Energy Star Black Eye

6 04 2010

For years, beginning in the 1990s through just a few years ago I considered ENERGY STAR® to be fluffy foo foo feel good goo – kind of like eating meringue smothered in corn syrup after chopping wood all day.

Then they introduced the ENERGY STAR rated homes and ENERGY STAR rated commercial buildings.  Both of these seem to be solid “programs”.  ENERGY STAR for commercial buildings is based on energy intensity, which is energy consumption per square foot, climate region, type of facility and a few other things.  To “earn the ENERGY STAR” commercial buildings must be in the 75th percentile of energy efficiency by energy intensity AND buildings must be inspected by a licensed professional engineer to ensure the occupants or owners aren’t cheating by starving the building of fresh air, sufficient lighting, or comfortable temperature and relative humidity conditions.  This is solid.

Then the ENERGY STAR label for appliances started to carry some weight with me, although I have an ENERGY STAR rated dehumidifier that won’t shut off automatically anymore and I otherwise have no idea what about it saves energy.

Unless you’ve been cryogenically frozen like Austin Powers for the past 30 years and were thawed out yesterday, you know the government has been throwing money at ENERGY STAR rated appliances as fast as the presses at the US mint can churn out $100 bills.

Recently some ENERGY STAR warts were exposed.  The famous electric space heater with feather duster and fly strips passed as an air purifier.  This is ironic because electric resistance is the most wasteful source of space heat and a feather duster kicks up dust, just sort of moves it around – not good at air purification.  The other infamous example that passed was the gasoline-powered alarm clock.

For an organization that has eight pages of how and how not to use their brand, including how to use ENERGY STAR properly in a statement, and how to use the logo, this is a major scandal.  The insouciant reaction to this fiasco is unfortunately not surprising to me, as this is the federal government we are talking about.  An ENERGY STAR spokeswoman states the approvals of these bogus products did not pose a problem for consumers because the products never existed. There was “no fraud”, and she said she doubted that many of the 40,000 genuine products with EnergyStar status had been mislabeled.

Come again?  These ridiculous examples get through the “screening” process, but don’t worry, the 44,000 products with the label are all ok.  I think this woman needs to take a statistics class or maybe some taekwondo six sigma courses.

This is another blithe example of no accountability at the federal government.  If something like this happened in the private sector some big heads would roll.

Snooty congress people haul all sorts of people they don’t like in front of them to call the kettle black.  Examples: Mark McGuire, Jose Canseco, Roger Clemens (why their “crime” rises to a federal level is beyond me), Bill Gates, Steve Ballmer and half of Microsoft, automotive executives, and most recently, evil corporations who are going public with the hit they will take to earnings due to the passage of the healthcare bill – reporting which ironically congress made them do in their kneejerk reaction to Enron with the passage of the millstone known as Sarbanes Oxley.

The problem is the government has a horrible record of policing itself.  I went into this in an earlier rant, or maybe it was while I was in a deep sleep one night; the purpose of government is to protect people from being ripped off.  When they start delivering products and services, in this case ratings, who’s going to oversee that?  Look at this ENERGY STAR scandal.  The government didn’t protect us from getting ripped off, but instead was complicit in it.  I don’t know of a single energy efficiency program in the US that is administered by a state agency – except for Wisconsin, which controlled the energy efficiency purse strings for a while and then, you guessed it, they stole the money to fill budget gaps they were too cowardly to fix the right way.  Programs are administered by utilities, consultants, and/or non-profits and overseen by state agencies.  Yes.  This is how things should work.

This guy says to scrap the ENERGY STAR immediately.  I don’t know if I would go that far.  As mentioned above, I think the intent is very positive for consumers.  Instead it should be privatized, turned over to a non-profit or consortium to manage and police.  This is how commercial equipment is rated.  Organizations include the Air-Conditioning, Heating and Refrigeration Institute, and the American Gas Association.

If the ENERGY STAR “program” were turned over to the private sector and a scandal of these proportions broke, you can bet the executives of the organization administering it would be singing to Henry Waxman right now.

written by Jeffrey L. Ihnen, P.E., LEED AP

Black Monday Stampede

10 03 2010

July 1992: Tickets for U2’s ZooTV show at RFK stadium in Washington, DC go on sale by Ticketmaster.  The tickets are snapped up in a few hours, as fast as the phone lines could handle the traffic.  This was before anyone knew what the internet was (no Al Gore jokes).  Fortunately, a second date was announced and the roommate waited for the crack of 12:00:00 AM for a shot at the second batch, successfully.

March 1, 2010:  Federally funded rebates become available for efficient appliances in Iowa and Minnesota.  Phone lines jammed with 10 times expected volume and internet traffic at 100 times expected traffic took down the website of the contractor running Iowa’s program in the first hour, within minutes of opening.  Ultimately, Iowa’s share of the funds was gone within 8 hours.  Minnesota’s program dragged on until the next morning.  It was a Wal-Mart-style black Friday digital stampede.  Thank goodness for (don’t use Al Gore jokes) technology – I didn’t see any reported injuries or fatalities.

Some of these federally funded appliance incentives run two to ten times utility incentives.  What were they thinking?  Combined with utility incentives the total can exceed 50% of the purchase price for crying out loud.  See “Policy to Curb Carbon” (government doesn’t know how to do energy efficiency) and “Incentive or Discount” (people trained to wait for handouts to buy).  This is pretty much a giant transfer of wealth from people paying taxes to people taking the rebate checks, and I don’t begrudge the people taking the money.

Apparently the people who designed these state programs, which are actually handouts at these rates, don’t understand the market and/or supply versus demand.  Obviously they gave away too much money and taxpayers got far less than they should have for their “investment” in terms of reduced energy consumption, emissions, and sales and in some cases manufacturing here in the states.

And to top off the environmental benefits of the appliance programs, participants are to send their old appliance to the scrap heap, with self-policing enforcement.  Who’s going to do that?  They will either end up with a second refrigerator or freezer in the basement or the old stuff will show up on Craig’s list.

Recall cash for clunkers last summer.  The intent there was to offer a total of $1 billion incentives, up to $4,500 per vehicle and it was planned to run from late July through November.  Within a week or two the billion dollars was gone and congress quickly shoveled in another $2 billion.  THAT was all gone by Labor Day.

While attending the International Energy Program Evaluation Conference in Portland, OR, last fall I was engaged in a small group discussion – was cash for clunkers a free rider?  A free rider is somebody who takes an incentive for something they were going to do anyway.  This is considered to be a waste of incentive money.  That’s arguable in this clunker case because it more than likely moved the purchase date forward for buyers, but I also think it’s the wrong question to ask.  The more appropriate question is, was it cost effective?

Answering the free rider question, Edmunds estimates that of the 690,000 cars purchased through the cash for clunkers program only 125,000 were incremental.  That is, only 125,000 transactions took place that otherwise would not have.  The rest just displaced a sale that was going to happen soon anyway.  Figuring in free ridership, the taxpayer cost per vehicle was $24,000.  And then consider this: the average trade-in value of the clunkers was about $1,500, which may be worth $1,800 for sale to the next guy.  All these cars were destroyed.  That comes to $1.2 billion in destroyed working assets.  So the feds spent $3 billion to increase profits by car dealers by perhaps $125 million and destroyed $1.2 billion in assets.  Annual energy savings for these 125,000 vehicles would be roughly $120 million.  And maybe the domestic automakers lost a little less money as a result of the program.  Woohoo!

To be fair, the cash for clunkers program may have resulted in the purchase of more efficient vehicles than would otherwise be purchased.  Hardly.  The average fuel economy of cars sold through the program was 25.4 mpg.  The corporate average fuel economy for cars is 27.5 mpg and with light trucks included, it is 23.5 mpg.  In other words, these “efficient” cars were essentially average.

And the doozer of them all: free golf carts thanks to tax credits and sundry other incentives for electric / high mileage vehicles. 

These aren’t incentives.  They are gifts from frugal people to people who probably don’t need this crap.  But good for them, I say.  You have to play the game that’s put in front of you.