NAFEM members discuss DOE Process Rule

The U.S. Department of Energy (DOE) released the pre-publication version of its Process Rule regulations and the results warrant attention.

The Process Rule establishes the requirements DOE must follow when setting energy-efficiency standards under the Energy Policy and Conservation Act (EPCA). The regulations become final once they are published in the Federal Register.

During a Jan. 29 conference call NAFEM held for members on the subject, two members of NAFEM’s legal team, Jeff Longsworth and Tammy Helminski, Barnes & Thornburg, LLP, summarized the contents of the pre-publication Process Rule and encouraged members to note a Supplemental Notice of Proposed Rulemaking that addresses one of the questions NAFEM raised in its prior comments that DOE has yet to resolve. (See “EPCA requirements” item below)

“The association and its members have been working very hard for the past five years to get where we are today,” Longsworth noted. “Many of the revisions outlined in the Proposed Rule stem back, in part, to some of the issues NAFEM raised in its commercial refrigeration equipment litigation back in 2014 and were reiterated and expanded upon during a regulatory roundtable meeting NAFEM arranged with DOE legal counsel in 2017.”

During the NAFEM-member call, Helminski summarized key points in the Process Rule including:

• The Process Rule will be binding on the DOE, which indicates DOE believes mandatory compliance will promote a consistent and predictable rulemaking environment for all stakeholders.
• The Process Rule will apply to both Consumer Products and Commercial Equipment. ASHRAE Equipment also is included in the Process Rule, but with separate provisions to reflect the different statutory requirements that apply to this kind of equipment.
• DOE will involve stakeholders in Priority Setting. Annually, in preparation for the publication of its Spring Regulatory Agenda, DOE will issue a request for comment on prioritization of rulemakings.
• DOE will conduct any new decisions on whether a piece of equipment should or should not be covered by energy standards through a formal notice and comment process.
• DOE decided to not include new provisions regarding early stakeholder input to determine the need for rulemaking as the department already has a variety of tools it can, and does, use to get early input.
• The revisions clearly reflect the Department’s statutory obligations to decide not to issue a new or amended standard or test procedure if a proposed standard does not meet the statutory requirements.
• DOE has included specific provisions that set thresholds that must be met to determine when the statutory requirement that a new or amended standard results in “significant energy savings.”
• The Process Rule makes it clear that DOE will finalize Test Procedures at least 180 days prior to issuing a NOPR for new or amended standards.
• DOE codified its current general practice of using industry standards as test procedures, if available and if they meet EPCA requirements.
• The revised Process Rule clarifies that DOE will follow the statutory provisions regarding Direct Final Rules.
• DOE revised the Process Rule to be more consistent with the Negotiated Rulemaking Act. The committee that works on the negotiated rulemaking will submit a report with a proposed rule to DOE, and then DOE, if it determines to act on the proposed rule, will do so through notice and comment rather than as a direct final rule.
• DOE will conduct peer reviews of its analytical methods once every 10 years. They are undertaking the initial peer review now. Key issues for NAFEM, such as the scope of regulations included in the cumulative regulatory burden analysis and how to assess actual effectiveness of current rule, are included in methods that are subject to this peer review.

EPCA requirements detailed; request for member comments
Through discussion and formal comments, NAFEM stressed the need to follow EPCA requirements that a new or amended standard is needed only if it results in significant energy conservation that is technologically feasible and cost effective. In response, DOE issued a Supplemental Notice of Proposed Rulemaking to propose changing from its current “walk down” approach to a comparative analysis.

“In the ‘walk down’ approach DOE only looks at whether the costs outweigh the benefits for a given set of technologies, starting with the most-stringent level that is technologically feasible,” says Longsworth. “Instead, DOE proposed a new approach that compares the costs and benefits between different sets of technologies. DOE believes this approach will better address whether a new standard is economically justified.”

The comment period for the new approach, outlined in the proposed rulemaking, ends March 16. To contribute to NAFEM’s comments, contact Charlie Souhrada.