DOE Steps Up Enforcement of Energy Efficiency Standards, Gives Appliance Manufacturers 30-Day Grace Period to File Reports
As part of its initiative to strengthen enforcement of energy efficiency standards, the U.S. Department of Energy (DOE) announced on December 9, 2009 that it will give manufacturers a 30-day grace period—ending on January 8, 2010—to file or update certifications of compliance with energy efficiency standards for appliances. After that date, DOE will begin more aggressively enforcing the certification requirements.
The certification requirements apply to manufacturers of a wide range of consumer appliances. The requirements apply to any manufacturer that sells these appliances in the United States, including foreign manufacturers. Failure to comply with these reporting requirements can result in injunctive relief—halting sale of the product—as well as fines and other penalties.
Companies subject to these certification requirements should immediately take action to assess the accuracy and completeness of their certification reports and compliance statements.
Under the Energy Policy and Conservation Act of 1975 (EPCA), the DOE is responsible for establishing and enforcing energy efficiency standards for certain consumer appliances. As part of its enforcement program, the DOE has issued regulations (10 C.F.R. 430) that require manufacturers to submit compliance statements and certification reports for covered appliances before introducing those appliances into commerce in the United States.
A “manufacturer” includes any person who manufactures, produces, assembles or imports a consumer product. The certification requirements for manufacturers also apply to private labelers. A “private labeler” is a company that sells consumer products under its own name but does not manufacture them. (In the remainder of this update, the term “manufacturer” is used to refer both to manufacturers and to private labelers.)
A covered product under 10 C.F.R. Part 430 includes any of the following items: central air conditioners; central air conditioning heat pumps; clothes washers; clothes dryers; direct heating equipment; dishwashers; faucets; furnaces; general service fluorescent lamps; incandescent reflector lamps; pool heaters; refrigerators, refrigerator-freezers and freezers; room air conditioners; showerheads; urinals; and water closets.
A “certification report” describes the product and provides information demonstrating that the product complies with the applicable energy efficiency standards. A “compliance statement” contains the manufacturer’s certification that the product complies with the applicable standards, that all testing has been performed in accordance with DOE procedures, and that all reported certification information is “true, accurate, and complete.”
Under these regulations, the manufacturer must “establish, maintain, and retain the records of the underlying test data” for all certification testing, and must ensure that the data is “organized and indexed in a fashion which makes them readily accessible for review by DOE.”
DOE has authority to enforce compliance with the certification requirements by bringing an injunctive action to halt sale of the product and by assessing civil penalties. A violation of the certification requirements can be found even when the product itself does not actually violate the DOE’s energy efficiency standards.
DOE’s Increased Emphasis on Compliance With Energy Efficiency Standards
As part of the new administration’s heightened focus on energy efficiency, DOE has initiated a major effort to strengthen its enforcement of energy efficiency standards. This past summer, DOE initiated investigations of alleged violations by manufacturers of air conditioners and freezers. Then, on October 13, DOE announced a series of initiatives to strengthen its enforcement program, including: forming an enforcement team in the general counsel’s office; establishing a program of random reviews of manufacturers’ compliance with energy efficiency standards; and issuing new guidance on DOE’s approach to enforcing the certification requirements.
The guidance, which was published in the Federal Register on October 14, stated that:
- "The Department hereby clarifies that a failure to certify covered products in accordance with the DOE’s rules is an independent violation of EPCA and DOE’s implementing regulations that may be subject to enforcement action."
- "The Department need not test an improperly certified product or otherwise determine its non-compliance with the applicable standard before seeking an injunction or assessing civil penalties [for non-compliance with the certification requirements]".
- "Today, the Department also announces its intent to exercise its enforcement authority more rigorously in the future. In order for DOE’s efficiency standards to effectively promote the development and distribution of energy efficient products . . . DOE must ensure that those standards are aggressively and consistently enforced."
- "Pursuant to its existing enforcement authority, the Department intends . . . to hold manufacturers accountable for any failure to certify covered products in accordance with DOE rules."
The 30-Day Grace Period
On December 9, the DOE published a notice in the Federal Register announcing a “one-time grace period” – ending on January 8, 2010 – for manufacturers to come into compliance with the certification requirements for consumer appliances under 10 C.F.R. Part 430.
During this 30-day grace period, manufacturers of consumer appliances may (1) submit corrections to any previously filed certification reports and compliance statements, and (2) submit certification reports and compliance statements if they have not previously done so.
Manufacturers who submit the updated or new reports by January 8 (and do so in accordance with regulations) will not be subject to enforcement actions based on their previous non-compliance with the certification requirements. As stated in the December 9 announcement, “DOE will refrain from initiating an enforcement action for any violations of 10 C.F.R. 430.62 that are remedied prior to 30 days from the date of this Notice.”
Importantly, the grace period applies only to noncompliance with the certification requirements; it does not apply to violations of the energy efficiency standards themselves. Therefore, if a manufacturer has been selling a product that violates the energy efficiency standards, that manufacturer remains subject to an enforcement action for that violation. Indeed, DOE states in its December 9 announcement that “DOE intends to pursue immediately and aggressively all violations of the Department’s energy efficiency and water conservation standards.”
In addition, the grace period applies only to certification requirements for consumer appliances under 10 C.F.R. Part 430. It does not apply to certification requirements for commercial equipment under 10 C.F.R. Part 431, even though DOE’s enforcement initiative also includes such commercial equipment (e.g., certain electric motors and transformers).
During the grace period, manufacturers are encouraged to submit their new or updated compliance documentation to DOE electronically, via email, in accordance with instructions in DOE’s December 9 guidance. DOE has noted, however, that electronic filing will not be accepted after the grace period has ended.
The 30-day grace period provides an opportunity for manufacturers and private-label sellers of consumer appliances to minimize their exposure to DOE enforcement actions. During this period, it is prudent for manufacturers and private-label sellers to:
- Conduct an internal audit to assess the accuracy and completeness of the certification reports and compliance statements for all consumer appliances that are subject to DOE energy efficiency standards.
- Submit updated or new reports, as needed, to correct any errors or omissions in the previously submitted reports for covered products that are currently being sold in the United States.
- Ensure that the records supporting all certifications (including test data) are organized and indexed in a manner that makes them readily accessible for review by DOE.