November 5, 2001

WASHINGTON, D.C. -- The American Council for an Energy-Efficient Economy (ACEEE) commends Senator Tom Harkin (D-IA) and his staff for the inclusion of the Energy Title in his farm bill introduced on November 2, 2001. "We applaud the Senator for recognizing the need to address energy issues in this important sector of our economy, which has received far less attention than it deserves," said Steven Nadel, ACEEE's Executive Director.

In particular, ACEEE is pleased to see the inclusion of a well-designed and well-funded farm audit program aimed at encouraging the use of on-farm renewable energy systems and identifying energy efficiency opportunities. The 1.9 million farms in the United States paid more than $4.5 billion for energy in 1997 (the most recent year for which U.S. Department of Agriculture data are available), i.e., approximately 4 percent of total farm expenses. The bill's conservative assumption is that 10 to 30 percent of farmers' energy costs could be saved, resulting in $450 to 1,350 million in savings per year.

"The proposed audit program doesn't take the one-size-fits-all strategy too often seen with government programs," said Neal Elliott, ACEEE's Industrial Program Director. "The program provides for a wide range of entities to compete for the grants, and the applicants are allowed significant latitude in the design of their programs. This means that the audit can be tailored to meet the needs of a region's farmers and that the program can be delivered by entities that have pre-existing relationships with the farmers. This flexibility substantially enhances the prospects that these grants will enable the realization of the possible energy savings."

Funding is provided in the bill to support upwards of 30,000 audits that could yield over $12 million in annual savings. While this number of audits would reach only about 2 percent of all farms, ACEEE hopes that state and regional initiatives will leverage these federal funds to reach an even larger share of our nation's farmers.

Elliott continued, "Of note is that these grants are targeted at smaller farmers. This funding is particularly important to family farms that are frequently capital constrained due to recent hard times in the agricultural markets. The $35 million grant pool could fund upwards of 40,000 grants contributing annual total energy savings of over $14 million."

ACEEE hopes that the Senate will retain Senator Harkin's Energy Title in the final farm bill and that the House conferees will also see the merits of including the title in the conference report.