### Testimony on Carbon Pollution Emission Guidelines for Existing Stationary
Sources Efficiency First

J u ly 30, 2014

Thank you for the opportunity to testify today on the EPA proposed rule on Carbon Pollution Emission Guidelines for Existing Stationary Sources. My name is Cynthia Adams, and I am Chair of the Virginia Energy Efficiency Council, appointed member of Governor McAuliffe's Virginia Energy Council, and a board member of Efficiency First whom I am here today to represent.

Efficiency First is the national business association for the home performance industry, whose members are home performance contractors and companies across the U.S. With state and local chapters across the country, we work with companies to retrofit America's homes and bring them—and our economy—into the future. Together, we advocate for policies that accelerate the growth of the industry, creating huge opportunities for companies and delivering meaningful
value to homeowners.

First, we want to applaud the Administration for this important effort to regulate carbon emissions and for the recognition in the rule that energy efficiency should be a part of the answer to carbon reductions. We believe home performance meets the "Best System of Emission Reduction" (BSER) test and is a crucial part of Building Block #4 (Energy Efficiency) in the proposed rule. In fact, with more than 113 million residences consuming 22% of all U.S. energy, this sector is a critical part of any program that targets emission reductions. We are here today to offer suggestions for improvement to the draft regulations and we will provide further
details in our October 16 th Comments.

We urge EPA to consider allowing states to account for natural gas savings in energy efficiency programs. We urge EPA to recognize the unintended consequences that could be associated with fuel switching and the carbon that would not be captured and measured, as well as the inefficiencies in delivery of energy efficiency services that may come by excluding efficiency gains from gas and other heating fuels under the rule.

### For example in the residential sector, current home energy performance

programs that aim to reduce the overall energy use of a home, may instead be encouraged by the rule to switch from electric heating to natural gas heating, without ensuring that this effort is coupled with air sealing and insulation. Unless the home is well insulated, the opportunity to achieve potential savings through the upgrade will be lost. Further, the carbon emitted from the natural gas heater will not be measured. We recommend that EPA offer states best practices for ensuring that energy savings is maximized in residential programs.

Please know that not all energy efficiency programs are created equal.

Today, rate-payer funded programs are usually required to pass a costeffectiveness test. These tests are based on five tests originally developed in the 1970s California Standards Practice Manual. Despite more recent updates, these tests are often implemented in ways that are biased against deeper energy efficiency investments because they account for all the costs, but frequently ignore many of the benefits. A new screening effort that Efficiency First has participated in, called the Resource Value Framework (RVF) provides a powerful tool for public utility commissions to ensure that their cost effectiveness tests are balanced, transparent, and account for public policy goals. We urge EPA to recommend the use of the RVF to states that wish to test their 111D compliance programs for cost-effectiveness in order to encourage deeper energy savings opportunities.

Home performance programs have many different designs, as noted in the proposed rule. For example, with each method for calculating savings (deemed, modeled, measured, etc), there are best practices that we urge EPA to include in its guidance to states developing their implementation plans. We will provide further input in our comments, but as a preliminary statement we urge the EPA today to consider that there are new technologies -- smart meters to measure energy efficiency as a resource, home energy management devices and others -- emerging every day in the marketplace that can assist with program design and carbon measurement. These technologies are providing crucial communications between utilities and homeowners. Standards, protocols, and platforms are just being developed. We strongly recommend that EPA recognize this nascent revolution and ensure that their regulation not close the door to new technologies and program designs that encourage innovation.As EPA develops its rules for evaluation, measurement, and verification (EMV), we

urge the consideration of energy consumption data as provided by utilities. This data, in the form of both traditional utilities bills and more advanced technologies such as "smart devices" and home energy management systems, can provide valuable information about energy use and contribute to accurate quantification of savings. This information should be recognized and considered for use in EMV protocols. However, protocols and policies that allow for both data access and analysis may take time to develop. We encourage EPA to include the use of this data specifically in its EMV rules.

Finally and importantly, we ask EPA to consider the non-ratepayer funded solutions to energy savings in the private sector and encourage aggregation and the development of a registry to register and retire emissions that private contractors and companies can provide from electricity reduction outside the utility programs.

Thank you on behalf of the Efficiency First for the opportunity to testify. While there are great gains to be made overall, please ensure that continued attention is paid to the only element of the rule that directly both includes small business and average Americans — the energy reductions in the residential sector.

Thank you.