When facing a difficult choice with imperfect or incomplete information, we often hear about two devils: the one you know and the one you don’t. The smart move in business is to minimize uncertainty and go with the outcome you have some control over.
Nearly three years ago, the HVAC industry faced a dilemma as the Department of Energy was looking to increase the minimum energy conservation standards for residential furnaces, central air conditioners, and heat pumps. And thanks to newly granted authority from Congress, the agency had the power to implement these new standards on a regional basis.
Congress also gave the DOE the ability to issue a direct final rule, a fast-tracked process “establishing an energy conservation standard on receipt of a statement submitted jointly by interested persons that are fairly representative of relevant points of view.” Hoping to avoid a repeat of earlier contentious rulemakings, the manufacturers in the industry elected to partner with the energy efficiency advocates they had previously fought in court on proposal for the direct final rule. The elements of the resulting “consensus agreement” was also introduced in the Senate in each of the last two Congresses.
It's true that Air Conditioning Contractors of America (ACCA) opposed the consensus agreement in comments to the DOE rulemaking process. But our opposition was not intended to divide the industry or squelch efforts to implement public policy to increase energy efficiency. Rather, it was a product of our mission to defend the interest of small business HVAC contractors.
There’s one more devil at play and that’s the one in the details of regional standards and their enforcement. ACCA is concerned that the blanket requirement for condensing furnaces in the North region will result in some prohibitively expensive installations when the contractor has to address the venting and condensate issues, along with remodeling the installation location. Contractors are the only entity in the supply chain that deal directly with the public, and keeping costs down is critical to maintaining customer satisfaction.
The consensus agreement and the legislation before Congress never considered how such regional standards would be enforced. Under a scheme with a single national standard, enforcement was always handled at the point of manufacture. Starting May 1, 2013, enforcement for residential gas furnaces will also occur in select basements, attics, or backyards.
A successful enforcement program has to punish the bad actors while protecting those who comply. As too many contractors know from first hand experience, the EPA’s lackluster record with the Section 608 enforcement has tipped the playing field in favor of the contractor who short cuts the rules. With 80% furnaces still available (remember, they are legal in the South and Southwest), ACCA is very concerned that unscrupulous installers will underbid and undermine the legitimate contractors with equipment bootlegged across a border or purchased on the internet.
Finally, what’s often overlooked is the fact that the consensus agreement put forth by the manufactures and energy efficiency advocates will likely place new legal obligations and potentially burdensome filing and paperwork requirements on small business contractors.
ACCA is looking ahead on the horizon to identify future areas of concern. Here’s something the entire industry knows: the DOE must conclude a regional standards enforcement plan by mid-January 2013. Enforcement of regional standards will be complicated but as stakeholders, we are already working together on some common solutions.
Charlie McCrudden is vice president of government relations for Air Conditioning Contractors of America (ACCA).