The United States faces a fork in the road in regard to energy policy. For the past five years, the U.S. Congress and the present Administration have been working on comprehensive energy legislation. Legislation passed both Houses of Congress in both 2002 and 2003, but could never be finalized due to a variety of contentious issues. In 2003, House-Senate conferees concluded an agreement, but the agreement could not summon the 60 votes needed for passage in the Senate. In 2005, Congress will be trying again.

In seeking to develop legislation, members of Congress need to decide whether they are prepared to make the compromises needed to enact broadly supported legislation that will truly address our nation's energy problems, or whether they will instead continue to work on legislation that puts "band-aids" on our nation's energy problems, while leaving the tough choices for the future.

In this report we do not address all elements of a comprehensive energy bill. Instead, we concentrate on what we believe should be the foundation of any energy plan or energy bill—using energy as efficiently and cost-effectively as possible. This report focuses on three policy option packages: the energy efficiency provisions in two current energy bills and one "enhanced" policy package:

• Those in the 2003 House-Senate Conference Report (commonly referred to by its bill number—H.R. 6) (U.S. Congress 2003);
• Those in a bill just introduced by Senator Lamar Alexander (R-TN) entitled the Natural Gas Price Reduction Act of 2005 (S. 726, 2005); and
• An enhanced legislative package that includes the best efficiency provisions of H.R. 6 and S. 726, plus selected additional efficiency provisions that would significantly increase energy savings.
  

First we review the policy option packages. Then we estimate the energy savings from each of these packages in 2010, in 2020, and on a cumulative basis over the 2006-2010 and 2006-2020 periods. As part of this analysis, we look at overall U.S. energy savings, as well as electricity savings (both electricity use and peak demand savings), natural gas savings, oil savings, and reductions in carbon dioxide emissions. Our methodology and key assumptions are discussed in the body of the report. In the final section, we put these analysis results in a broader context and draw some conclusions. The intent of this effort is to provide objective information to policy makers as they shape what ultimately goes into legislation and also to provide information to a broader public about the benefits and costs of investing in energy efficiency resources so they can judge how well the policy makers have done.

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39 pp., 2005, $17.00, E051