“NO” On the Shaheen-Portman Energy Efficiency Bill

Next week, the Senate is likely to consider the Energy Savings and Industrial Competitiveness Act of 2013 (S. 2262). Introduced by Sen. Jeanne Shaheen (D-NH)Heritage ActionScorecardSen. Jeanne Shaheen6%Senate Democrat AverageSee Full Scorecard6% and Sen. Rob Portman (R-OH)Heritage ActionScorecardSen. Rob Portman55%Senate Republican AverageSee Full Scorecard55%, it claims to promote energy savings in industrial and commercial buildings. The bill provides taxpayer-funded federal incentives to make building and manufacturing processes more efficient, but these “incentives” would burden taxpayers and consumers alike while producing no tangible benefits.  They are also duplicative of federal and state efforts.

This inappropriate intervention comes in the form of ‘voluntary’ federal mandates and taxpayer funded subsidies for energy efficiency updates in state government and tribal buildings.  Specifically, Heritage notes, “The bill authorizes $200 million of taxpayer money to “incentivize and assist” states and tribal groups to meet allegedly voluntary building codes.”  

Shaheen-Portman duplicates laws that are already in place, such as the “Energy Independence and Security Act (EISA) of 2007, with provisions for energy savings in federal, state, local, and commercial industrial buildings as well as for a green jobs program.”  EISA authorized a $10 billion block grant over five years for states, cities, and counties to do efficiency updates.  Myriad other programs already exist and comprise over 4,200 state initiatives that have directed billions of dollars to energy efficiency retrofits.

In addition, millions of dollars would be wasted on workforce training programs.  Heritage explains that since the efficiency gains do not have market value (or industries would already have adopted them), “the government must artificially create both the demand and the supply.”

Even the environmental “benefits” of the Shaheen-Portman bill are negligible.  Whatever one believes about protecting the environment by reducing greenhouse-gas emissions (GHGs), this legislation would fail to change the climate in any meaningful or substantial way.

The bill is also problematic because it “intends to improve transparency and direction for the Department of Energy’s Advanced Manufacturing Office (AMO), which provides grants to improve manufacturing efficiency.”  While improved transparency and direction for a program are laudable goals, Heritage contends this office should not even exist.

AMO duplicates many existing state programs and engages in “blatant corporate welfare for large companies, or research and development projects conducted in universities, which the private sector should collaborate with and fund.”  (emphasis added) For example, LyondellBasell  received a $4.5 million grant and  is one of the largest chemical companies in the world with annual revenues of $45 billion and a market capitalization of $35.7 billion.  Taxpayers should not be subsidizing a company like that.

Finally, the bill would force energy efficiency into mortgage appraisals.  It would impose new regulations on loans insured by federal agencies and would dictate an increase in the amount of money that people would be able to borrow.  “Loan applicants will effectively have their income increased because underwriters will be required to reduce borrowers’ estimated future living expenses,” Heritage explains.  The bill would also permit the micromanagement of the appraisal process, by requiring appraisers to add the value of estimated energy savings to a property, but again,  home’s existing energy-conservation measures should already be part of the estimated value of the home.  These new regulations would open the door for artificially inflating appraisal values.

As Heritage notes, only the free-market has been proven to decrease costs and increase efficiency in energy production.  The federal government’s role in energy efficiency should be limited to providing information to consumers make well-informed decisions.  This legislation allows the government to overstep its boundaries.

Heritage Action opposes S. 2262 and will include it as a vote on our legislative scorecard.

Related links:

Heritage Action Scorecard
Shaheen-Portman’s Forced Energy Efficiency Hurts
Four Problems with Obama’s Push for Energy Efficiency
Energy Efficiency Bill Is a Big Step in the Wrong Direction
The Shaheen–Portman Energy Efficiency Bill: A Costly, Inefficient Use of Taxpayer Money
Energy Efficiency, Not Efficiency Mandates
Keystone Pipeline: Shaheen-Portman Wrong Place for a Keystone Amendment
10 Questions Congress Should Ask About the Shaheen-Portman Energy Bill