The Power Act's Title I, Subtitle D, is titled "Renewable Energy and Energy Efficiency." In Section 1601, Congress states that "large-scale deployment of renewable energy and substantial improvement in energy efficiency" is critical to "improved energy security", among other things. However, this part of the Power Act is actually very limited in scope.

First, Section 1602 of the Power Act authorizes EPA to give allowances to power districts, public utilities, and electrical co-op participating in the Rural Utilities Service loan program to be used to fund no-interest loans to consumers for energy efficiency measures. This section also creates a permanent funding mechanism for a "national" nonprofit organization with "significant experience" in providing "advice in legal and regulatory matters affecting electric service and the environment" to provide "verification services." Second, Section 1603 authorizes EPA to distribute emissions allowances (i.e., permission to consume energy) to State governments to offset their higher energy costs. One-third of the allowances are to be divided among the States equally, one-third shall be distributed ratably based on population, and one-third distributed ratably based on energy consumption. The allowances are to be used "exclusively" for energy efficiency purposes, deployment of alternative energy projects, funding "Smart Grid" programs, and interestingly, "Providing the non-Federal share of support" for surface transportation capital projects.