What Does the Regional Standards Lawsuit Settlement Mean For Contractors and Distributors?

What happened?

On Tuesday March 11, a settlement motion was filed with the U.S. Court of Appeals for the District of Columbia Circuit.  If the court were to accept the settlement, then what is specified in the joint agreement would determine how the law will be implemented.  A settlement was recently reached, and the following is our understanding based on the information that HARDI has released.

What is specified in the settlement agreement?

  1. On furnaces: The new 90 percent AFUE efficiency standards for non-weatherized furnace standards will be remanded, but the current national 78 percent AFUE minimum will still go to 80 percent in November 2015.  The Department of Energy will introduce a rule-making process to take furnace efficiency up again, but it will be a few years before it’s completed and new standards are implemented.
  2. On air conditioners and heat pumps:  The new regional standard for air conditioners will go into effect on January 1, 2015, as previously specified.  However, distributors in the South and Southwest will have an 18 month “sell through” period to sell any 13 SEER equipment manufactured before January 1, 2015.
  3. For distributors:  The DOE has agreed not to assess civil penalties upon distributors for violations related to the enforcement of regional efficiency standards for central air conditioners and heat pumps.
  4. Other points:  The DOE and The Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC) will attempt to use a negotiated rule making process involving all stakeholders to determine an effective enforcement scheme.  In addition, the DOE will evaluate the Direct Final Rule process, which was used to establish the new standards and was the focus of the original lawsuit challenging the standards.

What does this mean for you?

If you are a contractor in the South or Southwest:  You can purchase and install 13 SEER equipment from distributors through the end of June 2016, provided it was manufactured before January 1, 2015.

  • Beginning July 1, 2016, contractors will have to comply with the new 14 SEER minimum.
  • It is likely that contractors will have to match outdoor units with indoor coils to achieve at least 14 SEER.
  • The enforcement methods and penalties are not yet determined.

If you are a distributor in the South or Southwest:  You can continue to purchase and sell 13 SEER equipment as long as it was manufactured before January 1, 2015.

  • Any 13 SEER equipment will have to be depleted before the end of the 18 month grace period, which ends on June 30, 2016.
  • Since 13 SEER equipment can still be installed in the North, it might be possible to ship excess 13 SEER AC inventory to that region for sale.
  • Since the 14 SEER heat pump minimum is a national standard, any 13 SEER heat pump inventory will be unsalable after June 30, 2016.

If you are a contractor or a distributor in the Southwest:  Life will be a little more complicated because in addition to the 14 SEER minimum, you will have to comply with the EER minimums (12.2 EER for smaller units below 45K BTUH and 11.7 EER for those above 45K BTUH).

  • After the grace period, some of the equipment you stock and sell into the Southwest will probably be unique to your region.
  • In addition to depleting any old 13 SEER inventory, you will need to stock up on your unique, higher EER models before the July 1, 2016, implementation date.

If you are a contractor or dealer in the North:  You basically only have to worry about transitioning to the new 14 SEER, 8.2 HSPF heat pumps.

  • You can still purchase and install 13 SEER AC equipment and continue to do so after June 30, 2016.
  • You can continue to sell 13 SEER heat pumps (manufactured before January 1, 2014) through the grace period, which ends on June 30, 2016.

We hope you find this summary helpful as you plan for the transitions happening at the end of 2014, and again after the grace period, which ends on June 30, 2016.  We will keep this site updated with the latest information on the enforcement discussions.  If you have additional information or insight on this topic, we’d love to hear from you.  It’s easy to do – just post a comment in the field below.

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2 thoughts on “What Does the Regional Standards Lawsuit Settlement Mean For Contractors and Distributors?

  1. I think the language you are referencing is dealing with the 18 month period from January 1, 2015 to July 1, 2016 when any equipment manufactured before January 1, 2015 can be sold into any region irrespective of the new regional standard changes. This was done to allow distributors in affected regions to sell any excess stock of old, non-compliant equipment. So, during this 18 month period there will be “no enforcement” of the new regional efficiency standards as long as the equipment being installed was produced prior to January 1, 2015. However, after July 1, 2016 the enforcement will begin for all equipment irrespective of its date of manufacture and there are discussions going on now to determine what the actual enforcement process will be after July, 1, 2016. I hope this helps.

  2. * For products manufactured prior to January 1, 2015 an 18 month grace period (July 1, 2016) for non-enforcement of regional standards

    Do you have any clarification of this statement I have read elsewhere. What is non-enforcement of regional standards, un-permitted, or municipalities not enforcing the 2015 minimums?

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