[Senate Hearing 111-402]
[From the U.S. Government Publishing Office]
S. Hrg. 111-402
ENERGY EFFICIENCY OF APPLIANCES
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
ON
S. 1696 S. 3054
S. 2908 S. 3059
__________
MARCH 10, 2010
Printed for the use of the
Committee on Energy and Natural Resources
----------
U.S. GOVERNMENT PRINTING OFFICE
56-266 PDF WASHINGTON : 2010
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
COMMITTEE ON ENERGY AND NATURAL RESOURCES
JEFF BINGAMAN, New Mexico, Chairman
BYRON L. DORGAN, North Dakota LISA MURKOWSKI, Alaska
RON WYDEN, Oregon RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont JIM BUNNING, Kentucky
EVAN BAYH, Indiana JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire
Robert M. Simon, Staff Director
Sam E. Fowler, Chief Counsel
McKie Campbell, Republican Staff Director
Karen K. Billups, Republican Chief Counsel
C O N T E N T S
----------
STATEMENTS
Page
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................ 1
Hogan, Kathleen, Deputy Assistant Secretary, Energy Efficiency,
Office of Energy Efficiency and Renewable Energy, Department of
Energy......................................................... 2
McGuire, Joseph M., President, Association of Home Appliance
Manufacturers (AHAM)........................................... 9
Nadel, Steven, Executive Director, American Council for an
Energy-Efficient Economy (ACEEE)............................... 16
Pitsor, Kyle, Vice President, Government Relations, National
Electrical Manufacturers Association (NEMA).................... 35
Yurek, Stephen, President and CEO, Air-Conditioning, Heating, and
Refrigeration Institute (AHRI)................................. 30
APPENDIXES
Appendix I
Responses to additional questions................................ 51
Appendix II
Additional material submitted for the record..................... 61
ENERGY EFFICIENCY OF APPLIANCES
----------
WEDNESDAY, MARCH 10, 2010
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The committee met, pursuant to notice, at 9:34 a.m. in room
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman,
chairman, presiding.
OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW
MEXICO
The Chairman. OK, why don't we get started here? Thank you
all very much for coming. Senator Murkowski will be here
shortly and said that it was acceptable for us to proceed. I
know, I believe Senator Menendez is going to try to arrive, and
perhaps some of our other members.
Today's hearing is on 4 bills designed to strengthen the
Department of Energy's appliance efficiency program--S. 1696,
the Green Gaming Act of 2009; S. 2908, the Water Heater Rating
Improvement Act of 2009; S. 3054, a bill to establish
efficiency standards for water dispensers, food holding
cabinets, and electric spas; and S. 3059, the National Energy
Efficiency Enhancement Act of 2010.
Energy efficiency continues to be the most cost-effective
strategy for strengthening our Nation's economic and energy
security and for reducing the environmental impacts of energy
production. I should have mentioned this to Al before, but I
was at a conference at MIT this weekend that they had there in
Boston on energy, and they had the head of energy information,
the international energy agency out of Paris, and he made an
interesting point.
He said that their projections are that to reduce
greenhouse gas emissions to where they need to be, 53 percent
of that has to come from energy efficiency improvements. So,
clearly, energy efficiency is the lion's share of the solution
to that problem, at least from their perspective.
By 2020, the program that the Department of Energy has in
place related to appliance standards will have reduced national
electric demand 12 percent below what it otherwise would be,
all the time saving American businesses and families billions
of dollars. The bills being considered this morning would
enhance the standards program by establishing or updating
efficiency standards for major energy-consuming products, such
as air conditioners, furnaces, outdoor lighting, as well as
several smaller product classes. S. 3059 would also make
several improvements to program operations.
By 2030, it is estimated the enhancements proposed in these
bills would displace electricity equivalent to the output of 14
coal-fired power plants, reduce carbon dioxide emissions by 39
million metric tons, equivalent to taking 7 million cars off
the road for a year, and saving consumers an estimated $7
billion in reduced energy costs, creating tens of thousands of
jobs as these savings are spent or invested in other ways.
So we thank the witnesses and others in the business and
energy efficiency communities for their commitment and their
tenacity in negotiating the agreements that are included in
these bills. Our Nation continues to face tremendous economic
and energy security challenges. At a time when solutions may be
frustrated by political factors, your working together for the
common good is inspiring.
I also want to thank Senator Murkowski and several of our
colleagues for the support they have provided and their staffs
have provided in this bipartisan effort.
I look forward to hearing from all the witnesses and
working to see these enhancements become part of the
legislation that the Senate considers and passes this year. So,
with that short introduction, let me introduce our witnesses.
We have Kathleen Hogan, who is the Deputy Assistant
Secretary for Energy Efficiency in the Department of Energy.
Thank you for being here.
Steve Nadel, who is the executive director of the American
Council for an Energy-Efficient Economy. Thank you for being
here.
Joseph McGuire, president of the Association of Home
Appliance Manufacturers. Thank you for your involvement in all
of this.
Stephen Yurek, who is president and chief executive officer
with the Air Conditioning, Heating, and Refrigeration Institute
in Arlington. Thank you for being here.
Kyle Pitsor, who is vice president for Government relations
with the National Electrical Manufacturers Association. Thank
you for being here.
Ms. Hogan, why don't you go right ahead? If each of you
could give us about 5 minutes, and we will just go across the
table here. Give us about 5 minutes of the main points we need
to understand, reflecting your perspective on these bills. Then
we may have some questions.
Ms. Hogan, go right ahead.
STATEMENT OF KATHLEEN HOGAN, DEPUTY ASSISTANT SECRETARY, ENERGY
EFFICIENCY, OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY,
DEPARTMENT OF ENERGY
Ms. Hogan. Good morning, Chairman Bingaman, Ranking Member
Murkowski, and others here. Thank you for the opportunity to
appear today and to discuss the appliance standards and energy
efficiency.
As you all know and as Secretary Chu reminds us, energy
efficiency is not just the low-hanging fruit, it is the fruit
already on the ground. It is the fastest, lowest-risk, most
economical way to address climate change and energy security
concerns as well as build jobs. Many of the necessary
technologies and know-how are available now.
Appliance standards as a policy are a highly cost-effective
approach for advancing energy efficiency, and really, some of
the greatest opportunities for energy savings are in the
appliances and products that consumers and businesses use every
day.
Now, I have submitted some specific comments for the record
on the 4 bills that are the subject of today's hearing, and I
certainly commend the Senators and the committee staffers who
have worked very hard on these bills in gaining industry and
advocate consensus on much of the legislation.
Now I would like to take this opportunity to discuss the
department's Appliance and Commercial Equipment Standards
Program. As you know, DOE has been implementing this program
since its Federal establishment in 1975, and, as amended, the
appliance standards requirements are really among the broadest
of any country in the world. I think it is also not news that
DOE has received criticism in the past for its implementation
of this program, for missing deadlines for updating standards
and establishing rules for specific products. But those issues
have been addressed.
In November 2006, the department entered into a consent
decree under which it agreed to publish the final rules for 22
product categories by specific deadlines, the latest of which
is June 30, 2011. This represented a 6 fold increase in
appliance standard activities at the Department of Energy.
Since this consent decree, the department has made
significant progress meeting these requirements. We have met
the deadlines for 13 rulemakings that were required to date,
and we expect to complete the remaining 8 rulemakings on time
by June 2011.
This administration is also bringing a renewed commitment
to a strong appliance standards program. The President issued a
memo to Secretary Chu in February of 2009 requesting that DOE
take all necessary steps to finalize the legally required
energy conservation standard rulemakings as expeditiously as
possible and to meet all applicable deadlines.
Between February and August last year, DOE completed all 5
rulemakings highlighted in the President's memo. These
rulemakings were completed ahead of schedule, and over the next
30 years, they will save Americans an estimated $250 billion to
$300 billion and avoid the need for 15 power plants. In the
last 3 months, DOE completed standards for commercial clothes
washers, and small electric motors on schedule. We are now on
schedule to complete rulemakings on residential water heaters,
direct heating equipment, and gas pool heaters by the end of
this month.
As we look ahead to the next 3 years, the department will
revise standards for another 14 product categories, including
residential air conditioners, refrigerators, clothes washers,
and medium electric motors, and this will complete requirements
of the consent decree, as well as address additional
requirements under EPAct and EISA 2007. These standards will
provide savings on the order of the seven packages that I just
mentioned.
So DOE has increased its pace to complete these
rulemakings, and we are also reviewing our operations to
improve efficiency and productivity. This includes efforts to
improve and streamline test procedures and enforcement of
appliance standards.
Enforcement of our standards is a very important
improvement area. Energy conservation standards must be
enforced to be effective, and DOE has taken a number of steps
in this area. In the last 6 months, we have created a new
enforcement team within the Office of General Counsel,
announced a program to randomly review compliance with DOE
certification requirements, and held manufacturers accountable
for failing to comply.
Our general counsel's office has initiated investigations
and enforcement actions involving hundreds of products. These
efforts have revealed several issues with existing statutory
language. For example, the current statutory penalty originally
adopted in the 1970s is limited to $200 per violation, and
statute limits the department's enforcement authority to
specific enumerated acts, which do not cover all possible
violations.
So, again, thank you for the opportunity to discuss this
very important Federal energy efficiency program, and I will be
happy to answer any questions that you may have.
[The prepared statement of Ms. Hogan follows:]
Prepared Statement of Kathleen Hogan, Deputy Assistant Secretary,
Energy Efficiency, Office of Energy Efficiency and Renewable Energy,
Department of Energy
Chairman Bingaman, Ranking Member Murkowski, Members of the
Committee, thank you for the opportunity to appear before you today to
discuss appliance standards and four recently introduced bills.
As this Committee well knows, energy efficiency generally is a
fast, low risk, economical way to address climate and energy security
concerns. Improvements in energy efficiency can be made today, with
significant benefits. Numerous studies have concluded that current
technology can greatly reduce energy consumption while providing
considerable economic benefit.
Mr. Chairman, I know energy efficiency is a priority for you and
your fellow Committee Members. The Department of Energy (DOE) is
pleased to work with you to advance the goal of making the Nation's
homes, offices, factories, and vehicles more efficient. The Department
advances energy efficiency through a number of efforts, including
promoting the adoption of energy efficiency policies and practices;
broadening consumer acceptance of energy efficiency as a high-priority,
cost-saving resource; and accelerating market adoption of energy
efficient technologies. The Appliances and Commercial Equipment
Standards Program is a major component of DOE's energy efficiency
efforts.
My comments focus on five main items, including:
Appliance standards background and history;
Recent DOE efforts to meet an appliance standards consent
decree;
DOE appliance standards processes and enforcement;
Comments on pending energy efficiency legislation; and
The ``Best in Class'' concept for appliance standards.
appliance standards
Background and History
The Department's Appliance and Commercial Equipment Standards
Program develops test procedures and energy conservation standards for
residential appliances and commercial equipment. When applied, these
standards can spur innovation, conserve energy, and reduce greenhouse
gas (GHG) emissions.
The Energy Policy and Conservation Act of 1975 (EPCA) designated
test procedures, conservation targets, and labeling requirements for
certain major household appliances, and established the DOE Appliance
and Commercial Equipment Standards Program. Amendments to EPCA changed
the conservation targets to mandatory standards and added categories,
and eventually included a broad range of residential and commercial
products. In 2005, DOE was sued for allegedly failing to meet the
deadlines and other requirements of EPCA. Deadlines for these specific
products had been repeatedly missed, in some cases for a dozen years or
more.
In January 2006, the Department released its plan to eliminate the
appliance standards backlog by issuing one new or amended standard for
each of the products in the backlog by June of 2011. This ambitious
schedule reflected a six-fold increase in standards activities compared
with the previous 18 years. In addition to clearing the backlog of
appliance standards, the Department is addressing further standards and
test procedure requirements included in the Energy Policy Act of 2005
(EPAct 2005) and the Energy Independence and Security Act of 2007
(EISA).
In November 2006, the Department entered into a consent decree,
under which it agreed to publish the final rules for 22 product
categories by specific deadlines, the latest of which is June 30, 2011.
Recent Efforts to Meet the Appliance Standards Consent Decree
The Department has made significant progress on meeting its consent
decree and additional EPAct 2005 and EISA requirements. It has met the
deadlines for the 13 rulemakings required to date leaving eight
rulemakings to be completed by June 30, 2011.
On February 5, 2009, President Obama issued a memorandum to
Secretary Chu requesting that DOE take all necessary steps to finalize
legally required energy conservation standards rulemakings as
expeditiously as possible and to meet all applicable judicial and
statutory deadlines.
Between February 5, 2009 and August 8, 2009, DOE completed the five
appliance standards rulemakings highlighted in the President's memo on
time. The five standards rulemakings included the codification of
standards prescribed by EISA, standards for fluorescent and
incandescent lamps, beverage vending machines, ranges and ovens, and
certain commercial equipment contained in the American Society of
Heating, Refrigerating and Air-Conditioning Engineers Standard (ASHRAE)
90.1. These five standards rulemakings were completed ahead of schedule
and will save over two billion metric tons of carbon dioxide over the
next 30 years. Over that time period, they will save Americans an
estimated $250 to $300 billion through avoided energy costs.\1\
---------------------------------------------------------------------------
\1\ DOE Press Release, October 13, 2009. http://www.energy.gov/
news2009/8129.htm
---------------------------------------------------------------------------
In addition, in the last three months DOE completed standards for
commercial clothes washers and small electric motors on schedule, and
aims to complete residential water heaters, direct heating equipment
and gas pool heaters by the end of March 2010. In the next three years,
the Department will also revise standards for several additional
categories of products, including residential air conditioners,
refrigerators, clothes washers, and medium electric motors. These
standards will also provide substantial energy savings to Americans.
Appliance Standards Processes and Enforcement
While DOE has already increased its pace to complete required
rulemakings, the Department continues to examine and review its
operations to improve efficiency and productivity to achieve the
Administration's goal of using appliance standards to increase energy
savings and avoid GHG emissions. In addition, the Department continues
to proactively work to improve and streamline its test procedures and
enforcement of appliance standards. The improved procedures will build
upon DOE and industry best practices, creating a process for
developing, reviewing, and updating test procedures that will be able
to accommodate changes in designs and technologies.
EISA added new flexibility to the rulemaking process that can
contribute to the Department's productivity. Section 308 of EISA
permits DOE to issue direct final rules in cases where a fairly
representative group of stakeholders (including manufacturers, States,
and efficiency advocates) jointly submit a recommended standard and no
adverse public comments are received. For a consensus rule, this has
the potential to reduce a typical three-year process. EISA also
authorizes DOE to consider the establishment of regional standards for
furnaces, central air conditioners, and heat pumps. The residential
central air conditioner rulemaking, currently underway, is the
Department's first opportunity to pursue the establishment of regional
standards under the new authority. Furthermore, Section 307 of EISA
removes the requirement for DOE to publish and Advance Notice of
Proposed Rulemaking (ANOPR) in rulemakings on energy conservation
standards for certain residential products. In lieu of ANOPRs, DOE
posts analyses to its website and holds public meetings to receive
stakeholder input on preliminary analyses.
The Department is assessing the resource needs of the appliance
standards team, as well as determining how best to improve or
reengineer underlying processes. The goal is to put sufficient Federal
resources in place to ensure all requirements are met within given
timelines and quality and content requirements. These resources will be
applied to rule development and standards enforcement.
Additionally, the Department recognizes that the energy
conservation standards must be enforced to be effective. The Department
recently has taken significant steps to strengthen its enforcement of
standards. Within the last six months the Department created a new
enforcement team within the Office of the General Counsel, announced a
program to randomly review compliance with DOE certification
requirements and, most importantly, has held manufacturers accountable
for failing to comply with EPCA and DOE's regulations. As part of DOE's
tougher enforcement efforts, the Office of the General Counsel has
initiated investigations and enforcement actions involving hundreds of
products as far ranging as refrigerator-freezers, heating and air
conditioning systems, light bulbs, and showerheads. These efforts
include both actions to enforce the underlying energy efficiency
standards, as well as efforts to improve the quality of the energy
efficiency information available to DOE and consumers.
While many of these efforts are still ongoing, they have revealed
that the existing statutory language constrains the Department's
enforcement efforts in several ways. For example, the current statutory
penalty, originally adopted in the 1970s, is limited to $200 per
violation. Similarly, the process prescribed by statute for assessing
these penalties may also benefit from updating. Finally, the statute
limits the Department's enforcement authority to specific enumerated
acts which do not cover all circumstances found to be problematic by
the enforcement team.
pending energy efficiency legislation
The Department recognizes and appreciates the Committee's hard work
on developing legislation that advances the research, development and
deployment of energy efficiency. DOE looks forward to working with the
Committee on this legislation as requested.
My comments below address four bills, either pending or introduced,
including:
S. 3059--The National Energy Efficiency Enhancement Act of
2010;
S. 1696--The Green Gaming Act of 2009;
S. 2908--The Water Heater Rating Improvement Act of 2009;
and
S. 3054--a bill establishing efficiency standards for spas,
water dispensers, and commercial food cabinets.
3059--national energy efficiency enhancement act of 2010
Sec 2. Energy Conservation Standards
(a) Multiple efficiency descriptors: DOE does not currently have
authority to regulate based on multiple efficiency descriptors. The
lack of such authority has prevented DOE from responding positively to
stakeholder requests for the use of multiple efficiency descriptors.
This provision would allow DOE greater flexibility in the technical
formulation of test procedures and energy conservation standards.
(c) Regional standards for central air conditioners and heat pumps:
DOE has initiated a rulemaking on central air conditioners and heat
pumps. DOE has not yet completed an analysis of the specific proposed
standards. The next step in DOE's rulemaking process for these products
is the provision of a preliminary analysis of potential standard
levels. In this next step of the process, stakeholders will have an
opportunity to discuss issues relevant to the rulemaking and to comment
on DOE's approach.
(d) Regional standards for furnaces: DOE currently has a rulemaking
underway for residential furnaces. DOE has not yet completed an
analysis of the specific proposed standards. The next step in DOE's
rulemaking process is a notice of public meeting in which DOE will
describe the planned analytical methodology and process for conducting
a rulemaking. In this next step of the process, stakeholders will have
an opportunity to discuss issues relevant to the rulemaking and to
comment on DOE's approach.
(f) Allowance for State building codes to exceed Federal standards:
DOE analyses of energy efficiency standards in many cases demonstrate
that high efficiency products may be more economically justified in new
buildings compared with replacement products. This is because some
efficiency technologies require not only changes in the equipment but
in how the equipment is installed in a building. Since whole-building
standards can address both equipment features and how the equipment is
installed in a building's infrastructure, such codes can sometimes
address the efficiency improvements more economically than equipment
standards alone. But currently due to federal preemption, building
codes cannot take advantage of such economically viable energy
efficiency opportunities because they cannot specify equipment
standards that are more stringent than Federal standards. An
alternative approach to this same issue might be to provide DOE with
authority to promulgate different standards for replacement equipment
compared to equipment that is installed in new homes.
Sec. 3. Energy Conservation Standards for Heat Pump Pool Heaters
DOE is currently regulating gas heaters for pools and this
provision would regulate heat pump water heaters which are the
comparable type of equipment for households in warmer climates and with
electricity-only energy supplies.
Sec. 4. Efficiency Standards for Class A External Power Supplies
DOE estimates that the specified products only very rarely operate
under no-load conditions. These proposed provisions address comments
that DOE received in its public workshops concerning external power
supply regulation. In the rulemaking DOE did not have the ability to
respond to these comments noting that the statute did not allow DOE to
grant an exemption from no-load requirements.
Sec. 5. Prohibited Acts.
Currently, DOE's authority to enforce its energy and water
conservations standards is limited to certain entities engaged in
specific conduct. This provision expands DOE's enforcement authority to
include representatives of manufacturers, distributors, and retailers,
which will help to ensure effective enforcement of our energy
conservation standards throughout the distribution chain.
Sec 6. Outdoor Lighting
This section ends production of inefficient mercury vapor lamps and
sets initial standards for outdoor lighting luminaires. These
provisions are also consistent with on-going DOE activities to set
efficiency standards for particular high intensity discharge lamps and
lamp ballasts.
Sec. 7. Energy Efficiency Provisions
(a) Direct final rule for test procedures: This provision may allow
for more timely updates of test procedures in some cases.
(b) (1) (A) (i) Inclusion of impact on average energy prices as
criteria: DOE believes that the clearest economic impact that energy
conservation standards have on consumers and the country, is the impact
on their energy bill. DOE already evaluates energy bill impacts in its
standards rulemakings. In many cases, an energy conservation standard
will decrease consumers' energy bills while the average price of energy
increases. In many cases incremental average energy price changes may
be weakly correlated, or even negatively correlated with either
consumer or national economic impacts.
(b) (1) (A) (i) Inclusion of smart grid impacts as a criteria: This
provision provides clear legislative intent to DOE to specifically
address smart grid capabilities and features when considering energy
efficiency ratings for appliances and equipment and any attendant
energy conservation standards impacts. There is a potential for the
smart grid technologies to provide national energy and economic savings
beyond those considered for equipment that is efficient but which do
not have such smart grid features.
(b) (2) Rebuttable presumption: In general, DOE promulgates
standards based on the criteria in 42 USC 6295(o)(2)(B), but the
``rebuttable presumption'' provisions proposed in the act would allow
DOE to set cost-effective standards using alternative methods. However,
in many cases, an analysis based on the seven factors could lead to
more energy savings than that on the rebuttable presumption.
(c) Obtaining appliance information from manufacturers: DOE is
currently reviewing its existing certification and information
collection requirements to determine how they can be streamlined and
improved. This provision authorizes DOE to collect additional
information that DOE may use in its compliance, monitoring and
enforcement activities. Accurate and comprehensive information is a
prerequisite to effective enforcement of DOE's energy conservation
standards. Coordination with other federal agencies, states, and third-
party verification programs will help to rationalize this vital
information gathering effort and ensure that DOE has the information it
needs, while minimizing reporting burdens and duplication to the extent
possible.
(e) Permitting States to Seek Injunctive Enforcement. This
provision would permit state attorneys general to seek injunctive
enforcement for violations of federal conservation standards in U.S.
District Court, with notice to DOE. It provides DOE an opportunity to
intervene in any such actions. This broadening of enforcement authority
and the additional resources of State enforcement agencies will help to
ensure efficient enforcement of our standards throughout the country.
s. 1696--the green gaming act of 2009
This legislation requires DOE to conduct a study of video game
consol energy use.
DOE is aware of the potentially significant energy savings
potential of a wide range of miscellaneous energy uses that are not
covered equipment. Such miscellaneous end uses also include such common
household items as: set-top boxes, audiovisual and home entertainment
equipment, cordless telephones, coffee makers, computers, computer
displays and monitors, computer networking equipment, ground fault
circuit interrupting outlets, printers, and home security systems.
Currently, DOE has the regulatory authority to cover new products
if they meet certain criteria. The average annual per-household energy
use by products of such type is likely to exceed 100 kilowatt-hours (or
its British thermal unit equivalent) per year (42 U.S.C.6292(b)).
However, in terms of establishing energy conservation standards for
newly-covered consumer products DOE's authority is limited by
particular threshold criteria. In 42 U.S.C. 6295(l)(1)(A), which
specifies the requirement that ``the average per household energy use
within the United States by products of such type (or class) exceeded
150 kilowatt-hours (or its British thermal unit equivalent) for any 12-
month period ending before such determination.''
Currently the bill states: ``On completion of the initial study the
Secretary shall determine by regulation, whether minimum energy
efficiency standards for video game consol energy use should be
established.'' However, the proposed legislation does not specify the
criteria that DOE should use in determining if standards should be
established.
If standard-setting is dependent on the threshold in 42 U.S.C.
6295(l)(1)(A) it is not clear at this time if video game consoles would
satisfy this criteria.
Barring explicit legislation for a long list of specific
miscellaneous products, the biggest factor that determines whether or
not DOE has the authority to set standards for a specific consumer
product is the value of the threshold criteria contained in 42 U.S.C.
6295(l). Given compliance with the threshold criteria, DOE has existing
authority to study and regulate any miscellaneous end use.
s. 2908--the water heater rating improvement act of 2009
This legislation gives DOE the authority to redefine the efficiency
descriptor for water heaters marketed for both commercial and
residential applications. Currently, some categories of water heaters
are marketed for both commercial and residential applications, which
use different test procedures and metrics. The boundary between
commercial and residential applications is currently mandated by
statute. The proposed legislation would allow greater flexibility in
formulating regulations for large residential and small commercial
water heaters and would allow DOE to make adjustments in test
procedures and energy metrics to match standards and test procedures
more closely with existing market conditions.
s. 3054--standards for spas, water dispensers, and commercial food
cabinets
DOE has the regulatory authority to cover these new products after
performing a coverage determination. Typically, the simple payback
period of the energy conservation standards promulgated recently by DOE
are substantially longer than the simple payback periods reported by
the manufacturers of these products. In light of this, DOE is actively
considering inclusion of these categories and other miscellaneous
products under existing authority.
top tier levels and programs
As the Committee is aware, last year DOE and EPA updated their
agreement on roles and responsibilities for how the ENERGY STAR program
is managed. As described in the enhanced program plan for ENERGY STAR
products, released in December 2009, EPA will manage a new top tier
program, in consultation with DOE, that will be nested in the existing
ENERGY STAR program. EPA and DOE are currently exploring how this
program might best be structured.
Secretary Chu has spoken favorably regarding the concept of a top
tier category for ENERGY STAR. He has noted that such a designation
would give companies key marketing positions for ultra-efficient
products that would reduce consumer's energy bills by even more over
their lifecycles. Such a market designation would also provide
incentives for inventors, innovators and manufacturers to propel
appliance and equipment technologies to new heights of energy
efficiency. DOE analyses indicate that many high efficiency products
are technically possible but are not yet on the market. For example,
cutting edge television technologies can reduce energy use by 70
percent compared with the traditional cathode ray tube. Yet, there is
no program to help consumers easily identify products in this top tier
of performance. While cost and lack of performance information may be
reasons that these energy saving technologies have not been deployed
commercially, a top tier category could provide incentives for
manufacturers to find ways to bring such technologies to market more
cost effectively and may provide information to consumers who may have
preferences for buying them.
There are also a significant number of consumers who experience
very high electricity costs. For example, in regions like Alaska and
Hawaii electricity can cost 3 to 5 times the national average. The
economically optimum energy efficiency for appliances and equipment for
such consumers is typically much higher than what is either provided by
the market or by more general designations like ENERGY STAR.
Creating a viable market niche for cutting edge efficiency
technologies will provide a setting in which experimenters and
innovators can test their ideas, evaluate consumer response to new
technologies, and learn how to make cutting edge technologies cheaper
and economically viable for a larger market.
conclusion
DOE is continually working to seize the opportunities provided by
energy efficiency to achieve greater energy savings, reduce electricity
consumption, and lower GHG emissions. There are many opportunities for
further improvements in the energy efficiency of appliances and
products that consumers and businesses use every day. Therefore, the
Department is continuing to establish commercial and residential
appliance standards. DOE is constantly modernizing, improving, and
tailoring the Appliance and Commercial Equipment Standards Program to
respond to changing market conditions, while being responsive to
legislative and regulatory requirements.
Thank you again for the opportunity to discuss the Department's
work on appliancetandards. I am happy to answer any questions Committee
Members may have.
The Chairman. Thank you very much.
Mr. McGuire.
STATEMENT OF JOSEPH M. MCGUIRE, PRESIDENT, ASSOCIATION OF HOME
APPLIANCE MANUFACTURERS (AHAM)
Mr. McGuire. Thank you, Chairman Bingaman, and thank you
for the opportunity to testify today on S. 3059.
On behalf of the home appliance industry, I want to thank
you and Senator Murkowski for crafting this consensus bill and
for working with all affected stakeholders.
AHAM's members include the producers of the vast majority
of appliances sold in the United States and all of North
America, for that matter. While our membership is global, our
industry employs hundreds of thousands of people in the United
States in manufacturing, engineering, sales, and marketing.
The appliance industry worked hard for enactment of the
National Appliance Energy Conservation Act of 1987, which laid
the foundation for uniform Federal appliance efficiency
standards. Since that time, we have concluded several
successful negotiations with efficiency advocacy groups,
States, and other stakeholders on new and revised appliance
efficiency standards. These agreements, some of which have been
enacted into law, have delivered enormous energy savings to
consumers.
S. 3059 builds on these successes by opening the door to
perhaps the most dramatic energy savings yet attributable to
home appliances. The bill will encourage the manufacture and
use of smart appliances, which when fully deployed across the
country will possess the potential to shift 295 gigawatts of
energy demand, which exceeds the total capacity of nuclear and
hydro power generation. It does this by recognizing the
potential benefits to the environment and to consumers for such
smart appliances operating in a smart grid environment.
It gives authority to DOE to provide a credit to future
appliance efficiency standards, to manufacturers who invest in
making these appliances smart grid enabled. AHAM strongly
supports this provision.
We also believe that this incentive-based approach to the
next generation of appliance standards foreseen by this bill
can reach its full potential when coupled with the Best-in-
Class Appliance Deployment Incentive Program that is currently
under discussion by our industry, retailers, and efficiency
advocates. We hope this program will be an additional consensus
agreement that this committee and the Congress embrace in an
act to help fulfill the smart grid vision.
To some extent, we have become victims of our own success
in the appliance standards process. The average refrigerator
sold today consumes less energy than a 60-watt light bulb. Just
since 2000, refrigerator energy consumption has decreased 30
percent. Annual operating costs for a refrigerator in the 1970s
were $259 a year. Today's Energy Star refrigerator operating
costs are about $48 per year.
But the remaining relative gains in terms of energy
efficiency, particularly when measured against consumer costs
and necessary manufacturing investment, are limited. Your
legislation recognizes the benefits to the consumer, the
environment, and energy conservation goals that can be achieved
through the use of an appliance that can receive demand-
response signals, such as electricity cost or renewable energy
availability, directly from the grid.
For the consumer, smart appliances will help save money on
electricity bills without significantly changing their
behavior. For the environment, shifting in appliance function
from peak times of day to another will reduce the need for
peaker power plants and their associated greenhouse gas
emissions. Furthermore, reducing peak load provides relief to
the grid during capacity-constrained periods, reducing line
losses and reducing transmission congestion.
In the area of energy, smart appliances would increase
deployment of renewable energy resources, which need load to be
ready when the wind is blowing or the sun is shining. The
ability of appliance loads to be available or stopped almost
instantaneously can be a significant factor in the growth of
renewable energy. Smart appliances will help level the demand
curve for electricity throughout the day.
Going back to the consumer, a great example showing the
benefits of a smart appliance compared to its counterpart
measures the consumer benefit of increasing the efficiency, for
example, of an Energy Star dishwasher to a more efficient
level, such as the Consortium for Energy Efficiency Tier 2
levels.
For the traditional energy standard change, the yearly
savings to the consumer is only about $3.30. However, if the
same Energy Star unit could operate at off-peak times, it can
save the consumer as much as $40 per year.
Mr. Chairman and Senator Murkowski, we believe there are
significant energy, environmental, and consumer benefits to a
smart grid. A key element of its success, however, is the use
of smart grid-enabled home appliances. But much consumer
education is needed, as is enlightened energy policy.
We thank you both for taking this important step today.
Thank you.
[The prepared statement of Mr. McGuire follows:]
Prepared Statement of Joseph M. McGuire, President, Association of Home
Appliance Manufacturers (AHAM)
hank you Chairman Bingaman, Ranking Member Murkowski and members of
the committee. I appreciate your giving me the opportunity to provide
the appliance industry's views to the committee today. My name is Joe
McGuire and I am president of the Association of Home Appliance
Manufacturers (AHAM). I would like to convey the appliance industry's
support for the energy efficiency provisions in the National Energy
Efficiency Enhancement Act of 2010. The provision related to the Smart
Grid provides an important building block for the next generation of
energy efficiency, conservation and environmental protection
attributable to home appliances.
AHAM represents manufacturers of major, portable and floor care
home appliances, and suppliers to the industry. Our more than 150
members employ tens of thousands of people in the U.S. and produce more
than 95% of the household appliances shipped for sale within the U.S.
The factory shipment value of these products is more than $30 billion
annually. The home appliance industry, through its products and
innovation, is essential to U.S. consumer lifestyle, health, safety and
convenience. Through its technology, employees and productivity, the
industry contributes significantly to U.S. jobs and economic security.
Home appliances also are a success story in terms of energy efficiency
and environmental protection. New appliances often represent the most
effective choice a consumer can make to reduce home energy use and
costs.
Mr. Chairman, I commend you and Senator Murkowski for listening to
all stakeholders as you developed the National Energy Efficiency
Enhancement Act of 2010.
overview of federal energy standards
As this committee well knows, AHAM and its members are committed to
providing energy efficient home appliances that have a direct positive
impact on the lives of consumers. In the last 8 years, manufacturers
have reduced energy consumption of home appliances by nearly 8 billion
kWh.
AHAM was a strong supporter of the National Appliance Energy
Conservation Act and have participated in several negotiated agreements
with energy efficiency advocates, states and other stakeholders on
appliance efficiency standards. Uniform standards throughout the U.S
and even throughout North America and beyond are preferable to a
patchwork of disconnected stateby-state standards. These national
standards have resulted in significant energy savings and as we know
from the past several years have become the foundation for additional
energy efficiency awareness and incentive policies that have generated
additional energy savings.
As consideration is given to how much more energy savings can be
achieved from home appliances, we need to be mindful of the huge gains
that have been made and will continue. Refrigerators/freezers,
dishwashers and clothes washers account for a 43% combined decrease in
energy consumption since 2000. From a global climate change
perspective, the energy savings realized in 2008 shipments of
refrigerators, dishwashers and clothes washers versus 2000 models would
offset the CO2 emissions of more than 698 million gallons of
gasoline consumed.
Clothes washer energy consumption has decreased by 63% since 2000
while tub capacity has grown by 8%. Dishwasher energy consumption has
dropped nearly 30% and water consumption has declined 29% since 2000.
Refrigerator energy consumption has also decreased 30% since 2000 and
efficiency, measured by a unit's energy factor has increased 39%. The
average refrigerator sold today consumes less energy than a 60-watt
light bulb left on 24 hours a day.
The chart below shows the history and schedule of several home
appliance standards.
EFFECTIVE YEAR OF STANDARD
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Appliance 1988 1990 1993 1994 2000 2001 2004 2007 2010 2011 2012 2014 2015 2018
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Refrigerators/Freezers .......... Original 1st .......... ........... 2nd ......... ......... ......... ......... .......... 3rd ......... .........
Update Update Update
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Room Air Conditioners .......... Original .......... .......... 1st Update .......... ......... ......... ......... ......... .......... 2nd ......... .........
Update
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Clothes Dryers Original .......... .......... 1st Reviewed .......... ......... ......... ......... ......... .......... 2nd ......... .........
Update Update
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Clothes Washers Original .......... .......... 1st Update ........... .......... 2nd 3rd ......... 4th .......... ......... 5th .........
Update Update Update Update
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dishwashers Original .......... .......... 1st ........... .......... ......... ......... 2nd ......... .......... ......... ......... 3rd
Update Update Update
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Kitchen Ranges and Ovens .......... Original .......... .......... ........... .......... ......... ......... ......... ......... Reviewed ......... ......... .........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Dehumidifiers .......... .......... .......... .......... ........... .......... ......... Original ......... ......... 1st ......... ......... .........
Update
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Microwave Ovens .......... .......... .......... .......... ........... .......... ......... ......... ......... ......... Original ......... ......... .........
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Current law provides a framework to ensure federal standards
balance a number of factors so that the final efficiency standard
provides real energy savings. It makes no sense to establish a standard
so stringent that it penalizes consumers and manufacturers and slows
the rapid deployment of new much more efficient products. The Energy
Policy and Conservation Act establishes a process for federal energy
conservation standards and makes clear that no standard can be set
which may result in loss of product availability in popular styles and
prices, and product functions consumers want.
smart appliances in the future
The Smart Grid is an exciting development that will modernize the
current grid. The objective of the Smart Grid is to provide technology
and systems (integrated into appliances and consumer devices used in
everyday activities) that will allow consumers to automatically control
their energy use and costs. AHAM provides a unique perspective to the
Smart Grid Vision because many of the products AHAM members manufacture
must be part of our nation's future Smart Grid.
In establishing policy on the development of a Smart Grid, the
Energy Independence and Security Act of 2007 requires integration of
Smart Appliances and consumer devices that can interact with the Smart
Grid. This law also requires that consumers be provided with timely
information and options for controlling energy use. The U.S.
government's Smart Grid Vision is that these goals can and should be
met without causing significant disruption or lifestyle changes for the
consumer. AHAM fully supports this Vision. Consumers should receive
valuable and understandable information about their energy use and
costs, thus enabling them to make intelligent and informed choices
about how and when to use energy. Armed with this knowledge, consumers
will be empowered to use energy more efficiently and to save money on
electricity.
As mentioned above, over the years the appliance industry has made
great gains in improving pure energy efficiencies. However, although
there is still room to improve in this area, today the gains are much
more significant in the area of demand response and grid load
management. The Federal Energy Regulatory Commission found that
residential homes offer as much demand response potential as small,
medium, and large businesses combined. Today, the average refrigerator
uses about the same energy as a 60 Watt light bulb. A 10 percentage
increase in pure energy efficiency would yield 6 Watts. However,
deferring a defrost cycle can yield hundreds of Watts.
In order to advance the Smart Grid, incentives need to be
established for manufacturers to make Smart Appliances while the
transmission and distribution system is modernized. The potential gains
in this area are great, including increased use of renewable energy,
fewer peaker plants and resultant emissions and less line losses in the
transmission of electricity.
Two very important incentives that Congress should embrace are the
Best-in-Class Appliance Deployment program and credits for meeting new
appliance efficiency standards for smart grid capable appliances. Still
under discussion, the Best-in-Class Appliance Deployment program is a
focused and effective incentive program that provides financial
incentives to manufacturers willing to invest in the development of
Smart Appliances and recognizes that an inherent part of Smart
Appliances is energy efficiency. The Best-in-Class Appliance Deployment
program will be an extremely effective incentive program to build the
Smart Grid in an effective manner.
S. 3059, the National Energy Efficiency Enhancement Act of 2010,
authorizes the Secretary of Energy to provide credits to manufacturers
on meeting new appliance efficiency standards for products that are
smart grid capable. In other words, the Secretary can encourage
manufacturers to produce smart appliances by adjusting the stringency
of a new appliance standard. The trade off in added appliance
efficiency would be equaled or outweighed by the load shifting and grid
efficiencies that would result from consumer use of such appliances.
These incentives would provide the necessary financial and
regulatory incentives to encourage deployment of smart and efficient
appliances nationwide and provide a great impetus to the development of
the Smart Grid. AHAM strongly believes that the provisions in S. 3059
regarding smart grid credits cannot be fully realized without enactment
of the Best-in-Class Appliance Deployment program providing incentives
for deployment of smart grid enabled appliances.
section 7, national energy efficiency enhancement act of 2010
As the committee considers the National Energy Efficiency
Enhancement Act of 2010, I would like to provide the appliance
manufacturing industry's views on the energy efficiency provisions.
adopting consensus test procedures provision
The comprehensive standard setting process starts with updating the
test procedure taking into consideration--
1. Consistency across products
2. New technologies
3. Testing of new procedures for repeatability, uniformity,
burden, simplicity, and representativeness
Current law on test procedures wisely requires a balance between
measuring actual field energy use (which is highly variable) with the
cost, uniformity and repeatability parameters required for test
procedures for products mass-produced globally. But, developing test
procedures is difficult and requires resources at the Department of
Energy. We support authorizing consensus test procedures to be adopted
more quickly when the industry and others agree. It makes sense to
allow noncontroversial test procedures to be ``fast tracked,'' i.e.,
they can be promulgated in a direct final rule if they meet certain
criteria subject to subsequent sufficient negative comment such that a
regular rulemaking is required.
The National Energy Efficiency Enhancement Act of 2010 would allow
out dated test procedures to be updated more quickly and using less
scarce resources at DOE by creating an expedited procedure for approve
test procedures that have consensus support. Similar authority exists
in law for the standards. It makes sense to extend this to test
procedures, which are the foundation of any energy standard work. The
current refrigerator test procedure that DOE uses is from 1979, while
AHAM's latest version is from 2008 and we are working on making
revisions to that one.
criteria for prescribing new or amended standards provision
Once a test procedure is established, work on an energy standard
can progress, which includes an analysis to determine what standard
provides benefits exceeding the burdens. The factors in law that must
be considered are as follows:
1. Economic impact on manufacturers and consumers, retailers,
distributors and society.
2. Savings in operating costs through the life of the product
compared to price increase and maintenance costs.
3. Total energy or water savings.
4. Lessening of the performance.
5. Lessening of competition (Department of Justice opines).
6. Need for national energy and water conservation.
7. Other factors the Secretary of Energy considers relevant.
The National Energy Efficiency Enhancement Act of 2010 expands this
statutory list of considerations to include the estimated impact on
average energy prices and the net energy, environmental, and economic
impacts due to smart grid technologies or capabilities. The latter is
an important and helpful provision to the development of the Smart
Grid.
smart appliances and the smart grid
AHAM's member companies are interested and involved in the
development of the Smart Grid and the policies surrounding a Smart Grid
in the United States. A Smart Appliance has many advantages to bring to
the Smart Grid. One of which is that a Smart Appliance provides a
faster resource to a destabilized electrical grid. A Smart Appliance,
or load, can be managed instantly, whereas generation, or a reserve
power plant, needs to ramp up creating a lag in a needed response,
which can further aggravate the instability problems. This faster
response over a short duration can be a quite compelling complement to
the increased use of intermittent renewable energy.
A Smart Appliance may have some of the following key features:
Dynamic electricity pricing information is delivered to the
user, providing the ability to adjust demand of electrical
energy use.
It can respond to utility signals, contributing to efforts
to improve the peak management capability of the Smart Grid and
save energy by----
1. providing reminders to the consumer to move usage to a time of
the day when electricity prices are lower, or
2. automatically ``shed'' or reduce usage based on the consumer's
previously established guidelines or manual overrides.
Integrity of its operation is maintained while automatically
adjusting its operation to respond to emergency power
situations and help prevent brown or blackouts.
The consumer can override all previously programmed
selections or instructions from the Smart Grid, while insuring
the appliance's safety functions remain active.
When connected through a Home Area Network and/or controlled
via a Home Energy Management system, Smart Appliances allow for
a ``total home energy usage'' approach. This enables the
consumer to develop their own Energy Usage Profile and use the
data according to how it best benefits them.
It can leverage features to use renewable energy by shifting
power usage to an optimal time for renewable energy generation,
i.e., when the wind is blowing or sun is shining.
The Best-in-Class Appliance Deployment program would incentivize
manufacturers to make Smart Appliances as smart meters and dynamic
pricing is being worked on and implemented across the more than 3,000
utilities in the U.S. Incentives are an essential part of the
development of the Smart Grid in a timely manner. We need to move past
the ``chicken or the egg'' mentality that no one wants to pay for a
smart meter if there are no Smart Appliances in the home, and no one
wants to use a Smart Appliance if there is not a smart meter and
dynamic pricing program. The Best-in-Class Appliance Deployment program
would alleviate this problem by authorizing financial incentives to
manufacturers to build Smart Grid capable appliances for the home.
We believe the Best-in-Class Appliance Deployment program needs to
be authorized along with the energy efficiency provisions in the
National Energy Efficiency Enhancement Act of 2010. It is critical that
incentives are provided to manufacturers to innovate and take
investment risks in the area of Smart Appliances to ensure that we are
not paralyzed by smart meters waiting for Smart Appliances and Smart
Appliances waiting on smart meters. The appliance consumer, who is also
an electricity ratepayer, can reap benefits from Smart Appliances
before dynamic pricing is brought into their home, such as through
sensing through the wires of problems on the grid or use of feedback
information to show energy usage. However, dynamic pricing will open
the door to much more capability and allow the consumer to save even
more money on their electricity bill.
We would also request that the committee consider clarifying the
bill language through the committee report that Smart Appliances will
help increase the use of renewable energy and that the consideration of
net benefits attributable to a smart grid capable appliance as it
relates to Smart Grid credits to an energy conservation standard should
include the impacts to the potential increased use of renewable and low
emission energy attributable to the appliance standard. An example of
this concept is that if a dishwasher can be set to run when the wind is
blowing or when the sun is shining, then a credit should be given for
this capability to recognize the energy efficiencies derived outside of
the technical test procedure calculations, such as line losses, less
peaker plants, increased renewables, and many others.
obtaining appliance information from manufacturers provision
Regarding the provision to require the Department of Energy to
promulgate regulations to require manufacturers to submit information
to the agency, we are pleased that the provision ensures information
requirements are based on product type and not a ``one size fits all'
approach. Each product has different requirements that should be
considered. Also, it is good that the provision requires the Department
of Energy to minimize burdens on the manufacturers, use existing public
sources of information, including nationally recognized certification
or verification programs of trade associations; whether some or all of
the information is submitted to another Federal agency and to minimize
any duplication of requests for information by Federal agencies; and
coordinate with State agencies to mitigate reporting burdens.
waiver of federal preemption provision
The essential principle behind the underlying Energy Policy and
Conservation Act (EPCA) is that national uniformity can be maintained
with a series of vigorous national standards which save energy, water,
carbon and consumer's money while maintaining product utility, moderate
prices, a competitive manufacturer base, and minimizing the negative
impact on domestic employment.
There is a critical need for coordination and integration of
federal regulatory scheme because of the enormous cumulative regulatory
burden on the appliance industry of investing in new designs for
multiple products over many years while at the same time meeting
increasingly challenging and related environmental requirements such as
ozone depletion and climate change.
Federal preemption of states developing 50 different energy
efficiency standards is a critical part of maintaining a national
marketplace and not disrupting interstate commerce. The National Energy
Efficiency Enhancement Act of 2010 does not allow the Secretary of
Energy to reject a petition from a state to seek a waiver of federal
preemption if the State does not have confidential information
maintained by any manufacturer or association of manufacturers, but
only if the state has requested the information and did not receive it.
This is an important point because we would like to be asked for any
information the state is after and be able to comment on any possible
energy standard they may be considering. Again, related to the notion
of having a fair chance to comment and make our views known to a state
agency in the area of energy efficiency standards, this provision
allows the Secretary of energy to approve a waiver petition submitted
by a State that does not have an energy plan but only if it is based on
a regulatory process that is subject to a notice and comment rulemaking
proceeding.
permitting states to seek injunctive enforcement provision
Our views on the provision permitting states to seek injunctive
enforcement are grounded in the basis that this is a federal law and
therefore it should be in a federal court, that the federal agency
should have the opportunity to take over a case a state is considering,
and that there should be a federal interpretation of the law and issues
so that manufacturers are subject to 50 differing interpretations,
which would impede interstate commerce.
recognition of alternative refrigerant uses provision
AHAM is very supportive of incentives to move to low Global Warming
Potential refrigerants. However, appliances are manufactured for a
national market and preferably a North American market. It would be a
disincentive to manufacturers and create unnecessary uncertainty if
every city and town across the U.S. could prohibit refrigerators from
in a building through there building codes. We support the provision
requiring notification to EPA when any such restrictions are proposed.
conclusion
In conclusion, AHAM commends Senators Bingaman and Murkowski for
the future focused provisions in S. 3059 regarding smart appliances and
the smart grid. We encourage its enactment as well as the Best-in-Class
Appliance Deployment program currently under discussions which has
received strong support from several stakeholder segments. We look
forward to continuing to work with the Committee on these issues. Thank
you for the opportunity to testify and I look forward to answering any
questions you may have.
The Chairman. Thank you very much.
Mr. Nadel.
STATEMENT OF STEVEN NADEL, EXECUTIVE DIRECTOR, AMERICAN COUNCIL
FOR AN ENERGY-EFFICIENT ECONOMY (ACEEE)
Mr. Nadel. OK. Thank you very much, Chairman Bingaman,
Senator Murkowski, and hopefully, we will get some other
Senators shortly.
I am here on behalf of the American Council for an Energy-
Efficient Economy. We are a nonprofit research and education
organization that has been working on energy efficiency
standards since the 1980s. There is a long history to build on,
and I think the 4 bills before you build on this tradition. We
endorse and support all 4 bills.
Taking them individually, S. 3059, we thank both of you for
introducing this bill. It incorporates consensus agreements in
a number of areas, and I think it is a very useful addition to
the appliance standards program.
This bill includes new air conditioner and furnace
efficiency standards, adopting regional standards so that the
efficiency levels, say, in Alaska will be higher on furnaces
but lower on air conditioners than, say, Arizona or Florida,
which I think really makes sense. Steve Yurek will be talking
more about that, and in the interest of time, I won't go into
the details.
Likewise, the bill includes new outdoor lighting standards
that we negotiated with NEMA. Kyle Pitsor will talk about
those, but we very much support those.
Then as Joe McGuire just pointed out, we have worked with
AHAM, as well as the other associations, to work on a variety
of reforms to the appliance standards program. He pointed out
the smart grid section. There is also a number of other
reforms.
Senator Menendez, last year at this hearing, had introduced
a variety of reforms to the program. They got adopted by the
House in their energy bill. We have been negotiating with the
industry since Senator Menendez introduced his bill to kind of
modify them a little and come up with a consensus that everyone
can live with. That is now incorporated into 3059. It modifies
the House language, and we are all pledged to support that,
both for the Senate as well as for conference so that the House
will then follow this modified Senate language.
Turning now to the other bills, Senator Menendez also has
S. 3054, which adds appliance standards for three additional
products--hot food holding cabinets, portable electric spas--
also known as hot tubs--and bottle-type water dispensers. All 3
of these are in the House-passed bill.
We now have nine States that have adopted standards on some
or all of these products. The efficiency levels are relatively
modest. They have been in effect in a number of States for 5
years or more. They were based on Energy Star levels, at least
2 out of 3, from early this decade. They are a way to get
started.
We have been working with the trade associations for these
standards. The spa standard, a letter we just submitted
yesterday with them. They do support Senator Menendez's bill.
Likewise, NAFEM, the North American Food and Equipment
Manufacturers, has said in an email that they do support the
standards on hot food holding cabinets. When they get back from
vacation, we anticipate submitting a letter from them as well.
In the case of the drinking water dispensers, there hasn't
been a trade association. Just recently, the International
Bottled Water Association says, OK, we will take this product
up. They are now looking at things.
We have contacted all the manufacturers and got 2 of them
to pay enough attention to it. Both of them said that they will
support it. So I think these are consensus, and we urge you to
incorporate that into the bill.
S. 1696, another Senator Menendez bill, the Green Gaming
Act, would have the Department of Energy study whether to have
gaming consoles included in the standards program, or are there
other ways to improve them? These devices use a lot of energy.
The new PlayStation 3, or relatively new, the Xbox 360, they
use 100 to 150 watts when on. So if you are gaming--even if you
are not gaming, you leave it on because you wanted to save the
game and come back where you left off, or you turn off the TV
and forgot to turn off the Xbox, they still use 100 to 150
watts.
Now we heard Joe McGuire say the average refrigerator uses
the equivalent of a 60-watt light bulb left on continuously.
These gaming systems use twice as much energy when on. So the
equivalent of 2 refrigerators if you leave them on all the
time.
We think we need to be introducing power management to
these. They need to kind of go to sleep but then recover
quickly if you don't use them for a while, and there are major
energy savings. This particular bill would just have DOE study
the issue.
There are 2 trade associations involved. One, the game
manufacturers, I understand they support it. There is also the
electronic equipment manufacturers, who oppose it. But this
committee has a long history whenever there is disagreement to
refer these issues to the Department of Energy to make a
determination, and that is exactly what Senator Menendez's bill
would do. It doesn't require standards. It says study them and
only if they make sense do you go forward with a full
rulemaking as well.
So we think this falls into the tradition of this committee
of saying if there is a question, let us have DOE study that.
We also support the other bill, Senator Kohl's bill dealing
with water heater standards. Then finally, I would note we
recommend that these bills--we add to these bills a variety of
technical amendments to previous legislation. EPAct 2005, EISA
2007--both contained a variety of errors. Committee staff put
together a whole series of technical amendments. They passed
them onto the House that did adopt them as part of their bill.
We recommend that those same technical amendments be adopted
here because there is a variety of errors that are causing
problems.
So, with that, thank you very much, and I am happy to
answer any questions.
[The prepared statement of Mr. Nadel follows:]
Prepared Statement of Steven Nadel, Executive Director, American
Council for an Energy-Efficient Economy (ACEEE)
summary
Federal appliance efficiency standards were first adopted in 1987
and were augmented by Congress in 1988, 1992, 2005 and 2007. The
program has a long history of bipartisan support. My organization, the
American Council for an Energy-Efficient Economy (ACEEE), estimates
that without these standards and subsequent DOE rulemakings, U.S. 2010
electricity use and peak electric demand would be about 10% higher and
U.S. total energy use about 5% higher. Net savings to consumers from
standards already adopted will exceed $400 billion by 2030 (2008 $).
The majority of these standards have been set by Congress, based on
consensus agreements between manufacturers and energy efficiency
advocates. But where there is not consensus agreement, Congress has
often delegated decisions to DOE, allowing each side to make their
arguments and having DOE make the decision.
The four bills being considered in this hearing build on these
solid foundations and we support these bills. We thank Senators
Bingaman, Murkowski, Menendez, and Kohl for introducing these bills and
moving the discussion forward on ways to improve the appliance
standards program.
Collectively these bills will reduce U.S. annual electricity use by
about 20 billion kWh in 2020 and 56 billion kWh in 2030. The 2030
electricity savings are equivalent to the amount of energy generated in
a year by 14 typical 600-MW coal-fired baseload power plants. These
standards will also reduce natural gas and propane use, including
nearly 50 trillion Btu of these fuels in 2020 and more than 100
trillion in 2030. The 2030 savings are enough to heat 1.8 million
average American homes for a year. These standards will also reduce
2030 greenhouse gas emissions by 39 million metric tons of carbon
dioxide, equivalent to taking 7 million cars off the road for a year.
We have negotiated the provisions in S. 2908, 3054, and 3059 with
relevant trade associations and would call each of these consensus
proposals. Achieving such consensus requires a few small modifications
to the bills as filed; these are listed in the appendix to my
testimony. In the case of S. 1696, one trade association is supportive
and another is not. However, this bill only requires DOE to study
opportunities for energy savings, including the possibility of
standards, with a full rulemaking to follow if DOE's study finds that
standards may make sense. This Committee has a long history of
directing DOE to study an issue when consensus cannot be reached. S.
1696 falls into this tradition.
We recommend that all of these bills be grouped together and
reported out of Committee on a bipartisan basis. We also recommend that
technical corrections to recent appliance standards legislation be
incorporated into this bill, including establishment of separate
standards for service-over-counter refrigerators. We would be happy to
assist Members and Committee staff with working out the details.
The federal appliance and equipment efficiency standards program is
a great energy efficiency success story, with Congress adopting new
standards in each of the last three decades. The ACELA bill, reported
out last year, adds consensus efficiency standards on several products.
The four bills before the Committee today should be reported out,
combined with ACELA, and hopefully enacted by Congress in the next few
months. This Committee has worked diligently in this direction and we
thank you.
introduction
My name is Steven Nadel and I am the Executive Director of the
American Council for an Energy-Efficient Economy (ACEEE), a nonprofit
organization dedicated to increasing energy efficiency to promote both
economic prosperity and environmental protection. We were formed in
1980 by energy researchers and are celebrating our 30th anniversary
this year. Personally I have worked actively on appliance standards
issues for more than 20 years at the federal and state levels and
participated in discussions that led to the enactment of federal
standards legislation in 1987 (NAECA), 1988 (NAECA amendments), 1992
(EPAct), 2005 (EPAct), and 2007 (EISA). I also worked on the appliance
standards provisions incorporated into the ACELA bill that this
Committee reported out last year.
Without these laws, plus subsequent DOE rulemakings updating some
of these standards, ACEEE estimates that U.S. 2010 electricity use and
peak electric demand would be about 7% higher and U.S. total energy use
about 4% higher. Net savings to consumers from standards already
adopted will exceed $300 billion by 2030 (2008 $).\1\
---------------------------------------------------------------------------
\1\ Neubauer, et al. 2009. Ka-BOOM! The Power of Appliance
Standards: Opportunities for New Federal Appliance and Equipment
Standards. Washington, D..C: American Council for an Energy-Efficient
Economy. Http://aceee.org/pubs/e091.htm.
---------------------------------------------------------------------------
However, much more savings are possible through a combination of
further updates to existing standards, plus adding new products to the
federal standards program. ACEEE estimates that U.S. energy use in 2030
can be reduced by at least 2.1 quadrillion Btu (about a 2% reduction
from projected levels) and carbon dioxide emissions can be reduced by
at least 150 million metric tons, a 2.6% reduction from projected
levels.\2\
---------------------------------------------------------------------------
\2\ Ibid.
---------------------------------------------------------------------------
Fortunately, the federal standards program has a long history of
bipartisan support, at the Committee level, on the House and Senate
floors, and from Presidents of both major parties: standards laws have
been signed by Presidents Ford, Carter, Reagan (two laws), George H.W.
Bush, and George W. Bush (two laws).
The foundation of these laws was adoption of consensus standards
negotiated between appliance manufacturers and energy efficiency
advocates. ACEEE has been involved in all of these negotiations. Most
federal standards build on previous state standards: after several
states adopt standards on a product, manufacturers generally prefer
uniform national standards to a patchwork of state standards. But where
manufacturers and efficiency advocates disagree, Congress has commonly
delegated decisions to DOE, allowing each side to make its best case
and then having the Secretary of Energy decide.
The four bills that are the subject of this hearing build on these
solid foundations. We support all four of these bills:
1. S. 3059, the National Energy Efficiency Enhancement Act.
2. S. 3054, to establish efficiency standards for bottle-type
water dispensers, commercial hot food holding cabinets and
portable electric spas.
3. S. 1696, Green Gaming Act.
4. S. 2908, Water Heater Rating Improvement Act.
We thank Senators Bingaman, Murkowski, Menendez, and Kohl for
introducing these bills and moving the discussion forward on how best
to improve the appliance standards program. In the sections below I
comment on the provisions in these bills and also on some additional
provisions that we recommend be added to increase the energy savings
achieved and improve the appliance standards program's processes.
the national energy efficiency enhancement act (neeea)
The heart of this bill is two consensus agreements that ACEEE and
other energy efficiency supporters negotiated with equipment
manufacturers. One agreement addresses new standards for residential
furnaces, air-conditioners, and heat pumps. The other addresses outdoor
lighting fixtures. In addition, NEEEA contains a variety of provisions
we negotiated with the Association of Home Appliance Manufacturers
(AHAM) and other trade associations on improvements to the process by
which DOE sets and implements standards. And NEEEA also contains
several other standards-related provisions. We discuss each in turn.
Residential Furnaces, Air-Conditioners, and Heat Pumps
On October 13, 2009, the nation's leading manufacturers of
residential central air conditioners, furnaces, and heat pumps signed
an historic, voluntary agreement with the nation's leading energy
efficiency advocacy organizations supporting new federal standards for
those products. For the first time, the agreement calls for regional
efficiency standards to replace a quarter-century of national
standards, and it also permits stronger state building code provisions
for new construction. This agreement is incorporated into S. 3059.
This agreement and this legislation sets different standard levels
in three climate regions--North, South, and Southwest, recognizing that
appropriate investments in heating and cooling efficiency depend on
usage, and efficiency levels that make economic sense in Michigan will
generally be different from efficiency levels that make economic sense
in Texas. Such regional standards were authorized under the Energy
Independence and Security Act of 2007 (EISA). Specifically, relative to
current federal standards, the agreement calls for higher furnace
efficiency standards in the North, while leaving standards in the South
unchanged. Conversely, the agreement increases air conditioner
efficiency in the South, while leaving standards in the North
unchanged. In the Southwest, the agreement builds on the basic southern
standard by adding requirements for efficiency under hot dry
conditions, which are particularly common in the Southwest. National
standards are set for heat pumps (used for both heating and cooling)
and oil furnaces (primarily used in the North and sales are too low in
the South to justify a separate standard).
The agreement and this legislation also allow states to include
even higher efficiency levels for heating and cooling systems in new
homes. New houses can be built without physical restrictions that might
hinder installation of highly efficient equipment--as there might be
when replacing equipment in an existing home. This new approach strikes
a balance between the desire for greater state and regional flexibility
and the need for a uniform marketplace, and looks to the nation's long-
term energy future by supporting the most efficient new systems where
they are most cost-effective.
Under EISA, details on implementing and enforcing these regional
standards will be worked out by DOE in a rulemaking. We have been
talking to equipment wholesalers about some of these issues and expect
to share shortly a couple of small refinements to this section of S.
3059 that we jointly recommend.
The new standards are projected to save U.S. consumers about $13
billion in today's dollars between 2013, when the new standards begin
to take effect, and 2030--taking into account the incremental cost of
the more efficient equipment. Between now and 2030, the agreement also
will save 3.7 quadrillion Btu of energy nationwide, which is equivalent
to all the energy consumed by approximately 18 million households in a
single year, or enough to meet the annual energy needs of either
Georgia, Massachusetts, Michigan, Missouri, North Carolina, or
Virginia. By 2030, the standards are projected to reduce peak electric
needs by 4,150 MW, equivalent to the output of nearly 14 new 300-MW
peaking power plants.\3\ The new standards would raise the minimum
efficiency of residential central air conditioning systems by about 8
percent and furnaces by about 13 percent, and would result in a 5
percent reduction of the total heating energy load and a 6 percent
reduction of the total cooling energy load in 2030.
---------------------------------------------------------------------------
\3\ For peaking power plants we use 300 MW for a typical power-
plant size. For base load power plants, 600 MW is a typical size.
---------------------------------------------------------------------------
These energy savings will result in annual greenhouse gas emission
reductions of 23 million metric tons of carbon dioxide in 2030, an
amount equal to that produced by approximately 4 million cars every
year.
Outdoor Lighting Fixtures
On Nov. 3, 2009, lighting equipment manufacturers and energy
efficiency organizations announced agreement on a legislative package
that would create new minimum efficiency standards for many types of
outdoor lighting products. The agreement was reached by the National
Electrical Manufacturer's Association (NEMA), ACEEE, and several other
energy efficiency organizations.
The agreement is incorporated into NEEEA and establishes initial
efficiency standards for outdoor pole-mounted lighting fixtures, then
calls on DOE to quickly set revised standards. Covered fixtures
primarily light roadways and parking lots. These standards will also
improve lighting quality from outdoor fixtures, since the most
stringent standards apply to fixtures with high glare and light
trespass. Standards are less stringent for fixtures with better glare
and trespass control.
In addition, the agreement and legislation requires double-ended
halogen lamps (a type of high-wattage incandescent lamp that is used
outdoors) to meet specific efficiency requirements and prohibits sales
of mercury vapor lamps as of 2016.
Congress and DOE have been steadily moving away from the use of the
most inefficient types of incandescent light sources, most importantly
with the provision in EISA that sets standards for general service
incandescent lamps over the 2012-2014 period. Double-ended halogen
lamps are a type of higher wattage incandescent lamp not covered by
EISA. The standards in S. 3059 would require these higher wattage lamps
to no longer use conventional incandescent technology, but to move to
higher efficiency levels, such as those that can be that obtained with
infrared reflective coatings.
New mercury vapor fixtures and ballasts were prohibited in the
Energy Policy Act of 2005. These fixtures will generally be replaced
with more efficient fixtures when existing ballasts wear out over the
next 15 years or so. The provision in S. 3059 accelerates this
transition, providing energy savings from 2016 (when the provision
takes effect) until about 2030 (when most of these ballasts would be
replaced anyway). Mercury vapor lamps use about 35% more energy per
lumen of light output than more modern technologies that have been in
widespread use since the 1980s. These newer, more efficient
technologies are very cost-effective. Since new mercury vapor ballasts
can no longer be sold, it is only older fixtures (overwhelmingly pre-
2005 and primarily pre-2000 or so) that will be affected.
This agreement and legislation establishes modest initial standards
for outdoor lighting equipment, but paves the way for big savings if
DOE does a good job when setting revised efficiency standards. Only a
minority of fixtures on the market today is affected by the initial
standards; much larger savings will occur if the revised DOE standards
move the average fixture to performance levels met by the better
fixtures now on the market.
If enacted by Congress as new legislation, the agreed-upon new
standards would reduce U.S. lighting energy use by about 24 to 42
billion kWh annually. ACEEE estimates that the initial standards will
save about 12 billion kWh/year. The revised standards could increase
savings by 12 to 30 billion kWh/year for total savings of as much as 42
billion kWh/year (or roughly enough power to meet the total needs of
more than 3.6 million typical U.S. households). The long-term energy
savings in 2030 are equivalent to the annual output of 14 new 600-MW
baseload power plants (the typical size of a new coal-powered unit).
Improvements to the Appliance Standards Program
The House of Representatives, in the American Clean Energy Security
Act (ACES) includes several improvements to the operation of the
appliance standards program. A year ago, Senator Menendez provided
witnesses at a March 19, 2009 hearing with some potential amendments
that were similar to those in the House bill. Since then we have worked
with the Association of Home Appliance Manufacturers and other trade
associations to negotiate a set of modifications to the House
provisions that we can all support for adoption by the Senate, and by
House-Senate conferees. These provisions are contained in NEEEA. In
general, these amendments free DOE and states from restrictions that
have hampered implementation of the standards and related programs.
None of these amendments would set new standards directly, and any
concerns an interested party may have can still be raised as part of
formal DOE and state rulemaking proceedings. These provisions relate
to:
Multiple Metrics: The past two administrations have disagreed
on whether DOE may set more than one standard for a product.
For quite a few products Congress has imposed more than one
standard for a product. This provision clarifies that DOE may
set such standards, but provides a higher bar for setting such
standards for residential air conditioners. This provision,
without the air conditioner provision, passed both the House
and Senate in 2007 but was left out of EISA at the last minute.
With this air conditioner provision, it should be adopted this
year.
Criteria for Proscribing New or Amended Standards: For many
years, new and revised efficiency standards have been based on
seven criteria described in the law. This provision would add
an eighth criteria--the net energy, environmental, and economic
impacts of any smart grid technologies that are incorporated
into covered products. Such technologies can provide
significant benefits, in appropriate applications, but not all
applications are appropriate. This provision was included by
the House in ACES and the NEEEA provision defines and improves
upon the House draft. This provision also expands, clarifies,
and refines the rebuttable presumption test in existing
legislation and clarifies that the economic analysis of
standards should look at the impacts of energy standards on
energy prices. For example, DOE has found that higher furnace
standards save enough natural gas that these standards can
slightly lower natural gas prices for all customers, providing
benefits for all U.S. consumers and businesses. Since NEEEA was
introduced, we have had further discussions with several trade
associations and now developing a few refinements to the smart
grid language, which will be provided to Committee staff
shortly.
State Performance-Based Building Codes: Under present law,
states with performance-based building codes must use minimum-
efficiency equipment when developing code requirements.
Performance-based codes provide an overall level of performance
and permit many paths for reaching these goals (e.g., more
insulation, better windows, reduced air infiltration, or
improved equipment). But when equipment is limited to only
federal minimums, some states are finding they can't set strong
enough codes to meet their energy and climate goals. Also, this
part of federal law creates a loophole in performance-based
codes, as builders exceeding federal minimums can install less
insulation, even though insulation lasts for the life of the
building while equipment lasts for only one to two decades.
This provision allows states greater flexibility in
performance-based codes to address equipment that is covered
under federal appliance standards. This provision would allow
states to use covered products with efficiency levels higher
than the federal minimum in formulating their building codes,
while keeping the framework of preemptive federal standards,
and in the case of any prescriptive codes, requiring that codes
provide at least one pathway for meeting codes using equipment
at federal minimum efficiency levels.
Removing the Catch-22 from the State Waiver Petition Process:
Under current law, federal standards preempt state standards,
unless a state submits and DOE approves an application for
exemption from preemption. Such an application must demonstrate
that ``such state regulation is needed to meet unusual and
compelling State or local energy or water interests'' and that
such regulation ``will not significantly burden the
manufacturing, marketing, distribution, sale or servicing of
the covered product on a national basis.'' The detailed
requirements for states to get waivers from federal preemption
include submittal of information that may be obtainable only
from manufacturers, who may oppose the waiver. The amendment
would prevent DOE from denying a state a waiver from preemption
for failing to provide information that manufacturers refuse to
make available to the state. The amendment would also limit DOE
from denying waivers if states do not have a formal state
energy plan, provided the waiver petition is subject to an
opportunity for public comment in-state. Even with these
amendments, states would still have a difficult case to make,
but these amendments at least make it possible to make the
case.
DOE Collection of Key Data for Making Standards Decisions:
The distribution of efficiency levels among products sold is a
key piece of information for establishing new standards;
however, DOE has sometimes failed to obtain such data in
developing new rules. DOE usually asks for such information,
but manufacturers sometimes decline to provide it. The
amendment would require DOE to conduct a rulemaking to
determine what data manufacturers must submit, inclusive of
efficiency performance data, to enhance DOE decision making.
DOE would decide how often to collect data, ranging from
annually to once every three years. This new data collection
would be coordinated with existing state and federal data
collection. Existing law includes provisions to protect
confidential data. Improved data will help DOE's decision-
making process for standards, and will also aid other programs
such as ENERGY STAR. We are now discussing a few small
refinements to this section with AHRI and will provide these to
Committee staff shortly.
State Authority to Seek Injunctive Enforcement: Compliance
with federal standards is essential for achieving the expected
energy savings. Under current law, several unnecessary and
burdensome restrictions are placed on the ability of state
attorneys general to enforce federal standards within the
state's own borders. There is no federal budget allocation for
enforcement actions and, until the last few months, no
significant federal enforcement was taking place. This
amendment would allow a state to bring its expertise and
resources to bear on compliance by enabling states to seek
injunctive enforcement of federal standards in federal court on
an equal footing with the federal government, provided the
federal government is given proper notice and has not already
brought action to address the same violation. All provisions of
federal law apply. A similar provision was included in EISA for
general service incandescent lamps. State ability to enforce
federal standards should be extended to all regulated products.
Accelerated Adoption of Consensus Test Methods: EISA
established a process by which DOE can adopt on an accelerated
basis standards recommended by a group of broadly-
representative stakeholders provided no other party raises
objections that DOE determines require a more lengthy review
process. This bill would allow this same accelerated process
for adoption of similar consensus recommendations with respect
to test methods.
Other Provisions
NEEEA also contains the following additional provisions that we
support:
New standards for heat pump pool heaters (following standards
contained in ASHRAE standard 90.1-2007, addendum y). There have been
federal standards for gas-fired pool heaters for many years. These will
be the first standards for efficient electric pool heaters. One missing
agreement in the bill is a schedule for revising this standard. ACEEE
and AHRI agree that this standard should be revised in parallel with
the existing pool heater standard. Recommended legislative language
will be provided to Committee staff shortly.
External power supplies and security equipment. EISA enacted new
standards on external power supplies (the little black boxes at the end
of many power cords), including standards for both no-load energy use,
and for energy use when the product is in use. In the case of security
equipment, the equipment is constantly in use. NEEEA contains a
provision, negotiated with the Security Industries Association, that
exempts external power supplies used with security equipment from the
no-load standard until July 1, 2017. By then we expect all power
supplies on the market to meet the no-load standard and this exemption
will no longer be needed.
water dispensers, hot food holding cabinets, and electric spas
S. 3054 (introduced by Senator Menendez) establishes federal
standards for three additional products--bottle-type drinking water
dispensers, commercial hot food holding cabinets, and portable electric
spas. The proposed standards for all three products have been adopted
in California, Connecticut, and Oregon, and were included in the House-
passed ACES bill. In addition, Maryland, New Hampshire, Rhode Island,
and the District of Columbia have adopted the proposed standards for
bottle-type water dispensers and commercial hot food holding cabinets,
and Arizona and Washington have adopted the proposed standard for
portable electric spas. We urge this Committee to include S. 3054 in
any new standards bill it reports out. All of these standards are cost-
effective to consumers, as shown in the table below. In subsequent
sections I briefly discuss each of these three products individually.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Commercial Hot Food Holding Cabinets
Hot food holding cabinets are used in hospitals, schools, and other
applications for storing and transporting food at a safe serving
temperature. They are freestanding metal cabinets with internal pan
supports for trays. Most are made of stainless steel and are insulated;
however, there are some models that are non-insulated and are often
made of aluminum. The main energy-using components include the heating
element and the fan motor.
The ENERGY STAR specification sets a maximum idle energy rate for
hot food holding cabinets of 40 Watts per cubic foot of measured
interior volume. Appropriate insulation in hot food holding cabinets is
the key mechanism to meet this specification. Insulated cabinets also
have the advantage of quick preheat times, less susceptibility to
ambient air temperatures, and a more uniform cabinet temperature. The
recommended maximum idle energy rate translates to a 76% annual energy
savings of 1,815 kWh relative to a basic, inefficient model. These
energy savings cover the estimated additional cost of more efficient
units ($453) within 3 years. EPA has estimated that as of 2008, 79% of
the market met the proposed standard.\4\
---------------------------------------------------------------------------
\4\ U.S. Environmental Protection Agency. 2009. ENERGY STAR Unit
Shipment and Market Penetration Report, Calendar Year 2008 Summary.
Washington, DC: U.S. Environmental Protection Agency.
---------------------------------------------------------------------------
In December 2004, the California Energy Commission adopted this
level as a statewide minimum standard, effective January 2006.
Subsequently the same standard has been adopted in Connecticut,
Maryland, New Hampshire, Oregon, Rhode Island, and the District of
Columbia. S. 3054 would adopt this standard as a federal standard.
The House bill and S. 3054 both limit this standard to units with
an internal volume of 8 cubic feet or more. We have discussed this
proposal with the relevant trade association, the North American Food
Equipment Manufacturers, and they have indicated support for this
provision in an email to Committee staff.
Portable Electric Spas (Hot Tubs)
Portable electric spas are self-contained hot tubs. They are
electrically heated and are popularly used in homes for relaxation and
therapeutic effects. The most popular portable spas hold between 210
and 380 gallons of water; however, some models can hold as much as 500
gallons. ``In-ground'' spas are not included in this category.
Over half the energy consumed by a typical electric spa is used for
its heating system. Heat is lost directly during use and through the
cover and shell during standby mode. Improved covers and increased
insulation levels are key measures to improving efficiency and can
decrease standby energy use by up to 30% for a spa of average-to-low
efficiency. Another measure is the addition of a low-wattage
circulation pump or improvements to pump efficiency that would
generally save 15% of standby energy consumption of an average-
efficiency spa. Automated programmable controls, which would allow
users to customize settings based on predicted usage patterns, are a
third measure to improve efficiency and could save roughly 5% of a
spa's standby energy consumption.\5\
---------------------------------------------------------------------------
\5\ Ibid.
---------------------------------------------------------------------------
In December 2004, the California Energy Commission (CEC) adopted a
maximum standby energy consumption standard of 5 (V\2/3\) Watts for
portable electric spas where V = the total spa volume in gallons and 2/
3 means to the two-thirds power. Standby energy consumption represents
the majority (75%) of the energy used by electric spas and refers to
consumption after the unit has been initially brought up to a stable
temperature at the start of the season and when it is not being
operated by the user. The energy consumption calculation (V\2/3\) used
by CEC approximates total spa surface area, which is directly related
to standby energy use. A maximum standby energy requirement indexed to
total spa surface area thus requires spas of all sizes to be equally
efficient.
The California standard is a modest initial effort and is probably
met by the majority of spas now being sold. CEC estimates that the
products meeting the standard cost $100 more than basic models. At
national average energy prices, this additional cost is covered within
4.3 years;\6\ however, the payback period varies considerably with
regional temperatures and energy prices. For example, in New England
states, with cold winters and higher than average energy prices, the
payback is between 2.1 and 2.8 years. In warmer climates with lower
energy costs, the payback is between 4 and 5 years.\7\
---------------------------------------------------------------------------
\6\ Ibid.
\7\ Ibid.
---------------------------------------------------------------------------
In 2007, Connecticut and Oregon subsequently adopted the California
standard, and in 2009 Arizona and Washington also followed suit. We
have discussed this standard with the relevant trade association, the
Association of Pool & Spa Professionals (APSP), and worked with them to
develop and agree to a number of refinements to the House legislative
language. These refinements were incorporated into S. 3054. With these
refinements, APSP has indicated support for this provision in an e-mail
message to Committee staff.
We have one small clarifying technical amendment to S. 3054 that is
provided in the appendix to my testimony.
Bottle-Type Water Dispensers
Bottled water dispensers are commonly used in both homes and
offices to store and dispense drinking water. Designs include those
that provide both hot and cold water and those that provide cold water
only. In 2000, the EPA issued a voluntary ENERGY STAR performance
specification for standby energy of 1.2 kWh per day and 0.16 kWh per
day for ``hot and cold'' dispensers and ``cold only'' dispensers,
respectively. ``Hot and cold'' water dispensers tend to be much less
efficient than ``cold only'' because they must maintain water tanks at
two temperatures in a small space. The greatest factor determining
energy efficiency is insulation of the water reservoirs. Older models
of ``hot and cold'' dispensers often do not have insulated hot water
tanks, which increases heat dissipation and standby energy waste.
Adding insulation between the tanks and increasing existing insulation
levels can reduce standby energy waste. A Pacific Gas & Electric Co.
report found that a reduction from the baseline ``hot and cold''
dispenser daily energy consumption of 1.93 kWh to the proposed 1.2 kWh
would save nearly 38% of annual energy consumption. The slight cost
(about $12) to improve a basic unit to meet the proposed standard would
be earned back in lower energy costs within about 6 months at national
average energy prices. EPA data indicate that just over 40% of water
dispensers sold meets the ENERGY STAR specification.\8\
---------------------------------------------------------------------------
\8\ Nadel, et al. 2006. Leading the Way: Continued Opportunities
for New State Appliance and Equipment Efficiency Standards. Washington,
DC: American Council for an Energy-Efficient Economy..S. Environmental
Protection Agency. 2009. ENERGY STAR Unit Shipment and Market
Penetration Report, Calendar Year 2008 Summary. Washington, DC: U.S.
Environmental Protection Agency.
---------------------------------------------------------------------------
In December 2004, the California Energy Commission adopted the
ENERGY STAR standard for ``hot and cold'' dispensers as a mandatory
standard, affecting units sold after January 1, 2006. Subsequently the
same standard has been adopted in Connecticut, Maryland, New Hampshire,
Oregon, Rhode Island, and the District of Columbia. We recommend that
this same standard be adopted as a federal standard, as contained in S.
3054.
The trade association for this product is the International Bottled
Water Association (IBWA). They are reviewing this proposal now. We have
discussed this proposal with General Electric and Oasis International,
two of the major manufacturers of this equipment, and both have
indicated support for this standard. The General Electric support is
based on a change to the House bill that is incorporated into S. 3054
of establishing a slightly less-stringent standard for units with a
refrigerated compartment.
green gaming act
S. 1696, introduced by Senator Menendez, would require the
Secretary of Energy to conduct a study of video game console energy use
and opportunities for energy savings and, upon completion of the study,
make a determination of whether minimum efficiency standards for video
game consoles are warranted. If the Secretary determines that standards
may be warranted, a full rulemaking then ensues. If the Secretary makes
a negative determination and no standards are established, a follow-up
study must be conducted within 3 years of the initial determination. We
support this bill and its inclusion in any appliance standards bill
reported out of the Committee.
The study and determination required by S. 1696 is timely. Recent
growth in sales and use of video game consoles along with the
increasing power demands of popular gaming systems and typical usage
patterns make gaming one of the leading contributors to the growth in
household energy consumption. A recent study by the Natural Resources
Defense Council\9\ estimates the video game consoles found in more than
40% of U.S. homes consume some 16 billion kWh of electricity.
Opportunities for energy savings from more efficient components and
designs and incorporation of advanced power management features could
cut gaming power use by more than half. These preliminary estimates
suggest the need for more in-depth study of video game electricity
consumption, technical options for improving their energy efficiency,
and whether standards are warranted for these products.
---------------------------------------------------------------------------
\9\ Natural Resources Defense Council. 2008. Lowering the Cost of
Play: Improving the Energy Efficiency of Video Game Consoles. November.
---------------------------------------------------------------------------
Two trade associations have commented on this bill. My
understanding is that the Entertainment Software Association supports
the bill, while the Consumer Electronics Association opposes it. In
this situation, this Committee has a long-tradition of directing DOE to
study an issue and determine the best course of action. S. 1696 directs
DOE to study the issue, and only proceed with standards if they are
warranted. We believe S. 1696 follows previous Committee precedents and
should be favorably reported out.
water heater rating improvement act
S. 2908, introduced by Senators Kohl, Corker and Feingold, would
require the Secretary of DOE to quickly amend the efficiency descriptor
and accompanying test methods for water heaters covered by federal
standards. The efficiency of residential water heaters is determined by
a test procedure in 10 CFR Part 430, Energy Conservation Program for
Consumer Products: Test Procedure for Water Heaters, which was
developed to evaluate the relative efficiency of tank water heaters,
the ubiquitous technology at the time. Unfortunately, experience has
documented that this test procedure is flawed in that it gives biased
results when extended to newer technologies, such as tankless water
heaters. The current test uses six long hot water ``draws,'' when in
fact field data show that about 40 draws, most quite short, are more
typical. Tankless units are more efficient under the test procedure
than with predominantly short draws. In addition, residential and
commercial units are rated with totally different test procedures,
which make it difficult to rate and compare units that might be rated
for commercial use but used in a large residence (or visa versa). The
rating method deficiencies cause problems for incentive programs such
as tax credits because it is difficult to estimate energy savings and
environmental benefits, making it difficult to set appropriate
incentives. ACEEE has worked with manufacturers, AHRI, ASHRAE, and NIST
to broaden understanding of the issues and launch work to develop a
better rating method and test procedure. S. 2908 directs DOE and NIST
to accelerate this work, so that an improved test procedure can be
published within 180 days of enactment and take effect one year later.
Our understanding is that work is already underway, which should make
achieving this ambitious schedule possible. A few clarifications to S.
2908 are now being developed in coordination with manufacturers and
will be provided to Committee staff shortly.
energy savings
ACEEE has analyzed most of the efficiency standards discussed
above. Overall, we estimate that these standards will reduce U.S.
annual electricity use by about 20 billion kWh in 2020 and 56 billion
kWh in 2030. The 2030 electricity savings are equivalent to the amount
of energy generated in a year by 14 typical 600-MW coal-fired baseload
power plants. These standards will also reduce natural gas and propane,
including nearly 50 trillion Btu of these fuels in 2020 and more than
100 trillion in 2030. The 2030 savings are enough to heat 1.8 million
average American homes for a year. These standards will also reduce
2030 greenhouse gas emissions by 39 million metric tons of carbon
dioxide, equivalent to taking 7 million cars off the road for a year.
Further details on our savings estimates are provided in the table
below.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
recommended additions
These four bills contain many worthy additions to the federal
standards program. But as the Committee proceeds to markup, we
recommend that a couple of items be added, as discussed below.
Technical Corrections
We recommend that the Committee pass the appliance, lighting, and
commercial product standards technical amendments enacted by the House
of Representatives last summer. These were passed as Section 161(a) and
Section 162 of Subtitle G\10\ of the American Clean Energy and Security
Act (ACES). The Energy Policy Act of 2005 and the Energy Independence
and Security Act of 2007 enacted many new standards that will result in
very large energy savings in the years ahead. Unfortunately, both laws
contained serious drafting errors such as multiple non-conforming
amendments to underlying law and language that was not adequately
clear. Congress needs to act to correct these errors because some of
the affected standards are scheduled to take effect soon. For example,
the critical new standards for motors and general service lighting
products require technical amendments and those standards take effect
starting later this year and in 2012, respectively. We have worked
together with the affected trade associations to reach consensus on
these technical amendments. Since passage of the technical amendments
as part of the House bill last summer, we have discovered two minor
amendments to that language are needed. Therefore, we recommend that
the Committee pass the technical amendments package contained in
Subtitle G of ACES with two small additional amendments. These are
provided in the appendix to my testimony.
---------------------------------------------------------------------------
\10\ Section 161(b) concerns technical amendments related to other
EISA provisions not related to standards.
---------------------------------------------------------------------------
Service-Over-Counter Packaged Refrigeration Systems
The Energy Policy Act of 2005 established efficiency standards for
commercial packaged refrigeration equipment. One small category of
specialized equipment was included with the same efficiency standards
as larger units. This special category has display refrigeration
underneath and a service counter on top. These are commonly used in
deli's, bakeries, and lunch establishments. Manufacturers tell us that
the current standards cannot be met with existing equipment. We have
worked with manufacturers and their trade association, AHRI, to develop
an alternative standard that is based on standards recently set by DOE
for related equipment (the DOE standards are for a more efficient type
of service-over-counter equipment that has remote rather than built-in
compressors). Specific legislative language will be provided to
Committee staff shortly.
Best-in-Class Appliance Deployment Program (BICAD)
The House ACES bill includes a provision (section 214) that
provides rebates to retailers for sales of very high-efficiency
equipment (top 10% of current models) and to manufacturers of even more
efficient equipment. The provision helps encourage retailers to sell
the best equipment, and encourages manufacturers to develop even more
efficient equipment. When funded, the provision is designed to replace
the current manufacturer tax credit for high-efficiency appliances. As
currently written, the provision is dependent on future appropriations.
We think this is a promising program, but details are important. We
do not support the House provision because many important details are
missing (e.g., a focus on cost-effectiveness), other details are wrong
(e.g., qualifying criteria are not revised frequently enough), and some
incentives are overly generous and unlikely to be cost-effective to
taxpayers or consumers.
We have been working with the BICAD coalition and are well along in
developing an improved bill. Some critical details still need to be
worked out (e.g., length of lock-in periods between revisions and
incentive levels), but we are optimistic that a provision acceptable to
all can be finalized in the next few weeks. Regarding lock-in periods,
we need to balance the desire of retailers and manufacturers for long
lock-in periods with the desire of consumers and taxpayers to revise
standards when specific efficiency levels are no longer ``best-in-
class'' (e.g., we don't want to face the problem that ENERGY STAR has
had to address of revisions not happening frequently enough). With
regard to incentive levels, we believe that these should be capped at
the value of the lifetime energy, water, and peak demand savings that
result from this equipment relative to average equipment being sold. In
all likelihood, a provision meeting these criteria can be negotiated
soon and provided to this Committee for consideration.
conclusion
The four bills that are covered by this hearing all build on past
bipartisan appliance standards bills and we support all four of them.
Collectively these bills will, by 2030, reduce U.S. annual electricity
use by about 56 billion kWh, equivalent to the amount of energy
generated in a year by 14 typical 600-MW coal-fired baseload power
plants. These standards will also reduce 2030 natural gas and propane
use by more than 100 trillion Btu, enough to heat 1.8 million average
American homes for a year. In addition, these standards will reduce
2030 greenhouse gas emissions by 39 million metric tons of carbon
dioxide, equivalent to taking 7 million cars off the road for a year.
We have negotiated the provisions in S. 2908, 3054, and 3059 with
relevant trade associations and would call each of these consensus
proposals. Achieving such consensus requires a few small modifications
to the bills as filed; these are either listed in the appendix to my
testimony or will be provided to Committee staff shortly. In the case
of S. 1696, one trade association is supportive and another is not, but
this bill only requires a study. This Committee has a long history of
directing DOE to study the issue when consensus cannot be reached.,. S.
1696 falls into this tradition.
We recommend that all of these bills be grouped together and
reported out of Committee on a bipartisan basis. We also recommend that
technical corrections to recent appliance standards legislation be
incorporated in this bill, including establishment of separate
standards for service-over-counter refrigerators. We would be happy to
assist Members and Committee staff in working out the details.
The federal appliance and equipment efficiency standards program is
a great energy efficiency success story, with Congress adopting new
standards in 1987, 1988, 1992, 2005, and 2007. The ACELA bill, reported
out last year, adds consensus efficiency standards on several products.
The four bills before the Committee today should be reported out,
combined with ACELA, and hopefully enacted by Congress in the next few
months. This Committee has worked diligently in this direction and we
thank you.
This concludes my testimony. Thank you for the opportunity to
present these views.
appendix: specific legislative changes
To S. 3059
On page 3, line 3, delete the word ``may''.
RATIONALE: Congress adopted water-efficiency standards for these
products in the Energy Policy Act of 2005 and EISA 2007; ``may'' no
longer applies. The relevant trade association, the Association of Home
Appliance Manufacturers (AHAM) has agreed to this change.
Since ``smart'' end-use appliances and equipment can interact with
the grid in unexpected ways, NEMA suggests that DOE consult with NIST,
which is charged by Congress to coordinate Smart Grid communications
standards development. ACEEE concurs. Potential specific references to
EISA 2007:
Page 64 Line 8 ``(7) INCORPORATION OF SMART GRID
TECHNOLOGIES.--The Secretary, in consultation with the Director
of the National Institute of Standards and Technology, may
incorporate smart grid technologies or capabilities into
standards under this section, including through--
Page 65 Line 4 ``(ii) other smart grid goals, including those
as specified in Sec. 1301 of the Energy Independence and
Security Act of 2007 (15 USC 17381).''.
Additional amendments to be provided shortly:
Schedule for revising new heat pump pool heater standard (AHRI and
ACEEE)efinements to provisions on implementation of regional standards
(HARDI, AHRI, NEMA, and ACEEE)
Refinements on smart grid (AHAM, AHRI, GridWise, and ACEEE)
To S. 3054
On page 4, lines 1-2, the bill reads, ``(B) INCLUSIONS.--The term
`portable electric spa' includes--.'' These inclusions are typical
characteristics of a portable electric spa, but are not obligatory
features. In order to avoid confusion, we recommend revising this
language to read ``(B) INCLUSIONS.--A `portable electric spa' may
include--.''
To S. 2908
Amendments to be provided shortly (AHRI and ACEEE)
recommended additions
Technical amendments
Add all of the technical amendments on appliance and equipment
efficiency standards contained in the House ACES bill. These were
originally developed by Senate Energy Committee staff and given to the
House. They should also be adopted by the Senate. In addition, two
other technical amendments are needed as follows:
(1) In section 161(a)(3), ``(42 U.S.C. 6313(a)(1))'' should
be replaced by ``(42 U.S.C. 6314(a)(1))''. RATIONALE: Provide
the correct U.S. Code reference.
(2) In section 161(a)(12), the phrase ``following lamp
efficacy, new maximum wattage, and CRI standards:'' should be
replaced with ``requirements shown in the tables:'' RATIONALE:
The tables include minimum product life requirements for some
products in addition to the listed requirements.
Furthermore, to avoid the need for yet another round of technical
amendments after this one, there are a couple of places where S. 3059
amends the same section of law as the House technical amendments. These
amendments will need to be reconciled as noted below:
(1) Section 7(a) of the pending bill modifies the same
section of law as section 161(a)(2) of the House-passed
technical amendments.
(2) The paragraph numbering in Section 6(a)(3) of the pending
bill will need to be reconciled with the corrections carried
out by Section 161(a)(6) of the House-passed technical
amendments.
(3) Section 5, paragraph 2 of the pending bill and Section
161(a)(16) of the House-passed technical amendments both
correct duplicate paragraph numbering in section 332 of the
underlying law. They should be reconciled.
Service-Over-Counter Self-Contained Commercial Refrigeration Systems
Suggested language will be provided shortly by AHRI and ACEEE.
The Chairman. Thank you very much.
Mr. Yurek.
STATEMENT OF STEPHEN YUREK, PRESIDENT AND CEO, AIR-
CONDITIONING, HEATING, AND REFRIGERATION INSTITUTE (AHRI)
Mr. Yurek. Thank you, Mr. Chairman, Senator Murkowski.
I am pleased to be here today to discuss our support for S.
3059 and S. 2908. My name is Steve Yurek, and I am the
president and CEO of the Air Conditioning, Heating, and
Refrigeration Institute. This is a trade association that
represents the manufacturers of heating, cooling, water
heating, and commercial refrigeration equipment.
To begin, I want to commend the committee and you--Mr.
Chairman, Senator Murkowski--for these bills. We appreciate the
opportunity to work closely with your staffs while they were
being crafted, and we appreciate their willingness to take our
suggestions and concerns into account.
I will briefly comment on the key provisions of these bills
that we support. First, we strongly support S. 2908. This
legislation requires the Department of Energy to conduct a
rulemaking to consider the revision of its residential water
heater test procedure. Updating the test procedure will ensure
the accurate efficiency ratings for these products and will
ultimately enable true energy savings.
Second, we are pleased that you included in S. 3059 the
consensus agreement establishing for the first time an
efficiency standard for heat pump pool heaters. This standard
will provide stability in the marketplace by leveling the
playing field to enable all manufacturers to compete fairly.
I also want to let you know that we recently reached an
agreement with the advocacy groups to establish a Federal
efficiency standard for a specific type of commercial
refrigeration product known as service over-the-counter. This
is the type of product from which you might, for example, grab
a sandwich before you board an airplane.
This standard is necessary because legislation enacted by
Congress in 2005 establishing Federal efficiency standards for
commercial refrigeration products overlooked this product
category. We will soon submit the agreement along with proposed
legislative language to your committee for consideration. These
agreements are excellent examples of industry and advocacy
groups working together to achieve a common goal.
Finally, I want to express AHRI's support for provisions in
S. 3059 that implement our consensus agreement on residential
heating and cooling equipment. This agreement is another great
example of us working together to save energy and improve the
environment.
I would also like to affirm the statement you made when
introducing the bill, Mr. Chairman. When discussing our
consensus agreement, you said, ``It is a testament to what can
be achieved for the Nation when interest groups work together
with a commitment to the common good.'' We are happy to have
been able to do this for the common good.
Last October, residential heating and cooling equipment
manufacturers joined with the environmental community to forge
an agreement on energy efficiency standards that will have a
significant impact on U.S. energy demand for decades and that
will protect the environment. We are pleased that the major
provisions of this agreement are included in S. 3059.
The consensus agreement, which will begin to take effect in
2013, assumes final passage of this legislation, represents a
major step forward in the Nation's drive to increase energy
efficiency and shows that it is possible for industry and
energy efficiency advocates to move beyond acrimonious debates
and work together to address energy and environmental concerns.
It establishes efficiency standards for residential
furnaces in 2 regions and for central air conditioners and heat
pumps in three regions. In hotter areas like the Southeast and
Southwest, the new standards for furnaces are appropriate for
that climate. The same is true in reverse for air conditioners.
In this way, the consensus agreement lays the groundwork for
significant energy savings and makes heating or cooling homes
more cost effective regardless of climate.
The agreement also contains an important provision that
will allow the next generation of homes to be more energy
efficient by providing States the option of adopting building
codes for new construction with more stringent energy
efficiency levels than they can under existing law.
In the past, equipment manufacturers and advocates would
have fought over these regulations through rulemakings.
Together, we have found a compromise that works and saves
energy and protects the environment. It took about a year, but
the results, once the agreement is fully implemented, will save
the Nation about 3.7 quadrillion BTUs, or quads, of energy
between 2013 and 2030. That is enough to provide for the energy
needs of 18 million households for a year.
These energy savings will result in an annual greenhouse
gas emission reduction of 23 million metric tons of
CO2 in 2030, an amount equal to that produced by
approximately 4 million cars every year.
Finally, this agreement will ultimately save consumers
about 13 billion in today's dollars, even considering the
increased cost of more efficient equipment.
I will end with a plea. For this historic agreement to
become reality, it must be enacted into law because some of the
provisions currently the DOE does not have the authority to
enact, such as the building code provisions. So if you do not
act, these provisions will not become a reality.
Again, I want to thank the committee and your staff for
their hard work in putting this bill together, and I want to
thank you for the opportunity to testify.
[The prepared statement of Mr. Yurek follows:]
Prepared Statement of Stephen Yurek, President and CEO, Air-
Conditioning, Heating, and Refrigeration Institute (AHRI)
Mr. Chairman and Members of the Committee:
I am pleased to be with you today to discuss our support for S.
3059 and S. 2908. My name is Stephen Yurek, and I am president and CEO
of the Air-Conditioning, Heating, and Refrigeration Institute, or
AHRI--the trade association that represents manufacturers of heating,
cooling, water heating, and commercial refrigeration equipment.
To begin, I want to commend the committee and you, Mr. Chairman,
for these bills. We appreciate the opportunity to work closely with
your staff while they were being crafted, and we appreciate their
willingness to take our suggestions and concerns into account. I will
briefly comment on the key provisions of these bills.
First, we strongly support S. 2908. This legislation requires the
Department of Energy to conduct a rulemaking to consider the revision
of its residential water heater test procedure. Updating the test
procedure will ensure accurate efficiency ratings for these products
and will enable true energy savings.
Second, we are very pleased that you included in S. 3059 the
consensus agreement establishing for the first time an efficiency
standard for heat pump pool heaters. This standard will provide
stability in the marketplace by leveling the playing field to enable
all manufacturers to compete fairly. The agreement is also an excellent
example of industry and advocacy groups working together to achieve a
common goal, in this case more energy efficient heat pump pool heaters.
Finally, I want to express AHRI's support for provisions in S. 3059
that implement our consensus agreement on heating and cooling
equipment--this agreement is another great example of industry and
advocacy groups collaborating to save energy and improve the
environment. I would also like to associate AHRI with the statement you
made when introducing the bill, Mr. Chairman. When discussing the
efficiency standard consensus agreement that's included in the bill,
you said, and I quote, ``It is a testament to what can be achieved for
the nation when interest groups work together with a commitment to the
common good.'' We are happy to have been able to do this for the common
good.
Last October, residential heating and cooling equipment
manufacturers teamed up with the environmental community to forge an
agreement on energy efficiency standards that will have a significant
impact on U.S. energy demand for decades and that will help protect the
environment. We are very pleased that the major provisions of this
agreement have been included in S. 3059.
The consensus agreement, which will begin to take effect in 2013--
assuming final passage of this legislation--represents a major step
forward in the nation's drive to increase energy efficiency and shows
that it is possible for industry and energy efficiency advocates to
move beyond acrimonious debates and work together to address energy,
environmental, and economic problems.
It establishes efficiency standards for residential furnaces in two
regions and for central air conditioners, and heat pumps in three
regions. In hotter areas, like the southeast and southwest, the new
standards for furnaces are appropriate for that climate. The same is
true, in reverse, for air conditioners. In this way, the consensus
agreement lays the groundwork for significant energy savings and helps
make heating or cooling homes more cost-effective, regardless of
climate.
The agreement also contains an important provision that would allow
the next generation of homes to be more energy efficient by providing
states the option of adopting building codes with more stringent energy
efficiency levels than they can under existing law. n the past,
equipment manufacturers might have simply opposed, on economic and
marketplace grounds, stricter standards for energy use. At the same
time, advocates might have sought stronger standards and, if
unsuccessful, filed suit over efficiency standards they didn't find
stringent enough. But at a time when government regulatory policies and
an unpredictable economic climate have created uncertainty in the
marketplace, our two groups sat down and worked things out
cooperatively.
It took about a year, but the results, once the agreement is fully
implemented, will save the nation about 3.7 quadrillion Btu (quads) of
energy between 2013 and 2030. That's enough to provide for the energy
needs of 18 million households for a year. These energy savings will
result in annual greenhouse gas emission reductions of 23 million
metric tons of CO2 in 2030, an amount equal to that produced
by approximately 4 million cars every year.
Finally, this agreement will ultimately save consumers about $13
billion in today's dollars, even after considering the increased cost
of more efficient equipment.
I will end with a plea: For this historic agreement to become
reality in the national marketplace, it must be enacted into law. If we
cannot do it in this bill, we must do it in another. Here's why:
Absent firm direction from Congress on this, the Department of
Energy is continuing its rulemaking on the next iteration of efficiency
standards for residential central air conditioners, heat pumps, and
furnaces. While the Department can implement portions of the agreement,
other portions such as the building code provisions require
Congressional action. he new building code provisions in this agreement
must be enacted by Congress, as DOE currently does not have the
statutory authority to promulgate them. If Congress does not act, those
provisions will not become reality.
By taking the initiative, we have potentially saved the Department
of Energy--and thus America's taxpayers--millions of dollars, and have
saved DOE staff countless hours of work--hours that can be spent on
other activities. I say ``potentially,'' however, because if Congress
does not move quickly to enact this agreement into law, those dollars
and man-hours will not be saved, and the effort we've collectively put
forth and the compromises we've made will be for naught. That would be
a sad thing for all of us, but particularly for taxpayers and for the
environment.
Again, I want to thank the Committee and your staff for the hard
work in putting this excellent bill together, and I thank you for the
opportunity to testify, Mr. Chairman.
addendum: fact sheet on air conditioner, furnace, and heat pump
efficiency standards agreement (essential components included in s.
3059)
The nation's leading manufacturers of residential central air
conditioners, furnaces, and heat pumps today signed an agreement with
the nation's leading energy efficiency advocacy organizations that will
establish new federal standards for those products.he agreement, which
involved months of intense negotiations, was signed by executives of
Air-Conditioning, Heating, and Refrigeration Institute (AHRI), the
American Council for an Energy Efficient Economy (ACEEE), Alliance to
Save Energy (ASE), the Natural Resources Defense Council (NRDC), the
Northeast Energy Efficiency Partnership (NEEP), the Appliance Standards
Awareness Project (ASAP) and the California Energy Commission (CEC),
the Northwest Power and Conservation Council (NWPCC), and more than a
dozen individual furnace and air conditioner manufacturers.
This momentous agreement strikes a balance between the desire for
greater state and regional flexibility and the need for a uniform
marketplace. It also accounts for the long term energy future of the
nation by allowing for more efficient systems to be installed in new
homes which will last for many decades to come. The parties that
reached this consensus agreement recognize that the time has to come to
change the status quo with regard to energy efficiency in the
residential built environment and believe this proposal represents a
tremendous leap forward towards a more energy efficient future.
The signatories agreed to jointly submit this proposal to Congress
and support its inclusion in the energy legislation currently under
consideration. The groups will also recommend that the Department of
Energy (DOE) promulgate a rule adopting the agreed upon regions and
efficiency standards, as authorized in current law.
Creating Regions
Under the agreement, the U.S. is divided into 3 regions: (1) the
north, comprised of states with population-weighted heating degree days
(HDD) equal to or greater than 5000; (2) the south, comprised of states
with population-weighted HDD less than 5000; and the southwest,
comprised of Arizona, California, Nevada, and New Mexico. The regions
are shown on the map:* The federal minimum energy efficiency standards
are shown in Table 1. In the north, most furnaces will be required to
have an efficiency of 90% or more, essentially requiring condensing
furnaces. This is a change from the current national standard of 78%.
In the south, central air conditioners will be required to have a SEER
of 14, up from the present national requirement of 13 SEER. Heat pump
and oil furnace standards will rise on a nationwide basis. The
standards apply to residential single-phase air conditioners and heat
pumps less than 65,000 Btu/h of cooling capacity (except through-the-
wall and small duct high velocity products), and single-phase
weatherized and non-weatherized forced-air furnaces (including mobile
home furnaces) below 225,000 Btu/h heat input. or split air
conditioners, minimum EER values (energy demand on a very hot day) also
are specified for the states of Arizona, California, Nevada, and New
Mexico.
---------------------------------------------------------------------------
* Map has been retained in committee files.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
SEER = seasonal energy efficiency ratio; EER = energy efficiency
ratio; HSPF = heating seasonal performance factor; AFUE = annual fuel
utilization efficiency.
In addition, under the agreement, DOE would be required to publish
a final rule not later than June 30, 2011, to determine whether
standards for through-the-wall and small duct high velocity air
conditioners and heat pumps should be amended. New standards would
apply to products manufactured on or after June 30, 2016.
Building Codes
The agreement would amend the Energy Policy and Conservation Act
(EPCA) to allow building codes to provide for building energy budgets
and baseline building designs to include covered equipment having an
efficiency greater than the federal minimum standard, up to specified
levels, as long as at least one option is made available to meet the
code through the use of covered equipment at the federally established
minimum level. The agreement sets new construction/major renovation
standards for each region that states may incorporate into their
building codes. These are summarized in Table 2.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
These requirements would not apply to simple one-for-one
replacement of products in existing buildings as long as the
replacement would not result in an increase in capacity of more than
12,000 Btu/h for central air conditioners/heat pumps or more than 20
percent for other covered products.
Implementation Timetable
The new standards will take effect in 2013 for non-weatherized
furnaces and in 2015 for air conditioners, heat pumps, and weatherized
furnaces.
The effective date for the next iteration of the above standards
will be:
January 1, 2019 for non-weatherized furnaces
January 1, 2022 for air conditioners/heat pumps and
weatherized furnaces (gas-packs).
Multiple Metrics
The agreement allows DOE in the future to use more than one
efficiency metric for a product. However, in the case of air
conditioners and heat pumps, the stakeholders agreed to work together
to try to negotiate future efficiency metrics, and DOE can act on its
own to establish new metrics only if the stakeholders cannot reach
agreement after a year of discussion.
Energy Equivalents
Between now and 2030, the agreement also will save 3.7 quadrillion
Btu of energy nationwide, which is equivalent to all the energy
consumed by approximately 18 million households in a single year, or
enough to meet the annual energy needs of either Georgia,
Massachusetts, Michigan, Missouri, North Carolina, or Virginia. The new
standards would raise the minimum efficiency of residential central air
conditioning systems by about 8 percent and furnaces by about 13
percent and would result in a 5 percent reduction of the total heating
energy load and a 6 percent reduction of the total cooling energy load
in 2030.
These energy savings will result in annual greenhouse gas emission
reductions of 23 million metric tons of CO2 in 2030, an
amount equal to that produced by approximately 4 million cars every
year.
Monetary Saving
The new standards are projected to save U.S. consumers about $13
billion in today's dollars between 2013, when the new standards begin
to take effect, and 2030--taking into account the incremental cost of
the more efficient equipment.
Engineering Data Release
High performance equipment works best and saves the most money when
matched to specific climates. To help contractors and consumers select
the most appropriate equipment, manufacturers will make two types of
information available in standard form, for use in electronic tools.
They will publish the Sensible Heat Ratio (SHR) at 82F, a measure of
the ability to remove moisture at part load. This is particularly
important in humid regions. And, they will provide equipment
performance data for each temperature bin. This will help software
developers and contractors recommend the equipment that is most
appropriate to very hot regions, for example.
Agreement Text
Full text of agreement can be found at www.ahrinet.org/content/
agreementonenergyefficientstandards_985.aspx
The Chairman. Thank you very much. Mr. Pitsor.
STATEMENT OF KYLE PITSOR, VICE PRESIDENT, GOVERNMENT RELATIONS,
NATIONAL ELECTRICAL MANUFACTURERS ASSOCIATION (NEMA)
Mr. Pitsor. Good morning, Mr. Chairman and Ranking Member
Murkowski.
I am Kyle Pitsor, vice president for Government relations
for the National Electrical Manufacturers Association. NEMA's
president and CEO, Evan Gaddis, couldn't be here today to
deliver our testimony due to surgery and sends his regrets.
NEMA is the trade association of choice for the electrical
industry, comprised of over 400 manufacturers, representing
about 350,000 jobs. For more than 8 decades, NEMA has been at
the forefront of developing electrical standards, promoting
electrical safety, and providing solutions to our country's
energy challenges.
It is my pleasure to provide our support for S. 3059, the
National Energy Efficiency Enhancement Act of 2010,
particularly section 6 on outdoor lighting. Because of the
significant energy utilized by outdoor lighting, manufacturers,
lighting designers, environmental advocates, and other
stakeholders spent countless hours over the past many months to
develop a consensus provision that is contained in this
legislation.
Back in March 2009, I had the opportunity to testify before
this committee. I noted that we felt the time was ripe for the
establishment of national energy efficiency standards for
outdoor lighting. I am, therefore, pleased to sit here today to
report that despite the complexities surrounding this
provision, including some doubts that a consensus could be
reached, we did arrive at a consensus provision that is
contained in section 6.
This provision would set efficiency standards for the
majority of pole-mounted outdoor lighting fixtures. As you
drive home today, if you look at the tall street and parking
lot lights illuminating the roadways, the parking lots, and
local streets, each of these lights will be affected on a
national level as a result of this legislation.
The standards set forth in three phases. The first phase,
or Tier 1, becomes effective upon 3 years after date of
enactment of this provision. It sets a light source efficiency
standard which also would limit sky glow and light trespass
into neighboring properties.
The Tier 2 standards would be developed through a
rulemaking process at the Department of Energy, and Tier 2
would become effective on January 1, 2016, or 3 years after the
final rule was published.
Finally, the Tier 3 standards would also be established
through a DOE rulemaking procedure effective on January 1,
2021.
In addition to the tiered standards, this legislation also
regulates the efficiency of 2 types of lamps that are primarily
used outdoors, and it would end the manufacture of general
purpose mercury vapor lamps in the year 2016.
I would now like to turn to several other provisions in the
legislation. First, NEMA supports provisions in section 4,
which clarifies the efficiency standards for Class A external
power supplies used in certain security and life safety alarm
systems.
Second, NEMA supports the amendments proposed to the
underlying statute that are contained in section 5. We believe
it is important that channel partners in the distribution and
sale of federally regulated products share the responsibility,
along with manufacturers, in making certain that consumers and
end-users receive the benefit of purchasing energy efficiency
products. We look forward to working with the committee and
other stakeholders on perfecting amendments to this provision.
Finally, I would like to talk a few minutes on section 7 on
smart grid. The inclusion of smart grid considerations in the
energy conservation title recognizes the role and potential of
logic-based intelligence and communications in efficiency.
Providing for the consideration of smart attributes in future
energy efficiency provisions is a forward-looking provision.
Attached to my testimony are several suggestions, modifications
we suggest to take into account the smart grid standards work
that is being managed by the National Institutes of Standards
and Technology, NIST, pursuant to Title 13 of the Energy
Security Act of 2007.
Mr. Chairman, NEMA members are excited about the innovation
opportunities and possibilities represented by this
legislation. NEMA is pleased to lend our support for this
legislation and the leadership shown by you and Ranking Member
Murkowski and your other colleagues in advancing this
legislation.
Thank you for the opportunity for NEMA to testify, and we
would be pleased to answer any questions.
[The prepared statement of Mr. Pitsor follows:]
Prepared Statement of Kyle Pitsor, Vice President, Government
Relations, National Electrical Manufacturers Association (NEMA)
Chairman Bingaman, Ranking Member Murkowski, and members of the
committee, my name is Kyle Pitsor. I am Vice President of Government
Relations for the National Electrical Manufacturers Association (NEMA).
I appreciate this opportunity to testify on the importance of this
significant legislation before the Committee.
NEMA is the trade association of choice for the electrical
manufacturing industry. It represents a global network of more than 400
large, medium, and small businesses that manufacture products used in
the transmission, distribution, control, and end-use of electricity,
including the lighting technologies. For more than eight decades, NEMA
has been at the center of developing electrical standards, promoting
electrical safety, and providing solutions to our country's energy
challenges.
It is my pleasure to provide our support for S. 3059, the National
Energy Efficiency Enhancement Act of 2010, particularly section 6,
Outdoor Lighting. This ground-breaking consensus provision will, for
the first time ever, set federal efficiency standards for pole-mounted
outdoor lighting.
In a 2007 Department of Energy report, it was estimated that
outdoor lighting consumes more than 178 terawatt-hours annually. This
is equivalent to the annual output of 25 nuclear power plants (1000 MW
each) or 42 coal-burning plants (600 MW each).
Because of the significant energy utilized by outdoor lighting,
lighting manufacturers, lighting designers, environmental advocates and
other stakeholders have spent countless hours over the past year
negotiating the details specified in the outdoor lighting provision
contained in this legislation. Back on March 19, 2009, I testified for
NEMA before this Committee noting that we felt the time was ripe for
the establishment of national energy efficiency standards for outdoor
lighting products, and noted that we hoped that a consensus proposal
could be negotiated for Congressional consideration. I am therefore
pleased to sit before you today to report that despite the complexities
surrounding this provision and the varying stakeholder interests,
including doubts by some that a consensus could be arrived at, that
Section 6 on outdoor lighting is a win-win consensus provision.
Section 6 would set efficiency standards for the majority of pole-
mounted outdoor lighting fixtures. To better understand the widespread
impact of this agreement, as you drive home today, look at the tall
street and parking lot lights illuminating the roadways, parking lots,
and local streets; each of these lights will be affected, on a national
level, as the result of this ground-breaking consensus.
Because of the multifaceted nature of this agreement, the standards
set forth require three phases, or ``tiers'' for respective efficiency
levels.
Three years from the enactment date of this provision, Tier 1 will
become effective. In this phase, light source efficiency, expressed as
minimum task lumen per watts (LPW), will be mandated. These LPW levels
are based on specific lighting characteristics, such as backlight, up-
light, and glare (BUG) ratings, which limit sky-glow and light trespass
into neighboring properties.
Tier 2 standards will be established by the Department of Energy
(DOE). Such standards must be published in a final rule by DOE no later
than January 1, 2013, or 33 months after enactment, whichever is later.
The requirements for Tier 2 become effective January 1, 2016, or 3
years after the final rule is published.
Finally, the Tier 3 standards will be established by DOE in a
rulemaking beginning January 1, 2015. Tier 3 standards are only set if
the DOE determines amended standards are necessary. If DOE determines
in favor of setting Tier 3 standards, a final rule must be published by
January 1, 2018, with an effective of January 1, 2021.
In addition to the tiered standards, this legislation regulates the
efficiency of two types of lamps that are primarily used outdoors.
After January 1, 2016, high output double-ended quartz halogen lamps (a
type of high-wattage incandescent lamp) must have a minimum efficiency
of 27 LPW for lamps with a minimum rated initial lumen value of 6,000
and a maximum initial lumen value of 15,000. Also, 34 LPW is required
for lamps rated with initial lumen value greater than 15,000 and less
than 40,000.
I earlier mentioned the significant energy used in outdoor
lighting. Should this provision be enacted, it is estimated that by
2030, the annual savings will range from 25 to 42 terawatt hours
(billion kWh) per year (equivalent to 3 to 6 nuclear power plants or 6
to 10 coal-fired plants)--and annual savings of $2.8 billion to $5.1
billion on energy costs.
I would now like to turn to several other provisions in the
legislation.
First, NEMA supports the provisions in Section 4, which clarifies
efficiency standards for Class A external power supplies for certain
security or life safety alarms. NEMA's signaling, protection, and
communications member companies have participated in addressing these
standards and their application to security alarm applications.
Second, NEMA supports the amendments proposed to the Energy Policy
and Conservation Act (EPCA) contained in Section 5 on ``Prohibited
Acts.'' We believe it is important that channel partners in the
distribution and sale of federally-regulated products share
responsibility in making certain that consumers and end-users receive
the benefit from purchasing energy-efficient products and equipment
that meet federal minimum efficiency standards. Today, EPCA places that
responsibility only on manufacturers and private labelers, which
creates a loophole when it comes to compliance in the marketplace. The
proposed language would ensure that all players in the manufacturing,
sales, and distribution channels have a responsibility.
Finally, I would like to touch upon Smart Grid (Section 7). The
inclusion of Smart Grid considerations in the energy conservation title
recognizes the role and potential of logic-based intelligence in
efficiency. Many devices today are approaching their theoretical
maximum efficiency--large motors and distribution transformers, for
example, are often 95 to 99 percent efficient. The next realm of
conservation will come from ``smart'' devices that are communication-
enabled and provide real-time cost and performance information to the
end-user. Providing for consideration of ``smart'' attributes in future
energy efficiency standards will also support our industry's efforts in
innovation and design for the next generation of products. Attached to
my testimony are several suggestions for modifications to the provision
to take into account the Smart Grid standards work that is being
managed by the National Institute of Standards and Technology (NIST)
pursuant to Title 13 of the Energy Independence and Security Act of
2007. We would be pleased to discuss these suggestions with the
Committee as the bill is considered.
Mr. Chairman, NEMA members are excited about the innovation
possibilities and energy efficiency opportunities this legislation will
support. Our members are leaders in providing energy-efficient
solutions to meet our nation's energy challenges through our continuous
research and development into new products and technological features.
I am pleased to lend our support for this legislation and the
leadership shown by you and your colleagues in advancing this bill.
Thank you, and I would be pleased to respond to any questions.
proposed language to section 7 on smart grid
Since ``smart'' end-use appliances and equipment can interact with
the grid in unexpected ways, NEMA suggests that DOE consult with NIST,
who is charged by Congress in coordinating Smart Grid communications
standards development. Potential specific references to EISA 2007:
Page 64 Line 8 ``(7) INCORPORATION OF SMART GRID
TECHNOLOGIES.--The Secretary, in consultation with the Director
of the National Institute of Standards and Technology, may
incorporate smart grid technologies or capabilities into
standards under this section, including through--
Page 65 Line 4 ``(ii) other smart grid goals, including those
as specified in Sec. 1301 of the Energy Independence and
Security Act of 2007 (15 USC 17381).''.
The Chairman. Thank you very much.
Before we go on to questions, let me defer to Senator
Murkowski for any statement she would like to make, if she
would like?
Senator Murkowski. I have got nothing this morning.
The Chairman. OK. OK. Let me go ahead with a few questions
then.
Let me start with a question to you, Ms. Hogan. You make
reference to the fact that existing statutory language
constrains the department's enforcement efforts in several
ways. I think that is a quote from page 4 of your testimony,
and you did cite the statutory cap on penalties and the
statutory process for assessing penalties as examples.
Could you provide the committee with DOE's specific
recommendations for updating that statue in the enforcement
area so that we could consider that?
Ms. Hogan. We would really appreciate the opportunity to do
just that, to develop some recommendations regarding the
enforcement of these standards and to provide that in the form
of technical drafting assistance.
The Chairman. That would be very helpful to us.
Mr. McGuire, let me ask, you made reference to this--to the
potential of smart grid standards or use as integrated into the
smart grid. You say that they cannot be realized, that
potential cannot be realized without enactment of the Best-in-
Class Appliance Deployment Program, providing incentives for
deployment of smart grid-enabling appliances.
What is the status of the discussions or negotiations that
are taking place there regarding this best-in-class, and do you
think we will have an agreement in the next several weeks that
we could consider if we are able to move ahead with legislation
in this area?
Mr. McGuire. Thank you, Mr. Chairman.
I think my point was that if best-in-class provision is
also enacted, the full potential of the provision in your bill
would be realized. I think when we are talking about modifying
these appliance standards to encourage smart appliances, these
standards would go into effect several years forward.
The best-in-class provision that is being negotiated would
provide incentives earlier than that for manufacturers to get
these products out so consumers could learn about them and use
them and start taking advantage of them.
The negotiations are going on right now. I am confident
that they will be successful. We look forward to having all the
parties be able to come to the committee in the near future in
time for legislation that could move.
The Chairman. All right. That would be useful. I think if
we are able to proceed with the full Senate consideration of
our legislation and able to report these bills as part of that,
that would be very useful.
Steve Nadel, let me ask you, you in your testimony have
proposed several amendments, refinements to the smart grid
language in S. 3059, a package of technical amendments to EISA
of 2007, a proposed standard for service over-the-counter
refrigeration systems. I guess the request would be that to
reduce confusion, could you be sure to try to submit them to
the committee with a cover letter from both the energy
advocates such as yourself and also interested manufacturing
associations for these changes?
Mr. Nadel. Yes, we would be happy to. A lot of them we have
already reached agreement on. Steve Yurek talked about the
service over counter, he mentioned in his testimony. We are
doing final wordsmithing now.
The rest of them are things we are, by and large,
negotiating with people at this table, and we are just trying
to do final wordsmithing.
The Chairman. OK. That is very good.
Why don't I defer to Senator Murkowski for any questions
she has?
Senator Murkowski. Thank you, Mr. Chairman.
I want to thank all of you who are here with us this
morning and acknowledge your work as advocates and industry
representatives, those folks really working together to make a
difference here when it comes to efficiencies.
I will tell you I am at that point where it is like, boy,
we are talking now about Xbox 360s and hot food holding
cabinets and hot tubs, and the real question is, OK, we are
going to go ahead and we are going to build this legislation
and we are going to have these product standards in here. But I
don't know about you, I have got teenage boys. My world is
ever-changing when it comes to things, gadgets, things that use
energy.
So, the question I think is fair and appropriate in terms
of at what point is it appropriate to just say we here in
Congress should not be in the business of legislating product
standards? But I think we recognize that this technology moves
pretty quick out there, and more quickly perhaps than the DOE
rulemaking process.
I guess the question would be, and I probably know the
answer based on the comments from this morning. But in your
opinion, is it best that the standards are addressed through
the congressional process, as we are doing here now, or at what
point is the administrative process better suited to handle
what we are dealing with?
I throw that out to any and all of you. Mr. McGuire, you
are nodding first. I will let you go.
[Laughter.]
Mr. McGuire. Thank you for noticing, Senator.
I think what we have here today is a great example of the
manufacturers and the environmental groups realizing that
something should be done and needs to be done. We have a
history, if you look back at some of the recent standards
agreements, of doing this in a more expedited fashion than DOE
could through its administrative processes. If we can bring a
consensus agreement to the Congress and the Congress agrees
with it and enacts it, it is going to be implemented much
sooner.
Now, DOE is going through some reforms, and that is good.
But we really think this is a good way to get the energy
efficiency delivered in a more expedited fashion.
Senator Murkowski. Mr. Nadel.
Mr. Nadel. Yes, I would just add that we have a long
history of working together. I first worked with Joe McGuire on
negotiating some air conditioner standards that were in EPAct
1992. So we know each other well. We can come up with creative
solutions sometimes that is very difficult for DOE.
Also, DOE is very much backed up. They are catching up.
Hopefully, they will catch up, and maybe they could do more of
this. But we are able to do a lot of this stuff without
distracting from the revision process they are doing.
Although I would note that DOE has recently announced they
are about to start a television rulemaking, and that is a new
product where DOE is taking the lead on.
Senator Murkowski. I had appreciated that so many of you
had come together with the agreement. When we were taking up
the energy bill earlier last spring, you weren't quite ready at
that point in time with the standards for the outdoor lighting,
for the furnaces, and the air conditioners. Even though we had
moved our bill out, that work continued, and I think that that
was exceptionally important and speaks to the collaboration
that goes on.
Mr. Pitsor, you wanted to add something?
Mr. Pitsor. I would just add that I think one other vehicle
that the Congress has potentially put in place is the ability
for DOE to go to a direct final rule, where there is a
consensus deal between legislative cycles. If we are able to
come together on a consensus proposal, the statute would allow
us to provide that directly to DOE, and they could go to a
direct final rule on an expedited basis if there is no
objection.
So that would avoid Congress having to legislate it every
time but provide that additional ability for DOE to go faster.
Senator Murkowski. Let me ask another question, and this is
about proprietary data. Do you think that the proprietary data
is protected within the appliance standards program? How much
of an issue is this?
Mr. Yurek.
Mr. Yurek. Senator Murkowski, I believe under the current
provisions, it is. We have some concerns in the proposal, in
the data information that is being requested under this
legislation, where it is getting very specific, and we want to
make sure and we have been working with Steve and the different
groups to see how we can make sure we can address that by
allowing that data to be aggregated by the trade associations
rather than by individual manufacturers to help protect that
confidentiality.
Senator Murkowski. So are you comfortable with the bills
that we have under review this morning, that that data is
adequately protected?
Mr. Yurek. The current bill, we have some concerns, as I
said. But we are working with Steve and the efficiency groups
to see if we can put some language in there to allow the
aggregation of data versus the responsibility on individual
manufacturers for that information to be disclosed.
Senator Murkowski. I didn't mean to ignore you at the end,
Ms. Hogan. Obviously, coming from the department, you might
have something that you want to say in terms of the comments
that were made by the other gentlemen and whether or not we
leave it to DOE through their rulemaking.
Ms. Hogan. Certainly, we believe we can make tremendous
progress through the DOE rulemaking efforts. I think one of the
things we always look for when legislation does come through to
set standards is the ability for the Department of Energy to go
back and review and revise on a schedule that will deliver the
savings that are there for the country.
Senator Murkowski. Are you able to do that quickly enough,
in your opinion?
Ms. Hogan. I think we now believe the program that we have
stood up at the Department of Energy can do what is necessary
to develop the standards that are there, and we have a fair
amount of authority within which to do that.
Senator Murkowski. Mr. Chairman.
The Chairman. Thank you very much.
Let me call on Senator Menendez. He has made a very
substantial contribution to these efforts. He proposed a number
of efficiency improvements when we did--we were considering
ACELA this last year, and many of these are included in the
consensus agreements that are incorporated in these bills.
So thank you for your leadership on this, Bob, and you go
right ahead.
Senator Menendez. Thank you, Mr. Chairman. Let me thank you
and the ranking member for holding this hearing to improve
energy efficiency standards for consumer products, which, in my
mind, I think some of the best energy that we can create is one
that we don't use in terms of both cost for consumers, the
consequences in terms of energy usage, and reducing pollution.
So I am proud I have worked with both of you on the
National Energy Efficiency Enhancement Act and glad we are able
to include language similar to an amendment I offered last year
authorizing the Department of Energy to use multiple metrics
when establishing energy efficiency standards.
I am particularly grateful for the opportunity to consider
2 bills that I introduced, the Green Gaming Act and the Energy
Efficiency Products Act. I am pleased to have worked on the
Green Gaming Act with all the major console manufacturers--
Nintendo, Sony, Microsoft--as well as the Entertainment
Software Association and the National Resources Defense Council
to develop the legislation.
All of these groups support the bill, which would require
the Department of Energy to conduct a study to determine
whether minimum efficiency standards are needed for video game
consoles. Mr. Chair, I would like to submit 3 letters into the
record documenting their support.
The Chairman. I would be glad to include them.
Senator Menendez. Some consumers leave their game consoles
on 24 hours a day. Depending on the console, that could use as
much energy as 2 refrigerators, or $160 per year in electricity
costs. So I want to commend the industry for looking for ways
to make their products more efficient. I know they have been
working with the Department of Energy on volunteer efficiency
standards under the Energy Star program. Voluntary standards
may well be enough, but the legislation would ensure that the
department considers whether mandatory minimum standards are
also needed.
Just to shed a little light on this, Mr. Nadel, can you
give us a sense of how prevalent video game consoles are in
America and how much energy they use?
Mr. Nadel. My understanding is about 40 percent of American
households have at least one of these video game consoles. As
you pointed out, if they are left on all the time they can use
100, 150 watts continuously. That is as much energy as 2
refrigerators. So they are really an enormous source of energy
use and one that has really grown in the last decade or so.
Senator Menendez. If the consoles incorporated simple
features like automatically powering off after, let us say, an
hour of nonuse, how much would consumers save?
Mr. Nadel. Right. I mean, you mentioned a few minutes ago
that if left on all the time they can use $160 of electricity
each year. If you can power off when not in use, that could
save a good $100 of that, so more than 50 percent savings.
Senator Menendez. So I hope that that is an effort in which
we are working with the industry to try to get to certain
standards that both can help consumers save money, as well as
save energy. I think the study puts us in a direction in which
we can get what is the best way in which to achieve that goal I
think is the next best step.
Then I would just like to turn to the Energy Efficiency
Products Act, which would set Federal efficiency standards for
bottle-type water dispensers, commercial hot food holding
cabinets, portable electric spas. We had thought of naming the
bill ``the Hot Food, Hot Tub, Cold Water Act,'' but that seemed
a little unwieldy. So----
[Laughter.]
Senator Menendez [continuing]. This bill proposes to make
national the standards that several States have adopted for
these products and thus end the regulatory patchwork currently
facing manufacturers. We tried our very best to get as much
consensus on efficiency bills.
Mr. Nadel, can you tell us where you are at or where is the
progress with the industry on these three products, and have
you heard any opposition to the standards in your negotiations?
Mr. Nadel. All right. Where we are now is in case of the
spas, the hot tubs, as well as the hot food holding cabinets,
we have gotten approval from both of the trade associations.
One of them has already submitted a letter of support. One is
working on that. So I think those 2 are consensus.
In the case of the water dispensers, we have gotten the 2
big manufacturers, Oasis and General Electric, to support.
There is a slight modification to the House-passed bill in your
bill in order to bring General Electric onboard, for example.
So we really are trying to modify and get consensus.
There is a brand-new trade association, new to these
products. The International Bottled Water Association, we just
learned about them, and we gave them a copy of the bill a week
ago. They are studying it. I am waiting for them to get back to
us.
Senator Menendez. Great. It seems like we have made
progress, and we look forward to working with the industry and
with you in achieving the goals.
Thank you, Mr. Chairman.
The Chairman. Thank you very much.
We received just yesterday a letter from the American Gas
Association expressing concerns with section 2(e) of S. 3059,
which requires furnaces manufactured after May 1 of 2013 for
use in the northern region to have an efficiency of at least 90
percent. AGA proposes that this new standard only apply to new
construction because the current provision ``could ultimately
encourage customers to repair rather than replace their furnace
or, worse yet, not make the needed changes in the common vented
water heater venting system, which could result in a safety
hazard.''
I don't know if this is something any of you folks--I
guess, Mr. Yurek or Mr. Nadel, if either of you have a point of
view on this proposal? I would like to include this letter from
the AGA in the committee hearing record.
The Chairman. But if either of you have a comment? Mr.
Yurek, go ahead.
Mr. Yurek. Yes, thank you, Mr. Chairman.
We have been in discussions with AGA over these concerns,
along with the other advocates. Actually, some of these points
were points that were part of the rulemaking that was occurring
on the furnace before the Department of Energy.
There are some installations when you go to 90 percent
where it is going to be more expensive. We saw the same thing
in the air conditioning rulemaking before when we went from the
10 SEER to the 13 SEER. However, overall, the 90 percent makes
sense for the northern region. It provides certainty and
predictability for the manufacturers, as well as consumers.
One of the issues that we had to deal with in negotiating
this consensus agreement was understanding where the DOE would
be coming out in this rulemaking, as well as dealing with
several States in the northern region, including the State of
Massachusetts, that have passed legislation mandating 90
percent AFUE furnaces in their States. The State of
Massachusetts has filed a waiver.
So, we have the issue of having 2 regions for furnaces as
proposed in the 2007 Energy Act, one for the North, one for the
South, or having multiple regions for different States as we
see these waivers from these different States going forward. So
we did take this into consideration.
I think there is an opportunity here to look at possibly
incentives to help those consumers that will have very high,
expensive installation because of going to the 90 percent. But
I think, overall, what we came out with is the best solution,
which is 90 percent for the north region and the 82 percent for
the southern.
The Chairman. Mr. Nadel, did you have a point of view?
Mr. Nadel. Yes, I would add a few points. When the
Department of Energy did their rulemaking a couple of years ago
on furnaces, they did look at these retrofit costs and did find
that in the North, it is cost effective, even with the extra
retrofit cost, to go to the higher efficiency levels. It just
takes so much natural gas to heat a home in these climates that
even if it is a little more expensive to install, it is clearly
cost effective.
If we were to limit the standard to just new construction,
the savings would plummet. The vast majority of equipment that
is sold is for existing homes, not for new construction. Also,
new construction is much more likely to use the high-efficiency
equipment in the first place because they can save having to
install a chimney. So most of the savings are in existing
homes. If we were to do as they suggested, it would just
totally gut this bill.
In terms of the safety concerns, if a contractor
misinstalls something, doesn't follow proper venting
guidelines, yes, there could be problems. But the whole idea is
these contractors are skilled professionals. They are licensed.
There is criteria that they need to apply in terms of proper
installation. If they do that, there shouldn't be any safety
problems.
I know in Massachusetts, as Steve Yurek pointed out, I have
heard that a lot of people are going instead of trying to vent
the water heater through the chimney, they just do a power-
vented water heater instead and go right out through the side
instead, totally avoiding the concerns that AGA states.
The Chairman. Ms. Hogan, did you have any perspective on
this that we ought to be aware of?
Ms. Hogan. No, I think I can thank Steve Nadel for
summarizing our last rulemaking process and the cost
effectiveness. We are currently in a rulemaking process on
these product areas, and we will have information out soon in
terms of our examinations.
The Chairman. OK. This letter does say that while the
proponents of this provision may hope that mandating a 90
percent AFUE will result in more 90 percent furnaces, the
result in the real world may well be the repair and continued
operation of more 78 percent AFUE furnaces. Do either of you
have a direct response on that? Do you think that is right or
wrong?
Mr. Yurek. I think that is the pressure that you see in any
rulemaking. We saw very good evidence of this again in the air
conditioning--the last air-conditioning rulemaking, when it
went from 10 SEER to 13 SEER, where because of that cost
differential and the economy, some decisions were made to
repair rather than replace. But ultimately, they are going to
have to replace both their furnaces or their air conditioners.
When they do, they will have to put in that higher efficiency
equipment.
I think there are ways--and we have been working with the
advocates and others to see how we can encourage people to
trade out those lower-efficient equipment sooner rather than
later. But I think as with any rulemaking, during that
transition period, there is going to be some shifting to repair
versus replacement.
The Chairman. Senator Murkowski, did you have additional
questions?
Senator Murkowski. Yes, I will follow on. I am just now
reading this letter that you are referring to, Mr. Chairman,
from the American Gas Association. Coming from Alaska's
perspective, the northern of the most northern States and a
State where just the costs that we face are extremely--I mean
are overwhelming. When we talk about the need to retrofit, I
can tell you most of the people that I am coming across are
going to look to try to fix rather than to replace.
Now I notice that this is just as it relates to gas
furnaces, and it does not include a mandate for the oil
furnaces. I am assuming we are just talking about gas with this
90 percent?
Mr. Yurek. Right.
Senator Murkowski. This is something that I am going to
have to look into a little bit more because my initial concern
is the impact to folks in my State could be considerable. So I
would like to follow up with you on that if I can.
I just have one more question, and this is probably to you,
Mr. Nadel. You got my attention when you were talking about the
gaming consoles and just the amount of energy that is consumed
through the Xbox just being on.
When we are talking about energy efficiency improvements,
where do we get the biggest bang for the buck? Is it targeting
Government buildings like we are in now? Is it in residential?
Is it in industrial, manufacturing, residential building? Where
is it?
Where is the--not the easiest spot, but really, when we are
talking about that biggest energy drain where we might be able
to make a significant difference with the efficiencies, where
do you identify it?
Mr. Nadel. There are lots of big opportunities that are not
just focused in one place. In terms of percentage savings,
probably the biggest opportunities are in commercial buildings.
They use a lot of power, and there is a lot cost effective.
Residential is in between. Industry, a little lower because
they have done a lot more in general, because they have full-
time engineers and they really are trying to manage their
costs.
In terms of cost effectiveness, industrial is probably the
most cost effective. There is still a lot of relatively low-
hanging fruit a lot of industrial firms can do. Commercial is
in between. Residential, while still cost effective, is a
little bit more expensive just because there is that much they
each use, and there are certain fixed costs.
Senator Murkowski. One last question here. This is just how
we communicate what it is that we know because so much--we are
all talking about the smart grid. But you know, I am not going
to see the smart grid implemented in Alaska in quite some time.
But I can share information with constituents just about energy
awareness so that people within their own homes or their small
businesses can try to make a difference when it comes to their
own energy use and consumption.
What efforts do we have, whether it is within DOE or within
the trade associations, to really help educate people about
being smarter when it comes to energy efficiency? I ask this
question to different panels. So you guys are just the latest
victims here. Mr. Yurek?
Mr. Yurek. Senator, as a trade association and all the
trade associations here, as well as the advocacy groups, we
spend a lot of our time and effort in education and trying to
educate consumers about our products and how to use them wisely
and efficiently.
We have done several joint programs both with the EPA and
the Energy Star, as well as with the advocacy groups, talking
about what a difference it makes on where you set the
thermostat. You don't even have to have a programmable
thermostat. It is great if you do. But even just changing it 1
or 2 degrees if it is for heating or for cooling can save
significant amount of energy.
Or putting that programmable thermostat in for the purpose
of when you are not in the home. Why do you need to have it
heated during that period of time at the same level when you
are walking around, or cooled if it is an area that needs
cooling?
So, we provide that type of information to consumers. But
it is very difficult to get that information out, and we all
struggle with that because there are so many, just like any
time going to the homeowners or individuals, of how best to
communicate that information.
But I think if you look at any of our Web sites for any of
the trade associations here, for ACEEE or any of the other
energy advocacy groups, the Department of Energy, that
information is there. We try to get people there as much as
possible to educate them on what is best to use, as well as all
of our members on their Web sites have this information on how
to use their products efficiently.
Senator Murkowski. But you have to have the desire to go to
your Web site to find out.
Mr. Yurek. Right.
Senator Murkowski. You are assuming that you are going to
have a somewhat interested or educated consumer in the first
place if they go to your Web site. Mr. Pitsor, Mr. McGuire?
Mr. McGuire. Senator, I think one of the greatest
accomplishments in the area of energy awareness for consumers
has been the Energy Star program, which, in addition to
appliance standards, has led to a lot of energy savings. The
challenge there is to get consumers to realize that if they
retired an appliance that isn't dead but is maybe 8 or 10 years
old, buying a new one would save more money in the long run and
even in a year because it is more efficient than repairing an
older, less efficient unit.
That is the educational challenge because, for the most
part, when people are in the stores looking for appliances, it
is a rush situation. So Energy Star has done a great job. The
Appliance Rebate Program, as part of the stimulus bill that the
Congress enacted, part of that was to get consumers aware and
in stores thinking about the value of energy efficiency not
only to save energy, but for disposable income.
Just in terms of where the low-hanging fruit is and what is
the easiest, the most energy to save, demand response has been
a major success in the consumer and industrial world. But in
the residential sector, that is where the greatest potential
for future benefits from demand response lie, and that gets
into the smarter appliances that can deal with the smart grid
or, in some cases, not even in a smart grid can help shift load
and make a real difference toward energy savings.
Senator Murkowski. Are there tradeoffs between being
smarter and being more efficient?
Mr. McGuire. There don't have to be. I think what the
decision point is, for example, as in the Department of Energy,
where they are looking at new refrigerator standards. It is the
third-generation refrigerator standard.
OK, a refrigerator today uses as much energy as a 60-watt
light bulb. If you improve that by 10 percent, you are saving 6
watts. But if you shift a refrigerator's defrost cycle to a
nonpeak time of day, you are shifting 300 watts. So where is
the bang for the buck in terms of the investment? The hundreds
of millions of dollars that manufacturers have to put into a
new product to meet new standards.
It is different for different products. But I think the
refrigerator is a good example where greater use of demand
response through smartness can make a more profound difference
for the environment and for the consumer than the next level of
efficiency.
Senator Murkowski. Ms. Hogan.
Ms. Hogan. We have a number of efforts underway at the
Department of Energy that fall into that educational bucket. I
think one of the things we are learning is that folks need to
have a good way to compare what their energy use is in their
home relative to the other homes around them.
So, one of the efforts we are undertaking that came out
through the Recovery through Retrofit report, which was led by
the Vice President's office, is an effort to stand up a system
that helps people compare the energy of their home to others
like them, sort of an energy guide label for a home. People
really don't know if their home is using a lot more or a lot
less energy relative to their neighbor's home, and that turns
out to be a very powerful piece of information, particularly
when homes are fairly similar in design.
So we are looking at this as something that can be stood up
with some amount of analytical work, but fairly quickly, and
then can be rolled out in partnership with utilities and others
who have access to that type of data. This will really give
homeowners the information they need to, first, understand how
their whole home performs and then, second, look at what those
cost-effective opportunities are for improving their home.
Senator Murkowski. Mr. Nadel.
Mr. Nadel. Just to add a little bit terms of smart grid and
smartness, it often can save. It doesn't always save. A lot of
it depends on the particulars of what the product is, how you
move it. You know, yes, you can move something 300 watts, but
it is only on 20 minutes a day. So there is only so much cost.
There are some other ways to get at this. There is a
company called Opower, for example, that uses a mail-based
system rather than smart meters or the Internet. President
Obama actually visited them earlier this week, and that might
be an example of the type of system that would be a little bit
simpler and could be applied to some of the Alaskan utilities
even long before they get into smartness. So there are
opportunities there.
Also, coming back to the whole retrofit question and
repairs, in the case of a furnace, what typically puts a
furnace out of commission is the heat exchanger gets damaged,
and it is very hard to repair a heat exchanger. Yes, if a
blower goes, you can replace that. But you are typically only
buying a few years with the repair and not another 10 or 20. So
they all will need to be repaired relatively quickly.
I would also point out there are lots of opportunities for
retrofit programs to help people, as Mr. McGuire pointed out,
to accelerate the retirement of those energy hogs. I know the
REEP program that was part of ACELA would actually do that, and
I understand you are having a hearing tomorrow on HOMESTAR,
which is nearer term way to do that.
Mr. Pitsor. Senator, I would just comment also from NEMA's
point of view. We maintain a Web site to provide information on
the commercial building tax deduction that was enacted by
Congress in EPAct '05 that provides incentives for building
owners to improve the efficiency of commercial buildings. We
continue to see a rapid increase in terms of inquiries about--
or wanting to learn more about tax incentives and tax
deductions and what makes economic sense in terms of renovation
work and retrofit work.
So we are seeing an increase in consumer awareness, but we
are still at a very low percentage of that. I guess I look
forward to the day where the average consumer cares as much
about the cost of a gallon of gas as his kilowatt hour rate on
his bill and is aware of what his kilowatt hour rate is on his
bill as he is aware of what a gallon of gas costs.
Senator Murkowski. I don't know what goes on in your house,
but I am always after my kids to turn off the lights, turn off
the machine, whatever. I get the ``whatever'' back.
[Laughter.]
Senator Murkowski. But it is, it really is an awareness,
and I think with kids particularly if you can distill it--you
are not going to get a 15-year-old caring about what the
kilowatt usage is on the Xbox game. But when you say it is the
equivalent of 2 refrigerators, there is a visual there that
they can relate to. So we have got to figure out how we talk
their language as well.
I appreciate the testimony this afternoon.
The Chairman. Thank you all very much, and I appreciate the
testimony and appreciate all the work that has gone into
developing these pieces of legislation. I hope you will keep
working on it, and we will be doing our best to get some of
this enacted into law.
Thank you.
[Whereupon, at 10:40 a.m., the hearing was adjourned.]
APPENDIXES
----------
Appendix I
Responses to Additional Questions
----------
Responses of Kathleen Hogan to Questions From Senator Bingaman
Question 1. On page 2, you describe DOE's plans to implement the
November 2006 Consent Decree in which DOE plans to eliminate the
backlog in appliance standards rules.
What impact would the enactment of the appliance provisions of
ACELA and of S. 3059 have on DOE's ability to implement the Decree and
eliminate the backlog?
Answer. The Department of Energy (DOE) has yet to estimate the
potential resources and time required to implement the appliance
provisions of the provisions of ACELA (S. 1462) and S. 3059. DOE has
not assessed the potential impact of these requirements on DOE's
ability to implement the existing Consent Decree, which reflects the
Department's commitment to eliminating the backlog of appliance
standards rulemakings. However, a preliminary review suggests these
provisions are not likely to have a major adverse impact on the
Department's ability to comply with its obligations under the Consent
Decree. Many of the provisions contained in ACELA and S. 3059 would
directly establish new energy conservation standards or related
requirements, rather than mandating the development of new DOE
rulemakings. The provisions that would impose new rulemaking
responsibilities appear to set achievable deadlines that do not impair
DOE's ability to meet its existing obligations under the Consent
Decree.
Question 2. Will DOE adjust ongoing rulemakings, such as the
rulemaking underway for residential furnaces, to conform to the
provisions of the consensus agreements that have been negotiated
between industry and efficiency advocates?
Answer. DOE must conduct its rulemaking process according to
existing law. If elements of the consensus agreement are passed into
law, DOE will implement those accordingly. For the residential furnaces
rulemaking, on March 15, 2010 DOE published a notice in the Federal
Register requesting comments on the product classes, the analytical
approach, models, and tools DOE is using to evaluate amended standards
for this rulemaking. Comments on the March 15 notice will be accepted
until April 14, 2010. In the next step of the process, the Department
will publish a Notice of Proposed Rulemaking in which DOE will propose
standard levels and solicit comments on adopting the consensus
agreement.
Question 3. Current law requires DOE to propose updates to its
testing procedures for battery chargers and external power supplies.
These updates are intended to clarify the requirements for measurement
of energy consumed in modes known as ``stand-by mode,'' ``no-load'' and
``off mode.''
However, life safety and security products are continuously active
and require a constant, uninterrupted power supply. S. 3059 includes
provisions supported by the security industry and efficiency advocacy
organizations to exempt life safety and security devices from the
requirements of the ``off' mode and ``stand-by'' mode.
Do you agree that federal efficiency standards applicable to
external power supply performance in off mode and standby mode should
not apply to external power supplies designed for use with security and
life safety devices?
Answer. Given current technology, the Department of Energy (DOE)
does not believe such devices can reliably transition to off or standby
mode while serving their security and safety functions. Therefore, DOE
agrees that energy conservation standards regarding these modes should
not apply.
Responses of Kathleen Hogan to Questions From Senator Murkowski
Question 1. I have said before that I don't think Congress should
be in the business of legislating product standards, but that sometimes
technology moves more quickly than the DOE rulemaking process. What are
the potential challenges that could occur, by moving these appliance
standards through Congress, rather than through the Department of
Energy?
Answer. While the Department has developed and issued a large
number of product standards since the program's establishment, most
product standards were originally set by legislation. In most cases,
the product standards established by legislation have been supported by
both manufacturers and energy advocates; a reflection of the active
involvement of stakeholders in the legislative process. If key
stakeholders and other experts continue to be engaged during the
legislative process, DOE believes the process can be an effective
alternative to DOE-developed rulemakings. The great advantage of the
legislative process is it shortens the time required to establish new
efficiency standards by several years. However, this acceleration in
the process has sometimes resulted in the establishment of standards
that did not achieve maximum energy efficiency gains that were
economically justifiable and some cases resulted in enactment of
technically flawed statutory provisions. The Department stands ready to
work with Congress to help ensure Congressionally-directed standards
maximize the efficiency gains that are economically justified and are
based on the best technical information available.
Question 2. In your testimony you say that while DOE's efforts to
bring the appliance standard program up to speed are ongoing, they have
revealed that the existing statutory language constrains the
Department's enforcement efforts. How can we avoid this in the future?
Answer. The Department of Energy (DOE) is constantly working to
make sure that our standards and enforcement actions are as robust as
they can be, but we would benefit from some changes to existing
statutes. As a result, DOE would recommend edits to three areas of the
existing statutory language; dealing with penalties, prohibited acts
and process. The suggested edits are as follows:
1. PENALTIES
Amend 42 U.S.C. Sec. 6303(a) Enforcement by striking the
first sentence and replacing it with the following sentence:
``Except as provided in subsection (c) of this section, any
person who knowingly violates any provision of section 6302 of
this title, or any regulation promulgated pursuant to it, shall
be subject to a civil penalty.''
After ``violations of 332(a)(5)'' add, (a)(8), (a)(9) and (a)
(10) In the last sentence of the paragraph, after ``Each
violation of paragraph (1),(2) or (5) of section 332(a) [42
USCS 6302(a)(1),(2), or (5)1 shall constitute a separate
violation with respect to each covered product, ``Add ``with a
maximum civil penalty of $1,000 per unit;'' and after ``and
each day of violation of section 332(a)(3) or (4),'' add
``(8),(9), or (10)'' and after'' [42 USCS 6302 (a)(3) or (4)1
shall constitute a separate violation,'' add ``with a maximum
civil penalty of $500 per day.
Rationale
Currently our ability to deter violators is inhibited by
relatively low penalties. This edit would increase the current
maximum violation for violating DOE's energy efficiency
standards from $200 per unit in violation to $1,000 per unit in
violation which will provide a more significant deterrent,
particularly for low volume manufacturers. The original
statutory penalty of $100 per violation was enacted in the
1970s and has only been modestly adjusted (up to $200) for
inflation.
The penalty for failing to certify and failing to ensure a
product meets DOE's energy efficiency standards is increased
from $200 to $500 per day. The certifications provide
information which is critically important in making an initial
assessment of whether underlying energy efficiency standards
are being met. Testing is an essential component of any
manufacturer's compliance with the standards.
The additions of (a)(8),(a)(9) and (a) (10) parallel the
changes in Section 6302 below--making it clear that failing to
certify, test or comply with DOE regulations promulgated
pursuant to the statute are violations subject to penalty.
2. PROHIBITED ACTS
Amend 42 U.S.C. Sec. 6302(a) to explicitly include failure
to certify, failures to test and regulatory violations by
adding the following provisions:
(8) for any manufacturer or private labeler to
distribute in commerce any new covered product which
has not been properly certified in accordance with the
requirements established in or prescribed under this
part.
(9) for any manufacturer or private labeler to
distribute in commerce any new covered product which
has not been properly tested in accordance with the
requirements established in or prescribed under this
part
(10) for any manufacturer or private labeler to
violate any regulation lawfully promulgated to
implement any provision of this part.
Rationale
DOE interpreted its rules (Parts 430 and 431) and 42 U.S.C,
6302 (a)(3) to mean a failure to certify covered products is an
independent violation of EPCA and DOE's implementing
regulations that may be subject to an enforcement action.
However, given the importance of the certification
information which provides critical information necessary to
make an initial assessment of whether the underlying energy
efficiency standards are being met--a technical amendment to
the statute that clearly states failure to certify is a
violation would assist enforcement efforts.
Testing should be its own separate requirement--not linked
to labeling. Currently, the statute prohibits a manufacturer
from representing the energy use or energy efficiency of a
product (subject to a test procedure) unless that product has
been tested. This is a labeling violation enforceable by the
Federal Trade Commission (FTC). A technical amendment to the
statute clarifying a failure to test a product is itself a
violation would assist DOE enforcement efforts. Paragraph 10
makes clear that regulations promulgated pursuant to the
agencies enforcement authority under this section are
violations subjected to penalty.
3. PROCESS
Amend 42 U.S.C. Sec. 6303(d) by striking the second sentence
of (1), by striking the introductory clause of (2), and replace
it with ``If the proposed penalty arises from an alleged
violation of 42 USC 6302(a)(3)(4)(5) or (10); by striking (3)
in its entirety, and replacing it with (3) if the proposed
penalty arises from an alleged failure to certify or test a
covered product as required by 42 U.S.C. Sec. 6302(a)(8)-(9),
the Secretary shall assess the penalty, by order, after an
informal adjudication conducted under 5 U.S.C. Sec. 555; and
in (4) after ``the Secretary shall institute an action to
recover the amount of such penalty'' add ``plus interest
assessed from the date upon which the assessment of a civil
penalty became a final and unappealable order under paragraph
(2).
Rationale
Cases where there is no dispute of material fact; i.e. a
manufacturer simply fails to file a certification report or
fails to test a product in violation of federal law, should not
go to an Administrative Law Judge (ALJ). They should be decided
by an informal hearing consistent with APA section 555. The
proposed technical amendment adding a new paragraph (3)
addresses this issue.
For other cases--such as whether or not the item at issue
complies with federal energy efficiency or water standards the
existing process set forth in 6303 (d)(2) should apply: after a
formal adjudication under Sec. 554, the Secretary may issue an
order assessing a civil penalty. After a penalty order is
assessed, the affected party must seek judicial review ``within
60 calendar days'' by instituting ``an action in the United
States court of appeals for the appropriate judicial circuit
for judicial review of such order in accordance with [the
APA].'' The proposed technical amendment to paragraph 2
addresses this issue.
A technical amendment striking the original Sec. 6303(d)(3)
language from the statute would enhance DOE's enforcement
efforts. Allowing the potential bad actor to chose the more
cumbersome option laid out in 6303(d)(3) impedes enforcement
efforts: if an entity elects to proceed under Sec. 6303(d)(3),
then the Secretary must ``promptly'' assess a civil penalty and
then wait 60 days to see if the entity pays it. If it is not
paid, the Secretary must file an action in ``the appropriate
district court of the United States for an order affirming the
assessment of the civil penalty.'' Thus allowing a non-
compliant manufacturer to extend the process for months all the
while distributing non-compliant products to consumers.
Question 3. Please describe how you fund, monitor, and enforce
compliance issues within the ENERGY STAR Program. How many staff do
you have for ENERGY STAR compliance, monitoring and enforcement; and
are there any specific plans to increase this capacity in FY2011? How
will the ``ramp-down'' of ARRA funds affect this dynamic?
Answer. Within ENERGY STAR, the Department has various efforts to
monitor and enforce compliance. For one, Compact Fluorescent Lamps
(CFLs) are tested under the Program for the Evaluation and Analysis of
Residential Lighting (PEARL). This program takes CFLs from retail
settings and tests the lamps against the ENERGY STAR CFL Program
Requirements. If a lamp did not meet the requirements, it was
disqualified from the program. Under current version of the program
requirements, manufacturers fund the testing.
Windows, doors and skylights are tested under the auspices of the
National Fenestration Rating Council (NFRC). This independent third-
party entity establishes consensus testing procedures to evaluate
energy efficiency metrics for fenestration products. If a product does
not meet the ENERGY STAR requirements for qualification, it is not
allowed to carry the ENERGY STAR label.
Beginning in Fiscal Year (FY) 2010, the Department of Energy (DOE)
is testing appliances at independent third party laboratories to verify
qualifying test results. It is the Department's intent, if products do
not meet ENERGY STAR program requirements, to refer the matter to the
Environmental Protection Agency (EPA) for appropriate action. For CFLs,
the testing and verification process written into the program
requirements will continue, with failing test results referred to EPA
for product status determination. NFRC will continue to conduct
independent testing for fenestration product certification and DOE will
monitor NFRC's internal accreditation reviews to insure the reported
certification results are valid.
Also during FY 2010, EPA will begin requiring all products be
certified by independent testing laboratories, thus eliminating
manufacturer self-certification for qualifying for ENERGY STAR. In FY
2011, DOE expects to expand its verification capabilities and expand
the breadth of ENERGY STAR products to be tested at independent third-
party facilities. The eventual goal is for all ENERGY STAR products to
be tested, in conjunction with any testing managed by EPA. DOE has
requested an increase in the FY 2011 budget request to pay for this
enhanced capacity and does not expect the ramp down of Recovery Act
resources to cause reduction in verification testing.
Question 4. DOE staff has briefed Committee staff on transferring
the promotion of several ENERGY STAR products to the EPA, such as
windows, refrigerators, dishwashers and compact fluorescent lights,
within the FY2011 budget request. However, the budget still references
these products as part of the DOE. Is it the Administration's intent to
transfer the promotion of ENERGY STAR labels for these appliances from
the Energy Department to the EPA? Please describe the funding,
rationale, and implementation schedule anticipated for this transfer,
if it undertaken.
Answer. The Department of Energy (DOE) and Environmental Protection
Agency (EPA) signed a Memorandum of Understanding on September 30, 2009
outlining a new partnership on energy efficiency in buildings as an
important step in strengthening the Administration's commitment to
energy efficiency. The partnership addresses two programs for which
each agency has important roles: the ENERGY STAR program and the
National Building Rating Program. The agreement updates and replaces a
10-year-old agreement between the agencies on ENERGY STAR and other
efforts. The agreement outlines:
An enhanced ENERGY STAR program and a new 'best in class'
labeling program;
An enhanced national building energy rating program that
will be widely applied in Recovery Act programs and beyond;
An ongoing framework for partnership, coordination, and
collaboration between the two agencies across these programs;
Clear lines of responsibility between the two agencies that
build on the expertise of each agency; and
New opportunities for stakeholders to provide feedback to
the administration on these programs.
The ENERGY STAR products program has grown to encompass products
in more than 60 product categories and is used by millions of Americans
in selecting products that help them save money and protect the
environment. A number of enhancements will be undertaken to maintain
and build the ENERGY STAR label as a consumer trust mark for cost-
effective energy-efficient products that offer consumers the features
they are seeking. These enhancements include:
The ENERGY STAR program will be expanded to cover more
products at a faster pace;
Revisions to existing ENERGY STAR specifications will be
undertaken more frequently so the ENERGY STAR label continues
to highlight top energy efficient products;
A comprehensive program for product testing and verification
of products earning the ENERGY STAR will be developed and
implemented; and
A new effort to recognize super efficient products.
DOE and EPA will work quickly to put this agreement into action in
the following ways:
Outline and implement key enhancements to the ENERGY STAR
products program in the areas of:
(1) product testing and verification,
(2) revisions to existing ENERGY STAR specifications so as
to ensure ENERGY STAR recognizes top performing products, and
(3) other changes necessary so ENERGY STAR represents the
top product models as outlined in the agreement.
(4) Developing options for new ``best in class'' labeling
program.
Outline and implement key enhancements to the National
Building Rating System particularly where important to assist
in the use of Recovery Act funding.
DOE will continue a strong commitment to the overall success of
ENERGY STAR. DOE will concentrate its efforst in the following areas:
Testing procedure development, review, and improvements;
Technical analysis; and
Testing and verification.
As a result, the DOE role in ENERGY STAR will continue to be
significant. The test procedures and analytical capacity are critical
to a successful ENERGY STAR program.
Further information on the actions DOE and EPA are taking to
protect the integrity of the Energy Star label are outlined in the
attached memo, sent on April 2, 2010, to DOE Secretary Chu and EPA
Administrator Jackson, from DOE Assistant Secretary Cathy Zoi and EPA
Assistant Administrator Gina McCarthy.
Question 5. Please describe how the DOE intends to release more
than 20 final appliance rules by June 30, 2011 and whether the amount
of funding allocated, is adequate, to ensure that these final rules are
met by the deadline.
Answer. The Department of Energy (DOE) has established detailed
schedules for development and issuance of all rulemakings governed by
the Consent Decree and statutory deadlines, and is putting in place the
staff, internal processes, and other resources necessary to ensure
these deadlines are achieved. For Fiscal Year (FY) 2010, the Department
requested and received $35 million to support implementation of the
appliance standards programs. For FY 2011, the Department requested $40
million for these efforts. The FY 2011 request will enable DOE to meet
the established deadlines and to undertake significant new efforts to
ensure improvement in the compliance and enforcement efforts.
Question 6. Have decisions been made regarding the funding level
for the Energy Star Program for fiscal year 2011, and if so can you
summarize the different components, and their corresponding funding
levels within the Program?
Answer. The Department of Energy (DOE) requested $10 million in
Fiscal Year (FY) 2011 to support ENERGY STAR activities, including
developing and updating test procedures, criteria development,
verification testing and support of the National Building Rating
Program (NBRP). For test procedures, DOE will use funds to accelerate
the development of test procedures for an increased range of products.
In addition, the development of verification procedures will be
accelerated to ensure the reliability of the ENERGY STAR label in the
eyes of consumers. Developing test procedures and verification methods
is an intensive process, but necessary as DOE begins doing more in-
house testing and verification.
A two-pronged strategy will be deployed in FY 2011 to support the
portfolio of existing technologies: 1) developing and updating
efficiency criteria including ENERGY STAR test procedures for products
to keep the label relevant and meaningful in the market; and 2) working
with EPA and participating manufacturers, retailers, and energy
efficiency program sponsors on certification and product testing.
The NBRP will provide guidance for energy retrofits of existing
buildings based on state-of-the-art cost and performance data. It will
also establish a comprehensive energy efficiency rating system for both
residential and commercial buildings on a national scale. DOE will
develop, validate, and update software tools for both asset and
benchmark ratings in consultation with the Environmental Protection
Agency (EPA). These tools provide information to owners on whole-
building comparative energy use, while also providing decision
assistance on retrofits. DOE will maintain all relevant databases used
by the software tools and create data sharing mechanisms with EPA. EPA
will establish ENERGY STAR criteria for buildings based on technical
input from the DOE and the NBRP.
______
Responses of Kyle Pistor to Questions From Senator Murkowski
Question 1. The Next Generation Lighting Initiative will provide
significant energy savings though more efficient lighting. Given the
DOE's management in the development and understanding of this new
technology, please describe how DOE will oversee this initiative, as
well as other activities related to the initiative.
Answer. The Next Generation Lighting Initiative was created by
Congress in Section 912 of the Energy Policy Act of 2005, which
directed DOE to support research and development for and promote
advanced light emitting diodes (LEDs) and organic light emitting diodes
(OLEDs). The energy savings potential of LEDs and OLEDs, also known as
solid state lighting (SSL), is significant. As part of the NGLI,
Congress directed DOE to select an industry alliance that is broadly
representative of U.S. solid state lighting research, development,
infrastructure, and manufacturing expertise as a whole to cooperate in
DOE's efforts. The Next Generation Lighting Industry Alliance (NGLIA),
for which NEMA serves as the Secretariat, is that industry alliance.
Since 2005, DOE and NGLIA members have cooperated to support technology
research and development, product R&D, and development of technical
standards as well as commercialization, testing, demonstration, and
market introduction of LED products for general illumination. Most
recently, DOE has launched an initiative on manufacturing R&D.
Question 2. Do you believe that your proprietary data is protected
within the bill, in particular as it relates to that requires DOE to
require manufacturers to submit information on compliance, shipments,
energy use and efficiency?
Answer. The legislation requires the Department of Energy to
conduct a public hearing on the specifics of what data is needed by
product category. This will allow the DOE to tailor what data is
appropriate for which products, and methods under which the data can be
submitted to DOE. NEMA would propose that confidential information
could be maintained by allowing manufacturers to submit through their
respective industry trade association. NEMA has a long history of doing
this for other regulatory purposes, including DOE and EPA programs. In
addition, NEMA has offered this ability to non-NEMA manufacturers. It
will be important that any data requests be based on reasonable
considerations regarding the timing and burden related to the data
submission that would not require industry to create new systems to
gather information that doesn't exist today.
Question 3. As you note in your testimony, the 2007 Energy
Independence and Security Act requires that customers be provided with
timely information and options for controlling energy use. Is your
organization conducting any public outreach on smart grid technologies?
Do you get the sense that consumers understand smart grid products or
is additional public education needed in this arena?
Answer. NEMA conducts outreach on Smart Grid through a number of
mediums. Aspects of Smart Grid are regularly featured through our print
and online outlets; electroindustry Magazine (ei Magazine), and ei-
Extra. The March 2009 edition of ei Magazine specifically featured
Smart Grid, as will the June 2010 edition. NEMA staff and member
companies are regular contributors to other industry publications, and
welcome the opportunity to speak in public forums on Smart Grid.
Additionally, NEMA has developed publications specifically targeted at
Smart Grid consumers, Smart Grid oriented podcasts available on from
the Apple iTunes store, and has an audio segment that will be featured
on Delta Airlines Sky Radio during the months of May and June of 2010.
However, it is NEMA's belief that, in general, the average consumer
does not understand the purpose or the benefits of Smart Grid. NEMA
would welcome federal involvement in this process with manufacturers,
utilities, and state legislators/regulators.
Several essential consumer education areas that could be addressed
include:
Consumer motivation needs to exist as a pull-through for
Smart Grid technology in regulatory actions. As with any
technology-driven endeavor, a small percentage of homeowners
will grasp and adopt Smart Grid technologies for the home,
while a great deal of others will lag. However, very few of
even the most interested homeowners will consider, or will pay
any attention to the changes necessary within the utility
company in order to support the home-level services that are
enabled through Smart Grid. As a result, state regulators, who
are charged with protecting consumer interests, may be faced
with rate-payer opposition as they consider utility proposals
for actions related to the deployment of Smart Grid
technologies. A well educated consumer and/or giving local
regulators the appropriate tools to address these concerns
would be a tremendous benefit.
Demand Response (DR, also known as Peak Demand) is a foreign
concept. A key to serving peak demand with existing grid
resources is the idea of supporting demand response programs.
The problem is that the general public doesn't understand this
term and thus cannot relate to its importance. On March 12,
2010 the Federal Energy Regulatory Commission (FERC) released
their first draft of the National Demand Response Plan. Every
utility and consumer in the country could be affected by this
policy, but very few people outside of the electricity supply
chain understand it.
Responses of Kyle Pistor to Questions From Senator Sessions
Question 1. Can Light Emitting Diode (LED) be deployed on a
nationally wide scale?
Answer. Yes, light-emitting diode (LED) outdoor products can be
deployed nation-wide and will work in most applications although LED
technology is not mandated by the bill.
Question 2. Could you please provide me a cost-benefit analysis for
the State of Alabama for phasing out existing luminaries and replacing
them with light emitting diode (LED) outdoor lighting systems by 2013-
the effective date listed in the Senate proposal and by 2017-the
effective date in the House proposal?
Answer. Section 6 of the legislation does not mandate LED retrofits
and there is no requirement for a state to replace their existing
outdoor lighting. The bill impacts only the sale of new luminaires
beginning three years after date of enactment, and does not mandate a
specific technology such as LED. There are many luminaires with
traditional sources such as metal halide or high pressure sodium that
will meet the Tier 1 requirements. The bill would prohibit the
manufacture of mercury vapor lamps effective January 1, 2016. Current
law passed by Congress already prohibits the manufacture of mercury
vapor ballasts (which operate the lamps) which went into effect on
January 1, 2008.
A community or business may choose to replace their existing
lighting with LED and the cost benefit will depends on the specific
nature of the installation. The details will depend on the application
type (parking lot, plazas, streets, roadways, etc), the energy cost in
that area, lighting requirements and the type of new luminaires
installed. Today, payback periods are typically in the range of 3-6
years.
______
Response of Joseph M. McGuire to Question From Senator Murkowski
Question 1. As you note in your testimony, the 2007 Energy
Independence and Security Act requires that customers be provided with
timely information and options for controlling energy use. Is your
organization conducting any public outreach on smart grid technologies?
Do you get the sense that consumers understand smart grid products or
is additional public education needed in this arena?
Answer. The Smart Grid is in the nascent stage of development. It
is essential that all stakeholders in development of the Smart Grid
understand that consumers are the key to its success. Yet consumers
themselves are generally unaware of the Smart Grid. According to
Appliance Design Magazine which recently cited an online Harris poll
conducted between January 18 and 25 on Smart Grid awareness, ``two
thirds of Americans have never heard the term Smart Grid (68%) and 63%
have not heard of Smart Meter.'' Yet the survey also found that ``A
majority of U.S. adults (57%) are aware of how much electricity they
are consuming, and an even greater number (67%) say they would reduce
their usage if they had visibility to it.''
AHAM and its members are working hard to educate the public as well
as public utility commissions about the potential benefits of the Smart
Grid to consumers. What is also needed are incentives to consumers to
encourage early adoption of Smart Grid technologies. This includes time
of use electricity pricing and financial incentives to consumers,
retailers and manufacturers to get Smart Appliances online in
residences.
A search of the Internet and news sites shows that Smart Appliances
and the work of appliance manufacturers in this area are being
publicized; however, much more needs to be done and Congress can help.
Congress can increase the visibility of the Smart Grid and Smart
Appliances as manufacturers continue to educate consumers on and
increase awareness of the benefits attributable to Smart Appliances,
such as saving money on their electric bill and managing their energy
use more effectively. Some areas where Congress can help are as
follows:
Authorize the Best-in-Class Appliance Deployment program to
provide incentives to manufacturers to produce Smart Appliances
and educate consumers of their benefits.
Incorporate Smart Grid capability in ENERGY STAR program.
Expand the Energy Efficient Appliance Rebate program to
include Smart Appliances.
Provide Smart Grid peak demand reduction goals so that each
load-serving entity must prepare a peak load reduction plan
that includes Smart Appliances.
We would be pleased to work with you and the committee on these and
other ideas to increase public awareness and understanding of the Smart
Grid and Smart Appliances.
______
Responses of Steven Nadel to Questions From Senator Bingaman
Question 1. Representatives of the Heating, Air-conditioning and
Refrigeration Distributors International have contacted the Committee
staff expressing very serious concerns with Section 5 of S. 3059,
``Prohibited Acts''. Their concern is that, with the establishment of
regional standards for air conditioners and furnaces, it may be illegal
for distributers to operate across the regional boundaries.
Would you please update us on the status of efforts to resolve
their concern?
Answer. We have completed discussions with HARDI and have agreed to
an amendment to S. 3059 to clarify that distributors in one region can
sell at wholesale in other regions. The specific consensus amendment is
attached.
Question 2. The legislation would provide, for the first time, the
ability of the Secretary of Energy to consider the application of
``smart grid technology'' with respect to the energy efficiency
standards for products and equipment. How does this impact the setting
of efficiency standards, and what trade-offs occur between making a
product ``smarter'' versus more efficient?
Answer. Making equipment ``smarter'' provides the potential to save
energy, to reduce peak demand, and to achieve other objectives. In some
cases these goals can be achieved simultaneously (e.g cycling off a
dryer during peak periods saves at peak, but can also save some energy
since residual heat in the dryer evaporates some moisture, shortening
the remaining drying cycle). Sometimes one goal can be achieved without
adversely affecting the other goals (e.g. delaying turning on a
dishwasher until after the peak period ends saves at peak but has no
impact on energy use). But sometimes one or more goals can be achieved
at the expense of another goal (e.g. shutting off a dishwasher during
mid-cycle may save at peak, but increases energy use since the water in
the dishwasher needs to be reheated when the cycle is allowed to
resume). The provision in S. 3059 on smart grid technology directs the
Secretary to review smart grid opportunities and how these
opportunities affect energy use, economics and environmental
objectives, ultimately balancing the different objectives before
setting standards. Essentially, this provision gives the Secretary
another set of technology options to consider and evaluate. However,
these new options must be evaluated in the context of the overall law
which directs that new standards ``shall be designed to achieve the
maximum improvement in energy efficiency,. . ., which the Secretary
determines is technologically feasible and economically justified''.
Given this, our view is that this provision will result in
incorporating smart technologies that either save energy, or that
achieve other benefits but are neutral with regard to energy
consumption. Under the language in the current law, it will be very
difficult to set a standard that increases energy use.
attachment
It shall be unlawful----
(5) for any manufacturer (or representative of a
manufacturer), distributor, retailer or private labeler
(A) to offer for sale or distribute in commerce any new
covered product which is not in conformity with an applicable
energy conservation standard established in or prescribed under
this part, or
(B) where the standard is a regional standard that is more
stringent than the base national standard, to offer for sale or
distribute in commerce any new covered product having knowledge
(consistent with the definition of ``knowingly'' in section
333(b)) that the product will be installed at a location
covered by a regional standard established in or prescribed
under this part and will not be in conformity with such
standard.
Appendix II
Additional Material Submitted for the Record
----------
Statement of Katherine Hamilton, President, GridWise Alliance
Chairman Bingaman, Ranking Member Murkowski, members of the
Committee, thank you for inviting me to submit written testimony on
smart grid provisions proposed by the Energy and Natural Resources
Committee. The GridWise Alliance has testified before this committee on
several occasions and sustains a positive working relationship with
both majority and minority staff by providing unbiased information
about smart grid.
The GridWise Alliance is a coalition of about 125 organizations
advocating for a smarter grid for the public good. Our members broadly
represent the nation's interest in smart grid, including leading
utilities, independent system operators, large IT and communications
companies, small technology companies, manufacturers, consultants,
universities, and research organizations. We operate on a consensus
basis and remain technology neutral, focusing on the policy issues
surrounding the deployment of a smarter grid. We believe the market
should determine which technologies prevail.
The passage of the American Recovery and Reinvestment Act serves as
a watershed event in the history of the nation's electric grid. By
providing over $4 billion in grants for smart grid projects, Congress
effectively elevated the smart grid to a national priority. Utilities
and state regulators have been quick to respond, submitting hundreds of
projects for potential funding. Over 100 projects representing nearly
every state were awarded federal grants. As a result, the transition to
a smarter grid is well underway.
Now we need to turn our attention to the ultimate beneficiary of
the smart grid--the consumer. The smart grid offers greater visibility
into, and control over, electricity consumption, thereby enabling
consumers to better manage their energy bills. To realize these
benefits, however, consumers must have access to two critical suites of
technologies--Home Area Networks (HAN) and smart appliances. Whereas
Home Area Networks process communications between the grid and the
home, smart appliances actually respond to consumer preferences and
signals from the HAN or utility, system operator, aggregator, internet
provider, or even microgrid. For example, consumers with variable rate
plans can program smart appliances to operate when electricity prices
are low, while utilities or other service providers can signal smart
appliances to discretely alter operations during periods of peak
demand. Smart appliances will be the next evolution of demand response.
To be sure, consumer participation in the smart grid is an
evolutionary process. We at the GridWise Alliance believe that the pace
of consumer participation will be determined by three underpinning
efforts: (1) consumer education; (2) support for the smart appliance
market; and (3) adoption of variable rate structures and financial
incentives. Our members are collaborating with consumer advocates,
utilities, and other service providers on the development of consumer
outreach programs; I have spoken with many state utility commissioners
on the need for rate structures that allow consumers to benefit from
their choices. However, the nascent smart appliance market is in urgent
need of support, particularly as consumer spending remains at record
lows and unemployment hovers just below 10%. For these reasons,
Congress can play a crucial role in providing early support for the
market and spurring successive rounds of investment in new
technologies. Not all homes will purchase smart appliances right away,
but support for this market will be a critical step toward encouraging
consumer participation in the smart grid.
Smart appliances will be capable of interacting seamlessly within
home systems to provide energy savings for consumers without
inconveniencing household operations. For example, a smart refrigerator
can cycle off its freezer defrost during peak periods of demand,
thereby allowing the utilities to better manage overall load and
providing consumers with opportunities to reduce their electric bill,
depending on the available incentive programs. We believe that state
rate structures and incentives should complement this technology to
allow consumers to maximize their energy and bill savings. In a weak
economy, a consumer's ability to understand and react to electric
prices will be critical. Smart appliances will offer consumers the
ability to simply and conveniently reduce demand without negatively
impacting their lifestyles.
Smart appliances will also play an important function in
maintaining grid stability. Appliance and chip manufacturers are
developing technologies that can automatically react to conditions (or
``perturbations'') on the grid, even in the absence of signals from
utilities. For example, if a substation transformer fails, a smart
appliance could detect voltage sag and shut down in order to shed load
from the system. With a multitude of such appliances interacting with
the grid, the system becomes much more stable and reliable. The
appliance then becomes important not only to the consumer, but to the
community.
Beyond the grid, the smart appliance market will create new
opportunities for a range of manufacturers. Put simply, these
opportunities can translate into economic growth and improved
competitiveness within our domestic manufacturing base. We believe that
traditional appliance manufacturers as well as innovative start-up
companies should be able to participate in this new market. Although
Congress has voiced its intent to place our country on a pathway to
leadership in the global smart grid market, we must ensure the correct
incentives are in place to realize this vision.
For this reason, we strongly support the provisions in this bill
with expansion suggested in two areas--the consumer's ability to
participate and grid stability. Limiting the scope in paragraph (VII)
to those smart appliances that ``enable demand response or response to
time-dependent energy pricing'' puts the smart appliance industry and
consumers at the mercy of utilities and regulators. As written,
benefits would accrue only for smart appliances sold in service areas
where regulators have put into place demand response and/or variable
rate structures. A homeowner may choose to purchase a smart appliance
because they have the capability to install a home energy management
system from a third party to reduce home energy use without any utility
demand response program or price signals. In addition, smart appliances
should be able to detect and react to voltage sag and harmonic
imbalances, improving grid stability regardless of utility signals.
Both consumer choice and reliability are critical here; including the
words ``consumer choice'' and ``grid stability'' in the bill would
strengthen that provision.
Given the importance of smart appliances to consumer choice, grid
stability and manufacturing competitiveness, the GridWise Alliance
strongly supports the Committee's decision to include smart appliance
language into the draft under discussion at this hearing. In
conclusion, the GridWise Alliance supports smart appliance language in
this bill as a means to prepare the market for consumer choice, reduce
disruptions on our electric utility grid, and stimulate innovation and
manufacturing in the US, providing economic stimulus and job growth.
______
American Gas Association,
Washington, DC, March 9, 2010.
Hon. Jeff Bingaman,
Chairman, Energy & Natural Resources Committee, U.S. Senate, 304
Dirksen Senate Office Building, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy & Natural Resources Committee, U.S. Senate, 709
Hart Senate Office Building, Washington, DC.
Re: S. 3059, National Energy Efficiency Enhancement Act of 2010
Dear Mr. Chairman and Senator Murkowski: I am writing you on behalf
of the American Gas Association (AGA) and its 195 natural gas utility
members. On March 10, 2010, the Energy and Natural Resources Committee
will convene a hearing on S. 3059, the National Energy Efficiency
Enhancement Act of 2010.
We applaud and support your efforts to advance sound energy
efficiency legislation and value the consensus effort that led to S.
3059 but we have serious concerns about the likely negative impact of
the provisions of Section 2(e) (page 14) of the bill with respect to
furnaces, especially as they pertain to the replacement market.
Our primary concern is that Section 2(e) would require that
furnaces manufactured on or after May 1, 2013, for use in ``northern''
states must have an Annual Fuel Utilization Efficiency (AFUE) of at
least 90 percent. While laudable, this mandate could ultimately
encourage consumers to repair rather than replace their furnace or,
worse yet, not make the needed changes on the common-vented water
heater venting system, which could result in a safety hazard.
To prevent this unintended consequence from occurring, AGA proposes
that the bill be amended so that the requirements for a 90 percent AFUE
furnace would apply only to new construction and not replacement
furnaces. Further, AGA proposes making the effective date January 1,
2015. There is no justification for having a longer effective date for
heat pumps than furnaces.
If only 90 percent AFUE furnaces are available, the consumer will
have to take additional steps on the installation and venting of the
furnace, as well as the remaining gas water heater, because 90 percent
AFUE furnaces cannot be common vented (positive pressure in the vent
eliminates the practice of common venting furnaces and water heaters).
This will leave consumers with the dilemma and added cost of addressing
the venting of the remaining water heater (i.e. resizing, relining, or
replacing). This added cost can be substantial ($1,500 to $2,000).
Additional considerations that must be made when requiring a 90 percent
AFUE furnace in the replacement market include: availability to side
wall vent the furnace, condensate disposal provisions and the addition
of a drain pan. These considerations could result in discouraging the
furnace replacement, which is not in anyone's best interest.
While the proponents of this provision may hope that mandating a 90
percent AFUE will result in more 90 percent furnaces, the result in the
real world may well be the repair and continued operation of more 78
percent AFUE furnaces.
One additional concern, especially as we enter a carbon-constrained
world, is that this legislation may well lead to not only higher
consumer costs and potential safety hazards but also to significant
increases in greenhouse gas emissions by forcing a switch from natural
gas water heaters to electric water heaters. The average electric water
heater is, on a national average, responsible for almost twice as much
carbon dioxide as the average natural gas water heater. AGA cannot
believe that this outcome would be the result of for a sound energy
policy.
AGA also questions why the bill does not include a mandate for 90
percent AFUE for oil furnaces. Ninety percent AFUE oil condensing
furnaces are on the market today. While oil furnaces do not have the
degree of market penetration that natural gas furnaces have, imposing
such a mandate would certainly assist the United States in reducing its
dependence on foreign oil imports.
And lastly, AGA questions why the bill does not address electric
resistance furnaces. AGA would support a provision that would prohibit
electric resistance furnaces in new construction or replacement
markets, particularly in the ``northern'' states. Although electric
resistance furnaces have a 100 percent AFUE, on a national average
basis they require almost three times as much source energy and are
responsible for almost three times as much carbon dioxide as a
comparable natural gas furnace.
We respectfully request that you make these modifications. Please
contact AGA' s Jeffrey Petrash at [email protected], or 202.824.7231, if
we can provide further information on these points.
Thank you for considering our views.
Sincerely,
David N. Parker,
President and CEO.
______
Entertainment Software Association,
June 8, 2009.
Hon. Jeff Bingaman,
Chairman, Energy & Natural Resources Committee, U.S. Senate, 304
Dirksen Senate Office Building, Washington, DC.
Dear Chairman Bingaman: Per the request of staff, the Entertainment
Software Association (ESA) respectfully submits this statement of
support on behalf of the video game industry for an amendment by
Senator Robert Menendez that would require the Secretary of Energy to
undertake a study of video game console energy use and opportunities
for energy savings.
The video game industry is constantly striving for more efficient
and effective use of energy among its product lines. To further this
ongoing effort, console manufacturers have been working cooperatively
and voluntarily for some time with the Environmental Protection Agency
to reduce energy usage by developing EnergyStar standards.
The industry remains dedicated to environmentally-friendly product
design and energy conservation. We look forward to continuing to work
with the Committee on these issues.
The ESA is the U.S. association exclusively dedicated to serving
the business and public affairs needs of companies that publish
computer and video games for video game consoles, personal computers,
and the Internet.
Sincerely,
Michael D. Gallagher,
President and CEO.
______
Nintendo of America, Inc.,
Redmond, WA, April 25, 2009.
Hon. Robert Menendez,
U.S. Senate, 528 Hart Senate Office Building, Washington, DC.
Dear Senator Menendez: Nintendo of America Inc. (Nintendo) has been
in discussions in recent weeks with your staff regarding the energy
efficiency of video game consoles. As you know, this topic was the
subject of a report late last year issued by the Natural Resources
Defense Council. That report found Nintendo's Wii console to be the
most energy efficient of the current generation of video game consoles.
The report indicated that average energy cost of the Wii for players
who turn their systems off after use was only $3 per year, and only $10
per year for players who leave their systems on after use. Even in
active mode, the Wii uses only 16.4 watts of power--roughly equal to a
high-efficiency lightbulb.
Nintendo has reviewed a draft amendment provided by your staff
which would require the Secretary of Energy to undertake a study of
video game console energy use and opportunities for energy savings. You
may be aware that all console manufacturers are working closely and
cooperatively with the Environmental Protection Agency to develop
EnergyStar standards for our industry. Nevertheless, Nintendo has no
objection to the study called for in the amendment your staff has
provided us. We pledge our full cooperation should the Secretary
undertake such a study.
Sincerely,
Richard C. Flamm,
Senior Vice President and General Counsel.
______
Natural Resources Defense Council,
May 8, 2009.
Hon. Jeff Bingaman,
Chairman, Energy & Natural Resources Committee, U.S. Senate, 703 Hart
Senate Office Building, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy & Natural Resources Committee, U.S. Senate, 709
Hart Senate Office Building, Washington, DC.
Dear Chairman Bingaman and Ranking Member Murkowski: On behalf of
our more than 1.2 million members and activists, I write to urge your
support of Senator Menendez's proposal to direct the Department of
Energy (DOE) to conduct a comprehensive study on the energy use and
efficiency potential of video game consoles.
An initial study commissioned by the Natural Resources Defense
Council (NRDC) in 2008 showed that current video game consoles use
excessive amounts of power in various operating modes and that
mandatory standards might be needed to move manufacturers towards more
energy efficient designs. Under some usage patterns, such as when the
user fails to turn the device off after use, some of today's models may
consume as much annual electricity as two new refrigerators.
The somewhat unique nature of this product category--e.g. only
three products on the market, extended periods between new model
releases, and the trend towards adding new features such as DVD
playback to these devices--may give rise to some unique challenges
while developing standards. As such, Senator Menendez's proposal to
direct the DOE to conduct an in-depth analysis of the energy use and
savings potential from current and pending products represents the best
next step.
With this information in hand, the DOE will be in a better position
to determine whether or not to recommend development of standards. This
incremental approach also provides stakeholders with the opportunity to
monitor the success of the pending ENERGY STAR specification for video
game consoles.
Sincerely,
Franz A. Matzner,
Acting Legislative Director.
______
Statement of Riley R. Russell, Sr. Vice President Chief Legal Officer,
Sony Computer Entertainment America, Foster City, CA, on S. 1969
Dear Chairman Bingaman: On March 10, 2010, the committee held a
hearing to receive testimony on the Green Gaming Act of 2009, The Water
Heater Rating Improvement Act of 2009, the National Energy Efficiency
Enhancement Act of 2010, and other energy efficiency bills. SCEA would
like to take this opportunity to correct the official record by
responding to erroneous statements made during the course of the
hearing and I respectfully request that this letter be included as part
of the record.
During statements made by the witness panel, Mr. Steven Nadel,
Executive Director of the American Council for an Energy-Efficient
Economy, incorrectly stated that the energy consumption of the
PlayStation3 (PS3) is equivalent to two refrigerators:
...The new PlayStation3, or relatively new, the Xbox 360,
they use 100 to 150 watts when on. So if you're gaming, even if
you're not gaming, you know, you leave it on because you wanted
to save the game and come back where you left off or you turn
off the TV and forgot to turn off the Xbox, they still use 100
to 150 watts. We heard from Joe McGuire say that the average
refrigerator uses an equivalent of a 60-watt light bulb left on
continuously. These gaming systems use twice as much as energy
when on. So equivalent of two refrigerators if you leave them
on all the time....
Throughout the hearing, Mr. Nadel made statements that were either
incorrect or greatly misinformed about the PlayStation 3. Moreover Mr.
Nadel's characterization of how games are played and saved do no
comport with how modern video games are played. For example, when asked
about the popularity of video games consoles in America and how much
energy they use, Mr. Nadel stated:
My understanding is that about 40% of American households
have at least one of these videogame consoles. As you pointed
out, if they are left on all the time, they can use 100, 150
watts continuously and that's as much energy as two
refrigerators. So that's really an enormous source of energy
use and one that has really grown in the last decade or so.
A game console's normal operation is to be on while actively used
by the player and then powered down as with most unattended consumer
electronics. Any usage comparison to a refrigerator that is required to
be on all the time for ``normal'' operation is an invalid comparison.
Not only are the technologies involved vastly different but so are the
usage models. A more typical usage model for PlayStation 3 would be 1
to 2 hours per day of average active on time and the annual energy
consumption scales back accordingly.
Most game console manufacturers either have or will soon have auto
power down features enabled to prevent consumers from inadvertently
leaving the console on for extended periods of time. Not only do all
new PlayStation 3 consoles ship with this functionality, because the
system can be updated through firmware updates over the internet and
through software, auto power down functionality has been added to the
original PlayStation currently owned by consumers. Moreover, as all
modern game consoles have robust game save features, there is no
functional need to leave a console on to save a place within a game.
Finally you should know that Sony Computer Entertainment, and the
industry, is committed to improving energy efficiency. The energy
consumption of video game consoles, especially the PlayStation 3, is
rapidly changing and becoming more and more efficient within each
generation. The current model PlayStation 3 now uses almost 55% less
energy than the original model in active game play mode and 65% less in
standby mode. Standby mode is, in effect, ``off'. This 65% reduction is
significant because this is the state the console is in most--off.
Significant efforts to further reduce energy consumption and support
practical auto-power down modes continue.
Thank you in advance for your attention to this matter.