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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.

Will Climate Change Reach Pennsylvania Avenue?

It is safe to say that the momentum is not behind the enactment of a broad climate change bill this year.  However, the more important question is whether it will happen next year.

For those who are still unsure whether the climate change bill will be completed this year, let me provide a few reasons it is unlikely:

  • Chair of the Senate Committee with jurisdiction (Environment & Public Works) hasn’t released legislation yet.
  • Midwest Democratic Senators have said they don’t see a bill moving this year.
  • Congressman Van Hollen (D-Md.) has suggested a vote might not take place this year.  This is significant because Van Hollen is head of the Democratic Congressional Campaign Committee and is responsible for electing more Democrats to the House and ensuring vulnerable Democratic members get re-elected.  This tells me that there is a worry that a climate change bill may not be selling well in swing districts.
  • Chairman Waxman is still struggling to find a majority of votes in his committee to pass a bill.

Using a crystal ball to look at the political landscape in 2010 – which is President Obama’s first mid-term election year—I see that politicians will be more risk averse the closer it gets to an election, and this one is just 6 months away.  Also, will politicians feel that the climate change “issue?? is better to have at their side during the 2010 campaign rather than trying to campaign on the success of a compromised climate change bill, which no one may be excited about?  And what will the state of our economy be and will it provide fodder for the opponents of climate change legislation who characterize it as an energy tax?

I see no improved political landscape for the enactment of climate change legislation next year.  With that said, for the home appliance industry, a separate agreement on HFC’s could splinter off and move on its own, which would provide some measure of success for the proponents of climate change legislation. But, there are many unknowns, politically, as we approach the mid-term elections.

Charlie Cook, a weekly columnist on national politics, recently wrote: “So we wait to see if President Obama will be a liability for Democrats, as presidents going into midterm elections often are, or if the momentum that Democrats built in 2006 and 2008 carries through.  We wait to see if Republicans either effectively regroup from their massive losses and mount a strong counterattack or if they are positioned to take advantage of political misfortunes and win simply because they are not Democrats.??

The legislative and political atmosphere can change quickly and we, as an industry, need to be prepared for anything that could enter the fray of climate change politics.  Remember, if climate change doesn’t get enacted into law in 2010, 2011 is a non-election year, but 2012 is right around the corner, and that, believe it or not folks, is another presidential election year.

New Data Shows Home Appliance Energy Savings

AHAM has released the 2008 Energy Efficiency and Consumption Trends data for home appliances.  This data, based on 2008 shipments of major appliances, shows the continuing pattern of decreased energy consumption.

Manufacturers continue to make improvements every year that reduce the amount of energy used to operate home appliances.  The average refrigerator made in 2008 consumed 3% less energy than those made in the previous year.  In fact, the average refrigerator sold today uses less energy than a 60 watt light bulb that is left on 24 hours a day.

In a time where people are making an effort to make their homes more efficient, appliance manufacturers are also committed to making the most efficient products.  Replacing older, less efficient appliances with newer models can lead to major savings on your next energy bill. 

Click here to purchase the new 2008 Trends in Energy Efficiency Data.

Significance of Specter’s Party Switch

There is no question that Senator Arlen Specter’s recent announcement that he is going to run for reelection as a Democrat is significant.  The question is: how significant?   Politically, it is quite significant and it was not by chance that it occurred on the eve of President Obama’s 100th Day in office.  It gives Democrats a victory in that they can build on a public perception that people, even Senators, continue to switch from the GOP to the Democratic Party.  And, what I want to focus on here, that it essentially provides the Senate Democrats with 60 votes, creating a filibuster proof majority (yes, to get to 60 votes, Al Franken would have to win in Minnesota and the two independents–Sanders and Lieberman–would have to vote with Democrats.)

The real question in my mind is what will change when it comes to votes on stopping filibusters – or cloture votes if you want to use the arcane parliamentary term.  Sure Specter’s switch and the apparent agreement with Democratic Party leaders to maintain his seniority may lead to Senator Specter chairing a committee.  But this is just a DC parlor game to try to figure out if he will chair the Labor-HHS Appropriations Subcommittee or something else.  This is not of the highest significance.  Senator Specter didn’t run his committees when the GOP was in control from the far-right to say the least.  When he chaired the Labor-HHS Appropriations Subcommittee, which funds a significant chunk of domestic social spending, he was not always in line with the GOP caucus.  So the real significance of the party switch will be the procedural votes, such as cloture, and his interaction with the caucus on strategy.


Let’s first take cloture, this is the big issue in the media.  Don’t get me wrong.  This is huge, but I went back and looked at the 10 cloture votes the Senate voted on in 2009.  Senator Specter voted to end the filibuster, i.e., side with the majority,  9 out of 10 times! So will his party switch really make much of a difference in this area?  After all, he voted with the Democrats for cloture basically every time as a Republican.


The real significance of this party switch comes in the form of the Pennsylvania primary voters.  The primary voters play a significant role in the actions of politicians.  If you don’t believe this, just look no further than the reason Senator Specter switched parties.  It was because of the primary voters.  Specter said he does not want to be "judged by the Pennsylvania Republican primary electorate.??  A Rasmussen Reports poll released Friday showed Specter trailing former Rep. Pat Toomey by 21 percentage points while a Quinnipiac poll showed 71 percent of Democrats having a favorable opinion of Specter.  Now the key electorate for Specter has switched from the GOP primary voters to the Democratic primary voters.  The primary is the first and next election Specter must win, and this is not usually the stomping ground of moderate and independent views.  There may not be a democratic primary opponent.


In order for Specter to sway the Democratic primary voters, I would predict that his votes on procedural and support on strategic Democratic issues will have to shift to the left.  And although this is inside baseball in DC, it impacts AHAM’s legislative agenda in that Democrats will have a stronger hand in conference committee – sometimes known as the third House of Congress due to its significance.  If there is a tough and politically charged issue and the Democrats need to maintain party unity on a conferenced bill that has passed the House and supported by President Obama, it will be increasingly difficult, politically, for Specter to be positioned as being the only person standing in the way of sending the bill down Pennsylvania Avenue to be signed into law by the President, who has agreed to campaign for him.


Senator Specter’s switch is significant in that he will now be focused on his next election and that is by the Democratic Party of Pennsylvania.  Specter does not want his future decided by the Pennsylvania GOP primary voters, but it will be decided now by the Pennsylvania Democratic voters.