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On June 27, 2011, the U.S. Department of Energy (DOE) published in the Federal Register a direct final rule (DFR) under the Energy Policy and Conservation Act (EPCA), 42 U.S.C. §§ 6291-6309, which set forth amended energy conservation standards for residential furnaces, central air conditioners, and heat pumps, including regional standards for different product types in indicated States. 76 FR 37408. The American Public Gas Association (APGA) challenged the stricter 90% Annual Fuel Utilization Efficiency standard applying to non-weatherized gas furnaces in the northern region of the United States. A number of other entities intervened in that suit, challenging DOE’s standards for air conditioners and heat pumps in addition to furnaces. On April 24, 2014, the U.S. Court of Appeals for the D.C. Circuit accepted a settlement agreement to resolve this lawsuit. 

Under the settlement, the portion of the rule relating to energy conservation standards for non-weatherized gas furnaces is vacated and remanded to DOE for a new notice and comment rulemaking proceeding.  The remaining portions of the challenged rule, i.e., the conservation standards for other furnaces, central air conditioners, and heat pumps remain in place. Further, DOE has agreed to: conduct an administrative proceeding to clarify its process related to direct final rules; clarify its position regarding its enforcement authority vis-à-vis distributors; exercise its enforcement discretion by not seeking civil penalties for violations of the regional air conditioner standards for 18 months, so as to alleviate problems related to product sell-through and stranded inventory; and consider a negotiated rulemaking to address enforcement of regional standards for central air conditioners.