Press Releases :: November 5, 2009

Baldwin Seeks Incentive for Motor Efficiencies

Congresswoman Tammy Baldwin (D-WI) today introduced legislation that offers incentives for the purchase of more energy-efficient motors. The bill will create jobs and help our nation transform to a clean energy economy.

Baldwin’s bill, co-sponsored by Rep. Mike Ross (D-AR), directs the U.S. Department of Energy to establish an Energy-Efficient Motor Rebate Program for the purchase of high-efficiency electric motors, thereby making them more affordable. The purpose is to offset the cost difference between the purchase of new high-efficiency motors and the repair or replacement of older, more inefficient motors.

“The rebate program we propose will help reduce energy consumption and protect the environment, while creating manufacturing jobs,” said Congresswoman Baldwin. “This is exactly the kind of smart reform that will help us grow the economy and meet our energy needs while protecting our environment in the 21st Century,” Baldwin said.

The Department of Energy estimates that 25-30 percent of all electricity in the U.S. is used by more than 35 million electric motors in factories, mines, power generation and distribution, and commercial buildings. The National Electrical Manufacturers Association (NEMA) estimates that replacement of at least one percent of old motors each year (approximately 300,000 units) would save an estimated 1.5 billion kilowatt hours annually.

Specifically, the program would provide a rebate of $25 per horse power per customer for the purchase of a high-efficiency motor. The program would provide a subsidy through distributors, who would be responsible for documenting the sale and proper disposal of the old motor.

The rebate program also has the potential to create 3,000 to 4,500 new jobs in the U.S. workforce to build and install new motors, and remove inefficient ones.

“NEMA applauds Representative Baldwin's stalwart leadership on crafting effective policy to better our economic situation and our environment," said NEMA President and CEO Evan Gaddis. "This bill will provide an economic stimulus incentivizing the production of energy-efficiency motors while vastly reducing the demand on our electric grid.,” he added.

In the Energy Independence and Security Act of 2007 (EISA), a new efficiency standard was set beginning in December 2010, that mandates motor efficiencies beyond the minimums of the 1992 Energy Policy Act. This upgrade to premium efficient motors required by EISA will raise initial motor costs by an estimated 10-15 percent.

Premium motors cost an average of 20 percent more than lower performance motors and they typically cost two times more than repairing an older motor. Therefore, there is concern that due to initial costs, some may be inclined to simply repair and extend the life of old, inefficient motors.

The bill’s language was included in the House American Clean Energy and Security Act (H.R. 2454), which passed the House on June 26, 2009. Senator Blanche Lincoln (D-AR) also successfully added the language to the Energy Appliance Standards bill, which was approved by the Senate Energy and Natural Resources Committee in March.