Falling in line with President Donald Trump’s “Zero-Based Regulation to Unleash American Energy” executive order, the Department of Energy (DOE) has announced it has taken the first step toward eliminating or reducing 47 regulations that are “driving up costs and lowering quality of life for the American people.”
Once finalized, the DOE estimates it will save Americans $11 billion and cut more than 125,000 words from the Code of Federal Regulations.
“While it would normally take years for the Department of Energy to remove just a handful of regulations, the Trump Administration assembled a team working around the clock to reduce costs and deliver results for the American people in just over 110 days,” U.S. Secretary of Energy Chris Wright said in a press release. “Thanks to President Trump’s leadership, we are bringing back common sense — slashing regulations meant to appease Green New Deal fantasies, restrict consumer choice, and increase costs for the American people. Promises made, promises kept.”
While the proposed deregulatory efforts cover a broad spectrum, here is a shortened list that pertains to the HVAC industry:
- Rescinding Requirements for Exempt External Power Supplies Under the EPS Service Parts Act of 2014
- Streamlining Administrative Procedures with Respect to the Import and Export of Natural Gas
- Streamlining Application for Presidential Permit Authorizing the Construction, Connection, Operation, and Maintenance of Facilities for Transmission of Electric Energy at International Boundaries
- Rescinding Collection of Information Under the Energy Supply and Environmental Coordination Act of 1974
- Rescinding Reporting Requirements, Certification, Independent Verification, and DOE Review for Voluntary Greenhouse Gas Reporting
- Rescinding the Renewable Energy Production Incentive
- Rescinding Energy Conservation Standards for External Power Supplies
- Rescinding in Part the Amended Energy Conservation Standards for Dehumidifiers
- Rescinding Unnecessary Regulation Encouraging Alternative Dispute Resolution
- Withdrawing Air Cleaners as a Covered Consumer Product
- Withdrawing Compressors as a Covered Equipment
- Withdrawing Miscellaneous Refrigeration Products as a Covered Consumer Product
- Withdrawing Portable Air Conditioners as a Covered Consumer Product
- Withdrawal of Fans and Blowers as Covered Equipment
- Rescinding Test Procedures for Small Electric Motors
- Rescinding Test Procedures for Commercial Warm Air Furnaces
- Rescinding Unnecessary ADR Regulations for DOE Contractor Employee Protection Program
- Request for Information on Lowering the Efficiency Standards for Furnace Fans
- Notice Rescinding 10 Unlawful and Burdensome Guidance documents
- Withdrawing Miscellaneous Gas Products as a Covered Product
- Delaying Compliance Date for Federal Agencies to Meet the Clean Energy Federal Building Rule
What’s Covered Under ‘Covered Equipment’
According to the DOE, “covered equipment” refers to appliances, products, or other apparatuses that are subject to testing and regulatory requirements under the Energy Policy and Conservation Act (EPCA).
For the HVAC industry, this latest announcement will cover compressors, fans and blowers, air cleaners, portable air conditioners, and miscellaneous refrigeration and gas products.
By removing these items from the covered equipment designation, this could mean reduced compliance costs for manufacturers, but it could also lead to less efficient products. Alternatively, it could also lead to a wider range of products hitting the market.
The EPCA
The EPCA, enacted in the 1970s, has been amended numerous times over the decades, and establishes the DOE’s authority to set energy standards for various equipment.
Historically, these announcements from the DOE usually signal more regulatory action, but here, the trend is being bucked.
As HVAC contractors well know, newer products have become increasingly complex, and expensive, thanks in large part compliance with energy standards, but is it possible to reverse or revert back to older technology?
There are arguments being made that this announcement is not in line with the language of the EPCA, which forbids “backsliding,” but the DOE has already release an opinion saying otherwise.
Anti-Backsliding
While the DOE’s announcement may be music to the ears of those who feel the HVAC industry is over-regulated, there is the issue of the “anti-backsliding” provision in the EPCA, which is meant to prevent the weakening of energy efficiency standards over time.
However, the DOE released a document May 16 that claims the proposed actions will not violate the anti-backsliding provision, as the clause specifically applies to “amended standards.” The DOE further argues that rescission of a standard is not an amendment, but rather a removal, and falls outside of the clause’s scope.
“It makes little sense for the anti-backsliding provision to apply to regulatory standards. The statutory standards were crafted by Congress and agreed upon by many stakeholders. Regulatory standards, to the contrary, are based in point-in-time determinations made by DOE,” the document states. “Standards prescribed at one time as economically justified might not be economically justified at a later date. 42 U.S.C. 6295(o)(2)(A). DOE must be able to reconsider its regulations in both directions, to make sure standards meet current national energy needs and are justified by the market. Economic conditions, and energy conditions, are constantly changing.”
Bigger Picture
There is a stark contrast between the energy policy of the current and previous administrations, and Republicans have consistently pushed back against attempts to further regulate consumer appliances during Pres. Joe Biden’s tenure.
Under the Biden administration, multiple efforts were implemented to reduce carbon emissions and cut energy use, in many cases through the regulation of home appliances.
The DOE had taken steps to enforce its changes by the end of the decade, and rapidly deployed many of the measures, to the dismay of some in the HVAC industry.
“DOE will continue to move quickly in 2024 — together with our industry partners and stakeholders — to update and strengthen outdated energy efficiency standards, which is critical to innovation, more consumer options, and healthier communities,” Energy Secretary Jennifer M. Granholm said in a press release.
At the time, this approach was criticized by ACCA’s Barton James.
“We believe the current approach of continually updating standards in the name of marginal efficiency improvements can often harm consumers in the process,” James said in an email. “The Department of Energy’s time and resources would be better spent promoting quality installation, including greater effort toward ensuring systems are properly sized and installed. That would lead to greater realized efficiency, and wouldn’t necessarily have to come at the cost of consumer choice.”