November 26, 2014 at 5:00 am ET
Most in Washington are familiar with the U.S. Department of Energy’s appliance rulemaking program. Run by the DOE’s Building Technology Office, this program seeks to respond both to congressional tasking and previously-granted authority to establish and review federal appliance energy conservation standards. While this approach has resulted in significant energy savings over the years, there are limitations to it. When a product class first enters into the process, there is often substantial energy savings to be reaped. For example, a product class whose designs have not previously been encouraged to improve energy efficiency might see significant double-digit efficiency gains in its first rulemaking. Then the process settles down into a maintenance phase, if you will, where gains become much less as they seek further improvements. As savings opportunities diminish rapidly after the first iteration approaching diminishing returns with subsequent reiterations it begs the question, “Where does it end?”
Regardless of the amount of potential energy savings inherent in a given rulemaking, industry and other stakeholders must devote significant resources and time to these rulemaking activities and an industry reacting to a new regulation often must divert resources from other investments, i.e. other product development. For an industry engaged in an emerging technology, this can lead to delays in improvements and growth. But where does it end? The DOE currently has no published guidance; rather it relies on precedent and existing statute which states the Secretary of Energy may undertake a rulemaking where it has been determined that “significant” energy savings lie. The problem is that the word “significant” is not defined anywhere, not even in DOE itself. In practice, this can be heavily influenced by politics, and the current climate sees the department undertaking almost every rulemaking it explores, regardless of the size of predicted energy savings.
What is missing from the current practice at DOE is the opportunity that lies in systems efficiency. In this case, systems efficiency refers to the energy savings potential that results from a properly installed, controlled and maintained system be it in a home, commercial building, or elsewhere. According to the DOE, commercial buildings account for 36% of all U.S. electricity consumption and cost more than $190 billion in energy every year. The National Electrical Manufacturers Association (NEMA) High Performance Building Council seeks to contribute to proceedings involving energy-efficient structures, and the NEMA Lighting Systems Division often promotes a “systems approach” to energy efficiency, as is explained in a NEMA White Paper on the subject.
The Challenge: DOE’s models for engaging in rulemakings and the existing enforcement procedures are typically tied to point of sale reporting and policing, thus installation cannot be accounted for. Herein is the challenge to quantify and assure energy saving from successful systems installations, which DOE cannot police from its current vantage point. In the existing model, manufacturers are required to submit information regarding product performance and compliance to DOE’s databases. DOE’s enforcement activities start at this database, and occasionally extend to liaison with the Customs and Border Patrol to monitor importation of energy-using appliances. But this approach is not capable of examining or incentivizing “systems” solutions at the point of installation, only component performance. Unfortunately, the active-use phase is exactly where energy savings matter most. The lack of strong DOE-led incentives arguably also leads to less public promotion of systems solutions, reducing customers’ opportunities to learn more about how to save increased amounts of energy over component standards. While some building and installation codes attempt to address this, there is not a substantial amount of federal incentive or guidance in this area. Were DOE to spend less time on component regulations and more time on systems solutions, this would change.
NEMA is among the entities working to determine and promote systems-level energy savings solutions and processes to promote and proliferate—in cooperation and perhaps one day in replacement of appliance standards—or at least in place of second- and third-tier appliance standards. Most recently, NEMA participated alongside numerous other stakeholders at a forum discussion at the offices of the American Council for an Energy Efficient Economy in Washington, D.C., to identify paths for new appliance standards and ways to move beyond those that had reached their peaks of feasibility.
One approach that has already gained attention is the renewed interest of DOE and stakeholder interest groups to pursue negotiated rulemakings, or RegNegs, and Direct Final Rules. In both cases, stakeholder interest groups discuss the rulemaking in person publicly, either to draft a proposed rule or lead straight to an agreed upon (and easily implemented) final rule. These two processes cut out months or years of lengthy iterations of public notice and response, in which proposals, counterproposals and comments are analyzed and processed in private by DOE and its consultants. In negotiated rulemakings, agreements regarding scope and impact of the potential rules can be openly considered and agreed upon, and the resulting rulemakings more quickly and efficiently implemented. NEMA has participated in both approaches—with good results—and looks forward to participating in more.
Stakeholders and government should work more closely together to identify and move in concert towards energy efficiency solutions that save maximum energy with minimum burden on industry and consumers.
Alex Boesenberg is the Manager of Regulatory Affairs for the National Electrical Manufacturers Association (NEMA).