2012 Legislative Outlook: Pathways Toward Industrial Energy Efficiency

As energy efficiency is increasingly viewed as a cost-effective and bipartisan energy strategy, the possibility of congressional action promoting energy efficiency has emerged with the introduction of legislation in the House that complements an existing bill in the Senate. This, in lockstep with clear signals from the White House that energy efficiency remains a national priority, positions energy efficiency as a centerpiece of the United States’ continued economic recovery.

Current Energy Efficiency Legislation

Energy Savings and Industrial Competitiveness Act of 2011 (ESICA)

The Shaheen-Portman legislation, known as the Energy Savings and Industrial Competitiveness Act of 2011 (ESICA) [full text of the bill as amended, Alliance summary] is the broadest and more aggressive of the two complementary bills. Introduced by Sen. Jeanne Shaheen (D-N.H.) and Sen. Rob Portman (R-Ohio), it includes the establishment of up to ten Centers of Excellence among the existing Industrial Assessment Centers (IACs).  The Centers of Excellence would act, in part, as a regional coordinator of the IACs, as well as other relevant state, federal and non-governmental agencies, organizations, and programs. One person at each IAC Center of Excellence would be dedicated to this coordination. IACs, which have conducted over 15,000 assessments, have served as a valuable resource for small to medium manufacturers, and with increased coordination of expertise at the centers, their capabilities are likely to evolve.

ESICA also directs appropriations toward lenders to offset part of the costs of revolving loan programs that focus on the reduction of energy intensity at industrial plants. Further, the bill requires the Department of Energy (DOE) to establish a type of industrial efficiency inventory of available, cost-effective but not broadly implemented technologies for energy intensive industries. ESICA makes other advancements as well including requiring a study on code procedures that incorporate lifetime performance calculations, increasing federal energy management through, in part, the tracking and publication of energy use at federal agencies, and establishing a Supply Star program, à la ENERGY STAR, recognizing energy-efficient supply chains. 

The Smart Energy Act

Another bill, recently introduced by Reps. Charles Bass (R-N.H.) and Jim Matheson (D-Utah) in the House, titled The Smart Energy Act [full text of the introduced bill, ASE summary] provides complementary measures to its Senate counterpart while being narrower in scope. For industrial energy use, the legislation singles out Combined Heat and Power (CHP) as an opportunity for intense growth, calling for a two-fold increase in electricity generated from CHP, to 170 Gigawatts by 2020, and for DOE to develop a strategic plan to achieve this goal.

Further, the bill directs DOE to establish intra-departmental collaborative research and development partnerships to promote energy efficiency technology development and commercialization, reduce industrial waste, and increase cost-competitiveness. Also, to promote building efficiency, The Smart Energy Act expands DOE’s loan guarantee program for energy efficient building upgrades.

Energy and Water Integration Act

Finally, Sen. Jeff Bingaman (D-N.M.) introduced the Energy and Water Integration Act of 2011 [full text of the introduced bill], which primarily directs DOE to undertake or oversee various studies and research regarding the intersection of water consumption and energy use including a study of water use at power plants and the ratio of water consumed to electricity produced, a water reclamation and energy use study, desalination research, and a study on energy use associated with water usage across various sectors.

The bill also initiates a program to provide technical assistance to rural water and wastewater utilities for, in part, improving energy efficiency and water conservation.  A grant program is also initiated through the bill for demonstration projects of deployed technologies that reduce energy usage through water conservation and energy efficiency.

Outlook

A combination of increased appropriations in the FY 2013 budget for DOE’s Advanced Manufacturing Office along with the passage of energy efficiency legislation have the potential of greatly advancing energy efficiency in the United States. The adoption of underutilized technologies, such as combined heat and power, an expansion of energy assessments, and increased access to capital for energy efficiency projects can also function to ease demand if the new EPA Cross-State Air Pollution Rule (currently stayed pending judicial review) moves into effect pushing older model, coal-fired power plants offline. Appropriately tailored legislation can be a catalyst for future innovation and advancements in industrial energy efficiency, while promoting stability in energy prices, limiting pollution, and improving competitiveness.

Alliance Industrial Intern Jacob Johnston was a major contributor to this article.