Climate Change: Politics 101

Sometimes editors get to witness some pretty amazing things. For example, late in March, I had the opportunity to participate in the Air-Conditioning, Heating, and Refrigeration Institute's (AHRI) 2011 Media Roundtable and Public Policy Symposium in Washington D.C. I got to listen to Smart Grid guru Michael Oldak, vice president and general counsel for the Utilities Telecom Council talk about the "Smart Grid for Dummies" (see my December, 2010 editorial). Drusilla Hufford, director of the Stratospheric Protection Div., Environmental Protection Agency (EPA) addressed the decision-making process surrounding dry-shipped R-22 condensing units. And David Calabrese, AHRI Senior Vice President, Policy brought everyone up to speed on the 2011 AHRI legislative and regulatory priorities.

Here's what's so amazing: the bottom line in all the messaging at this meeting is that there's a big climate change in Washington D.C and it doesn't have anything to do with the ozone layer, or energy independence, or efficiency standards. It has to do with a new Congress, a split Congress, a Congress hell-bent on cutting costs and working down the national debt.

According to Calabrese, the mood in the Capitol has swung away from the regulatory position it had over the past several years. He says there is rising opposition to regional energy standards, the cap-and-trade climate legislation is virtually dead, and that tax credits and incentives are cowering under the microscope of budgetary restraints. "The focus on the hill is on cuts," he says.

At risk: the 25C tax credit, among others. For those who don't know, the 25C tax credit is the official name for the energy tax credits available to eligible taxpayers who make qualified energy efficient retrofits to their homes. These credits were in danger of expiring in December, 2010, but were saved with an extension that was passed by Congress. The extension will last through December 2011, but at a greatly reduced value and with changes made to some of the qualifying equipment standards.

Calabrese explained how AHRI is working to not only extend this credit beyond 2011, but to get it back to the higher values of 2010 to better encourage your customers to replace older, less efficient equipment. "It will be an uphill battle," he says.

Calabrese also declared the cap-and-trade bill dead and efficiency standards legislation are on the chopping block. He told the audience that this directly challenges the EPA's regulatory authority, which could bring a sea-change to things like refrigerant regulations, energy efficiency standards, and climate change regulations — all of which have direct impact on your businesses.

The interesting part of this is that when EPA's Drusilla Hufford spoke about the Montreal Protocol and the HCFC phaseout program, the subject of the R-22 dry shipping was broached.

Originally, the ban of new equipment charged with R-22 being sold/distributed was January 1, 2010. This included air conditioning, refrigerators, chillers, and freezers. It also included components such as condensers, TXVs, line sets, and so on.

Hufford said the decision to create exceptions to this ban stemmed from EPA receiving requests to reconsider the treatment of components. They met with manufacturer representatives about the ramifications of such an exception before they made the decision to create it. But here's the interesting part: they didn't think to talk to the HVACR contracting community about the ramifications of this change to the marketplace.

How can this be? The good news is that Hufford was taken aback about this lack of foresight and said that EPA was open to hearing from other parties with regard to this issue.

So yes, there's an incredible climate change in Washington. It behooves you to stay on top of what's happening, to work through your congressmen and your associations, because these changes directly impact your business. It is Politics 101.

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