Most of the talk about federal politics these days has centered on the mortgage crisis and the failing banking industry. The bulk of the money in the Obama administration’s bailout packages has been for banks, investment companies, other large industries and homeowners at risk for foreclosure.
Many in the energy industry recognize that the greatest strides in achieving energy independence and cutting back on greenhouse gas emissions may come from an entirely different and much less talked about change in behavior, specifically, energy efficiency. Proponents argue that efficiency and demand reduction together hold the potential for the greatest impact on energy consumption in the shortest amount of time.
This potential opportunity also has not been lost on the Obama administration, and accordingly, the American Recovery and Reinvestment Act of 2009, as the stimulus package is called, sets aside $16.8 billion under the heading of Energy Efficiency and Renewable Energy programs. Of this budgeted amount, roughly half is committed to the goal of achieving greater efficiency. The greatest portion is earmarked for the U.S. Department of Energy’s Weatherization Assistance Program, which will receive $5 billion. The Department’s Energy Efficiency and Conservation Block Grant Program will receive another $3.2 billion. Appliance rebate programs will receive $300 million. The act also allocates an additional $4.5 billion under a separate budget item for the development of smart grid technologies. (See “Recharging the Industry” by John Paul Quinn on page 20 for more information.)
Utilities are ready. Many have already invested heavily in efficiency programs and would welcome greater funding.
The Edison Electric Institute, an association of shareholder-owned electric companies, that lobbied for efficiency funding during the stimulus negotiations, cites statistics released in January by the Energy Information Administration, which show the growth and effectiveness of efficiency programs in recent years.
According to the institute, the statistics show utilities spent $2.53 billion on energy efficiency and demand-response programs in 2007, which resulted in a savings of more than 69.1 billion kilowatt-hours. Both figures represent sizable increases from the previous year.
“Energy efficiency is now a core business,” said Tom Kuhn, president of the institute.
His group cites numerous examples of the kinds of programs that are currently underway and would benefit from the stimulus funding, such as Internet-based demand-response programs, smart meter installations, loans for efficiency upgrades, rebates for the purchase of energy-efficient appliances and audits of homes and businesses to find opportunities for greater efficiency.
While the efficiency concept has been warmly embraced, funding alone will not suffice to increase the role of efficiency in the nation’s energy portfolio. According to the Edison Institute, many states will have to update their residential and commercial building codes and update their utility efficiency rate schedules before they will be eligible to receive the stimulus funding.