Bill would give energy-conscious buyers tax holiday

Apr 12 - Eastern Pennsylvania Business Journal

Pennsylvania's House Bill 2370 may provide a sales tax holiday for purchasers of certain energy-efficient appliances for two weeks each in 2005 and 2006.

The bill results from recommendations of the Task Force for 21st Century Energy Policy for Pennsylvania.

"This stems out of another bill I have which is calling for an energy efficient standard to be levied in Pennsylvania," says Rep. Charles T McIlhinney, R-Bucks, prime sponsor and member of the Environmental Resources & Energy Committee.

While McIlhinney admits energy-efficient models may be 5 percent to 10 percent more expensive, he believes the longterm savings in electric or fuel costs are worth the investment for consumers.

"Here we are giving an up-front benefit where we are going to cut 6 percent off the price so that (consumers) might take another look at the long-term cost benefits," says McIlhinney. The use of energyefficient products helps lower demand on electric generation and other energy plants, many that operate using coal.

"If we had more energy-efficient appliances, you will use less electricity, you would be burning less coal , says McIlhin ney. "We don't want to set standards to put people out of business or try to push technology when it does not exist. But when it exists and is easily available, we should encourage the sale and promotion of those products, which is where this sales tax holiday comes in."

For example, a consumer who purchases a $300 air conditioner would realize a $18 savings.

"It would have some incentive for those people, but what about the businesses or larger corporations that are installing a larger air-conditioning system for their plant somewhere?" says McIlhinney.

Many businesses could save thousands of dollars by waiting to purchase energy-efficient appliances during the sales tax holiday windows.

"I think that what we do by supporting this type of tax incentive program is trying to get a message to the people that we need to be more conservative in our approach to energy use and more cognizant of the fact we do have a finite supply of many resources," says Rep. Jennifer Mann, DLehigh, a cosponsor of the bill.

"To me this not the end all, be all," says Mann. "It's one piece of an overall philosophical approach to using energy more efficiently. We need to continue to seek out ways in which we can find alternative energy sources, use the resources we have more efficiently and look to, in an economically sound way, use renewable sources.

Mann believes the sales tax holiday for energy-efficient appliances will spur sales for dealers and encourage manufacturers to redesign future models with a priority geared toward energy efficiency.

The purchase of energy-efficient appliances provides other benefits as well.

"The consumer can save a considerable amount of money over the lifetime of the product, and it benefits the electric grid, if it's an electrical appliance, by taking strain off and minimizing new capacity, not only in terms of generating facilities but also in terms of transmission facilities," says Rep. Ellen Bard, RMontgomery, subcommittee chair on energy under the Environmental Resources and Energy Committee.

"The more that we can conserve and more efficiently use our very scarce fossil fuel supplies and the greater the load that we can remove from the transmission lines, the more benefit there is. As we use energy more efficiently, the environment benefits as well," Bard says.

Proponents of the bill anticipate the sales tax holiday will generate increased sales and spur the economy as it did when former Governor Ridge declared one for computer-related equipment.

"You might have some people getting into the market sooner than they would have in the past," says Steve Kasper, store manager of Kasper TV & Appliance Co. Inc., Shillington. "However, if it's going to be done certain times of the year, it may force a concentration during those times, which can complicate our business with deliveries and trying to get things in a timely fashion. That's a good problem to have."

Despite the logistics challenge, Kasper believes the program would be beneficial.

Over the past decade, the styles of energy-efficient appliances have grown to encompass all price ranges, creating more consumer choices.

"I think they are going in the right direction," says Jeff Schultz, owner of Schultz Electric Inc., Emmaus. "People are thinking conservatively. I think what's happening is you're getting more people all the time, more homes and people are educated enough to know that this is the only world we have. We only have one of them; let's save what we can."

Copyright Eastern Pennsylvania Business Journal Mar 22, 2004