Judge Hints at Unfreezing Energy Efficiency Standards

SAN FRANCISCO (CN) – The Trump administration’s indefinite freeze on energy-efficiency standards may be headed for a thaw, a federal judge signaled Thursday.

“There’s no contemplation here of the ability of the [Energy] Secretary to scrap a rule,” U.S. District Judge Vince Chhabria said during a summary judgment hearing on the stalled standards.

The Obama-era efficiency standards for large appliances and industrial equipment were to take effect after a 45-day review period that started in December 2016. The standards would apply to air-conditioners, air compressors, uninterruptable power supplies, walk-in coolers and freezers and commercial boilers.

By 2030, the new rules would conserve more energy than the U.S. produces in a year, save consumers and businesses an estimated $1.6 trillion, and cut 6.5 billion tons of carbon dioxide emissions, according to U.S. Department of Energy estimates.
Eleven states, New York City, and three conservation and consumer advocacy groups sued Energy Secretary Rick Perry in June last year, claiming the Energy Department unlawfully withheld publication of four final rules to block the new standards.

On Thursday, a Department of Justice attorney argued that the Energy Department has “broad discretion” to decide if and when it publishes final rules.

But the plaintiffs say the Code of Federal Regulations requires the Energy Department to publish final rules after they have gone through a 45-day error correction period.

Chhabria on Thursday appeared to side with the plaintiffs’ interpretation of the error correction rule.

“The whole point and whole thrust of this rule suggests this is not a process by which the department will reconsider the policy decisions it made in the rule,” Chhabria said.

But Department of Justice attorney Michelle Bennett cited Subsection G of the error correction rule (10 CFR 430.5), which states: “Until an energy conservation standard has been published in the Federal Register, the Secretary may correct such standard, consistent with the Administrative Procedure Act.”

Chhabria replied: “If Subsection G was not there, I don’t think you’d have a prayer.”

The plaintiffs cited another section of the code, which states that the energy secretary “will in due course submit the rule, as it was posted” for final publication if no errors are identified.

The Air-Conditioning, Heating and Refrigeration Institute (ACHRI), an industry trade group, intervened as a defendant, saying the error correction rule does not create a mandatory duty to publish final efficiency standards.

“The agency preserves multiple times discretion to correct and change those standards,” said ACHRI attorney Charles Rhodes IV, with Kirkland & Ellis in Washington, D.C. “The substance of the standards has to be able to change after the error correction process.”

Chhabria acknowledged that the error correction rule does not specify a deadline for publishing final standards. But he noted the code makes no mention of authorizing the secretary to scrap a rule that was advertised as final pending error correction.

Bennett argued that because the efficiency standard rules were not yet published, they are not ripe for judicial review. She said the Energy Department is still considering the proposed standards and has not yet made a decision.

After about 40 minutes of debate, Chhabria took the arguments under advisement.

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