ACEEE Comments to the Senate Energy and Natural Resources Committee on Natural Gas Conference: Proposed Policy Solutions

ACEEE research shows that energy efficiency is the most viable near-term strategy for moderating natural gas prices, and is also vital to stabilizing longer-term gas markets. Our proposal is based on a recent ACEEE analysis, which shows that if we can reduce gas demand by as little as 4% over the next five years, we can reduce wholesale natural gas prices more than 20%. These savings would put over $100 billion back into the U.S. economy, at a cost of $30 billion in new investment, of which less than one-quarter would be public funds at a combination of the federal and state levels.

Moreover, this investment would help bring back U.S. manufacturing jobs that have been lost to high gas prices, and would help relieve the crushing burden of natural gas costs experienced by many lower-income households. Importantly, much of the gas savings in our analysis come from electricity efficiency measures, because so much electricity is generated by natural gas, often inefficiently.

The proposed policy solutions, some of which were contained in H.R. 6 and S. 2095 in the 108th Congress, are:

• 1. Set end-use efficiency performance targets for electric and gas utilities.
• 2. Create tax incentives for high-efficiency technologies.
• 3. Accelerate federal appliance efficiency standards.
• 4. Support advanced building energy codes.
• 5. Expand support for Combined Heat and Power (CHP).
• 6. Increase funding for energy efficiency research, development, and deployment.
• 7. Conduct a national efficiency and conservation campaign.

ACEEE offers proposals in three of the Committee's eight areas of focus: (5) diversification and conservation, (6) tax incentives, and (7) investment. The preponderance of our proposals are presented under area (5). More detailed estimates of energy and natural gas savings are provided in our comments under areas (5) and (6).