Local Energy Plans in Practice: Case Studies of Austin and Denver D. Peterson National Renewable Energy Laboratory E. Matthews Austin Climate Protection Program M. Weingarden Greenprint Denver NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. Technical Report NREL/TP-7A20-50498 March 2011 Contract No. DE-AC36-08GO28308 Local Energy Plans in Practice: Case Studies of Austin and Denver D. Peterson National Renewable Energy Laboratory E. Matthews Austin Climate Protection Program M. Weingarden Greenprint Denver Prepared under Task No. IGST.0002 NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. National Renewable Energy Laboratory Technical Report 1617 Cole Boulevard NREL/TP-7A20-50498 Golden, Colorado 80401 March 2011 303-275-3000 • www.nrel.gov Contract No. DE-AC36-08GO28308 NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. 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Acknowledgments This report was produced with funding from, and in coordination with, the U.S. Department of Energy (DOE) Weatherization and Intergovernmental Program (WIP) in the office of Energy Efficiency and Renewable Energy (EERE). The authors appreciate concept development input and critical content for the report from Alison Culpen (McKinstry, Inc), Anu Ramaswami (University of Colorado, Denver), Gregg Thomas (City and County of Denver), Scott Morrissey (City and County of Denver), and Leslie Libby (Austin Energy). In addition, the authors would like to thank the following individuals, who offered extensive and thoughtful comments on a variety of drafts of this work: • Elizabeth Doris, NREL • Kim Peterson, NREL • Sarah Busche, NREL • Laura Vimmerstedt, NREL • Sheila Hayter, NREL • Nancy Carlisle, NREL • Jason Coughlin, NREL • Courtney Welch, NREL • Alex Dane, NREL • Eleni Pelican, DOE • Michele Betsill, Colorado State University • Beth Conover, Econover, LLC. Finally, we thank Theresa von Kuegelgen of the NREL Communications Office for the technical editing of this document. Of course, any remaining errors are the responsibilities of the authors. NREL’s Clean Energy Policy Analyses (CEPA) The CEPA suite of analyses and activities explore clean energy development and policy implementation at the regional, state, and local levels and disseminate that information to interested stakeholders. The activities gauge the effectiveness of and interactions between clean energy policies, provide insight into regional activities, investigate the interactions between local and state-level policies, and convene leading thought leaders to develop innovative regional, state, and local clean energy policies. The goal is to provide information to decision makers, researchers, and other stakeholders regarding the status of, barriers to, and possibilities for increased energy efficiency and renewable energy development at various levels of governance. For more information, see www.nrel.gov/cepa/. This report focuses primarily on energy use in electricity and buildings. For more information on transportation policies at the state and local level, please see the Alternative Fuels Data Center: www.afdc.energy.gov/afdc/. iii Executive Summary This report examines the successes and difficulties that two large cities, Denver, Colorado and Austin, Texas, have experienced in implementing their respective city-wide energy plans. The report considers factors that have assisted or hindered putting energy initiatives from each plan into practice, including political, financial, and logistical realities. The report also examines the goals and design of each plan, and how throughout the implementation process the cities have altered expectations or the direction of energy initiatives included in the plans. This report provides state and local government policy makers and analysts with a more nuanced understanding of the successes and challenges distinct cities encounter in putting a city-wide energy plan into practice, including the following general lessons from the experiences of Denver and Austin. • Importance of state support: A city without a municipally owned utility (MOU) can develop and deploy local energy programs, but will likely have more options and a greater impact if supportive state-level energy policies are in place. An aggressive state renewable portfolio standard will aid a city in advancing its energy/climate goals by requiring the local utility to supply city residents and businesses with cleaner energy generated from renewable resources. City energy programs also benefit from the establishment of state demand-side management requirements for utilities. • Financial commitment from the city: City funding for staff and energy initiatives provides organizational and administrative stability for the implementation of a city- wide energy plan. A city with an MOU is well positioned to implementing local energy efficiency programs and increase renewable energy supplied to citizens, but will likely need to make a substantial political and financial commitment in dedicating utility revenues for energy program and initiatives. Cities with an MOU can also justify the use of utility-generated revenues on energy efficiency and renewable energy programs and initiatives as a less expensive alternative to purchasing additional generation resource capacity. • Leveraging partnerships with non-city entities: Cities, particularly cities that don’t make a significant city budget allocation towards the implementation of energy programs (either from the general fund or utility revenues), should look to leveraging financial and other resources from non-city partners. These partners can include federal, state, and other surrounding local governments, as well as local utilities, businesses, universities, and community organizations. Partnerships can provide a substantial boost to the impact of and participation in outreach initiatives included in energy plans. • Reliance on federal program funding: Initiatives and programs of energy plans that rely heavily on funding from federal programs will likely be more difficult to sustain and maintain as federal energy program commitments fluctuate. Cities should look to develop energy programs dependent on multiple funding sources, striving to develop energy initiatives that will be viable even if federal dollars are unavailable. • Benefits to targeting government operations: Most cities have the opportunity to advance programs targeting energy use in government operations – including building iv efficiency improvements, green fleets, and installing renewable energy on government facilities. Cities have greater control over government facilities energy use and can directly benefit from the cost savings from energy efficiency improvements. Cities can integrate energy efficiency improvements into capital improvement programs, utilizing existing funds available for building retrofits, equipment replacement, and maintenance. v Table of Contents Acknowledgments ..................................................................................................................................... iii NREL’s Clean Energy Policy Analyses (CEPA) ..................................................................... iii Executive Summary ................................................................................................................................... iv List of Tables ............................................................................................................................................ viii Introduction ................................................................................................................................................. 1 Background on Local Energy Plans ........................................................................................................