The 100th Congress, The 2008 Election, And The Future of Energy Efficiency Policy

Clayton Crownover

Bradford Penney, JD

May 1, 2008

On December 19, 2007, President Bush signed H.R. 6, the Energy Independence and Security Act of 2007 (EISA), the most sweeping energy efficiency legislation that has been enacted in the last 30 years. EISA is projected to save consumers and businesses more than $400 billion from now through 2030 and reduce U.S. energy consumption by 7 percent in that year. Congress is to be applauded for its leadership and perseverance in bringing about the passage of this landmark legislation in less than a year’s time. With the enactment of EISA, the United States has now taken a major step toward a cleaner and more energy-efficient future, and made a significant down payment on the reduction of greenhouse gas emissions.

The new energy law, welcome as it is, is just the cornerstone—the first stone laid in building the foundation for an energy-independent future. There are a number of major omissions from the energy law, including extending energy efficiency tax incentives for commercial buildings, new homes, appliances, and energy efficiency improvements to existing homes. A provision increasing the effectiveness of energy building codes, which was included in the energy bill that passed the House of Representatives last year, was dropped from the legislation at the 11th hour. Other key provisions that were dropped from the bill at the last minute include the Renewable Electricity Standard.

Notwithstanding the provisions that were left out, EISA’s significance from an energy efficiency perspective cannot be overstated. Among the bill’s provisions are new and updated efficiency standards for clothes washers, dishwashers, dehumidifiers, boilers, motors, and incandescent reflector lamps, cutting an estimated 90 million tons of emissions. The phaseout of incandescent light bulbs, by itself, will help the United States realize a reduction of 100 million tons of carbon dioxide annually by 2030—equal to the elimination of 20 million cars. EISA also focuses on the level of government energy consumption, requiring new federal buildings and renovations to reduce fossil fuel consumption by 50 percent by 2010, while accelerating targets for energy use in existing and new federal buildings to reach a 30-percent reduction by 2015.

Other provisions in the new law include authorization of an initiative for development and deployment of Zero-Net-Energy Commercial Buildings Initiative (CBI) and new Corporate Average Fuel Economy (CAFE) standards. CBI’s goal is that all new commercial buildings will only use as much energy as they can produce or obtain from renewable sources by 2030. Commercial buildings currently represent about one-fifth of total energy consumed in the United States and are responsible for one-fifth of carbon dioxide emissions.

The new CAFE standards will require the National Highway Transportation Safety Administration to increase the average fleet fuel economy standard for cars, light trucks, and sport utility vehicles (SUVs) to 35 miles per gallon by 2020, saving consumers an average $22 billion in 2020, representing around $1,000 per year in fuel costs for an American family.

EISA represents Congress’ recognition of the importance of energy efficiency as the greatest resource in reducing carbon emissions; but the omissions from the new law leave a lot of work to be done this year in extending the tax incentives, as well as other “missing pieces” that would provide a comprehensive approach to U.S. energy problems.

The first target of opportunity in 2008 for extending the energy efficiency incentives was the economic stimulus package. The Alliance to Save Energy (ASE) supported the successful amendment by Senators Maria Cantwell (D-Washington) and Olympia Snowe (R-Maine) to add the efficiency incentives, along with extension of renewable energy tax credits, in the Senate Finance Committee’s consideration of the stimulus bill. When the package reported by the Finance Committee came to the Senate floor, it was immediately the subject of a filibuster. The ASE worked in concert with a diverse coalition of groups in support of the renewable energy and energy efficiency incentives, but the Senate failed to invoke cloture by one vote.

Now the ASE will work with the Senate Finance Committee, the House Ways and Means Committee, and a coalition of organizations supporting the incentives to identify another legislative vehicle for passing the extension provision this year. The Alliance was encouraged that the House of Representatives was planning to consider a Ways and Means Committee package of tax provisions as early as mid-February.

Another high priority for 2008 is enactment of the building energy codes provision that also was deleted at the 11th hour from the bill. The ASE already has engaged in strategy planning with senior congressional staff to get building energy codes enacted in 2008 or 2009. The ASE is working closely with congressional staff to identify the right vehicle for adding the codes language, and Alliance staff members are meeting directly with members of Congress to identify additional “champions” for this key energy savings President Bush’s State of the Union address described some lofty goals in energy policy, such as U.S. leadership in developing energy-efficient technologies and using energy efficiency to help stem greenhouse gases. Unfortunately, the president’s budget request did not provide the resources to match those goals. In fact, the budget submitted reduces funding for key energy efficiency and research and development programs, particularly those in the Office of Energy Efficiency and Renewable Energy (EERE) at the U.S. Department of Energy (DOE). The budget request calls for a reduction of almost 30 percent in EERE funding below the fiscal year (FY) 2008–appropriated level.

The Bush administration did propose gains in funding (approximately $15 million) for the DOE Building Technologies Program. The ASE was especially encouraged by the recommended increase in funding for building energy codes and by the administration’s statement of support for a 30-percent increase in residential building codes. The overall reduction in funding for EERE is a disappointment, however—especially the recommended zeroing out of funding for Low-Income Weatherization Assistance, the bulk of the reduction in EERE funding.

Lastly, but by no means least in importance, energy efficiency is critical to the debate on climate change legislation that is under way on Capitol Hill. The ASE will press actively for effective use of energy efficiency to reduce greenhouse gas emissions, including use of credit allocation or auction for efficiency programs and strong complementary energy efficiency policies. For example, the building energy codes language is contained in the Lieberman-Warner bill, S. 2191, and the Alliance hopes it also will be included in the climate change bill that will be introduced in the House by Energy and Commerce Chair John Dingell and Energy Subcommittee Chair Rick Boucher.

The recent downturn in the economy, the declining real estate market, and the leaping gasoline and home heating oil prices will provide a renewed sense of urgency to Congress to deal with energy issues in 2008. Nothing affects the American consumer more than energy prices, whether it is gas prices, home heating oil prices, or the price of goods and services dependent on petroleum. The typical American family is expected to face home energy costs averaging $2,200 in this calendar year. National energy policy is among the top issues facing Congress and the presidential candidates.

The Alliance to Save Energy anticipates a busy year in 2008—seeking to secure the extension of the tax incentives, enactment of legislation for tougher building energy codes, and strong funding for energy efficiency programs. All of this adds up to a full agenda in a year when the legislative calendar will be shortened by the election cycle, leaving more to accomplish over a shorter period of time. The ASE is and should be encouraged by the enactment of the new energy law, but the larger task ahead is a reminder that EISA was not the beginning of the end for energy legislation, but, as Winston Churchill once said (in another context), merely the “end of the beginning.”