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The Energy Efficiency Provisions of EPACT 2005


Extends authorization for Energy Savings Performance Contracts through 2016 ... Extends Daylight Savings Time. 4. 4. Northwest. Power and. Conservation. Council ... – PowerPoint PPT presentation

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Title: The Energy Efficiency Provisions of EPACT 2005

The Energy Efficiency Provisions of EPACT 2005
  • Tom Eckman
  • Manager, Conservation Resources
  • Northwest Power and Conservation Council

NWPPA Policy Perspective Forum The Energy Policy
Act of 2005 March 29, 2006
Energy Efficiency Provisions
  • Title I Energy Efficiency
  • Subtitle A - Federal Programs
  • Subtitle B - Energy Assistance and State Programs
  • Subtitle C - Energy Efficient Products
  • Subtitle D - Public Housing
  • Title IX Research and Development
  • Subtitle A Energy Efficiency
  • Title XIII Energy Policy Tax Incentives
  • Subtitle C Conservation and Energy Efficiency

Federal Programs
  • Sets goal of 20 efficiency improvement by 2015
    for federal buildings facilities
  • Extends authorization for Energy Savings
    Performance Contracts through 2016
  • Requires new federal buildings to be 30 more
    efficient than ASHRAE and IECC standards and
    federal agencies to purchase FEMP designated
    efficient or Energy Star products
  • unless this isnt cost-effective
  • Extends Daylight Savings Time

Energy Assistance Programs
  • Authorizes an increase in Low Income Energy
    Assistance from 2 billion to 5.1 billion per
    year for FY05-FY07
  • Weatherization Assistance
  • FY06 - 500 million
  • FY07 - 600 million
  • FY08 - 700 million
  • Increases income eligibility from 125 to 150 of
    federal poverty level

Actual funding must still be approved through
annual budget process
State Programs
  • Sets goal of at least 25 improvement in the
    efficiency of energy use (compared to 1990)
  • Authorizes 100 million in FY06 FY07 and 125
    million in FY08 to aid states in development and
    implementation of state energy plans
  • Authorizes states to establish Energy Star
    residential appliance rebate programs
  • State must cover 50 of program cost
  • 50 million/yr authorized for FY06 FY10

Actual funding must still be approved through
annual budget process
State Programs (cont)
  • Provides grants for new or renovated public
    buildings that are 30 more efficient than
  • 30 million/yr authorized for FY06 FY10
  • Provides grants for low income community
    efficiency pilot programs to improve efficiency,
    identify/develop renewables and distributed
  • 20 million/yr authorized for FY06 FY08

Actual funding must still be approved through
annual budget process
State Programs (cont)
  • Extends State Technologies and Advancement
    Collaborative (STAC) program and funding through
  • Provides funding for energy code compliance, IF
  • Local code meets or exceeds ASHRAE and IECC 2004
    (or updates to these codes)
  • 90 compliance rate can be documented
  • 500,000/yr authorized for code official
    training, 25 million/yr for FY06 FY10 for
    actual code compliance support grants

Actual funding must still be approved through
annual budget process
Efficient Products 15 New Standards
Efficient Products 9 New Standards Rulemakings
Efficient Products Expanded or Clarifications
of Rulemaking Authority
  • DOE authorized to prescribe energy standards that
    cover energy used to circulate heating and
    cooling air (potentially impacts HSPF, SEER
    AFUE ratings and/or air handler motor and fan
  • Permits DOE to regulate
  • MEF and Water Factor
  • Heat Pump Efficiency (and Gas Furnace Efficiency)
    and Air Handler Efficiency

Efficient Products Energy Star
  • EPA must adopt new Energy Star qualifying levels
  • Dishwashers
  • Adopt by January 1, 2006
  • Effective beginning January 1, 2007
  • EPA announce new level in December
  • Standard dishwashers EF -0.65
  • Compact dishwashers EF -0.88
  • Clothes washers
  • Adopt by January 1, 2008
  • Effective beginning January 1, 2010
  • EPA announced new level for 2007 in December
  • MEF 1.72 and Water Factor 8.0

Efficient Products Consumer Education
  • Establishes a HVAC Maintenance education
    program targeted at small businesses
  • Program coordinated with Energy Star Small
    Business Program
  • Authorizes establishment of a Small Business
    Energy Clearinghouse
  • NCAT is only organization mentioned as qualified
    resource provider of such clearinghouse

Efficient Products Consumer Education
  • DOE is authorized to establish and maintain a
    national public energy education program
  • Focus on need to reduce energy use and economic
    value of doing so
  • Provide practical guidance on how-to conserve
  • Authority terminates 12/31/10
  • Mission accomplished?

Energy Efficient Utilities
  • NARUC NASEO to directed to conduct a study of
    state and regional policies that promote energy
    efficiency and report results to DOE
  • Covers both IOU and Public utilities
  • Study to Consider
  • Performance standards/targets
  • Funding mechanisms
  • Infrastructure planning
  • Cost Benefits of consumer education
  • Barriers to utility implementation of efficiency
  • Will address cost benefits of public benefits
    funded efficiency programs

Energy Efficiency Pilot Programs
  • DOE to provide financial assistance to at least 3
    but not more than 7 States to carry out pilot
    programs designed to reduce energy consumption by
    at least 0.75/yr
  • State must submit independent verification of
    energy savings to DOE in order to claim the
  • 5 million/yr authorized for FY2006-2010

Actual funding must still be approved through
annual budget process
Public Housing
  • Directs public housing agencies to purchase
    Energy Star and/or FEMP-designated products,
    unless such products are not cost-effective
  • HOPE VI funded new or renovated housing must meet
    IECC efficiency standards
  • HUD shall develop and implement an integrated
    strategy to reduce energy costs, including the
    establishment of energy savings targets
  • HUD Secretary to submit report with one year of
    enactment and every two years thereafter

Research and Development
  • Authorizes funds for energy efficiency research,
    development and demonstration
  • 783 million for FY07
  • 865 million for FY08
  • 952 million for FY09
  • 50 million/yr for FY07 FY13 allocated for
    next generation lighting (i.e., white LEDs)

Actual funding must still be approved through
annual budget process
Research and Development
  • Requires Office of Science and Technology to
    prepare a plan to carry out a National Building
    Performance Initiative
  • Plan to be submitted to Congress within one year
  • DOE to establish a grant and technical assistance
    program to support development of consensus-based
    standards for high performance buildings

Tax Incentives
  • Commercial buildings
  • New homes
  • Residential heating and cooling equipment
  • Shell improvements to existing homes
  • High-efficiency appliances
  • High-efficiency vehicles
  • Stationary fuel cells and microturbines
  • Solar systems

Tax Incentive Intent
  • Focused on advanced technologies and practices
  • Exception is residential retrofits
  • Use short-term incentives to promote long-term
    changes in the market
  • Increase volumes so product prices come down
  • Increase familiarity with products/practices
    among designers, installers, retailers, consumers

New Commercial Buildings Tax Deduction
  • Provides 1.80/SF deduction for buildings
    exceeding ASHRAE 90.1-2001 by 50
  • Value of deduction depends on tax bracket (e.g.,
    30 tax bracket, deduction worth 0.54/SF)
  • Challenge is that building must by placed in
    serviceby Dec. 31, 2007
  • Congress being asked to extend date.
  • New and existing buildings covered public
    buildings may assign deduction to designer

New Commercial Buildings Tax Deduction (cont)
  • Prorated deduction available for HVAC, envelope
    and lighting systems (.60/SF each)
  • Further proration available for lighting systems,
    beginning at 25 better than ASHRAE standards,
    e.g. .30/SF
  • IRS guidance on details due shortly

Commercial Tax Deductions Interim Lighting Rule
  • Until such time that final IRS rules are
    promulgated, lighting systems are eligible for a
    partial deduction.
  • Deduction is 0.30 to 0.60 for 25 to 40 under
    ASHRAE LPDs, respectively
  • ExceptionWarehouses must be 50 under to get
    0.60 (no sliding scale)
  • ASHRAE controls bi-level switching required
  • Industry has asked that provision be made
    permanent as the lighting system deduction

ASHRAE/IESNA 90.1-2001 Building Interior LPDs
Tax Credit for Energy Efficient New Homes
  • 2000 credit provided for builders of homes that
    exceed IECC criteria by 50
  • 1000 credit provided to manufactured home
    producers exceeding IECC by 30 or meeting Energy
    Star criteria
  • Third party certification required to verify home
    meets standards through RESNET or equivalent
  • Homes must be substantially completed after
    December 31, 2005 but before January 1, 2008.

Residential Heating, Cooling Water Heating
Equipment Tax Credits
  • 300 tax credit for
  • Split central AC with 15 SEER, 12.5 EER
  • Single-package central AC with 14 SEER, 12 EER
  • Central heat pumps with 15 SEER, 13 EER, 8.5 HSPF
  • Ground source heat pumps meeting Energy Star with
    integrated water heating
  • Electric water heaters with 2.0 EF (i.e., heat
    pump water heaters)
  • Cap of 500 per taxpayer for heating/cooling
    credits plus building shell credits

Tax Credits for Shell Improvements to Existing
  • Overall credit limit is 500 for a given taxpayer
    including heating/cooling credits on previous
  • Envelope measures eligible for 10 of cost, for
  • Insulation
  • Windows (capped at 200)
  • Duct sealing and infiltration reduction
  • Metal roofs with coatings to reduce heat gain
  • Only materials eligible, not labor
  • Manufacturers must certify products are eligible
    homeowners need to be given a copy of this

Tax Credits for Appliances
  • Credit provided to manufacturers of
    refrigerators, clothes washers, and dishwashers
  • Credits tied to tiered efficiency criteria
  • Clothes washers, 100 for meeting 2007 Energy
    Star specification (1.72 MEF, 8.0 WF)
  • Refrigerators, 75 for 15 savings relative to
    federal standard, 125 for 20 savings, 175 for
    25 savings
  • Dishwashers, 32.31 for meeting 2007 Energy Star
    specification (0.65 EF)
  • Overall cap of 75 million per manufacturer

Tax Incentives Assistance Project
  • Multi-organization project to provide program
    administrators, trade allies, consumers and
    businesses information on the tax incentives and
    how to use them
  • For more information on the tax incentives and

Energy Savings Impacts
  • Total Savings 2.5 Quads in 2020about 2 of
    total forecast consumption
  • Oil savings negligible - conferees cut Senate 1
    MBD savings target
  • Senate bill would have saved 4 of 2020 oil use
  • Electricity savings 206 TWH, 4 of 2020 forecast
  • Natural gas savings 1.4 TCF, 5 of 2020 forecast

Implications for Utility Programs
  • Tax incentives create opportunity to leverage
    utility incentives and services
  • Promote tax credits/incentives
  • Provide technical assistance (e.g., provide or
    support third party certification services
  • Coordinate incentives with federal credits (e.g.
    commit to incentives in 2008 if credits not
  • Promotion coordination facilitated via TIAP
  • New homes HVAC equipment, new commercial
    buildings, clothes washers and refrigerators top
    priorities for PNW