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What To Expect In 2014

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I am asked at the beginning of every new year what’s going to happen over the next 12 months in Washington that’s going to affect the HVACR industry. I don’t have a crystal ball and I gave up trying to predict what Congress or the White House are going to do years ago. Either way, for the last few years the answer has been the same: not a whole lot will change.

Some may view this as a bad thing. If Congress can’t get its act together it’s a sign of poor governing. Others would prefer that the House and Senate stay in gridlock, because it keeps the government in check. That way no new laws or regulations are passed that create more red tape or hurdles to business. Just think about all the money that would be saved in legal fees on laws or regulations that end up being challenged in lengthy Court battles.

But the truth is whether Washington works for you, or not, is a matter of perspective and has to be considered on a case by case basis. It has nothing to do with party affiliation or one issue politics.

Right now a large contingent of the business community wants to see immigration reform and has been working with the Administration, Republicans, and Democrats to move a bill forward. And interestingly, some of the business community’s typical allies on the Republican side are staunchly opposed to an immigration bill.

Here’s what we know is going to happen over the next 12 months.

We’re going to have an election in November.

Don’t look now, but 2014 is an election year. Hard to believe that in just a few months the primary elections will start the onslaught of campaign ads, issue ads, and that now all too familiar phrase, “and I approve this message.”

The other phrase, and this is one we hear every two years, is “this is the most important election in our nation’s history.” It was only two years ago that we heard it was the most important election because of health care. And many would argue it was a referendum on the Affordable Care Act. This time around all the pundits will tell us that the mid-term election in November will set the stage for Obama’s lame duck years. And they will set up the next presidential election in 2016.

So, I’m going on record right here and guaranteeing that the upcoming election will get more hype than the last one and that more money will be spent on ads. I expect to hear lots of talk about how the attack ads are nastier than ever and how politicians are too beholden to special interest. But you probably already knew that.

The Department of Energy (DOE) will set an enforcement policy for regional standards.

On January 1, 2015, new regional standards for split system and package system central air conditioners will go into effect. So, that means that at some point during the next year the DOE will conduct a rulemaking to set up an enforcement policy for those regional standards.

But that doesn’t mean we’ll have a resolution for the furnace rules since they are facing an ongoing legal challenge in Court. The fate of the furnace rules and the potential settlement agreement that would rescind them are still up in the air. I hope the suit is resolved at some point in 2014.

It’s important for contractors to get involved in the rulemaking where the process affords any stakeholder to fi le comments on whatever enforcement policy is proposed. As we know from the Section 608 rules, if a regulation has a compliance burden, but no enforcement it tips the playing fi eld against anyone who follows the rules.

If regional standards are to work they have to have an enforcement policy that is strong enough to protect the compliant contractor from those who shortcut the rules, but not so draconian that they burden the industry with paperwork requirements or information disclosures. I can tell you the outcome of this rulemaking will forever change this industry, so even if you are frustrated by Washington you can’t sit on the sidelines.

More R-22

The U.S. Environmental Protection Agency (EPA) will write a rule that tells us how much virgin R-22 can be manufactured or imported into the U.S. for the years 2015-2019. And the amount for the year 2020 will effectively be zero.

The next major milestone in the decades long phase out of the production and use of HCFC refrigerants takes place in 2020 when the production and import ban takes effect. So, the next five years will see the “production curve” move downward on the scale. The arc of that curve will be important. The EPA has always looked to the transition away from HCFCs as smooth as possible. If the drop off to zero is too steep we could see more uncertainty for supply and price spikes.

Over the next year watch for the regional standards and HCFC allocation rules and be ready to chime in with comments. And mark your calendar for Election Day. It’s never too soon to get to know the candidates that will help our bottom line and protect your interests. For you it could be the most important election ever.

Charlie McCrudden

Posted In: ACCA Now, Government

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