The new regional efficiency standards for residential heating and cooling equipment that take effect on January 1, 2015, remind us just how pervasive federal regulations are in our industry. The raising of minimum efficiency standards in some parts of the U.S. will likely catch some contractors by surprise and will make others reexamine how they go to market. At the same time, EPA is issuing rules on which refrigerants can be used and which ones will be delisted.
How have regulations become such a big part of our business lives? And, more importantly, how do we participate early in the standards setting process to ensure future standards are harmonized with the needs of industry and business?
Prior to 1987, US manufacturers were looking at the prospect of having to sort through 50 different sets of efficiency regulations, as states were competing to see who could be “the greenest.” Seeing the challenges before them, manufacturers, through their trade associations, went to Congress and asked it to pass legislation that would give the Department of Energy (DOE) the right to set federal minimum efficiency standards. The result was the National Appliance Energy Conservation Act, which prohibited states from developing competing standards for the same products unless DOE provided a waiver to them. This law allowed DOE to set minimum efficiencies that are “technically feasible and economically justified.”
Today, DOE regulates the minimum efficiency (or maximum energy use) of more than 50 types of equipment. DOE claims that current standards will result in energy savings of $1.7 trillion between 1987 and 2030, or a CO2 equivalent of taking 1.4 billion automobiles off the road.
It is in these early stages that input from the industry can make the most difference. A Notice of Public Rulemaking is usually accompanied by a public meeting, where stakeholders have an opportunity to comment on the ruling and present more formal written comments. DOE is required by law to review and respond to all comments.
The Environmental Protection Agency (EPA) gets its authority to regulate and impact our industry through the Clean Air Act, which allows them to control ozone depleting chemicals and their substitutes.
DOE’s Regulation Process
Most HVACR products are already subject to minimum efficiency regulations. DOE reexamines each of these regulations every six years. If they decide circumstances warrant an update to the regulation, they will announce their intentions in the Federal Register. In the early stages of the process, DOE may announce a Request for Information, defining exactly what information they think is needed to make an informed decision. They are then likely to issue a Notice of Public Rulemaking (NOPR) – which could be months or even years after the Request for Information, in which they lay out their analysis and may present several scenarios for efficiency increases.
It is in these early stages that input from the industry can make the most difference. NOPRs are usually accompanied by a public meeting where stakeholders have an opportunity to comment on the ruling and present more formal written comments. DOE is required by law to review and respond to all comments.
Click here for the Department of Energy’s 2015-15 Appliance Standards Rulemaking Schedule.
This is followed by a Final Rule. By this point, however, there is little opportunity to make changes. Most of the process, except where public input is specifically requested, is closed and not transparent. Even during any open portion, DOE’s analysis is often based on confidential cost/benefit data supplied by manufacturers or confidential markup data supplied by wholesalers and contractors. So, the process can be somewhat opaque and quite lengthy. It takes experienced HVAC professionals representing all facets of the industry to closely examine the government’s analysis and challenge an error or a poor assumption.
During 2015, DOE intends to propose or finalize more than two dozen efficiency standards.
The pace of this regulation process is accelerating, and contractor input is more important than ever. During 2015, DOE intends to propose or finalize more than two dozen efficiency standards, including large unitary AC, PTACs, commercial and residential furnaces, single package vertical units, off-mode test procedures for air conditions and heat pumps and residential boilers. In addition, they will be working on 12 test procedures. Input will be needed from every HVAC sector. This pace also is expected to continue in 2016 before the current Administration ends. How can they issue so many standards? DOE is assisted by a bevy of private consulting companies who study a market, purchase products, tear them down, analyze them and then evaluate the cost and benefits of various efficiency increases.
You can be sure that your industry trade associations are monitoring and participating in all these rulemakings. Still, the association staff depends on practitioners with day-to-day experience to be able to understand the effects of regulatory proposals on business.
R-410A is viewed as a high-GWP refrigerant since its global warming contribution is 1725 times greater than the CO2 benchmark – a GWP of one.
EPA and New Refrigerants
While DOE oversees equipment efficiency, EPA works to move us toward more benign refrigerants, such as those with lower global warming potentials. For example, R-410A is viewed as a high-GWP refrigerant since its global warming contribution is 1725 times greater than the CO2 benchmark – a GWP of one. The US is working with other nations through international agencies to phase down the use of high-GWP refrigerants, and equipment manufacturers are currently testing some of the lower-GWP and natural refrigerants they hope to use in the future. Some of these refrigerants are flammable and will require recognition in building codes and training of the HVACR technician community to use them safely. Thus, your trade associations are active here, too. Contractors will need to provide input to EPA to assure that the phasedown of traditional refrigerants proceeds at a rate that will allow the safe use of the substitutes.
How Can You Make a Difference?
1. One of the most effective ways for contractors to participate in making sensible regulations is through their trade and professional organizations. These dedicated people are actively involved in the many regulatory processes in Washington, D.C., but they need your guidance, expertise and involvement. Many times, associations will ask members for data that they can integrate to create a national overview, which they will then share with the government to help improve a regulation.
2. Also, you can participate individually in a public meeting, either in person or by telephone or web.
3. Finally, while the regulatory process takes place within the agencies, Congress is still interested, particularly if it impacts their voting constituents or may have adverse impact on jobs in their districts. Your representatives in Congress are happy to meet with you and to listen; you can call their district office to request a meeting when they are in town or join association fly-in meetings. Be prepared to talk about the issue, how it affects your business and how it could affect your customers. Nobody likes poorly developed or ineffective regulations and you are likely to find that your congressperson is willing to help with a letter to the agency. Working in the democratic process is interesting, educational and you might even make a difference.
Mark Menzer is director of public affairs for Danfoss.
Lisa Tryson is Danfoss director of corporate communications and public relations.