Congressional Action on Energy Efficiency Bill Would Provide Savings for Consumers, Benefits for Utilities

S. 1392 and H.R. 1616 : Energy Savings and Industrial Competitiveness Act of 2013

Energy efficiency programs across the country offer energy and cost savings for consumers and support thousands of jobs. The reduction in CO2 emissions achieved from energy efficiency may also count toward compliance with forthcoming EPA regulations aimed at reducing CO2 emissions from power plants. Earlier this year, the Senate Committee on Energy and Natural Resources overwhelmingly passed the “The Energy Savings and Industrial Competitiveness Act of 2013,” S. 761. The bill was introduced by Senators Jeanne Shaheen (D – N.H.) and Rob Portman (R – Ohio) to encourage greater use of energy efficiency technologies in residential, commercial and industrial buildings, and foster new job creation. The Senators introduced S. 1392, a revised version of S. 761, for consideration on the Senate floor at the end of July. It was subsequently removed from the Senate calendar, however, to make room for the budget and debt ceiling discussions. With those issues temporarily resolved, energy watchers are looking for the Senate to put the bill back on the calendar.

Major provisions of the Shaheen-Portman bill include: directing the Department of Energy (DOE) to develop model building codes to make new homes and commercial buildings more energy efficient; assistance to states to develop and adopt codes that exceed the model codes; authorizing DOE to provide grants to universities for career training in the design and operation of energy efficient buildings; revision of industrial efficiency programs at DOE to promote efficient manufacturing technology; establishment of the Supply Star program to identify and promote practices, companies and products that use highly energy efficient supply chains; and guidance to federal agencies on adopting energy efficiency protocols.

The economic impacts of the bill were recently analyzed by the American Council for an Energy Efficient Economy (ACEEE). According to the ACEEE, the bill would create between 66,000 and 81,000 jobs, and save $2.1 – $3.3 billion by 2020. In addition to direct benefits of job creation and cost savings, the ACEEE report estimated the bill would achieve between 16.4 – 25.1 million tons of carbon dioxide (CO2) emissions reductions by 2020. CO2 emission reductions from energy efficiency may provide important benefits to power plants under new EPA rules.

Pursuant to its authority under the Clean Air Act, the U.S. EPA is expected to propose rules that will limit CO2 emissions from existing power plants in June 2014. The rules are expected to take effect by June 2015. Many states, regulated entities, environmental organizations, and other stakeholders maintain that energy efficiency represents the most cost-effective means to meet CO2 emission reduction standards and are urging EPA to allow energy efficiency savings to count toward compliance with the new rules.

A recent World Resources Institute (WRI) report found that Pennsylvania’s Energy Efficiency Resource Program has the state on track to achieve an 11% reduction in CO2 emissions from 2011 levels from the power sector by 2020. Energy efficiency represents a significant portion of the reductions Pennsylvania is achieving through existing policy mechanisms that have the state on track to meet “moderately ambitious” future emission standards for existing power plants. States that rely heavily on coal-fired electric generation, such as West Virginia, are especially likely to find energy efficiency an attractive strategy to reduce energy costs for consumers, support new job creation and provide cost-effective tools for power plants to comply with new EPA rules.

Representatives David McKinley (R – W.V.) and Peter Welch (D – Vt.) introduced H.R. 1616, the House version of the Energy Savings and Industrial Competitiveness Act in April. While not identical, the House and Senate bills include many similar provisions. The Shaheen-Portman and McKinley-Welch bills support greater use of energy efficiency technologies, foster new job creation and enhance the ability of states to develop energy efficiency programs. Congress should take action on this legislation to support state efforts to reduce energy costs for consumers and provide additional resources for power plants to comply with new EPA rules.