Washington, D.C. — Energy efficiency was identified as a key component in a balanced strategy to respond to natural gas market price concerns in the recommendations offered in the report by the Speaker's Task Force for Affordable Natural Gas released this morning by Speaker of the House Dennis Hastert. These recommendations parallel the remarks offered by Secretary of Energy Spencer Abraham at last week's release of the National Petroleum Council's Balancing Natural Gas Policy – Fueling the Demands of a Growing Economy. ACEEE is pleased to see these policy leaders acknowledge the important role that energy efficiency must play in addressing current natural gas market supply and demand imbalances.
Unfortunately, both reports are short on details about what policies should be implemented if the potential for energy efficiency is to be realized. "For the near term—the next two to three years—moderating energy demand is the most realistic and effective approach to balancing natural gas markets," said ACEEE Deputy Director Bill Prindle. ACEEE has released several analyses recently that show substantial energy efficiency opportunities are available in the next year.
ACEEE recommends the following near-term policy actions:
- Supplement current efficiency-deployment programs. Congress must pass a supplemental appropriation for federal programs that deliver energy savings, including the ENERGY STAR® programs and support for state-based efforts.
- Conduct a national efficiency and conservation campaign. The U.S. Department of Energy (USDOE) should lead a partnership effort among efficiency product manufacturers, utilities, states, and others to accelerate efficiency investments and encourage short-term behavior modifications. California used this approach with great success in responding to its 2001 crisis.
Recommendations for longer-term action include:
- Accelerate federal efficiency standards and encourage adoption of efficiency standards by states.
- Expand incentives for high-efficiency technologies. Congress should increase incentives for gas-saving technologies in the energy bill currently in conference.
- Expand support for combined heat and power (CHP). Congress should expand support for CHP not only by improving proposed CHP tax credits, but also by encouraging states and utilities to provide fair and reasonable interconnection and tariff treatment for new CHP systems.
- Expand research and development. DOE's budgets for advanced technologies that save gas in the residential, commercial, industrial, and power sectors should be increased.
- Create public benefits funds for efficiency. Congress should include a public benefits fund for energy efficiency and other clean energy initiatives in the current energy bills. While originally aimed at electricity savings, the fund would be equally applicable to natural gas utilities and their customers.
- Create efficiency performance standards for utilities. Congress should follow Texas' example and require utilities to offset a portion of demand growth through energy efficiency.
"Increasing investments in policies and programs like these can significantly reduce natural gas prices over the next year," stated Neal Elliott, co-author of the recent report Impacts of Energy Efficiency and Renewable Energy on Natural Gas Markets. The report shows that wholesale natural gas prices can be reduced by almost 20% over the next year by energy efficiency measures, and save the average residential gas consumer $96 per year over the next five years. The study and other material on energy efficiency and natural gas markets are available at: http://aceee.org/energy/natlgas.htm.