Special Subcommittee on Energy


Minutes of the<MeetNo1> 4th Meeting

of the 2010 Interim


<MeetMDY1> September 17, 2010


Call to Order and Roll Call

The<MeetNo2> 4th meeting of the Special Subcommittee on Energy was held on<Day> Friday,<MeetMDY2> September 17, 2010, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Senator Brandon Smith, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Brandon Smith, Co-Chair; Senators David E. Boswell, Ray S. Jones II, Bob Leeper, John Schickel, Katie Kratz Stine, Robert Stivers II, Gary Tapp, and Johnny Ray Turner; Representatives Eddie Ballard, Dwight D. Butler, Leslie Combs, Tim Couch, Jim Gooch Jr., Thomas Kerr, Martha Jane King, Lonnie Napier, Fred Nesler, Sannie Overly, Tom Riner, Fitz Steele, and Brent Yonts.


Guests: Ron Willhite, School Energy Managers Project (SEMP) Director, Kentucky School Boards Association; Bill Scott, Executive Director, Kentucky School Boards Association; Cam Metcalf, Executive Director, Kentucky Energy Efficiency Program for Schools (KEEPS), University of Louisville’s Kentucky Pollution Prevention Center; Jason Bailey, Research and Policy Director, Mountain Association for Community Economic Development (MACED), and Dave Kreher, People’s Self Help Housing.


LRC Staff: D. Todd Littlefield, Taylor Moore III, and Susan Spoonamore, Committee Assistant.


The June 18, 2010, July 16, 2010 and August 20, 2010 minutes, were approved, without objection, upon motion made by Senator Leeper and seconded by Representative Nesler.


School Energy Managers Project:

Bill Scott, Executive Director, Kentucky School Boards Association (KSBA) stated that the KSBA is a private non-profit member organization. Members consist of all of the local school boards in the Commonwealth with a membership of 870 individuals. The KSBA is the largest organization of elected officials in the Commonwealth.


Ron Willhite, School Energy Managers Project (SEMP) Director, Kentucky School Boards Association, explained that House Bill 2, enacted in 2008, required the public school districts to enroll in the Kentucky Energy Efficiency Program for Schools (KEEPS). In December 2011, the Kentucky Pollution Prevention Center (KPPC) will begin reporting on the status of the development of energy management plans by districts and the anticipated savings.


SEMP seeks to provide a fulltime energy management person for each school district who will help to reduce energy consumption and operating expenses through assessments and education. SEMP has a partnership with the Kentucky Green and Healthy Schools Program and the Kentucky National Energy Education Development Project.


Mr. Willhite explained that SEMP funding is used to pay 75 percent of the costs of the energy manager in the first year, and then 50 percent in the second year. In the third year, SEMP hopes that the program will be self-sustained. The districts that had energy managers were offered the option of employing an Energy Curriculum Coordinator or getting additional support for their ongoing activities.


Mr. Willhite stated that Kentucky has 174 public school districts, of which 74 districts have less than four school buildings. Another 74 districts have between five and nine school buildings. Districts were asked to form partnerships to share an energy manager. Most, but not all, responded favorably to forming a partnership. He also stated that, in addition to the 14 energy managers presently employed, 36 new managers were hired on July 1, 2010. Energy managers are serving 145 of 174 public school districts (1000 school buildings). Each public school district has been asked to review and adopt an energy policy.


In response to questions from Senator Tapp, Mr. Willhite stated that it was up to each district to decide how it wanted to replace older lighting fixtures. He also said he was not sure if the UL rating would be valid if ballasts were changed from magnetic to electronic, and lamps replaced. Mr. Willhite said he would find out.


In response to questions from Senator Stine, Mr. Willhite stated that the counties who decided not to participate in the program indicated cost factors, and others felt that they had the personnel to staff the program. The energy managers would be involved with communicating with the School Facility Construction folks. As to implementing Senate Bill 132, Mr. Willhite stated that there was interest in Energy Star products, the design of schools, and the retrofit of schools seeking an Energy Star Certification.


In response to Representative Nesler, Mr. Scott stated that he would like for all of the districts to be involved. To receive funding, the district had to have an energy manager. Mr. Willhite stated that some of the districts listed in white on the map do have energy programs, such as Jefferson and Barren Counties.


In response to Senator Boswell, Senator Tapp said he was not aware of any instances of fires caused by energy efficient lamps. However, there were some manufacturers saying that if you do not retrofit, and just change out the ballast and lamps, then there is the possibility of that fixture losing its UL rating.


In response to questions from Representative Yonts, Mr. Willhite stated that there are a wide range of Energy Managers. Because of previous experience, some can move quickly to identify energy savings. Qualified people are continually educating and monitoring energy managers who do not have previous experience.


Mr. Cam Metcalf, Kentucky Pollution Prevention Center (KPPC), stated that energy costs are the largest operating expenses for school districts. Since Fiscal Year (FY) 2000, energy expenditures have increased by more than 100 percent. In FY 2008, schools spent $183 million on energy - $273 per student. From FY 2000-2008 the price of electricity has increased 87 percent; natural gas 113 percent; and petroleum 184 percent. KPPC is a primary resource to help businesses, industries and other organizations to develop environmentally sustainable, cost-saving solutions for improved efficiency. The Kentucky Energy Efficiency Program for Schools (KEEPS) has also been involved in training. Last year, 435 people were trained with the shared goal of improving school district energy efficiency. All districts are now enrolled in KEEPS.


Mr. Metcalf said that $4,758,336 million in funding was obtained through the American Recovery and Reinvestment Act (ARRA) through the United States of Department of Energy and the Kentucky Department for Energy Development and Independence. The goal is to create jobs and energy savings by reducing greenhouse gas emissions.


The Energy Efficiency Potential in the region and Kentucky:

Jason Bailey, Research and Policy Director, Mountain Association for Community Economic Development (MACED) stated that the Association works to create jobs and address the challenges facing low and moderate income families in Eastern Kentucky through sustainable development. He said that MACED’s work ranges from forestry, energy efficiency, policy analysis and small business development. The Association has invested approximately $9 million in entrepreneurs in the region including child care centers, artisan businesses and small manufacturing facilities. The Association believes that Kentucky’s energy policy should make energy efficiency a top priority by promoting the development of clean renewable energy.


In response to Senator Smith’s questions, Mr. Bailey said the association has offices in Berea and Paintsville. In the next six months or a year, it plans to open an office in Hazard, but there is no office in Western Kentucky. The association’s budget is approximately $3 million which comes from a diverse range of sources. Approximately one-third is from earnings off income, investment earnings, and funding from private foundations and various public sources.


Mr. Bailey stated that the Association is targeting grocery stores for commercial energy efficiency by helping to provide energy audits and financial investment.


In response to Senator Brandon Smith’s questions, Mr. Bailey stated that the association performs energy audits for sawmills. MACED does not have sister programs in other parts of the state.


Representative Tim Couch asked that MACED come to Clay and Leslie Counties to perform energy audits on the grocery stores.


In response to Representative Couch’s questions, Mr. Bailey stated that the association has published several reports. One report looked at the economics of coal in Kentucky regarding the trends or trajectory around coal employment. The other report looked at the role of state government in the revenues that come from the coal industry as well as the public expenditures associated with the coal industry. He said the association did not do a report that looked specifically at mountaintop removal or environmental impacts.


In response to questions from Senator Ray Jones, Mr. Bailey stated that the report tried to give a more rounded view of what the tax revenues as well as the public expenditures associated with the industry were. MACED updated its 1996 study. The methodology of the report was calculating the various tax revenues, including the severance tax, corporate and individual income taxes, property tax, and sales tax derived from the coal industry.


Mr. Bailey stated that the largest expenditures were for road repair although the methodology did not attribute all the wear and tear on any particular road to coal trucks. The idea was to deal with the roads traveled by coal trucks and attempt to estimate the portion of the damage associated with the coal truck traffic.


In response to Representative Fitz Steele, Mr. Bailey said he was not familiar with the call made from his agency to the Chamber of Commerce targeting two businesses. He said he would look into it and respond back to Representative Steele.


In conclusion, Mr. Bailey stated there are opportunities in Kentucky to ramp up energy efficiencies.


Mr. Cam Metcalf responded to previous questions regarding the replacement of ballasts. He said that the UL rating should not be voided as long as the new ballasts and lamps are UL listed and installed by an electrician.


Energy Efficiency and job creation aspects of low income house weatherization:

Mr. Dave Kreher, Executive Director, People’s Self Help Housing, a community based non-profit housing organization that serves Lewis County stated that the goal is to improve the housing of families by building new energy efficient homes, and by training folks to build homes and make repairs, helping to create jobs. Over twenty-eight years, 275 new homes have been built in Lewis County in addition to repairing 550 homes. In June of this year, the organization completed a LEED certified home at the Gold level, making it the second Gold home in Kentucky.


In conclusion, Mr. Kreher stated that there is a looming crisis in the affordability of utility bills. Requests for assistance with utility bills have risen drastically in the last two winters. There is an opportunity right now for new jobs to be created in Lewis County. The organization needs trained people to help with weatherization along with more energy auditors and workers.


In response to Representative Martha Jane King, Mr. Kreher stated that the Fleming/Mason Electric Coop has the ability to pinpoint the highest energy users. According to his information, the highest users were double-wide manufactured housing not assembled correctly. It costs approximately $600 for an audit.


Meeting adjourned.