Planned Impact on the HVAC/R Industry
The USA is like a great big franchise. The states are the franchisees and the Federal Government is the franchisor. In return for their participation, the states (aka Franchisees) get to pick and choose from a menu of services. Some states take The Franchise exactly as it is, and some tweak things to accommodate their citizenry.
The US EPA (aka Franchisor) recently began to relax the requirements for the Franchisees. So many of them have begun to set their own policies in place. Specific legislation is in place in six states, and more than 30 states have some type of regulatory action that affects every HVAC/R owner, installer & servicer in the US.
The struggle between state or federal strength has been waged since the founding of the country (see the play “Hamilton”). As a matter of fact the Supremacy Clause is the cornerstone of the whole American political structure. The “doctrine of preemption” originates from the Supremacy Clause of Article 6 of the U.S. Constitution. This Doctrine states that any federal law, even if it is only a regulation from a federal agency, supersedes any conflicting state law, even if that law is part of the state's constitution. In essence, it is a conflict-of-laws rule specifying that certain federal acts take priority over any state acts that conflict with federal law.
Basically the Supremacy Clause says that "Every State shall abide by the determination of the United States in Congress Assembled, on all questions which by this confederation are submitted to them." The Federal Government is the priority, in all matters. No matter what the Federal Government or the states might wish to do, they have to stay within the boundaries of the Constitution. This makes the Supremacy Clause the cornerstone of the whole American political structure.
But in cases where the Federal Government (the Franchisor) has chosen to not participate or not set guidelines, then the States (Franchisees) are allowed to work within their constitutional boundaries to set regulations that affect their jurisdiction.
So how big is the State Regulation issue? During 2019, 40 states passed 147 legislative actions (yes passed) that affect energy efficiency and specifically 21 of these states have passed 39 bills related directly to climate Change and or Carbon Reduction. Here are some examples:
Their law authorizes municipalities to establish climate change and coastal resiliency, and reserve funds that can be used to fund payments for property losses and land acquisitions due to climate change.
They recently passed 5 pieces of legislation. One of them states:
“...the reduction of greenhouse gas pollution, establishes statewide greenhouse gas pollution reduction goals, defines greenhouse gas pollution as the total net statewide anthropogenic emissions of carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, nitrogen trifluoride, and sulfur hexafluoride, expressed as carbon dioxide equivalent, makes an appropriation.”
Vermont, Washington, Maine & New York
All have either approved or are approving regulations that will impact climate change, emissions reduction, and in summary all relate to the regulation of hydrofluorocarbons (aka refrigerants). Keep your eye on Oregon.
They’ve been a leader in this space more so because they have the infrastructure to support a well-developed policy team than for any other reason. Developing policies is a costly and time consuming process, and California has stepped up and is now the presumptive center of climate policy development for more than 50% of the population of the US.
Cooling and Heating
Cooling and heating equipment is essential to productivity, food quality and comfort and accounts for between 25-60% of energy consumption in commercial buildings (varies by building). State regulators understand this and so they are following a different path to advance the climate cause by enacting legislation that impact buildings and their energy use. Mechanical Code changes to pay attention to include:
- UL standards for cooling equipment
- Updates to ASHRAE * AHRI guidelines
- International Building Code
- Occupancy Classification
- IMC Design Protocols for outdoor and indoor applications
- Ventilation, building penetration, valve and component labeling
- IFC codes related to regulatory thresholds for group A1 refrigerants, (30 Lbs of any other group) including issues like:
- §606.4 Refrigerant change
- IMC §606.6 Testing and record-keeping
- Operational permits §105.6.40
Regulations are evolving at all levels and their impact is felt far and wide. Ignoring the changes at the state level places your company or building at risk of being in violation. In some cases states are essentially deputizing building inspectors and regional code officers to be compliance investigators. Regulations once were centered around the types of refrigerant we bought, but now they impact maintenance, end-of-life, installations and even the quantity allowed to be stored in an area.
There is a price for all of this, but it might surprise you to know that it is still less expensive to fix leaks, repair systems and switch to newer equipment. That all in turn reduces energy, reduces direct carbon and lowers your maintenance cost. Studies show that there is a 1:1 correlation between energy consumption and leak rates; the higher the leak, the higher your energy bill. Climate legislation and action is moving rapidly at the state level, and whether it is a direct act to limit refrigerant emissions or an indirect act to change mechanical codes, the marketplace is now more confusing that it was only 2 years ago. This makes your job harder since now you need to be a policy expert and have time to monitor policy actions and changes to the policies as they maneuver both houses of each state’s legislature, and if you work in multiple states you have to pay attention to how each bill is different, then modify your work and activity to reflect the various nuances.
Reliable information is hard to come by, and in an industry with only 250,000 service people helping to maintain more than 100M pieces of equipment, it’s difficult to find the time to keep track of the changes. At trakref® we sell software that acts as a rules engine. We have a team to monitor policy changes. Then we embed the needs of the various policies into each service event so it’s more like a questionnaire than a “gotcha”. And we make adjustments by zip code so you are working off a more customized and tailored checklist that updates as regulations update, and is specific to your needs. We know the complexities of getting this right, and we help hundreds of callers monthly of all education and skill levels to achieve compliance, reduce leaks and achieve improvements in performance.
Refrigerant management was listed as the #1 way to solve climate change. The statement climate change can be polarizing depending on how people feel about the topic. But regardless of your politics, we are here to help you navigate the patchwork of regulations and achieve compliance success in as few steps as possible.