Friday, October 06, 2006

Groups Say Proposed Home Heating Standards Are Weak

Oct 6: The Natural Resources Defense Council (NRDC) issued a release stating that the Department of Energy's (DOE's) new efficiency standards for home furnaces and boilers proposed in the Federal Register [71 FR 59203-59259, 10/06/06] "are as weak as they are tardy." NRDC attorney Katherine Kennedy said the proposed standards, which by law were due in 1994, "will do little to save energy or cut costs for consumers. This long-overdue proposal misses the opportunity to bring home heating into the 21st Century. We need strong furnace and boiler standards to cut pollution and keep Americans warm -- without breaking the bank. The only promising aspect of DOE's proposal is to grant states greater authority to set standards appropriate to their own climates. The best solution remains for DOE to issue stronger national furnace standards, and the department can still do that. The next best solution, if the federal government refuses to lead, is to allow states to set tougher furnace efficiency standards that would lower energy bills and clean the air."

To date, three states -- Massachusetts, Rhode Island and Vermont -- have passed laws to set stronger standards than the one proposed by DOE. But those laws cannot take effect without DOE authorization, a cumbersome process at best. Under DOE proposed rule, it is signaling that it would make it easier for states to set their own, tougher standards. In September 2005 NRDC filed a lawsuit along with 15 states and two consumer organizations. The still-pending lawsuit alleges that DOE has repeatedly ignored deadlines requiring them to set new efficiency performance standards for air conditioners, furnaces and 20 other types of "power-hungry" equipment.

According to a coalition of environmental, energy and consumer groups, the DOE proposal will "do little to actually save energy." Steve Nadel, executive director, American Council for an Energy-Efficient Economy (ACEEE) said, “As expected, the DOE proposal provides for essentially no change in the national standard for natural gas furnaces. Fortunately, DOE has opened the door for states to set their own, stronger standards.” ACEEE, National Consumer Law Center (NCLC), and a coalition of consumer, environmental, and energy groups recommended that DOE set a national standard in two parts: a stronger level for cold weather states and a weaker level for those with shorter, milder winters. DOE rejected this advice claiming it lacked authority to set regional standards.

The proposed standards would require between 80-84 percent annual fuel utilization efficiency (AFUE) for six common furnace and boiler types and would apply to all covered furnaces and boilers offered for sale in the United States, effective on January 1, 2015. The groups said the 80% AFUE rating -- is a level already met by virtually all furnaces sold today. They said a standard at 90% efficiency -- an efficiency level currently met by about one-third of all sales -- would save a typical consumer about 11% off their home heating bills relative to the current minimum efficiency units available.

According to DOE analyses the proposed standards would save a significant amount of energy -- an estimated 0.41 quadrillion British thermal units (Btu), or quads, of cumulative energy over 24 years (2015-2038). For comparison, approximately six quads are used annually for space heating in U.S. homes. The economic impacts on consumers--i.e., the average life-cycle cost (LCC) savings -- are positive. The cumulative national net present value (NPV) of total consumer costs and savings of the proposed standard (DOE's trial standard level 2, or TSL2) from 2015 to 2038, in 2004$, ranges from $650 million (seven-percent discount rate) to $2.48 billion (three-percent discount rate).

According to analysis by ACEEE, a strong furnace standard set at 90% annual fuel utilization efficiency (AFUE) applied in the northern half of the country would save 1.7 billion therms per year when fully implemented, enough to heat about 3.1 million typical homes. Consumers would save about $8 billion over about 20 years.

DOE said, "The Department has found the proposed standard represents the maximum improvement in energy efficiency that is technologically feasible and economically justified... The Department considered higher energy efficiency levels as trial standard levels; however, it found the burdens of the higher efficiency levels (loss of manufacturer NPV, LCC increases for some consumers, and safety concerns) outweigh the benefits (energy savings, LCC savings for some consumers, national NPV increase, and emission reductions)." The Department will hold a public meeting on the proposed rules on October 30, 2006, from 9 AM - 4 PM, in Washington, DC.

Access an NRDC release (click here). Access a release from ACEEE (click here). Access the FR announcement (click here). [*Energy]

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