Information on the Department of Energy's Analyses To Determine the Need for Appliance Efficiency Standards

The National Energy Conservation Policy Act directs the Secretary of the Department of Energy (DOE) to prescribe minimum energy efficiency standards for 13 types of products. The standards are to assure that covered products made available to consumers meet a specific level of energy efficiency, thus eliminating the less efficient products from the marketplace. The Act requires that any standard prescribed be technologically feasible, economically justified, and result in significant conservation of energy. Since DOE has completed three separate analyses to support a final rule on appliance efficiency standards, GAO was asked to provide information on these efforts.

The analyses have resulted in significantly different estimates of the impact that appliance efficiency standards could have in achieving energy conservation. A critical assumption made in each DOE analyses was the projected price of energy fuels and the effect such prices would have on the determination of consumer appliance purchase decisions. In all three analyses, the projected level of energy prices increased. The result of this changing assumption was that each successive analysis resulted in market forces solely generating increasingly greater energy savings, with the impact of standards decreasing. In the most recent analysis, the model attributed 27.6 quads of savings to market forces while standards were credited with saving only an additional 5.2 quads. DOE concluded that the projected savings in each product category were not significant enough in proportion to total energy used to justify the imposition of standards.