Energy Efficiency is Too Important for Political Stasis

Late last month, the Department of Energy proposed long overdue energy efficiency standards for commercial refrigeration units and published them for public comment yesterday. The rules, which had been held up at OMB’s Office of Information and Regulatory Affairs (OIRA) for almost two years will resultin savings of over $28 billion for businesses over the next 30 years and reductions in carbon emissions of 350 million tons over the same period. As we’ve discussed numerous times, rules are required by executive order to be reviewed by OIRA for no longer than 120 days. And OIRA routinely hangs onto them for months and frequently years. Recently, a rule to green federal office building just hit the two-year mark at OIRA.

So what’s happened in the past two years to slow down the progress of these two rules along with the other energy efficiency standards stuck at OIRA? After all, back in 2009, former Energy Secretary Steven Chu described energy efficiency standards as not just low hanging fruit, but “fruit lying on the ground.”

Savings for industry and consumers as well as reducing the burden of greenhouse gases on the environment seems like a no-brainer to anyone with common sense. But then, there are always House Republicans. Just this past summer, Rep. Marsha Blackburn (R-TN) waged a war against ceiling fans. That’s right, she tacked on an amendment to the Energy and Water spending bill to stop a DOE rulemaking process to review ceiling fan standards mandated by Congress itself. Feverish and kneejerk anti-regulatory efforts like these have unfortunately taken off in recent years in spite of past bipartisan support for energy efficiency and in many cases, industry enthusiasm for moving forward. 

In a report CPRput out last year; we detailed the history of efficient light bulb standards championed by both parties and signed into law by President Bush in 2007. In an over-heated anti-regulatory switch, Representative Fred Upton (R-MI) wrote the law and then became a staunch opponent of it even with the leading light bulb trade group in favor of it.

OIRA exists in the middle of this sweaty stew, as part of the White House it is the barometer by which the Administration takes the temperature of the existing political environs and decides to move forward or hold onto rules drafted by the DOE, EPA, OSHA and others. If a rule is too politically daunting the White House has a history of backing down and hiding behind neoliberal plaudits to engage in an endless “cost-benefit” analysis of rules. In May, CPR’s Lisa Heinzerling described the gauntlet the refrigeration standards were subject to as favored by recent OIRA Administrator Cass Sunstein: 

In Sunstein’s rendering, the analysis of a rule on refrigerator efficiency would need to discuss how much money consumers save (or lose) when buying a more efficient refrigerator, whether the efficient refrigerator works as well as the inefficient one, whether having efficient refrigerators will make consumers more or less likely to buy new refrigerators, whether consumers would use efficient refrigerators more than they use inefficient ones, how much air pollution is reduced by the enhanced efficiency (and thus lower electricity demand) of refrigerators, how many people would have died or fallen ill if that pollution had not been reduced, and how much these people’s lives are worth in dollars.  

Meanwhile, a recent report by the American Council for an Energy-Efficient Economy (ACEEE) found that the Department of Energy itself has been overestimating the costs associated with energy efficiency tenfold. They found that the past nine energy efficient rulemakings for appliances resulted in a $12 price decrease for consumers on average while the Agency predicted an average increase of $148 for efficient appliances like air conditioners and clothes washing machines.

In this environment, what can account for the sudden release of the commercial refrigeration rules from OIRA’s hammerlock? While we’d like to believe that it might be part of President Obama’s recently launched Climate Change Plan, the truth might be closer to a combination of the Administration’s new initiative and good, old fashioned and dogged advocacy by those outside the beltway’s circulatory system. States like New York, Maryland, Washington, Vermont and others joined with environmental groups to threaten the DOE with legal action if it did not move forward with rules. Last month, they received notice that the rules will be posted as final in February and April of next year.

We hope this is the start of a new direction for the Administration going forward, these rules are too important to the leave to the whims of political stasis.