Distribution Trends

HARDI Backs Petition for Review of DOE Ruling

Industry Leaders Challenge Efficiency Standards for Walk-in Coolers, Freezers

In August, the Air-Conditioning, Heating, & Refrigeration Institute (AHRI) and Lennox Intl. Inc. filed a petition asking the U.S. Court of Appeals for the 5th Circuit to review the U.S. Department of Energy’s (DOE) final rule establishing energy conservation standards for walk-in coolers and freezers (WICF). The DOE, AHRI said, did not follow proper protocol when developing the rule and issued standards that many in the industry — including HARDI — feel are neither technologically feasible nor economically justifiable with the technology currently available.

“We applaud AHRI and Lennox’s efforts to hold the DOE accountable,” said Jon Melchi, HARDI’s director of government affairs. “It’s what we, as an organization, have aimed at for quite some time. It’s unfortunate that we have to take matters to the judicial system, but it’s why that branch exists, and hopefully the courts will see it proper to hold the DOE accountable to its own processes.”

Waiting on the DOE

On May 27, AHRI and Zero Zone Inc., a manufacturer of refrigerated display cases and refrigeration systems, submitted a petition for court review of the DOE’s final rule establishing energy conservation standards for commercial refrigeration equipment. With the Aug. 4 petition, AHRI and Lennox allege the DOE has again failed to follow its own rulemaking process.

With the DOE denying AHRI’s petition for reconsideration on Sept. 23, AHRI said it now plans to move forward with its lawsuit against the DOE, which had previously been held in abeyance while awaiting the DOE’s response to the petition for reconsideration. In response, HARDI indicated it will continue to support AHRI’s efforts.

“We’re disappointed in the Department of Energy’s decision [to deny the petition for reconsideration] and support the manufacturers’ efforts to fix not only this particular rule but this broken process, which has continually led to conflict between the DOE and our industry,” Melchi said. “We’ll be consulting with our HARDI leadership and industry partners to decide the best path forward in being supportive of AHRI’s efforts.”

Follow the Rules

Melchi called the WICF rulemaking “overly aggressive” and said it would have “a severe, negative impact” on the HVACR industry.According to Stephen Yurek, AHRI’s president and CEO, the organization just wants transparency in the rulemaking process, which is something the DOE has been providing less and less of as it develops regulations faster than ever before. “In issuing this final rule on WICF equipment, DOE exceeded its statutory authority and failed to comply with agency rulemaking requirements,” he said. “As a result, we have no choice but to challenge the legality of the rule.”

“It’s unfortunate that our industry has to continue to, after many attempts at providing information and working in good faith during these processes, turn to the legal system for remedy in hopes of forcing the department to do what they should’ve done all along,” Melchi said. “I think we’ve been on the record as stating this rulemaking is going to have a negative impact on our industry and consumers, who are going to be faced with higher costs and fewer choices.”

“Yes, it’s rulemaking,” Yurek added, “but it’s really dealing with the broken rulemaking process where DOE is not as transparent as they should be. They’re moving as quickly as they can to move rules forward instead of doing it right. We’re hoping it doesn’t become a trend.”

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Charlie McCrudden, senior vice president of government relations for ACCA, said his organization also believes the standards were developed unfairly. He stressed that ACCA will be closely following the lawsuit.

“Like the commercial refrigeration standard, we were disappointed that the energy-efficiency standard for walk-in coolers and freezers was set very high and seemed to ignore stakeholder comments about the economic justification and the technical feasibility,” McCrudden said. “Our members don’t manufacture these products, but they sell and install them. It poses an extra level of responsibility and complexity.”

Melchi also noted that, in the wake of the regional standards lawsuit, it seems as though a disturbing trend may be developing.

“We’re beginning to see a pattern of overzealous regulation, and it’s imperative that, as the DOE develops regulations, they follow the rules and make sure the i‘s are dotted and the t’s are crossed. Yet, over and over again, we’ve seen a failure to do so,” he said. “It’s unclear at times on how the department arrives at the conclusions that they do, and there are a lot of folks in the industry that felt, despite many efforts to engage the DOE, the information the industry has provided is falling on deaf ears, and that the industry’s insight is really not being taken into account.”

Industry Bands Together

For now, AHRI, HARDI, ACCA, and other interested parties are waiting for the court to respond to the petition for court review of the WICF standard. Meanwhile, HARDI has pledged its continuing support, and ACCA has intervened in the lawsuit on AHRI’s behalf.

“ACCA’s interest in this case is based on the fact that contractors, the assemblers of WICF, are considered the manufacturer; because the product is assembled onsite and charged onsite, the manufacturer is, in the traditional view, the contractor, or the installer,” McCrudden said. “That’s why ACCA has an elevated interest in this case, and that’s why the organization has filed as an intervener.”

In the end, Yurek said everyone has the same end goal, and working together is going to be key.

“The important thing is that we have the same ultimate goals,” Yurek said. “We want to produce high-quality equipment that uses resources efficiently, and provide safe products, and we want to make sure they’re done right.”

“Nobody wants to have an adversarial relationship with the regulatory industry,” Melchi added. “But when you feel that the agency isn’t taking into account all the things mandated by law, and they’re not following guidelines set, and it’s having a negative impact on people’s livelihoods, you’ve got no choice.”

Lennox representatives did not return requests for comment before this issue went to print.

Information courtesy of HARDI. For more information on the working group, including meeting dates and webinar information, visit http://bit.ly/Regional StandardsASRAC.

Regional Standards Enforcement Underway

With regional minimum energy conservation standards for split system and single package central air conditioners set to go into effect on January 1, 2015, the negotiated rulemaking to create an enforcement plan began Aug. 13 with the first meeting of the Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC) – Regional Standards Enforcement Working Group. The group’s goal is to produce a satisfactory enforcement solution by October 31; the proposal would then be made available for public comment, meaning an enforcement plan is not likely to be finalized until 2015. HARDI is represented in the working group by Steve Porter, HARDI government affairs co-chair and vice president of product management at Johnstone Supply.

To help its members, HARDI has provided answers to their three most frequently asked questions (please note that ongoing regulatory efforts may alter the answers to these questions):

Question 1: Will a 13 SEER condensing unit, matched properly with an indoor unit to deliver 14 SEER, be a compliant product in the south and southwest?

Answer: Yes. Until the DOE and the Federal Trade Commission make changes to existing policy, 13 SEER condensing units will be able to be shipped and installed in the South and Southwest regions when matched with an indoor unit that increases the efficiency to 14 SEER or above.

Question 2: In the aforementioned scenario, must that 13 SEER condensing unit be manufactured by December 31, 2014, to be legally installed?

Answer: No. The SEER minimums apply to the “system” (i.e., matched indoor and outdoor units) and not to the condensing unit. This means that any matched system meeting 14 SEER can be sold in the South, even if the condensing unit can be matched with some coils to produce 13 SEER. This is true even for condensing units manufactured after Jan 1, 2015. The grace period of 18 months applies to all matched combinations below 14 SEER. In this case, the condensing unit must be manufactured prior to January 1, 2015.

Question 3: Will 13 SEER dry charged condensing units manufactured on or after January 1, 2015, be legal for installation in the South and Southwest?

Answer: Due to confusion and uncertainty, HARDI has asked the DOE for guidance on this issue. DOE has acknowledged receipt of this question, and HARDI will notify members when we receive an answer. This is an issue that may be addressed in the Regional Standards Enforcement Working Group.

KEYWORDS: HVACR distribution business

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Jen’s responsibilities include covering legislation relevant to the HVACR distribution industry, as well as some travel. She has three years writing and editing experience and holds a bachelor’s degree in journalism from Oakland University.