In an attempt to force Americans to conserve energy, the Department of Energy is banning a whole class of popular furnaces, eventually raising heating costs and reducing product choices for families and businesses alike. And it is using an outdated law to give itself the authority to do so.
While the DOE did recognize many of the comments that I submitted arguing against its attempt to regulate gas furnaces, it did little more than brush them off. Unfortunately, higher costs and less choice won’t be so easy for American families and businesses to ignore.
Furthermore, the DOE relied on outdated congressional authority to devise its final rule, and the law itself doesn’t require the department to tighten standards for gas furnaces when there is no good reason for it to do so (and there isn’t).
The new rule does not simply alter standards; it would effectively remove a technology from the marketplace and reduce competition. This is antithetical to Congress’ wishes expressed in the 1975 Energy Policy and Conservation Act, which makes clear that maintaining a competitive market for products the law covers is an essential element of the cost-benefit calculation. Yet ultimately, the rule would have a tremendous effect on the furnace market by eliminating an entire technology, namely noncondensing gas furnaces.
While the DOE determined that noncondensing furnaces do not constitute a separate marketplace offering relative to condensing models, which it prefers, its conclusion is based on an overly narrow definition of separate product categories. Essentially, the department concluded that because both technologies are used to heat homes, they are not competitors and thus should not be considered separate product categories for regulatory purposes.
While both condensing and noncondensing furnaces heat homes, they have different costs, perform differently, and have different installation requirements. Condensing furnaces cost more and entail installation expenses that can be significant.
These differences matter to consumers, and this is why both technologies are sold in the marketplace. Indeed, the DOE estimated that noncondensing furnaces would represent 42% of furnace shipments in 2029, prior to its proposed rule taking effect, demonstrating the enduring value that American consumers find in noncondensing furnaces.
Congress, right or wrong, sought to improve consumer product efficiency when it passed the Energy Policy and Conservation Act nearly 50 years ago, but it was not seeking to empower the DOE to in effect ban a product that, according to the department’s own estimate, represents 42% of the market.