[Federal Register Volume 83, Number 212 (Thursday, November 1, 2018)]
[Proposed Rules]
[Pages 54883-54888]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-23885]


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 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 83, No. 212 / Thursday, November 1, 2018 / 
Proposed Rules  

[[Page 54883]]



DEPARTMENT OF ENERGY

10 CFR Parts 430 and 431


Energy Conservation Program: Energy Conservation Standards for 
Residential Furnaces and Commercial Water Heaters, Notice of Petition 
for Rulemaking

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Notice of petition for rulemaking; request for comment.

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SUMMARY: On October 18, 2018, the Department of Energy (DOE) received a 
petition from the American Public Gas Association (APGA), Spire, Inc., 
the Natural Gas Supply Association (NGSA), the American Gas Association 
(AGA), and the National Propane Gas Association (NPGA), collectively 
referred to as the ``Gas Industry Petitioners,'' asking DOE to: Issue 
an interpretive rule stating that DOE's proposed energy conservation 
standards for residential furnaces and commercial water heaters would 
result in the unavailability of ``performance characteristics'' within 
the meaning of the Energy Policy and Conservation Act of 1975, as 
amended (i.e., by setting standards which can only be met by condensing 
combustion technology products/equipment and thereby precluding the 
distribution in commerce of non-condensing combustion technology 
products/equipment) and withdraw the proposed energy conservation 
standards for residential furnaces and commercial water heaters based 
upon such findings. Through this notice, DOE seeks comment on the 
petition, as well as any data or information that could be used in 
DOE's determination whether to proceed with the petition.

DATES: Written comments and information are requested on or before 
January 30, 2019.

ADDRESSES: Interested persons are encouraged to submit comments, 
identified by ``Energy Conservation Standards for Residential Furnaces 
and Commercial Water Heaters,'' by any of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    E-mail: [email protected]. Include 
Docket No. EERE-2018-BT-STD-0018 in the subject line of the message.
    Postal Mail: Appliance and Equipment Standards Program, U.S. 
Department of Energy, Building Technologies Office, Mailstop EE-5B, 
1000 Independence Avenue SW, Washington, DC 20585-0121. If possible, 
please submit all items on a compact disc (CD), in which case it is not 
necessary to include printed copies.
    Hand Delivery/Courier: Appliance and Equipment Standards Program, 
U.S. Department of Energy, Building Technologies Office, 950 L'Enfant 
Plaza SW, Suite 600, Washington, DC 20024. Telephone: (202) 287-1445. 
If possible, please submit all items on a CD, in which case it is not 
necessary to include printed copies.
    Docket: For access to the docket to read background documents, or 
comments received, go to the Federal eRulemaking Portal at: http://www.regulations.gov/docket?D=EERE-2018-BT-STD-0018.

FOR FURTHER INFORMATION CONTACT: Mr. Eric Stas, U.S. Department of 
Energy, Office of the General Counsel, 1000 Independence Avenue SW, 
Washington, DC 20585. Telephone: (202) 586-9507. E-mail: 
[email protected].

SUPPLEMENTARY INFORMATION: The Administrative Procedure Act (APA), 5 
U.S.C. 551 et seq., provides among other things, that ``[e]ach agency 
shall give an interested person the right to petition for the issuance, 
amendment, or repeal of a rule.'' (5 U.S.C. 553(e)) DOE received a 
petition from the Gas Industry Petitioners, as described in this notice 
and set forth verbatim below, requesting that DOE: (1) Issue an 
interpretive rule stating that DOE's proposed energy conservation 
standards for residential furnaces and commercial water heaters would 
result in the unavailability of ``performance characteristics'' within 
the meaning of the Energy Policy and Conservation Act of 1975 (42 
U.S.C. 6291 et seq.; EPCA), as amended (i.e., by setting standards 
which can only be met by condensing combustion technology products/
equipment and thereby precluding the distribution in commerce of non-
condensing combustion technology products/equipment) and (2) withdraw 
the proposed energy conservation standards for residential furnaces and 
commercial water heaters based upon such findings. In promulgating this 
petition for public comment, DOE is seeking views on whether it should 
grant the petition and undertake an interpretive rulemaking and 
withdrawal of the two specified rulemaking proposals, as requested. By 
seeking comment on whether to grant this petition, DOE takes no 
position at this time regarding the merits of the suggested rulemaking 
or the assertions made by the Gas Industry Petitioners.
    In their petition, the Gas Industry Petitioners argue that DOE 
misinterpreted its mandate under section 325(o)(4) of EPCA by failing 
to consider as a ``feature'' of the subject residential furnaces and 
commercial water heating equipment the compatibility of a product/
equipment with conventional atmospheric venting systems and the ability 
to operate without generating liquid condensate requiring disposal via 
a plumbing connection. Consequently, the Gas Industry Petitioners 
assert that DOE's proposals would make unavailable non-condensing 
products/equipment with such features, which currently exist in the 
marketplace, in contravention of the statute. The petition makes a 
number of technical, legal, and economic arguments in favor of its 
proposed interpretation, and it points to DOE's past precedent related 
to space constraints and differences in available electrical power 
supply (and associated installation costs) as supporting its call to 
find that non-condensing technology amounts to a performance-related 
``feature.'' Based upon these arguments, the Gas Industry Petitioners 
conclude that DOE should issue an interpretive rule treating non-
condensing technology as a ``feature'' under EPCA, withdraw its 
rulemaking proposals for both residential furnaces and commercial water 
heaters, and proceed on the basis of this revised interpretation.
    DOE welcomes comments and views of interested parties on any aspect 
of the petition for rulemaking.

[[Page 54884]]

Submission of Comments

    DOE invites all interested parties to submit in writing by January 
30, 2019 comments and information regarding this petition.
    Submitting comments via http://www.regulations.gov. The http://www.regulations.gov webpage will require you to provide your name and 
contact information prior to submitting comments. Your contact 
information will be viewable to DOE Building Technologies staff only. 
Your contact information will not be publicly viewable except for your 
first and last names, organization name (if any), and submitter 
representative name (if any). If your comment is not processed properly 
because of technical difficulties, DOE will use this information to 
contact you. If DOE cannot read your comment due to technical 
difficulties and cannot contact you for clarification, DOE may not be 
able to consider your comment.
    However, your contact information will be publicly viewable if you 
include it in the comment or in any documents attached to your comment. 
Any information that you do not want to be publicly viewable should not 
be included in your comment, nor in any document attached to your 
comment. Persons viewing comments will see only first and last names, 
organization names, correspondence containing comments, and any 
documents submitted with the comments.
    Do not submit to http://www.regulations.gov information for which 
disclosure is restricted by statute, such as trade secrets and 
commercial or financial information (hereinafter referred to as 
Confidential Business Information (CBI)). Comments submitted through 
http://www.regulations.gov cannot be claimed as CBI. Comments received 
through the website will waive any CBI claims for the information 
submitted. For information on submitting CBI, see the Confidential 
Business Information section.
    DOE processes submissions made through http://www.regulations.gov 
before posting. Normally, comments will be posted within a few days of 
being submitted. However, if large volumes of comments are being 
processed simultaneously, your comment may not be viewable for up to 
several weeks. Please keep the comment tracking number that http://www.regulations.gov provides after you have successfully uploaded your 
comment.
    Submitting comments via email, hand delivery, or postal mail. 
Comments and documents via email, hand delivery, or postal mail will 
also be posted to http://www.regulations.gov. If you do not want your 
personal contact information to be publicly viewable, do not include it 
in your comment or any accompanying documents. Instead, provide your 
contact information on a cover letter. Include your first and last 
names, email address, telephone number, and optional mailing address. 
The cover letter will not be publicly viewable as long as it does not 
include any comments.
    Include contact information in your cover letter each time you 
submit comments, data, documents, and other information to DOE. If you 
submit via postal mail or hand delivery, please provide all items on a 
CD, if feasible, in which case it is not necessary to submit printed 
copies. No telefacsimiles (faxes) will be accepted.
    Comments, data, and other information submitted electronically 
should be provided in PDF (preferred), Microsoft Word or Excel, 
WordPerfect, or text (ASCII) file format. Provide documents that are 
not secured, written in English, and free of any defects or viruses. 
Documents should not include any special characters or any form of 
encryption, and, if possible, they should carry the electronic 
signature of the author.
    Campaign form letters. Please submit campaign form letters by the 
originating organization in batches of between 50 to 500 form letters 
per PDF or as one form letter with a list of supporters' names compiled 
into one or more PDFs. This reduces comment processing and posting 
time.
    Confidential Business Information. Pursuant to 10 CFR 1004.11, any 
person submitting information that he or she believes to be 
confidential and exempt by law from public disclosure should submit via 
email, postal mail, or hand delivery two well-marked copies: one copy 
of the document marked ``Confidential'' including all the information 
believed to be confidential, and one copy of the document marked ``Non-
confidential'' with the information believed to be confidential 
deleted. Submit these documents via email or on a CD, if feasible. DOE 
will make its own determination about the confidential status of the 
information and treat it according to its determination.
    Factors of interest to DOE when evaluating requests to treat 
submitted information as confidential include: (1) A description of the 
items; (2) whether and why such items are customarily treated as 
confidential within the industry; (3) whether the information is 
generally known by or available from other sources; (4) whether the 
information has previously been made available to others without 
obligation concerning its confidentiality; (5) an explanation of the 
competitive injury to the submitting person which would result from 
public disclosure; (6) when such information might lose its 
confidential character due to the passage of time, and (7) why 
disclosure of the information would be contrary to the public interest.
    It is DOE's policy that all comments may be included in the public 
docket, without change and as received, including any personal 
information provided in the comments (except information deemed to be 
exempt from public disclosure).
    DOE considers public participation to be a very important part of 
its process for considering rulemaking petitions. DOE actively 
encourages the participation and interaction of the public during the 
comment period. Interactions with and between members of the public 
provide a balanced discussion of the issues and assist DOE in 
determining how to proceed with a petition. Anyone who wishes to be 
added to DOE mailing list to receive future notices and information 
about this petition should contact Appliance and Equipment Standards 
Program staff at (202) 287-1445 or via e-mail at 
[email protected].

Approval of the Office of the Secretary

    The Secretary of Energy has approved publication of this notice of 
petition for rulemaking.

    Signed in Washington, DC, on October 25, 2018.
Kathleen B. Hogan,
Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and 
Renewable Energy.

October 18, 2018

BEFORE THE OFFICE OF ENERGY EFFICIENCY AND RENEWABLE ENERGY UNITED 
STATES DEPARTMENT OF ENERGY WASHINGTON, D.C.

Petition for Rulemaking

Energy Conservation Program: Energy Conservation Standards for 
Residential Furnaces

Docket Number EERE-2014-BT-STD-031; RIN No. 1904-AD20

Energy Conservation Program:

Energy Conservation Standards for Commercial Water Heaters


[[Page 54885]]



Docket Number EERE-2014-BT-STD-042; RIN No. 1904-AD34

Introduction

    The undersigned organizations submit this petition for rulemaking 
under 5 U.S.C. Sec.  553(e). As explained below, we request that the 
Department of Energy (``DOE''):

 Issue an interpretive rule confirming that energy conservation 
standards effectively limiting the market for natural gas and/or 
propane gas (``fuel gas'') furnaces or water heaters to products using 
condensing combustion technology would result in the unavailability of 
``performance characteristics'' within the meaning of the Energy Policy 
and Conservation Act of 1975, as amended (``EPCA''), 42 U.S.C. Sec.  
6291 et seq., and, consistent with that determination,
 Withdraw its proposed standards for residential furnaces and 
commercial water heaters on the grounds of appropriate written findings 
as specified by 42 U.S.C. Sec. Sec.  6295(0)(4) and 
6313(a)(6)(B)(iii)(II), respectively.\1\
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    \1\ Standards for non-weatherized residential furnaces were 
published in a notice of proposed rulemaking at 80 Fed. Reg. 13120 
(March 12, 2015) (``NOPR'') and in a supplemental notice of proposed 
rulemaking published at 81 Fed. Reg. 65720 (September 23, 2016) 
(Docket No. EERE-2014-BT-STD-0031); standards for commercial water 
heating equipment were published at 81 Fed. Reg. 34440 (May 31, 
2016) (Docket No. EERE-2014-BT-STD-0042). Petitioners request that 
DOE withdraw all of the standards proposed in these two proceedings. 
The same issue is presented in the proposed rule for commercial 
packaged boiler energy conservation standards, Notice of Proposed 
Rulemaking and Announcement of Public Meeting, 81 Fed. Reg. 15836 
(Mar. 24, 2016); litigation concerning that rulemaking is currently 
pending in the United States Court of Appeals for the Ninth Circuit. 
NRDC v. Perry, (Nos. 18-15380, 18-1545).
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We believe that these actions would appropriately resolve issues that 
have already contributed to delays in both the residential furnace and 
commercial water heater rulemaking proceedings, thereby facilitating a 
more orderly and efficient resolution of the remaining issues in these 
proceedings.
    The basis for this petition is straight forward. The compatibility 
of a product with conventional atmospheric venting systems is an 
important product feature, as is the ability of a product to operate 
without generating liquid condensate requiring disposal via a plumbing 
connection. Residential furnaces and commercial water heaters that 
provide these features are generally available in the United States 
now. Products that use condensing combustion technology (``condensing 
products'') lack either one of these features. Efficiency standards 
that can only be achieved through the use of condensing combustion 
technology would therefore have the effect of rendering products with 
these features unavailable in the United States, a circumstance that 
EPCA was specifically designed to preclude.
    EPCA expressly provides that DOE:

 may not prescribe an amended standard . . . if the Secretary finds 
(and publishes the finding) that interested persons have demonstrated 
by a preponderance of the evidence that a standard is likely to result 
in the unavailability in the United States or any product type (or 
class) of performance characteristics (including reliability, features, 
sizes, capacities, and volumes) that are substantially the same as 
those generally available in the United States at the time of the 
finding of the Secretary.\2\
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    \2\ 42 U.S.C. Sec. Sec.  6295(0)(4) (applicable to residential 
furnaces) and 6313(a)(6)(B)(iii)(II) (identical provision applicable 
to commercial water heaters).

    There are no material facts in dispute. In both the residential 
furnace and commercial water heater rulemaking proceedings,\3\ 
interested parties have demonstrated by a preponderance of the 
evidence--and DOE has itself acknowledged \4\--that:
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    \3\ See note 1.
    \4\ 81 Fed. Reg. 65720 at 65752-53 (Sept. 23, 2016) (residential 
furnaces); 81 Fed. Reg. 34440 at 34462-63 (May 31, 2016) (commercial 
water heating equipment). Cf. ``An Energy Revolution'' [an interview 
with DOE Secretary Perry] American Gas (October 2017) (``We are not 
going to pursue policies that tell businesses and consumers to 
choose one energy source over another. . . . The American people 
should be able to use the type of energy that they think is best for 
their businesses, their lives and their families.'').
    http://read.nxtbook.com/aga/american_gas_magazine/american_gas_oct_2017/index.html?utm_source=twitter&utm_medium=social&utm_content=Oktopost-twitter-profile&utm_campaign=Oktopost-WGC+2018#an_energy_revolution

 The standards proposed for residential furnaces and commercial 
water heaters (with a limited exception for certain ``small'' 
residential furnaces) can only be achieved by condensing products;
 Condensing products lack both the ability to function with 
atmospheric venting systems and the ability to function without 
generating liquid condensate requiring disposal via a plumbing 
connection;
 Products that have the ability to function with atmospheric 
venting systems and without generating liquid condensate requiring 
disposal via a plumbing connection are currently available in the 
United States; and
 Standards that can be achieved only by condensing products 
would make such products unavailable.

    The only issue to be resolved is whether the product features at 
issue are ``performance characteristics'' for purposes of 42 U.S.C. 
Sec. Sec.  6295(0)(4) and 6313(a)(6)(B)(iii)(II), and they plainly 
are.\5\ Accordingly, DOE should issue an interpretive rule confirming 
that this is the case, and--consistent with that determination--should 
withdraw its proposed standards for residential furnaces and commercial 
water heaters on the basis of appropriate written findings pursuant to 
42 U.S.C. Sec. Sec.  6295(0)(4) and 6313(a)(6)(B)(iii)(II), 
respectively.
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    \5\ See Joint Request for Interpretation, EERE-2014-BT-STD-0031 
(filed June 6, 2017) at p. 3 (``It is absurd to suggest that 
features that may be necessary to make the use of a product 
practical (or even possible) are not ``performance-related 
features'' for EPCA purposes.). See also White Paper Developed by 
the American Gas Association and American Public Gas Association, 
``In the Upcoming Rulemaking on Amendments to the Minimum Efficiency 
Standards for Non-Weatherized Residential Gas Furnaces, DOE Should 
Employ Separate Product Classes for Condensing and Noncondensing 
Furnaces'' (Oct. 22, 2014) (detailing the unique performance-related 
characteristics and consumer utility of non-condensing furnaces) 
(attached to Joint Request for Interpretation, supra).
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Features Precluded by the Use of Condensing Combustion Technology

    Conventional fuel gas products are designed for atmospheric 
venting, typically through vent systems that carry exhaust gases, via 
buoyancy, vertically through the roof of the buildings in which they 
are installed. The vast majority of existing buildings and homes in 
which fuel gas products are installed in the United States were built 
with atmospheric venting systems designed to accommodate such products. 
Atmospherically-vented products are compatible with these existing 
venting systems (and with other atmospherically-vented products that 
use them); condensing products are not.
    Gas products using condensing combustion technology provide 
increased thermal efficiency by extracting additional heat from 
combustion gases before they are vented. As a result, condensing 
products produce liquid condensate and cooler exhaust gases that lack 
sufficient buoyancy to exit a building via an atmospheric venting 
system. Condensing products therefore require plumbing for condensate 
disposal and ``power'' (i.e., positive pressure) venting, typically 
through horizontal venting penetrating an exterior building wall.
    Importantly, power-vented products cannot share common vent systems 
with atmospherically-vented products under the prevailing national 
model

[[Page 54886]]

codes.\6\ Positive pressure in such a vent system would force 
combustion products into occupied spaces within the building through 
draft hoods and other atmospheric vent system structures. For this 
reason, safety standards and installation codes specifically separate 
vented fuel gas appliances and equipment into different categories 
based on their venting characteristics and specify that power-vented 
products cannot be connected to atmospheric venting systems or share 
common venting systems with atmospherically-vented gas products. In 
addition, condensing products require plumbing for condensate disposal 
that other vented gas products generally do not.
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    \6\ ``National Fuel Gas Code, 2015 Edition,'' ANSI Z223.1/NFPA 
54/, American Gas Association/National Fire Protection Association, 
2015, and ``International Fuel Gas Code,'' International Code 
Council/American Gas Association, 2015.
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    As further explained below and in comments submitted previously in 
the residential furnace and commercial water heater rulemaking 
proceedings, the features condensing products lack--compatibility with 
existing atmospheric venting systems and the ability to operate without 
a plumbing connection--are extremely important to consumers. Products 
with these features can be installed in locations inside buildings 
where condensing products cannot. Most significantly, non-condensing 
products can replace existing atmospherically-vented products without 
triggering the need for expensive building modifications or premature 
replacement of other commonly-vented gas products. Therefore, if these 
features were unavailable, there would be many cases in which it would 
be impractical to replace existing gas products with new gas products.

The Statutory Scheme, Precedent, and Application

Energy Policy and Conservation Act

    Products that offer different features are often capable of 
achieving different measured efficiencies. Where this is the case, 
there is a potential that a particular efficiency standard could be 
achievable for products with some features but not achievable for 
products with other features, in which case the standard would 
effectively ban products with the latter features.
    Congress anticipated such situations, and it made it clear that DOE 
is authorized to regulate product efficiency but not to restrict the 
range of features that covered products can provide. In fact, Congress 
expressly sought to ensure ``that energy savings are not achieved 
through the loss of significant consumer features.'' \7\ EPCA expressly 
prohibits the adoption of an energy conservation standard if it has 
been shown that the standard would have the effect of eliminating a 
currently-available product feature from the market. 42 U.S.C. 
Sec. Sec.  6295(o)(4) and 6313(a)(6)(B)(iii)(II). If DOE determines 
that a more stringent standard would be appropriate for products with 
specific product features, it can impose such standards for products 
with those features. Specifically, DOE can ``establish different 
standards within [a] type of covered product . . . based upon 
performance-related features of the product.'' \8\ However, DOE can do 
this only by creating separate product classes for products with 
different performance-related features and specifying different (and 
achievable) standards for each. 42 U.S.C. Sec.  6295(q)(1). This 
statutory scheme was expressly designed ``to ensure that an amended 
standard does not deprive consumers of product choices and 
characteristics, features, sizes, etc.,'' and to ``preclude'' the 
adoption of standards ``that manufacturers are only able to meet by 
adopting engineering changes that eliminate performance 
characteristics.'' \9\ Unfortunately, that is exactly what DOE's 
proposed standards for residential furnaces and commercial water 
heaters would do.
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    \7\ H.R. Rep. No. 100-11, 22 (1987).
    \8\ National Energy Conservation Act 1978, H.R. Rep. 95-1751, 
115 (1978).
    \9\ H.R. Rep. No. 100-11, 23 (1987).
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    Again, there is no dispute as to the relevant facts: DOE has 
acknowledged that its proposed efficiency standards can only be 
achieved through use of condensing combustion technology, and that 
those standards would effectively eliminate gas products that are 
compatible with atmospheric venting systems and do not require a 
plumbing connection.\10\ DOE has simply suggested that the elimination 
of such products does not constitute a loss of product features for 
purposes of 42 U.S.C. Sec. Sec.  6295(0)(4) and 
6313(a)(6)(B)(iii)(II).\11\ This suggestion is inconsistent both with 
EPCA's provisions and DOE's own previous determinations.
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    \10\ See 81 Fed. Reg. 65720 at 65752-53 (Sept. 23, 2016) 
(residential furnaces); 81 Fed. Reg. 34440 at 34462-63 (May 31, 
2016) (commercial water heating equipment).
    \11\ Furnace SNOPR, 81 Fed. Reg. at 65752. This suggestion dates 
back to the vacated Direct Final Rule, Energy Conservation Program: 
Energy Conservation Standards for Residential Furnaces and 
Residential Central Air Conditioners and Heat Pumps, 76 Fed. Reg. 
37407, (June 27, 2011) (``Direct Final Rule''). Under an April 24, 
2014 order of the United States Court of Appeals for the District of 
Columbia Circuit approving a settlement among the parties including 
DOE, that rule (including but not limited to DOE's determination 
that residential furnaces constitute a single class of products for 
purposes of 42 U.S.C. 6295(q)(1)(B)) was vacated and remanded to DOE 
for notice and comment rulemaking. Thus, DOE agreed, and the court 
ordered, that DOE reconsider the question of whether condensing and 
non-condensing non-weatherized gas furnaces should be treated as 
separate product classes in future rulemaking covering these 
products. DOE's subsequent failure to appropriately resolve this 
issue has significantly complicated (and thus delayed) development 
of a final rule regarding residential furnace standards, and has 
been the subject of extensive adverse comment. E.g., APGA 
Residential Furnace Comments at 6-11 (filed Nov. 22, 2016) (``DOE 
fails to address the line of contrary precedent that APGA brought to 
its attention.''); AGA Comments at 32-43 (filed Nov. 22, 2016) 
(``AGA's view is that the utility and performance characteristics of 
non-condensing furnaces do require the creation of a separate 
product class for non-condensing furnaces.'').
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DOE Precedent

    One of the ways in which DOE can avoid the adoption of standards 
that would eliminate available product features is to create separate 
product classes, with separate (and achievable) standards for products 
with those features.\12\ In addressing the need for separate product 
classes, DOE has recognized again and again that features that 
significantly affect the conditions under which products can be used 
are performance-related features for EPCA purposes; i.e., features that 
should be preserved rather than made ``unavailable'' by an energy 
conservation standard.
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    \12\ See 42 U.S.C. Sec.  6295(q)(1).
---------------------------------------------------------------------------

    DOE has recognized different product classes for electric 
residential clothes dryers to address differences in product features 
concerning installation space constraints and differences in available 
electrical power supply.\13\ Similarly, DOE's decision to maintain 
separate product classes for ``space-constrained'' heat pump and air 
conditioning products reflects the legal conclusion that product 
features that resolve significant installation constraints are 
performance-related features providing utility that other products 
lack.\14\ The fact that DOE characterized the need to modify existing 
buildings to accommodate new products as a matter of ``installation 
cost'' did nothing to undermine that legal conclusion.\15\ The

[[Page 54887]]

same legal conclusion is reflected in the provisions of EPCA itself: 
for example, EPCA provides separate product classes for residential 
direct heating equipment based on variations in the manner in which 
such products are designed to be installed.\16\
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    \13\ 10 C.F.R. Sec.  430.32(h)(3).
    \14\ See Direct Final Rule, 76 Fed. Reg. at 37446 (``Because 
physical size constraints for through-the-wall products continue to 
exist, DOE determined that continuation of the space-constrained 
product class is warranted.'').
    \15\ Id. at 37404 (``DOE believes that through-the-wall 
equipment intended for replacement applications can meet the 
definition of space-constrained products because they must fit into 
a pre-existing hole in the wall, and a larger through-the-wall unit 
would trigger a considerable increase in the installation cost to 
accommodate the larger unit.'').
    \16\ See 42 U.S.C. Sec.  6295(e)(3). See also Final Rule, Energy 
Conservation Program: Energy Conservation Standards for Ceiling 
Fans, 82 Fed. Reg. 6826, 6833 (Jan 19, 2017) (adopting 7 product 
classes: highly-decorative, belt-driven, very small-diameter, 
hugger, standard, high-speed small-diameter and large-diameter 
fans). Cf. 10 C.F.R. Sec.  430.32(y) (separate the product classes 
for furnace fans for non-condensing and condensing furnaces; thus 
DOE distinguished between non-condensing and condensing furnaces as 
an appropriate basis for creating separate product classes under 
EPCA).
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    In light of these precedents, DOE's continued failure to 
acknowledge that standards effectively eliminating atmospherically-
vented gas products would result in a loss of performance 
characteristics for purposes of 42 U.S.C. Sec. Sec.  6295(0)(4) and 
6313(a)(6)(B)(iii)(II) would be arbitrary and capricious.

Application

    The ability of a product to function without a plumbing connection 
is a feature that is no less important than features that affect where 
products will fit, what type of wiring they require, or whether they 
are designed to be free-standing as opposed to being installed in a 
wall or a floor. The ability of a product to function with atmospheric 
venting is an even more important feature because it enables products 
to be used as replacements for atmospheric-vented products without the 
need for building alterations or the risk of adverse impacts on other 
atmospheric-vented gas products tied to a common venting system.
    These product characteristics are very important to the pocketbooks 
of many American homeowners using natural gas. Many homes with a 
conventional gas furnace have a commonly-vented conventional gas water 
heater. If standards make atmospherically-vented furnaces unavailable, 
furnace replacement may result in venting problems for the commonly-
vented water heater, with the result that a perfectly good water heater 
may need to be replaced as well.\17\
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    \17\ Spire Residential Furnace SNOPR Comments (filed Jan. 6, 
2017) (https://www.regulations.gov/contentStreamer?documentId=EERE-2014-BT-STD-0031-0309&attachmentNumber=1&contentType=pdf) (open the 
PDF document and use the search function for the word ``stranded'').
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    The importance of performance characteristics such as the ability 
of a product to operate with a building's existing infrastructure and 
other commonly-vented products cannot be dismissed on the grounds that 
the building could be modified and other appliances scrapped. It is 
unreasonable to characterize the lack of such performance 
characteristics as a mere matter of ``installation costs'' \18\ or to 
dismiss them as such.\19\ In any event, there are cases in which the 
features condensing products lack are necessary if a gas product is to 
be used at all. This can occur, for example, in scenarios involving 
multistory housing in which vented gas products are common-vented into 
a central venting system that serves multiple floors of residential 
units that are under different ownership. In such cases, the inability 
of a consumer to replace an atmospherically-vented product with another 
atmospherically-vented product would not merely present problems for 
the consumers involved; it could adversely affect the venting of 
common-vented products owned by other parties in the same building.
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    \18\ See 81 Fed. Reg. at 65753.
    \19\ Id. at 37404 (``DOE believes that through-the-wall 
equipment intended for replacement applications can meet the 
definition of space-constrained products because they must fit into 
a pre-existing hole in the wall, and a larger through-the-wall unit 
would trigger a considerable increase in the installation cost to 
accommodate the larger unit.'').
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    DOE's prior assertion that standards requiring the use of 
condensing combustion technology would not impose a loss of product 
``features'' is based on two conflicting legal arguments. The first, as 
stated in the residential furnace rulemaking, is that ``the consumer 
utility of a furnace is that it provides heat to a dwelling, and the 
type of venting used for particular furnace technologies does not 
impact that utility.'' \20\ One obvious problem with this argument is 
that it is wrong on the facts: atmospheric-venting does impact the 
ability of a furnace to provide heat to a dwelling, because there are 
some cases in which atmospherically-vented furnaces can be used and 
condensing products cannot. Another is factors that limit the 
circumstances under which products can reasonably be used--size, for 
example--plainly have an impact on the utility of a product and are 
unmistakably within the range of ``performance characteristics'' that 
standards may not make unavailable.\21\
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    \20\ 81 Fed. Reg. at 65752.
    \21\ See 42 U.S.C. Sec.  6295(0)(4) (expressly including 
``sizes''--apart from ``capacities or volumes''--among the examples 
of ``performance characteristics'' that cannot be made unavailable).
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    The second argument (again as stated in the context of the 
residential furnace rulemaking) is that the only ``features'' that must 
be preserved are those that ``provide unique utility to consumers 
beyond the basic function of providing heat, which all furnaces 
perform.'' \22\ The argument that a ``feature'' must have unique 
utility ``beyond the basic function'' of a product is obviously 
difficult to square with the argument that a ``feature'' must ``impact 
the ability of a [product] to provide'' that basic function. However, 
the most obvious problem is that there is simply no statutory basis to 
assert either that a feature must have ``unique utility'' or that such 
utility must somehow be ``beyond the basic function'' of the product. 
EPCA simply states that DOE may not impose standards if it has been 
shown that they would likely result in unavailability of currently-
available ``performance characteristics (including reliability, 
features, sizes, capacities, and volumes).'' \23\
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    \22\ 81 Fed. Reg. at 65753.
    \23\ 42 U.S.C. Sec. Sec.  6295(0)(4) and 6313(a)(6)(B)(iii)(II).

 The policy concern driving these meritless legal arguments has been 
stated by DOE as follows: Tying the concept of ``feature'' to a 
specific technology would effectively lock-in the currently existing 
technology as the ceiling for product efficiency and eliminate DOE's 
ability to address significant technological advances that could yield 
significant consumer benefits in the form of lower energy costs while 
providing the same functionality for the consumer.'' \24\
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    \24\ 81 Fed. Reg. at 65752 (residential furnaces); 81 Fed Reg. 
at 23363 (commercial water heaters).

    This policy concern is at odds with the policy judgment Congress 
made when it adopted the relevant statutory provisions. The limitations 
on DOE's authority to impose design choices on manufacturers and 
consumers were not just designed to ensure the continued availability 
of products having the same ``functionality,'' particularly if 
``functionality'' means nothing more than the basic ability of a 
product to provide heat (or hot water, as the case may be). Instead, 
Congress expressly sought to ensure ``that energy savings are not 
achieved through the loss of significant consumer features.'' \25\ 
Features such as the compatibility of a product with an existing 
building's venting system and appliances, as well as its ability to 
operate without the need for a plumbing connection, are unquestionably 
significant to consumers. Arguments to the contrary in the pending 
rulemaking proceedings amount to transparent attempts to justify 
exactly the kind of outcome

[[Page 54888]]

Congress intended to preclude: the adoption of standards that would 
achieve higher efficiency by eliminating currently available 
``performance characteristics'' (including ``features'') that are 
important to many purchasers.
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    \25\ H.R. Rep. No. 100-11, 22 (1987).
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Conclusion

    DOE's rulemaking proceedings concerning standards for residential 
furnaces and commercial water heaters have been fatally undermined by 
their failure to recognize that EPCA precludes the adoption of 
standards that would effectively eliminate fuel gas products that do 
not use condensing combustion technology. Petitioners believe that 
prompt action to correct that failure is both warranted and necessary 
to facilitate any reasonably efficient path forward in those rulemaking 
proceedings. Accordingly, Petitioners respectfully request that DOE--
after soliciting and appropriately considering public comment on this 
Petition--promptly take final action by:

 Issuing an interpretive rule confirming that energy 
conservation standards limiting the market for natural gas and/or 
propane gas furnaces or water heaters to products using condensing 
combustion technology would result in the unavailability of 
``performance characteristics'' within the meaning of 42 U.S.C. 
Sec. Sec.  6295(0)(4) and 6313(a)(6)(B)(iii)(II), and
 Withdrawing its proposed standards for residential furnaces 
and commercial water heaters on the grounds of appropriate written 
findings as specified by 42 U.S.C. Sec. Sec.  6295(0)(4) and 
6313(a)(6)(B)(iii)(II), respectively.

    Further deliberation in the two pending rulemaking proceedings can 
then occur, with appropriate consideration--as EPCA requires--of any 
need for separate standards (and separate product classes) for products 
that use condensing combustion technology and those that do not.\26\
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    \26\ See 42 U.S.C. Sec.  6295(q)(1).
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Respectfully submitted,

Mark Darrell,
Senior VP, General Counsel & Chief Compliance Officer,
Spire Inc., 700 Market Street, St. Louis, MO 63101
Email: [email protected].

Dena E. Wiggins,
President and CEO, Natural Gas Supply Association, 1620 Eye St NW, 
Suite 700, Washington, D.C. 20006, 202.326.9300
E-mail: [email protected].

Mike Caldarera,
Vice President, Regulatory & Technical Services, National Propane Gas 
Association, 1899 L Street, NW, Ste 350, Washington, D.C. 20036, (202) 
466-7200
Email: [email protected].

Bert Kalisch,
President & CEO, American Public Gas Association, 201 Massachusetts 
Avenue, NE, Suite C-4, Washington, DC 20002, 202.464.2742
Email: [email protected].

Mike Murray,
General Counsel, American Gas Association, 400 North Capitol Street NW, 
Suite 450, Washington, DC 20001, 202.824.7000
Email: [email protected].

[FR Doc. 2018-23885 Filed 10X-31-18; 8:45 am]
BILLING CODE 6450-01-P