Alliance Associate Schneider Electric hosted Alliance President Kateri Callahan at its North America Leadership Forum, where Callahan discussed opportunities and obstacles in the energy efficiency movement in 2010 and beyond.

1. Kateri Callahan, President Alliance to Save Energy Schneider Electric North America Leadership Forum January 27, 2010 Looking Ahead: 2010 and Beyond The Decade of Energy Efficiency

2. Presentation Overview A few words about the Alliance Why energy efficiency? Why Now? Policy required to deploy energy efficiency at scale Kateri’s “Crystal Ball”: Forecasting future federal policy action on EE

4. 32 years of experience

5. $12 million annual budget

7. Led by Senator Mark Pryor (D-Ark.) and Peter Darbee, President and CEO of Pacific Gas and Electric

8. Includes 10 Members of Congress – Bi-Cameral; Bi-Partisan

10. Associates Program membership represents all economic sectors

12. Why More EE? Why Now?Energy Use is a Global Climate Issue Source: Energy Information Administration

13. Why Now? U.S. Growth in Energy Use Poses a National Security Threat

15. Accelerate fossil fuel depletion

16. Increase our reliance on foreign sources of energy

17. Economy:

19. Source: McKinsey Global Institute Efficiency: Enormous Potential for Savings in ALL Sectors…

20. Energy efficiency should be fully considered in GHG reductions. All items to the left of the arrow represent “negative marginal costs” And: A No-Cost Way to Reduce GHG Emissions

21. Many “Non-Price” Barriers Energy Subsidies Uncertain costs? Externalities Choices SPLIT INCENTIVES Lock-in Small savings Bounded Rationality Information

23. To achieve market penetration

24. To gain foothold in marketTo encourage technological innovation

25. Public Policy Helped Deliver EE Into the U.S. Economy

26. The EE Policy March Quickens

27. Bending Down the Energy Demand Curve: Policies Matter

29. Net-zero energy buildings by 2030

30. Commitment to building U.S. clean energy economy

31. Commitment to address climate change

33. Investment incentives for “livable cities”President Obama: EE Advocate in Campaign

34. 12 months later – Opening the Decade of Energy Efficiency January 2009 October November December October November December June June July May May May Executive Order on federal energy use House Passes $75 Billion “Jobs for Main Street” bill Stimulus package American Clean Energy and Security Act (ACES) Ongoing approps in House/Senate climate/energy bills HVAC standards agreement President’s Fiscal Year 2010 budget HOUSEPASSES ACES (6/26) COP15: Secretary Chu announces Climate REDI Program Outdoor Lighting standards President’s new CAFÉ standards DOE: new lighting standards Bilateral agreement: U.S.-China Energy Efficiency Action Plan

35. Stimulus: $65B Related to Energy Efficiency Funding in Millions of US Dollars

37. Smart Grid ($4.5 bill)

38. DOE RD&D ($2.25 billion)

39. Incentives

40. Extension and Increase in consumer EE tax incentives

41. Codes & Standards

42. “Conditions” State funding on strong building codes

43. Education & Outreach

44. State Energy Star rebate programs ($300 million)

45. Government Leadership by Example

47. Projected EE Funding, 2006-2012

49. Achieve 30% reduction in vehicle fleet petroleum use by 2020

50. Achieve 26% reduction in potable & 20% reduction in industrial, landscaping, & agricultural water consumption by 2020

51. Comply with new EPA storm water management guidance

52. Achieve 50% recycling & waste diversion by 2015

53. Requires that 95% of all applicable procurement contracts will meet sustainability requirements

54. Requires 15% of buildings meet the Guiding Principles for High Performance and Sustainable Buildings by 2015

55. Design all new Federal buildings which begin the planning process by 2020 to achieve zero-net energy by 2030 Executive Order 135814:Federal Leadership in Environmental, Energy, and Economic Performance October 5, 2009: President Obama signs EO 13514 For more information: www.femp.energy.gov 6

56. NZE: Commercial Buildings Consortium (CBC) Goals: 2030: New construction net-zero energy (NZE) 2050: Entire stock NZE Comprehensive approach (R&D & deployment) Coordinate (initiate) national and local actions Measure, benchmark, disclose energy performance R&D for critical technologies and systems Demonstrate scalable, replicable system solutions Transform market: education/training, finance, appraisal, incentives, codes, buyer demand-pull Funding from Omnibus 2009 Appropriations bill: $33 million to initiate Plus about $50 million from ARRA (stimulus) funds

57. Up Next???Climate & Clean Energy Bill Senate Has Adopted Energy “Piece” Will consider climate “Piece” in early 2010?? House Adopted Climate & Energy bill in June Additional Support for Energy Efficiency in legislation Significant Funding through CO2 Allowances (House bill) Building Labeling Programs (both) Utility Energy Efficiency Resource Standards (both) Innovative Finance Programs (both) Appliance Standards (both) And much more…..

59. In ACES, energy efficiency provisions alone would:

60. Save American households about $154 per year in 2025. (EPA)

61. Reduce carbon allowance price by 1.5 percent between 2015-2050. (EPA)

63. Jobs Bill Overview Narrowly passed in House (Dec. 2009) Of $75 billion: $27.5B towards highway infrastructure $8.4B for public transportation ($.8B Amtrak) $2B for DOE Loan Guarantees – EE Included $750M – job training for high growth fields Also includes: Small business loans Moving targets: 2 key proposals HOME STAR Building STAR

64. HOME STAR (“Cash for Caulkers”) Recommended by PERAB $7 -10 billion for residential retrofits Two types of consumer incentives: SILVER STAR Prescriptive Path: $5.5 billion Rebates for specific energy saving investments 50% of project cost, up to $3,000 per home Covered measures: air & duct sealing; insulation; window and door replacement; HVAC, water heater, and appliance upgrades GOLD STAR Performance Path: $2.3 – 3 billion Rebates for demonstrated energy savings $3,000 for 20% savings, plus $1,500 for each additional 5% Up to 50% of project cost and $12,000 Proposal likely to include a financing component

65. Building STAR Commercial Buildings counterpart to HOME STAR ~$8 billion for commercial, industrial and multi-family building retrofits Two types of consumer incentives: Rebates Like SILVER STAR, for specific energy saving investments Covered measures: SILVER STAR measures plus low-slope roofing, variable speed motors, lighting, water efficiency, energy management and training Tax Incentive Expansions Prescriptive and performance pathways in existing code Increase incentives for buildings demonstrating energy savings 50% above code for lighting, envelope, HVAC Expand other tax incentives: refundable tax credits to certain entities, technology specific incentives (variable speed drives, mechanical insulation)

66. Kateri’s Crystal Ball:U.S. Energy Efficiency Policy in 2010 Clean Energy Legislation w/ Strong EE Building Codes Appliance Standards Innovative Financing Mechanisms Significant Funding from Allowances New Jobs Bill Loan Guarantees Workforce Training Federal Transit & Fixed Guideways Home Star??? Residential Retrofit Building Star??? Residential Retrofit Stagnant FY 2011 Appropriations International Accords & Binding International Climate Treaties???

68. Africa, Asia/Pacific, Europe, Latin America, North America

70. High-level – 40% of 2009 attendees self-identified as executives, and another 50% as managers

71. International –40 countries represented in 2009

72. Representative of all sectors – buildings, industrial, utilities, transportation, finance

73. Even split of government (28%), business (37%) and non-profit (28%) in 2007 & 2009Rep. Edward Markey James E. RogersChairman, President & CEO, Duke Energy Robert J. DixonSr. VP & Global Head Efficiency & Sustainability, Building Automation, Siemens Building Technologies Inc. David SzczupakEVP, Global Product Organizations, Whirlpool Corporation Nobuo TanakaExecutive Director, IEA Sen. Mark Pryor Christopher B. Curtis President & CEO, N.A. Operating Div. & Buildings Business, Schneider Electric

74. Questions?Thank you! Contact information: Kateri Callahan kcallahan@ase.org +1-202-530-2219