US DOE in a race against time to update energy savings standards

Three new energy efficiency rules for appliances released since late December 2023 are projected to save US consumers and businesses a combined $94 billion over 30 years while avoiding 423 million metric tons of greenhouse gas emissions. The impacts of such conservation measures are set to grow as more rules are pushed out in the coming months.

As part of President Joe Biden's climate agenda, the US Energy Department has been chipping away at a backlog of congressionally mandated energy efficiency updates for household and business appliances that piled up under the Trump administration.

The agency is also required to meet court-ordered deadlines under a 2022 consent agreement the Biden administration reached with more than a dozen states, environmental organizations and consumer groups that had sued over the delayed rules.

Proponents of the agency's appliance efficiency work are pleased with the progress but worry that the window for stronger energy conservation measures is narrowing. Any delay could risk standards getting reversed or weakened if a new president moves into the White House in 2025, they said.

At the same time, the power and natural gas industries are voicing growing concern over energy conservation updates that some players say will bring questionable results or impose unreasonable mandates on companies.

"We're seeing significant pushback from some industry voices and particularly the gas industry," Andrew deLaski with the Appliance Standards Awareness Project said in an interview. "That kind of opposition can make it hard to get things done. And of course, it's an election year, which can create all sorts of distractions."

Despite the pushback, the DOE under the Biden administration has been able to stay on track and catch up on most of the 28 deadlines the agency had missed by the time Biden took office, data from deLaski's program shows. The Appliance Standards Awareness Project is housed by the nonprofit American Council for an Energy-Efficient Economy.

Industry pushes back

The DOE projects that the energy efficiency standards that have been proposed and finalized since 2021 will add up to nearly $1 trillion in consumer savings over 30 years and will avoid 2.5 billion metric tons of greenhouse gas emissions.

But the American Gas Association is asking a court to overturn one of the most consequential DOE rules, designed to tighten energy efficiency requirements for residential furnaces.

The DOE expects that the furnace rule finalized in September 2023 will save consumers nearly $25 billion on their energy bills over 30 years. The more efficient furnaces would also keep 332 million metric tons of carbon and 4.3 million metric tons of methane out of the atmosphere, equivalent to shutting 29 coal plants, the agency said.

Matt Agen, the American Gas Association's chief regulatory counsel for energy, said the trade group supports the overall goal to increase energy efficiency but believes that the DOE did not follow statutory requirements as it crafted the new rule. The agency did not account for all appliance life-cycle costs, such as installation and maintenance costs, that would be borne disproportionately by seniors and low-income households under the new furnace rule, Agen said in an interview.

"One of the reasons we're pushing back on this is because they just haven't sufficiently analyzed that issue or even answered that real question satisfactorily to account for those higher costs for customers," Agen said. "Their cost estimates, we think, are very low."

Any rule that may prompt consumers to switch from a furnace running on natural gas to an electric heat pump will also increase electricity demand and thus affect gas utilities, Agen added.

Charlie Harak, a senior attorney with the National Consumer Law Center, countered that many low-income Americans are tenants in apartment buildings who will benefit from lower heating costs when their landlords install more efficient furnaces. He also noted that many states have utility-funded energy efficiency programs that help low-income homeowners buy appliances.

The law center does not support all DOE energy conservation rules but generally thinks that the agency has been getting its cost-benefit analyses right in the past few years, Harak said.

"A trade association's job is to protect the revenues of its companies," the consumer advocate said. "But why would federal bureaucrats want to stiff low-income consumers?"

After air conditioning, furnaces gobble up more energy than any other home appliance, according to the US Energy Information Administration.

Consumer, climate benefits reduced

Pushback from industry and Republican lawmakers over high-profile energy-efficiency rules has also prompted the DOE to weaken some measures, as was the case with a new cookstove rule released Jan. 29.

The final cookstove rule is projected to generate $1.63 billion in consumer savings over 30 years, down from $2.28 billion in the proposed rule the DOE revised following a yearlong heated debate over the administration's natural gas policies. Projected greenhouse gas reductions dropped from 21.9 million metric tons to less than 4 million metric tons in the final rule.

The nation's first energy conservation standard for cooktops leaves 97% of natural gas-fired stoves sold on the market today untouched, protecting revenue for a powerful energy industry. The DOE had originally estimated that half of the stoves would not meet the new standard. The American Gas Association was among groups that rallied against the 2023 proposed rule.

US Rep. Debbie Lesko (R-Ariz.), whose Save Our Gas Stoves Act was one of two bills the House passed in June 2023 to block regulation of the appliance, credited her legislation for the revised rule even though it never passed the Senate.

The bipartisan passage of the bill "helped the Biden administration realize they had to dial back their radical agenda against gas stoves," Lesko said in a Jan. 31 statement.

A second bill Lesko sponsored, dubbed the Hands Off Our Home Appliances Act, would prohibit the DOE from issuing any energy efficiency rules that would increase costs for consumers, even if the cost would be offset by energy savings over time. If passed, the legislation "would basically freeze up the program and make it virtually impossible for DOE to update standards in the future," deLaski said.

The DOE did not respond to questions about how its staff is handling the current workload or how politics or litigation could affect its schedules, instead pointing to official news releases describing the agency's dedication.

For now, the agency's efforts are backed by the 2022 consent agreement spelling out deadlines through 2024. In September 2023, home appliance manufacturers also reached a deal with consumer, climate and energy conservation groups to support new efficiency standards for six home appliances that would go into effect between 2027 and 2029. The deal will help limit litigation and smooth the way for such updates, the parties said.

"DOE will continue to work quickly in 2024, together with our industry partners and stakeholders, to update and strengthen outdated energy efficiency standards," Energy Secretary Jennifer Granholm said in a Dec. 29, 2023, statement.