Score one for ACCA, HVAC contractors, APGA, and consumers.

The Air Conditioning Contractors of America (ACCA) reported today, that as the result of a settlement filed late Friday afternoon, the Department of Energy (DOE) has agreed to withdraw the pending minimum energy conservation standards that include regional standards for residential non-weatherized and mobile home gas furnaces. ACCA, the nation’s largest association of indoor environment professionals, joined the case last year as an Intervenor aligning with the American Public Gas Association (APGA) who challenged the Direct Final Rule in a suit brought in the United States Court of Appeals for the District of Columbia.
The settlement is still pending the Court's approval.

According to the terms of the settlement, which must be accepted by the Court, the portions of the Direct Final Rule setting the minimum AFUE standards for residential non-weatherized and mobile home gas furnaces at 90% in the Northern region and 80% in the Southeastern and Southwestern regions are vacated, along with the pending May 1, 2013, compliance date.
The DOE also agrees that it will initiate a new rulemaking for minimum energy conservation standards for residential furnaces and allow stakeholders the opportunity to comment.
"Should the Court accept this settlement, this would be vindication for ACCA and its members," says Paul T. Stalknecht, ACCA president and CEO. "Our comments during the rulemaking process outlining the additional costs to homeowners to properly address venting and condensate installation requirements of condensing furnaces were ignored. This settlement would restart the rulemaking for furnaces and allow ACCA to participate further in the process and for the DOE to recognize the problems associated with requiring condensing furnaces in the Northern region.”
According to ACCA, if the Court accepts this settlement, non-condensing furnaces would remain legal to install in all states until the DOE can write new regulations. Not only does this clear up the uncertainty about stranded inventory in Northern region ahead of the May 1 deadline, but it also give industry stakeholders the opportunity to be involved in the creation of any future rules.
The portions of the Direct Final Rule setting new minimum energy efficiency standards for central air conditioners and heat pumps, including any regional standards, remain in place, along with the January 1, 2015, compliance date.

"I think the government felt that they may not prevail if the case went to trial. APGA’s case was strong," says Charlie McCrudden, ACCA's vice president, government affairs, in an interview with Contracting, a leading, national HVACR contractor publication.

McCrudden says the decision (pending its acceptance by the court) brings much relief to the contractor and distributor arms of the HVAC industry and buys ACCA and DOE time to restart the furnace rule making process.

"That would give us another chance to make our case that, requiring 90% furnaces can be practically impossible and not economically feasible for some homeowners, and DOE has to take that into consideration," McCrudden says.

"There’s nothing that stops you from selling a 90% AFUE furnace, McCrudden continues. "For many homeowners that’s the way to go. A 90% AFUE furnace will provide comfortable and cost effective solution when they need a new furnace. But in some cases, it’s just not practical, with the requirements for ventilation and condensation, to replace a non-condensing furnace with a condensing furnace.

"In Cleveland, for example, in many homes, if the furnace is in the center of the home and shares ventilation with the hot water heater, you may have to reline the chimney, and relocate the furnace. There may be cases where the furnace would have to go in the middle of a finished basement."