Energy Efficiency: Long-standing Problems with DOE's Program for
Setting Efficiency Standards Continue to Result in Forgone Energy
Savings (31-JAN-07, GAO-07-42).
The Department of Energy (DOE) sets energy efficiency standards
through the rulemaking process for certain consumer product
categories, such as kitchen ranges, and industrial equipment,
such as distribution transformers. Congress reported in 2005 that
DOE was late in setting standards and required DOE to report
every 6 months on the status of the backlog. GAO examined (1) the
extent to which DOE has met its obligations to issue rules on
minimum energy efficiency standards for consumer products and
industrial equipment and (2) whether DOE's plan for clearing the
backlog will be effective or can be improved. Among other things,
GAO convened an expert panel on energy efficiency standards to
identify causes and effects of delays and assess DOE's plans.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-42
ACCNO: A65468
TITLE: Energy Efficiency: Long-standing Problems with DOE's
Program for Setting Efficiency Standards Continue to Result in
Forgone Energy Savings
DATE: 01/31/2007
SUBJECT: Accountability
Commercial products
Energy costs
Energy efficiency
Federal regulations
Policy evaluation
Reporting requirements
Schedule slippages
Standards
Strategic planning
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GAO-07-42
* [1]
* [2]Results in Brief
* [3]Background
* [4]DOE Has Missed All Rulemaking Deadlines at a Cost of Billion
* [5]DOE Has Not Met Any of Its Rulemaking Obligations on Time
* [6]Delays Resulted in Forgone Energy Savings of at Least $28
Bi
* [7]Effectiveness of DOE's Catch-Up Plan Is Uncertain
* [8]DOE's Plan Lays Out an Approach to Clearing the Backlog,
but
* [9]DOE's Plan Lacks Critical Elements of Effective Project
Mana
* [10]Conclusions
* [11]Recommendations for Executive Action
* [12]Agency Comments and Our Evaluation
* [13]Appendix I: Status of the Department of Energy's Model Build
* [14]DOE Has Completed One of Three Commercial Building Code Dete
* [15]DOE Has Completed Four of Five Residential Building Code Det
* [16]DOE Tracks States' Building Codes
* [17]Appendix II: Objectives, Scope, and Method
* [18]Appendix III: Rulemakings and Delays for Consumer Products a
* [19]Appendix IV: Participants in Energy Efficiency Standards Del
* [20]Appendix V: Comments from the Department of Energy
* [21]Appendix VI: GAO Contact and Staff Acknowledgments
* [22]GAO Contact
* [23]Staff Acknowledgments
* [24]Order by Mail or Phone
Contents
Letter 1
Results in Brief 5
Background 6
DOE Has Missed All Rulemaking Deadlines at a Cost of Billions in Forgone
Energy Savings 9
Effectiveness of DOE's Catch-Up Plan Is Uncertain 13
Conclusions 19
Recommendations for Executive Action 20
Agency Comments and Our Evaluation 20
Appendix I Status of the Department of Energy's Model Building Code
Determinations 23
DOE Has Completed One of Three Commercial Building Code Determinations 25
DOE Has Completed Four of Five Residential Building Code Determinations 26
DOE Tracks States' Building Codes 27
Appendix II Objectives, Scope, and Method 29
Appendix III Rulemakings and Delays for Consumer Products and Industrial
Equipment with Deadlines That Have Passed 31
Appendix IV Participants in Energy Efficiency Standards Delphi Panel 33
Appendix V Comments from the Department of Energy 36
Appendix VI GAO Contact and Staff Acknowledgments 40
Tables
Table 1: Actions DOE Is Required to Take for Consumer Product and
Industrial Equipment Categories with Rulemaking Deadlines 8
Table 2: Timeliness of DOE Rulemakings That Have Come Due 9
Table 3: Status of Efficiency Standards for Consumer Products and
Industrial Equipment with Rulemaking Deadlines That Have Passed 10
Table 4: Status of Required Industrial Equipment Standards Revisions
without Deadlines 11
Table 5: Status of DOE's Review of ASHRAE Standard 90.1 Revisions 26
Table 6: Status of DOE's Review of MEC and IECC Revisions 26
Abbreviations
ASHRAE American Society of Heating, Refrigerating and Air- Conditioning
Engineers
Btu British thermal unit
CABO Council of American Building Officials
DOE Department of Energy
DOT Department of Transportation
EPAct 2005 Energy Policy Act of 2005
EPCA Energy Policy and Conservation Act
ICC International Code Council
IECC International Energy Conservation Code
LBNL Lawrence Berkeley National Laboratory
MEC Model Energy Code
PMF Presidential Management Fellows
PNNL Pacific Northwest National Laboratory
This is a work of the U.S. government and is not subject to copyright
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separately.
United States Government Accountability Office
Washington, DC 20548
January 31, 2007
The Honorable John D. Dingell
Chairman
Committee on Energy and Commerce
House of Representatives
The Honorable Rick Boucher
Chairman
Subcommittee on Energy and Air Quality
Committee on Energy and Commerce
House of Representatives
The Honorable Edward J. Markey
House of Representatives
Recent energy cost increases and concerns about global warming are leading
to a new national focus on reducing U.S. energy consumption. Household and
commercial products that are regulated by the U.S. Department of Energy
(DOE) will account for about 30 percent of estimated total U.S. energy
consumed in 2006, according to DOE's Lawrence Berkeley National
Laboratory. Increasing the energy efficiency of these kinds of products
could produce significant energy savings. Not surprisingly, therefore,
Congress has long been interested in improving energy efficiency. In 1975,
under the Energy Policy and Conservation Act (EPCA), Congress required DOE
to set target minimum energy efficiency standards for manufacturers of
specified categories of consumer products such as refrigerators,
dishwashers, furnaces, and hot water heaters. Congress has amended the
statute to include additional consumer product categories such as
fluorescent lamps and plumbing products, as well as industrial equipment
categories such as steam boilers and electric motors. Minimum efficiency
standards for consumer product and industrial equipment categories are
designed to eliminate the least efficient products from the market.^1
1DOE's energy efficiency standards program is separate from the Energy
Star program, which is a joint DOE-Environmental Protection Agency
voluntary labeling program that identifies and promotes the products that
meet the most efficient energy conservation standards.
EPCA, as amended, also reflects manufacturers' and states' interest in
having uniform federal standards for energy-efficient products, rather
than a patchwork of state standards. It prohibits states and localities
from setting more stringent standards than the federal standards for
covered products unless the states obtain waivers from DOE. When the act
was passed, several states were setting their own energy efficiency
standards, and stakeholders, including states and manufacturers, generally
believed that uniform federal standards would result in lower costs for
manufacturing and, hence, lower prices for consumers, as well as saving
energy overall.
Under EPCA amendments, Congress mandated deadlines for DOE to issue rules
that set minimum energy efficiency standards for most consumer product
categories. Congress also made manufacturers' compliance with the
standards mandatory. The statute also requires DOE to set and revise
standards through the federal rulemaking process. This process calls for
analyzing the technical and economic issues associated with setting energy
efficiency standards for each category, proposing a standard through
public notification, soliciting comments on the standard, revising the
rule, and issuing the final rule. DOE program staff in Washington develop
these rules, using analysis by experts--such as staff at Lawrence Berkeley
National Laboratory (LBNL) and other contractors--on the technical and
economic aspects. The rules undergo legal and policy reviews within the
department before they are issued.
Most of the categories with deadlines require at least two rules--either
to set an initial standard and later update it or to update a
congressionally set standard and then update it again about 5 years after
the first deadline. For categories without deadlines, DOE must first
review revisions that nongovernmental standard-setting entities make to
their model standards and, generally, issue a rule announcing whether it
will adopt these revised model standards or reject them and issue its own
standards.
In 1993, we reported that while DOE had issued rules for some of the
product categories with passed deadlines, these had always been issued
late, and the others had not been issued yet. We cited inadequate
resources as a major reason for delays.^2 Congressional action in 2005
reflected continuing concerns about DOE's ability to issue rules for
energy-efficient consumer products and industrial equipment. The Energy
Policy Act of 2005 (EPAct 2005) required DOE to report to Congress by
February 8, 2006, and again every 6 months following the submission of
that report, on its plans to clear its backlog of standards that need to
be set or considered for revision. In its first report, submitted in
January 2006,^3 DOE reported a backlog of required rulemakings for many
consumer product and industrial equipment categories but made a
commitment, from the Secretary on down, to take a number of steps to clear
the backlog by 2011.^4 Twenty of these consumer product and industrial
equipment categories have statutory deadlines that have passed and involve
34 different product rules.^5
2GAO, Energy Conservation: Appliance Standards and Labeling Programs Can
Be Improved, [25]GAO/RCED-93-102 (Washington, D.C.: March 1993).
The requirement for reports to Congress every 6 months highlights the
importance Congress places on setting energy efficiency standards for
specific consumer products and industrial equipment. The missed deadlines
have meant missed opportunities to reduce (1) consumers' energy costs, (2)
the need for new power facilities, and (3) the level of polluting
emissions such as carbon dioxide, among other things. While some consumers
may choose to buy products that are more efficient without waiting for
federal standards, others may not do so for a number of reasons--because
the more efficient products may cost more at the time of purchase, for
example. If, however, all models in a category have to meet certain
minimum energy efficiency standards, then the potential for savings over
the life of the product, due to lower energy bills, can be significant.
For example, by 2030, for the minimum energy efficiency standards for
consumer products that DOE has set thus far, DOE projects that consumers
will save nearly $125 billion. Enough energy would be saved to operate all
U.S. homes for over 2 years, based on 2006 estimated energy consumption.
As requested, this report examines (1) the extent to which DOE has met its
statutory obligations to issue rules on minimum energy efficiency
standards for consumer products and industrial equipment and (2) whether
DOE's plans are likely to clear the backlog of required rulemakings and
whether these plans could be improved. In addition, you asked us to assess
whether DOE has met statutory deadlines for building code determinations
(see app. I). In future work, GAO plans to evaluate federal agencies'
efforts to provide household consumers with information about energy
savings opportunities for purchases of appliances, lighting, and other
energy consuming products.
^3Department of Energy, Energy Conservation Standards Activities.
(Washington, D.C.: Jan. 31, 2006).
^4The second report, released in August 2006, reiterated the catch-up plan
and reported on DOE's actions toward clearing the backlog. These actions
include making progress on and issuing rules related to the
standards-setting process, but none established new standards for the
products and equipment included in the scope of this report.
^5This reported backlog did not include an additional 17 product
categories added by EPAct 2005 to DOE's mandate for setting energy
efficiency standards, 9 of which have deadlines for DOE rulemakings. These
additional responsibilities were not part of our review.
We reviewed statutes and regulations regarding the requirements and
deadlines for minimum energy efficiency standards for consumer products
and industrial equipment. We interviewed relevant officials from, and
analyzed documentation provided by, DOE, a DOE contractor, energy
organizations, and nongovernmental standard-setting entities; an expert on
regulatory efficiency; and government officials from Canada and
California--governments that are known for their exemplary
standards-setting programs.^6 In addition, we convened a Web-based panel
of 33 energy efficiency standards stakeholders from federal and state
governments, industry, nonprofit organizations, and utilities who are both
widely recognized as knowledgeable about key aspects of energy efficiency
standards and are involved with DOE's standards rulemaking process. We
obtained panel members' views using a modified, Web-based version of the
Delphi method, a systematic process for obtaining individuals' views and
obtaining group members' consensus, if possible, on a problem of interest.
A more detailed description of our objectives, scope, and method is
presented in appendix II. We did not examine the merits of the standards
DOE has set. Although DOE is required to issue rules regarding standards
for plumbing products, we excluded them from this report because they
primarily involve conserving water, rather than energy. In addition, we
did not consider deadlines for the purposes of this report set in EPAct
2005; nor did we examine DOE's activities undertaken since EPAct 2005 that
did not result in a completed standard. We conducted our review from June
2005 through January 2007 in accordance with generally accepted government
auditing standards.
^6California has set standards for products not covered under federal law,
such as commercial clothes washers and external power supplies for
electronic devices such as laptop computers, mobile phones, printers, and
digital cameras.
Results in Brief
DOE has missed all 34 of the deadlines for rulemaking that have come due
for the 20 consumer products and industrial equipment categories with
deadlines that have passed. In addition, it has not revised standards for
one of the six industrial equipment categories that have no deadlines but
for which DOE is obligated to issue new rules. Of the 34 rules with missed
deadlines, 11 were issued late, and the other 23 have not been issued at
all. Delays in meeting deadlines range from about 2 months to 15 years.
Overall, all required rulemakings have been set for only three product
categories with deadlines: (1) refrigerators, refrigerator-freezers, and
freezers; (2) small furnaces; and (3) clothes washers. DOE has yet to set
all required rulemakings for 17 additional categories such as--for
consumer products--kitchen ranges and ovens, dishwashers, clothes dryers,
hot water heaters, and--for industrial equipment--various electric motors
and electric distribution transformers, which reduce the voltage of an
electric utility's power distribution line to the lower voltages suitable
for most equipment, lighting, and appliances. In addition, standards are
up to date for five of the six industrial equipment categories that have
no deadlines but which must have standards set: (1) warm air furnaces, (2)
packaged boilers, (3) storage water heaters, (4) instantaneous water
heaters, and (5) unfired water storage tanks (that store water and have an
external source for heating it). The sixth category--a particular type of
large air conditioner and heat pump--has not had standards set. Our panel
members cited increased energy consumption as one of the most significant
effects of the delays. In fact, according to LBNL, the delays for the four
consumer product categories with the greatest energy savings potential
will cost the nation an estimated $28 billion in forgone savings by 2030.
Our panel also pointed to other potential effects of delays, such as
states attempting to set their own efficiency standards and manufacturers'
and utilities' difficulties in making business plans. Standards that
differ from state to state would be likely to cause higher manufacturer
costs than a single federal standard and, hence, higher costs for
consumers.
It is unclear whether DOE's latest plan for clearing its backlog of
rulemakings will effectively bring its minimum energy efficiency standards
up to date, primarily because DOE cannot be certain it knows the root
causes of the delays, and its catch-up plan lacks critical elements of an
effective project management plan. Specifically:
o Root causes are uncertain. Neither DOE nor our panel could agree
on, and we could not definitively determine, the root causes of
the delays. DOE has not developed the program management data it
needs to identify bottlenecks in the rulemaking process and
develop solutions. As a result, we could not determine if the
corrective actions DOE has proposed will alleviate delays. In
developing the catch-up plan, the managers relied primarily on
anecdotal information from program staff to determine the causes
of delays. In the absence of management information, such as the
length of each stage of DOE's rulemaking process, we were not able
to determine which of these causes or combinations of causes
account for the delays. Some of our panelists raised concerns that
DOE may not be addressing what they believe are the most relevant
reasons for delays; for example, DOE may not have allocated
sufficient funding or assigned adequate technical staff. Unless
the causes of the delays are known, it is difficult to know
whether problems have been addressed. But, most of the panelists
rated the components of DOE's plan highly and expect that it will
help DOE meet the deadlines of its catch-up schedule if these
actions are implemented.
o The plan lacks critical project management elements. According
to leading project management practices, effective project plans
have two key components that are lacking in DOE's plan. First,
plans should hold officials and staff accountable for meeting
interim and final deadlines. If the officials do not meet these
deadlines, they should provide legitimate reasons for the delays.
Second, the plan should include provisions for adequate resources.
Instead, DOE's plan increases the workload sixfold over that in
recent years without increasing proportionately the resources it
will devote to the program. DOE officials told us they plan to
rely on increased productivity, with only a marginal increase in
resources, to bring the standards up to date. Furthermore, DOE's
plan does not include a means of ensuring that staff and reviewers
are accountable for meeting deadlines.
To help ensure that DOE reduces or eliminates the backlog, we are
making recommendations to the Secretary of Energy that DOE revise
its catch-up plan to incorporate leading management practices. In
commenting on a draft of this report, DOE did not provide views on
our recommendations. DOE said it was incorrect to single out any
official or office for the delays and that the report did not
reflect many of its standards-setting activities undertaken since
EPAct 2005. We disagree with DOE's characterization of our
analysis. We reported several causes of delays in the
standards-setting process; also, the activities DOE has taken
since EPAct 2005 that did not result in completed standards are
outside of the scope of this report.
Background
Under EPCA, as amended, covered product and equipment categories
may need one or two rulemakings for the following reasons:
o Most often, if Congress established a standard in the law, DOE
must publish a rule revising the standard or explaining why a
revision is not justified. Generally, such statutes require two
rulemakings: an initial revision and then a second revision,
usually 5 years later. This type of rulemaking is associated with
most categories.
o For several consumer products for which Congress did not set a
standard in law, DOE must issue two rules--one rule to create a
standard and a later rule to update the standard.
o For several industrial equipment categories for which Congress
established a standard in law, DOE must review amendments to model
standards set by a specified nongovernmental standard-setting
entity. Based on DOE's review, it must either publish a rule
updating the statutory standards to reflect the amended model
standards, or publish a rule demonstrating that a more stringent
standard is justified. The statute specifically requires DOE to
consider the standards set by the American Society of Heating,
Refrigerating and Air-Conditioning Engineers (ASHRAE).
o For three other industrial equipment categories, DOE must first
publish a determination of whether a standard is needed. If DOE
determines the need for a standard, it must then publish a rule
setting such a standard 18 months after publishing the
determination. However, DOE does not have a deadline for making a
determination.
Overall, DOE is required to determine that revisions to standards
achieve the maximum improvement in energy efficiency that is
"technologically feasible and economically justified." In
determining whether a standard is economically justified, DOE must
consider the economic impacts of the revision on manufacturers and
consumers, the savings in operating costs throughout the life of
the product, the total projected amount of energy savings likely
to result from the standard, and whether the standard would result
in a product that is less useful or does not perform as well.
Table 1 shows the number of deadlines and types of actions
required for consumer product and industrial equipment categories
with deadlines that have passed. In addition, DOE is obligated to
issue rules adopting revised standards for another six industrial
equipment categories: packaged terminal air conditioners and
packaged terminal heat pumps; warm air furnaces; packaged boilers;
storage water heaters; instantaneous water heaters; unfired water
storage tanks. DOE has no mandated deadlines for issuing these
rules.
Table 1: Actions DOE Is Required to Take for Consumer Product and
Industrial Equipment Categories with Rulemaking Deadlines
Number of rulemaking
Action required for consumer product or deadlines that have come
industrial equipment categories due
Consumer products
Issue a rule revising a standard or explaining
why a revision is not justified
1 Clothes washers 2
2 Refrigerators, refrigerator-freezers, and 2
freezers
3 Small furnaces 1
4 Central air conditioners and heat pumps 2
5 Clothes dryers 2
6 Dishwashers 2
7 Fluorescent lamp ballasts 2
8 Room air conditioners 2
9 Water heaters 2
10 Direct heating equipment 2
11 Furnaces 1
12 General service fluorescent lamps and 2
incandescent reflector lamps
13 Additional general service fluorescent and 1
general service incandescent lamps
14 Kitchen ranges and ovens 2
15 Mobile home furnaces 1
16 Pool heaters 2
Subtotal--number of consumer product rules 28
required
Industrial equipment
Issue a rule revising a standard or explaining
why a revision is not justified
17 Electric motors not requiring national 2
certification
18 Electric motors requiring national 2
certification
Issue a determination of whether a revision is
justified, and, if so, issue a rule setting
the standard
19 Distribution transformers 1
20 Small electric motors 1
Subtotal--number of industrial equipment rules 6
required
Total--number of rules required for consumer 34
products and industrial equipment
Source: GAO analysis of DOE data.
Note: The numbers in the column on the left represent the number of
product categories.
DOE Has Missed All Rulemaking Deadlines at a Cost of Billions in Forgone Energy
Savings
DOE has missed all 34 of the rulemaking deadlines that have come due for
the 20 product categories with deadlines, completing 11 of these rules
late and not yet completing the remaining 23. DOE has also not revised
standards for one of the six industrial equipment categories that require
updates but have no deadlines. LBNL estimates that delays in setting
minimum energy efficiency standards for four categories of consumer
products that DOE believes use the most energy will cost the nation at
least $28 billion in forgone energy savings by 2030. Our panel members
identified two additional significant effects of the delays: states
attempting to set their own standards and businesses and utilities having
difficulty in making business decisions and planning for the future.
DOE Has Not Met Any of Its Rulemaking Obligations on Time
As table 2 shows, none of the 34 rules with passed deadlines was completed
on time. For rules that have been completed, delays ranged from less than
1 year to about 10 years; and incomplete rules are as much as 15 years
late.
Table 2: Timeliness of DOE Rulemakings That Have Come Due
Status Completed rulemakings Incomplete rulemakings
On time 0 0
Less than 1 year late 2 1
1 year to less than 5 years 4 2
late
5 years to less than 10 years 5 8
late
10 years to 15 years late 0 12
Total 11 23
Source: GAO analysis of DOE data.
Table 3 shows the status of rules completed for consumer product and
industrial equipment categories with deadlines that have passed. As the
table shows, only three product or equipment categories--clothes washers;
refrigerators, refrigerator-freezers, and freezers; and small
furnaces--have had all their rules completed. As the table also shows,
some categories have had one of two required rules completed, and others
have had no rules completed.
Table 3: Status of Efficiency Standards for Consumer Products and
Industrial Equipment with Rulemaking Deadlines That Have Passed
Number of
rulemaking Status and number
Consumer product or industrial deadlines that of completed rules
equipment category have come due (in parentheses)
Consumer products
1 Clothes washers 2 All rules completed
(2).
2 Refrigerators, 2 All rules completed
refrigerator-freezers, and freezers (2).
3 Small furnaces^a 1 All rules completed
(1).
4 Central air conditioners and heat 2 First rule
pumps completed (1).
5 Clothes dryers 2 First rule
completed (1).
6 Dishwashers 2 First rule
completed (1).
7 Fluorescent lamp ballasts 2 First rule
completed (1).
8 Room air conditioners 2 First rule
completed (1).
9 Water heaters 2 First rule
completed (1).
10 Direct heating equipment 2 No rules completed.
11 Furnaces 1 No rules completed.
12 General service fluorescent lamps 2 No rules completed.
and incandescent reflector lamps
13 Additional general service 1 No rules completed.
fluorescent and general service
incandescent lamps^a
14 Kitchen ranges and ovens 2 No rules completed.
15 Mobile home furnaces^a 1 No rules completed.
16 Pool heaters 2 No rules completed.
Industrial equipment
17 Electric motors-not requiring 2 No rules completed.
national certification
18 Electric motors-requiring national 2 No rules completed.
certification
19 Distribution transformers^a 1 No rules completed.
20 Small electric motors^a 1 No rules completed.
Total 34 (11)
Source: GAO analysis of DOE data.
Note: The numbers in the column on the left represent the number of
product categories.
aOnly one rulemaking required.
Appendix III provides additional information on the deadlines for these
product and equipment categories.
Furthermore, for the six industrial equipment categories that do not have
deadlines, DOE has completed rules for five and has begun, but not
completed, the rulemaking process for the remaining category, as table 4
shows.
Table 4: Status of Required Industrial Equipment Standards Revisions
without Deadlines
Date of ASHRAE
Industrial equipment category revision DOE action
Packaged terminal air conditioners and 1999 Rule not completed.
heat pumps
Warm air furnaces 1999 Rule completed.
Packaged boilers 1999 Rule completed.
Storage water heaters 1999 Rule completed.
Instantaneous water heaters 1999 Rule completed.
Unfired water storage tanks 1999 Rule completed.
Source: GAO analysis of DOE data.
Delays Resulted in Forgone Energy Savings of at Least $28 Billion and Create
Problems in Other Areas
DOE does not have estimates of the energy savings lost because of delays
in completing rules. However, LBNL staff provided us with estimates of
delays for the four categories of consumer products that DOE believes use
the most energy--refrigerators and freezers, central air conditioners and
heat pumps, water heaters, and clothes washers. According to these
estimates, the nation would have saved at least $28 billion in energy
costs, even after paying higher equipment costs, by 2030 if these
standards had been put in place when required--that is, 2.1 quadrillion
British thermal units (Btu) of natural gas and 1.4 quadrillion Btus of
electricity. Historically, LBNL, under contract to DOE, has performed most
of the technical and economic analyses for proposed standards rulemakings.
To estimate the cost of delays, LBNL staff used the estimates of savings
they developed to support proposed standards for the four consumer
products. According to our analysis, LBNL took steps to ensure the
estimates were reasonably accurate by considering such factors as whether
the technologies used for the analysis would have been available at the
time of the deadlines for setting standards. The total forgone energy
savings is equal to the annual primary energy consumption of approximately
20 million U.S. households. In addition, the delays will also result in 53
million tons of carbon dioxide emissions, an amount equivalent to about 1
percent of total estimated U.S. carbon dioxide emissions in 2004. Our
panelists noted that they consider increased energy consumption to be one
of the two most significant effects of DOE's delays in revising efficiency
standards.
Similarly, delays for one type of industrial equipment, electric
distribution transformers, have resulted in significant forgone energy
savings. Distribution transformers reduce the voltage of an electric
utility's power distribution line to the lower voltages suitable for most
equipment, lighting, and appliances. Nine years ago, DOE determined that
standards for distribution transformers were warranted as technologically
feasible and economically justified and were likely to result in
significant savings. However, DOE did not publish proposed standards for
distribution transformers in the Federal Register until August 2006.^7
According to DOE, the energy savings from the proposed distribution
transformer standards would eliminate the need for approximately 11 new
400-megawatt power plants by 2038, enough to provide a sufficient flow of
electricity to about 3 million homes.^8
These estimates account for only a portion of the forgone savings from the
lack of timely rules for consumer products and industrial equipment;
however, no estimates of the forgone savings are available for the
remaining product and equipment categories. Equally important, because
many energy-using products and equipment have long service lives, delays
in setting standards lead to years of using the products and equipment
that are less energy efficient than they could be, compounding the loss of
the energy efficiency. For example, electric distribution transformers
have a typical service life of about 30 years. With about 50 million
transformers in the United States, each year of delay until a rule setting
standard is completed means that more of these transformers will be
replaced at the present energy efficiencies, rather than the proposed
level, leading to many additional years of forgone savings.
Other, nonquantifiable effects have also resulted, or can result, from
delays in issuing energy efficiency rules. Our panel members noted the
possibility that states would attempt to set their own appliance
efficiency standards as the other most significant effect of delays.
Indeed, states are dissatisfied with DOE's delays. In 2005, 15 states and
New York City sued DOE for "foot-dragging [that] results in greater ---and
avoidable--energy use." The states cited, among other effects, high energy
costs, increased environmental harm, and burdens on the electricity grid
from DOE's delays as justification for their actions. The suit was settled
recently, with DOE agreeing to eliminate its backlog by 2011, the same
date set in its report to Congress. According to officials from the
California Energy Commission, California has begun to press Congress to
lift the preemption that prevents the states from readily setting their
own standards. While states had expressed dissatisfaction with the pace of
rulemaking and before 1987 had petitioned DOE for waivers, the 1987
amendment to EPCA made it considerably more difficult to obtain a waiver,
according to DOE officials. Since then, DOE has received only one petition
for a waiver. Panel members commented that if states obtain waivers and
pass individual standards, the result could be a patchwork of state
standards, preventing economies of scale in manufacturing and raising
costs for both consumers and manufacturers.
^7Before DOE published proposed distribution transformer standards, the
Energy Policy Act of 2005 established energy conservation standards for
low-voltage, dry-type distribution transformers. Pub. L. No. 109-58
S135(c)(3) (codified at 42 U.S.C. S 6295(v)). Consequently, DOE's proposed
standards do not apply to these types. 71 Fed. Reg. 44,356, 44,357 (Aug.
4, 2006).
^8A megawatt is a measure of a flow of electricity; 1,000 megawatts is a
sufficient flow of electricity to power about 750,000 homes.
Panel members also pointed out that delays make business planning
difficult for manufacturers and utilities, which could also increase their
costs and, therefore, costs to consumers. As one panel member noted,
"Product manufacturers don't know when new standards will take effect in
advance, making it difficult to plan product redesigns and thereby
increasing cost of compliance." According to another panelist, "An
uncertain future regulatory environment makes it very difficult for
appliance and equipment manufacturers to make investment decisions." For
example, a manufacturer may be reluctant to invest large sums in a new
technology if the new technology may be made obsolete by new federal
efficiency standards or if new standards might not allow the manufacturer
to gain a hoped-for competitive advantage via new technology. To minimize
such uncertainty and its attendant risks, manufacturers want DOE to make
regulatory decisions on time."
Effectiveness of DOE's Catch-Up Plan Is Uncertain
DOE has developed a catch-up plan to resolve the backlog of delayed energy
efficiency standards. However, since DOE has not completely identified the
root causes for the delays and because the plan lacks critical elements of
an effective management approach, the likelihood of success is not clear.
DOE's Plan Lays Out an Approach to Clearing the Backlog, but It Is Unclear
Whether the Plan Is Addressing Root Causes of Delays
According to DOE's January 2006 report to Congress, the department has
identified four causes of delays in its efficiency standards rulemaking:
(1) an overly ambitious schedule set in statute; (2) the sequential nature
of the rulemaking process; (3) the consequences of the Process Rule, which
the report states that DOE adopted in 1996 to address concerns about its
analyses and stakeholder involvement; and (4) DOE's internal document
review and clearance process. Specifically:
o An ambitious statutory schedule. According to the report,
Congress's rulemaking schedule was "rigorous." As a result, the
program staff were unable to meet the deadlines from the
beginning. These delays were exacerbated when Congress increased
the number of products that required rulemakings. In 1994, DOE
attempted to address the backlog by proposing standards for eight
products in one rulemaking. However, according to DOE, this
rulemaking effort met with strong opposition from industry,
drawing over 5,000 responses during the comment period, and DOE
withdrew the proposal. Following this experience, Congress imposed
a 1-year moratorium on new or amended standards. The moratorium
further exacerbated the backlog, according to DOE.
o Sequential nature of the rulemaking process. The elements of a
rulemaking must occur sequentially, and, according to DOE, "this
sequence-dependent nature of the analyses makes it vulnerable to
un-recoverable delays." The standards rulemaking process includes
many overlapping requirements from EPCA, as amended; Executive
Orders; and the Process Rule, which create a complex analytical
and procedural challenge, according to the report. The standards
rulemaking process typically consists of three stages--an advance
notice of proposed rulemaking, a notice of proposed rulemaking,
and a final rule--and each of these stages includes internal and
external review and comment periods, as well as technical analyses
that build on previous analyses. Most of these tasks cannot be
done concurrently, so when delays occur, often the time lost
cannot be made up because of these rigid requirements.
o Consequences of the Process Rule. Under DOE's 1996 "Process
Rule,"^9 the potential energy savings, rather than statutory
deadlines, determine which standards should be set first.
Consequently, DOE reported to Congress, it analyzed the likely
impacts of all pending energy efficiency rulemakings and used this
analysis to categorize each rulemaking as high-, medium-, or
low-priority, depending on energy-savings potential. Regardless of
deadlines, high-priority rules received the bulk of the resources,
medium-priority rules received some resources, and low-priority
rules were not addressed at all. The Process Rule also called for
increased stakeholder input and expert review, which added time to
the rulemaking, according to DOE's report. Finally, according to
DOE's 2006 report, the Process Rule increased the complexity of
the technical analysis required, adding more time.
o Internal document review and clearance process. The quality of
draft rulemaking documents was inconsistent, according to DOE's
2006 report, which made the internal review process time
consuming. In addition, reviews by the Office of General Counsel,
Office of Policy and International Affairs, and other internal
reviewers were not always managed effectively, according to the
report. Consequently, issues were not identified and resolved
early in the process, and draft rules often did not receive the
timely reviews needed to approve them for issuance.
While DOE identified these causes for rulemaking delays in its
January 2006 report, DOE staff we spoke with did not agree on the
causes. Program staff told us General Counsel's legal reviews were
excessively long, while General Counsel officials attributed their
lengthy review to the poor quality of documents, which required
extensive non-legal editing. DOE lacks program management data
that would enable it to identify with specificity where in the
agency's internal review process delays are occurring. In
addition, LBNL staff disagreed with the report's contention that
the Process Rule required more time for technical analysis.
Rather, they said, the Process Rule's requirement for more complex
analysis and for more systematic stakeholder involvement addressed
those parts of the rulemaking process earlier than before but took
about the same amount of time.
Our panel members, based on their past involvement or familiarity
with standards rulemaking, agreed that the internal review process
was problematic. Specifically, the most frequently cited cause for
delays in developing energy efficiency standards were delays in
the General Counsel review process. One panel member stated that
the General Counsel review process was "one of the lengthiest and
most opaque elements of the standards process." In addition, about
half of our panelists said the low priority historically given to
the program, not only by DOE but by the Administration and
Congress as well, was a great cause of delay in issuing the
standards. Finally, panel members identified two additional major
causes of delay that DOE did not, namely inadequate budget and
insufficient technical staff.
While some of these identified causes are beyond DOE's control,
such as the statutory deadlines, DOE reported that it could take
actions to clear the backlog by 2011. DOE plans to do the
following to ensure that rulemakings are more timely:
o Make the rulemaking process more efficient. DOE plans to stagger
the start of rulemakings in order to make the best use of staff
time and resources. In the past, DOE staff worked on one rule at a
time. Under DOE's plan, staff will work on several rules
simultaneously, which should enable the staff to make better use
of their time when drafts are out for review. In addition, DOE
plans to combine several products with related technical and
policy characteristics--such as water heaters, pool heaters, and
direct heating equipment--into a single rulemaking, which should
expedite the rulemaking process.
o Adhere to the deadline for closing public comments. DOE reported
that it will only consider comments received before their
deadlines in its current analysis. In the past, DOE continued to
consider comments after the closing date stated in the Federal
Register and responded to those comments with additional analysis,
which delayed the issuance of the final rulemaking.
o Simplify the analysis for each rulemaking. Senior management
officials are expected to approve the staff's analytical approach
and scope of effort earlier in the rulemaking process. In the
past, rulemaking staff conducted their analysis for a product
category without ensuring that senior management approved of their
approach. As a result, according to the plan, management often
called for a different approach when reviewing a draft analysis,
which required significantly more time. In addition, DOE plans to
conduct less exhaustive analysis for some rules, rather than
conducting the same level of analysis for all rules. If all the
stakeholders agree that a product category does not require DOE's
usual complex analysis, which would be the case when the key
issues are clearly understood, DOE will perform less extensive
analysis. DOE expects this change to shorten rulemaking times.
o Better ensure the quality of the proposed rulemaking and
accountability of all staff and reviewers. DOE plans to take four
actions toward this goal: (1) train staff in how to meet all
regulatory procedural requirements and provide readily available
comprehensive guidance in order to avoid procedural mistakes that
lead to delays, (2) contract with a national laboratory to
maintain a data management system for tracking rulemaking progress
and use the resulting data to identify problems for quicker
resolution, (3) match skill levels with tasks so that resources
are used most efficiently, and (4) encourage stakeholders to
negotiate a proposed standard in return for an expedited
rulemaking process.
o Improve the document review and clearance process. DOE plans to
emphasize better document quality so that reviewers can focus
their efforts on legal and policy issues rather than on basic
editorial issues. In the past, formats, styles, and approaches of
documents were not consistent, which slowed down the review
process. DOE has issued a style guide and a template for documents
to better ensure consistency. In addition, DOE plans to have
different reviewers examine the proposed rulemaking concurrently,
rather than sequentially, throughout the rulemaking process.
o Adhere to a 36-month timetable for completing a rule. DOE will
allocate approximately 16 months for analysis, 6 months for public
review and comment, 8 months for its internal review, and 6 months
for review by the Office of Management and Budget. In the past,
while DOE had a 3-year limit for rulemaking, it virtually never
issued rules within that period.
Most panelists rated the components of DOE's catch-up plan highly
and expect that, if followed, it will likely help DOE meet its
schedule for completing rules. The panelists particularly favored
the parts of DOE's catch-up plan to reform its internal review
process, use an expedited process when stakeholders recommend
standards on which they have reached consensus, and stagger
rulemakings. They also emphasized the importance of having the
Secretary of Energy and the administration provide more management
attention and priority to the program. Finally, most agreed that
certain aspects of DOE's current rulemaking process should not be
changed. Specifically, DOE should continue to perform complete
technical and economic analyses and explain its justification for
the standards it selects, include the public and stakeholders
throughout the rulemaking process, and ensure that the process and
analyses are transparent.
Despite these favorable views, some panelists expressed concern
that DOE might not have addressed what they consider the most
relevant causes of delay. For example, according to one panelist's
observations, "the delays are an internal management problem at
DOE, and the department's internal procedures are a black box. It
is hard to know with any assurance what the real problem is and
whether the issue is budget or staffing or bureaucratic
procedures." According to another panelist's review of DOE's plan,
the plan "focused too much on reducing analytical complexity and
controlling stakeholder participation--neither of which were major
contributors to delays--and too little on internal process
improvements, without which delays will continue."
Although many of DOE's actions appear reasonable, we agree that
DOE may not have identified the root causes of its rulemaking
delays. Consequently, DOE risks expending resources on the wrong
factors or emphasizing minor or irrelevant causes. DOE has not
developed the program management data it needs to identify
bottlenecks in the rulemaking process. Even though DOE has work
logs that compile limited data on some parts of the rulemaking
process, such as the amount of time taken for internal reviews,
the data are not detailed enough to identify the source of delays.
Furthermore, DOE does not have data on the length of all stages of
its rulemaking process. Because DOE managers lacked data to
determine causes, they said they compiled information about
possible causes during discussions with staff. Despite the
problems with their data, managers told us that they believe that
they have identified the root causes of delay.
DOE�s Plan Lacks Critical Elements of Effective Project Management
According to our work on leading performance management practices
and the work of a government regulatory process expert, management
plans should contain specific strategies to resolve problems and
help congressional decision makers understand how the agency plans
to improve its performance.^10 Such plans also provide a basis for
accountability. While DOE's plan includes elements intended to
make the rulemaking process more efficient, it lacks two critical
elements to help ensure success of the plan--assurance of
accountability and management's allocation of adequate resources.
Specifically:
o Assurance of accountability. While DOE has laid out a schedule
for clearing its rulemaking backlog for standards, its past poor
performance calls into question whether it is likely to be
accountable to the schedule in the catch-up plan. According to an
Assistant General Counsel who manages and tracks the regulatory
process for the Department of Transportation (DOT), an agency with
very extensive and effective electronic regulatory management, a
successful rulemaking process holds its management and staff
accountable to interim and final deadlines. For example, DOT
publishes its deadlines on its Web site, making the agency's
actions to meet the deadlines transparent to all stakeholders.
While DOT's deadlines are target dates only, this transparency
puts pressure on each participant to carry out his or her
responsibilities on time or to provide legitimate reasons for any
delays. DOE publishes a schedule of deadlines for some
standard-setting rulemaking, including the interim deadlines, in
its Semiannual Regulatory Agenda.^11 However, when DOE misses
these deadlines, it generally does not explain why, or how it
plans to make up the lost time when it publishes revised
deadlines. The catch-up plan does not ensure that the pattern of
missing deadlines will be broken.
o Adequate resources. As far back as 1993 we reported that
insufficient resources were a primary cause of DOE's delays in
updating energy efficiency standards. This may still be the case.
While the DOE plan calls for a sixfold increase in workload, it
does not increase program staffing and contractor budgets in the
same proportion. Program managers told us they generally have had
7 to 14 staff working on energy efficiency rules, with 7 on the
job as of fiscal year 2006. They plan to add 2 full-time staff and
1 from the Presidential Management Fellows (PMF) program, a
nonpermanent position, for an increase to 10 staff in fiscal year
2007.^12 Similarly, from fiscal years 2000 through 2006, DOE's
budget for contractor staff has averaged about $10 million per
year. For fiscal year 2007, DOE requested $12 million for
contractors, a 20 percent resource increase. DOE expects these
limited resource increases to cover a 600 percent increase in
workload. In the absence of further increasing resources, DOE said
in its January 2006 report it plans to meet the increased workload
by improving productivity.
Conclusions
DOE's program for energy efficiency standards has been plagued by
delays for decades. Although many steps in DOE's most recent
January 2006 plan to address these delays appear to be reasonable,
DOE does not definitively know whether the plan will address root
causes and clear the backlog. Furthermore, DOE's plan lacks
important elements of effective management practices that would
help assure success. Consequently, it is unclear whether DOE can
carry out the ambitious schedule it has set for itself to update
energy efficiency standards. If DOE does not succeed in clearing
its backlog, the nation and consumers will continue to forgo the
benefits of more energy-efficient consumer products and industrial
equipment. The loss of such benefits will make the nation depend
even more on imported energy. The continuing commitment of DOE's
top management to make standards rulemaking a top organizational
priority is essential to DOE's success in completing all energy
efficiency rules.
^9Procedures for Consideration of New or Revised Energy Conservation
Standards for Consumer Products, Final Rule, 61 Fed. Reg. 36,973 (July 15,
1996).
^10GAO, Agencies' Annual Performance Plans Under the Results Act,
GAO/GGD/AIMD-10.1.18 (Washington, D.C.: February 1998).
^11The Unified Agenda (also known as the Semiannual Regulatory Agenda),
published twice a year in the Federal Register, summarizes the rules and
proposed rules that each federal agency expects to issue during the next 6
months.
^12The PMF program is a 2-year paid government fellowship sponsored by the
[26]Office of Personnel Management for recent graduate students who seek a
professional experience in the U.S. government.
Recommendations for Executive Action
To increase the likelihood that DOE's plan for updating minimum
energy efficiency standards is successfully implemented, we
recommend that the Secretary of Energy take the following actions:
o Employ the elements of leading management practices, including
o expediting the efforts DOE has begun to establish a
tracking system to gather data that may be used to
identify and address causes of delays to more
effectively manage the rulemaking process;
o ensuring that the interim goals and time frames are
transparent to all stakeholders, and that all
internal stakeholders, including reviewers and
program staff, are held accountable to the time
frames; and
o allocating adequate resources within DOE's
appropriation.
Agency Comments and Our Evaluation
We provided the Department of Energy with a draft of this report
for review and comment. Although DOE did not provide views on our
recommendations, it expressed concerns in two areas. First,
regarding our discussion of the causes of delays in setting
standards, DOE stated that it is incorrect to assign blame for
delays to any one office, official, decision, or process--and
specifically to the Office of the General Counsel. DOE stated that
doing so reflects a simplistic and largely incorrect understanding
of the program's complexity. DOE noted that the delays in setting
standards have spanned administrations of both parties, several
Secretaries of Energy, and various DOE offices and personnel;
also, although DOE work logs may indicate that a specific office
has a document for a certain period of time, during that time
multiple individuals from different offices may have been working
together on the document. We disagree with DOE's characterization
of our analysis. In establishing the context for our findings, we
pointed out that the energy efficiency standards-setting process
was complex and that there were multiple reasons for delays. To
provide more definitive information on the root causes of the
extensive delays that have been experienced, we sought data from
DOE and the opinions of cognizant DOE staff. However, because DOE
management could not provide data to conclusively document the
reasons for the substantial delays, or the data provided by DOE as
contained in internal work logs were inadequate to determine
causality, and because representatives of the various DOE offices
could not agree on the root causes, we turned to a well-recognized
process for identifying causes in complex situations--a Delphi
panel. Panel members were carefully, objectively selected
individuals who have been closely involved in DOE's rulemaking
process for setting standards over an extensive period of time.
They most frequently cited delays in the General Counsel review
process as cause for delays in developing energy efficiency
standards. We believe that our use of this method provided a
clearer understanding of the causes of delays than DOE has been
able to provide. As we noted earlier, in DOE's January 2006 report
to Congress and in our interviews with representatives of the
offices involved in the standard-setting process, those associated
with the program generally acknowledged that they could have done
more but pointed to others as the cause of the delays and
therefore have not fully accepted responsibility for the program's
failures. Second, DOE stated that our report did not capture many
of the recent standards-setting activities undertaken since
enactment of EPAct 2005. We agree that there has been a flurry of
standards-related activity, as expressed by DOE in its letter
commenting on our report, and we have noted this in our report.
Although we recognize that DOE has taken a number of steps that
should move the program forward, it has not yet published any
additional final standards for the product and equipment
categories included in the scope of our work and our report's
findings have not changed. DOE's letter commenting on our report
is presented in appendix V.
As agreed with your offices, unless you publicly announce the
contents of this report earlier, we plan no further distribution
until 30 days from the report date. At that time, we will send
copies of this report to the Secretary of Energy and other
interested parties. We will also make copies available to others
upon request. In addition, the report will be available at no
charge on the GAO Web site at http://www.gao.gov.
If you or members of your staff have questions about this report,
please contact me at (202) 512-3841 or [email protected]. Contact
points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Key
contributors to this report are listed in appendix VI.
Jim Wells
Director, Natural Resources and Environment
Appendix I: Status of the Department of Energy�s Model Building
Code Determinations
States and their subdivisions, such as counties and cities, adopt
building codes that establish minimum requirements for
energy-efficient design and construction of commercial and
residential buildings. The building codes regulate components that
affect the amount of energy that a building will use, such as the
building envelope, electrical power, and lighting. These codes
vary from one state to another and sometimes within a state. They
may be mandatory or voluntary codes, either requiring builder
compliance or serving as guidelines. States and local
jurisdictions may adopt model building codes developed by
nonprofit organizations, such as the American Society of Heating,
Refrigerating and Air-Conditioning Engineers' (ASHRAE) Standard
90.1 and the International Code Council's (ICC) International
Energy Conservation Code (IECC). Both ASHRAE and ICC publish codes
for commercial and residential buildings.
ASHRAE uses a consensus and public hearing process to develop its
model building codes. It involves the design community, including
architects and lighting and mechanical designers; the code
enforcement community, including building code officials and state
regulatory agencies; building owners and operators; manufacturers
and utility companies; and representatives from the Department of
Energy (DOE), energy organizations, and the academic community.
ICC uses a different process to develop its model building codes.
Under its process, anyone can propose a code, and the IECC code
development committee, which includes mostly building code
officials, votes on the proposals. According to staff at the
Pacific Northwest National Laboratory (PNNL), which monitors state
building codes for DOE, although ASHRAE and ICC use different
processes to develop their model building codes, the two
organizations incorporate each other's codes into their own when
they revise them. As a result, ASHRAE and ICC codes that are
revised at about the same time generally have similar energy
efficiency provisions.
The Energy Conservation and Production Act, as amended (the Act),
directs DOE to evaluate revisions to these model building codes
and publish its determinations of whether the revision would
improve energy efficiency. For commercial buildings, defined by
DOE to include buildings other than low-rise residential
buildings, the Act directs DOE to evaluate ASHRAE's revisions to
its Standard 90.1. Each time ASHRAE revises Standard 90.1, DOE has
12 months to determine whether the revision will improve energy
efficiency in commercial buildings and publish a notice of that
determination in the Federal Register. For residential buildings,
defined by DOE as low-rise residential buildings, the Act directs
DOE to evaluate revisions the Council of American Building
Officials (CABO) makes to its Model Energy Code (MEC), or any
successor to that code. In 1995, the ICC succeeded CABO and, as
such, the IECC replaced the MEC. Each time the ICC revises the
IECC, DOE has 12 months to determine whether the revision will
improve energy efficiency in residential buildings and publish a
notice of that determination in the Federal Register. The Act does
not specify what type of revision triggers the start of the
12-month period for either commercial or residential
determinations; but, according to DOE officials, the 12-month
period is triggered by ASHRAE's and ICC's publication of revised
codes.
The Act provides that if the Secretary determines that a revision
to ASHRAE's or ICC's model building code will improve energy
efficiency--called a positive determination--states "shall" review
their building codes. For commercial model building codes, each
state has 2 years after DOE publishes a positive determination on
a revised ASHRAE model building code to certify to DOE that it has
reviewed and updated the provisions of its commercial building
code in accordance with the revised code. For residential model
building codes, each state also has 2 years after a positive
determination for certification, but it must certify to DOE that
it has reviewed the provisions of its residential building code
and determined whether it is appropriate to update them to meet or
exceed the revised code. Subsequent to enactment of these
provisions, the Supreme Court ruled that the constitution does not
allow Congress to require states to regulate a matter.^1 DOE
program managers told us that DOE does not require states to
review their codes following a positive determination.^2 Instead,
the managers told us, DOE facilitates states' efforts to adopt
revised codes. PNNL officials told us they assist DOE on all
aspects of the building code determinations and provide training
and technical assistance to state and local officials responsible
for building codes.
As of August 2006, ASHRAE and ICC have published a combined total
of nine revisions to their model building codes for DOE to
evaluate. ASHRAE revised Standard 90.1 three times, and CABO
revised the MEC twice before it was incorporated into ICC in 1995.
The ICC issued its first version of the IECC in 1998 and has since
revised it three times. Deadlines for DOE's determinations have
come due on all these revisions, except the 2006 IECC revision,
which will be due in January 2007.
We were asked to report on (1) whether DOE has met its statutory
deadlines for determining if states should adopt revised
commercial model building codes, (2) whether DOE has met its
statutory deadlines for determining if states should consider
adopting revisions to the residential model building code, and (3)
whether and, if so, to what extent DOE tracks states' building
codes. This appendix contains information about these objectives.
To address the commercial and residential building code
determinations DOE has completed, we reviewed the requirements and
deadlines for building code determinations contained in statute
and DOE determinations published in the Federal Register. We also
interviewed and obtained documents from officials at DOE, PNNL,
ASHRAE, ICC, and the American Council for an Energy Efficient
Economy. Since DOE program officials use ASHRAE's and ICC's
revision publication dates as the trigger date for DOE's deadlines
for making determinations, we used these dates for our analysis.
We did not attempt to determine why DOE might miss deadlines for
determinations or why individual states adopt building codes.
DOE Has Completed One of Three Commercial Building Code
Determinations
DOE has completed only one of three commercial model building code
determinations that have come due. DOE issued a positive
determination for the first of three revisions to ASHRAE's
Standard 90.1 about 17 months after the deadline. As of December
2006, DOE had not completed determinations for either of the
remaining revisions and has decided to combine them. Table 5
provides details about the revisions' publication dates, the
deadlines for the determinations, and the status of DOE's reviews.
^1New York v. United States, 505 U.S. 144 (1992) (holding that a provision
of the Low-Level Radioactive Waste Policy Act, requiring states to take
ownership of waste or regulate according to instructions of Congress, was
invalid). The court also stated that Congress may hold out incentives to
the states as a means of encouraging them to adopt suggested regulatory
schemes and offer states the choice of regulating an activity according to
federal standards or having state law preempted by federal regulation.
^2A DOE staff member noted that the Energy Conservation and Production
Act, as amended, does not contain a provision authorizing DOE to enforce
these provisions.
Table 5: Status of DOE's Review of ASHRAE Standard 90.1 Revisions
Revision DOE DOE DOE State
ASHRAE publication determination determination determination certification
revision date due date issue date status due date
ASHRAE January 28, January 28, July 15, 2002 Completed July 15, 2004
Standard 2000 2001 over 17
90.1-1999 months late.
ASHRAE November 7, November 7, None Incomplete 2 years after
Standard 2001 2002 and over 4 DOE issues the
90.1-2001 years late. determination.
ASHRAE December December, 21, None Incomplete 2 years after
Standard 21, 2004 2005 and over 1 DOE issues the
90.1-2004 year late. determination.
Sources: GAO analysis of ASHRAE, DOE, and Federal Register data.
DOE Has Completed Four of Five Residential Building Code Determinations
DOE has completed four of five residential building code determinations
that have come due. DOE issued determinations for all of these four
CABO/ICC revisions to the MEC/IECC and said the revisions would improve
energy efficiency. DOE completed its first determination on time and
completed the next three from 1 month to over 1 year late. As of December
2006, DOE had not yet completed the determination for the fifth IECC
revision. Table 6 provides details about the revisions' publication dates,
the due dates for the determinations, and the status of DOE's reviews.
Table 6: Status of DOE's Review of MEC and IECC Revisions
Revision DOE DOE DOE State
CABO/ICC publication determination determination determination certification
revision date due date issue date status due date
1993 MEC October 21, October 21, July 15, 1994 Completed July 15, 1996
1993 1994 over 3 months
early.
1995 MEC April 12, April 12, December 6, Completed December 6,
1995 1996 1996 over 7 months 1998
late.
1998 May 13, May13, 1999 January 10, Completed January 10,
IECC 1998 2001 over 1 year 2003
late.
2000 December December 30, January 10, Completed January 10,
IECC 30, 1999 2000 2001 less than 1 2003
month late.
2003 January 27, January 27, None Incomplete, 2 2 years after
IECC 2003 2004 years and 11 DOE issues the
months late. determination.
2006 January 15, January 15, None Not yet due. 2 years after
IECC 2006 2007 DOE issues the
determination.
Sources: GAO analysis of ASHRAE, DOE, and Federal Register data.
DOE Tracks States' Building Codes
DOE and PNNL staff track states' commercial and residential building codes
and publish information about them on DOE's Web site. PNNL staff told us
they e-mail state officials twice a year to confirm that DOE has the most
current information about the states' commercial and residential building
codes and to obtain any updated information. Additionally, they are in
frequent contact with the states and continually update their information
on states' building codes. DOE's Web site reports the type of code adopted
by each state and whether builder compliance with the code is voluntary or
mandatory, and provides limited information about the stringency of the
code, which PNNL staff determines by analyzing the state-provided
information. For example, DOE's Web site reports that Florida has adopted
mandatory codes for both commercial and residential buildings and that the
commercial building code is more stringent than the ASHRAE 90.1 2001, and
the residential building code is more stringent than the 2000 IECC. The
complete list of state commercial and residential building codes for
energy efficiency is available at
http://www.energycodes.gov/implement/state_codes/state_status_full.php
.
Although the information published on DOE's Web site compares the
stringency of state codes with ASHRAE's and ICC's model building codes,
PNNL staff told us the information should not be used to judge the
stringency of state codes relative to the ASHRAE's and ICC codes for which
DOE has made a determination. The staff explained that while more recent
state codes are generally more energy efficient than older state codes,
there are other factors that affect their stringency. For example, states
may adopt DOE's latest determination on ASHRAE's and ICC's codes as their
state building codes, but may amend them to be weaker or stronger. For
example, according to PNNL staff, Georgia adopted the latest DOE
residential determination but amended to it to be more similar to prior
DOE determinations. In other cases, the changes to a revised code may not
affect all states equally; therefore, while a state may not have adopted
the most recent revision, the changes in that revision may not have
applied to that state anyway. For example, PNNL staff told us that,
although Massachusetts did not adopt the 2000 IECC, the differences
between the 2000 IECC and the 1995 MEC, which Massachusetts did adopt, did
not apply to that state. Therefore, PNNL staff consider Massachusetts's
code to be as stringent as the 2000 IECC. Furthermore, PNNL staff told us
that, while some states have adopted model building codes that are more
recent than those for which DOE has issued a determination, these codes
should not be assumed to be more stringent than those for which DOE has
made a determination until PNNL makes a comparable technical analysis.
PNNL staff told us that they have the information and technical capability
to compare the stringency of all the state codes with those for which DOE
has made a determination. However, they said they typically analyze
building codes on a state-by-state basis only at DOE's request and that
they do not currently have a comprehensive analysis of how all states'
codes compare to DOE's latest determinations. As of September 2006, DOE
had not directed PNNL to complete a comprehensive analysis. DOE officials
told us that DOE focuses on facilitating states' efforts to adopt building
codes rather than penalizing them for not meeting DOE building code
determinations and, as such, they do not believe a comprehensive analysis
of which states' building codes are as stringent as those for which DOE
has made a positive determination justifies the resources it would
require.
Appendix II: Objectives, Scope, and Method
Our objectives were to examine (1) the extent to which DOE has met its
statutory obligations to issue rules on minimum energy efficiency
standards for consumer products and industrial equipment and (2) whether
DOE's plans are likely to clear the backlog of required rulemakings and
whether these plans could be improved.
To address these objectives, we reviewed the statutory requirements and
deadlines for developing energy efficiency standards for consumer products
and industrial equipment, program information available on DOE's Web site,
information provided by program staff, and DOE's January 2006 and August
2006 reports to Congress. For the purposes of our review, we did not
include the 17 additional product categories that the Energy Policy Act of
2005 added to DOE's responsibilities, including the one that came due in
August 2006. Although DOE is also required to issue rules regarding
standards for plumbing products, we excluded them from this report because
they primarily involve conserving water, rather than energy. Furthermore,
we did not evaluate the merit of the standards DOE has issued.
We conducted interviews with DOE program officials; officials of the
Office of General Counsel; officials at Lawrence Berkeley National
Laboratory, the National Energy Technology Laboratory, and the
[28]National Institute of Standards and Technology ; and a regulatory
process expert at the Department of Transportation. We also interviewed
officials at the American Council for an Energy Efficient Economy; the
Appliance Standards Awareness Project; the American Society of Heating,
Refrigerating and Air-Conditioning Engineers; the California Energy
Commission; Pacific Gas and Electric Company; and Natural Resources
Canada; and obtained documentation as needed. We analyzed data on DOE's
rulemaking process, estimates of national energy savings from energy
efficiency standards, and program resources.
In addition, we used a Web-based, modified Delphi method to obtain views
from a panel of 33 stakeholders on the causes and effects of delays in
setting standards and on proposed solutions to these delays. The Delphi
method is a systematic process for obtaining individuals' views on a
question or problem of interest and, if possible, obtaining consensus. Our
modified Delphi method had two phases. Phase 1 consisted of a series of
open-ended questions concerning DOE's delays. In Phase 2, panel members
rated the significance or priority of the causes of delays, effects of
delays, and solutions to delays that they had identified in phase 1.
We selected the panel members from a group of stakeholders who were both
widely recognized as knowledgeable about one or more key aspects of energy
efficiency standards, and who were involved or familiar with DOE's
rulemaking process. The group included officials from federal and state
agencies, manufacturers, trade associations, energy efficiency advocacy
groups, consumer interest groups, utilities, and utility associations,
some of whom were previously employed by DOE as participants in the
rulemaking process. We used a variety of methods to determine that the
panelists we selected had the expertise necessary to participate in the
panel. A list of the 33 panel members is included in appendix IV. To
report panel results, when two-thirds or more of the panel agreed, we use
the term "most." When one-half of more of the panel agreed, we use the
term "the majority."
We conducted our review from June 2005 through January 2007 in accordance
with generally accepted government auditing standards.
Appendix III: Rulemakings and Delays for Consumer Products and Industrial
Equipment with Deadlines That Have Passed
First rule Second rule
Consumer product or
industrial equipment Actual Years Actual Years
category Due date date delayed^a Due date date delayed^a
Consumer products
Clothes washers 01/01/90 05/14/91 1.4 01/01/95 01/12/01 6.0
Refrigerators, 07/01/89 11/17/89 0.4 07/01/94 04/28/97 2.8
refrigerator-freezers,
and freezers
Small furnaces 01/01/89 11/17/89 0.9 Included in N/A N/A
"Furnaces"
deadline^b
Central air 01/01/94 01/22/01 7.1 01/01/01 Overdue 6.0
conditioners and heat
pumps
Clothes dryers 01/01/90 05/14/91 1.4 01/01/95 Overdue 12.0
Dishwashers 01/01/90 05/14/91 1.4 01/01/95 Overdue 12.0
Fluorescent lamp 01/01/92 09/19/00 8.7 01/01/97 Overdue 10.0
ballasts
Room air conditioners 01/01/92 09/24/97 5.7 01/01/97 Overdue 10.0
Water heaters 01/01/92 01/17/01 9.0 01/01/00 Overdue 7.0
Direct heating 01/01/92 Overdue 15.0 01/01/00 Overdue 7.0
equipment
Furnaces 01/01/94 Overdue 13.0 01/01/07 Not due Not due
General service 04/24/97 Overdue 9.7 04/24/02 Overdue 4.7
fluorescent lamps and
incandescent reflector
lamps
Additional general 11/15/98 Overdue 8.1 Included in N/A N/A
service fluorescent general
and general service service
incandescent lamps fluorescent
lamps and
incandescent
reflector
lamps
deadline^c
Kitchen ranges and 01/01/92 Overdue 15.0 01/01/97 Overdue 10.0
ovens
Mobile home furnaces 01/01/92 Overdue 15.0 Included in N/A N/A
Furnaces
deadline^b
Pool heaters 01/01/92 Overdue 15.0 01/01/00 Overdue 7.0
Industrial equipment
Electric motors-not 10/24/99 Overdue 7.2 10/24/04 Overdue 2.2
requiring national
certification
Electric motors- 10/24/01 Overdue 5.2 10/24/06 Overdue 0.2
requiring national
certification
Distribution 10/24/96^d Overdue 10.2 N/A N/A N/A
transformers
Small electric motors 10/24/96^d Overdue 10.2 N/A N/A N/A
Source: GAO analysis of DOE data.
aCalculations for years delayed for overdue rules are as of December 31,
2006.
bSubsequent updates to standards for the category called Furnaces are
intended to cover updates for mobile home furnaces and small furnaces and
are included in the Furnaces deadlines.
cSubsequent updates to standards for the category called "General service
fluorescent lamps and incandescent reflector lamps" are intended to cover
updates for "Additional general service fluorescent lamps and incandescent
reflector lamps" and are included in the Furnaces deadlines.
dDeadline for setting initial standard following determination of
feasibility (18 months after publication of testing requirements.)
Appendix IV: Participants in Energy Efficiency Standards Delphi Panel
Karim Amrane
Air-Conditioning and Refrigeration Institute
Donald Brundage
Southern Company
David Calabrese
Association of Home Appliance Manufacturers
Thomas Catania
Whirlpool Corporation
Sue Coakley
Northeast Energy Efficiency Partnerships
James Crawford
Trane and American Standard
Andrew deLaski
Appliance Standards Awareness Project
Thomas Eckman
Northwest Power and Conservation Council
Andrew Fanara Environmental Protection Agency
Gary Fernstrom
Pacific Gas and Electric
David Goldstein
Natural Resources Defense Council
Mel Hall-Crawford
Consumer Federation of America
Carl Hiller
Applied Energy Technology
John Holt
National Rural Electric Cooperative Association
Earl Jones
GE Consumer & Industrial
Joseph Mattingly
Association of Appliance & Equipment Manufacturers
James McMahon
Lawrence Berkeley National Laboratory
Deborah Miller
ICF Consulting
Harry Misuriello
Alliance to Save Energy
Jim Mullen
Lennox International Inc.
Steven Nadel
American Council for an Energy-Efficient Economy
Kyle Pitsor
National Electrical Manufacturers Association
James Ranfone
American Gas Association
Priscilla Richards
New York State Energy Research and Development Authority
Michael Rivest
Navigant Consulting, Inc.
Steve Rosenstock
Edison Electric Institute
Michael Sherman
Massachusetts Division of Energy Resources
Doug Smith
Van Ness Feldman
Sriram Somasundaram
Pacific Northwest National Laboratory
David Steiner
Maytag Corporation
Charlie Stephens
Oregon Department of Energy
Tim Stout
National Grid USA
John Wilson
California Energy Commission
Appendix V: Comments from the Department of Energy
Appendix VI: GAO Contact and Staff Acknowledgments
GAO Contact
Jim Wells, (202) 512-3841, [email protected]
Staff Acknowledgments
In addition to the individual named above, Karla Springer, Assistant
Director; Tim Bober; Kevin Bray; Valerie Colaiaco; Janelle Knox; Megan
McNeely; Lynn Musser; Alison O'Neill; Don Pless; Bill Roach; Frank Rusco;
Ilga Semeiks; and Carol Herrnstadt Shulman made key contributions to this
report.
(360605)
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Highlights of GAO-07-42, a report to congressional requesters
January 2007
ENERGY EFFICIENCY
Long-standing Problems with DOE's Program for Setting Efficiency Standards
Continue to Result in Forgone Energy Savings
The Department of Energy (DOE) sets energy efficiency standards through
the rulemaking process for certain consumer product categories, such as
kitchen ranges, and industrial equipment, such as distribution
transformers. Congress reported in 2005 that DOE was late in setting
standards and required DOE to report every 6 months on the status of the
backlog.
GAO examined (1) the extent to which DOE has met its obligations to issue
rules on minimum energy efficiency standards for consumer products and
industrial equipment and (2) whether DOE's plan for clearing the backlog
will be effective or can be improved. Among other things, GAO convened an
expert panel on energy efficiency standards to identify causes and effects
of delays and assess DOE's plans.
[37]What GAO Recommends
GAO recommends that DOE adopt elements of effective project management in
its standards rulemaking, such as using a more transparent process and
allocating adequate resources within its appropriation. In commenting on
this report, DOE did not respond to the recommendations but said it was
incorrect to single out any official or office for the delays and that the
report did not reflect many of its standards-setting activities since
EPAct 2005. GAO reported several causes of delays; activities since EPAct
2005 were outside this report's scope.
DOE has missed all 34 congressional deadlines for setting energy
efficiency standards for the 20 product categories with statutory
deadlines that have passed. DOE's delays ranged from less than a year to
15 years. Rulemakings have been completed for only (1) refrigerators,
refrigerator-freezers, and freezers; (2) small furnaces; and (3) clothes
washers. DOE has yet to finish 17 categories of such consumer products as
kitchen ranges and ovens, dishwashers, and water heaters, and such
industrial equipment as distribution transformers. Lawrence Berkeley
National Laboratory estimates that delays in setting standards for the
four consumer product categories that consume the most
energy--refrigerators and freezers, central air conditioners and heat
pumps, water heaters, and clothes washers--will cost at least $28 billion
in forgone energy savings by 2030. DOE's January 2006 report to Congress
attributes delays to several causes, including an overly ambitious
statutory rulemaking schedule and a lengthy internal review process. In
interviews, however, DOE officials could not agree on the causes of
delays. GAO's panel of widely recognized, knowledgeable stakeholders said,
among other things, that the General Counsel review process was too
lengthy and that DOE did not allot sufficient resources or make the
standards a priority. However, GAO could not more conclusively determine
the root causes of delay because DOE lacks the program management data
needed to identify bottlenecks in the rulemaking process.
In January 2006, DOE presented to Congress its plan to bring the standards
up to date by 2011. It is unclear whether this plan will effectively clear
DOE's backlog because DOE does not have the necessary program management
data to be certain the plan addresses the root causes. The plan also lacks
critical elements of an effective project management plan, such as a way
to ensure management accountability for meeting the deadlines. Finally,
the plan calls for a sixfold increase in workload with only a small
increase in resources. DOE plans to manage the workload through improved
productivity.
Timeliness of DOE Rulemakings That Have Come Due
References
Visible links
25. http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-93-102
26. http://www.opm.gov/
28. http://www.nist.gov/
29. file:///home/webmaster/infomgt/d0742.htm#mailto:[email protected]
30. http://www.gao.gov/
31. http://www.gao.gov/
32. http://www.gao.gov/fraudnet/fraudnet.htm
33. file:///home/webmaster/infomgt/d0742.htm#mailto:[email protected]
34. file:///home/webmaster/infomgt/d0742.htm#mailto:[email protected]
35. file:///home/webmaster/infomgt/d0742.htm#mailto:[email protected]
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