I fought the law and the law won. In many instances, as most of us can contest, this is the norm.

However, Heating, Air-conditioning, and Refrigeration Distributors International (HARDI) proved that not to be the case in an epic regional standards decision earlier this year. And, going forward, it appears as if the industry may have to continue flexing its legal muscles to gain any ground against a government that refuses to play by its own rules.

Regional Warfare

In 2007, the U.S. Department of Energy (DOE) gained authority to establish regional energy-efficiency standards for residential furnaces and central air conditioning equipment. The DOE finally unveiled its regional standards plan in October 2011, dividing the country into three regions with minimum efficiency standards varying by equipment type. The timeline set a May 1, 2013, implementation date for the nonweatherized furnace rule and a Jan. 1, 2015, date for central air conditioners and heat pumps.

Two months after the plan was released, the American Public Gas Association (APGA) filed litigation, arguing the DOE erred in how it used its own direct final rule process when developing the standards. The APGA and DOE agreed to vacate and remand the nonweatherized gas furnace portion of the standards in January 2013, but left the 2015 standards in place. While many in the industry rejoiced in the decision, hoping to put the issue behind them and move on as quickly as possible, HARDI leaders voiced displeasure with the decision, calling it incomplete. HARDI reps questioned why the direct final rule was invalid only for the furnace portion of the case. Wouldn’t the same justification that killed the furnace portion apply to the air conditioner standard?

After enduring motions from Air-Conditioning, Heating, and Refrigeration Institute (AHRI) and APGA designed to cut HARDI out of the process, the distribution organization finally claimed its victory. On March 11, 2014, the parties in the case filed a joint settlement to vacate the furnace efficiency standard and restart the rulemaking process. HARDI fought the law and earned a TKO victory.

Sue, Sue, Sue

AHRI, in conjunction with Lennox Intl. Inc., recently petitioned the court of appeals regarding a DOE direct final rule establishing energy conservation standards for walk-in coolers and freezers. In establishing the rule, AHRI contends the DOE neglected to follow its own rules, yet again. AHRI leaders brought their issues to the DOE cordially, but the government agency blew them off, leaving litigation as the only remaining option.

“In issuing this final rule on WICF equipment, DOE exceeded its statutory authority and failed to comply with agency rulemaking requirements,” said Stephen Yurek, president and CEO, AHRI. “As a result, we have no choice but to challenge the legality of the rule.”

Another set of energy conservation standards overruling residential furnace fans are set to take effect in 2019, and the DOE is just beginning the data collection process regarding the revamped regional standards for nonweatherized furnaces.

And, it appears the government is just getting started. Following the Nov. 4 midterm elections, Republicans are set to take over both the House and Senate. If the Obama Administration wants to push any of its left-leaning, legacy-defining efficiency regulations through, now’s the time.

Attendees at the 2014 AHRI Annual Meeting in San Diego estimate as many as 18 regulatory items could be force fed through the system in the next two years.

It appears government agencies would rather waste time and money in court to push their agenda than follow its own rules or consider the advice of experts who know the industry’s every wrinkle.

As always, there’s power in numbers. On behalf of the industry’s future, it’s important for you to keep an eye on what the DOE is proposing, and, when applicable, let the government know how and why its energy-saving laws could have a devastating impact on the cash savings of your business.

Publication date: 12/1/2014

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