I. Summary

• The Department of Energy’s appliance efficiency standards program is decades old, and most major home appliances have been subjected to multiple rounds of successively tighter standards.

• Although ostensibly for the benefit of consumers, many standards significantly increase the price of appliances and/or compromise product choice, features, performance, reliability and longevity.

• Many standards have proved more troublesome than anticipated by the agency. Dishwashers, washing machines, and light bulbs are among the most overregulated appliances.

• The appliance standards program is being impermissibly used as a climate policy tool, to the further detriment of consumers.

• Reform legislation should place concrete limits on additional regulation while repealing current regulations not in the best interests of consumers.

Thank you for the opportunity to testify today. My name is Ben Lieberman and I am a Senior Fellow at the Competitive Enterprise Institute (CEI) a non-partisan public policy organization that concentrates on regulatory issues from a free-market perspective. I work in CEI’s Energy and Environment Department where I cover a number of regulatory programs, including Department of Energy (DOE) appliance efficiency standards, and have filed comments with the agency regarding regulations for furnaces, stoves, dishwashers, air conditioners,

washing machines, light bulbs, water heaters, and refrigerators. Prior to joining CEI in 2018, I was a staff member on this Committee where I also worked on DOE appliance regulations as well as related issues.

II. A Brief History of Federal Appliance Regulations

Federal regulation of home appliances dates back to the Energy Policy and Conservation Act of 1975 (EPCA). Among other things, this statute and subsequent amendments created a program enabling the Department of Energy (DOE) to set energy efficiency requirements for most home appliances. The original statute did not mandate such standards but required the agency to set them upon determining that they were “technologically feasible and economically justified,” and would result in “significant conservation of energy.”³

For the first several years of the program, no standards were finalized. In the early 1980s, the Reagan administration DOE considered but declined to regulate eight major home appliances (central air conditioners, room air conditioners, refrigerators, freezers, furnaces, water heaters, washing machines and dryers) on the grounds that the statutory requirements were not met. In effect, the Reagan DOE concluded that there was no market failure justifying federal intervention.

In 1985, these so-called “no standards standards” were successfully challenged in federal court, which remanded the issue back to the agency to either promulgate standards or provide a legally stronger explanation for not doing so. In response, President Reagan encouraged Congress to legislate an acceptable solution, leading to the National Appliance Energy Conservation Act of 1987 (NAECA). NAECA statutorily set out initial energy efficiency standards for these appliances, and also required periodic reviews of them every six years. When reviewing existing standards, the statute gives the agency the option of either retaining the standard or tightening it, but does not allow an existing standard to be made less stringent – the so-called anti-backsliding provision.

By the 1990s, it was already evident that appliance overregulation was becoming a problem, and the Clinton administration DOE finalized a series of process reforms in 1996. These included a more thorough analysis of the costs and benefits of each proposed rule, including potentially disproportionate adverse impacts on consumer subgroups such as low- income and senior households. It also encouraged the consideration of non-regulatory approaches in lieu of regulations. However, these measures were not judicially reviewable and have made little difference.

In the decades since, a pattern has emerged where a Republican administration would take a much more methodical approach to appliance regulations (and often face litigation for doing so), followed by a Democratic administration that tried to make up for lost time with a very aggressive regulatory agenda.

This back and forth also included an effort during the first Trump administration to expand upon the Clinton-era DOE process reforms and make them judicially reviewable, as well as measures providing more regulatory flexibility for dishwashers, washing machines light bulbs, and furnaces. However, these provisions were later reversed by the Biden administration.

By now, most home appliances have been subjected to three, four, five, or even six rounds of successively tighter standards. In addition to the sizable bureaucracy at DOE that works on appliance regulations, there are quite a few activists, consultants, lobbyists, and lawyers who also owe their livelihoods to the program and are pre-disposed to see it continue.

actively lobbied for standards that give them a captive market for costlier models. Amid the many pro-standards advocates, the interests of consumers have played a relatively minor role in the standards-setting process.

III.  The Anti-Consumer Impacts of Appliance Regulations

EPCA contains numerous provisions protecting consumers against overregulation. For example, DOE is required to consider the costs as well as the benefits of proposed rules and is expressly forbidden from setting a standard that compromises any product characteristics valued by consumers.

Despite the pro-consumer thrust of EPCA’s appliance provisions, many standards harm consumers by adding to net costs and/or impacting appliance choice, features, performance, reliability, and longevity. The consumer protections in the law have been routinely sidestepped, and sensible regulatory stopping points ignored. Some of the worst rules are the recent ones for appliances that had already been regulated multiples times, and several more such rules are scheduled to take effect in the years ahead.

The impact of five rounds of successively tighter standards for dishwashers has been especially annoying. Models today take two or more hours to complete a normal cycle, double the time it took before regulations. The agency has admitted that its rules are the cause, stating that “[t]o help compensate for the negative impact on cleaning performance associated with decreasing water use and water temperature, manufacturers will typically increase the cycle time.” It should be noted that the dishwasher standards are not just bad policy, they likely violate the law as well. The standards target both energy and water use, though EPCA only allows the former. Fortunately, the Trump DOE has proposed rules that would help address this overreach.

Washing machine standards (the subject of successively tighter regulations in 1994, 2004, 2007, 2015, 2018, and 2024) have led to cleaning performance and reliability problems that were never anticipated by the agency and have not been acknowledged since. They have also led to accumulation of foul smelling mold in many machines, necessitating a new market in products designed to eliminate the smell. The need to occasionally wash the washing machine by running it empty with these special cleaners is not only an inconvenience but also undercuts the agency’s claimed energy and water savings. The same is true of the increased need to run loads more than once due to diminished cleaning performance. Fortunately, the Trump administration is also revisiting these standards.

Other appliance regulations are likely to raise the up-front cost more than can be justified by the energy savings. This includes upcoming furnace and water heater regulations promulgated during the Biden administration and scheduled to take effect in 2028 and 2029, respectively. DOE predicts a cost boost for a gas furnace of up to $867 and an electric water heater increase of $953, and some in industry believe these may be significant underestimates. EPCA contains the very sensible yardstick that standards should not raise the up-front cost any more than is likely to be earned back in energy savings within three years, but this provision is not mandatory and is frequently exceeded by the agency.

New appliance rules are promulgated with little regard for the problems caused by previous ones. Indeed, DOE insists that it has no obligation to do any retrospective reviews, so long as each rule is based on what it considers to be “the best available data at the time.”

The costs keep rising with each successive round of regulations. For example, the past regulations that knocked incandescent light bulbs off the market have paved the way for more expensive light-emitting diode (LED) bulbs. And now, the latest Biden DOE rule cracks down hard on LEDs and will further raise their price by an agency-estimated $2.70, from $2.98 to $5.68 per bulb.

It all starts to add up to a significant price boost, not just for existing homeowners, but for new homebuyers as well. Indeed, the National Association of Home Builders estimates that regulatory costs at all levels of government contribute 25 percent to the costs of housing. Appliance regulations are a significant contributor, especially for first-time home buyers. And it will only get worse with the wave of costly Biden DOE regulations that will come into force in the years ahead, several of which cannot be easily reversed by the Trump administration due to the anti-backsliding provision.

Other appliance regulations completely eliminate choices and features valued by some consumers, such as incandescent light bulbs that are no longer available or non-condensing gas furnaces that will disappear in 2028 as a result of the above-mentioned furnace rule. Such provisions quite arguably violate the provisions in EPCA forbidding standards that compromise any appliance characteristics. Fortunately, a rule that would have done the same for non- condensing tankless water heaters was recently repealed under the Congressional Review Act (CRA), but many other rules were finalized too early to fall within the CRA window.

There is also evidence of reduced product lifetimes as a result of stringent appliance regulations. This is not surprising given that these rules often necessitate considerably more complicated and less reliable mechanical systems to comply. And when repair costs go up, a point is reached where replacement is the more sensible option. In the case of refrigerators, DOE has reduced its assumption of the average useful life from 19 years to 12 years over the span that it repeatedly regulated them. The actual lifetimes may be shorter still. Note that overstated product lifetimes greatly increase the costs to consumers and undercut the claimed energy savings.

IV. The Gas Stove Controversy of 2023

In one case, consumer opposition did prevent an onerous appliance regulation. This occurred in 2023 with the regulatory targeting of gas stoves. Although it began with a commissioner on the Consumer Product Safety Commission stating that gas stoves may need to be banned, it expanded to a proposed DOE efficiency standard that was tailor-made to discourage gas stoves in favor of electric versions. Only after a surprisingly powerful grassroots backlash against such government meddling did both agencies back off. DOE did finalize a rule impacting gas stoves, but it was much less stringent than the one originally proposed. The episode did serve as a useful reminder for the federal government that the American people dislike the idea of being told what they can and cannot have in their homes.

V. Mission Creep and Climate Change

The 2023 controversy over gas stove regulations was also part of an alarming evolution of the appliance standards program into a climate policy tool. This trend began with the Obama administration but accelerated greatly under President Biden. Indeed, the Biden DOE fully embraced the “whole of government” prioritization of climate change concerns.

Climate change. Regardless, the Biden DOE proclaimed that “[a]ddressing the effects of climate change is a top priority of the Energy Department,” and that this new agency-wide agenda includes “working to dramatically increase the efficiency of appliances….”

All of the Biden administration appliance regulations – light bulbs, furnaces, water heaters, air conditioners, stoves, dishwashers, refrigerators, others – included calculations of the claimed climate benefits. These benefits are based on the highly flawed estimates of the social cost of carbon, which the Trump administration has sensibly ordered all regulatory agencies to stop relying upon. Nonetheless, it was used by the Biden DOE as a finger on the scale justifying many appliance rules that are still on the books.

In addition to using climate change as a rationale for new standards, the agency has also used the program to discourage the residential use of natural gas, a fossil fuel. This is done via standards that disproportionately burden the gas versions of appliances in favor of electric versions. While public opposition prevented a DOE appliance standard that disproportionately targeted natural gas stoves, it did not stop a furnace standard which tilts the balance away from gas in favor of electric heat.

Anti-natural gas appliance regulations were part of the Biden administration’s broad- based electrification agenda, which coordinated with many well-funded environmental groups aggressively pursuing the goal of making electricity the only energy option for homeowners. These efforts received a massive funding boost from the Inflation Reduction Act, which included generous federal rebates for electric appliances but not gas versions, as well as funding for advocacy efforts to change state and local building codes to restrict natural gas.

The use of appliance regulations to discourage gas versions of appliances constrains choices that should be made by the consumer, and it does so even though EPCA contains clear provisions against fuel switching. It also undercuts EPCA’s primary purpose of saving people money, as natural gas is three and a half times cheaper than electricity on a per unit energy basis.

VI.  Ideas for Reform

H.R. 4626, the “Don’t Mess With My Home Appliances Act,” contains a number of very good ideas and deserves serious consideration. Best of all is its lookback provision, which would allow the agency to fix problems with existing regulations. As it is now, the anti- backsliding provision in EPCA prevents the agency from revisiting regulations already on the books, no matter how badly they may have turned out. This commonsense reform was recommended in a National Academies of Sciences study and is long overdue.

The National Academies also recommended that the agency closely scrutinize each proposed new rule to determine whether it really is justified and would benefit consumers, and the bill contains several measures furthering this goal. This includes a more comprehensive analysis of costs – not just higher equipment costs but also higher installation costs, maintenance costs, reduced products lifetimes as well as other factors often downplayed or ignored by the agency. It also requires more analysis of any disproportionate impacts on low-income households who are hardest hit by these regulations.

In addition, the bill contains provisions explicitly forbidding climate considerations as well as fuel switching away from natural gas. These provisions are essential to preventing mission creep towards an environmental agenda that is at odds with the best interests of consumers. It also quantifies what is considered significant conservation of energy so this requirement cannot be so easily sidestepped, and it makes the 3-year payback period a requirement rather than a suggestion.

However, the bill still leaves a lot to the discretion of the agency, and we have increasingly seen DOE willing to say just about anything in its analysis to get these regulations across the finish line, especially during the last administration. That is why we should take at least some regulatory authority off the table. For example, the appliances that have already been badly overregulated – dishwashers, washing machines, and light bulbs are prime examples – could be exempted from any further rules. And stoves is a category that should have never been regulated in the first place and ought to be excluded from this program. In addition, some of the problematic recent rules that missed the Congressional Review Act window and are still scheduled to take effect in the coming years also should be rescinded. If we can’t sunset the program entirely, we can at least limit the future damage to homeowners by some judicious pruning.

It is important to note that there is no downside to not regulating. Homeowners who want ultra-efficient appliances will still be free to choose them, and manufacturers have demonstrated that they will offer such models for that segment of the market that prefers them. But they will no longer be subject to federal mandates that force particular choices on everyone.

Further, any and all efforts to deprive homeowners the option of natural gas appliances should be blocked. The choice of using natural gas or electricity ought to rest with the homeowner, not the government. The “Don’t Mess With My Home Appliances Act” has provisions designed to preserve fuel choice, as does H.R. 3699, the “Energy Choice Act,” which restricts state and local gas bans. In addition, H.R.4758, the “Homeowner Energy Freedom Act” takes the critical step of ending several Inflation Reduction Act programs providing federal funding to pursue this unwanted agenda – needless to say, the American people don’t want to see our tax dollars spent to take away our energy choices. Note that this bill goes beyond the spending cuts in the One Big Beautiful Bill Act and completely revokes these programs.

In my view, the more we place limits on statutes like EPCA and the Inflation Reduction Act, the better for the American people. A good rule of thumb for appliance regulatory reform is that if you are expanding consumer choice you are doing the right thing, but if you are limiting consumer choice in favor of government restrictions, you are doing the wrong thing. Thank you.

Ben Lieberman Senior Fellow

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