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Congress Needs to Keep Dim-Witted Light Bulb Rider Out of Omnibus Spending Bill

2011-12-13T20:16:31Z

Jim Presswood, Federal Energy Policy Director, Washington, DC

The House Republican Leadership is threatening to hold up the omnibus spending bill over a rider they are pushing to block light bulb energy efficiency standards. A broad coalition, including the lighting industry, consumer advocates, and business, labor, efficiency and environmental groups, strongly oppose this rider, which is in the House Energy & Water Appropriations Bill (HR 2354).

The rider would prevent the Department of Energy from enforcing the light bulb efficiency standards that Congress enacted in 2007 with strong bipartisan support and are supported by the lighting industry. The standards would save enough energy to avoid the construction of 30 new power plants and the pollution they would produce, as well as save consumers billions of dollars annually.

Incandescent Bulbs are Not Banned

The standards, which go into effect beginning next year, do not ban incandescent bulbs – new, higher efficiency incandescent bulbs meeting the 2012 standards are already being sold in stores. There are a variety of bulbs that meet the new standards, including incandescent bulbs that are 28-33 percent more efficient than the traditional incandescent bulb that has changed little over the past 125 years. These new incandescent bulbs look, light, and turn on like the old bulbs. Consumers will also have the option to buy compact fluorescent lamps (CFLs) and light-emitting diodes (LEDs), which provide even greater cost and energy savings. See NRDC’s light bulb buying guide for more information on all the new lighting products that are now available.

Benefits of Light Bulb Standards in Jeopardy

The House light bulb rider would jeopardize the benefits of the light bulb efficiency standards, which include:

Annual energy bill savings of about $100 for the average American family and approximately $12 billion nationwide.
Decreased energy demand, which would avoid the need for 30 large power plants and decrease levels of harmful air pollution, including 100 million tons of carbon dioxide pollution per year, which is equivalent to the emissions of 17 million cars.
American jobs making better, more efficient light bulbs that meet the new standards. More than 2,000 jobs have already been created at lighting facilities in the U.S., and the standards are key factor in this development. Take for example GE Lighting’s recent investment to expand its workforce at its plant in Bucyrus, OH to make energy efficient fluorescent bulbs or Cree, which is a leading manufacturer of LED lights in Durham, NC.

Light Bulb Standards Have Broad Support, Including Industry and Consumer Groups

All the leading lighting companies, such as Philips, GE, and Osram Sylvania, and their trade association the National Electrical Manufacturers Association (NEMA) support the standards, as does the nation’s leading consumer groups, including Consumers Union, Consumers Federation of America, National Consumer Law Center, Public Citizen, National Consumers League, and the National Association of State Utility Consumer Advocates.
Companies are already developing better bulbs and more innovation, factories, and jobs are on the way, right here in America. Americans want their representatives in Congress to stand up for these critical cost and energy savings and business and job benefits.

You can learn more about light bulb efficiency standards and their benefits on our website here.

Light Bulb Shopping Guide for Representative Barton

2011-07-11T23:39:53Z

Jim Presswood, Federal Energy Policy Director, Washington, DC

The U.S. House of Representatives is scheduled to vote this week on Representative Joe Barton’s BULB Act (H.R. 2417), which would repeal the national energy efficiency standards for light bulbs enacted in 2007. In his rush to roll back energy efficiency standards, Rep. Barton has gotten his facts mixed up. He seems to think that the new standards ban incandescent light bulbs. They don’t. He also seems to have the mistaken belief that new, efficient bulbs are a bad deal for consumers.

Representative Barton spends a lot of time around the Washington D.C. area, which is where I also live. So I decided to do some shopping this past weekend to help him find the efficient light bulbs and start saving money. Hopefully this shopping guide will help him get his facts straight.

Efficient incandescent bulbs meet the new standards.

Rep. Barton said in an interview he gave last month on energyNow! that he wants to repeal the standards because they are a ban on incandescent light bulbs, which would require consumers to purchase higher priced compact fluorescent lamps (CFLs) that take a long time to pay for themselves through efficiency savings.

The incandescent bulb, however, is not banned – it’s just getting better. Incandescent bulbs meeting the standards that go into effect this January are already available in stores like Lowe’s and Home Depot. These bulbs look, illuminate and turn on like the traditional incandescent bulbs that have changed little over the past 125 years. But they are 28-33 percent more efficient. Below are pictures of several of the 72 watt (W) efficient incandescent bulbs, which produce light equivalent to conventional 100W incandescent bulbs. You can buy these efficient light bulbs in stores now.

Efficient incandescent bulb nets $1.69 in savings.

During my shopping trip, I found a Philips 72W efficient incandescent bulb for $1.50 at Home Depot.[1] The 100W bulb was cheaper – it was just 31 cents. [2] Both bulbs are rated to last 1000 hours, or about 18 months at 2 hours per day. But, the electricity I’ll save with the more efficient bulb covers my extra up front cost in just seven months. [3] For the remaining 11 months the product operates, I’m making money. Altogether, I figured my total cost (bulb plus electricity) with the conventional bulb is $10.59 while my total cost for the efficient incandescent is just $8.90. The bottom line: I make $1.69 by going with the efficient incandescent. This is a great deal for consumers, and looks even better when you consider that more efficient bulbs mean decreased need for power plants, which emit air pollution that harms people’s health and the environment.

Savings from CFLs are even greater.

Even though the new standards do not require anyone to buy a CFL, consumers who make that choice will save even more money. Rep. Barton believes that CFLs are so high-priced that it takes buyers a long time to recoup the additional up-front cost through lower energy bills. In a Politico story last week, he said:

"I bought a 60 watt CFL [compact fluorescent light] bulb last night at Giant for $6 and I bought four 60-watt incandescents for 37.5 cents a piece, four for a buck and a half,” Barton said. “It takes a long time to make up efficiency when it's an 18 to 1 outlay up front."

Rep. Barton needs to check the prices at Giant again and his math.

I found a 13W CFL (equivalent to a 60W incandescent bulb) for $2.11 at a Giant in Northern Virginia last weekend.[4] Home Depot in Northern Virginia has even better prices – they sell a 14W Ecosmart CFL (equivalent to 60W) that lasts 10,000 hours for $1.46.[5] As with the efficient incandescents, CFLs cost more than the 31-cent conventional incandescent, but they pay back their extra cost through lower electric bills even more quickly. It takes just 2 months to pay back the extra up-front cost of the 14W Ecosmart CFL, which is certainly not “a long time to make up efficiency.”[6] CFLs also last much longer than regular light bulbs (6,000 to 10,000 hours vs. 1,000 hours). My total cost (bulb plus electricity) for 10,000 hours of light with the 14W Ecosmart CFL would be $15.85. My total cost (bulbs plus electricity) with conventional light bulbs would be $64.78. So, my net savings are almost $50 with the CFL.

But don’t take it from an amateur shopper like me. The expert shoppers at Consumers Union, which publishes Consumers Reports magazine, found very similar results, which are described here.

National savings add up.

Of course, the costs and savings from a single light bulb are not big dollars. But, with more than 4 billion sockets in the U.S., the savings from the new standards really add up for the nation. Once the light bulb efficiency standards are fully implemented, consumers will save more than $12 billion per year (including more than $1 billion in Rep. Barton’s home state of Texas.) An average household will save $85, which is like getting one month of electricity free, every year.

If Rep. Barton’s attempt to repeal these standards is rebuffed, all light bulb shoppers are going to be saving money and that’s good news for our economy, health, and environment.

*Thanks to Andrew deLaski of the Appliance Standards Awareness Project for his assistance with this blog.

[1] 2-pack of Philips 72W incandescent bulbs at Home Depot for $2,99, which is $1.50 per bulb.

[2] 8-pack of Sylvania 100W incandescent bulbs at Lowes for $2.48, which is $0.31 per bulb.

[3] Formula to determine payback period: (price of 72W bulb – price of 100W bulb)/((cents per kWh electric rate * average usage of bulb * 0.10kW) – (cents per kWh electric rate * average usage of bulb *0.072kW)). Inputs for formula: average Virginia electric rate of $10.28 per kWh (Electric Power Monthly, Energy Information Administration, Table 5.6.A. (June 2011)); average usage of bulb of 693.5 hours (“U.S. Lighting Market Characterization,” Navigant study commissioned by U.S. Dept. of Energy, p.40, Table 5-10 (2002)). Completed payback formula: ($1.5-$0.31)/(0.1028kWh*693.5hours per year *0.10kW) – (0.1028kWh*693.5hours per year*0.072kW) = 0.595 years *12 mos. per year = 7 months.

[4] 3-pack of Smart Living 13W CFLs (60W equivalent) for $6.37, which is $2.12 per bulb.

[5] 4-pack of Ecosmart 14W CFLs (60W equivalent) for $5.85, which is $1.46 per bulb.

[6] Completed payback formula: ($1.46-$0.31)/(0.1028kWh*693.5 hours per year *0.10kW) – (0.1028kWh*693.5 hours per year*0.014kW) = 0.187 years *12 mos. per year = 2.24 months.

Obama Shines Light on Job-Creating Efficiency Standards

2011-06-13T11:35:40Z

Jim Presswood, Federal Energy Policy Director, Washington, DC

President Obama is scheduled to visit today the Cree high-efficiency lighting manufacturing plant in Durham North, Carolina. Cree is a leading manufacturer of light emitting diode (LED) lights, which are 75 percent more efficient than traditional incandescent bulbs and last up to 25 years.

Cree is a poster child for the benefits of the federal energy efficiency standards for light bulbs. The standards were enacted by Congress in 2007 with bipartisan support and signed by President George W. Bush. These standards are creating new markets for high efficiency bulbs such as the LEDs made by Cree, as well as new advanced incandescent bulbs and compact fluorescent lamps (CFLs). Cree recently opened a new LED manufacturing line in Durham and has hired over 700 people there since 2009.

The light bulb efficiency standards enacted in 2007 require new bulbs to use 25-30 percent less energy than traditional incandescent bulbs beginning next year, and 65 percent less by 2020. Contrary to the claims of some politicians and pundits, the standards don’t ban incandescent bulbs – they simply require them to be more efficient. New advanced incandescent bulbs meeting the standards that go into effect next year are already available in stores. These bulbs look and produce light just like the old-fashioned bulbs.

There is a lot of room for improving light bulb technology, which has changed little since the 1800s. The host of energy saving light bulb choices available to consumers is described on our light bulb web page and in my colleague Noah Horowitz’s blogs. The lighting efficiency standards have served as a catalyst for the lighting industry to re-invent the inefficient 125 year old light bulb. As a result we are seeing new and improved incandescents that use roughly 30 percent less energy, better CFLs and LEDs.

According to our analysis, the light bulb efficiency standards when fully implemented will:

Save each American household $100 to $200 per year in the form of lower electric bills.
Reduce U.S. energy bills overall by more than $10 billion per year.
Achieve energy savings equivalent to the electricity production of 30 large power plants.
Avoid approximately 100 million tons of carbon dioxide pollution per year, which is equivalent to the emissions of 17 million cars.

As shown by Cree’s recent expansion, the new standards also drive innovation and investments that create jobs here in America. The light bulb efficiency standards have jump-started industry innovation and investment that is creating U.S. jobs. For example:

Osram Sylvania has retooled its current St. Marys, Pennsylvania incandescent factory to produce new energy saving incandescent bulbs that will meet the standards.
Several thousand U.S. jobs have been created by companies like Cree in North Carolina, Lighting Sciences Group Corp in Florida, and Philips Lighting (the world’s biggest lighting company) to produce the next generation of efficient LED light bulbs.
In 2011, TCP—one of the world’s largest makers of CFLs—is opening a new factory in Ohio to help meet the new demand.
GE recently invested $60 million to create a Global Center of Excellence for linear fluorescent lamp manufacturing in Bucyrus, Ohio—an action that will double the number of jobs at that plant.

The light bulb efficiency standards are sure to create more success stories like Cree’s as they spur the transition of lighting technologies from the days of the horse and buggy to the 21st Century.

Bills to Roll Back Light Bulb Efficiency Standards Not a Bright Idea

2011-03-08T14:55:36Z

Jim Presswood, Federal Energy Policy Director, Washington, DC

Several bills have been introduced this Congress that would repeal or undermine the federal energy efficiency standards for light bulbs enacted by Congress in 2007. Such a roll back would increase household energy bills, stifle innovation that is creating U.S. jobs, and increase air pollution that harms human health and the environment.

Supporters of the roll back claim that the new standards ban the incandescent light bulb starting in 2012. This is simply not true. As shown in the image below, several manufacturers already sell new energy-efficient incandescent bulbs that meet the 2012 standards. These new bulbs look and perform just the same as the old incandescent bulbs.The light bulb efficiency standards were enacted as a bipartisan amendment to the Energy Independence and Security Act of 2007, which requires new bulbs to use 25 to 30 percent less energy than traditional incandescent bulbs beginning in 2012, and 65 percent less energy by 2020.

According to NRDC’s analysis, the standards when fully implemented will:

Save each American household $100 to $200 plus per year on their energy bills.
Reduce U.S. energy bills overall by more than $10 billion per year.
Achieve energy savings equivalent to 30 large power plants.
Avoid approximately 100 million tons of carbon dioxide (CO2) pollution per year, which is equivalent to the emissions of more than 17 million cars.

The most prominent light bulb efficiency standards roll back bill is the BULB Act (S. 395 & H.R. 91). Senator Jim DeMint (R-SC), a lead cosponsor of the BULB Act, said that the light bulb standards pick winners and losers in the marketplace and also micromanage the purchasing decisions of Americans.

Americans, however, did not have the choice to purchase the new efficient incandescent bulbs until after the 2007 light bulb standards were enacted. The technology for these new bulbs was invented in the 1960s, but the manufacturers did not roll it into the marketplace until the standards created a market for the bulbs.

The light bulb standards are also not some sort of statist central planning policy that picks technology winners and losers. Rather, the standards establish energy efficiency targets that all light bulbs have to meet and let the market decide how to meet them. The standards provide clear market rules that companies know well in advance – there is no federal bureaucracy saying what types of bulbs can and cannot be produced. This is one reason why energy efficiency standards in general have a long history of bipartisan support, beginning with President Reagan who signed the National Appliance Energy Conservation Act of 1987.

The new light bulb standards are unanimously supported by industry, and are already jump-starting innovation and investment that is creating U.S. jobs. For example:

Osram Sylvania has retooled its current St. Marys, Pennsylvania incandescent factory to produce new energy saving incandescent bulbs that will meet the standards.
Several thousand U.S. jobs have been created by companies like Cree in North Carolina, Lighting Sciences Group Corp in Florida, and Philips Lighting (the world’s biggest lighting company) to produce the next generation of efficient light-emitting diode (LED) light bulbs.
In 2011, TCP—one of the world’s largest makers of compact fluorescent lamps (CFLs) — is opening a new factory in Ohio to help meet the new demand.

GE recently invested $60 million to create a Global Center of Excellence for linear fluorescent lamp manufacturing in Bucyrus, Ohio—an action that will double the number of jobs at that plant.

Thomas Edison invented his light bulb in 1880 and the technology has changed little since then. Today’s old incandescent bulbs are so inefficient that they lose about 90 percent of the energy they consume as waste heat and it costs around $10 per year to operate just one 100 Watt bulb.

The new light bulb standards are bringing lighting technology from the days of the horse and buggy to the 21st Century, which will save consumers money, create jobs, and reduce pollution. Congress should reject efforts to repeal these standards.

Tea Party Gets US House To Throw Clean Energy Overboard

2011-02-19T16:28:35Z

Jim Presswood, Federal Energy Policy Director, Washington, DC

The U.S. House passed a spending bill (H.R. 1) early this morning that rolls back environmental protections and guts investments in clean energy. As my colleague David Goldston explains here, the Tea Party Republicans are behind this effort that would increase pollution, harming human health and the environment. The bill would also stifle innovation in clean energy technologies needed to reduce our dependence on oil and win the global race to manufacture and sell these technologies.

H.R. 1 slashes key Department of Energy (DOE) programs that promote clean energy by about $1.7 billion – approximately a 23 percent decrease from current levels (set in Fiscal Year 2010 and extended by continuing resolutions since then). This comes at a time when there is strong support for clean energy, as shown by this recent USA Today/Gallup poll finding that 83 percent of Americans favor Congress passing “an energy bill that provides incentives for using solar and other alternative energy sources.” A group of leading corporate CEOs also issued this report last year calling for a minimum of $16 billion per year in clean energy innovation to make America a global leader in what will be the largest new market of this century.

The Tea Party Republicans, however, pushed the House in the opposite direction in H.R. 1. The bill includes a host of drastic cuts to clean energy programs that the Senate and administration need to reject. The principal cuts are (I’m rounding all of the numbers to spare you the decimal points, and all cuts are from current levels):

DOE Energy Efficiency and Renewable Energy Program (EERE) cut by $775 million – a 35 percent decrease. EERE is pursuing groundbreaking research in clean energy technologies such as solar photovoltaic and building energy efficiency technologies. More NRDC analysis of these cuts is here.
DOE Office of Science cut by $886 million – an 18 percent decrease. The Office of Science plays an essential role in driving U.S. innovation providing nearly 40 percent of funding for basic research in physical sciences, overseeing our national laboratories, and driving science education.
State Energy Program (SEP) zeroed out. SEP is a 30-year-old, cost-shared program that provides critically needed resources and grants directly to states and territories for clean energy programs. Oak Ridge National Laboratory found that each dollar of SEP funds generates $7.22 in cost savings and leverages $10.71 of state and private funds.
DOE Loan Guarantee Program cut by $25 billion for all technologies except for “nuclear power facilities and front-end nuclear facilities.” The bill also rescinds all funds provided to the program by the American Recovery and Reinvestment Act of 2009. According to Senate Energy & Water Appropriations Committee Chairman Feinstein, these provisions would prohibit DOE from finalizing every renewable loan application currently under review, including five projects where the conditional loans have already been issued.
National Science Foundation (NSF) cut by $359.5 million. This would result in 500 fewer NSF research awards, supporting 5,500 fewer researchers, students, and technical support personnel. Also cut is important NSF support for science, technology, engineering and math (STEM) education programs at the K-12, undergraduate, and graduate levels.
National Institute of Standards and Technology (NIST) sees a reduction in its overall budget of $159.5 million, or 19 percent. This would have a serious impact on the operation of NIST laboratories, forcing reductions in the technical and scientific staff available to work in, and operate, these facilities.
Government Services Administration (GSA) budget for building operations, alterations and repairs by over $220 million. GSA manages over 360 million square feet of buildings, and is on the path towards reducing the energy intensity (energy use per square foot) of this space 30 percent by 2015 compared to 2003. The cut to GSA’s funding would be a severe set-back in efforts to achieve this goal. More NRDC analysis of this cut is here.

As bad as the bill is for clean energy, it could have been even worse. Some of the more egregious amendments not included in the bill were:

Congressman Akin’s (R-2nd, MO) Amendment No. 181 to withhold funding from DOE to implement the light bulb efficiency standards passed in the Energy Independence and Security Act of 2007 with bipartisan support. The light bulb efficiency standards require new bulbs to use 25 to 30 percent less energy than today’s incandescent light bulbs beginning in 2012, and 65 percent less energy by 2020. The standards that begin to go into effect in 2012 would not ban the incandescent bulb – only require them to be more efficient. Congressman Akin offered, but then withdrew the amendment. NRDC’s analysis of the light bulb efficiency standards benefits is here.
Congressman McClintock’s (R-4th, CA) Amendment Nos. 300-310 and 312-321 that would have eliminated vital programs in solar, wind, and biomass (and many others) at the DOE EERE Program. The House did not consider any of these amendments.
Congressman Latta’s (R-5th, OH) Amendment No. 259 to cut the EERE Program by $70 million. The House rejected the amendment 137 to 293.
Congresswoman Biggert’s (R-13th, IL) Amendment No. 192 to zero out the Advanced Research Projects Agency –Energy (ARPA-E). ARPA-E funds specific high-risk and high-payoff game-changing research and development projects to meet the nation’s long-term energy challenges. The House rejected the amendment 170 to 262. More NRDC analysis about the benefits of ARPA-E is here.
Congressman Pompeo’s (R-4th, KS) Amendment No. 86 to eliminate $115 million of the funding for the Department of Defense’s alternative energy research. This funding is critical to enhancing the mission capability of our troops and developing new clean energy technologies that will benefit our country as a whole. The House rejected the amendment 109 to 320.

These attacks on clean energy go against what strong majorities of our citizens want – more clean energy that strengthens our economy and national security, creates much-needed jobs, and improves our health and environment. There were, however, a couple of votes that give us some hope that bipartisan resistance to this onslaught will emerge. Over 100 Republicans joined with Democrats to soundly reject the Biggert ARPA-E, Latta EERE and Pompeo Department of Defense amendments described above.

The Senate, rightly, seems intent to ignore the House bill and return to sensible budgeting. And maybe once Congress finally funds the government – now that we’re five months into the fiscal year – they can turn to shaping energy policy. There are some signs that there could be bipartisan progress in the Senate. One recent example is Senator Lisa Murkowski’s (R-AK, Ranking Member, Senate Energy and Natural Resources Committee) co-sponsorship of an energy efficiency standards bill supported by environmental groups and industry. Clean energy, after all, is not a partisan issue – it’s just the right thing to do for our country.

Thanks to my colleagues Christina Angelides, Robin Roy and Cai Steger for their contributions to this post.

Senate Tax Bill a Major Step Backwards for the Environment

2010-12-13T11:43:06Z

Jim Presswood, Federal Energy Policy Director, Washington, DC

The tax bill agreed to last Thursday by Senators Harry Reid and Mitch McConnell contains an energy package that would cause substantial environmental harm. The offending provisions are the tax credits for corn ethanol and liquid coal. While the bill contains several critically needed clean energy incentives, their environmental benefit is outweighed by the harm that would result from the ethanol and liquid coal incentives. NRDC is therefore opposing the bill. Our analysis of the bill and information on what you can do to help are below.

Liquid Coal

The bill extends a 50 cent per gallon tax credit for liquid coal transportation fuels – fuels produced by liquefying coal. This provision must be stripped from the bill. Congress should not be doing anything to help a liquid coal industry get off the ground. The production and use of liquid coal fuels releases more than twice the carbon pollution as conventional fuels. Even if some of the carbon pollution from the production process is captured and disposed, the fuel might still result in more pollution than conventional fuels. There are also the severe environmental impacts from coal mining, which include habitat loss, groundwater contamination and mountaintop removal.

The bill extends the tax credit provided by Sections 6426 and 6427 of the federal tax code. While fuels qualifying for the credit have to come from production facilities that capture and dispose of 75% of their carbon pollution, that’s not enough to bring emissions down to parity with conventional fuels. Moreover, this incentive is intended to commercialize a fundamentally flawed technology. Once commercialized, there is little evidence that the next generation of plants will perform any carbon and capture at all. My colleague Brian Siu's recent blog post and our liquid coal fact sheet provide more information about the problems of liquid coal and the bill's tax credit for this dirty fuel.

Corn Ethanol

The bill includes a one-year extension of the Section 40 corn ethanol tax credit. The corn ethanol lobby went into this year demanding a 5 year extension of this credit (officially called the volumetric ethanol excise tax credit or VEETC). The Senate and President Obama have seen fit to say no and only offer a one-year extension. This will save tax payers $25 billion. But this is still a huge waste of tax payer dollars. Ending the tax credit now would save an additional $6 billion. Reducing the tax credit by 20% would save $1.25 billion. Saying no to 5 years is a start, but Congress should go further and end this wasteful, environmentally harmful handout. Sending 70cents of every renewable energy dollar to oil companies to use ethanol defies common sense. It is time to invest in new fuels and clean energy sources that provide long-term energy security and clean up the air and water that we all need..

Renewable Electricity

The bill contains a critically needed extension of the Convertible Renewable Tax Incentive for renewable electricity projects. As discussed in this NRDC blog post, Congress enacted the program to provide renewable projects that qualified for federal tax credits to take a grant in lieu of the tax credits, which became essentially worthless because of the recession. There has been little change in these economic conditions , so extending the program is essential to the continued growth of the renewable energy industry. According to this study by the U.S. Partnership for Renewable Energy Finance, an extension would help to create or preserve 100,000 jobs.

Efficiency

The bill makes minimal progress to promote energy efficiency. On the positive side, it extends the credit for energy efficient new homes (Section 45L), which has been caught in limbo since it expired in 2009. We are pleased to see this extension apply retroactively to 2010 and through 2011. The bill also extends the credit for manufacturers of energy efficient refrigerators, dishwashers and clothes washers, but cuts the amount of the credit by two-thirds for any individual taxpayer. While the bill also extends the credit for energy efficiency in existing homes (Section 25C), it does so in a way that cuts out the legs from under it. Unfortunately, the current extension of Section 25C is too measly to encourage most homeowners to invest in energy efficiency (in particularly energy efficient equipment like furnaces and water heaters) and many homeowners won’t even be eligible.

What’s Missing?

The bill does not include an expansion of the Section 48C advanced energy manufacturing tax credit. This credit is an essential federal investment needed to help retool America’s factories to make clean energy technologies possible. The limit on the total amount of tax credits available under the provision was quickly reached after Congress enacted it, leaving more than $5.8 billion in applications that could not secure tax credits. Congress should increase the limit on the total amount of tax credits by $5 billion to help create green jobs right here in America.

What can you do to help?

Both the Senate and House are considering the bill, and could be voting any day now on whether to pass the legislation. Contact your Senator and Representative as soon as possible. Call the House at 202-225-3121 and then call the Senate at 202-224-3121. Urge them to make sure the final bill promotes clean energy and good jobs, and not more harmful, wasteful spending. More specifically, they should 1) strip out the liquid coal tax credit, 2) remove (or at least reduce) the corn ethanol tax credit, and 3) use the money saved from cutting the dirty fuel credits to offset the cost of adding the Section 48C advanced energy manufacturing tax credit.

Ten Key Clean Energy Policies for Senate Legislation

2010-07-06T20:05:53Z

Jim Presswood, Federal Energy Policy Director, Washington, DC

The U.S. Senate is on the verge of taking up climate and energy legislation that could be a giant step towards a clean energy economy if it has the right policies. The urgency and importance of transitioning to clean energy has never been clearer. The Gulf of Mexico oil disaster serves as a constant reminder of the need to break our dependence on oil and other fossil fuels.

Many countries are already well underway in a race to develop the technologies that achieve this goal. A comprehensive climate and energy bill would help ensure America doesn’t get left behind. The bill would also create millions of good American jobs, enhance national security, and curb the pollution that causes global warming.

The cornerstone of an effective Senate bill is carbon pollution limits, which my colleague Dan Lashof discusses here. These limits are essential to spurring clean energy innovation and investments. A bill without carbon pollution limits is a piecemeal approach that could cause more harm than good for the reasons described by my colleague David Doniger here.

Our country also needs clean energy policies that target specific sectors of the economy such as buildings, industry and power generation. Carbon pollution limits must be supplemented with these policies to ensure that each of these economic sectors makes the transition to clean energy in a quick and cost-effective manner.

I briefly describe below ten key clean energy policies that the Senate should include in the climate and energy bill.

Clean Energy Codes and Standards

Minimum Utility Energy Efficiency Requirement – The bill should require that electric and natural gas utilities meet a minimum energy efficiency requirement. This requirement should be either: 1) an energy efficiency resource standard (EERS) that requires utilities to save 1% of their electricity sales per year through energy efficiency, ramping up to 2.5% per year over time, or 2) a requirement that utilities invest in cost-effective energy efficiency an amount equivalent to the value of 20-33% of the carbon allowances they are allocated pursuant to the bill. Read more about this recommendation here.
Renewable Electricity Standard – The bill should establish a renewable electricity standard (RES) of 20% by 2020 and 25% by 2025. The American Clean Energy Leadership Act (ACELA, S. 1462), which the Senate Energy Committee reported last year, has a 15% by 2020 RES. The stronger 20% by 2020 and 25% by 2025 targets are needed to ensure robust deployment of renewable resources. The ACELA RES also encourages dirty energy technologies by: 1) removing technologies such as nuclear plants, large scale hydro-electric dams, and municipal solid waste incinerators from the baseline that is used to determine an individual utility’s RES target, and 2) making biomass power plants that use feedstock from high-carbon, environmentally sensitive areas an eligible resource to meet the RES. These dirty energy technologies should not be encouraged by utility performance standards.
Building Energy Codes – The bill should include a requirement that new buildings be 30% more efficient by 2015 and 50% more efficient by 2018 compared to recent model building energy codes. ACELA already has a building energy codes provision that encourage states to adopt and enforce codes that meet these targets. The Practical Energy and Climate Plan (S. 3464) introduced by Senator Lugar has a somewhat stronger building energy codes provision than ACELA. A backstop mechanism, however, would need to be added to both bills to ensure that buildings in states that fail to adopt and enforce the codes still meet the targets. The Senate climate and energy bill should include such a codes provision along with the backstop mechanism. The bill also should contain a provision that requires changes to underwriting and appraisal standards as recently proposed by the Leading Builders of America and the Institute for Market Transformation here. These changes would ensure that energy costs of a home are considered in calculating the costs of home ownership in the mortgage process. Congress should also appropriate $100 million in FY 2011 to states for code adoption, training and enforcement, with increased funding over time.
Oil Savings Target – The bill should establish a national target that reduces oil consumption and increases safer sources of supply (through enhanced oil recovery using permanently sequestered manmade CO2) by a combined 2 million barrels per day by 2020, 8 million barrels per day by 2030, and 20 million barrels per day by 2050, relative to 2005 levels. To meet the targets, all relevant agencies should be required implement measures within their jurisdiction to accomplish the savings. These measures can include higher fuel economy, smart growth and transportation efficiency, sustainable low carbon fuels, vehicle electrification, and increasing domestic oil production through enhanced oil recovery.

Clean Energy Investments and Incentives

Transportation Efficiency Policies – The bill should include transportation efficiency policies that support options such as public transportation and high-speed rail, and encourage more convenient and livable communities. Such provisions would direct the Environmental Protection Agency (EPA) and the Department of Transportation (DOT) to set a national greenhouse gas (GHG) reduction goal for the transportation sector and set standards to evaluate progress. The provisions would also amend transportation planning rules to require state departments of transportation and larger metropolitan planning organizations to set GHG targets, develop transportation plans certified by DOT and EPA to show progress toward goals, and report on progress. Finally, the transportation efficiency provisions should authorize a grant program to assist with increased planning expenses and offer incentive grants to help states and metropolitan planning organizations implement plans. Every major climate bill in both houses of Congress contains these transportation efficiency measures.
Advanced Energy Manufacturing Tax Credit – The bill should include the SEAM Act (S.3324), which expands the Qualifying Advanced Energy Project tax credit (I.R.C. Sec. 48C) to provide up to $5 billion in tax credits. The American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) established the incentive, which includes a $2.3 billion cap. This funding was quickly used to support 183 new or expanded manufacturing facilities, and hundreds of projects were denied because of lack of funding. The additional funding would be used to support many of these unfunded projects.
Building Energy Retrofit Incentives – The Home Star Energy Retrofit Act (S.3434) should be included in the bill if it has not already been passed in other legislation. The bill should also include a longer term program to incentivize whole-building performance-based efficiency retrofits for residential and commercial buildings. The program should be modeled after the Gold Star performance path in Home Star for residential buildings and similar to the performance path in the State Energy Efficiency Retrofit Program (ACELA Sec. 262) for commercial buildings.
Treasury Grant Program – The bill should extend the Treasury Grant Program enacted in ARRA until 2012. The program enables those eligible for a commercial renewable electricity project investment tax credit (I.R.C. Sec. 48) to take a Treasury Grant instead of the tax credit.

Clean Energy Financing

CEDA – The bill should include a Clean Energy Deployment Administration (CEDA) that provides credit support to emerging technologies to help them cross the financing “valley of death” that often prevents demonstration-scale projects from developing into commercial-scale ventures. ACELA already contains a CEDA (Title I, Subtitle A), but the following modifications need to be made to the provision: 1) include limitations to ensure that high-carbon technologies do not receive CEDA support, 2) remove the exemption of CEDA from important taxpayer protections contained in the Federal Credit Act of 1990, 3) include an overall cap on the amount of credit support that can be provided by the program, 4) remove the requirement that CEDA be “self-sustaining,” and 5) eliminate the merger of CEDA with the existing Department of Energy Loan Guarantee Program. None of these modifications would inhibit CEDA from providing robust support to emerging technologies.
IMPACT – The bill should also include the IMPACT Act (S. 1617), which establishes state revolving loan funds to support efforts by medium and small manufacturers to increase their energy efficiency and produce clean energy technologies.

My colleagues and I plan to post more detailed blogs about each of these policies.