COMMERCIAL SPOKESMAN: Trane's central air conditioning presents: Recipe for boiled wife.
TOM BEARDEN: Before the 1950s, home air conditioning was an unimaginable luxury for most people.
COMMERCIAL SPOKESMAN: Test by arriving home from your cool office with a cheery, "Have a nice day." Cool your entire home with Trane central air conditioning.
TOM BEARDEN: But rising post war incomes gradually made it affordable.
LOLA: Lucias, don't you think maybe you'd better rise out of that chair and go to work.
LUCIAS: It's hot out, Lola.
LOLA: But you haven't been outside all summer, Lucias, not since we got our new air conditioner.
TOM BEARDEN: Today 83 percent of all American homes have some form of air conditioning. In many sunbelt cities like Miami, Phoenix, Las Vegas and Houston, air conditioning is considered a necessity. But it comes at a price. Air conditioning uses a great deal of electricity. In California, it's estimated to account for 28 percent of peak electrical demand.
Some argue that the government ought to require manufacturers to build new equipment that uses less electricity; that such standards could eventually reduce the need to build hundreds of new power plants by slowing the growth in demand. In the waning hours of the Clinton administration, the Energy Department proposed the first new air conditioning efficiency standard since 1992. It would have required new residential air conditioning systems to use 30 percent less electricity by the year 2006.
In April, the Bush Energy Department proposed a less ambitious standard. New units would have to use 20 percent less electricity. Cooling units are rated using something called seasonal energy efficiency ratios, or SEER. The higher the SEER rating, the less electricity it uses. The current standard is SEER 10. The proposed Bush standard is SEER 12. The Clinton standard was SEER 13.
TOM BEARDEN: The air conditioning industry is solidly behind the Bush standard. In fact, the Air-conditioning and Refrigeration Institute sued to block the Clinton standards. Gary Tapella is chairman of ARI. He's also the president and CEO of Rheem Air Conditioning. He says SEER 13 units would cost so much more, that consumers would never be repaid in savings on their electricity bills.
GARY TAPELLA: If we were to establish a national standard of 13, the Department of Energy has estimated that approximately 75 percent of the users would not receive a payback on that investment.
TOM BEARDEN: But payback depends on whose numbers one chooses to believe. Estimates for the additional costs for SEER 13 units range from zero to $1,500 more per unit. David Nemtzow of the Alliance to Save Energy believes the price difference would be very small.
DAVID NEMTZOW: The last time the federal government imposed standards, the industry estimated that it would increase the cost of units by over $700. The department of energy estimated it would increase units by about $360. We went back, we looked at the historical record. There was no difference in price. The price didn't go up. This time they're only estimating $120, so we think that's high. But even if it is that $120, on a piece of equipment that costs $2,000, that's pretty insignificant, and it saves electric bills for years to come.
TOM BEARDEN: Some people call Houston the air conditioning capital of the world, with more units per capita than anyplace else on earth. The climate is such that many people have $300 a month electricity bills just to keep their homes cool. SEER 13 proponents say people here would recover the extra equipment costs in just a few months. But Lyle Johansen of the Texas Association of Builders cautions that any price increase directly impacts who can afford to buy a house.
LYLE JOHANSEN: People have to have a certain income in order to qualify for a certain dollar loan. The more the price of the house goes up, the less of a loan they can qualify for. It's a mathematical formula. Our figures show that for every $1,000 a house goes up in price, there are 32,000 Texas families that can't afford to buy a home. So, for the low end of the market, it's a big issue. For the custom end of the market, it's probably not quite so sensitive.
TOM BEARDEN: ARI's Tapella also says the lower estimates don't take into account the cost of replacing aging air conditioners installed in small spaces in existing homes. He says it's a simple matter of physics; condensing coils inside the house that remove heat from the air have to be bigger to use less electricity, potentially requiring thousands of dollars in modifications.
GARY TAPELLA: They simply have to transfer enough heat during a given period of time to make the system operate, and therefore we need more surface area, a larger... physically a larger unit. Cabinets won't be large enough to accommodate it. There may be some ducting work that may be required to accommodate it. It's not a simple drop-in replacement by any stretch of the imagination, and it is likely to incur a substantial expense.
TOM BEARDEN: John Goodman says coil size is not really an issue. He says his company's SEER 13 coils aren't any bigger than SEER 12.
JOHN GOODMAN: This would not cause an issue in installation from a 10 to a 13 because it's basically the same size as a 10 on the indoor section here. And this is the coil right here, which is the same exact size between a 12 and a 13.
TOM BEARDEN: Goodman owns Goodman Manufacturing in Houston, the second largest air conditioning manufacturer in the United States. He and one small manufacturer broke ranks with the rest of the industry to support the stricter SEER 13 standard.
JOHN GOODMAN: I believe that they are being short-sighted and really not focusing. I mean, on the 13, it's good for the environment and it's good for... it's good for the consumer, and it's good for energy consumption, and also, it's good for the industry, because when people understand that they can save this kind of money on their energy bills, it's the right thing. I mean, the 13 is the right thing for the environment, the consumer and energy consumption.
TOM BEARDEN: And Goodman isn't the only Texan that disagrees with the Bush standard. The Texas Natural Resource Conservation Commission supports the Clinton standards. The Public Utility Commission of Texas also agrees with the TNRCC. Last November, Texas PUC Chairman Patrick Wood, whom President Bush recently chose to head the Federal Energy Regulatory Commission, sent a letter to the Department of Energy supporting the SEER 13 standard.
It said SEER 13 would, "decrease residential electric energy consumption and costs; would decrease system demand, thereby increasing system reliability; and would decrease air pollution, particularly during peak periods." But ARI's Tapella believes the government ought to look more realistically at human behavior.
GARY TAPELLA: There is more reason to anticipate that consumers will look at a replacement of their equipment when the threshold is lower and they can identify a payback on that equipment. And we believe that a 12 SEER product will do that, there will be a more rapid acceleration toward the replacement of all the stock when it's installed, and the energy savings will in fact increase and DOE agrees with that today.
TOM BEARDEN: One of the few things both sides agree on is that the issue will ultimately be decided in court. That may push back implementation of any standard beyond the current target of 2006.
GWEN IFILL: In fact, the issue has now gone to court. Last week, three states -- New York, Connecticut and California -- filed suit to stop the Bush administration from implementing its new efficiency standard.