[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
WASTED ENERGY: DOE'S INACTION ON EFFICIENCY STANDARDS AND ITS IMPACT ON
CONSUMERS AND THE CLIMATE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
MARCH 7, 2019
__________
Serial No. 116-14
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
37-103 PDF WASHINGTON : 2019
--------------------------------------------------------------------------------------
COMMITTEE ON ENERGY AND COMMERCE
FRANK PALLONE, Jr., New Jersey
Chairman
BOBBY L. RUSH, Illinois GREG WALDEN, Oregon
ANNA G. ESHOO, California Ranking Member
ELIOT L. ENGEL, New York FRED UPTON, Michigan
DIANA DeGETTE, Colorado JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas
JAN SCHAKOWSKY, Illinois STEVE SCALISE, Louisiana
G. K. BUTTERFIELD, North Carolina ROBERT E. LATTA, Ohio
DORIS O. MATSUI, California CATHY McMORRIS RODGERS, Washington
KATHY CASTOR, Florida BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland PETE OLSON, Texas
JERRY McNERNEY, California DAVID B. McKINLEY, West Virginia
PETER WELCH, Vermont ADAM KINZINGER, Illinois
BEN RAY LUJAN, New Mexico H. MORGAN GRIFFITH, Virginia
PAUL TONKO, New York GUS M. BILIRAKIS, Florida
YVETTE D. CLARKE, New York, Vice BILL JOHNSON, Ohio
Chair BILLY LONG, Missouri
DAVID LOEBSACK, Iowa LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon BILL FLORES, Texas
JOSEPH P. KENNEDY III, SUSAN W. BROOKS, Indiana
Massachusetts MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California RICHARD HUDSON, North Carolina
RAUL RUIZ, California TIM WALBERG, Michigan
SCOTT H. PETERS, California EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
------
Professional Staff
JEFFREY C. CARROLL, Staff Director
TIFFANY GUARASCIO, Deputy Staff Director
MIKE BLOOMQUIST, Minority Staff Director
Subcommittee on Energy
BOBBY L. RUSH, Illinois
Chairman
SCOTT H. PETERS, California FRED UPTON, Michigan
MIKE DOYLE, Pennsylvania Ranking Member
JOHN P. SARBANES, Maryland ROBERT E. LATTA, Ohio
JERRY McNERNEY, California, Vice CATHY McMORRIS RODGERS, Washington
Chair PETE OLSON, Texas
PAUL TONKO, New York DAVID B. McKINLEY, West Virginia
DAVID LOEBSACK, Iowa ADAM KINZINGER, Illinois
G. K. BUTTERFIELD, North Carolina H. MORGAN GRIFFITH, Virginia
PETER WELCH, Vermont BILL JOHNSON, Ohio
KURT SCHRADER, Oregon LARRY BUCSHON, Indiana
JOSEPH P. KENNEDY III, BILL FLORES, Texas
Massachusetts RICHARD HUDSON, North Carolina
MARC A. VEASEY, Texas TIM WALBERG, Michigan
ANN M. KUSTER, New Hampshire GREG WALDEN, Oregon (ex officio)
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
TOM O'HALLERAN, Arizona
LISA BLUNT ROCHESTER, Delaware
FRANK PALLONE, Jr., New Jersey (ex
officio)
C O N T E N T S
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Page
Hon. Bobby L. Rush, a Representative in Congress from the State
of Illinois, opening statement................................. 1
Prepared statement........................................... 2
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 3
Prepared statement........................................... 4
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 6
Prepared statement........................................... 7
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 8
Prepared statement........................................... 10
Witnesses
Daniel R. Simmons, Assistant Secretary, Office of Energy
Efficiency and Renewable Energy, Department of Energy.......... 11
Prepared statement........................................... 14
Answers to submitted questions \1\........................... 174
Andrew deLaski, Executive Director, Appliance Standards Awareness
Project........................................................ 53
Prepared statement........................................... 55
Answers to submitted questions............................... 188
Katherine Kennedy, Senior Director, Climate and Clean Energy
Program, Natural Resources Defense Council..................... 73
Prepared statement \2\
Joseph M. McGuire, President and Chief Executive Officer,
Association of Home Appliance Manufacturers.................... 74
Prepared statement........................................... 76
Charles Harak, Staff Attorney and Manager, Energy Unit, National
Consumer Law Center............................................ 87
Prepared statement........................................... 89
Stephen R. Yurek, President and Chief Executive Officer, Air-
Conditioning, Heating, and Refrigeration Institute............. 93
Prepared statement........................................... 95
David J. Friedman, Vice President, Advocacy, Consumer Reports.... 107
Prepared statement........................................... 109
----------
\1\ Mr. Simmons did not answer submitted questions for the record
by the time of printing.
\2\ Ms. Kennedy's statement has been retained in committee files
and also is available at https://docs.house.gov/meetings/IF/
IF03/20190307/109029/HHRG-116-IF03-Wstate-KennedyK-
20190307.pdf.
Submitted Material
Letter of March 6, 2019, from Alexander A. Karsner, Assistant
Secretary for Renewable Energy & Energy Efficiency, 2006-2008,
Elemental, to Mr. Pallone, et al., submitted by Mr. Rush....... 138
Letter of March 4, 2019, from Mark Cooper, Senior Fellow, and Mel
Hall-Crawford, Director of Energy Programs, Consumer Federation
of America to Mr. Rush and Mr. Upton, submitted by Mr. Rush \3\
Letter of March 5, 2019, from Gary Shapiro, President and Chief
Executive Officer, and Douglas K. Johnson, Vice President,
Technology Policy, Consumer Technology Association, to Mr.
Rush, and Mr. Upton, submitted by Mr. Rush..................... 142
Letter of March 5, 2019, from Brian F. Mannix, George Washington
University, to Mr. Rush and Mr. Upton, submitted by Mr. Rush... 147
Letter of March 6, 2019, from Kevin J. Cosgriff, President and
Chief Executive Officer, National Electrical Manufacturers
Association, to Mr. Rush and Mr. Upton, submitted by Mr. Rush.. 159
Letter of March 7, 2019, from Mark Krebs, Energy Policies and
Standards Specialist, Spire Inc., to Mr. Upton, submitted by
Mr. Upton...................................................... 165
Letter of March 7, 2019, from the American Gas Association, to
Mr. Rush and Mr. Upton, submitted by Mr. Upton................. 170
----------
\3\ The information has been retained in committee files and also
is available at https://docs.house.gov/meetings/IF/IF03/
20190307/109029/HHRG-116-IF03-20190307-SD002.pdf.
WASTED ENERGY: DOE'S INACTION ON EFFICIENCY STANDARDS AND ITS IMPACT ON
CONSUMERS AND THE CLIMATE
----------
THURSDAY, MARCH 7, 2019
House of Representatives,
Subcommittee on Energy,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:02 a.m., in
the John D. Dingell Room 2123, Rayburn House Office Building,
Hon. Bobby L. Rush (chairman of the subcommittee) presiding.
Members present: Representatives Rush, Peters, McNerney,
Tonko, Loebsack, Butterfield, Welch, Schrader, Kennedy, Veasey,
Kuster, Kelly, Barragan, McEachin, O'Halleran, Blunt Rochester,
Pallone (ex officio), Upton (subcommittee ranking member),
Latta, Rodgers, McKinley, Kinzinger, Griffith, Johnson,
Bucshon, Flores, Hudson, Walberg, Duncan, and Walden (ex
officio).
Staff present: Adam Fischer, Policy Analyst; Waverly
Gordon, Deputy Chief Counsel; Rick Kessler, Staff Director,
Energy and Environment; Brendan Larkin, Policy Coordinator;
John Marshall, Policy Coordinator; Lisa Olson, FERC Detailee;
Teresa Williams, Energy Fellow; Tuley Wright, Energy and
Environment Policy Advisor; Mike Bloomquist, Minority Staff
Director; Jordan Davis, Minority Senior Advisor; Margaret
Tucker Fogarty, Minority Staff Assistant; Peter Kielty,
Minority General Counsel; Ryan Long, Minority Deputy Staff
Director; Mary Martin, Minority Chief Counsel, Energy, and
Environment and Climate Change; Brandon Mooney, Minority Deputy
Chief Counsel, Energy; Brannon Rains, Minority Staff Assistant;
Peter Spencer, Minority Senior Professional Staff Member,
Environment and Climate Change; and Nate Wilkins, Minority
Fellow.
Mr. Rush. The Subcommittee on Energy will now come to
order.
The Chair recognizes himself for 5 minutes.
OPENING STATEMENT OF HON. BOBBY RUSH, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
I want to thank all of our invited guests for being here
today to testify at today's hearing entitled, ``Wasted Energy:
DOE's Inaction on Efficiency Standards and Its Impact on
Consumers and the Climate.''
As we are all well aware, Federal efficiency standards
conserve energy, create jobs, encourage American ingenuity and
innovation, all while helping domestic manufacturers stay
competitive in a global economy. The efficiency sector
currently employs 2.25 million Americans, more jobs than all
fossil fuel sectors combined, and there are currently over
315,000 manufacturing workers employed in this sector now,
which is an increase of nearly 10 percent in 2017.
Additionally, studies have shown that energy efficiency jobs
are the fastest-growing in the entire energy sector with an
additional 133,000 new jobs created in the year 2017 alone.
However, under the Trump administration, DOE has not only
failed to publish its legally-mandated efficiency standards,
but has instead proposed to take the country backwards by
recently announcing two proposals that would negatively impact
consumers, the public health, employment, and the environment.
Full Committee Chairman Pallone, Oversight Subcommittee
Chairwoman DeGette, and I wrote letters to DOE on two
occasions, the first being on November 1st of last year and
again last month, on February 5th, requesting information on
these delayed standards and a timeline for when the agency
expects to take action on these standards. Instead of providing
us with direct answers to our straightforward requests, the
agency has once again shown what I consider to be contempt for
the role of Congress by directing us to hyperlinks that could
be found on the Google search engine.
Let me be crystal clear. DOE's failure to update the 16
appliance and equipment standards that were adopted and
finalized during the Obama administration violates its
statutory obligations under the Energy Policy and Conservation
Act.
What's more, this failure to publish new standards will
disproportionately harm low-income Americans who are more
likely to be renters, and therefore, would save money on
monthly utility bills when outdated appliances are replaced
with more efficient ones.
This failure to follow the law, which was enacted on a
bipartisan basis under President George W. Bush, could
potentially cost consumers billions of dollars in energy bills,
while also creating uncertainty for domestic manufacturers.
Yet, instead of working on its legally-mandated
responsibilities, just last month DOE announced a new proposal
to narrow the scope of energy efficiency standards for light
bulbs, which would set higher efficiency levels for 3 billion
sockets in American homes.
DOE's failure to follow its congressional mandate, along
with its shortsighted proposals, will slow down progress and
compromise the highly successful standards program that has
helped save the average family over $500 annually off their
energy bills.
So I look forward to today's hearing. I look forward to
hearing from DOE and I look forward to hearing from the rest of
our witnesses.
[The prepared statement of Mr. Rush follows:]
Prepared statement of Hon. Bobby L. Rush
Good morning, I would like to thank all of our invited
guests for being here today to testify at today's hearing
entitled: ``Wasted Energy: DOE's Inaction on Efficiency
Standards & Its Impact on Consumers and the Climate''
As we are all aware, Federal efficiency standards conserve
energy, create jobs, encourage American ingenuity and
innovation, all while helping domestic manufacturers stay
competitive in a global market.
The efficiency sector currently employs 2.25 million
Americans, more jobs than all fossil fuel sectors combined, and
there are currently over 315,000 manufacturing workers employed
in this sector, an increase of nearly 10 percent in 2017.
Additionally, studies have shown that energy efficiency
jobs are the fastest growing in the entire energy sector, with
an additional 133,000 new jobs created in 2017 alone.
However, under the Trump administration, DOE has not only
failed to publish its legally-mandated efficiency standards but
has instead proposed to take the country backwards by recently
announcing two proposals that would negatively impact
consumers, the public health, employment, and the environment.
Full Committee Chairman Pallone, Oversight Subcommittee
Chairwoman DeGette, and I wrote letters to DOE on two
occasions, November 1st of last year and again last month on
February 5th, requesting information on these delayed standards
and a timeline for when the agency expects to take action on
them.
Instead of providing us with direct answers to our
straight-forward requests, the agency has once again shown what
I consider to be contempt for the role of Congress by directing
us to hyperlinks that could be found on Google search.
Let me be crystal clear, DOE's failure to update the 16
appliance and equipment standards that were adopted and
finalized during the Obama administration, violates its
statutory obligations under Energy Policy and Conservation Act
(EPCA).
What's more, this failure to publish new standards will
disproportionately harm low-income Americans, who are more
likely to be renters, and therefore, would save money on
monthly utility bills when outdated appliances are replaced
with more efficient ones.
This failure to follow the law, which was enacted on a
bipartisan basis under George W. Bush, could potentially cost
consumers billions of dollars in higher energy bills, while
also creating uncertainty for domestic manufacturers.
Yet instead of working on its legally-mandated
responsibilities, just last month, DOE announced a new proposal
to narrow the scope of energy efficiency standards for light
bulbs, which would set higher efficiency levels for nearly
three billion sockets in American homes.
These Obama-era standards were projected to save consumers
approximately $665 billion through 2050.
This reversal makes absolutely no sense when you consider
the fact that these efficiency standards are responsible for
sparking innovative designs that have decreased costs, created
jobs, and helped domestic manufacturers be more competitive in
the global market.
In addition to rolling back light bulb standards, the
agency also issued a separate proposal to change its ``process
rule,'' making it more difficult for DOE to update new energy
efficiency standards for any product in the future, including
refrigerators, hot water heaters, or air conditioners.
DOE's failure to follow its Congressional mandate, along
with its shortsighted proposals, will slow down progress and
compromise the highly successful standards program that has
helped save the average family over $500, annually, off their
energy bills.
So I look forward to hearing from today's witnesses on
these important issues, and now I would like to recognize my
good friend and the ranking member from the State of Michigan,
Mr. Upton for his opening statement.
Mr. Rush. With that, I want to yield now to my good friend,
the ranking member from the great State of Michigan, Mr. Upton,
for 5 minutes for the purposes of an opening statement.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Thank you, Mr. Chairman, for holding this
important hearing to continue our oversight of DOE's successful
appliance and equipment standards program. I look forward to
hearing from Assistant Secretary Simmons, who leads the Office
of Energy Efficiency and Renewable Energy, which carries out
this important program.
In addition to energy efficiency standards, EERE has an
important responsibility to manage and invest billions of
dollars in cutting-edge research and development, to encourage
innovation and to drive the transition to a clean energy
economy. While this is not a budget hearing--that is going to
take place in May, as I understand--there have been leaked
reports about EERE's FY20 budget proposal, which I am not going
to comment on. But I do want to state for the record that we
expect EERE to carry out the law as Congress intended and
utilize the resources that Congress provides.
Since the mid-80s, DOE has established successive rounds of
efficiency standards for a wide variety of household and
industrial products, such as air conditioners, refrigerators,
washing machines, clothes dryers, furnaces, ovens, dishwashers,
water heaters, and light bulbs. I believe DOE's efficiency
standards have served as one of the nation's most effective
policies for reducing energy use. Efficiency standards have
also contributed greatly toward reducing our carbon emissions
and environmental impacts, strengthening our energy security
for sure, and providing consumers with significant cost
savings.
If we are going to have a serious solution-oriented
discussion about how to address climate change risks, as I
believe that we should, then we must acknowledge the historical
progress that we have made with DOE's efficiency program. We
also must recognize the challenges and opportunities that lay
ahead and remove regulatory barriers to new technological
innovations and efficiency gains.
The Energy Policy and Conservation Act of '75, known as
EPCA, established the first energy efficiency program,
consisting of consumer product testing procedures, labeling,
and energy efficiency targets. Over the last number of years,
Congress amended EPCA and passed new laws setting prescriptive
standards for certain products and directing DOE to establish
new standards via rulemaking for other categories of products.
For home appliances, Congress requires DOE to conduct a
six-year look-back where DOE must publish a new standard or
publish a determination that one is not necessary. Congress
also requires DOE to maintain a multiyear schedule to regularly
review and update all standards and test procedures.
It is long past time that Congress--reexamine EPCA to see
if there are ways to modernize the 40-year-old statute to
improve DOE's appliance standards program. So, while DOE seems
to be doing what it can administratively, with the long-awaited
update to its Process Rule, for standard settings, it is up to
Congress to review the law and make changes when appropriate.
With that, I look forward to the hearing today, and I yield
the remaining balance of my time to Mr. Latta.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Thank you, Mr. Chairman, for holding this hearing to
continue our oversight of the Department of Energy's successful
Appliance and Equipment Standards Program. I look forward to
hearing from Assistant Secretary Daniel Simmons, who leads the
Office of Energy Efficiency and Renewable Energy, which carries
out this program.
In addition to energy efficiency standards, EERE has an
important responsibility to manage and invest billions of
dollars in cutting-edge research and development, to encourage
innovation to drive the transition to a clean energy economy.
While this isn't a budget hearing, there have been leaked
reports about EERE's FY 20 budget proposal. I am not going to
comment on the leak, but I want to state for the record that we
expect EERE to carry out the law as Congress intended, and
utilize the resources that Congress provides.
Since the mid-1980's DOE has established successive rounds
of efficiency standards for a wide variety of household and
industrial products, such as air conditioners, refrigerators,
washing machines, clothes dryers, furnaces, ovens, dishwashers,
water heaters, and lightbulbs.
I believe DOE's efficiency standards have served as one of
the nation's most effective policies for reducing energy use.
Efficiency standards have also contributed greatly toward
reducing our carbon emissions and environmental impacts,
strengthening our energy security, and providing consumers with
significant cost-savings.
If we are going to have serious, solutions-oriented
discussions about how to address climate change risks, as I
believe we should, then we must acknowledge the historical
progress we've made with DOE's efficiency program. We must also
recognize the challenges and opportunities that lay ahead and
remove regulatory barriers to new technological innovations and
efficiency gains.
The Energy Policy and Conservation Act of 1975, known as
EPCA, established the first Federal Energy Efficiency Program,
consisting of consumer product testing procedures, labeling,
and energy efficiency targets.
Over the years, Congress amended EPCA and passed new laws,
setting prescriptive standards for certain products and
directing DOE to establish new standards via rulemaking for
other categories of products.
For home appliances, Congress requires DOE to conduct a
``six-year lookback'' where DOE must publish a new standard, or
publish a determination that one isn't necessary. Congress also
requires DOE to maintain a multi-year schedule to regularly
review and update all standards and test procedures.
It's long past time that Congress re-examine EPCA to see if
there are ways to modernize the 40-year-old statute to improve
DOE's Appliance Standards Program.
While DOE seems to be doing what it can administratively,
with the long-awaited update to its ``process rule'' for
standard setting, it is up to Congress to review the law and
make changes when appropriate.
With that, I look forward to the hearing today and I yield
the remainder of my time to Mr. Latta, who has taken a lead
role over the last several years on bi-partisan EPCA
modernization.
Mr. Latta. I thank the gentleman for yielding.
And I also want to thank our witnesses for being with us
today.
My district in northwest-west central Ohio has over 60,000
manufacturing jobs where many of the products covered by the
program were made. I hear consistently that manufacturers are
not against regulations, but they want and need common-sense
regulations that provide certainty to help them plan for their
businesses.
Last Congress, I worked on draft legislation regarding
updating and modernizing EPCA, and I am pleased to see the work
the Department of Energy has undertaken with the process
improvement rule. And I believe we need to explore these
changes and see what needs to be done in statute.
I believe that energy efficiency is a bipartisan issue, and
we should be able to work together in this committee to ensure
that DOE is able to put its resources toward the products and
categories that will lead to the largest energy savings. This
is what consumers expect from us. And giving DOE the tools to
meet deadlines, provide more certainty to manufacturers, and
therefore, increase innovation and competition to benefit
consumers should be our goal.
I recently toured a new, state-of-the-art innovation center
in my district. Additionally, we have seen produce line
expansions in other facilities across my district. These
companies have seen that investing in Ohio was a win for their
companies and the communities. Certainly, for businesses like
this one, I want to encourage more investment and innovation,
and that is why I want to work with my colleagues on this
program.
I will look forward to hearing from DOE and our second
panel today about what DOE is doing and what Congress needs to
do to continue to strengthen energy efficiency programs.
And I yield back to the gentleman. Thank you very much.
Mr. Rush. The Chair now recognizes Mr. Pallone, who is the
chairman of the full committee, for 5 minutes for the purposes
of an opening statement.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman.
Today, we are here to find out why the Department of Energy
is dragging its feet in implementing energy efficiency
standards that will save consumers money and help combat
climate change by reducing greenhouse gas emissions.
For years, promoting energy efficiency was a bipartisan
issue. During the Obama administration, DOE finalized 50 new
product efficiency standards. Many of these new standards stem
from energy bills that this committee passed on a bipartisan
basis and were then signed into law by President Bush in 2005
and 2007. In fact, our ranking member, Mr. Upton, played a
leading role in that 2007 effort, and we are all benefitting as
a result of that bipartisan work.
Sadly, the progress on this important program came to a
grinding halt when President Trump was inaugurated. Since then,
DOE has made a conscious choice to ignore the law by refusing
to finalize or update efficiency standards for 16 products,
including refrigerators, washing machines, and room air
conditioners. Even more egregious, the Trump administration
refuses to publish in The Federal Register four efficiency
standards finalized in December 2016. These standards were
complete and awaiting official publication, but DOE refused to
follow the law and follow through.
And then, last month, DOE announced that it was completely
discarding a significant update to light bulb efficiency
standards finalized in January 2017. Those standards expanded
existing light bulb efficiency guidelines to include a broader
range of light bulb sizes such as candelabra and cone-shaped
bulbs. Trashing this significant standard will allow
inefficient products to remain on the market and increase
consumers' electricity bills.
DOE also released a revised process rule which guides how
DOE sets appliance efficiency standards. The new rule makes it
harder to update efficiency standards. It does this by cooking
the economic analysis for new standards so that costs are taken
into greater account while narrowing the scope of benefits that
DOE will consider. It also allows manufacturers to use their
own test procedures to verify a product's energy usage. That is
a terrible idea. We should have learned something from the
Volkswagen emission test cheating scandal.
Even worse, it is clear from publicly-available documents
that political staff at the Office of Management and Budget
intervened to make it nearly impossible for DOE to deviate from
this new process, even when sticking to the process would
conflict with legal mandates. But most egregious is the fact
that this administration spent the last two years writing
proposals that weaken efficiency standards while completely
disregarding the law's mandate to update or finalize efficiency
standards for 16 products.
While I may have issues with this new process rule, I don't
have a problem with trying to make the process more efficient.
But when the law says you need to take a specific action, the
Department's job is to carry out the law, and not go off and do
whatever it wants. And I hope that is something all the members
of this committee can agree on.
Today, all of us who care about the issue of climate change
have a chance to condemn DOE's delays. National energy
efficiency standards for appliances are one of the most cost-
effective ways to reduce greenhouse gas emissions, and the
program has resulted in 3 billion tons of avoided emissions
since its inception.
Every day the administration delays updating efficiency
standards for these common household products, consumers'
electricity bills remain higher than necessary and more
electricity is unnecessarily generated to power these less
efficient appliances. And these delays must come to an end.
So Mr. Chairman, I just want to say I know that a lot of
times, when we have these hearings on or we talk about energy
efficiency, people say, well, how important is that? I can't
think of anything really right now that is more important and
has the potential of getting bipartisan support, or really has
had bipartisan support for a long time, that would actually
reduce greenhouse gas emissions.
So when we talk about climate change, this is one of the
most important things that we can address. And there is no
reason really why the Trump administration should be turning
the clock on this, even if they don't believe in climate
change. What is the downside, if you will, of having more
efficiency, saving money, reducing costs, and reducing
greenhouse emissions?
Thank you. I yield back.
[The prepared statement of Mr. Pallone follows:]
Prepared statement of Hon. Frank Pallone, Jr.
Today we are here to find out why the Department of Energy
(DOE) is dragging its feet in implementing energy efficiency
standards that will save consumers money and help combat
climate change by reducing greenhouse gas emissions.
For years, promoting energy efficiency was a bipartisan
issue. During the Obama administration, DOE finalized 50 new
product efficiency standards. Many of these new standards
stemmed from energy bills this Committee passed on a bipartisan
basis and were then signed into law by President Bush in 2005
and 2007. In fact, Ranking Member Upton played a leading role
in that 2007 effort and we are all benefiting as a result of
that bipartisan work.
Sadly, the progress on this important program came to a
grinding halt when President Trump was inaugurated. Since then,
DOE has made a conscious choice to ignore the law by refusing
to finalize or update efficiency standards for 16 products,
including refrigerators, washing machines and room air
conditioners. Even more egregious--the Trump administration
refuses to publish in the Federal Register four efficiency
standards finalized in December 2016. These standards were
complete and awaiting official publication, but DOE refused to
follow the law and follow through.
And then, last month, DOE announced that it was completely
discarding a significant update to light bulb efficiency
standards finalized in January 2017. Those standards expanded
existing light bulb efficiency guidelines to include a broader
range of light bulb sizes, such as candelabra and cone-shaped
bulbs. Trashing this significant standard will allow
inefficient products to remain on the market and increase
consumers' electricity bills.
DOE also released a revised process rule, which guides how
DOE sets appliance efficiency standards. The new rule makes it
harder to update efficiency standards. It does this by cooking
the economic analysis for new standards so that costs are taken
into greater account while narrowing the scope of benefits that
DOE will consider. It also allows manufacturers to use their
own test procedures to verify a product's energy usage. That's
a terrible idea. Haven't we learned anything from the
Volkswagen emissions test cheating scandal?
Even worse, it's clear from publicly-available documents
that political staff at the Office of Management and Budget
intervened to make it nearly impossible for DOE to deviate from
this new process--even when sticking to the process would
conflict with legal mandates.
But, most egregious is the fact that this administration
spent the last two years writing proposals that weaken
efficiency standards, while completely disregarding the law's
mandate to update or finalize efficiency standards for 16
products. While I may have issues with this new process rule, I
don't have a problem with trying to make the process more
efficient. But when the law says you need to take a specific
action, the Department's job is to carry out the law, not go
off and do whatever it wants. I hope that's something all
members of this Committee can agree on.
Today all of us who care about the issue of climate change
have a chance to condemn DOE's delays. National energy
efficiency standards for appliances are one of the most cost-
effective ways to reduce greenhouse gas emissions, and the
program has resulted in three billion tons of avoided emissions
since its inception.
Every day the administration delays updating efficiency
standards for these common household products, consumers
electricity bills remain higher than necessary, and more
electricity is unnecessarily generated to power these less
efficient appliances. These delays must come to an end.
Mr. Rush. The Chair thanks the gentleman. The Chair now
recognizes Mr. Walden, the ranking member of the full
committee, for the purposes of an opening statement. Mr. Walden
has 5 minutes.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Good morning, Mr. Chairman, and thanks for
holding this hearing to continue our oversight over the
Department of Energy's appliance and equipment standards
program.
I want to extend a warm welcome to Assistant Secretary Dan
Simmons, who leads DOE's Office of Energy Efficiency and
Renewable Energy. Dan, we are glad to have you here and glad to
know you are finally in place. I guess that all took effect
officially in January, sworn in. So we appreciate your
leadership at EERE.
Republicans are focused on solutions that save energy, help
the environment, and save consumers money. So, we, too, welcome
the opportunity to explore ways to strengthen and improve this
important Department of Energy program.
Since the early 1980s, the Department of Energy has issued
minimum energy efficiency standards for a wide variety of
residential and commercial products, including air
conditioners, refrigerators, washers and dryers, ovens,
dishwashers, lighting, and other products that Americans use
every day.
The Department's authority to regulate energy efficiency
and commercial equipment in residential appliances is derived
from the Energy Policy and Conservation Act of 1975, also known
was EPCA. While Congress has passed a few updates to this 44-
year-old statute, we learned through our oversight hearings in
the last few Congresses that more could be done to modernize
the law and to improve the process to formulate national energy
efficiency standards.
Under the Obama administration and under the Trump
administration, the Department of Energy has missed statutory
deadlines for efficiency rulemakings. Both administrations
have. These delays create uncertainty and they have led to
unnecessary litigation, which makes matters even worse.
DOE is doing what it can to fix the process
administratively. Under the Trump administration, DOE has
completed more than a dozen rulemakings addressing conservation
standards and test procedures for products such as external
power supplies, light bulbs, ceiling fans, walk-in coolers and
freezers, air conditioners, and pool pumps.
Just last month, DOE announced two new proposals. The first
would revise the definitions of general service lamps to align
with the definitions established by Congress in 2007. DOE was
forced to take this action in response to a lawsuit and
subsequent Department of Justice settlement agreement reached
in 2017.
While some have described this action as a rollback, that
is a mischaracterization. DOE has appropriately committed to
undertake a separate rulemaking, as Congress intended, for
certain specialty light bulbs such as those used in heavy
machine and marine applications.
The second proposal, announced in February, would take long
overdue steps to reform the regulatory process that DOE relies
upon to develop efficiency standards. The Department of
Energy's new proposal, an update to the process rule, would
substantially improve the process for setting efficiency
standards and test procedures.
The proposed rule to the process rule would enhance
transparency, accountability, and regulatory certainty for
manufacturers and for consumers alike. While it is hard to
believe this is the first update to the process rule in more
than 20 years, one of the most important things the process
rule would do is to define what qualifies as significant energy
savings. That seems pretty important to do. This will enable
the Department to better prioritize rulemaking, save energy,
and put more money back in consumers' pockets.
Under EPCA, there is not a lot of flexibility, which too
often has led to unnecessary deadlines and rushed-through
Federal regulations that fall short of providing customers the
better--quality products that use less energy. We know that
unless we amend EPCA, the regulatory backlog will continue, as
it has under multiple presidential administrations. So it is up
to us, the Congress, to fix this mess. We are ready to work
with our colleagues on the other side of the aisle to do so.
Over the last couple of years, Republican members of this
subcommittee have been working across the aisle and engaging in
a wide range of stakeholders' meetings to identify bipartisan
solutions to modernize EPCA. We have made some progress, but
there is still plenty to do. So if the Democrats are willing to
work with us, we are willing to work with you. And we welcome
the opportunity to work with you to continue this effort this
Congress.
Again, Mr. Chairman, thanks for holding this hearing, it is
really important.
And I yield back the balance of my time.
[The prepared statement of Mr. Walden follows:]
Prepared statement of Hon. Greg Walden
Thank you, Mr. Chairman for holding this hearing to
continue our oversight of the Department of Energy's appliance
and equipment standards program.
I would like to extend a warm welcome to Assistant
Secretary Dan Simmons, who leads DOE's Office of Energy
Efficiency and Renewable Energy. I understand that Assistant
Secretary Simmons was officially sworn in in January, so we're
glad that he's finally in place to provide much needed
leadership to EERE.
Republicans are focused on solutions that save energy, help
the environment, and save consumers money, so we welcome the
opportunity to explore ways to strengthen and improve this
important DOE program.
Since the early 1980's, DOE has issued minimum energy
efficiency standards for a wide variety of residential and
commercial products, including air conditioners, refrigerators,
washers and dryers, ovens, dishwashers, lighting, and other
products that Americans use every day.
DOE's authority to regulate energy efficiency in commercial
equipment and residential appliances is derived from the Energy
Policy and Conservation Act of 1975, also known as EPCA. While
Congress has passed a few updates to this 44-year-old statute,
we learned through our oversight hearings in the last few
Congresses that more could be done to modernize the law and
improve the process to formulate national energy efficiency
standards.
Under the Obama administration and the current
administration, DOE has missed statutory deadlines for
efficiency rulemakings. These delays create uncertainty and
have led to unnecessary litigation, which makes matters even
worse. DOE is doing what it can to fix the process
administratively. Under this administration, DOE has completed
over a dozen rulemakings addressing conservation standards and
test procedures for products such as external power supplies,
light bulbs, ceiling fans, walkin coolers and freezers, air
conditioners, and pool pumps.
Just last month, DOE announced two new proposals. The first
would revise the definitions of general service lamps to align
with the definitions established by Congress in 2007. DOE was
forced to take this action in response to a lawsuit and
subsequent Department of Justice settlement agreement reached
in 2017.
While some have described this action as a ``rollback,''
that is a mischaracterization. DOE has appropriately committed
to undertake a separate rulemaking, as Congress intended, for
certain specialty light bulbs, such as those used in heavy
machinery and marine applications.
The second proposal announced in February would take long-
overdue steps to reform the regulatory process that DOE relies
on to develop efficiency standards. DOE's new proposal, an
update to the ``process rule'' would substantially improve the
process for setting efficiency standards and test procedures.
The proposed update to the process rule would enhance
transparency, accountability, and regulatory certainty for
manufacturers and consumers alike. While it's hard to believe,
this is the first update to the process rule in more than 20
years.
One of the most important things the process rule would do,
is define what qualifies as a ``significant'' energy savings.
This will enable the Department to better prioritize
rulemakings to save energy and put more money back in
consumer's pockets. Under EPCA, there is not a lot of
flexibility, which too often leads to unnecessary deadlines and
rushed sue-and-settle regulations that fall short of providing
consumers with better quality products that use less energy.
We know that unless we amend EPCA, the regulatory backlog
will continue, as it has under multiple Presidential
administrations. It's up to Congress to fix this mess and we
are ready to work with our colleagues on the other side of the
aisle to do so. Over the last couple of years, as Mr. Latta
just mentioned, Republican members on this subcommittee have
been working across the aisle and engaging a wide-range of
stakeholders to identify bipartisan solutions to modernize
EPCA.
We've made some progress, but there is still plenty of work
to do. If the Democrats are willing to work with us, we welcome
the opportunity to work with you and to continue this effort
this Congress. Mr. Chairman, I want to thank you for holding
this hearing. With that, I yield back the balance of my time.
Mr. Rush. I want to thank the gentleman. The gentleman
yields back.
The Chair would like to remind Members that, pursuant to
committee rules, all Members' written opening statements shall
be made part of the record.
And I would like now to introduce our witness for the first
panel of today's hearing, Mr. Daniel Simmons, Assistant
Secretary Simmons, who is the Assistant Secretary for the
Office of Energy Efficiency and Renewable Energy in the
Department of Energy.
Mr. Secretary, welcome to this subcommittee hearing. You
have 5 minutes for an opening statement.
And before we begin, I would like to explain the lighting
system to you. You might be familiar with it, but it is written
in here to my script. In front of you is a series of lights.
The light will initially be green at the start of your opening
statement. The light will turn yellow when you have1 minute
remaining. Please begin to wrap up your testimony at that
point. The light will turn red when your time has expired.
We want to thank you again for joining us today, and we all
look forward to your testimony. You are now recognized for 5
minutes for your opening statement.
STATEMENT OF DANIEL R. SIMMONS, ASSISTANT SECRETARY, OFFICE OF
ENERGY EFFICIENCY AND RENEWABLE ENERGY, DEPARTMENT OF ENERGY
Mr. Simmons. Thank you, Chairman Rush, Ranking Member
Upton, Ranking Member Walden, as well as Chairman Pallone.
Thank you for the opportunity for the Department of Energy to
appear before the committee today and to discuss the appliance
standards program and ways in which the Department is working
to improve the process for developing energy conservation
standards.
The program within DOE's Office of Energy Efficiency and
Renewable Energy implements minimum energy conservation
standards for more than 70 categories of labor-saving
appliances and equipment and has far-reaching impacts on
American consumers and businesses.
As EERE Assistant Secretary, I am responsible for
overseeing a broad portfolio of energy efficiency and renewable
energy programs, and one of my top priorities is energy
affordablility.
Affordable, reliable energy is critical to human well-
being. When energy is more affordable, it frees up more of our
budget and time, so we can spend these precious resources on
the things we care about most. Affordable energy is one of the
things that makes the EERE portfolio so important. We have seen
multiple successes through EERE technologies over the past 10
years, including dramatic reductions in the price of
photovoltaic solar, onshore wind, electric vehicle battery
packs, and LED lights. Technological innovation is the driving
force behind these successes.
In addition to its significant research and development
responsibilities, EERE is also responsible for a large
regulatory portfolio which implements State energy conservation
standards for appliances and equipment.
Since January 2017, DOE has issued seven final rules
pertaining to energy conservation standards, two final rules
pertaining to test procedures under the appliance standards
program. As reported in the fall 2018 Unified Agenda of
Regulatory and Deregulatory Actions, EERE plans to take action
on 24 test procedures and 17 energy conservation standards in
the coming months. There was a proposed test procedure that we
announced yesterday. There will be another one, if not
tomorrow, early next week. So we are making progress.
Since the passage of the Energy Policy and Conservation Act
of 1975, DOE has used a process for considering new and amended
energy conservation standards to ensure that they meet our
statutory requirements. That process, which was first
formalized in 1996 in DOE's so-called process rule, typically
takes a minimum of three years to complete and consists of four
phases, each with an opportunity for the public to provide
input.
First, DOE publishes a framework document presenting the
analytical, procedural, and legal principles that will guide
the rulemaking. In the second phase, DOE conducts and publishes
a preliminary assessment of available technical, economic, and
market data about the product. During the third phase, DOE
publishes a proposed rule in which DOE proposes an efficiency
level that it has determined will result in the maximum
improvement in energy efficiency that is both technologically
feasible, and economically justified and would save a
significant amount of energy. The fourth phase is the final
rule, in which DOE considers public input in response to the
proposed rule, further revises the analysis, if appropriate,
and issues the final rule.
We have had great success administering the program, and we
believe that DOE can further improve the process by which it
develops standards to make the program even more effective.
This is why we recently proposed to amend the process to
enhance early engagement opportunities for stakeholders and
increase certainty throughout our rulemaking process.
These improvements will reduce the burden of the process by
which standards are developed, preserve product choice for
consumers, and prioritize those standards that are expected to
save consumers and businesses the greatest amount of energy. In
addition, and importantly, these process measures can improve
DOE's ability to comply with statutory deadlines that the
program has had difficulty meeting throughout its history by
focusing 100 percent of our efforts on the rules that have
accounted for nearly 100 percent of the historical energy
savings.
In addition to the process rule, DOE has also published a
proposed rule to maintain the existing statutory definition for
general service lamps and withdraw the definitions established
in January 2017. Through this proposal, DOE is showing that it
will follow the text of the law. Maintaining the statutory
definitions provides manufacturers with regulatory certainty
that they will not be prohibited from selling hundreds of
millions of light bulbs. At the same time, DOE will continue to
advance cutting-edge research and development of next-
generation lighting technology to further drive improvements in
efficiency and affordability.
As Ranking Member Upton mentioned, there was an article
this morning about EERE's budget. Obviously, I cannot comment
on the budget before it has been released. However, I am more
than happy to talk about how we are executing the monies that
have been appropriated for FY 2019. In the last week, we have
announced two funding opportunity announcements, one on
hydrogen and the exciting technologies there, and another on
efficiency improvements on medium- and heavy-duty trucks. So
there is a lot going on, and you will see more in the coming
weeks. But I, obviously, can't comment on a budget that has not
been released.
DOE is committed to working with Congress as it considers
these and other important issues of DOE's appliance standards
program. Thank you for the opportunity to appear before the
subcommittee today to discuss these important energy efficiency
issues. And I look forward to your questions.
[The prepared statement of Mr. Simmons follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. I want to thank the Assistant Secretary.
We have now concluded the opening statement. We will now
move to Member questions. Each Member will have 5 minutes to
ask questions of our witnesses, and I will start by recognizing
myself for 5 minutes.
Assistant Secretary Simmons, it is very, very disturbing to
me that DOE, under the current administration, has invested so
much valuable time in working on two new proposals that are
both unnecessary and would actually harm consumers. Yet, at the
same time, it has spent little to no time in publishing the
legally-mandated efficiency standards that it should have been
working on.
Mr. Assistant Secretary, is it your interpretation that DOE
has the discretion to choose when or if it must follow
congressionally-mandated laws and obligations?
Mr. Simmons. No, we must follow the text of the law.
Mr. Rush. Well, what is the reasoning for these delays in
publishing these mandates that are congressionally-directed to
the Department?
Mr. Simmons. So the law requires, the law sets out certain
deadlines. The law also requires, for setting standards, what
we need to determine is the maximum improvement in energy
efficiency that is both technologically feasible and
economically justified. And there are seven different factors
that go into deciding whether something is economically
justified.
That process can take a decent amount of time to consider
what is a maximum improvement in energy efficiency that is
possible, what is technologically feasible. That process can
take literally years to consider, especially because we are not
allowed to reduce the performance characteristics of products.
So the process can take a long time to go through, and it is
important that we do a good job following the process to make
sure the substance of the rules----
Mr. Rush. Mr. Secretary, was this process that you are
currently discussing, wasn't this analyzed during the last
administration? And all that remains of you and the Department
today is to publish these standards?
Mr. Simmons. If you are talking about the four rules that
are currently in litigation that were not finalized by the
Department by sending them to The Federal Register, those are
currently in litigation, and because they are in litigation, I
can't discuss those rules.
Mr. Rush. Well, what about the other 12 rules that are not
in litigation?
Mr. Simmons. Those rules are currently moving forward. As
you said, we have a statutory obligation, we have a legal
obligation to complete those rules, and we are working on those
rules. If those rules were ready to go, we would be sending
them to The Federal Register, but there are no rules that----
Mr. Rush. Mr. Secretary, we know that a typical household
saves about $500 per year because of the current standards,
making energy conservation standards the most efficient tool
DOE has for making anything more affordable for the average
American. Additionally, the cost of LED lights has decreased
significantly over the past 10 years. You have even stated
publicly that these bulbs have dropped over 90 percent in price
over the past decade. According to the Appliance Standards
Awareness Project, this proposed light bulb rollback will cost
the average American household an extra $100 a year, and
overall, consumers will be forced to pay an additional $12
million between now and 2025 on electric bills.
So my question to you is, why are you rolling back the
light bulb standards? What is the reason or justification for
this action on your part? And who exactly are you trying to
help by this proposed rollback?
Mr. Simmons. To clarify, we are not rolling back a
standard. We are defining what is a general service lamp by
using the text of the statute. We are following the law about
what is a general service lamp. That is a change in definition
from what was previously put in place, but it is critical for
us to follow the law, including for things that may result in
energy savings.
One of the things that I will note is that I am very
skeptical of large amounts of harm to the American people
because they have greater selection of light bulbs available to
them. This definition does not take any light bulbs off the
table, and if you go to Home Depot today, you will see, for
example, you will see where the lighting industry is headed and
that that future is LED lights.
Just the other day, I bought some of the lights that are
not required, would not be required to be LEDs. I bought them
as LEDs when I was at Home Depot. The future is LED. The future
is greater energy conservation in lighting.
Mr. Rush. My time is up. The Chair will now recognize Mr.
Upton for 5 minutes to ask questions.
Mr. Upton. Well, thanks, Mr. Chairman, again.
I have long been a supporter of DOE's work on appliance
standards, but I realize we have to be realistic about the
challenges. And I know that you have got a good number of
delayed rulemakings that has built up over a number of
different administrations.
And I just want to go back to a comment that I made in my
opening statement about the process rule. This is the look-
back. Why is it so important to update that process rule, and
how will some of the changes, such as defining significant
energy savings, help prioritize in that effort?
Mr. Simmons. I think the most important thing for DOE to do
is to follow the process rule. When the Clinton administration
in 1996 put the process rule in place, it was overall a good
rule. And what is critical is that we follow all the steps, as
in that we have a test procedure and that test procedure is
finalized to know how we are measuring energy before we discuss
how much energy an appliance can use, because you can't--that
just can result in disconnects. And that has not always
happened.
So what we really wanted to stress, first and foremost, is
to follow the process that was outlined in 1996. Second, the
best way that we achieve substantive good rules, good rules
substantively, is to make sure that there is robust stakeholder
engagement, robust public engagement. And the best way we do
that is by going through the process. That can take time, as we
have seen.
Mr. Upton. And how has the look-back requirement hampered
your ability to comply with the statutory deadlines, the six-
year look-back?
Mr. Simmons. Well, one of the challenges is that there are
some circumstances where a rule, a compliance date--we have a
compliance date, and then, we have to start looking at a new
rule just after that. One example is with clothes dryers. There
was a compliance date of January 2015, but, then, the program
started to look, in March of that same year, at regulating the
product again. And that sort of thing has also happened with
commercial clothes washers, where work started on a new rule
even before the previous rule was finalized, even before the
compliance date.
Mr. Upton. So would it be better, as we try to address this
or think about the future, would it be better to have it maybe
six years after the rule is finalized and, actually, the
product in use at that point?
Mr. Simmons. There is definitely an argument to be made
that, after the compliance, it could be after the compliance
date. Because the challenge is that we have to look at what is
out on the market. We have to look at the art of the possible.
And that is difficult to do when you have a compliance date and
then, we start a couple of months later looking at revising the
standard.
Mr. Upton. The last question I have--and we are going to
talk a little bit about this on the second panel--DOE has been
sued, we know, by efficiency advocates and product
manufacturers over missed deadlines. What are you doing to
improve the transparency in the rulemaking process, so that
consumers can be confident that the new products that they are
purchasing meet that expectation for quality, convenience, and,
obviously, for energy efficiency?
Mr. Simmons. Well, the biggest thing we are doing is
following the process and moving stepwise through the process,
making sure that we are conducting a process that is overall
open and transparent, and that there is stakeholder engagement,
and there is plenty of time for public comment. Because the
public comment is critical to making sure that we get rules
that are, in the end, substantively beneficial.
Mr. Upton. Is there fairly universal agreement that, when
you go to an appliance store, whether it be Best Buy or
someplace else, that, in fact, the labels on those appliances,
whether they be air conditioners or freezers, or whatever it
is, are sufficient for the consumer in terms of what that
energy savings is going to be?
Mr. Simmons. I don't know, I don't know the answer to that
question.
Mr. Upton. Have you heard any complaints? I mean, it seems
like the labeling is pretty apparent.
Mr. Simmons. The labeling is very apparent with the
EnergyGuide standard that the Federal Trade Commission puts on
them, using our data. Is that sufficient? I don't know. That is
a really good question.
Mr. Upton. OK. Mr. Chairman, I yield back. Thank you.
Mr. Rush. The Chair now recognizes Mr. Peters of California
for 5 minutes.
Mr. Peters. Thank you, Mr. Chairman.
And I thank the Assistant Secretary for coming before the
committee.
Many of the policies under your portfolio are debated here
in DC. I think there is a widespread recognition that energy
efficiency is something that can be a bipartisan issue. In
California, with the buying power of nearly 40 million people,
our energy efficiency goals support the notion that we could do
much more at a Federal level.
In these meetings, we sometimes get caught up in the law
that exists and how to administer it. I just want to take a
minute to ask you if there are ways you think that the Congress
could help support more energy efficiency, either by enacting
new legislation or by fixing legislation that you are having to
deal with. Are there things that you are seeing that we could
be doing better to promote energy efficiency?
Mr. Simmons. Well, when it would come to legislative
changes, that would need to go through the appropriate process,
which, unfortunately, wouldn't just be me today. But one of the
things that I would like to stress is Congress provides robust
funding to the Building Technology Office, which does research
and development on looking at new building technologies, such
as solid-State heating and cooling for next-generation
appliances. We will be announcing the funding opportunity from
the Building Technology Office for a number of different topics
in the next few weeks.
And so there is the regulatory angle, but, then, there is
also the R&D angle. And I think that we consider both. Off the
top of my head, I don't have any statutory changes, but I would
be happy to go back to the Department and to work on some
ideas.
Mr. Peters. Well, the reason I am asking you is that this
is the process for finding out if we need to make legislative
changes. You are in a position to observe kind of how the
administrative rules that have been set up by prior Congresses
and rulemaking are working. So I just want to give you the
opportunity, if you see anything that you think needs to be
improved or any way in which you are restricted from doing what
would best serve energy efficiency, I want to give you that
chance. If you don't have that today, that is fine, but I think
this is the right place to do it, if you have those suggestions
for us.
Mr. Simmons. And I will be happy to try to provide some
comments in the questions for the record on that.
Mr. Peters. OK. I appreciate it. I mean, it is sort of a
left-field question maybe, but any thoughts on that would be
helpful to us.
Mr. Simmons. Sure thing.
Mr. Peters. I also want to reiterate what Mr. Upton said,
that the integrity of the labeling and the measurements for
appliances is going to be very important. There are some
discussion of whether we should have market incentives that
would encourage consumers on their own to make purchases with
energy savings in mind, if a carbon tax would be an appropriate
price signal through the economy. But if they don't have the
right information about those appliances, it is not going to be
as efficient as, theoretically, people think it would be. So
again, I appreciate working with you to make sure that those
labels are correct and that your information is relied on. It
is by the FTC, I guess, is that right?
Mr. Simmons. Yes, yes. And I use those labels when I look
at new products and I am figuring out what to put in our house.
I hope they are accurate. I haven't heard that they are not.
But it is definitely an area where there could be research.
Another part is with the ENERGY STAR labeling program to
label the products that are the most energy-efficient. We work
on that with the EPA.
Mr. Peters. Right.
Mr. Simmons. And that labeling has very high adoption and
is very much appreciated by consumers.
Mr. Peters. Since you brought it up, I mean, you don't
directly administrate it, but do you have comments on the
ENERGY STAR program?
Mr. Simmons. Well, we jointly administer it with EPA. I
don't have any comments on ENERGY STAR today.
Mr. Peters. All right. Well, thank you.
Mr. Chairman, I yield back.
Mr. Rush. The gentleman yields back. The Chair now
recognizes the ranking member of the full committee, Mr.
Walden, for 5 minutes.
Mr. Walden. Thank you, Mr. Chairman.
And again to our witness, thank you, Mr. Simmons, for being
here.
I want to follow up on what our colleague from southern
California was talking about because I think it is important
for both sides of the aisle. Congress bears some responsibility
here. We write the laws that you get to administer, and
sometimes we don't always get it right.
Over the last few years, the committee has conducted some
pretty rigorous oversight and we have received testimony that
highlights the importance of EPCA modernization. So I would
just pose it this way: I understand you can't take positions on
legislation initially sitting there right today. But will you
commit to working with the committee by providing your comments
and technical assistance as we work to modernize this law?
Mr. Simmons. Yes, definitely.
Mr. Walden. Thank you, because I think that would be really
helpful. You have got the technical people, and we are going to
write the law, and we both want to get it right for consumers.
I have got a couple of questions. Like you, when I buy new
appliances for my home, I look at those ratings. They are
helpful. I think the more we can empower consumers to make the
right choices to save energy, reduce emissions, and cut costs
is a good thing for the country and for the world. I just have
a couple of questions, since I have you here, about how all
that works.
When you are doing this analysis on various appliances,
whether it is a water heater or a washer or dryer or an air
conditioner, is that based on more than one sort of temperate
zone? I mean, is it all based out of savings in Arizona or
savings in Michigan? How does that work? I know it is an
average. I get that. But our power costs in the Northwest,
thankfully, are a little lower than some parts of the country,
but our climate is different, too. So as a consumer, what
should I know about that labeling?
Mr. Simmons. Well, with the labeling, I think it can be
kind of difficult because on like the EnergyGuide label, I
believe it is the average electricity rates in the entire
country. Since you are from Oregon, Oregon has a lot of hydro
and has some of the lowest electricity rates in the country. So
those numbers are kind of high for----
Mr. Walden. And lower emission rates, too, just to stick it
into the record.
[Laughter.]
Mr. Simmons. Correct. And so that is a challenge with those
kind of labels in a place like Oregon.
Mr. Walden. Yes.
Mr. Simmons. They are going to overrepresent the amount of
electricity, for example, that people would save because that
is a national average. For various products such as furnaces,
we do look at performance in different zones of the country
because a furnace that is for the Northeast doesn't necessarily
need to be as efficient because--well, it needs to be more
efficient, I should say, than a furnace that is in Atlanta, for
example.
Mr. Walden. Right, where it wouldn't be used as much.
Mr. Simmons. Where you might not have to use it very many
hours out of the year.
Mr. Walden. Right.
Mr. Simmons. And so the payback is different. So we do
consider different climate zones. I believe some of the
analyses that we do have seven different climate zones, if I am
not mistaken.
Mr. Walden. OK. And is that reflected on the labels then?
Mr. Simmons. That is not reflected on like the EnergyGuide
label, I do not believe.
Mr. Walden. So as a consumer, how would I know, then, the
differences that may occur in these seven zones, if it is
seven?
Mr. Simmons. Some products may not be available in your
area, for example, but I am not sure of how a consumer would
know which zone they are in, as well as what the energy prices
are in that part of the country.
Mr. Walden. Yes. You would think, with today's Information
Age technology, you could have a code that you could scan, and
it would link to a database or something and give you more
realistic data.
I will probably get myself in real trouble here, but when I
shop for a car and look at the miles per gallon that EPA says
that car is going to get, I have yet to have had that actually
work out that way. And so I think, as a consumer, I want labels
I can trust and data that I know I can factor into my
equations. And so that would be something I would love to work
with you on.
Mr. Simmons. OK.
Mr. Walden. We want it to be practical, too. I get that.
But the cost of energy is really important, and I know the
Green New Deal was just evaluated to drive up electricity costs
by 22 percent. So if they are going to march forward with that
proposal, it is going to become even more important that we
look for ways to save energy everywhere we can, if they are
going to drive up energy costs 22 percent for American
consumers. That seems like a pretty big hike in energy costs.
With that, Mr. Chairman, I appreciate the hearing.
And, Mr. Simmons, thanks for being willing to take on this
task, and we look forward to working with you in a bipartisan
way on technical assistance, as we work to improve this
program. It is really important to consumers.
Mr. Simmons. Thank you.
Mr. Walden. Thank you.
Mr. Rush. I want to thank the ranking member. The Chair now
recognizes the chairman of the full committee, Mr. Pallone, for
5 minutes.
Mr. Pallone. Thank you, Chairman Rush.
In the last two years, the Department has blown through 16
legally-mandated deadlines to finalize changes for appliances.
Instead of updating these standards, DOE has spent this time
crafting a draft rule to get rid of efficiency standards for
light bulbs that are projected to save the average household
$100 per year on its electricity bill in 2025.
Now I sent a thorough letter to Secretary Perry in November
of last year asking for, among other items, documents related
to the Department's schedule for action on appliance standards
rulemakings that are overdue. And what I received in response--
and I actually have a copy of it here, Mr. Chairman; I'll ask
unanimous consent to put it in the record--this was the
response.
Mr. Pallone. It was a three-line letter that said, quote,
``Attached is a list of hyperlinks,'' and that was followed by
five pages of links to different portions of the DOE website. I
think, honestly, sir, this ranks up there as one of the most
disrespectful and uncooperative letters I have ever received
from a Federal agency.
I, then, resent the letter last month. And while the
response this time around was more accommodating, it still left
many questions unanswered. One of the items that DOE provided
was the December 2018 Report to Congress. That is this document
that contains, in my opinion, no useful information about what
actions DOE has taken on these 16 products. It simply states,
and I quote, ``in development'' for many of them. Frankly,
unless I am shown otherwise, I am going to assume that ``in
development'' means that the Department hasn't done anything.
So my question is, Mr. Secretary Simmons, will you commit
to finishing these standards that the DOE is legally mandated
to update? And I am just looking for a yes or no. Will you
commit to finishing these standards----
Mr. Simmons. Yes.
Mr. Pallone [continuing]. That are legally mandated?
Mr. Simmons. Yes.
Mr. Pallone. OK. Will you finish them in six months?
Mr. Simmons. Probably not.
Mr. Pallone. How about by the end of the year?
Mr. Simmons. Some will be, some are possible, but it is
important that we meet our legal deadlines, but it is also
important that we meet these substantive requirements of EPCA.
Mr. Pallone. Well, look, I want to say----
Mr. Simmons. And there are many substantive requirements.
Mr. Pallone. I know; I understand, but, it just seems to me
you are not going to follow the law. The law says that you have
deadlines. If you had said six months, I would have said OK.
And then, I say the end of the year; you say, ``I don't know,
maybe.'' To me, that is a clear indication that there is not a
serious effort here. I think that we really need to see some
action now to update and finalize these critical efficiency
standards because they save consumers money and reduce
greenhouse gas emissions.
I have one more question, Mr. Simmons. I am going to shift
gears to quote from a letter for the record we received for
today's hearing, which I would ask to be included in the
record. I would ask unanimous consent, Mr. Chairman.
This is from Alexander Karsner, who was the Assistant
Secretary for Renewable Energy under President Bush.
Mr. Rush. Hearing no objections, so ordered.
Mr. Pallone. Thank you, Mr. Chairman.
[The information appears at the conclusion of the hearing.]
Mr. Pallone. Let me just quote from this, and then, I am
going to ask you a question, Mr. Simmons. This is a quote from
that letter. ``I want to affirm to all the members of this
subcommittee today that there is no basis in science,
technology, policy, or economics for these new proposals for
the administration to roll back progress or to undermine
bipartisan lighting standards. The administration's proposals
are measurably harmful to consumers, to markets, and to the
environment. Further, there is no reason for the Department to
continue missing statutory deadlines to promulgate new
efficiency standards and remain in compliance with the will of
Congress. These hurdles have been overcome already, and the
failure to continue progress simply reflects a lack of acumen,
denying the benefits of innovation for the many, in favor of
the profits of a few.''
As I said, this is not from a national environmental group
or a major consumer nonprofit. It is a letter from Alexander
Karsner, who was Assistant Secretary from 2006 to 2008 during
the George Bush administration. Basically, Mr. Karsner held
your job under President Bush, and he finds it hard to
understand why DOE has missed so many standards.
Do you have any response to that comment by Mr. Karsner,
Mr. Simmons?
Mr. Simmons. Sure. I don't know that he has read the law.
Mr. Pallone. OK. Well----
Mr. Simmons. As in, we took this action----
Mr. Pallone. That is pretty sorry.
Mr. Simmons [continuing]. Because it most closely conforms
with the statute. It most closely conforms with the text of
EPCA. That is the reason that we did it. You can make all the
other arguments, but we need to do this because it is the most
legally supportable.
Mr. Pallone. Well, I think it is pretty sad. Quite frankly,
the record of the appliance and equipment standards program
under the Trump administration is dismal, and I think it is
time for the Department to step up to the plate and begin
acting on these standards. It doesn't seem like you will, but,
hopefully, you will.
Thank you, Mr. Chairman.
Mr. Rush. The Chair wants to thank the full committee
chairman. The Chair now recognizes Mr. Latta of Ohio for 5
minutes.
Mr. Latta. Well, thank you, Mr. Chairman.
And, Mr. Assistant Secretary, thanks very much for being
with us today.
My first question is, why is it important to establish a
threshold for significant energy savings?
Mr. Simmons. Sure. We did an analysis and we looked at the
rules that we have done in the past and how much energy savings
there has been for those rules. What it turns out is that 60
percent of the rules that we did resulted in 96 percent of the
overall energy savings. What that means, if you look at it on
the flip side is that we spent 40 percent of our time on rules
where we only saved 4 percent of energy savings overall. So
that is an issue.
What the difference is, is that on rules where you save
over .5 quads over 30 years, that is rules where you save over
.5 quads over 30 years, those are the 60 percent of rules that
resulted in 96 percent of the savings. So what we want to do is
to make sure that we are saving over .5 quads in a rule,
because those are the rules where there is the most bang for
our buck, the most energy savings for the time that we spend on
it. And so it is critical to focus our efforts there because I
believe it will help us meet our regulatory deadlines as well
as making sure that we have rules that are substantively
defensible.
Mr. Latta. Thank you.
One of our witnesses in the next panel specifically
mentioned the example of DOE's proposed standard for
dishwashers and how the standard was such that dishwashers
could no longer get the job done. It is a good example of
something I would like to make sure DOE was taking into
consideration. How will DOE ensure that a proposed standard
does not and will not negatively impact a product's
performance?
Mr. Simmons. So this is a very important issue because we
are forbidden by statute to impose a standard that would
decrease performance or reduce product features. However, there
are some examples where reasonable people could disagree. One
of the things, for example, where we have found it is a feature
is on an oven, whether or not there is a window. We have found
that that is a feature, but people can and have disagreed over
things such as whether the venting for a water heater, is that
venting a performance feature or not? So this is an important
area for us to look at. It is important for us to ask questions
of the public, of stakeholders, to make sure that we have rules
to make sure that products are doing a good job of saving
people's time, because people's time is an important----
Mr. Latta. I think it is important because, again, this is
from a dishwasher or a washing machine, or something else, or a
dryer, that someone finds that you have to keep pressing the
button to get something done. So actually, in the end run, you
are losing more energy because you have to keep using that
product, the appliance over and over and over. So I think it is
really important that DOE takes that into consideration.
Let me move on. In your proposed update to the process
rule, one of the new changes, it would make the process rule
binding on DOE. My understanding is that this will mean that
DOE will be required to follow the process and requirements
established in the process rule when proposing future energy
efficiency standards. Is that correct?
Mr. Simmons. That is correct, yes.
Mr. Latta. OK. And could you please explain why the
Department believes that this is a necessary change in the
process rule then?
Mr. Simmons. Sure. So when the process rule was started in
1996, one of the key features is that you have test procedures
before you have--you finalize a test procedure. You know how
you are going to measure energy before you set the standard for
the energy or before you have a proposal for setting the
standard for energy consumption. That wasn't always followed.
And as a result, it becomes difficult to understand where the
standards should be if you don't know what the test is. Because
that had been messed up in a number of rules or there had been
a lack of following that procedure, we wanted to emphasize that
that procedure is very important, so that we get the substance
of the rule correct.
Mr. Latta. Well, thank you very much, Mr. Chairman. I yield
back the balance of my time.
Mr. Rush. The Chair thanks the gentleman. The Chair now
recognizes Mr. McNerney for 5 minutes.
Mr. McNerney. Thank you, Mr. Chairman. The gentleman from
California assumes the microphone.
Thank you for your testimony this morning, Mr. Simmons. And
I appreciate your point about focusing on standards that have
the most impact in terms of energy savings. However, by not
regulating appliances with less than half a quad of energy, you
are, in effect, causing consumers to pay increasing electricity
costs, wouldn't that be true?
Mr. Simmons. Well, not necessarily. Let me be clear about
what it is. It is half a quad of savings or, then, 10 percent.
So even if it doesn't meet the half-a-quad savings, if there is
a product that we could still achieve a 10 percent increase, we
would also increase, could increase the standard for that
product as well.
Mr. McNerney. OK. That may be true, but, still, you are
leaving a lot of products without standards, and that is going
to cause consumers to pay more for their electricity. And this
would, in fact, impact the lowest-income Americans, given the
elasticity of electric spending. So we are doing consumers a
disservice here.
Also, my understanding of the Energy Policy Conservation
Act of 1975 is that it identifies products that DOE should set
standards for energy efficiency and update them every seven
years. But you are now saying that the DOE will not update any
standards unless they meet your process rule. This violates the
Congress' intent of constantly updating standards. What is your
response?
Mr. Simmons. No matter what--I mean, I think that is a
misinterpretation of what we are saying in the process rule.
Because we have to meet the statutory requirements, regardless
of the process rule. Because we understand that the process
rule is not allowable us some kind of loophole to not follow
EPCA.
Mr. McNerney. So does the process rule state that it will
not update any standards unless they meet the process rule? I
mean, isn't there some sort of a block here?
Mr. Simmons. No, the process rule is saying that we will
review the standards and we need to make sure that it meets the
requirements in EPCA.
Mr. McNerney. So by reviewing standards, it doesn't mean
updating standards and upgrading standards?
Mr. Simmons. And EPCA does require us to update standards.
For example, at the end of the previous administration--and we
have the Acting Assistant Secretary at the time here--the Obama
administration did not update the standard for dishwashers. And
I am sure Mr. Friedman can talk to you about that.
Mr. McNerney. OK.
Mr. Simmons. Update? Did not increase the standard for
dishwashers, I should say.
Mr. McNerney. OK. Should we be expanding the amount of
covered products, moving away from dishwashers and
refrigerators to routers and telecommunications products?
Mr. Simmons. Well, it is not the position of the
administration to expand the scope of covered products.
Mr. McNerney. And these products are often called vampires
because they sit there and they consume power 24 hours a day,
whether they are being used or not. So I think there is a need
to be looking at those kinds of products as well.
Mr. Simmons. One note on that is that the industry for
dealing with set-top boxes did a voluntary program, so that
your DVR, your set-top boxes for TVs, to voluntarily set a
standard for set-top boxes, so that they improve the energy
efficiency. And they have dramatically increased the energy
efficiency of those products through a voluntary program.
Mr. McNerney. I am a little skeptical of voluntary programs
with these industries.
But I don't have any more questions, Mr. Chairman.
Mr. Rush. The Chair thanks the gentleman. The Chair now
recognizes the gentle lady from Washington State, Mrs. McMorris
Rodgers, for 5 minutes.
Mrs. Rodgers. Thank you, Mr. Chairman.
First of all, congratulations on your appointment----
Mr. Simmons. Thank you.
Mrs. Rodgers [continuing]. And confirmation to serve as
Assistant Secretary for Energy Efficiency and Renewable Energy.
The Obama administration published new efficiency
regulations at a record pace. The current administration
appears to be taking a more deliberative and focused approach
to achieve the maximum improvement in energy efficiency that is
also technologically feasible and economically justified.
I wanted to ask you to speak to the vision, your vision,
for DOE's appliance standards program in general.
Mr. Simmons. Overall, the most important thing to me is
that we are meeting our legal requirements. That is what
matters. And those legal requirements are the deadlines, but
they are also the substantive requirements in the statute. The
way that I think that we do the best job of meeting those
substantive requirements is to follow the process laid out in
the 1996 process rule, and I think it is, hopefully, improved
with our proposed updates to the process rule. It is important
to follow the law. I am a member of the Executive Branch; my
job is to execute the law, and that is our number one priority.
Mrs. Rodgers. I certainly appreciate hearing that from
anyone in the Executive Branch.
Another question. The appliance standards program has been
around for decades. Is it true that many home appliances have
already been subjected to three, or even more, rounds of
successively tighter standards?
Mr. Simmons. Yes.
Mrs. Rodgers. Does the law require DOE to continue
tightening these standards with no end in sight, even if you
are seeing substantially diminishing returns?
Mr. Simmons. So what the law requires, a maximum
improvement in energy efficiency that is technically feasible
and economically justified. That is what we are required to
look at. That doesn't mean that the standard has to be
increased, particularly where a product has been regulated
multiple times and there just isn't as much energy efficiency
to squeeze out. Now, that said, we are working on research and
development, so that there could be more headroom for
opportunities for the future, as in things such as solid-State
lighting. That is a good example of R&D creating more efficient
products over time.
Mrs. Rodgers. Thank you very much.
Mr. Chairman, I yield back.
Mr. Rush. The Chair thanks the gentle lady. Now the Chair
recognizes the gentleman from New York, Mr. Tonko, for 5
minutes.
Mr. Tonko. Thank you, Mr. Chairman.
Assistant Secretary, welcome, and thank you for your
testimony.
I want to echo my colleagues' concerns over DOE's
implementation of the standards program since 2017. DOE
investments and policies have resulted in once unfathomable
cost reductions in LED lighting, somewhat an American
technology success story, with the United States now leading
the world in LED technology. These bulbs are available in the
same shapes as the incandescent and halogen bulbs they replace
and produce the same quality of light much more efficiently.
This is the energy innovation all Members claim they want.
So, Mr. Secretary, do you have a sense of those cost
reductions over the last decade?
Mr. Simmons. Over the last decade, I believe it is greater
than 90 percent for LED lighting.
Mr. Tonko. Which is a great bit of success. Certainly,
Federal R&D investments have played a role, but is it fair to
say that at least some of this cost reduction can attributed to
market conditions created by energy conservation standards?
Mr. Simmons. It could be.
Mr. Tonko. I would say that it is probably more than some,
and that these kinds of savings are achievable precisely
because we have had a robust energy conservation standards
program. So, Mr. Secretary, is it accurate that LED replacement
bulbs are widely available, use less than one-quarter of the
amount of energy to produce the same amount of light, and can
last as long as 10 years?
Mr. Simmons. Yes.
Mr. Tonko. So I would like to unpack two issues from the
February Notice of Proposed Rulemaking. In 2007, in a law
signed by President Bush, Congress included a backstop light
bulb standard to ensure a minimum level of savings starting in
2020. Since DOE did not act by the 2017 deadline, can you
explain why some officials have suggested that the statutory
backstop hasn't been triggered?
Mr. Simmons. Sure. So on the backstop there, it requires us
to first make an assessment. We were forbidden from doing that
through an appropriations rider for years. We were not allowed
to expend funds to do the work necessary to make that finding.
And without making the finding, then the backstop doesn't
happen or----
Mr. Tonko. So what happens, then, in January of 2020?
Mr. Simmons. Well, currently----
Mr. Tonko. What does this mean in that regard?
Mr. Simmons. Currently, the backstop would not kick in
because we haven't done the condition precedent.
Mr. Tonko. Isn't that against the law, the letter and
spirit of the law?
Mr. Simmons. We were forbidden from doing the work
necessary to make the finding by the law by appropriations law.
Mr. Tonko. So I think the concerns for affordability and
energy efficiency enhancement are then lost because of that.
The second issue is that the proposal would change the
definition of general service lamps to exclude certain shapes
of bulbs that go into almost half of America's light sockets
from the 2020 standard. You have spoken about energy
affordability, and I share that goal, but can you explain how
this proposal promotes energy affordability?
Mr. Simmons. Well, first and foremost, the proposal
complies with the law, and that is the most important thing, as
in it could save all the money in the world, but if it is
illegal and we get sued, we would lose. And so first and
foremost, our definitions are the statutory definitions of what
is a general service lamp.
Second of all, as I noted earlier, I truly believe that the
future is solid-State lighting, LEDs and other lights in the
future, other types of lighting such as OLEDs. And many of
these lights are available today, and I believe--well, I
believe--I know that there is massive uptake of consumers
purchasing even the lights that are not defined as general
service lamps.
Mr. Tonko. But if the letter and spirit of the law is to
address affordability and energy efficiency growth, why
wouldn't we just embrace that opportunity to have that much
more available for consumers and consumers' savings?
Mr. Simmons. We can only do what we are legally allowed to
do, and this is an area----
Mr. Tonko. Well, but the law also says there cannot be any
rollback in progress.
Mr. Simmons. Which there has not been. What there has been
is a change in definition.
Mr. Tonko. But it is a rollback if you have all of this
opportunity now with this additional amount of sockets. These
are huge savings for the consumer, for households, and an
improvement in energy efficiency.
Mr. Simmons. Well, and I believe that the vast majority of
consumers are going to achieve those savings because many of
those products are currently on the market and people will
purchase LEDs. I mean, that is the trend in the market today.
Mr. Tonko. Could some people conclude that that was a
backsliding, that you denied those opportunities that were
enhanced in 2017?
Mr. Simmons. Well, the Department does not think so.
Mr. Tonko. Well, do you think so?
Mr. Simmons. Now NRDC is on the next panel. They might have
a different opinion on that probably.
Mr. Tonko. But do you think so?
Mr. Simmons. No.
Mr. Tonko. Do you think that is a backsliding?
Mr. Simmons. I and the Department do not.
Mr. Tonko. Do you see it as a denial of a great amount of
efficiency improvement?
Mr. Simmons. There could be efficiency improvement, yes.
Mr. Tonko. Could be?
Mr. Simmons. There would be efficiency improvement.
Mr. Tonko. So you would deny that?
Mr. Simmons. Well, I am a little bit lost in terms of what
I would be affirming or denying. But I am not sure about the
exact question, sir. I'm sorry.
Mr. Rush. The gentleman's time has expired.
Mr. Tonko. I yield back, Mr. Chair.
Mr. Rush. The Chair now recognizes my good friend from the
State of West Virginia, the one and only Mr. McKinley.
Mr. McKinley. Thank you, Mr. Chairman.
And thank you, Mr. Simmons, for appearing before us.
Yes, I look down the dias and I look at some of the folks
that I have worked with in the last seven or eight years on
energy efficiency, with Peter Welch and Tonko. We have put
several things together, and I think we have been successful.
And I like working on energy efficiency. As one of just two
engineers in Congress, it makes a lot of sense for an engineer
to be involved in this.
But one of the issues that I don't understand, from the
previous administration we couldn't get any traction. I am
curious to see whether or not in the efficiency--we make our
buildings more and more, particularly homes, they are probably
the most demonstrative way that we can see that they are
improving on energy efficiency. But, in so doing, the previous
administration, they turned their back. The previous groups
have turned their back on the indoor air quality. Because the
more efficient, the more tighter we make our buildings, the
less we are having fresh air and air turnovers.
So I am curious to see how you are going to reconcile
energy efficiency and a healthy environment on the inside of
our buildings. Because we know that if we do the two to five
air turnovers in any one given room, it is going to increase
the utility cost to the consumer at that point. And what they
do in schools, they just turn that off; they don't use that. So
we are putting our children and our homeowners in unhealthy
situations. Yes, we are efficient from a cost standpoint, but
from a health standpoint we are cutting corners.
Is this administration, are you all going to be
addressing--I don't know whether this comes up under your
purview, your jurisdiction, or is this someone else within DOE
that we would be talking to?
Mr. Simmons. It is my purview, and it is an issue that we
take seriously, to make sure that we are looking at ways, both
indoor air quality issues such as mold, when you have much
tighter homes than we have had in the past. But we need to look
at the health of the environment to make sure that, as we are
increasing the energy efficiency of our homes, that we are not
leading to unintended negative consequences.
Mr. McKinley. I don't think you are denying that it is
causing some consequences.
Mr. Simmons. Oh, sure, sure, sure.
Mr. McKinley. But we could not get the previous
administration to address this. We know that you spend 90
percent of your time indoors. And without the air turnover, you
are breathing fumes, you are breathing diseases. They say, even
with measles, the molecules are in the air for what, three days
after a person has left the room. I just wonder what we are
doing, how we are going to reconcile the combination of the
two.
Do you think you are going to come out with something that
might pass on recommendations or thoughts to ASHRAE to change
or modify their standards? Or what are we going to do for our
school systems about getting, as high efficient as they are,
but, yet, they are putting our children in unhealthy
environments? How do you think you are going to come out
through this?
Mr. Simmons. I don't know. However, I know that our
Building Technology Office is thinking about this issue, and I
will be more than happy to have them discuss the issues, where
we currently are, what we are currently doing, with you as well
as any of your staff, or whomever else, to make sure that we
are really considering the health of the environment indoors.
Mr. McKinley. I would appreciate if you would get back to
me.
Mr. Simmons. OK.
Mr. McKinley. Putting aside for now, even though that is
something I want to focus on, indoor air quality, what do you
think is the most underutilized efficiency project that a
homeowner could undertake? What would be the one you think that
would help the most?
Mr. Simmons. The answer is going to be somewhere around
heating and cooling, whether it is the HVAC system. Because
lighting, as efficient as lighting is now, it is now consuming
a smaller and smaller part of people's overall electricity
bill. So something around probably HVAC systems, if not water
heating.
Mr. McKinley. OK. I yield back. Thank you.
Mr. Rush. The Chair thanks the gentleman. The Chair now
recognizes Ms. Kuster of New Hampshire for 5 minutes.
Ms. Kuster. Thank you very much, Mr. Chairman.
And thank you to Mr. Simmons for appearing before us. We
appreciate it.
Today's topic touches on every single American household
and business. Energy efficiency standards for home appliances
have helped American families save billions of dollars in
energy costs over the past 30 years. And that is why I am so
disappointed that the Department of Energy has failed to
publish new energy efficiency standards, thereby violating the
Department's statutory obligations under the Energy Policy and
Conservation Act.
According to DOE's own analysis, efficiency standards have
helped American families save $63 billion on their utility
bills in 2015. The Department's failure to update efficiency
standards is costly and will come at the expense of American
families' pocketbooks, public health, and the environment.
Mr. Simmons, I want to ask a series of just basic questions
to understand the theory behind the delay. Would you agree that
improved efficiency standards for home appliances have
dramatically reduced carbon pollution in the United States?
Mr. Simmons. Yes.
Ms. Kuster. And would you agree that improved efficiency
standards for home appliances have dramatically reduced
aggregate home energy costs for families?
Mr. Simmons. They have helped.
Ms. Kuster. And would you agree that reduced carbon
pollution is beneficial to public health and reducing rates of
asthma and cardiovascular disease?
Mr. Simmons. I might disagree on that one, as in carbon
dioxide----
Ms. Kuster. Do you not believe that lowering carbon
pollution is helpful to the public health?
Mr. Simmons. What I wanted to----
Ms. Kuster. I am an asthma survivor. So I am just
wondering----
Mr. Simmons. I am saying that carbon dioxide does not cause
asthma.
Ms. Kuster. But don't you believe that pollution in our
air, including carbon, increased carbon--or lowering carbon
would improve upon the quality of air that we breathe and lower
asthma rates?
Mr. Simmons. Yes, for things such as particulate matter, I
think that could help reduce asthma. But we have seen increases
in asthma rates as our air quality has improved over time. So I
am not sure what is generating this increase of asthma rates
over time. That is what I am trying to say.
Ms. Kuster. OK. And why would your Department fail to issue
energy efficiency standards that could help us improve the
quality of health, improve the quality of life, and save our
planet?
Mr. Simmons. So one of the things that is very important
for the President is for there not to be unnecessary regulatory
burdens.
Ms. Kuster. Well, let me ask you this.
Mr. Simmons. And so where we are not required----
Ms. Kuster. Do you agree that it would improve the quality
of our life if we save--you have said--let me go back--you have
said that improved energy efficiency standards dramatically
reduced aggregate home energy costs? On that, we have agreed.
And you have said that you agree that reduced carbon pollution
is beneficial to public health. You had a debate about the
asthma. I do understand that. But would you agree or not--maybe
you don't agree--do you agree that better energy efficiency is
better for quality of life for American families?
Mr. Simmons. Yes, on that, I will definitely agree. The
better energy efficiency, it is one of the reasons that we
spend millions of dollars a year doing research and development
in the Building Technology Office to improve energy efficiency
overall.
Ms. Kuster. So if we can agree on that--well, let me start
with this. Is it correct that the Department of Energy has
missed 16 legal deadlines for new energy efficiency standards
for products?
Mr. Simmons. I believe so.
Ms. Kuster. And does the Department of Energy believe it no
longer has to comply with statutory obligations under the
Energy Policy and Conservation Act?
Mr. Simmons. No.
Ms. Kuster. So if you agree that the Department of Energy
should comply, then why is your Department engaging in the
delay? That is what I am trying to get to.
Mr. Simmons. We are not engaging in the delay. We are
working through the process that is required for each and every
one of the products that we are required to regulate. That is a
process----
Ms. Kuster. But despite missing 16 legal deadlines?
Mr. Simmons. Despite missing deadlines, we are working
through that process. The process is ongoing, but I
definitely----
Ms. Kuster. What is it that we can do to help you and your
Department comply with these legal deadlines? Is it a question
of lack of resources? What is it that you need from Congress?
Mr. Simmons. It is not a----
Ms. Kuster. Because we want to improve the quality of life
for our constituents. We want them to save money, not just low-
income people, but all people. My husband and I spend quite a
bit of time when we are choosing an appliance for our family,
to get the most energy-efficient, cost-effective--I live in New
Hampshire. It is cold. Energy costs are high. I try to get the
best deal for my family. What can we do to help you, so that we
can help all Americans get that best outcome?
Mr. Simmons. So I don't have a--we have sufficient
resources. I have not heard from the program that we need more
resources. What we do need to do is to work through the
process.
Ms. Kuster. Do you think there is a lack of will in this
administration?
Mr. Simmons. There is a----
Ms. Kuster. Because you keep falling back on the process.
Mr. Simmons. The process takes----
Ms. Kuster. I am wondering if there is a lack of will.
Mr. Simmons. The process takes a lot of time, and it is
not--like I have not heard from the----
Ms. Kuster. I yield back.
Mr. Rush. I want to thank the gentle lady. And I also want
to extend my apologies to her for misidentifying her state. She
is from New Hampshire.
Ms. Kuster. And I apologize for not keeping a better eye on
the clock.
Mr. Rush. Yes, ma'am.
All right. The Chair now recognizes the gentleman from the
great State of Illinois, Mr. Kinzinger, for 5 minutes.
Mr. Kinzinger. Thank you, Mr. Chairman, and thank you for
yielding.
Sir, thank you for being here. Congratulations.
It kind of feels reminiscent. When we had a prior
administration, we were talking about deadlines a lot. It is
just the process. Sometimes it takes some time, and we
appreciate you and your staff diligently working through these.
I think it is safe to say that every member of this
committee shares some common energy goals, including cleaner
emissions and cost savings for our constituents. Of course,
like most issues in DC, the devil is in the details, and it may
seem to those watching or listening back home that the two
parties stand against one another on the issue of energy
efficiency and the environment. So I would just like to state
for the record that, as we begin debate in earnest on these
important issues, I am willing to work in a bipartisan fashion
to address these issues. Most people, if not everybody, is.
Provided that we can stick to facts, we can avoid some of the
unnecessary partisanship and engage in logical conversations.
This hearing is focused on energy efficiency standards, for
which I have a longstanding record in support. But we are
currently grappling with a set of laws that, through subsequent
regulation and court proceedings, have become unclear, to the
detriment of consumers and industry alike.
When the industries that manufacture energy-efficient
consumer products are uncertain about the application of laws
and regulations, it leads to less confidence. The lack of
confidence can lead to higher production costs. Higher
production costs are passed along to consumers. And, of course,
if the consumer is uncertain about the energy saving and cost
savings benefit of these products, they could either pay more
for less efficiency or, if they are not so sure, they could
altogether choose not to buy these energy-efficient products.
In sum, each of these issues should be thoughtfully addressed
for the betterment of consumers, the environment, and yes, even
industry.
So I would like to give you an opportunity to correct the
record on some of the claims that are being made here. I
understand there are about 50 active regulations that DOE plans
to take action on in the coming year. Is DOE committed to
following the law and carrying out its responsibilities under
the appliance standards program?
Mr. Simmons. Yes.
Mr. Kinzinger. We are going to hear testimony on the second
panel that references a high percentage of consumers who
experience a net cost for newer proposed product standards. In
other words, the life-cycle cost of the product will be greater
than the savings from efficiency. Do you believe that
increasing net cost for consumers fits the goals of the Energy
Policy and Conservation Act?
Mr. Simmons. No.
Mr. Kinzinger. How can DOE do a better job to ensure
efficiency standards actually lead to consumer savings?
Mr. Simmons. One of the most important things I think that
we can do is to have a robust, open, transparent process of
setting the standards, so that we are making sure to take
sufficient comment to understand all of the issues around a new
standard. So that we don't get in situations, or that they are
as minimized to the greatest extent possible, where we are
imposing negative impacts on certain classes of consumers.
Mr. Kinzinger. I think it is important to remember, you can
impose rules. We are Congress; we can do whatever we want
imposing rules. What we can't impose is human behavior. So
human behavior has a reaction to any set of rules. Just like if
something becomes convoluted, people can choose to go buy
something else, maybe less energy-efficient and totally
violates any goals that we have here in the House.
I have got one other question. When considering the net
costs, are there other features or performance attributes that
consumers might lose?
Mr. Simmons. That can happen. And one of the challenges is
what gets defined as a feature. That is not always clear. One
thing that is a perennial issue is venting for furnaces or
venting for water heaters. Is that a feature? Is that a
performance feature? And reasonable people can disagree.
Mr. Kinzinger. And I do have another question. The stated
mission of EERE is ``to create and sustain American leadership
in the transition to a global clean energy economy''. The
vision is a ``strong and prosperous America, powered by clean,
affordable, and secure energy''. Are you committed to following
the laws that Congress passes as Congress intends?
Mr. Simmons. Yes.
Mr. Kinzinger. Has Congress provided EERE with sufficient
resources to carry out its responsibilities?
Mr. Simmons. Currently, yes.
Mr. Kinzinger. How are you positioning EERE to create and
sustain American leadership in the years ahead?
Mr. Simmons. Three things overall for our office to focus
on generally. The first is energy affordability. We need to
drive down the cost of all types of energy, as well as the
things that use energy.
Number two we need to figure out how to do a good job to
bring together all of the energy and all of the users of energy
together into an energy system. We need flexibility in the
electric grid of the future. I think that that is very
important. It is the one key thing that the office is focused
on.
And then, the third overall priority for my office is
energy storage, ways to look to have energy storage, especially
because it can improve that flexibility, so you can have more
things like more wind or more solar on the electric grid of the
future.
Mr. Kinzinger. Thank you. Thank you for your service.
Mr. Chairman, I yield back.
Mr. Rush. I want to thank the gentleman. The Chair now
recognizes the gentleman from Virginia, Mr. McEachin, for 5
minutes.
Mr. McEachin. Thank you, Mr. Chairman, and thank you for
calling this hearing today.
And to the Secretary, thank you for being here today as
well.
Increasing efficiency really means reducing waste, doing
more with the resources we are already using. And reducing
waste is an idea that I would think everyone should be able to
support. Greater energy efficiency offers one of the paths of
least resistance economically, technologically, and
logistically for reducing greenhouse gas emissions. So
strengthening efficiency standards carries significant benefits
for public health and for our environment.
Mr. Simmons, in your testimony you speak of DOE's, quote,
``statutory mandate to establish energy conservation standards
that achieve the maximum improvement in energy efficiency that
is technologically feasible and economically justified, and
that saves a significant amount of energy''. What I would like
to do with you today is to unpack the meaning of ``economically
justified''. Because what looks reasonable in one light may
look unreasonable in another.
I have introduced legislation to ensure that long-term
climate impacts are properly weighted in the regulator's
dollar-and-cents benefit/analysis, and I want to apply that
same line of thinking here. In determining whether efficiency
standards for many consumer products are justified, DOE is
supposed to look at, among other considerations, the need for
national energy and water conservation and other factors the
Secretary considers relevant. Energy efficiency, as I have
said, offers one of the paths of least resistance for reducing
greenhouse gases. So it seems clear to me that the need for
national conservation is urgent and great, and that it reflects
our need to minimize climate change and to mitigate its
potentially devastating effects. And it seems equally clear,
given the urgency of the challenges we face, that the current
and projected state of our climate should be factors the
Secretary deems highly relevant to the setting of energy
conservation standards.
Question: so to what extent does the reality of climate
change and the climate consequences which we are already having
to live with influence standard-setting decisions?
Mr. Simmons. So when we do the economic analysis, one of
the things that is considered is climate. It was in the
standards rule set by the Obama administration. That
consideration is also in the standards rule set by this
administration.
Mr. McEachin. So is it fair to say that DOE is grappling
with the fact that, absence significant increases in energy
efficiency, our society could face existential threats within
the lifetime of the folks in this room?
Mr. Simmons. What we are considering is the impact of
greenhouse emissions on the climate from the particular rules,
given that is what our mandate is.
Mr. McEachin. If I hear you correctly, then, DOE
acknowledges that climate considerations can and should play a
role in shaping regulations. Can you speak to why that role is
not greater? If nothing else, surely the urgency of our climate
needs is a compelling argument for moving forward on some of
the standards the DOE has finalized but neglected to publish.
Mr. Simmons. You mentioned the seven factors that go into
considering what is economically relevant. The first one is
economic impact on consumers and manufacturers, lifetime
operating cost compared to increased cost. Talking about
consumers is mentioned numerous times in EPCA. Climate is not
mentioned in EPCA. So while it gets included in the overall
economic analysis, first and foremost, EPCA is designed to
focus on consumers currently. Obviously, Congress can change
that.
Mr. McEachin. All right. Thank you. Mr. Simmons.
Mr. Chairman, I yield back.
Mr. Rush. The Chair thanks the gentleman. The Chair now
recognizes the gentleman from Virginia, Mr. Griffith, for 5
minutes.
Mr. Griffith. Thank you very much. I appreciate it.
I am going to head in the same direction of sorts that my
colleague from Virginia, Mr. McEachin, just touched on, but in
a slightly different vein, and that is the economically-
justified aspect. Mr. Latta of Ohio previously brought some of
this up. That is, are the consumers getting the same product,
even if it is more energy-efficient?
We had some folks testifying a couple of years ago about
hot water heaters and they were going to lower the size of a
hot water heater in an attempt to save energy. And I raised the
point that if somebody has the money to buy a 100-gallon hot
water heater, they probably have the money to buy two 50-gallon
hot water heaters, and are you really making any gain, if you
just lower the size of the hot water heater?
Likewise, I have a constituent who has been very upset,
although this was an EPA rule, about her washing machine
because they don't work as well now that they have changed the
rules some time ago. And so accordingly, she either double does
the wash, in other words, she has two loads where she would
have had one, or on occasion, when she has time to babysit her
machine, she adds additional water to her machine because it
doesn't currently--part of the way they got their efficiency
was they didn't put as much water in it; therefore, they didn't
have as much water to heat. Well, she adds extra water to it to
get around that, so that she can get her clothes clean. And
there were other problems, mold and other issues, that came up.
Is that part of what you look at for economically justified
as well? Is the consumer going to get what they want and are
they likely to be running their washing machines or their hot
water heaters or their dishwashers twice as much to accomplish
the same thing, which actually adds to our energy demand, as
opposed to reducing it?
Mr. Simmons. That is, it can be included in whether or not
something is economically justified. Also, there is another
statutory provision in EPCA that forbids us from reducing the
performance or the features of a product. So it is in EPCA. The
question is, sometimes people can disagree about what that
means.
Mr. Griffith. Well, and I heard you mention earlier windows
in ovens. Tell me what the fight there is.
Mr. Simmons. There hasn't necessarily been a fight, but
that is an example of something that is--like is this, deciding
if that is a feature. And I think that everyone can agree that
that, nearly everyone can--like we could have more efficient
ovens if we didn't have a window on them. However----
Mr. Griffith. Most of your cooks like to look.
Mr. Simmons. What is that?
Mr. Griffith. Most of your cooks like to look.
Mr. Simmons. Exactly, and that is the overall point, is
that it could be more efficient, but we need to have that
feature because it is important to the function of the product
to be able to look and to see if your pie is done.
Mr. Griffith. Well, and along those lines, if you don't
have the window, aren't you going to open that door more?
Mr. Simmons. Yes.
Mr. Griffith. And couldn't that potentially lead to using
more electricity?
Mr. Simmons. It could. Or with dishwashers, if people are
spending more time washing their dishes by hand and running
water, that may overall lead to more energy consumption than
just putting a slightly dirty dish in the dishwasher.
Mr. Griffith. Got you.
Well, I appreciate your being here today. I look forward to
working with you on these issues.
And I yield back, Mr. Chairman.
Mr. Simmons. Thank you.
Mr. Rush. The Chair thanks the gentleman. The Chair now
recognizes the gentle lady from Delaware, Ms. Blunt Rochester,
for 5 minutes.
Ms. Blunt Rochester. Thank you, Mr. Chairman.
And thank you, Assistant Secretary Simmons, for being here.
Your agency is one that oversees some very important
functions as part of the Federal Government. And I want to
start by emphasizing the importance of issues to my State of
Delaware, where we are the lowest mean elevation of any State
in the country. And consequently, we are on the front lines of
climate change. And while I know there has been some skepticism
in the administration about the legitimacy of climate change
and the sense of urgency that we must have, I can tell you that
my constituents see it firsthand. From constant beach erosion
in Sussex County to the changing growing seasons in Kent
County, to chronic flooding in New Castle County, climate
change is a top priority for Delawareans.
As we have mentioned here, your work, energy efficiency,
focuses on our health. It also focuses on our economy and, as I
mentioned, the environment. One of the things that we want to
do here is to be able to attack climate change as quickly as
possible. And so energy efficiency plays a big role.
My colleagues have already shared some of their concerns
about the number of deadlines that have been missed by the
administration, even though they are mandated by law. But I
want to shift and ask some different questions.
Mr. Simmons, in your testimony you submitted to the
committee you say that one of your top priorities is energy
affordability. With that priority in mind, do you support fully
funding and utilizing programs such as LIHEAP, the Low-Income
Home Energy Assistance Program?
Mr. Simmons. I don't have anything to do with----
Ms. Blunt Rochester. Correct.
Mr. Simmons. I don't have anything to do with LIHEAP.
Ms. Blunt Rochester. I know it is not under your----
Mr. Simmons. From the perspective of an administration
witness, I don't know enough to have a comment on that one. I'm
sorry.
Ms. Blunt Rochester. It is an energy efficiency, low-income
program. How about the weather assistance program? Maybe you
could talk a little bit about that?
Mr. Simmons. So you saw in the previous budget that the
Weatherization Assistance Program was zeroed out in the
President's proposed budget. The new budget is coming out soon,
and we will see what is there.
One of the things that I really wanted to emphasize is
that, even though the Weatherization Assistance Program was
zeroed out, that my office worked diligently as soon as funds
were provided to carry out the mission of that office. And that
is something that I think is critical. We are executing on the
monies provided by Congress.
Ms. Blunt Rochester. Mr. Simmons, in Title X, Chapter 2,
Part 430, of the Federal Code, there is a specific reference
made to low-income families and the consideration the
Department must make when determining standard levels. Like the
rest of the country, Delaware has seen an increase in the
number of residents who are now renting, rather than owning
their own homes. And so obviously, that means that those
individuals are unable to make decisions to upgrade to more
energy-efficient appliances but are still often saddled with
the energy costs of more inefficient appliances. Can you talk
about what your Department has done with rental properties in
relation to energy efficiency?
Mr. Simmons. So overall, the Building Technology Office, I
don't know if there has been any specific focus on rental
property as opposed to all property, as, then, trying to
increase energy efficiency of windows, energy efficiency of
insulation. As one of the Representatives pointed out
previously, Mr. McKinley, talking about increasing insulation
that makes the area, the housing tighter, which can lead to air
quality issues, but we could put those aside for a minute. We
are doing a lot of things on research and development. I don't
know if there has been any specific focus on rental properties.
Ms. Blunt Rochester. One of the reasons why I ask is
because, when we don't deal with the standards that impact all
of us, some of us don't get the same level of support they need
to be able to be energy-efficient.
But I want to shift, one last question. Are there strategic
investments that can be made in an infrastructure policy
package to accelerate energy efficiency strategies in buildings
or industrial processes? And if so what are they?
Mr. Simmons. That is a----
Ms. Blunt Rochester. I have about 28 seconds.
Mr. Simmons. Yes.
Ms. Blunt Rochester. So you could probably submit that in
writing because I am sure you won't get it all out.
Mr. Simmons. Exactly.
Ms. Blunt Rochester. But you can start. You have got 20
seconds.
Mr. Simmons. That is just what I was going to say, is that
one I would have to get back to you in writing.
Ms. Blunt Rochester. OK. Thank you. I yield back.
Mr. Welch [presiding]. The Chair recognizes Mr. Johnson
from Ohio.
Mr. Johnson. Thank you, Mr. Chair.
And, Assistant Secretary Simmons, I would like to start off
by saying right upfront that DOE's work on efficiency standards
is important. There is a benefit to these programs, but it is
crucial that the process is fair and transparent. I think your
work on the appliance standards program and bringing
stakeholders into the fold early is equally important and can
result in a more workable and achievable set of standards.
Now one important aspect of setting efficiency standards
should be understanding the upfront cost to consumers of a
product associated with any efficiency gains. I represent a
very rural part of Ohio, eastern and southeastern Ohio. Many of
my constituent's live paycheck to paycheck. And I worry that
these standards could have a disproportionally adverse impact
on low-income households as the costs of appliances go up.
So to what extent does DOE consider the impact of cost to
the consumer in consideration for efficiency standards,
especially as it relates to low-income households?
Mr. Simmons. So our statutory mandate is to look at the
maximum improvement in energy efficiency that is
technologically feasible and economically justified. And so in
the consideration of what is economically justified, that is
where we do the analysis to try, to the maximum extent
possible, to make sure that we are not increasing the cost of
products and making things more difficult. Because if you
cannot afford a new product, if you cannot afford a new HVAC
system, for example, then you are not going to receive any
benefits from it, and you may, then, put in window units that
are less efficient. So the cost considerations are of paramount
importance.
Mr. Johnson. Can you just briefly indicate any specific
cost factors that you consider in that type of analysis?
Mr. Simmons. Well, there are seven. The economic impact for
consumers and manufacturers, and to do that, we have to
consider various types of consumers, whether it is higher
income or lower income; the lifetime operating cost compared to
increased cost, and that is a big issue. If you can't afford it
upfront, you are not going to get those lifetime benefits.
Projected energy savings, impact on utility or performance. So
there is a number of factors that we consider that directly
look at making sure that, as we are increasing a standard, that
it does not result in consumer disutility or consumer harm.
Mr. Johnson. OK. Along similar lines, we have seen DOE
propose efficiency standards that raise the upfront cost of an
appliance with the promise that we will achieve those savings
over time. In some cases, like dishwashers, the payback period
could exceed 10 years. I can tell you, I got a dishwasher and I
am already having to do major repairs, and I haven't had it for
10 years. So I would never achieve that efficiency payback.
So does DOE have any criteria for what it considers a fair
payback period for appliances?
Mr. Simmons. I would have to get back to you. I don't think
so. We don't have an exact level. But it is one of the
considerations that is looked at, is what is the payback
period. Because if it gets very long, if it is 10 years, in my
opinion, that is far too long because of all of the possible
intervening events that can happen in that 10 years, that
paybacks need to be quicker.
Mr. Johnson. Yes, I am certainly not trying to be funny,
but back to that paycheck-to-paycheck analysis, if it doesn't
have a return on investment within the next month, people in
rural America are going to be hard-pressed to purchase
efficiency systems.
Can you provide some examples where the payback period
exceeded the life of the product? Have you run across any of
those examples?
Mr. Simmons. I believe they exist. I don't have any at my
fingertips currently. I would be happy to provide that in
writing.
Mr. Johnson. OK. If you could get back to me, I would
appreciate it.
Mr. Simmons. Yes.
Mr. Johnson. Mr. Chairman, I yield back a whole 26 seconds.
Mr. Welch. You are very generous today. Thank you.
The Chair recognizes Mr. O'Halleran.
Mr. O'Halleran. Thank you, Mr. Chairman and ranking member,
for having this meeting today.
Cutting-edge energy efficiency technologies of tomorrow are
available today. And it is this committee's responsibility to
ensure that the Department of Energy continues to deploy energy
efficiency standards as they are described in the Energy Policy
and Conservation Act to not only benefit Americans, but also
the environment we live in.
The effects of climate change are impacting rural America
the hardest, especially in my State of Arizona, where droughts
are impacting our farmers, crop yields. Wildfires are
devastating our National Forests and Parks. Following the
United States' fourth hottest summer on record, according to
NOAA, these energy efficiency standards that we are discussing
today have never been more important.
The benefits of energy efficiencies technologies are very
clear. But protecting the environment should not be a partisan
issue, but, rather, a call to action in which members of both
sides of the aisle may find common-sense solutions.
As a member of this committee, I am new. And so I guess
where I come from is you are the head of a fairly large group
of people. When you put these projects together, as you stated,
your most important issue to meet the statute requirements. And
so what does that work plan that you put together look like in
order to meet those? What are your timelines? What are your
milestones? Do you put that together for each plan, so that you
can make those guidelines become available to the public?
Mr. Simmons. So that is, at the highest level, that is
available to the public. That is what is called the Unified
Agenda of Regulatory and Deregulatory Actions. That describes
the 50 active regulatory actions that are currently occurring
in the Department of Energy. And the most recent update to that
was in the fall. In that, there were 24 test procedures that
were on the active agenda. There were 17 energy conservation
standards that we are actively working on. We have just sent
updates to that to OMB, to OIRA, for the spring Unified Agenda
that will lay out what regulations we are going to be actively
working on. And I expect that when we are done with that
process, there will be more--that we will be adding new active
regulatory actions to that agenda.
Mr. O'Halleran. As you miss milestones and other deadlines,
do you try to identify do you have a lack of personnel or are
there change orders that are coming in, similar to a
construction project, that require, whether it is political or
otherwise, require changes that would move that end date of
accomplishment of meeting statutory requirements?
Mr. Simmons. There is some internal work that I definitely
can engage in to make sure that we are doing a better job of
meeting our deadlines and interacting with staff. I have not
spent as much time as maybe I would like to talk with the
program about looking for how they believe that we can do a
better job of meeting our standards, and I will do that.
Mr. O'Halleran. Has there been any request for additional
funding in order to be able to meet standards on a timely
basis?
Mr. Simmons. Not internally, no.
Mr. O'Halleran. OK. I guess when I am late getting my taxes
in, if I am, I either file an extension and let everybody know
in the IRS or I get penalized. If I am late with a payment to
the bank, after a while they say, ``You owe your money.'' And
when we are late with getting a statutory requirement into
Congress, I would think that our agency would say we need to
find a way to get it there on time. And I am trying to figure
out why that is not being accomplished.
Mr. Simmons. One reason is that this process takes a long
time, and it takes a long time to do right.
Mr. O'Halleran. But, you know that at the beginning anyway.
It has taken a long time, time after time after time. So the
idea is, the American people are waiting to be able to save
money, to save energy, and to be more efficient with the use of
that energy. And the more that there are delays in the system,
it is apparent, some of the billions of dollars of savings that
are accomplished over time, that we are costing the American
taxpayers money. And it would be efficient for us to be able to
get these statutory requirements that you identified as the
most important process, to get it finished.
Mr. Welch. And the gentleman's time----
Mr. O'Halleran. Thank you, Mr. Chairman. I yield.
Mr. Welch. Thank you.
Mr. Simmons. May I respond to just say that that's a good
and valid point.
Mr. O'Halleran. Thank you.
Mr. Welch. The Chair recognizes Mr. Bucshon from Indiana.
Mr. Bucshon. Thank you.
And thank you, Assistant Secretary, for being here.
I was a doctor before. I just want to clarify that carbon
dioxide is a byproduct of normal human respiration, and in and
of itself has no effect on cardiovascular disease or asthma.
That has been implied over and over in the climate discussion.
I believe that the climate is changing, but to imply that that
byproduct of respiration has a direct effect on those diseases
is hyperbole and meant to scare the American people.
Why are four rules under litigation?
Mr. Simmons. Four rules are under litigation because we did
not send them to the--we did not finalize them by sending them
to The Federal Register.
Mr. Bucshon. OK. Are these rules from the previous
administration or----
Mr. Simmons. Yes.
Mr. Bucshon. OK. So the litigation doesn't have anything to
do with the rule itself; it has to do with the timing of
submitting them to The Register? Or are there flaws that you
can comment on in the rule that was----
Mr. Simmons. The litigation is about whether or not it was
legally permissible for us not to send them to The Federal
Register.
Mr. Bucshon. OK. Thanks for clearing that up.
Did the Obama administration that you are aware of meet all
its statutory deadlines? Has this been a chronic problem?
Mr. Simmons. It has been a problem for multiple
administrations, including----
Mr. Bucshon. Yes, probably for decades, right?
Mr. Simmons. Yes.
Mr. Bucshon. Yes. So that is on us, on Congress really, to
help you with that, I would say.
So the proposed energy efficiency standards must be
developed and tested using sound science, transparent data, and
clear metrics for determining the economic justification. You
have talked about this some. Can you describe how your office
plans to adhere to these most basic requirements in formulating
new energy efficiency standards?
Mr. Simmons. Well, many of the issues have been highlighted
today----
Mr. Bucshon. Yes.
Mr. Simmons [continuing]. Of the need that we have to make
sure that we are doing a good job, whether it is to be making
sure that these products have good performance, that the cost
increases, the possible cost increases are not unduly
burdensome. And that process can take time to make sure that we
are talking to, that we are hearing from all stakeholders, from
the general public, to make sure that--you know, these are
things that people interact with every single day. People
interact with their dishwashers, with their microwaves, with
their refrigerators, with their water heaters, with their HVAC
systems. So it is critical that we get it right, and that can
take time.
Mr. Bucshon. Understood. Well, I think we can all agree
energy efficiency is something every consumer and manufacturer
should strive to adapt. However, I am concerned that tightening
energy efficiency standards to unrealistic levels could have an
unintended impact of costing American manufacturing jobs.
And I am from Indiana and I think we know the Carrier case
in Indiana. When I met with the parent company, United
Technologies, they said that the 50 standards that were put in
place over at the Obama administration made it essentially
impossible for them to continue to manufacture in my state, as
one of the main factors, because regulations were piled on them
very quickly, probably for the most part for ideological
reasons.
And this can affect small manufacturers particularly, that
can't absorb this type of hit. So our State is a big
manufacturing State, home to a lot of small manufacturers in
the Eighth District.
So to what extent does the DOE take employment impacts into
account when they set efficiency standards?
Mr. Simmons. So one thing that we are legally required to
do, so it is very important that we do do it, is that when we
are considering the factors that make up whether or not a rule
is economically justified, one of those factors is impact of
lessening of competition. And I think that can be read in a
number of ways. It doesn't explicitly talk about employment,
but employment I believe should be included there----
Mr. Bucshon. Sure.
Mr. Simmons [continuing]. To make sure that the United
States is as economically competitive as possible, and that we
are not reducing needlessly----
Mr. Bucshon. So you would probably agree, then, that
putting standards in place are difficult to meet from an
economic standpoint, that results in jobs being transferred to
other countries than the United States, probably need to be
looked at pretty closely, and that should be a substantial
factor in applying these efficiency standards to the United
States?
Mr. Simmons. Yes. I mean, it is very much contrary to the
administration's position to be shifting jobs outside the
United States. We want to grow----
Mr. Bucshon. And I would agree with that.
Mr. Simmons [continuing]. To grow U.S. manufacturing.
Mr. Bucshon. Thank you. I yield back.
Mr. Welch. Thank you, Mr. Bucshon. The Chair recognizes
himself.
This question on efficiency standards, it's interesting. I
want to say a couple of things. Number one there is a lot of
bipartisan support for aggressive energy efficiency. That is
number one. In fact, when we passed in the House the Waxman-
Markey bill that had as its goal 80 percent carbon reduction by
2050, 40 percent of the carbon reduction was through
efficiency.
Secondly, there has been a lot of leadership on the
Republican side of the aisle when they were in the majority,
and now in the minority. So there is a real potential here for
common ground.
Third, efficiency standards play a major role. And some of
my colleagues have been rightly raising some questions about
what the impact is which you are trying to assess. What does it
do to small manufacturers? What does it do to consumer cost?
And those are difficult questions. They have to be addressed.
Because if it is unaffordable, you are not going to buy it and
you are not going to get the benefit.
But a lot of manufacturers acknowledge that having
standards that all of them have to compete to meet, and then,
have that out in the marketplace actually helps them, because
it is not a race to the bottom, where competition is on the
basis of the lowest-quality product. So I have sympathy for the
challenge of these competing interests. Mr. Johnson raised some
questions. Dr. Bucshon just did, and others. But it does
require that you get the standards out, and that hasn't been
happening. And I don't want to go into the delays in the Obama
or this administration. It doesn't matter. The bottom line, how
are we going to get these standards out?
As I understand it, there is a huge delay. We are very late
in getting the energy efficiency improvements associated with
the latest model of code. So I am kind of following up on what
Mr. O'Halleran said. What have we got to do to get these
standards out from you? That is number one.
Mr. Simmons. Well, it is one of the reasons that we have
the proposed process rule, because we think that that will
streamline the process by having an early-look procedure where
we have an assessment early in the process, and that if it
isn't possible to meet our statutory requirements, then we can
more easily move to the rules where there is the greatest
opportunity for energy efficiency.
So that is why it is also important to define what is a
significant savings of energy, because the law requires, EPCA
requires us for rules to save a certain amount----
Mr. Welch. Yes. Well, you know, you have got a hard job
because of all of these competing considerations you have got
to take into account, but we really need you to get that done.
And then, we can have an argument about what the impact is.
Another issue is about the DOE loan program, and I
understand that is a different office than yours, but it
overlaps a bit with your focus area. Currently, as I understand
it, there is $5 billion in unused loan authority for renewables
that are available. That was a program authorized under the
Bush administration. And can you tell us what is up and what we
need to do to get that thing going?
Mr. Simmons. I know that the loan program is actively
looking for projects. I know that they have talked to the Wind
Office, for example, about potential. And one area could be
offshore wind projects.
Mr. Welch. So what have we got to do to----
Mr. Simmons. They are working on it.
Mr. Welch. What have we got to do to get those loans
authorized?
Mr. Simmons. That I don't know. I can say that, as the head
of the Loan Program Office said, that LPO is open for business
and that they have been actively looking for opportunities.
Mr. Welch. And so you don't know, basically?
Mr. Simmons. I don't know more than what I just said.
Mr. Welch. Well, yes, I mean, that is frustrating, probably
is frustrating for you as well. I mean, you have got that loan
authority. You have got a lot of entrepreneurs out there. It is
not a red State/blue State deal. A lot of folks who see an
opportunity to make some money would be able to do it, if they
could get access to the loans and move ahead. So I just urge
you to do all you can to implement that program or encourage it
to be implemented.
And finally, I want to take a step back and briefly ask
about a few other efforts at DOE. What steps is DOE taking to
ensure energy efficiency R&D is being conducted at all levels,
the early stage, the mid stage, and long-term focus?
Mr. Simmons. So we know that the key there is that, as
Secretary Perry has said, we are following congressional
direction. And so where we have congressional direction to be
at early, mid, and late stage, we are trying our best to meet
that congressional direction. And you will see that in the next
few weeks when the Building Technology Office releases their
latest funding opportunity announcement.
Mr. Welch. Thank you. We will look forward to seeing that.
Mr. Rush [presiding]. Mr. Secretary, it has been a long
morning and I know you have other important work that you have
to get done. I want to thank you so very much for your
participation here during this first panel, and we want to see
you again soon.
[Laughter.]
Mr. Simmons. Likewise. Thank you very much, Mr. Rush.
Mr. Rush. All right. And that concludes panel one.
Now I would like to invite panel two to now take seats at
the desk.
Now that we are in set order or sit order, let me introduce
the panelists, beginning at my left.
Mr. Andrew deLaski is the executive director of the
Appliance Standards Awareness Project of the American Council
for an Energy Efficient Economy.
Ms. Katherine Kennedy is the senior director of the Climate
and Clean Energy Program at the Natural Resources Defense
Council.
Mr. Joseph M. McGuire is the president and CEO of the
Association of Home Appliance Manufacturers, AHAM.
Mr. Charles Harak is the senior attorney for energy and
utility issues of the National Consumer Law Center.
Mr. Stephen Yurek is president and CEO of the Air-
Conditioning, Heating, and Refrigeration Institute, AHRI.
And Mr. David Friedman is the Vice President of Advocacy
for Consumer Reports.
And at this time, the Chair will now recognize each witness
of the second panel for 5 minutes to provide an opening
statement.
Before we begin, I have the task of explaining the lighting
system. In front of you is a series of lights. The light will
initially be green at the start of your opening statement. The
light will turn yellow when you have 1 minute remaining. And
please begin to wrap up your testimony at that point. And the
light will turn red when your time has expired.
With that, I will now recognize Mr. deLaski for 5 minutes
for an opening statement.
STATEMENTS OF ANDREW deLASKI, EXECUTIVE DIRECTOR, APPLIANCE
STANDARDS AWARENESS PROJECT, AMERICAN COUNCIL FOR AN ENERGY
EFFICIENT ECONOMY; KATHERINE KENNEDY, SENIOR DIRECTOR, CLIMATE
AND CLEAN ENERGY PROGRAM, NATURAL RESOURCES DEFENSE COUNCIL;
JOSEPH M. McGUIRE, PRESIDENT AND CHIEF EXECUTIVE OFFICER ,
ASSOCIATION OF HOME APPLIANCE MANUFACTURERS; CHARLES HARAK,
STAFF ATTORNEY AND MANAGER, ENERGY UNIT, NATIONAL CONSUMER LAW
CENTER; STEPHEN R. YUREK, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AIR-CONDITIONING, HEATING, AND REFRIGERATION
INSTITUTE; AND DAVID J. FRIEDMAN, VICE PRESIDENT OF ADVOCACY,
CONSUMER REPORTS
STATEMENT OF ANDREW deLASKI
Mr. deLaski. Chairman Rush, Ranking Member Upton, and
distinguished members of the committee, I thank you for the
opportunity to testify today.
My name is Andrew deLaski. I am the executive director of
the Appliance Standards Awareness Project. ASAP is a coalition
project that is lead by a steering committee consisting of
efficiency advocacy organizations, State Government
representatives, consumer and environmental organizations, and
utility companies.
I would like to do two things in my remarks today. First, I
want to highlight how the existing National Standards Program
benefits the nation. Second, I will describe for you how the
current administration has badly mishandled the program.
Appliance, equipment, and lighting efficiency standards are
one of the foundations of U.S. energy policy. According to the
American Council for an Energy Efficient Economy, they are the
number two Federal policy for saving energy. The energy and
water savings from appliance standards translate into
pocketbook savings for consumers and businesses, create jobs,
make our energy systems more resilient and reliable, foster
technological innovation, and reduce emissions that harm public
health and the environment.
Some data for your consideration. The typical household
spends about $500 less per year on their utility bills than if
there had never been any standards. That is equal to a 16
percent utility bill cut. It is hard to think of another policy
out there that has done as much to improve the affordability of
energy bills. All told, consumers' savings from existing
standards for both consumers and for businesses totals $2
trillion by 2030. It is a Department of Energy number.
Jobs. When consumers and businesses spend their bill
savings on other goods and services, research shows that that
boosts employment. Standards boosted the number of domestic
jobs by about 300,000 jobs in 2016.
Next, saving energy with improved efficiency standards
helps make our energy systems more resilient, reliable, and
affordable.
Climate change. U.S. carbon dioxide emissions in 2020 will
be about 345 million metric tons lower, or about 7 percent
lower, because of existing energy efficiency standards.
Unfortunately, over the past two years, the National
Appliance Standards Program has been seriously mishandled by
DOE. I will summarize five ways.
First, DOE has missed 16 statutory deadlines for
determining if current standards should be revised and is on
track to miss 12 more, another dozen, by January 2021. Updated
standards could add hundreds of billions of dollars in savings
for consumers.
Second, the Department has proposed to eliminate light bulb
standards slated to take effect next year. Members serving on
this committee today from both parties worked hard on that 2007
law that created light bulb standards. You did a good thing.
You set initial standards, starting in 2012, that are now
saving enormous amounts of energy and money. Despite claims by
some, the sky hasn't fallen.
You also required a second stage to take effect in 2020 and
created a minimum level for that 2020 standard, 45 lumens per
watt. In providing 13 years of advance notice, you sent a clear
signal to the market. You helped unleash a torrent of
innovation, LED light bulbs use just a smidgen of energy
compared to the light bulbs they replace and last 10 to 15
years.
But now, DOE has proposed to eliminate the 2020 light bulb
standards by rescinding the 2017 rule that expands the
standards to most everyday light bulb and asserting--you heard
it today--that the backstop standard does not apply. This
action would cost a typical U.S. household about $115 in lost
energy savings by 2025 on an annual basis. Carbon dioxide
emissions in 2025 will be about 1 percent higher on a
nationwide basis because of this rollback action. Where else
can you get a policy that will save the average household over
$100 and also trim U.S. CO2 emissions by 1 percent? It makes
zero sense to eliminate light bulb standards.
Third, DOE has proposed an unnecessary rewrite of its
standards development process rule that won't make it just
harder to catch up on missed deadlines; it will put the
National Standards Program into a deep freeze.
Fourth, DOE has abused its enforcement discretion to issue
broad policies that negate duly-promulgated standards. DOE
reversed course on one of these when the requesting industry
group changed its mind, but the message has been sent. DOE is
open to simply not enforcing the law.
Fifth, DOE now contemplates a petition from the gas
industry that would, if acted on, eliminate consideration of
the single most important technology for saving natural gas,
condensing technology. We are very concerned that DOE will do
as the gas industry has requested.
These harmful policies represent a sharp break from how
this program has been handled across prior administrations,
both Republican and Democratic. Instead of building on the
foundational energy policy of National Appliance Standards,
this administration has taken a wrecking ball to it. The
consequences will be higher utility bills for consumers,
increased strain on our energy systems, more uncertainty for
business, and needlessly higher levels of climate change and
other pollution.
Thank you for the opportunity to testify.
[The prepared statement of Mr. deLaski follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. I thank the gentleman.
The staff is trying to get you some refreshments. We will
give them a moment to make sure that they replace the water for
you.
Now the Chair recognizes Ms. Kennedy for 5 minutes for the
purposes of an opening statement.
STATEMENT OF KATHERINE KENNEDY
Ms. Kennedy. Chairman Rush, Ranking Member Upton, and
distinguished members of the subcommittee, thank you for the
opportunity to testify at this important hearing.
My name is Katherine Kennedy, and I am a senior director of
the climate and clean energy program at NRDC.
Climate change is the existential threat of our time. 2018
was the fourth warmest year on record. The human tool of
climate change is immense, and the economic costs are reaching
hundreds of billions of dollars per year. Indeed, nearly 20
percent of the Federal deficit for fiscal year 2018 was in
response to devastating wildfires, hurricanes, floods, and
other natural disasters around the country.
The impacts of climate change are felt most acutely by low-
income communities and communities of color and by the most
vulnerable Americans, especially children and the elderly. But,
together, we can still avoid the worst impacts of climate
change using tools and technologies that are already available,
first and foremost, energy efficiency. We know how to solve
this problem. The biggest risks are inaction and delay.
As NRDC explained in our recent report ``America's Clean
Energy Frontier: The Pathway to a Safer Climate Future,'' using
energy more efficiently is crucial to America's efforts to
fight climate change. It is our best weapon. Energy efficiency
lowers carbon pollution and consumer energy bills, strengthens
the electricity grid, and avoids the air and water pollution
that threatens our health and that of our communities. Energy
efficiency is the most equitable and affordable climate
solution because, as it lowers carbon pollution, it also lowers
the energy burden on low-income Americans.
DOE's Appliance Standards Program has a strong bipartisan
track record. It was created in 1987 under a Republican
President, a Republican Senate, and a Democratic House. For
four decades, it has enjoyed support, not only from groups like
NRDC, but from consumer and low-income advocates, utilities,
State officials, and many manufacturers.
Our National Standards Program has already produced
enormous carbon energy and dollar savings, but the best is
still to come. As we energy wonks like to say, energy
efficiency is the low-hanging fruit that keeps growing back.
Opportunities for further energy efficiency keep growing as
technology and innovation continue to advance.
Now is the time to dramatically scale up our energy
efficiency program. Appliances and equipment have long
lifetimes. Each inefficient piece of equipment installed today
in our homes, businesses, and factories helps to lock in a
higher level of global warming. The more we delay, the harder
it will be to reverse course.
We should continue the tradition of bipartisan support for
energy efficiency standards, but the current administration has
brought the DOE efficiency standards program to a grinding halt
and is trying to put it in reverse. The agency has not issued
one new or updated energy efficiency standard, or even proposed
any standards, under this administration other than those
issued by the Obama administration or put in place by Congress.
There is no room for excuses. DOE has clear legal deadlines
to meet, and time and time again, this administration has
failed to meet them. Instead, DOE is focused on unnecessary
changes that will undermine the program and its impact. DOE is
even attempting to gut lighting standards signed into law by
President George W. Bush.
Congress should be gravely concerned that DOE's illegal
delays will have consequences stretching far beyond this
administration. Fighting climate change without a robust energy
efficiency standards program is like trying to finish a puzzle
with missing pieces. It is harder, it takes longer, and in the
end, it is impossible. That is not a risk we can afford to
take.
Instead of irresponsible and illegal delays and rollbacks,
DOE should update energy efficiency standards on time and
should act to expand the program's energy and carbon savings.
This will benefit all Americans, our economy, and our
environment, and will protect our children's future.
Thank you, and I will be happy to respond to any
questions.\1\
\1\ The prepared statement of Ms. Kennedy has been retained in
committee files and also is available at https://docs.house.gov/
meetings/IF/IF03/20190307/109029/HHRG-116-IF03-Wstate-KennedyK-
20190307.pdf.
Mr. Rush. Thank you.
The Chair now recognizes Mr. McGuire for 5 minutes.
STATEMENT OF JOSEPH M. McGUIRE
Mr. McGuire. Chairman Rush, Ranking Member Upton, and
members of the subcommittee, thank you for the opportunity to
testify this morning on behalf of the home appliance industry.
Our industry is a strong supporter of, and participant in,
the appliance standards program since its creation. We strongly
support a system of Federal standards and State preemption, and
we do not support a rollback of any standards.
The energy efficiency gains across major appliance
categories are dramatic and undeniable. Modern refrigerators
use the same amount of electricity as a 50-watt light bulb. A
new clothes washer uses 73 percent less energy than it did in
1990 but can hold 20 percent more laundry. Today's average
dishwasher uses 50 percent less water than in 2001.
While the appliance program is successful, it is in need of
modernization. Over the years, regardless of the
administration, concerns have arisen when DOE has failed to
move in an efficacious manner, too slowly, too quickly, and
with no real prioritization.
In 2005, DOE was directed by Congress to issue a standard
for battery chargers by 2008. That did not happen. In 2007, a
new law compelled DOE to act no later than July 1st, 2011. DOE
did not issue the final rule until 2016.
And DOE has moved too quickly to publish a standard. The
most alarming example of this was the 2015 proposed dishwasher
rule. Manufacturer tests show that dishwashers could not clean
dishes with such a small amount of water allowed by the
standard. The economic analysis to support the proposed rule
also showed the economic payback to the consumer was longer
than the useful life of the product. To its credit, DOE did not
dispute the test results provided by our Members and pulled the
proposed standard back.
The overarching historical problem is that DOE's work and
resources are based on arbitrary timelines set forth under
EPCA. DOE's resources should be used efficiently to manage
energy savings, not maximize rulemakings.
In the last two Congresses, AHAM has advocated amendments
to achieve these modernizations. We would welcome action on
such legislation by this committee and the 116th Congress in a
bipartisan manner.
Short of achieving such legislative reforms, we have urged
DOE to adopt some of these reforms administratively. We are
pleased that DOE has proposed important, but modest reforms in
the past few weeks, and we look forward to studying them
further and hope that the Department will implement them.
To be clear, much of the current process rule stays intact
under the latest reforms proposed by DOE. We support a few
common-sense principles in the proposal. The first is that the
agency should be required to follow the process it establishes
to govern the regulatory program. Second, requirements in how
to test a product should be final before a standard is
proposed. Third, provide DOE the ability to better prioritize
its regulatory work and to focus its resources on those
products that offer the greatest opportunity for energy
savings.
And let me add a word about test procedures for home
appliances. Virtually all Federal appliance efficiency test
procedures were initially built on industry-developed test
standards. The new process rule requires DOE to rely on these
voluntary accredited standards consistent with OMB directives,
where appropriate. DOE always had, and will continue to have,
the ultimate says on Federal test procedure construction.
Our objective is to improve the regulatory environment in
measurable ways that foster a fair, more predictable, more
open, and more efficient regulatory landscape. We will continue
to live up to our responsibility to provide consumers with
life-enhancing products that deliver superior performance and
energy and environmental benefits.
Mr. Chairman, and members of the subcommittee, in summary,
we call on Congress to modernize EPCA, so that DOE can better
prioritize its work based on potential energy savings, improved
transparency, and stakeholder engagement, and a logical
sequence to proposing test procedures and standards.
Thank you for the opportunity to testify, and I would be
happy to answer any questions.
[The prepared statement of Mr. McGuire follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. Thank you.
The Chair now recognizes Mr. Harak for 5 minutes.
STATEMENT OF CHARLES HARAK
Mr. Harak. Thank you, Chairman Rush, Ranking Member Upton,
and members of the committee. I thank you for the opportunity
for allowing the National Consumer Law Center to offer
testimony. It is truly a privilege to have the opportunity to
provide NCLC's perspective on why regularly updated appliance
standards are so important for low-income consumers.
Appliance standards make home energy more affordable. For
low-income consumers, this means fewer terminations of utility
service and homes that are more comfortable and healthier to
live in. Even from a narrow Federal budget perspective,
appliance standards help stretch Federal fuel assistance
dollars, the program referenced by the Congresswoman from
Delaware, by lowering the household's heating and cooling
bills.
To provide some context for my comments, I will share some
calls I had with a low-income consumer recently. The woman--I
will call her Susan--had been living without heat for three
weeks because her landlady had done nothing to fix her heating
system after it had stopped working. Susan is a working single
mom with a school-age child. While her heat was out, Boston had
temperatures below 10 degrees, at the same time that the
Midwest was experiencing record cold temperatures. Her
apartment was so cold that her son had a hard time getting up
and going to school, as he was anxious and lethargic. While the
local board of health eventually cited the owner for serious
sanitary code infractions, Susan had to tell the owner she
would be going to court in order to get the heating system
working again.
For those of us who work with low-income households,
experience teaches that, when owners replace failed equipment
like the heating systems in Susan's home, they often go out and
buy the lowest-cost and least-efficient unit that will replace
the failed appliance. This leaves the tenants with higher
energy bills.
This is why imposing minimum appliance efficiency standards
is so important for low-income people, in particular. They are
disproportionately renters. While the homeownership rate for
the country as a whole is around 64 percent, homeownership
rates among low-income households are around 30 percent.
The major appliances which contribute most to energy bills,
heating systems, air conditioners, water heaters, are almost
always purchased by the owner. In the absence of good
standards, low-income renters will become saddled with
inefficient equipment and needlessly high bills for years.
While some critics voice concerns about the cost of
adopting efficiency standards, the Department of Energy
operates under statutory mandates that require it to ensure
that standards adopted provide net benefits to consumers. The
statutory language which the Assistant Secretary referenced, I
will quote it. ``Any new or amended energy conservation
standard shall be designed to achieve the maximum improvement
in efficiency which the Secretary determines is technologically
feasible and economically justified.''
Historically, the Department has taken quite seriously
those last five words, ``technologically feasible and
economically justified''. My office, the National Consumer Law
Center, has been in several Department standards dockets. They
do take years to complete, involve extensive analysis of the
economic impacts on consumers, on manufacturers, and on the
economy, and allow for all stakeholders to be heard.
The Department's own web page says, ``DOE regulations
governing covered appliances...are established through a
rulemaking process that provides opportunities for public
review and comment. Manufacturers, distributors, energy
suppliers, efficiency and environmental advocates, and other
members of the public are encouraged to participate in
rulemakings.'' And, in fact, they do.
If NCLC would make any criticism of the Department's
process, we would note that it has consistently erred on the
side of overestimating the cost of manufacturers complying with
the standards. Products sold after the standards go into effect
often cost less than estimated, and consumer benefits have,
therefore, been even greater than predicted.
The net benefits to consumers of appliance standards are
impressive. The Department estimates--again, I am quoting their
website--``standards saved American consumers $63 billion on
their utility bills in 2015''. Energy efficiency groups agree
that standards have saved consumers billions of dollars in the
near term and much more in the long term.
Consumers, thus, face significant harm when the Department
unreasonably misses deadlines for updating appliance standards.
The failure to promptly revise standards leaves consumers worse
off, as the sale of less efficient products leads to higher
energy for the life of the product purchased. For major
residential products, heating systems, air conditioners, water
heaters, the aggregate loss to consumers can easily reach
hundreds of millions of dollars, depending on how the late the
Department is in finally revising that standard. Moreover,
because the more efficient products will result in lower energy
bills, failure to revise standards can affect consumer health
as well, since higher energy bills lead directly to
terminations.
In conclusion, we applaud the committee for holding this
important hearing and hope the committee will succeed in
getting the Department to meet all deadlines.
Thank you.
[The prepared statement of Mr. Harak follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. I want to thank the witness.
And now, the Chair recognizes Mr. Yurek for 5 minutes.
STATEMENT OF STEPHEN R. YUREK
Mr. Yurek. Mr. Chairman, Ranking Member Upton, and members
of the subcommittee, I thank you for inviting me to testify
this morning on the topic, or this afternoon.
Thank you, Chairman Rush, Ranking Member Upton.
AHRI has 320 member companies that manufacture air
conditioning, space heating, water heating, and commercial
refrigeration equipment that supports over 100,000 U.S.
manufacturing jobs and more than 1.3 million American jobs
throughout its supply and distribution chain. And I want to
make it very clear that our industry has a long and proven
record of leadership when it comes to innovation and energy
efficiency.
I am here today to discuss three main points.
First, we agree that the Department of Energy should do all
it can to promulgate regulations in a timely manner while
adhering to the requirements that energy standards be
technically feasible and economically justified. Our industry
is unequivocally opposed to delays in rulemakings, as we always
have been. In fact, in 2005, we joined a lawsuit against DOE to
require them to issue rules in a timely manner.
However, the amendments enacted in EPACT 2007 actually
increases the burden on DOE by mandating a six-year review of
all efficiency standards and a seven-year review of all test
procedures. AHRI and its members' companies are best served
when the proper amount of time is devoted to each rulemaking,
rather than cut short because of the need to catch up to meet a
standard.
The history of feast-or-famine rulemaking by DOE negatively
impacts consumers and manufacturers. For consumers, it
increases the cost of products they rely on for their comfort,
health, and safety. For manufacturers, it increases uncertainty
and hampers planning for future research, development, testing,
and production of the next generation of equipment. Therefore,
we join the subcommittee in its call for DOE to do everything
it can to complete rulemakings in a timely manner.
Second, we applaud DOE for recently issuing a proposed rule
updating the process rule. While we will submit comments with
suggestions on ways that the proposed rule might be improved,
we are pleased that DOE intends for the rule to be binding on
the Department, rather than mere guidance, as claimed by DOE in
the past. When all parties are aware of the process,
rulemakings are more transparent, economical, and predictable.
Finally, we believe that the above two points make the case
for a bipartisan congressional action to reauthorize and reform
the nearly 45-year-old EPCA to bring it into the 21st century.
While EPCA was a bipartisan response to the energy crisis of
the mid-1970s, and it has been extremely successful, the fact
remains, it is nearly 45 years old, and a tremendous amount has
changed since then.
EPCA reform should stress flexibility, enhance technical
and economic justification. Given short shrift to such analysis
in order to meet arbitrary statutory deadlines results in
poorly-constructed rules that place undue burdens on small
businesses with wide-ranging ramifications for our industry and
the 1.3 million employees who depend on it.
Under current law, before a standard is even in effect, DOE
must announce the commencement of its work on the next version
of that standard, all to comply with the six-year mandated
rulemaking cycle. We are not suggesting no additional
rulemakings, nor would we ever suggest rolling back efficiency
standards for any product category. Manufacturers in the market
are simply not given enough time to adjust to new regulatory
requirements. Our equipment is designed to remain in service
for more than a decade. So the market for new products must be
viewed in the long term, not in six-year increments.
A reformed EPCA would require the new rulemakings to
include a look-back to determine the effectiveness of the
previous rule as it pertains to actual energy savings and
associated costs. Every time DOE issues a new rule, it issues a
press release that extols its estimates of the rule's benefits
and cost savings for consumers and energy savings for the
nation. But DOE has never looked back to see what the energy
savings were or if consumers ever recovered the additional
money it costs them upfront for the more efficient equipment.
This needs to change.
Mr. Chairman, and members of the subcommittee, many people
believe that a divided Government such as we have today makes
it less likely for progress to be achieved on important issues.
We do not see it that way. Rather, we see this as an
opportunity for people of good will to meet in a spirit of
cooperation and compromise to bring about necessary change.
Therefore, the opportune time for updating EPCA is now.
AHRI and our Members are committed to openness and
cooperation with Congress, allied trade associations,
efficiency advocates, and the DOE on ways we can all work
together to improve this nearly 45-year-old law. We invite all
stakeholders to join us and work together to craft an updated
regulatory scheme that meets the needs of the current and
future market while achieving the nation's energy goals.
Thank you very much.
[The prepared statement of Mr. Yurek follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. That concludes the opening statements.
Oh, I'm sorry. Mr. Friedman, please accept my apology. You
are recognized for 5 minutes.
STATEMENT OF DAVID J. FRIEDMAN
Mr. Friedman. I apologize. Dealing with technical
difficulties.
Mr. Upton. You just feel like the President; you get three
mikes, right?
[Laughter.]
Mr. Friedman. There you go. There you go. I just want to be
closer to the middle, I guess.
Well, Chairman Rush, Ranking Member Upton, and members of
the committee, thank you for the opportunity to testify on
behalf of Consumer Reports, our more than 6 million members,
and Americans, who together spend nearly $325 billion a year on
their household energy bills.
Now, as a nation, we have known for more than 240 years
that some truths are self-evident. So with tongue partly in
cheek, I would point to the self-evident truth that the
cheapest energy is the energy you never use, and it is energy
efficiency standards that deliver just that. Or, to use the
Assistant Secretary's frame, the most affordable energy is the
energy you never use.
Now I saw that self-evident truth firsthand when I sat in
the same chair as the Assistant Secretary a few years ago. When
the Department of Energy is active on energy efficiency
standards, the benefits truly add up. In fact, they have
delivered a 5-to-1 return on investment for every American that
should be the envy of Wall Street.
And here, investment is truly a keyword. These standards
are an investment in American ingenuity. Our top companies look
to these standards both for market certainty and to continue
driving innovations into the market. They create a series of
good, better, and best models of a product and count on DOE
staff to survey that progress as they set the next standard.
These companies see their R&D dollars pay off and create new
jobs as the market changes while consumers save a lot of money
from this virtuous cycle.
The only other option, frankly, is a race to the bottom,
which is what will happen if we buy into those here who seem to
think that American ingenuity is nearly tapped out. Plenty of
company's overseas are happy to keep the bar low, dumping their
barely compliant products on our markets while other countries
get the latest technology.
Now, in contrast, as I think you have already heard today,
lighting shows what happens when you invest in innovation. You
can walk through any hardware store now and you can choose LEDs
that have daylight, soft white, dimmable bulbs, programmable
bulbs, floodlights, candelabra lights, bulb lights, Christmas
lights. I even saw some menorah lights. You can get anything
you need, and all those amazing choices are thanks to a mix of
efficiency standards set by Congress in this case and other
investments in innovation.
Now, building on this success story, near the end of my
time at DOE, staff put forward a well-reasoned plan to expand
the definition of general service lamps, so more choices and
savings could be available for more Americans. This
administration's rollback will reduce consumer choice and make
utility bills less affordable.
Now, from reading the proposal, the decision was clearly
not about consumers or affordable energy. Instead, they
appeared to rely on legal gymnastics to argue that what was
perfectly legal in 2016 was no longer allowed just a few years
later. Of course, the law didn't change.
Adding insult to injury, the Department's process rule
update is filled with red tape. And frankly, I find it shocking
that, when Congress puts down deadlines or creates process, it
is called arbitrary; it is called optional. And yet, when we
have new administration process, it is called necessary and
must be binding. I don't think that is the way the Constitution
works.
DOE should be focused on helping Americans, not adding new
red tape that further slows down the process and appears
designed to help companies tie up these standards in courts.
Making matters worse, the proposal sets an arbitrary threshold
for whether or not some household products can ever get a new
or stronger standard.
This retrospective-based threshold is completely out of
step with modern life, where we rely on consumer electronics
and other gadgets that don't use a ton of energy individually,
but together account for nearly 40 percent of home electricity
use. That shouldn't be off limits.
Now, sadly, administration decisions that leave American
consumers footing the bill are all too common these days. From
rollbacks on fuel economy standards that will cost consumers
more than $400 billion to rollbacks on predatory loan
protections and net neutrality, the scales are being tipped
further and further away from everyday Americans. The solution
is for all of us, consumers, Government, and leading
businesses, to ensure that innovation and technological
progress serve the interests of the American people again. And
that means being guided by self-evident truths.
In closing, developing standards that allow the talented
Federal staff to get back to work on timely, transparent, data-
driven standards that will save consumers money and help put
the marketplace back in balance. And I hope that is what we can
deliver together.
Thank you.
[The prepared statement of Mr. Friedman follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Rush. I want to thank the witnesses, all the witnesses.
We have now concluded the opening statements, and will move
toward member questions. Each Member will have 5 minutes to ask
questions of our witnesses. And I will begin by recognizing
myself for 5 minutes.
Mr. Harak, when did the National Consumer Law Center first
become involved with DOE appliance standard dockets and why?
And initially, how does the delay of rulemaking of efficiency
standards impact low-income consumers?
Mr. Harak. I jointed the National Consumer Law Center in
2000. And it may be no surprise, this is not our primary work,
appliance standards. We are mostly trying to make sure people
don't freeze in the winter of cold and die of the heat in
summer, have the lights on and the appliances they need.
But some of my colleagues here brought to my attention that
there were standards proceedings. And at the time, the furnace
standards proceedings were moving. And it became apparent that
that is a really important issue for low-income consumers.
I live in Massachusetts. Mr. Chairman, you are in Illinois.
These are cold States where people's heating bills are just
about the largest bill they face. And if they lose their
heating, that is one of the gravest threats they can face.
So we became involved in this from the perspective that it
is very important for there to be standards that keep bills
down on those major appliances for low-income people, and as I
mentioned in my testimony, particularly because they are so
disproportionately tenants. No tenant buys a heating system.
Tenants don't buy a lot of the major appliances, and they
really can be saddled with bills.
And so when you ask about what is the impact of delay, you
heard a little bit from the Assistant Secretary there is a
pretty complicated scheme of what DOE looks at. And one of the
things they look at is the percentage of consumers who are
better off if the standard passes and the percentage who are
not. There is always some shakedown between that. But when DOE
issues the rules, because the vast majority of people would
benefit by that standard getting out the door, well, the
logical converse of that is, if you don't get it out of the
door, the majority of consumers are going to be harmed because
those less efficient appliances are in the market.
And it is perhaps why I started with the story about that
client with their heating system down. That is the reality of
appliance standards. It is important when a Susan of the world
has her heating system down, that the landlord cannot buy
something that is extremely inefficient.
Mr. Rush. Mr. Friedman, as a former Principal Deputy
Assistant Secretary and Acting Assistant Secretary of Energy's
Office of Efficiency and Renewable Energy, EERE, can you
briefly discuss the important role that negotiated rulemakings
have played in building consensus? From your understanding, how
would this new process rule impact negotiated rulemaking?
Mr. Friedman. Thank you, Mr. Chairman, for the question.
The vast majority of the times DOE staff is able to dive
in, look at the data, and produce standards that work for all
Americans and work for industry. At times, some of the
standards are more controversial. And so staff rely on a
negotiated rulemaking process, which it is pretty
straightforward. You get everyone around the table, and you
talk about what works, and you try to find a consensus that
helps everyone. It has been incredibly successful at breaking
through logjams.
One of the things I fear that is going to happen with this
new process rule is, if it is binding, it is going to allow
companies to tie up every single step in the courts, so you
will never even get to negotiated rulemaking. And you would
strangle the opportunity for industry and consumers to work
together with Government to make things better for all.
Mr. Rush. Mr. deLaski, do you have any input that you would
like to offer on the same question?
Mr. deLaski. Yes. I served as the chair of the Federal
advisory committee that worked on negotiating rulemakings from
2012 until 2018.
I am concerned that the process rule as proposed would make
successful negotiation far less likely, for the reasons that
Mr. Friedman has described. That is probably first and
foremost, is that it is going to freeze up the process
altogether. So why negotiation if there is no risk that the
Department is going to act at all, right? So the incentive to
come to the table to negotiate has been massively reduced.
The second thing I thought--I think all of us actually
would agree on this--is that it takes away the ability to do
creative things in negotiation that enable success, like
looking at flexible compliance dates, such as looking at
different standards for different equipment types. So some of
that flexibility that they have taken away by the process rule
will really reduce the ability for--when you take away options
off the table, that makes agreement harder to achieve. And that
is what the process rule as proposed would do.
Mr. Rush. That concludes Mr. Pallone's time. The Chair now
recognizes the ranking member for 5 minutes for purposes of
questioning the witnesses.
Mr. Upton. Thank you, Mr. Chairman.
Again, I appreciate all of your testimony. I think that it
is pretty apparent that all of us want appliance standards,
energy efficiency standards for appliances.
Mr. Friedman, you made a very good point that the industry
does want these, particularly the domestic industry here,
because we can beat anyone else in the rest of the world. We
also know that there is a direct payback to all the Americans
that are able to use that.
I know, Mr. McGuire, you share that. As AHAM, you know that
your member companies share those same views.
I have a couple of comments. Mr. McGuire, you indicated in
your testimony--you didn't read it all, which is good because
you summarized it--but you said, on page 9, ``Home appliances
are now in an endless cycle of regulation, where as soon as one
compliance effort ends or is near completion, another round of
regulation to change the standard again begins. . . . no time
for manufacturers to catch their breath. Just as importantly,
there is no time for DOE, manufacturers, or efficiency
advocates to assess the success of standards or review their
impacts on consumers and manufacturers.''
What should the timing be? Should it come at a certain
period after the regulations are finalized? What should that
look-back period be? What would you suggest?
Mr. McGuire. First of all, the six-year look-back, that
clock starts running as soon as the rulemaking is completed for
the standard. So before the companies have the ability to sell
through product to the existing standard, DOE is already in the
process of a rulemaking to change it. So the manufacturers have
to be involved in that.
The other fundamental problem is that there is a six-year
look-back for standards; there is a seven-year look-back for
test procedures. They are out of sequence. You have to have a
completed test procedure before you can test a product to see
how much energy it uses and if it can meet the standard. So we
think that sequence needs to be changed, needs to be looked at.
And secondly, DOE is really hamstrung between the statutory
look-back requirement and the statutory balancing test of
maximum technological feasibility, significant energy savings,
and economic justification. They are hamstrung. They are never
going to have the resources. They never have had the resources
to do a good job on all these rulemakings at the same time. We
have seen the perils of when they try to do that.
So a new process, an amendment to EPCA could be that, for
some products that have been through three and four different
standards, the diminishing returns of the energy savings are
there. Those products ought to be in a separate class where
they don't have to go through a serial look-back every time,
unless, as Assistant Secretary Simmons said, through R&D that
DOE does or that companies do, a technological breakthrough is
determined, and then, a quick look can happen.
So there needs to be prioritization. Vast energy savings
have been achieved for many products and we are at a
diminishing return for others. So DOE should not be spending a
lot of the time on the products that only delivered 4 percent
of all the energy savings. And the Congress and I think just
about every group at this table could work together on trying
to find a solution to this law, which has had success.
Mr. Upton. I want Mr. Friedman to respond to that. But
also, the actual testing of the appliances, it is not like here
in DC at DOE, right? At Consumer Reports, you have your own
labs where you test them? Or do you take the data from the
companies themselves?
You have got to use the three mikes again.
Mr. Friedman. At Consumer Reports, yes, we have our own
testing labs up in Yonkers, New York, as well as an auto test
track out in Connecticut. So we rely on our own data. We take
no advertising dollars. We take no samples. We ensure that all
of our results are independent. And similarly, the Federal
Government----
Mr. Upton. And do they usually match up with what the
ENERGY STAR labels indicate?
Mr. Friedman. We don't do compliance testing. We do
comparative testing. So it would be unfair to necessarily
compare their data to our data. We try to make sure that
consumers can make the best choices when they walk into the
marketplace; whereas, the Department of Energy's role is to
ensure that a rising tide lifts all boats. Whereas, we help
people find the very best of the best that are out there.
I would also just add, I personally think the staff did an
amazing job during the Obama administration of producing a lot
of rules, and they were in a tough spot, right? They were
trying to catch up after years of neglect of the program. They
worked quite well under existing processes and helped many,
many, many Americans save quite a lot of resources.
I would also just add that it is surprising to me, the lack
of faith that folks have in American innovation and the ability
to keep pushing the boundaries of technology. If anything, the
pace of innovation is changing so fast that, six years from
now, you know, this is probably going to be obsolete. So the
ability of the Department to not just keep up with but try to
stay ahead of technology and move quickly is incredibly
important. I would hate to see anything slow down, given the
pace of innovation in this country, which I know you share a
faith in.
Mr. Upton. Just to conclude, because I know my time has
expired, we are going to see amazing energy savings in a whole
host of products. And I am going to be talking to Mr. Pallone
later about actually having a hearing on where we are going in
the future.
So with that, I yield back.
Mr. Rush. I want to thank the gentleman. The Chair now
recognizes the gentleman from California, Mr. Peters, for 5
minutes.
Mr. Peters. Thank you, Mr. Chairman.
And I want to continue with Mr. Friedman, but your name
tags are all messed up, just for the purposes of the TV.
So Mr. McGuire had an interesting idea about triaging the
right kind of technology to focus on. Do you have an objection
to that? Does that make sense to you, the notion that if
something has gone through standards and there has been no
basic research that has informed the technology, that we would
focus on other things? Is that objectionable?
Mr. Friedman. I am an engineer. I am very practicable about
things. So I see no objection to that, but I also see no reason
to add new red tape to get there. The DOE staff is perfectly
capable of looking at the data, seeing whether or not there is
a significant opportunity, and moving forward with other
opportunities. Adding more red tape doesn't actually speed that
up. It slows it down. So again, I would go back to there are
really talented folks there. Let them do their work.
Mr. Peters. Right I guess the question, the point he was
raising is that there may be more return on applying their work
in particular areas rather than others. And that is something
that should be left to them, you think?
Mr. Peters. Well, absolutely. I mean, obviously, technology
allows much more return to keep happening than we might expect
today. And it is DOE's staff's job to keep up-to-date on that,
and they can already, under the current process, make decisions
like that to focus on areas that can deliver the most savings.
With others, if they can't, they just say they are not ready to
be updated.
Mr. Peters. Let me ask Mr. McGuire, what is it that keeps
them from making that decision on their own?
Mr. McGuire. I think the statute and resources prevent them
from doing a realistic----
Mr. Peters. What about the statute prevents that, though?
Mr. McGuire. Because of the look-back requirements out of
synch between standards and test procedures balanced against
this test of savings of energy and economic justification. So
no real prioritization has really occurred. Every look-back,
except for I think one, has resulted in a full-blown rulemaking
to go forward. The only time in our products that didn't happen
was, after the new standard was proposed, we demonstrated that
it would harm performance of the product. And then, DOE pulled
it back. So the process worked.
Mr. Peters. So I think it is a reasonable point to raise as
we do some reform here.
Ms. Kennedy, I wanted to ask you, do you perceive the
issues that you have with the regime as mostly in the nature of
oversight of how things are administered or do you think that
there are statutory changes that are needed in the field to
make sure that we are supporting climate change to the greatest
extent or supporting climate action to the greatest extent
possible?
Ms. Kennedy. Well, certainly, there is a need for
comprehensive U.S. climate legislation to address both clean
energy and the climate crisis. Within the four corners of EPCA,
this statute, I think that this subcommittee should look
closely at opportunities to expand the program, as should the
Department of Energy. The Department of Energy has the ability
to expand the scope of the program in various ways. Of course,
Congress, over the years, has added new products to the
statute, such as lighting, and has, thus, brought to the fore
really incredible energy efficiency change.
Mr. Peters. And I think lighting has been a tremendous
success. I want to know if you are aware of other things out
there that we should be considering as a legislative body
today.
Ms. Kennedy. I think looking at the issue of consumer
electronics is very important. And I would also counsel you
that the products already covered by the statute can still
produce significant energy efficiency improvements. So this
idea in the process rule that we should set an arbitrary
standard for energy efficiency savings of .5 quads is really
misguided. We need all the energy efficiency savings we can
get. The statute makes sure that every standard is economically
justified, whether the savings are immense or slightly less so.
Mr. Peters. Just really what I am trying to do is make sure
that I understand what legislative action is required because I
can't tell the administration how to administer this. So if we
give them authority to do great things, and they decide they
don't want to do that, that is their call. But what I need to
know, and I ask for all of you going forward, is, if you would
like to see reforms--and, Mr. Yurek, I think you are Mr. Yurek?
[Laughter.]
Mr. Yurek, you had some ideas specifically. I would like to
know specifically what you would like to see in terms of
reform, so we can get about doing the job that we need to do.
I also take up Mr. Upton's suggestion that we talk about
consumer electronics because that is probably something that
the legislature hasn't looked at.
But, again, not to be parochial, but I need to know what we
want to put into legislation. And so to the extent you can help
us with that, we will look forward to working with you all.
And, Mr. Chairman, I yield back.
Ms. Kennedy. Just looking at the example of California, if
I may, should provide lots of ideas for Congress to----
Mr. Peters. Of course you are right.
[Laughter.]
My time has expired.
Mr. Rush. The gentleman's time has expired. The Chair now
recognizes Mr. Latta for 5 minutes.
Mr. Latta. Well, thank you again, Mr. Chairman, for holding
today's hearing.
And to our panel of witnesses, thanks very much for being
with us today.
Mr. McGuire or Mr. Yurek, as you are probably aware, in the
last Congress I worked on, and will continue to work on in this
Congress, bipartisan EPCA reform. In your views, what should
Congress prioritize as we consider modernizing EPCA. Mr.
McGuire, I will start with you.
Mr. McGuire. Thank you, Mr. Latta.
Well, I think, first of all, with regard to the rulemaking
process, addressing the look-back timeframe for standards and
test procedures, and to consider a provision where they at
least could be coordinated better. But, secondly, for those
products that have been through several standards, generations
of standards, such as home appliances, they would essentially
go to the bottom of the list in terms of DOE prioritizing work
looking for significant energy savings.
And I think this quick assessment that DOE proposed is a
good concept to think about, so that there is a bright-line
threshold for significant energy savings. If that can't be
found, and it is overwhelming that it can't be found, why spend
three years on a rulemaking trying to determine if it is
economically justified?
Mr. Latta. Mr. Yurek?
Mr. Yurek. I would agree with the position taken by Mr.
McGuire, but I think it is really looking at this and saying,
what was done before 2007 was DOE prioritized the rules that
need to be done and concentrated on those where they saw the
greatest energy savings. The amendment of EPACT 2007, then, all
of a sudden, put these mandatory six-year reviews for
standards, seven years for test procedures into the act for all
products. And for all products, it doesn't make sense.
So I think it is looking at how can you give DOE the
authority to look at this, prioritize what needs to be done,
focus on the products where we are going to have the energy
savings and can get those right away versus wasting all this
time doing all these evaluations. Yes, the clothes washer
procedure worked that time, but that took how many years?
Three-four years of DOE staff time analysis and other things,
the industry's time, for something where there was no energy
savings. Instead, look at it, figure out how we can prioritize
it, and focus on where the biggest energy savings are.
Mr. Latta. Thank you.
Mr. McGuire, you mentioned in your written testimony the
example of DOE's proposed standard for dishwashers and how the
standard was such that some dishwashers could no longer get the
job done. And this is a good example of something that I want
to make sure that DOE is taking into consideration. How does
DOE ensure that a proposed standard won't negatively impact
product performance? Because we have heard from other Members
up here about you don't want to end up having to do the thing,
whatever you are doing with that appliance, twice or three
times because you are wasting more energy.
Mr. McGuire. Right. Well, I think Mr. Simmons described the
dilemma the Department has in making sure that the performance
of the product isn't jeopardized. And that, in part, has led to
difficulty meeting the statutory deadlines.
In the case of dishwashers, DOE had proposed the most
stringent of three options in terms of reducing energy and
water use. And our industry during the proceedings said we
think that most stringent level is not going to work for the
product, and the process didn't allow enough time for our
industry to test products for performance. And DOE proposed
this most stringent level. We, then, did the testing, and it
was clear that products from multiple manufacturers could not
clean the dishes.
So there is something wrong with a process that goes--they
missed that on the performance. You could say, well, we caught
it in our comments, but that could have been done before DOE
reached----
Mr. Latta. If I can interrupt, OK, so when that occurred,
what did DOE tell you? You are saying that we are having
problems, but they say just keeping going anyway?
Mr. McGuire. Well, they said their consultant said it is
fine, that it won't be a performance problem. That is why we
undertook the testing in the laboratories that are used for
compliance for DOE, ENERGY STAR, and standards, and proved
without a doubt that multiple loads of dishes could not be
cleaned with about one gallon of water in a cycle. That is what
they had reduced it to, 1.1 gallons. We showed them that, and
they said, ``You're right.'' And then, they pulled it back and
said no standard is justified.
And by the way, the standard that they had proposed had a
payback to the consumer of 20 years. The life cycle of a
product, of a dishwasher, is 13 years. How does that make
sense?
Mr. Latta. Well, thank you very much.
And, Mr. Chairman, my time has expired, and I yield back.
Mr. Rush. I want to thank the gentleman. The Chair now
recognizes Mr. Pallone, full committee chairman, for 5 minutes.
Mr. Pallone. Thank you, Mr. Chairman.
Assistant Secretary Simmons stated on the first panel that
the proposed process rule is to, quote, ``reduce the burden of
the process to create tests and implement new energy efficiency
standards''. But, after reviewing the proposed process rule, it
appears to me that steps are added to the process, with the
appearance of lengthening the process. While the proposed
process rule is thin on some details, I count about 17 steps to
make and implement a new standard. And I find it hard to
believe it will be more efficient.
So I wanted to ask Mr. deLaski, can you walk the committee
through the standard-making process under the proposed process
rule? And compared to the current rulemaking process, how much
longer do you estimate that each rulemaking will take under
this proposed process?
Mr. deLaski. I am not sure I could walk you through it. I
have a colleague who has mapped it out for us.
Mr. Pallone. OK, that is good enough.
Mr. deLaski. It is complicated.
Mr. Pallone. Explain it, though, because I won't follow
that.
Mr. deLaski. There is a lot of steps on this. The current
process, under ideal circumstances, the current process takes
about three years. This has added multiple additional steps.
And as has been referenced earlier, some of these earlier steps
now become a final step that would be a possibility for
litigation.
So if the current process takes three years--at best, I
would submit to you that, typically, it takes longer, as we
have heard sometimes today--based on my experience working with
the program over the past 20 years, I would expect that this is
likely a recipe to at least double the duration of the process,
if not just shut it down altogether, because of the litigation
that you are creating possibilities for.
Mr. Pallone. That sounds like great streamlining.
Mr. Chairman, do we have that sheet that Mr. deLaski--can
we enter that into the record?
Mr. deLaski. I would be glad to submit it for the record.
This is our first draft, and we will be working to finalize it.
Mr. Pallone. You will send us something?
Mr. deLaski. Yes.
Mr. Pallone. OK.
Well, in my opinion, these 17 steps in the rulemaking
process, including the six public comment periods, are going to
add years of delay, you said twice, and in some cases may block
a standard from being implemented at all, which is what you
said. Again, I am all for transparency, but this seems to me
like delay masquerading as transparency, in all honesty.
Now, in Assistant Secretary Simmons' testimony, he stated
that DOE has issued seven final rules since President Trump
took office. I was going to ask Ms. Kennedy, can you comment on
this number? Does this represent work completed during the
Trump administration or was some of this work completed by the
Obama Department of Energy?
Ms. Kennedy. It does not represent work undertaken by this
administration. I will check on this and get back to you, but I
believe that five of those standards which the Assistant
Secretary referred to were issued under the Obama
administration and two were congressional standards which
really needed to be posted. But I will check on that and get
back to you.
Mr. Simmons acknowledged that there are 16 overdue
standards that this administration hasn't issued and also,
referred to the four Obama era efficiency standards which made
it all the way through under that administration but have not
been published in The Federal Register since 2016.
Mr. Pallone. All right. Thank you.
Mr. deLaski, I would like you, if you have anything to add
to Ms. Kennedy's comments on that. But, then, I also wanted to
ask you, I understand that appliance standards are saving
people a lot of money and helping cut climate change emissions,
but you also mentioned in your statement that they can help
with resiliency, reliability, and affordability. So if you want
to add to what Ms. Kennedy said, and then, if you could explain
a bit more about what you said on resiliency, reliability and
affordability?
Mr. deLaski. Yes, I would be glad to do so. And just to
follow up on Ms. Kennedy's comments, none of those seven
standards represent substantive work by the current Department
of Energy administration. They have not issued a single
proposal for a new standard or a single proposal for a final
standard that is the result of work under this administration.
Mr. Pallone. All right. Thanks.
Mr. deLaski. With respect to your second question,
resiliency, it is often an overlooked benefit that we get from
improving efficiency of all of our products. On the sweltering
summer day when the electricity grid is struggling to keep up
with the demand of people's air conditioners, it matters
enormously how energy efficient those air conditioners are. By
keeping down the demand levels--the electric grid has to match
up. Demand and supply have to match up. And as the demand goes
through the roof, if supply doesn't keep up, it leads to
outages.
The same thing on the heating side. When the polar vortex
hits, the furnaces, the efficiency of furnaces in our homes
affects the ability of the natural gas supply system to keep
up. If the system can't keep up, if the pressure can't be kept
up, then people suffer. So by keeping efficiency in place, we
are building resiliency into the electric supply and the gas
supply system that, ultimately, helps consumers to stay warm or
to stay cool and to be safe.
Mr. Pallone. All right. Thanks a lot.
And thank you, Mr. Chairman.
Mr. Rush. I want to thank Mr, Pallone. The Chair now
recognizes Mr. Griffith for 5 minutes.
Mr. Griffith. So here is the dilemma we have. I think we
all want things to be more energy efficient, but we want
products, when we go to buy them, to actually do what they are
supposed to do and what they are purported to do, and not have
to spend three times or double the cost to get our dishwasher
working, to get our clothes washer working, to have our
refrigerators working. I mean, that is the dilemma, and it is
good that we are having this hearing, Mr. Chairman, so that we
can try to sort these things out.
But I did find it of interest, I had this thing that my
constituent sent me, and it is a little old, about the washing
machines that I mentioned in the previous hearing and have
mentioned a couple of times over the years, because I had a
constituent that was all fired-up about it. And I noticed in
there that--and it is a little old, so I understand that;
things may have gotten better. But, in 2007, according to this
piece out of The Wall Street Journal, after the more stringent
rules kicked in, Consumer Reports noted that some top-loaders--
washing machines we are talking about--were leaving its test
swatches nearly as dirty as they were before washing. For the
first time in years, Consumer Reports said, ``We can't call any
washer a Best Buy.''
``In 2007''--again, I am acknowledging it is a little old,
so I am not saying it is something we should take to heart
today, but it shows the point that consumers are having the
problem with--``in 2007, only one conventional top-loader was
rated `very good.' Front-loaders did better, as did a new type
of high-efficiency top-loader that lacks a central agitator.
But, even though these newer types of washers cost about twice
as much as conventional top-loaders, overall, they didn't clean
as well as the 1996 models.''
My dishwasher is newer now than it was three years ago. Got
a new dishwasher. I find, as you, Mr. McGuire, pointed out, and
even though that reg didn't come in, I am doing a whole lot
more washing of the dishes before I stick them in the
dishwasher. And I actually mentioned to my wife, maybe we
should just not have one if they are not going to clean the
dishes. And she said, yes, but the temperature gets hotter in
the dishwasher and that helps to sanitize them. But when I am
at home, I am washing those dishes and I am cleaning everything
off of them because I don't trust the dishwasher. I am not
going to pull that dish out of the dishwasher and serve it to
somebody with specks of stuff on it.
Mr. McGuire, isn't that the problem that you have been
trying to highlight? Even though my dishwasher may not be the
cause of the latest regs, but isn't that what consumers are
finding out there?
Mr. McGuire. It is a very important feature of the
balancing test that Congress enacted into EPCA and DOE has to
deal with. Significant energy savings, economic payback, and
don't wreck the product. It has got to deliver performance.
And our industry is in everyone's home every day. Our
products have to be trusted. And so in the case of the
dishwasher I had mentioned, fortunately, that was pulled back
by DOE. But, in some of these home appliances, like clothes
washers or cooking products, there are diminishing returns that
make the payback questionable.
We are not here arguing about whether there should be
efficiency standards. We all agree on that. We are talking
about how you do it and how you prioritize with limited
resources.
So we believe that today's dishwashers that meet today's
standards perform very well. And I am sorry to hear about your
neighbor's clothes washer.
Mr. Griffith. Yes, and I don't think my dishwasher that I
have now works as well as the one that was 15 or 20 years old
before. But that is just anecdotal.
Mr. McGuire. It should. It just uses less water, but it
should operate just as well.
Mr. Griffith. Yes. And then, you wanted to talk about----
Mr. Friedman. As the representative of the Consumer
Reports, could I just respond to that really quickly?
Mr. Griffith. Well, sure. Do you have an update for me? Can
you send me that data? Just send it to me because my time is
running out.
Mr. Friedman. I am happy to send it to you.
We put out a letter to the editor of The Wall Street
Journal because they misrepresented our data.
Mr. Griffith. OK.
Mr. Friedman. So that is an inaccurate reference.
Mr. Griffith. All right. Well, that is fair. And I
appreciate you letting me know that because I want accurate
data.
Mr. Friedman. I am happy to help.
Mr. Griffith. The problem is the consumer is feeling like
they are getting less. They are spending more money on the
product that they bought before, a lot more money, and they are
not getting the product that they thought they were getting.
And they feel like they are not getting as much. I think we
have to make sure we have that balance out there.
Refrigerators, you wanted to talk about that a little bit,
Mr. McGuire? You had talked about the efficiency on
refrigerators for not a whole lot of money or for a whole lot
of money more, $5 or $6 savings?
Mr. McGuire. Well, yes, today's refrigerator standard that
is in effect, and the ENERGY STAR level above it, which is
voluntary, but that ENERGY STAR level is a more efficient
product. And it is only saving the consumer about $5 a year in
electricity payment. So it just shows you that some of these
incremental changes for products that have been regulated three
and four times are going to be harder to justify.
Mr. Griffith. Right. I appreciate that.
My time is up, and I yield back.
Mr. Rush. The Chair now recognizes Mr. McEachin for 5
minutes.
Mr. McEachin. Thank you, Mr. Chairman.
And to all of our witnesses, I would also say thank you for
being here today.
I want to just echo what I said earlier. Achieving greater
energy efficiencies is incredibly important to the health of
our planet and our communities. And pursuing these efficiencies
will also put money back in the pockets of our constituents,
including struggling families for whom every dollar, every
extra dollar makes a difference. So I think our topic today is
incredibly important, and I am very glad that we are having
this hearing.
Ms. Kennedy, I would like to echo the same question I asked
Mr. Simmons earlier. Your testimony describes climate change as
an existential threat, and you identify energy efficiency
standards as a crucial tool in the struggle to minimize that
change. So if energy efficiency standards are one tool in the
climate toolkit, are we using that tool as effectively as
current law permits? Does DOE decision making on these
standards fully reflect the true long-term climate costs of
greater energy use? And if not, what would you like to see
improved?
Ms. Kennedy. Thank you for that great question.
The consequences of the Department of Energy's delays on
energy efficiency standards are really moving us backward on
climate change. So just to put some specifics there, DOE's
failure to issue the 16 overdue energy efficiency standards
that we have discussed puts at risk 70 million metric tons of
carbon savings each year. That is more than the annual carbon
emissions from energy use in all homes in New York City, Los
Angeles, Houston, Chicago, and Philadelphia combined. So we are
talking about some major backward progress on climate through
DOE's inaction.
We see the same thing through the lighting efficiency
standards. The lighting provisions which were added in 2007 by
Congress, and signed into law by President Bush, will have huge
carbon savings. And by gutting the definition of light bulbs,
as DOE is proposing to do, in effect, DOE is taking almost all
of the energy efficiency savings out of that standard, a change
that will cost consumers up to $12 billion on their utility
bills and cause the use of up to 25 more power plants' worth of
electricity each year.
So this program, when it is in place and being robustly
implemented, is a big climate pollution saver and a big
pollution saver overall. But, right now, Americans aren't
seeing those benefits from the efficiency standards program. We
would like to see DOE get back on track with its legal
responsibilities to issue these standards. We would like to see
DOE abandon its efforts to really gut the lighting efficiency
standards, which Congress put into place.
And while we are happy to talk about improvements to the
process on issuing efficiency standards, the process rule we
are concerned is going to set us back, lose valuable time, as
Mr. deLaski has outlined, and again, is really putting us in
reverse, when we need to be all in on energy efficiency as a
way of fighting climate and reducing American energy bills.
Mr. McEachin. Thank you, ma'am.
Mr. Harak, can you speak to how delays at DOE or laxity in
terms of where standards are set adversely affect low-income
families? Can we put a dollar figure on the savings that these
families have missed out on as a result of the current
administration's regulatory choices?
Mr. Harak. I don't think I can put precise dollar figures
on it, although I can give you an estimate. So furnaces, in
particular, as I mentioned, are one of the biggest bills for
people in States that have some level of serious heating load.
And an efficient furnace could cut your bill, particularly if
you are replacing an old, inefficient furnace--that is, when
you bought it, it had a certain rating; well, it has degraded
since then--it could cut the bill 25 percent. I know with the
low-income network that I work with and that actually installs
these furnaces in low-income homes, you could easily be cutting
that person's heating bill by 25 percent. And for a low-income
person living in an inefficient house with an inefficient
furnace, that is hundreds of dollars a year that are being lost
out.
So as I mentioned in my initial testimony and in response
to Mr. Pallone's questions, we are at the National Consumer Law
Center particularly interested in stronger furnace standards
because it is incredibly important for low-income people. And
any delay in that--the last time the rule was significantly
revised is more than 25 years ago now. There was some modest
change in the 1990s. So delay really hurts low-income people
and a very impact on their energy bills and their health and
comfort, when you are talking about furnaces.
Mr. McEachin. Thank you.
And thank you, Mr. Chairman. I yield back.
Mr. Rush. I want to thank the gentleman. The Chair now
recognizes Mr. Veasey for 5 minutes for the purposing of
questioning the witnesses.
Mr. Veasey. Thank you, Mr. Chairman.
Mr. Harak, I wanted you to talk a little bit more about
renters. As you know, we have had a tremendous shift in our
society. I will tell you, like personally, the neighborhood
that my mother grew up in, the Lake Como community, because of
segregation during that time period, there were people of all
economic backgrounds that lived in that community, doctors,
lawyers, but also people that worked in people's homes and
drove buses, and did a lot of different jobs. Most of those
families had two household incomes. They had two incomes inside
of that house and they were homeowners.
As you know, now many low-income people in this country can
no longer afford to buy a home. They are no longer homeowners.
And many of them no longer have the luxury of two incomes in a
household, and they find themselves more and more having to
rent.
I wanted to ask you, what would be the stress put on low-
income households if landlords don't--if we don't update this
policy, making landlords updating their appliances, and things
like that? And what impact can that have on the bottom line of
low-income household families?
Mr. Harak. Do you mind if I just ask where your district
is? I have lived in Texas. So I am curious.
Mr. Veasey. In Fort Worth, Texas. Mom grew up in a little
community in Fort Worth, Texas, called the Lake Como community.
Mr. Harak. I have lived in Fort Worth. So I was curious.
So let me say that, when the Department was considering
central air conditioning standards, I made sure to speak to
people at Texas ROSE, Ratepayers' Organization to Save Energy,
in Texas, to get a sense of how do low-income people come into
homes where there are these appliances. Well, one, they are
renters. And as I mentioned in my testimony, renters will lose
out if we don't have good standards because the owner is going
to buy that appliance, and the owner is often going to go get
the lower-cost appliance. It makes perfect economic sense.
But, then, I also spoke to folks. Well, how do people wind
up in homes even as homeowners, let's say, with central air
conditioning? Well, they are usually buying an older home. And
so someone else probably installed that appliance. So that a
low-income person buying a modest home in Fort Worth is
probably not going to install new central air conditioning. And
so we need the standards because the homes that are now on the
kind of secondary market, that appliance was installed by
someone else. We want to have good standards because low-income
are buying that home after the central systems have already
been in the home. So I think both low-income renters, but even
low-income homeowners benefit from strong standards around
these appliances that are the major portion of their bills.
I hope I answered your question.
Mr. Veasey. Absolutely. No, that was actually very helpful.
I wanted to ask you, Mr. Friedman, would you agree that the
DOE has a clear set of tools in its toolbox to help low-income
renters?
Mr. Friedman. I do think DOE has many tools to help low-
income residents. But, let's be honest, with more resources, I
think DOE could do more. The Weatherization program has an
amazing history of helping folks and during ARRA, was able to
really ramp-up and help even more. But, at this point, the
funding is much lower than it was during the Recovery Act. So
that is certainly one place where I think, with more resources,
DOE could do more.
I would also just add that ensuring that every dollar spent
at DOE that is supposed to be focused on efficiency and getting
appliance standards out is going to help everyone, and
especially low-income homeowners who spend, as a share of their
income, three times as much on heating, electricity, water, et
cetera, than your average American. So low-income Americans
tend to stand to gain even more than most Americans from these
standards.
Mr. Veasey. Thank you very much.
Mr. Harak, do you have any----
Mr. Harak. I do think Mr. Friedman raises an incredibly
important point. I am meeting with my Congresswoman, Katherine
Clark, I hope in about 30 minutes to talk to her about the need
for increased funding for the Weatherization Assistance
Program.
If you want to talk about a program that makes a gigantic
difference in the lives of low-income people, it is the
Weatherization Assistance Program. As I mentioned in response
to your first question, when the network I work with in
Massachusetts goes to a low-income home, the low site savings
are 20 percent in their energy bills. And if that house was
really poorly insulated and had an old heating system,
sometimes we are saving 40 percent in the household we are
touching. So it is very important we get to more of those
households, and that means we need a lot more money in the
Weatherization Assistance Programs, which is, of course, part
of DOE.
I appreciate the question.
Mr. Veasey. Absolutely. Thank you.
Mr. Chairman, I yield back.
Mr. Rush. I want to thank the gentleman. The Chair now
recognizes Mr. O'Halleran from Arizona for 5 minutes for the
purposes of questioning the witnesses.
Mr. O'Halleran. Thank you, Mr. Chairman.
I would like to commend each of the witnesses in our second
panel today for contributing thoughtful insight into this
important conversation about energy efficiency standards. I
believe we can all agree that meaningful efficiency standards
are important not only for the marketplace, but for consumers
and the environment as well.
Mr. deLaski, in your testimony you cite a recent economic
study which estimates that savings from energy efficiency
standards resulted in 300,000 more jobs in the United States
economy in 2016 than would have been the case, absent any
standards. In your view, how might a delay in issuing
efficiency standards impact the availability of these related
jobs, especially in rural communities?
Mr. deLaski. So the delay in the standards and updating
standards is reducing the savings that consumers will get in
the future. What was described in that economic study is the
secondary effect, that if people save money on their bills,
they are spending less money on gas and electricity and water
and sewer bills, and that puts money back in their pocket that
they spend on other goods and services. So the delays mean that
there are $60-some billion in savings that are going to be
delayed, which means people have less money in their pocket to
put on other goods and services that helps to create jobs in
local communities. So that is the cost.
Mr. O'Halleran. Mr. Friedman, in your testimony you
highlight your concerns with the Department's proposed changes
of their process rule. In your view, do you see any harms
caused to the marketplace by the Department setting a new
definition for efficiency?
Mr. Friedman. Well, certainly, the thresholds that they
have created, I see significant harm in terms of devices that
people refer to as vampire loads, all those electronics that
now we literally rely on throughout our daily lives. If the
process rule and that threshold blocks the ability of the
agency to set those standards, it is going to set us all back.
And right now, that equipment is about 40 percent of energy
use. That is only going to grow, both as other appliances get
more efficient and as we get more and more cool stuff.
Mr. O'Halleran. Thank you.
Ms. Kennedy, I used to be a project manager and working on
fairly complex projects on technology and buildings and
development of designs of buildings in order to incorporate
technology into them. I am at a loss, and maybe you can help me
because you seem to be very concerned with the timeliness of
things getting done here. I am at a loss to understand how it
takes so long within this Department--and quite frankly, I have
worked with the FCC and the CFTC, and some others--to get
things done in an efficient way, in a timely way, to make sure
that we take advantage of changes in technology and other
areas, and make sure that we, as a Government, are efficient,
also, in moving projects forward and getting things done on
time. Can you help me at all?
Ms. Kennedy. I was struck by the fact that Assistant
Secretary Simmons didn't point to any reason for the delays in
the 16 overdue efficiency standards. He said that the
Department had sufficient resources. He didn't point to any
particular problem. And so that tells me that there is a
problem, that there is a problem of will, and that we need to
get that program back on track. There is nothing in regulation
or statute that is causing those delays. It is something within
the Department of Energy under this administration.
And we have seen this program work well over various
different administrations over the years of both political
parties. So there is some issue around political will, possibly
around ideology, which is holding things back. And that is
really concerning for consumers, for the environment, for jobs,
and our ability to fight back on climate change.
Mr. O'Halleran. I do know the developers that I have worked
for in the past would be very upset on cost overruns and not
getting jobs in and done on time.
So thank you, Mr. Chair. I yield.
Mr. Rush. I want to thank the gentleman. The Chair now
recognizes the gentleman from New York, Mr. Tonko, for 5
minutes.
Mr. Tonko. Thank you, Chairman Rush.
I believe efficiency must be our first fuel of choice.
According to the International Energy Agency's Energy
Efficiency 2018 Report, energy efficiency alone can account for
more than 40 percent of the emissions reductions needed to meet
global targets set forth in the Paris agreement.
So Ms. Kennedy, what have you and NRDC found? How important
is efficiency for achieving climate targets?
Ms. Kennedy. Energy efficiency is absolutely crucial and
fundamental to achieving our U.S. climate targets, or what
should be our U.S. climate targets. Without energy efficiency,
we can't get the job done. We need to also invest in
renewables, electrify transportation and buildings, but energy
efficiency is absolutely fundamental to fighting climate change
and to doing it in an affordable way.
NRDC issued a report last year called ``America's Clean
Energy Frontier: The Pathway to a Safer Climate Future''. And
energy efficiency is going to deliver the largest amount of
carbon savings that the U.S. can muster. So it is really
important.
Mr. Tonko. Thank you.
And would you say DOE's standards program plays a big role
in our overall efficiency agenda?
Ms. Kennedy. It plays a very crucial role, yes.
Mr. Tonko. And can you give us a sense of how important
improvements in lighting, including the performance gains and
cost reductions in LED technologies, have been to improve
building efficiency?
Ms. Kennedy. The innovation that we have seen in lighting,
the improvement that we have seen in lighting efficiencies,
spurred by Congress' actions and by DOE's actions under the
last administration, have been hugely important.
Mr. Tonko. And, Ms. Kennedy, again, and Mr. deLaski and Mr.
Friedman, I am sure all of you are familiar with the Energy
Independence and Security Act of 2007. Can you explain the
statutory backstop on tier 2 of lighting standards? And as you
do that, can you also respond to the response made to me about
the backstop of the Assistant Secretary and his rationale?
Because I am trying to figure out what triggering the backstop
is all about.
Ms. Kennedy. Yes. The Department of Energy's current
interpretation, which Assistant Secretary Simmons discussed
this morning, is incorrect, in my view, and I have been
addressing these issues for decades, both through litigation
and through rulemaking, and other activities.
EISA directed the Department of Energy to do a rulemaking
by 2017 to examine the scope of light bulbs that would be
included under the new set of standards and also, to examine
whether the standards in the backstop should be stronger. The
Obama administration came up with a rule, through a long
process that involved all sorts of stakeholder engagement, and
acting within the authority which EISA provided it, determined
that the scope of general service lamps should be expanded in
various ways to include a number of additional bulbs.
The Department of Energy is now trying to undo that, and it
faces a very high burden as it does that, because, as you know,
once a Federal agency has gone through a long rulemaking, made
a determination, there is no finding--there is no challenge
striking down that determination, it is very, very hard to undo
it and reach a different result.
The backstop absolutely has been triggered. Congress in
EISA included this backstop provision, so that if the
Department of Energy didn't do its job, that backstop would be
in place, as of January 1st, 2020. So that backstop is there. I
believe it is enforceable. And what the Department of Energy is
doing is creating all sorts of uncertainty for manufacturers
and for consumers.
And I will also just mention, those standards, the backstop
standards, have been in place in California since 2018, and it
has been a smooth transition, no problems, tons of bulbs on the
market that meet those standards.
Mr. Tonko. Thank you.
Mr. deLaski and Mr. Friedman, I have just a little bit of
time left, but if each of you could just speak to the comments
made by the Assistant Secretary about the backstop?
Mr. deLaski. I just will echo what Ms. Kennedy said, which
is that the Assistant Secretary is wrong. The backstop has been
triggered, and the light bulb standards needed to get back next
year. That is what the law requires. And failure to do so is an
abdication of the Department's legal obligations.
Mr. Tonko. Mr. Friedman?
Mr. Friedman. I could be wrong, but I am pretty sure my
signature is on that rule that came out under the Obama
administration. Our general counsel was very clear on the law.
The Secretary supported the general counsel, and we issued a
change in the definition. So I think the law is pretty clear,
and I think, sadly, this may end up being the courts that have
to reinforce what Congress said. Again, statute is not
arbitrary. Statute is not optional. It needs to be followed.
Mr. Tonko. And resolving it in the courts will only provide
for more uncertainty.
So I thank you all for your responses.
And with that, Mr. Chair, I yield back.
Mr. Rush. The gentleman yields back. The Chair now
recognizes the gentleman from Vermont, Mr. Welch, for 5
minutes.
Mr. Welch. Thank you very much.
I thank the panel.
Mr. deLaski, Vermont enacted a couple of State-level
standards, appliance standards, in the past two years, one for
light bulbs and another that covers 18 products. Can you
explain the relative role of States and the Federal Government
in appliance standards?
Mr. deLaski. Yes, I would be happy to. One of the
fundamental elements of the Federal law that we haven't talked
a lot about today is the Federal standards are generally
preemptive. Once the Federal standards are in place, States are
preempted from acting.
But one of the fundamental elements of the Federal
legislation is that, in preempting the States, the Congress put
on DOE the obligation to keep standards up-to-date, to do the
reviews we have been talking about. That is the deal.
Mr. Welch. Right.
Mr. deLaski. So when that is not happening, you are seeing
more States, leaders like Vermont, and there are another 13
States that are considering similar legislation currently,
following in Vermont's leadership, leading footsteps. You are
seeing more States step in. Now they can't address things that
are preempted, but they are looking at other products.
Mr. Welch. Right.
Mr. deLaski. And they are also adopting the light bulb
standards because they are concerned.
Mr. Welch. Yes, let me go on that. So one of the laws that
we did pass in Vermont was designed to protect against the
Federal rollback of the light bulb standards, and it,
essentially, copied the Federal light bulb standard in a State
law. And now, the DOE has announced that they intend to rescind
the broadened scope of the light bulb standards. What does that
mean to States like Vermont and others that have essentially
copied the Federal standard?
Mr. deLaski. So Vermont, like California, will now be in a
position to enforce standards, instead of the Federal
Government. So what we are going to see is a State-by-State
approach, in addition to insisting that the Federal standard
also is in place. So the uncertainty that was referenced
earlier, it is being multiplied over and over again.
Mr. Welch. All right. Thank you.
Mr. deLaski. Instead of having a situation where we knew
what was going to happen--Congress set the bar 13 years ago--
now we have uncertainty that is creating lots of problems.
Mr. Welch. Right. Thank you.
Mr. Yurek, how does the uncertainty that was just
mentioned, introduced by the DOE failure to meet their
deadlines, affect your member companies? And you mentioned in
your testimony that the feast-or-famine is not a helpful way
for DOE to run the program. Can you explain what you mean by
that?
By the way, my whole understanding is that a lot of the
manufacturers in the private sector, they can live with
standards. They just want to know what they are, and then, the
competition is about who can do the best product compliant with
those standards.
Mr. Yurek. That is very correct, Congressman. My members
don't manufacture light bulbs. So I am not going to go down
that path. But we do cherish and want certainty and
predictability, and we need that to plan and make the
investments in our products, in our production lines, in the
distribution of those products. And so when there is a
schedule, we want that schedule to be met, so that we can meet
those. But we also want good rules that make sense.
And it also goes to the different consumers that were
talked about earlier and their ability to afford. And we want
to make sure that they are economically justified, so all
consumers, be they low-income as well as those that can afford
the higher costs, can afford to get the equipment to get the
comfort that they need. So it is balancing that and using the
full timeframe for developing the rule versus short-circuiting
it, and then, coming up with rules that might not be the best.
Mr. Welch. OK. Ms. Kennedy, actually, following up on that
question, one of the debates we have here--it was on the
earlier panel where my friend from Virginia raised questions
about the affordability of standards. That, by the way, is a
concern I have. And we are always wrestling with whether the
standard overdoes it by making a product more expensive than
you can afford, and then, you lose the savings because the
product isn't going to be deployed.
So one of the challenges I have is there will always be a
difference of opinion about where is the right place to land,
but we probably agree, Morgan, that using less energy is better
than using more. Is there some mechanism by which there can be
some flexibility and quick response to negative reaction in the
marketplace because the standard just overreaches a bit?
Ms. Kennedy. Well, there is some flexibility in the
procedures and the statute. Manufacturers have the ability to
petition DOE for an exemption or waiver from a particular
standard when----
Mr. Welch. Could we get a turnaround on that a little
quicker? Because I am actually sympathetic to that. I have a
door and window manufacturer and they were totally committed to
standards, totally committed to efficiency, but they actually
were having a problem with the compliance challenges for a
standard that was set to the point where people weren't going
to be able to afford to buy that product. And if we can get an
answer on that, then we take some of the fight out. Because the
overreaction we have from some folks who are legitimately
concerned about their lower-income consumers is to say, look we
don't want any standards because it is going to price them out.
And Mr. Griffith, I don't want that. I really want
standards.
But do you have some suggestions on how we could get a
quicker turnaround, so there would be some confidence?
Thank you, Mr. Chairman.
Mr. Rush. The Chair wants to thank all the witnesses for
your participation. I know it has been time-consuming, and we
certainly value your time. We certainly appreciate all your
efforts and all your testimony here this morning. We want to
thank you very much.
And the witnesses are dismissed. Right now, thank you once
again.
And the Chair requests unanimous consent to enter into the
record documents that have been previously agreed to by the
ranking member of the subcommittee. And without objection, so
ordered.
[The information appears at the conclusion of the hearing.]
Mr. Rush. I remind Members that, pursuant to committee
rules, they have 10 business days to submit additional
questions for the record to be addressed by the witnesses who
have appeared. I ask each witness to respond promptly to any
such question that you may receive.
At this time, the subcommittee stands adjourned.
[Whereupon, at 1:46 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
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