Business

Published: 14 Jun 2009 17:26:50 PST

* Incentives aligned for investments in energy efficiency

* Efficiency the less-glamorous cousin to renewable energy

* 10 pct energy use cut could save US industry $6.6 bln/yr

CHICAGO, June 12 – The climate is ripe for U.S.
industries to cut energy consumption, with billions of dollars
of government incentives and mandates that could jump-start
efforts to revamp energy-wasting factories.

The $787 billion federal stimulus bill contains some $60
billion of grants and incentives aimed at cutting energy use.
In addition, 19 U.S. states have adopted mandates that
essentially compel electrical utilities to find and finance
energy savings for their customers.

The mandates aim to lower peak electricity loads so
utilities will not have to build expensive new power plants.
Companies also can earn carbon credits to sell later under the
anticipated federal cap-and-trade system. Congress is expected
to set an emissions baseline that precedes enactment of the
law, allowing companies to earn credits now.

But energy experts and consultants said some executives at
industries, which account for a third of U.S. energy demand,
may hold off on energy savings until the economy improves.

For now, companies may hoard cash while plants run below
capacity, analysts said.

“When cash is king and times are tight the returns have to
be there,” said John Rowe, chairman and chief executive of
utility Exelon Corp, who co-chaired a panel that recommended
changes to energy policy in a report for the Chicago Council on
Global Affairs.

“The economic difficulties we have right now only reinforce
the need for these efficiencies,” echoed co-chair John
Livingston of consultant McKinsey