REFERENCES American Geophysical Union. 1999. AGU adopts position on climate change Building Operating Management Online. 1999. Financial executives find energy costs Climate Protection Division of the US Environmental Protection Agency, 1999. Partner Richard, S., Hardy, B., Von Neida, B., and P. Mihlmester. 1998. The Investment Risk in U.S. Department of State. 1997. Climate Action Report. 1997 Submission of the United U.S. Environmental Protection Agency. 1998. Inventory of U.S. Greenhouse Gas Emissions END NOTES FOR TABLE 2 1. Partners' Completed Investments. These are energy-efficiency and methane project investments for which partners have made initial technology expenditures in 1998 or prior years. This category also includes sales of ENERGY STAR-labeled products through 1998. The benefits of these Completed Investments have accrued since they were made and will continue to accrue until the end of their useful lives. 2. Partners' Committed Investments. These are energy-efficiency and methane project investments for which partners have committed to make initial technology expenditures in years after 1998. This category also includes one cycle of replacements for ENERGY STAR office products with lifetimes of 6 years or less. Replacement of ENERGY STAR office products is assumed to be at the same penetration rates as in 1998. All benefits from Committed Investments will accrue in the years after 1998. 3. Bill Savings. These represent the total savings in energy bills, or income associated with ENERGY STAR programs or methane programs, in 1998 dollars, to partners or purchasers of ENERGY STAR products over the lifetime of the investment or through 2015, whichever comes first. The investments have varying lifetimes. Some, such as PCs and monitors, have short expected lifetimes, e.g., 4 years. Others, such as the thermal envelope improvements associated with ENERGY STAR Homes, have much longer lifetimes, e.g., 30+ years. A cut-off of 2015 was chosen as a reasonable end-point to assess benefits, even though the benefits of the Division's voluntary programs and partner investments will often continue to be realized after that year. 4. Technology Expenditures. These represent the total cost to partners, in 1998 dollars, of investments in energy efficiency, including the cost of financing the investment over the life of the investment at a 7-percent real rate of interest (4 percent for public sector investments). This category includes any premium, and the cost of financing that premium, for the purchase of ENERGY STAR-labeled products. The 7-percent interest rate is the standard rate recommended by the Office of Management and Budget in Circular No. A-94, Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs for Base-Case Analysis. As stated in the circular, “(The 7.0 percent) rate approximates the marginal pretax rate of return on an average investment in the private sector in recent years." 5. Net Savings. This category represents the difference between Bill Savings and Technology Expenditures. It is the amount of cash available to partners and purchasers of ENERGY STAR products to put back into the economy over the life of the investment, or through 2015, whichever comes first. 6. MMTCE. This column presents the amount of carbon emission equivalents avoided by investments in energy-efficient products over the lifetime of the investments or through 2015, whichever comes first. It includes the emissions avoided by methane programs, using a Global Warming Potential of 21. For energy-efficiency investments and purchases, the carbon emission equivalents are based on an analysis of marginal carbon emissions. The marginal carbon emission rate varies over time. In the year 2000, it is assumed to be 1.64 lbs. CO,/kWh; in the year 2005, it is assumed to be 1.20 lbs. CO/kWh; and in 2010, it is assumed to drop to 1.09 lbs. CO2/kWh. For more detailed information on the program cost and benefits calculations, call CPD at 202-564-9190. NOT FOR RELEASE DO NOT CITE OR QUOTE PEER REVIEW DRAFT September 1, 2000 DISCLAIMER This document is a draft for review purposes only and does not constitute U.S. Environmental Protection Agency policy. Any mention of trade names or commercial products does not constitute endorsement or recommendation for use. |