Bel Red Energy Blog

The regional energy standards saga continues. If you’re a Bel Red blog regular, you probably remember reading posts about the rollercoaster energy conservation litigation between the Department of Energy (DOE) and members of the energy industry, including the American Public Gas Association (APGA).

As we discussed in the first post on the subject, in July 2011 the Department of Energy published a direct final rule as part of the Energy Policy and Conservation Act (EPCA) that would require certain energy efficiency standards in different regions throughout the country.  One of these regulations was the implementation of a minimum 90% Annual Fuel Utilization Efficiency (AFUE) standard for non-weatherized gas furnaces in the northern regions. These standards were set to be implemented on May 1^st, 2013. Many industry members, including the APGA, thought this was too extreme and challenged the new regional standards.

In January of this year, the APGA (along with industry members) and the DOE reached what appeared to be an agreement to settle the challenge. The settlement agreement would, among other things, vacate the energy conservation standards, including the 90% AFUE requirements for northern regions. The settlement agreement required court approval, which turned out to take longer than expected. With the May 1^st, 2013 compliance date fast approaching, the settlement has still yet to be approved by the court. As we discussed in our most recent post on the topic, this delay has been causing much uncertainty within the industry. Without a ruling, many feared major problems when it came to installation and availability of certain furnaces. While some of these problems may still arise prior to an official court ruling, the Department of Energy recently released an important statement on the issue.

The Zamoras of Bellevue, WA had an old furnace that needed excessive repairs. Rather than go through the costly repairs and keep the old system, they decided to replace it altogether with the help of our Bel Red installation team.  The Zamoras decided to install an extremely efficient hybrid system—a combination of a high efficiency gas furnace and an energy efficient heat pump.

The gas furnace installed was a Rheem Classic Series high efficiency furnace. The Classic Series from Rheem is one of the higher rated AFUE gas furnaces offered. This 2-stage, variable speed gas furnace provides exceptional comfort and temperature management for the home. It also has a variable speed blower that will result in gently mixed air in the home for balanced and even temperatures in all rooms.

Old and new furnace

The Rheem Classic Series gas furnace was paired with a Rheem Classic Series heat pump—increasing the overall efficiency of the new heating system. This particular heat pump has efficiencies up to 15 SEER (Seasonal Energy Efficiency Ratio).  The Zamoras can also now expect added comfort during the upcoming summer months with the air conditioning this system brings—something they did not have before. This model also features an attractive low profile design with a wrap-around jacket that protects the coil from yard hazards or extreme weather conditions. The Zamoras also decided to improve the air filtration in their home and had a Honeywell F300 electronic air cleaner installed along with the new heating system.

Earlier in the year, we wrote about the withdrawal of regional energy efficiency standards (mandating installation of high efficiency furnaces in Northern states) set forth by the Department of Energy (DOE). This was based on a lawsuit brought forth by some in the energy industry, including the American Public Gas Association (APGA) and Air Conditioning Contractors of America (ACCA).  We also posted a follow up with reactions to the withdrawal by some members of home energy industry.

Unfortunately, the courts have not ruled on this settlement, which may now cause problems when it comes to installation and availability of certain furnaces. Several motions in support and opposed to the settlement agreement were filed by intervening parties, or those with a stake in the outcome of this case. Before making a final ruling on the settlement, the court must hear these motions and take them into consideration. This is causing a delay in the decision making process and throwing a wrench in the normal sales, distribution, and manufacturing cycles of furnaces  in regions like ours that will be impacted by the ruling.

As a reminder, the proposed 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, along with the pending May 1, 2013 compliance date would be vacated. However, as we stated in the reaction, the settlement had to be approved by the court in order to make it final and remove the regional efficiency standards.

Earlier this week, we posted about the Department of Energy (DOE) withdrawing portions of proposed regional energy conservation standards in a settlement resulting from a recent lawsuit set forth by the American Public Gas Association (APGA).  There have been many reactions to the news of the potential settlement.

There were many reasons behind the lawsuit challenging the original institution of the regional energy efficiency standards. Responding to the DOE’s withdrawal of the standards, David Schryver, executive vice president of the APGA said “we had a number of concerns with the rule, and the matter in which the DOE proceeded through the rulemaking process. Now, this takes us back to square one, where we’re hopeful that the DOE will consider this again, taking all comments and considerations into account.” The backtrack allows key members of the industry to comment and contribute opinions on future standard discussions, which many, including us, feel should have been done the first time around.

There are a number of questions that both consumers and industry members are asking based on this recent news:

• Many are wondering if the settlement is already a done deal. As we mentioned in the earlier post, the settlement still has to be approved by the Court before these regional standards are officially removed.
• There have also been a number of questions from consumers regarding the definition of a non-weatherized furnace, which is the only type the settlement addresses. A non-weatherized furnace is one that is designed to be placed indoors and is the most common residential furnace in the United States.

We’re sure you were probably inundated with news during the turn of the New Year regarding Congress debating and passing the “Fiscal Cliff” deal. While some points of that deal were very thoroughly covered day in and day out, there may be a few things that you didn’t hear mentioned as part of the legislation. One of those pieces could be potentially valuable to homeowners. The deal signed during the first week of 2013 also reinstated a residential energy tax credit called the 25C Tax Credit.

While this tax credit last expired on December 31, 2011, the deal retroactively provides credits to eligible homeowner purchases of energy efficient appliances and equipment for their homes. The tax credit also covers such purchases moving forward, which can potentially save homeowners a lot of money in the coming year if they plan to make improvements.

For example, homeowners purchasing and installing a high efficiency air conditioner can receive a 10% credit (up to $300) for that purchase. Similarly, the installation of a high efficiency furnace could also receive a tax credit of 10% of the purchase and installation price (up to $150). There are certain efficiency standards that must be met in order for the system to be eligible, such as a 95% or higher AFUE (Annual Fuel Utilization Efficiency) rating for furnaces.