Energy Efficiency in the American Clean Energy and Security Act of 2009: Impacts of Current Provisions and Opportunities to Enhance the Legislation

Research Report E096

Author(s)

Rachel Gold, Laura Furrey, Steve Nadel, John A. "Skip" Laitner, and R. Neal Elliott

Description:

In June 2009, the House of Representatives passed the American Clean Energy and Security Act of 2009 (ACES). This climate and energy legislation included a number of provisions intended to help the U.S. reduce energy use through various energy efficiency measures. Foremost, the bill requires utilities to obtain 20% of their energy through a combination of renewable energy and energy efficiency by 2020, with energy efficiency allowed to meet up to 8% of the 20% goal. Other energy efficiency provisions are designed to improve energy savings associated with improved building codes and retrofits, and appliance standards. The bill also facilitates energy savings within the transportation and industrial sectors. Additionally, the cap and trade provisions of the bill dictate how carbon allowances will be apportioned.

These energy efficiency provisions have largely been overlooked in recent discussions and analyses of ACES. When analyses ignore the readily available benefits from energy efficiency they distort how energy and climate legislation, such as ACES, could affect American consumers and the U.S. economy. Experience in the states that have energy efficiency programs demonstrates that efficiency is the quickest and most effective way to reduce energy usage and address climate change. This analysis evaluates the energy efficiency provisions in ACES and finds that, in 2030, such provisions can:

  • save American consumers an average of $486 per household;
  • create over 600,000 jobs;
  • reduce carbon dioxide emissions by over 500 million metric tons (MMT); and
  • avoid the need for 419 medium-sized coal-fired power plants.

This analysis also demonstrates that improving the energy efficiency provisions in ACES by including a stand-alone energy efficiency resource standard (EERS) requiring 10% cumulative savings by 2020 (instead of the ACES Combined Efficiency and Renewable Electricity Standard, or CERES), directing one-third of electric local distribution company allowances to energy efficiency, and sustaining State Energy and Environmental Development funding at 9.5% of allowance revenue through 2030 provides significant additional consumer savings and carbon reductions and creates more jobs than the original bill. As the Senate begins to consider climate and energy legislation, it has the opportunity to incorporate these suggested improvements. This analysis estimates that, by 2030, including these improvements can:

  • save American consumers an average of $832 per household;
  • create over 1 million jobs;
  • reduce carbon dioxide emissions by over 900 MMT; and
  • avoid the need for 512 medium-sized coal-fired power plants.

This report discusses these national-level impacts, breaks them down on a state-by-state basis, and describes the methodology for how these values were determined.

To learn more about the impacts of ACES on each of the 50 states, see Strong Energy Efficiency Policies Under Consideration by Congress.