December 5, 2007

NEW FUEL ECONOMY STANDARDS & OTHER ENERGY EFFICIENCY POLICIES COMING TO A VOTE SOON ON CAPITOL HILL!

After months of work on its substance, and weeks of speculation about which provisions would ultimately be included, an energy bill is expected to be unveiled today.

This bill will include a 40 percent increase in Corporate Average Fuel Economy (CAFE) standards (to 35 mpg by 2020), a requirement to develop the first U.S. fuel economy standards for medium- and heavy-duty trucks (see ACEEE's update on CAFE), new equipment efficiency standards on a variety of products, including performance standards for general service incandescent light bulbs that will effectively ban the conventional incandescent light bulb in favor of more efficient alternatives (e.g., CFLs and halogen IR lamps), and a variety of other efficiency provisions.

By way of background, both the Senate and House of Representatives passed energy legislation with major efficiency provisions last summer. (See ACEEE's analysis.) Since then, informal negotiations have taken place among Congressional staff to develop a single bill both House and Senate can approve. As of this writing, many details have been worked out and the bill is scheduled to be announced in the next few days. The House of Representatives will vote on the bill first and then it will go to the Senate. The Congressional leadership hopes to pass the bill before Christmas.

Right now, the Congressional leadership is planning to include a combined renewable energy and energy efficiency portfolio standard in the bill that will be voted on in the House this week. A decision on the Senate bill will likely be made at the last minute based on vote-counting in the Senate (they will need 60 votes to beat a likely filibuster). Today, ACEEE released a new, comprehensive analysis of the RES: Assessment of the House Renewable Electricity Standard and Expanded Clean Energy Scenarios). (Read the Press Release for key findings.)

It is also uncertain whether an extension of a variety of energy efficiency tax incentives will be included in the energy bill or included instead in a year-end bill to extend many expiring tax incentives. Current plans are to include these in the energy bill, but there could be last-minute change. If the renewable/energy efficiency portfolio standard and the tax incentive provisions are not in this year's bill, they could be considered early next year.

However, even passage of the provisions with broad support is far from guaranteed since Congress has many items on its agenda. There is significant opposition to several provisions, and not many days in session are left before the holiday recess.

In addition to work on energy legislation, Congress has begun moving legislation to address global warming. Specifically, a Senate Environment and Public Works Subcommittee reported out a bill that would establish a cap-and-trade program for carbon dioxide, capping CO2 emissions at 2005 levels (about 5200 million metric tons) in 2012, requiring a 15% reduction from 2005 levels by 2020 and a 70% reduction in emissions from 2005 levels in 2050. The bill contains some provisions aimed at encouraging energy efficiency, including allocations of allowances to states for advanced building codes, for fossil-fuel energy savings in buildings, and for reforming utility regulation to make efficiency more profitable for utilities.

Read a summary of the bill

The full Senate Environment and Public Works Committee is scheduled to review and vote on the bill on Dec. 6th. This bill is unlikely to be enacted in 2008 due to objections from the White House and a probable filibuster in the Senate by global warming policy opponents. But further debate in 2008 will lay the groundwork for potential enactment in 2009 after a new Administration and Congress take office.

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