Blog

By Bill Sendelback

Dealing with any government agency can be challenging, but the recent, and questionable, actions of the U.S. Department of Energy (DOE) have been extremely frustrating for the Hearth, Patio & Barbecue Association (HPBA) in its struggle to save decorative gas fireplaces - and now gas logs.

In the latest maneuver by the DOE - a new proposed rule signed July 14, 2011 and published July 22 - the 9,000 Btu maximum input for decorative vented gas fireplaces was dropped, but those fireplaces must now be listed to Z21.50, advertising and rating plates must state "not for heating," thermostats are not allowed and standing continuous pilots are prohibited.

But the big "kicker" in the new proposal is that gas logs are subject to a similar set of requirements, something that was "completely out of the blue," according to HPBA president Jack Goldman. "There has never been any discussion about that," he said. "Despite what they did a little more than a year ago when they issued the final rule, saying in a very clear statement that gas logs were not included in the regulation, they are now doing a complete 180 and proposing to regulate them. There has been a series of surprises throughout this whole process, and this is just one of them."

"The major problem with the recent proposed rule is that the DOE is again trying to include decorative gas products - fireplaces and gas logs - in its definition of direct-heating equipment (DHE)," claims Allan Cagnoli, HPBA's director of Government Affairs. "If we accept the language of this new proposed rule, the DOE would then have complete authority to come back at any time and further regulate decorative gas products. Accepting this proposed rule would box the HPBA and our industry into something the DOE has no legal right to do."

Decorative vented gas fireplaces were included in the original DOE final rule published in April, 2010, which the HPBA has been challenging. That final rule was completely different than what the DOE had proposed in December, 2009, according to the HPBA. By not giving any advanced indication of its plan to include these decorative appliances, the DOE did not allow a public comment period, nor did the DOE publish its data supporting the regulation. That was illegal, according to the HPBA, and the association has challenged the DOE's action in court.

Since the end of May, 2010, the HPBA has been in discussions with the DOE, finally agreeing on "a lot of the substance but not on the implementation of the rule, a gap we could not bridge," says Goldman. "At the end of the process, this was not a negotiation. It was basically the DOE saying, This is it. Accept our terms or we'll see you in court. So we said, We cannot accept these terms. We'll see you in court."

The HPBA has now filed a schedule to present its arguments to the court. In response, the DOE filed an opposition and issued its latest proposed rule, stating that because of this new rule, the HPBA's case will be made "moot," (i.e., rendered pointless) in court. "This is an attempt by the DOE to terminate our right to present our arguments to the court," adds Cagnoli.

In its negotiations with the DOE, the HPBA had agreed to the Z21.50 listing, the "not for heating" designation and the elimination of thermostats and standing continuous pilots in return for the

DOE removing decorative gas products from being defined as DHE. But in the new proposed rule, the DOE reneged and is continuing to attempt to regulate decorative gas products by still listing them as DHE. "It is not that we're just trying to protect decorative gas products from all regulations, but rather that these are not heating products and don't belong in the DHE category," Cagnoli emphasizes. "The DOE has no statutory authority to regulate decorative gas products."

"If you turn the clock back to April, 2010, the DOE put provisions in the regulations on which they never gave the industry a chance to comment. That is illegal," emphasizes Goldman. "The DOE abridged our rights in the regulatory process. Our recourse was to go to court, which we have done. Now, at the 11th hour, they issue this new proposal and tell the court it doesn't have to issue a ruling on the wrong that was done to our industry in the first place. Again the DOE is denying us due process - this time in court - that we are entitled to. We are outraged."

As an example of the faulty data issued by the DOE in the new, proposed rule, it estimates that 90 percent of gas log sets already have intermittent pilot lights. The HPBA, after polling many of its members, estimates the actual number to be less than 10 percent.

Concerning the impact the rule will have on the hearth industry regarding lost employment and economic losses to HPBA members, "The DOE has never asked us. They really don't care," says Allan Cagnoli. "It's all about the gas. It is not about the jobs."

A hearing on the proposed rule is scheduled for September 1 in Washington, D.C., with the HPBA slated to testify on behalf of the industry. Comments on the new proposed rule can be submitted through September 20. The DOE has said it plans to have its new rule out by this November, "which in the regulatory world is 'warp speed,' in order to prevent the industry from having its day in court," says Goldman.

"The DOE is telling the court to put our initial case on hold pending the issuing of the final regulation, supposedly in November," Goldman explains. "We're telling the court we can't wait that long because the industry needs plenty of time to plan for whatever changes it may have to make. Clearly we are not going to get relief from the DOE. They have made that very plain. And we're not sure if we'll get relief from the courts either because, while we think we have a good case, you never know how the court will rule."

The HPBA is taking its campaign to congressional offices, particularly those serving on energy committees. "The offices on the Hill have had a very positive response to our presentation," says Cagnoli.

"This entire effort is very costly," he adds. HPBA is paying one-half of the total costs while the remaining one-half is being paid by HPBA member companies involved in the gas appliance industry, including component suppliers.

The results of HPBA's extensive and intensive efforts are still to be determined. The effective dates of the final version of the new proposed rule have not been finalized, however, it would make intermittent pilot lights required as of July 1, 2014. Other effective dates will be in the final version of the new proposed rule, according to Goldman.

"We believe in our case, both on the litigation side and on the legislative side," says Cagnoli, "but we can never be sure the courts will back us up," adds Goldman. "This 'Great Deal' offered by the DOE in the proposed rule is laced with poison," emphasizes Cagnoli. "If the DOE is successful, the new regulation may not affect decorative gas products this year, but it most certainly will down the road. It's not a question of 'if' but 'when.'"

The gas fireplace and gas log industries are hoping the HPBA triumphs in this effort against a government agency that apparently could not care less about what happens in the real world or how it plays the game.