ACEEE’s Bill Prindle, Acting Executive Director, on The Energy Efficiency Promotion Act (S. 1115)

lean burn technology should clarify that fuel economy for diesels is to be compared with that of gasoline vehicles on an energy-equivalent basis. This issue of gasoline-equivalence of diesel was not properly resolved in the EPAct 2005 tax credits, despite Senate intent; it has caused confusion in the implementation of the credits and should be clarified through this bill.

We also support the allocation of resources to developing domestic capability in energy storage for vehicles and to advancing electric drive technologies. However, it should be noted that DOE has spent hundreds of millions of dollars in the past on technologies of this kind without accelerating domestic manufacturers’ production of vehicles that use them. Within the scope of this bill, we suggest that part of the funding proposed in this section be used for a competition to produce a plug-in hybrid meeting certain performance and cost criteria. This would help to ensure some real-world progress on vehicle efficiency would follow from the proposed technology investment of over $400 million per year.

4. Title IV: National Energy Efficiency Goals. While this title contains non-binding goals, we want to emphasize the need to set binding national targets for energy efficiency. While competitive markets will ultimately deliver the technologies and practices to reach these goals, markets do best when they have clear and simple targets to meet. We applaud the Committee for setting an energy productivity goal for the nation; the 2.5% annual improvement represents nearly a 50% improvement in current productivity growth, and would sharply reduce energy demand growth overall.

We especially support the energy savings targets in section 401, though we recommend that the fuel economy aspects of this section be more specific. We note that the President’s Twenty in Ten proposal, on which the 2017 target for the section appears to be based, relies very heavily on a loosely-defined set of alternative fuels, and only moderately accelerates fuel economy improvement. While the feasibility of deploying alternative fuels infrastructure is unproven, fuel economy technologies and costs are well known, and therefore a greater emphasis on fuel economy provides a better balance of risk for the nation. Accordingly, ACEEE recommends that fuel economy targets be set so as to save at least 12 billion gallons of fuel in 2017, 45 billion gallons in 2025, and 68 billion gallons in 2030.

We also recommend that a new section be created that sets electricity savings targets for distribution utilities, such that covered utilities would be required to save 10% of electricity sales by 2020. Many states have set such Energy Energy Efficiency Resource Standards (EERS), often in coordination with renewable energy standards. We believe that setting efficiency standards is essential to the success of any renewable energy policy, because moderating demand growth is needed to allow clean supply sources to make a discernible difference in fossil fuel energy use.

5. Title V: Federal Leadership. ACEEE supports the provisions of this title, especially the permanent authorization of the Energy Savings Performance Contracting (ESPC) program, and the assessment of Combined Heat and Power opportunities at federal facilities. We recommend that Congress place a special priority on installing CHP technology at the Capitol powerplant, which could be accomplished through an ESPC or similar vehicle.

6. Title VI: State and Local Initiatives. ACEEE supports the provisions of this title, especially section 603’s requirements for utilities and states to include energy efficiency in resource planning, and to reform ratemaking policies to make energy efficiency a better business proposition for utilities. We recommend that the bill also include Regional Transmission Organizations (RTOs) among the entities covered by this section. This section should also be linked ultimately to a federal Energy Efficiency Resource Standard (EERS) that sets quantitative targets for energy savings for utilities, with the goal of saving 10% of electricity sales by 2020. Sections 139 and 140 of EPAct 2005 called for a study and pilot program for EERS. The study is complete, and shows that these policies are gaining acceptance and enjoying success in a number of states. Given the increased urgency to address carbon emissions from electric utilities, this should be a high priority for Congress in 2007.

Energy Savings

ACEEE estimates that the appliance and equipment efficiency standard provisions in this bill together can produce savings as follows:

We also estimate that significant additional savings would result from the sections that improve DOE authority to set better standards.

Conclusion

ACEEE supports the Energy Efficiency Promotion Act as a major additional step on the road to a sustainable energy future. We recommend a number of ways that this bill can be augmented, within its existing provisions, by adding new provisions, and through additional legislation.

• Electricity: at least 50 billion kilowatt hours per year, or enough to power roughly 4.8 million typical U.S. households
• Natural gas: 170 million therms per year, or enough to heat about a quarter million typical US homes.
• Water: at least 560 million gallons per day, or about 1.3% of total daily potable water usage.
• Dollars: more than $12 billion in net benefits for consumers