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2007 State Energy Activities Solicitation

The U.S. Department of Energy (DOE) announced in October 2007 the results of the 2007 State Solicitation that was issued through the DOE Office of Energy Efficiency and Renewable Energy (EERE) Weatherization and Intergovernmental Program. The solicitation involved the following areas of interest:

The DOE National Energy Technology Laboratory in Morgantown, West Virginia, managed the 2007 State Solicitation, which was meant to fund innovative projects cooperatively with the states that would stimulate the market toward greater energy savings. An additional objective of this solicitation was for DOE to support transformational market activities in states that can accelerate current levels of investment and energy savings.

EPAct Section 140 Energy Efficiency Pilot Program

Congress established a pilot program of financial assistance to the states as part of the Energy Policy Act of 2005 (EPAct) Section 140. This program is designed to help states meet an overall energy efficiency goal under EPAct of reducing statewide consumption of gas or electricity by 0.75% from 2005 levels.

DOE selected six projects to receive $4 million, which is leveraged by an additional contribution from the participating states of approximately $7.2 million:

New Hampshire

DOE award: $569,224

New Hampshire and The Jordan Institute in Concord will create a nonprofit organization that will provide private financing and comprehensive energy efficiency services, starting with schools and municipally owned buildings. The organization will take advantage of a revolving loan fund that will be established with private capital to finance energy efficiency upgrades. The organization will also offer expert planning and project management services.

Once the pilot phase of this program is established, it will expand to include homes and commercial and industrial facilities. Through this program, New Hampshire seeks to reduce statewide electricity use by 0.75% by 2018.

New York

DOE award: $999,034

New York and a consortium of nine other states will bring new energy-efficient mortgages to the marketplace. These mortgages will incorporate the cost of investments in energy-efficient products such as insulation, ENERGY STAR® appliances, furnaces, and air conditioners into the monthly mortgage payments, so customers can repay these costs over the lifetime of the mortgages. And they can deduct the interest on the loans from their federal income taxes.

The New York Energy Efficient Mortgage Program aims to involve 6.3% of mortgage transactions in the state between 2008 and 2015. If the program achieves this market penetration, it will reduce total energy use by 0.75% by 2016.

Illinois

DOE award: $575,000

Illinois is developing the Illinois Energy Efficiency Portfolio Standard, which is the most aggressive plan of its kind in the United States. The goal of the efficiency standard is to reduce electricity consumption by 8.8% by 2015.

California

DOE award: $534,610

California is expanding its successful California Collaborative for High Performance Schools into existing schools. Currently, the collaborative focuses on new construction. Under this pilot project, California will develop an assessment tool for use in its approximately 10,000 existing K-12 school campuses to measure current energy use. The state will use these data to help school districts set performance goals at the district level. State analysts expect schools to save about 20% of their electricity and natural gas use with this project.

Pennsylvania

DOE award: $840,000

Pennsylvania aims to increase the energy efficiency of existing and new homes to achieve a 3% reduction in residential energy use by 2010. The state will achieve this through the Energy Action Agenda for Homes in the Keystone State, which consists of certifying efficient homes through ENERGY STAR, consumer education, and making energy-efficient mortgages available to homebuyers. The energy-efficient mortgages are underwritten by the state so that qualifying homebuyers can obtain mortgages that have interest rates at 0.25 point lower than the lowest commercially available fixed mortgage rate at the time of purchase.

Ohio

DOE award: $669,637

Ohio is beginning a pilot smart-metering program in state facilities that can serve as a model for the private sector. It is called the Ohio Green Lease Program and is designed to more closely align the interests of building and energy equipment owners and their tenants who pay utility costs. Under this program, the state gives preference to facilities that employ smart-metering when it is time to negotiate a lease for a state facility. Ohio analysts estimate this program will reduce electricity and natural gas consumption by 15% in state-leased facilities by 2011.

Clean Energy and Air Quality Integration

DOE selected three states to receive grants totaling $576,000 to address the challenges of integrating clean energy projects with state air quality goals. Each state winning these grants will invest an additional $183,000 in the projects and will quantify the co-benefits of energy efficiency and renewable energy projects and programs:

Utah

DOE award: $150,000

Utah is developing cost-benefit metrics for calculating the co-benefits of energy efficiency and renewable energy for use in state government decision making. The goal of the project is to develop a more rigorous cost-benefit analysis for energy efficiency and renewable energy projects, which will allow state decision makers to approve a greater number of energy efficiency and renewable energy projects under state rules.

Massachusetts

DOE award: $164,210

Massachusetts is using the Market Allocation Analysis Tool (NE-MARKAL), a least-cost optimized linear programming model that is tailored specifically to the energy infrastructure of states in the Northeast. Massachusetts is using this model, which was developed in 2003 with partial support from the U.S. Environmental Protection Agency, to identify the most cost-effective energy efficiency and renewable energy policies and programs that can help the state reach its air quality goals.

Illinois

DOE award: $161,720

Illinois is building on the findings of the Illinois Air-Energy Integration Initiative to develop a methodology to assess the impact of renewable energy and energy efficiency policies and programs on air quality. The state is also analyzing best practices and promoting cooperation between state and regional energy and environmental agencies.

Virginia

DOE award: $100,000

Virginia is quantifying the environmental benefits from selected renewable energy and energy efficiency programs in the Washington, D.C., metropolitan area. Under this project, the state is reviewing energy valuation protocols and developing spreadsheet tools to help it document the economic benefits of emissions reductions.

Market Development of Renewable Energy Certificates

DOE is providing funding totaling $402,000 to three states that are participating regional projects to develop mechanism for trading renewable energy certificates and integrating energy efficiency credits into certificate trading regimes. The three states selected for the awards are contributing a combined additional $110,000 (although DOE did not require a cost-share for this solicitation):

Pennsylvania

DOE award: $199,999

Pennsylvania is developing a set of recommendations to harmonize trading of renewable energy and energy efficiency credits in the Northeast and Mid-Atlantic regions. The state is forming a multidiscipline advisory committee to guide the project. Pennsylvania's partners in this project include Connecticut, Massachusetts, and Vermont.

Wisconsin

DOE award: $124,459

Wisconsin is forming an oversight organization for the Midwest Renewable Tracking System (M-RETS), which is a regional trading market for renewable energy certificates in the Midwest. M-RETS provides a venue for electricity providers in Illinois, Iowa, Minnesota, Montana, North Dakota, South Dakota, Wisconsin, and Manitoba, Canada, to trade certificates since July 2007.

The formation of a formal oversight organization for M-RETS is necessary to broaden the scope of this regional trading organization and to allow it to participate in discussions regarding standardizing and developing and protocols for trading renewable energy and energy efficiency credits. Wisconsin's partners in this project include Iowa, Minnesota, North Dakota, and South Dakota.

Michigan

DOE award: $77,624

Michigan is working with Indiana, Illinois, and Ohio to survey state policies supporting renewable portfolio standards and query stakeholders in the four states about developing consensus recommendations on definitions, procedures, and policies regarding renewable energy certificates. This project aims to inform legislators in the four states about the pros and cons of renewable portfolio standards as they deliberate about potential legislation.