Advanced Energy Perspectives

DC UPDATE: Can Shaheen-Portman Survive ‘Pent Up Demand’?

Posted by Christian Termyn

Aug 16, 2013 1:42:00 PM

    

Flag_Shaheen_PortmanOn the eve of Congress’s August recess, Senate Majority Leader Harry Reid (D-NV) moved to address S.1392, the latest version of energy efficiency legislation proposed by Senators Jeanne Shaheen (D-NH) and Rob Portman (R-OH). The duo has pushed essentially the same provisions in previous iterations of the bill over the last three years, to no avail. Reid’s move ensures at least that S.1392 will be one of the lawmakers’ first orders of business upon return to Washington September 9.

The Shaheen-Portman bill is a mix of incentives and other largely voluntary measures to spur adoption of commercially available efficiency technologies. Buildings are a key focus, since residential and commercial properties accounted for 73% of U.S. electricity consumption in 2012. It would direct the Department of Energy to support development of national building energy codes, and establish university programs, modelled after DOE’s Industrial Assessment Centers, to train engineers, architects, building scientists, and permitting officials. There are also several provisions directed toward manufacturers which would reorient existing DOE programs and establish rebates for new constant-speed electric motors that use less energy and for advanced transformers. The bill’s only mandate actually applies to the federal government itself - the nation’s largest energy consumer - to adopt energy savings techniques for computers.

Speaking jointly with Senator Portman before the conservative Ripon Society, Sen. Shaheen touted that it’s the first energy bill to come to the floor since 2007. This partly explains why the open amendment period could present such a challenge, due to what Shaheen referred to as lawmakers’ “pent up demand” to tack on new provisions, most only loosely related, that currently lack another venue. Dozens (many with bipartisan sponsors) are expected, addressing such topics as energy efficiency and mortgage underwriting rules, voluntary efficiency programs for leased buildings, and energy efficiency in schools and data centers. More controversial amendments might address President Obama's climate plan and the Keystone XL pipeline.

Amendments aside, the Shaheen-Portman effort has been dogged by old news and stale partisanship. For instance, the most recent version of the bill drops a private sector financing mechanism for efficiency upgrades and renovations out of concern it would sound like a loan guarantee. The National Journal uses this to support another explanation for the bill’s woes, what they’re calling the “lowest-common-denominator curse.” This is to say the bill is actually bogged down by its simplicity; a bolder policy initiative might catalyze the type of political horse trading that gets legislation through a divided Congress.

Out of all this muck, the bill has retained strong support from the business community, including the U.S. Chamber of Commerce, National Association of Manufacturers (NAM) and the Business Roundtable, an association of leading companies including Honeywell and Dow Chemical. In a letter to Shaheen and Portman, the Roundtable notes that their “legislation recognizes the essential role energy efficiency must play within a comprehensive energy policy.” But what Shaheen-Portman is not is a comprehensive energy bill, and the danger is lawmakers may get bogged down trying to make it one. Instead, with targeted new and improved efficiency programs and minimal government spending, Shaheen-Portman is an opportunity to avoid 9.5 quadrillion Btus of energy over the 2014-2030 period, according to a preliminary analysis by ACEEE (for reference, the U.S. consumes 100 quadrillion Btus annually).  This is on top of what American businesses and homeowners are doing on their own, whether motivated by utility program incentives or just because measures that save on energy costs make economic sense.

In the Administration

DOE has outlined a schedule to issue four long-delayed energy efficiency standards under pressure from New York Attorney General Eric Schneiderman and several other AGs and agency counsel. An August 8 letter from Dr. David Danielson, DOE’s Assistant Secretary for Energy Efficiency and Renewable Energy, assured them the department would be issuing proposed rules for metal halide lamps, commercial refrigeration equipment and walk-in coolers and freezers by the end of the month, and a rule for electric motors by November. DOE just yesterday released its proposed rule for metal halides, which could save consumers $3 billion over the next three decades.

On the confirmation front, the Wall Street Journal published a letter penned by a dozen former FERC commissioners in support of chairman nominee Ron Binz. The former commissioners went to bat for Binz, lauding his “impressive 34-year career in energy policy” and expectations that “he will be a fair and impartial judge and further the public interest within FERC’s authority.” The letter was in response to a WSJ editorial referring to Binz as a “the most important and radical Obama nominee you’ve never heard of.”

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Topics: Federal Policy Update

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