The Natural Resources Defense Council (NRDC) and other efficiency groups released a negotiated agreement with manufacturers of residential air conditioners and furnaces yesterday, marking the end of a journey to come to consensus that lasted many months.  I negotiated on NRDC’s behalf and we will now take this agreement to both Congress and the Department of Energy (DOE).

The agreement covers residential central air conditioners, heat pumps, and gas and oil furnaces and would set the new minimum federal efficiency standards, once adopted by Congress or the DOE.  The standard does not cover portable air conditioners or window units.  The standards would become effective on May 1, 2013 for most furnaces and Jan. 1, 2015 for air conditioners and heat pumps.

 This agreement is a big deal for several reasons.

  1. Continues the long history of support for the federal appliance standards program from both advocates and manufacturers.
  2. Furthers the precedent of successful negotiations between advocates and industry on standards.  This is important because creative solutions that benefit both parties are possible in negotiations that are not possible in a standards rulemaking. 
  3. Rewrites the terrible furnace standard set by the Bush Administration that NRDC and several states challenged in court.  The Obama administration settled and DOE committed to revisit the standard.
  4. Sets the first regional standards so consumers know the furnace or AC they buy isn’t costing them money because it was designed for another climate.
  5. Allows states flexibility in setting building energy codes that are performance codes (where the total energy use of the building is specified rather than the all systems that the building must use).
  6. Saves a HUGE amount of money and energy.

The last three of these points warrant more discussion.

The first regional appliance standards ever

It is odd to think that the same appliance standard must apply to cold Massachusetts and to sunny Florida, but that is indeed the case.  The reason is fairly simple.  When the federal appliance standards program was created, manufacturers wanted to be able to have a consistent standard level unit that they could mass produce and sell all over the country.  This makes sense for most appliances, but for products where climate plays a huge role, like heating and cooling equipment, folks end up with equipment that was designed for someone else.  Inefficient equipment costs them money every day. 

With this agreement, consumers will no longer waste money on heating or cooling equipment that was designed for another climate.  Condensing furnaces (90 AFUE) will be required in the cold northern states, but not in the south where heating is rare.  In the hot southern states, 14 SEER air conditioners will be required, up from 13 SEER.  In the hot and dry southwest (which is very different from the hot and humid southeast), the units will also be required to operate efficiently at very high temperatures (well over 90 F) that are common in that climate.  Traditional equipment uses much more energy as the temperature rises simply because it is not designed for those conditions. 

This is a big win for consumers, but it is also good for manufacturers.  These companies have invested in the technologies to make their equipment run efficiently in different conditions, and now they will be assured of a market for these designs.  It benefits everyone to make sure that the best equipment goes where it will operate most effectively. 

Allows states more flexibility with their building codes

Federal appliance standards are preemptive, meaning no state can require anything above federal standard (below the standard is illegal).  This makes sense for appliance standards, but what if a state wants to set a building energy code for new construction that would require equipment above the federal standard?  Tricky legal question.

This agreement settles the issue by amending the law to set a clear path for states to adopt building codes based on equipment that is more efficient than the federal standard.  If a state has a performance code (generally a smart thing to do, where instead of telling a builder or architect how to build the building, the state tells them how much energy it can use and lets them figure out the best way to do it), then the maximum amount of energy that can be used can be calculated using equipment that is more efficient that the federal standard.  In this case, 15 SEER air conditioners and 92 AFUE furnaces would be included as the baseline that the new house would have to meet or exceed.

This provision will help remove the weight around the necks of states that want to have better building energy codes.  It does this while recognizing a fundamental difference between new construction and existing buildings — it’s cheaper and easier to make a new building more efficient than an existing building (which is why we need good energy codes).  Advanced technologies often have different needs than previous designs that older buildings were designed around.  For example, condensing furnaces require a drain to remove condensed water while some efficient gas heating equipment needs an electrical outlet.  New technologies may also be physically larger than the previous design.  Requiring them first in new construction where these costs are not a problem makes sense for consumers.

This agreement will save $13 billion dollars and enough energy to power 18 million homes by 2030

There really isn’t much to add to that.  Providing the gateway for new, super efficient technologies to gain a foothold in the market with advanced building codes could potentially save even more. 

This agreement is a big deal and we are pleased with the outcome.  We hope it lays the groundwork for even greater gains in the future while setting a positive precedent for standards covering other appliances.