Stimulus sparks surge in energy conservation industry

A coming flood of federal stimulus money for Georgia’s energy conservation industry has state officials scrambling to line up their buckets.

Small government offices have until Monday to draw up plans for spending more than $200 million in new energy dollars announced two weeks ago.

And on Thursday, the U.S. Department of Energy announced even more energy money headed into the state.

To conservation advocates, it’s manna from heaven.

“We have an unprecedented opportunity to build a market for energy efficiency and help consumers manage their energy bills,” said John Sibley, program director for the Southeast Energy Efficiency Alliance.

The funding dwarfs its recipients.

One state energy office, a part of the Georgia Environmental Facilities Authority, has three employees, a boss who has other responsibilities, and a $1.4 million annual budget. It will be responsible for handling $82.5 million in stimulus money.

Another GEFA office spent $8 million last year funding weatherization projects. It will have $125 million to spend this year.

And $67 million will go to Georgia cities and counties, too. That’s the funding announced last week.

The surge of dollars has prompted a series of workshops at the state Public Service Commission and pulled promises from Gov. Sonny Perdue — including promises about the PSC.

Perdue assured the U.S. secretary of energy in writing last week that the state would toughen energy-efficiency requirements on buildings and that the PSC would try to change the way Georgia utilities make money.

The promises were requirements for getting some of the stimulus money.

Conservation advocates say they aren’t sure Perdue intends to go as far as they believe the law requires. They say they’ll have a better idea in six weeks, when Georgia files a more detailed plan.

Utility rate changes

The State Energy Program and the GEFA’s weatherization program both submitted their initial spending plans last week, in advance of Monday’s deadline.

The current weatherization program provides grants, mostly to community-action agencies, to weatherize homes.

The SEP is one of 50 such state offices that are required in every state. It also does most of its spending through grants.

That office used this year’s $1.48 million budget supporting energy-efficient housing construction, audits to determine industry’s energy use, conservation education, energy-related research and — just last week — a green-energy conference in downtown Atlanta.

The two offices’ initial stimulus spending plans are broad-brush versions but will be enough to bring in 10 percent of the money now.

More detailed plans are due in six weeks. The rest of the money will begin flowing after those plans are reviewed.

Energy efficiency advocates are both thrilled with the funding spike and aware that Georgia isn’t quite ready for it.

“We’re going to have to develop additional infrastructure in Georgia in order to spend this money well,” said Sibley of the Energy Efficiency Alliance.

He said the state would need to train people to install conservation tools and equipment, as the state begins to do energy-efficiency work on a bigger scale.

Meanwhile, conservation advocates are watching Perdue and the PSC closely, related to the assurances sent to Washington last week.

The assurances are among the strings attached to the stimulus money. One, in particular, is drawing attention.

As required by the stimulus program, Perdue promised that the state PSC would seek changes that would both encourage consumers to conserve energy and protect utility profits when they did.

One version of that, in place in other states, allows utility rates to rise when energy sales go down and vice versa. The intent is to make utilities “agnostic” about energy-efficiency programs, instead of opposed to them.

Currently, energy efficiency hurts most utilities’ bottom line.

The change is controversial.

Conservation and environmental advocates like it. So does the utility industry’s national trade group, the Edison Electric Institute.

Industrial and big commercial energy consumers oppose it. They already have spent millions of dollars on energy conservation, and the change could raise their rates to subsidize others who have not done that yet, said Roy Bowen, a lobbyist for the Georgia Traditional Manufacturers Association.

Meanwhile, Georgia Power is at best neutral about making changes in state policy, saying its current rate structure already complies with the requirements of the stimulus package.

“It’s our position that our rates now currently meet the provisions of the language in the law,” said Greg Roberts, a company rate design expert.

Conservation advocates say that’s wrong, and that Georgia Power is trying to avoid changing its traditional business model. But they also believe the government is unlikely to force the issue.

Stephen Smith, director of the Southern Alliance for Clean Energy, said he doubts federal officials will withhold stimulus money if Georgia doesn’t keep its promises.

The federal government is “highly motivated to get as much of this money out the door as fast as possible,” he said.