July 11, 2012
NAESCO Chairman Jim Dixon's Op-Ed on Shaheen-Portman and Bass-Matheson
Will Beltway gridlock prevent 150,000 jobs and $20 billion in energy savings?
Jim Dixon is Chairman of the National Association of Energy Services Companies and is currently the Vice President, Legal & Compliance Services, Consolidated Edison Energy
As we enjoy our summer and watch the national election campaign push aside all policy and legislative deliberations for the next four months, perhaps we can take a minute to think about ways we can show our politicians how they should work together today for the good of the country.
One easy thing they can do is to pass legislation that has broad bi-partisan sponsorship and that would enable the nation to take several small, non-controversial steps toward increased energy efficiency. The legislation is embodied in two bills-- Senate bill, S 1000 (Shaheen-Portman) and House bill, HR 4017 (Bass-Matheson), both of which contain very similar provisions. There is little controversy about the substance of the bills, and most of the provisions of the bills seek to actually implement actions that are already mandated by law. However, neither the Senate or the House is likely to act on the proposed legislation because both Republicans and Democrats are worried about how their votes might be positioned in terms of the politics of the presidential campaign.
Both bills are based on the recognition that no form of energy the country uses in the future – coal, nuclear, natural gas, oil, solar, wind or biomass – will be cheap enough to use as wastefully as we use energy today. The bills mandate that the government truly leads by example and eliminates the waste of energy in government buildings. Conservatives like these provisions because energy efficiency retrofits of the over 500,000 buildings owned and or operated by the federal government simply stop the waste of energy and reduce utility costs to boot. Liberals like these provisions because the more efficient use of energy reduces the use of the fossil fuels currently being used to provide electric power thereby reducing greenhouse gas emissions. Both conservatives and liberals like the provisions because they create jobs – about 150,000 good jobs – across the country.
Let’s take a quick look at the provisions.
Section 101: Utilizing Energy Savings Performance Contracts
The Bass-Matheson bill would require that the federal government utilize private investment to meet the energy efficiency requirements of the Energy Independence and Security Act of 2007 (EISA), amending National Energy Conservation Policy Act (NECPA). The logic behind this requirement is that performance contracts allow the government to cut energy waste without using appropriated funds, by re-purposing the money currently spent on wasted energy into a project financing payment stream. Since the federal government can finance projects today at historically low rates, this seems like a no-brainer.
Section 102: Demand Response Programs
The Bass-Matheson bill would require that federal government facilities participate in the demand response programs operated by utilities or electric system operators (ISOs and RTOs). Participation in these demand response programs would reduce the electric bills of the federal facilities, and lower the electric bills of all the electricity customers, by reducing the need for the utilities to generate or buy very expensive power to serve peak loads. Tens of thousands of privately owned buildings are participating in demand response programs across the country. Why not the government? Another no-brainer.
Section 103: Federal Data Center Consolidation
The Bass-Matheson bill would require federal agencies to consolidate data centers on a rapid timetable in order to save energy in unnecessary computer equipment and in the space conditioning of unnecessary computer space. Again, private industry is doing this as fast as it can. Why not the government?
Section 104: Adoption of Personal Computer Power Savings Techniques by Federal Agencies
Both the Bass-Matheson and the Shaheen-Portman bills would require federal agencies to develop and implement standards for the energy-efficient operation of computer systems. Do I need to repeat no-brainer?
Section 105: Best Practices for Advanced Metering
Both the Bass-Matheson and the Shaheen-Portman bills would require federal agencies to develop best practice programs for the installation of advanced energy metering and automated building control systems that were mandated by federal law almost a decade ago. It has been a business mantra for decades that you can’t manage what you can’t measure. Private building owners know that some of the most cost-effective energy efficiency improvements, which often have paybacks of 1-2 years, are in control systems.
Section 106: Federal Energy Management and Data Collection Standard
Both the Bass-Matheson and the Shaheen-Portman bills would require federal agencies to use a web-based system to benchmark and track the energy performance of their buildings. These systems have been used in private industry for fifteen years or more, and are now being implemented in a number of states across the country.
Section 201: Loan Program for Energy Efficiency Upgrades to Existing Buildings
Both the Bass-Matheson and the Shaheen-Portman bills would establish a loan guarantee fund for existing buildings of all types. The risk profile for these loan guarantees are not in the same realm as the widely-publicized loans to Solyndra and other solar energy manufacturers: they are not bets on breakthrough technologies. Instead, these new loan programs would provide credit enhancements or portfolio loss guarantees to help home and building owners finance basic energy efficiency improvements in today’s credit-constrained environment.
Section 202: Coordination of Research and Development of Energy-Efficient Technologies for Industry
Both the Bass-Matheson and the Shaheen-Portman bills would require US DOE to coordinate the activities of its various offices and programs that are researching and promoting the implementation of industrial energy-efficient technologies. Seems hard to believe that this coordination would require legislation.
Section 203: Combined Heat and Power and Waste Heat Recovery
The Bass-Matheson bill would mandate US DOE to develop a plan to double the use of combined heat and power and waste heat recovery in the US by 2020 and document progress toward the goal.
Jobs, Increased Income, Emissions Reductions, Increased Competitiveness, etc.
In addition to reducing the waste of energy and taxpayer dollars in federal facilities, the Bass-Matheson and Shaheen-Portman bills will help to revitalize the US economy in several ways:
An assessment conducted by the American Council for an Energy-Efficient Economy (ACEEE) estimates that the Shaheen-Portman bill would provide more than $20 billion in net energy savings to American households and businesses from 2012 – 2030, and support a net increase of 159,000 jobs in 2030;
ACEEE’s analysis also indicated that the legislation would cut the amount of carbon dioxide emitted in the U.S. by 108 million metric tons in 2030, which would be the equivalent of taking more than 23 million cars off the road. These emissions reductions are a no-cost side benefit of cutting energy waste; and
The energy efficiency initiatives contained in the bill would help facilitate the manufacture and deployment of energy efficiency technologies at home rather than abroad, and pay for themselves through energy savings relatively quickly.
So What’s Holding Up the Bills?
Politics.
Neither the Republicans who control the House nor the Democrats who control the Senate seem to want to move these bills, even though the bills have obvious benefits for Americans of every political persuasion. The holdup seems to be a prime example of Beltway gridlock. The current discussion among the Senate leadership is that if they allow the Shaheen-Portman bill to come to the Senate floor, how many non-germane amendments (amendments unrelated in any way to the substance of the bill) will be piled on the bill before the vote. So we have two perfectly sensible bills, which have strong bi-partisan support in the Congress and would have strong support across Main Street America, held in limbo by political maneuvering that is meaningful only to campaign ad writers and political consultants.
If you think that it’s time for a change, let’s start here. Let’s get the Congressional leaders to let these bills come to a vote.