Hearing to examine federal ‘red tape’ for small manufacturers

By Katherine Ling | 03/17/2015 07:23 AM EDT

Small manufacturers of food display cases, metal alloys for the military, and perfumes and flavors will share the challenges they face in light of new federal regulations at a hearing tomorrow in the House Small Business Committee.

Small manufacturers of food display cases, metal alloys for the military, and perfumes and flavors will share the challenges they face in light of new federal regulations at a hearing tomorrow in the House Small Business Committee.

The hearing will feature Viktor Anderson, director of engineering at Structural Concepts Corp., which manufacturers refrigerated floral and food display cases that may be hard hit by new Energy Department energy efficiency standards released last year to cheers from efficiency and environmental advocates.

Anderson will underline the double-hit his company and other small manufacturers are facing to comply with DOE’s new rules and U.S. EPA’s requirement for substitute refrigerants. EPA’s Significant New Alternatives Policy (SNAP) program eliminated four climate-forcing hydrofluorocarbons (HFCs) and replaced them with five less climate-forcing substitute chemicals (Greenwire, March 2).


"Taken together, these two regulations will severely impact Structural Concepts’ ability to retain our current level of employees and to economically produce cost-effective, energy efficient and environmentally friendly refrigeration products," Anderson said in his written testimony for the hearing.

Anderson added, "Quite simply, DOE is not giving small businesses like Structural Concepts time to breathe between one rulemaking and the next." He details the significant time and expense the company spent to meet a 2009 DOE requirement, only to have much of it made obsolete because it will not meet the new energy efficiency standards that will go into effect in 2017.

Anderson’s company concurrently will also be trying to adapt to EPA’s new prescribed refrigerants, which in some cases are less energy efficient than the ones the agency eliminated.

"If the DOE and EPA do not coordinate their efforts, we could potentially be redesigning our product every two to three years for more than 12 years in a row," he says.

"When DOE determined that its new energy efficiency standards were feasible, the agency did not account for EPA’s new restrictions on allowable refrigerants," according to his written testimony.

Anderson will be representing the Air-Conditioning, Heating and Refrigeration Institute (AHRI), whose members have cried foul over the new regulations and brought two lawsuits against DOE’s rules governing display cases and walk-in coolers and freezers, saying the new rules do not meet the lawfully required standards of "technically feasible and economically justified." DOE has issued more than 40 regulations for the heating, ventilating and air conditioning industry in the past four years, according to AHRI.

AHRI did announce earlier this year that the HVAC and water heating industry will invest $5 billion over the next decade for research and development of new refrigerants.

Stephen Yurek, president and CEO of AHRI, said last fall that DOE’s estimates of energy savings for the rule are too high because stores would opt to just fix current appliances instead of buying the new expensive machines that meet the new requirements (E&ENews PM, Sept. 10, 2014).

AHRI says new DOE procedures that gather input only from written comments or during a public meeting are preventing industry from providing technical expertise for DOE’s rulemaking.

"I think the ones that are really going to hurt are the small manufacturers, and even DOE in their rulemaking said that those manufacturers are going to see a two to three times increase in their R&D dollars, and potentially losses of hundreds of millions of dollars in revenue because of these rules," Yurek said on OnPoint.

AHRI also recently protested DOE’s proposed new rules on residential gas furnaces released last month, as did the American Gas Association (Greenwire, Feb. 11).

The new open-air refrigerator and walk-in freezer standards will save the equivalent of about 3 percent of the total annual energy consumption in the United States, save $12 billion in energy and cut carbon emissions by 142 million metric tons over the next 30 years, according to DOE (Greenwire, March 31, 2014).

The new commercial refrigeration rules will save businesses up to $11.7 billion on their energy bills over the next three decades and cut carbon emissions by about 142 million metric tons, according to DOE (Greenwire, Feb. 28, 2014).

Schedule: The hearing is Wednesday, March 18, at 11 a.m. in 2360 Rayburn.

Witnesses: Cynthia Reichard, executive vice president, Arylessence Inc., testifying on behalf of the International Fragrance Association of North America; Janis Herschkowitz, president & CEO, PRL Inc., testifying on behalf of the American Foundry Society; Anderson, testifying on behalf of the Air-Conditioning, Heating and Refrigeration Institute; James Goodwin, senior policy analyst, the Center for Progressive Reform.