In a 2-1 decision, the D.C. Circuit Court of Appeals denied manufacturers’, trade groups’, and energy providers’ petitions for review challenging the Biden administration’s amendments to energy efficiency standards for consumer furnaces and commercial water heaters. The court was not persuaded by the petitioners’ contention that because the standards would drive less efficient noncondensing consumer furnaces and commercial water heaters out of the market in favor of condensing furnaces and water heaters, the standards would impermissibly make “unavailable” a product that offers unique performance characteristics and features. The court also rejected arguments that the U.S. Department of Energy’s economic justification for the standards was inadequate and that the agency failed to adhere to the Energy Policy and Conservation Act’s procedural requirements. The dissenting judge would have ruled that the standards were contrary to law because they would result in the “unavailability” of “traditional, ‘non-condensing’ gas furnaces and water heaters,” which have a “performance characteristic” that consumers value (i.e., the ability to vent exhaust up a standard chimney). She also would have found that the agency relied on a flawed model to determine that the standards were economically justified.

Challenge to a U.S. Department of Energy final interpretive rule regarding what constitutes a “feature” for purposes of establishing energy conservation standards.

American Gas Association v. U.S. Department of Energy

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D.C. Circuit Upheld Biden Administration Efficiency Standards for Furnaces and Water Heaters

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D.C. Circuit Upheld Biden Administration Efficiency Standards for Furnaces and Water Heaters

Policy instrument

Risk

Impacted group

Just transition

Fossil fuel

Greenhouse gas

Economic sector

Finance