Settlement Reached in Regional Standards Lawsuit
On Tuesday, a settlement agreement was formally agreed to and filed with the court in the Regional Efficiency Standards lawsuit. The settlement, which must be formally approved by the court, signifies a victory for distributors. HARDI President Royce Henderson (Charles D. Jones Company) stated, "Our goal from the start has been twofold. The first was to provide relief to our members who faced damages as a result of DOE's actions. The second has been to fix the process, so this will never happen again. We believe this settlement accomplishes both goals to the greatest extent possible." The settlement does the following:
- The energy efficiency standard for residential gas furnaces in the Northern Region has been remanded. The DOE will begin the process of assessing a new standard and has agreed to use a more transparent process. It is likely that a new furnace standard would not take effect until 2021-2022.
- On January 1, 2015 the efficiency standard for central air-conditioners in the South will be 14-SEER. In the Southwest, that standard will be 14-SEER/12 EER.
- Distributors in the South and Southwest will have 18-months (July 1, 2016) to sell any inventory of 13-SEER equipment which was manufactured before January 1, 2015.
- DOE has agreed not to assess civil penalty upon distributors for violations related to the enforcement of regional efficiency standards for central air-conditioners and heat pumps.
- DOE agrees to evaluate and assess the usage of the Direct Final Rule process, which was used to establish the Regional Efficiency Standards and was the focus of the lawsuit challenging the standards.
- DOE will present a proposal for a negotiated rulemaking regarding the enforcement of the regional standard to the Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC). If approved ASRAC, DOE will attempt to use a negotiated rulemaking as a means to determine an effective enforcement scheme by engaging all interested parties, gathering data, and attempting to reach consensus amongst all stakeholders.
Steve Porter, Co-Chair of HARDI's Committee on Government and Trade Relations (Johnstone Supply) stated, "This settlement protects distributors from significant damage associated with stranded inventory and confirms our belief that distributors should not be penalized for the enforcement of this standard. Had HARDI not been engaged in this lawsuit, this settlement would not be possible." Henderson acknowledged his predecessors work leading up to this settlement. "Richard Cook (Johnson Supply), Bud Mingledorff (Mingledorff's Inc.) and Brian Cobble (G.W. Berkheimer Co.) deserve praise for guiding us through much of this process, which was uncharted territory for HARDI." HARDI Executive Vice-President and Chief Operating Officer Talbot Gee stated "This notably favorable outcome is entirely owed to the exemplary leadership of our Board of Directors, Policy Task Force and HVAC Council who, for multiple years now, have put aside competitive interests, endured sometimes intense pressure from suppliers and customers, and have maintained the foresight to focus on what's in the best interest of HVAC distributors and our industry today, tomorrow and in years beyond."