Sofie E. Miller
We appreciate the Department of Energy’s (DOE) steps toward involving the public in its ongoing retrospective review efforts. As DOE notes in its Request for Information (RFI), the public has access to dispersed information that can inform the Department’s efforts, and this comment attempts to bridge that gap by providing DOE with insights from the public interest perspective.
Through its RFI, DOE is seeking comment from the public on how to effectively review its existing regulations, pursuant to Executive Order 13563. This comment addresses three of DOE’s questions for commenters:
(1) How can the Department best promote meaningful periodic reviews of its existing rules and how can it best identify those rules that might be modified, streamlined, expanded, or repealed?
(2) What factors should the agency consider in selecting and prioritizing rules and reporting requirements for review?
…(9) How can the Department best obtain and consider accurate, objective information and data about the costs, burdens, and benefits of existing regulations? Are there existing sources of data the Department can use to evaluate the post-promulgation effects of regulations over time?
In addressing the above questions, this comment offers four recommendations to DOE to further its retrospective review efforts:
To evaluate the outcomes of its biggest rules, DOE should incorporate plans for retrospective review into its economically significant or major rules.
DOE should allow enough time between its energy efficiency standards to allow for an effective review of each rule’s effects before increasing the stringency of its standards.
When possible, DOE should encourage surveys or other measures of actual consumer behavior to ensure that its assumptions about household appliance energy use are accurate.
DOE should use existing measures—such as the Herfindahl-Hirschman Index—to assess whether its existing energy efficiency standards have had negative effects on competition in the regulated industries.
Incorporation of Retrospective Review into NPRMs
In his implementing memo on retrospective review, former Administrator of the Office of Information and Regulatory Affairs, Cass Sunstein, stated that “future regulations should be designed and written in ways that facilitate evaluation of their consequences and thus promote retrospective analyses and measurement of ‘actual results.’" This emphasis is repeated in Sunstein’s June 14, 2011 memo, “Final Plans for Retrospective Analysis of Existing Rules.”
In its 2015 Report to Congress on the Benefits and Costs of Federal Regulations, the Office of Management and Budget (OMB) states that such retrospective analysis can serve as an important “corrective mechanism” to the flaws of ex ante analyses. According to that report:
The aim of retrospective analysis is to improve understanding of the accuracy of prospective analysis and to provide a basis for potentially modifying rules as a result of ex post evaluations. Rules should be written and designed to facilitate retrospective analysis of their effects, including consideration of the data that will be needed for future evaluation of the rules’ ex post costs and benefits.
As a part of its Retrospective Review Comment Project, in 2014 the GW Regulatory Studies Center examined significant proposed regulations to assess whether agencies proposed retrospective review as a part of their regulations, and submitted comments to provide suggestions on how best to incorporate plans for retrospective review into their proposals. Our research indicated that many agencies—including DOE—are not complying with EO 13563 and OMB’s direction to write and design their rules so as to facilitate retrospective analysis of their effects. Further efforts in this direction would improve both the design of future rules and regulatory outcomes themselves.
Because of their magnitude and the frequency with which DOE updates their stringency, DOE should write plans for retrospective review into the text of its energy efficiency standards. Although DOE is currently required by statute to review its efficiency standards every six years and determine whether updated standards are necessary, this review is limited to technical capacity for increased stringency and does not extend to the actual effects of these rules on consumers and the marketplace. These reviews currently fall short of the requirements of EO 13563 to “measure, and seek to improve, the actual results of regulatory requirements.” The provisions of EO 13563 and existing statutory authority provide DOE with a good opportunity to regularly review the effects, intended and otherwise, of its energy efficiency standards.
Below are five key components that DOE should incorporate into its rules to improve its prospects for “maintaining a consistent culture of retrospective review and analysis”:
DOE should identify the problem that its proposed rule is intended to solve.
DOE should provide clear, measurable metrics that reviewers can use to evaluate whether the regulation achieves their policy goals.
DOE should commit to collecting information to assess whether its measureable metrics are being reached.
DOE should provide a clear timeframe for the accomplishment of its stated metrics and the collection of information to support its findings.
DOE should write its proposed rules to allow measurement of both outputs and outcomes that enable review of whether the standards themselves directly result in the outcomes that the Department intends, and the extent to which mediating factors (such as energy prices and usage patterns) contributed to these outcomes.