The National SAVE Energy Coalition January, 2011

2010 Year in Review

Since late 2008, the National SAVE Energy Coalition has been a campaign advocating for strong,
smart and efficient clean energy policy. In 2010, we continued this campaign with lots of activity
on a number of issues. From comprehensive climate and energy legislation to HOME STAR, from
the „Spill Bill‟ to California‟s Proposition 23, and on many other issues, the National SAVE Energy
Coalition played an active role in education and grassroots organizing over the past year. Of course,
none of this was possible without the support and participation of you, the business community.

With the 111th Congress coming to an official close last week, we‟d like to thank you for your
efforts and to reflect on the important stories, accomplishments, and challenges of 2010.

GHG Regulation: 2010 and Beyond

Despite passing a comprehensive climate and energy bill in the House of Representatives in 2009,
the Senate, led by Senators Kerry (D-MA), Lieberman (I-CT), and Graham (R-SC), failed to pass
its own version. With a new Congress largely hostile to such legislation, it has become clear that
action by the Environmental Protection Agency (EPA) is the only hope for regulation of GHGs, at
least for the next two years. Under the Clean Air Act, EPA has the authority to regulate pollutants
deemed harmful to human health, including GHGs as determined by a 2007 Supreme Court
Ruling. In 2010, EPA took the first steps toward GHG regulation by developing comprehensive
rules to regulate large sources, such as power plants, refineries, and industrial facilities. Thankfully,
numerous plans to legislatively delay or prohibit EPA from implementing these rules failed in 2010,
and EPA plans to begin implementation early in 2011. Although regulation from agency mandate is
less preferable than legislation, it is a much needed start in the right direction.

HOME STAR
The National SAVE Energy Coalition partnered with the HOME STAR Coalition to support the
first ever federal rebate program for energy efficiency retrofits. Our collective work throughout
the year on HOME STAR was impressive, and together we secured passage of the bill in the House
of Representatives in the summer of 2010. Unfortunately the bill could not pass the Senate, despite
having a number of Republican co-sponsors. With the advent of the 111th Congress, the slate is
wiped clean: for HOME STAR to become law, it must restart the legislative process entirely.

Although the bill did not become law, our efforts had concrete benefits. The process of drafting and
supporting the legislation helped to generate unprecedented cooperation and organization within
the energy efficiency industry. Further it spurred one of the largest business grassroots campaigns
ever with over 3,000 businesses in the HOME STAR Coalition. Additionally, the HOME STAR
program structure and standards have reached beyond Washington D.C., with many states now
using them as a model for their energy efficiency programs. In fact, Delaware launched a HOME
STAR-based program in late 2010.
The National SAVE Energy Coalition January, 2011

November Elections: New House Majority and Leadership Positions

A dramatic shift is ahead in both houses of Congress, with Republicans regaining control of the
House of Representatives and making significant inroads to the Senate‟s Democratic majority.
What does this shift mean for energy efficiency, renewable energy, and climate policies at the
federal level during the next two years? In general, it‟s not good: Scott Keyes, of
ThinkProgress.org, has noted that a full half of incoming Republican freshmen deny the existence
of anthropogenic climate change, with an additional “86% opposed to any federal climate legation
that would increase government revenue.”

The House majority change means that control of committee chairmanships will switch from
Democrats to Republicans. As a result, Republicans will control the legislative agenda in the
House, making it unlikely that any comprehensive climate or energy bill will advance during the
next congressional session.

John Boehner (R-OH) has been elected as Speaker of the House, and Representative Fred Upton
(R-MI) has secured chairmanship of the powerful House Energy and Commerce Committee.
Upton‟s tenure will be a sharp departure from the previous chairman, Rep. Markey (D-MA), who
co-sponsored the House climate and energy bill, the American Clean Energy & Security Act.
Additionally, the new Republican majority has brought an end to the House Select Committee for
Energy Independence and Global Warming. Led by a bipartisan collation from the House, the
Select Committee was designed to help shape federal policy on global warming and domestic
energy issues. Clearly, the November elections produced a major shakeup for energy and climate
legislation. Looking forward, over the next two years, the clean energy industry will need to guard
against attacks from Upton and the House Energy and Commerce Committee.

Energy Efficiency Tax Credits

As part of the recently approved federal tax package, current energy efficiency tax credits were
extended for consumers who purchase qualifying energy saving products. The new legislation
extends the credits to the end of 2011, but reduces the credit to 10% of the installed cost of
qualifying measures up to a maximum of $500 (funding from the American Recovery and
Reinvestment Act had increased the credit temporarily). Tax credits included are for windows, up
to $200; oil and gas furnaces and boilers, $150-200; and water heaters and wood heating systems,
up to $300. The legislation also extends the $2,000 federal tax credit for builders who build
efficient homes to the end of 2011. A great source of information on these tax credits is the Tax
Incentives Assistance Project (TIAP), sponsored by a coalition of public interest nonprofit groups,
government agencies, and other organizations in the energy efficiency field. While not the game-
changing invest that a bill like HOME STAR would have provided, these energy efficiency tax
credits are vital to maintaining support and demand for efficiency services and to continue to help
Americans save energy.
The National SAVE Energy Coalition January, 2011

Proposition 23
Today, California stands alone as the only state in the nation ready to regulate its economy wide
greenhouse gas (GHG) emissions. California‟s landmark internal cap-and-trade law, Assembly Bill
32, passed with bipartisan majorities in both houses of the California legislature in 2006 and
authorized a framework within which California would decrease its GHG emissions to 1990 levels
by 2020. In 2010, however, a November ballot initiative, Proposition 23, backed by millions of
dollars from out of state oil and gas companies, nearly put an end to state based climate legislation.
Recognizing the importance of defeating Proposition 23, a diverse group of business,
environmental, and labor groups launched a campaign to defeat the measure. The National SAVE
Energy Coalition helped highlight these efforts and link members with active organizations.
Fortunately the campaign worked, and Proposition 23 was defeated with over 61% voting against
it. California has now finalized plans for its emissions reduction program and will begin
implementing it in 2012. Of note, while California has the only state-based GHG cap-and-trade
program, there is a regional cap-and-trade program that includes multiple Northeast states: the
Regional Greenhouse Gas Initiative.

No New Coal in 2010

While 2010 was a difficult year for major environmental and energy legislation (e.g.
comprehensive climate and energy legislation, HOME STAR), it was also a difficult one for the coal
industry in the US. Encouragingly, not a single coal fired power plant began construction in 2010.
Further, construction plants for 38 new coal plants were either abandoned or defeated and 48
additional coal fired power plants were slated for retirement. State and community opposition to
coal and the recognition that efficiency and renewables are better for both economy and the
environment is leading to a noticeable shift in the power industry. The takeaway message is that
even in the absence of regulation mandating a shift to cleaner sources of energy, the public and the
market is forcing the transition on its own. While the next two years look bleak legislatively for
energy and climate, we may still see significant improvements, like the trend thus far for coal fired
power plants.