[Pages S11253-S11255]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SEASONAL ENERGY EFFICIENCY RATING
Mr. BINGAMAN. Mr. President, I am here to address another aspect of
the energy issue that will come before us as comprehensive energy
legislation, hopefully either this fall or early next year. It may seem
to be an unusual item to address on Halloween as we are going into the
colder months of the year, but it is one which I think deserves
attention.
There was a development 10 days ago that I think needs to be called
to the attention of colleagues in the Senate. About 10 days ago, the
Environmental Protection Agency transmitted formal comments to the
Department of Energy--that is one agency of the Federal Government
commenting to another Agency or Department of the Federal Government--
on the proposed standard for efficiency in central air conditioners.
The Clinton administration had finalized a rule that mandated a 30-
percent increase in efficiency for those central air conditioners. It
was a so-called 13 SEER standard. SEER stands for seasonal energy
efficiency rating.
Shortly after the current administration took office, they proposed
to back off this mandate and reduce it to only a 20-percent increase or
a 12 SEER standard. The argument used by the new administration in
rolling back the air-conditioning standard struck many of us in
Congress as being based on outdated price data and a faulty analysis.
The Committee on Energy and Natural Resources, where the
distinguished Presiding Officer and I both serve, had a hearing on this
topic. We had expert testimony that demonstrated these analytical
problems in the decisionmaking which the new administration had gone
through.
This EPA filing 10 days ago capsulized those concerns eloquently. In
the Agency's own words, the new proposed standard--that is, the 12 SEER
standard, the lesser standard this administration embraced--
``overstates the regulatory burden,'' it ``understates the savings
benefits of the 13 SEER standard, over and underestimates certain
distributional inequalities,'' and ``mischaracterizes the number of
manufacturers that already produce at the 13 SEER level or could
produce at the 13 SEER level through modest changes to the product. . .
.''
I will read one other quotation from the explanation of the EPA
position. It says:
[[Page S11254]]
EPA believes there is a strong rationale to support a 13
SEER standard.
That is what the previous administration adopted.
EPA also believes that the more stringent standard will be
more representative of the long term goals of the
administration's energy policy and will do more to reduce
both the number of new power plants that need to be
constructed, as well as the emissions resulting from these
plants. . . .
While these comments by the Environmental Protection Agency have
received some attention, I believe they deserve broader attention by
the public and certainly deserve to be recognized by people in the
Senate.
I ask unanimous consent that the text of the EPA letter to the
Department of Energy and their explanation which they attached to that
be printed in the Record following my statement.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
(See exhibit 1.)
Mr. BINGAMAN. Mr. President, getting to a more efficient air-
conditioning standard is an important part of a national energy
strategy. This past summer, a nationwide heat wave in August led to
brownouts and blackouts as our electricity system was stretched to its
limits. While the new standard would take effect gradually over the
long term, it would help reduce the peak demand for electricity on very
hot days, and it would give consumers a break.
I have been informed that thousands of public comments have been
filed with the Department of Energy favorable to the 13 SEER standard,
demonstrating broad public support for sticking with that standard.
Previously, I indicated my belief that we should include a
legislative provision mandating a 13 SEER standard in any energy
legislation that we pass. It should be clear to all that this is a
matter where there is broad public support for the better standard, and
I believe the administration should try to be in line with that public
sentiment.
I hope the Department of Energy decides to go back to the earlier
established standard, and they can certainly do that administratively
without Congress having to act. But if DOE continues to push for
watering down the standard, then I hope the Office of Information and
Regulatory Affairs in the Office of Management and Budget will exercise
its watchdog role to ensure that good technical and economic analysis
carries the day on this issue.
I expect we will continue to see strong legislative support for this
standard in the debate on energy legislation we have over the next
weeks and months, and I hope that ultimately the EPA view of this
matter will prevail.
Exhibit 1
United States Environmental Protection Agency,
Washington, DC, October 19, 2001.
Ms. Brenda Edwards-Jones,
U.S. Department of Energy, Washington, DC.
Dear Ms. Edwards-Jones: On behalf of the U.S. Environmental
Protection Agency, I am pleased to submit the attached
comments to Docket No: EE-RM-98-440, the Department of
Energy's Proposed Rule: Energy Conservation Program for
Consumer Products; Central Air Conditioners and Heat Pumps
Energy Conservation Standards.
DOE has proposed a change to its previously issued standard
that decreases energy efficiency requirements for residential
air conditioners and heat pumps. DOE proposes to withdraw its
previously issued 13 SEER standard and replace it with a 12
SEER standard. These comments affirm EPA's support for DOE's
original 13 SEER standard.
EPA believes there is a strong rationale to support a 13
SEER standard. A 13 SEER standard represents a 30% increase
in the minimum efficiency requirements for central air
conditioners and air source heat pumps. In contrast, a 12
SEER standard represents only a 20% increase. The
Administration's National Energy Policy stresses the
important role that energy efficiency plays in our energy
future. A 13 SEER DOE standard will do more to stimulate
energy savings that benefit the consumer. DOE has quantified
these savings at approximately 4.2 quads of energy over the
2006-2030 period, equivalent to the annual energy use of 26
million households and resulting in net benefits to the
consumer of approximately $1 billion by 2020. In comparison,
DOE projects that only 3 quads of energy would be saved over
that same period with a 12 SEER standard.
A 13 SEER standard will also do more to reduce fossil fuel
consumption and more to limit emissions of air pollutants.
For example, by avoiding the construction of 39 400 megawatt
power plants, a 13 SEER standard will reduce nitrous oxides
(NO<inf>X</inf>) emissions by up to 85 thousand metric tons
versus up to 73 thousand metric tons that would be reduced
with a 12 SEER standard. A 13 SEER standard will also result
in cumulative greenhouse gas emission reductions of up to 33
million metric tons (Mt) of carbon. This is in contrast to a
12 SEER rule which will reduce up to 24 Mt of carbon
equivalent by avoiding the construction of 27 400 megawatt
power plants. At a time when many areas across the nation are
struggling to improve their air quality, the additional
emissions reductions achieved by a 13 SEER standard are
especially important.
Thank you for the opportunity to provide these written
comments. Should you have any questions, please contact Dave
Godwin in EPA's Office of Air and Radiation at 202-564-3517
or via e-mail at godwin.dave@epa.gov.
Sincerely,
Linda J. Fisher,
Deputy Administrator.
Comments of the U.S. Environmental Protection Agency on the Proposed
Rule: Energy Conservation Programs for Consumer Products; Central Air
Conditioners and Heat Pumps Energy Conservation Standards, October 10,
2001
overview of epa comments
The Environmental Protection Agency welcomes the
opportunity to comment on the Department of Energy's Proposed
Rule setting forth energy conservation standards for
residential central air conditioners and central air
conditioning heat pumps. EPA recognizes that the new proposed
DOE rule represents a 20% increase in minimum efficiency
standards for central air conditioning and heat pumps.
However, we instead support the previous final rule of a 30%
increase.
EPA has issue with several of the arguments DOE used to
justify the withdrawal of the previous final rule as outlined
within the Federal Register Notice of July 25, 2001 and the
Technical Support Document. In summary, EPA believes that the
information in the Federal Register Notice of July 25, 2001
overstates the regulatory burden on manufacturers due to
HCFC phase-out and concludes that the industry is under
greater financial pressure from a 13 SEER standard than it
is,
understates the savings benefits of the 13 SEER standard,
over and underestimates certain distributional
inequalities,
mischaracterizes the number of manufacturers that already
produce at the 13 SEER level or could produce at the 13 SEER
level through modest changes to the products, and thereby
mischaracterizes the availability of 13 SEER product.
[EPA believes there is a strong rationale to support a 13
SEER standard. EPA also believes that the more stringent
standard will be more representative of the long term goals
of the administration's energy policy and will do more to
reduce both the number of new power plants that need to be
constructed, as well as the emissions resulting from these
plants.] EPA's more detailed comments are provided below.
Another example would be:
Move directly to producing R-407C and/or R-410A units that
meet the new DOE efficiency regulations;
Increase the production of these units to meet customer
demand by 2006;
Meanwhile, phase out all HCFC-22 units by 2006.
Of course, some combination of these strategies is more
likely to be taken and seems to offer the most opportunity
for manufacturers to reduce regulatory burden.
The TSD states ``To the extent that manufacturers can
introduce new products utilizing the new refrigerant and
meeting the new efficiency standard, the cumulative burden
will be reduced.'' (TSD page 8-62). EPA believes that there
is ample opportunity to meet both a 13 SEER efficiency
standard and a ban on HCFC-22 in new equipment with limited
regulatory burden.
Underestimates of Savings in the Cost Benefit Analysis
DOE's analysis of the benefits of the withdrawn 13 SEER
rule are significantly underestimated. DOE's analysis is
based on summer 1996 electricity prices, adjusted downward
based on EIA projections of future annual electricity prices.
Changes in the electricity market due to utility deregulation
has resulted in increased electricity prices overall. DOE did
not consider this trend in its analysis.
According to Synapse Energy Economics' wholesale
electricity price data, DOE analysis underestimates the cost
of electricity for residential air conditioning by an average
of approximately $0.02/kWh. In addition, the California
Public Utilities Commission raised some residential rates by
as much as 37%, affecting more than 10% of the U.S.
electricity market and thereby, raising the national average
electricity prices above DOE's projections. Adjusting DOE's
analysis to include more recent electricity prices will
definitely and drastically alter the results indicating that
a DOE minimum standard of 13 SEER represents the better
decision for the nation.
Over and Under Estimates of Distributional Inequities
EPA sees distributional inequalities that DOE has not
adequately considered. One results from the fact that the
residential price of electricity does not capture the
complete cost for running systems that largely run at peak
times. That is, except in select circumstances, residential
customers purchase electricity based upon average rates, not
``time-of-use'' rates. The actual costs of electricity at
peak times are dramatically more
[[Page S11255]]
and therefore, higher peak rates drive up the average costs. Less
efficient equipment operating at peak times drives up the cost of
electricity for all customers, including those of low income, who are
less likely to have central air conditioning. According to 1997
Residential Energy Consumption Survey (RECS) microdata (the same data
set used by DOE in their analysis), of the total 101 million households
represented, approximately 46% have central air conditioning, but among
poor households, only 25% have central air conditioning; just half the
rate of presence among non-poor households (See Exhibit 2).
Also related to distributional equities and according to
the RECS data, among households below the poverty level,
about 60% rent their housing units. This is in contrast to
27% of above poverty level households that rent (See Exhibit
2). Therefore, low-income consumers, or those defined as
``poor'' in TSD Table 10.1, are not the ones to buy a central
A/C or heat pump product, but they would be the one to pay
the utility bill (or likely face increased rents if utilities
were included in their rent) for the use of that product.
Instituting a higher minimum efficiency standard will
actually ensure that low-income consumers have lower utility
bills, providing a benefit to this population.
misinformation on product availability
DOE justifies a lower SEER rule because the higher
efficiency levels would put manufacturers out of business.
However, according to the Air Conditioning and Refrigeration
Institute (ARI) database of model combinations, many
manufacturers already produce models that meet the 13 SEER
requirements. This technology has been available for many
years to large and small manufacturers alike. Although
confidential ARI shipment information may not reflect large
sales of high efficiency equipment, the publicly accessible
ARI database of models shows extensive product availability.
Over 7,000 air source heat pump model combinations and over
14,000 central air conditioner model combinations currently
meet or exceed the 13 SEER level as listed by ARI.
The TSD (TSD page 8-2) describes a group of manufacturers
that ``offer more substantial customer and dealer support and
more advance products. To cover these higher operating
expenses, this group attempts to ``sell-up'' to more
efficient products or products with features that consumers
and dealers value.'' With a higher standard, these
manufacturers would not go out of business, but would rather
continue to sell-up, to even higher efficiency levels or
additional valued features.
Furthermore, results and upcoming plans for utility
programs around the country also document the availability of
13 SEER and above products, as well as the demand for such
products. Austin Energy's Residential Efficiency Program
2000-2001 gave rebates to single family existing homes for
installation of split systems and heat pumps
with efficiencies of 12 SEER and above. Rebates were
staged: $150 for 12.0-12.9 SEER; $250 for 13.0-13.9 SEER;
$400 for 14.0-14.9 SEER; and $500 for 15.0 and above. In
total, 4,000 rebates averaging $312 were given to
consumers. These numbers illustrate that a significant
portion of the rebates given were for 13 SEER and above
units.
In New Jersey, a 3-year rebate structure began in 2000 with
a $370 rebate given for the installation of 13.0 SEER
equipment and a $550 rebate given for 14.0 SEER equipment. A
total of 14,000 rebates were given in the year 2000. As of
August 2001, 8,000 rebates were given out with approximately
6,000 of these units at the 14.0 SEER level. Overall results
in New Jersey show that 27% of the market (1998-2000) are 13
SEER or higher with 60% of those being at the 14 SEER or
higher levels.
The Long Island Power Authority (LIPA) instituted a program
similar to the one in New Jersey offering rebates for
installation of 13.0 and 14.0 SEER equipment. Results to date
show that LIPA is on target to reach their goal of
approximately 3,500 rebates for 13 SEER equipment.
Approximately 80% of these rebates are for SEER 14 equipment.
LIPA is expecting to ramp up to 5,000 rebates in 2002.
Overall, 17% of LIPA's market in 2000 is at 13 SEER or
higher, with the market share for existing homes even higher
at 22%.
Program plans for 2002 in Texas and California are geared
toward equipment at 13 SEER and above. Reliant Energy in
Southeast Texas is planning an incentive program to target 13
SEER and above matched systems. California's two large
municipal utilities (Sacramento Municipal Utility District
and Los Angeles Department of Water and Power) and four
investor owned utilities (San Diego Gas and Electric,
Southern California Gas, Southern California Edison, and
Pacific Gas and Electric), serving over 30,000,000 consumers,
are planning rebate programs to assure California residents
receive energy efficient equipment, measures, and practices
that provide maximum benefit for the cost. These programs all
revolve around 13 SEER equipment or higher. Actual incentive
amounts are not yet available.
____________________