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Testimony of Kateri Callahan, President Alliance to Save Energy House Committee on Appropriations Subcommittee on the Interior, Environment and Related Agencies Fiscal Year 2006 Appropriations for EPA’s ENERGY STAR Program Introduction The Alliance to Save Energy, a bipartisan, nonprofit coalition of more than 90 business, government, environmental, and consumer leaders, appreciates this opportunity to submit written testimony in support of a $10 million increase for the Environmental Protection Agency’s (EPA) Energy Star Program in fiscal year 2006. The Alliance’s mission is to promote energy efficiency worldwide to achieve a healthier economy, a cleaner environment, and greater energy security. The Alliance, founded in 1977 by Senators Charles Percy and Hubert Humphrey, currently enjoys the leadership of Senator Byron Dorgan as Chairman; Washington Gas Chairman and CEO James DeGraffenreidt, Jr. as Co-Chairman; and Representatives Ralph Hall, Zach Wamp and Ed Markey and Senators Bingaman, Collins and Jeffords as its Vice-Chairs. The American Council for an Energy-Efficient Economy (ACEEE) also supports the recommendations in this testimony. The Energy Star program is one of the government’s most successful efforts to promote marketplace solutions to greater energy efficiency. The Energy Star program is an entirely voluntary program that reduces energy demand, lowers energy bills, and helps avoid greenhouse gas emissions. Increased investment by the federal government in the Energy Star program will translate to increased energy savings by taxpayers across the country. The EPA estimates that every federal dollar spent on the Energy Star program results in an average savings of $75 or more in consumer energy bills; the reduction of about 3.7 tons of carbon dioxide emissions; an investment of $15 in private sector capital; and the contribution of over $60 to the economy. The Energy Star program testifies to the important achievements that can be made through cooperative partnerships between government and businesses. The Climate Protection Partnerships Division at EPA, which operates the Energy Star program, works closely with manufacturers, retailers, building owners, and energy service providers, as well as state and local governments, nonprofits, and other organizations to promote energy-efficient products and buildings. Energy efficiency is an investment. There is often a modest additional cost for purchasing more efficient, smarter technologies, but that additional cost is paid back many times to the consumer through lower energy bills. Energy Star helps consumers understand and realize these benefits. The label represents the “good housekeeping seal of approval.” In order to qualify for the Energy Star label, a set of rigorous guidelines that represent high energy efficiency goals are established through the Energy Star program for the products or services of the participants. Last year alone, Americans, with the help of Energy Star, saved $10 billion on their energy bills. Consumers can use these savings to invest in the economy, their families, and their future. Energy Efficiency is America’s Greatest Energy Resource Energy efficiency is America’s greatest energy resource. It makes a larger contribution to meeting our energy needs than petroleum, natural gas, or coal. The Alliance to Save Energy estimates that energy efficiency gains since 1973 are now saving at least 40 quadrillion Btus of energy each year, or about 40 percent of our actual energy use. What’s more, increasing America’s energy efficiency is the quickest, cleanest, and cheapest way of meeting our energy needs. Without these enormous savings, our difficulties in meeting energy demand would be far, far worse than they are today. For example, in 2004 alone, Energy Star helped Americans save 24,000 Megawatts of peak power, enough to avoid the need for 72 300-Megawatt power plants, and thus avoiding the use of electricity from some of the dirtiest, oldest power plants that come online during peak hours. Working together with Energy Star, Americans prevented the release of 30 million metric tons of greenhouse gas emissions, which is equivalent to removing 20 million cars from the road. As these statistics exemplify, the Energy Star program is helping millions of Americans get the energy they need, while saving money and avoiding pollution. How Energy Star Capitalizes on this Resource EPA’s Energy Star program has proven to be an extremely effective way for this nation to capitalize on the potential of energy efficiency as a resource. Energy Star’s voluntary partnership program – which includes Energy Star Buildings, Energy Star Homes, Energy Star Small Businesses, and Energy Star Labeled Products – works by removing marketplace barriers to existing and emerging technologies, providing information on technology opportunities, generating awareness of energy-efficient products and services, and educating consumers about life-cycle energy savings. Two years ago, the Alliance to Save Energy undertook an extensive public opinion survey and found that the name recognition of the Energy Star program is very high – 86 percent among U.S. homeowners. Approximately one-third of U.S. consumers report using the Energy Star label as an information tool for making purchase decisions; and an even higher number report using Energy Star as an information tool to help them save energy. Most consumers who are aware of the Energy Star label correctly understand that products bearing the Energy Star label use less energy and can save them money on energy bills. About the Energy Star Partnerships Energy Star is composed entirely of voluntary partnerships, and these have grown since the early 1990s to include thousands of product manufacturers, private and public building owners and operators, homebuilders, small businesses, utilities, and retailers. These partnerships demonstrate that energy efficiency delivers “pollution prevention at a profit.” Energy Star serves broad constituencies in every state in the country. Energy Star currently has more than 7,000 company partners who are committed to improving the energy efficiency of our homes, businesses and products. Among those partners are over 1,400 manufacturing partners who make and market over 32,000 different models of Energy Star qualifying products, and 550 retail partners representing 21,000 storefronts. Energy Star counts more than 2,000 builder partners and partners who supply products and services for energy-efficient home construction. More than 360,000 families now live in Energy Star Homes– locking in financial savings for homeowners of more than $200 million annually. In fact, nearly 10 percent of all homes built in 2004 earned the Energy Star label. As you may know, 2005 marks the fifth year that the Alliance has asked Energy Star company partners to join us in our request for a significant increase in funding for the program. The response has been remarkable. Joining us in our request this year are 620 companies and partners and another 25 individuals. Much Has Been Accomplished, but Huge Potential Remains Untapped Although the Energy Star program has made a significant contribution to reducing consumer energy use, a wide array of important, additional opportunities to use the program to promote energy remain untapped. Energy Star is a success, poised to provide more savings and enhanced environmental protection as soon as the government is ready and able to invest more. In 2001, the President’s National Energy Plan recommended that the Energy Star program be expanded and that the Energy Star labeling program be extended to cover more products. Time and again, the President and the Administrator of the EPA have noted that voluntary measures are vital to addressing climate change and have held up Energy Star as an exemplary program. Yet funding for the program has remained flat. The FY 2006 proposed budget for Energy Star, $50.5 million, is up less than 1% from last year, and is the same as the FY 2002 appropriation. Worse, funding rescissions and internal cuts have plagued the program over the past several years. Even with tight federal budgets, the number of products and manufacturers in the labeling program has greatly expanded, and the number of partners in the Buildings, Homes, and Small Business programs has soared. But more funds are needed. Considering the soaring energy prices around the country and the concerns about electricity reliability and pollution abatement, the Alliance believes that funding for the Energy Star program should be significantly increased for FY 2006 and should be doubled over the next five years. This would enable the Energy Star program not only to add additional products and increase consumer education campaigns but also to address energy-efficient home improvements nationwide. By building on the Energy Star name, we can save much more energy and break through additional market barriers, building homeowner trust in energy audit programs and whole-home retrofits, including insulation, duct sealing, and home envelope sealing. In addition to labeling products and buildings, Energy Star has begun a successful effort working with state and local organizations to help homeowners audit and upgrade the efficiency of their homes. Home Performance with Energy Star is growing as state and utilities look for opportunities to save energy and reduce peak load. More than 11,000 homes in California, Colorado, Georgia, Idaho, Kansas, Massachusetts, Minnesota, New York, Texas, and Wisconsin have been improved through this program. But much more needs to be done to implement similar programs across the country. With additional funding, the Energy Star program could develop a supportive infrastructure for contractors around the country, share information with interested state organizations, and develop marketing efforts in up to 10 metropolitan areas per year. Recommendations EPA’s Energy Star program has clearly demonstrated its importance in helping the U.S. to capitalize on its greatest energy “resource” – energy efficiency. The program is delivering real progress toward meeting our country’s environmental and energy security goals, while at the same time putting more money in consumers’ pockets through reduced energy bills. More investment by the federal government is needed to expand the impact of this voluntary partnership between the government and industry. The Alliance to Save Energy recommends the subcommittee take the following actions to best leverage the proven results that stem from EPA’s Energy Star program: • First, we ask that the House, Senate, and conference specify the exact level of federal funding that is appropriated for the Energy Star program. Both the House and the Senate included such report language for FY 2004; the Senate did again in FY 2005. Such direction to EPA is needed to assure that funding intended by Congress for the program is used by the agency for that purpose. • Second, we recommend that the Congress increase funding of the Energy Star program by $10 million over the Administration’s request, in order to expand the number of products, programs, and partners involved in the current program. This should be a first step to doubling the $50 million budget for the Energy Star program within five years. In particular, the added funds will allow expansion of the new Energy Star “Home Performance” component nationwide. Conclusion The Energy Star program proves that we can protect the environment while simultaneously saving consumers money on their energy bills and enhancing the economy. Energy Star provides the catalyst for many businesses, state and local governments, and consumers to invest in energy efficiency, which in turn yields multiple private and public benefits. It does this by providing access to information, improving brand recognition, and providing positive publicity. While there are many demands on the country’s financial resources, Energy Star has proven tremendously cost-effective, and it returns important benefits to the nation. Every added federal dollar invested in Energy Star in fiscal year 2006 will return a significant and cost-effective yield in pollution reduction; economic stimulation; energy security; and consumer savings. |
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