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Should the government use its footprint in the mortgage market and disaster relief to force electrification of homes and schools? One group called Rewiring America thinks so, and it has a long list of agenda items. To find out more, Federal Drive with Tom Temin  spoke with Rewiring America’s research director Stephen Pantano.

Interview transcript:

Tom Temin
Tell us a little bit about Rewiring America who’s behind it, and what are its overall aims here?

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Stephen Pantano
So we’re a nonprofit organization with a national mission to prevent climate change and figure out ways to improve people’s homes and lives through this one particular strategy around electrification. And for us, that means buildings, vehicles, and solar power systems, and really with the mission to eliminate all the sources of fossil fuel combustion in our homes and in the lives of everyday Americans.

Tom Temin
All right, and looking at your agenda for the federal sector here. I see assignments for HUD [the Department of Housing Urban Development], FEMA [Federal Emergency Management Agency], the Federal Housing Finance Agency, Agriculture Department, Bureau of Indian Education, EPA [Environmental Protection Agency], energy, and the Securities and Exchange Commission, among others. So that’s quite an agenda, run through the highlights of what you would like to see happen. Let’s start with maybe the disaster recovery scenario.

Stephen Pantano
Sure. Well, the pretext first for this whole report is that, you know, we’re just on the heels of historic climate investment from the Biden administration and in the form of the Inflation Reduction Act, or IRA. And that program is ambitious as it is leaves a pretty substantial gap, still to the net zero goals that we have for our economy, and that the administration has put forward. And we recognize that there’s a lot of levers that the federal government can pull to help close that gap through its own operations, and some of its policies and programs such as disaster relief and recovery, housing, etc, as you mentioned.

And among other things, we would like to see the government take a position of leadership and start setting an example for the country for commercial building owners, for real estate organizations, for individual homeowners about the benefits of electrification, moving to clean and efficient electric appliances, over fossil fuel alternatives. And some of the ways we can do that is through, for example, making sure that the many hundreds of thousands of applications for disaster relief that come in after floods or wildfires in the country that we build back those homes, all electric so that we’re not installing new furnaces, new gas stoves, and other fossil fuel devices that are going to be in place for 15 or 20 years, and that we’re taking advantage of every opportunity that we have, really to move towards cleaner alternatives.

Tom Temin
And you mentioned also in this list of recommendations having to do with financing of home purchases to, especially for existing home stock, or are also new home stock. What would some of those be, I guess that’s the federal housing finance agencies where that would come in?

Stephen Pantano
Yeah, when you start to dig into all the ways the federal government impacts our economy, that’s really a lot of subtle ways. And among those is, they back the vast majority of mortgages that are written for individual homeowners when they purchase a home. And we think, home turnover, that’s typically when you bring in your painters and your contractors to update the flooring, and you haven’t maybe moved into the home yet, that’s a perfect time to take advantage of opportunities to renovate that house. And if you’ve bought a house with a 15 year old gas furnace, and you know that you want to replace that furnace in a few years anyway, why not package up a loan for purchasers to make that transition right off the bat roll that into their mortgage product included in their 20 or 30 years of payments at a very low interest rate. It’s really a much better solution than some of the alternatives, which are to wait and pay a much higher interest rate for something you’re going to do in a couple of years anyway.

Tom Temin
And this would be whether the homeowner wishes to or not, or would this be something mandatory?

Stephen Pantano
No, I don’t think any of what we’re suggesting here is mandatory, really, it’s creating opportunities for people who wish to make the change. Obviously, we think there’s a good reason to pursue a lot of these changes. It saves people in many cases huge amounts of money on their energy bills, you reduce the combustion of fossil fuel in your home. So if you have a gas stove or a furnace today, and you’re burning fossil fuel in your house every day, you’re injecting benzine and a bunch of other harmful air pollutants into your house every day. There’s a lot of evidence coming out that gas stoves particularly in homes with poor ventilation, so low income families, in particular with under resourced housing, that these gas stoves really bump up the incidence of childhood asthma and cause all these other health effects.

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Tom Temin
You know that every chef in America hates you for saying this right?

Stephen Pantano
Actually, you’d be surprised. There are a number of professional chefs and restaurants coming forward now doing induction cooking demonstrations, the induction cooktop, I have one in my home, I just got it recently. It’s much much better than the coil burner on grandma’s stove from years ago. So there’s a lot of opportunities for temperature control and all that.

Tom Temin
Yeah, I saw my first one of those in 1967, so It’s not a new idea just not really caught on that much. We’re speaking with Stephen Pantano. He’s head of research for Rewiring America. And what I didn’t see in the report was how the grid can support all of this because it can’t do what we need it to do now. And as traditional sources of electrical generation disappear, the grid is getting weaker, and it’s getting less stable. And you can’t have both happen at once. So what is the prescription for electrical generation in the United States? Besides nuclear.

Stephen Pantano
Sure, if you electrify everything, and you get rid of those fossil fuels, you obviously need more electricity, and that electricity needs to be transmitted and distributed around the country. And we need to have a smarter grid and all of the technology that comes with that.

Tom Temin
We don’t want to be like Baghdad, where will every night it goes down. And that’s the way people live.

Stephen Pantano
Yeah, that’s obviously not an outcome that anybody would want. These investments are happening anyway. I think there are plenty of plans out there federal, state, local, through the interconnects to upgrade transmission and distribution, and make sure that there’s enough electricity where it needs to be at the right time. What we’re also talking about here is 20 year transition. This is not something we’re not going to electrify the entire country tomorrow, that’s not going to happen. So we have time, we have time to plan, we have time to think about other infrastructure investments. So right now there are gas utilities that spend hundreds of billions of dollars and have plans to spend hundreds of billions more on replacing gas pipes and infrastructure to distribute gas to homes, which we would argue is not going to be necessary in the next 20 years.

So we have this mysterious group of organizations called Public Utilities Commissions which make decisions about how those investments are made, and how those electric and gas utilities make money and how they build their costs into people’s rates that they pay. And there’s an opportunity here to move some of those gas investments into electric and move the money where it needs to be right. So these plans are in place, they’re happening. We’re trying to draw attention to the infrastructure needs as well as the transition at the same time so that we don’t get flat footed.

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Tom Temin
And let me ask you about this, if the United States does all of this, India and China, which are actually the biggest polluters, now, I think either one of them individually is way more than the United States. What about them? Because they’re not buying this whole idea.

Stephen Pantano
We have a responsibility to take care of our own home. There are plenty of ways that the federal government works with other countries through the climate agreement. There was recently a biodiversity agreement, I think that was just signed a few days ago, there are conventions for working with other countries and ways of using political pressure or leading by example, that I think set a good example for other places, I would argue that people in India have just as much a desire for clean air as people in the United States and that their government ultimately will take action to try to clean up the air they already do in many cases. So I think this is as in many ways, we see news now that the Inflation Reduction Act is creating political pressure in Europe and other countries to say, why don’t we have big infrastructure investments for climate like this? Can’t we do something similar to what the U.S. is doing? I think, a similar effort by the federal government to electrify its own operations to bring its supply chains along will also and could also lead by example, and bring other countries and show show the way right this is a really great opportunity for U.S. leadership.

Tom Temin
I’m guessing you don’t drive a ’79 Oldsmobile Electra with an eight cylinder, do you?

Stephen Pantano
I did drive a ’74 Ford Mustang too for a little while.

Tom Temin
All right, how about now?

Stephen Pantano
Nowadays I have a Volkswagen but I’ve yet to buy my first electric vehicle.

Tom Temin
All right, well, that makes two of us. Stephen Pantano is Head of Research for Rewiring America. Thanks so much for joining me.

 

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