The View From Here
by Ric Jackson
March 16th, 2015

A Tale of Two Bills: 10-Year Paybacks are Back in Vogue

Some good news came out of Washington last week with the reintroduction of the Shaheen-Portman Senate Bill S 2262 (aka the Energy Savings and Industrial Competitiveness Act), a measure that’s publicly endorsed by 140+ corporations, including Quanex. As you might recall, this energy-savings bill became ensnarled in politicking last May, leaving us wondering if it would ever see the light of day again. I’m happy to report that, as of March 11, it’s back on the agenda.

Meanwhile, in the House of Representatives, U.S. Reps. Marsha Blackburn (R-Tenn.) and Kurt Schrader (D-Ore.) reintroduced HR 5027, a bipartisan bill focusing on creating cost-effective energy codes that promote efficiency in buildings and homes. This bill is also highly endorsed, even achieving significant backing from builders across the U.S.

That’s two energy-saving bills that have come back to life – and they have some definite similarities. Both faced resistance in Congress last year, despite bipartisan support. Both encourage more energy-efficient construction for residential and commercial buildings. Both suggest energy-saving justification and financing incentives. And both could be good for our industry.

(View a side-by-side comparison of HR 5027 and S 2262.)

Cost Effectiveness is a Recurring Theme

I’m watching these bills because of their potential impact on our industry. But, I’m also intrigued by the emphasis on making sure codes and improvements are cost effective.  For example, HR 5027 focuses on reducing regulatory burdens on builders and restricts the DOE from developing programs and code proposals that do not support a “simple 10-year payback.”

The 10-year payback theme is one that should seem familiar. While ENERGY STAR® version 6.0 was being drafted and debated, the WDMA suggested that upgrades resulting in a cost burden greater than a 10-year payback were not reasonable. And it stuck. The EPA has taken the payback period seriously and has included it in its presentation to ENERGY STAR version 7.0 stakeholders.

It’s worth noting that the DOE has long been a proponent of ensuring cost effectiveness, developing the technology selection tool (prioritization tool) that calculates the cost effectiveness of various building and appliance technologies based on cost of energy and rate of adoption. And the DOE continues to fund technologies with aggressive cost criterion to drive the cost of efficiency down.

It’s interesting to see that federal legislation, such as HR 5027, is following a pattern started right here in our industry with the 10-year payback. It’s proof that if we work together, our voice can and will be heard. Learn how you can get involved.

What’s your view? Email me directly at eric.jackson@quanex.com.

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