On September 2, 2016, the Department of Energy (DOE) released a pre-publication notice for a Supplement Notice of a Proposed Rule (SNOPR) for residential furnaces. DOE is proposing a nationwide mandate of 92 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; all furnaces above that threshold would have to be condensing. The rule would go into effect five years after the rule is finalized. This SNOPR will have a significant impact upon public gas systems, particularly those in warmer climates.
DOE has provided only 30 days to comment, which is wholly inadequate and unreasonable. In addition to the 488-page rule, DOE has released seven additional files and models, including a 1,198-page technical support document. All of this data must be interpreted and understood to comment meaningfully on the proposal.
In response to the release of the SNOPR, APGA released a statement communicating that DOE “has once again proposed a new energy conservation standard for natural gas furnaces that will harm consumers and ultimately undermine energy efficiency.” APGA also stated that “the proposed rule will cause uneconomic fuel switching as many consumers—especially in southern states—will be compelled to change their natural gas furnaces to electric heat pumps.” Lastly, APGA communicated that the SNOPR “will impose significant harm upon APGA members’ consumers, and as a result, APGA will leave no stone unturned, including possible litigation, to protect these consumers.” APGA has asked DOE for a 90-day extension so we can properly address "the immensity and complexity of the documents to be reviewed and analyzed."
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. Read the DOE Fuel Switching Study.
APGA strongly believes that this furnace rule, although intended to increase efficiency, would undermine energy efficiency goals and increase costs to consumers.
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.
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 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.
Request for Legal Clarification
On June 6, 2017, APGA and others submitted a request for legal interpretation from the Department of Energy on the Energy Policy Conservation Act and its policies on efficiency appliances.
If you need help writing your comments, email Dave Schryver at firstname.lastname@example.org for more information.