EREN Network News

April 11, 2001

News and Events

• White House Budget Emphasizes Incentives, Cuts Research
• Governor Davis: California's Summer Depends on Conservation
• BPA: Conservation Key to Avoiding Massive Price Increases
• University of Waterloo Wins Clean Snowmobile Challenge
• City of Davis Acquires Solar Power Plant, Plans Upgrade

• Consumer Guide to Renewable Energy

• Summer Gasoline Prices Expected to Remain High

News and Events

White House Budget Emphasizes Incentives, Cuts Research
The Bush administration released its detailed budget proposal on Monday for fiscal year 2002, which begins October 1, 2001. In terms of renewable energy and energy efficiency, the budget proposes expanded tax credits for renewable energy but cuts funding for most renewable energy and energy efficiency research and development. The President's budget is meant to serve as a starting point for Congressional budget negotiations.

The budget proposes allowing homeowners to receive a solar energy investment tax credit that is currently applicable only to businesses. The credit would apply to solar electric and hot water systems, excluding swimming pool heaters, and would be equal to 15 percent of the cost of equipment and installation, with a maximum of $2,000 for each type of system. The budget also proposes expanding the existing production tax credit, which currently applies to wind power plants, biomass power plants supplied by dedicated energy crops, and energy from poultry waste. Due to expire at the end of this year, the credit would be extended through 2004, and would be expanded to include more biomass power facilities. Co-firing of coal with biomass would be eligible for a limited credit, also. See the "Tax Incentives" section near the end of the Energy budget on the White House Web site.

The White House budget also proposes cuts of 25.9 percent in renewable energy research, development, and deployment. In preparation for closing out research in concentrating solar power, its budget is reduced by 85.9 percent. Research funding for geothermal energy, photovoltaic systems, solar building technologies, and wind energy systems are all cut by roughly 48 percent. Last- minute budget changes held funding steady for hydrogen, hydropower, biomass and biofuels energy systems, and electric energy systems and storage.

For research, development, and deployment of energy efficiency technologies, the budget proposes an overall cut of 7.3 percent. The big winner in this arena is the weatherization assistance program, which receives a budget boost of 78.8 percent. State energy program grants and energy-efficient power technologies are held at roughly level funding, but all other energy efficiency programs are cut by 31.2 percent overall. This includes programs for energy efficiency in transportation, buildings, and industry, as well as the Federal Energy Management Program, which aims to reduce federal energy use.

The administration's detailed budget for DOE is available on the DOE Web site (PDF 761 KB).

File pages 7-8 (pages 4-5 of the document's introduction) address energy efficiency and renewable energy in general, file pages 17-20 (document pages 14-17) address renewable energy in detail, and file pages 105-108 (document pages 104-107) address energy efficiency.

Governor Davis: California's Summer Depends on Conservation
The only way for California to make it through the summer without blackouts is to cut electricity demand by 10 percent, Governor Gray Davis announced last week. In a live address, the governor reiterated the need to save energy in the state. "Conservation is our best short-term weapon against blackouts and price-gouging," said Governor Davis.

See the governor's press release.

The governor had plenty to deal with this past week, as the state's largest utility, Pacific Gas and Electric Company (PG&E), filed for Chapter 11 bankruptcy. On Monday, the governor announced an agreement to buy Southern California Edison's transmission system for $2.76 billion, thereby helping that utility avoid bankruptcy. See Governor Davis' press release.

See also the PG&E press releases.

One company responding to the Governor's request is the Macerich Company, one of the largest owners and operators of shopping malls in the United States. While taking immediate action to cut energy use by roughly 5 percent in its California malls, the company is also committed to decreasing energy use at its more than 40 malls across the country. Macerich anticipates average energy savings of 15 percent through such projects as the installation of high- efficiency air-conditioning units, thereby saving at least 30 million kilowatt-hours per year. The company is giving first priority to upgrades at its California properties. See the Macerich press release.

BPA: Conservation Key to Avoiding Massive Price Increases
With the drought continuing in the Northwest, the Bonneville Power Administration (BPA) on Monday largely echoed the warnings heard in California. While not threatening blackouts, BPA warned that tight power margins could drive wholesale electricity prices up as much as 250 percent after October 1st. BPA called for the region's retail utilities and large industrial customers to make commitments to reduce energy use within the next 60 days.

BPA also announced last week that it will not initiate the planned release of water through spillways at dams to assist juvenile salmon in their spring migration to the sea. The water saved by not spilling is sufficient to generate 1,000 megawatts — enough to serve a city the size of Seattle.

BPA is also helping its customers save energy. The power administration is working through the region's utilities to offer customers two coupons worth $6 apiece for the purchase of energy-saving compact fluorescent light bulbs. BPA estimates that it will save half a megawatt of energy for every 100,000 energy-saving bulbs put into use. See the BPA press releases.

University of Waterloo Wins Clean Snowmobile Challenge
A student team from Ontario's University of Waterloo won first prize at the Clean Snowmobile Challenge, held in late March. Sponsored by the Society of Automotive Engineers (SAE), the event challenges engineering students to design a cleaner and quieter snowmobile without significantly compromising performance. Most surprising is that the Waterloo team won with a two-stroke engine — although standard on today's machines, two-stroke engines are generally noisier and have higher emissions than the heavier four-stroke engines. Waterloo was, however, strongly challenged by a four-stroke machine from Kettering University. The Waterloo snowmobile achieved a fuel efficiency of 20 miles per gallon while reducing emissions of carbon monoxide, nitrous oxides, and hydrocarbons by 60 percent relative to a standard snowmobile. See the SAE press release.

For detailed results and photos, see the Clean Snowmobile Challenge page on the SAE Web site.

City of Davis Acquires Solar Power Plant, Plans Upgrade
After months of negotiations, the California Energy Commission (CEC) announced last week that it was transferring ownership of the 15-year-old PVUSA solar photovoltaic power plant to the City of Davis. Originally part of a research effort called Photovoltaics for Utility Scale Applications, or PVUSA, the 86-acre facility in Davis was bought by the CEC in 1996. Since September of last year, the CEC has looked to pass ownership of the aging facility to the city.

The City of Davis has big plans for the facility. The city council has approved a 20-year lease of the facility to Nuon Renewable Ventures, a Dutch company, which will run and refurbish the facility to produce 800 kilowatts of electricity. Future plans are to expand the facility to 2.5 megawatts of solar energy capacity — enough to power 2,500 average California homes. See the April 6th press release on the CEC Web site.

Site News

Consumer Guide to Renewable Energy for Your Home or Business
This new Web site on EREN shows consumers how they can buy electricity made from renewable sources in their state, evaluate the environmental benefits of clean power, and learn how clean power is generated. In addition, the site helps visitors decide if owning a renewable energy system is right for them by helping to evaluate the available technologies, teaching about connecting to the grid and sizing a system, and presenting the available incentives. A special section on powering a home or small business with a small wind system is also included. The site is provided by DOE's Office of Power Technologies.

For this and other recent additions to the EREN Web site, see http://www.eren.doe.gov/new/whats-new.html.

Energy Facts and Tips

Summer Gasoline Prices Expected to Remain High
The average spring and summer gasoline prices are expected to remain high, at about $1.49 per gallon, according to a new report by DOE's Energy Information Administration (EIA). The prices will be lower than last year's average of $1.53 per gallon, but will be the second-highest summer average prices on record. Low crude oil and gasoline stocks will contribute to price volatility, according to the report.

Natural gas prices are also expected to remain elevated through the summer, and could have an impact on electricity prices. As anticipated, the amount of natural gas in underground storage reached the lowest levels ever recorded by EIA at the end of a heating season on March 31st. The need to replenish the natural gas in storage while meeting the demand for electricity generation from natural gas will keep an upward pressure on natural gas prices. See the EIA press release.

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