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3 On Your Side: Energy Labels Not Always Accurate

By Jim Donovan

PHILADELPHIA (CBS) -- Appliances for sale at stores come with a yellow energy savings tag.  The label gives shoppers an idea of how much it will cost to run the appliance.  But as 3-On Your Side Consumer Reporter Jim Donovan finds, people living in the Delaware Valley should expect to pay more.

They're the bright yellow labels that many of us rely on when picking out new appliances.  They list how much energy is used by the appliance and estimate what consumers will pay to run the appliance each year.  But there's just one problem.  Economics professor Lucas Davis says the labels are wrong.

Davis has spent the last two years studying these federally mandated energy-guide labels and he says don't count on them to be accurate. According to Davis, "They show information based on national average electricity prices."  Those averages are lower than the electricity prices we pay in Pennsylvania, New Jersey and Delaware.  Davis says, "The problem is people don't have no idea how much they spend for electricity so they have no idea how to make that conversion."

But Davis points out, accurate or not, labels do serve a good purpose.  Side-by-side they can help you decide which appliances save the most energy and money.  Even if you're not saving as much as the label would have you believe.  Davis says, "We found people who saw better labels, made better decisions, and they saved money, a lot of money."

The Federal Trade Commission requires the energy guide labels, but when Professor Davis presented the idea of state-specific labels to the FTC they thought it was a good idea, just  too expensive to carry out.

For more information on the energy labels visit:

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