SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals Friday set in motion a U.S. Department of Energy agreement to review the existing energy efficiency standards for electricity distribution transformers, the gray boxes mounted on utility poles, and propose changes to maximize future savings three years earlier than otherwise required. The agreement, which is part of a lawsuit settlement reached with the Natural Resources Defense Council, Sierra Club, Earthjustice and several states, is expected to speed up efforts to increase the efficiency and the cost-saving potential of energy transmission in the United States.

"Energy efficiency is vital to curbing global warming," said Earthjustice attorney Tim Ballo, who argued the case in court in March. "We hope with this next round of standards, DOE will make good on its on its charge to cut energy consumption, curb greenhouse gas emissions and put money back into the pockets of consumers."

"We're making sure the gray boxes mounted on utility poles that bring power to every American home are more efficient. Getting standards right is critical to reducing energy demand, cutting global warming pollution and improving system reliability," said Anjali Jaiswal, senior attorney at the NRDC. "The Obama administration has demonstrated real leadership and commitment to energy efficiency in reaching this agreement."

The transformers lawsuit was filed by the environmental groups in December 2007, challenging the Bush Administration's weak energy efficiency standards. The states of California, New York, Connecticut, and New Jersey and the city of New York filed a similar lawsuit.

The transformers agreement comes on the heels of the Obama administration's new energy efficiency standard for lighting and its commitment to strengthen standards for residential furnaces. Last month, President Obama announced a new federal lighting standard that could cut energy costs by $70 billion and keep up to 9 tons of mercury out of the air over 30 years. The new standard, which is the greatest energy-efficiency measure in the history of the DOE, will improve the efficiency of tube-shaped fluorescent bulbs commonly found in offices across the country, as well as downlights, the reflector lamps that go into recessed cans, which are increasingly popular in homes.

The Obama administration's April announcement that it was reconsidering weak standards for residential furnaces promises additional benefits from one of the home's biggest users of energy. Over 30 years, stronger standards for residential furnaces could save enough gas to heat all gas-heated homes in the U.S. for one year, net about $11 billion in reduced energy costs and cut global warming pollution by the amount emitted by 25 million cars in a year.

According to a 2007 DOE analysis, stronger standards for distribution transformers could eliminate the need to construct up to seven new large 400 megawatt power plants. These efficiency standards for transformers, lighting, and furnaces collectively could reduce carbon dioxide emissions by about 973 million metric tons over 30 years -- more than twice the annual emissions from the entire state of California -- and save consumers nearly $75 billion dollars.

"This agreement compels the U.S. Department of Energy to develop and implement new energy efficiency standards for distribution transformers years before such rules are required by law," said Ken Alex, Senior Assistant Attorney General for California. "We appreciate the Obama administration's new direction and its efforts to enact stringent standards that will benefit every state."

These standards are among the 25 new appliance efficiency standards the Obama administration must complete during the next four years under court orders and congressional deadlines. Only four standards were completed over the eight years of the Bush administration.

"Using the technology available today we can dramatically increase the efficiency of our transformers," said Dave Hamilton, director of the Sierra Club's Global Warming and Energy program. "And by doing so we can not only save money on our energy bills, but also help reduce our dependence on dirty coal, which will help lower our health care costs as well."