DOE Issues a Disappointing Notice of Final Interpretive Rule Pertaining to Residential Furnaces and Commercial Water Heaters.
Back on October 12th, AGA, the Natural Gas Supply Association (NGSA) and the Chamber of Commerce filed joint comments on the DOE Notification of Proposed Interpretive Rule (NPIR) and Request for Comment (RFC) to eliminate separate product classes for non-condensing and condensing vented as appliances.   As additional background on the issue, on January 15, 2021, DOE published a final interpretive rule in the Federal Register determining that, in the context of residential gas furnaces, commercial gas water heaters, and similarly situated products or equipment, use of non-condensing technology (and associated venting) constitutes a performance-related “feature” under the Energy Policy and Conservation Act (EPCA), that cannot be eliminated through adoption of an energy conservation standard. This interpretation was because of a petition filed by the gas industry including AGA, American Public Gas Association (APGA), Spire Inc., etc., and was a very positive finding in support of assisting in keeping, cost effective natural gas furnaces, water heaters, and other types of vented gas appliances available for consumers. The interpretation established separate product classes for residential and commercial vented gas furnaces and commercial water heaters into non-condensing types and condensing types.    As previously reported in BECS Update on Codes and Standards,  DOE stated that it “deems prudent to revisit its interpretation” but provides no request by anyone or organization to revise the interpretation.  DOE went on to state that “for the reasons stated in this document, DOE proposes to return to its previous and long-standing interpretation (in effect prior to the January 15, 2021 final interpretive rule), under which the technology used to supply heated air or hot water is not a performance-related “feature” that provides a distinct consumer utility under EPCA”.  DOE requested comments on its proposed interpretation and reports that once they arrive at a final interpretation, they plan to again “evaluate whether amended energy conservation standards would result in significant savings of energy, be technologically feasible, and be economically justified, consistent with its interpretation.”
In the joint filing, our arguments to reject the DOE proposal are based on federal energy legislation provisions particularly related to DOE not being able to implement appliance efficiency rulemakings that eliminate useful and cost effect gas appliances, encouraging fuel switching (natural gas to electric appliances), etc.  Unfortunately, this past Monday, December 20th,  DOE issued a pre-publication Federal Register notice final rule pertaining to the “Interpretive Rule” rejecting AGA’s and many other stakeholder comments and  reinstated an interpretation under which, “in the context of residential furnaces, commercial water heaters, and similarly-situated products or equipment, the heat exchanger technology (and associated venting) used to supply heated air or hot water is not a performance-related “feature” that provides a distinct consumer utility under the Energy Policy and Conservation Act, as amended (EPCA). In the pre-publication, DOE cited the  August 27, 2021 proposed interpretive rule stating that it “set forth the basis and rationale for this final interpretive rule, in which DOE responds to public comments and ultimately reinstates its long-standing interpretation as proposed”. This final interpretive rule is effective once the notice has published in the Federal Register. DOE will send a follow up email to announce the effective date once the notice has been published. Additional product information for Residential Furnaces and Commercial Water Heaters including current standards and test procedures, statutory authority, waivers, exceptions and contact information. AGA staff will be consulting with other stakeholders and assessing all options that are available that may be feasible in obtaining a reversal of this interpretive rule as well as the possible success of obtaining that reversal.