The
Energy Policy Act of 2005 ( ) is a
bill passed by the
United States Congress on July 29,
2005, and signed into law by President
George W. Bush on August
8, 2005, at Sandia National Laboratories
in Albuquerque, New Mexico
. The act, described by proponents as an
attempt to combat growing energy problems, changed
US energy policy by providing tax
incentives and loan guarantees for energy production of various
types.
Provisions
General provisions
- Authorizes loan guarantees for
"innovative technologies" that avoid greenhouse gases, which might include
advanced nuclear reactor designs
(such as PBMR) as well as clean coal and renewable energy;
- Increases the amount of biofuel (usually
ethanol) that must be mixed with gasoline
sold in the United States to 4 billion gallons by 2006, 6.1 billion
gallons by 2009 and 7.5 billion gallons by 2012;
- Seeks to increase coal as an energy source
while also reducing air pollution, through authorizing $200 million
annually for clean coal initiatives, repealing the current 160-acre
cap on coal leases, allowing the advanced payment of royalties from
coal mines and requiring an assessment of coal resources on federal
lands that are not national parks;
- Authorizes subsidies for wind and other
alternative energy
producers;
- Adds ocean energy sources including wave
and tidal power for the first time as
separately identified, renewable technologies;
- Authorizes $50 million annually over the life of the law for
biomass grants;
- Contains provisions aimed at making geothermal energy more competitive with
fossil fuels in generating electricity;
- Requires the US Department
of Energy to study and report on existing natural energy
resources including wind, solar, waves and tides;
- Authorizes the Department of
the Interior
to grant leases for activity that involves the
production, transportation or transmission of energy on Outer Continental Shelf lands from
sources other than gas and oil (Section 388);
- Requires the U.S.
Department of Energy to
study and report on national benefits of demand response and make a recommendation on
achieving specific levels of benefits and encourages time-based pricing and other forms of
demand response as a policy decision;
- Requires all public electric utilities to offer net metering on request to their
customers;
- Requires the DOE to designate National
Interest Electric Transmission Corridors where there are
significant transmission
limitations adversely affecting the public. The Federal Energy Regulatory
Commission may authorize federal permits for transmission
projects in these regions.
- Provides tax breaks for those making
energy conservation improvements
to their homes;
- Provides incentives to companies drilling for
oil in the Gulf of
Mexico
;
- Exempts oil and gas producers from certain requirements of the
Safe Drinking Water
Act;
- Extends daylight saving
time by four to five weeks, depending upon the year (see
below);
- Requires that no drilling for gas or oil may
be done in or underneath the Great Lakes
;
- Requires that Federal Fleet vehicles capable of operating on
alternative fuels be operated on these fuels exclusively (Section
701.)
- Sets federal reliability standards regulating the electrical
grid (done in response to the Blackout of 2003);
- Nuclear-specific provisions:
- Extends the Price-Anderson
Nuclear Industries Indemnity Act through 2025;
- *Authorizes cost-overrun support of up to $2 billion total for
up to six new nuclear power
plants;
- *Authorizes a production tax credit of up to $125 million total
per year, estimated at 1.8 US¢/kWh during the first eight years of
operation for the first 6.000 MW of capacity; consistent with
renewables;
- *Authorizes loan guarantees of up to 80% of project cost to be
repaid within 30 years or 90% of the project's life [156413];
- *Authorizes $2.95 billion for R&D and the
building of an advanced
hydrogen cogeneration reactor at Idaho National
Laboratory
[156414];
- *Authorizes 'standby support' for new reactor delays that
offset the financial impact of delays beyond the industry's control
for the first six reactors, including 100% coverage of the first
two plants with up to $500 million each and 50% of the cost of
delays for plants three through six with up to $350 million each
for [156415];
- *Allows nuclear plant employees and certain contractors to
carry firearms;
- *Prohibits the sale, export or transfer of nuclear materials
and "sensitive nuclear technology" to any state sponsor of
terrorist activities;
- *Updates tax treatment of decommissioning funds;
- *A provision for the U.S. Department of Energy to report in one
year on how to dispose of high-level nuclear waste;
- Directs the Secretary of the Interior to
complete a programmatic environmental impact statement for a
commercial leasing program for oil shale
and tar sands resources on public lands
with an emphasis on the most geologically prospective lands within
each of the states of Colorado
, Utah
, and
Wyoming
.
In Congressional bills an "authorization" of a discretionary
program is a permission to spend money, while an
"appropriation" is the actual decision to
spend it; none of the authorizations above will mean anything if
the money is never appropriated.
Tax reductions by subject area
Change to daylight saving time
The bill amends the
Uniform Time
Act of 1966 by changing the start and end dates of
daylight saving time, beginning in
2007. Clocks were set ahead one hour on the second Sunday of March
(
March 11,
2007)
instead of on the first Sunday of April (
April
1,
2007). Clocks were set back one hour on
the first Sunday in November (
November 4,
2007), rather than on the last Sunday of
October (
October 28,
2007).
Lobbyists for this provision included the Sporting Goods
Manufacturers Association, the
National Association
of Convenience Stores, and the National
Retinitis Pigmentosa Foundation
Fighting Blindness.
Lobbyists against this provision included the
U.S. Conference of Catholic
Bishops, the
United Synagogue of
Conservative Judaism, the National
Parent-Teacher Association, the
Calendaring and Scheduling Consortium, the
Edison Electric Institute, and the
Air Transport Association.
This section of the act is controversial; some have questioned
whether daylight saving results in net energy savings.
Commercial building deduction
The Act contains provisions for commercial buildings that make
improvements to their energy systems. Energy improvements completed
in 2006 and 2007 are eligible for tax deductions of as much as
$1.80 per square foot. The incentives focus on improvements to
lighting, HVAC and building envelope. Improvements are compared to
a baseline of
ASHRAE 2001 standards.
Many buildings are eligible for tax deductions for improvements
completed or planned within the normal course of business, and can
thus "
free ride" for the new
incentives. Achievement of these benefits requires cooperation
between the facilities/energy division of a business and its tax
department. A tax advisor with engineers on staff may serve as a
bridge between these two historically separate business divisions.
For municipal buildings, benefits are passed through to the primary
designers/architects in an attempt to encourage innovative
municipal design.
Energy management
The commercial building tax deductions can be used to improve the
payback period of a prospective energy improvement
investment.
Often the deductions are combined with participation in demand
response programs where buildings agree to curtail usage at peak
times for a premium.
The most common qualifying projects are in the lighting
area.According to the Interim Rules for Lighting Projects:The
lighting system energy savings target is a LPD (Lighting Power
Density), or watts per square foot, that is 25% to 40% lower than
the minimum requirements of ASHRAE/IESNA Standard 90.1–2001For
warehouses, the lighting power density (W/sq. ft.) must be 50%
lower than the minimum requirements of ASHRAE Standard 90.1–2001 to
be eligible for $0.60 per square foot.Lighting power density (W/sq.
ft.) reductions of <25% are="" ineligible="" for="" any=""
tax="" deduction.=""></25%>
In addition to demonstrating a reduction in lighting power density
lower than the requirements for Standard 90.1–2001:
Control provisions (i.e. Automatic Lighting Shutoff) relating to
lighting systems as set forth in the Standard must be met.Bi-level
switching must be installed.The lighting system must also meet the
minimum requirements for calculated light levels as set forth in
the 9th Edition of the IESNA Lighting Handbook.
Congressional Budget Office (CBO) cost estimate
The
Congressional Budget
Office review of the conference version of the bill estimated
the Act will increase direct spending by $1.6 billion, and reduce
revenue by $12.3 billion between 2006 and 2015. The CBO noted that
the bill could have additional effects on discretionary spending,
but did not attempt to estimate those effects.
Support
The collective reduction in national consumption of energy (gas and
electricity) is significant for home heating. The Act provided
tangible financial incentives (tax credits) for average homeowners
to make environmentally positive changes to their homes. It made
improvements to home energy use more affordable for walls, doors,
windows, roofs, water heaters, etc. Consumer spending, and hence
the national economy, was abetted. Industry grew for manufacture of
these environmentally positive improvements. These positive
improvements have been near and long-term in effect.
The collective reduction in national consumption of oil is
significant for automotive vehicles. The Act provided tangible
financial incentives (tax credits) for operators of hybrid
vehicles. It helped fuel competition among auto makers to meet
rising demands for fuel-efficient vehicles. Consumer spending, and
hence the national economy, was abetted. Dependence on imported oil
was reduced. The national trade deficit was improved. Industry grew
for manufacture of these environmentally positive improvements.
These positive improvements have been near and long-term in
effect.
Criticisms
- The Washington Post
contended that the spending bill is a broad collection of subsidies
for United States energy companies; in particular, the nuclear and
oil industries.
- Texas companies in particular benefit from the bill. This
criticism is heightened by the fact that President George W. Bush,
the House Majority Leader (Tom
DeLay), and the Chairman of the House Energy &
Commerce Committee (Joe Barton) were
all from Texas. The fact that the bill passed 66-29 with some
support from Democrats for the bill has not calmed this criticism
(a Philadelphia
Inquirer editorial on July 28,
2005, suggested Congress had a "let's pass it
and claim we did something" attitude).
- Speaking for the National Republicans for Environmental
Protection Association, President Martha Marks said that the
organization was disappointed in the bill: it did not give enough
support to conservation, and continued to subsidize the
well-established oil and gas industries that don't require
subsidizing.
- The bill did not include provisions for drilling in the Arctic
National Wildlife Refuge (ANWR) even though some Republicans claim
"access to the abundant oil reserves in
ANWR would strengthen America's energy independence without harming
the environment."
- Senator Hillary Rodham
Clinton made the bill an issue in the 2008 Democratic Primary by
criticizing Senator Barack Obama’s two
votes supporting the bill, calling it the “Dick Cheney lobbyist
energy bill.”
Legislative history
The Act was voted on and passed twice by the
United States Senate, once prior to
conference committee, and once
after. In both cases, there were numerous senators who voted
against the
bill.
John McCain, the
Republican Party nominee
for
President of the
United States in the
2008 election
voted against the bill. Democrat
Barack
Obama, the current President of the United States, voted in
favor of the bill.
Provisions in the original bill that were not in the act
Preliminary Senate vote
June 28,
2005, 10:00
a.m. Yeas - 85, Nays - 12
Conference committee
The bill's conference committee included 14 Senators and 51 House
members. The senators on the committee were: Republicans Domenici,
Craig, Thomas, Alexander, Murkowski, Burr, Grassley and Democrats
Bingaman, Akaka, Dorgan, Wyden, Johnson, and Baucus.
Final Senate vote
July 29,
2005, 12:50
p.m. Yeas - 74, Nays - 26
Legislative history
| Stage |
House of Representatives |
Senate |
| Initial Debate |
| Introduction |
April 18, 2005 |
June 11 |
| Committed |
April 18 |
June 14 |
| Committee Name(s) |
Energy and Commerce
Education and the Workforce
Financial Services
Agriculture
Resources
Science
Ways and Means
Transportation and Infrastructure |
|
| Committee Stage |
April 18 to 19 |
|
| Committee Report |
April 19 |
|
| Floor Debate |
April 19 to 21 |
June 14 to 23
Cloture invoked June 23, |
| Passage |
April 21, |
June 28, |
| Conference Stage |
| Conference Demanded/Accepted |
July 13 |
July 1 |
| Conference Meetings |
July 14 to 24 |
| Report Filed |
July 27 |
| Final Passage |
| Final Debate |
July 28 |
July 28 to 29
Budget Act waived, July 29, |
| Concurrence and Passage |
July 28, |
July 29, |
| Presented to President |
August 4 |
| Signed |
August 8 |
See also
References
- http://www.epa.gov/oust/fedlaws/publ_109-058.pdf
- Ken Belsen and Matthew L. Wald, " ’03 Blackout Is Recalled,
Amid Lessons Learned", New York Times, August 13, 2008, found
at NY Times website. Retrieved August 27,
2008.
- David Freedlander, "It could happen again: On fifth anniversary
of blackout, nation still vulnerable", A.M. N.Y., August
12, 2008. See response at Letter to the Editor. Retrieved August 27,
2008.
- Report, Energy and Commerce Committee, "Blackout 2003: How Did
It Happen and Why? Full Committee on Energy and Commerce, September
4, 2003, found at Energy and Commerce Committee website.
Retrieved August 27, 2008.
- Congress Passes First Comprehensive Energy Bill in
13 Years, Nuclear Energy Institute, 2005
- UtiliPoint Issue Alert:New Nuclear Plants Coming to the
United States?, January 17, 2007
- Detailed 2005 breakdown nei.org - PDF, 29kB)
- Grunwald, Michael and Juliet Eilperin. " Energy Bill Raises Fears About Pollution, Fraud
Critics Point to Perks for Industry." Washington Post.
July 30, 2005.
- " Bush signs $12.3 billion energy bill into law."
MSNBC. Aug. 8, 2005.
- Knight, Peyton. " Small Group of House Republicans Derails ANWR
Drilling." Washington, DC: The National
Center for Public Policy Research. November 10, 2005.
- Votes from all Senators
- 92-4 senate.gov
- 249-183 clerk.house.gov
- 85-12 senate.gov
- 71-29 senate.gov
- 275-156 clerk.house.gov
- 74-26 senate.gov
External links
Government
News
Non-Profit
- Clean
Fuels Ohio - This site focuses on alternative fuels as well as
alt-fuels incentives created by the Energy Policy Act of 2005.
(ANWR).
, zero-emissions coal-fired power plant
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