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Bush's first energy rule: efficient enough?

The proposal for transformers would save $9 billion. Efficiency advocates say it should do more.

Long accused of dragging its feet on raising energy-efficiency standards for products, the Bush administration has proposed its first such standard.

Its proposal attracted little attention, since it didn't mean better dishwashers or more fuel-efficient cars. Instead, it deals with transformers – those ubiquitous gray canisters that hang from utility poles and could save the nation billions of dollars if they were upgraded.

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The question is how extensive the upgrade should be. Besides saving an estimated $9 billion in electricity costs, the Bush administration standard, unveiled Aug. 4, may also eliminate the need to build 11 new power plants over a 28-year period, the Department of Energy (DOE) reports. They would also reduce pollution and boost the reliability of the nation's electric grid.

But instead of celebrating the proposal, energy and environment advocates say DOE has opted for "a very weak proposal" – one that fails to save additional mountains of energy and pollution that a slightly tougher regulation would achieve for about the same cost. The tougher standard would save much more than the DOE proposal over 28 years – about 120 billion kilowatt hours of electricity – or enough energy to power 10 percent of US households for a year, they say.

"The new Department of Energy proposals leave billions in savings just sitting on the table," says Steven Nadel, executive director of the American Council for an Energy Efficient Economy in Washington.

Efficiency advocates: Why stop there?

By comparison, the higher standards Mr. Nadel and others support would require a 12-to-22-year period for the more efficient units to pay for themselves through energy savings, the DOE estimates. That's compared with a 4-to-18 year payback period for the Bush proposal. For that extra cost, utilities and consumers would save $11 billion in electricity costs and eliminate the need for 16 power plants.

If those power plants were all coal-fired, as is the current building trend among utilities, the tougher standards would mean 75 million fewer tons of carbon dioxide greenhouse gas and 20,000 fewer tons of smog-forming oxides each year, over and above the DOE's proposed standard.

"I just don't understand why they're choosing this lesser standard when by their own analysis it pays to go with the higher one," says David Goldstein, co-director of the energy program for the Natural Resources Defense Council, a New York-based environmental group.

But DOE officials say voluminous analyses of a half-dozen possible standards arrived at the one standard that meets all the varied criteria laid down by Congress in the Energy Policy Act of 1992.

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"We start out wanting the most efficient standards," says Ron Lewis, who oversees energy efficiency standards development at the DOE. "But we've got to go through these reviews ... and the analysis leads us to the level we've enunciated."

Of course, unhappiness with the Bush administration over lagging energy efficiency efforts is nothing new. The Clinton administration by this time in its tenure had produced at least a half dozen major energy-saving standards and many other lesser mandates, Nadel says.

Frustration peaked last September when New York and 14 other states sued the DOE for falling years behind its congressionally mandated schedule for new energy-efficiency standards. Twenty-two of those standards are overdue for review and strengthening, the ACEEE says. In response, the DOE in January unveiled a revamped schedule for proposing standards.

New standards needed now more than ever

Transformers are the first such proposed standards to emerge. And that may be a good thing – because the nation's electric grid, and particularly its transformers, are under more stress than ever.

Though the recent heat wave didn't cause large-scale blackouts as feared, a slew of smaller outages popped up across California and other states, many attributed to overheated transformers.

In late July, nearly 1,400 transformers blew in Northern California, leaving more than 1 million people without power, local news media reported.

Big transformers at power plants convert electricity to high voltages for efficient transmission over long distances, then smaller neighborhood distribution transformers reduce it back to levels safe for home use.

Higher-standard transformers are more expensive, heavier, and cost more to install, but also bear up far better under peak loads and make the grid more reliable, analysts say. That's good, because the nation could see a significantly higher rate of older transformers failing than in years past, says Alison Silverstein, a power industry consultant.

"We need to hurry up and push through these new standards," she says. "There are already more efficient transformers out there today. My hope is the utilities are installing those – and not just the biggest, dumbest, cheapest piece of steel out there."