Weak House Bill Moves Backwards on Energy Savings: ACEEE Report Highlights the Efficiency Gap

April 14, 2005

Washington, D.C. — Congress began markups on major energy legislation this week in the face of high energy prices threatening the economy and rising oil imports threatening U.S. energy security. According to analysis by the American Council for an Energy-Efficient Economy (ACEEE) in a report released today, Senator Alexander's energy bill (S. 726) would save more than twice the energy as the 2003 conference bill (H.R. 6). H.R. 6 energy savings have been cut even further by committee markups this week, roughly in half relative to ACEEE's original analysis. Although Alexander's bill also sets a reasonable oil savings goal of 1.75 million barrels per day, an enhanced bill proposed by ACEEE that combines the best features of both bills and adds several key efficiency provisions would more than double the savings of S.726 and save more than five times the energy as H.R. 6. The ACEEE report, A Choice of Two Paths: Energy Savings from Pending Federal Energy Legislation, can be downloaded for free.

"Congress needs to do a lot better on efficiency in order to bring down today's high energy prices and make a real dent in oil imports," said ACEEE Executive Director Steven Nadel. "H.R. 6 contained some helpful efficiency provisions, but the House has cut them deeply. What is left is totally inadequate to meet today's threats to our economy and our energy security."

The ACEEE study undertook a detailed analysis of the energy efficiency provisions of H.R.6 as voted out of the energy bill conference in 2003 and of Senator Alexander's S.726, introduced earlier this month. ACEEE also proposed an enhanced legislative package that would combine the best energy-saving provisions of both bills and add several new efficiency provisions. The new provisions include: (1) a national Energy Efficiency Resource Standard (EERS) that sets energy-saving targets for utilities; (2) specific implementation provisions for S. 726's oil savings target of 1.75 million barrels per day; and (3) an aggressive (and well-funded) public information campaign (S.726 authorizes but does not directly fund such a campaign).

The national annual energy savings impacts of the three legislative packages are shown in the graph below. The graph shows that in 2010, H.R. 6 would save less than 1 Quad of energy for the nation, compared to 2 Quads for S. 726 and 5 Quads for an enhanced bill. In 2020, H.R. 6 would save about 2 Quads, compared with 4.5 Quads for S. 726 and almost 10 Quads for the enhanced bill. (Note: one Quad equals one Quadrillion, or 1015, Btu. The United States is projected to use 111 Quads in 2010 and 126 Quads in 2020. The nation consumed 100 Quads in 2004. Source: U.S. Energy Information Administration: Annual Energy Outlook 2005.)

Note: A "Quad" is one quadrillion (1015) Btu. Total U.S. energy use is projected to be 111 Quads in 2010 and 126 Quads in 2020 (Source: Energy Information Administration. Annual Energy Outlook 2005)

In the House, this week's Energy and Commerce Committee markup eliminated effective ceiling fan standards, while the Ways and Means Committee markup eliminated tax incentives for appliances, new homes, commercial buildings, combined heat and power (CHP, or cogeneration), and hybrid vehicles, taking away most of the energy savings from efficient technologies.

"Energy efficiency is our only real choice to reduce high energy prices in the next five years," said Neal Elliott, ACEEE Industry Program Director. "Our gas markets analysis shows that the enhanced package is needed to take pressure off our fossil fuel markets." Another recent ACEEE study showed that this kind of aggressive efficiency policy action could reduce wholesale natural gas prices by more than 25% by 2010 and put more than $100 billion back into the economy. This report and other natural gas analysis can be viewed at http://aceee.org/energy/efnatgas-study.htm.

For more information, contact ACEEE Publications, 529 14th St, N.W., Suite 600, Washington, D.C. 20045, phone: 202-507-4000, fax: 202-429-2248, e-mail: aceee_publications@aceee.org.