Stay Issued in 80+ Furnace Phase Out

Code Forums,

On Friday January 14, 2013 the DOE and American Public Gas Association filed a joint motion for vacatur in the case American Public Gas Ass’n v. Department of Energy, D.C. Cir. No 11-1485.

This motion asks the U.S. Court of Appeals to vacate a direct final rule (DFR) concerning furnace efficiency standards issued by DOE (76 Fed. Reg. 67037 (Oct. 31, 2011)), and to remand the rule for notice-and-comment rulemaking. As part of the settlement, DOE agreed to withdraw the DFR and initiate a traditional notice-and-comment rulemaking for new furnace efficiency standards. The settlement will be effective once the court approves the motion for vacatur. Once this is done the process will start again, this time with input from the industry.

April 4, 2013 Update: The court has not acted yet on the agreement between industry and the DOE to set aside the May 1st deadline.  HARDI has been informing it's membership of HVAC distributors that if the court does not act, that wholesalers should not be selling 80+ furnaces in the northern portion of the US.

Proposed Question: Thanks for the heads up, and now does this also mean if we have 80% in stock that we can not install them after may 1st ?? -Christopher Piroli, Service Manager

April 5, 2013 Update: The Department of Energy released a statement this afternoon stating that while litigation was ongoing in the Regional Standards lawsuit and the court was considering a proposed settlement as well as a motion to stay, the DOE will not enforce the Regional Efficiency Standard in the Northern Region.

May 1, 2013 Update: The U.S. Court of Appeals for the D.C. Circuit ruled favorably today on an emergency motion filed by the Air-conditioning, Heating, and Refrigeration Institute (AHRI) requesting a stay of the May 1, 2013, compliance date for the regional furnace standards.

In granting the motion, the Court is legally preventing the Department of Energy (DOE) from applying the standards or enforcing them until the underlying case is resolved.

Those standards, requiring residential non-weatherized natural gas furnaces to be installed in 30 northern states to have an AFUE rating of at least 90%, were finalized in 2011 with an effective date of May 1, 2013. Almost immediately those standards faced a legal challenge by the American Public Gas Association. ACCA joined in the challenge to the standards. After months of legal wrangling, a proposed settlement rescinding the rules for furnaces was filed with the Court in January 2013. Unfortunately the Court has not yet ruled on the settlement and the rules remain on the books.

Earlier this month, in light of the looming May 1 compliance date and the lack of a Court ruling on the settlement, the DOE announced through an "Enforcement Policy Statement" that the agency would enforce the rules as if the settlement agreement had been accepted. While DOE's announcement gave some relief from the uncertainty of the pending compliance date, the Court's action today legally prevents the agency from enforcing the rules until the case is resolved.

For now, the industry awaits the Court's ruling on the proposed settlement, so that the DOE can start over again on writing new standards for furnaces. However, should the Court reject the settlement the case would go to trial. At that point there are two possible outcomes. One is that the legal challenge would prevail and the rules would be officially stricken from the books. But if the rules are upheld and remain in place after a trial, then under this motion, the rules would take effect six months later.

We will continue to monitor the activities surround this announcement and the lawsuit. We will continue to update all members and alert them of any new information.

May 3, 2013 Update: A six month stay has been issued by the court. The court has ordered American Public Gas and the DOE submit with in 30 days a proposed format for the briefing in the case. The court has strongly urged the submittal to be a joint proposal.