Court Rules for Better Air Conditioner Standards: Consumers, Utilities, and the Environment Win

January 13, 2004

Media Contact(s):

Steven Nadel , 202-507-4011, Executive Director

WASHINGTON, D.C. — The U.S. Appeals Court for the Second Circuit, ruling today in the case of Natural Resources Defense Council v. Abraham, has directed the U.S. Department of Energy to reinstate the SEER 13 standard for central air conditioners. Originally set in 2001, the SEER 13 standard was withdrawn by the Bush Administration and later replaced with a SEER 12 standard. NRDC and 10 states sued t o reverse the administration's action. The American Council for an Energy-Efficient Economy (ACEEE), which had worked hard for the SEER 13 standard during the rulemaking, supports the court's decision.

"This important ruling will save consumers money, reduce the risk of blackouts, and cut emissions of air pollutants and greenhouse gases." said ACEEE Executive Director Steven Nadel. ACEEE analysis shows that American consumers will save 250 billion kilowatt hours and $21 billion in electricity bills through 2030. Over the same period, utilities will avoid building 20,000 MW of peak power capacity, saving billions of dollars in capital costs and reducing future electric rates. The energy saved will prevent the emission of over 50 million metric tons of carbon—the equivalent of taking 34 million cars off the road for one year.

The decision turned on the "no-rollback" provision of the National Appliance Energy Conservation Act (NAECA), under which the DOE rule was issued. The Court concluded that NAECA "unambiguously operates to constrain DOE's ability to amend efficiency standards once they are published as final rules in the Federal Register." The decision added that "It is inconceivable that Congress intended to allow such unfettered agency discretion to amend standards, given the appliance program's goal of steadily increasing the energy efficiency of covered products."

The SEER 13 rule takes on additional importance given events that have unfolded since its 2001 promulgation. In August 2003 the nation's largest power blackout affected millions of people; it was driven in part by peak air conditioning loads on the power grid. A SEER13 standard would keep 20,000 MW of peak power demand off the grid; thus, it would limit the risk of future blackouts.

The SEER 13 standard can also help address serious problems in the natural gas industry. With supplies tightly constrained, prices have risen to record levels and show no sign of returning to the low prices of the 1990s. ACEEE recently completed a study of the impact energy efficiency can have on natural gas prices, showing that as little as a 2% reduction in demand can cut wholesale gas prices by 20%. Much of the savings in the study came from reduced peak electricity use, because natural gas is heavily used for power generation, especially at peak times. The SEER 13 standard, by saving peak electricity use, would thus save substantial amounts of natural gas.

"The blackout and natural gas situations make strong air conditioner standards more important than ever." said Nadel. "We hope the Department of Energy will now turn its attention to turning out new efficiency standards, for residential heating systems and other important products."