MOST AMERICANS want to keep Uncle Sam out of their bedroom, and they probably feel the same way about the rest of the house. Too bad for them. The federal government is poised to invade America's homes with a slew of new energy efficiency standards for clothes washers, air conditioners, refrigerators, water heaters, and other appliances. As a result, these items will soon cost considerably more, and the range of products on the market will very likely shrink.
It's all thanks to the National Appliance Energy Conservation Act, which in 1987 empowered the Department of Energy to set maximum energy use standards for 14 home appliances. The initial standards, in place by the early 1990s, were fairly reasonable and generated little resistance.
But the same law granted the Department of Energy broad authority to tighten its standards periodically. Any bureaucracy with such an open-ended mandate will eventually reach the point of overkill, and the department hasn't taken long. Currently, it is cranking out the second or even third round of successively stricter standards for many appliances -- and each new rule seems to make less sense than the last.
The most recent standards -- part of a last-minute regulatory binge by the Clinton administration -- are those for clothes washers and central air conditioners. Proposed in early October, they are due to be finalized in December, after a 60-day period for public comment. If enacted, they will tighten the energy conservation standard for clothes washers by 22 percent in 2004 and 35 percent in 2007. They will reduce the standard for central air conditioners by 20 percent in 2006; for heat pumps by 30 percent.
In the past, the Department of Energy conceded that its standards raised the purchase price of appliances, but insisted that consumers came out ahead through energy savings over the life of the product. Critics complain that these analyses routinely overstate the benefits. Energy consultant Glenn Schleede, for example, a participant in many appliance "rulemakings" over the past decade, finds that the department usually relies on exaggerated assumptions about the amount and cost of the energy saved by an appliance meeting its standards.
In calculating the benefits of energy efficient clothes washers, the regulators assume that the average household does 392 loads of laundry per year and will own the same machine for 14 years. By their reckoning, compliance with the proposed energy efficiency standard will increase the price of a washer approximately $ 200, but decrease the use of energy and water so as to save $ 30 annually. In 7 years, these savings will cover the extra purchase price, after which the continuing savings will leave the consumer better off -- as long as he doesn't move or buy a new washer.
Meanwhile, the new standard will very likely limit product choice. The manner in which the regulators determine efficiency works to the advantage of front loading washers, and will likely mark the end of the line for inexpensive top loading models popular with American consumers. By the time the 2007 standard is in place, the market should be dominated by front loading models. While some clothes washers already meet the new energy standards, less than 9 percent of consumers have chosen them -- no surprise, considering they cost from $ 700 to $ 1,100, according to Consumer Reports. Many decent, less efficient top loaders can be had for under $ 400.
One-size-fits-all standards are particularly difficult to justify with clothes washers, because their use varies so widely. Obviously, washers that cost hundreds of dollars more but save perhaps a dime per load need to be used frequently in order to be a good investment. Imagine a senior citizen living alone or with a spouse and doing only two or three loads per week. An energy efficient washing machine in such a household would never recoup the higher purchase price.
Manufacturers, however, tend to go along with government mandates, which often shift the market towards pricier models. In fact, the proposed clothes washer standard came about as part of a negotiated agreement between the Department of Energy, environmental groups, and manufacturers. When questions arose about whether the public would accept expensive front loading washing machines, one manufacturer commented, "Selling it in the marketplace is easy if there is a standard in place. It's not a matter, necessarily, of consumer acceptance."
Notwithstanding the powerful triumvirate of bureaucrats, activists, and manufacturers who rarely lose out in the regulatory process, the fight is not quite over. Representative Joe Knollenberg (R-MI) -- scourge of the infamous (but still undefeated) low-flush toilet -- has taken an interest in protecting consumers from ill-conceived federal efficiency standards. "I'm not against any of these products," he says, "I'm just against the federal government mandating them."
Particularly bothered by the speed of the rulemakings, Knollenberg has introduced a bill to extend the comment period on the proposed rules by 120 days. He hopes a public outcry will change the administration's mind about the energy efficiency standards for household appliances. At the very least, the extra time might force the Department of Energy to better explain to the public why it insists on foisting on them requirements that, if put to the ballot, would almost certainly go down to landslide defeat.
Ben Lieberman is a policy analyst with the Competitive Enterprise Institute in Washington, D.C.