Washington–U.S. Senators Dianne Feinstein (D-Calif.), Jeff Bingaman (D-N.M.) and Olympia Snowe (R-Maine) introduced bipartisan legislation to help American business make long-term energy-savings investments; reduce the greenhouse gases; reduce fuel dependency and industrial water consumption; and create American jobs by making our industrial sector more competitive.
The Expanding Industrial Energy and Water Efficiency Incentives Act of 2012 creates tax incentives in four critical areas -- water reuse, advanced motors with adjustable speed drives using process control and connection to Smart Grid, chillers, and highly efficient thermal biomass -- and enhances incentives for combined heat and power (CHP) systems.
“This bill will help California businesses be more energy efficient and increase their productivity,” said Senator Feinstein. “The bill uses efficiency measures to reduce energy consumption of industrial motors by up to 2.3 billion kilowatt hours annually just in California, saving our industrial sector more than $200 million each year. The bill also includes a unique tax credit to reduce water consumption in the desert Southwest, the sort of policy we desperately need to reduce water waste while supporting our industrial base.”
Senator Bingaman said: “A landmark study on energy efficiency found that the industrial sector represents the largest potential for increasing energy efficiency in the country. Such improvements could save American companies $47 billion annually in energy costs. This bill offers focused, short-term incentives to help the industrial and manufacturing sectors make the next generation of efficiency investments necessary for these sectors to remain globally competitive and continue to push innovation.”
Senator Snowe said: “Maine’s manufacturing sector have consistently raised the high cost of energy as a major competitive disadvantage. While I continue to work to expand natural gas utilization for manufacturers, the easiest method is through investments in energy efficiency. This legislation will catalyze investments in technologies that use finite and expensive energy more efficiently, reducing operating costs and increasing our global competitiveness. I thank Senator Bingaman for his leadership in developing this legislation and look forward to working with him and Senator Feinstein in enacting this bill into law.”
The bill does the following:
- Establishes $120 per horsepower tax credit for manufacturers that incorporate advanced motor systems – those that offer variable or multiple speed operation and use a set of approved technologies – into new or redesigned appliances, machines, or equipment.
- Establishes an Industrial Process Water Use Project Credit for investments in reuse, recycling, and efficiency measures related to process, sanitary, and cooling water for industrial and manufacturing facilities. The U.S. currently re-uses only 6% of its water, and there is significant potential for gains in this area.
- Establishes an incentive for facilities o retire and replace old chillers that harm the atmosphere. Chillers are the engines of air-conditioning systems for almost all large buildings. The bill establishes a credit of $150 per ton, plus an additional incentive of $100 for each ton downsized during replacement.
- Establishes a tiered investment tax credit for highly efficient thermal biomass incentives: 15 percent for systems that achieve 65 percent or greater efficiency and 30 percent for systems that achieve 80 percent or greater efficiency.
The bill also improves upon an existing tax credit that Congress enacted in 2008 for combined heat and power systems. It expands the credit’s applicability from the first 15 megawatts to the first 25 megawatts of system capacity and removing the overall system size cap of 50 megawatts.
The bill has been endorsed by the American Council for an Energy-Efficient Economy, the Alliance to Save Energy, U.S. Combined Heat and Power Association, the Air Conditioning, Heating, and Refrigeration Institute, the National Electrical Manufacturers Association, and the Biomass Thermal Energy Council.
“Each of the provision in the bill represents important opportunities to promote energy efficiency in the industrial sector," said Neal Elliott, Associate Director for Research at the American Council for an Energy-Efficiency Economy. “These provisions will provide an important short-term boost to new and underutilized energy efficiency technologies to help establish them in the marketplace.”