NEMA Currents : Regulation

The Politics and Policy of Job Creation

Owen, Sarah — Wed, 18 Nov 2009 04:00:00 GMT

This week House and Senate leaders announced that Congress will do something to respond to rising unemployment before they adjourn for the year. I don't know any economist -- or anyone else, for that matter -- who would argue that the current 10.2% unemployment rate and lack of job creation in this economic recovery is NOT a problem. Quite the contrary - workers and their families are very concerned about the availability of jobs, and employers are concerned not only about being able to keep the workers they currently employ, but also being able to grow the workforce when practicable.

What will Congress' answer to the unemployment situation be? Some of the suggestions have been out there a while: another extension of unemployment benefits, extending certain individual tax breaks, giving tax credits to small businesses, providing aid to state Medicaid programs, increased government investment in infrastructure projects, etc. And while there may be some merit and value to these suggestions, one has to wonder: what is the appropriate role for government to play in creating jobs?

The National Chamber Foundation and the American Enterprise Institute sponsored a forum this week which examined the "Challenges to Creating 20 Million New Jobs: What is the Proper Role of Government?" Some of the panelists' general comments:

You don't grow the economy by increasing taxes.
You don't grow the economy by increasing uncertainty (e.g., potential new government mandates on businesses).
Increased regulation, higher taxes, and higher costs (health care, energy) will make job creation more challenging in this recovery.
Job creation is most robust when the government limits its interference in the free market and allows the private sector to lead the way.
The American people are concerned about jobs, but they care more about freedom, opportunity and enterprise.

Over the next few weeks, Congress should give serious thought to what government policies -- if any -- would actually result in jobs being created and unemployed Americans returning to work. And while they're at it, they should also carefully consider the effects certain high profile legislation (e.g., health care reform, climate change, the so-called "Employee Free Choice Act") could have on job creation.

Congressional Unveiling of Major Energy Savings and Carbon Reduction...

Hansen, Dain — Tue, 03 Nov 2009 14:22:00 GMT

Do you want to save 4.48-7.95 million metric tons (MMT) of carbon annually (equivalent to removing approximately between 3-5.4 million automobiles annually)?

Do you want to save 25 to 42 Terawatt hours (billion kWh) per year (equivalent to 3 to 6 nuclear power plants or 6 to 10 coal-fired plants)?

Do you want to drive innovation and spur technology?

If you do, see NEMA’s newly unveiled consensus agreement outdoor lighting standard.

Today, Senator Bingaman, Senator Murkowski, Senator Pryor, Representative Harman, Representative Upton, NEMA’s President and CEO Evan Gaddis, American Council for an Energy-Efficient Economy and the National Resources Defense Council announced a consensus agreement for federal outdoor lighting standards. For the first time ever, pole-mounted outdoor lighting will have federally mandated efficiency standards.

For many months, NEMA has led negotiations with manufacturers, energy advocates, utilities, lighting designers and others to develop thoughtful and thoroughly vetting consensus standards. As you can see from the statistics mentioned, this agreement will have a monumental impact on energy savings, carbon reduction and technological innovation.

Another "Baby Bottle" finding . . . . Whom do you believe?

Kohorst, Mark — Fri, 10 Jul 2009 19:57:00 GMT

This morning brought an announcement of another “official” government finding concerning the hazards of bisphenol A (BPA), a chemical building block used primarily to make polycarbonate plastic and epoxy resins. If you’ve paid even minimal attention to current events the past few years, you know that BPA, while enormously useful, effective and versatile, is quite controversial because of its use in food and beverage packaging and plastic baby bottles. Studies performed in animals have suggested that BPA acts like the female hormone estrogen, and is linked to cancer and infertility. Consequently, activists have campaigned worldwide for its prohibition and various governments have enacted sales restrictions.

Now, however, the principal government guardian of public health among Canadians, Health Canada, has completed a study and concluded that exposure to BPA from jarred baby food products, water bottles, and other food packaging items is well below levels that would pose a threat to human health. In water bottles, the average concentration of BPA detected in the study was 1.5 parts per billion. At that rate, an adult weighing 130 pounds would have to consume about 264 gallons of bottled water in one day to approach Health Canada's tolerable daily intake. Not a very realistic scenario.

We can add this regulatory “acquittal” of BPA to those provided earlier by the European Food Safety Authority, German Federal Institute for Risk Assessment, Danish Environmental Protection Agency, French Food Safety Authority, the Swiss Office for Public Health, and Food Standards Australia-New Zealand. Nevertheless, the drumbeat will continue in the NGO community that BPA must be eliminated to “protect the children.” Responding to market pressures, manufacturers are increasingly supplying non-BPA alternatives and parents who prefer to err on the side of caution are free to seek them out. More and more, however, it appears safe to allow BPA to fall further down our list of modern day ‘hazards” while we focus our attention on avoiding things that could really do us harm.

Fact Versus Fiction on Energy Storage Systems

Schweitzer, Eric — Thu, 30 Apr 2009 21:45:00 GMT

Often, important emerging technologies get caught up in misconstrued facts and misunderstandings of capacities and roles in an already technology-driven and confusing world. An example of this can be found in a recent op-ed in the Washington Post, "Getting Real on Wind and Solar" by James Schlesinger and Robert Hirsch. It's great they included a reference to energy storage systems (ESS) as a necessary component of the smart grid architecture for renewable energy. And they're right that the wind doesn't always blow, the sun doesn't always shine -- so having a stockpile of energy that can be tapped into on demand, and especially during high demand or "peak demand" hours, is very important to ensuring adequate energy is always available. But their main thesis that renewable energy can't be pursued without adding coal-based utility resources or without using hydroelectric dams as energy storage tanks is wrong.

Using today's readily available technologies, ESS can run without the support of a hydroelectric dam or a coal based utility. The NEMA Energy Storage Council includes companies that produce flow cell batteries, flywheel generators, batteries (lithium ion, lead acid, lead carbon, sodium sulphur, zinc bromine, vanadium redox, etc), thermal systems, concentrated solar panels; even Plug-in Hybrid Electrical Vehicles that show great potential as a distributed mass ESS. The list goes on and on and it will continue to grow as existing and emerging technologies vie for the top spot. While stationary (flywheel, flow cells, etc.) ESS does require a larger footprint in terms of space requirements and can be used in some cases as "spinning reserves" for hydroelectric dams; their value must not be unappreciated or misrepresented. Both stationary and mobile ESS (Plug in Hybrid Electric Vehicles) provide a vastly untapped revolutionary resource with the ability to alleviate our present and rapidly growing energy crisis and ensure a future success towards building a "smart grid." ESS can provide solutions to current grid capacity issues, residential/ commercial/ industrial/ military back-up generation, load leveling, frequency response just to name a few."

It's important that NEMA continue to serve the role of advocate during these organizational periods where stakeholders grapple with the feat of learning where to go to for accurate and timely information.

Crush for Credit - Rebate Program for NEMA Premium Motors

Hansen, Dain — Thu, 16 Apr 2009 16:45:00 GMT

Before Congress left town, a NEMA advocated provision was adopted into the U.S. Senate's new energy bill. Senator Blanche Lincoln (D-AR) offered an amendment that would create a NEMA-Premium "crush for credit" motor rebate program. The Energy Independence and Security Act of 2007 (EISA) set new efficiency standards beginning in December 2010, that mandates motor efficiencies.

If enacted into law, this motor rebate program would provide a $25 per horse power rebate for the purchase of NEMA premium motor. Additionally, the program would also provide a $5 per horse power rebate for the disposal of the older inefficient motor. This amendment allows $350 million to be spent on this rebate program.

An Unheralded -- but Great -- Pick for OIRA

golds — Tue, 03 Feb 2009 13:57:00 GMT

Much media attention has been focused recently on President Obama's picks for his cabinet, most notably Bill Richardson, Eric Holder, and Tom Daschle. But one nomination has flown under the radar -- that of Cass Sunstein to head the Office of Information & Regulatory Affairs (OIRA). Read the Revesz/Livermore "Viewpoint" in this week's Business Week and you'll see that the business community should be pleased with the selection of this constitutional lawyer schooled in law and economics.

OIRA is a relatively small office of economists tucked into OMB. It's job is to do a cost-benefit analysis on significant regulations -- that is, to assess whether these costly rules generate enough public benefit to justify their implementation. Thus, the office has enormous influence on how punitive the rules can be coming out of EPA, OSHA, FTC, CPSC, and the like.

Some label Sunstein a University of Chicago conservative (based on his application of economics to law), and others call him a liberal (because of his defense of regulation). The fact is, he's both and neither. Here's what Revesz and Livermore state in their Business Week op-ed:

Sunstein will probably favor approaches that shift more power to the private sector, but he will expect big results in return. The industries that have spent years developing competence in negotiating the regulatory labyrinth currently have a comparative advantage. Sunstein almost certainly will shake things up on issues from toxic waste to workplace safety, and companies that thrive in the status quo system are likely to lose out.

We may be in for some interesting times ahead with an activist Congress and new blood in the regulatory agencies, but at least the new OIRA boss understands how markets work.

Energy Storage Technology Is Vital For "Smart" Grid Efforts

Schweitzer, Eric — Wed, 21 Jan 2009 17:08:00 GMT

NEMA is taking the lead in making Smart Grid and Energy Storage technologies a reality. The NEMA Energy Storage Council (ESC) has held successful meetings where attendees have drafted a list of application categories that help define where Energy Storage (ES) and Distributed Generation (DG) technologies should play a role. The NEMA ESC consisting of manufacturer, utility and government representative stakeholders further established and tasked a NEMA ESC Technical Committee (Stationary and Mobile Subcommittee) to identify specific action items aimed at facilitating the promotion of ES/DG technology to commercial and non-commercial markets. The result of the NEMA ESC Technical Committee meeting January 15, 2009 was an agreement to present a proposal for an all encompassing ES/DG demonstration program to prove the criticality of ES/DG technologies to the Department of Energy. It was fully agreed and can not be understated here that without the complete integration of ES/DG technologies to our ailing National electricity grid there can be no realized “Smart Grid.” Through this proposed demonstration program ES/DG manufacturers aim to prove the essentiality of ES/DG technologies to Smart Grid functionality and to demonstrate to the Government and Federal Agencies that ES/ DG technology can drive increased grid reliability, further reduction of carbon emissions, advanced T/D/G (Transmission/ Distribution/ Generation) capability, islanding capability, renewable energy penetration, interconnection realization, voltage support for public transportation systems, remote area power system capability (RAPS), zero net energy building capability, energy security, economic studies/ cost benefit analyses, and where electrical standards are required. The NEMA ESC has asked the Government Relations Department at NEMA to immediately get the message to Capitol Hill, The Obama Administration, DOE, FERC, NERC and other governmental agencies that NEMA is leading an effort to ensure Smart Grid success in addition to facilitating Energy Storage tax incentives equivalent to those being awarded to renewable technologies such as wind, solar, and hydro. For more information please contact Eric Schweitzer, NEMA Technical Program Manager at Eric.Schweitzer@NEMA.org

Kudos to the European Commission on Revising the Metric Labeling Directive

Scolnik, Alvin — Wed, 21 Jan 2009 13:23:00 GMT

We've just gotten word from our friends in Europe that the EU metric labeling directive has finally been modified FROM requiring all products (and product packaging, training materials, other collateral materials, etc.) entering the EC after December 31, 2009 to use only metric measures and nomenclature TO an indefinite extension of the current practice of permitting the use of "supplementary indications." One caveat is that the decision calls for a review of this decision in 10 years to see if there has been any impact on European markets. But our friends in Europe think it very unlikely that this issue will come up again unless there truly is a negative impact on European businesses.

This business-friendly action is long overdue and very welcome. NEMA and the NEMA Codes and Standards Committee led a 4+ year effort to convince the EC that the metric-only directive was a bad case of "regulation interfering with international commerce." Working with ORGALIME and other European organizations and business leaders, as well as US trade representatives and other US organizations, NEMA was able to to make the case that "metric only" creates an obstacle to commerce at a time when intense efforts are underway to improve trade and trade relations between the planet's two largest markets. NEMA pointed out that the marketplace should be allowed to determine labeling requirements. Forcing metric-only labeling would have required many manufacturers, both US and European, to carry two inventories--one for metric only markets in Europe and one for US Customary or Imperial units in US markets that do not recognize metric units--a costly requirement estimated by some at more than $300 billion. The European Commission and the members of the European Union have now approved the change and hopefully we will not be hearing about this again for a long, long . . . time.

HR 1 in the New Congress? Bound to be Card Check

golds — Tue, 04 Nov 2008 17:19:00 GMT

Our annual membership meeting, Illuminations Weekend, has come and gone, but the memory of some of the discussions remains -- and in particular, the almost non-stop focus of the CEOs on one issue: "card check," or as US Chamber of Commerce CEO Tom Donohue prefers to call it, "the end of private ballot elections in the workplace." Donohue was frank with the NEMA Board of Governors on Friday, even by his standards. Manufacturing CEOs who do not get involved to kill this initiative shouldn't bother calling Donohue to complain, because they'll deserve what they get.

Pat Cleary, former senior exec at NAM and now a top exec at Fleischman-Hillard, came in on Saturday to teach CEOs how to blog. He too warned the business community about labor's efforts to end secret balloting in the workplace. "This will probably be HR 1 -- the first bill introduced in the new Congress," he predicted.

How bad is the threat of card check? Some smaller companies told me that if enacted there was a distinct possibility they'd pull up stakes and move their operations out of the country. That's because under a card check process, private balloting is as good as dead. Instead of a secret ballot, if they want union organizers can openly confront employees about their position on unionizing. Think there's a possibility of intimidation in that process?

The good news is, labor has overreached. It's been two decades or more since U.S. business has had an issue that was this galvanizing and unifying. NEMA has joined the broad (and growing increasingly broader) Coalition for a Democratic Workplace to oppose the legislation, which will no doubt come up in Congress' first 100 days.

Electrical Deregulation is good only if prices go down

Choinski, Scott — Wed, 11 Jun 2008 16:58:00 GMT

As reported recently in the Washington Times, the District, Maryland, New Jersey, Pennsylvania and Delaware have filed a complaint with the Federal Energy Regulatory Commission (FERC) against PJM Interconnect arguing that electricity auctions resulted in unreasonably inflated prices. The complaint relates to auctions held in 2007 and 2008 to set the price of electricity from June 2008 through May 2011. Regulators say the auctions were not competitive, enabling existing power generators to get unfairly high prices instead of creating new generation as intended. Rules for the grid’s pricing models were drafted to give financial incentives for creating new generation, but that never happened. By filing the complaint, the regulators are hoping that FERC will order relief to consumers in the affected states.

Maryland is still smarting from their experiment in deregulation. When the market was deregulated, electric rates were capped at 1999 levels. When those caps expired in 2006, the customers of Baltimore Gas and Electric Company were hit with a 72% increase in their electric rates sparking outrage from the ratepayers as well as the state government. Ignoring the fact that ratepayers had been paying artificially low rates for 6 years, Maryland has been fighting the increase ever since. This is the 4th time this year that the Maryland Public Service Commission (PSC) has taken action in the wholesale energy market. It is interesting to note that the Chairman of Maryland’s PSC said that there is no evidence PJM broke any regulations.

I am not an advocate for higher electric rates, but one shouldn't pay artificially low rates either. There should be a reasonable rate set. This situation is a warning sign for the future. There is a danger that regulators be pressured politically to keep rates artificially low to the point where utilities eventually will start operating at a loss. This will force them to cut back on maintenance and investment in the grid, which will impact the NEMA members. Ultimately the ratepayer will pay the price from less reliable electric service with more blackouts, brownouts, etc.