U.S. Senator Collins Introduces The POWER Act
WASHINGTON DC – U.S. Senator Susan Collins (R-Maine), along with Senator Bob Casey (D-Pennsylvania), introduced the Power Efficiency and Resiliency (POWER) Act this afternoon that would increase industrial energy efficiency and independence and help create new skilled jobs. Rep. Tom Reed (R-New York) and Rep. Blumenauer (D-Oregon) have introduced a companion bill in the U.S. House of Representatives.
At present, U.S. utilities and factories send enough wasted energy in the form of heat up their chimneys to power all of Japan each year. Maine ranks 10th in the nation in energy expenditures and 26th in energy consumption.
Industrial energy efficiency technologies, including combined heat and power (CHP) and waste heat to power (WHP), have proven successful in using this previously squandered energy to warm or cool buildings and generate additional electricity. Utilizing this formerly wasted energy has the potential to increase electrical generation efficiency by nearly 80 percent and reduce costs for industrial users. These savings could be used by U.S. companies to invest in other areas, improving their competitiveness, enhancing energy security and storm resilience, improving water conservation, and creating skilled jobs.
According to studies by the Department of Energy and the Oak Ridge National Labs, significantly increasing industrial energy efficiency can help reinvigorate our manufacturing base by creating as many as one million highly skilled jobs.
Despite their potential, however, the upfront costs of CHP and WHP systems can be expensive, and facilities seeking to lower their energy bills often lack access to the capital needed for purchasing the equipment. The limits on the size and scope of the current U.S. tax code provision hamper companies from making important investments to increase their efficiency.
At present, Maine has 32 combined heat and power sites across the state. In order to make the current incentives more accessible and spur greater investment in energy efficient technology across our country, The POWER Act would place CHP and WHP on par with other forms of renewable energy by expanding tax incentives for these systems and reducing the initial cost of deploying these projects.
“Capturing and processing this otherwise wasted energy holds tremendous untapped potential for businesses across Maine,” Senator Collins stated. “This bipartisan legislation helps make energy efficiency technologies more accessible for Maine companies, reducing energy consumption in our industrial sector, saving manufacturers money, and creating energy businesses and jobs.”
There are currently over 110 public supporters of the POWER Act, including the Maine Renewable Energy Association, the Maine Ocean & Wind Industry Initiative, Woodard & Curran, and Self-Gen Inc.
“Thanks to Senator Collins for championing the POWER Act, which will allow more companies to reduce energy use and costs by installing combined heat and power (CHP) systems. As a developer of such projects, we know that this technology poses a significant opportunity to generate new businesses, create jobs, and reduce our nation's energy consumption. CHP is still largely an untapped resource, and we could double its installed capacity over the next decade with the right policies in place.” -Dan Kelley, vice president, power engineering, Woodard & Curran, offices in Portland and Bangor, ME
“Every year, the United States sends enough wasted heat from electricity generation up our chimneys to power Japan. Combined heat and power can harness this heat as a resource to create more electricity, nearly doubling efficiency. Senator Collins' POWER Act will help us use this technology throughout Maine and across the nation, moving the United States towards increased energy independence.” -Paul Aubrey, president, Self-Gen, Inc., Scarborough, ME
Summary of the POWER Act
The POWER Act proposes to:
- Increase the ITC for CHP to 30 percent and allow WHP to qualify for the credit;
- Remove the limit on project size to ensure large industrial systems are eligible;
- Extend the credit through December 2018 to allow time for equipment purchase, installation, and permitting.
While technologies such as solar energy and fuel cells currently benefit from a 30 percent investment tax credit (ITC), the incentives for CHP are more limited. CHP systems are only eligible for a 10 percent ITC for the first 15 megawatts (MW) of projects that are smaller than 50 MW in capacity. Moreover, WHP does not currently even qualify for the ITC.
