APGA Weekly Update November 23, 2016

11-23-2016 10:51

DOE Extends Comment Period on Furnace SNOPR
In a very surprising development, at approximately 5:00 p.m. EST on November 22, the Department of
Energy (DOE) released a notice that extended the comment period on the Supplemental Notice of
Proposed Rulemaking (SNOPR) for residential furnaces to January 6, 2017. The comment period was
originally scheduled to expire on November 22, and as a result APGA, submitted its comments earlier
that day. APGA and the American Gas Association previously requested that the comment period be
extended, but DOE never formally responded to that request beyond communicating at the October 17
public hearing that November 22 would be the date that comments would be due.
The manner in which the comment period was extended—the day comments are due—is disconcerting
given that it is extremely unlikely that the decision to extend the comment deadline was made on
November 22. If the decision had been made earlier, DOE should have communicated that outcome to
stakeholders, such as APGA, which formally requested an extension, so that they would not have to
expend significant resources to develop substantive comments to meet what we thought would be the
November 22 deadline. DOE followed a similar disturbing course of action in regard to the comment
deadline for the Notice of Data Availability (NODA), which was originally scheduled to expire on October
14, 2015 but was extended after that deadline by an additional 14 days. In that case, it remains
extremely troubling to APGA that it appears the groups supporting DOE’s furnace NOPR did not submit
comments because they claim to have been aware that DOE would be reopening the comment period
while APGA was not.
The extension to January 6 in the comment deadline appears to all but guarantee that a final rule will
not be released in the current administration and as a result, it will be President-Elect Trump’s
Administration that will likely make a determination in regard to how and if to proceed on the furnace
SNOPR. For questions on this article, please contact Dave Schryver of APGA staff by phone at 202-464-
0835 or by email at dschryver@apga.org.
APGA Submits Comments to DOE in Response to Proposed Furnace Rule
On November 22, APGA submitted comments to the Department of Energy (DOE) in response to a
Supplemental Notice of Proposed Rulemaking (SNOPR), released by DOE in September, which would
establish a residential furnace nationwide mandate of 92 annual fuel utilization efficiency (AFUE) with a
small furnace exemption for furnaces of 55,000 Btu or less. Furnaces under the small furnace
exemption would be allowed to be non-condensing; while all furnaces above that threshold would have
to be condensing. Because of the difference in combustion technology, condensing furnaces have
additional venting requirements associated that add significant dollars to the cost of installation. APGA
has maintained that the additional venting requirements associated with replacing a non-condensing
natural gas furnace with a condensing furnace will push many residential customers—particularly those
in warmer climates—to purchase and install less efficient home heating alternatives with potentially
higher greenhouse gas emissions and higher monthly utility bills.
In its comments, APGA communicated that the solution to addressing this issue is for DOE to
acknowledge that condensing and non-condensing furnaces are separate product classes and therefore
each should have its own efficiency standard. APGA’s comments also emphasized that DOE continues to
rely on flawed methodologies to justify the proposed increase in furnace efficiency standards as
demonstrated by a report released by the Gas Technology Institute (GTI), which accompanied APGA’s
comments. For example, DOE does not rely on economic decision making to separate affected from
non-affected consumers, which is a critical threshold step in the Life Cycle Cost analysis; rather, it relies
on a random selection number. This random-sampling approach produces irrational outcomes, as
demonstrated when the trial samples relied upon by DOE are closely looked at. APGA’s comments also
communicate that the furnace market is functioning well without a new furnace efficiency standards
rule, as market data demonstrates that consumers are purchasing condensing furnaces in large numbers
where the operating cost savings justify the extra expense, and are purchasing non-condensing furnaces
where the operating cost savings are more problematic.
“We hope that DOE will carefully review the concerns raised by APGA and other stakeholders. Our
research clearly demonstrates the serious disconnect between DOE’s projections and the realities that
American families are facing each day. It is important that DOE take the time to get this critically
important rule right rather than rush to push out a rule that will have significant adverse impacts on
consumers.
I am hopeful DOE will utilize our work and the work of so many other organizations to review and fix the
deficiencies associated with the current energy efficiency development process. We look forward to
working the various stakeholders to develop a program that benefits American homeowners by
promoting a wide range of energy efficient products that are cost effective. To APGA and our members
this is the cornerstone of a sound energy policy.”
In addition to the GTI report, APGA’s comments included several other attachments. These
attachments, as well as APGA’s comments, are available on the APGA website at
www.apga.org/news/federalcomments. For questions on this article, please contact Dave Schryver of
APGA staff by phone at 202-464-2742 or by email at dschryver@apga.org.
Energy Bill Update
Over this past year, APGA and our members have been advocating for several key measures that will
help further secure the future of the direct-use of natural gas. Since the general election earlier this
month, the dynamics surrounding the entire energy debate have shifted. Over the last several weeks,
the Senate and House have traded draft energy bills. Because of the shifting dynamics right now in
Washington, many of the issues APGA has been advocating for have become issues congressional
leaders want to debate in the upcoming Congress. There is a good chance that many if not all of these
issues will be paused until next year. Because these issues recognize the importance of a balanced
energy portfolio, APGA will continue to advocate for these important positions during the current
Congress, while establishing them as priorities for the next Congress.
For questions on this article, please contact Dan Lapato of APGA staff by phone at 202-464-2742 or by
email at dlapato@apga.org.
ICC Voting Deadline Extended
On November 18, the International Codes Council (ICC) published a notice advising all eligible voting ICC
members that the online governmental consensus voting period has been extended past November 22
to close at 11:59 p.m. PST on November 27. The extension is to accommodate the many voters wishing
to participate and so ICC can add resources to the voting site.
For information on ICC voting, please view APGA’s past webinar on the subject here. For questions on
this article, please contact Dan Lapato of APGA staff by phone at 202-464-2742 or by email at
dlapato@apga.org.
Senate OCS Revenue Sharing Bill Defeated
Senator Cassidy’s (R-La.) legislation to expand revenue sharing from production of oil and gas resources
from the Outer Continental Shelf (OCS), The American Energy and Conservation Act of 2016 (S. 3110),
was defeated on a procedural vote on November 17.
Revenue sharing from offshore oil and gas production has long been a contentious issue in the Senate.
The OCS is federal property, as was determined by the Supreme Court, and that means that all revenues
generated from production in the OCS, including royalties, rents, and bonus bids, should benefit the U.S.
as a whole. Currently, half of all revenue generated from production is sent to the states through various
programs and the other half goes to the U.S. Treasury to pay down the federal debt.
However, under the 2006 Gulf of Mexico Energy Security Act, 37.5 percent of royalties generated from
production off the coasts of Texas, Louisiana, Alabama, and Mississippi have been shared with those
states, with the logic being that since they are willing to take the risks of production, they should share
in the rewards.
Proponents of offshore oil and gas drilling have long argued that the revenue sharing agreement should
be expanded to additional areas in the Gulf of Mexico, off the Pacific and Atlantic coasts, and in Alaska.
Opponents contend that as the OCS is a federal property, all states should benefit from revenues
generated from it and diverting revenues adds to the federal debt. Moreover, some Democratic
Senators opposed to offshore oil and gas drilling in OCS waters off of their home states, argue that
revenue sharing will ultimately increase offshore OCS drilling endangering tourism and imperiling the
environment in light of the Deepwater Horizon spill in 2010.
Despite these challenges, Senator Cassidy’s bill sought to bring both camps together by not only
expanding revenue sharing to Alaska, the Atlantic states, and other Gulf States, but also by including a
provision to attract Democratic support. This provision would have speeded renewable energy
development on public lands by streamlining the permitting process. However, despite the overture,
only two Democrats supported the legislation: Senator Heidi Heitkamp (D-N.D.) and Senator Joe
Manchin (D-W.Va.).
Despite the defeat, Senator Cassidy said he expected much of the bill’s intent to be taken care of by the
Trump Administration in 2017. APGA will keep members apprised of any developments with revenue
sharing.
For questions on this article, please contact Scott Morrison of APGA staff by phone at 202-464-2742 or
by email at smorrison@apga.org.

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