While a pending settlement agreement led many industry members to believe an end to the regional energy-efficiency standards saga was near, continued legal maneuvering and a stressed judicial system has many convinced that a resolution may in fact be months away.

Background Check

Authority for regional energy-efficiency standards was first authorized by Congress in 2007. The concept eventually matured into an OEM-supported government regulation mandating minimum-efficiency performance for nonweatherized natural gas furnaces, central air conditioners, and heat pumps, based on installation location.

As the paperwork was finalized and the industry inched toward the rule’s inaugural May 1, 2013 implementation date, the American Public Gas Association (APGA) filed a legal appeal of the standard, arguing that the U.S. Department of Energy (DOE) incorrectly utilized its direct final rule (DFR) process in issuing minimum-efficiency standards for nonweatherized natural gas furnaces, air conditioners, and heat pumps.

Eventually, the DOE and APGA reached a settlement agreement, which — pending court approval — would have vacated the furnace standard and remanded the rule for a fresh notice and comment period.

Several HVAC and environmental associations filed motions throughout the legal process, including Heating, Air-conditioning, and Refrigeration Distributors International (HARDI), which filed a motion requesting that the court allow it to substitute as the petitioner in the case. If granted, HARDI could potentially extend the case’s scope beyond the furnace standards in question to include the DFR relating to central air conditioners and heat pumps.

Many parties have since sounded off on HARDI’s motion, including the DOE, which said if the court were to grant the request, they’d withdraw their support for a settlement, which could potentially cement the regional standards rule as law.

Ongoing Saga

On May 13, APGA requested that the U.S. Court of Appeals for the D.C. Circuit deny HARDI’s request to substitute as a petitioner. APGA’s motion further asked the court to grant the joint APGA-DOE settlement agreement, which would vacate the nonweatherized furnace portion of the furnace standards.

On May 28, HARDI filed a response to the APGA’s motion reiterating its desire to substitute as the petitioner in the case. HARDI asked the court to deny the APGA’s request to skip re-briefing the main issues, as the court suggested in its May 1 ruling.

“We’d like the court to reject all motions outright, allow us to submit briefs on the case, and move forward,” said Jon Melchi, director of government affairs for HARDI. “If you’re going to establish rules and regulations that impact the lives of business owners across the country, you have to follow the rules, and that’s all we’ve asked the DOE to do. It’s unfortunate we have to go to court for that to occur.”

But the DOE, along with several intervenors, also filed a joint response on May 28 in support of the APGA’s May 13 motion. Intervenors include the Air-Conditioning, Heating, and Refrigeration Institute (AHRI); Alliance to Save Energy; American Council for an Energy-Efficient Economy; Air Conditioning Contractors of America (ACCA); and others.

“We just want this thing resolved,” said David Calabrese, general counsel and senior vice president of public policy for AHRI. “The problem we have with this litigation going further, and what’s in the HARDI response, is that it opens it back up and restarts the briefing schedule, which wastes the time and money of all the parties. If the court accepts our motion, they could make a decision literally this month. Or, they could schedule oral arguments, which could take until later this year.”

Charlie McCrudden, vice president of government relations for ACCA, said his association hopes to wrap up the lawsuit as quickly as possible. “ACCA joined this response in the hopes of moving this case forward quickly so that we can have certainty about furnace rules and about the regional standards rules for central air conditioners that are scheduled to go into effect Jan. 1, 2015,” he said.

Liz Tate, government affairs manager for APGA, said HARDI’s effort to challenge the DOE’s DFR on air conditioner and heat pump standards is too little, too late.

“We negotiated a settlement with DOE over just the furnace portion of this rule,” Tate said. “HARDI had the opportunity to file as petitioner at the beginning of this, but they did not. We do not think they should be able to replace APGA as the petitioner now that we’ve already come to a settlement agreement.”

Tate said the timeline of the regional standards case is at the mercy of the court. A definitive resolution, she said, could take weeks, months, or perhaps longer to reach. “The appellate court is one of the most overloaded circuits in the U.S.,” she added.

But Melchi said HARDI will not be dissuaded.

“Despite a lot of talk to the contrary, we’re still here and eager to continue to press our case,” he said. “We believe the most important thing is to get the right verdict and feel that when we’re ultimately successful, the DOE will, more than ever, have to follow the proper protocol. I don’t see how that’s anything but a winning proposition for our industry, if we know what the government can and can’t do.”

For a comprehensive look at the regional standards timeline, visit http://bit.ly/ZOxWfp.

Publication date: 5/27/2013

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