Settlement would void energy-efficient furnace deadline

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Blue states are where 90% efficient furnaces were to be mandated by May 1.

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Article Highlights:

  • New DOE furnace rules unlikely to go into effect in May.
  • Settlement would set off another round of hearings.
  • Environmentalists upset by settlement.

A government rule that would require furnaces in new homes and replacement furnaces in residences in Colorado to be at least 90 percent efficient likely will not go into effect on May 1, as originally scheduled.

The Department of Energy in 2011  approved new furnace energy efficiency standards requiring at least 90-percent efficient “non-weatherized” furnaces to be installed in residences starting on May 1, 2013 in 30 states, including Colorado, a rule championed and applauded by environmental groups.

A non-weatherized furnace is one that is used indoors and is the most common residential furnace installed in the U.S. A basic furnace is 80 percent efficient, so the minimum efficiency for a furnace would increase by 10 percentage points, or 12.5 percent.

The American Public Gas Association sued the DOE over the new regulations, arguing that because the venting for a 90-percent efficient furnace is different for a less efficient furnace, the replacement cost would be financially “devastating” for consumers.

The APGA estimated the new venting would add $1,500 to $2,500 for a typical consumer, in addition to the cost of the energy-efficient furnace. Others, however, argue that because of economies of scale, the price of energy-efficient furnaces would quickly drop after the new rule took effect. Also, in the Denver area, many homebuilders already install energy-efficient furnaces, even in lower-priced homes.

An energy-effficient furnace.

An energy-efficient furnace.

Consumers with 80-percent efficient furnaces would not be forced to replace them, under the rule. However, new construction would require the more efficient furnaces and an 80 percent efficient furnace would need to be replaced with at least a 90-percent efficient furnace.

Earlier this month, the APGA and the DOE filed a joint settlement that would eliminate the May 1 deadline and would instead launch a new round of hearings on the topic.

“The Energy Department and APGA engaged in productive negotiations, including consultation with impacted stakeholders that intervened in the litigation, to reach a settlement we believe best serves the public interest,” a DOE spokesperson wrote in an email to InsideRealEstateNews.com.

“The Department looks forward to the court acting to implement the settlement agreement,” the spokesperson said. “As stated in the settlement agreement, the Department will initiate a rule making and comment procedure to establish new efficiency standards for non-weatherized furnaces. The Department aims to propose a new rule within one year and a final rule the following year.”

A panel of judges from the U.S. Court of Appeals for the District of Columbia Circuit Court must approve the settlement before it is final. That could happen in February.

The proposed settlement was pilloried by the American Council for an Energy-Efficient Economy.

A recent article by the ACEEE called the settlement a “dose of bad news,” and delaying the current standards is “no way to make saving energy a priority.”

An 80% furnace, such as this one, is vented differently than a 90%-efficient furnace.

An 80% furnace, such as this one, is vented differently than a 90%-efficient furnace.

According to DOE’s analysis, upgrading the efficiency of furnaces would save consumers more than $10 billion and would have removed up to 130 million metric tons of emissions that contribute to global warming.

According to an Environmental Protection Agency greenhouse gas calculator, that would be the equivalent to:

  • Eliminating carbon dioxide emissions from burning 53,438 gallons of gasoline.
  • The amount of carbon sequestered by 12,222 tree seedling grown for 10 years.
  • Carbon sequestered annually by 391 acres of U.S. forests.
  • Greenhouse emissions avoided by recycling 179 tons of waste instead of sending it to landfills.
  • Carbon dioxide emissions from 19,861 propane cylinders used for barbeques.
  • Carbon dioxide emissions from burning two rail cars of coal.

Congress passed a law in 2007 that allowed the DOE  to develop regional standards for central heating and cooling equipment.

“With new evidence piling up confirming that we need to be seriously ramping up efforts to stave off the worst effects of climate change, now is a lousy time to go backwards on simple steps like improved home heating energy efficiency,” the ACEEE said.

Do you think the DOE should have stuck to its guns and kept the deadline for 90% furnaces?

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Have a story idea or real estate tip? Contact John Rebchook at  JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.

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John Rebchook

John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for GlobeSt.com, covering commercial real estate for the Internet publication.

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