On August 26, APGA and others met with representatives from the Department of Justice’s (DOJ) antitrust division to discuss concerns of how the Department of Energy’s (DOE) proposed minimum appliance efficiency standards for residential furnaces – also known as the Furnace Rule – would hamper competition if implemented. APGA was also joined by representatives of the American Gas Association (AGA), National Propane Gas Association (NPGA), and Spire.
The Energy Policy and Conservation Act (EPCA) – the statute governing DOE’s appliance rulemakings – directs the DOJ to “make a determination of the impact, if any, of any lessening of competition likely to result from such standard and shall transmit such determination, not later than 60 days after the publication of a proposed rule.” EPCA also allows 45 days for stakeholders to submit comments to DOJ regarding any perceived impacts on competition. On August 19, APGA submitted
a joint letter outlining concerns with how the proposed Furnace Rule, if finalized, would be anticompetitive.
During the meeting with DOJ, APGA and others discussed these concerns. First, the issue of whether DOJ had sufficient time and resources to make a determination in the statutorily designated time was raised, especially since the agency would not have the benefit of reviewing feedback provided from other stakeholders in response to the rule more broadly, which could influence the agency’s determination. Additionally, concerns regarding how competition would be negatively impacted were discussed. Notably, non-condensing furnaces would be removed from the market completely if the proposed rule were finalized, which removes consumer ability to choose the product best fit for their home and budget. Furthermore, the proposed rule would promote fuel switching, which negatively impacts the natural gas market. This fuel switching also would result in harm to natural gas local distribution companies, who are paid to provide the delivery service to their customers. All this to show that not just one product, but several, would have negative competition impacts if the rule were finalized.
The Furnace Rule proposes to set minimum efficiency standards at a condensing-only level for the appliance. While APGA is generally supportive of improved efficiency, we remain concerned that this proposed rule will have negative effects on consumers, primarily because condensing furnaces are not an easy one-for-one swap out with an existing non-condensing furnace. Due to venting incompatibilities, replacing older furnaces under this new rule will require costly retrofits – if even possible – else require fuel switching. Accordingly, APGA continues to oppose this proposed rule.
Also this week, APGA and other trade associations sent
a letter to DOE outlining issues with the Furnace Rule that we would like to see addressed during the upcoming public webinar.
DOE agreed to host a webinar and extend the comment period for the rulemaking after APGA and others raised several concerns during an earlier public meeting and filed requests for both. Those interested can register for the upcoming public meeting
here, which will be held on September 6 from 1:00 to 3:00 PM ET. Comments in response to the Furnace Rule are now due on October 6.
APGA will continue to weigh in on DOE’s appliance efficiency rulemakings that impact gas-fired appliances, as our members provide the energy needed to fuel these appliances, thus making public gas systems critical stakeholders in these rulemakings.
For questions on this article, please contact Renée Lani of APGA staff by phone at 202-464-0836 or by email at
rlani@apga.org.