DOE Proposes Appliance Efficiency Testing Loophole

This proposal has the potential to create real chaos in DOE’s appliance efficiency program, which currently saves consumers an average of $500 a year while simultaneously curbing harmful air pollution.

Update 12/3/21: DOE has released a pre-publication final rule repealing these harmful changes to the test procedure interim waiver process.

Update: DOE has agreed to host a webinar about their proposal on July 11th. The comment deadline has been extended to July 15th. Interested parties may register for the webinar here.

Imagine if everyone got to develop their own method for determining whether they followed the law, like drivers proposing new ways of measuring how fast they’re traveling or taxpayers inventing new methods to calculate what they owe. And imagine the chaos if they not only got to follow those new procedures without an official determination of whether they’re fair and accurate—and for six months afterward even after their proposals were denied. Unfortunately, that’s pretty much what the Department of Energy is trying to do with its latest plan involving the national energy efficiency program for appliances, equipment, and electronics.

At issue is a plan to allow corporations to automatically obtain an “interim waiver” that allows them to write their own tests to determine if their products comply with DOE’s efficiency regulations if DOE doesn’t officially rule on their waiver request within 30 days. Even if DOE ultimately ruled a waiver was unjustified, the agency would automatically promise not to take any action against the corporation for 180 days. In other words, DOE would let them continue to play by their own rules for six more months.

This proposal has the potential to create real chaos in DOE’s appliance efficiency program, which currently saves consumers an average of $500 a year while simultaneously curbing harmful air pollution. NRDC, along with nine other organizations, urged DOE to host a public hearing on this flawed plan.

But DOE denied the request, along with a subsequent one for at least a webinar on the agency’s proposal. DOE has only offered private meetings. However, as our letter notes: “The statute requires DOE to provide for a public meeting whenever it proposes a test procedure change. The proposed rule would effectively change all test procedures by easing the path for waivers, so we believe the enhanced understanding and scrutiny enabled by a public meeting is needed.” Today we submitted a letter to DOE Assistant Secretary Daniel Simmons and the Office of General Counsel asking them to reconsider.

Testing waivers might seem a little wonky, but DOE’s proposal appears to be part of a pattern of attempts to weaken the essential appliance and equipment standards program, not with one masterstroke, but with many actions that DOE apparently hopes are individually small enough to escape public scrutiny. Earlier, for example, DOE proposed to alter its Process Rule for setting standards, a proposal which would add numerous unnecessary roadblocks to the standards-setting process and which would make DOE more deferential to industry test procedures in general.

Approximately 90 percent of the energy consumed in the typical U.S. household is by products that are part of the standards program. By DOE’s own estimate, the program has avoided over 3 billion tons of carbon dioxide pollution and is on track to reduce our nation’s energy bills by $2 trillion. DOE shouldn’t be proposing changes that will hamper that success.

What are test waivers?

Test waivers, properly implemented, are an important part of the appliance efficiency program. There are occasions when an existing test procedure can’t accurately evaluate the efficiency of a specific product, such as when it uses a novel technology or is designed in a way the test didn’t anticipate. Currently, a company can petition DOE for a test procedure waiver—essentially a request to evaluate the product using an alternative test method. But now DOE is proposing to allow manufacturers to use their own tests even before DOE has reviewed them to make sure they’re fair and accurate.

Why do tests matter?

For decades DOE has successfully administered a program that sets minimum levels of energy efficiency for a variety of products, including air conditioners, water heaters, light bulbs, and refrigerators. The program spurs innovation, saves consumers money (all efficiency standards are required by law to be cost-effective), and reduces air pollution by decreasing the need to generate electricity. In short, it ensures that the country continues to have efficient, money-saving appliances, equipment, and electronics.

However, to make sure a product is producing the efficiency required by a standard, you need a regulated, agreed-upon test. For some things, like light bulbs, the test is straightforward. For others, especially those with a variety of settings, the tests can be quite complex. For example, air conditioners are evaluated in a test chamber with simulated indoor and outdoor sections, specific indoor and outdoor temperatures, a certain humidity level, and many other particularities. Designing these tests properly is difficult but essential.

It’s also critical that manufacturers play by the same rules. Otherwise, any manufacturer could write its own test that, lo and behold, shows a product is a miracle of efficiency. If that happened, it would be virtually impossible to compare one product to another and extremely difficult to determine if it complies with the national standard—essentially, the entire standards program falls apart.

This proposal would wreak havoc

Under the current “test procedure waiver” process, petitioners must specify which products the waiver would apply to and also must propose an alternative test procedure. If DOE thinks the petition will ultimately be approved, it might grant an “interim waiver.” That basically means DOE thinks the request seems legitimate and doesn’t seem to be introducing a loophole. It allows a manufacturer to use an alternate test procedure pending a full review of the request.  

But DOE is now proposing that if DOE doesn’t respond to an interim waiver request within 30 business days, the request would be automatically approved. Even a DOE committed to running the appliance program well would struggle to respond so soon. And during the period between the interim waiver and an official decision, a manufacturer could then rate its products using its own test designed to inflate the efficiency score and flood the market with cheaper, inefficient products.

Even if the waiver were ultimately officially denied, DOE would let manufacturers get away with selling non-compliant products for a half-year afterward.

If a manufacturer genuinely needs a waiver to test a product, it should get one. But this process takes time—DOE can’t just switch on the autopilot and call it a day.

For all of these reasons, we believe DOE’s proposal would weaken an incredibly important program. We hope the agency will do the right thing and allow a public meeting on the plan—and then redesign its proposal.