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56–266 PDF 2010

S. HRG. 111–402 

ENERGY EFFICIENCY OF APPLIANCES 

HEARING 

BEFORE THE

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

ON

S. 1696 S. 3054 

S. 2908 S. 3059 

MARCH 10, 2010 

( 

Printed for the use of the 

Committee on Energy and Natural Resources 
(II) 

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

JEFF BINGAMAN, New Mexico, Chairman 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

MARIA CANTWELL, Washington 

ROBERT MENENDEZ, New Jersey 

BLANCHE L. LINCOLN, Arkansas 

BERNARD SANDERS, Vermont 

EVAN BAYH, Indiana 

DEBBIE STABENOW, Michigan 

MARK UDALL, Colorado 

JEANNE SHAHEEN, New Hampshire 

LISA MURKOWSKI, Alaska 

RICHARD BURR, North Carolina 

JOHN BARRASSO, Wyoming 

SAM BROWNBACK, Kansas 

JAMES E. RISCH, Idaho 

JOHN MCCAIN, Arizona 

ROBERT F. BENNETT, Utah 

JIM BUNNING, Kentucky 

JEFF SESSIONS, Alabama 

BOB CORKER, Tennessee 

ROBERT M. SIMON, Staff Director 

SAM E. FOWLER, Chief Counsel 

MCKIE CAMPBELL, Republican Staff Director 

KAREN K. BILLUPS, Republican Chief Counsel 
(III) 

C O N T E N T S 

STATEMENTS 

Page 

Bingaman, Hon. Jeff, U.S. Senator From New Mexico ........................................ 1 

Hogan, Kathleen, Deputy Assistant Secretary, Energy Efficiency, Office of 

Energy Efficiency and Renewable Energy, Department of Energy ................. 2 

McGuire, Joseph M., President, Association of Home Appliance Manufacturers 

(AHAM) ................................................................................................................. 9 

Nadel, Steven, Executive Director, American Council for an Energy-Efficient 

Economy (ACEEE) ............................................................................................... 16 

Pitsor, Kyle, Vice President, Government Relations, National Electrical Manufacturers Association (NEMA) .......................................................................... 35 

Yurek, Stephen, President and CEO, Air-Conditioning, Heating, and Refrigeration Institute (AHRI) ...................................................................................... 30 

APPENDIXES 

APPENDIX I 

Responses to additional questions .......................................................................... 51 

APPENDIX II 

Additional material submitted for the record ........................................................ 61 

(1) 

ENERGY EFFICIENCY OF APPLIANCES 

WEDNESDAY, MARCH 10, 2010 

U.S. SENATE, COMMITTEE ON ENERGY AND NATURAL RESOURCES, Washington, DC. 

The committee met, pursuant to notice, at 9:34 a.m. in room SD– 

366, Dirksen Senate Office Building, Hon. Jeff Bingaman, chairman, presiding. 

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. 

SENATOR FROM NEW MEXICO 

The CHAIRMAN. OK, why don’t we get started here? Thank you 

all very much for coming. Senator Murkowski will be here shortly 

and said that it was acceptable for us to proceed. I know, I believe 

Senator Menendez is going to try to arrive, and perhaps some of 

our other members. 

Today’s hearing is on 4 bills designed to strengthen the Department of Energy’s appliance efficiency program—S. 1696, the Green 

Gaming Act of 2009; S. 2908, the Water Heater Rating Improvement Act of 2009; S. 3054, a bill to establish efficiency standards 

for water dispensers, food holding cabinets, and electric spas; and 

S. 3059, the National Energy Efficiency Enhancement Act of 2010. 

Energy efficiency continues to be the most cost-effective strategy 

for strengthening our Nation’s economic and energy security and 

for reducing the environmental impacts of energy production. I 

should have mentioned this to Al before, but I was at a conference 

at MIT this weekend that they had there in Boston on energy, and 

they had the head of energy information, the international energy 

agency out of Paris, and he made an interesting point. 

He said that their projections are that to reduce greenhouse gas 

emissions to where they need to be, 53 percent of that has to come 

from energy efficiency improvements. So, clearly, energy efficiency 

is the lion’s share of the solution to that problem, at least from 

their perspective. 

By 2020, the program that the Department of Energy has in 

place related to appliance standards will have reduced national 

electric demand 12 percent below what it otherwise would be, all 

the time saving American businesses and families billions of dollars. The bills being considered this morning would enhance the 

standards program by establishing or updating efficiency standards 

for major energy-consuming products, such as air conditioners, furnaces, outdoor lighting, as well as several smaller product classes. 

S. 3059 would also make several improvements to program operations. 
2 

By 2030, it is estimated the enhancements proposed in these bills 

would displace electricity equivalent to the output of 14 coal-fired 

power plants, reduce carbon dioxide emissions by 39 million metric 

tons, equivalent to taking 7 million cars off the road for a year, and 

saving consumers an estimated $7 billion in reduced energy costs, 

creating tens of thousands of jobs as these savings are spent or invested in other ways. 

So we thank the witnesses and others in the business and energy 

efficiency communities for their commitment and their tenacity in 

negotiating the agreements that are included in these bills. Our 

Nation continues to face tremendous economic and energy security 

challenges. At a time when solutions may be frustrated by political 

factors, your working together for the common good is inspiring. 

I also want to thank Senator Murkowski and several of our colleagues for the support they have provided and their staffs have 

provided in this bipartisan effort. 

I look forward to hearing from all the witnesses and working to 

see these enhancements become part of the legislation that the 

Senate considers and passes this year. So, with that short introduction, let me introduce our witnesses. 

We have Kathleen Hogan, who is the Deputy Assistant Secretary 

for Energy Efficiency in the Department of Energy. Thank you for 

being here. 

Steve Nadel, who is the executive director of the American Council for an Energy-Efficient Economy. Thank you for being here. 

Joseph McGuire, president of the Association of Home Appliance 

Manufacturers. Thank you for your involvement in all of this. 

Stephen Yurek, who is president and chief executive officer with 

the Air Conditioning, Heating, and Refrigeration Institute in Arlington. Thank you for being here. 

Kyle Pitsor, who is vice president for Government relations with 

the National Electrical Manufacturers Association. Thank you for 

being here. 

Ms. Hogan, why don’t you go right ahead? If each of you could 

give us about 5 minutes, and we will just go across the table here. 

Give us about 5 minutes of the main points we need to understand, 

reflecting your perspective on these bills. Then we may have some 

questions. 

Ms. Hogan, go right ahead. 

STATEMENT OF KATHLEEN HOGAN, DEPUTY ASSISTANT SECRETARY, ENERGY EFFICIENCY, OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY, DEPARTMENT OF ENERGY 

Ms. HOGAN. Good morning, Chairman Bingaman, Ranking Member Murkowski, and others here. Thank you for the opportunity to 

appear today and to discuss the appliance standards and energy efficiency. 

As you all know and as Secretary Chu reminds us, energy efficiency is not just the low-hanging fruit, it is the fruit already on 

the ground. It is the fastest, lowest-risk, most economical way to 

address climate change and energy security concerns as well as 

build jobs. Many of the necessary technologies and know-how are 

available now. 
3 

Appliance standards as a policy are a highly cost-effective approach for advancing energy efficiency, and really, some of the 

greatest opportunities for energy savings are in the appliances and 

products that consumers and businesses use every day. 

Now, I have submitted some specific comments for the record on 

the 4 bills that are the subject of today’s hearing, and I certainly 

commend the Senators and the committee staffers who have 

worked very hard on these bills in gaining industry and advocate 

consensus on much of the legislation. 

Now I would like to take this opportunity to discuss the department’s Appliance and Commercial Equipment Standards Program. 

As you know, DOE has been implementing this program since its 

Federal establishment in 1975, and, as amended, the appliance 

standards requirements are really among the broadest of any country in the world. I think it is also not news that DOE has received 

criticism in the past for its implementation of this program, for 

missing deadlines for updating standards and establishing rules for 

specific products. But those issues have been addressed. 

In November 2006, the department entered into a consent decree 

under which it agreed to publish the final rules for 22 product categories by specific deadlines, the latest of which is June 30, 2011. 

This represented a 6 fold increase in appliance standard activities 

at the Department of Energy. 

Since this consent decree, the department has made significant 

progress meeting these requirements. We have met the deadlines 

for 13 rulemakings that were required to date, and we expect to 

complete the remaining 8 rulemakings on time by June 2011. 

This administration is also bringing a renewed commitment to a 

strong appliance standards program. The President issued a memo 

to Secretary Chu in February of 2009 requesting that DOE take all 

necessary steps to finalize the legally required energy conservation 

standard rulemakings as expeditiously as possible and to meet all 

applicable deadlines. 

Between February and August last year, DOE completed all 5 

rulemakings highlighted in the President’s memo. These 

rulemakings were completed ahead of schedule, and over the next 

30 years, they will save Americans an estimated $250 billion to 

$300 billion and avoid the need for 15 power plants. In the last 3 

months, DOE completed standards for commercial clothes washers, 

and small electric motors on schedule. We are now on schedule to 

complete rulemakings on residential water heaters, direct heating 

equipment, and gas pool heaters by the end of this month. 

As we look ahead to the next 3 years, the department will revise 

standards for another 14 product categories, including residential 

air conditioners, refrigerators, clothes washers, and medium electric motors, and this will complete requirements of the consent decree, as well as address additional requirements under EPAct and 

EISA 2007. These standards will provide savings on the order of 

the seven packages that I just mentioned. 

So DOE has increased its pace to complete these rulemakings, 

and we are also reviewing our operations to improve efficiency and 

productivity. This includes efforts to improve and streamline test 

procedures and enforcement of appliance standards. 
4 

Enforcement of our standards is a very important improvement 

area. Energy conservation standards must be enforced to be effective, and DOE has taken a number of steps in this area. In the last 

6 months, we have created a new enforcement team within the Office of General Counsel, announced a program to randomly review 

compliance with DOE certification requirements, and held manufacturers accountable for failing to comply. 

Our general counsel’s office has initiated investigations and enforcement actions involving hundreds of products. These efforts 

have revealed several issues with existing statutory language. For 

example, the current statutory penalty originally adopted in the 

1970s is limited to $200 per violation, and statute limits the department’s enforcement authority to specific enumerated acts, 

which do not cover all possible violations. 

So, again, thank you for the opportunity to discuss this very important Federal energy efficiency program, and I will be happy to 

answer any questions that you may have. 

[The prepared statement of Ms. Hogan follows:] 

PREPARED STATEMENT OF KATHLEEN HOGAN, DEPUTY ASSISTANT SECRETARY, ENERGY EFFICIENCY, OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY, DEPARTMENT OF ENERGY

Chairman Bingaman, Ranking Member Murkowski, Members of the Committee, 

thank you for the opportunity to appear before you today to discuss appliance standards and four recently introduced bills. 

As this Committee well knows, energy efficiency generally is a fast, low risk, economical way to address climate and energy security concerns. Improvements in energy efficiency can be made today, with significant benefits. Numerous studies have 

concluded that current technology can greatly reduce energy consumption while providing considerable economic benefit. 

Mr. Chairman, I know energy efficiency is a priority for you and your fellow Committee Members. The Department of Energy (DOE) is pleased to work with you to 

advance the goal of making the Nation’s homes, offices, factories, and vehicles more 

efficient. The Department advances energy efficiency through a number of efforts, 

including promoting the adoption of energy efficiency policies and practices; broadening consumer acceptance of energy efficiency as a high-priority, cost-saving resource; and accelerating market adoption of energy efficient technologies. The Appliances and Commercial Equipment Standards Program is a major component of 

DOE’s energy efficiency efforts. 

My comments focus on five main items, including: 

• Appliance standards background and history; 

• Recent DOE efforts to meet an appliance standards consent decree; 

• DOE appliance standards processes and enforcement; 

• Comments on pending energy efficiency legislation; and 

• The ‘‘Best in Class’’ concept for appliance standards. 

APPLIANCE STANDARDS

Background and History 

The Department’s Appliance and Commercial Equipment Standards Program develops test procedures and energy conservation standards for residential appliances 

and commercial equipment. When applied, these standards can spur innovation, 

conserve energy, and reduce greenhouse gas (GHG) emissions. 

The Energy Policy and Conservation Act of 1975 (EPCA) designated test procedures, conservation targets, and labeling requirements for certain major household 

appliances, and established the DOE Appliance and Commercial Equipment Standards Program. Amendments to EPCA changed the conservation targets to mandatory standards and added categories, and eventually included a broad range of residential and commercial products. In 2005, DOE was sued for allegedly failing to 

meet the deadlines and other requirements of EPCA. Deadlines for these specific 

products had been repeatedly missed, in some cases for a dozen years or more. 
5 

1DOE Press Release, October 13, 2009. http://www.energy.gov/news2009/8129.htm 

In January 2006, the Department released its plan to eliminate the appliance 

standards backlog by issuing one new or amended standard for each of the products 

in the backlog by June of 2011. This ambitious schedule reflected a six-fold increase 

in standards activities compared with the previous 18 years. In addition to clearing 

the backlog of appliance standards, the Department is addressing further standards 

and test procedure requirements included in the Energy Policy Act of 2005 (EPAct 

2005) and the Energy Independence and Security Act of 2007 (EISA). 

In November 2006, the Department entered into a consent decree, under which 

it agreed to publish the final rules for 22 product categories by specific deadlines, 

the latest of which is June 30, 2011. 

Recent Efforts to Meet the Appliance Standards Consent Decree 

The Department has made significant progress on meeting its consent decree and 

additional EPAct 2005 and EISA requirements. It has met the deadlines for the 13 

rulemakings required to date leaving eight rulemakings to be completed by June 30, 

2011. 

On February 5, 2009, President Obama issued a memorandum to Secretary Chu 

requesting that DOE take all necessary steps to finalize legally required energy conservation standards rulemakings as expeditiously as possible and to meet all applicable judicial and statutory deadlines. 

Between February 5, 2009 and August 8, 2009, DOE completed the five appliance 

standards rulemakings highlighted in the President’s memo on time. The five standards rulemakings included the codification of standards prescribed by EISA, standards for fluorescent and incandescent lamps, beverage vending machines, ranges 

and ovens, and certain commercial equipment contained in the American Society of 

Heating, Refrigerating and Air-Conditioning Engineers Standard (ASHRAE) 90.1. 

These five standards rulemakings were completed ahead of schedule and will save 

over two billion metric tons of carbon dioxide over the next 30 years. Over that time 

period, they will save Americans an estimated $250 to $300 billion through avoided 

energy costs.1

In addition, in the last three months DOE completed standards for commercial 

clothes washers and small electric motors on schedule, and aims to complete residential water heaters, direct heating equipment and gas pool heaters by the end of 

March 2010. In the next three years, the Department will also revise standards for 

several additional categories of products, including residential air conditioners, refrigerators, clothes washers, and medium electric motors. These standards will also 

provide substantial energy savings to Americans. 

Appliance Standards Processes and Enforcement 

While DOE has already increased its pace to complete required rulemakings, the 

Department continues to examine and review its operations to improve efficiency 

and productivity to achieve the Administration’s goal of using appliance standards 

to increase energy savings and avoid GHG emissions. In addition, the Department 

continues to proactively work to improve and streamline its test procedures and enforcement of appliance standards. The improved procedures will build upon DOE 

and industry best practices, creating a process for developing, reviewing, and updating test procedures that will be able to accommodate changes in designs and technologies. 

EISA added new flexibility to the rulemaking process that can contribute to the 

Department’s productivity. Section 308 of EISA permits DOE to issue direct final 

rules in cases where a fairly representative group of stakeholders (including manufacturers, States, and efficiency advocates) jointly submit a recommended standard 

and no adverse public comments are received. For a consensus rule, this has the 

potential to reduce a typical three-year process. EISA also authorizes DOE to consider the establishment of regional standards for furnaces, central air conditioners, 

and heat pumps. The residential central air conditioner rulemaking, currently underway, is the Department’s first opportunity to pursue the establishment of regional standards under the new authority. Furthermore, Section 307 of EISA removes the requirement for DOE to publish and Advance Notice of Proposed Rulemaking (ANOPR) in rulemakings on energy conservation standards for certain residential products. In lieu of ANOPRs, DOE posts analyses to its website and holds 

public meetings to receive stakeholder input on preliminary analyses. 

The Department is assessing the resource needs of the appliance standards team, 

as well as determining how best to improve or reengineer underlying processes. The 

goal is to put sufficient Federal resources in place to ensure all requirements are 
6 

met within given timelines and quality and content requirements. These resources 

will be applied to rule development and standards enforcement. 

Additionally, the Department recognizes that the energy conservation standards 

must be enforced to be effective. The Department recently has taken significant 

steps to strengthen its enforcement of standards. Within the last six months the Department created a new enforcement team within the Office of the General Counsel, 

announced a program to randomly review compliance with DOE certification requirements and, most importantly, has held manufacturers accountable for failing 

to comply with EPCA and DOE’s regulations. As part of DOE’s tougher enforcement 

efforts, the Office of the General Counsel has initiated investigations and enforcement actions involving hundreds of products as far ranging as refrigerator-freezers, 

heating and air conditioning systems, light bulbs, and showerheads. These efforts 

include both actions to enforce the underlying energy efficiency standards, as well 

as efforts to improve the quality of the energy efficiency information available to 

DOE and consumers. 

While many of these efforts are still ongoing, they have revealed that the existing 

statutory language constrains the Department’s enforcement efforts in several ways. 

For example, the current statutory penalty, originally adopted in the 1970s, is limited to $200 per violation. Similarly, the process prescribed by statute for assessing 

these penalties may also benefit from updating. Finally, the statute limits the Department’s enforcement authority to specific enumerated acts which do not cover all 

circumstances found to be problematic by the enforcement team. 

PENDING ENERGY EFFICIENCY LEGISLATION

The Department recognizes and appreciates the Committee’s hard work on developing legislation that advances the research, development and deployment of energy 

efficiency. DOE looks forward to working with the Committee on this legislation as 

requested. 

My comments below address four bills, either pending or introduced, including: 

• S. 3059—The National Energy Efficiency Enhancement Act of 2010; • S. 1696—The Green Gaming Act of 2009; • S. 2908—The Water Heater Rating Improvement Act of 2009; and • S. 3054—a bill establishing efficiency standards for spas, water dispensers, and 

commercial food cabinets. 

3059—NATIONAL ENERGY EFFICIENCY ENHANCEMENT ACT OF 2010

Sec 2. Energy Conservation Standards 

(a) Multiple efficiency descriptors: DOE does not currently have authority to regulate based on multiple efficiency descriptors. The lack of such authority has prevented DOE from responding positively to stakeholder requests for the use of multiple efficiency descriptors. This provision would allow DOE greater flexibility in the 

technical formulation of test procedures and energy conservation standards. 

(c) Regional standards for central air conditioners and heat pumps: DOE has initiated a rulemaking on central air conditioners and heat pumps. DOE has not yet 

completed an analysis of the specific proposed standards. The next step in DOE’s 

rulemaking process for these products is the provision of a preliminary analysis of 

potential standard levels. In this next step of the process, stakeholders will have an 

opportunity to discuss issues relevant to the rulemaking and to comment on DOE’s 

approach. 

(d) Regional standards for furnaces: DOE currently has a rulemaking underway 

for residential furnaces. DOE has not yet completed an analysis of the specific proposed standards. The next step in DOE’s rulemaking process is a notice of public 

meeting in which DOE will describe the planned analytical methodology and process 

for conducting a rulemaking. In this next step of the process, stakeholders will have 

an opportunity to discuss issues relevant to the rulemaking and to comment on 

DOE’s approach. 

(f) Allowance for State building codes to exceed Federal standards: DOE analyses 

of energy efficiency standards in many cases demonstrate that high efficiency products may be more economically justified in new buildings compared with replacement products. This is because some efficiency technologies require not only changes 

in the equipment but in how the equipment is installed in a building. Since wholebuilding standards can address both equipment features and how the equipment is 

installed in a building’s infrastructure, such codes can sometimes address the efficiency improvements more economically than equipment standards alone. But currently due to federal preemption, building codes cannot take advantage of such economically viable energy efficiency opportunities because they cannot specify equip-
7 

ment standards that are more stringent than Federal standards. An alternative approach to this same issue might be to provide DOE with authority to promulgate 

different standards for replacement equipment compared to equipment that is installed in new homes. 

Sec. 3. Energy Conservation Standards for Heat Pump Pool Heaters 

DOE is currently regulating gas heaters for pools and this provision would regulate heat pump water heaters which are the comparable type of equipment for 

households in warmer climates and with electricity-only energy supplies. 

Sec. 4. Efficiency Standards for Class A External Power Supplies 

DOE estimates that the specified products only very rarely operate under no-load 

conditions. These proposed provisions address comments that DOE received in its 

public workshops concerning external power supply regulation. In the rulemaking 

DOE did not have the ability to respond to these comments noting that the statute 

did not allow DOE to grant an exemption from no-load requirements. 

Sec. 5. Prohibited Acts. 

Currently, DOE’s authority to enforce its energy and water conservations standards is limited to certain entities engaged in specific conduct. This provision expands DOE’s enforcement authority to include representatives of manufacturers, 

distributors, and retailers, which will help to ensure effective enforcement of our energy conservation standards throughout the distribution chain. 

Sec 6. Outdoor Lighting 

This section ends production of inefficient mercury vapor lamps and sets initial 

standards for outdoor lighting luminaires. These provisions are also consistent with 

on-going DOE activities to set efficiency standards for particular high intensity discharge lamps and lamp ballasts. 

Sec. 7. Energy Efficiency Provisions 

(a) Direct final rule for test procedures: This provision may allow for more timely 

updates of test procedures in some cases. 

(b) (1) (A) (i) Inclusion of impact on average energy prices as criteria: DOE believes that the clearest economic impact that energy conservation standards have 

on consumers and the country, is the impact on their energy bill. DOE already evaluates energy bill impacts in its standards rulemakings. In many cases, an energy 

conservation standard will decrease consumers’ energy bills while the average price 

of energy increases. In many cases incremental average energy price changes may 

be weakly correlated, or even negatively correlated with either consumer or national 

economic impacts. 

(b) (1) (A) (i) Inclusion of smart grid impacts as a criteria: This provision provides 

clear legislative intent to DOE to specifically address smart grid capabilities and 

features when considering energy efficiency ratings for appliances and equipment 

and any attendant energy conservation standards impacts. There is a potential for 

the smart grid technologies to provide national energy and economic savings beyond 

those considered for equipment that is efficient but which do not have such smart 

grid features. 

(b) (2) Rebuttable presumption: In general, DOE promulgates standards based on 

the criteria in 42 USC 6295(o)(2)(B), but the ‘‘rebuttable presumption’’ provisions 

proposed in the act would allow DOE to set cost-effective standards using alternative methods. However, in many cases, an analysis based on the seven factors 

could lead to more energy savings than that on the rebuttable presumption. 

(c) Obtaining appliance information from manufacturers: DOE is currently reviewing its existing certification and information collection requirements to determine 

how they can be streamlined and improved. This provision authorizes DOE to collect 

additional information that DOE may use in its compliance, monitoring and enforcement activities. Accurate and comprehensive information is a prerequisite to effective enforcement of DOE’s energy conservation standards. Coordination with other 

federal agencies, states, and third-party verification programs will help to rationalize this vital information gathering effort and ensure that DOE has the information it needs, while minimizing reporting burdens and duplication to the extent possible. 

(e) Permitting States to Seek Injunctive Enforcement. This provision would permit 

state attorneys general to seek injunctive enforcement for violations of federal conservation standards in U.S. District Court, with notice to DOE. It provides DOE an 

opportunity to intervene in any such actions. This broadening of enforcement authority and the additional resources of State enforcement agencies will help to ensure efficient enforcement of our standards throughout the country. 
8 

S. 1696—THE GREEN GAMING ACT OF 2009

This legislation requires DOE to conduct a study of video game consol energy use. 

DOE is aware of the potentially significant energy savings potential of a wide 

range of miscellaneous energy uses that are not covered equipment. Such miscellaneous end uses also include such common household items as: set-top boxes, audiovisual and home entertainment equipment, cordless telephones, coffee makers, computers, computer displays and monitors, computer networking equipment, ground 

fault circuit interrupting outlets, printers, and home security systems. 

Currently, DOE has the regulatory authority to cover new products if they meet 

certain criteria. The average annual per-household energy use by products of such 

type is likely to exceed 100 kilowatt-hours (or its British thermal unit equivalent) 

per year (42 U.S.C.6292(b)). However, in terms of establishing energy conservation 

standards for newly-covered consumer products DOE’s authority is limited by particular threshold criteria. In 42 U.S.C. 6295(l)(1)(A), which specifies the requirement 

that ‘‘the average per household energy use within the United States by products 

of such type (or class) exceeded 150 kilowatt-hours (or its British thermal unit 

equivalent) for any 12-month period ending before such determination.’’ 

Currently the bill states: ‘‘On completion of the initial study the Secretary shall 

determine by regulation, whether minimum energy efficiency standards for video 

game consol energy use should be established.’’ However, the proposed legislation 

does not specify the criteria that DOE should use in determining if standards should 

be established. 

If standard-setting is dependent on the threshold in 42 U.S.C. 6295(l)(1)(A) it is 

not clear at this time if video game consoles would satisfy this criteria. 

Barring explicit legislation for a long list of specific miscellaneous products, the 

biggest factor that determines whether or not DOE has the authority to set standards for a specific consumer product is the value of the threshold criteria contained 

in 42 U.S.C. 6295(l). Given compliance with the threshold criteria, DOE has existing 

authority to study and regulate any miscellaneous end use. 

S. 2908—THE WATER HEATER RATING IMPROVEMENT ACT OF 2009

This legislation gives DOE the authority to redefine the efficiency descriptor for 

water heaters marketed for both commercial and residential applications. Currently, 

some categories of water heaters are marketed for both commercial and residential 

applications, which use different test procedures and metrics. The boundary between commercial and residential applications is currently mandated by statute. 

The proposed legislation would allow greater flexibility in formulating regulations 

for large residential and small commercial water heaters and would allow DOE to 

make adjustments in test procedures and energy metrics to match standards and 

test procedures more closely with existing market conditions. 

S. 3054—STANDARDS FOR SPAS, WATER DISPENSERS, AND COMMERCIAL FOOD CABINETS

DOE has the regulatory authority to cover these new products after performing 

a coverage determination. Typically, the simple payback period of the energy conservation standards promulgated recently by DOE are substantially longer than the 

simple payback periods reported by the manufacturers of these products. In light 

of this, DOE is actively considering inclusion of these categories and other miscellaneous products under existing authority. 

TOP TIER LEVELS AND PROGRAMS

As the Committee is aware, last year DOE and EPA updated their agreement on 

roles and responsibilities for how the ENERGY STAR program is managed. As described in the enhanced program plan for ENERGY STAR products, released in December 2009, EPA will manage a new top tier program, in consultation with DOE, 

that will be nested in the existing ENERGY STAR program. EPA and DOE are currently exploring how this program might best be structured. 

Secretary Chu has spoken favorably regarding the concept of a top tier category 

for ENERGY STAR. He has noted that such a designation would give companies key 

marketing positions for ultra-efficient products that would reduce consumer’s energy 

bills by even more over their lifecycles. Such a market designation would also provide incentives for inventors, innovators and manufacturers to propel appliance and 

equipment technologies to new heights of energy efficiency. DOE analyses indicate 

that many high efficiency products are technically possible but are not yet on the 

market. For example, cutting edge television technologies can reduce energy use by 

70 percent compared with the traditional cathode ray tube. Yet, there is no program 

to help consumers easily identify products in this top tier of performance. While cost 
9 

and lack of performance information may be reasons that these energy saving technologies have not been deployed commercially, a top tier category could provide incentives for manufacturers to find ways to bring such technologies to market more 

cost effectively and may provide information to consumers who may have preferences for buying them. 

There are also a significant number of consumers who experience very high electricity costs. For example, in regions like Alaska and Hawaii electricity can cost 3 

to 5 times the national average. The economically optimum energy efficiency for appliances and equipment for such consumers is typically much higher than what is 

either provided by the market or by more general designations like ENERGY STAR. 

Creating a viable market niche for cutting edge efficiency technologies will provide 

a setting in which experimenters and innovators can test their ideas, evaluate consumer response to new technologies, and learn how to make cutting edge technologies cheaper and economically viable for a larger market. 

CONCLUSION

DOE is continually working to seize the opportunities provided by energy efficiency to achieve greater energy savings, reduce electricity consumption, and lower 

GHG emissions. There are many opportunities for further improvements in the energy efficiency of appliances and products that consumers and businesses use every 

day. Therefore, the Department is continuing to establish commercial and residential appliance standards. DOE is constantly modernizing, improving, and tailoring 

the Appliance and Commercial Equipment Standards Program to respond to changing market conditions, while being responsive to legislative and regulatory requirements. 

Thank you again for the opportunity to discuss the Department’s work on 

appliancetandards. I am happy to answer any questions Committee Members may 

have. 

The CHAIRMAN. Thank you very much. 

Mr. McGuire. 

STATEMENT OF JOSEPH M. MCGUIRE, PRESIDENT, ASSOCIATION OF HOME APPLIANCE MANUFACTURERS (AHAM) 

Mr. MCGUIRE. Thank you, Chairman Bingaman, and thank you 

for the opportunity to testify today on S. 3059. 

On behalf of the home appliance industry, I want to thank you 

and Senator Murkowski for crafting this consensus bill and for 

working with all affected stakeholders. 

AHAM’s members include the producers of the vast majority of 

appliances sold in the United States and all of North America, for 

that matter. While our membership is global, our industry employs 

hundreds of thousands of people in the United States in manufacturing, engineering, sales, and marketing. 

The appliance industry worked hard for enactment of the National Appliance Energy Conservation Act of 1987, which laid the 

foundation for uniform Federal appliance efficiency standards. 

Since that time, we have concluded several successful negotiations 

with efficiency advocacy groups, States, and other stakeholders on 

new and revised appliance efficiency standards. These agreements, 

some of which have been enacted into law, have delivered enormous energy savings to consumers. 

S. 3059 builds on these successes by opening the door to perhaps 

the most dramatic energy savings yet attributable to home appliances. The bill will encourage the manufacture and use of smart 

appliances, which when fully deployed across the country will possess the potential to shift 295 gigawatts of energy demand, which 

exceeds the total capacity of nuclear and hydro power generation. 

It does this by recognizing the potential benefits to the environ-
10 

ment and to consumers for such smart appliances operating in a 

smart grid environment. 

It gives authority to DOE to provide a credit to future appliance 

efficiency standards, to manufacturers who invest in making these 

appliances smart grid enabled. AHAM strongly supports this provision. 

We also believe that this incentive-based approach to the next 

generation of appliance standards foreseen by this bill can reach its 

full potential when coupled with the Best-in-Class Appliance Deployment Incentive Program that is currently under discussion by 

our industry, retailers, and efficiency advocates. We hope this program will be an additional consensus agreement that this committee and the Congress embrace in an act to help fulfill the smart 

grid vision. 

To some extent, we have become victims of our own success in 

the appliance standards process. The average refrigerator sold 

today consumes less energy than a 60-watt light bulb. Just since 

2000, refrigerator energy consumption has decreased 30 percent. 

Annual operating costs for a refrigerator in the 1970s were $259 

a year. Today’s Energy Star refrigerator operating costs are about 

$48 per year. 

But the remaining relative gains in terms of energy efficiency, 

particularly when measured against consumer costs and necessary 

manufacturing investment, are limited. Your legislation recognizes 

the benefits to the consumer, the environment, and energy conservation goals that can be achieved through the use of an appliance that can receive demand-response signals, such as electricity 

cost or renewable energy availability, directly from the grid. 

For the consumer, smart appliances will help save money on 

electricity bills without significantly changing their behavior. For 

the environment, shifting in appliance function from peak times of 

day to another will reduce the need for peaker power plants and 

their associated greenhouse gas emissions. Furthermore, reducing 

peak load provides relief to the grid during capacity-constrained periods, reducing line losses and reducing transmission congestion. 

In the area of energy, smart appliances would increase deployment of renewable energy resources, which need load to be ready 

when the wind is blowing or the sun is shining. The ability of appliance loads to be available or stopped almost instantaneously can 

be a significant factor in the growth of renewable energy. Smart 

appliances will help level the demand curve for electricity throughout the day. 

Going back to the consumer, a great example showing the benefits of a smart appliance compared to its counterpart measures the 

consumer benefit of increasing the efficiency, for example, of an Energy Star dishwasher to a more efficient level, such as the Consortium for Energy Efficiency Tier 2 levels. 

For the traditional energy standard change, the yearly savings to 

the consumer is only about $3.30. However, if the same Energy 

Star unit could operate at off-peak times, it can save the consumer 

as much as $40 per year. 

Mr. Chairman and Senator Murkowski, we believe there are significant energy, environmental, and consumer benefits to a smart 

grid. A key element of its success, however, is the use of smart 
11 

grid-enabled home appliances. But much consumer education is 

needed, as is enlightened energy policy. 

We thank you both for taking this important step today. Thank 

you. 

[The prepared statement of Mr. McGuire follows:] 

PREPARED STATEMENT OF JOSEPH M. MCGUIRE, PRESIDENT, ASSOCIATION OF HOME

APPLIANCE MANUFACTURERS (AHAM) 

hank you Chairman Bingaman, Ranking Member Murkowski and members of the 

committee. I appreciate your giving me the opportunity to provide the appliance industry’s views to the committee today. My name is Joe McGuire and I am president 

of the Association of Home Appliance Manufacturers (AHAM). I would like to convey 

the appliance industry’s support for the energy efficiency provisions in the National 

Energy Efficiency Enhancement Act of 2010. The provision related to the Smart 

Grid provides an important building block for the next generation of energy efficiency, conservation and environmental protection attributable to home appliances. 

AHAM represents manufacturers of major, portable and floor care home appliances, and suppliers to the industry. Our more than 150 members employ tens of 

thousands of people in the U.S. and produce more than 95% of the household appliances shipped for sale within the U.S. The factory shipment value of these products 

is more than $30 billion annually. The home appliance industry, through its products and innovation, is essential to U.S. consumer lifestyle, health, safety and convenience. Through its technology, employees and productivity, the industry contributes significantly to U.S. jobs and economic security. Home appliances also are a 

success story in terms of energy efficiency and environmental protection. New appliances often represent the most effective choice a consumer can make to reduce home 

energy use and costs. 

Mr. Chairman, I commend you and Senator Murkowski for listening to all stakeholders as you developed the National Energy Efficiency Enhancement Act of 2010. 

OVERVIEW OF FEDERAL ENERGY STANDARDS

As this committee well knows, AHAM and its members are committed to providing energy efficient home appliances that have a direct positive impact on the 

lives of consumers. In the last 8 years, manufacturers have reduced energy consumption of home appliances by nearly 8 billion kWh. 

AHAM was a strong supporter of the National Appliance Energy Conservation Act 

and have participated in several negotiated agreements with energy efficiency advocates, states and other stakeholders on appliance efficiency standards. Uniform 

standards throughout the U.S and even throughout North America and beyond are 

preferable to a patchwork of disconnected stateby-state standards. These national 

standards have resulted in significant energy savings and as we know from the past 

several years have become the foundation for additional energy efficiency awareness 

and incentive policies that have generated additional energy savings. 

As consideration is given to how much more energy savings can be achieved from 

home appliances, we need to be mindful of the huge gains that have been made and 

will continue. Refrigerators/freezers, dishwashers and clothes washers account for a 

43% combined decrease in energy consumption since 2000. From a global climate 

change perspective, the energy savings realized in 2008 shipments of refrigerators, 

dishwashers and clothes washers versus 2000 models would offset the CO2 emissions of more than 698 million gallons of gasoline consumed. 

Clothes washer energy consumption has decreased by 63% since 2000 while tub 

capacity has grown by 8%. Dishwasher energy consumption has dropped nearly 30% 

and water consumption has declined 29% since 2000. Refrigerator energy consumption has also decreased 30% since 2000 and efficiency, measured by a unit’s energy 

factor has increased 39%. The average refrigerator sold today consumes less energy 

than a 60-watt light bulb left on 24 hours a day. 

The chart below shows the history and schedule of several home appliance standards. 
12 

EFFECTIVE YEAR OF STANDARD 

Appliance 1988 1990 1993 1994 2000 2001 2004 2007 2010 2011 2012 2014 2015 2018 

Refrigerators/Freezers Original 1st 

Update 

2nd 

Update 

3rd 

Update 

Room Air Conditioners Original 1st 

Update 

2nd 

Update 

Clothes Dryers Original 1st 

Update 

Reviewed 2nd 

Update 

Clothes Washers Original 1st 

Update 

2nd 

Update 

3rd 

Update 

4th 

Update 

5th 

Update 

Dishwashers Original 1st 

Update 

2nd 

Update 

3rd 

Update 

Kitchen Ranges and Ovens Original Reviewed Dehumidifiers Original 1st 

Update 

Microwave Ovens Original 
13 

Current law provides a framework to ensure federal standards balance a number 

of factors so that the final efficiency standard provides real energy savings. It makes 

no sense to establish a standard so stringent that it penalizes consumers and manufacturers and slows the rapid deployment of new much more efficient products. The 

Energy Policy and Conservation Act establishes a process for federal energy conservation standards and makes clear that no standard can be set which may result 

in loss of product availability in popular styles and prices, and product functions 

consumers want. 

SMART APPLIANCES IN THE FUTURE

The Smart Grid is an exciting development that will modernize the current grid. 

The objective of the Smart Grid is to provide technology and systems (integrated 

into appliances and consumer devices used in everyday activities) that will allow 

consumers to automatically control their energy use and costs. AHAM provides a 

unique perspective to the Smart Grid Vision because many of the products AHAM 

members manufacture must be part of our nation’s future Smart Grid. 

In establishing policy on the development of a Smart Grid, the Energy Independence and Security Act of 2007 requires integration of Smart Appliances and consumer devices that can interact with the Smart Grid. This law also requires that 

consumers be provided with timely information and options for controlling energy 

use. The U.S. government’s Smart Grid Vision is that these goals can and should 

be met without causing significant disruption or lifestyle changes for the consumer. 

AHAM fully supports this Vision. Consumers should receive valuable and understandable information about their energy use and costs, thus enabling them to make 

intelligent and informed choices about how and when to use energy. Armed with 

this knowledge, consumers will be empowered to use energy more efficiently and to 

save money on electricity. 

As mentioned above, over the years the appliance industry has made great gains 

in improving pure energy efficiencies. However, although there is still room to improve in this area, today the gains are much more significant in the area of demand 

response and grid load management. The Federal Energy Regulatory Commission 

found that residential homes offer as much demand response potential as small, medium, and large businesses combined. Today, the average refrigerator uses about 

the same energy as a 60 Watt light bulb. A 10 percentage increase in pure energy 

efficiency would yield 6 Watts. However, deferring a defrost cycle can yield hundreds of Watts. 

In order to advance the Smart Grid, incentives need to be established for manufacturers to make Smart Appliances while the transmission and distribution system 

is modernized. The potential gains in this area are great, including increased use 

of renewable energy, fewer peaker plants and resultant emissions and less line 

losses in the transmission of electricity. 

Two very important incentives that Congress should embrace are the Best-inClass Appliance Deployment program and credits for meeting new appliance efficiency standards for smart grid capable appliances. Still under discussion, the Bestin-Class Appliance Deployment program is a focused and effective incentive program 

that provides financial incentives to manufacturers willing to invest in the development of Smart Appliances and recognizes that an inherent part of Smart Appliances 

is energy efficiency. The Best-in-Class Appliance Deployment program will be an extremely effective incentive program to build the Smart Grid in an effective manner. 

S. 3059, the National Energy Efficiency Enhancement Act of 2010, authorizes the 

Secretary of Energy to provide credits to manufacturers on meeting new appliance 

efficiency standards for products that are smart grid capable. In other words, the 

Secretary can encourage manufacturers to produce smart appliances by adjusting 

the stringency of a new appliance standard. The trade off in added appliance efficiency would be equaled or outweighed by the load shifting and grid efficiencies that 

would result from consumer use of such appliances. 

These incentives would provide the necessary financial and regulatory incentives 

to encourage deployment of smart and efficient appliances nationwide and provide 

a great impetus to the development of the Smart Grid. AHAM strongly believes that 

the provisions in S. 3059 regarding smart grid credits cannot be fully realized without enactment of the Best-in-Class Appliance Deployment program providing incentives for deployment of smart grid enabled appliances. 

SECTION 7, NATIONAL ENERGY EFFICIENCY ENHANCEMENT ACT OF 2010

As the committee considers the National Energy Efficiency Enhancement Act of 

2010, I would like to provide the appliance manufacturing industry’s views on the 

energy efficiency provisions. 
14 

ADOPTING CONSENSUS TEST PROCEDURES PROVISION

The comprehensive standard setting process starts with updating the test procedure taking into consideration— 

1. Consistency across products 

2. New technologies 

3. Testing of new procedures for repeatability, uniformity, burden, simplicity, 

and representativeness 

Current law on test procedures wisely requires a balance between measuring actual field energy use (which is highly variable) with the cost, uniformity and repeatability parameters required for test procedures for products mass-produced globally. 

But, developing test procedures is difficult and requires resources at the Department of Energy. We support authorizing consensus test procedures to be adopted 

more quickly when the industry and others agree. It makes sense to allow noncontroversial test procedures to be ‘‘fast tracked,’’ i.e., they can be promulgated in 

a direct final rule if they meet certain criteria subject to subsequent sufficient negative comment such that a regular rulemaking is required. 

The National Energy Efficiency Enhancement Act of 2010 would allow out dated 

test procedures to be updated more quickly and using less scarce resources at DOE 

by creating an expedited procedure for approve test procedures that have consensus 

support. Similar authority exists in law for the standards. It makes sense to extend 

this to test procedures, which are the foundation of any energy standard work. The 

current refrigerator test procedure that DOE uses is from 1979, while AHAM’s latest version is from 2008 and we are working on making revisions to that one. 

CRITERIA FOR PRESCRIBING NEW OR AMENDED STANDARDS PROVISION

Once a test procedure is established, work on an energy standard can progress, 

which includes an analysis to determine what standard provides benefits exceeding 

the burdens. The factors in law that must be considered are as follows: 

1. Economic impact on manufacturers and consumers, retailers, distributors 

and society. 

2. Savings in operating costs through the life of the product compared to price 

increase and maintenance costs. 

3. Total energy or water savings. 

4. Lessening of the performance. 

5. Lessening of competition (Department of Justice opines). 

6. Need for national energy and water conservation. 

7. Other factors the Secretary of Energy considers relevant. 

The National Energy Efficiency Enhancement Act of 2010 expands this statutory 

list of considerations to include the estimated impact on average energy prices and 

the net energy, environmental, and economic impacts due to smart grid technologies 

or capabilities. The latter is an important and helpful provision to the development 

of the Smart Grid. 

SMART APPLIANCES AND THE SMART GRID

AHAM’s member companies are interested and involved in the development of the 

Smart Grid and the policies surrounding a Smart Grid in the United States. A 

Smart Appliance has many advantages to bring to the Smart Grid. One of which 

is that a Smart Appliance provides a faster resource to a destabilized electrical grid. 

A Smart Appliance, or load, can be managed instantly, whereas generation, or a reserve power plant, needs to ramp up creating a lag in a needed response, which can 

further aggravate the instability problems. This faster response over a short duration can be a quite compelling complement to the increased use of intermittent renewable energy. 

A Smart Appliance may have some of the following key features: 

• Dynamic electricity pricing information is delivered to the user, providing the 

ability to adjust demand of electrical energy use. 

• It can respond to utility signals, contributing to efforts to improve the peak 

management capability of the Smart Grid and save energy by—— 

1. providing reminders to the consumer to move usage to a time of the day 

when electricity prices are lower, or 

2. automatically ‘‘shed’’ or reduce usage based on the consumer’s previously established guidelines or manual overrides. 
15 

• Integrity of its operation is maintained while automatically adjusting its operation to respond to emergency power situations and help prevent brown or 

blackouts. • The consumer can override all previously programmed selections or instructions 

from the Smart Grid, while insuring the appliance’s safety functions remain active. • When connected through a Home Area Network and/or controlled via a Home 

Energy Management system, Smart Appliances allow for a ‘‘total home energy 

usage’’ approach. This enables the consumer to develop their own Energy Usage 

Profile and use the data according to how it best benefits them. • It can leverage features to use renewable energy by shifting power usage to an 

optimal time for renewable energy generation, i.e., when the wind is blowing 

or sun is shining. 

The Best-in-Class Appliance Deployment program would incentivize manufacturers to make Smart Appliances as smart meters and dynamic pricing is being worked 

on and implemented across the more than 3,000 utilities in the U.S. Incentives are 

an essential part of the development of the Smart Grid in a timely manner. We need 

to move past the ‘‘chicken or the egg’’ mentality that no one wants to pay for a 

smart meter if there are no Smart Appliances in the home, and no one wants to 

use a Smart Appliance if there is not a smart meter and dynamic pricing program. 

The Best-in-Class Appliance Deployment program would alleviate this problem by 

authorizing financial incentives to manufacturers to build Smart Grid capable appliances for the home. 

We believe the Best-in-Class Appliance Deployment program needs to be authorized along with the energy efficiency provisions in the National Energy Efficiency 

Enhancement Act of 2010. It is critical that incentives are provided to manufacturers to innovate and take investment risks in the area of Smart Appliances to ensure 

that we are not paralyzed by smart meters waiting for Smart Appliances and Smart 

Appliances waiting on smart meters. The appliance consumer, who is also an electricity ratepayer, can reap benefits from Smart Appliances before dynamic pricing 

is brought into their home, such as through sensing through the wires of problems 

on the grid or use of feedback information to show energy usage. However, dynamic 

pricing will open the door to much more capability and allow the consumer to save 

even more money on their electricity bill. 

We would also request that the committee consider clarifying the bill language 

through the committee report that Smart Appliances will help increase the use of 

renewable energy and that the consideration of net benefits attributable to a smart 

grid capable appliance as it relates to Smart Grid credits to an energy conservation 

standard should include the impacts to the potential increased use of renewable and 

low emission energy attributable to the appliance standard. An example of this concept is that if a dishwasher can be set to run when the wind is blowing or when 

the sun is shining, then a credit should be given for this capability to recognize the 

energy efficiencies derived outside of the technical test procedure calculations, such 

as line losses, less peaker plants, increased renewables, and many others. 

OBTAINING APPLIANCE INFORMATION FROM MANUFACTURERS PROVISION

Regarding the provision to require the Department of Energy to promulgate regulations to require manufacturers to submit information to the agency, we are 

pleased that the provision ensures information requirements are based on product 

type and not a ‘‘one size fits all’ approach. Each product has different requirements 

that should be considered. Also, it is good that the provision requires the Department of Energy to minimize burdens on the manufacturers, use existing public 

sources of information, including nationally recognized certification or verification 

programs of trade associations; whether some or all of the information is submitted 

to another Federal agency and to minimize any duplication of requests for information by Federal agencies; and coordinate with State agencies to mitigate reporting 

burdens. 

WAIVER OF FEDERAL PREEMPTION PROVISION

The essential principle behind the underlying Energy Policy and Conservation Act 

(EPCA) is that national uniformity can be maintained with a series of vigorous national standards which save energy, water, carbon and consumer’s money while 

maintaining product utility, moderate prices, a competitive manufacturer base, and 

minimizing the negative impact on domestic employment. 

There is a critical need for coordination and integration of federal regulatory 

scheme because of the enormous cumulative regulatory burden on the appliance industry of investing in new designs for multiple products over many years while at 
16 

the same time meeting increasingly challenging and related environmental requirements such as ozone depletion and climate change. 

Federal preemption of states developing 50 different energy efficiency standards 

is a critical part of maintaining a national marketplace and not disrupting interstate commerce. The National Energy Efficiency Enhancement Act of 2010 does not 

allow the Secretary of Energy to reject a petition from a state to seek a waiver of 

federal preemption if the State does not have confidential information maintained 

by any manufacturer or association of manufacturers, but only if the state has requested the information and did not receive it. This is an important point because 

we would like to be asked for any information the state is after and be able to comment on any possible energy standard they may be considering. Again, related to 

the notion of having a fair chance to comment and make our views known to a state 

agency in the area of energy efficiency standards, this provision allows the Secretary 

of energy to approve a waiver petition submitted by a State that does not have an 

energy plan but only if it is based on a regulatory process that is subject to a notice 

and comment rulemaking proceeding. 

PERMITTING STATES TO SEEK INJUNCTIVE ENFORCEMENT PROVISION

Our views on the provision permitting states to seek injunctive enforcement are 

grounded in the basis that this is a federal law and therefore it should be in a federal court, that the federal agency should have the opportunity to take over a case 

a state is considering, and that there should be a federal interpretation of the law 

and issues so that manufacturers are subject to 50 differing interpretations, which 

would impede interstate commerce. 

RECOGNITION OF ALTERNATIVE REFRIGERANT USES PROVISION

AHAM is very supportive of incentives to move to low Global Warming Potential 

refrigerants. However, appliances are manufactured for a national market and preferably a North American market. It would be a disincentive to manufacturers and 

create unnecessary uncertainty if every city and town across the U.S. could prohibit 

refrigerators from in a building through there building codes. We support the provision requiring notification to EPA when any such restrictions are proposed. 

CONCLUSION

In conclusion, AHAM commends Senators Bingaman and Murkowski for the future focused provisions in S. 3059 regarding smart appliances and the smart grid. 

We encourage its enactment as well as the Best-in-Class Appliance Deployment program currently under discussions which has received strong support from several 

stakeholder segments. We look forward to continuing to work with the Committee 

on these issues. Thank you for the opportunity to testify and I look forward to answering any questions you may have. 

The CHAIRMAN. Thank you very much. 

Mr. Nadel. 

STATEMENT OF STEVEN NADEL, EXECUTIVE DIRECTOR, 

AMERICAN COUNCIL FOR AN ENERGY-EFFICIENT ECONOMY 

(ACEEE) 

Mr. NADEL. OK. Thank you very much, Chairman Bingaman, 

Senator Murkowski, and hopefully, we will get some other Senators 

shortly. 

I am here on behalf of the American Council for an Energy-Efficient Economy. We are a nonprofit research and education organization that has been working on energy efficiency standards since 

the 1980s. There is a long history to build on, and I think the 4 

bills before you build on this tradition. We endorse and support all 

4 bills. 

Taking them individually, S. 3059, we thank both of you for introducing this bill. It incorporates consensus agreements in a number of areas, and I think it is a very useful addition to the appliance standards program. 
17 

This bill includes new air conditioner and furnace efficiency 

standards, adopting regional standards so that the efficiency levels, 

say, in Alaska will be higher on furnaces but lower on air conditioners than, say, Arizona or Florida, which I think really makes 

sense. Steve Yurek will be talking more about that, and in the interest of time, I won’t go into the details. 

Likewise, the bill includes new outdoor lighting standards that 

we negotiated with NEMA. Kyle Pitsor will talk about those, but 

we very much support those. 

Then as Joe McGuire just pointed out, we have worked with 

AHAM, as well as the other associations, to work on a variety of 

reforms to the appliance standards program. He pointed out the 

smart grid section. There is also a number of other reforms. 

Senator Menendez, last year at this hearing, had introduced a 

variety of reforms to the program. They got adopted by the House 

in their energy bill. We have been negotiating with the industry 

since Senator Menendez introduced his bill to kind of modify them 

a little and come up with a consensus that everyone can live with. 

That is now incorporated into 3059. It modifies the House language, and we are all pledged to support that, both for the Senate 

as well as for conference so that the House will then follow this 

modified Senate language. 

Turning now to the other bills, Senator Menendez also has S. 

3054, which adds appliance standards for three additional products—hot food holding cabinets, portable electric spas—also known 

as hot tubs—and bottle-type water dispensers. All 3 of these are in 

the House-passed bill. 

We now have nine States that have adopted standards on some 

or all of these products. The efficiency levels are relatively modest. 

They have been in effect in a number of States for 5 years or more. 

They were based on Energy Star levels, at least 2 out of 3, from 

early this decade. They are a way to get started. 

We have been working with the trade associations for these 

standards. The spa standard, a letter we just submitted yesterday 

with them. They do support Senator Menendez’s bill. Likewise, 

NAFEM, the North American Food and Equipment Manufacturers, 

has said in an email that they do support the standards on hot food 

holding cabinets. When they get back from vacation, we anticipate 

submitting a letter from them as well. 

In the case of the drinking water dispensers, there hasn’t been 

a trade association. Just recently, the International Bottled Water 

Association says, OK, we will take this product up. They are now 

looking at things. 

We have contacted all the manufacturers and got 2 of them to 

pay enough attention to it. Both of them said that they will support 

it. So I think these are consensus, and we urge you to incorporate 

that into the bill. 

S. 1696, another Senator Menendez bill, the Green Gaming Act, 

would have the Department of Energy study whether to have gaming consoles included in the standards program, or are there other 

ways to improve them? These devices use a lot of energy. The new 

PlayStation 3, or relatively new, the Xbox 360, they use 100 to 150 

watts when on. So if you are gaming—even if you are not gaming, 

you leave it on because you wanted to save the game and come 
18 

back where you left off, or you turn off the TV and forgot to turn 

off the Xbox, they still use 100 to 150 watts. 

Now we heard Joe McGuire say the average refrigerator uses the 

equivalent of a 60-watt light bulb left on continuously. These gaming systems use twice as much energy when on. So the equivalent 

of 2 refrigerators if you leave them on all the time. 

We think we need to be introducing power management to these. 

They need to kind of go to sleep but then recover quickly if you 

don’t use them for a while, and there are major energy savings. 

This particular bill would just have DOE study the issue. 

There are 2 trade associations involved. One, the game manufacturers, I understand they support it. There is also the electronic 

equipment manufacturers, who oppose it. But this committee has 

a long history whenever there is disagreement to refer these issues 

to the Department of Energy to make a determination, and that is 

exactly what Senator Menendez’s bill would do. It doesn’t require 

standards. It says study them and only if they make sense do you 

go forward with a full rulemaking as well. 

So we think this falls into the tradition of this committee of saying if there is a question, let us have DOE study that. 

We also support the other bill, Senator Kohl’s bill dealing with 

water heater standards. Then finally, I would note we recommend 

that these bills—we add to these bills a variety of technical amendments to previous legislation. EPAct 2005, EISA 2007—both contained a variety of errors. Committee staff put together a whole series of technical amendments. They passed them onto the House 

that did adopt them as part of their bill. We recommend that those 

same technical amendments be adopted here because there is a variety of errors that are causing problems. 

So, with that, thank you very much, and I am happy to answer 

any questions. 

[The prepared statement of Mr. Nadel follows:] 

PREPARED STATEMENT OF STEVEN NADEL, EXECUTIVE DIRECTOR, AMERICAN COUNCIL

FOR AN ENERGY-EFFICIENT ECONOMY (ACEEE) 

SUMMARY

Federal appliance efficiency standards were first adopted in 1987 and were augmented by Congress in 1988, 1992, 2005 and 2007. The program has a long history 

of bipartisan support. My organization, the American Council for an Energy-Efficient Economy (ACEEE), estimates that without these standards and subsequent 

DOE rulemakings, U.S. 2010 electricity use and peak electric demand would be 

about 10% higher and U.S. total energy use about 5% higher. Net savings to consumers from standards already adopted will exceed $400 billion by 2030 (2008 $). 

The majority of these standards have been set by Congress, based on consensus 

agreements between manufacturers and energy efficiency advocates. But where 

there is not consensus agreement, Congress has often delegated decisions to DOE, 

allowing each side to make their arguments and having DOE make the decision. 

The four bills being considered in this hearing build on these solid foundations 

and we support these bills. We thank Senators Bingaman, Murkowski, Menendez, 

and Kohl for introducing these bills and moving the discussion forward on ways to 

improve the appliance standards program. 

Collectively these bills will reduce U.S. annual electricity use by about 20 billion 

kWh in 2020 and 56 billion kWh in 2030. The 2030 electricity savings are equivalent to the amount of energy generated in a year by 14 typical 600-MW coal-fired 

baseload power plants. These standards will also reduce natural gas and propane 

use, including nearly 50 trillion Btu of these fuels in 2020 and more than 100 trillion in 2030. The 2030 savings are enough to heat 1.8 million average American 

homes for a year. These standards will also reduce 2030 greenhouse gas emissions 
19 

1 Neubauer, et al. 2009. Ka-BOOM! The Power of Appliance Standards: Opportunities for New 

Federal Appliance and Equipment Standards. Washington, D..C: American Council for an Energy-Efficient Economy. Http://aceee.org/pubs/e091.htm. 2 Ibid. 

by 39 million metric tons of carbon dioxide, equivalent to taking 7 million cars off 

the road for a year. 

We have negotiated the provisions in S. 2908, 3054, and 3059 with relevant trade 

associations and would call each of these consensus proposals. Achieving such consensus requires a few small modifications to the bills as filed; these are listed in 

the appendix to my testimony. In the case of S. 1696, one trade association is supportive and another is not. However, this bill only requires DOE to study opportunities for energy savings, including the possibility of standards, with a full rulemaking 

to follow if DOE’s study finds that standards may make sense. This Committee has 

a long history of directing DOE to study an issue when consensus cannot be 

reached. S. 1696 falls into this tradition. 

We recommend that all of these bills be grouped together and reported out of 

Committee on a bipartisan basis. We also recommend that technical corrections to 

recent appliance standards legislation be incorporated into this bill, including establishment of separate standards for service-over-counter refrigerators. We would be 

happy to assist Members and Committee staff with working out the details. 

The federal appliance and equipment efficiency standards program is a great energy efficiency success story, with Congress adopting new standards in each of the 

last three decades. The ACELA bill, reported out last year, adds consensus efficiency 

standards on several products. The four bills before the Committee today should be 

reported out, combined with ACELA, and hopefully enacted by Congress in the next 

few months. This Committee has worked diligently in this direction and we thank 

you. 

INTRODUCTION

My name is Steven Nadel and I am the Executive Director of the American Council for an Energy-Efficient Economy (ACEEE), a nonprofit organization dedicated to 

increasing energy efficiency to promote both economic prosperity and environmental 

protection. We were formed in 1980 by energy researchers and are celebrating our 

30th anniversary this year. Personally I have worked actively on appliance standards issues for more than 20 years at the federal and state levels and participated 

in discussions that led to the enactment of federal standards legislation in 1987 

(NAECA), 1988 (NAECA amendments), 1992 (EPAct), 2005 (EPAct), and 2007 

(EISA). I also worked on the appliance standards provisions incorporated into the 

ACELA bill that this Committee reported out last year. 

Without these laws, plus subsequent DOE rulemakings updating some of these 

standards, ACEEE estimates that U.S. 2010 electricity use and peak electric demand would be about 7% higher and U.S. total energy use about 4% higher. Net 

savings to consumers from standards already adopted will exceed $300 billion by 

2030 (2008 $).1

However, much more savings are possible through a combination of further updates to existing standards, plus adding new products to the federal standards program. ACEEE estimates that U.S. energy use in 2030 can be reduced by at least 

2.1 quadrillion Btu (about a 2% reduction from projected levels) and carbon dioxide 

emissions can be reduced by at least 150 million metric tons, a 2.6% reduction from 

projected levels.2

Fortunately, the federal standards program has a long history of bipartisan support, at the Committee level, on the House and Senate floors, and from Presidents 

of both major parties: standards laws have been signed by Presidents Ford, Carter, 

Reagan (two laws), George H.W. Bush, and George W. Bush (two laws). 

The foundation of these laws was adoption of consensus standards negotiated between appliance manufacturers and energy efficiency advocates. ACEEE has been 

involved in all of these negotiations. Most federal standards build on previous state 

standards: after several states adopt standards on a product, manufacturers generally prefer uniform national standards to a patchwork of state standards. But 

where manufacturers and efficiency advocates disagree, Congress has commonly delegated decisions to DOE, allowing each side to make its best case and then having 

the Secretary of Energy decide. 

The four bills that are the subject of this hearing build on these solid foundations. 

We support all four of these bills: 

1. S. 3059, the National Energy Efficiency Enhancement Act. 
20 

3For peaking power plants we use 300 MW for a typical power-plant size. For base load power 

plants, 600 MW is a typical size. 

2. S. 3054, to establish efficiency standards for bottle-type water dispensers, 

commercial hot food holding cabinets and portable electric spas. 

3. S. 1696, Green Gaming Act. 

4. S. 2908, Water Heater Rating Improvement Act. 

We thank Senators Bingaman, Murkowski, Menendez, and Kohl for introducing 

these bills and moving the discussion forward on how best to improve the appliance 

standards program. In the sections below I comment on the provisions in these bills 

and also on some additional provisions that we recommend be added to increase the 

energy savings achieved and improve the appliance standards program’s processes. 

THE NATIONAL ENERGY EFFICIENCY ENHANCEMENT ACT (NEEEA)

The heart of this bill is two consensus agreements that ACEEE and other energy 

efficiency supporters negotiated with equipment manufacturers. One agreement addresses new standards for residential furnaces, air-conditioners, and heat pumps. 

The other addresses outdoor lighting fixtures. In addition, NEEEA contains a variety of provisions we negotiated with the Association of Home Appliance Manufacturers (AHAM) and other trade associations on improvements to the process by which 

DOE sets and implements standards. And NEEEA also contains several other 

standards-related provisions. We discuss each in turn. 

Residential Furnaces, Air-Conditioners, and Heat Pumps 

On October 13, 2009, the nation’s leading manufacturers of residential central air 

conditioners, furnaces, and heat pumps signed an historic, voluntary agreement 

with the nation’s leading energy efficiency advocacy organizations supporting new 

federal standards for those products. For the first time, the agreement calls for regional efficiency standards to replace a quarter-century of national standards, and 

it also permits stronger state building code provisions for new construction. This 

agreement is incorporated into S. 3059. 

This agreement and this legislation sets different standard levels in three climate 

regions—North, South, and Southwest, recognizing that appropriate investments in 

heating and cooling efficiency depend on usage, and efficiency levels that make economic sense in Michigan will generally be different from efficiency levels that make 

economic sense in Texas. Such regional standards were authorized under the Energy Independence and Security Act of 2007 (EISA). Specifically, relative to current 

federal standards, the agreement calls for higher furnace efficiency standards in the 

North, while leaving standards in the South unchanged. Conversely, the agreement 

increases air conditioner efficiency in the South, while leaving standards in the 

North unchanged. In the Southwest, the agreement builds on the basic southern 

standard by adding requirements for efficiency under hot dry conditions, which are 

particularly common in the Southwest. National standards are set for heat pumps 

(used for both heating and cooling) and oil furnaces (primarily used in the North 

and sales are too low in the South to justify a separate standard). 

The agreement and this legislation also allow states to include even higher efficiency levels for heating and cooling systems in new homes. New houses can be built 

without physical restrictions that might hinder installation of highly efficient equipment—as there might be when replacing equipment in an existing home. This new 

approach strikes a balance between the desire for greater state and regional flexibility and the need for a uniform marketplace, and looks to the nation’s long-term 

energy future by supporting the most efficient new systems where they are most 

cost-effective. 

Under EISA, details on implementing and enforcing these regional standards will 

be worked out by DOE in a rulemaking. We have been talking to equipment wholesalers about some of these issues and expect to share shortly a couple of small refinements to this section of S. 3059 that we jointly recommend. 

The new standards are projected to save U.S. consumers about $13 billion in today’s dollars between 2013, when the new standards begin to take effect, and 

2030—taking into account the incremental cost of the more efficient equipment. Between now and 2030, the agreement also will save 3.7 quadrillion Btu of energy nationwide, which is equivalent to all the energy consumed by approximately 18 million households in a single year, or enough to meet the annual energy needs of either Georgia, Massachusetts, Michigan, Missouri, North Carolina, or Virginia. By 

2030, the standards are projected to reduce peak electric needs by 4,150 MW, equivalent to the output of nearly 14 new 300-MW peaking power plants.3 The new 

standards would raise the minimum efficiency of residential central air conditioning 
21 

systems by about 8 percent and furnaces by about 13 percent, and would result in 

a 5 percent reduction of the total heating energy load and a 6 percent reduction of 

the total cooling energy load in 2030. 

These energy savings will result in annual greenhouse gas emission reductions of 

23 million metric tons of carbon dioxide in 2030, an amount equal to that produced 

by approximately 4 million cars every year. 

Outdoor Lighting Fixtures 

On Nov. 3, 2009, lighting equipment manufacturers and energy efficiency organizations announced agreement on a legislative package that would create new minimum efficiency standards for many types of outdoor lighting products. The agreement was reached by the National Electrical Manufacturer’s Association (NEMA), 

ACEEE, and several other energy efficiency organizations. 

The agreement is incorporated into NEEEA and establishes initial efficiency 

standards for outdoor pole-mounted lighting fixtures, then calls on DOE to quickly 

set revised standards. Covered fixtures primarily light roadways and parking lots. 

These standards will also improve lighting quality from outdoor fixtures, since the 

most stringent standards apply to fixtures with high glare and light trespass. 

Standards are less stringent for fixtures with better glare and trespass control. 

In addition, the agreement and legislation requires double-ended halogen lamps 

(a type of high-wattage incandescent lamp that is used outdoors) to meet specific 

efficiency requirements and prohibits sales of mercury vapor lamps as of 2016. 

Congress and DOE have been steadily moving away from the use of the most inefficient types of incandescent light sources, most importantly with the provision in 

EISA that sets standards for general service incandescent lamps over the 2012-2014 

period. Double-ended halogen lamps are a type of higher wattage incandescent lamp 

not covered by EISA. The standards in S. 3059 would require these higher wattage 

lamps to no longer use conventional incandescent technology, but to move to higher 

efficiency levels, such as those that can be that obtained with infrared reflective 

coatings. 

New mercury vapor fixtures and ballasts were prohibited in the Energy Policy Act 

of 2005. These fixtures will generally be replaced with more efficient fixtures when 

existing ballasts wear out over the next 15 years or so. The provision in S. 3059 

accelerates this transition, providing energy savings from 2016 (when the provision 

takes effect) until about 2030 (when most of these ballasts would be replaced anyway). Mercury vapor lamps use about 35% more energy per lumen of light output 

than more modern technologies that have been in widespread use since the 1980s. 

These newer, more efficient technologies are very cost-effective. Since new mercury 

vapor ballasts can no longer be sold, it is only older fixtures (overwhelmingly pre2005 and primarily pre-2000 or so) that will be affected. 

This agreement and legislation establishes modest initial standards for outdoor 

lighting equipment, but paves the way for big savings if DOE does a good job when 

setting revised efficiency standards. Only a minority of fixtures on the market today 

is affected by the initial standards; much larger savings will occur if the revised 

DOE standards move the average fixture to performance levels met by the better 

fixtures now on the market. 

If enacted by Congress as new legislation, the agreed-upon new standards would 

reduce U.S. lighting energy use by about 24 to 42 billion kWh annually. ACEEE 

estimates that the initial standards will save about 12 billion kWh/year. The revised 

standards could increase savings by 12 to 30 billion kWh/year for total savings of 

as much as 42 billion kWh/year (or roughly enough power to meet the total needs 

of more than 3.6 million typical U.S. households). The long-term energy savings in 

2030 are equivalent to the annual output of 14 new 600-MW baseload power plants 

(the typical size of a new coal-powered unit). 

Improvements to the Appliance Standards Program 

The House of Representatives, in the American Clean Energy Security Act (ACES) 

includes several improvements to the operation of the appliance standards program. 

A year ago, Senator Menendez provided witnesses at a March 19, 2009 hearing with 

some potential amendments that were similar to those in the House bill. Since then 

we have worked with the Association of Home Appliance Manufacturers and other 

trade associations to negotiate a set of modifications to the House provisions that 

we can all support for adoption by the Senate, and by House-Senate conferees. 

These provisions are contained in NEEEA. In general, these amendments free DOE 

and states from restrictions that have hampered implementation of the standards 

and related programs. None of these amendments would set new standards directly, 

and any concerns an interested party may have can still be raised as part of formal 

DOE and state rulemaking proceedings. These provisions relate to: 
22 

Multiple Metrics: The past two administrations have disagreed on whether 

DOE may set more than one standard for a product. For quite a few products 

Congress has imposed more than one standard for a product. This provision 

clarifies that DOE may set such standards, but provides a higher bar for setting 

such standards for residential air conditioners. This provision, without the air 

conditioner provision, passed both the House and Senate in 2007 but was left 

out of EISA at the last minute. With this air conditioner provision, it should 

be adopted this year. 

Criteria for Proscribing New or Amended Standards: For many years, new 

and revised efficiency standards have been based on seven criteria described in 

the law. This provision would add an eighth criteria—the net energy, environmental, and economic impacts of any smart grid technologies that are incorporated into covered products. Such technologies can provide significant benefits, in appropriate applications, but not all applications are appropriate. This 

provision was included by the House in ACES and the NEEEA provision defines 

and improves upon the House draft. This provision also expands, clarifies, and 

refines the rebuttable presumption test in existing legislation and clarifies that 

the economic analysis of standards should look at the impacts of energy standards on energy prices. For example, DOE has found that higher furnace standards save enough natural gas that these standards can slightly lower natural 

gas prices for all customers, providing benefits for all U.S. consumers and businesses. Since NEEEA was introduced, we have had further discussions with 

several trade associations and now developing a few refinements to the smart 

grid language, which will be provided to Committee staff shortly. 

State Performance-Based Building Codes: Under present law, states with performance-based building codes must use minimum-efficiency equipment when 

developing code requirements. Performance-based codes provide an overall level 

of performance and permit many paths for reaching these goals (e.g., more insulation, better windows, reduced air infiltration, or improved equipment). But 

when equipment is limited to only federal minimums, some states are finding 

they can’t set strong enough codes to meet their energy and climate goals. Also, 

this part of federal law creates a loophole in performance-based codes, as builders exceeding federal minimums can install less insulation, even though insulation lasts for the life of the building while equipment lasts for only one to two 

decades. This provision allows states greater flexibility in performance-based 

codes to address equipment that is covered under federal appliance standards. 

This provision would allow states to use covered products with efficiency levels 

higher than the federal minimum in formulating their building codes, while 

keeping the framework of preemptive federal standards, and in the case of any 

prescriptive codes, requiring that codes provide at least one pathway for meeting codes using equipment at federal minimum efficiency levels. 

Removing the Catch-22 from the State Waiver Petition Process: Under current law, federal standards preempt state standards, unless a state submits and 

DOE approves an application for exemption from preemption. Such an application must demonstrate that ‘‘such state regulation is needed to meet unusual 

and compelling State or local energy or water interests’’ and that such regulation ‘‘will not significantly burden the manufacturing, marketing, distribution, 

sale or servicing of the covered product on a national basis.’’ The detailed requirements for states to get waivers from federal preemption include submittal 

of information that may be obtainable only from manufacturers, who may oppose the waiver. The amendment would prevent DOE from denying a state a 

waiver from preemption for failing to provide information that manufacturers 

refuse to make available to the state. The amendment would also limit DOE 

from denying waivers if states do not have a formal state energy plan, provided 

the waiver petition is subject to an opportunity for public comment in-state. 

Even with these amendments, states would still have a difficult case to make, 

but these amendments at least make it possible to make the case. 

DOE Collection of Key Data for Making Standards Decisions: The distribution 

of efficiency levels among products sold is a key piece of information for establishing new standards; however, DOE has sometimes failed to obtain such data 

in developing new rules. DOE usually asks for such information, but manufacturers sometimes decline to provide it. The amendment would require DOE to 

conduct a rulemaking to determine what data manufacturers must submit, inclusive of efficiency performance data, to enhance DOE decision making. DOE 

would decide how often to collect data, ranging from annually to once every 

three years. This new data collection would be coordinated with existing state 

and federal data collection. Existing law includes provisions to protect confidential data. Improved data will help DOE’s decision-making process for standards, 
23 

and will also aid other programs such as ENERGY STAR. We are now discussing a few small refinements to this section with AHRI and will provide 

these to Committee staff shortly. 

State Authority to Seek Injunctive Enforcement: Compliance with federal 

standards is essential for achieving the expected energy savings. Under current 

law, several unnecessary and burdensome restrictions are placed on the ability 

of state attorneys general to enforce federal standards within the state’s own 

borders. There is no federal budget allocation for enforcement actions and, until 

the last few months, no significant federal enforcement was taking place. This 

amendment would allow a state to bring its expertise and resources to bear on 

compliance by enabling states to seek injunctive enforcement of federal standards in federal court on an equal footing with the federal government, provided 

the federal government is given proper notice and has not already brought action to address the same violation. All provisions of federal law apply. A similar 

provision was included in EISA for general service incandescent lamps. State 

ability to enforce federal standards should be extended to all regulated products. 

Accelerated Adoption of Consensus Test Methods: EISA established a process 

by which DOE can adopt on an accelerated basis standards recommended by 

a group of broadly-representative stakeholders provided no other party raises 

objections that DOE determines require a more lengthy review process. This bill 

would allow this same accelerated process for adoption of similar consensus recommendations with respect to test methods. 

Other Provisions 

NEEEA also contains the following additional provisions that we support: 

New standards for heat pump pool heaters (following standards contained in 

ASHRAE standard 90.1-2007, addendum y). There have been federal standards for 

gas-fired pool heaters for many years. These will be the first standards for efficient 

electric pool heaters. One missing agreement in the bill is a schedule for revising 

this standard. ACEEE and AHRI agree that this standard should be revised in parallel with the existing pool heater standard. Recommended legislative language will 

be provided to Committee staff shortly. 

External power supplies and security equipment. EISA enacted new standards on 

external power supplies (the little black boxes at the end of many power cords), including standards for both no-load energy use, and for energy use when the product 

is in use. In the case of security equipment, the equipment is constantly in use. 

NEEEA contains a provision, negotiated with the Security Industries Association, 

that exempts external power supplies used with security equipment from the noload standard until July 1, 2017. By then we expect all power supplies on the market to meet the no-load standard and this exemption will no longer be needed. 

WATER DISPENSERS, HOT FOOD HOLDING CABINETS, AND ELECTRIC SPAS

S. 3054 (introduced by Senator Menendez) establishes federal standards for three 

additional products—bottle-type drinking water dispensers, commercial hot food 

holding cabinets, and portable electric spas. The proposed standards for all three 

products have been adopted in California, Connecticut, and Oregon, and were included in the House-passed ACES bill. In addition, Maryland, New Hampshire, 

Rhode Island, and the District of Columbia have adopted the proposed standards for 

bottle-type water dispensers and commercial hot food holding cabinets, and Arizona 

and Washington have adopted the proposed standard for portable electric spas. We 

urge this Committee to include S. 3054 in any new standards bill it reports out. All 

of these standards are cost-effective to consumers, as shown in the table below. In 

subsequent sections I briefly discuss each of these three products individually. 
24 

4 U.S. Environmental Protection Agency. 2009. ENERGY STAR Unit Shipment and Market 

Penetration Report, Calendar Year 2008 Summary. Washington, DC: U.S. Environmental Protection Agency. 5 Ibid. 

6 Ibid. 

7 Ibid. 

Commercial Hot Food Holding Cabinets 

Hot food holding cabinets are used in hospitals, schools, and other applications 

for storing and transporting food at a safe serving temperature. They are freestanding metal cabinets with internal pan supports for trays. Most are made of 

stainless steel and are insulated; however, there are some models that are non-insulated and are often made of aluminum. The main energy-using components include 

the heating element and the fan motor. 

The ENERGY STAR specification sets a maximum idle energy rate for hot food 

holding cabinets of 40 Watts per cubic foot of measured interior volume. Appropriate 

insulation in hot food holding cabinets is the key mechanism to meet this specification. Insulated cabinets also have the advantage of quick preheat times, less susceptibility to ambient air temperatures, and a more uniform cabinet temperature. The 

recommended maximum idle energy rate translates to a 76% annual energy savings 

of 1,815 kWh relative to a basic, inefficient model. These energy savings cover the 

estimated additional cost of more efficient units ($453) within 3 years. EPA has estimated that as of 2008, 79% of the market met the proposed standard.4

In December 2004, the California Energy Commission adopted this level as a 

statewide minimum standard, effective January 2006. Subsequently the same standard has been adopted in Connecticut, Maryland, New Hampshire, Oregon, Rhode Island, and the District of Columbia. S. 3054 would adopt this standard as a federal 

standard. 

The House bill and S. 3054 both limit this standard to units with an internal volume of 8 cubic feet or more. We have discussed this proposal with the relevant trade 

association, the North American Food Equipment Manufacturers, and they have indicated support for this provision in an email to Committee staff. 

Portable Electric Spas (Hot Tubs) 

Portable electric spas are self-contained hot tubs. They are electrically heated and 

are popularly used in homes for relaxation and therapeutic effects. The most popular portable spas hold between 210 and 380 gallons of water; however, some models can hold as much as 500 gallons. ‘‘In-ground’’ spas are not included in this category. 

Over half the energy consumed by a typical electric spa is used for its heating 

system. Heat is lost directly during use and through the cover and shell during 

standby mode. Improved covers and increased insulation levels are key measures to 

improving efficiency and can decrease standby energy use by up to 30% for a spa 

of average-to-low efficiency. Another measure is the addition of a low-wattage circulation pump or improvements to pump efficiency that would generally save 15% 

of standby energy consumption of an average-efficiency spa. Automated programmable controls, which would allow users to customize settings based on predicted 

usage patterns, are a third measure to improve efficiency and could save roughly 

5% of a spa’s standby energy consumption.5

In December 2004, the California Energy Commission (CEC) adopted a maximum 

standby energy consumption standard of 5 (V2⁄3) Watts for portable electric spas 

where V = the total spa volume in gallons and 2/3 means to the two-thirds power. 

Standby energy consumption represents the majority (75%) of the energy used by 

electric spas and refers to consumption after the unit has been initially brought up 

to a stable temperature at the start of the season and when it is not being operated 

by the user. The energy consumption calculation (V2⁄3) used by CEC approximates 

total spa surface area, which is directly related to standby energy use. A maximum 

standby energy requirement indexed to total spa surface area thus requires spas of 

all sizes to be equally efficient. 

The California standard is a modest initial effort and is probably met by the majority of spas now being sold. CEC estimates that the products meeting the standard 

cost $100 more than basic models. At national average energy prices, this additional 

cost is covered within 4.3 years;6 however, the payback period varies considerably 

with regional temperatures and energy prices. For example, in New England states, 

with cold winters and higher than average energy prices, the payback is between 

2.1 and 2.8 years. In warmer climates with lower energy costs, the payback is between 4 and 5 years.7
25 

8 Nadel, et al. 2006. Leading the Way: Continued Opportunities for New State Appliance and 

Equipment Efficiency Standards. Washington, DC: American Council for an Energy-Efficient 

Economy..S. Environmental Protection Agency. 2009. ENERGY STAR Unit Shipment and Market Penetration Report, Calendar Year 2008 Summary. Washington, DC: U.S. Environmental 

Protection Agency. 9 Natural Resources Defense Council. 2008. Lowering the Cost of Play: Improving the Energy 

Efficiency of Video Game Consoles. November. 

In 2007, Connecticut and Oregon subsequently adopted the California standard, 

and in 2009 Arizona and Washington also followed suit. We have discussed this 

standard with the relevant trade association, the Association of Pool & Spa Professionals (APSP), and worked with them to develop and agree to a number of refinements to the House legislative language. These refinements were incorporated into 

S. 3054. With these refinements, APSP has indicated support for this provision in 

an e-mail message to Committee staff. 

We have one small clarifying technical amendment to S. 3054 that is provided in 

the appendix to my testimony. 

Bottle-Type Water Dispensers 

Bottled water dispensers are commonly used in both homes and offices to store 

and dispense drinking water. Designs include those that provide both hot and cold 

water and those that provide cold water only. In 2000, the EPA issued a voluntary 

ENERGY STAR performance specification for standby energy of 1.2 kWh per day 

and 0.16 kWh per day for ‘‘hot and cold’’ dispensers and ‘‘cold only’’ dispensers, respectively. ‘‘Hot and cold’’ water dispensers tend to be much less efficient than ‘‘cold 

only’’ because they must maintain water tanks at two temperatures in a small 

space. The greatest factor determining energy efficiency is insulation of the water 

reservoirs. Older models of ‘‘hot and cold’’ dispensers often do not have insulated hot 

water tanks, which increases heat dissipation and standby energy waste. Adding insulation between the tanks and increasing existing insulation levels can reduce 

standby energy waste. A Pacific Gas & Electric Co. report found that a reduction 

from the baseline ‘‘hot and cold’’ dispenser daily energy consumption of 1.93 kWh 

to the proposed 1.2 kWh would save nearly 38% of annual energy consumption. The 

slight cost (about $12) to improve a basic unit to meet the proposed standard would 

be earned back in lower energy costs within about 6 months at national average energy prices. EPA data indicate that just over 40% of water dispensers sold meets 

the ENERGY STAR specification.8

In December 2004, the California Energy Commission adopted the ENERGY 

STAR standard for ‘‘hot and cold’’ dispensers as a mandatory standard, affecting 

units sold after January 1, 2006. Subsequently the same standard has been adopted 

in Connecticut, Maryland, New Hampshire, Oregon, Rhode Island, and the District 

of Columbia. We recommend that this same standard be adopted as a federal standard, as contained in S. 3054. 

The trade association for this product is the International Bottled Water Association (IBWA). They are reviewing this proposal now. We have discussed this proposal 

with General Electric and Oasis International, two of the major manufacturers of 

this equipment, and both have indicated support for this standard. The General 

Electric support is based on a change to the House bill that is incorporated into S. 

3054 of establishing a slightly less-stringent standard for units with a refrigerated 

compartment. 

GREEN GAMING ACT

S. 1696, introduced by Senator Menendez, would require the Secretary of Energy 

to conduct a study of video game console energy use and opportunities for energy 

savings and, upon completion of the study, make a determination of whether minimum efficiency standards for video game consoles are warranted. If the Secretary 

determines that standards may be warranted, a full rulemaking then ensues. If the 

Secretary makes a negative determination and no standards are established, a follow-up study must be conducted within 3 years of the initial determination. We support this bill and its inclusion in any appliance standards bill reported out of the 

Committee. 

The study and determination required by S. 1696 is timely. Recent growth in 

sales and use of video game consoles along with the increasing power demands of 

popular gaming systems and typical usage patterns make gaming one of the leading 

contributors to the growth in household energy consumption. A recent study by the 

Natural Resources Defense Council9 estimates the video game consoles found in 

more than 40% of U.S. homes consume some 16 billion kWh of electricity. Opportunities for energy savings from more efficient components and designs and incorpora-
26 

tion of advanced power management features could cut gaming power use by more 

than half. These preliminary estimates suggest the need for more in-depth study of 

video game electricity consumption, technical options for improving their energy efficiency, and whether standards are warranted for these products. 

Two trade associations have commented on this bill. My understanding is that the 

Entertainment Software Association supports the bill, while the Consumer Electronics Association opposes it. In this situation, this Committee has a long-tradition 

of directing DOE to study an issue and determine the best course of action. S. 1696 

directs DOE to study the issue, and only proceed with standards if they are warranted. We believe S. 1696 follows previous Committee precedents and should be favorably reported out. 

WATER HEATER RATING IMPROVEMENT ACT

S. 2908, introduced by Senators Kohl, Corker and Feingold, would require the 

Secretary of DOE to quickly amend the efficiency descriptor and accompanying test 

methods for water heaters covered by federal standards. The efficiency of residential 

water heaters is determined by a test procedure in 10 CFR Part 430, Energy Conservation Program for Consumer Products: Test Procedure for Water Heaters, which 

was developed to evaluate the relative efficiency of tank water heaters, the ubiquitous technology at the time. Unfortunately, experience has documented that this 

test procedure is flawed in that it gives biased results when extended to newer technologies, such as tankless water heaters. The current test uses six long hot water 

‘‘draws,’’ when in fact field data show that about 40 draws, most quite short, are 

more typical. Tankless units are more efficient under the test procedure than with 

predominantly short draws. In addition, residential and commercial units are rated 

with totally different test procedures, which make it difficult to rate and compare 

units that might be rated for commercial use but used in a large residence (or visa 

versa). The rating method deficiencies cause problems for incentive programs such 

as tax credits because it is difficult to estimate energy savings and environmental 

benefits, making it difficult to set appropriate incentives. ACEEE has worked with 

manufacturers, AHRI, ASHRAE, and NIST to broaden understanding of the issues 

and launch work to develop a better rating method and test procedure. S. 2908 directs DOE and NIST to accelerate this work, so that an improved test procedure 

can be published within 180 days of enactment and take effect one year later. Our 

understanding is that work is already underway, which should make achieving this 

ambitious schedule possible. A few clarifications to S. 2908 are now being developed 

in coordination with manufacturers and will be provided to Committee staff shortly. 

ENERGY SAVINGS

ACEEE has analyzed most of the efficiency standards discussed above. Overall, 

we estimate that these standards will reduce U.S. annual electricity use by about 

20 billion kWh in 2020 and 56 billion kWh in 2030. The 2030 electricity savings 

are equivalent to the amount of energy generated in a year by 14 typical 600-MW 

coal-fired baseload power plants. These standards will also reduce natural gas and 

propane, including nearly 50 trillion Btu of these fuels in 2020 and more than 100 

trillion in 2030. The 2030 savings are enough to heat 1.8 million average American 

homes for a year. These standards will also reduce 2030 greenhouse gas emissions 

by 39 million metric tons of carbon dioxide, equivalent to taking 7 million cars off 

the road for a year. Further details on our savings estimates are provided in the 

table below. 
27 

10Section 161(b) concerns technical amendments related to other EISA provisions not related 

to standards. 

RECOMMENDED ADDITIONS

These four bills contain many worthy additions to the federal standards program. 

But as the Committee proceeds to markup, we recommend that a couple of items 

be added, as discussed below. 

Technical Corrections 

We recommend that the Committee pass the appliance, lighting, and commercial 

product standards technical amendments enacted by the House of Representatives 

last summer. These were passed as Section 161(a) and Section 162 of Subtitle G10

of the American Clean Energy and Security Act (ACES). The Energy Policy Act of 

2005 and the Energy Independence and Security Act of 2007 enacted many new 

standards that will result in very large energy savings in the years ahead. Unfortunately, both laws contained serious drafting errors such as multiple non-conforming 

amendments to underlying law and language that was not adequately clear. Congress needs to act to correct these errors because some of the affected standards are 

scheduled to take effect soon. For example, the critical new standards for motors 

and general service lighting products require technical amendments and those 

standards take effect starting later this year and in 2012, respectively. We have 

worked together with the affected trade associations to reach consensus on these 

technical amendments. Since passage of the technical amendments as part of the 

House bill last summer, we have discovered two minor amendments to that language are needed. Therefore, we recommend that the Committee pass the technical 

amendments package contained in Subtitle G of ACES with two small additional 

amendments. These are provided in the appendix to my testimony. 

Service-Over-Counter Packaged Refrigeration Systems 

The Energy Policy Act of 2005 established efficiency standards for commercial 

packaged refrigeration equipment. One small category of specialized equipment was 

included with the same efficiency standards as larger units. This special category 

has display refrigeration underneath and a service counter on top. These are com-
28 

monly used in deli’s, bakeries, and lunch establishments. Manufacturers tell us that 

the current standards cannot be met with existing equipment. We have worked with 

manufacturers and their trade association, AHRI, to develop an alternative standard that is based on standards recently set by DOE for related equipment (the DOE 

standards are for a more efficient type of service-over-counter equipment that has 

remote rather than built-in compressors). Specific legislative language will be provided to Committee staff shortly. 

Best-in-Class Appliance Deployment Program (BICAD) 

The House ACES bill includes a provision (section 214) that provides rebates to 

retailers for sales of very high-efficiency equipment (top 10% of current models) and 

to manufacturers of even more efficient equipment. The provision helps encourage 

retailers to sell the best equipment, and encourages manufacturers to develop even 

more efficient equipment. When funded, the provision is designed to replace the current manufacturer tax credit for high-efficiency appliances. As currently written, the 

provision is dependent on future appropriations. 

We think this is a promising program, but details are important. We do not support the House provision because many important details are missing (e.g., a focus 

on cost-effectiveness), other details are wrong (e.g., qualifying criteria are not revised frequently enough), and some incentives are overly generous and unlikely to 

be cost-effective to taxpayers or consumers. 

We have been working with the BICAD coalition and are well along in developing 

an improved bill. Some critical details still need to be worked out (e.g., length of 

lock-in periods between revisions and incentive levels), but we are optimistic that 

a provision acceptable to all can be finalized in the next few weeks. Regarding lockin periods, we need to balance the desire of retailers and manufacturers for long 

lock-in periods with the desire of consumers and taxpayers to revise standards when 

specific efficiency levels are no longer ‘‘best-in-class’’ (e.g., we don’t want to face the 

problem that ENERGY STAR has had to address of revisions not happening frequently enough). With regard to incentive levels, we believe that these should be 

capped at the value of the lifetime energy, water, and peak demand savings that 

result from this equipment relative to average equipment being sold. In all likelihood, a provision meeting these criteria can be negotiated soon and provided to this 

Committee for consideration. 

CONCLUSION

The four bills that are covered by this hearing all build on past bipartisan appliance standards bills and we support all four of them. Collectively these bills will, 

by 2030, reduce U.S. annual electricity use by about 56 billion kWh, equivalent to 

the amount of energy generated in a year by 14 typical 600-MW coal-fired baseload 

power plants. These standards will also reduce 2030 natural gas and propane use 

by more than 100 trillion Btu, enough to heat 1.8 million average American homes 

for a year. In addition, these standards will reduce 2030 greenhouse gas emissions 

by 39 million metric tons of carbon dioxide, equivalent to taking 7 million cars off 

the road for a year. 

We have negotiated the provisions in S. 2908, 3054, and 3059 with relevant trade 

associations and would call each of these consensus proposals. Achieving such consensus requires a few small modifications to the bills as filed; these are either listed 

in the appendix to my testimony or will be provided to Committee staff shortly. In 

the case of S. 1696, one trade association is supportive and another is not, but this 

bill only requires a study. This Committee has a long history of directing DOE to 

study the issue when consensus cannot be reached.,. S. 1696 falls into this tradition. 

We recommend that all of these bills be grouped together and reported out of 

Committee on a bipartisan basis. We also recommend that technical corrections to 

recent appliance standards legislation be incorporated in this bill, including establishment of separate standards for service-over-counter refrigerators. We would be 

happy to assist Members and Committee staff in working out the details. 

The federal appliance and equipment efficiency standards program is a great energy efficiency success story, with Congress adopting new standards in 1987, 1988, 

1992, 2005, and 2007. The ACELA bill, reported out last year, adds consensus efficiency standards on several products. The four bills before the Committee today 

should be reported out, combined with ACELA, and hopefully enacted by Congress 

in the next few months. This Committee has worked diligently in this direction and 

we thank you. 

This concludes my testimony. Thank you for the opportunity to present these 

views. 
29 

APPENDIX: SPECIFIC LEGISLATIVE CHANGES

To S. 3059 

On page 3, line 3, delete the word ‘‘may’’. 

RATIONALE: Congress adopted water-efficiency standards for these products in 

the Energy Policy Act of 2005 and EISA 2007; ‘‘may’’ no longer applies. The relevant 

trade association, the Association of Home Appliance Manufacturers (AHAM) has 

agreed to this change. 

Since ‘‘smart’’ end-use appliances and equipment can interact with the grid in unexpected ways, NEMA suggests that DOE consult with NIST, which is charged by 

Congress to coordinate Smart Grid communications standards development. ACEEE 

concurs. Potential specific references to EISA 2007: 

Page 64 Line 8 ‘‘(7) INCORPORATION OF SMART GRID TECHNOLOGIES.—The Secretary, in consultation with the Director of the National Institute of Standards and Technology, may incorporate smart grid 

technologies or capabilities into standards under this section, including 

through— 

Page 65 Line 4 ‘‘(ii) other smart grid goals, including those as specified 

in Sec. 1301 of the Energy Independence and Security Act of 2007 (15 USC 

17381).’’. 

Additional amendments to be provided shortly: 

Schedule for revising new heat pump pool heater standard (AHRI and 

ACEEE)efinements to provisions on implementation of regional standards (HARDI, 

AHRI, NEMA, and ACEEE) 

Refinements on smart grid (AHAM, AHRI, GridWise, and ACEEE) 

To S. 3054 

On page 4, lines 1-2, the bill reads, ‘‘(B) INCLUSIONS.—The term ‘portable electric spa’ includes—.’’ These inclusions are typical characteristics of a portable electric spa, but are not obligatory features. In order to avoid confusion, we recommend 

revising this language to read ‘‘(B) INCLUSIONS.—A ‘portable electric spa’ may include—.’’ 

To S. 2908 

Amendments to be provided shortly (AHRI and ACEEE) 

RECOMMENDED ADDITIONS

Technical amendments 

Add all of the technical amendments on appliance and equipment efficiency standards contained in the House ACES bill. These were originally developed by Senate 

Energy Committee staff and given to the House. They should also be adopted by 

the Senate. In addition, two other technical amendments are needed as follows: 

(1) In section 161(a)(3), ‘‘(42 U.S.C. 6313(a)(1))’’ should be replaced by ‘‘(42 

U.S.C. 6314(a)(1))’’. RATIONALE: Provide the correct U.S. Code reference. 

(2) In section 161(a)(12), the phrase ‘‘following lamp efficacy, new maximum 

wattage, and CRI standards:’’ should be replaced with ‘‘requirements shown in 

the tables:’’ RATIONALE: The tables include minimum product life requirements for some products in addition to the listed requirements. 

Furthermore, to avoid the need for yet another round of technical amendments 

after this one, there are a couple of places where S. 3059 amends the same section 

of law as the House technical amendments. These amendments will need to be reconciled as noted below: 

(1) Section 7(a) of the pending bill modifies the same section of law as section 

161(a)(2) of the House-passed technical amendments. 

(2) The paragraph numbering in Section 6(a)(3) of the pending bill will need 

to be reconciled with the corrections carried out by Section 161(a)(6) of the 

House-passed technical amendments. 

(3) Section 5, paragraph 2 of the pending bill and Section 161(a)(16) of the 

House-passed technical amendments both correct duplicate paragraph numbering in section 332 of the underlying law. They should be reconciled. 

Service-Over-Counter Self-Contained Commercial Refrigeration Systems 

Suggested language will be provided shortly by AHRI and ACEEE. 

The CHAIRMAN. Thank you very much. 
30 

Mr. Yurek. 

STATEMENT OF STEPHEN YUREK, PRESIDENT AND CEO, AIRCONDITIONING, HEATING, AND REFRIGERATION INSTITUTE 

(AHRI) 

Mr. YUREK. Thank you, Mr. Chairman, Senator Murkowski. 

I am pleased to be here today to discuss our support for S. 3059 

and S. 2908. My name is Steve Yurek, and I am the president and 

CEO of the Air Conditioning, Heating, and Refrigeration Institute. 

This is a trade association that represents the manufacturers of 

heating, cooling, water heating, and commercial refrigeration 

equipment. 

To begin, I want to commend the committee and you—Mr. Chairman, Senator Murkowski—for these bills. We appreciate the opportunity to work closely with your staffs while they were being crafted, and we appreciate their willingness to take our suggestions and 

concerns into account. 

I will briefly comment on the key provisions of these bills that 

we support. First, we strongly support S. 2908. This legislation requires the Department of Energy to conduct a rulemaking to consider the revision of its residential water heater test procedure. Updating the test procedure will ensure the accurate efficiency ratings 

for these products and will ultimately enable true energy savings. 

Second, we are pleased that you included in S. 3059 the consensus agreement establishing for the first time an efficiency 

standard for heat pump pool heaters. This standard will provide 

stability in the marketplace by leveling the playing field to enable 

all manufacturers to compete fairly. 

I also want to let you know that we recently reached an agreement with the advocacy groups to establish a Federal efficiency 

standard for a specific type of commercial refrigeration product 

known as service over-the-counter. This is the type of product from 

which you might, for example, grab a sandwich before you board 

an airplane. 

This standard is necessary because legislation enacted by Congress in 2005 establishing Federal efficiency standards for commercial refrigeration products overlooked this product category. We 

will soon submit the agreement along with proposed legislative language to your committee for consideration. These agreements are 

excellent examples of industry and advocacy groups working together to achieve a common goal. 

Finally, I want to express AHRI’s support for provisions in S. 

3059 that implement our consensus agreement on residential heating and cooling equipment. This agreement is another great example of us working together to save energy and improve the environment. 

I would also like to affirm the statement you made when introducing the bill, Mr. Chairman. When discussing our consensus 

agreement, you said, ‘‘It is a testament to what can be achieved for 

the Nation when interest groups work together with a commitment 

to the common good.’’ We are happy to have been able to do this 

for the common good. 

Last October, residential heating and cooling equipment manufacturers joined with the environmental community to forge an 
31 

agreement on energy efficiency standards that will have a significant impact on U.S. energy demand for decades and that will protect the environment. We are pleased that the major provisions of 

this agreement are included in S. 3059. 

The consensus agreement, which will begin to take effect in 2013, 

assumes final passage of this legislation, represents a major step 

forward in the Nation’s drive to increase energy efficiency and 

shows that it is possible for industry and energy efficiency advocates to move beyond acrimonious debates and work together to address energy and environmental concerns. 

It establishes efficiency standards for residential furnaces in 2 

regions and for central air conditioners and heat pumps in three 

regions. In hotter areas like the Southeast and Southwest, the new 

standards for furnaces are appropriate for that climate. The same 

is true in reverse for air conditioners. In this way, the consensus 

agreement lays the groundwork for significant energy savings and 

makes heating or cooling homes more cost effective regardless of 

climate. 

The agreement also contains an important provision that will 

allow the next generation of homes to be more energy efficient by 

providing States the option of adopting building codes for new construction with more stringent energy efficiency levels than they can 

under existing law. 

In the past, equipment manufacturers and advocates would have 

fought over these regulations through rulemakings. Together, we 

have found a compromise that works and saves energy and protects 

the environment. It took about a year, but the results, once the 

agreement is fully implemented, will save the Nation about 3.7 

quadrillion BTUs, or quads, of energy between 2013 and 2030. 

That is enough to provide for the energy needs of 18 million households for a year. 

These energy savings will result in an annual greenhouse gas 

emission reduction of 23 million metric tons of CO2 in 2030, an 

amount equal to that produced by approximately 4 million cars 

every year. 

Finally, this agreement will ultimately save consumers about 13 

billion in today’s dollars, even considering the increased cost of 

more efficient equipment. 

I will end with a plea. For this historic agreement to become reality, it must be enacted into law because some of the provisions 

currently the DOE does not have the authority to enact, such as 

the building code provisions. So if you do not act, these provisions 

will not become a reality. 

Again, I want to thank the committee and your staff for their 

hard work in putting this bill together, and I want to thank you 

for the opportunity to testify. 

[The prepared statement of Mr. Yurek follows:] 

PREPARED STATEMENT OF STEPHEN YUREK, PRESIDENT AND CEO, AIRCONDITIONING, HEATING, AND REFRIGERATION INSTITUTE (AHRI) 

Mr. Chairman and Members of the Committee: 

I am pleased to be with you today to discuss our support for S. 3059 and S. 2908. 

My name is Stephen Yurek, and I am president and CEO of the Air-Conditioning, 

Heating, and Refrigeration Institute, or AHRI—the trade association that rep-
32 

resents manufacturers of heating, cooling, water heating, and commercial refrigeration equipment. 

To begin, I want to commend the committee and you, Mr. Chairman, for these 

bills. We appreciate the opportunity to work closely with your staff while they were 

being crafted, and we appreciate their willingness to take our suggestions and concerns into account. I will briefly comment on the key provisions of these bills. 

First, we strongly support S. 2908. This legislation requires the Department of 

Energy to conduct a rulemaking to consider the revision of its residential water 

heater test procedure. Updating the test procedure will ensure accurate efficiency 

ratings for these products and will enable true energy savings. 

Second, we are very pleased that you included in S. 3059 the consensus agreement establishing for the first time an efficiency standard for heat pump pool heaters. This standard will provide stability in the marketplace by leveling the playing 

field to enable all manufacturers to compete fairly. The agreement is also an excellent example of industry and advocacy groups working together to achieve a common goal, in this case more energy efficient heat pump pool heaters. 

Finally, I want to express AHRI’s support for provisions in S. 3059 that implement our consensus agreement on heating and cooling equipment—this agreement 

is another great example of industry and advocacy groups collaborating to save energy and improve the environment. I would also like to associate AHRI with the 

statement you made when introducing the bill, Mr. Chairman. When discussing the 

efficiency standard consensus agreement that’s included in the bill, you said, and 

I quote, ‘‘It is a testament to what can be achieved for the nation when interest 

groups work together with a commitment to the common good.’’ We are happy to 

have been able to do this for the common good. 

Last October, residential heating and cooling equipment manufacturers teamed 

up with the environmental community to forge an agreement on energy efficiency 

standards that will have a significant impact on U.S. energy demand for decades 

and that will help protect the environment. We are very pleased that the major provisions of this agreement have been included in S. 3059. 

The consensus agreement, which will begin to take effect in 2013—assuming final 

passage of this legislation—represents a major step forward in the nation’s drive to 

increase energy efficiency and shows that it is possible for industry and energy efficiency advocates to move beyond acrimonious debates and work together to address 

energy, environmental, and economic problems. 

It establishes efficiency standards for residential furnaces in two regions and for 

central air conditioners, and heat pumps in three regions. In hotter areas, like the 

southeast and southwest, the new standards for furnaces are appropriate for that 

climate. The same is true, in reverse, for air conditioners. In this way, the consensus 

agreement lays the groundwork for significant energy savings and helps make heating or cooling homes more cost-effective, regardless of climate. 

The agreement also contains an important provision that would allow the next 

generation of homes to be more energy efficient by providing states the option of 

adopting building codes with more stringent energy efficiency levels than they can 

under existing law. n the past, equipment manufacturers might have simply opposed, on economic and marketplace grounds, stricter standards for energy use. At 

the same time, advocates might have sought stronger standards and, if unsuccessful, filed suit over efficiency standards they didn’t find stringent enough. But at a 

time when government regulatory policies and an unpredictable economic climate 

have created uncertainty in the marketplace, our two groups sat down and worked 

things out cooperatively. 

It took about a year, but the results, once the agreement is fully implemented, 

will save the nation about 3.7 quadrillion Btu (quads) of energy between 2013 and 

2030. That’s enough to provide for the energy needs of 18 million households for a 

year. These energy savings will result in annual greenhouse gas emission reductions 

of 23 million metric tons of CO2 in 2030, an amount equal to that produced by approximately 4 million cars every year. 

Finally, this agreement will ultimately save consumers about $13 billion in today’s dollars, even after considering the increased cost of more efficient equipment. 

I will end with a plea: For this historic agreement to become reality in the national marketplace, it must be enacted into law. If we cannot do it in this bill, we 

must do it in another. Here’s why: 

Absent firm direction from Congress on this, the Department of Energy is continuing its rulemaking on the next iteration of efficiency standards for residential 

central air conditioners, heat pumps, and furnaces. While the Department can implement portions of the agreement, other portions such as the building code provisions require Congressional action. he new building code provisions in this agreement must be enacted by Congress, as DOE currently does not have the statutory 
33 

* Map has been retained in committee files. 

authority to promulgate them. If Congress does not act, those provisions will not become reality. 

By taking the initiative, we have potentially saved the Department of Energy— 

and thus America’s taxpayers—millions of dollars, and have saved DOE staff countless hours of work—hours that can be spent on other activities. I say ‘‘potentially,’’ 

however, because if Congress does not move quickly to enact this agreement into 

law, those dollars and man-hours will not be saved, and the effort we’ve collectively 

put forth and the compromises we’ve made will be for naught. That would be a sad 

thing for all of us, but particularly for taxpayers and for the environment. 

Again, I want to thank the Committee and your staff for the hard work in putting 

this excellent bill together, and I thank you for the opportunity to testify, Mr. Chairman. 

ADDENDUM: FACT SHEET ON AIR CONDITIONER, FURNACE, AND HEAT PUMP EFFICIENCY

STANDARDS AGREEMENT (ESSENTIAL COMPONENTS INCLUDED IN S. 3059)

The nation’s leading manufacturers of residential central air conditioners, furnaces, and heat pumps today signed an agreement with the nation’s leading energy 

efficiency advocacy organizations that will establish new federal standards for those 

products.he agreement, which involved months of intense negotiations, was signed 

by executives of Air-Conditioning, Heating, and Refrigeration Institute (AHRI), the 

American Council for an Energy Efficient Economy (ACEEE), Alliance to Save Energy (ASE), the Natural Resources Defense Council (NRDC), the Northeast Energy 

Efficiency Partnership (NEEP), the Appliance Standards Awareness Project (ASAP) 

and the California Energy Commission (CEC), the Northwest Power and Conservation Council (NWPCC), and more than a dozen individual furnace and air conditioner manufacturers. 

This momentous agreement strikes a balance between the desire for greater state 

and regional flexibility and the need for a uniform marketplace. It also accounts for 

the long term energy future of the nation by allowing for more efficient systems to 

be installed in new homes which will last for many decades to come. The parties 

that reached this consensus agreement recognize that the time has to come to 

change the status quo with regard to energy efficiency in the residential built environment and believe this proposal represents a tremendous leap forward towards 

a more energy efficient future. 

The signatories agreed to jointly submit this proposal to Congress and support its 

inclusion in the energy legislation currently under consideration. The groups will 

also recommend that the Department of Energy (DOE) promulgate a rule adopting 

the agreed upon regions and efficiency standards, as authorized in current law. 

Creating Regions 

Under the agreement, the U.S. is divided into 3 regions: (1) the north, comprised 

of states with population-weighted heating degree days (HDD) equal to or greater 

than 5000; (2) the south, comprised of states with population-weighted HDD less 

than 5000; and the southwest, comprised of Arizona, California, Nevada, and New 

Mexico. The regions are shown on the map:* The federal minimum energy efficiency 

standards are shown in Table 1. In the north, most furnaces will be required to 

have an efficiency of 90% or more, essentially requiring condensing furnaces. This 

is a change from the current national standard of 78%. In the south, central air conditioners will be required to have a SEER of 14, up from the present national requirement of 13 SEER. Heat pump and oil furnace standards will rise on a nationwide basis. The standards apply to residential single-phase air conditioners and 

heat pumps less than 65,000 Btu/h of cooling capacity (except through-the-wall and 

small duct high velocity products), and single-phase weatherized and non-weatherized forced-air furnaces (including mobile home furnaces) below 225,000 Btu/h heat 

input. or split air conditioners, minimum EER values (energy demand on a very hot 

day) also are specified for the states of Arizona, California, Nevada, and New Mexico. 
34 

SEER = seasonal energy efficiency ratio; EER = energy efficiency ratio; HSPF = 

heating seasonal performance factor; AFUE = annual fuel utilization efficiency. 

In addition, under the agreement, DOE would be required to publish a final rule 

not later than June 30, 2011, to determine whether standards for through-the-wall 

and small duct high velocity air conditioners and heat pumps should be amended. 

New standards would apply to products manufactured on or after June 30, 2016. 

Building Codes 

The agreement would amend the Energy Policy and Conservation Act (EPCA) to 

allow building codes to provide for building energy budgets and baseline building 

designs to include covered equipment having an efficiency greater than the federal 

minimum standard, up to specified levels, as long as at least one option is made 

available to meet the code through the use of covered equipment at the federally 

established minimum level. The agreement sets new construction/major renovation 

standards for each region that states may incorporate into their building codes. 

These are summarized in Table 2. 

These requirements would not apply to simple one-for-one replacement of products 

in existing buildings as long as the replacement would not result in an increase in 

capacity of more than 12,000 Btu/h for central air conditioners/heat pumps or more 

than 20 percent for other covered products. 

Implementation Timetable 

The new standards will take effect in 2013 for non-weatherized furnaces and in 

2015 for air conditioners, heat pumps, and weatherized furnaces. 

The effective date for the next iteration of the above standards will be: 
35 

• January 1, 2019 for non-weatherized furnaces 

• January 1, 2022 for air conditioners/heat pumps and weatherized furnaces (gaspacks). 

Multiple Metrics 

The agreement allows DOE in the future to use more than one efficiency metric 

for a product. However, in the case of air conditioners and heat pumps, the stakeholders agreed to work together to try to negotiate future efficiency metrics, and 

DOE can act on its own to establish new metrics only if the stakeholders cannot 

reach agreement after a year of discussion. 

Energy Equivalents 

Between now and 2030, the agreement also will save 3.7 quadrillion Btu of energy 

nationwide, which is equivalent to all the energy consumed by approximately 18 

million households in a single year, or enough to meet the annual energy needs of 

either Georgia, Massachusetts, Michigan, Missouri, North Carolina, or Virginia. The 

new standards would raise the minimum efficiency of residential central air conditioning systems by about 8 percent and furnaces by about 13 percent and would result in a 5 percent reduction of the total heating energy load and a 6 percent reduction of the total cooling energy load in 2030. 

These energy savings will result in annual greenhouse gas emission reductions of 

23 million metric tons of CO2 in 2030, an amount equal to that produced by approximately 4 million cars every year. 

Monetary Saving 

The new standards are projected to save U.S. consumers about $13 billion in today’s dollars between 2013, when the new standards begin to take effect, and 

2030—taking into account the incremental cost of the more efficient equipment. 

Engineering Data Release 

High performance equipment works best and saves the most money when 

matched to specific climates. To help contractors and consumers select the most appropriate equipment, manufacturers will make two types of information available in 

standard form, for use in electronic tools. They will publish the Sensible Heat Ratio 

(SHR) at 82F, a measure of the ability to remove moisture at part load. This is particularly important in humid regions. And, they will provide equipment performance 

data for each temperature bin. This will help software developers and contractors 

recommend the equipment that is most appropriate to very hot regions, for example. 

Agreement Text 

Full text of agreement can be found at www.ahrinet.org/content/ 

agreementonenergyefficientstandardsl985.aspx 

The CHAIRMAN. Thank you very much. Mr. Pitsor. 

STATEMENT OF KYLE PITSOR, VICE PRESIDENT, GOVERNMENT RELATIONS, NATIONAL ELECTRICAL MANUFACTURERS ASSOCIATION (NEMA) 

Mr. PITSOR. Good morning, Mr. Chairman and Ranking Member 

Murkowski. 

I am Kyle Pitsor, vice president for Government relations for the 

National Electrical Manufacturers Association. NEMA’s president 

and CEO, Evan Gaddis, couldn’t be here today to deliver our testimony due to surgery and sends his regrets. 

NEMA is the trade association of choice for the electrical industry, comprised of over 400 manufacturers, representing about 

350,000 jobs. For more than 8 decades, NEMA has been at the forefront of developing electrical standards, promoting electrical safety, 

and providing solutions to our country’s energy challenges. 

It is my pleasure to provide our support for S. 3059, the National 

Energy Efficiency Enhancement Act of 2010, particularly section 6 

on outdoor lighting. Because of the significant energy utilized by 

outdoor lighting, manufacturers, lighting designers, environmental 

advocates, and other stakeholders spent countless hours over the 
36 

past many months to develop a consensus provision that is contained in this legislation. 

Back in March 2009, I had the opportunity to testify before this 

committee. I noted that we felt the time was ripe for the establishment of national energy efficiency standards for outdoor lighting. 

I am, therefore, pleased to sit here today to report that despite the 

complexities surrounding this provision, including some doubts 

that a consensus could be reached, we did arrive at a consensus 

provision that is contained in section 6. 

This provision would set efficiency standards for the majority of 

pole-mounted outdoor lighting fixtures. As you drive home today, 

if you look at the tall street and parking lot lights illuminating the 

roadways, the parking lots, and local streets, each of these lights 

will be affected on a national level as a result of this legislation. 

The standards set forth in three phases. The first phase, or Tier 

1, becomes effective upon 3 years after date of enactment of this 

provision. It sets a light source efficiency standard which also 

would limit sky glow and light trespass into neighboring properties. 

The Tier 2 standards would be developed through a rulemaking 

process at the Department of Energy, and Tier 2 would become effective on January 1, 2016, or 3 years after the final rule was published. 

Finally, the Tier 3 standards would also be established through 

a DOE rulemaking procedure effective on January 1, 2021. 

In addition to the tiered standards, this legislation also regulates 

the efficiency of 2 types of lamps that are primarily used outdoors, 

and it would end the manufacture of general purpose mercury 

vapor lamps in the year 2016. 

I would now like to turn to several other provisions in the legislation. First, NEMA supports provisions in section 4, which clarifies the efficiency standards for Class A external power supplies 

used in certain security and life safety alarm systems. 

Second, NEMA supports the amendments proposed to the underlying statute that are contained in section 5. We believe it is important that channel partners in the distribution and sale of federally 

regulated products share the responsibility, along with manufacturers, in making certain that consumers and end-users receive the 

benefit of purchasing energy efficiency products. We look forward 

to working with the committee and other stakeholders on perfecting amendments to this provision. 

Finally, I would like to talk a few minutes on section 7 on smart 

grid. The inclusion of smart grid considerations in the energy conservation title recognizes the role and potential of logic-based intelligence and communications in efficiency. Providing for the consideration of smart attributes in future energy efficiency provisions is 

a forward-looking provision. Attached to my testimony are several 

suggestions, modifications we suggest to take into account the 

smart grid standards work that is being managed by the National 

Institutes of Standards and Technology, NIST, pursuant to Title 13 

of the Energy Security Act of 2007. 

Mr. Chairman, NEMA members are excited about the innovation 

opportunities and possibilities represented by this legislation. 

NEMA is pleased to lend our support for this legislation and the 
37 

leadership shown by you and Ranking Member Murkowski and 

your other colleagues in advancing this legislation. 

Thank you for the opportunity for NEMA to testify, and we 

would be pleased to answer any questions. 

[The prepared statement of Mr. Pitsor follows:] 

PREPARED STATEMENT OF KYLE PITSOR, VICE PRESIDENT, GOVERNMENT RELATIONS, NATIONAL ELECTRICAL MANUFACTURERS ASSOCIATION (NEMA) 

Chairman Bingaman, Ranking Member Murkowski, and members of the committee, my name is Kyle Pitsor. I am Vice President of Government Relations for 

the National Electrical Manufacturers Association (NEMA). I appreciate this opportunity to testify on the importance of this significant legislation before the Committee. 

NEMA is the trade association of choice for the electrical manufacturing industry. 

It represents a global network of more than 400 large, medium, and small businesses that manufacture products used in the transmission, distribution, control, 

and end-use of electricity, including the lighting technologies. For more than eight 

decades, NEMA has been at the center of developing electrical standards, promoting 

electrical safety, and providing solutions to our country’s energy challenges. 

It is my pleasure to provide our support for S. 3059, the National Energy Efficiency Enhancement Act of 2010, particularly section 6, Outdoor Lighting. This 

ground-breaking consensus provision will, for the first time ever, set federal efficiency standards for pole-mounted outdoor lighting. 

In a 2007 Department of Energy report, it was estimated that outdoor lighting 

consumes more than 178 terawatt-hours annually. This is equivalent to the annual 

output of 25 nuclear power plants (1000 MW each) or 42 coal-burning plants (600 

MW each). 

Because of the significant energy utilized by outdoor lighting, lighting manufacturers, lighting designers, environmental advocates and other stakeholders have 

spent countless hours over the past year negotiating the details specified in the outdoor lighting provision contained in this legislation. Back on March 19, 2009, I testified for NEMA before this Committee noting that we felt the time was ripe for the 

establishment of national energy efficiency standards for outdoor lighting products, 

and noted that we hoped that a consensus proposal could be negotiated for Congressional consideration. I am therefore pleased to sit before you today to report that 

despite the complexities surrounding this provision and the varying stakeholder interests, including doubts by some that a consensus could be arrived at, that Section 

6 on outdoor lighting is a win-win consensus provision. 

Section 6 would set efficiency standards for the majority of pole-mounted outdoor 

lighting fixtures. To better understand the widespread impact of this agreement, as 

you drive home today, look at the tall street and parking lot lights illuminating the 

roadways, parking lots, and local streets; each of these lights will be affected, on 

a national level, as the result of this ground-breaking consensus. 

Because of the multifaceted nature of this agreement, the standards set forth require three phases, or ‘‘tiers’’ for respective efficiency levels. 

Three years from the enactment date of this provision, Tier 1 will become effective. In this phase, light source efficiency, expressed as minimum task lumen per 

watts (LPW), will be mandated. These LPW levels are based on specific lighting 

characteristics, such as backlight, up-light, and glare (BUG) ratings, which limit 

sky-glow and light trespass into neighboring properties. 

Tier 2 standards will be established by the Department of Energy (DOE). Such 

standards must be published in a final rule by DOE no later than January 1, 2013, 

or 33 months after enactment, whichever is later. The requirements for Tier 2 become effective January 1, 2016, or 3 years after the final rule is published. 

Finally, the Tier 3 standards will be established by DOE in a rulemaking beginning January 1, 2015. Tier 3 standards are only set if the DOE determines amended 

standards are necessary. If DOE determines in favor of setting Tier 3 standards, 

a final rule must be published by January 1, 2018, with an effective of January 1, 

2021. 

In addition to the tiered standards, this legislation regulates the efficiency of two 

types of lamps that are primarily used outdoors. After January 1, 2016, high output 

double-ended quartz halogen lamps (a type of high-wattage incandescent lamp) 

must have a minimum efficiency of 27 LPW for lamps with a minimum rated initial 

lumen value of 6,000 and a maximum initial lumen value of 15,000. Also, 34 LPW 

is required for lamps rated with initial lumen value greater than 15,000 and less 

than 40,000. 
38 

I earlier mentioned the significant energy used in outdoor lighting. Should this 

provision be enacted, it is estimated that by 2030, the annual savings will range 

from 25 to 42 terawatt hours (billion kWh) per year (equivalent to 3 to 6 nuclear 

power plants or 6 to 10 coal-fired plants)—and annual savings of $2.8 billion to $5.1 

billion on energy costs. 

I would now like to turn to several other provisions in the legislation. 

First, NEMA supports the provisions in Section 4, which clarifies efficiency standards for Class A external power supplies for certain security or life safety alarms. 

NEMA’s signaling, protection, and communications member companies have participated in addressing these standards and their application to security alarm applications. 

Second, NEMA supports the amendments proposed to the Energy Policy and Conservation Act (EPCA) contained in Section 5 on ‘‘Prohibited Acts.’’ We believe it is 

important that channel partners in the distribution and sale of federally-regulated 

products share responsibility in making certain that consumers and end-users receive the benefit from purchasing energy-efficient products and equipment that meet 

federal minimum efficiency standards. Today, EPCA places that responsibility only 

on manufacturers and private labelers, which creates a loophole when it comes to 

compliance in the marketplace. The proposed language would ensure that all players in the manufacturing, sales, and distribution channels have a responsibility. 

Finally, I would like to touch upon Smart Grid (Section 7). The inclusion of Smart 

Grid considerations in the energy conservation title recognizes the role and potential 

of logic-based intelligence in efficiency. Many devices today are approaching their 

theoretical maximum efficiency—large motors and distribution transformers, for example, are often 95 to 99 percent efficient. The next realm of conservation will come 

from ‘‘smart’’ devices that are communication-enabled and provide real-time cost 

and performance information to the end-user. Providing for consideration of ‘‘smart’’ 

attributes in future energy efficiency standards will also support our industry’s efforts in innovation and design for the next generation of products. Attached to my 

testimony are several suggestions for modifications to the provision to take into account the Smart Grid standards work that is being managed by the National Institute of Standards and Technology (NIST) pursuant to Title 13 of the Energy Independence and Security Act of 2007. We would be pleased to discuss these suggestions with the Committee as the bill is considered. 

Mr. Chairman, NEMA members are excited about the innovation possibilities and 

energy efficiency opportunities this legislation will support. Our members are leaders in providing energy-efficient solutions to meet our nation’s energy challenges 

through our continuous research and development into new products and technological features. I am pleased to lend our support for this legislation and the leadership shown by you and your colleagues in advancing this bill. 

Thank you, and I would be pleased to respond to any questions. 

PROPOSED LANGUAGE TO SECTION 7 ON SMART GRID

Since ‘‘smart’’ end-use appliances and equipment can interact with the grid in unexpected ways, NEMA suggests that DOE consult with NIST, who is charged by 

Congress in coordinating Smart Grid communications standards development. Potential specific references to EISA 2007: 

Page 64 Line 8 ‘‘(7) INCORPORATION OF SMART GRID TECHNOLOGIES.—The Secretary, in consultation with the Director of the National Institute of Standards and Technology, may incorporate smart grid 

technologies or capabilities into standards under this section, including 

through— 

Page 65 Line 4 ‘‘(ii) other smart grid goals, including those as specified 

in Sec. 1301 of the Energy Independence and Security Act of 2007 (15 USC 

17381).’’. 

The CHAIRMAN. Thank you very much. 

Before we go on to questions, let me defer to Senator Murkowski 

for any statement she would like to make, if she would like? 

Senator MURKOWSKI. I have got nothing this morning. 

The CHAIRMAN. OK. OK. Let me go ahead with a few questions 

then. 

Let me start with a question to you, Ms. Hogan. You make reference to the fact that existing statutory language constrains the 

department’s enforcement efforts in several ways. I think that is a 
39 

quote from page 4 of your testimony, and you did cite the statutory 

cap on penalties and the statutory process for assessing penalties 

as examples. 

Could you provide the committee with DOE’s specific recommendations for updating that statue in the enforcement area so 

that we could consider that? 

Ms. HOGAN. We would really appreciate the opportunity to do 

just that, to develop some recommendations regarding the enforcement of these standards and to provide that in the form of technical drafting assistance. 

The CHAIRMAN. That would be very helpful to us. 

Mr. McGuire, let me ask, you made reference to this—to the potential of smart grid standards or use as integrated into the smart 

grid. You say that they cannot be realized, that potential cannot be 

realized without enactment of the Best-in-Class Appliance Deployment Program, providing incentives for deployment of smart gridenabling appliances. 

What is the status of the discussions or negotiations that are 

taking place there regarding this best-in-class, and do you think we 

will have an agreement in the next several weeks that we could 

consider if we are able to move ahead with legislation in this area? 

Mr. MCGUIRE. Thank you, Mr. Chairman. 

I think my point was that if best-in-class provision is also enacted, the full potential of the provision in your bill would be realized. I think when we are talking about modifying these appliance 

standards to encourage smart appliances, these standards would go 

into effect several years forward. 

The best-in-class provision that is being negotiated would provide 

incentives earlier than that for manufacturers to get these products 

out so consumers could learn about them and use them and start 

taking advantage of them. 

The negotiations are going on right now. I am confident that they 

will be successful. We look forward to having all the parties be able 

to come to the committee in the near future in time for legislation 

that could move. 

The CHAIRMAN. All right. That would be useful. I think if we are 

able to proceed with the full Senate consideration of our legislation 

and able to report these bills as part of that, that would be very 

useful. 

Steve Nadel, let me ask you, you in your testimony have proposed several amendments, refinements to the smart grid language 

in S. 3059, a package of technical amendments to EISA of 2007, a 

proposed standard for service over-the-counter refrigeration systems. I guess the request would be that to reduce confusion, could 

you be sure to try to submit them to the committee with a cover 

letter from both the energy advocates such as yourself and also interested manufacturing associations for these changes? 

Mr. NADEL. Yes, we would be happy to. A lot of them we have 

already reached agreement on. Steve Yurek talked about the service over counter, he mentioned in his testimony. We are doing final 

wordsmithing now. 

The rest of them are things we are, by and large, negotiating 

with people at this table, and we are just trying to do final 

wordsmithing. 
40 

The CHAIRMAN. OK. That is very good. 

Why don’t I defer to Senator Murkowski for any questions she 

has? 

Senator MURKOWSKI. Thank you, Mr. Chairman. 

I want to thank all of you who are here with us this morning and 

acknowledge your work as advocates and industry representatives, 

those folks really working together to make a difference here when 

it comes to efficiencies. 

I will tell you I am at that point where it is like, boy, we are 

talking now about Xbox 360s and hot food holding cabinets and hot 

tubs, and the real question is, OK, we are going to go ahead and 

we are going to build this legislation and we are going to have 

these product standards in here. But I don’t know about you, I 

have got teenage boys. My world is ever-changing when it comes 

to things, gadgets, things that use energy. 

So, the question I think is fair and appropriate in terms of at 

what point is it appropriate to just say we here in Congress should 

not be in the business of legislating product standards? But I think 

we recognize that this technology moves pretty quick out there, and 

more quickly perhaps than the DOE rulemaking process. 

I guess the question would be, and I probably know the answer 

based on the comments from this morning. But in your opinion, is 

it best that the standards are addressed through the congressional 

process, as we are doing here now, or at what point is the administrative process better suited to handle what we are dealing with? 

I throw that out to any and all of you. Mr. McGuire, you are nodding first. I will let you go. 

[Laughter.] 

Mr. MCGUIRE. Thank you for noticing, Senator. 

I think what we have here today is a great example of the manufacturers and the environmental groups realizing that something 

should be done and needs to be done. We have a history, if you look 

back at some of the recent standards agreements, of doing this in 

a more expedited fashion than DOE could through its administrative processes. If we can bring a consensus agreement to the Congress and the Congress agrees with it and enacts it, it is going to 

be implemented much sooner. 

Now, DOE is going through some reforms, and that is good. But 

we really think this is a good way to get the energy efficiency delivered in a more expedited fashion. 

Senator MURKOWSKI. Mr. Nadel. 

Mr. NADEL. Yes, I would just add that we have a long history of 

working together. I first worked with Joe McGuire on negotiating 

some air conditioner standards that were in EPAct 1992. So we 

know each other well. We can come up with creative solutions 

sometimes that is very difficult for DOE. 

Also, DOE is very much backed up. They are catching up. Hopefully, they will catch up, and maybe they could do more of this. But 

we are able to do a lot of this stuff without distracting from the 

revision process they are doing. 

Although I would note that DOE has recently announced they 

are about to start a television rulemaking, and that is a new product where DOE is taking the lead on. 
41 

Senator MURKOWSKI. I had appreciated that so many of you had 

come together with the agreement. When we were taking up the 

energy bill earlier last spring, you weren’t quite ready at that point 

in time with the standards for the outdoor lighting, for the furnaces, and the air conditioners. Even though we had moved our bill 

out, that work continued, and I think that that was exceptionally 

important and speaks to the collaboration that goes on. 

Mr. Pitsor, you wanted to add something? 

Mr. PITSOR. I would just add that I think one other vehicle that 

the Congress has potentially put in place is the ability for DOE to 

go to a direct final rule, where there is a consensus deal between 

legislative cycles. If we are able to come together on a consensus 

proposal, the statute would allow us to provide that directly to 

DOE, and they could go to a direct final rule on an expedited basis 

if there is no objection. 

So that would avoid Congress having to legislate it every time 

but provide that additional ability for DOE to go faster. 

Senator MURKOWSKI. Let me ask another question, and this is 

about proprietary data. Do you think that the proprietary data is 

protected within the appliance standards program? How much of 

an issue is this? 

Mr. Yurek. 

Mr. YUREK. Senator Murkowski, I believe under the current provisions, it is. We have some concerns in the proposal, in the data 

information that is being requested under this legislation, where it 

is getting very specific, and we want to make sure and we have 

been working with Steve and the different groups to see how we 

can make sure we can address that by allowing that data to be aggregated by the trade associations rather than by individual manufacturers to help protect that confidentiality. 

Senator MURKOWSKI. So are you comfortable with the bills that 

we have under review this morning, that that data is adequately 

protected? 

Mr. YUREK. The current bill, we have some concerns, as I said. 

But we are working with Steve and the efficiency groups to see if 

we can put some language in there to allow the aggregation of data 

versus the responsibility on individual manufacturers for that information to be disclosed. 

Senator MURKOWSKI. I didn’t mean to ignore you at the end, Ms. 

Hogan. Obviously, coming from the department, you might have 

something that you want to say in terms of the comments that 

were made by the other gentlemen and whether or not we leave it 

to DOE through their rulemaking. 

Ms. HOGAN. Certainly, we believe we can make tremendous 

progress through the DOE rulemaking efforts. I think one of the 

things we always look for when legislation does come through to 

set standards is the ability for the Department of Energy to go 

back and review and revise on a schedule that will deliver the savings that are there for the country. 

Senator MURKOWSKI. Are you able to do that quickly enough, in 

your opinion? 

Ms. HOGAN. I think we now believe the program that we have 

stood up at the Department of Energy can do what is necessary to 
42 

develop the standards that are there, and we have a fair amount 

of authority within which to do that. 

Senator MURKOWSKI. Mr. Chairman. 

The CHAIRMAN. Thank you very much. 

Let me call on Senator Menendez. He has made a very substantial contribution to these efforts. He proposed a number of efficiency improvements when we did—we were considering ACELA 

this last year, and many of these are included in the consensus 

agreements that are incorporated in these bills. 

So thank you for your leadership on this, Bob, and you go right 

ahead. 

Senator MENENDEZ. Thank you, Mr. Chairman. Let me thank 

you and the ranking member for holding this hearing to improve 

energy efficiency standards for consumer products, which, in my 

mind, I think some of the best energy that we can create is one 

that we don’t use in terms of both cost for consumers, the consequences in terms of energy usage, and reducing pollution. 

So I am proud I have worked with both of you on the National 

Energy Efficiency Enhancement Act and glad we are able to include language similar to an amendment I offered last year authorizing the Department of Energy to use multiple metrics when establishing energy efficiency standards. 

I am particularly grateful for the opportunity to consider 2 bills 

that I introduced, the Green Gaming Act and the Energy Efficiency 

Products Act. I am pleased to have worked on the Green Gaming 

Act with all the major console manufacturers—Nintendo, Sony, 

Microsoft—as well as the Entertainment Software Association and 

the National Resources Defense Council to develop the legislation. 

All of these groups support the bill, which would require the Department of Energy to conduct a study to determine whether minimum efficiency standards are needed for video game consoles. Mr. 

Chair, I would like to submit 3 letters into the record documenting 

their support. 

The CHAIRMAN. I would be glad to include them. 

Senator MENENDEZ. Some consumers leave their game consoles 

on 24 hours a day. Depending on the console, that could use as 

much energy as 2 refrigerators, or $160 per year in electricity 

costs. So I want to commend the industry for looking for ways to 

make their products more efficient. I know they have been working 

with the Department of Energy on volunteer efficiency standards 

under the Energy Star program. Voluntary standards may well be 

enough, but the legislation would ensure that the department considers whether mandatory minimum standards are also needed. 

Just to shed a little light on this, Mr. Nadel, can you give us a 

sense of how prevalent video game consoles are in America and 

how much energy they use? 

Mr. NADEL. My understanding is about 40 percent of American 

households have at least one of these video game consoles. As you 

pointed out, if they are left on all the time they can use 100, 150 

watts continuously. That is as much energy as 2 refrigerators. So 

they are really an enormous source of energy use and one that has 

really grown in the last decade or so. 
43 

Senator MENENDEZ. If the consoles incorporated simple features 

like automatically powering off after, let us say, an hour of nonuse, 

how much would consumers save? 

Mr. NADEL. Right. I mean, you mentioned a few minutes ago 

that if left on all the time they can use $160 of electricity each 

year. If you can power off when not in use, that could save a good 

$100 of that, so more than 50 percent savings. 

Senator MENENDEZ. So I hope that that is an effort in which we 

are working with the industry to try to get to certain standards 

that both can help consumers save money, as well as save energy. 

I think the study puts us in a direction in which we can get what 

is the best way in which to achieve that goal I think is the next 

best step. 

Then I would just like to turn to the Energy Efficiency Products 

Act, which would set Federal efficiency standards for bottle-type 

water dispensers, commercial hot food holding cabinets, portable 

electric spas. We had thought of naming the bill ‘‘the Hot Food, Hot 

Tub, Cold Water Act,’’ but that seemed a little unwieldy. So—— 

[Laughter.] 

Senator MENENDEZ [continuing]. This bill proposes to make national the standards that several States have adopted for these 

products and thus end the regulatory patchwork currently facing 

manufacturers. We tried our very best to get as much consensus 

on efficiency bills. 

Mr. Nadel, can you tell us where you are at or where is the 

progress with the industry on these three products, and have you 

heard any opposition to the standards in your negotiations? 

Mr. NADEL. All right. Where we are now is in case of the spas, 

the hot tubs, as well as the hot food holding cabinets, we have gotten approval from both of the trade associations. One of them has 

already submitted a letter of support. One is working on that. So 

I think those 2 are consensus. 

In the case of the water dispensers, we have gotten the 2 big 

manufacturers, Oasis and General Electric, to support. There is a 

slight modification to the House-passed bill in your bill in order to 

bring General Electric onboard, for example. So we really are trying to modify and get consensus. 

There is a brand-new trade association, new to these products. 

The International Bottled Water Association, we just learned about 

them, and we gave them a copy of the bill a week ago. They are 

studying it. I am waiting for them to get back to us. 

Senator MENENDEZ. Great. It seems like we have made progress, 

and we look forward to working with the industry and with you in 

achieving the goals. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much. 

We received just yesterday a letter from the American Gas Association expressing concerns with section 2(e) of S. 3059, which requires furnaces manufactured after May 1 of 2013 for use in the 

northern region to have an efficiency of at least 90 percent. AGA 

proposes that this new standard only apply to new construction because the current provision ‘‘could ultimately encourage customers 

to repair rather than replace their furnace or, worse yet, not make 
44 

the needed changes in the common vented water heater venting 

system, which could result in a safety hazard.’’ 

I don’t know if this is something any of you folks—I guess, Mr. 

Yurek or Mr. Nadel, if either of you have a point of view on this 

proposal? I would like to include this letter from the AGA in the 

committee hearing record. 

The CHAIRMAN. But if either of you have a comment? Mr. Yurek, 

go ahead. 

Mr. YUREK. Yes, thank you, Mr. Chairman. 

We have been in discussions with AGA over these concerns, 

along with the other advocates. Actually, some of these points were 

points that were part of the rulemaking that was occurring on the 

furnace before the Department of Energy. 

There are some installations when you go to 90 percent where it 

is going to be more expensive. We saw the same thing in the air 

conditioning rulemaking before when we went from the 10 SEER 

to the 13 SEER. However, overall, the 90 percent makes sense for 

the northern region. It provides certainty and predictability for the 

manufacturers, as well as consumers. 

One of the issues that we had to deal with in negotiating this 

consensus agreement was understanding where the DOE would be 

coming out in this rulemaking, as well as dealing with several 

States in the northern region, including the State of Massachusetts, that have passed legislation mandating 90 percent AFUE 

furnaces in their States. The State of Massachusetts has filed a 

waiver. 

So, we have the issue of having 2 regions for furnaces as proposed in the 2007 Energy Act, one for the North, one for the South, 

or having multiple regions for different States as we see these 

waivers from these different States going forward. So we did take 

this into consideration. 

I think there is an opportunity here to look at possibly incentives 

to help those consumers that will have very high, expensive installation because of going to the 90 percent. But I think, overall, what 

we came out with is the best solution, which is 90 percent for the 

north region and the 82 percent for the southern. 

The CHAIRMAN. Mr. Nadel, did you have a point of view? 

Mr. NADEL. Yes, I would add a few points. When the Department 

of Energy did their rulemaking a couple of years ago on furnaces, 

they did look at these retrofit costs and did find that in the North, 

it is cost effective, even with the extra retrofit cost, to go to the 

higher efficiency levels. It just takes so much natural gas to heat 

a home in these climates that even if it is a little more expensive 

to install, it is clearly cost effective. 

If we were to limit the standard to just new construction, the 

savings would plummet. The vast majority of equipment that is 

sold is for existing homes, not for new construction. Also, new construction is much more likely to use the high-efficiency equipment 

in the first place because they can save having to install a chimney. So most of the savings are in existing homes. If we were to 

do as they suggested, it would just totally gut this bill. 

In terms of the safety concerns, if a contractor misinstalls something, doesn’t follow proper venting guidelines, yes, there could be 

problems. But the whole idea is these contractors are skilled pro-
45 

fessionals. They are licensed. There is criteria that they need to 

apply in terms of proper installation. If they do that, there 

shouldn’t be any safety problems. 

I know in Massachusetts, as Steve Yurek pointed out, I have 

heard that a lot of people are going instead of trying to vent the 

water heater through the chimney, they just do a power-vented 

water heater instead and go right out through the side instead, totally avoiding the concerns that AGA states. 

The CHAIRMAN. Ms. Hogan, did you have any perspective on this 

that we ought to be aware of? 

Ms. HOGAN. No, I think I can thank Steve Nadel for summarizing our last rulemaking process and the cost effectiveness. We 

are currently in a rulemaking process on these product areas, and 

we will have information out soon in terms of our examinations. 

The CHAIRMAN. OK. This letter does say that while the proponents of this provision may hope that mandating a 90 percent 

AFUE will result in more 90 percent furnaces, the result in the 

real world may well be the repair and continued operation of more 

78 percent AFUE furnaces. Do either of you have a direct response 

on that? Do you think that is right or wrong? 

Mr. YUREK. I think that is the pressure that you see in any rulemaking. We saw very good evidence of this again in the air conditioning—the last air-conditioning rulemaking, when it went from 

10 SEER to 13 SEER, where because of that cost differential and 

the economy, some decisions were made to repair rather than replace. But ultimately, they are going to have to replace both their 

furnaces or their air conditioners. When they do, they will have to 

put in that higher efficiency equipment. 

I think there are ways—and we have been working with the advocates and others to see how we can encourage people to trade out 

those lower-efficient equipment sooner rather than later. But I 

think as with any rulemaking, during that transition period, there 

is going to be some shifting to repair versus replacement. 

The CHAIRMAN. Senator Murkowski, did you have additional 

questions? 

Senator MURKOWSKI. Yes, I will follow on. I am just now reading 

this letter that you are referring to, Mr. Chairman, from the American Gas Association. Coming from Alaska’s perspective, the northern of the most northern States and a State where just the costs 

that we face are extremely—I mean are overwhelming. When we 

talk about the need to retrofit, I can tell you most of the people 

that I am coming across are going to look to try to fix rather than 

to replace. 

Now I notice that this is just as it relates to gas furnaces, and 

it does not include a mandate for the oil furnaces. I am assuming 

we are just talking about gas with this 90 percent? 

Mr. YUREK. Right. 

Senator MURKOWSKI. This is something that I am going to have 

to look into a little bit more because my initial concern is the impact to folks in my State could be considerable. So I would like to 

follow up with you on that if I can. 

I just have one more question, and this is probably to you, Mr. 

Nadel. You got my attention when you were talking about the gam-
46 

ing consoles and just the amount of energy that is consumed 

through the Xbox just being on. 

When we are talking about energy efficiency improvements, 

where do we get the biggest bang for the buck? Is it targeting Government buildings like we are in now? Is it in residential? Is it in 

industrial, manufacturing, residential building? Where is it? 

Where is the—not the easiest spot, but really, when we are talking about that biggest energy drain where we might be able to 

make a significant difference with the efficiencies, where do you 

identify it? 

Mr. NADEL. There are lots of big opportunities that are not just 

focused in one place. In terms of percentage savings, probably the 

biggest opportunities are in commercial buildings. They use a lot 

of power, and there is a lot cost effective. Residential is in between. 

Industry, a little lower because they have done a lot more in general, because they have full-time engineers and they really are trying to manage their costs. 

In terms of cost effectiveness, industrial is probably the most cost 

effective. There is still a lot of relatively low-hanging fruit a lot of 

industrial firms can do. Commercial is in between. Residential, 

while still cost effective, is a little bit more expensive just because 

there is that much they each use, and there are certain fixed costs. 

Senator MURKOWSKI. One last question here. This is just how we 

communicate what it is that we know because so much—we are all 

talking about the smart grid. But you know, I am not going to see 

the smart grid implemented in Alaska in quite some time. But I 

can share information with constituents just about energy awareness so that people within their own homes or their small businesses can try to make a difference when it comes to their own energy use and consumption. 

What efforts do we have, whether it is within DOE or within the 

trade associations, to really help educate people about being smarter when it comes to energy efficiency? I ask this question to different panels. So you guys are just the latest victims here. Mr. 

Yurek? 

Mr. YUREK. Senator, as a trade association and all the trade associations here, as well as the advocacy groups, we spend a lot of 

our time and effort in education and trying to educate consumers 

about our products and how to use them wisely and efficiently. 

We have done several joint programs both with the EPA and the 

Energy Star, as well as with the advocacy groups, talking about 

what a difference it makes on where you set the thermostat. You 

don’t even have to have a programmable thermostat. It is great if 

you do. But even just changing it 1 or 2 degrees if it is for heating 

or for cooling can save significant amount of energy. 

Or putting that programmable thermostat in for the purpose of 

when you are not in the home. Why do you need to have it heated 

during that period of time at the same level when you are walking 

around, or cooled if it is an area that needs cooling? 

So, we provide that type of information to consumers. But it is 

very difficult to get that information out, and we all struggle with 

that because there are so many, just like any time going to the 

homeowners or individuals, of how best to communicate that information. 
47 

But I think if you look at any of our Web sites for any of the 

trade associations here, for ACEEE or any of the other energy advocacy groups, the Department of Energy, that information is 

there. We try to get people there as much as possible to educate 

them on what is best to use, as well as all of our members on their 

Web sites have this information on how to use their products efficiently. 

Senator MURKOWSKI. But you have to have the desire to go to 

your Web site to find out. 

Mr. YUREK. Right. 

Senator MURKOWSKI. You are assuming that you are going to 

have a somewhat interested or educated consumer in the first place 

if they go to your Web site. Mr. Pitsor, Mr. McGuire? 

Mr. MCGUIRE. Senator, I think one of the greatest accomplishments in the area of energy awareness for consumers has been the 

Energy Star program, which, in addition to appliance standards, 

has led to a lot of energy savings. The challenge there is to get consumers to realize that if they retired an appliance that isn’t dead 

but is maybe 8 or 10 years old, buying a new one would save more 

money in the long run and even in a year because it is more efficient than repairing an older, less efficient unit. 

That is the educational challenge because, for the most part, 

when people are in the stores looking for appliances, it is a rush 

situation. So Energy Star has done a great job. The Appliance Rebate Program, as part of the stimulus bill that the Congress enacted, part of that was to get consumers aware and in stores thinking about the value of energy efficiency not only to save energy, but 

for disposable income. 

Just in terms of where the low-hanging fruit is and what is the 

easiest, the most energy to save, demand response has been a 

major success in the consumer and industrial world. But in the residential sector, that is where the greatest potential for future benefits from demand response lie, and that gets into the smarter appliances that can deal with the smart grid or, in some cases, not even 

in a smart grid can help shift load and make a real difference toward energy savings. 

Senator MURKOWSKI. Are there tradeoffs between being smarter 

and being more efficient? 

Mr. MCGUIRE. There don’t have to be. I think what the decision 

point is, for example, as in the Department of Energy, where they 

are looking at new refrigerator standards. It is the third-generation 

refrigerator standard. 

OK, a refrigerator today uses as much energy as a 60-watt light 

bulb. If you improve that by 10 percent, you are saving 6 watts. 

But if you shift a refrigerator’s defrost cycle to a nonpeak time of 

day, you are shifting 300 watts. So where is the bang for the buck 

in terms of the investment? The hundreds of millions of dollars 

that manufacturers have to put into a new product to meet new 

standards. 

It is different for different products. But I think the refrigerator 

is a good example where greater use of demand response through 

smartness can make a more profound difference for the environment and for the consumer than the next level of efficiency. 

Senator MURKOWSKI. Ms. Hogan. 
48 

Ms. HOGAN. We have a number of efforts underway at the Department of Energy that fall into that educational bucket. I think 

one of the things we are learning is that folks need to have a good 

way to compare what their energy use is in their home relative to 

the other homes around them. 

So, one of the efforts we are undertaking that came out through 

the Recovery through Retrofit report, which was led by the Vice 

President’s office, is an effort to stand up a system that helps people compare the energy of their home to others like them, sort of 

an energy guide label for a home. People really don’t know if their 

home is using a lot more or a lot less energy relative to their neighbor’s home, and that turns out to be a very powerful piece of information, particularly when homes are fairly similar in design. 

So we are looking at this as something that can be stood up with 

some amount of analytical work, but fairly quickly, and then can 

be rolled out in partnership with utilities and others who have access to that type of data. This will really give homeowners the information they need to, first, understand how their whole home 

performs and then, second, look at what those cost-effective opportunities are for improving their home. 

Senator MURKOWSKI. Mr. Nadel. 

Mr. NADEL. Just to add a little bit terms of smart grid and 

smartness, it often can save. It doesn’t always save. A lot of it depends on the particulars of what the product is, how you move it. 

You know, yes, you can move something 300 watts, but it is only 

on 20 minutes a day. So there is only so much cost. 

There are some other ways to get at this. There is a company 

called Opower, for example, that uses a mail-based system rather 

than smart meters or the Internet. President Obama actually visited them earlier this week, and that might be an example of the 

type of system that would be a little bit simpler and could be applied to some of the Alaskan utilities even long before they get into 

smartness. So there are opportunities there. 

Also, coming back to the whole retrofit question and repairs, in 

the case of a furnace, what typically puts a furnace out of commission is the heat exchanger gets damaged, and it is very hard to repair a heat exchanger. Yes, if a blower goes, you can replace that. 

But you are typically only buying a few years with the repair and 

not another 10 or 20. So they all will need to be repaired relatively 

quickly. 

I would also point out there are lots of opportunities for retrofit 

programs to help people, as Mr. McGuire pointed out, to accelerate 

the retirement of those energy hogs. I know the REEP program 

that was part of ACELA would actually do that, and I understand 

you are having a hearing tomorrow on HOMESTAR, which is nearer term way to do that. 

Mr. PITSOR. Senator, I would just comment also from NEMA’s 

point of view. We maintain a Web site to provide information on 

the commercial building tax deduction that was enacted by Congress in EPAct ’05 that provides incentives for building owners to 

improve the efficiency of commercial buildings. We continue to see 

a rapid increase in terms of inquiries about—or wanting to learn 

more about tax incentives and tax deductions and what makes economic sense in terms of renovation work and retrofit work. 
49 

So we are seeing an increase in consumer awareness, but we are 

still at a very low percentage of that. I guess I look forward to the 

day where the average consumer cares as much about the cost of 

a gallon of gas as his kilowatt hour rate on his bill and is aware 

of what his kilowatt hour rate is on his bill as he is aware of what 

a gallon of gas costs. 

Senator MURKOWSKI. I don’t know what goes on in your house, 

but I am always after my kids to turn off the lights, turn off the 

machine, whatever. I get the ‘‘whatever’’ back. 

[Laughter.] 

Senator MURKOWSKI. But it is, it really is an awareness, and I 

think with kids particularly if you can distill it—you are not going 

to get a 15-year-old caring about what the kilowatt usage is on the 

Xbox game. But when you say it is the equivalent of 2 refrigerators, there is a visual there that they can relate to. So we have 

got to figure out how we talk their language as well. 

I appreciate the testimony this afternoon. 

The CHAIRMAN. Thank you all very much, and I appreciate the 

testimony and appreciate all the work that has gone into developing these pieces of legislation. I hope you will keep working on 

it, and we will be doing our best to get some of this enacted into 

law. 

Thank you. 

[Whereupon, at 10:40 a.m., the hearing was adjourned.] 

(51) 

APPENDIXES 

APPENDIX I 

Responses to Additional Questions 

RESPONSES OF KATHLEEN HOGAN TO QUESTIONS FROM SENATOR BINGAMAN

Question 1. On page 2, you describe DOE’s plans to implement the November 

2006 Consent Decree in which DOE plans to eliminate the backlog in appliance 

standards rules. 

What impact would the enactment of the appliance provisions of ACELA and of 

S. 3059 have on DOE’s ability to implement the Decree and eliminate the backlog? 

Answer. The Department of Energy (DOE) has yet to estimate the potential resources and time required to implement the appliance provisions of the provisions 

of ACELA (S. 1462) and S. 3059. DOE has not assessed the potential impact of 

these requirements on DOE’s ability to implement the existing Consent Decree, 

which reflects the Department’s commitment to eliminating the backlog of appliance 

standards rulemakings. However, a preliminary review suggests these provisions 

are not likely to have a major adverse impact on the Department’s ability to comply 

with its obligations under the Consent Decree. Many of the provisions contained in 

ACELA and S. 3059 would directly establish new energy conservation standards or 

related requirements, rather than mandating the development of new DOE 

rulemakings. The provisions that would impose new rulemaking responsibilities appear to set achievable deadlines that do not impair DOE’s ability to meet its existing obligations under the Consent Decree. 

Question 2. Will DOE adjust ongoing rulemakings, such as the rulemaking underway for residential furnaces, to conform to the provisions of the consensus agreements that have been negotiated between industry and efficiency advocates? 

Answer. DOE must conduct its rulemaking process according to existing law. If 

elements of the consensus agreement are passed into law, DOE will implement 

those accordingly. For the residential furnaces rulemaking, on March 15, 2010 DOE 

published a notice in the Federal Register requesting comments on the product 

classes, the analytical approach, models, and tools DOE is using to evaluate amended standards for this rulemaking. Comments on the March 15 notice will be accepted until April 14, 2010. In the next step of the process, the Department will publish 

a Notice of Proposed Rulemaking in which DOE will propose standard levels and 

solicit comments on adopting the consensus agreement. 

Question 3. Current law requires DOE to propose updates to its testing procedures for battery chargers and external power supplies. These updates are intended 

to clarify the requirements for measurement of energy consumed in modes known 

as ‘‘stand-by mode,’’ ‘‘no-load’’ and ‘‘off mode.’’ 

However, life safety and security products are continuously active and require a 

constant, uninterrupted power supply. S. 3059 includes provisions supported by the 

security industry and efficiency advocacy organizations to exempt life safety and security devices from the requirements of the ‘‘off’ mode and ‘‘stand-by’’ mode. 

Do you agree that federal efficiency standards applicable to external power supply 

performance in off mode and standby mode should not apply to external power supplies designed for use with security and life safety devices? 

Answer. Given current technology, the Department of Energy (DOE) does not believe such devices can reliably transition to off or standby mode while serving their 

security and safety functions. Therefore, DOE agrees that energy conservation 

standards regarding these modes should not apply. 
52 

RESPONSES OF KATHLEEN HOGAN TO QUESTIONS FROM SENATOR MURKOWSKI

Question 1. I have said before that I don’t think Congress should be in the business of legislating product standards, but that sometimes technology moves more 

quickly than the DOE rulemaking process. What are the potential challenges that 

could occur, by moving these appliance standards through Congress, rather than 

through the Department of Energy? 

Answer. While the Department has developed and issued a large number of product standards since the program’s establishment, most product standards were originally set by legislation. In most cases, the product standards established by legislation have been supported by both manufacturers and energy advocates; a reflection 

of the active involvement of stakeholders in the legislative process. If key stakeholders and other experts continue to be engaged during the legislative process, 

DOE believes the process can be an effective alternative to DOE-developed 

rulemakings. The great advantage of the legislative process is it shortens the time 

required to establish new efficiency standards by several years. However, this acceleration in the process has sometimes resulted in the establishment of standards 

that did not achieve maximum energy efficiency gains that were economically justifiable and some cases resulted in enactment of technically flawed statutory provisions. The Department stands ready to work with Congress to help ensure Congressionally-directed standards maximize the efficiency gains that are economically justified and are based on the best technical information available. 

Question 2. In your testimony you say that while DOE’s efforts to bring the appliance standard program up to speed are ongoing, they have revealed that the existing statutory language constrains the Department’s enforcement efforts. How can 

we avoid this in the future? 

Answer. The Department of Energy (DOE) is constantly working to make sure 

that our standards and enforcement actions are as robust as they can be, but we 

would benefit from some changes to existing statutes. As a result, DOE would recommend edits to three areas of the existing statutory language; dealing with penalties, prohibited acts and process. The suggested edits are as follows: 

1. PENALTIES 

Amend 42 U.S.C. § 6303(a) Enforcement by striking the first sentence 

and replacing it with the following sentence: ‘‘Except as provided in subsection (c) of this section, any person who knowingly violates any provision 

of section 6302 of this title, or any regulation promulgated pursuant to it, 

shall be subject to a civil penalty.’’ 

After ‘‘violations of 332(a)(5)’’ add, (a)(8), (a)(9) and (a) (10) In the last 

sentence of the paragraph, after ‘‘Each violation of paragraph (1),(2) or (5) 

of section 332(a) [42 USCS 6302(a)(1),(2), or (5)1 shall constitute a separate 

violation with respect to each covered product, ‘‘Add ‘‘with a maximum civil 

penalty of $1,000 per unit;’’ and after ‘‘and each day of violation of section 

332(a)(3) or (4),’’ add ‘‘(8),(9), or (10)’’ and after’’ [42 USCS 6302 (a)(3) or 

(4)1 shall constitute a separate violation,’’ add ‘‘with a maximum civil penalty of $500 per day. 

Rationale 

• Currently our ability to deter violators is inhibited by relatively low penalties. 

This edit would increase the current maximum violation for violating DOE’s energy efficiency standards from $200 per unit in violation to $1,000 per unit in 

violation which will provide a more significant deterrent, particularly for low 

volume manufacturers. The original statutory penalty of $100 per violation was 

enacted in the 1970s and has only been modestly adjusted (up to $200) for inflation. 

• The penalty for failing to certify and failing to ensure a product meets DOE’s 

energy efficiency standards is increased from $200 to $500 per day. The certifications provide information which is critically important in making an initial 

assessment of whether underlying energy efficiency standards are being met. 

Testing is an essential component of any manufacturer’s compliance with the 

standards. 

• The additions of (a)(8),(a)(9) and (a) (10) parallel the changes in Section 6302 

below—making it clear that failing to certify, test or comply with DOE regulations promulgated pursuant to the statute are violations subject to penalty. 

2. PROHIBITED ACTS 

Amend 42 U.S.C. § 6302(a) to explicitly include failure to certify, failures 

to test and regulatory violations by adding the following provisions: 
53 

(8) for any manufacturer or private labeler to distribute in commerce any 

new covered product which has not been properly certified in accordance 

with the requirements established in or prescribed under this part. 

(9) for any manufacturer or private labeler to distribute in commerce any 

new covered product which has not been properly tested in accordance with 

the requirements established in or prescribed under this part 

(10) for any manufacturer or private labeler to violate any regulation lawfully promulgated to implement any provision of this part. 

Rationale 

• DOE interpreted its rules (Parts 430 and 431) and 42 U.S.C, 6302 (a)(3) to 

mean a failure to certify covered products is an independent violation of EPCA 

and DOE’s implementing regulations that may be subject to an enforcement action. • However, given the importance of the certification information which provides 

critical information necessary to make an initial assessment of whether the underlying energy efficiency standards are being met—a technical amendment to 

the statute that clearly states failure to certify is a violation would assist enforcement efforts. • Testing should be its own separate requirement—not linked to labeling. Currently, the statute prohibits a manufacturer from representing the energy use 

or energy efficiency of a product (subject to a test procedure) unless that product 

has been tested. This is a labeling violation enforceable by the Federal Trade 

Commission (FTC). A technical amendment to the statute clarifying a failure 

to test a product is itself a violation would assist DOE enforcement efforts. 

Paragraph 10 makes clear that regulations promulgated pursuant to the agencies enforcement authority under this section are violations subjected to penalty. 

3. PROCESS 

Amend 42 U.S.C. § 6303(d) by striking the second sentence of (1), by 

striking the introductory clause of (2), and replace it with ‘‘If the proposed 

penalty arises from an alleged violation of 42 USC 6302(a)(3)(4)(5) or (10); 

by striking (3) in its entirety, and replacing it with (3) if the proposed penalty arises from an alleged failure to certify or test a covered product as 

required by 42 U.S.C. § 6302(a)(8)-(9), the Secretary shall assess the penalty, by order, after an informal adjudication conducted under 5 U.S.C. § 

555; and in (4) after ‘‘the Secretary shall institute an action to recover the 

amount of such penalty’’ add ‘‘plus interest assessed from the date upon 

which the assessment of a civil penalty became a final and unappealable 

order under paragraph (2). 

Rationale 

• Cases where there is no dispute of material fact; i.e. a manufacturer simply 

fails to file a certification report or fails to test a product in violation of federal 

law, should not go to an Administrative Law Judge (ALJ). They should be decided by an informal hearing consistent with APA section 555. The proposed 

technical amendment adding a new paragraph (3) addresses this issue. 

• For other cases—such as whether or not the item at issue complies with federal 

energy efficiency or water standards the existing process set forth in 6303 (d)(2) 

should apply: after a formal adjudication under § 554, the Secretary may issue 

an order assessing a civil penalty. After a penalty order is assessed, the affected 

party must seek judicial review ‘‘within 60 calendar days’’ by instituting ‘‘an action in the United States court of appeals for the appropriate judicial circuit for 

judicial review of such order in accordance with [the APA].’’ The proposed technical amendment to paragraph 2 addresses this issue. 

• A technical amendment striking the original § 6303(d)(3) language from the 

statute would enhance DOE’s enforcement efforts. Allowing the potential bad 

actor to chose the more cumbersome option laid out in 6303(d)(3) impedes enforcement efforts: if an entity elects to proceed under § 6303(d)(3), then the Secretary must ‘‘promptly’’ assess a civil penalty and then wait 60 days to see if 

the entity pays it. If it is not paid, the Secretary must file an action in ‘‘the 

appropriate district court of the United States for an order affirming the assessment of the civil penalty.’’ Thus allowing a non-compliant manufacturer to extend the process for months all the while distributing non-compliant products 

to consumers. 

Question 3. Please describe how you fund, monitor, and enforce compliance issues 

within the ENERGY STAR® Program. How many staff do you have for ENERGY 
54 

STAR® compliance, monitoring and enforcement; and are there any specific plans 

to increase this capacity in FY2011? How will the ‘‘ramp-down’’ of ARRA funds affect this dynamic? 

Answer. Within ENERGY STAR®, the Department has various efforts to monitor 

and enforce compliance. For one, Compact Fluorescent Lamps (CFLs) are tested 

under the Program for the Evaluation and Analysis of Residential Lighting 

(PEARL). This program takes CFLs from retail settings and tests the lamps against 

the ENERGY STAR® CFL Program Requirements. If a lamp did not meet the requirements, it was disqualified from the program. Under current version of the program requirements, manufacturers fund the testing. 

Windows, doors and skylights are tested under the auspices of the National Fenestration Rating Council (NFRC). This independent third-party entity establishes 

consensus testing procedures to evaluate energy efficiency metrics for fenestration 

products. If a product does not meet the ENERGY STAR® requirements for qualification, it is not allowed to carry the ENERGY STAR® label. 

Beginning in Fiscal Year (FY) 2010, the Department of Energy (DOE) is testing 

appliances at independent third party laboratories to verify qualifying test results. 

It is the Department’s intent, if products do not meet ENERGY STAR® program 

requirements, to refer the matter to the Environmental Protection Agency (EPA) for 

appropriate action. For CFLs, the testing and verification process written into the 

program requirements will continue, with failing test results referred to EPA for 

product status determination. NFRC will continue to conduct independent testing 

for fenestration product certification and DOE will monitor NFRC’s internal accreditation reviews to insure the reported certification results are valid. 

Also during FY 2010, EPA will begin requiring all products be certified by independent testing laboratories, thus eliminating manufacturer self-certification for 

qualifying for ENERGY STAR®. In FY 2011, DOE expects to expand its verification 

capabilities and expand the breadth of ENERGY STAR® products to be tested at 

independent third-party facilities. The eventual goal is for all ENERGY STAR® 

products to be tested, in conjunction with any testing managed by EPA. DOE has 

requested an increase in the FY 2011 budget request to pay for this enhanced capacity and does not expect the ramp down of Recovery Act resources to cause reduction 

in verification testing. 

Question 4. DOE staff has briefed Committee staff on transferring the promotion 

of several ENERGY STAR® products to the EPA, such as windows, refrigerators, 

dishwashers and compact fluorescent lights, within the FY2011 budget request. 

However, the budget still references these products as part of the DOE. Is it the 

Administration’s intent to transfer the promotion of ENERGY STAR® labels for 

these appliances from the Energy Department to the EPA? Please describe the funding, rationale, and implementation schedule anticipated for this transfer, if it undertaken. 

Answer. The Department of Energy (DOE) and Environmental Protection Agency 

(EPA) signed a Memorandum of Understanding on September 30, 2009 outlining a 

new partnership on energy efficiency in buildings as an important step in strengthening the Administration’s commitment to energy efficiency. The partnership addresses two programs for which each agency has important roles: the ENERGY 

STAR® program and the National Building Rating Program. The agreement updates and replaces a 10-year-old agreement between the agencies on ENERGY 

STAR® and other efforts. The agreement outlines: 

• An enhanced ENERGY STAR® program and a new ’best in class’ labeling program; 

• An enhanced national building energy rating program that will be widely applied in Recovery Act programs and beyond; 

• An ongoing framework for partnership, coordination, and collaboration between 

the two agencies across these programs; 

• Clear lines of responsibility between the two agencies that build on the expertise of each agency; and 

• New opportunities for stakeholders to provide feedback to the administration on 

these programs. 

The ENERGY STAR® products program has grown to encompass products in 

more than 60 product categories and is used by millions of Americans in selecting 

products that help them save money and protect the environment. A number of enhancements will be undertaken to maintain and build the ENERGY STAR® label 

as a consumer trust mark for cost-effective energy-efficient products that offer consumers the features they are seeking. These enhancements include: 
55 

• The ENERGY STAR® program will be expanded to cover more products at a 

faster pace; 

• Revisions to existing ENERGY STAR® specifications will be undertaken more 

frequently so the ENERGY STAR® label continues to highlight top energy efficient products; 

• A comprehensive program for product testing and verification of products earning the ENERGY STAR® will be developed and implemented; and 

• A new effort to recognize super efficient products. 

DOE and EPA will work quickly to put this agreement into action in the following 

ways: 

• Outline and implement key enhancements to the ENERGY STAR® products 

program in the areas of: 

(1) product testing and verification, 

(2) revisions to existing ENERGY STAR® specifications so as to ensure ENERGY STAR® recognizes top performing products, and 

(3) other changes necessary so ENERGY STAR® represents the top product 

models as outlined in the agreement. 

(4) Developing options for new ‘‘best in class’’ labeling program. 

• Outline and implement key enhancements to the National Building Rating System particularly where important to assist in the use of Recovery Act funding. 

DOE will continue a strong commitment to the overall success of ENERGY 

STAR®. DOE will concentrate its efforst in the following areas: 

• Testing procedure development, review, and improvements; 

• Technical analysis; and 

• Testing and verification. 

As a result, the DOE role in ENERGY STAR® will continue to be significant. The 

test procedures and analytical capacity are critical to a successful ENERGY STAR® 

program. 

Further information on the actions DOE and EPA are taking to protect the integrity of the Energy Star label are outlined in the attached memo, sent on April 2, 

2010, to DOE Secretary Chu and EPA Administrator Jackson, from DOE Assistant 

Secretary Cathy Zoi and EPA Assistant Administrator Gina McCarthy. 

Question 5. Please describe how the DOE intends to release more than 20 final 

appliance rules by June 30, 2011 and whether the amount of funding allocated, is 

adequate, to ensure that these final rules are met by the deadline. 

Answer. The Department of Energy (DOE) has established detailed schedules for 

development and issuance of all rulemakings governed by the Consent Decree and 

statutory deadlines, and is putting in place the staff, internal processes, and other 

resources necessary to ensure these deadlines are achieved. For Fiscal Year (FY) 

2010, the Department requested and received $35 million to support implementation 

of the appliance standards programs. For FY 2011, the Department requested $40 

million for these efforts. The FY 2011 request will enable DOE to meet the established deadlines and to undertake significant new efforts to ensure improvement in 

the compliance and enforcement efforts. 

Question 6. Have decisions been made regarding the funding level for the Energy 

Star Program for fiscal year 2011, and if so can you summarize the different components, and their corresponding funding levels within the Program? 

Answer. The Department of Energy (DOE) requested $10 million in Fiscal Year 

(FY) 2011 to support ENERGY STAR® activities, including developing and updating 

test procedures, criteria development, verification testing and support of the National Building Rating Program (NBRP). For test procedures, DOE will use funds 

to accelerate the development of test procedures for an increased range of products. 

In addition, the development of verification procedures will be accelerated to ensure 

the reliability of the ENERGY STAR® label in the eyes of consumers. Developing 

test procedures and verification methods is an intensive process, but necessary as 

DOE begins doing more in-house testing and verification. 

A two-pronged strategy will be deployed in FY 2011 to support the portfolio of existing technologies: 1) developing and updating efficiency criteria including ENERGY STAR® test procedures for products to keep the label relevant and meaningful in the market; and 2) working with EPA and participating manufacturers, retailers, and energy efficiency program sponsors on certification and product testing. 

The NBRP will provide guidance for energy retrofits of existing buildings based 

on state-of-the-art cost and performance data. It will also establish a comprehensive 

energy efficiency rating system for both residential and commercial buildings on a 
56 

national scale. DOE will develop, validate, and update software tools for both asset 

and benchmark ratings in consultation with the Environmental Protection Agency 

(EPA). These tools provide information to owners on whole-building comparative energy use, while also providing decision assistance on retrofits. DOE will maintain 

all relevant databases used by the software tools and create data sharing mechanisms with EPA. EPA will establish ENERGY STAR® criteria for buildings based 

on technical input from the DOE and the NBRP. 

RESPONSES OF KYLE PISTOR TO QUESTIONS FROM SENATOR MURKOWSKI

Question 1. The Next Generation Lighting Initiative will provide significant energy savings though more efficient lighting. Given the DOE’s management in the 

development and understanding of this new technology, please describe how DOE 

will oversee this initiative, as well as other activities related to the initiative. 

Answer. The Next Generation Lighting Initiative was created by Congress in Section 912 of the Energy Policy Act of 2005, which directed DOE to support research 

and development for and promote advanced light emitting diodes (LEDs) and organic light emitting diodes (OLEDs). The energy savings potential of LEDs and 

OLEDs, also known as solid state lighting (SSL), is significant. As part of the NGLI, 

Congress directed DOE to select an industry alliance that is broadly representative 

of U.S. solid state lighting research, development, infrastructure, and manufacturing expertise as a whole to cooperate in DOE’s efforts. The Next Generation 

Lighting Industry Alliance (NGLIA), for which NEMA serves as the Secretariat, is 

that industry alliance. Since 2005, DOE and NGLIA members have cooperated to 

support technology research and development, product R&D, and development of 

technical standards as well as commercialization, testing, demonstration, and market introduction of LED products for general illumination. Most recently, DOE has 

launched an initiative on manufacturing R&D. 

Question 2. Do you believe that your proprietary data is protected within the bill, 

in particular as it relates to that requires DOE to require manufacturers to submit 

information on compliance, shipments, energy use and efficiency? 

Answer. The legislation requires the Department of Energy to conduct a public 

hearing on the specifics of what data is needed by product category. This will allow 

the DOE to tailor what data is appropriate for which products, and methods under 

which the data can be submitted to DOE. NEMA would propose that confidential 

information could be maintained by allowing manufacturers to submit through their 

respective industry trade association. NEMA has a long history of doing this for 

other regulatory purposes, including DOE and EPA programs. In addition, NEMA 

has offered this ability to non-NEMA manufacturers. It will be important that any 

data requests be based on reasonable considerations regarding the timing and burden related to the data submission that would not require industry to create new 

systems to gather information that doesn’t exist today. 

Question 3. As you note in your testimony, the 2007 Energy Independence and 

Security Act requires that customers be provided with timely information and options for controlling energy use. Is your organization conducting any public outreach 

on smart grid technologies? Do you get the sense that consumers understand smart 

grid products or is additional public education needed in this arena? 

Answer. NEMA conducts outreach on Smart Grid through a number of mediums. 

Aspects of Smart Grid are regularly featured through our print and online outlets; 

electroindustry Magazine (ei Magazine), and ei-Extra. The March 2009 edition of ei 

Magazine specifically featured Smart Grid, as will the June 2010 edition. NEMA 

staff and member companies are regular contributors to other industry publications, 

and welcome the opportunity to speak in public forums on Smart Grid. Additionally, 

NEMA has developed publications specifically targeted at Smart Grid consumers, 

Smart Grid oriented podcasts available on from the Apple iTunes store, and has an 

audio segment that will be featured on Delta Airlines Sky Radio during the months 

of May and June of 2010. 

However, it is NEMA’s belief that, in general, the average consumer does not understand the purpose or the benefits of Smart Grid. NEMA would welcome federal 

involvement in this process with manufacturers, utilities, and state legislators/regulators. 

Several essential consumer education areas that could be addressed include: 

• Consumer motivation needs to exist as a pull-through for Smart Grid technology in regulatory actions. As with any technology-driven endeavor, a small 

percentage of homeowners will grasp and adopt Smart Grid technologies for the 

home, while a great deal of others will lag. However, very few of even the most 

interested homeowners will consider, or will pay any attention to the changes 
57 

necessary within the utility company in order to support the home-level services 

that are enabled through Smart Grid. As a result, state regulators, who are 

charged with protecting consumer interests, may be faced with rate-payer opposition as they consider utility proposals for actions related to the deployment 

of Smart Grid technologies. A well educated consumer and/or giving local regulators the appropriate tools to address these concerns would be a tremendous 

benefit. • Demand Response (DR, also known as Peak Demand) is a foreign concept. A 

key to serving peak demand with existing grid resources is the idea of supporting demand response programs. The problem is that the general public 

doesn’t understand this term and thus cannot relate to its importance. On 

March 12, 2010 the Federal Energy Regulatory Commission (FERC) released 

their first draft of the National Demand Response Plan. Every utility and consumer in the country could be affected by this policy, but very few people outside of the electricity supply chain understand it. 

RESPONSES OF KYLE PISTOR TO QUESTIONS FROM SENATOR SESSIONS

Question 1. Can Light Emitting Diode (LED) be deployed on a nationally wide 

scale? 

Answer. Yes, light-emitting diode (LED) outdoor products can be deployed nationwide and will work in most applications although LED technology is not mandated 

by the bill. 

Question 2. Could you please provide me a cost-benefit analysis for the State of 

Alabama for phasing out existing luminaries and replacing them with light emitting 

diode (LED) outdoor lighting systems by 2013-the effective date listed in the Senate 

proposal and by 2017-the effective date in the House proposal? 

Answer. Section 6 of the legislation does not mandate LED retrofits and there is 

no requirement for a state to replace their existing outdoor lighting. The bill impacts only the sale of new luminaires beginning three years after date of enactment, 

and does not mandate a specific technology such as LED. There are many 

luminaires with traditional sources such as metal halide or high pressure sodium 

that will meet the Tier 1 requirements. The bill would prohibit the manufacture of 

mercury vapor lamps effective January 1, 2016. Current law passed by Congress already prohibits the manufacture of mercury vapor ballasts (which operate the 

lamps) which went into effect on January 1, 2008. 

A community or business may choose to replace their existing lighting with LED 

and the cost benefit will depends on the specific nature of the installation. The details will depend on the application type (parking lot, plazas, streets, roadways, etc), 

the energy cost in that area, lighting requirements and the type of new luminaires 

installed. Today, payback periods are typically in the range of 3-6 years. 

RESPONSE OF JOSEPH M. MCGUIRE TO QUESTION FROM SENATOR MURKOWSKI

Question 1. As you note in your testimony, the 2007 Energy Independence and 

Security Act requires that customers be provided with timely information and options for controlling energy use. Is your organization conducting any public outreach 

on smart grid technologies? Do you get the sense that consumers understand smart 

grid products or is additional public education needed in this arena? 

Answer. The Smart Grid is in the nascent stage of development. It is essential 

that all stakeholders in development of the Smart Grid understand that consumers 

are the key to its success. Yet consumers themselves are generally unaware of the 

Smart Grid. According to Appliance Design Magazine which recently cited an online 

Harris poll conducted between January 18 and 25 on Smart Grid awareness, ‘‘two 

thirds of Americans have never heard the term Smart Grid (68%) and 63% have not 

heard of Smart Meter.’’ Yet the survey also found that ‘‘A majority of U.S. adults 

(57%) are aware of how much electricity they are consuming, and an even greater 

number (67%) say they would reduce their usage if they had visibility to it.’’ 

AHAM and its members are working hard to educate the public as well as public 

utility commissions about the potential benefits of the Smart Grid to consumers. 

What is also needed are incentives to consumers to encourage early adoption of 

Smart Grid technologies. This includes time of use electricity pricing and financial 

incentives to consumers, retailers and manufacturers to get Smart Appliances online 

in residences. 

A search of the Internet and news sites shows that Smart Appliances and the 

work of appliance manufacturers in this area are being publicized; however, much 

more needs to be done and Congress can help. Congress can increase the visibility 

of the Smart Grid and Smart Appliances as manufacturers continue to educate con-
58 

sumers on and increase awareness of the benefits attributable to Smart Appliances, 

such as saving money on their electric bill and managing their energy use more effectively. Some areas where Congress can help are as follows: 

• Authorize the Best-in-Class Appliance Deployment program to provide incentives to manufacturers to produce Smart Appliances and educate consumers of 

their benefits. • Incorporate Smart Grid capability in ENERGY STAR program. • Expand the Energy Efficient Appliance Rebate program to include Smart Appliances. • Provide Smart Grid peak demand reduction goals so that each load-serving entity must prepare a peak load reduction plan that includes Smart Appliances. 

We would be pleased to work with you and the committee on these and other 

ideas to increase public awareness and understanding of the Smart Grid and Smart 

Appliances. 

RESPONSES OF STEVEN NADEL TO QUESTIONS FROM SENATOR BINGAMAN

Question 1. Representatives of the Heating, Air-conditioning and Refrigeration 

Distributors International have contacted the Committee staff expressing very serious concerns with Section 5 of S. 3059, ‘‘Prohibited Acts’’. Their concern is that, with 

the establishment of regional standards for air conditioners and furnaces, it may be 

illegal for distributers to operate across the regional boundaries. 

Would you please update us on the status of efforts to resolve their concern? 

Answer. We have completed discussions with HARDI and have agreed to an 

amendment to S. 3059 to clarify that distributors in one region can sell at wholesale 

in other regions. The specific consensus amendment is attached. 

Question 2. The legislation would provide, for the first time, the ability of the Secretary of Energy to consider the application of ‘‘smart grid technology’’ with respect 

to the energy efficiency standards for products and equipment. How does this impact the setting of efficiency standards, and what trade-offs occur between making 

a product ‘‘smarter’’ versus more efficient? 

Answer. Making equipment ‘‘smarter’’ provides the potential to save energy, to reduce peak demand, and to achieve other objectives. In some cases these goals can 

be achieved simultaneously (e.g cycling off a dryer during peak periods saves at 

peak, but can also save some energy since residual heat in the dryer evaporates 

some moisture, shortening the remaining drying cycle). Sometimes one goal can be 

achieved without adversely affecting the other goals (e.g. delaying turning on a dishwasher until after the peak period ends saves at peak but has no impact on energy 

use). But sometimes one or more goals can be achieved at the expense of another 

goal (e.g. shutting off a dishwasher during mid-cycle may save at peak, but increases energy use since the water in the dishwasher needs to be reheated when 

the cycle is allowed to resume). The provision in S. 3059 on smart grid technology 

directs the Secretary to review smart grid opportunities and how these opportunities 

affect energy use, economics and environmental objectives, ultimately balancing the 

different objectives before setting standards. Essentially, this provision gives the 

Secretary another set of technology options to consider and evaluate. However, these 

new options must be evaluated in the context of the overall law which directs that 

new standards ‘‘shall be designed to achieve the maximum improvement in energy 

efficiency,. . ., which the Secretary determines is technologically feasible and economically justified’’. Given this, our view is that this provision will result in incorporating smart technologies that either save energy, or that achieve other benefits 

but are neutral with regard to energy consumption. Under the language in the current law, it will be very difficult to set a standard that increases energy use. 

ATTACHMENT

It shall be unlawful—— 

(5) for any manufacturer (or representative of a manufacturer), distributor, 

retailer or private labeler 

(A) to offer for sale or distribute in commerce any new covered product 

which is not in conformity with an applicable energy conservation standard 

established in or prescribed under this part, or 

(B) where the standard is a regional standard that is more stringent than 

the base national standard, to offer for sale or distribute in commerce any 

new covered product having knowledge (consistent with the definition of 

‘‘knowingly’’ in section 333(b)) that the product will be installed at a loca-
59 

tion covered by a regional standard established in or prescribed under this 

part and will not be in conformity with such standard. 

(61) 

APPENDIX II 

Additional Material Submitted for the Record 

STATEMENT OF KATHERINE HAMILTON, PRESIDENT, GRIDWISE ALLIANCE

Chairman Bingaman, Ranking Member Murkowski, members of the Committee, 

thank you for inviting me to submit written testimony on smart grid provisions proposed by the Energy and Natural Resources Committee. The GridWise Alliance has 

testified before this committee on several occasions and sustains a positive working 

relationship with both majority and minority staff by providing unbiased information about smart grid. 

The GridWise Alliance is a coalition of about 125 organizations advocating for a 

smarter grid for the public good. Our members broadly represent the nation’s interest in smart grid, including leading utilities, independent system operators, large IT 

and communications companies, small technology companies, manufacturers, consultants, universities, and research organizations. We operate on a consensus basis 

and remain technology neutral, focusing on the policy issues surrounding the deployment of a smarter grid. We believe the market should determine which technologies prevail. 

The passage of the American Recovery and Reinvestment Act serves as a water- shed event in the history of the nation’s electric grid. By providing over $4 billion 

in grants for smart grid projects, Congress effectively elevated the smart grid to a 

national priority. Utilities and state regulators have been quick to respond, submitting hundreds of projects for potential funding. Over 100 projects representing nearly every state were awarded federal grants. As a result, the transition to a smarter 

grid is well underway. 

Now we need to turn our attention to the ultimate beneficiary of the smart grid— 

the consumer. The smart grid offers greater visibility into, and control over, electricity consumption, thereby enabling consumers to better manage their energy bills. 

To realize these benefits, however, consumers must have access to two critical suites 

of technologies—Home Area Networks (HAN) and smart appliances. Whereas Home 

Area Networks process communications between the grid and the home, smart appliances actually respond to consumer preferences and signals from the HAN or utility, system operator, aggregator, internet provider, or even microgrid. For example, 

consumers with variable rate plans can program smart appliances to operate when 

electricity prices are low, while utilities or other service providers can signal smart 

appliances to discretely alter operations during periods of peak demand. Smart appliances will be the next evolution of demand response. 

To be sure, consumer participation in the smart grid is an evolutionary process. 

We at the GridWise Alliance believe that the pace of consumer participation will be 

determined by three underpinning efforts: (1) consumer education; (2) support for 

the smart appliance market; and (3) adoption of variable rate structures and financial incentives. Our members are collaborating with consumer advocates, utilities, 

and other service providers on the development of consumer outreach programs; I 

have spoken with many state utility commissioners on the need for rate structures 

that allow consumers to benefit from their choices. However, the nascent smart appliance market is in urgent need of support, particularly as consumer spending remains at record lows and unemployment hovers just below 10%. For these reasons, 

Congress can play a crucial role in providing early support for the market and spurring successive rounds of investment in new technologies. Not all homes will purchase smart appliances right away, but support for this market will be a critical 

step toward encouraging consumer participation in the smart grid. 

Smart appliances will be capable of interacting seamlessly within home systems 

to provide energy savings for consumers without inconveniencing household operations. For example, a smart refrigerator can cycle off its freezer defrost during 

peak periods of demand, thereby allowing the utilities to better manage overall load 

and providing consumers with opportunities to reduce their electric bill, depending 
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on the available incentive programs. We believe that state rate structures and incentives should complement this technology to allow consumers to maximize their 

energy and bill savings. In a weak economy, a consumer’s ability to understand and 

react to electric prices will be critical. Smart appliances will offer consumers the 

ability to simply and conveniently reduce demand without negatively impacting 

their lifestyles. 

Smart appliances will also play an important function in maintaining grid stability. Appliance and chip manufacturers are developing technologies that can automatically react to conditions (or ‘‘perturbations’’) on the grid, even in the absence 

of signals from utilities. For example, if a substation transformer fails, a smart appliance could detect voltage sag and shut down in order to shed load from the system. With a multitude of such appliances interacting with the grid, the system becomes much more stable and reliable. The appliance then becomes important not 

only to the consumer, but to the community. 

Beyond the grid, the smart appliance market will create new opportunities for a 

range of manufacturers. Put simply, these opportunities can translate into economic 

growth and improved competitiveness within our domestic manufacturing base. We 

believe that traditional appliance manufacturers as well as innovative start-up companies should be able to participate in this new market. Although Congress has 

voiced its intent to place our country on a pathway to leadership in the global smart 

grid market, we must ensure the correct incentives are in place to realize this vision. 

For this reason, we strongly support the provisions in this bill with expansion 

suggested in two areas—the consumer’s ability to participate and grid stability. 

Limiting the scope in paragraph (VII) to those smart appliances that ‘‘enable demand response or response to time-dependent energy pricing’’ puts the smart appliance industry and consumers at the mercy of utilities and regulators. As written, 

benefits would accrue only for smart appliances sold in service areas where regulators have put into place demand response and/or variable rate structures. A homeowner may choose to purchase a smart appliance because they have the capability 

to install a home energy management system from a third party to reduce home 

energy use without any utility demand response program or price signals. In addition, smart appliances should be able to detect and react to voltage sag and harmonic imbalances, improving grid stability regardless of utility signals. Both consumer choice and reliability are critical here; including the words ‘‘consumer choice’’ 

and ‘‘grid stability’’ in the bill would strengthen that provision. 

Given the importance of smart appliances to consumer choice, grid stability and 

manufacturing competitiveness, the GridWise Alliance strongly supports the Committee’s decision to include smart appliance language into the draft under discussion at this hearing. In conclusion, the GridWise Alliance supports smart appliance 

language in this bill as a means to prepare the market for consumer choice, reduce 

disruptions on our electric utility grid, and stimulate innovation and manufacturing 

in the US, providing economic stimulus and job growth. 

AMERICAN GAS ASSOCIATION, 

Washington, DC, March 9, 2010. 

Hon. JEFF BINGAMAN, 

Chairman, Energy & Natural Resources Committee, U.S. Senate, 304 Dirksen Senate 

Office Building, Washington, DC. 

Hon. LISA MURKOWSKI, 

Ranking Member, Energy & Natural Resources Committee, U.S. Senate, 709 Hart 

Senate Office Building, Washington, DC. 

Re: S. 3059, National Energy Efficiency Enhancement Act of 2010 

DEAR MR. CHAIRMAN AND SENATOR MURKOWSKI: I am writing you on behalf of 

the American Gas Association (AGA) and its 195 natural gas utility members. On 

March 10, 2010, the Energy and Natural Resources Committee will convene a hearing on S. 3059, the National Energy Efficiency Enhancement Act of 2010. 

We applaud and support your efforts to advance sound energy efficiency legislation and value the consensus effort that led to S. 3059 but we have serious concerns 

about the likely negative impact of the provisions of Section 2(e) (page 14) of the 

bill with respect to furnaces, especially as they pertain to the replacement market. 

Our primary concern is that Section 2(e) would require that furnaces manufactured on or after May 1, 2013, for use in ‘‘northern’’ states must have an Annual 

Fuel Utilization Efficiency (AFUE) of at least 90 percent. While laudable, this mandate could ultimately encourage consumers to repair rather than replace their fur-
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nace or, worse yet, not make the needed changes on the common-vented water heater venting system, which could result in a safety hazard. 

To prevent this unintended consequence from occurring, AGA proposes that the 

bill be amended so that the requirements for a 90 percent AFUE furnace would 

apply only to new construction and not replacement furnaces. Further, AGA proposes making the effective date January 1, 2015. There is no justification for having 

a longer effective date for heat pumps than furnaces. 

If only 90 percent AFUE furnaces are available, the consumer will have to take 

additional steps on the installation and venting of the furnace, as well as the remaining gas water heater, because 90 percent AFUE furnaces cannot be common 

vented (positive pressure in the vent eliminates the practice of common venting furnaces and water heaters). This will leave consumers with the dilemma and added 

cost of addressing the venting of the remaining water heater (i.e. resizing, relining, 

or replacing). This added cost can be substantial ($1,500 to $2,000). Additional considerations that must be made when requiring a 90 percent AFUE furnace in the 

replacement market include: availability to side wall vent the furnace, condensate 

disposal provisions and the addition of a drain pan. These considerations could result in discouraging the furnace replacement, which is not in anyone’s best interest. 

While the proponents of this provision may hope that mandating a 90 percent 

AFUE will result in more 90 percent furnaces, the result in the real world may well 

be the repair and continued operation of more 78 percent AFUE furnaces. 

One additional concern, especially as we enter a carbon-constrained world, is that 

this legislation may well lead to not only higher consumer costs and potential safety 

hazards but also to significant increases in greenhouse gas emissions by forcing a 

switch from natural gas water heaters to electric water heaters. The average electric 

water heater is, on a national average, responsible for almost twice as much carbon 

dioxide as the average natural gas water heater. AGA cannot believe that this outcome would be the result of for a sound energy policy. 

AGA also questions why the bill does not include a mandate for 90 percent AFUE 

for oil furnaces. Ninety percent AFUE oil condensing furnaces are on the market 

today. While oil furnaces do not have the degree of market penetration that natural 

gas furnaces have, imposing such a mandate would certainly assist the United 

States in reducing its dependence on foreign oil imports. 

And lastly, AGA questions why the bill does not address electric resistance furnaces. AGA would support a provision that would prohibit electric resistance furnaces in new construction or replacement markets, particularly in the ‘‘northern’’ 

states. Although electric resistance furnaces have a 100 percent AFUE, on a national average basis they require almost three times as much source energy and are 

responsible for almost three times as much carbon dioxide as a comparable natural 

gas furnace. 

We respectfully request that you make these modifications. Please contact AGA’ 

s Jeffrey Petrash at ipetrash@aga.org, or 202.824.7231, if we can provide further information on these points. 

Thank you for considering our views. 

Sincerely, 

DAVID N. PARKER, 

President and CEO. 

ENTERTAINMENT SOFTWARE ASSOCIATION, 

June 8, 2009. 

Hon. JEFF BINGAMAN, 

Chairman, Energy & Natural Resources Committee, U.S. Senate, 304 Dirksen Senate 

Office Building, Washington, DC. 

DEAR CHAIRMAN BINGAMAN: Per the request of staff, the Entertainment Software 

Association (ESA) respectfully submits this statement of support on behalf of the 

video game industry for an amendment by Senator Robert Menendez that would require the Secretary of Energy to undertake a study of video game console energy 

use and opportunities for energy savings. 

The video game industry is constantly striving for more efficient and effective use 

of energy among its product lines. To further this ongoing effort, console manufacturers have been working cooperatively and voluntarily for some time with the Environmental Protection Agency to reduce energy usage by developing EnergyStar 

standards. 

The industry remains dedicated to environmentally-friendly product design and 

energy conservation. We look forward to continuing to work with the Committee on 

these issues. 
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The ESA is the U.S. association exclusively dedicated to serving the business and 

public affairs needs of companies that publish computer and video games for video 

game consoles, personal computers, and the Internet. 

Sincerely, 

MICHAEL D. GALLAGHER, 

President and CEO. 

NINTENDO OF AMERICA, INC., 

Redmond, WA, April 25, 2009. 

Hon. ROBERT MENENDEZ, 

U.S. Senate, 528 Hart Senate Office Building, Washington, DC. 

DEAR SENATOR MENENDEZ: Nintendo of America Inc. (Nintendo) has been in discussions in recent weeks with your staff regarding the energy efficiency of video 

game consoles. As you know, this topic was the subject of a report late last year 

issued by the Natural Resources Defense Council. That report found Nintendo’s Wii 

console to be the most energy efficient of the current generation of video game consoles. The report indicated that average energy cost of the Wii for players who turn 

their systems off after use was only $3 per year, and only $10 per year for players 

who leave their systems on after use. Even in active mode, the Wii uses only 16.4 

watts of power—roughly equal to a high-efficiency lightbulb. 

Nintendo has reviewed a draft amendment provided by your staff which would require the Secretary of Energy to undertake a study of video game console energy 

use and opportunities for energy savings. You may be aware that all console manufacturers are working closely and cooperatively with the Environmental Protection 

Agency to develop EnergyStar standards for our industry. Nevertheless, Nintendo 

has no objection to the study called for in the amendment your staff has provided 

us. We pledge our full cooperation should the Secretary undertake such a study. 

Sincerely, 

RICHARD C. FLAMM, 

Senior Vice President and General Counsel. 

NATURAL RESOURCES DEFENSE COUNCIL, 

May 8, 2009. 

Hon. JEFF BINGAMAN, 

Chairman, Energy & Natural Resources Committee, U.S. Senate, 703 Hart Senate 

Office Building, Washington, DC. 

Hon. LISA MURKOWSKI, 

Ranking Member, Energy & Natural Resources Committee, U.S. Senate, 709 Hart 

Senate Office Building, Washington, DC. 

DEAR CHAIRMAN BINGAMAN AND RANKING MEMBER MURKOWSKI: On behalf of our 

more than 1.2 million members and activists, I write to urge your support of Senator Menendez’s proposal to direct the Department of Energy (DOE) to conduct a 

comprehensive study on the energy use and efficiency potential of video game consoles. 

An initial study commissioned by the Natural Resources Defense Council (NRDC) 

in 2008 showed that current video game consoles use excessive amounts of power 

in various operating modes and that mandatory standards might be needed to move 

manufacturers towards more energy efficient designs. Under some usage patterns, 

such as when the user fails to turn the device off after use, some of today’s models 

may consume as much annual electricity as two new refrigerators. 

The somewhat unique nature of this product category—e.g. only three products 

on the market, extended periods between new model releases, and the trend towards 

adding new features such as DVD playback to these devices—may give rise to some 

unique challenges while developing standards. As such, Senator Menendez’s proposal to direct the DOE to conduct an in-depth analysis of the energy use and savings potential from current and pending products represents the best next step. 

With this information in hand, the DOE will be in a better position to determine 

whether or not to recommend development of standards. This incremental approach 

also provides stakeholders with the opportunity to monitor the success of the pending ENERGY STAR specification for video game consoles. 

Sincerely, 

FRANZ A. MATZNER, 

Acting Legislative Director. 
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STATEMENT OF RILEY R. RUSSELL, SR. VICE PRESIDENT CHIEF LEGAL OFFICER, SONY

COMPUTER ENTERTAINMENT AMERICA, FOSTER CITY, CA, ON S. 1969 

Dear Chairman Bingaman: On March 10, 2010, the committee held a hearing to 

receive testimony on the Green Gaming Act of 2009, The Water Heater Rating Improvement Act of 2009, the National Energy Efficiency Enhancement Act of 2010, 

and other energy efficiency bills. SCEA would like to take this opportunity to correct 

the official record by responding to erroneous statements made during the course 

of the hearing and I respectfully request that this letter be included as part of the 

record. 

During statements made by the witness panel, Mr. Steven Nadel, Executive Director of the American Council for an Energy-Efficient Economy, incorrectly stated 

that the energy consumption of the PlayStation3 (PS3) is equivalent to two refrigerators: 

...The new PlayStation3, or relatively new, the Xbox 360, they use 100 

to 150 watts when on. So if you’re gaming, even if you’re not gaming, you 

know, you leave it on because you wanted to save the game and come back 

where you left off or you turn off the TV and forgot to turn off the Xbox, 

they still use 100 to 150 watts. We heard from Joe McGuire say that the 

average refrigerator uses an equivalent of a 60-watt light bulb left on continuously. These gaming systems use twice as much as energy when on. So 

equivalent of two refrigerators if you leave them on all the time.... 

Throughout the hearing, Mr. Nadel made statements that were either incorrect 

or greatly misinformed about the PlayStation 3. Moreover Mr. Nadel’s characterization of how games are played and saved do no comport with how modern video 

games are played. For example, when asked about the popularity of video games 

consoles in America and how much energy they use, Mr. Nadel stated: 

My understanding is that about 40% of American households have at 

least one of these videogame consoles. As you pointed out, if they are left 

on all the time, they can use 100, 150 watts continuously and that’s as 

much energy as two refrigerators. So that’s really an enormous source of 

energy use and one that has really grown in the last decade or so. 

A game console’s normal operation is to be on while actively used by the player 

and then powered down as with most unattended consumer electronics. Any usage 

comparison to a refrigerator that is required to be on all the time for ‘‘normal’’ operation is an invalid comparison. Not only are the technologies involved vastly different but so are the usage models. A more typical usage model for PlayStation 3 

would be 1 to 2 hours per day of average active on time and the annual energy consumption scales back accordingly. 

Most game console manufacturers either have or will soon have auto power down 

features enabled to prevent consumers from inadvertently leaving the console on for 

extended periods of time. Not only do all new PlayStation 3 consoles ship with this 

functionality, because the system can be updated through firmware updates over the 

internet and through software, auto power down functionality has been added to the 

original PlayStation currently owned by consumers. Moreover, as all modern game 

consoles have robust game save features, there is no functional need to leave a console on to save a place within a game. 

Finally you should know that Sony Computer Entertainment, and the industry, 

is committed to improving energy efficiency. The energy consumption of video game 

consoles, especially the PlayStation 3, is rapidly changing and becoming more and 

more efficient within each generation. The current model PlayStation 3 now uses 

almost 55% less energy than the original model in active game play mode and 65% 

less in standby mode. Standby mode is, in effect, ‘‘off’. This 65% reduction is significant because this is the state the console is in most—off. Significant efforts to further reduce energy consumption and support practical auto-power down modes continue. 

Thank you in advance for your attention to this matter. 

Æ