Battle over Obama’s rules hits the home stretch

By Christa Marshall | 04/08/2016 12:53 PM EDT

Before President Obama took office, the Air Conditioning, Heating and Refrigeration Institute (AHRI) had two people on staff focusing on efficiency standards. Now it has four. The staff expansion was needed to keep up with a flood of federal efficiency rules on appliances ranging from rooftop air conditioners to walk-in freezers. The Obama administration has finalized 40 such rules establishing a minimum baseline for all new appliances, more than the George W. Bush and Clinton administrations combined.

Before President Obama took office, the Air Conditioning, Heating and Refrigeration Institute (AHRI) had two people on staff focusing on efficiency standards. Now it has four.

The staff expansion was needed to keep up with a flood of federal efficiency rules on appliances ranging from rooftop air conditioners to walk-in freezers. The Obama administration has finalized 40 such rules establishing a minimum baseline for all new appliances, more than the George W. Bush and Clinton administrations combined.

"Efficiency standards started being about saving energy, and they have come to be about saving the environment," said Francis Dietz, vice president of public affairs at AHRI, which has sued the administration twice in the past three years over standards. In the rush to get standards out the door, the administration sometimes isn’t following its own rules, he said.


It’s all part of a broader push on climate change. In 2013, Obama pledged to finalize efficiency standards on appliances, buildings and equipment in his two terms that would cut CO2 emissions 3 billion metric tons by 2030. Final rules have affected everything from beverage machines to dishwashers.

With the administration only about three-fourths of the way to that goal — and several contentious rules outstanding — advocates are making a renewed push to ensure that officials hear their views on how high pending standards should go, what they mean for national energy savings and whether some of the proposals should be strengthened or scrapped altogether.

The administration "gets an ‘A,’ but the final exams are coming up," said Andrew deLaski, executive director of the Appliance Standards Awareness Project, a group supportive of the standards. "It’s not going to be easy," considering there are several major rules to be finalized this year, including ones on home furnaces and central air conditioners.

DeLaski’s organization released new data this week finding that a "quiet revolution" under Obama has resulted in appliance standards ranking second in the nation when it comes to their overall impact on energy savings (Greenwire, April 6).

Minimum efficiency standards are a "very successful strategy with a proven track record," said Shannon Baker-Branstetter, energy and environment policy counsel at Consumers Union, on a conference call about the report.

However, some industry groups say that the standards push is creating hardships for businesses. In the rush to meet the 3-billion-metric-ton target, the administration sometimes isn’t transparent about how it sets efficiency levels or is coming up with numbers that don’t make sense, they say.

In some cases, the administration is "hurrying to get things done … they want a certain legacy," said Dietz. "Sometimes we can find [the administration] reasonable; sometimes we don’t find them reasonable at all."

One rule where AHRI has not found the administration reasonable is a proposal for commercial boilers released this month.

AHRI sent a letter to the Department of Energy this week calling for a suspension of the proposed rule, as DOE did not complete test procedures beforehand as required.

"If stakeholders, and DOE, do not know the exact procedure for testing equipment to determine compliance with the standard, how can they adequately comment on and evaluate the impact of the efficiency standard?" it said.

The test procedures were not completed because the administration was afraid that doing so "wouldn’t give them enough time to get the rule out before they leave," Dietz said.

AHRI has distributed materials on Capitol Hill saying regulations have contributed to a 30 percent decline in overall employment in the heating, ventilation, air conditioning and refrigeration (HVACR) and water heating industries since 2001. The documents note that DOE has acknowledged in recent years that some of its rules will lead to job losses. "It is possible that the small manufacturers will choose to leave the industry," DOE said in 2014 rule text for commercial air conditioners, for example.

Others say the administration is setting efficiency levels too high without clarity on where it’s getting its numbers. A proposed rule that would ramp up the efficiency requirement on home furnaces spawned a wave of criticism from groups like the American Gas Association (Greenwire, July 14, 2015).

According to Dietz, if efficiency levels are set too high, it actually can lead to less energy savings, as products become expensive. There is a law of diminishing returns where consumers start repairing existing equipment rather than buying new appliances that they consider too pricey.

Similarly, the Association of Home Appliance Manufacturers said this week that the administration is already updating standards for products like dishwashers that have only been in effect for two years or less. "We see a serial rulemaking process for some products," the statement says.

Administrative action and congressional guidelines

President Reagan signed the first national appliance standards into law in 1987. The Clinton administration finalized eight efficiency standards, compared to the George W. Bush administration’s 27. The Obama administration has already finalized 40, and is expected to issue 14 in total this year, according to DOE.

What’s important to remember, according to deLaski, is that previous administrations were lagging behind congressional deadlines, and that some standards had not been updated in decades.

"They’ve not gone too fast," he said of Obama. "This is the first administration … that actually has done a good job abiding by the legislative deadline established by Congress." By and large, federal rulemakers have also done a good job at setting efficiency levels, he said.

The Obama administration was able to hit the ground running in part because the Natural Resources Defense Council and several states sued DOE in 2004 for failure to meet statutory deadlines, according to deLaski. That led to a 2006 consent decree requiring DOE to catch up on all missed deadlines by mid-2011. Because of that decree, work "ramped up" in the last two years of the George W. Bush administration, laying the groundwork for Obama.

Federal laws in 2005 and 2007 also added a large number of new products and set deadlines for updating standards, many of which also came due in the past few years.

"Part of the reason Obama has succeeded … is the leadership from the very highest level of the administration insisting on the agency doing a good job," he said. Obama issued an executive order in his first term, for example, requiring DOE to finalize efficiency standards "as expeditiously as possible and consistent with all applicable judicial and statutory deadlines."

The administration should get credit for being the first to set standards for products that are authorized — but not explicitly required — by Congress, deLaski said. It did so for commercial and industrial pumps, among other products.

There also was a push to update test procedures. While a seemingly insignificant development, it allowed for stricter standards, analysts say.

Take dryers.

Before Obama, dryers were stopped during tests by a technician, who would periodically test the dryness of clothes. The problem with this testing process was that it did not reflect actual dryers, which typically allow consumers to set a desired dryness level while the machine turns off automatically, deLaski explained.

"It turns out that some dryers [in the tests] were significantly over-drying clothes. These dryers wasted a lot of energy, but that waste was not captured in the DOE test, because, under the test method, the technician turned the dryer off," he said.

Because of a recent update, testers considered automatic controls, allowing them to see a 30 percent efficiency difference between the best and worst dryers. "With the improved test, DOE could set a more rigorous standard," deLaski said.

Additionally, many say the administration’s use of the Appliance Standards and Rulemaking Federal Advisory Committee improved the rulemaking process by allowing consensus to be reached before official DOE action (Greenwire, June 18, 2015).

"One innovation of this administration is that of negotiated rulemakings — where industry and other stakeholders are at the same table with DOE, discussing cost and technical issues and working toward a consensus," said Kathleen Hogan, deputy assistant secretary for energy efficiency in the Office of Energy Efficiency and Renewable Energy.

Joseph Eaves, director of government relations at the National Electrical Manufacturers Association, said DOE has done a good job at moving rules forward but in some ways is handicapped by the "rules of the road." Rapid technology changes play into that. The pace of rulemaking in the past eight years has highlighted the challenge, he said.

He cited the case of DOE classifying LED lighting drivers as "external power supplies" under a rule originally designed for the clunky power cords attached to equipment like laptops. Under the law, the agency had little choice to regulate LEDs (E&E Daily, Jan. 13). Because it is such a new technology, LED lighting can’t be tested in the way called for in the rule. There should be a more informal way to fix technical glitches in rules without having to go back to Congress, Eaves said.

Of course, November elections could change the prospects for any such fixes, as well as change the current rulemaking trajectory. The courts have made it clear, though, that a new president can’t undo the Obama administration’s existing rules, deLaski said. President George W. Bush withdrew a final standard for central air conditioners issued by the Clinton administration and issued a weaker standard, but courts ruled against that.

"Congress, of course, can reverse any administrative action," he said. "This is hard to do, but not impossible."