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Industrials Blast Decoupling Provision in Stimulus Bill

Industrial energy consumers object to language in the economic stimulus bill that would require state governors to support decoupling of electricity and natural gas volumes from prices in order to receive energy efficiency grants.

Under decoupling, utility revenues from sales of natural gas and electricity would remain stable even if consumer demand for the commodities fall as a result of energy efficient practices. While the tactic is an incentive for utilities to push energy savings, it would be a "disincentive" for industrial energy consumers to invest in energy-efficient equipment, given that there would be no measurable change in their utility bills, said Paul N. Cicio, president of the Industrial Energy Consumers of America.

The decoupling language was added in the House Energy and Commerce Committee portion of the $816 billion stimulus package (HR 1), which cleared the House by 244-188 last Wednesday with zero support from Republicans (see related story). The decoupling provision is being "pushed" by Democrats and environmentalists, while Republicans and states oppose it, Cicio said.

The Senate is expected to take up its nearly $900 billion economic recovery package this week. The decoupling language in the Senate bill (S. 1) is "even stronger" than the provision in the House measure, he said."It's more of a mandate." The House and Senate will have to negotiate the differences in their bills before legislation can be sent to President Obama.

"Decoupling is a direct disincentive for manufacturers to implement energy efficiency projects that improve our competitiveness and reduce greenhouse gas emissions. Decoupling means if we reduce our electricity and natural gas consumption, we will not see a reduction in the costs," he wrote last Thursday in a letter to Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, and Sen. Lisa Murkowski of Alaska, the ranking Republican on the panel.

"For many manufacturers, the cost of electricity and natural gas is significant and can determine whether they are competitive in global markets. We urge you to not pass legislation that increase electricity or natural gas costs and put more jobs at risk."

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