Standards & Legislation

Opposition Rises Against Regional Standards Request

In what has become a bit of a legal ping-pong match, the Air-Conditioning, Heating & Refrigeration Institute (AHRI) is making sure its voice is heard by the court regarding a future decision on a proposed regional-standards settlement.

A Simmering Settlement

The industry currently awaits a court ruling on a proposed settlement that would eliminate a May 1, 2013 implementation date that would mandate 90 percent AFUE furnaces in the North, and instruct the DOE to redo the rulemaking establishing efficiency standards for nonweatherized gas and mobile home gas furnaces. The settlement, as it currently stands, 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. AHRI stands behind the proposed settlement, because the agreement, at a minimum, provides certainty for its manufacturer members.

Representatives of Heating, Air-conditioning, and Refrigeration Distributors International (HARDI) feel otherwise, and filed a request to continue the case, with itself substituted in place of the case’s original petitioner, American Public Gas Association (APGA).

“HARDI does not believe that the [Department of Energy] DOE v. APGA settlement addresses all our concerns,” said Jon Melchi, director of government affairs, HARDI. “Therefore we’re asking the court to allow us to substitute for APGA and continue our concerns as they relate to abuses of the direct final rule process and central air conditioners.

“We believe that the facts are on our side and that by allowing the case to continue, the court would be allowing the many businesses that HARDI represents the fair and open process they were denied by the DOE’s abuse of the direct final rule process.”

AHRI representatives explicitly expressed their opposition to HARDI’s request through a motion of their own, issued Feb. 7. In the written document, AHRI acknowledged that HARDI’s request, if granted, would eliminate a pending settlement, which would lead to further uncertainty and place unnecessary economic and time strains on manufacturers.

Challenging the Rule

AHRI, the DOE, and a number of interested parties claim that HARDI’s request is inappropriate because it falls outside a legal window of opportunity. Additionally, because APGA’s case focused on nonweatherized furnace standards — and failed to question air conditioner standards — the group stated that any argument against air conditioning standards is “moot.”

In a joint statement, filed Feb. 7,a number of intervenors including the Alliance to Save Energy, the American Council for an Energy-Efficient Economy, and the Natural Resources Defense Council publicly disputed HARDI’s motion.

The collaborative document noted that “HARDI failed to file a petition for review or file its motion to intervene within the 60-day period for seeking review of the DOE’s final rule. Even if HARDI could substitute for APGA, all of the issues encompassed by APGA’s petition would be rendered moot should the court grant the relief APGA and DOE requested. Because HARDI is not permitted to expand the issues presented by the petitioner, there would be nothing left for the court to resolve.”

AHRI echoed the concerns of its fellow intervenors in a Feb. 7 motion of its own, stating that a court’s decision to allow an intervenor to replace a settling petitioner is a “discretionary procedure.”

“AHRI urges the court to deny HARDI’s motion because allowing HARDI to step in as petitioner will reinstate and greatly exacerbate what has become a highly unsatisfactory — and potentially damaging — status quo,” wrote David B. Calabrese, general counsel and senior vice president of policy, AHRI, in the institute’s motion. “With respect to the air conditioning standards that HARDI intends to challenge as petitioner, continued litigation will extend the period of uncertainty, further delaying the point at which AHRI’s members can confidently make the considerable investments needed to come into timely compliance in January 2015.”

When APGA filed its suit, HVAC manufacturers reasonably assumed that the air conditioner standard was not under challenge, and thus proceeded accordingly, stated Calabrese.

“Companies have initiated product development programs to ensure that they have compliant products in their portfolio and in distribution by Jan. 1, 2015. Further, there are pending investment decisions that must be made immediately,” said Calabrese. “If the air conditioning standards are further delayed (or ultimately vacated), the manufacturers’ past efforts may be wasted, and, while the appeal continues, their decisions about the future will necessarily be made under a cloud of uncertainty. This added uncertainty threatens to waste millions of dollars, while preventing the public benefit of increased energy efficiency and protection of the environment.”

Compromising the Settlement

The DOE wrote that it “strongly opposes” HARDI’s request in its own Feb. 7 filing.

“APGA and DOE have agreed that this court should vacate, in part, the rule under review and remand for notice-and-comment rulemaking concerning the vacated portion of the rule — the portion that was at issue in APGA’s petition for review: the energy conservation standards for nonweatherized gas furnaces in the Northern region of the United States. There is no reason to deny the relief requested,” wrote Michael S. Raab, appellate staff, Department of Justice.

AHRI’s Calabrese reiterated that if HARDI’s request is granted, the industry could be thrust upon a May 1, 2013 implementation date for nonweatherized furnaces, allowing less than three months of preparation time. “Even though HARDI is not suing on the furnace rule, the government [DOE] said if the court were to grant HARDI’s motion to substitute for APGA, that they would withdraw their support for a settlement,” he said. “If this were to occur, our industry would lose all sense of certainty, and we’d plunge back into limbo. This is a serious concern that would be very problematic.”

AHRI called the acceptance of HARDI’s request the most disadvantageous position possible, in its statement. “Manufacturers will be forced to decide whether to proceed with investment, research, and production timetables that may be unachievable, even with extraordinary efforts. And they’d be forced to make those decisions while exposed to the risk that their efforts may be wasted if the outcome of the appeal is to vacate some or all of these new efficiency standards,” said Calabrese.

An Intervenor’s Ability

Those challenging HARDI’s request argue its ability to swap roles from an intervenor to a petitioner. The joint-intervenor statement, and the DOE document, referenced the Process Gas Consumers Group v. FERC court case, which they argue establishes a precedent that an intervenor may not substitute as a petitioner.

In the Process Gas case, (as is the case in the pending APGA v. DOE case) the petitioner sought voluntary dismissal of its petition for review of a decision, but an intervenor — SCM Corps. — opposed dismissal and moved to substitute as the petitioner. The court rejected the intervenor’s motion, stating that to obtain judicial review, a party must meet three clauses: It must have participated in the initial proceeding, it must have raised its objections in its own application for rehearing, and it must have filed a petition for review within 60 days of its disposition to the rehearing application.

HARDI’s motion to intervene was issued on Jan. 20, 2013, more than 60 days after the nonweatherized furnace standards were finalized (Oct. 27, 2011). “HARDI did not file a petition for review, but instead filed a motion to intervene and, even if the court was to construe the motion to intervene as a petition for review, HARDI’s petition would have to be dismissed as untimely filed, because a petition for review must be filed within 60 days of the challenged order.”

Raab, with the Department of Justice, agreed, stating that the time to file a petition for review expired in December 2011 — more than a year before HARDI’s response to the joint motion.

HARDI representatives, and their legal team, said they see things differently. “It all depends on how the court interprets the law, and how the judge views intervening parties,” said Melch. “We will bring a precedent of our own and will make the best legal argument possible to protect our members. We’re looking forward to what the court has to say on the matter.”

While the case continues to simmer, a potential May 1 implementation date requiring a minimum 90 percent AFUE performance in the Northern states remains effective until the court rules otherwise.

“The May 1 date is very real, and is something that needs to be considered very closely. As we push closer, we acknowledge that there are some strategies that exist to overcome that deadline,” said Melchi. “In this instance, if we have an opportunity to fix the entire efficiency rule — for furnaces and air conditioners — we have to take that opportunity.”

Publication date: 2/25/2013
 

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