Energy Efficiency
Long-standing Problems with DOE's Program for Setting Efficiency Standards Continue to Result in Forgone Energy Savings Gao ID: GAO-07-42 January 31, 2007The Department of Energy (DOE) sets energy efficiency standards through the rulemaking process for certain consumer product categories, such as kitchen ranges, and industrial equipment, such as distribution transformers. Congress reported in 2005 that DOE was late in setting standards and required DOE to report every 6 months on the status of the backlog. GAO examined (1) the extent to which DOE has met its obligations to issue rules on minimum energy efficiency standards for consumer products and industrial equipment and (2) whether DOE's plan for clearing the backlog will be effective or can be improved. Among other things, GAO convened an expert panel on energy efficiency standards to identify causes and effects of delays and assess DOE's plans.
DOE has missed all 34 congressional deadlines for setting energy efficiency standards for the 20 product categories with statutory deadlines that have passed. DOE's delays ranged from less than a year to 15 years. Rulemakings have been completed for only (1) refrigerators, refrigerator-freezers, and freezers; (2) small furnaces; and (3) clothes washers. DOE has yet to finish 17 categories of such consumer products as kitchen ranges and ovens, dishwashers, and water heaters, and such industrial equipment as distribution transformers. Lawrence Berkeley National Laboratory estimates that delays in setting standards for the four consumer product categories that consume the most energy--refrigerators and freezers, central air conditioners and heat pumps, water heaters, and clothes washers--will cost at least $28 billion in forgone energy savings by 2030. DOE's January 2006 report to Congress attributes delays to several causes, including an overly ambitious statutory rulemaking schedule and a lengthy internal review process. In interviews, however, DOE officials could not agree on the causes of delays. GAO's panel of widely recognized, knowledgeable stakeholders said, among other things, that the General Counsel review process was too lengthy and that DOE did not allot sufficient resources or make the standards a priority. However, GAO could not more conclusively determine the root causes of delay because DOE lacks the program management data needed to identify bottlenecks in the rulemaking process. In January 2006, DOE presented to Congress its plan to bring the standards up to date by 2011. It is unclear whether this plan will effectively clear DOE's backlog because DOE does not have the necessary program management data to be certain the plan addresses the root causes. The plan also lacks critical elements of an effective project management plan, such as a way to ensure management accountability for meeting the deadlines. Finally, the plan calls for a sixfold increase in workload with only a small increase in resources. DOE plans to manage the workload through improved productivity.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-07-42, Energy Efficiency: Long-standing Problems with DOE's Program for Setting Efficiency Standards Continue to Result in Forgone Energy Savings
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
January 2007:
Energy Efficiency:
Long-standing Problems with DOE's Program for Setting Efficiency
Standards Continue to Result in Forgone Energy Savings:
GAO-07-42:
GAO Highlights:
Highlights of GAO-07-42, a report to congressional requesters
Why GAO Did This Study:
The Department of Energy (DOE) sets energy efficiency standards through
the rulemaking process for certain consumer product categories, such as
kitchen ranges, and industrial equipment, such as distribution
transformers. Congress reported in 2005 that DOE was late in setting
standards and required DOE to report every 6 months on the status of
the backlog.
GAO examined (1) the extent to which DOE has met its obligations to
issue rules on minimum energy efficiency standards for consumer
products and industrial equipment and (2) whether DOE‘s plan for
clearing the backlog will be effective or can be improved. Among other
things, GAO convened an expert panel on energy efficiency standards to
identify causes and effects of delays and assess DOE‘s plans.
What GAO Found:
DOE has missed all 34 congressional deadlines for setting energy
efficiency standards for the 20 product categories with statutory
deadlines that have passed. DOE‘s delays ranged from less than a year
to 15 years. Rulemakings have been completed for only (1)
refrigerators, refrigerator-freezers, and freezers; (2) small furnaces;
and (3) clothes washers. DOE has yet to finish 17 categories of such
consumer products as kitchen ranges and ovens, dishwashers, and water
heaters, and such industrial equipment as distribution transformers.
Lawrence Berkeley National Laboratory estimates that delays in setting
standards for the four consumer product categories that consume the
most energy––refrigerators and freezers, central air conditioners and
heat pumps, water heaters, and clothes washers––will cost at least $28
billion in forgone energy savings by 2030. DOE‘s January 2006 report to
Congress attributes delays to several causes, including an overly
ambitious statutory rulemaking schedule and a lengthy internal review
process. In interviews, however, DOE officials could not agree on the
causes of delays. GAO‘s panel of widely recognized, knowledgeable
stakeholders said, among other things, that the General Counsel review
process was too lengthy and that DOE did not allot sufficient resources
or make the standards a priority. However, GAO could not more
conclusively determine the root causes of delay because DOE lacks the
program management data needed to identify bottlenecks in the
rulemaking process.
In January 2006, DOE presented to Congress its plan to bring the
standards up to date by 2011. It is unclear whether this plan will
effectively clear DOE‘s backlog because DOE does not have the necessary
program management data to be certain the plan addresses with certainty
the root causes. The plan also lacks critical elements of an effective
project management plan, such as a way to ensure management
accountability for meeting the deadlines. Finally, the plan calls for a
sixfold increase in workload with only a small increase in resources.
DOE plans to manage the workload through improved productivity.
Figure: Timeliness of DOE Rulemakings That Have Come Due:
[See PDF for Image]
Source: GAO analysis of DOE data.
[End of figure]
What GAO Recommends:
GAO recommends that DOE adopt elements of effective project management
in its standards rulemaking, such as using a more transparent process
and allocating adequate resources within its appropriation. In
commenting on this report, DOE did not respond to the recommendations
but said it was incorrect to single out any official or office for the
delays and that the report did not reflect many of its standards-
setting activities since EPAct 2005. GAO reported several causes of
delays; activities since EPAct 2005 were outside this report‘s scope.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-42].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Jim Wells at (202)512-
3841 or wellsj@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
DOE Has Missed All Rulemaking Deadlines at a Cost of Billions in
Forgone Energy Savings:
Effectiveness of DOE's Catch-Up Plan Is Uncertain:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Status of the Department of Energy's Model Building Code
Determinations:
DOE Has Completed One of Three Commercial Building Code Determinations:
DOE Has Completed Four of Five Residential Building Code
Determinations:
DOE Tracks States' Building Codes:
Appendix II: Objectives, Scope, and Method:
Appendix III: Rulemakings and Delays for Consumer Products and
Industrial Equipment with Deadlines That Have Passed:
Appendix IV: Participants in Energy Efficiency Standards Delphi Panel:
Appendix V: Comments from the Department of Energy:
Appendix VI: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Actions DOE Is Required to Take for Consumer Product and
Industrial Equipment Categories with Rulemaking Deadlines:
Table 2: Timeliness of DOE Rulemakings That Have Come Due:
Table 3: Status of Efficiency Standards for Consumer Products and
Industrial Equipment with Rulemaking Deadlines That Have Passed:
Table 4: Status of Required Industrial Equipment Standards Revisions
without Deadlines:
Table 5: Status of DOE's Review of ASHRAE Standard 90.1 Revisions:
Table 6: Status of DOE's Review of MEC and IECC Revisions:
Abbreviations:
ASHRAE: American Society of Heating, Refrigerating and Air-Conditioning
Engineers:
Btu: British thermal unit:
CABO: Council of American Building Officials:
DOE: Department of Energy:
DOT: Department of Transportation:
EPAct 2005: Energy Policy Act of 2005:
EPCA: Energy Policy and Conservation Act:
ICC: International Code Council:
IECC: International Energy Conservation Code:
LBNL: Lawrence Berkeley National Laboratory:
MEC: Model Energy Code:
PMF: Presidential Management Fellows:
PNNL: Pacific Northwest National Laboratory:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
January 31, 2007:
The Honorable John D. Dingell:
Chairman:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Rick Boucher:
Chairman:
Subcommittee on Energy and Air Quality:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Edward J. Markey:
House of Representatives:
Recent energy cost increases and concerns about global warming are
leading to a new national focus on reducing U.S. energy consumption.
Household and commercial products that are regulated by the U.S.
Department of Energy (DOE) will account for about 30 percent of
estimated total U.S. energy consumed in 2006, according to DOE's
Lawrence Berkeley National Laboratory. Increasing the energy efficiency
of these kinds of products could produce significant energy savings.
Not surprisingly, therefore, Congress has long been interested in
improving energy efficiency. In 1975, under the Energy Policy and
Conservation Act (EPCA), Congress required DOE to set target minimum
energy efficiency standards for manufacturers of specified categories
of consumer products such as refrigerators, dishwashers, furnaces, and
hot water heaters. Congress has amended the statute to include
additional consumer product categories such as fluorescent lamps and
plumbing products, as well as industrial equipment categories such as
steam boilers and electric motors. Minimum efficiency standards for
consumer product and industrial equipment categories are designed to
eliminate the least efficient products from the market.[Footnote 1]
EPCA, as amended, also reflects manufacturers' and states' interest in
having uniform federal standards for energy-efficient products, rather
than a patchwork of state standards. It prohibits states and localities
from setting more stringent standards than the federal standards for
covered products unless the states obtain waivers from DOE. When the
act was passed, several states were setting their own energy efficiency
standards, and stakeholders, including states and manufacturers,
generally believed that uniform federal standards would result in lower
costs for manufacturing and, hence, lower prices for consumers, as well
as saving energy overall.
Under EPCA amendments, Congress mandated deadlines for DOE to issue
rules that set minimum energy efficiency standards for most consumer
product categories. Congress also made manufacturers' compliance with
the standards mandatory. The statute also requires DOE to set and
revise standards through the federal rulemaking process. This process
calls for analyzing the technical and economic issues associated with
setting energy efficiency standards for each category, proposing a
standard through public notification, soliciting comments on the
standard, revising the rule, and issuing the final rule. DOE program
staff in Washington develop these rules, using analysis by experts--
such as staff at Lawrence Berkeley National Laboratory (LBNL) and other
contractors--on the technical and economic aspects. The rules undergo
legal and policy reviews within the department before they are issued.
Most of the categories with deadlines require at least two rules--
either to set an initial standard and later update it or to update a
congressionally set standard and then update it again about 5 years
after the first deadline. For categories without deadlines, DOE must
first review revisions that nongovernmental standard-setting entities
make to their model standards and, generally, issue a rule announcing
whether it will adopt these revised model standards or reject them and
issue its own standards.
In 1993, we reported that while DOE had issued rules for some of the
product categories with passed deadlines, these had always been issued
late, and the others had not been issued yet. We cited inadequate
resources as a major reason for delays.[Footnote 2] Congressional
action in 2005 reflected continuing concerns about DOE's ability to
issue rules for energy-efficient consumer products and industrial
equipment. The Energy Policy Act of 2005 (EPAct 2005) required DOE to
report to Congress by February 8, 2006, and again every 6 months
following the submission of that report, on its plans to clear its
backlog of standards that need to be set or considered for revision. In
its first report, submitted in January 2006,[Footnote 3] DOE reported a
backlog of required rulemakings for many consumer product and
industrial equipment categories but made a commitment, from the
Secretary on down, to take a number of steps to clear the backlog by
2011.[Footnote 4] Twenty of these consumer product and industrial
equipment categories have statutory deadlines that have passed and
involve 34 different product rules.[Footnote 5]
The requirement for reports to Congress every 6 months highlights the
importance Congress places on setting energy efficiency standards for
specific consumer products and industrial equipment. The missed
deadlines have meant missed opportunities to reduce (1) consumers'
energy costs, (2) the need for new power facilities, and (3) the level
of polluting emissions such as carbon dioxide, among other things.
While some consumers may choose to buy products that are more efficient
without waiting for federal standards, others may not do so for a
number of reasons--because the more efficient products may cost more at
the time of purchase, for example. If, however, all models in a
category have to meet certain minimum energy efficiency standards, then
the potential for savings over the life of the product, due to lower
energy bills, can be significant. For example, by 2030, for the minimum
energy efficiency standards for consumer products that DOE has set thus
far, DOE projects that consumers will save nearly $125 billion. Enough
energy would be saved to operate all U.S. homes for over 2 years, based
on 2006 estimated energy consumption.
As requested, this report examines (1) the extent to which DOE has met
its statutory obligations to issue rules on minimum energy efficiency
standards for consumer products and industrial equipment and (2)
whether DOE's plans are likely to clear the backlog of required
rulemakings and whether these plans could be improved. In addition, you
asked us to assess whether DOE has met statutory deadlines for building
code determinations (see app. I). In future work, GAO plans to evaluate
federal agencies' efforts to provide household consumers with
information about energy savings opportunities for purchases of
appliances, lighting, and other energy consuming products.
We reviewed statutes and regulations regarding the requirements and
deadlines for minimum energy efficiency standards for consumer products
and industrial equipment. We interviewed relevant officials from, and
analyzed documentation provided by, DOE, a DOE contractor, energy
organizations, and nongovernmental standard-setting entities; an expert
on regulatory efficiency; and government officials from Canada and
California--governments that are known for their exemplary standards-
setting programs.[Footnote 6] In addition, we convened a Web- based
panel of 33 energy efficiency standards stakeholders from federal and
state governments, industry, nonprofit organizations, and utilities who
are both widely recognized as knowledgeable about key aspects of energy
efficiency standards and are involved with DOE's standards rulemaking
process. We obtained panel members' views using a modified, Web-based
version of the Delphi method, a systematic process for obtaining
individuals' views and obtaining group members' consensus, if possible,
on a problem of interest. A more detailed description of our
objectives, scope, and method is presented in appendix II. We did not
examine the merits of the standards DOE has set. Although DOE is
required to issue rules regarding standards for plumbing products, we
excluded them from this report because they primarily involve
conserving water, rather than energy. In addition, we did not consider
deadlines for the purposes of this report set in EPAct 2005; nor did we
examine DOE's activities undertaken since EPAct 2005 that did not
result in a completed standard. We conducted our review from June 2005
through January 2007 in accordance with generally accepted government
auditing standards.
Results in Brief:
DOE has missed all 34 of the deadlines for rulemaking that have come
due for the 20 consumer products and industrial equipment categories
with deadlines that have passed. In addition, it has not revised
standards for one of the six industrial equipment categories that have
no deadlines but for which DOE is obligated to issue new rules. Of the
34 rules with missed deadlines, 11 were issued late, and the other 23
have not been issued at all. Delays in meeting deadlines range from
about 2 months to 15 years. Overall, all required rulemakings have been
set for only three product categories with deadlines: (1)
refrigerators, refrigerator-freezers, and freezers; (2) small furnaces;
and (3) clothes washers. DOE has yet to set all required rulemakings
for 17 additional categories such as--for consumer products--kitchen
ranges and ovens, dishwashers, clothes dryers, hot water heaters, and--
for industrial equipment--various electric motors and electric
distribution transformers, which reduce the voltage of an electric
utility's power distribution line to the lower voltages suitable for
most equipment, lighting, and appliances. In addition, standards are up
to date for five of the six industrial equipment categories that have
no deadlines but which must have standards set: (1) warm air furnaces,
(2) packaged boilers, (3) storage water heaters, (4) instantaneous
water heaters, and (5) unfired water storage tanks (that store water
and have an external source for heating it). The sixth category--a
particular type of large air conditioner and heat pump--has not had
standards set. Our panel members cited increased energy consumption as
one of the most significant effects of the delays. In fact, according
to LBNL, the delays for the four consumer product categories with the
greatest energy savings potential will cost the nation an estimated $28
billion in forgone savings by 2030. Our panel also pointed to other
potential effects of delays, such as states attempting to set their own
efficiency standards and manufacturers' and utilities' difficulties in
making business plans. Standards that differ from state to state would
be likely to cause higher manufacturer costs than a single federal
standard and, hence, higher costs for consumers.
It is unclear whether DOE's latest plan for clearing its backlog of
rulemakings will effectively bring its minimum energy efficiency
standards up to date, primarily because DOE cannot be certain it knows
the root causes of the delays, and its catch-up plan lacks critical
elements of an effective project management plan. Specifically:
* Root causes are uncertain. Neither DOE nor our panel could agree on,
and we could not definitively determine, the root causes of the delays.
DOE has not developed the program management data it needs to identify
bottlenecks in the rulemaking process and develop solutions. As a
result, we could not determine if the corrective actions DOE has
proposed will alleviate delays. In developing the catch-up plan, the
managers relied primarily on anecdotal information from program staff
to determine the causes of delays. In the absence of management
information, such as the length of each stage of DOE's rulemaking
process, we were not able to determine which of these causes or
combinations of causes account for the delays. Some of our panelists
raised concerns that DOE may not be addressing what they believe are
the most relevant reasons for delays; for example, DOE may not have
allocated sufficient funding or assigned adequate technical staff.
Unless the causes of the delays are known, it is difficult to know
whether problems have been addressed. But, most of the panelists rated
the components of DOE's plan highly and expect that it will help DOE
meet the deadlines of its catch-up schedule if these actions are
implemented.
* The plan lacks critical project management elements. According to
leading project management practices, effective project plans have two
key components that are lacking in DOE's plan. First, plans should hold
officials and staff accountable for meeting interim and final
deadlines. If the officials do not meet these deadlines, they should
provide legitimate reasons for the delays. Second, the plan should
include provisions for adequate resources. Instead, DOE's plan
increases the workload sixfold over that in recent years without
increasing proportionately the resources it will devote to the program.
DOE officials told us they plan to rely on increased productivity, with
only a marginal increase in resources, to bring the standards up to
date. Furthermore, DOE's plan does not include a means of ensuring that
staff and reviewers are accountable for meeting deadlines.
To help ensure that DOE reduces or eliminates the backlog, we are
making recommendations to the Secretary of Energy that DOE revise its
catch-up plan to incorporate leading management practices. In
commenting on a draft of this report, DOE did not provide views on our
recommendations. DOE said it was incorrect to single out any official
or office for the delays and that the report did not reflect many of
its standards-setting activities undertaken since EPAct 2005. We
disagree with DOE's characterization of our analysis. We reported
several causes of delays in the standards-setting process; also, the
activities DOE has taken since EPAct 2005 that did not result in
completed standards are outside of the scope of this report.
Background:
Under EPCA, as amended, covered product and equipment categories may
need one or two rulemakings for the following reasons:
* Most often, if Congress established a standard in the law, DOE must
publish a rule revising the standard or explaining why a revision is
not justified. Generally, such statutes require two rulemakings: an
initial revision and then a second revision, usually 5 years later.
This type of rulemaking is associated with most categories.
* For several consumer products for which Congress did not set a
standard in law, DOE must issue two rules--one rule to create a
standard and a later rule to update the standard.
* For several industrial equipment categories for which Congress
established a standard in law, DOE must review amendments to model
standards set by a specified nongovernmental standard-setting entity.
Based on DOE's review, it must either publish a rule updating the
statutory standards to reflect the amended model standards, or publish
a rule demonstrating that a more stringent standard is justified. The
statute specifically requires DOE to consider the standards set by the
American Society of Heating, Refrigerating and Air-Conditioning
Engineers (ASHRAE).
* For three other industrial equipment categories, DOE must first
publish a determination of whether a standard is needed. If DOE
determines the need for a standard, it must then publish a rule setting
such a standard 18 months after publishing the determination. However,
DOE does not have a deadline for making a determination.
Overall, DOE is required to determine that revisions to standards
achieve the maximum improvement in energy efficiency that is
"technologically feasible and economically justified." In determining
whether a standard is economically justified, DOE must consider the
economic impacts of the revision on manufacturers and consumers, the
savings in operating costs throughout the life of the product, the
total projected amount of energy savings likely to result from the
standard, and whether the standard would result in a product that is
less useful or does not perform as well. Table 1 shows the number of
deadlines and types of actions required for consumer product and
industrial equipment categories with deadlines that have passed. In
addition, DOE is obligated to issue rules adopting revised standards
for another six industrial equipment categories: packaged terminal air
conditioners and packaged terminal heat pumps; warm air furnaces;
packaged boilers; storage water heaters; instantaneous water heaters;
unfired water storage tanks. DOE has no mandated deadlines for issuing
these rules.
Table 1: Actions DOE Is Required to Take for Consumer Product and
Industrial Equipment Categories with Rulemaking Deadlines:
Consumer products.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 1; Clothes washers;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 2: Refrigerators, refrigerator-freezers, and
freezers;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 3: Small furnaces;
Number of rulemaking deadlines that have come due: 1.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 4: Central air conditioners and heat pumps;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 5: Clothes dryers;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 6: Dishwashers;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 7: Fluorescent lamp ballasts;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 8: Room air conditioners;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 9: Water heaters;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 10: Direct heating equipment;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 11: Furnaces;
Number of rulemaking deadlines that have come due: 1.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 12: General service fluorescent lamps and
incandescent reflector lamps;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 13: Additional general service fluorescent
and general service incandescent lamps;
Number of rulemaking deadlines that have come due: 1.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 14: Kitchen ranges and ovens;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 15: Mobile home furnaces;
Number of rulemaking deadlines that have come due: 1.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 16: Pool heaters; Number of rulemaking
deadlines that have come due: 2.
Subtotal--number of consumer product rules required;
Number of rulemaking deadlines that have come due: 28.
Industrial equipment.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 17: Electric motors not requiring national
certification;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a rule revising a standard or explaining why a
revision is not justified: 18: Electric motors requiring national
certification;
Number of rulemaking deadlines that have come due: 2.
Action required for consumer product or industrial equipment
categories: Issue a determination of whether a revision is justified,
and, if so, issue a rule setting the standard: 19: Distribution
transformers;
Number of rulemaking deadlines that have come due: 1.
Action required for consumer product or industrial equipment
categories: Issue a determination of whether a revision is justified,
and, if so, issue a rule setting the standard: 20: Small electric
motors;
Number of rulemaking deadlines that have come due: 1.
Subtotal--number of industrial equipment rules required;
Number of rulemaking deadlines that have come due: : 6.
Total--number of rules required for consumer products and industrial
equipment;
Number of rulemaking deadlines that have come due: 34.
Source: GAO analysis of DOE data.
Note: The numbers in the column on the left represent the number of
product categories.
[End of table]
DOE Has Missed All Rulemaking Deadlines at a Cost of Billions in
Forgone Energy Savings:
DOE has missed all 34 of the rulemaking deadlines that have come due
for the 20 product categories with deadlines, completing 11 of these
rules late and not yet completing the remaining 23. DOE has also not
revised standards for one of the six industrial equipment categories
that require updates but have no deadlines. LBNL estimates that delays
in setting minimum energy efficiency standards for four categories of
consumer products that DOE believes use the most energy will cost the
nation at least $28 billion in forgone energy savings by 2030. Our
panel members identified two additional significant effects of the
delays: states attempting to set their own standards and businesses and
utilities having difficulty in making business decisions and planning
for the future.
DOE Has Not Met Any of Its Rulemaking Obligations on Time:
As table 2 shows, none of the 34 rules with passed deadlines was
completed on time. For rules that have been completed, delays ranged
from less than 1 year to about 10 years; and incomplete rules are as
much as 15 years late.
Table 2: Timeliness of DOE Rulemakings That Have Come Due:
Status: On time;
Completed rulemakings: 0;
Incomplete rulemakings: 0.
Status: Less than 1 year late;
Completed rulemakings: 2;
Incomplete rulemakings: 1.
Status: 1 year to less than 5 years late;
Completed rulemakings: 4;
Incomplete rulemakings: 2.
Status: 5 years to less than 10 years late;
Completed rulemakings: 5;
Incomplete rulemakings: 8.
Status: 10 years to 15 years late;
Completed rulemakings: 0;
Incomplete rulemakings: 12.
Total;
Completed rulemakings: 11;
Incomplete rulemakings: 23.
Source: GAO analysis of DOE data.
[End of table]
Table 3 shows the status of rules completed for consumer product and
industrial equipment categories with deadlines that have passed. As the
table shows, only three product or equipment categories--clothes
washers; refrigerators, refrigerator-freezers, and freezers; and small
furnaces--have had all their rules completed. As the table also shows,
some categories have had one of two required rules completed, and
others have had no rules completed.
Table 3: Status of Efficiency Standards for Consumer Products and
Industrial Equipment with Rulemaking Deadlines That Have Passed:
Consumer products.
Consumer product or industrial equipment category: 1: Clothes washers;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): All rules
completed (2).
Consumer product or industrial equipment category: 2: Refrigerators,
refrigerator-freezers, and freezers;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): All rules
completed (2).
Consumer product or industrial equipment category: 3: Small
furnaces[A];
Number of rulemaking deadlines that have come due: 1;
Status and number of completed rules (in parentheses): All rules
completed (1).
Consumer product or industrial equipment category: 4: Central air
conditioners and heat pumps;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): First rule
completed (1).
Consumer product or industrial equipment category: 5: Clothes dryers;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): First rule
completed (1).
Consumer product or industrial equipment category: 6: Dishwashers;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): First rule
completed (1).
Consumer product or industrial equipment category: 7: Fluorescent lamp
ballasts;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): First rule
completed (1).
Consumer product or industrial equipment category: 8: Room air
conditioners;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): First rule
completed (1).
Consumer product or industrial equipment category: 9: Water heaters;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): First rule
completed (1).
Consumer product or industrial equipment category: 10: Direct heating
equipment;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): No rules
completed.
Consumer product or industrial equipment category: 11: Furnaces;
Number of rulemaking deadlines that have come due: 1;
Status and number of completed rules (in parentheses): No rules
completed.
Consumer product or industrial equipment category: 12: General service
fluorescent lamps and incandescent reflector lamps;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): No rules
completed.
Consumer product or industrial equipment category: 13: Additional
general service fluorescent and general service incandescent lamps[A];
Number of rulemaking deadlines that have come due: 1;
Status and number of completed rules (in parentheses): No rules
completed.
Consumer product or industrial equipment category: 14: Kitchen ranges
and ovens;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): No rules
completed.
Consumer product or industrial equipment category: 15: Mobile home
furnaces[A];
Number of rulemaking deadlines that have come due: 1;
Status and number of completed rules (in parentheses): No rules
completed.
Consumer product or industrial equipment category: 16: Pool heaters;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): No rules
completed.
Industrial equipment.
Consumer product or industrial equipment category: 17: Electric motors-
not requiring national certification;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): No rules
completed.
Consumer product or industrial equipment category: 18: Electric motors-
requiring national certification;
Number of rulemaking deadlines that have come due: 2;
Status and number of completed rules (in parentheses): No rules
completed.
Consumer product or industrial equipment category: 19: Distribution
transformers[A];
Number of rulemaking deadlines that have come due: 1;
Status and number of completed rules (in parentheses): No rules
completed.
Consumer product or industrial equipment category: 20: Small electric
motors[A];
Number of rulemaking deadlines that have come due: 1;
Status and number of completed rules (in parentheses): No rules
completed.
Total;
Number of rulemaking deadlines that have come due: 34;
Status and number of completed rules (in parentheses): (11).
Source: GAO analysis of DOE data.
Note: The numbers in the column on the left represent the number of
product categories.
[A] Only one rulemaking required.
[End of table]
Appendix III provides additional information on the deadlines for these
product and equipment categories.
Furthermore, for the six industrial equipment categories that do not
have deadlines, DOE has completed rules for five and has begun, but not
completed, the rulemaking process for the remaining category, as table
4 shows.
Table 4: Status of Required Industrial Equipment Standards Revisions
without Deadlines:
Industrial equipment category: Packaged terminal air conditioners and
heat pumps;
Date of ASHRAE revision: 1999;
DOE action: Rule not completed.
Industrial equipment category: Warm air furnaces;
Date of ASHRAE revision: 1999;
DOE action: Rule completed.
Industrial equipment category: Packaged boilers;
Date of ASHRAE revision: 1999;
DOE action: Rule completed.
Industrial equipment category: Storage water heaters;
Date of ASHRAE revision: 1999;
DOE action: Rule completed.
Industrial equipment category: Instantaneous water heaters;
Date of ASHRAE revision: 1999;
DOE action: Rule completed.
Industrial equipment category: Unfired water storage tanks;
Date of ASHRAE revision: 1999;
DOE action: Rule completed.
Source: GAO analysis of DOE data.
[End of table]
Delays Resulted in Forgone Energy Savings of at Least $28 Billion and
Create Problems in Other Areas:
DOE does not have estimates of the energy savings lost because of
delays in completing rules. However, LBNL staff provided us with
estimates of delays for the four categories of consumer products that
DOE believes use the most energy--refrigerators and freezers, central
air conditioners and heat pumps, water heaters, and clothes washers.
According to these estimates, the nation would have saved at least $28
billion in energy costs, even after paying higher equipment costs, by
2030 if these standards had been put in place when required--that is,
2.1 quadrillion British thermal units (Btu) of natural gas and 1.4
quadrillion Btus of electricity. Historically, LBNL, under contract to
DOE, has performed most of the technical and economic analyses for
proposed standards rulemakings. To estimate the cost of delays, LBNL
staff used the estimates of savings they developed to support proposed
standards for the four consumer products. According to our analysis,
LBNL took steps to ensure the estimates were reasonably accurate by
considering such factors as whether the technologies used for the
analysis would have been available at the time of the deadlines for
setting standards. The total forgone energy savings is equal to the
annual primary energy consumption of approximately 20 million U.S.
households. In addition, the delays will also result in 53 million tons
of carbon dioxide emissions, an amount equivalent to about 1 percent of
total estimated U.S. carbon dioxide emissions in 2004. Our panelists
noted that they consider increased energy consumption to be one of the
two most significant effects of DOE's delays in revising efficiency
standards.
Similarly, delays for one type of industrial equipment, electric
distribution transformers, have resulted in significant forgone energy
savings. Distribution transformers reduce the voltage of an electric
utility's power distribution line to the lower voltages suitable for
most equipment, lighting, and appliances. Nine years ago, DOE
determined that standards for distribution transformers were warranted
as technologically feasible and economically justified and were likely
to result in significant savings. However, DOE did not publish proposed
standards for distribution transformers in the Federal Register until
August 2006.[Footnote 7] According to DOE, the energy savings from the
proposed distribution transformer standards would eliminate the need
for approximately 11 new 400-megawatt power plants by 2038, enough to
provide a sufficient flow of electricity to about 3 million
homes.[Footnote 8]
These estimates account for only a portion of the forgone savings from
the lack of timely rules for consumer products and industrial
equipment; however, no estimates of the forgone savings are available
for the remaining product and equipment categories. Equally important,
because many energy-using products and equipment have long service
lives, delays in setting standards lead to years of using the products
and equipment that are less energy efficient than they could be,
compounding the loss of the energy efficiency. For example, electric
distribution transformers have a typical service life of about 30
years. With about 50 million transformers in the United States, each
year of delay until a rule setting standard is completed means that
more of these transformers will be replaced at the present energy
efficiencies, rather than the proposed level, leading to many
additional years of forgone savings.
Other, nonquantifiable effects have also resulted, or can result, from
delays in issuing energy efficiency rules. Our panel members noted the
possibility that states would attempt to set their own appliance
efficiency standards as the other most significant effect of delays.
Indeed, states are dissatisfied with DOE's delays. In 2005, 15 states
and New York City sued DOE for "foot-dragging [that] results in greater
---and avoidable--energy use." The states cited, among other effects,
high energy costs, increased environmental harm, and burdens on the
electricity grid from DOE's delays as justification for their actions.
The suit was settled recently, with DOE agreeing to eliminate its
backlog by 2011, the same date set in its report to Congress. According
to officials from the California Energy Commission, California has
begun to press Congress to lift the preemption that prevents the states
from readily setting their own standards. While states had expressed
dissatisfaction with the pace of rulemaking and before 1987 had
petitioned DOE for waivers, the 1987 amendment to EPCA made it
considerably more difficult to obtain a waiver, according to DOE
officials. Since then, DOE has received only one petition for a waiver.
Panel members commented that if states obtain waivers and pass
individual standards, the result could be a patchwork of state
standards, preventing economies of scale in manufacturing and raising
costs for both consumers and manufacturers.
Panel members also pointed out that delays make business planning
difficult for manufacturers and utilities, which could also increase
their costs and, therefore, costs to consumers. As one panel member
noted, "Product manufacturers don't know when new standards will take
effect in advance, making it difficult to plan product redesigns and
thereby increasing cost of compliance." According to another panelist,
"An uncertain future regulatory environment makes it very difficult for
appliance and equipment manufacturers to make investment decisions."
For example, a manufacturer may be reluctant to invest large sums in a
new technology if the new technology may be made obsolete by new
federal efficiency standards or if new standards might not allow the
manufacturer to gain a hoped-for competitive advantage via new
technology. To minimize such uncertainty and its attendant risks,
manufacturers want DOE to make regulatory decisions on time."
Effectiveness of DOE's Catch-Up Plan Is Uncertain:
DOE has developed a catch-up plan to resolve the backlog of delayed
energy efficiency standards. However, since DOE has not completely
identified the root causes for the delays and because the plan lacks
critical elements of an effective management approach, the likelihood
of success is not clear.
DOE's Plan Lays Out an Approach to Clearing the Backlog, but It Is
Unclear Whether the Plan Is Addressing Root Causes of Delays:
According to DOE's January 2006 report to Congress, the department has
identified four causes of delays in its efficiency standards
rulemaking: (1) an overly ambitious schedule set in statute; (2) the
sequential nature of the rulemaking process; (3) the consequences of
the Process Rule, which the report states that DOE adopted in 1996 to
address concerns about its analyses and stakeholder involvement; and
(4) DOE's internal document review and clearance process. Specifically:
* An ambitious statutory schedule. According to the report, Congress's
rulemaking schedule was "rigorous." As a result, the program staff were
unable to meet the deadlines from the beginning. These delays were
exacerbated when Congress increased the number of products that
required rulemakings. In 1994, DOE attempted to address the backlog by
proposing standards for eight products in one rulemaking. However,
according to DOE, this rulemaking effort met with strong opposition
from industry, drawing over 5,000 responses during the comment period,
and DOE withdrew the proposal. Following this experience, Congress
imposed a 1-year moratorium on new or amended standards. The moratorium
further exacerbated the backlog, according to DOE.
* Sequential nature of the rulemaking process. The elements of a
rulemaking must occur sequentially, and, according to DOE, "this
sequence-dependent nature of the analyses makes it vulnerable to un-
recoverable delays." The standards rulemaking process includes many
overlapping requirements from EPCA, as amended; Executive Orders; and
the Process Rule, which create a complex analytical and procedural
challenge, according to the report. The standards rulemaking process
typically consists of three stages--an advance notice of proposed
rulemaking, a notice of proposed rulemaking, and a final rule--and each
of these stages includes internal and external review and comment
periods, as well as technical analyses that build on previous analyses.
Most of these tasks cannot be done concurrently, so when delays occur,
often the time lost cannot be made up because of these rigid
requirements.
* Consequences of the Process Rule. Under DOE's 1996 "Process
Rule,"[Footnote 9] the potential energy savings, rather than statutory
deadlines, determine which standards should be set first. Consequently,
DOE reported to Congress, it analyzed the likely impacts of all pending
energy efficiency rulemakings and used this analysis to categorize each
rulemaking as high-, medium-, or low-priority, depending on energy-
savings potential. Regardless of deadlines, high-priority rules
received the bulk of the resources, medium-priority rules received some
resources, and low-priority rules were not addressed at all. The
Process Rule also called for increased stakeholder input and expert
review, which added time to the rulemaking, according to DOE's report.
Finally, according to DOE's 2006 report, the Process Rule increased the
complexity of the technical analysis required, adding more time.
* Internal document review and clearance process. The quality of draft
rulemaking documents was inconsistent, according to DOE's 2006 report,
which made the internal review process time consuming. In addition,
reviews by the Office of General Counsel, Office of Policy and
International Affairs, and other internal reviewers were not always
managed effectively, according to the report. Consequently, issues were
not identified and resolved early in the process, and draft rules often
did not receive the timely reviews needed to approve them for issuance.
While DOE identified these causes for rulemaking delays in its January
2006 report, DOE staff we spoke with did not agree on the causes.
Program staff told us General Counsel's legal reviews were excessively
long, while General Counsel officials attributed their lengthy review
to the poor quality of documents, which required extensive non-legal
editing. DOE lacks program management data that would enable it to
identify with specificity where in the agency's internal review process
delays are occurring. In addition, LBNL staff disagreed with the
report's contention that the Process Rule required more time for
technical analysis. Rather, they said, the Process Rule's requirement
for more complex analysis and for more systematic stakeholder
involvement addressed those parts of the rulemaking process earlier
than before but took about the same amount of time.
Our panel members, based on their past involvement or familiarity with
standards rulemaking, agreed that the internal review process was
problematic. Specifically, the most frequently cited cause for delays
in developing energy efficiency standards were delays in the General
Counsel review process. One panel member stated that the General
Counsel review process was "one of the lengthiest and most opaque
elements of the standards process." In addition, about half of our
panelists said the low priority historically given to the program, not
only by DOE but by the Administration and Congress as well, was a great
cause of delay in issuing the standards. Finally, panel members
identified two additional major causes of delay that DOE did not,
namely inadequate budget and insufficient technical staff.
While some of these identified causes are beyond DOE's control, such as
the statutory deadlines, DOE reported that it could take actions to
clear the backlog by 2011. DOE plans to do the following to ensure that
rulemakings are more timely:
* Make the rulemaking process more efficient. DOE plans to stagger the
start of rulemakings in order to make the best use of staff time and
resources. In the past, DOE staff worked on one rule at a time. Under
DOE's plan, staff will work on several rules simultaneously, which
should enable the staff to make better use of their time when drafts
are out for review. In addition, DOE plans to combine several products
with related technical and policy characteristics--such as water
heaters, pool heaters, and direct heating equipment--into a single
rulemaking, which should expedite the rulemaking process.
* Adhere to the deadline for closing public comments. DOE reported that
it will only consider comments received before their deadlines in its
current analysis. In the past, DOE continued to consider comments after
the closing date stated in the Federal Register and responded to those
comments with additional analysis, which delayed the issuance of the
final rulemaking.
* Simplify the analysis for each rulemaking. Senior management
officials are expected to approve the staff's analytical approach and
scope of effort earlier in the rulemaking process. In the past,
rulemaking staff conducted their analysis for a product category
without ensuring that senior management approved of their approach. As
a result, according to the plan, management often called for a
different approach when reviewing a draft analysis, which required
significantly more time. In addition, DOE plans to conduct less
exhaustive analysis for some rules, rather than conducting the same
level of analysis for all rules. If all the stakeholders agree that a
product category does not require DOE's usual complex analysis, which
would be the case when the key issues are clearly understood, DOE will
perform less extensive analysis. DOE expects this change to shorten
rulemaking times.
* Better ensure the quality of the proposed rulemaking and
accountability of all staff and reviewers. DOE plans to take four
actions toward this goal: (1) train staff in how to meet all regulatory
procedural requirements and provide readily available comprehensive
guidance in order to avoid procedural mistakes that lead to delays, (2)
contract with a national laboratory to maintain a data management
system for tracking rulemaking progress and use the resulting data to
identify problems for quicker resolution, (3) match skill levels with
tasks so that resources are used most efficiently, and (4) encourage
stakeholders to negotiate a proposed standard in return for an
expedited rulemaking process.
* Improve the document review and clearance process. DOE plans to
emphasize better document quality so that reviewers can focus their
efforts on legal and policy issues rather than on basic editorial
issues. In the past, formats, styles, and approaches of documents were
not consistent, which slowed down the review process. DOE has issued a
style guide and a template for documents to better ensure consistency.
In addition, DOE plans to have different reviewers examine the proposed
rulemaking concurrently, rather than sequentially, throughout the
rulemaking process.
* Adhere to a 36-month timetable for completing a rule. DOE will
allocate approximately 16 months for analysis, 6 months for public
review and comment, 8 months for its internal review, and 6 months for
review by the Office of Management and Budget. In the past, while DOE
had a 3-year limit for rulemaking, it virtually never issued rules
within that period.
Most panelists rated the components of DOE's catch-up plan highly and
expect that, if followed, it will likely help DOE meet its schedule for
completing rules. The panelists particularly favored the parts of DOE's
catch-up plan to reform its internal review process, use an expedited
process when stakeholders recommend standards on which they have
reached consensus, and stagger rulemakings. They also emphasized the
importance of having the Secretary of Energy and the administration
provide more management attention and priority to the program. Finally,
most agreed that certain aspects of DOE's current rulemaking process
should not be changed. Specifically, DOE should continue to perform
complete technical and economic analyses and explain its justification
for the standards it selects, include the public and stakeholders
throughout the rulemaking process, and ensure that the process and
analyses are transparent.
Despite these favorable views, some panelists expressed concern that
DOE might not have addressed what they consider the most relevant
causes of delay. For example, according to one panelist's observations,
"the delays are an internal management problem at DOE, and the
department's internal procedures are a black box. It is hard to know
with any assurance what the real problem is and whether the issue is
budget or staffing or bureaucratic procedures." According to another
panelist's review of DOE's plan, the plan "focused too much on reducing
analytical complexity and controlling stakeholder participation--
neither of which were major contributors to delays--and too little on
internal process improvements, without which delays will continue."
Although many of DOE's actions appear reasonable, we agree that DOE may
not have identified the root causes of its rulemaking delays.
Consequently, DOE risks expending resources on the wrong factors or
emphasizing minor or irrelevant causes. DOE has not developed the
program management data it needs to identify bottlenecks in the
rulemaking process. Even though DOE has work logs that compile limited
data on some parts of the rulemaking process, such as the amount of
time taken for internal reviews, the data are not detailed enough to
identify the source of delays. Furthermore, DOE does not have data on
the length of all stages of its rulemaking process. Because DOE
managers lacked data to determine causes, they said they compiled
information about possible causes during discussions with staff.
Despite the problems with their data, managers told us that they
believe that they have identified the root causes of delay.
DOE's Plan Lacks Critical Elements of Effective Project Management:
According to our work on leading performance management practices and
the work of a government regulatory process expert, management plans
should contain specific strategies to resolve problems and help
congressional decision makers understand how the agency plans to
improve its performance.[Footnote 10] Such plans also provide a basis
for accountability. While DOE's plan includes elements intended to make
the rulemaking process more efficient, it lacks two critical elements
to help ensure success of the plan--assurance of accountability and
management's allocation of adequate resources. Specifically:
* Assurance of accountability. While DOE has laid out a schedule for
clearing its rulemaking backlog for standards, its past poor
performance calls into question whether it is likely to be accountable
to the schedule in the catch-up plan. According to an Assistant General
Counsel who manages and tracks the regulatory process for the
Department of Transportation (DOT), an agency with very extensive and
effective electronic regulatory management, a successful rulemaking
process holds its management and staff accountable to interim and final
deadlines. For example, DOT publishes its deadlines on its Web site,
making the agency's actions to meet the deadlines transparent to all
stakeholders. While DOT's deadlines are target dates only, this
transparency puts pressure on each participant to carry out his or her
responsibilities on time or to provide legitimate reasons for any
delays. DOE publishes a schedule of deadlines for some standard-setting
rulemaking, including the interim deadlines, in its Semiannual
Regulatory Agenda.[Footnote 11] However, when DOE misses these
deadlines, it generally does not explain why, or how it plans to make
up the lost time when it publishes revised deadlines. The catch-up plan
does not ensure that the pattern of missing deadlines will be broken.
* Adequate resources. As far back as 1993 we reported that insufficient
resources were a primary cause of DOE's delays in updating energy
efficiency standards. This may still be the case. While the DOE plan
calls for a sixfold increase in workload, it does not increase program
staffing and contractor budgets in the same proportion. Program
managers told us they generally have had 7 to 14 staff working on
energy efficiency rules, with 7 on the job as of fiscal year 2006. They
plan to add 2 full-time staff and 1 from the Presidential Management
Fellows (PMF) program, a nonpermanent position, for an increase to 10
staff in fiscal year 2007.[Footnote 12] Similarly, from fiscal years
2000 through 2006, DOE's budget for contractor staff has averaged about
$10 million per year. For fiscal year 2007, DOE requested $12 million
for contractors, a 20 percent resource increase. DOE expects these
limited resource increases to cover a 600 percent increase in workload.
In the absence of further increasing resources, DOE said in its January
2006 report it plans to meet the increased workload by improving
productivity.
Conclusions:
DOE's program for energy efficiency standards has been plagued by
delays for decades. Although many steps in DOE's most recent January
2006 plan to address these delays appear to be reasonable, DOE does not
definitively know whether the plan will address root causes and clear
the backlog. Furthermore, DOE's plan lacks important elements of
effective management practices that would help assure success.
Consequently, it is unclear whether DOE can carry out the ambitious
schedule it has set for itself to update energy efficiency standards.
If DOE does not succeed in clearing its backlog, the nation and
consumers will continue to forgo the benefits of more energy-efficient
consumer products and industrial equipment. The loss of such benefits
will make the nation depend even more on imported energy. The
continuing commitment of DOE's top management to make standards
rulemaking a top organizational priority is essential to DOE's success
in completing all energy efficiency rules.
Recommendations for Executive Action:
To increase the likelihood that DOE's plan for updating minimum energy
efficiency standards is successfully implemented, we recommend that the
Secretary of Energy take the following actions:
* Employ the elements of leading management practices, including:
- expediting the efforts DOE has begun to establish a tracking system
to gather data that may be used to identify and address causes of
delays to more effectively manage the rulemaking process;
- ensuring that the interim goals and time frames are transparent to
all stakeholders, and that all internal stakeholders, including
reviewers and program staff, are held accountable to the time frames;
and:
- allocating adequate resources within DOE's appropriation.
Agency Comments and Our Evaluation:
We provided the Department of Energy with a draft of this report for
review and comment. Although DOE did not provide views on our
recommendations, it expressed concerns in two areas. First, regarding
our discussion of the causes of delays in setting standards, DOE stated
that it is incorrect to assign blame for delays to any one office,
official, decision, or process--and specifically to the Office of the
General Counsel. DOE stated that doing so reflects a simplistic and
largely incorrect understanding of the program's complexity. DOE noted
that the delays in setting standards have spanned administrations of
both parties, several Secretaries of Energy, and various DOE offices
and personnel; also, although DOE work logs may indicate that a
specific office has a document for a certain period of time, during
that time multiple individuals from different offices may have been
working together on the document. We disagree with DOE's
characterization of our analysis. In establishing the context for our
findings, we pointed out that the energy efficiency standards-setting
process was complex and that there were multiple reasons for delays. To
provide more definitive information on the root causes of the extensive
delays that have been experienced, we sought data from DOE and the
opinions of cognizant DOE staff. However, because DOE management could
not provide data to conclusively document the reasons for the
substantial delays, or the data provided by DOE as contained in
internal work logs were inadequate to determine causality, and because
representatives of the various DOE offices could not agree on the root
causes, we turned to a well-recognized process for identifying causes
in complex situations--a Delphi panel. Panel members were carefully,
objectively selected individuals who have been closely involved in
DOE's rulemaking process for setting standards over an extensive period
of time. They most frequently cited delays in the General Counsel
review process as cause for delays in developing energy efficiency
standards. We believe that our use of this method provided a clearer
understanding of the causes of delays than DOE has been able to
provide. As we noted earlier, in DOE's January 2006 report to Congress
and in our interviews with representatives of the offices involved in
the standard-setting process, those associated with the program
generally acknowledged that they could have done more but pointed to
others as the cause of the delays and therefore have not fully accepted
responsibility for the program's failures. Second, DOE stated that our
report did not capture many of the recent standards-setting activities
undertaken since enactment of EPAct 2005. We agree that there has been
a flurry of standards-related activity, as expressed by DOE in its
letter commenting on our report, and we have noted this in our report.
Although we recognize that DOE has taken a number of steps that should
move the program forward, it has not yet published any additional final
standards for the product and equipment categories included in the
scope of our work and our report's findings have not changed. DOE's
letter commenting on our report is presented in appendix V.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies of this report
to the Secretary of Energy and other interested parties. We will also
make copies available to others upon request. In addition, the report
will be available at no charge on the GAO Web site at
http://www.gao.gov.
If you or members of your staff have questions about this report,
please contact me at (202) 512-3841 or wellsj@gao.gov. Contact points
for our Offices of Congressional Relations and Public Affairs may be
found on the last page of this report. Key contributors to this report
are listed in appendix VI.
Signed by:
Jim Wells:
Director, Natural Resources and Environment:
[End of section]
Appendix I: Status of the Department of Energy's Model Building Code
Determinations:
States and their subdivisions, such as counties and cities, adopt
building codes that establish minimum requirements for energy-efficient
design and construction of commercial and residential buildings. The
building codes regulate components that affect the amount of energy
that a building will use, such as the building envelope, electrical
power, and lighting. These codes vary from one state to another and
sometimes within a state. They may be mandatory or voluntary codes,
either requiring builder compliance or serving as guidelines. States
and local jurisdictions may adopt model building codes developed by
nonprofit organizations, such as the American Society of Heating,
Refrigerating and Air-Conditioning Engineers' (ASHRAE) Standard 90.1
and the International Code Council's (ICC) International Energy
Conservation Code (IECC). Both ASHRAE and ICC publish codes for
commercial and residential buildings.
ASHRAE uses a consensus and public hearing process to develop its model
building codes. It involves the design community, including architects
and lighting and mechanical designers; the code enforcement community,
including building code officials and state regulatory agencies;
building owners and operators; manufacturers and utility companies; and
representatives from the Department of Energy (DOE), energy
organizations, and the academic community. ICC uses a different process
to develop its model building codes. Under its process, anyone can
propose a code, and the IECC code development committee, which includes
mostly building code officials, votes on the proposals. According to
staff at the Pacific Northwest National Laboratory (PNNL), which
monitors state building codes for DOE, although ASHRAE and ICC use
different processes to develop their model building codes, the two
organizations incorporate each other's codes into their own when they
revise them. As a result, ASHRAE and ICC codes that are revised at
about the same time generally have similar energy efficiency
provisions.
The Energy Conservation and Production Act, as amended (the Act),
directs DOE to evaluate revisions to these model building codes and
publish its determinations of whether the revision would improve energy
efficiency. For commercial buildings, defined by DOE to include
buildings other than low-rise residential buildings, the Act directs
DOE to evaluate ASHRAE's revisions to its Standard 90.1. Each time
ASHRAE revises Standard 90.1, DOE has 12 months to determine whether
the revision will improve energy efficiency in commercial buildings and
publish a notice of that determination in the Federal Register. For
residential buildings, defined by DOE as low-rise residential
buildings, the Act directs DOE to evaluate revisions the Council of
American Building Officials (CABO) makes to its Model Energy Code
(MEC), or any successor to that code. In 1995, the ICC succeeded CABO
and, as such, the IECC replaced the MEC. Each time the ICC revises the
IECC, DOE has 12 months to determine whether the revision will improve
energy efficiency in residential buildings and publish a notice of that
determination in the Federal Register. The Act does not specify what
type of revision triggers the start of the 12-month period for either
commercial or residential determinations; but, according to DOE
officials, the 12-month period is triggered by ASHRAE's and ICC's
publication of revised codes.
The Act provides that if the Secretary determines that a revision to
ASHRAE's or ICC's model building code will improve energy efficiency--
called a positive determination--states "shall" review their building
codes. For commercial model building codes, each state has 2 years
after DOE publishes a positive determination on a revised ASHRAE model
building code to certify to DOE that it has reviewed and updated the
provisions of its commercial building code in accordance with the
revised code. For residential model building codes, each state also has
2 years after a positive determination for certification, but it must
certify to DOE that it has reviewed the provisions of its residential
building code and determined whether it is appropriate to update them
to meet or exceed the revised code. Subsequent to enactment of these
provisions, the Supreme Court ruled that the constitution does not
allow Congress to require states to regulate a matter.[Footnote 13] DOE
program managers told us that DOE does not require states to review
their codes following a positive determination.[Footnote 14] Instead,
the managers told us, DOE facilitates states' efforts to adopt revised
codes. PNNL officials told us they assist DOE on all aspects of the
building code determinations and provide training and technical
assistance to state and local officials responsible for building codes.
As of August 2006, ASHRAE and ICC have published a combined total of
nine revisions to their model building codes for DOE to evaluate.
ASHRAE revised Standard 90.1 three times, and CABO revised the MEC
twice before it was incorporated into ICC in 1995. The ICC issued its
first version of the IECC in 1998 and has since revised it three times.
Deadlines for DOE's determinations have come due on all these
revisions, except the 2006 IECC revision, which will be due in January
2007.
We were asked to report on (1) whether DOE has met its statutory
deadlines for determining if states should adopt revised commercial
model building codes, (2) whether DOE has met its statutory deadlines
for determining if states should consider adopting revisions to the
residential model building code, and (3) whether and, if so, to what
extent DOE tracks states' building codes. This appendix contains
information about these objectives.
To address the commercial and residential building code determinations
DOE has completed, we reviewed the requirements and deadlines for
building code determinations contained in statute and DOE
determinations published in the Federal Register. We also interviewed
and obtained documents from officials at DOE, PNNL, ASHRAE, ICC, and
the American Council for an Energy Efficient Economy. Since DOE program
officials use ASHRAE's and ICC's revision publication dates as the
trigger date for DOE's deadlines for making determinations, we used
these dates for our analysis. We did not attempt to determine why DOE
might miss deadlines for determinations or why individual states adopt
building codes.
DOE Has Completed One of Three Commercial Building Code Determinations:
DOE has completed only one of three commercial model building code
determinations that have come due. DOE issued a positive determination
for the first of three revisions to ASHRAE's Standard 90.1 about 17
months after the deadline. As of December 2006, DOE had not completed
determinations for either of the remaining revisions and has decided to
combine them. Table 5 provides details about the revisions' publication
dates, the deadlines for the determinations, and the status of DOE's
reviews.
Table 5: Status of DOE's Review of ASHRAE Standard 90.1 Revisions:
ASHRAE revision: ASHRAE Standard 90.1-1999;
Revision publication date: January 28, 2000;
DOE determination due date: January 28, 2001;
DOE determination issue date: July 15, 2002;
DOE determination status: Completed over 17 months late;
State certification due date: July 15, 2004.
ASHRAE revision: ASHRAE Standard 90.1-2001;
Revision publication date: November 7, 2001;
DOE determination due date: November 7, 2002;
DOE determination issue date: None;
DOE determination status: Incomplete and over 4 years late;
State certification due date: 2 years after DOE issues the
determination.
ASHRAE revision: ASHRAE Standard 90.1-2004;
Revision publication date: December 21, 2004;
DOE determination due date: December, 21, 2005;
DOE determination issue date: None;
DOE determination status: Incomplete and over 1 year late;
State certification due date: 2 years after DOE issues the
determination.
Sources: GAO analysis of ASHRAE, DOE, and Federal Register data.
[End of table]
DOE Has Completed Four of Five Residential Building Code
Determinations:
DOE has completed four of five residential building code determinations
that have come due. DOE issued determinations for all of these four
CABO/ICC revisions to the MEC/IECC and said the revisions would improve
energy efficiency. DOE completed its first determination on time and
completed the next three from 1 month to over 1 year late. As of
December 2006, DOE had not yet completed the determination for the
fifth IECC revision. Table 6 provides details about the revisions'
publication dates, the due dates for the determinations, and the status
of DOE's reviews.
Table 6: Status of DOE's Review of MEC and IECC Revisions:
CABO/ICC revision: 1993 MEC;
Revision publication date: October 21, 1993;
DOE determination due date: October 21, 1994;
DOE determination issue date: July 15, 1994;
DOE determination status: Completed over 3 months early;
State certification due date: July 15, 1996.
CABO/ICC revision: 1995 MEC;
Revision publication date: April 12, 1995;
DOE determination due date: April 12, 1996;
DOE determination issue date: December 6, 1996;
DOE determination status: Completed over 7 months late;
State certification due date: December 6, 1998.
CABO/ICC revision: 1998 IECC;
Revision publication date: May 13, 1998;
DOE determination due date: May13, 1999;
DOE determination issue date: January 10, 2001;
DOE determination status: Completed over 1 year late;
State certification due date: January 10, 2003.
CABO/ICC revision: 2000 IECC;
Revision publication date: December 30, 1999;
DOE determination due date: December 30, 2000;
DOE determination issue date: January 10, 2001;
DOE determination status: Completed less than 1 month late;
State certification due date: January 10, 2003.
CABO/ICC revision: 2003 IECC;
Revision publication date: January 27, 2003;
DOE determination due date: January 27, 2004;
DOE determination issue date: None;
DOE determination status: Incomplete, 2 years and 11 months late;
State certification due date: 2 years after DOE issues the
determination.
CABO/ICC revision: 2006 IECC;
Revision publication date: January 15, 2006;
DOE determination due date: January 15, 2007;
DOE determination issue date: None;
DOE determination status: Not yet due;
State certification due date: 2 years after DOE issues the
determination.
Sources: GAO analysis of ASHRAE, DOE, and Federal Register data.
[End of table]
DOE Tracks States' Building Codes:
DOE and PNNL staff track states' commercial and residential building
codes and publish information about them on DOE's Web site. PNNL staff
told us they e-mail state officials twice a year to confirm that DOE
has the most current information about the states' commercial and
residential building codes and to obtain any updated information.
Additionally, they are in frequent contact with the states and
continually update their information on states' building codes. DOE's
Web site reports the type of code adopted by each state and whether
builder compliance with the code is voluntary or mandatory, and
provides limited information about the stringency of the code, which
PNNL staff determines by analyzing the state-provided information. For
example, DOE's Web site reports that Florida has adopted mandatory
codes for both commercial and residential buildings and that the
commercial building code is more stringent than the ASHRAE 90.1 2001,
and the residential building code is more stringent than the 2000 IECC.
The complete list of state commercial and residential building codes
for energy efficiency is available at [Hyperlink,
http://www.energycodes.gov/implement/state_codes/state_status_full.php].
Although the information published on DOE's Web site compares the
stringency of state codes with ASHRAE's and ICC's model building codes,
PNNL staff told us the information should not be used to judge the
stringency of state codes relative to the ASHRAE's and ICC codes for
which DOE has made a determination. The staff explained that while more
recent state codes are generally more energy efficient than older state
codes, there are other factors that affect their stringency. For
example, states may adopt DOE's latest determination on ASHRAE's and
ICC's codes as their state building codes, but may amend them to be
weaker or stronger. For example, according to PNNL staff, Georgia
adopted the latest DOE residential determination but amended to it to
be more similar to prior DOE determinations. In other cases, the
changes to a revised code may not affect all states equally; therefore,
while a state may not have adopted the most recent revision, the
changes in that revision may not have applied to that state anyway. For
example, PNNL staff told us that, although Massachusetts did not adopt
the 2000 IECC, the differences between the 2000 IECC and the 1995 MEC,
which Massachusetts did adopt, did not apply to that state. Therefore,
PNNL staff consider Massachusetts's code to be as stringent as the 2000
IECC. Furthermore, PNNL staff told us that, while some states have
adopted model building codes that are more recent than those for which
DOE has issued a determination, these codes should not be assumed to be
more stringent than those for which DOE has made a determination until
PNNL makes a comparable technical analysis. PNNL staff told us that
they have the information and technical capability to compare the
stringency of all the state codes with those for which DOE has made a
determination. However, they said they typically analyze building codes
on a state-by-state basis only at DOE's request and that they do not
currently have a comprehensive analysis of how all states' codes
compare to DOE's latest determinations. As of September 2006, DOE had
not directed PNNL to complete a comprehensive analysis. DOE officials
told us that DOE focuses on facilitating states' efforts to adopt
building codes rather than penalizing them for not meeting DOE building
code determinations and, as such, they do not believe a comprehensive
analysis of which states' building codes are as stringent as those for
which DOE has made a positive determination justifies the resources it
would require.
[End of section]
Appendix II: Objectives, Scope, and Method:
Our objectives were to examine (1) the extent to which DOE has met its
statutory obligations to issue rules on minimum energy efficiency
standards for consumer products and industrial equipment and (2)
whether DOE's plans are likely to clear the backlog of required
rulemakings and whether these plans could be improved.
To address these objectives, we reviewed the statutory requirements and
deadlines for developing energy efficiency standards for consumer
products and industrial equipment, program information available on
DOE's Web site, information provided by program staff, and DOE's
January 2006 and August 2006 reports to Congress. For the purposes of
our review, we did not include the 17 additional product categories
that the Energy Policy Act of 2005 added to DOE's responsibilities,
including the one that came due in August 2006. Although DOE is also
required to issue rules regarding standards for plumbing products, we
excluded them from this report because they primarily involve
conserving water, rather than energy. Furthermore, we did not evaluate
the merit of the standards DOE has issued.
We conducted interviews with DOE program officials; officials of the
Office of General Counsel; officials at Lawrence Berkeley National
Laboratory, the National Energy Technology Laboratory, and the National
Institute of Standards and Technology; and a regulatory process expert
at the Department of Transportation. We also interviewed officials at
the American Council for an Energy Efficient Economy; the Appliance
Standards Awareness Project; the American Society of Heating,
Refrigerating and Air-Conditioning Engineers; the California Energy
Commission; Pacific Gas and Electric Company; and Natural Resources
Canada; and obtained documentation as needed. We analyzed data on DOE's
rulemaking process, estimates of national energy savings from energy
efficiency standards, and program resources.
In addition, we used a Web-based, modified Delphi method to obtain
views from a panel of 33 stakeholders on the causes and effects of
delays in setting standards and on proposed solutions to these delays.
The Delphi method is a systematic process for obtaining individuals'
views on a question or problem of interest and, if possible, obtaining
consensus. Our modified Delphi method had two phases. Phase 1 consisted
of a series of open-ended questions concerning DOE's delays. In Phase
2, panel members rated the significance or priority of the causes of
delays, effects of delays, and solutions to delays that they had
identified in phase 1.
We selected the panel members from a group of stakeholders who were
both widely recognized as knowledgeable about one or more key aspects
of energy efficiency standards, and who were involved or familiar with
DOE's rulemaking process. The group included officials from federal and
state agencies, manufacturers, trade associations, energy efficiency
advocacy groups, consumer interest groups, utilities, and utility
associations, some of whom were previously employed by DOE as
participants in the rulemaking process. We used a variety of methods to
determine that the panelists we selected had the expertise necessary to
participate in the panel. A list of the 33 panel members is included in
appendix IV. To report panel results, when two-thirds or more of the
panel agreed, we use the term "most." When one-half of more of the
panel agreed, we use the term "the majority."
We conducted our review from June 2005 through January 2007 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix III: Rulemakings and Delays for Consumer Products and
Industrial Equipment with Deadlines That Have Passed:
Consumer products.
Consumer product or industrial equipment category: Clothes washers;
First rule: Due date: 01/01/90;
First rule: Actual date: 05/14/91;
First rule: Years delayed[A]: 1.4;
Second rule: Due date: 01/ 01/95;
Second rule: Actual date: 01/12/01;
Second rule: Years delayed[A]: 6.0.
Consumer product or industrial equipment category: Refrigerators,
refrigerator-freezers, and freezers;
First rule: Due date: 07/01/89;
First rule: Actual date: 11/17/89;
First rule: Years delayed[A]: 0.4;
Second rule: Due date: 07/01/94;
Second rule: Actual date: 04/ 28/97;
Second rule: Years delayed[A]: 2.8.
Consumer product or industrial equipment category: Small furnaces;
First rule: Due date: 01/01/89;
First rule: Actual date: 11/17/89;
First rule: Years delayed[A]: 0.9;
Second rule: Due date: Included in "Furnaces" deadline[B];
Second rule: Actual date: N/A;
Second rule: Years delayed[A]: N/A.
Consumer product or industrial equipment category: Central air
conditioners and heat pumps;
First rule: Due date: 01/01/94;
First rule: Actual date: 01/22/01;
First rule: Years delayed[A]: 7.1;
Second rule: Due date: 01/01/01;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 6.0.
Consumer product or industrial equipment category: Clothes dryers;
First rule: Due date: 01/01/90;
First rule: Actual date: 05/14/91;
First rule: Years delayed[A]: 1.4;
Second rule: Due date: 01/ 01/95;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 12.0.
Consumer product or industrial equipment category: Dishwashers;
First rule: Due date: 01/01/90;
First rule: Actual date: 05/14/91;
First rule: Years delayed[A]: 1.4;
Second rule: Due date: 01/01/95;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 12.0.
Consumer product or industrial equipment category: Fluorescent lamp
ballasts;
First rule: Due date: 01/01/92;
First rule: Actual date: 09/ 19/00;
First rule: Years delayed[A]: 8.7;
Second rule: Due date: 01/01/97;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 10.0.
Consumer product or industrial equipment category: Room air
conditioners;
First rule: Due date: 01/01/92;
First rule: Actual date: 09/24/97;
First rule: Years delayed[A]: 5.7;
Second rule: Due date: 01/01/97;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 10.0.
Consumer product or industrial equipment category: Water heaters;
First rule: Due date: 01/01/92;
First rule: Actual date: 01/17/01;
First rule: Years delayed[A]: 9.0;
Second rule: Due date: 01/01/00;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 7.0.
Consumer product or industrial equipment category: Direct heating
equipment;
First rule: Due date: 01/01/92;
First rule: Actual date: Overdue;
First rule: Years delayed[A]: 15.0;
Second rule: Due date: 01/01/00;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 7.0.
Consumer product or industrial equipment category: Furnaces;
First rule: Due date: 01/01/94;
First rule: Actual date: Overdue;
First rule: Years delayed[A]: 13.0;
Second rule: Due date: 01/01/07;
Second rule: Actual date: Not due;
Second rule: Years delayed[A]: Not due.
Consumer product or industrial equipment category: General service
fluorescent lamps and incandescent reflector lamps;
First rule: Due date: 04/24/97;
First rule: Actual date: Overdue;
First rule: Years delayed[A]: 9.7;
Second rule: Due date: 04/24/02;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 4.7.
Consumer product or industrial equipment category: Additional general
service fluorescent and general service incandescent lamps;
First rule: Due date: 11/15/98;
First rule: Actual date: Overdue;
First rule: Years delayed[A]: 8.1;
Second rule: Due date: Included in general service fluorescent lamps
and incandescent reflector lamps deadline[C];
Second rule: Actual date: N/A;
Second rule: Years delayed[A]: N/A.
Consumer product or industrial equipment category: Kitchen ranges and
ovens;
First rule: Due date: 01/01/92;
First rule: Actual date: Overdue;
First rule: Years delayed[A]: 15.0;
Second rule: Due date: 01/01/97;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 10.0.
Consumer product or industrial equipment category: Mobile home
furnaces;
First rule: Due date: 01/01/92;
First rule: Actual date: Overdue;
First rule: Years delayed[A]: 15.0;
Second rule: Due date: Included in Furnaces deadline[B];
Second rule: Actual date: N/A;
Second rule: Years delayed[A]: N/A.
Consumer product or industrial equipment category: Pool heaters;
First rule: Due date: 01/01/92;
First rule: Actual date: Overdue;
First rule: Years delayed[A]: 15.0;
Second rule: Due date: 01/01/00;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 7.0.
Industrial equipment.
Consumer product or industrial equipment category: Electric motors-not
requiring national certification;
First rule: Due date: 10/24/99;
First rule: Actual date: Overdue;
First rule: Years delayed[A]: 7.2;
Second rule: Due date: 10/24/04;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 2.2.
Consumer product or industrial equipment category: Electric motors-
requiring national certification;
First rule: Due date: 10/24/01;
First rule: Actual date: Overdue;
First rule: Years delayed[A]: 5.2;
Second rule: Due date: 10/24/06;
Second rule: Actual date: Overdue;
Second rule: Years delayed[A]: 0.2.
Consumer product or industrial equipment category: Distribution
transformers;
First rule: Due date: 10/24/96[D];
First rule: Actual date: Overdue;
First rule: Years delayed[A]: 10.2;
Second rule: Due date: N/A;
Second rule: Actual date: N/A;
Second rule: Years delayed[A]: N/A.
Consumer product or industrial equipment category: Small electric
motors;
First rule: Due date: 10/24/96[D];
First rule: Actual date: Overdue;
First rule: Years delayed[A]: 10.2;
Second rule: Due date: N/A;
Second rule: Actual date: N/A;
Second rule: Years delayed[A]: N/A.
Source: GAO analysis of DOE data.
[A] Calculations for years delayed for overdue rules are as of December
31, 2006.
[B] Subsequent updates to standards for the category called Furnaces
are intended to cover updates for mobile home furnaces and small
furnaces and are included in the Furnaces deadlines.
[C] Subsequent updates to standards for the category called "General
service fluorescent lamps and incandescent reflector lamps" are
intended to cover updates for "Additional general service fluorescent
lamps and incandescent reflector lamps" and are included in the
Furnaces deadlines.
[D] Deadline for setting initial standard following determination of
feasibility (18 months after publication of testing requirements.)
[End of table]
[End of section]
Appendix IV: Participants in Energy Efficiency Standards Delphi Panel:
Karim Amrane:
Air-Conditioning and Refrigeration Institute:
Donald Brundage:
Southern Company:
David Calabrese:
Association of Home Appliance Manufacturers:
Thomas Catania:
Whirlpool Corporation:
Sue Coakley:
Northeast Energy Efficiency Partnerships:
James Crawford Trane and American Standard:
Andrew deLaski:
Appliance Standards Awareness Project:
Thomas Eckman:
Northwest Power and Conservation Council:
Andrew Fanara:
Environmental Protection Agency:
Gary Fernstrom:
Pacific Gas and Electric:
David Goldstein:
Natural Resources Defense Council:
Mel Hall-Crawford:
Consumer Federation of America:
Carl Hiller:
Applied Energy Technology:
John Holt:
National Rural Electric Cooperative Association:
Earl Jones:
GE Consumer & Industrial:
Joseph Mattingly:
Association of Appliance & Equipment Manufacturers:
James McMahon:
Lawrence Berkeley National Laboratory:
Deborah Miller:
ICF Consulting:
Harry Misuriello:
Alliance to Save Energy:
Jim Mullen:
Lennox International Inc.
Steven Nadel:
American Council for an Energy-Efficient Economy:
Kyle Pitsor:
National Electrical Manufacturers Association:
James Ranfone:
American Gas Association:
Priscilla Richards:
New York State Energy Research and Development Authority:
Michael Rivest:
Navigant Consulting, Inc.
Steve Rosenstock:
Edison Electric Institute:
Michael Sherman:
Massachusetts Division of Energy Resources:
Doug Smith:
Van Ness Feldman:
Sriram Somasundaram:
Pacific Northwest National Laboratory:
David Steiner:
Maytag Corporation:
Charlie Stephens:
Oregon Department of Energy:
Tim Stout:
National Grid USA:
John Wilson:
California Energy Commission:
[End of section]
Appendix V: Comments from the Department of Energy:
Department of Energy:
Washington, DC 20585:
January 12, 2007:
Mr. Jim Wells:
Director, Natural Resources and Environment:
Government Accountability Office:
441 G Street, N.W.
Washington, DC 20548:
Dear Mr. Wells:
Thank you for the opportunity to comment on the Draft Report, Energy
Efficiency: Long-Standing Problems with DOE's Program for Setting
Efficiency Standards Continue to Result in Forgone Energy Savings (GAO-
07-42).
We commend the Government Accountability Office (GAO) for the work it
has done to gather input from many individuals and organizations in
preparing its draft report. The report details the long history of the
Department of Energy's program relating to energy efficiency for
consumer appliances and industrial equipment, and describes delays that
have occurred in the issuance of efficiency standards since the
program's inception in 1975.
It is important to recognize that past delays were the result of many
different factors over the course of many years. The delays have
spanned Administrations of both parties, several Secretaries of Energy,
and various Departmental offices and personnel. As a result, it is
simply incorrect to assign sole or even primary blame for these delays
to any particular office, official, decision, or process. The review
panel used by the GAO apparently attempted to assign primary blame for
the program's delays to the Department's Office of the General Counsel,
but any attempt to do so reflects an overly simplistic and largely
incorrect understanding of the program's complexity and the
interrelated work that is performed by different Departmental offices,
individuals, and contractors. Departmental offices work collaboratively
on this program. Even though certain office work logs may reflect that
a specific office has possession of a certain document over a
particular period of time, it is often the case that during this period
of time, multiple different individuals in different individual offices
are working together to identify, address and resolve issues associated
with the document.
Moreover, the report does not capture the many recent steps forward and
the progress made by this program particularly since enactment of the
Energy Policy Act of 2005 (EPACT 2005). Secretary Bodman has made this
program a personal priority and has produced significant results in the
last 18 months. Additionally, the benefits that will be achieved by
appliance standards put in place between 1988 and 2007 are estimated to
add up to a savings of 55.4 quads and $133.3 billion net present value
through the year 2030.
Our plans and our commitment are well documented. On January 312006,
Department submitted to Congress our first Energy Conservation
Standards Activities report in accordance with section 141 of EPACT
2005. That report covered the history of the program but more
importantly set forth an action plan for the future. On August 8, 2006,
the Department submitted its second report detailing the progress made
in implementing that plan. Those reports confirm that the Department's
accomplishments demonstrate the serious commitment that the Department
has made to fulfill its obligations.
Rulemaking activities that have been completed since the EPACT 2005 was
enacted:
* Ceiling Fan Light Kits - 72 FR 1270 - January 11, 2007:
* Residential Clothes Washers Petition for Exemption - 71 FR 78157 -
December 28, 2006:
* Test Procedures Prescribed in EPACT 2005 requiring clarification and
codification - 71 FR 71340 - December 8, 2006:
* Small Electric Motors Determination - 71 FR 38799 - July 10, 2006:
* Test Procedures for Distribution Transformers - 71 FR 24972 - April
27, 2006:
* Schedule Setting Public Meeting - 70 FR 61395 - October 24, 2005:
* Codification of energy conservation standards prescribed in EPACT
2005 - 70 FR 60407 - October 18, 2005:
* Test Procedures for Central Air Conditioners and Heat Pumps - 70 FR
59122 - October 11, 2005:
We also have made significant progress on the following rulemakings
that were previously initiated and that we plan to complete this year:
* Furnaces and Boilers - Final Rule Scheduled for September 2007:
* Distribution Transformers - Final Rule Scheduled for September 2007:
* Commercial Heating, Air-Conditioning and Water Heating Equipment -
Final Rule Scheduled for February 2007:
* Test Procedures for Residential Air Conditioners and Heat Pumps -
Final Rule Scheduled for September 2007:
Additional appliance rulemaking activities during this time included:
* Test Procedures for Distribution Transformers Technical Amendment -
71 FR 60662 - October 16, 2006:
* Test Procedures Prescribed in EPACT 2005 requiring clarification and
codification PROPOSED RULE - 71 FR 42178 - July 25, 2006:
* Test Procedures for Central Air Conditioners and Heat Pumps Proposed
Rule - 71 FR 41320 - July 20, 2006:
* Covered Products Household Definition - PROPOSED RULE 71 FR 26275 -
May 4, 2006:
* Distribution Transformers Test Procedures Information Collection
Notice - 71 FR 24844 - April 27, 2006:
* Commercial Heating, Air Conditioning and Water Heating Equipment
Notice and Comment Period - 71 FR 12634 - March 13, 2006:
* Residential Clothes Washers Petition for Exemption - 71 FR 6022 -
February 6, 2006:
Following is a listing of notices regarding appliance standards
rulemakings that have been issued since the report was submitted to
Congress in January 2006:
* Battery Chargers and External Power Supplies - 71 FR 78389 - December
29, 2006:
* Residential Water Heaters - 71 FR 67825 - November 24, 2006:
* Direct Heating Equipment - 71 FR 67825 - November 24, 2006:
* Pool Heaters - 71 FR 67825 - November 24, 2006:
* Refrigerated Bottle or Canned Beverage Vending Machines Test
Procedures - 71 FR 58308 - October 3, 2006:
* Refrigerated Bottle or Canned Beverage Vending Machines Standards -
71 FR 36715 - June 28, 2006:
* Incandescent Reflector Lamps - 71 FR 30834 - May 31, 2006:
* Fluorescent Lamps - 71 FR 30834 - May 31, 2006:
* Incandescent General Service Lamps - 71 FR 30834 - May 31, 2006:
* Ice-Cream Freezers, Self-Contained Commercial Refrigerators,
Freezers, and Refrigerator-Freezers without doors, and remote-
condensing commercial refrigerators, freezers and refrigerator-
freezers - 71 FR 23876 - April 25, 2006:
* Residential Dishwashers - 71 FR 15059 - March 27, 2006:
* Ranges and Ovens and Microwave Ovens - 71 FR 15059 - March 27, 2006:
* Residential Dehumidifiers - 71 FR 15059 - March 27, 2006:
* Commercial Clothes Washers - 71 FR 15059 - March 27, 2006:
There are many other standards related accomplishments that we could
list but we simply want to make the point that the Department is
aggressively developing energy conservation standards. That fact was
not evident in GAO's draft report and should be of interest to members
of Congress and also to the taxpayers supporting this program.
Additionally, the Department entered into a consent decree with
multiple plaintiffs that sets forth a schedule for completing the
backlog of energy efficiency standards for appliances; that schedule is
commensurate with the schedule in the Department's January 2006 Report
to Congress. The United States District Court for the Southern District
of New York entered that consent order on November 6, 2006.
We have met all of the commitments that have come due since our first
report containing our action plan was submitted to Congress on January
31, 2006. The draft GAO report stated that "most panelists rated the
components of DOE's plan highly and expect that it will help DOE meet
the deadlines of its catch-up schedule if these actions are
implemented." The combined increase in rulemaking activities and the
performance record since the report was submitted should emphatically
answer any question you may have regarding the Departments commitment
and abilities.
If you have any questions concerning DOE's comments on this Draft
Report, please contact me at (202) 586-9220.
Sincerely,
Signed by:
Alexander A. Karsner:
Assistant Secretary:
Energy Efficiency and Renewable Energy:
[End of section]
Appendix VI: GAO Contact and Staff Acknowledgments:
GAO Contact:
Jim Wells, (202) 512-3841, wellsj@gao.gov:
Staff Acknowledgments:
In addition to the individual named above, Karla Springer, Assistant
Director; Tim Bober; Kevin Bray; Valerie Colaiaco; Janelle Knox; Megan
McNeely; Lynn Musser; Alison O'Neill; Don Pless; Bill Roach; Frank
Rusco; Ilga Semeiks; and Carol Herrnstadt Shulman made key
contributions to this report.
FOOTNOTES
[1] DOE's energy efficiency standards program is separate from the
Energy Star program, which is a joint DOE-Environmental Protection
Agency voluntary labeling program that identifies and promotes the
products that meet the most efficient energy conservation standards.
[2] GAO, Energy Conservation: Appliance Standards and Labeling Programs
Can Be Improved, GAO/RCED-93-102 (Washington, D.C.: March 1993).
[3] Department of Energy, Energy Conservation Standards Activities.
(Washington, D.C.: Jan. 31, 2006).
[4] The second report, released in August 2006, reiterated the catch-up
plan and reported on DOE's actions toward clearing the backlog. These
actions include making progress on and issuing rules related to the
standards-setting process, but none established new standards for the
products and equipment included in the scope of this report.
[5] This reported backlog did not include an additional 17 product
categories added by EPAct 2005 to DOE's mandate for setting energy
efficiency standards, 9 of which have deadlines for DOE rulemakings.
These additional responsibilities were not part of our review.
[6] California has set standards for products not covered under federal
law, such as commercial clothes washers and external power supplies for
electronic devices such as laptop computers, mobile phones, printers,
and digital cameras.
[7] Before DOE published proposed distribution transformer standards,
the Energy Policy Act of 2005 established energy conservation standards
for low-voltage, dry-type distribution transformers. Pub. L. No. 109-58
§135(c)(3) (codified at 42 U.S.C. § 6295(v)). Consequently, DOE's
proposed standards do not apply to these types. 71 Fed. Reg. 44,356,
44,357 (Aug. 4, 2006).
[8] A megawatt is a measure of a flow of electricity; 1,000 megawatts
is a sufficient flow of electricity to power about 750,000 homes.
[9] Procedures for Consideration of New or Revised Energy Conservation
Standards for Consumer Products, Final Rule, 61 Fed. Reg. 36,973 (July
15, 1996).
[10] GAO, Agencies' Annual Performance Plans Under the Results Act,
GAO/GGD/AIMD-10.1.18 (Washington, D.C.: February 1998).
[11] The Unified Agenda (also known as the Semiannual Regulatory
Agenda), published twice a year in the Federal Register, summarizes the
rules and proposed rules that each federal agency expects to issue
during the next 6 months.
[12] The PMF program is a 2-year paid government fellowship sponsored
by the Office of Personnel Management for recent graduate students who
seek a professional experience in the U.S. government.
[13] New York v. United States, 505 U.S. 144 (1992) (holding that a
provision of the Low-Level Radioactive Waste Policy Act, requiring
states to take ownership of waste or regulate according to instructions
of Congress, was invalid). The court also stated that Congress may hold
out incentives to the states as a means of encouraging them to adopt
suggested regulatory schemes and offer states the choice of regulating
an activity according to federal standards or having state law
preempted by federal regulation.
[14] A DOE staff member noted that the Energy Conservation and
Production Act, as amended, does not contain a provision authorizing
DOE to enforce these provisions.
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