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Department of Energy Finalizes Process Rule for Appliance Efficiency Standards

There are a number of problematic Department of Energy (DOE) efficiency standards for home appliances. Perhaps worst of all is the one resulting in dishwashers taking hours to do the job. Fortunately, CEI’s petition to modify the regulations to allow dishwashers that can finish a load in an hour or less is making headway at the agency, and it doesn’t hurt that President Trump has expressed strong support for the effort. But even better than fixing bad regulations is preventing them from happening in the first place, and DOE’s recent process rule, applicable to all future appliance rulemakings, contains a number of useful measures.

Most importantly, the agency will henceforth forbid standards that fail to deliver significant energy savings. Efficiency standards typically raise the upfront cost of the appliance, but presumably pay the consumer back in the form of lower energy bills—unless the energy savings are too trivial.

This commonsense requirement is already written into the law, but “significant” has been defined downward by career bureaucrats and the courts so as to be meaningless. This is especially problematic for the many home appliances—including air conditioners, refrigerators, and clothes washers—that have been subjected to three or more successively tighter standards over the years with diminishing marginal returns.

The process rule contains a new bright-line requirement that a new or amended standard must save an estimated 0.3 quadrillion BTUs over 30 years (or improve current efficiency by at least 10 percent). According to the agency, if this threshold had already been in place, 40 percent of the appliance rules would have never been enacted. These 40 percent are so useless that, in aggregate, they account for a mere 4 percent of the program’s estimated energy savings. Thus, this provision would eliminate those standards most likely to impose more pain than gain for consumers.

Other provisions in the process rule allow for a more open and interactive regulatory process, rather than one that limits the manufacturers’ input while the rule is being fashioned by the agency.

The process rule is also judicially enforceable, so its provisions cannot be easily ignored by future regulation-happy administrations.

The process rule could have gone further. For example, it does not end the misuse of the appliance efficiency program to pursue climate change goals. President Obama did this by using inflated estimates of the “social cost of carbon” to justify new standards, of which a record 44 were finalized during his administration. In other words, fanciful estimates of the monetized benefits of reduced global warming attributed to more efficient appliances became a finger on the scale justifying tougher regulations. President Trump has repudiated most of the Obama administration’s social cost of carbon approach in an Executive Order, and we hope DOE will do so for the appliance standards program in a subsequent process rule.

Truth be told, the appliance efficiency standards program, on the books since 1975, is a solution in search of a problem that has only gotten worse with time, and sunsetting the entire program should be the end goal. But until we have a Congress willing to do so, DOE process reforms holding the line against ill-advised new rules, along with targeted changes to existing rules like those for dishwashers, are the next best thing. The agency’s latest efforts are a good start.