EPA Settlement: The Gray Areas of Compliance

September 4, 2019 / by Ted Atwood

Ted Atwood

Most activity in the news lately about state and federal legislation fighting climate change through refrigeration management has focused heavily on refrigerant phase-outs and carbon credits. So it caught our attention this week when the US entered into a settlement with Southeastern Grocers Inc., alleging they had violated the Clean Air Act by failing to promptly repair refrigerant leaks, and to keep adequate service records about their refrigeration equipment maintenance and compliance records. 

We strongly agree that addressing leaks and keeping solid records are critical not only to maintaining compliance, but to reducing the release of greenhouse gasses, and protecting your  company’s bottom line. The trouble is, the EPA’s settlement requirements are filled with gray areas that make adhering to them complicated.

Why were they there to begin with?

The settlement is the fourth in a series of national grocery store refrigerant cases filed, including those filed against Safeway Inc., Costco Wholesale Corp., and Trader Joe’s Co. So you could easily say they are currently profiling grocery stores. And our experience tells us that to supplement gaps, they work with whistle-blowers who have historically been the greatest source of insight.

Let's talk about leak rates

As part of their settlement, SEG is implementing a refrigerant compliance management system to help them reach the stated goals. The challenge ahead is steep. Especially given that the ultimate goal is to maintain an annual corporate-wide average leak rate of 17% through 2022. This is lower than the EPA’s requirements for leak identification and repair, currently 20%. 

Also, they specifically said “achieve and maintain through 2022.” This is only 3 years not only to maintain the goal leak rate, but to reduce their leaks in the first place. They would need to be at 17% pretty quickly. Considering that the grocery store sector currently averages 25%, that would be almost a miracle.

How do you calculate a leak rate?

The EPA’s National Refrigerant Management Program, Section 608, calls out two methods for calculating your refrigerant leak rate. Section 608 requires consistency, that “the same method must be used for all appliances subject to the leak repair requirements located at an operating facility" (40 CFR Part 82 Subpart F). You need to choose one for your reporting:

#1: Annualizing Method

This method is “future-oriented” and “considers the amount of time since the last refrigerant addition and then scales that up to provide a leak rate that projects the amount lost over a whole year if not fixed” (81 FR 82272).


Leak Rate - Annualizing

#2: Rolling Average Method

This is a retrospective approach to refrigerant leak rates and “accounts for all refrigerant additions over the past 365 days or since the last successful follow-up verification test showing that all identified leaks were successfully repaired (if less than 365 days)" (81 FR 82272).


Leak Rate - Rolling Average


So what is a corporate-wide average leak rate?

That’s a good question. There has never been a standard on how to calculate the corporate-wide average leak rate until the release of this consent decree, which now makes 4 ways the EPA calculates leak rates. Gray areas like this leave the door wide open to a multitude of interpretations. Some people will take the leak rates on all assets and average them out. Some take the average of the rates per store, and others per appliance or per occurrence. And the settlement plan indicates they will implement a bi-monthly leak monitoring program. Do they mean twice a month? Or once every other month? 

In addition, in our experience we’ve seen people over-report and under-report leak rates because of their overall lack of detailed records for their systems. Many companies are not identifying systems that are at the end of life or beginning of life stages, or keeping accurate records of equipment they’ve taken out of service and replaced with new equipment. 


Don't get stuck in the gray area

EPA Section 608 made a significant impact on leak rate management. For one, it significantly lowered leak repair requirements:

  • Comfort - 15% to 10%
  • Commercial Refrigeration - 35% to 20%
  • Industrial Process Refrigeration - 35% to 30%

It also established a 30-day repair timeline, new and more detailed record keeping requirements, and new reporting requirements. And those requirements are still evolving. The EPA has a new proposed rule under review with a strong focus on the elimination of paper, going fully digital with record keeping. And as you well know, the states are also busy with their proposed requirements.

Caught in the runaround

I’ve certainly played my fair share of the guessing game. Was my leak rate too high? Did they fix the leak? When will they be back? Didn’t they promise to fix it by Monday? (and It's Friday). Is the part they ordered in yet? Will the unit run today (it’s 95F) or will the tenant call? What if an investigation took place or if a client (tenant) asked for records? What would I do? 

It feels like I’ve been playing cat and mouse with records since I started in the HVAC/R and refrigerant maintenance world. When times were slower, I’d chase my contractor around asking “Do you have the records?” Since all the records were invoices, I was basically begging the vendor to invoice me quickly in order to get records assembled. But then the payment cycle would slow down things for them. The service people were in no rush to invoice because they were calibrating their speed based on our payment process. Things started to get harder around 2009 when the regulations started to change and evolve and my responsibilities went from smaller accounts to larger, spread out clients with massive footprints in multiple states. Now instead of chasing 2 or 3 vendors, I was chasing hundreds of vendors. Each one submitted paperwork differently and I had to make sure documents were adequate for each jurisdiction. It’s a complicated patchwork or requirements, resources and knowledge. This process needed to change and that's when Trakref came into existence.

Where should a do-it-yourselfer start?

Where we started:

We started with tracking materials and assets, then wove together rules and guidance from the various regulatory jurisdictions. Back in the 2009 era we had five spreadsheets for each property: HVAC/R Assets, Locations List, Technicians Servicing the Sites, Federal Regulations (for AC & Refrigeration), and lastly State Regulations.

At that time we had more than 300 reporting sites, and we had a separate spreadsheet with 5 tabs for each site - one tab to represent each of the various maintenance needs for each building. Then as we collected each invoice we would extract the details we needed (which varied by equipment and location) and then put that data into the spreadsheet. Then we had binders in each location that we updated quarterly, and with a critical data summary in the front.   

The invoices in 2009 were incomplete. They lacked details like leak location or serial/model number, and in many cases we didn't even have the tech name or their credentials. 

What you will need to do:

List all Assets

  • How many pounds of refrigerant are you managing?
  • What types of refrigerants are at each site, and where are they located? 
  • How many systems do you have?
  • When where they serviced, how often and by whom?

Record Maintenance Activity

You will need to know who did it, what did they do, when did they do this, which piece of equipment, why they were there, and what the results were.

Know Your Leak Rate

Sounds easy, determine your actual leak rate and then set a goal leak rate so you have a clear way of communicating with your service provider. If you are like the rest of the US (although you’re likely higher), then it's probably closer to  25%. If you are running a commercial building with some data and people cooling needs, your limit is supposed to be 10%. If you keep food cold, then it’s 20%.


Stay up to date on changes to regulations and keep your staff trained and certified. Keep the knowledge base consistent “corporate wide” by designating and training refrigerant compliance manager/trainers representing different regions and divisions of your company. Using a “Train the Trainer” model, you would be building an internal network of experts with a strong foundation of corporate knowledge they can bring back to their locations. If you build that management team well, they will help you maintain consistency in your record-keeping and compliance across your company.

Ditch the paperwork

Paper records, invoices and asset registries are not your record. They are unreliable, inconsistent, and create extra steps in an already complex process. If an investigator wants to review your refrigeration maintenance and management activity, they need to see the complete narrative. And it all needs to be done through the EPA 608 digital export. Having a detailed digital documentation process that tracks service and repair records completely and consistently across your business will strengthen your ability to transfer information to the regulators how they need to see it. 

The bare minimum isn’t enough

All of this being said, tightly running your business around the regulations undermines a successful HVAC/R maintenance program. New changes are coming to the HVAC/R space, and they will be focused on safety and health, not just emissions controls. And when that happens, if you built a culture around just checking a box, you’re going to fall short. Of course integrate compliance benchmarks into your normal maintenance plan, but also make sure you know your systems. If you are regularly collecting and recording this type of information, the gray area gets smaller. Having robust records allows you to be more nimble when the compliance standards shift. 

So why were they fined?

In their press release, the EPA specified it was for violating the Clean Air Act by “failing to promptly repair leaks of class I and class II refrigerants, ozone-depleting substances used as coolants in refrigerators. SEG also failed to keep adequate servicing records of its refrigeration equipment and failed to provide information about its compliance record.” 

As stated earlier, when a leak is detected, the EPA requires that it be repaired in 30 days. And you need to be sure that the records you keep are easy to load into the EPA 608 digital export.

What was the cost?

In their press release, the EPA specified it was for violating the Clean Air Act by “failing to promptly repair leaks of class I and class II refrigerants, ozone-depleting substances used as coolants in refrigerators. SEG also failed to keep adequate servicing records of its refrigeration equipment and failed to provide information about its compliance record.” 

As stated earlier, when a leak is detected, the EPA requires that it be repaired in 30 days. And you need to be sure that the records you keep are easy to load into the EPA 608 digital export. 

Trakref® can help

I’d rather not fall down the rabbit hole to the Paperwork Wonderland, ever again. Unfortunately, not every player in this maintenance process plays by those rules. We built trakref® because we don’t like gray areas. We are experts on HVAC/R and refrigerant system management and compliance, and we work hard to stay on top of what regulations the EPA and the states have in the works. Our powerful software tools are built around the compliance requirements and they give you visibility into your activity so you can manage your HVAC/R systems in order to reduce leaks, meet compliance and sustainability goals, and improve performance. Tools like our mobile app Trakref V3 streamline the process so you can keep up with all the details. And we provide you and your team with guidance on all of your record keeping and reporting needs. Have questions?

Start a live chat below, or call us at (615) 834-0233.


Topics: HVAC/R, Compliance Reporting, HVAC/R Software, Refrigerant Compliance, Refrigerant Management, compliance, Regulation, legislation

Ted Atwood

Written by Ted Atwood

Ted is the President & CEO of Trakref, a cloud-based HVAC/R and refrigerant management software company that provides unprecedented solutions for commercial properties. He has spent more than 20 years in the HVAC/R industry, even owning and operating one of the nation’s largest refrigerant reclaim and recycling companies.