May 14, 2009

The Need for Balanced Federal Energy Legislation

Congress is spending significant time this year on energy efficiency legislation, with a keen focus on appliance efficiency.  Both houses of Congress have committees developing new provisions relating to the development of appliance efficiency standards while the Department of Energy is struggling to comply with a federal court ordered schedule to complete work on several appliance standards.  This is while the agency is also attempting to adhere to additional new requirements on appliance efficiency included in laws enacted in 2005 and 2007.  AHAM is involved in influencing the outcome of the 2009 energy legislation to ensure an adequately funded federal program that blends national efficiency requirements, and education and incentive programs that encourage manufacturers and consumers to seek even higher efficiency products.

While AHAM is encouraged that the new legislation embraces the potentially game changing application of smart grid technology to home appliances, we are nonetheless concerned that portions of the legislation will do more harm than good to a well thought out national appliance efficiency program.  

Let me point out the areas we strongly support and the provisions we question.  Smart grid is a great place to begin.  As refrigerators undergo a fourth generation appliance efficiency standard at DOE, the law of diminishing returns begins to apply.  Today’s average refrigerators consume the same amount of energy over a year as a 60 watt light bulb.  The costs and benefits of tightening energy efficiency further are much more challenging.  But the energy bill encourages DOE and manufacturers to produce smart grid appliances that have the capability of communicating with a utility to defer certain energy consuming functions such as refrigerator defrost or heated tumbling in a clothes dryer from peak to non-peak energy generation times of day.  Nationwide, deployment of such products can materially assist in avoiding additional peak power plant usage and even serve as a backup for use of renewable energy generation.  We encourage national energy policy and utility rate policies to encourage development and use of smart grid technologies.

But at the same time, we have expressed our concern with portions of the House Energy and Commerce energy bill which could undermine the national appliance efficiency system.  For example, the bill increases by 60% the number of factors DOE must analyze when setting appliance standards.  Additionally, DOE will be required to take on redundant data requirements from product manufacturers which will only pile more onto their already heavy work pace and add burdens to product manufacturers.  We also believe the bill weakens the preeminence of national standards over conflicting state requirements.  Our view is that we give DOE the funds it needs to do its job and encourage a strong and innovative national system.  DOE’s basic test when setting appliance efficiency standards, which balance environmental benefits, consumer costs and manufacturer impact, should be protected and enhanced where possible.  But we must preserve the balance of these three main tests, akin to a three legged stool, so that the consumer can step up to a more efficient appliance.