Trump’s plan for Energy Star sparks industry uproar

President Trump is facing strong opposition in his drive to eliminate federal funding for the Environmental Protection Agency’s (EPA) popular Energy Star program. 

With the Department of Energy’s help, the voluntary Energy Star program sets efficiency benchmarks for appliances, electronics, building materials, lighting and other products, and lets companies use the Energy Star label on products that meet the specifications. 

In his budget request to Congress for fiscal year 2019, Trump asked lawmakers to eliminate the $42 million in federal funding for the program. He instead proposed allowing the EPA to fund the energy efficiency certification through fees charged to companies that use it. The idea has been pushed in conservative circles for years. 

The Trump administration and supporters of the plan say it would shift the burden for its costs to the companies that benefit from it. 

“By administering the Energy Star program through the collection of user fees, EPA would continue to provide a trusted resource for consumers and businesses who want to purchase products that save them money and help protect the environment,” the agency told lawmakers in its budget request.

“Entities participating in the program would pay a fee that would offset the costs for managing and administering the program.”

But groups that represent manufacturers, retailers, utilities, environmentalists and others who benefit from the program are lining up against Trump’s plan.

They cite, among other things, the estimated $30 billion in energy savings that users of Energy Star products achieve each year, arguing that it’s a hugely successful program that should be embraced.

“Placing the burden solely on the manufacturers that use the label isn’t really fair,” said Kateri Callahan, president of the Alliance to Save Energy, which counts among its members appliance makers, utilities and others interested in energy efficiency.

“The ultimate beneficiaries of this are the consumers who are saving money,” Callahan said, adding to the list states with efficiency standards, schools and building owners.

“The beneficiaries are so wide. And we’re all benefitting when we’re avoiding greenhouse gas emissions.” 

Lowell Ungar, senior policy adviser at the American Council for an Energy-Efficient Economy, said the proposal is “highly problematic.” 

“We’re glad that they’re not proposing to eliminate the program. That’s certainly a step forward,” Ungar said, pointing to Trump’s previous budget request, which sought to abolish Energy Star altogether. 

“Certainly the concern is whether this is a viable business plan, when there is no business plan,” Ungar said. “Can they actually raise enough money to run the program? Who’s going to pay for it? How is this going to work?” 

Any change to the fee structure would require congressional action. The EPA said it would then go through a regulatory process to set the fee structure in a way that’s fair and takes into account various stakeholder concerns.

Trump’s proposal last year to eliminate Energy Star was also met with significant backlash. More than 1,000 companies and groups signed onto a letter in April to leading congressional appropriations leaders supporting the program.

The House ended up voting to preserve Energy Star, but cut its funding to $31 million. The Senate never voted on an appropriations bill for the EPA. 

Energy Star has long enjoyed bipartisan support among lawmakers, who see it as a boon to consumers, retailers and manufacturers in their state, all at a relatively low cost to the government. 

Rep. Betty McCollum (Minn.), the top Democrat on the House Appropriations Committee’s subcommittee that oversees the EPA’s budget, pledged to fight for Energy Star. 

“Energy Star is a win-win for businesses and consumers that has saved Americans more than $400 billion on their utility bills over the past 25 years. I’ve heard from builders, realtors, manufacturers, and retailers and they all support this important program,” she said in a statement.

“It is deeply disappointing that the Trump administration wants to discontinue direct funding for Energy Star, increase costs for consumers, and make it harder for our country to conserve energy and protect natural resources.”

Sen. Tom Udall (N.M.), the top Democrat on the Senate’s EPA funding panel, said he is “skeptical at best” about Trump’s idea.

“The Pruitt EPA appears determined to undermine the EPA in every way possible, so it’s not surprising that they even took aim at the popular, bipartisan and consumer-friendly Energy Star program,” he said.

The program’s backers are also worried that switching to a reliance on industry funding would erode its standing as an objective certification.

“One of the main strengths of the Energy Star program has been independence and the integrity that the government brings,” said Noah Horowitz, director for energy efficiency standards at the Natural Resources Defense Council.

“If Energy Star is dependent on industry funding, that could create some difficult situations where the independence of the program could be challenged.”

But conservative advocates who want the government out of the energy efficiency business say Trump’s proposal is a step in the right direction.

“If companies want to contribute some sort of fee to fund the general awareness of the savings associated with energy conservation, that’s fine,” said Nick Loris, an economist at the Heritage Foundation.

“I would still question why it needs to be overseen by the federal government in an era when we have more access to information than ever for when companies want to promote their energy efficient appliances.”

Loris conceded that the $42 million price tag for Energy Star is not the main driving factor behind his opposition. He said the government simply has no place in advocating for energy efficiency.

“I think there’s a whole range of reasons why a household may not choose to purchase the most energy efficiency light bulb or appliance or invest in energy efficient windows,” he said. 

Myron Ebell, director for energy and environment at the Competitive Enterprise Institute, agreed that Trump’s proposal is a good first step. 

“The companies that benefit from Energy Star labeling should pay for the program,” he said. “The next step would be to privatize Energy Star. There are many similar successful programs funded by the affected industry that provide independent testing, monitoring, and labeling of products.”