Administration Considering Cutting Energy Efficiency R&D and Deployment Programs in FY2002

February 15, 2001

Media Contact(s):

Wendy Koch, 202-507-4753, Senior Director, Marketing & Communications

Washington, D.C. — Consumers and businesses throughout the nation are facing heating bills two or three times higher than those last winter. California is facing an electricity reliability crisis that could cripple the state economy. Power plants, transmission lines, and natural gas pipelines are stretched to their limit in many states. And U.S. oil imports surged to around $120 billion last year, nearly $440 of imported oil for every American. Is this the time to scale back national energy efficiency programs?

Apparently the Bush Administration (or elements of it) thinks so. According to the Office of Management and Budget (OMB), the Department of Energy has been sent guidance concerning the Fiscal Year 2002 budget calling for a 7% cut in energy efficiency and renewable energy R&D and technology deployment programs (apart from grants to low-income households for home weatherization). The Administration is now preparing its FY2002 budget request which it plans to send to the Congress on April 3.

"Federal energy efficiency programs help to develop and disseminate technologies that consumers and businesses use to control their energy bills and keep the lights from going out. The Bush Administration should expand these important programs, not cut them, especially considering the severe energy challenges our nation now faces," said Howard Geller, former Executive Director of the American Council for an Energy-Efficient Economy (ACEEE).

"The Department of Energy has an excellent track record in working with the private sector to develop and commercialize new energy efficiency technologies including energy-efficient window designs, new lighting technologies, industrial process improvements, and improved engines and turbines," Geller added. DOE recently documented that 20 of its most successful energy efficiency and renewable energy activities have already saved consumers and businesses around $30 billion. In addition, appliance efficiency standards recently issued by DOE will save consumers additional tens of billions of dollars.

"Energy efficiency and pollution prevention programs operated by the Environmental Protection Agency, such as the Energy Star labeling and promotion programs, also should be expanded. These programs are leading to consumers and businesses cutting their energy bills by $75 for every dollar spent by EPA," Geller said.

Funding for DOE's R&D and technology deployment programs, excluding grants for low-income households and state energy offices, equaled $1.0 billion in funding in FY2001. If the 7% cut for FY2002 goes through, it would:

  • Limit programs to educate consumers about energy-efficient appliances, lighting options, and other energy savings options in homes and businesses;
  • Slow down efforts to develop next generation, superefficient cars, appliances, heating and cooling systems, windows, and lighting products;
  • Limit funding for partnerships aimed at developing cleaner, more efficient ways of making steel, aluminum, chemicals, paper and pulp, glass, and other energy-intensive products;
  • Cut technical assistance DOE provides to small and medium-size industries on improving energy efficiency;
  • Hamper efforts to develop improved and lower cost solar energy, windpower, bioenergy, and geothermal energy technologies; and
  • Slow down the adoption of additional appliance efficiency standards.

"Federal energy efficiency and renewable energy programs provide the technologies and tools that will help California to address its energy problems. These programs are vital to states and municipalities around the country, commented Arthur Rosenfeld, a member of the California Energy Commission. "It would be a tragedy to cut funding for these programs at this critical time," Rosenfeld added.

ACEEE along with other public interest groups are urging the Bush Administration and Congress to increase funding for DOE's energy efficiency programs by $170 million (20%) in FY2002. "This increase is justified based on the economic, environmental, and national security benefits these programs provide, even before considering the latest energy crises. The increase is also justified if the Bush Administration wants to have a balanced national energy policy," Geller added, noting that President Bush has proposed a variety of actions aimed at increasing conventional energy supplies.