October 17, 2009

DOE decides to step-up enforcement of efficiency standards

Department of Energy (DOE) Secretary Steven Chu frequently cites energy efficiency in home and commercial devices as a means to reduce both energy demand and greenhouse gas output. Now, DOE is increasing its enforcement of energy efficiency certification standards for all covered household and commercial products. On October 14, 2009, the DOE released a new guidance document of its enforcement procedures and highlighted already existing energy efficiency certification standards and a new focus on enforcement.

After reexamining the Energy Policy and Conservation Act of 1975, 42 U.S.C. §§ et seq, the DOE clarified the efficiency certification requirements of the Act and stated that existing regulations require manufacturers submit compliance statements and certification reports to the DOE to ensure their products meet DOE’s energy efficiency standards. (See Guidance on Energy Efficiency Enforcement Regulations, 74 Fed. Reg. 52794 (October 14, 2009).

Furthermore, the DOE stated that failure to comply with the certification and reporting requirements of the Act are an independent violation of the Act and are subject to enforcement penalties, even if the product does meet the actual efficiency standards.

Finally, the agency announced that it will more vigorously enforce certification standards by creating a new enforcement team comprised of experienced lawyers with litigation experience. The new enforcement team will be conduct random reviews of manufacturer compliance of certification standards. (For more information on the certification standards prescribed by the DOE see: 10 CFR part 430, subpart F; 10 CFR part 431, subparts B, K, U, and V).

The DOE expects that by enforcing efficiency regulations several goals can be accomplished. First, that over 2 billion metric tons of carbon dioxide will not emitted that otherwise would have. Second, that over the next 30 years, they will save Americans an estimated $250 - $300 billion in energy costs. And third, enforcing efficiency standards more rigorously will ensure that all manufacturers have a level playing field and those companies that neglect to follow regulations will not have an competitive advantage over those entities that do follow regulations.

The DOE’s renewed emphasis on energy efficiency bodes well for clean technology companies focused on energy efficient products. Strict enforcement of these regulations will likely create a drive to update existing technologies and inspire investment into new and better energy efficient technologies. Furthermore, strict enforcement of existing standards will better prepare business for the efficiency standards that will likely be a part of the federal greenhouse gas reduction law.

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