With the deadline for Regional Standards making installation of standard efficiency furnaces illegal in northern states fast approaching, we received breaking news from ACCA (Air Conditioning Contractors of America) informing us that the Department of Energy (DOE), in a settlement filed last Friday afternoon, has withdrawn these proposed energy conservation standards.

This settlement is the result of a United States Court of Appeals case brought about by the American Public Gas Association (APGA), in partnership with ACCA, which challenged these standards. The settlement states that the initial plan to set the minimum AFUE (Annual Fuel Utilization Efficiency) standards for residential indoor and mobile home gas furnaces at 90% in the Northern region is vacated, along with the pending May 1, 2013 compliance date.

The court still has to approve and accept this settlement. Another point addressed in the settlement states that the DOE also agrees to give stakeholders the opportunity to comment on such matters before similar standards are set forth in the future, which was a huge catalyst to this challenge being brought forth in the first place.

While BelRed Energy Solutions, like APGA and ACCA, is a long-standing supporter of energy efficiency, we too had significant concerns about this new rule. We saw that it would have inadvertently deterred consumers from purchasing new gas furnaces, which are more cost-efficient than older gas furnaces or electric furnaces. As we outlined in our recent blog post, practical issues such as higher up-front equipment costs, as well as venting and drain requirements, increase the cost of high efficiency furnace options. Consequently, consumers would be incented to repair older furnaces, or to buy electric appliances that are initially cheaper to install, but are ultimately more costly in the long term.

It’s important to note that the portions of the initial minimum energy conservation standards for other appliances and systems such as central air conditioners and heat pumps remain in place, along with the January 1, 2015, compliance date.

More details and analysis of this ruling are sure to come pending the Court’s acceptance of the settlement. While the case will be ruled as resolved, the implications of the settlement will have significant impact for companies and homeowners alike. Be sure to stay up to date with the BelRed blog for future news regarding this, and many other, important energy efficiency topics.

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