{"id":153,"date":"2010-06-03T09:57:21","date_gmt":"2010-06-03T14:57:21","guid":{"rendered":"http:\/\/blogs.law.columbia.edu\/climatechange\/?p=153"},"modified":"2013-07-19T12:31:14","modified_gmt":"2013-07-19T17:31:14","slug":"energy-efficiency-in-kl-and-wm","status":"publish","type":"post","link":"https:\/\/blogs.law.columbia.edu\/climatechange\/2010\/06\/03\/energy-efficiency-in-kl-and-wm\/","title":{"rendered":"ENERGY EFFICIENCY IN KL AND WM"},"content":{"rendered":"
<\/div>

By Matt Wisnieff<\/p>\n

The energy efficiency provisions of the Kerry-Lieberman (KL) bill are presented in Title I\u2014\u201cDomestic Clean Energy Development.\u201d The relevant sections are contained within Subtitle D, and Subtitle E, Parts I-III, beginning on page 187. Additionally, parts of Subtitle D amend the Consolidated Farm and Rural Development Act (CFRDA). The KL bill lays out its policy objectives in \u00a7 1601 of Subtitle D, focusing on improved energy security; the reduction of greenhouse gas pollution; and the creation of jobs. Generally, the bill aims to accomplish these objectives through the distribution of emission allowances to entities and states working toward renewable energy and energy-efficient construction and infrastructure.<\/p>\n

I. Energy Efficiency Subsidies<\/span><\/p>\n

a. Rural Energy Savings Program<\/span><\/p>\n

KL establishes a system for providing loans to private and state entities for improving energy efficient buildings and practices in rural areas. The primary goal of the \u201cRural Energy Savings Program\u201d is job creation. Under the Program, rural utility entities, which may include a \u201cpublic power district\u201d or \u201cpublic utility district,\u201d or any \u201csimilar entity,\u201d may become eligible under KL to receive Federal loans for the purpose of implementing energy efficient measures. (\u00a7 1602, amending the CFRDA to include \u00a7 366(a-b)) Generally, KL defines \u201cenergy efficiency\u201d as a program that \u201cmeets the total resource cost test.\u201d (\u00a7 1603(a)(2)) The total resource cost test measures the net economic benefits of the program against its net costs, including supply and delivery costs, and deferred or avoided investments, as well as those incremental costs borne by the energy consumer.<\/p>\n

Under the Program, the Secretary of Agriculture, acting through the Rural Utilities Service, is authorized under \u00a7 366(d) to make loans to eligible entities \u201cthat agree to use the loan funds to make loans to qualified consumers.\u201d As a condition of receiving a loan, an eligible entity must establish a plan to implement energy efficient measures, and to decrease energy use among its consumers. (CFRDA \u00a7 366(d)(2)(A)) The energy efficient measures \u00a7 366 seeks to promote are \u201cstructural improvements and investments in cost-effective, commercial off-the-shelf technologies to reduce home energy use.\u201d (\u00a7 366(b)(2)) Eligible entities are required to establish a list, prepare a plan, and provide for appropriate measurement and verification. (CFRDA \u00a7 366(d)(2)(A)(i-iii)) KL establishes that these loans are to be interest-free (\u00a7 366(d)(3)) and repaid within ten years. (\u00a7 366(d)(4))<\/p>\n

Qualified consumers are eligible to receive loans from eligible entities, using loan funds received from the Secretary, to promote energy efficient practices under KL. These loans may bear no interest in excess of 3%, which is to be used to establish a loan loss reserve and to defray administrative costs of the KL program. The loan itself is to be repaid through charges added to qualified consumers\u2019 normal electricity bills. Furthermore, the loans must be used to promote energy efficient practices in any manufactured structure, real property, or fixture thereof. (\u00a7 366(e))<\/p>\n

All qualified entities are also to enter into a contract with the United States Department of Agriculture to measure and verify the efficacy of energy efficiency programs funded by federal loans and to provide technical training and assistance to \u201cemployees of eligible entities to carry out [\u00a7 366].\u201d (\u00a7 366(f))<\/p>\n

Finally, beginning not later than September 30, from 2012 to 2015, the Administrator of the EPA is also to distribute allowances in accordance with \u00a7 781(c)(5)(B) of the Clean Air Act for the purpose of promoting energy efficient practices. (CFRDA \u00a7 366(c)) Under \u00a7 781, 0.5% of total emission allowances are made available to the Administrator for the purpose of carrying out the Rural Energy Savings Program, which includes allowances available for distribution to state entities.<\/p>\n

b. Allowance Distribution to States to Fund Energy-Efficiency Practices<\/span><\/p>\n

Under \u00a7 1602(b), the Administrator is to begin distributing emission allowances to states beginning not later than September 30, 2012, and continuing annually until 2021. Under \u00a7 1602(b)(4), one-third of the allowances to be distributed to the states are to be divided equally between the states, another one-third are to be distributed proportionately to each state according to population, and the final one-third of allowances is to be distributed proportionately to each state according to energy consumption. The allowances are to be used exclusively for the purpose of promoting renewable energy as well as energy efficiency practices, which include: (1) building codes that improve energy efficiency; (2) energy-efficient manufactured homes; (3) building energy performance labeling; (4) low-income community energy efficiency improvements; (5) and energy-efficient retrofits of existing buildings. Furthermore, existing state energy-efficiency programs are to be prioritized over new ones. (\u00a7 1602(d)(1))<\/p>\n

To enforce these provisions, KL enables the Administrator of the EPA to withhold up to twice the number of allowances that a State failed to use appropriately that a State would otherwise be eligible to receive in future years. (\u00a7 1602(f))<\/p>\n

c. Research<\/span><\/p>\n

KL Subtitle F, \u00a7 1801 pledges support to research initiatives that \u201cenhance the economic, energy, and environmental security of the United States\u201d by reducing imports of energy from foreign sources, reducing energy-related pollution, including greenhouse gas emissions, and improving U.S. energy efficiency in one or more economic sectors. (\u00a7 1801(a)(1))<\/p>\n

Under \u00a7 1801(c)(1), emission allowances are to be distributed \u201con a competitive basis\u201d to institutions of higher education, companies, research foundations, trade and industry research collaborations, and consortia of such entities, starting not later than September 30, 2012 and continuing until 2049. The goal of this program is to promote the development and deployment of clean energy technologies, which the bill describes as technology that (1) produces energy from renewable energy sources or from nuclear power; (2) more efficiently transmits, distributes, or stores energy, or reduces emissions or pollution; (3) enhances energy efficiency for buildings or industry in a manufacturing process; (4) enables the development of the \u201cSmart Grid\u201d program; (5) produces a sustainable material with energy efficient applications; (6) enhances water management, conservation, distribution or end use applications; and (7) improves energy efficiency for transportation.<\/p>\n

Finally, under KL Subtitle B, \u00a7 2101, the Clean Air Act is amended to include \u00a7 781(c)(5)(A), which allocates 2.5% of emission allowances to aid the development of clean energy and renewable energy technologies starting in 2013. This amount is to decline to 2% by 2016, to 1% in 2019, and finally to 0.5% in 2021.<\/p>\n

II. Fixtures and Appliances<\/span><\/p>\n

Under KL Subtitle C, Part I, \u00a7 2201, the Clean Air Act is amended to include \u00a7 619(n)(C), which permits the Secretary of Energy and the Administrator of the EPA to use federal funds under the Climate Protection Fund to carry out a \u201cBest-in-Class Appliances Deployment Program.\u201d This program aims to provide bonus payments to retailers and distributors of high-efficiency household appliance models, building equipment, and consumer electronics for their distribution, replacement and development. (\u00a7 619)(n)(C)(i-iii) KL does not define what standards must be met by a \u201cbest-in-class\u201d appliance.<\/p>\n

III. Comparison with Waxman-Markey (WM)<\/span><\/p>\n

KL and WM seem to pull in opposite directions on the issue of energy efficiency. Where KL provides for the distribution of emission allowances to support energy efficiency, renewable energy, and clean energy research, WM only touches upon the issue of allowances for energy efficiency and renewable energy. On the other hand, where WM provides for a national building code to promote energy efficiency in residential and commercial buildings and lighting and appliance energy efficiency, KL only provides for a program of subsidizing appliance upgrades that increase energy efficiency without providing for a national green building code.<\/p>\n

Where KL relies almost solely on the distribution of emission allowances to state and local entities promoting clean energy research and efficiency, the WM bill provides for the distribution of emission allowances for energy efficiency and renewable energy in addition to implementing energy efficient building codes and appliance standards. Under WM Title III, Subtitle B, \u00a7 321 of WM, the Clean Air Act is amended to include Part H, \u00a7 781(f), which provides for the distribution of between 9.5 and 4.5% of emission allowances to eligible entities for the purpose of energy efficiency and renewable energy. Under \u00a7 781(f), from 2012 to 2015, 9.5% of allowances are to be distributed. For 2016 and 2017, this number will decrease to 6.5%. From 2018 to 2021, 5.5% of allowances will be distributed. From 2022 through 2025, between 1 and 4.55% of allowances may be distributed to the energy efficiency and renewable energy sector. From 2026 through 2050, 4.5% of allowances are to be distributed.<\/p>\n

Under WM Title II, Subtitle A, \u00a7 201, the Energy Conservation and Production Act is amended to include \u00a7 304, which establishes energy efficiency targets for buildings. The WM targets are, for residential buildings, a 50% reduction in energy use relative to WM\u2019s baseline by January 1, 2014, with additional 5% reductions for January 1, 2017 and, for every three years through January 1, 2029. For commercial buildings, a 50% reduction is to be met by January 1, 2015, with additional 5% reductions for January 1, 2018 and, for every three years through January 1, 2030. KL does not provide for national green building standards.<\/p>\n

Also under Title II, under Subtitle B, \u00a7 211 of WM, national standards for outdoor lighting equipment are set. These standards include specific minimum light efficiencies and variable lighting levels for different types of outdoor lamps, in order to produce the most energy efficient outdoor lighting scheme. KL does not contain any similar provisions on lighting, however, does establish a program for subsidizing energy efficient upgrades of appliances, generally, according to a \u201cbest-in-class\u201d standard specific to each appliance type and model.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Matt Wisnieff The energy efficiency provisions of the Kerry-Lieberman (KL) bill are presented in Title I\u2014\u201cDomestic Clean Energy Development.\u201d The relevant sections are contained within Subtitle D, and Subtitle E, Parts I-III, beginning on page 187. Additionally, parts of Subtitle D amend the Consolidated Farm and Rural Development Act (CFRDA). The KL bill lays […]<\/p>\n","protected":false},"author":330,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[642],"tags":[9424,9434],"class_list":{"0":"post-153","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-congress","7":"tag-congress","8":"tag-energy-efficiency","9":"czr-hentry"},"yoast_head":"\nENERGY EFFICIENCY IN KL AND WM - Climate Law Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blogs.law.columbia.edu\/climatechange\/2010\/06\/03\/energy-efficiency-in-kl-and-wm\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ENERGY EFFICIENCY IN KL AND WM - Climate Law Blog\" \/>\n<meta property=\"og:description\" content=\"By Matt Wisnieff The energy efficiency provisions of the Kerry-Lieberman (KL) bill are presented in Title I\u2014\u201cDomestic Clean Energy Development.\u201d The relevant sections are contained within Subtitle D, and Subtitle E, Parts I-III, beginning on page 187. 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