AHRI Members Hear Latest on Energy Bills

May 17, 2010
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Rep. Jim Jordan (R-Ohio), a member of the House Budget Committee, called for fiscal responsibility.

Representatives from 50 member companies attended the Air Conditioning Heating & Refrigeration Institute (AHRI) Public Policy Forum in Washington D.C., on March 10 and 11 to receive updates on energy and jobs legislation moving through the U.S. Congress, and to make personal visits to members of the U.S. Senate and House of Representatives.

The timing of the event in the midst of the debate over health care reform made for impassioned presentations from Republican Congressmen and pragmatic presentations from a Democratic Senator and staff members. It was also obvious throughout the two days that the emphasis in Washington had changed from an all out push for the so called cap and trade energy bill to proposals that promote energy savings, provide rebates directly to consumers, and create jobs in the construction industry.

Derek Dorn, senior counsel to U.S. Sen. Jeff Bingaman (D) and staff director of the Finance Subcommittee on Energy, Natural Resources, and Infrastructure said, “There is a change in the emphasis in Washington when it comes to energy legislation. Now we are looking hard at its effect on saving jobs.” He mentioned a Senate bill (S1639) that would provide incentives for variable-speed motors and another bill that would provide $150 per ton incentives for retiring old chillers installed in commercial buildings prior to 1993.

Dorn also spoke in favor of Home Star legislation being considered in Congress because it would provide homeowners with an immediate incentive in the form of a rebate rather than a tax credit. Dorn pointed out that 45 percent of all homeowners in the United States do not pay federal income taxes, therefore a tax credit would not be available to them. The rebate would also be administered through the installing contractors. According to AHRI, Home Star would offer rebates for the purchase and installation of energy-saving equipment such as furnaces and water heaters under its Silver Star level and incentives of up to $8,000 (Gold Star level) for retrofitting an entire home with energy saving products and systems.

Sen. Jeff Merkley (D-Ore.), speaking at the AHRI Policy Forum, suggested that energy legislation must be tied to jobs creation.

Sen. Jeff Merkley (D) spoke to the AHRI group at the U.S. Senate Office Building saying, “There are two things converging in Washington … energy and jobs. I think our best strategy is to tie energy legislation to a jobs package.”

Merkley was followed by U.S. Rep. John Barrow (R-GA) who serves on the Energy and Commerce Committees. Barrow stated climate control is “ill conceived” and the cap and trade bill will not go through and be passed into law. “Our country has never done anything big by slapping a tax on it,” he added.

When U.S. Rep. Jim Jordan (R), a member of the Budget Committee took to the podium he called for fiscal responsibility by the Congress. “When you live for the moment and spend for the moment, you’ve got trouble.” He also claimed the cap and trade provisions of the energy bill “puts us [United States] at a competitive disadvantage with the rest of the world and that is ridiculous.”

Rep. John Barrow (R-Ga.), who serves on the Energy and Commerce Committees, stated that climate control is “ill conceived” and the cap and trade bill will not go through.

Sidebar: Fact Sheet

Home Star is proposed federal legislation designed to create jobs fast by scaling the existing home energy efficiency improvement industry. It is a market-driven, low-bureaucracy program with a fixed lifespan that will produce more direct economic benefit than the cost of the program. Advocates hope consumers will embrace Home Star because it will be simple, accessible, and help them save money.

Matching Money: About $6 billion would be made available to homeowners through rebates offered at two levels. The Silver Star level would give rebates for the purchase and installation of energy-saving equipment such as furnaces and water heaters, or home improvements such as furnaces and water heaters, or such as insulation, new windows, or duct sealing. Homeowners would receive matching funds of up to $1,500 for each installation project, with a cap of $3,000 in rebates.

The Gold Star incentive would go a step further by providing incentives for retrofitting the entire home. First, an energy audit would be completed on the house; then, working with the homeowner, the contractor would design a customized retrofit plan and calculate the energy savings that would result from the recommended improvements. Homeowners could receive $3,000 for projected savings of 20 percent, plus $1,500 for each additional 5 percent of energy savings, with matching incentives up to $8,000. This would encourage homeowners to invest in the most cost-effective technologies - innovations that are often the simplest and most labor-intensive.

Benefits: It is estimated that Home Star will create 168,000 jobs in construction and related industries during the next two years. Retrofitting American homes will not require any new technology or science. Construction and manufacturing companies would ramp up quickly to meet this demand because many building material manufacturers are now operating at close to only 60 percent capacity.

This work can’t be outsourced because skilled construction jobs are, by nature, local. Plus, most of the manufactured goods used to retrofit homes tend to be produced in the United States.

- Information courtesy of AHRI

Sidebar: Creating Jobs

Building Star is a package of rebates and tax incentives for energy efficient retrofits of commercial and multi-family residential buildings. Spurring retrofits of these buildings through Building Star can create jobs by leveraging private-sector investment. For example, $5 billion of public funding for Building Star would spur $10 billion to $15 billion in total program spending, creating an estimated 125,000 jobs.

Building Star proposes 17 incentives for efficient building equipment, materials, and services that would be an immediate catalyst for job creation by small businesses in the construction and manufacturing industries. Retrofits would be undertaken by a construction industry in which 91 percent of the firms are small businesses, with fewer than 20 employees, and in which it is common practice for larger construction firms to hire many smaller subcontractors for their projects.

According to the Bureau of Labor Statistics (BLS), rebates for building, mechanical and low-slope roof insulation, windows, and window films would stimulate new jobs in the 55,000 construction and manufacturing firms that serve this market. The BLS also reports that rebates and tax incentives for a full range of HVAC equipment, variable-speed drives, and services such as duct sealing and balancing would drive employment in sectors employing 2 million people in the United States.

- Information courtesy of AHRI

Publication date: 05/17/2010

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