### Clean Power Plan Public HearingTestimony Michael Migliaccio, Business Development Manager, Johnson Controls Atlanta, Georgia July 29, 2014

Good afternoon. My name is Michael Migliaccio. I am the Energy Solutions Regional Business Development ManagerforJohnson Controls in Georgia. Johnson Controls is a global diversified technology and industrial leader with 170,000 employees serving customers in more than 150countries. Our services include solutions to optimize energy efficiencies in buildings. Our commitmentto sustainability dates backto our roots in 1885, with the invention ofthe first electric room thermostat. Johnson Controls is part ofan industrythat provides energy efficiency products and services to buildingowners across multiple markets. Within our industrywe are referred to as Energy Services Companies (ESCOs). As one ofthe compliance options under Rule 11l(d),we supportthat end-use energy efficiency be utilized as a meansto reduce energyconsumption, thus reducing GHG emissions, while creating local benefit in the form ofadded jobs. We believe that energy efficiency offers an opportunityto create over 300,000 newjobs, save consumers $100 billion peryear on energy bills, and eliminate 600 million tons of C02 emissions each year. In addition to utility-based energy efficiency programs, we urge thatthe energy efficiency building block should promote and account for energy efficiency initiativestaken on by the buildingownersthemselves.Data from the Bloomberg New Energy Finance's articletitled, "Sustainable Energy in America Factbook", 2014 shows that energy efficiency through ESCO activity is substantial. In fact, there is about as much investment in end- use efficiencythrough ESCO activities as there is through utility programs. The energyefficiency initiativethat my industry provides is known as GuaranteedEnergySavings Performance Contracting. It is a procurement model available to federal, state, and local government agencies, Figure 120: Investment in energy efficiencythrough ESCOs and utility programs. categorized by program. 1993-2012 ($bn)

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2 0 Utili!', spending through ESCOs

universities, elementary schools and industry. Underthis procurement model, building owners receive infrastructure replacement associated with energy consuming equipment such as lighting, cooling and heating. The replacement ofoldertechnology system with new energy efficient systems creates a reduction in utilityconsumption which translates into less need for generation hence lower GHG emissions. Furthermore, what makes Guaranteed Energy Savings Performance Contracting an ideal method ofend-use energy efficiency is thatthe energy reduction is measured, verified and documented. These steps are necessary in every performance contract, as the ESCO much guaranteetothe building ownerthatthe energy consumption will be achieved each yearofthe contract.

### In this context, Johnson Controls recommends six policy principles for energy efficiency as a compliance tool.

1) End-use energy efficiency should be an available means of compliance. 2) The EPA should provide guidance to States on presumptively approvable energy efficiency provisions in compliance plans. EPA should be explicit, not silent. 3) Existing State/utility programs should be recognized and scaled. 4) Mechanisms for crediting private-sector-delivered energy efficiency activities should be available, includingcreditingfor sale ofhighly efficient appliances, facility energy efficiency projects, and Energy Savings Performance Contracts. 5) Energy efficiency can and should be explicitly credited in both rate- and mass-based compliance systems. Either system can workwith the appropriate policy design. 6) EPA should be explicit about criteria used to approve energy efficiency elements of State plans. The criteria should include: • Environmental rigor- quantifiable, enforceable, and sustainable.
• Administrative ease- clear investment signals, manageable requirements.
• Adaptability- periodic review ofstate plans, with prospective adjustments, as needed.
Johnson Controls supports EPA's consideration ofenergyefficiency as a compliance tool and appreciates the opportunityto make astatementtoday.