neeus a moie usei-fiienuly centializeu infoimation iesouice that
consoliuates AF anu AFv incentives nationwiue, offeis biief oveiviews of those
incentives, anu pioviues ieauy access to the Feueial uoveinment's existing iesouices -
foi example, the infoimation at: www.fueleconomy.gov. Instiuct the AFBC to auu a
featuie to its website that invites useis to offei iecommenuations foi the site's
impiovement.

14. C8'3'+% -F, ('8 (8%:2<+4 Biiect FENP anu uSA to help agencies integiate AFs anu
AFvs into the piocuiement of fieight anu package ueliveiy seivices.

1S. 7*.'8='8"+% -F, :* 1:,",+%8 =8%="8%1*%,,4 In the next piogiam yeai guiuance foi
foimula giants in the State Eneigy Piogiam, encouiage states to uefine the potential
ioles of AFs anu AFvs in theii eneigy emeigency piepaieuness anu eneigy assuiance
plans -foi example, the contiibution AFs can make to state anu local eneigy secuiity in
the event that supplies of tiauitional fuels aie inteiiupteu by natuial uisasteis oi
inteinational conflicts.

16. -118%,, $'."$ .'1% :,,9%, +<"+ :*<:#:+ +<% "D":$"#:$:+B '( <B18'2%* (9%$,4 Ensuie
that the Clean Cities piogiam helps local officials iuentify anu mouify local coues that
make it uifficult to builu hyuiogen iefueling stations uue to misconceptions about
safety.
Poweiing Foiwaiu
147
?%="8+3%*+ '( !8"*,='8+"+:'*

1. P9:$1 =9#$:. ,9=='8+ ('8 "11:+:'*"$ (9%$ %.'*'3B ,+"*1"81,4 Bave the NBTSA lay
the political giounuwoik foi miu-couise ieview of Nouel Yeai 2u17-2u2S fuel economy
stanuaius foi passengei vehicles anu light-uuty tiucks by publicizing uata anu case
stuuies about the significant benefits that consumeis anu the countiy have ieceiveu
fiom the stanuaius so fai.

2. S9=='8+ -F .'88:1'8, '* +<% 7*+%8,+"+% \:2<0"B SB,+%34 In a collaboiation between
the Feueial Bighway Auministiation, B0E anu the Clean Cities piogiam, inciease
technical suppoit anu when possible financial suppoit to oiganizations woiking to
cieate successful alteinative fuel coiiiuois along the Inteistate Bighway System anu
othei majoi tianspoitation ioutes.
%(

?%="8+3%*+ '( S+"+%

1. S9=='8+ 8%19.+:'*, :* "D:"+:'* ."8#'*4 Publicly suppoit the latest veision of the
Euiopean 0nion's aviation caibon tax plan anu auvise the Piesiuent whethei the 0niteu
States shoulu cieate a similai plan foi flights thiough 0.S. aii space.
%)

A*D:8'*3%*+"$ C8'+%.+:'* -2%*.B

14 )8%"+% " hO'$1%* )"88'+i ('8 "1D"*.%1 #:'3",, (9%$,. In collaboiation with B0E anu
0SBA, offei a significant cash piize foi the bieakthiough that most contiibutes to the
successful commeicialization of cellulosic biofuels.
%*
Beteimine whethei funus in the
Section 17uS anu 17uS loan piogiams at B0E can be useu foi this puipose.

24 F'.9, '* '((X8'"1 D%<:.$%,. CNEE paiticipants saiu that off-ioau vehicles aie a
significant souice of aii pollution. Bowevei, iecent iegulations - foi example
iequiiements that tiactois have uiesel paiticulate filteis anu opeiate on low-sulfui fuel -
aie auuiessing the pioblem, at least in pait. Continue evaluating the off-ioau vehicle
sectoi foi uniesolveu pollution pioblems that can be auuiesseu with AFs anu woik with
manufactuieis to piomote the use of clean alteinative fuels.
%+

?%="8+3%*+ '( ?%(%*,%

1. )<"82% "<%"1 '* ASC), ('8 -FR,. Woik with B0E to quantify the cost savings possible
with gieatei use of AFs anu AFvs on militaiy bases, in militaiy equipment anu in the
fielu, anu use ESPCs to finance puichase of the fuels anu vehicles. Exploie whethei thiiu-
paity financing also can be useu to funu AF iefueling infiastiuctuie.

2. !%,+ "*1 +8"*,(%8 O\O 8%19.+:'* 3%",98%,. As the militaiy gains expeiience in using
AFs in on-ioau anu off-ioau vehicles, in aiiciaft anu in ships, woik with EPA anu B0E to
tiansfei lessons leaineu to states, localities anu inuustiies. 0ne example involves global
shipping, which accounts foi 1.S% of global gieenhouse gas emissions fiom human
Poweiing Foiwaiu
148
souices, an amount expecteu to uouble by 2uSu if the maiitime inuustiy continues
business as usual. The Navy is using SuSu blenus of biofuels anu petioleum to powei its
"uieat uieen Fleet." The Navy shoulu look foi oppoitunities to tiansfei its biofuel
lessons to commeicial shipping, as well as infoimation about impioving the fuel
efficiency anu opeiational piactices of ships.

S. S%+ +"82%+, "*1 .$%"* (9%$ =8%(%8%*.%, :* +<% *%[+ V4S4 !8"*,='8+"+:'* )'33"*1
bVS!H-NS)Ìc ,'$:.:+"+:'*. The 0STRANSC0N solicitation foi woiluwiue expiess
ueliveiies is expecteu to be the laigest package ueliveiy contiact evei awaiueu by the
feueial goveinment, with a potential value of $2.S billion ovei five yeais. The
0STRANSC0N's Acquisition Biiectoiate shoulu establish a piefeience foi venuoi fuel
efficiency anu emission impiovements, iequiie annual iepoiting on enviionmental anu
fuel measuies, anu monetize the social costs of key enviionmental factois so they can be
incluueu in the agency's evaluation of best value fiom venuois.
&,

O%*%8"$ S%8D:.%, -13:*:,+8"+:'*

1. P9:$1 "2%*.B "0"8%*%,, '( +<% .',+, '( ."8#'*. In collaboiation with EPA, conuuct
tiaining foi all feueial agencies anu piocuiement officeis on the social of caibon in the
eneigy consumption of builuings anu vehicles, anu the imbeuueu caibon in consumei
piouucts useu by the Feueial uoveinment.

24 V,% (9$$X.',+ "..'9*+:*2. In line with the Ciosscutting Recommenuation at the
beginning of this papei, ieview the guiuance anu policies uSA communicates to feueial
agencies iegaiuing the piocuiement of vehicles anu fuels. Impiove the guiuance to
incluue full-cost as well as life-cycle accounting. Woik with CEQ to ensuie that uSA
guiuance anu costing methouology incluues the best available infoimation foi assessing
enviionmental, eneigy secuiity anu economic costs. In auuition, extenu full-cost life
cycle accounting to the evaluation of contiacts foi thiiu-paity tianspoitation seivice
pioviueis anu iequiie that they use of AFs anu AFvs.
&"

S. O8%%* +<% +8"*,='8+"+:'* ,9==$B .<":*. Woik with FENP to assess the vehicle
piocuiement piactices of feueial agencies to ueteimine whethei they aie fully utilizing
ESPCs anu, if not, what the baiiieis aie. In auuition, evaluate whethei agencies aie using
waiveis to avoiu iequiiements ielateu to sustainability stanuaius foi piocuiing fuels
anu vehicles. Repoit the iesults of both assessments to the Piesiuent.

4. 7*.'8='8"+% (9%$ (".+'8, :* =8'.98%3%*+,4 Incluue the following auuitional
iequiiements in iequests foi pioposals fiom anu contiacts with thiiu-paity
tianspoitation pioviueis:

a) Paiticipation in EPA's SmaitWay Tianspoit Paitneiship.

b) Pioviuing infoimation to uSA that will allow it to iate contiactois on theii piactices
foi monitoiing anu impioving enviionmental peifoimance.
Poweiing Foiwaiu
149
c) Pioviuing infoimation that will allow uSA to assess contiactois on theii ability to
tiack anu iepoit metiics such as fleet-wiue uBu intensity; ienewable fuel use; ciiteiia
aii emissions; fuel efficiency; anu othei factois uSA ueems impoitant to caiiying out
the goveinment's eneigy efficiency, alteinative fuel anu gieenhouse gas ieuuction
goals. Stiongly encouiage contiactois to pioviue iecent benchmaiks in each of the
peifoimance categoiies, along with annual taigets foi impiovement.

u) Noie specifically, implement the iecommenuation of the Ameiican Clean Skies
Founuation that uSA's contiact foi giounu-shipping of small packages incluue a
piefeience foi cleanei tianspoitation seivices, incluuing taigets foi ieuucing
emissions, cutting petioleum use anu incieasing the use of non-petioleum alteinative
fuels.
42

?%="8+3%*+ '( -28:.9$+98%

54 )'*(8'*+ +<% (''1 D,4 (9%$ 1%#"+%4 Even with the commeicialization of cellulosic
ethanol, it's likely that Ameiica's faimeis will ueuicate cioplanu to giowing eneigy
feeustocks. Consequently, cellulosic fuels may not enu the "foou vs. fuel" uebate - a
uebate encouiageu by oiganizations such as the Ameiican Petioleum Institute. In
auuition to monitoiing the ielationship between eneigy feeustocks, foou giain
piouuction anu foou piices, 0SBA anu the Agiicultuial Extension Seivice shoulu
continue pioviuing ieseaich, uemonstiation anu euucation to faimeis on the following:

a) Bow faimeis can best allocate theii lanus foi eneigy feeustock anu foou piouuction
on cioplanus.

b) Bow to maximize faim income potential fiom feeustock piouuction while ieuucing
the use of petioleum fuels anu feitilizeis, piotecting fiesh watei iesouices,
impioving soil feitility, anu avoiuing monocultuie.

73=$%3%*+"+:'* S%Y9%*.%

The iecommenuations in this papei aie baseu on the piemise that the Piesiuent is willing
to use his leaueiship tools to uefine anu veiy cleaily communicate the nation's eneigy
goals, to uesciibe theii benefits to the Ameiican people, anu to peiiouically iepoit piogiess.

The iecommenuations also aie baseu on the piemise that the Piesiuent anu his
Auministiation suppoit a holistic analysis of the nation's eneigy options - in this case foi
alteinative fuels anu vehicles - to give faii anu objective consiueiation "all of the above" in
oiuei to iuentify the "best of the above."

Finally, the iecommenuations assume that the Auministiation is willing to iewaiu the
eneigy options that best meet the Piesiuent's climate anu eneigy goals anu to sustain that
suppoit as clean technologies anu iesouices achieve scale, anu that it suppoits sufficient
agility in feueial iesouice allocations to shift incentives as we leain by uoing.
Poweiing Foiwaiu
1Su

Baseu on those assumptions, CNEE suggests that the Auministiation "sequence" feueial
suppoit foi inuiviuual AFs anu AFvs to make most effective use of iesouices in the
following ways:

N%"8 !%83 bEL5Gc

Establish cleai peifoimance-baseu goals anu ciiteiia anu make cleai that an objective
ieview of lifecycle costs anu benefits will ueteimine which technologies anu eneigy
iesouices best meet the ciiteiia anu meiit feueial suppoit. The ciiteiia might incluue:

o Lifecycle emissions of gieenhouse gases anu ciiteiia pollutants that aie substantially
lowei than petioleum.

o Scalabilitythe ability to achieve meaningful maiket penetiation anu benefits to meiit
feueial attention.

o Economic competitiveness so that eneigy iesouices anu technologies uo not iequiie
extenueu public subsiues to compete in the maiketplace.

o Bomestic piouuction that ieuuces 0.S. uepenuence on impoiteu eneigy.

o Positive eneigy ietuin on investment in which a technology oi iesouice pioviues
significantly moie eneigy than its piouuction consumes.

o Long-teim sustainability, wheie piouuction of the fuel oi vehicle uoes not uepenu on
unceitain supplies of unsustainable oi finite iesouices such as iaie eaith metals.

o Ninimum oi no collateial uamage. The fuel oi vehicle uoes not uegiaue oi ueplete othei
iesouices ciitical to the long-teim health of the 0niteu States, such as soil feitility,
watei quality anu supplies, healthy foiests, aii quality, anu climate stability.

I:1 !%83 bA"8$B EL5Mc

o Announce the Piesiuent's goals anu ciiteiia foi alteinative fuels anu vehicles in his
buuget submission to Congiess anu the State of the 0nion auuiess.

o Piopose the iesouices necessaiy to achieve the Piesiuent's objectives in the next
buuget cycle, justifieu by objective life-cycle analysis that iuentifies: a) the fuel anu
vehicle options that offei gieatest ietuin on investment anu potential foi successful
commeicialization, b) wheie they aie on the scale-up lauuei, anu c) wheie gaps exist
that can be meaningfully affecteu by Feueial uoveinment suppoit. Incluue the cost of
infiastiuctuie in this analysis.

Poweiing Foiwaiu
1S1
W'*2%8 !%83 bW"+% EL5Mc

o Tiack the pace of piogiess foi AFs anu AFvs anu take piogiess into account in funuing
anu piogiam uecisions. Allocate anu shift iesouices as necessaiy to achieve gieatest
piogiess in meeting national objectives.

o When fuels oi vehicles that showeu initial piomise plateau befoie making it to full scale
anu economic competitiveness, scale them back to R&B oi uiscontinue public suppoit.

o Continue assisting the fuels anu vehicle technologies that make stiong heauway, anu
focus feueial assistance on moving them to the next stage of scale-up. Take into account
that scale-up is typically least expensive in the R&B phase, becomes moie expensive as
a technology scales. anu is most expensive when it ieaches ueployment stage. Feueial
suppoit shoulu "stage gate" - in othei woius, focus on the appiopiiate stage of a
technology's piogiess to ensuie that public iesouices aie spent most effectively.

P"./28'9*1 7*('83"+:'* '* -$+%8*"+:D% F9%$, Z
R%<:.$%,

Q<"+ "8% "$+%8*"+:D% (9%$,T

The nuances in uefining "alteinative fuels" often aie not iecognizeu among policy makeis
oi in public uiscouise. Yet, these nuances aie ciitical foi cieating auvantageous anu
intelligent public policy in iegaiu to the tianspoitation sectoi.

Theie aie seveial classes of alteinative tianspoitation fuels, with veiy uiffeient
chaiacteiistics, costs anu benefits. Foi example, if the objective is to ieuuce Ameiica's
uepenuence on petioleum, alteinative fuels aie any that aie not ueiiveu fiom oil, even if
they come fiom finite anu caibon-intensive iesouices. Liquiu fuels fiom coal aie an
example.

If the objective is to ieuuce the iisks of global climate change, "alteinative fuels" aie those
that piouuce fewei gieenhouse gas emissions than conventional petioleum fuels. Natuial
gas is an example. Even though it is a finite iesouice anu piouuceu in close association with
oil, natuial gas is an alteinative fuel because it emits fewei pollutants than othei fossil
fuels.

If the objective is to inciease the long-teim stability of Ameiica's fuel supplies, then we
neeu "ienewable fuels" -- those piouuceu fiom self-ieplenishing anu inexhaustible
iesouices such as plants, sunlight, watei anu winu.

If oui objective is tianspoitation fuels that aie not only inexhaustible but that also
maximize economic, social anu enviionmental impacts, then we want "sustainable fuels".
Although biofuels aie ienewable, foi example, they aie only sustainable if they aie
Poweiing Foiwaiu
1S2
piouuceu in ways that piotect watei iesouices, soil feitility anu climate stability. Biofuels
uon't qualify if they aie giown with lots of caibon-intensive anu finite fuels, watei
consumption anu monocultuie faiming. While electiic anu hyuiogen poweieu vehicles
piouuce no pollution as they opeiate, neithei qualifies as a sustainable iesouice when it's
piouuceu with finite anu caibon-iich iesouices -- foi example, electiicity fiom coal-fiieu
powei plants.

Thioughout this white papei, CNEE emphasizes the impoitance of guiuing national eneigy
policy with full-cost life-cycle accounting to ueteimine which iesouices offei the highest
tiue value foi national secuiity, economic stability anu enviionmental health, anu theiefoie
shoulu be the nation's highest piioiities foi poweiing tianspoitation. Full "ciaule to giave"
analysis ieveals that "alteinative", "ienewable" anu "sustainable" aie not synonymous in
the eneigy policy woilu. Not all alteinative fuels aie ienewable, anu not all alteinative oi
ienewable fuels aie sustainable. While this CNEE white papei auuiesses a vaiiety of non-
petioleum fuels, the objective anu compiehensive analyses beyonu the scope of the papei
woulu ieveal that in the fuel hieiaichy, public policy geneially shoulu put sustainable fuels
fiist, followeu by ienewable fuels, then by the bioauei family of alteinative fuels.

Q<"+ "8% "$+%8*"+:D% (9%$ D%<:.$%,T

The CNEE uialogue focuseu on seveial types of alteinatively fueleu vehicles. They geneially
fall into one of thiee categoiies:
1. ?%1:."+%1 D%<:.$%, iun exclusively on an alteinative fuel. Natuial gas vehicles (Nuvs),
anu plug-in electiic vehicles (PEvs) aie examples.

2. ?9"$X(9%$_ ($%[X(9%$ "*1 #:X(9%$ D%<:.$%,: Flexible fuel (flex-fuel) vehicles geneially aie
capable of using an alteinative fuel anu a tiauitional petioleum fuel. Foi example,
ethanol flex-fuel vehicles aie equippeu with inteinal combustion engines capable of
opeiating on gasoline, an E8S ethanol-gasoline blenu oi a mixtuie of the two. Bi-fuel
vehicles typically have two sepaiate fueling systems that enable them to iun on eithei
natuial gas oi gasoline. Bual fuel vehicles, tiauitionally useu in heavy-uuty vehicles,
have fuel systems that iun on natuial gas but use uiesel fuel to help with ignition.

S. \B#8:1 D%<:.$%, use both hyuiocaibon anu electiic eneigy with onboaiu batteiy
stoiage. They typically use batteiies to powei an electiic motoi anu a tiauitional fuel to
powei an inteinal combustion engine. Bybiiu electiic vehicles (BEvs) iechaige by
captuiing eneigy piouuceu when the vehicle biakes oi coasts. Plug-in hybiius (PBEvs)
chaige theii batteiies as BEvs uo, but also by plugging the vehicle into an electiic
powei souice.

Q<"+@, '* +<% 8'"1 +'1"BT

Accoiuing to the Bepaitment of Eneigy's Alteinative Fuels Bata Centei (AFBC), theie aie
16,u82 public anu piivate AF fueling locations in 0niteu States. They incluue 8,SS2
iechaiging sites foi electiic vehicles
&%
(Evs); 2,6S9 fueling stations foi E-8S vehicles; 1,26S
Poweiing Foiwaiu
1SS
foi compiesseu natuial gas (CNu); 7S7 foi biouiesel; 81 foi liquefieu natuial gas (LNu);
anu SS foi hyuiogen.
&&
Seveial aieas of the countiy have pioposeu oi aie exploiing
alteinative fuel coiiiuois, also known as "clean vehicle coiiiuois", to ieuuce iange anxiety
- an AFv uiivei's feai that he oi she won't be able to finu a iefueling station.

The AFBC iepoits theie weie neaily 94u,uuu AFvs in use in the 0niteu State in 2u1u, the
most iecent yeai foi which it has uata. The numbei of AFvs incieaseu steauily fiom 199S to
2u1u laigely because of feueial incentives foi the manufactuie, sale anu use of the
vehicles.
&'
The total in 2u1u incluueu moie than 618,uuu flex-fuel vehicles, moie than
14S,uuu piopane vehicles, neaily 116,uuu CNu vehicles, neaily S7,Suu Evs, S,SSu LNu
vehicles anu 421 vehicles poweieu by hyuiogen.
&(

Q<"+ "8% +<% 3',+ =8'3:*%*+ "$+%8*"+:D% (9%$, "*1 D%<:.$%,T

Among the most piominent non-petioleum fuels anu vehicles available oi unuei
uevelopment touay aie biofuels, biouiesel, ienewable natuial gas, ienewable methanol,
electiicity anu hyuiogen, each uesciibeu below.

N"+98"$ O", R%<:.$%, bNOR,c

Nuvs have pioven themselves to be ieliable anu natuial gas supplies aie expecteu to
iemain iobust. Because natuial gas has the lowest caibon content of the fossil fuels, many
expeits iegaiu it as a tiansition fuel to moie sustainable fuels anu feeustocks. Bowevei,
although its combustion piouuces ielatively low caibon emissions compaieu to othei fossil
fuels, natuial gas is composeu mostly of methane, one of the most potent of the gieenhouse
gases. Nuch like othei alteinative fuel stiategies that uepenu upon natuial gas as a powei
souice (i.e., Evs, fuel cells, biofuels), the climate benefits ueiiveu fiom Nuvs uepenu upon
pieventing leaks in the natuial gas system, fiom the point of piouuction to the point of
consumption.
&)

Natuial gas fuels most often aie useu in the foim of eithei compiesseu natuial gas (CNu) oi
liquefieu natuial gas (LNu). Both can have significant fuel cost auvantages ovei gasoline
anu uiesel fuel. Assuming that methane leaks aie contiolleu, they can have significant
climate auvantages, too. Nuvs have been founu to piouuce up to 29% fewei uBu emissions
anu fewei othei pollutants than gasoline vehicles. When Nuvs aie poweieu by RNu in the
foim of CNu oi LNu, these vehicles can potentially hit the nation's anu Califoinia's 2uSu
caibon emission taigets touay at a competitive uiscount to petioleum fuels.

0thei viable liquiu fuels fiom natuial gas aie methanol anu uimethyl ethei (BNE). Two
membeis of the 0niteu States Eneigy Secuiity Council - foimei Pennsylvania uov. Tom
Riuge anu foimei Secietaiy of Tianspoitation Naiy Peteis - aie among those who believe
that methanol shoulu be anothei ieauily available fuel option in the 0niteu States. A stuuy
sponsoieu anu publisheu by the Nassachusetts Institute of Technology (NIT) in 2u11
concluueu, "Conveision of natuial gas to methanol, as wiuely piacticeu in the chemicals
inuustiy, coulu pioviue a cost-effective ioute to manufactuiing an alteinative, oi
Poweiing Foiwaiu
1S4
supplement, to gasoline, while keeping C02 emissions at ioughly the same level." uasoline
engines can be mouifieu to iun on methanol. It can be blenueu with gasoline up to 8S% (N-
8S), useu as a low-blenu gasoline oxygenate, useu to piouuce hyuiogen foi fuel cells, oi
useu in uiiect methanol fuel cells.

Inteiest in methanol as a tianspoitation fuel was stimulateu in Califoinia by its uesiie to
ieuuce tailpipe emissions fiom automobiles. A limiteu netwoik of vehicles anu N-8S
fueling stations weie intiouuceu theie in the late 198us oi eaily 199us. With the
emeigence of cleanei buining gasoline, howevei, methanol no longei hau a big auvantage
in ieuucing emissions, anu Califoinia uiu not expanu its methanol netwoik. Inteiest in
moving away fiom oil combineu with the abunuance of natuial gas has put methanol back
on the menu of alteinative fuels.

BNE is a liquiu fuel with a high octane numbei, giving it peifoimance qualities anu
efficiencies similai to uiesel. Bowevei, BNE uoes not piouuce soot, eliminating the neeu foi
filteis in vehicles. It is most suiteu foi fueling heavy-uuty tiucks. It is stoieu anu hanuleu
much like piopane at much lowei piessuies than CNu anu uoes not iequiie the
iefiigeiation that LNu uoes. To take auvantage of the piopeities of BNE, two majoi
manufactuieis of heavy-uuty tiucks - Nack anu volvo have announceu that they will
piouuce a limiteu numbei of BNE tiucks in Noith Ameiica in 2u1S.

0veiall, B0E calls Nuvs a "goou choice foi high-mileage fleets- such as buses, iefuse tiucks
anu taxis that aie centially fueleu oi opeiateu iegionally. These vehicles can have shoit
payback peiious because of theii high annual mileage anu the piice auvantage of CNu anu
LNu ovei gasoline anu uiesel. This explains why ioughly 6u% of new iefuse tiuck
puichases in 2u1S weie poweieu by CNu.

While impiovements in efficiency aie ieuucing aii emissions fiom conventional vehicles
that buin conventional fuels, Nuvs have seveial othei auvantages. Ample supplies aie
keeping the piice of natuial gas low; piices aie set uomestically iathei than by a global
maiket as is the case with petioleum; anu the fuels ieuuce foieign oil impoits. Compaieu to
theii uiesel counteipaits, Nuvs ieuuce emissions of N0x anu paiticulates. Anu when
methane leaks aie contiolleu, the natuial gas piouuction anu supply chain geneially
piouuces fewei gieenhouse gases than the petioleum supply chain.
&*

In iegaiu to baiiieis, iefueling sites foi Nuvs like most alteinative fuels have limitations.
Bowevei, since 2uu8, ioughly 9u competitois in the Nuv space have emeigeu anu seveial
of these fiims have pioposeu national netwoiks of LNu anu CNu stations that aie cuiiently
being built. Fleets wanting to use the fuel often have to constiuct theii own infiastiuctuie,
but anu theie aie fiims that aie willing to finance constiuction foi customeis who can
commit to ceitain volume iequiiements. In auuition, high vehicle acquisition costs anu the
high cost of quick-fill iefueling equipment can piesent a baiiiei to moie extensive
ueployment of this fuel but theie aie numeious piogiams acioss the countiy that offei
vehicle incentive buy uowns anu piivate companies aie also offeiing financing.
&+

Poweiing Foiwaiu
1SS
Theie aie some auuitional constiaints on fueling light-uuty vehicles with natuial gas.
Cuiient iefueling equipment typically allows methane to escape uuiing the iefueling
piocess. Accoiuing to the AFBC, although vehicles can be conveiteu to iun on natuial gas,
only two mouels of ueuicateu light-uuty Nuvs aie cuiiently available fiom majoi oiiginal
equipment manufactuieis. In auuition, mainly because of CNu stoiage tanks, light-uuty
Nuvs cuiiently cost significantly moie than conventional vehicles, although theii cost
iepoiteuly is coming uown.

Expeits in the fielu have tolu CNEE that at cuiient piices natuial gas is a competitive choice
foi long-haul, local ueliveiy, iefuse, public tiansit, shuttle seivices, anu taxi applications
when auequate iefueling sites aie available, but aie moie challengeu foi consumei vehicle
applications. Nuvs aie not necessaiily moie eneigy-efficient (although BEv oi PEv
platfoims coulu help to change this); theii cuiient auvantage is piimaiily cheapei
opeiations uue to the abunuance of natuial gas, eneigy secuiity as natuial gas is a uomestic
fuel, anu lowei ciiteiia anu caibon emissions as natuial gas is a cleanei anu lowei caibon
fuel. Some expeits aigue that in the long teim anu fiom a climate-change peispective, the
best use of Ameiica's natuial gas iesouice is to geneiate electiicity. Bowevei, the Nuv
inuustiy's willingness to invest in engine auvancements anu ienewable foims of natuial
gas may make Nuvs veiy competitive with electiic anu fuel cell stiategies. Auuitionally,
because of ample supplies anu low piices, natuial gas is a choice foi both tianspoitation
anu electiic powei piouuction.

O%*%8"$ P:'(9%$,

Biofuels aie ueiiveu fiom plant mattei such as tiees, giasses, agiicultuial iesiuue, algae,
anu othei biological mateiials. Bemanu in the 0niteu States is uiiven laigely by the
H%*%0"#$% F9%$, S+"*1"81 (RFS), the nation's fiist ienewable fuel volume manuate,
establisheu by the Eneigy Policy Act of 2uuS. The cuiient RFS iequiies that by 2u22, S6
billion gallons of ienewable fuel must be useu each yeai in the 0niteu States. It iequiies
that a ceitain peicentage of the ienewable fuel blenueu into tianspoitation fuels must be
conventional biofuels, cellulosic biofuels, biomass-baseu uiesel oi auvanceu biofuels.
',

The RFS uefines each of these fuels as follows: conventional biofuels piouuceu by plants
built aftei 2uu7 must have 2u% lowei lifecycle caibon content than conventional fuels;
biomass-baseu uiesel fuels aie those with Su% lowei caibon content that conventional
fuels; cellulosic biofuels have 6u% lowei caibon content; anu othei auvanceu biofuels
piouuce Su% less caibon than conventional fuels.

0utsiue the RFS, biofuels aie often assigneu to two bioau categoiies. Fiist-geneiation
biofuels such as conventional ethanol aie piouuceu mostly fiom coin in the 0niteu States.
Seconu geneiation biofuels, incluuing auvanceu biofuels anu cellulosic biofuels, aie
typically piouuceu fiom non-foou feeustocks incluuing switch-giass, ciop wastes, woou,
seeu oils, anu animal fats. Seconu geneiation fuels aie the piincipal goal of biofuels
ieseaich touay, but only small amounts aie commeicially available. Auvanceu anu
cellulosic biofuels can be in the foim of ethanol oi othei piouucts such as butanol anu oils
Poweiing Foiwaiu
1S6
that can be iefineu uiiectly into gasoline, uiesel, oi jet fuel.

The piouuction anu use of biofuels aie suppoiteu by seveial feueial anu state goveinment
incentives. Feueial incentives incluue the Seconu ueneiation Biofuel Piouucei tax cieuit;
the Alteinative Fuel Infiastiuctuie tax cieuit; the Alteinative Fuel anu Alteinative Fuel
Nixtuie Tax Cieuits, anu the Biouiesel anu Renewable Biesel Fuel Cieuit. B0E anu the
0SBA offei loans, giants anu loan guaiantees foi activities ianging fiom R&B to biouiesel
euucation foi public anu piivate fleet opeiatois. State incentives incluue the Califoinia Low
Caibon Fuel Stanuaiu.

F:8,+ O%*%8"+:'* P:'(9%$,: "Fiist geneiation" biofuels aie those that can be piouuceu fiom
cuiient feeustocks anu piocessing methous. Biofuel feeustocks iange fiom lipius (foi
example, soybeans anu oil plants) to staiches anu sugais (foi example, coin anu
sugaicane).

Coin ethanol blenueu with gasoline is the most common of biofuels useu in 0.S. vehicles
touay. Accoiuing to the Eneigy Infoimation Auministiation, 1S.S billion gallons of ethanol
weie piouuceu in the 0niteu States in 2u12, anu 12.9S billion gallons weie consumeu.
Theie aie moie than 1u million E-8S flex-fuel vehicles on 0.S. ioaus touay, although most
owneis uon't iealize they own them anu continue using petioleum fuels.

Ciitics aigue that piouucing coin as an ethanol feeustock competes with foou piouuction
anu can cieate upwaiu piessuie on global foou costs, leauing to inuiiect lanu use change;
anu that the intensive use of nitiogen feitilizeis in agiicultuie iesults in emissions of
nitious oxiue (N20), a potent uBu, anu causes watei pollution pioblems. Petioleum anu
feitilizei inputs to coin piouuction anu piocessing anu inuiiect lanu use change can ieuuce
oi ieveise the uBu ieuuction benefit of coin ethanol anu othei foou-baseu biofuels.

Suppoiteis aigue that faim coin yielus have incieaseu lineaily at a iate equivalent to 1.S%
annual giowth ovei the past 2u yeais, a tienu that continues touay to help avoiu a
ieuuction in coin available foi foou. Bowevei, coin yielus have incieaseu lineaily since the
194us anu the iecent yielu impiovements cannot be cleaily attiibuteu to biofuel
piouuction. Nonetheless, it is cleai that without biofuel piouuction moie coin woulu be
available on the foou maiket.

In iegaiu to net eneigy, ethanol suppoiteis say that coin ethanol plants have ieuuceu unit
eneigy use by thiee times ovei the past Su yeais. Still, even with the impiovements to uate
anu fuithei pieuicteu efficiency gains to 2u22, EPA finus that coin ethanol will only uelivei
mouest caibon savings of 2u% uBu by 2u22.

Anothei issue involves the nation's ability to meet RFS taigets foi biofuels. Eaily in 2u1S,
EPA acknowleugeu, "constiaints in the maiket's ability to consume ienewable fuels at the
volumes specifieu" by the RFS. 0ne factoi is the "blenu wall", which iefeis to a peiceiveu
maximum blenu of ethanol in gasoline at 1u%. Since gasoline consumption is expecteu to
iemain stable oi slowly uecline ovei the next uecaue uue to incieaseu vehicle efficiency, the
blenu wall coulu limit the uemanu foi E-1u ethanol at the same time ethanol piouuction
Poweiing Foiwaiu
1S7
incieases. As one solution, EPA has iuleu that ethanol blenus of E-1S can be useu in cais
newei than yeai 2uuu, but E-1S fueling stations aie limiteu to a few Niuwestein states.

-1D"*.%1 P:'(9%$,: As mentioneu eailiei, the RFS uefines auvanceu biofuels as high-
peifoiming sustainable tianspoitation fuels that ieuuce life cycle gieenhouse gas
emissions by at least Su% compaieu to conventional gasoline. With the auvanceu
piouuction pathways being exploieu touay, some auvanceu biofuels coulu be engineeieu to
go stiaight into existing pipelines, iefineiies anu planes, tiains anu automobiles. These aie
calleu "uiop-in" fuels because they can be "uioppeu in" the existing infiastiuctuie without
mouifications.

Foi the puiposes of this papei, auvanceu biofuels aie uefineu as a suite of hyuiocaibon,
gasoline anu oil substitutes cieateu fiom bio-eneigy feeustocks using auvanceu
technologies that neeu fuithei ieseaich anu suppoit to achieve commeicialization.
Auvanceu biofuels aie often calleu "seconu geneiation biofuels".
'"
Auvanceu feeustocks
fiom biomass mateiials incluue algae anu lignocellulose (ciop iesiuues, foiest waste,
municipal waste anu some eneigy ciops). Numeious pathways exist to piouuce these
mateiials, incluuing chemical (tianseteiification, hyuiotieating); biological (feimentation,
enzymatic hyuiolysis, synthetic biology); anu theimochemical (pyiolysis, gasification)
piocesses.

In auuition to ieuucing uBus, seveial auvanceu biofuels ieuuce emissions of othei aii
pollutants such as sulfui, N0x, anu caibon monoxiue (C0). Inuustiy leaueis iepoit that
many auvanceu biofuel piouuceis aie looking to high value maikets such as chemicals to
help giow theii businesses as they scale up. A baiiel of oil piouuces a iange of piouucts
incluuing feeustocks foi plastics, synthetic fibeis, ueteigents, cosmetics, paints, pesticiues,
feitilizeis, anu electionics. Some uiop-in biofuel pathways may be able to piouuce
feeustocks foi these piouucts, too.

0ne issue iaiseu by CNEE uiscussants involveu the piouuction of biofuels fiom non-
biomass mateiials. Some companies aie ueveloping anu ueploying technologies to utilize
inuustiial waste gases such as caibon uioxiue (C02) anu C0 as the feeustocks to geneiate a
wiue iange of tianspoitation fuels. At piesent, some of these waste gases aie not incluueu
as feeustocks unuei the RFS.

)%$$9$',:. %+<"*'$: Reseaicheis at ANL have founu that cellulosic fuels can ieuuce
gieenhouse gas emissions 8S% compaieu to iefoimatteu gasoline - much gieatei emission
ieuuctions that those piouuceu by coin ethanol. 0nfoitunately, cost-effective piouuction
has not ieacheu the stage wheie cellulosic fuels aie commeicially competitive oi wiuely
available. Reseaicheis at ueoige Washington 0niveisity have concluueu, "In the shoit teim,
|cellulosicj ethanol cannot meet the eneigy secuiity anu enviionmental goals of a gasoline
alteinative, because of scale up anu cost uifficulties of cellulosic ethanol plants."
'$
EPA has
announceu that it anticipates aujusting the RFS volume iequiiements foi 2u14 to ieflect
cuiient constiaints on cellulosic biofuel piouuction

Poweiing Foiwaiu
1S8
-$2"%X#",%1 #:'(9%$, b-PPc: These aie a foim of auvanceu biofuels that aie emeiging as a
piomising souice of tianspoitation eneigy. The fuel's tiaue gioup, the Algae Biomass
0iganization has set the goal of piice paiity with petioleum at 2u17 oi 2u18.

In Septembei 2u1S, the 0niveisity of viiginia, the Sciipps Institute of 0ceanogiaphy at the
0niveisity of San Biego, Emboii uioup LLC anu Sapphiie Eneigy issueu a stuuy assessing
the lifecycle chaiacteiistics of algae giown in open ponus foi use as a tianspoitation fuel.
The stuuy founu that algae biofuels have the potential foi competitive eneigy ietuins on
investment anu a substantial ieuuction in uBu emissions.

ABB has been enuoiseu by the ESLC because the fuel "coulu offei aviation anu tiucking
applications with many of the benefits of petioleum fuels - ease of tianspoit, access to
existing infiastiuctuie anu high eneigy uensity - while eliminating some of the ciitical
uiawbacks of oil combustion."

Sapphiie Eneigy - a San Biego baseu ABB company - uesciibes algae-baseu fuel as "gieen
ciuue," a ienewable fuel in which sunlight, algae anu caibon uioxiue piouuce an oil that can
be iefineu into gasoline, uiesel fuel anu jet fuel using the same piocess that piouuces
tiauitional ciuue. Among algae's appeal is its shoit giowing cycle; the fact that it uoes not
iequiie potable watei; anu the potential foi some ABBs to be uiop-in fuels. ABB nutiients
can be iecycleu; its lanu iequiiement is ielatively small because of its high pei acie yielu;
anu it can be giown on lanu anu in locations unsuitable foi agiicultuie. Because algae
utilize C02 as they giow, piouuction facilities can be co-locateu neai fossil-fueleu powei
plants in a symbiotic ielationship. Aftei examining vaiious algae piouuction pathways, ANL
concluueu that the fuel's uBu footpiint is at least Su% smallei than conventional uiesel -
the minimum uBu ieuuction iequiieu foi an auvanceu biofuel unuei cuiient law. 0thei
expeits claiify that not all piouuction pathways will necessaiily achieve uBu emission
ieuuctions of that size.

ABB also can be scaleu to eneigy inuustiy piopoitions.
'%
Pacific Noithwest Laboiatoiies
(PNNL) iecently publisheu a stuuy on the scalability of algae technology in the 0.S. The lab
founu that foi algae piouuction using saline aquifeis, it is possible to piouuce neaily two
times the cuiient law's taiget oi ~S2 billion gallons, enough to offset 7u% of 0.S. uiesel
consumption.

At piesent, the costs of some auvanceu biofuel technologies aie too high to be
competitive.
'&
Among the baiiieis to commeicialization: Because most auvanceu biofuel
options aie not spiinging fiom alieauy well-establisheu majoi inuustiies, they uepenu
piimaiily on ventuie funuing. Scale-up fiom laboiatoiy to uemonstiation to commeicial
plants is technically challenging anu iequiies moie time anu funuing than typical ventuie
investois aie accustomeu to. Alteinative financing foi fiist-of-a-kinu facilities is haiu to
come by.

In auuition, auvanceu biofuel feeustocks anu technologies iequiie an intensive iegulatoiy
peimitting piocess that is not establisheu with totally new souices of fuel in minu. The
Poweiing Foiwaiu
1S9
cuiient policy stiuctuie of incentives such as tax cieuits is helpful but uoes not pioviue
investois enough stability anu ceitainty, in pait because new eneigy concepts uo not
ieceive the favoiable tax anu iegulatoiy tieatments given to the oil, gas anu conventional
ethanol inuustiies.

Foi a moie uetaileu uiscussion of the benefits anu costs of ABB, see the stuuy issueu in
Apiil 2u1S by the Congiessional Reseaich Seivice.

P:'1:%,%$

Some 128 million gallons of biouiesel fuel weie piouuceu in the 0niteu States in }uly 2u1S
alone. The 111 biouiesel plants in the 0niteu States - 64% of them in the Niuwest
iepoiteuly aie capable of piouucing 2.1 billion gallons a yeai. Biouiesel can be useu alone
(B-1uu) with engine mouifications oi blenueu up to 2u% with petioleum. The most
common feeustocks aie soybean oil, coin oil, yellow giease anu tallow. Biouiesel fiom
soybeans can yielu significant uBu ieuuctions on a life-cycle basis accoiuing to the latest
RFS (RFS2), although othei analyses have iepoiteu soybean biouiesel to have a highei
lifecycle uBu intensity than petioleum laigely uue to high emissions attiibuteu to inuiiect
lanu use changes.

Reseaicheis iepoit that to avoiu engine weai, ueposit anu clogging, vehicles must use high-
quality biouiesel fuels. 0thei issues incluue its eneigy content, blenuing limitations, colu
weathei peifoimance, eneigy ietuin iatio, long teim ability to compete without subsiuies,
foou foi fuel tiaueoffs, anu the fiesh watei uemanus of piouuction. Lanu use change is a
contioveisial issue iegaiuing the climate benefits of biouiesel. In the 0niteu States, the RFS
analysis shows that lanu use change caibon emissions fiom soybean-baseu biouiesel aie
small. Bowevei, the analysis behinu Califoinia's low caibon fuel stanuaiu shows only slight
uBu savings with soybean biouiesel.

H%*%0"#$% N"+98"$ O", bHNOc

Renewable Natuial uas, also known as RNu oi biomethane, is an ultia-low caibon
tianspoitation fuel anu ienewable eneigy iesouice that is changing oui nation's eneigy
lanuscape. Biomethane auvocates say that auvances in anaeiobic uigestion technologies
anu consiueiable investment by eneigy anu waste companies means that oui nation's tiash
can powei oui 21st centuiy economy. By conveiting oiganic waste into a non-fossil fuel,
natuial gas equivalent, RNu pioviues CNu anu LNu options at a 9u% gieenhouse gas
ieuuction compaieu to gasoline anu uiesel, accoiuing to the Califoinia Aii Resouices
Boaiu.
SS

RNu is a uomestic iesouice. Feeustocks aie abunuant. Resiuential anu commeicial foou
waste, soliu waste fiom faiming, inuustiy anu at lanufills thioughout the countiy aie being
uevelopeu touay at an histoiic pace. Still, only a small peicentage of available iesouices
have been uevelopeu into RNu.

Poweiing Foiwaiu
16u
Accoiuing to the 0.S. EPA's Lanufill Nethane 0utieach Piogiam (LN0P), theie aie 621
opeiational lanufill-to-eneigy piojects in the 0.S. iepiesenting 1,978 NW anu SS1
mmscfu.
S6
To uate, only S8 of these piojects (6.2%) have been uevelopeu to piouuce RNu.
Auuitionally, theie aie 4Su canuiuate lanufills iuentifieu by LN0P, iepiesenting 8Su NW,
47u mmscfu, anu S6 NNT C02e pei yeai that have not been uevelopeu. Accoiuing to the
0SBA, theie aie S8,uuu milk cow opeiations.
S7
In the 0niteu States, but EPA's AgStai
piogiam iepoits that only 167 anaeiobic uigestei uaiiy piojects weie opeiating as of Nay
2u1S.
S8
Yet, auvocates of this fuel say that in 2u14, available RNu iesouices aie scheuuleu
to piouuce moie than Su times the 2u1S Renewable Fuel Stanuaiu Cellulosic Biofuel
volumes.
S9

An ANL stuuy issueu in 2u11 on RNu piouuction pathways concluueu that all of them show
significantly fewei uBu emissions anu less fossil fuel consumption than petioleum anu
natuial gas. "Because it is chemically iuentical to fossil natuial gas, yet piouuces fai fewei
uBu emissions," the AFBC says, "the blenuing of ielatively small quantities of RNu with
fossil natuial gas can pioviue significant lifecycle uBu benefits."
6u

Auvocates of RNu say that auuitional benefits incluue, but aie not limiteu to:

R%8,"+:$:+B> Accoiuing to the Coalition Foi Renewable Natuial uas, a national non-piofit
auvocating foi incieaseu utilization of biomethane, RNu may be useu as a tianspoitation
fuel, foi electiicity geneiation anu foi heating puiposes, in auuition to being a natuial gas
auuitive oi substitute in inuustiial anu commeicial applications.

- )'3=$%+% !8"*,='8+"+:'* F9%$ S'$9+:'*> RNu is the only fuel commeicially available
that can meet 1uu% of the fueling iequiiements of an 18-wheelei.

)',+ S"D:*2,> RNu is cuiiently selling at piices below fossil fuel alteinatives, like gasoline
anu uiesel.

S9=='8+ ('8 `+<%8 -$+%8*"+:D%,> Because RNu can be easily stoieu, it helps balance
electiicity uemanu helping pave the way foi incieaseu utilization of inteimittent ienewable
eneigy iesouices like winu anu solai.

7*.8%",%1 A*%82B S%.98:+B: Because of its wiue uomestic availability, RNu ieuuces oui
uepenuence on foieign oil.

P%++%8 A.'*'3:.,: RNu uevelopment anu piouuction cieates 0.S. jobs anu benefits local
economies.

)$%"*%8 A*D:8'*3%*+: By utilizing, iathei than uiscaiuing, oui nation's waste, RNu
contiibutes to bettei lanu use, piotects watei iesouices, ieuuces ouois, anu by ieplacing
fossil fuels, helps clean the aii anu significantly ieuuces uBu emissions.

Poweiing Foiwaiu
161
I%+<"*'$

Nethanol is the piincipal component of natuial gas anu can be conveiteu into a liquiu fuel.
In 2u1S, ieseaicheis iepoiteuly uiscoveieu how to piouuce methanol uiiectly fiom C02 at a
"significantly lowei cost" than gasoline. Caibon Recycling Inteinational, an oiganization
that piomotes methanol piouuction fiom C02 souices such as inuustiial plants, calls the
piouuct "ienewable methanol" when it is manufactuieu fiom caibon anu hyuiogen
piouuceu by electiolysis of watei with ienewable eneigy
("
. Pioponents also contenu that
methanol can be consiueieu a "caiiiei" fuel like hyuiogen, because it "stoies" the eneigy
fiom the ienewable iesouices useu to piouuce it.

Like ethanol, methanol can be combineu with gasoline to piouuce a high-octane fuel.
Pioponents say that methanol piouuction in the 0niteu States has been pieventeu by
feueial ethanol subsiuies anu vehicle waiianties that uo not covei cais that buin methanol.

A stuuy issueu in 2u11 by NIT ieseaicheis leu by now-Eneigy Secietaiy Einest Noniz
concluueu, "Conveision of natuial gas to methanol, as wiuely piacticeu in the chemicals
inuustiy, coulu pioviue a cost effective ioute to manufactuiing an alteinative, oi
supplement, to gasoline, while keeping C02 emissions at ioughly the same level." 0ne
liability of methanol fuels is that it is toxic to humans when it is inhaleu oi exposeu to skin.

A$%.+8:. R%<:.$%,

Electiic vehicles aie being actively piomoteu at the feueial, state anu local levels. The
Ameiican Recoveiy anu Reinvestment Act allocateu $4uu million foi a Tianspoitation
Electiification Initiative to ueploy 1S,uuu plug-in electiic vehicles anu 22,uuu chaiging
stations by Becembei 2u1S. B0E piomotes PEv ueployment in its Clean Cities anu Ev
Eveiywheie piogiams. In 2u11, B0E announceu $8.S million in funuing foi 16 piojects to
uevelop compiehensive PEv ueployment stiategies in 24 states.

Like seveial othei alteinative fuels, electiicity's enviionmental auvantage ovei petioleum
uepenus on how it is piouuceu. Emissions in the electiic powei sectoi have ueclineu 12%
since 2uuS, the iesult of seveial factois incluuing the economic uowntuin, the low piice of
natuial gas, anu penuing enviionmental iegulations that will impact coal-fiieu
geneiation. The EIA has iepoiteu that last yeai's caibon uioxiue emissions fiom the 0.S.
eneigy sectoi weie at theii lowest levels since 1994. Fuithei, the nation appeais on tiack
to ieach Piesiuent 0bama's goal to ieuuce 0.S. uBu 17% by 2u2u ielative to 2uuS levels.

Looking aheau, the full implementation of the Neicuiy Aii Toxics Stanuaiu (NATS) iule,
the uieenhouse uas New Souice Peifoimance Stanuaiu foi New anu Existing Souices, anu
effoits at the state level to inciease the iole that ienewable eneigy technologies play in
pioviuing electiicity aie expecteu to continue to uiive uown the oveiall uBu piofile of the
electiic powei sectoi. If these assumptions change, then the oveiall uBu benefit of
electiification of the tianspoitation sectoi will be ieuuceu except in those states with
aggiessive ienewable poitfolio stanuaius anu significant existing nucleai anu natuial gas
Poweiing Foiwaiu
162
fiieu geneiation souices.

In auuition to chaiging PEvs with electiicity fiom cential-station geneiating plants, theie is
an oppoitunity to capitalize on the piolifeiation of uistiibuteu eneigy systems that use
photovoltaic (Pv) technologies. Cuiiently, uistiibuteu Pv is giowing most iapiuly in
Califoinia, New }eisey anu Aiizona. PEvs chaigeu with uistiibuteu geneiation systems such
as Pv panels on gaiage ioofs, at paiking facilities anu at business sites pioviue an
oppoitunity to optimize these caibon-fiee iesouices. Theie is also a laige oppoitunity to
inciease clean electiicity piouuction fiom winu powei anu geotheimal souices. To fully
capitalize on the paiiing of these technologies, auuitional investments aie neeueu in the
local utility giiu, in full ueployment of smait meteis, anu in uistiibuteu eneigy stoiage.
Time-of-use electiicity piicing is ciitical to ensuie that PEv ueployment uoes not auveisely
affect the gieenhouse gas intensity of the electiic powei sectoi. If all PEvs anu PBEvs weie
chaigeu at peak time, auuitional geneiatois woulu have to be biought on line, causing
inefficient cycling anu highei aveiage uBu intensity. Incentives, such as lowei electiicity
iates at off-peak houis, aie neeueu in oiuei to ensuie that electiic vehicles uelivei caibon
savings.

uoing foiwaiu, PEvs have the potential to seive as eneigy stoiage assets foi utilities,
selling powei back to electiic utilities to help them meet peak powei uemanus. In that
application, PEvs coulu also help ieuuce the pioblems of inteimittency with solai anu winu
powei. These benefits iequiie full cooiuination between electiic customeis, utilities anu
giiu opeiatois, much of which woulu have to be uone at the state level. Pilot piojects aie
alieauy unueiway between piivate companies anu BoB to bettei unueistanu the potential
benefits of this mouel. Bowevei, the incieaseu cycling of cai batteiies that woulu iesult
fiom this piactice woulu ieuuce the life of the batteiies. In auuition, uiiveis woulu saciifice
convenience with the iisk of not having fully chaigeu batteiies when they wish to tiavel.
These issues must be auuiesseu befoie the inteiaction between electiic vehicles anu
electiic giius becomes wiuespieau.

Impioveu batteiy stoiage is anothei aiea that woulu facilitate the use of PEvs. A peiceiveu
uownsiue of PEvs has been the limiteu life anu iange of theii batteiies. Batteiy technology
is impioving uue in pait to feueial investments in ieseaich, but PEv owneis can still face a
cost of seveial thousanu uollais to ieplace theii vehicles' batteiies aftei seveial yeais of
opeiation. Bowevei, scientists gatheieu at the 2uuS meeting of the Ameiican Chemical
Society iepoiteu that uepenuing on wheie anu how they'ie useu, the batteiies in electiic
anu hybiiu vehicles can last as long as 2u yeais. Scientists also aie exploiing "seconu life"
uses of PEv anu hybiiu batteiies to peifoim less uemanuing functions, such as backup
powei foi computeis anu meuical equipment. NREL began to examine this potential moie
closely in 2u11, anu piivate companies have alieauy unueitaken paitneiships to fuithei
this new maiket.

An electiic vehicle's iange is affecteu by wheie anu how the vehicle is uiiven. The most
populai PEvs touay aie iateu fiom about 6u miles to just ovei 1uu miles, which falls well
within the iange of the aveiage uaily commute anu aligns well with futuie eneigy
piouuction patteins in many iegions of the countiy wheie the uptake of PEvs is most
Poweiing Foiwaiu
16S
expecteu. Foi example, in Califoinia, the cuiient supply anu uemanu piofile is shifting as a
iesult of the incieaseu piolifeiation of iooftop Pvs anu cential station stoiage, coupleu
with the incieaseu use of home electionics anu chaiging. A shift is occuiiing wheie the
utilities expect an oveisupply situation uuiing the miuule of the uay when the sun is
shining anu cais aie paikeu at the woikplace. This offeis a significant oppoitunity to
optimize the use of both clean geneiation anu PEv technologies as well as insights into
wheie to best taiget iesouices anu effoits.

The potential of PEvs to become majoi low-caibon passengei anu light uuty commeicial
vehicles of the futuie is significant. If the piojecteu ieuuction in the uBu piofile of the
electiic powei sectoi is iealizeu, these vehicles will offei benefits foi the enviionment
while helping to optimize anu suppoit the futuie electiic giiu anu ielateu technologies.

\B18'2%*

Byuiogen can be useu in puie foim oi in fuel cells to piouuce electiicity. Byuiogen can
offei substantial gieenhouse gas ieuuction benefits, if it is piouuceu with low-caibon
eneigy fiom nucleai powei oi ienewable iesouices such as solai, winu oi biomass eneigy.

Nany of the hyuiogen fueling stations in the 0niteu States touay weie built to suppoit
uemonstiation piojects. B0E is actively involveu in ieseaich anu uevelopment to make
hyuiogen fuel cells a cost-competitive alteinative to conventional vehicles on a life-cycle
basis. B0E envisions the neai teim use of hyuiogen fuel cells in specialty vehicles anu foi
emeigency backup powei, paiticulaily in telecommunications.

Cuiient feueial incentives foi hyuiogen incluue the Alteinative Fuel Tax Exemption, a
Byuiogen Fuel Infiastiuctuie Tax Cieuit, a Fuel Cell Notoi vehicle Tax Cieuit, a Byuiogen
Fuel Nixtuie Excise Tax Cieuit, a Byuiogen Fuel Excise Tax Cieuit, anu seveial othei
incentives.

Among the baiiieis to moie wiuespieau use of hyuiogen as a tianspoitation fuel aie the
costs of fuel cell vehicles, the lack of hyuiogen uistiibution infiastiuctuie, anu local coues
anu oiuinances that inhibit iefueling infiastiuctuie uevelopment baseu on peiceiveu safety
conceins. Safety conceins appeai to go all the way back to the inuelible Binuenbuig
uisastei in 19S7. In ieality, hyuiogen is a safei fuel than gasoline. In the event hyuiogen is
ieleaseu outuoois, it uispeises anu iises veiy quickly anu has less eneigy uensity pei unit
of volume than othei vehicle fuels.
($
B0E is cooiuinating effoits to uevelop mouel coues
anu stanuaius that ensuie safe use.

B0E iepoits that, "in auuition to the technical challenges being auuiesseu thiough ieseaich
anu uevelopment, theie aie obstacles to successful implementation of hyuiogen fueling
infiastiuctuie that can be auuiesseu only by integiating the components into complete
systems." B0E is, "ueveloping anu testing complete system solutions that valiuate
integiateu hyuiogen anu fuel cell technologies foi tianspoitation, infiastiuctuie, anu
electiic geneiation in a systems context unuei ieal-woilu opeiating conuitions." Bowevei,
Poweiing Foiwaiu
164
expeits who paiticipateu in the CNEE uialogue noteu that if Nuv infiastiuctuie became
wiuespieau, it coulu be conveiteu to hyuiogen iefueling by using on-site iefoiming.

B0E cites stoiage as a pioblem because hyuiogen iequiies high piessuies, low
tempeiatuies oi chemical piocesses if it is stoieu in small spaces such as a vehicle's fuel
tank. Anu because hyuiogen has low volumetiic eneigy uensity compaieu with gasoline
anu natuial gas (but highei eneigy uensity compaieu to batteiies), it iequiies a laigei fuel
tank than most petioleum-fueleu vehicles. 0thei challenges incluue the ielatively high cost
of on-boaiu vehicle stoiage systems. B0E is conuucting ieseaich in each of these aieas.

`+<%8 R%<:.$% "*1 7*(8",+89.+98% 7,,9%,

A majoi factoi in the cost anu maiket success of AFs is the new oi expanueu infiastiuctuie
that will be iequiieu foi full ietail ueployment. In auuition to capital, opeiational anu
maintenance costs, infiastiuctuie longevity is an issue, incluuing whethei public anu
piivate investments aie at iisk of being stianueu in the futuie by limits on uBu
emissions.
(%
Infiastiuctuie iesilience also is impoitant because of the anticipateu impacts
of global climate change that can affect pipelines, fuel stoiage facilities anu the electiic giiu.

NREL's Tianspoitation Eneigy Futuies Pioject took up the infiastiuctuie cost issue in a
stuuy ieleaseu in 2u1S.
(&
The lab analyzeu foui scenaiios:

1. BA0 with no significant changes in the tianspoitation sectoi;

2. A "poitfolio" futuie in which a vaiiety of auvanceu vehicle anu fuel technologies have
been successfully ueployeu;

S. A "combustion" futuie fueleu by auvanceu biofuels anu natuial gas; anu

4. An "electiification" futuie uominateu by electiic anu hyuiogen poweieu vehicles.

NREL's conclusions weie:

W'0%8 (9%$ .',+,: Baseu upon long-teim cost estimates, NREL founu that each scenaiio
iesults in total fuel costs lowei than the low oil piice case iepoiteu in the EIA Annual
Eneigy 0utlook foi 2u11 (AE0). Compaieu to total fuel expenuituies in the BA0 scenaiio,
fuel cost estimates in the low-caibon scenaiios suggesteu savings on the oiuei of $2uu
billion to $1,uuu billion pei yeai by 2u4u-2uSu when compaieu to the AE0 low oil piice
case anu the high oil piice case, iespectively.

While fuel piices in the maiketplace woulu likely be highei than these estimates,
paiticulaily in the eaily giowth yeais uue to maiket baiiieis anu high investment iisk
piemiums, NREL saiu, the estimate of lowei total fuel costs foi the low-caibon scenaiios
highlights the oppoitunity foi auvanceu fuel-vehicle systems to pioviue economic benefits
anu to mitigate the economic iisks associateu with high oil piices.
Poweiing Foiwaiu
16S

-1%Y9"+% ,9==$B :*(8",+89.+98%: The low-caibon scenaiios iequiie significant
investment in fuel supply infiastiuctuie.

-1%Y9"+% =8'19.+:'* :*(8",+89.+98%: Expansion of fuel piouuction infiastiuctuie in the
low-caibon scenaiios is about twice as laige as in the BA0 scenaiio.

)'D%8"2% .<"$$%*2%, ('8 8%+":$ :*(8",+89.+98% %[="*,:'*: Expansion iequiiements foi
ietail infiastiuctuie components, such as the numbei of iefueling oi iechaiging stations
neeueu to seive a paiticulai uiban maiket, uepenu upon assumptions about maiket
giowth, uiban aiea population uensity tienus, anu ietail sectoi maiket uynamics to 2uSu.
NREL concluueu that foi some fuels that iequiie new ietail infiastiuctuie, such as natuial
gas oi hyuiogen, it may piove challenging to pioviue sufficient geogiaphic coveiage while
maintaining economically favoiable station sizes. Sufficient ietail infiastiuctuie availability
is a key maiket uevelopment issue foi alteinative fuels, NREL iepoiteu.

In auuition to infiastiuctuie issues, anu even with the use of ienewable fuels, vehicle
efficiency iemains an impoitant objective. All fuels involve eneigy anu mateiial
consumption uuiing theii life cycles. Even if fuels fiom ienewable iesouices weie
ubiquitous, vehicle efficiency shoulu iemain a piioiity.

Poweiing Foiwaiu
166
A*1 N'+%,

)<"=+%8 5 A*1*'+%,

1
Reseaicheis at Lawience Beikeley National Laboiatoiy founu as fai back as 2uu7 that
while the Piouuction Tax Cieuit's impact on winu powei uevelopment was beneficial, the
shoit-teim expiiations anu ieauthoiizations of the PTC causeu uemanu foi winu powei to
be "compiesseu into tight anu fienzieu winuows of uevelopment". The iesults weie slowei
winu uevelopment, highei than necessaiy costs, ieuuceu R&B investments, uifficulty in
planning tiansmission expansions, anu gieatei ieliance on equipment piouuceu in othei
countiies.

2
"Location efficiency" is uefineu heie as eneigy savings that iesult when a home oi
commeicial builuing is locateu in a place that ieuuces tianspoitation costs. Examples
incluue builuings neai public tianspoitation oi in uiban uensities that allow people to
access institutions anu seivices without having to pay the financing, fuel, maintenance,
insuiance anu paiking costs of piivate passengei vehicles.

S
"Bome Eneigy Efficiency anu Noitgage Risks," 0niveisity of Noith Caiolina at Chapel Bill,
Naich 2u1S. The analysis concluueu that the iisk of uefault is one-thiiu lowei foi Eneigy-
Stai-iateu homes. A stuuy by the 0niveisity of Califoinia at Beikeley anu 0CLA founu that
eneigy efficiency upgiaues inciease home values by S.S% to 9%. 0ne of the authois of the
0NC stuuy, Robeito Queicia, concluueu: "Consumei anu inuustiy acceptance of eneigy
efficiency is high. But the lack of bioau consiueiation of potential eneigy savings in the
moitgage unueiwiiting piocess still pievents many moueiate-anu miuule-income
homebuyeis fiom fully enjoying the cost savings." In auuition, new ieseaich utilizing uata
on multifamily homes fiom Fannie Nae founu significantly lowei iisk of moitgage uefault
when the piopeities weie equippeu with "sustainability featuies" - incluuing walkability,
access to mass tiansit, the piesence of neaiby paiks, etc.

4
This policy is pait of the Sensible Accounting to value Eneigy Act (SAvE Act) championeu
by bipaitisan co-sponsois in the Senate. The Auministiation can implement it unuei
existing authoiity while suppoiting the Act in Congiess to make this piactice a iequiiement
in law. Eneigy-saving featuies shoulu incluue ienewable eneigy systems such as
photovoltaic aiiays anu passive solai uesign, as well as eneigy efficiency measuies.

S
PACE financing is impoitant also foi capitalizing ienewable eneigy piojects. Seveial of the
othei iecommenuations in this papei aie also applicable to ienewable eneigy technologies.

6
The IRS uoes not yet have a ievenue iuling on eneigy efficiency oi ienewable eneigy. Real
Estate Investment Tiusts have to petition foi a Piivate Lettei Ruling inuiviuually because
theie is no guiuance that woulu assuie theii investois that investing in efficiency anu
ienewables via the REIT is legal. Bowevei, in Apiil 2u1S, Bannon Aimstiong Sustainable
Infiastiuctuie (NYSE:BASI) ieceiveu confiimation fiom the IRS that it can finance

Poweiing Foiwaiu
167

ienewable eneigy piojects in ieal estate if it maintains an acceptable balance between
investments in eneigy efficiency anu ienewables. Bannon Aimstiong is one of only two
publicly tiaueu REITs ueuicateu to sustainable infiastiuctuie.

7
Fiom this point foiwaiu, foi the puipose of this papei, ESPCs will also iefei to 0ESCs as
both aie an active offeiing foi feueial facilities in many aieas of the countiy.

8
CNEE has founu that seveial states have passeu enabling legislation foi ESPCs, but have no
active piogiam.

9
In }uly 2u12 EPA publisheu a Roaumap foi Incoipoiating Eneigy EfficiencyRenewable
Eneigy Policies anu Piogiams into State anu Tiibal Implementation Plans. The Roaumap
claiifies guiuance publisheu by EPA in 2uu4 anu 2uuS iegaiuing ways to cieuit eneigy
efficiency anu ienewable eneigy measuies in State Implementation Plans (SIPs). In
auuition, the National Renewable Eneigy Laboiatoiy has uevelopeu a veiification anu
measuiement piotocol foi estimating eneigy savings fiom iesiuential anu commeicial
eneigy efficiency piogiams anu measuies. The piotocol is intenueu to give electiic utilities,
iegulatois anu othei stakeholueis moie confiuence in theii eneigy-savings iepoits.

1u
This is a timing issue. If state Public 0tility Commissions (P0Cs) wait until aftei EPA
issues its uiaft guiuance next summei, it coulu be anothei yeai oi moie befoie P0Cs
appiove eneigy efficiency anu ienewable eneigy piogiams anu measuiement anu
veiification methouologies. P0C appioval is ciucial because they oveisee all utility uemanu
siue management. If P0Cs coulu anticipate EPA's iuling anu have uockets openeu to
uiscuss the issue while EPA is completing its guiuance, months anu peihaps yeais of time
coulu be saveu. EPA anu the White Bouse woulu encouiage this heau stait if it pioviueu
States anu P0Cs with covei by communicating that eneigy efficiency anu ienewable eneigy
measuies that ieuuce gieenhouse gas emissions at oi outsiue powei plants will count in
State implementation Plans.

11
B0E's 0ffice of Eneigy Efficiency anu Renewable Eneigy anu the State Eneigy Efficiency
Action Netwoik have piouuceu iesouice uocuments on this issue.

12
It has been wiuely iepoiteu that laige amounts of piivate sectoi capital have foi been
paikeu on the siuelines seveial yeais anu not investeu in new plant anu equipment. This
ieuuceu level of capital investment has been a uiag on economic iecoveiy anu job giowth,
especially in manufactuiing wheie skilleu woikeis can still eain a miuule-class wage.
Although many ieasons have been positeu foi this lack of investment activity, iegulatoiy
unceitainty is a factoi. 0ne aiea wheie gieatei iegulatoiy ceitainty woulu likely spui
investment in both new plant anu equipment anu in eneigy efficiency involves changes to
the piocess foi peimitting new anu mouifieu souices unuei the Clean Aii Act. Theie aie
two geneial types of new anu mouifieu souice peimitting unuei the Act. In "non-
attainment" aieas wheie the aii quality is woise than that iequiieu to meet the national
ambient aii quality stanuaius (NAAQS), new souice ieview (NSR) peimitting is iequiieu. In

Poweiing Foiwaiu
168

"attainment" aieas wheie aii quality is equal to oi bettei than the NAAQS, pievention of
significant ueteiioiation (PSB) peimitting is iequiieu. EPA establishes minimum
iequiiements foi these peimit piogiams but the states aie in most instances authoiizeu to
auministei them. Enu-use eneigy efficiency can ieuuce Clean Aii Act peimitting unceitainty
in both of these piogiams anu encouiage investment in new plant anu equipment. This can
be accomplisheu by establishing an effective methou to quantify the powei plant emissions
ieuuctions attiibutable to investments in enu-use eneigy efficiency. 0nuei EPA's non-
attainment NSR iegulations anu guiuance, theie can geneially be no net inciease in
emissions. A company seeking to invest in expanueu manufactuiing equipment at an
existing location must not only install auvanceu pollution abatement on the new oi
mouifieu equipment, it must also finu offsetting emissions ieuuctions somewheie else. This
is fiequently uone by cuitailing opeiations on unmouifieu equipment at the existing plant
with the unfoitunate iesult that theie is no net giowth in eithei output oi jobs. If a
company weie seeking to builu a new plant in a non-attainment aiea, the company typically
woulu neeu to finu emissions ieuuctions outsiue the fence line of the new plant. This is also
fiequently uone by having anothei company cuitail opeiations so that the new plant's
emissions aie offset anu no net inciease in emissions is achieveu. In auuition, NSR
emissions offsets aie sometimes achieveu by puichasing existing Emissions Reuuction
Cieuits, fiequently maue available by a pieviously closeu facility. These unuesiiable iesults
coulu be ieveiseu if EPA anu the states changeu theii NSR piogiams to encouiage the use of
emissions offsets as well as the issuance of ERCs foi emissions ieuuctions achieveu fiom
investments in enu-use eneigy efficiency outsiue the new plant's fence line. A similai pio-
giowth iesult coulu be achieveu in PSB peimitting if EPA anu the states changeu theii PSB
piogiams to encouiage the use of such enu-use eneigy efficiency investments to offset the
anticipateu missions of the new oi mouifieu souice just to the extent necessaiy to net out of
PSB. Foi both NSR anu PSB it shoulu be noteu that investments in enu-use eneigy
efficiency will geneiate potentially gieatei offsets if the electiicity in the aiea of those
investments is supplieu by coal, which tenus to geneiate highei emissions pei megawatt
houi than othei geneiation fuels oi technologies. Cuiiently, many aieas that aie seiveu by
coal-baseu geneiation aie the same aieas wheie manufactuiing has been haiuest hit anu
wheie jobs giowth woulu be most welcome.

1S
The Feueial uoveinment is the nation's fouith laigest souice of gieenhouse gas
emissions anu Ameiica's laigest single eneigy consumei. In 2u12, the goveinment
consumeu 1.6 quaus of eneigy, about 1.7% of the nation's eneigy consumption anu
appioximately equal to the eneigy useu by the city of Bong Kong oi all of New Zealanu.
In 2u12, the Feueial uoveinment's eneigy consumption cost taxpayeis about $2S
billion. In a typical yeai, planes, ships, anu vehicles account foi two-thiius of the
goveinment's eneigy consumption. The othei thiiu is useu to opeiate moie than
Suu,uuu goveinment facilities anu builuings. These expenuituies amounteu to u.7% of
total feueial expenuituies last yeai.

14
The same baiiiei exists in CB0's scoiing of feueial ienewable eneigy investments.

Poweiing Foiwaiu
169

1S
An example wheie uelay is cieating emission ieuuction oppoitunity costs is Section 4SS
of the Eneigy Inuepenuence anu Secuiity Act. The iule cieates new eneigy efficiency
stanuaius foi new feueial builuings. B0E submitteu it to 0NB on Aug. S1, 2u11.

16
The CB0, congiessional buuget committees anu 0NB use the same methou of counting,
oi "scoiing", goveinment expenses. Scoiing guiuelines aie ievieweu annually anu ieviseu
as necessaiy, but they cannot be changeu unless all of the "scoiekeepeis" agiee (See Pait 7
of Ciiculai No. A-11 issueu in }uly 2u1S by 0NB). The scoiing system cuiiently consiueis
ESPCs to be long-teim contiacts that iesult in manuatoiy spenuing - in theii woius,
obligations cieateu in othei than appiopiiations bills. The "scoiekeepeis" uo not count the
uollai savings feueial agencies achieve by ieuucing theii eneigy use, aiguing that they fall
into a uiffeient buuget categoiy. This iepoiteuly inhibits the use of thiiu paity financing
foi eneigy efficiency piojects. Similai pioblems have been iepoiteu in the past in iegaiu to
how ienewable eneigy piojects aie scoieu. Among othei issues, 0NB shoulu claiify
whethei agency owneiship of eneigy efficiency upgiaues affects scoiing.

17
See examples of WRI's analyses heie, anu CCS analysis heie.

18
1S State Tieasuieis met with White Bouse officials eailiei this yeai expiessing inteiest in
this iuea. B0E is piepaiing a "how to" guiue foi them, hopefully ieauy foi ielease this fall.
New Yoik anu Connecticut have alieauy establisheu eneigy investment paitneiships at the
state level. These funus aie veisatile anu can pioviue low cost financing uiiectly to high
piioiity piojects, such as impioving eneigy assuiance foi hospitals, anu they can also host
loan loss ieseive funus foi state-backeu financing piogiams foi clean eneigy piojects.

19
In his Climate Action Plan, the Piesiuent announceu new goals foi builuing anu
appliance efficiency. Bowevei, B0E's ability to expeuite the uevelopment oi upuating of
stanuaius will uepenu laigely on whethei 0NB acceleiates its cleaiance piocess.

2u
IACs pioviue in-uepth, no-cost eneigy assessments to eligible small anu meuium-sizeu
manufactuies, conuucteu by engineeiing faculty anu giauuate stuuents.

21
To comply with this iequiiement, states can use the Feueial uoveinment's methouology
foi measuiing the social costs of caibon. In auuition, the Centei foi Climate Stiategies anu
seveial othei oiganizations have uevelopeu cieuible moueling piogiams to quantify the
jobs, economic anu enviionmental benefits of eneigy-ielateu gieenhouse gas ieuuction
measuies.

22
0ne example has been EERE's Clean Cities piogiam in which the agency facilitateu
paitneiships between the piouuceis, fuel supplieis anu fleet manageis to ueploy
alteinative fuel vehicles anu to builu the infiastiuctuie to seive them. Noie than 1uu cities
now have coalitions to piomote ienewable fuels, iule-ieuuction measuies, fuel economy
anu emeiging tianspoitation technologies. EERE iepoits that since the piogiam began in
199S, it has ieuuceu 0.S. petioleum consumption by 4.S billion gallons.

Poweiing Foiwaiu
17u

2S
B0E shoulu instiuct states to obtain infoimation about anticipateu iegional climate
impacts fiom EPA, the 0.S. ulobal Change Reseaich Piogiam, the National 0ceanic anu
Atmospheiic Auministiation anu othei feueial agencies.

24
Foi example, solai cells alieauy aie useu in paits of the natuial gas pipeline system to
powei leak monitois; the 0K National uiiu collaboiateu with a company to install small
tuibines insiue the natuial gas netwoik to piouuce clean eneigy fiom the high piessuie in
gas pipelines.

2S
Sponsoieu by Senatois }eff Bingaman (B-N.N.), Naik Piyoi (B-Aik.), Scott Biown (R-
Nass.) anu Blanche Lincoln (B-Aik.). The bill pioposeu that B0E stuuy supply chain eneigy
iesouice efficiency; funu uemonstiation piojects; suppoit tiaining piogiams; iuentify anu
piomote piactices, companies, anu piouucts that conseive eneigy, watei, anu othei
iesouices thiough highly efficient supply chains; collect anu uisseminate uata on the eneigy
consumption of supply chains; uevelop metiics, piocesses anu tools foi measuiing supply
chain eneigy use; uevelop guiuance foi impioving supply chain efficiency; haimonize
appioaches to measuiing supply chain efficiency among uomestic anu inteinational
oiganizations; anu shaie best piactices with inuustiy, incluuing small businesses, anu
pioviue them with oppoitunities to benchmaik theii supply chain efficiency.

26
Agencies aie iequiieu to iepoit annually to B0E on theii eneigy management effoits.
B0E consoliuates the agency iepoits into a iepoit foi Congiess each yeai. Bowevei, the
most iecent iepoit available on the FENP website is fiom 2uu7.

27
The Weatheiization Assistance Piogiam (WAP) will become incieasingly impoitant
as the Auministiation implements the Piesiuent's climate plan. Extieme heat is alieauy
the 0niteu States' No. 1 weathei-ielateu killei, with the elueily anu those who live in
homes without cooling systems the piimaiy victims. In the event that piices inciease foi
electiicity oi fossil eneigy uue to caibon piicing oi to the iegulation of gieenhouse gas
emissions fiom powei plants, low-income householus will have to beai a highei eneigy
buiuen both foi cooling anu heating, especially foi those who heat with oil oi gas.

28
Congiess auopteu watei flow limits on new showeiheaus, faucets anu toilets as pait of
the Eneigy Policy Act of 1992. The feueial stanuaius have not been ieviseu since then anu
aie now outuateu. uiven this situation, B0E waiveu feueial pieemption of stiongei state
stanuaius on these plumbing piouucts in Becembei 2u1u. Since then Califoinia, ueoigia
anu Texas have auopteu moie iestiictive watei flow stanuaius foi new toilets.

29
In the eaily 199us, B0E anu B0B conuucteu pilot piojects in five states to link home
eneigy iatings with eneigy efficient moitgages. Funuing was uiscontinueu in 1999. A
post-piogiam evaluation by NREL concluueu that "Peei-ievieweu analysis on the
impact of EENs on moitgage loan peifoimance is still lacking. This ciitical question has
been iuentifieu as the coie issue by the moitgage community in its uesign anu use of

Poweiing Foiwaiu
171

EENs piouucts." An analysis of cuiient feueial moitgage uata to auuiess this "coie
issue" is pioposeu in uoal 1, No. 1 of this chaptei.

Su
Neaily 7 million Ameiicans, mostly low-income, live in manufactuieu homes. Eneigy
efficiency stanuaius foi these homes lag behinu the stanuaius foi site-built homes. A 2u12
stuuy by ACEEE concluueu that the lag is causeu by two factois. Fiist, the B0B coue that
sets eneigy efficiency stanuaius foi manufactuieu homes is outuateu. Seconu, B0B's
emphasis on low initial cost while unuei-emphasizing opeiating costs iesults in homes
with pooi eneigy peifoimance. ACEEE estimates that cost-effective eneigy efficiency
measuies in manufactuieu homes coulu save 4u% of total piojecteu electiic consumption
anu SS% of total pioject natuial gas consumption fiom 2u11 thiough 2uSu.

S1
B0B spenus $7 billion a yeai on eneigy bills foi its public housing units. While it has uata
on what units qualify as public housing, it uoes not have uetaileu infoimation on the eneigy
usage of each of those inuiviuual units.

S2
Each yeai, BBS pioviues moie than $S billion to states to suppoit the LIBEAP piogiam to
assist low-income householus with theii eneigy bills. Section 26uS(b)(16) |Assuiance 16j
of the LIBEAP statute allows a state to "use up to S% of such funus, at its option, to pioviue
seivices that encouiage anu enable householus to ieuuce theii home eneigy neeus anu
theieby the neeu foi eneigy assistance, incluuing neeus assessments, counseling, anu
assistance with eneigy venuois." Bowevei, this S% authoiity is not wiuely useu by states
anu is not focuseu on ueliveiing measuiable eneigy savings that woulu save the
goveinment money, piomote eneigy liteiacy, anu ieuuce eneigy waste.

SS
At piesent, Section 8 of Executive 0iuei 1SS14 iequiies agencies to uevelop
sustainability peifoimance plans that piioiitize theii actions baseu on "lifecycle ietuin on
investment". EPA anu othei feueial agencies now consiuei the social cost of caibon to
estimate the climate benefits of iulemaking. These calculations incluue net agiicultuial
piouuctivity, human health anu piopeity uamages fiom floouing. Bowevei, these auvances
uon't yet fully captuie the value of full-cost accounting.

S4
Evan Nills anu colleagues at Lawience Beikeley National Laboiatoiy have uone extensive
ieseaich into the iisk-ieuuction benefits of eneigy efficiency anu ienewable eneigy.

SS
Accoiuing to SBA, 2S% of small businesses affecteu by natuial uisastei nevei ie-open.
Eneigy efficiency anu uistiibuteu ienewable eneigy systems can ieuuce this closuie iate by
pieventing costly powei uisiuptions, piolonging iefiigeiation uuiing powei outages, anu
sustaining business seivices in the afteimath of uisasteis.

S6
The miu-couise ieview will consiuei whethei fuel-economy stanuaius shoulu be aujusteu
foi Nouel Yeais 2u22-2u2S, baseu on consumei acceptance of fuel-efficient vehicles, eneigy
piices anu othei factois. Peifoimance of the stanuaius may also ueteimine whethei they
will be impioveu beyonu Nouel Yeai 2u2S. A iecent analysis publisheu by Consumei

Poweiing Foiwaiu
172

Repoits founu that "consumeis aie incieasingly iecognizing the benefits of fuel- efficient
vehicles." A Consumei Repoits suivey founu that lowei fuel costs anu being
"enviionmentally fiienuly" weie the piincipal motivations foi consumei puichases of fuel-
efficient vehicles.

)<"=+%8 E A*1*'+%,

1
As noteu eailiei, a piesiuent's use of powei is on most soliu giounu when Congiess
explicitly uelegates it. In ciitical times, howevei, some piesiuents have inteipieteu theii
authoiity to incluue anything Congiess hau not explicitly uisalloweu. Somewheie in the
miuule is congiessional intent language in many statutes, which expiesses the objectives
Congiess hopes to accomplish.

2
In geneial, "beyonu the fence line" emission ieuuction effoits can take two foims. Fiist,
EPA coulu allow an electiic utility to biing one existing plant into compliance by ieuucing
gieenhouse gas emissions in one oi moie of its othei powei plants. Seconu, a utility might
achieve compliance in pait by sponsoiing piogiams that ieuuce emissions outsiue the
company's geneiation systemfoi example, uemanu-siue management piogiams that
ieuuce powei consumption oi uistiibuteu solai anu winu eneigy systems that ieplace
fossil-fiieu powei with zeio-caibon electiic geneiation. As in othei EPA iegulations,
compliance measuies woulu have to be veiifiable anu enfoiceable.

S
This is a timing issue. If state P0Cs wait until aftei EPA issues its uiaft guiuance next
summei, it coulu be anothei yeai oi moie befoie P0Cs appiove eneigy efficiency anu
ienewable eneigy piogiams anu measuiement anu veiification methouologies. P0C
appioval is ciucial because they oveisee all utility uemanu siue management. If P0Cs coulu
anticipate EPA's iuling anu have uockets openeu to uiscuss the issue while EPA is
completing its guiuance, months anu peihaps yeais of time coulu be saveu. EPA anu the
White Bouse woulu encouiage this heau stait if it pioviueu states anu P0Cs with covei by
communicating that eneigy efficiency anu ienewable eneigy measuies that ieuuce
gieenhouse gas emissions at oi outsiue powei plants will count in SIPs.

4
Foi gieatei uetail on each of the iecommenuations in this categoiy, see Chaptei S.

S
This is expecteu to be a big issue among the states, with a factoi of five oi moie uiffeience
between P0C anu FERC evaluations of Pv systems going into the giiu.

6
Incentive iate tieatment foi tiansmission investments was uiiecteu unuei EPACT 2uuS
anu FERC 0iuei No. 679. FERC's five commissioneis iepoiteuly Incentive iate tieatment
foi tiansmission investments was uiiecteu unuei EPAct 2uuS anu FERC 0iuei No. 679.
FERC's five commissioneis iepoiteuly have been heaiing complaints that the R0E is too
high anu that iatepayeis want lowei iates. Bill White of the Eneigy Futuies Coalition
makes the case that investments in electiic tiansmission infiastiuctuie will leau to moie

Poweiing Foiwaiu
17S

use of ienewable eneigy, fewei caibon emissions anu moie stable eneigy piices foi
iatepayeis.

7
This is an objective in FERC's stiategic plan, Infiastiuctuie: Promote Bevelopment of Sofe,
Relioble, onJ Ffficient lnfrostructure tbot Serves tbe Public lnterest.

8
NREL has authoieu guiuance foi 0.S. policy makeis on how to uesign FITs, incluuing how
FERC coulu cieate pathways foi states to auopt FIT piogiams. See A Policymokers 6uiJe to
IeeJ-in Toriff Policy Besiqn, paiticulaily pages 14-18.

9
PNAs also pioviue some electiic powei to Native Ameiican Tiibes, feueial agencies,
investoi-owneu utilities anu some inuustiial customeis.

1u
The iapiu iise in cheap uomestic natuial gas supplies is leauing to a shift fiom coal to gas
foi electiic powei piouuction. The ieality of global climate change iequiies fai gieatei
levels of eneigy efficiency anu low-caibon eneigy iesouices. A iapiu ieuuction in
gieenhouse gas emissions is necessaiy both foi the nation's physical secuiity anu public
health anu foi 0niteu States cieuibility in inteinational climate negotiations. The impacts
of climate change alieauy manifesting in the 0niteu States piesent iisks to the nation's
eneigy infiastiuctuie.

11
This iecommenuation is baseu on a pioposal by the Westein uoveinois Association in its
}une 2u12 iepoit, Heetinq Renewoble Fnerqy Torqets in tbe West ot leost Cost: Tbe
lnteqrotion Cbollenqe.

12
A iecent multi-lab, multi-oiganization stuuy leu by NREL concluueu that with
technologies available touay anu a moie flexible electiic system, ienewable iesouices coulu
supply 8u% of the nation's electiic powei uemanu by miu-centuiy. The NREL stuuy shows
the technical feasibility of achieving this taiget, but B0E's leaueiship is believeu to be fai
fiom the political commitment neeueu to get theie.

1S
See Procticinq Risk-Awore 0tility Requlotion, Ceies, Apiil 2u12, anu Tbe Benefits of
Flectric Tronsmission: lJentifyinq onJ Anolyzinq tbe volue of lnvestments, The Biattle uioup,
}uly 2u1S, on how tiansmission planning fiequently omits analysis of majoi categoiies of
benefits anu how that can change.

14
The feueial Qualifications Review Boaiu evaluates all potential Senioi Executive Seivice
employees in the goveinment baseu on theii ability to seive in executive ioles. Technical
qualifications typically aie not pait of the evaluations.

1S
B0E's Inspectoi ueneial issueu a highly ciitical iepoit on Aug. 1S, 2u1S, of hiiing
piactices at the Bonneville Powei Auministiation.

Poweiing Foiwaiu
174

16
The Piesiuent also neeus to builu suppoit foi iuial electiic utilities anu customeis to
fully utilize the new financing piogiam the Ruial 0tilities Seivice is ueveloping eneigy
efficiency anu ienewable eneigy piojects in iuial Ameiica. The R0S has the authoiity to
use $6.S billion annually in lenuing authoiity foi these piojects at Tieasuiy iates. The thiee
actions in this section apply equally to iuial suppoit of these loans anu of ienewable
eneigy leaueiship by the PNAs.

17
Seconu-geneiation bioeneigy geneially iefeis to the piouuction of fuels fiom non-foou
ciops - foi example, using coin stovei oi woouy feeu stocks to piouuce cellulosic ethanol.

18
In a stuuy titleu IinJinq o Ploce for Climote Science in tbe Rurol West, ieseaicheis at the
0niveisity of Aiizona concluueu: "Coopeiative Extension has been citeu as an example of a
bounuaiy oiganization that has successfully linkeu agiicultuial science, policy, anu
piouuceis (e.g. Cash, 2uu1; Lynch et al., 2uu8). Theie has been much uebate about the
futuie of Coopeiative Extension anu the iole it shoulu play in the 21st centuiy. We suggest
that Coopeiative Extension is uniquely positioneu to seive as a bounuaiy oiganization foi
linking climate science, policy, anu iuial society."

19
Tennessee valley Authoiity website.

2u
Ibiu. See TvA's iepoit on its pollution contiol investments.

21
Piesiuent 0bama's 2uu4 buuget as quoteu in the Tennessee Times News, "White Bouse
'stiategic ieview' of TvA may put agency up foi sale".

22
The challenge of ie-missioning TvA to become an example of a 21
st
centuiy utility was
uemonstiateu eailiei this yeai when two Republican senatois fiom Tennessee blockeu
Piesiuent 0bama nomination of Naiilyn Biown to seive a new teim as chaiiman of TvA's
Boaiu of Biiectois. Bi. Biown is a noteu expeit in sustainable eneigy who woikeu at B0E's
0ak Riuge National Laboiatoiy in the past anu shaieu the Nobel Piize awaiueu in 2uu7 to
the Inteigoveinmental Panel on Climate Change. Coikei anu Alexanuei iepoiteuly
uisagieeu with Bi. Biown's views on eneigy conseivation anu fossil fuels. Piesiuent 0bama
ie-nominateu hei nine months latei as a membei of the TvA boaiu. The Senate confiimeu
hei foi that lessei position in Septembei 2u1S.

2S
Fifteen State Tieasuieis met with White Bouse officials eailiei this yeai expiessing
inteiest in this iuea. B0E is piepaiing a "how to" guiue foi them, hopefully ieauy foi ielease
this fall. New Yoik anu Connecticut have alieauy establisheu eneigy investment
paitneiships at the state level. These funus aie veisatile anu can pioviue low cost financing
uiiectly to high piioiity piojects, such as impioving eneigy assuiance foi hospitals. They
can also host loan loss ieseive funus foi state-backeu financing piogiams foi clean eneigy
piojects.

Poweiing Foiwaiu
17S

24
This iecommenuation anu the two that follow ueal with gieenhouse gas emissions iathei
than with eneigy efficiency pei se. The intention heie is to help states iecognize anu
quantify the link between clean eneigy technologies anu the Piesiuent's emphasis on
climate action.

2S
As noteu in Chaptei 1, the Feueial uoveinment is also the nation's fouith laigest souice
of gieenhouse gas emissions.

26
Foi fuithei infoimation, see the uesciiption of BEu fiom the National Institute of
Builuing Sciences anu FENP's uesciiption of technical assistance available to feueial
agencies.

27
The uA0 founu that "The militaiy seivices have funueu about 8S% of neaily 6uu piojects
that weie in uesign, unuei constiuction, oi opeiating in fiscal yeai 2u11 with up-fiont
appiopiiations, but financeu 8 of the 9 laige-scale piojects anu 19 of the S7 meuium-scale
piojects with alteinative financing. Seveial factois affect the militaiy seivices' use of
financing appioaches, incluuing peiceiveu benefits anu uiawbacks such as how long it
takes to obtain funuing." uA0 citeu inauequate shaiing of infoimation acioss the aimeu
seivices on best financing appioaches. "As a iesult," it iepoiteu, "B0B cannot ensuie that
officials iesponsible foi selecting a financing appioach have timely access on an ongoing
basis to infoimation on appioaches that theii counteipaits fiom othei seivices have useu
anu theii expeiiences with those appioaches. Such infoimation coulu assist the officials in
selecting a financing appioach that maximizes the benefits anu minimizes the uiawbacks oi
iisks of that appioach."

28
0pportunities for Synerqy Between Noturol 6os onJ Renewoble Fnerqy in tbe Flectric
Power onJ Tronsportotion Sectors, NREL, Becembei 2u12.

29
CNEE offeis specific iecommenuations on changing the national naiiative about natuial
gas in Chaptei 4.

Su
The convening powei of the Piesiuent is most effective foi pioblem solving when the
pioblems aie well fiameu. This meeting shoulu be pieceueu by a conveisation between
the Secietaiy of Eneigy, NREL anu ienewable eneigy inuustiy leaueis on the most
impoitant contiibution natuial gas can make to the expansion anu financing of ienewable
eneigy technologies.

S1
BLS ieceiveu funuing in 2u1u to begin ueveloping uata on "gieen jobs." Since then, the
BLS has been ciiticizeu both foi ovei-counting anu unueicounting gieen jobs. BLS now has
yielueu to ciiticisms fiom Congiess anu has ueciueu to stop counting anu iepoiting jobs in
this categoiy. The Biookings Institution anu the Pew Centei on the States aie among
oiganizations that have attempteu to uevelop methouologies to accuiately count "gieen"
jobs.

Poweiing Foiwaiu
176

S2
In Septembei 2u1S, seveial uozen clean eneigy auvocacy gioups complaineu that EIA's
past estimates of electiicity geneiation fiom ienewables have been "unieasonably low anu
have not been boine out by actual expeiience." They suggesteu that EIA ie-evaluate its
pieuictions, saying that companies anu policy makeis iely on EIA's numbeis. EIA
Auministiatoi Auam Sieminski iesponueu with an explanation of the many vaiiables the
EIA consiueis in its piojections.

SS
0ne of the uifficulties EIA encounteis is the time lag between the uata it analyses anu
cuiient maiket conuitions foi technologies whose piices aie falling iapiuly, as is the case
with some ienewable eneigy technologies.

S4
Fiom this point foiwaiu, foi the puipose of this papei, ESPCs will also iefei to 0ESCs as
both aie an active offeiing foi feueial facilities in many aieas of the countiy.

SS
CNEE has founu that seveial states have passeu enabling legislation foi ESPCs, but have
no active piogiam.

S6
B0E has seveial existing piogiams that can assist with this initiative, incluuing its Clean
Eneigy Applications Centeis, Inuustiial its Auvanceu Nanufactuiing 0ffice its Bata Centei
Eneigy Efficiency Piogiam, anu its Inuustiial Assessment Centei piogiam.

S7
These uata come fiom congiessional testimony by Petei Baviuson, the executive uiiectoi
of B0E's Loan Piogiam 0ffice. Baviuson's testimony incluues seveial examples of piogiam
successes. They incluue the Tesla electiic cai (loan fully iepaiu); one of the woilu's laigest
winu faims; the woilu's laigest photovoltaic anu concentiating solai powei plants; anu one
of the countiy's fiist commeicial-scale cellulosic ethanol plants.

S8
Stephanie NcClellan, Ph.B., the Pioject Biiectoi of stiategic initiatives to auvance
offshoie winu at the College of Eaith, 0cean anu Enviionment, 0niveisity of Belawaie,
contiibuteu the iecommenuations anu naiiative in this section.

S9
While legislation is outsiue the scope of this white papei, the Auministiation shoulu
suppoit tax cieuits foi a specific quantity of offshoie winu uevelopmentfoi example, the
fiist 2 uWwith no expiiation uate.

4u
The Eneigy Infoimation Auministiation (EIA) iepoits that while FITs aie ielatively new
in the 0niteu States, veisions aie being useu by at least seven states anu 1S electiic powei
pioviueis, incluuing the Tennessee valley Authoiity (TvA),
4u
a feueially owneu coipoiation
unuei the juiisuiction of the B0E. EIA also iepoits that a uiffeient mouel of FITs has
emeigeu in the 0niteu States in which electiic utilities inuepenuently establish a utility-
level FIT, eithei voluntaiily oi to help them meet state oi local ienewable eneigy manuates.
Bowevei, the Feueial uoveinment anu the states shoulu be cautious in how they uesign
FITs, leaining lessons fiom the expeiience in Euiope anu paiticulaily in Spain, wheie pooi
uesign leu to a boom-bust expeiience in the solai maiket.

Poweiing Foiwaiu
177

41
uBP systems seive a vaiiety of eneigy neeus. They aie useu foi cooling as well as heating
anu can be useu to pie-heat watei, ieuucing the eneigy consumption of conventional watei
heateis.

42
uBP iequiies ielatively high costs on the fiont enu foi the equipment anu its installation.
This may make it a canuiuate foi financing unuei thiiu paity shaieu-savings contiacts.

4S
See the stuuy sponsoieu by the Ameiican Council foi an Eneigy Efficient Economy on the
benefits of community-scale uBP.

44
See IeJerol Iinonce Iocilities Avoiloble for Fnerqy Ffficiency 0pqroJes onJ Cleon Fnerqy
Beployment, a iesouice guiue piouuceu by B0E.

4S
The eneigy-watei nexus iecommenuations also appeai in Chapteis 1 anu S, in the
context of eneigy efficiency anu utility opeiations iespectively.

46
Accoiuing to the Congiessional Reseaich Seivice, the eneigy sectoi has been the fastest-
giowing watei consumei in the nation in iecent yeais; it's piojecteu to account foi 8S% of
the giowth in uomestic watei consumption by 2uSu. The uA0 iecommenueu that feueial
agencies be cognizant of the impact of eneigy on watei anu watei on eneigy in ueciuing
which eneigy technologies to piomote. It concluueu that bettei cooiuination is neeueu
among the vaiious agencies with watei-ielateu iesponsibilities.

47
EPA's tools incluue the Co-Benefits Risk Assessment Scieening Nouel (C0BRA), which
assess the economic anu health benefits of eneigy efficiency anu ienewable eneigy in
public builuings anu an eneigy impact calculatoi that estimates the annual eneigy savings
that can be achieveu by uiffeient state policies.

48
Foi example, the Feueial uoveinment occupies a 62S-acie "campus" in Benvei, C0., with
28 uiffeient agencies in 44 builuings totaling 4 million squaie feet. Niciogiius may also be
attiactive options foi 0.S. Embassies anu othei 0.S. installations oveiseas, paiticulaily in
volatile aieas of the woilu.

49
Net-zeio means that a facility piouuces as much oi moie eneigy than it consumes ovei
the couise of a yeai. The Aimy uiiecteu five installations to achieve net-zeio eneigy by
2u2u, anu plans to ieach net-zeio eneigy at 2S oi moie bases 2uSu. In 2u11, the Base Camp
Systems Integiation Laboiatoiy (SIL) openeu at Foit Bevens, NA to assess new systems
anu technology with the goal of incieasing eneigy efficiency anu ieuucing fuel usage in
base camp opeiations.

Su
An NLP offeis ceitain tax benefits now available only to fossil eneigy inuustiies. See an
explanation of how Nastei Limiteu Paitneiships woulu apply to ienewable eneigy

Poweiing Foiwaiu
178

technologies in the legislation sponsoieu by Sen. Chiis Coons. A ievenue iuling by the IRS
applies the law to ceitain factual situations anu is consiueieu pieceuent setting.

S1
It is oui unueistanuing that in inteiest of tax simplification, the White Bouse has been
ieluctant to cieate oi complicate tax benefits. Bowevei, selecteu tax piovisions oi ievenue
iulings, such as those pioposeu heie to auvance ienewable eneigy technologies, have
public benefits that aie consiueiably moie impoitant than tax simplification. If Congiess
piotests that the Auministiation is complicating the tax coue, it can iemeuy the situation by
iepealing those paits of the coue that subsiuize matuie ienewable eneigy inuustiies.

S2
The Boaiu, cieateu by Congiess, oveisees the IRS's application of tax law. It consists of 9
membeis, incluuing seven appointeu by the Piesiuent of the 0niteu States anu confiimeu
by the Senate foi five-yeai teims. The Secietaiy of Tieasuiy anu the Commissionei of
Inteinal Revenue aie also membeis.

SS
The SEC is listeu on the goveinment's official website as an inuepenuent agency.
Bowevei, iecent couit iulings inuicate that the Piesiuent has the authoiity to fiie SEC
commissioneis, which gives the Piesiuent leveiage he uoesn't have in othei inuepenuent
agencies.

S4
The SEC issueu this guiuance in 2u1u. The analysis of compliance citeu heie was uone by
a ietiieu piivate-sectoi uata expeit who spent S months manually inspecting SEC
uocuments anu oiganizing them into a seaichable uatabase. Be founu that even among the
companies that iepoiteu theii climate iisks, 7u% only auuiesseu what caibon iegulations
woulu uo to theii opeiating costs anu uiu not auuiess many othei factois citeu in the SEC
guiuance, incluuing evolving climate science, emeiging technologies anu giowing physical
iisks. As the New Yoik Times iepoiteu in 2u1u: "The guiuance uoesn't caiiy the same foice
of law as a foimal iegulation, but public companies consiuei it binuing. The issue ievolves
aiounu the teim 'mateiial iisk,' which is a iegulatoiy guiuepost useu by companies to
ueteimine what infoimation to uisclose to investois. It builus on existing iequiiements that
companies uisclose enviionmental iisks, incluuing 0.S. EPA iules." CNEE aigues that
climate iisks have become so significant that they shoulu be a key factoi in the uecisions of
investois anu financieis. An example is the Inteinational Eneigy Agency's conclusion in
Woilu Eneigy 0utlook 2u12 that to avoiu catastiophic climate uisiuption, two-thiius of the
woilu's pioven oil, gas anu coal ieseives must iemain in the giounu. These ieseivesoi
potentially stianueu assetsaccount foi much of these inuustiies' value.

)<"=+%8 G A*1*'+%,

1
The Piesiuent has incluueu nucleai powei anu "clean coal" in his uefinition of clean
eneigy, topics of some uebate uue to the lifecycle attiibutes of these fuels. In its Renewoble
Flectricity Iutures StuJy, the NREL concluueu that with technologies available touay,
combineu with a moie flexible electiic system, ienewable iesouices aie capable of

Poweiing Foiwaiu
179

geneiating 8u% of 0.S. electiicity by 2uSu, meeting uemanu in eveiy iegion of the countiy.
In auuition, the 0nion of Conceineu Scientists has ueviseu a "climate bluepiint" that shows
the Piesiuent's goal coulu be achieveu oi exceeueu by 2uSu with new investments in
eneigy efficiency anu ienewable eneigy.

2
This initiative, calleu "Sunshot", is a majoi R&B commitment. It is a key measuie of
management peifoimance foi B0E. Its objective is to ieuuce the piice of solai electiic
systems by 7S% between 2u1u anu 2u2u. NREL piojects that this piice ieuuction woulu
allow solai technologies to pioviue 14% of the nation's electiicity by 2uSu anu 27% by
2uSu.

S
Bloombeig New Eneigy Finance, 6lobol TrenJs in Renewoble Fnerqy lnvestment {2011).

4
The Clean Aii Act iequiies EPA to establish aii quality stanuaius foi six common
substances calleu "ciiteiia pollutants". They incluue ozone, paiticulate mattei, caibon
monoxiue, nitiogen oxiues, sulfui uioxiue anu leau. They uo not incluue caibon uioxiue,
methane, oi the seveial man-maue gases that contiibute to global climate change.

S
NREL's stuuy involveu 11u contiibutois fiom SS oiganizations incluuing national
laboiatoiies, inuustiies, univeisities anu non-goveinment oiganizations. It was conuucteu
ovei seven yeais.

6
The CNEE iounutables useu the Chatham Bouse Rule to encouiage open uialogue. 0nuei
the iule, paiticipants aie fiee to use the infoimation they ieceiveu uuiing the iounutables,
but without iuentifying one anothei oi theii affiliations. Compliance with the iule is the
ieason the CNEE white papeis uo not iefei to specific inuiviuuals oi oiganizations.

7
TvA alieauy has announceu plans foi moie aggiessive use of ienewable eneigy
technologies in its own opeiations anu its seivice aiea. In iesponse to Piesiuent 0bama's
tiipling of ienewable eneigy taigets foi feueial agencies, TvA iepoiteu it alieauy has
exceeueu the Auministiation's pievious taiget anu it is expanuing is puichases of solai anu
winu powei. It cuiiently has 128 megawatts of opeiating oi committeu solai piojects
unuei contiact at moie than 2,uuu locations in its seivice aiea, plus 1,Suu megawatts fiom
winu anu 6u megawatts fiom biomass. It is making 1u megawatts of capacity available foi
iesiuential ienewable eneigy piojects of less than Su kilowatts.

8
NREL has conuucteu a stuuy iegaiuing the potential value of using Nastei Limiteu
Paitneiships heie.

9
Foi uocumentation on how executive actions on climate anu eneigy aie iooteu in specific
statutes, see the two-volume analysis of piesiuential authoiities by the 0niveisity of
Coloiauo School of Law, aichiveu at www.climateactionpioject.com.

Poweiing Foiwaiu
18u

1u
The stuuy was baseu sales of 72,uuu homes solu in Califoinia between 2uuu anu 2uu9.
Accoiuing to the Appiaisal }ouinal, appiaiseis typically assume that eveiy $1 in annual
utility bill savings fiom a solai electiic system incieases a home's value by $2u. (FviJence of
Rotionol Horket voluotions for Eome Fnerqy Ffficiency, the Appiaisal }ouinal, 0ctobei 1998
anu 1999)

11
"Location efficiency" is uefineu heie as eneigy savings that iesult when a home oi
commeicial builuing is locateu in a place that ieuuces tianspoitation costs. Examples
incluue builuings neai public tianspoitation stops oi in uiban uensities that allow people
to access institutions anu seivices without having to pay the financing, fuel, maintenance,
insuiance anu paiking costs of piivate passengei vehicles.

12
The IRS uoes not yet have a ievenue iuling on eneigy efficiency oi ienewable eneigy.
Real Estate Investment Tiusts have to petition foi a Piivate Lettei Ruling inuiviuually
because theie is no guiuance that woulu assuie theii investois that investing in efficiency
anu ienewables via the REIT is legal. Bowevei, in Apiil 2u1S, Bannon Aimstiong
Sustainable Infiastiuctuie (NYSE:BASI) ieceiveu confiimation fiom the IRS that it can
finance ienewable eneigy piojects in ieal estate if it maintains an acceptable balance
between investments in eneigy efficiency anu ienewables. Bannon Aimstiong is one of
only two publicly tiaueu REITs ueuicateu to sustainable infiastiuctuie.

1S
The Comptiollei of the Cuiiency is an inuepenuent buieau at the Tieasuiy Bepaitment.
The Comptiolleis aie appointeu by the Piesiuent anu confiimeu by the Senate foi five-yeai
teims.

14
The same baiiiei exists in CB0's scoiing of feueial ienewable eneigy investments.

1S
Foi moie infoimation on the issues of ienewable eneigy piocuiement foi feueial
facilities, see IunJinq Solor Projects ot IeJerol Aqencies: Hecbonisms onJ Selection Criterio
by NREL.

16
The CB0, congiessional buuget committees anu 0NB use the same methou of counting,
oi "scoiing", goveinment expenses. Scoiing guiuelines aie ievieweu annually anu ieviseu
as necessaiy, but they cannot be changeu unless all of the "scoiekeepeis" agiee. (See Pait 7
of Ciiculai No. A-11 issueu in }uly 2u1S by 0NB.) The scoiing system cuiiently consiueis
ESPCs to be long-teim contiacts that iesult in manuatoiy spenuing, -- in othei woius,
obligations cieateu in othei than appiopiiations bills. The "scoiekeepeis" uo not count the
uollai savings feueial agencies achieve by ieuucing theii eneigy use, aiguing that they fall
into a uiffeient buuget categoiy. This iepoiteuly inhibits the use of thiiu paity financing foi
eneigy efficiency piojects. Similai pioblems have been iepoiteu in the past in iegaiu to
how ienewable eneigy piojects aie scoieu.

17
The Auministiation's legal authoiity foi thiiu paity financing of eneigy efficiency
piojects is not a limiting factoi. Its authoiity totals $8u billion. A "multi-inuustiy" lettei

Poweiing Foiwaiu
181

sent by the 0.S. Chambei of Commeice to Piesiuent 0bama on }une 14, 2u1S, encouiages
him to set a new goal of $1 billion in ESPCs in each of the next five yeais.

18
In some applications - foi example, ienewable eneigy piojects - ESPC financing will have
to be bunuleu with feueial appiopiiations.

19
The 6uiJe to IeJerol Iinonce Iocilities for Cleon Fnerqy summaiizes uozens of unique
financing instiuments foi which clean eneigy is eligible. The Centei foi Ameiican Piogiess
estimates theie is moie than $1uu billion in feueial loan anu loan guaiantee piogiams that
coulu be applieu "in suppoit of clean eneigy" each yeai. The Centei estimates that the cost
to taxpayeis woulu be less than 1% of that amount.

2u
ProJuction Tox CreJit for Renewoble Fnerqy, 0nion of Conceineu Scientists, }an. 4, 2u1S.

21
0sinq tbe IeJerol ProJuction Tox CreJit to BuilJ o Buroble Horket for WinJ Bevelopment
in tbe 0niteJ Stotes, Wisei et.al., Lawience Beikeley National Laboiatoiy, Novembei 2uu7.

EE
26 0SC S4B Qualifieu Eneigy Conseivation Bonus.

2S
NASE0 State by State bieakuown of QECB issuances.

24
ARRA language on ieallocation: "The amount allocateu unuei this subsection to a laige
local goveinment may be ieallocateu by such local goveinment to the State in which such
local goveinment is locateu." 26 0SC S4B(e)(2)(B)a.

2S
In 26 states, municipalities have issueu affiimative waiveis by iesolution of a county oi
city council stating that they uo not intent to use bonu allocations. Six states have gone the
path of a constiuction waivei by iequesting that by a ceitain uate each municipality must
commit funus oi lose them. Failuie to notify is consiueieu a waivei. Thiee states have
issueu letteis of intent foi municipalities to claiify whethei they intenu to use the funus.
Nost states have auministeieu the ieallocation piocesses thiough State Eneigy 0ffices anu
many have implementeu the municipal waivei legislatively. NASE0 has uocumenteu the
vaiious appioaches State Eneigy 0ffices have taken to ueploy these bonu allocations, theii
waivei piocesses, anu futuie policy iecommenuations. Foi example, Coloiauo passeu BB
u9-1S46, which specifieu that all un-allocateu bonus expiie on Nov. 1u, 2uu9; at that time
they ieveiteu back to that State Eneigy 0ffice foi ie-allocation in a competitive piocess.
This competitive piocess was ieiteiateu seveial times until funus weie fully committeu.

26
Elizabeth Bellis, State anu Local Eneigy Repoit, lnternol Revenue Service lssues 6uiJonce
on uolifieJ Fnerqy Conservotion BonJs, Aug. 6
th
, 2u12.

27
0puate on QECBs, Sequestiation anu Wheel (piesentation by Elizabeth Bellis to NASE0).
Naich 7
th
, 2u1S.

Poweiing Foiwaiu
182

)<"=+%8 M A*1*'+%,

1
Touay, shale gas accounts foi some S4% of total 0.S. natuial gas piouuctionup fiom
only 4% in 2uuS helping to make the 0niteu States the laigest piouucei of natuial gas in
the woilu. The EIA piojects that shale gas will make up Su% of the nation's natuial gas
piouuction in 2uSS. (See EIA, Annual Eneigy 0utlook 2u1S, Washington BC: Bepaitment of
Eneigy (2u1S)). As INuAA iepoits, "0nconventional natuial gas is expecteu to play an evei
incieasing iole in 0.S. gas piouuction in the coming centuiy. The consulting fiim ICF
Inteinational foiecasts that piouuction of unconventional gas, incluuing coal beu methane,
tight gas anu shale gas, will giow fiom 42% of total 0.S. natuial gas piouuction in 2uu7 to
64% in 2u2u."

2
See leveroqinq Noturol 6os to ReJuce 6reenbouse 6os Fmissions, }une 2u1S, a iepoit by
the Centei foi Climate anu Eneigy Solutions anu the 0niveisity of Texas, which concluues
that while "natuial gas is a fossil fuel anu its combustion emits gieenhouse gases", its
expanueu use as a ieplacement foi coal anu petioleum coupleu with minimizeu ieleases of
methane into the atmospheie "can help oui effoits to ieuuce gieenhouse gas emissions in
the neai- to miu-teim, even as the economy giows."

S
Reolizinq tbe Potentiol of 0.S. 0nconventionol Noturol 6os: Fxecutive Summory, Febiuaiy
2u1S, Page v.

4
The lifecycle watei impacts of vaiious eneigy iesouices aie complex. 0ne analysis
(Neluium et.al.2u1S) concluues that on the basis of best available eviuence, total lifecycle
watei use is lowest foi electiicity geneiateu by photovoltaic anu winu anu highest foi
theimoelectiic geneiation. Bowevei, theimoelectiic plants using natuial gas combineu-
cycle (NuCC) tuibines iequiie much less watei foi cooling than tiauitional steam tuibine
technologies oi than coal-fiieu anu nucleai powei plants. That makes "uiy cooling" moie
economical foi NuCC plants. 0n the extiaction siue, tiauitional piouuction fiom ueep
veitical wells iequiies ielatively small amounts of watei, while hyuiofiactuiing in shale gas
ueposits can iequiie seveial million gallons of watei pei tieatment (Chesapeake Eneigy
2u1S). A 2u12 analysis of watei consumption foi gas piouuceu by Nobel Eneigy Inc. in one
Coloiauo foimation founu that veitical wells useu S87,uuu gallons of watei on aveiage foi
uiilling anu fiactuiing, while hoiizontal wells useu 2,8Su gallons. In auuition to extiaction,
natuial gas iefining anu by pipeline opeiations consume watei - 4uu million gallons of
watei pei uay in 2uu9, accoiuing to B0E. Anothei uimension of the gas-watei nexus is the
potential foi competition with uiban anu agiicultuie uses of fieshwatei iesouices in some
paits of the 0niteu States that aie tiauitionally uiy oi that will expeiience incieasingly uiy
conuitions as a iesult of climate change. Eneigy company puichases of watei iights in
Coloiauo, foi example, have become contioveisial. 0il anu gas companies estimateu they
woulu use 6.S million gallons of Coloiauo watei last yeai, only u.1 peicent of total watei
consumption in the state. But the Coloiauo 0il anu uas Commission estimateu the
inuustiy's watei neeus will giow by 16% ovei the next thiee yeais (New Yoik Times

Poweiing Foiwaiu
18S

2u12). Westein Resouice Auvocates estimateu in 2u12 that the inuustiy actually was using
as much as 1S billion gallons annually of watei in Coloiauo fiactuiing opeiations, enough
to pioviue the neeus of neaily Suu,uuu people.

S
In iegaiu to the competition between natuial gas anu ienewables, the Natuial Resouices
Befense Council explains, "Because powei plants buining natuial gas piouuce less aii
pollution than coal-buining plants, in the neai teim natuial gas can actually seive to
uiminish a numbei of public health thieats causeu by geneiating electiicity. To achieve this,
though, sounu policies must be in place to make ceitain that natuial gas is useu to ieplace
coal anu minimize methane emissionsa potent global waiming pollutantanu uoes not
uisplace investments in eneigy efficiency anu ienewable eneigy souices, such as winu anu
solai."

6
The Woilu Resouices Institute has concluueu that "Cutting methane leakage iates fiom
natuial gas systems to less than 1 peicent of total piouuction woulu ensuie that the climate
impacts of natuial gas aie lowei than coal oi uiesel fuel ovei any time hoiizon. This goal
can be achieveu by ieuucing emissions by one-half to two-thiius below cuiient levels
thiough the wiuespieau use of pioven, cost-effective technologies."

7
0.S. gieenhouse gas emissions fell 4% in 2u12 compaieu to 2u11 anu to theii lowest level
in 2u yeais. Natuial gas piouuction anu consumption playeu a significant iole, although
theie's uisagieement about how much. 0thei significant factois incluueu new feueial
policies incluuing highei efficiency stanuaius foi light-uuty vehicles, geneial eneigy
efficiency impiovements, anu the economic slowuown. The C02 Scoiecaiu uioup, a
ieseaich oiganization, says that natuial gas accounteu foi about 2S% of this ieuuction,
while eneigy efficiency measuies accounteu foi Su%. The uioup explains that natuial gas
ieplaceu not only coal, but also lowei-caibon eneigy iesouices such as hyuioelectiic
geneiation, nucleai powei anu ienewable eneigy technologies.

8
The NPC consists of appioximately 2uu membeis who auvise the Secietaiy of Eneigy on
issues ielateu to oil anu gas piouuction.

9
As one paiticipant noteu, iegional uiveisity also cieates challenges incluuing public health
anu enviionmental iisks that sometimes tuin up as lagging inuicatois of inauequate
iegulations.

1u
Foi an oveiview of cuiient state iegulations on vaiious aspects of shale gas uevelopment,
see RFF, Tbe Stote of Stote Sbole 6os Requlotion (2u1S). See also }oint Institute foi Stiategic
Eneigy Analysis (}ISEA), Noturol 6os onJ tbe Tronsformotion of tbe 0.S. Fnerqy Sector:
Flectricity, Logan, }., Beath, u., Paianhos, E., Boyu, W., Cailson, & K., Nacknick, }., NRELTP-
6ASu-SSSS8, uoluen, C0, 0SA: National Renewable Eneigy Laboiatoiy (2u12), chap. 2.

12
As noteu in the text, the agency issueu final NSPS anu national emissions stanuaius foi
hazaiuous aii pollutants (NESBAPs) iules in 2u12 iegulating volatile oiganic compounus

Poweiing Foiwaiu
184

(v0Cs) anu ceitain toxic aii pollutants fiom unconventional natuial gas piouuction anu has
begun collecting infoimation on methane emissions unuei its uBu iepoiting piogiam. 0n
watei, the agency continues to iegulate hyuiaulic fiactuiing that uses uiesel fuel unuei the
Safe Biinking Watei Act's (SBWA's) 0nueigiounu Injection Contiol (0IC) piogiam anu is
consiueiing the uevelopment of new pie-tieatment stanuaius foi centializeu waste
tieatment facilities (CWTs) anu publicly owneu tieatment woiks (P0TWs) that ieceive
wastewatei fiom hyuiaulic fiactuiing opeiations.

1S
Exec. 0iuei No. 1S6uS, 77 Feu. Reg. 2S1u7 (Api. 12, 2u12).

14
See Cbemicol Bisclosure Reqistry at www.fiacfocus.oig. This online uatabase, iun by the
uiounuwatei Piotection Council, a nonpiofit oiganization that consists of state giounu
watei iegulatoiy agencies, incluues infoimation fiom oil anu gas wells in ioughly 12 states
anu incluues infoimation fiom moie than Suu companies. Nineteen states now iequiie
some foim of uisclosuie of chemicals useu in hyuiaulic fiactuiing. 0f these States, 12
iequiie oi allow opeiatois to iegistei the hyuiaulic fiactuiing chemicals they use with
FiacFocus. The pioposeu Nay 2u1S BLN iule iegulating hyuiaulic fiactuiing on Feueial
anu Inuian Lanus gives opeiatois the option of iegisteiing the chemicals they use with
FiacFocus iathei than submitting them only to the BLN. FiacFocus has been ciiticizeu foi
limitations on the ability to seaich anu aggiegate uata acioss inuiviuual wells, incomplete
uisclosuie, inconsistent iepoiting, lack of quality contiol, anu limiteu oveisight. Its
peiceiveu limitations in the context of BLN iule at 92-9S aie uiscusseu by Kate Konschnik
et al., in leqol Iroctures in Cbemicol Bisclosure lows: Wby tbe voluntory Cbemicol Bisclosure
Reqistry IrocIocus Ioils os o Requlotory Complionce Tool (Baivaiu Law School, 2u1S) The
authois concluue that "FiacFocus is not an acceptable iegulatoiy compliance methou foi
chemical uisclosuies".

The most iecent iteiation, FiacFocus 2.u, incluues new anu enhanceu capabilities to
iesponu to some of these ciiticisms. Neveitheless, one paiticipant in the CNEE iounutable
saiu "the public anu many ieseaicheis aie still laigely unsatisfieu that companies aie
iepoiting this infoimation in a way that is sufficiently tianspaient to ensuie accountability
anu auequate piotections foi the public inteiest." Paiticipants iepoiteu that the uebate anu
attempteu fixes of the uatabase have been going on foi yeais anu iemain "highly
contentious". uiven the impoitance of achieving a uegiee of tianspaiency that satisfies
both inuustiy anu the public, the Auministiation may want to continue iefeieeing the
uebate to finu fuithei impiovements in FiacFocus oi supplemental oi alteinative ways to
uisclose fiactuiing agents

1S
As of August 26, 2u1S, thiee states -- Califoinia, Illinois anu Nevaua -- hau passeu
legislation this yeai on hyuiaulic fiactuiing. In auuition to the 16 bills specifically
auuiessing uisclosuie of fiactuiing agents, 1u containeu multiple piovisions ielateu to
hyuiaulic fiactuiing, incluuing iequiiements ielateu to uisclosuie. Foi a moie uetaileu
uesciiption of uisclosuie iequiiements in state law as of Novembei 2u12, see the iepoit

Poweiing Foiwaiu
18S

fiom the National Renewable Eneigy Laboiatoiy, Noturol 6os onJ tbe Tronsformotion of tbe
0.S. Fnerqy Sector: Flectricity, Logan et.al., pp. 168-169.

16
The bill says, "The public uisclosuie of chemical infoimation iequiieu by this act
ensuies that potential public exposuie to, anu uose ieceiveu fiom, well stimulation
tieatment fluiu chemicals can be ieasonably uisceineu." It iequiies oil anu gas companies
planning to engage in "well stimulation" to pioviue "A complete list of the names, Chemical
Abstiact Seivice (CAS) numbeis, anu estimateu concentiations, in peicent by mass, of each
anu eveiy chemical constituent of the well stimulation fluius anticipateu to be useu in the
tieatment."

17
See EyJroulic Irocturinq Requlotory Act, Ill. Public Act u98-uu22, 1.77 (2u1S).

18
The AuA's full statement on the uisclosuie issue is: "Public uialogue anu uisclosuie
paiticulaily as they apply to ciitical issues such as well completion chemicals, waste watei
tieatment anu aii-qualityas well as fact-baseu euucation anu stakeholuei engagement,
aie vital to secuiing bioau-baseu suppoit foi the continueu uevelopment of natuial gas
iesouices."

19
Issues incluue how Confiuential Business Infoimation (CBI) is uefineu when it is useu to
keep the composition of fiactuiing agents confiuential, anu when uisclosuie occuis. Foi
example, BLN has been ciiticizeu foi its uiaft iule iegaiuing gas piouuction on public lanus
because it iequiies piouuceis to ieveal theii fiactuiing agents only aftei uiilling has begun.

2u
The 0TA iepoit gave the initial finuings of compiehensive multi-yeai ieseaich to
measuie wheie anu how much methane is being ieleaseu acioss the natuial gas supply
chain. Baseu on uiiect measuiements at 1Su piouuction sites with 478 wells, it concluueu
that the majoiity of the sampleu hyuiaulically fiactuieu well completions hau equipment in
place that ieuuceu methane emissions by 99%, oi 97% lowei than estimates issueu by EPA
in Apiil 2u1S. The stuuy founu that methane emissions fiom ceitain types of pneumatic
uevices at piouuction sites weie Su% to seveial times highei than cuiient EPA estimates.
Total methane emissions fiom all souices measuieu in the stuuy weie compaiable to EPA's
most iecent estimates. 0ngoing ieseaich is scheuuleu to piouuce 16 iepoits by the enu of
2u14, each publisheu in peei-ievieweu science jouinals. Noie than 9u univeisities,
scientists, ieseaich facilities anu natuial gas companies aie involveu.

21
See the PresiJents Climote Action Plon anu speech, }une 2u1S, which calls foi
stiengthening Ameiica's position as the woilu leauei in piouucing clean natuial gas anu
continuing the piogiess achieveu in ieuucing caibon emissions with iesponsible
piouuction anu use of this iesouice.

22
Some of the uiiect quotes fiom the IEA analysis aie "the climate goal of limiting waiming
to 2
o
C is becoming moie uifficult anu moie costly with each yeai that passes"; "No moie
than one-thiiu of pioven ieseives of fossil fuels can be consumeu piioi to 2uSu if the woilu

Poweiing Foiwaiu
186

is to achieve the 2
o
C goal, unless caibon captuie anu stoiage (CCS) is wiuely ueployeu"; anu
the "pace of (CCS) ueployment iemains highly unceitain". The IEA says natuial gas
constitutes 1S% of the woilu's pioven fossil eneigy ieseives. It also concluues, "natuial gas
is the only fossil fuel foi which global uemanu giows in all scenaiios, showing that it faies
well unuei uiffeient policy conuitions".

2S
Nembeiship in the institute coulu go well beyonu the customaiy stakeholueis in the
national eneigy conveisation. They might iange fiom feueial agencies with uIS anu
satellite capabilities to Engineeiing Extension Seivice offices that help state, city anu
county planneis acquiie infoimation anu tools to uo a bettei job at lanu-use planning anu
othei issues ielateu to the local impacts of natuial gas piouuction.

24
The Auministiation alieauy is builuing ieseaich collaboiations among feueial agencies.
B0E, EPA anu the Bepaitment of the Inteiioi signeu a Nemoianuum of Agieement to
uevelop multi-agency ieseaich on the highest-piioiity questions associateu with "safely
anu piuuently ueveloping unconventional gas anu tight oil ieseives."

2S
An example of cutting euge state policy tiacking is the Auvanceu Eneigy Legislation
TRACKER uevelopeu by CNEE. An example of exemplaiy state policy: In late Nay 2u1S, the
Illinois Legislatuie appioveu a hyuiaulic fiactuiing iegulatoiy act that coulu become a
mouel foi othei states. The bill was uevelopeu with input fiom inuustiy, laboi gioups,
enviionmentalists anu agiicultuiists. Bespite iesistance fiom opponents conceineu about
pollution anu watei iesouices, it won oveiwhelming, bipaitisan suppoit in both houses,
with 16u lawmakeis voting "yes" anu only 12 voting "no". Among othei piovisions, the bill
iequiies public uisclosuie of chemicals useu in fiactuiing anu compulsoiy testing of watei
befoie anu aftei a fiactuiing opeiation. Its appioval followeu the legislatuie's iejection of
two bills that woulu have imposeu moiatoiia on hyuiaulic fiactuiing.

26
As the AFL-CI0 explains, "when oui eneigy infiastiuctuie is alloweu to uecay, it becomes
a thieata public safety thieat as shown by natuial gas explosions in Califoinia anu
Kansas City, an enviionmental thieat both in teims of toxic leaks anu the ielease of
methane anu othei poweiful agents of global waiming, anu an economic thieat as the
efficiency of oui uomestic eneigy piouuction is uiminisheu. In Nassachusetts alone,
pipeline leakage is estimateu to cost natuial gas iatepayeis $4u million pei yeai. As a iesult
of allowing oui pipeline infiastiuctuie to uecay, leaks fiom pipelines have become a majoi
souice of gieenhouse gas emissions, anu a totally pieventable one. The AFL-CI0 suppoits
the expansion of oui pipeline infiastiuctuie anu a much moie aggiessive appioach to the
iepaii of oui moie than 2.S million miles of existing pipelines. Repaii anu builu out of the
natuial gas pipeline system alone has been estimateu by the INuAA Founuation as likely to
cieate, on aveiage, 12S,uuu jobs a yeai between now anu 2uSS."

27
Last yeai, foi example, Pew Chaiitable Tiusts iepoiteu that the 0hio Bepaitment of
Natuial Resouices tiipleu the size of its oil anu gas team by hiiing 7u new inspectois.
Because of buuget cuts, the state paiu foi the new inspectois with a "huge inciease" in fees

Poweiing Foiwaiu
187

collecteu fiom uiilling applications. Shoitages of inspectois also have been an issue foi
pipeline safety, as noteu elsewheie in this iepoit.

28
The Feueial Auvisoiy Committee Act (S0SC App.2) appeais to allow the Piesiuent to
convene such a gioup if its puipose is to obtain infoimation oi viewpoints fiom inuiviuuals
iathei than fiom the gioup acting collectively.

29
The Piesiuent anu Secietaiy of Eneigy shoulu consiuei ienaming the NPC to a) ieflect
that its mission is to auvise the Secietaiy on issues ielateu to natuial gas as well as oil; b)
that it is a Feueial Auvisoiy Committee iathei than an oil inuustiy tiaue association; anu c)
that its 2uu membeis iepiesent business, public inteiest oiganizations, Native Ameiicans,
the finance community anu acauemia as well as the gas anu oil inuustiies.

Su
Theie cuiiently aie seveial excellent examples of this collaboiative ieseaich, incluuing a
watei quality stuuy sponsoieu by a natuial gas company in Coloiauo, anu the inuustiy-
sponsoieu stuuy of methane emissions by the Enviionmental Befense Funu.

S1
ueoige Nitchell, who uieu in }uly 2u1S at the age of 94, was the engineei who uevelopeu
uiiectional uiilling - the technique that has ievolutionizeu the natuial gas inuustiy by
allowing uiilling to bianch out in seveial uiiections unueigiounu fiom a single wellheau.
Be also was a philanthiopist who investeu heavily in conseivation.

S2
Congiess establisheu the Nalcolm Baluiige National Quality Awaiu in 1987 as "the
highest level of national iecognition foi peifoimance excellence that a 0.S. oiganization can
ieceive." Nanufactuieis, small businesses, health caie anu euucational oiganizations, non-
piofits anu goveinment agencies aie eligible. As many as 18 awaius aie given each yeai.
The awaiu is oveiseen by the Baluiige Peifoimance Excellence Piogiam at the Bepaitment
of Commeice's National Institute of Stanuaius anu Technology (NIST).

SS
The awaiu shoulu be contingent on iecipients iemaining in compliance with all
enviionmental iegulations with no violations foi at least five yeais. The awaiu is intenueu
to give public iecognition to companies leauing the way on iesponsible gas uevelopment
anu make that leaueiship moie visible to the public.

S4
STR0NuER is a non-piofit, multi-stakeholuei oiganization that assists states in
ueveloping enviionmental iegulations foi the exploiation, uevelopment anu piouuction of
oil anu natuial gas. STR0NuER seeks to euucate anu pioviue seivices foi continuous
impiovement of iegulatoiy piogiams anu inuustiy piactices. The ieview piocess benefits
fiom the involvement of state iegulatois, inuustiy paiticipants, anu Nu0s.

SS
Subpait W is a gieenhouse gas iepoiting iule foi petioleum anu natuial gas Systems.
EPA's position is that the iule "will complement effoits to ieuuce methane emissions
thiough the Natuial uas STAR piogiam."

Poweiing Foiwaiu
188

S6
The amount of watei useu in hyuiaulic fiactuiing vaiies acioss anu within shale
piouucing iegions. A iecent stuuy of watei use in five shale-piouucing iegions (citeu in
}ISEA, Noturol 6os onJ tbe Tronsformotion of tbe 0.S. Fnerqy Sector: Flectricity, at 71-72)
founu that aveiage watei use iangeu fiom 1.1 million to 4.8 million gallons pei well.
Bowevei, the oveiall amount of watei useu in gas piouuction incluuing hyuiaulic
fiactuiing is small compaieu to othei watei uses such as agiicultuie, manufactuiing anu
municipal watei supply. 0ne stuuy of the life-cycle watei use of uiffeient fuels useu in
electiicity geneiation founu that while theie aie many vaiiables incluuing the methou of
gas extiaction, the life-cycle watei consumption foi natuial gas is consiueiably less than foi
coal, nucleai fuels anu concentiating solai powei, anu significantly moie than ienewable
technologies such as solai photovoltaics anu winu tuibines. In auuition, watei use becomes
a big issue in uiy aieas of the countiy, uespite the ielatively small consumption of natuial
gas piouuction. In Coloiauo, foi example, eneigy company puichases of watei iights have
been contioveisial with Westein Resouice Auvocates citing public iecoius that show
eneigy companies as of 2uu9 weie entitleu to uiveit moie than 6.S billion gallons of watei
a uay uuiing peak Westein iivei flows, as well as iights to stoie enough watei to supply
metio Benvei foi six yeais. Foi moie infoimation about the Coloiauo expeiience, go heie,
heie anu heie.

S7
The Piesiuent's Council of Auvisois anu Science anu Technology has iecommenueu the
uevelopment of a QER.

S8
An example of the eneigy-watei-foou nexus is occuiiing in Coloiauo, wheie natuial gas
piouuceis aie paying faimeis to use iiiigation uitches to tianspoit watei to well sites. Foi
moie uetaileu exploiations of the ielationship between eneigy piouuction anu watei
iesouices, see these iepoits by the uoveinment Accountability 0ffice. Watei has become so
ciucial an issue in some paits of the 0niteu States that one paiticipant in the CNEE uialogue
suggesteu that the Auministiation launch a Quauiennial Watei Review. Anothei suggesteu
that the National Reseaich Council coulu conuuct a moie fiequent analysis of these issues.

S9
0ne oiganization explains the social license to opeiate in this way: "The iesouice sectoi
is geneially accepteu by the public at laige because of the iole it plays: theie can be no
uoubt as to the histoiic iole the natuial iesouice inuustiy has playeu in the auvancement of
societies neeus anu well-being, anu the economic giowth anu inuustiialization of specific
countiies. Bowevei, at the level of inuiviuual piojects, this acceptance is neithei automatic
noi unconuitional. Touay, theie is the neeu to gain anu maintain the suppoit of the people
that live anu woik in the aiea of impact anu influence of any given pioject - to have the
Social License to 0peiate. Theie is ample eviuence that a failuie to gain anu maintain this
Social License can leau to conflict, uelays oi cost foi the pioponents of a pioject."

4u
See CNEE Auvanceu Eneigy Legislation Tiackei.

41
Stakeholueis paiticipating in the CNEE uiscussion uisagieeu on whethei sufficient uata
exist on gas piouuction anu uistiibution. Some contenueu that theie aie ample uata, but

Poweiing Foiwaiu
189

scatteieu anu geneially not unueistoou by the public. 0theis felt stiongly that moie uata
aie neeueu on issues such as unintentional methane emissions. The Auministiation's
position shoulu incoipoiate both views: i.e., that existing uata shoulu be bettei utilizeu anu
that uata gaps shoulu be iuentifieu anu filleu. In auuition, moie usei-fiienuly anu intuitive
ways of communicating metiics, uata anu peifoimance evaluations aie neeueu to inciease
public infoimation anu confiuence in inuustiy piactices.

42
The Alvaiez anu WRI stuuies citeu in Enunote XvIII both concluueu that a 1% leakage
iate woulu ensuie that life-cycle gieenhouse gas emissions fiom natuial gas have a lowei
caibon footpiint than othei fossil fuels.

4S
0ne expeit in the CNEE iounutable iecommenueu that this section of the papei be
ueleteu, calling fuithei constiaints on eneigy uevelopment on feueial lanus a "veiitable
hoinet's nest". Be notes: "Nany in inuustiy believe that uevelopment on public lanus touay
suffeis fiom 'paialysis by analysis' anu that the BLN iegulations will pioviue little of new
value while incieasing the papeiwoik anu analytical buiuen."

44
Appiopiiations foi PBNSA aie offset almost entiiely with usei fees. 0nuei the law,
PBNSA may assess only natuial gas tiansmission pipelines foi usei fees to funu the cost of
its natuial gas pipeline safety piogiam, even though a steauily incieasing poition of the
PBNSA buuget is ueuicateu to giants to the states to funu theii iegulation of natuial gas
uistiibution pipeline safety. This cieates a tension that inuustiy leaueis feel must be
auuiesseu in cieating a sustainable funuing mechanism foi PBNSA.

4S
As the Congiessional Reseaich Seivice (CRS) notes in its }anuaiy 2u1S iepoit on pipeline
safety anu secuiity, these aie key consiueiations in builuing public suppoit foi new
infiastiuctuie. Accoiuing to CRS, "0ne iesult of public concein about pipeline safety has
been to pievent new pipeline siting in ceitain localities anu to inciease pipeline
uevelopment time anu costs in otheis." (p. 2S) Theie aie neaily half million miles of
pipelines moving natuial gas, oil anu hazaiuous liquius acioss the 0niteu States. While
pipeline ieleases have causeu fewei fatalities than othei methous of tianspoiting piouucts
(p. 2) anu theie have been no teiioiist attacks on the system so fai, the Feueial
uoveinment iepoits that Al Qaeua has specifically citeu the pipeline infiastiuctuie as a
taiget foi teiioiists in the 0.S. Theie is "wiuespieau anu vulneiable to acciuents anu
teiioiist" attacks, CRS concluues. Anu as mentioneu elsewheie in this papei, unintenueu
leaks in the gas pipeline system can unueimine the auvantage of natuial gas ovei othei
fossil fuels as a iesouice that can help ieuuce 0.S. gieenhouse gas emissions.

46
The uoveinment Accountability 0ffice (uA0) issueu a iepoit in Febiuaiy 2u1S that
uetails many of the complexities of the peimitting piocess anu iepoiteu that state anu
feueial agencies, iepiesentatives of the gas inuustiy anu public inteiest oiganizations
suggesteu that a) a leau agency cooiuinates the feueial, state anu local peimitting piocess
foi intiastate pipelines; b) stakeholueis aie given an effective iole in the peimitting
piocess; c) planning tools be pioviueu to help companies ioute pipelines to avoiu sensitive

Poweiing Foiwaiu
19u

enviionmental iesouices; u) inuustiy is given the option to funu contiactois oi agency staff
to expeuite peimitting; anu e) oppoitunities aie incieaseu foi public comments. uA0
iepoiteu that the Bepaitments of Agiicultuie anu Befense geneially agieeu with its
finuings, while othei agencies hau no comment.

47
AuA has submitteu this anu the following thiee iecommenuations to the 0ffice of
Nanagement anu Buuget.

)<"=+%8 U A*1*'+%,

1
Paiticipants in the CNEE iounutable hau a vaiiety of suggestions foi piesiuential
messaging on the changes aheau, peihaps thiough a piesiuential "call to action." 0ne
suggesteu the Piesiuent say, "The tiansition to a 21
st
centuiy powei system is going to cost
some, anu we'ie going to pay foi it ovei time. We can't get theie tomoiiow, but we'ie going
to stait making the tiansition touay." Anothei suggesteu the Piesiuent emphasize that
iepaiiing anu moueinizing Ameiica's powei infiastiuctuie will iequiie significant public
anu piivate investment. Anothei suggesteu that the Piesiuent emphasize how consumeis
have a ciitical iole in incieasing the nation's eneigy efficiency, utilizing clean eneigy
technologies, etc. Anothei paiticipant suggesteu that the Piesiuent help consumeis make a
uistinction between "cheap" anu "affoiuable" eneigy, stating that "affoiuable" is the
nation's goal. Finally, CNEE thinks theie aie oppoitunities foi economic giowth anu goou
jobs in this aiea.

2
FERC explains IS0s anu Regional Tiansmission 0iganizations (RT0s) as follows:
"Inuepenuent System 0peiatois giew out of 0iueis No. 888889 wheie the Commission
suggesteu the concept of an Inuepenuent System 0peiatoi as one way foi existing tight
powei pools to satisfy the iequiiement of pioviuing non-uisciiminatoiy access to
tiansmission. Subsequently, in 0iuei No. 2uuu, the Commission encouiageu the voluntaiy
foimation of Regional Tiansmission 0iganizations to auministei the tiansmission giiu on a
iegional basis thioughout Noith Ameiica (incluuing Canaua). 0iuei No. 2uuu uelineateu
twelve chaiacteiistics anu functions that an entity must satisfy in oiuei to become a
Regional Tiansmission 0iganization."

S
0.S. Eneigy Infoimation Auministiation. Feueial Powei Naiketing Auministiations
opeiate acioss much of the 0niteu States. }une, 2u1S.

4
"Naiketing Plans" oi "Powei Naiketing Pioposals" is the common teim useu in the PNA
community foi the IRP anu cost allocation like piocesses. In this piocess, the PNAs meet
with its customeis to evaluate the neeus of customeis (uemanu foi feueial powei) anu acts
to meet those neeus (cuiient anu inciemental supply) by ueteimining an allocation of
feueial powei, an allocation of fiim tiansmission iights, ueteimining a cost allocation anu
any inciemental investment iequiiements. Beie is an example of a PNA powei-maiketing
plan (fiom WAPA).

Poweiing Foiwaiu
191

S
FERC uoes not iegulate ietail electiicity sales to customeis; appiove the constiuction,
siting anu iouting of electiic geneiation facilities; oi iegulate municipal powei systems,
feueial PNAs oi most iuial electiic coopeiatives.

6
FERC has S membeis, all of whom must be confiimeu by the Senate. No moie than S can
be fiom the same political paity.

7
The Bepaitment of Eneigy 0iganization Act Section 4uS (91Stat.S86;42
0.S.C.717S) states:
"The Secietaiy may as a mattei oi iight inteivene oi otheiwise paiticipate in any
pioceeuing befoie the Commission. The Secietaiy shall comply with the iules of pioceuuie
of geneial applicability goveining the timing of inteivention oi paiticipation in such
pioceeuings oi activity anu, upon inteivening oi paiticipating theiein shall comply with the
iules of pioceuuie of geneial applicability goveining the conuuct theieof. The inteivention
oi paiticipation of the Secietaiy in any pioceeuings oi activity shall not affect the
obligation of the commission to assuie pioceuuie faiiness to all paiticipants."

8
Tennessee valley Authoiity (TvA) (2u11). Enviionmental anu Eneigy Futuie (Knoxville,
TN: Tennessee valley Authoiity) p. 161.

9
A best-piactices iesouice is 0sing Integiateu Resouice Planning to Encouiage Investment
in Cost-Effective Eneigy Efficiency Neasuies, State & Local Eneigy Efficiency Action
Netwoik, Septembei 2u11.

1u
The teims of six of TvA's nine uiiectois will expiie uuiing Piesiuent 0bama's seconu
teim. When theii teims expiie, uiiectois aie alloweu to iemain on the boaiu until the enu
of the cuiient congiessional session oi until theii successois take office, whichevei comes
fiist.

11
The goveinment opeiates a fleet of moie than 6uu,uuu civilian anu non-tactical militaiy
vehicles, most of them still poweieu by gasoline anu uiesel fuels. E0 1SS14 iequiies
agencies to ieuuce theii petioleum consumption 2% each yeai thiough fiscal yeai 2u2u. In
auuition, Executive 0iuei 1S424 iequiies agencies to puichase plug-in electiic vehicles
when they aie available at ieasonable cost. The ueployment of electiic anu plug-in hybiiu
vehicles in the Feueial uoveinment coulu help shape the piivate vehicle maiket to meet
Piesiuent 0bama's Ev Eveiywheie Challenge goal to make the 0niteu States the fiist nation
to piouuce plug-in electiic vehicles as affoiuable as conventional gasoline-poweieu
vehicles within 1u yeais. Plug-in anu ueuicateu electiic vehicles can inciease uemanu on
the nation's electiic giiu, but also holu piomise of pioviuing new utility seivices (electiic
chaiging stations) anu uecentializeu stoiage of electiic powei.

12
In one of the eaily examples, Su feueial agencies in the Benvei iegion committeu in 2uu9
to puichase 1u megawatts of winu powei fiom theii utility. It was the laigest feueial

Poweiing Foiwaiu
192

piocuiement of ienewable eneigy at the time. Touay, feueial agencies in Noithein
Califoinia aie collaboiating on combineu puichases of iooftop photovoltaic panels to
achieve bettei economies of scale.

1S
BoB spent $4 billion in 2u11 foi electiicity to powei its Suu,uuu builuings anu fuel its
16u,uuu vehicles. As the laigest eneigy consumei in the Feueial uoveinment, BoB is
iesponsible foi a uispiopoitionate shaie of the goveinment's gieenhouse gas emissions. In
2uu8, the Befense Science Boaiu waineu that the militaiy's ciitical missions weie at iisk
because of theii vulneiability to powei uisiuptions. Now BoB is implementing aggiessive
eneigy efficiency anu ienewable eneigy iequiiements anu goals in iesponse to Congiess,
the White Bouse anu its own insights into how these technologies will impiove militaiy
effectiveness. The Aimy launcheu a "net zeio" piogiam in 2u11 in which five of its
installations will become net-zeio eneigy facilities by 2u2u. The Aimy's goal is to have 2S
"net-zeio" installations by 2uSu. BoB is builuing micio-giius, mini-giius anu uistiibuteu
eneigy systems at its fielu anu uomestic installations to insulate them fiom outages in the
civilian giiu, eithei by opeiating inuepenuently of the civilian giiu oi by islanuing. Among
othei technical auvances foi uistiibuteu geneiation in the piivate sectoi, the Rocky
Nountain Institute has uevelopeu an Electiicity Bistiibution Evaluatoi (EBuE) mouel, a
NATLAB-baseu simulation tool to compiehensively assess the uistiibuteu eneigy iesouice
(BER) value pioposition in uiffeient iegulatoiy anu utility business mouel enviionments
baseu on a uetaileu assessment of the technical anu opeiational implications. RNI says its
mouel has the flexibility to be auapteu foi use by many uiffeient utilities anu iegions.

14
NIST was chaigeu by the Eneigy Inuepenuence anu Secuiity Act of 2uu7 with ueveloping
technical stanuaius to cooiuinate the woik of utilities, manufactuieis, equipment testeis
anu iegulatois on the uevelopment of a smait giiu. It has issueu a "Fiamewoik anu
Roaumap foi Smait uiiu Inteiopeiability".

1S
Foi iecommenuations on iisk management fiamewoiks foi climate anu eneigy secuiity,
see Beqrees of Risk ieleaseu in 2u11 by Thiiu ueneiation Enviionmentalism. The iepoit is
highly iegaiueu by the 0.S. uefense anu intelligence establishments as a guiue to
iesponsible management of contempoiaiy iisks ielateu to climate uisiuption.

16
Climate scientists geneially avoiu attiibuting specific weathei events such as Buiiicane
Sanuy to climate change, but many of the extieme weathei events the 0niteu States is
expeiiencing touay coiiesponu closely with the pieuicteu impacts of climate uisiuption.
Biought, floous, sea-level iise anu incieasing stoim intensity aie cuiient, not futuie, iisks.
Foi moie infoimation, see the uoveinment Accountability 0ffice's iepoit on Criticol
lnfrostructure Protection, the Congiessional Reseaich Seivice's }anuaiy 2u1S iepoit, anu
the iepoit B0E issueu in }uly 2u1S. Also see the ielateu uiscussion anu iecommenuations
in CNEE's white papei on natuial gas piouuction.

17
The 0.S. ueological Seivice iepoits that theimoelectiic powei accounteu foi neaily half
of the nation's watei use in 2uuS. Although significant amounts aie ietuineu to suiface

Poweiing Foiwaiu
19S

wateis anu become available foi othei uses, watei withuiawals anu contamination aie
substantial in the life cycle of fossil eneigy piouuction anu use. The oiganization Rivei
Netwoik has calculateu that electiicity piouuction by coal, nucleai anu natuial gas powei
plants is the fastest-giowing use of fieshwatei in the 0niteu States, accounting foi about
half of all fieshwatei withuiawals fiom iiveis, moie than any othei economic sectoi.

18
Foi a moie uetaileu explanation of these uevelopments, see lnJustrywiJe Cybersecurity
StonJorJs Fmerqinq Tbrouqb voluntory Iromework, }une 12, 2u1S, by Ahien Tiyon anu
Cozen 0'Connei.

19
Foi moie infoimation on cybeisecuiity initiatives at NIST, see
http:www.nist.govelsmaitgiiucybeisg.cfm. Foi infoimation about cybeisecuiity woik
at B0E's 0ffice of Electiicity Beliveiy anu Eneigy Reliability, see
http:eneigy.govoeseivicescybeisecuiitynesco. Foi an inventoiy of cybeisecuiity
piogiams in the feueial goveinment anu non-goveinment oiganizations, see
http:www.utilisec.comiesouices.html.

2u
The uA0 iepoiteu that in its iesponse to the assessment, "the Executive 0ffice of the
Piesiuent agieeu that moie neeus to be uone to uevelop a coheient anu compiehensive
stiategy on cybeisecuiity but uiu not believe piouucing anothei stiategy uocument woulu
be beneficial." The uA0 ieplieu, "An oveiaiching stiategy uocument that incluues
milestones anu peifoimance measuies, cost anu iesouices, ioles anu iesponsibilities, anu
linkage with othei key stiategy uocuments woulu pioviue a moie effective fiamewoik foi
implementing cybeisecuiity activities." Pioblems with feueial cybeisecuiity policies
appeai to be peisistent. Two yeais ago, the uA0 conuucteu a similai stuuy of cybeisecuiity
piogiams anu concluueu that none of the 24 agencies it stuuieu it stuuieu hau implementeu
full oi effective secuiity piogiams.

21
Foi moie infoimation, see the Westein Resouice Auvocates' iepoit Fvery Brop Counts,
which auuiesses watei foi powei plant cooling.

22
Communities expenu consiueiable eneigy to move anu tieat watei, with auveise impacts
on theii buugets anu on aii quality. 0ne piomising innovation involves zeio-net-eneigy
wastewatei tieatment. uiesham, 0iegon, foi example, has set the goal of making its
tieatment plant a net-zeio-eneigy facility by next yeai.

2S
This iecommenuation is baseu on a pioposal by the Westein uoveinois Association in its
}une 2u12 iepoit, Heetinq Renewoble Fnerqy Torqets in tbe West ot leost Cost: Tbe
lnteqrotion Cbollenqe.

24
A iecent multi-lab, multi-oiganization stuuy leu by the National Renewable Eneigy
Laboiatoiy concluueu that with technologies available touay anu a moie flexible electiic
system, ienewable iesouices coulu supply 8u% of the nation's electiic powei uemanu by
miu-centuiy.

Poweiing Foiwaiu
194

2S
See Procticinq Risk-Awore 0tility Requlotion, Ceies, Apiil 2u12, anu Tbe Benefits of
Flectric Tronsmission: lJentifyinq onJ Anolyzinq tbe volue of lnvestments, The Biattle uioup,
}uly 2u1S, on how tiansmission planning fiequently omits analysis of majoi categoiies of
benefits anu how that can change.

26
Ameiica's Powei Plan, piesents a compiehensive policy fiamewoik to suppoit electiic
powei sectoi tiansition to clean eneigy.

27
Seveial of these iueas aie uiawn fiom Ron Lehi's chaptei of Ameiica's Powei Plan, 0tility
onJ Requlotory HoJels for tbe HoJern Fro.

28
Ibiu anu RII0.

29
0ne paiticipant in the CNEE uialogue iecommenueu that FERC uevelop an algoiithm on
public goou. 0thei appioaches aie uiscusseu by ieseaicheis at Lawience Beikeley National
Laboiatoiy in Tronsmission Benefit uontificotion, Cost Allocotion onJ Cost Recovery, LBNL,
2uu9.

Su
See Enu Note viii.

S1
In the past, B0E has collaboiateu with FENA to stockpile poitable photovoltaic systems
to powei communications, meuical seivices, ciitical goveinment opeiations anu fiist
iesponueis uuiing uisastei iesponse.

S2
The IAC piogiam ueploys teams of univeisity engineeiing faculty anu giauuate stuuents
to pioviue no-cost on-site eneigy piouuctivity anu pollution pievention assessments foi
small anu meuium manufactuiing facilities. The teams follow the assessments with uetaileu
iecommenuations to the owneis of the facilities. Twenty-foui univeisities cuiiently
paiticipate in the piogiam.

SS
EPA has conuucteu tiaining on aggiegateu puichasing as a way to captuie significant
eneigy, enviionmental anu financial benefits. 0hio anu Nassachusetts have passeu
legislation that allows local goveinments to piocuie electiicity on behalf of the iesiuents of
theii communities. B0E encouiages the piactice anu cites seveial othei examples of wheie
aggiegateu ienewable eneigy puichases aie being useu in the 0niteu States.

S4
The feueial Qualifications Review Boaiu evaluates all potential Senioi Executive Seivice
employees in the goveinment baseu on theii ability to seive in executive ioles. Technical
qualifications typically aie not pait of the evaluations.

SS
Cuiient issues involving feueial use of ESPCs aie uetaileu in CNEE's white papei on
eneigy piouuctivity.

Poweiing Foiwaiu
19S

S6
0ne example is the Euison Electiic Institute's uisastei planning piogiam.

S7
NASE0 woiks with State Eneigy 0ffices on powei system iesilience. It uevelopeu "State
Eneigy Assuiance uuiuelines" in collaboiation with NAR0C anu B0E's 0ffice of Electiicity
Beliveiy anu Eneigy Reliability.

)<"=+%8 6 A*1*'+%,

1
EPAct also uiiecteu B0E to pioviue public infoimation anu uata on the benefits of using
alteinative fuels in motoi vehicles anu to establish a voluntaiy piogiam to cooiuinate
effoits between local fleet manageis, fuel pioviueis, vehicle manufactuies, anu othei
stakeholueis to ueploy uomestic ieplacement fuels in the tianspoitation sectoi. This
iesulteu in the B0E's "Clean Cities" piogiam anu the Alteinative Fuels Bata Centei (AFBC),
both of which aie uiscusseu in this papei.

2
Piesiuent Bush stateu that "Ameiica is auuicteu to oil" in his 2uu6 State of the 0nion
auuiess.

S
That piojection is maue by the Inteinational Eneigy Agency in its Woilu Eneigy 0utlook
2u12 (WE0 2u12): "By aiounu 2u2u, the 0niteu States is piojecteu to become the laigest
global oil piouucei (oveitaking Sauui Aiabia until the miu-2u2us) anu staits to see the
impact of new fuel-efficiency measuies in tianspoit. The iesult is a continueu fall in 0S oil
impoits to the extent that Noith Ameiica becomes a net oil expoitei aiounu 2uSu.The
0niteu States, which cuiiently impoits aiounu 2u% of its total eneigy neeus, becomes all
but self-sufficient in net teims - a uiamatic ieveisal of the tienu seen in most othei eneigy
impoiting counties" (WE0 2u12, Executive Summaiy, pp. 1-2).

4
Annual Eneigy 0utlook 2u1S, 0S EIA, p. S7.

S
Ibiu, p. 4.

6
Expeits engageu by CNEE consiuei EIA's estimate to be conseivative. They note that othei
souices pioject highei biofuel giowth.

7
Legislation anu executive oiueis have iequiieu feueial fleets to puichase AFvs since the
Eneigy Policy Act of 1992. That law manuateu that 7S% of light-uuty vehicles puichaseu by
feueial fleets must by AFvs. Executive 0iuei 1S42S, issueu in 2uu7, iequiies agencies with
2u oi moie vehicles in theii fleets to cut theii petioleum consumption by 2% each yeai anu
to inciease theii AF use by 1u% annually. E0 1SS14, issueu by Piesiuent 0bama in 2uu9,
iequiies feueial agencies to ieuuce the petioleum use of theii fleets by at least 2% annually
thiough 2u2u. The Eneigy Inuepenuence anu Secuiity Act of 2uu7 also incluueu
iequiiements ielateu to AFvs. Foi uetails, see the "Laws anu Regulations" section on the
AFBC website.

Poweiing Foiwaiu
196

8
The ESLC is a function of Secuiing Ameiica's Futuie Eneigy, a nonpaitisan piivate-sectoi
oiganization that focuses on ieuucing the nation's oil impoits. Nembeis of the ESLC aie
high-level coipoiate officeis anu ietiieu senioi militaiy leaueis.

9
An impoitant benefit of this analysis woulu be to minimize appaient conflicts in feueial
policies that evolve fiom an "all of the above" eneigy stiategy. While that stiategy cieates
beneficial competition among AFs anu AFvs, it also can piouuce policies that seem in
conflict with one anothei. An example is EPA's pioposeu iule to tighten its limits on sulfui
in gasoline staiting in 2u17. The iule woulu help impiove aii quality anu public health
while ieuucing smog by iequiiing passengei cais anu tiucks to captuie moie pollutants in
theii catalytic conveiteis. While majoi enviionmental gioups aie on iecoiu in suppoit of
the iule, one New Yoik Times analyst obseiveu that incieaseu petioleum piouuction in the
0.S. combineu with impiovements in tiauitional inteinal combustion engines "aie likely to
help the conventional automobile suivive against competition fiom vehicles poweieu by
electiicity, natuial gas anu othei cleanei alteinatives." A foimei EPA official says the new
iule "simply extenus inuefinitely the viability of tiauitional automobile engines."

1u
In its oiiginal foim, the Inuustiies of the Futuie piogiam woikeu with the national tiaue
associations of the countiy's most eneigy intensive inuustiies to uefine a vision foi each
inuustiy's futuie anu the steps to achieve it. The iesults helpeu infoim B0E's ieseaich. As
applieu heie, stakeholueis woulu help uefine the ieseaich, technical assistance, baiiiei
iemoval anu othei steps neeueu to achieve the full potential of the selecteu fuels.

11
Examples of analyses: Alternotive Iuel lnfrostructure Fxponsion: Costs, Resources,
ProJuction Copocity, onJ Retoil Avoilobility for low-Corbon Scenorios, National Renewable
Eneigy Laboiatoiy foi the 0.S. B0E 0ffice of Eneigy Efficiency anu Renewable Eneigy
Tianspoitation Eneigy Futuie Seiies, Apiil 2u1S. Society of Automotive Engineeis, }oshi
et.al., 2uuu; Aii anu Waste Nanagement Association, NacLean et.al., 2uuu; 0iegon Low
Caibon Fuel Stanuaius Repoit 0iegon Bepaitment of Enviionmental Quality, 2u11; 0S B0T
bibliogiaphy at its Tianspoitation anu Climate Change Cleaiinghouse; 0S B0T
methouology foi analyzing uBu emissions fiom tianspoitation; Societal lifecycle costs of
cais with alteinative fuelsengines, 0guen et.al, Piinceton Enviionmental Institute, 2uu4.

12
0thei tools incluue EPA's social cost of caibon methouology; the Feueial Bighway
Auministiation's methou foi assessing infiastiuctuie investments; anu piotocols
uevelopeu by othei countiies such as victoiia's methou foi iuentifying the exteinal costs of
tianspoitation fuels.

1S
As pioposeu by the Eneigy Secuiity Leaueiship Council, "This iequiies a pivot in focus
fiom a stiuctuie aligneu by technology to one aligneu by functional enu-uses such as
tianspoitation, powei geneiation anu ueliveiy, anu builuings. This will enable
policymakeis to compaie fuels anu technologies moie uiiectly baseu on theii iespective
meiits foi a given use. These meiits, in tuin, can be assesseu accoiuing to theii capacity to

Poweiing Foiwaiu
197

stiengthen 0.S. eneigy secuiity." See A Notionol Stroteqy for Fnerqy Security: Eornessinq
Americon Resources onJ lnnovotion, Secuiing Ameiica's Futuie Eneigy anu the Eneigy
Secuiity Leaueiship Council, 2u1S.

14
As explaineu by the Natuial Resouices Befense Council: "TWPs have been pioposeu by
Alvaiez et al. as an alteinative to conventional uWP analyses to bettei explain the time-
uepenuent iauiative foicing (oi climate influence) of uiffeient fuel-technology options.
While uWPs have been a valuable tool to compaie the iauiative foicing of inuiviuual gases
ovei set time hoiizons, they aie not sufficient when thinking about common fuel switching
scenaiios that involve multiple uBus with uistinct atmospheiic lifetimes. Foi example, the
methane lost uuiing the piouuction anu ueliveiy of natuial gas uiminishes the C02 benefits
of using natuial gas as a fuel. A seconu limitation of uWP-baseu compaiisons is that they
only consiuei the iauiative foicing of single emission pulses, which uo not ieflect the
climatic consequences of ieal-woilu investment anu policy uecisions: these aie bettei
simulateu as emission stieams ovei multiple yeais. Foi example, while an emission pulse
can ieasonably iepiesent the effect of ienting a natuial gas cai foi one uay, conveiting a
coipoiate fleet of cais fiom gasoline to CNu is bettei iepiesenteu by a multi-yeai stieam of
emissions. TWPs use the well-establisheu science of iauiative foicing useu to calculate
uWP, but they package the iesults in a moie tianspaient way."

1S
Feueial agencies (excluuing the Postal Seivice) spenu about $S billion annually to
acquiie, opeiate anu maintain some 4Su,uuu civilian anu non-tactical militaiy vehicles.

16
Foi example, B0E launcheu a ieseaich piogiam last yeai - "Nethane 0ppoitunities foi
vehiculai Eneigy" (N0vE) - to uevelop innovative technologies that inciease the use of
natuial gas fuels anu vehicles. The piogiam consists of 1S ARPA-E ieseaich piojects
totaling $Su million.

17
ESLC, 2u12

18
The Auministiation says that EPA anu B0T will continue a national piogiam to boost fuel
economy anu ieuuce gieenhouse gases fiom new light-uuty anu heavy-uuty vehicles. It
says the fuel economy anu uBu stanuaius foi light uuty vehicles alone will save some 12
billion baiiels of oil anu pievent six billion metiic tons of gieenhouse gas emissions ovei
the lifetimes of the vehicles solu thiough mouel yeai 2u2S.

19
See http:www.aib.ca.govmspiogonioauoptionnoxoptionnox.htm,
http:www.aiiclim.oigaciunewscalifoinia-auopt-new-ultia-low-nox-stanuaius anu
http:www.aib.ca.govboaiubooks2u1S12121Sstait.puf

2u
See http:www.stuimaninuustiies.comNewstabiu146poststuiman-inuustiies-
uemonstiates-bieakthioughs-in-natuial-gas-engine-efficiency-anu-emissions-foi-the-
califoinia-eneigy-commission-piei-piogiamBefault.aspx

Poweiing Foiwaiu
198

21
See http:www.aib.ca.govfuelslcfslu_tables_11282u12.puf

22
http:www.epa.govotaqclimateuocuments42uf11uS1.puf, page 2

2S
The stuuy uetaileu 0.S. biomass feeustock potential nationwiue, incluuing the ability to
piouuce one billion uiy tons of biomass iesouices each yeai without negatively affecting
the piouuction of foou, feeu anu fibei ciops. The stuuy concluueu that the 0.S. has the
iesouices to piouuce about 8S billion gallon of biofuels, enough to ieplace Su% of the
nation's petioleum consumption assuming that bioiefineiy capacity kept pace.

24
See the 0N's Climate-Smait Agiicultuie Souicebook anu its Bioeneigy toolkit. The foou
vs. fuel uebate is one of the aiguments useu by opponents of the RFS, pait of a uebate
unueiway in Congiess about whethei the RFS shoulu be iepealeu. Citing 0SBA iepoits of
high coin stocks this yeai, the Renewable Fuels Association, which suppoits the RFS, calls
0SBA's coin iepoit the "last nail in the coffin" of the aigument that fuel piouuction,
paiticulaily of coin foi ethanol, iaises foou piices. Bowevei, a high yielu yeai foi coin in
2u1S uoes not guaiantee similai yielus in the futuie.

2S
Foi example, "Seveial micio- anu macio-level consiueiations neeu to be assesseu. 0n a
micio scale, the local impacts of the inuiviuual bio-iefineiy anu its supply chain neeu to be
consiueieu. 0n the macio scale, the impacts of the biofuels inuustiy as a whole on
agiicultuial maikets, aiable lanu anu high-quality watei must be consiueieu. Assessing the
micio-scale impacts iequiies meticulous accounting anu auuiting, leauing to auuitional cost
foi piouucing ceitifieu sustainable fuels. The macio-scale impacts aie moie uifficult to
ueteimine anu cannot be uiiectly contiolleu by the inuiviuual piouuceis of biofuels"
(Paikei, et al., 2u11).

26
The NAS stuuy is "iuentifying the maiket baiiieis slowing the puichase of electiic
vehicles.anu hinueiing the ueployment of suppoiting infiastiuctuie in the 0niteu
States. The stuuy will uiaw on input fiom state utility commissions, electiic utilities,
automotive manufactuieis anu supplieis, local anu state goveinments, the Feueial Eneigy
Regulatoiy Commission, feueial agencies, anu otheis, incluuing pievious stuuies peifoimeu
foi B0E, to help iuentify baiiieis to the intiouuction of electiic vehicles, paiticulaily the
baiiieis to the ueployment of the necessaiy vehicle chaiging infiastiuctuie, anu
iecommenu ways to mitigate these baiiieis. The stuuy will focus on light-uuty vehicles but
also uiaw upon expeiiences with Evs in the meuium- anu heavy-uuty vehicle maiket
segment."

27
Such a ioaumap will be timely if EPA allows states to cieuit uBu-cutting electiic vehicle
piogiams in complying with Section 111(u) iegulation of caibon emissions fiom powei
plants - a iecommenuation CNEE has offeieu in othei papeis in this seiies.

28
Fast chaiging technologies use high-voltage BC cuiient to chaige a PEv in as little as 2u
minutes, compaieu to houis foi AC chaiging.

Poweiing Foiwaiu
199

29
0thei ieseaich has concluueu, "unifoimly suppoitive utility policies anu active utility
engagement on a national scale will be ciitical to the expansion of the plug-in electiic
vehicle maiket." See Baumhefnei, Nax, Simon Nui, anu Rolanu Bwang. 2u12. "The
Impoitance of Nouel 0tility Policies foi vehicle Electiification." Flectricity }ournol 2S (S),
}une.

Su
uoiuon, Beboiah, Baniel Speiling, anu Baviu Livingston. 2u12. Policy Priorities for
AJvoncinq tbe 0.S. Flectric vebicle Horket. Tbe Corneqie Popers. Cainegie Enuowment foi
Inteinational Peace.

S1
CRABAs aie ieseaich paitneiships between B0E's National Laboiatoiies anu inuustiies
in which they woik togethei on R&B. No financial awaiu is involveu. Insteau, the lab anu
inuustiy paitnei each contiibute laboi, funuing anu facilities. CRABAs aie one way that
piivate inuustiy can utilize the iesouices anu talents of B0E's 1u labs.

S2
Seveial of B0E's National Laboiatoiies offei technical assistance foi states anu localities.
An example is the multi-lab Technical Assistance Pioject cooiuinateu by NREL.

SS
CNEE will often iefei to "mobility systems" iathei than "tianspoitation systems" to
ieflect that non-vehiculai mobilityfoi example, safe peuestiian anu bicycle
infiastiuctuieshoulu be a key pait of community tianspoitation planning. Non-vehiculai
options aie an impoitant to pioviue access to necessaiy goous anu seivices foi people who
uo not uiive because of age, income, lifestyle choice oi physical uisability.

S4
A multi-moual system pioviues a vaiiety of mobility options that link majoi uestinations,
foi example light iail systems fiom aiipoits to uiban centeis, followeu by public tiansit
systems, then cai-loan, bicycle oi safe peuestiian options in the city. Right sizing iefeis to
selecting fuels anu vehicles that uelivei highest benefits anu lowest total costs while being
appiopiiate foi the function they must peifoim. Cai-shaiing piogiams aie an example. As
2u1S began, neaily 9uu,uuu people in the 0niteu States weie paiticipating in cai-shaiing
piogiams, accoiuing to the 0niveisity of Califoinia Beikeley Tianspoitation Sustainability
Reseaich Centei. In the City of Benvei, wheie one of the most iecent piogiams is
unueiway, commuteis can ient Smait cais by the minute anu take auvantage of paiking
spaces ieseiveu thioughout the uowntown. This option allows commuteis to ieach the city
by mass tiansit anu have complete mobility once they aiiive - a "iight-size" alteinative to
piivate vehicles that auu to congestion anu aii pollution. Bike-shaie piogiams aie anothei
populai option in a giowing numbei of 0.S. cities.

SS
Examples of ieseaich conuuct so fai incluue 0tilizinq Flectric vebicles to Assist
lnteqrotion of lorqe Penetrotions of BistricteJ Pbotovoltoic 6enerotion by Pacific Noithwest
Laboiatoiy anu NIT's StuJy on tbe Iuture of tbe Flectric 6riJ: Cbopter S - Tbe lmpoct of
BistributeJ 6enerotion onJ Flectric vebicles.

Poweiing Foiwaiu
2uu

S6
0ne example of feueial suppoit is the I-7S uieen Coiiiuoi pioject in which 21
oiganizations, incluuing Clean Cities coalitions, collaboiateu in an effoit to establish the
nation's longest biofuels coiiiuoi.

S7
The E0's aviation caibon tax, pait of its caibon tiauing system, uiew consiueiable
contioveisy foi pioposing to impose a tax on aiilines flying to the E0, baseu on 1S% of
theii caibon emissions fiom theii point of oiigin. 0n 0ct. 17, 2u1S, the Euiopean
Commission ieviseu the plan to chaige the tax only foi the uistance an aiiline flies insiue
E0 aii space. While a similai plan foi the 0.S. woulu unuoubteuly be opposeu by the aiiline
inuustiy, it coulu be uesigneu to ieuuce the tax by the amount of caibon cieuits passengeis
puichase on each flight - a policy that woulu encouiage 0.S. aiilines to piomote the use of
cieuits. In tuin, the aiilines coulu consiuei awaiuing passengeis miles foi the cieuits they
puichase.

S8
While uoluen Caiiot Awaius have become common acioss inuustiies, B0E initiateu the
fiist such piogiam in the 0niteu States in 1992 to encouiage the uevelopment anu
successful commeicialization of a "supei efficient iefiigeiatoi." The piogiam eventually
involveu about 2u paitneis incluuing public anu piivate utilities that put up $Su million foi
the winnei-take-all competition. See the case stuuy heie.

S9
Polaiis, foi example, piouuces an all-electiic Rangei utility-style all teiiain vehicle. Aictic
Cat piouuces a twin-cylinuei all teiiain vehicle that iuns on biouiesel.

4u
The Ameiican Clean Skies Founuation (ACSF) was one of the oiganizations involveu in
CNEE's uialogue on AFs anu AFvs. Foi moie uetail on this iecommenuation, see its 0ct. 1,
2u1S, lettei to the 0STRANSC0N Acquisition Biiectoiate.

41
The ACSF iecommenus that agencies "uevelop anu iepoit annual taigets, measuies anu
initiatives foi incieasing the use of alteinative fuels, ieuucing petioleum consumption, anu
loweiing emissions associateu with the tianspoitation caiiiei seivices they piocuie." Foi
moie uetail on the ieasons anu applications of that policy, anu auuitional policy
iecommenuations, see the Founuation's publication, 0il Sbift: Tbe Cose for Switcbinq
IeJerol Tronsportotion SpenJinq to Alternotive Iuel vebicles, August 2u12.

42
The Founuation pieuicts that this contiact will involve expenuituies of between $1uu
million anu $SSu million each yeai uuiing the 2u14-2u18 peiiou. It pioposeu the AF
piefeience in a }une 24, 2u1S, lettei to Acting uSA Auministiatoi Baniel Tangheilini.

4S
The AFBC says 19,41u electiic vehicles can be chaigeu at one time in the 0niteu States if
we count electiic outlets iathei than chaiging stations. That woulu biing the total numbei
of AFv fuelingchaiging sites to 27,1S9.

44
The AFBC website inuicates that these numbeis weie cuiient as of Septembei 2u1S.

Poweiing Foiwaiu
2u1

4S
See the AFBC foi a list of AFv incentives at the feueial level anu by state. Accoiuing to the
Congiessional Reseaich Seivice (CRS), seveial AF anu AFv issues aie befoie Congiess
touay, incluuing potential mouifications to the Renewable Fuels Stanuaiu, how much the
Feueial uoveinment shoulu suppoit an inciease in Nuvs anu Nuv infiastiuctuie, anu the
appiopiiate level of goveinment suppoit foi plug-in electiic vehicles (CRS 7-S7uu, Apiil 4,
2u1S).

46
Some expeits uo not believe that flex-fuel vehicles shoulu be classifieu as AFvs since they
use gasoline. Inueeu, most of them in use touay iely solely on gasoline. CNEE has incluueu
FFvs in the list of AFvs because they aie an alteinative to anu pioviue benefits ovei
vehicles poweieu solely by petioleum fuels anu because, like othei AFvs, theii full
potential ielies on investments in iefueling infiastiuctuie.

47
A significant amount of the gieenhouse gas emissions associateu with LNu anu CNu aie
piouuceu not fiom combustion but fiom the piouuction, tianspoitation anu stoiage of the
gases. Nethane leaks in the supply chain can significantly ieuuce the fuel's caibon benefit.
Recent ieseaich has concluueu that foi natuial gas to achieve a net climate benefit ovei
gasoline-poweieu light-uuty vehicles, methane emissions in the fuel's value chain must be
kept below 1.S% of total piouuction; foi heavy-uuty vehicles, methane emissions must be
kept below 1% of piouuction. A stuuy by the 0niveisity of Texas at Austin, publisheu in
Septembei 2u1S in the Pioceeuings of the National Acauemy of Sciences, concluueu
"Compiesseu natuial gas vehicles coulu piouuce climate benefits on all time fiames if the
well-to-wheels CB4 (methane) leakage weie cappeu at a level 4S-7u% below cuiient
estimates."

48
Aigonne National Laboiatoiy's uREET mouel estimates the life cycle petioleum use anu
uBu emissions of light-uuty vehicles iunning on CNu. The mouel shows that the two most
impoitant factois ueteimining ielative uBu emissions of CNu cais ovei gasoline cais aie
methane leakage of the Nu supply chain anu ielative efficiency of CNu cais vs. gasoline
cais.

49
The New Yoik Times iepoits that seveial majoi 0.S. companies incluuing Cummins anu
0PS aie investing in LNu fuels. The Times gave this assessment of the piospects foi LNu in
the 0.S.: "Though the netwoik is giowing iapiuly, it has a long way to go. As of Nay 2u12,
only SS LNu fueling stations weie in the 0niteu States, moie than two-thiius concentiateu
in Califoinia, along with 1,u47 compiesseu natuial gas stations aiounu the countiy,
accoiuing to the Eneigy Bepaitment. In compaiison, theie weie 1S7,uuu fueling stations
selling gasoline.The feueial Eneigy Infoimation Auministiation last yeai piojecteu that if
enough LNu filling stations weie built anu economic conuitions weie iight, sales of heavy-
uuty natuial gas vehicles coulu inciease to 27S,uuu in 2uSS, equivalent to S4% of new
vehicle sales, fiom 86u in 2u1u. But estimates vaiy. Citigioup iecently foiecast that Su% of
the heavy tiuck fleet woulu shift to natuial gas by the enu of the uecaue, but some in the
tianspoitation inuustiy put that figuie much lowei. 'Natuial gas will be a pait of that play
in commeicial vehicles, but oui view is, it is not going to ieplace uiesel,' saiu Roe C. East,

Poweiing Foiwaiu
2u2

geneial managei of the natuial gas business at Cummins. Be auueu that natuial gas coulu
captuie as much as 1u% of the heavy-uuty tiuck maiket in Noith Ameiica in the next five
yeais. 0ne obstacle is cost. Theie aie some tax incentives, anu the 0bama auministiation
funneleu stimulus money to vaiious piojects.But inuustiy executives say that the
incentives aie not enough to get the system going anu solve what Bill Logue, chief executive
of the FeuEx Fieight Coipoiation, calleu the 'chicken-anu-egg' uilemma, of which comes
fiist, the tiucks oi the stations."

Su
Auuitional infoimation about alteinative fuels anu vehicles as well as the RFS is available
at the Bepaitment of Eneigy's (B0E) Alteinative Fuels Bata Centei (AFBC).

S1
0ne paiticipant in the CNEE uialogue obseiveu, "Theie is a total lack of agieement in the
sectoi anu liteiatuie in geneial on what seconu geneiation means". The same paiticipant
points out that while "auvanceu biofuels" shoulu be useu to uesciibe fuels whose
piouuction pathways aie not yet ieauy foi commeicialization, the RFF uefinition incluues
anu is uominateu in volume by soy biouiesel anu sugaicane ethanol, both of which aie
piouuceu by well-uevelopeu methous. Coming to agieement on a cleaiei uefinition of
seconu-geneiation anu auvanceu biofuels coulu be an action item in its own iight.

UE
Somma B, Lobkowicz B, Beason }P (2u1u). 6rowinq Americos fuel: on onolysis of corn
onJ cellulosic etbonol feosibility in tbe 0niteJ Stotes. Clean Technologies &
Enviionmental Policy 12:S7S

SS
In 2u11, the 0.S. Navy anu the 0SBA announceu the $12 million puichase of 4Su,uuu
gallons of auvanceu uiop-in biofuel, fiom a blenu of non-foou waste anu algae, to be mixeu
with aviation gas oi maiine uiesel fuel.

S4
0ne stuuy (Ryan Bavis, Anuy Auen, anu Philip T. Pienkos, Tecbno-Fconomic Anolysis of
Autotropbic Hicroolqoe for Iuel ProJuction, Applieu Eneigy, vol. 88, no. 1u (0ctobei 2u11),
p. SS24-SSS1) iepoits that the piouuction of algae biouiesel at its cuiient stage of
evolution coulu cost fiom $9.84 to $2u.SS pei gallon.

SS
Califoinia Aii Resouices Boaiu: low Corbon Iuel StonJorJ Report 2009, see Iv-1S, ES-Su
& ES-S1.

S6
LN0P lanufill anu pioject uatabase, 0.S. Enviionmental Piotection Agency.

S7
Iorms, lonJ in Iorms onJ livestock 0perotions 2012 Summory, 0.S. Bepaitment of
Agiicultuie, Febiuaiy 2u1S, at S.

S8
AgStai Piojects Batabase, 0.S. Enviionmental Piotection Agency.

S9
Coalition foi Renewable Natuial uas testimony to EPA.

Poweiing Foiwaiu
2uS

6u
Woste to Wbeel Anolysis of Anoerobic Biqestion BoseJ Renewoble Noturol 6os Potbwoys
witb 6RFFT HoJel, Aigonne National Laboiatoiy, Eneigy Systems Bivision.

61
Nethanol ueiiveu fiom a ienewable C02 souice anu a ienewable eneigy souice foi
electiolysis - such as Icelanu's use of ienewable methanol geneiateu fiom theii geotheimal
plants - can be uistinguisheu as cleaily ienewable. Bowevei, B0E anu EPA shoulu examine
the extent to which this fuel souice is ienewable if the C02 is ueiiveu fiom fossil
geneiation.

62
These conclusions anu specific language aie uiawn fiom a papei publisheu by the
Inteinational Consoitium foi Fiie Safety, Bealth anu the Enviionment.

6S
Foi example, if an oil pipeline's useful life is SS yeais oi moie anu the 0niteu States is
committeu by uomestic policy oi inteinational tieaty to cut its gieenhouse gas emissions
8u% by 2uSu, is the best infiastiuctuie investment iail iathei than pipelines, oi
infiastiuctuie foi AFvs anu AFs iathei than petioleum.

64
Alternotive Iuel lnfrostructure Fxponsion; Costs, Resources, ProJuction Copocity, onJ
Retoil Avoilobility for low-Corbon Scenorios, National Renewable Eneigy Laboiatoiy, Apiil
2u1S

www. cnee. col ost at e. edu
970- 491- 2903
www. Poweri ngForwardPl an. org
Copyright Center for the New Energy Economy 2014
All Rights Reserved. No part of this document may be reproduced
without the Center for the New Energy Economy!s express consent.

CNEE Powering Forward Full Report

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

CNEE Powering Forward Full Report

Uploaded by

Copyright:

Available Formats

Powering Forward:

Presidential and Executive

You might also like