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Testimony of Kateri Callahan, President, Alliance to Save Energy Fiscal Year 2007 Appropriations for EPA’s Energy Star Program Introduction The Alliance to Save Energy, a bipartisan, nonprofit coalition of more than 100 business, government, environmental, and consumer leaders, appreciates this opportunity to submit written testimony in support of a $10 million increase for the Environmental Protection Agency’s (EPA) Energy Star Program in fiscal year 2007 compared to the FY 2006 appropriated level. The Alliance’s mission is to promote energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security. The Alliance, founded in 1977 by Senators Charles Percy and Hubert Humphrey, currently enjoys the leadership of Senator Mark Pryor as Chairman; Washington Gas Chairman and CEO James DeGraffenreidt, Jr. as Co-Chairman; and Representatives Ralph Hall, Zach Wamp and Ed Markey and Senators Bingaman, Collins and Jeffords as its Vice-Chairs. The American Council for an Energy-Efficient Economy (ACEEE) also supports the recommendations in this testimony. The Energy Star program is one of the most successful efforts to promote marketplace solutions for greater energy efficiency. The program works with thousands of business partners to make it easy for consumers to find and buy many energy-efficient products, buildings, and services by awarding the well-known Energy Star label and by providing other consumer information. The Energy Star program is an entirely voluntary program that reduces energy demand, lowers energy bills, and helps avoid pollution and greenhouse gas emissions. Increased investment by the federal government in the Energy Star program will translate to increased energy savings by consumers and businesses across the country. The EPA estimates that every federal dollar spent on the Energy Star program results in an average savings of $75 or more in consumer energy bills; the reduction of about 3.7 tons of carbon dioxide emissions; an investment of $15 in private sector capital; and the contribution of over $60 to the economy. In 2005 alone, Energy Star helped Americans save 28,000 Megawatts of peak power, enough to avoid the need for more than 50 new power plants. This savings is a significant amount of energy – 150 billion kWh -- representing 4% of total 2005 electricity demand. Working together with Energy Star, Americans prevented the emission of 35 million metric tons of greenhouse gas emissions, which is equivalent to removing 23 million cars from the road. And Americans, with the help of Energy Star, saved $12 billion on their energy bills. As these statistics exemplify, the Energy Star program is helping millions of Americans get the energy they need, while saving money and avoiding pollution. Energy Efficiency is America’s Greatest Energy Resource Energy efficiency is the nation’s greatest energy resource—we now save more energy each year from energy efficiency than we get from any single energy source, including oil, natural gas, coal, or nuclear power. The Alliance to Save Energy estimates that if we tried to run today’s economy without the energy-efficiency improvements that have taken place since 1973, we would need 43 percent more energy supplies than we use now (43 quadrillion Btu). What’s more, increasing America’s energy efficiency is the quickest, cleanest, and cheapest way of meeting our energy needs. Without these enormous savings, our difficulties in meeting energy demand would be far, far worse than they are today. How Energy Star Capitalizes on this Resource EPA’s Energy Star program has proven to be an extremely effective way for this nation to capitalize on the potential of energy efficiency as a resource. Energy Star’s voluntary partnership program – which includes Energy Star Buildings, Energy Star Homes, Energy Star Small Businesses, and Energy Star Labeled Products – works by removing marketplace barriers to existing and emerging technologies, providing information on technology opportunities, generating awareness of energy-efficient products and services, and educating consumers about life-cycle energy savings. Energy efficiency is an investment. There is often a modest additional cost for purchasing more efficient, smarter technologies, but that additional cost and more is paid back to the consumer through lower energy bills. Energy Star helps consumers understand and realize these benefits. The label represents the “good housekeeping seal of approval.” The program sets rigorous guidelines representing high energy-efficiency and product quality goals that products, buildings, or services must meet in order to qualify for the Energy Star label. In 2003 the Alliance to Save Energy undertook an extensive public opinion survey and found that the name recognition of the Energy Star program is very high – 86 percent among U.S. homeowners. Approximately one-third of U.S. consumers report using the Energy Star label as an information tool for making purchase decisions; and an even higher number report using Energy Star as an information tool to help them save energy. Most consumers who are aware of the Energy Star label correctly understand that products bearing the Energy Star label use less energy and can save them money on energy bills. About the Energy Star Partnerships Energy Star works through voluntary partnerships, and these have grown since the early 1990s to include thousands of businesses. These partnerships demonstrate that energy efficiency delivers “pollution prevention at a profit.” And the Energy Star program testifies to the important environmental achievements that can be made through cooperative partnerships between government and businesses. Energy Star serves broad constituencies in every state in the country. Energy Star currently has more than 8,000 partners who are committed to improving the energy efficiency of our homes, businesses and products. Among those partners are over 1,500 manufacturing partners who make and market over 35,000 different models of Energy Star qualifying products, and 800 retail partners representing over 21,000 storefronts, as well as building owners and operators, utilities, state and local governments, and nonprofit organizations. Energy Star counts more than 2,500 builder partners and partners who supply products and services for energy-efficient home construction. More than 500,000 families now live in Energy Star Homes (40% more than last year) – locking in financial savings for homeowners of more than $110 million annually. In fact, nearly 10 percent of all homes built in 2005 earned the Energy Star label. As you may know, 2006 marks the sixth year that the Alliance has asked Energy Star company partners to join us in our request for a significant increase in funding for the program. The response in the past has been remarkable. Joining us in our request this year are 391 companies and Energy Star partners and another 75 individuals. Much Has Been Accomplished, but Huge Potential Remains Untapped Although the Energy Star program has made a significant contribution to reducing consumer energy use, a wide array of important, additional opportunities to use the program to promote energy efficiency remain untapped. Energy Star is a success, poised to provide more savings and enhanced environmental protection as soon as the government is ready and able to invest more. In 2001, the President’s National Energy Plan recommended that the Energy Star program be expanded to label more products, appliances, buildings, and services. Time and again, the President and the EPA Administrator have noted that voluntary measures are vital to addressing climate change and have held up Energy Star as an exemplary program. Yet funding for the program has declined. The FY 2007 proposed budget for Energy Star, $45.7 million, is down 9% from this year and, after inflation, is down one-fifth from FY 2002. In addition, internal funding cuts at EPA have plagued the program over the past several years. Even with tight budgets, the number of products and manufacturers in the labeling program has greatly expanded, and the number of partners in the Buildings, Homes, and Small Business programs has soared. But more funds are needed. Considering the sky-high energy prices around the country and the concerns about electricity reliability and pollution abatement, the Alliance believes that funding for the Energy Star program should be increased by at least $10 million over last year’s appropriated level for FY 2007, and should be doubled over the next five years. This would enable the Energy Star program to label additional products, update its criteria, increase consumer education campaigns, and—especially important—address energy-efficient home improvements nationwide. By building on the Energy Star name, we can save much more energy and break through additional market barriers, building homeowner trust in energy audit programs and whole-home retrofits, including insulation, duct sealing, and home envelope sealing. In addition to labeling products and buildings, Energy Star has begun a successful effort working with state and local organizations to help homeowners audit and upgrade the efficiency of their homes. Home Performance with Energy Star is growing as state and utilities look for opportunities to save energy and reduce peak load. More than 17,000 homes in California, Colorado, Georgia, Idaho, Kansas, Massachusetts, Minnesota, New York, Texas, and Wisconsin have been improved through this program. But much more needs to be done to implement similar programs across the country. With additional funding, the Energy Star program could develop a supportive infrastructure for contractors around the country, share information with interested state organizations, and develop marketing efforts in up to 10 metropolitan areas per year. Recommendations EPA’s Energy Star program has clearly demonstrated its importance in helping the U.S. to capitalize on its greatest energy “resource” – energy efficiency. The program is delivering real progress toward meeting our country’s environmental and energy security goals, while at the same time putting more money in consumers’ pockets through reduced energy bills. More investment by the federal government is needed to expand the impact of this voluntary partnership between the government and industry. The Alliance to Save Energy recommends the subcommittee take the following actions to best leverage the proven results that stem from EPA’s Energy Star program:
Conclusion The Energy Star program proves that we can protect the environment while simultaneously saving consumers money on their energy bills and enhancing the economy. Energy Star provides the catalyst for many businesses, state and local governments, and consumers to invest in energy efficiency, which in turn yields multiple private and public benefits. It does this by providing access to information, improving brand recognition, and providing positive publicity. While there are many demands on the country’s financial resources, Energy Star has proven tremendously cost-effective, and it returns important benefits to the nation. Every added federal dollar invested in Energy Star in fiscal year 2007 will return a significant and cost-effective yield in pollution reduction, economic stimulation, energy security, and consumer savings. |
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