[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
         ACHIEVING--AT LONG LAST--APPLIANCE EFFICIENCY STANDARDS

=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON ENERGY AND AIR QUALITY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 1, 2007

                               __________

                           Serial No. 110-36


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov


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                    COMMITTEE ON ENERGY AND COMMERCE

    JOHN D. DINGELL, Michigan,       JOE BARTON, Texas
             Chairman                    Ranking Member
HENRY A. WAXMAN, California          RALPH M. HALL, Texas
EDWARD J. MARKEY, Massachusetts      J. DENNIS HASTERT, Illinois
RICK BOUCHER, Virginia               FRED UPTON, Michigan
EDOLPHUS TOWNS, New York             CLIFF STEARNS, Florida
FRANK PALLONE, Jr., New Jersey       NATHAN DEAL, Georgia
BART GORDON, Tennessee               ED WHITFIELD, Kentucky
BOBBY L. RUSH, Illinois              BARBARA CUBIN, Wyoming
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                HEATHER WILSON, New Mexico
ELIOT L. ENGEL, New York             JOHN B. SHADEGG, Arizona
ALBERT R. WYNN, Maryland             CHARLES W. ``CHIP'' PICKERING, 
GENE GREEN, Texas                        Mississippi
DIANA DeGETTE, Colorado              VITO FOSSELLA, New York
    Vice Chairman                    STEVE BUYER, Indiana
LOIS CAPPS, California               GEORGE RADANOVICH, California
MIKE DOYLE, Pennsylvania             JOSEPH R. PITTS, Pennsylvania
JANE HARMAN, California              MARY BONO, California
TOM ALLEN, Maine                     GREG WALDEN, Oregon
JAN SCHAKOWSKY, Illinois             LEE TERRY, Nebraska
HILDA L. SOLIS, California           MIKE FERGUSON, New Jersey
CHARLES A. GONZALEZ, Texas           MIKE ROGERS, Michigan
JAY INSLEE, Washington               SUE WILKINS MYRICK, North Carolina
TAMMY BALDWIN, Wisconsin             JOHN SULLIVAN, Oklahoma
MIKE ROSS, Arkansas                  TIM MURPHY, Pennsylvania
DARLENE HOOLEY, Oregon               MICHAEL C. BURGESS, Texas
ANTHONY D. WEINER, New York          MARSHA BLACKBURN, Tennessee        
JIM MATHESON, Utah                   
G.K. BUTTERFIELD, North Carolina     
CHARLIE MELANCON, Louisiana          
JOHN BARROW, Georgia                 
BARON P. HILL, Indiana               
                                     
_________________________________________________________________

                           Professional Staff

 Dennis B. Fitzgibbons, Chief of 
               Staff
Gregg A. Rothschild, Chief Counsel
   Sharon E. Davis, Chief Clerk
   Bud Albright, Minority Staff 
             Director

                                  (ii)
                 Subcommittee on Energy and Air Quality

                    RICK BOUCHER, Virginia, Chairman
G.K. BUTTERFIELD, North Carolina,    J. DENNIS HASTERT, Illinois,
    Vice Chairman                         Ranking Member
CHARLIE MELANCON, Louisiana          RALPH M. HALL, Texas
JOHN BARROW, Georgia                 FRED UPTON, Michigan
HENRY A. WAXMAN, California          ED WHITFIELD, Kentucky
EDWARD J. MARKEY, Massachusetts      JOHN SHIMKUS, Illinois
ALBERT R. WYNN, Maryland             JOHN B. SHADEGG, Arizona
MIKE DOYLE, Pennsylvania             CHARLES W. ``CHIP'' PICKERING, 
JANE HARMAN, California                  Mississippi
TOM ALLEN, Maine                     STEVE BUYER, Indiana
CHARLES A. GONZALEZ, Texas           MARY BONO, California
JAY INSLEE, Washington               GREG WALDEN, Oregon
TAMMY BALDWIN, Wisconsin             MIKE ROGERS, Michigan
MIKE ROSS, Arkansas                  SUE WILKINS MYRICK, North Carolina
DARLENE HOOLEY, Oregon               JOHN SULLIVAN, Oklahoma
ANTHONY D. WEINER, New York          MICHAEL C. BURGESS, Texas
JIM MATHESON, Utah                   JOE BARTON, Texas (ex officio)
JOHN D. DINGELL, Michigan (ex 
    officio)

                           Professional Staff

                     Sue D. Sheridan, Chief Counsel
                         John Jimison, Counsel
                    David McCarthy, Minority Counsel
                          Margaret Horn, Clerk


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Rick Boucher, a Representative in Congress from the 
  Commonwealth of Virginia, opening statement....................     1
 Hon. J. Dennis Hastert, a Representative in Congress from the 
  State of Illinois, opening statement...........................     3
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     4
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................   141

                               Witnesses

Alexander Karsner, Assistant Secretary, Energy Efficiency and 
  Renewable Energy, U.S. Department of Energy....................     6
    Prepared statement...........................................     9
    Answers to submitted questions...............................   194
Arthur Rosenfeld, commissioner, California Energy Commission.....    18
    Prepared statement...........................................    21
    Answers to submitted questions...............................   241
Evan Gaddis, president and chief executive officer, National 
  Electrical Manufacturers Association...........................    42
    Prepared statement...........................................    44
    Answers to submitted question................................   169
C. David Myers, vice president, building efficiency, Johnson 
  Controls, Inc..................................................    56
    Prepared statement...........................................    58
    Answers to submitted questions...............................   230
Joseph McGuire, president, Association of Home Appliance 
  Manufacturers..................................................    64
    Prepared statement...........................................    66
    Answers to submitted questions...............................   219
Douglas Johnson, senior director, technology policy and 
  international affairs, Consumer Electronics Association........    79
    Prepared statement...........................................    81
Andrew Delaski, executive director, Appliance Standards Awareness 
  Project........................................................    91
    Prepared statement...........................................    94
    Answers to submitted questions...............................   158
Charles Harak, National Consumer Law Center......................   111
    Prepared statement...........................................   113
    Answers to submitted questions...............................   180


          ACHIEVING-AT LONG LAST-APPLIANCE EFFICIENCY STANDARDS

                              ----------                              


                          TUESDAY, MAY 1, 2007

                  House of Representatives,
            Subcommittee on Energy and Air Quality,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
room 2322 of the Rayburn House Office Building, Hon. Rick 
Boucher (chairman) presiding.
    Members present: Representatives Butterfield, Barrow, Wynn, 
Inslee, Baldwin, Hooley, Matheson, Hastert, Upton, Shimkus, 
Pickering, Walden, Burgess, and Barton.
    Staff present: Sue Sheridan, John Jimison, Laura Vaught, 
Chris Treanor, Margaret Horn, David McCarthy, Kurt Bilas, Peter 
Kielty, Matthew Johnson, Legislative Analyst, and Garrett 
Golding.

  OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF VIRGINIA

    Mr. Boucher. The subcommittee will come to order. This 
morning we will examine appliance efficiency standards and hear 
from appliance and equipment manufacturing groups, as well as 
efficiency advocates and officials responsible for 
implementation of Federal and State energy efficiency programs. 
It is our intention to develop legislative provisions from 
today's hearing for inclusion in the energy independence 
legislation which this committee will consider and report to 
the full House during the course of the next several weeks and 
that will be considered on the House floor during the month of 
July.
    Federal law has required the establishment of energy 
efficiency standards for a group of 20 categories of home 
appliances since 1975. However, there have been longstanding 
problems with the implementation of these required standards. 
Earlier this year, the Government Accountability Office 
produced a report which I had requested, along with Chairman 
Dingell and Mr. Markey, on the Department of Energy's record 
with regard to setting appliance efficiency standards. The GAO 
report indicated that DOE has failed to set standards for 17 of 
the 20 categories of appliances originally required by law.
    In fact, DOE missed all 34 of the statutory deadlines for 
developing the standards. These delays have spanned more than 
30 years and encompass administrations of both political 
parties. The GAO estimates that Americans have, to date, spent 
$28 billion for energy that they could have avoided if the 
standards that should have been adopted had, in fact, been 
adopted. Moreover, these inefficient appliances will continue 
operating in American homes and businesses for years to come. 
It is, therefore, clear that the failure to meet the deadlines 
for issuing standards has been a major problem and that the 
past failures have populated our homes and businesses with 
appliances significantly less efficient than they should have 
been.
    Despite these longstanding delays and associated problems, 
there has recently been progress. The DOE entered into a 
consent decree in November 2006 in which the Department 
promised the court it would meet a new set of short-term 
deadlines to make up for the deficiencies and to date, DOE has, 
in fact, met those deadlines. DOE Assistant Secretary for 
Energy Efficiency and Renewable Energy, Andy Karsner, who we 
will hear from today, has an admirable record during his time 
in that position. And I want to commend him for the work that 
he has done. He has pledged to make up the backlog of overdue 
standards. He is to be commended for that program and we all 
look forward to hearing his testimony this morning about the 
work that he is overseeing.
    Further progress has been reached by the affected 
industries and efficiency advocacy groups, which have reached a 
number of consensus agreements on new standards for various 
products. Some of these consensus agreements have been adopted 
into law and others are subject to the DOE regulatory process 
at the present time or are being proposed to this subcommittee 
for legislative enactment.
    While this recent progress is, indeed, promising, serious 
concerns surrounding the appliance efficiency program remain. 
The GAO report identified a number of obstacles to improvements 
in the program. Among the report's conclusions are areas that 
clearly warrant further examination, including the fact that 
DOE lacks the program management practices to ensure that the 
program is kept up to date. Questions about whether DOE has the 
staff and budget resources to make up for the backlog on 
pending standards. Whether the department's product testing 
procedures need to be updated and conducted more frequently. 
The extent to which a State is preempted from adopting its own 
standard for a product that is covered by Federal law, even if 
the DOE has failed to meet its own deadlines for imposing 
regulatory treatment for those particular products. And whether 
the DOE can and should expedite rulemaking proceedings in cases 
where a consensus exists between the affected industry and 
efficiency advocates.
    Other questions also warrant further consideration. DOE has 
concluded that it is prevented by law from setting more than 
one national standard for a given category of appliance. This 
appears to be an unreasonable limitation. For example, 
significant climate variations among zones of the Nation 
suggest that for heating and air conditioning equipment, 
different efficiency standards might be, to quote the statute, 
``technologically feasible'' and ``economically justified.'' As 
a result, the recently adopted DOE standard for furnaces, at 80 
percent thermal efficiency, is below State standards in a 
number of the northern States and is actually below the 
efficiency rating that is achieved by 99 percent of the 
furnaces already on the market.
    Another matter of concern is whether or not DOE should be 
able to set more than one performance standard for a covered 
product. For example, should they be able to set both a heating 
efficiency standard and a fan motor efficiency standard for a 
furnace? In other words, is it appropriate, in some cases, to 
have multiple standards for various functions of a single 
product? There is also a question regarding whether DOE should 
be able to dictate design features for a covered product that 
may have a role in energy efficiency, but would also have other 
roles, such as whether a switch must be provided to turn a 
product, which is normally designed to go into standby mode, 
completely off.
    Today's witnesses will provide us with an in-depth analysis 
of the status of the DOE program, as well as suggestions for 
possible statutory improvements to that program and an overview 
of areas in which consensus has been reached. And I want to say 
welcome to all of our witnesses. We will hear your testimony 
shortly.
    It is now my pleasure to recognize the ranking member of 
this subcommittee, the gentleman from Illinois, Mr. Hastert, 
for 5 minutes.

 OPENING STATEMENT OF HON. J. DENNIS HASTERT, A REPRESENTATIVE 
             IN CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Hastert. Thank you, Mr. Chairman. Thank you for holding 
this hearing. Energy efficiency is certainly an essential 
element of energy security. The hearing today is particularly 
timely as we head into our peak months of energy use, both in 
electricity and in transportation. Efficiency gains we have 
already achieved in the U.S. economy are impressive. The total 
amount of energy used in this country's recent years has not 
grown as much as our economy. That being said, much of our 
economic growth has been spurred by productivity gains made 
possible by innovations that allow us to use less energy to 
accomplish the same amount of work in factories, offices, and 
even at home.
    But far more needs to be done and we should not wait any 
longer to make our cars, our buildings, our appliances more 
energy efficient. If we want to lessen our dependence on 
unstable sources of foreign oil and meet our growing overall 
demand for electricity, we simply must look harder at what we 
could do to be more energy efficient. The Energy Policy Act, 
which we passed last Congress, did just that. We set efficiency 
standards for Federal buildings, raised the level for 
commercial and household appliances and created tax incentives 
for increased energy efficiency and conservation of energy.
    I think it is now important that we hear from the 
Department of Energy. We need to uncover the major reasons for 
DOE's delays in setting efficiency standards. We also need to 
hear what the department is doing to correct the situation and 
what further steps require legislation. It is also important to 
hear from experts in the State government, industry, and other 
stakeholders. Mr. Chairman, we need to make sure that in trying 
to be careful with legislation we don't make the standard 
setting process more complicated or time consuming than it 
needs to be. At the same time, the process must be flexible so 
that the standards can keep pace with new developments in 
energy and more efficient technology.
    Lighting technology is a good example of what we see 
current standards not keeping pace with technology. PolyBrite 
International, for instance, is a company based in Illinois. It 
makes light emitting diode light bulbs that look and feel the 
same as the bulbs that we put in our homes or any of the 
lighting that we have right here in this committee room. The 
difference is these bulbs are 100 percent green with no mercury 
or hazardous material. They last up to 10 years and they emit 
no heat or UV rays and use 90 percent less energy consumption 
than everyday bulbs. They are 90 percent more energy efficient 
than lighting that we use in this country.
    The energy savings cost the Federal Government alone in 
using these types of bulbs could be billions of dollars a year. 
Mr. Upton and Ms. Harman have taken the lead to ensure cost-
saving environmentally safe technology like this is utilized. I 
commend them for these efforts and look forward to supporting 
them as they move legislation forward to upgrade lighting 
efficiency standards in the United States.
    However, we must also look beyond lighting efficiency. 
Vehicles, heating and cooling systems and building design are 
all other areas we need to look closely at to understand what 
we can do to achieve more energy efficiency without asking 
people to compromise safety, security, comfort in the settings. 
I welcome our witnesses and look forward to their testimony to 
learn more on what they feel this Congress and particularly, 
this committee, can do to encourage new technologies and speed 
the efficiency standards process along.
    Mr. Chairman, again, thanks for holding this hearing and I 
yield back the balance of my time.
    Mr. Boucher. Thank you very much, Mr. Hastert. The 
gentlewoman from Oregon, Ms. Hooley, is recognized for 5 
minutes.
    Ms. Hooley. Thank you, Mr. Chairman. I have a statement 
that I will submit for the record, but just wanting to say that 
in 1983, which is a couple of years ago, when I served on the 
Oregon legislature, one of the things we tried to do, along 
with California, is improve the standards for appliances, so it 
is interesting that 24 years later I am sitting here at a 
hearing doing the same thing, so I am looking forward to your 
hearing and your testimony.
    Mr. Boucher. Thank you very much, Ms. Hooley. And I would 
announce that Members who elect to waive an opening statement 
will have the time for that opening statement added to their 
period for propounding questions. The gentleman from Michigan, 
Mr. Upton, is recognized for 3 minutes.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, Mr. Chairman. I appreciate your 
leadership on this issue in having this hearing this morning. I 
would say that there is a great frustration among many in this 
Congress, and I also know in the administration, that we have 
not been able to see a standard given for appliances with 
energy efficiency. It is a great frustration.
    I can remember well when Secretary Bodman came to testify 
before this committee, I want to say 2 or 3 years ago, and in 
that opening testimony, he, in fact, shared that frustration 
and was curious to know about the morale in the Department, 
knowing that they had been decades overdue in terms of 
promulgating these regulations that frankly, the industry 
wants. The American industry DOEs want energy efficient 
standards and despite the pushes and prods by the Congress, the 
legislation, we have really seen nothing move through the door, 
whether it be, perhaps, DOE or through OMB.
    So I look forward to this hearing. I look forward to 
hearing the testimony of our able witnesses and hopefully, this 
will, in fact, start a spark to see these regulations 
promulgated and the appliances built and come into consumers' 
homes all across this great Nation and Mr. Speaker, or Mr. 
Chairman, I yield back my time.
    Mr. Boucher. Thank you very much, Mr. Upton.
    Mr. Upton. I was looking at Mr. Hastert.
    Mr. Boucher. I am told it is not a bad job. The gentleman 
from Georgia, Mr. Barrow, is recognized for 3 minutes.
    Mr. Barrow. Mr. Chairman, I apologize for stepping out for 
a second. I will waive the opportunity for an opening.
    Mr. Boucher. Mr. Barrow waives an opening statement. The 
gentleman from Utah, Mr. Matheson, is recognized for 3 minutes.
    Mr. Matheson. I will waive.
    Mr. Boucher. Mr. Matheson waives his opening statement. And 
the gentleman from Oregon, Mr. Walden, is recognized.
    Mr. Walden. Thank you, Mr. Chairman. I will waive my 
opening statement.
    Mr. Boucher. Mr. Walden waives his statement, as well.
    Mr. Boucher. We now welcome our panel of witnesses and I 
will say a brief word of introduction about each.
    Mr. Andrew Karsner is the Department of Energy's Assistant 
Secretary for Energy Efficiency and Renewable Energy. And as I 
said previously, he has made a commendable commitment to 
improving the efficiency program at DOE.
    Art Rosenfeld is a commissioner on the California Energy 
Commission. Mr. Rosenfeld's outstanding work in the area of 
efficiency spans a number of decades, including his work as co-
founder of the American Council for an Energy Efficient Economy 
and his leadership on a Nobel Prize winning particle physics 
group.
    Mr. Evan Gaddis is the president and chief executive 
officer of the National Electrical Manufacturers Association.
    David Myers is vice president for building efficiency with 
Johnson Controls and is testifying on behalf of the Air 
Conditioning and Refrigeration Institute and the Gas Appliance 
Manufacturers Association.
    Joseph McGuire is the president of the Association of Home 
Appliance Manufacturers.
    Doug Johnson is the senior director for technology policy 
and international affairs at the Consumer Electronics 
Association.
    Andrew deLaski is the executive director of the Appliance 
Standards Awareness Project.
    And Charles Harak is the National Consumer Law Center 
representative. That center is located in Boston.
    We want to say welcome to each of our witnesses and without 
objection, your prepared written statement will be made a part 
of the record. We would welcome now your oral summary and I ask 
that you keep that to approximately 5 minutes. And Mr. Karsner, 
we will be happy to begin with you.

  STATEMENT OF ALEXANDER KARSNER, ASSISTANT SECRETARY, ENERGY 
   EFFICIENCY AND RENEWABLE ENERGY, U.S. DEPARTMENT OF ENERGY

    Mr. Karsner. Thank you, Chairman Boucher, Ranking Member 
Hastert, members of the committee and let me begin by saying 
thank you for your confidence and generous praise in your 
opening remarks. Any success that we are having is largely due 
to the career professionals and Federal employees, some of whom 
are sitting behind me: David Rogers and Rob Lewis and Mike 
McKay and their responsiveness to a new era of organization. I 
also want to thank you for the opportunity to testify today on 
energy conservation standards programs at the Department of 
Energy.
    As is well known, over the last three decades, the 
Department has fallen behind in setting and updating required 
standards. The frustration felt by Congress and by many 
stakeholders is amply justified. I understand the skepticism as 
to whether the Department can remedy this longstanding problem. 
Past delays are the results of many factors over many years and 
cannot be traced to any single administration or management 
team. I am not here to defend that history, but I do want to 
provide some context.
    This is a challenging area of significant complexity, but 
the scale of potential energy savings for our Nation demands 
that we address it with renewed vigor and commitment. By law, 
energy conservation standards settings must incorporate both 
the cost and benefits to the consumer and the Nation, as well 
as the impact on manufacturers. The Department's technical and 
economic analysis must be thorough, accurate and publicly 
vetted with stakeholders to support the very difficult 
decisions involved in setting standards levels that are safe, 
technologically feasible, economically justified and result in 
significant conservation of energy as is required by law.
    Energy conservation standards are generally established by 
three phase public process: an Advance Notice of Proposed 
Rulemaking, what we call an ANPR; Notice of Proposed 
Rulemaking, the NPR; and a final rule. In addition to the cost 
benefit analyses and factors that Congress directed the 
Department to consider in rulemakings and the public comments 
requirements, the Department must also conduct reviews for 13 
other requirements, such as Regulatory Flexibility Act and the 
National Environmental Policy Act of 1969 or NEPA.
    Many of these reviews require preparation of additional 
analyses and/or reviews by other entities such as the Office of 
Management and Budget, the Small Business Administration, the 
Department of Justice and the Federal Trade Commission, for 
example. Nearly one-third of the time to produce a conservation 
standard is devoted to accomplishing these required external 
reviews. Since arriving at the Department of Energy last year, 
I have made efficiency standards a top priority, as has 
Secretary Bodman. The Department is unequivocally committed to 
addressing the backlog of rulemakings and meeting all of its 
statutory requirements.
    On January 31, 2006, the Department submitted a report to 
Congress on its standards activities prepared in response to 
section 141 of the Energy Policy Act of 2005. The report 
publicly laid out our action plan and schedule for rulemakings 
out to the year 2011. Since committing to this schedule for the 
standards program, I am happy to report the Department has met 
100 percent of its targets. We have completed eight rulemakings 
since EPAct 2005, including test procedure rulemaking and 
codification of prescribed standards and it made significant 
progress on others that were under way prior to EPAct 2005.
    In 2006 alone, in fact, we began rulemakings for 12 
additional products. These recent accomplishments represent a 
pace substantially more aggressive than at any time prior in 
the Department's history. Final rules for electric distribution 
transformers and residential furnaces and boilers are presently 
on schedule to be issued by September 30 of this year. The 
Department has published a Notice of Proposed Rulemaking for 
single product test procedure, residential central air 
conditioners and heat pumps and a final rule for multiple test 
procedures.
    Our Department's senior leadership has demonstrated a 
strong commitment to improving the energy conservation 
standards programs. In 3 successive years the President has 
requested budget increases for this program. In addition, the 
flexibility provided by the fiscal year 2007 Continuing 
Resolution allowed the Department to shift additional funding 
into accelerating efficiency standards. These increased 
resources in combination with streamlining and accelerating our 
internal processes are indeed making a difference and have led 
to real efficiency gains.
    One example of the process improvements we are making is 
the use of product bundling within a single rulemaking to 
achieve significant economies of scale. For example, for the 
home appliance rulemaking, we brought together four product 
categories that, for the most part, are manufactured by the 
same companies. This bundling allows us to address the 
backlogged rulemaking for residential dishwashers and cooking 
products, while at the same time meeting the new EPAct 2005 
deadline for commercial clothes washers and residential 
dehumidifiers.
    I am pleased to say that as a result of the collective 
efforts of industry and other stakeholder groups, a consensus 
agreement has been reached on dishwashers and dehumidifiers, as 
well as other home appliance products. In addition to bundling 
similar products, we have organized staff and contractors into 
seven technology teams; heating, transformers and motors, 
lighting, home appliances, space cooling, commercial 
refrigeration and battery chargers and external power supplies.
    The Department is also implementing a substantially 
improved document review and clearance process with an intra-
agency cross-cutting review team that includes the Appliance 
Standards Program in our shop, the Office of General Counsel, 
and the Office of Policy and International Affairs. In 
February, Secretary Bodman sent legislation to Congress 
requesting authorization to streamline the standards process 
and bring more efficient products to market even sooner.
    This fast track legislative proposal would allow the 
Department to move directly to a final rule for certain 
products when a clear consensus for standards exist among the 
manufacturers, efficiency advocates and other stakeholders. In 
some cases, directly proposing a final rule will shorten the 
time to a completed standard by nearly a third and shave off 
months, possibly a year or more off of the rulemaking process.
    I would like to conclude by emphasizing the Department has 
been diligently implementing the productivity enhancements 
described in the Department's January 31, 2006 report to 
Congress. These enhancements are enabling the Department to 
meet aggressive schedule of rulemakings designed to clear the 
backlog of delayed actions that accumulated during prior years 
and simultaneously fulfill all the new requirements of the 
Energy Policy Act of 2005.
    Our multi-year schedules are firm and they are achievable. 
The Department is demonstrating concrete progress and we intend 
to keep this momentum going. We want an open and positive 
dialog with Congress and stakeholders to ensure that the 
government can keep its commitments. We must--and we are--
moving forward.
    Mr. Chairman, this concludes my prepared statement and I 
would be happy to answer any questions the committee may have.
    [The prepared statement of Mr. Karsner follows:]

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    Mr. Boucher. Thank you very much, Mr. Karsner. Dr. 
Rosenfeld, we will be happy to hear from you.

STATEMENT OF ARTHUR ROSENFELD, COMMISSIONER, CALIFORNIA ENERGY 
                   COMMISSION, SACRAMENTO, CA

    Mr. Rosenfeld. Good morning, Mr. Boucher, Mr. Hastert and 
committee. Before I talk about legislation, actually, my job 
has been made a little easier there because if I take the 
opening remarks of Mr. Boucher and Mr. Hastert and they ask 
should DOE have more powers and more resources, I think if I 
answer yes to all of your questions, I will have done, sort of, 
my job.
    I want to take a couple of minutes just to give sort of a 
pep talk on behalf of, I think, all of the witnesses here. We 
are all happy to be loved again with all this interest in 
energy efficiency and we all represent energy efficiency. To 
show how important energy efficiency has been in terms of 
saving money for the United States as a whole and then to take 
the point of view for California, for a moment.
    [Slide]
    If we could have the first figure, not just my name. That 
is a plot of energy intensity. Energy intensity is the amount 
of primary energy which it takes to make a dollar of gross 
domestic product. It is the amount of energy which we need 
every year per dollar.
    The horizontal line is the embargo in 1973. The heavy blue 
line, which has been coming down slowly in energy intensity 
before the embargo and the light red line, which shows a big 
red wedge, is the business-as-usual scenario. We were 
improving. We were improving about less than half percent per 
year. Then suddenly you see the effect of energy policy. You 
see a wedge opening up as we put in building and appliance 
standards, automobile efficiency standards and prices were 
raised, to get our attention, from OPEC. And that wedge 
represents a huge savings.
    This plot is published every month by the Energy 
Information Agency, but they don't put my two little marks at 
the right, which is the dollars. We actually spent, last year, 
for our energy bill in this country $1 trillion, which is 7.5 
percent of our gross domestic product. But if you take the 
business-as-usual line, if we hadn't had energy policy and some 
structural change, it would have been $1.7 trillion. Folks, we 
are saving $700 billion every year through having improved our 
energy efficiency, typically with a 5-year payback, so that 
almost nobody noticed.
    That is a lot of money. That is $700 billion, $500 billion 
of which is energy policy, represents the annual budget of the 
Department of Defense, including the Iraq war. We are all 
conscious of that. We are seldom conscious that just good 
policies have made this advantage. Having made that point, I 
will show the second slide, only for 30 seconds.
    [Slide]
    It is exactly the same information, except in terms of 
energy itself, so you can see a huge wedge of avoided costs, 
even though the energy services went up. We have more cars, 
more homes, more TVs, bigger everything, and yet we are saving 
$500 billion a year.
    Now to make a couple remarks as a Californian. Can I have 
the next plot?
    [Slide]
    Here I am not talking about raw energy, because I don't 
want to get involved with gasoline, which we have sort of 
neglected since 1985, so I am going to talk about electricity 
only where California controls its own destiny. What you can 
see is the good energy policies in California have caused--the 
yellow line is California electricity per capita. The upward 
sloping gray line is the United States electricity per capita. 
They were growing roughly 6 percent a year before the embargo.
    We, in California, introduced building standards and 
appliance standards and conservation programs for the utilities 
to beat the standards and we have kept electricity use constant 
per person for 30 years now, even though everything is bigger 
and there are more loads and Gross Domestic Product per 
disposable income went up 80 percent, we managed to keep 
electricity use constant with better refrigerators, better air 
conditioners, better buildings.
    How much of that comes from standards? I will show you the 
next plot and my last one.
    [Slide]
    This is an attempt by the Energy Commission to show how 
much of that blue wedge can be attributed to building 
standards, appliance standards and our utility programs to beat 
everything that the standards require, if possible, and you 
will see that appliance standards alone represent more or less 
one quarter of the whole picture. Now, those standards are not 
just Federal standards, but when the Feds leave us a hole, we 
go ahead and pass advanced standards and so that is Federal 
plus State standards. And we are very proud of this record.
    From our point of view, DOE is, in some sense, a blessing, 
a mixed blessing. They do some good things, but they are 
usually a little bit weak on the standards and almost 
invariably late, so that my general argument is for more 
flexibility, more powers to DOE, a lot more resources for DOE 
so they can get the standards out on time. We are slightly 
against legislative consensus standards. We think you have to 
do those now to catch up. But in general, we think the good 
analysis with a good staff by DOE is the way to hunker down in 
the future.
    I will particularly make amends to Mr. Boucher's question 
about should DOE be able to address separate features like we 
want clothes washers to also have a water characteristic, 
because water is expensive in California and we are short on 
it. We want air conditioners to be able to have thermostatic 
expansion in addition to co-efficiency of performance. We want 
all those efficient things.
    The last point I am going to make, since I am into 6 
minutes, is a plea for the country to, in fact, for DOE to have 
the power of clarification. The DOE has the power to do the 
question which you, Mr. Boucher, addressed, which is to have 
more than one climate zone for heaters and--so let us say two, 
north and south of the Mason-Dixon line, and three zones for 
air conditioners. And I do want to make the point about air 
conditioners, because it is not so well-known. The point I want 
to describe here is when you say break the country into two 
climate zones, you think of, again, the north, where air 
conditioners run only a thousand hours a year and Miami or 
Phoenix, where they run 4,000 hours a year and you need better 
air conditioners.
    What is not understood so well is that an air conditioner 
in, say, Atlanta, is a very different object from an air 
conditioner in, say, Phoenix. In Atlanta, its main job is to 
take like a 90 degree very damp air and drip the water out and 
that is why it is called air conditioning instead of just 
cooling. Whereas in Phoenix, all we are interested in, or 
California, is 115 degrees outside but no need to drip any 
water out. So an Atlanta air conditioner is basically a dripper 
and a Phoenix air conditioner is basically a cooler.
    With the help of DOE we did runs to look at what would 
happen if we optimized an air conditioner for the dry West, as 
opposed to just one air conditioner for the country and it is 
in my appendix C, we found out that with a 3-year payback and a 
total for its cost to the manufacturer of $200 or retail, maybe 
$400, and a payback time of about 3 years, that we could get a 
15 percent improvement in co-efficient performance. That means 
in air conditioning demand, on a hot afternoon in Fresno or 
Phoenix, and we in California are just not about to give up the 
opportunity for a 15 percent reduction in air conditioning 
load, which is a third of our total load on a hot afternoon.
    Mr. Boucher. Dr. Rosenfeld, I am going to have to ask you 
to conclude. We are almost 4 minutes beyond.
    Mr. Rosenfeld. Luckily, I am through.
    Mr. Boucher. Thank you, sir. Well, you did a very nice job 
and we thank you.
    Mr. Rosenfeld. Thank you, sir.
    [The prepared statement of Mr. Rosenfeld follows:]

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    Mr. Boucher. Mr. Gaddis.

     STATEMENT OF EVAN GADDIS, PRESIDENT AND CEO, NATIONAL 
       ELECTRICAL MANUFACTURERS ASSOCIATION, ROSSLYN, VA

    Mr. Gaddis. Chairman Boucher, Ranking Member Hastert, 
members of the committee, I am Evan Gaddis, president and CEO 
of the National Electrical Manufacturers Association. NEMA's 
430 member companies make products for the generation, 
transmission, distribution, control and end use of electricity. 
I am pleased to be here today to present our association's 
views on the important role of the national efficiency 
standards program and to offer our comments on experiences 
involving consensus standards, legislative changes to the 
statute and role of Federal pre-emption.
    NEMA is experienced with the DOE program as centered on 
lighting, electrical motors and distribution transformers. The 
deployment of energy efficient products is the cheapest, 
cleanest and quickest source of meeting national energy and 
environmental goals. Our industry stands at the very heart of 
our national effort to achieve a reduced dependence on fossil 
fuels, a cleaner environment and a higher standard of living 
across the globe. NEMA supports a robust national energy 
conservation standards program under the Energy Policy and 
Conservation Act, EPCA. We believe that a strong national 
program of standards, test procedures and labeling information 
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. NEMA has 
considerable experience with negotiation consensus standards 
and we support congressional enactment of these proposals. For 
instance, NEMA and the American Council of Energy Efficient 
Economy have submitted joint recommendations for a new standard 
for industrial electric motors. Electric motors consume 65 to 
70 percent of electrical energy used in commercial and 
industrial motor driven systems like pumps, fans and 
compressors. Thus, increases in motor efficiency translate to 
significant energy savings for industrial and manufacturing end 
users. The consensus proposal, if enacted by Congress, with an 
effective date of 2011, is estimated to save 8 billion kilowatt 
hours by 2030 with a net energy savings to consumers of almost 
$500 million.
    NEMA is also engaged in negotiation with interested parties 
on new standards for light bulbs. Lighting use in the U.S. 
consumes some 20 to 22 percent of all electricity generated and 
30 percent of the energy consumed in an office building to use 
for lighting and 5 to 10 percent of residential energy use is 
for lighting. It is estimated that a comprehensive consensus 
agreement that works with market forces could result in $18 
billion in annual energy savings and avoid more than 158 
million tons of carbon dioxide. We believe, based on our 
experience with consensus standards negotiations and 
agreements, that EPCA should be amended to include procedures 
for consensus agreements to be quickly acted upon by the 
Department of Energy.
    To date, our consensus agreements have been enacted through 
legislative action. While this has had the desired effect of 
setting minimum efficiency levels and advancing energy savings, 
it is not practical to expect Congress should have to legislate 
each time a consensus agreement is reached. That is why we 
support changes to EPCA to permit stakeholders to submit, 
through a petition process, their consensus agreement for the 
Department of Energy to expeditiously consider and act upon.
    Mr. Chairman, a fundamental tenet of the Energy Policy 
Conservation Act is the significant and longstanding principle 
of Federal pre-emption. NEMA supports efforts to improve and 
strengthen a national energy conservation program and keeping 
Federal pre-emption intact. Some have proposed that Federal 
pre-emption for a federally covered product should lapse if the 
Department of Energy misses a rulemaking deadline for that 
product.
    To us, this misses the point. Manufacturing should not be 
penalized because of the government's lapse. If deadlines are 
missed, the agency must be called to task by Congress. Placing 
products that should be Federal regulated under a patchwork of 
State regulations is a significant burden for manufacturers, 
distributors and retailers. The consumer and the country are 
best served by having a national energy efficiency program.
    And finally, document review and clearance processes with 
DOE must be streamlined and resources and budgets for the Codes 
and Standards program within DOE must be adequate to perform 
the task. Mr. Chairman, let me thank you for having this 
hearing on DOE standards program. It is a key component of the 
Nation's energy efficiency efforts and NEMA is committed to 
working with you and the subcommittee to enhance these 
programs.
    [The prepared statement of Mr. Gaddis follows:]

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    Mr. Boucher. Thank you very much, Mr. Gaddis. Mr. Myers.

     STATEMENT OF C. DAVID MYERS, VICE PRESIDENT, BUILDING 
       EFFICIENCY, JOHNSON CONTROLS, INC., MILWAUKEE, WI

    Mr. Myers. Thank you, Mr. Chairman, Ranking Member Hastert 
and the members of the subcommittee. My name is Dave Myers. I 
am President of the Building Efficiency business at Johnson 
Controls and I am here today on behalf of two associations, ARI 
and GAMA. Thank you for inviting me.
    Our organizations represent a domestic manufacturing 
industry with combined shipments of over $50 billion annually, 
contributing over $2.3 billion in positive trade balance. Our 
organizations manufacture furnaces, boilers, water heaters, 
heat pumps, air conditioners and refrigeration equipment for 
both residential and commercial applications. We have more than 
240,000 American men and women working in our companies. Our 
industry has long supported energy efficiency.
    We joined forces with the public interest groups and the 
States to work on the 1987 appliance efficiency law called 
NAECA. We worked on national standards and a sensitive review 
schedule. We were also at the table on putting together the 
Energy Policy Acts of 1992 and 2005. Taken together, energy 
efficiency laws are based on three concepts. First, initial 
national standards; second, periodic reviews of those standards 
and third, pre-emption of State actions that can result in a 
patchwork quilt, inconsistent with our national policy.
    Our current appliance efficiency policy has been quite 
effective, but today's policy debate threatens to depart from 
this effective three-part effort. Recent discussion of regional 
standards is a clear departure from an effective national 
policy on energy efficiency. Such regional standards present 
four major challenges.
    First, they produce great difficulties in enforcement. 
Today, original equipment manufacturers actually enforce 
meeting the standards for all products that are manufactured 
and we have certification programs in place to support that. In 
the future, with regional standards, it will require local 
contractors at individual site installations to bear the burden 
of ensuring that all compliance is met with regulations and 
standards. There is no resource or mechanism in place to do 
that today. There will be an incremental cost to be able to 
support that and effectiveness will be a challenge.
    Second, regional standards undermine the economies of 
scales in our industry. Cost of manufacturers and the 
incremental cost of investment to manufacture will increase. 
There will be complexity of the process and we will have to 
meet a wide variety of different standards that may be in 
place.
    Third, they will increase the cost to the consumer with 
disproportionate impact on those living on fixed incomes. It 
will include a higher cost of enforcement; higher cost of 
production, as I just discussed; also, higher costs of 
installation and could take away economic choices of each 
individual consumer.
    Fourth, and most importantly, in my mind, is they may even 
discourage turnover in existing appliances to upgrade to more 
efficient products.
    Recently, our air conditioning industry adopted the 13 SEER 
minimum standards in 2006. We immediately saw a 25 percent 
decline in new air conditioner sales with a corresponding 
increase of 25 percent in after market parts sales. Consumers 
were clearly making a choice not to buy the more expensive 
efficient units and chose to repair or maintain inefficient 
units in the marketplace. In addition, there is also 
conflicting interests. For example, a landlord who bears the 
cost of the initial new equipment purchase may choose not to 
make that investment because the economic gain is paid by the 
tenants who are paying the utility bills, so therefore he will 
not see a direct correlation to the benefit of investing in 
more expensive equipment that is more efficient.
    In addition, although the DOE DOEs not have authority to 
prescribe regional standards, there is already a waiver process 
in place for compelling cases. By contrast, Federal pre-
emption, as envisioned in our efficiency laws, ensures 
predictability and consistency in our regulations. Our industry 
has always supported substantial progress and innovation in 
efficiency improvements. In fact, I view them as the primary 
reasons we are leading in the U.S. marketplace, as well as 
competitive globally.
    And with the impact of legislation of design, I also see a 
challenge in being able to compel innovation in our products if 
we get into the specification of types of design in products. 
That said, we must walk a fine line. Policies that create 
arbitrary distinctions among States and regions and drive costs 
to consumers may run at cross purposes to the policy objectives 
of energy efficiency.
    In conclusion, much can be achieved and not just with the 
stick, but with the carrot. We support sensible standard 
setting, but we must have other policies to encourage 
installation of new, efficient equipment. For action beyond the 
Federal standards, we must recommend tax incentives and 
education and certification programs. One of the keys is also 
to improve the current process within DOE, as Assistant 
Secretary Karsner pointed out.
    For example, the Cool and Efficient Buildings Act in front 
of the House now would provide an incentive to upgrade to new, 
more efficient equipment. We also support legislation of 
incentives to create a catalyst for homeowners to upgrade to 
more efficient products. We would also support an expedited 
process for adopting consensus agreements. We believe it is as 
critical to address the installed base of equipment as it is 
the new equipment and future sales. In this way, I believe 
consumers, public interest, States and industry can all win 
together. Thank you for your time.
    [The prepared statement of Mr. Myers follows:]

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    Mr. Boucher. Thank you very much, Mr. Myers. Mr. McGuire, 
we will be happy to hear from you.

  STATEMENT OF JOSEPH MCGUIRE, PRESIDENT, ASSOCIATION OF HOME 
            APPLIANCE MANUFACTURERS, WASHINGTON, DC

    Mr. McGuire. Thank you, Mr. Chairman and members of the 
subcommittee. AHAM represents manufacturers of the vast 
majority of home appliances sold in the United States. AHAM 
members' commitment to energy efficiency is evidenced by nearly 
60 percent decrease in clothes washer energy consumption, 47 
percent refrigerator energy consumption decrease and the 38 
percent drop in dishwasher energy consumption since 1990. The 
National Appliance Energy Conservation Act provides the 
framework for appliance efficiency standards. Many AHAM 
products are covered by it, including refrigerators, clothes 
washers, dryers, dishwashers, ranges and ovens, room air 
conditioners and dehumidifiers.
    Federal residential appliance standards that have gone into 
effect since 1988 or which will take effect by the end of this 
year will save a cumulative total of 34 quads of energy by 2020 
and 54 by 2030. Over half the energy savings are attributable 
to refrigerator freezers currently in third generation 
standards and about to commence a rulemaking for fourth 
generation standards next year; and clothes washers currently 
in third generation standards and which will undergo a 
rulemaking for fourth generation standards very soon.
    In the case of DOE covered products produced by AHAM 
members, all products have gone through DOE appliance 
efficiency standards rulemakings, while some, as mentioned 
above, have gone through multiple regulatory proceedings. The 
same few full line companies have absorbed much of the cost of 
the multiple rulemakings and standards.
    We believe there are two fundamental strengths of the 
current program. The first is the process used to determine if 
appliance standards are justified. The law requires DOE to 
determine if standards will result in significant energy 
savings based on maximum technological feasibility. DOE must 
then determine if the potential energy savings will justify the 
resulting cost to consumers and manufacturers and whether the 
standards result in the loss of any product functionality or 
feature. The resources to complete such analyses are difficult 
to find at the Federal level and even harder at the State 
level.
    The second strength is Federal pre-emption. It is the most 
effective way to achieve significant energy savings. NAECA was 
enacted in response to the growing tendency of States to enact 
appliance standard programs. While well-intentioned, these 
various State efforts were creating a vulcanization of the 
national market and forcing manufacturers to consider multiple 
product and manufacturing lines. Consumers would be the losers 
in such a regime by bearing the impact of increased costs of 
production. NAECA establishes a process for States to seek 
exemptions from pre-emption if they can show unusual and 
compelling circumstances.
    AHAM opposes proposals to limit or suspend Federal pre-
emption, such as when DOE determines that no standard is 
justified. We also oppose proposals to authorize DOE to 
establish regional standards for products. Such efforts would 
create the same problems NAECA was meant to address. The 
Federal system DOEs have it flaws. For example, in every 
administration resources have been the Achilles heel of DOE 
standards office, but these instances should not be the cause 
for abandoning the Federal approach in going back to a State by 
State system.
    AHAM believes there are steps to improve the current 
system, including adequate funding for DOE. We also think DOE 
should revisit and strengthen its process improvement rule, 
which provided a forum for all stakeholders to participate in 
priority setting. We support DOE with the authority to 
abbreviate its rulemaking process if stakeholders have come to 
an agreement on a new efficiency standard and Congress should 
be open to agreements negotiated amongst stakeholders and 
appliance efficiency that might expedite policy decisions and 
break new ground in environmental protection and energy 
efficiency.
    Mr. Chairman and members of the subcommittee, the agreement 
that we are announcing today on multiple appliances seeks to 
legislate new appliance efficiency standards for several 
covered products, recommends to DOE and EPA that they adopt new 
strict Energy Star specifications for these products and seeks 
to extend the manufacturers tax credit for super efficient 
appliances to more products. A consensus based agreement also 
provides, for the first time, national water efficiency 
standards for residential clothes washers and dishwashers. This 
agreement also calls for new DOE rulemakings for several 
products, including refrigerator freezers.
    These new standards, when combined with the provisions of 
the agreement I just mentioned, will result in total energy 
savings ranging from 7.5 to nearly 15 quads, additional water 
savings of up to 68 million acre feet and consumer utility 
savings will range from $38 billion to $68 billion, depending 
on the cost justification of various standards options. We hope 
this agreement will be included in committee legislation. On 
behalf of the appliance industry, we appreciate the opportunity 
to testify before the subcommittee and would welcome your 
questions. Thank you very much.
    [The prepared statement of Mr. McGuire follows:]

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    Mr. Boucher. Thank you, Mr. McGuire. Mr. Johnson.

   STATEMENT OF DOUGLAS JOHNSON, SENIOR DIRECTOR, TECHNOLOGY 
    POLICY AND INTERNATIONAL AFFAIRS, CONSUMER ELECTRONICS 
                   ASSOCIATION, ARLINGTON, VA

    Mr. Johnson. Thank you, Chairman Boucher and Ranking Member 
Hastert and members of the committee. We commend the 
subcommittee for holding this hearing on the important issue of 
energy efficiency and appreciate the opportunity to provide 
views of our membership. Our members are committed to energy 
efficiency and conservation and we have taken a comprehensive, 
multifaceted approach to addressing energy efficiency.
    First, our industry understands its obligation to inform 
consumers about the energy needs of their products. This year 
we launched a new consumer Web site called 
mygreenelectronics.org. In addition to pointing consumers 
toward electronics recycling options close to their homes, this 
site includes a number of tools which enable consumers to 
identify and purchase energy efficient products. We are very 
proud of this site and we urge you to pay it a visit.
    Promoting the use of industry-led standards for energy 
efficiency is also critical. Recently, CEA developed two new 
industry standards for energy use in set top boxes. We also 
supported the development of a new standard for measuring power 
consumption in digital televisions, as the current decades old 
standard for measuring power consumption is inappropriate for 
today's DTVs.
    Together, these voluntary standards initiatives transform 
the market and deliver more energy efficient products to 
consumers and businesses. We also have taken every opportunity 
to showcase and promote energy efficient products. At January's 
International CES, the world's largest annual trade show for 
consumer technology, we spotlighted the importance of energy 
efficiency and conservation, including displays of energy 
efficient products and technologies, conference sessions on 
energy efficiency and public policy and design award for 
products.
    In addition, CEA, in partnership with the Information 
Technology Industry Council is holding an energy efficiency 
product technology demonstration on Capitol Hill on May 16 and 
we welcome your attendance. Finally, we have worked 
cooperatively with government agencies to promote voluntary 
market oriented programs like Energy Star, which highlight and 
support energy efficient product design and purchasing.
    As you know, the market for consumer electronics is 
dynamic, highly competitive and characterized by rapid 
innovation, significant time-to-market pressures, rapid rates 
of market penetration, rapid transformation from one technology 
to another. In this way, our products are vastly different from 
the more established products, such as residential, industrial 
and commercial appliances.
    Government industry partnerships like Energy Star provide 
the flexibility, market orientation, competitive incentive and 
consumer recognition that are necessary for our dynamic 
industry. Most importantly, Energy Star has had a long and 
established track record of success, as measured by energy 
savings and reduced greenhouse gas emissions. As the U.S. 
Environmental Protection Agency's latest annual report on 
Energy Star indicates, the Energy Star program for consumer 
electronics and residential office equipment has saved 18.8 
kilowatt hours of energy and avoided emissions totaling 3.8 
million metric tons of carbon equivalent. Since 1992, there 
have been 1.1 billion purchases of Energy Star consumer 
electronics products.
    While these accomplishments are positive, we are deeply 
concerned by a recent increase in State legislative activity 
related to appliance efficiency standards. Some of these bills 
have targeted product categories not addressed by DOE 
standards, including external power supplies, also known as AC 
power adapters. So far, seven States have enacted laws or 
regulations establishing energy efficiency standard for 
external power supplies and others may soon join them. This 
developing patchwork of inconsistent State regulations is 
harmful to consumers and innovation.
    Consumer electronics is a global industry with a global 
network of supply and distribution. The existence of multiple 
requirements across different States and regions creates 
design, manufacturing and supply chain difficulties, harming 
efficiency and increasing the cost of final products for 
consumers. For that reason, we urge quick Federal action on 
establishing a national energy efficiency standard for external 
power supplies. This is important not only to prevent divergent 
State activity, but also to facilitate harmonization across 
North America and internationally.
    In conclusion, we believe this committee's focus on energy 
efficiency is important and necessary. Electronics are a part 
of an energy saving solution. Home networking products help 
save energy by providing increased control over home heating, 
lighting and cooling systems. Information technology and 
telecommunications products allow tele-working and remote 
access to information and entertainment, which saves fuel and 
reduces greenhouse gas emissions. As policymakers consider 
programs and policies that support the efficient use of energy, 
we urge Congress to support innovation and promote consumer 
oriented initiatives like Energy Star, which are the keys to 
energy efficiency achievements for the consumer electronics 
industry.
    Thank you again for this opportunity to share CEA's 
position on this important public policy issue. I look forward 
to addressing any questions you may have.
    [The prepared statement of Mr. Johnson follows:]

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    Mr. Boucher. Thank you, Mr. Johnson. Mr. deLaski.

  STATEMENT OF ANDREW DELASKI, EXECUTIVE DIRECTOR, APPLIANCE 
            STANDARDS AWARENESS PROJECT, BOSTON, MA

    Mr. deLaski. Mr. Chairman, Ranking Member Hastert, members 
of the committee, my name is Andrew deLaski and I am the 
executive director of the Appliance Standards Awareness Project 
and I have served in that capacity since 1999. ASAP is a 
coalition project with a Steering Committee representing the 
energy efficiency organizations, consumer organizations, 
environmental organizations, utility industry and State 
government. The Project works to advance cost-effective 
appliance and equipment efficiency standards at both the State 
and Federal level.
    Since 1999, I have been involved in every single major DOE 
appliance standards rulemaking process. I have also worked 
actively on appliance standards at the State level in more than 
a dozen States through both legislative and regulatory 
proceedings. Eleven States have enacted or otherwise adopted 
various appliance and equipment standards since 2004. This 
State action has prompted renewed manufacturer interest in 
expansion of the Federal standards program. Standards first 
enacted by various States formed the basis of the 15 consensus 
standards included in the Energy Policy Act of 2005 and those 
consensus standards, I would submit, are one of the biggest 
energy saving components of the 2005 act.
    So I am deeply honored to be here today to have the 
opportunity to share with the committee some of my views with 
respect to the Federal program and some recommendations for how 
it might be improved. In my oral testimony, I will first 
summarize some of the current and potential impacts of the 
Federal appliance standards program. I will next discuss DOE's 
recent performance implementing the Federal appliance standards 
program and I will close with some specific recommendations for 
legislative reforms. In my written testimony I address the 
seven specific questions the committee raised in the invitation 
to testify today.
    The Federal appliance standards program has delivered 
enormous energy and economic benefits since 1987. Analysis by 
the American Council for Energy-Efficient Economy, one of the 
sponsors of my project, estimates that existing standards will 
save nearly 400 billion kilowatt hours per year by 2020. That 
is with on-the-ground-today standards already in place. These 
standards will cut U.S. electricity use by approximately 9 
percent from levels that otherwise would have been reached. 
Already existing standards will cut peak electricity demand by 
144,000 megawatts by 2020. That is the equivalent to the output 
of about 288 500 megawatt power plants.
    For consumers, the already existing standards on the ground 
today have a net present value of approximately $234 billion. 
For the environment, those savings translate to about 315 
million metric tons less carbon dioxide emissions per year, 
about 4.5 percent reduction of 2020 project emissions. These 
are big savings. However, DOE's failure, as we have already 
heard today, to meet deadlines as documented by the GAO report, 
show that the savings are smaller than what they should have 
been. The opportunity has been even larger.
    DOE's recent commitment to get the appliance standards 
program back on track by establishing firm deadlines and 
sticking to them is good news. We estimate that by issuing new 
standards for products which DOE already has the authority and 
the obligation to review and set standards, DOE could add at 
least another 200 billion kilowatt hours in annual savings and 
cut carbon dioxide emissions by another 165 million metric tons 
per year or about 2.2 percent of projected emissions for the 
year 2020.
    But these savings will only be achieved if DOE establishes 
appropriately strong standards. Meeting a deadline is one 
important goal, but you also have to set an appropriately 
strong standard. In each of the three most recent proposals for 
new standards concerning home furnaces, home boilers and 
electric distribution transformers, DOE has issued weak 
standards. In the case of furnaces, DOE has proposed a single 
national standard met, as mentioned in Chairman Boucher's 
opening comments, met by 99 percent of current sales. Notably, 
DOE rejected State calls for regional standards in their 
proposed rule, saying they lack legal authority to set such 
standards.
    For boilers, DOE rejected a consensus agreement recommended 
by manufacturers and advocacy organizations. With regard to 
transformers, DOE has rejected a standard supported by the very 
electric utility industry which purchase this equipment. In 
several cases, DOE has indicated its hand are tied legally. If 
the law is the problem, as DOE indicates, then Congress should 
clarify the law. I am also heartened that DOE recently reopened 
the comment period with regard to transformers and appears to 
be looking at the possibility of setting a stricter standard 
than originally proposed for transformers.
    Several reforms to the law are needed to help ensure that 
DOE will be better able to capture the savings from cost 
effective standards in the future. We have six specific 
recommendations.
    First, we recommend that Congress authorize DOE to 
establish limited regional standards for heating and cooling 
products only. The same furnace standard DOEs not make sense 
for Michigan as makes sense for Mississippi, nor DOEs the same 
air conditioner standard make sense for Georgia as makes sense 
for Sacramento. The clear needs of different regions of the 
country should not be subjugated to manufacturer preference to 
have a single national pre-emptive standard. Regional standards 
for some products are absolutely necessary to achieve the 
intent of the law to maximize cost effective national energy 
savings.
    Second, DOE should authorize DOE applied additional 
multiple efficiency measures to a single product. A single 
measure is sometimes inadequate to represent a product's energy 
consumption. DOE should have greater flexibility to capture all 
aspects of a product's energy consumption in its efficiency 
standards.
    Congress should require DOE to conduct a furnace standard 
rulemaking on a firm schedule. DOE has the authority to do this 
now without a firm schedule. We are concerned this rulemaking 
just won't happen.
    DOE also should review appliance standards on a regular 
basis. As we heard, one of the principles of the statute is to 
set a standard and also require DOE to review these standards 
periodically. However, once these requirements are completed, 
then they are going to be pre-empted, but there are no further 
reviews. We think Congress should direct DOE to review all 
standards on a periodic basis on a forward-going basis.
    If DOE fails to review a standard, we believe that pre-
emption of State standards should sunset. The potential for 
pre-emption to expire will dramatically increase the pressure 
for DOE and all stakeholders to work diligently to ensure that 
we get adequate national standards. If deadlines are missed, 
authority should return to the States.
    And finally, I recommend that the Congress clarify that 
pre-emption only applies when there is a Federal standard. 
Federal law should not pre-empt State standards in those 
instances where DOE has failed to act or chosen not to exercise 
its authority. Congress should make clear that no Federal 
standards equals no Federal pre-emption.
    This concludes my oral remarks. Thank you again for the 
opportunity to testify today.
    [The prepared statement of Mr. deLaski follows:]

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    Mr. Boucher. Thank you, Mr. deLaski. Mr. Harak.

   STATEMENT OF CHARLES HARAK, NATIONAL CONSUMER LAW CENTER, 
                           BOSTON, MA

    Mr. Harak. Thank you very much, Chairman Boucher, Ranking 
Minority Member Hastert and members of the committee. My name 
is Charles Harak. I am the senior attorney for the energy 
project at the National Consumer Law Center. Throughout my 30 
years as a lawyer, I have worked on energy issues almost 
exclusively on behalf of low-income consumers. Over the past 5 
years, NCLC has represented low-income consumers in some of the 
DOE appliance dockets, as well as in two recent lawsuits. In 
these comments I want to underscore the importance to low-
income consumers of adopting strong appliance efficiency 
standards, particularly for boilers and furnaces. I will also 
highlight some areas where I think the Department of Energy 
could do a better job in carrying out the congressional mandate 
regarding appliance standards.
    Households living in poverty spend 25 percent of their 
total household income to pay for their energy bills. This is 
an unbearable burden. The unsurprising result is that ever-
rising numbers of households are having their gas and electric 
service terminated. Many others live without heat because they 
cannot afford their propane or oil bills. For low-income 
households, applying efficiency standards are much more than a 
way to save energy and reduce harmful emissions. These 
standards could help families to stay warm in the winter and 
cool in the summer and literally keep the lights on by making 
the energy they need more affordable.
    Strong appliance standards are uniquely important for the 
millions of low-income families who rent their dwellings. 
Property owners, not renters, generally replace large household 
appliances, such as furnaces, boilers and water heaters. Yet, 
these owners will often install less expensive and less 
efficient appliances because the tenants bear the higher energy 
costs of operating less efficient appliances. This so-called 
``split incentive'' between property owners and tenants must 
inform congressional and DOE policy regarding standards for 
residential appliances.
    While it is important to be aware of this problem of split 
incentives, appliance standards are also important for all 
consumers. Efficiency standards have had and will continue to 
have a significant impact on overall energy consumption. 
Savings resulting from adoption of stronger boiler and furnace 
standards alone would have a measurable impact on the demand 
for natural gas, thus moderating expected future increases in 
the price of natural gas consumed by households, businesses and 
industry, alike.
    Low-income houses, in particular, benefit from any 
moderation in the price of natural gas because they pay a 
disproportionate share of their incomes for home energy bills 
and often face termination of their service due to non-payment. 
The committee is obviously well aware of DOE's checkered 
history in implementing the appliance standards program. Here I 
would note that from the perspective of low-income consumers, 
the most important improvement that Congress could make in the 
process is to provide DOE with clear authority, if not an out-
and-out mandate to adopt standards for products that vary by 
climate region.
    Numerous parties in the DOE boiler and furnace docket that 
is pending have urged DOE to adopt a two-tiered standard for 
gas-fired furnaces. There is a consensus that a 90 percent 
efficiency standard is economically justified in most States in 
the country. DOE, however, flatly refuses to consider a two-
tiered standard, relying on an unexplained parsing of the 
definition of ``energy conservation standard'' in the law. 
NCLC, along with several other parties, presented DOE with a 
detailed legal analysis as to why, in fact, it has the 
authority already to adopt a two-tiered standard for furnaces. 
We also sent a letter to DOE Secretary Bodman urging him to pay 
personal attention to the agency's position in the furnace 
docket, regarding its authority to adopt a two-tiered standard 
for gas furnaces.
    At the moment, however, it appears that DOE DOEs not intend 
to change its position and will only consider a single weak 
standard for the entire United States. Congress should 
carefully consider the adoption of legislation to overcome this 
unnecessary obstacle to the attainment of cost-effective energy 
savings. If Congress wishes to clarify that DOE can adopt 
regional standards for any product where this would best carry 
out congressional intent, NCLC attaches to this testimony 
proposed legislative changes, as well.
    Congress should also consider mandating that DOE address 
the issue of regional standards for furnaces promptly, within 
the next 18 months. DOE is unlikely to adopt a two-tiered 
standard in the pending rulemaking that will probably end up 
later this year. The weak nationwide standard proposals will 
not take effect until 2015, 14 years after it began considering 
revisions to the existing standards. Unless Congress mandates 
that DOE immediately revisit furnace standards, DOE may not 
implement new furnace standards until 2020 or later. In the 
pending furnace docket, DOE has all of the technical and 
economic information it would need to promptly adopt a two-
tiered furnace standard.
    On behalf of the National Consumer Law Center, I thank the 
committee for allowing me to testify today.
    [The prepared statement of Mr. Harak follows:]

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    Mr. Boucher. Well, thank you very much, Mr. Harak. You got 
the award for timing. You were within 3 seconds of 5 minutes.
    Mr. Harak. I timed it before I got here, Mr. Boucher.
    Mr. Boucher. Very well done. And I want to say thank you to 
all of the witnesses for their well-prepared and delivered 
testimony here this morning.
     Mr. Karsner, let me begin my questions with you. You have 
mentioned, in your testimony, that certain new items of 
legislation would be helpful in addressing problems that you 
perceive with the existing statute and also giving you some 
helpful new regulatory flexibility. Could you be more specific 
in what you are recommending to us?
    Mr. Karsner. Yes, sir, Mr. Chairman. Specifically, and it 
has been mentioned by several people up here in their 
testimony, movement towards a consensus rule. Effectively, 
anything that we would request for new legislation that would 
give the Department additional flexibility to compress the 
timetable. As has been said, it is one thing to establish a 
critical path and bring some order to chaos; it is another 
thing to be able to analyze that critical path and determine 
whether or not you can compress it in some logical way that 
still has equitable fairness. We think moving to a consensus 
rule, when all of the manufacturers, advocates, stakeholders 
and all the relative parties are in agreement, expediting the 
process, is quite important, so we have sent legislation to the 
Hill to that end.
    Mr. Boucher. I understand that. What else?
    Mr. Karsner. Well, a lot that was mentioned here today are 
things that are new. They would be either amendments to the 
existing EPCA or new in statute, but specifically, the 
potential for considering different regions of the country and 
different climate zones, giving DOE a greater latitude to look 
at design features in addition to performance features. These 
are all things that we would avail our technical expertise to 
the committee and be happy to collaborate on.
    Mr. Boucher. OK. Well, thank you very much. Let me suggest 
that you send us a list of specific statutory changes that you 
think would be appropriate for us to make. We are in the 
process now of considering what changes to make and we are on a 
fairly short timeframe in terms of reporting legislation for 
consideration by the full House that will be on the floor in 
July of this year. So if you could submit to us, within the 
coming 2 to 3 weeks, a list of proposals for legislation, that 
would be extremely helpful.
    Let me ask a question for all of the witnesses. For the 
consensus standards that have been developed specifically for 
clothes washers and for dishwashers, I think Mr. McGuire 
described that new set of consensus standards in his testimony, 
would everyone here agree that we should codify those consensus 
standards by a statute and do so in the near term? Any comment 
on that? Anyone opposed to us doing that? Let us put it that 
way. I don't see any hands. Well, there is Dr. Rosenfeld.
    Mr. Rosenfeld. I think the advocates have done a good job 
and I reluctantly support it, but I do want to say California 
didn't sign on because the standards for water factor in 
clothes washers were not up to what we need in the State of 
California.
    Mr. Boucher. OK, thank you. Mr. deLaski.
    Mr. deLaski. We are participating in those negotiations and 
strongly support the recommendations that Mr. McGuire outlined 
today. These, I think, the industry represents. We have had 
numerous negotiated agreements over the years. This latest, I 
think, is the most global in terms of addressing multiple 
products and addressing both new standards for several products 
require new rulemakings, as he mentioned, for clothes washers 
and refrigerators, tax credits for promoting the most efficient 
products.
    Mr. Boucher. The precise question is should we incorporate 
these consensus agreements in the statute?
    Mr. deLaski. Yes.
    Mr. Boucher. Thank you, Mr. deLaski. Mr. Harak. Well, if 
you disagree with that, tell me. If you don't, let us pass on 
to another question. We will assume that is the consensus view 
of the panel. OK. The next question would be this. There has 
been an endorsement from at least Mr. Harak, Mr. Rosenfeld and 
Mr. deLaski that we have regional standards with respect to 
heating and cooling products and I would like to ask the entire 
panel if they would agree that these regional standards should 
be limited just to heating and cooling products or would it be 
appropriate to have regional or other variable standards for 
other kinds of products, as well? And if for other kinds of 
products, what other products? Who would like to answer that? 
Dr. Rosenfeld.
    Mr. Rosenfeld. Do I sound like the broken record? I just 
want to remind you that water is very expensive in the West, 
which is a region.
    Mr. Boucher. Thank you. Yes, Mr. Harak.
    Mr. Harak. I would say at the moment those are the most 
important products and I think in the pending docket on boilers 
and furnaces, it is extremely important to move forward on 
heating and cooling products.
    Mr. Boucher. So you would say limit it to heating and 
cooling, at least for the time being?
    Mr. Harak. At the moment I am comfortable with that, yes.
    Mr. Boucher. Would everyone agree we should limit that to 
heating and cooling and not provide DOE with greater latitude 
in order to set regional standards or other variable standards 
for other kinds of products?
    Mr. Harak. If I could amend, it is hard to know when there 
might be other products and if you were going to fix the law, 
if you changed it in the way you suggest, you have made it even 
clearer that maybe they don't have authority on other products. 
I read the current law that they have regional authority, but 
if you are going the direction you are suggesting, you would 
need a further amendment of Congress if there were another 
product where its efficiency and utility varies by region, the 
economic benefits vary by region. I would be a little cautious.
    Mr. Boucher. All right. Yes, Mr. McGuire.
    Mr. McGuire. Mr. Chairman, we would oppose extending it to 
other products and we certainly do not support it covering 
heating and cooling products, although those are not my 
products, I think it is the gentleman next to me, but we think 
the national standard, which takes into account national energy 
savings and the features and functionality of the products is a 
tested and true process and I think we need to leave it to the 
innovation of the product manufacturers to work within a 
performance standard to deliver the energy efficiency and 
performance that they can do.
    Mr. Boucher. Mr. Myers.
    Mr. Myers. Mr. Chairman, I guess I would support the 
national structure, even though we specifically are talking 
about heating and cooling products here. I guess I would point 
out that consumers are making choices, even within regions. 
More than two-thirds of the furnaces now sold in the Northeast 
are at levels above inefficiency, above the minimum standards, 
so we are making economic sense. The consumers are choosing to 
do so.
    Mr. Boucher. Well, let me just ask both of you this 
question. If we were to have, I think, perhaps, it was Dr. 
Rosenfeld who suggested two regions, a North region, a South 
region. He nods and says it was him. How much added burden to 
you would that be? You are manufacturing to two standards 
instead of one. Surely, that would not be an enormous 
additional burden, wouldn't it?
    Mr. Myers. I think, from a manufacturing perspective, 
perhaps not, but I think the effectiveness of the standard in 
those two regions would result in minimal benefit in the 
overall cost structure. I think when you talk about the ability 
to enforce it, the compliance, it moves it from centralized 
product certification and management within the OEMs and 
imported products to the field. Do they have the resources to 
enforce it? Can they verify each installation? Is operating 
within the conditions set for that particular region?
    I think you have the practical side of legislation. We are 
very ineffective from the standpoint of timing and the 
processes we have described here with the DOE. Now we are going 
to do it with two separate activities that might have complete 
processes individually done by region that only burdens it 
further. And I think we have demonstrated where national 
standards have been passed, they are very effective and we are 
achieving the standards. I guess the last point I would make 
is----
    Mr. Boucher. Well, my time has long expired, but let me 
just say that an argument has been presented that I think 
deserves our consideration, that with regard to heating and 
cooling in particular, where we do have different 
functionalities that perhaps should apply in different 
climates, that a different standard, perhaps, would be sensible 
within that very limited context and I think what we have heard 
from our witnesses is that the limit for that context would, in 
fact, be heating and cooling and not anything broader. And as 
much as I would like to call on you, Dr. Rosenfeld, I simply 
don't have the time to do it. He is going to say water, anyway. 
No, no. He is not. Well, in that case, with the indulgence of 
my colleague from Illinois, let me ask you, then, Dr. 
Rosenfeld, what you do have in mind?
    Mr. Rosenfeld. I just want to point out, with respect to 
the problem of heating and cooling that in California we have 
16 climate zones, compared to just one for the country, is a 
little pathetic. And we require better windows in some climate 
zones than in others and there isn't any problem with 
administering this. We have Low-E windows required in some 
climate zones and not in others and it all works fine.
    Mr. Boucher. All right. Thank you, Dr. Rosenfeld. The 
gentleman from Illinois, Mr. Hastert, is recognized for 5 
minutes.
    Mr. Hastert. I thank the chairman. First of all, I would 
entertain a UC request.
    Mr. Boucher. Oh, yes. I ask unanimous consent to include in 
the record of today's proceedings the statement of the chairman 
of the full committee, Mr. Dingell.
    Mr. Hastert. Without objection.
    Mr. Boucher. So ordered.
    [The prepared statement of Mr. Dingell follows:]

    Prepared Statement of Hon. John D. Dingell, a Representative in 
                  Congress from the State of Michigan

     Mr. Chairman, thank you for calling this hearing on the 
Federal program that establishes energy efficiency standards 
for appliances. As one who participated in enacting the Energy 
Policy and Conservation Act of 1975 that originally created 
this important program, I am perhaps more conscious than most 
of the degree to which we have wasted the opportunity to save 
energy from increased appliance efficiency in the 32 years 
since then.
     Thirty percent of our electricity demand is attributable 
to residential electric appliances, which makes them indirectly 
responsible for about 15 percent of our national carbon dioxide 
emissions. We have improved their energy efficiency 
significantly without loss of performance, indeed with better 
performance. But we could have done so much better if we had 
adopted timely standards that met the statutory test of 
requiring the energy efficiency that was ``technologically 
feasible'' and ``economically justified.''
     In March, we released the Government Accountability Office 
report on this topic that Chairman Boucher, Chairman Markey, 
and I had requested, as Chairman Boucher has already noted. The 
track record of this program has been a long series of 
derailments or trains that never left the station. I can think 
of no other critical energy program that has such a long 
history of failure to meet its objectives.
     Now, however, we are seeing the early signs of new and 
effective leadership from Assistant Secretary Karsner, who is 
here to testify this morning. He has told us that he can and 
will meet the current deadlines for new standards. We will help 
him keep his promise.
     But setting standards is only half the necessary 
commitment. They must also be the right standards. They must 
strike a demanding balance between first cost, cost of 
operation, and technical features to minimize energy 
consumption. In this way, our household appliances can help 
make a major contribution to meeting our climate challenge.
     I appreciate the fact that the efficiency advocates and 
the appliance manufacturers have many times been able to find 
consensus on new standards, saving the time and uncertainties 
of waiting out the Department of Energy's rulemaking process. 
This is one way to get there, and we need to encourage more 
such consensus agreements.
     We also need to review where changes in DOE's rulemaking 
process will lead to more effective implementation. I for one 
am ready to move quickly on legislative recommendations that 
emerge from this review. It has been 32 years since this 
program started; I would like to see DOE implementation fully 
up-to-date for all covered appliances.
     For all of these purposes, this is a timely and important 
hearing, and I thank Chairman Boucher and the subcommittee for 
undertaking it.
                              ----------                              

    Mr. Hastert. Thank you, Mr. Chairman. I came into this 
hearing and I am kind of jumping into this stuff from another 
world in the last 6 months, but I thought this was kind of an 
esoteric hearing, in a sense, and talking about standards and 
as I listen and go through this, it is somewhat of a conundrum 
because I have a base philosophy that economics drives 
behavior, especially what people buy. For instance, I am 
involved with building a house in southern Wisconsin. My 
brother sells heating and air conditioning equipment in 
northern Illinois, yet the products that he recommends in 
northern Illinois are completely different from southern 
Wisconsin, only 100 miles apart, but the weather is different.
    And so the products that that market demands are completely 
different or not completely, but there is a variation from the 
products that people in northern Illinois need and what is 
economically viable. And I understand if you move to northern 
Wisconsin or into Minnesota, those again, products are 
different. We are building a house to an R28 level. You don't 
have to build houses in other places to R28. But the variation 
of wind and temperature and other things demand or show that 
economically, that is a viable thing to do.
    So here we are saying how DOEs the DOE set more rules and 
more regulations in an effective way? And of course, I have 
been in the rule and regulation business now, I am sorry to 
say, for almost a quarter of a century, more than that. And 
sometimes rules and regulations work, but I found mostly that 
government lags behind what the industry can offer. And so if 
the government regulation becomes a ceiling instead of a floor 
of what can be offered, I see we enter ourselves into a 
conundrum. We are saying we are limiting what our efficiency 
could be because we are just meeting the standards.
    Now, I understand that if we get in a situation and I think 
that is a very good point that Mr. Harak brings out, that if 
landlords are buying the equipment, they have a different 
economic view of this than consumers do and he rightly supports 
the consumers. My question is how do you make it economically 
feasible for a landlord or the base consumer of the product to 
buy the most efficient product to build his house or his 
apartment building in the most efficient way or to remodel to 
make those efficiencies apparent? And this is the bottom line. 
How do we change behavior?
    And I just have to come back, if it is economically 
feasible, if it pays, if it make economic sense, that is what 
is going to drive this issue, so all you folks that represent 
industries, you have these regulations that you are going to 
have to deal with, I don't know if anybody here represents a 
company, per se, except for maybe Johnson Controls, that you 
know, you are there representing the consensus of a lot of 
ideas from a lot of people. But the fact is, what is the best 
way to make and to deliver something that is really effective 
and really cost-efficient in two things?
    We want to lower our energy demand and of course, a lot of 
this energy comes from off-shore. If the generation is 
generated like it is in the northeast, by fuel, or it is more 
effective and more efficient to lower energy demand, period, 
because we are putting less CO\2\ into the air and other things 
that are important today. Mr. Harak, what you recommend?
    Mr. Harak. Mr. Hastert, you raise a lot of very interesting 
points and I made a few notes. I want to go through them 
briefly. First is to the ceiling and floor issue. I think it 
would be very fair to say that DOE is setting a floor, not an 
irrationally low floor, but there is this ceiling or this range 
way above it through the Energy Star program. Whenever DOE sets 
a standard for a product, there are still many products on the 
market that are more efficient and then there are incentive 
programs that layer on top of the DOE minimum standard. So I 
don't think we are setting a ceiling that stifles technology.
    And the counter-example I can think of to what the market 
can do on its own, compact fluorescent bulbs use 75 percent 
less energy than the incandescents, but they don't penetrate 
the market very much in the United States, at least. Penetrate 
the market much more significantly in all the other 
industrialized economies, so there are things that don't work 
in the market very well and consumers knowing enough to make 
choices.
    Mr. Hastert. But let me counter that. I have a company in 
my district that has a terrible time trying to penetrate the 
market. You know why? Because traditional light bulb companies 
want to be able to change the lights every year. They don't 
want to put a light into the socket that is going to be there 
10 or 15 years. It is not economically viable for them. So how 
do you turn that thing around?
    Mr. Harak. Well, the problem is that is inefficient for our 
economy that is spending dollars on energy in our economy that 
could go to other productive uses are a drag on our economy and 
I think Dr. Rosenfeld gave us some great examples of the 
magnitude of that, so we don't want to be dragging our economy 
with inefficient expenditures. The landlord/tenant example, it 
is a tough one to wrestle with. I would say, as someone who 
represents low-income tenants, if the landlord had to and could 
calculate to the penny how much the rent or the sale price of 
that unit goes up, it pays back so quickly that the tenants are 
better off and we need to drive those decisions.
    Mr. Hastert. Simple answer is make the landlords pay the 
utilities and take it out of that, but anyway.
    Mr. Harak. Well, that is another hearing we can do someday.
    Mr. Hastert. Mr. Rosenfeld, very quickly. Comment.
    Mr. Rosenfeld. I support your general support of regional 
standards. And I believe that with respect to the landlord/
tenant problem, our belief in California is make the landlord 
install an efficient appliance. He knows that there will be a 
short payback time. It makes his property more attractive.
    Mr. Hastert. Thank you, thank you. I yield back, sir.
    Mr. Boucher. Thank you very much, Mr. Hastert. The 
gentleman from Utah, Mr. Matheson, is recognized for 8 minutes.
    Mr. Matheson. Thank you, Mr. Chairman. Dr. Rosenfeld, as 
someone who represents the second most arid State in the 
country, I appreciate your reference to water efficiency and I 
want to start with a question for you. In your testimony you 
advocated for the regional standards and you have heard some of 
the--in fact, you have also said that States may be able to 
develop their own standards in case DOE misses deadlines. How 
do you reconcile this with the issues raised by the 
manufacturing sector about how they deal with the cost issue of 
multiple jurisdictions and multiple sets of rules?
    Mr. Rosenfeld. I think that the manufacturers have really 
already dealt with this. We already heard Mr. Boucher say and 
corroborated that the efficiency of furnaces sold in cold 
States way outweighs the standards. The standards are left in 
the dust. And these are huge markets. We are talking, even if 
we break the country into three air conditioning regions, we 
are talking about 80 million customers in each of these 
regions. I don't see any problem with the manufacturers going 
for individual markets for 80 million people.
    Mr. Matheson. Mr. deLaski, you made a number of very 
interesting recommendations in your testimony. I noticed in the 
table in your testimony where you looked at potential savings 
from DOE rulemakings, you raised the issue of furnace fans and 
at least on percentage, it is your highest one on your list and 
yet, you also pointed out, in your testimony, that we don't 
seem to have progress on furnace fan rulemaking with the DOE. 
Could you tell us why that hasn't been happening?
    Mr. deLaski. A furnace, obviously, uses natural gas or oil 
to create heat, but then you have got to get that heat to where 
people need it, through both a fan and a motor to blow it into 
the home. That fan system is one of the largest single 
electricity uses in most homes. It is an aspect of energy 
consumption that currently has no standard whatsoever. DOE has 
determined that it will only set a standard that addresses the 
efficiency with which the furnace turns the oil into heat, the 
heating aspect of it. And Congress, in 2005, gave DOE 
authority, in the Energy Policy Act, to address furnace fans. 
DOE said subsequently, we are not going to do it, we got the 
voluntary, so we are not going to do it until we don't know 
when. So we think that Congress should set a deadline to 
address that.
    Mr. Matheson. Mr. Karsner, is that DOE's position, that it 
is not--or is there confusion at DOE about whether or not you 
are able to set more than one performance standard for a 
particular appliance?
    Mr. Karsner. I wouldn't say there is confusion. I think the 
Office of General Counsel has taken the position, from 
interpreting the statute, that DOE DOEs not presently have that 
authority to set multiple standards at the same time in that 
way.
    Mr. Matheson. OK. Mr. Chairman, it looks like that is an 
issue we get to look at, then, if that is the case, because it 
seems like there is some low-hanging fruit here that we are 
avoiding on the furnace fan issue, to say the least.
    Next question I would like to ask is, Mr. Karsner, we have 
talked about the delays and we have talked about the challenges 
that face DOE, my question for you is when DOE develops 
internally its technical expertise that is necessary for 
evaluating these efficiency standards, is all that work done 
in-house or do you work with other Federal agencies, such as 
NIST, in terms of finding technical expertise to deal with 
these issues?
    Mr. Karsner. Let me revert back to the record to the extent 
that we cooperate with NIST and the other agencies. My 
impression is that we do, but it is not all in-house in the 
sense it is largely driven by outside contractors predominantly 
through our national laboratories. NIST, EPA and other agencies 
use DOE's national laboratory system, so I am not sure to what 
degree we credit where the collaboration lies.
    Mr. Matheson. Right.
    Mr. Karsner. But generally speaking, there is inter-agency 
collaboration and a great deal is done out of the house, 
predominantly through the national laboratory system.
    Mr. Matheson. Do you think that we ought to be looking at 
ways to encourage a more fluid and efficient inter-agency 
process to help expedite your process? I am on the Science 
Committee, too. I think, just for example, NIST is a very solid 
organization. Are there things Congress needs to do to make 
that inter-agency process work better, do you think?
    Mr. Karsner. Yes, I do think that there are things that 
could be helpful that Congress could do.
    Mr. Matheson. I know our chairman asked you for some 
suggestions on legislation and I might throw that on the list, 
as well. I am not trying to gum up the works, if there is a 
more efficient way to create that cooperation, I think there is 
a real talent pool in some of these agencies that might be able 
to really help the process and eliminate some of the backlog.
    Mr. Karsner. I think that is worth examining.
    Mr. Matheson. Next question I wanted to ask has to do 
with--a very general question for Mr. Karsner. We have again 
heard about the problems with delays. Do you have the staff and 
budgetary resources now to make up the backlogs and also take 
on the new requirements of EPAct 2005? What is your sense right 
now of your resource capability and is there something Congress 
needs to do to adjust that?
    Mr. Karsner. Well, in fact, we have substantially increased 
our budget in these areas, about 66 percent over the last 2 
years, so it is an enormous bump in budgets, so now we are 
going to allocate as we increase and mobilize resources and 
staff, so it begins with additional contractors, probably 
additional Federal employees, so there is a little bit of a lag 
time in terms of what the effect is from the increased budget 
but yes, the answer is we are allocating substantially more 
resources that will translate into human resources, as well.
    Mr. Matheson. I just submit that I think there is general 
consensus we want you to be able to do this in a timely way and 
if you think that there are different resource requirements, I 
think communicating that to us would be really helpful, as 
well.
    Mr. Karsner. If I could follow on your last question. NIST 
is, in fact, a primary developer of some of our test procedures 
and we fund that.
    Mr. Matheson. That is good to know. Last question. On the 
GAO report, it listed a conclusion that there are some program 
management practices that perhaps are lacking at DOE to ensure 
the program is kept up to date and it also lacks, as well, DOE 
lacks the data to analyze root causes of its own administrative 
problems. Do you agree with that GAO conclusion and if you do, 
what steps are being taken now to address that deficiency?
    Mr. Karsner. I agree with that conclusion for the period 
that was covered under the GAO report, which DOEs not take 
account of any of what we have done in the past year and so it 
is a little bit like your stockbroker. Past performance is not 
a reliable indicator of future results. And so we take that 
report very seriously. We have taken those recommendations and 
fundamentally put in a great deal more of time management tools 
and tracking procedures and high priority correspondence and 
management attention.
    And so all of these things combined, which we would be 
happy to provide in greater detail, but all of these things 
combined have meant we have had a very different record in the 
past year than we have in the past 30 years, namely that we 
have met all of our scheduled deadlines. So we think, 
empirically, the new reforms we put in place are working, are 
having effect. It is not to say they are perfect yet. I think 
they will take years to perfect, but we think we are on the 
right track.
    Mr. Matheson. I want to thank the whole panel. I thought 
the testimonies have been really excellent today and Mr. 
Chairman, I yield back.
    Mr. Boucher. Thank you very much, Mr. Matheson. The 
gentleman from Texas, Mr. Barton, the ranking member of the 
full committee, is recognized for 5 minutes.
    Mr. Barton. Thank you, Mr. Chairman. It is a measure of our 
affection for you that we are here on a day that we don't have 
votes until three o'clock.
    Mr. Boucher. I am very grateful.
    Mr. Barton. My first question is to you, Mr. Karsner. Is 
there any relative of mine in the Department that is giving you 
a problem meeting these deadlines?
    Mr. Karsner. Not as yet, sir, but I will be happy to report 
back in the event that that changes.
    Mr. Barton. If you have any problems, let me know.
    Mr. Karsner. Yes, sir.
    Mr. Barton. I was a White House fellow in the Department of 
Energy in 1981 and 1982. This was in the first year of the 
Reagan administration. In the Carter administration there were 
a number of energy efficiency statutes passed, some of which 
required setting standards for appliances. In the Reagan 
administration, in the early years, set a no-standards 
standard. They decided to let the market set the standard, so 
they officially set a standard of having no standard. That was 
ultimately overturned and result is what we see here.
    Before we get too excited, though, about some of these 
standards, and I am supportive of where it makes sense setting 
standards, certainly setting regional standards. I think it 
needs to be said, Mr. Chairman, that if you look down the list 
that is in our memo, hearing memo, where the right-hand column 
says consensus pending, out of approximately 20 appliances, I 
only see five yeses. I see a lot of no's. Now, I don't think 
you blame the Department of Energy if there is no consensus.
    So my first question is going to be to Mr. Gaddis. Why do 
we not have a consensus on clothes dryers, for example?
    Mr. Gaddis. Well, sir, let me redirect that. I don't handle 
clothes dryers. That is Mr. McGuire.
    Mr. Barton. OK. Mr. McGuire.
    Mr. McGuire. Thank you.
    Mr. Barton. Maybe that is why we don't have consensus.
    Mr. McGuire. Mr. Barton, thank you for your question. I 
think the question you ask is very important because it 
illuminates the conflict we have with the priority setting of 
DOE and some of the statutory deadlines. In other words, the 
process improvement rule, which used to be used brought all the 
stakeholders together to get consensus on priorities for 
standards rulemakings which the DOE would then review and 
adopt, high, medium and low. In low, what is an area where no 
resources would be expended? Everybody involved, advocates, 
industry, States, agree with this process and priority setting, 
yet if something was in the low world, it could kick in a 
statutory deadline problem.
    When we had an agreement in 2000 for new clothes washer 
standards that the advocates and States supported, energy 
efficiency standards for clothes washers, the modified energy 
factor was so stringent that clothes going into the dryer were 
much drier, that everyone agreed that there was no need to 
upgrade the dryer standard that was in effect, even though 
there was a statutory deadline requiring it. There was no 
appreciable energy savings. And so DOE did not act, because 
they had other priorities, so I think, in terms of the Congress 
dealing with the problems here, one of the issues is the 
priority setting and the statutory deadlines sometimes 
conflict.
    Mr. Barton. Well, I don't want to overdo it, but there is a 
reason that it has been difficult to set these standards on 
consensus and that is because we have got a very diverse 
economy and we have diverse climate in our country. An air 
conditioner standard DOEsn't need to be the same in Maine as it 
is in Texas and when you set a high standard, you are going to 
almost always, not always, but almost always set a higher cost 
which makes it much more difficult for low-income constituents 
to purchase that particular appliance. Now, some of these pool 
heaters--I don't give a damn what the standard is on pool 
heaters. If you got the money to buy a swimming pool, you ought 
to be able to have the money to spend whatever it takes to heat 
the pool.
    Certainly, our former Vice President, Al Gore, can spend 
the money at his pool down in Tennessee, no problem. But 
refrigerators, washing machines, there are a lot of these 
appliances that really impact everyday Americans and we do need 
to get those right, so Mr. Chairman, I will be very supportive 
of wading into this and where a statutory deadline or a 
regional standard makes some sense, I am more than willing to 
be supportive of your efforts to try to simplify the process, 
but I don't want to shortchange the consumers of America and I 
want to reiterate what Speaker Hastert said, doing something on 
a regional basis, although I know that it is more difficult on 
the manufacturer because you have got to manufacture to more 
than one standard, would seem to me, in some of the more high 
ticket items, to make some sense. And with that I would thank 
our panel and yield back.
    Mr. Boucher. Thank you very much, Mr. Barton, and we look 
forward to working with you and all the members of the 
subcommittee as we address these issues. The gentle lady from 
Wisconsin, Ms. Baldwin, is recognized for 5 minutes.
    Ms. Baldwin. Thank you, Mr. Chairman, and I thank the 
witnesses today. I am interested in the issue of standby power 
and I understand standby power to be defined as the electricity 
consumed by end use electrical equipment when it is switched 
off or not performing its main function. I can do a little 
survey of my own home in Madison, Wisconsin and see all sorts 
of examples of that; microwave that has the time on even if you 
are not actively using it; the oven, the coffeemaker; 
certainly, in the family room, the TV, the receiver, CD player, 
et cetera. And I understand that by some estimates, as much as 
10 percent of household power consumption comes through standby 
power.
    I am interested that it has been regulated only in one 
State and that the regulation imposed by the California Energy 
Commission is an example we can look to. And so I would start 
with Dr. Rosenfeld. If you could please discuss how the 
standard came about and do you have any data or figures yet for 
how much energy has been saved due to this particular 
regulation? And also, have you had any documentation of 
consumer complaints about a difference in functionality of any 
product by virtue of the standby regulations that California 
has imposed?
    Mr. Rosenfeld. Thank you. I have two different remarks. 
First of all, just quantitatively, what California has done is 
to reduce the power of external power supplies, that is the 
little vampires that plug into your wall and have two teeth and 
suck electricity all the time, from typically 2 or 3 watts to 
under half a watt at which stage they are still giving you all 
those services. Your coffeepot can work fine, your microwave 
clock can work fine. What we discovered is that these power 
supplies, which typically cost under a dollar at 3 watts cost 
maybe an additional 3 to 5 cents if you take them down to half 
a watt.
    We used to think that the payback time was measured in 
months. In fact, my senior advisor, John Wilson, spent some 
time in Taiwan and China, where most of these are made, and the 
manufacturer said they weren't going to raise the price at all, 
it was insignificant. So I think we have done a good job. I 
think it should be taken over by DOE. We only did it because 
DOE was asleep at the switch.
    Second, however, I think modern thinking says that we could 
improve the way we address standby. Right now the external 
power supply business is taken care of. Now there remains the 
standby power of individual items; TVs, set top boxes, Dust 
Busters, whatever. We are beginning to think that what we want 
is a horizontal approach in which all products shall have a 
standby power of less than half a watt, unless they are a 
covered product which has been worked out by DOE or by 
California. Or unless there are obvious exemptions. If a set 
top box just can't do it, let it apply for why they can't do 
it. But in general, keep standby power under half a watt and 
you will get the services. You asked about reduction in 
services. I don't know of any reduction in services.
    Ms. Baldwin. Thank you. For Mr. Karsner, I would like to 
inquire about the Department of Energy's involvement in this 
area. Have you performed any studies to determine how large of 
a problem standby power is and if you want to comment, I know 
that provisions in EPAct has served to involve you in battery 
chargers and external power supplies in terms of studying and 
making recommendations, but I am also interested in your 
involvement in studying the standby power consumed by other 
products.
    Mr. Karsner. Yes, ma'am. In fact, I think most of the basis 
of the work that Art is referring to in California comes out of 
DOE's national laboratories, in particular, Lawrence Berkeley 
National Laboratory and we do have what you would call, for 
lack of a better name, a center of excellence study of the 
issue and for the most part, today, we include standby power as 
an integrated part of the whole appliance and it is not broken 
apart, as opposed to where you might have a laptop computer 
with an external battery charger that you could rate separately 
and independently, so in fact, the technology DOEs exist.
    That was the basis for California moving forward on it and 
we have an obligation to study and make a determination whether 
it is worthy to make a separate standard nationally for standby 
power, as many of the advocates are claiming they would like. I 
think the manufacturers also need to weigh in and determine 
what will be the net cost impact of separating that out. It is 
important, also, to note that regulation is one of the tools 
that the Department has.
    We also are very active, when it comes to efficiency, in 
terms of regulation, market transformation, demand pool 
activities like Energy Star, and one of those demand pool 
activities would be our Federal energy management programs, so 
that when President Bush was made aware of this vampire 
electricity or the standby power problem 5 years ago, one of 
the biggest leaps, rather, that occurred in the sector was the 
President including it in an Executive order that made the 
Federal Government purchase only low power, standby power 
appliances and that, in fact, was the greatest movement for 
manufacturing of new low standby power.
    Ms. Baldwin. I see that I have run out of time, so I will 
yield back.
    Mr. Boucher. Well, thank you very much for those very 
thoughtful questions. The gentleman from Oregon, Mr. Walden, is 
recognized for 8 minutes.
    Mr. Walden. Thank you, Mr. Chairman. Mr. Karsner, let me 
follow up on that last comment you made about President Bush 
ordering Federal agencies to use the low power transformers. 
Then where DOEs the Department of Energy go from there? Did you 
all move to try and set standards nationally, then, for those 
vampire power supplies?
    Mr. Karsner. As mentioned, there are almost, there are two 
separate categories, really. There are those that are external 
to the appliance and those that are built in and integrated.
    Mr. Walden. Right.
    Mr. Karsner. We are not presently moving on those that are 
external and integrated because we rate it in the overall 
efficiency of the appliance, the net efficiency of the 
appliance, so whatever that standby power consumption is, 3 
watts, 10 watts, 1 watt, it comes out in the whole of the 
appliance.
    Mr. Walden. Then why did it matter for an Executive order 
to do it Government-wide, then? Wouldn't the same appliance be 
regulated the same way?
    Mr. Karsner. I believe that the Government order was just 
for the external power, but I can revert on that for the 
record.
    Mr. Walden. OK, but I guess what I am trying to get at is 
there a Federal regulation regulating the vampire supplies?
    Mr. Karsner. There is not.
    Mr. Walden. Do you have legislative authority to promulgate 
one?
    Mr. Karsner. I believe that we do and that we have a 
scheduled determination and analysis in August of next year.
    Mr. Walden. Why DOEs it take that long?
    Mr. Karsner. Well, I mean, they all take approximately the 
same time. It is just that we have so many of them that we have 
a specific schedule that we intend to stay on.
    Mr. Walden. I guess the point I am trying to make is if the 
President thought it was important enough, and I concur with 
him, to issue an Executive order saying Federal Government-
wide, this is something we can do right now and that there is a 
standard or at least these are in the market, wouldn't that be 
a pretty easy one to move forward on?
    Mr. Karsner. Well, I mean, it goes to the whole question of 
the latitude of an Executive order. The President has ordered 
that 75 percent of all our fleet operate on flex fuel and we 
meet and comply with that in the Federal Government. I am not 
sure that that is tantamount to making a national regulation 
for the same thing, but it is up to Congress to consider that. 
With the authorities that we have, FEMP, Federal Energy 
Management Program, advising the Executive orders for 
implementation and moving the market is one tool we have, it 
has been quite effective. National regulations and that process 
that takes 36 to 56 months is something very separate.
    Mr. Walden. I guess that is the next question I would like 
to get to and perhaps Dr. Rosenfeld can address this. How was 
California able to move so rapidly to make these decisions and 
the Federal Government--and I am not picking on the people, I 
deal with these issues on a lot of different realms. How fast 
DOEs it take you to make a decision like that in California?
    Mr. Rosenfeld. Since 2005, as I mentioned in my testimony, 
we have adopted and passed 44 standards during the time when 
completed standards, the DOE has done none.
    Mr. Walden. So Mr. Karsner, why DOEs it take DOE so long? 
What is different?
    Mr. Karsner. DOE operates under statutes promulgated by 
Congress.
    Mr. Walden. I am sorry.
    Mr. Karsner. And the State of California----
    Mr. Walden. How can we fix that?
    Mr. Karsner. Well, as I suggested to the chairman, we would 
be happy to, as we have on the Senate side, offer technical 
drafting assistance as you move forward with your legislative 
proposals in the coming weeks. There is an enormous amount of 
things that could be done creatively. Some of them have been 
talked about today. But in general, anything that compresses 
our timetable, shaves time, offers more flexibility to the 
Department, greater latitude of interpretation, all of those 
things will be consideration of the different----
    Mr. Walden. Have you thought of just subcontracting to 
California?
    Mr. Karsner. Typically, when people have trouble in 
California, they sue the Federal Government and so California 
has all the up side, very little to the down side and it is a 
very special place.
    Mr. Walden. Remember I am just from north of there. We are 
very aware of that.
    Mr. Rosenfeld. Can I actually support Andy Karsner? DOE is 
simply humbled with an awful lot of very time consuming 
constraints.
    Mr. Walden. That is what I am trying to get to.
    Mr. Rosenfeld. One of the things I didn't say exclusively 
that is in my testimony, is there is a process in which you 
issue an advance NOPR, Notice of Proposed Rulemaking.
    Mr. Walden. Right.
    Mr. Rosenfeld. And there is a certain delay in the comment 
period and then you have an NOPR. I don't see, it is you folks, 
Congress, who passed all that, but I think you could streamline 
the process a lot.
    Mr. Walden. And still allow for public involvement.
    Mr. Rosenfeld. Oh, yes. I mean, I think, in California we 
work ourselves to death on public workshops and almost always 
these people who are here on the panel have been in the CEC 
building defending their point of view. I think we do that part 
of it very well, but there are just an awful lot of 
administrative things that Andy has to take care of. He sends 
things off to OMB and has to wait for I don't know how many 
months to get concurrence.
    Mr. Walden. He can't tell us. He can't talk badly about 
OMB.
    Mr. Johnson. If I could jump in here?
    Mr. Walden. Yes, Mr. Johnson.
    Mr. Johnson. We spend a lot of time in Sacramento, as well 
as Washington working with DOE, as well as the California 
Energy Commission. The Consumer Electronics Association would 
support an expedited treatment of external power supplies. 
There is a rulemaking that has been started as a result of the 
legislation of 2005 on external power supplies and battery 
chargers. However, the timeline, as it would progress, could go 
to 2013. That is too long. We need a solution now for external 
power supplies. Seven States have acted in this area. We are 
ready to achieve it with all relevant stakeholders and we would 
look forward to it, as we have said in our testimony.
    Mr. Walden. Would you support that same sort of expedited 
process across all these issues involving energy efficiency, 
give the Department the ability to move more rapidly while 
still allowing for public input?
    Mr. Johnson. I think a number of parties here have 
perspectives on that, but we certainly, for external power 
supplies, support, whether it is through legislation or 
changing the rules of DOE and expedited treatment of rulemaking 
for external power supplies.
    Mr. Walden. All right, so only for external power supplies.
    Mr. Johnson. There is a great opportunity there.
    Mr. Walden. Yes, right. All right, Mr. McGuire.
    Mr. McGuire. If I could just add, we would support an 
expedited process and one of the ways to do that, I think, is 
to revisit this process improvement rule where the stakeholders 
were involved in prioritization and when those priorities bump 
up against the statutory deadlines, even though the people with 
knowledge know what the priorities are to be, then maybe that 
is an area for the committee to look at, whether the statutory 
deadlines are impeding progress.
    I think another thing that is important to keep in mind at 
the Federal level versus the State level, is the quality of 
analysis that NIST, in developing the test procedures in the 
Federal labs and in doing analysis can do with the resources 
they are given and I think the States, even California, DOEsn't 
have the ability to conduct as thorough an analysis and 
sometimes has to resort to stakeholders doing the analysis, 
which I don't think is right.
    Mr. Walden. So is NIST the holdup?
    Mr. McGuire. No, I don't think NIST is the holdup and I 
don't think the Federal labs are the holdup. I think the holdup 
involves more DOE process in some of the funding, in some of 
the statutory deadlines which really probably don't make sense 
compared to some of the prioritization, like for example, 
clothes dryers. They missed statutory deadlines. Nobody in the 
advocacy community or industry felt the standards needed to be 
upgraded because the clothes washers are spinning out the 
clothes dry.
    Mr. Walden. DOEs anybody ever come back to us and say you 
don't need that statutory deadline on this?
    Mr. McGuire. I would like to say so today, at least.
    Mr. Walden. Well, yes. When was that deadline, 2005 did you 
say? What was the statutory deadline for clothes dryers?
    Mr. McGuire. Clothes dryers, I don't know offhand. It was 
previous to 2005. But in 2000, I think the deadline was in the 
late 1990's and 2000.
    Mr. Walden. What I am hearing in the GAO report is these 
deadlines we put in law are ignored anyway, right? Isn't that 
what the GAO report found? Mr. Karsner, am I missing something?
    Mr. Karsner. I don't know that it found that they were 
ignored. I think it found that they were underperformed.
    Mr. Walden. All right. So then we are at fault. All right.
     So I am doing 75 in a 55, I was just over-performing, 
right? All right, my time is up. Thank you.
    Mr. Karsner. I think what Mr. McGuire is referring to is 
the 1996 process rule, when he talks about prioritizing these 
things according to what their energy demand or consumption was 
and that was an annualized process that I would characterize by 
all measures as having failed in the sense that it may have 
been the right idea at the time. It was certainly supported by 
most of the people at this table. But in the end, the net 
result was we met no deadlines and we enacted almost nothing in 
terms of the regulations. So now, actually what we are going to 
is time management and determining a schedule for when we will 
knock these things down methodically on a critical path. And it 
may be that some of them are out of order or out of favor with 
different parts of the industry or stakeholder at given times, 
but we, as a nation, have an obligation to take care of all of 
them, because they are in law and we are going to pursue that 
systematically.
    Mr. Walden. And I appreciate that and maybe we all need to 
spend more time together more often, as pleasurable as that is 
for all us, I am sure, but I really think that needs to happen 
in this country if we are going to achieve these goals, which 
as a consumer, I want to achieve. When we are looking at the 
carbon emissions and all the environmental things, we don't 
need to be building more power plants if we don't need them and 
the extent to which we conserve, we won't need as much power 
out there and if we have got problems in the statute, for 
heaven's sakes, work with us and I am sure the chairman and 
others on this committee would be willing to work with you all 
to fix the problems.
    Mr. Boucher. Thank you very much, Mr. Walden. And Mr. 
Karsner, let me underscore again our collective frustration is 
not with you, it is with those at DOE who preceded you. Mr. 
Shimkus from Illinois is recognized for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman. I want to start with 
first of all, thank you for coming. I do think this has been a 
good hearing. I am sorry. I was able to fly out this morning, 
so I missed some of the opening statements. But Mr. Rosenfeld, 
you mentioned 44 standards since 2005. When was the California 
energy crisis? In what year?
    Mr. Rosenfeld. Sorry. It was really bad at the end of--
early 2001.
    Mr. Shimkus. Right. So the only reason why I say that is 
because that probably provided the constituency of California 
to understand, because there was--I mean, I sat on this 
committee. We had a lot of debates and hearings on that and 
there was movement from the State government to say you have to 
get energy efficient, folks. So I would say that there was also 
a crisis in California based upon a lot of things.
    I would say that that was probably an impetus to the State 
of California to really move aggressively in these energy 
debates on efficiency, don't you agree?
    Mr. Rosenfeld. I 50 percent agree, sir.
    Mr. Shimkus. I would like you to get to 65, that is 
passing.
    Mr. Rosenfeld. I 65 percent agree, sir.
    Mr. Shimkus. OK, good.
    Mr. Rosenfeld. Actually, interest in California in energy 
efficiency is way up and in fact, you are right. In non-
standards activities, we have increased our budget for energy 
efficiency programs to beat the standards from $250 million a 
year, which is 1 percent of electric revenues, to $750 million 
a year, which is nearly 3 percent of electric revenues. With 
respect to the standards, however, we adopted our first 
appliance standard in 1975, effective in 1977. That was for 
refrigerators. We have updated appliance standards every 3 
years since 1975, so we have been pretty consistent.
    Mr. Shimkus. Yes, I would agree, but I would say 44 
standards since 2005 DOEs show a ramp-up.
    Mr. Rosenfeld. You are 65 percent right.
    Mr. Shimkus. Thank you. I will take it. I am in the 
minority now; passing is OK. The other question I wanted to ask 
was, in following up, and this is from the committee, the 
Republican prep, it talks about these--we deal with some 
voluntary aspects where, even through the committee where we do 
the prescription drug user fee, industry puts more money in to 
try and encourage the Federal Government to respond quicker and 
it has been very successful.
    My question is, there is two-fold. One is if we formulated 
a process by which working across the interest groups here, 
where we try to expedite that process, is that something that 
could translate into this debate? Because efficiency standards 
will be part--I have heard the chairman's opening statements 
and I think efficiency standards will be part of an energy 
security bill or whatever we are going to call--so the question 
is how do we get it done right and for the consumer folks here, 
it was my understanding that there was a concern in the EPAct 
Bill 2005 that moving in this process might violate the due 
process rights of persons who are not part of the consensus 
process. So this is really a two-fold question and I will just 
open it up for anyone who wants to answer.
    One, is there a way that we can empower making good 
rulemaking on an expedited process based upon maybe a fee 
setup, kind of like PDUFA? Second, is there a credible due 
process rights for persons who are not part of the consensus 
approach? And if those of you who understand that question, if 
you want to answer it, just raise and go for it.
    Mr. deLaski. I will answer the second part of your 
question.
    Mr. Shimkus. OK. Why not the first?
    Mr. deLaski. I don't have an answer for you.
    Mr. Shimkus. OK.
    Mr. deLaski. I will do the one that I can.
    Mr. Shimkus. OK.
    Mr. deLaski. On the expedited process, we do think that it 
DOEs make sense for DOE to have the authority for an expedited 
process where a consensus exists. It is not going to catch up, 
with 10 years overdue. It is not going to solve that problem, 
but if we can cut 3 months or 6 months off the process, so be 
it. That is a good thing. It is not revolutionary, but it is a 
small improvement. That said, we did see the language the 
Department proposed--in 2005. It did have problems in terms of 
not creating an adequate opportunity for stakeholders to raise 
objections, who weren't part of the in group. We think some 
alternative language could achieve the same objective without 
that kind of constraint.
    Mr. Shimkus. And I would encourage you to work with the 
committee staff. That is probably something that we could 
probably help fix in this process, I would think, Mr. Chairman. 
Anyone else like to add to that? Mr. Karsner.
    Mr. Karsner. Yes, sir, Congressman. I would say that we 
began meeting with--well, we always meet with stakeholders and 
the folks at this table, but with regard to this specific 
issue, we began a dialog on this last week. There is really two 
key components and it is how you define what a consensus is, 
that is building a consensus on the word consensus and then 
having the opportunity for significant objection, whether that 
significance is qualified quantitatively, et cetera, and so we 
are working with them to try and integrate those concerns 
because our goal would be to go well beyond 3 months' savings 
or 6 months' savings, but to push the envelope to compress the 
timetable as much as possible and go to a final rule once a 
consensus is made. As the GAO report suggests, energy savings 
delayed or energy savings denied and so the more time we can 
make when we agree that we are in consensus, that would be our 
objective and we hope we can work with the committee on that.
    Mr. Shimkus. And my time has expired. I will just end with 
saying I hope that when we address efficiency standards that it 
DOEsn't negatively affect smart metering, smart appliances and 
the like, Mr. Chairman, and that is just my little commentary. 
Thank you.
    Mr. Boucher. Thank you very much, Mr. Shimkus, and I 
wholeheartedly endorse your reservation with regard to that. 
The gentleman from Texas, Mr. Burgess, is recognized for 5 
minutes.
    Mr. Burgess. Thank you, Mr. Chairman. Actually, Mr. 
Karsner, let us just pick up on that last point that Mr. 
Shimkus just made with the smart grid technologies. We are 
actually going to have a hearing about that later this week, I 
believe, but those technologies sometimes require advanced 
appliances that can interact and communicate with the grid. Is 
there a danger, as we push forward with setting appliance 
standards, do we have a concern that we are going to somehow 
interfere with that process, with the setting of efficiency 
standard?
    Mr. Karsner. I suppose there is always a danger of 
unintended consequences when you push the envelope on new 
technology development, but in general, it is integral to the 
Department's mission that we want to proliferate those sorts of 
technologies and so between voluntary standards, tax incentives 
and then regulatory standards, we need to find that 
equilibrium, but it is a new horizon. You would almost be 
better off asking Mr. Gaddis, McGuire and others.
    Mr. Burgess. Dr. Rosenfeld.
    Mr. Rosenfeld. We are very much into this in California. We 
are installing 12 million smart meters and with new buildings 
we will require that thermostats have the capability of 
communicating, being communicated with directly from the 
utility source to know when there is a high price or a 
congestion of power. We haven't seen any conflicts with energy 
efficiency problems that we are aware of.
    Mr. Burgess. Keep the microphone there. In my house I am 
not allowed to touch the thermostat and I doubt very seriously 
that my wife will let the power company touch it either, but I 
wasn't here when you did your testimony. I wonder if we could 
go to the slide that you showed on the annual peak in 
California in 2003, the annual peak savings from efficiency 
programs and standards, the graph that you showed. Just so I am 
clear on this, can you explain to me what the utility 
efficiency programs, the yellow block in that graph, what is 
represented there?
    Mr. Rosenfeld. With great pleasure. We have a pretty well-
rounded system in California with what are called public goods 
charges, during these 30 years of which, on the average, 1 
percent of your utility bill has been directed back to be spent 
by the utilities to do anything they can do to beat standards. 
That includes rebates for white goods. Almost any time the 
Energy Star logo appears on any appliance, your local utility 
will give you a rebate to buy the payback time down to a couple 
of years. This money goes to design assistance for new homes or 
retrofits. One of the most dramatic things it DOEs, now that we 
are getting a lot of interest in compact fluorescent lamps.
    I will give you an example. I got a compact fluorescent 
lamp from a store this weekend for 25 cents. Now, how did that 
happen? Well, your electricity bill goes into what is called an 
upstream buy down whereby the California utilities have told 
manufacturers anywhere in the world--most of these compact 
fluorescents are made in Taiwan or in China and they cost about 
$3 wholesale. The manufacturer gets two bucks off of that and 
reduces the wholesale price to $1 and then by the time it works 
its way back to the retailers, to the retail chain in 
California, it is like $2 or $3. So a retail compact 
fluorescent in California is cheaper than a wholesale compact 
fluorescent in Taiwan. That is sort of the way we use our 
ingenuity to get efficient products into the market.
    Mr. Burgess. And would this apply to things like skylights? 
I noticed Wal-Mart, in Texas, when they build new stores now 
they are making much greater use of skylights in their 
buildings that they are putting up.
    Mr. Rosenfeld. That is right. The California utilities 
offer rebates on more efficient windows than necessary on 
skylights, on what is called daylight harvesting, which is 
controls turning the lights out near the outside of the 
buildings. They help us with our standards. They have a program 
called CASE, Codes and Standards Enhancement, in which they do 
the analysis of the standards. They do anything they can to 
reduce electric use.
    Mr. Burgess. I don't want to interrupt, but just, from your 
graph here, that sort of looks like you got the most bang for 
the buck or more bang for the buck out of that than appliance 
standards. Do you expect that by pushing the appliance 
standards envelope a little bit that you are going to make the 
purple part of that graph jump up in the years to come?
    Mr. Rosenfeld. What happens is that the yellow part of the 
graph, which is expensive, but still costs us only 2\1/2\ cents 
to avoid a kilowatt hour with that. It is a very good deal. But 
it is expensive. What it DOEs is to increase the 
commercialization of better products and then once they are 
robust, I will give you one more example in a second. Once they 
are robust, then we can put them into standards. But remember, 
we can't put something into new building standards, for 
example, unless it is trusted enough in the marketplace and 
unless there are 200,000 units a year available. Let me give 
you a tiny example.
    Mr. Burgess. Well, let me just ask you a question. What 
about tankless hot water heaters? They are gas, they are not 
electricity, they are gas fired, but having recently built a 
house, I have been impressed that that has delivered a lot of 
bang for the buck as far as energy savings.
    Mr. Rosenfeld. I believe, but I am not sure that there are 
rebates for them in California, but I am not positive.
    Mr. Burgess. Would you give me a rebate in Texas for the 
one I bought if I send it?
    Mr. Rosenfeld. That might be a problem.
    Mr. Burgess. Let me just ask you one last question and it 
DOEsn't have to do with appliances so much, but we were in 
Denmark this summer with the chairman on a trip and the 
district heating that they have developed there, and I don't 
know whether that is applicable to any area of the United 
States, but I guess they take industrial and primarily from 
electrical generation, the heat thrown off from that process. 
They have these elaborate colored vents or tubes or water 
conduits that go all over the city and an article in the 
Washington Post a few weeks ago suggested that that has 
resulted in a big savings for them; a lot of headache when it 
was first being developed and I think their political leaders 
took a lot of grief for that, but ultimately, it has delivered 
a low-cost heating alternative and of course, for those who are 
concerned about greenhouse gases, it is another way of reducing 
those emissions. Is that the type of strategy that you might 
employ with the yellow part of the graph?
    Mr. Rosenfeld. No, sir. This is entirely consumer oriented 
programs. District heating, as you mentioned, it is a great 
idea for dense cities and every major European city from Berlin 
through Copenhagen through Paris through London has district 
heating. But that is a planning issue which could be handled on 
public goods money, but it is not part of this consumer 
oriented yellow band.
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr. Burgess. Mr. 
Matheson, do you have additional questions you would like to--I 
think we probably have exhausted our range of questions for 
what is now the afternoon. And I want to say thank you very 
much to our panel of witnesses for joining us here today. Mr. 
Inslee, you have just barely made it under the wire here and 
Mr. Inslee, we will recognize you for a period of 5 minutes to 
ask your questions.
    Mr. Inslee. I appreciate it, Mr. Chairman, but I am going 
to break my rule and since I have nothing intelligent to add, I 
will just be quiet here. I will waive, thank you.
    Mr. Boucher. All right, Mr. Inslee waives his questions. 
Well, let me say thank you very much to our panel of witnesses 
for joining us today. You have been very informative on what is 
a truly timely topic for us. We will be considering your 
recommendations in the near term and producing legislation for 
consideration on the House floor in July, which will contain a 
number of statutory changes, many of which will be in 
conformance with what you have discussed with us here today. So 
again, with thanks to our witnesses, this hearing stands 
adjourned.
    [Whereupon, at 12:18 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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                          Arthur H. Rosenfeld

       Responses to Questions from the Honorable John D. Dingell

     1. You generally favor allowing more flexibility to States 
to set their own standards. The industry witnesses uniformly 
favor tight preemption of the States for all covered appliances 
and equipment in the law, even where the Department of Energy 
(DOE) determines not to set a standard. Both groups seem to 
acknowledge that the threat of State Standards is a major 
reason that industry is willing to negotiate consensus 
standards.
      a. Is the potential for establishment of separate State 
standards primarily a means of leverage to bring industry to 
the table, or would you actually prefer that States be free to 
act, even if many do not act at all?

    Response: The opportunity for State standards is not 
primarily to leverage industry, although that is a useful by-
product. The National Appliance Energy Conservation Act (NAECA) 
as originally passed by Congress included criteria for States 
to receive waivers from Federal preemption because it was 
expected there would be situations in which States had 
compelling reasons to have standards different than Federal 
standards due to local State conditions, such as high energy 
prices, energy shortages or environmental concerns. As it has 
played out, inaction by DOE, and DOE standards that are based 
on ``consensus'' rather than efficiency levels that are 
justified by engineering and economic analyses, have created 
additional opportunities for States to be motivated to set 
their own standards. If State actions motivate DOE and industry 
to more closely follow the original intent of NAECA, then that 
is a desirable outcome.

      b. Do you believe that reaching a national consensus 
standard is preferable to having a situation where a few States 
have their own standards and many have none at all?

    Response: A national standard is preferable only if it has 
a sound analytic basis and achieves the maximum improvement in 
energy efficiency that is technologically feasible and 
economically justified. Anything less shackles the States to a 
lowest-common-denominator standard that DOEs little to promote 
true energy efficiency. See section I.A.4., pages 8 through 9, 
of my May 1, 2007, written testimony (my written testimony).

      c. Do you think the manufacturing groups are being 
disingenuous or exaggerating when they claim that individual 
State standards would be wholly unworkable for them?

    Response: Individual State standards have been, and will 
continue to be, feasible and workable. California and other 
States have been setting efficiency standards for a variety of 
appliances for decades, and manufacturers have been able to 
conduct business in these States with little or no disruption. 
In numerous appliance standard rulemakings in California, the 
California Energy Commission (CEC) has asked manufacturers for 
data that would support their claim that a State standard is 
unworkable, and they have failed to do so. You should ask 
manufacturers for the same data.

     d. Have you performed or seen any credible analysis of the 
incremental cost to manufacturers of meeting separate State 
standards and managing their deliveries and sales in accordance 
with them?

    Response: The CEC has consistently requested that 
manufacturers submit data regarding the cost of complying with 
California efficiency standards, but such data has not been 
submitted. Without manufacturer cooperation and the submission 
of requested data, a detailed analysis of such costs is not 
possible.

     2. Is it realistic to allow State standards to suddenly 
become effective for any appliance where DOE has missed any 
deadline in its process of adopting Federal standards?

    Response: This question incorrectly assumes that State 
standards will ``suddenly become effective.'' In reality, DOE, 
the States and manufacturers will know well in advance when DOE 
must meet a deadline and whether DOE will be able to do so. 
Also, all parties will know well in advance what a State 
standard is and when it will become effective. Thus all parties 
will be afforded ample time to prepare for compliance with a 
State standard should DOE fail to comply with a deadline. See 
section I.A.2., page 6, of my written testimony.

     3. Would this not potentially result not only in a large 
number of standards for a given appliance, but also standards 
coming and going in-and-out of effect over short periods of 
time as a function of whether State standards had been adopted 
and Federal standard setting was meeting all deadlines?

    Response: In practice, a small number of States would set 
generally consistent standards for a given product. Again, as 
stated in the answer to question 2, there is a lag-time between 
the adoption and the effective date of a product standard. Thus 
if DOE did miss a deadline for a product, and then subsequently 
did adopt a standard for that product, that standard would not 
be effective, and thus would not preempt the existing State 
standard, for several years.

      You also seek to have the DOE program improved in speed 
and rigor so that it can set standards that may be better than 
those that emerge from the consensus process. Would such 
effective DOE standards also be preferable to you than allowing 
the States freedom to set separate standards?

    Response: If DOE improves its rulemaking in the ways I 
suggest, see section I.A., pages 5 through 9, of my written 
testimony, with the preeminent goal of achieving the maximum 
improvement in energy efficiency that is technologically 
feasible and economically justified, then a Federal standard is 
preferred over individual State standards.

     5. You were a key advisor on appliance efficiency standard 
setting during the Clinton administration. Did you make the 
same recommendations for expediting approval processes at that 
time?

     Response: See response to 5.b.

    a. If you did so, what reasons were you given that they 
were not adopted then?

    Response: See response to 5.b.

    b. If not, why not?

    Response: When I was at DOE I worked mainly on updating air 
conditioning standards, which were initiated by California in 
1977 and taken over by DOE through NAECA, so I considered them 
Federal problems. Unfortunately I was unaware that other States 
were impatient. I just tried to hurry them along.

     Are these delaying factors recent?

    Response: They have been slow since the passage of NAECA, 
but have grown worse recently. See section I.A.1., pages 5 
through 6, of my written testimony.

    d. Has this administration added any steps to the 
rulemaking process, such as the Advanced Notice of Proposed 
Rulemaking step or Office of Management and Budget review, that 
have made it slower?

    Response: I am unaware of new steps, but repeat that DOE 
has recently interpreted the waiver rules in an unacceptably 
strict manner.

    6. Manufacturers have what appear to me to be sound reasons 
why numerous individual State standards for the same appliance 
would raise their costs and complicate their product 
distribution and maintenance practices. Producing and appliance 
to a single national efficiency standard market is obviously 
easier and cheaper than doing so to multiple State standards. 
Yet your testimony suggests we should allow individual States 
to set standards whenever and for whatever product that DOE has 
failed to do so, had declined to do so, or has been late in 
doing so. Do you believe it is a valid concern by manufactures 
that they might face a proliferation of State standards 
covering a single appliance?

    Response: As stated in the response to question 3, it would 
be a mistake to assume that States will adopt standards for any 
given product that differ significantly from other States in 
their respective climate region. This is the only logical 
conclusion, as there is no reason for a State to adopt 
efficiency standards that do not correspond with the regional 
climate of that State. For example, the standard for air 
conditioners would be generally consistent in California, 
Arizona, New Mexico, Nevada, Utah and most of Texas, as the 
climate is hot and dry. Similarly, the standard for air 
conditioners would be consistent in hot and wet/moist/soggy 
States such as Florida, Georgia, North and South Carolina, 
Alabama, Mississippi, Louisiana, Arkansas and Tennessee. What 
would most likely emerge are de facto regional standards 
similar to the federally-articulated regional standards that I 
endorse in my testimony. See section I.A.3.a., page 7, and 
appendix C of my written testimony. Thus it is unreasonable to 
assume that manufacturers will be faced with standards that 
vary from State to State to State, but rather we will, and 
should, see standards that vary from one climate region to 
another.

     a. If so, how can California then set its own standards 
without raising this concern?

    Response: A State standard that is based on achieving the 
maximum improvement of energy efficiency that is 
technologically feasible and economically justified will be 
consistent with other States in that region, for the reasons 
discussed above. The appliance rule-making process in 
California allows for significant input from manufacturers. It 
is in this forum that they may present their facts and 
arguments that a certain State standard is not economically 
justified.

    b. If not, have you analyzed the energy-savings benefits 
against the potential costs of requiring manufacturers to meet 
such standards, passed through in higher appliance costs?

    Response: As stated in the response to question 1d., the 
CEC has consistently requested, but has not received, data from 
manufacturers that would enable the CEC to conduct a 
comprehensive analysis that would take into account the 
potential costs to manufacturers of meeting certain California 
standards.

    7. At page 8 of your written testimony, you suggest that 
DOE can adopt more effective standards than would result from 
successful negotiations with between manufacturers and 
efficiency advocates. Are there currently effective standards 
that have resulted from a consensus process that you believe 
are significantly weaker than they should be and would have 
been using an appropriate and effective rulemaking process?

    Response: It is difficult to know what DOE should or would 
have done absent a consensus recommendation. At best, we can 
only make educated guesses.-- The results will be highly 
subjective since DOE's criteria, in the final analysis, require 
it to apply judgment. Without doing a complete review of the 
record of DOE's past decisions, it is safe to say that many of 
the consensus proposals that were adopted by DOE were at 
efficiency levels less than what DOE's technical analysis 
showed was justified. The reason for this is DOE's lack of 
willingness to follow the direction of NAECA to set standards 
at levels justified by technical analysis, and the resulting 
ability of industry to leverage efficiency advocates to accept 
lower levels of efficiency in order to get any national 
standard.

    8. Referring to page 10 of your testimony, is it your view 
that allowing a State to set a performance-based standard for a 
whole building that could most realistically be met by 
including appliances with higher efficiency standards than 
required by DOE, but that standard could also be met in other 
ways such as insulation, would that preclude that State from 
establishing such a building standard without a DOE waiver 
under the appliance efficiency law?

    Response: It is my view that California is precluded from 
such a building standard unless a waiver from DOE is obtained. 
This is why I recommend a change in Federal law that authorizes 
a State to base the energy budgets in a performance-based 
building code on appliances with more than the Federal minimum 
efficiencies if the resulting budget is technically feasible, 
cost effective and would not unduly burden interstate commerce.

    9. In your view, how should the appliance efficiency 
standards process be applied for electric lighting, given three 
technologies--the classic incandescent bulb, available compact 
fluorescent bulbs, and emerging solid-state lighting--have very 
different first costs, energy consumption, life cycles, and 
availability in the market?

    Response: Representative Jane Harman has introduced an 
amendment which phases out lowest cost general service 
incandescents, but permits infrared reflecting technology (or 
other strategies) which increase lumens per watt by about 50 
percent. This is a good first step. We should start phasing out 
today's inefficient incandescent bulbs, keeping in mind there 
are efficient halogen incandescent bulbs that are coming into 
the market, and move toward requiring levels that can be 
achieved today by compact fluorescents (CFLs) and will be 
achieved soon by solid-state light sources. This can be done by 
setting a two-step standard that bans the inefficient bulbs 
effective in five years, and requires CFL-level efficiency in 
ten years. These new bulbs will be extremely cost-effective to 
consumers, save energy, reduce greenhouse gas, and will be 
profitable to industry.

      Responses to the Questions of the Honorable Edward J. Markey

    1. Two years ago, this committee approved my amendment to 
sunset the Federal preemption of State energy efficiency 
standard whenever DOE was more than 3 years late in issuing a 
new or revised efficiency standard. My amendment was later 
dropped from the final version of the bill due to opposition 
from the industry and the Administration. In light of the 
problems the GAO and other have identified with DOE's 
persistent failures to issue appliance standards in a timely 
manner, should Congress now enact such an amendment so that the 
States aren't preempted from adopting efficiency standards when 
DOE fails to act in a timely fashion?

    Response: Yes. There must be a mechanism in place that 
helps staunch the loss of energy savings that results when DOE 
fails to meet an efficiency standard deadline. The best way to 
accomplish this is to halt Federal preemption of a State 
standard if DOE misses the deadline for a new or revised 
standard. See section I.A.2., page 6, of my written testimony.

     2. Should DOE be required to regularly review all existing 
appliance standards to determine whether technology 
improvements warrant adoption of stronger efficiency standards, 
and if so, to adopt rules mandating stronger standards?

    Response: Yes. DOE should always be vigilant when it comes 
to efficiency standards, including keeping abreast of new 
technologies and ensuring that appliances standards reflect the 
maximum improvement in energy efficiency that is 
technologically feasible and economically justified.

    3. Should this subcommittee approve legislation providing 
DOE with clear authority, or even a mandate, to adopt standards 
for appliances that vary by region or zone when the cost-
effectiveness of a higher standard also varies by region--so 
that DOE could adjust standards for central air conditioners, 
boilers, or furnaces to take into account regional climates?

    Response: Yes. I believe that DOE already has the authority 
to adopt regional standards for heating and cooling appliances, 
but has simply failed to do so. As such, it is necessary for 
Congress to make clear to DOE that it DOEs have this authority, 
and that it should adopt such regional standards where 
appropriate. See section I.A.3.a., page 7, of my written 
testimony.

    4. Should Congress eliminate the current requirement for an 
Advanced Notice of Proposed Rulemaking, which lengthens the 
rulemaking process, and instead allow DOE to go directly into a 
Notice of Proposed Rulemaking and solicit public comment 
whenever it wants to consider a new appliance standard?

    Response: Yes. The Advanced Notice of Proposed Rulemaking 
(ANOPR) is an unnecessary, inefficient and time-consuming 
process. DOE should eliminate the ANOPR and proceed directly to 
the Notice of Proposed Rulemaking. See section I.A.1., page 5, 
of my written testimony.

    5. Should DOE be directed to repeal its so-called ``Process 
Rule''--which caused so much of the ``paralysis by analysis'' 
that has led DOE to be unable to meet its statutory deadlines 
for issuing rules on appliance efficiency?

    Response: Yes, the ``Process Rule'' should be eliminated or 
substantially changed. At present, the Process Rule is 
needlessly complex and hinders effective and efficient 
analysis. See section I.A.1., pages 5 through 6, of my written 
testimony.

    6. Should Congress make it crystal clear in the statute 
that DOE has the authority to adopt more than one appliance 
efficiency standard for an appliance?

    Response: Yes. As many appliances have more than one 
efficiency attribute, Congress should make it clear to DOE that 
it has the authority to:

     Establish both water and energy efficiency 
standards for the same appliance;
     Adopt different energy (or water) metrics for the 
same appliance (e.g., SEER and EER for air conditioners);
     Regulate all energy-or water-using components 
within a regulated appliance; and
     Require prescriptive components in any appliance. 
See section I.A.3.b., pages 7 through 8, of my written 
testimony.

    7. Should the legal standard for approval of State requests 
for a waiver of Federal preemption be changed to allow DOE to 
approve such waivers unless the burden on interstate commerce 
clearly exceeds the local benefits?

    Response: In considering preemption waivers, DOE should 
weigh the three criteria for preemption contained in Energy 
Policy and Conservation Act (EPCA)--the State's interests in 
the standard, the potential burden on the national appliance 
industry, and the potential for consumer utility--and grant a 
waiver if the State's interests predominate. See section I.B.1, 
page 9, of my written testimony.

     8. Should a State be permitted to adopt performance-based 
building codes on heating, cooling, and water heating 
appliances that exceed the Federal minimum standards, if the 
State found that the resulting energy saving were 
technologically feasible, cost-effective, and would not unduly 
burden interstate commerce?

    Response: Yes. By doing so, the maximum feasible amount of 
energy and water efficiency can be achieved while providing the 
builder with the greatest degree of choice and the best deal 
for the buyer. See section I.B.2., pages 9 through 11 of my 
written testimony.

    9. If DOE chooses to regulate only one aspect of an 
appliance's energy or water usage and fails to others, should 
the States be clearly permitted to regulate these other aspects 
of energy or water usage that are not covered by DOE's rules so 
that we don't fall into a regulatory black hole of having no 
Federal standard and no State standard?

    Response: Yes. For example, the statute should clarify that 
if DOE has established an SEER standard for air conditioners, 
but not an EER standard, then the States are not preempted from 
setting an EER standard. See section I.B.3., page 11, of my 
written testimony.

    10. Should Congress direct DOE to step up enforcement of 
the appliances standards law by requiring periodic independent 
testing to verify manufacturer's performance claims?

    Response: Yes. Congress should provide DOE with the funding 
to verify manufacturers' performance claims via independent 
testing, and conducting surveys for non-compliant appliances 
offered at retail outlets. DOE should also be required to 
regularly report the data and findings derived from these and 
other enforcement efforts to the appropriate congressional 
committees. See section I.C.1., page 11, of my written 
testimony.

    11. Should Congress adopt expedited procedures for 
consideration of rules that grow out of a stakeholder consensus 
process involving manufacturers, the States, and energy 
efficiency advocates?

    Response: Yes, as long as the consensus achieves the 
maximum improvement in energy efficiency that is 
technologically feasible and economically justified.

    12. In Dr. Rosenfeld's written testimony; he notes that 
central air conditioners can be rated in terms of both and 
energy efficiency ratio (or EER) that depends on the actual 
outdoor temperature, and a season energy efficiency ratio (or 
SEER) that is measures at a single season average temperature. 
I have been told that there are some central air conditioning 
units that have a very high SEER rating, but also a low EER 
ratio during particularly hot days. One such unit has a SEER 19 
rating, and has an EER of 17 at moderate temperature 
conditions, but then falls to an EER on hot days when a second 
stage engages. This would appear to actually increase power 
consumption by a substantial amount at times when the power 
grid may be most stressed and expensive (and often polluting) 
peaking units may have to be turned on to meet demand. In light 
of this, DOEs DOE need to be able to set appliance standards 
that prevent such a situation?

    Response: There are two different issues here. First, the 
laws of physics (Carnot efficiency) reduce the efficiency of an 
air conditioning unit as the outside air temperature rises. 
But, second, air conditioners should be designed to be most 
efficient under conditions which are most important; e.g. 95 
degrees Fahrenheit and soggy in Atlanta, and 110 degrees 
Fahrenheit and dry in Phoenix. That is why we must break the 
United States up into three climate zones for air conditioning, 
optimized for Atlanta, Phoenix, and Chicago climates. See 
section I.A.3.a., page 7, of my written testimony.

    13. Do you think DOE should be directed to issue efficiency 
standards for digital TV sets?

    Response: Yes.

                                 
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