Special Subcommittee on Energy


Minutes of the<MeetNo1> 4th Meeting

of the 2013 Interim


<MeetMDY1> October 18, 2013


Call to Order and Roll Call

The<MeetNo2> 4th meeting of the Special Subcommittee on Energy was held on<Day> Friday,<MeetMDY2> October 18, 2013, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Representative Richard Henderson, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Representative Richard Henderson, Co-Chair; Senators Ernie Harris, Bob Leeper, Dorsey Ridley, Brandon Smith, and Robin L. Webb; Representatives Dwight D. Butler, Will Coursey, Jim Gooch Jr., Keith Hall, Sannie Overly, Tom Riner, John Short, Kevin Sinnette, Fitz Steele, and Brent Yonts.


Guests:† Michael Montross Ph.D. P.E., Food and Bioprocess Engineering, University of Kentucky; Danny Townsend, Townsend Sorghum Mill; Scott Drake, Manager of Corporate Technical Services, East Kentucky Power Cooperative; Stacy Epperson, President/CEO, Next Step Network; Greg Guess, Director, Division of Efficiency and Conservation, Energy and Environment Cabinet and Lisa Haislip, Program Manager, Residential Energy Efficiency, Tennessee Valley Authority.


LRC Staff:D. Todd Littlefield, Stefan Kasacavage, and Susan Spoonamore, Committee Assistant.


Sorghum as an Energy Crop

Michael Montross, Ph.D. P.E., Food and Biosystems and Agricultural Engineering, University of Kentucky explained that growing sweet sorghum requires less water and less nitrogen compared to corn. Sweet sorghum produces sugar that is directly convertible to ethanol. Mr. Montross said that sweet sorghum has several positive attributes as a feedstock for ethanol production, but the main hurdles are transportation, limited storage and a short processing season.


In response to questions from Senator Harris, Mr. Townsend said that there are approximately 3,000 acres of sweet sorghum being grown in Kentucky. Sweet sorghum primarily produces sugar for syrup. The stalks are being used by Mohawk manufacturing to make carpet.


Mr. Townsend, Townsend Sorghum Mill, stated that sweet sorghum is not native to the United States. It was brought in by the U.S. government for use as a sweetener.


In response to Representative Coursey, Mr. Townsend said that Coca-Cola uses sugar as a component in making its water bottle. It may not be using sorghum sugar, but sugar is sugar.


In response to Representative Riner, Mr. Townsend stated that black strap molasses is different in that it is a byproduct left over after granulated sugar is made from sugar cane.


Mr. Greg Guess, Director, Division of Efficiency and Conservation, Energy and Environment Cabinet, stated that the Department for Energy Development and Independence (DEDI) entered into a federally funded cooperative agreement with the U.S. Department of Energy (DOE) to develop policy and program recommendations to increase energy efficiency in Kentuckyís electricity sector by one percent annually. The initiative is a part of the Governorís goal for energy efficiency by 2025. The project is entitled Stimulating Energy Efficiency in Kentucky (SEE KY).


Mr. Guess said the recommendations were used to develop Kentuckyís Action Plan for energy efficiency. The Plan includes six actions that pertain to all sectors, another four that apply specifically to the federal government, and another 16 that benefit the residential, commercial, or industrial sector.


Mr. Guess said that one of the recurring residential needs identified by industry advocates, low-income housing agencies, and utilities is the need to address energy costs in inefficient manufactured housing units, particularly in eastern Kentucky. Manufactured homes account for 13.6 percent of the stateís overall residential stock. The homes tend to be highly energy inefficient resulting in high energy costs, nearly twice as much per square foot as site-built homes. Manufactured homes built prior to 1976 are so energy inefficient that most cannot be economically retrofitted with energy saving upgrades.


Mr. Scott Drake, Manager of Corporate Technical Services, East Kentucky Power Cooperative (EKPC) stated that there are 16 owner-member cooperatives that provide electric service to nearly 400,000 residential homes in Kentucky. Of those homes, approximately 75,000 are manufactured homes. He explained that the cooperatives employ expert energy advisors to provide in-home efficiency audits free to members. He also noted that 81 percent of the manufactured homes in the cooperatives have electric resistance heating compared to more energy-efficient heat pumps.


Mr. Drake said that there are rebate programs, approved by the Public Service Commission, such as heat pump retrofits. The cooperative pays a rebate from $500 to $1,000 based on the energy efficiency of the new heat pump. He noted that the rebate for Touchstone Energy Manufactured Homes, available since 2005, ended in 2013 due to low participation rates. The EKPC cooperatives are looking at all possible options to help with high energy costs. The EKPC is exploring the idea of applying insulating foam underneath the manufactured homes with a follow-up due in a year.


Ms. Lisa Haislip, Program Manager, Residential Energy Efficiency, Tennessee Valley Authority (TVA), stated that TVA has a Heat Pump Program for qualified manufactured homes no more than 10 years old and that are located in the TVA service area. A $500 incentive is paid directly to the participating heating ventilation and air condition (HVAC) wholesalers who pass that on to the customer.


She also explained the ENERGY STAR pilot program for manufactured homes. The program encourages the production of ENERGY STAR manufactured homes for TVA residents. The program is administered by Systems Building Research Alliance (SBRA) and incentives are paid to the manufactured home producers. She said that $1,500 is paid to SBRA and $1,450 is passed onto the manufactured homes producer.


Ms. Haislip stated that the two programs have seen a growth of 87 percent from last year.


Ms. Stacy Epperson, President/CEO, Next Step Network, explained that Next Step is a national network of nonprofit housing organizations helping low-income families find quality affordable homes. The mission is to put sustainable homeownership within reach for everyone, while transforming the manufactured house industry. She said there are more than 2 million families, nationwide, living in old, energy inefficient mobile homes. Most are found in rural areas where families are near or below the poverty level. Some of the households fall through the cracks of federal programs and are trapped in a cycle of very high energy bills. She said that manufactured housing accounted for 12.9 percent of Kentuckyís housing with an estimated 85,000 built before 1976 when the HUD code was enacted. Kentucky families can pay between $200 and $400 for summer bills and $400 to $600 for winter bills. She also stated it was not uncommon to see homeowners spending half their monthly income on utilities.


In closing, Ms. Epperson said that the Kentucky Housing Corporation (KHC) administers a mobile home replacement program. Only 7 other states have such a program. KHC created a pilot program for a rebate to incentivize and subsidize twenty new ENERGY STAR certified manufactured homes. She said that replacing pre-HUD code mobile homes with ENERGY STAR homes in Kentucky would save households an average of $1,800 per year in energy costs, reduce greenhouse gas emissions, and improve home affordability, easing the financial burden for families struggling to meet their needs.


In response to Chairman Hendersonís questions, Mr. Drake said that a magazine is sent out to members of the cooperative with information about energy audits. He said that there have been 2,000 in-home audits and approximately 1,000 phone audits.


In response to Senator Webb, Ms. Epperson said that federal funding is limited for building ENERGY STAR manufactured homes. A state policy focusing on energy upgrades would be helpful.


In response to questions from Chairman Henderson and Senator Webb, Ms. Epperson said that LIHEAP is not a solution. It does not make sense to use its weatherization program to weatherize pre-1976 manufactured homes.


Senator Webb said she was concerned about spending dollars year after year on homes that cannot be made energy efficient.


In response to Representative Yonts, Ms. Epperson said Next Step, which derives its money from nonprofit housing organizations, will help between 80 and 100 low-income families find quality affordable homes, transform manufactured homes to energy efficient or help with utility bills.


The meeting was adjourned at 11:45 p.m.