ENERGY STAR Is a Success. Fund It, Don't Change It!
ENERGY STAR®, the extremely successful, voluntary labeling program for the more energy efficient appliances, equipment, and buildings, will be the subject of a congressional hearing tomorrow centering on a draft proposal to dramatically alter the public-private partnership that’s saving Americans billions of dollars and creating millions of U.S. jobs.
The U.S. House of Representatives Energy and Commerce Committee, Subcommittee on Energy will address the discussion draft of the Energy Star Reform Act of 2017, which among other things would move the program from the Environmental Protection Agency (EPA) to the Department of Energy (DOE) upsetting the highly successful and effective activities.
The familiar blue and white ENERGY STAR label tells consumers they are buying one of the more efficient products on the market. Established under President George H.W. Bush, it promotes products meeting energy efficiency requirements set by the U.S. Environmental Protection Agency (EPA)—usually among the top 25 percent most-efficient appliances and equipment on the market. Manufacturers apply for the right to use the ENERGY STAR label. With more than 18,000 partners—including a wide range of manufacturers, retailers, builders, and utilities—it’s one of the most successful public-private partnerships of all time.
In its “Overview of 2015 Achievements,” EPA reported that the ENERGY STAR program had helped families and businesses save $430 billion on their utility bills while reducing climate change pollution by 2.7 billion metric tons of carbon dioxide since its launch in 1992 (cutting energy consumption means also reducing the amount of fossil fuels that need to be burned to produce it). These are massive numbers, many of which would not have occurred without the foundation laid by the ENERGY STAR labeling program.
Given the popularity and success of the ENERGY STAR program, one may wonder what kinds of “reforms” are needed. We had the same question, and it turns out that there’s not much in this draft bill that will meaningfully improve the program.
What would improve the ENERGY STAR program?
Fully funding it, for one. President Trump’s budget proposed zeroing out the program. But it turns about $50 million annual investment into $30+ billion worth of annual consumer utility bill savings—one heck of a rate of return. The only way to ensure that these savings will continue for years to come is for Congress to act. First, Congress should provide clear direction both in scope and funding to the administration in legislation to carry out the important activities of ENERGY STAR. Second, Congress must hold agencies accountable. It is important that agency officials make themselves available to answer questions about program performance and we should all find it troubling that for tomorrow’s hearing, representatives from both EPA and DOE declined the invitation to represent their work before members of Congress.
NRDC opposes the shift of primary responsibility for the program from the Environmental Protection Agency (EPA) to the Department of Energy (DOE).
The draft bill proposes moving administration of the program to the DOE, but this change is unnecessary. The results speak for themselves: EPA has grown the program to more than 60 product categories. EPA has built institutional skills and experience, that has not only made the program so successful but could be lost in a transition.
DOE does a great job running the process to set mandatory energy efficiency standards for products. Technically speaking, there are a number of products which are part of the ENERGY STAR program but do not have mandatory efficiency standards, including TVs, set-top boxes, computers, and computer servers. The fact that the ENERGY STAR process is quick and nimble adds to the success of ENERGY STAR and advancing energy efficient solutions for customers. Each of the agencies has a key role in ensuring consumers have access to efficient products, and each does its part well.
Further, a memorandum of understanding (MOU) exists between EPA and DOE, which enables the two agencies to work together on the ENERGY STAR program where there is a logical overlap. For example, DOE develops test methods to assess energy consumption, which EPA also uses for the ENERGY STAR program. Issues similar to those outlined in this bill came up in the past, and were resolved straightforwardly through the MOU.
NRDC opposes the proposal to exempt third-party certification requirements for certain manufacturers.
The section in question removes important checks and balances for consumer electronics products within ENERGY STAR. The draft proposal would essentially gut the front-end certification of the ENERGY STAR program for consumer, home office, and electronic products by allowing manufacturers to self-certify their own products rather than requiring independent third-party certification. Right now, all products are required to be tested in an EPA-recognized lab and reviewed by an EPA-recognized certification body before they can use the label. Weakening this requirement opens the program up to possible Volkswagen-style cheating: while many manufacturers are trustworthy and would do the right thing, they could be undercut by those who are looking to bend the rules and take shortcuts. ENERGY STAR is successful in no small part because of the trustworthiness of its brand, which has not always been the case. The inclusion of third-party certification was added in response to the scathing 2010 GAO report on how easy it was to qualify products like the gasoline-powered alarm clock—and this independent verification has worked. Nearly 90 percent of consumers recognize the Energy Star label, and even more importantly, 75 percent of consumers who purchased a product that had earned the label would recommend ENERGY STAR to a friend. Provisions that weaken these protections could quickly erode consumers’ trust and satisfaction.
The requirement for ENERGY STAR to establish product categories for all available sizes and capacities of products is unnecessary.
In general ENERGY STAR already strives to cover as much of the market as possible with its specifications for a particular product, so it’s not clear what problem this requirement is trying to solve. There are cases where it doesn’t make sense to include certain types of products as they are extremely small or large, or have additional special functions that make it hard to include them in the specification. It is important that the program balance flexibility with meeting consumer needs. Adding this burden to an already-underfunded program could hamstring opportunities for important consumer savings.
President Trump says consumers’ energy bills are too high. It’s unfortunate that he doesn’t realize that the ENERGY STAR program—in its current form—is one of the more effective ways to lower them. There’s no need to mess with a good thing.