Energy Policy:

Association of Energy Service Companies' Dixon discusses policy hurdles on efficiency

What is the future of efficiency programs if the Department of Energy's budget is cut? During today's OnPoint, James Dixon, chairman of the National Association of Energy Service Companies and vice president at ConEdison Energy, makes the case for continuing to fund efficiency projects and explains why he believes a lack of funding will lead to job losses.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is James Dixon, chairman of the National Association of Energy Service Companies. Jim, thanks for coming on the show.

James Dixon: My pleasure, Monica. Thank you for having me.

Monica Trauzzi: Jim, your organization promotes the benefits of the widespread use of energy efficiency and efficiency is really always spoken of as a low-hanging fruit here in the United States, but it's been a tough hurdle. Why?

James Dixon: Well, I think for a number of reasons. I think that a lot of people don't understand it, they don't understand how they can get these projects done in a way that not only brings the efficiency to them, in their buildings, but also monetarily, you know, supports -- it gives them a benefit, you know, from a budget side, from the money side. And what NAESCO does, the National Association of Energy Services Companies, is try to educate people on energy performance contracting, what the benefits are, how they can get this more than just the low-lying fruit like lighting and mechanical, but also to get some real projects that can touch all aspects of the facility.

Monica Trauzzi: But how do you make an argument for energy efficiency in this climate of austerity? I mean how do you convince people that that's where they need to put their money?

James Dixon: Well, one of the things is that energy efficiency does pay for itself. The beauty of performance contracting is that it's a means for financing these projects where the financing is paid for from the energy savings. So, it really is almost like a net zero game when it comes to the outlay of cash for people if they use performance contracts.

Monica Trauzzi: But no guarantee here at this point that the federal government will continue to fund and advance its own energy efficiency projects. I mean there's some question about DOE funding for next year.

James Dixon: Of course and we at NAESCO and our member companies would really like to, you know, see that put back, because the benefit that the federal government is getting from those dollars that they're spending, especially with organizations like DOE, with the Federal Energy Management Program. For every dollar they spend, they get $50 back in private investment. That's pretty good. Those are odds you can't get in the casino.

Monica Trauzzi: So, when you talk about the DOE budget, where should the money come from then to support these programs?

James Dixon: Well, I think the money has been there and I think it needs to be, you know, adjusted so that -- make sure that energy efficiency is not lost in the mix of all of the things that are going on in the energy market today. I mean I don't think in 30 years that I've been involved with Con Edison I've ever seen anything as diverse as the issues that are on the table today, whether it's gas pipelines or oil drilling or, you know, nuclear now and what direction that's all going to go in. Energy efficiency is the first fuel. It is the first thing -- the watt that's not used is the best watt of all. And it just makes so much sense for people to be making an investment there and for DOE and for the government, the appropriations says to find an opportunity to be able to fund those projects that, you know, support energy efficiency.

Monica Trauzzi: So, in terms of jobs numbers, what kinds of job losses could we see as a result of these programs being cut? What are you looking at in terms of that?

James Dixon: Well, energy efficiency, for every million dollars in an energy project, we're looking at 10 direct jobs. So those are in construction trades which right now are a pretty hard-hit area of the economy. Engineering, finance, you know, all the way through. And then there's another 10 to 15 jobs that are supported on the outside, you know, through all of the things that need to be done in order to bring the products to where they need to be installed so that you can have the energy efficiency that you're looking for.

Monica Trauzzi: But does this just mean that the focus maybe should shift to the states as it has on many energy-related policies? I mean many states have a renewable portfolio standard in place. So, should the states take the lead on this and ...

James Dixon: Well, it's a balance. Many states have done that, some states have not, some are further along. A lot follow the federal government though, so the government -- federal government support is very, very important as we saw with the ERA funding. You know, it provided a lot of seed money into the states for them to start to do things and focus on energy efficiency and efficiency programs.

Monica Trauzzi: So, in terms of short-term policies, what are you anticipating from Congress this year on energy efficiency?

James Dixon: Well, I think it remains to be seen. This is a very, very different year with the election coming up and, you know, the Congress -- Shaheen and Portman act we'd like to see come to the floor as it is, you know, for an up or down vote. We think that's a very, very good start for energy efficiency. And, you know, those sort of initiatives need to be focused on and continue and not get lost in the mix of all the other energy issues that are being dealt with today.

Monica Trauzzi: OK, we'll end it right there. Thank you for coming on the show.

James Dixon: Great, thank you for having me.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

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