Obama's Energy Regulations on Household Appliances Sparks Cost Debate

President Obama's push for higher energy efficiency standards for everyday household appliances has led to more than 20 regulations that one critic says will break the piggy bank and represents government overreach.

The Energy Department says its new efficiency standards for the 26 household products, including microwave ovens, incandescent reflector lamps, washing machines and dryers, will save consumers between $250 billion and $300 billion on their energy bills through 2030.

But Ben Lieberman, an environmental expert at the Competitive Enterprise Institute, says based on history, the regulations "will raise the purchase price of appliances – in some cases more than is ever likely to be earned back in the form of energy savings."

"Worse, several may adversely impact product performance and reliability," he wrote in a blog this week. "There are potentially problematic regulations on the way for virtually every room in the house."

An Energy official told FoxNews.com that the savings estimated by the department reflect the total lifetime cost of a product, not just the initial price increase

---More at link--- www.foxnews.com/politics/2010/09/29/obam...

Hey, I want energy-efficiency everything.  However, where do we get our goals from?  Isn't some geek somewhere crunching some numbers and simulating on some supercomputer cost versus payback?  I don't think 5 years is a big payback for lots of different things.  I would certainly get mad if my microwave kicked the bucket before a couple of years, you know?

Oct 18, 2010 -- 8:27PM, Iwantamotto wrote:

Hey, I want energy-efficiency everything.  However, where do we get our goals from?  Isn't some geek somewhere crunching some numbers and simulating on some supercomputer cost versus payback?  I don't think 5 years is a big payback for lots of different things.  I would certainly get mad if my microwave kicked the bucket before a couple of years, you know?

The problem, as I see it, is not calculating simple payback (you pay X$ more up front and save y$ a year).  That's not a hard calculation, though uncertainty in what energy costs are going to do over the next five years is directly reflected in uncertainty in the calculation.

The thing is, there are "hidden" costs of energy use to society which are not directly reflected in the price of the product.  Things like the environmental cost associated with things such as the gulf oil spill, or coal mining, or climate change. The military costs of stationing forces in places like the middle east to protect the supply line.  The medical costs of treating pollution-aggravated illnesses.  Accelerated R&D costs of alternate fuel development (since fossil fuels cannot last forever).  How do we factor these into simple payback?  At some point (in my opinion) we need to accept that conservation is a good unto itself.  If we had a good way to factor in all these hidden costs (something along the lines of the "carbon tax" which has caused a good deal of contoversy), we could add these to the cost of the product and let the free market take care of things.  Failing that, regulation is an appropriate way to go.

Oct 19, 2010 -- 12:45PM, Ebon wrote:

Oct 18, 2010 -- 7:35PM, Guessses wrote:

Obama's Energy Regulations on Household Appliances Sparks Cost Debate

President Obama's push for higher energy efficiency standards for everyday household appliances has led to more than 20 regulations that one critic says will break the piggy bank and represents government overreach.

The Energy Department says its new efficiency standards for the 26 household products, including microwave ovens, incandescent reflector lamps, washing machines and dryers, will save consumers between $250 billion and $300 billion on their energy bills through 2030.

But Ben Lieberman, an environmental expert at the Competitive Enterprise Institute, says based on history, the regulations "will raise the purchase price of appliances – in some cases more than is ever likely to be earned back in the form of energy savings."

"Worse, several may adversely impact product performance and reliability," he wrote in a blog this week. "There are potentially problematic regulations on the way for virtually every room in the house."

An Energy official told FoxNews.com that the savings estimated by the department reflect the total lifetime cost of a product, not just the initial price increase

---More at link--- www.foxnews.com/politics/2010/09/29/obam... 

TRANSLATION: This is something that might actually help the little guy. Since we here at Fox are dedicated to attacking Obama 24/7 for the crime of existing and being a Democrat, we're going to bring in an industry bootlick to say these changes are terrible since the industry doesn't want to make any changes.

How does regulation that will raise the cost of appliances that are already expensive for the "little guy" actually "help the little guy"?

GC,

There is an accounting concept which considers the "time value" of money and other investments, or the "lifetime cost" of an item.

You should look into and consider that.

Why do you think corporate tax structures take into account the "amoritazation" of capital investments?