We’ve had the pleasure to speak with Kateri Callahan, President of the Alliance To Save Energy. Kateri Callahan brings more than 20 years of experience in policy advocacy, fundraising, coalition building, and organizational management to her position as the president of the Alliance to Save Energy, a non-government organization headquartered in Washington, D.C., whose mission is to advance energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security. Serving as president of the Alliance since January 2004, Callahan leads a staff of more than fifty; oversees a budget of approximately $10 million annually; and works with the Alliance Board of Directors, which includes Members of Congress, state and local officials and top corporate and NGO executives, to establish and oversee the core objectives and strategic plans for the organization.
Under Callahan’s leadership, the Alliance conducts policy, communications, research, education, and market transformation initiatives in the U.S. and more than a dozen other countries. The Alliance maintains a robust Associates program that includes more than 160 international businesses, associations and interest groups that support the organization’s mission. As well, the Alliance conducts international conferences, summits and other education and outreach forums to further its mission.
Callahan serves as the principal spokesperson for the Alliance, appearing regularly before the Congress and the media, and addressing conferences and gatherings around the world. She is a trusted source for credible information on energy efficiency and its role in addressing the environmental, economic and national security issues associated with the use of energy.
Q: Who is the Alliance to Save Energy and what are your main objectives?
Kateri Callahan: The Alliance to Save Energy is a nonprofit organization, and we were formed actually thirty-two years ago as a result of the first energy crisis in the United States. Since that time for over three decades, we have a very narrow mission to advance energy efficiency, and we do that for economic, the environmental, and the energy security benefits that accrue when you don’t waste energy and you use it efficiently. That very narrow mission takes us into a wide variety of work in initiatives and activities. We have a staff of about seventy people. We have operations worldwide. And we’re headquartered in the U.S., but we have operations in about four other countries and projects in a dozen countries around the world. We do research and analysis. We do policy advocacy, communications, education of consumers but also of students from kindergarten all the way through the university level. And we as well do market transformation types of activities.
Q: Which industries are impacted by The Alliance’s efforts and initiatives?
Kateri Callahan: The Alliance has a rich history of advancing energy efficiency in every sector of the economy. We do work with buildings with the homes people live in, commercial buildings, malls. We do work with industrial applications. We do work in the transportation sector, and we do work on the power generation side because everywhere from the mining and the generation of energy all the way through to a consumer’s use of it, there are great opportunities to advance energy efficiency.
Q: How important is the development and enforcement of government policies and legislation?
Kateri Callahan: First of all, let me say we do spend a lot of time at the Alliance and a large focus on policy. Because unlike traditional sources of energy whether it’s oil, natural gas, coal, even nuclear, energy efficiency doesn’t require hard infrastructure. It doesn’t require pipes and transmission lines. But it does require soft infrastructure. It does require policy. It requires investment. It requires education. So we spend a lot of time trying to get the policy environment correct so that it can overcome market distortions. And let me give you an example of what I mean. If you are a renter in an apartment and you are paying for the utility bills every month, or a renter in a home and you’re paying for the utility bills every month, the landlord has no incentive to make the property where you live more energy efficient because that would require an investment. And that’s something called a split incentive. We see that with the utility sector as well. Unless the policy framework is right and the regulations are right, a utility who’s in the business of selling energy has no incentive to help you as a customer use less of his or her product. So there are all these market distortions that are out there, and policies can overcome those. Energy efficiency, to make it work, to make it happen, often requires investment. So, for example, a policy incentive that can help to overcome that hurdle of having to invest money before you can save could be tax credits for making investment or could be rebates for making an investment in energy efficiency whether that’s in a home or a commercial building or an industrial application or an institution like a school.
Q: The administration has proposed a “Home Star” program. What is this and is this a good or bad piece of legislation?
Kateri Callahan: That is a proposed policy instrument that the Alliance backs very strongly because what will happen from that are wins for the economy, are wins for the consumers, and are wins for jobs creations. So let me back up and say what Home Star is. The Home Star building, first on the jobs front, will create jobs in one of the hardest sectors of our economy: the construction industry. Right now, one in four construction employees nationwide is out of work. If we provide incentives for homeowners to improve their homes, retrofit their homes, we are going to be putting money into the system to hire those construction workers who are currently unemployed. The second thing Home Star does by providing incentives, by providing funding for homeowners to invest in their homes, it allows homeowners to save on their energy bills every month. And the money that they are no longer paying for wasted energy can go back into our economy for other useful goods. Then you turn and look at what are the more societal benefits of doing this. If we improve the efficiency of our existing home stock in this country, at the same time we will be lowering greenhouse gas emission, we will be enhancing energy security. Because right now in the United States, we can’t produce and don’t produce all of the energy that we consume. So we have to import energy. If we consume less, we can build and narrow that gap between what we produce and what we use, making us more nationally secure. So the Home Star Program, by providing these rebates, is really a win for the economy. It’s a win for the environment. And it’s a win for our national security.
How does the proposed Home Star Program increase “green jobs”?
Kateri Callahan: First of all, with the Home Star proposal, we’ve done some work, some of the advocates have done work, looking at how many jobs could be created from that program. So the request into the Congress is to provide $6 billion. And when we look at and try to model what kind of jobs are created from that, it looks like we might get as many as 168,000 jobs. The majority of which would be created in the first year of what is a two-year program. So very significant job creation. If you do the math on that, that’s about $35,000 a year per job which stacks up very well to other types of measures that are job creating measures. And I’m going to go back and say something I know I’ve said a couple of times, but in addition to creating those jobs and putting people who are unemployed back to work, we are also building in lasting savings that are going to help insulate our economy in the future by freeing up dollars that are now being unnecessarily spent on wasted energy. So it’s a twofer. It’s a lot of jobs, but it also is an economic long-term benefit to the economy.
Q: Is the administration really generating “green jobs” or are they falling short of some promises?
Kateri Callahan: There have been people that are questioning whether or not the work that’s being done under the stimulus bill and some of the jobs creating bills are working now. So why do more? And I think what I’d like to say about that is a couple of things. The work that the federal government has done, looking at the overall stimulus bill indicates that we’ve created about two million jobs already just in the first year of the money being in the marketplace. The portion of those jobs that are related to the clean energy sector in energy efficiency are relatively small. But only about one percent of the money that’s been spent today has been spent on the clean energy and energy efficiency activities that have been authorized under the bill. So we’ve only created 16,000 full-time jobs as according to the government estimates in energy efficiency currently and about 4,000 contractual jobs. So about 20,000 overall. Eleven thousand of those are in the weatherization part. So we’re actually improving low-income housing with those jobs. Again, a twofer. But the good news is is that the job creation situation with respect to energy efficiency is expected to boom beginning this summer and going all the way through March 2012. It’s taken some time to get the money into the pipeline, and that was understood. There are all kinds of programs in the stimulus bill. Some were there to put a shot into the economy right away and create jobs, and that’s happening. Other funds were put there, both to create jobs, but also to leave a lasting impact, positive impact for our country. And that’s where those energy efficiency jobs fall. So we’ve had to do a balancing act over the last year of speed and getting money as we quickly can into the economy. But also balancing that with the integrity of the programs and making sure that we actually get energy savings from the jobs that are being created and the money poured into the economy. So that balance has slowed somewhat the expenditure of the funds, but I think that’s good news because what will come out are certainly the jobs in the next twelve to eighteen months but also lasting impacts that will benefit our country in terms of energy security, the environment, and very importantly, the economy.
Q: So what steps is the Alliance taking to improve the public’s engagement of energy efficient practices?
Kateri Callahan: That’s one of the things as an energy efficiency advocate we face on a daily basis is the need for education and outreach for empowering consumers and businesses to save energy by giving them the tools and the information that they need to make the appropriate choices when they’re shopping for appliances and electronics. To value energy efficiency, improvements and upgrades to a home as much as they do, granite countertops or slick looking windows and doors. They need to value what those windows and doors are doing in terms of the energy use in the house, not just the way they look, the aesthetics of them. Some of the money that is coming through the stimulus and funding that’s being put into the marketplace by utilities, by state energy offices, by folks like the Alliance To Save Energy is going to educating consumers, making them aware of the ways that they can save energy and the benefits to them not just in terms of the economic benefit which is very significant, but also in terms of comfort and the ability to continue a lifestyle that they have now and maybe even improve that lifestyle even as their using less energy. So we do consumer education and awareness campaigns. The Department of Energy has a fabulous website called Empower America that looks at the job creation that’s coming out of stimulus dollars directed at renewable energy and energy efficiency. We have utilities that are reaching out to their customers, that giving them online energy audit tools that are providing in some areas free home energy audits, teaching people how they can save energy and therefore save money and all the other benefits that accrue when you don’t waste energy. So that action is happening. It’s not as much, Ben, as we like to see. One of the things that the Alliance has been advocating for the last four years is specific federal appropriations to do a large-scale national public education and outreach campaign. It was authorized under the Energy Policy Act of 2005, but there’s never been a dime appropriated to the program. We see this as a huge, huge gap in terms of what the federal government is trying to do to get this country on the path to be the most energy efficient economy in the world. We can’t do that if we don’t engage consumers, if we don’t engage businesses, and in order to engage and change behavior by consumers and businesses, we have to educate them.
Q: What do businesses need to know to get them to begin or continue steps to lowering their energy consumption?
Kateri Callahan: When you look at businesses, one of the difficulties that we have right now is we’re in such a terrible economic situation. And so even if businesses are motivated to try to lower their monthly energy bills, they often don’t have the capital to invest to allow for those improvements. Just as there is the Home Star proposal in the Congress currently that would provide funds to encourage homeowners to make efficiency upgrades to their residences, there is a counterpart for commercial buildings. It’s called Building Star, and it would provide rebates to owners and operators of commercial buildings to help encourage them to make efficiency improvements to the properties that they own and manage. That’s very important because, again as I said before, they’re often in this kind of economy isn’t the capital available to allow the businesses to make improvements in their facilities. The other financing tool that is coming to the fore and is being used and we like to see used even more often is something called an energy savings performance contract or an ESPC. And that is creative financing that’s provided to allow an institution, a commercial building, an industrial facility to make efficiency upgrades with no upfront capital costs incurred. And the way that the upgrade is paid for, is over the course of time through the energy savings. So it’s a shared savings arrangement in many cases where the facility that makes the upgrade is retaining part of the energy savings every month. And the other part of the energy savings dollars are flowing through to the contractor that provided the ESPC and made the efficiency upgrades. It’s like a long-term lease where you don’t put any capital cost upfront. So very effective. The third thing that’s going on in the financing area and something we are very, very supportive of, is low-cost and no-interest revolving loans. And there are funds being set up through the stimulus dollars by many states to create this revolving fund for money to help businesses, to help institutions, and in some cases, even to help homeowners to make efficiency upgrades, to find the capital at an incentive rate that they can use to make efficiency upgrades to their homes, to their businesses, to the commercial buildings.
Q: Final thoughts?
Kateri Callahan: We are really working to seize what we see as a golden opportunity for energy efficiency. For the thirty years that the Alliance have been in business, it’s been a trudge to try and get people to understand the benefits of energy efficiency, trying to get policymakers to take action to overcome the market challenges to widespread deployment of energy efficiency. Now is our day. People are focused on energy efficiency as the cheapest, the quickest, the cleanest way to both extend our energy supplies and to tackle climate change issues. And now, fortunately, people are understanding that not only can we do those two very important things for our society, but we can also create jobs while we’re going about the business of making ourselves better users of energy, more efficient as an economy, and less polluting as an economy.