Senator Alexander Takes Significant Step Forward But House Goes Backward and Forward on Energy-Efficiency

April 6, 2005

Media Contact(s):

R. Neal Elliott, 202-507-4009, Senior Director for Research

WASHINGTON, D.C. — Two significant congressional actions occurred today on federal energy legislation. First, Senator Lamar Alexander (R-TN) introduced a new energy bill focused on natural gas designed to reduce energy prices by cutting energy demand and increasing supplies. This bill includes energy efficiency provisions that greatly improve upon energy legislation passed by the Senate in recent years.

Second, the House Energy Committee continued work today to develop an energy bill to be presented on the House floor. In one of their first votes they gutted a provision calling for new efficiency standards on residential ceiling fans. After a lunch break, they then gave the U.S. Department of Energy a strong shove to speed up completion of efficiency standard updates called for under laws already on the books.

These events follow on the heals of Fed Chairman Greenspan's comments yesterday that indicated that oil and natural gas prices resulting from high consumer demands represent a threat to the economy. "ACEEE's past analysis has shown that small changes in energy demand resulting from energy efficiency can significantly reduce energy prices," said Steven Nadel, ACEEE's Executive Director. "A consensus has emerged among energy market experts that energy efficiency and conservation resources are our only near-term response to high energy prices, because supply solutions are several years away at best while efficiency is available today."

"The American Council for an Energy-Efficient Economy (ACEEE) commends Sen. Alexander for including significant energy efficiency provisions in his bill. Our assessment shows this bill is a significant step forward in energy efficiency policy," said Nadel. "We hope that other members of Congress will embrace these energy efficiency provisions as a new starting point for energy legislation – legislation that is badly needed to reduce the damage to our economy from today's high energy prices."

The House Energy and Commerce Committee is now engaged in a chaotic markup session. The Committee's first vote sets very weak standards on ceiling fans and prevents states from enforcing stronger standards that have been enacted or are pending in several states. This provision will be controversial with those states currently considering state standards. This amendment was pushed by Home Depot, and represents a reversal of a previous agreement they made to work jointly with ACEEE and others in support of much stronger standards. "Home Depot reversed its position without even the courtesy of a phone call; I hope they don't treat their customers this way," noted Nadel. "We're disappointed that the House Energy Committee used a section of the bill entitled 'Energy Efficiency' to take a step backward on efficiency," he continued.

The second amendment, which was introduced by Rep. Ed Markey (D-MA), allows states to set their own standards on products if DOE misses legislative deadlines to revise standards by more than three years. Currently DOE has missed more than a dozen such deadlines and this amendment, if ultimately enacted into law, will place strong pressure on them to try to quickly catch up.

In contrast to the chaotic situation in the House, the Senate appears to be proceeding in a more orderly and bipartisan fashion so far. While the Senate Energy and Natural Resource Committee has yet to take up legislation, Energy Sub-Committee Chair Lamar Alexander (R-TN), introduced two bills — the Natural Gas Price Reduction Act of 2005 and a companion tax incentives bill. The bill provides provisions focusing on encouraging more efficient use of natural gas, encouraging alternative energy resources such as hydrogen, biomass, and solar energy, and addresses domestic resource issues and natural gas infrastructure. While the energy efficiency provisions build on those in the 108th Congress' energy bill, they go significantly beyond previous bills by including a national education and public awareness initiative, much broader appliance standards provisions, expanded measures to encourage combined heat and power (CHP, also known as cogeneration), and encouragement of efficiency improvements at power plants. In his remarks this morning, the Senator pointed out the importance of electric efficiency and conservation, because of the increasing role natural gas plays in U.S. Power Generation.

"Based on ACEEE's preliminary analysis of the bill, these changes can more than double both natural gas and total energy savings compared to last year's energy bill," said Dr. Neal Elliott, ACEEE's Industrial Program Director. "In particular, the expanded appliance standards provisions would save more than twice the natural gas and overall energy that would result from H.R.6. In addition, Sen. Alexander's 4-year public awareness and education provision would save more than 500 billion cubic feet of natural gas and reduce U.S. energy use by about 1% if it is fully funded." ACEEE will release a more detail analysis of the energy efficiency aspects of this bill next week as a part of a new report that assesses what can be done with national energy efficiency legislation.

"Given the events of the day, we're looking to Senator Alexander and a bipartisan group of Senate centrists to ultimately produce a reasonable energy bill, one that will truly address our country's many energy problems," concluded Nadel.