[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


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               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.

                                    

      
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