DOE’s Simmons on Energy Conservation Regulation (pro-consumer orientation long overdue)

“Affordable, reliable energy is critical to human well-being.”

– Daniel Simmons (current DOE assistant secretary)

“When energy is scarce or expensive, people can suffer material deprivation and economic hardship.

 – John Holdren (former Obama science advisor)

A top official of the US Department of Energy did something last week that had not been done in many, many years. In his Statement for the Record, Daniel R Simmons, Assistant Secretary, Energy Efficiency and Renewable Energy (EERE), presented a pro-consumer brief in a hearing on appliance standards before the US House of Representatives.

Energy sustainability can and should be defined in terms of consumer welfare. As Obama’s former science advisor John Holdren stated (above), energy is not a luxury but a necessity–and is respected as such in free market, capitalist societies. (For more Holdren pro-consumer sustainability quotations, see here.)

Some highlights from Simmons’ historic testimony follow:

Energy Affordability

“One of my top priorities for EERE is energy affordability. Affordable, reliable energy is critical to human well-being.”

“The use of energy helps keep us safe, saves us time, amplifies our work efforts, and reduces the effects of distance, among other benefits. When energy is more affordable, it frees up more of our budget and time so we can spend these precious resources on the things we care about most.”

“While we have made positive progress toward more affordable energy, there is much more work to do. Economic growth has lifted billions of people out of extreme poverty, but nearly half of the world’s population still lives on less than $5.50 a day.”

“Energy affordability affects people in the United States. According to the most recent results from the U.S. Energy Information Administration’s Residential Energy Consumption Survey (RECS), “[n]early one-third of U.S. households reported facing a challenge in paying energy bills or sustaining adequate heating and cooling in their homes.’”

“When we work towards making energy more affordable, we are helping people who are struggling economically. When we have plentiful and affordable energy in the United States, it helps businesses grow by reducing a critical cost and it makes the United States more competitive globally.”

Policy Reform: Modernize, Simplify, Consumerize

Simmons updated the huge number of ongoing regulatory actions: “EERE has 50 active regulations in various stages of development that it plans to take action on in the coming year … [including] 24 test procedures and 17 energy conservation standards for products ranging from microwaves and lamp ballasts to commercial refrigeration equipment.”

“[We] believe that DOE can improve the process by which it develops these minimum standards to make the program even more effective…. [including] early engagement opportunities for stakeholders and increase certainty throughout our rulemaking process.”

“[Regulatory] improvements will … ensure that consumers’ interest in avoiding significant increases in upfront cost and a loss of product choice are protected in the standards development process.”

“As a backup, DOE also proposes an alternative threshold such that each rule would need to achieve at least a 10% energy savings over the current standard so that rules covering fewer products do not slip through the cracks…. [T]his threshold allows us to implement Congress’ mandate that the Department regulate only when doing so will save a significant amount of energy without sacrificing the energy savings that consumers and businesses value.”

“[DOE proposes to] establish test procedures 180 days before initiating a new energy conservation standard rulemaking….  [I]n the past DOE has not always met this timeframe, and as a result stakeholders have been concerned when DOE regulates the efficiency of products before specifying how energy use will be measured through the test procedure.”

“[DOE proposes to] codify industry consensus standards for test procedures, but only when doing so would accurately reflect energy efficiency, energy use, and estimated operating costs during a representative average use cycle and not be unduly burdensome. This change would insert the statutory criteria for assessing a test procedure into the process and allow manufacturers to test their products at lower cost than when DOE creates a separate testing metric.”

“[DOE proposes to] expand the opportunities for stakeholders to become engaged early in the rulemaking process. DOE interacts with a wide spectrum of stakeholders in the development of new energy conservation standards and test procedures. These stakeholder perspectives are a crucial component of the rulemaking process.”

“The proposed Process Rule would modernize the framework for DOE’s Appliance Standards Program, which has not been updated since its issuance in 1996. This updated framework would … [create] a more transparent and predictable rulemaking process.”

“[T]he changes that DOE is proposing would focus the Department’s resources on the rulemakings that stand to benefit consumers the most by prioritizing the standards that have the potential to save the greatest amount of energy. This change also shows that the Department is truly focused on pursuing standards with the greatest environmental benefit.”

“By prioritizing the rules that are primed to save consumers the most money, the Department is streamlining its rulemaking process and better able to focus on meeting its statutory deadlines.”

“This proposal reduces regulatory uncertainty by making clear that the sale of several lamp types (that is, light bulbs) will continue, including certain halogen A-line lamps, incandescent reflector lamps, globe lamps, and candelabra lamps. Millions of households use these light bulbs every day, and the Department recognizes the importance of access to reliable and affordable options that meet their needs, as well as the importance of consumer choice generally.”

“Maintaining the statutory definitions provides manufacturers and retailers with the regulatory certainty that they are not prohibited from selling hundreds of millions of bulbs.”