We are pleased to report that in today’s Federal Register, the Department of Energy (DOE) has “decided to issue a final interpretive rule (attached) determining that, in the context of residential furnaces, commercial water heaters, and similarly-situated products/equipment, use of non-condensing technology (and associated venting) constitute a performance-related “feature” under the Energy Policy and Conservation Act (EPCA) that cannot be eliminated through adoption of an energy conservation standard. In light of this final interpretation, also  published elsewhere in this issue of the Federal Register (attached), DOE withdraws its March 12, 2015 proposed rule and September 23, 2016 supplemental proposed rule for energy conservation standards for non-weatherized gas furnace and mobile home gas furnaces, as well as its May 31, 2016 proposed rule for energy conservation standards for commercial water heating equipment.”  The BECS Committee has advocated the DOE issuance of separate product classes for condensing type and non-condensing type vented gas appliances and equipment for over 10 years and this recognition by DOE  for the justification of separate product classes is the culmination of a long and intensive effort not only by AGA but by the American Pubic Gas Association, National Propane Gas Association,  National Gas Supply Association, National Association of Home Builders,  and the Plumbing-Heating-Cooling Contractors National Association.  A special recognition is appropriate for AGA member company Spire Inc. staff who shouldered the bulk of the  comment development and legal arguments that resulted in today’s DOE welcome decision. It should be noted that today’s DOE decisions are effective today, January 15, 2021. DOE is now expected to initiate a new rulemaking that would establish new, proposed minimum efficiency requirements for non-condensing type furnaces and commercial water heaters  and condensing types of these products thus retaining the availability of both types of products.  Finally, it should also be recognized that there are many advocates who are not supportive of these DOE decisions and it is anticipated that efforts will be made to overturn these DOE actions that could come in the form of legal challenges, congressional actions, etc. so natural gas supporters need to be vigilant as these actions are introduced.

As discussed in the previous item on DOE’s final “Interpretative Rule” and withdrawal of proposed minimum efficiency standards for residential gas furnaces and commercial water heaters, AGA has begun to develop estimates of the potential savings to consumers from not having to purchase more expensive, higher efficiency models of these products than they might otherwise due to higher minimum efficiencies and elimination of cost-effective options for those products.  As DOE analysis has consistently shown, its proposed minimum efficiency levels have negatively impacted many consumers in terms of life cycle cost of their appliance purchases.  Industry has commented extensively on how DOE’s life cycle cost calculations are biased in underestimating true consumer life cycle costs.  However, beyond the contentious debate over life cycle cost impacts, it is indisputable that eliminating lower cost models of furnaces and commercial water heater inevitably increase both first costs for the appliances and, in cases where installation cost “adders” to accommodate different venting systems and other installation-related designs in the building envelope, increase total consumer cost of purchasing these products.  This latter cost impact is particularly important in the appliance replacement market where more modifications to venting and other installation configurations are required than in new construction.  In analyzing the cost increase to consumers, much of the DOE information on future shipments of the covered products, market shares for different capacities and installed systems, and “design options” for incremental improvements in efficiency can be used with reasonable confidence.  All of these data support the observation of higher consumer costs of purchase for higher efficiencies required in standards.  However, more realistic and higher installed costs analyzed and presented by industry to DOE should be used for the underlying per-unit cost calculation instead of DOE’s approach of estimating build-up costs, markups, and other ad hoc methods to arrive at installed costs. That approach has been widely criticized and shown to be inconsistent with current and likely future realities of consumer facing purchase decisions.  In developing aggregated consumer purchasing costs into the future, these per-unit costs combined with the forecasts DOE has presented for both baseline (no change) minimum efficiencies and its proposed minimum efficiencies provide the basis for societal savings in consumers’ purchase costs.

 

At Wednesday’s BECS Committee meeting, BECS Committee member Eric Bruton, C.G.E. / Director of Technical Services who represents ASGE on the BECS Committee discussed the membership of ASGE and this year’s ASGE Technical Conference scheduled for June 6 through the 8^th at the South Point Resort in Las Vegas.  Also below you will find a link to the ASGE website where members of the BECS committee can find more information on ASGE. BECS Committee members are encouraged to review the material about ASGE that can be found here:https://asge-national.org/ and if you have any questions about the association, membership, mission, membership, etc., contact Eric at [email protected] , Office: 770-529-2000 Ext.124 

 

 

[This is a weekly feature of the “Friday Update” covering state code calendar activities as presented by the online utility “Fiscal Note,” which is sponsored by APGA and AGA Code and Standards. AGA staff would like your comments on retaining this feature for future End Use Codes and Standards Update]

 

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