Federal Advocacy – Focus on Implementation
The three stimulus bills and the Infrastructure and Investment Jobs Act (IIJA) appropriated tens of billions of dollars that could be invested in energy efficiency, renewable energy, and grid-enabled buildings (new name for demand response) over the next five years. NAESCO is collaborating with national organizations to ensure that the implementation of these programs takes full advantage of the comprehensive project delivery and financial leveraging that ESCO projects offer.
One example of this work is a collaboration with national education organizations and EE equipment manufacturers to develop a common position -- convincing federal and state officials that the ESSER stimulus funds should prioritize energy efficiency investments.
Another example is the collaboration of more than two-dozen national organizations in the Energy Efficiency Strategy Group to understand how the IIJA programs will be administered by the US Department of Energy. Which offices and individuals are responsible for each program? What is the timing for guidance documents, solicitations, and the release of funds? We have organized introductory meetings with the DOE offices and formed working groups of EESG members that plan to meet regularly with the DOE offices to advocate for our positions, and to ensure that our members have the best available information. We are now expanding this collaboration to several state and regional EE trade associations and the Regional Energy Efficiency Organizations.
We are also participating in the development of a training and certificate program for the Performance Contracting National Resource Center (PCNRC). This program will create best practices for Owner’s Representatives that work on performance contracting projects. The training program is expected to launch in early 2023.
We have also re-started the quarterly meetings of ESCOs that implement ESPC projects in Public Housing Authorities with HUD program officials. The meetings are focused on major issues such as blending appropriated and EE funding, integrating solar and EE, innovative pilot programs, more training for PHAs.
Finally, we are working with national and regional organizations to try to salvage critical pieces of the Build Back Better legislation and to urge the IRS and DOE to issue the new guidelines, based on the updated ASHRAE standards, for the calculation of 179d baselines.
State Advocacy Efforts – Overcoming Political Opposition
As the ESCO industry grows and expands its service offerings, we are encountering more opposition from other actors in the energy efficiency and renewable energy sectors. NAESCO has organized Working Groups of ESCOs and participates in national and regional coalitions to address these issues.
California: The utility unions are increasingly active in opposing the expansion of Distributed Energy Resources (DERS) -- energy efficiency, demand response, renewable energy programs that they think will reduce the need for the generating plants and T&D where their members work. An example is union support for the restriction of net metering of customer-sited solar generation in both legislation and regulatory proceedings. ESCOs are dealing with a resurgence of claims that ESPC projects implemented under Section 4217 violate the terms of Section 1090, which restricts the ability of design consultants to implement projects.
Illinois: NAESCO is fighting, for the fifth year, a bill sponsored by the Illinois chapter of the American Institute of Architects (AIA) that would severely restrict the ability of ESCOs to do performance contracts in K-12 facilities. The NAESCO Working Group of ten ESCOs has again retained McGuireWoods Consulting, an experienced lobbying firm, to fight the bill. We stopped this year’s bill with an extraordinary effort by Illinois ESCOs, school districts that have implemented performance contracting projects and our lobbyists
Texas: Last year, NAESCO worked with a group of ESCOs to eliminate the onerous provisions (e.g., no change orders) of HB 3583 and preserved the ability of ESCOs to do ESPC in water/wastewater facilities. The bill was sponsored by consulting engineers and contractors who specialize in water/wastewater plant projects, and who though that an ESCO was stretching the limits the state performance contracting law with a particular project. The state senator who represents the area, and was the Senate sponsor or HB 3583, has published an editorial in the local weekly newspaper that suggests that the state performance contracting law may need substantial revision to restrict the industry.
Tennessee: NAESCO is working with key state agencies (Department of General Services, State Funding Board, Department of Finance and Administration) to accelerate the implementation of HB-78, supplying them with information about available types of project financing as well as NAESCO members and other companies that provide project financing. Tennessee is taking a slow and cautious approach to initiating ESPC in state buildings, as neighboring North Carolina and Georgia have done, starting with a first tranche of projects later in 2022.