Two energy efficiency bills introduced last year received bipartisan support in the House and Senate, but received limited attention at the time. The Energy Savings and Industrial Competitiveness Act of 2011, introduced by Senators Jeanne Shaheen (D-NH) and Rob Portman (R-OH), contains a variety of provisions intended to increase energy efficiency in the residential, commercial, and industrial sectors. The Implementation of National Consensus Appliance Agreement Act of 2011, introduced by Senator Jeff Bingaman (D-NM) and Lisa Murkowski (R-AK), which would establish new and revised efficiency standards for a variety of household and commercial appliances.
A white paper from the American Council for an Energy Efficient Economy (ACEEE) reports that the bills are expected to be combined on the Senate floor this year. ACEEE’s paper notes that the acts could be implemented over their lifetime with “insignificant” appropriations – $600 million over the 2012-30 period – and provides an analysis of their benefits in terms of jobs created, net annual consumer savings, and avoided greenhouse gas emissions.
While the analysis shows “important but modest” energy savings for consumers, a possible net increase in American jobs, and over 130 million metric tons in avoided greenhouse gas emissions, the paper concludes that “these bills are only an initial down-payment on needed policy steps to maximize use of cost-effective energy efficiency resources to benefit the U.S. economy,” and that a “highly-politicized” 112th congress impeded or blocked the passage of other important energy efficiency bills.
ACEEE calls for the 113th congress to put forward policy that would set energy savings targets for utilities through some form of energy efficiency or clean energy standard, tax reform that would remove impediments to investments in energy efficiency, and establishing a price for greenhouse gases.
How important is energy efficiency to America’s energy future? What are the prospects for federal energy efficiency legislation in this and the next Congress?
Energy efficiency is very important. Quite obviously, there is no cheaper nor greener energy than the MMBTU or kWhr that is NOT used. However, several issues must be addressed in order to make any efficiency/conservation program viable.
To begin, the potential “customers” of such a program must believe it is in their interests to be involved. In the U.S. that primarily takes the form of an economic motivation. We’ve seen the renewables effort lag due to its inability to motivate the American consumer with predictions of global disaster. They may be true, but due to the lack of a convincing evaluation of the economic cost of these externalities, renewable energy sources still encounter sizable resistance.
Secondly, we need better metrics of program success. The achievements of conservation and demand side management of energy supply are notoriously difficult to measure with confidence. For example, should we still be counting those fluorescent bulbs that have recently fallen into disfavor due to consumer resistance and the fact they all contain mercury? On the other hand, savings from high efficiency furnaces and heat-pump air conditioning are much more tangible.
Finally, are these efficiencies a depleting resource? For example, Smart Company installs a number of energy saving devices which require specific maintenance actions to deliver the nameplate savings. Over time the operations staff neglects first the most onerous, then later the only modestly difficult maintenance requirements and the savings are eroded. How much credit for success does the program receive in this common situation?
The U.S. has made good progress in lowering our energy use on a per-dollar-of-GDP basis, although some of that progress was due to the increase in financial activity, a low energy intensity industry. A continuance of those gains is certainly in our overall interests. The problem lies in selling the deal.