DOE Furnace Rule

APGA strongly believes that this furnace rule, although intended to increase efficiency, would undermine energy efficiency goals and increase costs to consumers.  We need all natural gas utilities and consumers to submit comments on DOE's website on why their rule is bad for consumers and bad for efficiency by July 10.

Background

In March 2015, the Department of Energy (DOE) published a proposed rule raising the natural gas efficiency standards for residential furnaces. In 2011, DOE proposed a similar rule on furnace standards and APGA successfully sued to have the rule removed.

The new standard requires an 92 Annual Fuel Utilization Efficiency (AFUE) and would prohibit the use of non-condensing furnaces requiring homeowners to use condensing furnaces.  Because of the difference in combustion technology, non-condensing and condensing furnaces are not interchangeable without some venting modifications to the home.

Research by the Gas Institute of Technology, American Public Gas Association and the American Gas Association shows that high initial costs associated with the installation and  additional venting requirements will push many residential customers—particularly those in warmer climates—to purchase and install potentially less efficient home heating alternatives.

APGA and its member city and community-owned natural gas utilities continue to advocate for energy efficiency and using the best technology that fits homeowners’ needs. The out-right prohibition of non-condensing furnaces will have an adverse impact on millions of Americans who currently use natural gas, including seniors and low-income citizens.  By DOE’s own numbers, which we believe are very much understated, over 20 percent of the homes nationwide will experience a net cost versus a net saving by being required to install 92 percent annual fuel utilization efficiency (AFUE) furnaces, this percentage skyrockets to 31 percent in the South on average and to 39 percent for low-income households in the South. 

APGA Position

Simply establishing a nationwide standard that is applicable to every installation is not reasonable.   There are situations where homeowners may not be able to install a condensing furnace in their home or may not be able to afford the additional cost associated with installation of this type of furnace. 

The direct use of natural gas is one of the most efficient uses of delivered energy at over 92 percent compared to 27 percent for electricity. Ultimately, the proposal ignores the most basic premise of energy science, which is that the closer you move the energy resource to the end user, the more efficient the technology will be.

Effects of this rule on consumers:

  • Increased costs due to venting. Extensive and expensive venting modifications must be made to accommodate a  condensing furnace. DOE estimates that customers nationwide would carry a burden of at least $6-12 billion in new costs associated with condensing furnaces. On average, a condensing furnace typically is $350 more than a non-condensing furnace, along with additional installation costs.
  • Building code restrictions for apartments and condominiums. In row houses, town houses and multi-family dwellings a condensing furnace may not even be an option because the side venting required is impossible due to physical limitations, building code issues, and/or prohibitively high cost. 
  • Burdens on landlords. Heating costs are borne by the tenant, whereas the landlord bears the burden of the upfront cost for the furnace.   A landlord will not see a return on their cost for the more expensive but higher efficient furnace through lower heating bills.  When faced with a higher priced furnace plus additional costs for special venting, landlords will likely turn to inefficient electric heating which result in increased monthly utility bills for their tenants.  
  • Undue burden on low-income consumers. Consumers, especially those in lower income brackets, often times do not have the luxury of worrying about operating costs over an extended period of time. Rather, their primary concern is whether they can afford the new appliance at all, even without the cost hurdle of new venting. For these residents, the higher costs for a condensing gas furnace will mean they switch to a less efficient electric appliance which will result in higher monthly utility bills.  

Click here to see an infographic of the impacts of the DOE rule. If finalized, this rule would impose onerous costs, lessen energy efficiency and increase greenhouse gas emissions as people switch from clean burning natural gas to electricity to heat their homes.       

Take Action

Our solution to this issue is simple.  DOE should establish separate energy standards for non-condensing and condensing furnaces.  While condensing furnaces can be a great option for heating a home, this choice must be made by the homeowner and not the federal government. 

We need all natural gas utilities and consumers tell DOE why their rule is bad for consumers and bad for efficiency by July 10 at http://www.regulations.gov/#!submitComment;D=EERE-2014-BT-STD-0031-0054

We urge those who are concerned about this rule not only to file comments with DOE expressing your concerns, but also to let your elected officials know about DOE’s unjustifiable regulations on natural gas appliances. Find your representatives here and senators here.

If you need help writing your comments,  APGA will have talking points here which you can incorporate into your comments. Email Dave Schryver at dschryver@apga.org for more information.

© 2012 American Public Gas Association 201 Massachusetts Avenue, NE, Ste C-4 Washington DC 20002 Tel 202.464.2742 800.927.4204 Fax 202.464.0246. All rights reserved.

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