Energy Efficiency Legislation May Get Second Wind in Wake of Election

November 8, 2006

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

WASHINGTON, D.C. — The results of yesterday's election will increase the chances of new energy legislation in 2007, predicts the American Council for an Energy-Efficient Economy (ACEEE), a Washington D.C.-based energy think tank. "The new House leadership will advance energy policies that did not get airtime in the last Congress, and some of these have shown support in the Senate. We could therefore see progress on key energy efficiency issues that have not moved in the past," said ACEEE Executive Director Steven Nadel.

According to ACEEE, many of the newly elected Senators and Representatives ran on a platform that included expanded use of alternative energy and energy efficiency. They will now want to deliver on these platforms. On the other hand, with control of the Senate still undecided and narrow majorities in both chambers, there will be an increasing need for bipartisanship in order to pass legislation—"neither party can 'bulldoze' legislation through on their own," noted Nadel. Furthermore, ACEEE noted that many energy issues, such as energy efficiency, are not especially partisan, and while there are some differences in degree and approach between the parties, there is broad agreement that the country should increase use of cost-effective energy efficiency and renewable energy resources. "We are cautiously optimistic that there are some important legislative provisions that a bipartisan majority can agree on," noted Nadel.

Among the efficiency-related items that ACEEE thinks could move forward next year are the following:

  1. A "Renewable Energy Portfolio Standard" and an "Energy-Efficiency Resource Standard": Both are gradually growing targets that utilities must meet, with one focusing on renewable energy and the other on energy savings from utility-operated or utility-sanctioned programs. Renewable Portfolio Standards passed the Senate in 2003 and 2005 and Efficiency Standards have been introduced by several Representatives and Senators. There may also be opportunities to enhance support by combining these two policies.
  2. Extensions to energy efficiency tax incentives enacted in 2005: Most of these provisions expire at the end of 2007 and prospects for extension are good. These provisions include incentives for high-efficiency homes, commercial buildings, appliances, and heating and cooling equipment.
  3. Oil savings targets: There is broad agreement that the U.S. should improve the efficiency of cars, trucks, and other oil-consuming equipment but disagreement on which policies are best. To address this logjam, a bipartisan group of Senators and Representatives have drafted legislation establishing steadily growing oil targets, and directing the present and future administrations to develop and implement plans for meeting these targets, with regular reporting to Congress and revisions to plans if actual savings are not on track to meet the targets.
  4. Consensus appliance and equipment efficiency standards: ACEEE has negotiated several consensus agreements with equipment manufacturers on specific energy efficiency requirements for their products. And negotiations on additional products are underway. The Energy Policy Act of 2006 included 16 such standards, and several more will be ready for enactment in 2007, noted ACEEE.
  5. Expanded energy title in the 2007 Farm Bill, including increased funding for the Section 9006 energy efficiency and renewable energy grant and loan program, and mandated funding for the Section 9005 farm and ranch audit program that has never been funded.

In addition to energy efficiency and renewable energy, ACEEE noted that other energy issues that are likely to receive attention in the new Congress are steps to increase development of offshore natural gas resources, and additional encouragement for advanced coal-fired power plants that can capture and store carbon dioxide so they do not contribute to global warming.

"With a contentious election behind us, now is a propitious time to move forward on energy efficiency and renewable energy provisions with bipartisan support," concluded Nadel.