The shining sun and the coastal breezes refreshed the 28th Annual NAESCO Conference in San Diego, CA earlier this month. Exhibitors displayed energy-efficient innovations, presenters touted streamlined procurement protocols and economically viable projects. Yet a cloudy outlook was conveyed through stories of government gridlock and a maze of policy obstacles that inevitably attaches to energy initiatives large and small.
During the 2 ½ day conference, the Hilton’s halls were filled with energy industry thought leaders and regulatory designees; each of them – along with brilliant, high-powered attendees – was more impressive than the next. Immersed in this amazing brain trust, it occurred to me that everyone there needed to be an expert not just in their respective fields, but also incredibly savvy in ever-complicated public policy dynamics.
One need look no further than the home page of NAESCO’s website to see the unavoidable connection between energy initiatives and public policy. There, NAESCO Chairman Jim Dixon states his case for advocacy on energy performance contracting as a critical job creator. His message refers to an opinion letter sent both to Politico and the US Chamber of Commerce decrying government stagnation and making it clear that “green investments drive projects that put people to work.”
From its opening session on “Grading the Success of the Federal ESPC and UESC Programs in Meeting Federal Energy Consumption Reduction and Green Building Mandates” featuring presenters from the U.S. Departments of State and Energy , to a reflection on “Energy, Environmental, Legislative and Regulatory Initiatives in 2011,” the discussions centered on the intersection of energy policy and an increasingly complex regulatory paradigm. Moving forward on scientific initiatives – whether in energy efficiency, clean tech innovations, procurement channels or funding – goes way beyond the business challenges that exist in almost any other sector. It’s not just about whether a market exists for new products, or whether the ROI pencils out. Meaningful progress in research and development in energy efficiency hinges on an informed base of industry representatives willing to advocate for their own interests.
A small sampling of some current policy issues affecting energy service companies include:
- Opposition to a proposed SEC rule (Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act)., which would require ESCOs to register as municipal securities advisors and be subject to accompanying regulatory oversight. NAESCO advocates that the exemption to the registration requirement afforded to engineering firms should apply to ESCOs, and that this would more appropriately reflect congressional intent and scope.
- Acceleration of the State Energy Efficiency Action Project (SEE Action) project convened by DOE and EPA to adopt aggressive energy efficiency programs across the country.
- Coping with the far-reaching consequences of the debt ceiling crisis. In a CNBC post, Jorge J. Lopez, President and CEO of ConEdison Solutions, outlined three impacts on energy sales, energy efficiency services and renewable energy development: high interest rates (translating into longer payback periods), a weak dollar (raising the relative cost of financing and materials), and longer payment terms (disrupting vendor cash flows).
- House Energy and Commerce Committee investigations on loan guarantees in connection with failed solar company Solyndra, and the recent requests to broaden this inquiry to include investments in nuclear energy projects.
- Issues connected to the much-contested Keystone XL oil sands pipeline, from environmental concerns – including climate change – as well as energy security, economic impacts and foreign policy, to challenges to the State Department’s review process.
The time I spent at the NAESCO Annual Conference underscored the critical intersection between public policy and energy project development. To advance either, industry leaders must walk –with a determined gait - in both worlds.