The proposed agreement would eliminate the May 1, 2013 requirement that would mandate 90-percent AFUE furnaces in the North and instruct the DOE to redo the rulemaking establishing efficiency standards for non weatherized gas and mobile home gas furnaces. However, the settlement would not impact the regional energy-efficiency regulations for central air conditioners, weatherized furnaces, and heat pumps, which would remain on schedule for a Jan. 1, 2015 implementation.

HARDI has no problem with the furnace aspect of the settlement, but still wants to fight the air conditioner standard.

“We do not object to the whole settlement. We don’t object to APGA’s ability to settle with the department on the matter of furnaces,” Jon Melchi, director of government affairs, HARDI, said. “We reject the premise that the case should be dismissed outright because of that settlement. We believe the judge should allow us to continue our case as it relates to the direct final rule process which established these standards, including air conditioners.”

HARDI believes that while APGA says their primary concerns were the furnace issue, that is not what they filed. The association believes APGA challenged the entire direct final rule process and what was produced. In HARDI’s ideal world, the judge would accept the furnace aspect of the agreement, allow HARDI to take over the court case from APGA and continue the dispute.

“We are looking at it now, as well as the comments from other interveners. We will discuss it internally and respond appropriately,” said Dave Schryver, executive vice president of APGA. “We are happy with the settlement.”

Cause of Action is representing HARDI pro bono, so continuing the lawsuit would be of no financial cost to the association. HARDI president Brian Cobble said at a distributor town hall meeting held at the 2012 HARDI Annual Conference that they were unanimously directed by their distributor members to do everything reasonably possible to fight the implementation of regional standards.

“We felt we owed it to our members to do everything we could to find a solution for this. Our lawyers found precedent. This has been done before,” Melchi said. “By settling, the department is tacitly admitting there were errors in the process. They would not be settling this case if they did not realize there was a problem. If the mistakes were made in establishing the furnace standards, they certainly were made in establishing the air conditioner standards. We would be more than comfortable allowing the legal process to run its full course and go through a trial.”

Melchi estimated that the judge would make a decision one way or another by March 1.

ACCA, which like HARDI was an intervener on the lawsuit, did not file a motion and is taking more of a wait-and-see approach.

“We have concerns about the air conditioning side of things in terms of the process, but we did not file a motion,” said Charlie McCrudden, ACCA vice president for government relations. “We are telling our members the smartest thing to do is assume nothing has changed with regard to the May 1 deadline until it actually does. The rules are still in place.”

Air-Conditioning, Heating, and Refrigeration Institute (AHRI) also had a reaction.

“While we are disappointed that our consensus agreement, on which the direct final rule was based, will not go forward in its entirety, our member companies will move forward in preparing for the next implementation deadline – for air conditioners and heat pumps – which will occur January 1, 2015,” said AHRI President and CEO Stephen Yurek. “With respect to the HARDI petition, we are consulting with our members and will decide shortly whether to intervene,” he said.

Background

In a lawsuit filed Dec. 23, 2011, APGA challenged the energy-conservation standards for nonweatherized gas furnaces set forth in the DOE’s direct final rule, issued June 27, 2011. APGA argued against the substance of the standards, as well as the process that led to their adoption.

In light of those arguments, the DOE concluded, in a Jan. 11, 2013 agreement with the APGA, that it is appropriate to undertake new rulemaking proceedings to consider the appropriate standards and provide an opportunity for APGA, and others, to offer additional comments concerning any proposed standards.

Therefore, if the settlement is accepted by the court, nonweatherized gas furnaces in the 29 Northern states will not be required to meet a 90 percent AFUE minimum requirement starting May 1, 2013, as both the efficiency standard and implementation date have been rescinded.

Despite its attempt at streamlining the process, the potential for any new DOE standard may take quite a while. A five-year lead time is necessary under the law after the date the final rule is issued.

Publication date: 2/4/2013