Federal Climate and Energy Discussions Heating Up

Much has happened with U.S. federal energy and climate policy since our June Grapevine. On June 26, the House of Representatives approved an energy and climate change bill in a close vote. The bill — H.R. 2454, the American Clean Energy and Security Act of 2009 (ACES) — was very similar to versions discussed in our June Grapevine. For a description of H.R. 2454 and a variety of ACEEE analyses on the energy and financial savings and macroeconomic impacts of the bill, see our Web site. ACEEE estimates that this bill can, in 2030, save American consumers more than $350 billion and create over 400,000 jobs. Our analysis includes state-by-state estimates of the impacts of just the energy efficiency sections of this bill and a state-by-state resource page

On June 17, the Senate Energy and Natural Resources Committee reported out an energy-only bill, the American Clean Energy Leadership Act of 2009. Read a description of this bill and ACEEE's energy savings estimates . In October, the Senate Environment and Public Works Committee (EPW) reported out a climate bill, the Clean Energy Jobs and American Power Act of 2009, or S. 1733, with a vote of 11-1, despite a Republican boycott of the vote. Read the bill text and supporting materials.

This bill is likely to be combined with the ACELA bill and energy tax legislation being developed by the Senate Finance Committee before being brought to the Senate floor. These tax provisions will likely build upon the Expanding Building Efficiency Incentives Act of 2009 (S.1637) and Expanding Industrial Energy Efficiency Incentives Act of 2009 (S. 1639) introduced by Senators Bingaman, Snowe, and Feinstein. Exactly when these bills will be considered by the full Senate is unclear, but it will most likely be in early 2010 after action is completed on federal healthcare legislation. 

ACEEE continues to work on many provisions related to these bills. 

  • We have negotiated new appliance efficiency and outdoor lighting agreements.
  • We are working to add a national energy efficiency resource standard (EERS) to the Energy and Natural Resources Committee bill, or at least to improve the combined renewable energy and energy efficiency standard now in the bill. (See ACEEE’s EERS resource page.)
  • We are working to increase the allocations of emissions allowances that go to energy efficiency, including allowances that go to states and electric utilities. Specifically, we are seeking to have approximately 10% of emissions allowances that go to states allocated for efficiency and renewable energy programs, and to stay steady, rather than decline over time as in the House and both Senate bills. We are seeking to have electric utilities spend 1/3 of their free allowances on energy efficiency, just as natural gas utilities are required to do in the House and Senate bills.
  • We have been facilitating discussions between some Senate offices and industrial groups on how to improve provisions in the House and Senate bills intended to mitigate the impact of the bill on energy-intensive, trade-exposed manufacturers. 

ACEEE continues to analyze the various bills. In October, we released a new report  that found that adopting our high priority enhancements to the House bill (as discussed above) would increase consumer financial savings in 2030  to about $400 billion and increase the number of jobs generated to more 700,000. This analysis also examines an even more aggressive efficiency scenario that will save consumers about $450 billion and generate a total of more than one million jobs .The more efficiency provisions that are in the bill, the more consumers save, and the more jobs produced. We are planning subsequent analyses of the Senate bill now that it has left the Environment and Public Works Committee.

The future of these bills is very uncertain. While the House bill received a narrow majority, in the Senate 60 votes (out of 100) are needed to ensure passage. The Senate leadership and President Obama are likely to work hard to reach the 60-vote goal. The bill is unlikely to reach the Senate floor until at least February 2010. Passage will depend on convincing swing-state Senators, many from industrial and coal states, that energy and climate legislation will not hurt the economy. John Kerry (D-MA), Lindsey Graham (R-SC), and Joe Leiberman (I-CT) will likely be key players in trying to broker this compromise. In the event 60 votes cannot be reached, there is a decent chance that an energy-only bill will move forward, leaving climate legislation for the next Congress. ACEEE will work with its various coalitions to help make climate legislation a reality with strong energy efficiency sections a key component.