The Energy Savings and Industrial Competitiveness Act—Redux

In the 113th Congress last year, Senator Jeanne Shaheen (D-NH) and Senator Rob Portman (R-OR) introduced the Energy Savings and Industrial Competitiveness Act, S. 2262, a 136-page bill intended to update previous legislation on energy efficiency in commercial and residential buildings. Among other things, it would require the General Services Administration (GSA) “to develop and publish model leasing provisions and best practices for use in leasing documents that designate a federal agency as a landlord or tenant to encourage building owners and tenants to invest in cost-effective energy efficiency measures.”

S. 2262 also introduced the voluntary Tenant Star Program, which we have written about earlier. This program would “recognize tenants in commercial buildings that voluntarily achieve high levels of energy efficiency in separate spaces.” The bill would also direct the Department of Energy to gather and publish data “relevant to lowering energy consumption” in commercial and other buildings.

Conservative groups mounted a campaign against S. 2262, arguing, in the words of one, Heritage Action, that “today’s federal voluntary programs often become tomorrow’s mandates.” Some also objected that energy efficiency was being forced unfairly onto the housing finance sector, with potentially negative effects on building valuation and the appraisal process.

In any event, S. 2262 was caught in a procedural tangle when, in late June 2014, Senator Mitch McConnell (R-KY) demanded amendments on energy policy, while Senator Harry Reid (D-NV) in turn demanded a vote on the bill as written. As the record reads, “Senator McConnell objected to the modification. Senator Reid objected to the original request.” And there the matter rested—or, more precisely, died.

Now reintroduced, the Energy Efficiency Improvement Act of 2015, to quote from Senator Portman’s web page, “includes four simple but effective provisions that have been scored by the Congressional Budget Office to be budget neutral.” The bill includes four titles: –

  • Title I establishes a voluntary, market-driven approach to aligning the interests of commercial building owners and their tenants to reduce energy consumption.
  • Title II exempts certain electric resistance water heaters used for demand response from pending Department of Energy regulation.
  • Title III requires federal agencies to coordinate with OMB, DOE, and EPA to develop an implementation strategy—that includes best practices, measurement, and verification techniques—for the maintenance, purchase, and use of energy-efficient and energy saving information technologies.
  • Title IV requires that federally-leased buildings without Energy Star labels benchmark and disclose their energy usage data, where practical.

These titles are elaborated in the text of the bill. Among other things, for instance, the bill requires improvements in energy efficiency and building codes, involving the Department of Energy in providing technical and material assistance, including data. The Better Buildings provision of the bill also authorizes the Tenant Star Program and requires DOE “to complete a study on feasible approaches to improving the energy efficiency of tenant-occupied spaces in commercial buildings.”

In a separate section, DOE is also required to “conduct an ongoing review into private sector green building certification systems and to work with other agencies to determine which certification system would encourage the most comprehensive and environmentally sound approach to certifying buildings.” And, as before, the bill includes several provisions to improve energy efficiency in federal buildings and “requires federal mortgage agencies to include energy efficiency as a factor in determining the value and affordability of a home.”

According to proponents, the Portman-Shaheen bill is projected to create 192,000 jobs and save $16.2 billion annually while reducing CO2 emissions substantially by the year 2030. It has found numerous cosponsors in both parties, among them Senator Kelly Ayotte (R-NH), Senator Michael Bennet (D-CO), Susan Collins (R-ME), Lisa Murkowski (R-AK), Mark Warner (D-VA), and Roger Wicker (R-MS). Numerous national energy groups have voiced support for the bill as well. We will report on developments as the bill moves through the Senate.

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