How does the removal of Building Block 4 from U.S. EPA's final Clean Power Plan affect the prospects for energy efficiency as part of compliance mechanisms? During today's OnPoint, Kelly Speakes-Backman, senior vice president of policy and research at the Alliance to Save Energy and a former commissioner with the Maryland Public Service Commission, discusses where and how states should be looking to use efficiency as they craft their implementation plans.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Kelly Speakes-Backman, senior vice president of policy and research at the Alliance to Save Energy. Kelly previously served as the commissioner with the Maryland Public Service Commission. It's great to have you here.
Kelly Speakes-Backman: Thank you for having me.
Monica Trauzzi: Kelly, you are uniquely positioned to comment on the Clean Power Plan, having worked with the Maryland PSC when the draft was released and also when comments were given on that draft rule. How did EPA do overall?
Kelly Speakes-Backman: I think they did fantastic overall. I mean, I think especially when you consider the proposed rule to the final rule that just came out just earlier this month, I think they've done an unprecedented amount of listening. I think the 4.3 million comments that they received and reacted to these sound comments and had critical engagement with stakeholders has proven this Clean Power Plan in its final form to be really much stronger in terms of being able to ensure transparency, equity, enforceability and fairness among states.
Monica Trauzzi: So Building Block 4 was removed from the final rule. That was the efficiency block.
Kelly Speakes-Backman: Yes.
Monica Trauzzi: How big of a loss do you consider that?
Kelly Speakes-Backman: I don't consider it a loss at all actually. I think it's very interesting in that EPA got it right in the structure. And I've said this all along, that by separating the goal setting from the compliance strategies, that structure is right. And so energy efficiency has been and continues to be a viable compliance strategy. It's the fastest, it's the cheapest, it's the easiest way to reduce carbon pollution from power plants. And so that still remains, and I think in fact -- the way I look at it -- by taking it out of the goal setting, this cheapest resource that we have is not going into the economic analysis for the goal setting itself. So by deploying energy efficiency in the aftermath and not having it accounted for in the goals, I think you get a little bit of an added bonus by saving more money than even the economic analysis has shown through EPA.
Monica Trauzzi: So as states begin crafting their compliance mechanisms, where and how should they be looking to best use efficiency as part of their compliance strategy? What are your recommendations?
Kelly Speakes-Backman: Well, I think just by looking at what states have already done, 48 states now have programs, energy efficiency programs in place. Twenty-five states have either mandatory or voluntary goals even to be set, and those goals are in and around where the EPA set. It's clear to me from this final plan that EPA is basing many of the -- much of the structure of the Clean Power Plan on actions that are already taking place on the ground, on energy efficiency programs that are already in place among states.
Monica Trauzzi: You worked in Maryland to significantly increase the state's renewable energy portfolio, something that the Clean Power Plan is also asking states to take a look at. There's a Clean Energy Incentive Program built into the power plan. How can efficiency pair with increased renewable energy capacity to build a strong portfolio for states?
Kelly Speakes-Backman: That's a great question. I think they both go towards questions of not only reducing carbon pollution from power plants, but they also both play into the ability to have more distributed resources and alleviating congestion on the grid. That's one of the things that we found in Maryland in establishing both the RPS and our energy efficiency goals, that it has multiple purposes and multiple benefits. Not only is it going to help alleviate the cost of people's energy efficiency bills and they can control their monthly bills, but it can help alleviate congestion, which will help decrease the rates or offset the increase of rates that are happening because so much reliability investments have to be made in the systems these days.
Monica Trauzzi: So what conversations is the Alliance to Save Energy having on crafting compliance mechanisms with states? And are there states that are of particular interest to you in jump-starting a conversation?
Kelly Speakes-Backman: That's a great question. I think right now we are all reading the 1,500 pages that were released a week ago. [Laughter] And we're digesting, and we're having a lot of conversations with our energy efficiency industry partners, with businesses and stakeholders that are looking to help improve their energy productivity. You know, the Alliance to Save Energy is looking at doubling energy productivity by 2030; that falls right in line with what they're doing with the Clean Power Plan.
Monica Trauzzi: What do you make of the "Just Say No" option? We're hearing many conversations about it, certainly in Congress. But do you think that there are states that are giving real, serious consideration to it? And then they'll fall into that FIP category, and is that a good option for those states?
Kelly Speakes-Backman: Well, considering my work with RGGI and using a regional compliance mechanism, I have no problem with the FIP itself. But I'll tell you, I think it depends on who you're talking to in the state. If you're talking to legislators, they may be having one reaction. If you're talking to the environmental regulators, they may be having another reaction. And when you're talking to the utility regulators, they're having a different reaction. But I can tell you just from my experience talking to other regulators from states, even some states whose legislators may not be as friendly towards the Clean Power Plan, everyone's thinking about what they're going to do for a plan. You can't be left holding the bag when the time comes that -- in 2018 when you need to put your plan forth and not have anything on the table.
Monica Trauzzi: Once Congress returns in September there will be a range of efforts against the power plan. They will all unlikely, most unlikely have the votes to pass; however, they could have an impact on public perception and certainly on the international negotiations in Paris in December. How significant could strong pushback in Congress be towards the overall strength and future of the rule?
Kelly Speakes-Backman: I think the strength and the future of the rule will play out in the court system. And I think however that turns out to be, I think public sentiment is something altogether different. And I think when we look at the global stage, we're looking at a community of folks, not only in the U.S. but around the world, that are looking at climate change as a real issue, and looking towards the United States to be a leader and an example of how to craft solutions.
Monica Trauzzi: All right, we'll end it there. Thank you for coming on the show. Nice to see you.
Kelly Speakes-Backman: Thank you for having me.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
[End of Audio]