An Historic Week for Energy Efficiency in the U.S. – A Report And Summary

This week will prove history-making in terms of federal action to drive energy efficiency throughout the American economy. In addition to the very important policies announced by the president to increase vehicle fuel economy and reduce tailpipe greenhouse gas emissions (and previously reported by the Alliance), today the House Energy & Commerce Committee is poised to report carbon "cap and trade" legislation that employs energy efficiency as a foundation for taking on global climate change. It appears that Chairman Waxman has the votes to report the American Clean Energy and Security Act of 2009 (“ACES”) bill out of Committee, although several of the Democrats who will be voting in favor of the bill have said they will seek additional changes in the bill on the House floor.

Our Policy Team has been heavily engaged in advocating for the critical energy efficiency provisions that are contained in the bill, and we have been tracking and analyzing the legislation as it has moved through the Energy & Commerce Committee. I am delighted to provide you this evening an analysis of key provisions relating to energy efficiency (200 kB PDF) that are contained in the bill. This comprehensive analysis was prepared by our policy team, under the direction of Alliance Senior Vice President Joe Loper. I am confident that the analysis will be helpful in interpreting the many complex provisions in this major bill. I am also pleased to announce tht we have compiled an ACES Resource Page on our web-site, containing not only our analysis but also a more detailed summary of the efficiency provisions in the bill and "hot links" to other advocacy and informational resources developed by our team and others.

The Alliance and many of our Associates and friends have commended the principal authors of ACES for the important framework they have put forward. This legislation, sponsored by Chairman Waxman and Alliance to Save Energy Congressional Vice Chair Ed Markey (D-MA), is in concert with the climate policy principles that were agreed to by the Alliance Board of Directors in April 2008, and which have guided Alliance staff in our advocacy efforts on the Waxman-Markey bill, including:

• use of energy efficiency to reduce the overall cost of abatement (the bill includes a host of complementary measures, including strong building energy codes, building efficiency labeling, an energy efficiency and renewable electricity standard for utilities, and many others);
• significant investment in energy efficiency programs (our analysis indicates that the bill would provide between $81 billion and $167 billion for energy efficiency over the period from 2012-2050, an average of $2.1 billion to $4.3 billion annually);
• creation of a price signal for energy efficiency and other means of reducing greenhouse gas emissions (by creating a carbon cap and trade framework, and, importantly, imposition of the program economy-wide, covering all fuels and all sectors);
• strong cost-control measures (including, in addition to energy efficiency, banking and borrowing of allowances and a large amount of offset credits); and,
• incentive for the adoption of emissions abatement policies by other major emitters (the bill requires that recipients of clean energy technology funds ratify an international treaty or undertake substantial mitigation activities).

And the impact of this legislation would be monumental. According to EPA analysis, annual energy consumption in 2050 under ACES would be the same as today (a 15% decrease below the baseline). The bill would place the U.S. on a trajectory to reduce covered emissions by 83% below current levels by the year 2050.

After clearing the House Energy & Commerce Committee tonight, the bill will likely be considered in at least the House Agriculture Committee and the House Ways & Means Committee as well. House Majority Leader Steny Hoyer confirmed today that the House leadership intends to bring the bill to the House floor sometime in June; however he has caveated that this is an objective, not a deadline. Prospects for early consideration of climate legislation in the Senate are more uncertain. The Senate Environment & Public Works Committee has yet to announce a timetable for hearings on a climate bill in the Senate, while the Senate Energy & Natural Resources Committee is proceeding in piecemeal fashion to craft a separate, comprehensive energy bill (consideration of buildings efficiency and an electricity standard were held over today until after next week’s recess). According to Alliance sources, the most likely timetable for Senate floor consideration of energy and climate legislation is in September or October.

We will continue to report to you on the next steps as this landmark legislation moves forward in the 111th Congress. If you have any questions about the bill or our analysis, please contact me directly or one of these members of our Policy Team: Joe Loper at jloper@ase.org, Lowell Ungar at lungar@ase.org, or Brad Penney at bpenney@ase.org.