House Punts on Efficiency, Senate Looking Better

Blog Post | May 15, 2005 - 8:00 pm
By Wendy Koch, Senior Director, Marketing & Communications

In April, the U.S. House of Representatives passed a comprehensive energy bill that does relatively little to promote energy efficiency. According to ACEEE's analysis, this bill will produce only about 57% of the energy savings of the bill passed by the House last year. The reduction in energy savings is primarily due to the fact that tax incentives for efficient new homes, commercial buildings, appliances, and combined heat and power (CHP) plants included in last year's bill were dropped this year. Savings were also lost because the House gutted a provision in last year's bill calling on DOE to set efficiency standards for ceiling fans. However, the House bill will produce some savings, primarily from new efficiency standards on half a dozen products, tax incentives for upgrades to existing homes, an expansion of daylight savings time, and R&D efforts and direction to redesign the appliance "Energy Guide" label.

The Senate energy bill is looking better, with markup scheduled to begin May 17. The Senate is likely to add half a dozen additional consensus efficiency standards to the House bill that ACEEE helped negotiate. The Senate is also likely to add back in many, if not all, of the efficiency tax incentives dropped by the House. In addition, a number of other modest energy efficiency provisions are likely to be included. Still, the Senate bill will not do much to improve passenger vehicle fuel economy, nor will it likely do much to encourage utilities and states to fortify their energy efficiency programs, two important steps ACEEE has called for.

The just-released ACEEE report, A Choice of Two Paths: Energy Savings from Pending Federal Energy Legislation analyzes energy savings from several pending legislative proposals, and also discusses an enhanced bill that would do even more to promote energy savings. We conclude that over the 2006-2020 period, the House bill will reduce U.S. energy use by 9 quads (quadrillion Btu's) on a cumulative basis, about a 0.5% reduction in U.S. energy use over this period. Bills that the Senate is drawing from will save from 16-43 quads over the same period, while an enhanced bill will save 104 quads (i.e., energy savings about 10 times greater than the House-passed bill).