Alliance Staff and Associates Participate in Hearings on the Hill

This  week the House Energy and Commerce Committee is holding a marathon set of  hearings on the discussion draft of the American Clean Energy and Security  (ACES) Act of 2009, which was introduced by Committee Chairmen Henry Waxman  (D-Calif.) and Edward Markey (D-Ma.) on March 31. The hearings are a chance for  members to learn more about the ACES Act, a sweeping piece of legislation that  places a cap on carbon emissions and implements a variety of complementary  energy policies in one bill. On Tuesday the committee members gave their  opening statements; the remainder of the week is devoted to witness testimony,  with three panels per day addressing various aspects of the bill.

The  first day of the hearings offered a glimpse of the shape of the climate change  debate that will take place over the next month. Members who support ACES  touted the need for immediate action to curb the climate crisis that lies  before us, while opponents focused on the loss of jobs and increased energy  costs that many believe will result from climate change legislation. However,  the key to this debate lies in the hands of the few representatives who are on  the fence about a carbon cap-and-trade program. The largest concern among this  important demographic was to balance the need to reduce greenhouse gas  emissions with the need to keep America’s economy globally competitive, and the  need to ensure that American consumers were not unduly burdened by increasing  energy prices.

On  the second day, the hearing was divided into three panels that addressed the  administration's views of the bill; the position of the U.S. Climate Action  Partnership (U.S. CAP); and the bill’s green jobs and economic benefits.  Witnesses included several Obama Administration officials (Secretary of Energy  Stephen Chu, Secretary of the Environment Lisa Jackson, and Secretary of  Transportation Ray LaHood), and Alliance Associates including Board Co-Chair  Jim Rogers of Duke Energy, and Board Members Frances Bieneke of the Natural  Resources Defense Council and David Manning of National Grid. 

Again,  the greatest concerns that members expressed regarded the carbon cap-and-trade  program that ACES proposes: many questioned the effect that the legislation  could have on domestic energy prices and on the global competitiveness of  American industry. Despite this uncertainty, there was consensus from witnesses  and members alike that energy efficiency would be an essential component of any  climate change legislation. Several witnesses discussed their successes in  implementing energy-efficient technologies to preserve and create jobs while  reducing their costs. 

When  Rep. McNerty (D-Calif.) asked the U.S. CAP panel if energy efficiency could  come out ahead of the cost curve set by climate change legislation, thereby  reducing customer bills despite per-unit increases in the price of energy, the  panelists agreed that they had experience with energy efficiency as a viable  cost-containment mechanism. Rep. Sarbanes (D-Md.) voiced his concern that the  promise of energy efficiency to control the costs of a cap-and-trade program  seemed like an elusive “leap of faith”, and advocated for incentives, programs  and partnerships that would ensure these programs are deployed as quickly as  possible. In response, Jim Rogers assured him that utilities across the country  have adopted effective energy efficiency programs and that these programs will  in fact see increased efficiency gains, with the correct alignment of utility  incentives and a carbon price that assures long-term stability in the  electricity market.
 
Several  members expressed concern with the renewable electricity standard (RES)  provision of the ACES Act, questioning the rationale for its exclusion of  nuclear, hydroelectric and some biomass energy sources. In response, Secretary  Chu emphasized the importance of energy efficiency in the RES, saying that this  would increase the viability of such a measure. 

The  House Hearing on Interior Appropriations 

Alliance  President Kateri Callahan testified this Thursday morning before the House  Appropriations Subcommittee on Interior, Environment and Related Agencies in  support of an increase in the FY 2010 appropriations for the U.S. Environmental Protection Agency's ENERGY STAR Program from $50 million to $100 million. In her testimony, Kateri  characterized the ENERGY STAR Program as one of the most successful voluntary  partnership programs ever undertaken by the U.S. government. She told the  subcommittee that putting more money into ENERGY STAR is a proven way to pump  money quickly into the economy, as every federal dollar invested in ENERGY STAR  results in $75 in avoided energy costs. Kateri cited statistics from 2007  demonstrating that the ENERGY STAR Program saves $16 billion in energy bills  annually and reduces emissions equivalent to taking 27 million cars off the  road. Last year, she testified, consumers purchased $500 million of ENERGY  STAR-labeled products. An expansion of ENERGY STAR, Kateri told the  subcommittee, will enable more products to be brought into the program and  substantially increase the program’s energy savings. 

The  Senate Hearing on the Save American Energy Act 

On  the other side of Capitol Hill this Wednesday, the Senate Energy and Natural  Resources Committee held a hearing on the “Save American Energy Act” (S. 548),  which was introduced by Senator Charles Schumer (D-N.Y.) on March 9 for the  purpose of establishing a federal energy efficiency resource standard (EERS).  Chairman Bingaman (D-Ark.) led the hearing and was joined by Senators Menendez  (D-N.J.) and Cantwell (D-Wash.). The panel of witnesses testifying included  Paul Centolella of the Public Utilities Commission of Ohio; Patricia Hoffman of  the Department of Energy's Office of Energy (now known as the Office of  Electricity Delivery and Energy Reliability) and Senator Schumer. Several  representatives from our own Alliance Associate organizations also testified,  including David Manning of National Grid; Steve Nadel of the American Council  for an Energy Efficient Economy; Thomas Skains of the American Gas Association;  and Rich Wells of Dow Chemical Company.
 
Many  of the witnesses highlighted the various benefits of a federal EERS program,  including its cost-effectiveness and the projections for job creation,  emissions reductions and energy bill savings for consumers. In particular,  Manning and Nadel highlighted the achievability of an EERS program, and Wells  noted that a federal EERS is “essential” if the United States is to pass and  implement climate change legislation.

Several  concerns were raised during the hearing regarding the challenges of developing  evaluation, measurement and verification protocols, the role of states in  defining reductions targets, the inclusion of requirements for natural gas  utilities and the definition and treatment of early actors (utilities that have  already pursued energy efficiency initiatives).

Looking  Forward... 

As  the legislative priorities discussed at these hearings progress, the Alliance  will continue to keep our Associates informed. The House is planning to mark up  the ACES Act next week, and we will be following it closely.