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AHRI Prepared to Challenge Albuquerque's Energy Code

June 23, 2008
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The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) is preparing to seek a possible injunction in federal court against the city of Albuquerque, N.M., if its council and mayor continue to stick with the city’s new Energy Conservation Code and High Performance Building Ordinance, scheduled to become effective July 1.

AHRI said the city’s new legislation, which mandates 14 SEER air conditioning and 90 percent AFUE heating equipment, violates federal law. According to AHRI and other industry insiders and associations, the city must get a waiver of federal preemption for provisions in the code. They state that before the code can be enforced, the U.S. Department of Energy (DOE) must grant this waiver after a thorough review process “that could take years to complete,” said Charles McCrudden, director of government relations for the Air Conditioning Contractors of America (ACCA).

“AHRI has engaged Albuquerque city staff and officials regarding the violations of federal preemption found in the Albuquerque Energy Conservation Code and the Albuquerque High Performance Building Ordinance,” wrote Robert F. Helminiak, assistant director, government affairs, deputy general counsel, AHRI, in a prepared statement for The NEWS. “The city passed legislation that violates federal preemption. AHRI, ACCA, and HARDI [Heating, Airconditioning, and Refrigeration Distributors International] staff and a task force of local ACCA and HARDI members met with city officials stating that the enacted code violates federal law and, if not modified to reflect federal requirements, AHRI would have no choice but to seek an injunction in federal court. This meeting led the city to delay enforcement of the laws and to promise amendments to bring the city into compliance.

“Unfortunately, the city proposed amendments do not resolve the federal preemption issue and the city would still be violating federal law upon enforcement of the codes.”

Helminiak said AHRI has retained a local law firm, Modrall, Sperling, Roehl, Harris & Sisk, P.A., to represent AHRI in the matter.

“Modrall made efforts to inform the mayor and the city attorney that the proposed amendments did not resolve the issue of federal preemption. AHRI sent a letter outlining the violations to the city council. The letter outlined the legal problems with the legislation and the red line drafts provided a line-by-line identification of the language in violation of federal preemption,” wrote Helminiak.

Despite AHRI’s extensive efforts - including efforts from local contractors and distributors, plus the national offices of ACCA and HARDI - the city council, at the mayor’s urging, passed the proposed amendments on June 2. According to AHRI, the effective dates for the city code are July 1 of this year for new construction, and July 1 of next year for retrofits.

The outcome of this challenge could have ramifications for the entire HVACR industry, say the associations. If Albuquerque goes through with its new energy code, other cities and states could follow. This could cause chaos, according to industry officials.

“While HARDI and our local distributor members would still be unable to support these codes that strip consumers of choice, significantly drive costs up, and impede the free market’s ability to satisfy local demands even if they were enforceable, the fact that they are unenforceable is especially troubling because unenforceable codes only put at risk the best of companies that attempt to comply with them,” said Talbot Gee, vice president of HARDI. “Without an enforcement mechanism, the city’s proposed codes open the doors to a ‘black market’ of less expensive HVAC equipment with fewer guarantees of proper installations and no guarantee of any energy savings.”

LINES DRAWN

Industry’s battle with Albuquerque heated up this year. The new commercial and residential building codes, signed into law by the mayor of Albuquerque on Sept. 25 last year, was scheduled to become effective on April 1 of this year. The original version mandated 15 SEER air conditioning and 90 percent AFUE heating equipment for all residential and commercial new construction, remodels, and replacements.

Industry officials met with city officials on several occasions to attempt to bring Albuquerque’s new laws into compliance with federal law. It managed to postpone enactment of the new laws from April 1 to July 1. After more meetings, industry pressure was instrumental in city officials amending the new law from mandating 15 SEER to 14 SEER, which still violates federal standards. At the same time, city officials agreed to change the enforcement date for retrofits to July 2009. Simply put, if Albuquerque’s law goes through as is, all new construction must install 14 SEER units and 90 percent AFUE equipment after July 1, while all retrofits after July 1, 2009 will have the same requirements.

While this could potentially be seen as an improvement, the fact remains that any state or local mandates greater than 13 SEER and 78 percent AFUE exceed the federal minimum standard set by the DOE.

“It is ACCA’s interpretation that the city may not enforce the code without a waiver of preemption,” said McCrudden. “The city’s ordinance violates the law and they are aware of this fact. Yet, the city insists on pushing forward, resulting in uncertainty for the local HVACR community.”

Industry representatives met with DOE officials earlier this year, noting that the parties present included HARDI, ACCA, AHRI, and Plumbing-Heating-Cooling Contractors-National Association (PHCC).

Should the city choose to enforce the code, officials believe contractors would be placed in a legal no man’s land. Said McCrudden, compliance with the federal statute “would place them in jeopardy with the city’s illegal law.”

He stated, “If the city gets away with this, nothing could stop other cities from doing the same.”

A city going against federal standards has never happened before, said McCrudden. “This is unprecedented.”

Over 100 local HVAC professionals gathered in late March to discuss ways to rectify Albuquerque’s controversial Energy Conservation Code. The meeting, hosted by ACCA, was sponsored by eight wholesale distributor members of HARDI that supply the Albuquerque market - Doc Savage Supply, Contractors Heating & Supply, Albuquerque Winair, Hercules Industries, Burke Engineering, Johnstone Supply, Perry Supply, and Gorman Industries.

Chris Lopez of Albuquerque Winair, an HVAC wholesale distributor and HARDI member, noted that the city should be aware of “how such unenforceable equipment standards would hurt local businesses and, more importantly, local home and business owners.”

After one meeting, Albuquerque contractor Bill Howland of Affordable Service Inc. said he was ready to fight.

“It is our responsibility as heating and air conditioning contractors to fulfill the demands and needs of our customers, so the market must let the home or business owner be able to decide what best fits their budget and anticipated use,” said Howland. “If the city is serious about trying to increase energy efficiency, then it and our local utilities should provide me with tools to help my customers gain access to the high-efficiency HVAC equipment they often want but fear they can’t afford. But eliminating my customers’ choices by arbitrarily raising equipment standards and mandating the most expensive equipment only discourages the purchaser and installation of new heating and cooling equipment that would save considerable energy over their existing system.

“This could cause a severe hardship on HVAC contractors who depend on a/c conversions in the spring and summer months to make up for a slow winter sales, potentially putting some out of business.”

Publication date: 06/23/2008

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