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Your Kitchen Is a Battleground in Obama Energy Efficiency Push

  • Rules to cut 96 power plants' worth of energy: consumer group
  • DOE estimates power savings will top half a trillion dollars

For a taste of the energy legacy that President Barack Obama is about to leave behind, check the fridge.

No, literally. Since 2009, his administration has created 43 rules that will deliver the biggest energy savings of any president in history, eliminating demand in 2030 equal to the electricity produced by 96 power plants, based on a consumer group’s estimates. And among the most effective is one that has the family refrigerator running on less power than it takes to light a 50-watt bulb.

A rule completed last month will shrink the energy used by commercial rooftop air conditioners and furnaces, an effort the U.S. government projects will save 1.7 trillion kilowatt-hours of electricity over 30 years, more than any other change since efficiency laws were enacted in 1975. Supporters say the changes will cut power bills. Opponents warn appliance costs will rise as manufacturers spend tens of millions redesigning products.

“It’s major progress for energy efficiency and it’s also a major success in straightening out an important energy savings program that had not previously delivered on what it was supposed to do,” Andrew deLaski, executive director of the Boston-based Appliance Standards Awareness Project, said in a phone call.

Government Overreach

The Obama administration is guilty of overreach, say opponents. A rule for dishwashers proposed in 2014 curbs water consumption so much that the machines failed to remove food caked on plates and utensils, according to the Association of Home Appliance Manufacturers, a trade organization. The draft standard, which may be adopted in August, was the result of the U.S. Energy Department’s failure to consider input from manufacturers and conduct proper product testing, the Washington-based group said.

“The DOE is rushing to promulgate as many rules as they possibly can and they are running into situations where they are cutting corners in the analysis,” said Joseph McGuire, president of the Washington-based group. “We are concerned that they’re going too far and they’re going too fast, and it won’t be a good deal for the consumer.”

Republicans in Congress have fought several energy plans pushed by Obama. Representative Mike Pompeo, a Republican from Kansas, said the premium consumers pay for many of the products redesigned to meet the higher standards outweighs the energy savings. He backs legislation to suspend action on the rules for as long as 18 months.

Kathleen Hogan, the Energy Department’s deputy assistant secretary for energy efficiency, defends the Obama effort as a boon for consumers.

“One of the key commitments was to really get the appliance standards program up to date,” Hogan said in a telephone interview. “It’s a tremendous impact on saving people money and reducing our need for energy.”

Few Spared

Few energy-consuming devices have been spared from the rule changes. They cover everything from clothes washers and dryers to ceiling fan light kits and beverage vending machines, with the president pledging to review 17 more standards for possible revision before the end of his term. The Energy Department has estimated that the reductions will save consumers more than $520 billion through 2030 in electricity costs.

Those savings come at the expense of power company earnings. Retail electricity sales have been flat since 2007 after gaining most every year from 1949, according to Energy Information Administration data. The Standard & Poor’s 500 Utilities Index had the third-worst stock performance of any industry group last year, with shares tumbling 8.4 percent.  

“In spite of the fact that the economy is growing at its fastest rate since 2005, we’re still seeing load growth stagnating in most every market,” said Shahid Malik, president of energy resources and trade at Newark, New Jersey-based utility Public Service Enterprise Group Inc.

President’s Leadership

Obama’s push for efficiency was part of his emergence as a global leader in the drive to cut greenhouse gases, with the president reaffirming his pledge to curtail carbon emissions through energy efficiency in a pact with China in September.

All the standards updated during Obama’s presidency may cut 3 billion metric tons of carbon dioxide by 2030, equal to about half the carbon pollution from the entire U.S. energy sector in a year, according to the Energy Department.

In 2016, energy reductions may reach about 130 billion kilowatt-hours and save consumers about $14 billion, according to deLaski of Appliance Standards Awareness Project.

“When you can advance a policy that saves people money, promotes innovation, saves a bunch of energy and yields environmental emission reductions all at the same time, it’s a no-brainer,” he said.

Wholesale power in the benchmark hub for the largest U.S. grid extending from Washington to Chicago fell 76 cents, or 3.1 percent, to average $24.11 a megawatt-hour for the hour ended at 4 p.m. Thursday from the same time a day earlier, grid data compiled by Bloomberg showed.

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