STANDARD LIGHT BULBS AND THE RULE OF LAW (PART THREE)

STANDARD LIGHT BULBS AND THE RULE OF LAW (PART THREE)

This is the third of three posts on the regulation of general-service lamps pursuant to the Energy Independence and Security Act of 2007. Read the first and second here. 

Did Congress mandate a 45-lumen-per-watt standard for general service-lamps by 2020?

No.  The language of the statute and its legislative history confirm that Congress did not mandate that all general-service lamps meet a 45 lumen-per-watt energy conservation Standard by January 1, 2020.

The underlying legislation that drives regulatory action for the most common general-service lightbulb* is the Energy Independence and Security Act of 2007, commonly referred to as EISA.  The legislative precursor to EISA was a bill originating in the House of Representatives, H.R. 3221, that included a provision that would, after January 1, 2020, ban the sale of general-service lamps that did not meet a 45 lumen-per-watt Standard.  H.R. 3221 passed the House of Representatives but died in the Senate.  That marked the end of the consideration of federal legislation mandating a 45 lumen-per-watt energy conservation Standard for general-service lamps by January 2020.

Congressional concern over a bill mandating a 45 lumen-per-watt Standard for general-service lamps focused on the fact that the only general-service lamp then known to meet that Standard was the compact fluorescent lamp (CFL), a product that was not widely popular with consumers despite the fact that manufacturers had improved the CFL’s performance in recent years.  Importantly, the general-service LED lamp did not exist in 2007:  There  were technical hurdles remaining to make what is inherently a “directional” lighting technology work for an “omnidirectional” general-service light bulb application; secondly, no one knew how much such a lamp would cost if it the technical hurdles were overcome and it actually came to market.  The fact that the general-service LED lamp is a commercial success more than a decade later, now outselling the general-service incandescent lamp, is not something that Congress knew or expected in 2007.

To apply our current knowledge of facts about the commercial success of the LED lamp to explain beliefs about the past (what Congress intended in 2007) suffers from what Harvard Psychologist Daniel Schacter calls the “consistency bias,” one of the Seven Sins of Memory.  The flip side of the consistency bias is the “hindsight bias” where we reconstruct the past to fit the present.  Those biases may be influencing some who believe Congress mandated a 45 lumen-per-watt Standard for general-service lamps by January 2020.

In September 2007, the Senate took up its own energy efficiency bill, S.2017, and within that bill’s statement of purpose, the Senate Energy and Natural Resource Committee stated that it was “in the national interest to … (A) establish the efficiency requirements to ensure that replacement lamps will provide consumers with the same quantity of light while using significantly less energy; [and] (B) ensure that consumers will continue to have multiple product choices, including energy-saving halogen, incandescent, compact fluorescent, and LED light bulbs. . .”  This statement of purpose indicates that the Senate intended to maintain all general-service lamp technologies, not to mandate a regulatory outcome that potentially left only one technology in the market.

Section 102(c) of S.2017 included Standards for the general-service incandescent lamp that later became part of EISA and became effective 2012 through 2014. The halogen incandescent lamp that had only recently been developed would meet these new Standards.  S.2017 also included a clause that authorized the Secretary of Energy in two future Department of Energy (DOE) rulemakings to include “consideration of a minimum efficacy Standard of 45 lumens-per-watt in both rulemaking procedures.”  This clause was also included in EISA.  However, to give “consideration” to something is not a mandate.  Courts have consistently opined that “to consider” means “to think about,” and those courts have cautioned that “to consider” does not mean “to ‘adhere to,’ ‘be bound by’ or ‘follow.’”   What Congress did expect the Secretary of Energy to do in both of the future rulemakings was to determine — one way or the other — whether the EISA 2007 energy conservation Standards for general-service incandescent lamps could be amended to be made more stringent than Congress adopted in 2007.  This would require the Secretary of Energy to evaluate whether higher Standards for general-service incandescent lamps were economically justified and technologically feasible.  Moreover, the fact that Congress’ words in EISA contemplated that DOE could decide not to amend Standards for general-service incandescent lamps confirms that Congress was not mandating a 45 lumen-per-watt Standard that might ban that lamp.

That Congress did not mandate a 45 lumen-per-watt Standard in 2020 that would ban the general-service halogen incandescent lamp is further confirmed by two additional provisions of EISA.  In the second rulemaking after 2020, Congress specifically authorized the DOE to determine whether to amend Standards for general-service incandescent lamps.  Why would Congress ask DOE to amend Standards for general-service incandescent lamps if it was mandating DOE ban those very lamps with a 45 lumen-per-watt Standard in 2020?  This legislative requirement of a second rulemaking is patently inconsistent with a mandatory 45 lumen-per-watt Standard effective in 2020.

Second, Congress also asked DOE in this second rulemaking to again consider a 45 lumen-per-watt Standard.  Why would Congress direct DOE to do that if it was mandating DOE adopt a 45 lumen-per-watt Standard in 2020?  This legislative requirement for a second rulemaking is also patently inconsistent with the idea that Congress intended to ban the incandescent lamp in 2020 by mandating a 45 lumen-per-watt Standard.  Congress was clearly anticipating that general-service incandescent lamps would remain in the marketplace after 2020.

In the first of the two general-service lamp rulemakings, the DOE has yet to make a determination whether or not Standards for general-service incandescent lamps should be amended.  In the wake of EISA, several NEMA Members attempted to make a general-service incandescent lamp that met the EISA Standards.  They could not:  either the lamp was not commercially viable because the cost was too high without comparable energy savings, or because the technical design impaired the life of the lamp or presented safety problems for consumers.   In light of that, it does not appear likely that DOE will be able to amend general-service incandescent lamp Standards that are more stringent than Congress’s EISA Standards.  DOE still has to make that call.

The specific words used by Congress in EISA and the structure of EISA’s lighting regulation provisions negate a statement made by the DOE in January 2017 that Congress exhibited a “preference” for a 45 lumen-per-watt Standard in January 2020.  Congress exhibited no such preference.  As the discussion above reveals, Congress’s true preference is for DOE to investigate whether general-service incandescent lamps could be made more efficient than the minimum Standards that Congress adopted in EISA.  That was the first and primary requirement for both of the general-service lamp rulemakings authorized in EISA.  Furthermore, to ask that DOE “consider” a 45 lumen-per-watt Standard is hardly a preference.

Congress did speak one more time in EISA about a 45 lumen-per-watt Standard.  EISA provides that if DOE fails to complete a rulemaking for general-service lamps in accordance with EISA’s requirements, or if DOE’s final rule does not produce energy savings that are greater than or equal to 45 lumens-per-watt, then the Secretary had to prohibit the sale of any general-service lamp that did not meet a minimum Standard of 45 lumens per watt.  This is the so-called “backstop” provision.

Some argue that the backstop required the DOE to amend Standards for general-service incandescent lamps by January 1, 2017.  However, that is not what the statute says.  EISA only required DOE to do one thing by January 1, 2017: “If the Secretary determines that the Standards in effect for general-service incandescent lamps should be amended” then DOE had to publish a rule in the Federal Register amending those Standards by January 1, 2017.  As noted above, DOE has not made that determination yet, and the only evidence in the DOE rulemaking record is that an amendment cannot be justified at this time.

If DOE should conclude that it cannot amend Standards for general-service incandescent lamps, then DOE had no obligation to publish anything in the Federal Register by January 1, 2017, and the purported 2017 publication deadline triggering the “backstop” is irrelevant.

A “backstop,” by definition, is a “last resort,” and contrary to the DOE’s January 2017 statement, the backstop cannot be a preference.  A backstop is something to be avoided like a wild pitch.

However, there is still another statutory requirement that must be satisfied to avoid the backstop.  Any rule that DOE adopts – even if it does not amend the Standards for general-service incandescent lamps — must still produce energy savings that are greater than or equal to 45 lumens per watt before the Secretary can ban the sale of general-service incandescent lamps by January 2020.   A preliminary analysis submitted to the rulemaking record by NEMA in early 2016 showed that the marketplace was likely to meet that energy savings goal without amending incandescent lamp Standards.  More recent data now demonstrates that NEMA’s preliminary analysis was conservative.  2018 domestic sales of energy-efficient, general-service LED lamps appear to be headed toward exceeding domestic sales of general-service incandescent lamps and CFLs by approximately two-to-one by the end of the year.  Moreover, while sales of CFLs are shrinking dramatically, the substantial installed base of CFLs and LEDs is generating energy savings for the class of general-service lamps in sockets (including the halogen incandescent lamps) beyond what a 45 lumen-per-watt lamp in every socket would generate.  It would be a perverse interpretation of the statute’s backstop clause to conclude that the statutory last resort was triggered when Congress’s energy-savings goals are already being met.  DOE needs to examine this issue and reach an interpretation of EISA that is not at war with itself.

It is clear from the text of EISA, however, that Congress did not mandate a 45 lumen-per-watt Standard effective in January 2020 and that a 45 lumen per watt Standard was something to be avoided, not preferred.

NEMA and its entire lighting manufacturer membership base have supported consumer adoption of, and the market transformation to, energy-efficient lighting.  NEMA has done this through technical Standards development activities that are designed to ensure that consumer satisfaction with the new LED is and remains high, and educating the market about the energy savings potential of more efficient lighting.   Our Members have pushed the innovation envelope for LED lighting and brought down the cost of the LED light bulb to a level that enjoys consumer acceptance.  Current sales demonstrate unequivocally that NEMA Members and consumers are driving the market to more energy-efficient lighting installations in a way that was never imagined just a few years ago.

There are still U.S. factories with hundreds of workers who produce incandescent and fluorescent lighting;  there are some lighting product applications that have no alternative technological option, or for which the consumer prefers an incandescent bulb, and there are production assets that will be stranded by a government mandate that bans certain light bulbs.  A sales ban would force thousands and thousands of retailers to scrap product from their shelves, and that too is wasteful.  The market is doing an effective job driving lighting producers toward greater energy savings.  This is a marketplace success story, and the market’s success should declare the winners.

* The terms “light bulb,” “bulb,” and “lamp” are used interchangeably in this post.


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