Energy efficiency: A bright idea – and a missed opportunity

The cheapest source of power - and the cheapest way to reduce carbon emissions - is conservation.

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In May, a partisan feud over the Keystone XL pipeline resulted in the demise of broadly popular, bipartisan energy efficiency legislation sponsored by Sens. Jeanne Shaheen (D-NH) and Rob Portman (R-OH).

The Energy Savings and Industrial Competitiveness Act proposed a national energy efficiency strategy and would have, among other things, required the federal government to adopt energy efficiency measures, strengthened national model building codes to make new construction more efficient and encouraged partnerships with industry to spur innovation and adoption of energy-saving technologies. But thanks to the inclusion of much more controversial provisions involving the Keystone pipeline, the bill failed to win the 60 votes necessary in the Senate to move forward.

The failure to pass Shaheen-Portman is especially tragic in light of the Environmental Protection Agency’s (EPA) recently proposed rules to require a 30 percent reduction in carbon emissions by 2030 from existing power plants. While stakeholders may spar over the reasonableness of these proposed rules, there’s little dispute that energy efficiency is the cheapest way to reduce emissions.

For example, a recent report from the American Council for an Energy Efficient Economy (ACEEE) concluded that generating new electricity can cost up to three times more than “finding” electricity through improved energy efficiency.

Energy efficiency programs cost about three cents per kilowatt hour, says the ACEEE, compared to about 10 cents per kilowatt hour for newly generated power. Even compared to energy generated from such low-cost sources as natural gas, the price of energy “generated” by savings from energy efficiency is still lower:

[E]nergy efficiency is clearly holding steady as the least-cost energy option that provides the best value for America’s energy dollar… As utility and state planners face increasing uncertainty and rising supply costs in their long-term planning (including fuel-price volatility and the need to address the environmental impacts of power generation), they should look to energy efficiency as a reliable and consistent “first fuel” in their … order of energy options.

Improving energy efficiency creates downstream benefits as well. The ACEEE’s analysis of energy efficiency programs in nine states found that “each dollar invested by utilities and participants in energy efficiency measures yields $1.24 to $4.00 in benefits,” including the reinvestment of money into new jobs and industries.

Passing Shaheen-Portman could also have helped mitigate the now painful politics of energy policy. The measure’s cosponsors included Senators hailing from oil, gas and coal-friendly states such as Mary Landrieu (D-LA) and Joe Manchin (D-WV), as well as members representing a broad ideological coalition of both parties, including Susan Collins (R-ME), Mark Warner (D-VA), Kelly Ayotte (R-NH), , Roger Wicker (R-MS), Al Franken (D-MN), Johnny Isakson (R-GA), Chris Coons (D-DE), and John Hoeven (R-ND).

Moreover, the bill had also won the endorsement of a 200+ member coalition that includes organizations as varied as the Environmental Defense Fund, Honeywell and Habitat for Humanity, while a separate study by ACEEE concluded the Shaheen-Portman bill would have generated 190,000 jobs and saved consumers $16.2 billion by 2030.

It’s not impossible for a revival of this legislation. In the meantime, chalk up one more victim of election-year politics and ideological rigidity.

  • S. 1392, The Energy Savings and Industrial Competitiveness Act (Shaheen-Portman)