Energy Efficiency Reform Act of 2026
- Sponsor
- Sen. Lee, Mike [R-UT]
- Committees
- Energy and Natural Resources Committee (primary)
- Last action
- Sep 16, 2026
Bottom line
This bill fundamentally reshapes federal energy efficiency policy by limiting DOE's regulatory power, rolling back recent standards, and preempting state and local energy regulations, aiming to reduce burdens on manufacturers and protect consumer choice.
What it actually does
This bill significantly amends the Energy Policy and Conservation Act, primarily by restricting the Department of Energy's (DOE) authority to set and enforce energy conservation standards. It mandates specific procedural requirements for DOE rulemaking, voids recent DOE energy efficiency standards for furnaces and commercial water heating equipment, redefines 'significant energy savings' with a higher threshold, and establishes broad federal preemption over state and local fuel use restrictions.
Proponents argue
Supporters argue that the bill is necessary to curb federal overreach, reduce burdensome regulations on manufacturers, ensure that energy conservation standards are technologically feasible and economically justified, and protect consumer choice by preventing the elimination of valued product features. They contend it prevents a patchwork of conflicting state and local regulations and provides regulatory certainty for industries.
Opponents contend
Critics contend that the bill undermines crucial energy efficiency efforts, hinders progress toward climate goals, and could lead to increased energy consumption and higher utility bills over time. They argue that it strips state and local governments of their ability to address local environmental concerns and that the new procedural hurdles will make it excessively difficult to implement beneficial energy-saving standards.
The bill is moderately complex due to its numerous amendments to existing law and technical definitions, requiring careful reading to understand its full implications.
Section 2
Mandating and Reinforcing the 'Process Rule'
This section requires the Secretary of Energy to issue a final rule for the 'Energy Conservation Program: Procedures, Interpretations, and Policies for Consideration of New or Revised Energy Conservation Standards and Test Procedures' within 270 days. This rule must retain specific procedural requirements, including the binding nature of the Process Rule on DOE, mandatory comparative walk-up analysis for economic justification, and a 180-day lead time for test procedures before proposing standards. Failure to comply voids recent DOE revisions to 10 CFR part 430.
Supporters argue
Supporters argue this ensures transparency, predictability, and economic justification in DOE's rulemaking process, preventing arbitrary or overly burdensome standards that could harm manufacturers and consumers.
Critics contend
Critics may argue this provision unduly ties the hands of the DOE, making it harder to update standards efficiently to reflect technological advancements or urgent energy needs, potentially slowing progress on energy efficiency.
Tradeoffs
This provision balances regulatory predictability and manufacturer certainty against the flexibility and responsiveness of the DOE to set new energy efficiency standards in a dynamic market.
Section 2(f)
Voiding Recent DOE Energy Conservation Standards
This provision immediately nullifies two specific final rules issued by the Department of Energy: the 'Energy Conservation Program: Energy Conservation Standards for Consumer Furnaces' (December 18, 2023) and the 'Energy Conservation Program: Energy Conservation Standards for Commercial Water Heating Equipment' (October 6, 2023).
Section 3
Redefining 'Significant Energy Savings'
This section amends the Energy Policy and Conservation Act to define 'significant energy savings' as a reduction of not less than 10 percent in 'full fuel cycle energy use' over a 30-year period. 'Full fuel cycle energy use' is explicitly defined to include all primary energy consumed from extraction, processing, transportation, generation, transmission, and distribution to the point of end-use.
Section 4
Eliminating the Requirement for Periodic Review of Standards
This section strikes subsection (m) of Section 325 of the Energy Policy and Conservation Act, which previously mandated that the Secretary of Energy periodically review and potentially amend energy conservation standards. This removes the statutory obligation for DOE to regularly update standards, making such reviews discretionary.
Section 5
Modifying Petition Process for Amended Standards and Extending Review Timelines
This section amends the criteria for granting a petition for an amended standard, requiring 'clear and convincing evidence' of the need for such an amendment. It also extends the minimum period before an amended standard can be established from 3 years to 'at least 6 years after publication of the final rule establishing the standard.'
Section 6(a)(2) and (3)
Allowing Less Stringent Standards and Restricting Multi-Product Rulemakings
This provision allows the Secretary to prescribe less stringent standards or standards resulting in increased energy use if there is 'clear and convincing evidence' that it's necessary to ensure product availability, avoid burdens on small manufacturers, prevent unavailability of performance characteristics, or prevent the influx of foreign competitors. It also prohibits amending a standard to include a new product type without a prior new product coverage determination and prevents rulemakings addressing multiple product types with similar but different functions.
Section 6(a)(4)(B)(iv)
Protecting Consumer-Valued Performance Characteristics
This section requires the Secretary to define 'consumer-valued performance characteristics' (e.g., reliability, product lifetime, features, sizes, capacities, installation and venting methods, fuel types, technologies, materials, volumes, and replacement ability without changes to existing drainage and venting methods). It explicitly prohibits new or amended standards from eliminating or impacting these defined characteristics.
Section 6(a)(5)(C)
Disclosure of Meetings with Entities Tied to China
This section prohibits the Secretary from prescribing new or amended energy conservation standards unless the Secretary publicly discloses all meetings related to covered products held with any entity that, in the preceding 5 years, had 'substantial ties to the People's Republic of China or the Chinese Communist Party' and manufactured, sold, or shipped goods of that product type into the U.S.
Section 6(a)(9)
Extending Compliance Dates for New Standards
This section specifies that an amended standard applies to products manufactured 5 years after the final rule's publication. Crucially, it states that no amended standard can establish a compliance date earlier than 10 years after the compliance date of the most recent standard applicable to that covered product.
Section 6(a)(10)
Mandating Separate Standards for Vented Products by Category
This section requires the Secretary to establish separate energy conservation standards for vented products or equipment (e.g., furnaces, water heaters) for each of the Category I, II, III, and IV venting categories, reflecting their unique performance features. It also mandates that the Secretary determine and label venting categories according to American National Standards Institute (ANSI) requirements.
Section 8
Redefining and Expanding Product Class Creation Criteria
This section replaces the existing subsection on product classes. It broadly defines 'performance-related feature' (e.g., reliability, lifetime, features, sizes, fuel types, compatibility) and requires the Secretary to establish new product classes for products consuming different energy types, having performance-related features justifying different standards, or materially affecting operating/venting conditions. New procedural requirements for establishing classes are also added.
Section 9
Streamlining Manufacturer Reporting and Clarifying Responsibility
This section amends manufacturer reporting requirements to only apply to new, changed, or revoked models. It mandates coordination between DOE, the Federal Trade Commission (FTC), and the Environmental Protection Agency (EPA) to eliminate duplicative reporting, requiring a single submission for identical information. It also clarifies that for components in finished products, the component manufacturer, not the finished product manufacturer, is responsible for reporting.
Section 10(h), (i), (j)
Federal Preemption of State and Local Fuel Use Restrictions and Revoked Standards
This section establishes broad federal preemption over state restrictions on fuel use or requirements affecting the sale and use of covered products. It also dictates that if a federal energy efficiency standard is revoked, the previously issued federal standard remains in effect, and states are preempted from enacting new regulations or using existing ones to fill the void. This applies to all state and local governments and preempts laws prohibiting installation/use of covered products based on fuel source or air pollutant emissions.
Section 11
Prohibiting New Energy Conservation Standards for Distribution Transformers
This section prohibits the Secretary of Energy from prescribing any new or amended energy conservation standards for distribution transformers, including low-voltage dry-type distribution transformers, effective immediately. Existing standards prescribed before the bill's enactment are unaffected.
This subsection states that Appendix A to subpart C of part 430 of title 10, Code of Federal Regulations (including any revisions), shall have the force and effect of law 181 days after the date of enactment. This appendix typically outlines the procedures for developing energy conservation standards.
Section 2(e)
Why it matters:While technically a procedural change, elevating a regulatory appendix to statutory weight is a significant legislative action that fundamentally alters its legal standing and flexibility. It is standard legislative practice for technical regulatory changes, but its impact is profound.
Case for: Proponents would argue this provides a clear, legally binding framework for DOE's rulemaking, ensuring adherence to established procedures and preventing arbitrary changes to the process itself.
Case against: Opponents might argue that elevating a regulatory appendix to the force of law makes it overly rigid and difficult to adapt to evolving circumstances or best practices without further congressional action, potentially hindering efficient governance.
Estimated impact: Significantly alters the legal weight and flexibility of DOE's procedural rules for setting energy conservation standards, making them much harder to change administratively.
This subsection prohibits the Secretary from prescribing new or amended standards unless the Secretary finds (and publishes such finding) that, based on a preponderance of the evidence in the record, the standard will *not* result in the unavailability in the United States of any covered product type (or class) of performance characteristics, including reliability, product lifetime, features, sizes, capacities, installation methods, fuel types, and technologies.
Section 6(a)(6)
Why it matters:This is a technical amendment to existing statutory language, making its full impact less obvious without a line-by-line comparison. It is a common legislative technique to modify existing law by striking and inserting text.
Case for: Proponents argue this is a critical safeguard to ensure that energy efficiency standards do not inadvertently remove popular or necessary product options from the market, protecting consumer choice and industry innovation by preserving a wide array of product features.
Case against: Opponents might argue this provision could be interpreted so broadly as to make it exceedingly difficult to pass any new energy efficiency standards, as nearly any change could be argued to affect some 'performance characteristic,' thereby creating a significant barrier to progress.
Estimated impact: Significantly raises the bar for DOE to justify new energy conservation standards, potentially leading to fewer or less stringent standards by creating a strong legal defense for existing product features.