1. STATE ENERGY PROGRAM Progress and Challenges Eastern States Meeting November 15, 2006

2. The Road Today SEP Business Budgets Services Marketing EPACT Future Directions

3. SEP Budget FY 2006:$36.4 million FY 2007: Administration Request$49.5 million House Budget$25 million Senate Budget$49.5 million At present, DOE is operating on a Continuing Resolution which is expected to run through the end of the year.

4. EPAct 2005 Two changes to SEP: Establishes goal of 25% or more improvement in energy efficiency by 2012, as compared to 1990. Requires the Secretary of Energy, every three years, to invite the Governor of each State to review and if necessary revise the SEP State Plan, in consideration of the Plans of other States within the region and opportunities and actions than could be carried out in pursuit of common energy conservation goals SEP regulation has been updated to reflect these changes – revisions in Federal Register 10/2/06

5. EPAct 2005 EPACT establishes three programs to be carried out through the State Energy Offices (subject to funds availability): Section 125: Establishes an Energy Efficiency Program for Public Buildings for States Section 140: Establishes a Pilot Program of financial assistance to at least 3-7 States to plan and adopt State-wide programs that encourage energy efficiency. Section 913: Establishes a Program to demonstrate renewable energy in public buildings.

6. SEP Strategic Plan The SEP Strategic Plan, developed by State representatives, establishes the following goals: Increase energy efficiency to reduce energy cost and consumption for consumers, business and government Reduce reliance on imported energy Improve the reliability of electricity, fuel and delivery of energy services Reduce the impacts of energy production and use on the environment The draft Plan is in final editing and will be available in December.

7. IG Report Earlier this year, the DOE IG conducted an audit to determine whether the Department had implemented controls for the State Energy Program to ensure grant funds were used for their intended purpose determine the cost benefit of the program in meeting its goals

8. IG Report (cont) The IG Letter Report recommended: Specifying the monitoring responsibilities and staffing of the program at the reorganized EERE field sites. Implementing regularly scheduled monitoring visits that address administrative, financial, and programmatic areas Completing work with the State to design appropriate quantifiable performance measures and to use the results to re-evaluate the cost benefit of the program.

9. IG Report EERE’s Response – Next Steps Monitoring working group is revising SEP and WAP monitoring guidance and developing a coordinated grant monitoring schedule. SEP Strategic Plan includes more specific and measurable performance measures. Planning for the next phase of SEP evaluation efforts has begun, building on ORNL’s metrics work.

10. Grants Management Issues UNCOSTED CARRYOVER Special area of emphasis EERE has been criticized for its financial management. Uncosted carryover in grants and contracts is being targeted Uncosted carryover negatively impacts our justifications for additional funding for SEP.

11. Grants Management Issues E-GOV and Grants.gov: E-Gov’s budget for 2007 has been cut, and the system design contractor has been changed. SEP Forms are caught in this change. Plans are to use Grants.gov for 2007 State Plan submission Energy Emergency Plans: 50 States and Territories have submitted updated Energy Emergency Plans to date. Copies have been provided to the Office of Electricity Delivery and Energy Reliability

12. PVE Funds Last Remaining PVE Funds Were Distributed in Summer 2006 Good News/Not-so-Good News Good News: OHA distributed $42 million during July and August, 2006, mostly to States and local governments. Not-so-Good News: No requirement that these funds be used for energy-related programs. –These funds represent direct restitution to individual claimants for documented overcharges –Could go into a State’s general fund, or to a specific agency GET YOUR “BID” IN!

13. PVE Funds PVE DATA RECONCILIATION Significant number of discrepancies between PVE fund records maintained by DOE and the States; need to reconcile as much as possible E-Mail sent out to each State with the information we have on file from DOE’s systems and the State Annual Reports. Please follow up with Faith Lambert (202-586-2319, faith.lambert@ee.doe.gov) or Harvey Major (202-586-0124 or harvey.major@ee.doe.gov) with questions Deadline for submission of FY 2006 Annual Reports extended to allow for reconciliation

14. EERE Air Quality Integration – Market Transformation Opportunities DOE, in partnership with EPA and states, is supporting air quality integration 15 states are actively working on EE/RE projects to help achieve air quality objectives Successes to date: Texas is including nearly 1000 EE/RE projects in its NOX SIP Colorado spent $500,000 of an enforcement settlement on EE/RE measures in local schools The Illinois PUC looked favorably on an RPS goal with consideration of the air quality benefits Connecticut implemented 99 new Clean Energy Projects in 2005, including 75 new PV installations & 6 fuel cells DOE has provided assistance with quantification of emissions avoidance, tapping expertise at NREL

15. EERE Addresses Complex National Energy Issues Increasing dependence on foreign oil Environmental impacts associated with energy use A vulnerable national energy infrastructure Rising fossil fuel prices

16. States Guide State Information Task State Energy Information Advisory Board provides guidance. State energy offices submit news releases, project descriptions for bimonthly newsletter, Conservation Update, and success stories. WIP sponsors state-oriented Web sites for EERE: –State Energy Program Web site organizes descriptions of state energy office projects by topic and state. www.eere.energy.gov/state_energy_program/ –EERE State Activities & Partnerships links to state content on EERE Web sites, publishes energy statistics, organizes news by state. www.eere.energy.gov/states/ –Weatherization & Intergovernmental Program site links to all WIP program Web sites. www.eere.energy.gov/wip/

17. Technical Assistance Project (TAP) Crosscutting policy and technical assistance for states (up to $5k) Five topic areas: –Systems benefit charges or other rate-payer funded utility efficiency and renewable programs –Renewable or efficiency portfolio standards (RPS) –Use of clean energy technologies to reduce air emissions –Use of renewable energy on state or local public lands –Use of renewables for disaster relief, mitigation, and planning (NEW)

18. State Services Delivered (7-25-06) 3* 4* 2 6 3 4 4 1 5 3* 2 2 2 3 3 4 2 3 6 3 NH 4 MA 1 RI 3 CT 1 DE 3 2 4 1 1 1 2 1 2 2 2 1 1 2 2 1* 2 *Includes Multi-State Request(s)

19. Technical Assistance Project (TAP) For more information: Jerry Kotas (Golden PMC) at 303-275-4850, jerry.kotas@go.doe.gov

20. Renewable Energy Production Incentive (REPI) What is REPI? An incentive payment for public utilities, not for profit electric cooperatives, and Tribal utilities that generates and sells renewable energy to end use consumers. Qualifying Technologies solar, wind, biomass, landfill gas, livestock methane, ocean, or geothermal energy Fiscal YearEERE Budget Request ($million) Congressional Appropriation ($million) 20074.946-- 20065.004.856 20055.004.960 20044.003.926 20034.004.816 20023.992.840

21. REPI Contact Information For Policy and Appropriation questions contact: Dan Beckley 1000 Independence Ave, SW Washington, DC 20585 Email: dan.beckley@ee.doe.gov For REPI implementation - facility qualifications, applications, and payment questions contact: Christine Carter 1617 Cole Boulevard Golden, Colorado 80401 Email: christine.carter@go.doe.gov REPI Website http://www.eere.energy.gov/wip/program/repi.html

22. www.eere.energy.gov Bringing you a prosperous future where energy is clean, abundant, reliable, and affordable 1-800-DOE-3732