Fiscal Year 2010 Appropriations for the United States Environmental Protection Agency Energy Star Program

Testimony of Kateri Callahan, President
Alliance to Save Energy

House Appropriations Subcommittee on Interior, Environment & Related Agencies

April 23, 2009

Fiscal Year 2010 Appropriations for the United States Environmental Protection Agency Energy Star Program

Introduction

The Alliance to Save Energy (“the Alliance”) is a bipartisan, nonprofit coalition of business, government, environmental, and consumer leaders committed to promoting 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 Honorary Chairman. Duke Energy President and CEO James E. Rogers is our Co-Chairman, and Representatives Ralph Hall, Steve Israel, Ed Markey, Paul Tonko, and Zach Wamp, and Senators Jeff Bingaman, Susan Collins, Byron Dorgan and Lisa Murkowski serve as Honorary Vice-Chairs.  More than 150 companies and organizations support the Alliance as Associates. 

I am pleased to testify in support of this outstanding program. The Energy Star Program within the Climate Protection Division of the Office of Air and Radiation at the United States Environmental Protection Agency is perhaps the brightest light in the galaxy of voluntary climate change programs.  I am here today to request that the Subcommittee approve funding in the amount of $100 million for the EPA Energy Star Program in FY 2010, an increase of $50 million over the budget levels in the FY 2009 Omnibus Appropriations Bill.

The EPA Energy Star Program is the single most effective federal consumer information program on energy efficiency. Indeed it is one of the most successful efforts anywhere 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 energy-efficient products, buildings, and services by awarding the well-known Energy Star label and by providing other consumer information. The Energy Star program reduces energy demand, lowers energy bills, and helps avoid pollution and greenhouse gas emissions.

About the Energy Star Partnerships

Let me say a few words about EPA’s Energy Star partnership programs. These initiatives have proven to be an extremely effective way for us 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 and cost savings.

Energy Star serves broad constituencies in every state in the country. The program currently has more than 9,000 partners who are committed to improving the energy efficiency of our homes, businesses and products. Among those partners are over 1,700 manufacturing partners who make and market over 44,000 different models of Energy Star qualifying products, and more than 900 retail partners representing thousands of storefronts, as well as building owners and operators, utilities, state and local governments, and nonprofit organizations. Energy Star counts more than 3,500 builder partners and partners who supply products and services for energy-efficient home construction. More than 725,000 families now live in Energy Star Homes – locking in financial savings for homeowners of more than $170 million annually.

Much Has Been Accomplished…

The program helps consumers to visualize the long-term benefits, through lower energy bills, that can be realized through investment in energy efficient appliances. 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. With this high level of consumer awareness, the potential for Energy Star to tap into even greater energy efficiency is limited only by the availability of resources to fund its programs. The return on investment in EPA Energy Star is unparalleled: The EPA estimates that for every federal dollar spent on the Energy Star program, $75 or more in consumer energy bills is saved, and about 3.7 tons of carbon dioxide emissions is avoided.

In 2006 alone, Energy Star helped Americans save 35,000 megawatts of peak power, avoiding the need for about 70 new power plants. The electricity savings – 170 billion kilowatt-hours – represent 5 percent of total 2006 electricity use. Working together with Energy Star, Americans prevented the emission of 37 million metric tons of greenhouse gas emissions, which is equivalent to removing 25 million cars from the road. And Americans, with the help of Energy Star, saved $16 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.

But Huge Potential Remains Untapped

Although EPA Energy Star is already making a tremendous impact on U.S. energy consumption, many opportunities exist to expand existing programs and initiate new efforts, greatly increasing the energy savings potential. Funding for the Energy Star Program declined precipitously in the last several years.

The FY 2008 funding level of $43.9 million was a reduction of more than 25 percent from FY 2002 levels, after accounting for inflation. We were pleased to see an increase in funding to $50 million in FY 2009, but this level still represents a decrease from FY 2002 levels in real dollars.  Dramatic increases in the program are necessary for the program to fully utilize the opportunities to reduce energy consumption that still remain untapped.  A $100 million budget, a $50 million increase over FY09 funding, will enable the program to label additional products, update its criteria, increase its consumer outreach, and address energy-efficient home improvements nationwide. 

Recommendations

We recommend that the funding for the Energy Star Program be increased to $100 million. The $50 million in increased funding that we are requesting should in our view be directed to the following initiatives; these recommendations represent the collective recommendations of Members of our Alliance-led advocacy coalition and I am sure there are many other worthy objectives for increased Energy Star funding, but these are certainly a few worthwhile recommendations:

• Expanded programs for improvements to energy-inefficient existing homes
• An expanded program for rating the energy performance of all building types
• An expanded focus on medium and small manufacturing and small business
• A new program to aid sponsors of emerging energy efficiency programs in program development and implementation
• An expanded outreach effort to state and local governments
• An expanded focus on exploring new technologies and practices

I will briefly address each of the areas where new funding is recommended:

• An expanded program for improvements to energy-inefficient existing homes:  $12.5 million: Homeowners can save 10 to 20 percent on their home energy bills -- which now average $2,100 a year – with a set of new Energy Star programs that go beyond the labeling of efficient products. These include:
  • Home Performance with Energy Star: HPES is a whole-home retrofit program that can be offered by a state, utility or other local program sponsor in partnership with EPA. It gives homeowners access to trained building professionals, information on the best home improvement projects for their home, and quality assurance and quality control on the work performed, which commonly includes adding insulation and sealing ductwork and air leaks.  This program is being offered in a dozen locations around the country and is providing homeowners with an average of 20 percent savings on their home energy bills.
    Additional funding would bring this program to many more cities and homeowners around the country.  HPES is uniquely valuable to homeowners because it goes beyond household appliances to improve the residential building envelope holistically, while offering consumers the confidence that comes with the Energy Star name.
  • Quality Installation of Heating and Cooling Equipment:  Ensuring that heating and cooling equipment is of appropriate size and that it is correctly installed and maintained is essential to getting the most out of energy efficiency. Many air conditioners are oversized and improperly installed, so often even high-efficiency units consume much more energy than necessary. Cooling and heating equipment are key drivers of peak demand, and therefore improving the effective efficiency of this equipment can decrease the need for new power plants.
    EPA Energy Star and its partners have developed and piloted programs to address the challenges to proper equipment sizing, installation and maintenance. Additional funding would enable Energy Star to spread these program models across the country, ensuring that gains in appliance efficiency are not mitigated by a failure to address these challenges.
• An expanded program for rating the energy performance of all building types: $7.5 million: Providing a comprehensive yet simple measurement of building energy consumption is a powerful tool in motivating energy efficiency improvements. EPA Energy Star has established a performance rating system that offers a standardized, consistent measurement of energy use for more than 60 percent of U.S. commercial building space, and this system has already been used to assess the energy consumption of about 10 percent of U.S. building space. Additional funding would expand this system to apply to the vast majority of the nation’s buildings, and would help Energy Star to partner with states, local governments, builders and other groups to make effective use of the rating system.
• An expanded focus on medium and small manufacturing and small business: $10 million: EPA Energy Star has developed specialized approaches for working with medium-sized manufacturers and with small businesses to improve their energy efficiency.  These efforts could be greatly expanded.  Energy Star could enlist many small businesses as partners in the proper delivery/installation of high efficiency services and products since small businesses constitute about half the economy and consume about half the energy
• A new program to aid sponsors of emerging energy efficiency programs in program development and implementation: $10 million: EPA already partners with hundreds of utilities, states, local governments and other organizations to help them run their efficiency programs.  There is growing interest, especially at the state level, in funding organized energy efficiency programs.  The Energy Star energy efficiency platform can help these emerging program sponsors to develop new programs quickly and to build on existing best practices, leading to greater program effectiveness and cost-effectiveness. EPA Energy Star should target its outreach toward programs for elementary and secondary schools, among others.
• An expanded outreach effort to state and local governments: $10 million: State and local governments can save significant energy and money through investments in energy efficiency. State and local governments could dramatically enhance attractive investments in energy efficiency through expanded outreach and sharing of best practice policies and programs, including improving the efficiency of water and wastewater treatment facilities, alternative financing approaches, effective school energy efficiency programs, etc.  Matching funds for innovative state programs could be established.
• An expanded focus on exploring new technologies and practices: $5 million: In many sectors technology is advancing at lightning speed, offering opportunities to improve the energy efficiency of new homes, buildings and products. Additional funding would expand EPA Energy Star’s ability to study these innovations and focus earlier in the technology development process on how best to bring them into the Energy Star program and deploy them in the marketplace. This would speed the adoption of the most energy-efficient products and drive further innovation.
  

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.