Here are 5 Texas-sized ideas for Energy Secretary Rick Perry

Source: By Dan Reicher, The Hill • Posted: Friday, March 10, 2017

As Rick Perry settles in at the U.S Department of Energy (DOE), where I previously served under multiple secretaries, I want to suggest five Texas-sized ideas for the former governor of the Lone Star state.

First, Secretary Perry has an immediate opportunity to help fund the trillion-dollar infrastructure program that President Trump emphasized in his recent address to Congress, stressing the need for both “public and private capital.”

The DOE’s loan guarantee program, signed into law by President George W. Bush, has $41 billion in existing authority to fund a broad array of important energy infrastructure such as transmission lines, carbon capture systems, electricity storage, and nuclear facilities. While some House Republicans have been battling the program for years, more than $6.5 billion in loan principal and almost $2 billion in interest have been repaid to U.S. taxpayers on DOE loans and loan guarantees issued to date. Losses are barely half of the interest paid and a tiny fraction of the $10 billion Congress set aside for failed loans. DOE’s financial professionals are now reviewing $50 billion of new investments across 70 energy-related infrastructure projects for Secretary Perry’s consideration.

Carbon capture is one promising area that Secretary Perry talked about in his Senate confirmation hearing. Already, a December loan guarantee is backing a Louisiana project to convert petroleum-refining wastes into high-value methanol, with the resulting carbon dioxide pumped into Texas oil fields to enhance production and trapped deep underground to cut greenhouse gas emissions.

Second, a major infrastructure need relates to long-distance electricity transmission lines. As governor, Secretary Perry oversaw the nation’s single most successful transmission development program. In just five years, Texas built more than 3,500 miles and $7 billion of transmission lines to move wind energy from rural west Texas to Dallas and Houston — helping Texas become the nation’s wind power leader.

Secretary Perry has authority to unstick some of the siting and financing problems bedeviling many other U.S. long distance transmission lines. The DOE’s Power Marketing Administrations, like the Bonneville Power Administrationand Western Area Power Administration, own tens of thousands of miles of transmission lines and have financing and eminent domain authority to build new lines and upgrade existing ones. Last year, for example, Energy Secretary Moniz used DOE authority to advance a major transmission line from wind-rich Oklahoma to the southeast. Secretary Perry should consider the same for other stalled projects.

Third, Secretary Perry will lead a little known but pivotal department office. The DOE’s Federal Energy Management Program oversees energy use in 350,0000 federal buildings — and even more vehicles — with an annual energy bill to taxpayers exceeding $23 billion. A 2016 report by a bipartisan task force of the Secretary of Energy Advisory Boardhighlighted many ways the new administration could better manage federal energy production and use.

For example, there are well-established private ventures, called Energy Service Companies (ESCOs), which finance energy efficiency improvements to federal buildings — with private dollars — and pay themselves back out of the savings. ESCOs, a number of which are Texas-based, have financed $30 billion of U.S. energy infrastructure improvements and stand ready to do more under the President’s infrastructure proposal. Among other things, Secretary Perry should update the current federal target for ESCO investment in federal building upgrades.

Fourth, Secretary Perry oversees another significant DOE office that is out of the limelight. The State Energy Program(SEP) works with state governments to support energy efficiency, renewable energy, natural gas and other clean energy opportunities through federal grants, cost-shared by the states. Over the years, Texas has used SEP funding to, among other things, advance new clean energy technologies and help launch the Texas Loan Star revolving fund, with almost $400 million to date in energy and water-saving upgrades to state and local buildings, schools and hospitals. In 2014, Former Secretary of State George Shultz and Senate Energy Committee Chair Jeff Bingaman recommended that Congress expand SEP funding in a Stanford report.

Finally, Secretary Perry should strongly back one of DOE’s most important programs that has enjoyed bipartisan support for decades. The department’s Appliance and Equipment Standards Program has driven energy efficiency improvements to a broad array of equipment that will save consumers about $2 trillion on their utility bills through 2030. The DOE regularly updates these targets for many types of equipment in order to capture technology advances and push them into the market. Texas, with its searing summer heat, has enjoyed some of the biggest savings nationwide as a result of air conditioner improvements stimulated by the standards. Some of the energy-saving features have been pioneered by companies like Carrier Corporation, which has major connections to Texas, and to President Trump.

With his Texas energy experience, I am hopeful that Secretary Perry will take the reins of the DOE and brand the department a continuing force for cost-effective — and environmentally sustainable — improvements to our nation’s energy infrastructure.

Dan William Reicher is executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University. He was previously director of climate and energy initiatives at Google. He served for eight years at U.S. Department of Energy as assistant secretary, chief of staff, and deputy chief of staff during the Clinton administration. He has been a member of the Secretary of Energy Advisory Board since 2013.