Frontier can assist political subdivisions affected by Texas' Senate Bill 5 (2001 Legislative session) in meeting their energy efficiency goals. The following article provides additional information on SB5, and its effect on municipalities and other political subdivisions.

Overview

The EPA presently lists four regions of Texas as "non-attainment areas" and a total of 22 counties as "affected" by their failure to comply with federal clean air standards. The EPA has threatened severe federal sanctions should Texas fail to meet strict clean air standards by 2007.

The 77^th Legislature, in an effort to avoid those sanctions, passed Senate Bill 5 (SB5) in 2001. SB5 charges four agencies with primary responsibility for establishing and administering the provisions of the act: the Public Utility Commission, the Comptroller, the Texas Council on Environmental Technology and the Texas Natural Resources Conservation Commission (now the Texas Commission on Environmental Quality).

The main provisions of the act provide for a diesel emissions reduction incentive program; a motor vehicle purchase or lease incentive program; a new technology research and development program; an energy efficiency grant program (concluded); and building energy performance standards. The sections of the act most affecting municipalities are §388.003 - 004, which establish a statewide building energy efficiency code, and §388.005, which requires political subdivisions in affected counties to initiate energy efficiency activities. The focus of this article is on §388.005, relating to the energy efficiency goal for political subdivisions in non-attainment areas and affected counties.

Section 388.005 contains the following requirements for municipalities and other political subdivisions (except schools) in affected counties:

Affected political subdivisions shall implement all energy efficiency measures that meet certain cost-effectiveness standards;
Affected municipalities shall establish a goal for energy efficiency amounting to 5% of electricity consumption per year for five years, or 2002 through 2006;
Affected municipalities that do not achieve the 5% goal must justify so by having implemented all available measures; and
Affected municipalities shall report annually to the State Energy Conservation Office (SECO) regarding efforts and progress under the energy efficiency section. SECO shall provide assistance and information to political subdivisions to help them meet their goals.

None of the requirements of the act includes funding provisions, nor does the act specify sanctions should a municipality fail to meet its goal. The downside risk, however, is that should Texas fail to substantially comply with clean air standards, the EPA will impose its own plan on the state.

While the threat posed by EPA's plan is not insubstantial, it is the real benefits associated with meeting the 5% per-year reduction in electricity goal that should get City Managers' and Public Works Directors' attention. Opportunities for efficiency and cost reduction can usually be found in all areas of city operation, including water and waste water, buildings, traffic signals, and street lighting.

Opportunities for Electric Efficiency

Local governments provide a wide range of services to their communities. Fire and police protection, library services, parks and recreation services, water treatment and distribution, and wastewater treatment each require substantial infrastructure and facilities, and a large amount of energy. It is not unusual for inefficiency to represent 30 percent or more of a municipality's gas and electricity bills. Much of that inefficiency can be reduced through energy conservation measures, with average paybacks of less than six years. Some measures, such as CO₂ sensors for air handling units and vending machine controllers, can achieve paybacks of less than 2 years. The following table shows where the greatest savings potential is found in municipal facilities. The actual savings potential, likely investment cost, and the cost-effectiveness of energy efficiency is best determined through an energy audit. Please contact Frontier Associates for additional information.

Figure 1
Percent of Savings Potential by End Use*

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		Frontier can assist political subdivisions affected by Texas' Senate Bill 5 (2001 Legislative session) in meeting their energy efficiency goals. The following article provides additional information on SB5, and its effect on municipalities and other political subdivisions. Overview The EPA presently lists four regions of Texas as "non-attainment areas" and a total of 22 counties as "affected" by their failure to comply with federal clean air standards. The EPA has threatened severe federal sanctions should Texas fail to meet strict clean air standards by 2007. The 77^th Legislature, in an effort to avoid those sanctions, passed Senate Bill 5 (SB5) in 2001. SB5 charges four agencies with primary responsibility for establishing and administering the provisions of the act: the Public Utility Commission, the Comptroller, the Texas Council on Environmental Technology and the Texas Natural Resources Conservation Commission (now the Texas Commission on Environmental Quality). The main provisions of the act provide for a diesel emissions reduction incentive program; a motor vehicle purchase or lease incentive program; a new technology research and development program; an energy efficiency grant program (concluded); and building energy performance standards. The sections of the act most affecting municipalities are §388.003 - 004, which establish a statewide building energy efficiency code, and §388.005, which requires political subdivisions in affected counties to initiate energy efficiency activities. The focus of this article is on §388.005, relating to the energy efficiency goal for political subdivisions in non-attainment areas and affected counties. Section 388.005 contains the following requirements for municipalities and other political subdivisions (except schools) in affected counties: Affected political subdivisions shall implement all energy efficiency measures that meet certain cost-effectiveness standards; Affected municipalities shall establish a goal for energy efficiency amounting to 5% of electricity consumption per year for five years, or 2002 through 2006; Affected municipalities that do not achieve the 5% goal must justify so by having implemented all available measures; and Affected municipalities shall report annually to the State Energy Conservation Office (SECO) regarding efforts and progress under the energy efficiency section. SECO shall provide assistance and information to political subdivisions to help them meet their goals. None of the requirements of the act includes funding provisions, nor does the act specify sanctions should a municipality fail to meet its goal. The downside risk, however, is that should Texas fail to substantially comply with clean air standards, the EPA will impose its own plan on the state. While the threat posed by EPA's plan is not insubstantial, it is the real benefits associated with meeting the 5% per-year reduction in electricity goal that should get City Managers' and Public Works Directors' attention. Opportunities for efficiency and cost reduction can usually be found in all areas of city operation, including water and waste water, buildings, traffic signals, and street lighting. Opportunities for Electric Efficiency Local governments provide a wide range of services to their communities. Fire and police protection, library services, parks and recreation services, water treatment and distribution, and wastewater treatment each require substantial infrastructure and facilities, and a large amount of energy. It is not unusual for inefficiency to represent 30 percent or more of a municipality's gas and electricity bills. Much of that inefficiency can be reduced through energy conservation measures, with average paybacks of less than six years. Some measures, such as CO₂ sensors for air handling units and vending machine controllers, can achieve paybacks of less than 2 years. The following table shows where the greatest savings potential is found in municipal facilities. The actual savings potential, likely investment cost, and the cost-effectiveness of energy efficiency is best determined through an energy audit. Please contact Frontier Associates for additional information. Figure 1 Percent of Savings Potential by End Use* *Savings potential based on Frontier's observations from a small number of municipal audits. Actual savings potential will vary.

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