How should President-elect Barack Obama address energy efficiency during his first year in office? Can the next economic stimulus package boost prospects for efficiency? During today's OnPoint, Kateri Callahan, president of the Alliance to Save Energy, gives her take on what the incoming Obama administration will mean for energy efficiency. She addresses how clean energy and efficiency can be incorporated into the next stimulus package. Callahan also discusses how the credit crunch has affected efficiency projects.
Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. With us today is Kateri Callahan, president of the Alliance to Save Energy. Kateri, thanks for coming back on the show.
Kateri Callahan: Thanks having me back on, Monica.
Monica Trauzzi: Kateri, on the campaign trail President-elect Barack Obama spoke a lot about building a sustainable energy future and he spoke a lot about clean energy. Now the actual work begins. What are you looking for him to do in his first few months in office in order to get energy efficiency and clean energy off the ground?
Kateri Callahan: Well, we're hopeful that he's going to deliver on his campaign promises to make energy, clean energy a centerpiece and a first priority as he takes office. And we have every reason to believe he's going to do that. We're excited, Monica, because if you look at his new energy for America platform, the bedrock of it is really energy efficiency and he cites it, and I quote, "as the cheapest, quickest, fastest way to meet our growing energy demand and to tackle climate." So I know he's going to have a lot on his plate. We've got an economic stimulus we have to do. We've got energy issues looming and, of course, climate. But if you look across all of those sectors energy efficiency has a very important piece to play and it furthers all his goals for the economy, for energy security and for the climate. So, we're looking for really good things and a lot to happen under President-elect Obama and the new Congress.
Monica Trauzzi: What opportunities exist specifically in an economic stimulus package on the energy efficiency front?
Kateri Callahan: Well, if you look at it from President-elect Obama's package of what he wants to do on the new energy future, he can create a lot of jobs through energy efficiency. He has called in this package for weatherizing a million homes a year. And if we began that as an economic stimulus package we would create jobs for people in weatherizing those homes and we would also be helping low and modest income families to pay their heating bills this winter. So it would be a win-win for the economy in that regard. Also, looking at public education and outreach and under the Energy Policy Act of 2005 there was a massive public information and outreach program, $90 million a year for five years to teach consumers and empower them to save, both on the road and in their homes in terms of energy costs. We'd like to see him fund that. It's already authorized, put funding into it to help draft purchases of more efficient equipment, energy efficiency upgrades to the home. So those are two ways, if he's looking at infrastructure and investing there, investing in public transportation. Just do the stalled projects and the projects under way, you're looking at 50 million to a billion a year. That's going to create a lot of jobs. You could look at doing efficiency upgrades, helping states to do efficiency upgrades to their own facilities. You could invest as much as maybe $2 billion a year doing that and, again, save billions more in avoided energy costs. So, there are all kinds of things that he could do that fit within his energy plan, but would also drive our economy.
Monica Trauzzi: Does the money exist though to fund all of these different projects that you just listed? I mean especially considering all the sectors and companies that are reaching out to the government right now asking for bailouts and asking for financial help. Where does all this money come from?
Kateri Callahan: Well, I think that's really the question, is where are we going to place our priorities? Where's the new president going to place his priorities? And we're counting on him to keep his word that energy is an area that we can't afford not to invest in. I think the good news about energy efficiency is that there is such a return on investment when you get more energy efficient if you look at all of the programs at the Department of Energy that drive research development and deployment. The National Academy of Sciences has looked at that, and said that we get about $20 back into the economy in avoided energy costs and in private-sector investment for every dollar we invest. If you look at the public utilities, the electric utility sector and the investments that they make in energy efficiency, what they see in terms of avoided energy costs and investment is very significant. So, yes, it's going to cost money. Yes, we're going to have to fund it from someone, but its money that if invested will return much more to the economy than it takes us as a people and as a nation to put in. And, oh, by the way, we're going to be tackling climate change problems every step of that way.
Monica Trauzzi: Bipartisanship is going to be very important across the board on all issues that Congress tackles next year, but particularly in this issue area. Who are you expecting to lead the way in Congress on energy policy?
Kateri Callahan: Well, if you look at it from the energy efficiency perspective and what we've seen, we haven't seen any partisanship on that issue. Energy efficiency crosses party lines very well and we've gotten leadership from diverse individuals like Zach Wamp on the Republican side on appropriations. He's given us a lot of help, a member from Tennessee. And also Congressman Steve Israel from New York, who's a Democrat also on appropriations, they're working together to drive investment. Senator Bingaman has been a longtime champion of energy, efficiency, policy. But we fully expect that Lisa Murkowski or whoever takes the chair at the Senate energy committee is going to look to energy efficiency as well as a central piece of whatever policy emerges. The same thing happens in the climate arena. The energy efficiency provisions, the complementary policies that you see in climate legislation and the availability of funding. Whether you're looking at the Barack Obama plan or you're looking at Lieberman-Warner or Boxer or you're looking at Dingell-Boucher, they all are investing in energy efficiency. So I think leadership is going to emanate from all quarters on efficiency and it really is a question out of can we get moving on that even if we're stalled out on some of the more controversial issues, like whether we do a cap-and-trade program right away or we wait? You know, how is that going to play out?
Monica Trauzzi: OK, and on the climate front, are you expecting Obama to use the Clean Air Act initially and then work towards pursuing legislation in Congress?
Kateri Callahan: You know, Monica, there's so much speculation. The telephones are ringing off the hook and what is he going to do and how is he going to proceed? And I think it's really too early to tell. The transition team, from the perspective of energy, if it's been chosen, it's not announced. There's a lot of speculation and he could do a lot of different things. He could do an economic stimulus bill that maybe has a bit in it that's energy infrastructure related, then do an energy bill, then do a climate bill. Or he could try to combine all those into one. I do think that there's a great expectation that he will use the executive branch to put in place as much as he can on all of those fronts. So, I think we can see EPA being much more active in terms of pursuing regulatory answers, than we perhaps saw under this administration. And there's been a lot of writing on this in the press, but I also think we will see a lot of rollbacks of actions that were taken in the current administration, rolling back those to be more pro-environment, more pro-regulatory action when Barack Obama takes office.
Monica Trauzzi: Like on offshore drilling?
Kateri Callahan: Yes, like on offshore drilling.
Monica Trauzzi: With the introduction of the Dingell-Boucher draft and the debate last year on the Lieberman-Warner bill, these two bills are worlds apart from each other.
Kateri Callahan: Right.
Monica Trauzzi: So seemingly there's a lot of work that Congress still needs to do on the climate legislation front. What kind of timeline are you looking at?
Kateri Callahan: If you had asked me a couple of months ago, when Congress was deep in the throes of looking at offshore drilling and what are we going to do for supply and the price of gasoline was $4.15 at the pumps, my answer would be a lot different than it is today. Because it looked like, with the economy going down and down and down, it looked as if we'd have to postpone climate legislation. I'm not so certain, until 2010 and that would have been my prediction. We won't have it before 2010. We may still not have it before 2010; however, I'm not willing to say that we can't get to it next year, notwithstanding all the hard work that has to be done. We have the international negotiations on climate in Copenhagen in December of next year. So December 2009 we're going to want to be able to say something to the international community and, again, that's part of President-elect Obama's platform, is to reengage with the international community. So we've got that marker in December of 2009. And then again, you have the question that is he, President-elect Obama, going to try to deal with the economy, with energy security, with climate separately or is he going to try to do it all at once and, ergo, it could through a cap-and-trade type of framework. If that happens, we might be able to get it done in a year. If the administration is behind us, if we get some good bipartisanship up on the Hill we might be able to do it. I still think it's more likely that it's going to take a couple of years because of the complexity of it all, but it could happen. It could happen in 2009.
Monica Trauzzi: How are efficiency projects being impacted by the lack of capital that exists right now because of the financial crisis?
Kateri Callahan: I think, as with anything, it's difficult to find capital. It's difficult to find investment funds. So I think that's having an impact. I only have anecdotal information at this point in time, but I think it is something that we're very concerned about and one of the reasons in an economic stimulus package we would like to see funds made available to state governments to do work, to public institutions like schools to be able to make upgrades. We want to make sure that the money to invest is there for the upfront capital costs because, again, over the course of time, those are going to pay for themselves well over.
Monica Trauzzi: Final question here. All this talk about clean energy sounds really positive and great and happy, but there are some who would say, "Hold on, be careful, this is going to cause our energy prices to skyrocket."
Kateri Callahan: Right.
Monica Trauzzi: How do you respond to that?
Kateri Callahan: Well, I would say that in states where they've deployed energy efficiency to very high levels, and I will not use California because people always use California. But if you look at New York and Vermont where there's been very significant investment in energy efficiency, the per kilowatt cost of electricity, yes, it's higher than the national average. But the average bills are actually lower for consumers and that's because, I think, there's such management, again, and use of energy efficiency and so much investment that's been made in it. So, I think it's possible to do both at once, quite frankly, to invest in energy efficiency and yet to make sure the people's energy bills, not necessarily the price they pay per increment, but that their energy bills are managed to stay either level or, in fact, in many instances, go lower.
Monica Trauzzi: OK, we're going to end it right there. Thanks for coming on the show again.
Kateri Callahan: Thank you Monica.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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