Apollo Alliance : Good Jobs, Clean Energy

As America faces rising energy and fuel costs, state and local governments lead the way towards energy independence in America, employing strategies ranging from using biofuels in fleet vehicles to retrofitting public buildings to meet minimum energy efficiency standards. In doing so, state and local governments not only help the environment, they help themselves by cutting energy costs, relieving pressure on tight budgets, and demonstrating the essential value of public investment in new energy technologies.

State and local governments control a remarkable amount of resources – millions of buildings, cars, buses, and dollars of tax revenue – and influence even more through building codes, zoning restrictions, and transportation/parking policies. City and state officials, by virtue of their leadership positions, can also exert influence on the private sector and can bring together diverse interest groups to achieve a common goal. Because of their control and influence over such a wide array of resources, convincing state and local governments to ‘green’ their infrastructure can drastically reduce energy use in communities across America.

There is no one model for greening publicly owned goods. On this page, we bring together a number of different strategies that can be used individually or in concert to reduce energy use and achieve real energy savings – savings that can be reinvested to fund even more significant clean energy programs in the future.

Public Building Efficiency Retrofits

Buildings are the leading energy users in America, eclipsing even transportation, and accounting for over $280 billion in annual energy costs.[i] In public buildings, state and local governments can avoid many of these energy costs by requiring simple retrofits to windows and electrical, lighting, or heating systems. Such retrofits not only save government money, they also lead to increased productivity by government workers in public office buildings, and increased performance by public schoolchildren.

The first step towards achieving energy savings for any type of building – public or private – is identifying the best candidates for upgrades. Often these will be older buildings that have not been renovated for many years. These determinations should be left to trained energy audit professionals, and most units of government already have staff trained in this area.

Units of government without staff trained in this area or businesses interested in reducing energy use should contact their utility to see whether the utility themselves offers an audit service. Other resources include your state energy department or local Energy Service Corporation (ESCO).

Some important questions that public officials should consider when analyzing the audit results include:

Another way to reduce energy consumption and achieve energy savings in public buildings is through green building construction and retrofit standards. Green building practices vary widely, from replacing lightbulbs to installing entire renewable energy systems. The most ambitious retrofits and construction techniques create buildings that are certified by the Green Building Council (USGBC) through the Leadership in Energy and Environmental Design (LEED) rating system.

Public schools have special appeal as targets for green building programs. They are dispersed throughout communities, offering the potential for broad public support. They operate at a workable scale, permitting experiment and friendly competition. And their central purpose is one all Americans understand and embrace: preparing the next generation of Americans for productive citizenship. Along with cost-savings, more energy efficient and greener buildings improve the performance of those who work in them. For schools, this translates into everything from less disruptive behavior to more efficient learning, as measured in consistently better test scores and lower dropout rates.

Encouraging Private Building Efficiency Retrofits

Local governments interested in encouraging local businesses to reduce their energy consumption can also consider offering free or reduced cost energy audits to local businesses. This could be done in partnership with the local utility (in areas in which the utility does not already run its own program), or with an ESPC.

Some green building technologies can carry high initial costs. Several states have attempted to offset these capital costs by proposing legislation offering tax incentives to individuals and businesses that build green. Each state’s tax incentive program operates differently, but all offer tax incentives on a sliding scale that increases tax benefits with the building’s “greenness”.

In order to ensure that all new buildings constructed in an area meet a minimum level of energy efficiency, state, county or municipal governments can adopt legislation updating existing building codes and requiring new buildings to meet the most recent IECC standards. Currently many states have no statewide building codes at all, and about half of all states use codes over five years old. Updating state or city building codes to the most recent International Energy Conservation Codes (IECC) ensures that new construction uses less energy, contributes fewer pollutants to our environment, and improves comfort and productivity.

Public Transportation Resources

City and State governments also control a wide range of transportation resources, which is key to any energy policy given that over half of all U.S. oil consumption is attributable to automobiles. As with building efficiency, there is no one plan for crafting a state or citywide green transit plan; however, implementing a number of the strategies outlined below can drastically cut the amount of oil consumed by automobiles in a particular region.

City and state governments own large numbers of vehicles for use by public employees. Historically, efficiency and environmental impact have not been large considerations in these vehicles’ purchase; however, some state and city governments have begun taking steps to ensure that these vehicles operate more efficiently and cleanly. Some policies currently in use in cities across America include:

The predominant form of mass transit in the U.S. is bus service. In cities across the country buses, nearly all of which are owned by some unit of government, run almost twenty-four hours a day. Biodiesel, a renewable fuel, can be used in any diesel engine and is typically blended with traditional diesel to maintain performance while cutting use of petroleum.[ii]

Private automobiles are, and will continue to be, a vital part of the American economy. That being said, in order to cut our dependence on foreign oil, we must reduce the amount of gas consumed by automobiles. Though cities and states only have direct control over their own fleets, they can promote policies that encourage efficient cars and responsible car use in a particular region.

There are literally billions of traffic signals owned and operated by state and local governments in the U.S. These run twenty-four hours a day and consume a significant amount of energy. Historically these signals have used incandescent bulbs, but recently states and cities have taken the initiative and begun replacing incandescent signals with more efficient light-emitting diode (LED) signals.

LED signals use 90% less power, last ten times longer, and appear brighter than traditional incandescent bulbs. These benefits add up to over significant lifetime energy, maintenance, and labor cost savings. Today, approximately 30% of all traffic lights nationwide utilize this technology; however, that leaves 70% of the country that can still take this very simple step toward significant energy savings. These state and local governments should examine what they can do to establish a transition program to LED traffic signals, or to speed existing transition programs.

In order to cut energy use from transportation, we must reduce the need for cars as well as ensuring that those on the road are as efficient as possible. States and cities can promote smart transportation policies – often part of a broader “smart growth” package – to encourage urban development that is dense, well-planned, and transit-oriented. Smart growth allows for more efficient provision of public goods in densely settled areas, and also promotes open space conservation. Both state and city government control many resources that can be used to promote smart growth, reducing energy use in the transportation sector.

Public Purchasing

In addition to owning and regulating large amounts of real estate, buildings, and transportation infrastructure, city and state governments also purchase an immense number of products – everything from paper to paint, motor oil to HVAC systems.

Through their daily purchases, governments exert substantial power over the market. Therefore, by instituting green purchasing requirements, governments can instantly create a stable market for environmentally friendly products.

Financing State and Local Energy Programs

Although greening the public infrastructure has significant economic and environmental benefits, it often requires more upfront investment than continuing the status quo. Fortunately, several innovative methods for funding greener public infrastructure exist, several of which are outlined below.

State and local governments across the U.S. employ about 7.9 million workers, around two-thirds of whom work for local governments.[iii] These employees contribute each month’s salary to pension funds administered by city and state treasurers, who are charged with investing this money to achieve asset growth.

One emerging state approach is to invest this pension money into energy efficiency and renewable energy programs for government-owned infrastructure. Energy savings resulting from these upgrades are then used to repay the capital costs of the programs, and any savings above this amount are returned (along with an investment fee) to the pension funds.

California's Green Wave program is a model of this type of investment system. The program directs California's two largest pension funds, the California Public Employees' Retirement System (CalPERS) and The California State Teachers’ Retirement System (CalSTRS) to invest roughly $1.5 billion into the clean energy industry.

Revenue bonds are public bonds that incorporate a specific payback mechanism into their design. Often they are paid off through fees or income generated through the project funded. Energy efficiency projects fit this bonding scheme particularly well because the revenue needed to repay the bonds can be recouped in long-term energy cost savings. So long as the money saved from lower energy bills is funneled back into the bond payback program, revenue bond financing of energy efficiency projects allows states or municipalities to reduce energy usage without any actual outlay of state or city funds. Federal loan guarantees can bring bond interest rates down to manageable levels. For obvious reasons, this is an attractive option for many public officials.

ESPCs enable governments, industrial firms and property managers that are interested in pursuing energy efficiency measures to contract with privately-run organizations specializing in energy efficiency, called Energy Service Companies (ESCO). ESCOs provide interested customers with detailed assessments of guaranteed energy savings and the costs needed to achieve these savings. ESCOs then perform the efficiency retrofits. Retrofit costs and the ESCOs fees are ultimately recouped through capturing the energy bill savings. Many of these efficiency measures achieve payback in several years, providing significant long term savings.

[i] Department of Energy. 2004 Building Energy Databook.

[ii] http://www.biodiesel.org/pdf_files/CommonlyAsked.PDF

[iii] http://www.bls.gov/oco/cg/cgs042.htm

Clean Energy Strategies for State and Local Governments: Public Infrastructure

Public Building Efficiency Retrofits

Encouraging Private Building Efficiency Retrofits

Public Transportation Resources

Public Purchasing

Financing State and Local Energy Programs