Goal 4 = A Fair Policy Climate
To ensure that national and state policy and legislation recognizes the value of District Energy, and to address critical financial and regulatory barriers to its vitality.
A. Ensure Fair Policies and Legislation
With a few exceptions, the value of District Energy for energy efficiency, environmental quality, and economic development is not reflected appropriately within policies and legislation at the national, state or local government level. Key issues must be identified and tracked, and critical priorities defined. Specific information that supports revisions must be effectively presented to policy and legislative leaders. Objectives should focus on changes to policy and legislation that reflect District Energy's unique combined value. Such initiatives should encourage: (1) the growth of new and existing facilities; (2) cogenerating and thermal-only systems; and (3) related technologies necessary to support District Energy.
- 1. Identify Critical Policy and Legislative Issues
- Define specific issues within Clean Air policy, energy legislation, and relevant appropriations bills. Develop and maintain an action list for the most important near-term pending legislation at federal and state levels.
- 2. Define Priorities for Action
- Select priorities for both immediate action and longer term initiatives. Emphasize efforts that position District Energy for consideration and competition with other energy services.
- 3. Set and Address a Legislative Agenda
- Develop specific recommendations and policy language in conjunction with supportive constituencies and organizations such as the National Association of State Energy Officials (NASEO), and the environmental community. Integrate results with actions and steps defined in Goal 3.
B. Assure Equitable Financial Treatment
District Energy is a capital-intensive technology that requires long-term financing, a commited customer base, and perceptive investors willing-to-wait for a reasonable return on investment. Compounding these signficant risk characteristics are tax policies that commonly subject District Energy to double taxation relative to its traditional energy service competitors. Equitable financial treatment should emphasize initially the correciton of tax policies that penalize the competitiveness of District Energy versus more conventional energy service alternatives:
- 1. Identify Tax and Financial Inequities
- Identify specific tax and fiscal policies that appear to place an inequitable financial burden on District Energy.
- 2. Document Impacts on the Industry
- Quantify and document specific constraints to competition created by current tax practices and fiscal policies.
- 3. Develop Exemplary Alternative Models
- Define changes that correct the inequities. Base initial recommendations on equitable policies that are in-place within perceptive State governments.
- 4. Set and Address a Fiscal Agenda
- Set priorities based on significance and near-term opportunity for change. Present recommendations for endorsement by appropriate policy bodies, and integrate with actions defined in Goal 3.
C. Assure Equitable Regulatory Treatment
District Energy is both an energy supply and demand-side management (DSM) technology. These dual capabilities are not usually recognized within most state utility regulatory bodies. To address them, new or modified regulatory provisions are needed that: (1) encourage the purchase of electricity from District Energy sources; (2) incorporate externalities into electric pricing; (3) recognize District Energy as a significant DSM alternative; and (4) deregulate thermal-only systems. The focus should be primarily on changes within the utility regulatory process, with an emphasis on state governments and public utility regulatory bodies.
- 1. Identify Critical Regulatory Issues
- Define specific regulatory practices that constrain: electricity purchase, consideration of external benefits, and regular use of District Energy as a DSM tool.
- 2. Document Impacts on the Industry
- Quantify and document how current regulatory practices penalize District Energy, and work to the disadvantage of district energy suppliers and their customers.
- 3. Define Alternative Regulatory Provisions
- Develop specific recommendations for regulatory change that are based on existing models and precedents. Consider provisions for the deregulation of thermal only systems.
- 4. Set and Address a Regulatory Agenda
- Set priorities based on significance and near-term opportunity for change. Present recommendations for endorsement by the National Association of Regulatory Utility Commissioners (NARUC), and other appropriate policy bodies. Integrate with actions in Goal 3.