Green on the Hill: Not a Lot of Energy in Senate Manufacturing Bill

An industrial energy efficiency bill is on the move in the Senate once again. The big question is whether it will pass the House. In the last session, the fairly significant manufacturing provisions in the previous Senate bill were watered down considerably when the overall legislation arrived in the House. No manufacturing provisions of substance were left in that energy efficiency bill when President Obama signed it.

Now Sens. Jeanne Shaheen, D-N.H., and Rob Portman R-Ohio, are once again starting to climb up the manufacturing mountain. However, there is not a lot of significant load in their backpacks this time around. The bill is called the Energy Savings and Industrial Competitiveness Act of 2013 (S. 761). It passed the Energy and Natural Resources Committee on May 13, 2013, with only three Republican senators dissenting. The other seven GOPers supported the bill. All Democrats voted for it. So there is good bipartisan support. That was true of last year’s version, too, but unfortunately, that didn’t prevent the House from turning the manufacturing provisions into gruel.

Once again some of the most important provisions in the 2013 bill seem destined to be offloaded in the cost-conscious House. That is true of the new $250 million Commercial Building Energy Efficiency Financing Initiative. That money would be authorized. Whether it would ever be appropriated is a separate question, and one, given the current federal budget climate, that is likely to be answered in the negative. Neal Elliott, associate director for Research with the American Council for an Energy-Efficient Economy, said it is “a pretty vulnerable provision.”

Title III of the bill addresses industrial efficiency and competitiveness. Subtitle A focuses on manufacturing energy efficiency–or purports to. It really simply makes bureaucratic changes within the U.S. Department of Energy’s (DOE) industrial efficiency programs. Those programs would have to coordinate with the Manufacturing Extension Partnership Centers of the National Institute of Standards and Technology, the Building Technologies Program within Energy, and increase partnerships with the National Laboratories. So essentially that whole section is a directive to the DOE to play nice with others.

Part of the reason that the Shaheen-Portman bill is stocked with many “no-chance” and antiseptic provisions is that both House and Senate members, and probably members from both parties, are loathe to give the industrial energy efficiency program at the DOE any new meaningful authority given that office’s lack of focus, organization, and energy.

The two current supervisors of research and deployment there—who report to the director—are acting supervisors, and the acting deployment supervisor has other responsibilities within the DOE. It is still yet unknown when a new director will be appointed.

It is worth noting that the Shaheen-Portman bill authorizes $10 million a year (again, little certainty that this program actually will be funded) for a new industrial rebate program for companies that purchase qualified, energy-efficient transformers.

This provision seems tied to a final rule the DOE issued in April setting new energy efficiency standards for three types of transformers. Those standards go into effect in 2016. One of those types is low-voltage, dry-type transformers, which are typically used by commercial and industrial users. When Kathleen Hogan, deputy assistant secretary, Office of Energy Efficiency and Renewable Energy, DOE, appeared before the Senate Energy Committee to testify on the Shaheen-Portman bill, she said the new low-voltage, dry-type efficiency standard represents a 30 percent energy savings over the prior standard and provides estimated net benefits of up to $11.8 billion on equipment sold through 2045.

Those net benefits ostensibly are a reference to the savings on electricity that industrial users will chalk up. Andrew deLaski, executive director of the Appliance Standards Awareness Project (ASAP), who was intimately involved in the DOE rulemaking on transformers, said, “Generally, more efficient transformers include more and higher-quality materials, such as steel cores and aluminum or copper windings, so they will cost more upfront. But, the DOE analysis found that the additional upfront cost will be more than made up in lower electricity bills for commercial and industrial users.”