WASHINGTON, D.C. – Representative Edward J. Markey (D-MA), a senior member of the House Energy and Commerce Committee, today addressed an alarming Government Accountability Office report on the Department of Energy’s extreme delay in setting and meeting appliance and building code standards at a press conference. His prepared remarks follow:
Thank you, Chairman Boucher, and Chairman Dingell.

The GAO report we are releasing today represents a blistering indictment of a culture of incompetence and delay at the Department of Energy’s appliance standards and building codes standards setting programs.  While I have long had concerns about DOE’s delays in issuing new or revised appliance standards, what GAO is telling us in this report is that the problem is far worse than any of us had even suspected.  
I am the author of many of the appliance standards that DOE has failed to implement.  Back in 1985 and 1986, I Chaired the Energy Conservation and Power Subcommittee.  I worked on a bipartisan basis with my Ranking Republican Member, former Rep. Carlos Moorhead (R-CA) and we enacted legislation which established the appliance standards for eleven covered products:  refrigerators and freezers, room air conditioners, central air conditioners and heat pumps, water heaters, furnaces, dishwashers, clothes washers, clothes dryers, direct heating equipment, and pool heaters.  Unfortunately, President Reagan pocket-vetoed my bill, so we had to pass it again in 1987.  Then, in 1991, I drafted a second appliance standards bill with former Rep. Bilirakis (R-FL) which added standards for a wide range of appliances, including certain lamps, commercial and industrial electric motors, heating, ventilating, and air conditioning systems, high-intensity discharge lamps, distribution transformers.  Our bill was subsequently incorporated into the Energy Policy Act of 2002.
What this GAO report shows is that the agency responsible for issuing energy efficiency standards for consumer and commercial appliances, and for ensuring adoption of more energy efficient building codes has missed all 34 Congressional deadlines for setting energy efficiency standards for the 20 product categories that have statutory deadlines.  It has also missed 3 out of 4 of the deadlines for issuing commercial building codes determinations.  While some of these delays have only been for a few months, there are others that have ranged up to more than 15 years.  

These delays have an enormous impact on consumers and on the environment.  According to GAO, if you look at just the top 4 appliances where the greatest energy savings can be achieved through new standards (refrigerators and freezers, central air conditioners and heat pumps, water heaters, and clothes washers), DOE’s failure to act will result in $28 billion in foregone energy savings by 2030.  This translates into 2.1 quadrillion BTUs of natural gas and 1.4 quadrillion BTUs of electricity.  That’s enough energy to supply the energy needs of 20 million American households.

And these 4 product categories represent just a part of the story.  According to the Appliance Standards Awareness Project, if DOE set new standards for all of the products for which standards are currently overdue, at reasonable levels, we would save about 200 billion kilowatt hours of electricity per year.  That’s about equal to the power generated by 67 500 megawatt baseload coal-fired power plants.

DOE’s delays also have a huge impact on the environment.  GAO reports that delays in setting standards for just 4 categories of appliances that use the most energy (refrigerators and freezers, central air conditioners and heat pumps, water heaters, and clothes washers) will result in 53 million tons of carbon dioxide emissions.  According to the Appliance Standards Awareness Project, if all of the backlogged appliance standards were to be fully cleared, we could avoid about 36 million metric tons of carbon emissions per year.

As disturbing as these findings about DOE’s delays are, GAO’s also lacks confidence in  DOE’s plan for addressing its backlog.  The fact that the Department doesn’t have the necessary program management data to ensure its plans to fix this program actually address the root causes of the delays is quite troubling.  But I am even more concerned about GAO’s finding that DOE hasn’t taken necessary steps to ensure management accountability for meeting all the deadlines.  As the GAO report notes “plans should hold officials and staff accountable for meeting interim and final deadlines.”  However, according to the GAO, “DOE’s plan does not include a means of ensuring that staff and reviewers are accountable for meeting deadlines.”  Accountability is critical, and DOE needs to address this finding by the GAO.

The GAO also finds that DOE’s plans going forward don’t ensure that there will be sufficient resources made available to clear the backlog.  According to the GAO, DOE’s plans for getting rid of the backlog require a sixfold increase in workload over that in recent years – but the Department is not making a proportionate increase in the resources it will devote to the program.  I don’t see how this is possible, and we clearly will need more staffing and resources made available to this program in order to clear the backlog.

While erasing the backlog of delayed standards is critically important, we also need to ensure that the standards that are issued are good ones.  In the past few months, DOE has proposed new efficiency standards for home furnaces and boilers and electric distribution transformers.   Each of these proposed standards is far too weak.  For example:

•    DOE’s electric distribution transform standard falls short of the level DOE’s own analysis indicated would minimize the overall costs to purchase and operate transformers. In fact, both the utility industry and the environmental community have actually joined to recommend that DOE increase the distribution transformer standard.  These stakeholders cited DOE’s own analysis, which shows that a stronger standard would save enough power to meet the needs of 2.3 million typical US households.  I would urge DOE to respond favorability to the industry and energy efficiency advocates recommendation for adoption of a stronger standard.  
•    DOE’s home heating furnace standard is also too weak.  DOE’s proposed standard of 80% efficiency is already met by 99% of furnaces sold in this country right now, despite the fact that DOE’s analysis reportedly shows a national standard at 90% efficiency is cost effective on average.  I’m informed that a furnace standard set at 90% annual fuel utilization efficiency applied in the northern half of the country only would save 1.7 billion therms per year when fully implemented, enough to heat about 3.1 million typical homes. That could help consumers save about $8 billion over about 20 years.
•    Finally, DOE last year rejected a home heating boiler consensus proposal proposed by the boiler manufacturers and energy efficiency advocates.  I believe that DOE should reconsider this decision.

Today’s report indicates that we have a lot of work to do to get this program back on track.  I appreciate Assistant Secretary Karsner’s willingness to join with us here today to respond to the GAO’s findings, and I hope that he will take them seriously and do everything he can to address our energy concerns.