Industry News

Two Years Later: HARDI, ACCA, AHRI, DOE Reach Regional Standards Settlement

Logo ImageOn April 24, the U.S. Court of Appeals D.C. Circuit issued an order approving the March 11 joint settlement agreement between the Heating, Air-conditioning & Refrigeration Distributors International (HARDI), Air Conditioning Contractors of America (ACCA), the Air-conditioning, Heating & Refrigeration Institute (AHRI) and the Department of Energy (DOE) on regional energy-efficiency standards for gas furnaces and central air-conditioning units.The settlement comes after a 2011 lawsuit that spanned more than two years, during which industry associations argued that the DOE’s regional efficiency standards rulemaking process was unjust as it ignored the input of distributors and other stakeholders.

The settlement is scheduled to go into effect on January 1, 2015. Here are the changes that contractors, distributors and manufacturers need to know:

    1. The regional energy-efficiency standard for residential nonweatherized gas furnaces in the Northern markets has been remanded. The DOE will develop a new standard and will use a more transparent process when developing it. The new standard won’t be established for at least seven years. Until then, a national standard of 78 percent Annual Fuel Utilization Efficiency (AFUE) is in effect until November 19, 2015. After this date, the AFUE standard will be raised to 80 percent.

    2. The DOE will review and clarify the Direct Final Rule (DFR) process. The DOE agrees to revise the process that sparked the 2011 lawsuit, and employ a new procedure that puts more weight on feedback from all interested parties. This will ensure a consensus on an enforcement plan amongst all stakeholders.

    3. The DOE will address an enforcement rulemaking for the air-conditioner and heat pump standards that remain in place and are set to go into effect next year. As of January 1, 2015, the regional and national efficiency standards will be as follows:

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    4. Distributors in the South and Southwest have an 18-month sell-through period. Distributors have until July 1, 2016 to sell any inventory of 13-SEER equipment manufactured or imported before January 1, 2015. The DOE agrees not to hold distributors liable when enforcing the new standard. The January 1, 2015 compliance date still applies to manufacturers, however.

    5. The DOE recognizes the 18-month grace period granted to distributors and agrees not to penalize them. “This settlement protects distributors from significant damage associated with stranded inventory,” said Steve Porter, co-chair of HARDI’s committee on government and trade relations.

The settlement ensures that manufacturers don’t have to move inventory from one region to another to accommodate regional efficiency standards.The settlement also gives manufacturers two preseason order periods to adjust inventory and time to phase in new models and begin messaging to their distributors and contractors.

The settlement gives contractors time to familiarize themselves with the new standards as well (74 percent are unaware of the changing standards for residential air-conditioning and heat pump systems). In addition to the new regional efficiency standards for split systems and single-package air conditioning units, the settlement also addresses new national standards for 10 other product categories, including split-system heat pumps.

Click here to read the “Court Accepts Regional Standards Settlement” article from ACH&R News for more details.