[House Report 107-162]
[From the U.S. Government Publishing Office]



107th Congress                                            Rept. 107-162
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2

======================================================================



 
            ENERGY ADVANCEMENT AND CONSERVATION ACT OF 2001

                                _______
                                

                 August 1, 2001.--Ordered to be printed

                                _______
                                

 Mr. Tauzin, from the Committee on Energy and Commerce, submitted the 
                               following

                          SUPPLEMENTAL REPORT

                        [To accompany H.R. 2587]

  This supplemental report shows the cost estimate of the 
Congressional Budget Office with respect to the bill (H.R. 
2587), as reported, which was not included in part 1 of the 
report submitted by the Committee on Energy and Commerce on 
July 25, 2001 (H. Rept. 107-162, pt. 1).
  This supplemental report is submitted in accordance with 
clause 3(a)(2) of rule XIII of the Rules of the House of 
Representatives.

                                CONTENTS

                                                                   Page
Committee Cost Estimate..........................................     1
Congressional Budget Office Estimate.............................     1
Federal Mandates Statement.......................................    12
Exchange of Committee Correspondence.............................    12

                        committee cost estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  congressional budget office estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

H.R. 2587--Energy Advancement and Conservation Act of 2001

    Summary: H.R. 2587 would authorize funding for several 
programs aimed at energy production, conservation, and research 
and development. It also would authorize new tax credits for 
certain electric power plant operators, and would result in 
additional direct spending for assistance to rural electric 
cooperatives, work at uranium enrichment facilities, and new 
authority under energy savings performance contracts. CBO 
estimates that enacting H.R. 2587 would increase direct 
spending by $3.5 billion over the 2002-2011 period. The Joint 
Committee on Taxation (JCT) estimates that enacting the bill 
would reduce revenues by $31.1 billion over the 2002-2011 
period. Because the bill would affect direct spending and 
receipts, pay-as-you-go procedures would apply. CBO also 
estimates that implementing H.R. 2587 would cost $15.8 billion 
over the 2002-2006 period, assuming appropriation of the 
necessary amounts.
    The bill would require that the receipts and disbursements 
of the Nuclear Waste Fund not be counted as new budget 
authority, outlays, or receipts in the President's budget 
request, the Congressional budget, or for purposes of estimates 
made under the Balanced Budget and Emergency Deficit Control 
Act. By moving the receipts and expenditures of the Nuclear 
Waste Fund off-budget, the bill would not directly change the 
federal budgetary impact of the program, but that treatment 
could result in increased spending on the nuclear waste program 
by exempting such spending from budgetary controls. Under the 
bill, future spending for this program would remain subject to 
appropriation.
    H.R. 2587 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA). State, local and 
tribal governments would benefit from enactment of this 
legislation and any costs they incur would result from 
complying with conditions of aid.
    H.R. 2587 would impose private-sector mandates as defined 
by the Unfunded Mandates Reform Act by requiring certain 
manufacturers and importers to comply with new energyefficiency 
standards. Because those new requirements would depend on specific 
standards that would be established by the Secretary of Energy, CBO 
cannot determine whether the direct cost to the private sector would 
exceed the annual threshold established in UMRA ($13 million in 2001, 
adjusted annually for inflation) in any of the first five years that 
the mandates are in effect.
    Major provisions: Title I would authorize funds to be 
appropriated for several energy conservation programs, 
including the low-income home energy assistance program 
(LIHEAP), and weatherization and state energy grants program. 
It also would require federal agencies to meet certain energy 
efficiency standards and would expand the federal government's 
use of energy savings performance contracts (ESPCs). Further, 
the title would establish new energy efficiency standards for 
small household appliances and encourage the use of energy 
efficient vehicles.
    Title II would require the Department of Transportation to 
amend its regulations on mileage standards to reduce the amount 
of gasoline used in motor vehicles. It also would extend the 
requirement for the Environmental Protection Agency (EPA) to 
calculate the fuel economy of motor vehicles through 2008. In 
addition, it would require fleets of vehicles operated by 
federal agencies to meet certain fuel efficiency standards.
    Title III would change the budgetary status of the Nuclear 
Waste Fund, moving it from the on-budget category to the off-
budget category. It also would authorize the Nuclear Regulatory 
Commission to charge federal agencies for licensing and 
certificate fees. In addition, title III would authorize the 
Department of Energy (DOE) to spend an estimated $595 million 
over the 2002-2006 period, without further appropriation, for 
activities related to uranium enrichment facilities and 
enrichment technology. The bill also would repeal a requirement 
in current law for DOE to sell certain quantities of uranium by 
2003 and would prohibit DOE from selling this material before 
2009.
    Title V would establish four new tax credits for firms that 
use certain clean coal technologies to generate electricity. 
This title also would allow the Tennessee Valley Authority 
(TVA) and rural electric cooperatives to use amounts equivalent 
to these credits, to reduce other payments owed to the 
Treasury. If the credit-equivalent amounts exceed the amounts 
payable to the Treasury in a given year, TVA could apply the 
balance to offset payments due in future years.
    Title VI would authorize appropriations from the Leaking 
Underground Storage Trust Fund (LUST) for clean-up activities 
associated with methyl tertiary butyl ether (MTBE) 
contamination.
    Title VII would reauthorize the Renewable Energy Production 
Incentive program for an additional 10 years, and make Indian 
tribes eligible for payments under the program. Title VIII 
would require several agencies to act to improve pipeline 
safety. Last, title IX would require studies on the energy 
dependence of the United States, and on aircraft emissions.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2587 is shown in the following table. 
The costs of this legislation fall within budget function 270 
(energy), 300 (natural resources and environment, 400 
(transportation), 600 (income security), and 800 (general 
government).

----------------------------------------------------------------------------------------------------------------
                                                              By fiscal year, in millions of dollars--
                                                   -------------------------------------------------------------
                                                      2001     2002      2003       2004       2005       2006
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Estimated budget authority........................        0    1,270        219        206        289        237
Estimated outlays.................................        0    1,043        246        194        264        275

                                               CHANGES IN REVENUES

Title V tax credits: Estimated revenues \1\.......        0     -222     -1,396     -3,079     -3,838     -4,076

                                        SPENDING SUBJECT TO APPROPRIATION

Spending under current law:
    Estimated authorization level \2\.............    3,040    2,650      2,650      2,650          0          0
    Estimated outlays.............................    3,166    3,008      2,636      2,501        731         76
Proposed changes:
    Specified authorization level.................        0    2,892      3,046      3,171      5,901      1,276
    Estimated outlays.............................        0    1,419      2,555      2,938      4,817      2,666
    Estimated authorization level.................        0      453        413        424        127        129
    Estimated outlays.............................        0      165        349        403        358        173
Spending under H.R. 2587:
    Estimated authorization level.................    3,040    5,995      6,109      6,245      6,028      1,405
    Estimated outlays.............................    3,166    4,592      5,540      5,842      5,906      2,915
----------------------------------------------------------------------------------------------------------------
\1\ Estimate provided by JCT.
\2\ The 2001 level is the amount appropriated for that year affected energy programs. The amounts authorized
  under current law over the 2002-2004 period are for LIHEAP.

Basis of estimate

    For the purposes of this estimate, CBO assumes that H.R. 
2587 will be enacted near the beginning of fiscal year 2002. 
Significant components of the estimated costs are described 
below.
            Direct spending
    H.R. 2587 has several provisions that would affect direct 
spending. CBO estimates that enacting these provisions would 
result in an increase in direct spending of $2 billion over the 
2002-2006 period, and an increase of $3.5 billion over the 
2002-2011 period.
    Nuclear Energy.--Subtitle B of title III would allow DOE to 
spend funds without further appropriation on activities related 
to uranium enrichment technology and would repeal existing 
requirements to sell certain uranium products. CBO estimates 
that these provisions would increase direct spending by a total 
of $696 million over the 2002-2011 period. This estimate 
reflects the amount specified in the bill for each of the 
fiscal years 2002 through 2006 for developing advanced 
centrifuge technologies (a total of $254 million over the five 
years) and for putting the gaseous diffusion plant in 
Portsmouth, Ohio, in cold-standby status (a total of $169 
million over that period). For this estimate, CBO assumes that 
the additional $169 million specified for activities at the 
gaseous diffusion plant in Paducah, Kentucky, would be 
available in 2002 and would be spent over several years. The 
bill also would provide direct spending authority for studies 
related to these projects, which CBO estimates would cost about 
$3 million. Finally, we estimate that provisions repealing the 
existing requirement to sell uranium products would reduce 
offsetting receipts by $101 million in 2003.
    Expanded Use of Energy Savings Performance Contracts.--
Currently, federal agencies can enter into a specific type of 
long-term contract, called an ESPC, for the purchase of energy 
efficiency equipment, such as new windows and lighting. The use 
of such equipment can reduce the cost of a facility's energy 
use. When using an ESPC, the savings from reduced energy bills 
are used to pay for the purchase of the new equipment over 
several years. Currently, agencies can use ESPCs to purchase 
new equipment over a 25-year period, without an appropriation 
for the full amount of the purchase price. H.R. 2587 would 
expand the use of such contracts to cover the purchase of a new 
building, if the cost of the new building is less than the 
present value of estimated savings from lower costs of 
operations, maintenance, and energy consumption.
    A November 2000 report from the General Services 
Administration's Office of the Inspector General estimates that 
it would take several billion dollars to bring the federal 
building inventory up to appropriate operations, maintenance, 
and energy efficiency standards. Thus, we assume that the 
opportunity for cost savings that could be generated from 
reduced operations, maintenance, and energy expenses at new 
buildings would be significant. We expect that the new 
authority provided by the bill would be used only in a few 
cases in the first few years, but that as buildings continue to 
deteriorate and requirements for energy efficiency continue to 
increase, the authority would be used at an increasing rate.
    DOE has plans to use the new authority under this provision 
to build a new facility in New Mexico, at an estimated cost of 
$35 million. While the precise number of new facilities planned 
for construction that could qualify for funding under the 
authority that would be provided by the bill cannot be 
determined at this time, CBO estimates that this new authority 
would be used at least 15 times over the next five years at an 
estimated cost of about $400 million over the 2002-2006 period. 
We expect that the use of this funding mechanism would grow 
after 2006 and that total spending over the 2002-2011 period 
would be $1.6 billion.
    Use of Tax Credits by TVA and Rural Electric 
Cooperatives.--Title V would establish four tax credits for 
electric power facilities that use certain clean coal 
technologies (see revenues section below). This bill would 
allow power generators that are exempt from federal taxation to 
receive similar financial benefits through various mechanisms. 
These special rules would apply to two federally financed power 
producers--rural electric cooperatives and TVA.
    Rural electric cooperatives would have two options under 
this bill. They could assign, sell, or transfer the tax credit 
to a taxable entity or they could use the credit to prepay 
loans made by the Federal government without paying the 
prepayment penalties required under current law. For this 
estimate, CBO assumes that most cooperatives would elect to use 
the credit-equivalent amounts to prepay outstanding federal 
loans.
    The budgetary impact of the provisions regarding loans to 
rural electric cooperatives are governed by the Federal Credit 
Reform Act. Under that act, the subsidy cost of loans or loan 
guarantees is measured over the life of the loan on a present 
value basis. Legislation that changes the terms or conditions 
for payments is considered a loan modification; any cost or 
savings resulting from such modifications are measured on a 
present value basis and recorded in the year in which the 
legislation making the change is enacted. Title V would modify 
the terms of outstanding loans to the cooperatives by allowing 
them to use a noncash transaction to prepay loans and to prepay 
such loans without paying the penalties that would be due under 
current law.
    Based on information from industry analysts, CBO expects 
that rural cooperatives that own coal-fired power plants will 
make significant investments in pollution control technologies 
and advanced clean coal technologies in the next 10 years, 
making them eligible for credits equivalent to the investment 
and production tax credits that would be available for 
taxableentities. Assuming these investments generally follow industry 
trends, CBO estimates that this provision would cost about $1 billion 
on a present value basis. CBO expects that this would be recorded in 
2002, when the credits would first become available.
    Title V also would allow TVA to reduce its payments to the 
Treasury for past appropriations by amounts equivalent to the 
tax credits. If the credit-equivalent amounts exceed the 
amounts payable to the Treasury in a given year, TVA could 
apply the balance to offset payments due in future years. Based 
on published reports, CBO expects that TVA also will make 
significant investments in pollution control and clean coal 
technologies over the next 10 years and would be eligible for 
the payment offsets provided by this bill. For this estimate, 
CBO assumes that TVA would pass such savings on to its 
customers by lowering the price it charges for electricity. We 
estimate that this price adjustment would reduce TVA's power 
revenues by an average of $35 million a year beginning in 2007, 
which is the year we expect the agency to revise its rates. 
Hence, CBO estimates that this provision would cost a total of 
about $175 million over the 2007-2011 period.
            Revenues
    H.R. 2587 would create four new tax credits as incentives 
for emissions reduction and efficiency improvements in existing 
coal-based electricity generation facilities, as well as 
credits for new or advanced technologies used in coal-based 
electricity generation. The Joint Committee on Taxation 
estimates that these provisions would reduce revenues by $222 
million in 2002, by $12.6 billion over the 2002-2006 period, 
and by $31.1 billion over the 2002-2011 period.
            Spending subject to appropriation
    H.R. 2587 contains several provisions that specify amounts 
authorized to be appropriated for energy conservation programs, 
LIHEAP, and weatherization and state energy grants. In 
addition, the bill would authorize unspecified amounts to be 
appropriated to achieve energy efficiency in publicly owned 
buildings and provide incentives for the use of renewable 
energy. Assuming the appropriation of the necessary amounts, 
CBO estimates that it would cost $15.8 billion over the 2002-
2006 period to implement these provisions. Estimates of outlays 
are based on historical spending patterns for ongoing and 
similar activities.
            Provisions with specified authorizations
    CBO estimates that implementing programs with specified 
authorizations in the bill would cost about $14.4 billion over 
the 2002-2006 period. That estimate assumes that all amounts 
authorized to be appropriated for those programs--about $16.3 
billion over the next five years--would be provided each year.
    The largest program authorized in the legislation would 
raise the current law authorization for the Low-Income Home 
Energy Assistance Program and extend the program through fiscal 
year 2005. Assuming appropriation of the authorized amounts, 
CBO estimates that implementing this provision would cost about 
$1 billion in 2002, and $7.8 billion over the 2002-2006 period.
    Under current law, a total of $2.65 billion is authorized 
to be appropriated for each of fiscal years 2002 through 2004. 
These funds include $2 billion for the basic formula grant for 
states to provide energy assistance for low-income households, 
$50 million for grants to states to develop nonfederal energy 
resources and for Residential Energy Assistance Challenge 
(REACH) grants, and $600 million for additional energy 
assistance for emergency needs. The emergency funds are made 
available only after a formal request by the President that 
includes a designation of the amount requested as an emergency 
requirement as defined in the Balanced Budget and Emergency 
Deficit Control Act. The bill would authorize $3.4 billion in 
basic grants for each of fiscal years 2002 through 2005, and 
extend the authorization of $600 million for emergency funds 
through 2005. It would make no changes to the authorization for 
incentive and REACH grants.
    For this estimate, CBO assumes that the full authorized 
level would be appropriated, and that spending would follow the 
historical rates. Other amounts specifically authorized to be 
appropriated over the 2002-2006 period by the bill include:
          $5.25 billion for energy-efficiency and conservation 
        programs administered by DOE;
          $1.475 billion for the Weatherization Assistance 
        Program to help low-income households enhance energy 
        efficiency;
          $500 million to encourage the use of new coal 
        technology in the electricity, chemical, and 
        transportation industries;
          $400 million over the 2002-2006 period for grants to 
        states to promote energy-efficient technologies through 
        the State Energy Program;
          $200 million from the Leaking Underground Storage 
        Trust Fund for cleanup activities associated with MTBE 
        contamination;
          $90 million for a new program to research, develop, 
        and demonstrate technology that would increase the fuel 
        efficiency of trains;
          $80 million for DOE to encourage the production and 
        marketing of energy-efficient and renewable energy 
        products and services;
          $30 million for research and development programs 
        related to uranium technology;
          $18 million for DOE to establish a new program for 
        developing, testing, and demonstrating advanced 
        building technologies;
          $10 million for public education on realizing energy 
        savings through regular maintenance of air conditioning 
        and ventilation systems; and
          $33 million for DOE, EPA, and certain other federal 
        agencies to complete various studies, reports, and 
        activities that would be required under the bill.
            Provisions with estimated authorizations
    H.R. 2587 would reauthorize the Energy Conservation Program 
for Schools and Hospitals, and the Renewable Energy Production 
Incentive Program (REPI). It also would establish new programs 
to promote energy conservation, and require several studies and 
reports. Based on information from DOE, EPA, and other affected 
agencies, in addition to industry sources, CBO estimates that 
H.R. 2587 would authorize the appropriation of $1.45 billion 
over the 2002-2006 period.
    Energy Conservation at Federal Agencies.--H.R 2587 would 
establish several energy conservation goals and requirements 
for the federal government. Some of these goals, such as 
reducing energy use by certain percentages relative to 1985 
use, are being done under current executive orders. Others, 
such as the requirement to meter electricity use and to use 
this information to reduce energy consumption, are not. Based 
on information from DOE and the Alliance to Save Energy, we 
expect that it would only be economical to require federal 
buildings at least 50,000 square feet or larger to install and 
manage metering systems. Based on information from DOE, we 
assume that about 80 percent of the more than 400,000 buildings 
in federal inventory would be economical to meter.
    While metering can be done in several ways and using 
several technologies, we assume that generally, an agency would 
not spend more than 7 percent of its annual electricity bill to 
establish a metering system. Based on information from DOE on 
federal electricity bills, CBO estimates that the requirement 
to install metering in federal buildings by the start of fiscal 
year 2005 would cost about $250 million over the 2002-2004 
period. Based on experience in the private sector, in many 
cases, metering can lead to reduced energy consumption and 
reduce costs enough to recoup the investment cost of metering 
within two to four years. It is possible that this requirement 
could lead to a future reduction in appropriations for federal 
building energy use, but any such savings would depend on how 
metering information is used by federal agencies.
    Federal Energy Bank.--Section 125 of the bill would 
establish a Federal Energy Bank that would provide funding to 
federal agencies for energy efficiency projects. Under the 
bill, 5 percent of total federal utility payments would be 
authorized to be appropriated for energy efficiency projects in 
years 2002, 2003, and 2004. Based on information from DOE, we 
estimate that eligible utility costs total about $4 billion in 
recent years. We estimate that implementing this provision 
would cost about $650 million over the 2002-2006 period. 
Assuming these funds are invested in cost effective projects, 
the net cost of this provision could be significantly lower 
because greater energy efficiency could reduce future spending 
on federal energy consumption, but CBO cannot estimate the 
potential savings at this time.
    Grants for High-Performance Public Buildings.--The bill 
would authorize the appropriation of such sums as may be 
necessary for each of fiscal years 2002 through 2010 for grants 
to states for the construction and renovation of energy-
efficient, environmentally friendly public buildings. Based on 
information from DOE, CBO estimates that the program would cost 
$170 million over the 2002-2006 period. This amount would allow 
DOE to provide grants to all 50 states over the next five 
years.
    Energy Star Program.--The bill would authorize such sums as 
may be necessary to carry out the Energy Star program at DOE 
and EPA over the 2002-2006 period. This program evaluates and 
certifies various consumer products as energy efficient, and 
promotes the use of such products through the use of the Energy 
Star label. The bill would require DOE and EPA to study several 
additional products to determine if the label would apply. 
Based on information from these agencies, CBO estimates that it 
would cost $30 million over the 2002-2006 period to study 
several new products, and to support the marketing and 
partnerships required under the program.
    Energy Conservation for Schools and Hospitals.--H.R. 2587 
would reauthorize DOE's Energy Conservation for Schools and 
Hospitals program through 2010 and authorize the appropriation 
of such sums as may be necessary through that time. The program 
provides grants for public schools and hospitals to enhance 
energy efficiency. In the past it has been funded at amounts 
ranging from $20 million a year to $100 million a year. Based 
on information from DOE, CBO estimates that implementing this 
provision would cost $127 million over the 2002-2006 period.
    Renewable Energy Production Incentive.--The REPI program 
currently provides cash payments to public utilities that 
generate energy using renewable sources. The payment is based 
on the annual kilowatt-hours of electricity generated using 
qualified renewable energy sources. Section 702 of the bill 
would reauthorize the REPI program for an additional 10 years, 
and make Indian tribes eligible for the program. Annual 
appropriations have not kept up with applications for payment 
from eligible utilities. Specifically, eligible utilities have 
generated electricity from renewable resources since 1994 in an 
amount that qualifies for almost $60 million in payments from 
the REPI program. However, only about $25 million has been 
appropriated thus far. Based on information from DOE, CBO 
estimates that fully funding this program would cost $168 
million over the 2002-2006 period.
    Inspector General Energy Audits.--Current law encourages 
certain Inspectors General to perform audits of the use of 
ESPCs and other energy-efficiency programs by federal agencies. 
H.R. 2587 would require that the 28 Inspectors General do such 
audits periodically. Based on information from the DOE Office 
of the Inspector General we assume that such audits would occur 
every three years, beginning in 2002. We estimate that these 
audits would be more expensive the first year that they occur, 
and that future audits would be less time-consuming and labor-
intensive to conduct. CBO estimates that audits would cost $11 
million over the 2002-2006 period.
    Nuclear Regulatory Fees from Government Agencies.--Under 
current law, there are about 400 licenses provided by the 
Nuclear Regulatory Commission (NRC) to federal agencies for the 
use of nuclear material. H.R. 2587 would allow NRC to charge 
government agencies fees for the cost of providing such 
licensing. Currently, the NRC charges private licensees fees 
for the costs of issuing licenses to other government agencies. 
Based on information from NRC, CBO estimates that such fees 
would total about $20 million over the 2002-2006 period. 
Because those fees would come from appropriated funds instead 
of from the private sector, the government would incur a net 
cost relative to current law.
    Other Provisions.--Finally, H.R. 2587 includes several 
provisions that would authorize several new studies, reports, 
and activities. Those provisions would require certain federal 
agencies to:
          Undertake a review to determine practical ways to 
        reduce energy and water consumption and implement such 
        methods;
          Review the use of ESPCs and determine methods to 
        allow agencies to more easily use them;
          Perform a study on the manner in which providing 
        money through LIHEAP reduces energy conservation and 
        energy efficiency;
          Review regulations to eliminate barriers to emerging 
        energy technology;
          Study the use of gas flares at petrochemical 
        facilities to reduce electricity costs;
          Study the energy conservation implications of 
        telecommuting;
          Review the use of credits for air pollution 
        emissions;
          Review the mobile source air emissions models used 
        under the Clean Air Act;
          Study the benefits and feasibility of oil by-pass 
        filtration technology; and
          Report on the energy dependence of the United States.
    Based on information from the agencies that would be 
responsible for implementing these provisions, CBO estimates 
that they would cost $17 million over the 2002-2006 period.
            Change in budget status
    Section 301, by itself, moving the Nuclear Waste Fund off-
budget would not change total spending of the federal 
government. Under scorekeeping rule 13 in the conference report 
on the Balanced Budget Act this provision would not be scored 
as affecting spending or receipts for congressional 
scorekeeping purposes.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in outlays and governmental receipts that are subject 
to pay-as-you-go procedures are shown in the following table. 
For the purposes of enforcing pay-as-you-go procedures, only 
the effects in the current year, the budget year, and the 
succeeding four years are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            By fiscal year, in millions of dollars--
                                      ------------------------------------------------------------------------------------------------------------------
                                        2001    2002      2003       2004       2005       2006       2007       2008       2009       2010       2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays...................      0    1,043        246        194        264        275        278        286        301        343        256
Changes in receipts..................      0     -222     -1,396     -3,079     -3,838     -4,076     -3,957     -3,751     -3,631     -3,572     -3,575
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on State, local, and tribal governments: 
H.R. 2587 contains no intergovernmental mandates as defined in 
UMRA. The bill would benefit state, local, and tribal 
governments by authorizing more than $5 billion over the 2002-
2006 period for energy conservation plans, weatherization 
programs and the LIHEAP program. These authorizations represent 
a significant increase (over 50 percent) in funding for these 
programs. In addition, the bill authorizes such sums as may be 
necessary to establish a pilot program, targeting units of 
local government, which encourages the development of high-
performance public buildings. Any costs incurred by state, 
local, or tribal governments as a result of this legislation 
would result from complying with conditions of aid.
    Estimated impact on the private sector: H.R. 2587 would 
impose several private-sector mandates as defined by the 
Unfunded Mandates Reform Act. By requiring that their products 
meet certain energy efficiency standards, the bill would impose 
mandates on manufacturers of cold-drink vending machines, and 
manufacturers and importers of certain household appliances. 
Because the new requirements on manufacturers would depend on 
specific standards that would be established by the Secretary 
of Energy, CBO cannot determine whether the direct cost to the 
private sector would exceed the annual threshold established in 
UMRA ($113 million in 2001, adjusted annually for inflation).
    H.R. 2587 would require that household appliances 
manufactured, or imported for sale, in the United States 
consume less than one watt of electricity when in standby mode. 
The bill would direct DOE to establish such an efficiency 
standard to take effect two years after enactment. According to 
industry sources and DOE, up to nine thousand types of 
household appliances could be affected by this provision and 
further, many such products would require significant 
modification in order to meet a one-watt standard. The bill 
would however, allow the Secretary of Energy to exempt products 
from the requirement under certain circumstances related to 
technical infeasibility, compatibility with existing energy 
conservation standards, and expected cost savings to consumers. 
DOE could not, however, indicate which products would qualify 
for an exemption. Accordingly, CBO cannot determine the 
products that would be affected, and hence, cannot estimate the 
cost to the industry of meeting such a requirement. If DOE 
determines that only a small portion of products are exempt, 
the costs to industry of compliance with such a standard could 
be well over the threshold established in UMRA.
    H.R. 2587 also would require that the affected 
manufacturers of vending machines meet energy consumption 
testing, labeling, and conservation requirements to be 
prescribed by the Secretary of Energy. Currently, there are no 
standards for cold-drink vending machines. According to the 
Department of Energy, the testing and labeling requirements 
would be based upon current practice and would not be costly 
for the industry to implement. Further, industry sources 
indicate that manufacturers are already engaged in energy 
conservation efforts which are likely to render the machines 
compliant with the standards at the time they are issued. 
Consequently, CBO expects that the cost of compliance with the 
new requirements would be minimal.
    The bill would direct the Department of Transportation 
(DOT) to increase the fuel-economy standard for light trucks in 
order to save an aggregate of at least 5 billion gallons of 
gasoline in model years 2004 through 2010 relative to the 
standard in place for model year 2002. Light trucks include 
sport utility vehicles, minivans, and pickup trucks with a 
gross vehicle weight rating of less than 8,500 pounds. Current 
statute requires DOT through the National Highway Traffic 
Safety Administration (NHTSA) to prescribe by regulation, at 
least 18 months before the beginning of each model year, ``the 
maximum feasible average fuel economy level'' that DOT decides 
manufacturers can achieve in the next model year. Such 
adjustments have been prohibited by appropriations acts through 
fiscal year 2001, and the fuel economy standard for light 
trucks has remained constant at the model year 1996 level of 
20.7 miles per gallon. Currently, there is no prohibition on 
DOT action after fiscal year 2001. Based on information from 
DOT, CBO expects that NHTSA would issue standards resulting in 
fuel savings that would exceed those required by this bill. 
Thus, the fuel savings requirements in H.R. 2587 would not 
constitute a mandate as defined by UMRA.
    Estimate prepared by: Federal costs: Lisa Cash Driskill 
(energy conservation programs, Nuclear Waste Fund, NRC, clean 
coal, renewable energy); Rachel Milberg (energy efficient 
vehicles, automobile fuel economy, and pipelines); Susanne 
Mehlman (LUST); Kathleen Gramp (domestic uranium and TVA); Mark 
Hadley and Melissa Zimmerman (Rural Utilities Service)--(all at 
226-2860); Valerie A. Baxter (LIHEAP); and Erin Whitaker 
(revenues). Impact on State, local, and tribal governments: 
Elyse Goldman. Impact on the private sector: Lauren Marks.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis; G. Thomas Woodward, Assistant 
Director for Tax Analysis Division.

                       federal mandates statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                  Exchange of Committee Correspondence

                          House of Representatives,
                          Committee on Energy and Commerce,
                                     Washington, DC, July 25, 2001.
Hon. James V. Hansen,
Chairman, Committee on Resources, House of Representatives, Longworth 
        House Office Building, Washington, DC.
    Dear Chairman Hansen: Thank you for your letter regarding 
H.R. 2587, the Energy Advancement and Conservation Act of 2001.
    I appreciate your willingness not to seek a referral of 
H.R. 2587. I agree that your decision to forgo action on the 
bill will not prejudice the Committee on Resources with respect 
to its jurisdictional prerogatives on this or similar 
legislation. Further, I recognize your right to request 
conferees on those provisions within the Committee on 
Resource's jurisdiction should they be the subject of a House-
Senate conference.
    I will include your letter and this response in the 
Committee's report on H.R. 2587, and I look forward to working 
with you as we bring comprehensive energy legislation to the 
Floor.
            Sincerely,
                                     W.J. ``Billy'' Tauzin,
                                                          Chairman.
                                ------                                

                          House of Representatives,
                                    Committee on Resources,
                                     Washington, DC, July 20, 2001.
Hon. W.J. ``Billy'' Tauzin,
Chairman, Committee on Energy and Commerce,
Rayburn House Office Building, Washington, DC.
    Dear Mr. Chairman: Thank you for sharing a copy of the 
recently adopted Committee on Energy and Commerce Committee 
print which encompasses your Committee's contribution to the 
President's national energy plan.
    There are several provisions in this bill which affect 
matters within the Committee on Resources jurisdiction, 
including the National Historic Preservation Act, fish and 
waivers of several laws implicated in the construction of a 
natural gas pipeline in the State of Alaska.
    I support these provisions and thank you for addressing 
them in your bill. In the interest of assisting our Leadership 
in moving a energy legislative package before the August 
district work period begins, I will not insist on a referral of 
the bill to the Committee on Resources. I ask that you include 
this letter in any report you may file on the bill or in the 
Congressional Record during debate on its provisions if no 
report is filed.
    Thank you again for your efforts in helping guide America 
to a more secure energy future.
            Sincerely,
                                           James V. Hansen,
                                                          Chairman.
                                ------                                

                          House of Representatives,
                          Committee on Energy and Commerce,
                                     Washington, DC, July 25, 2001.
Hon. Sherwood L. Boehlert,
Chairman, Committee on Science, House of Representatives, Rayburn House 
        Office Building, Washington, DC.
    Dear Chairman Boehlert: Thank you for your letter regarding 
H.R. 2587, the Energy Advancement and Conservation Act of 2001.
    I appreciate your willingness not to exercise your referral 
of H.R. 2587. I agree that your decision to forgo action on the 
bill will not prejudice the Committee on Science with respect 
to its jurisdictional prerogatives on this or similar 
legislation. Further, I recognize your right to request 
conferees on those provisions within the Committee on Science's 
jurisdiction should they be the subject of a House-Senate 
conference.
    I will include your letter and this response in the 
Committee's report on H.R. 2587, and I look forward to working 
with you as we bring comprehensive energy legislation to the 
Floor.
            Sincerely,
                                     W.J. ``Billy'' Tauzin,
                                                          Chairman.
                                ------                                

                          House of Representatives,
                                      Committee on Science,
                                     Washington, DC, July 25, 2001.
Hon. W.J. ``Billy'' Tauzin,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Chairman Tauzin: On July 23, 2001, you introduced H.R. 
2587, the ``Energy Advancement and Conservation Act of 2001.'' 
The bill was referred to the Committee on Energy and Commerce, 
and in addition to the Committee on Science (among others). The 
bill contains provisions that fall within the jurisdiction of 
the Committee on Science.
    In deference to your desire to bring this legislation 
before the House in an expeditious manner as part of H.R. 4, 
the ``Securing America's Future Energy Act of 2001,'' I will 
not exercise this Committee's right to consider H.R. 2587. 
Despite waiving its consideration of H.R. 2587, the Science 
Committee does not waive its jurisdiction over H.R. 2587. 
Additionally, the Science Committee expressly reserves its 
authority to seek conferees on any provisions that are within 
its jurisdiction during any House-Senate conference that may be 
convened on this legislation or like provisions in H.R. 4 or 
similar legislation which falls within the Science Committee's 
jurisdiction. I ask for your commitment to support any request 
by the Science Committee for conferees on H.R. 2587 as well as 
any similar or related legislation.
    I request that you include this letter as part of the 
Record during consideration of the legislation on the House 
floor.
    Thank you for your consideration and attention regarding 
these matters.
            Sincerely,
                                      Sherwood L. Boehlert,
                                                          Chairman.

                                  
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