Genzer, who also sits on State & Local Energy Report’s editorial board, is a partner at the firm of Duncan, Weinberg, Genzer and Pembroke, P.C., where since 1985 he has practiced energy, utility and environmental law. He was acknowledged for his 25 years of effective work on energy efficiency policies and programs, including work with state energy offices and the federal government on such topics as building codes, performance contracting and energy efficiency programs funded by the American Recovery and Reinvestment Act (ARRA)—in particular, for playing a critical role in addressing implementation challenges under ARRA.

Aside from NASEO, Genzer also serves as counsel to the National Association of Electric Service Companies, the National Energy Assistance Directors’ Association, the Energy Programs Consortium, the Solar Energy Industries Association, the Solar Alliance and the Geothermal Energy Association.

The other two winners were Northwest Power and Conservation Planning Council, for its nation-leading power planning efforts, which have already resulted in nearly 4,000 average megawatts of energy savings and that will, over the next 20 years, provide 85% of the Northwest’s needs for new electric resources; and retail giant Wal-Mart, for leadership on energy efficiency including using innovative energy-saving technologies and designs in its stores, enhancing efforts to sell energy-saving products to its customers, assisting its suppliers with reducing their energy use and sharing best practice ideas with others.

“At BPI, we emphasize safety and risk reduction as fundamentals that must be practiced on every job,” said David Hepinstall, Chairman of the BPI Board of Directors. “We view these key steps not as ‘best-practices’ but rather as ‘must-practices’ that are imperative for protecting occupant health,  reducing liability risk for Accredited Contractors and program managers, and guarding the reputation and growth of the home performance and weatherization industry as a whole. We remind each and every one of our stakeholders to never relax their efforts when it comes to safety.”

The reminder is prompted by the news of a civil lawsuit filed on August 11, 2010, stemming from the carbon monoxide poisoning case of a family of four in Aspen, CO, in November 2008. To BPI’s knowledge, none of the individuals or companies involved in the current civil or previous criminal cases was in any way connected with the organization at the time of the Lofgren family’s deaths.

According to an August 12 article in the Aspen Daily News, the civil suit targets 12 defendants, including three local men also indicted on criminal charges for the deaths, the owner of the house where they died, the manufacturer of the boiler that allegedly leaked the poisonous gas, Pitkin County and the county’s community development department. The suit, filed in Denver district court, contains 39 pages of allegations against the 12 parties, including claims of negligence, manslaughter, product liability, and civil rights violations.

According to the Aspen Daily News article, the lawsuit in the Lofgren case claims five preventable causes that led to the poisoning, including disconnected exhaust piping and fresh-air intake vents, defective design of the boiler unit itself, improper installation of the ventilation system and the absence of carbon monoxide detectors in the house.

“Our hearts go out to the Lofgrens’ family and friends, because carbon monoxide poisoning deaths can be and should be prevented. Examples like these are the precise reason why we have standards, and why BPI Accredited Contractors and their Certified Professionals must conform to those standards. Anything less can result in tragedy for families and adverse consequences for contractors, manufacturers, program managers and anyone and everyone connected with the project, however distantly,” said Larry Zarker, CEO of BPI.

“This is also why we add a double layer of protection with our Quality Assurance Program on the work of BPI Accredited Contractors. By verifying that the work conforms to our standards, including all safety tests, we greatly reduce the risk of horrific things happening. Quality assurance helps protect occupants from real danger and helps protect contractors from liability. It also provides a marketable point of differentiation by allowing BPI Accredited Contractors and the incentive program managers who specify them to offer their customers increased peace of mind,” he added.

BPI national standards include combustion safety and carbon monoxide protection provisions that must be followed whenever heating systems or the building envelope are altered, including:
•         A preliminary and post-installation safety inspection of all combustion appliances
•         Carbon monoxide (CO) measurement at each appliance
•         Draft measurement and spillage evaluation for atmospherically vented appliances
•         Worst-case negative pressure measurement for each combustion appliance zone (CAZ)

For more information, see BPI Standards.

About the Building Performance Institute
The Building Performance Institute, Inc., (BPI) is the nation’s premier building performance credentialing, quality assurance, and national standards setting organization. BPI supports the development of a highly professional building performance industry through individual and organizational credentialing and a rigorous quality assurance program.

BPI offers the following:

certification of individuals in building analyst, heating, AC/heat pump, shell/envelope, and multi-family designations

accreditation of contractors committed to delivering quality, home performance improvements

quality assurance to verify conformance with BPI Standards and provide feedback for continuing improvement

affiliation of training organizations that deliver BPI services in their market

open, transparent, consensus developed national technical standards based on sound building science

BPI, in cooperation with the building performance industry stakeholders, establishes a professional performance bar at a level appropriate to ensuring the consistent delivery of exceptional building performance services for those entrusting the BPI brand. For more information about BPI, visit: www.bpi.org.

Building Performance Institute, Inc.
107 Hermes Road, Suite 110
Malta, NY 12020
Phone: (877) 274-1274
Fax: (866) 777-1274
info@bpi.org
www.bpi.org

On the list are solar heating systems, solar photovoltaic panels and shingles, small-scale wind turbines, new insulation technologies, cool roofs, high-efficiency appliances, tankless hot water systems, high-efficiency combination boilers for hot water and heat, in-home energy monitors and ductless heat pump systems. An additional $30 million will fund 16 grantees who are using other new approaches, including financial models that allow for greater private-sector leveraging, workforce training and volunteer engagement, indoor air quality improvement and lead-abatement services.

Of the $120 million, $49 million is going to programs in seven states: Illinois, Maine, Idaho, Michigan, Nevada, Oregon and Washington, each of which will see about $7 million.

The announcement comes at a time when the Weatherization Assistance Program saw its highest monthly total ever, with more than 31,600 home weatherized nationwide in June, well above the target of 25,000 a month. The three states reporting the highest monthly totals were Illinois (2,957), California (2,701) and Texas (2,649). In all, 286,722 U.S. homes have been weatherized from January 2009 through June 2010.

Source: Department of Energy

Source: NARUC

On Earth Day 2010, a dedicated group of 8- and 9-year-old students at South Shore Public Charter School in Norwell, Massachusetts, learned they had been chosen America’s Greenest School, beating out  550 other schools. The children erupted in a happy frenzy. Their entry, a mock-newscast and tour of the school’s numerous green initiatives, landed them first prize in a contest with over a million ballots cast for the top 10 projects.

When the award was announced in her classroom, “I actually heard the cheers from all around the school,” said teacher Sarah Roberts. The school will receive a hybrid bus from the contest sponsor, IC Bus, as well as a $20,000 green audit to improve the school building, $3,000 in scholarships and a concert by the contest’s official band, The Maine.

IC Bus will deliver one of its new plug-in hybrid electric school buses, valued at $200,000. The new bus uses an induction electric motor, lithium ion batteries and power-management software to improve fuel economy by up to 65% and reduce greenhouse gases by up than a third.

Ewan Pritchard poses on one of Wade County’s hybrid school buses. Photo by Roger Winstead, North Carolina State University

“The plug-in hybrid kind of gives you all the benefits of the electric vehicle as well as the reliability of both systems added on to one another,” says Ewan Pritchard, program manager of the Advanced Transportation Energy Center (ATEC) at North Carolina State University and a consultant for the nonprofit research group Advanced Energy, where in 2002 he launched a program looking into the potential of the plug-in hybrid electric school bus. “What we have here is not only the first plug-in hybrid electric school bus in the world. We have the first commercially available plug-in hybrid in the world.”

School buses transport some 26 million school children each school day in the United States. The vast majority run on diesel fuel, annually using more than 300 gallons of diesel per child passenger. The emission of particulate pollutants from diesel engines has long been a known source of poor air quality. Exposure is particularly dangerous for children because they breathe in 50% more air per body weight than do adults. Along with many states, the U.S. Environmental Protection Agency (EPA) has long investigated how to reduce children’s exposure to diesel fumes during trips and from bus idling.

Since 2006, federal law has required all diesel-powered vehicles to run on low-sulfur diesel fuel, which has helped reduce the emission impact of diesel engines. All the same, the EPA lists 40 individual chemical compounds in diesel exhaust as toxic air contaminants that cause cancer. Cleaner alternatives such as propane and natural gas are available but have been slow to catch on.

In 2001, the Coalition for Clean Air and the Natural Resources Defense Council released some startling research. Based on careful monitoring of school bus fleets in California, researchers concluded that a child riding inside of a diesel school bus may be exposed to as much as four times the level of toxic diesel exhaust as someone riding in a car ahead of it. Around the same time, Advanced Energy’s Pritchard began to investigate the feasibility of bringing plug-in hybrid technology to the school bus market.

Pritchard had examined the possibilities of the plug-in hybrid school bus in his master’s thesis at nearby North Carolina State University, where he’s currently pursuing his doctorate. He found that plug-in hybrids could save school districts money and cut emissions. Pritchard estimated that such buses could achieve a 95% increase in fuel economy by drawing power from the battery pack for the first 45 miles of a trip, with a 40% improvement the rest of the way. School buses travel an average of 50 to 150 miles per day.

Conventional hybrids charge their batteries through regenerative braking while driving, whereas plug-in hybrids also recharge by plugging into the electric power grid while stationary. The internal combustion engine and electric engine in plug-in hybrids are separate but parallel systems. Plug-in hybrids typically have more battery capacity and a different control strategy than standard hybrid vehicles, as well as a method for plugging into a charging station or outlet.

Advanced Energy chose to pursue plug-in hybrid technology with rechargeable batteries over conventional charge-sustaining hybrid systems. They did so because plug-ins had the potential to reduce harmful tailpipe emissions more substantially than conventional hybrids could. With plug-in technology, the capability could exist to drive the bus solely on the rechargeable batteries while near schools or other locations where children would be nearby. In short, for school buses, reducing harmful diesel fumes remains even more important than raising fuel economy.

“Plug-in hybrid technology offers the benefits of potentially reducing harmful emissions, diesel fuel consumption and the maintenance costs of buses,” says Ken Dulaney, director of the industrial and commercial solutions division at Advanced Energy.

“We have 35 kilowatt-hours’ worth of lithium-ion batteries,” says Pritchard about the resulting buses. “We can fill them from the electric port on the side of the bus. For the first 44 miles of its daily trip [the bus is] predominantly pulling electricity from that battery pack and adding it to the drive shaft [in order ] to reduce the fuel consumption.”

The Hybrid Electric School Bus (HESB) project also evaluated the buses’ technical and economic feasibility. They produced a basic design for the buses and examined the economics of the buses from a school district’s perspective. Advanced Energy then formed a buyers’ consortium to guide the manufacture of the buses, identify funding for the buses and serve as the initial purchasers of the first generation of the hybrid buses. The consortium included school districts in 12 states who agreed to rigorous performance monitoring on the buses.

Among other findings, their technical feasibility study revealed two key gaps. Bus manufacturers needed a reliable, powerful hybrid drive system that could integrate the combustion and electric engine power for heavy vehicles such as school buses. Electric drive system manufacturers needed an adequately funded pilot group of heavy-duty vehicles for which to develop the new inverter innovations to commercial scale for deployment.

Moreover, a big economic hurdle remained: startup funding and knowledge transfer sufficient to help this program cross the valley of death between initial technology development and successful market deployment. The project’s original manager, Ward Lenz, describes it as “a chicken-and-egg situation” that required bringing potential manufacturers and purchasers together for a technological step forward that would be expensive at the outset.

By mid-2005, Advanced Energy’s HESB team had amassed sufficient technical and economic information to submit a cost-sharing application to the State Technology Advancement Collaborative (STAC), a pilot program to spark energy-related innovation by leveraging expertise and funding across state lines. STAC was funded by the U.S. Department of Energy and administered by the National Association of State Energy Officials (NASEO) and Association of State Energy Research and Technology Transfer Institutions (ASERTTI) between 2002 and 2007.

“The STAC funding was critical to enabling the project. The initial costs of the plug-in hybrid buses were very high, and these funds helped offset those costs,” says Staci Haggis, a project manager at Advanced Energy.

STAC agreed to fund $840,000 of the $1.89 million price tag on the delivery of up to 20 hybrid school buses. The project’s participants would contribute the remaining $1.05 million in cost-sharing and in-kind services.

As a result, Advanced Energy and the buyer’s consortium developed detailed specifications for the new buses and then put out a call for RFPs from several bus manufacturers. They chose IC Bus, a well-established bus manufacturer, which partnered with Enova Systems for the hybrid drive system.

“We’ve been doing this for almost 20 years,” says James Baladamenti, Enova’s global marketing director. “Our system will integrate into a broad range of chassis platforms, and we have the expertise to integrate the drive systems with the other vehicle functions, such as ABS brakes, air conditioning, heating and power steering.”

Of the three hybrid drive technologies that Enova has developed, the post-transmission hybrid drive system promised the most benefits for use with the IC Bus chassis platforms. In this drive system, the electric motor and combustion engine work in tandem, assisting each other to drive the wheels during acceleration. When the driver brakes, the electric motor recharges the batteries. Another benefit of this drive system is that it could be easily integrated into a production line or as a retrofit onto an existing diesel engine bus.

The requirements specified by the buyers’ consortium included performance standards, battery-depleting ranges and the life cycle cost of the bus. In 2007, IC Bus and Enova delivered the first plug-in hybrid electric school buses. As of mid-2010, Advanced Energy is monitoring 15 hybrid buses located throughout the country, with several others deployed independently beyond the scope of the program.

“STAC did have a long-lasting impact. When the STAC funding came through, that boost enabled the project to happen,” says Haggis. “If we had not had STAC funding, it is fair to say that we would not have plug-in hybrid school buses on the road today.”

What has Advanced Energy and the buyers’ consortium learned from the testing and monitoring program? Real-world data on performance suggests that fuel economy can be increased substantially by replacing conventional diesel with a plug-in hybrid bus. When operating in charge-depleting mode during neighborhood driving characterized by many stops and starts, somewhat hilly terrain and slow speeds, the hybrids’ median fuel economy was approximately 75% higher than the median control bus fuel economy. The savings on intra-city or highway routes were lower—47% and 2%, respectively.

The monitoring program did not take direct measures of tailpipe emissions. The estimated benefits of plug-in hybrid bus specifications point to a potential reduction of particulate matter by as much as 90% and a 60% reduction in NOx (oxides of nitrogen) emissions.

“It’s is not just the hybrid technology that you have to adjust to optimize bus performance. All the other parts of the bus transport system—from the bus driver to the route planner to the mechanic—can have a major influence on fuel economy and emission reduction,” notes Dulaney.

Four important observations emerged about the plug-in hybrid electric school buses.

Three address the human components of the system. First, route selection is critical to performance. Plug-in hybrids perform best on routes that have low average speeds and many starts and stops.

Driving style can affect fuel economy achievements. The highest efficiency derives from nonaggressive driving techniques, accurate and timely data collection and maximizing midday recharging time for the battery set.

Maintenance personnel must be trained to troubleshoot and repair basic hybrid system issues. If maintenance staff are not trained on subsystems specific to plug-ins, the hybrid vehicles may suffer excessive downtime for even relatively minor technical issues.

Availability of charging infrastructure may help to improve fuel economy savings. Installing multiple charging locations would allow batteries to recharged midday. The fewer miles a bus travels solely to reach a power plug, the higher the fuel savings.

The estimated benefits of operating a plug-in hybrid bus include a greatly reduced annual fuel cost. If a school district’s electricity rates are $.10/kWh, and a plug-in hybrid bus achieves 1.25 miles per kWh while operating on battery and 7.4 miles per gallon while on diesel, the plug-in’s electricity cost is the equivalent of $.60 per gallon. That is a huge savings compared to diesel prices of $2.80 per gallon.

These developments open new customization options for school districts beyond reducing tailpipe particulate emission and fuel consumption. In early 2010, IC Bus delivered a CE Series plug-in hybrid bus to Irvington High School in Fremont, California, that had been customized with a smaller wheel base and special-needs lift in order to make the bus accessible to wheelchair-bound students. The goal was to reduce the cost of transporting special-needs students.

According to David Hillman, director of marketing for IC Bus, “The last few rows of seats are removable, making room for up to four wheelchairs. This enables students to go with their classmates on field trips, rather than being transported in a parent’s car or another van.”

Data being gathered by North Carolina State University from the plug-in hybrid bus in nearby Wake County and hybrid buses in other districts will be used to make future improvements. Going forward, Advanced Energy will focus on the development of second generation bus technology that includes a full ‘engine off’ drive capacity. This would allow a bus to operate solely on batteries as it approaches a line of waiting school children, emitting no exhaust while the children are boarding or disembarking.

“This is just the beginning of plug-in hybrid school buses,” says Ewan Pritchard. “We’re helping drive the momentum forward and helping the manufacturers understand what they need to know to get the vehicle to be even better.”

Like many states, Pennsylvania has a few programs that encourage retrofitting and other home energy improvements. But the Commonwealth is also pioneering a new approach: energy-efficiency financing as an investment — one with a respectable return, no less, and one that has the potential to be bundled and sold on a secondary market. Known as the Keystone Home Energy Loan Program (HELP), the program offers fixed-term, unsecured loans with fixed interest rates lower than typical unsecured financing options such as credit cards or short-term bank loans. It has a tiered structure that rewards more intensive improvements: the higher the efficiency, the lower the interest rate.

These characteristics make it unique. But what’s equally unusual is its funding source: the Pennsylvania Treasury, which provided the core capital of $20 million to launch the program in 2006. Since then, Keystone HELP has made $42 million in loans to 7,000 homeowners. And the Treasury department has made money, with an average return of 4% to 5%.

Photo by Matthew Lester

The man behind the plan is Keith Welks, Pennsylvania’s deputy state treasurer for fiscal operations. “We believed there had to be an opportunity to make a reasonably market-based return on energy efficiency that would bring a return to the investor—that being us—and a benefit to the homeowner that could be squeezed out of the savings in fuel conservation,” Welks says. “Our goal is to make money on the Commonwealth’s assets, and save energy as a byproduct of that.”

With that idea in mind, in 2005 Welks contacted Peter Krajsa, CEO of AFC First, a financing corporation specializing in home energy loans for the last decade. Its EnergyLoan program operates in 25 states. At the time, AFC First, one of only three Fannie Mae–approved energy lenders and the only one on the East Coast, was running a pilot program with West Penn Power Sustainable Energy Fund (Allegheny Power) to provide loans with lower interest rates for Energy Star and other high-efficiency improvements to homeowners in a dozen Pennsylvania counties.

The program’s goal was to finance improvements whose costs fell in what Peter Krajsa calls the “twilight zone”: between $2,000 and $20,000. “It’s too much to put on a credit card and too little to let a home equity loan,” he says.

Homeowners looking for an unsecured loan in this range needed a fixed-rate, fixed-term option whose terms wouldn’t bleed them dry. “You can’t get that kind of financing at a local bank,” Krajsa says. “The most you’ll get is two years. And the Fannie Mae regular rate is 14%. But for most people that’s a better option than a 22% credit card.”

The problem is, Krajsa, says, “If you need to offer below-market interest rates, where is that money going to come from?”

And that’s where the Treasury, on the hunt for green investments, came in, with an initial investment of $20 million. (During the pilot, West Penn had provided the core capital, while AFC First had covered the administrative costs.) And so Keystone HELP was born.

For the first three years, the model was market-driven, with one loan rate. The first year it was 7.99% for 10 years, the second and third years 8.99%. The treasury’s yield was based on national benchmarks for similar programs (though there was really nothing like it on the market—more on that later).

Then, in 2008, the state legislature passed the $680 million Alternative Energy Investment Act, which included $92.5 million over eight years to foster energy efficiency in home and businesses. In conjunction with the Pennsylvania Housing Finance Agency (PHFA), the Pennsylvania Department of Environmental Protection (PDEP) was tasked with spending $5 million of this money annually.

A key player was Maureen Guttman, executive director of the Governor’s Green Government Council, a division of the PDEP that spearheads sustainability practices among state agencies and is the go-to source for green-building policy for the state.

“We considered a lot of different ways to develop a program that would offer loans or rebates for residential Pennsylvanians,” Guttman says. “The Keystone HELP program that was already in place was a really nice program that we could use.”

That first year, DEP used the money—$3.5 million for Keystone HELP and $1 million for rebates—to rewrite the loan program, help buy down interest rates, do contractor training and interest contractors who help sell the program, says Guttman.

The result was a revamped loan program with a tiered structure that rewards higher levels of energy performance. With household income eligibility capped at $150,000, the first three are unsecured, fixed-rate and fixed-term (three, five or ten years) loans for $1,000 to $15,000. The first offers a 6.99% rate for heating, cooling, windows or insulation improvements that Energy Star–qualified. The second drops the rate to 5.99% for heating, cooling, closed loop geothermal and insulation improvements that exceed Energy Star standards. The third goes even lower, with a 4.99% rate for whole-house improvements suggested by a certified energy auditor that will yield an efficiency improvement of at least 15%.

There’s also fourth option: a variable-rate, fixed-term secured loan that shares the same whole-house approach of the 4.99% loan but raises the loan minimum to $5,000 and caps it at $35,000.

There are also home-financing options available through the PHFA-administered Energy Loan program for borrowers who aren’t eligible for HELP.

A new 2.99% loan that follows the Home Star model will be available by the end of the summer. To qualify for the rate, the homeowner must get an energy audit and then make the specific improvements recommended by the auditor.

Krajsa says the average loan is about $6,500. He says most of these loans are reactive: “People tend to make energy improvements when their furnace blows or something.”

“As far as we can tell, this program is working really well as a public-private partnership,” says Guttman. “We’re going through money faster than we expected.”

But how does it perform as an investment? Pretty well, says Welks.

So far, Keystone HELP has proven to be a reliable investment, though admittedly a small one for the state. Valued at about $14 million for fiscal year ending 2009, Keystone HELP constitutes less than 4% of the Pennsylvania’s common investment pool’s strategic investments, which is itself only about 5% of the state’s overall portfolio. Still, the return rate has been healthy, averaging between 4% and 5%. It’s been outperforming the rest of the portfolio since the economic meltdown in late 2008.

“We’re very pleased about that, but keep in mind it’s a very small amount,” Welks points out. “In terms of actual dollars generated, it’s still a very small number.” The success of Keystone HELP has its key players looking to expand it. And to do that, the program needs more money. Treasury currently holds $30 million in loans. The solution, they say, is to develop a secondary market. Selling bundled loans on a secondary market would reduce risk and free up more core capital to reinvest in loans.

Welks says, “We know what the elements are: a well-designed product; a reliable delivery network; quality contractors so that the homeowners are confident they’re getting what they pay for; and capital delivered at a good price. To get a good price, we need a secondary market to get the money to fund the next round of loans. We know how to do this. It’s not like trying to create a dairy farm on the moon.”

They also created a loan-loss reserve equivalent to 5% of the portfolio. Though the default rate has been less than a half-percent, “we want to be very conservative,” Welks says. “We think prudence is the better driver here.” It’s funded by grants from the Pennsylvania Energy Development Authority (PEDA) and the Department of Community and Economic Development (DCED), with additional funding from the PDEP.

Developing a secondary market has been “exciting, challenging, a real opportunity,” he says. “We’ve had a lot of good input from a variety of economic and financial sectors. We’re trying to create a product that investors find attractive, and one that consumers will use.” Welks expects the portfolio to be available to investors by the end of the summer.

There are national implications for the creation of secondary market for home energy loans. But there are also barriers. Core capital is one. The lack of national standards for certified, trained contractors is another, Krajsa says. AFC First relies on a network of 1,600 contractors it manages and monitors to refer consumers to AFC First for home-improvement financing. But those contractors need to know what they’re doing; the lack of BPI-certified contractors nationwide is problematic.

Still, HELP is attracting national interest. “We field phone calls from people around the country asking whether they can set up programs that are like HELP or have elements of HELP,” says Welks. “There’s clearly an enormous opportunity for Americans to take much greater control over their energy fuel bills through energy efficiency retrofitting. Done well, on most houses, a properly costed investment in energy efficiency will pay for itself.” Howard Banker of the Energy Programs Consortium added, “The Pennsylvania Treasury program is an good model for other states to follow.”

When it comes to American Recovery and Reinvestment Act of 2009 (ARRA) expenditures, production, and job creation, there is good news for the Weatherization Assistance Program (WAP) network. As of the end of May 2010, Grantees have spent over $1 billion to weatherize 134,000 homes under ARRA, saving American families more than $47 million on their energy bills. An early look at June production numbers strongly indicates that the network has reached the targeted goal of 30,000 homes a month.  According to reports for the second quarter of 2010, WAP has supported nearly 13,000 jobs. It now looks like the network will achieve the original goals set forth for ARRA WAP.

Photos courtesy of The New York State Weatherization Directors’ Association (NYSWDA)

It’s not easy to expand a program tenfold at the drop of a hat, as WAP had to do with the influx of ARRA funds.   Officials foresaw the obvious difficulties—hiring and training many new workers, maintaining quality work, and procuring vehicles, equipment, and tools.

That turned out to be the easy part. More challenging were delays caused by confusion over wage standards mandated by the Davis-Bacon Act (states had to wait until September 2009 for all wage determinations to be complete) and the requirement that any dwelling older than 50 years be reviewed by the State Historic Preservation Office (SHPO) before weatherization could begin. In February, DOE approved a prototype programmatic agreement between DOE, state energy offices, and SHPO agencies that Grantees can use to streamline that process.

Agencies have steadily overcome these difficulties. And the latest numbers show it. In January, the network weatherized 13,000 homes nationwide. In February, that number jumped to 18,000, and in March to 25,000. April took a slight dip to 23,000, but in May the number jumped back to 25,000.  June production numbers are being finalized as we go to print, but all indications point to more than 30,000 units completed, by far the largest number in the history of the WAP.

Many states with slower than anticipated starts, among them Nevada, Minnesota, and Illinois, are gaining momentum now. All three cite the wait for Davis-Bacon wage rates as the primarily cause of delay.

Suzanne Martin, Nevada’s WAP program manager, says new EPA guidelines on lead removal were a factor too, as many contractors needed to be trained. Her program received an additional $37 million for weatherization.

Nevada was able to speed up its program for a few reasons. “We are a smaller state, which allows for a very hands-on approach,” Martin says. Two quality-control inspectors/trainers provide technical support “wherever the need and whenever.” Nevada WAP also collaborated with the Nevada Department of Employment, Training, and Rehabilitation. “This partnership enabled the state to support weatherization worker-training facilities and quickly provide trained individuals to contractors so they could weatherize a higher number of units,” she says.

By June 30, Nevada weatherized 3,753 residences— two-thirds of their ARRA goal. They have spent about $12 million—about one-third of their total ARRA funding.

Davis-Bacon continues to be an issue in Minnesota, though the pace of work has since picked up. “Some contractors in rural areas do not want to work for our service providers because of the required paperwork,” says Marilou Cheple, the state’s WAP program manager. “Other impediments included expanded procurement procedures, finding enough auditors who could quickly be trained, hiring crew members, and hiring office workers who could assist with software program entry.”

Once the Department of Labor released the Davis-Bacon wage determinations, however, Minnesota hit the ground running, largely due to its network of experienced weatherization coordinators and workers, says Cheple. As of June 30, some 6,300 homes had been weatherized in 2010. The second half of the state’s ARRA funding, —$131.9 million— which is only released once the state hits certain benchmarks, came through in July. The goal is to weatherize more than 16,800 homes in all.

Illinois was the last state to receive the Davis-Bacon wage rates, in the second week of September 2009, says Randy Bennett, program manager for Illinois Home Weatherization Assistance Program (IHWAP). But they didn’t want to wait. “Without the vital Davis-Bacon wage data, we decided to concentrate our efforts on weatherizing over 5,000 non-ARRA homes during the summer and early fall,” he says. At the same time, IHWAP began Davis-Bacon training for its agencies in September and October. “We trained 220 new energy auditors and final inspectors and over 500 contractors,” says Bennett. With staff in place, they finally began ARRA weatherization in November.

By May 2010, IHWAP weatherized 30 percent of their goal, triggering the release of the full $242 million from ARRA. So far this year, Illinois has weatherized 11,200 ARRA homes and 7,500 non-ARRA homes. The state also hired 10 staff members, which will increase quality oversight. Now, Bennett says, “The Illinois Weatherization Network is moving along at full steam.” Its goal is to weatherize 26,933 homes.

The success of WAP will be a gateway to the emerging green residential energy-efficiency market, with WAP practitioners and technology playing an important role.

Of the $5 billion made available to WAP through the Recovery Act, 20 percent is for training and technical assistance, with $854 million going to the states. The goal is to tap the vast expertise of the weatherization network to help grow the training infrastructure needed to support a national residential energy efficiency retrofit market, according to Recovery.gov, the official website for ARRA. And it’s working: of all the programs funded under ARRA, WAP ranks eighth in job creation, with a reported 12,983 jobs during the second quarter of 2010.

Training for the Green Economy

Photos courtesy of The New York State Weatherization Directors’ Association (NYSWDA)

The huge increase in Weatherization Assistance Program (WAP) American Recovery and Reinvestment Act of 2009 (ARRA) funding was a real game changing event. Rarely does a government program receive a one-time appropriation so large that it fundamentally alters it.   The $5 billion in ARRA funds will be spent by March 2012, but that doesn’t mean there won’t be a longer lasting effect on the strength of the Weatherization network and influence on the larger building sector. Most ARRA WAP funding will be spent weatherizing an unprecedented number of homes, but the WAP training enabled by the expansion of funding for Training and Technical Assistance will also have a sustained impact.  The New York State Weatherization Directors’ Association (NYSWDA) has taken into consideration just that, by developing a state-of-the-art training center that both trains weatherization workers and passes on institutional knowledge to the wider building community and emerging green retrofit industry.

NYSWDA designed their training centers, in East Syracuse, NY, to give contractors at a variety of experience levels hands-on training and certification in weatherization—and more. Trainers use a wide variety of 17 working heating units to train students in combustion efficiency testing, troubleshooting, and repair. Classes for installation training on the latest home heating technology and domestic hot water systems are also available. A state-of-the-art pressure diagnostic training house provides an immersive experience for students to learn how to use this aspect of building science in the field, allowing trainees to see first-hand how air can escape from a house under varying conditions and how to locate that loss from diagnostic readings.

NYSWDA’s 20 classes range from beginners’ courses in the basics of weatherization and safety to a five day BPI Building Analyst certification course. Both WAP employees and nonemployees can study specialized subject matter,  such as single-home auditing, high efficiency (90%+) furnace installations, heating system cleaning and tuning, BPI certification in manufactured housing, and many more.

A five-day Boot Camp intensive course introduces trainees to building science principles and hands-on air sealing, dense pack, and loose fill cellulose insulation installation. Using realistic wall, ceiling, and attic props, trainees learn the necessary techniques to weatherize homes effectively.

In 2009 alone, the number of contractors who attended NYSWDA’s training center in Syracuse tripled to 900, including 400 who were not employees of the WAP. So far, 2010 has been even busier, with 1,866 trainees, 21% of whom aren’t WAP contractors.

As the need for weatherization expands, so too does the need for trained contractors with broad skill sets. For NYSWDA, this growth signals the potential for collaborations outside the WAP network—and a continuing role in the development of the emerging green retrofit market.

Andy Stone, Director of NYSWDA, says this shift is part of a larger economic trend. “We anticipate the groundswell toward the green workforce will continue,” he says. “As state and national programs develop as a result of an invigorated energy policy, we are taking advantage of this emerging ‘green worker’ market and positioning ourselves to be a primary trainer in our region.”

NYSWDA has informal agreements with several Community Action Agencies to provide training to their Workforce Development and Youthbuild Programs, both of which help people with minimal job experience, a lack of marketable skills, or criminal records gain the skills they need to be employable. They also work with the Concerned Citizens Action Program, an advocacy group in Syracuse, on its construction employment programs.

NYSWDA contracts with the New York State (NYS) Office of Children and Family Services to provide green workforce training to troubled youth as well. Mark Redmond, NYSWDA’s director of training, offered the Boot Camp intensive course at the Allentown Detention Center. “These are first-time offending youth who can be offered a second chance in our growing market,” says Stone.

The Boot Camp model is proving so successful that NYSWDA plans to replicate it for two BPI certifications: Installer and Crew Chief. Many of the props used in the basic Boot Camp training can also be used in the hands-on section of the BPI certification testing, serving double duty in the training center.

These BPI-centric courses reflect new guidelines issued by the NYS Division of Housing and Community Renewal, the Grantee for the state’s Weatherization Assistance Program. BPI is now the certification standard for weatherization staff.

“We saw this as an opportunity to build on our existing curriculum and be the primary delivery mechanism for BPI certifications for the WAP network,” Stone says. “We are continuing to tailor our training curriculum to meet the needs of BPI’s testing and DOE’S new standards for weatherization.”

In addition to traditional home audit and weatherization skills, the center has added healthy homes initiatives, including a one-day Lead Renovator course, developed in response to the EPA’s new Lead Renovation, Repair and Painting program (RRP), which mandates that contractors be trained and certified in how to remove lead paint without exposing children to highly dangerous lead paint particles. Nearly 540 contractors have taken the EPA certified lead renovator course at NYSWDA so far in 2010.

Three years of ARRA funds are intended to generate jobs in the immediate economic downturn. NYSWDA’s efforts go beyond strengthening the contractor network and begin to tackle the challenge of growing the whole-house retrofit talent pool and market.

David Coen

Q: Congress is considering a new energy bill. What provisions are you watching most closely?

We will be paying close attention to a number of issues. Number one is whether Congress will address carbon reduction. NARUC supports a well-designed federal policy for reducing carbon emissions because the economic uncertainty of inaction is hampering investment in energy infrastructure. Our consumers are the ones who pay the costs of building new generation and transmission projects, and without a clear plan from Congress, those costs are going to grow.

Although we have not taken a formal position on whether cap and trade is the best approach to reducing carbon, we believe that if Congress pursues such a path, it can do so in a way that does not overburden the consumer. We fully expect new climate rules to increase power prices, just as we fully expect prices to go up even without carbon restrictions. But we believe Congress can ensure that the consumers who will be paying for the infrastructure upgrades also share in the benefits of a cap-and-trade market.

Here’s how: Congress can allocate any free emission allowances for the electric utility sector to consumers through their regulated Local Distribution Companies [LDCs]. The key word there is “regulated.” LDCs are regulated by NARUC members in every state. This means that the state commissions will be obligated to treat any proceeds derived from these credits as income that must be shared with their ratepayers. This can be done through a number of ways—either through direct rebates on consumers’ bills or through investments in energy efficiency and clean-energy programs.

Since our members deal with these issues every day and know what is in the best interest of our ratepayers, we believe our members should be given a sufficient amount of flexibility to use those proceeds in state-specific ways. There is no need to unnecessarily tie our regulatory hands, particularly when energy efficiency and clean-energy programs are essential to reducing our emissions.

We also have concerns about efforts to preempt state authority over transmission siting. We believe consumers are better served when decisions about where new power lines will go are best made by the state regulators who know the area best.

Q: What steps can state energy commissions take to help lay the groundwork for a clean energy economy? How can the federal government support the role of commissions?

Taking the first part of that question, I will tell you that states have already built the foundation for a clean-energy economy. Our members, either by legislative fiat or on their own authority, have implemented every kind of clean-energy program under consideration by the federal government. From decoupling to aggressive demand-side management programs to renewable portfolio standards, the states have done and continue to do it all. If Congress does end up passing climate-change legislation, the work we’ve done at the state level will make the transition much easier. We’re not starting from scratch, and for that we have our state agencies, legislatures and governors to thank.

For the second part of the question, I would recommend that the federal government continue to let us do what we do best: innovate. Everything we’ve achieved in Vermont, for example, has all happened on our own. Our Efficiency Vermont utility has saved energy and money, and we did it without a federal mandate. California has also implemented groundbreaking efficiency initiatives, and just about every other state has followed suit with some kind of appropriate measures. So I would ask the federal government to let us continue to learn from each other and promote innovative clean energy programs.

Q: Federal cap-and-trade legislation looks increasingly unlikely in the foreseeable future.  If the federal government does not move forward with either cap or trade provisions, do you see states taking the lead by implementing initiatives like RGGI (Regional Greenhouse Gas Initiative)? Would you envision such state actions having a funding—trade—component that would fund energy efficiency and renewable-energy programs?

Well, RGGI has been up and running for about two years now, and states in the West and Midwest are working to set up their own regional trading programs. So I think state agencies have already taken the lead.

Right now RGGI is set up so that states can use the revenues for various activities, including efficiency and renewable energy. In Vermont, because we already have a strong electric efficiency program, we’ve used RGGI revenues for heating and process-fuel efficiency programs. Other RGGI states have used revenues to develop or strengthen efficiency programs. These investments save consumers money while also reducing carbon emissions.

We’ve left it up to the individual states to use those revenues as they see fit. The results are positive and we believe can serve as a model for a broader federal plan.

Q: What do you see as some of the major national challenges facing public service commissions, and how do you see organizations like NARUC helping to address those challenges?

Like all state agencies, we are impacted by the current financial situation. Many of our members are furloughing staff and taking other measures to scale back on costs. This is an unfortunate situation, but we are dealing with it as best we can.
The economy is also taking its toll on the consumers we serve. This is a real challenge for us as we gear up to spend a lot of money on new energy and telecommunications infrastructure. Even if Congress does not pass climate legislation in the near future, investments in the clean-energy future still must be made, and those investments will be paid for by our consumers. As regulators, we have to balance the immediate needs of our ratepayers with the long-term view of our future energy demands and requirements. This is becoming a major issue for our members.

Thankfully, NARUC is well-situated to provide our members with the support they need. Through our meetings and educational opportunities, we are providing state commissioners access to their peers and academic experts. This facilitates the sharing of best practices and allows our members to see how other commissions are dealing with these same challenges. We have established a top-flight training system that helps new members and staff learn on the job. We also have a responsive and accountable leadership chain that gives our members the opportunity to implement new programs and initiatives to improve the association.

Q: Vermont is considered one of the leaders in developing new energy efficiency models and programs. Can you describe some of the challenges the commission faced in developing these programs?

The key to our success in Vermont is effectively communicating the goals we are trying to achieve. Some consumers, particularly large commercial and industrial customers, were primarily concerned with rate impacts. But over time, these customers accepted the new rates. And although [the rates] went up due to efficiency efforts, their overall electricity bills have declined because of the benefits provided by such programs. So most of the challenges we dealt with concerned our communications and outreach strategies. I think the biggest problem is explaining to consumers that although their rates might increase because efficiency investments, their usage and bills may decline.

Q: Do you expect there to be a national renewable portfolio standard (RPS)? Do you and other public service commissioners (PSC) take this into account during the implementation of state RPS’s?

NARUC doesn’t have a position on a national renewable portfolio standard. As you know, the majority of states have some kind of renewable standard or target. While NARUC has not advocated for or against a national standard, it remains clear again that state agencies are well ahead of the federal government on this issue.

While I can’t speak for all states, I do know that some of our members pursued an RPS to spur federal action. That is also why a number of states are participating in the RGGI system as well, because they wanted to take a leadership role.

Q: Offshore wind resources in the East and transmission options being considered that stretch from the Midwest to the East are the source of some tension. How are commissions balancing these issues?

We are balancing these issues by performing our duties as set forth in our various state statutes. Our members are obligated to ensure that any new transmission upgrades are necessary to support reliability and keep on the lights. Siting transmission is not something that can be done overnight, it takes time to find the best routes that will have the least impact on ratepayers.

Our members are certainly aware of the desire to get the renewable resources from remote locations to the load centers. But that doesn’t necessarily mean the best solution is to build a massive transmission line from the Dakotas to the East Coast. You mentioned offshore wind; some states may determine that local resources can best meet their demands rather than trucking in wind from halfway across the continent.

We have to remember what the end goal is. Are we trying to make the system cleaner, more efficient, more reliable and better for consumers? Or are we just hoping to build new lines for the sake of it? These are important questions. Most consumers don’t know or frankly don’t care if their power come from local resources or from several states away. But they do care how much it costs and whether it will be reliable. This is what we should be focusing on: ensuring consumers have better, more reliable and affordable service. State agencies are statutorily required to make this happen.

Q: The advent of federal ARRA Smart Grid funding and collaboration with states and the private sector is unfolding in a variety of ways across the nation. How are commissions engaging in this issue?

The stimulus bill included a healthy amount of funding for our state agencies so we can keep up with all the energy-related projects in the ARRA bill. The Department of Energy has made significant ARRA funding available to our members to focus on these issues. Last year DOE made available about $50 million in ARRA funding to state commissions for assistance in ARRA-related activities. Our members have worked closely with DOE to receive the money and put it to good use.

More recently, NARUC received a cooperative agreement with the Energy Department called the State Electricity Regulators Capacity Assistance and Training, or SERCAT, also funded from the stimulus bill. SERCAT has a few different elements, such as consultant assistance, which allows state agencies to hire expert consults on projects ranging from energy efficiency to time-of-use rate impacts.

Also, ARRA provided $14 million to state commissions and governors’ offices for the establishment of an Eastern Interconnection–wide transmission planning board. The 39 States and the District of Columbia formed the Eastern Interconnection States’ Planning Council (EISPC) in response, and we are beginning our work. EISPC will work with the industry-led Eastern Interconnection Planning Collaborative and study potential transmission development for the entire interconnection.

And as I’m sure you know, the ARRA bill contained seed money for the development of smart grid projects. Although the grants were distributed to utilities, our members play a big role in bringing these projects to fruition. Where applicable, our members are analyzing these projects and determining if they are in the best interest of their ratepayers. State commissions are excited about the potential of the smart grid, but we also must make sure the projects will bring about the promised benefits. No one should be given a blank check, because in this case, they are paying with ratepayers’ money.

Every March, after more than 1,100 arduous miles through mostly tundra, mushers urge their exhausted sled dogs across the finish line of the Iditarod in Nome, Alaska. Locals line Front Street to cheer them on. Snow still covers the ground, and the average temperature is less than 20oF. But sunlight bounces off the snow, and the days are growing longer. Which means it’s the perfect time of year to exploit solar energy.

The Bering Strait Native Corporation (BSNC), whose corporate office is also located on Front Street, knows as much. Atop its roof is a 16.8 kW array of photovoltaic (PV) panels that supply about 15% of the building’s energy needs. BSNC has also installed solar water heaters on two of the apartment buildings it owns in Nome.

Why solar power in a place better known for being dark for months on end? Because as part of a hybrid system with diesel or wind power, solar may help cut the high cost of powering some 200 rural Alaskan villages, many of which must fly in the diesel they use to power their homes.

Photo Courtesy of the Bering Straits Development Company

Lime Village, in southcentral Alaska, is one of them. After its 12 kW combination solar-diesel generation system was installed, average electric prices fell from $1.26 to $.56 per kWh. (After a recent population drop to 15, costs are up again.) The tribal school in nearby Chickaloon uses its solar panels to both cut energy costs and teach students about renewable energy. In the northeast is a third: Arctic Village, whose 3.5 kW solar array is partially equipped with a tracking system—the highest in the world.

Solar power in Alaska has a long history and one that helped lead to the wider use of PV panels. In the late 1970s, Coast Guard Lieutenant Commander Lloyd Lomer proposed installing solar panels on Coast Guard buoys. If the lights on buoys were powered by the sun rather than by disposable batteries that had to be replaced by hand, the savings could be significant. To prove solar’s potential, Lomer installed a test panel on a buoy in cloudy Ketchikan, Alaska. It worked. Today 96% of the Coast Guard’s navigation aids are solar powered, including nearly 4,800 buoys in U.S. waterways.

Alaska gets as much solar energy as Arizona, says Brian Hirsch, team leader for Alaska for the National Renewable Energy Laboratory (NREL); Alaska’s sunlight just happens to be concentrated in a shorter period. Plus, he says, “Solar panels perform much better in the cold. If it’s cold outside, there’s less resistance in the panel. So it can perform 15% better.” Solar, Hirsch says, performs best in March and April when the days are growing longer but the ground is still covered with snow, which reflects the sunlight back up at the solar panels.

Alaska’s energy portfolio is rife with contradictions. Its sources are among the richest in the U.S. Some 90% of the state’s revenues come from petroleum. Nearly 25% of its electric power is generated by renewables, primarily hydropower, and its potential for more is huge.

Yet its lack of infrastructure and small, scattered population undermine its energy efficiency. Alaska has 20% of the U.S.’s land mass but only 1% of its population. As a result, Alaskans on the grid in Fairbanks and Anchorage pay a small fraction of the amount paid by those off the grid.

The Alaska Energy Authority (AEA) knows this. “The disparity between energy costs in various regions is enormous, far higher than that seen in any other U.S. state and approaching levels more commonly seen in the Third World,” according to the Alaska Energy Pathway: Toward Energy Independence, a 2010 report issued by the AEA. The report suggests continued development of renewable sources already well-established in Alaska, particularly hydropower and wind power.

Not surprisingly, solar doesn’t figure into the plan. Utility-scale solar power plants are uneconomical in Alaska with today’s technology, according to the Renewable Energy Alaska Project, a consortium of government, industry and nonprofit agencies.

But hybrid systems can ease the pain of high fuel costs in rural areas. The Alaska Village Electric Cooperative, a nonprofit electric utility cooperative supplying electricity to 53 villages throughout interior and western Alaska, is currently using a $600,000 grant from the AEA’s Renewable Energy Fund to assess the performance of utility-scale solar systems in villages.

Hirsch says solar aimed at heating homes rather than powering them has greater potential in Alaska. “If you were to look at a typical energy profile of a remote village, most energy is used to generate heat, not electricity,” he says. “And it’s easier to generate heat from solar panels than it is to make electricity. Maybe in January or February, it’s not going to do much good. But in March or April it can have an effect. It’s not going to replace all of your need for diesel fuel, but it’s going to supplement it. There’s always a diesel system running in the background. If you put up a solar panel, that generator is still going to run. It’s like easing your foot up on the gas.”

BSNC has developed renewable energy programs for the past 15 years, says Jerald Brown, vice president of the corporation. Most are wind-power projects in villages located in the 2-million-acre expanse of northwest Alaska that BSNC manages, but it’s also installed solar and hot water PVs right in Nome. It was Brown who in 2006 proposed to the BSNC board that they cut energy costs at its corporate office by installing solar panels on the roof. At the time, the price of electricity, supplied by Nome Joint Utility Systems, a municipal utility, was close to $.40 per kW. “So I did a pro forma showing that with the tax credits and bonus depreciation, the payback period was estimated to be about 12 years,” he says. “The panels were warrantied for 25 years with a life of 40, so it was a pretty easy sell.”

Since 2008, the solar panels have supplied about 15% of the power requirements of the three-story, 35,000-square-foot building.

BSNC has had good results with the solar water heaters it installed on two apartment buildings around the same time. One had come with the panels; the previous owner had bought but never installed them. Now they produce about 14 kW a year. “We’re impressed with the results. Our fuel bills have gone down and the water is being preheated nicely,” says Brown.

The other BSNC equipped with evacuated tubes a year ago. “It’s doing so good we had to put a heat dissipater on the building,” he says. “Now we’re looking at ways to capture that heat to put it in the baseboard heating.”

Selling solar in the villages has been more difficult. “In rural Alaska, people don’t typically own their own houses,” Brown says. “It’s relatively low income, and the housing authority provides housing, so there’s not the same level of home ownership that you’d have elsewhere.”

While solar in Alaska may have a perception problem, Hirsch says it naturally fits into the ideal of rugged individualism so prevalent in the Alaskan psyche. “Perhaps the biggest opportunity for solar power is its potential appeal to the classic Alaskan independent who lives off the grid,” says Hirsch. “Like with small-scale wind, people talk about using energy when it’s available—people who are willing to really live with the seasons. There aren’t a lot of people nationally who are willing to do that, but in Alaska, I would say it’s a proportionally higher amount. It gives people a level of energy independence that they wouldn’t otherwise have.”

Most loan terms are less than 10 years. The initial capital can come from a variety of sources: bonds, treasury investments (see “Financing Energy in the Keystone State,” page 36) ratepayer funds or short-term funds like the American Recovery and Reinvestment Act (ARRA).

According to the Alliance to Save Energy, on-bill financing has been available for the business and governmental sectors for a couple of decades. However, it’s only in the past several years that it’s gained steam as a way to finance residential energy efficiency. The DSIRE database of incentives shows that residential on-bill financing is currently available in several states, including Oregon, Alabama and most recently New York.

There are a couple of challenges with on-bill financing. Utilities sometimes have difficulty changing their billing systems to allow on-bill financing. Plus, terms need to be established to determine what happens if a homeowner only partially pays a bill. What gets paid first—the loan payment or the energy bill?

All these problems have been tackled in Oregon, where for the last year Clean Energy Works Portland has operated an on-bill financing pilot program for the weatherization of 500 homes. The program offers a 20-year loan term with 5.99% interest rate on weatherization, space heating and water heating upgrades, or a 3.99% rate on all upgrades for income-qualified homeowners. So far, the average loan is around $10,700.

The city is providing the capital: $2.5 million via ARRA, supplemented by foundation money from ShoreBank Enterprise Cascadia, the fund manager. Three utilities are participating.

Portland has solved the on-bill issues this way. First, it helped each of the utilities cover the administrative costs of making changes to their billing systems, at a total cost of about $26,000. Second, it puts the energy bill first in line for repayment, before the loan. Though as a rule, default rates on utility bills are extremely low—no one wants their lights or power turned off—the city protected itself against bad debt by using a portion of the stimulus money to create a loan-loss reserve. Third, it handles customer-service calls on the loan program.

In return, the utilities manage much of the marketing and outreach, targeting customers with high usage. This approach solves two other issues: it quells utility unease about potentially violating customer privacy, and it creates demand.

That’s key to a program’s success, says Derek Smith, a former policy advisor to the Department of Planning and Sustainability, which oversees Clean Energy Works Portland. “The largest problem—one that’s not unique to on-bill—is creating demand. That’s why it’s a great benefit to have the utilities be a part of the marketing solution. They can target heavy users, and they know what works and doesn’t work.”

So far, Clean Energy Works Portland has 200 homes in the process of being weatherized, and another 200 signed up. The last 100 homes will all be located in one place: the Portland neighborhood of Cully, where Clean Energy Works will attempt a neighborhood-wide program.

That attempt to scale up is soon to be replicated statewide. With only early data but a network of partners in place, Portland was able to secure another $20 million in ARRA funds to expand the program. Clean Energy Works Oregon, a nonprofit headed by president and CEO Smith, will launch in multiple markets around Oregon in the first quarter of 2011. The goal is to retrofit 6,000 homes in three years.

As the program expands, Smith says, there will be an ongoing need to account for the cost of automating and standardizing the data exchange that accompanies on-bill financing. Right now, each of the utilities in the program has a different internal system for reporting on utility payments. They also have different ways of reporting that history to ShoreBank Enterprise Cascadia, which they do daily. The result is a manual system that requires a lot of hand keying and individual interpretation. Standardizing this process would save time and therefore money. “It’s something we need to pencil in and figure out,” Smith says.