The per-gallon gas tax has not kept up with inflation, and as vehicles once again become more fuel-efficient (or run on electricity) and people drive less, the highway fund struggles to keep up. Officials in Oregon have been looking for a way to replace the per-gallon gas tax for about a decade. In particular, they have been considering a mileage-based tax under which roadway users would pay for how much they use the roads, rather than how much gasoline they buy.

This story from the BikePortland.org blog features an interview with the manager of Oregon’s Road User Fee pilot program. The program has been exploring several mechanisms and structures for collecting a mileage-based fee from roadway users. After a few failed pilots, they think they have the program figured out and that it can pass through the Oregon legislature this year for implementation by 2014. Some features of the proposed system are:

• platform independent and able to evolve with technology
• a fee of 1.56¢ per mile (based on $0.30/gal tax and 21 mpg vehicle)
• flexible payment options
• GPS not required
• option for paying a flat annual fee for a mileage limit
• online reporting options

In spite of the several pilots and long evolution of the proposed system, much skepticism remains about the ability of the program to function, let alone gain approval by the Oregon legislature. Either way, this is a great example of states acting as “laboratories of democracy” attempting to find solutions to nation-wide problems, whether they succeed or not.

What do our readers think about a mileage-based tax? Is it more fair than a fuel tax? Will it provide the funding needed to maintain our roads? Is it politically feasible?

Electrons are difficult to see, so talking about electricity can sometimes be confusing for people whose everyday job does not involve measuring kilowatts (kilo-whats?) and kilowatt-hours (did you fall asleep just reading that sentence?). But just about everyone uses electricity everyday. If you are a commercial or industrial customer, then it is really important to understand electricity demand.

Understanding that you pay for the electricity you use in a given period of time is pretty straightforward. Understanding demand is a little trickier. Demand charges are based on the fact that electricity generators and transmitters must match electricity production and delivery to the instantaneous demand for electricity. Thus, they need to have the capacity to deliver all of the electricity needed at the point in time when the total demand for electricity is highest (typically in the summer months due to air conditioner use). Utilities must maintain this capacity even at times when demand is not at its highest. The demand charge helps to pay for the infrastructure that isn’t being used all the time so it is available when needed during the peaks. Customers that have a greater contribution to that peak end up paying a higher demand. Typically, only commercial and industrial customers are large enough to individually affect the peak, which is why residential customers do not see demand charges.

Pretend for a minute that you bake pies and I buy and eat only your pies. Your oven can only bake one pie at a time, but you also have to have a pie ready for me whenever I want to eat one. As long as I eat pies at the same or slower rate than you can bake them, you don’t need another oven or any more pie-making equipment (e.g., pans, mixers, or ladles (are ladles used when making pies?)).

Anyway, if I start to eat pies faster than you can make them in your single oven, you will have to invest in a second oven and more pans and equipment because you must have a second pie ready when I finish the first one. I will eat pies faster for a while, but eventually I will slow down again and one oven is all you need to keep up. But now you have a second oven and extra equipment you aren’t using anymore. As your only pie consumer, you could start making me pay more for my pies now. After all, I caused you to need a second oven even though it is just sitting there. I was the reason you had to buy it, so it is reasonable for me to help pay for it.

The electric demand charge is like the extra cost of that second oven, except that electric utilities spread that cost among many customers. Utilities also figure out who is eating the most pies and causing most of the the need for extra ovens. Utilities charge those pie eaters even more than the rest of pie eaters.

Depending on how your company uses electricity, it might save as much energy from demand reduction as it could from energy efficiency improvements (energy efficiency is like eating fewer total pies, regardless of how fast you eat them). Although it is clear that the energy efficiency market has been attracting smart money, and that efficiency improvements can reduce demand, many companies fail to consider how strategic demand reductions can save money.

In Verdis’ own work OPS has made significant progress with energy efficiency improvements (lighting retrofit, building system improvements, behavior change). Thus, Verdis is starting to explore whether and how targeted demand reduction can help OPS save additional dollars. Although the main driver for demand reduction in many organizations is cost savings, there is an environmental benefit as well. The longer we can help keep that usage peak low, the longer we can delay construction of the next big utility plant. And until every next utility plant will be something other than coal- or natural gas-fired, we have an extra incentive to keep demand low.

 

This big, ugly recession that refuses to go away is absolutely demolishing public school budgets, which is certainly no surprise. State funding for education is diminishing, many federal grant dollars have come and gone, and other sources of revenue aren’t exactly growing. The result: cuts across the board for many schools and school districts. As we heard in this story from NPR recently (yes, I listen to a lot of NPR), Texas schools are cutting teachers, teachers’ aides, sports, security, transportation, etc, etc. The list goes on and is not unique to our friends in Texas.

When the situation is this dire, justifying sustainability initiatives is difficult, and many schools are turning away from conservation and efficiency initiatives due to a lack of resources (both time and money). But the right strategy is to do the exact opposite. The longer schools disregard and ignore their use of energy and other resources, the more often they will find themselves fighting the budget battle…and losing.

Taking Advantage of the Opportunity
Fortunately not every school district is ignoring the sustainability opportunity. Our work with the Omaha Public Schools is a perfect example of how a commitment to energy efficiency can save jobs, programs and other essential components of the education system. OPS is saving over $500,000 per year in energy costs. Yes, you read that right. It’s not small potatoes. That’s a lot of books…or teachers…or meals.

What sets OPS apart? The answer boils down to leadership. I vividly recall an important and insightful comment an OPS board member made two years ago: “We build 100-year buildings”. What a perfect perspective for a school district. While many companies are fighting to keep the doors open from one quarter to the next, we know with near perfect certainty that our schools will be here in ten, twenty, fifty and likely one-hundred years. When your horizon is that long, small investments, and in some cases large investments are well worth it even during tight budget times. They often pay for themselves in less than a few years, and in some cases, immediately recoup minimal upfront costs.

Omaha’s schools are not alone in their efforts. In August of this year, the New York Times reported on many of the energy efficiency and conservation measures schools are taking to decrease their energy use. Activities run the gamut and include simple things like post-it note reminders and checklists, and not-so-simple energy audits and boiler replacements.

Not every strategy listed in the Times article is a good one, unfortunately. Namely, the “energy cop” from Mount Sinai is a temporary solution that doesn’t result in long-lasting, sustainable behavior change. Fortunately, the cop noted as much when he admitted, “as soon as you take me away, people will start their bad habits again”. Right on, officer. Right on. Not a sustainable solution. Acknowledging and recognizing good behavior is a far better long-term solution than leaving nasty notes when people don’t comply.

Static + Dynamic Strategies
Our focus with OPS has been twofold: 1) identifying and implementing one-time gains in efficiency (static strategies such as lighting retrofits), and 2) engaging people in a meaningful and rewarding way so that sustainability becomes part of the organizational culture (dynamic strategies such as point-of-use prompts or a Green Challenge Series).  The latter is, quite honestly, more difficult work. It’s infinitely more challenging to change a person’s behavior than it is to change a light bulb.

Where Schools Should Start
One of the most important things every single school district can easily and inexpensively do is to benchmark each school’s energy use with ENERGY STAR. In most cases it’s so easy that a class can easily pull the information together and establish the benchmark within a few days. In the end, each school has a number that indicates how energy efficient your building is compared to schools from around the country.

Ratings range from 1 to 100 (the higher the better). If you’re scoring low, there might be some low-hanging fruit that can save big dollars in a hurry. If you’re scoring high, congrats…top-performing ENERGY STAR labeled schools cost 40 cents/SF less to operate than an average school. Either way, once the benchmark is in place, it’s easy to maintain and is an absolutely invaluable mechanism to track progress.

Sustainability and Education
It was John F. Kennedy who said, “Our progress as a nation can be no swifter than our progress in education. The human mind is our fundamental resource.” It’s a quote I ponder often. Educational leaders are under pressure to produce results, and it’s important for them to remember that sustainability is both an end and a means to an end in the educational system.

 

Sustainability is about the triple bottom line: it’s better for people, the planet, and prosperity not just for this moment, but also over time. What amount of time though? Is next month long enough, next year, 10 years? None of these seem to capture what sustainability experts fundamentally understand as thinking in centuries.

Thinking in centuries is a basic filter used to measure the impact of your decisions—whether at work or at home. It shifts how we act in the present. A centuries old example is from the Iroquois Nation. One of the rules for their Council of Elders is that with any decision they make, they must consider the impact of their decision on the next seven generations.

Think about that for a minute. What that would mean for us today? What would our world look like if politicians thought in centuries instead of to the next election cycle? How would our world look if CEO’s thought in centuries and not based on quarterly profits? The funny thing is, when we think in centuries, things like elections and prosperity often take care of themselves.

Centuries thinking is good for us now and into the future. It helps us build resilience in the face of uncertainty. The fact is we don’t know what the future will look like, but we can be flexible and resilient by thinking ahead and acting accordingly.

Take energy for example. We all use it; our organizations have lights, machines, computers, motors, air conditioners, and myriad other electricity users. We have vehicles that use petroleum fuel. We also know that oil prices are fluctuating a great deal and electricity prices are increasing. An organization that thinks in centuries takes all of this into account and is resilient because it minimizes how much energy is used so critical operations won’t be cut or large debt won’t accumulate just to keep vehicles fueled and computers running.

By using energy more efficiently, you can reduce overhead utility costs. In the short run, freed up capital can be used to invest in your organization. In the long-term the liability of higher energy prices will already be mitigated. By using less energy, your organization has a lighter footprint on the planet, and there will be resources for your kids and grandkids to enjoy a good quality of life.

Centuries thinking is good for people, the planet and prosperity.

Act now. Think in centuries.