ACEEE Applauds Senate for Passing Energy Efficiency Provisions in Farm Bill

February 14, 2002

Media Contact(s):

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

WASHINGTON, D.C. — The American Council for an Energy-Efficient Economy (ACEEE) commends the U.S. Senate for passing the Energy Title in the Farm Bill on February 13, 2002. The title provides energy efficiency and renewable audits, loans, and grants to farmers. "We applaud the Senate for recognizing the need to address energy issues in this important sector of our economy, which has received far less attention than it deserves," said Steven Nadel, ACEEE's Executive Director.

In particular, ACEEE is pleased to see the inclusion of a well-designed and well-funded farm audit program aimed at encouraging the use of on-farm renewable energy systems and identifying energy efficiency opportunities. The 1.9 million farms in the United States paid more than $4.5 billion for energy in 1997 (the most recent year for which U.S. Department of Agriculture data are available), i.e., approximately 4 percent of total farm expenses. The bill's conservative assumption is that 10 to 30 percent of farmers' energy costs could be saved, resulting in $450 to $1,350 million in savings per year. "Senator Tom Harkin (D-IA) and his staff are to be commended for authoring these provisions and shepherding them though the Senate Agriculture, Nutrition, and Forestry Committee," noted Neal Elliott, ACEEE's Industrial Program Director, who worked with Harkin's staff on the development of the energy efficiency provisions.

"The proposed audit program doesn't take the one-size-fits-all strategy too often seen with government programs," said Elliott. "The program provides for a wide range of entities to compete for the program funds, and the applicants are allowed significant latitude in the design of their programs. This means that the audit can be tailored to meet the needs of a region's farmers and that the program can be delivered by entities that have pre-existing relationships with the farmers. This flexibility enhances the prospects that these program funds will achieve substantial energy savings."

Funding is provided in the bill to support upwards of 30,000 audits per year that could yield over $12 million in annual savings. While this number of audits will reach only about 2 percent of all farms, ACEEE hopes that state and regional initiatives will leverage these federal funds to reach an even larger share of our nation's farmers.

The loan and grant portion of the title will also be useful. Of note is that this portion is targeted at smaller farmers. This funding is particularly important to family farms that are capital constrained due to recent hard times in the agricultural markets. The $35 million grant pool could fund upwards of 40,000 grants, contributing annual total energy savings of over $14 million.

"While an energy title is not included in the House-passed Farm Bill, we hope that the bipartisan support that this title received in the Senate will lead House conferees to support inclusion of the energy title in the conference report," concluded Nadel.