Climate Leadership, Standards and Equity: All Matter in the NEEP Region

I recently heard “move electrons instead of molecules” to describe policies to electrify buildings and transportation to displace the use of carbon-intensive fossil fuels. This clever phrase describes a key trend in ACEEE’s recently released 2020 State Energy Efficiency Scorecard – that states working to implement the most aggressive greenhouse gas (GHG) emission reduction goals in the nation scored the most points for energy efficiency policies. Indeed, California’s aggressive electrification of buildings and transportation through zero emission building and vehicle standards knocked Massachusetts from its nine-year status as the national energy efficiency leader. Nonetheless, the Northeast and Mid-Atlantic region, with its leadership to aggressively reduce GHG emissions, dominated the top 10 in the scorecard.

Climate Leadership Matters

Pulling the NEEP region into focus, the scorecard shows that it remains a national energy efficiency leader and that this is increasingly tied to state leadership to aggressively reduce GHG emissions. In 2020, seven Northeast and Mid-Atlantic states – one more than 2019 - are among the top 10. All seven have aggressive GHG reduction goals and policies. This year for the first time, the District of Columbia, with the most aggressive GHG mandate in the region, joined the top 10 as it took steps to implement its minimum energy performance standards for existing building and increased the DC Sustainable Energy Utility energy savings goals with priority to bring energy efficiency and green jobs to low-income communities.  

These leading states take a comprehensive approach to increase energy efficiency, including all fuels efficiency with electrification, as key pathways to reduce GHG emissions. Key features include:

• All Fuels: Setting aggressive energy efficiency program goals for all fuels (e.g., MMBTU) to provide comprehensive energy savings that include non-regulated delivered fuels (e.g., weatherization and cold climate heat pumps to reduce or replace the use of heating oil and propane for space and water heating)
• All Benefits: The inclusion of non-energy benefits in cost-effectiveness analysis (e.g., improved health, jobs and business development, reduced GHG emissions)
• Building Energy Labeling: Programs that promote home energy rating and labeling, and/or building energy benchmarking and performance goals or requirements
• Progressive Energy Codes: State adoption of the latest national model energy codes with voluntary “stretch” and zero energy code goals, and programs to achieve a high level of energy code compliance
• Appliance Standards: Adoption of state appliance efficiency standards
• Vehicle Emission Standards and EV Infrastructure: Low or zero emission vehicle standards with programs to achieve high levels of EV ownership and charging infrastructure per capita
• Mass Transit Support: Strong state support for mass transit funding and goals to reduce vehicle miles traveled
• Smart Development: Integrated transportation and land use planning that encourages smart, efficient development near mass transit
• State Lead-By-Example Programs: Advanced or zero energy/emission standards for publicly-funded construction, benchmarking and energy performance goals for existing public buildings, state fleet low and zero emission vehicle goals
• Equity: Programs that prioritize energy efficiency and clean transportation solutions for economically disadvantaged or marginalized communities

All seven states have comprehensive clean energy policy frameworks that feature energy efficiency and electrification to reduce the carbon footprint of homes, buildings, and transportation. All are in the process of developing or have completed detailed decarbonization roadmaps featuring energy efficiency and electrification, and all have strong leadership support from Governors, legislatures, and regulators.

New Jersey and Maine joined this leadership trend in 2020. New Jersey Governor Murphy released the 2019 New Jersey Energy Master Plan and the Board of Public Utilities followed with a June order setting ambitious goals to ramp up energy efficiency program annual savings goal of 2.15 percent of electric use and 1.1 percent of gas use. In December, Maine Governor Mills released a four-year climate action plan “Maine Won’t Wait” developed by the Maine Climate Council. Both state plans were developed with extensive stakeholder input and feature increased energy efficiency and electrification of building heating and transportation. They also highlight the urgent need to serve economically disadvantaged and marginalized communities.

Standards Matter

Digging deeper into the results, we see that low and zero energy  emission standards for appliances, buildings, and vehicles are a growing trend for top-ranked states. Following California’s long-time leadership on those standards – key to California’s return to #1  – a growing number of state climate action plans in the NEEP region include minimum efficiency standards to dramatically reduce GHG emissions with lasting impacts.

Minimum appliance, building, and vehicle standards yield tremendous savings as they affect every appliance and vehicle sold, every home and building built or renovated, and eventually all existing structures. They drive product and building design innovation and enable market-forming multi-state collaboration while leveling the playing field so that everyone enjoys the benefits of increased efficiency.

Leading-edge state standards in the NEEP region include New York and Vermont adopting state appliance efficiency standards, and the District of Columbia preparing to implement the nation’s first minimum energy performance standards for existing commercial, institutional, and government buildings – the District’s largest source of GHG emissions. In addition, eight states require building energy benchmarking of state buildings (Connecticut, Delaware, the District of Columbia, Maryland, Massachusetts, New Hampshire, Rhode Island, and Vermont), and three have active performance contracting programs to improve building energy performance (Maryland, Massachusetts, and Pennsylvania).

For building energy codes, 2020 will end as a record-setting year for code adoption in the NEEP region. Of the 13 states, six adopted the 2015 IECC and six adopted the 2018 IECC, the two most recent energy codes. This includes the first update to the Maine statewide energy code in 10 years. Several states also began initiatives to improve energy code compliance. Massachusetts is reviewing statewide zero energy stretch code options to begin by 2022. Maine, too, is reviewing statewide stretch code options. Seven NEEP region states (Connecticut, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island, and Vermont) encourage zero or near-zero energy affordable multifamily construction by offering passive house credits or incentives for federal low income housing tax credits. 

For vehicle emissions, eight Northeast and Mid-Atlantic states (Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Rhode Island, and Vermont) are leading the way with standards through their participation in the national Zero Emission Vehicle (ZEV) program. These state standards set the stage for the Transportation Climate Initiative’s development of a comprehensive multi-state cap-and-trade system by the 13 states in the NEEP region to further reduce vehicle emissions with a system of carbon allowances. The proceeds from this market-forming initiative, informed by the successful Regional Greenhouse Gas Initiative (RGGI) that has effectively reduced power plant emissions, will support community investments to further reduce transportation-related GHG emissions with equity.

Perhaps in 2021 these states will, likewise, collaborate to adopt and support implementation of consistent building energy and emission standards to reduce the carbon footprint of existing and new homes and buildings.

Equity Matters

An evolving feature in the scorecard are policies and programs that prioritize providing the cost-saving, comfort, health, and quality of life benefits of energy efficiency to economically disadvantaged, underserved, and marginalized households and communities – which are largely communities of black, indigenous, and people of color.

A September 2020 ACEEE study found that low and moderate income households in the NEEP region have higher energy burdens than the rest of the country. While this population has the most to gain, many remain underserved by energy efficiency programs. Yet, states cannot achieve carbon neutrality (or anything close to that) unless they reduce the carbon footprint of every house and every building.

This past year, in the face of social and racial unrest and the disproportionate impacts of COVID-19 on disadvantaged populations, states in the NEEP region shifted resources and introduced initiatives to prioritize services to these communities. All state climate action plans are recommending action such as increased funding, collaborations with community-based weatherization services to increase customer outreach and retrofit improvements, fuel switching and heating electrification, passive house standards for affordable multifamily initiatives, community engagement that links energy efficiency with public health, affordable housing, climate resiliency and economic development, and the siting of affordable housing near transit centers. But increased commitment and funding is needed to break through the multiple barriers to unlock the benefits of energy efficiency for disadvantaged communities.  This should be a high priority for all states in 2021.

Lesson Learned for 2021

We can all learn from states that are leading as well as from those that lost ground in the scorecard. My advice to states seeking to break into the top of the rankings is to:

1. Be a Climate Leader by completing and aggressively implementing state climate change action plans that prioritize energy efficiency, including electrification.
2. Pass State Appliance Efficiency Standards and support re-starting a renewed federal appliance standards program including undoing recent rollbacks.
3. Advance Building Codes & Standards with enforcement to achieve high levels of compliance, adoption of zero-energy stretch codes to pave the way for zero energy codes by 2032, and require all state-funded construction to meet a zero energy code.
4. Adopt Statewide Home Energy Rating and Benchmarking to consistently rate and label the energy performance of homes and buildings, link this to energy code compliance, and tie this to comprehensive and impactful efficiency retrofit efforts with a high priority to serve disadvantaged populations.
5. Adopt all-fuels goals for energy efficiency programs with cost-effectiveness screening that reflects the non-energy benefits of deep efficiency and the displacement of fossil fuel use.
6. Prioritize Equity including the expansion of energy efficiency and decarbonization of homes, buildings, and transportation through collaborations with community-based public health, economic development, wellness, and climate resilience programs.
7. Align Utility Energy Rate Design and Cost Recovery with state GHG and energy affordability goals such that the time-of-use cost per MMBTU of electricity and gas reflect priority to reduce GHG emissions.  
8. Collaborate with and through impactful multi-state initiatives to reduce GHG emissions as the most expedient and impactful way to reduce the carbon footprint of new and existing homes and buildings at scale.

NEEP’s 2021 Commitment

We’re proud to assist Northeast and Mid-Atlantic states to set and achieve aggressive building sector carbon reduction and energy efficiency goals. We will continue this regional work in 2021 by engaging energy efficiency leadership and stakeholders in learning exchange, advancing regional energy efficiency and building decarbonization market transformation initiatives, conducting research and analysis to support leading-edge public policy and program, and highlighting best practices with links to resources. Our 2021 regional initiatives include:

• NEEP Regional Summit Series: Resilient, Low Carbon Communities
• Public Policy Leadership and Best Practices
• Community Pathways and Resources
• Building Energy Codes and Appliance Standards
• Low-Carbon Retrofit Solutions
• Heating Electrification Market Transformation
• Smart Energy Homes and Buildings
• Strategic Energy Management

Support and join NEEP’s work in 2021 as a state partner, as an Ally, s a sponsor of our 25^th Anniversary Summit Series – Resilient Low Carbon Communities, or as a participant in our topical working groups, advisory committees or webinars. Stay in the flow by subscribing to NEEP newsletters.

For now, take a break, enjoy the holiday season and come back happy, healthy, and inspired to make 2021 a year that we remember for our progress together in making a clean, sustainable, just, and equitable future possible for everyone.

Happy New Year!