the private sector, and infrastructure costs are not included. Certain programs are analyzed by assuming the success of program goals or standards that may not necessarily be economic within the time frame of the analysis, leading to additional costs that are not incorporated into a decisionmaking process. However, in addition to reductions in energy consumption, consumer expenditures for energy, and carbon emissions, there may be other benefits to these programs that are not evaluated. Potential ancillary benefits include improvements in air quality due to reductions in criteria pollutants, energy security from lower energy consumption, maintaining U.S. leadership in science and technology, and revenues from the deployment of more advanced technologies to other countries. Funding for research and development may accelerate the development of more efficient and advanced technologies at lower cost than might otherwise occur. In addition, research and development may tend to improve the characteristics of technologies that have already been developed to some degree. To the extent that continuing development lowers the costs of technologies or improves their efficiencies, reliability, or other attributes, the technologies become more economically competitive and attractive in the market. Ultimately, the success of technology development depends on the products becoming competitive and penetrating into the marketplace. There are a number of barriers to technology penetration that may account for seemingly slow penetration of technologies that appear cost-effective. Lack of information about new technologies is one barrier which may be overcome with information programs. Subsidies or regulated prices may hold energy prices artificially low and hamper the penetration of technologies. Builders and homeowners or tenants may have different incentives for energy efficiency. It may be difficult for the builder or landlord to recover the additional costs for more expensive, energy-efficient equipment from a buyer or tenant who may not value energy efficiency highly. Conversely, the buyer or tenant who will be paying the energy bills may not readily have the option of making the equipment choices. Even if energy consumers are aware of potential cost savings from a more efficient technology, they may have preferences for other 15 equipment characteristics, for example, valuing vehicle size over efficiency. Also, consumers may prefer a relatively short payback period for investments in energy-consuming technologies. Technology penetration can also be slowed by uncertainties about reliability, installation and maintenance, availability of the next generation of the technology, and necessary infrastructure. Some of these barriers can be addressed by information programs, collaborative efforts for development and diffusion, research and development to improve technologies and reduce costs, and incentives to enhance the cost effectiveness of new technologies. All these initiatives may help to encourage earlier penetration of technologies. Subsequently, the initial penetration may have the additional impact of reducing costs through learning, establishing the infrastructure, and increasing familiarity with new technologies. Finally, equipment standards and other mandates such as renewable portfolio standards can also lead to earlier penetration of new, more advanced technologies; however, standards may not be the most cost-effective methods for encouraging improvements in energy efficiency. The full costs of standards are not evaluated in this analysis. 16 Department of Energy JAY E. HAKES Jay E. Hakes was nominated by President Clinton to be the EIA is the branch of the Department of Energy responsible for collecting and analyzing energy data for the Federal Government. It is recognized as the authoritative source of U.S. energy information by government policymakers, industry, and the public. The Agency has adopted a strategic planning process emphasizing the goal of accuracy, timeliness, accessibility, efficiency, and customer satisfaction. EIA was one of the original case studies on performance measures analyzed by the American Society for Public Administration. Energy is the fourth Federal agency in which Dr. Hakes has served. From 1977-80, he held positions at the Agency for International Development, Department of the Interior, and the Executive Office of the President. From 1980 to 1993, Dr. Hakes worked in various capacities for Florida Governor and later U.S. Senator Bob Graham, including positions as State Energy Director and Governor's Chief of Staff. A 1966 graduate of Wheaton College, with a masters degree from Duke University in 1968, and a doctor of philosophy degree from Duke University in 1970, Dr. Hakes taught political science at the University of New Orleans from 1970 to 1977. In the past year, he has published two articles in Public Administration Times on performance measures-- "Comparing Outputs to Outcomes" (October, 1996) and "Performance Measures and Organizational Change" (July, 1997) Dr. Hakes was born in Gallipolis, Ohio. He is married to Anita Zervigon. EIA RESPONSE TO DOE AND EPA CRITICISMS Chairman CALVERT. Thank you. Doctor, do you have any other comments on some of the criticisms that you have on your study here today by the other witnesses? Dr. HAKES. Well, one of the criticisms that was made is that the EIA is made up of a bunch of pessimists. [Chart.] [The information follows:] |