On June 2, 2014, the USEPA, under President Obama’s Climate Action Plan, proposed a plan to cut GHG emissions from power plants. The Clean Power Plan (http://www.epa.gov/cleanpowerplan) is projected to help cut GHG emissions from the power sector nationally by 30% from 2005 levels.

Power plants are the largest source of GHG emissions in the US, accounting for about one-third of all domestic GHG emissions. The proposal will also cut PM and ozone precursor emissions by an additional 25% in 2030.

Specifically, the USEPA is proposing state-specific rate-based goals for carbon dioxide emissions from the power sector, as well as guidelines for states to follow in developing plans to achieve the state-specific goals.

The proposal has two main elements: 1) state-specific emission rate-based CO2 goals and 2) guidelines for the development, submission and implementation of state plans. To set the state-specific CO2 goals, the USEPA analyzed strategies that states and utilities are already using for the power sector, such as improvements in efficiency at carbon-intensive power plants, programs that spur private investments in, low emitting and renewable power sources, and programs that help consumers use electricity more efficiently. In calculating each state’s CO2 emission reduction goal, the USEPA took into consideration the state’s fuel mix, its electricity market and other factors.

The proposed rules do not prescribe how a state should meet its goal. Each state will have the flexibility to design a program to meet its goal in a manner that reflects its particular circumstances and energy and environmental policy objectives. Each state can do so alone or can collaborate with other states on multi-state plans that may provide additional opportunities for cost savings and flexibility. The proposed rule lays out guidelines for the development and implementation of state plans.

The USEPA believes that the Clean Power Plan will lead to climate and health benefits worth an estimated $55 billion to $93 billion by 2030, including avoiding 2,700 to 6,600 premature deaths and 140,000 to 150,000 asthma attacks in children. Interested parties have 120 days to submit comments from publication in the Federal Register.

While this proposed rule affect only power plants, more future rules are likely to come to reward or mandate GHG emission reductions from other source types. Planning is needed. CCES has the experience to help your entity estimate its GHG emissions and to develop cost-saving strategies to reduce these emissions, parlaying this into many financial benefits and putting you in good shape ahead of any future rules or pressure from the public to reduce. We have successfully addressed climate change for the direct benefit of many companies. Contact us at karell@CCESworld.com or at 914-584-6720.

Tax committees in both the US Senate and House of Representatives are in the process of meeting and are expected to review, reinstate, and strengthen several tax bills containing energy incentives that expired at the end of 2013.

Earlier this year, letters were sent by dozens of leaders in energy industries to Congress urging a multi-year extension of expired energy tax credits and deductions. Extending the tax credits would provide the necessary stability for businesses to finalize decisions to building new buildings or improve the ones they are in and do so in an energy-efficient manner.

Here is a list of tax credits that have or will soon expire. These have been credited with helping businesses remain competitive and do so in an energy efficient manner and help develop needed infrastructure, and advanced fuels. These are being considered for extension by the US Congress:

Generation
• Renewable Electricity Production Tax Credit
• Replace the Investment Tax Credit (Section 48) placed-in-service qualifying deadline with a commence construction standard
• Bonus Depreciation

Efficiency
• Energy-Efficient Commercial Building Deduction (IRS Section 179D)
• Residential Energy Efficiency Credit (25C)
• Energy-Efficient New Homes Credit (45L)
• Energy-Efficient Appliance Manufacturing Credit (45M)

Transportation
• Alternative Fuel Vehicle Refueling Property Credit (30C)
• Alternative Fuel and Fuel Mixtures Credit (6426)
• Biodiesel and Renewable Diesel Credit (40A)
• Second Generation (Cellulosic) Biofuel Producer Credit (40)
• Special Depreciation Allowance for Second Generation Biofuel Plant Credit (168)

CCES has the expertise to help you develop a project that will qualify for incentives, whether they be federal ones, such as these, when reinstated, or state, local or utility incentives. Contact us today at 914-584-6720 or at karell@CCESworld.com.

President Obama has tried to work with Congress to develop a national energy plan, climate change rules, and renewable energy standards that will encourage business and local job creation, while saving costs. But there has been no success, as Congress has been wont to pass any measure. For example, IRS code 179D, giving businesses that achieve energy efficiency gains a tax deduction, expired at the end of 2013, despite the fact that both Congressional Democrats and Republicans in conference agreed over a year ago to extend the rule and even enhance it. Promoting something that everyone agrees on, like energy efficiency, by rule just can’t happen right now.

Therefore, President Obama is trying to achieve gains in energy efficiency by two alternative means, one by Executive Branch decree and the other by the private sector. President Obama issued Executive Order 13514 and a follow up memo earlier this month (http://www.whitehouse.gov/the-press-office/2014/05/09/fact-sheet-president-obama-announces-commitments-and-executive-actions-a) that set environmental and energy goals for Federal agencies. Federal agencies must increase energy efficiency, reduce fleet petroleum consumption, conserve water, reduce waste, support sustainable communities, and leverage Federal purchasing power to promote environmentally-responsible products and technologies.
Given that the Federal Government occupies nearly 500,000 buildings, operates over 600,000 vehicles, and purchases over $500 billion per year in goods and services, the Executive Order can have a real impact on national energy use and greenhouse gas emissions. This will also benefit the taxpayer through substantial energy savings.

The Executive Order and memo require agencies to meet several targets, as follows:
• 30% reduction in vehicle fleet petroleum use by 2020;
• 26% improvement in water efficiency by 2020;
• 50% recycling and waste diversion by 2015;
• 20% of energy use should be derived from renewable sources by 2020 (if viable);
• 95% of all applicable contracts will meet sustainability requirements, and others.

Pres. Obama has also taken his quest for energy efficiency and reducing GHG emissions to the “streets”, visiting several large, well-known corporations to encourage and reward them for energy investments and use them as models for others. Pres. Obama recently appeared at a California Walmart to praise the company for not just setting corporate goals, but implementing programs to improve energy efficiency and install more renewable energy sources. Pres. Obama noted the cost savings that Walmart has achieved, as well as the American jobs created and the reduction in GHG emissions achieved at the same time. Pres. Obama has lauded other companies, too, such as General Mills, General Motors, UTC, and others. The President’s office recently announced that several major US corporations committed to getting more energy from renewable power, such as Google, Yahoo, Apple, Ikea, and Kaiser Permanente.

The Obama administration has reached out to individual consumers, too. New CAFÉ standards will mean gasoline cost savings and fewer trips to the station. New appliance standards were recently issued to reduce energy use 1.2 trillion kWh over 30 years. Studies have shown that the overwhelming source of GHG emissions for the life cycle of appliances is not their manufacture or transportation to market, but their everyday use, (electricity). More energy efficient appliances will reduce GHG emissions greatly.

Overall, Pres. Obama’s new energy efficiency and renewable energy strategy is based on changing the culture of this country, to show that investing in these areas is not only the right thing to do, but also the more profitable thing to do. These companies investing in energy efficiency and renewable energy when they did not have to should remind all businesses of the opportunities for financial benefits if they address energy issues smartly. In addition, this public relations approach will likely interest and encourage the general public who could themselves reward firms that invest or punish others that don’t with the power of the pocketbook (sales and investments).

And it’s not just mega-firms, like GM, Apple, Google, etc. who benefit from energy efficiency. All firms can. CCES consulted for a much smaller firm, Colonial Needle Company (www.colonialneedle.com), which recently underwent a complete energy overhaul: upgrading lights, installing new double-paned windows, installing new, better insulation, replacing an old oil boiler with a new smaller one using natural gas with thermostatic control, and installing solar hot water and PV systems. Besides the technical advice, we helped them obtain applicable financial incentives, as well.

Energy costs, which were choking their bottom line, were reduced greatly; but Colonial Needle received other benefits, too. They took one section of their building that was laying dormant and refurbished it into an area they now lease for revenue. They also noted an increase in comfort and productivity of staff. Greater revenue, reduced costs, and greater productivity, all due to energy efficiency. A business cannot ask for anything more than that! Colonial Needle will be honored in June with the Outstanding Achievement Award in Energy by the Westchester Green Business Challenge. CCES is proud to have been part of the team to get them there!

CCES can help your building and company become more energy efficient and maximize the financial gains. We know the newest technologies – including renewable energy sources – and how to design them to effectively reduce your energy costs in a smart way. Contact us today at 914-584-6720 or at karell@CCESworld.com.

While reducing CO2 emissions from fossil fuel combustion (energy conservation) is an important part of reducing GHG emissions to combat climate change, another area is methane (CH4), which is 21 times more potent than CO2. As part of its Climate Action Plan, the Obama Admin. Recently issued: “Strategy to Reduce Methane Emissions”: http://www.whitehouse.gov/sites/default/files/strategy_to_reduce_methane_emissions_2014-03-28_final.pdf

According to this “Methane Strategy”, CH4 emissions currently account for nearly 9% of all US GHG emissions, and are expected to increase if no new action is taken. Common CH4 emission sources include solid waste landfills, coal mines, agriculture, and oil & gas. Here is a summary of proposals to reduce CH4 emissions in the Methane Strategy.

• Landfills: Later this year, the USEPA will propose updated standards to reduce CH4 from new and existing landfill. The USEPA will continue its Landfill Methane Outreach program to promote voluntary CH4 recovery projects at landfills. The USEPA will also continue its nationwide efforts to encourage reduction of solid waste generation (ending up at landfills), such as the U.S. Food Waste Challenge.

• Coal Mines: The Bureau of Land Management (BLM) will issue an Advanced Notice of Proposed Rulemaking seeking public comment on developing a program for capturing, selling, and/or disposing of waste mine CH4 produced on Federal government lands through coal and other solid mineral leases. The USEPA will continue to promote voluntary recovery and beneficial use of CH4 from coal mines.

• Agriculture: The Department of Agriculture and the Department of Energy will issue a “Biogas Roadmap” shortly. This will provide voluntary strategies for implementing technologies for reducing all GHGs from this sector, including encouraging the use of anaerobic digestion and biogas (CH4) utilization systems.

• Oil & Gas: The USEPA will issue white papers developed by independent experts on how to reduce GHG emissions from the oil & gas industry, focusing on reducing both VOCs and CH4, then will decide future rules or voluntary programs, probably this fall. If the USEPA decides the regulatory route, such proposed rules will be issued by late 2016. The USEPA will continue to promote its Natural Gas STAR Program which encourages practices to reduce CH4 and other emissions. BLM will also release a proposed rule to regulate venting and flaring from oil & gas wells on Federal government land. The DOE will issue its Quadrennial Energy Review in early 2015 to recommend actions for improving energy transmission, storage, and distribution, including opportunities to abate CH4 emissions.

CCES has the expertise and experience to assist you in reducing your full GHG emissions in the most cost-effective manner and in such a way to reduce your expenses and increase productivity to make back the money you’ve spent. Contact us today at 914-584-6720 or at karell@CCESworld.com.

The U.S. Supreme Court recently issued a ruling in a case focused on whether the USEPA through the Clean Air Act can regulate air pollution emitted in one state that may harm people in other states. See www.supremecourt.gov/opinions/13pdf/12-1182_bqm1.pdf. The CAA has a Good Neighbor Provision, prohibiting sources from emitting any air pollutant which would contribute significantly to the ability of downwind states to meet its NAAQS standards.

The Supreme Court ruled 6-2 that the USEPA interpreted the CAA properly when it designed and implemented the Cross-State Air Pollution Rule (CSAPR or the “Transport Rule”). This ruling overturned a decision from a D.C. Circuit court ruling in 2012.

The decision reinstates CSAPR, meaning that large sources of ozone precursors in upwind states will be subject to more stringent air pollution control requirements in the future. The ruling also states that the USEPA acted properly in issuing federal implementation plans (FIPs) for the rule, which was a main objection of the Circuit court.

However, it should be noted that the Supreme Court ruling did provide some restrictions of CSAPR, such as limiting control restrictions. The USEPA can only require an upwind state to reduce its emissions as it affects every downwind state to which it is linked up to either the amount needed to achieve attainment with applicable NAAQS or the point at which the upwind state is no longer contributing more than 1% of their air pollution problem. An upwind state that believes that restrictions in CSAPR or a FIP go beyond meeting one or the other limit can challenge the applicable rules.

The USEPA has not yet announced a timetable or how it will reinstate CSAPR. However, the overall takeaway of the Supreme Court decision is that large combustion sources – particularly coal-fired electric or other large plants – will be further regulated for emissions of pollutants, such as NOx, VOCs, and PM, that impact other states. Another type of source that could be regulated or more moderate-sized facilities that are located near and upwind of state borders. If monitors and/or dispersion modeling demonstrate that its emissions impact or risk the attainment status of downwind states, then they may be regulated, too. Therefore, it is important for any facility that has the potential to emit even moderate quantities of such compounds to assess their emissions and prepare for potentially controlling emissions even more than it already does.

CCES has the air pollution experts to determine your emissions of critical pollutants and determine whether these rates meet standards listed in current or proposed future rules, including performing impact analyses. We can perform technical portions of an analysis to determine your potential compliance status vis-à-vis CSAPR and other Air rules. We can determine various cost-effective strategies to comply comfortably (if necessary), as well as design monitoring systems to allow you to manage your compliance program in response to future changes. Contact us at karell@CCESworld.com or at 914-584-6720.

Several surveys show that one of the biggest factors holding back companies from investing in energy upgrades is the absence of incentive programs from their utility or government. It is not even the amount of money that is important, but that it is there and, therefore, is a tacit approval of the program. The company gets “credit” for working under the credit program, plus the money helps the bottom line and improves the ROI.

Many states and utilities have incentive programs to improve energy efficiency, upgrade equipment, and/or switch to cleaner or renewable fuels. While it may seem counter-intuitive to offer such incentives (why would a utility discourage energy usage?), there are many good reasons for this, including ensuring that peak summer electric demand is met reliably (without brownouts) and reduced new infrastructure needs. These programs also help states meet Renewable Portfolio Standards. Most states want to lessen big public infrastructure matters, such as power lines and right-of-ways, as well.

Well, if the government or a public utility is giving out money, tax credits, etc., then it has to be careful to ensure that the money is spent appropriately to incentivize real energy reductions. They put the onus on the facility (and its consultant) to demonstrate that the proposed technology or strategy will actually achieve what is being claimed. These entities want to calculate total amount of energy saved from all projects it incentivizes.

This is good. But these requirements can be overwhelming. For some programs, it is not enough to say that a strategy will reduce electricity use by, say, 5%, based on engineering experience. One must do calculations to demonstrate it all. Assumptions are not allowed or highly discouraged. Some programs require using energy models to demonstrate reductions. These are hypothetical, of course (it is software), but somehow thought to add accuracy. The problem is that running models involving complex data entry, researching published reduction factors, and performing complex calculations cost time and money. The applicant must pay the consulting engineer for extra time to do all this. Yet, this diminishes the ultimate ROI of the incentive. I was involved in a project where incentives were based on running energy models to calculate energy usage reductions. While their strategies were excellent and likely to meet the required levels, I could not guarantee the results until I ran the model. I told the owner that he may have to pay me more for my time than he would receive in incentives. I did not know. He chose to move forward anyway, and fortunately qualified fully for incentives and came out ahead. But be careful and research the incentive program for what might you be entitled to and how much extra you must pay your consulting engineers to meet the requirements of the incentives. It may not be worth it. Do your homework.

CCES has the expertise to help you evaluate, qualify for, and apply to a wide variety of energy incentive programs to determine maximum ROI for your energy cost-saving project. Contact us today at 914-584-6720 or at karell@CCESworld.com.

There is a national debate going on about energy and how we get it. Cost, safety, reliability, and “energy independence” are all being discussed. All of this impacts the companies we work for and our home supply, as well. Grand debates are being held (“Drill, baby, drill!”) concerning energy usage and climate change, about the Keystone Pipeline and about fracking. What are the issues when it comes to energy flexibility and risk and how do they affect us?

Lately, there has been growth in demand for energy and, thus, we need to determine how we will derive it. In addition, there are global changes as a number of developing countries are experiencing growth. Well over a billion people worldwide over the next few decades will enter the middle class, increasing energy demand. This is not an abstract concept. China is opening several new large power plants every year and there are many stories of cities being electrified for the first time, people trading in their bicycles for their first cars, and people buying their first TVs, computers, etc. This demand will affect us. World demand influences the sources of our energy and the price we pay.

And at the same time, we are beginning to see the initial effects of climate change, of the increased heat in our atmosphere due to enhanced trapping of radiation by higher concentrations of CO2 from greater combustion of fossil fuels. Scientists tell us we can still avoid most of the major impacts of climate change if we can reduce GHG emissions by 70% from a 1990 baseline (which we exceed) by 2050. How can we achieve this and also meet the growing energy demands of over 1 billion people projected to be high energy users by 2050? What does this mean for us and for our economy and companies striving to maintain and grow?

We need to examine different sources of energy: natural gas, oil, coal, nuclear, renewable power. One thing that is important to accept is that all energy sources come with risk. I am old enough to remember as a child an old TV show, “Beverly Hillbillies”. Jed Clampett shoots at some wild turkey, misses, and up from the ground comes crude oil. Just like that. That was an exaggeration even then, and is quite far from the truth now. We are digging for gas and oil in unusual, faraway places and in expensive ways resulting in calamities like BP Deepwater Horizon (digging way out in the Gulf of Mexico). And fracking (natural gas from shale) has risks in terms of water usage, land use, contamination. Some want to ban it because of these risks. Good, but what would take its place? Is it better to use coal or oil (accident risks, higher CO2 emissions) instead? Nuclear emits no GHG emissions. But in what town could we build a new nuclear plant? Renewable power is clean and effective (I have solar panels on my house). But how do we store and supply power for night time or cloudy days or peak power demands? How do we get power from mostly desolate windy areas to the cities that need it?

There is no simple answer to energy. We want our energy and life styles and our company’s operations to continue smoothly, but we need to now accept and address many risks in order to attain our and the world’s energy demands.

An answer is support for technology and smart regulations. Many of the energy items mentioned are new (digging deep in the Gulf, extracting from shale or sands, renewables). Improved technology and procedures can at least reduce risk (though probably never eliminate risk) while obtaining energy. Research and development for this must be encouraged. Similarly, smart rules should force companies to address risk (particularly if it endangers human life) while encouraging the development of the energy source. For example, companies can be allowed to frack only if it has demonstrated the proper safeguards to protect watersheds, treat wastewater, and protect land that otherwise would harm us and cost our society quite a lot to remediate, too.

So, the best approach for a municipality and a company is to have a formal energy program maximizing fuel flexibility, as risk and cost will change over time. Companies should design facilities that can use multiple sources of energy. For example, besides using the local utility’s electricity, a facility should also look to install renewable of cogen to develop one’s own source of electricity. Steam or hot water systems should be able to use multiple fuel types providing surety and flexibility as availability and price become issues. The cost of energy is now recognized as a major cost center for many municipalities and companies. But without power, heat, or steam, then functionality and production can shut down altogether, having grave impacts on its very being. Energy flexibility is important to look at seriously now and to plan for and execute toward in the future.

And a big part of any such program should also be energy conservation. A great way to be more flexible is to require less energy to perform your functions, giving you more flexibility to find energy sources. To achieve this, energy audits should be conducted routinely. There has been a revolution in energy saving technologies in just the last few years that are implementable and do work. Conducting an energy audit to determine new effective strategies to reduce energy use and actually implementing them every few years will help you both reduce energy costs and become more flexible to future market changes, as well.

CCES and our experts can help your company or municipality develop a robust energy program to save you energy costs to pay for the program and to examine and improve your energy flexibility intelligently, as well. See the improvements and cost savings. Contact us at 914-584-6720 or at karell@CCESworld.com.

According to a recent report in Business Insider, Apple has more cash reserves ($159 billion) than most major nations, including the US and other industrialized nations. It’s not only Apple. Major manufacturers, like Pfizer, Coca Cola, Amgen, Johnson & Johnson, and both General and Ford Motors, each have cash reserves of at least $20 billion. Now, I’m not an investor or an expert on economics, but I suppose this means that this cash can only be making a few percent in interest at best. Isn’t there something that can earn more for companies for this cash and be more productive, too?

One answer is energy. Several recent polls have shown that while many companies and municipalities are “looking into” studying and implementing energy upgrades, most do not follow through. The reasons appeared varied, such as not finding the right internal champion, availability of funds to invest, and finding the right practitioners. But, with cash reserves of many companies overflowing and new, proven energy-saving technologies and strategies growing, energy upgrades should become a high priority.

This is not a new-fangled idea. Many companies have invested in energy upgrades and the benefits are being studied. A McKinsey study (McKinsey Insights) showed that US companies have the potential to invest $3.4 trillion in energy upgrades at an average internal rate of return of 17%; much better than cash reserves sitting in a money market!

OK, I understand your skepticism. After all, this is an average of many thousands of corporations. How may this apply to you, so you be ahead of the game? One good way to start is to begin by concentrating on lighting. There has been a revolution in new lighting types in just the last few years. Lamps that create better quality light using less than half of the electricity of standard incandescents and T12s. Simple and savings begin right away. Add in automated sensors to turn off or dim lights when not needed, and you can save even more electricity. IRRs much better than 17% can be achieved by upgrading lighting – if you do it right. Planning and knowledge of vendors are critical to maximize savings. Use outside firms who are experienced in lighting and energy. Then your company can use the savings to invest in other cost-saving energy areas.

And there are other benefits, as well. Improved lighting has been shown to improve productivity and general mood of workers. There are fewer mistakes, reduction of risk, and sick days. Upgrading and automating mechanical systems can free your labor force to focus on jobs meant to be done: additional financial benefits for your bottom line.

CCES has the expertise to help you develop a smart energy program to invest in lighting and other energy upgrades for the highest return on investment and maximize the other benefits. We know the approach and the vendors to ensure financial success and reliability. Contact us today at 914-584-6720 or at karell@CCESworld.com.