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Is Energy Star being tarnished?

Federal program faces opposition on multiple fronts

Published: August 27, 2015 06:00 AM

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 A  little blue label with a star in the middle has helped consumers find the most efficient models across more than 70 product categories since 1992. The Energy Star logo—given to models that exceed the federal minimum efficiency standard by at least 10 percent—is recognized by more than 85 percent of Americans, according to the Environmental Protection Agency, which oversees the voluntary Energy Star program. But the attention isn’t always for the right reasons.

Star wars

In recent months, Energy Star has entered the crosshairs of congressional leaders who want to roll back important features of the program. Exhibit A: the bill dubiously named the Energy Star Program Integrity Act, sponsored by Rep. Robert Latta, R-Ohio, and Rep. Peter Welch, D-Vt. Referred to by some on Capitol Hill as the “Whirlpool Bill” because of that manufacturer’s strong backing of it, the bill would undercut Energy Star by taking away consumers’ right to sue when a product is mislabeled with the Energy Star logo, thereby misrepresenting the promised energy savings.

The bill is unlikely to be voted into law on its own. But it could definitely be added as an amendment to the Energy Policy Modernization Act of 2015, a comprehensive energy bill that has been debated in the U.S. Senate Committee on Energy & Natural Resources.

In fact, a second anti-Energy Star measure has already been tucked into that legislation. Originally part of the Energy Efficiency Improvement Act of 2015, the measure was sponsored by Sen. Jeanne Shaheen, D-N.H., and Sen. Rob Portman, R-Ohio. It would repeal the independent third-party qualification requirement that Consumer Reports, along with other advocacy groups, called for after it emerged that many manufacturer-­certified models weren’t meeting the Energy Star specification. (As part of a 2010 federal investigation—during the time that manufacturers were self-­certifying—­undercover agents with the Government Accountability Office managed to get Energy Star qualification for a gas-powered alarm clock and a “room air cleaner” that was nothing more than a space heater with a feather duster and fly strips attached.)

“Something had to be done to put more checks into the system,” says Anne Bailey, Energy Star’s labeling branch chief. “Instead of devoting more tax dollars and staffing up, we used the market to maintain the integrity of whole system.” Starting in 2011, the EPA forced manufacturers to get their products certified by independent labs. Since then, Consumer Reports hasn’t observed any products with questionable claims. The new legislation would spare manufacturers that responsibility (and potential added cost) but would also reopen the door to false energy claims.

The fact that a program with clear consumer benefit faces constant opposition highlights the larger concern of energy efficiency in the U.S. “Energy Star is more reliable than ever,” says Shannon Baker-Branstetter, policy counsel for Consumers Union, the advocacy arm of Consumer Reports. “We’d hate to see this hard-earned trust eroded by bills that could chip away at its enforcement and integrity, and set a bad precedent that moves the program in the wrong direction.”

Constructive criticism

Even as we call on Congress to end its legislative attacks, Consumer Reports continues to suggest ways for the EPA to strengthen the Energy Star program. For example, it’s not always clear to consumers that Energy Star models of the same product are allowed to use significantly different amounts of energy. That’s because the requirements can change depending on product type. There are more than two dozen separate refrigerator specifications, for example—one for top-freezers, one for bottom-freezers, one for side-by-sides, and so on. But you wouldn’t know that discrepancy unless you also checked the yellow EnergyGuide label, which lists actual energy consumption and operating cost (see the comparison below). We think basing Energy Star on volume, regardless of type, would provide a more apples-to-apples comparison for consumers. Indeed, that’s how we measure and rate energy consumption in our labs.

We are also urging the EPA to end the 5 percent credit that’s currently given to smart grid-enabled appliances. For Energy Star qualified products, which are at least 10 percent more efficient than standard ones, the smart-grid credit essentially gets them halfway there. The problem is, only 2 percent of U.S. households have access to the technology and utility-company dynamic rate pricing that would enable them to benefit from a smart appliance. So consumers could end up with an Energy Star appliance that’s only half as efficient as the label implies.

Same label, different costs

Two Energy Star-bearing refrigerators—the Samsung RH22H9010SR and the Frigidaire Gallery FGHI2164QF—from our recent refrigerator tests have similar capacities, so you might expect them to cost about the same to operate. But the chart below tells a different story. Over the life of the refrigerators—10 to 15 years­—the total difference in operating cost could be around $250, assuming the 2014 national average electricity cost of 12 cents per kilowatt-hour.

Give your house an energy checkup

Putting your home through a comprehensive energy assessment is one of the best ways to lower bills. Also known as an energy audit, the process involves a trained professional using infrared cameras, blower doors, and other high-tech equipment to pinpoint every source of energy loss in your home. But nationwide, only about 4 percent of American households have undergone an audit, according to the Energy Information Administration.

What gives? Jennifer Easler, an attorney with the Iowa Office of Consumer Advocate, blames the low participation rate on the fact that power companies, under order from state regulators, are often responsible for promoting the energy-audit programs. “You can’t expect a business to aggressively persuade consumers not to buy the very product it’s trying to sell,” she says. Easler says she would rather see energy audits administered by an independent third party.

But even if homeowner participation shoots up, there will still be the matter of paying for the often costly improvements that are recommended by the auditor. The New York State Energy Research and Development Authority has devised an innovative financing program called “on-bill recovery.” It allows homeowners to take out a loan for their energy-­efficiency upgrades, which they pay back over time through an added charge on their utility bills. The loans are designed so that projected annual energy savings equal or exceed the total monthly charges per year. If your utility doesn’t yet offer this financing option, encourage it to do so.

How you can fight back

Send a letter to your legislator protesting the Energy Star-weakening bills. Get sample wording for your letter.

Make your voice heard by signing our petition protesting fixed-charge increases.

Tweet @NARUC using the hashtag #nixthefix.

Editor's Note:

This article also appeared in the October 2015 issue of Consumer Reports magazine.



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