Knowledge creators must work on developing metrics...

2009-02-20T07:54:00.000-08:00

Knowledge creators must work on developing metrics and models that can be applied by market participants to leverage Stimulus Energy Investments.

I accept your grades for each policy component. I challenge you to develop metrics and identify research projects that can help market participants leverage outcomes for actions taken as this money is spent.

My blog centers on encouraging knowledge creators to develop metrics that can help market participants create breakthroughs by leveraging stimulus energy investments.

I offer free Green Market Intelligence at http://smecapitalmarkets.net/greenresearch.aspx to help third parties move forward on their paths to offer or develop green goods and services. A gap in most information pieces is that they do not offer meaningful metrics that market participants can apply to their projects. Knowledge creators need to work on developing metrics.

Applying common sense through a process of developing basic research projects can create meaningful breakthroughs. For example, an article in today’s China Daily reports this item “Buses with 300-km battery range to debute in June” > http://www.chinadaily.com.cn/china/2009-02/20/content_7498197.htm Knowledge creators need to organize a project for a viable U.S. based group to acquire one of these buses and fully research its potential to be used in the government’s alternative energy fleet. Analytic distinctions about the government acquiring one Chevrolet volt for $40,000 which carries 1-government employee versus buying one Chinese electric bus for $74,000 that carries 24-people can dramatically change the leveraging factors for this one line item of energy stimulus expenditure.

Another research project encompasses thinking through how knowledge creators can help market participants develop actionable projects to save a Kwh.

Jeff Wacker, authored “SmartGrids – Planning the Intelligent Utilities of the Future” > http://www.eds.com/insights/whitepapers/downloads/utilities_smartgrids_vp.pdf
His article identifies a few drivers that are worth noting.

• “For most utilities, the average cost of generating a new kilowatt hour of electricity is 10 cents, while the cost of saving a kWh is just 1.7 cents.
• Actually shaping the electricity demand curve, without overly impacting the Western lifestyle, will require utilities to employ more intelligent equipment, operations, transmission and utilization solutions. That in turn will force utilities to migrate from the electromechanical to the digital age and encourage them to consider megabytes as well as megawatts and to distribute information bits as well as atoms
• By combining the power of information technology with the emerging science of environmental technology, utilities can create a more intelligent and sustainable business model.”

Wacker’s article also presents a concept for creating “Smart Grid Collaboratories”. Developing a plan to actualize this model may generate initiatives to help improve grades that you have given some of the items in your article. As knowledge creators you can help market participants produce beneficial results by articulating a plan to mobilize resources to organize a nationwide network of Smart Grid Collaboratories. I believe this plan should be designed with a unique mission that helps smaller companies work on projects to offer or develop goods and services that save a KWh or use it more efficiently.

Knowledge creators are more likely to leverage outcomes from these policies and funding programs by defining success as helping the greatest number of smaller companies offer and develop goods and services. Near term, these projects are more likely to achieve measures of success by working in the 100% electricity generating market space where “1.7 cents cost of saving a kWh” goods and services will be accepted by the greatest number of stakeholders versus working on developing projects and technologies that cost substantially more than today’s average 10 cents cost to generate one kWh. However the fact that technology breakthroughs continue to lower the kWh cost for Solar, Wind and other alternatives indicates that these initiatives have merit and knowledge creation models must be developed to help market participants apply viable metrics to these projects as well.

My blog centers on encouraging knowledge workers work on a project development opportunity that has been created by the energy part of stimulus bill.

Earlier this week, I attended the Texas Energy Future: Clean Power and Clean Jobs conference http://www.txenergyfuture.org/ at the Texas State Capitol. A research report was overviewed that offers information which be extrapolated to other areas. The report is: Growing the New Energy Economy in Texas: Renewable Energy Industry and Workforce Development Assessment > http://txcleanenergypark.com/downloads/growing-the-new-energy-economy-in-tx.pdf

Several conference speakers commented about the importance of focusing on energy efficiency projects and especially about funding to support it in the American Recovery and Reinvestment Act of 2009 that has been allocated to weatherization and energy efficiency. Their presentations caused me to think about gaps that exist between workers who can weatherize, insulate, install energy efficiency appliances and do other things to make a home or building more efficient and the knowledge base that is required to apply for funding grants to set up these programs in a community.

The energy efficiency component of the American Recovery and Reinvestment Act of 2009 offers great potential to create immediate jobs for workers but from my perspective some level of knowledge about incubating new projects and seeking grant money must be infused into this component to make it work. This knowledge gap comports with findings in the research report that I mentioned above.

The scope of a project to work on this knowledge gap might be viewed as creating a virtual energy efficiency incubator that focuses on working with utility companies to create a knowledge base that leverages organizing and developing small teams of people to work on weatherization and energy efficiency projects in specific areas. One example of a potential model was presented during the conference. It is the Carrier or Trane air conditioning system distribution model where each town or area has a local distributor who also employees a few air conditioner service repairmen. Larger entities are attempting to execute scaled up models but there are doubts about this being the best way to work on energy efficiency at the home and building level. On the surface it appears that a town or area based company supervising local people to work on weatherization and energy efficiency projects will be more accountable to customers than a large remote entity that is managing hundreds of small work projects from a distance.

Conceptually a modest level of strategic thinking by knowledge creators may make a big difference in the success or failure of spending government grant money for workers to make homes and buildings more energy efficient.

The American Recovery and Reinvestment Act of 2009 > http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf offers funding for people to work on weatherization and installing energy efficiency products. A few sections are listed below.

As knowledge creators I encourage you to organize and develop a virtual project that centers on developing metrics and models to make the weatherization and energy efficiency piece of the American Recovery and Reinvestment Act of 2009 more successful. I believe that this opportunity can be acted on in collaborative model and encourage interested parties and especially knowledge creators to join forces and do something meaningful in this area.

Sincerely,
Brad Smith
SME Capital Markets
www.smecapitalmarkets.net
bradsmith@smecapitalmarkets.net
512-261-3750

The American Recovery and Reinvestment Act of 2009 > http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf

H. R. 1—24

DEPARTMENT OF ENERGY ENERGY PROGRAMS

ENERGY EFFICIENCY AND RENEWABLE ENERGY

For an additional amount for ‘‘Energy Efficiency and Renewable Energy’’, $16,800,000,000: Provided,

That $3,200,000,000 shall be available for Energy Efficiency and Conservation Block Grants for implementation of programs authorized under subtitle E of title V of the Energy Independence and Security Act of 2007 (42 U.S.C.17151 et seq.), of which $2,800,000,000 is available through the formula in subtitle E: Provided further, That the Secretary may use the most recent and accurate population data available to satisfy the requirements of section 543(b) of the Energy Independence and Security Act of 2007: Provided further, That the remaining $400,000,000 shall be awarded on a competitive basis: Provided
further, That $5,000,000,000 shall be for the Weatherization Assistance Program under part A of title IV of the Energy Conservation and Production Act (42 U.S.C. 6861 et seq.): Provided further, That $3,100,000,000 shall be for the State Energy Program authorized under part D of title III of the Energy Policy and Conservation Act (42 U.S.C. 6321): Provided further, That $2,000,000,000 shall be available for grants for the manufacturing of advanced batteries and components and the Secretary shall provide facility funding awards under this section to manufacturers of advanced battery systems and vehicle batteries that are produced in the United States, including advanced lithium ion batteries, hybrid electrical
systems, component manufacturers, and software designers: Provided further, That notwithstanding section 3304 of title 5, United States Code, and without regard to the provisions of sections 3309 through 3318 of such title 5, the Secretary of Energy, upon a determination that there is a severe shortage of candidates or a critical hiring need for particular positions, may from within the funds provided, recruit and directly appoint highly qualified individuals into the competitive service: Provided further, That such authority shall not apply to positions in the Excepted Service or the Senior Executive Service: Provided further, That any action authorized herein shall be consistent with the merit principles of section 2301 of such title 5, and the Department shall comply with the public notice requirements of section 3327 of such title 5.

H. R. 1—32

(b) ASSISTANCE LEVEL PER DWELLING UNIT.—Section 415(c)(1) of the Energy Conservation and Production Act (42 U.S.C. 6865(c)(1)) is amended by striking ‘‘$2,500’’ and inserting ‘‘$6,500’’.

(c) EFFECTIVE USE OF FUNDS.—In providing funds made available by this Act for the Weatherization Assistance Program, the Secretary may encourage States to give priority to using such funds for the most cost-effective efficiency activities, which may include insulation of attics, if, in the Secretary’s view, such use of funds would increase the effectiveness of the program.

(d) TRAINING AND TECHNICAL ASSISTANCE.—Section 416 of the Energy Conservation and Production Act (42 U.S.C. 6866) is amended by striking ‘‘10 percent’’ and inserting ‘‘up to 20 percent’’.

(e) ASSISTANCE FOR PREVIOUSLY WEATHERIZED DWELLING UNITS.—Section 415(c)(2) of the Energy Conservation and Production Act (42 U.S.C. 6865(c)(2)) is amended by striking ‘‘September 30, 1979’’ and inserting ‘‘September 30, 1994’’. SEC.408. TECHNICAL CORRECTIONS TO PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978. (a) Section 111(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by redesignating paragraph (16) relating to consideration of smart grid investments (added by section 1307(a) of Public Law 110–140) as paragraph (18) and by redesignating paragraph (17) relating to smart grid information (added by section 1308(a) of Public Law 110–140) as paragraph (19). (b) Subsections (b) and (d) of section 112 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622) are each amended by striking ‘‘(17) through (18)’’ in each place it appears and inserting ‘‘(16) through (19)’’.

H. R. 1—33authorization provided in section 365(f) of such Act only if the governor of the recipient State notifies the Secretary of Energy in writing that the governor has obtained necessary assurances
that each of the following will occur:

(1) The applicable State regulatory authority will seek to implement, in appropriate proceedings for each electric and gas utility, with respect to which the State regulatory authority has ratemaking authority, a general policy that ensures that utility financial incentives are aligned with helping their customers use energy more efficiently and that provide timely cost recovery and a timely earnings opportunity for utilities associated with cost-effective measurable and verifiable efficiency savings, in a way that sustains or enhances utility customers’ incentives to use energy more efficiently.

(2) The State, or the applicable units of local government that have authority to adopt building codes, will implement the following:

(A) A building energy code (or codes) for residential buildings that meets or exceeds the most recently published International Energy Conservation Code, or achieves equivalent or greater energy savings.

(B) A building energy code (or codes) for commercial buildings throughout the State that meets or exceeds the ANSI/ASHRAE/IESNA Standard 90.1–2007, or achieves equivalent or greater energy savings.

(C) A plan for the jurisdiction achieving compliance with the building energy code or codes described in subparagraphs (A) and (B) within 8 years of the date of enactment of this Act in at least 90 percent of new and renovated residential and commercial building space. Such plan shall include active training and enforcement programs and measurement of the rate of compliance each year.

(3) The State will to the extent practicable prioritize the grants toward funding energy efficiency and renewable energy programs, including—

(A) the expansion of existing energy efficiency programs approved by the State or the appropriate regulatory authority, including energy efficiency retrofits of buildings and industrial facilities, that are funded—

(i) by the State; or

(ii) through rates under the oversight of the applicable regulatory authority, to the extent applicable;

(B) the expansion of existing programs, approved by the State or the appropriate regulatory authority, to support renewable energy projects and deployment activities, including programs operated by entities which have the authority and capability to manage and distribute grants, loans, performance incentives, and other forms of financial assistance; and

(C) cooperation and joint activities between States to advance more efficient and effective use of this funding to support the priorities described in this paragraph.

(b) STATE MATCH.—The State cost share requirement under the item relating to ‘‘Department of Energy; Energy Conservation’’ in title II of the Department of the Interior and Related Agencies

H. R. 1—34
Appropriations Act, 1985 (42 U.S.C. 6323a; 98 Stat. 1861) shall not apply to assistance provided under this section. (c) EQUIPMENT AND MATERIALS FOR ENERGY EFFICIENCY MEASURES AND RENEWABLE ENERGY MEASURES.—No limitation on the percentage of funding that may be used for the purchase and installation of equipment and materials for energy efficiency measures and renewable energy measures under grants provided under part D of title III of the Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.) shall apply to assistance provided under this section.

H. R. 1—208

PART II—INCREASED ALLOCATIONS OF NEW CLEAN RENEWABLE ENERGY BONDS AND QUALIFIED ENERGY CONSERVATION BONDS

SEC. 1111. INCREASED LIMITATION ON ISSUANCE OF NEW CLEAN RENEWABLE ENERGY BONDS.

Subsection (c) of section 54C is amended by adding at the end the following new paragraph: ‘‘(4) ADDITIONAL LIMITATION.—The national new clean renewable energy bond limitation shall be increased by $1,600,000,000. Such increase shall be allocated by the Secretary consistent with the rules of paragraphs (2) and (3).’’.

SEC. 1112. INCREASED LIMITATION ON ISSUANCE OF QUALIFIED ENERGY CONSERVATION BONDS.

(a) IN GENERAL.—Section 54D(d) is amended by striking ‘‘$800,000,000’’ and inserting ‘‘$3,200,000,000’’.

(b) CLARIFICATION WITH RESPECT TO GREEN COMMUNITY PROGRAMS.—

(1) IN GENERAL.—Clause (ii) of section 54D(f)(1)(A) is amended by inserting ‘‘(including the use of loans, grants, or other repayment mechanisms to implement such programs)’’ after ‘‘green community programs’’.

(2) SPECIAL RULES FOR BONDS FOR IMPLEMENTING GREEN COMMUNITY PROGRAMS.—Subsection (e) of section 54D is amended by adding at the end the following new paragraph:‘‘(4) SPECIAL RULES FOR BONDS TO IMPLEMENT GREEN COMMUNITY PROGRAMS.—In the case of any bond issued for the purpose of providing loans, grants, or other repayment mechanisms for capital expenditures to implement green community programs, such bond shall not be treated as a private activity bond for purposes of paragraph (3).’’.

PART III—ENERGY CONSERVATION INCENTIVES

SEC. 1121. EXTENSION AND MODIFICATION OF CREDIT FOR NONBUSINESS ENERGY PROPERTY.

(a) IN GENERAL.—Section 25C is amended by striking subsections

(a) and (b) and inserting the following new subsections: ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 30 percent of the sum of— ‘‘(1) the amount paid or incurred by the taxpayer during such taxable year for qualified energy efficiency improvements, and ‘‘(2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during such taxable year.

‘‘(b) LIMITATION.—The aggregate amount of the credits allowed under this section for taxable years beginning in 2009 and 2010 with respect to any taxpayer shall not exceed $1,500.’’. (b) MODIFICATIONS OF STANDARDS FOR ENERGY-EFFICIENT BUILDING PROPERTY.—

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