Federal Energy Policy Update

In June, the U.S. Senate spent several days debating climate change legislation. The debate was nominally on the Lieberman-Warner bill that would establish a federal cap and trade program for greenhouse gas emissions beginning in 2012, with the caps gradually ramping down to 80% below 1990 emissions by 2050. Many of the emission allowances would be auctioned off, and the proceeds would fund a variety of programs, including energy efficiency. ACEEE worked with other groups to help influence the discussion on energy efficiency provisions, including work with Senators Feinstein (D-CA), Snowe (R-ME), and Collins (R-ME) on an amendment to improve the energy efficiency provisions in the bill.

ACEEE’s analyses show that energy efficiency can be a key strategy for reducing the costs of addressing climate change. See:

Fact Sheet on Energy Efficiency and Climate Change Policy

Positive Returns: State Energy-Efficiency Analyses Can Inform U.S. Energy Policy Assessments. Read the Press Release.

Testimony of John A. "Skip" Laitner before the Joint Economic Committee hearing on the
Oil Bubble or New Reality: How Will Skyrocketing Oil Prices Affect the U.S. Economy?

Ultimately the “debate” was more political posturing than substance. The debate ended when supporters failed to reach the 60 votes needed to close out debate (“cloture,” a requirement for all controversial legislation). A majority supported cloture, but of these, 10 expressed reservations with the specifics of the bill. Debate in the Senate will resume next year. Meanwhile, the Energy and Commerce Committee of the House of Representatives is hoping to develop a bill later this year, although any votes in the House are unlikely until next year.

The other major federal energy initiative is extension of federal tax incentives for energy efficiency and renewable energy. The provisions have bipartisan support and have passed both the House and Senate several times. However, no bill has become law due to disagreements about whether and how to pay for the tax incentives (the House is insisting that the tax incentives be paid for with other taxes, but more than 40 Senators are equally insistent that no taxes be increased to pay for the tax incentives; they would rather add the tax incentives to the deficit. Since major legislation requires 60 votes in the Senate, there is a stalemate. There are some discussions about splitting the difference, but nothing concrete has yet emerged. 

Finally, the House of Representatives Appropriations Committee began work on the DOE and EPA budgets for Fiscal Year 2009. The Subcommittees passed increases in energy efficiency budgets totaling about $800 million above 2008 appropriations. Major increases went to new programs authorized in the Energy Independence and Security Act of 2007 including $295 million for state and local energy block grants, $180 million for a program to assist vehicle manufacturers to develop and produce advanced vehicles and $20 million for a new commercial buildings initiative. Several existing programs also received major increases including an additional $38 million for industrial efficiency programs (reversing cuts made in recent years), $23 million for the low-income weatherization program, $15 million for increases in funding for building codes, and $10 million more for Energy Star (some at EPA, some at DOE). However, due to partisan bickering, the full committee did not vote on this bill and is unlikely to reach a final vote.  Instead, Congress is likely to group many appropriation requests into several continuing resolutions, including at least one before the November election, and one early in 2009.  Hopefully, the Subcommittees bill will be incorporated in the final continuing resolution.