In many areas of the country, the temperature soared to record highs which, combined with humidity, had air-conditioning units moving out of warehouses at a pretty good clip. As usually happens at such times, there were numerous instances of power outages as transmission capabilities were pushed to the limit. Particularly along the East Coast, there were widespread and sometimes lengthy outages. There was little question as to the culprit.
"When heat waves strike, the first thing people do is crank up the air conditioning - which consumes electricity at alarming rates," said U.S. Energy Secretary Bill Richardson.
Turning up the heat on cooling downRichardson wasted little time in addressing the problem. On July 19, following a series of outages he asked his staff to accelerate the issuance of a new standard requiring central air conditioners to be up to 20% more efficient. He asked that the new standard be incorporated into a final rule targeted for issuance in November 2000. The idea is to get more efficient air conditioners into people's homes sooner rather than later.
The U.S. Department of Energy has been required to regulate the Standard Energy Efficiency Ratio of central air conditioners and various products since the mid-'70s. Current rules say no unit can be sold that does not have a minimum SEER of 10. Under the authorizing legislation, the National Appliance Energy Conservation Act, the DOE has the authority to ratchet up efficiency levels if three criteria are met. These are:
1. Technical feasibility;
2. Economic justification; and
3. Significant energy savings.
The HVAC industry (through entities like the Airconditioning and Refrigeration Institute) is gathering and sharing information in order to aid the decision-making process. Despite the target of November 2000 for a final rule, the actual timetable is likely to extend a year or two until such time as the DOE enacts a final rule. Further adjustment time will be available because the statute provides that new standards will not go into effect for five years after issuance of a final rule.
SEERing a way to tax creditsMany in the industry are arguing that a program of tax incentives might have a more immediate effect than a change in standards. In fact, President Clinton's Climate Change Technology Initiative pegs $3 billion of tax incentives combined with a much higher SEER threshold. Similar proposals have come from Rep. Robert T. Matsui, D-Calif., which would give a tax credit for a 13.5 SEER, and Sen. Tom Daschle, D-S.D., who has offered an amendment to the tax bill that shoots for a minimum 13 SEER threshold to be rewarded with a tax credit.
Prospects for passage of either measure appear slim, but anything can happen. Many of the President's supporters are urging him to veto any tax bill unless it contains energy efficiency incentives. In fact, that's what happened earlier this fall when the Matsui and Daschle proposals were not accepted as amendments to the tax bill that was sent to the President. It may have been one of the factors leading to Clinton's ultimate veto of that measure.
The HVACR industry would want to ensure that any changes in the standard clearly meet the three criteria. Every time there is a major change, there is the potential for stranded assets, loss of jobs and increased costs (among other things) as manufacturers shift gears to handle the new product. Some would see it as continued unwarranted intrusion by government into private industry. Again, it must go back to the three criteria with sufficient lead time to soften the blow.
With respect to the immediate situation and Secretary Richardson's remarks, it is not unusual for political leaders to call for corrective actions when summer temperatures bring shortages and dislocations. In this case, Richardson outlined additional measures beyond accelerating AC efficiencies.
Richardson outlined plans for the Energy Department to examine existing power transmission capacity and whether additions presently planned will meet future demands. In addition, he proposed coordinating efforts in the Northeast through a regional governors' summit. He reccommends a call for the federal government to lead by example by cutting electricity consumption in its buildings and facilities when utilities make urgent appeals for conservation.
Furthermore, Richardson cited efforts by the DOE to develop advanced generation and transmission technologies and to promote energy efficiency in homes and businesses. He stressed that these initiatives are not designed to infringe on the role of the states but to complement their efforts and provide added resources.
Because air conditioning is such a catalyst to the big summer power drains, efficiencies must inevitably be addressed. A reasoned process, with input from industry, will yield the most effective and most accepted results. It will be interesting to watch as the process unfolds.