August 24, 2018

Director Al Christopher
Energy Division
Virginia Department of Mines, Minerals and Energy
1100 Bank St #817
Richmond, VA  23219

Director Christopher:

Re: Business Support for Energy Efficiency as Part of the 2018 Virginia Energy Plan

As a group of diverse businesses including manufacturers, service providers, trade associations, and companies with significant Virginia presence, investments, and interests, we support the consideration of energy efficiency as part of ongoing energy planning discussions in the Commonwealth.

Our companies have a successful history of doing business in the Commonwealth and understand firsthand how Virginia’s energy policies affect the cost of doing business and the state’s economic competitiveness.

All Virginia consumers and businesses benefit when we eliminate energy waste. By investing in energy efficiency, we can reduce total energy costs for all customers; mitigate the impact of fuel and electricity price increases; alleviate stress on the electricity grid; and build a more affordable, reliable energy system for the businesses and people of the Commonwealth.

The Commonwealth’s energy efficiency industry generates more than $1.5 billion in revenue and supports about 75,000 in-state jobs.[1] However, there are several indicators that suggest that significant potential to reduce costs, create jobs, and strengthen our economy through energy efficiency investment remains untapped. For example, in 2016 Virginia invested nearly zero percent of statewide utility revenues on electric energy efficiency programs compared with an average 1.20% invested nationally.[2] Virginia also placed 29th in the country on the most recent national rankings for energy efficiency, receiving 15.5 out of 50 possible points. Additionally, the state received 0 out of 20 possible points for its utility policies and programs.[3]

While we anticipate that the energy efficiency provisions of the Grid Transformation and Security Act of 2018 (SB 966) will help to drive new energy efficiency investment in the state, we believe that significant additional potential for energy efficiency investment exists. To that end, as the Northam Administration continues to develop a sound energy plan for the state, we encourage you to consider the following opportunities:

1. Support and participate in the stakeholder process established by SB 966 to provide input and direction on the design of utility energy efficiency programs and ensure that all cost-effective portfolios are developed and implemented. Similar processes in other states have provided a platform for stakeholders to converge on common ground and draw from existing efforts and experience at the utility, state, and regional levels to ensure successful, cost-effective programs. If a separate forum is needed to explore a broader suite of energy efficiency opportunities, the Governor’s Executive Committee on Energy Efficiency could also be reconstituted via Executive Order.
    
2. Establish utility energy efficiency savings targets. A strong and clear expectation that Virginia utilities must invest a base amount in utility energy efficiency programs and services would provide the regulatory and market certainty businesses need to understand and promote opportunities for sustainability and energy efficiency on behalf of customers and clients. To that end, legislation to establish mandatory energy savings targets and to adopt regulatory structures (i.e. utility incentives for meeting energy efficiency program goals) that would encourage utility investment in efficiency should be explored as a complement to the investment level set by the General Assembly in SB 966.
    
3. Update and extend the energy savings target for public facilities. We recognize and applaud Virginia’s leadership to set a goal to reduce public building energy consumption by 15% by 2017 from 2010 levels. We urge you to build upon this vision by adopting a new, ambitious energy savings goal for public buildings and by improving data collection and transparency efforts to track energy consumption by state facilities. Initiatives that help public buildings reduce energy waste should also be supported and continued. For example, the Virginia Energy Management Program, through which the Virginia Department of Mines, Minerals and Energy provides technical assistance to agencies interested in energy savings performance contracting, has a proven track record.
    
4. Invest cap-and-trade set-aside revenues in energy efficiency. A portion of set-aside revenues should be invested in energy efficiency projects. Options could include funding for efficiency improvements in public buildings, combined heat and power (CHP), or to provide technical assistance for energy efficiency projects in the commercial and industrial sectors.

We welcome further discussion on how we can support your efforts to advance energy efficiency policy for the state. We stand ready to work with you and would welcome the opportunity to meet with you and your staff. We would also be happy to provide additional information about the benefits that energy efficiency could deliver for the Commonwealth in the future.

Sincerely,

The National Association of Energy Service Companies (NAESCO)

Schneider Electric

Cree, Inc.

Ameresco, Inc.

The National Electrical Manufacturers Association (NEMA)

[1] “Why Energy Efficiency is a Smart Investment for Virginia,” Virginia Energy Efficiency Council, May 2017

[2] “The 2017 State Energy Efficiency Scorecard,” American Council for an Energy Efficient Economy, September 2017: http://aceee.org/research-report/u1710

[3] Ibid.