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DOE Policy: In Search of Transparency (efficiency standards in controversy)

By -- November 25, 2014

A representative group of stakeholders developing a joint proposal does not relieve DOE of its obligation to consult with other ‘interested’ stakeholders, nor does it allow DOE to ignore substantive adverse comments.”

Should U.S. Department of Energy (DOE) rulemaking procedures be transparent and even-handed?

Of course they should. It is in the public interest for any regulatory agency to consider all viewpoints, even if those viewpoints may not coincide with the government’s particular philosophy at the time. The regulatory process, which places great power in the hands of regulators (like it or not), only succeeds if all voices are heard, arguments weighed, and a clear explanation of both the how and why particular claims prevailed and conclusions reached.

And, when the regulatory process relies upon data, it is also essential for an agency to make available to the public the data gathered and analyzed by the agency prior to any significant action (i.e., no “black box”).


On October 31st, DOE published a Request for Comments (RFI), “Energy Conservation Program: Procedures, Interpretations, and Policies for Consideration of New or Revised Energy Conservation Standards for Consumer Products.” The for-comment rulemaking consider amending DOE’s Process Improvement Rule as it relates to the promulgation of direct final rules (DFRs). OE issued the RFI because of litigation initiated by the American Public Gas Association (APGA) protesting DOE’s earlier use of the DFR procedure to issue a final rule on furnace efficiency standards.

For an overview of these events, last January, the following articles were published on MasterResource:

DOE was authorized to use the DFR process as a result of the Energy Independence and Security Act of 2007 (EISA). According to a DOE press release on February 26, 2007, DOE proposed language in EISA calling for “regional standards” (Sec. 306) and “expedited rulemaking” by “interested persons” (Sec. 308) to fast-track the development of mandatory “energy efficiency” minimums for appliances through “consensus” (i.e., Direct Final Rulemaking). The following is an excerpt of EISA Section 308 with emphasis added:

(I) the Secretary receives 1 or more adverse public comments relating to the direct final rule under subparagraph (B)(i) or any alternative joint recommendation; and

‘(II) based on the rulemaking record relating to the direct final rule, the Secretary determines that such adverse public comments or alternative joint recommendation may provide a reasonable basis for withdrawing the direct final rule under subsection (o), section 342(a)(6)(B), or any other applicable law.

The Secretary determines” provides DOE is a level of discretion as to how reasonable a given adverse comment may or may not be. How broad that discretion is represents the main issue-at-hand.

Recent Controversy

This DFR process became an issue in January 2010 when a group of “interested persons” submitted a recommendation for regional furnace standards that would have effectively banned the use of certain types of natural gas furnaces in the northern part of the country. In June 2011, DOE published a DFR incorporating the regional standards suggested by this group. More than 30 organizations filed adverse comments to the proposal, many arguing that the DOE analysis supporting the DFR was flawed in important substantive respects. Despite these adverse comments, DOE declined to withdraw the DFR.

Given these facts, APGA determined to appeal this final rule to the Court of Appeals for the D.C. Circuit on the basis, among others, that DOE had misused the DFR process by acting on a joint proposal that did not include important stakeholder groups, and by then ignoring substantive comments by stakeholders showing the analytical basis for the DFR was infirm.

It is important that DOE and all governmental agencies understand the need for an open and transparent regulatory process. A representative group of stakeholders developing a joint proposal does not relieve DOE of its obligation to consult with other “interested” stakeholders, nor does it allow DOE to ignore substantive adverse comments.

Fortunately, as part of the settlement of the APGA appeal of the furnace DFR, which was approved by the Court in April of this year, DOE agreed to a proceeding in which it would take comments on whether and how to reform its procedures to allow the public the protections that were written into the 2007 Act authorizing the use of direct final rules.

The RFI is available at the link below. Attached to it, as Appendix A, are the constructive comments of a number of groups that considered DOE to have misused the DFR process in issuing the furnace rule.

The notice of Request for Information is here. The deadline for comments on the DFR proposal is December 31st. Should any MasterResource readers want to file comments, the alternatives for doing so are explained in Docket EERE-2014-BT-STD-0049. Most definitely, DOE’s “energy efficiency” clientele will be.


Mark Krebs, an engineer by training, has been involved with energy efficiency design and program evaluation for more than twenty years. He has served as an expert witness in dozens of energy-efficiency filings, which he summarized in a Public Utilities Fortnightly article, “It’s a War Out There: A Gas Man Questions Electric Efficiency”   (December 1996).

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