More green for the environment and Delawareans’ wallets

A statewide initiative enacted to help make Delaware “greener” and help its residents to save thousands of dollars in energy costs was formulated with the research assistance of UD’s Center for Energy and Environmental Policy.

Known as the Sustainable Energy Utility (SEU), the initiative was developed in part by John Byrne, Distinguished Professor of Public Policy and director of the policy center, working with seven of his graduate students and a postdoctoral fellow. It has the potential to cut Delaware’s carbon dioxide emissions to 2003 levels and save average households about $1,000 a year in energy costs.

The plan establishes a state-supervised nonprofit organization dedicated to helping the state’s residents and businesses conserve energy and expand their reliance on renewable energy sources through funds initially seeded by a $30 million bond. Citigroup has offered to underwrite the bond.

The state Senate and House of Representatives passed the measure this spring, and Gov. Ruth Ann Minner signed it into law June 28.

According to Byrne, who, along with state Sen. Harris B. McDowell, co-chairs the 14-member SEU Task Force, the plan was initiated after electricity and gasoline prices rose sharply.

“We thought about what would be an approach that could address the needs of Delaware residents and businesses, while also making improvements in our environment,” Byrne says, “and what we focused on were five basic tools.” He says those tools could have far-reaching effects and will offer Delawareans better options than they previously had.

The tools are helping low- and moderate-income families make their homes more energy efficient; helping consumers and businesses switch to energy-efficient appliances; helping residents and businesses create “greener” home and building designs; helping households upgrade to high-efficiency “green” vehicles, such as hybrid cars; and, through the use of such renewable energy options as solar systems, helping residents and businesses boost their reliance on customer-sited/customer-generated sustainable energy sources.

UD environmental policy graduate student Jason Houck, who has worked for the past year on the state Senate Energy Transit Committee, says that the SEU draws on initiatives that have proved successful in other states.

“What we’re trying to do with the SEU is to follow the leads of other states,” Houck says. “In the past decade, Sen. McDowell has spearheaded many efforts with energy policy, and now that we have a policy in place, it’s easier to build momentum.”

Rebecca Walker, an environmental policy graduate student who worked as a researcher for the SEU task force, says that in the course of preparing materials for the proposal, she examined measures other states had successfully implemented that seemed promising for Delaware, as well.

“I think the model we have now combines some of the best features from other states,” Walker, a former resident of environmentally progressive Oregon, says.

The SEU task force, Byrne says, “conceived of an organization that would come in and provide assistance to a citizen who wanted to upgrade to a more energy-efficient appliance or to a more energy-efficient building or home.”

For example, in the case of a resident who is buying more efficient household appliances (which due to design principles typically cost more than standard models), Byrne says the SEU would pay the difference and then ask the consumer to share 33 percent of the energy savings with the nonprofit for the next three to five years.

The part of the initiative that will provide Delawareans with customer-sited renewable energy options, such as solar systems, is perhaps the most ambitious component of the SEU in that it would harness renewable energy.

Delmarva Power’s current practice is to buy renewable energy credits (RECs) to meet its legal requirement to generate a portion of its power from renewables, Byrne explains. Because of that, he says, electricity derived from the sun and other renewable energy sources can pay Delawareans as much as 25 cents per kilowatt hour, compared with the 15 cents per kilowatt hour consumers now pay for electricity derived from conventional fossil fuels.

“With the initiative, the SEU would pay for 50 percent of the renewable energy system’s initial cost,” Byrne says. “Then for every kilowatt hour that you, the customer, generate, the electric company would give you 25 cents for the REC, so you’d get a revenue flow from having the system.” The SEU, he adds, would then take 25 percent of that REC value.

In this approach, there are no new taxes, no hikes in electricity or other energy prices and no need to pay for a government bureaucracy, while Delaware gains all of the economic and environmental benefits of sustainable energy, Byrne says.

—Becca Hutchinson