ACEEE PRESS RELEASE

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ACEEE TESTIFIES ON ENERGY EFFICIENCY SOLUTIONS TO LOOMING NATURAL GAS CRISES

June 19, 2003

WASHINGTON, D.C. -- Testifying before the House Subcommittee on Energy and Minerals yesterday, Bill Prindle, Deputy Director for the American Council for an Energy-Efficient Economy (ACEEE), said that energy efficiency and conservation are the nation's best near-term response to looming crises in natural gas supply and prices. The testimony is available online at http://aceee.org/energy/natlgas.htm.

"For the near term—the next two to three years—moderating energy demand is the most realistic and effective approach to balancing natural gas markets," said Prindle. He pointed out that supply-side options are likely to take longer and cost more than efficiency options.

Prindle cited an ACEEE list of 15 natural gas efficiency measures that collectively can reduce U.S.gas demand by more than 10% by 2020 (see table). A substantial portion of this can be achieved in the near term through aggressive action, and can be supplemented by short-term conservation efforts. Further gas savings can be realized by saving electricity, especially during peak periods, due to the growing use of gas for power generation.

Prindle also outlined a series of short-term and longer-term steps that Congress and the Administration can take to respond to the unfolding gas crises. Recommendations for near-term action include:

1. Supplement current efficiency deployment programs. We recommend Congress pass a supplemental appropriation for federal programs that deliver energy savings, including the ENERGY STAR® programs and support for state-based efforts.
2. Conduct a national efficiency and conservation campaign. DOE should lead a partnership effort among efficiency manufacturers, utilities, states, and others to accelerate efficiency investments and encourage short-term behavior modifications. California used this approach with great success in responding to its 2001 crisis.

Recommendations for longer-term action include:

1. Accelerate federal efficiency standards. DOE should accelerate its standards rulemakings for residential heating equipment and commercial air conditioning equipment, and should take gas price and supply issues into account in setting these standards.
2. Expand incentives for high-efficiency technologies. Congress should increase incentives for gas-saving technologies in the current energy bills.
3. Expand research and development. DOE budgets for advanced technologies that save gas in the residential, commercial, industrial, and power sectors should be increased.
4. Create a public benefits fund for efficiency. Congress should include a public benefits fund for energy efficiency and other clean energy initiatives in the current energy bills. While originally aimed at electricity savings, this fund would be equally applicable to natural gas utilities and their customers.
5. Create efficiency performance standards for utilities. Congress should follow Texas' example and require utilities to offset a portion of demand growth through energy efficiency.
6. Expand support for combined heat and power (CHP). Congress should expand support for CHP by improving proposed CHP tax credits, and encouraging states and utilities to provide fair and reasonable interconnection and tariff treatment for new CHP systems.