Summary of the Shaheen-Portman Energy Savings and Industrial Competitiveness Act Reintroduction (S.1392)

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1 Summary of the Shaheen-Portman Energy Savings and Industrial Competitiveness Act Reintroduction (S.1392) Shaheen Portman was reintroduced on the Senate floor on July Below is a summary of the bill, with what was added and subtracted from it between the two versions. Title I: Buildings Subtitle A: Building Energy Codes Section 101: Greater Energy Efficiency in Building Codes This section would amend the Energy Conservation and Production Act (ECPA) to direct the Department of Energy (DOE) to support development of national model building energy codes, state, Indian tribe and local adoption of the codes, and full compliance with the codes. The language requires greater transparency on the part of DOE in the code making process. NEMA: This section reinforces the private sector involvement in the consensus based approach to building energy codes. In addition, the legislation gives DOE the ability to help states adopt and comply with new building energy codes, including providing up to $750,000 per state to train state and local building code officials to enforce the code. Greater enforcement of codes will greatly increase efficiency gains. NEMA and many of its members are heavily engaged in building energy codes, their development and adoption. Building energy codes are generally updated every three years and the adoption and enforcement of the newest version provide an avenue for greater adoption of energy efficient technologies, benefiting NEMA members. Subtitle B: Worker Training and Capacity Building Section 111: Building Training and Assessment Centers Incorporated into Title X of the Energy Independence and Security Act of 2007, this section would direct DOE to establish Building Training and Assessment Centers at institutions of higher learning, modeled after DOE s Industrial Assessment Centers (IACs). These centers would identify and promote opportunities, concepts, and technologies for enhancing building energy and environmental performance; train engineers, architects, building scientists, building permitting and enforcement officials, and technicians; assist other institutions to train building technicians; promote research and development in building clean energy technologies and distributed generation; and coordinate services with technical training centers, community colleges, and other relevant offices and institutions. DOE is directed to avoid duplication, coordinate, and collocate Building Training and Assessment Centers, where practical, with IACs. NEMA: This program would provide NEMA members the opportunity and ability to educate on energy efficiency technologies, how they are applied, commissioned, etc. As noted below, a similar program for Industrial Assessment Centers has been highly effective and this program for buildings is to be developed in conjunction. Providing grants to colleges and universities to establish building training and assessment centers will spur faster adoption of new, more efficient technologies. In addition to training current students on efficiency design, performance, etc. this program would train current building engineers, technicians, and others. in energy efficient design and operation. This would promote the adoption and correct use of efficient technologies to ensure the building owner is receiving the greatest return on investment. Section 112: Career Skills Training Establishes a DOE career skills program to provide grants to nonprofit partnerships for worker training in the construction and installation of energy-efficient building technologies. Authorizes $10 million in funding to carry out this section and establishes a 50 percent federal cost share. NEMA: This program will help ensure NEMA energy-efficient products are properly installed and operated to achieve intended energy savings.

2 Title III: Industrial Efficiency and Competitiveness Subtitle A: Manufacturing Energy Efficiency Section 301: Purposes This section sets forth the purposes of the Department of Energy s Advanced Manufacturing Office (AMO). NEMA and NEMA s Industrial Energy Efficiency Coalition agree with the legislation s goals for improving the operations of the Advanced Manufacturing Office. The AMO has suffered from a constantly changing leadership structure including long periods of time (such as presently) with no permanent program director. Beyond fixing the leadership problem, we believe the AMO must strike a clear and consistent balance between research and development of unproven technologies and the deployment of existing technologies to help manufacturers adopt the latest energy efficiency practices. One of the most effective (and cost-effective) activities AMO has undertaken over the years is creation of web-based tools which assist and train industrial facilities in evaluating the efficiency of particular industrial processes (i.e. motors, compressed air, steam) at their plants. However, lately, these tools have suffered neglect due to lack of maintenance and investment. IEEC has recommended to the bill sponsors ways to improve the program. We also support the bill s goals to foster greater private sector involvement in the AMO s direction. Who better than manufacturers and energy efficiency solution providers who share DOE s goals of energy efficiency improvement to help guide AMO s programs?

3 Section 302: Future of Industry Program The section would reauthorize DOE s existing industrial research and assessment centers (IACs). Each Center of Excellence would coordinate with and advise other IACs within its region to enhance technical assistance to manufacturing industries. The IACs would coordinate and partner with the Manufacturing Extension Partnership Centers of the National Institute of Standards and Technology, the DOE Building Technologies Program, and the DOE national laboratories, as well as partner with energy service providers. They would perform outreach to smalland medium-sized manufacturers and technology providers, and have an employee to coordinate with other federal and state efforts, utilities, energy service providers, regional energy efficiency organizations, and other regional centers. This section would direct the Small Business Administration to expedite consideration of applications from eligible small businesses to implement recommendations of the IACs. This section would establish an advisory steering committee that includes national trade associations who represent energy-intensive industries or energy service providers to provide recommendations on the DOE Industrial Technologies Program. NEMA: Industrial assessment centers have been a success in terms of providing manufacturers with no-cost energy audits on certain systems in their facilities, while giving valuable training to future engineers. This legislation would enhance the value of the program by having it partner with energy service providers (including NEMA companies), the businesses engaged in making a given manufacturing facility more efficient, not just the industrial end user. Small businesses are generally slower to adopt even the most basic energy efficiency solutions, despite their short payback period and minimal disruption to a given industrial process. Small businesses are more likely to take advantage of IAC energy audits and it is these audits that help increase their awareness of the energy efficiency opportunities in their facilities. Involving energy service providers in the program, as this legislation would do, would bring an added level of expertise to the IAC program making it even easier for small businesses to realize energy savings. NEMA is also supportive of NIST s Manufacturing Extension Partnership and the DOE s Building Technologies Program. Improved coordination among all three of these programs, which all seek to proliferate existing best practices, would maximize the impact of each of the programs. Engaging energy service providers, and other industrial efficiency stakeholders, through the creation of a DOE steering committee would ensure that the DOE Advanced Manufacturing Office (formerly the Industrial Technologies Program) is maximizing its value in the marketplace. Section 303: Sustainable Manufacturing Initiative This section would establish a sustainable manufacturing initiative under the DOE Industrial Technologies Program to provide onsite technical assessments to manufacturers. The assessments would identify opportunities to maximize energy efficiency, prevent pollution and minimize waste, reduce the use of water in manufacturing processes, and conserve natural resources. The initiative would operate in coordination with the private sector and appropriate agencies, including the National Institute of Standards and Technology, to accelerate adoption of technologies or processes that improve energy efficiency. In addition, this section would create a joint industry-government partnership program as part of the DOE Industrial Technologies Program to research, develop, and demonstrate new sustainable manufacturing and industrial technologies and processes. NEMA: While generally supportive of the ideas behind the language, NEMA s Industrial Energy Efficiency Coalition has raised questions as to (1) how this program would interact with others already in existence and (2) the relative support put toward research and development of unproven technologies and deployment of current technologies. We are unclear as to the distinction between the technical assessments conducted through the (existing) Industrial Assessment Centers and those to be conducted under the Sustainable Manufacturing Initiative (as created in the draft). Further complicating it is the fact that both DOE programs would be coordinating with NIST, presumably NIST Manufacturing Extension Partnerships. Having DOE partner with NIST, especially if it leads to a greater NIST focus on energy efficiency is a good thing, but we are concerned that the existence of two DOE assessment programs, not sufficiently distinct from one another, may create duplication, overlap, and confusion in the marketplace.

4 DOE s Advanced Manufacturing Office already works with industry to research, develop, and demonstrate new sustainable manufacturing and industrial technologies and processes. We are not sure what this section adds that is new. We have urged the bill sponsors to consider these questions. Subtitle B: Supply Star Section 311: Supply Star This section would establish a Supply Star program within DOE to identify and promote practices, recognize companies, and recognize products that use highly efficient supply chains in a manner that conserves energy, water and other resources. In addition to promoting existing efficient supply chain practices, this section would collect and disseminate data on supply chain energy resource consumption, develop and disseminate metrics for evaluating supply chain energy resource use, and develop sector level guidance for improving supply chain efficiency. DOE would also be directed to work with industry and small business to improve supply chain efficiency through sharing best practices, providing benchmarking opportunities, and supporting professional training. The Supply Star program would coordinate efforts with the Energy Star program. NEMA: NEMA s industrial automation manufacturers and service providers are at the forefront of making manufacturing and other industrial processes more energy efficient. Beyond the use of more efficient equipment (motors, transformers, lighting, etc), the use of smart technologies such as drives, sensors, controls, and automation are reducing manufacturers energy consumption and reducing operating costs, boosting competitiveness. Promoting energy efficiency supply chains through a recognition program adds another dimension to the value proposition of investing in energy efficient technologies. Subtitle C: Electric Motor Rebate Program Section 321: Energy Saving Motor Control Rebate Program This section amends the Energy Policy and Conservation Act by requiring the Secretary of Energy to establish a rebate program for the purchase of a new, high efficiency motor or a high efficiency motor system. The legislation provides a rebate of $25 per horse power in the motor/motor system. Documentation for the rebate will be established by the Secretary of Energy to verify that inefficient motors were replaced with the qualified efficient motors, or that equipment was redesigned that did not previously use advanced motor system technology. NEMA: The original language had limited application to motor driven systems, which consume over half of all electrical energy in the U.S. However, NEMA was able to secure an amendment that will create a motor rebate program aimed incentivizing the adoption and purchase of advanced motor systems into the marketplace. The focus of this amendment is to reduce energy consumption while also spurring the adoption of new energy saving advanced motor technologies. Subtitle D: Transformer Rebate Program Section 331: Energy Efficient Transformer Rebate Program This section would direct DOE to create an incentive for the purchase of new energy efficient transformers by owners of commercial or multifamily residential buildings. Qualified transformers must meet or exceed the National Electrical Manufacturers Association (NEMA) Premium Efficiency designation, having 30 percent or fewer losses than NEMA s 2002 standard for a transformer with the same phases and capacity. NEMA: According to the Lawrence Livermore National Laboratory, the electrical transmission and distribution system wastes more energy than it delivers. This is inherent in the laws of physics but this phenomenon is amplified by certain regulations necessary for reliability. A key piece of equipment where losses occur, and where NEMA members produce a more efficient unit, is the distribution transformer. Highly efficient low voltage dry type distribution transformers (represented by the NEMA Premium label) have a higher up front cost but provide operational savings. This legislative language would support the purchase of more efficient transformers by building owners. NEMA s Industrial Energy Efficiency Coalition is recommending that the bill be amended to make purchases by industrial users eligible for the rebate. Title IV: Federal Agency Energy Efficiency

5 Section 401: Adoption of Personal Computer Power Savings Techniques by Federal Agencies This section would require Federal agencies to develop a plan for using advanced tools that promote energy savings such as computer hardware, energy efficiency software, and power management tools, based on guidance from the Department of Energy. Agencies would submit a report to DOE containing both the plan for implementation and estimated energy and financial savings from the use of the advanced tools. NEMA: The use of the software tools will help to identify energy (electricity) savings opportunities. Numerous NEMAmember technologies are likely to be implicated by this report as ways to improve energy efficiency. Section 402: Availability of Funds for Design Updates This section would allow the General Services Administration (GSA), for any project for which congressional approval has been received and the design has been completed but for which construction has not begun, to use appropriated funding to update the building s design to meet energy efficiency and other standards for new federal buildings. Funds used for this purpose could not exceed 125 percent of the estimated energy or other cost savings resulting from the design changes. NEMA: Energy performance begins at the design phase for new buildings, so including energy efficient equipment from the start can help ensure that a building will waste less energy once built. Allowing GSA to update building plans to comply with federal energy efficiency standards as included in 42 U.S.C and 40 U.S.C (e.g., ASHRAE 90.1 and the International Energy Conservation Code), will positively impact NEMA members who provide energy efficiency solutions. If the language were broadened to allow GSA to use federally appropriated funds to modify building designs to include climate/weather resilience, sustainability, fire safety, and personal security measures, then this provision would be even more beneficial to NEMA members, but the scope of the bill may preclude including nonenergy efficiency provisions. Section 404: Federal Data Center Consolidation This section would require the Office of E-Government and Information Technology within the Office of Management and Budget to develop and publish a goal for the total planned annual costs savings by the Federal Government through data center consolidation. NEMA: Data centers are huge consumers of electricity. The federal government through its Federal Data Center Consolidation Initiative (FDCCI) is centralizing data management facilities from server closets scattered through federal buildings to dedicated data centers a process that will call for federal procurement of new electrical infrastructure transformers, uninteruptible power supplies, and power electronics all NEMA member products. Consolidation itself plus acquisition of more efficient equipment will save the federal government in energy costs.