Public Comment on DOE’s Energy Conservation Standards for Residential Central Air Conditioners and Heat Pumps

air conditioners
by Sofie E. Miller, Senior Policy Analyst
April 25, 2017

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The George Washington University Regulatory Studies Center improves regulatory policy through research, education, and outreach. As part of its mission, the Center conducts careful and independent analyses to assess rulemaking from the perspective of the public interest. This comment on the Department of Energy’s direct final rule amending the energy efficiency standards for residential central air conditioners and heat pumps does not represent the views of any particular affected party or special interest, but is designed to evaluate the effect of DOE’s rulemaking on overall consumer welfare.

Introduction

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.[3]

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.[4] 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.

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[3]    Sofie E. Miller. “Whose Benefits Are They, Anyway? Examining the Benefits of Energy Efficiency Rules 2007 – 2014.” The George Washington University Regulatory Studies Center. September 2, 2015. https://regulatorystudies.columbian.gwu.edu/whose-benefits-are-they-anyway-examining-benefits-energy-efficiency-rules-2007-2014

[4]    42 U.S.C. 6295(o)(2)(A)