OBAMA MOVE MAKES CLEAR WHAT EFFICIENCY MEANS

Ka-BOOM! Appliance Standards Make a Big Bang; New Obama Administration Standards Could Slash U.S. Energy Use, Cut Global Warming Emissions and Save Consumers Money
July 22, 2009 (American Council for an Energy Efficient Economy)
and
Government Readies Biggest Ever Push for Energy Saving
Kenneth R. Harney, July 25, 2009 (Washington Post)

SUMMARY
Ka-BOOM! The Power of Appliance Standards; Opportunities for New Federal Appliance and Equipment Standards, written by Max Neubauer, Andrew deLaski, Marianne DiMascio and Steven Nadel and sponsored by the American Council for an Energy Efficient Economy (ACEEE) and the Appliance Standards Awareness Project (ASAP), enthusiastically endorses and describes the importance of Energy Efficiency provisions being readied by the U.S. Department of Energy and other Obama administration agencies that will tighten standards on 26 appliances and enact a series of other efficiencies that could provide unprecedented savings in energy and greenhouse gas emissions (GhGs).

The ACEEE/ASAP report gets its title from a recent remark made by Secretary of Energy Steven Chu in describing one of the quickest ways to reductions in national energy consumption and GhGs: “Appliance standards, ka-BOOM, can be had right away.”

26 new standards to change U.S. energy use. (click to enlarge)

The report calculates that the new Obama administration standards for 26 common household and business products could cut U.S. electricity use by a cumulative 1,900+ terawatt-hours (1.9 trillion kilowatt-hours) by 2030 and save consumers and businesses $123+ billion. The new standards plus standards under consideration and recommended in the ACEEE/ASAP report would also cut GhGs 6.5% by 2020 and 7.5%, eliminating the need for as many as 186 large coal plants by 2030.

In conjunction with provisions written into the American Clean Energy and Security Act of 2009 (ACESA), the controversial energy and climate change legislation passed by the House of Representatives in the Spring and now undergoing consideration and scrutiny in the Senate, Obama administration advances in Energy Efficiency would “far exceed” any other such advances in energy savings and GhG reductions.

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In conforming to the government-wide effort to incentivize Energy Efficiency, the Department of Housing and Urban Development (HUD), is making available a new generation of mortgages. The 1st HUD opportunity will be 5% larger Federal Housing Administration (FHA) loans for borrowers whose plans include efficiency improvements. Example: A $300,000 loan request will get $315,000 if it includes Energy Efficiency retrofits to the property.

HUD Secretary Shaun Donovan is reportedly also pushing a provision that would add the value of saved energy to a loan applicant’s qualifying income, making it easier to get the loan.

There is much evidence that Energy Efficiency renovation and retrofitting significantly adds value to properties. G2B Ventures, in Seattle, is raising $50 million to buy and rehabilitate houses because it found efficiency-certified homes sold for 7.5% more per square foot and 24% faster from 2007 to 2008. A CoStar Group study shows that Energy Efficient buildings have higher occupancies, get more rent, lease better and sell better. (See BIG GREEN BUILDINGS).

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COMMENTARY
The 1,900 terawatt-hours of energy consumption savings by 2030 obtainable from the ACEEE/ASAP report’s described and proposed standards is the amount of electricity now used by U.S. households in 18 months.

The 65,000 megawatts of peak demand savings in 2030 represents about a 6% reduction of total expected 2030 U.S. generating capacity.

About half the ACEEE/ASAP report’s described and proposed total energy savings would come just from new standards for fluorescent lights, water heaters, home furnaces, furnace fans, and refrigerators.

For all 26 products covered by the Obama administration-proposed standards, the average payback is 3.1 years for consumers. Over the lifetime of the 26 products, the average savings is 4 times greater than the average cost of the efficiencies implemented, making the benefit-to-cost ratio 4 to 1.

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Federal efficiency standards for appliances, equipment, and lighting used in the U.S. go back to 1987. Present standards will cut 7% (273 billion kilowatt-hours) off projected U.S. electricity consumption in 2010, despite DOE having allowed nearly two dozen legal deadlines for updated standards to lapse between 1994 and 2004.

The Obama administration, Secretary of Energy Steven Chu and Congressional leaders clearly intend to go after the enormous energy and GhG savings readily available from enforced and extended standards.

Only 2 weeks after taking office, Mr. Obama issued a presidential memorandum urging DOE to hurry new appliance standards.

New lighting standards, significantly stronger than Bush Administration proposals, were announced in June. Chu’s DOE is doing more standards enforcement than at any time since the Department was instituted and has signaled it intends to continue doing so through the end of 2012.

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The House of Representativesw signalled it wants in on the energy-saving act by passing ACESA in June. Among the Energy Efficiency provisions in ACESA:

(1) The FHA is directed to provide 50,000 new Energy Efficiency mortgages, in which houses undergo renovation with retrofits that reduce efficiency by at least 20% by 2012.
(2) Fannie Mae and Freddie Mac are directed to develop new mortgages that reward Energy Efficiency.
(3) Fannie Mae and Freddie Mac are also directed to increase opportunities for a new generation of energy- and location-efficient mortgages for moderate- and low-income home buyers that add at least $1 to the qualifying income of an applicant for every dollar of energy savings through efficiency renovation and retrofit. (Properties near employment centers or mass-transit lines are considered location efficient.)
(4) Real estate appraisals would be required to allow renovation and retrofit savings as part of a property’s valuation and states would be required to provide appraisers with training to make such assessments.
(5) Federal financial regulators are directed to establish "green banking centers" at banks and credit unions to educate consumers on the Energy Efficiency opportunities in the new FHA products.
(6) HUD is directed to put on “expos” to educate the public on the new product opportunities.
(7) States are required to prtoect houses that go off the grid from losing their hazard insurance.

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Standards first set in the late 1980s or early 1990s will be updated and strengthened by DOE according to new technologies. Recently issued and proposed new appliance and equipment standards will affect many common household and business products, including furnaces, water heaters, air conditioners and fluorescent light bulbs. Cumulative savings from existing standards now save households $2,800. Savings from proposed new standards could save an additional $1,100 per household over the life of the regulated products.

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QUOTES
- Steven Nadel, Executive Director of ACEEE: “The national energy savings at stake in these new standards are huge…It’s really encouraging that the President has made new standards a top priority.”
- Max Neubauer, lead researcher and report author, ACEEE: “Standards pack a big bang for national energy savings, but for consumers and businesses they silently save energy and cash…Buyers rarely know their purchases are affected, but they can take those savings to the bank.”
- Marianne DiMascio, report co-author/ Outreach Director, ASAP: "New standards do not require action by Congress or other nations…It's one important piece of the global warming solution puzzle in the complete control of the Obama Administration."

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- Mel Hall-Crawford, member, Consumer Federation of America & ASAP Steering Committee: “$123 billion in energy savings is a significant amount of money for consumers to spend on other goods and services…Our economy will benefit and jobs will be created as a result. It’s a win-win-win situation for the economy, the environment, and U.S. consumers.”
- Andrew deLaski, Executive Director, ASAP: “Appliance standards are a blockbuster strategy for saving energy, cutting global warming pollution, and spurring economic growth…No wonder Secretary Chu used the word ‘ka-BOOM’ to describe appliance standards.”