With both chambers having introduced efficiency bills, can Congress show cooperation on an issue with broad bi-partisan support?

This week Congressman Bass (R-NH)  introduced  a bi-partisan energy efficiency bill, the Smart Energy Act, H.R. 4017, together with  five cosponsors: Reps. Jim Matheson (D-UT), Peter Welch (D-VT), John Barrow (D-GA), Robert Dold (R-IL) and Michael Fitzpatrick (R-PA).

The bill is the first multi-faceted energy efficiency bill to be introduced in the House this year.  Although the bill is in many ways different from the Senate energy  efficiency bill S. 1000 (Shaheen-Portman) that passed out of the Senate Energy Committee markup last summer, it presents an opportunity  for members of Congress  to pass  low-cost, no-mandate efficiency legislation in 2012, and potentially conference it with S.1000.

The bill focuses on energy efficiency in three areas: federal buildings, private commercial buildings, and increased use of combined heat and power (CHP).  As Mr. Bass said during introduction, “The federal government spends $7 billion annually to heat, cool, and operate its 445,000 buildings.  Given our nation’s fiscal constraints, a common-sense place to save taxpayer dollars is by improving the energy efficiency of the hundreds of thousands of federal buildings across the country.  Through the use of new technologies and innovative funding mechanisms to help make the improvements, these upgrades can begin today at a price taxpayers and our nation can afford, while also helping to spur even more advancements in energy efficiency technologies for buildings, vehicles, and other electronic devices and appliances outside of our government.”

 Provisions for federal energy efficiency include requirements for the agencies to use Energy Savings Performance Contracts (ESPCs).  ESPCs are private-sector financed, require no up-front payments from the agencies, and are guaranteed to save taxpayers’ dollars through savings in federal electricity bills.    Further, the bill brings new technologies and energy management techniques to federal agencies by expanding the usage of demand response programs, requiring computer power savings techniques, further consolidation of federal data centers, and more efficient data tracking. These provisions are important because they go beyond building envelope efficiency, and encourage the government to utilize cutting edge, commercially-available technologies to manage energy use in existing buildings.

Further, the bill allows for electric vehicles and infrastructure to be part of an ESPC building retrofit.  Department of Defense in particular can benefit from this provision: the department needs to meet a 25% alternative fuels goal by year 2025, but alternative fuel and EV vehicles are more expensive than gasoline ones.  Allowing private financing with guaranteed savings for purchases of EVs and charging stations will help meet that goal without relying on appropriations.

The Smart Energy Act goes beyond federal buildings, to enhance existing funding mechanisms for private commercial building retrofits.  Residential and commercial buildings account for more than 70 percent of the electric energy consumed in the U.S.  However, financing private commercial buildings faces several market barriers non-existent in public buildings.  Hence, the Building Retrofit financing program in the legislation will unlock private sector financing for such retrofits.  In fact, Johnson Controls estimates that a very modest $100 million of government backing can unlock $2 billion in private sector financing.

Finally, the bill established a strategic plan to double the production of electricity production by 2020 through the use of combined heat and power and waste heat recovery.  Maximizing energy already created for both its thermal and electric generation capabilities is “a core definition of efficiency,” according to the bill fact sheet.

 In terms of next steps and the importance of the Smart Energy Act, I find that Kateri Callahan, the President of the Alliance to Save Energy summarized it best when she said that  “with similar legislation, in the form of the bipartisan Shaheen-Portman bill (S. 1000) ready to go to the Senate floor, we could have the basis very soon for a fruitful conversation about increasing our nation’s energy efficiency.  The Alliance applauds Congressmen Bass and Matheson for showcasing that energy efficiency policy is a non-partisan issue that will help to alleviate the economic, environmental and security problems associated with our country’s current, wasteful energy use.”

I look forward to a start of a congressional discussion on the role of energy efficiency in saving taxpayer dollars through private financing.