This spring I had the privilege of serving on a special working group that negotiated new energy conservation standards for commercial warm air furnaces and commercial unitary air conditioners and heat pumps. The working group was convened in the hopes of finding an alternative to the standards proposed by the Department of Energy (DOE) earlier this year.
Negotiated rulemakings like this one are going to be employed more frequently. They provide a substitute to the typical notice and comment rulemaking process that has become contentious and often resulted in litigation.
The thinking is that when you get all the stakeholders together, along with Department of Energy officials and the “eggheads” from the national labs who can run the numbers on the fly, you can streamline the process, look outside the scope of the regulations, and find options that meet the goals of saving energy without negatively impacting industry.
In 2010, facing a backlog of unfinished rules, and backlash from industry and energy efficiency advocates, the DOE established the Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC) in an effort to facilitate negotiated rulemakings. ASRAC working groups have been used to set new standards or develop rules for commercial and industrial pumps, manufactured housing, regional standards enforcement, and commercial HVAC, water heating and refrigeration certification.
Two more working groups are meeting, as I write this, on fans and blowers, and miscellaneous refrigeration equipment. And a new working group was recently approved to develop standards for residential central air conditioners.
So, if you are paying attention you’ve probably realized that we are in the middle of a subtle transition in terms of how the federal government sets energy conservation standards for HVACR and hot water appliances and the test procedures used to measure compliance with those standards. I predict that more regulations will be set using the ASRAC negotiated rulemaking process than the current “normal” rulemaking process over the next few years.
Since the 1970s, Congress has directed the Department of Energy to set minimum energy use standard for a wide variety of residential, commercial and industrial appliances through the notice and comment rulemakings, a multi-step processes that takes several years to complete. The process begins when the agency announces its intention to set a new energy conservation standard or review an existing one.
Typically DOE will release an initial proposal for comment stakeholders. After reviewing the comments and running significant economic analysis, DOE releases a Notice of Proposed Rulemaking that proposes specific standard levels along with a lengthy report demonstrating how the proposed standards are economically justified, technologically feasible, and will result in significant energy savings.
Stakeholders are given time to review and comment on the NOPR, which the DOE reviews before releasing a Final Rule.
The ASRAC process allows DOE to use negotiated rulemaking as a means to engage all interested parties, gather data, and attempt to reach consensus on establishing energy efficiency standards. Rules drafted by negotiation may be more pragmatic and implemented at earlier dates than under a more traditional rulemaking process.
Over the last four years, several standards have been challenged in court. The Air Conditioning Contractors of America (ACCA) was involved in the lawsuit against the 2011 Direct Final Rule setting regional standards for residential non-weatherized natural gas furnaces and central air conditioners.
That case was resolved through a 2014 settlement requiring the DOE to withdraw and redo the standards for natural gas furnaces. ACCA has also been involved in a lawsuit challenging a 2014 Final Rule setting energy conservation standards for Walk-in Coolers and Freezers.
When the Obama Administration lost control of the Senate, it no longer had a lever in the Congress to implement its energy and environmental agenda. Since Congress cannot pass an energy bill or any climate change legislation, the President has turned to the regulatory agencies to enact climate change through regulation.
Reading the Administration’s press releases on new appliance standards, you know they always tout the “quads expected to be saved” through improved standards, but now they also focus on the positive impact on emissions by reducing the need to generate electricity.
You will likely see the formation of several working groups over the next two years. The Department of Energy has an aggressive agenda to set 19 new standards on several HVACR and hot water test procedures and appliance standards before President Obama leaves office in January of 2017.
The rules Congress put in place in the 1970s dictate that DOE only look at AFUE or SEER when setting HVAC appliance standards. This ties DOE’s hands when setting new standards in a way that doesn’t allow think comprehensively about energy use. That’s why the active dialogue and creative thinking to find alternatives of ASRAC negotiated rulemakings make sense.
Charlie McCrudden is vice president of government affairs for the Air Conditioning Contractors of America. Contact him at [email protected].