Senator Carson, Representative Tucker, and other members of the Environment and Natural Resources Committee, my name is Dylan Voorhees and I am the Climate and Clean Energy Director for the Natural Resources Council of Maine (NRCM). NRCM strongly supports this bill as an extremely cost-effective way to lower utility bills for consumers, reduce waste and total energy costs by millions of dollars per year, and decrease air and climate pollution for our environment.
Energy efficiency has been a cornerstone of Maine’s energy policy for decades, reflected in our many strong and diverse energy efficiency laws, which typically earn bipartisan support, and nationally recognized energy efficiency initiatives. Reducing unnecessary use of energy—whether electricity or fuels—by reducing energy waste is a common-sense strategy. Reducing energy consumption and demand for power not only benefits individual consumers, it benefits all consumers on the electricity grid, by curbing the high demand periods that raise rates for all of us. Reducing unnecessary water use also lowers costs in most cases, and reducing hot water consumption saves both water and energy consumption.
The appliances in this bill (and a few others adopted in similar laws in other states) have been selected as the most cost-effective opportunities to set the bar for minimum efficiency performance. The proposed standards do not require the most energy-efficient products, they eliminate the least energy-efficient, making it easier for suppliers and consumers to find, purchase, and use reasonably efficient products.
As you may be aware, there are several barriers that make it more difficult for consumers to select energy-efficient appliances on their own, even given their economic interest. One of those barriers is upfront costs. Typically, energy-efficient appliances cost somewhat more upfront and then pay for that incremental cost through savings. But understanding, predicting, or having confidence in those savings is not always easy for the non-expert. It is not easy to tell by looking at an appliance, or even its specifications, how efficient it is, how much it will cost to operate, or how it compares to other products. In fact, these appliances have very short paybacks (high savings to incremental cost ratios) and still there are appliances sold every day that are inefficient.
So, information barriers are very real. Educating enough consumers about how to evaluate appliance efficiency and estimate savings and payback sufficiently to affect the market is a laudable goal, but to actually achieve it in practice would be very costly. Some pieces of equipment are not necessarily even selected by the end-use consumer, an installer or vendor effectively picks the product for them. They may recommend or install products based on price, or what they are familiar with, or simply choose the product most similar to the one being replaced.
Make no mistake, these products are all commercially available and highly cost-effective. After a few years of being in place, the appliance standards in the bill would save Maine consumers at least $10 million per year, growing beyond $25 million per year over the coming decade or so.
That is why several states are moving forward with appliance standards exactly like these. And manufacturers and appliance providers are noticing and working to conform. The federal government is not moving forward as it once did to adopt national base-level energy efficiency standards. But states can and should act—and the states with the greatest concerns over energy costs are the ones that can and should move now.
Maine has long established automobile emission standards (similar to fuel efficiency standards) that have been adopted by about a dozen states, as an alternative to the national standard, because we put a premium on clean, healthy air. (Those standards reduce fuel expenses for Maine consumers, too, incidentally.) States are coordinating on appliance standards so that similar or identical standards are used, and the states work together on compliance tools so that no one state has to take on a big regulatory burden.
We believe the bill, especially with some clarifications, will not pose a significant burden on the Maine Department of Environmental Protection (DEP), either for rulemaking or enforcement, if Maine can take advantage of the standardized tools developed by California and others. We believe the job of educating appliance suppliers and installers can be made easier through Efficiency Maine’s ongoing outreach and education to this sector.
Last year, this committee passed a landmark climate law to require substantial carbon reductions across our entire economy. That law directed the Maine Climate Council and DEP to focus on what is cost-effective: “The council shall quantitatively analyze and report on the technical feasibility and cost-effectiveness of each strategy.” (38 MRSA § 577(2)) and “In identifying the preferred strategies to include in the updated climate action plan, the council shall give consideration to the following objectives: A. Pursuing cost-effective, technologically feasible and equitable greenhouse gas emissions reduction pathways…” (38 MRSA § 577(7))
Appliance standards are among the most cost-effective carbon reduction strategies available. As the economists would say, they don’t have a net cost per ton of carbon avoided, they have a net savings per ton of carbon. It would be difficult to find a more important policy foundation for Maine’s climate transition, and without appliance standards, we will need other more expensive strategies.
Finally, in a related point, you should know that adoption of energy efficiency standards for appliances will reduce the amount that Efficiency Maine spends on financial incentives for these products. (Efficiency Maine does not provide rebates for products that have become standard purchases, much less products required by law.) Because the funds from Efficiency Maine programs come from utility ratepayers, this legislation will reduce efficiency charges on electric bills as well.
We urge the committee to pass this legislation. As you will hear, there are some discussions of some adjustments to which categories of appliances should be in the final bill. As you consider that, we encourage you to keep two things in mind:
- Some categories offer much greater savings than others. Whereas standards for urinals might save $20,000 per year, the standards for commercial fryers would save consumers $750,000 per year. If you want to put consumers first and prioritize lower energy costs, don’t lose track of the big ones. (For this reason, we encourage you to add computers to the bill, as other states have done, which offer huge energy savings.)
- Uniformity and standardization are invaluable. You will not serve Maine’s interests, and you will needlessly frustrate manufacturers, if you pick arbitrary standards that are not in line with other states. Likewise, if you pick appliance categories for which other states or alliances have compliance tools (like periodically updating tables of which products meet the standards), that will make compliance much easier for Maine.
Thank you very much for the opportunity to provide this testimony in support of LD 1750.
