While the chance for broad energy reform to come out of our dysfunctional and divided Congress are slim, there is one area of broad agreement across the aisle: Energy efficiency is good for jobs, and the environment. Much can also be done at modest or no cost to the taxpayer.
Senators Jeanne Shaheen (D-NH) and Rob Portman (R-OH) are reintroducing their Energy Savings and Industrial Competitiveness Act, supported by a broad range of industry leaders, energy efficiency advocates, and environmental stakeholders. A similar bill passed the Senate Energy and Natural Resources Committee in the 112th Congress with broad bipartisan support, but drew fire from Republicans for expanding a Department of Energy loan program. This bill eliminates that provision, along with another revolving loan program which had been intended to fund energy efficiency upgrades.
A representative of insulation manufacturer Owens Corning (NYSE:OC) applauded the bill. She said,”Energy efficient buildings must be a cornerstone of National Energy Policy as the building sector remains the nation’s single largest energy consumer. As the residential insulation market leader for over seven decades, we are keenly aware of the energy savings, environmental improvements, and job creation opportunities derived from strong energy efficient buildings policies and practices.”
Owens Corning’s shareholders cheered as well. Although the broad indexes were down at mid-day, Owens Corning stock was up 0.2 percent.
More specialized energy efficiency companies were also rallying. Waterfurnace International (TSX:WFI, OTC:WFIFF) rose 0.2 percent, while turn-key energy solution provider Ameresco (NYSE:AMRC) was up 3.7 percent. Energy efficiency LED lighting players Cree (NASD:CREE) Revolution Lighting (NASD:RVLT), and Phillips (NYSE:PHG) were also up, although broader conglomerates with a strong energy efficiency focus, such as Honeywell (NYSE:HON) and Johnson Controls (NYSE:JCI) followed the broader market down.
The Bottom Line
The bill’s success is not guaranteed, but the senators have spent months of negotiations getting buy-in from more than 200 groups and organizations, from the Union of Concerned Scientists to the U.S Chamber of Commerce.
If the Senators have or will gather enough support for a version of this bill to make it into law, expect many of the energy efficiency stocks listed above to rally further, although that is far from the only factor which will be affecting these stocks over the next several months.
Disclosure: Long AMRC, WFIFF, JCI
DISCLAIMER: Past performance is not a guarantee or a reliable indicator of future results. This article contains the current opinions of the author and such opinions are subject to change without notice. This article has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.
Lead image: Senator Jeanne Shaheen (Photo credit: sskennel) and Sentaor Rob Portman (official photo)