New Analysis Finds Daschle Energy Bill a "Good Start" on Energy Efficiency But "Crucial Provisions Missing"

December 6, 2001

WASHINGTON, D.C. — Now that Senate Majority Leader Tom Daschle (D-SD) has released his long-awaited energy bill, an initial analysis by the American Council for an Energy-Efficient Economy (ACEEE) finds that the bill's energy efficiency provisions are "promising but incomplete."

"The Daschle bill contains sound proposals that will help Americans save energy," noted ACEEE Executive Director Steven Nadel, "but several of the most crucial efficiency measures under consideration are either still in preparation or are missing from the bill."

The efficiency of U.S. energy use will benefit from several of the bill's provisions, including:

  • New minimum efficiency standards for a variety of consumer and commercial products;
  • A program to obtain voluntary commitments from industry to improve energy efficiency in manufacturing;
  • A program to assist in the design and construction of efficient schools; and,
  • A directive to evaluate and improve the yellow ENERGY GUIDE label now found on many new home appliances.

Taken together, these provisions are notably stronger than similar provisions contained in the energy bill approved by the House of Representatives in August.
 

Major Gaps Remain

The bill does not yet contain either tax credits for advanced energy-efficient technologies or improvements to passenger vehicle fuel economy standards. The Senate Finance Committee is reportedly still working on the tax credit provisions, and a passenger vehicle fuel economy provision is still under discussion.

"The fuel economy of new passenger vehicles is at its lowest point in 20 years, " Nadel stated. "Action is needed now to help stem the growth in oil use and U.S. oil imports."

Another major omission is in the bill's electricity restructuring title, which lacks any significant provision to restore utility investments in energy efficiency, a gap that Nadel called a "major disappointment."

"More than a dozen states have included significant energy efficiency provisions in their electric utility restructuring bills in order to address cuts in energy efficiency efforts caused by restructuring," Nadel noted. "The federal government should follow these leaders."
 

Less Savings than the House-passed Bill due to Key Omissions

As part of its analysis of the Daschle bill, ACEEE developed an estimate of the energy savings of the bill's provisions. Overall, ACEEE estimates that the Daschle bill will reduce U.S. energy use by more than 25 quads over the 2002-2020 period, a reduction of about 1.2% in projected consumption over this period. [Editors note: A 'quad' is a quadrillion British thermal units - or BTUs, a measure of energy use. The U.S. used 98 quads in 2000].

Senate approval of likely tax credits for energy efficiency would nearly double the savings of the Daschle bill, and inclusion of strong passenger vehicle fuel economy standards and electric industry efficiency provisions could each add an additional 2 to 3% to the savings total. The Daschle bill, plus the missing tax credit, fuel economy, and electricity efficiency provisions, could reduce U.S. energy use by 8% over the 2002-2020 period, ACEEE concluded. [See attached tables.]

In comparison, a previous ACEEE analysis of the energy bill passed by the House of Representatives in August found significant shortcomings. The House efficiency provisions that correspond to those in the Daschle bill will save about 7 quads of energy over the 2002-2020 period, just over 1/4 the savings of the comparable provisions of the Daschle bill. However, the House bill does contain significant tax credits for efficient technologies and requires a slight improvement in passenger vehicle fuel economy, issues that remain unaddressed in the Daschle bill, bringing total savings from the House bill to 28 quads, somewhat more than the Daschle bill as introduced.

"The Senate needs to augment this bill in order to reduce America's dependence on fossil fuels, improve the reliability and security of our energy supplies, and save consumers and businesses money. The Senate may yet produce a bill that would save from 4 to 6 times as much energy as the House-passed bill, but the Daschle bill is only a start in that direction," concluded Nadel.

The American Council for an Energy-Efficient Economy is an independent, nonprofit organization dedicated to advancing energy efficiency as a means of promoting economic prosperity, energy security, and environmental protection. For information about ACEEE and its programs, publications, and conferences, contact ACEEE, 529 14th Street N.W., Suite 600, Washington, D.C. 20045 or visit www.aceee.org.