DOE Has Missed All Rulemaking Deadlines at a Cost of Billions in Forgone Energy Savings

DOE has missed all 34 of the rulemaking deadlines that have come due for  the 20 product categories with deadlines, completing 11 of these rules late  and not yet completing the remaining 23. LBNL estimates that delays in setting  minimum energy efficiency standards for four categories of consumer  products that DOE believes use the most energy will cost the nation at  least $28 billion in forgone energy savings by 2030. For rules that have been completed, delays ranged  from less than 1 year to about 10 years; and incomplete rules are as much  as 15 years late. As the  table shows, only three product or equipment categories—clothes  washers; refrigerators, refrigerator-freezers, and freezers; and small  furnaces—have had all their rules completed. However, LBNL staff provided us with estimates of  delays for the four categories of consumer products that DOE believes use  the most energy—refrigerators and freezers, central air conditioners and  heat pumps, water heaters, and clothes washers. DOE’s Plan Lays Out an Approach to Clearing the Backlog, but It Is Unclear Whether the Plan Is Addressing Root Causes of Delays

According to DOE’s January 2006 report to Congress, the department has  identified four causes of delays in its efficiency standards rulemaking: (1)  an overly ambitious schedule set in statute; (2) the sequential nature of the  rulemaking process; (3) the consequences of the Process Rule, which the  report states that DOE adopted in 1996 to address concerns about its  analyses and stakeholder involvement; and (4) DOE’s internal document  review and clearance process. DOE has not developed the  program management data it needs to identify bottlenecks in the  rulemaking process. Such plans also provide a basis for  accountability. While the DOE plan calls  for a sixfold increase in workload, it does not increase program staffing  and contractor budgets in the same proportion. However,  because DOE management could not provide data to conclusively  document the reasons for the substantial delays, or the data provided by  DOE as contained in internal work logs were inadequate to determine  causality, and because representatives of the various DOE offices could  not agree on the root causes, we turned to a well-recognized process for  identifying causes in complex situations—a Delphi panel. Appendix II: Objectives, Scope, and Method

Our objectives were to examine (1) the extent to which DOE has met its  statutory obligations to issue rules on minimum energy efficiency  standards for consumer products and industrial equipment and (2)  whether DOE’s plans are likely to clear the backlog of required  rulemakings and whether these plans could be improved. To address these objectives, we reviewed the statutory requirements and  deadlines for developing energy efficiency standards for consumer  products and industrial equipment, program information available on  DOE’s Web site, information provided by program staff, and DOE’s  January 2006 and August 2006 reports to Congress.
Why GAO Did This Study

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.

What GAO Found

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.