Senator Thomas J. McIntyre For small firms and innovators I think the federal government should give the inventor the rights, but retain a royalty income of 5% until such time as the funds paid for development of that particular patent have been paid back three fold. Thus the federal government gets back its funds directly, as well as through the tax on earnings of the inventor. All income to the inventor should be taxed as income, not capital gains. Inventors should retain the right to invest some substantial percentage of income into future innovations from these tax dollars. If oil companies are allowed to raise prices based on the promise of future oil exploration, then inventors should be allowed an equivalent incentive. #21 Answer The American public is very much looking forward to hearing about developments in the solar field, much as they followed space developments. I would urge ERDA to turn the task of communicating solar results to the public over to consumer groups. Consumer groups, respected as being independent but capable of bringing the expertise needed to bear on the activity, are required. In fact, there is such a group in being now. It is Consumer Action Now, Inc., 30 East 68th Street, New York, N. Y. 10021 (212-628-2295). This group has already engaged in the dissemination of solar heating-cooling information in an effective, independent, and professional manner. I urge that they be given federal support via ERDA to continue this public activity. As regards industry, municipalities, etc., all these groups have trade associations or representative organizations that can be used for information dissemination. I recommend their use. #22 Answer I believe that the net cost of solar collectors installed upon new homes will be about four to six dollars ($4 to $6) per square foot. Present costs are between $12 and $30 per square foot. The four to six dollar figure includes a credit for roofing that will not be required. Retrofitting will be more expensive since credits will not be possible except in as they provide other services as carports, patio covers, etc. #23 Answer Commercial buildings should represent only a minor fraction (2-5%) of the total program. Most commercial buildings are so grossly energy inefficient that all they need is a combination of energy conservation and passive energy solar collection techniques to drastically reduce their energy demand. Most buildings require only a small heating input and a large air conditioning input. The reduction of unnecessary lighting, double glazing and similar measures will suffice to meet increasing fuel Senator Thomas J. McIntyre 25 July 1975 Page 9 I trust this information will be of value to you, and I thank you for the opportunity to express these thoughts and ideas. JDP:jb Sincerely, MATERIALS CONSULTANTS, INC. Jesse. Plunkett Jerry D. lunkett Senator MCINTYRE. We will call as our next witness, Mr. James R. Piper, president of Piper Hydro, Inc. of La Palma, Anaheim, California. We are glad to welcome you here this morning, Mr. Piper. You undoubtedly have a statement, which we will accept and place in the record in its entirety, and if in the process you can, from your own testimony this morning, hit the highlights and save us a little time, we may be able to explore with you more the questions and that will be good. But I want you to feel free, as I know other members of the committee do, to testify in any manner that you feel most appropriate and effective. STATEMENT OF JAMES R. PIPER, PRESIDENT, PIPER HYDRO, INC., ANAHEIM, CALIF. Mr. PIPER. Senator, I would like to say that I have never met Dr. Plunkett before, but as I sat there listening to his testimony, I thought that we were brothers under the skin, because my reactions are almost identical to his. Our company probably has more practical experience than Dr. Plunkett's in the field, and I will proceed with my statement, and I think you will find in the statement some of that experience. Senator MCINTYRE. All right. That is fine. Mr. PIPER. On the 22d of June 1965, I returned to my office after watching a workman cut up the structure of an apartment house I was building while he attempted to install a conventional space heating system in it. This prompted me to put on paper a sketch of an idea that I had been considering for some time. That sketch was the basic design of a system that used the same water you wash with, the service-hot-water, to heat the apartment. I reasoned that if I could eliminate one complete system-the furnace-I might even be able to install a better system, at a lower price. In 1966, I designed that system into a house I was to build for my family in Palos Verdes, and on the 3d of September 1967 it went into operation for the first time. Not only did it work, but almost immediately three factors became apparent. First, it produced a clean, even, gentle heat; second, it was impossible to run out of hot tap water; and third, the energy bills were low. It is the last of these that has become the most important feature of the system. The energy bills were very low. Now, 10 years after the first sketch was made, over 7,000 dwelling units have that system installed and operating in them. In addition, it is installed in approximately 20 houses in five States and Canada using solar energy in combination with natural gas or propane. It is installed in a high rise senior citizen's HUD insured project in Santa Clara where the average monthly gas bills last year were $2.38 per unit. This is, incidentally, not just the heating bill but also water heating, cooking, and the house gas for the restaurant and the laundry. We believe this project has the lowest utility bills of any multi-family project in the United States. Everything that I've said so far is easily substantiated and you would quite naturally jump to the conclusion that in a time of high energy costs disrupting our economy as they are, everyone would love us, particularly the Government. If you jumped to that conclusion, you would be wrong, as I believe you will see as the hearing progresses. During most of the period when our system was being developed, the companies that sell energy in the United States were locked into competition trying to merchandise surplus cheap energy to the American public. The result of this competition was an encouragement of "energy-wasting" rather than "energy-conserving" systems being utilized in the building industry and a dramatic growth of the utilities. Now, however, conditions have changed. To quote the March 1975 issue of Fortune from an article entitled "For the Utilities, It's a Fight for Survival", "Today's conditions owe a lot of their fearsomeness to the complications of growth. The way things used to be, not only was growth taken for granted, but so were its pleasures." One of those pleasures in the past was an almost iron-handed control over the market that used their energy. If you do not think it was difficult to market a product as a small business when a public utility was paying a builder "highly leveraged front money" to utilize someone else's product, I invite you to try it. This was just one method that was used and I believe that the American public still does not understand that many people live in an all electric house or apartment because of only one reason: The electric utility paid the builder a front money spiff of, say $150 per dwelling unit, to "go all electric." Having made this point, I want to make another one. I don't condemn the utilities for having marketed their product the way they did. I don't condemn the builders for having taken the spiff (they almost couldn't refuse it), and I don't condemn the equipment manufacturers for designing their products to satisfy this unspoken urge for more consumption. You will note the last sentence is in the past tense. If anyone is continuing those policies into the present, I am their critic. I predicted, in writing, 2 years ago, that the lifestyle of the American public was going to decline due to the high cost, not the unavailability, of energy. That has already begun. People are wearing sweaters to bed, taking baths once or twice a week, and following other similar procedures due to high-energy costs. And the tragedy of this situation is that the public did not pick the energy system that now costs them so dearly. It was picked for them by the builder/developer who built their home or apartment. Senator MCINTYRE. Right there, where you refer to this, this is still going on today, as far as I know, the selling of the all electric house. Mr. PIPER. If the utility says to a builder that I will give you highly leveraged front money or a greater advertising allowance, or you call it what you would like, they are picking the system that the American public is going to live with. Senator MCINTYRE. You are not aiming directly at the all-electric? That is one of my pet peeves, these all-electric homes. Mr. PIPER. Well, most of the money in the United States, about as closely as I can calculate, a half a billion in the 1960 era was spent by the electric utilities to promote all-electric or electric space heating Senator MCINTYRE. All right, Thank you. Mr. PIPER. And for them by the utility who sold the energy, and for them by the dictates of their profit structure and the capital market. What I am trying to describe is a market philosophy that is dying slow and hard which I call "energy waste for profit." I believe if dramatic changes are not made at a faster rate then they currently are being made, if the country does not switch to "energy conservation for profit", we may damage our capital markets so severely that they don't recover. And this is where the Government comes in. Since the utility industry is allowed the position of a monopoly by the Government, it also must adhere to Government control. Since the housing industry in the United States looks to Government for subsidy in one form or another, it must submit to Government control. Since the venture, capital industry in the United States is now almost nonexistent (incidentally, largely due to the outflow of oil dollars), research, development, and even production of energy conserving systems is going to be under Government control. If the Government doesn't bite the bullet and make a comprehensive plan to lower energy consumption by applying technology while restructuring the incentive to the profit area for utilities and the source energy industry, then the alternative is for the public to suffer. I believe it is impossible to achieve energy conservation by frugality alone. Now having made this point, I wish to address myself to the hangovers left in the housing market from the energy binge of the sixties. When we talk to builders, we have heard over and over and over, "We don't want to be pioneers" or "We don't care what energy costs because we don't pay the bill", or "Don't tell us the Government cares about energy because the worst buildings for energy use are the ones they build." Senator MCINTYRE. Now here, are we still building, does anybody here know, if we are still building Federal buildings where you cannot open the windows up? Are we still doing that? I wonder. I went by that massive new FBI building, and it did not look as though you could open those windows. And I just cannot conceive of such stupidity. Mr. PIPER. The best ventilation system in the world is an open window. Senator MCINTYRE. I would hope so. It is up in New Hampshire. It is tough down here sometimes. Go ahead. Mr. PIPER. If the Government wants to cut energy usage, it needs to consider these statements because they go to the heart of the matter. Just to be more specific, I will give you some instances where we have run into situations we believe could be corrected. For instance: The committee has a copy of my letter to President Ford containing questions he subsequently asked various governmental agencies to answer. They also have the interim answers, and my comments on those answers.' It doesn't require much imagination to determine the attitude of most of the governmental agencies answering. Remember, those answers were going to the President of the United States, not to me. |