Service Area Strategic Plan
5/18/2013   10:01 pm
Department of Mines, Minerals & Energy (409)
Biennium:
Service Area 1 of 1
Energy Conservation and Alternative Energy Supply Programs (409 507 05)
Description

This service area works to increase the use of alternative energy products and services, increase energy efficiency in state government operations, and improve other customers’ ability to make informed choices related to energy efficiency and alternative energy uses, environment, and economic development activities. Products and services include:
• Customer service, such as training, technical assistance, education, helping with state government centralized electric, natural gas, and fuel oil purchasing, and emergency fuel supply management.
• Managing economic development incentives for solar industry development and providing information needed for new energy business development.
• Assisting energy extraction operators in developing new markets for their products and assisting mineral extraction operators reduce energy costs to improve productivity.
• Maintaining and participating in the implementation of the Virginia Energy Plan.
This service area also serves as the conduit for delivery of American Reinvestment and Recovery Act funds for citizens, businesses, and local governments to invest in energy-saving activities.
Background Information
Mission Alignment and Authority
  • Describe how this service supports the agency mission
    This service area directly aligns with DMME’s mission of enhancing the development and conservation of energy resources in an environmentally sound manner to support a more productive economy.
  • Describe the Statutory Authority of this Service
    Chapter 26 of Title 45.1 of the Code of Virginia establishes the energy efficiency program requirements of the energy conservation and alternative energy supply programs service area.
Customers
Agency Customer Group Customer Customers served annually Potential annual customers
General public and businesses General public and businesses 1,600,000 7,500,000
Mineral extraction operators Mineral extraction operators 1 300
Other governmental agencies Other governmental agencies 130 225

Anticipated Changes To Agency Customer Base
General public and businesses
• All Virginia residents and businesses are potentially served through DMME’s energy efficiency and alternative energy supply activities. Energy efficiency information is provided to all Virginia citizens through DMME’s energy efficiency publications and web site. All Virginians using petroleum are affected by DMME’s emergency management activities. All Virginia citizens and businesses, particularly energy businesses, will be served through the Virginia Energy Plan. Specific sub groups of general public and business customers include:
-- Environmental organizations.
-- Economic development organizations.
-- Educational institutions.
-- Homeowners.
-- Fleet managers.
-- Commercial, industrial, and agricultural businesses.

• DMME expects the general public and business customer base to increase over the next few years. As energy costs are expected to remain high, there will be increased interest in obtaining information about and financial support for energy efficiency and alternative energy technologies. There is expanding interest in developing biomass technologies, such as biodiesel production and wood-based fuels, hydrogen as an energy source, and wind resources. Public and business customers will look for increasing amounts of energy efficiency information as competition develops under utility restructuring. DMME also is expanding the information it makes available across the Internet. As information is more readily available in electronic form, additional customers will become aware of its availability, thereby increasing DMME’s customer base. The release of the Virginia Energy Plan in September 2007 has also served to increase the public's interest in DMME's energy programs.

Other governmental agencies
• DMME provides energy conservation and alternative energy supply services to a wide variety of governmental agencies:
-- State agencies are a primary customer of DMME’s energy efficiency services. DMME assists agencies in implementing energy service contracts for energy efficiency improvement projects in their facilities. DMME assists with submetering energy use in state facilities, in procurement of alternative sources of energy (electricity, natural gas, oil, and renewable energy supplies), and in training state agency energy managers how to reduce energy costs.
-- DMME provides information on the energy business opportunities to economic development organizations to identify opportunities for new business investments and jobs in Virginia.
-- DMME partners with other governmental agencies to reach joint energy-related goals in such areas as environmental protection, forest product uses, agriculture, transportation, and housing.
-- DMME assists the Department of Emergency Management as the commodity manager for petroleum and solid fuels under the state’s Emergency Operations Plan.

• DMME expects this customer group to grow in the next few years. As electric utility restructuring further develops, DMME will be increasingly asked to assist the Commonwealth with purchasing from new electric suppliers. As energy prices continue to run high, additional state agencies will need assistance with energy efficiency projects.

Mineral extraction operators
• The DMME Division of Energy partners with other DMME divisions serving the mineral extraction industry to provide opportunities to develop new markets for their energy sources and to increase efficiency of their operations.
• Mineral extraction operators are expected to request more assistance than in the past as high energy costs (fuel and power) cause their production costs to rise. Energy producers also are looking for new uses for their products, particularly marginal products such as low BTU gas that cannot be marketed through traditional channels.
Partners
Partner Description
[None entered]
Products and Services
  • Factors Impacting the Products and/or Services:
    The American Recovery and Reinvestment Act (ARRA) is enabling DMME to offer substantial grant programs for Virginia’s citizens, businesses, and local governments to invest in energy-saving activities. DMME has applied for $16.1 million under the Energy Efficiency and Conservation Block Grant (EECBG) Program. These funds will be divided among three program areas, as follows:
    • $9.7 million in sub-grants to nearly 300 eligible local governments for community energy planning, energy efficiency and conservation projects and other qualifying activities.
    • $5.3 million in grants for renewable energy systems for local government and public school facilities. (This will be supplemented with $4.1 million in State Energy Program Recovery Act funds.)
    • $0.7 million to provide technical assistance to local governments to use energy saving performance contracting to improve energy efficiency and reduce utility costs.
    • $0.47 million in administration costs
    Under ARRA, DMME has applied for an additional $70 million for its State Energy Program (SEP). These funds will be directed at three program areas:
    • $32.14 million in grants or rebate incentives to stimulate purchases of renewable energy systems for residences, businesses and government facilities. $15 million will be made available to households and businesses to support installation of solar and small wind power systems. Payments will be based on the size of the system installed as follows: $2,000 per kilowatt capacity of solar photovoltaic (electric) systems; $1,500 per kilowatt capacity of wind systems; $1,000 per kilowatt capacity equivalent for solar thermal (hot water and steam) systems. $4.14 million will be made available for installations on local government and public school facilities. (This will be supplemented with $5.86 million funds from the Energy Efficiency and Conservation Block Grant to total to $10 million.) $13 million will be made available for installations on state government facilities.
    • $20 million in three economic development incentives to support biomass, waste-to-energy, renewable energy and energy efficiency products, services and projects. $10 million will be made available to support biomass and waste to energy projects in Virginia. $5 million will be made available to support new clean energy business development in Virginia. $5 million will be made available to support commercialization of new energy technologies in Virginia.
    • $15 million in grants or rebate incentives to stimulate implementation of energy efficiency improvements in homes and commercial properties. Residential consumers will be eligible for a rebate for 20 percent of the cost of eligible energy efficiency improvements, up to $2,000 per consumer. Commercial consumers will be eligible for a rebate for 20 percent of the cost of eligible energy efficiency improvements, up to $4,000 per consumer.
    • $2.86 million will be used to administer the grants.

    • In 2007, DMME implemented the Virginia Energy Management Program (VEMP) to help agencies comply with Executive Order 48. E.O. 48 directed state agencies to reduce their annual costs of non-renewable energy purchases by at least 20 percent, compared to fiscal year 2006, by fiscal year 2010. Agencies were directed to aggressively pursue: energy-saving activities whose costs could be recovered in one year, such as switching to compact fluorescent bulbs from less efficient incandescent bulbs; using energy savings performance contracting; renovation of existing buildings; alternative procurement techniques for energy; and procurement of renewable energy. In response, DMME’s VEMP is assisting agencies in implementing energy savings performance contracts, demand response programs, and consolidated energy procurement and billing.
  • Anticipated Changes to the Products and/or Services
    Federal requirements dictate that ARRA funding for energy grant programs be completely disbursed by the spring of 2012. Therefore, ARRA-related activities within DMME are likely to cease toward the end of the 2010-2012 biennium.
  • Listing of Products and/or Services
    • Customer assistance • Provide energy planning, training, technical assistance, education, and cooperative projects to implement energy efficiency and alternative energy projects. • Customer assistance services help customers efficiently use energy resource and develop new energy supply options.
    • Grants and financing • Provide direct grants, serve as a grants manager for federal funds, and develop alternative financing sources for energy efficiency. • Grant services provide funds to facilitate mineral and energy projects that would not be undertaken without the extra financial support.
    • Economic development • Manage economic development incentives, such as the biofuels incentive grant program, for energy industry development and provide information needed for new energy business development. • Economic development services support efforts to increase jobs and economic activity in Virginia.
Finance
  • Financial Overview
    The Energy Conservation and Alternative Energy Supply Programs service area funding comes from federal funds (67%) and general funds designated for the State Energy Program and the Southern States Energy Board dues (33%).
  • Financial Breakdown
    FY 2011    FY 2012
      General Fund     Nongeneral Fund        General Fund     Nongeneral Fund  
    Base Budget $864,794 $1,777,046    $864,794 $1,777,046
    Change To Base -$22,468 $0    -$22,468 $0
               
    Service Area Total   $842,326  $1,777,046     $842,326  $1,777,046 
Human Resources
  • Human Resources Overview
    DMME's Division of Energy, which is responsible for this service area, relies entirely on salaried employees to deliver their products and services. Rising energy prices and increased public interest in energy conservation and alternative energy are driving increased demand for these services. The average age of employees in this service area is 55.7 and their average service is 15.6 years. The Virginia General Assembly is taking increased interest in the work of the Division, and is likely to continue to undertake legislative initiatives that will place greater demands on the staff.
  • Human Resource Levels
    Effective Date 10/1/2007    
    Total Authorized Position level 12    
    Vacant Positions 3    
    Current Employment Level 9.0    
    Non-Classified (Filled) 0    
    Full-Time Classified (Filled) 9    breakout of Current Employment Level
    Part-Time Classified (Filled) 0    
    Faculty (Filled) 0    
    Wage 0    
    Contract Employees 0    
    Total Human Resource Level 9.0   = Current Employment Level + Wage and Contract Employees
  • Factors Impacting HR
    Energy prices are likely to continue to increase. Virginians and their legislative leaders are displaying increased interest in energy conservation and alternative energy sources. Demand for the services of the agency in these areas is likely to increase.
  • Anticipated HR Changes
    As energy prices increase and the Commonwealth becomes more committed to energy conservation and alternative energy, the staff of the Division will need to increase to meet increased demand for their services.
Service Area Objectives
 
  • To implement the energy efficiency and renewable energy objectives of the American Recovery and Reinvestment Act of 2009 (ARRA) and the Energy Efficiency and Conservation Block Grant Program (EECBG).
    Objective Description
    The American Recovery and Reinvestment Act (ARRA) is enabling DMME to offer substantial grant programs for Virginia’s citizens, businesses, and local governments to invest in energy-saving activities.
    Alignment to Agency Goals
    • Agency Goal: Encourage economic development through our customers’ wise management of Virginia’s energy, mineral, land, and water resources.
      Comment: This objective directly contributes to this goal by providing funding for energy-saving investments.
    Objective Strategies
    • The DMME Division of Energy staff will design and develop an administrative plan to manage ARRA and State Energy Programs
    • The DMME Division of Energy staff will design and develop a process to award and complete one round of project funding
    • The DMME Division of Energy staff will secure the necessary support personnel to implement the U.S. Department of Energy-approved administrative plan
    • The DMME Division of Energy staff will use an advisory group, staff, and customer input to review and refine programs and develop a performance matrix for funding rounds 2 and 3
    • The DMME Division of Energy staff will use an advisory group, staff, and customer input to synchronize the Virginia Energy Plan (VEP) update with American Recovery and Reinvestment Act of 2009 (ARRA) programs to ensure consistency of planning
    • The DMME Division of Energy staff will re-evaluate administrative plans and awards programs to make mid-stream corrections and revisions
    Link to State Strategy
    • nothing linked
    Objective Measures
    • Amount of American Recovery and Reinvestment Act grant funds obligated.
      Measure Class:
      Other
      Measure Type:
      Outcome
      Measure Frequency:
      Quarterly
      Preferred Trend:
      Up
      Measure Baseline Value:
      0
      Date:
      6/30/2009

      Measure Baseline Description: No funds have been obligated as of this date.

      Measure Target Value:
      86
      Date:
      10/30/2010

      Measure Target Description: $86 million obligated by October 1, 2010.

      Data Source and Calculation: DMME will track the amount of grant funding it has obligated under its State Energy Program and Energy Efficiency and Conservation Block Grant Program, in millions of dollars.

    • Amount of ARRA grant funds disbursed.
      Measure Class:
      Other
      Measure Type:
      Outcome
      Measure Frequency:
      Quarterly
      Preferred Trend:
      Up
      Measure Baseline Value:
      0
      Date:
      6/30/2009

      Measure Baseline Description: No funds have been disbursed as of this date.

      Measure Target Value:
      86
      Date:
      4/30/2012

      Measure Target Description: $86 million disbursed by April 30, 2012.

      Data Source and Calculation: DMME will track the amount of grant funding it has disbursed under its State Energy Program and Energy Efficiency and Conservation Block Grant Program, in millions of dollars.

  • To improve our customers’ ability to make informed energy choices.
    Objective Description
    DMME provides financial and logistical support to organizations developing projects that expand the use of renewable and innovative energy products and technologies, and assists economic development activities to expand renewable and innovative energy-based businesses in Virginia.
    Alignment to Agency Goals
    • Agency Goal: Encourage economic development through our customers’ wise management of Virginia’s energy, mineral, land, and water resources.
      Comment: This objective is consistent with DMME’s mission of enhancing the development and conservation of energy resources in an environmentally sound manner. Energy efficiency and alternative energy activities are mandated in Chapter 26 of Title 45.1 of the Code of Virginia. This objective aligns with DMME’s strategic direction under goal 2, “Encourage economic development through our customers’ wise management of Virginia’s energy, mineral, land, and water resources”, and with the long-term objectives of Virginia to protect, conserve and wisely develop our natural resources and to be a national leader in the preservation and enhancement of our economy.
    Objective Strategies
    • The DMME Division of Energy staff will collaborate with other DMME divisions, state agencies, localities, and other stakeholders to advance opportunities associated with energy conservation and renewable energy projects, such as: • State Corporation Commission (SCC) Virginia Energy Sense consumer education campaign; • Utility energy efficiency programs; • VA Department of General Services (DGS) programs related to state facilities; • Governor’s Workforce Group on Green Jobs; and • State and local economic development organizations.
    • The DMME Division of Energy (DE) staff will oversee the enhancement of DE’s website to incorporate the latest tools and technologies to ensure information accuracy, relevance, and usability by customers.
    • The DMME Division of Energy staff will streamline the process used to respond to customer inquiries to improve the efficiency of customer service.
    • The DMME Division of Energy staff will provide emergency response support to petroleum supply constraints in Virginia.
    • The DMME Division of Energy staff will administer the Virginia Biofuels Production Incentive Grant and Biofuels Tax Credit Programs and the Solar Photovoltaic Manufacturing Incentive Grant Program.
    • The DMME Division of Energy staff will work with the Virginia Wind Energy Collaborative to enable wind power development in Virginia through activities such as the State-Based Anenometer Loan Program, the Virginia Renewables Siting Scoring System, public outreach and education, technical support, etc.
    Link to State Strategy
    • nothing linked
    Objective Measures
    • Percent hybrid and alternative fueled vehicles used by participating governments in Virginia.
      Measure Class:
      Other
      Measure Type:
      Outcome
      Measure Frequency:
      Semi-Annual
      Preferred Trend:
      Up
      Measure Baseline Value:
      18.9
      Date:
      6/30/2009

      Measure Baseline Description: 18.9% (average FY 2005 - FY 2009)

      Measure Target Value:
      25
      Date:
      6/30/2012

      Measure Target Description: Increase to 25% (FY 2012)

      Data Source and Calculation: Information is collected from fleet managers and the Virginia Clean Cities programs. Data on purchase history and vehicle type is evaluated to determine the annual percentage of hybrid and alternative fueled vehicles in their fleets.

  • To implement a multi-year, multi-fuel energy procurement plan, incorporating renewables.
    Objective Description
    One of the objectives of the Virginia Energy Management Program is to reduce fuel costs through risk management and procurement strategies.
    Alignment to Agency Goals
    • Agency Goal: Encourage economic development through our customers’ wise management of Virginia’s energy, mineral, land, and water resources.
      Comment: This objective contributes directly to state agencies' wise use of their financial and energy resources.
    Objective Strategies
    • The DMME DE Virginia Energy Program staff will develop by January 1, 2010, a risk management plan for energy procurement to include: • Natural Gas • Electricity (conventional and renewable) • Non-Transportation Petroleum • Propane • Coal • Biomass
    • The DMME DE Virginia Energy Management Program staff will encourage state/local government groups and other public bodies to participate in this program.
    • The DMME DE Virginia Energy Management Program staff will monitor fuel use of state and participating local government agencies and other public bodies.
    • The DMME DE Virginia Energy Management Program staff will communicate progress, challenges, and program changes to program participants through email newsletters and informational meetings.
    • The DMME DE Virginia Energy Management Program staff will pursue methods for multi-year fuel purchases.
    Link to State Strategy
    • nothing linked
    Objective Measures
    • Amount of fuel costs avoided annually.
      Measure Class:
      Other
      Measure Type:
      Outcome
      Measure Frequency:
      Annual
      Preferred Trend:
      Up

      Data Source and Calculation: This is a new measure for the biennium. Baseline data will be collected and compiled during FY 2010.

  • To reduce peak electrical demand by enrolling at least 50 public facilities in the Demand Response Program.
    Objective Description
    The Demand Response Program is a key element of the Virginia Energy Management Program within DMME's Division of Energy. It aims to take advantage of payments offered by electric utilities for facilities that reduce their load during periods of peak demand. VEMP staff work with state facilities to implement procedures, install equipment and enroll in demand response programs offered by utilities.
    Alignment to Agency Goals
    • Agency Goal: Encourage economic development through our customers’ wise management of Virginia’s energy, mineral, land, and water resources.
      Comment: This objective directly contributes to the wise use of energy resources.
    Objective Strategies
    • The DMME DE Virginia Energy Management Program staff will develop an electrical demand load reduction plan for participating bodies
    • The DMME DE Virginia Energy Management Program staff will enlist participation by state/local government groups and other public bodies in the Demand Response Program.
    • The DMME DE Virginia Energy Management Program staff will work with the Department of Environmental Quality to change the definition of “emergencies” for the use of backup generation to an event “called” by PJM or the electric utility.
    • The DMME DE Virginia Energy Management Program staff will communicate progress, challenges, and program changes to program participants through email newsletters and informational meetings
    Link to State Strategy
    • nothing linked
    Objective Measures
    • Number of state government facilities enrolled in demand response programs.
      Measure Class:
      Other
      Measure Type:
      Outcome
      Measure Frequency:
      Semi-Annual
      Preferred Trend:
      Up
      Measure Baseline Value:
      30
      Date:
      6/30/2009

      Measure Baseline Description: 30 facilities enrolled as of 6/30/2009

      Measure Target Value:
      50
      Date:
      6/30/2011

      Measure Target Description: 50 facilities enrolled by 6/30/2011

      Data Source and Calculation: DMME tracks the number of facilities that have enrolled in demand response programs.

  • To reduce the growth of non-renewable energy consumption by participating government entities.
    Objective Description
    DMME works state agencies to reduce their energy costs through conservation, energy efficiency, demand response, and procurement strategies.
    Alignment to Agency Goals
    • Agency Goal: Encourage economic development through our customers’ wise management of Virginia’s energy, mineral, land, and water resources.
      Comment: This objective is consistent with DMME’s mission of enhancing the development of energy resources in an environmentally sound manner. Energy efficiency and alternative energy activities are mandated in Chapter 26 of Title 45.1 of the Code of Virginia. This objective aligns with DMME’s strategic direction under goal 2, “Encourage economic development through our customers’ wise management of Virginia’s energy, mineral, land, and water resources”, and with the long-term objectives of Virginia to protect, conserve and wisely develop our natural resources and to be a national leader in the preservation and enhancement of our economy.
    Objective Strategies
    • The DMME DE Virginia Energy Management Program staff will partner with government entities to provide customized services including: • Performance Contracting • Energy Savings Investment Program • Energy Procurement Assistance. • Use of renewable energy sources • Other technical and financial assistance • Demand Response. • Energy Conservation/Maintenance Education/Training
    • The DMME DE Virginia Energy Management Program staff will investigate programs and services for government entities that will generate program revenue, such as fees for administration of procurement contracts, percentage of payments from the Demand Response Program and utility improvements.
    • The DMME DE Virginia Energy Management Program staff will expand staff by hiring personnel with the necessary skill set, as funds become available.
    Link to State Strategy
    • nothing linked
    Objective Measures
    • We will increase the amount of saved energy costs achieved through energy conservation and procurement strategies.
      Measure Class:
      Other
      Measure Type:
      Outcome
      Measure Frequency:
      Annual
      Preferred Trend:
      Up
      Measure Baseline Value:
      14.5
      Date:
      6/30/2009

      Measure Baseline Description: $14.5 million in saved costs (FY 2009)

      Measure Target Value:
      25
      Date:
      6/30/2012

      Measure Target Description: To increase cost savings by 20% per year, to save $25 million in FY 2012

      Data Source and Calculation: Records of executed performance contracts and state agency utility accounts employing alternative energy strategies or rate schedules are compared to previous years to determine the annual growth in cost savings.


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