Post by pfsc on Jun 2, 2015 11:12:12 GMT -5
House Democratic Policy Committee 6/1/15, 10:00 a.m., Room 418 Main Capitol
By Matt Hess, PLS
6/1/2015
The committee held a public hearing on Gov. Tom Wolf’s Energy Investment Initiative.
John Hanger, Secretary of Planning and Policy, Office of the Governor, said that until 2010 Pennsylvania was a leader in promoting development of renewable energy and energy efficiency and a recent report from the Solar Foundation found that employment in Pennsylvania’s solar industry has declined by 30 percent since 2012, even as the rest of the nation is seeing double-digit growth.
“Gov. Wolf understands the important role the state can play by investing in economic growth and job creation. The budget launches a $675 million economic development package, supported by revenue from the severance tax on drilling, designed to get Pennsylvania back on the right track. Funds from a bond issue will be used to provide $100 million to the Pennsylvania Industrial Development Authority to provide revolving loans to assist manufacturers and small businesses. Another $250 million will be used to reinvest in the Business in Our Sites program, which has created 18,000 jobs and $1.8 billion in private investment since 2004,” Sec. Hanger stated. “Understanding the critical importance of remaining at the cutting edge of technological innovation, the budget also provides $100 million to support entrepreneurs and established companies working to make technological breakthroughs into products that can be used every day. Finally, the economic development package includes $225 million to support the deployment of renewable energy sources and clean technology investments and the creation of good paying ‘green jobs.’”
Hanger highlighted the main components of the governor’s energy proposal:
• $50 million to re-launch the PA Sunshine program;
• $20 million program to facilitate construction of new wind farms and support interconnection to the grid;
• $20 million in competitive grants for projects designed to make Pennsylvania farms more self-reliant;
• $50 million in competitive grants to fund projects to improve energy and efficiency;
• $30 million in competitive grants to businesses that employ new technologies to produce heat and power;
• $30 million to the Pennsylvania Energy Development Authority;
• $25 million in matching grants to business parks and manufacturers to construct the last few miles of natural gas distribution lines.
“The Governor is committed to supporting renewable energy through the investments proposed in the budget. We believe that this budget represents the most significant opportunity available in the near term to provide support for this critical sector, which will make an important impact in every one of your districts,” Sec. Hanger stated. “We are open to productive dialogue on the design elements of each of the proposals above, and will look forward to working with you to ensure that they are implemented so as to provide maximum return on investment.”
Rep. Barbin questioned if there has been discussion to combine energy efficiency with natural gas distribution lines and noted that a school district in Johnstown saved $250,000 in energy savings by utilizing natural gas. Sec. Hanger agreed that natural gas distribution lines are a critical component of the governor’s plan. “That’s an example of why it’s important to make this package available to more people,” he stated. “
Rep. Barbin inquired about the status of waste coal plants due to federal regulations related to mercury. Sec. Hanger emphasized acid mine drainage is the main source of pollution to Pennsylvania’s rivers and streams and said waste coal plants have been used for “chipping away at the enormous legacy cost” by consuming huge piles of waste coal. He indicated that he would speak to Rep. Barbin further on the issue.
Rep. McCarter emphasized that it is not an “either/or choice” between alternative energy and natural gas and questioned what the return of investment is on alternative energy. Sec. Hanger said one dollar in state investment can bring five dollars in private investment. “The savings are private investment upfront from entrepreneurs who want to build projects and consumer savings in the marketplace,” he stated.
Rep. McCarter questioned how the proposal addresses energy efficiency in agriculture. Sec. Hanger said agriculture can be a “major force to bring clean energy to Pennsylvania” and said the initiative will benefit farmers. “
Rep. Pashinski took issue with commercials being run by the natural gas industry in relation to the governor’s proposed severance tax and asked the secretary to address the issue. Sec. Hanger emphasized that the governor’s proposal is funded by utilizing $55 million from the revenues produced by a severance tax. “The gas drilling tax is overdue in Pennsylvania. We are the only state that does not have a gas drilling tax in those states that produce gas,” he stated. “It is literally nutty for us not to have a reasonable tax on this incredible resource when other states with much less good resources have had such taxes in place in some cases for decades and decades and decades.” Sec. Hanger added that an Independent Fiscal Office (IFO) report concluded that 80 percent of the tax would be paid by “out-of-state folks” and noted the natural gas industry has reported in some cases record profits and record production. “Those who are opposing this package are within in the industry or ideologues,” he stated. “It’s time to tell the truth and pay a reasonable tax.”
Michael Matotek, Owner, Open Sky Energy, expressed support for leveraging state dollars to encourage private investment in solar but warned against over-subsidizing solar installations with another short term rebate. “Last week, in a meeting here in Harrisburg of over 50 Pennsylvania solar professionals, we came to an agreement that we need an alternative to a simple short term rebate which could actually destabilize the current solar industry by reintroducing a heavy reliance on public funding for solar projects. The previous rebate program was a huge success because it kick-started solar in PA when equipment costs were extremely high. But now that global competition has greatly reduced those costs, we no longer need a large subsidy,” he stated. “During the rebate era, we had a bit of a’ wild west’ culture. As solar equipment pricing started to drop, the PA rebate and a 30 percent federal tax credit could be combined, over-subsidizing solar installations. Much of this above market demand was fulfilled by large out of state companies that setup temporary operations and employment positions, which were terminated when the PA rebate fund ran dry.”
Matotek offered the following suggestions for the initiative:
• Only allow solar produced in Pennsylvania to qualify for Pennsylvania Solar Renewable Energy Certificates (SREC);
• Provide solar loans below market rate so that solar can be installed without the high upfront capital cost;
• Instead of a short term rebate, institute a long term rebate program with a declining incentive based on the amount of solar installed.
Jim Kurtz, President, RER Energy Group, spoke in support of the governor’s initiative and also emphasized the importance of closing Pennsylvania’s borders to out-of-state SREC sales. “A new Sunshine Program will reinvigorate the solar industry in Pennsylvania. RER Energy Group supports that policy. As we have demonstrated, it has been a difficult five years for the industry in our Commonwealth and an investment to regain lost opportunities will be welcome. However, the industry can stand on its own long term with the right mix of public and private collaboration. Low interest financing and securing our trading borders from out-of-state SREC sales are two significant actions that the Wolf administration’s Energy Investment Initiative can implement within a short timeframe and with negligible expense,” Kurtz stated. “RER Energy Group stands with the rest of our industry to assist in any way possible to enact these reforms. In addition, we very much appreciate the support your administration is providing for the successful future of this critical 21st century industry.”
Mike Speerschneider, Chief Permitting and Public Policy Officer of EverPower Wind Holdings and speaking on behalf of Mid-Atlantic Renewable Energy Coalition, spoke in support of the proposal. “The Energy Investment Initiative represents an important commitment to a diversified energy portfolio in Pennsylvania. It tells us that this Administration is willing to work with the industry to find ways to promote new projects, new growth and new jobs,” he stated. “This budget could provide the kick-start needed to bring more companies like EverPower back to Pennsylvania with aims to build more projects.”
Speerschneider emphasized the importance of the “messaging” that the governor’s provides for the solar industry. “When we look at the net investment that these projects require versus the long term energy generation that’s produced, five to ten times more value created than the net upfront investment. This is one of the best categories for investments people can make,” he stated. “The message is not known. We need this initiative to get this message out.”
Rep. Vitali questioned if the $50 million to re-launch the Sunshine Solar program is a good use of the funds. Speerschneider indicated that it is a “very good” use of funds. “We see that money helping particularly in the middle market area, projects 100-200 kilowatts in size, some of those projects may not go forward if that was not there,” he stated. Matotek reiterated his concern about over-subsidizing. “It could be worked out if the amount of the rebate was backed off and spread out for a longer period of time,” he stated.
Rep. Vitali questioned if the suggestion of only allowing solar produced in Pennsylvania to qualify for Pennsylvania Solar Renewable Energy Certificates would ultimately produce more solar energy or if the provision would be solely to create more jobs in Pennsylvania. Speerschneider said the recommendation is primarily a Pennsylvania jobs issue but also has the added benefit of allowing Pennsylvania to keep up with other states in the field. “It would create more jobs in Pennsylvania and lead to more jobs as well,” he stated.
Rep. Pashinski asked what the return of investment is to install solar on a standard home. Speerschneider said a five kilowatt system may cost $20,000. “The net investment of that versus savings are going to lead to an eight to nine percent return of investment,” he stated. “We see payback periods in our commercial space for five to six years. In the residential it’s a little bit longer term; seven, eight, nine, ten years.”
Andrew Sharp, Deputy Director of Mayor’s Office of Sustainability, City of Philadelphia, discussed Philadelphia’s efforts to advance energy efficiency and how municipalities across Pennsylvania will benefit from increased state investments in energy efficiency programs. “We recognize that we need to be working closely together to develop next-generation policies, incentive programs, and funding streams to advance energy efficiency at scale. This collaboration will be critical to helping us reach aggressive - but achievable - energy use reduction goals,” he stated. “Despite tremendous growth in energy efficiency, the progress has not been enough to offset what we have reported as an overall increase in citywide energy use of 19 percent from 2006-2014. Since 2010, Philadelphia has experienced extreme weather in both the summers and the winters, and our citywide energy use has tracked very closely to the number of hours requiring buildings to use heating and cooling. Philadelphia also saw increases in population and economic growth over that period of time, and we will need to make more aggressive efficiency investments to decouple energy growth, which of course is and will continue to be a key a priority, from increasing energy use. Achieving energy efficiency at scale will require alignment of local, state, federal, and utility partners. Consistent, long-term funding streams, policies, and programs are essential to building a robust market for energy efficiency.”
Tom Schneider, Director of Facilities and Operations, North Penn School District, said the school district’s energy consumption decreased 37 percent from 2008 to 2012 with a reduction of expenditures equating to almost $2 million per year. “At North Penn School District we have attempted to renovate aging facilities over time but we still have old energy in efficient lighting, motors, and equipment throughout many buildings. Currently we do not have available capital funds to replace this equipment in the near future. Grants of any value would greatly assist North Penn in the replacement of inefficient equipment,” he stated. “For example, a grant as small as $10,000 with a match from the District, could replace the inefficient building perimeter lighting on four elementary schools and have a return on investment in two years or less with a potential annual savings of $1,000 a year. Larger grants to replace gymnasium lighting could reap similar return on investments with greater savings. North Penn School District would be very interested and would take advantage of grants for energy efficient projects of any value.”
Ellen Lutz, President and CEO, Clean Markets, argued that the proposed $225 million Energy Investment Initiative will bring much needed help to keep energy efficiency and renewable energy on their path to long-term market viability and discussed the positive benefits of alternative energy. “Energy efficiency is the backbone of a thriving competitive business environment and Pennsylvania’s homes and businesses are just beginning to wake up to the benefits it can provide to them,” she stated. “In addition to energy efficiency, the global market for renewable energy continues to grow. Clean Edge, a market data firm, projects that the combined renewable energy sectors will continue to grow over the next 10 years, from $247.6 billion in 2013 to $397.9 billion in 2023. In the US, non-hydroelectric renewables accounted for 41 percent of new generation capacity in 2013, more than triple the contribution of coal, oil and nuclear combined! This was fueled by a strong growth in solar PV as its prices come down. Installed prices for solar PV have dropped from $7.20/Watt in 2007 to $2.33/Watt in 2014, and are projected to drop to $1.21/Watt by 2023. And wind energy is already the least expensive electrical generation resource in Colorado as well as other states in the Great Plains and the Southwest. Solar electricity and wind energy are on their way to being cost competitive, but still need investment to get over the finish line to long-term sustainable markets.”
Rep. Vitali asked what other items the legislature should consider to increase energy efficiency in Pennsylvania. Schneider indicated that other states have an “energy office” that provides information to municipalities, school districts, and businesses to how to approach energy efficient projects and encourage benchmarking. “Fifty-six school districts out of the 500 currently benchmark with Energy Star in the commonwealth. If more school districts would benchmark and study their energy use that leads to them questioning, understanding, and improving their energy consumption,” he stated.
Mike Brubaker, Owner, Brubaker Farms, emphasized that the goal of his farm is to find ways to partner economic values with environmental values when investing in new projects and explained that in 2007 Brubaker Farms built a methane digester to produce 210 kW per hour of electricity and from 2010 to 2014 installed 285 kW per hour capacity of solar panels on the rooftops of some barns. Brubaker explained how a methane digester operates. “We’re taking dairy cow manure extracting the methane from powering a power unit that’s powering a generator that’s making electricity,” he stated. “We’re not only making electricity, we are reducing environmental impacts on air quality by destroying that methane that otherwise would be released and improving air quality by 21 times from what the experts tell me. We’re reducing global warming by doing that. The cows are eating all the time so of course they are producing a waste product around the clock 24/7 we are making electricity 24/7 with a renewable form. We are not relying on hours of daylight; we are not relying on wind speed.”
Brubaker emphasized that “for every four cows in Pennsylvania you can power one household worth of electric” and argued that the state should invest money in agriculture energy projects. “All of these projects we can do in our farms and in our ag communities provide financial security for our farmers,” he stated. “By providing financial security what we’re doing for the state is we are providing food security. If you protect your farmers you are protecting the food that is on your table.”
Brett Reinford, Owner, Reinford Farms, explained that his farm has 550 cows and the methane digester produces enough energy to power 80 houses. “In 2008 the digester was officially started and running. There have been so many benefits this digester has provided for our farm not just from the electric producing capabilities that it has but also the way it reduces our impact on the environment,” he stated. “This past Friday we finished spreading 3,000 gallons of manure and didn’t have a single odor complaint. Seven years ago before the digester our phone would be ringing quite a bit. The community relations benefit that this digester has provided for our farm has been worth every penny.”
Reinford added that the digester allowed the farm to eliminate all of the fuel oil that the farm had been purchasing and spoke in support of the governor’s initiative. “The biggest environmental benefit was the food waste component. On average we had been processing three million tons of food waste from grocery stores all over Pennsylvania…we’ve been able to mix manure and food waste in our digester to produce even more electricity and reduce even more waste going to landfills. We’re able to do it cheaper than what most landfills can do it for as well,” he stated. “We are huge advocates for digesters because of what it has been able to do on our farm. They are expensive and that’s why we are happy to see that Gov. Wolf is considering agriculture in the budget for his initiative. The benefits beyond just producing electricity are amazing through all the ways we are able to reduce our spending on other energies that our farm would normally purchase.”
Rep. Pashinski asked how much a digester costs. Reinford indicated that the costs vary and explained that his farm utilizes a smaller scale model. “When we purchased our digester it was $1.1 million. 60 percent of that was funded by some grants and the other 40 percent was funded with our own equity,” he stated. “It was a significant risk to our farm to do that. If this thing didn’t work we would be out of business right now. I don’t know of any digesters in the state that have actually not worked so they are a fantastic investment. A reason why a lot of farmers are not putting them is of the risk to their bread and butter which is making milk, poultry, or swine.” Brubaker noted that farmers are generally “land rich and cash poor” and the cost makes the digesters prohibitive. “The farmers are scared because it’s a big investment. They see all of the benefits but it’s a lot of money,” he stated.
Rep. Vitali questioned how the governor’s plan can be tweaked to accommodate farmers. Brubaker said grant programs have worked well because they allowed farmers to obtain secure capital for projects. “When the projects are under construction it’s nice not to have too many extra add on restrictions as far as construction goes, as far as what type of labor you have to use. If its union labor that would really increase the construction costs up front,” he stated. “Any regulation or stipulations like that when it comes to building if it can be minimized it would really get more bang for the buck invested.”
By Matt Hess, PLS
6/1/2015
The committee held a public hearing on Gov. Tom Wolf’s Energy Investment Initiative.
John Hanger, Secretary of Planning and Policy, Office of the Governor, said that until 2010 Pennsylvania was a leader in promoting development of renewable energy and energy efficiency and a recent report from the Solar Foundation found that employment in Pennsylvania’s solar industry has declined by 30 percent since 2012, even as the rest of the nation is seeing double-digit growth.
“Gov. Wolf understands the important role the state can play by investing in economic growth and job creation. The budget launches a $675 million economic development package, supported by revenue from the severance tax on drilling, designed to get Pennsylvania back on the right track. Funds from a bond issue will be used to provide $100 million to the Pennsylvania Industrial Development Authority to provide revolving loans to assist manufacturers and small businesses. Another $250 million will be used to reinvest in the Business in Our Sites program, which has created 18,000 jobs and $1.8 billion in private investment since 2004,” Sec. Hanger stated. “Understanding the critical importance of remaining at the cutting edge of technological innovation, the budget also provides $100 million to support entrepreneurs and established companies working to make technological breakthroughs into products that can be used every day. Finally, the economic development package includes $225 million to support the deployment of renewable energy sources and clean technology investments and the creation of good paying ‘green jobs.’”
Hanger highlighted the main components of the governor’s energy proposal:
• $50 million to re-launch the PA Sunshine program;
• $20 million program to facilitate construction of new wind farms and support interconnection to the grid;
• $20 million in competitive grants for projects designed to make Pennsylvania farms more self-reliant;
• $50 million in competitive grants to fund projects to improve energy and efficiency;
• $30 million in competitive grants to businesses that employ new technologies to produce heat and power;
• $30 million to the Pennsylvania Energy Development Authority;
• $25 million in matching grants to business parks and manufacturers to construct the last few miles of natural gas distribution lines.
“The Governor is committed to supporting renewable energy through the investments proposed in the budget. We believe that this budget represents the most significant opportunity available in the near term to provide support for this critical sector, which will make an important impact in every one of your districts,” Sec. Hanger stated. “We are open to productive dialogue on the design elements of each of the proposals above, and will look forward to working with you to ensure that they are implemented so as to provide maximum return on investment.”
Rep. Barbin questioned if there has been discussion to combine energy efficiency with natural gas distribution lines and noted that a school district in Johnstown saved $250,000 in energy savings by utilizing natural gas. Sec. Hanger agreed that natural gas distribution lines are a critical component of the governor’s plan. “That’s an example of why it’s important to make this package available to more people,” he stated. “
Rep. Barbin inquired about the status of waste coal plants due to federal regulations related to mercury. Sec. Hanger emphasized acid mine drainage is the main source of pollution to Pennsylvania’s rivers and streams and said waste coal plants have been used for “chipping away at the enormous legacy cost” by consuming huge piles of waste coal. He indicated that he would speak to Rep. Barbin further on the issue.
Rep. McCarter emphasized that it is not an “either/or choice” between alternative energy and natural gas and questioned what the return of investment is on alternative energy. Sec. Hanger said one dollar in state investment can bring five dollars in private investment. “The savings are private investment upfront from entrepreneurs who want to build projects and consumer savings in the marketplace,” he stated.
Rep. McCarter questioned how the proposal addresses energy efficiency in agriculture. Sec. Hanger said agriculture can be a “major force to bring clean energy to Pennsylvania” and said the initiative will benefit farmers. “
Rep. Pashinski took issue with commercials being run by the natural gas industry in relation to the governor’s proposed severance tax and asked the secretary to address the issue. Sec. Hanger emphasized that the governor’s proposal is funded by utilizing $55 million from the revenues produced by a severance tax. “The gas drilling tax is overdue in Pennsylvania. We are the only state that does not have a gas drilling tax in those states that produce gas,” he stated. “It is literally nutty for us not to have a reasonable tax on this incredible resource when other states with much less good resources have had such taxes in place in some cases for decades and decades and decades.” Sec. Hanger added that an Independent Fiscal Office (IFO) report concluded that 80 percent of the tax would be paid by “out-of-state folks” and noted the natural gas industry has reported in some cases record profits and record production. “Those who are opposing this package are within in the industry or ideologues,” he stated. “It’s time to tell the truth and pay a reasonable tax.”
Michael Matotek, Owner, Open Sky Energy, expressed support for leveraging state dollars to encourage private investment in solar but warned against over-subsidizing solar installations with another short term rebate. “Last week, in a meeting here in Harrisburg of over 50 Pennsylvania solar professionals, we came to an agreement that we need an alternative to a simple short term rebate which could actually destabilize the current solar industry by reintroducing a heavy reliance on public funding for solar projects. The previous rebate program was a huge success because it kick-started solar in PA when equipment costs were extremely high. But now that global competition has greatly reduced those costs, we no longer need a large subsidy,” he stated. “During the rebate era, we had a bit of a’ wild west’ culture. As solar equipment pricing started to drop, the PA rebate and a 30 percent federal tax credit could be combined, over-subsidizing solar installations. Much of this above market demand was fulfilled by large out of state companies that setup temporary operations and employment positions, which were terminated when the PA rebate fund ran dry.”
Matotek offered the following suggestions for the initiative:
• Only allow solar produced in Pennsylvania to qualify for Pennsylvania Solar Renewable Energy Certificates (SREC);
• Provide solar loans below market rate so that solar can be installed without the high upfront capital cost;
• Instead of a short term rebate, institute a long term rebate program with a declining incentive based on the amount of solar installed.
Jim Kurtz, President, RER Energy Group, spoke in support of the governor’s initiative and also emphasized the importance of closing Pennsylvania’s borders to out-of-state SREC sales. “A new Sunshine Program will reinvigorate the solar industry in Pennsylvania. RER Energy Group supports that policy. As we have demonstrated, it has been a difficult five years for the industry in our Commonwealth and an investment to regain lost opportunities will be welcome. However, the industry can stand on its own long term with the right mix of public and private collaboration. Low interest financing and securing our trading borders from out-of-state SREC sales are two significant actions that the Wolf administration’s Energy Investment Initiative can implement within a short timeframe and with negligible expense,” Kurtz stated. “RER Energy Group stands with the rest of our industry to assist in any way possible to enact these reforms. In addition, we very much appreciate the support your administration is providing for the successful future of this critical 21st century industry.”
Mike Speerschneider, Chief Permitting and Public Policy Officer of EverPower Wind Holdings and speaking on behalf of Mid-Atlantic Renewable Energy Coalition, spoke in support of the proposal. “The Energy Investment Initiative represents an important commitment to a diversified energy portfolio in Pennsylvania. It tells us that this Administration is willing to work with the industry to find ways to promote new projects, new growth and new jobs,” he stated. “This budget could provide the kick-start needed to bring more companies like EverPower back to Pennsylvania with aims to build more projects.”
Speerschneider emphasized the importance of the “messaging” that the governor’s provides for the solar industry. “When we look at the net investment that these projects require versus the long term energy generation that’s produced, five to ten times more value created than the net upfront investment. This is one of the best categories for investments people can make,” he stated. “The message is not known. We need this initiative to get this message out.”
Rep. Vitali questioned if the $50 million to re-launch the Sunshine Solar program is a good use of the funds. Speerschneider indicated that it is a “very good” use of funds. “We see that money helping particularly in the middle market area, projects 100-200 kilowatts in size, some of those projects may not go forward if that was not there,” he stated. Matotek reiterated his concern about over-subsidizing. “It could be worked out if the amount of the rebate was backed off and spread out for a longer period of time,” he stated.
Rep. Vitali questioned if the suggestion of only allowing solar produced in Pennsylvania to qualify for Pennsylvania Solar Renewable Energy Certificates would ultimately produce more solar energy or if the provision would be solely to create more jobs in Pennsylvania. Speerschneider said the recommendation is primarily a Pennsylvania jobs issue but also has the added benefit of allowing Pennsylvania to keep up with other states in the field. “It would create more jobs in Pennsylvania and lead to more jobs as well,” he stated.
Rep. Pashinski asked what the return of investment is to install solar on a standard home. Speerschneider said a five kilowatt system may cost $20,000. “The net investment of that versus savings are going to lead to an eight to nine percent return of investment,” he stated. “We see payback periods in our commercial space for five to six years. In the residential it’s a little bit longer term; seven, eight, nine, ten years.”
Andrew Sharp, Deputy Director of Mayor’s Office of Sustainability, City of Philadelphia, discussed Philadelphia’s efforts to advance energy efficiency and how municipalities across Pennsylvania will benefit from increased state investments in energy efficiency programs. “We recognize that we need to be working closely together to develop next-generation policies, incentive programs, and funding streams to advance energy efficiency at scale. This collaboration will be critical to helping us reach aggressive - but achievable - energy use reduction goals,” he stated. “Despite tremendous growth in energy efficiency, the progress has not been enough to offset what we have reported as an overall increase in citywide energy use of 19 percent from 2006-2014. Since 2010, Philadelphia has experienced extreme weather in both the summers and the winters, and our citywide energy use has tracked very closely to the number of hours requiring buildings to use heating and cooling. Philadelphia also saw increases in population and economic growth over that period of time, and we will need to make more aggressive efficiency investments to decouple energy growth, which of course is and will continue to be a key a priority, from increasing energy use. Achieving energy efficiency at scale will require alignment of local, state, federal, and utility partners. Consistent, long-term funding streams, policies, and programs are essential to building a robust market for energy efficiency.”
Tom Schneider, Director of Facilities and Operations, North Penn School District, said the school district’s energy consumption decreased 37 percent from 2008 to 2012 with a reduction of expenditures equating to almost $2 million per year. “At North Penn School District we have attempted to renovate aging facilities over time but we still have old energy in efficient lighting, motors, and equipment throughout many buildings. Currently we do not have available capital funds to replace this equipment in the near future. Grants of any value would greatly assist North Penn in the replacement of inefficient equipment,” he stated. “For example, a grant as small as $10,000 with a match from the District, could replace the inefficient building perimeter lighting on four elementary schools and have a return on investment in two years or less with a potential annual savings of $1,000 a year. Larger grants to replace gymnasium lighting could reap similar return on investments with greater savings. North Penn School District would be very interested and would take advantage of grants for energy efficient projects of any value.”
Ellen Lutz, President and CEO, Clean Markets, argued that the proposed $225 million Energy Investment Initiative will bring much needed help to keep energy efficiency and renewable energy on their path to long-term market viability and discussed the positive benefits of alternative energy. “Energy efficiency is the backbone of a thriving competitive business environment and Pennsylvania’s homes and businesses are just beginning to wake up to the benefits it can provide to them,” she stated. “In addition to energy efficiency, the global market for renewable energy continues to grow. Clean Edge, a market data firm, projects that the combined renewable energy sectors will continue to grow over the next 10 years, from $247.6 billion in 2013 to $397.9 billion in 2023. In the US, non-hydroelectric renewables accounted for 41 percent of new generation capacity in 2013, more than triple the contribution of coal, oil and nuclear combined! This was fueled by a strong growth in solar PV as its prices come down. Installed prices for solar PV have dropped from $7.20/Watt in 2007 to $2.33/Watt in 2014, and are projected to drop to $1.21/Watt by 2023. And wind energy is already the least expensive electrical generation resource in Colorado as well as other states in the Great Plains and the Southwest. Solar electricity and wind energy are on their way to being cost competitive, but still need investment to get over the finish line to long-term sustainable markets.”
Rep. Vitali asked what other items the legislature should consider to increase energy efficiency in Pennsylvania. Schneider indicated that other states have an “energy office” that provides information to municipalities, school districts, and businesses to how to approach energy efficient projects and encourage benchmarking. “Fifty-six school districts out of the 500 currently benchmark with Energy Star in the commonwealth. If more school districts would benchmark and study their energy use that leads to them questioning, understanding, and improving their energy consumption,” he stated.
Mike Brubaker, Owner, Brubaker Farms, emphasized that the goal of his farm is to find ways to partner economic values with environmental values when investing in new projects and explained that in 2007 Brubaker Farms built a methane digester to produce 210 kW per hour of electricity and from 2010 to 2014 installed 285 kW per hour capacity of solar panels on the rooftops of some barns. Brubaker explained how a methane digester operates. “We’re taking dairy cow manure extracting the methane from powering a power unit that’s powering a generator that’s making electricity,” he stated. “We’re not only making electricity, we are reducing environmental impacts on air quality by destroying that methane that otherwise would be released and improving air quality by 21 times from what the experts tell me. We’re reducing global warming by doing that. The cows are eating all the time so of course they are producing a waste product around the clock 24/7 we are making electricity 24/7 with a renewable form. We are not relying on hours of daylight; we are not relying on wind speed.”
Brubaker emphasized that “for every four cows in Pennsylvania you can power one household worth of electric” and argued that the state should invest money in agriculture energy projects. “All of these projects we can do in our farms and in our ag communities provide financial security for our farmers,” he stated. “By providing financial security what we’re doing for the state is we are providing food security. If you protect your farmers you are protecting the food that is on your table.”
Brett Reinford, Owner, Reinford Farms, explained that his farm has 550 cows and the methane digester produces enough energy to power 80 houses. “In 2008 the digester was officially started and running. There have been so many benefits this digester has provided for our farm not just from the electric producing capabilities that it has but also the way it reduces our impact on the environment,” he stated. “This past Friday we finished spreading 3,000 gallons of manure and didn’t have a single odor complaint. Seven years ago before the digester our phone would be ringing quite a bit. The community relations benefit that this digester has provided for our farm has been worth every penny.”
Reinford added that the digester allowed the farm to eliminate all of the fuel oil that the farm had been purchasing and spoke in support of the governor’s initiative. “The biggest environmental benefit was the food waste component. On average we had been processing three million tons of food waste from grocery stores all over Pennsylvania…we’ve been able to mix manure and food waste in our digester to produce even more electricity and reduce even more waste going to landfills. We’re able to do it cheaper than what most landfills can do it for as well,” he stated. “We are huge advocates for digesters because of what it has been able to do on our farm. They are expensive and that’s why we are happy to see that Gov. Wolf is considering agriculture in the budget for his initiative. The benefits beyond just producing electricity are amazing through all the ways we are able to reduce our spending on other energies that our farm would normally purchase.”
Rep. Pashinski asked how much a digester costs. Reinford indicated that the costs vary and explained that his farm utilizes a smaller scale model. “When we purchased our digester it was $1.1 million. 60 percent of that was funded by some grants and the other 40 percent was funded with our own equity,” he stated. “It was a significant risk to our farm to do that. If this thing didn’t work we would be out of business right now. I don’t know of any digesters in the state that have actually not worked so they are a fantastic investment. A reason why a lot of farmers are not putting them is of the risk to their bread and butter which is making milk, poultry, or swine.” Brubaker noted that farmers are generally “land rich and cash poor” and the cost makes the digesters prohibitive. “The farmers are scared because it’s a big investment. They see all of the benefits but it’s a lot of money,” he stated.
Rep. Vitali questioned how the governor’s plan can be tweaked to accommodate farmers. Brubaker said grant programs have worked well because they allowed farmers to obtain secure capital for projects. “When the projects are under construction it’s nice not to have too many extra add on restrictions as far as construction goes, as far as what type of labor you have to use. If its union labor that would really increase the construction costs up front,” he stated. “Any regulation or stipulations like that when it comes to building if it can be minimized it would really get more bang for the buck invested.”