Little Public CE Fallout Seen From GAO Energy Star Probe

Many CE executives said they see the recent GAO report exposing flaws in the Energy Star program (CED March 29 p3) as a tempest in a teapot that will have little impact on public perceptions. But some say they worry that state lawmakers and environmental groups will use the program’s flaws, exposed in the report, to push for more energy efficiency mandates.

Energy Star has “taken a hit in the media, but I don’t think in terms of public perception it really has an impact,” said Mark Sharp, group manager of Panasonic’s Corporate Environmental Department. Environmental groups said they would continue to push for state standards for CE products but vowed not to “exploit” the GAO’s Energy Star findings to further their agenda.

The GAO report “highlights a number of issues that must be addressed to ensure no one is exploiting the program and inappropriately receiving Energy Star certification,” the EPA and Department of Energy said in a joint statement in response to our query on the continued relevance of the program in light of the GAO report. The agencies have “already increased testing, verification and enforcement and will continue to address these concerns and further strengthen the program,” they said. The program saved Americans $17 billion on their energy bills in 2009 alone and a “recent review” found that 98 percent of the products tested met or beat the program’s requirements,” the agencies said.

Meanwhile, Sen. Susan Collins, ranking member of the Senate Homeland Security and Governmental Affairs Committee, said the responses by the EPA and DOE to the GAO report was “appropriate and swift.” But the Maine Republican found it “unfortunate that it took the alarming results of the GAO report to get these two federal agencies to move rapidly and responsibly.” Collins, who has sought a “detailed plan” from the two agencies on “specific testing improvements and proposed time frames for completing these reforms,” said Energy Star needs to “move toward increased use of third-party verification to help confirm the energy efficiency claims of the manufacturers.” The CEA and other industry groups have opposed third-party testing requirements, contending that the current system of self-certification is working well for consumer electronics.

Panasonic’s Sharp said the “real fallout” from the report will be limited to the “news media and blogs.” But he does expect state regulators and green groups to use the GAO report to “support their claims that Energy Star by itself isn’t enough” to curb energy use of CE products, Sharp said. “But I don’t frankly think that you can use this one report for state-level regulation of energy efficiency.” Panasonic supports better testing and verification procedures, he said. As for third-party testing requirements, he said “we support that there should be test reports in detail provided to EPA they can review” and steps to ensure that in-house testing meets standards set by certification bodies. There’s been no finding of any violation of Energy Star by CE products, said Jon Fairhurst of Sharp Labs. “In general, for the consumer electronics side it has been a really positive program,” he said, saying he has “no idea” what impact the GAO report would have on consumer perceptions.

"As with any far-reaching program or service, there are always opportunities for improvement and refinement” of Energy Star, said Douglas Johnson, CEA senior director of technology policy. The EPA regularly does off-the-shelf testing and in 2009 it tested 20 TV models and 16 imaging products and “found 100 percent compliance” with Energy Star, he said. Home electronics accounted for 59 percent of energy savings achieved by Energy Star in 2008 in the residential sector, he said, citing EPA’s most recent annual report. The furor over the GAO report “certainly seems to be a flash in the pan,” said one CE executive: “The Energy Star program is stronger than ever.” Although Energy Star has flaws like other programs of its kind, it remains the “best public approach to addressing energy efficiency” for the electronics industry, he said: “Any alternatives that impose greater regulatory or government burdens would be even more problematic,” and can lead to “administrative challenges and negative economic implications.”

Despite the GAO exposing “some flaws” in the Energy Star “process, on balance the program is working and is continuing to work,” said Jim O'Reilly, public policy director of the Northeastern Energy Efficiency Partnerships. The group pushes energy efficiency bills in the states and is behind the more than five measures in state legislatures addressing the efficiency of TVs. With the recent corrective measures, the EPA and DOE have “hit head on” some of the issues raised in the GAO report, he said. Increased regulatory activity in the states won’t be a “natural outcome” of the GAO report, he said. That’s because efficiency advocates consider both Energy Star and appliance efficiency mandates “extremely valuable,” although they take different approaches, O'Reilly said.

When faced with state mandates, CEA and other industry groups have held up Energy Star as the best way to promote energy efficiency in electronics, O'Reilly said. “And we have always disagreed with them on this,” he said. NEEP has been telling state policymakers that the voluntary Energy Star program has to be viewed differently from standards regulations, he said. But the group will not use the GAO report to “exploit that argument,” he said, because “we strongly believe in the Energy Star program and we know they are going to get it right."

Because Energy Star was designed to be a “market-based” program, the market should be allowed to address the issues raised by the GAO investigation, O'Reilly said. That means competing manufacturers should tell on those who are skirting the Energy Star requirements, he said. “One of the reasons the system has worked for the first 18 years of the program is that manufacturers have a market incentive to test competitors’ products and report violations,” the EPA and DOE said. Such manufacturer vigilance has complemented the agencies’ own “independent testing,” for some commonly used products, they said. The agencies are now developing a system to test all products that earn the Energy Star label, they said.