Statement Establishing an energy efficiency registry as a tool for state compliance under U.S. EPA's Clean Power Plan September 22, 2014 Energy efficiency has enormous potential to lower energy costs and reduce greenhouse gas (GHG) emissions, therefore mitigating the impacts of climate change. U.S. EPA’s Clean Power Plan (CPP) enshrines energy efficiency as one of the building blocks that states can utilize to achieve their GHG reduction targets. Many states are already implementing innovative energy efficiency strategies and programs. However, energy savings resulting from these measures are projected, estimated, reported, and audited using a range of approaches. This lack of consistency is exacerbated by a lack of transparency when energy savings data are reported and aggregated. A flexible energy efficiency registry is needed to enable and expand energy efficiency programs across the U.S., to pave the way for more financing of energy efficiency projects, and to underpin compliance under the CPP. There are many ways of approaching and implementing energy efficiency; an energy efficiency registry would consolidate these varied efforts and demonstrate compliance and real reductions. Specifically, an energy efficiency registry would: aggregate data from demand-side energy efficiency programs that could be consistently reported to EPA; provide a transparent platform for documenting and communicating the benefits of energy efficiency, as well as the methods for measuring and reporting it; consolidate evaluation, measurement and verification (EM&V) documentation of energy efficiency measures; provide clear and transparent attribution and ownership of energy savings; serve as the foundation for a trading platform for energy efficiency credits for interested states and regions; demonstrate, verify, and track energy and carbon savings – that may then be recorded as credits - generated in partnership with energy service companies (ESCO’s) or as the result of municipal and state policies (i.e. building codes); serve as a platform to share knowledge and build capacity across states and regions. The Climate Registry (TCR), an NGO governed by states and provinces with extensive expertise in measuring and tracking GHGs, with support from the Climate Action Reserve (CAR), has developed a white paper on the energy efficiency registry and how it might be implemented. The paper is available on TCR’s website http://www.theclimateregistry.org/downloads/2014/09/TCR_An-EE-Registry.pdf. We encourage U.S. EPA to recognize an energy efficiency registry as a tool for state compliance under the CPP. We encourage states, utilities and other organizations to support the implementation of an energy efficiency registry, and to reference TCR’s white paper in their comments to EPA on the CPP Rule, which must be received by December 1, 2014. Endorsed by The Climate Registry Executive Committee (U.S. members): Doug Scott, TCR Board Chairman and Chairman, Illinois Commerce Commission Mary Nichols, Chairman, California Air Resources Board David Littell, Commissioner, Maine Public Utilities Commission David Thornton, Assistant Commissioner, Minnesota Pollution Control Agency An Energy Efficiency Registry A Flexible and Transparent way to Track and Report Energy Efficiency under the Clean Power Plan September 1, 2014 Authored by: The Climate Registry with support from: Acknowledgments This white paper was developed by The Climate Registry (TCR) with support from the Climate Action Reserve and substantial input from Kyle Aarons, C2ES; Bill Becker, National Association of Clean Air Agencies; Patrick Cummins, Center for the New Energy Economy at Colorado University; Amy Fredregill, Midwest Renewable Energy Tracking System, Inc.; Dian Grueneich, Stanford University; Lisa Jacobson, Business Council for Sustainable Energy; Christopher James, Regulatory Assistance Project; David Littell, Maine Public Utilities Commission; Katie Mandes, C2ES; Julie Michals, Northeast Energy Efficiency Partnership; Mary Nichols, California Air Resources Board; Janet Peace, C2ES; Steve Schiller, Lawrence Berkeley National Laboratory; Doug Scott, Illinois Commerce Commission; Pat Stanton, Conservation Services Group; and David Thornton, Minnesota Pollution Control Agency. TCR also wishes to acknowledge the support of its Board of Directors, which is comprised of more than fifty North American sub-national jurisdictions, including forty U.S. states, as well as the specific contribution of the Clean Power Plan Task Force, made up of TCR Board Members and representatives from 13 U.S. states, which provided direction and feedback on the value of an energy efficiency registry. The Climate Registry An Energy Efficiency Registry Page 1 September 2014 Executive Summary Energy efficiency has enormous potential to lower energy costs and reduce greenhouse gas (GHG) emissions, therefore mitigating the impacts of climate change. U.S. EPA’s Clean Power Plan (CPP) has publicly recognized the value of and potential for energy efficiency as a climate change mitigation strategy by including demand-side energy efficiency as one of the building blocks that states can use to achieve their GHG reduction targets. While many states are already implementing innovative energy efficiency strategies and programs, energy savings resulting from these measures are projected, estimated, reported, and audited using a wide range of approaches. EPA has indicated that it will accept multiple calculation methods based on current best practices. However, EPA has also acknowledged that the current lack of transparency when energy savings data are reported and aggregated will not be acceptable for energy efficiency measures used for compliance with the CPP. A flexible nation-wide energy efficiency registry would enable and expand energy efficiency measures that could be used for compliance with the CPP by increasing transparency and using a consistent framework to track and report projected and realized energy savings. This tool, coupled with the driver of the CPP itself, would help expand the implementation of energy efficiency measures by enabling broad analysis of the impacts of existing energy efficiency programs, identifying new opportunities for energy savings, reducing risks that limit available energy efficiency project financing, and potentially serving as the foundation for an energy efficiency crediting and trading platform. In this paper we expand on the benefits outlined above and recommend a consensus-based stakeholder approach to develop an energy efficiency registry. Key issues that the registry would need to address are explored and a phased implementation plan is outlined that would incorporate broad stakeholder imput, help states meet compliance deadlines, and evolve with the implementation of the regulation itself. The Climate Registry An Energy Efficiency Registry Page 2 September 2014 savings results” (EPA, 2014c). The document Background went on to specify that two important On June 2, 2014, the U.S. Environmental characteristics of EM&V documentation should Protection Agency (EPA) proposed its Clean be that it: Power Plan (CPP), which will require states to (1) enables recalculation of total program cut carbon pollution from the power sector in energy savings, and their jurisdictions. One of EPA’s proposed (2) is provided in a consistent manner options for states to demonstrate compliance across states. with the forthcoming regulation is the implementation of demand-side energy Increased Transparency through an efficiency measures. By including this option, Energy Efficiency Registry EPA has publicly recognized the value of and Given the diversity of energy savings potential for existing state and utility energy quantification approaches and EPA’s efficiency programs–as well as untapped commitment to flexibility in state opportunities–to reduce carbon emissions and implementation plans,1 regulated entities will mitigate climate change. most likely continue to use different methods to Today, energy savings resulting from energy quantify the impacts of energy efficiency. efficiency measures are projected, estimated, However, credible and verifiable accounting reported, and audited using a range of suitable for regulatory compliance will require approaches. This lack of consistency is greater transparency than currently exists. exacerbated by a lack of transparency when An online energy efficiency registry would help energy savings data are aggregated and states efficiently and transparently project, reported. While it is conceivable that different track, audit, and report energy savings and calculation methods can reasonably be used to relevant supplemental information associated quantify the impacts of similar energy efficiency with energy efficiency measures. It would also measures, the lack of transparency around have the potential to encourage standardization what these methods are and how assessments across states, and facilitate communication and compare, ultimately undermines the credibility knowledge transfer between agencies. of projected and reported energy savings. Some states have well-developed analytic EPA recognized the need for greater methods, assumptions, and data sources to transparency in the evaluation, measurement determine the energy savings related to and verification (EM&V) of energy efficiency demand-side energy efficiency measures. In measures in its technical support document on State Plan Considerations by asserting that 1 In the preamble to the CPP, EPA asserts that