Mr. President, I rise today to speak to the Energy Savings and Industrial Competitiveness Act of 2013, S. 1392 or more commonly referred to here by the names of its lead cosponsors, Shaheen-Portman.
This is a bill that allows us to turn back to the issue so many Americans have been asking us to focus on: jobs, competitiveness, manufacturing, the steps we can take to put our country back on the right path for our future.
This bill is essentially about energy efficiency and all the different ways energy efficiency, used wisely, can strengthen America. An America that uses less energy is an America that is taking less from the Earth, an America less reliant on other nations for the fuel that powers our lives and livelihoods, an America whose people won’t need to mortgage their future in order to cool their homes.
An America that uses less energy is an America that will never again wait in long gas lines; that in the summers won’t have to sweat through brownouts and in the winters won’t have to make the tragic choice between feeding their families and keeping them warm.
There have been some tough economic times for our nation in recent years. And while I haven’t been in Washington all that long, I get the sense the climate here around the budget and our fiscal issues has almost never been as toxic and difficult to navigate as it is right now. Of course, the reality is broadly, across the whole federal budget, we do need to tighten our belts and we are going to have to prioritize investments that are the most important to America’s future. But energy efficiency is entirely about America’s future. It is exactly the sort of area where we can reach a bipartisan agreement on an important path forward together.
Energy efficiency is entirely about America’s future. There is no winning in the fight for energy efficiency. There is only progress. There is doing better, conserving energy, and saving money. The pennies we invest today in energy efficiency will save our governments, our businesses, and our families dollars down the road.
So how do we do it? How do we build our more energy-efficient future when cost efficiency is ruling the day here in this Chamber and in this Congress? It starts with this wise, balanced, and bipartisan bill we are considering today, the Energy Savings and Industrial Competitiveness Act.
I am proud to be a cosponsor of this valuable bill, and I applaud the tireless work of my friends, Senators Shaheen of New Hampshire and Portman of Ohio, in crafting the bill, focusing this bill, and then ultimately getting it to the floor. I am also grateful to the leadership of Senator Wyden, the chairman of the Energy Committee, and Senator Murkowski, his ranking Republican, in ably advancing it through the committee, where it passed by a vote of 19 to 3, and in getting it to the floor today.
I am grateful to Senators Wyden and Murkowski for the bipartisan energy they have crafted on the committee and for the positive tone they have set. I have greatly enjoyed my years of service on the Energy and Natural Resources Committee and appreciate their work that has allowed Senators Shaheen and Portman and many of the other cosponsors of this bill to see it on the floor here today.
We are at a critical moment. If America is going to lead, we have to work together to set a long-term strategy that moves us toward an efficient, clean energy-competitive economy. This bill helps us do that.
It looks as though we are going to have a few more days to talk about the full scope of this bill because, unfortunately, there have been other amendments offered — amendments that aren’t directly germane to this bill. And as has sadly, so often been the case in the months gone by, we have had a grinding halt to the opportunity to move forward on this broad, bipartisan bill that enjoys support from Republicans and Democrats, that has an opportunity to be passed through the other Chamber as well as this, and that could do great work for America.
It is my hope that next week when we return, this Chamber will take up, consider, and pass this bill; that we will consider dozens of amendments germane to this bill, relevant to this bill that will bring other good ideas about energy efficiency to the floor, and that we will strengthen it and pass it.
This bill has been scored as having a very real prospect of creating 136,000 jobs in the next dozen years, by 2025. Imagine getting back to considering bills that actually help create jobs. There is a list of more than 250 corporations, nonprofits, and associations from all different sectors of the American society and economy that have endorsed this bill. It has a broad range of provisions that deal with energy efficiency codes and voluntarily improving them, skills and training, improving manufacturing, improving the energy efficiency of the U.S. Government, the single biggest purchaser and user of energy in our country — indeed, probably in the world. It achieves huge targets, great objectives, saving nearly 3 billion megawatt hours in energy by 2030, and saving consumers more than $13 billion a year by 2030. These are great and robust goals, and I am truly hopeful we will turn to this bill in earnest next week and take up and consider some of the range of amendments that have been offered.
I wish to now briefly review three of the amendments I have introduced for consideration as part of Shaheen-Portman.
I know one of the best things about how the senators and the committee leaders have crafted this bill is that it is open to consideration of a broad range of ideas. All three of these amendments are directly related to energy efficiency. Not all three of them may end up being part of this bill, and I understand, but I am grateful for a few moments of my colleagues’ attention to bring them up and discuss their benefit, value, and relevance.
The first is 1842. It allows for the reauthorization of valuable energy programs that have been at the heart of the federal government’s energy efficiency strategy for a long time; the Weatherization Assistance Program and the State Energy Program. Both are programs in place for decades and that work daily in each and every one of our states, helping to reduce energy usage and reduce energy costs.
In states such as your own, Mr. President, the State of Massachusetts, where the winters can be cold and long and energy expensive, programs at the state level and weatherization assistance programs can make a real difference in the lives of consumers. These programs link national, state, and local interests in a critical way. They create highly effective public and private partnerships that have delivered real results. In fact, studies have shown that the Weatherization Assistance Program returns more than $2.50 in household savings for every $1 invested. The program serves over 7 million families in its existence, including more than 1 million in the last 4 years. The results are equally strong for the State Energy Program, where every federal dollar invested has an energy cost savings of more than $7 a year and nearly $11 in non-federal dollars is leveraged for every federal dollar spent.
These are highly effective programs, but both of their authorizations have expired, so we need to reauthorize these programs so we can help Americans save energy and save other energy costs.
Earlier this year I partnered with Senators Collins of Maine and Reed of Rhode Island to introduce the Weatherization Enhancement and Local Energy Efficiency and Investment in Accountability Act. That is a mouthful, but it has a wide base of support, including from the Alliance to Save Energy, the Community Action Foundation, the National Association of State Energy Officials, Habitat For Humanity, building suppliers such as Masco Corporation, business groups such as the Business Council For Sustainable Energy, environmental groups such as the NRDC, and many more.
I have introduced that legislation as an amendment. To summarize what it does, it reauthorizes these two critical energy programs for five more years, the State Energy Program and the Weatherization Assistance Program. But it doesn’t just reauthorize them, it modernizes them. It enhances them with new ideas and ultimately works to ensure their long-term viability.
We call for a complementary, competitive innovation program as well as call for setting baseline standards. This amendment actually reduces the funding levels to where they were 6 years ago, in order to attract bipartisan support and to be more fiscally responsible. This amendment says that the new minimum efficiency standards the Department of Energy is working on must be in place by October of 2015, and it creates a complementary competitive grant program to allow NGOs to compete for their piece of the funding. Overall, we want to bring in new partners, new approaches, new technologies, and new ideas to ensure that more homes can be weatherized, more families have their heating bills reduced, and more energy saved with limited federal funding. I urge the support of my colleagues for this first amendment, No. 1842, about the Weatherization Assistance Program.
Let me now turn to something that I think is just common sense, where I hope the federal government, one of the largest users of energy in the world, will take advantage of a contracting tool to achieve energy savings and cost savings in ways that both the private sector and local government have as well. I am talking about Energy Savings Performance Contracts, and I had personal experience with them when I was in the private sector with a manufacturing company in Delaware and when I was a county executive. We used this tool, this technique, in both of those contexts to finance very expensive capital investments in chillers and boilers and motors in elevators and lights and in energy efficiency retrofits throughout our buildings. But they were not paid for upfront by either the manufacturing company I worked for or the county which I ran as county executive; they were financed off of dedicated future energy savings. So these capital improvements were installed at the cost of a private company, not the government, not the manufacturer upfront, and then paid for over a long time by the energy cost savings that the increased efficiency achieved.
That may seem complicated, but it is well known, well demonstrated and used widely across this country and is something the federal government should make better use of. As I mentioned, by contract, the company is paid for its upfront capital investments in these higher efficiency systems through future savings that result from decreased utility costs. If state, local, and federal facilities are currently taking advantage of these, if they are well known and well demonstrated, why isn’t the federal government making broader use of them? Partly because of contracting and budgeting challenges, and it is partly because there is not enough push, enough energy behind the use of these ESPCs.
They also have a secondary benefit of creating lots of private sector jobs, jobs that cannot be outsourced, jobs that require local workers. Because what we are truly talking about are sheet metal workers and electricians, folks who are installing things and taking things out, laborers and mechanics. These are great jobs and at no cost to the taxpayer.
Estimates are that there is more than $20 billion available to the federal government through the use of performance contracts, savings that we know we can achieve, and at no cost to the taxpayer.
In December of 2011, President Obama announced a federal commitment to enter into Energy Savings Performance Contracts equal to $2 billion over two years. But what happens when that window ends? Now that we are in 2013 and about to hit the end of that window, there will be no authority to continue to encourage the use of ESPCs in federal facilities. In the current fiscal climate, performance contracts offer the federal government the best method for upgrading aging facilities and reducing energy costs.
Earlier this summer I introduced the Energy Savings Through Public-Private Partnership Act to push the federal government in the right direction by encouraging increased utilization of these contracts. I introduced that as an amendment to the Shaheen-Portman act. As I mentioned, it creates a new goal for the federal government, to be specific, a goal to enter into $1 billion a year in energy savings contracts over the next five years — $5 billion in savings at no cost to the taxpayer.
It encourages more performance contracting by requiring that federal facilities managers “shall consider” implementing identified energy and water conservation measures. It increases energy savings transparency by requiring the online publication of energy and water conservation measures, and it requires government energy managers to publicly explain why they chose not to use NSPC if they do not. It ensures greater accountability by requiring the administration to report to Congress on the status of the annual performance contracting goal each year.
In previous hearings, I have asked the Secretary of Energy and others involved in the federal performance system why this is not more actively used. The explanations have more to do with the complications of bureaucracy adrift in inaction than why it cannot be done. Positive responses from the President and from departments and from facility managers strongly suggest that this amendment, this bipartisan amendment, could be considered as a part of S. 1492.
Let me last turn to one I have worked hardest on and am most excited about, amendment No. 1841, the Master Limited Partnership Parity Act. This one has the potential to change the long-term playing field for energy financing in the United States. Access to low-cost financing will determine our nation’s energy future. It will determine how and when and which energy sources emerge as central players in the American energy marketplace in the long term, and I think it is up to us to ensure our vast national supply of clean renewable power as well as energy efficiency are vital parts of that overall equation.
What am I talking about? What is a master limited partnership? It is a business structure that is taxed as a partnership but whose ownership interests are traded like corporate stocks on a market. It is a tax-advantaged capital formation vehicle. They have been around more than 30 years. There are more than 100 of them with a market cap over $40 billion, and they have been overwhelmingly used by oil and gas and pipeline interests. Oddly, by statute, MLPs are only available to investors in energy portfolios for oil, natural gas, coal extraction, and pipeline projects — nonrenewable energy. As I mentioned, these projects get access to capital at a lower cost and are more liquid than traditional financing approaches to energy projects, making them highly attractive to private sector investment.
Investors in renewable energy and energy efficiency projects, however, have been explicitly prevented from forming MLPs, starving a growing portion of America’s domestic energy sector of the capital it needs to grow. I introduced the bipartisan Master Limited Partnership Parity Act to include renewable energy and energy efficiency projects among all those other areas of energy for which MLPs could be formed, and I am grateful for the tireless partnership of my lead cosponsor, Senator Jerry Moran of Kansas and for the courage and energy Senator Lisa Murkowski of Alaska has brought to advocating for this bill as a cosponsor and for the early support of Senator Debbie Stabenow of Michigan. The four of us have now over two Congresses worked tirelessly on this bill.
It has a corollary in the House that also has a strong bipartisan group of cosponsors. I recently testified about this bill, as has Senator Moran, both at the Senate Energy Committee and Finance Committee, and I have been grateful for the interest of Chairman Ron Wyden and an array of other senators from both parties.
As I mentioned, this MLP Parity Act has the opportunity, the possibility of being the “all of the above” energy strategy that is so often talked about and to be the capital-financing piece of this, a strategy that does not pick winners and losers but allows the markets to decide where to invest in the long term. It has generated a great deal of interest and support. It has hundreds of supporters coming from the private sector, from think tanks, from nonprofits, and from advocacy groups.
It could not be simpler. It is a very short bill, just a few hundred words. Instead of barring renewable projects and energy efficiency projects from being able to organize as Master Limited Partnerships, it embraces them. It would bring new low-cost capital into the energy market and help more renewable energy and energy efficiency projects to get off the ground, increase domestic energy production, and increase our nation’s energy security.
I urge support for this amendment, which is a separate piece of legislation being offered as an amendment to this bill. All three of these amendments are good ideas. As we proceed next week, I may or may not call them up as amendments to this bill to be considered on the floor, but the last, the Master Limited Partnership Parity Act in particular, is a public policy idea worthy of consideration by this body at some point in the months and years ahead.
Let me, in closing, simply say I am grateful we have had the opportunity to return to a vigorous debate about a bipartisan bill that has the very real prospect of saving energy, of creating jobs, of investing in manufacturing and in skills and of growing the economy of the United States in a way that reduces our energy use, makes us less reliant on foreign energy sources, makes less of an impact on our environment, and gives us more hope for the future — a brighter and more optimistic future.
I can think of no better signal this Senate and this Congress can send to the people of the United States than that we take up, consider, and pass many of the bipartisan amendments that have been discussed here today and then finally pass the Shaheen-Portman bill and send it to the House for consideration, passage, and ultimately signature into law.
The people of my home state ask me all the time when will we get back to listening to each other, working together, and passing real bipartisan bills that can help create jobs. This bill will accomplish those goals.
It is my prayer, my hope, we will do that vital work next week when we return.