standards) have also provided the technical "yardstick" used by a large number of utility rebate programs to encourage purchase of energyefficient models. In the commercial sector, some voluntary industry programs already exist for testing and labeling of motors and certain other equipment, but DOE is not aware of any evaluation of their effects. It seems reasonable to assume, however, that businesses will include some consideration of life-cycle costs in their purchasing decisions. Specific testing provisions for each major equipment category, the range of efficiencies currently on the market, and the degree to which test data are made available to and used by different types of purchasers, will be assessed in detail as an early step in implementing this NES option. It is expected that efficiency testing and labeling will have more impact on certain commercial/institutional markets than in the residential sector, because of the greater costconsciousness of the energy managers, procurement specialists, and other professionals in this sector. The impact of testing and labeling may also be increased to the extent that this market information permits or stimulates other measures, such as utility rebates and other incentives, tighter Federal procurement criteria or improvements in the equipment efficiency requirements of state and local building codes. However, where energy costs are small compared with other business costs, the impacts of information-only strategies such as labeling will be limited by the same constraints found in the residential sector. At the same time, when the amount of energy use affected is small, a Federal efficiency program may not be needed or appropriate. There are other NES initiatives that are intended to encourage energy conservation by providing energy users with more complete and reliable information on the opportunities for improving energy efficiency, including elements of the proposal to expand the use of mortgage financing incentives for residential energy efficiency, the proposal to expand and develop energy audits for industry and DOE's efforts to improve consumer information on fuel economy and system efficiency. In general, the NES makes no assumptions regarding the energy savings that will result from these initiatives or assumes that their impact is likely to be limited. For example, DOE's analysis of the proposal to expand the use of mortgage financing incentives for residential energy efficiency assumed that the widespread availability of such mortgage incentives and the necessary information on home energy efficiency might help improve the efficiency of 20-25% of the single family homes sold each year. But even for these homes it is not assumed that information alone would result in the implementation of all cost-effective efficiency improvements. Cost-effectiveness does not necessarily equate to consumer affordability or desirability, and it is not DOE policy to force undesirable features or practices on homeowners, nor to raise the cost of home ownership, which is already a serious problem for many Americans. QUESTIONS FROM SENATOR JOHNSTON Question: # 5 FERC The White House fact sheet on the NES states that the Administration will propose "bringing the Federal Energy Regulatory Commission into DOE". O Could you please describe this proposal in more detail? Answer: The incorporation of the Federal Energy Regulatory Commission ("FERC" or "the Commission") 88 an executive (rather than independent) agency within the Department of Energy (DOE) complements the reform and streamlining of the regulatory infrastructure for the natural gas and hydroelectric power industries contained in the National Energy Strategy. The restructuring of FERC would facilitate expeditious regulatory decisionmaking, which would occur under the proposed naturaļ gas and hydroelectric reforms. The new Natural Gas and Electricity Administration (NGEA) would be designed to handle a significantly reduced volume of contested proceedings which, under the proposed reforms, would be far less complex than the current practice of protracted, multi-party hearings at FERC. Under this proposal, NGEA would become an executive Administration within DOE. This new administration would be headed by an Administrator, who would report to the Secretary and participate in key policy decisions made through DOE's existing policymaking framework. However, the Secretary would be responsible for that policy, subject to the normal guidance the President exercises over his cabinet members. requiring impartial Individual proceedings adjudicative hearings would be conducted by administrative law judges ("ALJs") within DOE, and their decisions would be subject to review by the Administrator, as the delegate of the Secretary. The Administrator, subject to direction of the Secretary, also would be responsible for overseeing the proper implementation of policy, as promulgated by the Secretary, in those hearings. However, appropriate procedures, similar to those 'utilized by other agencies and departments, would be put in place to ensure adjudicative and administrative independence of ALJs. The Administrator would be responsible for the prompt processing of all applications filed with the agency, including the assignment, where appropriate, of matters to ALJS for hearings and for ensuring that the staff of the Administration is seeking to implement properly the |