Administration Proposes Deep Cuts in Critical Energy Efficiency Programs; Cuts Will Exacerbate Energy Crisis, Public Interest Group Says

April 9, 2001

Media Contact(s):

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

WASHINGTON, D.C. — President Bush has stated that the nation is facing an energy crisis as evidenced by the power shortages in California, overloaded power plants and transmission lines in many regions, and skyrocketing heating bills compared to those last winter. Yet the Bush Administration is now proposing deep cuts in most federal energy efficiency programs. The Fiscal Year 2002 budget request for the Department of Energy includes a $277 million or 27% cut in funding for energy efficiency and renewable energy R&D and technology deployment programs (apart from grants to low-income households for home weatherization). Some energy efficiency and renewable energy programs are cut by 50% or more.

"Cutting federal energy efficiency programs will reduce the reliability of our power system, increase our oil imports, and put upward pressure on oil and natural gas prices in the future. This is an absurd energy policy," said Howard Geller, former Executive Director of the American Council for an Energy-Efficient Economy (ACEEE). The Bush Administration should expand these important programs, not cut them, given the serious energy challenges our nation now faces."

"The Department of Energy has an excellent track record of developing and helping to deploy energy-efficient appliances, building designs, lighting and window 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 an additional $25 billion and eliminate the need for dozens of new power plants, assuming the Bush Administration does not roll back these cost-effective standards.

Funding for DOE's energy efficiency and renewable energy R&D and technology deployment programs, excluding grants for low-income households, equaled $1.04 billion in FY2001. Funding for these areas would decline to $759 million in FY2002 if the President's request is followed. President Bush has proposed increasing funding for weatherization of low-income households by $120 million, but this is the only energy efficiency program the President has proposed increasing.

If the 27% cut for FY2002 goes through, it would:

  • Slow down the development of next generation, superefficient appliances, heating and cooling systems, building designs, and lighting products;
  • Reduce efforts to educate consumers about energy-efficient appliances, lighting measures, and other energy savings options in homes and businesses;
  • Limit funding for partnerships aimed at developing cleaner, more efficient ways of making steel, aluminum, chemicals, glass, and other energy-intensive products;
  • Cut technical assistance DOE provides to small and medium-size industries on improving energy efficiency;
  • Slow down the development of improved and lower cost solar energy, windpower, and geothermal energy technologies;
  • Hamper efforts to cut energy waste in federal buildings; 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. The same groups also have called for an increase in funding for the energy efficiency and pollution prevention programs operated by the Environmental Protection Agency, such as the Energy Star labeling program.

"These increases are essential for addressing the economic, environmental, and national security threats caused by rising energy demand. Increasing our energy efficiency efforts also is necessary if the Bush Administration wants to have a balanced national energy policy," Geller added, noting that President Bush has called for a variety of actions aimed at increasing oil, coal, and nuclear energy supplies.