As a part of the President’s Clean Power Plan, the US EPA issued draft rules in June that would mandate lower levels of carbon dioxide emissions from existing coal power plants across the country. The EPA’s emissions reduction targets would decrease those emissions 30% by 2030, based on 2005 levels. EPA is using its authority under the Clean Air Act’s Section 111(d)  to set these new requirements for states.

If you don’t have hundreds of pages of the proposed rule and supporting documents mastered, not to worry! Back in June when the rule came out, we put together a primer on it specifically geared toward home performance pros. You can read our EPA rule primer here.

The proposed rule has gotten lots of attention from all sides of the political spectrum. Some have praised the rule or said it doesn’t go far enough. Others have bashed it and threatened legal action. The EPA’s comment period closed recently, and you can see what everyone had to say online, along with documents related to the rule. The EPA also held public hearings, and Efficiency First had representatives give public testimony in both Denver, CO and Washington, DC.

Efficiency First’s Written Comments
As the national association for companies in the home/building performance industry, we focused our comments on areas of the rule that could impact you and other building performance professionals most. In this post, I’ll summarize what those are and what we said in our comments. It’s worth mentioning that some of these items touch on ways the EPA rule could help open up opportunities in the building performance sector long-term, while others are more about how the EPA can structure the rule in ways that work best for the building performance sector, within the limitations they have under the Clean Air Act. We submitted our comments jointly with the Home Performance Coalition.

View our comments online. Here’s what we focused on:

Support for high targets and for energy efficiency.
We commended the EPA for including energy efficiency as one of the approved pathways that states can use to meet their emissions reductions.

A critical time for supporting energy efficiency policies that drive industry growth.
We’ve learned a lot over over the last few years about how energy efficiency policies can be structured in ways that will actually help the companies succeed and drive industry growth. We’ve also learned what doesn’t work.

In our comments we state: “Achieving scale in the energy efficiency sector will include structures that encourage business innovation and reward delivery models that result in verifiable energy and carbon savings, instead of restricting the ways that energy savings can be delivered.” The EPA’s proposed rule is set to last through 2030 -- more than 15 years! It’s really important that EPA’s rule doesn’t just take the models of the past and set parameters for states based on them. Instead, the rule should allow for -- and encourage -- changes that will lead to greater market investment, innovation and competition in the delivery of energy savings.

How to Count Savings
As part of the rulemaking process, the EPA will be setting criteria for how states can measure and verify the energy savings they report. As home performance professionals know, some of the methods that utilities and other programs have used to measure savings have been so cumbersome for companies and customers that they’ve slowed market growth -- without providing the level of savings accuracy that’s needed.

Luckily, better -- and leaner -- methods to track savings have been developing in recent years. Modeled savings predictions have begun to improve, and there have also been recent moves (including work done by the Efficiency First New York chapter) toward systems that would track and reward measured savings.

Our comments to the EPA highlight the need for the EPA’s evaluation, measurement, and verification (EM&V) requirements to be flexible, allowing states to use these recent and upcoming developments in EM&V methods in order to prove their savings.

Fuel Neutrality
Section 111(d) of the Clean Air Act addresses the electric power sector. This raises some potential challenges related to the building performance sector. Depending on region, climate, housing stock, etc, much of the energy savings from building performance projects are derived from non-electric fuels  -- in particular, heating fuels like natural gas, heating oil, propane, etc. We know that these fuels result in greenhouse gas emissions too, so it’s important that the EPA take this into account and mitigate some of the challenges.

Here’s an example: A homeowner switches their furnace from electric to gas, reducing the CO2 that comes from the emissions in the power sector. But their gas heating still causes CO2 emissions. The EPA should make sure that the greenhouse gas emissions reductions from lower electricity use are real -- and that they aren’t made up for by increases in CO2 emissions from other fuel sources. This is the kind of challenge that can be mitigated if best building practices are used and encouraged: Air seal and insulate and upgrade the heating system to achieve optimal performance.

Energy Efficiency Cost Effectiveness
The EPA’s proposed rule discusses how states and utilities already generally use cost effectiveness calculations when they decide how to structure their energy efficiency portfolio. We know that most current cost effectiveness tests aren’t best suited to measure whether home performance programs are worthwhile. And, many of the calculations that the tests include don’t have anything to do with the EPA’s primary concern (lowering CO2 emissions). The EPA should make it clear that states aren’t obliged to use cost effectiveness tests when they shape their energy efficiency plans. When they do apply cost effectiveness tests though, we want to make sure the tests that states use balance costs and benefits appropriately.  Efficiency First has participated in the development of the Resource Value Framework and supports states using the RVF to ensure they have a balanced program screening.

So, what’s next?
The EPA will be issuing a final rule this coming June 2015. Then states will have one to two years to submit their compliance plans to the EPA for approval, and plans will have to be put into action by June 2017 and 2018 (for states participating in regional plans).

As the rules develop, we’ll be working with our partners and chapter associations, supporting work at the state level to put strong energy efficiency policies in place in response to the EPA’s requirements and ensuring that home performance is included in these compliance plans. Stay tuned for more in 2015!

For those who want to take a look at our full comments, they’re available here on the regulations.gov website.