Energy Efficiency:

Long-standing Problems with DOE's Program for Setting Efficiency Standards Continue to Result in Forgone Energy Savings

GAO-07-42: Published: Jan 31, 2007. Publicly Released: Mar 1, 2007.

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The Department of Energy (DOE) sets energy efficiency standards through the rulemaking process for certain consumer product categories, such as kitchen ranges, and industrial equipment, such as distribution transformers. Congress reported in 2005 that DOE was late in setting standards and required DOE to report every 6 months on the status of the backlog. GAO examined (1) the extent to which DOE has met its obligations to issue rules on minimum energy efficiency standards for consumer products and industrial equipment and (2) whether DOE's plan for clearing the backlog will be effective or can be improved. Among other things, GAO convened an expert panel on energy efficiency standards to identify causes and effects of delays and assess DOE's plans.

DOE has missed all 34 congressional deadlines for setting energy efficiency standards for the 20 product categories with statutory deadlines that have passed. DOE's delays ranged from less than a year to 15 years. Rulemakings have been completed for only (1) refrigerators, refrigerator-freezers, and freezers; (2) small furnaces; and (3) clothes washers. DOE has yet to finish 17 categories of such consumer products as kitchen ranges and ovens, dishwashers, and water heaters, and such industrial equipment as distribution transformers. Lawrence Berkeley National Laboratory estimates that delays in setting standards for the four consumer product categories that consume the most energy--refrigerators and freezers, central air conditioners and heat pumps, water heaters, and clothes washers--will cost at least $28 billion in forgone energy savings by 2030. DOE's January 2006 report to Congress attributes delays to several causes, including an overly ambitious statutory rulemaking schedule and a lengthy internal review process. In interviews, however, DOE officials could not agree on the causes of delays. GAO's panel of widely recognized, knowledgeable stakeholders said, among other things, that the General Counsel review process was too lengthy and that DOE did not allot sufficient resources or make the standards a priority. However, GAO could not more conclusively determine the root causes of delay because DOE lacks the program management data needed to identify bottlenecks in the rulemaking process. In January 2006, DOE presented to Congress its plan to bring the standards up to date by 2011. It is unclear whether this plan will effectively clear DOE's backlog because DOE does not have the necessary program management data to be certain the plan addresses the root causes. The plan also lacks critical elements of an effective project management plan, such as a way to ensure management accountability for meeting the deadlines. Finally, the plan calls for a sixfold increase in workload with only a small increase in resources. DOE plans to manage the workload through improved productivity.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In the 1st quarter of 2008, DOE began using a system for managing and tracking its appliance standards rulemaking process. The system tracks progress by reviewers and program staff and identifies the length of time used for each stage of the process. According to the program's manager, the system has been instrumental in enabling the program to significantly increase the number of rulemakings issued. In using this system to monitor progress in development of rules, concurrence by internal reviewers, and publication of rules in the Federal Register, DOE has implemented the recommendation.

    Recommendation: To increase the likelihood that DOE's plan for updating minimum energy efficiency standards is successfully implemented, the Secretary of Energy should employ the elements of leading management practices, including expediting the efforts DOE has begun to establish a tracking system to gather data that may be used to identify and address causes of delays to more effectively manage the rulemaking process.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: Beginning in mid-2007, DOE has made on-going process changes to improve the transparency of interim goals and timeframes to all stakeholders to better hold reviewers and program staff accountable to the timeframes. For example, DOE has developed standardized document templates, analysis guidelines and procedural instructions for rulemaking staff and technical contractors and made the tools readily available by posting them on an internal website. DOE rulemaking staff are expected to meet review schedules and they are rated on their performance, thus the staff are held accountable to the timeframes. In 2009, DOE also streamlined the review and concurrence process for developing and approving rules, including allowing for parallel reviews and, according to the program manager, decreasing the rulemaking timeline by more than 50 percent. DOE further decreased review times in 2010 by creating a leadership stakeholder group responsible for reviewing key policy issues early in the rulemaking cycle. DOE also standardized the information that accompanies rulemaking documents to provide more efficient and effective communication to higher-level reviewers. To provide further transparency to stakeholders outside of the department, DOE puts information on its Web site about the most recent rulemaking action it has taken for each product. According to the program manager, DOE also sends timely notices of planned regulatory actions to stakeholders via email.

    Recommendation: To increase the likelihood that DOE's plan for updating minimum energy efficiency standards is successfully implemented, the Secretary of Energy should employ the elements of leading management practices, including ensuring that the interim goals and time frames are transparent to all stakeholders, and that all internal stakeholders, including reviewers and program staff, are held accountable for time frames.

    Agency Affected: Department of Energy

  3. Status: Closed - Implemented

    Comments: DOE has implemented our recommendation by allocating additional resources to the appliance standards program. Since 2007, DOE has nearly doubled the program staff (from 7 to 13)and increased its budget for contractor support from $10 million/year to $35 million for fiscal year 2011. Also, in 2010, DOE hired a new program manager to improve program management and operations. As a result of these resource increases, in conjunction with process improvements, DOE has made significant progress toward updating the standards that we reported were backlogged.

    Recommendation: To increase the likelihood that DOE's plan for updating minimum energy efficiency standards is successfully implemented, the Secretary of Energy should employ the elements of leading management practices, including allocating adequate resources within DOE's appropriation.

    Agency Affected: Department of Energy


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