```

[Senate Hearing 112-10]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 112-10

                      ENERGY EFFICIENCY STANDARDS

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   TO

  RECEIVE TESTIMONY ON S. 398, A BILL TO AMEND THE ENERGY POLICY AND 
CONSERVATION ACT TO IMPROVE ENERGY EFFICIENCY OF CERTAIN APPLIANCES AND 
EQUIPMENT, AND FOR OTHER PURPOSES, AND S. 395, THE BETTER USE OF LIGHT 
                               BULBS ACT

                               __________

                             MARCH 10, 2011

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                       Printed for the use of the
               Committee on Energy and Natural Resources

                               ______

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  66-124 PDF              WASHINGTON : 2011
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20402-0001

               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            RICHARD BURR, North Carolina
MARY L. LANDRIEU, Louisiana          JOHN BARRASSO, Wyoming
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
BERNARD SANDERS, Vermont             MIKE LEE, Utah
DEBBIE STABENOW, Michigan            RAND PAUL, Kentucky
MARK UDALL, Colorado                 DANIEL COATS, Indiana
JEANNE SHAHEEN, New Hampshire        ROB PORTMAN, Ohio
AL FRANKEN, Minnesota                JOHN HOEVEN, North Dakota
JOE MANCHIN, III, West Virginia      BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Brandston, Howard, Lighting Consultant, Hollowville, NY..........    52
Cooper, Mark, Director of Research, Consumer Federation of 
  America........................................................    47
Hogan, Kathleen, Deputy Assistant Secretary, Energy Efficiency, 
  Department of Energy...........................................     4
McGuire, Joseph, President, Association of Home Appliance 
  Manufacturers..................................................    34
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     2
Nadel, Steve, Executive Director, American Council for an Energy-
  Efficient Economy..............................................    24
Pitsor, Kyle, Vice President, Government Relations, National 
  Electrical Manufacturers Association...........................    40
Yurek, Stephen, President and Chief Executive Officer, the Air-
  Conditioning, Heating, and Refrigeration Institute.............    37

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    63

                              Appendix II

Additional material submitted for the record.....................    93

 
                      ENERGY EFFICIENCY STANDARDS

                              ----------                              

                        THURSDAY, MARCH 10, 2011

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:31 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. Thank you all for coming. Welcome today's 
witnesses. We're here today to talk about 2 bills regarding the 
Department of Energy's Appliance Energy Efficiency Program.
    S. 398, to amend the Energy Policy and Conservation Act to 
improve the energy efficiency of certain appliances and 
equipment.
    S. 395, to repeal certain amendments to the Energy Policy 
and Conservation Act with respect to light bulb technology. 
These were provisions that were passed in 2007 and are now 
proposed for repeal.
    The first bill is an updated version of the Appliance 
Standards legislation that nearly passed the Senate by 
unanimous consent in December. It combines provisions that were 
reported from this committee as a part of the America Clean 
Energy Leadership Act, ACELA, with amendments to ACELA that 
were reported in May 2010 and with more recent agreements as 
well. The bill would increase or establish new efficiency 
standards for nearly 20 types of appliances from air 
conditioners to water dispensers.
    This legislation would continue to protect and create jobs 
by reducing regulations on business through the preemption of 
multiple State standards with simpler, more stable, more 
predictable Federal regulations. The legislation would also 
reduce the power and water bills of American households and 
businesses, free those savings for other uses. Make our economy 
stronger and more competitive and help protect the environment 
by avoiding the environmental impacts of reduced energy 
production.
    Enactment of this legislation would continue a bipartisan 
tradition that was started in this committee in 1987. It was 
repeated in 1988 and 1992 and 2005, again in 2007. That 
tradition is a tradition of enacting consensus appliance 
standards that have been negotiated among manufacturers and 
energy efficiency advocates and consumer groups. Overall it's 
estimated that by 2030 the standards will reduce national 
electrical demand 12 percent below what it otherwise would be.
    The second bill on today's agenda, S. 395, would repeal the 
efficiency standards for general service incandescent light 
bulbs and other provisions of Subtitle B3 of the Energy 
Independence and Security Act of 2007. The proposal is of 
concern to me because it goes against this tradition that I 
spoke about of broad bipartisan support for consensus appliance 
standards. I hope that today's record will confirm, as I 
understand, that not only will consumers continue to be able to 
buy incandescent bulbs that look the same as those they 
currently buy but those bulbs will provide the same quality of 
light as tradition incandescent bulbs. These bulbs will last 
longer, use less energy and save consumers money.
    Let me defer to Senator Murkowski for her comments before 
we hear from our witnesses.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman. Good morning. I 
appreciate you convening the hearing today. We certainly have 
two very different bills to discuss.
    The first one, the Implementation of National Consensus 
Appliance Agreements Act or INCAA, has been through several 
iterations, hearings and mark ups over the past 2 years. The 
bill contains consensus agreements that will set new efficiency 
standards for certain product classes of appliances.
    The second bill before us, the Better Use of Light Bulbs 
Act--which has a good acronym, you have to admit, ``BULBS''--
seeks to repeal some lighting standards that became law as part 
of the Energy Independence and Security Act of 2007.
    The implementation of National Consensus Appliance 
Agreements, which I have co-sponsored with you, Mr. Chairman, 
notably contains important new standards for outdoor lighting, 
furnaces and air conditioners. These proposed standards were 
the result of months, and in some cases, years, of hard work 
and negotiations amongst stakeholders, some of whom we will 
hear today. I think we recognize that while no piece of 
legislation is perfect, the time and effort put into these 
agreements is an important step forward. It certainly shows a 
sustained commitment to comprehensive bipartisan energy 
legislation.
    It is also my opinion that this bill goes a long way toward 
improved efficiency and therefore improved energy security. I 
applaud the efficiency advocates and the industry 
representatives for their very, very hard work on this. We knew 
it. We know that was a long process.
    Mr. Chairman, as it relates to the second bill, I think 
it's fair to say that light bulbs have really become the hot 
topic around Capitol Hill now. They have become perhaps more of 
a symbol, possibly a very visible, a very tangible symbol of 
the overreach of big government. I can certainly sympathize 
with that sentiment.
    There have been countless news stories about what the new 
standards, which will be phased in over the next several years, 
will mean to the average American family. I'm interested in 
this debate on a personal level. My husband and I seem to have 
ongoing debates. I won't classify them as arguments. But 
debates about the effectiveness and where we need to go in our 
household when it comes to light bulbs.
    Everybody has had some kind of an experience that they 
relate to with CFLs. Our family is no exception. One of us 
hears a buzz or a flicker and blames it on the light bulb.
    I think it's fair to say that the light is perhaps not the 
same quality as the incandescent bulb. They contain mercury 
which we all know is a hazard. I'm told though that better 
technology exists, and while the standard light bulb that we 
know and love may soon be phased out, there are new products 
that are strikingly similar to the old ones and have the added 
benefit of saving electricity.
    So I'm looking forward to hearing what our witnesses have 
today and the robust debate that we will have over our lighting 
efficiency.
    Thank you.
    The Chairman. Thank you very much.
    For the record at this point I would include a statement 
that Senator Enzi has provided. He's the prime sponsor on S. 
395.
    Also a letter from the Consumer's Union, and a letter from 
the National Association of State Energy Officials.*
---------------------------------------------------------------------------
    * See Appendix II.
---------------------------------------------------------------------------
    [The prepared statement of Senator Enzi follows:]
    Prepared Statement of Michael B. Enzi, U.S. Senator From Wyoming
    Chairman Bingaman and Ranking Member Murkowski, thank you for 
allowing me to share my thoughts about S. 395, the Better Use of Light 
Bulbs (BULB) Act. I introduced this legislation because lighting in our 
homes should be about personal choice and not about federal mandates.
    The legislation that was passed in 2007 set a standard that 
effectively bans the traditional incandescent light bulb. I opposed the 
legislation when it was passed and I continue to oppose it today. The 
light bulb mandate phases out traditional incandescent light bulbs in 
California this year and will begin to phase out traditional 
incandescent light bulbs in the rest of the United States in 2012. It 
is the sort of ``Washington knows better'' approach that was soundly 
rejected by the American people. It should also be rejected by members 
of the United States Senate.
    The de-facto ban on the traditional incandescent light bulb was 
intended to save on energy costs and limit pollution by replacing one 
light bulb with another. Unfortunately, as with many regulations, there 
are unintended consequences. In this case the alternative bulbs are 
more expensive and the most common alternatives contain mercury, which 
is harmful even in the smallest amounts. We should not allow this 
mandate to stand.
    Twenty-seven of my Senate colleagues agree with me--they 
cosponsored the BULB Act. Six of the original cosponsors are members of 
the Energy Committee. Rather than allowing members of Congress to 
dictate what light bulbs must be used in every American's home, my 
legislation allows the market to work. It allows every American to 
decide what light bulbs work best for them. If a rancher in Wyoming 
wants to use compact fluorescent light bulbs (CFLs) because they prefer 
the light from CFLs, passage of my bill allows that to happen. Passage 
of the BULB Act also allows a shoe store in Houston to use traditional 
incandescent bulbs if they believe the light from the traditional bulb 
makes their product look better. It gives consumers the option to 
decide what works best for them and avoids that one-size-fits-all 
approach that Washington should reject.
    Some argue that this mandate is essential to foster innovation. 
They tell us that we are on the verge of new lighting technology that 
will revolutionize light bulbs, saving consumer money and saving 
energy. I hope this is the case. However, if the new light bulbs that 
are on the horizon are significantly better than the bulbs that exist 
now, the American people will buy them. If a product of equal quality 
is available for a comparable cost, the American people will buy them 
on their own. It isn't our job to force them from one product to 
another.
    It has also been argued that this standard is essential because 
individual states set their own standards. I would respond that those 
states are wrong to do so and we should not encourage such behavior by 
forcing a Washington mandate into every single home in America. If 
legislators in a state like California want to force a light bulb 
mandate on its citizens, that's fine by me. However, their decision 
should not result in a federal mandate that forces citizens in my home 
state and every other state to buy more expensive and potentially 
harmful light bulbs.
    If someone wants to fill their home or business with the light from 
the new bulbs, they should be able to do so. I also think it is fine if 
someone wants to buy an old-fashioned bulb because it works better for 
them. If left alone, the best bulb will win its rightful standing in 
the marketplace. Government doesn't need to be in the business of 
telling people what light bulb they have to use.
    I appreciate the opportunity to share my thoughts and hope you will 
join me in supporting consumer choice in our homes.

    The Chairman. We have 2 panels today.
    The first panel is a representative from the Department of 
Energy.
    Ms. Kathleen Hogan, who is the Deputy Assistant Secretary 
for Energy Efficiency in the U.S. Department of Energy. Why 
don't you go right ahead, Ms. Hogan with your testimony. We 
will have some questions of you. Then we will introduce the 
second panel after you're complete.
    Go right ahead.

STATEMENT OF KATHLEEN HOGAN, DEPUTY ASSISTANT SECRETARY, ENERGY 
                EFFICIENCY, DEPARTMENT OF ENERGY

    Ms. Hogan. Thank you and good morning, Chairman Bingaman 
and Ranking Member Murkowski and members of the committee. 
Thank you for the opportunity to appear today to discuss S. 395 
and S. 398. As you all know, energy efficiency is an immediate, 
economically responsible way to increase the Nation's energy 
security while protecting our environment. Appliance standards, 
in particular, are a highly cost effective way for advancing 
energy efficiency. Some of the greatest opportunities for 
energy savings are in the appliances and products that 
consumers and businesses use every day.
    I have submitted some detailed comments on the 2 bills that 
are the subject of today's hearings, but I'd like to take this 
opportunity just to briefly outline the Department's position 
on these bills for the committee.
    So first there is the bipartisan Implementation of National 
Consensus Appliance Agreements Act of 2011 or INCAA. I'll call 
it INCAA, which codifies agreements that were negotiated, 
signed and promoted by a cross section of stakeholders 
representing consumer advocacy groups, manufacturers, 
manufacture trade associations and energy efficiency advocacy 
organizations, all of whom support this bill. The negotiated 
consensus agreements would establish energy conservation 
standards for 14 products.
    Because many of these standards do overlap with several DOE 
rules currently under development the Department cannot present 
a position today that would presuppose the level of the final 
standards. However, initial DOE analyses of the types of 
improvements that are suggested here do show the opportunity 
for significant net benefits to consumers and businesses on the 
order of billions of dollars. We also know that manufacturers 
and manufacture trade associations representing the vast 
majority of manufacturers in each of the appliance markets 
recognize that they too would benefit from these consensus 
agreements and clearly have spent significant efforts in 
getting to the agreements that we now have before us.
    So INCAA would provide regulatory certainty.
    Would help industry plan investments in manufacturing the 
products that would meet the standards.
    Further these standards would continue to promote 
innovation by setting minimum performance thresholds rather 
than prescribing specific approaches.
    So now let me move to the second bill. The Better Use of 
the Light Bulbs Act or the BULB Act, would repeal portions of 
the bipartisan Energy Independence and Security Act of 2007 
which does include higher efficiency standards for general 
service incandescent lamps that would phase in in the coming 
years. The first phase would begin in January 2012 and would 
require the 100 watt bulb to be roughly 25 percent more 
efficient than it is today.
    DOE strongly supports the EISA 2007 standards and joins 
with industry and energy efficiency organizations in opposing 
the BULB Act. The EISA lighting standards will save families 
and businesses money and help protect the environment.
    Lighting represents roughly 10 percent of a typical 
family's electric bill. We estimate that using the EISA 
compliant light bulbs will save consumers nearly $6 billion in 
2015 alone. An individual household that would upgrade, say, 15 
light bulbs could save about $50 per year.
    Many Americans are already familiar with the efficient 
light bulbs that would be compliant with EISA. According to a 
recent USA Today Gallup poll, nearly 3 out of 4 Americans 
report having replaced inefficient bulbs with our more 
efficient options over the last few years. Eighty-four percent 
of them report being satisfied with the newer bulbs.
    Besides repealing the lighting standards, the BULB Act 
could also jeopardize the Federal Trade Commission's authority 
to issue labels on light bulbs similar to the nutrition labels 
on food products which Americans use every day. This label 
would contain very useful information to the consumers: annual 
energy costs, the useful life, light quality and energy 
consumption. Repealing this provision would remove a very 
important tool for consumers in making informed lighting 
choices. The BULB Act could also repeal FTC authority to 
provide labels on consumer electronics or other products not 
specifically identified in the Energy Policy and Conservation 
Act.
    Finally, should these standards be repealed, manufacturers 
may see a greater regulatory burden as States could follow 
California's example and implement their own lighting 
standards, creating confusion among consumers and uncertainty 
and costs for industry. Industry has already prepared 
substantially for these standards. New factories producing more 
efficient lighting choices have opened, and old factories have 
been retooled to produce these more efficient bulbs. There's 
great value in one national standard creating one national 
market for these bulbs.
    So in summary, INCAA contains provisions that represent 
industry, advocate and consumer consensuses and according to 
our analyses, would save consumers billions of dollars.
    The BULB Act on the other hand would cost consumers and 
manufacturers money and result in higher energy use and higher 
bills.
    So thank you again for the opportunity to share the 
Department's views on these 2 pieces of legislation. I would 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, Department of Energy
    Chairman Bingaman, Ranking Member Murkowski, Members of the 
Committee, thank you for the opportunity to discuss the Implementation 
of National Consensus Appliance Agreements Act of 2011 (S.398) and the 
Better Use of Light Bulbs Act (S.395).
    In June 2009, President Obama said, ``One of the fastest, easiest, 
and cheapest ways to make our economy stronger and cleaner is to make 
our economy more energy efficient.''\1\ Energy-conserving appliance 
standards are one of the significant steps the Administration has taken 
to save energy in homes and businesses nationwide, and pave the way 
toward a clean energy future for our country.\2\ Since January 2009, 
the Department of Energy has finalized new efficiency standards for 
more than twenty household and commercial products, which are projected 
to cumulatively save consumers between $250 billion and $300 billion 
over the next 20 years.\3\ These standards can provide an immediate and 
economically responsible way to increase the nation's energy security 
while protecting the environment. Improvements in energy efficiency can 
be made today to yield significant near-term and long-term economic and 
environmental benefits for the nation.\4\
---------------------------------------------------------------------------
    \1\ http://www.whitehouse.gov/the--press--office/Remarks-by-the-
President-on-Energy/
    \2\ http://www.whitehouse.gov/issues/energy-and-environment
    \3\ http://www.energy.gov/news/9582.htm
    \4\ See, for example: McKinsey and Company (2007). Reducing U.S. 
Greenhouse Gas Emissions: How Much at What Cost? (http://www.epa.gov/
cleanenergy/documents/suca/cost-effectiveness.pdf) and Lazard 
Associates. Feb. 2009. Levelized Cost of Energy Analysis Version 3.0.
---------------------------------------------------------------------------
    The U.S. Department of Energy (DOE) is pleased to work with you and 
your fellow Committee Members to make our homes, offices, factories, 
vehicles, and appliances more energy efficient. The Department's energy 
efficiency efforts include promoting and implementing energy efficiency 
policies and practices; strengthening consumer education and outreach 
on energy efficiency as a cost-saving resource; and accelerating market 
adoption of energy efficient technologies that save families and 
businesses money.
    My comments focus on two pieces of pending legislation related to 
energy efficiency standards. First, I will discuss the Implementation 
of National Consensus Appliance Agreements Act of 2011 before turning 
to the Better Use of Light Bulbs Act.
 implementation of national consensus appliance agreements act of 2011 
                                (s.398)
    S.398 codifies agreements that were negotiated, signed, and 
promoted by a cross-section of stakeholders representing consumer 
advocacy groups, manufacturers, manufacturer trade associations, and 
energy efficiency advocacy organizations, all of whom support this 
bill. The negotiated consensus agreements would establish energy 
conservation standards for 14 products, several of which are in the 
midst of DOE's ongoing standards and test procedure rulemakings.
    In 2007, Congress recognized the importance of negotiated consensus 
standards, amending the Energy Policy and Conservation Act (EPCA) to 
allow for an expedited rulemaking process in the event a representative 
group of stakeholders could reach agreement. Because several DOE rules 
currently under development and review overlap with the proposed 
consensus standards, the agency cannot at this time present a position 
that would presuppose the level of the final standards outcome; 
however, the analyses accompanying the proposed rules for these 
standards suggested potential net benefits of tens of billions of 
dollars in fuel savings and lower greenhouse gas emissions.
    Manufacturers and manufacturer trade associations representing the 
vast majority of the manufacturers in each appliance market recognize 
they would also benefit from consensus agreements. S.398 could provide 
regulatory certainty for industry and could reduce litigation risk by 
setting the time table and accompanying requirements for industry to 
meet, all of which could help manufacturers in planning their 
investments when manufacturing compliant products.
    S.398 could also allow DOE to respond to industry and efficiency 
advocates' requests for greater technical flexibility in DOE test 
procedures and energy conservation standards by giving the department 
the authority to regulate based on multiple efficiency descriptors. 
These additional tools could ensure that the metrics DOE uses in its 
standards remain flexible and meaningful as industry continues to 
create newer and more innovative products.
    S.398 appears to prescribe some duplicative procedural requirements 
that could put an unnecessary resource burden on DOE. For example, the 
bill's requirement that DOE respond in a published rulemaking to any 
petition requesting amended standards is unnecessary given that DOE 
already must review each standard every six years--and the evaluation 
period begins years before that. Similarly, the bill adds provisions 
giving stakeholders the right to petition for a test procedure review, 
a right they already hold under the current law.
    In summary, S.398 contains provisions that represent industry, 
advocate, and consumer consensus and that could streamline DOE's 
standard-making process. Because several DOE rules currently under OMB 
review overlap with the proposed consensus standards, the agency cannot 
at this time present a position that would presuppose the final outcome 
of the rulemaking deliberative process.
                 better use of light bulbs act (s.395)
    This legislation would repeal portions of the bi-partisan Energy 
Independence and Security Act of 2007 (EISA), which includes higher 
efficiency standards for general service incandescent lamps that will 
phase in over the coming years. The first iteration of the standards is 
scheduled to take effect on January 1, 2012, and will require 100 Watt 
bulbs to be roughly 25 percent more efficient.
    The Administration strongly supports these standards, and joins 
industry and energy efficiency organizations in opposing S.395. The 
EISA lighting standards are projected to save families and businesses 
money, empower consumers with lighting choices, and help protect the 
environment. DOE projects that if S.395 were enacted, U.S. primary 
energy consumption would increase by 21 quads and greenhouse gas 
emissions could increase by more than 330 million metric tons\5\ over 
the next 30 years.
---------------------------------------------------------------------------
    \5\ http://www1.eere.energy.gov/buildings/appliance--standards/
pdfs/en--masse--tsd--march--2009.pdf
---------------------------------------------------------------------------
    The EISA standards may generate significant savings for consumers. 
Lighting represents about 10 percent of a typical family's electric 
bill.\6\ Using EISA-compliant light bulbs could save consumers nearly 
$6 billion in 2015 alone.\7\ A household that upgrades 15 inefficient 
incandescent light bulbs could save about $50 per year.\8\
---------------------------------------------------------------------------
    \6\ http://www.energysavers.gov/your--home/lighting--daylighting/
index.cfm/mytopic=11975
    \7\ U.S. Department of Energy analysis (2011), assuming the light 
bulb is on for two hours per day, an electricity rate of $0.11 per 
kilowatt-hour, and comparing a 100 Watt incandescent to a 26 Watt CFL. 
No rebound effect is assumed.
    \8\ U.S. Department of Energy analysis (2011)
---------------------------------------------------------------------------
    DOE projects that these standards will help Americans further 
recognize the savings potential they are already beginning to realize. 
According to a recent USA TODAY/Gallup poll, nearly three out of four 
Americans say they have replaced inefficient bulbs with compact 
fluorescent lights (CFLs) or light-emitting diodes (LEDs) over the last 
few years, and 84 percent of those Americans are very satisfied or 
satisfied with their newer bulbs.\9\
---------------------------------------------------------------------------
    \9\ USA Today. February 17, 2011 http://content.usatoday.com/
communities/greenhouse/post/2011/02/pollamericans-ok-newer-light-bulbs/
1
---------------------------------------------------------------------------
    Further, since the standards are performance-based, consumers will 
be able to choose from an array of efficient bulbs, including 
incandescent halogens, CFLs, and LEDs. They establish technology-
neutral, minimum requirements around the amount of light delivered per 
unit of energy consumed, which is helpful for consumers.
    S.395 could jeopardize the required application of an important 
label on lighting products, removing a key tool for consumers to make 
informed choices. For decades, Americans chose light bulbs based on how 
much energy they consume (watts) instead of on how much light they emit 
(lumens). Selecting a light bulb based on lumens will help consumers 
choose how much light they want while saving money by making smarter, 
energy-saving choices. To help consumers better understand lumens, the 
Federal Trade Commission will release a new label (shown at the right) 
for light bulbs this summer, similar to the nutrition labels on food 
products with which Americans are familiar.\10\ The label will not only 
contain lumen output, it will also provide the estimated operating cost 
of a bulb for a year, and the color quality of the light, which can 
range from the warm light to cooler bluish light. Energy-saving options 
from efficient incandescent bulbs to CFLs to LEDs can all be found on 
the warm side of the spectrum, providing the same light as less-
efficient bulbs.
---------------------------------------------------------------------------
    \10\ http://www.ftc.gov/opa/2010/06/lightbulbs.shtm
---------------------------------------------------------------------------
    At DOE, we will work with partners to provide accurate and 
consumer-friendly information through our website, public service 
announcements, and other media. California began the transition to 
energy-saving lighting in January 2011, so DOE will analyze the State's 
experience and will adopt best practices to help consumers become 
comfortable with the national lighting transition. DOE also plans to 
work with retailers and consumer groups to help them understand the new 
standards and emphasis on lumens.
    There is broad consensus support for the EISA standards within the 
lighting industry, which continues to prepare to implement them. New 
factories producing more efficient lighting choices have opened. Old 
factories have been retrofitted to produce more efficient bulbs. 
Further, should these standards be repealed by S.395, many states could 
implement their own lighting standards. This could generate confusion 
among consumers in the market and would force the lighting industry to 
face a complex patchwork of different lighting standards in different 
areas, leading to higher regulatory compliance costs. A uniform 
national standard ensures a national market for efficient bulbs.
    The EISA lighting standards may also provide incentives for 
innovation and economic competitiveness. Over the past ten years, 
portions of the lighting market have dramatically evolved, in part due 
to lighting efficiency requirements. For example, linear fluorescent 
lamp standards enacted by the Energy Policy Act of 2005, may have 
contributed to the development of a larger market for higher-efficiency 
alternatives. Since the enactment of EISA just three years ago, many 
new halogen, CFL, and LED lamp products have appeared on the market, 
providing consumers with even more choices in lighting. Over the past 
20 years, CFL prices have decreased about 10 fold (approximately $20 in 
1990 to $2.50 today).\11\ So companies are continuing to innovate and 
raise the bar for energy efficient lighting while lowering costs, and 
DOE believes the EISA standards play a part in that trend.
---------------------------------------------------------------------------
    \11\ http://www.energystar.gov/ia/products/downloads/CFL--Market--
Profile.pdf
---------------------------------------------------------------------------
                               conclusion
    In summary, S.398 contains provisions that represent industry, 
advocate, and consumer consensus, that could streamline DOE's standard-
making process. S.395, on the other hand, could cost consumers and 
manufacturers money and detrimentally affect the nation's economy, 
energy security, and environmental imperatives.
    DOE is continually working to seize the opportunities energy 
efficiency offers, saving families and businesses money by saving 
energy. There are many opportunities to further improve energy 
efficiency in appliances and products that consumers and businesses use 
every day. Therefore, the Department continues to strive to establish 
cost-effective commercial and residential appliance standards. DOE is 
constantly attempting to modernize, improve, and tailor the appliance 
standards to respond to improvements in energy efficient technology, 
while being responsive to legislative and regulatory requirements.
    Thank you again for the opportunity to offer the Department's views 
on these proposed pieces of legislation. I am happy to answer any 
questions Committee Members may have.
  Background: A Section by Section Description as Each Relates to the 
                 Appliance Standards Program Activities
s.398--implementation of national consensus appliance agreements act of 
                                  2011
Sec 2. Energy Conservation Standards

          (a) Multiple efficiency descriptors: This section amends the 
        definition of energy conservation standard to allow DOE to 
        consider multiple efficiency descriptors for the same product. 
        Currently, DOE does not have authority to regulate based on 
        multiple efficiency descriptors for many of its covered 
        products. 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: This section specifies regional standards through the 
        adoption of the consensus efficiency requirements for central 
        air conditioners and central air conditioning heat pumps.
          (c) Standards for niche types of central air conditioners and 
        heat pumps (i.e., through-thewall and small duct high velocity 
        systems): This section implements the standard provided by 
        DOE's Office of Hearing and Appeals through exception relief 
        for throughthe-wall and small duct high velocity systems. In 
        the absence of legislation permanently adopting the efficiency 
        levels provided in the exception relief for these products or 
        other legislative change addressing anti-backsliding in this 
        context, DOE would not be able to consider amended energy 
        conservation standards for these product types because the 
        current Federal standards exceed the energy efficiency 
        potential of these products due to size constraint limitations. 
        This section provides a permanent solution to the current 
        exception relief and provides DOE with the potential 
        possibility of conducting a rulemaking in the future for these 
        products.
          (e) Regional standards for furnaces: This section specifies 
        regional standards through the adoption of the consensus 
        efficiency requirements for oil-fired and weatherized 
        residential furnaces.
          (f) Allowance for State building codes to exceed Federal 
        standards: This section provides a pathway for State buildings 
        codes to exceed Federal standards for certain types of products 
        and new construction applications. This section implements a 
        portion of the consensus agreement for residential furnaces and 
        central air conditioners and heat pumps, which sets these more 
        stringent levels as targets for building codes. Currently, DOE 
        cannot consider different standards for new and existing 
        construction either through building codes or 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 product applications. This is because some 
        efficiency technologies require not only changes in the 
        equipment itself but also in how the equipment is installed in 
        a building. Since whole-building standards can address both 
        equipment features and the building system within which they 
        operate, such codes can sometimes address the efficiency 
        improvements more economically than equipment standards alone. 
        Currently due to Federal preemption, building codes cannot take 
        advantage of such economically viable energy efficiency 
        opportunities because they cannot specify equipment standards 
        that are more stringent than Federal standards. Instead, 
        building codes can only specify more stringent requirements for 
        energy-efficient appliances as one pathway to meeting the 
        code's requirements, and an option to install appliances which 
        meet the national energy conservation standard levels must 
        remain available.
Sec. 3. Energy Conservation Standards for Heat Pump Pool Heaters.
    This section provides DOE with the authority to regulate and sets 
the initial test procedure and standard for heat pump pool heaters. 
DOE's current regulatory program only includes gas heaters for pools 
and spas. This section would expand DOE's authority to include a 
comparable type of equipment for households in warmer climates and with 
electricity-only energy supplies. It is unclear if this section would 
apply to electric pool and spa heaters that do not utilize heat pump 
technologies.
Sec. 4. GU-24 Base Lamps.
    This section prohibits incandescent lamp designs for use with GU-24 
sockets and prohibits the use of socket adaptors to convert a GU-24 
socket to any other socket type. The GU-24 socket is a pin-based design 
that is an alternative to the standard Edison socket that is commonly 
used for incandescent bulbs. The GU-24 socket is commonly used with 
certain designs of compact fluorescent lamps.
Sec. 5. Bottle-Type Water Dispensers, Commercial Food Holding Cabinets 
        and Portable Electric Spas.
    This section adds bottle-type water dispensers, commercial food 
holding cabinets and portable electric spas to the Appliance Standards 
Program and establishes energy conservation standards for each product, 
based on the existing standards adopted by the California Energy 
Commission (CEC).
Sec. 6. Test Procedure Petition Process.
    This section establishes a petition process where parties can 
petition for a rulemaking to amend the existing test procedures. 
Parties already have the right to petition for a rulemaking to amend 
the existing test procedures, so this provision appears duplicative.
Sec. 7. Refrigerator-Freezer, Clothes Washer, and Clothes Dryer Test 
        Procedures.
    This section requires DOE to finalize the amendments to the 
refrigerator, refrigeratorfreezer and freezer test procedures DOE 
proposed in December 2010 within 90 days of enactment of the 
legislation. Additionally, this section requires DOE to publish an 
amended test procedure for clothes dryers no later than 180 days of 
enactment of the legislation, which is limited to considering 
amendments resulting from the testing of dryers with automatic 
termination controls. Lastly, this section requires DOE to publish an 
amended test procedure for clothes washers.
Sec. 8. Credit for Energy Smart Appliances.
    This section would require the Environmental Protection Agency 
(EPA) to decide whether to update ENERGY STAR criteria to incorporate 
smart grid and demand response features. While this provision may seem 
to only affect EPA, EPA uses DOE's test procedures to administer the 
ENERGY STAR program for many of DOE's regulatory products. This could 
have a significant impact on DOE if amendments to these test procedures 
are needed to support EPA in these efforts.
Sec. 9. Study on Video Game Consoles.
    This section would require DOE to conduct a study on energy use and 
opportunities for energy savings for video game consoles.
Sections. 10, 11, 13, 14 and 15. Refrigerator, Room Air Conditioner, 
        Clothes Dryer, Clothes Washer, and Dishwasher Standards.
    These sections would adopt the consensus appliance standards 
recommendations for certain types of home appliances.
Sec. 12.Water heater efficiency descriptor.
    This section includes a provision, which would require the 
Department of Energy to establish a uniform efficiency descriptor and 
test method for covered water heaters by issuing a final rule no later 
than 180 days after enactment. DOE's current regulatory program 
establishes separate efficiency descriptors, test procedures, and 
standards for covered residential and commercial water heaters based on 
characteristics, such as rated storage volume and input ratings. This 
bill would provide DOE with more flexibility as compared to the current 
regulatory scheme for regulating different types of covered water 
heaters (i.e., both residential and commercial) using the same metric 
and test procedure.
Sec. 16. Petition for Amended Standard.
    This section would require DOE to publish a final rule or 
determination within three years of receipt of a petition for 
rulemaking to amend an existing energy efficiency standard. This 
requirement, if enacted, would add a seemingly unnecessary burden on 
DOE, since it is already required to review standards every six years 
to determine whether they warrant amendment.
Sec. 17. Prohibited Acts.
    Currently, DOE's authority to enforce its energy and water 
conservation standards is limited to manufacturers, including 
importers, engaged in specific conduct. This provision would expand DOE 
authority to include distributors, retailers, or private labelers in 
addition to manufacturers and importers from offering for sale or to 
distribute non-compliant products. This would give DOE more flexibility 
in enforcing its regulatory program.
Sec 18. Outdoor Lighting.
    This section would give DOE authority to set minimum efficiency 
standards for additional types of commercial, industrial, and outdoor 
lamps. Specifically, the section would establish minimum efficacy 
standards for certain high-output double-ended quartz halogen lamps and 
end production of general purpose mercury vapor lamps. Alternative 
lighting options that meet these standards are commercially available. 
These provisions are also consistent with the on-going DOE activities 
to set efficiency standards for particular high intensity discharge 
lamps and lamp ballasts.
Sec. 19. Standards for Commercial Furnaces.
    This section would adopt and expand DOE's authority to include 
additional prescriptive requirements for commercial furnaces. 
Currently, commercial furnaces are only subject to energy efficiency 
requirements because DOE does not have the authority to consider dual-
metrics for this type of equipment. Gas-fired and oil-fired furnaces 
that meet the standards in this section are commercially available.
Sec. 20. Standards for Over the Counter, Self-Contained Medium 
        Temperature Commercial Refrigerators.
    Over the counter, self-contained medium temperature commercial 
refrigerators are those refrigerators that are used in retail 
establishments to display fresh food products. Given the design of the 
products, it is very difficult for them to meet the standards that are 
scheduled to go into effect on January 1, 2012. Under current law, DOE 
cannot recall these standards, as back-sliding is explicitly prohibited 
by EPCA. This section of the legislation would adjust the Federal 
standards for these certain types of commercial refrigeration equipment 
to lower efficiency levels.
Sec. 21. Motor Assessment.
    This section would require DOE to collect information on electric 
motor manufacture, shipment and sales. The Census Bureau previously 
collected this data, but it has since discontinued those efforts. This 
task falls beyond the normal purview of the Energy Efficiency and 
Renewable Energy Office, but the Energy Information Administration in 
DOE may be capable of performing such assessment. Based on the 
Assessment, DOE would be required to establish a national program to 
increase awareness of motor efficiency.
Sec. 22. Study on Compliance with Standards.
    This section would require DOE to conduct a study on manufacturer 
compliance with energy efficiency standards.
Sec. 23. Study on Direct Current Electricity Supply.
    This section would require DOE to conduct a study on the costs and 
benefits of direct current electricity. This study would be the 
responsibility of the Office of Electricity Reliability in DOE.
Sec. 24.Technical Corrections.
    This section would make numerous technical corrections, many of 
which DOE has identified as necessary, and none of which DOE identifies 
as objectionable.

    The Chairman. Thank you very much. Let me start with 
questions.
    Let me just alert members when we do get eight members here 
as we hope we will shortly. We're going to just interrupt the 
questioning to vote the issue of whether to close next 
Tuesday's meeting of the committee related to cyber security. 
I'll make a motion to do that because we're advised that much 
of the information that will be presented at that meeting to 
the committee has national security implications and we would 
be well advised to have that as a closed meeting next Tuesday. 
So we'll interrupt things to vote on that when and if we get 8 
members.
    But Ms. Hogan, let me ask you a couple of questions. Your 
testimony makes some positive statements about the INCAA, as 
you call it, S. 398. You say in your testimony that it would 
provide regulatory certainty for industry, would reduce 
litigation risk and that it contains provisions that could 
streamline DOE standard making process.
    I also though, pick up that you have not taken a formal 
position on this legislation. Is it fair to say that the 
Administration is supportive? Are you expecting to come out 
with a formal position? What is the status on that?
    Ms. Hogan. I believe it is fair to say that we are 
generally supportive of this provision. But in terms of coming 
out with a formal statement I will take that back and express 
your interest in the Administration coming forward with that. 
We would hope to provide that as soon as possible.
    [The information referred to follows:]

    Because many of the proposed standards in INCAAA overlap with DOE's 
ongoing rulemakings, the Administration is unable to take a formal 
position on this bill, as doing so would presuppose the result of DOE's 
rulemakings. However, DOE and the Administration are both firmly 
committed to the energy and money savings potential of appliance 
standards in general. Further, DOE's initial analyses of these specific 
standards indicate that they have the potential to save billions of 
dollars while creating regulatory certainty for manufacturers 
throughout the country.

    The Chairman. In the point that you make about how this 
legislation could streamline DOE's standard making process is 
there any way to estimate savings that could be expected to 
result from the streamlining either within the Department of 
Energy or in industry or otherwise?
    Ms. Hogan. Yes. We do see that there are opportunities for 
streamlining due to some of the provisions in this bill. We 
have not yet developed such an estimate. But with your interest 
we would be happy to work on such an estimate and get back to 
you on that.
    [The information referred to follows:]

    Several of the appliance standards in INCAAA are currently being 
worked on by DOE in its ongoing standards and test procedure 
rulemakings. The passage of INCAAA would therefore streamline the 
creation of these standards, reducing the amount of time, money, and 
resources that DOE would need to devote to bring these standards to 
market. This would enable DOE to shift those resources to other 
activities, providing more bang for the taxpayers' buck. The exact 
amount of savings that would result from streamlining these standards 
is difficult to quantify, however, since it depends in large part on 
the timing of INCAAA's passage. All of DOE's work on these standards 
will be completed by June 30, so if INCAAA was passed in the next few 
weeks, it would save up to two months or more of work on these 
standards. Even if INCAAA were passed after June 30, it would still 
speed up the timeline to implement these standards, enabling consumers 
to realize energy savings sooner.

    The Chairman. OK.
    Your point about S. 395, the BULB Act and the effect it 
would have. Now my understanding is California has adopted 
standards related to lighting, light bulbs, but that those are 
not currently in effect because of the Federal law that we have 
passed. Am I right in assuming that if we repeal the Federal 
law than the California standards would once again be in 
effect? Is that your understanding of how it would work?
    Ms. Hogan. Actually the California standard is in effect as 
we speak. They are leading the rest of the Nation by about a 
year. But there is language in EISA 2007 that preempts other 
States from going forward with their own standards once a 
national standard take effect and as the national standard in 
EISA 2007 rolls in it would quickly align with the California 
standard.
    So I think the bottom line is if these provisions from EISA 
2007 are repealed it will give other States the opportunity to 
follow in California's footsteps. If we look to the past decade 
or so what we see is that many, many times when California has 
gone forth and set a standard many other States followed in 
California's footsteps, creating a patchwork of markets across 
our country. I think as we all think back to the genesis of the 
appliance standards program to begin with, that's really one of 
the reasons folk all come together around national standards is 
to avoid such a patchwork of markets.
    The Chairman. Alright.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Ms. Hogan, welcome. Thank you for your testimony.
    You had mentioned in your comments that there are several 
DOE rules that are under development and you have an overlap 
situation with the consensus standards that are contained in 
INCAA. When do you expect these standards to be finished?
    Ms. Hogan. Many of the standards that we are working on 
where there is overlap we have deadlines this summer that we 
are working aggressively to meet.
    Senator Murkowski. OK. In the process of implementation of 
a standard, how long does something like this take?
    Ms. Hogan. The process of developing a standard is a 
lengthy undertaking because we have to go through the process 
of doing all the technical work and working with the private 
sector to make sure we have the best available technical 
information upon which to create a standard. It can start with 
the development figuring out how you measure the energy 
consumption of a product, and how to test on an apples to 
apples basis. Frequently we need to develop the test procedure 
first and then go and have a good discussion about where to set 
the levels that deliver the greatest savings to consumers.
    So that can be a 2-year or so process depending on where we 
start and what type of information is available in the 
marketplace when we take on a rulemaking process.
    Senator Murkowski. Do we have any idea then as to the cost 
that would be associated as you try to implement the standards 
over a several year process----
    Ms. Hogan. In terms of our efforts to develop standards 
the--we can develop those estimates. It can vary a little bit 
by product category and the technical complexity. But we would 
be happy to develop some of those numbers for you and show you 
that range.
    [The information referred to follows:]

    The costs to DOE and outside parties of implementing appliance 
standards varies according to the number of stakeholders, the 
complexity of the standard, and the length of negotiations. As an 
example, the water heater rulemaking for amended standards published in 
April of 2010 cost $5 million for DOE to complete. Estimates indicate 
that outside parties may have to spend up to $95 million on conversion 
costs to comply with the water heater standard. In comparison, the 
standard was estimated to save 2.58 quads of energy and save consumers 
$1.39 billion, using a discount rate of 7 percent, and $8.67 billion, 
using a discount rate of 3 percent, over a 30 year period.

    Senator Murkowski. I think it would be, particularly at a 
time when we're all focused on what's going on with cost, but 
not only the cost within the Department of Energy but the cost 
to outside parties. If we could have some kind of an assessment 
of that I think it would be helpful.
    Let me ask you: as it relates to the BULB Act, there is a 
great deal of discussion about what the 2007 Act really meant 
or required. People are wondering whether or not the standards 
contained in EISA 2007 really are a ban on their ability to 
purchase or to use the incandescent light bulbs within their 
own home.
    Ms. Hogan. Yes. EISA 2007 sets performance levels for bulbs 
that requires these bulbs to be 30 percent more efficient than 
some of the bulbs we're using today. I think it's very 
important to say that what that means when you set a 
performance level is that any technology can come forward, any 
type of bulb, and meet those levels.
    So as we look at what is on the marketplace today we see 
that there are variety of bulbs that do indeed meet these 
levels. There's new, improved incandescents. There are the 
CFLs. Then something that's very exciting at the Department of 
Energy is the growing number of LEDs with rapidly reducing 
prices for those bulbs as well.
    So I think we do see that some people believe that this 
bill is a ban on the traditional incandescent. It's not a ban. 
What it is doing is setting performance levels to help 
consumers save 30 percent or more on their home lighting, 
offering substantial savings on the order of $50 or so a 
household, and really offering them better bulbs that can save 
them money.
    Senator Murkowski. Of course as you know the concern out 
there is that you're going to have Department of Energy come 
knocking on your door and say I want to inspect your lights 
because I want to see if you're in compliance with EISA 2007. 
I'd like to think that we would never get to that point. But I 
think it is important to understand what it is that EISA 2007 
requires or doesn't require.
    One more question then on the overlapping rulemaking 
situation that we're in right now. If somehow this bill is 
signed into law before the rulemaking is finished what happens 
with the overlapping rulemaking? Where are we?
    Ms. Hogan. Clearly if a bill is signed into law that 
becomes the law of the Nation.
    Senator Murkowski. So do we just abandon what you have been 
putting in place with the rulemaking?
    Ms. Hogan. I think what we have as we've all worked 
together on these rulemakings is we all benefit from the work 
that has been done throughout that process. There's a multiyear 
process in the development of these rulemakings in which we've 
developed some of the information that will continue to be used 
on our part.
    We certainly have been engaging with stakeholders around 
this. Some of this information has been used as part of an 
informational foundation in the consensus rulemaking process. 
So I guess I don't want to use the word abandon because I think 
what you see is all of the parties working together to get the 
best information on the table. What you see is some of that put 
forth in the consensus recommendation that you have before you 
and clearly if the bill gets signed into law that will become 
the law of the Nation going forward.
    Senator Murkowski. Thank you, Mr. Chairman.
    The Chairman. Senator Manchin.
    Senator Manchin. Thank you, Mr. Chairman.
    Thank you very much for your presentation. I noticed in 
times of recession that we're in right now and in my State of 
West Virginia and people are struggling like they are all over 
the country. The difference of the cost, the upfront costs, 
let's say 50 cents versus a $1.50.
    Is there anything that you are doing to make sure that the 
people really understand what the savings are? Putting an 
effort forward on that? Any type of programs that might help 
them be able to transition and get the long term savings?
    Because sometimes what you have in your pocket and saying 
that down the road, the life of that bulb, you're going to 
really save money. That's not the reality. They need it on the 
front end or some help or assistance before we just mandate 
everybody. It's either that or no lights at all. I'm anxious to 
hear what you have to say about that if you all.
    Ms. Hogan. Certainly there are programs around the country 
that are helping advance efficient lighting. Utilities in many 
States and other programs have been offering different types of 
programs to get efficient lighting in the hands of consumers. 
But I do think it's important to think about the savings that 
these bulbs offer.
    I think the numbers that you were just quoting really apply 
to the better incandescent that is now on the marketplace. It 
is a little bit over a dollar additional upfront cost. But the 
savings that that consumer will get also add up to more than a 
dollar even in the first year.
    Senator Manchin. I think what I would be saying is there a 
transition period? Is there any help on the front end as people 
we're trying get them to understand that? But it's still money 
out of their pocket. Will there be any type of transition at 
first like for 6 months or 90 days or any of that? Do you know 
anything the government is planning on doing if the bill takes 
effect and people are mandated to buy the new bulbs?
    Ms. Hogan. We certainly don't have any authorization to go 
out and provide financial assistance to homeowners. But we do 
do a lot of work with the utilities and the other organizations 
that are providing various programs to help reduce the cost of 
the more efficient bulbs.
    Senator Manchin. The other thing is that I know everything 
we're talking about is downstream improvements, more 
efficiently whether it be appliances or bulbs and this thing 
and these types of things. Have we talked about or have you all 
put as much effort toward the upstream? Give you an example on 
the power plants. Coal fired power plants 34 percent 
efficiencies.
    What are you doing on that end because that's where the 
real big money is? The savings would be for our energy and the 
cost to all of our citizens who depend on these types of energy 
supplies. But basically we have outdated or outmoded, if you 
will, technology that's not supplying the most efficient.
    Ms. Hogan. I think when you look at the energy efficiency 
space and all that energy efficiency offers this country in 
terms of what is cost effective, there's tremendous opportunity 
in our homes, in our businesses and in our factories. Then 
you're right there are also opportunities in transmission and 
distribution and in our power plants.
    The Department of Energy really is working comprehensively 
across all of those areas of opportunity to first demonstrate 
currently available technologies but then also to advance 
cutting-edge technologies, so we have even better solutions 
tomorrow.
    Senator Manchin. I don't see the effort being put forth on 
the real high end which would be the utilities, if you will and 
in my State the coal fired plants that need to be retrofitted. 
They need to be updated and upgraded. The efficiencies that we 
have there and loss of energy that we have that could be 
tremendously important for the security of our Nation.
    I know that working on the downstream end of it and light 
bulbs and refrigerators are great. But if the plant that's 
providing the electricity is running at only 34 percent 
efficient, that doesn't make sense. It seems like you put more 
of your energy toward that.
    Ms. Hogan. I think we have a comprehensive program. Then in 
addition to that I think another area where we are highly 
focused is with combined heat and power where you can raise the 
conversion efficiencies because of doing the power and the heat 
together up to 60-70 percent. So we are trying to find all of 
those opportunities.
    Senator Manchin. If you all could I would just finish on 
this. If I can meet with someone in the Department of Energy to 
see basically what you are doing on that end of it which is the 
downstream end. I mean, the upstream end, not just the 
downstream end. So if someone could help me on the upstream 
what they are putting forth and what efforts are being put 
forth. OK?
    Ms. Hogan. Terrific.
    Senator Manchin. Thank you.
    The Chairman. Let me see here.
    Senator Burr.
    Senator Burr. Dr. Hogan, welcome. Thank you for your 
testimony.
    Let me ask you is there an energy standard that California 
doesn't separate themselves from the rest of the country today?
    [Laughter.]
    Senator Burr. I believe I know the answer. But should we 
just accept everything California does? Is that the Department 
of Energy's position?
    Ms. Hogan. That is not the Department of Energy's position 
that we should just----
    Senator Burr. But that brings relevance to this committee I 
think. I mean, let me ask you. Is there a cost benefit analysis 
that's required in rulemaking?
    Ms. Hogan. There absolutely is a cost benefit analysis that 
is required in every appliance standards rulemaking.
    Senator Burr. Tell me what the environmental cost is of 
improper disposal of mercury bulbs. I'm sure that's something 
that went into the equation.
    Ms. Hogan. First of all this standard that we are talking 
about here is a standard that was put forth by a bipartisan 
bill.
    Senator Burr. I realize that. But what is the cost of 
improper disposal of mercury bulbs?
    Ms. Hogan. First what we are doing is educating people on 
the proper disposal of mercury bulbs. I think it's also 
important to look at the fact that this appliance standard, 
this light bulb standard, doesn't mandate CFLs and the use of 
the bulbs that have that tiny amount of mercury in them.
    Senator Burr. I realize that. But--and I realize the 
statement that you made that bulbs that are traditional bulbs 
are not going to go away. Now manufacturers are going to make 
decisions based upon where consumers are herded to go.
    Eventually that will mean less of a product if in fact 
there's a tax credit that affects it or there's policies that 
suggest that it's more advantageous to produce or consumers 
like me find that there's an energy savings. I've converted 
every bulb in my house. As a Member of Congress I have 
absolutely no idea how to dispose of the mercury bulb.
    I wouldn't know where to take it. I'm going to throw it in 
the trash. Environmentally that's not good, is it?
    Ms. Hogan. Let's also talk about mercury more generally. 
Because I think we're focusing in on CFLs in particular. I 
think as we look across the environment that what we currently 
see is that more mercury is put into our environment by the 
electricity that we generate than the mercury that is in the 
CFL bulbs.
    Where we are is we do not live in a perfect world. We are 
trying to figure out how to help save energy through these 
better bulbs. As we provide the information to consumers that 
they need about proper disposal I think we will be able to be 
successful on that front for the consumers that are interested 
in using the CFL bulb.
    I think the other thing that's great to see across the 
country right now is many of the national retailers stepping up 
and doing education on their own, and being disposal locations 
for these mercury bulbs. So many of the major retailers are 
saying bring them back here. Just put them in the box as you 
come back to buy your next bulb.
    Senator Burr. You talked about in your answers I think to 
Senator Murkowski about the timeline for rulemaking. It was 
lengthy because of consultation with interested parties. It 
came to my attention that over the last year new efficiency 
standards and certification requirements for commercial food 
equipment and specifically commercial refrigeration and 
freezers in which commercial food equipment manufacturers--the 
manufacturing community had not been fully involved or 
consulted in the rulemaking process, the standards and the 
regulatory process to the degree that residential product 
manufacturers had been.
    Am I accurate?
    Ms. Hogan. I'm not aware of that issue. I'm happy to go 
back and look at that. We have----
    Senator Burr. Do you separate commercial from consumer 
manufacturers----
    Ms. Hogan. No we have a standard process and set of 
procedures that we go through.
    Senator Burr. A rule upgrading standards was published last 
month with 120 days given for the industry transition. You 
know, it sort of gets at what Governor Manchin was talking 
about. There's got to be some consideration, not just 
consultation and I ask you to look at that very closely, some 
consideration as to how quickly an industry can make a 
transition.
    We can set a standard that on paper looks great and in 
reality we could get there but the cost to consumers in this 
country could be outrageous. I, for one, believe that it's the 
responsibility of those of us who serve here to consider the 
consumer impact of all the rulemaking that you make. To hold 
your feet to the fire to make sure that a full cost benefit 
analysis has been done and that from a long term policy this 
committee set the national standard and not California.
    Thank you.
    Ms. Hogan. Thank you. Certainly we will go back and look at 
that because we do try to take all of that into account in our 
rulemaking processes. We're very aware of the cost to 
manufacturers and their need to transition and retool their 
facilities.
    The Chairman. I would just mention that we are, this 
committee, is setting a standard in one sense of that phrase by 
having all these LED lights. We're the first committee in the 
Congress to have totally redone our committee room to use LED 
lighting. This is all American made LED lighting which should 
be good news to you, Senator----
    Senator Burr. Probably made in North Carolina.
    The Chairman. Very possibly. Very possibly.
    [Laughter.]
    The Chairman. Senator Coons.
    Senator Coons. Thank you, Mr. Chairman for the illuminating 
comments. Thank you, Ms. Hogan for the opportunity to be with 
you today. I well remember service on the Energy Efficiency 
work group of our Governor's Energy task force and how eye 
opening it was to me to first realize just what enormous 
benefits energy efficiency can achieve for industry and for all 
of us.
    I'll start simply by commenting that I'm hopeful we will 
move quickly through consideration of INCAA. The idea that over 
$40 billion in savings to consumers can be realized over the 
next 20 years with a consensus standard that was negotiated by 
industry, manufacturers, advocates, consumer representatives, 
is very encouraging to me. I do take seriously the concerns 
raised by Senator Burr and others and these conversations need 
to be as broad reaching and collaborative as possible. But I do 
think it's a great thing. For us to be doing something 
constructive in a bipartisan way in this Congress is 
encouraging to me as well.
    But let me if I might move to the BULB Act and some of the 
BULB related questions. Am I correct in understanding that all 
3 of the major current incandescent manufacturers, GE, Phillips 
and Sylvania are already manufacturing high efficiency 
incandescent bulbs, the halogen bulbs? They're already 
available in the marketplace. The implementation of the 
standards that were passed in 2007 will not mandate CFLs will 
not end availability of incandescent bulbs in any way.
    Ms. Hogan. That is my understanding.
    Senator Coons. If you could talk about some of the 
positives. My impression is that quite a few of these companies 
have made new investments in the United States. They have 
invested in new manufacturing facilities. There's been 
innovation in terms of new developments of exactly the types 
I'm pointing to in part in response to these higher efficiency 
standards for bulbs.
    Ms. Hogan. Yes. I think standards really do a number of 
things for this country in the area of the products that we use 
every day. They do help people save money. They give 
manufacturers certainty in terms of what they should be 
shooting for. They create these national markets as we 
discussed which gives them, again, greater clarity on what the 
market looks like. It does help drive innovation.
    I think there's a wonderful example in refrigerators in 
this country. They now use 75 percent less energy than they did 
as of 30 years ago. They are bigger and offer many more 
services for the American consumer.
    It's just a terrific story. I think when you line up that 
innovation with standards programs you do see that standards 
help to drive a lot of that innovation. When you look at 
lighting and the types of bulbs that are now on the market, the 
better bulbs, the halogen incandescents, the CFLs and then 
truly the upcoming LEDs, you see that again, there's sort of a 
wealth of innovation happening on the light bulb front.
    We also are seeing new jobs and new plants being stood up 
or expanded here in the United States behind these bulbs. 
There's a new manufacturing facility in Ohio for CFLs and newer 
expanded facilities in North Carolina and Florida for LEDs. So 
we think this is just a good story for this country.
    Senator Coons. There's also some close to me in 
Pennsylvania as well as in Ohio. So I mean if I hear you right 
the impact of the existing standards is--it is propelling 
investment, innovation, new manufacturing capacity, reduces 
cost for consumers. But there are some education challenges.
    As Senator Burr illustrated some consumers who have already 
moved to CFLs need to better understand how to dispose of them, 
myself included. There are some legitimate concerns about 
mercury from CFLs. The light quality hasn't met expectations.
    But the LEDs in this very room and the incandescent bulb 
that I suspect may be demonstrated by the next panel exceed the 
current lighting standards and light quality of CFLs. So my 
hope is that we will reject the BULB Act and continue to move 
forward in an environment where these higher efficiency 
standards are actually leading to consumer savings, investment 
and new jobs.
    Thank you for your testimony today, Ms. Hogan.
    The Chairman. Senator Paul.
    Senator Paul. Thank you, Mr. Chairman. Thank you, Ms. Hogan 
for coming over today and for your testimony.
    I was wondering if you're pro choice?
    Ms. Hogan. I'm pro choice on bulbs.
    Senator Paul. Actually that's the point. The point is is 
that most members of your Administration probably would be 
frank and characterize themselves and upfront characterize 
themselves as being pro choice for abortion. But you're really 
anti choice on every other consumer item that you've listed 
here including light bulbs, refrigerators, toilets. You name 
it.
    You can't go around your house without being told what to 
buy. You restrict my purchases. You don't care about my 
choices. You don't care about the consumer frankly.
    You raised the cost of all the items with all your rules, 
all your notions that you know what's best for me. Frankly, my 
toilets don't work in my house. I blame you and people like you 
who want to tell me what I can install in my house, what I can 
do.
    You restrict my choices. There is hypocrisy that goes on on 
people who claim to believe in some choices but don't want to 
let the consumer decide what they can buy and install in their 
house. I find it insulting.
    I find it insulting that a lot of these products that 
you're going to make us buy. You won't let us buy what we want 
to buy. You take away our choices. These things you want us to 
buy are often made in foreign countries. You ship jobs 
overseas. The same thing that your Administration claims to be 
in favor of, you're shipping our jobs overseas, Miss. We can't 
make these items here.
    I find it really an affront to the sensibility of the idea 
and notion of the free marketplace, of capitalism, of freedom 
of choice. Now it's not that I'm against conservation. I'm all 
for energy conservation.
    But I wish you would come here to extol me, to cajole, to 
encourage, to try to convince me that it would be a good idea 
to conserve energy. But you come instead with fines, threats of 
jail. You put people out of business who want to make products 
that you don't like.
    This is what your energy efficiency standards are. Put it--
really call it what it is. Call it what it is. You prevent 
people from making things that consumers want.
    I find it really appalling and hypocritical. I think there 
should be some self examination from the Administration on the 
idea that you favor a women's right to an abortion. But you 
don't favor a woman or a man's right to choice what kind of 
light bulb, what kind of dishwasher, what kind of washing 
machine.
    I really find it troubling this busy body nature that you 
want to come into my house, my bathroom, my bedroom, my 
kitchen, my laundry room. I just really find it insulting. I 
find that all of the arguments for energy efficiency, you're 
exactly right. We should conserve energy. But why not do it in 
a voluntary way. Why not do it where you threaten to fine me or 
put me in jail if I don't accept your opinion.
    In America we believe in trying to convince our neighbors, 
but not trying to convince them to the force of law. I find 
this antithetical to the American way. I'd appreciate your 
response.
    Ms. Hogan. OK. So I have, I guess, a couple of responses to 
that.
    One, I think the appliance standards program is an example 
of really a great partnership between the Congress and the 
Administration over many, many, many years. So much of what we 
are implementing really had its genesis in bipartisan bills 
that have been put forth at a number of different points over 
the history of this country for the last 30 to 40 years.
    Senator Paul. But you restrict our choices, correct?
    Ms. Hogan. I really do not believe that the appliance 
standards end up restricting personal choice. I think the 
appliance----
    Senator Paul. I can't buy the old light bulbs. That 
restricts my choice on buying.
    Ms. Hogan. My view is what you want is lighting, right? 
What----
    Senator Paul. I can't buy a toilet that works.
    Ms. Hogan. I can help you find a toilet that works.
    [Laughter.]
    Senator Paul. Are you going to pay for it? Everything costs 
more to go back and retrofit the toilets that don't work that 
no bureaucrat understood or flushed before they made us use 
them costs money. It will cost thousands of dollars to go back 
and add some kind of jet stream to the toilets in my--we don't 
even save money. We flush them ten times. They don't work.
    But the thing is you busy bodies always want to do 
something to tell us how we can live our lives better. Keep it 
to yourselves. Try to convince us through persuasion, but don't 
threaten to put us in jail or put us out of business if we 
don't accept your way of thinking.
    The Chairman. Were you asking for another response or 
should I go ahead with my question?
    [Laughter.]
    Senator Paul. I was kind of just enjoying. I've been 
waiting for 20 years to talk about how bad these toilets are 
and this is a good excuse today. Thanks.
    The Chairman. I'm sorry about your toilet.
    [Laughter.]
    The Chairman. Let me just clarify for myself.
    One issue here is the 10th amendment. Under the 10th 
amendment States have the ability to set standards such as the 
standards we're talking about. Some of them are doing it. Have 
done it in the past.
    The question is is the Federal Government going to step in 
and set national standards or are we going to have a patchwork 
of standards which manufacturers have to deal with? Try to sell 
a different light bulb into California then they sell into 
Nevada then they sell into Virginia? Am I right that that's one 
of the impetuses for what--and I would also clarify that this 
is not something that you, the Administration is forcing on us.
    This is something we, the Congress, over the last several 
decades and previous Administrations have endorsed and have 
enacted into law. The Department of Energy is implementing the 
law. That's my understanding of the situation.
    Do you have any comment on either of those points?
    Ms. Hogan. No. Those are 2 very good points. Let's go back 
to why do we have appliance standards in this country?
    It is exactly as Senator Bingaman outlines. You know, the 
first set of standards and the first standards law that were 
implemented in this country were the result of people, 
stakeholders, the manufacturers and others coming together 
saying that they see greater value in national markets as 
opposed to having a patchwork approach State by State by State. 
Then that's what created the framework for the appliance 
standards, the processes were outlined about doing cost benefit 
analyses so that you would establish these minimums that would 
deliver significant savings to American consumers and 
businesses. It was agreed to be a good public policy to be able 
to raise the minimum standards for some of these products where 
you could deliver substantial savings to the American public 
both in their homes and in their businesses.
    I hate to bring the subject up again, but the toilets, in 
particular, were put forth in legislation in 1992. Again, I 
believe that was promoted by the plumbers and others or the 
manufacturers of the plumbing equipment. They're the ones that 
brought that forward. That's what we've been implementing to 
date.
    I think what you do see, again, with the putting forth of 
these standards is you do see technological innovation. Many of 
the products that are out there on the market today really do 
deliver on the features and the performance that people are 
looking for in their homes. Your point about can we do this 
voluntarily?
    We are doing this voluntarily as well. There are a number 
of voluntary programs to help people find the extra efficient 
products that are out there or the extra water saving products 
that are out there and roll in performance requirements to 
those as well so consumers can really find high performing 
products that save them money.
    The Chairman. I jumped ahead and asked questions before all 
others had had a chance to. Senator Lee was here before and 
then Senator Shaheen has come in. But let me call on Senator 
Lee for his questions and then Senator Shaheen.
    Senator Lee. I'm going to pass.
    The Chairman. Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman. I'm sorry that my 
colleague, Senator Paul is leaving because I actually----
    Unknown speaker 1: Come on back, Rand. Come on back.
    [Laughter.]
    Senator Shaheen. Come on in. I certainly appreciate your 
frustration, Senator Paul. I share it in some ways.
    But I think it behooves us all not to engage in name 
calling of those officials who are trying to carry out the 
work, that as the chairman has so well pointed out, Congress 
has asked them to do. Now as Congress we're going to change 
those policies. You know, we have the ability to do that.
    But I think we have officials who are trying to do the best 
job they can. It's not helpful for any of us to engage in name 
calling. I would just point out that our dependence, at least 
in the Northeast on foreign oil and fossil fuels for our 
electricity has severely limited our choices. I'm happy to have 
the option to have some other choices that reduce our 
electricity use in a way that gives me the ability to make 
other decisions.
    I mean, the fact is our light bulbs, our current, old 
incandescent light bulbs are the most inefficient, one of the 
most inefficient appliances we have in our homes. They waste 
about 80 percent of our energy. So I think it's helpful to have 
an alternative that's better.
    Ms. Hogan, I would like to go back to energy efficiency, if 
I can because I know that the President has talked about a 
clean energy standard. That energy standard has not included 
energy efficiency as part of that energy standard. Given that 
energy efficiency is part of your bailiwick. It's the cheapest, 
fastest way to use energy.
    Can you speak to why energy efficiency wasn't included or 
hasn't been talked about as part of clean energy standard and 
where the appropriate role of energy efficiency ought to be in 
that kind of a standard?
    Ms. Hogan. Yes. I can certainly get back to you on that 
topic.
    [The information referred to follows:]

    The Administration believes that the clean energy standard should 
be paired with robust energy efficiency measures and has stated so 
explicitly in its proposed principles. The question is not really 
whether to consider efficiency, but how to best design a policy that 
achieves this goal. To date, discussions have focused on two discrete 
areas where relatively simple policy additions could have considerable 
impact, namely complementary appliance standards and crediting for end 
use generation that includes an energy efficiency component, like 
combined heat and power. This is still very much an active discussion, 
and we would welcome the opportunity to discuss options with members of 
this Committee and other interested Congressional offices.

    Ms. Hogan. Certainly the Administration is supportive of 
renewable energy in the clean energy standard and is supportive 
of energy efficiency. I think it's a question as to does the 
efficiency belong in the clean energy standard or does it 
belong as a set of complimentary measures that we believe will 
deliver the savings that are there to be achieved?
    Senator Shaheen. So if we were going to go forward and try 
and include energy efficiency as part of a clean energy 
standard how would you suggest we do that? Do we need to 
persuade the President, the Administration, you and the 
Department of Energy that that's something we should do?
    Ms. Hogan. Clearly we are having discussions about the pros 
and cons of these different approaches and the pros and cons of 
setting targets at different levels associated with the clean 
energy standard.
    Senator Shaheen. Can you talk about whether you see a role 
for combined heat and power and waste heat recovery systems in 
a clean energy standard?
    Ms. Hogan. We are very supportive of combined heat and 
power and waste heat recovery. As you know some of these issues 
come down to how you can measure and credit the energy savings 
from increased efficiency. We want to have a robust clean 
energy standard. We want to be able to include those types of 
things as we work on those technical issues.
    Senator Shaheen. In addition to appliance standards what 
are other areas where we should be focusing on in terms of 
energy efficiency gains to achieve the greatest savings?
    Ms. Hogan. We have a pretty robust slate right now of 
appliance standards that we are working on to actually 
implement the standards we've been asked to implement by 
Congress. So we are working aggressively to meet a set of 
deadlines this June as well as deadlines that we have this 
coming December and through the calendar year 2012 and 2013.
    Senator Shaheen. Maybe I wasn't clear in the way I asked my 
question. Are there particular areas as you're looking at 
energy efficiency whether it's transportation or utilities 
where you think there are the most savings to be gained. 
Obviously appliance standards is one of those.
    Ms. Hogan. Oh.
    Senator Shaheen. But where are some of the other areas?
    Ms. Hogan. Oh, I'm sorry. I thought you were talking 
specifically about the appliance standards program.
    No, as we look at the energy efficiency space, clearly the 
appliance standards program offers significant savings for this 
country. The other places where there are very good 
opportunities to make additional progress include new 
construction, building codes. So we are doing a lot of work on 
building codes. This includes the retrofit of our existing 
homes and the retrofit of our commercial buildings. We are 
rolling out and working on aggressive programs in each of those 
areas.
    I think you may be familiar with our Better Buildings 
program on the residential side where we're working to 
demonstrate new deployment models that we think can retrofit 
homes in a deep way offering 20 percent savings or more per 
household. We're also demonstrating business models that will 
be replicable across the country and that we are investing in 
through some of our Recovery Act dollars. We're very excited 
about the progress being made there.
    We also believe there is tremendous opportunity in the 
commercial building space. You probably saw in our 2012 budget 
that was sent to the Hill we would like to take many of the 
lessons learned from our Better Buildings residential program 
and be able to apply them to the commercial buildings area. 
There's a number of programs we outlined there that we think 
put the right seeds in place to achieve something like a 20 
percent savings in commercial building energy in that sector.
    I think it's important to remember that appliance standards 
can impact the products we go to the store to buy. But to get 
at the insulation, the building envelope, some of those things 
that you need to go through contractors and other networks to 
get at, we do need other approaches. That is what we're trying 
to get at with our Better Buildings Initiative.
    Senator Shaheen. Thank you.
    The Chairman. Senator Murkowski, did you have additional 
questions of Ms. Hogan?
    Thank you very much for your testimony. We will allow you 
to leave and we'll call the second panel forward.
    Our second panel is--let me go through the names as they're 
coming forward and taking their seats.
    Mr. Steve Nadel, who is the Executive Director of the 
American Council for an Energy-Efficient Economy.
    Mr. Joseph McGuire, President of the Association of Home 
Appliance Manufacturers.
    Mr. Stephen Yurek, who is the President and Chief Executive 
Officer with the Air-Conditioning, Heating, and Refrigeration 
Institute.
    Mr. Kyle Pitsor, who is Vice President of Government 
Relations with the National Electrical Manufacturers 
Association.
    Dr. Mark Cooper, who is Director of Research with Consumer 
Federation of America.
    Mr. Howard Brandston, who is a lighting consultant from 
Hollowville, New York.
    Thank you all very much for being here.
    If each of you could take about 5 minutes and make the main 
points that you would like us to try to understand. Then of 
course, we will include in the record your entire written 
statement, but if you could give us about a 5-minute summary of 
the main points that would be great. Then after you've all 
completed your testimony we will have some questions.
    Mr. Nadel, go right ahead.

STATEMENT OF STEVE NADEL, EXECUTIVE DIRECTOR, AMERICAN COUNCIL 
                FOR AN ENERGY-EFFICIENT ECONOMY

    Mr. Nadel. Thank you, Senator Bingaman, Senator Murkowski. 
I appreciate the opportunity to testify here today.
    Our organization has worked on appliance standards for a 
long time since the 1980s. The Federal standards program has a 
long history of bipartisan support. The first Federal standards 
were established in the National Appliance Energy Conservation 
Act of 1987 which was signed by President Reagan. Additional 
standards were assigned by President Reagan in 1988, President 
George H. W. Bush in 1992 and President George W. Bush in 2005 
and 2007.
    Minimum efficiency standards have been adopted in order to 
address market failures and barriers, replace a patchwork of 
State standards, save consumers money, reduce energy use and 
peak demand. We've talked before about the patchwork of State 
standards and how Federal standards can replace them and have 
uniform national standards. In addition, in my written 
testimony I include a lot of discussion about some of the 
market barriers that make it difficult for consumers often to 
purchase those efficient products.
    In particular these standards such as in the case of the 
lamp standards have increased availability and increased 
consumer choice of efficient products. There are new products 
now available that wouldn't be available because of the 
standard. So they can increase consumer choice. They don't just 
take choices away.
    My organization estimates that without these standards U.S. 
energy use last year in 2010 would have been about 3 percent 
higher than it was and U.S. electricity use would have been 
about 7 percent higher. These really made a significant impact 
on our energy use. The standards that have already been enacted 
will save consumers and businesses more than $300 billion by 
2030. That's just the existing standards.
    We also did an analysis in January looking at the impacts 
of investments in efficient products and the reinvestment of 
the energy bill savings that people achieve. We estimate that 
last year in 2010 these standards created a net 340,000 jobs in 
the U.S. Clearly we need more jobs but they made a positive 
contribution.
    Turning now to the 2 bills before us.
    S. 398, the INCAA bill, we are strongly in support of this 
bill. This contains a variety of consensus proposals negotiated 
between product manufacturers, efficiency groups such as ours, 
environmental and consumers groups and States. They do have 
consensus. We were able to work on many creative ways to save a 
lot of energy but have wide consumer choice and minimal impacts 
on manufacturers.
    As you noted all of these provisions were almost passed 
last Congress. This committee has reported them out. We hope 
that you can do so again.
    We estimate that the S. 398, the INCAA bill will save the 
Nation nearly 150 trillion BTUs of energy by 2030 which is 
enough to serve the energy needs of 4.6 million average 
American households.
    We estimate that this bill will result in net consumer and 
business savings of $43 billion by 2030.
    Will reduce peak electric demand by more than 20,000 
megawatts which is equivalent to 68 typical 300 megawatt power 
plants.
    Turning now to the BULB bill.
    We urge that this bill be rejected as I think this bill has 
been improperly marketed or based on a misunderstanding that 
will ban incandescent lights. In fact there are several types 
of incandescent lights that will meet the standard.
    For example, here I have a 70 watt bulb. It's an 
incandescent bulb. It will meet the standard.
    Over there you see a poster. All 3 major manufacturers are 
now selling these bulbs in California. I mention California 
because their standard takes effect 1 year earlier so they're 
also there. My understanding is that the manufacturers are 
introducing them this spring in terms of nationwide.
    I would also point out that the BULB bill doesn't just do 
away with the incandescent lamp standard but also would repeal 
standards on reflector lamps, metal halide lamps. It would get 
rid of a Federal program to improve efficiency in Federal 
facilities. It would also do away with labeling on televisions 
and other electronic products all of which were part of the 
same provision of EISA that this law wants to repeal.
    In addition I would note that if we were to repeal those 
provisions based on our estimates of EISA. We'd be using an 
extra 72 billion kilowatt hours of electricity annually which 
is enough to serve 6.6 million American households. We'd need 
an extra 10,000 megawatts of power plants to meet that extra 
power.
    I think as Assistant Secretary Hogan mentioned the savings 
from these standards that effectively BULB would repeal amount 
to about $50 per American household or a total of about $7 
billion annually. These are annual savings. So very significant 
benefits would be lost for not much gain because there are a 
wide variety of products that would meet that.
    With that I will conclude my testimony.
    [The prepared statement of Mr. Nadel follows:]
Prepared Statement of Steve Nadel, Executive Director, American Council 
                    for an Energy-Efficient Economy
                                summary
    The federal standards program has a long history of bipartisan 
support. The original law establishing an appliance standards program 
was enacted under President Ford in response to the 1970's energy 
crisis. The first federal standards were established in the National 
Appliance Energy Conservation Act of 1987, signed by President Reagan. 
Additional standards were added in bills signed by Presidents Reagan, 
George H.W. Bush, and George W. Bush (two laws).
    Minimum efficiency standards have been adopted in order to address 
market failures and barriers, replace a patchwork of state standards, 
save consumers money, and reduce energy use and peak electrical demand. 
Standards remove inefficient products from the market but still leave 
consumers with a full range of products and features to choose among. 
Standards commonly increase consumer choice by increasing availability 
of efficient, moderate-cost products.
    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 have been about 7% higher and U.S. total energy use about 3% 
higher. Net savings to consumers from standards already adopted will 
exceed $300 billion by 2030.\1\ As a result of these savings, we 
estimate that in 2010 the appliance standards program generated 340,000 
net jobs in the U.S.\2\ The majority of these standards have been set 
by Congress, based on consensus agreements between manufacturers and 
energy efficiency advocates.
---------------------------------------------------------------------------
    \1\ Max Neubauer, Andrew Delaski, Marianne Dimascio, and Steve 
Nadel. 2009. Ka-BOOM! The Power of Appliance Standards: Opportunities 
for New Federal Appliance and Equipment Standards. Washington, DC: 
American Council for an Energy-Efficient Economy.
    \2\ Gold, R., S. Nadel and S. Laitner. 2011. Appliance and 
Equipment Efficiency Standards: A Money Maker and Job Creator. 
Washington, DC: American Council for an Energy-Efficient Economy.
---------------------------------------------------------------------------
    S. 398, the Implementation of Consensus Appliance Standards 
Agreement Act (INCAAA), contains a variety of consensus proposals 
negotiated between product manufacturers, ACEEE, and other efficiency 
supporters, including consumer and environmental groups. These 
negotiations have resulted in some creative solutions that provide 
substantial benefits to consumers while keeping impacts on 
manufacturers to modest levels. The provisions in INCAAA update some 
existing standards and add standards for a few new products based on 
standards already enacted by several states. Most of these provisions 
were reported out by this Committee in the 111th Congress. We strongly 
support this bill.
    We estimate that INCAAA will reduce save the nation nearly 850 
trillion Btus of energy each year by 2030--enough energy to meet the 
needs of 4.6 million typical American households. INCAA will result in 
net economic savings (benefits minus costs) to consumers of more than 
$43 billion annually by 2030 and will reduce peak electric demand in 
2030 by about 20,500 MW, equivalent to the output of 68 typical 300 MW 
power plants. In addition, these standards will save nearly 5 trillion 
gallons of water, roughly the amount needed to meet the current needs 
of every customer in Los Angeles for 25 years.
    S. 395, the Better Use of Light Bulbs Act (BULB), would repeal 
Subtitle III B of the Energy Independence and Security Act of 2007 
(EISA). ACEEE urges that this bill be rejected.
    Many proponents of BULB claim that under EISA, incandescent lamps 
are banned, and therefore consumers would be forced to purchase compact 
fluorescent lamps (CFLs). The BULB bill aims to end this reputed ban on 
incandescent lamps. These claims are based on a faulty understanding of 
the lighting market--in fact, the lamp performance standards in the 
2007 law are already being met by four types of bulbs now on the 
market, including two types of incandescent bulbs.
    Also, the BULB bill would repeal a variety of other sections in 
EISA, including provisions on reflector lamps (closing a loophole in 
the 1992 law that established reflector lamp standards), metal halide 
lamps (primarily used in factories, large commercial spaces, and 
outdoors), consumer information labels for televisions and other 
electronic products, and a program to improve lighting efficiency in 
federal facilities. We have not seen or heard any criticisms of these 
other provisions, but still the BULB bill would repeal them.
    In 2007 when EISA was passed, ACEEE estimated that the provisions 
in Subtitle III B would by 2020 reduce annual electricity use by 72 
billion kWh (enough to serve the annual electricity needs of 6.6 
million average American households); reduce peak electric demand by 
more than 10,000 MW (equivalent to the output of more than 30 power 
plants (300 MW each); and reduce consumer energy bills by more than $7 
billion (about $50 per American household annually).\3\ These benefits 
would be lost if the BULB bill is enacted.
---------------------------------------------------------------------------
    \3\ ACEEE. 2007. ``Energy Bill Savings Estimates as Passed by the 
Senate.'' http://www.aceee.org/files/pdf/fact-sheet/
EnergyBillSavings12-14.pdf. Washington, DC: American Council for an 
Energy-Efficient Economy.
---------------------------------------------------------------------------
    According to a recent survey by USA Today of 1,016 adults on the 
lamp standards, despite all the recent publicity about an incandescent 
lamp ``ban,'' ``61% of Americans call the 2007 legislation a `good' law 
while 31% say it's `bad'.''\4\
---------------------------------------------------------------------------
    \4\ Koch, Wendy. Feb. 17, 2011. ``Poll: Americans OK with Newer 
Light Bulbs.'' USA Today. http://content.usatoday.com/communities/
greenhouse/post/2011/02/poll-americans-ok-newer-light-bulbs/1
---------------------------------------------------------------------------
    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 on a bipartisan basis. This 
Committee can add to this success by supporting S. 398 (INCAAA) and 
opposing S. 395 (BULB).
                              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 celebrated our 30th anniversary last 
year. Personally, I have worked actively on appliance and equipment 
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 Congress.
    The federal standards program has a long history of bipartisan 
support. The original law establishing an appliance standards program 
was enacted under President Ford in response to the 1970's energy 
crisis. The first federal standards were established in the National 
Appliance Energy Conservation Act of 1987, signed by President Reagan. 
Additional standards were added in bills signed by Presidents Reagan, 
George H.W. Bush, and George W. Bush (two laws). For example, the 
National Energy Policy developed by President Bush and Vice President 
Cheney in 2001 notes that these ``standards will stimulate energy 
savings that benefit the consumer, and reduce fossil fuel consumption, 
thus reducing air emissions.''
    Minimum efficiency standards have been adopted in order to address 
market failures and barriers, replace a patchwork of state standards, 
save consumers money, and reduce energy use and peak electrical demand.
    Among the market failures and barriers addressed by standards are:

   Rush purchases when an existing appliance breaks down, 
        providing no time to comparison shop;
   Limited stocking and availability of efficient products for 
        some product types;
   Purchases by builders and landlords who do not pay appliance 
        operating costs and hence have no financial incentive to value 
        efficiency; and
   Frequent bundling of efficient features with other ``bells 
        and whistles,'' which raise the price of efficient products and 
        dissuade many purchasers.

    Standards remove inefficient products from the market but still 
leave consumers with a full range of products and features to choose 
among. Commonly, standards can even increase consumer choice by making 
efficient, moderate-cost products available. For example, later in my 
testimony I will discuss how the general service lamp standard has 
resulted in the establishment of two new classes of improved-efficiency 
incandescent light bulbs.
    The foundation of prior appliance and equipment standards laws was 
the adoption of consensus standards negotiated between product 
manufacturers and energy efficiency supporters. ACEEE has been involved 
in all of these negotiations. Most federal standards build on previous 
state standards. After several states adopt standards for a product, 
manufacturers generally prefer uniform national standards to a 
patchwork of state standards, particularly if the state standards are 
not identical to each other. When a federal standard is established, it 
preempts state standards. Typically, manufacturers, represented by 
their trade association, and efficiency supporters, generally 
represented by ACEEE, have gotten together to work out specific 
standards proposals. These negotiations allow creative solutions to 
problems, resulting in win-win agreements. Once agreement is reached, 
the parties go to members of Congress seeking legislation putting each 
agreement into law. All of the specific standards adopted by Congress 
have had the support of manufacturers and energy efficiency 
organizations. Consumer organizations and states have also supported 
federal standards. In a few instances where manufacturers and 
efficiency advocates cannot agree, Congress has delegated decisions to 
DOE, allowing each side to make its best case and then having the 
Secretary of Energy decide what, if any, standard to set based on the 
criteria of ``maximum improvement in energy efficiency. . .  which. . . 
is technologically feasible and economically justified.''Appliance and 
equipment efficiency standards have been one of the United State's most 
effective energy efficiency policies. ACEEE has estimated that without 
these standards and subsequent DOE rulemakings, U.S. 2010 electricity 
use and peak electric demand would have been about 7% higher and U.S. 
total energy use about 3% higher. Net savings to consumers from 
standards already adopted will exceed $300 billion by 2030.\5\
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    \5\ Max Neubauer, Andrew Delaski, Marianne Dimascio, and Steve 
Nadel. 2009. Ka-BOOM! The Power of Appliance Standards: Opportunities 
for New Federal Appliance and Equipment Standards. Washington, DC: 
American Council for an Energy-Efficient Economy.
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    In January 2011, ACEEE published a paper estimating the impact of 
appliance efficiency standards enacted to date.\6\ We found that:
---------------------------------------------------------------------------
    \6\ Gold, R., S. Nadel and S. Laitner. 2011. Appliance and 
Equipment Efficiency Standards: A Money Maker and Job Creator. 
Washington, DC: American Council for an Energy-Efficient Economy.

   Standards already in place make a big contribution to U.S. 
        efforts to reduce energy use, with savings growing to 5.8 quads 
        a year in 2020, or more than enough to meet the total annual 
        energy needs of one-quarter of all U.S. households.
   These standards and the resulting energy bill savings 
        generated about 340,000 jobs in 2010, or 0.2% of the nation's 
        jobs. The energy and related utility bill savings from 
        standards will continue to contribute to a healthy economy over 
        time, and in 2030, the number of jobs generated will increase 
        to about 380,000 jobs--an amount about equal to the number of 
        jobs in Delaware today.

    In the balance of my testimony I will address the two bills that 
are the subject of today's hearing.
 s. 398--implementation of consensus appliance agreements act (incaaa)
    INCAAA contains a variety of consensus standard agreements that 
have been negotiated among product manufacturers, efficiency 
supporters, and other interested parties over the past two years. ACEEE 
strongly supports this bill. We thank Senators Bingaman and Murkowski 
for introducing this bill and also thank Senator Lugar who played a key 
role in advancing last year's version of this bill.
    INCAAA includes provisions to:

   Update existing standards for residential furnaces, central 
        air conditioners, and heat pumps.
   Update existing standards for residential refrigerators, 
        freezers, clothes washers, clothes dryers, dishwashers, and 
        room air conditioners.
   Establish new standards, based on existing state standards, 
        for bottle-type water dispensers, portable electric spas, and 
        commercial hot food holding cabinets.
   Establish new standards based on ASHRAE/ANSI consensus 
        standards for commercial furnaces and heat pump pool heaters.
   Establish standards for the most inefficient types of 
        outdoor lighting.
   Study video game console energy use.
   Make technical corrections to standards established in EPAct 
        2005 and EISA 2007.

    Overall, ACEEE estimates that this bill will:

   Save the nation nearly 850 trillion Btus of energy each year 
        by 2030--enough energy to meet the needs of 4.6 million typical 
        American households;
   Result in net economic savings (benefits minus costs) to 
        consumers of more than $43 billion annually by 2030;
   Reduce peak electric demand in 2030 by about 20,500 MW, 
        equivalent to the output of 68 typical 300 MW power plants; and
   Save nearly 5 trillion gallons of water, roughly the amount 
        needed to meet the current needs of every customer in Los 
        Angeles for 25 years.
        

        
    In the next portion of my testimony I will briefly summarize the 
rationale behind the key provisions in INCAA.
    Definitions (Sec. 2): This section clarifies the definition of 
standards so that more than one efficiency metric may be used for a 
product if needed and justified. The past two administrations have 
disagreed on whether DOE may set more than one standard for a product. 
There have been numerous times in the past where consensus agreements 
have been reached with more than one metric but DOE did not adopt them 
because it argued that the current definition permits only one metric. 
It would be useful to let DOE establish these standards, either based 
on its own analysis or on consensus agreements, without always having 
to go to Congress. This is not a requirement to set more than one 
efficiency metric but just permission to do so. Under existing law, 
each efficiency requirement will need to be economically feasible and 
economically justified.
    This section also contains new efficiency standards for residential 
furnaces, central air conditioners, and heat pumps, and makes it easier 
for states to include a specific set of efficiency levels that are 
higher than the minimum standard in their state building codes. For 
these products, regional standards are established, generally dividing 
the country into North and South regions. In the North, the current air 
conditioner standard is left unchanged and a process is established for 
DOE to set a northern furnace standard. In the South, the current 
furnace standard is unchanged but the air conditioner is raised by one 
efficiency point from SEER 13 to SEER 14. The building code provision 
allows states to include specific higher efficiency levels in state 
building codes for new construction (e.g., SEER 15 in the South) 
provided they also provide a pathway for use of minimum efficiency 
equipment (e.g., this pathway might require SEER 14 and use of improved 
windows to make up for the lost energy savings). The building code 
provision requires Congressional action as DOE probably does not have 
the authority to establish these standards on their own.
    Heat pump pool heaters (Sec. 3): There have been federal standards 
for gas-fired pool heaters for many years. These will be the first 
standards for efficient electric pool heaters. The specific standard 
levels come from ASHRAE Standard 90.1-2010.
    GU-24 base lamps (Sec. 4): These are a new type of lamp base that 
was developed in response to an ENERGY STAR program solicitation. GU-24 
lamps are compact fluorescent lamps that can all operate on the same 
type of base, regardless of lamp wattage. With a common base, it is 
easier for consumers to purchase replacement tubes, making these lamps 
attractive for utility rebate programs. This provision prevents sale of 
inefficient lamps that could be used in GU-24 sockets and defeat the 
energy-saving purpose of these sockets. Presently inefficient GU-24 
lamps are not produced and this provision would prevent their 
introduction (some foreign companies who did not win the ENERGY STAR 
solicitation have threatened to introduce such lamps in order to stymie 
the GU-24 initiative).
    Bottle-type water dispensers, portable electric spas, and 
commercial hot food holding cabinets (Sec. 5): These are products that 
are currently regulated in California, Connecticut, and Oregon (all 
three products) and Maryland, New Hampshire, Rhode Island, and the 
District of Columbia (for water dispensers and hot food holding 
cabinets). This provision would extend these state standards to apply 
nationally. Bottle-type water dispensers are used in many offices. 
Efficient products have insulation to help keep hot water hot and cold 
water cold. Portable electric spas, also called hot tubs, are used in 
some residences. Efficient products typically have insulated covers to 
keep heat in when the unit is not in use. Commercial and in-ground spas 
are not included. Hot food holding cabinets are typically used in 
hospitals to keep food warm while it is being transported to patient 
rooms. Efficient products are insulated. These standards were developed 
in association with the trade association for each product--the 
Association of Pool and Spa Professionals, the International Bottled 
Water Association, and the North American Food Equipment Manufacturers. 
Pictures of these products are as follows:*
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    * Graphics have been retained in committee files.
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    Test procedures (Sec. 6): Provides for expedited consideration of 
consensus test procedure proposals, mimicking a provision in EISA on 
consensus standards proposals. Clarifies current law on petitions for 
amendments to test procedures and establishes deadlines for responding 
to petitions (currently, there are no deadlines).
    Smart Appliances (Sec. 8): Directs EPA to consider establishing a 
credit in the ENERGY STAR program for appliances that are ``smart.'' 
This was a provision in our consensus agreement with appliance 
manufacturers. The parties have filed a petition with EPA. This 
provision sets a deadline for EPA to respond.
    Video game consoles (Sec. 9): These are products such as the Sony 
PlayStation 3, Microsoft Xbox, and Nintendo Wii. If left on, these 
products can use more energy than a typical new refrigerator. This 
provision would have DOE study these products and decide whether 
minimum efficiency standards should be considered.
    New appliance standards (Sec. 10, 11, 13, 14, and 15): Establishes 
specific new standards negotiated with manufacturers for residential 
refrigerators, freezers, room air conditioners, clothes dryers, clothes 
washers, and dishwashers. For the most part the new standards are based 
on efficiency levels now promoted by ENERGY STAR and by federal tax 
credits for efficient appliances established in 2005 and updated in 
2008. The AHAM witness at this hearing will describe these standards in 
more detail.
    Uniform efficiency descriptor for covered water heaters (Sec. 12): 
Directs DOE to develop a new single efficiency descriptor for both 
residential and commercial water heaters. Currently there are separate 
residential and commercial descriptors, which creates difficulties for 
products that can be used in both sectors (e.g., large homes and small 
businesses). This provision would also correct differences in test 
procedures for storage-tank and tankless water heaters, allowing 
consumers to fairly compare these systems (under the current test 
procedure, the rating for tankless water heaters is misleadingly high). 
This provision was originally introduced by Senators Kohl and Corker in 
the 111th Congress.
    Petition for amended standards (Sec. 16): Sets a deadline for DOE 
to act on standards petitions. Currently there is no deadline.
    Prohibited acts (Sec. 17): Improves enforcement of standards by 
extending coverage from just manufacturers to also include 
distributors, retailers, and private labelers. State standards are 
generally enforced at the distributor and retailer level.
    Outdoor lighting (Sec. 18): Establishes standards for the least-
efficient types of outdoor lighting--mercury vapor and quartz lamps. 
Sale of mercury vapor ballasts were curtailed in EPAct 2005 and this 
provision would complete the process to phase-out these inefficient 
lamps. The quartz lamp provision would require use of more efficient 
quartz products that have an infrared reflective coating.
    Commercial furnaces (Sec. 19): Makes the standard established in 
ASHRAE standard 90.1-1999 a national standard. Most products already 
meet this standard but this provision would bring all products into 
compliance.
    Service over counter commercial refrigerators (Sec. 20): 
Establishes a separate product class for these products, allowing a 
less stringent standard than the one set in EPAct 2005. The 2005 
standard has proven difficult to meet for these products and 
manufacturers and efficiency supporters have developed a more feasible 
standard.
    Technical corrections (Sec. 24): Makes a variety of technical 
corrections to EPAct 2005 and EISA, correcting drafting, typographical, 
and other errors. These include non-conforming amendments to underlying 
law and language that was not adequately clear. Many of these mistakes 
were made in the process of codifying the conference agreement. 
Congress needs to act to correct these errors because some of the 
affected standards are scheduled to take effect soon. We have worked 
together with the affected trade associations to reach consensus on 
these technical amendments.
    In addition to the sections now in INCAAA, we hope that some 
additional sections can be added, as follows:

          Reflector lamps: NEMA and ACEEE have been discussing language 
        to clarify what DOE should consider when it next revises the 
        incandescent reflector lamp standard originally established by 
        Congress in 1992. For this next rulemaking, we have agreed that 
        DOE should consider both incandescent and non-incandescent 
        products, and possible alternative energy metrics to the lumens 
        per Watt metric that is now in use. Specific language is 
        contained in the appendix to my testimony. This language would 
        require DOE to consider these issues, but based on this 
        consideration, DOE could decide to not make changes. This 
        language gives DOE more options, but decisions on these options 
        will depend on DOE analysis made during the next DOE 
        rulemaking.
          Outdoor lighting: Last year's version of INCAAA contained 
        standards for outdoor lighting fixtures that we negotiated with 
        NEMA. That proposal rests on a fixture classification system 
        developed by the Illuminating Engineering Society (IES). The 
        IES standard is now being revised and once this is revised, 
        some modifications to our original consensus agreement will 
        likely be needed. Once this process is completed, we will 
        provide updated legislative language.
          Electric motors: We are also discussing with NEMA revisions 
        to the current federal standard for electric motors. These 
        revisions will likely include additional product classes to be 
        covered by the standards established in EISA. Assuming these 
        discussions are successful, we will provide specific suggested 
        language.
              s. 395--better use of light bulbs act (bulb)
    The BULB bill would repeal Subtitle III B of the Energy 
Independence and Security Act of 2007 (EISA). ACEEE urges that this 
bill be rejected.
    Many proponents of BULB claim that under EISA, incandescent lamps 
are banned, and therefore consumers would be forced to purchase compact 
fluorescent lamps (CFLs). The BULB bill aims to end this reputed ban on 
incandescent lamps. These claims are based on a faulty understanding of 
the lighting market--in fact, efficient incandescent light bulbs that 
meet the EISA standards are already on sale well in advance of the 
national standards taking effect.
    Also, the BULB bill would repeal a variety of other sections in 
EISA, including provisions on reflector lamps (closing a loophole in 
the 1992 law that established reflector lamp standards), metal halide 
lamps (primarily used in factories, large commercial spaces, and 
outdoors), consumer information labels for televisions and other 
electronic products, and a program to improve lighting efficiency in 
federal facilities. We have not seen or heard any criticisms of these 
other provisions, but still the BULB bill would repeal them.
    In 2007 when EISA was passed, ACEEE estimated that the provisions 
in Subtitle III B would by 2020:\7\
---------------------------------------------------------------------------
    \7\ ACEEE. 2007. ``Energy Bill Savings Estimates as Passed by the 
Senate.'' http://www.aceee.org/files/pdf/fact-sheet/
EnergyBillSavings12-14.pdf. Washington, DC: American Council for an 
Energy-Efficient Economy.

   Reduce annual electricity use by 73 billion kWh (enough to 
        serve the annual electricity needs of 6.6 million average 
        American households);
   Reduce peak electric demand by more than 10,000 MW 
        (equivalent to the output of more than 30 power plants (300 MW 
        each); and
   Reduce consumer energy bills by more than $6 billion (about 
        $50 per American household annually).

    These benefits would be lost if the BULB bill is enacted.
    According to a recent survey by USA Today, despite all the recent 
publicity about an incandescent lamp ban, a recent survey of 1,016 
adults on the lamp standard found that ``61% of Americans call the 2007 
legislation a `good' law while 31% say it's `bad'.''\8\
---------------------------------------------------------------------------
    \8\ Koch, Wendy. Feb. 17, 2011. ``Poll: Americans OK with Newer 
Light Bulbs.'' USA Today. http://content.usatoday.com/communities/
greenhouse/post/2011/02/poll-americans-ok-newer-light-bulbs/1
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    I would also note that the U.S. is not alone in passing this type 
of legislation. Similar legislation has been passed in Canada, 
Australia, the European Union, Brazil, Argentina, Russia, and Malaysia. 
And China is now developing standards. The Australian, European, and 
South American standards have already taken effect.
    In the following sections I address a few of the key issues in this 
debate.
Does EISA ban incandescent lamps and only permit use of compact 
        fluorescent lamps?
    EISA sets lamp performance standards in terms of lumens of light 
output per Watt of power input. The standards are higher for high-lumen 
bulbs since efficiency generally increases as bulb size increases. Any 
lamp technology that can meet the performance standard can be sold. 
Presently, there are four types of lamps on the market that meet the 
EISA standard, two of which are incandescent. The four complying lamp 
types are:

          1. High-efficiency halogen bulbs.--All three major 
        manufacturers (GE, Osram Sylvania, and Philips) have 
        incandescent products that place the filament in a capsule 
        containing halogen gas. The filament burns more efficiently 
        than in a conventional incandescent lamp. These halogen 
        products have been used for more than a decade in automobile 
        headlamps and most commercial reflector lamps. With halogen 
        lamps, a 72 W halogen replaces a conventional 100 W lamp and a 
        43 W halogen replaces a conventional 60 W lamp. Their rated 
        life is the same as conventional lamps--1,000 hours. These 
        lamps have a suggested list price of $1.49, although as 
        production increases the price is likely to drop.
          2. Halogen IR lamps.--These are similar to the lamps above 
        but with a special coating on the capsule that reduces the 
        amount of infrared energy leaving the capsule, increasing lamp 
        efficiency still further. Presently, Philips markets halogen IR 
        lamps. The higher efficiency permits manufacturers to design 
        longer life lamps and still meet the performance standard. For 
        example, the Philips lamp has a rated life of 3,000 hours, 
        three times that of a conventional incandescent bulb. Presently 
        these lamps sell for about $4, but as production increases, 
        costs will come down.
          3. Compact fluorescent lamps (CFLs).--These lamps are now 
        widely available and come in a variety of light colors and 
        shapes such that lamps are available to fit most existing 
        fixtures. Prices have come down enormously. This past weekend I 
        was at Home Depot and they had a variety of 4-packs for under 
        $3, an average of 75 cents per bulb.
          4. LED lamps (light emitting diodes).--These lamps use 
        multiple LEDs to provide light. Only recently have general 
        service lamps made it to the market. They have long life (e.g., 
        25,000 hours or more). At Home Depot this past weekend these 
        bulbs were selling for $18-40. These are brand-new products and 
        prices are likely to drop dramatically in coming years.
Do the EISA standards reduce consumer choice?
    The standards have resulted in some important new choices while 
eliminating the least efficient option in the market. On the one hand, 
the conventional incandescent lamp developed by Thomas Edison more than 
a century ago will no longer be available. On the other hand, the 
standard has spurred innovation in the lighting industry, resulting in 
the development of both general service halogen and general service 
halogen IR lamps. Without the 2007 lamp standards, it is unlikely these 
products would have been brought to market. And the impending standard 
is also helping to spur development of general service LED lamps.
    There has also been some recent publicity about how Easy Bake ovens 
for children use a 100 W light bulb as their heating element. Easy Bake 
has announced that they will soon be coming out with a new oven that 
does not need a light bulb.\9\ Instead it will have a small electric 
element that is a more efficient heater than a light bulb.
---------------------------------------------------------------------------
    \9\ Karp, Gregory. Feb. 24, 2011. ``Light Bulb Goes Off for Easy-
Bake Oven's New Idea.'' Chicago Tribune. http://
articles.chicagotribune.com/2011-02-24/news/ct-talk-0224-easy-bake-
oven-20110224--1--bulb-100-watt-incandescent-light-easy-bake-ovens.
---------------------------------------------------------------------------
Why not leave the choice to consumers and let them purchase inefficient 
        bulbs if they want to?
    The bulbs someone purchases affects not only their own energy 
bills, but also all other consumers as well. Power demand is growing, 
meaning that new power plants are needed. New power plants cost more 
per kWh than existing power plants,\10\ so new power plants raise 
rates. The lamp efficiency standards reduce growth in electricity use 
and thereby moderate these rate increases for all consumers.
---------------------------------------------------------------------------
    \10\ For information on the cost of new power plants see Lazard. 
2009. ``Levelized Cost of Energy Analysis, version 3.0.'' http://
efile.mpsc.state.mi.us/efile/docs/15996/0145.pdf. These costs are only 
for the generating station and thereby account for only about half of 
retail electricity prices since transmission, distribution and other 
costs are not included.
---------------------------------------------------------------------------
    In addition, more efficient bulbs reduce emissions from power 
plants, affecting the air we all breathe. In the next section I discuss 
emissions of mercury, but more efficient bulbs also reduce emissions of 
criteria pollutants (sulfur and nitrogen oxides) and greenhouse gases, 
benefiting all Americans.
Is mercury a major problem with CFLs?
    CFLs contain a small amount of mercury, typically about 4 mg per 
bulb. Manufacturers have significantly reduced the amount of mercury in 
bulbs relative to products from earlier years. By comparison, the old 
mercury thermometers we all grew up with used about 500 mg of mercury--
125 times more. Most of this mercury becomes bound to the inside of the 
bulb as the bulb is used. The amount of mercury in the bulb needs to be 
balanced against the amount of mercury released into the air when power 
is generated. According to EPA: ``More than half of [total mercury 
emissions in the U.S.] come from coal-fired electrical power. Mercury 
released into the air is the main way that mercury gets into water and 
bio-accumulates in fish. (Eating fish contaminated with mercury is the 
main way for humans to be exposed).'' Again according to EPA, a typical 
incandescent lamp releases 5.5 mg into the environment, all from power 
generation. A typical CFL releases only 1.6 mg, including 1.2 mg from 
power generation and 0.4 mg from landfilling CFLs.\11\
---------------------------------------------------------------------------
    \11\ EPA. Nov. 2010. ``Frequently Asked Questions, Information on 
Compact Fluorescent Light Bulbs (CFLs) and Mercury.'' http://
www.energystar.gov/ia/partners/promotions/change_light/downloads/
Fact_Sheet_Mercury.pdf
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Aren't halogen lamps the type of lamp that was linked to household 
        fires a few years ago?
    Yes, there were fires associated with halogen torchiere luminaries. 
But these had exposed tubes and were generally high-wattage--e.g., 300 
W per tube. The general service halogen lamps on the market today have 
the tube enclosed within an outer bulb and they are lower wattage--the 
highest are 72 W. The higher the Watts, the more heat that is given 
off. Also, the general service halogen lamps on the market today 
contain a safety fuse that will shut the lamp off should it fall over 
and break.
                               conclusion
    The federal appliance and equipment efficiency standards program is 
a great energy efficiency success story, reducing U.S. energy use by 
about 7% in 2010, reducing consumer and business energy bills by about 
$34 billion in 2010, and generating more than 300,000 jobs. This 
program has a long history of bipartisan support.
    The INCAAA bill will add to these benefits. By 2030, we estimate 
that INCAAA will save nearly 850 trillion Btus of energy annually in 
2030 and result in net economic savings (benefits minus costs) to 
consumers of more than $43 billion by 2030. This bill has consensus 
support from product manufacturers, energy efficiency and consumer 
organizations, and a variety of other affected parties. We urge this 
Committee to favorably report out INCAAA.
    On the other hand, the BULB bill will result in higher energy use 
and costs--an average of about $50 annually in higher energy bills per 
household. Contrary to some reports in the media, this bill will not 
ban incandescent lamps and require use of CFLs. The general service 
lighting standards enacted by Congress in 2007 have spurred product 
innovation and now in addition to CFLs, two types of incandescent lamps 
are now being sold that will meet the new standards. We urge this 
Committee to not support the BULB bill.This concludes my testimony. 
Thank you for the opportunity to present these views.
         appendix: recommended new language on reflector lamps
                 STANDARDS FOR CERTAIN REFLECTOR LAMPS.
    Section 325(i) of the Energy Policy and Conservation Act (42 U.S.C. 
6295(i)) is amended by adding at the end the following:

          ``(9) REFLECTOR LAMPS.----

          (A) In conducting rulemakings for reflector lamps after 
        January 1, 2014, the Secretary shall consider:

                  ``(i) incandescent and nonincandescent technologies; 
                and
                  ``(ii) a new energy-related measure, other than 
                lumens per watt, that is based on the photometric 
                distribution of those lamps.

    The Chairman. Thank you very much.
    Mr. McGuire.

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

    Mr. McGuire. Chairman Bingaman, Ranking Member Murkowski, 
thank you for providing me the opportunity to testify on behalf 
of the Association of Home Appliance Manufacturers regarding S. 
398. Thank you both for your leadership in the area of 
appliance efficiency.
    AHAM represents manufacturers of major, portable and floor 
care home appliances and suppliers to the industry. Our 
membership is global and produces more than 95 percent of the 
household appliances shipped for sale in the United States. 
AHAM members also employ tens of thousands of people in 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 our industry contributes significantly to U.S. 
jobs and economic security. Home appliances are also 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. Products 
with an added ENERGY STAR designation are at least 10 to 20 
percent more efficient than the Federal standards require.
    On average a modern refrigerator today uses only the same 
amount of electricity as a 50 watt light bulb.
    While clothes washer tub capacities have grown larger the 
new clothes washer uses 73 percent less energy than it did in 
1990. In fact replacing an year old washer today with one of 
average efficiency will save the American consumer $130 per 
year in utility bills and more than 5,000 gallons of water per 
year.
    Dishwashers, room air conditioners, freezer and other major 
appliances offer similar energy efficiency gains.
    We support Federal efficiency standards in lieu of State 
standards that have been involved with and supported appliance 
related energy legislation for 30 years. In short if there are 
to be regulations a single, uniformed standard throughout the 
United States and even throughout North American is preferable 
to a patchwork of 50 State standards. The current appliance 
standard system is also designed to take into consideration a 
number of factors including consumer cost and product 
functionality as well as provide adequate lead time and sell 
through time for manufacturers.
    The agreement in S. 398 would implement for AHAM's 
products, it represents energy standards that for the most part 
are already being pursued by the DOE based on deadlines and 
previous legislation or court imposed consent decree. But 
enacting these standards into law will assist DOE in meeting 
its many statutory deadlines for standards development. It will 
also reduce the burden the industry and other stakeholders 
would face in participating in separate regulatory proceedings. 
The bill also provides added lead time and certainty to prepare 
for new standards which is welcome in these economically trying 
times.
    S. 398 saves energy and increases our energy independence. 
The standards in the bill when combined with other elements of 
the agreement will save more than nine quads of energy over 30 
years. The agreement requires incentivizes clothes washers and 
dishwashers to use nearly 5 trillion less gallons of water over 
30 years. Over that same 30 year time period greenhouse gas 
emissions will be reduced by approximately 550 million metric 
tons.
    In addition to the standards in the bill an important, but 
non legislative component of this agreement is that it will 
jump start the SMART grid by helping to deploy Smart appliances 
nationwide and enable consumers to better take advantage of 
demand response and real time pricing opportunities. This will 
be accomplished when ENERGY STAR agrees to petition from our 
coalition requesting recognition of the benefits of SMART 
appliances.
    The third and final important pillar of this agreement are 
incentives to manufacturers to increase the production of super 
efficient appliances over and above the ENERGY STAR levels 
thereby saving even more energy and water and encouraging more 
job creation. These manufacturer tax credits require continued 
improvement in the production of super efficient appliances 
because the tax credits can only be claimed from increased 
production over previous years even during a recession. These 
incentives impact approximately 46,000 manufacturing jobs and 
could create new jobs.
    We strongly encourage this committee to approve S. 398 to 
lock in the energy savings contained in the standards portion 
of our agreement. We look forward to working with this 
committee on these and other issues.
    Thank you.
    [The prepared statement of Mr. McGuire follows:]
Prepared Statement of Joseph M. McGuire, President, Association of Home 
                        Appliance Manufacturers
    Chairman Bingaman, Ranking Member Murkowski and members of the 
Committee, thank you for providing me the opportunity to testify on 
behalf of the Association of Home Appliance Manufacturers (AHAM) 
regarding the Implementation of National Consensus Appliance Agreements 
Act of 2011 (S. 398) to amend the Energy Policy and Conservation Act to 
improve energy efficiency of appliances. We appreciate the Committee's 
willingness to consider and support consensus agreements for standards 
and incentives by industry, efficiency advocates, environmental and 
consumer groups and State energy offices.
    AHAM represents manufacturers of major, portable and floor care 
home appliances, and suppliers to the industry. AHAM's membership 
includes over 150 companies throughout the world. In the U.S., AHAM 
members employ tens of thousands of people and produce more than 95% of 
the household appliances shipped for sale. 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.
    AHAM is also a standards development organization, accredited by 
the American National Standards Institute (ANSI). The Association 
authors numerous appliance performance testing standards used by 
manufacturers, consumer organizations and governmental bodies to rate 
and compare appliances. AHAM's consumer safety education program has 
educated millions of consumers on ways to properly and safely use 
appliances such as portable heaters, clothes dryers, and cooking 
products.
    AHAM and its members are committed to providing energy efficient 
home appliances that have a direct positive impact on the lives of 
consumers. Refrigerators are being produced at larger capacities, and 
yet are 50 percent more efficient than they were 20 years ago. Products 
with an added ENERGY STAR designation are at least 20 percent more 
efficient than the federal standard. On average, a modern refrigerator 
uses only the same amount of electricity as a 50 Watt light bulb. 
Clothes washers are another example of the energy efficiency success 
with tub capacities growing larger, and energy consumption declining. A 
new clothes washer uses 73 percent less energy than it did in 1990. In 
fact, replacing an 8 year old washer with one of average efficiency 
will save the American consumer $130 per year in utility bills, and 
more than 5,000 gallons of water per year. ENERGY STAR models enjoy 
additional energy and water savings. Dishwashers, room air 
conditioners, freezers and other major appliances offer similar energy 
efficiency gains.
                           federal standards
    We support federal efficiency standards in lieu of state standards 
and have been involved with and supported appliance related energy 
legislation for 30 years. One, uniform standard throughout the U.S., 
and even throughout North America and beyond, is preferable to a 
patchwork of 50 disconnected state-by-state standards. Federal 
appliance standards based on industry input and agreement is a path to 
more reasonable regulation and protection of consumer interest in a 
full diversity of products by manufacturer, brand, features and price 
points. Rational, certain standards with sufficient lead time, when 
coupled with incentive programs, can also enhance U.S. employment.
    By participating in consensus negotiations leading to legislated 
standards or those which are the subject of multi-party petitions to 
Department of Energy (DOE), AHAM has assisted DOE to first catch up to 
and now meet the rulemaking schedules in EPCA. Congress has set DOE a 
daunting task. There have been numerous new rulemakings required with 
more scheduled. The chart below shows the many standards for our 
products and how far into the future standards are already in the queue 
to be revised.

    The agreement that INCAAA would implement, for AHAM's products, 
represents energy standards that largely already are being pursued by 
the DOE based on deadlines in previous legislation or a court imposed 
consent decree. Enacting these standards into law does not add to the 
burden industry would face in any case through mandatory rulemakings 
and provides added lead time and certainty which is welcome in these 
economically trying times.
         energy efficient and smart appliance agreement of 2010
    Last year, after months of intense negotiations, with the technical 
assistance and encouragement of DOE, which was greatly appreciated and 
helpful, the Energy Efficient and Smart Appliance Agreement was 
finalized by a number of stakeholders. Supporters of the agreement are 
as follows:

   Association of Home Appliance Manufacturers
   American Council for an Energy-Efficient Economy
   Appliance Standards Awareness Project
   Natural Resources Defense Council
   Earthjustice
   Alliance to Save Energy
   Northwest Power and Conservation Council
   Northeast Energy Efficiency Partnerships
   California Energy Commission
   Demand Response and Smart Grid Coalition
   Consumer Federation of America
   National Consumer Law Center
   Alliance for Water Efficiency

    The Energy Efficient and Smart Appliance Agreement saves energy and 
increases our energy independence. We estimate that fully implemented 
this agreement will lead to improved product energy efficiency saving 
more than 9 Quads of energy over 30 years (the U.S. uses approximately 
100 quads a year). Further, it requires and incentivizes clothes 
washers and dishwashers to use nearly 5 trillion less gallons of water 
over 30 years. Over that same 30 year time period, greenhouse gas 
emissions will be reduced by approximately 550 million metric tons of 
CO2. Through these energy and water savings, consumers will 
save billions of dollars.
    But standards are not enough and are of decreasing utility as our 
products get more efficient and need to be supplemented with ``pull'' 
programs. An important but non-legislative component of this agreement 
is that it will jump start the smart grid by helping to deploy smart 
appliances nationwide and enable consumers to better take advantage of 
demand-response and real-time pricing opportunities. This will be 
accomplished when ENERGY STAR agrees to an industryefficiency advocate-
consumer group petition requesting recognition of the benefits of smart 
appliances.
    The third and final important pillar of this agreement are 
incentives to manufacturers to increase the production of super-
efficient products--over and above ENERGY STAR levels--thereby saving 
even more energy and water and encouraging more job creation. These 
manufacturer tax credits are a model of success and require continued 
improvement in the production of superefficient appliances because the 
tax credits can only be claimed for increased production over previous 
years even during a recession. These incentives impact approximately 
46,000 manufacturing jobs (19,000 direct; 27,000 supply chain/support) 
and creates new jobs, including bringing back to the U.S. jobs that 
were outsourced in earlier years.
    Lastly, these consensus agreements reduce the amount of resources 
that the Department of Energy needs to provide for the rulemakings. In 
this era of increased focus on federal use of resources, these 
standards agreements should be embraced by Congress as they have been 
by the Administration so that resources can be used more effectively.
    The agreed to refrigerator standards provide 20 to 30 percent more 
energy savings relative to current standards for major product 
categories, which is the current ENERGY STAR level or the previous top 
tax credit level. The new standards take effect in 2014. It also will 
include icemaker energy.
    The new clothes washer standards would be effective in 2015. It 
includes different standards for top-loaders and front-loaders and top-
loader standards have a two phase increase to allow manufacturers time 
to develop and re-tool for higher levels of efficiencies. Front-loaders 
will save 43 percent more energy and 52 percent more water relative to 
current standard. Top-loaders will save 26 percent more energy and 16 
percent more water savings in 2015 and 37 percent more energy and water 
in 2018.
    The new clothes dryer standards will save 5 percent more energy 
using the current test procedure. Additional energy will be saved by 
modifying the test procedure to address the effectiveness of auto 
termination and reduce over-drying. These standards would take effect 
in 2015.
    The new room air conditioner standards, which would be effective in 
2014, will save 10 to 15 percent more energy for the major product 
classes.
    The dishwasher standards would reduce energy use by 14 percent and 
water use by 23 percent and would take effect in 2013.
    The estimated energy and water savings from these standards are 
shown in the graph below.*
---------------------------------------------------------------------------
    * Graph has been retained in committee files.
---------------------------------------------------------------------------
                               conclusion
    AHAM has a history of working cooperatively with Congress to 
provide consensus agreements with all stakeholders. We think this is a 
preferable path because it provides stakeholders increased flexibility 
to bring in other issues, such as ENERGY STAR, that cannot be done 
through the confinements of a normal rulemaking process. We strongly 
encourage this committee to approve INCAAA and look forward to 
continuing to work with this Committee on these and other issues.

    The Chairman. Thank you very much.
    Mr. Yurek, go right ahead.

   STATEMENT OF STEPHEN YUREK, PRESIDENT AND CHIEF EXECUTIVE 
   OFFICER, THE AIR-CONDITIONING, HEATING, AND REFRIGERATION 
                           INSTITUTE

    Mr. Yurek. Thank you, Mr. Chairman. I appreciate the 
opportunity to be with you today to discuss our support for S. 
398. I'm Stephen Yurek, the President and CEO of the Air-
Conditioning, Heating, and Refrigeration Institute, the trade 
association that represents manufacturers of heating, cooling, 
water heating and commercial refrigeration equipment.
    I'm going to stress 2 points that are in my written 
comments.
    The first one is that this is a jobs bill.
    The second is that this is essential if Congress passed 
this bill because many of the provisions in our consensus 
agreements cannot be enacted without legislation.
    On my first point this is a jobs bill representing over 
250,000 American manufacturing jobs which represent the jobs 
that our members have in the U.S. Because our equipment 
requires professional installation there's an additional 
million jobs at stake related to the distribution, installation 
and maintenance of this equipment. In addition, as I stated, 
this is 250,000 American jobs.
    It also represents a $2.5 billion positive trade balance. 
This is equipment that is manufactured in the U.S. What S. 398 
does is provides these manufacturers in this industry with 
predictability. With predictability this allows investment, 
investment in innovation, investment in manufacturing and 
investment in jobs. Ultimately it provides and reduces the cost 
to consumers.
    My second point related to that this bill needs to be 
passed immediately relates to that there are many provisions in 
these consensus agreements that cannot be enacted by DOE but 
require Congressional action.
    These 5 products that we represent relate to water heaters. 
In this bill there's a provision where DOE is required to make 
a rulemaking on the test procedures for water heaters. The 
current test procedures are over 30 years old and do not 
reflect current technology available in the market.
    For heat pump pool heaters these products are currently not 
federally regulated products. They are being regulated by 
states around the country. What this bill does is make them 
federally covered products and have one national standard.
    For small duct, high velocity and through the wall 
products, these products are currently being sold in the U.S. 
under a waiver from the Department of Energy. These are special 
projects used for houses that cannot have the regular systems 
that are available on the market. Without this waiver they 
would not be able to be sold. What this legislation does is 
make them a specific product class.
    As for air conditioning, heat pumps and furnaces, there are 
provisions in the consensus agreement that allow local States 
and municipalities to enact building codes that will allow 
higher efficiency levels for products in new construction. DOE 
does not have this authority to allow this under current 
legislation.
    Finally, as it relates to service over the counter 
commercial refrigeration products which Senator Burr was 
mentioning earlier. These are the ones this evening or tomorrow 
as you're heading back home and you grab that sandwich or 
bottle of water before you head onto the plane. That is the 
kind of equipment we're talking about here.
    This equipment was inadvertently included in the definition 
of commercial refrigeration equipment in the 2005 bill. This 
bill was intended to cover those products that you see in the 
supermarket, much larger commercial refrigeration systems. 
Because of the efficiency levels required technology today 
cannot meet those levels. Therefore without this legislation 
making this a separate product class and setting efficiency 
levels for this equipment that they can meet. These products 
will no longer be able to be manufactured in the U.S. which 
means plants will be closed and jobs would be lost.
    Therefore we need Congress to act immediately. We were 
close last year, as the chairman mentioned in his opening 
comments. But these legislative provisions need to be enacted 
as soon as possible because without that we won't have jobs, 
predictability and the ability to invest in our future.
    Thank you.
    [The prepared statement of Mr. Yurek follows:]
  Prepared Statement of Stephen Yurek, President and Chief Executive 
  Officer, the Air-Conditioning, Heating, and Refrigeration Institute
    Mr. Chairman, Mrs. Murkowski, and Members of the Committee:
    I am pleased to be with you today to discuss our support for S. 
398. My name is Stephen Yurek, and I am president and CEO of the Air-
Conditioning, Heating, and Refrigeration Institute--the trade 
association that represents manufacturers of heating, cooling, water 
heating, and commercial refrigeration equipment.
    We are proud that our industry is one of the very few U.S. 
industries that enjoys an over $2 billion positive balance of trade. We 
build equipment here in North America and export it to nations around 
the world. The manufacturing side of our industry alone is responsible 
for some 250,000 American jobs, and when you add in distribution, 
installation, and maintenance, that figure soars to nearly one million 
jobs across all 50 states and all U.S. territories.
    To begin, I want to commend you, Mr. Chairman, and Ranking Member 
Murkowski for re-introducing this bill. As you know, we came within one 
vote of passing it by unanimous consent during the lame-duck session. 
We hope that we can re-capture that momentum and work with you and your 
staff to get it passed this year, ideally before the Department of 
Energy issues its final rule on new federal efficiency standards for 
central air conditioners and furnaces in May.
    I appreciate the opportunity to briefly comment on the key 
provisions of this bill that pertain to our industry, but first, it is 
important to note that the consensus agreements contained in this bill 
are just that: Consensus agreements. That means that industry and 
energy efficiency advocates spent a great deal of time in a process of 
give and take over the better part of a year to come to agreement on 
these provisions.
    And when you consider that just a few years ago, we would have been 
much more likely to duke it out in a courtroom, it is even more 
apparent that this is a better way.
    It is important for us to try and work together with our friends in 
the environmental community, because what we've found through this 
process and several others is that we have essentially the same goals, 
but perhaps different ways of achieving them. By working together, we 
have not only managed to craft these agreements that will save 
significant amounts of energy and money, but we've also established and 
strengthened a trust among our organizations that never existed before.
    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 efficiency 
ratings that better fit the range of water heaters in the market today 
and will enable consumers to more easily estimate energy savings.
    We are very pleased that you included in S. 398 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 addition of the agreement we reached with advocacy groups to 
establish a federal efficiency standard for a specific type of 
commercial refrigeration product known as service-over-the-counter--the 
type of product from which you might, for example, grab a sandwich or 
soda before you board an airplane--is also appreciated. This standard 
is necessary because the legislation enacted by Congress in 2005 
establishing federal energy efficiency standards for commercial 
refrigeration products inadvertently negatively impacted this product 
category. So, without this change, these products will literally no 
longer be able to be manufactured and sold, seriously impacting jobs in 
many different states.
    The inclusion of standards for through-the-wall central air 
conditioners, through-the-wall heat pumps, and small duct, high 
velocity systems is also appreciated, and will enable manufacturers of 
those products to have predictability regarding efficiency levels for 
years to come.
    Currently, efficiency levels for this equipment are established by 
waivers from DOE. Therefore, legislation is necessary to create these 
product categories and establish some predictability for manufacturers.
    Finally, I want to express AHRI's support for provisions in S. 398 
that implement our consensus agreement on residential heating and 
cooling equipment--this agreement is another great example of industry 
and advocacy groups collaborating to save energy and improve the 
environment.
    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.
    It establishes a new, national efficiency standard for residential 
heat pumps, and new standards for central air conditioners in three 
regions. In hotter areas, like the southeast and southwest, the new 
standard for air conditioners is appropriate for that climate, while 
the current federal minimum standard remains in place for cooler areas. 
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 cannot be 
realized without congressional action--a provision that would 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.
    I would also like to affirm the statement you made when introducing 
this bill, Mr. Chairman. You said, and I quote: ``Greater energy 
efficiency saves consumers money, strengthens our economy, enhances our 
national security, creates jobs, and reduces environmental impacts.''
    All of that is true, and according to our joint analysis of just 
the provision on central air conditioners and heat pumps, the nation 
will save 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.
    As I conclude, please allow me to make one final point: In an 
atmosphere where every federal dollar is scrutinized, I would note that 
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.
    Again, I want to thank the Committee and your staff for the hard 
work in putting this bill together, and I thank you for the opportunity 
to testify, Mr. Chairman.

    The Chairman. Thank you very much.
    Mr. Pitsor.

STATEMENT OF KYLE PITSOR, VICE PRESIDENT, GOVERNMENT RELATIONS, 
         NATIONAL ELECTRICAL MANUFACTURERS ASSOCIATION

    Mr. Pitsor. Chairman Bingaman and Ranking Member Murkowski 
on behalf of the National Electrical Manufacturers Association, 
I'm Kyle Pitsor, Vice President of Government Relations for 
NEMA. NEMA is the trade association representing 430 
manufacturers of electrical and medical equipment. I'm pleased 
to be here today to present NEMA's views on the importance of 
the National Energy Efficiency Standards program and to offer 
our views on S. 398 and S. 395.
    NEMA supports the robust national energy conservation 
program under the Energy Policy and Conservation Act. We 
believe that a strong national program of standards, test 
procedures and labeling is critical to effectively maximize 
energy savings in the Nation and for the consuming public. 
Products are manufactured and distributed on national and 
sometimes global basis. It is key that energy conservation 
regulation for products occur at the Federal level rather than 
a patchwork of conflicting State standards.
    Mr. Chairman in my written statement I provide NEMA's 
positions on various sections of 398. I'll only mention a few 
of those in my oral comments.
    In section 18 in outdoor lighting efficiency standards 2 
years ago the industry and other stakeholders negotiated a 
consensus proposal for the establishment of Federal minimum 
efficiency standards for pole mounted outdoor lighting. Given 
changes in the standards in the market since that time, we are 
presently seeking to revise that consensus proposal and hope to 
have a package for your consideration for inclusion in this 
legislation.
    In section 22, NEMA strongly supports the need for a study 
on the Appliance Standards program and the level of compliance 
and enforcement of the Federal efficiency standards. Our 
industry has invested heavily in the Federal program. We are 
concerned about certain imported products that are not in 
compliance with Federal regulations.
    In section 24, dealing with technical corrections since the 
passage of the Energy Independence and Security Act of 2007, 
several items have been identified that weren't technical 
correction to address implementation and other clarification 
issues. We urge prompt action on the package contained in the 
bill.
    Now let me turn, Mr. Chairman, to S. 395, which would 
repeal Subtitle B of EISA 2007 law. Today I'm here to reaffirm 
our industry support for public policies that encourage 
transitioning to more energy efficient lighting and 
specifically the bipartisan energy efficient light provisions 
in EISA 2007. NEMA does not support its repeal.
    First let me correct a common misunderstanding with the 
EISA 2007 provisions. They do not ban the incandescent light. 
Let me repeat that. They do not ban incandescent light bulbs 
nor do they ban the use--nor do they mandate the use, excuse 
me, nor do they mandate the use of compact fluorescent lamps or 
CFLs.
    Second the EISA law reduces lighting energy by setting a 
maximum wattage that any bulb can consume for a given light 
output. We call that lumens in the industry or the late term 
brightness. The light output range is based--are based on the 
brightness that consumers currently experience with today's 
100, 75, 60 and 40 watt light bulbs.
    For example, consumers will still be able to purchase a 
general service incandescent light bulb. But instead of using 
100 watts as in today's bulb that gives out 1600 lumens they'll 
be able to purchase a new 72 or 70 watt light bulb that 
produces the same amount of lumens, the same quality of light. 
It's fully dimmable and it lasts longer than today's 
incandescent light bulb. This bulb represents a 28 percent 
savings to the consumer and similar savings will be achieved 
with the 75, 60 and 40 watt bulbs. As I mentioned these 
advanced bulbs are just like today's bulbs in being fully 
dimmable and have the same quality and feel and look of 
traditional light bulbs.
    Now if a consumer wants greater energy savings they have 
additional choices. They can opt for a compact fluorescent bulb 
which provides the same 1600 lumens but it uses only 25 or 26 
watts of power. This represents a 75 percent savings to the 
consumer and it lasts about eight to ten times as long as 
today's traditional incandescent light bulb.
    Additional advanced lighting products are also entering the 
marketplace such as high brightness LED bulbs which represent 
over a 75 percent savings with very long lives. Here's 2 
examples that are available in the market today. These range 
about 25,000 hours as opposed to 750 hours of today's 
traditional bulb. These LED bulbs are appearing in the low 
wattage ranges in the 60 and 40 area and will gradually come 
into the higher wattage and lumen packages.
    My point here is that the EISA 2007 provisions expand and 
provide consumers with a variety of energy efficient light bulb 
choices examples of which which I've shown. While saving them 
money on their electrical bills. Providing them light quality 
and ambiance options to suit their needs.
    When some people hear of change they become anxious. It's 
important to note that the law is implemented over several 
years beginning this January 2012. Industry has and is making 
the necessary investments to meet the new requirements 
including a new label that will occur on light bulb packages 
that will assist consumers in comparing the expanded options 
available to them. Additional consumer education and 
informational materials are also taking place including 
retailer point of sale information and websites like 
lightbulboptions.org. As an industry our industry has committed 
heavily to ensuring a smooth transition to more energy 
efficient lighting.
    In conclusion NEMA supports the consensus provisions in S. 
395. We support the lighting efficiency provisions in the 
Energy Independence and Security Act of 2007. Do not support 
the repeal.
    Thank you.
    [The prepared statement of Mr. Pitsor follows:]
     Prepared Statement of Kyle Pitsor, Vice President, Government 
        Relations, National Electrical Manufacturers Association
    Chairman Bingaman, Ranking Member Murkowski and members of the 
Committee: On behalf of the National Electrical Manufacturers 
Association (NEMA), I am Kyle Pitsor, Vice President for Government 
Relations. NEMA is the trade association of choice for the electrical 
and medical imaging equipment manufacturing industry. Our approximately 
430 member companies manufacture products used in the generation, 
transmission and distribution, control, and end-use of electricity, and 
represent about 350,000 jobs. These products are used in utility, 
medical imaging, industrial, commercial, institutional, and residential 
applications. Domestic production of electrical products sold worldwide 
exceeds $120 billion.
    I am pleased to be here today to present NEMA's views on the 
importance and role of the national energy efficiency standards program 
and to offer our views on S. 398 and S. 395.
    I would like to note that our member companies support advancing 
energy efficiency in the marketplace. NEMA members and their employees 
are 'at the very heart of our national effort to reduce energy use 
through the research, development, manufacturing, and deployment of 
energy-efficient products and technologies. Many energy efficient 
technologies exist, and what we all must strive for is wider 
recognition, deployment, and use of today's state-of-the-art products 
and technologies, as well as support for emerging technologies.
    NEMA supports a robust national energy conservation standards 
program under the Energy Policy and Conservation Act (EPCA), as 
amended. We believe that a strong national program of standards, test 
procedures and labeling/information disclosure is critical to 
effectively maximize energy savings for the Nation and the consuming 
public. Products are manufactured and distributed on a national (and 
sometimes global) basis, and it is key that energy conservation 
regulation for products occur at the federal level.
    Mr. Chairman, I would like to provide our comment on the 
legislation and have organized our testimony based on the bill's 
sections. We also offer comment on several other topics following our 
section-by-section comments which we hope will be considered as the 
legislation moves forward.
s. 398 ``implementation of national consensus appliance agreements act 
                               of 2011''
Section 6--Test Procedure Petition Process
    The establishment of energy efficiency standards for federally-
covered products and equipment is predicated on the use of recognized 
and established consensus test procedures. Without agreed upon test 
procedures, it would be impossible to compare efficiency claims among 
products. The current program is based on incorporation of relevant 
test procedures within the regulatory program under EPCA.
    Once the Department of Energy (DOE), or in some cases Congress, 
establishes the test procedure for a regulated product, it is important 
that the test procedure be evaluated as time passes to ensure that it 
stays current with the energy efficiency levels mandated for the 
product. When DOE undertakes reviews of the efficiency standard for a 
product, it also undertakes a review of the applicability of the test 
procedure and whether it needs to be changed or not.
    The proposed legislation would permit DOE to consider amending a 
test procedure as a result of petition, conduct a public rulemaking to 
determine if the test procedure should be amended or not, and set 
deadlines. It should be noted that the granting of the petition does 
not establish a presumption that the test procedure should be amended, 
only that DOE must undertake a rulemaking to make a decision on what 
changes to the procedure are warranted, if any, and to publish such a 
determination. In addition, for industrial equipment, the legislation 
would require DOE to conduct a test procedure rulemaking at a minimum 
of once every seven (7) years on a mandated basis.
    NEMA supports the need to keep test procedures current based on the 
use of recognized and established consensus test procedures. Petitions 
under the proposed legislative changes need to include detailed 
information on why a current procedure should be amended, otherwise we 
fear that very general petitions could be filed that would tie up DOE 
resources unnecessarily and be counterproductive to the administration 
of the appliance standards program.
Section 17--Prohibited Acts
    NEMA supports this section. 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, 
federal law places that responsibility only on manufacturers and 
private labelers, which creates a loophole when it comes to compliance 
in the marketplace. The loophole unfairly denies manufacturers of 
compliant, efficient products of sales opportunities because there are 
not uniform incentives to comply with the law. The proposed section 
would ensure that all players in the manufacturing, sales, and 
distribution channels have a responsibility.
Section 18--Outdoor Lighting Efficiency Standards
    Two years ago, the industry, environmental advocates, lighting 
designers, and other parties negotiated a consensus proposal for the 
establishment of federal minimum efficiency standards for pole-mounted 
outdoor lighting. Given changes in the standards and the market since 
that time, we are presently seeking to revise that consensus proposal 
and hope to have a package for your consideration to be added to this 
legislation.
    The current Section 18 in S. 398 does contain a provision that 
would complete the transition to phase-out the use of mercury vapor 
outdoor lighting which was begun with provisions in the Energy Policy 
Act of 2005 that prohibit the manufacture or importation of mercury 
vapor ballasts. There are several more efficient technologies to 
replace mercury vapor that benefit consumers. NEMA supports these 
provisions.
    Outdoor lighting consumes over 178 TWh according to Navigant 
Consulting (data from 2007), the equivalent output of about 17 nuclear 
plants (1200 MW) or 34 coal-burning plants. Stated another way, 
approximately 22 percent of all the electricity generated in the United 
States is used for lighting, and outdoor lighting represents about 20 
percent of that total. So, new federal standards, together with 
exterior lighting controls, would result in lowering energy bills while 
providing users with good quality lighting.
Section 21--Electric Motor-Driven Systems Assessment
    Section 21 of this legislation is a requirement for the Department 
of Energy to conduct a motor market assessment and commercial awareness 
program. NEMA represents all of the major electric motor manufacturers. 
Electric motors convert 65-70% of the electrical energy used in 
commercial and industrial applications into mechanical energy used to 
drive pumps, fans, compressors, blowers, and material handling 
equipment. The Market Assessment objectives are to develop a detailed 
profile of the current stock of motor-driven equipment in U.S. and 
survey how the installed base of industrial horsepower motors is broken 
down. This updated assessment will support future legislative, 
regulatory, and voluntary programs aimed at increased adoption rate of 
motor systems offering greater energy efficiency. Other items this 
study will accomplish are: characterize and estimate the magnitude of 
opportunities to improve the energy efficiency of industrial motor 
systems; survey how many systems use drives, servos and other higher 
technologies; how many systems use process control, by application 
category, pump, compressor, fan/blower, material handling. Furthermore, 
it will develop an updated profile of current motor system purchase and 
maintenance practices; how many companies have motor purchase and 
repair specifications, including company size, number of employees. And 
finally, it will develop methods to estimate the energy savings and 
market effects attributable to the DOE's Save Energy Now Program.
    In addition to serving DOE's program planning and evaluation needs, 
the market assessment is designed to be of value to manufacturers, 
distributors, engineers, and others in the supply channels for motor 
systems. It would provide a detailed and highly differentiated portrait 
of their end-use markets. For factory managers, this study presents 
information they can use to identify motor system energy savings 
opportunities in their own facilities, and to benchmark their current 
motor system purchase and management procedures against concepts of 
best practice.
Section 22--Study of Compliance with Energy Standards for Appliances
    NEMA strongly supports the need for a study of the appliance 
standards program and the level of compliance and enforcement of 
federal efficiency standards. Our industry has invested heavily in the 
federal program of efficiency standards, test procedures and product 
labeling, and are concerned about the levels of imported products that 
are not in compliance with federal requirements for certain federally-
covered products. For instance, in the case of federally-regulated 
integral electric motors, the U.S. industry members has raised concerns 
about equipment with non-compliant embedded motors coming into the 
United States which makes U.S. original equipment manufacturers that 
build products here uncompetitive and costs jobs. The study will be 
valuable in making recommendations on how our enforcement regime should 
be structured in light of today's global competitive environment, and 
how the DOE and the Customs and Border Protection bureau of the 
Department of Homeland Security coordinate enforcement on imported 
products that must meet federal efficiency requirements.
    We also suggest that the General Accountability Office (GAO), in 
coordination with the Department of Energy, be involved in conducting 
the study of compliance, compliance options, and enforcement.
Section 23--Study of Direct Current Electricity Supply in Certain 
        Buildings
    The potential energy savings from the implementation of a DC 
electricity supply for individual buildings could be significant on the 
basis of elimination of the multitude of individual power supplies used 
for various information technology, audio-visual and other devices. Use 
of a centralized DC electricity supply would require major investment 
in new wiring devices (to prevent misconnection with existing systems), 
installers would need to establish new practices, and rules for safe 
use would need to be developed. The most practical use would be for new 
construction or major renovation, as separation of these circuits from 
the installed alternating current wiring must be maintained. A study 
would be highly beneficial to identify the key considerations and 
limitations for implementation of direct current electricity supply.
Section 24--Technical Corrections to EISA
    Mr. Chairman, since the passage of the Energy Independence and 
Securities Act of 2007 (EISA 2007), several items have been identified 
that warrant ``technical correction'' to address implementation issues 
and obtain clarification. Since the passage of EISA, NEMA has been 
working closely with various stakeholders, several of which are 
testifying today, in obtaining a consensus agreement on a technical 
corrections bill. We have agreed on a package of non-controversial 
corrections and we urge consideration of inclusion of a technical 
corrections package as part of this legislation. Several of these 
corrections are critical in nature. For instance, the EISA 2007 
electric motor provisions came into force on December 10, 2010, yet the 
corrections needed to guide the Department of Energy and the industry 
on product coverage and requirements have not been enacted into law. We 
urge prompt action in this regard.
           certain incandescent reflector lamps (light bulbs)
    NEMA manufacturers and environmental advocates have also come to a 
consensus agreement on updated language for the consideration of a 
Department of Energy rulemaking on certain reflector bulbs and 
consideration of a new metric for measuring energy efficiency of 
reflector bulbs. This is an updated agreement from what was in Section 
18 of S. 3924 in the 111th Congress. We ask that the Committee include 
this consensus agreement into S. 398 at the next opportunity.
    The consensus agreement language proposed would read as follows:

          STANDARDS FOR CERTAIN REFLECTOR LAMPS.

                  Section 325(i) of the Energy Policy and Conservation 
                Act (42 U.S.C. 6295(1)) is amended by adding at the end 
                the following:

                  ``(9) REFLECTOR LAMPS.----

                          (A) In conducting rulemakings for reflector 
                        lamps after January 1, 2014, the Secretary 
                        shall consider:

                                  ``(i) incandescent and non-
                                incandescent technologies; and
                                  ``(ii) a new energy-related measure, 
                                other than lumens per watt, that is 
                                based on the photometric distribution 
                                of those lamps.
                           federal preemption
    A fundamental tenet of the Energy Policy Conservation Act, as 
amended, is the significant and longstanding principle of express 
federal preemption respecting energy efficiency standards. The twin 
cornerstones of the ``comprehensive national energy policy'' enacted by 
Congress in 1975 to implement EPCA (S. Conf. Rep. No. 94-516 at 116 
(1975)) are:

          1. The establishment of national standards for energy 
        efficiency, testing and information disclosure for ``covered 
        products,'' and
          2. Express Federal preemption of State laws and regulations 
        respecting energy efficiency standards, testing, and 
        information disclosure for those covered products.

    The exceptions to Federal preemption were intentionally narrow: (a) 
State petitions for waivers required that States show there were 
``unusual and compelling State and local interests'' that were 
``substantially different in nature and magnitude from those of the 
Nation generally,'' so that achieving the waiver would be difficult; 
(b) State procurement standards would be permitted; (c) and a narrowly 
drawn exception for State and local building codes that must meet seven 
requirements. NEMA supports the current federal and state preemption 
provisions.
    I mention these matters because as Congress considers improvements 
to the federal program, we need to ensure that resources are provided 
so that the agencies charged with administering the program are able to 
do so, and that the agencies use those resources effectively and 
efficiently. In the past, some have proposed weakening pre-emption 
because of missed deadlines, which ends up penalizing the manufacturers 
for government's lapse.
       Attachment.--S. 395 the ``Better Use of Light Bulbs Act''
    Mr. Chairman, we are pleased to present our views on S. 395 which 
would repeal Subtitle B of the EISA 2007 law. This would include repeal 
of the federal energy efficiency standards for general service light 
bulbs, repeal of federal efficiency standards for certain spot and 
floodlights (incandescent reflector bulbs), repeal of certain federal 
efficiency standards for metal halide lighting fixtures (used in 
industrial, commercial, and outdoor applications), repeal use of energy 
efficient lighting and use of Energy Star products in federal 
buildings, and repeal energy labeling of TVs, personal computers, and 
other consumer electronics products.
    The Lamp Section of NEMA represents 15 companies that sell over 95 
percent of the light bulbs (lamps) used in the United States. NEMA 
members are engaged in all the various light bulb technologies 
including incandescent (and halogen), fluorescent, and solid state 
lighting (light-emitting diodes, LEDs)--and serve all lighting 
application markets.
    Today, I would like to reaffirm our industry's support for public 
policies that encourage transitioning to more energy-efficient 
lighting, and specifically the energy-efficient light bulb provisions 
in EISA 2007. Lighting use in the U.S. consumes 20-22 percent of all 
electricity generated. Approximately 40 percent of the electrical 
energy consumed in an office building is from lighting use, and about 
12 percent of residential electrical energy is for lighting.
    First, let me emphasize a common misunderstanding with the EISA 
2007 provisions. They do not ``ban'' incandescent light bulbs, nor do 
they mandate the use of the common spiral compact fluorescent lamp 
(CFL). The EISA 2007 provision focuses on ``general service'' light 
bulbs and raises the efficiency standards of those bulbs. The standards 
do not cover a variety of bulbs including chandelier bulbs, specialty 
and appliance bulbs, or 3-way bulbs.
    Second, the EISA provisions reduce lighting energy consumption by 
reducing the connected load; that is ``watts.'' The law does this by 
setting a maximum wattage that any bulb can consume for a given lumen 
range (amount of light from a bulb, i.e, its ``brightness''). As a 
result of this approach, the lumen ranges in the law are consistent 
with consumer experience with today's standard general service light 
bulb categories of 100, 75, 60, and 40 watts.
    For example, consumers will still be able to purchase incandescent 
light bulbs, but instead of using 100 watts for 1600 lumens 
(brightness), the new advanced incandescent/halogen bulb only uses 72 
watts for the same amount and quality of light. This represents a 28 
percent savings in the connected load to the consumer. Similar savings 
will be achieved for 75 watt, 60 watt, and 40 watt bulbs in the lumen 
ranges that consumers are used to for those products. These 
incandescent bulbs can be dimmed just like today's inefficient bulbs, 
will fit the same sockets, and have the same shape and feel, and 
quality of light.
    The light appearance of these advanced incandescent/halogen bulbs 
does not differ from today's inefficient incandescent bulbs. Because 
features between newer incandescent/halogen technologies and old 
incandescent technologies are almost indistinguishable, there is no 
utility lost in replacing an inefficient incandescent bulb with a more 
effective incandescent.
    If a consumer wants greater savings, they can opt for a compact 
fluorescent lamp that provides the 1600 lumens (brightness) but uses 
only 25-26 watts. This represents a 75 percent savings in terms of 
wattage per bulb to the consumer. Additional advanced lighting products 
are also entering the marketplace such as high brightness LED bulbs 
which represent over 75 percent connected-load savings and very long 
lives. These LED bulbs are already appearing in the market in the lower 
wattage replacement areas (40 and 60 watt equivalent lumen ranges) 
today, and with further advancements into the higher lumen ranges in 
the next few years.
    My point is that the EISA 2007 provisions require manufacturers to 
reduce the electric power a light bulb uses in producing a certain 
output of light. The energy savings for the nation that EISA 2007's 
lighting provisions will generate are substantial, and the opportunity 
to conserve a substantial amount of energy should not be overlooked. 
There are and will be a wide variety of light bulb options for 
consumers, including incandescent/halogen, compact fluorescent, and new 
advanced technologies like high brightness LED bulbs. Maintaining and 
expanding consumer choice is a critical aspect of the EISA law.
    The law provides the transition to more energy-efficient light 
bulbs take place over several years. The EISA requirements for lumen 
output and wattage maximums start January 1, 2012 for the 100 watt bulb 
(changes to 72 watts maximum), January 1, 2012 for the 75 watt bulb 
(changes to 53 watts maximum), and January 1, 2014 for the 60 and 40 
watt bulbs (changes to 43 and 29 watts, respectively). EISA 2007 
permitted California to adopt the federal standards one year earlier.
    This multi-year transition was critical for manufacturers to have 
an orderly process to make the necessary capital investments, ensure 
suppliers of new raw materials, invest in new package designs, provide 
for safety testing and qualify the products. To repeal the EISA 2007 
provisions would strand millions of dollars of investments that the 
industry has undertaken in the last 4 years, not only for general 
service bulbs, but also reflector bulbs and metal halide lights.
    In addition, the multi-year transition provides time to undertake 
consumer education and outreach on the new lighting options by 
manufacturers, retailers, and other organizations. Further, 
manufacturers are including a new information label on light bulb 
packages to assist consumers in understanding and selecting the new 
lower wattage bulbs that provide the same quantity of light that 
consumer are used to. Industry has worked with the Federal Trade 
Commission to develop this new label and we are now moving forward with 
implementation. Industry has also developed educational information, 
such as the 12 ``5 Ls of Lighting'' brochure (attached to my 
testimony), websites like www.lightbulboptions.org, and point of sale 
information for retailers to use.
    When NEMA testified before this Committee in 2007 on the pending 
EISA legislation, we noted that a federal regime was crucial in 
addressing the lighting market transformation. A host of state 
legislatures stretching from Connecticut and Rhode Island, to 
California and Nevada were considering widely varied state regulations. 
If states had set light bulb standards, manufacturers would have been 
faced with conflicting state requirement and a patchwork of rules would 
have resulted in different light bulbs for different states. This would 
have driven up consumer costs and created significant marketplace 
confusion. The EISA 2007 prevents that from happening and ensures a 
national market for lighting.
    As an industry, the NEMA lighting manufacturers are committed to 
ensuring a smooth transition to more energy-efficient lighting that 
provides a continued choice of light bulb options for consumer 
selection. Our industry is investing heavily in research and 
development, innovation, and new products to meet consumers demand and 
interest for efficiency and light quality. More products are becoming 
available every day to fill the over 4 billion light bulb sockets in 
the United States.
                               conclusion
    In conclusion, NEMA supports the consensus provisions in S. 398 as 
outlined in my testimony, and we support the lighting efficient 
provisions in the Energy Independence and Security Act of 2007, and 
therefore oppose S. 395. NEMA members are committed to advancing the 
use and deployment of energy efficient technologies, and recommend the 
following:

          1. Support a petition process to amend current test 
        procedures, as needed (Section 6)
          2. Support provision to enhance marketplace compliance of 
        federal requirements (Section 17)
          3. Support the study on compliance and enforcement of the 
        appliance standard program, especially of concern with imported 
        products (Section 22)
          4. Support the Motor Assessment study and the study on 
        benefits and costs of Direct Current supply in certain 
        buildings (Sections 21 and 23)
          5. Support prompt action to enact the ``EISA 2007 Technical 
        Corrections'' package (Section 24)
          6. Support adding a provision on certain incandescent 
        reflector products
          7. Support EISA 2007 Subtitle B ``Lighting Efficiency'' 
        (Reject S. 395)

    Mr. Chairman, Ranking Member Murkowski and Members of the 
Committee, thank you very much for the opportunity to provide these 
remarks and recommendations to the Committee today on behalf of our 
industry.

    The Chairman. Thank you very much.
    Dr. Cooper.

   STATEMENT OF MARK COOPER, DIRECTOR OF RESEARCH, CONSUMER 
                     FEDERATION OF AMERICA

    Mr. Cooper. Mr. Chairman, members of the committee, I 
appreciate the opportunity to share our views on this important 
legislation.
    There are 4 primary reasons that the Consumer Federation of 
America has long supported energy efficiency standards for home 
appliances and other consumer products. Why we support S. 398 
and oppose S. 395.
    First, the energy efficiency standards are consumer 
friendly. They will produce direct pocketbook savings for 
consumers. That is the reduction in the monthly bills for 
electricity and natural gas, exceed the increase in the cost of 
the technologies needed to lower energy consumption.
    Second, the energy efficiency standards are technology 
neutral and pro competitive. The minimum efficiency standards 
establish a performance standard but do not dictate which 
technologies or how those standards should be met. Private 
sector firms compete around those standards in the marketplace 
developing technologies they think will meet the standard at 
the lowest price. The competition produces new goods and keeps 
costs down.
    Third, energy efficiency standards are the most effective 
way to correct the undervaluation of energy efficiency in the 
residential market. The U.S. needs to lower its energy 
consumption and consumers need to reduce their home energy use. 
But numerous imperfections in the marketplace prevent consumers 
and the Nation from getting to the optimum level of energy 
efficiency.
    Raising minimum efficiency standards lowers the supply side 
risk of investing in more efficient products. For manufacturers 
it helps the new products get to scale more quickly. On the 
demand side it addresses critical gaps in the consumer 
evaluation of, information about and motivation to purchase 
energy savings technology. It helps the market on both the 
supply and demand sides.
    Finally minimum standards for home energy consumption enjoy 
widespread public support. We've submitted a public opinion 
poll which show that 95 percent of the consumers think it's 
beneficial to lower their consumption. They know it's good for 
their pocketbooks. Almost 3 quarters support minimum efficiency 
standards.
    Our analysis which we have also submitted for the record of 
the market failures is absolutely critical. We've identified a 
range of imperfections in the marketplace that lead it to 
undersupply efficiency. The public perception and support for 
these standards is, in fact, consistent with the economic 
reality. Performance standards that are technology neutral and 
pro competitive are the ideal way to address many of these 
market imperfections. Especially and as long as the statutes 
require they are economically practicable and technically 
feasible.
    These standards are well within the frontier of what the 
industry can do which is why we've been able to hammer out this 
consensus agreement. So if you look at the marketplace and you 
see products that harm consumers. That are bad for national 
energy policy. That are bad for national security. You can get 
rid of them by a performance standard which is neutral and 
lowers the cost to consumers.
    A performance standard makes us all better off. That is why 
the public supports them. That is why this Congress should 
support them as well.
    Thank you.
    [The prepared statement of Mr. Cooper follows:]
   Prepared Statement of Mark Cooper, Director of Research, Consumer 
                         Federation of America
    Mr. Chairman and Members of the Committee,
    My name is Dr. Mark Cooper. I am Director of Research at the 
Consumer Federation of America (CFA). Formed in 1968, CFA is an 
association of some 300 non-profit organizations, working to advance 
the consumer interest through research, education, and advocacy. We 
greatly appreciate the opportunity to appear before you today to let 
you know of our support for S. 398, the Implementation of National 
Consensus Appliance Agreements Act of 2011 (INCAAA) and to urge 
Congress to reject efforts to repeal appliance efficiency standards 
already on the books, and in this instance, S. 395, the Better Use of 
Light Bulbs (BULB) Act. We also think it is useful to share our overall 
consumer perspective on energy efficiency standards for home appliances 
and other consumer products.
    We vigorously support the enactment of S. 398, the Implementation 
of National Consensus Appliance Agreements Act of 2011, to speed the 
adoption of appliance efficiency standards that were agreed to last 
year by manufacturers, efficiency, environmental and consumer groups, 
including CFA. We regret that the Senate failed to act on this non-
controversial legislation at the end of the last Congress. And, we urge 
Congress to reject efforts to repeal efficiency standards that are 
already on the books. We support cost-effective energy efficiency 
standards for all appliances and consumer products that consume energy 
in the home.
    It is noteworthy that in 2009, household expenditures on home 
energy, for electricity and natural gas, and other heating fuels, were 
$2,000, equal to household expenditures on gasoline for the first time 
ever. This cries out for decisive action by policymakers to support and 
promote increased energy efficiency standards on all fronts. Consumers 
and our economy will benefit.
    There are four primary reasons that we have long supported energy 
efficiency standards for home appliances and other consumer products.
    First, the energy efficiency standards are consumer-friendly. They 
will produce direct pocketbook savings for consumers. The reduction in 
the monthly bills for electricity and natural gas exceed the increase 
in the cost of the technologies needed to lower energy consumption. The 
homes in which consumers live will command higher resale because they 
are more energy efficient.
    Second, the energy efficiency standards are technology neutral and 
procompetitive. The approach to minimum efficiency standards in the 
INCAAA bill, as well as the earlier standards adopted by the Congress 
for lighting, establish a performance standard, but do not dictate how 
those standards are met. Private sector firms compete around those 
standards in the marketplace, developing the technologies they think 
will meet the standard at the lowest price. This competition produces 
new goods and keeps the cost down. Declining out of pocket energy 
expenditures allows consumers to spend more resources on other goods 
and services, which grows the economy.
    Third, energy efficiency standards are the most effective way to 
correct the undervaluation of energy efficiency in the residential 
market. The U.S. needs to lower its energy consumption and consumers 
need to reduce home energy expenditures, but numerous imperfections in 
the marketplace prevent consumers and the nation from getting to the 
optimum level of energy efficiency. Raising minimum efficiency 
standards lowers the supply-side risk of investing in more efficient 
technologies for appliance manufacturers and helps new products get to 
scale more quickly. They address critical gaps in the valuation of, 
information about, and motivation to adopt energy saving technologies.
    Finally, minimum standards for home energy consumption enjoy 
widespread public support, which makes an even more compelling case for 
S. 398, which includes several consensus agreements that are the 
product of a collaborative consensus building policy process. The 
public wants policy makers in Washington to work together to solve the 
nation's problems. When the representatives of the industry that 
produces the goods and proponents of energy efficiency including 
consumer groups, hammer out agreement on an important product attribute 
like energy efficiency, it would be foolhardy for Congress to turn its 
back on such a historic consensus.
    The industry and technical experts at today's hearing will testify 
to the sound economic and technological basis for these standards, with 
which we whole heartedly agree. So in my testimony, I will focus on the 
last two points above, beginning with public support and then turning 
to the analysis of the need for standards to correct market 
imperfections that lead to market failure. I have attached two 
appendices that contain detailed analysis of these two issues.
                             public support
Appliance Energy Efficiency and Standards
    The Consumer Federation of America has recently conducted a 
national random sample public opinion poll on home energy consumption 
and minimum efficiency standards for appliances. My analysis of the 
results is attached to this testimony as Appendix A.* We find that the 
public overwhelmingly recognizes the benefits of energy efficiency in 
the home and supports energy efficiency standards.
---------------------------------------------------------------------------
    * Appendix A has been retained in committee files.
---------------------------------------------------------------------------
    Specifically, we found:

   Nearly all Americans (95%) think it ``beneficial for 
        appliances like refrigerators, clothes washers, and air 
        conditioners to become more energy efficient,'' with 78% 
        believing this increased efficiency to be ``very beneficial.''
   Nearly all Americans (96%) think improved appliance 
        efficiency is important for personal financial reasons--
        ``lowering your electric bills''--with 80% considering this to 
        be very important. However, large majorities also believe 
        improved appliance efficiency to be important for environmental 
        reasons--because it reduces the nation's consumption of 
        electricity ``to reduce air pollution'' (92% important, 77% 
        very important) and ``to reduce greenhouse gas emissions'' (84% 
        important, 66% very important).
   Substantial majorities also favor improved energy efficiency 
        of appliances even when this increases the purchase price of 
        appliances. This support predictably varies with the payback 
        period: 3 years (79% favor, 35% favor strongly), 5 years (73% 
        favor, 32% favor strongly), and 10 years (60% favor, 29% favor 
        strongly).
   Only about two-thirds of Americans (68%) are aware that the 
        ``government requires new appliances like refrigerators, 
        clothes washers, and air conditioners to meet minimum energy 
        standards.''
   Respondents who are aware of the minimum standards are more 
        likely to support them (74% to 64%).
   But nearly three-quarters of Americans (72%) support ``the 
        government setting minimum energy efficiency standards for 
        appliances,'' with strong support from 28%.

    We believe this is very compelling data that demonstrate clearly 
consumer desire and support for cost-effective energy efficient 
products.
Other Surveys on Efficiency
    Our recent survey focused on appliance efficiency and minimum 
energy efficiency standards. There are other products that consume 
electricity in the home--lighting in particular--and other programs 
that provide incentives for energy efficient purchases. Recent public 
opinion polls by others have addressed these products and policies, and 
they yield similar results, which are worthy of mention.
    Two recent polls address the issue of lighting. A USA poll found 
that 61 percent of respondents thought the law that raised efficiency 
standards was a good law. These parallel the findings of our appliance 
efficiency survey. A study by Sylvania found that when respondents were 
asked about the transition to more efficient light bulbs, twice as many 
said they are ``excited. . . because Americans will use more efficient 
light bulbs,'' as said they are ``worried. . . because I prefer using 
traditional light bulbs. Younger respondents and those who had heard 
about compact florescent lights were more likely to say they were 
excited. This parallels our demographic and awareness finding.
    A study by Consumers Union asked people who had purchased a more 
efficient appliance what motivated them: 74% said saving money, while 
49% said the environment. This parallels our findings on the perceived 
benefits of appliance standards. Awareness of utility rebates for 
energy efficient appliances and for retiring inefficient appliances was 
67%, which is quite close to the 68% awareness of appliance efficiency 
standards in our survey.
    CFA has conducted extensive polling and analysis of fuel economy 
standards that yields similar results. Levels of support for the 
general concept of fuel economy standards are in the range of 60% to 
70% and in the most recent survey, 59% of respondents supported a fuel 
economy standard of 60 miles per gallon for 2025. Payback periods are 
consistently the greatest concern, as is the case in the appliance 
survey. Payback periods for fuel economy investments of five years are 
viewed favorably by a large majority of respondents (73%) as they are 
for appliances (73%).
Broader Public Opinion
    Some may feel that these findings fly in the face of broad public 
sentiment about the role of government. That is not the case at all. 
When the public is asked about specific actions that protect consumers 
or promote the public interest, they are quite supportive across a 
surprisingly large number of areas of economic activity. Public opinion 
polls show that 70 percent or more of the public wants the government 
to do as much or more with respect to distracted driving, food safety, 
fuel economy, privacy, oil drilling, the environment, and financial 
services, as well as energy efficiency.
    In general, we find that the more deeply we delve into the specific 
areas, the higher the public support becomes. Our research shows that 
there is a consistent, significant positive correlation between 
perceived benefits and support for standards. We find that the more 
people know about energy consumption, the more they support the 
standards. When we explore the relationship between industry 
performance and standards, we find that support grows where respondents 
think the industry has not done a good job.
Standards are an Effective Response to Market Imperfections
    Our analysis of the ``energy efficiency gap'' shows that the public 
perception of energy efficiency and the support for efficiency and 
standards is well-grounded in market reality. Our analysis of the 
energy efficiency gap identifies a number of market imperfections that 
cause the market to undersupply energy efficiency. Appendix B,* which 
was prepared for a proceeding on motor vehicle fuel economy standards, 
provides a detailed analysis of the causes of this market failure and 
why minimum performance standards are an ideal policy to address these 
market imperfections and ameliorate the market failure. The public 
attitudes and perceptions we find in surveys reflect the reality that 
consumers face in the marketplace. They understand that the marketplace 
does not produce the optimum level of investment in energy efficiency.
---------------------------------------------------------------------------
    * Appendix B has been retained in committee files.
---------------------------------------------------------------------------
    As described in great detail in Appendix B, economists and policy 
analysts with very different perspectives have identified a couple 
dozen causes of market failure when it comes to energy efficiency. In 
our analysis, we have grouped these into five broad areas----

   Societal issues where important values are not well 
        reflected in market transactions: e.g. consumption and 
        production externalities, national security values and 
        environmental impacts.
   Structural conditions that result in inefficient outcomes: 
        scale problems, bundling of multi-attribute products, product 
        cycles, lack of availability, lack of experience with new 
        products.
   Endemic tendencies of economic relationships that undermine 
        key market functions: e.g. agency issues (e.g. landlord-tenant, 
        builder-buyer), asymmetric information, first cost sensitivity.
   Transaction costs create frictions that impose costs and 
        constrain exchange: e.g. sunk costs, new product risk & 
        uncertainty, imperfect information.
   Behavioral, psychological and other human traits that bound 
        ``maximizing'' actions, e.g. motivation, difficulty of 
        calculation and discounting (projecting future energy 
        consumption and prices).

    These imperfections drive the market to an equilibrium at which the 
nation consumes far more energy than is economically efficient or 
socially desirable. Some analysts blame the market outcome on consumers 
and interpret it to mean that consumers apply an irrationally high 
discount rate to energy efficiency investments. We reject that claim.
    The discount rate implicit in consumer purchases reflects the full 
range of market conditions on both the supply-side and the demand side. 
In fact, there is frequently a separation between the builder or 
purchaser of buildings and appliances and the user. Demand is most 
directly determined by producers (landlords and builders) not 
consumers. Even when they do consider efficiency investments, consumers 
may not find the more efficient appliances to be available in the 
marketplace. Purchasers may prefer less efficient products because they 
have lower first costs and are more familiar. Suppliers may not stock 
efficient appliances and may not install them properly, as it requires 
different skills or considerations. Thus, the marketplace may offer an 
inadequate range of options to consumers in many instances. Consumers 
and producers both exhibit a first cost bias. Individual firms have 
little incentive to invest in basic research or to deploy enabling 
technologies because they have difficulty capturing the gains. To be 
sure, there are imperfections on the consumer side as well. Consumers 
are not well-informed and are unprepared to conduct the appropriate 
analysis. They lack the information necessary to make informed choices 
and perceive differences in quality and the availability of options 
that may be based on inertia more than reality.
    Performance standards that are technology neutral and 
procompetitive are an ideal way to address all of these imperfections, 
as long as the level chosen is well within the frontier of what is 
economically practicable and technologically feasible. The fact that 
industry and efficiency, environmental and consumer advocates have 
agreed on the level of the standards in the consensus agreements 
contained in S. 398, the INCAAA bill, is a good indication that the 
standards meet this basic criteria.
    The following market imperfections that cause the appliance market 
to provide less efficiency than it should are addressed by performance 
standards:
            SOCIETAL FAILURES                       ENDEMIC FLAWS                     TRANSACTION COSTSExternalities                              Agency                           Sunk Costs, Risk
Information as a public good               Asymmetric Information           Risk & Uncertainty
                                           Moral Hazard                     Imprefect Information 
           STRUCTURAL PROBLEMS                  BEHAVIORAL FACTORSScale issues                              Motivation
Bundling                                  Calculation/Discounting
Cost Structure
Product Cycle
Availability

    We hope you can appreciate the numerous reasons why the Consumer 
Federation of American supports appliance energy efficiency standards 
and their benefits to consumers. We believe S. 398, the INCAAA bill, 
should be adopted, and can't see any reason why it shouldn't be. The 
legislation will strengthen and improve energy efficiency for a wide 
range of consumer products. We also believe that the current standard 
for lighting products should be kept in place and that S. 395, the BULB 
Act, should be rejected. Our analyses have shown that consumers will be 
better off, and public opinion polls have found that this is what they 
want.
    Thank you for this opportunity to share our views on appliance 
energy efficiency standards and legislation.

    The Chairman. Thank you very much.
    Mr. Brandston.

      STATEMENT OF HOWARD BRANDSTON, LIGHTING CONSULTANT, 
                        HOLLOWVILLE, NY

    Mr. Brandston. Chairman Bingaman, Ranking Member Murkowski, 
thank you for inviting me to testimony in support of S. 395, 
the Better Use of Light Bulbs Act.
    I'm a lighting designer with over 50 years experience. I've 
completed nearly 3,000 projects in approximately 60 countries. 
I am particularly proud of the work I did for my country. A 
short list of that work you might recognize is the U.S. 
Pavilion at Expo 70 in Japan, Women's Rights National Historic 
Park, Seneca Falls, Memorial for Women in Military Service at 
Arlington National Cemetery and the relighting of the Statue of 
Liberty.
    I'm here today to ask that you revisit a portion of the 
Energy Independence and Security Act of 2007 that provides for 
a de facto ban on traditional incandescent light bulbs. I 
firmly believe that the restrictions put on incandescent lamps 
will have a significant negative impact on almost every 
residence in our country. I believe how one lives in their home 
is a decision that rests with the occupant. Is not the purview 
of the government.
    I believe this violates the very principles upon which this 
Nation was founded. I, as a devoted citizen, am most proud of, 
our freedom of our choice and our personal lives. What disturbs 
me even more that the restrictions placed on incandescent lamps 
will not save enough energy, be worth the expense and the risks 
that every person in America will be subjected to.
    Some of the most knowledgeable people I know have begun to 
stockpile a lifetime supply of incandescent lamps to protect 
themselves from the need to use compact fluorescent lamps. The 
public at large does not understand these problems as these 
professionals do. Further the misleading claims made about the 
benefits of the lamp technologies that are touted as beneficial 
replacements seduce people to purchase these products.
    We have over 100 years experience using incandescent lamps. 
By comparison we have very little experience using the new 
light sources especially in residences. You will hear a wide 
range of statistical data of energy saved in comparative terms, 
in comparative terms, that give the illusion of saving energy 
in the environment. The plain truth is according to the Energy 
Information Administration only 3.6 percent of total energy is 
consumed by incandescent lamps.
    So you will save some portion of that miniscule number. But 
I ask when you enter everyone's home and subject them and their 
families to the potential list--the list of potential 
consequences that I will list is not worth it. I do not believe 
it is. I practice in those homes.
    Consider the following.
    One, lighting is not a product. It is a system designed for 
a purpose. This act separates one component of that system, the 
light source, and destroys the success of the final design.
    Two, although lamp manufacturers are developing new sources 
to compete with the incandescent lamp if they are so superior 
they should be able to complete in the open marketplace where 
price will be a factor. Alternative lighting to the 
incandescent lamp will have to be worth the price differential.
    The compact fluorescent lamp contains mercury. One gram of 
mercury will pollute a 2 acre pond. This 2007 light bulb 
standard brings a deadly poison into every residence in our 
Nation. The plastic lamp jacket warning is totally insufficient 
to protect the user. It is a cop-out to protect the 
manufacturer.
    Five, we do not have enough knowledge of the potential 
consequences of being continuously exposed to the 
electromagnetic fields compact fluorescent lamps emit. There 
are millions of people in this country with Lupus, an auto-
immune disease. Exposure to low doses of lights from these 
lamps causes a severe rash. There are over 100 auto-immune 
diseases.
    Currently--6, currently you come home and your old 
fashioned incandescent lamp provide a safe, flattering, 
comfortable scene. You can easily dim these old lamps and the 
light they emit becomes even more inviting.
    Seven, the compact fluorescent lamp does not dim well and 
the color of the light it emits deteriorates as you continue to 
dim it. You change the color of your furniture.
    If you do not install these lamps in appropriate fixtures 
they might cause a fire. Save energy by incinerating part of 
your house.
    Nine, the cost to retrofit your lighting to use these new 
light sources may be beyond the financial and technical 
capacity of most home owners.
    Ten, this standard sends jobs to China.
    I have a particular passion for saving energy. I was a 
member of the committee that wrote the first energy code for 
the USA in 1975. My contribution was the mathematical formula 
that set the upper power limit for lighting in that code. It 
was a performance based equation, not a product restricting 
simplistic equation. The Energy Information Administration 
noted by the year 2000 it cut the energy used for lighting to 
pre-1970 levels. It cut to less than half the energy used for 
lighting by 1990.
    The Energy Independence and Security Act of 2007 ignores 
the fundamentals of good lighting practice and intrudes on our 
ability to choose how we live. Please respect the privacy in 
our homes. Allow people their indispensible right to choose how 
they live and light their homes and eliminate the restrictions 
on the incandescent lamp.
    Thank you. I look forward to answering any questions you 
may have.
    [The prepared statement of Mr. Brandston follows:]
     Prepared Statement of Howard Brandston, Lighting Consultant, 
                            Hollowville, NY
    Chairman Bingaman and Ranking Member Murkowski, thank you for 
inviting me to testify today in support of S. 395, The Better Use of 
Light Bulbs Act.
    My name is Howard Brandston--I am a lighting designer with over 50 
years experience and have completed nearly 3000 projects in 
approximately 60 countries. I am particularly proud of the work I did 
for my country, the United States of America. A short list that of that 
work you might recognize includes: The US Pavilion, Expo 70, Japan; 
Women's Rights National Historic Park, Seneca Falls, NY; Memorial for 
Women in Military Service, Arlington National Cemetery, Washington DC 
and the relighting of the Statue of Liberty, New York City, NY.
    I am here today to ask that you revisit a portion of the Energy 
Independence and Security Act of 2007 that provides for a de facto ban 
on the traditional incandescent light bulbs. I firmly believe that the 
restrictions put on incandescent lamps will have a significant negative 
impact on almost every residence in our country. I believe how one 
lives in their home is a decision that rests with the occupant and is 
not the purview of the government. I believe this violates the very 
principles upon which this nation was founded and I, as a devoted 
citizen, am most proud of, our freedom of choice in our personal lives.
    What disturbs me even more is that the restrictions placed on 
incandescent lamps will not save enough energy to be worth the expense 
and the risks that every person in America will be subjected to. Some 
of the most knowledgeable people I know have begun to stockpile a 
lifetime supply of incandescent lamps to protect themselves from the 
need to use Compact Fluorescent Lamps. The public at large does not 
understand the problems as these professionals do. And further, the 
misleading claims made about the benefits of the lamp technologies that 
are touted as beneficial replacements seduce people to purchase these 
products. We have over 100 years experience using incandescent lamps. 
By comparison we have very little experience using the new light 
sources--especially in residences.
    You will hear a wide range of statistical data of energy saved in 
comparative terms that give the illusion of saving energy and the 
environment-the plain truth is--according to the Energy Information 
Administration--only 3.6% of total energy is consumed by incandescent 
lamps. So you will save some portion of that miniscule number. But I 
ask, when you enter everyone's home, and subject them and their 
families to the list of potential consequences I will list, is that 
worth it? I do not believe it is.
    Consider the following:

   Lighting is not a product--it is a system designed for a 
        purpose. This act separates one component of that system, the 
        light source, and that destroys the success of the final 
        design.
   Although lamp manufacturers are developing new sources to 
        compete with the incandescent lamp, if they are so superior 
        they should be able to compete in the open marketplace where 
        price will be a factor. Alternative lighting to the 
        incandescent lamp will have to be worth price differential.
   The Compact Fluorescent Lamp contains mercury. This 2007 
        light bulb standard brings a deadly poison into every residence 
        in our nation. The plastic lamp jacket warning is totally 
        insufficient to protect the user. It is a cop-out to protect 
        the manufacturer.
   We do not have enough knowledge of the potential 
        consequences of being continuously exposed to the 
        electromagnetic fields Compact Fluorescent Lamps emit. There 
        are millions of people with Lupus, an auto-immune disease. 
        Exposure to low doses of light from these lamps causes a severe 
        rash. There are over one hundred auto immune diseases.
   Currently you come home and your old fashioned incandescent 
        lamps provide a safe, flattering comfortable scene. You can 
        easily dim these old lamps and the light they emit becomes even 
        more inviting.
   The compact fluorescent lamp does not dim well and the color 
        of the light it emits deteriorates as you continue to dim it.
   If you do not install these lamps in appropriate fixtures 
        they might cause a fire. Save energy by incinerating part of 
        your home.
   The cost to retrofit your lighting to use the new light 
        sources may be beyond the financial and technical capacity of 
        most home owners.
   This standard sends lamp-manufacturing jobs to China.

    I have a particular passion for saving energy--I was a member of 
the committee that wrote the first energy code for the USA in 1975. My 
contribution was the mathematical formula that set the upper power 
limit for lighting in that code. It was a performance based equation--
not a product restricting simplistic solution. The Energy Information 
Administration noted that by the year 2000 it cut the energy used for 
lighting to pre-1970 levels. It cut in less than half the energy used 
for lighting by 1990.
    The Energy Independence and Security Act of 2007 ignores the 
fundamentals of good lighting practice and intrudes on our ability to 
choose how we live. Please respect the privacy of our homes, allow 
people their indispensible right to choose how they live and light 
their homes and eliminate the restrictions on the incandescent lamp.
    Thank You. I look forward to answering any questions you may have.

    The Chairman. Thank you very much.
    Senator Risch, we have already had a chance to ask 
questions of the first panel. We're now to the second panel. 
Did you want to start off the questioning here of the second 
panel?
    Senator Risch. I will, but I probably shouldn't.
    The Chairman. You can if you'd like.
    Senator Risch. You know, I wasn't here in 2007 when they 
passed this. But, you know, this is absolutely ludicrous. Mr. 
Brandston, you and I come from a different era, I guess.
    You know you look at the eagle of the United States. They 
wanted in my home to take over my health care. I mean, people 
in Idaho are just astonished that the Federal Government is 
telling them what kind of light bulbs they've got to put home. 
I mean, you know, where's this country gone? It's just--it's 
absolutely amazing.
    To me when I got here and I heard about this law and by the 
way this law was not well vetted out in public when it was 
passed in 2007. But when I heard that they were going to 
mandate. That they were going to put these mercury bulbs in 
every home in America, in every school, in every hospital and 
everything else. Has anybody looked at the EPA recommendations 
put out January 25, 2011, as to what you do if one of these 
mercury light bulbs break in your home?
    I mean, in Idaho we've had a number of instances where 
they've had a mercury spill in a science laboratory or 
something in the laboratory in the school. They immediately 
close the school down for, I don't know, a number of days while 
they clean it up. Can you imagine mercury bulbs throughout a 
school?
    I mean, any time a kid wants a day off he's going to break 
a mercury light bulb. That's going to shut that school down. If 
they don't they're going to have trouble with the EPA according 
to what has to happen to clean it up.
    So, in any event I think--you know, Dr. Cooper, I heard you 
use the term--I forgot the exact term you used, anomalies in 
the marketplace or something. What was the term you used on?
    Dr. Cooper. Imperfections.
    Senator Risch. Imperfections, yes. Whenever I hear about 
imperfections in the marketplace I hate hearing that because 
I'm a free market guy, an open market guy. But the only thing 
that troubles me more than imperfections in the marketplace is 
the government trying to fix it because I guarantee you that is 
not going to happen.
    In any event those are all the questions I have. Thank you, 
Mr. Chairman.
    The Chairman. That's an interesting set of questions.
    [Laughter.]
    The Chairman. Let me ask a couple of questions.
    I think there's a basic confusion here. I think some of the 
witnesses have tried to clarify it. But the law that was passed 
in 2007 does not mandate the use of compact fluorescent light 
bulbs. At least that's my understanding.
    It does not require that. It sets minimum efficiency 
standards for lighting. Then it leaves it up to the 
manufacturers to determine what technology to use.
    In fact I thought I heard a couple of witnesses here 
describing incandescent light bulbs that met the standard. That 
were available for purchase. Mr. Pitsor, maybe you could 
respond and tell me if I'm right or if I'm wrong about my 
understanding.
    Mr. Pitsor. Thank you, Mr. Chairman. The EISA 2007 
provisions again, do not mandate CFLs. They do not ban 
incandescent light technologies.
    As you describe the standards set a performance requirement 
that for a given amount of light output from a bulb. There's a 
maximum wattage that that bulb can consume to produce that 
light. So instead of 100 watts being used to produce the 
brightness of 1600 lumens we now have advanced incandescent 
technologies that produce that same amount of light using only 
72 watts, meaning 28 percent fewer watts, meaning a 28 percent 
reduction in the cost of that bulb to the consumer in terms of 
their light--their energy bill.
    So there's an incandescent technology that's available 
today. It's available from 3 manufacturers today and more 
coming that are on sale in California because as mentioned 
earlier California adopted these same Federal standards 1 year 
earlier that was provided for in the legislation. Those bulbs 
are now available for sale in California. Will be available 
nationwide starting January 2012.
    The Chairman. Yes, Dr. Cooper, did you have a comment on 
that?
    Mr. Cooper. I'm sitting here and there's a certain sense in 
which this kind of performance standard, technology neutral and 
pro competitive is the perfect example of how you do this 
right. I'm sitting here with 4 or 5 different approaches to 
light bulbs by every manufacturer who are going to get out 
there and compete. If dim ability is so important than that 
incandescent which meets the standard will win in the 
marketplace. This statute has not done anything to tilt that 
playing field.
    At the same time the question of why we should dare to 
think about establishing a minimum performance standard is 
there's a fundamental, philosophical difference, no doubt. Some 
people think we never should have put seat belts in cars. When 
private behavior kills people this society has had the good 
sense to say we're going to take some behaviors and move them 
out of the marketplace. There's a different philosophy here.
    Every person who is alive today because we adopted a seat 
belt law or an air bag standard speaks to the value and the 
correctness of making these kinds of decisions. But do it 
right. I'm a firm believer in the marketplace. But where there 
are places the marketplace won't solve it, you do it right and 
you get this. In a few years all of these complaints will 
disappear exactly because we unleashed this competition.
    The Chairman. OK.
    Mr. Brandston.
    Mr. Brandston. Lighting is a little more complex than that, 
unfortunately. This is a very simplistic approach. Certainly 
the product standards, I'm all for things like that. But 
lighting is a system.
    When you look at the amount of money that's been 
advertising pushing compact fluorescent lamps today, we're 
pushing danger in our homes. We're pushing illness. We're 
pushing potential fires, etcetera, because that is the main 
thrust technology that people are focusing on.
    The new high performance incandescent lamps which are--
which have not really been examined in total. I'm a person who 
put hundreds of millions of sockets out there, right? I put 
millions of dollars worth of lights in buildings, homes across 
the world. These lamps may not work in those fixtures.
    I've got millions of sockets out there. The light center 
length of these may not--and the basic ratio of the scale of 
the lamp, may not work. So you're going to ask all these places 
to refit their lighting. The energy cost of refitting that 
lighting is a technological mess.
    So if we let the marketplace just do its job when new 
projects come along we won't be specifying standard 
incandescent lamps. We will be specifying the new products with 
the fixtures that are made to use them. We won't be putting 
hazards everywhere else when people try and retrofit some of 
these things into improper fixtures and ones that won't give 
the right light distribution.
    If you notice the light center length is perfect. The light 
fixture doesn't work. So it's a system.
    We have to respect that system. What this standard does is 
ignores it totally. It focuses on one third of the components 
of the lighting system. That is why it should be withdrawn and 
let the marketplace do it. Let--believe me the professional 
designers will not be specifying the old lamps.
    The Chairman. Let me just ask--I mean, my understanding is 
if the new products that are being manufactured in accordance 
with these standards don't work they're not going to be--
consumers aren't going to be buying them in any great numbers. 
I assume that there's a self interest on the part of the 
manufacturers in putting products on the market that actually 
work. Am I missing something here?
    Mr. Pitsor.
    Mr. Pitsor. Mr. Chairman, when the bill was passed in 2007 
it provided a phase in period for that exactly for the reason 
you indicated in terms of making sure that the manufacturers 
undertook the investment and the testing of these products and 
the qualification of these products to make--to meet safety 
standards and performance standards and to ensure that 
interchangeability. These are the same basis. They're the same 
shape. They fit in the same sockets, in the same fixtures as 
today's incandescent bulb.
    So there's interchangeability to ensure consumers have 
choices. Ensure that consumers have good products. That's all 
what the manufacturer has been focused on over the last 3 
years.
    The Chairman. I'll just make the other point that I think 
should be obvious. There's nothing retroactive about any of 
this legislation. I mean, this is----
    Mr. Pitsor. Right.
    The Chairman. In the future we're trying to specify the 
minimum standards that we want products to meet if they're 
going to be sold in the marketplace. But there's nothing 
retroactive that puts the pressure on a consumer to retrofit or 
change out or anything else.
    Senator Risch. Mr. Chairman.
    The Chairman. Senator Risch.
    Senator Risch. Mr. Pitsor, what's the cost of the one in 
your right hand and what's the cost of the one in your left 
hand?
    Mr. Pitsor. The 100 watt today runs about 25 to 50 cents 
initial cost. Then operating it over its life times, you know, 
12 or 13 cents per kilowatt hour over its life at 100 watts. 
Probably operating cost is probably $11 for its life.
    The new incandescent advanced halogen product costs about a 
$1.50 to $2. They're just coming onto the market, so initial 
price is somewhat higher. But over its life you're saving 28 
percent in wattage, 72 watts or 70 watts. So the cost over life 
is about $8.
    So you're saving about $3 that you get to keep in your 
pocket times every socket you have in your home when you do 
this conversion.
    Senator Risch. I gather you're the frame of mind that the 
American people aren't smart enough to figure this out in the 
marketplace?
    Mr. Pitsor. Part of the information is--well part of the 
challenge is providing consumer information on those choices. 
That's part of the transition as well. The new lamp label is 
going to provide the information on the total operating cost of 
these new bulbs.
    Senator Risch. I don't disagree with that at all. But I 
guess a free people should be able to make that decision 
without the government saying you will put this kind of a bulb 
in your home. You can't sell the other kind.
    I guess we just have a basic philosophical difference on 
that. Is that--would that be a fair statement?
    Mr. Pitsor. We've seen, you know, over the last and 
mentioned in earlier testimony, the last 4 or 5 years consumers 
increasingly moving toward more energy efficient products.
    Senator Risch. More power to them.
    Mr. Pitsor. This will further accelerate that move in terms 
of providing them more money they can keep in their pocket 
because they're very conscious about energy costs.
    Senator Risch. OK. Thank you, Mr. Chairman.
    The Chairman. Senator Murkowski.
    Senator Murkowski. Thank you. It's interesting listening to 
the discussions going back and forth and whether or not we have 
choice in what we put in our home. You've held up a couple 
different choices. Clearly cost is a factor. As families look 
to their purchasing decisions, that is something that is out 
there.
    I was just sitting here thinking, what has been taken off 
the market in my adult life that I really liked, that I now 
don't have a choice to buy. I'm going to date myself here, but 
I really liked the eight track cassettes.
    [Laughter.]
    Senator Murkowski. I can't buy them anymore. Does that mean 
that I have been denied the choice?
    Senator Risch. Madame Chairman, I would not that the 
Federal Government did not outlaw eight track cassettes.
    Senator Murkowski. They did not outlaw it. But Dr. Cooper, 
you have used an interesting analogy there with the standards 
that we have put in our vehicles. I think you probably can't 
purchase a vehicle today that doesn't have safety belts in it. 
Do we say that our choice is restricted or limited?
    These are different issues. But I think it's been a good 
discussion about what we have in play here. I want to ask the 
question though because there have been some good points that 
have been raised about the CFLs.
    I started off by saying that it buzzes and it flickers. I'm 
not so keen on the quality of the lighting. Mr. Brandston 
pointed that out as well.
    Several others have mentioned the mercury issue. But I 
would agree with some of the comments that the chairman has 
made as well: as the consumer is a more educated consumer, we 
make those decisions in terms of what it is that we want in our 
home. Whether it's the CFLs or the new incandescent. Mr. 
Pitsor, to you or to anybody else that wants to comment to 
this: what is the fate of the CFLs? Do they go by the wayside 
here?
    Mr. Pitsor then Mr. Brandston.
    Mr. Pitsor. You're right. Today's CFLs are probably the 
choice, the energy efficient choice that people are aware of. 
With the new incandescent halogens they'll become more aware of 
these products if they like incandescent technologies. Then 
down the road and what the industry is heavily investing in is 
the new LED bulbs.
    This is a paradigm shift in terms of lighting technology 
that's a solid state type product. Very long lives, 25,000 hour 
life, producing high quality light. I think this is where we're 
seeing the investment taking place and the job growth is taking 
place in these new advanced technologies rather than CFLs.
    Senator Murkowski. Mr. Brandston and then Mr. Nadel.
    Mr. Brandston. I think it's important to understand that 
all the statistics you're hearing do not come from practice. I 
made one of those decisions, you know, I live in a yes, dear, 
whatever you say, dear world. I put a large addition on my 
house thanks to my wife. But when I did it's all lighted with 
standard incandescent lamps, the lamp of choice for the moment.
    We've been tracking that. In the 14 years that that 
addition has been used, we've replaced 5 lamps. So in practical 
household use this 25 to 50 cent lamp has lasted me 
approximately 14 years, not how many hours the laboratory set 
up is.
    I work in a very practical world of designing. My whole 
focus is to please my client. I do not put things in their home 
that is not going to work.
    When we look at the future of LEDs we have not yet 
discovered all of the ramifications of that. The French have 
found that the output of these lamps is harming the vision of 
young children. Why don't we do any epidemiology studies on 
that?
    They contain arsenic and other poisonous materials. Why 
aren't we looking at that? Why don't we know that when you 
throw one of those CFLs in the trash the mercury changes to 
methyl mercury which is a deadly poison which if it gets into 
our water supply will be a danger?
    Why don't we know all of this? Why haven't we done that? 
There's nothing conclusive on this.
    So I, as an interested party, did a 57 page paper on the 
things, no conclusive proof, but that show that you need to do 
some research. This act was done in good faith by people 
wishing to save energy, wishing to worry about the environment. 
But losing sight of all the implications, the ramifications of 
what they were doing. We need time to do that.
    We, as I said in my talk, we have over 100 years experience 
with these very safe incandescent lamps. We do not have any 
experience with--we have a limited experience with these new 
technologies.
    Senator Murkowski. Mr. Nadel.
    Mr. Brandston. I think we should pass this S. 395.
    Senator Murkowski. Thank you, Mr. Brandston.
    Mr. Nadel.
    Mr. Nadel. Yes, I wanted to add a couple of points to this 
discussion. First there's been some discussion about the CFLs. 
I believe that there's over one billion of these in use around 
the world. So we do have a fair amount of experience.
    There's also the new incandescent bulbs we just talked 
about. In addition to the U.S. about a dozen countries also 
have similar types of laws several of which have already gone 
into effect. We're getting major experience in the tens of 
millions if not hundreds of millions of sockets.
    That's in the European Union and Australia and Brazil and 
Argentina as well as California. They're already in effect. So 
we do have a lot of experience with, you know. If the rule was 
you can't do anything unless you have 100 years experience, you 
wouldn't do very much.
    I wanted to make 2 other points.
    In terms of consumer choice. If we let consumers use the 
inefficient bulbs that means electricity use would rise more 
rapidly than it otherwise would. We'd need more power plants. 
New power plants, they've really gone up in price lately due to 
materials have gone up. Labor has gone up. That would raise 
electric rates more than they otherwise would.
    So it's not just a question of whether one consumer uses 
it. But if everybody uses it my power bills go up even if I 
don't use these less efficient lights. Likewise with air 
pollution, the extra power results in extra air pollution, you 
know, sulfur, nitrogen, oxides.
    The third point I'd make is actually the biggest source of 
mercury in our environment, human caused mercury is from power 
production. If you use conventional incandescent lamp, I 
believe EPA found that you would emit 5.5 grams of mercury into 
the atmosphere that then goes into the waters, can go into 
fish. We ingest it.
    With the CFL, and this is EPA data, there's only 1.6 
milligrams of mercury that goes into the environment. Most of 
that has to do with even a CFL results in some power 
production. There's, I think, 0.4 milligrams of mercury EPA 
found typically goes into the environment from the bulb itself.
    So it's not one has mercury, one doesn't. They both have 
mercury. Frankly the incandescent has more.
    Senator Murkowski. Thank you, Mr. Chairman. Thank you to 
the witnesses.
    The Chairman. I thank the witnesses. I think we've had a 
useful hearing here. We appreciate you all testifying and 
presenting us with your expert advice.
    Thank you.
    That will conclude our hearing.
    [Whereupon, at 11:21 a.m., the hearing was adjourned.]
                               APPENDIXES

                              ----------                              

                               Appendix I

                   Responses to Additional Questions

                              ----------                              

                                       Howard M. Brandston,
                                   Hollowville, NY, March 29, 2011.

Chairman Bingaman, Senator Murkowski et. al.
    Again thank you for the opportunity to testify on S395. I believe 
that this bill, if passed, without question will be of significant 
benefit to every person living in the United States of America.
    When I saw the list of people who would testify, I quietly said to 
myself, Howard, you should be proud as you are the only person to 
testify who has paid his own way to appear here today and that does not 
represent a group that has a significant vested interest.
    You would expect that energy advocates and lighting manufacturers 
would oppose S 395. The energy advocates support any legislative or 
regulatory requirement that would reduce energy use, putting aside 
every other feature regarding quality, performance, and importantly, 
economics, as they have done here. The manufacturers support 
legislative and regulatory requirements that dictate that consumers 
must purchase lamps they would never buy if they were given freedom of 
choice. This new 2007 Act might even require the relighting of 
everyone's home, including replacing all the dimmers they may have 
installed. Now they have no choice. It would be a true test if every 
congressman tried living in their homes with no incandescent light 
bulbs.
    What was presented in all the testimony, other than mine, is such a 
barrage of statistical data that it becomes meaningless. What continues 
to resonate very loudly, however, is the zealous nature with which they 
are steamrolling this issue and what they sidestep. Their message is 
delivered with a vehemence that is overplayed and worthy of pause and 
suspicion. Mercury is the issue that resonates on the street, and yet 
mercury is what the testifiers seemingly try to suppress. Other 
technologies, such as the so-called ``high performance'' incandescent 
are on the way and will naturally find their rightful place. Why then, 
the urgent rush to forcefully ``get rid'' (as per Cooper) of perfectly 
rational and useful products, to limit choice, promote personal peril 
and a host of other unknowns.
    In the entire prepared testimony only one single paragraph by 
Steven Nadel addressed the mercury in CFLs. NEMA's ``5Ls of Lighting'' 
brochure states, ``The bulb contains a small amount of mercury. 
Recycling is recommended.'' That is all NEMA had to say. Those who did 
bring mercury under scrutiny were the senators, particularly James E. 
Risch and Co-chairperson Murkowski. But then the issue is dropped.
    As in ``The Silver Blaze,'' where Sherlock Holmes solved the crime 
by noticing that the dog did not bark, I would consider the absence of 
all discourse on mercury irresponsible, highly suspect and key to the 
argument.
    While the numerical data put forth on this issue to enlighten, 
inform and otherwise aid in the considerations leading to best 
practices, there are so many numbers and they have been used as 
indiscriminate weapons in defending a position. There is little context 
and no sense of proportion. Most everything is projected and monetary 
impact is rendered subjective. For example, Kathleen Hogan's testimony 
includes the following:

          DOE projects that if S 395 were enacted, US primary energy 
        consumption would increase 21 quads and greenhouse gas 
        emissions could increase by more than 330 million metric tons 
        over the next 30 years.

    ``Primary energy consumption'' is based at the generating source. 
According to the DOE all this carbon tonnage can be avoided. Upon 
examination of that statement in combination with DOE figures utilized 
by the US Energy Information Administration, 21 quads of energy 
accumulated over 30 years amount to an increase of 0.018% in energy use 
for the US over the same time period. Hogan's figure of ``21 quads'' 
includes metal halide fixtures. Removing these yields an accumulated 15 
quads. For general service and reflector incandescent lamps, the Bulb 
act would then contribute 0.013 % to US energy use over the next three 
decades. That has the same impact over 30 years as saving $1.44 a month 
out of a budget of $4000.00 per month.
    Startling, yes? Lifting the hood on this reveals something so 
convoluted that we do not know whether the numbers are correct or at 
all meaningful. Even if I am off by a magnitude in the above, the 
contribution of incandescent is trivial, even less so over the long 
haul. And this is only one example worthy of further examination.
    Additionally, the Hogan testimony states,

          Energy saving options from efficient incandescent bulbs to 
        CFLs to LEDs can be found on the warm side of the spectrum, 
        providing the same light as less-efficient bulbs.

    We know this to be patently false. The spectral output of CFLs and 
LEDs is not the same as the general service incandescent. And there is 
no mention across the hearing that, owing to the suppression of the 
halogen cycle, the lifetime of halogen lamps can be reduced if they are 
dimmed for long periods of time.
    Further, the Maxwell School at Syracuse University claims that, 
among other factors, consumption is weighed more toward the price of 
energy than on available technology. Consumers attenuate their use 
based on how much they have to pay up front, and hypersensitivity to 
long term savings is a dream of academics and a useful concept wielded 
by bureaucrats.
    Layer by layer, these governmental agencies and lobbying groups 
have built a bee's nest of information. My point here is that there is 
plenty of ``evidence'' that standards can save some energy, but very 
little straightforward truth as to the magnitude of practical impact, 
and end results of such standardization. In fact, the results cannot be 
definitely known.
    The fact-ridden information provided by the Consumer Federation of 
America (CFA) is a generic send-up of efficiency standards of all 
types, perhaps retro-fitted to serve as a quick defense against the 
passing of S 395. The prepared testimony of Mark Cooper does not 
include one instance of the words ``incandescent'' or ``lamp.'' In 
fact, their ``market imperfection'' data was prepared for a proceeding 
on motor fuel, not lighting. ``Lighting'' is mentioned, but only in 
terms of the source type, as just another toilet or dishwasher to be 
regulated. Please refer to the hearing commentary of senator Paul Rand 
on S 398.
    Cooper began his verbal testimony stating that, ``Energy efficiency 
standards are consumer-friendly,'' and that, ``The homes in which 
consumers live will command higher resale because they are more energy 
efficient.'' He continued with, ``Efficiency standards enjoy widespread 
public support. Our opinion polls suggest that 95% of all Americans 
think it's beneficial to lower their consumption; they know it's better 
for their pocketbooks, and almost 3/4 support efficiency standards.'' 
However, their impression rests solely upon what survey subjects 
thought, not what they did. Subjects were asked questions of type. . . 

   Do you think it is beneficial..?
   In your view, how important is each of the following ..?
   If energy efficiency increased price but reduced the cost of 
        use, would you favor ..?
   Are you aware the standards ..?
   In principle, do you support or oppose ..?
   Do you feel the sum of the benefits ..?

    Dr. Janice Funk, Harvard lecturer and neuropsychologist of Whittier 
Rehabilitation Hospital in Bradford, MA, tells me that there is 
repeatedly a wide discrepancy Psychologists tell us there is wide 
discrepancy between what people say and what they do. As example, I 
have spoken with many current employees of the government, and with all 
the information at their fingertips, being intimately familiar with the 
issues and needs of this energy economy, most still do not buy CFLs. 
When faced with the choice in the aisle of their hardware store, they 
want three things:

          1. they want to pay less
          2. they want a light that's bright when they flip the switch, 
        with no warm up
          3. they want a light that doesn't make things look odd

    Though consumers will say they believe in energy efficiency, they 
will admit they purchase what they want at the moment of decision, and 
they want to pay less every time. Even though they are familiar with 
the promise of long-term savings, I have heard that what really matters 
most to them is the current moment and what their family will tolerate. 
Even though testimony repeatedly tries to personify the data with the 
demeaning term, ``pocketbook,'' humans are not motivated by long-term 
promises.
    Cooper goes on to say, ``Our analysis of the energy efficiency gap 
identifies a number of market imperfections that cause the market to 
undersupply energy efficiency. . .  Standards are the ideal way to 
address these market imperfections.''
    Senator James E. Risch rejoined, ``People in Idaho are just going 
nuts and they are astonished that the federal government is telling 
them what kind of light bulbs they have to put in their home. Where's 
this country gone? Dr. Cooper, what was the term you used? Cooper: 
Imperfections. Imperfections, that's right. Whenever I hear about 
`imperfections in the marketplace,' I hate hearing that because I'm a 
free market guy, an open market guy. But the only thing that troubles 
me more is the government trying to fix it. I guarantee you, that is 
not gonna happen.''
    In concluding, Cooper essentially stated, ``So, if you look at the 
marketplace and you see products that harm consumers . . . you can get 
rid of them by a performance standard that is neutral.''

   Is it ``neutral'' to flatly ``get rid'' of a product that 
        works perfectly?
   Why does supplying one product imply the forced obsolescence 
        of another?
   Would it not be a ``market failure'' to, in turn, under-
        supply the low-cost and safer lamp that consumers know?
   Ultimately, is it valid to use motor fuel data to propel the 
        wholesale removal of a simple and safe product from the market 
        of choice?

    The numbers are just that--numbers. And the plethora of numbers 
from all arenas (motor fuel data?) are being used to drive the words 
here, all funneling down to the emotive, ``empower consumers,'' 
``lighting choices,'' and the abasing phrase ``money in pocket.''
    The DOE is seeking to provide ``regulatory certainty'' for industry 
on the backs of the consumers they will sacrifice. It is a classic 
example of agenda-setting in the guise of stewardship.

   Senator James E. Risch went on, ``To me, when I got here and 
        heard about this law--and by the way, this law was not very 
        well vetted out in the public--that they were going to put 
        these mercury bulbs in every home, in every school in America, 
        in hospitals . . . has anybody looked at the EPA 
        recommendations put out January 11, 2011 as to what you should 
        do if one of these mercury light bulbs breaks in your home?''

    Cooper said, ``Public opinion polls show that 70 percent or more of 
the public wants the government to do as much or more with respect to 
distracted driving, food safety, fuel economy, privacy, oil drilling, 
the environment, and financial services, as well as energy 
efficiency.''
    And he is right. This is what the government has always done . . . 
except, in the case of the CFL, which is (counter to all their 
arguments) being promoted as the replacement to the general purpose 
incandescent. Regardless of the technology on the horizon, this is the 
technology of the moment. LEDs are too expensive, OLEDs do not exist 
and high-performance halogen will probably be out of the financial 
reach for people lighting an entire home. The CFL has its place, but it 
should not exclude the healthy choice.
    The difference between lighting and other appliances subject to 
regulation is that we did not evolve with dishwashers, battery chargers 
and set-top cable TV boxes. As the progeny of this planet, we evolved 
under sunlight, moonlight and alongside the incandescence of fire. As a 
species we are exquisitely tuned to light's qualities and rhythms on 
physical and neurological bases. From a cellular level upward, the 
light that envelops us steers our very existence, and to impose 
limitations upon how we choose to illuminate our personal environment 
carries biological ramifications that reach far deeper than the effects 
of a longer defrost cycle. Likewise, we did not evolve with mercury, 
which, in unnatural concentrations, frays our nervous system and 
attacks our brains as does Alzheimer's disease.
    If it is truly in the national interest to really reduce national 
energy use, there are ways to accomplish much better results by passing 
legislation regulating the energy use for heating, ventilating, and air 
conditioning (HVAC) and water heating systems. These systems use far 
more energy than lighting in both residential and commercial buildings. 
Pass a law requiring the use of ground source (sometimes called 
geothermal) heating and cooling systems and thus eliminating 
``conventional'' HVAC systems. These systems can be used in most, if 
not all buildings. This can be done by simply legislating and raising 
minimum energy performance for all HVAC systems, both new and 
replacement, such that all ``conventional'' systems now regulated by 
DOE can no longer comply. This is exactly the same approach used with 
lighting efficiency. However, the energy saved will be significant. For 
lighting the savings will be miniscule. The technology for HVAC is 
mature and reliable.
    Another measure is to pass legislation regulating the energy use 
for water heating systems. Pass a law requiring the use of heat pump 
water heaters and thus eliminating ``conventional'' water heating 
systems. This can be done by legislating and raising minimum energy 
performance for all water heating systems, both new and replacement, 
such that all ``conventional'' systems now regulated by DOE can no 
longer comply. These systems can be used in most, if not all new and 
existing buildings. This is exactly the same approach used with 
lighting efficiency. The technology is mature and reliable. Except the 
energy saved will be significant.
    These two measures would quickly save untold amounts of energy, and 
require little more government effort than already exists.
    The Energy Information Administration Estimates that 3.6% of energy 
is used for incandescent lamps. All the figures that were used in 
testimony were carefully crafted using only partial data to make the 
case for new technology look attractive. In fact, it is not.
    While current law de facto requires the use mainly of CFLs, you and 
the public should be aware that the energy and pollution ``savings'' 
are not nearly as much as being claimed. In fact, the energy used to 
manufacture these new products, their plastic packaging and shipping 
costs from China have never entered their equations. In some cases 
energy is wasted. Yet the opponents of S 395 never mention this, which 
is a scientific and engineering fact.
    In winter months, 44% of commercial buildings and 47% of 
residential buildings use electricity as the primary or secondary form 
of heating energy. In those buildings, the lesser amount of energy used 
by CFLs compared with incandescent lamps is replaced with electric 
heat, so there is little or no electricity, energy, or cost savings for 
the consumer. Yet the utility is required to now supply about 125% of 
the volt amps that were formerly used due to the low power factor of 
CFLs, which results in 25% more pollution from utility power plants 
than with incandescent lamps.
    No mention was made of the potential health and fire hazards use of 
CFls might be responsible for. Evidence is piling up daily from around 
the world that problems may exist. It is too early for conclusive 
numbers but is it worth the risk? Millions of people are stricken with 
Lupus and other autoimmune diseases. Many of these people are suffering 
from rashes, some quite severe. We may be promoting a product (the CFL) 
that is energy wasteful and simultaneously toxic. Is this worth the 
risk? Are we going to roll the dice and hope for the best in this quest 
to save some small amount of energy?
    If everyone is given the choice in how to light their homes the 
risks disappear. People will buy the products that best serve their 
needs, that are not a financial burden to them, and there will be no 
impact on the energy saved in this country.
  Responses of Howard M. Brandston to Questions From Senator Bingaman
    Chairman Bingaman Mr. Brandston, in your testimony you state that 
the EISA 2007 ``provides for a de facto ban on the traditional 
incandescent light bulb.'' There are energy-efficient incandescent 
bulbs available that meet the standard and they are virtually 
indistinguishable from the traditional incandescent bulb.
    Question 1. Why can't consumers who prefer incandescent bulbs, 
purchase the new more-efficient incandescent bulbs?
    Answer. The new ``more efficient'' bulbs cost significantly more 
than the standard bulbs. In many households this would be a hardship. 
The calculated savings projected over time would not be worth the 
immediate outlay of scarce dollars. Further the new sources will not 
work in many existing lighting fixtures--this could be a hazard and a 
waste of energy.
    Question 1a. If the BULB Act were to be enacted, then the Federal 
standards on incandescent bulbs would not come into effect. However, 
under the 10th Amendment of the Constitution, California would continue 
to have its standards and every other State would have the right to 
adopt energy efficiency standards for light bulbs.
    Answer. That is true. But if the rationale for passing S395 were 
properly publicized, the educated electorate and local legislators 
would amend their codes to closely reflect the Federal example if it 
was properly written.
    Question 2. Do you agree that it is less burdensome to business and 
the economy to have a single Federal standard rather than multiple 
state standards?
    Answer. I am not sure about that. I think this is a constitutional 
question on state's rights. There are many local building codes that 
meet the needs of the location and, to my knowledge, have not hampered 
business or trade.
    Question 3. Over three years ago Congress passed and President Bush 
signed EISA establishing the incandescent lamp standards with a 
starting date of January 1, 2012 for the 100 watt bulb. As a result, 
U.S. bulb manufacturers have made substantial investments to meet the 
new standards.
    Do you think it is fair to U.S. businesses to repeal a standard 
after they have made substantial investments to comply with that law?
    Answer. I believe that most lamp companies are always doing 
research and investing in new products to gain some market advantage. I 
know of several products that were developed that did not sell and they 
were written off as market research gone wrong. This de-facto ban is a 
marvelous bit of marketing for those companies--they had a product that 
wasn't selling as well as anticipated--now the government is banning 
the favored product.
  Responses of Howard M. Brandston to Questions From Senator Murkowski
    Question 1. What are the major differences between moving an 
appliance standard through the regulatory process and the legislative 
process?
    Answer. As I understand it--Two separate Government entities are 
working on the standard--the legislators are generally setting a goal, 
the regulators are setting a means of implementing that goal. When a 
Standard is developed by the Voluntary Standards Development Community 
it passes through a public review which does not bear the burden of 
meeting legislation, the only burden is to prove the standard serves 
the public at large.
    Question 2. How was consensus achieved on the proposed standards 
and how do you define ``consensus'' in this context? Was consensus 
achieved in 2007, as it relates to the new standards for the 
incandescent bulb?
    Answer. From my point of view--there was no consensus--this was a 
dictatorial process.
    Question 3. In your testimony you spoke of the negative attributes 
of CFLs. Do you have any opinions on the other technologies discussed 
at the hearing?
    Answer. The only other technology that I have concerns about are 
LEDs ( Light Emitting Diodes). They contain many components that are 
considered dangerous and have not had sufficient time to be tested in 
many applications. In lighting, for the most part, there are no bad 
products--just bad applications. The LED industry at first totally 
misrepresented their products. That should give most of us a cause for 
concern. A recent French research study states these products may have 
a damaging effect on infant's eyesight. More work has to be done on 
this before we put these light sources in every home.
    I have grave concern that there has not been any effort to alert or 
educate the public of any of the application negatives that have been 
piling up swiftly. The only effort expended so far has been to promote 
what I consider to be a toxic product that in truth does not save the 
energy.
    Question 4. How would the proposed new standards have impacted the 
various lighting work you have done over the course of your career?
    Answer. I cannot begin to estimate the harm that these new proposed 
standards would have done to my work. Many of my projects would not 
have been able to meet the needs of my clients. If you cannot provide 
what is necessary for a project to be successful you have indeed wasted 
energy and all the money invested. I have been fortunate to have been 
given about 3000 lighting design commissions in 60 countries. They 
would not have been able to receive the recognition they achieved under 
the new standards.
    I was fortunate to have started my career in the theater. There 
were no codes or standards for lighting in the theater. It just had to 
work. That simple dictum was amply illustrated on the relighting we did 
for The Statue of Liberty. It worked.
   Responses of Howard M. Brandston to Questions From Senator Portman
    Question 1. I think one of the largest barriers to wide-spread 
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it 
is pretty difficult with the tools available to us today to wrap your 
head around how much energy you use in a day or a year, and then it is 
even tougher to figure out how much a certain energy efficiency 
technology can eventually save you. I believe this uncertainty makes it 
hard for a consumer to commit to investing the upfront money in energy 
efficiency technology, and I think it is one of the reasons why so many 
get concerned when governments talk about mandates on energy 
efficiency. Simply put, the uncertainty leaves a lot of money on the 
sidelines. Do you agree? If so, what is the solution?
    Answer. Dissemination of truthful information and education is the 
key. The testimony given today was a good example of how data can be 
spun to create an impression of doing good while indeed that has not 
been the case. Some of that spin was mandated by the energy policy we 
now have in place. As people invest, based on this manipulated data, 
they find it has misled them--that sets up barriers to further 
investment--so who do you trust? If a family member suffers from a 
light induced ailment--what does that uninformed consumer do?
    We must have an education policy to accompany whatever technical 
strides we would like to achieve. The well informed investor can sort 
out the rest.
    Question 2. How do we develop metrics for consumers to base their 
decisions that is accurate across many different consumers, 
environments, and scenarios?
    Answer. When developing metrics for the average consumer--these 
must be developed by those who work directly with that consumer group 
in creating their lighting. This cannot be properly achieved by fiat/
mandate. A properly developed guideline will profit the user--all 
others will follow.
                             central issue
          Historically, the government of the United States has 
        advanced the quality of the American way of life by putting 
        safety above cost. They mandated taking lead out of paint, even 
        if that made the paint more expensive; they removed the 
        asbestos from our buildings; put more life boats on ships, and 
        so on, always knowing the safer product was, in the long run, 
        the better product for people. Many times over, these 
        improvements increased cost, but there was always the 
        underlying principle that in this country, human life and 
        health were worth more than money. Now, however, they would 
        like to turn that assumption on its head and needlessly promote 
        the introduction of mass amounts of a known toxin into the 
        environment by removing the alternatives--products with a long 
        history of safety and reliability--thereby, removing American's 
        freedom of choice.

    One could (rightly) argue that there have been many public 
awareness campaigns that have been highly effective, such as littering, 
forest fires, smoking, etc. Thus, claiming the average homeowner isn't 
going to consult the EPA to learn how to recycle and dispose of these 
lamps (even though they won't, as Risch says) will probably not gain 
much attention. From Senator Risch, above, ``. . .this law was not very 
well vetted out in the public; they were going to put these mercury 
bulbs in every home, in every school in America, in hospitals. . .'' My 
questions/comments to them would be:

   Do the proponents of EISA 2007 have the right to the right 
        to force every American to become a Hazmat worker?
   How you can you sit on Capitol Hill, while somewhere a 
        pregnant mother must clean up the mercury from a broken CFL in 
        her nursery?
   You can power an incandescent lamp with a wind turbine or a 
        solar panel. You can power a CFL or an LED with a coal-burning 
        generator. But when the lifetime of each is over, it's the 
        mercury-containing CFL that remains the bigger threat to the 
        environment.

    The above proponents have made jiggered attempts to personify their 
schemes through a juggernaut of numerical acrobatics, undemonstrated 
consumer behaviors and affable verbiage. But it all flys in the face of 
personal health and wellbeing, which really does strike sharply at the 
level of home and hearth. I would say that their points are now 
irrelevant. In the practical realm of things the urge to ban the 
general incandescent occupies very little in the way of priority in the 
current economic environment, even in context of the overall sphere of 
energy policy. And yet, proliferating the market with toxic, foreign-
made ``efficient'' product poses surprisingly far-reaching 
implications. They do not know what they do.
    The history of federal regulation, from Prohibition to Sarbanes-
Oxley to ethanol, to farm subsidies, to land management, to immigration 
quotas, to the progressive personal income tax, intervention and is 
replete with examples of intervention and unanticipated consequences, 
some regrettable in retrospect. DDT was supposed to lower the cost of 
farming and increase productivity. I think we can easily see that once 
you introduce something into the environment, it can prove very 
difficult, or impossible to remove. Truly, setting performance limits 
on the general incandescent could be the government's best idea since 
allowing DDT.
    The search for efficiencies is a natural function of free markets 
and applies to this industry's relationship with consumers as surely as 
it does (and has) with all others. There are no imperfections. Free of 
bureaucratic micro-management of the choices available to light the 
kitchens of America, industry will continue to develop the lighting 
products that compete side by side in the marketplace, and in all 
respects the best will reign by dint of consumer choice. In the effort 
to demonstrate tangible progress toward a national energy policy, the 
DOE and others are committing regulatory interference, and putting into 
question the long-term health and safety of the nation's citizens and 
our environment. In response, the BULB Act should be passed.
                                 ______
                                 
      Responses of Steven Nadel to Questions From Senator Bingaman
    Mr. Nadel, your summary says that consumer savings from appliance 
standards already in place will exceed 300 billion dollars by 2030, and 
that in 2010 these savings generated 340,000 net jobs in the U.S.
    Question 1. Would you please outline the analysis which resulted in 
this job creation estimate?
    Answer. To calculate the energy savings from standards, ACEEE used 
estimates of the energy savings from each more efficient product, 
annual product sales, average product life, and estimated market share 
of compliant products in the absence of standard. Estimates are based 
on DOE's rulemaking analyses where available, and other sources such as 
information from ENERGY STAR, appliance manufacturers, the U.S. Census 
Bureau, and utility energy efficiency evaluation reports. The benefits 
in dollars were calculated using Annual Energy Outlook 2010 prices. 
Costs for standards issued since 2005 and prospective standards were 
also compiled from prior ACEEE research\1\. For standards completed 
before 2005, costs were estimated using payback periods found in DOE's 
Technical Support Documents.
---------------------------------------------------------------------------
    \1\ Neubauer, Max 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 and Nadel, Steve, et.al, 2006. Leading the Way: Continued 
Opportunities for New State Appliance and Equipment Efficiency 
Standards (updated from A051). Washington, D.C.: American Council for 
an Energy Efficient Economy
---------------------------------------------------------------------------
    This job creation estimate is based on analysis using an ACEEE 
Input-Output economic model, which uses Input-Output coefficients 
published by IMPLAN. In order to calculate the employment impacts from 
these standards, we calculated the energy bill savings that are 
generated from decreased (more efficient) energy use as a result of 
each appliance standard, and the costs imposed from each standard 
(incremental cost of more-efficient appliances). The Input-Output 
analysis looks at the impact of these costs and benefits on consumers, 
manufacturers, contractors, retailers, utilities and fuel producers. We 
report net impacts on employment, as jobs are created in some sectors 
(e.g. construction, retail and services) and lost in others (e.g. 
reduced demand for coal and natural gas). Additional information on our 
methodology and results can be found in the full project report, 
available at http://aceee.org/research-report/a111.
    Question 2. Some argue that Federal regulation of appliance 
efficiency is inappropriate government intrusion in the marketplace. 
After 25 years of this program, what do you believe the impact of these 
regulations has been on your industry, on job creation, and on the U.S. 
economy?
    Answer. As noted in your first question, a recent ACEEE analysis 
has found that as a result of federal efficiency standard enacted in 
the past 25 years, consumers will save more than $300 million and more 
than 300,000 net jobs have been generated. We also found that 
efficiency standards increased total wages by about $10 billion in 
2010. Also, appliance standards have reduced U.S. energy use and peak 
electric demand. We estimate that in 2010, standards reduced 
electricity use by 291 TWh (7% of U.S. 2010 electricity use) and 3.58 
quadrillion Btu's of total primary energy use (3.6% of U.S. 2010 total 
use). Efficiency standards also reduced peak electric demand by 78,000 
MW, equivalent to the output of 260 power plants of 300 MW each. In 
addition to these macro economic effects, efficiency standards have 
helped to spur product innovation. As a result of standards 
manufacturers have ``sharpened their pencils'' and designed new high-
efficiency products with modest costs. Examples include improved 
refrigerators, clothes washers (more efficient and clean better, as 
noted in my response to question 5), dishwashers, air conditioners 
(residential and commercial) and light bulbs.
    Question 3. Mr. Nadel, what do you believe the short-term and long-
term impacts of enactment of the BULB Act would be nationally and in 
American households?
    Answer. The short-term impact is that manufacturers would continue 
to produce conventional incandescent light bulbs to complement the more 
efficient incandescent bulbs they recently brought to market. Sales of 
the more efficient incandescent lamps would be lower than they had 
planned (many consumers will stick with the cheapest bulb, not 
realizing how quickly more efficient bulbs pay for themselves) and 
manufacturers will need to scale back plans to produce the new lamps. 
Some manufacturers may have stranded investments as a result. However, 
California and Nevada would enforce standards they enacted before the 
federal standard was enacted, and likely additional states would 
regulate bulbs (several were considering such regulations before the 
federal standards passed). This patchwork of state standards would 
present challenges to manufacturers, distributors and retailers. One of 
the main reasons for national standards is so we can have a national 
market for products such as light bulbs.
    In addition, BULB would also repeal a variety of other sections in 
EISA, including provisions on reflector lamps (closing a loophole in 
the 1992 law that established reflector lamp standards), metal halide 
lamps (primarily used in factories, large commercial spaces, and 
outdoors), consumer information labels for televisions and other 
electronic products, and a program to improve lighting efficiency in 
federal facilities. Thus, BULB would reopen a major loophole in the 
1992 reflector lamp standards. Before EISA was passed, on the order of 
half of incandescent reflector lamp products sold were taking advantage 
of this loophole. The 2007 metal halide lamp standards removed the 
least efficient products from the U.S. market, although these less 
efficient products are still sold in many other countries. Repeal would 
provide an opportunity for inexpensive less efficient products to be 
imported into the U.S. We have not seen or heard any criticisms of 
these other provisions, but still the BULB bill would repeal them.
    In the medium-term, U.S. electricity use would be higher than is 
currently forecast as these standards have a significant impact on 
electricity use. In my testimony I noted that in 2007 when EISA was 
passed, ACEEE estimated that the provisions in Subtitle III B would by 
2020:\2\
---------------------------------------------------------------------------
    \2\ ACEEE. 2007. ``Energy Bill Savings Estimates as Passed by the 
Senate.'' http://www.aceee.org/files/pdf/fact-sheet/
EnergyBillSavings12-14.pdf. Washington, DC: American Council for an 
Energy-Efficient Economy.

   Reduce annual electricity use by 73 billion kWh (enough to 
        serve the annual electricity needs of 6.6 million average 
        American households);
   Reduce peak electric demand by more than 10,000 MW 
        (equivalent to the output of more than 30 power plants (300 MW 
        each); and
   Reduce consumer energy bills by more than $6 billion (about 
        $50 per American household annually).

    These benefits would be lost if the BULB bill is enacted.
    Also, the repeal of the lamp standards would likely make 
manufacturers reluctant to invest in new more efficient products if 
cheap incandescent lamps are still on the market. This would likely 
slow progress towards use of LED lighting in homes.
    Question 4. Mr. Nadel, certain provisions that were in the bill 
last year had to be pulled out because the passage of time required 
renegotiation.
    Would you briefly describe what provisions are being renegotiated 
and may be presented to the Committee as amendments in the coming weeks 
or months?
    Answer. As noted in my testimony, we have renegotiated the 
provision on reflector incandescent lamps relative to last year's bill 
and ACEEE and NEMA have jointly recommended a revised provision. The 
changes are due to the fact that DOE is likely this year to complete 
the first rulemaking on these products called for in this bill and thus 
we revised this provision to only apply to subsequent rulemakings. In 
addition, the outdoor lighting provisions from last year's bill have 
been removed because the underlying Illuminating Engineering Society 
(IES) technical standard is being revised. When this new IES standard 
is published, we anticipate re-examining and modifying last year's 
provision. IES's schedule is unclear and therefore we do not know the 
timing of our renegotiation. Finally, we are discussing possible 
updates to electric motor standards with manufacturers. Congress 
enacted revised electric motor standards in EISA 2007 that established 
``premium-efficiency'' levels for the most common products, somewhat 
lower ``high-efficiency'' levels for some less common products, and no 
standards for certain uncommon products. We are discussing whether 
additional product types should be subject to the ``premium-
efficiency'' standards.
    Question 5. Mr. Nadel, I assume that you have read the article in 
this Monday's New York Times entitled, ``When Energy Efficiency Sullies 
the Environment''?
    I'd appreciate your general views on the piece, and more 
specifically, your views on to the author's contention that improved 
energy efficiency can result in greater pollution, a paradox known as 
the ``rebound effect.''
    Answer. Yes, I have read that article. I would point out this was 
an opinion piece meant to provoke and was not intended to be a 
balanced, factual article. The author got a number of facts wrong. For 
example, the author alleges that Consumer Reports found that new 
clothes washers do not clean well. He also says that the improved 
efficiency washers now on the market are expensive. But as Consumer 
Reports noted in two recent blog postings on their Web site:

          Despite what gets printed in national newspapers, today's 
        energy-efficient washers are able to clean clothes. Take our 
        latest Ratings: a vast majority of top-loaders (76 out of 82 
        tested) scored ``good,'' ``very good'' or ``excellent,'' with 
        only 6 scoring ``fair'' or ``poor'' on wash performance. Front-
        loading washers generally performed even better, and many of 
        these washers were still relatively affordable, with several 
        costing between $550 and $650.\3\
---------------------------------------------------------------------------
    \3\ http://news.consumerreports.org/appliances/2011/03/forget-
greenwashing-nowadays-its-all-about-greenbashing-.html

          Tierney [the author of the NYT piece] also notes that back in 
        1996, Consumer Reports said ``any [top-loading] washing machine 
        will get clothes clean,'' whereas now, only some manage that 
        feat. But that face-off compares apples to oranges: Our testing 
        and scoring protocols for washers are significantly tougher 
        than they were when Bill Clinton was in the White House.\4\
---------------------------------------------------------------------------
    \4\ http://news.consumerreports.org/home/2011/03/consumer-reports-
to-the-new-york-times-washers-are-greener-and-better-.html

    Turning to ``rebound'', there have been a number of recent articles 
claiming that savings from energy-efficiency improvements can be lost 
to increased use of efficient products and other factors. While in fact 
there likely some modest rebound effects, the allegations in the 
Tierney opinion piece in the NYT and other similar articles are greatly 
---------------------------------------------------------------------------
exaggerated. The allegations fall into four categories:

          a. When consumers purchase efficient products, knowing the 
        products are efficient, they use them more. This has been 
        documented for several products (e.g. cars and CFL lightbulbs), 
        but the effect is typically only 5-10% of the energy savings, 
        leaving the other 90-95% as real savings.
          b. When consumers and businesses save money due to energy-
        efficiency, they spend much of what they save on additional 
        products and services (e.g. going out to eat more often) and 
        these additional services use energy. This is true, but we see 
        this as a positive impact (energy efficiency helps spur 
        economic growth). Also, from work we and others have done, this 
        might use on the order of 1/4 of the energy savings, not all of 
        the savings.
          c. As products grow more efficient, more consumers purchase 
        them. For example, an article in The New Yorker a few months 
        ago blamed energy-efficiency for the large growth in use of 
        central air conditioners in homes. In fact, the growth in 
        central air conditioner use is primarily due to rising 
        household incomes and a dramatic decline in the price of 
        central air conditioners.\5\
---------------------------------------------------------------------------
    \5\ This is discussed in a recent ACEEE blog on this subject: 
http://www.aceee.org/blog/2011/01/our-perspective-rebound-effect-it-
true-more-efficient-pro
---------------------------------------------------------------------------
          d. More efficient industrial processes generally have higher 
        productivity and as a result, these processes are used to 
        produce greater quantities of products. Yes, more efficient 
        plants tend to operate more, but this is compensated by the 
        fact that older, less-efficient plants are operated less. 
        Overall, this factor is subsumed under item ``b''.
     Responses of Steven Nadel to Questions From Senator Murkowski
    Question 1. Can you explain what happens when, in the absence of a 
federal standard set by Congress or DOE, the states begin adopting 
their own standards, one by one?
    Answer. Fourteen states have adopted standards in recent years.\6\ 
Sometimes states copy standards from other states, but frequently some 
modifications are made in response to local considerations. As a 
result, manufacturers and distributors must ship different products to 
different states, and must more carefully track legal requirements and 
which products go where, so they can be in compliance with state laws. 
Also, when state standards are set, in some cases consumers who live 
near a state border may shop out-of-state, creating dislocations for 
merchants. Also, states are generally cash-strapped and do an uneven 
job of enforcing standards. This can penalize honest manufacturers, 
distributors and retailers and provide undue advantage to less 
scrupulous companies. National standards eliminate all of these 
problems by creating a uniform national market--the same product can be 
shifted everywhere. Also, compliance with national standards tends to 
be better than for state standards.
---------------------------------------------------------------------------
    \6\ See http://www.standardsasap.org/state/index.htm .
---------------------------------------------------------------------------
    Question 2. When has the market moved towards more efficient 
appliances without a federal or state mandate in place?
    Answer. There are many cases where the market for efficient 
products has grown without standards, spurred by Energy Star, utility 
and state energy efficiency programs, manufacturer and retailer 
promotions, and other efforts. Examples include CFLs (now about 20% of 
screw-in bulb sales) and home appliances. Regarding home appliances, 
Energy Star estimates that in 2009, the Energy Star market share was 
36% for room air conditioners, 48% for clothes washers, 68% for 
dishwashers, 35% for refrigerators and 2% for water heaters.\7\ In the 
case of refrigerated vending machines, in response to consumer and 
environmental group pressure, beverage manufacturers (e.g. Coke and 
Pepsi) asked manufacturers to design more efficient vending machines. 
But even in all of these cases, product efficiency standards complete 
the transformation of the market, converting the 1/3-2/3 of the market 
that does not respond to voluntary efforts. Over the very-long term, 
some products may turn over on their own (e.g. we no longer use whale 
oil lamps), but this process typically takes many decades. For example, 
Congress in 1992 asked DOE to set standards on mercury vapor lamps, a 
particularly inefficient type of outdoor lighting. These standards have 
not yet been set and while their market share has declined since 1992, 
they still have notable market share (e.g. 16.7% of outdoor lighting 
products in use according to a 2002 study for DOE)\8\.
---------------------------------------------------------------------------
    \7\ http://www.energystar.gov/index.cfm?c=manuf--res.pt--
appliances#asd
    \8\ Navigant Consulting, Inc. 2002. U.S. Lighting Market 
Characterization. Volume 1. Prepared for U.S. Department of Energy. Pg. 
35.
---------------------------------------------------------------------------
    Question 3. What are the major differences between moving an 
appliance standard through the regulatory process and the legislative 
process?
    Answer. Appliance standards can be set through either a legislative 
or a regulatory process. The legislative process has only been used 
when there is consensus among the major parties (e.g. manufacturers, 
efficiency, consumer and environmental organizations, and utilities). 
When there is such consensus, and when energy legislation is moving 
forward, the legislative process is generally the quickest. In 
addition, legislative adoption allows creative solutions that may not 
be permitted under existing legislation. For example, INCAA contains 
some changes to how federal standards and state building codes 
interact; changes that require legislative action. Furthermore, with 
legislative adoption, the cost of a rulemaking can also be saved, 
including costs for federal employees and contractors as well as time 
spent by participating parties. Finally, since all parties sign off on 
the legislation, the details can be reviewed and refined by interested 
parties.
    Regulations are commonly used when consensus cannot be reached on 
new standard levels. With regulation, the different parties can make 
their case and DOE makes a decision. Regulations can also be used when 
energy legislation is not moving through Congress, if the underlying 
legislation authorizes such regulations. With regulation, sometimes not 
all aspects of a consensus agreement may be adopted, either because of 
restrictions in the law, or because DOE chooses to take another path.
    Question 4. How was consensus achieved on the proposed standards 
and how do you define ``consensus'' in this context? Was consensus 
achieved in 2007, as it relates to the new standards for the 
incandescent bulb?
    Answer. For the various standards in INCAA, manufacturers and 
efficiency organizations would talk and decide if a consensus standard 
was worth pursuing. Specific proposals would be developed by one or 
both parties and through meetings and other discussions differences 
worked through until there was agreement on a full package. At times, 
some analysis proved useful, either prepared by one of the parties, or 
by DOE. For example, DOE provided many analyses for use by the parties 
during the negotiations for refrigerator and other appliance standards. 
Once agreement was reached among the principle parties, other parties 
would be consulted (e.g. utilities, retailers, contractors, and 
wholesalers), and if needed, some modifications worked out. In this 
context, ``consensus'' means that all parties support the agreement, 
and prefer the agreement to the alternatives (e.g. a DOE rulemaking or 
no federal action).
    In the case of the incandescent bulb standards, after many months 
of discussion, the various parties eventually agreed on most of the 
particulars. A few final details were decided by Members and their 
staff and all parties supported these final compromises.
      Responses of Steven Nadel to Questions From Senator Portman
    Question 1. I think one of the largest barriers to wide-spread 
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it 
is pretty difficult with the tools available to us today to wrap your 
head around how much energy you use in a day or a year, and then it is 
even tougher to figure out how much a certain energy efficiency 
technology can save eventually save you. I believe this uncertainty 
makes it hard for a consumer to commit to investing the upfront money 
in energy efficiency technology, and I think it is one of the reasons 
why so many get concerned when governments talk about mandates on 
energy efficiency. Simply put, the uncertainty leaves a lot of money on 
the sidelines. Do you agree? If so, what is the solution?
    Answer. Yes, I agree that one of the major barriers is that many 
consumers (residential, commercial and industrial) do not realize the 
specific opportunities they have for saving energy, and how to achieve 
these savings. Faced with such uncertainty, they do not take action. In 
terms of solutions, I recommend improved labeling and education 
efforts. For example, appliances now carry an Energy Guide label, but 
focus groups ACEEE and others have conducted have found that many 
consumers do not understand the labels. In most other countries they 
use labels in which appliances are rated using a number or letter scale 
(e.g. 1-5 stars, or letters A-G) and these are much more readily 
understandable to consumers. We also recommend that buildings (homes 
and commercial buildings) receive efficiency ratings based on their 
energy use, building size, building type and other characteristics. 
Such labels would provide information to prospective purchasers and 
renters, and would be an incentive for building owners to upgrade their 
buildings before they put them on the market. Likewise, we support 
benchmarking of commercial buildings and industrial processes, so 
owners can compare their facilities to similar facilities and identify 
buildings and processes that are below average and should be upgraded.
    Question 2. How do we develop metrics for consumers to base their 
decisions that is accurate across many different consumers, 
environments, and scenarios?
    Answer. Labels and metrics typically are based on average usage 
patterns and costs. For the typical consumer, this provides an easy to 
use ``ballpark'' estimate. If too many variables are presented, many 
consumers will not immediately understand the information and will not 
pay attention. For consumers who want more details, I would suggest 
greater use of websites, including tools that can be accessible on 
smart phones and other handheld devices that consumers could access 
while they are shopping.
                                 ______
                                 
   Responses of Joseph M. McGuire to Questions From Senator Bingaman
    Mr. McGuire, I assume that you have read the article in this 
Monday's New York Times entitled, ``When Energy Efficiency Sullies the 
Environment'' which contends that the most recent report by Consumer 
Reports found that ``no top-loading (washing) machine got top marks for 
cleaning.''
    Question 1. I'd appreciate your general views on the piece, and 
more specifically, your views on whether energy efficiency standards 
have reduced the performance of top-loading washing machines.
    Answer. In the New York Times column, ``When Energy Efficiency 
Sullies the Environment,'' the author leaps to the unfounded conclusion 
that there is a choice to be made when washing your clothes: either 
wear clean clothes or save energy; but not both. The facts do not 
support that. The appliance industry has a long history of making 
energy efficient appliances that also offer optimal performance. In 
fact, do not take our word for it, read the Consumer Reports Blog, 
which says the New York Times article's ``interpretation of Consumer 
Reports' washer tests is misleading'' and ``As an organization that 
tests both performance and energy efficiency, Consumer Reports has seen 
product performance improve or remain at high levels, while energy 
efficiency standards have become increasingly stringent over the years. 
Washing machine performance has actually improved while dishwashers and 
refrigerators performance has remained at high levels.''
    Replacing an eight year old clothes washer with a new clothes 
washer of average efficiency will save the average household more than 
$130 in electricity costs per year, and will slash water usage by 5,000 
gallons per year. All this--and clean clothes! How can you go wrong?
    The column, however, does foreshadow a real issue for the future in 
that we cannot blindly drive toward ever increasing efficiencies 
without considering performance. This balance is recognized by the 
appliance industry's support for the ENERGY STAR program's decision to 
couple soundly developed performance standards into future efficiency 
increases thereby ensuring that any future mandatory standards fully 
take into account the effect on product utility.
    In addition, there is a pathway to efficiency gains that provide 
tremendous potential for saving energy and protecting the environment 
with no compromise of product performance, and that is through smart 
appliances that can automatically operate at a time of day when 
electricity prices are lower, to save consumers money on the utility 
bill, and reduce peak demand which would cut the number of wasteful, 
but necessary, peaker power plants around the country.
    Consumers can purchase home appliances with confidence-knowing that 
modern appliances offer many more features and conveniences than 
yesterday's white goods, and save significant amounts of energy. And 
just around the corner manufacturers will introduce smart grid enabled 
appliances that will provide creative new and innovative ways to cut 
energy use while offering maximum consumer benefits.
    Question 2. Mr. McGuire, on page 3, you say that standards alone 
are not effective at promoting the development and deployment of 
efficient products, and standards are of decreasing value as products 
get more efficient. You point to manufacturer tax credits targeted to 
increased production of super-efficient products as the model for 
deploying efficient products and creating jobs.
    Would you outline a specific example of how these credits help to 
deploy a new product that would not otherwise have been commercialized, 
and how many jobs this created?
    Answer. The tax credit for super-efficient appliances is a model of 
an incentives-based approach rather than a regulatory-based approach 
that helps every day Americans to save money on their electric bill. It 
is a model because it drives continual improvement. Tax credits in any 
given year can only be claimed for additional super-efficient 
appliances that are sold over and above previous years' production. As 
the government looks to save consumer's energy and reduce this 
country's dependence on foreign oil, this tax credit has a proven track 
record of success. In 2008, there were no refrigerators that were 30% 
more efficient than the federal minimum. However, a tax credit was 
enacted that year for a 30% more efficient refrigerator and, in 2009, 
there were approximately 200,000 refrigerators that were 30% more 
efficient.
    Question 3. Mr. McGuire, on page 3, you mention that there is a 
non-legislative element in the agreement your association negotiated 
with other stakeholders that ``will jump start the smart grid by 
helping to deploy smart appliances nationwide and enable consumers to 
better take advantage of demand--response and real-time pricing 
opportunities.''
    Would you expand on this by providing an example of how this would 
work, and explain why this is a non-legislative component of your 
agreement?
    Answer. We submitted a petition to ENERGY STAR along with 
efficiency advocates and environmental and consumers groups request a 
recognition of the benefits of smart appliances to the consumer and the 
grid through a 5% allowance. The petition was accompanied by a detailed 
and technical evaluation from the Pacific Northwest National Lab 
justifying that the benefits attributable to smart-grid capability are 
more than the 5% allowance requested. The full petition and PNNL 
analysis and report can be found at www.aham.org/smartgrid. It is our 
hope that the ENERGY STAR program will agree to this petition. The 
President and Secretary Chu have talked about the need to modernize our 
grid, and the ENRGY STAR can jump start the smart grid by providing a 
5% incentive to manufacturers to build and sell smart appliances in 
anticipation of dynamic pricing coming in the future. ENERGY STAR is 
well positioned to provide this recognition to the consumer of these 
current and future benefits, but they may need to adjust the program's 
traditional policies to help the nation accomplish this objective.
    Question 4. Some argue that Federal regulation of appliance 
efficiency is inappropriate government intrusion in the marketplace. 
After 25 years of this program, what do you believe the impact of these 
regulations has been on your industry, on job creation, and on the U.S. 
economy?
    Answer. For over 20 years, the industry has supported the increased 
certainty of having 1 federal regulation on appliance standards that 
preempts state standards in this area. Prior to this current regulatory 
framework, states were free to develop their own appliance standards 
creating a patchwork of 50 differing standards. This situation--50 
differing regulations--is unfriendly to business and to consumers. 
Ideally, a North American market, or even global market, would be 
supported through a harmonized agreement on appliance standards. The 
theoretical discussion of whether government has a role in this area is 
supplanted by the reality that governments--states, California, and 
around the world--are involved in setting minimum energy standards for 
appliances. Our industry is faced with these realities and prefer less 
regulation, ie, 1 federal regulation, as opposed to increased and 
inconsistent regulations.
    Question 5. Some argue that Federal regulation of appliance 
efficiency is inappropriate government intrusion in the marketplace. 
After 25 years of this program, what do you believe the impact of these 
regulations has been on your industry, on job creation, and on the U.S. 
economy?
    Answer. Same as #4.
   Responses of Joseph M. McGuire to Questions From Senator Murkowski
    Question 1. What are the major differences between moving an 
appliance standard through the regulatory process and the legislative 
process?
    Answer. The industry has found negotiating agreements, which can be 
implemented legislatively, provide a better framework to reach an 
acceptable conclusion and provide the industry more certainty than a 
regulatory process. The reason is that negotiations are not restricted 
by the walls of a regulatory rulemaking process. For example, our 
recent agreement brought in providing incentives for smart appliances 
through the ENERGY STAR program, which could not be done through a DOE 
rulemaking. Our agreement also included tax incentives for super-
efficient appliances, which must be legislated. Further, having 
standards implemented through legislation removes the uncertainty from 
a lengthy rulemaking process.
    Question 2. How was consensus achieved on the proposed standards 
and how do you define ``consensus'' in this context? Was consensus 
achieved in 2007, as it relates to the new standards for the 
incandescent bulb?
    Answer. We were not involved in the incandescent bulb standard, but 
for our recent agreement, consensus has essentially been a unanimous 
agreement by all stakeholders. We are not aware of any opposition to 
our agreement and it has been widely publicized since July 2010.
    Responses of Joseph M. McGuire to Questions From Senator Portman
    Question 1. I think one of the largest barriers to wide-spread 
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it 
is pretty difficult with the tools available to us today to wrap your 
head around how much energy you use in a day or a year, and then it is 
even tougher to figure out how much a certain energy efficiency 
technology can save eventually save you. I believe this uncertainty 
makes it hard for a consumer to commit to investing the upfront money 
in energy efficiency technology, and I think it is one of the reasons 
why so many get concerned when governments talk about mandates on 
energy efficiency. Simply put, the uncertainty leaves a lot of money on 
the sidelines. Do you agree? If so, what is the solution?
    Answer. Currently, many tools exist for the consumer to learn about 
the amount of energy used by an appliance and the cost savings that can 
occur through the purchase of newer more efficient appliances. The 
Federal Trade Commission requires a prominently placed bright yellow 
ENERGY GUIDE label on the front of all appliances sold at retail, and 
requires energy information to also be displayed online. This label was 
recently changed to include a more prominent display of annual 
operating cost, in addition to Kilowatt-hours used by that appliance. 
Consumers have also come to rely on the ENERGY STAR label offered only 
to products that register efficiencies greater than what is required by 
the federal minimum efficiency standards. ENERGY STAR is one of the 
most recognized brands, signifying additional energy and costs savings. 
In addition, the ENERGY STAR web site includes a calculator which can 
help a consumer make an informed choice by determining the amount of 
energy used by their current appliance, and the potential savings 
offered through a new appliance.
    Question 2. How do we develop metrics for consumers to base their 
decisions that is accurate across many different consumers, 
environments, and scenarios?
    Answer. The next generation of appliances, called smart appliances, 
will be designed to operate in coordination with the future Smart Grid. 
These appliances, under development, will be able to receive and 
respond to signals from the electrical power grid that will 
automatically enable the appliance to defer or delay an energy using 
cycle until the power is less expensive to consume. This may sound 
futuristic, but these appliances will be available in the market if the 
proper incentives are put in place and will offer added benefits beyond 
just energy savings. Through the integration of home energy management 
systems, which will likely be used with these smart appliances, a 
consumer will know exactly how much energy a particular appliance is 
using. AHAM is requesting government and electric utility policies that 
will promote and incentivize the market introduction of these 
appliances. One such policy that would allow for more information to 
the consumer would be the offering of dynamic pricing from utilities to 
the consumer to incentivize consumers to consume power when it is 
cheapest, or when renewable sources are available. These appliances 
will one day benefit all Americans.
                                 ______
                                 
      Responses of Kyle Pistor to Questions From Senator Bingaman
    Question 1. How do you respond to the argument of the proponents of 
BULB that all bulb technologies, including the traditional incandescent 
bulb, should be available so that consumers can select the one that 
best meets their needs. That is, let the market decide?
    Answer. Light bulbs are designed, manufactured, and distributed for 
national markets. We support consumers being able to choose what type 
and style of light bulbs meet their needs. But when individual states 
set efficiency requirements on light bulbs that would require 
manufacturers to make different bulbs for different states, as what was 
happening in 2007, then market-based, cost-effective options are not 
being provided to consumers. State actions would have distorted the 
market and limited consumer choices. A minimum consensus federal 
efficiency standard as set forth in EISA 2007, that pre-empts 
conflicting state rules, continues to provide consumers with new 
energy-efficient incandescent light bulbs along with other 
technologies.
    EISA 2007 continues and expands consumer choice with all technology 
options. The federal legislation does not reduce consumer options, but 
supports varied options for consumers. Federal action was needed to 
prevent state actions that would have limited consumer choices.
    Question 2. Some argue that Federal regulation of appliance 
efficiency is inappropriate government intrusion in the marketplace. 
After 25 years of this program, what do you believe the impact of these 
regulations has been on your industry, on job creation, and on the U.S. 
economy?
    Answer. NEMA supports a federal program of efficiency standards, 
test procedures and product labeling/information for agreed-upon 
consumer products and commercial equipment. The success of a federal 
program is based on using industry efficiency standards that are 
incorporated into consensus legislative proposals or DOE adoption of 
consensus agreements. The federal program has resulted in providing 
regulatory certainty for manufacturers regarding research and 
development, innovation deployment, and product manufacturing. This 
also benefits consumers with cost-effective, energy-efficient products 
that reduce their energy bills. NEMA members operate in a globally 
competitive environment and are adjusting product offerings in response 
to changing market and consumer demand. If our members had to face a 
patchwork of conflicting state requirements for products our 
competitiveness would be greatly reduced as compared to having a 
federal program. The federal program has benefited the nation through 
reduced product costs to consumers as manufacturers are able to plan 
and produce a product for one national market rather than different 
state markets.
    Question 3. On page 10, you say that NEMA represents 15 companies 
that sell over 95 percent of the light bulbs used in the United States 
and you reaffirm their support for the energy-efficient light bulb 
provisions of EISA 2007.
    What do you believe the short-term and long-term impacts of 
enactment of the BULB Act would be on your industry?
    Answer. Following the enactment of EISA 2007, manufacturers had 
regulatory certainty and proceeded to make millions of dollars in 
investments in research and development, plant and equipment, work 
training, and new product and safety testing for EISA-compliant 
products. The first of those federal requirements are now only nine 
months away (January 2012). Repeal of the EISA 2007 light bulb 
provisions would strand millions of dollars in investment, create 
significant regulatory uncertainty, and undermine investments in new 
research and development and corresponding job employment. Further, 
uncertainty would be re-introduced to the market because states would 
again have the ability to pass their own efficiency standards for light 
bulbs as was happening in 2007. In the long term, a repeal of the U.S. 
standards would put American manufacturers at a competitive 
disadvantage in the global marketplace. U.S. firms operate in a global 
marketplace and are competing in markets that are moving towards more 
energy-efficient lighting.
      Responses of Kyle Pistor to Questions From Senator Murkowski
    Question 1. Halogen technology has been around for many, many 
years, and yet we are just now taking to market an incandescent halogen 
bulb with 30% energy savings. Furthermore, the catalyst for this new 
product was the mandates in EISA 2007. If the halogen technology was 
known to provide energy savings, why didn't the market demand it a long 
time ago?
    Answer. While halogen technology (a type of incandescent lighting) 
has been around for decades, the energy saving versions that meet the 
EISA 2007 requirements have only recently been developed for widespread 
commercial distribution. Advanced incandescent-halogen is more 
expensive than regular incandescent bulbs to produce.
    Question 2. There have been stories in the media about job loss due 
to the new light bulb standards. Can you talk about the current job 
outlook as it pertains to the lighting industry? Are there any job 
trends occurring within the industry?
    Answer. The U.S. lamp industry operates in a globally competitive 
market and is changing its manufacturing footprint as needed to address 
changing market conditions. The changing global markets have increased 
demand for energy efficient lighting and decreased demand for older 
technologies. Today, the U.S. lamp industry represents 12,000-14,000 
U.S. jobs with job growth occurring in the energy-efficient and 
advanced lighting sectors, such as LED lighting.
    Question 3. There was an educational campaign in the Energy 
Independence and Security Act of 2007 that was authorized to spend $10 
million to educate consumers on the new standards contained within the 
Act. That authorization was never funded. What has industry done to 
educate consumers on the new standards?
    Answer. Notwithstanding the lack of federal government funding 
support for consumer education, the industry has taken efforts to 
assist consumers understand the benefits of energy-efficient lighting 
options. Industry has:

   formed a coalition called LUMEN (Lighting Understanding for 
        a More Efficient Nation) with the American Lighting Association 
        and the Alliance to Save Energy. This group is focusing on 
        disseminating correct information about the lighting transition 
        to utilities, retailers, media and consumers.
   designed a new label with the Federal Trade Commission for 
        light bulb packages to provide key buying and performance 
        information.
   organized a task force focused on providing information on 
        the lighting transition. This group published ``The 5 Ls of 
        Lighting'' (lightbulboptions.org) for use by media, retailers, 
        consumers and all interested parties. Also, factual data was 
        printed in a ``Lighting Options for Your Home'' brochure.
   Individual manufacturers are also working with retailers, 
        utilities and other channel partners to provide point-of-sale 
        information to consumers.

    Question 4. What are the major differences between moving an 
appliance standard through the regulatory process and the legislative 
process?
    Answer. When moving an appliance standard through the legislative 
process, all interested parties come together to negotiate a 
recommendation that is submitted to legislators only when a broad 
consensus agrees to the proposal. There is a free flow of information 
and discussion by interested parties in reaching the consensus 
recommendation.
    Under the regulatory process, the Department of Energy convenes a 
public workshop and solicits comments from stakeholders on what the 
standard should be. The DOE staff and its contractors then put forward 
a proposal for further ``notice and comment.'' Interested parties 
provide comments but there is no ``back and forth'' dialogue with the 
agency staff or its contractors until a final rule is issued.
    The legislative process is more transparent and provides for more 
ability to achieve a consensus that works for all stakeholders than the 
regulatory process. The regulatory process also takes several years to 
reach a result and at a cost to the tax-payer. Having the interested 
parties convene and reach an agreement is faster and less expensive.
    Question 5. How was consensus achieved on the proposed standards 
and how do you define ``consensus'' in this context? Was consensus 
achieved in 2007, as it relates to the new standards for the 
incandescent bulb?
    Answer. Interested parties (industry, environmental advocates, and 
other stakeholders) were brought to the table to negotiate the new 
standards. During 2007, the parties came to an agreement and presented 
that agreement to Congress. ``Consensus'' exists with the absence of 
significant opposition by an interested stakeholder.
       Responses of Kyle Pistor to Questions From Senator Portman
    Question 1. I think one of the largest barriers to wide-spread 
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it 
is pretty difficult with the tools available to us today to wrap your 
head around how much energy you use in a day or a year, and then it is 
even tougher to figure out how much a certain energy efficiency 
technology can save eventually save you. I believe this uncertainty 
makes it hard for a consumer to commit to investing the upfront money 
in energy efficiency technology, and I think it is one of the reasons 
why so many get concerned when governments talk about mandates on 
energy efficiency. Simply put, the uncertainty leaves a lot of money on 
the sidelines. Do you agree? If so, what is the solution?
    Answer. Some residential consumers only consider the initial cost 
in buying a product/appliance and do not factor the electricity costs 
of operating the product/appliance over its lifetime. Commercial 
consumers typically evaluate products on their operating and initial 
costs. The challenge is to provide relevant information to residential 
consumers so they can make a more informed decision that takes into 
account the initial purchase price and the operating costs over time. 
The consumer can then make a decision based on their specific 
situation.
    Question 2. How do we develop metrics for consumers to base their 
decisions that is accurate across many different consumers, 
environments, and scenarios?
    Answer. The new Lighting Facts label, mandated in a final rule by 
the Federal Trade Commission per EISA 2007, is a good example of how to 
get consumers information on energy and money saved by energy efficient 
light bulbs. This label will provide consumers the ability to compare 
different lighting choices on the energy saved over the lifetime of the 
bulb. It will also give them an understanding of the operating costs. 
They will then be able to compare that to the price of purchasing the 
bulb and thus understand their energy and money savings by purchasing 
the product.
                                 ______
                                 
      Responses of Mark Cooper to Questions From Senator Bingaman
    Mr. Cooper, the results of the recent CFA consumer poll found that 
nearly all Americans--95 percent--think that it is beneficial for 
appliances to become more efficient, and that a large majority--72 
percent--support the government setting minimum energy efficiency 
standards.
    Question 1. Do these findings also apply to light bulbs which many 
people might not think of as appliances?
    Answer. While CFA did not specifically ask about light bulbs, my 
testimony reviewed several surveys that indicate a similar level of 
awareness of and support for energy efficiency and standards dealing 
with light bulbs.
    Question 2. Mr. Cooper, you provide a thorough analysis of what you 
call the ``energy efficiency gap'', and identify five general market 
imperfections that result in our nation's waste of energy.
    Please give me an example of the three imperfections that you 
believe most contribute to energy waste in our economy.
    Answer. Because inefficient appliances require less technology, 
they are less costly and more profitable than more efficient 
appliances, appliance manufacturers have an incentive to exploit their 
information advantage over consumers and advertise, stock and push less 
efficient appliances. In addition, because energy consumption is 
imbedded in a multi-attribute product, appliance manufacturers can 
influence consumer choice strongly by choosing the combinations of 
attributes to offer. Appliance manufacturers who might contemplate 
offering more efficient appliances face the risk that others will not 
and inertia will make it difficult to wean consumers from inefficient 
products.
    The information advantage stems from the fact that consumers lack 
access to good information and have difficulty making the lifecycle 
cost calculations (future energy prices, quantities of energy 
consumed).
    In many instances, consumers do not make the choice of appliances, 
but landlords or builders do. Their preference for low first cost 
appliances and familiarity with existing technologies depresses the 
inclusion of technologies that reduce energy consumption.
      Responses of Mark Cooper to Questions From Senator Murkowski
    Question 1. A concern for many consumers, as in the case of light 
bulbs, is that the new, more efficient appliances will not be of the 
same quality as the less efficient ones. What is CFA's position on 
these concerns?
    Answer. Because the standards are technology neutral and promote 
competition between light bulb manufacturers, consumers will be 
provided a wide range of choices. As demonstrated at the hearing, there 
are half a dozen technologies already being offered by major light bulb 
manufacturers and the standard has not yet gone into effect. We have 
every confidence the marketplace will meet consumer needs.
    Question 2. Please describe the analysis and research you undertook 
to determine, as described in your testimony, that ``.homes in which 
consumers live will command a higher resale because they are more 
energy efficient.''
    Answer. CFA has conducted extensive analysis of the auto market 
where the evidence is quite clear that more efficient automobiles 
command much higher prices. The housing literature also supports this 
conclusion. This conclusion is common knowledge. A sample of results 
from a web search yields the following results.

          There was a study published in the Appraisal Journal 10-1998. 
        The last 3 paragraphs summarize:

          The convergence of the fuel expenditure coefficients around -
        20 is consistent with research findings that the selling price 
        of homes increased by $20.73 for every $1 decrease in annual 
        fuel bills. 2. Other research supports the underlying 
        conclusion that energy efficiency increases home value by an 
        amount that reflects annual fuel savings discounted at the 
        prevailing after-tax mortgage interest rate. 3. The implication 
        for home buyers is that they can profit by investing in energy-
        efficient homes even if they do not know how long they might 
        stay in their homes. If their reduction in monthly fuel bills 
        exceeds the after-tax mortgage interest paid to finance energy 
        efficiency investments, then they will enjoy positive cash flow 
        for as long as they live in their homes and can also expect to 
        recover their investment in energy efficiency when they sell 
        their homes.
          The implication for appraisers is that cost-effective energy 
        efficiency investments do appear to be reflected in residential 
        housing market values. Therefore, the appraised value of 
        energy-efficient homes could under-state their actual resale 
        value if the comparables used in the appraisal do not reflect 
        the value of a cost-effective energy efficiency investment.

    http://homeenergypros.lbl.gov/group/resalevalue

    A peer-reviewed study published in The Appraisal Journal shows that 
homebuyers are willing to pay substantially more for energy-efficient 
homes. This study, titled ``Evidence of Rational Market Values for Home 
Energy Efficiency,'' concludes that people are willing to fully pay for 
the monthly fuel savings of energy efficient homes with higher monthly 
mortgage payments'' which translate into higher home values. Thus, 
homebuilders and homeowners who invest in energy efficiency can expect 
to recover the market value of their energy efficiency investments when 
they sell their homes.
    The ICF study reviews published research on energy efficiency and 
home values, and presents an extensive statistical analysis of American 
Housing Survey (AHS) data. The published research shows that market 
values for energy efficient homes appear to reflect a rational trade-
off between homebuyers' fuel savings and their after-tax mortgage 
interest costs. The ICF statistical analysis explicitly tests this 
``rational market hypothesis'' against National AHS data for 1991, 
1993, and 1995, and metropolitan statistical area data for 1992 through 
1996. Both of these distinct AHS samples provide data on home 
characteristics (including home value, number of rooms, square feet, 
lot size, and utility bills) as reported by homeowners in lengthy 
interviews with the Census Bureau. The study presents separate 
statistical results for each year, for detached and attached homes, and 
for detached housing with different heating fuels (gas, electric, or 
fuel oil).
    These statistical results support the conclusion ``That home value 
increases by $20 for every $1 reduction in annual utility bills'', 
consistent with after-tax mortgage interest rates of about five percent 
from 1991 through 1996.
    This research was conducted for the U.S. Environmental Protection 
Agency (EPA) ENERGY STAR Homes program. ENERGY STAR homes use at 
least 30% less energy than a Model Energy Code home while maintaining 
or improving indoor air quality and increasing comfort in the home. EPA 
estimates that the cost to upgrade a new home to ENERGY STAR levels 
can range from $2,000 to $4,000, and that a typical ENERGY STAR home 
reduces utility bills by $420 per year. The ICF study indicates that 
$420 in annual utility savings will add about $8,400 to the market 
value of an ENERGY STAR home (or to any equally efficient home), or 
two to four times the builder's upgrade costs.
    The study should also encourage homeowners to consider energy 
efficiency upgrades for existing homes. An important conclusion from 
this research is that homeowners ``can profit by investing in energy 
efficient homes even if they are uncertain about how long they might 
stay in the home. If their reduction in monthly fuel bills exceeds the 
after-tax mortgage interest paid to finance energy efficiency 
investments, then they will enjoy positive cash flow for as long as 
they live in their home and can also expect to recover their investment 
in energy efficiency when they sell their home.'' This research also 
has significant implications for home appraisers, mortgage lenders, and 
housing assistance programs at the federal, state, and local levels.
    Written by: The Appraisal Journal by Rick Nevin and Gregory 
Watsonhttp://www.universalfoamtech.com/energy-efficiency-upgrades-
incre.htm
    Many people are reluctant to improve the energy efficiency of their 
home when they might be moving out in just a few years. But the 
evidence is clear that investments in energy efficiency lead to higher 
home resale values. A recent study published in The Appraisal Journal 
shows that the market value of a home increases by $10--$25 for every 
$1 decrease in annual fuel bills. The study confirms what many have 
believed for years: Energy efficiency substantially increases the 
market value of owner-occupied homes.
    The study was conducted by ICF Consulting with funding from the 
Environmental Protection Agency. It involved extensive statistical 
analysis of American Housing Survey data collected by the Department of 
Housing and Urban Development between 1991 and 1996. The research was 
based on detailed interviews (including a review of energy bills) that 
are conducted every other year at a sample of over 16,000 housing units 
all across the nation. Even taking many other correlated home features 
into account, the study confirmed energy efficiency improvements do 
result in higher home values:

          With after-tax interest rates between 4% -10% and stable fuel 
        price expectations, home buyers should pay $10--$25 more for 
        every dollar reduction in annual fuel bills resulting from 
        energy efficiency\1\

    If home buyers expect stable fuel prices, and after-tax mortgage 
interest rates are in the 4-10% range, then the logic is 
straightforward. Paying $10 up front to save $1 on your annual fuel 
bill is like making an energy efficiency investment having a 10% 
return. Paying $25 up front to get the same $1 in annual savings yields 
a 4% return. ICF's study confirms that the housing market really does 
reward those who invest in energy efficiency with a higher price at 
resale.
    The most important conclusion from this research is that homeowners 
can profit by investing in energy efficiency, even if they don't know 
how long they will be staying in the home. ``If their reduction in 
monthly fuel bills exceeds the after-tax mortgage interest paid to 
finance energy efficiency investments, then they will enjoy positive 
cash flow for as long as they live in their home and can also expect to 
recover their investment in energy efficiency when they sell their 
home.''
    These findings are backed up by seven other studies conducted since 
1981, all of which found higher home values associated with energy 
efficiency. The three most recent of these report home value increases 
of between $11 and $21 for every dollar saved through reductions in 
annual fuel bills. But why do some homeowners still hesitate to 
increase their insulation levels or replace those old windows? Many are 
concerned that appraisers won't take their improvements into account 
and that therefore they won't get credit for these investments. But 
these studies show that even if an appraiser fails to cite these 
improvements, home buyers do notice and are willing to pay more.
What can you do?
    Make sure your appraiser and your real estate agent know you made 
the energy efficiency improvements and let them know about this 
important research. For more information on the study check out the ICF 
Consulting press release or visit the Residential Energy Services 
Network (RESNET) web site.

    http://www.energycheckup.com/content/IncreaseHomeValue.asp
              energy-efficient homes offer loan prospects
    Imagine financing a mortgage for a home made almost entirely out of 
beer bottles.Or a house built hallway into the ground, using old car 
tires in the construction. While houses like these may seem far 
fetched, a very small, but growing segment of the home lending market 
is made up of such energy efficient homes that don't fit the 
traditional mold.
    Of course, most of these homes are not made out of bottles or 
tires. Many of them are made out of materials that people have been 
using for hundreds of years but which are more sought-after in these 
conservation-friendly times. For instance adobe, the insulating earthen 
bricks used in southern clinics, is a relatively common construction 
material in the southwest because of its ability to keep out the summer 
heat and retain the sun's warmth in winter.
    But many of the newer energy-efficient homes are being made out of 
more unusual materials such as Rostra block--a sort of large brick made 
up of recycled materials like concrete and Styrofoam cups. Other homes 
are made from materials like straw bales, used tires and incorporate 
unusual energy efficiency designs.
    Despite the fact that such homes are not found on every block and 
cul-de-sac, providing mortgages turns out to be a relatively run-of-
the-mill procedure. The more of them that are built and retain their 
value, the more mainstream the lending becomes. Take EarthShips, a 
housing construction in New Mexico that includes a variety of energy 
efficient designs and uses tires in the construction.
    ``Up until about a year ago, the secondary mortgage market had no 
comps for these Earth Ships,-says Angel Keyes, vice president and CIO 
of Centinel Bank of Taos in N.M.Now it's just like any other 
construction loan.''
                         retaining resale value
    The efficiency of super energy efficient homes improves their 
value, and they are proving to be good investments as the homes are re-
sold for much more than they cost to build, community bankers say. 
``It's incredible how the market rewards for that type of 
construction'', Keyes says.
    Previously, Keyes says, the appraisals were low for most of the 
newer homes, but over time that has changed. `What we do see now is 
that we have transactions and you see equity gained,''
    Charter Bank in Albuquerque, N.M., is very active in making loans 
on homes constructed from non-traditional materials such as straw bale 
and rammed earth. Glenn Wertheim, president of Charter Mortgage Co., is 
familiar with this type of housing and says knowing the particulars of 
a home's location is the important thing in making lending decisions.
    ``The process for considering and placing financing on these less 
traditional homes isn't really any different. You simply have to 
consider these property distinctions in the under-writing process,'' 
Wertheim says. ``In that consideration, I would say, you have to have a 
much better than average expertise in underwriting appraisals, and know 
the markets you are lending in intimately, down to the 
neighborhood...For new construction you have to look at the builder's 
credentials and expertise in using nontraditional building materials. 
Ultimately you have to judge the market acceptance and desirability of 
the home within its neighborhood.''
    The question is this, says Enchain, ``Is our collateral value 
secure relative to the loan we make on the property?'' ``Because 
nontraditional materials like adobe and straw bale are more common in 
New Mexico, Charter Bank can generally offer any of its regular home 
loan products to customers,'' Wertheim explains. Some loans fall 
outside the regular secondary market guidelines but meet the bank's 
investment criteria. ``We offer a variety of portfolio loan options to 
our customers. We have worked with our investors and government 
agencies over the years to help them become comfortable with this type 
of lending.'' Jerry Walker, executive director of the Independent 
Community Bankers of New Mexico, says many of these structures are made 
well and have proven themselves over time, particularly the adobe 
homes, which he says have amazing insulation and durability.
    If the structure is sound, Walker says, the process is simple. 
``Once the state and local building officials have signed off on [these 
homes), they are treated like any other type of mortgage,'' he says.
                         energy savings touted
    The trend toward more energy efficient houses is capturing the 
attention of those in the housing business, according to Robert Sahadi, 
vice president for Housing Impact at Fan-me Mac. ``There's a wealth of 
things happening,'' he says. ``It's something lenders and home builders 
have become pretty excited about,'' adding that such homes ``have 
become much more conventional over time.'' Sahadi says Fannie Mae is 
not as concerned about whether houses have unusual features as long as 
their energy efficiency can be verified. He also says if a home is 
unable to get an appraisal that is commensurate with the cost of 
building it, an addendum can be used calculating the energy savings and 
tacking it on to he value of the home.
    And it's not just in the Southwest that these houses are found. 
While they are popular in places like Arizona, California and New 
Mexico, they are sprinkled all over the country, says Sahadi, who noted 
building these homes has been ``very aggressive'' in cities like 
Columbus, Ohio, and Indianapolis.
    ``Nationally, builders have been devoting more time to the 
construction of these types of homes,'' he says, conceding that a 
prejudice against them had to be overcome first. But over time, because 
of improved technology and a lower cost of building such features, more 
of these homes are going up. The more commonplace they are, the more 
accepted they are among homebuyers and lenders. As Sahadi puts it. 
``This is a theory whose time has come,''
    The time may be even more close at hand considering the increasing 
awareness of energy usage and cost. Sahadi suggests that with the 
energy situation in California this year and growing energy costs 
elsewhere, the idea of living in a home that helps conserve energy is 
growing in popularity.
    Reyes agrees, pointing out that residents in his area seek out 
homes that save energy costs. ``Now you have more and more demand for 
self-sustaining homes.'' he says. That is not only because they save 
money on energy bills, but because people are getting more interested 
in conservation in its own right. ``You have more people who are aware 
of the needs of the environment,'' Reyes says.
    Reyes also believes that the future is bright for growth in energy-
efficient housing once people become more aware of its benefits. ``The 
market has not realized the potential as with other types of housing.''
    Apparently financing mortgages for unconventional housing has come 
a long way, and it looks as though they are here to stay. Local 
lenders, who are very familiar with their communities are seeing the 
need for such lending products are embracing them. Gone are the days 
when, as Walker puts it, federal lenders would look at a mortgage 
application for an adobe house with a great deal of skepticism. They'd 
see 'mud houses,' and I'm sure they would probably scratch their 
heads.''
    http://www.earthship.net/index.php/Store/Store/begin-here/banners/
codes-regulations-laws/begin-here/food/index.php?option=com--
content&view=article&id=247
    Question 3. What are the different skills required, as described in 
your testimony, to install energy efficient products? Do these skills 
require increased training, thus increased installation costs?
    Answer. The different skills involve training on installation and 
maintenance as well as more time to install. These will require 
training in the transition period and some increased installation costs 
in the long term. These increased costs have been factored into the 
cost benefit analysis that were conducted to evaluate the standards. 
Even with higher equipment and installation costs, the appliances yield 
substantial consumer benefits.
    Question 4. What are the major differences between moving an 
appliance standard through the regulatory process and the legislative 
process?
    Answer. The Congress has established general legislative goals for 
appliance standards. The Administrative Procedures Act also governs the 
process of writing rules. Congress can change the goals and speed the 
regulatory process by specifying goals or changing the criteria for 
setting standards.
    Question 5. How was consensus achieved on the proposed standards 
and how do you define ``consensus'' in this context? Was consensus 
achieved in 2007, as it relates to the new standards for the 
incandescent bulb?
    Answer. CFA was a party to the negotiations between the industry 
and public interest groups last year. We, along with other consumer 
groups, efficiency groups and industry representatives, endorsed the 
consensus agreement and the standards when they were conveyed to the 
Department of Energy. We cannot speak to consensus being achieved in 
2007 as we devoted our efforts to the fuel economy aspects of the 
legislation.
       Responses of Mark Cooper to Questions From Senator Portman
    Question 1. I think one of the largest barriers to wide-spread 
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it 
is pretty difficult with the tools available to us today to wrap your 
head around how much energy you use in a day or a year, and then it is 
even tougher to figure out how much a certain energy efficiency 
technology can save eventually save you. I believe this uncertainty 
makes it hard for a consumer to commit to investing the upfront money 
in energy efficiency technology, and I think it is one of the reasons 
why so many get concerned when governments talk about mandates on 
energy efficiency. Simply put, the uncertainty leaves a lot of money on 
the sidelines. Do you agree? If so, what is the solution?
    Answer. While information is a problem, there are many other market 
imperfections that inhibit the inclusion of technologies that would 
increase energy efficiency. My response to Chairman Bingaman's question 
above outlines several of these. My testimony identified about a dozen 
imperfections that are addressed by efficiency standards.
    Question 2. How do we develop metrics for consumers to base their 
decisions that is accurate across many different consumers, 
environments, and scenarios?
    Answer. Labeling programs have relied on simple message like 
percentages, estimated bills or even latter grades. Efficiency 
standards address the problem more directly by establishing minimum 
standards that ensure appliances have consume no more than the specific 
level of energy. This relieves the consumer of having to ascertain the 
level of energy consumption. Of course, information is still useful to 
allow appliance makers to market and consumers to purchase appliances 
that exceed the standard.
                                 ______
                                 
      Response of Kathleen Hogan to Question From Senator Bingaman
    Question 1. Ms. Hogan, you conclude by saying that ``S. 398 
contains provisions that . . . could streamline DOE's standard-making 
process.''
    Does DOE have any rough estimate of the savings that are expected 
to result from such streamlining?
    Answer. S.398 codifies agreements that were negotiated, signed, and 
promoted by a cross-section of stakeholders representing consumer 
advocacy groups, manufacturers, manufacturer trade associations, and 
energy efficiency advocacy organizations, all of whom support this 
bill. The negotiated consensus agreements would establish energy 
conservation standards for 14 products, several of which are in the 
midst of DOE's ongoing standards and test procedure rulemakings. If the 
standards in S.398 are codified, DOE would end the rulemakings for 
those products. Time and resources could then be reallocated to other 
areas.
    DOE is scheduled to issue final rules for some of the products 
addressed in S.398 (furnaces, room air conditioners, clothes dryers, 
central air conditioners, heat pumps) by June 30, 2011. S.398 also 
prescribes standards for residential clothes washers and dishwashers. 
DOE was not scheduled to complete these rulemakings until December 2011 
and January 2015 respectively. The direct cost savings from 
streamlining the rulemaking process for the consensus standards are 
substantial-well over $10 million in program costs through 2015. The 
exact amount of savings that would result from streamlining these 
standards is difficult to quantify, however, since it depends in large 
part on the timing of INCAAA's passage. If INCAAA was passed in the 
next few weeks, it would save up to two months or more of work on even 
those standards for which DOE is set to issue final rules by June 30. 
Even if INCAAA were passed after June 30, it would still speed up the 
timeline to implement these standards, enabling consumers to realize 
energy savings sooner.
    Responses of Kathleen Hogan to Questions From Senator Murkowski
    Question 1. Is the rulemaking process undertaken by contractors or 
is it done by DOE employees?
    Answer. Each and every instance of DOE rulemaking is led by a DOE 
product manager. The product manager will have oversight responsibility 
over any contractors that carry out the technical analyses required by 
the rulemaking process. The rulemaking analysis is guided by an 
internal review process, which begins at a standards program level and 
then proceeds to an inter-program level. The standards program level, 
in order to ensure compliance with DOE policies and quality standards, 
develops up-to-date standardized guidance for conducting and 
documenting the appropriate analyses. The documents produced by the DOE 
staff and contractors pursuant to the analyses are subsequently 
reviewed by teams of DOE staff consisting of scientists, economists and 
lawyers. This process helps ensure that any errors in analysis are kept 
to a minimum. Moreover, the process assists with the creation of 
Federal Register notices by standardizing and systematically updating 
the set of tools and templates to be used by DOE staff and contractors.
    Question 2. What are the major differences between moving an 
appliance standard through the regulatory process and the legislative 
process?
    Answer. The major difference between a standard adopted through the 
legislative process as opposed to the regulatory process is that the 
regulatory process cannot adopt a standard that contravenes any 
existing law. In contrast, legislation can change existing laws. For 
example, in establishing appliance standards through the rulemaking 
process, DOE is legally limited to considering only the product 
categories and efficiency descriptors that are specified in the Energy 
Policy and Conservation Act. Through legislation, however, Congress can 
specify additional products and descriptors. In this regard, an 
important feature of S. 398 is that it would give DOE the authority to 
set minimum efficiency standards for additional types of products 
including heat pump pool heaters, certain commercial, industrial, and 
outdoor lamps, bottle-type water dispensers, commercial food holding 
cabinets and portable electric spas. S. 398 also amends the definition 
of ``energy conservation standard'' to allow DOE to consider multiple 
efficiency descriptors for the same product. Currently, DOE lacks such 
authority.
    Question 3. How was consensus achieved on the proposed standards 
and how do you define ``consensus'' in this context? Was consensus 
achieved in 2007, as it relates to the new standards for the 
incandescent bulb?
    Answer. DOE considers the term ``consensus standard'' to mean a 
standard that is submitted jointly by interested persons and is fairly 
representative of the relevant points of view (including 
representatives of manufacturers of covered products, States, and 
efficiency advocates), as determined by the Secretary. DOE encourages 
stakeholders to explore opportunities for consensus standards. In the 
case of the consensus agreements that would be codified by S. 398, the 
parties developed those agreements through direct negotiations. DOE was 
not a party in those negotiations.
    The new standards for the incandescent bulb would not be considered 
a consensus standard. The origin for that standard is legislative. 
Specifically, the Energy Independence and Security Act of 2007 (EISA) 
includes a provision setting an efficiency standard for 60-watt bulbs. 
However, DOE believes that the incandescent light bulb provision 
received broad stakeholder support at the time of EISA'senactment.
     Responses of Kathleen Hogan to Questions From Senator Shaheen
                         clean energy standard
    Question 1. I would like to get your thoughts on the President's 
proposed Clean Energy Standard (CES). From what I have seen, the 
proposal doesn't list energy efficiency as a qualifying ``resource'', 
as it does for wind, nuclear and natural gas. I think this is a 
mistake, since the cheapest unit of power is the one we don't have to 
produce.
    Several states include efficiency as a resource in their own 
Renewable Electricity Standards (RES). Even more states have their own 
separate Energy Efficiency Resource Standards (EERS). If these states 
recognize the value of efficiency as a ``resource'' shouldn't it also 
be recognized in Clean Energy Standard or a separate federal Energy 
Efficiency Resource Standard?
    Answer. The Administration agrees that energy efficiency can play a 
vital role in securing our energy future. To that end, the 
Administration is pursuing a number of policies and programs to 
increase energy efficiency, including a range of activities already 
underway at the Department of Energy as well as proposals such as 
HOMESTAR and the Better Buildings Initiative--as detailed in the 
President's recently released Blueprint for Securing America's Energy 
Future. The President's CES proposal also explained that a CES should 
be paired with robust energy efficiency programs and measures that will 
lower consumers' energy bills and should include provisions to help 
manufacturers invest in technologies to improve efficiency and reduce 
energy costs.
    We look forward to working with Congress to develop legislation 
that achieves these clean energy goals.
    Question 2. I would like to get your thoughts on the President's 
proposed Clean Energy Standard (CES). From what I have seen, the 
proposal doesn't list energy efficiency as a qualifying ``resource'', 
as it does for wind, nuclear and natural gas. I think this is a 
mistake, since the cheapest unit of power is the one we don't have to 
produce.
    What role do you see for highly efficient combined heat and power 
(CHP) and waste heat recovery systems in a Clean Energy Standard? 
Aren't these systems just as efficient and ``clean'' as natural gas, 
which IS included in the President's CES?
    Answer. The Administration agrees that energy efficiency--including 
in the industrial sector--can play a vital role in securing our energy 
future. That's why the Administration has been aggressively pursuing 
industrial energy efficiency through the Department of Energy's 
Industrial Technologies Program.
    With respect to a Clean Energy Standard, the Administration 
believes that there are targeted opportunities to promote energy 
efficiency as part of a CES, particularly in the industrial sector. As 
discussed in the President's Blueprint for Securing America's Energy 
Future, a CES should include provisions to help manufacturers invest in 
technologies to improve efficiency and reduce energy costs. A CES could 
also be designed to award credit for electricity generated from onsite 
CHP and WHR facilities, in a way that would recognize the efficiencies 
gained through cogeneration. We look forward to working with Congress 
to explore these and other opportunities to promote energy efficiency 
and investment in clean energy in the industrial sector and throughout 
the economy.
                  federal government energy efficiency
    Question 3. As you know, the federal government is the single 
largest energy user in the country. In fact, in FY 08 federal 
government buildings and their operations consumed 1.5 percent of ALL 
energy consumption in the U.S. The bill for the taxpayer that year for 
federal government energy use was $24.5 billion, of which $7 billion 
was spent on the energy needs for federal buildings.
    Finding ways to make the federal government more energy efficient 
should be a top priority for our national energy policy. There are 
significant opportunities out there to save taxpayer dollars and 
improve the quality of service that our taxpayers expect from their 
government.
    Can you tell me what opportunities you see in making our federal 
government more energy efficient?
    Answer. Identifying opportunities by evaluating Federal buildings, 
investing in the deployment of energy efficiency and conservation 
projects (ECMs), continually monitoring the performance of these 
projects, and benchmarking building performance annually is the best 
approach for increasing energy efficiency. Federal agencies are 
implementing this approach as prescribed under Section 432 of the 
Energy Independence and Security Act of 2007. So far, Federal agencies 
have evaluated approximately a third of the Government's 3 billion 
square feet of facility space and identified potential annual savings 
of 31 trillion Btu or 9 percent of facility energy use. Approximately 
$7 billion in potential investment was identified, including projects 
that could potentially save 6 billion gallons of water annually. The 
potential annual cost savings from implementing these projects is $600 
million. Key types of potential ECMs agencies identified are listed 
below ranked in terms of number of projects:

   Lighting improvements
   Water and sewer conservation systems
   Heating, ventilation, and air-conditioning improvements
   Building controls and automation systems/advanced metering
   Building envelope modifications
   Boiler plant improvements
   Energy-related process improvements
   Electric motors and drives
   Chiller plant improvements
   Chilled/hot water, steam distribution systems
   Distributed generation opportunities, including renewable 
        energy.

    Conservation of energy through institutional changes, such as 
implementation of operations and maintenance best practices, building 
commissioning, default procurement of energy-efficient equipment, and 
workforce engagement is also important and could contribute up to an 
additional 10 percent reduction in facility energy use.
    Question 4. As you know, the federal government is the single 
largest energy user in the country. In fact, in FY 08 federal 
government buildings and their operations consumed 1.5 percent of ALL 
energy consumption in the U.S. The bill for the taxpayer that year for 
federal government energy use was $24.5 billion, of which $7 billion 
was spent on the energy needs for federal buildings.
    Finding ways to make the federal government more energy efficient 
should be a top priority for our national energy policy. There are 
significant opportunities out there to save taxpayer dollars and 
improve the quality of service that our taxpayers expect from their 
government.
    Where are the gaps? Where should we be focusing our attention?
    Answer. Based on preliminary data received from federal agencies 
for FY 2010, the federal government has reduced its energy intensity 
(Btu per square foot) in buildings by 15 percent compared to the FY 
2003 baseline, meeting the goal set under the Energy Independence and 
Security Act of 2007. By the end of FY 2015, the goal is a 30 percent 
reduction. Recovery Act, regular appropriations and savings-financed 
investment of approximately $5.8 billion in FY 2009 and FY 2010 for 
efficiency improvements in Federal facilities should keep the 
Government on track toward the 2015 goal and meet the reduction targets 
for FY 2011 (18%) and FY 2012 (21%). Beyond that, DOE estimates an 
additional $5 to $6 billion in investment in facilities will be 
required to meet the ambitious goal of a 30 percent reduction in FY 
2015. Most of these projects will need to be accomplished through 
performance contracting arrangements that use the savings stream from 
reduced energy costs to finance the initial investments in capital 
improvements. Conservation of energy through institutional changes, 
such as agency leadership, implementation of operations and maintenance 
best practices, building commissioning, default procurement of energy-
efficient equipment, and workforce engagement also play an important 
role.
    Question 5. When I was Governor, I made energy efficiency in our 
state buildings a high priority. We were successful at it by utilizing 
energy performance contracting with energy service companies, such as 
Johnson Controls and Honeywell.
    Can you tell me how we can better utilize energy performance 
contracting within the federal government?
    Answer. Energy Savings Performance Contracts (ESPCs) as well as 
utility energy savings contracts (UESCs) allow federal agencies to 
accomplish energy savings projects without up-front capital costs and 
without waiting for Congressional appropriations. These are valuable 
tools and are particularly important if federal agencies are to meet 
their statutory and Executive Order goals in an era of budget 
constraints. The Department of Energy (DOE) awarded indefinite-
delivery, indefinite-quantity (IDIQ) contract to 16 Energy service 
Companies (ESCOs). Theseis ``umbrella'' contract was awarded to ESCOs 
and their support teams based on their ability to meet stringent terms 
and conditions and can be used for any federally-owned facility 
worldwide. The DOE IDIQ contract is designed to make ESPCs as 
practical, cost-effective and streamlined as possible for Federal 
agencies. In addition, DOE provides project support and program 
monitoring of contract use and effectiveness.
    Since the inception of the DOE program in 1998, 264 projects have 
been awarded and more than $2.5 billion has been invested in Federal 
energy efficiency and renewable energy improvements. These improvements 
have resulted in more than 312.2 trillion Btu saved and more than $6.6 
billion of cumulative energy cost savings for the federal government. 
With project investment of $440.2 million and $589.3 million, 
respectively, and combined cumulative savings of over 128 trillion Btu, 
FY 2009 and 2010 were the program's most productive years. However, 
meeting our government wide goals will require a substantial increase 
over even this level of utilization investment.
    Accordingly, we have undertaken a number of actions to strengthen 
DOE's management of the program--and will continue to look for ways to 
improve. We will shortly have in place a set of streamlined processes, 
which we will recommend to users, to shorten the cycle time it takes to 
design and award projects. We have recently modified the IDIQ contract 
to allow for a more streamlined approach to contractor selection--while 
preserving healthy competition among ESCOs at the task order level We 
require competitive bids for project financing. We have substantially 
enhanced our training program for contracting and energy management 
officials; we offer workshops, webinars, other web based, and on-site 
training and have, over the past four years, increased the number of 
trainees from slightly over 100 to 800--1,000 annually. We improved 
management and oversight of the program to ensure that savings are 
being fully realized. Additional areas of improvement be under 
consideration include: a mechanism to provide reduced and more 
consistent (i.e., less subject to market fluctuations) interest rates; 
combining federal and non federal funding for more comprehensive 
projects, and an examination of opportunities--not easily captured 
under the current program/business model--for large scale renewable 
energy projects on federal lands but not confined to an individual site 
or agency.
     Responses of Kathleen Hogan to Questions From Senator Portman
    Question 1. Thank you for testifying before the committee today. As 
the Deputy Assistant Secretary for Energy Efficiency, you play an 
important role in implementing federal policy as it relates to energy 
efficiency. I agree with the concept that energy efficiency is the 
``lowhanging'' fruit. By my count there are at least 19 active federal 
programs at the Department of Energy designed to incentivize the 
deployment or development of energy efficiency technologies. They focus 
on a number of different energy efficient areas, including energy 
efficiency in buildings, industrial manufactures, vehicles. They also 
use a number of different mechanisms to drive deployment including 
grants, loans, loan guarantees, and other direct or indirect regulatory 
incentives. As the Deputy Assistant Secretary for Energy Efficiency how 
do you coordinate the efforts of all these programs to ensure that we 
are making the most efficient investments in these technologies?
    Answer. The Office of Energy Efficiency and Renewable Energy takes 
very seriously its role in coordinating efforts across programs to 
ensure the Department is making appropriate investments based upon 
budgetary directives. EERE leadership meets regularly with program 
managers and staff on both a collective and individual basis. 
Individual programs track progress against metrics vetted by senior 
leadership, and these metrics help inform the conversation.
    Question 2. What metrics do you use to determine success or failure 
of these programs? How will EERE measure the investments in these 
programs against the actual energy efficiency benefits received?
    Answer. All of the EERE programs choose multiple metrics so that 
emerging clean energy technologies can be compared to competing 
conventional technologies. For renewable energy generation 
technologies, the levelized cost of energy (LCOE) is an important 
metric that incorporates key costs such as the initial capital 
requirement, siting, permitting and operations and maintenance. Goals 
for developing cost competitive biofuels, batteries, and hydrogen 
technologies are based upon the price of existing fossil fuel sources. 
Energy efficiency programs use metrics that calculate the amount of 
energy avoided and green-house-gases (GHG) at the point of consumption 
and overall lifecycle cost savings compared to existing technologies. 
Finally, all of the EERE programs assess the barriers associated with 
each of these metrics, and then develop more detailed technical targets 
(e.g. efficiency, power density, yield, etc.) to measure the success of 
the programs.
    Question 3. How do you ensure that there is no overlap with similar 
programs that are run out of the U.S. Department of Agriculture (USDA), 
the Small Business Administration, the Department of the Interior, and 
others?
    Answer. The Department is committed to regularly engaging with 
other agencies about program activities in order to prevent interagency 
overlaps. For example, regarding biomassrelated activities, DOE 
regularly coordinates through the Biomass Research and Development 
Board,\1\ which is an interagency collaborative composed of senior 
decisionmakers from federal agencies and the White House-including DOE 
and USDA (cochairs); the Departments of the Interior, Transportation, 
and Defense, the Environmental Protection Agency; the National Science 
Foundation; and the White House Office of Science and Technology 
Policy. The Board is charged with maximizing the benefits of federal 
programs and bringing coherence to federal strategic planning in 
biomass research and development, including minimizing unnecessary 
duplication of activities. Several other interagency formal and 
informal collaborations function to leverage existing expertise across 
agencies with similar missions and goals, such as Memoranda of 
Understanding (MOU), regular working group meetings, joint 
solicitations, and other mechanisms. Examples of MOUs signed over the 
last two years include one on hydrogen with the Army Corps of Engineers 
and the Interior Department, one on off-shore wind, marine and 
hydrokinetic devices with the Interior Department, and an updated MOU 
with EPA on Energy Star.
---------------------------------------------------------------------------
    \1\ The Board, as well as the Technical Advisory Committee and the 
annual solicitation, were established by the Biomass Research and 
Development Act of 2000, and later amended by Section 9001 of the Food 
Conservation and Energy Act of 2008.
---------------------------------------------------------------------------
    Question 4. The FY12 budget request asks for significant increases 
to promote security, a cleaner environment, and a more robust economy. 
The EERE budget has 12 of those programs that I referenced above, 
ranging from Biomass to weatherization, yet I can find no evidence that 
the past increases in funding have resulted in transformative 
improvement. Perhaps the historic method of channeling funds through 
the myriad DOE offices and programs is not the most efficient and 
effective manner of developing and deploying near-term and applied 
research in energy efficiency improvements into the market where it can 
actually be tested in real applications and against real market 
realities.
    Is there a better way to move energy efficiency improvements into 
the real world?
    Answer. The Department believes that increases in funding for EERE 
have resulted in transformative improvements for better energy 
security, a cleaner environment and a more robust economy. It is 
because of past funding increases that many of EERE's investments in 
energy efficiency and renewable energy projects are technologies in the 
marketplace today. For example, a battery technology developed by our 
Vehicles Program is emerging in plug-in hybrid electric vehicles (PHEV) 
currently entering the market. LED lighting developed by the DOE is now 
also emerging in the marketplace. Additionally, wind and solar markets 
are growing at 30% annually, employing technologies developed and 
sponsored by DOE. While there is a clear time step between development 
of a technology and commercial deployment, EERE seeks to accelerate 
that stage of market adoption working with the DOE Loan Guarantee 
Program.
    The improvements and achievements that have come out of EERE are 
not only due to record-breaking technological advances but also through 
the development of regulatory programs such as improved building codes 
and appliance standards. According to a study by the American Council 
for an Energy-Efficiency-Economy (ACEEE), `` peak capacity reduction 
from existing DOE appliance standards is expected to reach 72 GW in 
2010,'' or about 7 percent of the projected U.S. generating capacity.
    A partial list follows of EERE's fiscal year 2010 successes that 
support our national imperative for greater security, a cleaner 
environment and a more robust economy:
Solar Technologies:

   Established Solar America Communities, a 25-city effort to 
        rapidly increase the use and integration of solar energy in 
        across the country.
   Set a world record: a 27% efficient single junction solar 
        cell.
   Beat a previously held record (by 6.5%) by demonstrating a 
        18.5% efficient low-indium thin film (CIGS) solar cell.
Vehicle Technologies Program:

   Since 1993, Clean Cities coalitions and stakeholders have 
        displaced nearly 3 billion gallons of petroleum, and are on 
        track to displace 2.5 billion gallons annually by 2020.
   `Clean Cities' deployment efforts accounted for more than 
        700,000 of the alternative fuel vehicles (AFVs) on the road in 
        2009.
   In August 2010, the number of U.S. alternative fueling 
        stations topped 6,900, thanks to the coalition's role in 
        improving alternative fuel infrastructure.
   Reduced cost of PHEV Lithium Ion battery to $800 per 
        kilowatt-hour-a 20% reduction from 2008 baseline of $1000 per 
        kilowatt-hour.
Fuel Cell Technologies:

   Deployed nearly 120 fuel cell lift trucks at four of its 
        high-volume distribution centers across the country in 
        collaboration with the Department of Defense Logistics Agency 
        (DOD-DLA).
   As of February 2011, over 15,000 hydrogen indoor refuelings 
        have been performed at the Susquehanna, Pennsylvania site.
   Lowered the cost for fuel cells sized for automobile use to 
        $51/kw (assuming volume production), down from $275/kw in 2007.
Industrial Technologies Program:

   Set a world record by partnering with industry to build 35%-
        47% efficient small to medium gas engines for distributed power 
        generation.
   Verified a steel blast furnace using 30% less energy than 
        conventional designs.
   Partnered with Yahoo to create a data center operating with 
        25% less energy than conventional designs.
Biomass:

   Supported 29 integrated biorefineries in various stages of 
        completion. Each DOE dollar leverages $1.7 in private funding.
Buildings Technology Program:

   Supported the development of new standards for commercial 
        buildings that are expected to result in a 22% reduction in the 
        energy use of new commercial buildings.
   Supported the development of residential energy codes that 
        are expected to reduce the energy used by new residential 
        buildings by 30%.
   Issued eight appliance standards since January 2009 that 
        will save customers $260 billion dollars by 2030.
Federal Energy Management Program:

   Set a federal record: Implemented $589 million in Federal 
        Energy Savings Performance Contracts (ESPCs) that will result 
        in savings to the taxpayer of over $1.1 billion over the 
        contract lifetime.
Geothermal Technologies:

   Demonstrated that geothermal brine can be a source of 
        lithium and other strategic minerals that can be used in 
        batteries.
Water:

   Launched 7 new hydroelectric facility upgrades--the first in 
        20 years.
Wind:

   Completed advanced computer designs of 3 highly innovative 
        deep off-shore wind designs.

    Question 5. If continuing to increase the funding through EERE is, 
in your opinion, the best approach, how do you propose that EERE will 
ensure us that these investments are the RIGHT investments?
    Answer. EERE has a balanced portfolio of research, development, 
demonstration and deployment (RDD&D) programs aimed at improving the 
energy efficiency of our economy and increasing the productive use of 
domestic renewable energy resources. EERE programs provide a vital link 
between advances in basic research and the creation of commercially 
successful products and services. EERE does this by supporting a 
portfolio of strategic applied research and development projects, and 
identifying ways that national policies can create strong markets for 
innovations that can be deployed into widespread use by commercial 
enterprises, creating new businesses and jobs. EERE continues work with 
stakeholders to identify the strategies, plans, priorities and changes 
needed to produce the greatest energy savings and public value.
    To ensure these are the right investments, EERE uses strategic 
analysis to identify and prioritize the most appropriate investments in 
our portfolio. This process incorporates an in-depth integrated review 
and shared vision of the applied energy programs. EERE strategically 
develops a portfolio of technically plausible and productive energy 
scenarios that meet U.S. energy demand while improving energy 
efficiency and reducing energy use and GHG emissions by more than 80 
percent by 2050. Coupled with detailed technology-specific road-mapping 
and analysis, these investment decisions are also driven by a 
comprehensive set of economic, environmental, and energy security 
mandates.
    Question 6. When energy efficiency standards and the subsequent 
testing and certification requirements affecting commercial food 
equipment are updated or changed, is the commercial food equipment 
(cooking, refrigeration, warewashing, etc.) industry consulted equally 
as part of DOE's outreach to stakeholder groups?
    Answer. To the extent the equipment in question is covered by DOE's 
regulatory program, the stakeholders, including manufacturers, are 
consulted equally. In the case above, commercial refrigeration 
manufacturers and the trade organization that represents the majority 
of the industry (i.e. AHRI) are major stakeholders involved in both the 
historical and current rulemaking activities.
                                 ______
                                 
      Response of Stephen Yurek to Question From Senator Bingaman
    Question 1. Mr. Yurek, you point out that negotiating consensus 
standards among stakeholders provides certainty about the outcome, 
avoids litigation, saves rulemaking costs, and builds trust among 
organizations where trust did not exist before.
    Some argue that Federal regulation of appliance efficiency is 
inappropriate government intrusion in the marketplace. After 25 years 
of this program, what do you believe the impact of these regulations 
has been on your industry, on job creation, and on the U.S. economy?
    Answer. After 25 years of appliance efficiency programs, the 
manufacturers of heating, cooling and water heating products have 
learned to incorporate the necessary efficiency levels in their product 
design, and the mix of products offered to the consumer. Our industry, 
like many others, is concerned with the rulemaking process within the 
pertinent agencies. No industry can survive if its product requirements 
vary among the 50 states. In addition, stakeholder involvement in the 
rulemaking process does not always lead to favorable regulations. 
Establishing efficiency levels through legislation allows for more 
stakeholder involvement and a more transparent process.
    With a stable regulatory environment, our members are able to offer 
customers a choice of products, offering both minimum efficiency 
products and higher efficiency products for consumers who wish for even 
higher energy savings. Knowing the next regulatory benchmarks allows 
engineers to develop the next generation of heating and cooling 
equipment and allows manufacturers to plan for production.
    Finally, the energy savings produced by minimum efficiency 
standards have saved money for electrical utilities and households 
alike. That is money that can be invested in other parts of the 
economy.
     Responses of Stephen Yurek to Questions From Senator Murkowski
    Question 1. What are the major differences between moving an 
appliance standard through the regulatory process and the legislative 
process?
    Answer. Broadly speaking, moving an appliance standard through the 
regulatory process is more restrictive and the scope of the regulation 
is very tightly defined as opposed to moving a standard through the 
legislative process. With legislation, an appliance standard can be 
created that applies beyond the boundaries of what the Department of 
Energy is legally allowed to do under EPCA. In the context of the AHRI 
consensus agreements, there is no regulatory pathway that can allow for 
the building codes provision that is contained in INCAAA.
    Additionally, in the legislative process, stakeholders have the 
opportunity to come together and mutually agree to appropriate 
standards; this is unlike the regulatory process where the standards 
are initiated by the DOE and then stakeholders are allowed only to 
provide comments. Any regulation from an agency may change 
substantially from the proposed rule to the final rule regardless of 
stakeholder comments--the final rule is at the discretion of the DOE. 
The legislative process is a more transparent and direct process that 
allows for substantive stakeholder influence throughout.
    Question 2. How was consensus achieved on the proposed standards 
and how do you define ``consensus'' in this context? Was consensus 
achieved in 2007, as it relates to the new standards for the 
incandescent bulb?
    Answer. The proposed standards were agreed upon after roughly a 
year and a half of conversations and negotiations between HVAC and 
water heater manufacturers and environmental advocacy groups, such as 
the Alliance to Save Energy (ASE); the American Council for an Energy 
Efficient Economy (ACEEE); the Natural Resources Defense Council 
(NRDC); the California Energy Commission (CEC); and others. Consensus, 
in this context, is defined as a negotiated agreement between various 
parties but does not imply unanimity amongst all stakeholders.
    Question 3. Please describe how your industry has been able to 
enjoy a $2 billion positive balance of trade.
    Answer. AHRI manages a strict voluntary certification program for 
HVACR and water heating manufacturers. Our stringent standards and 
exhaustive testing regimen are a source of industry pride. Due to these 
rigorous standards, it is more cost effective for manufacturers to 
produce their equipment and components in the United States and North 
America. The expense of shipping large and irregularly sized products 
has ensured that the majority of our products remain manufactured in 
the United States. As efficiency standards have increased so has the 
size of the equipment and the sophistication of the testing procedures, 
leading our members to invest in US based manufacturing distribution 
facilities.
    Question 4. What opportunities do we have to ensure that 
manufacturing jobs, such as those you represent, stay in the United 
States?
    Answer. The best way to promote domestic manufacturing is to 
support policies that ensure the United States remains a highly 
attractive place to run a business. There are numerous opportunities to 
achieve this goal including: promoting a progressive international 
trade policy that will open global markets while reducing tariffs and 
regulatory barriers; supporting domestic tax policies that are 
favorable for manufacturers; supporting health care reforms that drive 
down costs to businesses; and supporting a regulatory environment that 
balances compliance costs and benefits of regulation while providing 
certainty for manufacturers.
    Question 5. Please describe whether Federal standards on appliances 
help or hurt American manufacturers.
    Answer. In 1987 President Reagan signed the National Appliance 
Energy Conservation Act (NAECA) into law. Among other provisions, this 
legislation amended EPCA to strengthen federal preemption by making it 
much more difficult for a state to obtain a preemption waiver for 
appliance standards. Federal standards generally help manufacturers by 
providing a uniform regulatory environment for businesses to operate in 
therefore avoiding a patchwork of regulations that varies from state-
to-state.
      Responses of Stephen Yurek to Questions From Senator Portman
    Question 1. I think one of the largest barriers to wide-spread 
deployment of energy efficiency technologies on both the industrial/
commercial side and the residential side is education. As a consumer it 
is pretty difficult with the tools available to us today to wrap your 
head around how much energy you use in a day or a year, and then it is 
even tougher to figure out how much a certain energy efficiency 
technology can save eventually save you. I believe this uncertainty 
makes it hard for a consumer to commit to investing the upfront money 
in energy efficiency technology, and I think it is one of the reasons 
why so many get concerned when governments talk about mandates on 
energy efficiency. Simply put, the uncertainty leaves a lot of money on 
the sidelines. Do you agree? If so, what is the solution?
    Answer. It is ironic, that in today's ``Information Age'' consumers 
are often overwhelmed by the amount of information available to them, 
sometimes leading to a paralysis in the decision making process. 
Through AHRI's certification program, our industry certifies that the 
products manufactured meet the advertised energy efficiency. Using 
AHRI's website, a consumer or contractor can easily input the required 
information and see the energy consumption data of the heating, cooling 
or water heating product. The information provided will tell the 
consumer if the equipment simply meets the federal efficiency minimums 
or exceeds them, qualifying for any potential tax credits.
    Question 2. How do we develop metrics for consumers to base their 
decisions that is accurate across many different consumers, 
environments, and scenarios?
    Answer. The strength of S.398, which is based on a consensus 
agreement signed by HVACR manufacturers and energy efficiency 
advocates, are the regionally based standards for heating and cooling 
products. Traditionally, one national minimum standard was applied to 
heating and cooling products. Based on a NOAA formula, stakeholders 
used Heating Degree Days from each state in order to divide the country 
into three regions. Using HDD average within these regions, we 
negotiated appropriate efficiency levels for central air conditioning, 
heat pumps and furnaces. This ensures that no unnecessary efficiency 
burden is placed on consumers who may not have a great need for heating 
or cooling, depending on where they live. Consumers will be able to 
purchase HVAC equipment knowing that the minimum efficiency is 
appropriate for their local heating and cooling needs.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

                                                     March 9, 2011.
Hon. Jeff Bingaman,
Hon. Lisa Murkowski,
Energy and Natural Resources Committee, 304 Dirksen Senate Building, 
        Washington, DC.
    Dear Chairman Bingaman and Ranking Member Murkowski: Consumers 
Union,\1\ Consumer Federation of America, National Consumer Law Center, 
Public Citizen and National Consumers League strongly support 
efficiency standards for lighting, appliances, electronics, buildings, 
and vehicles. We commend you for your leadership and effective 
bipartisan efforts to promote energy efficiency. Because of the cost 
savings for consumers and general public benefits of current lighting 
standards, we oppose current efforts to repeal lighting standards 
scheduled to go into effect on January 1, 2012.
---------------------------------------------------------------------------
    \1\ Consumers Union of United States, Inc., publisher of Consumer 
Reports, is a nonprofit membership organization chartered in 1936 to 
provide consumers with information, education, and counsel about goods, 
services, health and personal finance. Consumers Union's income is 
solely derived from the sale of Consumer Reports, its other 
publications and services, fees, noncommercial contributions and 
grants. Consumers Union's publications and services carry no outside 
advertising and receive no commercial support.
---------------------------------------------------------------------------
    Minimum efficiency standards provide basic assurance of efficient 
performance for many significant consumer purchases. Efficiency 
standards have enhanced the numerous lighting options for consumers to 
choose from, as inefficient models have been scheduled to phase out of 
the market and new options to replace them have been developed. The new 
standards are estimated to save consumers billions of dollars in energy 
costs over the coming years. Depending on the technology selected, 
consumers can save between $20 and $90 per 100W fixture by selecting a 
more efficient bulb, as shown in the chart below.
----------------------------------------------------------------------------------------------------------------
                                                                 Operating cost    Total cost
          Type of bulb              Watts        Cost/bulb      over 10,000 hrs   over 10,000   Consumer savings
                                               (longevity)\2\         \3\             hrs        over 10,000 hrs
----------------------------------------------------------------------------------------------------------------
Traditional Incandescent          100        $.75  (1,000 hrs)  $115             $122.50        Baseline cost
----------------------------------------------------------------------------------------------------------------
Efficient Incandescent (halogen)  72         $2.00  (1,000      $82.80           $102.80        $19.70
                                              hrs)
----------------------------------------------------------------------------------------------------------------
Compact fluorescent (CFL)         26         $1.50  (6,000      $29.90           $32.90         $89.60
                                              hrs)
----------------------------------------------------------------------------------------------------------------
Solid State Lighting\4\ (LED)     13         $50  (50,000 hrs)  $14.95           $64.95         $57.55
----------------------------------------------------------------------------------------------------------------
\2\ Performance based on manufacturer projections. Products in use are likely to see variation.
\3\ Assumes national average of 11.5 cents/kWh.
\4\ 100-Watt replacement: LEDs are still in development and may not yet meet 1600-lumen equivalency. Lighting
  fact labels will be required beginning in 2012, which will enable consumers to verify equivalency.

    Another way of looking at the consumer savings is how quickly 
efficient bulbs would pay for themselves and start providing consumers 
a return on their investment. If a consumer replaced one 100-watt 
incandescent ($0.75) with one 72W efficient incandescent ($2), payback 
would accrue approximately one-third of the way through the life of the 
bulb, in about 388 hours or 6 months, assuming the bulb is used 2 
hours/day. If the consumer instead selected a 26-watt CFL ($1.50), the 
savings would begin after a mere 88 hours of usage, and the benefits 
would accrue long beyond that due to the longer bulb life. For a 13W 
LED ($50) replacement, savings would begin much later, after 4,625 
hours, but the savings over the life of the bulb are significant at 
$487.75, and the purchase price of LED bulbs is expected to drop 
significantly.
    Improving safety throughout the lifecycle of a product is also very 
important, and Congress should develop a comprehensive recycling 
program for light bulbs, particularly CFLs, in order to recapture 
mercury or other possible toxics used in new light bulbs and prevent 
them from contaminating landfills. Recycling programs may also be 
required for LEDs as we learn more about the toxic materials present. 
However, it is important to note that CFLs save between 2 and 10 times 
more mercury from the environment than is used in the bulb because 
their efficiency avoids mercury pollution that would otherwise be 
emitted from coal-fired power plants.
    Well-designed efficiency standards have helped drive the market 
towards higher quality, more innovative technologies that cost less for 
consumers to operate over the life of the product. Efficiency standards 
also help lower costs of new energy efficient technology by providing 
economies of scale. The result is higher efficiency products that are 
more affordable to own and operate and more widely available.
    In 1999, the CFLs Consumers Union tested cost $9 to $25 per bulb. 
In contrast, those tested in 2010 only cost $1.50 to $5 per bulb, had 
shown marked improvement in performance, and provided significant cost 
savings to consumers. Largely as a result of efficiency standards, 
refrigerators now use 70% less energy than they did thirty years ago, 
despite the fact that the average cost has declined and enhanced 
features have multiplied. Another dramatic example of the benefit of 
efficiency standards has been increasing fuel economy standards for 
vehicles, which have saved consumers billions of dollars in fuel costs.
    Efficiency standards are also important because they provide a host 
of public benefits in addition to those accrued by individual 
consumers. It is often the case that some choices are pre-determined 
for consumers in the built environment. Utility ratepayers, especially 
renters and new homeowners, often move into homes where they did not 
select the lighting or appliances in the home. Improved minimum 
standards of efficiency help curtail the utility bills they must pay 
when they did not have the option to select cost-effective efficiency 
measures that would benefit them. Lower utility bills and decreased 
energy demand help all consumers and ratepayers by taking pressure off 
the power grid, decreasing the need for more power plants, and 
decreasing pollution in their communities.
    We strongly believe that Congress should continue to move 
efficiency standards forward, not backward. We will continue to provide 
guidance for consumers in comparing new lighting options and 
understanding new lighting labels. We thank you again for your 
commitment to energy efficiency that benefits consumers and urge you to 
oppose any repeal of lighting efficiency standards.
    We thank you for your attention to this important consumer matter.
            Sincerely,
                                 Shannon Baker-Branstetter,
                                                   Consumers Union.
                                           Sally Greenberg,
                                         National Consumers League.
                                         Mel Hall-Crawford,
                                    Consumer Federation of America.
                                              Tyson Slocum,
                                                    Public Citizen.
                                             Charlie Harak,
 National Consumer Law Center, on behalf of its low-income clients.
                                 ______
                                 
            National Association of State Energy Officials,
                                     Alexandria, VA, March 9, 2011.
Hon. Jeff Bingaman,
Chairman.
Hon. Lisa Murkowski,
Ranking Member, Senate Energy and Natural Resources Committee, 304 
        Dirksen Senate Building, Washington, DC.
    Dear Chairman Bingaman and Ranking Member Murkowski: On behalf of 
the National Association of State Energy Officials (NASEO) we wish to 
express our strong support for the Implementation of National Consensus 
Appliance Agreements Act of 2010 (S. 398), which reduces the regulatory 
burden on appliance manufacturers while reinforcing appliance 
standards. We also encourage your continued support for the bipartisan 
Energy Independence and Security Act of 2007 lighting provisions, which 
are helping move the market toward more innovative and economically 
efficient options for consumers.
    We strongly support S. 398's provisions and strengthening of 
national energy efficiency standards for refrigerators, furnaces, and 
other appliances. Improved standards save consumers money, allow for 
the more efficient use of resources, and improve the nation's 
competitive position overall. The bill's flexible approach aids 
manufacturers in meeting standards and allows industry to innovate 
while reducing waste and energy costs. This type of energy policy 
approach is foundational to the economic prosperity of the United 
States. This bill is among the most powerful and practical means to 
provide consumers with options to operate their homes and businesses 
more efficiently and at lower costs.
    In addition, NASEO encourages your support for continuing the 
important transformation already underway in adopting more innovative 
lighting solutions as envisioned in the bipartisan Energy Policy Act of 
2007 signed by President Bush. Moving the nation from a technology that 
is more than 100 years old and in the ``rearview mirror'' of our global 
competitors to more modern lighting solutions that offer broad economic 
benefits at lower costs benefits our states' economies and the nation. 
NASEO and our 56 State and Territory members share the committee's goal 
to strengthen the nation's economy through sound energy policy 
advances. We are encouraged by the thoughtful policies contained in S. 
398, and we pledge to work with you to advance this important work.
            Sincerely,
                                               David Terry,
                                                Executive Director.
                                 ______
                                 
  Statement of Kateri Callahan, President, The Alliance to Save Energy
    On behalf of The Alliance to Save Energy, I would like to thank you 
for the opportunity to provide comments on the many benefits S.398, the 
Implementation of National Consensus Appliance Agreements Act of 2011 
and on the harm to the nation that would result from repealing the 
earlier standards on lighting via S.395, the Better Use of Light Bulb 
Act.
    The Alliance to Save Energy is a non-profit coalition of business, 
government, environmental and consumer leaders. We support energy 
efficiency as a cost-effective energy resource under existing market 
conditions and advocate energy-efficiency policies that minimize costs 
to businesses and to individual consumers. Energy efficiency is 
America's cleanest, fastest, cheapest, and most abundant energy 
resource.
    It is vital to the future of our energy system that this committee 
put its full support behind INCAAA. This bill would codify the 
consensus appliance standards created by the appliance manufacturers, 
efficiency advocates, states and consumer groups. It contains improved 
standards for HVAC systems, including furnaces, heat pumps and air 
conditioners, which take advantage of the latest technologies and 
efficiency potential. It also would improve standards for many 
currently covered home appliances, such as refrigerators, freezers, 
clothes washers, dryers, and dishwashers to maximize cost-effective 
energy savings. In addition, it would create new standards for some 
previously overlooked products, including some inefficient types of 
outdoor lighting.
    Our colleagues at the American Council for an Energy-Efficient 
Economy estimate that INCAAA would, by 2030, save the United States 
about 850 trillion Btus of energy each year--roughly the energy use of 
4.6 million homes. That's more energy than was used by the entire state 
of Connecticut or West Virginia in 2008. According to these estimates, 
the net economic savings to consumers would be $43 billion through 
2030. Because consensus appliance standards have historically enjoyed 
bipartisan support, INCAAA presents an opportunity for Congress to 
achieve real savings for taxpayers while increasing business 
competitiveness--a win, win in today's economy.
    While wide-reaching, the bill covers a specific list of products:

   Residential appliances--refrigerators, freezers, clothes 
        washers, clothes dryers, dishwashers and room air conditioners
   Residential heating, cooling, and water heating equipment--
        furnaces, central air conditioners, heat pumps, water heaters, 
        heat pump pool heaters and service over the counter 
        refrigerators; and
   Drinking water dispensers, hot food holding cabinets and 
        portable electric spas.

    In addition, the agreements include some important changes to 
improve and expedite the Department of Energy appliance standards 
program, and needed technical corrections to standards enacted in 2005 
and 2007.
    INCAAA represents the sixth set of consensus standards to come 
before Congress to date, the first of which were signed into law by 
President Reagan in 1987 and again in 1988, followed by standards 
signed into law by President George H.W. Bush in 1992 and President 
George W. Bush in 2005 and 2007. INCAAA builds on the success of 
existing standards, which according to analysis by ACEEE have created 
over 340,000 net jobs.
    As you can see from the numbers I have cited, the appliance 
standards program is critical for improving energy and economic 
efficiency. In 2010 alone, appliance standards reduced national non-
transportation energy use by 7 percent-more than the annual energy 
consumption of the state of New York. Enactment of S. 398 will reduce 
energy use, save consumers money, improve the environment, and create 
new jobs.
    The Alliance would also like to strongly urge the committee to 
reject S.395. The standard would not ban incandescent bulbs as it has 
been reported; it merely requires bulbs to meet a minimum level of 
energy efficiency, a common requirement for many appliances. The 
standard has already spurred innovation in the field of advanced 
lighting technologies. General Electric, Phillips, and Sylvania have 
all developed advanced incandescent light bulbs that are now available 
on the market that meet the standard--years in advance.
    The new standards expand consumer choice. In addition to the new 
energy-efficient incandescents, consumers will also be able to choose 
from CFLs and LEDs. Those choices will give consumers a myriad of 
lighting options that meet their color, brightness and other light bulb 
preferences while using less energy.
    Ninty percent of the energy in traditional incandescent bulbs is 
wasted as heat. The standard will save more than $10 billion / year 
(roughly the same as all homes in Texas combined). Many of these new 
advanced incandescent bulbs and florescent bulbs are made in the US or 
made of US-manufactured components.
    Over the course of 30 years, the more efficient lighting is 
expected to:\1\
---------------------------------------------------------------------------
    \1\ NRDC, Shedding New Light on the U.S. Energy Efficiency 
Standards for Everyday Lightbulbs, http://www.nrdc.org/energy/
energyefficientlightbulbs/files/SheddingNewLightFS.pdf.

   Provide electric bill savings of more than $10 billion per 
        year (roughly the same as all homes in Texas combined)
   Provide energy savings equivalent to the production of 30 
        large power plants; and
   Mitigate global warming pollution of approximately 100 
        million tons of carbon dioxide per year

    By approving S.398 and rejecting S.395, the Committee will advance 
the United States as an international leader on energy efficiency. 
Additionally, these actions will help to save thousands of jobs as well 
as billions of dollars in energy costs based on the research cited 
above. I urge the committee to vote in favor of achieving savings for 
taxpayers through energy efficiency.
    Thank you for your consideration of my testimony.
                                 ______
                                 
                                            The Home Depot,
                                                     March 9, 2011.
Hon. Jeff Bingaman,
U.S. Senate, 703 Hart Senate Office Building, Washington, DC.
    Dear Senator Bingaman, The Home Depot is the largest supplier of 
lighting in the United States. Since the enactment of the Energy 
Independence and Security Act of 2007, we have been diligently working 
with our manufacturing partners to offer consumers innovative and cost-
effective alternatives to incandescent bulbs and will continue to 
develop new products such to help our customers save money and energy. 
We're particularly excited about our offerings in LED and high-
efficiency incandescent bulbs.
    The Home Depot has partnered with leading LED manufacturers 
including Philips, Lighting Science Group and Cree enabling us to be 
the first in the market to offer cost-effective and most 
technologically advances LED bulbs available. LED bulbs are the next 
generation in lighting--using up to 50 percent less energy than CFLs 
and up to 85 percent less energy than traditional bulbs without 
sacrificing light quality. In addition to being energy-efficient, their 
life is much longer, cutting down both operating costs and 
inconvenience of maintenance. LEDs also dim, have no potentially 
dangerous mercury and great color. LED bulbs have been available in all 
The Home Depot stores since September 2010.
    California began a multi-year phase-out of incandescent bulbs in 
January 2011. Home Depot associates in the lighting departments at all 
232 California stores have received specified training to provide the 
best service and information to our customers. Additionally, we 
developed special signage for California stores with information about 
their lighting options.
    While it is too early to know how consumers nationwide will respond 
to the phase-out, The Home Depot has seen a very positive response to 
our growing suite of energy efficient lighting options. Please see the 
enclosed document for more on the options currently available to 
customers.
    We would be happy to provide additional updates as more information 
from the marketplace becomes available.
            Sincerely,
                                              Kent Knutson,
                              Vice President, Government Relations.
                     attachment.--lighting options
LED
    A LED is a light emitting diode capable of illuminating any space 
in your home while dramatically reducing maintenance and replacement 
costs. Replacing standard light bulbs with energy efficient LED bulbs 
will bring you immediate savings on your electricity bill. LED bulbs 
supply just as much light as your old bulbs but use far less 
electricity. In fact, the innovative technology uses up to 85 percent 
less energy than incandescent bulbs, and up to 50 percent less energy 
than CFL bulbs. The lights are reliable, safe and durable with no 
moving parts, and generate a high level of attractive brightness. LED 
bulbs also have an exceptionally long life expectancy that is 100 times 
longer than incandescent bulbs. Each bulb can last up to 100,000 hours, 
or 11.42 years. The Home Depot offers a proprietary brand of LEDs under 
the EcoSmart name, including a bulb that retails for $17.97 and is a 
40W equivalent, offering 429 lumens with a 50,000 hour expected 
lifetime, or 40 years, making it the most affordable bulb of its kind 
in the market to date.
CFL Light Bulbs
    CFLs, or compact fluorescent lights, are an ideal low-energy bulb 
for those environmentally-conscious consumers who are also looking to 
save money on their energy bills. CFL bulbs emit the same amount of 
light as traditional bulbs, but use 75 percent less energy. These bulbs 
also last approximately 10 times longer than incandescent bulbs, a 
total of seven to nine years, and pay for themselves in just three to 
six months. Over the lifetime of the bulb, each CFL can save you up to 
$30 of energy costs. (Note: The Home Depot also is among the few 
retailers to offer a CFL recycling program)
High-Efficiency Incandescent Bulbs
    The first high-efficiency incandescent bulbs to emerge have been 
Philips Eco Vantage Line. While bulbs cost $1.50 each, the bulbs also 
pay for themselves since they last three times as long and are 30 
percent more efficient. A 70-watt Eco Vantage Energy Saver, available 
at The Home Depot, provides the same amount of light as a traditional 
100-watt incandescent bulb. We also carry a Phillips 60-watt equivalent 
that is 800 lumens. Researchers have been able to produce incandescent 
light bulbs with up to 50 percent efficiency, so expect more innovation 
here, soon.
    For more information, please visit www.homedepot.com/lighting
                                 ______
                                 
                   International Bottled Water Association,
                                     Alexandria, VA, March 9, 2011.
Hon. Jeff Bingaman,
Chairman, U.S. Senate Committee on Energy and Natural Resources, 703 
        Hart Senate Office Building, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, U.S. Senate Committee on Energy and Natural Resources, 
        709 Hart Senate Building, Washington, DC.
    Dear Chairman Bingaman and Ranking Member Murkowski, The 
International Bottled Water Association (IBWA) supports S. 398, the 
Implementation of National Consensus Appliance Agreements Act of 2011 
(INCAAA), that includes energy efficiency standards and test procedures 
for bottle-type water dispensers.
    IBWA is the national trade association representing all segments of 
the bottled water industry including spring, artesian, mineral, 
sparkling, well, groundwater and purified bottled waters. Founded in 
1958, IBWA's approximately 750 member companies in the United States 
and throughout the world include bottled water dispenser manufacturers, 
bottlers, suppliers, and distributors.
    The bottle-type water dispenser standards and test procedures 
proposed in S. 398 will aid manufacturers by adopting a uniform 
national standard across the country, instead of state standards which 
can vary slightly from state to state. The national standard will save 
a substantial amount of energy and reduce consumer operating costs 
while simultaneously providing consumers with a range of efficient 
products. IBWA is committed to environmental sustainability and 
reducing the industry's environmental footprint, which is already one 
of the lowest in the beverage industry.
    Thank you for consideration of our comments. Please do not hesitate 
to contact us if you have any questions or if we can ever he of any 
further assistance to you.
            Sincerely,
                                            Joseph K. Doss,
                                                   President & CEO.
                                 ______
                                 
             National Association of Manufacturers,
                               Energy and Resources Policy,
                                                    April 11, 2011.
    Dear Chairman Bingaman and Ranking Member Murkowski:

    The National Association of Manufacturers (NAM) thanks you for 
introducing S. 398, the Implementation of National Consensus Appliance 
Agreement Act of 2011 (INCAAA) and your leadership. We submit this 
letter in support of this measure.
    By way of background, the NAM is the largest manufacturing 
association in the U.S., representing over 11,000 small, medium and 
large manufacturers in all 50 states. We are the leading voice in 
Washington, D.C. for the manufacturing economy, which provides millions 
of high-wage jobs in the U.S. and generates more than $1.6 trillion in 
GDP. In addition, two-thirds of our members are small businesses, which 
serve as the engine for job growth.
    Our mission is to enhance the competitiveness of manufacturers and 
improve American living standards by shaping a legislative and 
regulatory environment conducive to U.S. economic growth. While the 
Manufacturers support environmental regulations designed to protect the 
environment and public health, we consistently oppose regulations that 
create adverse economic impacts on manufacturing without providing any 
real environmental or public protection.
    The manufacturing sector of American society has much to gain from 
efficiency measures. Manufacturers use one-third of our nation's energy 
and are directly affected by the cost of energy in making products as 
well as by the cost of maintaining office operations. It is widely 
acknowledged that energy efficiency offers immediate and cost-effective 
opportunities to cut these costs. Therefore, we support S. 398, the 
Implementation of National Consensus Appliance Agreement Act of 2011 as 
it provides regulatory certainty while creating rigorous energy 
efficiency standards.
    Again, the NAM thanks you for introducing S. 398, The 
Implementation of National Consensus Appliance Agreement Act of 2011, 
and your leadership on this issue.
            Sincerely,
                                             Mahta Mandavi,
                                                          Director.

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