Energy Bill Passes in House, Moves to Senate as Industry Associations Lobby for Revisions

May 1, 2003
The Energy Policy Act of 2003 moved to the Senate in April after the House version of energy bill (H.R. 6) passed April 11. With strong backing from the

The Energy Policy Act of 2003 moved to the Senate in April after the House version of energy bill (H.R. 6) passed April 11. With strong backing from the National Manufacturers Association (NEMA), Rosslyn, Va., the bill contained many NEMA-backed electricity provisions missing from the bill in the last Congress.

Although the bill proposes legislation that would slash energy costs on a broad range of fronts in the public and private sectors, it has a particularly strong focus on cutting energy usage in federal buildings. The bill would force federal buildings to meet tough energy-efficiency standards and require the federal government to purchase energy-efficient motors and other electrical products.

Still, NEMA and other industry associations hoped for revisions to the Senate-version of the bill. At press time, the Senate had a goal of getting a completed energy bill to the floor by May 1.

On its Web site, the National Association of Electrical Contractors Association (NECA), Bethesda, Md., said the House version of the bill contained some provisions favored by NECA, but it was more notable for its negatives, which included the unilateral repeal of the Public Utility Holding Company Act (PUHCA), which prevents utility holding companies from subsidizing unregulated business activities from profits obtained from their regulated business activities and captive customers.

“Congressman John Dingell, D-Mich., was the biggest champion of NECA's concerns during House action on H.R. 6,” said the NECA Web site. “In an attempt to head off PUHCA repeal in this post-Enron environment, he offered an amendment to the energy bill that would not only have protected electricity consumers but also small business contractors from the unfair actions of public utilities when the utilities engage in cross-subsidization, which occurs when utilities use ratepayer monies and other utility assets to provide an unfair advantage to their affiliates.” Dingell's amendment was defeated on a narrow vote of 16-15.

While the National Association of Home Builders (NAHB), Washington, D.C., overwhelmingly applauded the passage of House energy legislation, NAHB still planned to lobby to restore a tax credit of $2.25 per square foot for multifamily buildings that are 50 percent more efficient than properties built to standards of the American Society of Heating, Refrigerating and Air-Conditioning Engineers. This credit was dropped from H.R. 6 prior to the House bill's passage.

NAHB was happy about the legislation's voluntary tax credit provided to builders for each home built to 30 percent above the 2000 International Energy Conservation Code (IECC). Building to 30 percent above the 2000 IECC is more energy efficient than Energy Star, the U.S. government's current energy efficiency gold standard.

“This will motivate builders to take on the challenges of building higher energy efficiency into new homes. In turn, builders will have an incentive to market their energy-efficient homes to consumers, spurring demand for higher energy-efficiency homes in the market at an affordable price,” said Jerry Howard, executive vice president and CEO of NAHB.

The House legislation also provides consumers a tax credit of up to $2,000 on the cost of qualified home remodeling projects that improve energy efficiency.

The House dropped the Commercial Buildings Tax Deduction provision that was in the House tax bill last Congress, even though it's included in the Senate Finance Committee bill. NEMA was working with the Congressional Joint Committee on Taxation staff to establish more detailed federal tax cost estimation factors for the building tax deduction, as well as with House and Senate members to shore up support for the NEMA-supported energy tax provisions.

Among the provisions NEMA fought for and won in the House bill:

  • Establishment of higher goals for federal energy efficiency including federal building requirements that exceed ASHRAE 90.1-1999 standards;

  • Requirement for federal government to purchase energy-efficient products, including mandatory purchases of NEMA Premium Motors, and Energy Star or Federal Energy Management Program (FEMP) designated products;

  • Extension of energy-saving performance contracts program and expansion to include replacement facilities;

  • Statutory authority for Energy Star program;

  • Efficiency standards for exit signs, torchiere fixtures, LED traffic signals, and low voltage, dry-type transformers;

  • A Next Generation Lighting Initiative to provide research and development for advanced lighting;

  • Encouragement of regional coordination of planning for energy infrastructure;

  • Mandatory and enforceable transmission reliability standards;

  • Incentive and performance-based rates for reliability enhancement and energy efficiency;

  • Requirement for electric suppliers to provide real-time pricing and time-of-use meters;

  • Requirement for electric suppliers to provide net metering for on-site generation;

  • Tax credit for combined heat and power property;

  • Extension of the wind-production tax credit; and

  • Tax life reduction for electric-transmission property from 20 to 15 years.