Hearings and Business Meetings

SD-366 Energy Committee Hearing Room 10:00 AM

The Honorable Alexander Karsner

Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy


Statement of the Honorable Alexander Karsner
Assistant Secretary
Office of Energy Efficiency and Renewable Energy
Before the
Committee on Energy and Natural Resources
United States Senate
June 22, 2006

Chairman Domenici, Ranking Member Bingaman, and Members of the Committee, I am
pleased today to offer preliminary comments on some of the provisions in S. 2747, the
“Enhanced Energy Security Act of 2006”. I will also report on the status of the Office of
Energy Efficiency and Renewable Energy’s (EERE) work to implement the energy
efficiency provisions of the Energy Policy Act (EPACT) of 2005.
Comments on S. 2747
When EPACT 2005 was signed last August, it addressed many energy issues that had
sought attention for years. However, only a month later, Hurricane Katrina hit, slamming
home new energy realities and forcing our country to take an even closer look at our
energy vulnerabilities. We, as a Nation, needed to take more comprehensive action, and I
would like to thank this Committee for your diligence in pursuing new legislative paths
and initiatives to advance our national energy efficiency goals at this critical time.
The Administration has not had sufficient time to review or coordinate its interagency
review of S. 2747 and therefore does not have a formal position on this legislation. I
would note, however, that some portions of S. 2747 overlap with current EPACT
provisions and that it would be productive to resolve any issues of duplication that are
inherent in the legislation.
Looking at the Title I national oil savings plan to reduce oil use on a fixed schedule, we
believe that the targets might not be able to be met, even with aggressive, technologyforcing
increases in CAFE standards that may not fully account for highway safety.
While the Advanced Energy Initiative is expected to help achieve these long-term goals,
there remain natural uncertainties in technology development and commercial uptake that
make it imprudent to legislate an arbitrary end-result. In addition, the President has asked
Congress for authority to reform and increase passenger car CAFE standards but has
indicated that highway safety, technology, and economics need to be considered when
determining the maximum feasible fuel economy standard.
In Title II, we have additional concerns. For example, while the President and Secretary
Bodman are both committed to Federal leadership in using the Federal fleet of vehicles to
advance fuel efficiency and flexible fuels, we believe there are aspects of the technical
language in S. 2747 regarding Federal fleet requirements that need further review and
discussion. We look forward to working with the committee to resolve these issues.
Similarly, we are not convinced of the effectiveness of vehicle retirement programs with
respect to cost and life-cycle energy savings under economic analysis. With regard to
Section 206, EPACT already authorizes grants to support activities for auto companies
producing fuel efficient vehicles, and we believe new loan guarantees would be largely
unnecessary. EPACT also provides tax credits to reduce the cost of alternative fuel
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distribution addressed in Section 207 of S. 2747. In Title IV, the “National Media
Campaign” is virtually identical to that enacted in EPACT.
I would also like to comment on the proposed Renewable Portfolio Standard (RPS). The
Administration continues to believe that RPS standards are best left to the States. Under
Secretary Garman provided Congressional testimony before this Committee on March 8,
2005, explaining this position.
EPACT 2005 Implementation
I would now like to address EERE’s implementation of EPACT 2005. Targeting our
national imperative to reduce energy consumption, EPACT introduced a broad range of
energy efficiency initiatives, programs, standards, and studies, many of which built upon
work that was already in progress at the Department of Energy (DOE).
EERE’s Federal Energy Management Program Provisions
While EPACT’s first section in Title I appropriately addresses energy savings in facilities
administered by Congress, the next set of sections broadens Federal programs for energy
efficiency that are conducted by EERE’s Federal Energy Management Program, or
FEMP.
Section 102, Energy Management Goals, re-establishes the statutory energy reduction
goals for Federal buildings. Updating the 1985 energy consumption figures, the new goal
uses a base year of Fiscal Year (FY) 2003 and requires reductions of two percent per year
in energy use per square foot, leading to a 20 percent reduction by FY 2015.
The law allows agencies to exclude certain buildings from this goal under stringent
criteria and gave the Department of Energy 180 days to provide guidelines for these
exclusions. The guidelines have been finalized and issued to the Federal agencies.
Formally titled the Guidelines Establishing Criteria for Excluding Buildings from the
Energy Performance Requirements of Section 543 of the National Energy Conservation
Policy Act as Amended by the Energy Policy Act of 2005, they are available on FEMP’s
web site at:
http://www1.eere.energy.gov/femp/pdfs/exclusion_criteria.pdf.
To further assist agencies in adjusting to the new goals, EERE is drafting a memorandum
to Federal agencies to clarify how the differing reporting requirements of EPACT and
Executive Order 13123 (still in effect) will be addressed and to provide guidance to
agencies in establishing their 2003 baseline. EERE plans to provide each agency with its
FY 2003 energy consumption, costs, and square footage data formatted in ways that
allow agencies to easily assess their baseline data according to default and new building
inventory categories. We are also convening working group meetings with agencies to
revise the Annual Reporting Guidance to reflect the EPACT 2005 requirements.
To promote operations and maintenance (O&M) best practices in the Federal sector,
EERE is developing an O&M Best Practices Guide and training materials including a
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comprehensive on-line training program for Federal energy managers and building
operators. EERE will continue conducting its Energy Savings Expert Team (ESET)
facility assessments, launched last fall in response to the President’s call for agency
action to conserve energy. The teams initially conducted site assessments at 28 large
Federal installations and identified potential natural gas savings of 970 billion Btu. DOE
is following up with all sites to assess whether the ESET recommendations are
implemented, to provide technical assistance to agencies should they choose to use
energy savings performance contracts instead of direct appropriations to implement
projects, and to help with project planning for more capital-intensive projects.
Additional efforts include promoting the Resource Efficiency Manager (REM) concept in
the Federal sector. REM salaries are paid for by the savings they help generate. EERE
will also demonstrate advanced energy efficient technologies in Federal buildings, with a
goal to test or demonstrate one new advanced energy efficient technology each year. One
of the steps toward this goal is working with industry to develop deployment
opportunities for advanced energy efficient technologies.
Section 103, Energy Use Measurement and Accounting, requires all Federal agencies to
install metering and advanced metering where cost-effective, according to guidelines
developed by the Department of Energy in consultation with a number of interest groups.
After meeting with representatives from industry, energy efficiency advocacy
organizations, national laboratories, universities, and Federal facility managers, EERE
has issued the Guidance for Electric Metering in Federal Buildings, located on the web
at:
http://www1.eere.energy.gov/femp/pdfs/adv_metering.pdf. Agencies must submit
their implementation plans by August 3, 2006, and progress reporting under the advanced
metering requirement will begin in FY 2007.
Section 104, Procurement of Energy Efficient Products, seeks to harness the energy
savings that can be achieved economically through the purchase of energy-efficient
products and equipment. DOE has drafted the regulations necessary to carry out Section
104; the regulations are being reviewed internally. We have also drafted the premium
efficiency standard for electric motors of 1 to 500 horsepower as required under Section
104(d).
The Department will continue to develop and revise its widely-used energy efficient
product procurement recommendations and will seek to expand its bulk purchasing
program to encompass additional technologies, agencies, and building types each year.
Over the longer term, we will work with EPA, State, and local government organizations
and non-government organizations (NGOs) to establish and participate in a broad-based
network of public agencies, institutions, and leading corporations committed to using
ENERGY STAR and FEMP criteria in their purchasing, with affiliated suppliers who
agree to provide compliant energy-efficient products.
Section 105 provides long-term authority to extend Federal Energy Savings Performance
Contracting (ESPC) until September 30, 2016. This extension has renewed interest in
Federal energy savings projects, after the 13-month hiatus in Federal ESPC authority.
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EERE has reinvigorated its Super ESPC program to increase the potential for cost
effective energy savings though private investment in Federal energy efficiency projects.
EERE continues to increase outreach and education of ESPC to the Federal agencies that
actually implement the energy efficiency projects. Our ESPC education campaign
includes new informational and promotional materials in the most current media formats
and direct communications with Senior Energy Officials of every major Federal agency.
We plan to increase by 50 percent the number of ESPC training workshops conducted
during the next two fiscal years.
EERE will continue to conduct detailed data analysis of ESPC metrics including cost
effectiveness, financing costs, and project cycle times to help improve ESPC results.
Specific improvements include reducing project cycle time from the current 12 to 18
months to 9 to 12 months and modifying contracts to obtain the best possible financing
rates.
Under Section 109, DOE is required to issue a new Federal building energy efficiency
standard, through the rulemaking process, within one year of the passage of EPACT
2005. The provisions of this section require that buildings be designed to 30 percent
below the American Society of Heating, Refrigerating, and Air-Conditioning Engineers
(ASHRAE) standard or the International Energy Conservation Code (depending on
building type) if life-cycle cost effective. We are working on a rulemaking to implement
Section 109.
EERE’s Building Technologies Program Provisions
Turning now to the building sector, EPACT 2005 could not have arrived at a more
propitious time. Drivers in the marketplace, such as high electricity and natural gas
prices, along with excellent progress in R&D on building technologies are bringing
energy efficiency and renewable energy into mainstream markets, and significantly
improving the business case for energy efficiency and renewable energy.
But when it comes to energy efficiency, the case for the Nation is even more compelling
than the business case. That is something that President Bush recognized when he
outlined the Advanced Energy Initiative during his State of the Union address, with a
proposal to increase clean-energy research and break America's dependence on foreign
sources of energy and to promote clean energy by changing the way we power our
homes, businesses, and automobiles.
DOE has an aggressive goal for the future of buildings. By 2020, DOE aims to have
cost-competitive net-zero-energy homes in this country. Such buildings would be 60 to
70 percent more efficient than conventional practice in their energy use, and would use
renewable energy such as solar photovoltaics to meet their remaining energy
requirements. A related goal is to have zero-energy commercial buildings as well by
2025. We have set interim targets to develop residential and commercial building design
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packages that incrementally improve energy efficiency and incorporate renewables in a
cost effective manner.
I'd like to review our progress across the 12 EPACT sections for which the Building
Technologies Program is responsible, ranging from expanded authorizations for
appliance standards to assisting the Department of Treasury develop the technical
requirements for tax incentives. This extensive focus on energy efficiency in the building
sector reflects the significant opportunities for energy efficiency improvements in
residential and commercial buildings, appliances and equipment. In particular, I'd like to
highlight our appliance standards work, progress on solid state lighting R&D, and our
Energy Star activities.
Appliance and equipment standards are cost effective energy-saving tools, based on
published benefit-cost analyses of past rules. The Department is committed to addressing
the backlog of mandated rulemakings and meeting all of its statutory requirements. In
our report to Congress, submitted on January 31, 2006, pursuant to Section 141, we
presented a multi-year schedule that is ambitious and achievable and will enable the
Department to produce at least one new or amended standard for all products in the
backlog no later than June 2011, five years from the issuance of this plan. By June 2011,
the Department will issue standards for the following 18 products in the backlog:
- Residential furnaces and boilers
- Mobile home furnaces
- Small furnaces
- Residential water heaters
- Direct heating equipment
- Pool heaters
- Distribution transformers, MV dry-type and liquid-immersed
- Electric motors (1-200 hp)
- Incandescent reflector lamps
- Fluorescent lamps
- Incandescent general service lamps
- Fluorescent lamp ballasts
- Residential dishwashers
- Ranges and ovens (gas and electric) and microwave ovens
- Residential clothes dryers
- Room air conditioners
- Packaged terminal air conditioners and heat pumps
- Residential central air conditioners and heat pumps
Since the passage of EPACT, and consistent with the schedule delivered to Congress, we
are making great progress. I would like to summarize what we have done in the past
year.
By this August, we will be sending you another status report on our progress on appliance
standards. We expect to report that we will be on schedule for all items, and perhaps
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slightly ahead of schedule on selected items. For example, EPACT 2005 included 15
prescribed standards, which DOE promptly codified en masse in its October 18, 2005
technical amendment.
In regard to test procedures, EPACT 2005 prescribed 11 test procedures. Adopting these
is a more technical exercise, so it takes a little longer. The proposed rule to codify the
prescribed test procedures will be issued this June, with a final rule expected by
November 2006.
On the standards side, I am happy to report that DOE is on schedule in getting the
EPACT 2005-required rulemakings up and running. For residential dehumidifiers and
commercial clothes washers, DOE held a “framework workshop” in April 2006 to kick
off the rulemaking. Comments have been received and the analysis is underway. I note
that Congress has required a second rulemaking for commercial clothes washers – this
will begin after the first rule is issued.
The commercial refrigeration standards rulemaking is in a similar state – the “framework
workshop” was held in May 2006. In July, we’ll be having a “framework workshop” to
kick off the standards rulemaking for beverage vending machines.
There are three other activities related to EPACT 2005 and Appliance Standards that I’d
like to close with:
First, there are two future revisions for the commercial refrigeration products’ standards
and two revisions to the statutorily prescribed standard for automatic commercial ice
makers – we have planned for these future activities required by EPACT 2005.
Second, EPACT 2005 requires a rulemaking for a niche part of the ceiling fan light kit
market. This final rule is due January 1, 2007. EPACT 2005 did not allow DOE enough
time to complete a full rulemaking for this niche set of products, but it did offer “default”
standards in case DOE misses its deadline – DOE plans to codify the “default” standards
on January 2, 2007 through a technical amendment in the Federal Register.
Third, we are working on the determination analysis for battery chargers and external
power supplies. DOE plans to make the determination by August 2008. As indicated in
the April 24th Unified Agenda, if this determination is positive, the DOE will issue a final
rule for these products by August 2011.
While the appliance standards authorizations in Title I are the most significant for our
work in the building sector, there are several additional sections that offer new authority
that we are taking advantage of immediately.
Section 131 of EPACT 2005 provided additional authorization for the ENERGY STAR
program. Our analysis suggests that this joint effort between the Department of Energy
and the Environmental Protection Agency has been successful in promoting the adoption
of energy efficient technologies by consumers and businesses. EPACT 2005 recognized
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that success, and provided for acceleration of new ENERGY STAR criteria for clothes
washers and dishwashers.
I'm pleased to report that we published the new specifications for these appliances on
December 20, 2005, and March 8, 2006, respectively. These criteria go into effect on
January 1, 2007. Taken together, we estimate purchase of these ENERGY STAR
appliances will save $89 million in energy bills and 10.4 billion gallons of water per year.
We are also on track to update the specifications again over the next three years, effective
January 1, 2010.
Section 912, the Next Generation Lighting Initiative, directs the Secretary to carry out a
program of research, development, demonstration, and commercial application activities
to advance solid-state lighting (SSL) technologies for application in general illumination.
Relative to today’s options, the SSL technologies will be longer lasting, more energy
efficient, cost competitive, and have less environmental impact.
Prior to the passage of EPACT, the Department’s SSL program had competitively
selected an industry partner, the Next Generation Lighting Industry Alliance
(administered by the National Electrical Manufacturers Association), and signed a
Memorandum of Agreement (MOA) in February 2005. A Determination of Exceptional
Circumstances which provides special guidance on the intellectual property for
inventions developed under the SSL program was signed in June 2005.
EERE’s existing lighting R&D program produced numerous advancements in SSL. For
example, 15 solid-state lighting patents were submitted in FY 2005 as a result of DOEfunded
research projects. These patents demonstrate the value of DOE’s SSL projects to
private companies and notable progress toward commercialization.
One company, Cree Lighting, demonstrated a white light emitting diode (LED) device
with a record-setting efficacy of 65 lumens per watt. The improvement in brightness was
enabled by balancing multiple interrelated design parameters, including novel chip
design. The results are particularly significant because they were achieved in a preproduction
prototype using Cree’s standard XLamp™ package, rather than a laboratory
device.
With the additional impetus provided by the passage of EPACT, the program continues to
produce technical achievements. For example, researchers from the University of
Southern California, University of Michigan, and Universal Display Corporation have
achieved a record efficiency of 24 lumens per watt in a white organic light-emitting diode
(OLED) device. The new OLED device is 50 percent more efficient than a standard
incandescent light bulb and 20 percent more efficient than the team’s previous record
OLED.
Relative to the commercialization of future products, EERE hosted an LED Industry
Standards Workshop in March 2006 to provide a forum for greater cooperation and
coordination among standards organizations. DOE presented details of the proposed
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DOE ENERGY STAR criteria for LED products, which will be made public later this
year. With DOE leadership, the group will continue to coordinate, provide updates, and
accelerate process in solid-state lighting.
I would also like to say a word about the Tax Credit section in Title XIII, Energy Policy
Tax Incentives Subtitle C-Conservation and Energy Efficiency Provisions. The
Department has been working with representatives from State energy offices, industry
and other organizations to develop an understanding of the technical requirements for
implementation of the tax credits. The Department is also working closely with the U.S.
Department of the Treasury to ensure that the regulations address all the technical issues
related to the tax credits. The Department of the Treasury has the primary responsibility
for developing the specific regulations, establishing definitions and procedures, to
implement these measures.
Other Energy Efficiency Provisions
EERE is also responsible for a variety of additional studies, outreach initiatives, and
programs. Many are underway.
For example, Section 110 directed DOE to explore the impact of extending daylight
savings time. That study is underway. Another study on the energy-conservation
implications of the widespread adoption of telecommuting by Federal employees is in the
concurrence process.
Section 134 authorized the “Energy Efficiency Public Information Initiative,” a
comprehensive national plan to inform consumers that builds upon the outreach efforts
ongoing at DOE. Consistent with this authorization, a number of consumer awareness
programs have already begun. For example, last October Secretary Bodman launched the
“Easy Ways to Save Energy Campaign” which includes an education and awareness
effort with the Alliance to Save Energy and private industry to disseminate energy saving
information through radio and television public service announcements, websites,
newspaper advertising, and media campaigns. Other collaborative efforts such as
“Powerful Savings,” “EnergyHog,” and “The Power is in Your Hands” combined the best
skills of government, the private sector, and non-governmental institutions to provide the
public with tools to conserve energy and save money.
Several EPACT sections engage our Weatherization and Intergovernmental Activities
Program (OWIP). EPACT Section 123 provided aggressive new goals and planning
requirements for the State Energy Program (SEP). We have invited States to review, and,
if necessary, revise State Energy Conservation Plans and are encouraging regional
collaboration, where appropriate. EERE notified the States of these requirements in
January through the SEP annual program guidance and will send formal invitation letters
to governors by June 30.
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Conclusion
I hope this gives you some understanding of the Administration’s perspective on S. 2747,
and a fair overview of the energy efficiency responsibilities that our office assumed with
the enactment of EPACT. In many important ways, EPACT has served to buttress our
efforts and help launch the necessity of energy efficiency onto the national stage. We
look forward to working with you as we dedicate our efforts to developing energy
efficient and renewable energy technologies and promoting improvements in the energy
efficiency of our country.