American Gas Association v. DOEAmerican Gas Association v. DOE
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 21, 2024 Decided November 4, 2025
No. 22-1030
AMERICAN GAS ASSOCIATION, ET AL.,
PETITIONERS
v.
UNITED STATES DEPARTMENT OF ENERGY AND CHRIS
WRIGHT, SECRETARY, U.S. DEPARTMENT OF ENERGY,
RESPONDENTS
CITY OF NEW YORK, ET AL.,
INTERVENORS
Consolidated with 23-1285, 23-1337
of the U.S. Department of Energy
Mithun Mansinghani argued the cause for petitioners.
With him on the joint briefs were Michael B. Schon, Renée M.
Lani, Randolph L. Elliott, Samantha L. Fugagli, Drew F.
Waldbeser, Adeline Kenerly Lambert, Michael L. Murray, and
Matthew J. Agen.
Andrew R. Varcoe, Stephanie A. Maloney, Jeremy C.
Marwell, and Nathan Campbell were on the brief for amicus
curiae the Chamber of Commerce of the United States of
America in support of petitioners.
Jonathan Skrmetti, Attorney General, Office of the
Attorney General for the State of Tennessee, J. Matthew Rice,
Solicitor General, Whitney Hermandorfer, Director of
Strategic Litigation, Matthew D. Cloutier, Assistant Solicitor
General; Steve Marshall, Attorney General, Office of the
Attorney General for the State of Alabama, Ashley Moody,
Attorney General, Office of the Attorney General for the State
of Florida; Theodore E. Rokita, Attorney General, Office of the
Attorney General for the State of Indiana; Kris W. Kobach,
Attorney General, Office of the Attorney General for the State
of Kansas; Liz Murrill, Attorney General, Office of the
Attorney General for the State of Louisiana; Andrew Bailey,
Attorney General, Office of the Attorney General for the State
of Missouri; Gentner Drummond, Attorney General, Office of
the Attorney General for the State of Oklahoma; Tim Griffin,
Attorney General, Office of the Attorney General for the State
of Arkansas; Chris Carr, Attorney General, Office of the
Attorney General for the State of Georgia; Brenna Bird,
Attorney General, Office of the Attorney General for the State
of Iowa; Russell Coleman, Attorney General, Office of the
Attorney General for the Commonwealth of Kentucky; Lynn
Fitch, Attorney General, Office of the Attorney General for the
State of Mississippi; Michael T. Hilgers, Attorney General,
Office of the Attorney General for the State of Nebraska; Alan
Wilson, Attorney General, Office of the Attorney General for
the State of South Carolina; Ken Paxton, Attorney General,
Office of the Attorney General for the State of Texas; Patrick
Morrisey, Attorney General, Office of the Attorney General for
the State of West Virginia; and Jason Miyares, Attorney
General, Office of the Attorney General for the
Commonwealth оf Virginia, were on the brief for amici curiae
States of Tennessee, et al. in support of petitioners.
J. Mark Little and Megan H. Berge were on the brief for
amici curiae National Multifamily Housing Council, et al. in
support of petitioners.
Steven H. Hazel, Attorney, U.S. Department of Justice,
argued the cause for respondents. With him on the brief were
Brian M. Boynton, Principal Deputy Assistant Attorney
General, Michael S. Raab, Attorney, and Samuel Walsh,
General Counsel, U.S. Department of Energy. Sarah Carroll
and John Starcher, Attorneys, U.S. Department of Justice,
entered appearances.
Letitia James, Attorney General, Office of the Attorney
General for the State of New York, Jeffrey W. Lang, Deputy
Solicitor General, Brian Lusignan, Assistant Solicitor General,
Morgan Anna Costello, Laura Mirman-Heslin, Timothy
Hoffman, and Christopher Gore, Assistant Attorneys General,
and; Kevin Breiner and Timothy D. Ballo, Earthjustice; Emily
Davis, Natural Resources Defense Council; Andrea Joy
Campbell, Attorney General, Office of the Attorney General
for the Commonwealth of Massachusetts, Turner Smith,
Assistant Attorney General; Muriel Goode-Trufant, Acting
Corporation Counsel,
New York City Law Department; Brian L. Schwab, Attorney
General, Office of the Attorney General for the District of
Columbia, Caroline S. Van Zile, Deputy Solicitor General;
Aaron Frey, Attorney General, Office of the Attorney General
for the State of Maine, Robert L. Martin, Assistant Attorney
General; Kwame Raoul, Attorney General, Office of the
Attorney General for the State of Illinois, Elizabeth Dubats,
Assistant Attorney General; Anthony G. Brown, Attorney
General, Office of the Attorney General for the State of
Maryland, John B. Howard, Jr., Special Assistant Attorney
General, Steven Jay Goldstein, Assistant Attorney General;
Keith Ellison, Attorney General, Office of the Attorney
General for the State of Minnesota, Peter Surdo, Special
Assistant Attorney General; Matthew J. Platkin, Attorney
General, Office of the Attorney General for the State of New
Jersey, David Apy, Assistant Attorney General; Aaron D. Ford,
Attorney General, Office of the Attorney General for the State
of Nevada, Heidi Parry Stern, Solicitor General; Raúl Torrez,
Attorney General, Office of the Attorney General for the State
of New Mexico, William Granthan, Assistant Attorney
General, Ellen F. Rosenblum, Attorney General, Office of the
Attorney General for the State of Oregon, Paul Garrahan,
Attorney-in-Charge, Steve Novick, Special Assistant Attorney
General; Robert W. Ferguson, Attorney General, Office of the
Attorney General for the State of Washington, Stephen Scheele,
Assistant Attorney General; and Charity Clark, Attorney
General, Office of the Attorney General for the State of
Vermont, and Hannah Yindra, Assistant Attorney General,
were on the brief for respondent-intervenors.
Jason A. Schwartz was on the brief for amicus curiae the
Institute for Policy Integrity at New York University Sсhool of
Law in support of respondents.
Before: PILLARD, WILKINS, and RAO, Circuit Judges.
Opinion for the Court filed by Circuit Judge WILKINS.
Dissenting opinion filed by Circuit Judge RAO.
WILKINS, Circuit Judge: After the Department of Energy
(“DOE”) promulgated amended energy efficiency standards
for consumer furnaces (residential non-weatherized gas
furnaces and mobile home gas furnaces) and certain
commercial water heaters under the Energy Policy and
Conservation Act (“EPCA”), Petitioners—who are a number
of trade associations, manufacturers, and energy providers—
filed petitions for review in this Court challenging DOE’s
actions. Energy Conservation Program: Energy Conservation
Standards for Consumer Furnaces, 88 Fed. Reg. 87502 (Dec.
18, 2023) (“Consumer Furnaces Rule”); Energy Conservation
Program: Energy Conservation Standards for Commercial
Water Heating Equipment, 88 Fed. Reg. 69686 (Oct. 6, 2023)
(“Commercial Water Heaters Rule”); Energy Conservation
Program for Appliance Standards: Energy Conservation
Standards for Residential Furnaces and Commercial Water
Heaters, 86 Fed. Reg. 73947 (Dec. 29, 2021) (“2021
Interpretive Rule”).
In this consolidated case, Petitioners contend that DOE’s
amended energy efficiency standards will expel
non-condensing consumer furnaces and commercial water
heaters—which they allege offer consumers unique
performance characteristics and features—out of the market
because they will be unable to meet the newly amended energy
efficiency standards, unlike their condensing counterparts.
Petitioners also argue that DOE did not provide adequate
economic justification, as is required by
promulgating the amended efficiency standards. Lastly,
Petitioners allege that DOE failed to adhere to procedural
requirements as provided by EPCA when promulgating the
Consumer Furnaces Rule. Because each of Petitioners’
arguments fail, we deny the petitions.
I. Background
A.
EPCA, amended in 1992, was enacted in order “to provide
for improved energy efficiency1 of . . . major appliances, and
certain other consumer products[,]” among other purposes. 42
freezers, air conditioners, water heaters, furnaces, ovens,
television sets, etc. are “covered products” under EPCA and are
subject to improved energy efficiency standards as authorized
by the Secretary of DOE. Id. §§ 6292(a), 6295(a). As relevant
to this case, DOE was mandated to set energy conservation
standards for consumer furnaces and commercial water heaters
under subsections 6295(f) and 6313(a), respectively.
EPCA also authorizes DOE to make amendments to
energy conservation standards after certain times and
triggering events. Id. §§ 6295(m), 6313(a)(6). For example,
regarding commercial furnaces, subsection 6295(m)(1)
provides that “[n]ot later than 6 years after issuance of any final
rule . . . amending a standard” DOE will either publish a notice
that the standards do not need to be amended, or publish a
notice of proposed rulemaking including the new proposed
standards. A later provision of the statute provides that any
amended energy conservation standard for consumer furnaces
“shall . . . achieve the maximum improvement in energy
efficiency . . . [that] is technologically feasible and
economically justified.” Id. § 6295(o)(2)(A). Likewise, for
commercial water heaters, subsection 6313(a)(6) provides that
DOE will amend efficiency standards to be at least consistent
with the standards set by the American Society of Heating,
Refrigerating and Air-Conditioning Engineers (“ASHRAE”).
2021 Interpretive Rule, 86 Fed. at 73948. If DOE chooses to
apply a more stringent efficiency standard for commercial
water heaters, the standard needs to result in “significant
additional conservation of energy,” and be “technologically
feasible and economically justified” by clear and convincing
evidence. Id. § 6313(a)(6)(A)(ii)(II).
Congress set out several factors for DOE to consider when
determining whether an amended energy standard is
economically justified. The statutes ask DOE to consider:
- (I) the economic impact of the standard
- (II) the savings in operating costs
- (III) the total projected quantity of energy
- (IV) any lessening of the utility or the
on the manufacturers and on the
consumers of the products subject to
the standard;
throughout the estimated average life
of the product in the type (or class)
compared to any increase in the price
of, or in the initial charges for, or
maintenance expenses of, the
products that are likely to result from
the imposition of the standard;
savings likely to result directly from
the imposition of the standard;
performance of the products likely
result from the imposition of the
standard;
- (V) the impact of any lessening of
- (VI) the need for national energy
- (VII) other factors the Secretary considers
competition, as determined in writing
by the Attorney General, that is likely
to result from the imposition of the
standard;
conservation; and
relevant.
Id. § 6313(a)(6)(B)(ii); see also id. § 6295(o)(2)(B)(i) (same)2
Importantly, and as relevant to this case, DOE may not
prescribe an amended standard if any “interested persons”
establish “by a preponderance of the evidence that [an
efficiency] standard is likely to result in the unavailability in
the United States in any product type (or class) of performance
characteristics (including reliability, features, sizes, capacities,
and volumes) that are substantially the same as those generally
available in the United States.” Id. § 6313(a)(6)(B)(iii)(II)(aa);
see also id. § 6295(o)(4) (“[DOE] may not prescribe an
amended . . . standard . . . if [DOE] finds . . . that interested
persons have established by a preponderance of the evidence
that the standard is likely to result in the unavailability in the
[U.S.] in any covered product type (or class) of performance
characteristics (including reliability), features, sizes,
capacities, and volumes that are substantially the same as those
generally available in the [U.S.] at the time of [DOE’s]
finding.”).3
B.
Before discussing the procedural history of this case, a
brief overview of the mechanics of condensing versus
non-condensing consumer furnaces and commercial water
heaters is necessary. In a non-condensing consumer furnace or
commercial water heater, a heat exchanger burns gas which is
used to heat the air (for furnaces) or water (for water heaters).
The rest of the heated gas, which is not used for the appliance,
is transferred out of a building via an unpowered heat
exchanger, like a vertical chimney. The vents for non-
condensing appliances are “designed to avoid excessive
condensate production in the vent.” Consumer Furnaces Rule,
88 Fed. Reg. at 87563 n.111. In a condensing consumer
furnace or commercial water heater, on the other hand, a
second powered heat exchanger is used to capture the excess
heat not used to heat air or water. This second heat exchanger
turns the excess heat into condensed water vapor, then transfers
the cooler air out through a fanned horizontal vent and the
liquid condensate out through a drain. This added heat
exchanger makes the condensing appliance more efficient
overall as compared to its non-condensing counterpart.
Additionally, the vents that are used in a condensing appliance
are “corrosion-resistant,” like plastic, id. at 87562–63 & n.111,
and therefore non-condensing appliances and condensing
appliances are unable to share the same vents. Id. at 87536; see
also Commercial Water Heaters Rule, 88 Fed. Reg. at 69710
(same).
On March 12, 2015, DOE published a notice of proposed
rulemaking (“NOPR”) to amend energy conservation standards
for consumer furnaces. In this March 2015 NOPR, “DOE
tentatively concluded that
vented . . . do not provide any separate performance-related
impacts,” and therefore аre not a “unique utility to consumers
beyond the basic function of providing heat, which all furnaces
perform.” 2021 Interpretive Rule, 86 Fed. Reg. at 73949. After
publishing a notice of data availability, DOE supplemented its
NOPR on September 23, 2016 (referred to as a “SNOPR”),
proposing to establish capacity-based product classes, and
“reiterated its tentative conclusion that methods of venting do
not provide any performance-related utility separate from the
basic function of a furnace.” Id. Separately, DOE published a
NOPR to amend energy conservation standards for commercial
water heaters on May 31, 2016, in which DOE also tentatively
concluded that condensing and non-condensing commercial
water heaters “provide the same hot water” for commercial
consumers and therefore do not require separate equipment
classes. Id. In each of these notices, DOE “proposed
amend[ing] energy conservation standards that would
effectively require [consumer furnaces and commercial water
heaters] . . . to use condensing technology to meet the proposed
amended standards,” and would “effectively eliminate[] all
non-condensing [consumer furnaces and commercial water
heaters] . . . currently on the market.” Id.
On October 18, 2018, Petitioners submitted a petition for
rulemaking to DOE. In it they asked DOE to: (1) issue an
interpretive rule stating that the agency’s proposed energy
conservation standards would result in the unavailability of
“performance characteristics” in consumer furnaces and
commercial water heaters, and (2) withdraw the proposed
energy conservation standards because of that finding. DOE
published the petition and requested public comment.
On July 11, 2019, after considering public comments,
DOE published a notice of a proposed interpretive rule
(“NOPIR”) that non-condensing technology “constitute[s] a
performance-related ‘feature’ . . . that cannot be eliminated
through adoption of an energy conservation standard.” Id. at
73949–50. This was eventually followed by a final interpretive
rule on January 15, 2021, “determining that, in the context of
residential furnaces . . . [and] commercial water
heaters . . . use of non-condensing technology (and associated
venting) constitutes a performance-related ‘feature.’” Id. at
73950. DOE found that the reasons non-condensing
technology offers unique “feature[s]” is because it “(1)
[a]void[s] complex installations in certain locations
constrained by space, existing venting, and availablе drainage;
(2) avoid[s] the encroachment on usable space that would occur
in certain installations; and (3) do[es] not enhance the level of
fuel switching that might accompany standard setting absent a
separate product/equipment class for non-condensing
appliance[s].” Id. Following this final interpretive rule, DOE
withdrew its March 12, 2015, NOPR.
Then, about seven months later, on August 27, 2021, DOE
published another NOPIR where it “re-examined the
conclusions reached in the January 2021” final interpretive
rule. In this August 2021 NOPIR, DOE proposed to “re-instate
its historical interpretation of” “performance characteristics”
and “features” to conclude that “non-condensing technology”
for consumer furnaces and commercial water heaters is “not a
performance-related ‘feature’ for the purpose of the EPCA.”
Id. at 73948, 73950.
On the same day, August 27, 2021, DOE requested
comment on the NOPIR with the comment period scheduled to
close on September 27, 2021. However, after receiving a
request from Petitioners, DOE extended
October 12, 2021.
When the comment period closed DOE issued a Final
Interpretive Rule on December 29, 2021. Consistent with its
March 2015 NOPR, September 2016 SNOPR, and May 2016
NOPR, DOE concluded that non-condensing technology in
consumer furnaces and commercial water heaters does not
offer performance-related “feature[s]” as compared to
condensing consumer furnaces and commercial water heaters.
Id. at 73951. DOE once again found that there was no unique
utility to consumers offered by non-condensing technology as
both non-condensing and condensing appliance’s function is to
provide heated air or water. DOE concluded “[u]pon further
consideration” that “utility is determined through the benefits
and usefulness the feature provides to the consumer while
interacting with the product.” Id. Therefore, differences in
cost or complexity of installation “do not make any method of
venting a performance-related feature.” Id. Instead, DOE
explained that those considerations were more appropriate
under its economic justification analysis under
subsections 6295(o)(2)(B)(i) and 6313(a)(6)(B)(ii).
On October 6, 2023, DOE published a Final Rule updating
the efficiency standards for commercial water heaters after
determining the revised efficiency standards “represent[ed] the
maximum improvement in energy efficiency that [was]
technologically feasible and economically justified.”
Commercial Water Heaters Rule, 88 Fed. Reg. at 69687. The
amended efficiency standards for commercial water heaters
were estimated to save 5.6 percent energy usage relative to the
case without amended standards. Id. at 69688. Likewise, on
December 18, 2023, DOE amended energy conservation
standards for consumer furnaces that included residential non-
weatherized gas furnaces and mobile home gas furnaces.
Consumer Furnaces Rule, 88 Fed. Reg. at 87503. DOE
estimated that the amended standards for consumer furnaces
would save 4.77 quadrillion British thermal units (“Btu”),
which represented a 3.2 percent savings if compared to a
scenario without amended efficiency stаndards. Id. at 87504.
Petitioners ask us to vacate DOE’s 2021 Interpretive Rule,
the Commercial Water Heaters Rule, and the Consumer
Furnaces Rule.
II. Analysis
A. Jurisdiction and Standing
We have jurisdiction to review the petitions under 42
U.S.C. sections 6306(b) and 6316. This Court will “hold
unlawful and set aside agency action, findings, and conclusions
found to be . . . arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law” or “without observance
of procedure required by law.” 5
will not “substitute [our] judgment for that of the agency,”
Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 43 (1983)
, nor will we “supply a
reasoned basis for the agency’s action that the agency itself has
not given.” Id. (citing SEC v. Chenery Corp., 332 U.S. 194,
196 (1947)
). If the “agency [has] examine[d] the relevant data
and articulate[d] a satisfactory explanation for its action
including a ‘rational connection between the facts found and
the choice made’” we will uphold the decision. Id. (quoting
Burlington Truck Lines, Inc. v. United States, 371 U.S. 156,
168 (1962)
); see also Loper Bright Enters. v. Raimondo, 603
U.S. 369, 395–96 (2024)
. The agency must “clearly disclose[]”
“the grounds upon
T-Mobile S., LLC v. City of Roswell, 574 U.S. 293, 301 (2015);
42 U.S.C. § 6306(b)(2) (“No rule under section . . . 6295 of this
title may be affirmed unless supported by substantial
evidence.”).
An association has standing on behalf of its members if at
least one member has standing to sue individually. Sierra Club
v. DOE, 107 F.4th 1012, 1014 (D.C. Cir. 2024)
(citing Hunt v.
Wash. State Apple Advert. Comm’n, 432 U.S. 333, 343 (1977)
).
An association also must show that “the interests it seeks to
protect are germane to the organization’s purpose” and that
“neither the claim asserted nor the relief requested requires the
participation of individual members in the lawsuit.” Hunt, 432
U.S. at 343
.
Petitioners American Gas Association (“AGA”),
American Public Gas Association (“APGA”), and National
Propane Gas Association (“NPGA”) are trade associations.
AGA advocates for natural gas companies and customers;
APGA advocates for publicly owned or operated natural gas
systems; and, NPGA represents various entities in the propane
industry. AGA, APGA, and NPGA have adequately supported
their claim of associational standing in their declarations by
alleging that their members expect to incur economic loss if the
Consumer Furnaces and Commercial Water Heaters Final
Rules are not vacated. They allege that without vacatur their
members will be injured when consumers switch from natural
gas to electric appliances. Pet’rs’ Decl. Addendum at 3–
4 ¶¶ 7–9, 6–7 ¶¶ 6–7, 18–19 ¶¶ 6–8, 31–33 ¶¶ 7–9, 36 ¶¶ 6–8;
see Am. Pub. Gas Ass’n. v. DOE, 72 F.4th 1324, 1336 (D.C.
Cir. 2023)
(holding that petitioners “demonstrated standing
through declarations attesting to their expectations of economic
losses caused by the [f]inal [r]ule that may be remedied by
vacatur of the rule”).
Petitioner Thermo Products, LLC (“Thermo”) is a
manufacturer of gas and oil furnaces and claims its standing to
challenge the 2021 Interpretive Rule and the Consumer
Furnaces Rule is “self-evident.” We agree. A petitioner suffers
an injury in fаct by an agency when the agency promulgates a
regulation that prohibits a petitioner from producing or selling
a product that they would have otherwise been able to produce
or sell. See Energy Future Coal. v. EPA, 793 F.3d 141, 144
(D.C. Cir. 2015)
(holding that petitioners faced an injury in fact
when they “claim that they face a regulatory
impediment . . . that prevents their product from being used as
a test fuel”). Thermo alleges that DOE’s 2021 Interpretive
Rule and Consumer Furnaces Rule will impose standards that
its noncondensing residential furnaces will not be able to meet
or be redesigned to meet. Pet’rs’ Decl. Addendum at 14–
15 ¶¶ 5–7. Thermo claims that as a result it will not be able to
sell non-condensing furnaces, which will cause it to “face
interrupted and possibly lost revenue streams,” “abandon”
product designs “in which it has invested large amounts of
capital,” and reverse changes in its operations. Id. ¶ 7. We also
find that Thermo has demonstrated causation and redressability
by alleging that the loss of sales it may face will be directly
caused by the efficiency standards imposed in the Consumer
Furnaces Rule, and vacating the rule will redress the alleged
injury. See Energy Future Coal., 793 F.3d at 144.4
(holding that if one
Turning to the merits of the petition: We next determine
whether DOE was correct to conclude that non-condensing
appliances offer performance characteristics or features that are
substantially the same as those offered by condensing
appliances. 42 U.S.C. §§ 6295(o)(4),
6313(a)(6)(B)(iii)(II)(aa). We note that DOE’s interpretation
of EPCA does not bind us, but “it may be especially
informative ‘to the extent it rests on factual premises within . . .
[DOE’s] expertise.’” Loper Bright Enters., 603 U.S. at 402
(quoting Bureau of Alcohol, Tobacco and Firearms v. FLRA,
464 U.S. 89, 98, n.8 (1983)
). “Such expertise has always been
one of the factors which may give an Executive Branch
interpretation particular ‘power to persuade, if lacking power
to control.’” Id. (quoting Skidmore v. Swift & Co., 323 U.S.
134, 140 (1944)
).
Congress gave DOE “a degree of discretion” to decide
what constitutes a performance characteristic or feature under
EPCA. Id. at 2263. “The burden of producing evidence and
proving that a[n efficienсy] standard level will result in the
unavailability of certain characteristics, etc., rests on interested
persons asserting the claim of unavailability.” H.R. REP. NO.
100-11, at 23 (1987); 42 U.S.C. §§ 6295(o)(4),
6313(a)(6)(B)(iii)(II)(aa). Petitioners must make this showing
before DOE by a preponderance of the evidence.
We begin with the plain text of the statute. See United
States v. Braxtonbrown-Smith, 278 F.3d 1348, 1352 (D.C. Cir.
2002)
(“In construing a statute, the court begins with the plain
language of the statute.”). All parties, including the dissent,
see Dissenting Op. 8–9, agree that the plain meaning of
“performance characteristics” is broad. The term
“performance” is simply defined as “the execution of an
action,” Performance, MERRIAM-WEBSTER INC. (Ninth New
Collegiate 1985), and “characteristic” is defined as “a
distinguishing trait, quality, or property.” Characteristic,
MERRIAM-WEBSTER INC. (Ninth New Collegiate 1985).
Additionally, “feature” means “the structure, form, or
appearance” and “a prominent part or characteristic.” Feature,
MERRIAM-WEBSTER INC. (Ninth New Collegiate 1985).
The parties agree that the plain text of “performance
characteristic” means a product attribute that provides utility to
consumers desiring to use the product.5 Pet’rs’ Br. 46; Resp’ts’
Br. 26 (performance characteristics “provide a consumer
unique utility during the operation of the appliance”) (quoting
2021 Interpretive Rule, 86 Fed. Reg. at 73955); Oral Arg. Tr.
at 5:11–20 (When asked for his definition of “performance
characteristic” at oral argument, Petitioners’ counsel stated that
it is “a product attribute that provides utility to consumers
desiring to use the product.”). In other words, a performance
characteristic “has to be . . . about using the product,” and
“doesn’t include things unrelated to the performance of the
product,” Oral Arg. Tr. at 5:23-25. Instead, a performance
characteristic is related to “the product[’s] . . . useful output.”
2021 Interpretive Rule, 86 Fed. Reg. at 73955.
function to consumers, the concept of a feature or performance
characteristic is “very case-specific.” 2021 Interpretive Rule,
86 Fed. Rеg. at 73948. “No single definition could effectively
capture the potential for features across the broad array of
consumer products and commercial equipment subject to
EPCA’s regulatory scheme.” Id. Therefore, because the plain
text of the statute does not get us home, we will look beyond it
to resolve the specific ambiguity here as it relates to consumer
furnaces and commercial water heaters. See Braxtonbrown-
Smith, 278 F.3d at 1352
(“Where the language is subject to
more than one interpretation and the meaning of Congress is
not apparent from the language itself, the court may be forced
to look to the general purpose of Congress in enacting the
statute and to its legislative history for helpful clues.”)
The parties’ dispute centers around the specific ambiguity
of what product attributes of small furnaces and water heaters
Congress concluded had utility to consumers such that they
warrant protection against energy conservation standards that
could eliminate them from the market. Specifically, the parties
dispute whether venting mechanisms, installation factors, or
space-related attributes encompass features that Congress
meant to treat as providing utility to consumers.
Beginning with venting mechanisms: Petitioners contend
that non-condensing appliances, which use unpowered venting
like vertical chimneys, offer performance characteristics to
consumers that condensing appliances do not. According to
Petitioners, condensing appliances are incompatible with
venting systems like chimneys because condensing appliances
require a fan to generate enough pressure to push or pull gases
outside. Pet’rs’ Br. 12. Petitioners further contend that
condensing appliances require plumbing drains to dispose of
condensate and cannot share vents with non-condensing
appliances. Pet’rs’ Br. 13. Petitioners argue that consumers
derive utility from a product by, for example, not “hav[ing] to
renovate their homes,” “to accommodate the use of
[condensing] products for which they were not architecturally
designed.” Oral Arg. Tr. 6:4; J.A. 324.
Congress was well aware of Petitioners’ perspective
regarding venting mechanics for small gas furnaces when it
amended EPCA in 1987. AGA submitted a statement before
the Subcommittee on Energy Conservation and Power in 1986
expressing concern that energy efficiency standards in EPCA
“would ban the conventional, atmospherically vented furnace”
beсause it would not be able to meet the prescribed efficiency
percentage. A Bill to Amend the Energy Policy and
Conservation Act with Respect to Energy Conservation
Standards for Appliances: Hearing on H.R. 5465 Before the
H. Subcomm. on Energy Conservation & Power, 99th Cong.
149 (1986). After hearing Petitioners’ perspective, the
Committee on Energy and Commerce issued the amended
EPCA bill the following year. In it, the Committee provided
that “[e]xamples of ‘performance characteristics’ of particular
products [were]: safety; cooling; refrigeration and heating;
dehumidification; ability to clean or dry without adverse
effects; serviceability; and incidence and cost o[f] repair.”
H.R. REP. NO. 100-11, at 23 (1987). Additionally, “[e]xamples
of ‘features’ [were]: automatic defrost, through the door ice,
size of room air conditioners, and noise levels.” Id. Therefore,
despite AGA’s comments, the Committee did not state that
venting mechanics were examples of performance
characteristics or features for consumer furnaces. However, it
characteristic. The dissent does not discuss this part of the
legislative history.
We think the Committee on Energy and Commerce’s
examples make good sense. At a certain level, it is obvious that
consumers do not buy small furnaces or commercial water
heaters because of how the appliance vents. In fact, venting is
a quality that both condensing and non-condensing appliances
share. It “is one of the basic components found in every gas-
fired furnace.” Consumer Furnaces Rule, 88 Fed. Reg. at
87535; see also Commercial Water Heaters Rule, 88 Fed. Reg.
at 69709 (“[V]enting, like a gas burner or heat exchanger, is
one of the basic components found in every gas-fired water
heater (condensing or noncondensing.”). The dissent seems to
overlook this aspect by arguing, without support, that “some
consumers here will be effectively deprived of gas-powered
appliances entirely.” Dissenting Op 12 n.1. This is simply not
true since gas-fired condensing options will still be available to
consumers.
Instead, the unique utility a consumer furnace or
commercial water heater provides to the consumer is that they
either provide hot air or hot water, respectively. If Congress
intended particular methods of venting such as unpowered
venting to be a performance characteristic, it had an
opportunity to clearly state as much—but it did not. See
Mississippi ex rel. Hood v. AU Optronics Corp., 571 U.S. 161,
169 (2014)
(“Had Congress intended . . . [Petitioners’ view of
the statute], it easily could have drafted language to that
effect.”).
This understanding is also consistent with DOE’s
historical view of whether an appliance provides a unique
utility to consumers.6 Take vented and ventless residential
(discussing DOE’s 2020 Final Ruleclothes dryers as an example. In 2011, DOE separated ventless and vented residential clothes dryers into two separate classes because DOE recognized that having a ventless clothes dryer was a unique utility for consumers who live in areas where a vented dryer would not be possible to use (like apartments in certain high-rise buildings). See Energy Conservation Program: Energy Conservation Standards for Residential Clothes Dryers and Room Air Conditioners, 76 Fed. Reg. 22454, 22485 (Apr. 21, 2011). DOE found that “a substantial subset of consumers . . . would be deprived of the benefits of . . . having [a] clothes-drying appliance in their residence entirely unless DOE established a ventless clothes dryers product class.” 2021 Interpretive Rule, 86 Fed. Reg. at 73957. Venting was treated as a performance charaсteristic in the clothes dryer context because the alternative venting option (non-vented) impacted whether a consumer could use or install the particular appliance at all in a large class of applications.7
times in clothes washers and dryers. Cycle times have been understood as “a valuable consumer utility and performance-related feature” in the context of clothes washers and clothes dryers because consumers value the utility
Not so with condensing consumer water heaters or furnaces. When DOE had to determine whether consumer water heaters that utilize heat pump technology versus electric resistance technology should be placed in separate classes, DOE concluded that they did not. See Energy Conservation Program: Energy Conservation Standards for Residential Water Heaters, Direct Heating Equipment, and Poоl Heaters, 75 Fed. Reg. 20112, 20135 (April 16, 2010). DOE concluded that even though an additional water drain had to be installed if a consumer decides to use a heat pump, that small installation requirement did not change the utility of providing heated water to consumers, and moreover that “heat pump water heaters could replace traditional electric resistance storage water heaters in most residences, although the installation requirements may be quite costly.” Id. So is the case here. DOE found that “[i]n all cases” “consumers facing the prospect of replacing a non-condensing residential furnace or commercial water heater with a condensing . . . [appliance] do have options available to either modify existing venting or install a new venting system to accommodate a condensing . . . [appliance], or to install a feasible alternative.” 2021 Interpretive Rule, 86 Fed. Reg. at 73957.
Next, Petitioners contend that “space-related attributes” are performance characteristics that are “intertwined” with the function of a consumer furnace and a commercial water heater. Pet’rs’ Br. 48–50.
Recall that Petitioners’ burden is a heavy one—they must “establish[] by a preponderance of the evidence that a[n
efficiency] standard is likely to result in the unavailability in the United States in any product type (or class) of performance characteristics (including . . . sizes, capacities, and volumes) that are substantially the same as those generally available in the United States.”
In regards to commercial water heaters, DOE explained in the 2021 Interpretive Rule that condensing technology does not “require[] an increase in the overall size of a water heater” and that “a condensing appliance would not result in a loss of useful space for most consumers.” 2021 Interpretive Rule, 86 Fed. Reg. at 73955; see also id. at 73957 n.13 (“DOE surveyed the dimensions of representative commercial water heaters . . . and found the height and diameter dimensions comparable.”). Moreover, after conducting a review of both condensing and non-condensing appliances having similar input ratings and storage volumes from multiple manufactures, DOE found that the “overall dimensions for condensing models were not significantly larger than for non-condensing models.” Id. at 73955. Specifically, DOE found that “non-condensing residential furnaces
Petitioners argue that DOE’s analysis of the space-related characteristics of consumer furnaces and commercial water heaters is inconsistent with how it has analyzed other products like residential condensing and non-condensing furnace fans, washing machines, and central air conditioners. Petitioners argue that the reason Congress separated efficiency stаndards for residential furnace fans used in mobile homes into its own product class, for example, was due to the size constraints that
manufactured homes face. Pet’rs’ Br. 47–55; see Energy Conservation Program for Consumer Products: Energy Conservation Standards for Residential Furnace Fans, 78 Fed. Reg. 64068, 64077 (Oct. 25, 2013). Although Petitioners may be correct that size constraints were one of the factors DOE considered when promulgating efficiency standards for furnace fans used in mobile homes versus those not used in mobile homes, they oversimplify DOE’s analysis. DOE separated furnace fans based on characteristics such as whether the furnace fan was weatherized (meaning that it could be used outdoors), the type of energy source the furnace fan used, and whether the furnace fan was condensing or non-condensing. See Energy Conservation Program for Consumer Products, 78 Fed. Reg. at 64077. DOE explained that it separated these categories based on “internal structure and application-specific design differences that impact furnace fan energy consumption.” Id. Specifically for condensing furnaces, DOE explаined that the separate fan class structure “allow[ed] for differentiation of products with designs that achieve higher thermal efficiency but may have lower fan performance.” Id. at 64080. Therefore, unlike space-related attributes of consumer furnaces and commercial water heaters, the design of mobile home furnace fans is directly related to performance requirements of the particular product.
Petitioners also point to front-loading and top-loading washing machines to support their contention that size and installation limits are “performance characteristics.” Pet’rs’ Br. 48; Energy Conservation Standards for Residential Clothes Washers, 84 Fed. Reg. 37794 (Aug. 2, 2019). However, unlike condensing and non-condensing consumer furnaces and commercial water heaters, washing machine capacity has a direct impact on efficiency levels and “the location of access” to a washing machine “provides distinct consumer utility.” Energy Conservation Standards for Residentiаl Clothes
Washers, 84 Fed. Reg. at 37797. For example, front-loading washers may be preferable to those with disabilities because the angle may be easier to access, whereas top-loading washers may be preferred by the elderly “because it is easier to reach the laundry without excessive bending” or those who appreciate the ability to add more clothes while the cycle has already begun. 2021 Interpretive Rule, 86 Fed. Reg. at 73953. In contrast, “a consumer’s interaction with a furnace or water heater . . . [is] a simple one.” Id. “After the consumer adjusts the thermostat or faucet, the user receives the requested heated air or water.” Id.
Likewise, Petitioners’ argument regarding Congress’s decision to separate “space-constrained central air conditioners” from other central air conditioners misses the point. DOE explained that it separated these two product classes because “space-constrained central air conditioners prоvide centralized air conditioning in locations with space constraints that would preclude the use of other types of central air conditioners.” Id. at 73957. “Space-constrained central air conditioners have an
analyzing non-condensing consumer furnaces and commercial water heaters, it found that they were “not significantly different in overall footprint, size, or heating capacity from their condensing counterparts.” Id.
Lastly, as to installation factors: DOE recognized that “installation of condensing products/equipment [sometimes] requires modifications to the installed space . . . and that such modifications may impact the installation cost and/or complexity.” Id. at 73962. Because DOE found that consumers are able to replace non-condensing appliances with condensing appliances in “all cases,” we agree that installation factors are more appropriately addressed in the economic-justification analysis because installation factors will not prevent the replacement of non-condensing appliances, but may financially deter consumers from doing so. See id. at 73957. The language of subsections 6295(o)(4) and 6313(a)(6)(B)(iii)(II) bolster this reasoning because neither includes a reference of “installation factors” or “installation costs” as a factor that Congress was concerned about as it relates to the unavailability provisions in EPCA. However,
subsections 6295(o)(2)(B)(i)9 and 6313(a)(6)(B)(ii)10 more appropriately capture a consideration of the installation costs and factors under the “economic impact” and the “initial charges for” the products on consumers.
In sum, the record fails to support Petitioners’ claim that condensing consumer furnaces and commercial water heaters are not “substantially the same” as their non-condensing counterparts. We have no reason to second-guess DOE’s view, “especially since it ‘rests on the agency’s evaluations
Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1320 (D.C. Cir. 1998)). We find that, although not identical, condensing consumer furnaces and commercial water heaters offer substantially the same performance characteristics and features as non-condensing options.
C. Economic Justification
We next determine whether DOE acted arbitrarily in concluding that the amended standards for consumer furnaces and commercial water heaters were economically justified. DOE must show that its amended efficiency standards in the Consumer Furnaces Rule are supported by substantial evidence—a burden common to actions we review under the Administrative Procedure Act.
. . . are ‘highly probable’ to be true. APGA v. DOE, 22 F.4th 1018, 1025 (D.C. Cir. 2022) (“APGA I”) (quoting Colorado v. New Mexico, 467 U.S. 310, 316 (1984)). Our review, even under the clear and convincing standard, is to determine whether it was reasonable for the agency to conclude that it met this standard. Id. at 1025–26 (citing Sea Island Broad. Corp. of S.C. v. FCC, 627 F.2d 240, 244 (D.C. Cir. 1980)).
1. Random Assignment/Monte Carlo Analysis
Petitioners take issue with the widely used random assignment test (also known as Monte Carlo analysis) that DOE utilized as part of the economic analysis for the amended efficiency standards for both the Consumer Furnace Final Rule and the Commercial Water Heater Final Rule. Petitioners argue that DOE relied on an assumption that consumers make appliance purchases randomly without weighing economic benefits, and that DOE failed to give a reasoned explanation for doing so.
The random assignment test or Monte Carlo analysis is used across industries ranging from physical sciences to high finance. Lyondell Chem. Co. v. Occidental Chem. Corp., 608 F.3d 284, 293 (5th Cir. 2010). It was first used a little under a century ago by physicists conducting nuclear weapons research. Id.; see also AT&T Svs., Inc. v. FCC, 21 F.4th 841, 847 (D.C. Cir. 2021) (noting that Monte Carlo analysis was “[d]eveloped by scientists working on the Manhattan Project”). This methodology is “particularly useful when reaching an exact numerical result is impossible
F.4th at 847. This type of analysis “can provide a ‘more complete view of potential outcomes and their associated likelihoods.’” Id. (quoting FED. JUDICIAL CTR. & NAT’L RSCH. COUNCIL, REFERENCE MANUAL ON SCI. EVIDENCE 469 (3d ed. 2011)). The Environmental Protection Agency has explained that Monte Carlo analysis can be a “viable statistical tool[] for analyzing variability and uncertainty in risk assessments.” Lyondell Chem. Co., 608 F.3d at 293 (quotation omitted) (citing EPA, GUIDING PRINCIPLES FOR MONTE CARLO ANALYSIS, EPA/630/R-97/001, at 1 (1997)).
The random assignment test is not new to either AGA or DOE. This Court recently considered the issue of whether DOE arbitrarily conducted its life-cycle cost (“LCC”) analysis when it randomly assigned commercial packaged boilers to buildings without weighing the kind of building the boiler was being assigned to. APGA I, 22 F.4th at 1027. When DOE conducted its no-new-standards case analysis, it assumed that “the distribution of efficiencies among shipped boilers [was] the same as the distribution of efficiencies across the models listed in the [Air-Conditioning, Heating, and Refrigeration Institute (“AHRI”)] data base.” Id. APGA and other petitioners contended that DOE “failed to recognize that a purchaser of commercial packaged boilers would rationally consider the costs and benefits of its investment and is likely to buy the boiler that produces the best economic performance for its building.” Id.
Instead of explaining its analysis, DOE “rather dismissively” explained that it did not have the data that would be necessary to run an alternative analysis to the one it conducted. Id. Additionally, DOE listed possible market failures that its LCC analysis addressed, but did not provide evidence to show that the market failures it listed affected the market for commercial packaged boilers. Id. We remanded
the case back to DOE, without vacatur, and ordered DOE to provide a “more complete response” since the “assignment of efficiencies to the buildings in the sample was a crucial part of the analysis supporting the DOE’s conclusion that a more stringent [energy efficiency] standard was warranted.” Id. We held that DOE’s response that it “essentially . . . did the best it could with the data it had” was “not enough to justify [an] assum[ption that] a purchaser’s decisions w[ould] not align with its econоmic interests in purchasing a boiler.” Id. Therefore, we could not conclude that DOE’s amended efficiency standards were supported by clear and convincing evidence under
This Court did not discredit, nor decide, that the random assignment test should not have been used in DOE’s LCC analysis in APGA I. Instead, we merely ordered DOE to go back and provide more reasoned explanations for its analysis and respond to the petitioners’ concerns. The case before us is unlike what we considered in APGA I. DOE’s LCC here was “the sum of the purchase price of a piece of equipment (including its installation and sales tax) and the operating expense (including energy, maintenance, and repair expenditures) discounted over the lifetime of the equipment.” Commercial Water Heaters Rule, 88 Fed. Reg. at 69704; Consumer Furnaces Rule, 88 Fed Reg. at 87528 (same). To calculate the LLC, DOE needed a “variety of inputs, such as product
DOE used real-world historical data for its inputs which included the highest quality summary statistics submitted by interested persons as well as data submitted by individual
households. Consumer Furnaces Rule, 88 Fed. Reg. at 87555. The data used correlated inputs to “individual building characteristics” such as “heating load, building shell indices, installation costs, and no-new-standards case efficiency probability.” Id.; see also Commercial Water Heaters Rule, 88 Fed. Reg. at 69731 (explaining that in relation to commercial water heaters DOE’s analysis captured the average hot water loads on equipment, but did not necessarily capture extremes). “DOE develop[ed] probabilities for as many inputs to the LCC analysis as possible, to reflect the distribution of impacts as comprehensively as possible.” Consumer Furnaces Rule, 88 Fed. Reg. at 87555; see also Commercial Water Heaters Rule, 88 Fed. Reg. at 69731 (same). It also developed sensitivity scenarios “to specifically address the potential uncertainty in some key input parameters.” Consumer Furnaces Rule, 88 Fed. Reg. at 87555. Contrary to Petitioners’ argument, DOE included “an increasing penetration of condensing furnaces” into its analysis based on the trend that consumers are progressively purchasing condensing furnaсes and water heaters even without new standards. Consumer Furnaces Rule, 88 Fed. Reg. at 87556; Pet’rs’ Br. 75–77. DOE then responded to comments from interested persons and provided “additional sensitivity scenarios to demonstrate that its conclusions of economic justification [were] robust.” Consumer Furnaces Rule, 88 Fed. Reg. at 87555.11
Petitioners’ argument—that DOE did not provide a reasoned explanation for assuming that consumers sometimes
do not act in their best economic interest—is not supported by the record before us. The dissent seems to take this even farther by contending that DOE “assumed consumers never consider costs when choosing between gas-fired appliances.” Dissenting Op. 15 (emphasis in original). But this is once again simply not true. See e.g., Consumer Furnaces Rule, 88 Fed. at 87584 (“DOE [did] not mak[e] an assumption that consumers never consider the economics of their purchasing decision.”).
Although DOE’s burden for the Commercial Water Heaters Final Rule was a high one—clear and convincing evidence—there is substantial evidence in the record to show that they met the mark. In order “[t]o accurately estimate the share of consumers that would be affected by a potential energy conservation standard,” DOE analyzed the LCC of commercial water heaters “under the no-new standards case (i.e., the case without amended or new energy conservation standards).” Commercial Water Heaters Rule, 88 Fed. Reg. at 69757.
“DOE developed the no-new-standards distribution of equipment using data from DOE’s Compliance Certification database and data submitted by AHRI regarding condensing versus non-condensing equipment.” Id. DOE then assigned a commercial water heater to each building it
Specifically, regarding Petitioners’ concern that DOE used data which suggests that consumers do not act in their best economic interest—DOE explained that disregarding that data “would not be representative of the [commercial water heater] market. Commercial Water Heaters Rule, 88 Fed. Reg. at 69760. DOE “took into account all of the available data
concerning the market implementation of condensing natural gas-fired [commercial water heater] equipment.” Id. at 69757. From this data, DOE projected commercial water heater shipments by efficiency level over the analysis period. Id. “[B]ased on the presence of well-understood market failures and a corresponding lack of data showing a correlation between [commercial water heater] efficiency and building hot water load,” DOE concluded that “a random assignment of efficiencies best accounts for consumer behavior in the” commercial water heater market. Id. at 69758. DOE explained that it “is aware of multiple market failures that prevent [] purely economic decision making[,]” and random assignment “reflect[s] the full range of consumer behaviors, including those consumers who make purely economic decisions.” Id. Therefore, the dissent’s argument that the random assignment test never accounts for costs is simply not supported by the record and misunderstands the inputs to the analysis.
Even for large economic purchases, like the purchase of a commercial water heater, DOE “acknowledge[d] that economic factors play a role” but that an analysis “based solely on economic measures . . . most likely would not fully and accurately reflect actual real-world installations.” Id. DOE reasoned that consumers make decisions based on factors like the timing of the purchase, competing demands for the funds, loss aversion, sensitivity to information salience, and other forms of bounded rationality. Id. (citing Richard H. Thaler & Shlomo Bernartzi, Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving, 112 J. OF POL. ECON. S164, S164–S187 (2004) (Nobel laureate Richard H. Thaler’s work on behavioral economics)). These factors are amplified when the decisions involved are complex and infrequent—like
purchasing water heaters for commercial buildings. Id. at 69758–60.12
We also find that DOE’s explanation regarding why consumers may not always act in their best economic interest when purchasing consumer furnaces was also reasonably explained and supported by substantial evidence in the record. First, DOE explained that Petitioners’ contention is a “significant[] mischaracteriz[ation]” of DOE’s analysis. Consumer Furnaces Rule, 88 Fed. Reg. at 87580. DOE similarly analyzed the LCC of consumer furnaces under the “no-new-standards case.” Id.. at 87574–80. DOE “estimate[d] not only the expected market share of products at varying efficiencies, but also estimate[d] how such products will be used.” Id. at 87574. DOE used a base case that “reflect[ed] three analytical steps: (1) an estimate of the buildings likely to use furnaces, (2) an
effectiveness[.]” Id. at 87576. In other words, the random assignment method accounts for the fact that consumers do sometimes base decisions on cost-effectiveness. DOE considered available data to determine whether any modifications needed to be made. Id. at 87574–75. This data included historical information about shipments of condensing and non-condensing furnaces in various regions around the country, and accounted for the fact that consumers are already purchasing furnaces at higher efficiency levels. Id. at 87575.
Petitioners contend that DOE “assum[ed] rationality is not the typical behavior” for consumers, Pet’rs’ Br. 74 (emphasis omitted), but the record shows that DOE once again acknowledged that economic factors “play a role” when consumers purchase furnaces, but that an economic analysis “based solely” on life-cycle costs or payback periods “would not fully and accurately reflect actual real-world installations.” Consumer Furnaces Rule, 88 Fed. Reg. at 87576. Instead, DOE took market failures into account because it could not “assume that all purchasers of furnaces make economically rational or irrational decisions one-hundred percent of the time.” Id. For example, DOE responded that Petitioners’ approach “depends on the assumption . . . that homeowners [always] know . . . the efficiency of their homes’ insulation and windows, such that they always make heating investments accordingly.” Id. at 87580. DOE explained that that assumption would not be realistic and is “unsupported by the available evidence.” Id. at 87576. Therefore, the random assignment “methodology is not an assertion of еconomic irrationality, but instead, it is a methodological approximation of complex consumer behavior.” Id. at 87580.
Petitioners also contend that DOE assumed that “new homebuilders routinely act against their own economic interest” and that consumers do not purchase furnaces
depending on the type of climate they are in. Pet’rs’ Br. 78, 82–83. Both contentions are contradicted by the record before us. DOE’s analysis did “incorporate and reflect regional market share data.” Consumer Furnaces Rule, 88 Fed. Reg. at 87581. DOE explained that “[f]or States with a large majority of consumers already purchasing more-efficient furnaces[,] . . . the analysis assign[ed] a correspondingly large majority of households with an efficient furnace at or above the adopted efficiency level in the no-new-standards case.” Id. For example, states with colder weather have a higher market share of condensing furnaces because they are more efficient, and therefore less costly to run. Further, DOE’s analysis also included “a greater probability that new construction is assigned higher-efficiency furnaces in the no-new-standards case, given the typically lower installation costs in new construction.” Id.
The dissent responds with two contentions: (1) DOE provided no explanation on why its model reflected that, in some
devoid of data, DOE used the entirety of the data at its disposal to conduct its analysis. Further, to respond to commenters who argued that DOE’s analysis produced an illogical outcome, DOE reiterated that the analysis “simply reflect[ed] the reality of the current market.” Id. And even so, DOE explained that this outcome was “limited to only a few percent [of cases predominately] in new construction.” Id. Further, “[e]ven if DOE were to exclude these . . . outcomes as extreme outlier results, the LCC analysis would [still] demonstrate economic justification[.]” Id.
Another reason the present case is unlike the random assignment analysis conducted by DOE in APGA I is that DOE considered all the scientific literature relevant to its LCC analysis, and all data submitted in the course of the rulemaking for both the Consumer Furnaces Final Rule and the Commercial Water Heaters Final Rule. Id. at 87580; Commercial Water Heaters Rule, 88 Fed. Reg at 69758–59. DOE cited the availаble literature it was aware of, and repeatedly requested more data from interested persons. Consumer Furnaces Rule, 88 Fed. Reg. at 87580–81. Despite Petitioners’ disagreement, they provided DOE with no alternative “specific external data, information, or studies that could be incorporated into [DOE’s] analysis.” Id. at 87581; see also Consumer Water Heaters Rule, 88 Fed. Reg. at 69699. Further, regarding installation costs, DOE responded to comments by interested persons by “enhanc[ing]” its estimates “a number of times” to address the comments. Consumer Furnaces Rule, 88 Fed. Reg. at 87555.
Overall, we find that DOE’s economic justification analysis and conclusions were robust. The economic justification analysis independently and sufficiently supported DOE’s conclusion that the amended efficiency standards were economically justified, and we need not address the impacts of
fuel switching in DOE’s analysis. This is so for two main reasons: (1) “[t]he amended standards plainly do not compel fuel switching” since the Final Rules do “not ban gas” appliances; and (2) DOE concluded that even if the impacts of fuel switching were not included in its economic justification analysis, the amended standards would still be economically justified. Id. at 87590, 87595; Commercial Water Heaters Rule, 88 Fed. Reg. at 69771–72.
D. Consumer Furnaces Rule Comment Period
Lastly, Petitioners contend that DOE did not provide a meaningful opportunity for stakeholders to comment on the Consumer Furnaces Rule, and therefore the Rule is procedurally flawed.
On July 7, 2022, DOE published a NOPR and request for comment on the
accompanying the NOPR, it “inadvertently” used a version of the LCC spreadsheet that showed a slight variation of what was included in the published NOPR and an accompanying Technical Support Document (“TSD”), although the results shown in the spreadsheet were similar to those included in the NOPR and TSD. Energy Conservation Standards for Consumer Furnaces, 87 Fed. Reg. 52861, 52862 (Aug. 30, 2022).
After interested parties, including Petitioners, alerted DOE that the spreadsheet varied from the table results included in the NOPR and TSD, DOE issued a Notification of Data Availability (“NODA”) in which DOE published a revised version of the LCC spreadsheet that was static and supported the NOPR. DOE also extended the NOPR comment period an extra thirty-days to October 6, 2022, and announced that it would hold—at Petitioners’ request—a public meeting webinar workshop where it would “provide instruction on the operation of the LCC spreadsheet.” Id. In total, DOE provided interested pаrties ninety-days to comment on the Consumer Furnaces Rule.
Nonetheless, Petitioners contend that the ninety-days was a “break-neck” comment period. Pet’rs’ Br. 104. We cannot agree.
in DOE regulations at the time.13 Pet’rs’ Br. 102; see
Moreover, because the static spreadsheet DOE provided the public on August 30, 2022, did not amount to “critical factual material,” it was not necessary to extend the comment period past the thirty-days it already provided. See Chamber of Com. v. SEC, 443 F.3d 890, 900 (D.C. Cir. 2006) (“[F]urther notice and comment are not required when additional fact gathering merely supplements information in the rulemaking record by checking or confirming prior assessments without changing methodology, [or] by confirming or corroborating data in the rulemaking record.” (citations omitted)). This is
random number generation, where the sequence of random numbers was expected to change, but “[t]he relative comparison of the various proposed energy conservation standard levels in the published LCC spreadsheet remain[ed] similar to the comparison presented in the NOPR.” Energy Conservation Standards for Consumer Furnaces, 87 Fed. Reg. at 52862. Therefore, DOE’s “conclusions of the analysis, the policy decision, and associated rationale [we]re not impacted by [the] sampling variability” in the two different LCC spreadsheets. Id.
III.
Because each of Petitioners’ arguments fail for the reasons explained, the petitions are denied.
So ordered.