Last Friday, the House of Representatives passed a landmark climate and energy bill that would finally begin to address the climate crises and move us towards a rational energy policy in this country. There are many key efficiency provisions in the bill, including,

  • Improved building energy codes
  • Incentives for efficiency retrofits of existing buildings
  • Incentives for best in class appliances
  • New consensus standards and improvements to the standard setting process at the Department of Energy

For more detail on any of these, see my blog posts on the first draft of the bill here and here.

All of these policies will have a significant impact on future energy consumption and will save taxpayers money, but as with any important bill, last minute deals were made to gather the needed votes. Unfortunately, a couple of these last second changes significantly weakened key efficiency provisions that would save billions.

Both the building energy labeling provision and the outdoor lighting standard were worsened in the final bill. These losses hurt double in a climate bill, because the energy saved by efficiency not only pays for itself and makes money, but also reduces demand for carbon allowances and therefore lowers carbon prices. It is hard to say whether the opposition to these policies resulted from genuine misunderstanding or obstinacy, but the result is the same – we could be saving a lot more money.

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In the case of the building energy labeling program, earlier drafts of the bill directed EPA to begin developing a technically sound and extremely flexible voluntary building energy label for homes and commercial buildings. Years later, when the label was ready for deployment, states would have been funded to label buildings in any way they chose. The National Association of Realtors opposed the provision but is unclear how efficiency information would have harmed their members.

A last second amendment limited the program to new construction only, robbing the current and future owners of today’s buildings. The label would have helped those consumers understand the efficiency of their buildings and identify low and no cost opportunities to save money and energy. No building, new or existing, needs to be left out of a voluntary energy label.

It is discouraging that some would prefer to hide efficiency information from consumers in any circumstance. Ignoring wasted energy doesn’t make it go away. It is also confounding that the lawmakers that led the charge to include this amendment also pushed for policies that would incorporate energy efficiency into the financing process. Without a technically sound and dependable building energy label, how will the financial industry be able to compare the efficiency of one property to the next?

Outdoor Lighting

The outdoor lighting standard that would have covered street lights and parking lot lights was also significantly weakened. Every date in the provision was moved back 5 years and the final tier of the standard (in terms of the amount of light per watt of energy consumed) that would not have taken effect until 2015 was removed completely. While the standard only applies to new fixtures, some parties led a misinformation campaign incorrectly claiming that currently installed fixtures would need to be replaced.

These changes are problematic because of the lost energy savings. Philips Lighting estimated that the standard as originally written could save consumers $3.6 billion annually once the existing stock of fixtures is fully replaced. With these last minute changes, the energy savings will be reduced by almost 1 Terawatt-hour, enough to power about 80,000 homes for a year.

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At least one utility opposed the provision, citing extremely high cost figures as a result, but the standard would only have required more efficient lights when the existing units were being replaced so the incremental cost was not very high. This is interesting from the utility perspective, since the costs of running street lights are eventually paid for by the utility customers or taxpayers, standard or no standard. There must be some benefit to certain utilities for continuing to waste this energy since there are only disadvantages for consumers.

To complicate matters further, this weakened national standard, if it becomes law, would prevent states from setting their own more aggressive standards to benefit their citizens. The state/federal preemption issue on standards is something that comes up regularly. For this reason it is extremely important for federal standards enacted through legislation to be based on science rather than determined arbitrarily.

Moving Forward

Overall the bill is a significant win for efficiency, containing a cap on carbon emissions, improved building codes, other appliance standards, and incentives for retrofits of existing buildings and the best appliances, but it is extremely unfortunate that some benefits were left on the table. Labels and more efficient street lights could have saved tremendous amounts of money and energy and would have augmented the effectiveness of the policies that remain in the bill. The political process is tricky, but hopefully these policies can be improved in the near future as part of the overall final climate and energy bill.