The Price of Power

The legislative agenda, Bingaman related, will include adequate funding for low-income energy assistance. He would like to pass a supplemental appropriation for this program. He also said the Senate will address the "high prices of wholesale power going into California and other Western states."

He remarked, "It's my belief wholesale prices have not been just and reasonable."

Other topics to be considered are "boutique fuels," the multiplicity of gasoline blends; expansion of the home weatherization program; and increasing efficiency in federal buildings through energy-saving performance contracts.

Bingaman would like to improve vehicle fuel efficiency. He said that there are a number of initiatives that could be looked at to improve fuel efficiency. He also wants to look at energy tax incentives to improve efficiency. "I'd like to see some of these tax incentives enacted into law."

U.S. energy policy, he stated, "must consider global climate change. I think it can be environmentally responsible."

Representative Edward J. Markey (D-MA), a senior member of the House Energy and Commerce Committee, said that, like a segment on the old "Rocky and Bullwinkle" TV show, President Bush is stuck in a "way-back machine" regarding energy efficiency, looking backward rather than forward.

In the 1970s, he said, the federal government doubled vehicle fuel efficiency standards. "But now, overall fuel economy has slipped back to where it was in 1981."

The outgoing Clinton administration, Markey observed, called for a 30% increase in the air conditioner efficiency standard (13 SEER). Although major manufacturer Goodman Manufacturing Co. supports and is already meeting this proposed standard, he said, the Bush administration decided this was "too onerous" and rolled it back to 20% (12 SEER).

"What we have here is an administration which is in technological denial," proclaimed Markey. Doing things like cutting the research and development budget for energy efficiency "makes no sense whatsoever."

He said that Democrats want to create tax incentives for more energy-efficient buildings and invest more money in alternative energy sources.

"This country cannot be about the way-back machine," he maintained. "This country is about the future," taking an optimistic view of how we can use new technology to advance. He stated bluntly, "Goodman is right and everybody else is wrong."

Making Tough Decisions

Curt L. Hébert Jr., chairman of the Federal Energy Regulatory Commission (FERC), discussed infrastructure, deregulation, and the California situation in particular.

"Supply is necessary," he said. "Infrastructure has to be there. If one of them is broken down, it all breaks down from there."

He noted, "We're moving from regulation to competition. And it's never an easy task." We have "tough decisions today in America."

The politicians say, "The American people don't know best," declared Hébert. They say price caps are best; protection is best. But the American people don't need protection, he contended. FERC focuses on "market solutions and market mechanisms. Short-term measures must be respectful of long-term goals."

He said, "California is getting there." But it's not there yet. About 20% of California's energy needs remain in the spot markets. "It's an evolution," developing reliable, affordable energy.

"Americans inherently are for choice," Hébert said. For California, we'll get "this market on its feet." Hydroelectric capacity has been added, and he's optimistic about the future.

Vice President Dick Cheney then gave the keynote address, presenting the administration's perspective. He recounted that last year Bush and he identified energy as a possible "storm cloud on the horizon." Four days after being sworn in as president, Bush asked Cheney to develop a report outlining a comprehensive energy policy.

We have an ancient power grid that must be upgraded and expanded, the vice president said. The supply of all sources of energy must be expanded.

"An energy shortage is bad for the environment, as we've seen in California, where dirtier plants are now running longer in order to keep the lights on," he said.

However, "It is possible to have more energy and a cleaner environment," by making use of the latest technology, stated Cheney. "But it's not just a matter of cleaner use. We must become much more efficient in our energy use as well."

Nuclear Power

Nuclear power was noted as a source of emission-free energy. Nuclear generation produces approximately 20% of the nation's electricity at present, the vice president said. "We'd like to increase that."

However, we have to deal with the nuclear waste issue. Only one federal waste storage site is being considered, at Yucca Mountain in Nevada, and Senate Democrats oppose the plan. If we don't deal with the waste problem, observed Cheney, then we won't see investment in nuclear power.

On the matter of global climate change, Cheney said, "The United States spends more than any other country on climate change research, more than the combined expenditures of Japan and all 15 countries in the European Union."

An environmental protester yelled out a question on the Kyoto Protocol, wanting to know why the administration had backed out of the treaty. Cheney decided to take the question.

"Unfortunately, we believe it's flawed," he responded. He cited that some of the world's major countries, such as China and India, are not included under its provisions and do not have to curb their emissions. We don't know how much of the temperature change is normal variability and how much is man-made, he said. We don't know exactly what is a safe concentration in the air. Also, he said, the treaty "could have devastating consequences" on the U.S. economy.

Sidebar: In a Crisis, Efficiency Is Key

The current energy crunch was also addressed at the 12th Annual Energy Efficiency Forum by a panel discussion called, "The Energy Crisis: Where Do We Go From Here?"

Moderated by Llewellyn King, publisher of The Energy Daily, panelists included David Nemtzow, president of Alliance to Save Energy; Branko Terzic, director, public utilities services, Deloitte & Touche; and Marshall (Mark) E. Whitenton, vice president, environment and regulation, National Association of Manufacturers.

"We think supply will remain tight over the next five years," said Whitenton. "We firmly believe energy efficiency is key. We urge the administration to keep a sustained effort going."

Nemtzow said that a recent poll found that 90% of Americans support more energy conservation by consumers, and 58% disapprove of the administration's energy policies. The American public believes that energy efficiency is the cheapest and quickest way to address our energy problems, he stated. "With the public so strongly in favor of efficiency, politicians won't be far behind."

Terzic noted that we're failing in providing adequate supply at fair prices. "If we have a mess, it's a bipartisan mess," he said. "We don't want to turn this into a partisan issue." King said that manufacturers seem to say initially that higher standards can't be met, then they see later that they are advantageous.

"We need to get the marketplace to work," remarked Nemtzow. Consumers need to be educated. Standards are the last consequence, he said, but sometimes we need standards. "If we use energy wisely, we will avoid these problems."

He added, "Buildings have been one of our technological successes." Buildings are much more efficient now. But new technologies aren't always implemented as quickly as they could be, said Terzic. New technology becomes available, but there aren't economic incentives, such as write-offs, to encourage its application.

Publication date: 06/25/2001