Governors and legislators took action from 2005 through early 2007 that should lead to improved energy efficiency. Six states enacted specific goals for energy efficiency in state buildings and Utah Governor Jon Huntsman, Jr. set a statewide goal to increase energy efficiency 20 percent by 2015. In addition, eight states adopted energy conservation standards for public buildings.

State Efficiency Goals

2005
Arizona Governor Janet Napolitano issued Executive Order 2005-05, titled Implementing Renewable Energy and Energy Efficiency in New State Buildings. New buildings funded by the state will derive 10 percent of their energy from renewable sources; newly constructed state facilities will achieve energy efficiency standards established through state statute.

New Mexico enacted the Energy Efficiency and Renewable Energy Bonding Act which funds energy efficiency and renewable energy renovations at existing state, tribal and public school facilities by "capturing" energy utility bill savings to pay the debt service on bonds. New Mexico is the first state in the nation to approve of this funding mechanism.

2006
Utah Governor Huntsman issued an executive order on energy efficiency. The Governor's Energy Efficiency Policy set goals to increase energy efficiency 20 percent statewide by 2015.

2007
Hawaii Governor Linda Lingle directed state executive agencies to document completed and planned activities in energy efficiency and renewable energy.

Colorado Governor Bill Ritter, in his State of the State address, announced he would issue an executive order adopting the 20 percent energy efficiency goal set by the Western Governors’ Association. Governor Ritter also signed an executive order establishing several goals for the reduction of energy consumption in state facilities and vehicles and for the use of efficient materials and resources by 2012, including reduce energy consumption at all state facilities by 20 percent. Senate Bill 51 established criteria for "high-performance" state buildings and is a companion measure to the "Greening of State Government" executive orders.

Kansas Governor Sebelius, in her State of the State address, called for a five percent reduction in energy consumption by 2010 and a10 percent reduction by 2020. The Governor also issued Executive Directive No. 07-373 targeting energy conservation and efficiency throughout state government. Also HB 2036 requires homebuilders or realtors to disclose information about the energy efficiency of new homes to potential homebuyers. The bill also adopts the 2006 International Energy Conservation Code as the energy efficiency standard for new commercial and industrial structures. Finally, separate legislation (HB 2278) authorized electric and natural gas utilities to enter into agreements with customers for the financing of the purchase and installation of energy conservation measures. Customers would pay for the financing and other costs of the improvements through their monthly utility bills, with that amount being approved by the Kansas Corporation Commission.

Energy Efficiency Incentives
A number of states, including Arizona, California, Colorado, Idaho, New Mexico, Nevada, Oregon and Washington, have removed or are examining removing the disincentives utilities have to conserve energy. Currently, most utilities’ profits are “coupled” to their total sales of electricity.

Oregon and California led the way on decoupling several years ago and several other Western states are now experimenting with it (Utah), considering it (Idaho and Washington) or use of some type of shareholder or related “performance incentives” (Nevada).

Washington held a workshop in May 2005 as part of a rulemaking to investigate decoupling natural gas revenues from sales volumes to eliminate disincentives to gas conservation and energy efficiency. The Utilities and Transportation Commission is addressing decoupling through specific proposals.

The California PUC approved expenditures of $2 billion over the 2006–2008 time period to promote utility-sponsored energy efficiency efforts for the four major California investor-owned utilities. Cumulative savings through 2013 are targeted at almost 5,000 peak megawatts, 23 terawatthours, and 444 million therms per year. The CPUC is currently analyzing the risk/reward incentive structure that will apply over this time for the utilities. The Idaho PUC has established a pilot project to allow Idaho Power Company to recover fixed-cost losses associated with new construction energy efficiency programs.

In 2006 New Mexico and Arizona began looking at utility incentive regulation. New Mexico’s energy efficiency legislation adopted earlier in 2006 permits cost recovery of both gas and electric utility Demand Side Management. In 2006 Nevada’s electric utilities obtained stakeholder input on DSM programs and have moved away from the traditional rate impact approach to a cost-effectiveness test.

Several states have also established revolving loan funds similar to Texas’ Loan Star program, which aids state entities in conducting energy efficiency design and retrofit projects. In 2007, the Utah legislature passed HB 351 to provide 1) low-interest loans for energy efficiency projects of up to $5 million at K-12 schools and 2) technical assistance in making improvements and retrofits. Similarly, New Mexico passed HB 825, which created a $500,000 revolving loan fund to help finance energy efficiency assessments.

State Energy Efficiency Building Standards

2004
California Governor Schwarzenegger signed Executive Order #S-20-04 requiring the design, construction, and operation of all new and renovated state-owned facilities to comply with Leadership in Energy and Environmental Design Silver standards. The state is pursuing LEED for New Construction for its projects at the Silver certification level and LEED for Existing Buildings certification for existing facilities.

2005
Arizona Governor Napolitano signed Executive Order #2005-05 requiring all state-funded buildings to achieve LEED Silver certification. The Executive Order also requires newly constructed state-funded buildings to incorporate renewable energy. This makes the state the first governmental entity in Arizona to adopt a mandatory green building standard.

Colorado Governor Owens signed Executive Order # D005 05 adopting LEED for Existing Buildings and incorporating LEED for New Construction practices for all state buildings. The order also creates a Colorado Greening Government Coordinating Council to develop and implement conservation policies.

Nevada legislation was signed into law requiring all state funded buildings be LEED Certified or higher in accordance with LEED or an equivalent standard. During each biennium, at least two occupied public buildings, whose construction will be sponsored or financed by the State of Nevada, must be designated as a demonstration project and be equivalent to a LEED Silver or higher certification, or an equivalent standard. The bill also provides tax abatements for property that has an eligible LEED Silver building and tax exemptions for products or materials used in the construction of a LEED Silver building.

Washington Governor Gregoire signed into law ESSB 5509 requiring state-funded projects over 5,000 square feet, including school district buildings, to achieve LEED Silver certification. Washington was the first state in the country to adopt LEED legislation.

2006
New Mexico Governor Richardson signed Executive Order #06-001 requiring all public buildings over 15,000 square feet to be LEED Silver certified.

Nevada’s Commission on Economic Development adopted the process and resolution to allow property tax abatement to any private building achieving LEED Silver certification or higher, excluding single-family homes and residential structures three stories or fewer.

Oregon's 35 percent Business Energy Tax Credit for sustainable buildings is tied to the LEED certification level achieved. A LEED Silver rating is the minimum standard to obtain the tax credit for sustainable buildings and applies to LEED for new construction, commercial interiors, and core and shell certified buildings.

Utah adopted the 2006 International Energy Conservation Code on a mandatory statewide basis effective January 1, 2007.

2007
Kansas Governor Sebelius issued Executive Directive No. 07-373, which requires implementation of energy savings performance contracting on all state-owned buildings by 2010 through the existing Facility Conservation Improvement Program, accelerated marketing of FCIP to school districts and local governments, and development of a program to require energy audits and energy conservation improvements in state-leased buildings.

Hawaii state government passed HB #2175 requiring each state agency to design and construct buildings to meet the LEED Silver certified level, or a comparable standard.

Kansas HB 2036 requires homebuilders or realtors to disclose information about the energy efficiency of new homes to potential homebuyers. The bill also adopts the 2006 International Energy Conservation Code as the energy efficiency standard for new commercial and industrial structures.

New housing developments built in California should be so energy efficient that by 2020 they would power themselves, state regulators said yesterday. Among its proposals, the PUC said new housing developments in the state should have a net-zero energy draw by 2020. They would achieve this through a combination of energy efficiency and green power sources like solar or windmills. The commission has legal authority to mandate energy efficiency standards but it remains unclear whether it can order such major changes.

California Gov. Schwarzenegger has asked the California Building Standards Commission to set standards for green building by 2010.

Nevada Governor Jim Gibbons signed the following bills into law on June 14 and 15, 2007:

• AB 621 was enacted to contain the property tax loss to local governments created by tax incentives for green buildings enacted in 2005. AB 621 reduces the amount of the tax incentive for future projects and adds a minimum energy efficiency component to the current Leadership in Energy and Environment Design (LEED) requirement. It also streamlines the process for developers and provides greater control by the Governor's Energy Office.
• AB 178 includes a minimum energy efficiency standard of 25 lumens per watt for general-purpose light bulbs sold in this State starting January 1, 2012. It also requires the Director of the Office of Energy to establish a minimum energy efficiency standard greater than 25 lumens per watt for general-purpose lights sold in this State after January 1, 2016. This provision effectively bans today's general service incandescent bulbs.
• SB 437 contains two provisions that will significantly enhance energy efficiency in Nevada. One directs the Public Utility Commission to remove disincentives that currently inhibit natural gas utilities from helping customers use gas more efficiently. Another provision requires the seller of a home to provide the buyer with a home energy evaluation.

Oregon Governor Kulongoski signed SB 838 which extends the System Benefit Charge until 2026 and allows utilities to invest in all cost-effective energy efficiency.

Conservation

2005
New Mexico enacted the Efficient Use of Energy Act which authorizes and directs electric and gas utilities to implement cost-effective energy efficiency programs in order to reduce utility expenditures and keep energy dollars in the state.

2006
Washington Initiative 937 passed, which requires electric utilities to invest in conservation and renewable sources of energy.

Kansas’ Housing Resources Corporation launched a statewide initiative to promote energy conservation and reduce home heating costs among its income-qualified homeowners. The Kansas Energy Efficiency Program allows homeowners who have an income at or below 120 percent of the state median income to borrow money to make energy efficient improvements to their homes.

2007
Colorado passed a Clean Energy Development fund (SB 126) that will produce about $7 million annually for the Governor’s Energy Office to apply to efficiency and renewable energy projects. In addition, the Governor signed House Bill 1037, which directs natural gas and electric utilities to offer rebates to customers who use energy-efficient products. The savings to consumers come from using less energy through the years.

Appliance and Equipment Energy Efficiency Standards
Four Western states -- Arizona, California, Oregon and Washington -- created appliance and equipment standards in 2005 and 2006. In 2005, President Bush signed into law the Energy Policy Act of 2005, creating federal efficiency standards for 16 products.
Of note nationally, in May 2007 major home appliance manufacturers, their trade organization, and a nationwide coalition of energy and water efficiency supporters announced an historic agreement to establish new mandatory federal energy and water efficiency standards; recommendations for new ENERGY STAR levels; and manufacturer tax credits for the production of super-efficient clothes washers, dishwashers, refrigerators, and dehumidifiers. The agreement, which seeks legislation for appliance efficiency standards and tax credits, represents significant energy and water savings for U.S. consumers.