WASHINGTON — The U.S. District Court of Appeals for the D.C. Circuit issued an order accepting the March 11 joint settlement agreement in the ongoing regional standards lawsuit. The court’s actions officially ends the two-plus year legal battle between the U.S. Department of Energy (DOE) and several organizations, including Heating, Air-conditioning, and Refrigeration Distributors International (HARDI); Air-Conditioning, Heating, and Refrigeration Institute (AHRI), and ACCA.

The settlement agreement, which was filed jointly on March 11, vacates the contentious regional furnace efficiency standards and restarts the rulemaking process, this time giving stakeholders more opportunities to provide input throughout the rulemaking process. The settlement also gives the industry an 18-month sell-through period to comply with the Jan. 1, 2015, efficiency standards for split system air conditioners in order to help avoid stranded inventory. Additionally, as part of the agreement, the U.S. Department of Energy (DOE) has agreed not to penalize distributors as part of enforcement of the standard.

Sigh of Relief

The court’s order represents a great victory for the organizations that were involved in developing the final settlement agreement, including HARDI, ACCA, AHRI, and the American Public Gas Association (APGA).

Talbot Gee, executive vice president and COO, HARDI, said the organization is “pleased to see the court accept this settlement and officially provide HVACR distributors with the relief HARDI fought so hard for.” He added, “Now, our attention turns to working with our industry partners and the DOE to reform the processes that led to the lawsuit and to find a common-sense solution to enforcing the standard.”

Paul T. Stalknecht, ACCA president and CEO, also said he was pleased with the court’s actions.

“We are thankful that the court accepted the settlement motion and ended this prolonged lawsuit,” he said. “The settlement vindicates ACCA’s concerns about the DOE requiring condensing furnaces without regard for potential impact on homeowners. We are also pleased to see that our comments aren’t likely to be overlooked in future rulemakings. Now, the industry can move forward to develop an enforcement plan for the regional standards on split system and single package central air conditioners.”  

AHRI president and CEO Stephen Yurek called the settlement a “significant accomplishment for the industry,” and said the court’s actions today create certainty for manufacturers, distributors, and technicians.

“We can now move forward, not only with implementing the new regional a/c standards and national heat pump standard, but we can also put our full energy into developing a workable enforcement scheme for regional standards,” he said. “The leverage that was created by the litigation caused DOE to agree to terms that will really help our industry, not only for today as we look at the regional standards going into effect for cooling equipment, but also for the future, for having a clearer picture of the DOE’s rulemaking process.”

Bert Kalisch, president and CEO of APGA, said the court’s order “marks an overall energy and emission savings victory for the country.” He added that APGA “looks forward to working with DOE and other stakeholders on a new furnace efficiency standard that serves the best interests of American consumers, regardless of region or financial wherewithal.”

Long and Winding Road

The regional standards lawsuit began more than two years ago when APGA challenged the U.S. Department of Energy’s (DOE) rulemaking process for promulgating regional energy-efficiency standards for nonweatherized natural gas furnaces. In early 2013, APGA and DOE filed a settlement agreement to vacate and remand the furnace standards for rulemaking, though that agreement was not accepted by the court.

Shortly thereafter, HARDI filed a motion to continue the regional standards case, substituting themselves as the petitioner in place of APGA. HARDI argued that by continuing the case, they hoped to rescind the central air conditioner and heat pump standards, in addition to the furnace standard. 

Early this year, the court ordered all parties involved in the case to agree to a briefing schedule. During briefing, parties in the case entered mediation, and, several weeks later, on March 11, they submitted a joint settlement agreement.

To view a timeline of events in the regional standards case, which includes links to in-depth coverage, visit http://bit.ly/RegionalStandards.

Regional Standards Settlement

• The energy-efficiency standards for residential nonweatherized gas furnaces in the North have been remanded; the DOE will begin developing a new standard, this time using a more transparent process.

• It is likely that a new furnace standard will not take effect until 2021-2022. Until a new standard is issued, a national standard of 78 percent AFUE is in effect for residential nonweatherized natural gas furnaces, until Nov. 19, 2015, when it is raised to 80 percent.

• Distributors in the South and Southwest will have 18 months (until July 1, 2016) to sell any inventory of 13 SEER equipment manufactured before Jan. 1, 2015. DOE agrees not to hold distributors liable when enforcing the new standard.

• DOE will present a proposal for a negotiated rulemaking regarding the enforcement of the regional standards to the Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC). If approved by ASRAC, DOE will attempt to use a negotiated rulemaking as a means to determine an effective enforcement scheme by engaging all interested parties by gathering data and attempting to reach consensus among stakeholders.

• DOE agrees to evaluate and clarify its direct final rule (DFR) process, which was the focus of the lawsuit against the DOE.

Information courtesy of HARDI.

2015 Efficiency Standards

The following regional and national energy-efficiency standards go into effect on Jan. 1, 2015.

• The efficiency standard for split-system central air conditioners in the South will be 14 SEER as of Jan. 1, 2015; the efficiency standard for split-system central air conditioners in the North will remain 13 SEER; and, as of Jan. 1, 2015, the efficiency standard for split-system central air conditioners in the Southwest will be 14 SEER and 12.2 EER for systems smaller than 45,000 Btu, and 14 SEER and 11.7 EER for systems larger than 45,000 Btu.

• As of Jan. 1, 2015, regional energy-efficiency standards for single-package air conditioners will be 14 SEER in the North, 14 SEER in the Southeast, and 14 SEER and 11 EER in the Southwest.

• As of Jan. 1, 2015, national efficiency standards will be 14 SEER and 8.2 HSPF for split-system heat pumps; 14 SEER and 8.0 HSPF for single-package heat pumps; 13 SEER and 7.7 HSPF for small duct, high velocity systems; 12 SEER for space-constrained air conditioners; and 12 SEER and 7.4 EER for space-constrained heat pumps.

• The national efficiency standard for nonweatherized oil-fired furnaces (not including mobile home furnaces) will be 83 percent AFUE as of Jan. 1, 2015; the national efficiency standard for mobile home oil-fired furnaces will be 75 percent AFUE as of Jan. 1, 2015; the national efficiency standard for weatherized gas furnaces will be 81 percent AFUE as of Jan. 1, 2015; and the national efficiency standard for both weatherized oil-fired furnaces and electric furnaces will be 78 percent as of Jan. 1, 2015.

Information courtesy of ACCA.

Publication date: 4/24/2014

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