Klobuchar's SAFEST Act (S. 3576)
On July 13, 2010, Senator Amy Klobuchar (D-Minn.) introduced S. 3576, the Securing America’s Future with Energy and Sustainable Technologies (SAFEST) Act. This bill aims to reduce dependence of foreign energy sources and to create jobs by positioning the United States to lead the way in energy technology. Most notable from an energy efficiency perspective, SAFEST would create a national energy efficiency resource standard (EERS) for electric and natural gas utilities, as well as a national renewable electricity standard (RES) for electric utilities that allows efficiency to be counted towards the requirement. The bill would also set goals for auto manufacturers to produce an increasing number of low-carbon vehicles.
Energy Efficiency Resource Standard (Section 302)
Electric utilities that delivered at least four million MWh (megawatt-hour) in the most recent two-year period and natural gas utilities that delivered at least five billion cubic feet of natural gas over the most recent two-year period would be covered by the EERS. Covered utilities would be required to achieve energy savings equal to 1.5 percent in 2012 compared to their average annual electricity or natural gas deliveries over the five years prior to the bill’s enactment. The savings requirement would increase one percent annually through 2020, as shown in Table I. The Department of Energy (DOE) would also be directed to create regulations for years beyond 2020. Additionally, DOE would be directed to determine by 2015 if higher standards would be feasible and cost effective, and if so, to adjust the standards accordingly. Standards would then be reassessed every ten years.
TABLE I: Cumulative Energy Saving Requirements
Calendar Years Savings Percentage
2012 .......................................................................... 1.5
2013 .......................................................................... 2.5
2014 .......................................................................... 3.5
2015 .......................................................................... 4.5
2016 .......................................................................... 5.5
2017 .......................................................................... 6.5
2018 .......................................................................... 7.5
2019 .......................................................................... 8.5
2020 .......................................................................... 9.5
Customer electricity and natural gas savings, savings from improvements in building codes and appliance and equipment standards, and savings from reduced distribution system losses of electricity and natural gas would count toward meeting the standard. Energy savings credits (ESCs) could also be used to comply with these requirements, including those created by third-party efficiency providers, as long as the provider is located in the same state or power pool as the utility purchasing the credits. Utilities achieving excess savings could receive ESCs totaling up to 15 percent of their annual savings requirement. DOE would establish procedures for the measurement and verification of savings, including procedures for calculating savings from combined heat and power and recycled energy (recapture of otherwise wasted electrical, thermal, or mechanical energy).
DOE and the U.S. Environmental Protection Agency (EPA) would be directed, where possible, to preserve existing state energy efficiency programs. States would be permitted to apply to administer the EERS within their states, provided that they require savings levels and measurement and verification at least as stringent as the national standards. States could establish alternative compliance payments (ACPs) of no less than $50 per MWh of electricity and $5 per million Btu of natural gas that utilities could pay in lieu of achieving the energy reductions. Money collected would be invested in energy efficiency programs. DOE would be authorized to levy a penalty on non-compliant utilities of $100 per MWh of electricity savings not achieved or $10 per million Btu of natural gas savings not achieved.
Renewable Electricity Standard (Section 301)
The RES would require electric utilities to obtain from renewable energy sources a minimum of ten percent of the electricity sold to electricity consumers in 2013, escalating to 25 percent by 2025. Up to 15 percent of the annual requirement could be met through efficiency improvements above and beyond the EERS requirement. Utilities would be allowed to use renewable energy credits (RECs) or ESCs to meet their obligations. While RECs could be traded, ESCs would not be tradable under the RES.
The RES could also be met through an ACP of four cents per kWh. These payments would be deposited into a renewable energy account established in the bill, to be used to pay for a program to provide grants to promote renewable energy production. Non-compliant utilities would be fined, but would be permitted to recover all costs of compliance.
Open Fuel Standard for Transportation (Section 203)
Beginning in 2013, automobile manufacturers would be required to produce a certain percentage (as shown in Table II) of vehicles that reduce direct fossil fuel consumption – referred to as “fuel choice enabling automobiles.” In addition to flexible-fuel, biodiesel, hydrogen fuel cell, and electric powered automobiles, this category would include plug-in hybrids and any other technology that, through the first ten years after enactment of the bill, uses at least 50 percent less fossil fuel per mile traveled than the average vehicle in its class; and after the first ten years following enactment of the bill, uses at least 75 percent less fossil fuel per mile traveled than the average vehicle in its class.
TABLE II: Manufacturer requirements for the integration of Fuel Choice Enabling Autos
Calendar Years Percentage of total inventory
2013 .......................................................................... 30
2015 .......................................................................... 50
2017 .......................................................................... 80
2030 ..........................................................................100
