2005 09 21 EPAct Of 2005

Virginia Industrial Energy User GroupAnnual Meeting

The Energy Policy Act of 2005

Ed Kee

September 21, 2005

© PA Knowledge Limited 2005. All rights reserved. - VIEUG 21 September 2005 - 2

What’s NOT in the Energy Policy Act

Energy Policy Act of 2005

Renewable Portfolio Standards calling for 10% of electricity to be generated from renewable (wind, solar, etc.) sources by 2020

Increase in vehicle fuel efficiency standards

Expansion of drilling to Alaska wildlife preserve and federal offshore waters

Ban or control of new gas-fired generation facilities

Specific targets for new coal or nuclear generation facilities

Requirement for utilities to put transmission assets under control of an independent transmission provider such as a RTO or ISO

Endorsement of the Kyoto Protocol

Overview . . .


Promote energy

conservation and

efficiency Increase production of domestic oil

and gas

Increase production of

renewable energy

suppliesDiversify power

generation fuel mix away from

natural gas

Increase reliability & capacity of

electric & gas transmission

systems

US committed to reduce

greenhouse gas emissions


Key Areas

A negotiated compromise; with four years of on-again, off-again effort in the US Congress.

The aim is to increase US energy security and reduce energy costs.

Overview . . .


Increase production of domestic oil

and gas


renewable energy

suppliesDiversify power generation fuel mix away from

natural gas



systems




ElectricityEnergy Conservation & Efficiency:

Establishes tax credits & funding for investment in clean coal power

Production tax credits and other incentives for new nuclear power plants

Reduces T&D depreciation period

New procedures for siting transmission lines (federal preemption authority)

Reduces tax penalty for transfer of transmission assets to an independent transmission company

Mandatory enforcement of reliability standards under FERC jurisdiction

Extends production tax credit eligibility to 12/07 for investment in renewable electricity generation

Provides for $800 million of tax-credit bonds for renewable energy investment by tax-exempt public power systems

Establishes soft goal of 10 GW of installed non-hydro renewable generating capacity by 2015

Mandates use of 7.5 billion gallons/year of ethanol as gasoline additive by 2012

Relaxes federal hydro licensing standards and provides tax incentives for hydro efficiency and dam conversion investments

Reliability & Capacity:

Energy efficiency standards for consumer appliances and federal buildings

Provides tax credits for residential and business investment in energy-efficient technologies

Renewables:

Generation Fuel Mix:

Promote energy

conservation and efficiency

Repeal of PUHCA

Reform of PURPA – no purchase obligation in established electricity markets

Other:

Implications . . .


Promote energy



and gas


renewable energy


natural gas



systems




Natural Gas

Reduces federal tax and royalty burden on Oil & Gas exploration and production, gas gathering and distribution, oil refining, prepayment for long-term gas purchases

Directs Department of Interior to conduct inventory of O&G resources within federal land and waters

Deep well production incentives

Production of Oil & Gas:

FERC jurisdiction over siting of LNG terminals

Enhances FERC jurisdiction over gas pipeline construction

Enhances FERC jurisdiction over gas storage

Supply and Reliability:

Implications . . .


Promote energy



and gas


renewable energy


natural gas



systems




Industrial Users

Energy Conservation & Efficiency:Provides tax credits for residential and business investment in energy-efficient technologies:

– $2.1 billion in tax incentives for efficiency and conservation efforts

– Commercial buildings: tax deduction of up to $1.80 per-square-foot for buildings designed to use 50% less energy than required by the 2001 ASHRAE 90.1 model commercial code.

DOE is authorized to enter into voluntary agreements with industrial companies to reduce their energy intensity by at least 2.5% each year for 10 years…and to publicize their achievements

Implications . . .

Source: Alliance to Save Energy


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