Three years ago, I wrote about the Department of Energy’s new found zeal for using its authority to develop and enforce energy efficiency standards. Upping the Ante on Energy Efficiency Standards (paywall). Nothing has really changed since then, and my experience counseling clients on these requirements confirms that DOE remains extremely active. The Department continues to develop new and revised efficiency standards for an ever-growing list of consumer and commercial products, and its enforcement program has become more predictable and institutionalized.
A brief run-down of what’s happened recently and what to expect.
More Equipment Will be Subject to Stricter Energy Efficiency Standards. DOE has been busy issuing more stringent efficiency standards for more and more products. As I recently reported, DOE has proposed to add computers and computer servers as covered “consumer” products, nothwithstanding its questionable legal authority to do so. More recently, in the face of threats from several states and environmental NGOs, DOE has agreed to an ambitious schedule for issuing standards for metal halide lamps, commercial refrigeration equipment, walk in coolers/freezers and electric motors. As a result, DOE has already issued a proposed rule to establish standards for metal halide lamps and plans to issue in the next few days proposals for commercial refrigeration and walk in coolers/freezers. At the same time, DOE has been actively engaged with industry and NGOs to develop certification requirements for commercial air conditioning equipment. DOE is also planning to issue standards for industrial and commercial pumps. The list of covered products continues to grow.
DOE Has Ambitious Plans to Revise and Tighten Existing Energy Efficiency Standards. All of this activity is in addition to the Department’s routine review of existing efficiency standards and test methods. DOE has an ambitious schedule to review and update dozens of standards in the next three years. It’s true that DOE has historically missed these type of deadlines, and the DOE Inspector General just issued a scathing report confirming the Department’s failings in this regard. Nevertheless, there can be little doubt that DOE has put into place a program that commits it to tightening existing standards and expand the types of equipment subject to standards.
Climate Change is the Driver. It’s no secret why DOE has been so active. President Obama has made increased energy efficiency one of the pillars of his climate change plan, and improvements in energy efficiency is often seen as one of the “low-hanging fruits” to reduce emissions of greenhouse gases. Another sure sign that climate change is driving DOE’s efforts is its reliance on a new (and higher) estimate for the “social cost of carbon” to justify new standards for standby and off modes in microwave ovens. DOE’s use of this new estimate in the microwave rule, in fact, is the subject of a petition for reconsideration filed by the Landmark Legal Foundation and on which DOE is currently seeking comment. Landmark argues that DOE needs to reopen the rule for new comment because the Department used used a different Social Cost of Carbon from the figure it used in the proposal. Regardless of the outcome of this petition, however, DOE (and other federal agencies) will continue to rely on this new estimate to support and justify stricter standards. It is an issue worth following.
Enforcement is Continuing to Rise. Before 2010, DOE did not have an office dedicated to enforcement of its energy efficiency standards. The result was a haphazard approach to enforcement, with most cases settled quietly and with small penalties. With the creation of the Office of Enforcement (located within the General Counsel’s office), DOE has stepped up the pace. Cases are brought more frequently, the results are made public, and the penalties have increased. The Office has issued guidance on its enforcement approaches, identified priorities, and is taking proactive steps to identify violators, focused on certification and compliance issues. As the Office of Enforcement matures, it will become more effective. Enforcement is on the rise.
All this activity raises the obvious question of what a company subject to existing or planned standards should be doing now. There are several steps that should be taken.
First, make sure your compliance program addresses energy efficiency compliance. Develop a system to ensure that annual certifications are filed and that new equipment is tested and certified before distribution in commerce. Become familiar with DOE’s enforcement guidance. All these steps will help to avoid DOE enforcement, the imposition of penalties and the need to implement remedial actions to fix compliance issues.
Second, get active. Pay attention to DOE’s schedules for issuing new standards. Sign up for DOE’s listserve so that you receive advance notice of all energy efficiency regulatory activity. Submit comments on proposed rules, either through your trade association or individually (or both). These comments should provide data to support your arguments. NGOs are doing this, and so should you. The comments should be prepared with the possibility that you might need to seek judicial review of the final rule if DOE’s action is believed to be unlawful or arbitrary or capricious. If that’s the case, you need to make sure that the administrative record that DOE has prepared contains the information you will need to win that case.
DOE has stepped up its game. You should too.
Update: While dropping my teenage son off at college to start his freshman year, I had the opportunity to attend the first policy speech by Ernest Moniz, the new Secretary of Energy, at Columbia University’s new Center on Global Energy Policy. While Moniz discussed a variety of issues regarding Obama’s climate change policy and energy use and development, he again emphaszied the importance of energy efficiency. He confirmed what I report above – DOE intends to aggressively pursue energy efficiency improvements as a means of reducing carbon emissions. The writing is clearly on the wall. You can hear Moniz’s presentation at the Center’s webpage.