Energy Star: Providing Opportunities for Additional Review of EPA's Decisions Could Strengthen the Program
Published: 2011-09-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: American consumers, businesses, utilities, and federal and state agencies rely on the Energy Star product labeling program to identify more efficient products that lower their energy costs. Even with the program's successes, several reports by GAO and others have identified weaknesses in the Energy Star program. The program, which began in 1992 and was reauthorized in 2005, has been jointly administered by the Environmental Protection Agency (EPA) and the Department of Energy (DOE). In 2009, the agencies signed a memorandum of understanding (MOU) that outlined changes to address these weaknesses. The changes included identifying EPA as the lead agency, clarifying the roles and responsibilities of each agency, as well as instituting third-party testing of products. GAO was asked to examine (1) the status of EPA's and DOE's implementation of changes to the Energy Star program under the MOU and (2) program partners' views of the Energy Star program and changes that are under way. To examine the status of the changes, GAO reviewed guidance and eligibility criteria and interviewed various program partners to gather their views. The results of these interviews are not generalizable, but provided insights on changes to the Energy Star program.
section_title: What GAO Found
paragraphs: EPA and DOE have made considerable progress in their ongoing efforts to implement significant changes to the Energy Star program agreed to in the 2009 MOU. These changes include expanding product qualification and verification testing, updating program requirements, and piloting a program to promote the most efficient Energy Star products. In 2010, EPA developed and instituted new third-party certification procedures to qualify products for the Energy Star label. The new procedures took effect on January 1, 2011. As of May 2011, EPA had received about 10,000 new product submissions. In addition, EPA and DOE expanded their testing programs to verify that labeled products continue to meet program requirements. As part of these efforts, EPA is finalizing standard procedures for disqualifying products that fail the verification testing. EPA has also taken steps to update program requirements by broadening the number of product categories covered by the program and updating performance specifications for products that are already part of the program. Since 2009, EPA and DOE have finalized specifications for two new residential product categories and EPA is working on five additional product categories. EPA has a schedule to review and update the specifications for all existing product categories by 2013. In May 2011, EPA established a pilot program to recognize the most efficient products among those that qualify for the Energy Star label in seven product categories. As of August 2011, 78 models in five categories had received recognition as the most efficient products. The pilot program will run into 2012, when EPA will evaluate whether it should continue beyond 2012. Program partners we interviewed--including manufacturers, retailers, and utilities--generally had positive views of the Energy Star program but raised key concerns about the program's ongoing changes. Program partners cited the overall strength of the Energy Star brand itself and its wide recognition by American consumers and said that the loss of the program would be detrimental to their business. Further, these program partners told us they generally supported MOU steps taken to clarify agencies' roles and establish a single agency as the brand manager. However, program partners also raised three key concerns. First, program partners expressed concern that the ongoing changes are shifting the voluntary nature of the program to include elements of a more traditional regulatory program, but without the procedural safeguards of such programs. Specifically, many program partners told us that the Energy Star label is necessary to sell in many markets. Unlike traditional regulatory programs, however, Energy Star does not have an independent administrative review process where adverse agency decisions related to setting specifications and disqualifications can be reviewed prior to seeking judicial review. Program partners also identified a lack of transparency in EPA's key decisions, including how it sets performance specification levels. Second, many program partners told us the pilot program to identify the most efficient products may undermine the value of the Energy Star label and the program as a whole by creating two classes of Energy Star products. Third, some program partners raised concerns about the rising cost of participating in the program because of third-party certification testing, and some manufacturing partners said they are considering decreasing their participation because of the cost.
section_title: What GAO Recommends
paragraphs: GAO recommends the Administrator of EPA assess the need to develop a process for independent review of adverse decisions related to setting specifications and disqualifications. EPA neither agreed nor disagreed with this recommendation.

section_title: Letter
paragraphs: American consumers, businesses, states, and federal agencies have  come to rely on the Energy Star program to identify more energy-efficient  products that lower their energy costs. Energy Star is a voluntary program  that the Environmental Protection Agency (EPA) began in 1992 to  encourage the purchase of energy-efficient computers and monitors as  part of the agency’s broader efforts to reduce greenhouse gas emissions.  Since 1996, EPA has shared management responsibilities for the Energy  Star program with the Department of Energy (DOE). According to EPA  documents, the Energy Star program is designed to identify, through the  use of the distinctive blue Energy Star label, appliances and other  products that deliver the same or better performance as comparable  models while using less energy. The Energy Star program partners with  manufacturers, retailers, states, utilities, regional energy efficiency  groups, home builders, and others who help promote the program and  receive, among other benefits, use of the widely recognized Energy Star  label on qualified products and other marketing materials. The Energy  Star program now covers over 60 product categories, and its label  appears on thousands of major appliances, office equipment, lighting,  home electronics, new homes, and commercial and industrial buildings.  EPA reported that for 2010, the Energy Star program saved consumers  about $18 billion in energy costs and prevented 170 million metric tons of  greenhouse gas emissions.
Despite its successes, numerous recent investigations and reports— including reports by us, EPA’s Office of Inspector General (OIG), and  DOE’s Office of Inspector General—have identified weaknesses in the  Energy Star program. For example, in 2007, we reported that EPA and  DOE qualified household products based on factors other than the  estimated total energy consumption. Similarly, reports by EPA’s Office of  Inspector General in 2007 and 2008 identified weaknesses in the  program, including a lack of management controls to ensure that products  met qualification criteria, uncertainty regarding the criteria used to  determine when product specifications needed to be updated, and  allegations that the program’s reported savings claims were inaccurate  and unreliable.
In September 2009, DOE and EPA signed a memorandum of  understanding (MOU) agreeing, among other things, to coordinate efforts  to expand and enhance the Energy Star program in an effort to address  many of the weaknesses previously identified. The MOU clarified the  roles and responsibilities for each agency, establishing EPA as the  primary agency for the Energy Star brand and DOE as the lead on test  procedure development and evaluation. The MOU outlined a number of  other changes to the program, including steps to ensure that Energy Star  performance criteria consistently recognized top-performing products and  required products to be tested by an accredited laboratory. EPA and DOE  were finalizing plans to implement the program changes outlined in the  MOU when in March 2010 we released a widely publicized report that  identified serious vulnerabilities in Energy Star’s process for self-certifying  products qualified to carry the Energy Star label. In addition, in October  2010, EPA’s Office of Inspector General issued a summary report that  concluded EPA’s implementation of the Energy Star program had  become inconsistent with the program’s authorized purpose because of  previously identified weaknesses.
Given the recent controversies surrounding the Energy Star program, you  asked us to examine changes to the program that are currently under way  as a result of the MOU between EPA and DOE. Specifically, we  examined (1) the status of EPA’s and DOE’s implementation of changes  to the Energy Star program under the MOU and (2) Energy Star program  partners’ views of the program and recently implemented changes.
To examine the status of EPA’s and DOE’s implementation of changes to  the Energy Star program, we reviewed relevant legislation, agency  guidance, eligibility criteria, and other program documentation and  interviewed agency officials. To gather program partners’ views about the  program and recent changes, we conducted interviews with a range of  program partners, including representatives from trade associations,  retailers, states, utilities, and other interested parties involved with the  Energy Star program. Several product retailers were selected from EPA’s  list of program partners. We selected states and utility companies with  energy efficiency programs that were geographically dispersed. We also  conducted structured interviews of a nongeneralizable random sample of  23 manufacturers that were listed as Energy Star partners to gain an  understanding of their views of the program. However, because the  sample is nongeneralizable, these views may not be reflective of the  views of all program partners. We conducted this performance audit from  August 2010 to September 2011 in accordance with generally accepted  government auditing standards. Those standards require that we plan  and perform the audit to obtain sufficient, appropriate evidence to provide  a reasonable basis for our findings and conclusions based on our audit  objectives. We believe that the evidence obtained provides a reasonable  basis for our findings and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The Energy Star program is one of several federal government programs  that focus on reducing the nation’s energy consumption. The Energy Star  program also includes the goal of reducing greenhouse gas emissions  and energy consumption by transforming the market for energy- consuming products through voluntary partnerships with public and  private organizations. The program is divided into three sectors:  commercial; industry; and residential, which includes product labeling.  Specifically, the program describes its product-labeling effort as a means  for consumers to easily identify and purchase energy-efficient appliances  that offer savings on energy bills without decreasing performance.
The Energy Star program has grown and evolved since it began. EPA  started Energy Star in response to the Clean Air Act Amendments of  1990 and the Energy Policy Act of 1992 in an effort to explore  nonregulatory strategies for preventing or reducing pollution. In 1992, the  program started labeling energy-efficient products in the marketplace.  DOE partnered with EPA in 1996 to jointly manage the program. At that  time, the two agencies signed a memorandum of cooperation describing  each agency’s responsibilities related to use and oversight of the Energy  Star label. DOE also assumed responsibility for developing product  performance criteria for specific product categories, including  refrigerators, dishwashers, and room air conditioners. In the Energy  Policy Act of 2005, Congress formally authorized the Energy Star  program to identify and promote energy-efficient products and buildings.   The act further specified three goals for the program: reducing energy  consumption, improving energy security, and reducing pollution.
The Energy Star program has thousands of program partners, including  manufacturers, retailers, utilities, government entities, energy efficiency  organizations, finance partners, and home builders. To become a  program partner, the business or organization voluntarily signs a  partnership agreement with EPA. The agreement includes a commitment  to use the partnership and Energy Star label as a means of promoting  energy efficiency. Manufacturer partners must also identify the product  category or categories in which their company seeks to qualify products— such as appliances or office equipment. Program partners can use the  Energy Star label and other marketing material as part of their energy  efficiency and environmental activities (see fig. 1).
According to EPA documents, the Energy Star program contributes to  EPA’s national energy and greenhouse gas reductions goals. EPA  estimated that, in 2010, the Energy Star program collectively prevented  170 million metric tons of greenhouse gas emissions—roughly the  equivalent of the annual emissions of 33 million vehicles—and saved  consumers about $18 billion in energy costs.
Energy Star products are also eligible for various tax credit and rebate  programs. For example, in July 2009, DOE provided almost $300 million  in funding from the American Recovery and Reinvestment Act (Recovery  Act) to states and territories to promote energy reduction and stimulate  the economy by encouraging consumers to replace older appliances with  Energy Star-qualified products.  Each state and territory developed its  own rebate program for various Energy Star-qualified products. The  d  are expected to be expended by February 2012, with 56 states an territories participating in the rebate program. According to DOE  documentation, as of May 2011, the program results include a total of 1.6  million consumer rebates totaling about $239 million; of these rebates, 88  percent were for purchase of major household appliances; 10 percent for  heating, ventilation, and air conditioning products; and 2 percent for wa heaters. By providing rebates, this effort leveraged federal funds with  about $1.8 billion in consumer spending and is projected to result in an  estimated annual energy savings of 1.5 trillion British thermal units (Btu which is roughly equivalent to the greenhouse gas emissions from the  electricity use of 38,000 homes in 1 year.
subsections: section_title: Identified Wea the Program
paragraphs: Even with successes, prior reports by us, EPA’s Office of Inspector  General, and others have identified several problems with the Energy  Star program and its management. In 2007, we reported on weaknesses  in the Energy Star’s labeling certification program. Among other things ,  we found that the program was qualifying products to carry the Energy Star label based on factors other than total energy consumption example, some products were qualified based on their energy  consumption while in standby mode rather than when they were operational. EPA’s Office of Inspector General identified other  weaknesses in a report in 2007, including problems with EPA’s  documentation of the criteria it used to determine when to update produc performance specifications, and little oversight of the use of the Energy  Star label in retail stores. In addition, EPA’s Office of Inspector General  also found in 2010 that EPA’s implementation of the Energy Star program  was inconsistent with the program’s authorized purpose. For example, it  t  found the program sought to maximize the number of qualified products  at the expense of identifying products and practices focused on  maximizing energy efficiency. Also, in 2010 we reported on serious  vulnerabilities with the Energy Star’s process for qualifying products,  which was generally based on self-certification of products by  manufacturers.
In September 2009, EPA and DOE signed an MOU to address the  vulnerabilities we and EPA’s Office of Inspector General identified. The  MOU’s purpose is to enhance and expand federal programs that advance  energy efficiency––including Energy Star––to address climate change,  economic, and energy security issues. In addition, the MOU outlines  common goals and objectives, including expanding and enhancing  federal energy efficiency programs, building on each agency’s role in  advancing energy efficiency, and realigning program roles and  responsibilities to most effectively implement their programs.
The MOU also outlines four changes specific to the Energy Star  program. First, it restructures the management of the program, making  EPA the lead agency and giving it responsibility for establishing  performance levels for all Energy Star products. Under the MOU, DOE’s  primary role in the products component is leading the development of  product-testing procedures. In addition, the MOU established a governing  council consisting of officials from both agencies to oversee their  collaboration and provide oversight for the program.
Second, the MOU increases the amount of testing required to verify the  performance of Energy Star-qualified products. Before the MOU, the  program generally relied on a self-certification process for manufacturers  to qualify products for the Energy Star label. Under the MOU, all products  are now required to be tested in an accredited laboratory, and the results  submitted to EPA before the products can be qualified for the Energy Star  label. In addition, the MOU calls for increasing the amount of market- based testing used to verify that Energy Star-qualified products continue  to meet program requirements. For this testing, selected products are  taken off the shelf at retail locations and tested to determine whether they  meet the Energy Star standards. The MOU also calls for the market- based testing to consist of a combination of EPA and DOE testing and  manufacturer-funded testing administered by EPA or DOE, or testing by  other third parties.
Third, according to the MOU, the Energy Star program will aim to expand  the number of qualified products while updating product performance  specifications more frequently and stringently. Specifically, the MOU  outlines an objective of broadening the program’s coverage of energy- efficient products, especially those in product categories that are in  widespread use and consume significant amounts of energy. Under the  MOU, the program set a goal of doubling the number of new product  categories (from the current level) added to the program annually,  depending on the availability of resources. The MOU also calls for the  program to implement more stringent product performance specifications  to ensure that the Energy Star label continues to represent top-performing  products. The MOU outlines criteria for determining when product  performance specifications should be updated: either when a certain  amount of time has elapsed or when Energy Star-labeled products  achieve a certain market share. For example, for products considered to  be “rapidly evolving”—such as office equipment—the specifications will  be updated about every 2 years. For products considered to be “longer- lived”—such as home appliances—specifications will be reviewed for  possible revisions at least once every 3 years or when the market share  of qualified products reaches about 35 percent––that is, according to EPA  officials, when 35 percent of the shipments of a particular product qualify  for Energy Star. The MOU also requires manufacturing partners to  annually submit shipment data for their Energy Star products to EPA to  assist in EPA’s tracking of market penetration and overall evaluation of  the program.
Fourth, the MOU proposed a new program to promote the “top-tier” of  energy-efficient products in Energy Star product categories. Specifically,  the MOU states the program would highlight about the top 5 percent of  the products within a product category. The program would also promote  advanced technologies associated with these most energy-efficient  products in order to drive market acceptance of the products. The MOU  states the new program would remain as part of the overall Energy Star  program. In addition, the MOU stipulated that a marketing and brand  analysis would be conducted to provide options on how to identify and  label the program. As with the overall Energy Star program, the MOU  designated EPA as the lead agency for the new program, with DOE  providing technical support.
section_title: Budget
paragraphs: Over the past 5 years, EPA and DOE have spent about $288 million on  the Energy Star program. Despite changes to the program during this  time, including implementation of the MOU, the program budgets have  remained relatively stable over this time (see table 1).
Federal agencies also manage additional efforts that have a significant  focus on energy reduction and complement the Energy Star program.  These include DOE’s federal minimum efficiency standards and the  Federal Trade Commission’s (FTC) EnergyGuide labeling program.  Congress first mandated that DOE develop minimum federal standards  for energy efficiency for select appliances under the Energy Policy and  Conservation Act (EPCA) of 1975. Currently, appliances subject to the  standards include refrigerators, freezers, room air conditioners, clothes  washers and dryers, dishwashers, kitchen ranges and ovens, pool  heaters, water heaters, fluorescent lamp ballasts, and incandescent  reflector lamps. EPCA also prescribed energy labeling requirements  that became the EnergyGuide, which is administered by FTC with  assistance from DOE. The program requires product manufacturers to label and prominently display energy consumption information and annual  energy costs for select household products, on the yellow EnergyGuide label.
In addition to these federal efforts, other nongovernmental efforts focus  on energy efficiency. For example, the Consortium for Energy Efficiency  develops performance specifications for use by its North American  members, for certain products. The specifications are developed consortium’s membership for voluntary adoption by the individual  program administrators and their programs. Furthermore, a retailer—the  Home Depot—has a labeling brand—Eco Options—for environmentally  friendly products and models the retailer stocks; however, energy  efficiency is just one focus of the program.
section_title: EPA and DOE Hav Made Progress in Their Ongoing to Implement Significant Chan the Energ y Star Program
paragraphs: Since agreeing to the MOU in 2009, EPA and DOE have made  considerable progress in their ongoing efforts to implement significant  changes to the Energy Star program, including expanding product te updating program requirements, and establishing a pilot progr am to  promote the most efficient Energy Star products.
subsections: section_title: EPA Has Significantly Expanded Product Testing
paragraphs: EPA and DOE have taken steps to significantly expand product tes qualify products for the Energy Star label and verify that marketedting to  products continue to meet program requirements. As part of this  expansion of testing, and in recognition that the new emphasis on represented a significant change to the terms and conditions for  participating in the Energy Star program, EPA revised the manufactu partnership agreement in 2010 to incorporate the expanded testing  requirements. EPA required partners to demonstrate their understan and acceptance of these new requirements by recommitting to the  program by November 30, 2010. Agency officials told us they did not  track how many manufacturers ele a result of the program changes.  cted not to renew their partnerships as  In 2010, EPA developed and instituted new testing procedures for  products to qualify for Energy Star recognition, as called for in the MOU.  Under these procedures, before a new product can be qualified the Energy Star label, it must be certified as meeting program  requirements by an EPA-recognized third-party certification body based  on the results of tests conducted by an EPA-recognized test laboratory.  ited  Each recognized certification body and test laboratory must be accred by an EPA-recognized accreditation body. The new procedures took  effect on January 1, 2011.
In developing the conditions and criteria for recognizing the accreditation  bodies, certification bodies, and test laboratories, EPA leveraged existin g  international standards and consulted with testing experts, Energy Star  partners, and other stakeholders. As described by EPA documents, the  criteria are intended to provide EPA with information to evaluate whether an organization has the technical competence and quality management  processes in place to provide impartial test results. EPA issued t he final  recognition criteria in the summer of 2010 and began accepting  applications. As of August 2011, there were over 350 EPA-recognized  testing and certification organizations spanning 35 Energy Star product  categories.  EPA officials told us that the program continues to accept  applications on an ongoing basis and said that they believe t recognized test labs and certification bodies should provide  manufacturers with options in obtaining the services they need to get their  cording to  products tested and approved to carry the Energy Star label. Ac EPA data, as of May 2011, the program has received certified  performance information for about 10,000 new products since the  requirements took effect.
EPA and DOE are also continuing with efforts to expand their  postqualification testing programs to verify that Energy Star-labeled  products available to consumers in the market meet performance  requirements. Historically, EPA conducted limited verification testing o Energy Star-qualified products and targeted its testing on products in  high-volume categories, such as televisions and computers. According to  agency records, EPA did not test Energy Star products from 1992 through  2001, but initiated limited testing beginning in 2002. For example, agency  een  data show that EPA tested 244 product models in 14 categories betw 2002 and 2009 out of the thousands of models and over 60 product  categories that are included in the program. EPA’s expanded verification  testing program will be manufacturer-funded and implemented through its e  recognized certification bodies, and the program will begin testing by th fall of 2011. According to EPA guidelines, under the expanded testing  verification program, the certification bodies will be required to annually  test a percentage of the models they have certified in each product  category. At least half of the models to be tested will be randomly  selected, with the remainder selected based on consideration of other  factors, including prior testing failures, high sales volumes, referrals fromEPA or other third parties such as consumer groups, or requests from a manufacturer to verify the performance of a competitor’s product. EPA  officials told us they have finalized additional guidance, provided training,  and will be working closely with the certification bodies as they begin  selecting products for testing later this year.
DOE describes its Energy Star verification testing program as being  complementary and parallel to EPA’s verification testing program. The  DOE program will target the subset of Energy Star-labeled products that  are also part of DOE’s federal minimum efficiency standards program.  The verification testing program is a continuation of DOE’s 2010 pilot  program that focused on verifying the energy efficiency and water use of  Energy Star products that were eligible for state residential appliance  rebate programs supported with funding from the 2009 Recovery Act.  Unlike the verification testing program administered by EPA-recognized  certification bodies, DOE’s verification testing program is agency-funded.  According to DOE officials, the proposed plan does not specify a  percentage or goal for the number of products to be annually tested as  part of its program. Additionally, the proposed plan does not indicate that  DOE will be selecting products randomly for testing, but instead proposes  to target products based on a variety of factors, including a history of  failing to meet Energy Star program requirements, new technologies, and  categories with known performance issues. DOE is in the process of  responding to comments about its proposed plan, and officials told us  they anticipate finalizing the verification testing program in late summer of  2011. EPA and DOE officials told us that they were aware of concerns  about having two verification testing programs and that they are working  closely to coordinate their efforts and minimize the potential for  duplication between their respective testing programs. These officials also  told us that some overlap in testing may be beneficial and could provide  an opportunity to monitor how consistently the testing organizations  interpret and apply the various Energy Star test procedures.
EPA and DOE’s verification testing programs will follow the same  approach to verify performance based on how the product initially  qualified for the Energy Star label. Products can qualify for the Energy  Star label in one of two ways. For products not covered by DOE’s federal  minimum efficiency standards, such as computers, Energy Star  specifications generally require that product qualification be based on  results from a single test. For those products covered by DOE’s minimum  efficiency standards, or where allowed by the applicable Energy Star  specification, a product is qualified for the program based on results from  multiple test samples. For an Energy Star product that a manufacturer  qualified based on a single representative model, verification testing will  similarly be based on the performance of a single unit. In this approach,  the selected unit must at least meet the applicable Energy Star  specification, with no tolerance for any variation below this level. For a  product qualified using multiple test samples, four units will be selected  for testing. A spot check test will initially be used to evaluate the  performance of a single unit. If the results of this test show the unit failed  to meet the requirement by less than 5 percent of the Energy Star criteria,  then no additional testing will be conducted on the other units. If the test  finds that the unit performed more than 5 percent below the applicable  specification, then each of the remaining units will be tested and statistical  methods applied to determine whether the product fails to meet the  performance specifications. Under both verification testing programs,  tested models are to be obtained from the shelves of retail locations or  warehouses whenever possible. In instances where pulling a product  from a retail shelf or warehouse is not feasible, certification bodies may  make arrangements to conduct supervised verification tests at the  manufacturing facility. This would include instances where the selected  product is prohibitively expensive to purchase or transport, made to order,  or otherwise unavailable through customary retail outlets. Ultimately, the  certification bodies are responsible for selecting and procuring models for  testing, and are not permitted to let the manufacturer choose the test  sample.
EPA has taken initial steps to establish standard procedures for  disqualifying products from the Energy Star program based on the results  of verification testing programs. Under existing statutory authority for the  Energy Star program, EPA does not have statutory enforcement authority  to ensure compliance with program requirements. Instead, EPA generally  relies on federal trademark law protections and the terms and conditions  of its partnership licensing agreements to ensure proper use of the  Energy Star label and adherence to program requirements. Among the  terms and conditions of the manufacturing partnership agreement, the  partner agrees to meet Energy Star eligibility criteria and applicable  performance specifications as well as follow program guidelines for  proper use of the Energy Star marks. The agreement also provides that  EPA, DOE, and the program partners will work in “good faith” to informally  resolve conflicts to the extent possible. An agency official explained that  while the program had not publicly issued standard disqualification  procedures, the program in the past had included procedures as part of  the specifications for certain product categories that served to broadly  communicate the process to other manufacturing partners. However,  given the expanded product verification testing implemented as part of  the changes agreed to in the MOU, EPA and DOE recognized the need  for a standard protocol that would increase the transparency involved in  Energy Star disqualification decisions, including the triggers for taking  action and communicating about disputed issues. EPA is working to  finalize these procedures, which officials expect to issue by the end of the  year.
In the meantime, EPA has issued guidance to the certification bodies that  outlined the process for notifying EPA about testing failures and  opportunities for manufacturers to submit additional information for the  agency to consider as part of its determination of whether it should  pursue any disqualification action. In a May 2011 directive to the EPA- recognized certification bodies, EPA is requiring certification bodies to  report test failures to the agency within 2 days of determining a product  has failed the Energy Star testing. EPA stated that it will then notify the  manufacturer and give it 20 days to respond in writing with any additional  information. The directive indicates that EPA will review relevant  information to determine whether additional evaluation is necessary, but  the directive does not set a time period within which EPA will make a final  decision. Instead, the directive states that EPA will provide additional time  to resolve potential issues as appropriate.
For DOE-tested products, the process is similar, except that DOE will  make the initial determination of whether the model fails to meet the  applicable Energy Star specification, and then refer failures to EPA for  further action. Under either scenario, EPA is ultimately responsible for  making all Energy Star-related disqualification decisions. If it decides to  disqualify the product, the manufacturer will be required to discontinue  using the Energy Star label on that product model and take other  corrective actions as directed. According to an EPA official responsible for  managing the Energy Star program—a voluntary program whereby EPA  relies on federal trademark law protections and the terms and conditions  of the partnership agreements—the agency’s decisions regarding product  disqualification are final and not subject to judicial review or other formal  administrative review process.
section_title: EPA Has Taken Initial Steps to Update the Program
paragraphs: As the lead agency responsible for managing the Energy Star brand, EPA  has taken steps to update program requirements by broadening the  number of included product categories as well as updating performance  specifications for existing products. Since 2009, EPA and DOE have  finalized new specifications for 2 residential product categories: computer  servers and integral light-emitting diode (LED) lamps. EPA is currently  developing specifications for another 5 product categories, including  residential climate controls and data center storage equipment, to be  added in late 2011 or 2012. The agency is also researching the potential  addition of another 15 product categories with high energy savings  potential, such as clothes dryers and countertop appliances. According to  agency officials, EPA’s efforts to expand the number of categories  covered by the Energy Star program depend on available resources, and  its ongoing priority is maintaining updated specifications for existing  products.
In addition to expanding the Energy Star program, EPA has also taken  steps to ensure that required product performance specifications are  updated more frequently for existing product categories and make them  more stringent as markets and technologies advance. EPA has  developed a schedule to review and update, as necessary, performance  specifications for all Energy Star product categories by calendar year  2013. In developing this schedule, EPA evaluated market share, test  procedure issues, changes to federal minimum standards, technological  advancements, and other opportunities to expand program coverage. In  2010, all of the “longer-lived” product categories with market shares over  35 percent as of 2008 were scheduled for review, as well as 25 percent of  the “rapidly evolving” products that have had specifications issued in the  past 3 years. EPA initiated several product specification updates in 2010,  including reviews of the criteria for televisions, computers, and  dishwashers, and currently has 25 specifications under review in 2011. In  the 2011 Joint Energy Star Work Plan, EPA stated that it would be able to  complete approximately 21 updates by the end of the year. A number of  the revisions have already been completed, including updates for  televisions, residential dishwashers, and furnaces. However, EPA officials  told us that the anticipated timelines to complete some updates have  been extended and will likely be completed sometime in early 2012.
As part of the 2009 MOU, the agreement reiterated one of the program’s  long-standing criteria that Energy Star performance specifications should  be set so that labeled products represent approximately the top 25  percent of available models. As most of the updates to Energy Star  specifications are currently under development, we could not evaluate  how effective the program has been overall in meeting this criterion.  However, for some completed updates, EPA has moved to set more  stringent performance specifications. For example, EPA notified program  partners in October 2010 that it was planning to initiate a review of DOE’s  2008 performance specification for residential dishwashers, which  included a more stringent level that was set to take effect in July 2011. In  EPA’s analysis, the agency estimated that more than 87 percent of  standard-sized residential dishwashers would meet the 2008 DOE  specification. EPA has replaced that specification with a newer version  that includes more stringent criteria that will take effect in January 2012.  In developing the updated specification, EPA’s analysis projected that 21  percent of standard dishwasher models would meet this updated  performance level. Similarly, in developing an updated specification for  gas furnaces, EPA estimated that between 8 and 13 percent of available  models would meet the new performance levels ultimately adopted by the  agency in June 2011. In response to comments on the draft furnace  specification, EPA acknowledged that while this was less than the  program’s typical 25 percent level, product availability should increase for  consumers by the time the specification takes effect in February 2012.  EPA officials also told us that while they are striving to set Energy Star  specifications so that the label serves as a meaningful differentiator for  energy-efficient products, projecting the makeup of the market when the  updated specifications take effect can be difficult.
Under the MOU, DOE has lead responsibility for developing and updating  the test procedures that are used to measure the efficiency of Energy  Star products. According to a DOE planning document, the agency  expects to complete development of new test procedures and updates to  existing ones for all Energy Star product categories within the next 5  years. DOE reported it had updated test procedures for five Energy Star  products in 2010 and has established a schedule to prioritize its review of  the test procedures for 25 Energy Star product categories in fiscal years  2011 and 2012. EPA and DOE officials told us that as they continue to  transition into their roles outlined in the 2009 MOU, officials from both  agencies meet regularly to coordinate their activities and work together to  resolve test procedure issues as they arise during the specification  update process.
section_title: EPA Is Conducting a Pilot Program to Promote the Most Efficient Energy Star Products
paragraphs: Under the 2009 MOU, EPA and DOE agreed to explore a SuperStar  program that would identify the most energy-efficient Energy Star-labeled  products in given categories. In October 2010, EPA released for comment  its proposal for a pilot program—referred to as Top-Tier—that would  promote and advance highly efficient products in the marketplace. In  addition to seeking input from Energy Star program partners and other  interested parties, EPA reviewed existing market research to evaluate  consumer interests and preferences in highly efficient products. The  agency also conducted a combination of one-on-one interviews with  consumers across the country and 12 focus groups in four locations to  explore various aspects of the proposal. Specifically, EPA sought  consumers’ views on the proposal’s potential to harm the Energy Star  brand—by confusing consumers—and their willingness to pay more for  higher-efficiency products. Additionally, EPA also gathered the  consumers’ reactions to various options to identify the top-tier products.  For example, EPA presented alternative labeling options such as Most  Efficient, Maximum Efficiency, Best in Class, and Top Tier. In general,  EPA’s findings suggested consumers did not think that the additional  program would harm the Energy Star program and that some were willing  to pay more to purchase the most efficient products available. Moreover,  the research also indicated that consumers get most of their information  about new products through retail locations and the Internet.
In March 2011, after reviewing comments received on the initial proposal  and incorporating findings from the consumer research, EPA elected to  proceed with a pilot program. As part of this effort, EPA issued draft  recognition criteria for seven product categories, including clothes  washers, air source heat pumps, central air conditioners, furnaces,  geothermal heat pumps, refrigerator-freezers, and televisions. Overall,  EPA received comments from nearly 40 individuals and stakeholder  groups on the program in general as well as the draft recognition criteria.  On May 5, 2011, EPA announced the final eligibility criteria for the seven  categories that will be included in the pilot program, now referred to as  the Most Efficient program, along with instructions to manufacturers for  obtaining the recognition.
To obtain the Most Efficient recognition, a manufacturer must inform EPA  that it is interested in the designation, ensure that product performance  has been certified by an EPA-recognized certification body, and confirm  that the product meets the recognition criteria. Once the agency  determines a product is eligible for the recognition, it will be highlighted on  the Energy Star website and the manufacturer will be given access to use  the Most Efficient marketing template, shown in figure 2. EPA’s guidance  stipulates that the designation is not to be used as an additional product  or packaging label, but is intended for use in marketing and promotion  through in-store materials and websites. As of August 10, 2011, EPA had  recognized 78 models as Most Efficient across five of the seven  categories, including 15 clothes washers, 18 televisions, 26 central air  conditioners, 17 air source heat pumps, and 2 refrigerator-freezers.
According to EPA documents, the goal of the pilot program is to drive the  most energy-efficient products into the market at a quicker pace. In  publicly announcing the program to consumers in July 2011, EPA and  DOE officials said that the new designation will provide manufacturers  with incentives to find innovative ways to achieve greater energy  efficiency gains while providing consumers new information about top- performing products. In a letter to stakeholders describing the final  eligibility criteria for the pilot program, EPA stated that the program was  being targeted at early adopters and environmentally motivated  consumers who are interested in products that demonstrate efficiency  that is “truly exceptional, inspirational, or leading edge” without  compromising performance. For example, for medium- to large-volume  clothes washers, the recognition criteria, among other things, require that  the models be 50 percent more energy-efficient and use 45 percent less  water than the standard Energy Star-qualified models. In response to  comments EPA received about the criteria and inability of certain  products to qualify for the recognition, EPA has stated that the program  may not be suitable for all product sizes and configurations. For example,  in our analysis of the recognition criteria for refrigerator-freezers, we  found that only two of the seven configurations of refrigerator-freezers  that are currently eligible to qualify under the basic Energy Star  specification have models that would meet the most efficient criteria. In addition, our analysis indicated that none of the almost 600 Energy Star- qualified refrigerator-freezers with through-the-door ice functionality would  satisfy the recognition criteria.
The pilot phase was originally planned to run from May 5, 2011, through  December 31, 2011, but agency officials told us they expect to extend the  r it  program into 2012. EPA will evaluate the program to determine whethe should continue beyond 2012, and if so, whether to include additional  products, EPA is still developing the specific evaluation criteria and its  plans for obtaining consumer feedback about the pilot program. If the  Most Efficient program is continued beyond the pilot phase, EPA pl annually issue new program requirements and announce any new  product categories to be added prior to the beginning of each calendar  year.
section_title: Program Partne Generally Had Favorable Views ar the Energy St Program but Identified Several Areas of Concern
paragraphs: Program partners we contacted generally had positive views of the  Energy Star program and recently implemented changes but raised  primary concerns about the program’s ongoing changes. In particular, program partners raised three areas of concern: that the program may become less voluntary in nature, that EPA’s ongoing pilot program to  promote the most highly efficient products could diminish the value of  Star label, and that the cost of participating in the program is  Energy rising.
subsections: section_title: Program Partners Generally Had Positive Views of t Program
paragraphs: The majority of Energy Star program partners and other interest we spoke with, such as representatives of manufacturing trade  associations and groups advocating on behalf of efforts to increase  energy efficiency, viewed the program favorably. For example, 18 out of  23 manufacturing partners we interviewed said they were either satisfiedor very satisfied with their decision to become an Energy Star program  partner, while another 4 said they were neither satisfied nor dissatisfied.
The foremost strengths these and other program partners identified were  the overall strength of the Energy Star brand itself and its wide  recognition by American consumers. Specifically, when asked to identify  the strengths of the Energy Star program, 21 out of the 23 manufacturing  partners we spoke with identified the Energy Star brand recognition as  one of the program’s top strengths. In addition, several retailers that  spoke with cited brand recognition as a top strength of the Energy Star  Program. Program partners also told us that the simple nature of th was effective in helping consumers identify energy-efficient products, an served as a good marketing tool for manufacturers and retailers. Almost  all of the manufacturing partners we spoke to, as well as some other  program partners, stated that EPA has done a good job of promoting th e  label to consumers. In addition, several retailers we interviewed identified high Energy Star brand awareness among consumers as a positive  program attribute. Most retail and manufacturing partners also told us that  the loss of the Energy Sta businesses. For example, most manufacturing partners stated that the  fact that Energy Star was a nationally recognized, government-sponsor program helped their efforts to develop and promote energy-efficient products to consumers. In addition, some of the program partners we  spoke with said that without the Energy Star label, a new type of efficient label, or a revision of an existing energy label, could replace th Energy Star label; however, the lack of federal government support wo undermine its credibility.  r program would be detrimental to their  Many of the program partners we spoke with also viewed the changes being implemented as a result of the MOU favorably, although their  perceptions varied. For example, many retail, state, and utility partners  told us they believe the new third-party testing and certification  procedures increase the program’s credibility. Officials from one state  agency stated the new process will have a “huge positive impact” on  consumer confidence. In addition, most program partners we contacted  told us they generally supported steps taken in the MOU to clarify  agencies’ roles and establish a single agency as the brand manager.  Some of the program partners we spoke with said that, in their opinion,  prior to the MOU, collaboration and communication between DOE and  EPA was poor and at times confusing. Since the MOU took effect, many  program partners, as well as energy efficiency groups, recognized  significant improvements in communication and coordination between the  two agencies. However, program partners varied in whether they thought  DOE or EPA should have been designated as the lead agency for  managing the Energy Star program given the differing expertise  associated with each agency. For example, one manufacturing partner  we spoke with said that he viewed EPA as a good brand marketer but  viewed DOE as having more technical expertise.
section_title: Program Partners Raised Concerns about Some Ongoing Program Changes
paragraphs: Program partners and other interested groups, such as representativ from manufacturing trade associations and energy efficiency groups,  expressed three areas of concern about the ongoing changes to the  Energy Star program.
Shift in the voluntary nature of the program. First, program partners and  other interested parties expressed concern that the ongoing changes are  shifting the voluntary nature of the program to include elements of some  of  traditional regulatory programs but without the procedural safeguards  such programs. For example, a few manufacturing partners and an  rn  appliance manufacturing association we spoke with expressed conce that while the decision to become a partner in the program is voluntary,  r  having qualified Energy Star products is often necessary to compete fo placement in key retail stores. In addition, one manufacturing partner we  spoke with sold its products almost exclusively to federal, state, or local  governments, which were required to procure only Energy Star-qualified  products. In addition, several federal tax credits are available for certain  ,  residential consumer products such as heating and cooling systems  Similarly,  windows, and doors that meet Energy Star requirements.  states and utility companies we spoke with said they offer rebates to  consumers for purchasing Energy Star-qualified products. All the rebatecturing  programs we reviewed required products that were––at a minimum–– Energy Star-qualified. A representative from an appliance-manufa association that represents many of the appliance-manufacturing partners  noted that some of the changes implemented under the MOU are simils, such  to procedures found in some more traditional regulatory program as third-party certification, verification testing, and enforcement for   qualified products. Traditional regulatory programs also afford affectedities  stakeholders with Federal Register notice of, and significant opportun to comment on, agency action. Given the importance of participating in  the program, representatives from a manufacturing association a raised concerns that the Energy Star program does not have an  independent administrative review process where adverse agency actions  lso  related to setting specifications and disqualifications can be reviewed  prior to seeking judicial review. For example, the Department of  Agriculture’s National Appeals Division provides an independent forum  within the department for program participants to seek administrative  appeals of adverse agency decisions. In addition, the manufacturing  association representatives said the program should retain its voluntary  nature but incorporate more of the transparency and procedural  safeguards associated with a typical regulatory program. Representatives  from another trade association we spoke with said the program could  benefit from having more structure for soliciting comments on  specification revisions and more clearly articulating how the comments  were handled in the final decision. Nonetheless, several program partners  noted that the voluntary nature of the program and its requirements,  which are less formal than those associated with a traditional regulatory  program, provided greater flexibility and allowed the program to respond  more quickly to change.
Many manufacturing partners we spoke with also told us that they  believed EPA’s key decisions––including its basis for updating product  specifications and testing requirements––lack transparency. Most  manufacturing partners expressing an opinion rated the program’s  responsiveness to partner input, as well as its processes for resolving  potential disputes related to testing and enforcement, as fair or poor. One  LED lighting manufacturer felt EPA lacked transparency by not providing  adequate justification for the amount of testing required to qualify its new  product line. As a result, the manufacturer did not understand why it  would need to test its product in excess of what was required of other  LED lighting manufacturers using a different technology. After discussions  with EPA, the agency modified the amount of testing initially proposed,  but the manufacturer still felt the agency had not clearly articulated a  basis for the increased testing. This manufacturer asserted the basis for  EPA’s decision in this case was unclear and unfair, and the manufacturer  was frustrated that the program had no mechanism for reviewing this  decision.
Ongoing pilot program. Second, program partners we spoke with differed  on their views of EPA’s new pilot program to promote the most efficient  products. About half of the manufacturing partners stated that it may harm  the Energy Star program, and over half of those partners told us they  would consider dropping out of the program or reducing the number of  products they have certified because of various reasons including the  Most Efficient program and higher costs of certification. Some of these  partners raised concerns that creating two classes of Energy Star  products could diminish the value of the Energy Star label for  manufacturing partners whose products meet the standard Energy Star  specification but may not rank among the most efficient products. For  example, a few manufacturing partners said if the pilot program become a permanent part of the Energy Star program, then they would consider s  the Energy Star label to be “second class” and would consider comple withdrawing from the program. Some of the smaller manufacturing  partners we spoke with also said that while several of their products may  meet the Energy Star specifications, the high cost of product certification  may mean they can pursue certification only for products that would be  eligible for Most Efficient recognition, which could remove some of theirenergy-efficient products from the Energy Star program. As a result,  consumers, faced with the more efficient yet often more costly products,  may purchase fewer energy-efficient products. In addition, some progr am  partners we spoke with expressed concerns that consumers may beco me  confused with a new recognition promoting the most efficient products.
These program partners, as well as retail partners we spoke with, said  that they believe consumers generally prefer the simple nature of the  existing Energy Star label as a means for them to easily identify ener efficient products over a tiered program with more than one efficiency  class. In addition, a few manufacturing partn ers told us that they view  some eligibility requirements for the pilot program as reflecting criteria  beyond energy efficiency. For example, a manufacturing partner told that one of the requirements for air conditioning units to qualify for  Most Efficient designation was to have certain features that provide  diagnostic information, even though, in their opinion, these controls do no affect the amount of energy the unit uses.
section_title: Conclusions
paragraphs: Since its inception, the Energy Star program has evolved from a small  program focused on computers and monitors to a widely scoped program that represents thousands of products and claims saving consumers  billions of dollars in energy costs. The Energy Star program’s success in  promoting energy-efficient products is widely recognized, and consum manufacturers, utilities, and federal and state agencies rely on it. In  particular, Energy Star plays an important role helping consumers choose  energy-efficient products. The implementation of EPA’s and DOE’s MOU,  developed in response to important weaknesses identified by us and  others, has led to significant programmatic changes. The pace of  progress to implement these changes is laudable, and if EPA and DOE  can sustain this momentum, the proposed changes have the potential to  strengthen the credibility of the brand and the program as a whole.  However, as the agencies continue implementing changes under the  MOU, it will be important to be attentive to the effects of these changes  and identify any need for course corrections if and when such needs  emerge.
The program partners we spoke with––in particular, manufacturers— provided insights into what may be early indicators of potential prob lems.
Many of the changes to Energy Star were necessitated by problems i how the program was previously structured, but the changes ma y be  shifting the procedures of the program in a new direction residing  somewhere between the voluntary partnership that EPA initially  developed and a more traditional regulatory program. Part of this shift is a  result of the market pressure some manufacturers feel to participate in  Energy Star, which may make it no longer appropriate to characterize the program as truly voluntary. Another part of the shift is the addition of more  substantial testing and increased efforts to identify and potentially  disqualify nonconforming products—something clearly needed—bu which heightens concerns over the apparently limited ability for  manufacturers to seek an independent review of adverse agency  decisions involving setting specification levels and disqualifying products.
section_title: Recommendation for Executive Action
paragraphs: To ensure decisions of the Energy Star program are fair and transparent,  we recommend that the Administrator of EPA assess the need to develop  a process for independent review of adverse agency decisions fo Energy Star program as it relates to setting specifications and  disqualifications. If the Administrator of EPA determines that th need for an independent review process but that the agency has  ere is a  insufficient legal authority to undertake one, it should seek additional  authority from Congress.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided EPA and DOE with a draft of this report for review and  comment. We received written comments from EPA’s Assistant  Administrator, which are presented in appendix III. DOE did not provid comments on the draft report. In its comments, EPA stated its  commitment to ensure the Energy Star label’s credibility. In com on the report, EPA stated that the Energy Star program has made not progress implementing changes to ensure the Energy Star label rem a credible designator of energy-efficient, environmentally friendly pro in the market. Regarding our recommendation that the Administrator of  E PA assess the need to develop a process for independent review of  adverse agency decisions for the Energy Star program as it relates to  setting specifications and disqualifications to ensure decisions of the  program are fair and transparent, EPA neither agreed nor disagreed. EP stated that close attention will continu transparency in the program’s operation and careful consideration of  stakeholder input and interest. In addition, EPA provided technical  comments and clarifications, which we incorporated as appropriate.  e to be paid to ensuring  We are sending copies of this report to the appropriate congressional  committees, the Administrator of EPA, the Secretary of Energy, and other  interested parties. The report will also be available at no charge on the  GAO website at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-3841 or ruscof@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  f this report. GAO staff who made major contributions to  the last page o this report are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine the status of the Environmental Protection Agency’s (EPA)  and Department of Energy’s (DOE) implementation of changes to the  Energy Star program under its 2009 memorandum of understanding  (MOU), we reviewed the program’s authorizing legislation. We also  reviewed agency documentation related to the Energy Star program and  the MOU, including program policies, guidance, and draft and final  versions of product performance eligibility criteria and specifications. We  also interviewed key agency officials at EPA, DOE, and the Federal Trade  Commission (FTC) regarding the implementation of the MOU and other  associated issues.
To identify program partners’ views of the Energy Star program and the  changes that are under way, we interviewed representatives from five  state energy offices in locations with significant outreach efforts, including  the California Energy Commission and the New York State Energy  Research and Development Authority, five regional utilities, six major  retailers at the national and local levels, and two manufacturers’ trade  associations, as well as several energy efficiency organizations and  consumer advocacy groups. We also visited Energy Star partners in  several states, including California, Illinois, Washington, and Wisconsin,  to learn their perspectives on the program. We interviewed officials from a  DOE laboratory that specializes in energy efficiency and sustainable  energy. We also met with representatives and toured a laboratory that is  an EPA-recognized body for Energy Star product accreditation,  certification, and verification testing. In addition, we obtained product  manufacturers’ perspectives of the Energy Star program and the ongoing  changes through a series of semistructured interviews. EPA provided an  updated list (as of January 1, 2011) of Energy Star manufacturing  partners that produce residential products. We categorized the list into six  product types: appliances, including clothes washers and refrigerators;  building products, including windows and roofing; computers and  electronics, including imaging equipment; heating and cooling products,  including air cleaners and furnaces; lighting and fans, including light  fixtures, compact fluorescent bulbs and solid state lighting; and plumbing,  including water heaters. For manufacturers producing products in more  than one of the above product categories, we created a seventh  combination category. From this list of seven product categories, we  randomly selected 23 manufacturers stratifying across the seven  categories to participate in a telephone survey regarding their perceptions  of the program and changes made since implementation of the MOU. The  results of the closed questions from the surveys are included in appendix  II. In addition, we asked several open-ended questions, which we later  analyzed, to identify issues that were mentioned frequently and for which  there seemed to be common agreement. These comments were used to  identify three areas of concern of the program partners about the changes  to the Energy Star program. The results of the survey are  nongeneralizable to the universe of all Energy Star manufacturing  partners. Last, to obtain further information about manufacturers’ views,  we judgmentally selected other product manufacturers to interview  separately from the survey.
We conducted this performance audit from August 2010 to September  2011, in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: Program Partners’ Interview Responses
paragraphs: 1. How important were the following to your company’s decision to qualify  your products to carry the Energy Star label?
Tapping into  consumers’ demand  for energy-efficient  products  Improving public  awareness about the  importance of energy  efficiency  Promoting  environmental  protection through  reduced energy  consumption  Requiring products to  have the Energy Star  label by retailers   Other (please specify)
2. On the basis of your experience with the program, how satisfied or  dissatisfied is your company with the decision to become an Energy Star  partner?  0  3. How would your company rate the Energy Star program in the following  areas?
4. In your company’s opinion, how do consumers perceive Energy Star- labeled products as compared with other products with respect to energy  efficiency, cost effectiveness, and environmental friendliness?   5. Has your company conducted market research to evaluate consumer  perceptions of Energy Star-labeled products?
Energy Star is a voluntary labeling program that was established to  reduce energy consumption, improve national energy security, and  reduce pollution such as greenhouse gases by identifying and promoting  products that meet the highest energy conservation standards.  6. In your company’s opinion, how effective has the program been at  meeting these goals?
What concerns, if any, does your company have about the direction of the  Energy Star program and how it is meeting these goals?  7. To what extent does your company work with other Energy Star  partners?
In 2009, EPA and DOE signed a memorandum of understanding (MOU)  that designated EPA as the primary brand manager of the Energy Star  labeling program, including marketing the brand and setting product  specification levels. DOE will continue to provide technical support to EPA  and lead development of product-testing procedures. Under the MOU,  EPA plans to broaden the number of product categories covered by the  program, update performance specifications more frequently, make the  product qualification process more stringent by implementing third-party  certification requirements, and identify super-efficient products through a  “top tier” program. Now, we’d like to ask some questions about these  changes outlined in the MOU.  8. From your company’s perspective, do you agree with the decision to  designate EPA as the primary brand manager for all Energy Star product  categories?  9. One of the changes outlined in the 2009 MOU was a commitment to  broaden the number of product categories that would be eligible to carry  the Energy Star label. The plan calls for doubling the number of products  that are added annually to the program. Would you say that continuing to  expand the number of products eligible for the Energy Star label would  enhance the value of the brand, reduce the value of the brand, or have no  effect on the value of the brand?
Don’t know/no opinion  10. What is your company’s view on the number of product categories in  the program? Would you say that there are too many, about the right  amount, or not enough product categories?  7  The 2009 MOU also provides that product specifications will be updated  more frequently and set more stringently. The agreement states that  specification levels will be set so that the Energy Star label represents  approximately the top 25 percent most efficient models within a given  product class. Does your company view the specification levels as too  stringent, about right, or not stringent enough?
For products that are “longer-lived,”––that is, products that have a longer  life, such as refrigerators––the agreement states that specifications will  be reviewed at least once every 3 years, or when market share for  Energy Star-labeled products reaches 35 percent. For other categories  with rapidly evolving products, the agreement calls for reviewing about  every 2 years.  11. In general, are these criteria adequate to keep Energy Star  specification up to date?
What criteria would you propose?  12. The agreement also includes a proposal to add a new “top tier” or  “most efficient” program that will identify the most efficient products within  a given category (approximately the top 5 percent).
Would your company say that this was a positive step or a negative step?  13. Have you submitted a product for certification to the Energy Star  program since the new third-party certification requirement became  effective on January 1, 2011?  14 (Skip to Question 16)    0 (Skip to Question 16)  14. Did your company use a third-party laboratory to conduct the  certification testing?  15. Did your company have difficulty finding a third-party laboratory to  perform the certification testing?  0  16. In your company’s opinion, how does third-party certification testing of  Energy Star products compare with the previous self-certification process  in the following categories?  17. Have any of your company’s Energy Star-labeled products been  subject to Energy Star “off-the-shelf” verification testing or EPA’s or  DOE’s enforcement actions?
If yes, please explain the results:  18. Are you familiar with EPA’s procedure for delisting a labeled product?  15 (Skip to Question 19)  0 (Skip to Question 19)
Is the process clear?
Is it fair?  19. In your company’s view, are the program’s enforcement mechanisms  adequate to ensure labeled products comply with program requirements  and meet performance criteria?  20. Did your company consider, or is it considering, taking any of the  following actions as a result of the changes to the Energy Star program  being implemented under the MOU?
section_title: Appendix III: Comments from the Environmental Protection Agency
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Jon Ludwigson, Assistant  Director; Mark Braza; Heather Dowey; Paige M. Gilbreath; Michael  Meleady; Amanda Miller; Alison D. O’Neill; Barbara R. Timmerman; and  James W. Turkett made key contributions to this report.