A legal stay of the furnace regional standards has been granted by the U.S. Court of Appeals for the D.C. Circuit. The stay deems that the Department of Energy (DOE) cannot legally enforce regional standards until the litigation is resolved.
In another development, the Court is giving HARDI the right to be heard in front of a merits panel in regards to the furnace regional standards case. Although it has not granted the association’s request to replace the American Public Gas Association (APGA) as petitioner against the DOE, it is going to consider this request and allow HARDI to make its case.
Weeks prior to the stay, the DOE issued a statement that the rule requiring all nonweatherized gas furnaces in the Northern region adhere to a minimum 90 percent AFUE standard beginning May 1 would not be immediately enforced. Despite the DOE’s instructions that the standard not be enforced, it was still on the books.
The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) felt it was in the best interest of the industry to have it stayed officially and filed an unopposed emergency motion.
The manufacturer association didn’t expect was the new instructions given by the court after the announcement.
“We modified our initial motion to get all of the participating parties to agree and because there was no controversy it went through as expected,” said David Calabrese, general counsel and senior vice president of policy at AHRI. “What was surprising was that the Court asked for everyone involved to provide further briefs and information for and against both the HARDI motion and the DOE settlement proposal. Frankly, we see this as unnecessary. Both of those motions were fully briefed and commented on. We don’t think it’s necessary to do anything further.”
According to Jon Melchi, director of government affairs for HARDI, the stay itself has little bearing on the lawsuit the association filed on Jan. 25, 2013. HARDI’s goal is to have the central a/c and heat pump standards rescinded as well, but so far there have not been any indications as to which way the Courts will rule.
“We view the stay as a positive development and are supportive of the Court’s decision,” said Melchi. “The Court has asked the parties involved to begin preparing additional briefs which leads me to believe they (the court) are giving serious consideration to HARDI’s motion to substitute.”
He explained that the stay provides an increased level of certainty for distributors.
“The policy statement put forth by DOE in early April still left open the possibility of enforcement if DOE was to change its mind. This stay forbids that.”
SLOW PROCESS
Moving forward, AHRI is concerned that the request for more briefs to be filed is going to stretch this process even further than estimated. Although impossible to say for sure, legal and scheduling indications before the request for further input placed oral arguments somewhere in October this year with a final rule possibly issued by March of 2014. The approximately two extra months to complete a briefing schedule, however, could push oral arguments to December 2013 or January 2014. If this occurs, a final rule may not be issued until sometime possibly in June or July of next year.“And then we have the other part of this. There are new standards for central a/c which take effect in 2015,” said Calabrese. “We could be getting up against that 2015 deadline and find ourselves in the position where we have to ask for another stay. It is feasible to think that we could be in the mid-part of next year and there’s no decision, the court’s still waiting, and we’re still in the dark about what’s happening.”
As for a reason to the delays in ruling, Calabrese pointed out two possible explanations. The first is the status of the Court. With one of the appeals courts being short a few judges, the docket is packed. This is causing some delays. The second reason looks to the complexity of this case.
“All these motions and cross motions might have the Court a little befuddled,” he explained. “I think part of its request for more briefings is so it can sort this out before a rule is made.”
NEXT BUSINESS STEPS
Neither HARDI nor AHRI are advising their members to make any big changes right now. The DOE’s non-enforcement bought the industry some time, but the stay provides distributors, manufacturers, and contractors some assurance that they will not be dealing with a final regional standards rule for a while.“Distributors should continue to be on the lookout for developments in this case,” instructed Melchi. “This motion should allow some to trend toward standard practices in regards to the stocking of heating equipment in the Northern region, although I doubt we will see a ‘return to normal’ until the case has run its course.”
REGIONAL STANDARDS TIMELINE
• Dec. 19, 2007 - President George W. Bush signs the Energy Independence and Security Act of 2007 (EISA) into law. The legislation provides Bush the authority to establish regional standards for residential furnaces and central air conditioning equipment.
• Oct. 13, 2009 - A group of HVACR manufacturers and energy efficiency advocates signed a consensus agreement designed to improve regional energy-efficiency standards and building codes. The signatories, including Air-Conditioning, Heating & Refrigeration Institute (AHRI), Alliance to Save Energy, American Council for an Energy-Efficient Economy, and more than a dozen HVACR manufacturers, proposed that the standards could save consumers as much as $13 billion in energy costs by 2030.
• Jan. 15, 2010 - AHRI and efficiency advocates officially submit their regional standards consensus agreements to DOE.
• March 11, 2010 - DOE publishes a rulemaking analysis plan, requesting recommendations from stakeholders. Numerous parties begin to provide affirmation and opposition to the consensus agreement.
• June 27, 2011 - The Department of Energy (DOE) opens the public comment period on its regional standards rulemaking, accepting statements through Oct. 17, 2011.
• Oct. 25, 2011 - The DOE adopts its regional standards, dividing the country into three regions (North, South, and Southwest), with the minimum efficiency standards for equipment varying by type and area. The new rules for nonweatherized furnaces will become effective May 1, 2013; and for weatherized furnaces, central air conditioners, and heat pumps, Jan. 1, 2015.
• Dec. 23, 2011 - The American Public Gas Association (APGA) filed an appeal of the regional standards rule in the U.S. Court of Appeals for the D.C. Circuit. APGA argued that the DOE erred in using the direct final rule process in the context of the case in issuing a rule that bans the noncondensing furnace in the Northern region and in adopting a new standard that will cause fuel switching, which is without economic justification. In challenging the rule, AGPA asked the court to vacate the rule and remand it for a clean round of notice and comment rulemaking.
• June 6, 2012 - The Federal Trade Commission (FTC) releases a notice of proposed rulemaking (NOPR) on an updated version of its yellow Energy Guide labels. The labels provide efficiency data and were heralded by many in the industry as a potential regional-standards enforcement tool.
• July 30, 2012 - As uncertainty continues to mount regarding the standards’ future, AHRI formally petitions the DOE for an 18-month extension for residential nonweatherized gas furnaces from the May 1, 2013, implementation date. AHRI’s request would have delayed compliance to Nov. 1, 2014.
• Jan. 11, 2013 - After several months of mediation, the APGA and DOE filed a joint motion to vacate and remand the rule setting new standards for nonweatherized natural gas furnaces. The pending settlement agreement, if accepted by the court, would rescind the furnace portion of the rule and eliminate the May 1, 2013 implementation date. DOE would remand the rule for a further notice and comment period.
• Jan. 25, 2013 - Heating, Air-conditioning, and Refrigeration Distributors International (HARDI) filed a motion to continue the regional standards case, substituting themselves in as the petitioner in place of APGA. HARDI argued that by continuing the case, they hoped to rescind the central air conditioner and heat pump standards, in addition to the furnace standard.
• Feb. 7, 2013 - AHRI filed a motion in opposition of HARDI’s request to substitute as a petitioner, claiming that HARDI’s request came outside its legal window of opportunity. Additionally, the DOE claims that if HARDI’s motion is accepted, they’ll withdraw their support for the pending settlement agreement, thus threatening the reinstatement of a potential May 1, 2013, implementation date.
• March 8, 2013 - AHRI files a request to stay the case.
• April 5, 2013 - DOE releases a statement that declares they will not begin enforcing the regional standards mandates until the court rules on the pending settlement agreement.
• May 1, 2013 - U.S. Court of Appeals for the D.C. Circuit grants AHRI’s unopposed emergency motion requesting a stay of the May 1, 2013 compliance date for the regional furnace standards. This legally bars DOE from enforcing regional standards until settlement is resolved.
- Compiled by Herb Woerpel
• Oct. 13, 2009 - A group of HVACR manufacturers and energy efficiency advocates signed a consensus agreement designed to improve regional energy-efficiency standards and building codes. The signatories, including Air-Conditioning, Heating & Refrigeration Institute (AHRI), Alliance to Save Energy, American Council for an Energy-Efficient Economy, and more than a dozen HVACR manufacturers, proposed that the standards could save consumers as much as $13 billion in energy costs by 2030.
• Jan. 15, 2010 - AHRI and efficiency advocates officially submit their regional standards consensus agreements to DOE.
• March 11, 2010 - DOE publishes a rulemaking analysis plan, requesting recommendations from stakeholders. Numerous parties begin to provide affirmation and opposition to the consensus agreement.
• June 27, 2011 - The Department of Energy (DOE) opens the public comment period on its regional standards rulemaking, accepting statements through Oct. 17, 2011.
• Oct. 25, 2011 - The DOE adopts its regional standards, dividing the country into three regions (North, South, and Southwest), with the minimum efficiency standards for equipment varying by type and area. The new rules for nonweatherized furnaces will become effective May 1, 2013; and for weatherized furnaces, central air conditioners, and heat pumps, Jan. 1, 2015.
• Dec. 23, 2011 - The American Public Gas Association (APGA) filed an appeal of the regional standards rule in the U.S. Court of Appeals for the D.C. Circuit. APGA argued that the DOE erred in using the direct final rule process in the context of the case in issuing a rule that bans the noncondensing furnace in the Northern region and in adopting a new standard that will cause fuel switching, which is without economic justification. In challenging the rule, AGPA asked the court to vacate the rule and remand it for a clean round of notice and comment rulemaking.
• June 6, 2012 - The Federal Trade Commission (FTC) releases a notice of proposed rulemaking (NOPR) on an updated version of its yellow Energy Guide labels. The labels provide efficiency data and were heralded by many in the industry as a potential regional-standards enforcement tool.
• July 30, 2012 - As uncertainty continues to mount regarding the standards’ future, AHRI formally petitions the DOE for an 18-month extension for residential nonweatherized gas furnaces from the May 1, 2013, implementation date. AHRI’s request would have delayed compliance to Nov. 1, 2014.
• Jan. 11, 2013 - After several months of mediation, the APGA and DOE filed a joint motion to vacate and remand the rule setting new standards for nonweatherized natural gas furnaces. The pending settlement agreement, if accepted by the court, would rescind the furnace portion of the rule and eliminate the May 1, 2013 implementation date. DOE would remand the rule for a further notice and comment period.
• Jan. 25, 2013 - Heating, Air-conditioning, and Refrigeration Distributors International (HARDI) filed a motion to continue the regional standards case, substituting themselves in as the petitioner in place of APGA. HARDI argued that by continuing the case, they hoped to rescind the central air conditioner and heat pump standards, in addition to the furnace standard.
• Feb. 7, 2013 - AHRI filed a motion in opposition of HARDI’s request to substitute as a petitioner, claiming that HARDI’s request came outside its legal window of opportunity. Additionally, the DOE claims that if HARDI’s motion is accepted, they’ll withdraw their support for the pending settlement agreement, thus threatening the reinstatement of a potential May 1, 2013, implementation date.
• March 8, 2013 - AHRI files a request to stay the case.
• April 5, 2013 - DOE releases a statement that declares they will not begin enforcing the regional standards mandates until the court rules on the pending settlement agreement.
• May 1, 2013 - U.S. Court of Appeals for the D.C. Circuit grants AHRI’s unopposed emergency motion requesting a stay of the May 1, 2013 compliance date for the regional furnace standards. This legally bars DOE from enforcing regional standards until settlement is resolved.
- Compiled by Herb Woerpel
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