On May 12, 2010, after months of deliberation, Senators Kerry (D-MA) and Lieberman (I-CT), with input from Senator Graham (R-SC), introduced a discussion draft of comprehensive climate change legislation called the American Power Act of 2010 (APA). This bill contains a cap-and-trade program on greenhouse gas emissions by utilities and large industrial emitters, a carbon fee on transportation fuels, and a modest allocation of funds to energy efficiency. It was designed to be combined with energy legislation developed by the Senate Energy and Natural Resources Committee called the American Clean Energy Leadership Act (ACELA). ACELA, which includes a number of key building and industrial energy efficiency provisions, was passed by the Senate Energy and Natural Resources Committee in June, 2009 and amended in May, 2010 to include additional energy efficiency provisions.
In contrast to the House-passed ACES bill, APA includes much less investment in energy efficiency. And relative to the energy efficiency provisions in ACES, the Senate Energy Committee ACELA bill includes somewhat more limited energy efficiency provisions. As a result, the combination of APA and ACELA achieves less energy savings than ACES and increases the cost of meeting the greenhouse gas emissions targets in both bills. APA does include more provisions for energy efficiency in transportation and industry than did ACES, representing opportunities for enhancements that, when combined with some of the provisions from the House-passed bill, could achieve even greater savings with significant benefits to average Americans.
APA’s efficiency provisions fall into a few distinct categories: consumer protection provisions that require local distribution companies (LDCs) or states to spend a portion of natural gas or fuel oil allowances on energy efficiency, state funding for energy efficiency, funding for R&D programs, industrial energy efficiency technical assistance and grants, and transportation planning and infrastructure funds. Most of these provisions will phase out by 2021, and a number end as early as 2015.