Energy efficiency rules being developed to meet President Obama’s climate goals would make home heating more expensive for many low-income families, a prominent natural gas group told the administration on Monday.
“We believe the actual number of households likely to be harmed is far greater” than what the Energy Department has estimated, said Dr. Kathryn Clay, vice president of policy for the American Gas Association, at a face-to-face meeting between home heating experts and the Department of Energy.
The public meeting was the first scheduled to vet the agency’s latest supplemental rulemaking for improving the efficiency of natural gas furnaces to lower home-heating costs, but also greenhouse gas emissions and other pollution.
The regulations have been nearly two years in the making after manufacturers and others protested an initial proposal issued in early 2015. They argued the original rule would drive up the rate of efficiency in new heating furnaces too far and too quickly, which would place new economic burdens on some consumers.
The American Gas Association, which has been vocal in opposing the agency’s methodology for modeling the rule’s impacts, argues that the steep installation costs of the new furnaces would put them out of reach for most low-income families and renters. The recent supplemental rule, issued last month, was expected to resolve the issues raised by stakeholders. But judging from Clay’s comments, although some progress has been made, the major fears about consumer impacts still remain.
The trade association pointed out that the Energy Department estimates that the new home-heating regulations would cause economic harm to one in six low-income families in the Southern states. The trade group thinks the impacts will be far more extensive. And even with the agency’s improvements, “one out of every six low income households in the Southern United States [is] a level AGA deems unacceptable.”
“Many homeowners living in apartments, town homes, and row-houses will face structural barriers to installing condensing furnaces that will force them into options that will be economically burdensome, and less energy efficient overall, in the longer term,” Clay said.
An in-depth analysis of the Energy Department’s methodology, performed by the Gas Technology Institute and supported by the American Gas Association, “exposed fundamental flaws” in the agency’s modeling of consumer choice, which placed “random decision making in place of rational economic choices.” This distorted the effects of the furnace rule on consumer behavior.
The gas utilities see the rule driving consumers away from higher efficiency models and toward devices like heat pumps that are cheaper to purchase in the short term, but will cost them more because of their higher rates of energy consumption over the long term.
Clay said some of the changes in the new supplemental rule are a significant step forward in developing an effective regulation, but the negative effects on low-income consumers are still too high to be be acceptable.
