ARTICLE
27 March 2024

Department Of Energy Efficiency Standards Stymied

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Gray Reed & McGraw LLP

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A full-service Texas law firm with offices in Dallas, Houston and Waco, Gray Reed provides legal services to companies ranging from start-up to Fortune 100 as well as high net worth individuals. For more information, visit www.grayreed.com.
If you deny the administrative state's need to dominate the most mundane aspects of your everyday life, consider Louisiana....
United States Energy and Natural Resources
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Coauthor Gunner West *

"Every unnecessary law helps fashion the noose we will ultimately be hung by."
A.E. Samaan

If you deny the administrative state's need to dominate the most mundane aspects of your everyday life, consider Louisiana, et al v. U.S. Department of Energy. It's more gradual than the noose but just as inevitable. They've come for the washers and dryers. Are the gas stoves next?

The Repeal Rule

The DOE in 2020 released Final Rules creating classes of clothes washers and dryers and dishwashers with short cycle times. This was in response to a petition by the Competitive Enterprise Institute to relieve those machines from burdensome regulations that impeded performance.

On the day of his inauguration President Biden ordered the DOE to repeal the appliance classes created by the 2020 rules.

Standing

Louisiana and 10 other states sued to invalidate the so-called "Repeal Rule". In response to the DOE's challenge to the states' standing, the states were able to show an injury in fact that was fairly traceable to the defendant's action and was likely to be redressed by a favorable decision.

The injury? The states lost the opportunity to purchase products precluded by the regulation, which constituted an injury in fact. Market participants are injured when their product choices are constrained by regulation. The states had lost the opportunity to purchase faster and more efficacious appliances.

Arbitrary and capricious

The Repeal Rule was arbitrary and capricious for two reasons. First, the agency failed to articulate a rational connection between the facts it found and the decision it made. Then, the agency's reasoning failed to account for relevant factors or events, which was a clear error of judgment. In short, the DOE did it because it could.

An agency is not precluded from revising policy, but changes require careful comparison of the agency's statements to ensure that the agency has recognized the change, reasoned through it without factual or legal error, and balanced all relevant interests affected by the change.

In the Repeal Rule the DOE stated that its energy conservation program must promote water conservation and regulate water use, but the court did not see how the DOE believed it had statutory authority to regulate water use in dishwashers and washing machines. An agency has no power to act unless and until Congress confers power upon it. The DOE's assertion of regulatory jurisdiction over water usage in these appliances was not in accordance with law and exceeded its statutory authority.

The regulations did the opposite of what they intended

Even if the DOE could consider the appliances, the DOE did not dispute that the 2020 efficiency standards were likely to make Americans use more energy and more water for the simple reason that, said the court, purportedly energy-efficient appliances don't work. In 2020 the DOE said that efficiency standards increased dishwasher cycle time from around one hour to around 2 1/2 hours. In 2011 the DOE said that handwashing that would be required because of the inefficiencies in the regulated appliances uses 350% more water and 104% more energy than machine washing.

Conclusory statements are not enough

The DOE supported its position with conclusory statements that did not constitute adequate agency consideration of important aspects of the problem. The DOE failed to account for relevant data and articulate a satisfactory explanation for its action, including a rational connection between facts found and the choice made.

The DOE's belief in 2022 that the 2020 rules violated the EPCA was an insufficient reason to justify the Repeal Rule and DOE failed to consider alternatives. That was arbitrary and capricious.

Your musical interlude.

* Gunner is a soon-to-graduate student at South Texas College of Law and soon-to-be associate at Gray Reed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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