How Energy Efficiency Can Repair VA’s Economy

Mike Tidwell has an Op-Ed in the Richmond Times Dispatch today about how the efficiency bill introduced by Sen. McEachin is exactly the kind of jobs bill we need right now.

Repairing Virginia’s Economy

Gov. Robert F. McDonnell has been yelling it from the rooftops for months: The best way to repair Virginia’s ailing economy is to improve the state’s flawed energy policies.

He’s absolutely right, of course, and now he faces a test. With inauguration festivities over, a landmark energy bill awaits McDonnell in the General Assembly. It would create lots of new jobs and, potentially, build badly needed bipartisanship in Richmond.

The highlights: Senate Bill 71 would spur up to 10,000 new jobs and billions of dollars in new investments in a state where unemployment has doubled since 2007 and the budget deficit is a staggering $4 billion. This is not, however, an “offshore drilling” bill to promote oil platforms along the Virginia coast. Nor would it finance new coal-fired power plants and nuclear energy. Instead, it’s a straightforward energy efficiency bill. Using the same common-sense appeal to fiscal sanity that helped McDonnell get elected, SB 71 would promote energy efficiency across the state while saving money for Virginia families.

And the job-growth numbers are for real. They’ve been confirmed by the American Council for an Energy Efficient Economy (ACEEE), a highly respected think tank whose clients include Dow Chemical and DuPont. ACEEE closely analyzed the bill as introduced by Sen. Donald McEachin (D-Henrico). SB 71 would commit the state to a reasonable 12-percent reduction in electricity use by 2022 via strategies already in place in other states.

But how does efficiency create up to 10,000 jobs in the next decade? Simple: It jumpstarts new economic demand in such areas as home weatherization, appliance sales, and “smart meter” installations. Best of all, this approach stimulates jobs for Virginians. You can’t send a Roanoke home to China, after all, to have the windows caulked.

It’s exactly the right “jobs bill” at exactly the right time. In fact, it’s the only major employment bill now before the General Assembly. Despite all the discussion of “jobs, jobs, jobs” during the fall gubernatorial campaign, SB 71 is the sole legislation with an ambitious, credible jobs target backed up by economic data Virginians can count on.

McDonnell, to be fair, has been working hard — even before Election Day — to promote oil exploration off the Virginia coast. He’s asked the federal government to expedite the bidding process for offshore leases, and that bidding could now occur as early as 2011. But it’s highly uncertain how much oil and natural gas actually exists off the state’s coast. It’s also unclear how many jobs the industry will bring to the state. According to the U.S. Energy Information Administration, it takes about 10 years to bring new leases into production and another 10 years for them to achieve peak production. So the 2030s could be a good decade for oil in Virginia, but do we want to wait so long?

Efficiency, meanwhile, remains the fastest, most cost-effective way to address energy challenges. Nationwide, every dollar spent on efficiency produces approximately $3 in reduced energy costs. That’s good for America’s energy independence. Virginia, unfortunately, now ranks 34th among U.S. states in terms of overall energy efficiency, according to ACEEE. The state also falls far behind most states in terms of utility investments in efficiency programs.

SB 71 would simply set a target — 12 percent reduction by 2022 — and allow electric utilities like Dominion Virginia Power to decide for themselves how best to achieve the standard. Thankfully, utilities can choose from a long list of incentives already used in other states and proven to work, such as offering rebates for better light bulbs and refrigerators or encouraging installation of Smart Meters that help shave usage.

So what are the arguments against the bill? Some critics claim efficiency standards actually increase electricity bills. But this flies in the face of the ACEEE analysis and the actual experience of other states from coast to coast. True, under SB 71 utilities can pass on to ratepayers the cost of any investments the utilities make to improve efficiency. But ratepayers themselves will simultaneously be using less power — the whole point of the bill — and so average monthly electricity bills will be lower. Last July, Dominion Power confirmed that modest efficiency investments statewide would save customers a whopping $1.2 billion over 15 years.

Critics have also called this a “behavior change” bill. Totally not true. Success here is not dependent on people turning off the lights, just using more efficient lighting. It’s not dependent on people using smaller refrigerators, just more efficient ones. There’s no trade-off. No sacrifice. Just smarter technology that simultaneously creates more jobs.

SB 71, in sum, is the ultimate “win-win” bill in Richmond this year. It’s a win for jobs, for the economy, for national security, and — just maybe — for Democrats and Republicans ready to declare joint victory on a really good jobs bill.