The attic at Kristen Evans’ grand, nearly century-old home in Richmond’s Woodland Heights neighborhood is far toastier than it should be on a chilly November morning.
“We could have tea parties up here,” said Hannah Fuerhoff, energy-efficiency programs manager for the Richmond Region Energy Alliance, a nonprofit that offers home energy use checkups for a $40 donation.
Fuerhoff soon identifies the culprit: Leaking, aging ductwork is blasting hot air into a space that is used only for storage.
“Old houses are really well-built,” Fuerhoff said, on an inspection that starts in the attic and progresses to bathrooms, the kitchen and the basement, among other parts of the house. “The problems come from when you’re trying to modernize with HVAC.”
Energy efficiency is a $1.5 billion industry in Virginia that supports some 75,000 jobs, from energy audits like Fuerhoff was conducting to renewable energy businesses, HVAC contractors, architects and weatherization providers that help homes and businesses use less gas and electricity, among other jobs that intersect with the field, according to the Virginia Energy Efficiency Council.
The council, a nonprofit established in 2011 to serve as a “collective voice” for what it says has been a historically overlooked and undervalued industry in Virginia, and others say the state has made some strides but still lags behind in implementing policies that could shave down utility bills, reduce the new need for expensive new power plants and create jobs.
In September, the American Council for an Energy-Efficient Economy said Virginia was among three states listed as “most-improved” on its scorecard, which ranks states in six categories: utility programs, transportation, building energy codes, combined heat and power, state initiatives, and appliance standards. Still, that was only good for an overall ranking of 29th.
“Virginia is very much behind the times on the energy-efficiency front, which is sad because it is by far the easiest and lowest cost way to reduce customers’ bills,” said Will Cleveland, an attorney with the Southern Environmental Law Center in Charlottesville. “It is a radically underutilized resource here.”
Energy efficiency and conservation “offer Virginians the most cost-effective and most readily deployable method” to meet future energy needs, according the state Department of Mines, Minerals and Energy, which provides the staff for the Governor’s Executive Committee on Energy Efficiency created by Gov. Terry McAuliffe in 2015.
The committee was tasked with recommending ways to reduce Virginia retail electricity consumption by 10 percent by 2020.
Key to achieving that goal is beefing up the programs managed by Virginia’s two largest utilities, Dominion Energy and Appalachian Power, though the State Corporation Commission, which regulates utilities, has been a stumbling block, said Chelsea Harnish, executive director of the Virginia Energy Efficiency Council.
“Utility programs make up about 90 percent of the progress toward our 10 percent reduction,” Harnish said.
Expanding them is a top priority for Harnish’s group.
“A lot of utility programs are not passing, not able to get approval from the State Corporation Commission,” she said, adding that the commission has been historically reluctant to approve programs in which all ratepayers pay for programs that may directly benefit only a subset of customers.
“They are concerned about nonparticipant costs,” Harnish said.
In an order this year that rejected Dominion home-energy assessment and residential heat-pump upgrade programs, the commissioners said they could not find that the so-called demand-side management programs were in the public interest.
“We are sensitive to the impact of the proposed DSM (demand-side management) programs on customers’ bills, particularly the bills of customers not participating in the programs,” they wrote.
Part of the problem, Harnish said, is the challenge of calculating the value of such programs.
“What we hear from the SCC time and time again is they’re skeptical of deemed savings,” said Harnish, referring to industry-standard formulas that predict a certain benefit, such as the amount of energy use cut by installing LED light bulbs, for example. The SCC is currently receiving input on what uniform standards for what the energy-efficiency industry calls evaluation, measurement and verification should look like, she said.
“We feel that having strong transparent EMV protocols will be helpful in the future,” Harnish said. “Our hope is the SCC will start to see the realized savings of these programs.”
A study prepared for Dominion and finished in October says the company, which has nearly 2.5 million customers in Virginia, has a “lower range” of achievable energy savings from demand-side management programs than other utilities. Dominion’s EnergyShare program offers bill payment and weatherization for low-income customers, veterans and people with disabilities.
“Since the cost of electricity in Virginia is below the national average, the costs of energy avoided for a given program is less than would be avoided in some other parts of the country, due to the higher cost of electricity elsewhere,” said Dominion spokesman David Botkins. “This causes the economic value and cost-effectiveness of energy-efficiency programs in Virginia to be lower than in some other regions. It therefore becomes important to focus on the most cost-effective programs and measures, and to size the programs and incentives that make financial sense, and can gain SCC approval and customer acceptance.”
The Virginia Energy Efficiency Council is pushing state and local officials to adopt stricter energy building codes related to new home construction and support the adoption of a method of financing energy-efficiency improvements called “commercial property assessed clean energy.”
Businesses take out a loan from a bank to pay for water and HVAC upgrades or rooftop solar panels, for example, but instead of paying it back to the bank directly, the payments are made as part of the local real estate tax bill. Businesses are able to avoid the upfront capital requirements needed to pay for the upgrades and the loan stays with the building if it is sold, Harnish said.
The council also wants to see expanded performance-based contracting for state-owned buildings and public higher-education institutions. Under performance-based contracting, energy service companies guarantee energy savings for a given building, then are paid with tomorrow’s savings for immediate improvements, a budget-neutral approach.
The council’s report, released this year, says more than 200 projects at jails, schools, state agencies and other public buildings in Virginia have reduced electric consumption by 43 million kilowatt hours.
“Even though Virginia has made significant progress with performance contracting in recent years, it remains a largely untapped source of cost saving,” the report says. “Performance contracting can help divert needed capital dollars away from buying replacement chillers, lighting, etc. and instead funnel those dollars to mission-critical activities, all while upgrading the performance, functionality and comfort of the facilities.”
Larry Cummings, solutions manager for Trane, an energy services company that operates in Virginia, said the biggest boost the state could provide would be forming a committee to determine the extent of deferred maintenance at public buildings.
“I believe there’s probably over $3 billion in deferred maintenance in higher education,” Cummings said. “The General Assembly is not going to be giving them a check for that.”