The Mission – A Competitive and Diverse Home Energy Market
The New England Fuel Institute (NEFI) public policy agenda, including its legislative and regulatory goals, is written by staff in consultation with the NEFI Government Affairs Committee (GAC) and approved annually by the Board of Directors. It is subject to change as political or industry developments require, or as new challenges and opportunities present themselves.
NEFI’s work in advocating for policies that promote and protect the interests of its members is directed by the GAC and carried out by the NEFI Action Center staff. The Board of Directors meets on a quarterly basis and the GAC meets on a regular basis as well to review and, on occasion, modify and update this agenda. We and our Board of Directors, Committees and staffs are always eager to receive input from members on issues facing them, their employees and consumers. We welcome their grassroots participation in the pursuit of our goals.
Overall, NEFI seeks to preserve and promote healthy competition and diversity in the home energy market and opposes government policy that would “pick favorites” or compel consumers to choose one energy source over another. NEFI seeks to promote the overall health and viability of the industry and the many independent, non-utility home energy providers we serve.
A Responsibility to the Environment
The national debate over “climate change” (also known as “global warming”) has changed energy and environmental policymaking processes and politics. Believing that changes in the Earth’s climate and ocean temperatures are man-made, environmental activists, including some elected officials and government bureaucrats in the region and in Washington, have proposed an array of legislative and regulatory proposals designed to reduce greenhouse gas emissions (GHGs). Proposals have included reducing industrial, commercial, residential, and transportation GHGs through carbon taxes, a national or regional cap-and-trade program, renewable fuel or clean energy standards, mandated minimum efficiency requirements and low carbon fuel standards.
NEFI believes federal, state and regional lawmakers and regulators should work with our nation’s largely small business retail fuel industry in addressing global climate change, environmental security and domestic energy independence. This includes improving on an already outstanding record of efficiency, conservation and consumer education, as well as bringing to market cutting-edge and domestically produced renewable fuels and efficiency technology. These solutions should be fair and equitable for fuel dealers and consumers, and should not “play favorites” or “pick winners and losers.”
Therefore, NEFI will...
–Oppose climate change solutions that would pick "winners and losers," or compel consumers to choose or give preferential treatment to one home energy source over another.
–Oppose policies that would cause home heating prices to surge and become less affordable, thereby damaging not only the viability of our member companies, but consumers – especially unemployed, low income and elderly Americans – already struggling due to the economic crisis.
–Support research and expansion into “cleaner and greener” home energy solutions, including the “greening” of home heating oil by establishing a federal requirement for an ultra–low sulfur product blended with sustainable biodiesel fuel, with the ultimate goal of achieving a 20 percent blend nation-wide by 2020 (“20 by 2020”).
–Support the reauthorization of the National Oilheat Research Alliance (NORA), which is vital to accomplishing the above goal, as it will be responsible for research and development of new fuels, testing on equipment and infrastructure, consumer education and technical training and safety.
–Support the expanded use and integration of advanced solar technology into existing oil and gas systems.
Home Energy Efficiency, Research and Education
NEFI supports greater efficiency and cleaner, more environmentally secure fuels and home energy. This includes programs that promote research and development into fuel quality, renewable and more environmentally-friendly alternatives and ultra–efficient home heating equipment, as well as consumer education and technical and safety training programs.
Therefore, NEFI will...
–Support legislation that would strengthen the National Oilheat Research Alliance (NORA) and provide a long-term reauthorization.
–Support legislation to strengthen research and education in advanced solar equipment and technologies, and that encourage training of existing home energy technicians.
–Support fuel-neutral tax credits and other incentives to promote energy efficiency audits, weatherization of homes, and the installation of efficient space and water heating equipment.
–Oppose policies that would give preference to any one energy source, promote fuel switching, or otherwise disadvantage certain qualified home energy companies or professionals.
Domestic Energy for our National Security
For too long, our nation has been held hostage to foreign sources of energy. In pursuit of greater energy security for our nation and market stability for consumers, America must develop and bring to market its own natural energy resources and innovative energy technologies. This includes traditional forms of energy such as fossil fuels, because demand from commerce and the consumer for these energy sources will not disappear overnight. However our nation must also strive to develop clean and green domestic alternatives, including biofuels from agriculture, waste and advanced feedstock such as algae.
Therefore, NEFI will...
–Support an “all of the above” approach to energy; supports federal legislation that will encourage diversity and consumer choice in home energy products and services; and oppose incentives to convert or “fuel switch” or otherwise “play favorites” when it comes to home energy solutions.
–Support the development of domestic energy, including petroleum from conventional and unconventional petroleum exploration and recovery, and oppose bans or prohibitions on oil recovery both on- and off-shore.
–Support research, development and deployment of alternatives such as, Biodiesel, Bioheat®, solar technologies and other new-age energy sources.
Stable and Affordable Energy Prices
More certainty in domestic energy production and supply and access to alternatives will translate to lower prices for consumers. But energy prices can also be influenced by other government policies, including oversight of commodities trading by the Commodity Futures Trading Commission (CFTC) and actions by the Federal Reserve.
1. Commodity Futures Markets
Commodity exchanges were established as a tool for hedgers, such as home heating companies, airlines, farmers, and gasoline retailers, to hedge commercial risks and to provide a benchmark for prices. Until recently, energy futures were determined largely by the fundamental principles of supply and demand. However an influx of speculative capital and a new breed of passive investment by "index speculators" have distorted these markets. Deregulation in the last decade made them more opaque and subject to excessive speculation, volatility and potential manipulation.
In 2010, NEFI and its allies helped pass as part of a major Wall Street Reform bill new authorities for the CFTC that would close trading loopholes, increase transparency and prevent fraud, manipulation and excessive speculation in the commodity markets. NEFI is committed to seeing these new trading rules implemented and enforces to the fullest extent of the law.
Therefore, NEFI will...
–Actively participate, in cooperation with our allies, in all federal rulemakings, policy directives and regulatory guidance to ensure implementation of Congressional directives contained in the Dodd-Frank Wall Street reform bill that promote transparency, accountability and oversight of the derivative markets, including energy futures and swaps, do the job and deny additional loopholes to Wall Street speculators.
–Pursue a regulatory framework that preserves the ability of bona fide energy companies to hedge and to do so without excessive capital costs.
–Support or oppose, as appropriate, legislation on Capitol Hill that would affect the recently-enacted Dodd-Frank derivative reform measures or that otherwise would affect excessive speculation or the ability of regulators to monitor energy futures markets and prevent fraud, manipulation and abuse.
–Encourage federal regulators to harmonize regulations with foreign and international regulators in order to prevent regulatory arbitrage and the establishment of off-shore ”dark markets“ and a migration of speculators to these markets.
2. The Federal Reserve
In addition, national monetary policy at the Federal Reserve can have a major influence on the affordability of energy. For example, in the Fall of 2010, the Fed engaged in an action known as “Quantitative Easing,” in which it essentially printed more money to inject into the economy in hopes of stimulating economic growth. However, the action also drove up commodity prices across the board, constituting a "phantom tax" to be paid by all Americans. Crude oil surged more than 30 percent, bringing with it prices for gasoline, diesel fuel and home heating fuels. Further, the Fed's actions are not subject to approval by either the American people or their representatives in Congress. The Fed's actions constitute taxation without representation.
Therefore, NEFI...
–Will monitor the Federal Reserve's actions, and bring public and Congressional attention to U.S. monetary policies that adversely affect the affordability of energy for U.S. Consumers and businesses.
Regulatory Relief And Favorable Tax Treatment
Unlike big-business energy companies such as utilities or large oil and gas producers, NEFI member companies are unable to bear the cost of onerous regulations or high taxes. This only translates to greater operating costs and tax burdens, stifling growth, hiring of new employees and competativeness.
More than 75 percent of NEFI members are classified as small businesses under federal law. Furthermore, the fuel industry is very competitive by nature, especially the home energy industry, where not only are companies competing with other small home heating providers and service companies, but they are also competing with large utilities, some of which are foreign owned.
Therefore, NEFI will...
–Continue to educate lawmakers and regulators on the differences between "big oil" and small business below-the-rack marketers to prevent one-size-fits-all regulatory solutions.
–Advocate for changes to the federal tax code that are favorable to NEFI members and to the consumers they serve as well as supporting existing tax provisions that are beneficial to both.
–Closely monitor and aggressively respond to all federal regulatory actions, policy directives, guidelines and industry standard setting initiatives that have a potential impact on the industry.
–Build on our recent successes to win significant and meaningful federal regulatory relief for NEFI members that reduce compliance costs and burdens.
–Support regulatory relief legislation in Congress, including a repeal of burdensome IRS-1099 reporting requirements included in the 2010 healthcare reform law, and a bill to narrow the definition of "creditor" under Red Flag regulations in order to provide relief to small businesses.
–Oppose legislation that would increase regulatory burdens, including legislation that would require wet lines on cargo tank vehicles and transports to be purged of product after each delivery.
Federal Low Income Home Energy Assistance Programs
While it is not a perfect program, grant monies provided to states from the federal Low Income Home Energy Assistance Program (LIHEAP) help many low income families, home-bound sick or elderly Americans and the unemployed meet their energy bills. Many NEFI member companies participate in LIHEAP programs at the state level, in addition to charity, faith-based and community programs, corporate and industry philanthropy programs and programs to benefit military personnel and their families.
Additionally, consistent and reliable federal funding for LIHEAP is important. State fuel assistance programs, Community Action Programs (CAP), state fuel assistance directors and energy companies of all sizes, including NEFI members, need concrete and reliable funding levels in order to prepare their companies, programs and consumers in advance of heating or cooling seasons. While we acknowledge that Congress and the administration can and will review the effectiveness of LIHEAP and its funding levels, we continue to support this important program and adequate funding levels.
Therefore, NEFI...
–Supports a funding level of $5.1 billion in federal LIHEAP funds for FY 2011, and will review and support future funding levels based on need, energy costs and other economic realities.
–Opposes immediate cuts to LIHEAP funding, especially without adequate Congressional review and debate
–Will monitor and review proposals to establish a "trigger" mechanism for funding increases.
–Supports any modifications to the federal LIHEAP program that would reduce administrative and cost burdens on heating fuel dealers and encourage their participation in the program.