Energy Costs
Background
Concerns about climate change, energy security and the eventual return of high energy prices will keep energy policy at the top of the public agenda for the foreseeable future.
Though forest products facilities generate an average of two-thirds of their energy needs onsite from renewable biomass, and we are a leading user of highly efficient co-generation technology, purchased energy remains our third largest manufacturing cost. That keeps energy at the top of the industry’s agenda as well.
The global market for forest products means that U.S. manufacturers cannot pass on excessive energy costs to their customers and expect to stay in business. Other U.S. manufacturers have similar challenges.
As state and federal policymakers address renewable energy mandates, climate change, energy efficiency, transportation and other issues that could impact energy costs, they must be sensitive to the importance of keeping energy costs low to protect American manufacturing jobs and the sector’s overall global competitiveness.
Policy
AF&PA supports policies that reduce the cost of energy by encouraging fuel diversity, increasing access to supplies both on and offshore, investing in breakthrough technologies, and promoting conservation.
We also support maintaining policies to encourage power generation from highly-efficient energy sources, such as co-generation facilities (e.g., policies requiring utilities to purchase co-generated electricity from those facilities). Further, as the nation confronts the challenge of upgrading its transmission infrastructure, those upgrades should be based on an economic analysis of adding additional generation versus transmission; paid for in a fair and equitable manner; and approved through the applicable reliability planning process instituted at the applicable RTO/ISO or utility system.
AF&PA also supports measures that provide additional oversight of natural gas commodity markets.
AF&PA’s Board-approved Biomass Policy guides the Association’s advocacy on bioenergy proposals. AF&PA has long opposed a federal Renewable Portfolio Standard (RPS) for utilities or for electricity generation because it will likely increase purchased electricity costs and generally does not qualify the industry’s existing biomass power or take into account important regional differences.