Testimony of

William C. Rennie, Vice President
Retailers Association of Massachusetts

Before the Joint Committee on Telecommunications, Utilities and Energy
October 7, 2009

Re: H.3124 & S.1524 – Relative to Expanding Energy Efficiency in the Commonwealth
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The Retailers Association of Massachusetts (RAM), established in 1918, is a statewide trade association of over 3,100 member companies.  Our membership ranges from independent, “mom and pop” owned stores to larger, national chains operating in the general retail, restaurant and service sectors of the retail industry.  The industry’s contributions to the Commonwealth include over $112 billion in annual sales; over $5.7 billion in annual sales and use taxes collected; 17% of all Massachusetts jobs; and operations in over 38,000 locations across the state.

On behalf of RAM, I urge the Committee to oppose H.3124 and S.1524, relative to expanding energy efficiency in the Commonwealth.  These bills are not only harmful to the retail business community, but they are anti-consumer as well, and will bring with them many negative consequences should they be allowed to advance to become law.  

Generally, when implementing changes in the Massachusetts business market, such as requiring manufacturers to produce Massachusetts specific products to different standards, we must always first consider the impact of these types of restrictions.  The result of these actions will simply be to force manufacturers to remove their items from the store shelves of the Commonwealth, rather than increase their expenditures to comply with the proposed legislation.  Yet, with the geography of our small state, all any Massachusetts resident would need to do is drive a short distance across the border into one of our neighboring states to be able to purchase those same goods, or order them on-line – where the state has little to no enforcement ability. 

Adoption of proposals like this would simply serve to make the products available to the Massachusetts consumer that much more expensive.  A more expensive, limited 
product line would equate to less consumer purchases, with many then forced to keep their old, less efficient products around longer and continuing to use more energy.  These issues clearly can only be adequately and fairly regulated and enforced through federal regulatory efforts.   As the bills place significant restrictive mandates on manufacturers, rather than comply with these onerous regulations, many manufacturers will simply no longer do business in the Commonwealth and consumers will lose a valuable right to choose. 

Beyond those broader reasons RAM oppose this legislation, there are a number of specific issues within the bills that are particularly troubling. The legislation seems to lump certain consumer electronics, televisions, compact audio players and recorders, and DVD players and recorders, in with certain other industrial and commercial products.  As it is unclear how these items are related in terms of their design, I would urge the Committee to look closely at how these consumer electronics are measured elsewhere.  The federal ENERGY STAR program, as you know, is a popular and well known brand that consumers are familiar with, have become accustomed to and which manufacturers strive to achieve for their products.  According to the U.S. Environmental Protection Agency (EPA), the ENERGY STAR label is recognized by more than 70% of consumers.  The program is always evolving and raising the bar on a uniform, national basis, and it is the model approach to follow. As evidence of the continued evolution and success of the ENERGY STAR program, just last month, the EPA raised the bar yet again on new requirements for energy efficient televisions seeking to earn the ENERGY STAR label.  Televisions meeting the new stricter standards will be available for sale in May of 2010.  I would urge the Committee to review closely these new standards and how they relate to what is proposed in the bills before you today.

Finally, there is language included which would provide the Commissioner of the Division of Energy Resources (DOER) unlimited authority to expand the list of products covered under the Appliance Efficiency Standards Act.  Any future expansion of this list should be subject to the same legislative process by which the list was originally established, allowing all interested parties to participate in the debate in an open and public process. 

In addition to the many reasons stated above, the extremely damaging effect of the current economic downturn cannot be understated, particularly the impact felt by appliance and electronics sellers.  In the wake of the 25% increase in the sales tax and the loss of the Sales Tax Holiday, RAM member furniture, appliance and electronic sellers reported August 2009 sales were down between 40% and 73% versus August 2008.  As consumer spending remains dormant, any added cost burdens to retail businesses or consumers, such as those included in these bills, must be looked at unfavorably.

Rather than focus on mandatory energy consumption limits that could hinder innovation and consumer choice, we encourage the Committee to consider market-oriented incentives for greater energy efficiency, including promotion of the existing ENERGY STAR program.

I thank you for the opportunity to comment on this important matter and please do not hesitate to contact me if I can be of any assistance to you in your deliberations.