Quick Questions: Phil Giudice

Phil Giudice is Commissioner of the Massachusetts Division of Energy Resources, Chair of the National Association of State Energy Officials, and Treasurer of the Regional Greenhouse Gas Initiative. Phil holds both a masters degree in economic geology and an MBA.

Phil Giudice
Phil Giudice

Q: Governor Patrick recently called for 2,000 megawatts of renewable energy to be installed by 2020. What types of subsidies and other incentives are you planning to implement to reach this goal?

That goal was specific to wind power generation by 2020. We also have a 250 megawatt goal for solar by 2017, and we have a commitment to get 25 percent of our energy will be met with demand response and energy efficiency by 2020. We have very aggressive goals out there. I’m feeling a relatively high level of comfort that we do have the tools in place to make those goals happen.

We were one of the first states to put in place a renewable portfolio standard to fund new renewable projects, and we’re already getting 8 percent of our energy from renewable sources that had already been developed. We’re now focusing on new renewable projects. Initially this was set as a modest number and it was growing 0.5 percent a year. There has been a tremendous amount of renewable projects developed in recent years, so that we are meeting 100 percent of our RPS with new renewable projects, increasing our renewable usage by 1 percent a year instead of 0.5%. There are also a lot of projects in the pipeline to make this happen.

The reason to set bold goals in not because renewables are in and of themselves a better option for generation, but because they’re an appropriate and valuable option for the future. As we see gas prices possibly continuing to head higher and wreak havoc on our economy and other energy-related costs rising, we’re also seeing things like solar PV coming down in cost by as much as 40 or 50 percent in the last year. Looking out a few years, some renewables will actually be less expensive than conventional power in the market due to the increasing costs of those sources. Future progress will make renewables a better economic choice than the alternative.

Q: How are you using federl stimulus dollars being used to support these initiatives?

It’s heartening that a significant piece, about 10 percent, of the stimulus money is being used to make a downpayment on what’s possible when we really put significant resources to it. I hope that in a year or two we’ll be able to look back and be very proud of the case that we’ve made by demonstrating the paybacks that we can get. We need to build more success stories out there.

Awards have been made but they have come with conditions, and the federal government and DOE have been unable to give a path forward for many of the agencies to spend large portions of the stimulus funds according to the programs that have been approved. The conditions are understandable but very frustrating. Some of the money is moving quite nicely, such as the weatherization funds, but unfortunately that’s not the picture across all of the areas.

Q: Most families do not have the resources to pay directly for comprehensive energy efficiency improvements. Some have suggested that programs on-bill financing and real estate tax financing programs could be the solution, others have suggested subsidized loan and mortgage programs. Do you think that these types of programs can go to scale? Are utilities and/or local communities willing to try these types of programs?

One of the first principles is that we see a lot of cost effective energy efficiency work that is not getting supported in existing structures right now, and it’s not because it doesn’t make economic sense. It’s because of all kinds of other aspects of it. Inability to provide financing, complications between owners and tenants, simple unawareness of what better practices are out there. I think first and foremost when we look at the challenges of moving from our current energy consumption nationwide to a much more energy efficient future we have to recognize the limits of some of the market solutions that we have tried.

That said, I do think that innovative financing mechanisms that can help end users approach their energy decisions differently make a lot of sense. I am very encouraged by looking at some of the experiences people have had, either funding energy improvements around property tax assessments, as well as on-bills and having it retained with the meter instead of the tenant in buildings.

I don’t see any of them yet as successful enough to be the model for going forward, so I’m encouraged by the trying of different approaches but I do think we both have to work on the delivery side of ramping up energy efficiency across the country in ways that are specific to every state, every territory, every circumstance as we’re also putting in place better financial solutions to deal with some of these challenges.

Q: Where do you see the biggest potential for energy savings in the coming years?

In Massachusetts, which has been doing energy efficiency programs continuously for decades, some of them recognized as some of the best programs in the country over that time, we still in the past were only touching something like 10,000 or 15,000 homes a year. We had a mandate that only prescribed a relatively limited amount of money for these programs and we tried to get the most savings we could from those programs. Our new legislative mandate is to spend whatever makes sense economically on energy efficiency, which vastly expands the opportunity to put money towards these programs.

As we know, it isn’t one simple fix. It isn’t just rolling out more compact fluorescent lights. It is hundreds and hundreds of different measures that are building-specific, site-specific and situation-specific that need to be addressed on as holistic a basis as we possibly can.

We’re going to be moving much more aggressively forward with continuous commissioning and commercial buildings to ensure that these are actually operating as required.

There’s enormous opportunities across the board that we need to be moving on. Some of the phenomenal savings we’ve achieved, such as with appliances like refrigerators that have gotten much more efficient, will eventually flatten out. We won’t necessarily see the same level of gains across the board on these appliances that we’ve seen in the past.

Cogeneration and combined heat and power is one tool that I think will be very helpful in institutions and buildings with high thermal loads. In Massachusetts we have a lot of programs and we will be expanding to make that happen. With decoupling and the fact that companies are not so adverse to losing load through these efficiency programs, I think we’re going to be able to help them come aboard and be valuable proponents of these programs.

Q: There is an increasing emphasis on the job creation aspect of energy efficiency. What is the level of job creation that you are expecting as a result of these initiatives? Does the current workforce have sufficient skills to meet the demand? Are you establishing special green jobs training programs?

We definitely see this as fitting into a long-term good economic growth story that will touch every employment level in the state. In 2008, Massachusetts passed a green jobs bill in which we established several programs to push forward green job employment in the state.

The community colleges and tech schools are working together in putting together a program to train workers for these programs. We have seen a 100 percent growth in green jobs as it relates solar PV and manufacturing and insulation, and about a 40 percent growth in efficiency.

We are very encouraged, and this is not a hollow promise. We are building programs that will have enduring employment opportunities as we go forward.

Q: There are thousands of local communities across the nation. How can State government help local communities play an active role in implementing energy efficiency?

The Massachusetts Green Communities Act of 2008 set up a division in my department to work with cities and towns to be their ally and expert and help them make green decisions as best as possible for their situations.

Cities and towns are some of the least prepared and least able to deal with the magnitude of questions we’re needing to deal around our energy circumstances. In Massachusetts it’s 351 cities and towns. A handful have significant fulltime staffs, but the vast majority are staffed by volunteers and committees, and they’re all dealing with the same difficult energy questions.

Our very small agency now has a resource to walk small towns through the process of procurement on energy matters, do greenhouse gas baselines, and help in other ways to look at their energy and carbon choices and try to come up with better ideas. We’re a very active resource for them.