The Reagan administration is trying to pull the plug on mandatory energy efficiency standards for home appliances--a move that has upset consumers and some members of Congress, divided the appliance industry, and outraged states that would be forced to drop their own appliance standards in the process.
Ultimately, the Energy Department's decision on the issue could affect the cost of appliances, their design and quality, and the portion of utility bills that they create.
Critics of the standards, such as the Whirlpool Corp., argue that manufacturers are developing energy-efficient appliances on their own and that federal and state regs will just complicate matters.
But others, including the Carrier Corp. and Rep. Richard L. Ottinger (D-N.Y.), insist that federal regulations are needed to promote efficient appliances. That argument has been supported by the General Accounting Office, which recently tore apart the Energy Department's conclusion that no standards are needed.
The debate dates back to 1978, when Congress directed DOE to set mandatory standards for 13 major appliances, such as refrigerators, furnaces and air conditioners. The standards were expected to save the equivalent of 728,000 barrels of oil a day by the year 2000, according to GAO estimates.
Two years later, DOE published proposed rules for eight appliances, triggering loud protests from manufacturers that the rules would lead to more red tape, increased costs and quality control problems. Among the 1,800 comments received were charges from manufacturers that the standard would produce central air conditioners that failed to dehumidify the air properly, and room air conditioners too large for normal windows.
Congress, however, had said that DOE could not issue standards that would be economically unjustified, technologically infeasible or result in insignificant energy savings--and that gave the Reagan administration an out. Last April it proposed new rules declaring that the standard would be "no standard," citing the criteria that Congress had specified.
But because Congress also stated that the federal standards, when final, would preempt any state or local standards, the DOE proposal, if adopted, would wipe out energy-efficiency requirements in 48 states. Those plans vary greatly in their scope and the efficiency levels they require, with the plans of California and New York generally considered the most comprehensive. Those two states testified against DOE's proposal at a recent public hearing.
Ottinger, who chairs the House Energy and Commerce subcommittee on energy conservation, said, "The department's proposal is nothing short of consumer fraud."
The GAO also had tough words for DOE's proposal. The department's analysis, it said, "relies heavily on an unvalidated key assumption that consumers purchase substantially more efficient appliances in response to rising energy prices. DOE's assumption is not supported by available historical evidence, particularly for furnaces, central air conditioners and water heaters."
The GAO noted, for example, that despite a 40 percent increase in natural gas prices from 1975 to 1978, the average efficiency of gas furnaces sold over that time remained essentially the same.
But during recent hearings by Ottinger's subcommittee, R. Tenney Johnson, DOE's general counsel, defended the department's decision to issue the no-standard proposal, and, in fact, went one step further and asked Congress to repeal the law authorizing the appliance program.
"The administration firmly believes that federal intervention in the marketplace is generally ill-advised and that the effects of federal regulation more often than not result in a loss of efficiency in the affected industry," Johnson said.
His plea to dismantle the program found little sympathy at the congressional hearings. Along with 50 cosponsors, Ottinger has introduced legislation to repeal part of the law, but only the part that allows the federal standards to preempt state and local rules.
Arturo Gandara, a member of the California Energy Commission, said the state estimates that by 1985, energy efficiency standards could save California utilities about $230 million in fuel costs. "Thus we are appalled by DOE's proposed rule. . . . It is clear to us that DOE's proposed rule represents a political and philosophical expression of the Reagan administration. . . . "
But Whirlpool officials say the issue is not over whether energy conservation is good, but rather over the best way to encourage conservation. Whirlpool Vice President Andrew J. Takacs insisted at DOE public hearings on the proposal that the "marketplace" will "encourage the design, manufacture and purchase of energy-efficient appliances."
Takacs pointed to Federal Trade Commission rules that major appliances carry labels indicating the probable electric bill the appliance will generate. Higher energy costs mean consumers will choose more efficient products, he argued, adding that Whirlpool has made considerable progress in reducing the energy consumption of its appliances.
But officials of Carrier Corp., which manufactures central air conditioners and furnaces, disagree. Noting that high-efficiency equipment is more costly, Carrier said roughly half of the air conditioner units sold throughout the country are purchased by builders, who are less interested in the energy efficiency of an appliance than in a low price.
In comments it filed on the proposal, Carrier said it also has problems trying to convince consumers to buy more efficient models, because the local dealers who usually sell them often push lower-priced models for fear of losing the sale to a competitor. Carrier added, "Among consumers . . . there is an amazing lack of understanding" of this issue.