Potential Directions for Federal Energy Efficiency Legislation

Blog | February 26, 2013 - 9:28 am
By R. Neal Elliott, Senior Director for Research

Today I have the privilege of testifying before the House Energy and Commerce Committee. My hope is that this is the beginning of a discussion that will lead to federal energy efficiency legislation later this year. Congress has a unique opportunity to strengthen our economy through energy efficiency, save the nation millions of dollars, and curb pollution. My testimony will illustrate the powerful benefits of this essential energy resource and discuss five areas of potential legislative action.

Appliance and equipment standards have been one of the greatest energy efficiency policy success stories of the last quarter-century. These standards have resulted in cumulative energy savings since 1987 of 3.4 quads in 2010, with the net present value of consumer savings from standards already in place set to save about $1.1 trillion through 2035.

Building energy codes are universally recognized as the easiest and most cost-effective way to help consumers save energy and money, making housing more affordable and reducing air pollution. DOE provides technical assistance to consumers and also assists states that are considering adopting these codes. We recommend that DOE set energy savings goals for model codes and expand its work to encourage and assist states to adopt and successfully implement these codes.

Building labeling and disclosure informs consumers so that they can make sound choices. Providing information about energy use in buildings, whether they are homes or commercial spaces, would not only allow consumers to make economically sound choices about ownership costs, but would also encourage investments that improve the energy efficiency of existing and new buildings.

A trained workforce is critical to the success of energy efficiency. Presently DOE has a very successful program, the Industrial Assessment Centers (IAC), to help train new energy efficiency engineers by working with university professors and their students to conduct energy audits of small to medium-sized manufacturing facilities. This program has been successfully operated since 1976. ACEEE has proposed expanding the IAC program in both size and scope to better meet the workforce and energy assessment needs of U.S. manufacturers. This program should also be expanded beyond the training of industrial engineers to include building engineers as well. ACEEE has developed a proposal, which we detailed in a conference paper in 2010.

Until recently, energy use in the industrial sector has received little policy attention. This situation has changed with the signing last August of President Obama’s executive order on industrial energy efficiency and combined heat and power plus the inclusion of manufacturing provisions in American Energy Manufacturing Technical Corrections Act of 2012 (H.R. 6582), which was enacted last December. We recommend three areas for action:

  • Future of Industry: The industrial program at DOE has been the leading federal program focused on manufacturing and among the most successful federal research and deployment programs. This program, now renamed the Advanced Manufacturing Office (AMO), has unfortunately experienced a lack of leadership for over a decade. To help get this important program back on track, we suggest that an industrial technologies steering committee be created to build a strong working relationship between AMO and stakeholders, and AMO efforts should focus on an even mix of research and development and deployment programs that are responsive to the needs of the manufacturing sector.
  • Smart Manufacturing: Opportunities in industrial energy efficiency will come increasingly from the application of “intelligence” in manufacturing systems, as we discussed in our 2012 report on long-term energy efficiency trends. These developments are referred to as Smart Manufacturing. We suggest that a smart manufacturing program be established at DOE and that the program focus on developing the infrastructure needed to enable smart manufacturing across the country.
  • Energy Efficiency in Supply Chains: There is a growing consensus in the manufacturing community that it is important to deal with supply chain issues. Companies that are successful in making their supply chain more efficient would be rewarded with the Supply Star label, thus helping consumers make more informed purchasing decisions.

In addition to these topics, other witnesses will be talking about important potential areas of policy action including combined heat and power and energy efficiency in federal facilities.

It is exciting to consider the prospect of energy efficiency legislation in this new Congress.  I am encouraged that there is hope, particularly since the committee has taken the unusual step of inviting Senators Murkowski and Shaheen, both strong supporters of energy efficiency, to testify at the same hearing. This overture suggests perhaps that both houses of Congress are prepared to work together to help realize the opportunities that would result from greater energy efficiency.