Enforcement of Efficiency Standards Is Crucial, and At Risk
Imagine that manufacturers, the federal government, and other people who care about energy efficiency spend years negotiating a national standard to make sure that a product meets at least a minimum level of energy savings, rather than being an all-out energy hog. And then imagine that an unscrupulous manufacturer falsely claims that the equipment or appliance it produces uses less energy than it actually does—which consumers can’t tell from looking at it—but the federal government can’t enforce the efficiency standard. This would result in much higher energy bills for America’s families and businesses.
That’s what could happen under the recent federal budget proposal proposed by the Trump administration for the energy efficiency programs administered by the U.S. Department of Energy (DOE). And it could be detrimental for all Americans, as we detail in NRDC’s new fact sheet published today.
Overall, the administration’s proposed budget cuts energy efficiency programs by a whopping 79 percent compared to the fiscal year 2017 budget passed just weeks ago. This would be devastating for cities and states who rely on federal funding to support important initiatives like low-income weatherization programs that help the most vulnerable residents save money on their utility bills, research programs that promote American innovation in the high-tech energy sector, and other programs that help us keep our energy costs under control—including the enforcement program.
The DOE sets minimum energy efficiency standards for appliances and equipment. These standards save businesses and residential consumers billions on their utility bills—$63 billion in 2015 alone—with a typical household saving about $500 per year. The products regulated by the agency represent about 90 percent of home energy use, 60 percent of commercial building energy use, and 30 percent of industrial energy use. Everything from refrigerators to dishwashers to commercial heating and cooling equipment must meet a standard that specifies maximum energy consumption.
Again, the DOE also plays a major role in enforcing those standards, which is critical to protecting both consumers and the manufacturers that make investments in engineering and technology to comply with them.
Consumers cannot tell from looking at a product whether it is an energy hog. They count on federal efficiency standards to require a minimum level of efficiency savings that is technologically feasible and cost effective. If there is no likelihood of accountability through enforcement, manufacturers can flout energy efficiency requirements and sell inferior products that increase energy bills for families and businesses and escalate the pollution associated with generating the power to run them.
Manufacturers most often do the right thing and comply with the standards as they design and manufacture their products—which, by the way, is required by law. But there are cases where manufacturers try to cut corners. In 2016 alone, the DOE collected more than $1.56 million in fines from 10 manufacturers found to be out of compliance with efficiency standards. Noncompliant equipment ranged from air conditioners to commercial freezers to lighting. Thanks to the DOE’s enforcement efforts, these noncompliant products are no longer on the market, and consumers will continue to save energy and money.
Enforcement protects manufacturers, too. Bradford White, a leading manufacturer of water heaters based in Ambler, Pennsylvania, builds its products in Michigan and New Hampshire. The company recently acquired the heat pump water heater operations of GE Appliances. This significant investment by Bradford White means that heat pump water heaters will continue to be made in America by a company that has been very active in the standards-setting process. Thanks to DOE enforcement, Bradford White and other companies can make this type of investment with confidence that they will not be competing with unscrupulous manufacturers that don’t follow the law and undercut prices with cheap, inferior products.
The appliance standards program has consistently been a driver of American innovation in products we all use every day, and the enforcement arm of the program makes sure manufacturers follow the rules of the road.
Cutting the federal budget for enforcement of energy efficiency standards will mean that consumers and manufacturers lose.