If you stay with a story long enough, you just might get a happy ending. This is certainly the case with the regional standards saga that has sucked a lot of oxygen out of the HVACR industry over the last few years.
In case you read magazines backwards and missed Jen Anesi’s cover story on the topic, all parties in the case recently filed a joint settlement motion with the court. If approved by the court — and everyone I talk with thinks it will be — the agreement would vacate the regional furnace efficiency standards and restart the rulemaking process, this time giving stakeholders more opportunities to provide input throughout the rulemaking process. The settlement would also give the industry an 18-month sell-through period to comply with the Jan. 1, 2015, efficiency standards for split-system air conditioners in order to help avoid stranded inventory. By proxy, this gives contractors the same grace period. Additionally, as part of the agreement, the U.S. Department of Energy (DOE) has agreed not to penalize distributors as part of enforcement of the standard.
This has indeed been a long journey. The rulemaking process began in 2007 when George W. Bush was still in office, only 4 percent of the public had a smartphone, and I was carrying 20 fewer pounds around the midsection. The court case itself was first filed more than two years ago. The biggest winners in this story are the distributors who continued to fight the DOE even though many — including yours truly — felt they should give up the fight. The biggest loser is the DOE, which has egg on its face from not properly following the rules at the beginning of this process. Whenever a government agency gives in, you know they were in the wrong.
However, the under-the-radar positive is that this issue helped bring the industry together. Of course, it did not start out this way. Some segments of the industry were not invited to the table at the beginning of this process. This omission led to hurt feelings, in addition to some blind spots not being ironed out in the original proposal. I was at meetings both before and after the lawsuit was filed and you could feel the tension between the different HVAC channel representatives.
This is the tough part of being in this industry. Everyone needs to adhere to the same laws and regulations, while each part of the distribution channel has different issues, concerns, and goals. But, the strides the industry has made to come closer together in the last year or two has been apparent. A great deal of the credit should go to the leaders of the respective associations, including Steve Yurek, Air-Conditioning, Heating, and Refrigeration Institute (AHRI); Paul Stalknecht, ACCA; and Talbot Gee, Heating, Air-conditioning, and Refrigeration Distributors International (HARDI).
There are a lot of big issues facing this industry — legislation, workforce recruitment, etc. — but with manufacturers, contractors, and distributors working together, there is no doubt in my mind the HVAC industry can eventually solve them all. If it took a little bit of a dustup to bring everyone together … so be it.
A New Beginning
While the industry can lay claim to this round, the reality is the regional standards conversation is far from over. The process must start again as the government’s version of a do-over. Enforcement still needs to be established and the DOE will need to come up with a more transparent and inclusive direct final rule process. While the new standards for air conditioners are still going into effect Jan. 1, 2015, albeit with an 18-month sell-through period, the best guess is we will not see regional furnace efficiency standards established and enforced until 2021, at the earliest. But, with everyone in the industry communicating and working together, I anticipate this next rulemaking process will go a lot smoother.
Publication date: 3/24/2014