ACEEE Urges Congress to Sustain and Improve Efficiency Gains in Senate Energy Bill

June 14, 2005


WASHINGTON, D.C. — On the eve of floor debate, the American Council for an Energy-Efficient Economy (ACEEE) urged Congress to uphold and improve the strong energy efficiency provisions in the Senate energy bill. ACEEE analysis shows that the Senate bill would more than double the energy savings contained in the House bill passed in April. However, key improvements could greatly increase energy savings, reduce energy prices for consumers, help the economy, and improve the nation's energy security.


"The Senate Energy Committee deserves credit for increasing the energy savings in this bill," said ACEEE's Executive Director Steven Nadel. "We hope the Finance Committee will match this effort with stronger tax incentives; we urge Senators to make the efficiency provisions even stronger on the floor and in conference, and also to reject any attempts to weaken provisions in the current bill."


While the Senate bill takes several steps forward from its 108th Congress counterpart, such as adding nine new appliance efficiency standards, the House bill is actually weaker on energy efficiency than its predecessor, according to ACEEE's analysis. The April House bill removed most energy efficiency tax incentives and also weakened a key efficiency standard on ceiling fans.


ACEEE estimates that the Senate Energy Committee bill will reduce U.S. energy use by about 2.4% in 2020 compared to baseline forecasts by the U.S. Energy Information Administration. The bill will also reduce natural gas use in 2020 by about 1.1 trillion cubic feet, equivalent to current annual consumption by New York State. And the bill will reduce peak electric demand in 2020 by about 50,000 MW, equivalent to the capacity of 170 power plants (300 MW each).


The largest nominal savings in the bill come from a provision directing the federal government to develop policies to reduce U.S. oil use by 1 million barrels per day in 2015, which is equivalent to two-thirds of current oil imports from Saudi Arabia. However, this provision was rejected in conference by the House in 2003. Even if Congress adopts it, this provision contains no enforcement mechanism, and the estimated savings of 0.6 million barrels per day in 2020 may be optimistic. To address this problem, ACEEE recommends that the legislation be strengthened to require preparation of an action plan and regulations to meet the goal, plus monitoring of progress and provisions for updating the plan to ensure that the target is more likely to be met.


Aside from the oil-savings provision, the largest savings in the Senate bill come from new consensus energy efficiency standards established for 15 products, nine more than the 2003 bill. The product efficiency standards were negotiated by product manufacturers, ACEEE, and other efficiency supporters over the past four years. Many of these standards are based on laws already adopted in Arizona, California, Connecticut, Maryland, and Washington.


Energy savings from the Senate bill are likely to significantly increase when the Senate Finance Committee develops the tax incentives sections for the bill (Finance Committee action is tentatively scheduled for June). If the Senate Finance provisions resemble those in the 2003 conference energy bill, they would increase the energy savings achieved in 2020 by about 30%.


Beyond the improvements currently in the Senate energy bill, ACEEE's analysis finds that four additional efficiency provisions would increase energy savings fourfold:


  • Enforcing the 1 million barrel per day oil-saving provision;

  • Tax credits for home heating, air conditioning, and hot water equipment similar to provisions passed by the Senate in 2002, 2003, and 2004;

  • Making state-level electricity and gas savings targets and distributed generation interconnection standards mandatory instead of voluntary; and

  • Appropriating sufficient funds for many of the provisions authorized by the Senate bill but not yet funded.


ACEEE's analysis of the energy efficiency provisions in the Senate Energy Bill, along with comparisons to the House Energy Bill (HR-6) and last Congress's Energy Bill can be found at http://aceee.org/energy/legsttus.htm.