Wednesday, January 09, 2008

The Energy Independence and Security Act of 2007: An Energy Manager's Summary

The Energy Independence and Security Act of 2007 was signed into law on December 19, 2007. A stroke of the president’s pen provides what the Alliance to Save Energy calls “the most sweeping energy efficiency legislation ever enacted.” Here’s a summary of what this legislation means for commercial and industrial energy managers.

If your agenda is to improve business performance by reducing energy waste, the new law gives limited and indirect help. Managers in the industrial (manufacturing) sector can look to Sections 451 and 452. In brief, Section 451 directs the U.S. Environmental Protection Agency to create an inventory of industrial sites that are suitable for generating electricity from current fossil fuel-burning processes. It also authorizes (but does not yet appropriate) up to $200 million per year for the next several years to be used as grants to incentivize construction of such power generation capacity.

Section 452 authorizes (but does not yet appropriate) a climbing scale of funding—from $184 million in FY08 to $208 million in 2012—to support research, development and deployment of “energy efficiency” in energy-intensive industries, which interestingly includes “data centers.” This R&D funding leads to the continued development of much-needed technology and hardware. What's missing is a complementary R&D effort on the "human" side of energy management, which entails an evolution in thinking about the procedures, behaviors, and accountabilities we apply in using these technologies.

Because the federal government is the single largest energy consumer in the U.S., it is the focus of the entire Subtitle C (Sections 431-441). In brief, these sections set energy reduction goals and even attempt to prescribe how to do it—for example, Section 432 directs federal agencies to create energy manager positions, calls for periodic energy use evaluations, and the development of scorecards to track progress. Of particular interest is Section 434’s direction that all utilities will be metered at the building level. Energy Star guidelines are to be used for leasing of space for federal use, while “High-Performance Green Building Standards” are to be used for “analysis, guidance, and training,” but apparently there’s nothing there to compel action on the part of facility managers.

What will the newly-ratified energy bill accomplish? The industrial provisions are designed to entice, but not compel, certain actions on the part of industry. The RD&D spending will support a lot of national lab and university-based activity, which may eventually result in industry’s adoption of advanced, efficient technologies. What the bill does not, and CANNOT do, is compel industry’s uptake of these products. Those are investment decisions, and they remain the private prerogative of corporate decision-makers.

The federal energy management provisions, you may have noticed, have more teeth to them in that they require specific actions on a specific timetable. Time will tell just how much these ambitious goals are adhered to in practice. Private sector facility managers may want to keep an eye on the implementation of federal agency energy management plans. Some useful lessons about goal setting, measurement and evaluation are certain to emerge.



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