GEO 2014 – The Year in Review
Tax Extenders Bill Signed into Law
At the last moment of their lame-duck session in December, the U.S. Senate passed—and the president signed—a “tax extenders” bill that reinstates several business tax breaks that expired at the end of 2013. GEO persistently pursued passage of federal tax extenders bills during the year. The measure retroactively extends (among other things) bonus depreciation, business-related expensing, credit for energy efficient homes, and a deduction for energy efficient commercial buildings through Dec. 31, 2014. GEO will continue to seek permanent status for these beneficial tax breaks for the industry.
GHP Federal Tax Credits
Citing the benefits of consumer cost savings, good jobs, more efficient energy use, enhanced electric utility operations, and improved air quality, GEO filed formal comments with the House Ways and Means Committee in 2013, and with the Senate Finance Committee in January 2014, urging extension of the industry’s 30% residential and 10% commercial tax credits. Those comments will be refreshed and reissued to new leadership following the 2014 mid-term elections. GEO and its Washington, DC advocacy team will continue working to head off any attempts to cut short the industry’s current tax credits as it seeks an extension to 2020 and beyond. See GEO’s legislative comments here.
Energy Efficiency Legislation – GHP Definition
GEO has been working to include GHPs in the federal definition of clean energy, which will have profound influence not only on federal renewable energy purchases but on policy makers across the nation. A vehicle for that language was the Shaheen-Portman energy efficiency bill. GEO pushed hard for the industry’s bipartisan, revenue-neutral amendment to the legislation. Though it was hoped that 2014 would see it signed into law, election-year politics dashed GEO’s hopes for the Shaheen-Portman bill. In an early 2015 visit to Washington, GEO President Doug Dougherty again pushed for the legislation, which will make the thermal energy produced by GHPs an alternative source for agencies to comply with federal rules governing purchases of renewable power.
EPA Carbon Emissions Rulemaking
In April—as the U.S. Environmental Protection Agency (EPA) worked toward a nationwide carbon emission reduction proposal—GEO met with officials from EPA and White House staff from the Office of Management and Budget and the Council for Environmental Quality to promote and discuss GHPs’ potential role in meeting agency goals. In June, EPA announced its proposed rulemaking under Section 111(d) of the Clean Air Act to cut carbon emissions by 30% from the nation’s coal-fired power plants by 2030. GEO immediately called upon state GHP associations to meet with local environmental protection officials to explain carbon emissions reduction potential of GHPs. In November, GEO submitted formal comments to EPA, emphasizing the efficiency that the technology can bring to EPA mandates and the benefits of more widespread GHP use, including reduction in fossil-fuels consumption, leveling of utility loads, and cutting carbon emissions from existing power plants. Seeking partnership with EPA to tackle climate change, GEO noted that energy efficiency is the least-cost, lowest risk energy resource—and GHPs are the most energy efficient technology for satisfying the thermal loads of buildings. More importantly, GEO said that to ensure that the full potential of GHPs is realized toward carbon reductions, EPA must recognize that GHPs may increase electricity use, but at the same time replace heating and cooling systems that rely on natural gas, propane and fuel oil. GEO said that EPA must consider both the renew-able thermal energy that GHPs can provide in lieu of electricity generation and the elimination of fossil-fuel burning for heating and cooling of buildings as an important offset to carbon emissions by power plants. GEO’s comments are available on the GEO website, here.
Support of State Geo Initiatives
Effort to Reinstitute Incentives In April, GEO President Doug Dougherty joined two new GEO Members in a meeting with the Arizona Corporation Commission (ACC) to urge reinstatement of GHPs into utility Arizona Public Service’s (APS) Renewable Energy Portfolio Standard, and incorporation of the technology into its Energy Efficiency Program. The group proposes that reinstating the utility’s geothermal incentive fund is the first step towards fully realizing the benefits of GHPs for Arizona ratepayers.
TRM Revisions for GHPs Since its success in advocating legislative recognition of GHPs into Illinois renewable and energy efficiency laws, GEO and the Geothermal Alliance of Illinois were directly involved in revising the state’s Technical Resource Manual (TRM) to ensure GHP access to state incentives. GEO gained every concession it proposed, including allowance of fuel switching and recognition of GHP efficiencies; increased GHP life expectancy from 18 to 25 years; decreasing the cost of GHPs to $3,957/ton; increasing the average cost of air-source heat pumps (ASHP) from $1,203/ton to $1,936/ton; requiring savings calculations onsite—not site and source; recognizing hot water production with a GHP desuperheater; allowing for cooling savings if a home did not have cooling before a GHP retrofit; and, using partial load EER and COP for efficiency calculations, resulting in GHPs being 1.8x more efficient than a 15 SEER ASHP. GEO believes the Illinois changes can serve as a template in states that have similar regulatory impediments.
Landmark Legislation Promotes GHPs In August, the governor signed into law a comprehensive renewable thermal energy bill to promote clean renewable fuels and technologies (including GHPs) for heating and cooling buildings with Alternative Energy Credits under the new law, which went into effect on Jan. 1. The Massachusetts Renewable Thermal Coalition, a group representing more than 40 local businesses and regional trade associations, was primary advocate for the bill. With the forest industry and other renewable energy interests, GEO was a leading coalition member, providing two years of direct financial support.
Bill Includes GHPs as Renewable Michigan House Bill 5980 was introduced in early December. It would amend the state’s Renewable Energy Standard to include “thermal energy produced by a geothermal heat pump” as part of its expanded definition of renewable energy, making them available for utility Renewable Energy Credits. The measure’s definition of energy efficiency specifies “geothermal, including ground source, reclaimed water, or groundwater.” With advice from GEO, Michigan Electric Cooperative Association Director of Energy Efficiency Programs Art Thayer was instrumental in promoting the bill.
GEO Meets with Nevada Energy Officials On July 31, GEO Outreach Manager Ted Clutter and a GEO Member representative met with Nevada Governor’s Office of Energy Director Paul Thomsen and Energy Efficiency Specialist David Gibson. Both support GHP development in the state through endorsement of building codes favorable to the technology. The Governor’s Energy Office has a generous loan program for GHPs, and state funds are available for “peak cap” energy audits to raise building energy efficiencies. Most important is a state mandate for government building efficiency. The Office is actively promoting GHP retrofits for state, county and city facilities. GEO will assist and monitor that effort.
Development of Thermal Energy Bill GEO is working with Utility Member Western Farmers Electric Cooperative to pass legislation allowing Renewable Energy Certificates to be issued for the generation and use of thermal energy produced by renewable energy resources, defining “useful thermal energy,” and including GHPs. Legislative action is expected early in 2015. GEO has offered to present oral testimony in support of the bill.
GEO Supports GHP Organizations GEO helped establish the New York Geothermal Energy Organization (NY-GEO) formed in August as a companion organization to the Long Island Geothermal Organization (LI-GEO) to maximize GHP representation in the Empire State. NY-GEO has already issued detailed comments on the state’s Reforming the Energy Vision (REV) Clean Energy Plan. LI-GEO was instrumental in developing Suffolk County’s unique geothermal code.
Law Includes GHPs for Efficiency Funding S. 202 was signed into law in June. The legislation allows for money raised through its energy efficiency charge to be used for high-efficiency electric heating equipment. Efficiency Vermont implements energy efficiency policy for the state. It provides technical assistance, rebates, and other financial incentives. The new law allows Efficiency Vermont to use surplus funds to subsidize installations of efficient GHP technologies. The GHP industry stood solidly behind the bill, through members of the Vermont Geothermal Association and the New England Geothermal Professional Association. GEO is assisting them as implementation of S. 202 proceeds under a Vermont Public Service Board docket.
Geothermal Heat Pump Efficiency Research
Geothermal vs. Variable Refrigerant Flow
GEO-sponsored scientific research has shown that a GHP system offers 44% more efficiency in a large commercial building than a variable refrigerant flow (VRF) system. With financial assistance from Southern Company, GEO contracted a research team from Oklahoma State University and Oak Ridge National Laboratory to evaluate the performance of GHP vs. VRF heating and cooling systems installed at the American Society of Heating Refrigeration and Air-conditioning Engineers (ASHRAE) International Headquarters Building in Atlanta, GA. Final Report, Performance of the HVAC Systems at the ASHRAE Headquarters Building is available at the GEO website, here. Two peer-reviewed articles by Spitler et al. in the ASHRAE Journal describing the project are available here, and here. GEO will offer a free webinar about the research at 10:00-11:30 Central, on Wednesday, Feb. 4. To register, click here.
Response to Severe Winter Fuels Crisis
On Feb. 13, GEO issued a nationwide press release in response to gas and propane price spikes during severe winter storms across the eastern United States. The release was picked up by much of the HVAC trade press and across the country by the news media. “There’s nothing like a crisis to increase awareness, especially when that crisis is COLD. This winter has unleashed brutally frigid temperatures on citizens around the country, teaching all of us some hard lessons about reliable and affordable heat for our homes,” said the release. “For those suffering cold and fuel shortages under the brunt of the Polar Vortex, there is an alternative—geothermal heat pumps.” As part of GEO’s outreach effort, GEO President Doug Dougherty and GEO Washington DC advocacy team members from Bracewell & Giuliani met with senior officials at the U.S. Department of Energy (DOE) to discuss the propane price and supply crisis. DOE recognized that GHPs are the short and long-term solution to the problem.
GEO Outreach with Allied Organizations
Geothermal Track at ASHRAE Summer Meeting The American Society of Heating, Refrigeration and Air-Conditioning Engineers’ (ASHRAE) 2014 Annual Conference on June 28 to July 2 in Seattle, WA featured a track devoted to Ground Source Heat Pumps State of the Art: Design, Performance and Research. It was developed by ASHRAE, GEO, the National Ground Water Association and the International Ground Source Heat Pump Association. GEO President Doug Dougherty provided the track keynote presentation, Market Barriers and Market Drivers for the U.S. Geothermal Heat Pump Industry.
IGSHPA 2014 Conference & Expo GEO sponsored an exhibit and convened a Public Policy Workshop at the International Ground Source Heat Pump Association (IGSHPA) 2014 Technical Conference & Expo in Baltimore, MD on October 15-16. GEO Board Members Steve Smith (Enertech Global), Phil Schoen (Geo-Enterprises) and Keith Swilley (Gulf Power) participated in session tracks. Smith, Schoen, and GEO staff met with Oklahoma State University leadership and IGSHPA leadership and staff, agreeing to improve communications between the two organizations, and to convene a joint board meeting in 2015.
Public Policy Workshop at IGSHPA 2014 GEO convened a Public Policy Workshop at the IGSHPA 2014 Conference & Expo on Oct. 16. GEO President Doug Dougherty discussed coordinated grassroots action by state GHP associations and at the national level through the efforts of GEO. GEO Washington, DC Advocacy Team member Ed Krenik (Bracewell & Giuliani) described current issues and advocacy tactics at the federal level. Scott Emery (Maevelle Energy) discussed experiences with grassroots lobbying in Washington and the Mid-Atlantic region. David Henrich (Bergeson Caswell) talked about the need for strategic liaisons with other organizations to achieve public policy goals.
Presentations at Illinois Renewable Energy Conference The Geothermal Alliance of Illinois joined GEO and its members to fulfill a day-long track of GHP presentations at the Illinois Renewable Energy Conference on July 16. GEO President Doug Dougherty presented during a breakout session on public policy and moderated a panel discussion on GHP commercial case studies.
Keynote at 4th Annual Illinois Geothermal Conference GEO President Doug Dougherty delivered the Keynote Luncheon Address at the 4th Annual Geothermal Conference on March 10. The event was convened by the Geothermal Alliance of Illinois (GAOI) on March 10-12, at the Doubletree Hotel and Conference Center in Bloomington, IL.
Exhibit for Midwest Associations at MEEA On Jan. 13-15, GEO was the primary sponsor of an exhibit at the Midwest Energy Efficiency Alliance annual Mid-west Energy Solutions Conference in Chicago, IL. Joining GEO President Doug Dougherty to man the exhibit were representatives from the Geothermal Alliance of Illinois and the Iowa Geothermal Association. The event attracted more than 600 participants from 13 Midwestern states.
Keynote at Ball State GEOCON II On April 9, GEO President Doug Dougherty provided a luncheon keynote address to 80 participants at Ball State University’s GEOCON II: Design, Drilling and Equipment, in Muncie, IN. The conference celebrates the largest GHP system at a university in North America.
GEO Administration Highlights
Board of Directors Elections 2014-15 On March 25, at its meeting in Kansas City, MO, the GEO Board of Directors convened its biannual election of officers. The Board unanimously elected the following: Steve Smith (Enertech Global) as Chairman, Phil Schoen (Geo-Enterprises) as Secretary/Treasurer, and Keith Swilley (Gulf Power) as Vice Chairman. The Board also elected Doug Dougherty as President and CEO, a position he has held since spring 2011. Other Board Members include Tom Huntington (WaterFurnace), Dan Ellis (ClimateMaster) and Chris Mays (Emerson Copeland), and Joe Parsons (Earthlinked).
Board Welcomes Joe Parsons Earthlinked Technologies Chief Operation Officer Joe Parsons was invited to join the GEO Board of Directors by unanimous vote on June 6. Parsons has served as Chief Operating Officer of EarthLinked Technologies since 1996, and is responsible for product development, training programs, standards compliance and authorized dealer relationships.
New Chief Operating Officer John Kelly’s retirement (effective June 30) ended nearly 20 years of loyal service. Taking his position as GEO Chief Operating Officer was Ryan Dougherty, who has extensive experience in public policy and governance. His most recent position was Deputy Director of the Illinois Healthcare and Human Services Framework. Dougherty has also served as a Senior Policy Advisor to the Director of the Illinois Department of Commerce and Economic Opportunity. Eight years at the Gove-nor’s Office of Management and Budget including positions as State Service Representative, Administrative Assistant, Executive Assistant, Legislative Liaison, Budget Analyst and Budget Advisor. Dougherty earned a B.A. degree in Psychology at the University of Illinois Urbana-Champaign.