Practical Energy and Climate Plan Act of 2010 (S. 3464)
On June 9, 2010, Senator Lugar (R-Ind.) introduced the Practical Energy and Climate Plan Act of 2010, a bill that ClimateWorks estimates will reduce U.S. energy consumption by 11 percent in 2030. At this legislation’s core are a number of energy efficiency provisions targeting energy reductions across several sectors, including vehicles, buildings, industry and electric utilities. These provisions help to achieve the bill’s energy and climate goals with minimum impact on the national economy; in fact, many would return money directly to consumers through household energy savings.
Vehicle Efficiency
Fuel economy standards: For passenger vehicles, fuel economy standards would be required to increase in efficiency by 4 percent each year, starting in 2016 at the end of standards recently set by the Obama administration. Medium- and heavy-duty vehicles would face new efficiency standards starting in 2017, to be strengthened at least every four years.
Fuel efficiency performance program: The bill would also create a “feebate” program, in which consumers purchasing efficient cars in a given class are given rebates that rise with the level of gasoline savings. The rebates would be paid for by a fee imposed on the manufacturer of inefficient vehicles within each class. This program would incentivize consumers to purchase more efficient cars, thereby spuring competition among automakers to exceed efficiency standards.
Building Efficiency
National Building Energy Performance Standards: The Practical Energy and Climate Plan Act would create national building energy performance targets for new residential and commercial construction. The independent bodies that develop model building energy codes would be expected to achieve energy savings of 30 percent compared to the 2006 International Energy Conservation Code by 2012 and 50 percent by 2015 for all new residential buildings, and the same targets by 2012 and 2017 compared to the ASHRAE Standard 90.1- 2004 for commercial buildings. The U.S. Department of Energy (DOE) would set future targets. DOE would have 180 days after a model code is issued to determine whether it meets the targets, and another year to propose changes to the independent body. If the developer still did not meet the targets, DOE would establish a modified model code that does.
States would have two years to demonstrate that they have adopted the model code or one with equivalent energy savings, and another three years to show 90 percent compliance with the code.
The bill would authorize $300 million per year for grants to state and local government over the next five years for code implementation.
Federal Building Efficiency: Federal agencies would be required to include energy impacts in environmental impact statements for federal facilities. All new federal buildings built from 2012 onwards would need to exceed national building performance standards and be located with consideration of access to public transportation. Federal buildings built from 2020 onwards would need achieve net-zero energy use by 2030 (under current law, federal buildings built from 2030 onwards are to achieve no fossil fuel-generated energy use).
Additionally, federal agencies would be required to purchase efficient products (in addition to products with ENERGY STAR and federal energy management program designations, as under current law), and to implement best management practices for energy-efficient management of servers and federal data centers.
National Homes and Buildings Retrofit Program: Nationwide energy-saving retrofits would be encouraged though financing programs (e.g. direct loans, letters of credit, loan guarantees, credit enhancements, etc.) administered by DOE and intended to spur energy efficiency measures and on-site renewable generation. The bill would establish an annual goal of a 5 percent retrofit rate in existing homes and a 2 percent rate in the commercial sector. The program would be authorized at $2 billion.
Rural Energy Savings Program: The Rural Utilities Service of the Department of Agriculture would work with rural electric cooperatives to offer low interest loans to rural consumers for energy efficiency retrofits. The program would be authorized at $993 million.
Appliance and Equipment Efficiency Standards: The Practical Energy and Climate Plan Act would build upon existing appliance and equipment efficiency standards, adding computer monitors and displays to the list of covered products; granting DOE authority to add additional categories of commercial equipment (currently, DOE can add residential products); directing DOE to identify and report on uncovered consumer and commercial products that should receive efficiency standards; and making it mandatory (rather than optional) for DOE to set standards for covered equipment.
Industrial Efficiency
Industrial Efficiency Revolving Loan Program: The bill would authorize DOE to make grants to revolving loan programs with state and private financial participation for use by commercial and industrial manufacturers that implement technologies or processes to reduce energy intensity. Federal investment in these programs would have to be matched by an equal amount from other sources. The bill would authorize $500 million for these grants per year through 2014.
Federal Diverse Energy Standard
Starting in 2015, electric utilities would have to obtain 15 percent of their generated energy from “diverse energy” sources, which, in addition to several renewable energy technologies, nuclear power and coal with carbon sequestration, could include end-user efficiency savings resulting from utility programs and efficiency savings in power generation. Over the years, this requirement would rise to 50 percent in 2050.
A credit trading system would be established to allow utilities flexibility in meeting these requirements, but credit issued for end-use or supply-side energy savings would not be transferrable outside state boundaries. An alternative payment of 5 cents per kilowatt-hour would be allowed. This federal program would be coordinated with, and would not preempt, state energy efficiency resources standards (EERS) and renewable energy standards (RES) programs.
The bill and its summary are available on Senator Lugar's website.
