Regulatory Submissions

On June 7, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) issued an order that vacated the Department of Energy’s (DOE) final energy conservation standard (ECS) rule for commercial packaged boilers (CPB).  APGA was the named petitioner in this case, and we are pleased that the court’s order demonstrates the critical need for DOE to both provide sufficient explanation of the basis for its appliance efficiency rulemakings and allow sufficient opportunity for the public to comment, especially as these types of rulemakings have the potential to impact numerous homes and businesses.

DOE’s CPB ECS rule was finalized in early 2020.  APGA challenged the final rule, as well as the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) and Spire, Inc., which is an investor-owned utility.  The American Gas Association (AGA) was also an intervenor in the case.  APGA and other petitioners initially argued that the final rule had several flaws in its underlying analysis, including: the use of “random assignment”, which means that the agency assumed that a purchaser of CPB did not take into account any cost-benefit considerations when purchasing an appliance and instead did so randomly, no matter the application; the price of natural gas used to fuel the appliances; and, the agency’s estimates for burner operating hours.

In the first case, the court agreed that DOE did not have “clear and convincing evidence” to amend the ECS, which is required by statute, and thus remanded the rule to DOE to provide additional information to support the assumptions it relied upon.  In response, DOE issued a supplemental notice with new information, but did not offer the opportunity for public notice and comment.  For this reason, and because APGA felt that the supplemental notice was an insufficient response to the court’s order, APGA again challenged the agency.

In this second and more recent case, the court agreed with APGA and thus vacated the rule. In the order, the court did not reach the question of whether “random assignment” is acceptable assumption for DOE to rely upon, but it did find that DOE’s supplemental information did not sufficiently address why it was appropriate for the agency to rely upon its assumed burner operating hours used in the analysis.  Regarding the cost of natural gas, the court did feel that DOE sufficiently rationalized why the values it utilized in the cost-benefit analysis were appropriate.

If the order is not challenged, DOE will need to reinitiate the rulemaking for CPB ECS.  A vacated rule means that the final rule, which went into effect in January 2023, is no longer applicable.  This means that industry can go back to selling CPBs at the previously lower efficiency level, if they so choose.