Legislation Paints Sweeping HVAC Changes

March 15, 2010
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There is no doubt that most of the major changes affecting the HVAC industry come from legislation, either laws already passed or those coming down the pike. In this installment of “The Changing Face of HVACR,” two legislative representatives from key industry organizations share their views on the three most significant pieces of legislation changing the face of HVACR, and what contractors need to do to respond appropriately.

According to Charlie McCrudden, vice president of government relations for the Air Conditioning Contractors of America (ACCA), the three most significant pieces of legislation changing the face of HVAC contracting are health care reform, global warming/climate change, and the Employee Free Choice Act.

David B. Calabrese, senior vice president of Policy for the Air-Conditioning, Heating, and Refrigeration Institute (AHRI), said climate change, energy, and tax incentives are among the top pieces of legislation affecting the face of HVAC, both now and into the foreseeable future.

HEALTH CARE, FREE CHOICE

McCrudden explained that in the health care bill, the employer mandates to provide a minimum level of health care coverage to employees, “will impact all contractors, whether they currently offer a plan or not.”

He also pointed out the potential influence of the Employee Free Choice Act of 2009. Found in the text of H.R. 1409 and S. 560, the act “would amend the National Labor Relations Act [NLRA] to establish an efficient system to enable employees to form, join, or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes.”

According to the National Labor Relations Board (NLRB), the governing board established in the NLRA, “When a petition for an election is filed, a board agent in one of the field offices is assigned to process it. If there is a showing that at least 30 percent of an appropriate unit of employees at the workplace wish to be represented collectively by a union or by another group, a board agent will hold a secret ballot election. If a majority of employees choose to be represented, the NLRB may certify that representative to bargain collectively with the employer on behalf of the employees in the unit.”

Union certification is currently a two-step procedure initiated with the card check process. Once certain requirements are met, then a secret-ballot election may be held.

The Employee Free Choice Act would change these procedures. Instead of having the choice of using the card-check or secret-ballot election in certifying unions, employers would be confined to the card-check process.

This move “would upend the organizing process by removing the secret ballot election that protects a worker’s private vote on whether to join a union,” said McCrudden.

“There are other bills and proposals out there that are important to the industry,” he said. “For example, Congress must address the estate tax before it returns next year. And a potential ‘jobs bill’ could include new residential and commercial incentives for replacing HVACR systems.”

CLIMATE CHANGE, ENERGY, CONSENSUS

Global warming and climate change legislation, though stalled in the Senate, would have a dramatic influence on American businesses through an increase in the price of the basic building blocks of the economy: raw materials and energy, said McCrudden.

“For an industry that is reliant upon vehicle fleets, it has the potential to drive up the price of fuel.” He also pointed out that the bill before Congress includes a phaseout of HFC refrigerants.

Calabrese pointed out that the energy bill will include the consensus agreement reached by AHRI and environmental groups - the American Council for an Energy Efficient Economy (ACEEE), Alliance to Save Energy (ASE), the Natural Resources Defense Council (NRDC), the Northeast Energy Efficiency Partnership (NEEP), the Appliance Standards Awareness Project (ASAP), the California Energy Commission (CEC), the Northwest Power and Conservation Council (NWPCC), and more than a dozen individual furnace and air conditioner manufacturers.

One of the key areas of the consensus affecting contractors - and indeed everyone in the industry - is the establishment of regions with different efficiency levels. Contractors need to know what changes in mandatory efficiency may be coming to their area(s). For cooling equipment, the new regions and their minimum cooling efficiencies would be: North, 13 SEER; South, 14 SEER; and Southwest, EER matrix (Calabrese pointed out that this doesn’t deal with partial loads).

There are different levels for furnaces as well. In the North, for example, most furnaces would need to have an efficiency of 90-percent AFUE or more, essentially requiring condensing furnaces. This is a change from the current national standard of 78 percent.

“This momentous agreement strikes a balance between the desire for greater state and regional flexibility and the need for a uniform marketplace,” stated the institute when announcing the consensus. “It also accounts for the long-term energy future of the nation by allowing for more efficient systems to be installed in new homes which will last for many decades to come.”

This will be a federal law, said Calabrese. “We are working with other groups to discuss enforcement.” Making sure the right size equipment is being installed is, of course, important, and in general, “Contractors need to be aware of changing efficiency levels.”

There is an important consideration for replacements: “These requirements would not apply to simple one-for-one replacement of products in existing buildings as long as the replacement would not result in an increase in capacity of more than 12,000 Btuh for central air conditioners/heat pumps, or more than 20 percent for other covered products,” stated AHRI.

The new standards will take effect in 2013 for nonweatherized furnaces, and in 2015 for air conditioners, heat pumps, and weatherized furnaces.

The agreement is expected to save 3.7 quadrillion Btu of energy nationwide between now and 2030. It will raise the minimum efficiency of residential central a/c systems by about 8 percent, furnaces by about 13 percent, and result in a 5-percent reduction of the total heating energy load, as well as a 6-percent reduction of the total cooling energy load in 2030.

“The HVACR industry is now under the scrutiny of Congress and regulators,” McCrudden said. “In order to promote and protect the industry, contractors must get engaged in the legislative and regulatory process like never before. ACCA provides its members the tools to send messages to Capitol Hill through its Grassroots Action Center. Contractors can also attend ACCA’s annual Washington Fly In and make personal visits to their members of Congress.

“The most important thing is to make their voices heard.”

Publication date: 03/15/2010

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