Ongoing Analysis of Industrial Provisions in APA (Kerry-Lieberman)

Blog Post | May 27, 2010 - 3:31 pm
By R. Neal Elliott, Senior Director for Research

<p>Since the release of the draft of the <a href="http://kerry.senate.gov/americanpoweract/intro.cfm">American Power Act</a> (APA or Kerry-Lieberman), ACEEE has been looking at the industrial provisions in the bill. A lot of uncertainties exist about what the final legislation will look like, such as the understanding that the bill will include the ACELA energy bill (see <a href="http://aceee.org/energy/national/houseenergyandclimate.htm">ACEEE&#39;s assessment and summary of the energy efficiency provisions</a>). Based on our review of the bill&#39;s industrial provisions, a couple of important manufacturing elements emerge:</p>

<ol>
<li>The carbon caps for direct emissions do not go into effect until 2016, allowing the industry a 3-year transition period from when caps go into effect on the electric sector.</li>
<li>During this 3-year period, 0.5% of total allowances go to fund Sec. 451-453 of EISA (see ACEEE&#39;s analysis of <a href="http://aceee.org/energy/national/07nrgleg.htm">EISA</a>), which provide grants and loans for CHP and waste energy recovery; industry specific research and technical assistance including the <a href="http://aceee.org/industry/iac.htm">IACs</a>; and energy efficiency in data centers. The ACELA provisions expand and refine these provisions, so there could be some important interactions.</li>
<li>Energy-Intensive, Trade-Exposed Industries receive 15% of allowances from 2016-2025, ramping down beginning in 2026.</li>
<li>The industrial portion of the electric local distribution allocation is explicitly directed to go to that sector.</li>
</ol>

<p>ACEEE thinks these are important new provisions, and represent perhaps the one bright spot in an <a href="http://aceee.org/press/1005kl.htm">otherwise disappointing</a> bill.</p>

<p>ACEEE will have a detailed analysis of all the energy efficiency provisions in APA in a few weeks.</p>