HVAC Residential Market / Furnaces / Air Conditioners / Air-Source Heat Pumps / HVAC Light Commercial Market / Split Systems / Standards & Legislation

Court Accepts Regional Efficiency Standards Settlement

Regional Standards Lawsuit Officially Ends with Court’s Approval

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 action officially ends the 2 ½-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 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.

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.”

Long and Winding Road

The regional standards lawsuit began more than two years ago when the American Public Gas Association (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 the joint settlement agreement.

To learn more about the settlement agreement, including which standards take effect and when, visit bit.ly/RegionalStandardsSettled.

Publication date: 5/5/2014 

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