Sofie E. Miller
The Department of Energy’s (DOE) direct final rule amends the existing energy efficiency standards for residential central air conditioners (CACs), specifically split-system CACs, and split-system heat pumps. This direct final rule (DFR) follows a negotiated rulemaking process with the Appliance Standards and Rulemaking Advisory Committee (ASRAC), which reached a consensus regarding increased efficiency standards for CACs and heat pumps that is codified in this DFR.
Regulatory Benefits & Costs
Consumers are faced with a tradeoff between upfront price and long-term operating expenses when they purchase an energy efficient appliance. DOE typically forecasts that its energy efficiency standards will increase the price of new appliances, but expects that some consumers will recoup this upfront cost over time through lower utility bills from efficiency gains. The benefit of reduced operating expenses is a large component of the overall benefit that DOE expects from its energy efficiency standards.
DOE’s statutory authority to regulate appliance efficiency stems from the Energy Policy and Conservation Act of 1975 (EPCA), as amended. EPCA allows DOE to establish or amend efficiency standards for appliances only when doing so is technically feasible and economically justified. EPCA creates a “rebuttable presumption” that a standard is presumed to be “economically justified” if it causes a product’s purchase price to increase by less than three times the value of first year energy cost savings.