[Senate Hearing 112-10]
[From the U.S. Government Publishing Office]
S. Hrg. 112-10
ENERGY EFFICIENCY STANDARDS
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HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
TO
RECEIVE TESTIMONY ON S. 398, A BILL TO AMEND THE ENERGY POLICY AND
CONSERVATION ACT TO IMPROVE ENERGY EFFICIENCY OF CERTAIN APPLIANCES AND
EQUIPMENT, AND FOR OTHER PURPOSES, AND S. 395, THE BETTER USE OF LIGHT
BULBS ACT
__________
MARCH 10, 2011
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the
Committee on Energy and Natural Resources
______
U.S. GOVERNMENT PRINTING OFFICE
66-124 PDF WASHINGTON : 2011
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JEFF BINGAMAN, New Mexico, Chairman
RON WYDEN, Oregon LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota RICHARD BURR, North Carolina
MARY L. LANDRIEU, Louisiana JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont MIKE LEE, Utah
DEBBIE STABENOW, Michigan RAND PAUL, Kentucky
MARK UDALL, Colorado DANIEL COATS, Indiana
JEANNE SHAHEEN, New Hampshire ROB PORTMAN, Ohio
AL FRANKEN, Minnesota JOHN HOEVEN, North Dakota
JOE MANCHIN, III, West Virginia BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware
Robert M. Simon, Staff Director
Sam E. Fowler, Chief Counsel
McKie Campbell, Republican Staff Director
Karen K. Billups, Republican Chief Counsel
C O N T E N T S
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STATEMENTS
Page
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................ 1
Brandston, Howard, Lighting Consultant, Hollowville, NY.......... 52
Cooper, Mark, Director of Research, Consumer Federation of
America........................................................ 47
Hogan, Kathleen, Deputy Assistant Secretary, Energy Efficiency,
Department of Energy........................................... 4
McGuire, Joseph, President, Association of Home Appliance
Manufacturers.................................................. 34
Murkowski, Hon. Lisa, U.S. Senator From Alaska................... 2
Nadel, Steve, Executive Director, American Council for an Energy-
Efficient Economy.............................................. 24
Pitsor, Kyle, Vice President, Government Relations, National
Electrical Manufacturers Association........................... 40
Yurek, Stephen, President and Chief Executive Officer, the Air-
Conditioning, Heating, and Refrigeration Institute............. 37
APPENDIXES
Appendix I
Responses to additional questions................................ 63
Appendix II
Additional material submitted for the record..................... 93
ENERGY EFFICIENCY STANDARDS
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THURSDAY, MARCH 10, 2011
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The committee met, pursuant to notice, at 9:31 a.m. in room
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman,
chairman, presiding.
OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW
MEXICO
The Chairman. OK. Thank you all for coming. Welcome today's
witnesses. We're here today to talk about 2 bills regarding the
Department of Energy's Appliance Energy Efficiency Program.
S. 398, to amend the Energy Policy and Conservation Act to
improve the energy efficiency of certain appliances and
equipment.
S. 395, to repeal certain amendments to the Energy Policy
and Conservation Act with respect to light bulb technology.
These were provisions that were passed in 2007 and are now
proposed for repeal.
The first bill is an updated version of the Appliance
Standards legislation that nearly passed the Senate by
unanimous consent in December. It combines provisions that were
reported from this committee as a part of the America Clean
Energy Leadership Act, ACELA, with amendments to ACELA that
were reported in May 2010 and with more recent agreements as
well. The bill would increase or establish new efficiency
standards for nearly 20 types of appliances from air
conditioners to water dispensers.
This legislation would continue to protect and create jobs
by reducing regulations on business through the preemption of
multiple State standards with simpler, more stable, more
predictable Federal regulations. The legislation would also
reduce the power and water bills of American households and
businesses, free those savings for other uses. Make our economy
stronger and more competitive and help protect the environment
by avoiding the environmental impacts of reduced energy
production.
Enactment of this legislation would continue a bipartisan
tradition that was started in this committee in 1987. It was
repeated in 1988 and 1992 and 2005, again in 2007. That
tradition is a tradition of enacting consensus appliance
standards that have been negotiated among manufacturers and
energy efficiency advocates and consumer groups. Overall it's
estimated that by 2030 the standards will reduce national
electrical demand 12 percent below what it otherwise would be.
The second bill on today's agenda, S. 395, would repeal the
efficiency standards for general service incandescent light
bulbs and other provisions of Subtitle B3 of the Energy
Independence and Security Act of 2007. The proposal is of
concern to me because it goes against this tradition that I
spoke about of broad bipartisan support for consensus appliance
standards. I hope that today's record will confirm, as I
understand, that not only will consumers continue to be able to
buy incandescent bulbs that look the same as those they
currently buy but those bulbs will provide the same quality of
light as tradition incandescent bulbs. These bulbs will last
longer, use less energy and save consumers money.
Let me defer to Senator Murkowski for her comments before
we hear from our witnesses.
STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR
FROM ALASKA
Senator Murkowski. Thank you, Mr. Chairman. Good morning. I
appreciate you convening the hearing today. We certainly have
two very different bills to discuss.
The first one, the Implementation of National Consensus
Appliance Agreements Act or INCAA, has been through several
iterations, hearings and mark ups over the past 2 years. The
bill contains consensus agreements that will set new efficiency
standards for certain product classes of appliances.
The second bill before us, the Better Use of Light Bulbs
Act--which has a good acronym, you have to admit, ``BULBS''--
seeks to repeal some lighting standards that became law as part
of the Energy Independence and Security Act of 2007.
The implementation of National Consensus Appliance
Agreements, which I have co-sponsored with you, Mr. Chairman,
notably contains important new standards for outdoor lighting,
furnaces and air conditioners. These proposed standards were
the result of months, and in some cases, years, of hard work
and negotiations amongst stakeholders, some of whom we will
hear today. I think we recognize that while no piece of
legislation is perfect, the time and effort put into these
agreements is an important step forward. It certainly shows a
sustained commitment to comprehensive bipartisan energy
legislation.
It is also my opinion that this bill goes a long way toward
improved efficiency and therefore improved energy security. I
applaud the efficiency advocates and the industry
representatives for their very, very hard work on this. We knew
it. We know that was a long process.
Mr. Chairman, as it relates to the second bill, I think
it's fair to say that light bulbs have really become the hot
topic around Capitol Hill now. They have become perhaps more of
a symbol, possibly a very visible, a very tangible symbol of
the overreach of big government. I can certainly sympathize
with that sentiment.
There have been countless news stories about what the new
standards, which will be phased in over the next several years,
will mean to the average American family. I'm interested in
this debate on a personal level. My husband and I seem to have
ongoing debates. I won't classify them as arguments. But
debates about the effectiveness and where we need to go in our
household when it comes to light bulbs.
Everybody has had some kind of an experience that they
relate to with CFLs. Our family is no exception. One of us
hears a buzz or a flicker and blames it on the light bulb.
I think it's fair to say that the light is perhaps not the
same quality as the incandescent bulb. They contain mercury
which we all know is a hazard. I'm told though that better
technology exists, and while the standard light bulb that we
know and love may soon be phased out, there are new products
that are strikingly similar to the old ones and have the added
benefit of saving electricity.
So I'm looking forward to hearing what our witnesses have
today and the robust debate that we will have over our lighting
efficiency.
Thank you.
The Chairman. Thank you very much.
For the record at this point I would include a statement
that Senator Enzi has provided. He's the prime sponsor on S.
395.
Also a letter from the Consumer's Union, and a letter from
the National Association of State Energy Officials.*
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* See Appendix II.
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[The prepared statement of Senator Enzi follows:]
Prepared Statement of Michael B. Enzi, U.S. Senator From Wyoming
Chairman Bingaman and Ranking Member Murkowski, thank you for
allowing me to share my thoughts about S. 395, the Better Use of Light
Bulbs (BULB) Act. I introduced this legislation because lighting in our
homes should be about personal choice and not about federal mandates.
The legislation that was passed in 2007 set a standard that
effectively bans the traditional incandescent light bulb. I opposed the
legislation when it was passed and I continue to oppose it today. The
light bulb mandate phases out traditional incandescent light bulbs in
California this year and will begin to phase out traditional
incandescent light bulbs in the rest of the United States in 2012. It
is the sort of ``Washington knows better'' approach that was soundly
rejected by the American people. It should also be rejected by members
of the United States Senate.
The de-facto ban on the traditional incandescent light bulb was
intended to save on energy costs and limit pollution by replacing one
light bulb with another. Unfortunately, as with many regulations, there
are unintended consequences. In this case the alternative bulbs are
more expensive and the most common alternatives contain mercury, which
is harmful even in the smallest amounts. We should not allow this
mandate to stand.
Twenty-seven of my Senate colleagues agree with me--they
cosponsored the BULB Act. Six of the original cosponsors are members of
the Energy Committee. Rather than allowing members of Congress to
dictate what light bulbs must be used in every American's home, my
legislation allows the market to work. It allows every American to
decide what light bulbs work best for them. If a rancher in Wyoming
wants to use compact fluorescent light bulbs (CFLs) because they prefer
the light from CFLs, passage of my bill allows that to happen. Passage
of the BULB Act also allows a shoe store in Houston to use traditional
incandescent bulbs if they believe the light from the traditional bulb
makes their product look better. It gives consumers the option to
decide what works best for them and avoids that one-size-fits-all
approach that Washington should reject.
Some argue that this mandate is essential to foster innovation.
They tell us that we are on the verge of new lighting technology that
will revolutionize light bulbs, saving consumer money and saving
energy. I hope this is the case. However, if the new light bulbs that
are on the horizon are significantly better than the bulbs that exist
now, the American people will buy them. If a product of equal quality
is available for a comparable cost, the American people will buy them
on their own. It isn't our job to force them from one product to
another.
It has also been argued that this standard is essential because
individual states set their own standards. I would respond that those
states are wrong to do so and we should not encourage such behavior by
forcing a Washington mandate into every single home in America. If
legislators in a state like California want to force a light bulb
mandate on its citizens, that's fine by me. However, their decision
should not result in a federal mandate that forces citizens in my home
state and every other state to buy more expensive and potentially
harmful light bulbs.
If someone wants to fill their home or business with the light from
the new bulbs, they should be able to do so. I also think it is fine if
someone wants to buy an old-fashioned bulb because it works better for
them. If left alone, the best bulb will win its rightful standing in
the marketplace. Government doesn't need to be in the business of
telling people what light bulb they have to use.
I appreciate the opportunity to share my thoughts and hope you will
join me in supporting consumer choice in our homes.
The Chairman. We have 2 panels today.
The first panel is a representative from the Department of
Energy.
Ms. Kathleen Hogan, who is the Deputy Assistant Secretary
for Energy Efficiency in the U.S. Department of Energy. Why
don't you go right ahead, Ms. Hogan with your testimony. We
will have some questions of you. Then we will introduce the
second panel after you're complete.
Go right ahead.
STATEMENT OF KATHLEEN HOGAN, DEPUTY ASSISTANT SECRETARY, ENERGY
EFFICIENCY, DEPARTMENT OF ENERGY
Ms. Hogan. Thank you and good morning, Chairman Bingaman
and Ranking Member Murkowski and members of the committee.
Thank you for the opportunity to appear today to discuss S. 395
and S. 398. As you all know, energy efficiency is an immediate,
economically responsible way to increase the Nation's energy
security while protecting our environment. Appliance standards,
in particular, are a highly cost effective way for advancing
energy efficiency. Some of the greatest opportunities for
energy savings are in the appliances and products that
consumers and businesses use every day.
I have submitted some detailed comments on the 2 bills that
are the subject of today's hearings, but I'd like to take this
opportunity just to briefly outline the Department's position
on these bills for the committee.
So first there is the bipartisan Implementation of National
Consensus Appliance Agreements Act of 2011 or INCAA. I'll call
it INCAA, which codifies agreements that were negotiated,
signed and promoted by a cross section of stakeholders
representing consumer advocacy groups, manufacturers,
manufacture trade associations and energy efficiency advocacy
organizations, all of whom support this bill. The negotiated
consensus agreements would establish energy conservation
standards for 14 products.
Because many of these standards do overlap with several DOE
rules currently under development the Department cannot present
a position today that would presuppose the level of the final
standards. However, initial DOE analyses of the types of
improvements that are suggested here do show the opportunity
for significant net benefits to consumers and businesses on the
order of billions of dollars. We also know that manufacturers
and manufacture trade associations representing the vast
majority of manufacturers in each of the appliance markets
recognize that they too would benefit from these consensus
agreements and clearly have spent significant efforts in
getting to the agreements that we now have before us.
So INCAA would provide regulatory certainty.
Would help industry plan investments in manufacturing the
products that would meet the standards.
Further these standards would continue to promote
innovation by setting minimum performance thresholds rather
than prescribing specific approaches.
So now let me move to the second bill. The Better Use of
the Light Bulbs Act or the BULB Act, would repeal portions of
the bipartisan Energy Independence and Security Act of 2007
which does include higher efficiency standards for general
service incandescent lamps that would phase in in the coming
years. The first phase would begin in January 2012 and would
require the 100 watt bulb to be roughly 25 percent more
efficient than it is today.
DOE strongly supports the EISA 2007 standards and joins
with industry and energy efficiency organizations in opposing
the BULB Act. The EISA lighting standards will save families
and businesses money and help protect the environment.
Lighting represents roughly 10 percent of a typical
family's electric bill. We estimate that using the EISA
compliant light bulbs will save consumers nearly $6 billion in
2015 alone. An individual household that would upgrade, say, 15
light bulbs could save about $50 per year.
Many Americans are already familiar with the efficient
light bulbs that would be compliant with EISA. According to a
recent USA Today Gallup poll, nearly 3 out of 4 Americans
report having replaced inefficient bulbs with our more
efficient options over the last few years. Eighty-four percent
of them report being satisfied with the newer bulbs.
Besides repealing the lighting standards, the BULB Act
could also jeopardize the Federal Trade Commission's authority
to issue labels on light bulbs similar to the nutrition labels
on food products which Americans use every day. This label
would contain very useful information to the consumers: annual
energy costs, the useful life, light quality and energy
consumption. Repealing this provision would remove a very
important tool for consumers in making informed lighting
choices. The BULB Act could also repeal FTC authority to
provide labels on consumer electronics or other products not
specifically identified in the Energy Policy and Conservation
Act.
Finally, should these standards be repealed, manufacturers
may see a greater regulatory burden as States could follow
California's example and implement their own lighting
standards, creating confusion among consumers and uncertainty
and costs for industry. Industry has already prepared
substantially for these standards. New factories producing more
efficient lighting choices have opened, and old factories have
been retooled to produce these more efficient bulbs. There's
great value in one national standard creating one national
market for these bulbs.
So in summary, INCAA contains provisions that represent
industry, advocate and consumer consensuses and according to
our analyses, would save consumers billions of dollars.
The BULB Act on the other hand would cost consumers and
manufacturers money and result in higher energy use and higher
bills.
So thank you again for the opportunity to share the
Department's views on these 2 pieces of legislation. I would be
happy to answer any questions that you may have.
[The prepared statement of Ms. Hogan follows:]
Prepared Statement of Kathleen Hogan, Deputy Assistant Secretary,
Energy Efficiency, Department of Energy
Chairman Bingaman, Ranking Member Murkowski, Members of the
Committee, thank you for the opportunity to discuss the Implementation
of National Consensus Appliance Agreements Act of 2011 (S.398) and the
Better Use of Light Bulbs Act (S.395).
In June 2009, President Obama said, ``One of the fastest, easiest,
and cheapest ways to make our economy stronger and cleaner is to make
our economy more energy efficient.''\1\ Energy-conserving appliance
standards are one of the significant steps the Administration has taken
to save energy in homes and businesses nationwide, and pave the way
toward a clean energy future for our country.\2\ Since January 2009,
the Department of Energy has finalized new efficiency standards for
more than twenty household and commercial products, which are projected
to cumulatively save consumers between $250 billion and $300 billion
over the next 20 years.\3\ These standards can provide an immediate and
economically responsible way to increase the nation's energy security
while protecting the environment. Improvements in energy efficiency can
be made today to yield significant near-term and long-term economic and
environmental benefits for the nation.\4\
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\1\ http://www.whitehouse.gov/the--press--office/Remarks-by-the-
President-on-Energy/
\2\ http://www.whitehouse.gov/issues/energy-and-environment
\3\ http://www.energy.gov/news/9582.htm
\4\ See, for example: McKinsey and Company (2007). Reducing U.S.
Greenhouse Gas Emissions: How Much at What Cost? (http://www.epa.gov/
cleanenergy/documents/suca/cost-effectiveness.pdf) and Lazard
Associates. Feb. 2009. Levelized Cost of Energy Analysis Version 3.0.
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The U.S. Department of Energy (DOE) is pleased to work with you and
your fellow Committee Members to make our homes, offices, factories,
vehicles, and appliances more energy efficient. The Department's energy
efficiency efforts include promoting and implementing energy efficiency
policies and practices; strengthening consumer education and outreach
on energy efficiency as a cost-saving resource; and accelerating market
adoption of energy efficient technologies that save families and
businesses money.
My comments focus on two pieces of pending legislation related to
energy efficiency standards. First, I will discuss the Implementation
of National Consensus Appliance Agreements Act of 2011 before turning
to the Better Use of Light Bulbs Act.
implementation of national consensus appliance agreements act of 2011
(s.398)
S.398 codifies agreements that were negotiated, signed, and
promoted by a cross-section of stakeholders representing consumer
advocacy groups, manufacturers, manufacturer trade associations, and
energy efficiency advocacy organizations, all of whom support this
bill. The negotiated consensus agreements would establish energy
conservation standards for 14 products, several of which are in the
midst of DOE's ongoing standards and test procedure rulemakings.
In 2007, Congress recognized the importance of negotiated consensus
standards, amending the Energy Policy and Conservation Act (EPCA) to
allow for an expedited rulemaking process in the event a representative
group of stakeholders could reach agreement. Because several DOE rules
currently under development and review overlap with the proposed
consensus standards, the agency cannot at this time present a position
that would presuppose the level of the final standards outcome;
however, the analyses accompanying the proposed rules for these
standards suggested potential net benefits of tens of billions of
dollars in fuel savings and lower greenhouse gas emissions.
Manufacturers and manufacturer trade associations representing the
vast majority of the manufacturers in each appliance market recognize
they would also benefit from consensus agreements. S.398 could provide
regulatory certainty for industry and could reduce litigation risk by
setting the time table and accompanying requirements for industry to
meet, all of which could help manufacturers in planning their
investments when manufacturing compliant products.
S.398 could also allow DOE to respond to industry and efficiency
advocates' requests for greater technical flexibility in DOE test
procedures and energy conservation standards by giving the department
the authority to regulate based on multiple efficiency descriptors.
These additional tools could ensure that the metrics DOE uses in its
standards remain flexible and meaningful as industry continues to
create newer and more innovative products.
S.398 appears to prescribe some duplicative procedural requirements
that could put an unnecessary resource burden on DOE. For example, the
bill's requirement that DOE respond in a published rulemaking to any
petition requesting amended standards is unnecessary given that DOE
already must review each standard every six years--and the evaluation
period begins years before that. Similarly, the bill adds provisions
giving stakeholders the right to petition for a test procedure review,
a right they already hold under the current law.
In summary, S.398 contains provisions that represent industry,
advocate, and consumer consensus and that could streamline DOE's
standard-making process. Because several DOE rules currently under OMB
review overlap with the proposed consensus standards, the agency cannot
at this time present a position that would presuppose the final outcome
of the rulemaking deliberative process.
better use of light bulbs act (s.395)
This legislation would repeal portions of the bi-partisan Energy
Independence and Security Act of 2007 (EISA), which includes higher
efficiency standards for general service incandescent lamps that will
phase in over the coming years. The first iteration of the standards is
scheduled to take effect on January 1, 2012, and will require 100 Watt
bulbs to be roughly 25 percent more efficient.
The Administration strongly supports these standards, and joins
industry and energy efficiency organizations in opposing S.395. The
EISA lighting standards are projected to save families and businesses
money, empower consumers with lighting choices, and help protect the
environment. DOE projects that if S.395 were enacted, U.S. primary
energy consumption would increase by 21 quads and greenhouse gas
emissions could increase by more than 330 million metric tons\5\ over
the next 30 years.
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\5\ http://www1.eere.energy.gov/buildings/appliance--standards/
pdfs/en--masse--tsd--march--2009.pdf
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The EISA standards may generate significant savings for consumers.
Lighting represents about 10 percent of a typical family's electric
bill.\6\ Using EISA-compliant light bulbs could save consumers nearly
$6 billion in 2015 alone.\7\ A household that upgrades 15 inefficient
incandescent light bulbs could save about $50 per year.\8\
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\6\ http://www.energysavers.gov/your--home/lighting--daylighting/
index.cfm/mytopic=11975
\7\ U.S. Department of Energy analysis (2011), assuming the light
bulb is on for two hours per day, an electricity rate of $0.11 per
kilowatt-hour, and comparing a 100 Watt incandescent to a 26 Watt CFL.
No rebound effect is assumed.
\8\ U.S. Department of Energy analysis (2011)
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DOE projects that these standards will help Americans further
recognize the savings potential they are already beginning to realize.
According to a recent USA TODAY/Gallup poll, nearly three out of four
Americans say they have replaced inefficient bulbs with compact
fluorescent lights (CFLs) or light-emitting diodes (LEDs) over the last
few years, and 84 percent of those Americans are very satisfied or
satisfied with their newer bulbs.\9\
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\9\ USA Today. February 17, 2011 http://content.usatoday.com/
communities/greenhouse/post/2011/02/pollamericans-ok-newer-light-bulbs/
1
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Further, since the standards are performance-based, consumers will
be able to choose from an array of efficient bulbs, including
incandescent halogens, CFLs, and LEDs. They establish technology-
neutral, minimum requirements around the amount of light delivered per
unit of energy consumed, which is helpful for consumers.
S.395 could jeopardize the required application of an important
label on lighting products, removing a key tool for consumers to make
informed choices. For decades, Americans chose light bulbs based on how
much energy they consume (watts) instead of on how much light they emit
(lumens). Selecting a light bulb based on lumens will help consumers
choose how much light they want while saving money by making smarter,
energy-saving choices. To help consumers better understand lumens, the
Federal Trade Commission will release a new label (shown at the right)
for light bulbs this summer, similar to the nutrition labels on food
products with which Americans are familiar.\10\ The label will not only
contain lumen output, it will also provide the estimated operating cost
of a bulb for a year, and the color quality of the light, which can
range from the warm light to cooler bluish light. Energy-saving options
from efficient incandescent bulbs to CFLs to LEDs can all be found on
the warm side of the spectrum, providing the same light as less-
efficient bulbs.
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\10\ http://www.ftc.gov/opa/2010/06/lightbulbs.shtm
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At DOE, we will work with partners to provide accurate and
consumer-friendly information through our website, public service
announcements, and other media. California began the transition to
energy-saving lighting in January 2011, so DOE will analyze the State's
experience and will adopt best practices to help consumers become
comfortable with the national lighting transition. DOE also plans to
work with retailers and consumer groups to help them understand the new
standards and emphasis on lumens.
There is broad consensus support for the EISA standards within the
lighting industry, which continues to prepare to implement them. New
factories producing more efficient lighting choices have opened. Old
factories have been retrofitted to produce more efficient bulbs.
Further, should these standards be repealed by S.395, many states could
implement their own lighting standards. This could generate confusion
among consumers in the market and would force the lighting industry to
face a complex patchwork of different lighting standards in different
areas, leading to higher regulatory compliance costs. A uniform
national standard ensures a national market for efficient bulbs.
The EISA lighting standards may also provide incentives for
innovation and economic competitiveness. Over the past ten years,
portions of the lighting market have dramatically evolved, in part due
to lighting efficiency requirements. For example, linear fluorescent
lamp standards enacted by the Energy Policy Act of 2005, may have
contributed to the development of a larger market for higher-efficiency
alternatives. Since the enactment of EISA just three years ago, many
new halogen, CFL, and LED lamp products have appeared on the market,
providing consumers with even more choices in lighting. Over the past
20 years, CFL prices have decreased about 10 fold (approximately $20 in
1990 to $2.50 today).\11\ So companies are continuing to innovate and
raise the bar for energy efficient lighting while lowering costs, and
DOE believes the EISA standards play a part in that trend.
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\11\ http://www.energystar.gov/ia/products/downloads/CFL--Market--
Profile.pdf
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conclusion
In summary, S.398 contains provisions that represent industry,
advocate, and consumer consensus, that could streamline DOE's standard-
making process. S.395, on the other hand, could cost consumers and
manufacturers money and detrimentally affect the nation's economy,
energy security, and environmental imperatives.
DOE is continually working to seize the opportunities energy
efficiency offers, saving families and businesses money by saving
energy. There are many opportunities to further improve energy
efficiency in appliances and products that consumers and businesses use
every day. Therefore, the Department continues to strive to establish
cost-effective commercial and residential appliance standards. DOE is
constantly attempting to modernize, improve, and tailor the appliance
standards to respond to improvements in energy efficient technology,
while being responsive to legislative and regulatory requirements.
Thank you again for the opportunity to offer the Department's views
on these proposed pieces of legislation. I am happy to answer any
questions Committee Members may have.
Background: A Section by Section Description as Each Relates to the
Appliance Standards Program Activities
s.398--implementation of national consensus appliance agreements act of
2011
Sec 2. Energy Conservation Standards
(a) Multiple efficiency descriptors: This section amends the
definition of energy conservation standard to allow DOE to
consider multiple efficiency descriptors for the same product.
Currently, DOE does not have authority to regulate based on
multiple efficiency descriptors for many of its covered
products. The lack of such authority has prevented DOE from
responding positively to stakeholder requests for the use of
multiple efficiency descriptors. This provision would allow DOE
greater flexibility in the technical formulation of test
procedures and energy conservation standards.
(c) Regional standards for central air conditioners and heat
pumps: This section specifies regional standards through the
adoption of the consensus efficiency requirements for central
air conditioners and central air conditioning heat pumps.
(c) Standards for niche types of central air conditioners and
heat pumps (i.e., through-thewall and small duct high velocity
systems): This section implements the standard provided by
DOE's Office of Hearing and Appeals through exception relief
for throughthe-wall and small duct high velocity systems. In
the absence of legislation permanently adopting the efficiency
levels provided in the exception relief for these products or
other legislative change addressing anti-backsliding in this
context, DOE would not be able to consider amended energy
conservation standards for these product types because the
current Federal standards exceed the energy efficiency
potential of these products due to size constraint limitations.
This section provides a permanent solution to the current
exception relief and provides DOE with the potential
possibility of conducting a rulemaking in the future for these
products.
(e) Regional standards for furnaces: This section specifies
regional standards through the adoption of the consensus
efficiency requirements for oil-fired and weatherized
residential furnaces.
(f) Allowance for State building codes to exceed Federal
standards: This section provides a pathway for State buildings
codes to exceed Federal standards for certain types of products
and new construction applications. This section implements a
portion of the consensus agreement for residential furnaces and
central air conditioners and heat pumps, which sets these more
stringent levels as targets for building codes. Currently, DOE
cannot consider different standards for new and existing
construction either through building codes or Federal
standards. DOE analyses of energy efficiency standards in many
cases demonstrate that high efficiency products may be more
economically justified in new buildings compared with
replacement product applications. This is because some
efficiency technologies require not only changes in the
equipment itself but also in how the equipment is installed in
a building. Since whole-building standards can address both
equipment features and the building system within which they
operate, such codes can sometimes address the efficiency
improvements more economically than equipment standards alone.
Currently due to Federal preemption, building codes cannot take
advantage of such economically viable energy efficiency
opportunities because they cannot specify equipment standards
that are more stringent than Federal standards. Instead,
building codes can only specify more stringent requirements for
energy-efficient appliances as one pathway to meeting the
code's requirements, and an option to install appliances which
meet the national energy conservation standard levels must
remain available.
Sec. 3. Energy Conservation Standards for Heat Pump Pool Heaters.
This section provides DOE with the authority to regulate and sets
the initial test procedure and standard for heat pump pool heaters.
DOE's current regulatory program only includes gas heaters for pools
and spas. This section would expand DOE's authority to include a
comparable type of equipment for households in warmer climates and with
electricity-only energy supplies. It is unclear if this section would
apply to electric pool and spa heaters that do not utilize heat pump
technologies.
Sec. 4. GU-24 Base Lamps.
This section prohibits incandescent lamp designs for use with GU-24
sockets and prohibits the use of socket adaptors to convert a GU-24
socket to any other socket type. The GU-24 socket is a pin-based design
that is an alternative to the standard Edison socket that is commonly
used for incandescent bulbs. The GU-24 socket is commonly used with
certain designs of compact fluorescent lamps.
Sec. 5. Bottle-Type Water Dispensers, Commercial Food Holding Cabinets
and Portable Electric Spas.
This section adds bottle-type water dispensers, commercial food
holding cabinets and portable electric spas to the Appliance Standards
Program and establishes energy conservation standards for each product,
based on the existing standards adopted by the California Energy
Commission (CEC).
Sec. 6. Test Procedure Petition Process.
This section establishes a petition process where parties can
petition for a rulemaking to amend the existing test procedures.
Parties already have the right to petition for a rulemaking to amend
the existing test procedures, so this provision appears duplicative.
Sec. 7. Refrigerator-Freezer, Clothes Washer, and Clothes Dryer Test
Procedures.
This section requires DOE to finalize the amendments to the
refrigerator, refrigeratorfreezer and freezer test procedures DOE
proposed in December 2010 within 90 days of enactment of the
legislation. Additionally, this section requires DOE to publish an
amended test procedure for clothes dryers no later than 180 days of
enactment of the legislation, which is limited to considering
amendments resulting from the testing of dryers with automatic
termination controls. Lastly, this section requires DOE to publish an
amended test procedure for clothes washers.
Sec. 8. Credit for Energy Smart Appliances.
This section would require the Environmental Protection Agency
(EPA) to decide whether to update ENERGY STAR criteria to incorporate
smart grid and demand response features. While this provision may seem
to only affect EPA, EPA uses DOE's test procedures to administer the
ENERGY STAR program for many of DOE's regulatory products. This could
have a significant impact on DOE if amendments to these test procedures
are needed to support EPA in these efforts.
Sec. 9. Study on Video Game Consoles.
This section would require DOE to conduct a study on energy use and
opportunities for energy savings for video game consoles.
Sections. 10, 11, 13, 14 and 15. Refrigerator, Room Air Conditioner,
Clothes Dryer, Clothes Washer, and Dishwasher Standards.
These sections would adopt the consensus appliance standards
recommendations for certain types of home appliances.
Sec. 12.Water heater efficiency descriptor.
This section includes a provision, which would require the
Department of Energy to establish a uniform efficiency descriptor and
test method for covered water heaters by issuing a final rule no later
than 180 days after enactment. DOE's current regulatory program
establishes separate efficiency descriptors, test procedures, and
standards for covered residential and commercial water heaters based on
characteristics, such as rated storage volume and input ratings. This
bill would provide DOE with more flexibility as compared to the current
regulatory scheme for regulating different types of covered water
heaters (i.e., both residential and commercial) using the same metric
and test procedure.
Sec. 16. Petition for Amended Standard.
This section would require DOE to publish a final rule or
determination within three years of receipt of a petition for
rulemaking to amend an existing energy efficiency standard. This
requirement, if enacted, would add a seemingly unnecessary burden on
DOE, since it is already required to review standards every six years
to determine whether they warrant amendment.
Sec. 17. Prohibited Acts.
Currently, DOE's authority to enforce its energy and water
conservation standards is limited to manufacturers, including
importers, engaged in specific conduct. This provision would expand DOE
authority to include distributors, retailers, or private labelers in
addition to manufacturers and importers from offering for sale or to
distribute non-compliant products. This would give DOE more flexibility
in enforcing its regulatory program.
Sec 18. Outdoor Lighting.
This section would give DOE authority to set minimum efficiency
standards for additional types of commercial, industrial, and outdoor
lamps. Specifically, the section would establish minimum efficacy
standards for certain high-output double-ended quartz halogen lamps and
end production of general purpose mercury vapor lamps. Alternative
lighting options that meet these standards are commercially available.
These provisions are also consistent with the on-going DOE activities
to set efficiency standards for particular high intensity discharge
lamps and lamp ballasts.
Sec. 19. Standards for Commercial Furnaces.
This section would adopt and expand DOE's authority to include
additional prescriptive requirements for commercial furnaces.
Currently, commercial furnaces are only subject to energy efficiency
requirements because DOE does not have the authority to consider dual-
metrics for this type of equipment. Gas-fired and oil-fired furnaces
that meet the standards in this section are commercially available.
Sec. 20. Standards for Over the Counter, Self-Contained Medium
Temperature Commercial Refrigerators.
Over the counter, self-contained medium temperature commercial
refrigerators are those refrigerators that are used in retail
establishments to display fresh food products. Given the design of the
products, it is very difficult for them to meet the standards that are
scheduled to go into effect on January 1, 2012. Under current law, DOE
cannot recall these standards, as back-sliding is explicitly prohibited
by EPCA. This section of the legislation would adjust the Federal
standards for these certain types of commercial refrigeration equipment
to lower efficiency levels.
Sec. 21. Motor Assessment.
This section would require DOE to collect information on electric
motor manufacture, shipment and sales. The Census Bureau previously
collected this data, but it has since discontinued those efforts. This
task falls beyond the normal purview of the Energy Efficiency and
Renewable Energy Office, but the Energy Information Administration in
DOE may be capable of performing such assessment. Based on the
Assessment, DOE would be required to establish a national program to
increase awareness of motor efficiency.
Sec. 22. Study on Compliance with Standards.
This section would require DOE to conduct a study on manufacturer
compliance with energy efficiency standards.
Sec. 23. Study on Direct Current Electricity Supply.
This section would require DOE to conduct a study on the costs and
benefits of direct current electricity. This study would be the
responsibility of the Office of Electricity Reliability in DOE.
Sec. 24.Technical Corrections.
This section would make numerous technical corrections, many of
which DOE has identified as necessary, and none of which DOE identifies
as objectionable.
The Chairman. Thank you very much. Let me start with
questions.
Let me just alert members when we do get eight members here
as we hope we will shortly. We're going to just interrupt the
questioning to vote the issue of whether to close next
Tuesday's meeting of the committee related to cyber security.
I'll make a motion to do that because we're advised that much
of the information that will be presented at that meeting to
the committee has national security implications and we would
be well advised to have that as a closed meeting next Tuesday.
So we'll interrupt things to vote on that when and if we get 8
members.
But Ms. Hogan, let me ask you a couple of questions. Your
testimony makes some positive statements about the INCAA, as
you call it, S. 398. You say in your testimony that it would
provide regulatory certainty for industry, would reduce
litigation risk and that it contains provisions that could
streamline DOE standard making process.
I also though, pick up that you have not taken a formal
position on this legislation. Is it fair to say that the
Administration is supportive? Are you expecting to come out
with a formal position? What is the status on that?
Ms. Hogan. I believe it is fair to say that we are
generally supportive of this provision. But in terms of coming
out with a formal statement I will take that back and express
your interest in the Administration coming forward with that.
We would hope to provide that as soon as possible.
[The information referred to follows:]
Because many of the proposed standards in INCAAA overlap with DOE's
ongoing rulemakings, the Administration is unable to take a formal
position on this bill, as doing so would presuppose the result of DOE's
rulemakings. However, DOE and the Administration are both firmly
committed to the energy and money savings potential of appliance
standards in general. Further, DOE's initial analyses of these specific
standards indicate that they have the potential to save billions of
dollars while creating regulatory certainty for manufacturers
throughout the country.
The Chairman. In the point that you make about how this
legislation could streamline DOE's standard making process is
there any way to estimate savings that could be expected to
result from the streamlining either within the Department of
Energy or in industry or otherwise?
Ms. Hogan. Yes. We do see that there are opportunities for
streamlining due to some of the provisions in this bill. We
have not yet developed such an estimate. But with your interest
we would be happy to work on such an estimate and get back to
you on that.
[The information referred to follows:]
Several of the appliance standards in INCAAA are currently being
worked on by DOE in its ongoing standards and test procedure
rulemakings. The passage of INCAAA would therefore streamline the
creation of these standards, reducing the amount of time, money, and
resources that DOE would need to devote to bring these standards to
market. This would enable DOE to shift those resources to other
activities, providing more bang for the taxpayers' buck. The exact
amount of savings that would result from streamlining these standards
is difficult to quantify, however, since it depends in large part on
the timing of INCAAA's passage. All of DOE's work on these standards
will be completed by June 30, so if INCAAA was passed in the next few
weeks, it would save up to two months or more of work on these
standards. Even if INCAAA were passed after June 30, it would still
speed up the timeline to implement these standards, enabling consumers
to realize energy savings sooner.
The Chairman. OK.
Your point about S. 395, the BULB Act and the effect it
would have. Now my understanding is California has adopted
standards related to lighting, light bulbs, but that those are
not currently in effect because of the Federal law that we have
passed. Am I right in assuming that if we repeal the Federal
law than the California standards would once again be in
effect? Is that your understanding of how it would work?
Ms. Hogan. Actually the California standard is in effect as
we speak. They are leading the rest of the Nation by about a
year. But there is language in EISA 2007 that preempts other
States from going forward with their own standards once a
national standard take effect and as the national standard in
EISA 2007 rolls in it would quickly align with the California
standard.
So I think the bottom line is if these provisions from EISA
2007 are repealed it will give other States the opportunity to
follow in California's footsteps. If we look to the past decade
or so what we see is that many, many times when California has
gone forth and set a standard many other States followed in
California's footsteps, creating a patchwork of markets across
our country. I think as we all think back to the genesis of the
appliance standards program to begin with, that's really one of
the reasons folk all come together around national standards is
to avoid such a patchwork of markets.
The Chairman. Alright.
Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman.
Ms. Hogan, welcome. Thank you for your testimony.
You had mentioned in your comments that there are several
DOE rules that are under development and you have an overlap
situation with the consensus standards that are contained in
INCAA. When do you expect these standards to be finished?
Ms. Hogan. Many of the standards that we are working on
where there is overlap we have deadlines this summer that we
are working aggressively to meet.
Senator Murkowski. OK. In the process of implementation of
a standard, how long does something like this take?
Ms. Hogan. The process of developing a standard is a
lengthy undertaking because we have to go through the process
of doing all the technical work and working with the private
sector to make sure we have the best available technical
information upon which to create a standard. It can start with
the development figuring out how you measure the energy
consumption of a product, and how to test on an apples to
apples basis. Frequently we need to develop the test procedure
first and then go and have a good discussion about where to set
the levels that deliver the greatest savings to consumers.
So that can be a 2-year or so process depending on where we
start and what type of information is available in the
marketplace when we take on a rulemaking process.
Senator Murkowski. Do we have any idea then as to the cost
that would be associated as you try to implement the standards
over a several year process----
Ms. Hogan. In terms of our efforts to develop standards
the--we can develop those estimates. It can vary a little bit
by product category and the technical complexity. But we would
be happy to develop some of those numbers for you and show you
that range.
[The information referred to follows:]
The costs to DOE and outside parties of implementing appliance
standards varies according to the number of stakeholders, the
complexity of the standard, and the length of negotiations. As an
example, the water heater rulemaking for amended standards published in
April of 2010 cost $5 million for DOE to complete. Estimates indicate
that outside parties may have to spend up to $95 million on conversion
costs to comply with the water heater standard. In comparison, the
standard was estimated to save 2.58 quads of energy and save consumers
$1.39 billion, using a discount rate of 7 percent, and $8.67 billion,
using a discount rate of 3 percent, over a 30 year period.
Senator Murkowski. I think it would be, particularly at a
time when we're all focused on what's going on with cost, but
not only the cost within the Department of Energy but the cost
to outside parties. If we could have some kind of an assessment
of that I think it would be helpful.
Let me ask you: as it relates to the BULB Act, there is a
great deal of discussion about what the 2007 Act really meant
or required. People are wondering whether or not the standards
contained in EISA 2007 really are a ban on their ability to
purchase or to use the incandescent light bulbs within their
own home.
Ms. Hogan. Yes. EISA 2007 sets performance levels for bulbs
that requires these bulbs to be 30 percent more efficient than
some of the bulbs we're using today. I think it's very
important to say that what that means when you set a
performance level is that any technology can come forward, any
type of bulb, and meet those levels.
So as we look at what is on the marketplace today we see
that there are variety of bulbs that do indeed meet these
levels. There's new, improved incandescents. There are the
CFLs. Then something that's very exciting at the Department of
Energy is the growing number of LEDs with rapidly reducing
prices for those bulbs as well.
So I think we do see that some people believe that this
bill is a ban on the traditional incandescent. It's not a ban.
What it is doing is setting performance levels to help
consumers save 30 percent or more on their home lighting,
offering substantial savings on the order of $50 or so a
household, and really offering them better bulbs that can save
them money.
Senator Murkowski. Of course as you know the concern out
there is that you're going to have Department of Energy come
knocking on your door and say I want to inspect your lights
because I want to see if you're in compliance with EISA 2007.
I'd like to think that we would never get to that point. But I
think it is important to understand what it is that EISA 2007
requires or doesn't require.
One more question then on the overlapping rulemaking
situation that we're in right now. If somehow this bill is
signed into law before the rulemaking is finished what happens
with the overlapping rulemaking? Where are we?
Ms. Hogan. Clearly if a bill is signed into law that
becomes the law of the Nation.
Senator Murkowski. So do we just abandon what you have been
putting in place with the rulemaking?
Ms. Hogan. I think what we have as we've all worked
together on these rulemakings is we all benefit from the work
that has been done throughout that process. There's a multiyear
process in the development of these rulemakings in which we've
developed some of the information that will continue to be used
on our part.
We certainly have been engaging with stakeholders around
this. Some of this information has been used as part of an
informational foundation in the consensus rulemaking process.
So I guess I don't want to use the word abandon because I think
what you see is all of the parties working together to get the
best information on the table. What you see is some of that put
forth in the consensus recommendation that you have before you
and clearly if the bill gets signed into law that will become
the law of the Nation going forward.
Senator Murkowski. Thank you, Mr. Chairman.
The Chairman. Senator Manchin.
Senator Manchin. Thank you, Mr. Chairman.
Thank you very much for your presentation. I noticed in
times of recession that we're in right now and in my State of
West Virginia and people are struggling like they are all over
the country. The difference of the cost, the upfront costs,
let's say 50 cents versus a $1.50.
Is there anything that you are doing to make sure that the
people really understand what the savings are? Putting an
effort forward on that? Any type of programs that might help
them be able to transition and get the long term savings?
Because sometimes what you have in your pocket and saying
that down the road, the life of that bulb, you're going to
really save money. That's not the reality. They need it on the
front end or some help or assistance before we just mandate
everybody. It's either that or no lights at all. I'm anxious to
hear what you have to say about that if you all.
Ms. Hogan. Certainly there are programs around the country
that are helping advance efficient lighting. Utilities in many
States and other programs have been offering different types of
programs to get efficient lighting in the hands of consumers.
But I do think it's important to think about the savings that
these bulbs offer.
I think the numbers that you were just quoting really apply
to the better incandescent that is now on the marketplace. It
is a little bit over a dollar additional upfront cost. But the
savings that that consumer will get also add up to more than a
dollar even in the first year.
Senator Manchin. I think what I would be saying is there a
transition period? Is there any help on the front end as people
we're trying get them to understand that? But it's still money
out of their pocket. Will there be any type of transition at
first like for 6 months or 90 days or any of that? Do you know
anything the government is planning on doing if the bill takes
effect and people are mandated to buy the new bulbs?
Ms. Hogan. We certainly don't have any authorization to go
out and provide financial assistance to homeowners. But we do
do a lot of work with the utilities and the other organizations
that are providing various programs to help reduce the cost of
the more efficient bulbs.
Senator Manchin. The other thing is that I know everything
we're talking about is downstream improvements, more
efficiently whether it be appliances or bulbs and this thing
and these types of things. Have we talked about or have you all
put as much effort toward the upstream? Give you an example on
the power plants. Coal fired power plants 34 percent
efficiencies.
What are you doing on that end because that's where the
real big money is? The savings would be for our energy and the
cost to all of our citizens who depend on these types of energy
supplies. But basically we have outdated or outmoded, if you
will, technology that's not supplying the most efficient.
Ms. Hogan. I think when you look at the energy efficiency
space and all that energy efficiency offers this country in
terms of what is cost effective, there's tremendous opportunity
in our homes, in our businesses and in our factories. Then
you're right there are also opportunities in transmission and
distribution and in our power plants.
The Department of Energy really is working comprehensively
across all of those areas of opportunity to first demonstrate
currently available technologies but then also to advance
cutting-edge technologies, so we have even better solutions
tomorrow.
Senator Manchin. I don't see the effort being put forth on
the real high end which would be the utilities, if you will and
in my State the coal fired plants that need to be retrofitted.
They need to be updated and upgraded. The efficiencies that we
have there and loss of energy that we have that could be
tremendously important for the security of our Nation.
I know that working on the downstream end of it and light
bulbs and refrigerators are great. But if the plant that's
providing the electricity is running at only 34 percent
efficient, that doesn't make sense. It seems like you put more
of your energy toward that.
Ms. Hogan. I think we have a comprehensive program. Then in
addition to that I think another area where we are highly
focused is with combined heat and power where you can raise the
conversion efficiencies because of doing the power and the heat
together up to 60-70 percent. So we are trying to find all of
those opportunities.
Senator Manchin. If you all could I would just finish on
this. If I can meet with someone in the Department of Energy to
see basically what you are doing on that end of it which is the
downstream end. I mean, the upstream end, not just the
downstream end. So if someone could help me on the upstream
what they are putting forth and what efforts are being put
forth. OK?
Ms. Hogan. Terrific.
Senator Manchin. Thank you.
The Chairman. Let me see here.
Senator Burr.
Senator Burr. Dr. Hogan, welcome. Thank you for your
testimony.
Let me ask you is there an energy standard that California
doesn't separate themselves from the rest of the country today?
[Laughter.]
Senator Burr. I believe I know the answer. But should we
just accept everything California does? Is that the Department
of Energy's position?
Ms. Hogan. That is not the Department of Energy's position
that we should just----
Senator Burr. But that brings relevance to this committee I
think. I mean, let me ask you. Is there a cost benefit analysis
that's required in rulemaking?
Ms. Hogan. There absolutely is a cost benefit analysis that
is required in every appliance standards rulemaking.
Senator Burr. Tell me what the environmental cost is of
improper disposal of mercury bulbs. I'm sure that's something
that went into the equation.
Ms. Hogan. First of all this standard that we are talking
about here is a standard that was put forth by a bipartisan
bill.
Senator Burr. I realize that. But what is the cost of
improper disposal of mercury bulbs?
Ms. Hogan. First what we are doing is educating people on
the proper disposal of mercury bulbs. I think it's also
important to look at the fact that this appliance standard,
this light bulb standard, doesn't mandate CFLs and the use of
the bulbs that have that tiny amount of mercury in them.
Senator Burr. I realize that. But--and I realize the
statement that you made that bulbs that are traditional bulbs
are not going to go away. Now manufacturers are going to make
decisions based upon where consumers are herded to go.
Eventually that will mean less of a product if in fact
there's a tax credit that affects it or there's policies that
suggest that it's more advantageous to produce or consumers
like me find that there's an energy savings. I've converted
every bulb in my house. As a Member of Congress I have
absolutely no idea how to dispose of the mercury bulb.
I wouldn't know where to take it. I'm going to throw it in
the trash. Environmentally that's not good, is it?
Ms. Hogan. Let's also talk about mercury more generally.
Because I think we're focusing in on CFLs in particular. I
think as we look across the environment that what we currently
see is that more mercury is put into our environment by the
electricity that we generate than the mercury that is in the
CFL bulbs.
Where we are is we do not live in a perfect world. We are
trying to figure out how to help save energy through these
better bulbs. As we provide the information to consumers that
they need about proper disposal I think we will be able to be
successful on that front for the consumers that are interested
in using the CFL bulb.
I think the other thing that's great to see across the
country right now is many of the national retailers stepping up
and doing education on their own, and being disposal locations
for these mercury bulbs. So many of the major retailers are
saying bring them back here. Just put them in the box as you
come back to buy your next bulb.
Senator Burr. You talked about in your answers I think to
Senator Murkowski about the timeline for rulemaking. It was
lengthy because of consultation with interested parties. It
came to my attention that over the last year new efficiency
standards and certification requirements for commercial food
equipment and specifically commercial refrigeration and
freezers in which commercial food equipment manufacturers--the
manufacturing community had not been fully involved or
consulted in the rulemaking process, the standards and the
regulatory process to the degree that residential product
manufacturers had been.
Am I accurate?
Ms. Hogan. I'm not aware of that issue. I'm happy to go
back and look at that. We have----
Senator Burr. Do you separate commercial from consumer
manufacturers----
Ms. Hogan. No we have a standard process and set of
procedures that we go through.
Senator Burr. A rule upgrading standards was published last
month with 120 days given for the industry transition. You
know, it sort of gets at what Governor Manchin was talking
about. There's got to be some consideration, not just
consultation and I ask you to look at that very closely, some
consideration as to how quickly an industry can make a
transition.
We can set a standard that on paper looks great and in
reality we could get there but the cost to consumers in this
country could be outrageous. I, for one, believe that it's the
responsibility of those of us who serve here to consider the
consumer impact of all the rulemaking that you make. To hold
your feet to the fire to make sure that a full cost benefit
analysis has been done and that from a long term policy this
committee set the national standard and not California.
Thank you.
Ms. Hogan. Thank you. Certainly we will go back and look at
that because we do try to take all of that into account in our
rulemaking processes. We're very aware of the cost to
manufacturers and their need to transition and retool their
facilities.
The Chairman. I would just mention that we are, this
committee, is setting a standard in one sense of that phrase by
having all these LED lights. We're the first committee in the
Congress to have totally redone our committee room to use LED
lighting. This is all American made LED lighting which should
be good news to you, Senator----
Senator Burr. Probably made in North Carolina.
The Chairman. Very possibly. Very possibly.
[Laughter.]
The Chairman. Senator Coons.
Senator Coons. Thank you, Mr. Chairman for the illuminating
comments. Thank you, Ms. Hogan for the opportunity to be with
you today. I well remember service on the Energy Efficiency
work group of our Governor's Energy task force and how eye
opening it was to me to first realize just what enormous
benefits energy efficiency can achieve for industry and for all
of us.
I'll start simply by commenting that I'm hopeful we will
move quickly through consideration of INCAA. The idea that over
$40 billion in savings to consumers can be realized over the
next 20 years with a consensus standard that was negotiated by
industry, manufacturers, advocates, consumer representatives,
is very encouraging to me. I do take seriously the concerns
raised by Senator Burr and others and these conversations need
to be as broad reaching and collaborative as possible. But I do
think it's a great thing. For us to be doing something
constructive in a bipartisan way in this Congress is
encouraging to me as well.
But let me if I might move to the BULB Act and some of the
BULB related questions. Am I correct in understanding that all
3 of the major current incandescent manufacturers, GE, Phillips
and Sylvania are already manufacturing high efficiency
incandescent bulbs, the halogen bulbs? They're already
available in the marketplace. The implementation of the
standards that were passed in 2007 will not mandate CFLs will
not end availability of incandescent bulbs in any way.
Ms. Hogan. That is my understanding.
Senator Coons. If you could talk about some of the
positives. My impression is that quite a few of these companies
have made new investments in the United States. They have
invested in new manufacturing facilities. There's been
innovation in terms of new developments of exactly the types
I'm pointing to in part in response to these higher efficiency
standards for bulbs.
Ms. Hogan. Yes. I think standards really do a number of
things for this country in the area of the products that we use
every day. They do help people save money. They give
manufacturers certainty in terms of what they should be
shooting for. They create these national markets as we
discussed which gives them, again, greater clarity on what the
market looks like. It does help drive innovation.
I think there's a wonderful example in refrigerators in
this country. They now use 75 percent less energy than they did
as of 30 years ago. They are bigger and offer many more
services for the American consumer.
It's just a terrific story. I think when you line up that
innovation with standards programs you do see that standards
help to drive a lot of that innovation. When you look at
lighting and the types of bulbs that are now on the market, the
better bulbs, the halogen incandescents, the CFLs and then
truly the upcoming LEDs, you see that again, there's sort of a
wealth of innovation happening on the light bulb front.
We also are seeing new jobs and new plants being stood up
or expanded here in the United States behind these bulbs.
There's a new manufacturing facility in Ohio for CFLs and newer
expanded facilities in North Carolina and Florida for LEDs. So
we think this is just a good story for this country.
Senator Coons. There's also some close to me in
Pennsylvania as well as in Ohio. So I mean if I hear you right
the impact of the existing standards is--it is propelling
investment, innovation, new manufacturing capacity, reduces
cost for consumers. But there are some education challenges.
As Senator Burr illustrated some consumers who have already
moved to CFLs need to better understand how to dispose of them,
myself included. There are some legitimate concerns about
mercury from CFLs. The light quality hasn't met expectations.
But the LEDs in this very room and the incandescent bulb
that I suspect may be demonstrated by the next panel exceed the
current lighting standards and light quality of CFLs. So my
hope is that we will reject the BULB Act and continue to move
forward in an environment where these higher efficiency
standards are actually leading to consumer savings, investment
and new jobs.
Thank you for your testimony today, Ms. Hogan.
The Chairman. Senator Paul.
Senator Paul. Thank you, Mr. Chairman. Thank you, Ms. Hogan
for coming over today and for your testimony.
I was wondering if you're pro choice?
Ms. Hogan. I'm pro choice on bulbs.
Senator Paul. Actually that's the point. The point is is
that most members of your Administration probably would be
frank and characterize themselves and upfront characterize
themselves as being pro choice for abortion. But you're really
anti choice on every other consumer item that you've listed
here including light bulbs, refrigerators, toilets. You name
it.
You can't go around your house without being told what to
buy. You restrict my purchases. You don't care about my
choices. You don't care about the consumer frankly.
You raised the cost of all the items with all your rules,
all your notions that you know what's best for me. Frankly, my
toilets don't work in my house. I blame you and people like you
who want to tell me what I can install in my house, what I can
do.
You restrict my choices. There is hypocrisy that goes on on
people who claim to believe in some choices but don't want to
let the consumer decide what they can buy and install in their
house. I find it insulting.
I find it insulting that a lot of these products that
you're going to make us buy. You won't let us buy what we want
to buy. You take away our choices. These things you want us to
buy are often made in foreign countries. You ship jobs
overseas. The same thing that your Administration claims to be
in favor of, you're shipping our jobs overseas, Miss. We can't
make these items here.
I find it really an affront to the sensibility of the idea
and notion of the free marketplace, of capitalism, of freedom
of choice. Now it's not that I'm against conservation. I'm all
for energy conservation.
But I wish you would come here to extol me, to cajole, to
encourage, to try to convince me that it would be a good idea
to conserve energy. But you come instead with fines, threats of
jail. You put people out of business who want to make products
that you don't like.
This is what your energy efficiency standards are. Put it--
really call it what it is. Call it what it is. You prevent
people from making things that consumers want.
I find it really appalling and hypocritical. I think there
should be some self examination from the Administration on the
idea that you favor a women's right to an abortion. But you
don't favor a woman or a man's right to choice what kind of
light bulb, what kind of dishwasher, what kind of washing
machine.
I really find it troubling this busy body nature that you
want to come into my house, my bathroom, my bedroom, my
kitchen, my laundry room. I just really find it insulting. I
find that all of the arguments for energy efficiency, you're
exactly right. We should conserve energy. But why not do it in
a voluntary way. Why not do it where you threaten to fine me or
put me in jail if I don't accept your opinion.
In America we believe in trying to convince our neighbors,
but not trying to convince them to the force of law. I find
this antithetical to the American way. I'd appreciate your
response.
Ms. Hogan. OK. So I have, I guess, a couple of responses to
that.
One, I think the appliance standards program is an example
of really a great partnership between the Congress and the
Administration over many, many, many years. So much of what we
are implementing really had its genesis in bipartisan bills
that have been put forth at a number of different points over
the history of this country for the last 30 to 40 years.
Senator Paul. But you restrict our choices, correct?
Ms. Hogan. I really do not believe that the appliance
standards end up restricting personal choice. I think the
appliance----
Senator Paul. I can't buy the old light bulbs. That
restricts my choice on buying.
Ms. Hogan. My view is what you want is lighting, right?
What----
Senator Paul. I can't buy a toilet that works.
Ms. Hogan. I can help you find a toilet that works.
[Laughter.]
Senator Paul. Are you going to pay for it? Everything costs
more to go back and retrofit the toilets that don't work that
no bureaucrat understood or flushed before they made us use
them costs money. It will cost thousands of dollars to go back
and add some kind of jet stream to the toilets in my--we don't
even save money. We flush them ten times. They don't work.
But the thing is you busy bodies always want to do
something to tell us how we can live our lives better. Keep it
to yourselves. Try to convince us through persuasion, but don't
threaten to put us in jail or put us out of business if we
don't accept your way of thinking.
The Chairman. Were you asking for another response or
should I go ahead with my question?
[Laughter.]
Senator Paul. I was kind of just enjoying. I've been
waiting for 20 years to talk about how bad these toilets are
and this is a good excuse today. Thanks.
The Chairman. I'm sorry about your toilet.
[Laughter.]
The Chairman. Let me just clarify for myself.
One issue here is the 10th amendment. Under the 10th
amendment States have the ability to set standards such as the
standards we're talking about. Some of them are doing it. Have
done it in the past.
The question is is the Federal Government going to step in
and set national standards or are we going to have a patchwork
of standards which manufacturers have to deal with? Try to sell
a different light bulb into California then they sell into
Nevada then they sell into Virginia? Am I right that that's one
of the impetuses for what--and I would also clarify that this
is not something that you, the Administration is forcing on us.
This is something we, the Congress, over the last several
decades and previous Administrations have endorsed and have
enacted into law. The Department of Energy is implementing the
law. That's my understanding of the situation.
Do you have any comment on either of those points?
Ms. Hogan. No. Those are 2 very good points. Let's go back
to why do we have appliance standards in this country?
It is exactly as Senator Bingaman outlines. You know, the
first set of standards and the first standards law that were
implemented in this country were the result of people,
stakeholders, the manufacturers and others coming together
saying that they see greater value in national markets as
opposed to having a patchwork approach State by State by State.
Then that's what created the framework for the appliance
standards, the processes were outlined about doing cost benefit
analyses so that you would establish these minimums that would
deliver significant savings to American consumers and
businesses. It was agreed to be a good public policy to be able
to raise the minimum standards for some of these products where
you could deliver substantial savings to the American public
both in their homes and in their businesses.
I hate to bring the subject up again, but the toilets, in
particular, were put forth in legislation in 1992. Again, I
believe that was promoted by the plumbers and others or the
manufacturers of the plumbing equipment. They're the ones that
brought that forward. That's what we've been implementing to
date.
I think what you do see, again, with the putting forth of
these standards is you do see technological innovation. Many of
the products that are out there on the market today really do
deliver on the features and the performance that people are
looking for in their homes. Your point about can we do this
voluntarily?
We are doing this voluntarily as well. There are a number
of voluntary programs to help people find the extra efficient
products that are out there or the extra water saving products
that are out there and roll in performance requirements to
those as well so consumers can really find high performing
products that save them money.
The Chairman. I jumped ahead and asked questions before all
others had had a chance to. Senator Lee was here before and
then Senator Shaheen has come in. But let me call on Senator
Lee for his questions and then Senator Shaheen.
Senator Lee. I'm going to pass.
The Chairman. Senator Shaheen.
Senator Shaheen. Thank you, Mr. Chairman. I'm sorry that my
colleague, Senator Paul is leaving because I actually----
Unknown speaker 1: Come on back, Rand. Come on back.
[Laughter.]
Senator Shaheen. Come on in. I certainly appreciate your
frustration, Senator Paul. I share it in some ways.
But I think it behooves us all not to engage in name
calling of those officials who are trying to carry out the
work, that as the chairman has so well pointed out, Congress
has asked them to do. Now as Congress we're going to change
those policies. You know, we have the ability to do that.
But I think we have officials who are trying to do the best
job they can. It's not helpful for any of us to engage in name
calling. I would just point out that our dependence, at least
in the Northeast on foreign oil and fossil fuels for our
electricity has severely limited our choices. I'm happy to have
the option to have some other choices that reduce our
electricity use in a way that gives me the ability to make
other decisions.
I mean, the fact is our light bulbs, our current, old
incandescent light bulbs are the most inefficient, one of the
most inefficient appliances we have in our homes. They waste
about 80 percent of our energy. So I think it's helpful to have
an alternative that's better.
Ms. Hogan, I would like to go back to energy efficiency, if
I can because I know that the President has talked about a
clean energy standard. That energy standard has not included
energy efficiency as part of that energy standard. Given that
energy efficiency is part of your bailiwick. It's the cheapest,
fastest way to use energy.
Can you speak to why energy efficiency wasn't included or
hasn't been talked about as part of clean energy standard and
where the appropriate role of energy efficiency ought to be in
that kind of a standard?
Ms. Hogan. Yes. I can certainly get back to you on that
topic.
[The information referred to follows:]
The Administration believes that the clean energy standard should
be paired with robust energy efficiency measures and has stated so
explicitly in its proposed principles. The question is not really
whether to consider efficiency, but how to best design a policy that
achieves this goal. To date, discussions have focused on two discrete
areas where relatively simple policy additions could have considerable
impact, namely complementary appliance standards and crediting for end
use generation that includes an energy efficiency component, like
combined heat and power. This is still very much an active discussion,
and we would welcome the opportunity to discuss options with members of
this Committee and other interested Congressional offices.
Ms. Hogan. Certainly the Administration is supportive of
renewable energy in the clean energy standard and is supportive
of energy efficiency. I think it's a question as to does the
efficiency belong in the clean energy standard or does it
belong as a set of complimentary measures that we believe will
deliver the savings that are there to be achieved?
Senator Shaheen. So if we were going to go forward and try
and include energy efficiency as part of a clean energy
standard how would you suggest we do that? Do we need to
persuade the President, the Administration, you and the
Department of Energy that that's something we should do?
Ms. Hogan. Clearly we are having discussions about the pros
and cons of these different approaches and the pros and cons of
setting targets at different levels associated with the clean
energy standard.
Senator Shaheen. Can you talk about whether you see a role
for combined heat and power and waste heat recovery systems in
a clean energy standard?
Ms. Hogan. We are very supportive of combined heat and
power and waste heat recovery. As you know some of these issues
come down to how you can measure and credit the energy savings
from increased efficiency. We want to have a robust clean
energy standard. We want to be able to include those types of
things as we work on those technical issues.
Senator Shaheen. In addition to appliance standards what
are other areas where we should be focusing on in terms of
energy efficiency gains to achieve the greatest savings?
Ms. Hogan. We have a pretty robust slate right now of
appliance standards that we are working on to actually
implement the standards we've been asked to implement by
Congress. So we are working aggressively to meet a set of
deadlines this June as well as deadlines that we have this
coming December and through the calendar year 2012 and 2013.
Senator Shaheen. Maybe I wasn't clear in the way I asked my
question. Are there particular areas as you're looking at
energy efficiency whether it's transportation or utilities
where you think there are the most savings to be gained.
Obviously appliance standards is one of those.
Ms. Hogan. Oh.
Senator Shaheen. But where are some of the other areas?
Ms. Hogan. Oh, I'm sorry. I thought you were talking
specifically about the appliance standards program.
No, as we look at the energy efficiency space, clearly the
appliance standards program offers significant savings for this
country. The other places where there are very good
opportunities to make additional progress include new
construction, building codes. So we are doing a lot of work on
building codes. This includes the retrofit of our existing
homes and the retrofit of our commercial buildings. We are
rolling out and working on aggressive programs in each of those
areas.
I think you may be familiar with our Better Buildings
program on the residential side where we're working to
demonstrate new deployment models that we think can retrofit
homes in a deep way offering 20 percent savings or more per
household. We're also demonstrating business models that will
be replicable across the country and that we are investing in
through some of our Recovery Act dollars. We're very excited
about the progress being made there.
We also believe there is tremendous opportunity in the
commercial building space. You probably saw in our 2012 budget
that was sent to the Hill we would like to take many of the
lessons learned from our Better Buildings residential program
and be able to apply them to the commercial buildings area.
There's a number of programs we outlined there that we think
put the right seeds in place to achieve something like a 20
percent savings in commercial building energy in that sector.
I think it's important to remember that appliance standards
can impact the products we go to the store to buy. But to get
at the insulation, the building envelope, some of those things
that you need to go through contractors and other networks to
get at, we do need other approaches. That is what we're trying
to get at with our Better Buildings Initiative.
Senator Shaheen. Thank you.
The Chairman. Senator Murkowski, did you have additional
questions of Ms. Hogan?
Thank you very much for your testimony. We will allow you
to leave and we'll call the second panel forward.
Our second panel is--let me go through the names as they're
coming forward and taking their seats.
Mr. Steve Nadel, who is the Executive Director of the
American Council for an Energy-Efficient Economy.
Mr. Joseph McGuire, President of the Association of Home
Appliance Manufacturers.
Mr. Stephen Yurek, who is the President and Chief Executive
Officer with the Air-Conditioning, Heating, and Refrigeration
Institute.
Mr. Kyle Pitsor, who is Vice President of Government
Relations with the National Electrical Manufacturers
Association.
Dr. Mark Cooper, who is Director of Research with Consumer
Federation of America.
Mr. Howard Brandston, who is a lighting consultant from
Hollowville, New York.
Thank you all very much for being here.
If each of you could take about 5 minutes and make the main
points that you would like us to try to understand. Then of
course, we will include in the record your entire written
statement, but if you could give us about a 5-minute summary of
the main points that would be great. Then after you've all
completed your testimony we will have some questions.
Mr. Nadel, go right ahead.
STATEMENT OF STEVE NADEL, EXECUTIVE DIRECTOR, AMERICAN COUNCIL
FOR AN ENERGY-EFFICIENT ECONOMY
Mr. Nadel. Thank you, Senator Bingaman, Senator Murkowski.
I appreciate the opportunity to testify here today.
Our organization has worked on appliance standards for a
long time since the 1980s. The Federal standards program has a
long history of bipartisan support. The first Federal standards
were established in the National Appliance Energy Conservation
Act of 1987 which was signed by President Reagan. Additional
standards were assigned by President Reagan in 1988, President
George H. W. Bush in 1992 and President George W. Bush in 2005
and 2007.
Minimum efficiency standards have been adopted in order to
address market failures and barriers, replace a patchwork of
State standards, save consumers money, reduce energy use and
peak demand. We've talked before about the patchwork of State
standards and how Federal standards can replace them and have
uniform national standards. In addition, in my written
testimony I include a lot of discussion about some of the
market barriers that make it difficult for consumers often to
purchase those efficient products.
In particular these standards such as in the case of the
lamp standards have increased availability and increased
consumer choice of efficient products. There are new products
now available that wouldn't be available because of the
standard. So they can increase consumer choice. They don't just
take choices away.
My organization estimates that without these standards U.S.
energy use last year in 2010 would have been about 3 percent
higher than it was and U.S. electricity use would have been
about 7 percent higher. These really made a significant impact
on our energy use. The standards that have already been enacted
will save consumers and businesses more than $300 billion by
2030. That's just the existing standards.
We also did an analysis in January looking at the impacts
of investments in efficient products and the reinvestment of
the energy bill savings that people achieve. We estimate that
last year in 2010 these standards created a net 340,000 jobs in
the U.S. Clearly we need more jobs but they made a positive
contribution.
Turning now to the 2 bills before us.
S. 398, the INCAA bill, we are strongly in support of this
bill. This contains a variety of consensus proposals negotiated
between product manufacturers, efficiency groups such as ours,
environmental and consumers groups and States. They do have
consensus. We were able to work on many creative ways to save a
lot of energy but have wide consumer choice and minimal impacts
on manufacturers.
As you noted all of these provisions were almost passed
last Congress. This committee has reported them out. We hope
that you can do so again.
We estimate that the S. 398, the INCAA bill will save the
Nation nearly 150 trillion BTUs of energy by 2030 which is
enough to serve the energy needs of 4.6 million average
American households.
We estimate that this bill will result in net consumer and
business savings of $43 billion by 2030.
Will reduce peak electric demand by more than 20,000
megawatts which is equivalent to 68 typical 300 megawatt power
plants.
Turning now to the BULB bill.
We urge that this bill be rejected as I think this bill has
been improperly marketed or based on a misunderstanding that
will ban incandescent lights. In fact there are several types
of incandescent lights that will meet the standard.
For example, here I have a 70 watt bulb. It's an
incandescent bulb. It will meet the standard.
Over there you see a poster. All 3 major manufacturers are
now selling these bulbs in California. I mention California
because their standard takes effect 1 year earlier so they're
also there. My understanding is that the manufacturers are
introducing them this spring in terms of nationwide.
I would also point out that the BULB bill doesn't just do
away with the incandescent lamp standard but also would repeal
standards on reflector lamps, metal halide lamps. It would get
rid of a Federal program to improve efficiency in Federal
facilities. It would also do away with labeling on televisions
and other electronic products all of which were part of the
same provision of EISA that this law wants to repeal.
In addition I would note that if we were to repeal those
provisions based on our estimates of EISA. We'd be using an
extra 72 billion kilowatt hours of electricity annually which
is enough to serve 6.6 million American households. We'd need
an extra 10,000 megawatts of power plants to meet that extra
power.
I think as Assistant Secretary Hogan mentioned the savings
from these standards that effectively BULB would repeal amount
to about $50 per American household or a total of about $7
billion annually. These are annual savings. So very significant
benefits would be lost for not much gain because there are a
wide variety of products that would meet that.
With that I will conclude my testimony.
[The prepared statement of Mr. Nadel follows:]
Prepared Statement of Steve Nadel, Executive Director, American Council
for an Energy-Efficient Economy
summary
The federal standards program has a long history of bipartisan
support. The original law establishing an appliance standards program
was enacted under President Ford in response to the 1970's energy
crisis. The first federal standards were established in the National
Appliance Energy Conservation Act of 1987, signed by President Reagan.
Additional standards were added in bills signed by Presidents Reagan,
George H.W. Bush, and George W. Bush (two laws).
Minimum efficiency standards have been adopted in order to address
market failures and barriers, replace a patchwork of state standards,
save consumers money, and reduce energy use and peak electrical demand.
Standards remove inefficient products from the market but still leave
consumers with a full range of products and features to choose among.
Standards commonly increase consumer choice by increasing availability
of efficient, moderate-cost products.
My organization, the American Council for an Energy-Efficient
Economy (ACEEE), estimates that without these standards and subsequent
DOE rulemakings, U.S. 2010 electricity use and peak electric demand
would have been about 7% higher and U.S. total energy use about 3%
higher. Net savings to consumers from standards already adopted will
exceed $300 billion by 2030.\1\ As a result of these savings, we
estimate that in 2010 the appliance standards program generated 340,000
net jobs in the U.S.\2\ The majority of these standards have been set
by Congress, based on consensus agreements between manufacturers and
energy efficiency advocates.
---------------------------------------------------------------------------
\1\ Max Neubauer, Andrew Delaski, Marianne Dimascio, and Steve
Nadel. 2009. Ka-BOOM! The Power of Appliance Standards: Opportunities
for New Federal Appliance and Equipment Standards. Washington, DC:
American Council for an Energy-Efficient Economy.
\2\ Gold, R., S. Nadel and S. Laitner. 2011. Appliance and
Equipment Efficiency Standards: A Money Maker and Job Creator.
Washington, DC: American Council for an Energy-Efficient Economy.
---------------------------------------------------------------------------
S. 398, the Implementation of Consensus Appliance Standards
Agreement Act (INCAAA), contains a variety of consensus proposals
negotiated between product manufacturers, ACEEE, and other efficiency
supporters, including consumer and environmental groups. These
negotiations have resulted in some creative solutions that provide
substantial benefits to consumers while keeping impacts on
manufacturers to modest levels. The provisions in INCAAA update some
existing standards and add standards for a few new products based on
standards already enacted by several states. Most of these provisions
were reported out by this Committee in the 111th Congress. We strongly
support this bill.
We estimate that INCAAA will reduce save the nation nearly 850
trillion Btus of energy each year by 2030--enough energy to meet the
needs of 4.6 million typical American households. INCAA will result in
net economic savings (benefits minus costs) to consumers of more than
$43 billion annually by 2030 and will reduce peak electric demand in
2030 by about 20,500 MW, equivalent to the output of 68 typical 300 MW
power plants. In addition, these standards will save nearly 5 trillion
gallons of water, roughly the amount needed to meet the current needs
of every customer in Los Angeles for 25 years.
S. 395, the Better Use of Light Bulbs Act (BULB), would repeal
Subtitle III B of the Energy Independence and Security Act of 2007
(EISA). ACEEE urges that this bill be rejected.
Many proponents of BULB claim that under EISA, incandescent lamps
are banned, and therefore consumers would be forced to purchase compact
fluorescent lamps (CFLs). The BULB bill aims to end this reputed ban on
incandescent lamps. These claims are based on a faulty understanding of
the lighting market--in fact, the lamp performance standards in the
2007 law are already being met by four types of bulbs now on the
market, including two types of incandescent bulbs.
Also, the BULB bill would repeal a variety of other sections in
EISA, including provisions on reflector lamps (closing a loophole in
the 1992 law that established reflector lamp standards), metal halide
lamps (primarily used in factories, large commercial spaces, and
outdoors), consumer information labels for televisions and other
electronic products, and a program to improve lighting efficiency in
federal facilities. We have not seen or heard any criticisms of these
other provisions, but still the BULB bill would repeal them.
In 2007 when EISA was passed, ACEEE estimated that the provisions
in Subtitle III B would by 2020 reduce annual electricity use by 72
billion kWh (enough to serve the annual electricity needs of 6.6
million average American households); reduce peak electric demand by
more than 10,000 MW (equivalent to the output of more than 30 power
plants (300 MW each); and reduce consumer energy bills by more than $7
billion (about $50 per American household annually).\3\ These benefits
would be lost if the BULB bill is enacted.
---------------------------------------------------------------------------
\3\ ACEEE. 2007. ``Energy Bill Savings Estimates as Passed by the
Senate.'' http://www.aceee.org/files/pdf/fact-sheet/
EnergyBillSavings12-14.pdf. Washington, DC: American Council for an
Energy-Efficient Economy.
---------------------------------------------------------------------------
According to a recent survey by USA Today of 1,016 adults on the
lamp standards, despite all the recent publicity about an incandescent
lamp ``ban,'' ``61% of Americans call the 2007 legislation a `good' law
while 31% say it's `bad'.''\4\
---------------------------------------------------------------------------
\4\ Koch, Wendy. Feb. 17, 2011. ``Poll: Americans OK with Newer
Light Bulbs.'' USA Today. http://content.usatoday.com/communities/
greenhouse/post/2011/02/poll-americans-ok-newer-light-bulbs/1
---------------------------------------------------------------------------
The federal appliance and equipment efficiency standards program is
a great energy efficiency success story, with Congress adopting new
standards in each of the last three decades on a bipartisan basis. This
Committee can add to this success by supporting S. 398 (INCAAA) and
opposing S. 395 (BULB).
introduction
My name is Steven Nadel and I am the Executive Director of the
American Council for an Energy-Efficient Economy (ACEEE), a nonprofit
organization dedicated to increasing energy efficiency to promote both
economic prosperity and environmental protection. We were formed in
1980 by energy researchers and celebrated our 30th anniversary last
year. Personally, I have worked actively on appliance and equipment
standards issues for more than 20 years at the federal and state levels
and participated in discussions that led to the enactment of federal
standards legislation in 1987 (NAECA), 1988 (NAECA amendments), 1992
(EPAct), 2005 (EPAct), and 2007 (EISA). I also worked on the appliance
standards provisions incorporated into the ACELA bill that this
Committee reported out last Congress.
The federal standards program has a long history of bipartisan
support. The original law establishing an appliance standards program
was enacted under President Ford in response to the 1970's energy
crisis. The first federal standards were established in the National
Appliance Energy Conservation Act of 1987, signed by President Reagan.
Additional standards were added in bills signed by Presidents Reagan,
George H.W. Bush, and George W. Bush (two laws). For example, the
National Energy Policy developed by President Bush and Vice President
Cheney in 2001 notes that these ``standards will stimulate energy
savings that benefit the consumer, and reduce fossil fuel consumption,
thus reducing air emissions.''
Minimum efficiency standards have been adopted in order to address
market failures and barriers, replace a patchwork of state standards,
save consumers money, and reduce energy use and peak electrical demand.
Among the market failures and barriers addressed by standards are:
Rush purchases when an existing appliance breaks down,
providing no time to comparison shop;
Limited stocking and availability of efficient products for
some product types;
Purchases by builders and landlords who do not pay appliance
operating costs and hence have no financial incentive to value
efficiency; and
Frequent bundling of efficient features with other ``bells
and whistles,'' which raise the price of efficient products and
dissuade many purchasers.
Standards remove inefficient products from the market but still
leave consumers with a full range of products and features to choose
among. Commonly, standards can even increase consumer choice by making
efficient, moderate-cost products available. For example, later in my
testimony I will discuss how the general service lamp standard has
resulted in the establishment of two new classes of improved-efficiency
incandescent light bulbs.
The foundation of prior appliance and equipment standards laws was
the adoption of consensus standards negotiated between product
manufacturers and energy efficiency supporters. ACEEE has been involved
in all of these negotiations. Most federal standards build on previous
state standards. After several states adopt standards for a product,
manufacturers generally prefer uniform national standards to a
patchwork of state standards, particularly if the state standards are
not identical to each other. When a federal standard is established, it
preempts state standards. Typically, manufacturers, represented by
their trade association, and efficiency supporters, generally
represented by ACEEE, have gotten together to work out specific
standards proposals. These negotiations allow creative solutions to
problems, resulting in win-win agreements. Once agreement is reached,
the parties go to members of Congress seeking legislation putting each
agreement into law. All of the specific standards adopted by Congress
have had the support of manufacturers and energy efficiency
organizations. Consumer organizations and states have also supported
federal standards. In a few instances where manufacturers and
efficiency advocates cannot agree, Congress has delegated decisions to
DOE, allowing each side to make its best case and then having the
Secretary of Energy decide what, if any, standard to set based on the
criteria of ``maximum improvement in energy efficiency. . . which. . .
is technologically feasible and economically justified.''Appliance and
equipment efficiency standards have been one of the United State's most
effective energy efficiency policies. ACEEE has estimated that without
these standards and subsequent DOE rulemakings, U.S. 2010 electricity
use and peak electric demand would have been about 7% higher and U.S.
total energy use about 3% higher. Net savings to consumers from
standards already adopted will exceed $300 billion by 2030.\5\
---------------------------------------------------------------------------
\5\ Max Neubauer, Andrew Delaski, Marianne Dimascio, and Steve
Nadel. 2009. Ka-BOOM! The Power of Appliance Standards: Opportunities
for New Federal Appliance and Equipment Standards. Washington, DC:
American Council for an Energy-Efficient Economy.
---------------------------------------------------------------------------
In January 2011, ACEEE published a paper estimating the impact of
appliance efficiency standards enacted to date.\6\ We found that:
---------------------------------------------------------------------------
\6\ Gold, R., S. Nadel and S. Laitner. 2011. Appliance and
Equipment Efficiency Standards: A Money Maker and Job Creator.
Washington, DC: American Council for an Energy-Efficient Economy.
Standards already in place make a big contribution to U.S.
efforts to reduce energy use, with savings growing to 5.8 quads
a year in 2020, or more than enough to meet the total annual
energy needs of one-quarter of all U.S. households.
These standards and the resulting energy bill savings
generated about 340,000 jobs in 2010, or 0.2% of the nation's
jobs. The energy and related utility bill savings from
standards will continue to contribute to a healthy economy over
time, and in 2030, the number of jobs generated will increase
to about 380,000 jobs--an amount about equal to the number of
jobs in Delaware today.
In the balance of my testimony I will address the two bills that
are the subject of today's hearing.
s. 398--implementation of consensus appliance agreements act (incaaa)
INCAAA contains a variety of consensus standard agreements that
have been negotiated among product manufacturers, efficiency
supporters, and other interested parties over the past two years. ACEEE
strongly supports this bill. We thank Senators Bingaman and Murkowski
for introducing this bill and also thank Senator Lugar who played a key
role in advancing last year's version of this bill.
INCAAA includes provisions to:
Update existing standards for residential furnaces, central
air conditioners, and heat pumps.
Update existing standards for residential refrigerators,
freezers, clothes washers, clothes dryers, dishwashers, and
room air conditioners.
Establish new standards, based on existing state standards,
for bottle-type water dispensers, portable electric spas, and
commercial hot food holding cabinets.
Establish new standards based on ASHRAE/ANSI consensus
standards for commercial furnaces and heat pump pool heaters.
Establish standards for the most inefficient types of
outdoor lighting.
Study video game console energy use.
Make technical corrections to standards established in EPAct
2005 and EISA 2007.
Overall, ACEEE estimates that this bill will:
Save the nation nearly 850 trillion Btus of energy each year
by 2030--enough energy to meet the needs of 4.6 million typical
American households;
Result in net economic savings (benefits minus costs) to
consumers of more than $43 billion annually by 2030;
Reduce peak electric demand in 2030 by about 20,500 MW,
equivalent to the output of 68 typical 300 MW power plants; and
Save nearly 5 trillion gallons of water, roughly the amount
needed to meet the current needs of every customer in Los
Angeles for 25 years.
In the next portion of my testimony I will briefly summarize the
rationale behind the key provisions in INCAA.
Definitions (Sec. 2): This section clarifies the definition of
standards so that more than one efficiency metric may be used for a
product if needed and justified. The past two administrations have
disagreed on whether DOE may set more than one standard for a product.
There have been numerous times in the past where consensus agreements
have been reached with more than one metric but DOE did not adopt them
because it argued that the current definition permits only one metric.
It would be useful to let DOE establish these standards, either based
on its own analysis or on consensus agreements, without always having
to go to Congress. This is not a requirement to set more than one
efficiency metric but just permission to do so. Under existing law,
each efficiency requirement will need to be economically feasible and
economically justified.
This section also contains new efficiency standards for residential
furnaces, central air conditioners, and heat pumps, and makes it easier
for states to include a specific set of efficiency levels that are
higher than the minimum standard in their state building codes. For
these products, regional standards are established, generally dividing
the country into North and South regions. In the North, the current air
conditioner standard is left unchanged and a process is established for
DOE to set a northern furnace standard. In the South, the current
furnace standard is unchanged but the air conditioner is raised by one
efficiency point from SEER 13 to SEER 14. The building code provision
allows states to include specific higher efficiency levels in state
building codes for new construction (e.g., SEER 15 in the South)
provided they also provide a pathway for use of minimum efficiency
equipment (e.g., this pathway might require SEER 14 and use of improved
windows to make up for the lost energy savings). The building code
provision requires Congressional action as DOE probably does not have
the authority to establish these standards on their own.
Heat pump pool heaters (Sec. 3): There have been federal standards
for gas-fired pool heaters for many years. These will be the first
standards for efficient electric pool heaters. The specific standard
levels come from ASHRAE Standard 90.1-2010.
GU-24 base lamps (Sec. 4): These are a new type of lamp base that
was developed in response to an ENERGY STAR program solicitation. GU-24
lamps are compact fluorescent lamps that can all operate on the same
type of base, regardless of lamp wattage. With a common base, it is
easier for consumers to purchase replacement tubes, making these lamps
attractive for utility rebate programs. This provision prevents sale of
inefficient lamps that could be used in GU-24 sockets and defeat the
energy-saving purpose of these sockets. Presently inefficient GU-24
lamps are not produced and this provision would prevent their
introduction (some foreign companies who did not win the ENERGY STAR
solicitation have threatened to introduce such lamps in order to stymie
the GU-24 initiative).
Bottle-type water dispensers, portable electric spas, and
commercial hot food holding cabinets (Sec. 5): These are products that
are currently regulated in California, Connecticut, and Oregon (all
three products) and Maryland, New Hampshire, Rhode Island, and the
District of Columbia (for water dispensers and hot food holding
cabinets). This provision would extend these state standards to apply
nationally. Bottle-type water dispensers are used in many offices.
Efficient products have insulation to help keep hot water hot and cold
water cold. Portable electric spas, also called hot tubs, are used in
some residences. Efficient products typically have insulated covers to
keep heat in when the unit is not in use. Commercial and in-ground spas
are not included. Hot food holding cabinets are typically used in
hospitals to keep food warm while it is being transported to patient
rooms. Efficient products are insulated. These standards were developed
in association with the trade association for each product--the
Association of Pool and Spa Professionals, the International Bottled
Water Association, and the North American Food Equipment Manufacturers.
Pictures of these products are as follows:*
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* Graphics have been retained in committee files.
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Test procedures (Sec. 6): Provides for expedited consideration of
consensus test procedure proposals, mimicking a provision in EISA on
consensus standards proposals. Clarifies current law on petitions for
amendments to test procedures and establishes deadlines for responding
to petitions (currently, there are no deadlines).
Smart Appliances (Sec. 8): Directs EPA to consider establishing a
credit in the ENERGY STAR program for appliances that are ``smart.''
This was a provision in our consensus agreement with appliance
manufacturers. The parties have filed a petition with EPA. This
provision sets a deadline for EPA to respond.
Video game consoles (Sec. 9): These are products such as the Sony
PlayStation 3, Microsoft Xbox, and Nintendo Wii. If left on, these
products can use more energy than a typical new refrigerator. This
provision would have DOE study these products and decide whether
minimum efficiency standards should be considered.
New appliance standards (Sec. 10, 11, 13, 14, and 15): Establishes
specific new standards negotiated with manufacturers for residential
refrigerators, freezers, room air conditioners, clothes dryers, clothes
washers, and dishwashers. For the most part the new standards are based
on efficiency levels now promoted by ENERGY STAR and by federal tax
credits for efficient appliances established in 2005 and updated in
2008. The AHAM witness at this hearing will describe these standards in
more detail.
Uniform efficiency descriptor for covered water heaters (Sec. 12):
Directs DOE to develop a new single efficiency descriptor for both
residential and commercial water heaters. Currently there are separate
residential and commercial descriptors, which creates difficulties for
products that can be used in both sectors (e.g., large homes and small
businesses). This provision would also correct differences in test
procedures for storage-tank and tankless water heaters, allowing
consumers to fairly compare these systems (under the current test
procedure, the rating for tankless water heaters is misleadingly high).
This provision was originally introduced by Senators Kohl and Corker in
the 111th Congress.
Petition for amended standards (Sec. 16): Sets a deadline for DOE
to act on standards petitions. Currently there is no deadline.
Prohibited acts (Sec. 17): Improves enforcement of standards by
extending coverage from just manufacturers to also include
distributors, retailers, and private labelers. State standards are
generally enforced at the distributor and retailer level.
Outdoor lighting (Sec. 18): Establishes standards for the least-
efficient types of outdoor lighting--mercury vapor and quartz lamps.
Sale of mercury vapor ballasts were curtailed in EPAct 2005 and this
provision would complete the process to phase-out these inefficient
lamps. The quartz lamp provision would require use of more efficient
quartz products that have an infrared reflective coating.
Commercial furnaces (Sec. 19): Makes the standard established in
ASHRAE standard 90.1-1999 a national standard. Most products already
meet this standard but this provision would bring all products into
compliance.
Service over counter commercial refrigerators (Sec. 20):
Establishes a separate product class for these products, allowing a
less stringent standard than the one set in EPAct 2005. The 2005
standard has proven difficult to meet for these products and
manufacturers and efficiency supporters have developed a more feasible
standard.
Technical corrections (Sec. 24): Makes a variety of technical
corrections to EPAct 2005 and EISA, correcting drafting, typographical,
and other errors. These include non-conforming amendments to underlying
law and language that was not adequately clear. Many of these mistakes
were made in the process of codifying the conference agreement.
Congress needs to act to correct these errors because some of the
affected standards are scheduled to take effect soon. We have worked
together with the affected trade associations to reach consensus on
these technical amendments.
In addition to the sections now in INCAAA, we hope that some
additional sections can be added, as follows:
Reflector lamps: NEMA and ACEEE have been discussing language
to clarify what DOE should consider when it next revises the
incandescent reflector lamp standard originally established by
Congress in 1992. For this next rulemaking, we have agreed that
DOE should consider both incandescent and non-incandescent
products, and possible alternative energy metrics to the lumens
per Watt metric that is now in use. Specific language is
contained in the appendix to my testimony. This language would
require DOE to consider these issues, but based on this
consideration, DOE could decide to not make changes. This
language gives DOE more options, but decisions on these options
will depend on DOE analysis made during the next DOE
rulemaking.
Outdoor lighting: Last year's version of INCAAA contained
standards for outdoor lighting fixtures that we negotiated with
NEMA. That proposal rests on a fixture classification system
developed by the Illuminating Engineering Society (IES). The
IES standard is now being revised and once this is revised,
some modifications to our original consensus agreement will
likely be needed. Once this process is completed, we will
provide updated legislative language.
Electric motors: We are also discussing with NEMA revisions
to the current federal standard for electric motors. These
revisions will likely include additional product classes to be
covered by the standards established in EISA. Assuming these
discussions are successful, we will provide specific suggested
language.
s. 395--better use of light bulbs act (bulb)
The BULB bill would repeal Subtitle III B of the Energy
Independence and Security Act of 2007 (EISA). ACEEE urges that this
bill be rejected.
Many proponents of BULB claim that under EISA, incandescent lamps
are banned, and therefore consumers would be forced to purchase compact
fluorescent lamps (CFLs). The BULB bill aims to end this reputed ban on
incandescent lamps. These claims are based on a faulty understanding of
the lighting market--in fact, efficient incandescent light bulbs that
meet the EISA standards are already on sale well in advance of the
national standards taking effect.
Also, the BULB bill would repeal a variety of other sections in
EISA, including provisions on reflector lamps (closing a loophole in
the 1992 law that established reflector lamp standards), metal halide
lamps (primarily used in factories, large commercial spaces, and
outdoors), consumer information labels for televisions and other
electronic products, and a program to improve lighting efficiency in
federal facilities. We have not seen or heard any criticisms of these
other provisions, but still the BULB bill would repeal them.
In 2007 when EISA was passed, ACEEE estimated that the provisions
in Subtitle III B would by 2020:\7\
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\7\ ACEEE. 2007. ``Energy Bill Savings Estimates as Passed by the
Senate.'' http://www.aceee.org/files/pdf/fact-sheet/
EnergyBillSavings12-14.pdf. Washington, DC: American Council for an
Energy-Efficient Economy.
Reduce annual electricity use by 73 billion kWh (enough to
serve the annual electricity needs of 6.6 million average
American households);
Reduce peak electric demand by more than 10,000 MW
(equivalent to the output of more than 30 power plants (300 MW
each); and
Reduce consumer energy bills by more than $6 billion (about
$50 per American household annually).
These benefits would be lost if the BULB bill is enacted.
According to a recent survey by USA Today, despite all the recent
publicity about an incandescent lamp ban, a recent survey of 1,016
adults on the lamp standard found that ``61% of Americans call the 2007
legislation a `good' law while 31% say it's `bad'.''\8\
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\8\ Koch, Wendy. Feb. 17, 2011. ``Poll: Americans OK with Newer
Light Bulbs.'' USA Today. http://content.usatoday.com/communities/
greenhouse/post/2011/02/poll-americans-ok-newer-light-bulbs/1
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I would also note that the U.S. is not alone in passing this type
of legislation. Similar legislation has been passed in Canada,
Australia, the European Union, Brazil, Argentina, Russia, and Malaysia.
And China is now developing standards. The Australian, European, and
South American standards have already taken effect.
In the following sections I address a few of the key issues in this
debate.
Does EISA ban incandescent lamps and only permit use of compact
fluorescent lamps?
EISA sets lamp performance standards in terms of lumens of light
output per Watt of power input. The standards are higher for high-lumen
bulbs since efficiency generally increases as bulb size increases. Any
lamp technology that can meet the performance standard can be sold.
Presently, there are four types of lamps on the market that meet the
EISA standard, two of which are incandescent. The four complying lamp
types are:
1. High-efficiency halogen bulbs.--All three major
manufacturers (GE, Osram Sylvania, and Philips) have
incandescent products that place the filament in a capsule
containing halogen gas. The filament burns more efficiently
than in a conventional incandescent lamp. These halogen
products have been used for more than a decade in automobile
headlamps and most commercial reflector lamps. With halogen
lamps, a 72 W halogen replaces a conventional 100 W lamp and a
43 W halogen replaces a conventional 60 W lamp. Their rated
life is the same as conventional lamps--1,000 hours. These
lamps have a suggested list price of $1.49, although as
production increases the price is likely to drop.
2. Halogen IR lamps.--These are similar to the lamps above
but with a special coating on the capsule that reduces the
amount of infrared energy leaving the capsule, increasing lamp
efficiency still further. Presently, Philips markets halogen IR
lamps. The higher efficiency permits manufacturers to design
longer life lamps and still meet the performance standard. For
example, the Philips lamp has a rated life of 3,000 hours,
three times that of a conventional incandescent bulb. Presently
these lamps sell for about $4, but as production increases,
costs will come down.
3. Compact fluorescent lamps (CFLs).--These lamps are now
widely available and come in a variety of light colors and
shapes such that lamps are available to fit most existing
fixtures. Prices have come down enormously. This past weekend I
was at Home Depot and they had a variety of 4-packs for under
$3, an average of 75 cents per bulb.
4. LED lamps (light emitting diodes).--These lamps use
multiple LEDs to provide light. Only recently have general
service lamps made it to the market. They have long life (e.g.,
25,000 hours or more). At Home Depot this past weekend these
bulbs were selling for $18-40. These are brand-new products and
prices are likely to drop dramatically in coming years.
Do the EISA standards reduce consumer choice?
The standards have resulted in some important new choices while
eliminating the least efficient option in the market. On the one hand,
the conventional incandescent lamp developed by Thomas Edison more than
a century ago will no longer be available. On the other hand, the
standard has spurred innovation in the lighting industry, resulting in
the development of both general service halogen and general service
halogen IR lamps. Without the 2007 lamp standards, it is unlikely these
products would have been brought to market. And the impending standard
is also helping to spur development of general service LED lamps.
There has also been some recent publicity about how Easy Bake ovens
for children use a 100 W light bulb as their heating element. Easy Bake
has announced that they will soon be coming out with a new oven that
does not need a light bulb.\9\ Instead it will have a small electric
element that is a more efficient heater than a light bulb.
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\9\ Karp, Gregory. Feb. 24, 2011. ``Light Bulb Goes Off for Easy-
Bake Oven's New Idea.'' Chicago Tribune. http://
articles.chicagotribune.com/2011-02-24/news/ct-talk-0224-easy-bake-
oven-20110224--1--bulb-100-watt-incandescent-light-easy-bake-ovens.
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Why not leave the choice to consumers and let them purchase inefficient
bulbs if they want to?
The bulbs someone purchases affects not only their own energy
bills, but also all other consumers as well. Power demand is growing,
meaning that new power plants are needed. New power plants cost more
per kWh than existing power plants,\10\ so new power plants raise
rates. The lamp efficiency standards reduce growth in electricity use
and thereby moderate these rate increases for all consumers.
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\10\ For information on the cost of new power plants see Lazard.
2009. ``Levelized Cost of Energy Analysis, version 3.0.'' http://
efile.mpsc.state.mi.us/efile/docs/15996/0145.pdf. These costs are only
for the generating station and thereby account for only about half of
retail electricity prices since transmission, distribution and other
costs are not included.
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In addition, more efficient bulbs reduce emissions from power
plants, affecting the air we all breathe. In the next section I discuss
emissions of mercury, but more efficient bulbs also reduce emissions of
criteria pollutants (sulfur and nitrogen oxides) and greenhouse gases,
benefiting all Americans.
Is mercury a major problem with CFLs?
CFLs contain a small amount of mercury, typically about 4 mg per
bulb. Manufacturers have significantly reduced the amount of mercury in
bulbs relative to products from earlier years. By comparison, the old
mercury thermometers we all grew up with used about 500 mg of mercury--
125 times more. Most of this mercury becomes bound to the inside of the
bulb as the bulb is used. The amount of mercury in the bulb needs to be
balanced against the amount of mercury released into the air when power
is generated. According to EPA: ``More than half of [total mercury
emissions in the U.S.] come from coal-fired electrical power. Mercury
released into the air is the main way that mercury gets into water and
bio-accumulates in fish. (Eating fish contaminated with mercury is the
main way for humans to be exposed).'' Again according to EPA, a typical
incandescent lamp releases 5.5 mg into the environment, all from power
generation. A typical CFL releases only 1.6 mg, including 1.2 mg from
power generation and 0.4 mg from landfilling CFLs.\11\
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\11\ EPA. Nov. 2010. ``Frequently Asked Questions, Information on
Compact Fluorescent Light Bulbs (CFLs) and Mercury.'' http://
www.energystar.gov/ia/partners/promotions/change_light/downloads/
Fact_Sheet_Mercury.pdf
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Aren't halogen lamps the type of lamp that was linked to household
fires a few years ago?
Yes, there were fires associated with halogen torchiere luminaries.
But these had exposed tubes and were generally high-wattage--e.g., 300
W per tube. The general service halogen lamps on the market today have
the tube enclosed within an outer bulb and they are lower wattage--the
highest are 72 W. The higher the Watts, the more heat that is given
off. Also, the general service halogen lamps on the market today
contain a safety fuse that will shut the lamp off should it fall over
and break.
conclusion
The federal appliance and equipment efficiency standards program is
a great energy efficiency success story, reducing U.S. energy use by
about 7% in 2010, reducing consumer and business energy bills by about
$34 billion in 2010, and generating more than 300,000 jobs. This
program has a long history of bipartisan support.
The INCAAA bill will add to these benefits. By 2030, we estimate
that INCAAA will save nearly 850 trillion Btus of energy annually in
2030 and result in net economic savings (benefits minus costs) to
consumers of more than $43 billion by 2030. This bill has consensus
support from product manufacturers, energy efficiency and consumer
organizations, and a variety of other affected parties. We urge this
Committee to favorably report out INCAAA.
On the other hand, the BULB bill will result in higher energy use
and costs--an average of about $50 annually in higher energy bills per
household. Contrary to some reports in the media, this bill will not
ban incandescent lamps and require use of CFLs. The general service
lighting standards enacted by Congress in 2007 have spurred product
innovation and now in addition to CFLs, two types of incandescent lamps
are now being sold that will meet the new standards. We urge this
Committee to not support the BULB bill.This concludes my testimony.
Thank you for the opportunity to present these views.
appendix: recommended new language on reflector lamps
STANDARDS FOR CERTAIN REFLECTOR LAMPS.
Section 325(i) of the Energy Policy and Conservation Act (42 U.S.C.
6295(i)) is amended by adding at the end the following:
``(9) REFLECTOR LAMPS.----
(A) In conducting rulemakings for reflector lamps after
January 1, 2014, the Secretary shall consider:
``(i) incandescent and nonincandescent technologies;
and
``(ii) a new energy-related measure, other than
lumens per watt, that is based on the photometric
distribution of those lamps.
The Chairman. Thank you very much.
Mr. McGuire.
STATEMENT OF JOSEPH M. MCGUIRE, PRESIDENT, ASSOCIATION OF HOME
APPLIANCE MANUFACTURERS
Mr. McGuire. Chairman Bingaman, Ranking Member Murkowski,
thank you for providing me the opportunity to testify on behalf
of the Association of Home Appliance Manufacturers regarding S.
398. Thank you both for your leadership in the area of
appliance efficiency.
AHAM represents manufacturers of major, portable and floor
care home appliances and suppliers to the industry. Our
membership is global and produces more than 95 percent of the
household appliances shipped for sale in the United States.
AHAM members also employ tens of thousands of people in the
U.S. The factory shipment value of these products is more than
$30 billion annually.
The home appliance industry through its products and
innovation is essential to U.S. consumer lifestyle, health,
safety and convenience. Through its technology employees and
productivity our industry contributes significantly to U.S.
jobs and economic security. Home appliances are also a success
story in terms of energy efficiency and environmental
protection.
New appliances often represent the most effective choice a
consumer can make to reduce home energy use and costs. Products
with an added ENERGY STAR designation are at least 10 to 20
percent more efficient than the Federal standards require.
On average a modern refrigerator today uses only the same
amount of electricity as a 50 watt light bulb.
While clothes washer tub capacities have grown larger the
new clothes washer uses 73 percent less energy than it did in
1990. In fact replacing an year old washer today with one of
average efficiency will save the American consumer $130 per
year in utility bills and more than 5,000 gallons of water per
year.
Dishwashers, room air conditioners, freezer and other major
appliances offer similar energy efficiency gains.
We support Federal efficiency standards in lieu of State
standards that have been involved with and supported appliance
related energy legislation for 30 years. In short if there are
to be regulations a single, uniformed standard throughout the
United States and even throughout North American is preferable
to a patchwork of 50 State standards. The current appliance
standard system is also designed to take into consideration a
number of factors including consumer cost and product
functionality as well as provide adequate lead time and sell
through time for manufacturers.
The agreement in S. 398 would implement for AHAM's
products, it represents energy standards that for the most part
are already being pursued by the DOE based on deadlines and
previous legislation or court imposed consent decree. But
enacting these standards into law will assist DOE in meeting
its many statutory deadlines for standards development. It will
also reduce the burden the industry and other stakeholders
would face in participating in separate regulatory proceedings.
The bill also provides added lead time and certainty to prepare
for new standards which is welcome in these economically trying
times.
S. 398 saves energy and increases our energy independence.
The standards in the bill when combined with other elements of
the agreement will save more than nine quads of energy over 30
years. The agreement requires incentivizes clothes washers and
dishwashers to use nearly 5 trillion less gallons of water over
30 years. Over that same 30 year time period greenhouse gas
emissions will be reduced by approximately 550 million metric
tons.
In addition to the standards in the bill an important, but
non legislative component of this agreement is that it will
jump start the SMART grid by helping to deploy Smart appliances
nationwide and enable consumers to better take advantage of
demand response and real time pricing opportunities. This will
be accomplished when ENERGY STAR agrees to petition from our
coalition requesting recognition of the benefits of SMART
appliances.
The third and final important pillar of this agreement are
incentives to manufacturers to increase the production of super
efficient appliances over and above the ENERGY STAR levels
thereby saving even more energy and water and encouraging more
job creation. These manufacturer tax credits require continued
improvement in the production of super efficient appliances
because the tax credits can only be claimed from increased
production over previous years even during a recession. These
incentives impact approximately 46,000 manufacturing jobs and
could create new jobs.
We strongly encourage this committee to approve S. 398 to
lock in the energy savings contained in the standards portion
of our agreement. We look forward to working with this
committee on these and other issues.
Thank you.
[The prepared statement of Mr. McGuire follows:]
Prepared Statement of Joseph M. McGuire, President, Association of Home
Appliance Manufacturers
Chairman Bingaman, Ranking Member Murkowski and members of the
Committee, thank you for providing me the opportunity to testify on
behalf of the Association of Home Appliance Manufacturers (AHAM)
regarding the Implementation of National Consensus Appliance Agreements
Act of 2011 (S. 398) to amend the Energy Policy and Conservation Act to
improve energy efficiency of appliances. We appreciate the Committee's
willingness to consider and support consensus agreements for standards
and incentives by industry, efficiency advocates, environmental and
consumer groups and State energy offices.
AHAM represents manufacturers of major, portable and floor care
home appliances, and suppliers to the industry. AHAM's membership
includes over 150 companies throughout the world. In the U.S., AHAM
members employ tens of thousands of people and produce more than 95% of
the household appliances shipped for sale. The factory shipment value
of these products is more than $30 billion annually. The home appliance
industry, through its products and innovation, is essential to U.S.
consumer lifestyle, health, safety and convenience. Through its
technology, employees and productivity, the industry contributes
significantly to U.S. jobs and economic security. Home appliances also
are a success story in terms of energy efficiency and environmental
protection. New appliances often represent the most effective choice a
consumer can make to reduce home energy use and costs.
AHAM is also a standards development organization, accredited by
the American National Standards Institute (ANSI). The Association
authors numerous appliance performance testing standards used by
manufacturers, consumer organizations and governmental bodies to rate
and compare appliances. AHAM's consumer safety education program has
educated millions of consumers on ways to properly and safely use
appliances such as portable heaters, clothes dryers, and cooking
products.
AHAM and its members are committed to providing energy efficient
home appliances that have a direct positive impact on the lives of
consumers. Refrigerators are being produced at larger capacities, and
yet are 50 percent more efficient than they were 20 years ago. Products
with an added ENERGY STAR designation are at least 20 percent more
efficient than the federal standard. On average, a modern refrigerator
uses only the same amount of electricity as a 50 Watt light bulb.
Clothes washers are another example of the energy efficiency success
with tub capacities growing larger, and energy consumption declining. A
new clothes washer uses 73 percent less energy than it did in 1990. In
fact, replacing an 8 year old washer with one of average efficiency
will save the American consumer $130 per year in utility bills, and
more than 5,000 gallons of water per year. ENERGY STAR models enjoy
additional energy and water savings. Dishwashers, room air
conditioners, freezers and other major appliances offer similar energy
efficiency gains.
federal standards
We support federal efficiency standards in lieu of state standards
and have been involved with and supported appliance related energy
legislation for 30 years. One, uniform standard throughout the U.S.,
and even throughout North America and beyond, is preferable to a
patchwork of 50 disconnected state-by-state standards. Federal
appliance standards based on industry input and agreement is a path to
more reasonable regulation and protection of consumer interest in a
full diversity of products by manufacturer, brand, features and price
points. Rational, certain standards with sufficient lead time, when
coupled with incentive programs, can also enhance U.S. employment.
By participating in consensus negotiations leading to legislated
standards or those which are the subject of multi-party petitions to
Department of Energy (DOE), AHAM has assisted DOE to first catch up to
and now meet the rulemaking schedules in EPCA. Congress has set DOE a
daunting task. There have been numerous new rulemakings required with
more scheduled. The chart below shows the many standards for our
products and how far into the future standards are already in the queue
to be revised.
The agreement that INCAAA would implement, for AHAM's products,
represents energy standards that largely already are being pursued by
the DOE based on deadlines in previous legislation or a court imposed
consent decree. Enacting these standards into law does not add to the
burden industry would face in any case through mandatory rulemakings
and provides added lead time and certainty which is welcome in these
economically trying times.
energy efficient and smart appliance agreement of 2010
Last year, after months of intense negotiations, with the technical
assistance and encouragement of DOE, which was greatly appreciated and
helpful, the Energy Efficient and Smart Appliance Agreement was
finalized by a number of stakeholders. Supporters of the agreement are
as follows:
Association of Home Appliance Manufacturers
American Council for an Energy-Efficient Economy
Appliance Standards Awareness Project
Natural Resources Defense Council
Earthjustice
Alliance to Save Energy
Northwest Power and Conservation Council
Northeast Energy Efficiency Partnerships
California Energy Commission
Demand Response and Smart Grid Coalition
Consumer Federation of America
National Consumer Law Center
Alliance for Water Efficiency
The Energy Efficient and Smart Appliance Agreement saves energy and
increases our energy independence. We estimate that fully implemented
this agreement will lead to improved product energy efficiency saving
more than 9 Quads of energy over 30 years (the U.S. uses approximately
100 quads a year). Further, it requires and incentivizes clothes
washers and dishwashers to use nearly 5 trillion less gallons of water
over 30 years. Over that same 30 year time period, greenhouse gas
emissions will be reduced by approximately 550 million metric tons of
CO2. Through these energy and water savings, consumers will
save billions of dollars.
But standards are not enough and are of decreasing utility as our
products get more efficient and need to be supplemented with ``pull''
programs. An important but non-legislative component of this agreement
is that it will jump start the smart grid by helping to deploy smart
appliances nationwide and enable consumers to better take advantage of
demand-response and real-time pricing opportunities. This will be
accomplished when ENERGY STAR agrees to an industryefficiency advocate-
consumer group petition requesting recognition of the benefits of smart
appliances.
The third and final important pillar of this agreement are
incentives to manufacturers to increase the production of super-
efficient products--over and above ENERGY STAR levels--thereby saving
even more energy and water and encouraging more job creation. These
manufacturer tax credits are a model of success and require continued
improvement in the production of superefficient appliances because the
tax credits can only be claimed for increased production over previous
years even during a recession. These incentives impact approximately
46,000 manufacturing jobs (19,000 direct; 27,000 supply chain/support)
and creates new jobs, including bringing back to the U.S. jobs that
were outsourced in earlier years.
Lastly, these consensus agreements reduce the amount of resources
that the Department of Energy needs to provide for the rulemakings. In
this era of increased focus on federal use of resources, these
standards agreements should be embraced by Congress as they have been
by the Administration so that resources can be used more effectively.
The agreed to refrigerator standards provide 20 to 30 percent more
energy savings relative to current standards for major product
categories, which is the current ENERGY STAR level or the previous top
tax credit level. The new standards take effect in 2014. It also will
include icemaker energy.
The new clothes washer standards would be effective in 2015. It
includes different standards for top-loaders and front-loaders and top-
loader standards have a two phase increase to allow manufacturers time
to develop and re-tool for higher levels of efficiencies. Front-loaders
will save 43 percent more energy and 52 percent more water relative to
current standard. Top-loaders will save 26 percent more energy and 16
percent more water savings in 2015 and 37 percent more energy and water
in 2018.
The new clothes dryer standards will save 5 percent more energy
using the current test procedure. Additional energy will be saved by
modifying the test procedure to address the effectiveness of auto
termination and reduce over-drying. These standards would take effect
in 2015.
The new room air conditioner standards, which would be effective in
2014, will save 10 to 15 percent more energy for the major product
classes.
The dishwasher standards would reduce energy use by 14 percent and
water use by 23 percent and would take effect in 2013.
The estimated energy and water savings from these standards are
shown in the graph below.*
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* Graph has been retained in committee files.
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conclusion
AHAM has a history of working cooperatively with Congress to
provide consensus agreements with all stakeholders. We think this is a
preferable path because it provides stakeholders increased flexibility
to bring in other issues, such as ENERGY STAR, that cannot be done
through the confinements of a normal rulemaking process. We strongly
encourage this committee to approve INCAAA and look forward to
continuing to work with this Committee on these and other issues.
The Chairman. Thank you very much.
Mr. Yurek, go right ahead.
STATEMENT OF STEPHEN YUREK, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, THE AIR-CONDITIONING, HEATING, AND REFRIGERATION
INSTITUTE
Mr. Yurek. Thank you, Mr. Chairman. I appreciate the
opportunity to be with you today to discuss our support for S.
398. I'm Stephen Yurek, the President and CEO of the Air-
Conditioning, Heating, and Refrigeration Institute, the trade
association that represents manufacturers of heating, cooling,
water heating and commercial refrigeration equipment.
I'm going to stress 2 points that are in my written
comments.
The first one is that this is a jobs bill.
The second is that this is essential if Congress passed
this bill because many of the provisions in our consensus
agreements cannot be enacted without legislation.
On my first point this is a jobs bill representing over
250,000 American manufacturing jobs which represent the jobs
that our members have in the U.S. Because our equipment
requires professional installation there's an additional
million jobs at stake related to the distribution, installation
and maintenance of this equipment. In addition, as I stated,
this is 250,000 American jobs.
It also represents a $2.5 billion positive trade balance.
This is equipment that is manufactured in the U.S. What S. 398
does is provides these manufacturers in this industry with
predictability. With predictability this allows investment,
investment in innovation, investment in manufacturing and
investment in jobs. Ultimately it provides and reduces the cost
to consumers.
My second point related to that this bill needs to be
passed immediately relates to that there are many provisions in
these consensus agreements that cannot be enacted by DOE but
require Congressional action.
These 5 products that we represent relate to water heaters.
In this bill there's a provision where DOE is required to make
a rulemaking on the test procedures for water heaters. The
current test procedures are over 30 years old and do not
reflect current technology available in the market.
For heat pump pool heaters these products are currently not
federally regulated products. They are being regulated by
states around the country. What this bill does is make them
federally covered products and have one national standard.
For small duct, high velocity and through the wall
products, these products are currently being sold in the U.S.
under a waiver from the Department of Energy. These are special
projects used for houses that cannot have the regular systems
that are available on the market. Without this waiver they
would not be able to be sold. What this legislation does is
make them a specific product class.
As for air conditioning, heat pumps and furnaces, there are
provisions in the consensus agreement that allow local States
and municipalities to enact building codes that will allow
higher efficiency levels for products in new construction. DOE
does not have this authority to allow this under current
legislation.
Finally, as it relates to service over the counter
commercial refrigeration products which Senator Burr was
mentioning earlier. These are the ones this evening or tomorrow
as you're heading back home and you grab that sandwich or
bottle of water before you head onto the plane. That is the
kind of equipment we're talking about here.
This equipment was inadvertently included in the definition
of commercial refrigeration equipment in the 2005 bill. This
bill was intended to cover those products that you see in the
supermarket, much larger commercial refrigeration systems.
Because of the efficiency levels required technology today
cannot meet those levels. Therefore without this legislation
making this a separate product class and setting efficiency
levels for this equipment that they can meet. These products
will no longer be able to be manufactured in the U.S. which
means plants will be closed and jobs would be lost.
Therefore we need Congress to act immediately. We were
close last year, as the chairman mentioned in his opening
comments. But these legislative provisions need to be enacted
as soon as possible because without that we won't have jobs,
predictability and the ability to invest in our future.
Thank you.
[The prepared statement of Mr. Yurek follows:]
Prepared Statement of Stephen Yurek, President and Chief Executive
Officer, the Air-Conditioning, Heating, and Refrigeration Institute
Mr. Chairman, Mrs. Murkowski, and Members of the Committee:
I am pleased to be with you today to discuss our support for S.
398. My name is Stephen Yurek, and I am president and CEO of the Air-
Conditioning, Heating, and Refrigeration Institute--the trade
association that represents manufacturers of heating, cooling, water
heating, and commercial refrigeration equipment.
We are proud that our industry is one of the very few U.S.
industries that enjoys an over $2 billion positive balance of trade. We
build equipment here in North America and export it to nations around
the world. The manufacturing side of our industry alone is responsible
for some 250,000 American jobs, and when you add in distribution,
installation, and maintenance, that figure soars to nearly one million
jobs across all 50 states and all U.S. territories.
To begin, I want to commend you, Mr. Chairman, and Ranking Member
Murkowski for re-introducing this bill. As you know, we came within one
vote of passing it by unanimous consent during the lame-duck session.
We hope that we can re-capture that momentum and work with you and your
staff to get it passed this year, ideally before the Department of
Energy issues its final rule on new federal efficiency standards for
central air conditioners and furnaces in May.
I appreciate the opportunity to briefly comment on the key
provisions of this bill that pertain to our industry, but first, it is
important to note that the consensus agreements contained in this bill
are just that: Consensus agreements. That means that industry and
energy efficiency advocates spent a great deal of time in a process of
give and take over the better part of a year to come to agreement on
these provisions.
And when you consider that just a few years ago, we would have been
much more likely to duke it out in a courtroom, it is even more
apparent that this is a better way.
It is important for us to try and work together with our friends in
the environmental community, because what we've found through this
process and several others is that we have essentially the same goals,
but perhaps different ways of achieving them. By working together, we
have not only managed to craft these agreements that will save
significant amounts of energy and money, but we've also established and
strengthened a trust among our organizations that never existed before.
This legislation requires the Department of Energy to conduct a
rulemaking to consider the revision of its residential water heater
test procedure. Updating the test procedure will ensure efficiency
ratings that better fit the range of water heaters in the market today
and will enable consumers to more easily estimate energy savings.
We are very pleased that you included in S. 398 the consensus
agreement establishing for the first time an efficiency standard for
heat pump pool heaters. This standard will provide stability in the
marketplace by leveling the playing field to enable all manufacturers
to compete fairly.
The addition of the agreement we reached with advocacy groups to
establish a federal efficiency standard for a specific type of
commercial refrigeration product known as service-over-the-counter--the
type of product from which you might, for example, grab a sandwich or
soda before you board an airplane--is also appreciated. This standard
is necessary because the legislation enacted by Congress in 2005
establishing federal energy efficiency standards for commercial
refrigeration products inadvertently negatively impacted this product
category. So, without this change, these products will literally no
longer be able to be manufactured and sold, seriously impacting jobs in
many different states.
The inclusion of standards for through-the-wall central air
conditioners, through-the-wall heat pumps, and small duct, high
velocity systems is also appreciated, and will enable manufacturers of
those products to have predictability regarding efficiency levels for
years to come.
Currently, efficiency levels for this equipment are established by
waivers from DOE. Therefore, legislation is necessary to create these
product categories and establish some predictability for manufacturers.
Finally, I want to express AHRI's support for provisions in S. 398
that implement our consensus agreement on residential heating and
cooling equipment--this agreement is another great example of industry
and advocacy groups collaborating to save energy and improve the
environment.
The consensus agreement, which will begin to take effect in 2013--
assuming final passage of this legislation--represents a major step
forward in the nation's drive to increase energy efficiency.
It establishes a new, national efficiency standard for residential
heat pumps, and new standards for central air conditioners in three
regions. In hotter areas, like the southeast and southwest, the new
standard for air conditioners is appropriate for that climate, while
the current federal minimum standard remains in place for cooler areas.
In this way, the consensus agreement lays the groundwork for
significant energy savings and helps make heating or cooling homes more
cost-effective, regardless of climate.
The agreement also contains an important provision that cannot be
realized without congressional action--a provision that would allow the
next generation of homes to be more energy efficient by providing
states the option of adopting building codes for new construction with
more stringent energy efficiency levels than they can under existing
law.
I would also like to affirm the statement you made when introducing
this bill, Mr. Chairman. You said, and I quote: ``Greater energy
efficiency saves consumers money, strengthens our economy, enhances our
national security, creates jobs, and reduces environmental impacts.''
All of that is true, and according to our joint analysis of just
the provision on central air conditioners and heat pumps, the nation
will save about 3.7 quadrillion Btu (quads) of energy between 2013 and
2030. That's enough to provide for the energy needs of 18 million
households for a year. These energy savings will result in annual
greenhouse gas emission reductions of 23 million metric tons of CO2 in
2030, an amount equal to that produced by approximately 4 million cars
every year.
Finally, this agreement will ultimately save consumers about $13
billion in today's dollars, even after considering the increased cost
of more efficient equipment.
As I conclude, please allow me to make one final point: In an
atmosphere where every federal dollar is scrutinized, I would note that
by taking the initiative, we have potentially saved the Department of
Energy--and thus America's taxpayers--millions of dollars, and have
saved DOE staff countless hours of work--hours that can be spent on
other activities.
Again, I want to thank the Committee and your staff for the hard
work in putting this bill together, and I thank you for the opportunity
to testify, Mr. Chairman.
The Chairman. Thank you very much.
Mr. Pitsor.
STATEMENT OF KYLE PITSOR, VICE PRESIDENT, GOVERNMENT RELATIONS,
NATIONAL ELECTRICAL MANUFACTURERS ASSOCIATION
Mr. Pitsor. Chairman Bingaman and Ranking Member Murkowski
on behalf of the National Electrical Manufacturers Association,
I'm Kyle Pitsor, Vice President of Government Relations for
NEMA. NEMA is the trade association representing 430
manufacturers of electrical and medical equipment. I'm pleased
to be here today to present NEMA's views on the importance of
the National Energy Efficiency Standards program and to offer
our views on S. 398 and S. 395.
NEMA supports the robust national energy conservation
program under the Energy Policy and Conservation Act. We
believe that a strong national program of standards, test
procedures and labeling is critical to effectively maximize
energy savings in the Nation and for the consuming public.
Products are manufactured and distributed on national and
sometimes global basis. It is key that energy conservation
regulation for products occur at the Federal level rather than
a patchwork of conflicting State standards.
Mr. Chairman in my written statement I provide NEMA's
positions on various sections of 398. I'll only mention a few
of those in my oral comments.
In section 18 in outdoor lighting efficiency standards 2
years ago the industry and other stakeholders negotiated a
consensus proposal for the establishment of Federal minimum
efficiency standards for pole mounted outdoor lighting. Given
changes in the standards in the market since that time, we are
presently seeking to revise that consensus proposal and hope to
have a package for your consideration for inclusion in this
legislation.
In section 22, NEMA strongly supports the need for a study
on the Appliance Standards program and the level of compliance
and enforcement of the Federal efficiency standards. Our
industry has invested heavily in the Federal program. We are
concerned about certain imported products that are not in
compliance with Federal regulations.
In section 24, dealing with technical corrections since the
passage of the Energy Independence and Security Act of 2007,
several items have been identified that weren't technical
correction to address implementation and other clarification
issues. We urge prompt action on the package contained in the
bill.
Now let me turn, Mr. Chairman, to S. 395, which would
repeal Subtitle B of EISA 2007 law. Today I'm here to reaffirm
our industry support for public policies that encourage
transitioning to more energy efficient lighting and
specifically the bipartisan energy efficient light provisions
in EISA 2007. NEMA does not support its repeal.
First let me correct a common misunderstanding with the
EISA 2007 provisions. They do not ban the incandescent light.
Let me repeat that. They do not ban incandescent light bulbs
nor do they ban the use--nor do they mandate the use, excuse
me, nor do they mandate the use of compact fluorescent lamps or
CFLs.
Second the EISA law reduces lighting energy by setting a
maximum wattage that any bulb can consume for a given light
output. We call that lumens in the industry or the late term
brightness. The light output range is based--are based on the
brightness that consumers currently experience with today's
100, 75, 60 and 40 watt light bulbs.
For example, consumers will still be able to purchase a
general service incandescent light bulb. But instead of using
100 watts as in today's bulb that gives out 1600 lumens they'll
be able to purchase a new 72 or 70 watt light bulb that
produces the same amount of lumens, the same quality of light.
It's fully dimmable and it lasts longer than today's
incandescent light bulb. This bulb represents a 28 percent
savings to the consumer and similar savings will be achieved
with the 75, 60 and 40 watt bulbs. As I mentioned these
advanced bulbs are just like today's bulbs in being fully
dimmable and have the same quality and feel and look of
traditional light bulbs.
Now if a consumer wants greater energy savings they have
additional choices. They can opt for a compact fluorescent bulb
which provides the same 1600 lumens but it uses only 25 or 26
watts of power. This represents a 75 percent savings to the
consumer and it lasts about eight to ten times as long as
today's traditional incandescent light bulb.
Additional advanced lighting products are also entering the
marketplace such as high brightness LED bulbs which represent
over a 75 percent savings with very long lives. Here's 2
examples that are available in the market today. These range
about 25,000 hours as opposed to 750 hours of today's
traditional bulb. These LED bulbs are appearing in the low
wattage ranges in the 60 and 40 area and will gradually come
into the higher wattage and lumen packages.
My point here is that the EISA 2007 provisions expand and
provide consumers with a variety of energy efficient light bulb
choices examples of which which I've shown. While saving them
money on their electrical bills. Providing them light quality
and ambiance options to suit their needs.
When some people hear of change they become anxious. It's
important to note that the law is implemented over several
years beginning this January 2012. Industry has and is making
the necessary investments to meet the new requirements
including a new label that will occur on light bulb packages
that will assist consumers in comparing the expanded options
available to them. Additional consumer education and
informational materials are also taking place including
retailer point of sale information and websites like
lightbulboptions.org. As an industry our industry has committed
heavily to ensuring a smooth transition to more energy
efficient lighting.
In conclusion NEMA supports the consensus provisions in S.
395. We support the lighting efficiency provisions in the
Energy Independence and Security Act of 2007. Do not support
the repeal.
Thank you.
[The prepared statement of Mr. Pitsor follows:]
Prepared Statement of Kyle Pitsor, Vice President, Government
Relations, National Electrical Manufacturers Association
Chairman Bingaman, Ranking Member Murkowski and members of the
Committee: On behalf of the National Electrical Manufacturers
Association (NEMA), I am Kyle Pitsor, Vice President for Government
Relations. NEMA is the trade association of choice for the electrical
and medical imaging equipment manufacturing industry. Our approximately
430 member companies manufacture products used in the generation,
transmission and distribution, control, and end-use of electricity, and
represent about 350,000 jobs. These products are used in utility,
medical imaging, industrial, commercial, institutional, and residential
applications. Domestic production of electrical products sold worldwide
exceeds $120 billion.
I am pleased to be here today to present NEMA's views on the
importance and role of the national energy efficiency standards program
and to offer our views on S. 398 and S. 395.
I would like to note that our member companies support advancing
energy efficiency in the marketplace. NEMA members and their employees
are 'at the very heart of our national effort to reduce energy use
through the research, development, manufacturing, and deployment of
energy-efficient products and technologies. Many energy efficient
technologies exist, and what we all must strive for is wider
recognition, deployment, and use of today's state-of-the-art products
and technologies, as well as support for emerging technologies.
NEMA supports a robust national energy conservation standards
program under the Energy Policy and Conservation Act (EPCA), as
amended. We believe that a strong national program of standards, test
procedures and labeling/information disclosure is critical to
effectively maximize energy savings for the Nation and the consuming
public. Products are manufactured and distributed on a national (and
sometimes global) basis, and it is key that energy conservation
regulation for products occur at the federal level.
Mr. Chairman, I would like to provide our comment on the
legislation and have organized our testimony based on the bill's
sections. We also offer comment on several other topics following our
section-by-section comments which we hope will be considered as the
legislation moves forward.
s. 398 ``implementation of national consensus appliance agreements act
of 2011''
Section 6--Test Procedure Petition Process
The establishment of energy efficiency standards for federally-
covered products and equipment is predicated on the use of recognized
and established consensus test procedures. Without agreed upon test
procedures, it would be impossible to compare efficiency claims among
products. The current program is based on incorporation of relevant
test procedures within the regulatory program under EPCA.
Once the Department of Energy (DOE), or in some cases Congress,
establishes the test procedure for a regulated product, it is important
that the test procedure be evaluated as time passes to ensure that it
stays current with the energy efficiency levels mandated for the
product. When DOE undertakes reviews of the efficiency standard for a
product, it also undertakes a review of the applicability of the test
procedure and whether it needs to be changed or not.
The proposed legislation would permit DOE to consider amending a
test procedure as a result of petition, conduct a public rulemaking to
determine if the test procedure should be amended or not, and set
deadlines. It should be noted that the granting of the petition does
not establish a presumption that the test procedure should be amended,
only that DOE must undertake a rulemaking to make a decision on what
changes to the procedure are warranted, if any, and to publish such a
determination. In addition, for industrial equipment, the legislation
would require DOE to conduct a test procedure rulemaking at a minimum
of once every seven (7) years on a mandated basis.
NEMA supports the need to keep test procedures current based on the
use of recognized and established consensus test procedures. Petitions
under the proposed legislative changes need to include detailed
information on why a current procedure should be amended, otherwise we
fear that very general petitions could be filed that would tie up DOE
resources unnecessarily and be counterproductive to the administration
of the appliance standards program.
Section 17--Prohibited Acts
NEMA supports this section. We believe it is important that channel
partners in the distribution and sale of federally-regulated products
share responsibility in making certain that consumers and end-users
receive the benefit from purchasing energy-efficient products and
equipment that meet federal minimum efficiency standards. Today,
federal law places that responsibility only on manufacturers and
private labelers, which creates a loophole when it comes to compliance
in the marketplace. The loophole unfairly denies manufacturers of
compliant, efficient products of sales opportunities because there are
not uniform incentives to comply with the law. The proposed section
would ensure that all players in the manufacturing, sales, and
distribution channels have a responsibility.
Section 18--Outdoor Lighting Efficiency Standards
Two years ago, the industry, environmental advocates, lighting
designers, and other parties negotiated a consensus proposal for the
establishment of federal minimum efficiency standards for pole-mounted
outdoor lighting. Given changes in the standards and the market since
that time, we are presently seeking to revise that consensus proposal
and hope to have a package for your consideration to be added to this
legislation.
The current Section 18 in S. 398 does contain a provision that
would complete the transition to phase-out the use of mercury vapor
outdoor lighting which was begun with provisions in the Energy Policy
Act of 2005 that prohibit the manufacture or importation of mercury
vapor ballasts. There are several more efficient technologies to
replace mercury vapor that benefit consumers. NEMA supports these
provisions.
Outdoor lighting consumes over 178 TWh according to Navigant
Consulting (data from 2007), the equivalent output of about 17 nuclear
plants (1200 MW) or 34 coal-burning plants. Stated another way,
approximately 22 percent of all the electricity generated in the United
States is used for lighting, and outdoor lighting represents about 20
percent of that total. So, new federal standards, together with
exterior lighting controls, would result in lowering energy bills while
providing users with good quality lighting.
Section 21--Electric Motor-Driven Systems Assessment
Section 21 of this legislation is a requirement for the Department
of Energy to conduct a motor market assessment and commercial awareness
program. NEMA represents all of the major electric motor manufacturers.
Electric motors convert 65-70% of the electrical energy used in
commercial and industrial applications into mechanical energy used to
drive pumps, fans, compressors, blowers, and material handling
equipment. The Market Assessment objectives are to develop a detailed
profile of the current stock of motor-driven equipment in U.S. and
survey how the installed base of industrial horsepower motors is broken
down. This updated assessment will support future legislative,
regulatory, and voluntary programs aimed at increased adoption rate of
motor systems offering greater energy efficiency. Other items this
study will accomplish are: characterize and estimate the magnitude of
opportunities to improve the energy efficiency of industrial motor
systems; survey how many systems use drives, servos and other higher
technologies; how many systems use process control, by application
category, pump, compressor, fan/blower, material handling. Furthermore,
it will develop an updated profile of current motor system purchase and
maintenance practices; how many companies have motor purchase and
repair specifications, including company size, number of employees. And
finally, it will develop methods to estimate the energy savings and
market effects attributable to the DOE's Save Energy Now Program.
In addition to serving DOE's program planning and evaluation needs,
the market assessment is designed to be of value to manufacturers,
distributors, engineers, and others in the supply channels for motor
systems. It would provide a detailed and highly differentiated portrait
of their end-use markets. For factory managers, this study presents
information they can use to identify motor system energy savings
opportunities in their own facilities, and to benchmark their current
motor system purchase and management procedures against concepts of
best practice.
Section 22--Study of Compliance with Energy Standards for Appliances
NEMA strongly supports the need for a study of the appliance
standards program and the level of compliance and enforcement of
federal efficiency standards. Our industry has invested heavily in the
federal program of efficiency standards, test procedures and product
labeling, and are concerned about the levels of imported products that
are not in compliance with federal requirements for certain federally-
covered products. For instance, in the case of federally-regulated
integral electric motors, the U.S. industry members has raised concerns
about equipment with non-compliant embedded motors coming into the
United States which makes U.S. original equipment manufacturers that
build products here uncompetitive and costs jobs. The study will be
valuable in making recommendations on how our enforcement regime should
be structured in light of today's global competitive environment, and
how the DOE and the Customs and Border Protection bureau of the
Department of Homeland Security coordinate enforcement on imported
products that must meet federal efficiency requirements.
We also suggest that the General Accountability Office (GAO), in
coordination with the Department of Energy, be involved in conducting
the study of compliance, compliance options, and enforcement.
Section 23--Study of Direct Current Electricity Supply in Certain
Buildings
The potential energy savings from the implementation of a DC
electricity supply for individual buildings could be significant on the
basis of elimination of the multitude of individual power supplies used
for various information technology, audio-visual and other devices. Use
of a centralized DC electricity supply would require major investment
in new wiring devices (to prevent misconnection with existing systems),
installers would need to establish new practices, and rules for safe
use would need to be developed. The most practical use would be for new
construction or major renovation, as separation of these circuits from
the installed alternating current wiring must be maintained. A study
would be highly beneficial to identify the key considerations and
limitations for implementation of direct current electricity supply.
Section 24--Technical Corrections to EISA
Mr. Chairman, since the passage of the Energy Independence and
Securities Act of 2007 (EISA 2007), several items have been identified
that warrant ``technical correction'' to address implementation issues
and obtain clarification. Since the passage of EISA, NEMA has been
working closely with various stakeholders, several of which are
testifying today, in obtaining a consensus agreement on a technical
corrections bill. We have agreed on a package of non-controversial
corrections and we urge consideration of inclusion of a technical
corrections package as part of this legislation. Several of these
corrections are critical in nature. For instance, the EISA 2007
electric motor provisions came into force on December 10, 2010, yet the
corrections needed to guide the Department of Energy and the industry
on product coverage and requirements have not been enacted into law. We
urge prompt action in this regard.
certain incandescent reflector lamps (light bulbs)
NEMA manufacturers and environmental advocates have also come to a
consensus agreement on updated language for the consideration of a
Department of Energy rulemaking on certain reflector bulbs and
consideration of a new metric for measuring energy efficiency of
reflector bulbs. This is an updated agreement from what was in Section
18 of S. 3924 in the 111th Congress. We ask that the Committee include
this consensus agreement into S. 398 at the next opportunity.
The consensus agreement language proposed would read as follows:
STANDARDS FOR CERTAIN REFLECTOR LAMPS.
Section 325(i) of the Energy Policy and Conservation
Act (42 U.S.C. 6295(1)) is amended by adding at the end
the following:
``(9) REFLECTOR LAMPS.----
(A) In conducting rulemakings for reflector
lamps after January 1, 2014, the Secretary
shall consider:
``(i) incandescent and non-
incandescent technologies; and
``(ii) a new energy-related measure,
other than lumens per watt, that is
based on the photometric distribution
of those lamps.
federal preemption
A fundamental tenet of the Energy Policy Conservation Act, as
amended, is the significant and longstanding principle of express
federal preemption respecting energy efficiency standards. The twin
cornerstones of the ``comprehensive national energy policy'' enacted by
Congress in 1975 to implement EPCA (S. Conf. Rep. No. 94-516 at 116
(1975)) are:
1. The establishment of national standards for energy
efficiency, testing and information disclosure for ``covered
products,'' and
2. Express Federal preemption of State laws and regulations
respecting energy efficiency standards, testing, and
information disclosure for those covered products.
The exceptions to Federal preemption were intentionally narrow: (a)
State petitions for waivers required that States show there were
``unusual and compelling State and local interests'' that were
``substantially different in nature and magnitude from those of the
Nation generally,'' so that achieving the waiver would be difficult;
(b) State procurement standards would be permitted; (c) and a narrowly
drawn exception for State and local building codes that must meet seven
requirements. NEMA supports the current federal and state preemption
provisions.
I mention these matters because as Congress considers improvements
to the federal program, we need to ensure that resources are provided
so that the agencies charged with administering the program are able to
do so, and that the agencies use those resources effectively and
efficiently. In the past, some have proposed weakening pre-emption
because of missed deadlines, which ends up penalizing the manufacturers
for government's lapse.
Attachment.--S. 395 the ``Better Use of Light Bulbs Act''
Mr. Chairman, we are pleased to present our views on S. 395 which
would repeal Subtitle B of the EISA 2007 law. This would include repeal
of the federal energy efficiency standards for general service light
bulbs, repeal of federal efficiency standards for certain spot and
floodlights (incandescent reflector bulbs), repeal of certain federal
efficiency standards for metal halide lighting fixtures (used in
industrial, commercial, and outdoor applications), repeal use of energy
efficient lighting and use of Energy Star products in federal
buildings, and repeal energy labeling of TVs, personal computers, and
other consumer electronics products.
The Lamp Section of NEMA represents 15 companies that sell over 95
percent of the light bulbs (lamps) used in the United States. NEMA
members are engaged in all the various light bulb technologies
including incandescent (and halogen), fluorescent, and solid state
lighting (light-emitting diodes, LEDs)--and serve all lighting
application markets.
Today, I would like to reaffirm our industry's support for public
policies that encourage transitioning to more energy-efficient
lighting, and specifically the energy-efficient light bulb provisions
in EISA 2007. Lighting use in the U.S. consumes 20-22 percent of all
electricity generated. Approximately 40 percent of the electrical
energy consumed in an office building is from lighting use, and about
12 percent of residential electrical energy is for lighting.
First, let me emphasize a common misunderstanding with the EISA
2007 provisions. They do not ``ban'' incandescent light bulbs, nor do
they mandate the use of the common spiral compact fluorescent lamp
(CFL). The EISA 2007 provision focuses on ``general service'' light
bulbs and raises the efficiency standards of those bulbs. The standards
do not cover a variety of bulbs including chandelier bulbs, specialty
and appliance bulbs, or 3-way bulbs.
Second, the EISA provisions reduce lighting energy consumption by
reducing the connected load; that is ``watts.'' The law does this by
setting a maximum wattage that any bulb can consume for a given lumen
range (amount of light from a bulb, i.e, its ``brightness''). As a
result of this approach, the lumen ranges in the law are consistent
with consumer experience with today's standard general service light
bulb categories of 100, 75, 60, and 40 watts.
For example, consumers will still be able to purchase incandescent
light bulbs, but instead of using 100 watts for 1600 lumens
(brightness), the new advanced incandescent/halogen bulb only uses 72
watts for the same amount and quality of light. This represents a 28
percent savings in the connected load to the consumer. Similar savings
will be achieved for 75 watt, 60 watt, and 40 watt bulbs in the lumen
ranges that consumers are used to for those products. These
incandescent bulbs can be dimmed just like today's inefficient bulbs,
will fit the same sockets, and have the same shape and feel, and
quality of light.
The light appearance of these advanced incandescent/halogen bulbs
does not differ from today's inefficient incandescent bulbs. Because
features between newer incandescent/halogen technologies and old
incandescent technologies are almost indistinguishable, there is no
utility lost in replacing an inefficient incandescent bulb with a more
effective incandescent.
If a consumer wants greater savings, they can opt for a compact
fluorescent lamp that provides the 1600 lumens (brightness) but uses
only 25-26 watts. This represents a 75 percent savings in terms of
wattage per bulb to the consumer. Additional advanced lighting products
are also entering the marketplace such as high brightness LED bulbs
which represent over 75 percent connected-load savings and very long
lives. These LED bulbs are already appearing in the market in the lower
wattage replacement areas (40 and 60 watt equivalent lumen ranges)
today, and with further advancements into the higher lumen ranges in
the next few years.
My point is that the EISA 2007 provisions require manufacturers to
reduce the electric power a light bulb uses in producing a certain
output of light. The energy savings for the nation that EISA 2007's
lighting provisions will generate are substantial, and the opportunity
to conserve a substantial amount of energy should not be overlooked.
There are and will be a wide variety of light bulb options for
consumers, including incandescent/halogen, compact fluorescent, and new
advanced technologies like high brightness LED bulbs. Maintaining and
expanding consumer choice is a critical aspect of the EISA law.
The law provides the transition to more energy-efficient light
bulbs take place over several years. The EISA requirements for lumen
output and wattage maximums start January 1, 2012 for the 100 watt bulb
(changes to 72 watts maximum), January 1, 2012 for the 75 watt bulb
(changes to 53 watts maximum), and January 1, 2014 for the 60 and 40
watt bulbs (changes to 43 and 29 watts, respectively). EISA 2007
permitted California to adopt the federal standards one year earlier.
This multi-year transition was critical for manufacturers to have
an orderly process to make the necessary capital investments, ensure
suppliers of new raw materials, invest in new package designs, provide
for safety testing and qualify the products. To repeal the EISA 2007
provisions would strand millions of dollars of investments that the
industry has undertaken in the last 4 years, not only for general
service bulbs, but also reflector bulbs and metal halide lights.
In addition, the multi-year transition provides time to undertake
consumer education and outreach on the new lighting options by
manufacturers, retailers, and other organizations. Further,
manufacturers are including a new information label on light bulb
packages to assist consumers in understanding and selecting the new
lower wattage bulbs that provide the same quantity of light that
consumer are used to. Industry has worked with the Federal Trade
Commission to develop this new label and we are now moving forward with
implementation. Industry has also developed educational information,
such as the 12 ``5 Ls of Lighting'' brochure (attached to my
testimony), websites like www.lightbulboptions.org, and point of sale
information for retailers to use.
When NEMA testified before this Committee in 2007 on the pending
EISA legislation, we noted that a federal regime was crucial in
addressing the lighting market transformation. A host of state
legislatures stretching from Connecticut and Rhode Island, to
California and Nevada were considering widely varied state regulations.
If states had set light bulb standards, manufacturers would have been
faced with conflicting state requirement and a patchwork of rules would
have resulted in different light bulbs for different states. This would
have driven up consumer costs and created significant marketplace
confusion. The EISA 2007 prevents that from happening and ensures a
national market for lighting.
As an industry, the NEMA lighting manufacturers are committed to
ensuring a smooth transition to more energy-efficient lighting that
provides a continued choice of light bulb options for consumer
selection. Our industry is investing heavily in research and
development, innovation, and new products to meet consumers demand and
interest for efficiency and light quality. More products are becoming
available every day to fill the over 4 billion light bulb sockets in
the United States.
conclusion
In conclusion, NEMA supports the consensus provisions in S. 398 as
outlined in my testimony, and we support the lighting efficient
provisions in the Energy Independence and Security Act of 2007, and
therefore oppose S. 395. NEMA members are committed to advancing the
use and deployment of energy efficient technologies, and recommend the
following:
1. Support a petition process to amend current test
procedures, as needed (Section 6)
2. Support provision to enhance marketplace compliance of
federal requirements (Section 17)
3. Support the study on compliance and enforcement of the
appliance standard program, especially of concern with imported
products (Section 22)
4. Support the Motor Assessment study and the study on
benefits and costs of Direct Current supply in certain
buildings (Sections 21 and 23)
5. Support prompt action to enact the ``EISA 2007 Technical
Corrections'' package (Section 24)
6. Support adding a provision on certain incandescent
reflector products
7. Support EISA 2007 Subtitle B ``Lighting Efficiency''
(Reject S. 395)
Mr. Chairman, Ranking Member Murkowski and Members of the
Committee, thank you very much for the opportunity to provide these
remarks and recommendations to the Committee today on behalf of our
industry.
The Chairman. Thank you very much.
Dr. Cooper.
STATEMENT OF MARK COOPER, DIRECTOR OF RESEARCH, CONSUMER
FEDERATION OF AMERICA
Mr. Cooper. Mr. Chairman, members of the committee, I
appreciate the opportunity to share our views on this important
legislation.
There are 4 primary reasons that the Consumer Federation of
America has long supported energy efficiency standards for home
appliances and other consumer products. Why we support S. 398
and oppose S. 395.
First, the energy efficiency standards are consumer
friendly. They will produce direct pocketbook savings for
consumers. That is the reduction in the monthly bills for
electricity and natural gas, exceed the increase in the cost of
the technologies needed to lower energy consumption.
Second, the energy efficiency standards are technology
neutral and pro competitive. The minimum efficiency standards
establish a performance standard but do not dictate which
technologies or how those standards should be met. Private
sector firms compete around those standards in the marketplace
developing technologies they think will meet the standard at
the lowest price. The competition produces new goods and keeps
costs down.
Third, energy efficiency standards are the most effective
way to correct the undervaluation of energy efficiency in the
residential market. The U.S. needs to lower its energy
consumption and consumers need to reduce their home energy use.
But numerous imperfections in the marketplace prevent consumers
and the Nation from getting to the optimum level of energy
efficiency.
Raising minimum efficiency standards lowers the supply side
risk of investing in more efficient products. For manufacturers
it helps the new products get to scale more quickly. On the
demand side it addresses critical gaps in the consumer
evaluation of, information about and motivation to purchase
energy savings technology. It helps the market on both the
supply and demand sides.
Finally minimum standards for home energy consumption enjoy
widespread public support. We've submitted a public opinion
poll which show that 95 percent of the consumers think it's
beneficial to lower their consumption. They know it's good for
their pocketbooks. Almost 3 quarters support minimum efficiency
standards.
Our analysis which we have also submitted for the record of
the market failures is absolutely critical. We've identified a
range of imperfections in the marketplace that lead it to
undersupply efficiency. The public perception and support for
these standards is, in fact, consistent with the economic
reality. Performance standards that are technology neutral and
pro competitive are the ideal way to address many of these
market imperfections. Especially and as long as the statutes
require they are economically practicable and technically
feasible.
These standards are well within the frontier of what the
industry can do which is why we've been able to hammer out this
consensus agreement. So if you look at the marketplace and you
see products that harm consumers. That are bad for national
energy policy. That are bad for national security. You can get
rid of them by a performance standard which is neutral and
lowers the cost to consumers.
A performance standard makes us all better off. That is why
the public supports them. That is why this Congress should
support them as well.
Thank you.
[The prepared statement of Mr. Cooper follows:]
Prepared Statement of Mark Cooper, Director of Research, Consumer
Federation of America
Mr. Chairman and Members of the Committee,
My name is Dr. Mark Cooper. I am Director of Research at the
Consumer Federation of America (CFA). Formed in 1968, CFA is an
association of some 300 non-profit organizations, working to advance
the consumer interest through research, education, and advocacy. We
greatly appreciate the opportunity to appear before you today to let
you know of our support for S. 398, the Implementation of National
Consensus Appliance Agreements Act of 2011 (INCAAA) and to urge
Congress to reject efforts to repeal appliance efficiency standards
already on the books, and in this instance, S. 395, the Better Use of
Light Bulbs (BULB) Act. We also think it is useful to share our overall
consumer perspective on energy efficiency standards for home appliances
and other consumer products.
We vigorously support the enactment of S. 398, the Implementation
of National Consensus Appliance Agreements Act of 2011, to speed the
adoption of appliance efficiency standards that were agreed to last
year by manufacturers, efficiency, environmental and consumer groups,
including CFA. We regret that the Senate failed to act on this non-
controversial legislation at the end of the last Congress. And, we urge
Congress to reject efforts to repeal efficiency standards that are
already on the books. We support cost-effective energy efficiency
standards for all appliances and consumer products that consume energy
in the home.
It is noteworthy that in 2009, household expenditures on home
energy, for electricity and natural gas, and other heating fuels, were
$2,000, equal to household expenditures on gasoline for the first time
ever. This cries out for decisive action by policymakers to support and
promote increased energy efficiency standards on all fronts. Consumers
and our economy will benefit.
There are four primary reasons that we have long supported energy
efficiency standards for home appliances and other consumer products.
First, the energy efficiency standards are consumer-friendly. They
will produce direct pocketbook savings for consumers. The reduction in
the monthly bills for electricity and natural gas exceed the increase
in the cost of the technologies needed to lower energy consumption. The
homes in which consumers live will command higher resale because they
are more energy efficient.
Second, the energy efficiency standards are technology neutral and
procompetitive. The approach to minimum efficiency standards in the
INCAAA bill, as well as the earlier standards adopted by the Congress
for lighting, establish a performance standard, but do not dictate how
those standards are met. Private sector firms compete around those
standards in the marketplace, developing the technologies they think
will meet the standard at the lowest price. This competition produces
new goods and keeps the cost down. Declining out of pocket energy
expenditures allows consumers to spend more resources on other goods
and services, which grows the economy.
Third, energy efficiency standards are the most effective way to
correct the undervaluation of energy efficiency in the residential
market. The U.S. needs to lower its energy consumption and consumers
need to reduce home energy expenditures, but numerous imperfections in
the marketplace prevent consumers and the nation from getting to the
optimum level of energy efficiency. Raising minimum efficiency
standards lowers the supply-side risk of investing in more efficient
technologies for appliance manufacturers and helps new products get to
scale more quickly. They address critical gaps in the valuation of,
information about, and motivation to adopt energy saving technologies.
Finally, minimum standards for home energy consumption enjoy
widespread public support, which makes an even more compelling case for
S. 398, which includes several consensus agreements that are the
product of a collaborative consensus building policy process. The
public wants policy makers in Washington to work together to solve the
nation's problems. When the representatives of the industry that
produces the goods and proponents of energy efficiency including
consumer groups, hammer out agreement on an important product attribute
like energy efficiency, it would be foolhardy for Congress to turn its
back on such a historic consensus.
The industry and technical experts at today's hearing will testify
to the sound economic and technological basis for these standards, with
which we whole heartedly agree. So in my testimony, I will focus on the
last two points above, beginning with public support and then turning
to the analysis of the need for standards to correct market
imperfections that lead to market failure. I have attached two
appendices that contain detailed analysis of these two issues.
public support
Appliance Energy Efficiency and Standards
The Consumer Federation of America has recently conducted a
national random sample public opinion poll on home energy consumption
and minimum efficiency standards for appliances. My analysis of the
results is attached to this testimony as Appendix A.* We find that the
public overwhelmingly recognizes the benefits of energy efficiency in
the home and supports energy efficiency standards.
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* Appendix A has been retained in committee files.
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Specifically, we found:
Nearly all Americans (95%) think it ``beneficial for
appliances like refrigerators, clothes washers, and air
conditioners to become more energy efficient,'' with 78%
believing this increased efficiency to be ``very beneficial.''
Nearly all Americans (96%) think improved appliance
efficiency is important for personal financial reasons--
``lowering your electric bills''--with 80% considering this to
be very important. However, large majorities also believe
improved appliance efficiency to be important for environmental
reasons--because it reduces the nation's consumption of
electricity ``to reduce air pollution'' (92% important, 77%
very important) and ``to reduce greenhouse gas emissions'' (84%
important, 66% very important).
Substantial majorities also favor improved energy efficiency
of appliances even when this increases the purchase price of
appliances. This support predictably varies with the payback
period: 3 years (79% favor, 35% favor strongly), 5 years (73%
favor, 32% favor strongly), and 10 years (60% favor, 29% favor
strongly).
Only about two-thirds of Americans (68%) are aware that the
``government requires new appliances like refrigerators,
clothes washers, and air conditioners to meet minimum energy
standards.''
Respondents who are aware of the minimum standards are more
likely to support them (74% to 64%).
But nearly three-quarters of Americans (72%) support ``the
government setting minimum energy efficiency standards for
appliances,'' with strong support from 28%.
We believe this is very compelling data that demonstrate clearly
consumer desire and support for cost-effective energy efficient
products.
Other Surveys on Efficiency
Our recent survey focused on appliance efficiency and minimum
energy efficiency standards. There are other products that consume
electricity in the home--lighting in particular--and other programs
that provide incentives for energy efficient purchases. Recent public
opinion polls by others have addressed these products and policies, and
they yield similar results, which are worthy of mention.
Two recent polls address the issue of lighting. A USA poll found
that 61 percent of respondents thought the law that raised efficiency
standards was a good law. These parallel the findings of our appliance
efficiency survey. A study by Sylvania found that when respondents were
asked about the transition to more efficient light bulbs, twice as many
said they are ``excited. . . because Americans will use more efficient
light bulbs,'' as said they are ``worried. . . because I prefer using
traditional light bulbs. Younger respondents and those who had heard
about compact florescent lights were more likely to say they were
excited. This parallels our demographic and awareness finding.
A study by Consumers Union asked people who had purchased a more
efficient appliance what motivated them: 74% said saving money, while
49% said the environment. This parallels our findings on the perceived
benefits of appliance standards. Awareness of utility rebates for
energy efficient appliances and for retiring inefficient appliances was
67%, which is quite close to the 68% awareness of appliance efficiency
standards in our survey.
CFA has conducted extensive polling and analysis of fuel economy
standards that yields similar results. Levels of support for the
general concept of fuel economy standards are in the range of 60% to
70% and in the most recent survey, 59% of respondents supported a fuel
economy standard of 60 miles per gallon for 2025. Payback periods are
consistently the greatest concern, as is the case in the appliance
survey. Payback periods for fuel economy investments of five years are
viewed favorably by a large majority of respondents (73%) as they are
for appliances (73%).
Broader Public Opinion
Some may feel that these findings fly in the face of broad public
sentiment about the role of government. That is not the case at all.
When the public is asked about specific actions that protect consumers
or promote the public interest, they are quite supportive across a
surprisingly large number of areas of economic activity. Public opinion
polls show that 70 percent or more of the public wants the government
to do as much or more with respect to distracted driving, food safety,
fuel economy, privacy, oil drilling, the environment, and financial
services, as well as energy efficiency.
In general, we find that the more deeply we delve into the specific
areas, the higher the public support becomes. Our research shows that
there is a consistent, significant positive correlation between
perceived benefits and support for standards. We find that the more
people know about energy consumption, the more they support the
standards. When we explore the relationship between industry
performance and standards, we find that support grows where respondents
think the industry has not done a good job.
Standards are an Effective Response to Market Imperfections
Our analysis of the ``energy efficiency gap'' shows that the public
perception of energy efficiency and the support for efficiency and
standards is well-grounded in market reality. Our analysis of the
energy efficiency gap identifies a number of market imperfections that
cause the market to undersupply energy efficiency. Appendix B,* which
was prepared for a proceeding on motor vehicle fuel economy standards,
provides a detailed analysis of the causes of this market failure and
why minimum performance standards are an ideal policy to address these
market imperfections and ameliorate the market failure. The public
attitudes and perceptions we find in surveys reflect the reality that
consumers face in the marketplace. They understand that the marketplace
does not produce the optimum level of investment in energy efficiency.
---------------------------------------------------------------------------
* Appendix B has been retained in committee files.
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As described in great detail in Appendix B, economists and policy
analysts with very different perspectives have identified a couple
dozen causes of market failure when it comes to energy efficiency. In
our analysis, we have grouped these into five broad areas----
Societal issues where important values are not well
reflected in market transactions: e.g. consumption and
production externalities, national security values and
environmental impacts.
Structural conditions that result in inefficient outcomes:
scale problems, bundling of multi-attribute products, product
cycles, lack of availability, lack of experience with new
products.
Endemic tendencies of economic relationships that undermine
key market functions: e.g. agency issues (e.g. landlord-tenant,
builder-buyer), asymmetric information, first cost sensitivity.
Transaction costs create frictions that impose costs and
constrain exchange: e.g. sunk costs, new product risk &
uncertainty, imperfect information.
Behavioral, psychological and other human traits that bound
``maximizing'' actions, e.g. motivation, difficulty of
calculation and discounting (projecting future energy
consumption and prices).
These imperfections drive the market to an equilibrium at which the
nation consumes far more energy than is economically efficient or
socially desirable. Some analysts blame the market outcome on consumers
and interpret it to mean that consumers apply an irrationally high
discount rate to energy efficiency investments. We reject that claim.
The discount rate implicit in consumer purchases reflects the full
range of market conditions on both the supply-side and the demand side.
In fact, there is frequently a separation between the builder or
purchaser of buildings and appliances and the user. Demand is most
directly determined by producers (landlords and builders) not
consumers. Even when they do consider efficiency investments, consumers
may not find the more efficient appliances to be available in the
marketplace. Purchasers may prefer less efficient products because they
have lower first costs and are more familiar. Suppliers may not stock
efficient appliances and may not install them properly, as it requires
different skills or considerations. Thus, the marketplace may offer an
inadequate range of options to consumers in many instances. Consumers
and producers both exhibit a first cost bias. Individual firms have
little incentive to invest in basic research or to deploy enabling
technologies because they have difficulty capturing the gains. To be
sure, there are imperfections on the consumer side as well. Consumers
are not well-informed and are unprepared to conduct the appropriate
analysis. They lack the information necessary to make informed choices
and perceive differences in quality and the availability of options
that may be based on inertia more than reality.
Performance standards that are technology neutral and
procompetitive are an ideal way to address all of these imperfections,
as long as the level chosen is well within the frontier of what is
economically practicable and technologically feasible. The fact that
industry and efficiency, environmental and consumer advocates have
agreed on the level of the standards in the consensus agreements
contained in S. 398, the INCAAA bill, is a good indication that the
standards meet this basic criteria.
The following market imperfections that cause the appliance market
to provide less efficiency than it should are addressed by performance
standards:
SOCIETAL FAILURES ENDEMIC FLAWS TRANSACTION COSTSExternalities Agency Sunk Costs, Risk
Information as a public good Asymmetric Information Risk & Uncertainty
Moral Hazard Imprefect Information
STRUCTURAL PROBLEMS BEHAVIORAL FACTORSScale issues Motivation
Bundling Calculation/Discounting
Cost Structure
Product Cycle
Availability
We hope you can appreciate the numerous reasons why the Consumer
Federation of American supports appliance energy efficiency standards
and their benefits to consumers. We believe S. 398, the INCAAA bill,
should be adopted, and can't see any reason why it shouldn't be. The
legislation will strengthen and improve energy efficiency for a wide
range of consumer products. We also believe that the current standard
for lighting products should be kept in place and that S. 395, the BULB
Act, should be rejected. Our analyses have shown that consumers will be
better off, and public opinion polls have found that this is what they
want.
Thank you for this opportunity to share our views on appliance
energy efficiency standards and legislation.
The Chairman. Thank you very much.
Mr. Brandston.
STATEMENT OF HOWARD BRANDSTON, LIGHTING CONSULTANT,
HOLLOWVILLE, NY
Mr. Brandston. Chairman Bingaman, Ranking Member Murkowski,
thank you for inviting me to testimony in support of S. 395,
the Better Use of Light Bulbs Act.
I'm a lighting designer with over 50 years experience. I've
completed nearly 3,000 projects in approximately 60 countries.
I am particularly proud of the work I did for my country. A
short list of that work you might recognize is the U.S.
Pavilion at Expo 70 in Japan, Women's Rights National Historic
Park, Seneca Falls, Memorial for Women in Military Service at
Arlington National Cemetery and the relighting of the Statue of
Liberty.
I'm here today to ask that you revisit a portion of the
Energy Independence and Security Act of 2007 that provides for
a de facto ban on traditional incandescent light bulbs. I
firmly believe that the restrictions put on incandescent lamps
will have a significant negative impact on almost every
residence in our country. I believe how one lives in their home
is a decision that rests with the occupant. Is not the purview
of the government.
I believe this violates the very principles upon which this
Nation was founded. I, as a devoted citizen, am most proud of,
our freedom of our choice and our personal lives. What disturbs
me even more that the restrictions placed on incandescent lamps
will not save enough energy, be worth the expense and the risks
that every person in America will be subjected to.
Some of the most knowledgeable people I know have begun to
stockpile a lifetime supply of incandescent lamps to protect
themselves from the need to use compact fluorescent lamps. The
public at large does not understand these problems as these
professionals do. Further the misleading claims made about the
benefits of the lamp technologies that are touted as beneficial
replacements seduce people to purchase these products.
We have over 100 years experience using incandescent lamps.
By comparison we have very little experience using the new
light sources especially in residences. You will hear a wide
range of statistical data of energy saved in comparative terms,
in comparative terms, that give the illusion of saving energy
in the environment. The plain truth is according to the Energy
Information Administration only 3.6 percent of total energy is
consumed by incandescent lamps.
So you will save some portion of that miniscule number. But
I ask when you enter everyone's home and subject them and their
families to the potential list--the list of potential
consequences that I will list is not worth it. I do not believe
it is. I practice in those homes.
Consider the following.
One, lighting is not a product. It is a system designed for
a purpose. This act separates one component of that system, the
light source, and destroys the success of the final design.
Two, although lamp manufacturers are developing new sources
to compete with the incandescent lamp if they are so superior
they should be able to complete in the open marketplace where
price will be a factor. Alternative lighting to the
incandescent lamp will have to be worth the price differential.
The compact fluorescent lamp contains mercury. One gram of
mercury will pollute a 2 acre pond. This 2007 light bulb
standard brings a deadly poison into every residence in our
Nation. The plastic lamp jacket warning is totally insufficient
to protect the user. It is a cop-out to protect the
manufacturer.
Five, we do not have enough knowledge of the potential
consequences of being continuously exposed to the
electromagnetic fields compact fluorescent lamps emit. There
are millions of people in this country with Lupus, an auto-
immune disease. Exposure to low doses of lights from these
lamps causes a severe rash. There are over 100 auto-immune
diseases.
Currently--6, currently you come home and your old
fashioned incandescent lamp provide a safe, flattering,
comfortable scene. You can easily dim these old lamps and the
light they emit becomes even more inviting.
Seven, the compact fluorescent lamp does not dim well and
the color of the light it emits deteriorates as you continue to
dim it. You change the color of your furniture.
If you do not install these lamps in appropriate fixtures
they might cause a fire. Save energy by incinerating part of
your house.
Nine, the cost to retrofit your lighting to use these new
light sources may be beyond the financial and technical
capacity of most home owners.
Ten, this standard sends jobs to China.
I have a particular passion for saving energy. I was a
member of the committee that wrote the first energy code for
the USA in 1975. My contribution was the mathematical formula
that set the upper power limit for lighting in that code. It
was a performance based equation, not a product restricting
simplistic equation. The Energy Information Administration
noted by the year 2000 it cut the energy used for lighting to
pre-1970 levels. It cut to less than half the energy used for
lighting by 1990.
The Energy Independence and Security Act of 2007 ignores
the fundamentals of good lighting practice and intrudes on our
ability to choose how we live. Please respect the privacy in
our homes. Allow people their indispensible right to choose how
they live and light their homes and eliminate the restrictions
on the incandescent lamp.
Thank you. I look forward to answering any questions you
may have.
[The prepared statement of Mr. Brandston follows:]
Prepared Statement of Howard Brandston, Lighting Consultant,
Hollowville, NY
Chairman Bingaman and Ranking Member Murkowski, thank you for
inviting me to testify today in support of S. 395, The Better Use of
Light Bulbs Act.
My name is Howard Brandston--I am a lighting designer with over 50
years experience and have completed nearly 3000 projects in
approximately 60 countries. I am particularly proud of the work I did
for my country, the United States of America. A short list that of that
work you might recognize includes: The US Pavilion, Expo 70, Japan;
Women's Rights National Historic Park, Seneca Falls, NY; Memorial for
Women in Military Service, Arlington National Cemetery, Washington DC
and the relighting of the Statue of Liberty, New York City, NY.
I am here today to ask that you revisit a portion of the Energy
Independence and Security Act of 2007 that provides for a de facto ban
on the traditional incandescent light bulbs. I firmly believe that the
restrictions put on incandescent lamps will have a significant negative
impact on almost every residence in our country. I believe how one
lives in their home is a decision that rests with the occupant and is
not the purview of the government. I believe this violates the very
principles upon which this nation was founded and I, as a devoted
citizen, am most proud of, our freedom of choice in our personal lives.
What disturbs me even more is that the restrictions placed on
incandescent lamps will not save enough energy to be worth the expense
and the risks that every person in America will be subjected to. Some
of the most knowledgeable people I know have begun to stockpile a
lifetime supply of incandescent lamps to protect themselves from the
need to use Compact Fluorescent Lamps. The public at large does not
understand the problems as these professionals do. And further, the
misleading claims made about the benefits of the lamp technologies that
are touted as beneficial replacements seduce people to purchase these
products. We have over 100 years experience using incandescent lamps.
By comparison we have very little experience using the new light
sources--especially in residences.
You will hear a wide range of statistical data of energy saved in
comparative terms that give the illusion of saving energy and the
environment-the plain truth is--according to the Energy Information
Administration--only 3.6% of total energy is consumed by incandescent
lamps. So you will save some portion of that miniscule number. But I
ask, when you enter everyone's home, and subject them and their
families to the list of potential consequences I will list, is that
worth it? I do not believe it is.
Consider the following:
Lighting is not a product--it is a system designed for a
purpose. This act separates one component of that system, the
light source, and that destroys the success of the final
design.
Although lamp manufacturers are developing new sources to
compete with the incandescent lamp, if they are so superior
they should be able to compete in the open marketplace where
price will be a factor. Alternative lighting to the
incandescent lamp will have to be worth price differential.
The Compact Fluorescent Lamp contains mercury. This 2007
light bulb standard brings a deadly poison into every residence
in our nation. The plastic lamp jacket warning is totally
insufficient to protect the user. It is a cop-out to protect
the manufacturer.
We do not have enough knowledge of the potential
consequences of being continuously exposed to the
electromagnetic fields Compact Fluorescent Lamps emit. There
are millions of people with Lupus, an auto-immune disease.
Exposure to low doses of light from these lamps causes a severe
rash. There are over one hundred auto immune diseases.
Currently you come home and your old fashioned incandescent
lamps provide a safe, flattering comfortable scene. You can
easily dim these old lamps and the light they emit becomes even
more inviting.
The compact fluorescent lamp does not dim well and the color
of the light it emits deteriorates as you continue to dim it.
If you do not install these lamps in appropriate fixtures
they might cause a fire. Save energy by incinerating part of
your home.
The cost to retrofit your lighting to use the new light
sources may be beyond the financial and technical capacity of
most home owners.
This standard sends lamp-manufacturing jobs to China.
I have a particular passion for saving energy--I was a member of
the committee that wrote the first energy code for the USA in 1975. My
contribution was the mathematical formula that set the upper power
limit for lighting in that code. It was a performance based equation--
not a product restricting simplistic solution. The Energy Information
Administration noted that by the year 2000 it cut the energy used for
lighting to pre-1970 levels. It cut in less than half the energy used
for lighting by 1990.
The Energy Independence and Security Act of 2007 ignores the
fundamentals of good lighting practice and intrudes on our ability to
choose how we live. Please respect the privacy of our homes, allow
people their indispensible right to choose how they live and light
their homes and eliminate the restrictions on the incandescent lamp.
Thank You. I look forward to answering any questions you may have.
The Chairman. Thank you very much.
Senator Risch, we have already had a chance to ask
questions of the first panel. We're now to the second panel.
Did you want to start off the questioning here of the second
panel?
Senator Risch. I will, but I probably shouldn't.
The Chairman. You can if you'd like.
Senator Risch. You know, I wasn't here in 2007 when they
passed this. But, you know, this is absolutely ludicrous. Mr.
Brandston, you and I come from a different era, I guess.
You know you look at the eagle of the United States. They
wanted in my home to take over my health care. I mean, people
in Idaho are just astonished that the Federal Government is
telling them what kind of light bulbs they've got to put home.
I mean, you know, where's this country gone? It's just--it's
absolutely amazing.
To me when I got here and I heard about this law and by the
way this law was not well vetted out in public when it was
passed in 2007. But when I heard that they were going to
mandate. That they were going to put these mercury bulbs in
every home in America, in every school, in every hospital and
everything else. Has anybody looked at the EPA recommendations
put out January 25, 2011, as to what you do if one of these
mercury light bulbs break in your home?
I mean, in Idaho we've had a number of instances where
they've had a mercury spill in a science laboratory or
something in the laboratory in the school. They immediately
close the school down for, I don't know, a number of days while
they clean it up. Can you imagine mercury bulbs throughout a
school?
I mean, any time a kid wants a day off he's going to break
a mercury light bulb. That's going to shut that school down. If
they don't they're going to have trouble with the EPA according
to what has to happen to clean it up.
So, in any event I think--you know, Dr. Cooper, I heard you
use the term--I forgot the exact term you used, anomalies in
the marketplace or something. What was the term you used on?
Dr. Cooper. Imperfections.
Senator Risch. Imperfections, yes. Whenever I hear about
imperfections in the marketplace I hate hearing that because
I'm a free market guy, an open market guy. But the only thing
that troubles me more than imperfections in the marketplace is
the government trying to fix it because I guarantee you that is
not going to happen.
In any event those are all the questions I have. Thank you,
Mr. Chairman.
The Chairman. That's an interesting set of questions.
[Laughter.]
The Chairman. Let me ask a couple of questions.
I think there's a basic confusion here. I think some of the
witnesses have tried to clarify it. But the law that was passed
in 2007 does not mandate the use of compact fluorescent light
bulbs. At least that's my understanding.
It does not require that. It sets minimum efficiency
standards for lighting. Then it leaves it up to the
manufacturers to determine what technology to use.
In fact I thought I heard a couple of witnesses here
describing incandescent light bulbs that met the standard. That
were available for purchase. Mr. Pitsor, maybe you could
respond and tell me if I'm right or if I'm wrong about my
understanding.
Mr. Pitsor. Thank you, Mr. Chairman. The EISA 2007
provisions again, do not mandate CFLs. They do not ban
incandescent light technologies.
As you describe the standards set a performance requirement
that for a given amount of light output from a bulb. There's a
maximum wattage that that bulb can consume to produce that
light. So instead of 100 watts being used to produce the
brightness of 1600 lumens we now have advanced incandescent
technologies that produce that same amount of light using only
72 watts, meaning 28 percent fewer watts, meaning a 28 percent
reduction in the cost of that bulb to the consumer in terms of
their light--their energy bill.
So there's an incandescent technology that's available
today. It's available from 3 manufacturers today and more
coming that are on sale in California because as mentioned
earlier California adopted these same Federal standards 1 year
earlier that was provided for in the legislation. Those bulbs
are now available for sale in California. Will be available
nationwide starting January 2012.
The Chairman. Yes, Dr. Cooper, did you have a comment on
that?
Mr. Cooper. I'm sitting here and there's a certain sense in
which this kind of performance standard, technology neutral and
pro competitive is the perfect example of how you do this
right. I'm sitting here with 4 or 5 different approaches to
light bulbs by every manufacturer who are going to get out
there and compete. If dim ability is so important than that
incandescent which meets the standard will win in the
marketplace. This statute has not done anything to tilt that
playing field.
At the same time the question of why we should dare to
think about establishing a minimum performance standard is
there's a fundamental, philosophical difference, no doubt. Some
people think we never should have put seat belts in cars. When
private behavior kills people this society has had the good
sense to say we're going to take some behaviors and move them
out of the marketplace. There's a different philosophy here.
Every person who is alive today because we adopted a seat
belt law or an air bag standard speaks to the value and the
correctness of making these kinds of decisions. But do it
right. I'm a firm believer in the marketplace. But where there
are places the marketplace won't solve it, you do it right and
you get this. In a few years all of these complaints will
disappear exactly because we unleashed this competition.
The Chairman. OK.
Mr. Brandston.
Mr. Brandston. Lighting is a little more complex than that,
unfortunately. This is a very simplistic approach. Certainly
the product standards, I'm all for things like that. But
lighting is a system.
When you look at the amount of money that's been
advertising pushing compact fluorescent lamps today, we're
pushing danger in our homes. We're pushing illness. We're
pushing potential fires, etcetera, because that is the main
thrust technology that people are focusing on.
The new high performance incandescent lamps which are--
which have not really been examined in total. I'm a person who
put hundreds of millions of sockets out there, right? I put
millions of dollars worth of lights in buildings, homes across
the world. These lamps may not work in those fixtures.
I've got millions of sockets out there. The light center
length of these may not--and the basic ratio of the scale of
the lamp, may not work. So you're going to ask all these places
to refit their lighting. The energy cost of refitting that
lighting is a technological mess.
So if we let the marketplace just do its job when new
projects come along we won't be specifying standard
incandescent lamps. We will be specifying the new products with
the fixtures that are made to use them. We won't be putting
hazards everywhere else when people try and retrofit some of
these things into improper fixtures and ones that won't give
the right light distribution.
If you notice the light center length is perfect. The light
fixture doesn't work. So it's a system.
We have to respect that system. What this standard does is
ignores it totally. It focuses on one third of the components
of the lighting system. That is why it should be withdrawn and
let the marketplace do it. Let--believe me the professional
designers will not be specifying the old lamps.
The Chairman. Let me just ask--I mean, my understanding is
if the new products that are being manufactured in accordance
with these standards don't work they're not going to be--
consumers aren't going to be buying them in any great numbers.
I assume that there's a self interest on the part of the
manufacturers in putting products on the market that actually
work. Am I missing something here?
Mr. Pitsor.
Mr. Pitsor. Mr. Chairman, when the bill was passed in 2007
it provided a phase in period for that exactly for the reason
you indicated in terms of making sure that the manufacturers
undertook the investment and the testing of these products and
the qualification of these products to make--to meet safety
standards and performance standards and to ensure that
interchangeability. These are the same basis. They're the same
shape. They fit in the same sockets, in the same fixtures as
today's incandescent bulb.
So there's interchangeability to ensure consumers have
choices. Ensure that consumers have good products. That's all
what the manufacturer has been focused on over the last 3
years.
The Chairman. I'll just make the other point that I think
should be obvious. There's nothing retroactive about any of
this legislation. I mean, this is----
Mr. Pitsor. Right.
The Chairman. In the future we're trying to specify the
minimum standards that we want products to meet if they're
going to be sold in the marketplace. But there's nothing
retroactive that puts the pressure on a consumer to retrofit or
change out or anything else.
Senator Risch. Mr. Chairman.
The Chairman. Senator Risch.
Senator Risch. Mr. Pitsor, what's the cost of the one in
your right hand and what's the cost of the one in your left
hand?
Mr. Pitsor. The 100 watt today runs about 25 to 50 cents
initial cost. Then operating it over its life times, you know,
12 or 13 cents per kilowatt hour over its life at 100 watts.
Probably operating cost is probably $11 for its life.
The new incandescent advanced halogen product costs about a
$1.50 to $2. They're just coming onto the market, so initial
price is somewhat higher. But over its life you're saving 28
percent in wattage, 72 watts or 70 watts. So the cost over life
is about $8.
So you're saving about $3 that you get to keep in your
pocket times every socket you have in your home when you do
this conversion.
Senator Risch. I gather you're the frame of mind that the
American people aren't smart enough to figure this out in the
marketplace?
Mr. Pitsor. Part of the information is--well part of the
challenge is providing consumer information on those choices.
That's part of the transition as well. The new lamp label is
going to provide the information on the total operating cost of
these new bulbs.
Senator Risch. I don't disagree with that at all. But I
guess a free people should be able to make that decision
without the government saying you will put this kind of a bulb
in your home. You can't sell the other kind.
I guess we just have a basic philosophical difference on
that. Is that--would that be a fair statement?
Mr. Pitsor. We've seen, you know, over the last and
mentioned in earlier testimony, the last 4 or 5 years consumers
increasingly moving toward more energy efficient products.
Senator Risch. More power to them.
Mr. Pitsor. This will further accelerate that move in terms
of providing them more money they can keep in their pocket
because they're very conscious about energy costs.
Senator Risch. OK. Thank you, Mr. Chairman.
The Chairman. Senator Murkowski.
Senator Murkowski. Thank you. It's interesting listening to
the discussions going back and forth and whether or not we have
choice in what we put in our home. You've held up a couple
different choices. Clearly cost is a factor. As families look
to their purchasing decisions, that is something that is out
there.
I was just sitting here thinking, what has been taken off
the market in my adult life that I really liked, that I now
don't have a choice to buy. I'm going to date myself here, but
I really liked the eight track cassettes.
[Laughter.]
Senator Murkowski. I can't buy them anymore. Does that mean
that I have been denied the choice?
Senator Risch. Madame Chairman, I would not that the
Federal Government did not outlaw eight track cassettes.
Senator Murkowski. They did not outlaw it. But Dr. Cooper,
you have used an interesting analogy there with the standards
that we have put in our vehicles. I think you probably can't
purchase a vehicle today that doesn't have safety belts in it.
Do we say that our choice is restricted or limited?
These are different issues. But I think it's been a good
discussion about what we have in play here. I want to ask the
question though because there have been some good points that
have been raised about the CFLs.
I started off by saying that it buzzes and it flickers. I'm
not so keen on the quality of the lighting. Mr. Brandston
pointed that out as well.
Several others have mentioned the mercury issue. But I
would agree with some of the comments that the chairman has
made as well: as the consumer is a more educated consumer, we
make those decisions in terms of what it is that we want in our
home. Whether it's the CFLs or the new incandescent. Mr.
Pitsor, to you or to anybody else that wants to comment to
this: what is the fate of the CFLs? Do they go by the wayside
here?
Mr. Pitsor then Mr. Brandston.
Mr. Pitsor. You're right. Today's CFLs are probably the
choice, the energy efficient choice that people are aware of.
With the new incandescent halogens they'll become more aware of
these products if they like incandescent technologies. Then
down the road and what the industry is heavily investing in is
the new LED bulbs.
This is a paradigm shift in terms of lighting technology
that's a solid state type product. Very long lives, 25,000 hour
life, producing high quality light. I think this is where we're
seeing the investment taking place and the job growth is taking
place in these new advanced technologies rather than CFLs.
Senator Murkowski. Mr. Brandston and then Mr. Nadel.
Mr. Brandston. I think it's important to understand that
all the statistics you're hearing do not come from practice. I
made one of those decisions, you know, I live in a yes, dear,
whatever you say, dear world. I put a large addition on my
house thanks to my wife. But when I did it's all lighted with
standard incandescent lamps, the lamp of choice for the moment.
We've been tracking that. In the 14 years that that
addition has been used, we've replaced 5 lamps. So in practical
household use this 25 to 50 cent lamp has lasted me
approximately 14 years, not how many hours the laboratory set
up is.
I work in a very practical world of designing. My whole
focus is to please my client. I do not put things in their home
that is not going to work.
When we look at the future of LEDs we have not yet
discovered all of the ramifications of that. The French have
found that the output of these lamps is harming the vision of
young children. Why don't we do any epidemiology studies on
that?
They contain arsenic and other poisonous materials. Why
aren't we looking at that? Why don't we know that when you
throw one of those CFLs in the trash the mercury changes to
methyl mercury which is a deadly poison which if it gets into
our water supply will be a danger?
Why don't we know all of this? Why haven't we done that?
There's nothing conclusive on this.
So I, as an interested party, did a 57 page paper on the
things, no conclusive proof, but that show that you need to do
some research. This act was done in good faith by people
wishing to save energy, wishing to worry about the environment.
But losing sight of all the implications, the ramifications of
what they were doing. We need time to do that.
We, as I said in my talk, we have over 100 years experience
with these very safe incandescent lamps. We do not have any
experience with--we have a limited experience with these new
technologies.
Senator Murkowski. Mr. Nadel.
Mr. Brandston. I think we should pass this S. 395.
Senator Murkowski. Thank you, Mr. Brandston.
Mr. Nadel.
Mr. Nadel. Yes, I wanted to add a couple of points to this
discussion. First there's been some discussion about the CFLs.
I believe that there's over one billion of these in use around
the world. So we do have a fair amount of experience.
There's also the new incandescent bulbs we just talked
about. In addition to the U.S. about a dozen countries also
have similar types of laws several of which have already gone
into effect. We're getting major experience in the tens of
millions if not hundreds of millions of sockets.
That's in the European Union and Australia and Brazil and
Argentina as well as California. They're already in effect. So
we do have a lot of experience with, you know. If the rule was
you can't do anything unless you have 100 years experience, you
wouldn't do very much.
I wanted to make 2 other points.
In terms of consumer choice. If we let consumers use the
inefficient bulbs that means electricity use would rise more
rapidly than it otherwise would. We'd need more power plants.
New power plants, they've really gone up in price lately due to
materials have gone up. Labor has gone up. That would raise
electric rates more than they otherwise would.
So it's not just a question of whether one consumer uses
it. But if everybody uses it my power bills go up even if I
don't use these less efficient lights. Likewise with air
pollution, the extra power results in extra air pollution, you
know, sulfur, nitrogen, oxides.
The third point I'd make is actually the biggest source of
mercury in our environment, human caused mercury is from power
production. If you use conventional incandescent lamp, I
believe EPA found that you would emit 5.5 grams of mercury into
the atmosphere that then goes into the waters, can go into
fish. We ingest it.
With the CFL, and this is EPA data, there's only 1.6
milligrams of mercury that goes into the environment. Most of
that has to do with even a CFL results in some power
production. There's, I think, 0.4 milligrams of mercury EPA
found typically goes into the environment from the bulb itself.
So it's not one has mercury, one doesn't. They both have
mercury. Frankly the incandescent has more.
Senator Murkowski. Thank you, Mr. Chairman. Thank you to
the witnesses.
The Chairman. I thank the witnesses. I think we've had a
useful hearing here. We appreciate you all testifying and
presenting us with your expert advice.
Thank you.
That will conclude our hearing.
[Whereupon, at 11:21 a.m., the hearing was adjourned.]
APPENDIXES
----------
Appendix I
Responses to Additional Questions
----------
Howard M. Brandston,
Hollowville, NY, March 29, 2011.
Chairman Bingaman, Senator Murkowski et. al.
Again thank you for the opportunity to testify on S395. I believe
that this bill, if passed, without question will be of significant
benefit to every person living in the United States of America.
When I saw the list of people who would testify, I quietly said to
myself, Howard, you should be proud as you are the only person to
testify who has paid his own way to appear here today and that does not
represent a group that has a significant vested interest.
You would expect that energy advocates and lighting manufacturers
would oppose S 395. The energy advocates support any legislative or
regulatory requirement that would reduce energy use, putting aside
every other feature regarding quality, performance, and importantly,
economics, as they have done here. The manufacturers support
legislative and regulatory requirements that dictate that consumers
must purchase lamps they would never buy if they were given freedom of
choice. This new 2007 Act might even require the relighting of
everyone's home, including replacing all the dimmers they may have
installed. Now they have no choice. It would be a true test if every
congressman tried living in their homes with no incandescent light
bulbs.
What was presented in all the testimony, other than mine, is such a
barrage of statistical data that it becomes meaningless. What continues
to resonate very loudly, however, is the zealous nature with which they
are steamrolling this issue and what they sidestep. Their message is
delivered with a vehemence that is overplayed and worthy of pause and
suspicion. Mercury is the issue that resonates on the street, and yet
mercury is what the testifiers seemingly try to suppress. Other
technologies, such as the so-called ``high performance'' incandescent
are on the way and will naturally find their rightful place. Why then,
the urgent rush to forcefully ``get rid'' (as per Cooper) of perfectly
rational and useful products, to limit choice, promote personal peril
and a host of other unknowns.
In the entire prepared testimony only one single paragraph by
Steven Nadel addressed the mercury in CFLs. NEMA's ``5Ls of Lighting''
brochure states, ``The bulb contains a small amount of mercury.
Recycling is recommended.'' That is all NEMA had to say. Those who did
bring mercury under scrutiny were the senators, particularly James E.
Risch and Co-chairperson Murkowski. But then the issue is dropped.
As in ``The Silver Blaze,'' where Sherlock Holmes solved the crime
by noticing that the dog did not bark, I would consider the absence of
all discourse on mercury irresponsible, highly suspect and key to the
argument.
While the numerical data put forth on this issue to enlighten,
inform and otherwise aid in the considerations leading to best
practices, there are so many numbers and they have been used as
indiscriminate weapons in defending a position. There is little context
and no sense of proportion. Most everything is projected and monetary
impact is rendered subjective. For example, Kathleen Hogan's testimony
includes the following:
DOE projects that if S 395 were enacted, US primary energy
consumption would increase 21 quads and greenhouse gas
emissions could increase by more than 330 million metric tons
over the next 30 years.
``Primary energy consumption'' is based at the generating source.
According to the DOE all this carbon tonnage can be avoided. Upon
examination of that statement in combination with DOE figures utilized
by the US Energy Information Administration, 21 quads of energy
accumulated over 30 years amount to an increase of 0.018% in energy use
for the US over the same time period. Hogan's figure of ``21 quads''
includes metal halide fixtures. Removing these yields an accumulated 15
quads. For general service and reflector incandescent lamps, the Bulb
act would then contribute 0.013 % to US energy use over the next three
decades. That has the same impact over 30 years as saving $1.44 a month
out of a budget of $4000.00 per month.
Startling, yes? Lifting the hood on this reveals something so
convoluted that we do not know whether the numbers are correct or at
all meaningful. Even if I am off by a magnitude in the above, the
contribution of incandescent is trivial, even less so over the long
haul. And this is only one example worthy of further examination.
Additionally, the Hogan testimony states,
Energy saving options from efficient incandescent bulbs to
CFLs to LEDs can be found on the warm side of the spectrum,
providing the same light as less-efficient bulbs.
We know this to be patently false. The spectral output of CFLs and
LEDs is not the same as the general service incandescent. And there is
no mention across the hearing that, owing to the suppression of the
halogen cycle, the lifetime of halogen lamps can be reduced if they are
dimmed for long periods of time.
Further, the Maxwell School at Syracuse University claims that,
among other factors, consumption is weighed more toward the price of
energy than on available technology. Consumers attenuate their use
based on how much they have to pay up front, and hypersensitivity to
long term savings is a dream of academics and a useful concept wielded
by bureaucrats.
Layer by layer, these governmental agencies and lobbying groups
have built a bee's nest of information. My point here is that there is
plenty of ``evidence'' that standards can save some energy, but very
little straightforward truth as to the magnitude of practical impact,
and end results of such standardization. In fact, the results cannot be
definitely known.
The fact-ridden information provided by the Consumer Federation of
America (CFA) is a generic send-up of efficiency standards of all
types, perhaps retro-fitted to serve as a quick defense against the
passing of S 395. The prepared testimony of Mark Cooper does not
include one instance of the words ``incandescent'' or ``lamp.'' In
fact, their ``market imperfection'' data was prepared for a proceeding
on motor fuel, not lighting. ``Lighting'' is mentioned, but only in
terms of the source type, as just another toilet or dishwasher to be
regulated. Please refer to the hearing commentary of senator Paul Rand
on S 398.
Cooper began his verbal testimony stating that, ``Energy efficiency
standards are consumer-friendly,'' and that, ``The homes in which
consumers live will command higher resale because they are more energy
efficient.'' He continued with, ``Efficiency standards enjoy widespread
public support. Our opinion polls suggest that 95% of all Americans
think it's beneficial to lower their consumption; they know it's better
for their pocketbooks, and almost 3/4 support efficiency standards.''
However, their impression rests solely upon what survey subjects
thought, not what they did. Subjects were asked questions of type. . .
Do you think it is beneficial..?
In your view, how important is each of the following ..?
If energy efficiency increased price but reduced the cost of
use, would you favor ..?
Are you aware the standards ..?
In principle, do you support or oppose ..?
Do you feel the sum of the benefits ..?
Dr. Janice Funk, Harvard lecturer and neuropsychologist of Whittier
Rehabilitation Hospital in Bradford, MA, tells me that there is
repeatedly a wide discrepancy Psychologists tell us there is wide
discrepancy between what people say and what they do. As example, I
have spoken with many current employees of the government, and with all
the information at their fingertips, being intimately familiar with the
issues and needs of this energy economy, most still do not buy CFLs.
When faced with the choice in the aisle of their hardware store, they
want three things:
1. they want to pay less
2. they want a light that's bright when they flip the switch,
with no warm up
3. they want a light that doesn't make things look odd
Though consumers will say they believe in energy efficiency, they
will admit they purchase what they want at the moment of decision, and
they want to pay less every time. Even though they are familiar with
the promise of long-term savings, I have heard that what really matters
most to them is the current moment and what their family will tolerate.
Even though testimony repeatedly tries to personify the data with the
demeaning term, ``pocketbook,'' humans are not motivated by long-term
promises.
Cooper goes on to say, ``Our analysis of the energy efficiency gap
identifies a number of market imperfections that cause the market to
undersupply energy efficiency. . . Standards are the ideal way to
address these market imperfections.''
Senator James E. Risch rejoined, ``People in Idaho are just going
nuts and they are astonished that the federal government is telling
them what kind of light bulbs they have to put in their home. Where's
this country gone? Dr. Cooper, what was the term you used? Cooper:
Imperfections. Imperfections, that's right. Whenever I hear about
`imperfections in the marketplace,' I hate hearing that because I'm a
free market guy, an open market guy. But the only thing that troubles
me more is the government trying to fix it. I guarantee you, that is
not gonna happen.''
In concluding, Cooper essentially stated, ``So, if you look at the
marketplace and you see products that harm consumers . . . you can get
rid of them by a performance standard that is neutral.''
Is it ``neutral'' to flatly ``get rid'' of a product that
works perfectly?
Why does supplying one product imply the forced obsolescence
of another?
Would it not be a ``market failure'' to, in turn, under-
supply the low-cost and safer lamp that consumers know?
Ultimately, is it valid to use motor fuel data to propel the
wholesale removal of a simple and safe product from the market
of choice?
The numbers are just that--numbers. And the plethora of numbers
from all arenas (motor fuel data?) are being used to drive the words
here, all funneling down to the emotive, ``empower consumers,''
``lighting choices,'' and the abasing phrase ``money in pocket.''
The DOE is seeking to provide ``regulatory certainty'' for industry
on the backs of the consumers they will sacrifice. It is a classic
example of agenda-setting in the guise of stewardship.
Senator James E. Risch went on, ``To me, when I got here and
heard about this law--and by the way, this law was not very
well vetted out in the public--that they were going to put
these mercury bulbs in every home, in every school in America,
in hospitals . . . has anybody looked at the EPA
recommendations put out January 11, 2011 as to what you should
do if one of these mercury light bulbs breaks in your home?''
Cooper said, ``Public opinion polls show that 70 percent or more of
the public wants the government to do as much or more with respect to
distracted driving, food safety, fuel economy, privacy, oil drilling,
the environment, and financial services, as well as energy
efficiency.''
And he is right. This is what the government has always done . . .
except, in the case of the CFL, which is (counter to all their
arguments) being promoted as the replacement to the general purpose
incandescent. Regardless of the technology on the horizon, this is the
technology of the moment. LEDs are too expensive, OLEDs do not exist
and high-performance halogen will probably be out of the financial
reach for people lighting an entire home. The CFL has its place, but it
should not exclude the healthy choice.
The difference between lighting and other appliances subject to
regulation is that we did not evolve with dishwashers, battery chargers
and set-top cable TV boxes. As the progeny of this planet, we evolved
under sunlight, moonlight and alongside the incandescence of fire. As a
species we are exquisitely tuned to light's qualities and rhythms on
physical and neurological bases. From a cellular level upward, the
light that envelops us steers our very existence, and to impose
limitations upon how we choose to illuminate our personal environment
carries biological ramifications that reach far deeper than the effects
of a longer defrost cycle. Likewise, we did not evolve with mercury,
which, in unnatural concentrations, frays our nervous system and
attacks our brains as does Alzheimer's disease.
If it is truly in the national interest to really reduce national
energy use, there are ways to accomplish much better results by passing
legislation regulating the energy use for heating, ventilating, and air
conditioning (HVAC) and water heating systems. These systems use far
more energy than lighting in both residential and commercial buildings.
Pass a law requiring the use of ground source (sometimes called
geothermal) heating and cooling systems and thus eliminating
``conventional'' HVAC systems. These systems can be used in most, if
not all buildings. This can be done by simply legislating and raising
minimum energy performance for all HVAC systems, both new and
replacement, such that all ``conventional'' systems now regulated by
DOE can no longer comply. This is exactly the same approach used with
lighting efficiency. However, the energy saved will be significant. For
lighting the savings will be miniscule. The technology for HVAC is
mature and reliable.
Another measure is to pass legislation regulating the energy use
for water heating systems. Pass a law requiring the use of heat pump
water heaters and thus eliminating ``conventional'' water heating
systems. This can be done by legislating and raising minimum energy
performance for all water heating systems, both new and replacement,
such that all ``conventional'' systems now regulated by DOE can no
longer comply. These systems can be used in most, if not all new and
existing buildings. This is exactly the same approach used with
lighting efficiency. The technology is mature and reliable. Except the
energy saved will be significant.
These two measures would quickly save untold amounts of energy, and
require little more government effort than already exists.
The Energy Information Administration Estimates that 3.6% of energy
is used for incandescent lamps. All the figures that were used in
testimony were carefully crafted using only partial data to make the
case for new technology look attractive. In fact, it is not.
While current law de facto requires the use mainly of CFLs, you and
the public should be aware that the energy and pollution ``savings''
are not nearly as much as being claimed. In fact, the energy used to
manufacture these new products, their plastic packaging and shipping
costs from China have never entered their equations. In some cases
energy is wasted. Yet the opponents of S 395 never mention this, which
is a scientific and engineering fact.
In winter months, 44% of commercial buildings and 47% of
residential buildings use electricity as the primary or secondary form
of heating energy. In those buildings, the lesser amount of energy used
by CFLs compared with incandescent lamps is replaced with electric
heat, so there is little or no electricity, energy, or cost savings for
the consumer. Yet the utility is required to now supply about 125% of
the volt amps that were formerly used due to the low power factor of
CFLs, which results in 25% more pollution from utility power plants
than with incandescent lamps.
No mention was made of the potential health and fire hazards use of
CFls might be responsible for. Evidence is piling up daily from around
the world that problems may exist. It is too early for conclusive
numbers but is it worth the risk? Millions of people are stricken with
Lupus and other autoimmune diseases. Many of these people are suffering
from rashes, some quite severe. We may be promoting a product (the CFL)
that is energy wasteful and simultaneously toxic. Is this worth the
risk? Are we going to roll the dice and hope for the best in this quest
to save some small amount of energy?
If everyone is given the choice in how to light their homes the
risks disappear. People will buy the products that best serve their
needs, that are not a financial burden to them, and there will be no
impact on the energy saved in this country.
Responses of Howard M. Brandston to Questions From Senator Bingaman
Chairman Bingaman Mr. Brandston, in your testimony you state that
the EISA 2007 ``provides for a de facto ban on the traditional
incandescent light bulb.'' There are energy-efficient incandescent
bulbs available that meet the standard and they are virtually
indistinguishable from the traditional incandescent bulb.
Question 1. Why can't consumers who prefer incandescent bulbs,
purchase the new more-efficient incandescent bulbs?
Answer. The new ``more efficient'' bulbs cost significantly more
than the standard bulbs. In many households this would be a hardship.
The calculated savings projected over time would not be worth the
immediate outlay of scarce dollars. Further the new sources will not
work in many existing lighting fixtures--this could be a hazard and a
waste of energy.
Question 1a. If the BULB Act were to be enacted, then the Federal
standards on incandescent bulbs would not come into effect. However,
under the 10th Amendment of the Constitution, California would continue
to have its standards and every other State would have the right to
adopt energy efficiency standards for light bulbs.
Answer. That is true. But if the rationale for passing S395 were
properly publicized, the educated electorate and local legislators
would amend their codes to closely reflect the Federal example if it
was properly written.
Question 2. Do you agree that it is less burdensome to business and
the economy to have a single Federal standard rather than multiple
state standards?
Answer. I am not sure about that. I think this is a constitutional
question on state's rights. There are many local building codes that
meet the needs of the location and, to my knowledge, have not hampered
business or trade.
Question 3. Over three years ago Congress passed and President Bush
signed EISA establishing the incandescent lamp standards with a
starting date of January 1, 2012 for the 100 watt bulb. As a result,
U.S. bulb manufacturers have made substantial investments to meet the
new standards.
Do you think it is fair to U.S. businesses to repeal a standard
after they have made substantial investments to comply with that law?
Answer. I believe that most lamp companies are always doing
research and investing in new products to gain some market advantage. I
know of several products that were developed that did not sell and they
were written off as market research gone wrong. This de-facto ban is a
marvelous bit of marketing for those companies--they had a product that
wasn't selling as well as anticipated--now the government is banning
the favored product.
Responses of Howard M. Brandston to Questions From Senator Murkowski
Question 1. What are the major differences between moving an
appliance standard through the regulatory process and the legislative
process?
Answer. As I understand it--Two separate Government entities are
working on the standard--the legislators are generally setting a goal,
the regulators are setting a means of implementing that goal. When a
Standard is developed by the Voluntary Standards Development Community
it passes through a public review which does not bear the burden of
meeting legislation, the only burden is to prove the standard serves
the public at large.
Question 2. How was consensus achieved on the proposed standards
and how do you define ``consensus'' in this context? Was consensus
achieved in 2007, as it relates to the new standards for the
incandescent bulb?
Answer. From my point of view--there was no consensus--this was a
dictatorial process.
Question 3. In your testimony you spoke of the negative attributes
of CFLs. Do you have any opinions on the other technologies discussed
at the hearing?
Answer. The only other technology that I have concerns about are
LEDs ( Light Emitting Diodes). They contain many components that are
considered dangerous and have not had sufficient time to be tested in
many applications. In lighting, for the most part, there are no bad
products--just bad applications. The LED industry at first totally
misrepresented their products. That should give most of us a cause for
concern. A recent French research study states these products may have
a damaging effect on infant's eyesight. More work has to be done on
this before we put these light sources in every home.
I have grave concern that there has not been any effort to alert or
educate the public of any of the application negatives that have been
piling up swiftly. The only effort expended so far has been to promote
what I consider to be a toxic product that in truth does not save the
energy.
Question 4. How would the proposed new standards have impacted the
various lighting work you have done over the course of your career?
Answer. I cannot begin to estimate the harm that these new proposed
standards would have done to my work. Many of my projects would not
have been able to meet the needs of my clients. If you cannot provide
what is necessary for a project to be successful you have indeed wasted
energy and all the money invested. I have been fortunate to have been
given about 3000 lighting design commissions in 60 countries. They
would not have been able to receive the recognition they achieved under
the new standards.
I was fortunate to have started my career in the theater. There
were no codes or standards for lighting in the theater. It just had to
work. That simple dictum was amply illustrated on the relighting we did
for The Statue of Liberty. It worked.
Responses of Howard M. Brandston to Questions From Senator Portman
Question 1. I think one of the largest barriers to wide-spread
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it
is pretty difficult with the tools available to us today to wrap your
head around how much energy you use in a day or a year, and then it is
even tougher to figure out how much a certain energy efficiency
technology can eventually save you. I believe this uncertainty makes it
hard for a consumer to commit to investing the upfront money in energy
efficiency technology, and I think it is one of the reasons why so many
get concerned when governments talk about mandates on energy
efficiency. Simply put, the uncertainty leaves a lot of money on the
sidelines. Do you agree? If so, what is the solution?
Answer. Dissemination of truthful information and education is the
key. The testimony given today was a good example of how data can be
spun to create an impression of doing good while indeed that has not
been the case. Some of that spin was mandated by the energy policy we
now have in place. As people invest, based on this manipulated data,
they find it has misled them--that sets up barriers to further
investment--so who do you trust? If a family member suffers from a
light induced ailment--what does that uninformed consumer do?
We must have an education policy to accompany whatever technical
strides we would like to achieve. The well informed investor can sort
out the rest.
Question 2. How do we develop metrics for consumers to base their
decisions that is accurate across many different consumers,
environments, and scenarios?
Answer. When developing metrics for the average consumer--these
must be developed by those who work directly with that consumer group
in creating their lighting. This cannot be properly achieved by fiat/
mandate. A properly developed guideline will profit the user--all
others will follow.
central issue
Historically, the government of the United States has
advanced the quality of the American way of life by putting
safety above cost. They mandated taking lead out of paint, even
if that made the paint more expensive; they removed the
asbestos from our buildings; put more life boats on ships, and
so on, always knowing the safer product was, in the long run,
the better product for people. Many times over, these
improvements increased cost, but there was always the
underlying principle that in this country, human life and
health were worth more than money. Now, however, they would
like to turn that assumption on its head and needlessly promote
the introduction of mass amounts of a known toxin into the
environment by removing the alternatives--products with a long
history of safety and reliability--thereby, removing American's
freedom of choice.
One could (rightly) argue that there have been many public
awareness campaigns that have been highly effective, such as littering,
forest fires, smoking, etc. Thus, claiming the average homeowner isn't
going to consult the EPA to learn how to recycle and dispose of these
lamps (even though they won't, as Risch says) will probably not gain
much attention. From Senator Risch, above, ``. . .this law was not very
well vetted out in the public; they were going to put these mercury
bulbs in every home, in every school in America, in hospitals. . .'' My
questions/comments to them would be:
Do the proponents of EISA 2007 have the right to the right
to force every American to become a Hazmat worker?
How you can you sit on Capitol Hill, while somewhere a
pregnant mother must clean up the mercury from a broken CFL in
her nursery?
You can power an incandescent lamp with a wind turbine or a
solar panel. You can power a CFL or an LED with a coal-burning
generator. But when the lifetime of each is over, it's the
mercury-containing CFL that remains the bigger threat to the
environment.
The above proponents have made jiggered attempts to personify their
schemes through a juggernaut of numerical acrobatics, undemonstrated
consumer behaviors and affable verbiage. But it all flys in the face of
personal health and wellbeing, which really does strike sharply at the
level of home and hearth. I would say that their points are now
irrelevant. In the practical realm of things the urge to ban the
general incandescent occupies very little in the way of priority in the
current economic environment, even in context of the overall sphere of
energy policy. And yet, proliferating the market with toxic, foreign-
made ``efficient'' product poses surprisingly far-reaching
implications. They do not know what they do.
The history of federal regulation, from Prohibition to Sarbanes-
Oxley to ethanol, to farm subsidies, to land management, to immigration
quotas, to the progressive personal income tax, intervention and is
replete with examples of intervention and unanticipated consequences,
some regrettable in retrospect. DDT was supposed to lower the cost of
farming and increase productivity. I think we can easily see that once
you introduce something into the environment, it can prove very
difficult, or impossible to remove. Truly, setting performance limits
on the general incandescent could be the government's best idea since
allowing DDT.
The search for efficiencies is a natural function of free markets
and applies to this industry's relationship with consumers as surely as
it does (and has) with all others. There are no imperfections. Free of
bureaucratic micro-management of the choices available to light the
kitchens of America, industry will continue to develop the lighting
products that compete side by side in the marketplace, and in all
respects the best will reign by dint of consumer choice. In the effort
to demonstrate tangible progress toward a national energy policy, the
DOE and others are committing regulatory interference, and putting into
question the long-term health and safety of the nation's citizens and
our environment. In response, the BULB Act should be passed.
______
Responses of Steven Nadel to Questions From Senator Bingaman
Mr. Nadel, your summary says that consumer savings from appliance
standards already in place will exceed 300 billion dollars by 2030, and
that in 2010 these savings generated 340,000 net jobs in the U.S.
Question 1. Would you please outline the analysis which resulted in
this job creation estimate?
Answer. To calculate the energy savings from standards, ACEEE used
estimates of the energy savings from each more efficient product,
annual product sales, average product life, and estimated market share
of compliant products in the absence of standard. Estimates are based
on DOE's rulemaking analyses where available, and other sources such as
information from ENERGY STAR, appliance manufacturers, the U.S. Census
Bureau, and utility energy efficiency evaluation reports. The benefits
in dollars were calculated using Annual Energy Outlook 2010 prices.
Costs for standards issued since 2005 and prospective standards were
also compiled from prior ACEEE research\1\. For standards completed
before 2005, costs were estimated using payback periods found in DOE's
Technical Support Documents.
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\1\ Neubauer, Max et al. 2009. Ka-BOOM! The Power of Appliance
Standards: Opportunities for New Federal Appliance and Equipment
Standards. Washington, D.C.: American Council for an Energy Efficient
Economy and Nadel, Steve, et.al, 2006. Leading the Way: Continued
Opportunities for New State Appliance and Equipment Efficiency
Standards (updated from A051). Washington, D.C.: American Council for
an Energy Efficient Economy
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This job creation estimate is based on analysis using an ACEEE
Input-Output economic model, which uses Input-Output coefficients
published by IMPLAN. In order to calculate the employment impacts from
these standards, we calculated the energy bill savings that are
generated from decreased (more efficient) energy use as a result of
each appliance standard, and the costs imposed from each standard
(incremental cost of more-efficient appliances). The Input-Output
analysis looks at the impact of these costs and benefits on consumers,
manufacturers, contractors, retailers, utilities and fuel producers. We
report net impacts on employment, as jobs are created in some sectors
(e.g. construction, retail and services) and lost in others (e.g.
reduced demand for coal and natural gas). Additional information on our
methodology and results can be found in the full project report,
available at http://aceee.org/research-report/a111.
Question 2. Some argue that Federal regulation of appliance
efficiency is inappropriate government intrusion in the marketplace.
After 25 years of this program, what do you believe the impact of these
regulations has been on your industry, on job creation, and on the U.S.
economy?
Answer. As noted in your first question, a recent ACEEE analysis
has found that as a result of federal efficiency standard enacted in
the past 25 years, consumers will save more than $300 million and more
than 300,000 net jobs have been generated. We also found that
efficiency standards increased total wages by about $10 billion in
2010. Also, appliance standards have reduced U.S. energy use and peak
electric demand. We estimate that in 2010, standards reduced
electricity use by 291 TWh (7% of U.S. 2010 electricity use) and 3.58
quadrillion Btu's of total primary energy use (3.6% of U.S. 2010 total
use). Efficiency standards also reduced peak electric demand by 78,000
MW, equivalent to the output of 260 power plants of 300 MW each. In
addition to these macro economic effects, efficiency standards have
helped to spur product innovation. As a result of standards
manufacturers have ``sharpened their pencils'' and designed new high-
efficiency products with modest costs. Examples include improved
refrigerators, clothes washers (more efficient and clean better, as
noted in my response to question 5), dishwashers, air conditioners
(residential and commercial) and light bulbs.
Question 3. Mr. Nadel, what do you believe the short-term and long-
term impacts of enactment of the BULB Act would be nationally and in
American households?
Answer. The short-term impact is that manufacturers would continue
to produce conventional incandescent light bulbs to complement the more
efficient incandescent bulbs they recently brought to market. Sales of
the more efficient incandescent lamps would be lower than they had
planned (many consumers will stick with the cheapest bulb, not
realizing how quickly more efficient bulbs pay for themselves) and
manufacturers will need to scale back plans to produce the new lamps.
Some manufacturers may have stranded investments as a result. However,
California and Nevada would enforce standards they enacted before the
federal standard was enacted, and likely additional states would
regulate bulbs (several were considering such regulations before the
federal standards passed). This patchwork of state standards would
present challenges to manufacturers, distributors and retailers. One of
the main reasons for national standards is so we can have a national
market for products such as light bulbs.
In addition, BULB would also repeal a variety of other sections in
EISA, including provisions on reflector lamps (closing a loophole in
the 1992 law that established reflector lamp standards), metal halide
lamps (primarily used in factories, large commercial spaces, and
outdoors), consumer information labels for televisions and other
electronic products, and a program to improve lighting efficiency in
federal facilities. Thus, BULB would reopen a major loophole in the
1992 reflector lamp standards. Before EISA was passed, on the order of
half of incandescent reflector lamp products sold were taking advantage
of this loophole. The 2007 metal halide lamp standards removed the
least efficient products from the U.S. market, although these less
efficient products are still sold in many other countries. Repeal would
provide an opportunity for inexpensive less efficient products to be
imported into the U.S. We have not seen or heard any criticisms of
these other provisions, but still the BULB bill would repeal them.
In the medium-term, U.S. electricity use would be higher than is
currently forecast as these standards have a significant impact on
electricity use. In my testimony I noted that in 2007 when EISA was
passed, ACEEE estimated that the provisions in Subtitle III B would by
2020:\2\
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\2\ ACEEE. 2007. ``Energy Bill Savings Estimates as Passed by the
Senate.'' http://www.aceee.org/files/pdf/fact-sheet/
EnergyBillSavings12-14.pdf. Washington, DC: American Council for an
Energy-Efficient Economy.
Reduce annual electricity use by 73 billion kWh (enough to
serve the annual electricity needs of 6.6 million average
American households);
Reduce peak electric demand by more than 10,000 MW
(equivalent to the output of more than 30 power plants (300 MW
each); and
Reduce consumer energy bills by more than $6 billion (about
$50 per American household annually).
These benefits would be lost if the BULB bill is enacted.
Also, the repeal of the lamp standards would likely make
manufacturers reluctant to invest in new more efficient products if
cheap incandescent lamps are still on the market. This would likely
slow progress towards use of LED lighting in homes.
Question 4. Mr. Nadel, certain provisions that were in the bill
last year had to be pulled out because the passage of time required
renegotiation.
Would you briefly describe what provisions are being renegotiated
and may be presented to the Committee as amendments in the coming weeks
or months?
Answer. As noted in my testimony, we have renegotiated the
provision on reflector incandescent lamps relative to last year's bill
and ACEEE and NEMA have jointly recommended a revised provision. The
changes are due to the fact that DOE is likely this year to complete
the first rulemaking on these products called for in this bill and thus
we revised this provision to only apply to subsequent rulemakings. In
addition, the outdoor lighting provisions from last year's bill have
been removed because the underlying Illuminating Engineering Society
(IES) technical standard is being revised. When this new IES standard
is published, we anticipate re-examining and modifying last year's
provision. IES's schedule is unclear and therefore we do not know the
timing of our renegotiation. Finally, we are discussing possible
updates to electric motor standards with manufacturers. Congress
enacted revised electric motor standards in EISA 2007 that established
``premium-efficiency'' levels for the most common products, somewhat
lower ``high-efficiency'' levels for some less common products, and no
standards for certain uncommon products. We are discussing whether
additional product types should be subject to the ``premium-
efficiency'' standards.
Question 5. Mr. Nadel, I assume that you have read the article in
this Monday's New York Times entitled, ``When Energy Efficiency Sullies
the Environment''?
I'd appreciate your general views on the piece, and more
specifically, your views on to the author's contention that improved
energy efficiency can result in greater pollution, a paradox known as
the ``rebound effect.''
Answer. Yes, I have read that article. I would point out this was
an opinion piece meant to provoke and was not intended to be a
balanced, factual article. The author got a number of facts wrong. For
example, the author alleges that Consumer Reports found that new
clothes washers do not clean well. He also says that the improved
efficiency washers now on the market are expensive. But as Consumer
Reports noted in two recent blog postings on their Web site:
Despite what gets printed in national newspapers, today's
energy-efficient washers are able to clean clothes. Take our
latest Ratings: a vast majority of top-loaders (76 out of 82
tested) scored ``good,'' ``very good'' or ``excellent,'' with
only 6 scoring ``fair'' or ``poor'' on wash performance. Front-
loading washers generally performed even better, and many of
these washers were still relatively affordable, with several
costing between $550 and $650.\3\
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\3\ http://news.consumerreports.org/appliances/2011/03/forget-
greenwashing-nowadays-its-all-about-greenbashing-.html
Tierney [the author of the NYT piece] also notes that back in
1996, Consumer Reports said ``any [top-loading] washing machine
will get clothes clean,'' whereas now, only some manage that
feat. But that face-off compares apples to oranges: Our testing
and scoring protocols for washers are significantly tougher
than they were when Bill Clinton was in the White House.\4\
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\4\ http://news.consumerreports.org/home/2011/03/consumer-reports-
to-the-new-york-times-washers-are-greener-and-better-.html
Turning to ``rebound'', there have been a number of recent articles
claiming that savings from energy-efficiency improvements can be lost
to increased use of efficient products and other factors. While in fact
there likely some modest rebound effects, the allegations in the
Tierney opinion piece in the NYT and other similar articles are greatly
---------------------------------------------------------------------------
exaggerated. The allegations fall into four categories:
a. When consumers purchase efficient products, knowing the
products are efficient, they use them more. This has been
documented for several products (e.g. cars and CFL lightbulbs),
but the effect is typically only 5-10% of the energy savings,
leaving the other 90-95% as real savings.
b. When consumers and businesses save money due to energy-
efficiency, they spend much of what they save on additional
products and services (e.g. going out to eat more often) and
these additional services use energy. This is true, but we see
this as a positive impact (energy efficiency helps spur
economic growth). Also, from work we and others have done, this
might use on the order of 1/4 of the energy savings, not all of
the savings.
c. As products grow more efficient, more consumers purchase
them. For example, an article in The New Yorker a few months
ago blamed energy-efficiency for the large growth in use of
central air conditioners in homes. In fact, the growth in
central air conditioner use is primarily due to rising
household incomes and a dramatic decline in the price of
central air conditioners.\5\
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\5\ This is discussed in a recent ACEEE blog on this subject:
http://www.aceee.org/blog/2011/01/our-perspective-rebound-effect-it-
true-more-efficient-pro
---------------------------------------------------------------------------
d. More efficient industrial processes generally have higher
productivity and as a result, these processes are used to
produce greater quantities of products. Yes, more efficient
plants tend to operate more, but this is compensated by the
fact that older, less-efficient plants are operated less.
Overall, this factor is subsumed under item ``b''.
Responses of Steven Nadel to Questions From Senator Murkowski
Question 1. Can you explain what happens when, in the absence of a
federal standard set by Congress or DOE, the states begin adopting
their own standards, one by one?
Answer. Fourteen states have adopted standards in recent years.\6\
Sometimes states copy standards from other states, but frequently some
modifications are made in response to local considerations. As a
result, manufacturers and distributors must ship different products to
different states, and must more carefully track legal requirements and
which products go where, so they can be in compliance with state laws.
Also, when state standards are set, in some cases consumers who live
near a state border may shop out-of-state, creating dislocations for
merchants. Also, states are generally cash-strapped and do an uneven
job of enforcing standards. This can penalize honest manufacturers,
distributors and retailers and provide undue advantage to less
scrupulous companies. National standards eliminate all of these
problems by creating a uniform national market--the same product can be
shifted everywhere. Also, compliance with national standards tends to
be better than for state standards.
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\6\ See http://www.standardsasap.org/state/index.htm .
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Question 2. When has the market moved towards more efficient
appliances without a federal or state mandate in place?
Answer. There are many cases where the market for efficient
products has grown without standards, spurred by Energy Star, utility
and state energy efficiency programs, manufacturer and retailer
promotions, and other efforts. Examples include CFLs (now about 20% of
screw-in bulb sales) and home appliances. Regarding home appliances,
Energy Star estimates that in 2009, the Energy Star market share was
36% for room air conditioners, 48% for clothes washers, 68% for
dishwashers, 35% for refrigerators and 2% for water heaters.\7\ In the
case of refrigerated vending machines, in response to consumer and
environmental group pressure, beverage manufacturers (e.g. Coke and
Pepsi) asked manufacturers to design more efficient vending machines.
But even in all of these cases, product efficiency standards complete
the transformation of the market, converting the 1/3-2/3 of the market
that does not respond to voluntary efforts. Over the very-long term,
some products may turn over on their own (e.g. we no longer use whale
oil lamps), but this process typically takes many decades. For example,
Congress in 1992 asked DOE to set standards on mercury vapor lamps, a
particularly inefficient type of outdoor lighting. These standards have
not yet been set and while their market share has declined since 1992,
they still have notable market share (e.g. 16.7% of outdoor lighting
products in use according to a 2002 study for DOE)\8\.
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\7\ http://www.energystar.gov/index.cfm?c=manuf--res.pt--
appliances#asd
\8\ Navigant Consulting, Inc. 2002. U.S. Lighting Market
Characterization. Volume 1. Prepared for U.S. Department of Energy. Pg.
35.
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Question 3. What are the major differences between moving an
appliance standard through the regulatory process and the legislative
process?
Answer. Appliance standards can be set through either a legislative
or a regulatory process. The legislative process has only been used
when there is consensus among the major parties (e.g. manufacturers,
efficiency, consumer and environmental organizations, and utilities).
When there is such consensus, and when energy legislation is moving
forward, the legislative process is generally the quickest. In
addition, legislative adoption allows creative solutions that may not
be permitted under existing legislation. For example, INCAA contains
some changes to how federal standards and state building codes
interact; changes that require legislative action. Furthermore, with
legislative adoption, the cost of a rulemaking can also be saved,
including costs for federal employees and contractors as well as time
spent by participating parties. Finally, since all parties sign off on
the legislation, the details can be reviewed and refined by interested
parties.
Regulations are commonly used when consensus cannot be reached on
new standard levels. With regulation, the different parties can make
their case and DOE makes a decision. Regulations can also be used when
energy legislation is not moving through Congress, if the underlying
legislation authorizes such regulations. With regulation, sometimes not
all aspects of a consensus agreement may be adopted, either because of
restrictions in the law, or because DOE chooses to take another path.
Question 4. How was consensus achieved on the proposed standards
and how do you define ``consensus'' in this context? Was consensus
achieved in 2007, as it relates to the new standards for the
incandescent bulb?
Answer. For the various standards in INCAA, manufacturers and
efficiency organizations would talk and decide if a consensus standard
was worth pursuing. Specific proposals would be developed by one or
both parties and through meetings and other discussions differences
worked through until there was agreement on a full package. At times,
some analysis proved useful, either prepared by one of the parties, or
by DOE. For example, DOE provided many analyses for use by the parties
during the negotiations for refrigerator and other appliance standards.
Once agreement was reached among the principle parties, other parties
would be consulted (e.g. utilities, retailers, contractors, and
wholesalers), and if needed, some modifications worked out. In this
context, ``consensus'' means that all parties support the agreement,
and prefer the agreement to the alternatives (e.g. a DOE rulemaking or
no federal action).
In the case of the incandescent bulb standards, after many months
of discussion, the various parties eventually agreed on most of the
particulars. A few final details were decided by Members and their
staff and all parties supported these final compromises.
Responses of Steven Nadel to Questions From Senator Portman
Question 1. I think one of the largest barriers to wide-spread
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it
is pretty difficult with the tools available to us today to wrap your
head around how much energy you use in a day or a year, and then it is
even tougher to figure out how much a certain energy efficiency
technology can save eventually save you. I believe this uncertainty
makes it hard for a consumer to commit to investing the upfront money
in energy efficiency technology, and I think it is one of the reasons
why so many get concerned when governments talk about mandates on
energy efficiency. Simply put, the uncertainty leaves a lot of money on
the sidelines. Do you agree? If so, what is the solution?
Answer. Yes, I agree that one of the major barriers is that many
consumers (residential, commercial and industrial) do not realize the
specific opportunities they have for saving energy, and how to achieve
these savings. Faced with such uncertainty, they do not take action. In
terms of solutions, I recommend improved labeling and education
efforts. For example, appliances now carry an Energy Guide label, but
focus groups ACEEE and others have conducted have found that many
consumers do not understand the labels. In most other countries they
use labels in which appliances are rated using a number or letter scale
(e.g. 1-5 stars, or letters A-G) and these are much more readily
understandable to consumers. We also recommend that buildings (homes
and commercial buildings) receive efficiency ratings based on their
energy use, building size, building type and other characteristics.
Such labels would provide information to prospective purchasers and
renters, and would be an incentive for building owners to upgrade their
buildings before they put them on the market. Likewise, we support
benchmarking of commercial buildings and industrial processes, so
owners can compare their facilities to similar facilities and identify
buildings and processes that are below average and should be upgraded.
Question 2. How do we develop metrics for consumers to base their
decisions that is accurate across many different consumers,
environments, and scenarios?
Answer. Labels and metrics typically are based on average usage
patterns and costs. For the typical consumer, this provides an easy to
use ``ballpark'' estimate. If too many variables are presented, many
consumers will not immediately understand the information and will not
pay attention. For consumers who want more details, I would suggest
greater use of websites, including tools that can be accessible on
smart phones and other handheld devices that consumers could access
while they are shopping.
______
Responses of Joseph M. McGuire to Questions From Senator Bingaman
Mr. McGuire, I assume that you have read the article in this
Monday's New York Times entitled, ``When Energy Efficiency Sullies the
Environment'' which contends that the most recent report by Consumer
Reports found that ``no top-loading (washing) machine got top marks for
cleaning.''
Question 1. I'd appreciate your general views on the piece, and
more specifically, your views on whether energy efficiency standards
have reduced the performance of top-loading washing machines.
Answer. In the New York Times column, ``When Energy Efficiency
Sullies the Environment,'' the author leaps to the unfounded conclusion
that there is a choice to be made when washing your clothes: either
wear clean clothes or save energy; but not both. The facts do not
support that. The appliance industry has a long history of making
energy efficient appliances that also offer optimal performance. In
fact, do not take our word for it, read the Consumer Reports Blog,
which says the New York Times article's ``interpretation of Consumer
Reports' washer tests is misleading'' and ``As an organization that
tests both performance and energy efficiency, Consumer Reports has seen
product performance improve or remain at high levels, while energy
efficiency standards have become increasingly stringent over the years.
Washing machine performance has actually improved while dishwashers and
refrigerators performance has remained at high levels.''
Replacing an eight year old clothes washer with a new clothes
washer of average efficiency will save the average household more than
$130 in electricity costs per year, and will slash water usage by 5,000
gallons per year. All this--and clean clothes! How can you go wrong?
The column, however, does foreshadow a real issue for the future in
that we cannot blindly drive toward ever increasing efficiencies
without considering performance. This balance is recognized by the
appliance industry's support for the ENERGY STAR program's decision to
couple soundly developed performance standards into future efficiency
increases thereby ensuring that any future mandatory standards fully
take into account the effect on product utility.
In addition, there is a pathway to efficiency gains that provide
tremendous potential for saving energy and protecting the environment
with no compromise of product performance, and that is through smart
appliances that can automatically operate at a time of day when
electricity prices are lower, to save consumers money on the utility
bill, and reduce peak demand which would cut the number of wasteful,
but necessary, peaker power plants around the country.
Consumers can purchase home appliances with confidence-knowing that
modern appliances offer many more features and conveniences than
yesterday's white goods, and save significant amounts of energy. And
just around the corner manufacturers will introduce smart grid enabled
appliances that will provide creative new and innovative ways to cut
energy use while offering maximum consumer benefits.
Question 2. Mr. McGuire, on page 3, you say that standards alone
are not effective at promoting the development and deployment of
efficient products, and standards are of decreasing value as products
get more efficient. You point to manufacturer tax credits targeted to
increased production of super-efficient products as the model for
deploying efficient products and creating jobs.
Would you outline a specific example of how these credits help to
deploy a new product that would not otherwise have been commercialized,
and how many jobs this created?
Answer. The tax credit for super-efficient appliances is a model of
an incentives-based approach rather than a regulatory-based approach
that helps every day Americans to save money on their electric bill. It
is a model because it drives continual improvement. Tax credits in any
given year can only be claimed for additional super-efficient
appliances that are sold over and above previous years' production. As
the government looks to save consumer's energy and reduce this
country's dependence on foreign oil, this tax credit has a proven track
record of success. In 2008, there were no refrigerators that were 30%
more efficient than the federal minimum. However, a tax credit was
enacted that year for a 30% more efficient refrigerator and, in 2009,
there were approximately 200,000 refrigerators that were 30% more
efficient.
Question 3. Mr. McGuire, on page 3, you mention that there is a
non-legislative element in the agreement your association negotiated
with other stakeholders that ``will jump start the smart grid by
helping to deploy smart appliances nationwide and enable consumers to
better take advantage of demand--response and real-time pricing
opportunities.''
Would you expand on this by providing an example of how this would
work, and explain why this is a non-legislative component of your
agreement?
Answer. We submitted a petition to ENERGY STAR along with
efficiency advocates and environmental and consumers groups request a
recognition of the benefits of smart appliances to the consumer and the
grid through a 5% allowance. The petition was accompanied by a detailed
and technical evaluation from the Pacific Northwest National Lab
justifying that the benefits attributable to smart-grid capability are
more than the 5% allowance requested. The full petition and PNNL
analysis and report can be found at www.aham.org/smartgrid. It is our
hope that the ENERGY STAR program will agree to this petition. The
President and Secretary Chu have talked about the need to modernize our
grid, and the ENRGY STAR can jump start the smart grid by providing a
5% incentive to manufacturers to build and sell smart appliances in
anticipation of dynamic pricing coming in the future. ENERGY STAR is
well positioned to provide this recognition to the consumer of these
current and future benefits, but they may need to adjust the program's
traditional policies to help the nation accomplish this objective.
Question 4. Some argue that Federal regulation of appliance
efficiency is inappropriate government intrusion in the marketplace.
After 25 years of this program, what do you believe the impact of these
regulations has been on your industry, on job creation, and on the U.S.
economy?
Answer. For over 20 years, the industry has supported the increased
certainty of having 1 federal regulation on appliance standards that
preempts state standards in this area. Prior to this current regulatory
framework, states were free to develop their own appliance standards
creating a patchwork of 50 differing standards. This situation--50
differing regulations--is unfriendly to business and to consumers.
Ideally, a North American market, or even global market, would be
supported through a harmonized agreement on appliance standards. The
theoretical discussion of whether government has a role in this area is
supplanted by the reality that governments--states, California, and
around the world--are involved in setting minimum energy standards for
appliances. Our industry is faced with these realities and prefer less
regulation, ie, 1 federal regulation, as opposed to increased and
inconsistent regulations.
Question 5. Some argue that Federal regulation of appliance
efficiency is inappropriate government intrusion in the marketplace.
After 25 years of this program, what do you believe the impact of these
regulations has been on your industry, on job creation, and on the U.S.
economy?
Answer. Same as #4.
Responses of Joseph M. McGuire to Questions From Senator Murkowski
Question 1. What are the major differences between moving an
appliance standard through the regulatory process and the legislative
process?
Answer. The industry has found negotiating agreements, which can be
implemented legislatively, provide a better framework to reach an
acceptable conclusion and provide the industry more certainty than a
regulatory process. The reason is that negotiations are not restricted
by the walls of a regulatory rulemaking process. For example, our
recent agreement brought in providing incentives for smart appliances
through the ENERGY STAR program, which could not be done through a DOE
rulemaking. Our agreement also included tax incentives for super-
efficient appliances, which must be legislated. Further, having
standards implemented through legislation removes the uncertainty from
a lengthy rulemaking process.
Question 2. How was consensus achieved on the proposed standards
and how do you define ``consensus'' in this context? Was consensus
achieved in 2007, as it relates to the new standards for the
incandescent bulb?
Answer. We were not involved in the incandescent bulb standard, but
for our recent agreement, consensus has essentially been a unanimous
agreement by all stakeholders. We are not aware of any opposition to
our agreement and it has been widely publicized since July 2010.
Responses of Joseph M. McGuire to Questions From Senator Portman
Question 1. I think one of the largest barriers to wide-spread
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it
is pretty difficult with the tools available to us today to wrap your
head around how much energy you use in a day or a year, and then it is
even tougher to figure out how much a certain energy efficiency
technology can save eventually save you. I believe this uncertainty
makes it hard for a consumer to commit to investing the upfront money
in energy efficiency technology, and I think it is one of the reasons
why so many get concerned when governments talk about mandates on
energy efficiency. Simply put, the uncertainty leaves a lot of money on
the sidelines. Do you agree? If so, what is the solution?
Answer. Currently, many tools exist for the consumer to learn about
the amount of energy used by an appliance and the cost savings that can
occur through the purchase of newer more efficient appliances. The
Federal Trade Commission requires a prominently placed bright yellow
ENERGY GUIDE label on the front of all appliances sold at retail, and
requires energy information to also be displayed online. This label was
recently changed to include a more prominent display of annual
operating cost, in addition to Kilowatt-hours used by that appliance.
Consumers have also come to rely on the ENERGY STAR label offered only
to products that register efficiencies greater than what is required by
the federal minimum efficiency standards. ENERGY STAR is one of the
most recognized brands, signifying additional energy and costs savings.
In addition, the ENERGY STAR web site includes a calculator which can
help a consumer make an informed choice by determining the amount of
energy used by their current appliance, and the potential savings
offered through a new appliance.
Question 2. How do we develop metrics for consumers to base their
decisions that is accurate across many different consumers,
environments, and scenarios?
Answer. The next generation of appliances, called smart appliances,
will be designed to operate in coordination with the future Smart Grid.
These appliances, under development, will be able to receive and
respond to signals from the electrical power grid that will
automatically enable the appliance to defer or delay an energy using
cycle until the power is less expensive to consume. This may sound
futuristic, but these appliances will be available in the market if the
proper incentives are put in place and will offer added benefits beyond
just energy savings. Through the integration of home energy management
systems, which will likely be used with these smart appliances, a
consumer will know exactly how much energy a particular appliance is
using. AHAM is requesting government and electric utility policies that
will promote and incentivize the market introduction of these
appliances. One such policy that would allow for more information to
the consumer would be the offering of dynamic pricing from utilities to
the consumer to incentivize consumers to consume power when it is
cheapest, or when renewable sources are available. These appliances
will one day benefit all Americans.
______
Responses of Kyle Pistor to Questions From Senator Bingaman
Question 1. How do you respond to the argument of the proponents of
BULB that all bulb technologies, including the traditional incandescent
bulb, should be available so that consumers can select the one that
best meets their needs. That is, let the market decide?
Answer. Light bulbs are designed, manufactured, and distributed for
national markets. We support consumers being able to choose what type
and style of light bulbs meet their needs. But when individual states
set efficiency requirements on light bulbs that would require
manufacturers to make different bulbs for different states, as what was
happening in 2007, then market-based, cost-effective options are not
being provided to consumers. State actions would have distorted the
market and limited consumer choices. A minimum consensus federal
efficiency standard as set forth in EISA 2007, that pre-empts
conflicting state rules, continues to provide consumers with new
energy-efficient incandescent light bulbs along with other
technologies.
EISA 2007 continues and expands consumer choice with all technology
options. The federal legislation does not reduce consumer options, but
supports varied options for consumers. Federal action was needed to
prevent state actions that would have limited consumer choices.
Question 2. Some argue that Federal regulation of appliance
efficiency is inappropriate government intrusion in the marketplace.
After 25 years of this program, what do you believe the impact of these
regulations has been on your industry, on job creation, and on the U.S.
economy?
Answer. NEMA supports a federal program of efficiency standards,
test procedures and product labeling/information for agreed-upon
consumer products and commercial equipment. The success of a federal
program is based on using industry efficiency standards that are
incorporated into consensus legislative proposals or DOE adoption of
consensus agreements. The federal program has resulted in providing
regulatory certainty for manufacturers regarding research and
development, innovation deployment, and product manufacturing. This
also benefits consumers with cost-effective, energy-efficient products
that reduce their energy bills. NEMA members operate in a globally
competitive environment and are adjusting product offerings in response
to changing market and consumer demand. If our members had to face a
patchwork of conflicting state requirements for products our
competitiveness would be greatly reduced as compared to having a
federal program. The federal program has benefited the nation through
reduced product costs to consumers as manufacturers are able to plan
and produce a product for one national market rather than different
state markets.
Question 3. On page 10, you say that NEMA represents 15 companies
that sell over 95 percent of the light bulbs used in the United States
and you reaffirm their support for the energy-efficient light bulb
provisions of EISA 2007.
What do you believe the short-term and long-term impacts of
enactment of the BULB Act would be on your industry?
Answer. Following the enactment of EISA 2007, manufacturers had
regulatory certainty and proceeded to make millions of dollars in
investments in research and development, plant and equipment, work
training, and new product and safety testing for EISA-compliant
products. The first of those federal requirements are now only nine
months away (January 2012). Repeal of the EISA 2007 light bulb
provisions would strand millions of dollars in investment, create
significant regulatory uncertainty, and undermine investments in new
research and development and corresponding job employment. Further,
uncertainty would be re-introduced to the market because states would
again have the ability to pass their own efficiency standards for light
bulbs as was happening in 2007. In the long term, a repeal of the U.S.
standards would put American manufacturers at a competitive
disadvantage in the global marketplace. U.S. firms operate in a global
marketplace and are competing in markets that are moving towards more
energy-efficient lighting.
Responses of Kyle Pistor to Questions From Senator Murkowski
Question 1. Halogen technology has been around for many, many
years, and yet we are just now taking to market an incandescent halogen
bulb with 30% energy savings. Furthermore, the catalyst for this new
product was the mandates in EISA 2007. If the halogen technology was
known to provide energy savings, why didn't the market demand it a long
time ago?
Answer. While halogen technology (a type of incandescent lighting)
has been around for decades, the energy saving versions that meet the
EISA 2007 requirements have only recently been developed for widespread
commercial distribution. Advanced incandescent-halogen is more
expensive than regular incandescent bulbs to produce.
Question 2. There have been stories in the media about job loss due
to the new light bulb standards. Can you talk about the current job
outlook as it pertains to the lighting industry? Are there any job
trends occurring within the industry?
Answer. The U.S. lamp industry operates in a globally competitive
market and is changing its manufacturing footprint as needed to address
changing market conditions. The changing global markets have increased
demand for energy efficient lighting and decreased demand for older
technologies. Today, the U.S. lamp industry represents 12,000-14,000
U.S. jobs with job growth occurring in the energy-efficient and
advanced lighting sectors, such as LED lighting.
Question 3. There was an educational campaign in the Energy
Independence and Security Act of 2007 that was authorized to spend $10
million to educate consumers on the new standards contained within the
Act. That authorization was never funded. What has industry done to
educate consumers on the new standards?
Answer. Notwithstanding the lack of federal government funding
support for consumer education, the industry has taken efforts to
assist consumers understand the benefits of energy-efficient lighting
options. Industry has:
formed a coalition called LUMEN (Lighting Understanding for
a More Efficient Nation) with the American Lighting Association
and the Alliance to Save Energy. This group is focusing on
disseminating correct information about the lighting transition
to utilities, retailers, media and consumers.
designed a new label with the Federal Trade Commission for
light bulb packages to provide key buying and performance
information.
organized a task force focused on providing information on
the lighting transition. This group published ``The 5 Ls of
Lighting'' (lightbulboptions.org) for use by media, retailers,
consumers and all interested parties. Also, factual data was
printed in a ``Lighting Options for Your Home'' brochure.
Individual manufacturers are also working with retailers,
utilities and other channel partners to provide point-of-sale
information to consumers.
Question 4. What are the major differences between moving an
appliance standard through the regulatory process and the legislative
process?
Answer. When moving an appliance standard through the legislative
process, all interested parties come together to negotiate a
recommendation that is submitted to legislators only when a broad
consensus agrees to the proposal. There is a free flow of information
and discussion by interested parties in reaching the consensus
recommendation.
Under the regulatory process, the Department of Energy convenes a
public workshop and solicits comments from stakeholders on what the
standard should be. The DOE staff and its contractors then put forward
a proposal for further ``notice and comment.'' Interested parties
provide comments but there is no ``back and forth'' dialogue with the
agency staff or its contractors until a final rule is issued.
The legislative process is more transparent and provides for more
ability to achieve a consensus that works for all stakeholders than the
regulatory process. The regulatory process also takes several years to
reach a result and at a cost to the tax-payer. Having the interested
parties convene and reach an agreement is faster and less expensive.
Question 5. How was consensus achieved on the proposed standards
and how do you define ``consensus'' in this context? Was consensus
achieved in 2007, as it relates to the new standards for the
incandescent bulb?
Answer. Interested parties (industry, environmental advocates, and
other stakeholders) were brought to the table to negotiate the new
standards. During 2007, the parties came to an agreement and presented
that agreement to Congress. ``Consensus'' exists with the absence of
significant opposition by an interested stakeholder.
Responses of Kyle Pistor to Questions From Senator Portman
Question 1. I think one of the largest barriers to wide-spread
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it
is pretty difficult with the tools available to us today to wrap your
head around how much energy you use in a day or a year, and then it is
even tougher to figure out how much a certain energy efficiency
technology can save eventually save you. I believe this uncertainty
makes it hard for a consumer to commit to investing the upfront money
in energy efficiency technology, and I think it is one of the reasons
why so many get concerned when governments talk about mandates on
energy efficiency. Simply put, the uncertainty leaves a lot of money on
the sidelines. Do you agree? If so, what is the solution?
Answer. Some residential consumers only consider the initial cost
in buying a product/appliance and do not factor the electricity costs
of operating the product/appliance over its lifetime. Commercial
consumers typically evaluate products on their operating and initial
costs. The challenge is to provide relevant information to residential
consumers so they can make a more informed decision that takes into
account the initial purchase price and the operating costs over time.
The consumer can then make a decision based on their specific
situation.
Question 2. How do we develop metrics for consumers to base their
decisions that is accurate across many different consumers,
environments, and scenarios?
Answer. The new Lighting Facts label, mandated in a final rule by
the Federal Trade Commission per EISA 2007, is a good example of how to
get consumers information on energy and money saved by energy efficient
light bulbs. This label will provide consumers the ability to compare
different lighting choices on the energy saved over the lifetime of the
bulb. It will also give them an understanding of the operating costs.
They will then be able to compare that to the price of purchasing the
bulb and thus understand their energy and money savings by purchasing
the product.
______
Responses of Mark Cooper to Questions From Senator Bingaman
Mr. Cooper, the results of the recent CFA consumer poll found that
nearly all Americans--95 percent--think that it is beneficial for
appliances to become more efficient, and that a large majority--72
percent--support the government setting minimum energy efficiency
standards.
Question 1. Do these findings also apply to light bulbs which many
people might not think of as appliances?
Answer. While CFA did not specifically ask about light bulbs, my
testimony reviewed several surveys that indicate a similar level of
awareness of and support for energy efficiency and standards dealing
with light bulbs.
Question 2. Mr. Cooper, you provide a thorough analysis of what you
call the ``energy efficiency gap'', and identify five general market
imperfections that result in our nation's waste of energy.
Please give me an example of the three imperfections that you
believe most contribute to energy waste in our economy.
Answer. Because inefficient appliances require less technology,
they are less costly and more profitable than more efficient
appliances, appliance manufacturers have an incentive to exploit their
information advantage over consumers and advertise, stock and push less
efficient appliances. In addition, because energy consumption is
imbedded in a multi-attribute product, appliance manufacturers can
influence consumer choice strongly by choosing the combinations of
attributes to offer. Appliance manufacturers who might contemplate
offering more efficient appliances face the risk that others will not
and inertia will make it difficult to wean consumers from inefficient
products.
The information advantage stems from the fact that consumers lack
access to good information and have difficulty making the lifecycle
cost calculations (future energy prices, quantities of energy
consumed).
In many instances, consumers do not make the choice of appliances,
but landlords or builders do. Their preference for low first cost
appliances and familiarity with existing technologies depresses the
inclusion of technologies that reduce energy consumption.
Responses of Mark Cooper to Questions From Senator Murkowski
Question 1. A concern for many consumers, as in the case of light
bulbs, is that the new, more efficient appliances will not be of the
same quality as the less efficient ones. What is CFA's position on
these concerns?
Answer. Because the standards are technology neutral and promote
competition between light bulb manufacturers, consumers will be
provided a wide range of choices. As demonstrated at the hearing, there
are half a dozen technologies already being offered by major light bulb
manufacturers and the standard has not yet gone into effect. We have
every confidence the marketplace will meet consumer needs.
Question 2. Please describe the analysis and research you undertook
to determine, as described in your testimony, that ``.homes in which
consumers live will command a higher resale because they are more
energy efficient.''
Answer. CFA has conducted extensive analysis of the auto market
where the evidence is quite clear that more efficient automobiles
command much higher prices. The housing literature also supports this
conclusion. This conclusion is common knowledge. A sample of results
from a web search yields the following results.
There was a study published in the Appraisal Journal 10-1998.
The last 3 paragraphs summarize:
The convergence of the fuel expenditure coefficients around -
20 is consistent with research findings that the selling price
of homes increased by $20.73 for every $1 decrease in annual
fuel bills. 2. Other research supports the underlying
conclusion that energy efficiency increases home value by an
amount that reflects annual fuel savings discounted at the
prevailing after-tax mortgage interest rate. 3. The implication
for home buyers is that they can profit by investing in energy-
efficient homes even if they do not know how long they might
stay in their homes. If their reduction in monthly fuel bills
exceeds the after-tax mortgage interest paid to finance energy
efficiency investments, then they will enjoy positive cash flow
for as long as they live in their homes and can also expect to
recover their investment in energy efficiency when they sell
their homes.
The implication for appraisers is that cost-effective energy
efficiency investments do appear to be reflected in residential
housing market values. Therefore, the appraised value of
energy-efficient homes could under-state their actual resale
value if the comparables used in the appraisal do not reflect
the value of a cost-effective energy efficiency investment.
http://homeenergypros.lbl.gov/group/resalevalue
A peer-reviewed study published in The Appraisal Journal shows that
homebuyers are willing to pay substantially more for energy-efficient
homes. This study, titled ``Evidence of Rational Market Values for Home
Energy Efficiency,'' concludes that people are willing to fully pay for
the monthly fuel savings of energy efficient homes with higher monthly
mortgage payments'' which translate into higher home values. Thus,
homebuilders and homeowners who invest in energy efficiency can expect
to recover the market value of their energy efficiency investments when
they sell their homes.
The ICF study reviews published research on energy efficiency and
home values, and presents an extensive statistical analysis of American
Housing Survey (AHS) data. The published research shows that market
values for energy efficient homes appear to reflect a rational trade-
off between homebuyers' fuel savings and their after-tax mortgage
interest costs. The ICF statistical analysis explicitly tests this
``rational market hypothesis'' against National AHS data for 1991,
1993, and 1995, and metropolitan statistical area data for 1992 through
1996. Both of these distinct AHS samples provide data on home
characteristics (including home value, number of rooms, square feet,
lot size, and utility bills) as reported by homeowners in lengthy
interviews with the Census Bureau. The study presents separate
statistical results for each year, for detached and attached homes, and
for detached housing with different heating fuels (gas, electric, or
fuel oil).
These statistical results support the conclusion ``That home value
increases by $20 for every $1 reduction in annual utility bills'',
consistent with after-tax mortgage interest rates of about five percent
from 1991 through 1996.
This research was conducted for the U.S. Environmental Protection
Agency (EPA) ENERGY STAR Homes program. ENERGY STAR homes use at
least 30% less energy than a Model Energy Code home while maintaining
or improving indoor air quality and increasing comfort in the home. EPA
estimates that the cost to upgrade a new home to ENERGY STAR levels
can range from $2,000 to $4,000, and that a typical ENERGY STAR home
reduces utility bills by $420 per year. The ICF study indicates that
$420 in annual utility savings will add about $8,400 to the market
value of an ENERGY STAR home (or to any equally efficient home), or
two to four times the builder's upgrade costs.
The study should also encourage homeowners to consider energy
efficiency upgrades for existing homes. An important conclusion from
this research is that homeowners ``can profit by investing in energy
efficient homes even if they are uncertain about how long they might
stay in the home. If their reduction in monthly fuel bills exceeds the
after-tax mortgage interest paid to finance energy efficiency
investments, then they will enjoy positive cash flow for as long as
they live in their home and can also expect to recover their investment
in energy efficiency when they sell their home.'' This research also
has significant implications for home appraisers, mortgage lenders, and
housing assistance programs at the federal, state, and local levels.
Written by: The Appraisal Journal by Rick Nevin and Gregory
Watsonhttp://www.universalfoamtech.com/energy-efficiency-upgrades-
incre.htm
Many people are reluctant to improve the energy efficiency of their
home when they might be moving out in just a few years. But the
evidence is clear that investments in energy efficiency lead to higher
home resale values. A recent study published in The Appraisal Journal
shows that the market value of a home increases by $10--$25 for every
$1 decrease in annual fuel bills. The study confirms what many have
believed for years: Energy efficiency substantially increases the
market value of owner-occupied homes.
The study was conducted by ICF Consulting with funding from the
Environmental Protection Agency. It involved extensive statistical
analysis of American Housing Survey data collected by the Department of
Housing and Urban Development between 1991 and 1996. The research was
based on detailed interviews (including a review of energy bills) that
are conducted every other year at a sample of over 16,000 housing units
all across the nation. Even taking many other correlated home features
into account, the study confirmed energy efficiency improvements do
result in higher home values:
With after-tax interest rates between 4% -10% and stable fuel
price expectations, home buyers should pay $10--$25 more for
every dollar reduction in annual fuel bills resulting from
energy efficiency\1\
If home buyers expect stable fuel prices, and after-tax mortgage
interest rates are in the 4-10% range, then the logic is
straightforward. Paying $10 up front to save $1 on your annual fuel
bill is like making an energy efficiency investment having a 10%
return. Paying $25 up front to get the same $1 in annual savings yields
a 4% return. ICF's study confirms that the housing market really does
reward those who invest in energy efficiency with a higher price at
resale.
The most important conclusion from this research is that homeowners
can profit by investing in energy efficiency, even if they don't know
how long they will be staying in the home. ``If their reduction in
monthly fuel bills exceeds the after-tax mortgage interest paid to
finance energy efficiency investments, then they will enjoy positive
cash flow for as long as they live in their home and can also expect to
recover their investment in energy efficiency when they sell their
home.''
These findings are backed up by seven other studies conducted since
1981, all of which found higher home values associated with energy
efficiency. The three most recent of these report home value increases
of between $11 and $21 for every dollar saved through reductions in
annual fuel bills. But why do some homeowners still hesitate to
increase their insulation levels or replace those old windows? Many are
concerned that appraisers won't take their improvements into account
and that therefore they won't get credit for these investments. But
these studies show that even if an appraiser fails to cite these
improvements, home buyers do notice and are willing to pay more.
What can you do?
Make sure your appraiser and your real estate agent know you made
the energy efficiency improvements and let them know about this
important research. For more information on the study check out the ICF
Consulting press release or visit the Residential Energy Services
Network (RESNET) web site.
http://www.energycheckup.com/content/IncreaseHomeValue.asp
energy-efficient homes offer loan prospects
Imagine financing a mortgage for a home made almost entirely out of
beer bottles.Or a house built hallway into the ground, using old car
tires in the construction. While houses like these may seem far
fetched, a very small, but growing segment of the home lending market
is made up of such energy efficient homes that don't fit the
traditional mold.
Of course, most of these homes are not made out of bottles or
tires. Many of them are made out of materials that people have been
using for hundreds of years but which are more sought-after in these
conservation-friendly times. For instance adobe, the insulating earthen
bricks used in southern clinics, is a relatively common construction
material in the southwest because of its ability to keep out the summer
heat and retain the sun's warmth in winter.
But many of the newer energy-efficient homes are being made out of
more unusual materials such as Rostra block--a sort of large brick made
up of recycled materials like concrete and Styrofoam cups. Other homes
are made from materials like straw bales, used tires and incorporate
unusual energy efficiency designs.
Despite the fact that such homes are not found on every block and
cul-de-sac, providing mortgages turns out to be a relatively run-of-
the-mill procedure. The more of them that are built and retain their
value, the more mainstream the lending becomes. Take EarthShips, a
housing construction in New Mexico that includes a variety of energy
efficient designs and uses tires in the construction.
``Up until about a year ago, the secondary mortgage market had no
comps for these Earth Ships,-says Angel Keyes, vice president and CIO
of Centinel Bank of Taos in N.M.Now it's just like any other
construction loan.''
retaining resale value
The efficiency of super energy efficient homes improves their
value, and they are proving to be good investments as the homes are re-
sold for much more than they cost to build, community bankers say.
``It's incredible how the market rewards for that type of
construction'', Keyes says.
Previously, Keyes says, the appraisals were low for most of the
newer homes, but over time that has changed. `What we do see now is
that we have transactions and you see equity gained,''
Charter Bank in Albuquerque, N.M., is very active in making loans
on homes constructed from non-traditional materials such as straw bale
and rammed earth. Glenn Wertheim, president of Charter Mortgage Co., is
familiar with this type of housing and says knowing the particulars of
a home's location is the important thing in making lending decisions.
``The process for considering and placing financing on these less
traditional homes isn't really any different. You simply have to
consider these property distinctions in the under-writing process,''
Wertheim says. ``In that consideration, I would say, you have to have a
much better than average expertise in underwriting appraisals, and know
the markets you are lending in intimately, down to the
neighborhood...For new construction you have to look at the builder's
credentials and expertise in using nontraditional building materials.
Ultimately you have to judge the market acceptance and desirability of
the home within its neighborhood.''
The question is this, says Enchain, ``Is our collateral value
secure relative to the loan we make on the property?'' ``Because
nontraditional materials like adobe and straw bale are more common in
New Mexico, Charter Bank can generally offer any of its regular home
loan products to customers,'' Wertheim explains. Some loans fall
outside the regular secondary market guidelines but meet the bank's
investment criteria. ``We offer a variety of portfolio loan options to
our customers. We have worked with our investors and government
agencies over the years to help them become comfortable with this type
of lending.'' Jerry Walker, executive director of the Independent
Community Bankers of New Mexico, says many of these structures are made
well and have proven themselves over time, particularly the adobe
homes, which he says have amazing insulation and durability.
If the structure is sound, Walker says, the process is simple.
``Once the state and local building officials have signed off on [these
homes), they are treated like any other type of mortgage,'' he says.
energy savings touted
The trend toward more energy efficient houses is capturing the
attention of those in the housing business, according to Robert Sahadi,
vice president for Housing Impact at Fan-me Mac. ``There's a wealth of
things happening,'' he says. ``It's something lenders and home builders
have become pretty excited about,'' adding that such homes ``have
become much more conventional over time.'' Sahadi says Fannie Mae is
not as concerned about whether houses have unusual features as long as
their energy efficiency can be verified. He also says if a home is
unable to get an appraisal that is commensurate with the cost of
building it, an addendum can be used calculating the energy savings and
tacking it on to he value of the home.
And it's not just in the Southwest that these houses are found.
While they are popular in places like Arizona, California and New
Mexico, they are sprinkled all over the country, says Sahadi, who noted
building these homes has been ``very aggressive'' in cities like
Columbus, Ohio, and Indianapolis.
``Nationally, builders have been devoting more time to the
construction of these types of homes,'' he says, conceding that a
prejudice against them had to be overcome first. But over time, because
of improved technology and a lower cost of building such features, more
of these homes are going up. The more commonplace they are, the more
accepted they are among homebuyers and lenders. As Sahadi puts it.
``This is a theory whose time has come,''
The time may be even more close at hand considering the increasing
awareness of energy usage and cost. Sahadi suggests that with the
energy situation in California this year and growing energy costs
elsewhere, the idea of living in a home that helps conserve energy is
growing in popularity.
Reyes agrees, pointing out that residents in his area seek out
homes that save energy costs. ``Now you have more and more demand for
self-sustaining homes.'' he says. That is not only because they save
money on energy bills, but because people are getting more interested
in conservation in its own right. ``You have more people who are aware
of the needs of the environment,'' Reyes says.
Reyes also believes that the future is bright for growth in energy-
efficient housing once people become more aware of its benefits. ``The
market has not realized the potential as with other types of housing.''
Apparently financing mortgages for unconventional housing has come
a long way, and it looks as though they are here to stay. Local
lenders, who are very familiar with their communities are seeing the
need for such lending products are embracing them. Gone are the days
when, as Walker puts it, federal lenders would look at a mortgage
application for an adobe house with a great deal of skepticism. They'd
see 'mud houses,' and I'm sure they would probably scratch their
heads.''
http://www.earthship.net/index.php/Store/Store/begin-here/banners/
codes-regulations-laws/begin-here/food/index.php?option=com--
content&view=article&id=247
Question 3. What are the different skills required, as described in
your testimony, to install energy efficient products? Do these skills
require increased training, thus increased installation costs?
Answer. The different skills involve training on installation and
maintenance as well as more time to install. These will require
training in the transition period and some increased installation costs
in the long term. These increased costs have been factored into the
cost benefit analysis that were conducted to evaluate the standards.
Even with higher equipment and installation costs, the appliances yield
substantial consumer benefits.
Question 4. What are the major differences between moving an
appliance standard through the regulatory process and the legislative
process?
Answer. The Congress has established general legislative goals for
appliance standards. The Administrative Procedures Act also governs the
process of writing rules. Congress can change the goals and speed the
regulatory process by specifying goals or changing the criteria for
setting standards.
Question 5. How was consensus achieved on the proposed standards
and how do you define ``consensus'' in this context? Was consensus
achieved in 2007, as it relates to the new standards for the
incandescent bulb?
Answer. CFA was a party to the negotiations between the industry
and public interest groups last year. We, along with other consumer
groups, efficiency groups and industry representatives, endorsed the
consensus agreement and the standards when they were conveyed to the
Department of Energy. We cannot speak to consensus being achieved in
2007 as we devoted our efforts to the fuel economy aspects of the
legislation.
Responses of Mark Cooper to Questions From Senator Portman
Question 1. I think one of the largest barriers to wide-spread
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it
is pretty difficult with the tools available to us today to wrap your
head around how much energy you use in a day or a year, and then it is
even tougher to figure out how much a certain energy efficiency
technology can save eventually save you. I believe this uncertainty
makes it hard for a consumer to commit to investing the upfront money
in energy efficiency technology, and I think it is one of the reasons
why so many get concerned when governments talk about mandates on
energy efficiency. Simply put, the uncertainty leaves a lot of money on
the sidelines. Do you agree? If so, what is the solution?
Answer. While information is a problem, there are many other market
imperfections that inhibit the inclusion of technologies that would
increase energy efficiency. My response to Chairman Bingaman's question
above outlines several of these. My testimony identified about a dozen
imperfections that are addressed by efficiency standards.
Question 2. How do we develop metrics for consumers to base their
decisions that is accurate across many different consumers,
environments, and scenarios?
Answer. Labeling programs have relied on simple message like
percentages, estimated bills or even latter grades. Efficiency
standards address the problem more directly by establishing minimum
standards that ensure appliances have consume no more than the specific
level of energy. This relieves the consumer of having to ascertain the
level of energy consumption. Of course, information is still useful to
allow appliance makers to market and consumers to purchase appliances
that exceed the standard.
______
Response of Kathleen Hogan to Question From Senator Bingaman
Question 1. Ms. Hogan, you conclude by saying that ``S. 398
contains provisions that . . . could streamline DOE's standard-making
process.''
Does DOE have any rough estimate of the savings that are expected
to result from such streamlining?
Answer. S.398 codifies agreements that were negotiated, signed, and
promoted by a cross-section of stakeholders representing consumer
advocacy groups, manufacturers, manufacturer trade associations, and
energy efficiency advocacy organizations, all of whom support this
bill. The negotiated consensus agreements would establish energy
conservation standards for 14 products, several of which are in the
midst of DOE's ongoing standards and test procedure rulemakings. If the
standards in S.398 are codified, DOE would end the rulemakings for
those products. Time and resources could then be reallocated to other
areas.
DOE is scheduled to issue final rules for some of the products
addressed in S.398 (furnaces, room air conditioners, clothes dryers,
central air conditioners, heat pumps) by June 30, 2011. S.398 also
prescribes standards for residential clothes washers and dishwashers.
DOE was not scheduled to complete these rulemakings until December 2011
and January 2015 respectively. The direct cost savings from
streamlining the rulemaking process for the consensus standards are
substantial-well over $10 million in program costs through 2015. The
exact amount of savings that would result from streamlining these
standards is difficult to quantify, however, since it depends in large
part on the timing of INCAAA's passage. If INCAAA was passed in the
next few weeks, it would save up to two months or more of work on even
those standards for which DOE is set to issue final rules by June 30.
Even if INCAAA were passed after June 30, it would still speed up the
timeline to implement these standards, enabling consumers to realize
energy savings sooner.
Responses of Kathleen Hogan to Questions From Senator Murkowski
Question 1. Is the rulemaking process undertaken by contractors or
is it done by DOE employees?
Answer. Each and every instance of DOE rulemaking is led by a DOE
product manager. The product manager will have oversight responsibility
over any contractors that carry out the technical analyses required by
the rulemaking process. The rulemaking analysis is guided by an
internal review process, which begins at a standards program level and
then proceeds to an inter-program level. The standards program level,
in order to ensure compliance with DOE policies and quality standards,
develops up-to-date standardized guidance for conducting and
documenting the appropriate analyses. The documents produced by the DOE
staff and contractors pursuant to the analyses are subsequently
reviewed by teams of DOE staff consisting of scientists, economists and
lawyers. This process helps ensure that any errors in analysis are kept
to a minimum. Moreover, the process assists with the creation of
Federal Register notices by standardizing and systematically updating
the set of tools and templates to be used by DOE staff and contractors.
Question 2. What are the major differences between moving an
appliance standard through the regulatory process and the legislative
process?
Answer. The major difference between a standard adopted through the
legislative process as opposed to the regulatory process is that the
regulatory process cannot adopt a standard that contravenes any
existing law. In contrast, legislation can change existing laws. For
example, in establishing appliance standards through the rulemaking
process, DOE is legally limited to considering only the product
categories and efficiency descriptors that are specified in the Energy
Policy and Conservation Act. Through legislation, however, Congress can
specify additional products and descriptors. In this regard, an
important feature of S. 398 is that it would give DOE the authority to
set minimum efficiency standards for additional types of products
including heat pump pool heaters, certain commercial, industrial, and
outdoor lamps, bottle-type water dispensers, commercial food holding
cabinets and portable electric spas. S. 398 also amends the definition
of ``energy conservation standard'' to allow DOE to consider multiple
efficiency descriptors for the same product. Currently, DOE lacks such
authority.
Question 3. How was consensus achieved on the proposed standards
and how do you define ``consensus'' in this context? Was consensus
achieved in 2007, as it relates to the new standards for the
incandescent bulb?
Answer. DOE considers the term ``consensus standard'' to mean a
standard that is submitted jointly by interested persons and is fairly
representative of the relevant points of view (including
representatives of manufacturers of covered products, States, and
efficiency advocates), as determined by the Secretary. DOE encourages
stakeholders to explore opportunities for consensus standards. In the
case of the consensus agreements that would be codified by S. 398, the
parties developed those agreements through direct negotiations. DOE was
not a party in those negotiations.
The new standards for the incandescent bulb would not be considered
a consensus standard. The origin for that standard is legislative.
Specifically, the Energy Independence and Security Act of 2007 (EISA)
includes a provision setting an efficiency standard for 60-watt bulbs.
However, DOE believes that the incandescent light bulb provision
received broad stakeholder support at the time of EISA'senactment.
Responses of Kathleen Hogan to Questions From Senator Shaheen
clean energy standard
Question 1. I would like to get your thoughts on the President's
proposed Clean Energy Standard (CES). From what I have seen, the
proposal doesn't list energy efficiency as a qualifying ``resource'',
as it does for wind, nuclear and natural gas. I think this is a
mistake, since the cheapest unit of power is the one we don't have to
produce.
Several states include efficiency as a resource in their own
Renewable Electricity Standards (RES). Even more states have their own
separate Energy Efficiency Resource Standards (EERS). If these states
recognize the value of efficiency as a ``resource'' shouldn't it also
be recognized in Clean Energy Standard or a separate federal Energy
Efficiency Resource Standard?
Answer. The Administration agrees that energy efficiency can play a
vital role in securing our energy future. To that end, the
Administration is pursuing a number of policies and programs to
increase energy efficiency, including a range of activities already
underway at the Department of Energy as well as proposals such as
HOMESTAR and the Better Buildings Initiative--as detailed in the
President's recently released Blueprint for Securing America's Energy
Future. The President's CES proposal also explained that a CES should
be paired with robust energy efficiency programs and measures that will
lower consumers' energy bills and should include provisions to help
manufacturers invest in technologies to improve efficiency and reduce
energy costs.
We look forward to working with Congress to develop legislation
that achieves these clean energy goals.
Question 2. I would like to get your thoughts on the President's
proposed Clean Energy Standard (CES). From what I have seen, the
proposal doesn't list energy efficiency as a qualifying ``resource'',
as it does for wind, nuclear and natural gas. I think this is a
mistake, since the cheapest unit of power is the one we don't have to
produce.
What role do you see for highly efficient combined heat and power
(CHP) and waste heat recovery systems in a Clean Energy Standard?
Aren't these systems just as efficient and ``clean'' as natural gas,
which IS included in the President's CES?
Answer. The Administration agrees that energy efficiency--including
in the industrial sector--can play a vital role in securing our energy
future. That's why the Administration has been aggressively pursuing
industrial energy efficiency through the Department of Energy's
Industrial Technologies Program.
With respect to a Clean Energy Standard, the Administration
believes that there are targeted opportunities to promote energy
efficiency as part of a CES, particularly in the industrial sector. As
discussed in the President's Blueprint for Securing America's Energy
Future, a CES should include provisions to help manufacturers invest in
technologies to improve efficiency and reduce energy costs. A CES could
also be designed to award credit for electricity generated from onsite
CHP and WHR facilities, in a way that would recognize the efficiencies
gained through cogeneration. We look forward to working with Congress
to explore these and other opportunities to promote energy efficiency
and investment in clean energy in the industrial sector and throughout
the economy.
federal government energy efficiency
Question 3. As you know, the federal government is the single
largest energy user in the country. In fact, in FY 08 federal
government buildings and their operations consumed 1.5 percent of ALL
energy consumption in the U.S. The bill for the taxpayer that year for
federal government energy use was $24.5 billion, of which $7 billion
was spent on the energy needs for federal buildings.
Finding ways to make the federal government more energy efficient
should be a top priority for our national energy policy. There are
significant opportunities out there to save taxpayer dollars and
improve the quality of service that our taxpayers expect from their
government.
Can you tell me what opportunities you see in making our federal
government more energy efficient?
Answer. Identifying opportunities by evaluating Federal buildings,
investing in the deployment of energy efficiency and conservation
projects (ECMs), continually monitoring the performance of these
projects, and benchmarking building performance annually is the best
approach for increasing energy efficiency. Federal agencies are
implementing this approach as prescribed under Section 432 of the
Energy Independence and Security Act of 2007. So far, Federal agencies
have evaluated approximately a third of the Government's 3 billion
square feet of facility space and identified potential annual savings
of 31 trillion Btu or 9 percent of facility energy use. Approximately
$7 billion in potential investment was identified, including projects
that could potentially save 6 billion gallons of water annually. The
potential annual cost savings from implementing these projects is $600
million. Key types of potential ECMs agencies identified are listed
below ranked in terms of number of projects:
Lighting improvements
Water and sewer conservation systems
Heating, ventilation, and air-conditioning improvements
Building controls and automation systems/advanced metering
Building envelope modifications
Boiler plant improvements
Energy-related process improvements
Electric motors and drives
Chiller plant improvements
Chilled/hot water, steam distribution systems
Distributed generation opportunities, including renewable
energy.
Conservation of energy through institutional changes, such as
implementation of operations and maintenance best practices, building
commissioning, default procurement of energy-efficient equipment, and
workforce engagement is also important and could contribute up to an
additional 10 percent reduction in facility energy use.
Question 4. As you know, the federal government is the single
largest energy user in the country. In fact, in FY 08 federal
government buildings and their operations consumed 1.5 percent of ALL
energy consumption in the U.S. The bill for the taxpayer that year for
federal government energy use was $24.5 billion, of which $7 billion
was spent on the energy needs for federal buildings.
Finding ways to make the federal government more energy efficient
should be a top priority for our national energy policy. There are
significant opportunities out there to save taxpayer dollars and
improve the quality of service that our taxpayers expect from their
government.
Where are the gaps? Where should we be focusing our attention?
Answer. Based on preliminary data received from federal agencies
for FY 2010, the federal government has reduced its energy intensity
(Btu per square foot) in buildings by 15 percent compared to the FY
2003 baseline, meeting the goal set under the Energy Independence and
Security Act of 2007. By the end of FY 2015, the goal is a 30 percent
reduction. Recovery Act, regular appropriations and savings-financed
investment of approximately $5.8 billion in FY 2009 and FY 2010 for
efficiency improvements in Federal facilities should keep the
Government on track toward the 2015 goal and meet the reduction targets
for FY 2011 (18%) and FY 2012 (21%). Beyond that, DOE estimates an
additional $5 to $6 billion in investment in facilities will be
required to meet the ambitious goal of a 30 percent reduction in FY
2015. Most of these projects will need to be accomplished through
performance contracting arrangements that use the savings stream from
reduced energy costs to finance the initial investments in capital
improvements. Conservation of energy through institutional changes,
such as agency leadership, implementation of operations and maintenance
best practices, building commissioning, default procurement of energy-
efficient equipment, and workforce engagement also play an important
role.
Question 5. When I was Governor, I made energy efficiency in our
state buildings a high priority. We were successful at it by utilizing
energy performance contracting with energy service companies, such as
Johnson Controls and Honeywell.
Can you tell me how we can better utilize energy performance
contracting within the federal government?
Answer. Energy Savings Performance Contracts (ESPCs) as well as
utility energy savings contracts (UESCs) allow federal agencies to
accomplish energy savings projects without up-front capital costs and
without waiting for Congressional appropriations. These are valuable
tools and are particularly important if federal agencies are to meet
their statutory and Executive Order goals in an era of budget
constraints. The Department of Energy (DOE) awarded indefinite-
delivery, indefinite-quantity (IDIQ) contract to 16 Energy service
Companies (ESCOs). Theseis ``umbrella'' contract was awarded to ESCOs
and their support teams based on their ability to meet stringent terms
and conditions and can be used for any federally-owned facility
worldwide. The DOE IDIQ contract is designed to make ESPCs as
practical, cost-effective and streamlined as possible for Federal
agencies. In addition, DOE provides project support and program
monitoring of contract use and effectiveness.
Since the inception of the DOE program in 1998, 264 projects have
been awarded and more than $2.5 billion has been invested in Federal
energy efficiency and renewable energy improvements. These improvements
have resulted in more than 312.2 trillion Btu saved and more than $6.6
billion of cumulative energy cost savings for the federal government.
With project investment of $440.2 million and $589.3 million,
respectively, and combined cumulative savings of over 128 trillion Btu,
FY 2009 and 2010 were the program's most productive years. However,
meeting our government wide goals will require a substantial increase
over even this level of utilization investment.
Accordingly, we have undertaken a number of actions to strengthen
DOE's management of the program--and will continue to look for ways to
improve. We will shortly have in place a set of streamlined processes,
which we will recommend to users, to shorten the cycle time it takes to
design and award projects. We have recently modified the IDIQ contract
to allow for a more streamlined approach to contractor selection--while
preserving healthy competition among ESCOs at the task order level We
require competitive bids for project financing. We have substantially
enhanced our training program for contracting and energy management
officials; we offer workshops, webinars, other web based, and on-site
training and have, over the past four years, increased the number of
trainees from slightly over 100 to 800--1,000 annually. We improved
management and oversight of the program to ensure that savings are
being fully realized. Additional areas of improvement be under
consideration include: a mechanism to provide reduced and more
consistent (i.e., less subject to market fluctuations) interest rates;
combining federal and non federal funding for more comprehensive
projects, and an examination of opportunities--not easily captured
under the current program/business model--for large scale renewable
energy projects on federal lands but not confined to an individual site
or agency.
Responses of Kathleen Hogan to Questions From Senator Portman
Question 1. Thank you for testifying before the committee today. As
the Deputy Assistant Secretary for Energy Efficiency, you play an
important role in implementing federal policy as it relates to energy
efficiency. I agree with the concept that energy efficiency is the
``lowhanging'' fruit. By my count there are at least 19 active federal
programs at the Department of Energy designed to incentivize the
deployment or development of energy efficiency technologies. They focus
on a number of different energy efficient areas, including energy
efficiency in buildings, industrial manufactures, vehicles. They also
use a number of different mechanisms to drive deployment including
grants, loans, loan guarantees, and other direct or indirect regulatory
incentives. As the Deputy Assistant Secretary for Energy Efficiency how
do you coordinate the efforts of all these programs to ensure that we
are making the most efficient investments in these technologies?
Answer. The Office of Energy Efficiency and Renewable Energy takes
very seriously its role in coordinating efforts across programs to
ensure the Department is making appropriate investments based upon
budgetary directives. EERE leadership meets regularly with program
managers and staff on both a collective and individual basis.
Individual programs track progress against metrics vetted by senior
leadership, and these metrics help inform the conversation.
Question 2. What metrics do you use to determine success or failure
of these programs? How will EERE measure the investments in these
programs against the actual energy efficiency benefits received?
Answer. All of the EERE programs choose multiple metrics so that
emerging clean energy technologies can be compared to competing
conventional technologies. For renewable energy generation
technologies, the levelized cost of energy (LCOE) is an important
metric that incorporates key costs such as the initial capital
requirement, siting, permitting and operations and maintenance. Goals
for developing cost competitive biofuels, batteries, and hydrogen
technologies are based upon the price of existing fossil fuel sources.
Energy efficiency programs use metrics that calculate the amount of
energy avoided and green-house-gases (GHG) at the point of consumption
and overall lifecycle cost savings compared to existing technologies.
Finally, all of the EERE programs assess the barriers associated with
each of these metrics, and then develop more detailed technical targets
(e.g. efficiency, power density, yield, etc.) to measure the success of
the programs.
Question 3. How do you ensure that there is no overlap with similar
programs that are run out of the U.S. Department of Agriculture (USDA),
the Small Business Administration, the Department of the Interior, and
others?
Answer. The Department is committed to regularly engaging with
other agencies about program activities in order to prevent interagency
overlaps. For example, regarding biomassrelated activities, DOE
regularly coordinates through the Biomass Research and Development
Board,\1\ which is an interagency collaborative composed of senior
decisionmakers from federal agencies and the White House-including DOE
and USDA (cochairs); the Departments of the Interior, Transportation,
and Defense, the Environmental Protection Agency; the National Science
Foundation; and the White House Office of Science and Technology
Policy. The Board is charged with maximizing the benefits of federal
programs and bringing coherence to federal strategic planning in
biomass research and development, including minimizing unnecessary
duplication of activities. Several other interagency formal and
informal collaborations function to leverage existing expertise across
agencies with similar missions and goals, such as Memoranda of
Understanding (MOU), regular working group meetings, joint
solicitations, and other mechanisms. Examples of MOUs signed over the
last two years include one on hydrogen with the Army Corps of Engineers
and the Interior Department, one on off-shore wind, marine and
hydrokinetic devices with the Interior Department, and an updated MOU
with EPA on Energy Star.
---------------------------------------------------------------------------
\1\ The Board, as well as the Technical Advisory Committee and the
annual solicitation, were established by the Biomass Research and
Development Act of 2000, and later amended by Section 9001 of the Food
Conservation and Energy Act of 2008.
---------------------------------------------------------------------------
Question 4. The FY12 budget request asks for significant increases
to promote security, a cleaner environment, and a more robust economy.
The EERE budget has 12 of those programs that I referenced above,
ranging from Biomass to weatherization, yet I can find no evidence that
the past increases in funding have resulted in transformative
improvement. Perhaps the historic method of channeling funds through
the myriad DOE offices and programs is not the most efficient and
effective manner of developing and deploying near-term and applied
research in energy efficiency improvements into the market where it can
actually be tested in real applications and against real market
realities.
Is there a better way to move energy efficiency improvements into
the real world?
Answer. The Department believes that increases in funding for EERE
have resulted in transformative improvements for better energy
security, a cleaner environment and a more robust economy. It is
because of past funding increases that many of EERE's investments in
energy efficiency and renewable energy projects are technologies in the
marketplace today. For example, a battery technology developed by our
Vehicles Program is emerging in plug-in hybrid electric vehicles (PHEV)
currently entering the market. LED lighting developed by the DOE is now
also emerging in the marketplace. Additionally, wind and solar markets
are growing at 30% annually, employing technologies developed and
sponsored by DOE. While there is a clear time step between development
of a technology and commercial deployment, EERE seeks to accelerate
that stage of market adoption working with the DOE Loan Guarantee
Program.
The improvements and achievements that have come out of EERE are
not only due to record-breaking technological advances but also through
the development of regulatory programs such as improved building codes
and appliance standards. According to a study by the American Council
for an Energy-Efficiency-Economy (ACEEE), `` peak capacity reduction
from existing DOE appliance standards is expected to reach 72 GW in
2010,'' or about 7 percent of the projected U.S. generating capacity.
A partial list follows of EERE's fiscal year 2010 successes that
support our national imperative for greater security, a cleaner
environment and a more robust economy:
Solar Technologies:
Established Solar America Communities, a 25-city effort to
rapidly increase the use and integration of solar energy in
across the country.
Set a world record: a 27% efficient single junction solar
cell.
Beat a previously held record (by 6.5%) by demonstrating a
18.5% efficient low-indium thin film (CIGS) solar cell.
Vehicle Technologies Program:
Since 1993, Clean Cities coalitions and stakeholders have
displaced nearly 3 billion gallons of petroleum, and are on
track to displace 2.5 billion gallons annually by 2020.
`Clean Cities' deployment efforts accounted for more than
700,000 of the alternative fuel vehicles (AFVs) on the road in
2009.
In August 2010, the number of U.S. alternative fueling
stations topped 6,900, thanks to the coalition's role in
improving alternative fuel infrastructure.
Reduced cost of PHEV Lithium Ion battery to $800 per
kilowatt-hour-a 20% reduction from 2008 baseline of $1000 per
kilowatt-hour.
Fuel Cell Technologies:
Deployed nearly 120 fuel cell lift trucks at four of its
high-volume distribution centers across the country in
collaboration with the Department of Defense Logistics Agency
(DOD-DLA).
As of February 2011, over 15,000 hydrogen indoor refuelings
have been performed at the Susquehanna, Pennsylvania site.
Lowered the cost for fuel cells sized for automobile use to
$51/kw (assuming volume production), down from $275/kw in 2007.
Industrial Technologies Program:
Set a world record by partnering with industry to build 35%-
47% efficient small to medium gas engines for distributed power
generation.
Verified a steel blast furnace using 30% less energy than
conventional designs.
Partnered with Yahoo to create a data center operating with
25% less energy than conventional designs.
Biomass:
Supported 29 integrated biorefineries in various stages of
completion. Each DOE dollar leverages $1.7 in private funding.
Buildings Technology Program:
Supported the development of new standards for commercial
buildings that are expected to result in a 22% reduction in the
energy use of new commercial buildings.
Supported the development of residential energy codes that
are expected to reduce the energy used by new residential
buildings by 30%.
Issued eight appliance standards since January 2009 that
will save customers $260 billion dollars by 2030.
Federal Energy Management Program:
Set a federal record: Implemented $589 million in Federal
Energy Savings Performance Contracts (ESPCs) that will result
in savings to the taxpayer of over $1.1 billion over the
contract lifetime.
Geothermal Technologies:
Demonstrated that geothermal brine can be a source of
lithium and other strategic minerals that can be used in
batteries.
Water:
Launched 7 new hydroelectric facility upgrades--the first in
20 years.
Wind:
Completed advanced computer designs of 3 highly innovative
deep off-shore wind designs.
Question 5. If continuing to increase the funding through EERE is,
in your opinion, the best approach, how do you propose that EERE will
ensure us that these investments are the RIGHT investments?
Answer. EERE has a balanced portfolio of research, development,
demonstration and deployment (RDD&D) programs aimed at improving the
energy efficiency of our economy and increasing the productive use of
domestic renewable energy resources. EERE programs provide a vital link
between advances in basic research and the creation of commercially
successful products and services. EERE does this by supporting a
portfolio of strategic applied research and development projects, and
identifying ways that national policies can create strong markets for
innovations that can be deployed into widespread use by commercial
enterprises, creating new businesses and jobs. EERE continues work with
stakeholders to identify the strategies, plans, priorities and changes
needed to produce the greatest energy savings and public value.
To ensure these are the right investments, EERE uses strategic
analysis to identify and prioritize the most appropriate investments in
our portfolio. This process incorporates an in-depth integrated review
and shared vision of the applied energy programs. EERE strategically
develops a portfolio of technically plausible and productive energy
scenarios that meet U.S. energy demand while improving energy
efficiency and reducing energy use and GHG emissions by more than 80
percent by 2050. Coupled with detailed technology-specific road-mapping
and analysis, these investment decisions are also driven by a
comprehensive set of economic, environmental, and energy security
mandates.
Question 6. When energy efficiency standards and the subsequent
testing and certification requirements affecting commercial food
equipment are updated or changed, is the commercial food equipment
(cooking, refrigeration, warewashing, etc.) industry consulted equally
as part of DOE's outreach to stakeholder groups?
Answer. To the extent the equipment in question is covered by DOE's
regulatory program, the stakeholders, including manufacturers, are
consulted equally. In the case above, commercial refrigeration
manufacturers and the trade organization that represents the majority
of the industry (i.e. AHRI) are major stakeholders involved in both the
historical and current rulemaking activities.
______
Response of Stephen Yurek to Question From Senator Bingaman
Question 1. Mr. Yurek, you point out that negotiating consensus
standards among stakeholders provides certainty about the outcome,
avoids litigation, saves rulemaking costs, and builds trust among
organizations where trust did not exist before.
Some argue that Federal regulation of appliance efficiency is
inappropriate government intrusion in the marketplace. After 25 years
of this program, what do you believe the impact of these regulations
has been on your industry, on job creation, and on the U.S. economy?
Answer. After 25 years of appliance efficiency programs, the
manufacturers of heating, cooling and water heating products have
learned to incorporate the necessary efficiency levels in their product
design, and the mix of products offered to the consumer. Our industry,
like many others, is concerned with the rulemaking process within the
pertinent agencies. No industry can survive if its product requirements
vary among the 50 states. In addition, stakeholder involvement in the
rulemaking process does not always lead to favorable regulations.
Establishing efficiency levels through legislation allows for more
stakeholder involvement and a more transparent process.
With a stable regulatory environment, our members are able to offer
customers a choice of products, offering both minimum efficiency
products and higher efficiency products for consumers who wish for even
higher energy savings. Knowing the next regulatory benchmarks allows
engineers to develop the next generation of heating and cooling
equipment and allows manufacturers to plan for production.
Finally, the energy savings produced by minimum efficiency
standards have saved money for electrical utilities and households
alike. That is money that can be invested in other parts of the
economy.
Responses of Stephen Yurek to Questions From Senator Murkowski
Question 1. What are the major differences between moving an
appliance standard through the regulatory process and the legislative
process?
Answer. Broadly speaking, moving an appliance standard through the
regulatory process is more restrictive and the scope of the regulation
is very tightly defined as opposed to moving a standard through the
legislative process. With legislation, an appliance standard can be
created that applies beyond the boundaries of what the Department of
Energy is legally allowed to do under EPCA. In the context of the AHRI
consensus agreements, there is no regulatory pathway that can allow for
the building codes provision that is contained in INCAAA.
Additionally, in the legislative process, stakeholders have the
opportunity to come together and mutually agree to appropriate
standards; this is unlike the regulatory process where the standards
are initiated by the DOE and then stakeholders are allowed only to
provide comments. Any regulation from an agency may change
substantially from the proposed rule to the final rule regardless of
stakeholder comments--the final rule is at the discretion of the DOE.
The legislative process is a more transparent and direct process that
allows for substantive stakeholder influence throughout.
Question 2. How was consensus achieved on the proposed standards
and how do you define ``consensus'' in this context? Was consensus
achieved in 2007, as it relates to the new standards for the
incandescent bulb?
Answer. The proposed standards were agreed upon after roughly a
year and a half of conversations and negotiations between HVAC and
water heater manufacturers and environmental advocacy groups, such as
the Alliance to Save Energy (ASE); the American Council for an Energy
Efficient Economy (ACEEE); the Natural Resources Defense Council
(NRDC); the California Energy Commission (CEC); and others. Consensus,
in this context, is defined as a negotiated agreement between various
parties but does not imply unanimity amongst all stakeholders.
Question 3. Please describe how your industry has been able to
enjoy a $2 billion positive balance of trade.
Answer. AHRI manages a strict voluntary certification program for
HVACR and water heating manufacturers. Our stringent standards and
exhaustive testing regimen are a source of industry pride. Due to these
rigorous standards, it is more cost effective for manufacturers to
produce their equipment and components in the United States and North
America. The expense of shipping large and irregularly sized products
has ensured that the majority of our products remain manufactured in
the United States. As efficiency standards have increased so has the
size of the equipment and the sophistication of the testing procedures,
leading our members to invest in US based manufacturing distribution
facilities.
Question 4. What opportunities do we have to ensure that
manufacturing jobs, such as those you represent, stay in the United
States?
Answer. The best way to promote domestic manufacturing is to
support policies that ensure the United States remains a highly
attractive place to run a business. There are numerous opportunities to
achieve this goal including: promoting a progressive international
trade policy that will open global markets while reducing tariffs and
regulatory barriers; supporting domestic tax policies that are
favorable for manufacturers; supporting health care reforms that drive
down costs to businesses; and supporting a regulatory environment that
balances compliance costs and benefits of regulation while providing
certainty for manufacturers.
Question 5. Please describe whether Federal standards on appliances
help or hurt American manufacturers.
Answer. In 1987 President Reagan signed the National Appliance
Energy Conservation Act (NAECA) into law. Among other provisions, this
legislation amended EPCA to strengthen federal preemption by making it
much more difficult for a state to obtain a preemption waiver for
appliance standards. Federal standards generally help manufacturers by
providing a uniform regulatory environment for businesses to operate in
therefore avoiding a patchwork of regulations that varies from state-
to-state.
Responses of Stephen Yurek to Questions From Senator Portman
Question 1. I think one of the largest barriers to wide-spread
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it
is pretty difficult with the tools available to us today to wrap your
head around how much energy you use in a day or a year, and then it is
even tougher to figure out how much a certain energy efficiency
technology can save eventually save you. I believe this uncertainty
makes it hard for a consumer to commit to investing the upfront money
in energy efficiency technology, and I think it is one of the reasons
why so many get concerned when governments talk about mandates on
energy efficiency. Simply put, the uncertainty leaves a lot of money on
the sidelines. Do you agree? If so, what is the solution?
Answer. It is ironic, that in today's ``Information Age'' consumers
are often overwhelmed by the amount of information available to them,
sometimes leading to a paralysis in the decision making process.
Through AHRI's certification program, our industry certifies that the
products manufactured meet the advertised energy efficiency. Using
AHRI's website, a consumer or contractor can easily input the required
information and see the energy consumption data of the heating, cooling
or water heating product. The information provided will tell the
consumer if the equipment simply meets the federal efficiency minimums
or exceeds them, qualifying for any potential tax credits.
Question 2. How do we develop metrics for consumers to base their
decisions that is accurate across many different consumers,
environments, and scenarios?
Answer. The strength of S.398, which is based on a consensus
agreement signed by HVACR manufacturers and energy efficiency
advocates, are the regionally based standards for heating and cooling
products. Traditionally, one national minimum standard was applied to
heating and cooling products. Based on a NOAA formula, stakeholders
used Heating Degree Days from each state in order to divide the country
into three regions. Using HDD average within these regions, we
negotiated appropriate efficiency levels for central air conditioning,
heat pumps and furnaces. This ensures that no unnecessary efficiency
burden is placed on consumers who may not have a great need for heating
or cooling, depending on where they live. Consumers will be able to
purchase HVAC equipment knowing that the minimum efficiency is
appropriate for their local heating and cooling needs.
Appendix II
Additional Material Submitted for the Record
----------
March 9, 2011.
Hon. Jeff Bingaman,
Hon. Lisa Murkowski,
Energy and Natural Resources Committee, 304 Dirksen Senate Building,
Washington, DC.
Dear Chairman Bingaman and Ranking Member Murkowski: Consumers
Union,\1\ Consumer Federation of America, National Consumer Law Center,
Public Citizen and National Consumers League strongly support
efficiency standards for lighting, appliances, electronics, buildings,
and vehicles. We commend you for your leadership and effective
bipartisan efforts to promote energy efficiency. Because of the cost
savings for consumers and general public benefits of current lighting
standards, we oppose current efforts to repeal lighting standards
scheduled to go into effect on January 1, 2012.
---------------------------------------------------------------------------
\1\ Consumers Union of United States, Inc., publisher of Consumer
Reports, is a nonprofit membership organization chartered in 1936 to
provide consumers with information, education, and counsel about goods,
services, health and personal finance. Consumers Union's income is
solely derived from the sale of Consumer Reports, its other
publications and services, fees, noncommercial contributions and
grants. Consumers Union's publications and services carry no outside
advertising and receive no commercial support.
---------------------------------------------------------------------------
Minimum efficiency standards provide basic assurance of efficient
performance for many significant consumer purchases. Efficiency
standards have enhanced the numerous lighting options for consumers to
choose from, as inefficient models have been scheduled to phase out of
the market and new options to replace them have been developed. The new
standards are estimated to save consumers billions of dollars in energy
costs over the coming years. Depending on the technology selected,
consumers can save between $20 and $90 per 100W fixture by selecting a
more efficient bulb, as shown in the chart below.
----------------------------------------------------------------------------------------------------------------
Operating cost Total cost
Type of bulb Watts Cost/bulb over 10,000 hrs over 10,000 Consumer savings
(longevity)\2\ \3\ hrs over 10,000 hrs
----------------------------------------------------------------------------------------------------------------
Traditional Incandescent 100 $.75 (1,000 hrs) $115 $122.50 Baseline cost
----------------------------------------------------------------------------------------------------------------
Efficient Incandescent (halogen) 72 $2.00 (1,000 $82.80 $102.80 $19.70
hrs)
----------------------------------------------------------------------------------------------------------------
Compact fluorescent (CFL) 26 $1.50 (6,000 $29.90 $32.90 $89.60
hrs)
----------------------------------------------------------------------------------------------------------------
Solid State Lighting\4\ (LED) 13 $50 (50,000 hrs) $14.95 $64.95 $57.55
----------------------------------------------------------------------------------------------------------------
\2\ Performance based on manufacturer projections. Products in use are likely to see variation.
\3\ Assumes national average of 11.5 cents/kWh.
\4\ 100-Watt replacement: LEDs are still in development and may not yet meet 1600-lumen equivalency. Lighting
fact labels will be required beginning in 2012, which will enable consumers to verify equivalency.
Another way of looking at the consumer savings is how quickly
efficient bulbs would pay for themselves and start providing consumers
a return on their investment. If a consumer replaced one 100-watt
incandescent ($0.75) with one 72W efficient incandescent ($2), payback
would accrue approximately one-third of the way through the life of the
bulb, in about 388 hours or 6 months, assuming the bulb is used 2
hours/day. If the consumer instead selected a 26-watt CFL ($1.50), the
savings would begin after a mere 88 hours of usage, and the benefits
would accrue long beyond that due to the longer bulb life. For a 13W
LED ($50) replacement, savings would begin much later, after 4,625
hours, but the savings over the life of the bulb are significant at
$487.75, and the purchase price of LED bulbs is expected to drop
significantly.
Improving safety throughout the lifecycle of a product is also very
important, and Congress should develop a comprehensive recycling
program for light bulbs, particularly CFLs, in order to recapture
mercury or other possible toxics used in new light bulbs and prevent
them from contaminating landfills. Recycling programs may also be
required for LEDs as we learn more about the toxic materials present.
However, it is important to note that CFLs save between 2 and 10 times
more mercury from the environment than is used in the bulb because
their efficiency avoids mercury pollution that would otherwise be
emitted from coal-fired power plants.
Well-designed efficiency standards have helped drive the market
towards higher quality, more innovative technologies that cost less for
consumers to operate over the life of the product. Efficiency standards
also help lower costs of new energy efficient technology by providing
economies of scale. The result is higher efficiency products that are
more affordable to own and operate and more widely available.
In 1999, the CFLs Consumers Union tested cost $9 to $25 per bulb.
In contrast, those tested in 2010 only cost $1.50 to $5 per bulb, had
shown marked improvement in performance, and provided significant cost
savings to consumers. Largely as a result of efficiency standards,
refrigerators now use 70% less energy than they did thirty years ago,
despite the fact that the average cost has declined and enhanced
features have multiplied. Another dramatic example of the benefit of
efficiency standards has been increasing fuel economy standards for
vehicles, which have saved consumers billions of dollars in fuel costs.
Efficiency standards are also important because they provide a host
of public benefits in addition to those accrued by individual
consumers. It is often the case that some choices are pre-determined
for consumers in the built environment. Utility ratepayers, especially
renters and new homeowners, often move into homes where they did not
select the lighting or appliances in the home. Improved minimum
standards of efficiency help curtail the utility bills they must pay
when they did not have the option to select cost-effective efficiency
measures that would benefit them. Lower utility bills and decreased
energy demand help all consumers and ratepayers by taking pressure off
the power grid, decreasing the need for more power plants, and
decreasing pollution in their communities.
We strongly believe that Congress should continue to move
efficiency standards forward, not backward. We will continue to provide
guidance for consumers in comparing new lighting options and
understanding new lighting labels. We thank you again for your
commitment to energy efficiency that benefits consumers and urge you to
oppose any repeal of lighting efficiency standards.
We thank you for your attention to this important consumer matter.
Sincerely,
Shannon Baker-Branstetter,
Consumers Union.
Sally Greenberg,
National Consumers League.
Mel Hall-Crawford,
Consumer Federation of America.
Tyson Slocum,
Public Citizen.
Charlie Harak,
National Consumer Law Center, on behalf of its low-income clients.
______
National Association of State Energy Officials,
Alexandria, VA, March 9, 2011.
Hon. Jeff Bingaman,
Chairman.
Hon. Lisa Murkowski,
Ranking Member, Senate Energy and Natural Resources Committee, 304
Dirksen Senate Building, Washington, DC.
Dear Chairman Bingaman and Ranking Member Murkowski: On behalf of
the National Association of State Energy Officials (NASEO) we wish to
express our strong support for the Implementation of National Consensus
Appliance Agreements Act of 2010 (S. 398), which reduces the regulatory
burden on appliance manufacturers while reinforcing appliance
standards. We also encourage your continued support for the bipartisan
Energy Independence and Security Act of 2007 lighting provisions, which
are helping move the market toward more innovative and economically
efficient options for consumers.
We strongly support S. 398's provisions and strengthening of
national energy efficiency standards for refrigerators, furnaces, and
other appliances. Improved standards save consumers money, allow for
the more efficient use of resources, and improve the nation's
competitive position overall. The bill's flexible approach aids
manufacturers in meeting standards and allows industry to innovate
while reducing waste and energy costs. This type of energy policy
approach is foundational to the economic prosperity of the United
States. This bill is among the most powerful and practical means to
provide consumers with options to operate their homes and businesses
more efficiently and at lower costs.
In addition, NASEO encourages your support for continuing the
important transformation already underway in adopting more innovative
lighting solutions as envisioned in the bipartisan Energy Policy Act of
2007 signed by President Bush. Moving the nation from a technology that
is more than 100 years old and in the ``rearview mirror'' of our global
competitors to more modern lighting solutions that offer broad economic
benefits at lower costs benefits our states' economies and the nation.
NASEO and our 56 State and Territory members share the committee's goal
to strengthen the nation's economy through sound energy policy
advances. We are encouraged by the thoughtful policies contained in S.
398, and we pledge to work with you to advance this important work.
Sincerely,
David Terry,
Executive Director.
______
Statement of Kateri Callahan, President, The Alliance to Save Energy
On behalf of The Alliance to Save Energy, I would like to thank you
for the opportunity to provide comments on the many benefits S.398, the
Implementation of National Consensus Appliance Agreements Act of 2011
and on the harm to the nation that would result from repealing the
earlier standards on lighting via S.395, the Better Use of Light Bulb
Act.
The Alliance to Save Energy is a non-profit coalition of business,
government, environmental and consumer leaders. We support energy
efficiency as a cost-effective energy resource under existing market
conditions and advocate energy-efficiency policies that minimize costs
to businesses and to individual consumers. Energy efficiency is
America's cleanest, fastest, cheapest, and most abundant energy
resource.
It is vital to the future of our energy system that this committee
put its full support behind INCAAA. This bill would codify the
consensus appliance standards created by the appliance manufacturers,
efficiency advocates, states and consumer groups. It contains improved
standards for HVAC systems, including furnaces, heat pumps and air
conditioners, which take advantage of the latest technologies and
efficiency potential. It also would improve standards for many
currently covered home appliances, such as refrigerators, freezers,
clothes washers, dryers, and dishwashers to maximize cost-effective
energy savings. In addition, it would create new standards for some
previously overlooked products, including some inefficient types of
outdoor lighting.
Our colleagues at the American Council for an Energy-Efficient
Economy estimate that INCAAA would, by 2030, save the United States
about 850 trillion Btus of energy each year--roughly the energy use of
4.6 million homes. That's more energy than was used by the entire state
of Connecticut or West Virginia in 2008. According to these estimates,
the net economic savings to consumers would be $43 billion through
2030. Because consensus appliance standards have historically enjoyed
bipartisan support, INCAAA presents an opportunity for Congress to
achieve real savings for taxpayers while increasing business
competitiveness--a win, win in today's economy.
While wide-reaching, the bill covers a specific list of products:
Residential appliances--refrigerators, freezers, clothes
washers, clothes dryers, dishwashers and room air conditioners
Residential heating, cooling, and water heating equipment--
furnaces, central air conditioners, heat pumps, water heaters,
heat pump pool heaters and service over the counter
refrigerators; and
Drinking water dispensers, hot food holding cabinets and
portable electric spas.
In addition, the agreements include some important changes to
improve and expedite the Department of Energy appliance standards
program, and needed technical corrections to standards enacted in 2005
and 2007.
INCAAA represents the sixth set of consensus standards to come
before Congress to date, the first of which were signed into law by
President Reagan in 1987 and again in 1988, followed by standards
signed into law by President George H.W. Bush in 1992 and President
George W. Bush in 2005 and 2007. INCAAA builds on the success of
existing standards, which according to analysis by ACEEE have created
over 340,000 net jobs.
As you can see from the numbers I have cited, the appliance
standards program is critical for improving energy and economic
efficiency. In 2010 alone, appliance standards reduced national non-
transportation energy use by 7 percent-more than the annual energy
consumption of the state of New York. Enactment of S. 398 will reduce
energy use, save consumers money, improve the environment, and create
new jobs.
The Alliance would also like to strongly urge the committee to
reject S.395. The standard would not ban incandescent bulbs as it has
been reported; it merely requires bulbs to meet a minimum level of
energy efficiency, a common requirement for many appliances. The
standard has already spurred innovation in the field of advanced
lighting technologies. General Electric, Phillips, and Sylvania have
all developed advanced incandescent light bulbs that are now available
on the market that meet the standard--years in advance.
The new standards expand consumer choice. In addition to the new
energy-efficient incandescents, consumers will also be able to choose
from CFLs and LEDs. Those choices will give consumers a myriad of
lighting options that meet their color, brightness and other light bulb
preferences while using less energy.
Ninty percent of the energy in traditional incandescent bulbs is
wasted as heat. The standard will save more than $10 billion / year
(roughly the same as all homes in Texas combined). Many of these new
advanced incandescent bulbs and florescent bulbs are made in the US or
made of US-manufactured components.
Over the course of 30 years, the more efficient lighting is
expected to:\1\
---------------------------------------------------------------------------
\1\ NRDC, Shedding New Light on the U.S. Energy Efficiency
Standards for Everyday Lightbulbs, http://www.nrdc.org/energy/
energyefficientlightbulbs/files/SheddingNewLightFS.pdf.
Provide electric bill savings of more than $10 billion per
year (roughly the same as all homes in Texas combined)
Provide energy savings equivalent to the production of 30
large power plants; and
Mitigate global warming pollution of approximately 100
million tons of carbon dioxide per year
By approving S.398 and rejecting S.395, the Committee will advance
the United States as an international leader on energy efficiency.
Additionally, these actions will help to save thousands of jobs as well
as billions of dollars in energy costs based on the research cited
above. I urge the committee to vote in favor of achieving savings for
taxpayers through energy efficiency.
Thank you for your consideration of my testimony.
______
The Home Depot,
March 9, 2011.
Hon. Jeff Bingaman,
U.S. Senate, 703 Hart Senate Office Building, Washington, DC.
Dear Senator Bingaman, The Home Depot is the largest supplier of
lighting in the United States. Since the enactment of the Energy
Independence and Security Act of 2007, we have been diligently working
with our manufacturing partners to offer consumers innovative and cost-
effective alternatives to incandescent bulbs and will continue to
develop new products such to help our customers save money and energy.
We're particularly excited about our offerings in LED and high-
efficiency incandescent bulbs.
The Home Depot has partnered with leading LED manufacturers
including Philips, Lighting Science Group and Cree enabling us to be
the first in the market to offer cost-effective and most
technologically advances LED bulbs available. LED bulbs are the next
generation in lighting--using up to 50 percent less energy than CFLs
and up to 85 percent less energy than traditional bulbs without
sacrificing light quality. In addition to being energy-efficient, their
life is much longer, cutting down both operating costs and
inconvenience of maintenance. LEDs also dim, have no potentially
dangerous mercury and great color. LED bulbs have been available in all
The Home Depot stores since September 2010.
California began a multi-year phase-out of incandescent bulbs in
January 2011. Home Depot associates in the lighting departments at all
232 California stores have received specified training to provide the
best service and information to our customers. Additionally, we
developed special signage for California stores with information about
their lighting options.
While it is too early to know how consumers nationwide will respond
to the phase-out, The Home Depot has seen a very positive response to
our growing suite of energy efficient lighting options. Please see the
enclosed document for more on the options currently available to
customers.
We would be happy to provide additional updates as more information
from the marketplace becomes available.
Sincerely,
Kent Knutson,
Vice President, Government Relations.
attachment.--lighting options
LED
A LED is a light emitting diode capable of illuminating any space
in your home while dramatically reducing maintenance and replacement
costs. Replacing standard light bulbs with energy efficient LED bulbs
will bring you immediate savings on your electricity bill. LED bulbs
supply just as much light as your old bulbs but use far less
electricity. In fact, the innovative technology uses up to 85 percent
less energy than incandescent bulbs, and up to 50 percent less energy
than CFL bulbs. The lights are reliable, safe and durable with no
moving parts, and generate a high level of attractive brightness. LED
bulbs also have an exceptionally long life expectancy that is 100 times
longer than incandescent bulbs. Each bulb can last up to 100,000 hours,
or 11.42 years. The Home Depot offers a proprietary brand of LEDs under
the EcoSmart name, including a bulb that retails for $17.97 and is a
40W equivalent, offering 429 lumens with a 50,000 hour expected
lifetime, or 40 years, making it the most affordable bulb of its kind
in the market to date.
CFL Light Bulbs
CFLs, or compact fluorescent lights, are an ideal low-energy bulb
for those environmentally-conscious consumers who are also looking to
save money on their energy bills. CFL bulbs emit the same amount of
light as traditional bulbs, but use 75 percent less energy. These bulbs
also last approximately 10 times longer than incandescent bulbs, a
total of seven to nine years, and pay for themselves in just three to
six months. Over the lifetime of the bulb, each CFL can save you up to
$30 of energy costs. (Note: The Home Depot also is among the few
retailers to offer a CFL recycling program)
High-Efficiency Incandescent Bulbs
The first high-efficiency incandescent bulbs to emerge have been
Philips Eco Vantage Line. While bulbs cost $1.50 each, the bulbs also
pay for themselves since they last three times as long and are 30
percent more efficient. A 70-watt Eco Vantage Energy Saver, available
at The Home Depot, provides the same amount of light as a traditional
100-watt incandescent bulb. We also carry a Phillips 60-watt equivalent
that is 800 lumens. Researchers have been able to produce incandescent
light bulbs with up to 50 percent efficiency, so expect more innovation
here, soon.
For more information, please visit www.homedepot.com/lighting
______
International Bottled Water Association,
Alexandria, VA, March 9, 2011.
Hon. Jeff Bingaman,
Chairman, U.S. Senate Committee on Energy and Natural Resources, 703
Hart Senate Office Building, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, U.S. Senate Committee on Energy and Natural Resources,
709 Hart Senate Building, Washington, DC.
Dear Chairman Bingaman and Ranking Member Murkowski, The
International Bottled Water Association (IBWA) supports S. 398, the
Implementation of National Consensus Appliance Agreements Act of 2011
(INCAAA), that includes energy efficiency standards and test procedures
for bottle-type water dispensers.
IBWA is the national trade association representing all segments of
the bottled water industry including spring, artesian, mineral,
sparkling, well, groundwater and purified bottled waters. Founded in
1958, IBWA's approximately 750 member companies in the United States
and throughout the world include bottled water dispenser manufacturers,
bottlers, suppliers, and distributors.
The bottle-type water dispenser standards and test procedures
proposed in S. 398 will aid manufacturers by adopting a uniform
national standard across the country, instead of state standards which
can vary slightly from state to state. The national standard will save
a substantial amount of energy and reduce consumer operating costs
while simultaneously providing consumers with a range of efficient
products. IBWA is committed to environmental sustainability and
reducing the industry's environmental footprint, which is already one
of the lowest in the beverage industry.
Thank you for consideration of our comments. Please do not hesitate
to contact us if you have any questions or if we can ever he of any
further assistance to you.
Sincerely,
Joseph K. Doss,
President & CEO.
______
National Association of Manufacturers,
Energy and Resources Policy,
April 11, 2011.
Dear Chairman Bingaman and Ranking Member Murkowski:
The National Association of Manufacturers (NAM) thanks you for
introducing S. 398, the Implementation of National Consensus Appliance
Agreement Act of 2011 (INCAAA) and your leadership. We submit this
letter in support of this measure.
By way of background, the NAM is the largest manufacturing
association in the U.S., representing over 11,000 small, medium and
large manufacturers in all 50 states. We are the leading voice in
Washington, D.C. for the manufacturing economy, which provides millions
of high-wage jobs in the U.S. and generates more than $1.6 trillion in
GDP. In addition, two-thirds of our members are small businesses, which
serve as the engine for job growth.
Our mission is to enhance the competitiveness of manufacturers and
improve American living standards by shaping a legislative and
regulatory environment conducive to U.S. economic growth. While the
Manufacturers support environmental regulations designed to protect the
environment and public health, we consistently oppose regulations that
create adverse economic impacts on manufacturing without providing any
real environmental or public protection.
The manufacturing sector of American society has much to gain from
efficiency measures. Manufacturers use one-third of our nation's energy
and are directly affected by the cost of energy in making products as
well as by the cost of maintaining office operations. It is widely
acknowledged that energy efficiency offers immediate and cost-effective
opportunities to cut these costs. Therefore, we support S. 398, the
Implementation of National Consensus Appliance Agreement Act of 2011 as
it provides regulatory certainty while creating rigorous energy
efficiency standards.
Again, the NAM thanks you for introducing S. 398, The
Implementation of National Consensus Appliance Agreement Act of 2011,
and your leadership on this issue.
Sincerely,
Mahta Mandavi,
Director.