5 Things You Need to Know About the Energy Policy Act
By Wendy Clem
Background and Inception
The Summer of 2005 marked passage by America's Congress of the Energy Policy Act of 2005 (EPAct). Presidential approval followed after contentious, ongoing debate about bill details. Supporters claimed it would fight looming energy shortages, citing tax breaks, loans, and regulations that began in January 2006 geared to better energy production. Additional state or utility rebates provide more incentives to save energy.
What Naysayers Add
The Congressional Budget Office estimates that EPAct raises spending by at least $1.6 billion and reduces revenues by $12.3 billion by 2015, with other possible associated expenses. Also, critics claim it fails numerous major needs, giving preference instead to big business. Nevertheless, the bill was approved by more than a 3-1 vote and received bipartisan support.
The Original Idea
Geared to environmentally friendly consumer purchases and business energy efficiency, EPAct encourage energy conservation through financial rewards. Major tax credits were offered applicable through 2007 for purchases of fuel-efficient gasoline-electric hybrid cars as well as household appliances, and an overall residential or business commitment to helping survival of the environment.
What EPAct Covers
Loan guarantees cover innovative technologies reducing greenhouse gases and subsidies are authorized for alternative and renewable energies like wind, wave, tidal, geothermal, and some solar power. Increasing biofuel production to encourage cleaner air aims at 7.5 billion additional gallons by 2012. Regulating a cleaner coal industry as well as addressing specific nuclear standards was added to net metering on public utilities, residential tax breaks for energy efficiency, extending daylight savings hours, and overseeing federal reliability to avoid national power grid outages.
How Drivers are Affected
National reductions of oil use not only present new driving choices, but also change the way consumers think and spend. EPAct's financial incentives mean less dependence on foreign oil, improve the national deficit, and spur industry to think outside the box. Hybrid tax credits range from $250-$3,400 for gas-electric, alternative fuel, or fuel cell cars and light trucks, rewarding those with better fuel economy and less vehicular weight, especially those bought as part of multiple purchases. Limitations exist on tax credits, however, as they expire after designated numbers of a particular vehicles are sold, depending on the automaker. The assigned number is 60,000 sales per vehicle, in a convoluted application of quarterly sales and tax credit percentages. Vehicles with biodiesel and ethanol capabilities receive yet another incentive until the end of 2008, and those converting to alternative "clean fuels" have until the end of 2010 to benefit. Fuel cell vehicles for passengers or as light trucks allow $12,000, with more available for heavier trucks. Vehicles running on natural gas, liquefied petroleum gas (LPG), natural gas, hydrogen, or E85 ethanol receive $4,000 if under 8,500 pounds. Vehicles weighing between 8,500 and 14,000 pounds are eligible for $3,000, while those between 14,000 and 26,000 pounds get $6,000, and vehicles over 26,000 pounds receive $12,000.
Wendy Clem is a Michigan-based writer/photographer providing material for newspapers, magazines, and online - - locally, regionally and nationally. Her syndicated auto column for Avanti NewsFeatures has appeared in 400 national markets, and her online how-to articles serve an international audience. Wendy holds a Bachelor of Fine Arts degree in journalism from Detroit's Wayne State University.
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