- DOE to Offer $25 Billion in Loans for Advanced Vehicles
- Missouri Voters Approve a Renewable Energy Requirement
- California Voters Approve Funding for High-Speed Rail System
- Boulder Voters Follow Berkeley with Clean Energy Financing
- California Approves $1 Billion for Low-Income Energy Efficiency
- Slumping Carbon Allowance Prices May Stymie Market Growth
DOE to Offer $25 Billion in Loans for Advanced Vehicles
DOE issued an Interim Final Rule last week for the Advanced Technology Vehicles Manufacturing Loan Program, which will distribute up to $25 billion in direct loans to automakers and component manufacturers. The loans will help those manufacturers establish new U.S. manufacturing facilities or re-equip or expand existing ones within the U.S. for the production of advanced technology vehicles and the components for such vehicles.
To expedite the loans, the rule will become effective as soon as it is published in the Federal Register, but DOE will also accept comments on the rule for 30 days after its publication. The loan program was authorized by section 136 of the Energy Independence and Security Act of 2007, which President Bush signed into law in December 2007. To qualify for the loan, the vehicles being manufactured must meet tough emissions standards while achieving a 25% greater fuel economy than similar vehicles sold in Model Year 2005.
Congress appropriated $7.5 billion in late September to cover the subsidy cost of the loans, and the actual amount of loans available will depend on the financial circumstances of the borrowers and the specifics of their proposed projects. Each manufacturer must be financially viable to receive a loan. And although DOE intends to expedite the loans, the agency must comply with all statutory requirements, including the National Environmental Policy Act. DOE expects to issue the loans in several rounds, with a new round every three months. Applications for the first round of funding are due on December 31. See the DOE press release and fact sheet on the loan program, the loan program Web site, and the full text of DOE’s interim final rule (PDF 1.5 MB).
Missouri Voters Approve a Renewable Energy Requirement
Missouri voters have approved a measure that will require the state’s investor-owned utilities to draw on renewable energy for 15% of their electricity supply by 2021. The Missouri Clean Energy Initiative, or Proposition C, passed easily, garnering approval from 66% of the state’s voters and passing in every county but one.
The statutory ballot measure defines renewable energy as wind, solar, small hydropower, a variety of biomass energy sources, and fuel cells powered by hydrogen from renewable energy sources, but it also allows the Missouri Department of Natural Resources to designate new renewable energy sources. The measure requires at least 2% of the requirement to be met with solar energy, and it requires the utilities to offer their retail customers rebates of $2 per watt for customer-owned solar power systems, up to a limit of $50,000.
The ballot measure also allows utilities to buy their renewable power from out-of-state and to meet up to 100% of the requirement through the purchase of renewable energy credits (RECs), which can be bought from renewable energy facilities throughout the country. However, utilities cannot meet the requirements through the voluntary purchase of renewable energy by their customers, an approach known as "green pricing." Utilities that fall short of the requirement have to pay twice the going rate of the RECs needed for compliance, and the state will use that money to buy RECs and to support renewable energy and energy efficiency requirements.
And to limit the impact of the measure on consumers, the cost impact of complying with the renewable energy requirement is capped at a 1% cost increase. The renewable requirement starts at 2% of sales in 2011 and gradually ratchets up to the 15% requirement by 2021. According to the Database of State Incentives for Renewable Energy (DSIRE), 28 states and the District of Columbia now have a mandatory requirement for renewable energy use. See the ballot measure, the election results from the Missouri Secretary of State, the Missouri Clean Energy Initiative Web site, and the DSIRE Web site.
California Voters Approve Funding for High-Speed Rail System
California voters have narrowly approved a proposition to sell nearly $10 billion in bonds to finance the construction of a high-speed rail system. The rail line will run from San Diego, through Los Angeles, and up to San Francisco, with a branch running from Fresno to Sacramento. The rail system would hit many urban centers along the way, providing a fast and inexpensive way to travel the state. According to the California High-Speed Rail Authority, the 432-mile trip from San Francisco to Los Angeles will take only 2 hours and 38 minutes and will cost less than taking the trip by car. The electric-powered bullet trains will run at speeds as high as 220 miles per hour and will reduce air pollution and greenhouse gas emissions in the state.
The bonds will provide $9 billion for building the high-speed rail system, plus another $950 million to upgrade other passenger rail systems in the state. However, the rail authority estimated the total cost of the system at $45 billion back in 2006, and the measure requires the authority to seek private and other public funds to cover the remaining costs, a prospect that might prove difficult in the current economic climate. Despite the costs concerns, the measure drew approval from 52.3% of the state’s voters, winning the greatest approval margins from counties that would directly benefit from the rail system. See the California Secretary of State’s official summary of the proposition and the voting results, as well as the California High-Speed Rail Authority Web site.
High-profile transit measures also passed in Washington State and Hawaii. Three counties near Puget Sound approved Proposition 1, submitted by Sound Transit to add regional express bus and commuter rail service while building 36 addition miles of light rail in the Seattle area. The proposition passed with nearly 57% of the vote, adding a sales and use tax of 0.5% to provide the local share of an estimated $17.9 billion "Sound Transit 2" project, which is slated for completion in 2023. Voters in Honolulu, Hawaii, also expressed their support for an ongoing project, a $3.7 billion, 20-mile elevated commuter rail line. Construction starts next year on the project, which is slated for completion in 2018. See a summary of Proposition 1 from King County, Washington, the election results from the Washington Secretary of State, the Sound Transit 2 Web site, the Honolulu High-Capacity Transit Corridor Project Web site, and the Honolulu election results (PDF 51 KB).
The Center for Transportation Excellence (CFTE) has tallied 32 transportation measures across the U.S., of which more than 70% gained approval, providing more than $75 billion for transportation improvements. Of course, much of the funding will go towards road and highway projects, but included in the approved measures are a new transit agency for Jonesboro, Arkansas; improved and expanded transit systems in a number of California cities and counties, including Los Angeles; bus rapid transit in Aspen, Colorado; mass transit in Rhode Island; expanded bus service in Eagle Mountain and Saratoga Springs, Utah; and expanded transit in Milwaukee, Wisconsin. Measures would also provide funding to continue public transit services in Lawrence, Kansas; Lansing, Michigan; Spring Lake, Michigan; Albuquerque and Santa Fe, New Mexico, and surrounding counties; and Mahoning County, Ohio. See the CFTE list of ballot measures.
Boulder Voters Follow Berkeley with Clean Energy Financing
Voters in Boulder County, Colorado, approved a ballot issue for the county to provide financing for energy efficiency and renewable energy improvements to residential and commercial properties, an approach also recently adopted by Berkeley, California. Boulder County Ballot Issue 1A passed easily, with unofficial results showing 63.63% of voters approving the measure.
The voter approval allows Boulder County to issue up to $40 million in special assessment bonds to finance the clean energy improvements. Homeowners and businesses that elect to participate in the program will repay the county over a number of years through special assessments that are added to their property taxes. The measure caps the effective interest rate for the bonds at 10%, although the county should be able to secure a lower interest rate. Because the measure has just passed, many details of the program remain to be worked out, but the county hopes to begin accepting applications as early as February 2009. See the unofficial election results from the county, the county’s overview of the measure, and the official ballot language as submitted via a resolution of the Boulder County Board of County Commissioners (PDF 72 KB).
The Boulder County measure follows a nearly identical financing effort now being launched as a pilot program by the City of Berkeley, California. In September, the Berkeley City Council approved an ordinance that allows the city to issue up to $80 million in bonds to finance energy efficiency and renewable energy projects. The city also passed a resolution to sell the first $1.5 million in bonds to Renewable Funding, LLC, which will administer the pilot phase of the financing project.
Called the Berkeley FIRST program (short for "Financing Initiative for Renewable and Solar Technology"), it is initially being launched as a program to finance solar PV systems on residential or commercial properties, with a cost cap of $37,500 per installation. Property owners will repay the city over 20 years through a special tax on their property, paying interest at a rate similar to a mortgage. As in Boulder, the tax will stay with the property, even if it is transferred or sold. For the pilot program, the city will finance 40 solar power installations throughout Berkeley. Applications are being accepted for the pilot program through November 19.
Read an overview of the program from the city’s Office of Energy and Sustainable Development and see Renewable Funding’s Berkeley FIRST Web site. For the legal background, download the resolution by visiting the city’s online record system, selecting "Resolution" as the document type, and entering "64207" as the document number. To see the associated ordinance, select "Ordinance" as the document type and enter "7061" as the document number.
California Approves $1 Billion for Low-Income Energy Efficiency
The California Public Utilities Commission (CPUC) has approved a budget of $1 billion over the next three years for the state’s Low Income Energy Efficiency program. The program provides energy efficient appliances and weatherization measures at no cost to California households with low incomes.
Stressing that the program must reach much higher numbers of households than in the past, the CPUC calls for all eligible customers to be given an opportunity to participate in the program by 2020, and it also calls for the program to evolve toward energy efficiency strategies that have longer-term payback times. The ruling also allows certain measures that improve health, comfort, and safety, even if the cost effectiveness of those measures is low. The program is administered by the state’s four large investor-owned utilities: Pacific Gas and Electric Company, San Diego Gas & Electric Company, Southern California Edison Company, and Southern California Gas Company.
The CPUC ruling calls for utilities to identify the poorer neighborhoods in their customer base and then identify energy efficiency opportunities by examining the energy use of each household in the targeted neighborhoods. The ruling also calls for comprehensive energy audits in each participating home, followed by a "whole house" approach to identifying energy efficiency improvements. In other words, the CPUC wants to avoid piecemeal strategies, such as handing out free compact fluorescent light bulbs (CFLs), in favor of more integrated energy efficiency programs. The CPUC also wants the utilities to move toward an integrated, statewide program for marketing, education, and outreach, focusing on adopting energy efficiency as a way of life, rather than on specific measures like CFLs. See the CPUC press release and decision.
Slumping Carbon Allowance Prices May Stymie Market Growth
A significant drop in the price for carbon emission credits in October may make it difficult for the world carbon markets to break the $100 billion barrier this year. An analysis released by New Carbon Finance in early October anticipated that the world’s carbon markets would reach $116 billion by the end of this year, based on the consistently high price for European Union carbon allowances (EUAs). The research company’s third-quarter report on carbon emissions trading found that the world’s carbon markets grew by 81% over the first nine months of the year, reaching $87 billion. Projecting that to the end of the year yielded the $116 billion figure.
However, the analysis appears to have been too rosy, as the company’s Web site shows the price for EUAs dropping from about 24 Euros in September to around 18 or 19 Euros today, a drop in value of about 20%, reflecting the financial crisis that hit world markets. The price for Certified Emissions Reductions (CERs) has also dropped from around 20 Euros in September to below 16 Euros today. CERs are generated by Kyoto Protocol signatories investing in emission-cutting projects in third-world countries, through the Kyoto Protocol’s Clean Development Mechanism. But despite the drop in prices, the volume of traded carbon emission credits appears to be growing. New Carbon Finance expected the volume to grow by 31% this year, increasing from 3 billion tons in 2007 to 3.9 billion tons in 2008. See the price and volume trends on the New Carbon Finance home page, and see the company’s press release from October (PDF 30 KB).
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Kevin Eber is the Editor of EREE Network News, a weekly publication of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE).
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