The U.S. Court of Appeals for the District of Columbia has vacated the Department of Energy’s efficiency standards for commercial boilers. According to the panel of judges, “the DOE again failed to offer a sufficient explanation in response to the comments [from petitioners] challenging a key assumption in its analysis.”
Assumptions Come Undone
This is the second time the court has agreed with the legal challengers, led by the American Public Gas Association (APGA) and Air-Conditioning, Heating and Refrigeration Institute (AHRI) (“the petitioners”). In June 2022 the same panel agreed with the petitioners’ comments on cost concerns and burner data, but decided to remand the rule back to the agency, instead of vacating it. In deciding to remand the rule, the Court noted:
“The Agency “explained that ‘[it] ha[d] not identified a source of comprehensive burner operating hour data for commercial boilers that could be used for such an analysis nor was such identified to DOE by stakeholders…”
“[U]sing data ill-suited to the task is not excused by failure—even good faith failure—to locate suitable data, particularly considering that the Congress here required clear and convincing evidence before the Secretary can disturb the regulatory status quo.” (emphasis added)
However, in this recent review, the rule still failed to pass muster because of the assumptions and analytical choices the Department of Energy (DOE) made, in addition to making those choices in its methodology without industry input. According to the decision:
“The Agency failed to provide notice and comment despite its reliance on new studies and data critical to supporting its use of random assignment to assign boilers in the life-cycle cost analysis. The DOE also failed to address challenges to its 30 Btu/h assumption in calculating burner operating hours for the lifecycle cost analysis for the second time.” (emphasis added)
If the rule would have been approved, it would have raised minimum efficiency standards from 80 percent today to 95 percent efficiency by 2029, effectively banning cost-effective and highly efficient natural gas furnaces in homes that are unable to accommodate the expensive venting requirements for a high-efficiency condensing furnace.
Speeding to a Red Light
By rushing the process and hoping to stealthily pass a ban on natural gas boilers, the agency condemned its rule to failure, as the court “typically vacates rules when an agency entirely fails to provide notice and comment.” (emphasis added)
The vacating of the efficiency standard is the third blow to the administration’s rush to support anti-consumer choice policies and remove natural gas infrastructure from buildings in recent months.
In April, the ninth circuit court overruled the city of Berkeley’s natural gas ban, claiming it was pre-empted by existing federal law. The Biden administration attempted to argue that such a ruling would impede the federal energy efficiency program.
And in June, two bipartisan house votes were passed to protect natural gas appliances from the DOE and Consumer Safety Protection Agency’s actions meant to carry out the administration’s electrification agenda.
Bottom Line: A District Court has handed the administration’s electrification policies another loss, vacating the DOE’s proposed energy efficiency standard because of the Department’s poor methodology and failure to provide notice and comment in revising the rule. It is the second court reversal of natural gas ban policies, and a win for consumer advocates who are working to get officials to examine the actual costs of their electrification policies in terms of costs and consumer comfort.
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