[Congressional Record Volume 141, Number 31 (Thursday, February 16, 1995)]
[Extensions of Remarks]
[Page E362]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


           THE ENERGY EFFICIENCY AND CONSERVATION ACT OF 1995

                                 ______


                           HON. JIM McDERMOTT

                             of washington

                    in the house of representatives

                      Wednesday, February 15, 1995
  Mr. McDERMOTT. Mr. Speaker, today I am introducing the Energy 
Efficiency and Conservation Act of 1995. This is the same legislation 
that I introduced in the 103d Congress as H.R. 784.
  Energy experts across the Nation recognize conservation as the most 
environmentally responsible and cost-effective source of energy 
available today. Under the direction of the Northwest Power Planning 
Council, the States of Washington, Oregon, Idaho, and Montana are 
committed to achieving 1,500 megawatts of energy conservation over the 
next decade. This effort will save enough energy to meet the 
electricity demands of a city half again as large as Seattle.
  This legislation will overturn the Internal Revenue Service practice 
that discourages private utilities from pursuing the kind of effective 
conservation programs that are vital to the Nation's energy future. 
Longstanding IRS policy has allowed electric and gas utilities to 
deduct from their tax liabilities the costs of their energy 
conservation programs in the year incurred. However, the Service has 
begun to pressure private utilities to spread these deductions over a 
period of several years. The Puget Sound Power & Light Co. estimates 
that this could reduce its annual conservation expenditures by up to 10 
percent. That amount is equivalent to the loss of electricity conserved 
when 4,500 homes participate in the company's residential 
weatherization program.
  I want to emphasize that this legislation is nothing more than an 
affirmation of longstanding tax policy, and a rejection of the 
Service's recent attempts to modify it. Utilities have deducted 
conservation expenditures in the current year since the beginning of 
these programs in the 1960's. As recently as 1991, the IRS acknowledged 
in a technical memorandum that conservation expenditures are, in fact, 
allowable as a current deduction.
  Investor owned utilities are the key to the success of conservation 
programs across the country. Of the 1,500 megawatts of energy savings 
the Pacific Northwest has committed to achieve in this decade, over 
half of that will come from private utilities. I am committed to 
supporting these companies in this important effort, and this 
legislation is a vital first step.


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