Comments of the Council on Wage and Price Stability Before the Federal Energy Administration: Proposed State Energy Conservation Plan Guidelines

by William Lilley on July 9, 1976
by William Lilley, Peter H. Lowry, Dianne Levine, James C. Miller and Thomas M. Lenard

Proposed Federal regulations to implement a program of financial assistance to the States in support of their energy conservation plans were criticized today by the Council on Wage and Price Stability. In comments made before the Federal Energy Administration (FEA), the Council suggested that the guidelines proposed by FEA to allocate funds could be modified to achieve energy conservation in a more efficient and anti-inflationary manner. The FEA guidelines, required by the Energy Policy and Conservation Act, will be used to determine the allocation of available funds among the participating States for calendar years 1977 and 1978. The Council noted that, although the Act authorizes only $50 million a year in Federal assistance, the overall impact of the program is likely to be significantly larger since State governments will incur increased budgetary costs and additional costs will be borne by the private sector. Thus, FEA expenditures are likely to represent a very small portion of the total cost of the program. Of major concern, in the Council’s view, is the inflationary impact of the increased government regulation of the private sector which will be instituted under the umbrella of the FEA program.
In its comments, the Council noted the complexity of the issues facing FEA and the difficulty of designing a totally new program. However, it urged FEA to consider modifications in the proposed regulations so as to increase the likelihood of achieving the Act’s goals at lower costs…

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