Issue Brief

Energy Efficiency

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Energy efficiency—the ability to maximize energy use via more efficient technologies throughout the electric utility system, as well as for electric customers to minimize their energy use by using a variety of tools, technologies, and behaviors—is one of the most important, cost-saving tools available to utilities to meet energy demand, defer generation investment, and reduce greenhouse gas and other emissions. The federal government creates incentives for energy efficiency through legislation, regulations, the tax code, and executive orders. The American Public Power Association (Association or APPA) provides tools and support for its public power members to deploy energy efficiency measures at their utilities, and is generally supportive of federal efforts to encourage and support such activities so long as they are cost-effective for consumers and have a reasonable payback period.

Congressional Action

Several energy efficiency measures have been introduced in the 115th Congress. Of most interest to public power are:

S. 385/H.R. 1443 – the Energy Savings and Industrial Competitiveness Act

Sponsored by Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH) in the Senate and Representatives David McKinley (R-WV) and Peter Welch (D-VT) in the House, these bills (which are similar, but not identical) revise a variety of programs to encourage energy efficiency in buildings, the industrial sector, federal government, and certain appliances. S. 385 was reported out of the Senate Energy & Natural Resources Committee on May 10, 2017. It was also incorporated into S.1460, the comprehensive energy bill introduced by Senators Lisa Murkowski (R-AK) and Maria Cantwell (D-WA). APPA supports S. 385, but also believes the mandates and other requirements in the bill should be changed to voluntary goals. APPA is particularly supportive of the following sections in S. 385:

  • Section 112—would authorize $10 million for career skills training programs for classroom instruction and on-the-job training for industry-related certification to install energy efficient building technologies. One of APPA’s strategic initiatives is workforce planning and development, and the Association believes this program, along with other workforce initiatives, will advance energy workforce development.
  • Sections 221 and 231—would establish rebate programs at the Department of Energy (DOE) to encourage the replacement of inefficient electric motors and transformers.
  • Sections 421 and 422—would repeal the requirement in Section 433 of the Energy Independence and Security Act (EISA) of 2007 that new and existing federal buildings undergoing major renovations phase out fossil fuel-generated energy consumption by 2030. The federal government has been unable to find a long-term path for compliance with this unrealistic requirement. Sections 421 and 422 offer the federal government the flexibility to achieve its energy efficiency goals without the energy ban by providing energy intensity reduction goals; encouraging the use of energy management systems; reducing the frequency of energy audits for facilities achieving their energy intensity goals; requiring alterations and additions to existing federal buildings to meet model energy codes and requiring federal buildings to meet state or local energy codes where they are stronger; applying the standard of “30-percent-better-than-code” to major renovations; and strengthening the “30-percent-better-than-code” requirement.

S. 1071 – the Duplicative Green Building Program Evaluation Act

Sponsored by Senator Jeff Flake (R-AZ), S. 1071 would direct DOE to evaluate potentially duplicative green building programs and determine if there are ways to eliminate overlap, improve coordination, and increase their effectiveness.  The Association believes the bill would encourage good governance and ensure maximum funding and management of green buildings programs at DOE.

Finally, House Energy & Commerce Committee Chairman Greg Walden (R-OR) and Energy Subcommittee Chairman Fred Upton (R-MI) have made a comprehensive review of the Energy Policy and Conservation Act (EPCA) a priority for this Congress. EPCA was enacted in 1975 to “increase energy production and supply, reduce energy demand, provide energy efficiency, and give the executive branch additional powers to respond to disruptions in energy supply.” Among other things, the statute directs DOE to conduct regular reviews of efficiency standards. APPA has been concerned about the pace at which DOE has been updating such standards and the burdens they create on utilities and consumers.

Regulatory Action

On March 28, 2017, President Trump signed Executive Order (EO) 13783, entitled “Promoting Energy Independence and Economic Growth.” EO 13783 requires the heads of agencies to review all existing regulations, orders, guidance documents, policies, and any other similar agency actions that potentially burden the development or use of domestically produced energy resources. DOE formed a Regulatory Reform Task Force to conduct a review of agency action subject to review under the EO. On May 30, 2017, DOE published a Request for Information (RFI) in the Federal Register seeking input from entities significantly affected by DOE regulations. The RFI closed on July 14, 2017, with DOE receiving 132 public comments. After reviewing those comments, the Task Force recommended reviewing the DOE Appliance Standards Program, which sets separate test procedures and minimum energy conservation standards for more than 60 categories of appliances. The department will look at four proposals to reduce regulatory burdens from these appliance standards.

American Public Power Association Position

The Association strongly supports legislation to improve energy efficiency in multiple sectors. Many public power utilities have already taken steps either through federal incentives, other funds, or local initiatives to improve energy efficiency for their customers. APPA will continue to monitor and work on priorities with stakeholders in the House Energy & Commerce and Senate Energy & Natural Resources Committees in the 115th Congress. This includes working closely with the House Energy & Commerce Committee as it reviews EPCA to ensure that the payback period for efficiency standards issued under the act are reasonable and cost-effective. In addition, APPA supports S. 1071 and the goals and intent of S. 385 and H.R. 1443. The Association supports the repeal of Section 433 and would like to see the issues regarding mandates and other requirements that are included in the Section 433 replacement provisions addressed as these bills move forward in the legislative process.