Alaska's state flag.The odd saga of stimulus money and the state of Alaska drew to a close yesterday, ending in what should have been a big win for efficiency, as the state legislature voted to override former-Governor Palin’s veto of efficiency money. Unfortunately, this may be a victory in name only, as the Department of Energy has determined that the efficiency conditions may not need to be fully satisfied to receive the money.

Backing up, here is what happened.

  • Congress passed the Recovery Act and provided billions for State Energy Programs to fund energy efficiency and renewable energy. As a condition of receiving the money, states agree to enact pro-efficiency utility reforms and update and enforce their minimum building energy codes. These conditions could result in $135 billion dollars in additional consumer savings on top of any attained by the funding itself.
  • DOE started sending out checks, and only Alaska refused to accept the money. Then-Governor Palin decided to put on her knight’s armor and ride out to fight the windmill dragon that is a “one-size-fits-all building code” set by the federal government.

Talk about political grandstanding. There is nothing “one size fits all” about the code requirement, since states always have the option to achieve equivalent or greater energy savings. It’s all about being more efficient and no one cares how it gets done – as long as it gets done. But regardless of facts, the then-Governor said “no thanks” to $28.6 million in federal funding for efficiency that could have easily returned double as much in energy savings from efficiency improvements, all for the sake of anti-government rhetoric and posturing.

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What’s extra ironic about the situation is that not only does Alaska already have a pretty good residential building energy code, but they have an extreme climate and high energy prices that make efficiency even more economical than in warmer states. How can rejecting this money possibly be in the best interest of Alaskans? It’s like Palin turned down millions today because Alaskans would be forced to make even more money from energy savings in the future. What a strange way to make a Custer-like last stand as an elected official.

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Fast forward to yesterday, when common sense prevailed and the state legislature voted to override the veto, 45-14. Unfortunately, last week DOE also clarified that updating building codes is not necessary for taking the money. From the Anchorage Daily News,

“The U.S. Department of Energy disputes Palin’s characterization of what taking the money requires. The department said in a letter to Alaska lawmakers last week that the Legislature “does not need to adopt, impose and enforce a statewide building code in order to qualify” for the energy stimulus cash.”

DOE believes that because some states do not have the authority to set a statewide code, then promoting the latest code is enough.

This is indeed one step forward and two steps back. If states fail to follow through on the codes condition, then the long term stimulus aspect of the federal spending will be greatly diminished. In fact, states that have out of date codes or no codes are missing out on the economic stimulus that lower energy bills could have already provided. We may be paying for this missed opportunity well after the memories of the Alaskan soap opera fade away.

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