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Federal Register / Vol. 86, No. 164 / Friday, August 27, 2021 / Proposed Rules these arguments presented by the Gas Industry Petitioners, which were largely based upon anecdotal accounts and limited installer survey data. After reexamining the record, DOE has preliminarily determined that the qualitative arguments made by the Gas Industry Petitioners were not accompanied by sufficient evidence to establish the existence or magnitude of the alleged problem, as would support the significant change from DOEs historic interpretation to the interpretation contained in the January 2021 final interpretive rule.
As noted previously, upon reconsideration, DOE has tentatively concluded that consumers have other options for resolving difficult installation situationsthe situations that provided two of the three reasons for the January 15, 2021 final interpretive rulewithout the need for the Department to declare noncondensing technology and associated venting to be a performance-related feature under EPCA. This provides a further basis for DOEs proposed return to its historic interpretation. In short, consumers facing difficult installation situations can either: 1 Utilize a technological solution to resolve their installation problem, or 2 switch to an appliance utilizing alternative technologies. Either approach would allow those consumers with potentially difficult installation situations to choose how best to avoid loss of usable space, extensive building modifications, or extreme installation costs identified in the January 15, 2021 final interpretive rule.
The first option is to use new technology to overcome identified installation problems. It has been DOEs historic position that there is a technological solution to accommodate virtually all of the difficult installation situations involving gas-fired appliances, although some might be costly e.g., requiring new venting.
Although a critical piece of the Gas Industry Petitioners argument in support of their petition was that it may be impossible to install a condensing appliance in certain replacement applications, they never provided any definitive proof as to the existence of this problem or its extent. In promulgating the January 15, 2021 final interpretive rule, DOE found these theories persuasive, but upon further examination, there is at best weak foundational support to challenge the Appliance Standards Programs record of evidence that it is technologically feasible to install condensing appliances in virtually all replacement applications. If the consumers affinity
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for gas-fueled appliances is sufficiently high to warrant their continued use, the consumer will choose to make such changes when installing the more efficient appliance, which reflects an economic decision.
Technological solutions should also resolve the specific issue of orphaned water heaters identified by the Gas Industry Petitioners. An orphaned water heater refers to the situation in which a non-condensing furnace and non-condensing water heater share a common vent, but, upon replacement of the non-condensing furnace with a condensing furnace, they can no longer share that same venting due to differences in venting requirements.
DOE has, in fact, identified a newer technology for which comprehensive data are currently unavailable, but when mature, it could address the issue of orphaned appliances, allow consumers to switch from a non-condensing furnace to a condensing furnace, and permit continued use of existing common venting in a greater variety of applications.7 86 FR 4776, 4781 Jan. 15, 2021. More specifically, this venting technology may allow a consumer to obtain the efficiency of a condensing furnace using the existing venting in a residence by sharing venting space with a water heater. It would significantly reduce the cost burden associated with installing condensing furnaces and reduce potential instances of orphaned water heaters. This technology could allow consumers to switch from a non-condensing furnace to a condensing furnace in a greater variety of applications, such as urban row houses. See 80 FR 13120, 13138
March 12, 2015. DOE is concerned that characterizing the method of venting as a feature due to concerns over orphaned water heaters would limit future advancements in this technology, because establishment of separate product or equipment classes for noncondensing appliances would limit the market for such innovative devices that allow condensing and non-condensing appliances to share the same venting.8
7 In the technical support documents accompanying the proposed rules for residential furnaces, DOE referenced a study from the Oak Ridge National Laboratory that identified various approaches to address the orphaned water heater problem without the need for expensive renovations. See Momen, A. M., J. Munk, K. Biswas, and P. Hughes, Condensing Furnace Venting Part 2:
Evaluation of Same-Chimney Vent Systems for Condensing Furnaces and Natural Draft Water Heaters 2015 Oak Ridge National Laboratory: Oak Ridge, TN. Report No. ORNL/TM2014/656
Available at: web.ornl.gov/sci/buildings/docs/
Condensing-Furnace-Venting-Part1-Report.pdf Last accessed May 6, 2021.
8 Although DOE argued in the January 15, 2021
final interpretive rule that establishment of separate
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Consequently, DOE has reconsidered and changed its view regarding the argument put forth in the January 2021
Final Interpretationthat replacement of a non-condensing furnace with a condensing unit may result in an orphaned water heater. 86 FR 4776, 4785 Jan. 15, 2021.
DOE would also clarify that the present case of non-condensing gas-fired residential furnaces and commercial water heaters is distinguishable from certain other products that the Department has regulated in the past, such as space-constrained central air conditioners and ventless and compact clothes dryers. DOE explained in two direct final rules that the latter products necessitated design differences related to their reduced size or ventless operation that inherently limited their energy efficiency, and the agency set separate classes on that basis. For ventless clothes dryers, DOE also found that certain consumers e.g., high-rise apartment dwellers might not be able to have a clothes dryer at all, unless a ventless option were available. See 76
FR 37408, 3743937440 June 27, 2011;
76 FR 22454, 22485 April 21, 2011. In contrast, there are insufficient data to show that consumers would be without furnace and water heater options in the absence of non-condensing furnaces and water heaters. Furthermore, the subject non-condensing furnaces and water heaters are not significantly different in overall footprint or size from their condensing counterparts although the composition of the venting used may be different, and the energy efficiency differences are a result of the technology used, a design parameter that is dictated by considerations other than size.
The second option for resolving difficult installation situations would be for the consumer to replace a gas-fired furnace or water heater with an electric heat pump or water heater, thereby product or equipment classes would not limit innovation or market trends toward condensing appliances see 86 FR 4776, 4805, the Department has come to question whether such view is correct, given the potential for a substantial portion of the relevant appliance market to remain at significantly lower levels of efficiency. Even if current trends toward condensing appliances hold, the market might stall before achieving the full energy-savings benefits that EPCA might capture through adoption of an appropriate energy conservation standards, a result contrary to the statutes goals. The same principle holds in the context of innovative ventsharing technologies, because in addressing difficult installations, the January 15, 2021 final interpretive rule essentially undermines a significant component of the market for such technological solutions. Rather than encourage a technological solution with a high energy-savings potential, the Department has come to see that the January 15, 2021 final interpretive rule inappropriately substituted maintenance of a status quo with lower energy-savings potential.

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