Suit Filed Against Albuquerque's Energy Code

July 21, 2008
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The Air Conditioning, Heating, and Refrigeration Institute (AHRI) - in conjunction with several industry associations and numerous Albuquerque, N.M.-local HVACR distributors, dealers, and contractors - filed a formal complaint in U.S. District Court, District of New Mexico, seeking “declaratory and injunction relief under federal law” against enforcement of the city of Albuquerque’s new Energy Conservation Code and High Performance Building Ordinance, which became effective July 1.

AHRI contends the city’s new legislation, which mandates 14 SEER air conditioning and 90 percent AFUE 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 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).

The complaint was filed after the city’s new energy codes went into effect after several postponements. On July 1, the city did “administratively” postpone enforcement of the new energy codes for 90 days. However, AHRI and others contend the move did not resolve the issues.

“ACCA is pleased that the city of Albuquerque delayed enforcement to the energy code so that the legal questions related to the code can be remedied,” said McCrudden. “However, this is the second time the city has postponed enforcement within days of enactment in the last three months. The city’s actions have created a detrimental and uncertain environment for contractors, distributors, and consumers.”

In the filed complaint, it states: “Numerous provisions of the City Ordinances challenged in this action conflict with and are preempted by federal law and regulations which govern the energy efficiency and energy use of certain residential and commercial heating, ventilation, and air conditioning products ... as a result, these provisions of the City Ordinances violate the Supremacy Clause in Article VI of the United States Constitution.”

The suit goes on to state that the local distributors and contractors “have suffered and will continue to suffer,” provisions in the ordinances prohibit them from selling and installing HVAC products “that do not meet the requirements set forth in the City Ordinances,” and “the challenged provisions of the City Ordinances will increase the costs of residential and commercial HVAC products and water heaters used in the city of Albuquerque.”

In addition to AHRI, plaintiffs listed in the complaint, filed July 3, include ACCA; Heating, Airconditioning, and Refrigeration Distributors International (HARDI); Gorman Industries Inc.; Albuquerque Winair Co.; Action Air Conditioning Inc.; JMT Inc.; Affordable Service Inc.; Morrison Supply Co.; Perry Supply Co. Inc.; Academy Plumbing, Heating, Air Conditioning & Electric Inc.; Thompson Heating and Air Conditioning Inc.; and Comfy Homes LLC.

BATTLE CONTINUES

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 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 of 2009. Simply put, Albuquerque’s new building codes state that 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.

Any state or local mandates greater than 13 SEER and 78 percent AFUE exceeds the federal minimum standard set by the Department of Energy.

Robert F. Helminiak, assistant director, government affairs, deputy general counsel, AHRI, said the association has tried to resolve matters with the city for months. “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 Helminiak, in a prepared statement for The NEWS.

“The city passed legislation that violates federal preemption. AHRI, ACCA, and HARDI 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 the efforts, the city council, at the Mayor Martin Chavez’s urging, passed the proposed amendments on June 2.

RAMIFICATIONS

The outcome of this challenge could have ramifications for the HVACR industry. 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.”

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.”

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

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

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.”

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.”

Phone calls by The NEWS to Mayor Chavez for comment went unreturned.

Publication date: 07/21/2008

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