WASHINGTON — Small business owners and legal experts told lawmakers on Wednesday that new regulations by the Department of Energy have drastically increased their costs for doing business, which in turn have piled on expenses for consumers and forced homebuyers out of market.
The House Small Business Committee focused its inquiries particularly on a recent collection of energy standards for consumer products including gas stoves, commercial refrigerators and battery chargers.
One small business, National Refrigeration & Air Conditioning Products, based in Langhorne, Pa., has already made “multi-million dollar” investments into new production equipment to comply with mounting regulations from the Energy Department and Environmental Protection Agency.
Jeff Bauman, National Refrigeration’s manager of regulatory affairs, said the company is constantly trying to control rising costs while dealing with these regulations. It even had to discontinue a line of freezers in 2017 because of these regulations. He also cited on proposed rule for commercial refrigerators and freezers that he said was particularly burdensome.
“Our company along with other manufacturers and industry associations are extremely concerned with the DOE’s unrealistic proposals in this notice,” Bauman said.
Many Republicans on the committee argued that these constraints were unnecessary and antithetical to the competitive nature of small businesses. Rep. Dan Meuser (R-Pa.) said when manufacturers make their products more efficiently and less costly, they do it because of market competition and not government mandates.
Rep. Nydia Velázquez (D-N.Y.), however, countered that the Trump administration was required to establish energy conservation standards for roughly 60 consumer products as stated in the Energy Policy and Conservation Act but failed to do so. This lack of regulation resulted in a lawsuit and forced the Biden administration to review these standards swiftly, she said.
These regulations have both cost and saved consumers billions of dollars. The costs, estimated by Rep. Pete Stauber (R-Minn.) to be $320 billion for businesses and manufacturers, have come in the form of new technologies introduced to the market costing more; the savings, estimated by Velàzquez to be $570 billion, have come in the form of reduced energy expenses as a result of newer energy-efficient products.
Emily Hammond, a law professor at George Washington University and a former deputy general counsel at the Department of Energy, testified that regulations are not made flippantly and include economic impact to manufacturers and consumers in their analysis before and during rulemaking. When DOE regulations are enacted, businesses typically have three to five years to implement these rules with a possible two-year extension.
Hammond testified that the agency offers several ways for small businesses to submit complaints, such as through interviews or phone numbers on their website. Bauman verified that the Energy Department did communicate with his business regarding the new regulations, but claimed he was yet to see if his concerns were addressed.
Another business totaled up what it estimated the added regulations contributed to higher home prices. “On average, regulations imposed by all levels of government account for nearly 25% of the price of a single-family home and over 40% of the cost of a typical multifamily development,” said Alicia Huey, President of AGH Homes, based in Birmingham, Ala.
She outlined how new regulations on power transformers were delaying projects, and the average wait to receive a compliant transformer was now 18 to 24 months.
A particular point of confusion for many months has been how exactly the government is trying to regulate gas stoves. EPA research had recommended limiting exposure to harmful chemicals emitted by gas stoves, but the issue quickly turned into a point of outrage by Republicans. Stauber on Wednesday recalled a conversation he had with his father who asked if the DOE implements a ban on gas stoves, “what am I going to cook at the hunting shack with?”
Rep. Judy Chu (D-Calif.) set the record straight, explaining that the DOE has no plans to institute a ban on gas stoves nor does it have the executive authority to do so.
Rep. Marc Molinaro (R-N.Y.) said that his proposed bill, the Providing Opportunities to Show Transparency via Information Technology (POST IT) Act, would ensure regulatory transparency by requiring agencies like the DOE to post guidance for small businesses on the SBA’s National Ombudsman website.
“When there’s new federal guidance that they have to comply with, we should be making it easier for small businesses to understand and follow the rules. My bill forces the federal government to simplify significant regulations and post them online.” Molinaro said.