Asking for Fairness

The issue, Dietz said, is that the DOE didn’t take all stakeholder comments into account when promulgating the rule, which goes into effect March 27, 2017.

“When the NOPR [Notice of Proposed Rulemaking] for this type of equipment was issued, DOE asked for comments, and we provided them,” he said. “But the final rule doesn’t sufficiently take manufacturer comments into account, in our view. As a result, it doesn’t meet the twin tests of economic justification and technological feasibility,” he said.

“We’re not opposed to efficiency standards,” Dietz said. “We have often worked with DOE and other stakeholders in a collaborative process. In asking for this court review, we’re just trying to make sure everyone pays attention to the process. There wasn’t the required transparency here,” said Stephen Yurek, president and CEO, AHRI.

“Our industry has a proud history of innovation that has produced highly efficient, affordable HVACR and water heating equipment that increases the quality of life for all Americans. We also have a proud history of collaborating with government agencies on energy-efficiency standards that are economically justified and technologically feasible, that benefit consumers, and that adequately take into account potential negative economic impact,” Yurek said. “DOE’s final rule on commercial refrigeration equipment does not meet these criteria, and, as a result, we have no choice but to challenge the rule in court.”

Though Zero Zone declined to comment on ongoing litigation, Robert DelVentura, director of global research and development for Heatcraft Worldwide Refrigeration, agreed that there “is a concern because there is a cost to comply” with the new standards. Heatcraft is the parent company of Kysor/Warren, which also manufactures commercial refrigeration equipment.

DelVentura stressed, however, that Heatcraft is not taking sides in this particular matter, though he can understand why AHRI and Zero Zone have filed suit.

“I will agree that the discussion is in an area where there is some ambiguity,” DelVentura said. “The DOE has taken a lot of time to listen to industry input, and they have made appropriate changes in areas, but there are still areas that probably need a little more discussion.”

While DOE and Zero Zone are asking for DOE to review its final rule, Andrew deLaski, executive director for the Appliance Standards Awareness Project (ASAP), which advocates for advancing appliance, equipment, and lighting standards, said ASAP supports DOE’s ruling.

“We support it because it will drive large, cost-effective energy savings using already available technology,” deLaski said. “DOE’s analysis, developed with input from industry and other stakeholders, shows that the increased cost to make commercial refrigerators more efficient will pay back in lower utility bills within seven years, depending on the product category (4.3 years is the average). In practice, we’ve found that the cost to make products more efficient generally ends up being lower than what DOE predicts, so we would expect the actual payback periods to be even shorter.”

Though he agrees Zero Zone and AHRI have the right to petition DOE to review the rule, deLaski said they could be getting themselves into an awkward situation.

“This type of lawsuit typically takes at least a couple of years to play out, and the standard takes effect three years from now,” deLaski said. “The industry will have to make contingency plans. If they lose the lawsuit, they’ll have to be ready to comply with their full product lines in March 2017; if they win, they’ll get another round of rulemaking. So, manufacturers have to simultaneously plan to comply with the standard and not comply with the standard. This litigation will certainly make their business planning very challenging.”

But Dietz said AHRI is only trying to do what’s best for its manufacturer members. “There are a lot of rulemakings coming down the pipe, and we want to make sure all the rules are being followed and the process is transparent,” Dietz said. “That’s the only way to make sure the efficiency standards are at levels that benefit consumers and are fair to industry.”

Editor’s note: The DOE did not respond to requests for comment about the petition.

Publication date: 6/23/2014 

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