WASHINGTON – Senator Susan Collins, Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, on Wednesday sent a letter to the heads of two federal agencies, requesting that they provide a plan of action to fix lax oversight uncovered in the Energy Star certification process.

Senator Collins, R-Me., initially requested that the Government Accountability Office conduct an investigation of the Energy Star program, asking for an examination of the program’s oversight and processes by which it awards energy-efficiency status to companies and products. What the GAO uncovered, however, was that the program is bereft of oversight mechanisms and run largely on self-certification, with far too much reliance on energy-efficiency claims from the manufacturers and far too few independent, third-party verifications.

The following is the text of the letter that the Senator sent to the heads of the Environmental Protection Agency and the Department of Energy, which jointly operate the Energy Star program:

March 31, 2010

The Honorable Steven Chu
U.S. Department of Energy
1000 Independence Avenue, S.W.
Washington, D.C. 20585

The Honorable Lisa Jackson
Environmental Protection Agency
Ariel Rios Building
1200 Pennsylvania Avenue, N.W.
Washington, D.C 20460

Dear Secretary Chu and Administrator Jackson:

As you are aware from a recent investigation by the Government Accountability Office (GAO), the Energy Star program has shown itself to be vulnerable to fraud. The Energy Star program is a valuable method of informing American consumers about a wide array of energy-efficient products on the market, but it must be a trusted source of information to effectively accomplish this important task.
The disappointing and alarming findings in the GAO report, combined with recent reviews by the Inspectors General for both the Department of Energy (DOE) and the Environmental Protection Agency (EPA), demand an urgent and strategic response to improve this program.

When I asked GAO to investigate whether Energy Star certifications were being prudently awarded to both companies and products based on vetted energy-efficiency claims, I wanted to ensure that the program’s oversight safeguards were adequate to protect both consumers and taxpayers. GAO’s investigation unfortunately demonstrates that the Energy Star program currently provides few safeguards and little oversight of manufacturers’ energy-efficiency claims. Manufacturers’ claims are often taken at face value with little or no independent third-party verification.

As the GAO report demonstrates, the program’s lack of rigorous internal controls exposes consumers and taxpayers to untenable levels of risk. This leads to taxpayers being fleeced twice, as consumers often elect to pay more for Energy Star-rated products in order to achieve energy savings and are also footing the bill for taxpayer-funded credits and rebates to induce people to buy Energy Star certified products. At the same time, legitimate manufacturers of energy-efficient products may be undercut in the marketplace by companies that use the lax certification process to gain Energy Star status.

To respond to the results of this GAO investigation and others, DOE and the EPA must undertake significant and swift changes to address identified oversight gaps and to help restore public confidence in the Energy Star label. I am pleased that both agencies plan improvements to the certification process, including enhanced verification of energy-efficiency claims. Both agencies also are considering requiring that all products undergo pre-qualification testing, in accredited laboratories, before being eligible for certification under the Energy Star program.

I appreciate your timely response to the GAO investigation and request that you provide to the Committee a detailed plan, outlining the specific testing improvements and proposed time frames for completing these reforms. If other changes or adjustments are under consideration, please provide a detailed explanation of those proposals as well.

Please provide these plans to my office no later than April 16, 2010. Your prompt efforts to improve the Energy Star program are vital to ameliorate the challenges that plague the program. Otherwise, it cannot fulfill its important energy-saving mission and provide the confidence necessary to help consumers make informed choices.
If you have any questions please contact my Committee staff at (202) 224-4751.

Susan M. Collins
Ranking Member