Rep. Peter Welch's energy efficiency bill has been incorporated into major climate change legislation released Tuesday.

Welch's Retrofit for Energy and Environmental Performance (REEP) bill, H.R. 1778, was included in the American Clean Energy and Security Act of 2009, which was authored by House Committee on Energy and Commerce Chairman Henry Waxman and Subcommittee on Energy and Environment Chairman Edward Markey.

"This is a major step forward on our path toward increasing energy efficiency by 20 percent," Welch said. "I applaud Chairmen Waxman and Markey for embracing the necessity, practicality and opportunity of investing in efficiency. Not only is efficiency an effective way to cut carbon emissions, it will also create jobs and reduce energy costs for families and businesses."

Chairman Waxman said, "Rep. Welch has shown tremendous leadership in leading our country towards energy independence. His legislation, which will help states improve the efficiency of existing buildings, is an important component of our discussion draft, and I look forward to working with him as this bill moves forward."

Welch's REEP program builds on the successes Vermont has experienced with its pioneering efficiency programs. Welch unveiled the program early this month at the Burlington home of Jason Van Driesche and Susan Munkres, who cut their energy costs by $1,300 a year after retrofitting their house. Thirty other Members of Congress signed on to the REEP bill before Welch introduced it in the House last week.

Welch's bill has the support of a broad range of national advocacy groups, including the Natural Resources Defense Council, the American Council for an Energy Efficient Economy, the National Trust for Historic Preservation, US Green Buildings Council, the Alliance to Save Energy and Efficiency First.

"Vermont was ahead of its time in understanding that efficiency is the most cost-effective and practical way to reduce carbon emissions. Now Vermont is leading the nation," Welch said.

In addition to Welch's efficiency section, the American Clean Energy and Security Act (ACES) would promote renewable energy, place limits on emissions of heat-trapping pollutants and help transition consumers and businesses to a green energy economy.

Welch's REEP legislation directs the Department of Energy and the Environmental Protection Agency to develop guidelines and manage financing for the national energy efficiency program. Homeowners and businesses could qualify for direct cash incentives, interest rate subsidies and credit support based on the percentage increase in energy efficiency they achieve:

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  • Homeowners could qualify for $1,000-$3,000 in financial incentives for achieving a 10-20 percent increase in efficiency, with another $150 for every additional percentage point of energy savings achieved
  • Businesses could qualify for $0.15 per square foot for the first 20 to 30 percent increase in efficiency with an increasing incentive of up to $2.50 per square foot for energy reductions over 50 percent
  • Incentives for both homes and commercial buildings would be capped at 50 percent of the cost of the retrofit

States would receive funding for the program through the existing State Energy Program formula, which has a built-in small state minimum, and provides additional financial incentives to states with high-performing programs.