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NEMA Responds to Light Bulb Standard Rollback

NEMA Responds to Light Bulb Standard Rollback

The National Electrical Manufacturers Association (NEMA) is responding to this week’s news that the Department of Energy is considering a rollback of certain light bulb standards that are scheduled to go into effect next year.

NEMA’s General Counsel Clark Silcox wrote a blog for the NEMA website, which NEMA sent to tED magazine and asked that it be published.  We are publishing the entire blog for you to read.

 

The Lighting Revolution That Will Not “Rollback”

By Clark Silcox, NEMA General Counsel

There is a revolution in lighting underway, and it is being led by lighting consumers, retailers, and manufacturers.  We have reached the energy savings goals for the standard light bulb sought by Congress in 2007.  The tipping point has already occurred, and there is no turning back. It is not about to be “rolled back” by government regulation as a few have mistakenly argued.

Our colleagues in the energy efficiency advocacy community are asserting that the Department of Energy (DOE) is rolling back energy savings through a proposal to rectify a significant prior legal error made by DOE in 2017 and realign its regulatory actions with the limited legal authority that Congress assigned to DOE in regulating general service lamps.

While it is true that DOE “may not prescribe any amended energy conservation standard that increases the maximum allowable energy use, or . . . decreases the minimum required energy efficiency,” that is not what is occurring here.

What is really happening?  Let us shine a light on this.  There are three major problems with the “rollback” claim.

First, the claim assumes that what DOE did in 2017 by broadly defining general service lamps to include light bulbs that are not general service lamps was legal.  It was not.  You cannot illegally “rollback” from a place that Congress has effectively said you cannot legally stand on in the first place.  If it were otherwise, that would unconstitutionally subordinate Congress to federal agencies like the DOE.

Second, the claimed energy savings that are purportedly being lost are based on bad numbers.  There is singular reliance upon a report published by Lawrence Berkeley National Labs (LBNL), a part of DOE, in January 2017 that relied on outdated data provided to LBNL by DOE that DOE never updated.  The data related to domestic shipments of different types of incandescent lamps and the installed base of those lamps installed in domestic light bulb sockets.  The numbers cited by LBNL — we believe unintentionally — substantially exaggerated the actual numbers, and failed to capture the significant decline in shipments and installation of these incandescent lamps over the past decade due to growing purchases of first compact fluorescent substitutes and now light-emitting diode (LED) substitutes for those types of incandescent lamps.

Third, it assumes that DOE established energy conservation standards for general service lamps in 2017 when it did not.  DOE has twice unambiguously stated that it has not yet established new energy conservation standards for general service lamps:  first in January 2017 and now, in connection with the correction of its prior legal error.  DOE has stated that it intends to make the required determinations that Congress directed it to make.

We explain what is really occurring below.

The Illegally Broad Definition of General Service Lamp

Americans are familiar with the general service lamp.  It is the standard, most common light bulb that screws into the most common light bulb socket, typically found in the home.  It looks like the light bulbs shown here and now comes in four different technologies:  general service incandescent, compact fluorescent, general service LED, and induction.  In 2007, Congress specifically directed the Secretary of Energy to determine whether standards for the general service incandescent light bulb should be amended or not amended; Congress also asked DOE to look at whether standards for the other technologies of general service lamps should be amended or promulgated for the first time.  And Congress stated that the Secretary could “consider” a minimum standard of 45 lumens per watt for all types of general service lamps.  DOE has said that it is moving toward making these determinations as directed by Congress.

What DOE actually did in 2017 was to state that a number of types of light bulbs that Congress expressly stated were “not included” in the definition of general service lamp were now included.  Those lamps are included among the types of specialty light bulbs shown here that have special applications, sizes, and bulb shapes.  Specifically, DOE singled out the incandescent reflector lamps, a “directional” light bulb commonly known as a “spot” light or “flood” light that is used to direct light to a specific area, small decorative light bulbs that come in the shape of a candle flame, small round globe shape lamps, and tubular shape light bulbs that are commonly used in orchestra music stands and furniture display cases.  In addition, DOE included light bulbs that will not screw into the common general service lamp socket because they have smaller candelabra lamp bases and intermediate-size lamp bases or lamp bases that come in the shape of a plug or pin that go into the wall, ceiling or floor plug receptacles.  Congress never had these other types of light bulbs in mind for regulation as general service lamps.  To the extent the alleged “rollback” of energy savings relies upon the elimination of incandescent versions of these specialty lamps by virtue of an illegal definition of general service lamp — and it does — the claim is not cognizable.

The Claims of Energy Savings are Exaggerated

In the course of the general service lamp rulemaking during 2014-2017, DOE restrictively interpreted a congressional Appropriations Rider that limited its ability to spend appropriated funds to “implement or enforce the [energy conservation] standards” for certain incandescent lamps so that it could not research, collect or even look at data and other information about those lamps.  Accordingly, DOE was flying “data blind” concerning general service incandescent lamps and other incandescent lamps.  Even if a citizen submitted information about incandescent lamps to DOE, DOE would not look at it.  NEMA submitted incandescent light bulb shipment data to DOE, and DOE refused to consider it.

The significance of this restrictive interpretation by DOE — to which NEMA and our NGO colleagues in the energy efficiency community mutually objected to — was that DOE was not tracking a significant economic event that was occurring:  rapid consumer adoption of LED lighting technology that was leading an even more rapid decline in shipments and installations of incandescent lighting than had been underway since 2003.  In the case of the general service incandescent lamp, we now know that DOE was tracking the decline of the general service incandescent light bulb, but it just did not capture the extent of that decline, particularly in more recent years.  And DOE’s estimates ended in 2015 and failed to capture the steeper fall in 2016 and 2017 and now, 2018.  American consumers, retailers, and manufacturers have beaten DOE to the regulatory punch so that by the third quarter of 2018 the general service LED light bulb represents about 65% of light bulb shipments, and the general service incandescent lamp represents a little over 25%.  Now approximately 75% of general service lamp sockets are estimated to be occupied by longer life compact fluorescent, and general service LED light bulbs.  What this means is that government regulation will achieve less energy savings than DOE could have forecasted just a few years ago, because the market has already made the more significant move.  And this trend will only continue to 2020 and beyond.

With respect to the light bulbs that were not general service lamps that LBNL included in its report, there was a similar problem with respect to the data.  Energy consumption (and energy savings) is measured in terms of the estimated number of lamps installed in sockets.  DOE uses an algorithm for that estimate that not only relies on lamp shipments but includes assumptions about the life of a light bulb and how long it resides in a socket before the light bulb is replaced.  There is nevertheless a relationship between light bulb shipments and the number of those light bulbs installed.  The higher the shipments for a type of lamp, it is fair to say, the more units of that bulb that are installed.  The opposite is true when shipments are falling.  DOE’s figures for incandescent reflector lamp shipments exceeded what manufacturers were actually selling by almost a factor of three, and LBNL’s estimates of the installed base of incandescent reflector lamps were correspondingly exaggerated.    And DOE’s data estimated that shipments of incandescent reflector lamps were flat or growing slightly when in fact they were falling.   In 2018, NEMA expected incandescent reflector lamp shipments to be less than a third of what DOE incorrectly estimated just a few years ago.  Part of the reason for this market decline was DOE’s higher energy efficiency standards for certain incandescent PAR and R reflector lamps that required infrared technology and drove the cost of those lamps higher and rendered LED reflector lamps more competitively priced as the price of all LED reflector lamps was falling.  If there were as many incandescent reflector lamps in the installed base of sockets consuming electricity that LBNL cited, NEMA members would be selling a lot more incandescent reflector lamps, and they are not.  Again, American consumers, retailers, and manufacturers have beaten DOE to the regulatory punch.  Regulation will achieve less energy savings than DOE could have forecasted because the market has already made the more significant move.  And this trend will only continue to 2020 and beyond.

The same is true concerning the other specialty incandescent lamps like decorative bulbs and tubular bulbs that DOE illegally tried to lump into the general service lamp category.  Only recently, in its proposed rule, has DOE acknowledged that “NEMA shared data indicating that sales of these lamps have been declining, contrary to DOE’s estimation.”

DOE has not yet established new standards for general service lamps

Our colleagues in the energy efficiency community believe DOE has already established a 45 lumen per watt energy conservation standard for general service lamps and the effect of that standard will be to eliminate incandescent lamps.  DOE said in January 2017 that it had not done so, and it recently reiterated what it unambiguously said previously.  We have previously noted that DOE was not legally obligated to establish a 45 lumen per watt standard.  DOE has stated that it is moving toward determining whether to amend or establish new standards for general service light bulbs as Congress expected it to do.  NEMA expects DOE to meet its congressional obligations in the near future.

A critical assumption of the erroneous claim made by our colleagues in the energy efficiency community that DOE is “rolling back” energy savings for light bulbs is that DOE already established new standards for general service lamps and therefore you can measure the energy savings that is purportedly lost by DOE’s proposal to legally rectify its prior illegal definition of general service lamp.  That assumption is not factually correct.

Another fault of the “rollback” claim is the erroneous perception that consumers need to be coerced into buying LED light bulbs to secure greater energy savings.  As one of our colleagues in the energy efficiency community said recently, “[C]hanging consumer behavior is critical” to accelerating LED growth. NEMA would agree that there are instances where consumers do not fully appreciate that the cost of ownership for a more efficient appliance offsets higher initial acquisition costs, but the lightbulb experience over the past four years utterly discredits the application of that thesis to general service lamps.  The consumer experience with CFLs just a decade ago has not been repeated.  General service LED lamp sales were near zero just a few years ago and now exceed halogen incandescent sales by about two-to-one.  The reasons for that are simple:  (1) manufacturers innovated cost reductions to make the two competitive in price; (2) manufacturers competed and innovated to make the LED light bulb a quality product; (3) consumers understand the energy savings and cost of ownership because of improved FTC package labeling requirements and retail-manufacturer collaboration to provide informed sales assistance in the aisles of retail stores; and (4) state utility incentive programs to help educate consumers about LED bulbs supported by EPA’s Energy Star program.  We are not experiencing a market failure based on consumer ignorance.

It bears repeating what we said in a previous blog last year:

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.


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