Senate Takes Small Steps Towards Energy Efficiency

April 25, 2002


Washington, D.C. — The energy legislation approved today by the Senate takes several small steps to help Americans use energy more efficiently but fails to approve more significant measures to reduce U.S. oil consumption and cut energy costs, according to the American Council for an Energy-Efficient Economy.


"We welcome the tax incentives for new energy-efficient technologies and the efficiency standards for certain consumer and business products included in the bill," said Steven Nadel, Executive Director. "However, the fuel economy of new passenger vehicles is at its lowest point in more than two decades. As the Senate attempted to put fuel economy standards back in gear, the auto industry stomped on the brakes. The Senate not only failed to set meaningful standards, but it took a step backward by exempting pickup trucks from new standards and slanting the criteria for setting new standards in favor of the Big-3 automakers."


Nadel also criticized the Senate for voting for a small increase in air conditioner efficiency, rolling back a larger increase set by the Clinton Administration. He also found fault with the lack of any efficiency provision in the electricity title, noting that "the majority of states that have adopted electricity restructuring legislation have included provisions to encourage energy-saving programs, but regrettably the U.S. Senate chose to be among the laggers and not the leaders."


After the passage of the Senate bill, ACEEE released a new analysis (view it here) of the energy savings that will result from the Senate bill over the 2003–2020 period, concluding that the bill will reduce U.S. energy use over this period by about 1.6%. At current energy prices, these energy savings will reduce consumer and business energy bills by more than $300 billion cumulatively over this 18-year period. Tax credits will provide about 44% of the total energy savings and new efficiency standards about 37%. By 2020, ACEEE estimates that the electricity savings from the bill will reduce peak electric demand by the equivalent of about 335 typical new power plants (300 megawatts each). Oil savings are much more modest, amounting to less than 0.25% of projected U.S. oil use over the next 18 years.


Relative to a previous ACEEE analysis of the House-passed energy bill, the Senate bill will save nearly 40% more energy over the 2003–2020 period. Key improvements in the Senate bill are additional equipment efficiency standards, additional tax credits, and a program to encourage industrial facilities to make voluntary energy efficiency commitments. On the other hand, the House bill does not include some of the onerous hurdles for new passenger vehicle fuel economy that are in the Senate bill, instead letting the Department of Transportation set new standards based on existing law. The House bill does not include an electricity title, leaving this issue to be addressed in a conference between the House and the Senate.


"Overall," concluded Nadel, "the Senate bill avoids making difficult decisions, leaving the United States exposed to future energy crises. We fully expect Congress to again have to tackle energy issues later this decade."


View ACEEE's analysis of energy-efficiency savings from Senate energy bill — updated May 7, 2002