Senate Energy Bill: A Substantial Improvement Relative to the House Bill

June 24, 2005


WASHINGTON, D.C. — Last night the Senate completed amendments on comprehensive energy legislation. A final vote to approve the bill is scheduled for Tuesday morning. According to the American Council for an Energy-Efficient Economy (ACEEE), the bill would result in nearly three times as much energy savings as the bill passed by the U.S. House of Representatives in April. The Senate bill builds upon the House bill but includes much more extensive tax incentives for energy-efficient equipment and buildings, a more extensive list of new equipment efficiency standards, and several other additional energy-saving provisions. Following final Senate approval, the bill will go to a House-Senate Conference Committee to work out details between the two bills.


"We commend the Senate for making major improvements relative to the House-passed bill – the equipment efficiency standards and energy efficiency tax credit provisions are particularly notable," stated Steven Nadel, Executive Director of ACEEE. "However, both bills do very little to reduce U.S. oil use or to promote efficiency programs by electric and gas utilities. We hope these deficiencies will be addressed in conference; if they are not, it is likely Congress will need to return to energy legislation in the not very distant future."


ACEEE estimates that the Senate bill would reduce U.S. energy use by about 3.2% in 2020 compared to baseline forecasts by the U.S. Energy Information Administration. The bill would also reduce natural gas use in 2020 by about 1.8 trillion cubic feet, equivalent to the current annual combined consumption of New York State and New Jersey. Also, the bill would reduce peak electric demand in 2020 by about 70,000 MW, equivalent to the capacity of 230 power plants of 300 MW each. These savings are 2.9 times greater than the equivalent numbers for the House bill.


Due to the greater energy savings in the Senate bill, ACEEE recommends that the conferees accept the Senate efficiency title and the Senate efficiency tax incentives. However, the House bill does have a useful provision to extend daylight savings time by two months, which would reduce evening electricity use in these two months. ACEEE is also interested in exploring ways to increase support in the House for the Senate-passed Renewable Energy Portfolio Standard (RPS) by including energy efficiency in an expanded standard to increase flexibility while also including guarantees that at least a significant percentage of the energy comes from renewable resources.


"The Senate bill efficiency provisions are a useful 'down-payment' on addressing our nation's energy problems; much more needs to be done, but these provisions are a useful start," concluded Nadel.


A summary of the major energy efficiency provisions in both the House and Senate bills can be found on ACEEE's Web site at http://aceee.org/energy/0505aceanlys.htm.


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.