Energy Legal Blog

Senate Committees Take Up Energy Efficiency Standards and Clean Energy Investment Incentives

Two bipartisan energy efficiency bills are wending their ways through the US Congress.  In late April the Senate Energy and Natural Resources Committee held hearing on the Energy Efficiency Promotion Act of 2007, sponsored by Committee Chair Jeff Bingaman (D-NM) and Ranking Member Pete Domenici (R-NM).  And in the Senate Finance Committee, Senator Maria Cantwell (D-WA) introduced the Clean Energy Investment Assurance Act of 2007 on May 11.

Energy Efficiency Promotion Act of 2007

This bill rewards efficient use of oil, natural gas, and electricity, reduce oil consumption, and heighten energy efficiency standards for consumer products and industrial equipment.  The bill contains provisions to: (1) assist state and local governments in energy efficiency; (2) promote federal leadership in energy efficiency and renewable energy; (3) expand use of advanced lighting technologies; (4) implement new energy efficiency standards; (5) develop and market high efficiency vehicles, advanced batteries, and energy storage; and (6) otherwise establish energy efficiency goals.  As an example of the detailed proposals in the current version of the bill, the advanced lighting technologies section would set incandescent reflector lamp efficiency standards, offer Bright Tomorrow lighting prizes, and accelerate procurement of energy efficient lighting. 

Douglas Johnson, Senior Director of Technology Policy and International Affairs at the Consumer Electronics Association (“CEA”), has raised questions regarding design mandates in the bill that unwittingly could stymie innovation and conflict with successful existing federal programs such as Energy Star.  In addition, CEA is concerned that the bill redefines “energy conservation standard” in a way that mandates specific technologies and product components in addition to the energy efficiency products themselves.

While CEA has expressed its commitment to working with legislators to develop federal solutions, it fears that legislating over Energy Star could be “a step backwards.”

Clean Energy Investment Assurance Act of 2007

The bill proposes to amend portions of the Internal Revenue Code of 1986 to encourage investment in clean energy technologies using enhanced and predictable tax credits.  If enacted, the bill would (1) extend until 2013 the renewable electricity production credit; (2) extend and expand the Clean Renewable Energy Bond program that provides public power systems with interest-free borrowing for renewable energy projects; (3) extend two provisions until 2017, namely the 30-percent tax credit for the purchase of residential solar power, solar water heating, fuel cell equipment, and qualified energy storage air conditioner property and the 30-percent business tax credit for investments in solar energy equipment, fuel cell power plants, and qualified energy storage air conditioner property; and (4) extend three provisions until 2013, namely the tax credit for the construction of new energy-efficient homes, the deduction for investments in energy efficient commercial buildings, and the 10 percent investment tax credit for the cost of energy efficient materials used in the construction of buildings.

"Encouraging private investment in renewable energy is an indispensable part of reducing emissions and curbing our overdependence on fossil fuels," explained Senator Cantwell  "To get consumers better technology and cleaner, more renewable, more efficient energy options," she continued, "we need predictable federal incentives to encourage investment."